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


Mortgage Bankers Association of Georgia P.O. Box 801 O Macon, GA 31202-0801 Phone #: (478) 743-8612 O Fax #: (478) 743-8278 Web site: 2011-2012 MBAG BOARD OF GOVERNORS Phone #


(770) 794-0011 (706) 821-6032 --------------(706) 739-1783 (770) 279-0222, ext. 225

DECEMBER 2011 Friday, December 9 Annual Lend-A-Hand Luncheon and Auction Villa Christina 4000 Summit Boulevard • Atlanta

Georgette Mooneyham Frank Lee Steve Copeland Greg Shumate Chum Balk JD Crow

President First Vice President Second Vice President Secretary/Treasurer Immediate Past President Executive Broker Liaison

Tony Boothe Ashley Crosslin Isaac Berry

State-at-Large (2012) State-at-Large (2012) State-at-Large (2012)

(404) 639-6642 (678) 772-6291 (770) 475-6161

Rick Darlington

AMBA President (2011-2012)

(800) 849-7944

JANUARY 2012 Tuesday, January 10 MBAG Board Meeting Villa Christina 4000 Summit Boulevard • Atlanta • 10:00 a.m.

AMBA Luncheon Villa Christina 4000 Summit Boulevard • Atlanta 11:30 a.m. Check-in • Noon Luncheon


DISTRICT I Amy Coile (2012) Kim Nelson (2013) Rick Darlington (2013)

(706) 559-4482 (678) 551-7121 (800) 849-7944

DISTRICT II Steven Alexander (2012) Bobby Taylor (2013) Kevin McDougal (2014)

(404) 264-7947 (478) 953-4490 (706) 860-4200

DISTRICT III Tracey Burdette (2012) Walter Moody (2012) Lisa Lively (2014)

(912) 330-9115 (478) 746-2063 (912) 355-9902

ASSOCIATE MEMBER GOVERNORS Maggie Reames (2012) Richard Shafritz (2012) Patti Griffith (2012) Michael O’Neill (2012)

(404) 943-9910, ext.112 (404) 255-8183 (229) 938-7425 (404) 250-3300

Loretta Salzano Richard Raymer Mo Thrash

Legal Counsel Government Affairs Legislative Liaison

(770) 248-2885 (678) 281-6499 (678) 281-6445

Teri Kramer Eric Knowland

Executive Director Assistant Executive Director

(478) 743-8612 (478) 743-8612

AMBA Board Meeting Villa Christina 4000 Summit Boulevard • Atlanta • 1:15 p.m. FEBRUARY 2012 Tuesday, February 14 MBAG Board Meeting Villa Christina 4000 Summit Boulevard • Atlanta • 10:00 a.m. AMBA Luncheon Villa Christina 4000 Summit Boulevard • Atlanta 11:30 a.m. Check-in • Noon Luncheon AMBA Board Meeting Villa Christina 4000 Summit Boulevard • Atlanta • 1:15 p.m.

AMBA Board Meeting Villa Christina 4000 Summit Boulevard • Atlanta • 1:15 p.m.

O NOVEMBER 2011 (search National Mortgage Professional Magazine)


For information on all MBAGF events, call (478) 743-8612 or visit O

MARCH 2012 Tuesday, March 13 MBAG Board Meeting Villa Christina 4000 Summit Boulevard • Atlanta • 10:00 a.m. AMBA Luncheon Villa Christina 4000 Summit Boulevard • Atlanta 11:30 a.m. Check-in • Noon Luncheon

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NAMB/WEST 2011 Loan Originator Conference Saturday-Monday, December 3-5 MGM Grand Las Vegas 3799 Las Vegas Boulevard South • Las Vegas

New in 2011! GA 4

Attendees of the 2011 NAMB/WEST Conference will receive a Passport for the Exhibit Hall on Sunday, Dec. 4. Passports will need to be validated by each exhibitor in order to be eligible for drawings. The grand prize drawing, a trip to Hawaii, will be held at the conclusion of the conference on Monday, Dec. 5. Attendees must be present to win. As a bonus, attendees who book their hotel with the group rate before Wednesday, Nov. 9 will receive an extra Passport.

Agenda at a glance




(Subject to change)

Saturday, December 3

Monday, December 5

10:00 a.m.-5:00 p.m. ......Registration Open

8:00 a.m.-5:00 p.m.........Registration Open (Premier Ballroom

10:00 a.m.-Noon ............Committee Meetings 1:00 p.m.-4:00 p.m.........NAMB Delegate Council Meeting 4:00 p.m.-6:00 p.m.........Opening Reception & PAC Auction Event

Foyer) 8:30 a.m.-10:30 a.m. ......NMLS Education: Reverse Mortgages (2 Hours) 8:30 a.m.-9:45 a.m.........Stop Sending Meatloaf Recipes to

Sunday, December 4 8:00 a.m.-5:00 p.m.........Registration Open (Premier Ballroom Foyer) 8:30 a.m.-9:30 a.m.........NMLS Education: FHA (1 Hour) 8:30 a.m.-9:30 a.m.........Three Proven Strategies Mortgage Professionals Can Work With Real Estate Agents Online to Generate More Buyers 9:40 a.m.-12:45 p.m. ...... NMLS Education: Federal Law (3 Hours) 9:40 a.m.-10:40 a.m. ......Stimulate the Economy With the 203K Loan 10:45 a.m.-12:45 p.m. .... Get Certified for VA Loans

Vegetarians: One-to-One Marketing Basics 10:00 a.m.-11:15 a.m. ....Unlocking Your Success: Disciplines That Make a Lasting Difference 10:45 a.m.-12:45 p.m. ....NMLS Education: Ethics (2 Hours) 11:30 a.m.-12:45 p.m. ....Session From Ron Vaimberg (topic to be determined) 12:45 p.m.-2:00 p.m. ......Networking Lunch 2:00 p.m.-3:00 p.m.........Using Social Media to Leverage Your Mortgage Business 3:15 p.m.-4:30 p.m. ......Successful Originations in Today’s Challeng and Dynamic Market

12:45 p.m.-2:00 p.m. ......Networking Lunch

4:30 p.m. ......................Grand Prize Drawing for a Trip to Hawaii

2:00 p.m.-6:00 p.m.........Expo Hall & Networking Reception

4:45 p.m.-6:30 p.m. ......NAMB Board Meeting

Conference fees Description

Early fees (on or before 11/09/11)

Regular fees (11/10/11 or later)

Member Registration Fee Access to all conference events. You must be an NAMB member in good standing by Friday, Nov. 18 to obtain the member rates. If you are not a member in good standing by this date you will be charged additional fees upon arrival to the conference. To check the status of your membership, go to



Non-Member Registration Fee Access to all conference events.



Visit Exhibit Hall Only This is for mortgage originators only.



Cancellation and refund policy: Notice of cancellation must be made in writing (no exceptions) and sent to or faxed to (303) 798-3668. Cancellations received by 5:00 p.m. EST on Wednesday, Nov. 9 will be refunded 50 percent of the registration fee that was paid. Any cancellation received after that date will receive no refund.

Hotel information NAMB/WEST has discounted rates for conference attendees at the MGM Grand Las Vegas, located at 3799 Las Vegas Boulevard South in Las Vegas ( Any attendee who books their reservations under the NAMB Group Rate will be eligible to receive an extra Passport. The extra Passport will increase your chances to win prizes at the conference. Group rates Friday, December 2 ....................$110 Saturday, December 3 ................$110 Sunday, December 4......................$80 Monday, December 5 ....................$80 Room rates are subject to state and local taxes. The group rate will be offered until Wednesday, Nov. 9.


For more information on the NAMB/WEST 2011 Loan Originator Conference, contact Kinsley at (303) 798-3664, e-mail or visit O

Reservations can be made by calling (877) 313-5757 or (702) 891-7777, or visiting In order to secure the NAMB Group Rate, you must identify yourself as part of the National Association of Mortgage Brokers (NAMB) Conference. Check in for the MGM Grand is 3:00 p.m. and check out is at 11:00 a.m. For your convenience, MGM Grand offers room registration at McCarran Airport. There is an Airport Registration Desk located in the south baggage claim area, near the bottom of the escalators descending from the C and D gates, next to carousel #1 and #2. Shuttle service is available from 9:00 a.m.-11:00 p.m. Porterage service is available 9:00 a.m.-5:00 p.m. only.

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Atlanta Woman Sentenced to Three Years for Reverse Mortgage Fraud Gia Joy Glasse-Harris of Atlanta has been sentenced to three years and one month in prison by United States District Judge Amy Totenberg on charges of conspiring to commit mortgage fraud. In addition to the prison sentence, Glasse-Harris will serve the final six months in home confinement, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $174,000. According to U.S. Attorney Sally Quillian Yates, the charges and other information presented in court: From May 2009 through February 2010, Glasse-Harris engaged in a conspiracy to defraud that involved reverse mortgages. Glasse-Harris, who is not a senior citizen, attempted to take advantage of the reverse mortgage program by using forged deeds to transfer property into the name of a senior citizen, while fraudulently inflating the value of the property by more than five times the true value. Glasse-Harris then attempted to “sell” the property at the inflated value to a second senior citizen, using fraudulent “gift” letters to create a down payment, so that the senior citizen would appear to have equity in the property. Her attempt to obtain this reverse mortgage was declined by the lender, and her subsequent efforts at additional reverse loan fraud in the name of another senior citizen were thwarted by a government sting that implicated Glasse-Harris and others. “We will not stand by and allow criminals to victimize senior citizens, the FHA or the lenders, and we will continue our commitment to end the devastating effects of mortgage fraud,” said Yates.

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National Mortgage Professional Magazine recognizes the support of those Mortgage Professionals who have stepped up to pay tribute to the men and women who have fought to preserve freedom for our great country. We will be featuring these Mortgage Professionals in our Mortgage Heroes feature in National Mortgage Professional Magazine. We want to hear from you if you:

# Make significant donations to any veteran's organizations # Hosts or sponsors events recognizing and paying tribute to veterans

# Provides support for the families of veterans # Any other noteworthy assistance to help improve the lives of veterans and their loved ones

To be considered for Mortgage Heroes, visit

Q3 Mortgage Delinquencies in Georgia Rise to 11.28 Percent The delinquency rate for mortgage loans on residential properties in Georgia was 11.28 percent at the end of the third quarter of 2011, an increase of 13 basis points from the second quarter of 2011, according to the Mortgage Bankers Association (MBA). The delinquency rate excludes loans in the process of foreclosure. The percentage of loans in Georgia on which foreclosure was started during the quarter rose 13 basis points to 1.41 percent, while the percentage of loans in the foreclosure process at the end of the quarter fell 9 basis points to 3.2 percent. The delinquency rates are not seasonally adjusted. Mortgage delinquency rates normally rise between the second and third quarters of the year, peaking in the fourth quarter, due to a variety of seasonal factors. As noted in recent quarters, the percentage of loans in the foreclosure process is significantly affected by the foreclosure regime of the specific state. Overall, states with a judicial foreclosure system are seeing a buildup of loans in the foreclosure process, while states with a non-judicial process are seeing slight declines. This is despite a relatively even distribution of increases in new foreclosures started across all states, judicial or non-judicial. The delinquency rate for prime adjustable rate mortgages (ARMs) decreased 36 basis points to 10.41 percent and the rate for prime fixed rate mortgage loans decreased three basis points to 6.08 percent. The delinquency rate for the sub-prime ARMs decreased 164 basis points to 29.35 percent, while the rate for sub-prime fixed rate loans decreased 21 basis points to 27.56 percent. The delinquency rates for FHA and VA loans were 19.61 percent and 9.1 percent, respectively—up 66 basis points for FHA loans and up four basis points for VA loans. The foreclosure starts rate for prime ARMs in Georgia increased 26 basis points to 2.18 percent, while the rate for prime fixed rate loans increased eight basis points to 0.99 percent. The foreclosure starts rate for sub-prime ARMs increased 122 basis points to 5.72 percent, while the rate for sub-prime fixed rate loans increased nine basis points to 3.15 percent. The percentage of prime ARMs in foreclosure decreased 28 basis points to 4.89 percent and decreased 13 basis points to 2.01 percent for prime fixed rate loans. The rate for sub-prime ARMs increased 25 basis points to 13.68 percent, while the rate for sub-prime fixed rate loans decreased 31 basis points to 7.01 percent. The percentage of FHA loans in foreclosure increased three basis points to 3.48 percent. The percentage of VA loans in foreclosure decreased two basis points to 1.87 percent. Among the 50 states and the District of Columbia, Georgia ranked second in delinquencies and sixth in foreclosures started. Mississippi ranked first in delinquencies with a rate of 13.18 percent and Nevada ranked first in foreclosure starts with a rate of 2.48 percent. On a national level, the delinquency rate for mortgage loans on oneto four-unit residential properties was 8.20 percent on a non-seasonally adjusted basis, up nine basis points from 8.11 percent in the second quarter of 2011. The seasonally adjusted delinquency rate on residential properties was 7.99 percent in the third quarter, down 45 basis points from last quarter’s seasonally adjusted rate. The non-seasonally adjusted percentage of loans on which foreclosure was started during the quarter increased 12 basis points to 1.08 percent, while the non-seasonally adjusted percentage of loans in the foreclosure process at the end of the quarter remained unchanged at 4.43 percent.

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Branch Manager Business Analyst Business Development Manager Client Relationship Manager Client Relationship Specialist Commercial Loan Officer Corporate Sales Credit Analyst Inside Sales Legal Assistant Licensing Assistant Loan Administration Manager Loan Originator

Advisor Asset Protection Management Bank President Collateral Asset Manager

Mortgage Loan Processor Mortgage Originator National Account Manager National Sales Rep PC Support Admin Post Closing QC Expert Processor Regional Vice President REO Closer Retail Branch Manager Retirement Planner Reverse Mortgage Specialist Sales Manager Secondary Marketing Analyst Senior Loan Officer Senior Underwriter Senior Vice President Software Engineer Underwriter Vice President Wholesale Account Executive




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November 2011





Volume 3, Number 11

Web Site



AllRegs ............................................................ ............................35

A Special Look at “Tomorrow’s Mortgage Technology” Compliance Tools Directory

Bay Equity LLC ................................................ ..................................................37 Benchmark Mortgage ...................................... ..............Inside Front Cover Calyx Software ................................................ ......................................38


Technology Supports the People Who Drive Our Business By Eric Wiley Moving Through the Short Sale Processing Using Technology By Laura Hadley Is Mortgage Technology Really the Wave of the Future? By Tommy A. Duncan, CMT Save Time, Money and be More Successful Utilizing Free Lender Technologies By Kristina Bennett

CBC National Bank..........................................................................................................................7 Elliott and Company Appraisers, Inc................... ................................16


Flagstar Wholesale Lending .............................. ......................Back Cover Freedom Mortgage .......................................... ......................Inside Back Cover


Frost Mortgage Lending Group .......................... ..............................37 GSF Funding .................................................... ....................................................11


Hometown Lenders .......................................... ........................GA7 & 25 HVCC Appraisal Ordering .................................. ..........................30


Icon Residential Lenders, LLC ............................ ................................5 & 28 Land Home Financial Services .......................... ....................................16


Lending Career, LLC ........................................ ......................................36

The Elite Performer: Confide in Confidence By Andy W. Harris, CRMS

Menlo Park Funding ........................................ ................................41

ValueNation: Implementing Quality Control With Automated and Manual Review Processes By David Rasmussen Loan Originator Compensation: The Regulatory Examination By Jonathan Foxx Lender Insurance to Play a Key Role in the Future of Mortgage Banking By Larry Cason The Secondary Market Overview: From Bonds to Production … It Ain’t That Bad By Dave Hershman

Loyalty Express ................................................ ......................................16


NAMB West...................................................... ..........................GA4, GA5 & 27

6 6 8

Nationwide Equities Corp. ................................ ..............................................17


PB Financial Group Corp. .................................. ..............................................28 Polaris Home Funding Corp. (Branches).............. ..................13

REMN (Real Estate Mortgage Network)................ ....................................15 Ridgewood Savings Bank .................................. ....................................29


Shortsale Speedway.......................................... ................33 TMS Funding.................................................... ..........................................23


The NAMB Perspective


NMP Mortgage Professional of the Month: John Walsh, President of Total Mortgage Services


Lykken on Leadership: The Compassionate Side of Leadership By David Lykken


Give and You Shall Receive By Mary Beth Doyle


FCRA Certification for Your Employees: Coming to a Credit Reporting Agency Near You!


Columns 9 10

NMP News Flash: November 2011


New to Market


NMP Mortgage Professional Resource Registry


NMP Calendar of Events



USA Cares Mortgage Heroes: Mary Jo Traversone of Homestead Funding Corporation


Three Ways to Prepare Your Referral Network for 2012 By Erik Wind

Veros Real Estate Solutions .............................. ..............................................43 


Heard on the Street

NAPMW .......................................................... ..................................................14

Polaris Home Funding Corp. (Wholesale) ............ ............................................31

FHA Insider: FHA Revises Lender Approval Requirements By Jeff Mifsud

By Terry W. Clemans

Mortgage Brokers Network Corp, Inc. ................ ........................9

November 2011 Volume 3 • Number 11



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

1220 Wantagh Avenue • Wantagh, NY 11793-2202 Phone: (516) 409-5555 / (888) 409-9770 Fax: (516) 409-4600 Web site: STAFF Eric C. Peck Editor-in-Chief (516) 409-5555, ext. 312 Andrew T. Berman Executive Vice President (516) 409-5555, ext. 333 Joey Arendt Art Director Jon Blake Advertising Coordinator (516) 409-5555, ext. 301 Kelsey Domino Executive Sales Assistant (516) 409-5555, ext. 316


Tara Cook Billing Coordinator (516) 409-5555, ext. 324

ARTICLE SUBMISSIONS/PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck at (516) 409-5555, ext. 312 or e-mail The deadline for submissions is the first of the month prior to the target issue. SUBSCRIPTIONS To receive subscription information, please 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. 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 Credit 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. MO


Starting off with a boost of confidence I hope you’ve been following “The Elite Performer” series from Andy W. Harris, CRMS in the pages of our publication, as this month is another great motivator for success. This time around on page 4, Andy focuses on the importance of being confident in not only your business, but all aspects of life. Following Andy is another installment of our ValueNation column on page 6, where David Rasmussen of Veros Real Estate Solutions discusses implementing quality control (QC) within automated and manual processes. Jonathan Foxx follows also on page 6 with another very detailed feature, “Loan Originator Compensation: The Regulatory Examination,” where Jonathan shares his wealth of regulatory and compliance advice as loan originators (LOs) prepare for their first LO compensation examination. Once again, Mr. Foxx provides the readers of National Mortgage Professional Magazine with more priceless material. As lenders face an unknown barrage of regulations from the Dodd-Frank Act in an unstable housing market, it’s always nice to be able to manage some of that risk. Later in the issue on page 12, our FHA expert Jeff Mifsud reviews Mortgagee Letter 2011-34’s impact on FHA lender approvals in his “FHA Insider” column. On page 18, NAMB President Donald J. Frommeyer, CRMS, shares some of the highlights of next month’s NAMB/WEST Loan Originator Conference at the MGM Grand in Las Vegas.

What does it take to be a leader today? David Lykken of Mortgage Banking Solutions is back with another installment in his “Lykken of Leadership” series on page 24, as this month, he focuses on compassion as one of the seven characteristics of leadership. This is yet another great submission from Mr. Lykken that will help you continue on your path to becoming a better leader.

Terry’s back with an update on the world of credit reporting … opportunity to be a credit report expert? This month, we welcome Terry W. Clemans, executive director of the NCRA, back in the pages of National Mortgage Professional Magazine. Terry’s return to the publication on page 32 discusses a new certification program that mortgage professionals can take advantage of to really master the credit report. There is a pretty good chance that you have a strong working knowledge of this topic already, so a little self-study thanks to the NCRA and your sponsoring credit reporting agency, and you can be well on your way to receiving a your FCRA (Fair Credit Reporting Act) certification. Yet another program to help boost the confidence that your prospects have in you as their trusted advisor.

NMP’s Mortgage Professional of the Month On page 20, we feature this month’s NMP Mortgage Professional of the Month, John Walsh, president of Total Mortgage Services. By understanding how to underwrite a loan and stressing the importance of a strong back office as the ultimate driver of production, John’s firm has gone from a mortgage broker to a national multichannel mortgage banker. John is a heck of a nice guy as well and we appreciate John sharing the secrets of his success in our pages this month with our readers.

Tomorrow’s technology today A good friend of mine recently pointed out that most innovation these days comes due to regulatory requirements. It’s like the R&D for the industry’s top technology firms are so busy focusing on Dodd-Frank and other regulations coming down the pike, that they are not able to look into major breakthroughs to help improve their operations. I think now the big innovation is how we use this technology we have access to. We have some folks who have contributed to this month’s “Special Look at Tomorrow’s Mortgage Technology” who see how to take the technology we have access to today and take it to a whole new level. The section begins on page 40 with a piece from Eric Wiley of Pacific Residential Mortgage talking about using basic time management tools, combined with automatically generated LO-integrated communication, to help your production staff focus more on generating business and less on managing systems. Add a little social media to the music and you are on your way to tomorrow’s ever-flowing pipeline of loans. If there is an area that really need technology, it’s the area of short sales. On page 41, Laura Hadley of Quandis Inc. talks about reducing the short sale process from 12-plus months to 60 days through the use of technology. Impossible you say? Well make sure you read Laura’s piece. Technology is only as good as the people controlling it. Tommy A. Duncan, CMT of Quality Mortgage Services on page 42 shares with us how it’s really a mix of technology and human interaction that can help ensure that we put out quality loans. Wrapping up the section on page 43 is a contribution from Kristina Bennett of United Wholesale Mortgage that goes into what free technology tools mortgage brokers should be looking for from their wholesale lending partners.

Thanks for giving us this opportunity We really want to make sure you know how much we appreciate this opportunity to keep you informed and how serious we take this mission. We know that our readers are the hardest working, brightest minds and best in class mortgage professionals. We also know that we are only as good as our last issue. So with that in mind, please understand that we’re always looking for feedback from you. I want to hear it all! Unlike keeping your displeasure with your mother-in-law’s dry turkey to yourself, you cannot hurt our feelings … we’re New Yorkers! Please e-mail me personally at with any comments, compliments, rants, raves, good, bad, ugly—we want it ALL. Until next month ...







ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact Senior National Account Executive Karen Krizman at (516) 409-5555, ext. 326 or e-mail

A Message From NMP Media Corp. Executive Vice President Andrew T. Berman




National Mortgage Professional Magazine is published monthly by NMP Media Corp. Copyright © 2011 NMP Media Corp.

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

The Association of Mortgage Professionals

National Association of Professional Mortgage Women

2701 West 15th Street, Suite 536  Plano, TX 75075 Phone #: (703) 342-5900  Fax #: (530) 484-2906 Web site:

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

NAMB Board of Directors

National Board of Directors 2011-2012

OFFICERS President—Donald J. Frommeyer, CRMS Amtrust Mortgage Funding Inc. 200 Medical Drive, Suite D Carmel, IN 46032 (317) 575-4355 Vice President—Michael Anderson, CRMS Essential Mortgage 3029 S. Sherwood Forest Boulevard, Suite 200 Baton Rouge, LA 70816 (225) 297-7704 Treasurer—John Councilman, CMC, CRMS AMC Mortgage Corporation 2613 Fallston Road Fallston, MD 21047 (410) 557-6400 Secretary—Olga Kucerak, CRMS Crown Lending 222 East Houston, Suite 1600 San Antonio, TX 78205 (210) 828-3384 Past President—Jim Pair, CMC Mortgage Associates Corpus Christi 6262 Weber Road, Suite 208 Corpus Christi, TX 78413 (361) 853-9987

DIRECTORS Rocke Andrews, CMC, CRMS Lending Arizona LLC 1996 North Kolb Tucson, AZ 85715 (520) 886-7283

Deb Killian, CRMS GMAC 246 Federal Road, Unit C-24 Brookfield, CT 06804 (203) 778-9999, ext. 103 Linda McCoy Mortgage Team 1 Inc. 6336 Picadilly Square Drive Mobile, AL 36609 (251) 610-0494

Vice President-Eastern Region Christine Pollard (607) 656-5005

Senior Vice President Jill Kinsman (206) 344-7827

Secretary Katheryn M. Farrell (509) 528-0349

Vice President-Northwestern Region Nita Cook, GML, CME, CMI (360) 705-5053

Treasurer Jeanne Evans, CME (918) 431-0155

Vice President-Western Region Lyman King III, CME, CMI (916) 967-4653

Parliamentarian Hulene Bridgman-Works (800) 827-3034

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


2011 Board of Directors & Staff Tom Conwell President (800) 445-4922, ext. 1010 Donald J. Unger Vice President (303) 670-7993, ext. 222 Daphne Large Treasurer (901) 259-5105 Marty Flynn Ex-Officio (925) 831-3520, ext. 224

Janet Curtis Director—New Membership & Elections Co-Chair (212) 224-6121 Renee Erickson Director—Tenant Screening Co-Chair (800) 311-1585, ext. 2101 Nancy Fedich Director—Conference Chair (908) 813-8555, ext. 3010

Judy Ryan Director—New Membership & Elections Chair (800) 929-3400, ext. 201 William Bower Director—Tenant Screening Chair (800) 288-4757 Tom Swider Director—Legislative Co-Chair Mike Brown Director—Technology Chair (800) 285-6691 Susan Cataldo Director—Education & Compliance Chair (404) 303-8656, ext. 204

(856) 787-9005, ext. 1201 Terry Clemans Executive Director (630) 539-1525 Jan Gerber Office Manager/Membership Services (630) 539-1525


Walter Scott Excalibur Financial Inc. 175 Strafford Avenue, Suite 1 Wayne, PA 19087 (215) 669-3273

President-Elect Candace Smith, CME (512) 329-9040


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

Vice President-Central Region Lisa Puckett, CME (405) 741-5485 

Fred Arnold, CMC American Family Funding 24961 The Old Road, Suite 101 Stevenson Ranch, CA 91381 (661) 284-1150

President Laurie Abshier, GML, CME, CMI (661) 283-1262

Confide in Confidence he definition of confidence is described as a state of being certain either that a hypothesis or prediction is correct, or that a chosen course of action is the best or most effective. The definition of self-confidence is simply having confidence in one self and in one’s powers and abilities. Self-confidence is vital in business. It allows a person to be fearless in their pursuit of success, no matter what obstacles they face. Even failure cannot bring the confident individual down because of their positive outlook and ability to see past the hurdles we all face in life. A few benefits of having self-confidence include:





 People look up to self-confident people  Self-confident people are better friends and partners  Self-confident people are able to meet work deadlines  Self-confident people have a positive outlook  Self-confident people are often healthier  Self-confident people can spend more time at home and with family  Self-confident people have higher incomes (close more loans)  Self-confident people have a greater influence on clients and business partners True confidence cannot be produced artificially, and it’s very important not to confuse with the “false confidence” which is arrogance. Arrogance is defined as having unmerited confidence— believing someone or something is capable or correct when they are not. So in

“Too many people overvalue what they are not and undervalue what they are.” —Malcom S. Forbes

reality, you cannot have one with the other. Most who have been around an arrogant person would agree that their behavior is generated by insecurities and to compensate for an area of weakness. Arrogance can hurt personal and professional relationships unless exposed and addressed. The self-confident will always be the best leaders. Our industry is a perfect example of this. Those who have confidence and a vision for their career were able to get past every hurdle they faced and are thriving today. Those who were driven with arrogance or by greed were significantly impacted by the recent industry changes. If one is living an artificial life or running an artificial business by compensating for weakness, then the trail will always lead them to a cliff. Be proud of who you are and what you do. Put your pride aside and confide in confidence!

Tip of the month Stop playing Angry Birds at work. Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and 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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Loan Originator Compensation: The Regulatory Examination The Easy Part is Over … Now the Real Fun Begins By Jonathan Foxx

Implementing Quality Control with Automated and Manual Review Processes By David Rasmussen


In today’s consistently evolving mortgage environment, thorough quality control (QC) procedures surrounding valuation management are extremely important for safe and successful lending practices. Any organization that has not taken a long and hard look at their own procedures is certain to face regulatory scrutiny, not to mention future challenges in maintaining a profitable business. Even for those that have recently redefined QC procedures, it is important to periodically re-evaluate and compare them against current industry best practices. Whether funding a loan, making a refinance decision or investing in a loan/pool of loans, the most prudent QC examination requires a combined use of a valuation management platform and a manual review approach.



Automated quality control Highly competitive companies in the mortgage industry are utilizing valuation management tools to automatically route base decisions. For example, when an incomplete appraisal lands on the desk of a reviewer for manual processing, significant time is wasted assessing the insufficient report and additional time is lost coordinating with the appraisal provider for resubmission. Time and energy is maximized when an automated system immediately examines the appraisal before it hits the desk of the reviewer. Valuation management platforms can ensure essential compliance standards, such as conformance with the Uniform Appraisal Dataset (UAD) standards, the Uniform Collateral Data Portal (UCDP) hard stops and essential underwriting standards. These automated platforms offer client-defined criteria that provide the ability to modify rule sets and adjust to changes in internal/external regulations. Additional benefits include the assurance against arbitrary or subjective decisions as well as protection against human error. All valuations thereby achieve a “minimum standard” that is set by the organization before valuations are routed to a reviewer for a manual examination (if necessary). High-performance systems will also provide the automated rule functionality to order and compare side-by-side alternative products such as automated valuation models (AVMs), data and analytic risk products. Thresholds can be set such that these products are only ordered when deemed appropriate and can be linked together under a single loan transaction for easy reference. Additional automation of product completeness, compliance and the data creditability allow organizations already strapped for resources to make prompt decisions.

Manual quality control As valuable as automated platforms are, they cannot entirely replace the human element in making qualitative decisions applicable to mortgage transactions. The task of manually reviewing an appraisal report should be done by a trained professional with a keen eye and the ability to quickly perform as continued on page 12


Since April 6, 2011, the mortgage industry has been required to implement the new loan originator (LO) compensation rules (Rule). The Rule applies to closed-end transactions secured by a dwelling where the creditor receives a loan application on or after April 6, 2011.1 The Rule placed restrictions on residential mortgage loan transactions in order to protect consumers against the unfairness, deception, and abuse that can arise with certain loan origination compensation practices, generally prohibits payments to loan originators based on loan terms and conditions, eliminates dual compensation to originators by consumers and any other person and prohibits “steering” consumers to loans to receive greater compensation. I have extensively explored the features of this Rule, unraveling its complexity in articles, newsletters, presentations, and panels.2 Indeed, I have even published a compendium of analysis, called the FAQs Outline–Loan Originator Compensation, which, as of this writing, consists of more than 400 Frequently Asked Questions and reaches in excess of 130 pages.3 These are deep and narrow waters, and considerable caution is needed in order to navigate their many demanding twists and turns. The development of these rules, from a regulatory perspective, stretches back to August 26, 2009, when the Federal Reserve Board (FRB) published a Proposed Rule in the Federal Register pertaining to closed-end credit; to July 21, 2010, when the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank)4 enacted Title XIV into law, which amended the Truth-inLending Act (TILA) to establish certain mortgage loan origination standards; then to Aug. 16, 2010, when the FRB published its Final Rules amending Regulation Z (TILA’s implementing regulation); on through Sept. 24, 2010, as the FRB issued final rulemaking and official staff commentary with respect to the loan originator compensation rules and antisteering provisions (Rule); and finally coming to a virtual full stop on Jan. 26, 2011, when the FRB issued its “Compliance Guide for Small Entities on Loan Originator Compensation and Steering.”5 After that, the FRB offered some conference calls, a Webinar—which cleared up some confusion, while causing still other confusion—and occasional

updates of the oral, rather than the written, official variety.6 When April 6, 2011 arrived, the mortgage industry was still scrambling to understand the Rule, how to implement it across various origination channels, and, most importantly, how to integrate it into operational, logistical, and financial components. Vendors provided considerable updates and integration features. Nevertheless, for months afterward the Rule continued to perplex and frustrate, particularly with respect to properly implementing disclosures and compensation plans. It still causes considerable consternation. As we all know, generally there is no regulation issued—whether the statutes are at the federal or state level—that does not have a corresponding regulatory examination to assure enforcement. And so it goes: on Oct. 6, 2011—exactly six months to the day when the Rule became effective—the first examination guidelines for loan originator compensation were promulgated.7 In the “State Non-Depository Examiner Guidelines for Regulation Z—Loan Originator Compensation Rule,” hereinafter “Examiner Guidelines,” issued by the Multi-State Mortgage Committee (MMC), we now have a pretty good idea of the direction that federal and state regulators will be taking in their regulatory examinations for loan originator compensation. The MMC is a 10-state representative body created by the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR).8 Are these examination guidelines perfectly worked through? Not really. Not yet. After some field testing, we should expect revisions. But as a first stab at a complex issue, they are helpful in giving a sense of the kind of information and documentation that examiners will be reviewing. These are revised procedures and they supersede the Regulation Z Interagency examination procedures. The Task Force on Consumer Compliance of the Federal Financial Institutions Examination Council (FFIEC) has approved interagency examination procedures for Regulation Z—Truth-in-Lending, including the Rule. The Examiner Guidelines supplement the Interagency procedures and are intended to assist state regulators of non-depository mortgage loan originators and creditors in standardized and uniform reviews of the Rule. When the aforementioned Examiner Guidelines were issued, my firm re-set our audit and due diligence reviews for the Rule to accord with them, even in continued on page 15

Big enough to matter. Small enough to care! In the current mortgage environment, every originator is looking for a true business partner when working with their wholesale lenders. The most important aspect of being a lender in today’s market is the ability to build and maintain a meaningful relationship with each customer. At CBC National Bank, we understand that these meaningful relationships coupled with competitive pricing and efficient technology are the pillars of today’s lending environment. When working with CBC you have a dedicated team that provides you: • Direct access to all underwriters and management


• Competitive pricing on a variety of loan programs • A user-friendly LOS system with real-time loan tracking

We work to make it happen!

• Respect and customer service at all times. Service is paramount for a successful wholesale company like CBC National Bank.

CBC National Bank strives to earn your business and we look forward for the opportunity to show you how much we care!

For more information please contact us at 888-486-4304.


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• Regular communication with all staff members through phone calls, emails, and promptly returned voicemails 

• The ability to work closely with your Account Executive & designated Loan Coordinator, who together will give you the confidence to know your target closing date will be met

Lender Insurance to Play a Key Role in the Future of Mortgage Banking By Larry Cason Economic conditions and ongoing regulatory changes continue to alter the course of the mortgage banking industry. In an ever-evolving time for mortgage professionals, the idea of lender insurance products may be the shelter that many seek. Very few lending institutions can claim that all their borrowers are insured—a huge risk for them. Organizations that provide lender-placed insurance to institutions sell nothing less than peace of mind in a very precarious time. According to recent statistics from RealtyTrac, an online marketplace for foreclosure properties, foreclosure filings have been on the rise as homebuyers continue to default on mortgage payments. The Web site stated that foreclosure filings were up seven percent since August 2011. According to the report, 228,098 homes in the U.S. received foreclosure filings during that month. Regulatory changes are also set to establish new standards in terms of compliance and required reporting, adding additional pressure for lenders

to more effectively control costs and increase efficiencies in managing their loan production pipelines.

Coping with uncertainty in industry regulations Lenders remain unclear on what will be required of them in the coming months and years as the full breadth of pending legislation within the Dodd-Frank Wall Street Reform and Consumers Protection Act unfolds. The U.S. federal financial regulation statute could soon alter much of the nation’s financial services industry. Enacted in July 2010, the Act implements a level of demands on lenders, including changes to borrower disclosure forms. The notification process for lender-placed insurance now includes the provision that two disclosure letters must be sent to the borrower, but it is not yet clear what types of documents will be required or what the subsequent cost to lenders might be. In general, the burden of identifying the right insurance coverage can be problematic, and resourcestrapped lenders may not be positioned to effectively manage this process in-house. Third-party providers can alleviate this pressure on lenders, enabling them to better

focus on managing their core competencies—successfully originating and closing loans. Qualified providers can provide coverage to force place insurance properties when a borrower fails to maintain his or her own insurance, whether it be single family residential homes, manufactured homes, condominiums or commercial buildings. Typically, third-party providers can deliver superior levels of expertise and experience relative to the inner workings of the insurance industry, positioning lenders to more appropriately match individual borrowers with the most appropriate insurance offering for their unique situation. Through relationships with national insurance carriers and managing general agencies, third-party providers help contain costs for lenders by compiling and providing research of the best insurance options available, and continuing to provide relevant information that enables lenders to maintain the best plan as their business evolves. More often than not, lenders shop much like a typical consumer does— find the insurance plan that meets their immediate needs in the fastest way possible, which often means accepting a product with inadequate coverage or pricing.

Lenders must be aware of required insurance options to reduce risks Certain types of insurance are strictly regulated by the federal government, such as flood insurance. Even in certain areas with little risk for such disasters, lenders should be prepared to protect their properties. No lender is exempt from the requirements in place to insure every mortgage loan within its portfolio that lies within a Special Flood Hazard Area has coverage in place. In order to guarantee full compliance, governmental and regulatory agencies nationwide are actively auditing lenders. In many instances, penalties are being imposed for failure to comply. Thirdparty providers help lenders maintain regulatory compliance through flood programs designed specifically for mortgage servicers. Policy limits can vary from up to $250,000 on residential properties to $500,000 on commercial properties. Technology also exists that allows for automated flood zone determination, allowing lenders to further improve compliance in a more cost-effective manner. From a simple street address, lenders can now virtually check to see if a property is within a flood zone and continued on page 34

StreetLinks Chooses MercuryDirect for UMDP Compliance

continued on page 17


Total Mortgage Services LLC has announced that it has received approval with Fannie Mae to be a seller/servicer for one- to four-family first lien mortgages and can now retain mortgage servicing rights, expand product offerings as well as sell and pool loans into mortgage backed securities. Total Mortgage has been assigned Fannie Mae Seller Service Number: 27127-000-3. “We are extremely pleased to be an approved seller/servicer with Fannie Mae after going through their rigorous

Bay Equity Home Loans has announced that Valencia, Calif.-based TriStar Home Loans has joined its team of retail branches. TriStar Home Loans was co-founded by Hady Breidy in June 2000, and the company currently has five employees in addition to eight loan officers and occupies a 5,500-sq. ft. space. TriStar states that approximately 70 percent of their monthly volume funded as purchase transactions. Bay Equity was founded in June 2007 by three brothers, Brett, Jon and Casey McGovern, and funded its first loan 11 months later. To date, the firm has funded more than 7,500 loans totaling more than $3 billion. The company is headquartered in the heart of San Francisco’s Financial District. “Because of all the regulatory changes impacting mortgage brokers, we began to consider becoming mortgage bankers about two years ago,” said Breidy, CEO of TriStar Home Loans, whose company does an annual volume of approximately $125 million. “We spoke with a couple of lenders and those discussions, which seemed very promising, ended very disappointing. Since we had done business with Bay Equity on the wholesale side for quite some time, the [McGovern] brothers asked if we would visit them and check out the retail side of their business. They showed us what they do, shared with us their



Total Mortgage Approved as a Fannie Mae Seller Servicer

Bay Equity Continues Its Expansion With Latest Acquisition 

a la mode inc. has announced that StreetLinks Lender Solutions has chosen to launch a MercuryDirect plug-in to receive the Native XML appraisal data needed for streamlined compliance with the new mandatory Uniform Mortgage Data Program (UMDP) initiative set forth by the government-sponsored enterprises (GSEs). StreetLinks’ MercuryDirect plug-in is a custom application that provides direct access to the largest nationwide network of real estate appraisers. Using the MercuryDirect plug-in’s ability to integrate custom rule sets directly into report delivery, StreetLinks’ extensive quality control (QC) rules run against every appraisal report prior to delivery. After passing the QC checks, the plug-in bundles both PDF and Native MISMO 2.6 XML formats into the transmitted file, and then delivers it to the StreetLinks platform. “A large percentage of our appraiser partners utilize a la mode’s industry leading desktop appraisal applications and tools,” said StreetLinks Chief Operating Officer Tony Ebeyer. “Our MercuryDirect plug-in will eliminate delays and errors that are inherent in the PDF to XML conversion process. UADcompliant XML data will flow seamlessly from the appraiser’s report creation software to the GSEs. The result is a huge increase in efficiency and 100 percent data accuracy, which is a win for everyone involved, including the appraiser, the lender, and the GSEs.”

approval process,” said John Walsh, president of Total Mortgage Services. “Total Mortgage is committed to delivering the perfect mortgage, not only to our investors, but also to borrowers and this approval will further enhance our pricing advantage, while positioning us to leverage our operational infrastructure to drive our geographic and channel expansion.” Total Mortgage is currently licensed in California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Massachusetts, Maryland, Maine, Michigan, Mississippi, New Jersey, New York, New Hampshire, North Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Vermont and Virginia and the District of Columbia. Total Mortgage currently has five additional state licenses pending.

USA Cares Mortgage Heros Mary Jo Traversone Homestead Funding Corporation, Albany N.Y. “I work closely with borrowers to ensure successful closings. I have been able to help borrowers who have been declined by other institutions—just because they don’t take the time to know the benefits of the VA loan.” —Mary Jo Traversone, Homestead Funding Corporation, Albany N.Y.




When Mary Jo Traversone agrees to work a world away to help a veteran, she means it! “I have to say,” said Mary Jo, ”I find it very thrilling to have a troop return from overseas and call me, as my information was posted overseas. I do consider myself an advocate for veterans.” What a relief for a serviceperson to know that, even from a war zone, someone is working to help them secure appropriate housing upon their return. Mary Jo has been originating U.S. Department of Veterans Affairs (VA) loans for more than 25 years as a loan officer. As a loan originator, she has worked with small and large corporations, providing VA loans for purchase and refinance transactions. She’s pleased with her recent move to Homestead Funding Corporation. “They process and underwrite locally in my Albany office,” she said. “I feel they use ‘common sense’ underwriting. Homestead Funding is a mortgage banker dedicated to working with veterans, while many other agencies are eliminating VA programs.” She keeps current with military affairs by attending veterans’ functions and participating in outreach programs. “I’ve been able to help borrowers who have been declined by other institutions,” she continued, “just because they don’t take the time to know the benefits of the VA loan.” When she helped a 100 percent service-connected disabled veteran with prior credit issues to purchase a home, it was her most memorable moment. “Due to his disability, he was unable to work and had lost a home to foreclosure. When he attained his 100 percent disability rating, I was able to guide him through the loan process. The extensive documentation required to substantiate the reason for the foreclosure was a bit difficult, but we managed to get his loan done.” Continually telling the borrower to have faith and that soon he would be a homeowner again, she was able to have contracts drawn with a seller contribution to cover closing fees. The borrower actually received a small refund at closing. “This borrower was declined by another institution, and his Veterans Counselor suggested he contact me,” said Mary Jo. “I was thrilled to help him own a home again. I enjoy working with veterans. They’ve given so much of themselves to protect our country, whether it be life, limb or sanity. I am proud to ‘serve those who have honorably served our nation.’” We all know not every transaction ends in a closed loan. Mary Jo tells all of her borrowers that they are a work in progress. “If they aren’t ready today due to credit or employment, I advise what’s required to meet guidelines and set a time in the future to follow up,” she said. Mary Jo is building military homeowners, one home at a time and that’s a hero in any book.

Mary Jo Traversone Homestead Funding Corporation NMLS ID# 589509 8 Airline Drive Albany, N.Y. 12205 Phone#: (716) 696-0036

Be a Mortgage Hero! This recognition is free to Certified Military Housing Specialists. Take the FREE Certified Military Housing Specialist course offered online by USA Cares and tell us how you are “Helping those who defend our homes, preserve their own.” Please contact Program Manager Beverly Frase at to join our national team and be our next Mortgage Hero. We want to recognize you!

It Ain’t That Bad ead the title of this month’s col- ent overall recession. Construction umn and you will want to give spending is up, the service sector is me a grammar lesson and possi- expanding, consumers are still spendbly have my head examined. Okay … ing cautiously and manufacturing is call the grammar slip-up poetic expanding. The September employlicense and allow my optimism to ment report was certainly not robust, come from a broader view. I agree, if but it did exceed analysts’ expectations, you live in the real estate industry, especially considering the upward revithis recession and sparse recovery has sion of the two previous months. been nothing short of devastating. According to the numbers, we are not Sure, the super low rates have helped in a recession … so why all the gloom originators increase their income and doom? through refinances; however, we all First, our growth is too slow to undo understand that our long-term bread the damage done by the deep recesand butter is financing purchases. sion. If someone hits you with a hamWithout enough purchases, real mer several times, your body is still estate does not recover and neither going to hurt after they stop hitting does the general economy. you. You need medical help. Job In addition to the fact that we growth of 100,000 per month barely work in a depressed industry, we are keeps up with population growth, let working under a new regulatory envi- alone, replacing the millions of the ronment with stricter credit condi- jobs we lost. tions. From low appraisals to underSecondly, Europe is a concern. The writing with a microscope, what little markets are concerned, and rightly so, mortgage business is out there is that a default by Greece and/or failure exceedingly difficult. In the “olden” of European banks could drag us down days, we could into a recession. charge more for That is all we hear difficult business, “Job growth of 100,000 per month about every day— barely keeps up with population but that’s not posEurope. This growth, let alone, replacing the sible under the makes the conmillions of the jobs we lost.” new compensasumer even less tion regulations. confident. We may How can I say not be in a state of that “It ain’t that bad?” Again, let’s look recession now, but economic growth at a broader perspective. How bad does is not likely strong enough to ward the “average” American think things off such a worse-case scenario in are? Here is the “prevailing” view from Europe. CNN/Money … Thirdly, the government is a drag upon the economy right now. It is great “Economic fears are not diminishing. for everyone to call for balancing the More than eight in 10 Americans think budget, however, in the short-term, the economy is in another recession, any jobs lost hurts. Those who are losaccording to a new CNN/ORC poll ing their jobs include teachers and released in early September. Americans even those representing our country have “a bad case of economic jitters,” overseas as our commitment in Iraq according to CNN Polling Director winds down. Keating Holland. This is a pretty ominous one-twothree. I still have not advanced any reaThe bottom line is … Americans pre- son for optimism about the future. Well dominantly think we are still in the first here are my own three points regarding recession or have started a double-dip these issues. recession. So the public’s view is not far off the view of those within real estate.  The economy. Yes, growth is too Certainly we know real estate is still in slow. However, we are a lot closer to recession. more substantial growth than we The numbers from the overall economy do not bear out the call of a prescontinued on page 30


NOVEMBER 2011 Decline in Refis to Drop Originations From $1.2 Trillion in 2011 to $900 Billion in 2012

over-year appreciation. The Federal Housing Finance Agency (FHFA)‘s national repeat transactions home price measure, which does not distinguish between distressed and non-distressed sales, will continue to decline before starting a reversal in mid to late 2012, but will vary by state and home value.  Purchase originations will likely decrease in 2011 from 2010, totaling $400 billion from an estimated $472 billion in 2010. Seeing as 2012 will likely be another year of slow economic growth, purchase originations will increase slightly to around $412 billion for the year. As the economy picks up continued on page 29



The Mortgage Bankers Association (MBA) expects to see mortgage originations fall from an estimated $1.2 trillion in 2011 to $900 billion in 2012. The drop will be driven by a significant decline in refinance originations, while purchase originations will increase only slightly. The economy will see another year of anemic growth in 2012, and then will grow somewhat faster in 2013. Refinance originations are expected to fall despite low mortgage rates as economic uncertainty lingers and fewer eligible borrowers remain. “We think growth driven by consumer spending on durables and business spending on new plants and equipment will keep the US out of recession, but there is significant uncertainty around this forecast”, said Jay Brinkmann, MBA’s chief economist and SVP of research and education. “Europe is in or soon will be in recession. There is the risk that the European situation could harm the U.S. financial system, and could lead to further damage to U.S. consumer and business confidence. If that were to happen, we think that the US could fall into a short, and relatively mild recession. We do not anticipate any actions out of Washington that would have a material impact on the economic outlook.” Following are the key points of the latest MBA forecast:  Real GDP growth will be 1.3 percent in 2011, which began with a dismal 0.4 percent growth in the first quarter and 1.3 percent growth in the second quarter. We expect the second half to average around 1.8 percent, but even that is on shaky ground, with a weak labor market, volatile financial markets, and looming risks of a spillover from the European debt crisis. We expect 2012 to continue in a similar fashion, showing growth of around 1.7 percent, as Europe enters a recession of its own and the US economy flirts with a shallow recession until midway through 2012. There should be a modest recovery in 2013 with growth reaching 2.4 percent for the year.  The unemployment rate will increase slowly until the second quarter of 2012, hitting 9.3 percent, from the current level of 9.1 percent. It is expected to be around 9.1 percent for 2011, 9.3 percent for 2012, and 9.1

percent for 2013. Even though both economic and job growth are in positive territory, they are still insufficient to lower the unemployment rate in the near term.

 Fixed mortgage rates are expected to remain low by historical standards, finishing 2011 at around a 4.5 percent average for the year, falling slightly to 4.4 percent for 2012 and climbing back up to 4.9 by 2013.  Total existing home sales will stay around the 4.9 million unit pace for 2011 and 2012, before increasing slightly to 5.2 million units in 2013 as the broader economy recovers. The recovery in the new home sales will have a comparably slow start, and may well be slow for most of 2012, but will show some meaningful increases in 2013.  Home price measures that exclude distressed transactions have stabilized, and certain markets are showing year-

tor, principal, manager, supervisor, loan processor, underwriter or loan originator of the lender or mortgagee:

of corporate officers, as defined above, to the FHA.

Ownership changes

FHA Revises Lender Approval Requirements Mortgagee Letter 2011-34 was issued in late September, but didn’t get a lot of attention. In this month’s article, I’ll point out the highlights of the update. The update announced changes to the Federal Housing Administration (FHA) requirements for obtaining, maintaining and utilizing a lender’s FHA approval.

Identifying officers




tion in which the office is located. In addition, the U.S. Department of Housing & Urban Development (HUD) is no longer regulating branch offices facilities and lenders are no longer required to submit evidence of acceptable home office facilities. However, the FHA will verify compliance with these requirements through on-site visits to the home office to assure that the lender has acceptable office facilities as outlined in 2-11.A of Handbook 4060.1.

The lender must list all of its corporate officers who will be managing, overseeing or conducting the FHA business of the lender. Unless the applicant is a supervised lending institution, the applicant must submit Conversion of FHA a credit report for each corporate officer lender approval type listed and a resume for the senior officers Lenders that want to convert their FHA with FHA origination experience (Handbook approval type must submit a new lender approval application 4060.1, 3-2.A.4 and package with all 3-2.A.5). The term “It has been easy for companies required exhibits, and “Corporate Officer” is in the past to hide their unethical pay a new $1,000 now defined as a “natbusiness practices with FHA lender approval ural person who is an programs, but things have application fee. owner, president, vice changed and HUD has worked Previously, a lender president, chief opervery hard at leveling the playing had to submit cerating officer, chief field for reputable lenders by tain forms and docufinancial officer, direcremoving unethical companies ments along with a tor, corporate secreand their leaders.” $300 fee. tary, chief executive officer, chairman of the board, or member or manager of a Prohibited branch arrangement limited liability company (LLC). Approved lenders must directly pay all expenses for the operation of their Identifying owners The following list defines which of the home, branch and direct lending owners must be listed on the applica- offices, and may not create “net branchtion for FHA approval according to the ing” arrangements in which a party, type of company and the owner’s per- other than the approved mortgagee, pays some or all of the branch office centage of ownership: expenses.  Publically traded company or corporation; if 10 percent or more ownership Single-family loan  Non-publically traded company or origination lending area corporation; if 25 percent or more FHA has expanded the single-family origination lending area of each home office ownership  Limited Liability Company; all and registered branch office to include all HUD jurisdictions throughout the country. members Lenders must bear in mind that they must  Partnerships; general partners also meet each state’s origination and licensing requirements. Office facilities An approved FHA lender may originate and service loans from its home office, Business changes branch office and direct lending branch subsequent to approval office. All office facilities, regardless of The FHA now requires that mortgagees type, must comply with all state licens- notify HUD within 10 business days if ing requirements within the jurisdic- the lender or any officer, partner, direc-

1. Has been suspended, debarred, under a limited denial of participation (LDP) or has been debarred or suspended by HUD or by any other federal agency. 2. Has been indicted for, or convicted of, an offense that reflects adversely upon the integrity, competency, or fitness necessary to meet the responsibilities of the lender to participate in FHA programs. 3. Is subject to unresolved findings as a result of HUD or other governmental audit, investigation, or review (see ML 2010-38 for clarification on meaning of “unresolved findings”). 4. Is engaged in business practices that do not conform to generally accepted practices of prudent mortgagees or that demonstrate irresponsibility. 5. Is convicted of, or pled guilty or no contest to, a felony related to participation in the real estate or mortgage loan industry within seven years prior to the date of the application for licensing and registration, or for any felony at any prior time that involved an act of fraud, dishonesty, or a breach of trust or money laundering. 6. Is in violation of provisions of the Secure and Fair Enforcement (SAFE) Mortgage Licensing Act of 2008 or any applicable provision of state law.

Use of DBA names FHA now requires lenders to register all of their DBAs though FHA Connection rather than just those used for advertising FHA programs. FHA Connection has been modified to allow the registration of up to seven DBAs for each home office or branch. If a lender has more than seven DBAs, its remaining DBAs must be registered with the FHA by submitting the additional DBA names and documentation authorizing their use to HUD (see ML for address).

Officer changes FHA-approved lenders are now required to report to any changes in the identity


FHA now requires approved lenders to report all ownership changes, including new owners and changes in ownership interests, in accordance with the ownership requirements for their business form as detailed above.

Commentary Note that number four above has broad application in terms of administering the law and gives HUD a great deal of latitude to revoke a lender’s FHA approval status. Let this be a clear warning to companies that walk the line in any of their business practices and want to take advantage of FHA programs. It has been easy for companies in the past to hide their unethical business practices with FHA programs, but things have changed and HUD has worked very hard at leveling the playing field for reputable lenders by removing unethical companies and their leaders. This update is not only important for owners of companies but also MLOs. Knowing these criteria can help you make better decisions about which companies to work for, and can assist you in judging the integrity of the individuals that run your company. It’s important to know that you are working for a company that has solid leaders. And, if you are considering joining a company, it’s fair to ask questions about its leaders so that you can have peace of mind that you are joining a reputable company—or know that you need to look elsewhere! 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) 403-8181 or visit

continued from page 6

many quality reviews as possible. It is important for the reviewer to have available all the necessary supplemental products, scores, maps and comps in a seamless dashboard. A good appraisal scoring system will provide immediate direction to a reviewer to help focus on the questionable areas of an appraisal. Bringing the relevant data together under one platform saves time since the reviewer won’t have to open multiple browsers, visit multiple Web sites or pull out miscellaneous paper folders to get the necessary information. In conclusion, quality control in the mortgage industry can be approached from multiple ways, but the need to fully understand the collateral backing of each

and every loan cannot be questioned. A valuation management system will go a long way in helping to increase efficiencies and remove the element of human error providing a bit of comfort in today’s anxious mortgage environment. An automated review should be seen as a complement to the traditional manual review by qualified professionals. This two-step approach brings higher efficiency and empowers lenders to make smarter and consistent evaluations of collateral risk. David Rasmussen is senior vice president of operations at Veros Real Estate Solutions. For more information, call (714) 415-6300 or visit


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If you you are are a seasoned professional ready rea ady for for a change change and desire d desir e seassoned professional more mor e information, informatio on, call us at 616-667-9000, 616-667-9 9000, or send an e-mail e-ma ail to: to: www w.Pola a e

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Three Ways to Prepare Your Referral Network for 2012 By Erik Wind

Why W hy NAP NAPMW? M MW? Three T hree Simple Reasons Reaso ons Education E d duccation Organized Or ganized ffor or the pur purpose pose of providing providing education education tto o pr professionoffe essionals in all phases off the mor mortgage industry, NAPMW offers educa-tgage industr y, NAP N MW off ers educa tion via man enues – seminars and w orkshops k ound the manyy vvenues workshops held ar around on-line,, and National Conference ccountry, ountry, on-line a at at its Na tional EEducation ducation C onference held May. each hM ay. NAPMW NAP MW membership membersship gives gives you you exclusive exclusive access a cess to ac to timely educaeducaaffecting career tion regarding regarding the e regulations regulations aff ecting yyour o car our eer such as a webinar FREE TO TO MEMBERSS monthly monthly w ebinar on industry ind dustry updates updates AND education class offering our 8 hour NMLS continuing continuing educa tion cla ss off ffe ering (NMLS Provider 1400309) P rovider # 140030 09) 14

Leadership p Leadership IIff you you believe believe in helping helping to to elevate elevate the educational edu ucational standards standards of this industry, industry, or assisting asssisting in developing developing the e most competent competent industryy w work industr ork force, force, then you you believe believe in NAPMW. NA APMW.



NAPMW Butt sinc since women NAP MW is not a women’s women’s organization. organization. Bu ew omen make majority profesup the major ity off professionals professionals in the mortgage/banking morrtgage/banking pr ofession, our purpose business,, personal personal,, purpose is to to help them advance advance in business and leadership development. de evelopment.

Net wo ork king i Networking NAPMW is a ccommunity NAPMW omm munity of near nearly ly 2,000 professionals prof o essionals acr across oss the Country engage mortgage banking industry. C ountry who eng age in the mor tgage / ba anking industr y. Men Men and w omen from from all backg rounds have have joi ned NAP MW because women backgrounds joined NAPMW excel whatt they do do.. Emplo Employers want they want want tto oe xcel e aatt wha yers who w ant eexcelxcellenc e from from their employees emplo e yees engage eng NAP N MW for for up-to-date up-to-date lence with NAPMW education. educa tion. B Both oth pr professionals p ofessionals and emplo emp employers yers e have have found found there there is a plac e ffor or them in n NAP MW W. place NAPMW.

National E National Education ducation Na tional T raining National Training National Networking Na tional N etworking

To T o Join NAPMW NAPMW W visit: w ww.napmw.o org or ccall: all: 1-800-827-3034 1 800 8 1-800-8 827 3034 827-3034 Have Ha ve Q Questions? uestion ns? Please ffeel eel free free to to e e-mail -m mail us a at: t: napm w1@aol.c . om

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I usually find Halloween to be the “Two Minute Warning” of the year, reminding my clients and myself that once Thanksgiving arrives, the opportunity to write new business significantly diminishes. Of course, I’ll get a number of calls I didn’t expect, and transactions I’ve been working on for months will come to fruition, but overall, it’s the slow period of the year. While my business is technology, I know it’s the same for the mortgage business. While many use this time to kick back and relax, or even “Now worry about the slowdown, the producers are using this time to review their goals and assess if their business is probably is in a position to reach these goals. Since referrals not the time to be are such a large part of my business, I examine my current referral sources, as well as my introducing yourself efforts to obtain new referral sources.

to real estate agents, unless you like walkSet your goals Did you set goals last year? If you didn’t, take ing into empty offices, this slow period to put together some real simbut it’s a great time ple plans. Work backwards with the most importo start listtant question: How many loans do you want to close per month? Once you have that answered, how building.” many referrals will you need to get there? How many real estate agents and/or real estate attorneys will you need in your referral network to receive those referrals?

Assess your referral sources Take a long, hard look at the people in your referral network who you are putting time and resources toward helping grow their business. Are you getting a return on this investment? For example, an originator friend of mine shares ShortSaleSpeedway with his real estate agents. The agents close more short sales, and he gets more mortgage referrals. In one office, he shares ShortSaleSpeedway with seven agents, but only gets referrals from five. Why aren’t the other two referring? It turns out that one of the agents has a family member in the mortgage business. With that knowledge, he can focus his efforts elsewhere, knowing that agent is not in his referral network. By weeding out those who aren’t reciprocating the referral relationship, my friend is able to better help agents who are referring business, and also put more time into gaining fresh sources of referrals.

Attract new referral sources Now is probably not the time to be introducing yourself to real estate agents, unless you like walking into empty offices, but it’s a great time to start list-building. Put together a list of potential real estate offices and agents who you want to meet. Write out a marketing plan that involves getting in front of them along with a compelling offer as to why they should do business with you. Once again, my friend reaches out to each agent/office multiple times by mail, e-mail, phone or even stopping by until he gets to introduce himself properly. When he does gain that introduction, he’s ready. In a no BS approach, he explains how he can help the agent close more short sales and how he can be a reliable go-to person for the agent’s mortgage needs. Get your list, plan and offer ready now, so when 2012 rolls around, you’ll be ready. With a combination of reflecting inward on your current referral network and outward toward new relationships, 2012 can be an amazing year for you and anyone you choose to do business with. Erik Wind is co-founder of ShortSaleSpeedway. He may be reached by phone at (516) 882-6930 or e-mail at SPONSORED EDITORIAL

loan originator compensation

continued from page 6

the midst of actual reviews of loan originator compensation compliance that we were then conducting for our clients.

 Institution questionnaire  Document request  Auditing of sampling indicia

Expect the unexpected

Methodology There are several ways to go about preparing for a regulatory examination of loan originator compensation. Prior to determining the most suitable procedures to follow, three Modules should be outlined, as follows:

As I have said many times, preparation is protection. Don’t wait for the regulator’s Document Request letter to implement any regulatory requirement. If you wait, by then it’s often too late. Remember, most examinations are look-backs, reaching to the previous examination, or a stated timeframe previous to the current examination. Most examiners have a “No Tolerance” view of firms that cannot provide supporting documents and information in a timely manner. The “record speaks for itself” is the inflexible standard! Our audit and due diligence reviews are the property of our client, and as fully confidential as if the client conducted its own review, with its internal resources—which, of course, is certainly a viable option. So, there really is no excuse for not being prepared for a regulatory examination for loan originator compensation or any other examination. In my view, undertaking preparedness action for a loan originator compensation examination should consist of the following basics.9 My remarks include some of my firm’s audit and due diligence practices as well as certain features of the recently issued Examiner Guidelines.

• Module 1: Examiner checklist This consists of certain kinds of questions

that would be expected to guide the examiner throughout the course of the examination. It is important to be familiar with the criteria that will be applied. • Module 2: Institution information request The information that we would seek does not apply to dates prior to April 6, 2011. However, this module does take into consideration a very comprehensive review of all information and documentation that affect loan originator compensation. • Module 3: Institution questionnaire This module is meant to save time and resources. We usually incorpo-

rate this in every Document Request, and, unless we direct otherwise, we expect this questionnaire to be completed and returned to us prior to our audit and due diligence review. Most clients know to support their answers with documentation. Certain questions, though, may be answered with a Yes or No response, but most questions require comprehensive, fully documentable responses. Scope There are, essentially, three options in fulfilling the scope of exam preparedness, each of which consists of continued on page 16


Preparation is protection


Review components  Report of findings  Review of policy and procedures  Institution information request 

Review construct  It is critical to set forth the bounds of the review. Indicate a research range that utilizes an audit sequence which, in part, incorporates federal Interagency procedures and guidelines implemented prior to the effective date of the Rule, as well as federal Interagency procedures and guidelines effective after the date of the Rule, as promulgated by the MMC examiner guidelines, any federal agency, and, when issued, state government agencies.  A significant portion of the review should be devoted to (1) completing the Institution Information Request and Institution Questionnaire provided in the Examiner Guidelines, (2) assembling items required in a Document Request, (3) providing information asked for in an Audit Checklist (whether specifically designed or Interagency), and (4) including independent review criteria through documentation review, on-site transaction testing (if required), off-site sampling of transaction documents, and interviews of institution staff or other parties.

loan originator compensation one or more of the aforementioned modules. • Full scope The Full Scope requires the completion of Modules 2 and Module 3, followed by completion of Module 1 through a documentation review, on-site transaction testing, and interviews of institution staff or other parties.


• Limited scope A Limited Scope only requires completion of Module 1, and it excludes transaction testing and interviews, based on the institution’s responses to Modules 2 and 3.

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• Limited scope with off-site testing This review combines the Limited Scope with off-site sampling of transaction documents and/or telephone interviews of institution staff or other parties.


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Caveat: Before moving on to the next section, I want to mention that the appropriate risk management approach vis-à vis the selection of the scope depends on a financial institution’s type, size, complexity, and risk profile. Conferring with a risk management professional would be helpful to determining which scope is most suited to providing the level of exam preparedness needed.



Information questionnaire

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Please give earnest consideration to the following questions, as these will come up in one form or another during an examination of loan origination compensation. The financial institution may or may not know the answers to all the questions, but that very fact demonstrates weakness in policies, procedures, and compliance enforcement. When my firm issues a Document Request, the Information Questionnaire is now always included. Prior to the examination, it is unlikely that the examiner will provide information about appropriate answers to these kinds of questions. While some of the questions may seem relatively simple on the surface, they are not really simple at all. The answers are either clearly stated or they are not, and if they are not stated or incorrectly stated, this in itself alerts the examiner to the financial institution’s level of preparedness, its management competence, its implementation awareness, and the additional information and documentation that may be need to be requested for the examination. 1. How are loan originators compensated? Provide details of all compensation procedures and calculations. 2. What incentive plans are offered to loan originators? Provide details.

continued from page 15

3. Are loan originators ever compensated based on: a. The interest rate or Annual Percentage Rate obtained on a loan? b. The loan to value obtained on a loan? c. Originating a loan with a prepayment penalty? d. The amount of loan fees paid to the institution or creditor? 4. Are credit scores a determining factor in the amount of compensation earned by a loan originator? Explain. 5. Is debt to income a determining factor in the amount of compensation earned by a loan originator? Explain. 6. Are loan originators allowed to receive reimbursement for third party costs (i.e., appraisal, credit report, et cetera)? 7. Are loan originators allowed to charge more for third party costs than the actual cost of the service and retain such costs as compensation? Explain. 8. Are loan originators allowed to charge for services other than loan origination services that are performed by the originator? For example: loan processing, document preparation, inspection fees, and so forth. 9. Is the loan originator compensated any differently when price is increased by the creditor or employer to offset loan costs? 10. Is loan originator compensation ever reduced in order for the institution to compete on loan terms? (For example: the institution reduces its rate by 50 basis points to induce a shopping consumer to stay with the institution, and the loan originator’s compensation is reduced accordingly.) 11. Are loan originators able to deliver loans to more than one affiliate or subsidiary of the institution’s parent company? If so, are loan originators compensated differently based on which affiliate the loans are delivered to? 12. Are loan originators allowed to receive compensation (including yield spread premium or similar compensation) from both the consumer and any other person on the same transaction? Brokered loans: Questions 13 through 18 must be answered by both mortgage broker loan originators originating loans and creditor institutions receiving brokered loans. 13. Does the institution allow loan originators to “steer� consumers to transactions where the loan originator receives more compensation and the loan is not in the consumer’s interest? Explain. 14. Does the institution require or use the steering Safe Harbor provision under the Rule?10 15. During the examination period or the continued on page 34

heard on the street

continued from page 9

operations and their business model. We discovered that they had a great deal of integrity and that they deliver on their promises, and they’re young, energetic, and hungry to grow.” The McGoverns built Bay Equity on a combination of innovation and agility with just the right amount of aggressiveness. Being a direct lender did not make them unique; a focus on technological innovation and premier customer service did. Consequently, Bay Equity quickly fashioned a reputation as a skilled team of trustworthy professionals—a team that has grown to more than 185 employees. “The guys at TriStar Home Loans–Hady Breidy, Curt Kravitz and Jim Doty–are extremely well established in their market and do consistent high volume business in a segment of the market that they have been successful in for a long time,” said Brett McGovern, president of Bay Equity Home Loans. “They have been sending wholesale loans to us for some time, so when they decided to consider segueing from the mortgage broker side of the business to the banking side, we were on their short list. The more we talked the more we realized we were a good fit for each other. By joining the Bay Equity team, they can focus on what they do best and turn a lot of the administrative responsibility over to us.”

South Carolina; Tennessee; Texas; Virginia; Vermont; and Washington, D.C. “We are looking to hire 20-30 new AEs by the end of 2011,” said Walsh. “At that time, we will assess the marketplace and our internal processes and look to potentially further increase hiring.”

Greenlight Financial Set to Launch Wholesale Division and Add 400 New Positions Greenlight Financial Services has announced

major expansion plans, including the launch of its wholesale lending division in the first quarter of 2012. Executive Vice Presidents Mary Glass-Schannault and Gretchen Verdugo are tasked with the launch of the company’s wholesale division. Glass-Schannault is nationally recognized in the mortgage banking industry with more than 33 years of leadership experience in mortgage operations and originations for national wholesale/conduit channels including REIT management and capital markets. Verdugo, a CPA, participated in public offerings of in excess of $1 billion equity capital. Her professional career includes more than 20 years of financial services experience, including REIT management and capital markets. Verdugo and Glass-Schannault have each

transacted more than $50 billion of securitizations and whole loan transactions. Bela M. Donine, national sales manager, with a background in nationwide correspondent originations, will head up the production effort with established relationships with traditional broker partners for wholesale delivery. “We are implementing a sustainable growth strategy that is designed to increase the breadth and scope of our product offerings nationwide,” said Joann Pham, chief executive officer of Greenlight. “Our position gives us the unique ability to leverage current market opportunities to launch new business channels that will allow us to build upon our 10-year history of success.” continued on page 23

TMS Funding Expands Its Presence With AE Hiring Campaign

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Equal Housing Lender. © 2010 Nationwide Equities Corporation. Trade/service marks are the property of Hamilton Management Group and/or its subsidiaries. Some products may not be available in all states. NMLS Company ID:1408, Licensed Mortgage Banker: CT: License# 12304, NJ: License# L046060, NY: License# B500883, PA: License# 22104, FL: License# MLD453, ME: License# SLM12116


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TMS Funding, the wholesale residential lending channel of Total Mortgage Services LLC, has announced that it is actively hiring new account executives (AEs) to help expand its wholesale lending market position throughout the 21 states and Washington, D.C. in which it is currently licensed for wholesale mortgage production. TMS Funding is recruiting high-quality wholesale AEs with two-plus years of experience and a current mortgage broker base funding conventional, FHA, USDA and jumbo loans. The wholesale lender is offering a highly competitive compensation package and access to some of the lowest mortgage rates and best-in-class operational support in the mortgage industry. TMS Funding recently launched a new flexible jumbo mortgage product into the wholesale marketplace. “We see a tremendous opportunity in the wholesale channel today, as many lenders have exited the channel and the remaining lenders are not providing real value either from a rate perspective or service levels,” said John Walsh, president of Total Mortgage Services LLC. “We feel we can leverage our outstanding operation and it’s efficiencies to capture a substantial amount of wholesale business in the future.” TMS Funding is hiring AEs to service brokers in all areas of California; Florida; Georgia; Illinois; Massachusetts; Maryland; Maine; Michigan; Mississippi; North Carolina; New Hampshire; New Jersey; New York; Pennsylvania; Rhode Island;


An Invitation to NAMB WEST 2011 By Donald J. Frommeyer, CRMS




Wow ... it is hard to believe that we are getting ready for NAMB/WEST once again, set for SaturdayMonday, Dec. 3-5 at the MGM Grand in Las Vegas. Time really flies when you get busy, and it goes to say that these last four months have been very busy for my mortgage company and I am sure you have been too! So, take a few minutes and make your reservations, airline flights and register for this outstanding conference. We are having some excellent speakers on hand at the event, and please make sure that you complete the registration form for the presentation of USA Cares by Beverly Frase. For those of you who do not know, this presentation will get you qualified as a Certified Military Housing Specialist, a designation that means when a veteran is looking for a U.S. Department of Veterans Affairs (VA) loan, this should help you put them as ease as to your qualifications of understanding their situation. I recently received my Certified Military Housing Specialist certification, and I have already spoken with several new purchasers. This certification will enable you to market yourself to Realtors and it will help get you loans. I would also like to take a moment and highlight one of our Ruby Industry Partners, Sprint. They became an industry partner last year at NAMB/WEST and we would really like to thank them. Sprint offers a great program for NAMB members at a savings 20 percent off for your mobile service. For more information, you can visit the NAMB Web site, click on the Sprint LOGO, and it will help you compare the cost. I have personally saved $70 per month from my previous carrier, and I now have unlimited texting and calling to other mobile phones. Alex Mohammed, our NAMB Sprint representative, has really offered NAMB members a great opportunity to save money, and in this day and time, we can all appreciate that. Get in contact with Alex at (801) 301-1096 or e-mail He will get you on the road to saving money each month. Alex will also have a booth at NAMB/WEST and Sprint is again one of the sponsors of the event. One of the other great options for NAMB/WEST is that once you pay the registration fee, it includes attendance at the Opening Reception, breaks and lunches, entrance into the Exhibit Hall and all of the trimmings that go with this great event. If you need education, eight hours of education will be offered with your registration. We have set aside some general sessions so it is not all education. We have secured some outstanding speakers who will give you information that you need to help you in your offices. So don’t wait. Register now. We will also be having a very important Delegate Council Meeting at NAMB/WEST. As we only have two large conferences per year, the Delegate Council needs to meet to handle business for the association. This year, the meeting will take place Saturday, Dec. 3 and the Board Meeting will be held Monday at 4:30 p.m. And as a final note, all fully registered attendees will have a chance to win the Grand Prize of a trip to Hawaii. When you arrive, you will receive the Passport that may just get you there. So do not delay. Now is the time to go to to register and get your hotel reservations completed at the same time. We have negotiated new rates this year that have significantly reduced the cost to attend. I look forward to seeing you all in Las Vegas. Donald J. Frommeyer, CRMS, is president of the National Association of Mortgage Brokers. He may be reached by phone at (317) 575-4355 or e-mail at

NAMB/WEST 2011 Saturday-Monday, December 3-5 MGM Grand Las Vegas

Saturday, December 3 10:00 a.m.-5:00 p.m. ..........Registration Open 10:00 a.m.-Noon ................Committee Meetings Some or all of the following committees could meet during this time slot: Conference Committee, Government Affairs Committee, Membership Committee, Ethics Committee, By-Laws & Education Committee, Communications Committee, and Finance Committee. 1:00 p.m.-4:00 p.m. ............NAMB Delegate Council Meeting 4:00 p.m.-6:00 p.m. ............Opening Reception & PAC Auction Event

Sunday, December 4 8:00 a.m.-5:00 p.m. ............Registration Open (Premier Ballroom Foyer) 8:30 a.m.-9:30 a.m. ............NMLS Education: FHA (1 Hour) This NMLS-accredited course will be instructed by David Luna of Mortgage Educators. The NMLS classes presented at NAMB/WEST will meet all of the necessary requirements to renew your license. These will be taught in a conversational format, not a lecture, where you will be asked your opinions on what you know. It will be a fun learning environment where you will walk away having learned something that didn’t hurt and made you laugh.

9:40 a.m.-10:40 a.m. ..........Stimulate the Economy With the 203K Loan Presented by Ginger Bell, national trainer for Plaza Home Mortgage and founder of, this session will teach you the benefits of how the 203k loan and other renovation loan programs will improve and maintain neighborhood values, as well as put contractors and construction professionals back to work.

8:00 a.m.-5:00 p.m. ............Registration Open (Premier Ballroom Foyer) 8:30 a.m.-10:30 a.m. ..........NMLS Education: Reverse Mortgages (2 Hours) This NMLS-accredited course will be instructed by David Luna of Mortgage Educators. The NMLS classes presented at NAMB/WEST will meet all of the necessary requirements to renew your license. These will be taught in a conversational format, not a lecture, where you will be asked your opinions on what you know. It will be a fun learning environment where you will walk away having learned something that didn’t hurt and made you laugh. 8:30 a.m.-9:45 a.m. ............Stop Sending Meatloaf Recipes to Vegetarians: Oneto-One Marketing Basics Presented by Mark Green of Top of Mind Networks, this session will instruct attendees on how to hit their desired target markets with desired results. 10:00 a.m.-11:15 a.m...........Unlocking Your Success: Disciplines That Make a Lasting Difference Presented by Jim McMahan of LoanToolbox will uncover the keys to becoming a fiscally literate originator in today’s mortgage marketplace. Not only does Jim outline the disciplines that lead you down the path to success, he also teaches you what steps to take in order to make a lasting difference in the lives of your clients and relationship partners. 10:45 a.m.-12:45 p.m. ........NMLS Education: Ethics (2 Hours) This NMLS-accredited course will be instructed by David Luna of Mortgage Educators. The NMLS classes presented at NAMB/WEST will meet all of the necessary requirements to renew your license. These will be taught in a conversational format, not a lecture, where you will be asked your opinions on what you know. It will be a fun learning environment where you will walk away having learned something that didn’t hurt and made you laugh. 11:30 a.m.-12:45 p.m. ........Session From Ron Vaimberg (topic to be determined) 12:45 p.m.-2:00 p.m. ..........Networking Lunch 2:00 p.m.-3:00 p.m. ............Using Social Media to Leverage Your Mortgage Business Presented by Becki Rogers-Neese of Real Assist QC, this session will discuss how to properly implement social media strategies into your marketing and business plan to grow leads and increase your profit. 3:15 p.m.-4:30 p.m. ............ Successful Originations in Today’s Challenging and Dynamic Market Presented by Sue Woodard of Mortgage Success Source, this session will present a new approach to successful originations in today’s challenging and dynamic market. Don’t miss this opportunity to hear one of the top industry leaders share how you can thrive in this challenging marketplace. 4:30 p.m. ..........................Grand Prize Drawing for a Trip to Hawaii If entered, you must be present to win this prize. 4:45 p.m.-6:30 p.m. ............NAMB Board Meeting For more information on NAMB/WEST 2011, including registration, exhibitor and sponsorship opportunities, visit



10:45 a.m.-12:45 p.m. ........ Get Certified for VA Loans Presented by Beverly Frase of USA Cares, this session will cover the Certified Military Housing Specialist designation, and provide attendees with the tools to equip their local community of lenders, Realtors and housing professionals with the knowledge on how to work with military borrowers, whether they use VA or some other type of financing. Learn to “speak their language” by learning their acronyms and build a solid, lasting rapport by being the “local military expert” they need and deserve.

Monday, December 5


9:40 a.m.-12:45 p.m. .......... NMLS Education: Federal Law (3 Hours) This NMLS-accredited course will be instructed by David Luna of Mortgage Educators. The NMLS classes presented at NAMB/WEST will meet all of the necessary requirements to renew your license. These will be taught in a conversational format, not a lecture, where you will be asked your opinions on what you know. It will be a fun learning environment where you will walk away having learned something that didn’t hurt and made you laugh.

2:00 p.m.-6:00 p.m. ............Expo Hall & Networking Reception Visit the industry’s top lenders and vendors in Premier Ballroom 312-317 of the MGM Grand. The reception and raffles will be held during the exhibit hall hours, and attendees must be present to win. 

8:30 a.m.-9:30 a.m. ............Three Proven Strategies Mortgage Professionals Can Work With Real Estate Agents Online to Generate More Buyers Presented by Mark Madsen, owner of and founder of Mortgage Revolution, this session will teach you how to find and connect with the Web savvy agents who are actually making a living from their online presence You will learn to “flip the script,” and look deeper at the four unique ways mortgage professionals can position themselves as the most valuable asset an agent has online, and much more in this hour-long session.

12:45 p.m.-2:00 p.m. ..........Networking Lunch

John Walsh, President Total Mortgage Services

ach month, National Mortgage Professional Magazine will focus on one of the industry’s top players in our “Mortgage Professional of the Month” feature. Our readers are encouraged to contact us by e-mail at to be considered for a future “Mortgage Professional of the Month” feature article. This month, we had a chance to chat with John Walsh, president and founder of Milford, Conn.-based Total Mortgage Services, parent company to wholesale lender, TMS Funding. A finance major at the University of Connecticut, Walsh began his journey in the mortgage industry with a sales job at a bank and founded Total Mortgage in 1997, with a customer-centric approach and a clear mission of responsible lending, and an emphasis on a strong back office and customer service. Total Mortgage has not had a buy-back in more than 14 years, which is a true testament to the lender’s responsible lending focus throughout the lending value chain. Licensed in 24 states and the District of Columbia, Total Mortgage offers a variety of home loan programs, including low-rate, fixed-rate and adjustablerate mortgages, jumbo mortgages, reverse mortgages and mortgage programs for struggling homeowners. In addition, Total Mortgage offers a Federal Housing Administration (FHA) streamline mortgage refinance program, including the 203(b) FHA loan. In September 2011, Total Mortgage received approval with Fannie Mae to be a seller/servicer for one- to four-family first lien mortgages and can now retain mortgage servicing rights, expand product offerings as well as sell and pool loans into mortgage backed securities. Total Mortgage was named to the 2011 and 2010 Inc. 5000 list of “America’s Fastest Growing Companies” In late 2009, Total Mortgage Services announced the formal launch of its wholesale residential mortgage lending platform, TMS Funding, which has been expanding rapidly and is currently aggressively hiring account executives. John Walsh’s views are quoted extensively in the national and mortgage trade press and he has written numerous mortgage industry bylines. He is also an advocate for the mortgage and housing industry. In early November

Where was the business coming from when you first started? In the beginning, business was coming from traditional referral relationships. I would bring donuts to Realtors’ offices and reach out the old-fashioned way. Most of these Realtors had offices and held meetings each Tuesday. I would attend these meetings and field questions for about 20 min., but many times, I would be there for over four hours. Before long, I would find myself at the Realtors’ office all day. That was when I first realized how important a great back office is to a mortgage originator. I could go out all day, and not worry about the processing aspects of the business and just focus on maximizing my earnings potential and grow production.





“I say it all the time ... problems are just opportunities to get better. We just need to keep reinventing ourselves and get better and better every day.”

2011, John authored an “Open Letter to Members of the United States House of Representatives,” urging them to temporarily raise the GSE lending limits back to $729,750 without delay and not just for “high-cost areas,” but nationwide to help put the nation’s housing sector and economy back on the road to recovery. How did you first get started in the business? I attended the University of Connecticut and earned a degree in finance. I really enjoyed my time in college and graduated with honors. After I graduated, I took a job in sales. I always knew I wanted to be fairly compensated for what I did at work, so sales was the perfect job for me. The harder you worked, the more you were able to make. I held various sales jobs, but in 1993, I was speaking with friends who were mort-

gage brokers and they were telling me how much they enjoyed the work and the pay. At that point, I thought that I could also be successful as a mortgage originator. So I interviewed at a couple of banks, and I ended up accepting a job at a banking institution where my friend, Joe Bartolomeo, worked at in Connecticut. I did really well right out of the gate, but the bank was bought out two years later. After that job, I moved on to work for another institution for about one year and then went back to work with my friend who initially introduced me to the mortgage business. At that time, I told him that I wanted to own my own company. Coincidentally, my boss at the time approached my friend to see if we wanted to buy him out. So Joe Bartolomeo and myself made the move. The company eventually became the foundation for Total Mortgage Services.

Tell us about both of your companies, TMS Funding, your wholesale business, and its parent company, Total Mortgage Services. They are two separate entities, but from a turn time perspective, they are very similar. Our turn times are declining in both our retail and wholesale channels. I hired Victoria Bextel as senior vice president of operations and Elaine Presta as wholesale operations manager about six months ago and our turn times have significantly improved. We are focused on hiring the right people and having the right processes in place. We are now looking at a general 24-48 hour turnaround time. I do not believe any other firm is doing that on the wholesale side. We tell our mortgage broker partners that if they deliver a complete package, we can guarantee we will underwrite the loan within 24 hours. What about time to close? On the retail side, from application to close, we are closing in under 40 days. There are plenty of loans closed within a month, but on average, we are usually done in less than 40 days. If it were not for delays getting information from borrowers, I have no doubt that we would close all loans in less than 30 days. I believe we are staffed very differently than other firms, as we have always been heavily staffed. There was a time when I had 10 loan officers and 20 support staffers and everybody

thought the model would not work. I did it because I grew up in this business as a sales guy and I always wanted to sell and wanted people on the operations side to operate. I try never to be short-staffed. It is hard to say “never,” because there are times when refinance booms hit and no one is prepared to double the amount of loans you do in a month. But, I have always had the philosophy that if you can hire a great staff, you can provide a better customer experience, along with a better loan officer experience and better operations experience. It takes care of everybody. Any idea what the pull-through rate is on the wholesale side? At TMS Funding, our pull-through rate is around 60-65 percent. We always stress the same thing, just make sure mortgage brokers deliver us a good package and we will guarantee to underwrite the loan quickly. If brokers get us a good file, we are able to give them a good price, and can close the loan quickly. It’s a win-win situation.

In terms of any kind of referral business, how important is it to underwrite a loan versus just being able to network? I really became successful in this business once I fully understood how to underwrite a loan. I think that is an extremely important aspect of being a great loan officer. If you want to build a great business, you need your people to understand how the process works so they are selling the right products.

the right thing, share a similar mindset, and have the same morals and ethics, you put yourself in a good position to be successful. Do you have any regrets to date in your career? Not many at all, but I wish that I had the operations manager and team I have now back in 2003. In addition, I wished I transitioned sooner from broker to banker, as I left a lot of funds on the table from 2002-2004. In 2005, we became a banker, so it took us eight or so years to make that transition from mortgage broker to mortgage banker. Fortunately, I had experience in being a banker, so I was able to capitalize on that when we began the broker-tobanker transition. Had I done it in 2000 instead of 2005, it would have been a whole different story for Total Mortgage. If I had the proper staff in place, I could have done a lot more business. You look back at 2003 and it was such a tumultuous time in this industry. I try to learn those lessons every day. Is there any particular management style or philosophy that you employ? I am a firm believer of open communication from top to bottom of our organization. It doesn’t matter if it is an administrative person that has a great idea or a top salesperson in the firm; we at Total Mortgage Services try to foster a culture where no idea is a dumb idea. I have implemented ideas from people who have been here only a few weeks. I want to hear what everyone has to say. continued on page 22



What do you feel is your greatest accomplishment to date? I am very proud of our turn time at Total Mortgage Services and TMS Funding. I am also proud of the way we have been able to grow as a company. We have progressed from a broker to banker to wholesaler, and we are now working on plans to enter the correspondent channel. We are always searching for the next best thing in the mortgage industry to help us grow. I still love the business. It is a fun and challenging business, not for the

faint of heart, but for me, it is still the best place to have a career. Each day is different than the previous and brings with it new challenges. Is there another business where you could literally double your production overnight? A lot of people exit this business because it is so demanding. Total Mortgage has grown and accomplished a great deal, and we are aggressively seeking out new opportunities each day. We have grown 100 percent organically and have not purchased anyone else’s problems, so it’s been a fun ride, with a great group of people. Getting into correspondent lending is our next big goal. It is sort of an interesting time, as you have a major player like Bank of America walking away from this market. But we will enter the correspondent channel as we entered the wholesale channel: Slowly and carefully. From a wholesale perspective, I did not want to make any mistakes. I wanted to understand clearly what I needed to do first in order to be the best in this channel. There are other companies that are growing more quickly than us right now, but for every one of those, there are companies going out of business because they grew too fast and did not have the proper procedures and processes in place. You hear stories about how companies have grown, for example, by 500 percent in six months or so. To me, that could be a sign of trouble because you have to look at how they are handling their operations with such drastic growth. It’s easy to get the business, but it is what you do with it once you get it that will determine your longevity in this industry. If you get the right team in place, who want to do


Besides changes forced upon the industry by regulators, what technological innovations have you seen of late that stand out in the mortgage banking side of the industry? All the software and measures that are now in place to prevent mortgage fraud stand out to me. If those same tools were in place back in 2002, the industry wouldn’t be in such a mess. The whole Home Valuation Code of Conduct (HVCC) issue has created many challenges and it remains a problem in terms of getting a quality appraisal. But the idea of having a completely separate individual appraise the property has been very good for the industry. It actually helps Total Mortgage, especially our wholesale channel. If we are working with a mortgage broker that is going to have a friend appraise a home, that is not good. But by sending out my appraisal company, I know there is a very good chance that the value is in the home. At the end of the day, there are things they can do to make it better, but I think HVCC has helped the mortgage industry.

“That was the secret to my success … take care of the back office operations first and the sales will come.” 

Are there any business practices that you started out with 14 years ago that are still an important part of your company today? From the beginning, I have always strived to do the right thing at all times. This must be working, as Total Mortgage has not had a buy-back in over 14 years and it is a true testament to us doing the right things throughout the lending value chain. When Alt-A and sub-prime products were popular, I would talk to my loan officers and say, “Look, I don’t necessarily believe in doing refinances on investment properties at 100 percent with a 580 credit score.” I knew those types of products were out there, but it seems just plain crazy. It takes a little common sense, but I told my team that we were just not going to do those types of loans. We did maybe two or three option ARMs and realized you really needed a sophisticated borrower to understand that product. We do not place borrowers in mortgages that they cannot pay or do not have a likelihood of paying. Vince Lombardi once said: “Gentlemen, we are going to relentlessly chase perfection, knowing full well we will not catch it, because nothing is perfect. But, we are going to relentlessly chase it, because in the process, we will catch excellence. I am not remotely interested in just being good.” Each day, I try to improve the process. I am not afraid to say when something goes wrong and seek out the root cause of the problem and attempt to fix it. When people make mistakes, they

tend to keep it under the carpet, but those small problems can easily turn into big problems, so we attempt to fix them and take the opportunity to get better through constant learning and communication. I say it all the time … problems are just opportunities to get better. We just need to keep reinventing ourselves and get better and better every day.

nmp mortgage professional Are there any social media strategies that you have implemented into your business model? I think it is important to deliver useful information and content to borrowers. Putting information out there just to put information out there will not be a big help in the long run. I believe it is important to deliver relevant information about your company or provide relevant education to the market place. You need to make sure your information is accurate, timely and useful. You want to be a resource for borrowers.




As a message to your wholesale clients, what are some of the ways in which a small- to mid-sized mortgage originator can grow their business? Should they focus on consumerdirect, referrals, infinity programs? The most important thing brokers should focus on is their own operations. If you have a sound operation with confident salespeople who know the products they offer, then the programs begin to sell themselves. That was the secret to my success … take care of the back office operations first and the sales will come. All of the traditional ways to get business are still viable in today’s market and the purchase market is definitely going to come back. If you can support the purchase market and get people to commit to closing on time, your business will grow. Besides real estate agents, are there any other groups that mortgage professionals should be networking with? In addition to past clientele, I would say financial planners, insurance agents, and pretty much the standard list of resources. If you did a great job for your client in the past and provided a great customer experience, you have earned the right to ask them for referrals. Total Mortgage is always looking to get business from our current clients. It’s always at the tip of our tongues. When I started this business, I always gave five business cards to everyone. I would say: “I’m going to give you such great service, that I’ll expect you to get me five great referrals when we are done.” I did that for about a year, and after a while, I thought it was ridiculous. But after a year, I didn’t have to go out on the road anymore. I was still going to Realtors offices, but my business was made up of repeat customers as they trusted doing business with me. If you do a good job, they are going to tell others, the same thing if you do a bad job, they will tell others. Do you miss interacting with borrowers? I am at a different stage now, but I definitely enjoyed it when I started in the business. I took loans until 2001. I enjoy people, and I like to help people, so I did enjoy that side of the business. I had fun, and sometimes, the interview would take two hours because I loved talking with people and learning about them. You get to learn everything … the good, the bad and the ugly.

continued from page 21

Do you think that the loan originator compensation rule has helped or hurt the individual mortgage loan originator? I think there has been a lot of wasted time and energy, and at the end of the day, I really don’t think it benefits the consumer. I believe there are a lot of factors they didn’t consider when they put the LO compensation rule in place. It is hurting the LO and the client, and you’re going to have less competition because there will be less professionals out there offering products. It has been tough on the industry, and it is an example of overregulation. There are pieces that are good and pieces that are bad, but telling how much an LO will make does not compute to me. I don’t understand how that can be applied. Are there any books out there that you’ve found influential? I love Good to Great: Why Some Companies Make the Leap... and Others Don’t by Jim Collins. In fact, I have read the book several times. There are so many points that I like about that book. It discusses getting the right people aboard the bus, and it is a book that I quote quite often. I have given it to many co-workers to read. It’s definitely my favorite business book. Collins also wrote another great book, Built to Last: Successful Habits of Visionary Companies. I also recently read another book, The Billion Dollar Mistake: Learning the Art of Investing Through the Missteps of Legendary Investors by Stephen L. Weiss that discussed Fortune 500 companies that went by the wayside. The book looks at about 10 different Fortune 500 companies, and you see how these companies make mistakes and that there are always pitfalls out there that must be avoided. We need to learn from these mistakes, as well as from their success. Do you draw inspiration from any one particular person or have a mentor? I am inspired by my family. My passion is my kids … it’s not the money, it’s wanting to provide a better and safer life for my kids. Is there anything that worries you about the future of the mortgage business? I am worried about more regulation. I wonder what could be next. They have done so much so fast. There are some benefits to regulations, but some of it is over the top. When you look back at loans that were acceptable in 2005 as compared to today, the banks underwrote them and told me they were okay and they closed these loans. Now they are coming back and saying they should not have approved the loan and now it is our fault. That scares me because it happened to a lot of companies. Are you excited about the future of the mortgage industry? I think there is tremendous opportunity out there for companies that are well-positioned. There is a lot of business to be had and I think Total Mortgage and TMS Funding are both in a position to grow.

heard on the street

continued from page 17

The launch of the wholesale division follows Greenlight’s recent introduction of their reverse mortgage division and the expansion of their government-insured lending channel, including FHA and VA-insured mortgages. Along with broadening the scope of the business, Greenlight continues to widen their national footprint through the expansion of their state licensing. In conjunction with the channel expansions and their retail national marketing campaigns, Greenlight intends to hire an additional 400 mortgage professionals across all divisions centralized at the firm’s Irvine, Calif. headquarters. The hiring effort encompasses all levels of production staff, including licensed loan agents, account executives, processors, underwriters and funders.

have a solid opportunity to achieve and maintain homeownership.”

Ranieri and Ross Purchase Large Multifamily Originator and Servicer From Deutsche Bank

Photo credit: George Doyle

Ranieri Real Estate Partners LP (RREP), a real estate financial services company, and private equity funds affiliated with WL Ross & Company

LLC, have entered into a definitive agreement to acquire Deutsche Bank Berkshire Mortgage (DBBM), a subsidiary of Deutsche Bank. DBBM originates multifamily loans for Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA). DBBM is the second largest originator of Fannie Mae loans and services a $28 billion multifamily loan portfolio. DBBM was founded in 1988 and became a unit of Deutsche Bank in 2004. It has 160 employees and operates out of three primary offices in Bethesda, Md.; Boston and Irvine, Calif. and has additional offices in Dallas, Los Angeles, Nashville and Seattle. Jeff Day will remain as chief executive officer and the current management team and staff are expected to remain with the company.

“The DBBM team has built a top-tier company with a solid business model and proven track record of providing needed liquidity to the multi-family housing industry,” said Jon Vaccaro, co-founder and CEO of RREP. “We are very pleased to partner with WL Ross, Jeff Day and the DBBM team at this important time. We expect the fundamentals of the multi-family market to continue to improve and the shifting preference toward renting over home ownership to fuel significant new demand, making DBBM a strong platform for future growth.” The acquisition is expected to be completed by the close of 2011, and the company will be renamed following the closcontinued on page 26

MetLife to Explore Sale of Its Forward Mortgage Business MetLife has announced that, in addition to its previously announced decision to explore a sale of MetLife Bank NA’s depository business, the company will now also explore a sale of the bank’s forward mortgage business. MetLife Bank began originating forward and reverse mortgages in 2008 through its MetLife Home Loans division. MetLife Home Loans will continue to originate forward mortgages, while the business is being marketed for sale. The company also remains committed to continuing to service all of its mortgage clients.


NewDay’s Servicing Portfolio Hits the $500 Million Mark in Government Loans 


NewDay Financial, a national U.S. Department of Veterans Affairs (VA) and reverse mortgage lender, has announced that the company has built its servicing portfolio to more than $500 million in government loans. NewDay Financial has been servicing government loans for nearly two years, and to date, has serviced more than 3,000 loans. Approximately 85 percent of the company’s portfolio consists of VA loans, while the remainder are Federal Housing Administration (FHA) loans. NewDay’s seriously delinquent loan rate is well below the national average, which the company attributes to its use of powerful data analytics and information technology. “When NewDay became Ginnie Maeapproved, we were already equipped with the talent and knowledge to securitize and service loans, positioning us for this quick and ongoing progression,” said Bruce Giacoma, chairman of NewDay Financial. “By using strong analytics, we can originate and service the best quality loans and continually grow our portfolio on a monthly basis. This milestone represents NewDay’s continued dedication to working with veterans, ensuring they

By David Lykken

The Compassionate Side of Leadership alloween may be behind us, but there is still a scary nightmarish crisis facing us! Do you know what it is? This crisis is far worse than loan originator (LO) compensation changes, worse than the Dodd-Frank Act and even worse than the worldwide debt crisis. For those of you who have been reading this column for the past seven months, you know what I am talking about. It is that “planet Earth is in the midst of a serious leadership crisis!” Another way to put it is that we are experiencing a “leadership deficit” or a “leadership void!” Consider for a moment what is going on in Europe, specifically, in Greece, and the effect it is having on our markets. Globalization has had more than just a “ripple effect” on the world’s economy; it has been more of a tsunami. Think about it for a minute. Greece, if (or more like, when) it defaults on its debt, will have a huge domino affect across all of Western Europe and could very likely crater our country’s debt-ridden economy. The result of globalization is an interconnectedness of our markets with Europe that has scary ramifications. A lack of leadership within the European community is compounding their problems. European leaders seem to prefer denial and/or delusion over taking decisive responsible actions to correct the structural issues perpetuating their financial demise. And we are no better off here at home. Polls suggest that the vast majority of Americans are disillusioned with leadership inside the beltway of Washington, D.C. and the disillusionment is directed at both sides of the political aisle. But here’s the beautiful part of our system … WE CAN DO SOMETHING ABOUT IT! We are gearing up for one of the most important election seasons of our





nation’s history. This process of change that “We the People” have before us is amazing, but we have to act! The solution to this leadership crisis is fairly simple and straightforward—throw out the bad leaders and bring in new “good” leaders. Simple enough, right? Well, on the surface, it may seem simple, but “We the People” haven’t had the best track record of picking “good” leaders in recent years. Many in the electorate are discouraged and sadly disengaged because they feel that they have had the wool pulled over our eyes more than a few times. Many have been duped by great campaign slogans like, “Change You Can Believe In” and “Yes We Can!“ only to realize that three years later, we are in worse shape today than before … or, at a minimum, no better off. The age-old definition of insanity is expecting different results from the same old actions. So, what are the same old actions that we need to change to turn around this crisis? We need to learn how to recognize a good leader by understanding the characteristics that make up a great leader. The good news is that we do have leaders, even strong leaders, walking amongst us—some of whom I believe are reading this article (hint hint, wink wink)! Yes, I am talking about YOU! And if you sense a draw to leadership, give serious study to what it takes to be a great leader and then if still so inclined, step up and boldly answer the call to leadership. Lord knows we need folks to step up and answer the call. If nothing else, I can guarantee that you will be better for it even if you don’t end up being a leader. My own self-realization is that I needed to learn how to recognize good leaders. This launched my quest to study the subject of leadership, and specifically, identify the key characteristics that are resident in a good leader. I

wanted to develop my own list of minimum basic requirements I wanted in a strong leader. That is what inspired me to start writing this series of articles at the first of the year entitled “The Seven Characteristics of Leadership” or “The 7Cs of Leadership.” This series of articles is sort of my own personal journal of what I have learned in my studies. Author’s note: I would personally like to say “thank you” to the many who have taken the time to write me expressing how much this series of articles has helped you. I really appreciate your continued feedback and encouragement. I intend to stay on this journey, learning all I can and will continue to share with you what I learn each month. So, as I am about to start writing about the seventh “C” (characteristic) of leadership, let us start with a quick refresher of the first six of the “7-Cs” resident in outstanding leaders. They are as follows:

1. Character Character is found in the deepest part of our innermost being, and it causes us to decide to go one way or another on the most important of issues. It is like a core processor deep within each of us that receives input, processes it and makes the determination on the best course of action for any given situation. It is commonly referred to as the heart of a person. Character is usually developed through difficult and painful circumstances. That is why it is so important that we look into someone’s life journey and examine the choices they have made before we determine if they are capable of leading. This process of examination will reveal character. Character is like an internal compass—if it is off, even by a couple of degrees, you will end up where you didn’t intend to go. It is the cornerstone in the foundation of every leader.

2. Conviction Conviction is the next building block in the foundation of a great leader and is immediately adjacent to the cornerstone of character. Conviction is what you have as an absolute resolve in your heart to be true and accurate. A strong leader leads from the core of their being. That is why conviction anchored in good character is essential to good leadership. If you follow someone with deep convictions anchored in a compromised character, there is a very high probability that they will lead you somewhere you wished you hadn’t gone. If you doubt me, think about our country’s current direction.

3. Confident Given the difficulties that lie ahead, a strong leader must be someone who has an unwavering confidence that is rooted in deep conviction in sound principles and good character. It is not about power. The counterfeit to confidence is arrogance, which can be spotted from a mile away.

4. Charismatic I believe that the best leaders exude genuine self-less magnetic warmth and have an amazing ability to relate to others. Unlike character which, as I said, is developed, charisma almost always is a gift. Either a leader has it or they don’t. Charisma is not an essential component of leadership, but it is almost always present.

5. Clarity A good leader cuts through and eliminates confusion. They bring clarity to some of the most convoluted and seemingly confusing matters. A strong leader intensely studies whatever issue they are facing and forms a clear plan understandable by all, and then will be able to communicate it concisely.

6. Communicator Because the two most recent articles I wrote were published in this publication on the topic of communication, I won’t review much other than to say that a strong leader knows how to relate and effectively communicate with the broadest and most diverse audience. Love him or hate him, Ronald Regan was renowned for his ability to effectively communicate to a broad and diverse audience.

7. Compassionate This is defined as “Having or showing compassion (a feeling of sympathy and sorrow for those dealing with a misfortune and is accompanied with a strong desire to alleviate the suffering) and is evident in an emergency or time of crisis.” With this characteristic being the main topic for this month’s article, I expound on it in more detail below.

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To listen to author David Lykken’s online radio show, “Lykken on Lending,” log 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) 977-9900, ext. 10, or e-mail or

“A Better Home For Your Branch” 

Compassion is the quality that allows a leader to connect with those he or she leads. Compassion is actually a very strong characteristic that has mistakenly been confused with and misconstrued as weakness. Compassionate leaders of the past are some of our most powerful leaders in history. They are touched, but not de-railed, by the misfortunes of others. They have a strong desire to “make things right.” Some of the best turnaround managers have been some of the most compassionate mangers. By that, I mean those leaders/managers who have been involved with a turnaround management situation, connect with people with compassion, all the while, taking corrective action to make things better. The compassionate component of leadership is less evident or needed when everything is going well. The compassionate component of leadership is most needed when circumstances look bleak if not impossible. In situations like this, the very people you need to turn a negative/bad situation around are often the biggest impediment to turning things around. This is where the expression, “They are their own worst enemy” most likely comes from. The kind of compassion that makes for this kind of great leader originates in the heart. In the book titled, The Truth About Leadership, written by James M. Kouzes & Barry Z. Posner, which by the way I recommend you add to your library on leadership, the authors wrote about 10 time-tested truths that are essential for leaders in these turbulent times. The tenth truth that they write about is “Leadership is an Affair of the Heart.” In this chapter of their book, the say that “Leaders put their hearts in their business and their businesses in their hearts.” What makes up a business (a company)? It is not a balance sheet or an earnings statement. It is the people … pure and simple! A compassionate good leader leads people from the heart. Interestingly, “compassion” and “character” (the first “C” in my list above), are all about the heart, i.e., they are heart issues.

Another book I recently enjoyed reading was The Steve Jobs Way, written by Jay Elliot with William L. Simon. There’s no question that Steve Job was an amazing leader. He changed the way we interact with technology more than any other person. In the book, it is easier to see Steve Jobs’ “passion” than his “compassion.” In fact, there were many engineers who were locked in legacy thinking (the way things have always been) that just couldn’t catch the vision during the development of the revolutionary iPhone. Steve was relentless and didn’t come across as a compassionate leader with those that argued “You can’t build a phone with just one button.” But if you were one of the engineers who caught the vision and worked creatively with Steve, you saw the compassionate side of him. Visionary leaders may not come across as compassionate leaders, but they are if you are connected to their vision/passion. Compassion, when it comes from the heart of a good leader with good values/character, can move people to achieve results they themselves never thought possible, and can help them overcome seemingly insurmountable obstacles. Learn to recognize true compassion in a leader. Even better, learn how to be a compassionate leader and watch what happens. Who knows … you may be one of those leaders walking among us. I challenge you to go back, find and study all of the articles in this “7-Cs of Leadership” series. I encourage you to read them and study them. I have a passion to see leaders rise up among us and answer the call. Let’s work together to end the leadership crisis with which we are fighting. Like that old war poster read, “Uncle Sam Need YOU!” If you are a leader, we really need you! If you don’t believe you are a leader, then at least copy down the description of the 7-Cs above and determine to only follow those leaders who embody all seven. Then, get active in the upcoming election season. It is critical that you do if you want to continue to live with the liberties and freedoms we enjoy.

heard on the street Give And You Shall Receive by Mary Beth Doyle, Founder

Can you believe it’s already November? Even in a challenging market, we have plenty of reasons to be thankful. That’s why it’s important in the next several weeks to be proactive and take necessary steps to dramatically improve closed loan production. The key to maximizing profitability is to touch base in a meaningful way with as many clients, partners, and prospects as possible. LoyaltyExpress can get the job done effectively & efficiently for you. As the leading mortgage marketing company in the United States, each day LoyaltyExpress plays an integral role in the success of top-producing loan officers and executives. Here’s why:




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ing. Completion of the transaction is not contingent on financing, but is subject to approval by the GSEs and the FHA, as well as other customary closing conditions. “We believe that multifamily is a fundamentally important and growing sector of the housing market,” said James B. Lockhart III, vice chairman of WL Ross. “We have long been interested in this sector, and we are confident that we have identified the right vehicle and point in the real estate cycle to pursue an investment. We look forward to working with Ranieri Real Estate Partners to build on DBBM’s strong performance.”

BuildFax and DataVerify Form UAD Compliance Partnership BuildFax and DataVerify have announced a partnership to help lenders meet the property improvement validation requirements outlined in the Uniform Appraisal Dataset (UAD), offering a completely automated solution for validation of property improvements. BuildFax data provides crucial improvement information which is fundamental to new lending standards and required for compliance with Fannie Mae and Freddie Mac’s Uniform Appraisal Dataset (UAD). “Fueled by continued economic uncertainty and unemployment, mortgage fraud is on the rise and remains something which lenders must continually guard against,” said Kent Johnson, vice president of DataVerify. “Innovative resources, of which BuildFax’s Property History Intelligence shines as a top-tier example, are a strong complement to DataVerify’s strategy of delivering products that provide lenders with the critical insight they need to lend safely.” DataVerify reports that, in the last 90 days, 387 lenders have adopted the Property Improvements Intelligence Reports of BuildFax through DataVerify’s industry-leading enterprise-wide risk mitigation platform known as DRIVE. The addition of BuildFax data has provided DRIVE system users with access to differentiated data assets, including property improvement history and the related value of those improvements. Such comprehensive information gives lenders greater insight into collateral risk, which enables them to review, process, and confidently approve mortgage applications in a faster, more efficient manner. “The DRIVE system is the perfect application for BuildFax’s game-changing property intelligence,” said Holly Tachovsky, president of BuildFax. “While regulations and economic malaise are making lending tougher, BuildFax is providing solutions to make lending decisions easier and smarter. And with HUD and FHA having extended the deadlines for UAD compliance until January 2012, even more lenders now have time to integrate BuildFax data into their processes.”

NAREB and HUD Partner to Fight Housing Discrimination In an effort to end discriminatory treatment African-Americans and other minorities, the U.S. Department of Housing & Urban Development (HUD) and the National Association of Real Estate Brokers (NAREB) have announced a partnership to work together to promote fair housing in minority communities. In Fiscal Year 2010, 27.8 percent (2,820) of the 10,157 fair housing complaints HUD and its fair housing partner agencies received alleged race discrimination against blacks. At the same time, a recent HUD report showed that the nation’s “worst case housing needs” increased by 3.2 percentage points among African-American families. The Memorandum of Understanding (MOU) between HUD and NAREB will help end discrimination by informing consumers in African-American and other minority communities and public and private industry members about their fair housing rights and responsibilities under the Fair Housing Act. “This partnership advances HUD’s and NAREB’s joint vision and commitment to end housing discrimination,” said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity (FHEO). “We have turned to the nation’s oldest minority real estate trade association to bring our message of fair housing education and enforcement to neighborhoods across America. With NAREB, we also promote industry compliance and a better consumer service.” Under the MOU, HUD and NAREB will conduct joint seminars, workshops and forums on ways to identify unlawful sales, rental and lending and related government contracting discrimination. Additionally, they will work together to educate people in all communities about their fair housing and related government contracting rights and avenues available to them should they experience discrimination. Furthermore, NAREB will emphasize the importance of fair housing and equal opportunity to real estate professionals as well as work with other organizations and institutions in African American communities, including faithbased groups, government agencies. “NAREB has fought the battle over the last 64 years to make sure that people of all colors have access to fair and equal opportunities in housing, which we believe is in the forefront of what America represents,” said Julius Cartwright, president of the National Association of Real Estate Brokers (NAREB). “We are extremely proud to partner with and have the additional reinforcement of HUD on this very important initiative designed to preserve and stabilize minority neighborhoods and communities across the United States.” continued on page 28

Conference fees Member Registration Fee Access to all conference events. You must be an NAMB member in good standing by Friday, Nov. 18 to obtain the member rates. If you are not a member in good standing by this date you will be charged additional fees upon arrival to the conference. To check the status of your membership, go to Early fees (on or before 11/09/11)—$200 Regular fees (11/10/11 or later)—$250 Non-Member Registration Fee Access to all conference events. Early fees (on or before 11/09/11)—$350 Regular fees (11/10/11 or later)—$450

NAMB/WEST 2011 Loan Originator Conference Saturday-Monday, December 3-5 MGM Grand Las Vegas • 3799 Las Vegas Boulevard South • Las Vegas

New in 2011! Attendees of the 2011 NAMB/WEST Conference will receive a Passport for the Exhibit Hall on Sunday, Dec. 4. Passports will need to be validated by each exhibitor in order to be eligible for drawings. The grand prize drawing, a trip to Hawaii, will be held at the conclusion of the conference on Monday, Dec. 5. Attendees must be present to win. As a bonus, attendees who book their hotel with the group rate before Wednesday, Nov. 9 will receive an extra Passport.

Agenda at a glance (Subject to change)

Saturday, December 3 10:00 a.m.-5:00 p.m. ..........Registration Open 10:00 a.m.-Noon ................Committee Meetings 1:00 p.m.-4:00 p.m. ............NAMB Delegate Council Meeting 4:00 p.m.-6:00 p.m. ............Opening Reception & PAC Auction Event

Sunday, December 4 8:00 a.m.-5:00 p.m. ............Registration Open (Premier Ballroom Foyer)

12:45 p.m.-2:00 p.m. ..........Networking Lunch 2:00 p.m.-6:00 p.m. ............Expo Hall & Networking Reception

8:00 a.m.-5:00 p.m. ............Registration Open (Premier Ballroom Foyer) 8:30 a.m.-10:30 a.m. ..........NMLS Education: Reverse Mortgages (2 Hours) 8:30 a.m.-9:45 a.m. ............Stop Sending Meatloaf Recipes to Vegetarians: One-to-One Marketing Basics 10:00 a.m.-11:15 a.m...........Unlocking Your Success: Disciplines That Make a Lasting Difference 10:45 a.m.-12:45 p.m...........NMLS Education: Ethics (2 Hours) 11:30 a.m.-12:45 p.m...........Session From Ron Vaimberg (topic to be determined) 12:45 p.m.-2:00 p.m. ..........Networking Lunch

NAMB/WEST has discounted rates for conference attendees at the MGM Grand Las Vegas, located at 3799 Las Vegas Boulevard South in Las Vegas ( Any attendee who books their reservations under the NAMB Group Rate will be eligible to receive an extra Passport. The extra Passport will increase your chances to win prizes at the conference. Group rates Friday, December 2........................$110 Saturday, December 3....................$110 Sunday, December 4........................$80 Monday, December 5 ......................$80 Room rates are subject to state and local taxes. The group rate will be offered until Wednesday, Nov. 9. Reservations can be made by calling (877) 313-5757 or (702) 891-7777, or visiting In order to secure the NAMB Group Rate, you must identify yourself as part of the National Association of Mortgage Brokers (NAMB) Conference. Check in for the MGM Grand is 3:00 p.m. and check out is at 11:00 a.m. For your convenience, MGM Grand offers room registration at McCarran Airport. There is an Airport Registration Desk located in the south baggage claim area, near the bottom of the escalators descending from the C and D gates, next to carousel #1 and #2. Shuttle service is available from 9:00 a.m.-11:00 p.m. Porterage service is available 9:00 a.m.5:00 p.m. only.

For more information on the

NAMB/WEST 2011 Loan Originator Conference, contact Kinsley at (303) 798-3664, e-mail or visit



2:00 p.m.-3:00 p.m. ............Using Social Media to Leverage Your Mortgage Business 3:15 p.m.-4:30 p.m. ............Successful Originations in Today’s Challeng and Dynamic Market 4:30 p.m. ..........................Grand Prize Drawing for a Trip to Hawaii 4:45 p.m.-6:30 p.m. ............NAMB Board Meeting

Hotel information


Monday, December 5

Cancellation and refund policy: Notice of cancellation must be made in writing (no exceptions) and sent to or faxed to (303) 798-3668. Cancellations received by 5:00 p.m. EST on Wednesday, Nov. 9 will be refunded 50 percent of the registration fee that was paid. Any cancellation received after that date will receive no refund. 

8:30 a.m.-9:30 a.m. ............NMLS Education: FHA (1 Hour) 8:30 a.m.-9:30 a.m. ............Three Proven Strategies Mortgage Professionals Can Work With Real Estate Agents Online to Generate More Buyers 9:40 a.m.-12:45 p.m. .......... NMLS Education: Federal Law (3 Hours) 9:40 a.m.-10:40 a.m. ..........Stimulate the Economy With the 203K Loan 10:45 a.m.-12:45 p.m........... Get Certified for VA Loans

Visit Exhibit Hall Only This is for mortgage originators only. Early fees (on or before 11/09/11)—$100 Regular fees (11/10/11 or later)—$100




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MBA and EverFi Team Up on Financial Literacy Initiative The Mortgage Bankers Association (MBA) has announced a partnership with EverFi, a financial literacy software company, to bring the latest in new media technology to teach, assess and certify adults in our communities in hundreds of topics in financial literacy. In addition, MBA members will be the first to offer EVERFI@WORK, the company’s new suite of financial literacy platforms for adult customers. “Financial literacy has long been a cornerstone for the MBA and its members,” said David H. Stevens, MBA’s president and chief executive officer. “This program will use the latest in new media to bring the core concepts of personal finance to life for our member’s customers and their families. It will include everything from mortgages, credit scores, savings, planning for retirement and much more.“ The program, which will launch in December, will allow MBA members to private-label EverFi’s programs and provide them to customers, community groups, schools and through other channels in the community. “This is a great day for American consumers,” said Tom Davidson, EverFi’s chief executive officer. “Our goal at EverFi has been to tie financial literacy to every school, every consumer, every product in the U.S. The commitment today by the Mortgage Bankers Association is going to change lives coast to coast.”



ISGN and United Guaranty Announce Tech Partnership

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ISGN Corporation has announced that it is now offering a direct connection to United Guaranty Residential Insurance Company/United Guaranty Mortgage Indemnity Company through its MORvision Plug-In Partner Network. Lenders using ISGN’s MORvision loan origination system (LOS) can now get upfront quotes, order mortgage insurance and receive MI certifications from United Guaranty without having to leave their MORvision systems. The MORvision Plug-In Partner Network is a collection of dozens of third-party providers that has been seamlessly integrated with MORvision, ISGN’s end-to-end loan origination system. Prior to this direct connect upgrade, United Guaranty had a basic MORvision plug-in. Access was limited to Performance Premium customers who had to exit their MORvision systems and log into the United Guaranty Web site,, to request quotes and order mortgage insurance. Now with the new direct connect plug-in, Performance Premium lender customers can order and receive mortgage insurance rate quotes—including a PDF of the quote—and MI certificates without leaving their MORvision systems. Pertinent informa-

tion is automatically transferred, eliminating the need to re-enter rate quote data outside the LOS, saving lenders time and money. MORvision users now have a customdesigned screen where they can not only submit MI data directly to United Guaranty, but also receive MI rate quotes and MI certificate attachments, which are auto-populated into the appropriate MORvision loan files. The United Guaranty submission screen uses the MISMO standard mortgage insurance format and offers an intuitive streamlined user interface that requires fewer clicks than when ordering from the Web site. This customized submission system has been built directly into MORvision.

MBA Partners With Spare Key on Philanthropic Venture The Mortgage Bankers Association (MBA) has announced the creation of a national 501(c)(3) non-profit organization to be the umbrella for philanthropic ventures by MBA and its members to help American families and communities. MBA has selected Spare Key, a charity based in Minnesota devoted to making mortgage payment grants to assist parents with critically ill children, as a model for its new nationwide philanthropic initiative. With plans to roll out Spare Key nationally so that eventually millions of families are helped, MBA will initially establish three pilot programs, the first of these in the Washington, D.C. area. “Spare Key Minnesota has provided assistance to almost 1,300 Minnesota homeowners with critically ill or seriously injured children by making a mortgage payment on the family’s behalf, allowing them to spend time with their child,” said David H. Stevens, MBA’s president and CEO. “Spare Key’s assistance allows parents the ability to take unpaid leave from their work so they can be with their child and involved in their medical treatment and recovery at a very critical time.” Spare Key was founded in Minnesota in 1997 by Patsy and Robb Keech after the death of their two-and-a-half year old son, Derian, who had been born with a genetic birth defect and endured many hospitalizations, and five open heart surgeries in his short life. The MBA will charter the Spare Key chapters, ensuring that each chapter follows national tenets and guidelines, and will provide the necessary guidance and support to help each chapter become successful, leveraging the resources of Spare Key Minnesota.

eLynx and eSignSystems Partner on eVault Technology eLynx, a portfolio company of American Capital, has announced continued on page 33

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a little more speed in 2013 and home sales and home prices also start to increase, purchase originations are expected to increase to $770 billion for the year.  Despite lower mortgage rates towards the end of the year, refinance originations in 2011 will be lower than in 2010, falling to $783 billion from an estimated $1.1 trillion, as there were fewer eligible borrowers left to refinance. We expect this “burnout� to continue through 2012 and 2013, even as rates remain below five percent, with refinance originations falling steadily to $495 billion and then $332 billion, respectively.

Mortgage Servicers Under the OCC’s Microscope The U.S. Office of the Comptroller of the Currency (OCC) has announced its independent foreclosure review process of the nation’s mortgage servicers. On April 13, 2010, the OCC, along with the Board of Governors of the Federal Reserve Board (FRB), and the Office of Thrift Supervision (OTS) announced enforcement actions against 14 large residential mortgage servicers and two third-party vendors for unsafe and unsound practices related to residential mortgage servicing and fore-

closure processing that occurred in 2009 and 2010. Independent consultants are charged with evaluating whether borrowers suffered financial injury through errors, misrepresentations, or other deficiencies in foreclosure practices and determining appropriate remediation for those customers. Where a borrower suffered financial injury as a result of such practices, the consent orders require remediation to be provided. “The independent foreclosure review is a significant component of the mortgage servicers’ compliance with our enforcement actions,� said acting Comptroller of the Currency John Walsh. “These requirements help ensure that the servicers provide appropriate compensation to borrowers who suffered financial harm as a result of improper practices identified in our enforcement actions.� The 14 mortgage servicers covered by the enforcement actions began mailing letters on Nov. 1 to eligible borrowers that explain how to request a review of their case if they believe they suffered financial injury as a result of errors, misrepresentations, or other deficiencies in foreclosure proceedings related to their primary residence between Jan. 1, 2009 and Dec. 31, 2010, and the property securing the loan must have been the primary residence. The mortgage must have been serviced by one of the following mortgage servicers:

America’s Servicing Company, Aurora Loan Services, Bank of America, Beneficial, Chase, Citibank, CitiFinancial, CitiMortgage, Countrywide, EMC, Everbank/Everhome, First Horizon, GMAC Mortgage, HFC, HSBC, IndyMac Mortgage Services, MetLife Bank, National City, PNC, Sovereign Bank, SunTrust Mortgage, U.S. Bank, Wachovia, Washington Mutual and Wells Fargo. Borrowers may also visit for more information about the review and claim process. Requests for reviews must be received by April 30, 2012. In addition to this outreach and claims program, independent consultants will also review a variety of sample cases from each servicer. Where they identify issues, they will conduct additional secondary reviews to identify as many affected borrowers as possible. “The challenge is substantial, but the steps we have required the servicers to take are vitally important to resolving these issues in a way that respects the rights of those who have been harmed and helps to restore confidence in the system,� said Walsh. Walsh said the reviews will take several months to complete, considering the large pool of borrowers that could be part of the review. The enforcement actions also require the servicers to correct other deficiencies in residential mortgage loan servicing and foreclosure practices. Work related to correcting these deficiencies is also underway and includes enhancing oversight of third-party foreclosure service providers, upgrading management infor-

mation systems associated with mortgage servicing and foreclosure processing, and improving communication with customers by establishing a single point of contact and eliminating “dual tracking,� in which servicers continue to pursue foreclosure even though a borrower may have been approved for, or is performing under the terms of a loan modification or trial modification, among other steps.

FHFA Mandates That GSEs Adopt Improvements to Foreclosure Attorney Networks The Federal Housing Finance Agency (FHFA) has directed the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, to transition away from current foreclosure attorney network programs and move to a system where mortgage servicers select qualified law firms that meet certain minimum, uniform criteria. Under current practice, in certain states each GSE designates law firms eligible under the GSEs’ criteria to undertake foreclosure work and mortgage servicers, then select and work with these firms. The new approach is in line with FHFA’s Servicing Alignment Initiative that produced uniform foreclosure processing standards to assist servicers, homeowners and lenders. The FHFA believes these efforts will lead to continued on page 30


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the secondary market overview were a few years ago. It is a much shorter jump from adding 100,000 jobs per month to adding 250,000 (where we need to be), as opposed to losing 400,000 jobs per month and scratching our way to a positive of 100,000. At least that is the way my calculator works.  Europe. I believe the world will take the action necessary to put a plan in place to avoid economic calamity in Europe, just as we did when the fiscal crisis hit in 2008. Already in mid-October, the nations are formulating a plan to rescue banks and countries. Will this plan succeed? Some analysts think that the plan will not be broad enough in scope to be effective. Remember, I am the eternal optimist.




 The government. As I have mentioned time and time again, the reduction of government budgets will prove to be a negative influence upon growth in the shortterm. However, the long-term health of our economy requires this pain. Just like the hurricanes, earthquakes and government debt negotiations that have all slowed down the economy this year, government “shrinkage” remains a substantial but temporary factor. If you were to look for evidence that we are closer to recovery than many think, look at the bond markets. It is true that rates moved to record lows in the face of the summer slowdown and in reaction to negative statements by the Federal Reserve and the introduction of their “Operation Twist.” These low rates were indicative of the prevailing view—recession is either here or imminent. But as soon as we received “decent” employment news and positive news from Europe, the bond

continued from page 10

market dove with a vengeance. The 10-year Treasury moved up close to 0.50 percent within about 10 days. I have been saying for months not to get too used to super low rates. Good economic news is all we need to move the markets in the other direction. That good news will give the stock markets and the consumer confidence. This is the next step required in order to turn it all around. Note that these rates rose in the face of implementation of Operation Twist. The Fed will not be able to keep rates low in the face of a recovering economy, nor will they desire to do so. Could Mother Nature, Europe or the debt negotiations throw another wrench in this scenario? Absolutely. I cannot predict the future. I like the refinances. They are making loan officers busy and freeing up more cash for consumers. However, we know rates will have to rise before purchases pick up because the markets will react before consumers do. And I repeat my warning to loan officers: You should be instilling a sense of urgency for those who are considering refinancing. Yes, some are waiting until rates hit 3.5 percent, but there is a lot more room for them to rise than to fall, and there is a daily cost of waiting if they are already in a profit situation with regard to today’s rates. If you don’t know how to calculate that number, e-mail me … “The Optimist?” Dave Hershman is a leading author for the mortgage industry with eight books and several hundred articles to his credit. He is also a top industry speaker. If you would like to stay ahead of what is happening in the markets, visit for a free trial. Dave’s OriginationPro Marketing System can be found at and he may be reached by e-mail at






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greater transparency and benefit delinquent borrowers who become subject to the foreclosure process. Further, the change will be supportive of the Consent Orders entered into by financial regulators and servicers. The changes will be implemented after a transition period in which input will be taken from servicers, regulators, lawyers and other market participants. During this period, existing contracts remain in place and in effect.

Shadow Inventory Drops to 1.6 Million Units Nationwide CoreLogic has reported that the current residential shadow inventory, as of July 2011, declined slightly to 1.6 million units, representing a supply of five months. This is down from 1.9 million units, a supply of six months, from a year ago, and follows a decline from April 2011 when the nationwide shadow inventory stood at 1.7 million units. The moderate decline in shadow inventory is being driven by a pace of new delinquencies that is slower than the disposition pace of distressed assets. CoreLogic estimates the current stock of properties in the shadow inventory, also known as pending supply, by calculating the number of distressed properties not currently listed on Multiple Listing Services (MLSs) that are seriously delinquent (90 days or more), in foreclosure and real estate-owned (REO) by lenders. Transition rates of “delinquency to foreclosure” and “foreclosure to REO” are used to identify the currently distressed non-listed properties most likely to become REO properties. Properties that are not yet delinquent, but may become delinquent in the future are not included in the estimate of the current shadow inventory. Shadow inventory is typically not included in the official metrics of unsold inventory. Highlights of CoreLogic’s report include:  Of the 1.6 million properties currently in the shadow inventory, 770,000 units are seriously delinquent (2.2-months’ supply), 430,000 are in some stage of foreclosure (1.2months’ supply) and 390,000 are already in REO (1.1-months’ supply).  As of July 2011 the shadow inventory is 22 percent lower than the peak in January 2010 at two million units, 8.4-months’ supply.  The total shadow and visible inventory was 5.4 million units in July 2011, down from 6.1 million units a year ago. The shadow inventory accounts for 29 percent of the combined shadow and visible inventories.  The aggregate current mortgage debt outstanding of the shadow inventory was $336 billion in July 2011, down 18 percent from $411 billion a year ago.

“The steady improvement in the shadow inventory is a positive development for the housing market,” said Mark Fleming, chief economist for CoreLogic. “However, continued price declines, high levels of negative equity and a sluggish labor market will keep the shadow supply elevated for an extended period of time.”

Rep. Garrett Submits Proposal to Revamp the GSEs Rep. Scott Garrett (R-NJ), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, has unveiled a proposal to reform the secondary mortgage market to ensure robust private investment in the U.S. mortgage market without a government guarantee. “Since taking control of the House in January, we have remained steadfast in our drive and determination to end the ongoing bailout of Fannie Mae and Freddie Mac, protect taxpayers from future bailouts, and encourage private capital to re-enter the secondary mortgage market,” said Rep. Garrett. “Now that we have taken the important step of introducing a series of bills to wind down the governmentbacked mortgage twins, it’s time to start thinking about the ways we can jumpstart the private market to step in once they’re gone. My proposal to reform the secondary mortgage market will facilitate continued standardization and uniformity, ensure rule of law and legal certainty, and provide investors with the standardization and transparency necessary to ensure that a deep and liquid market develops in the absence of Fannie and Freddie.” Throughout the 112th Congress, Garrett and his Republican colleagues on the Financial Services Committee have taken an incremental approach to gradually chip away at the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. In March, House Financial Services Committee Republicans unveiled eight bills during the first round of legislation and then followed it up with a second round of seven bills in May. To date, 14 of the 15 bills have been cleared through the Capital Markets and GovernmentSponsored Enterprises Subcommittee and are scheduled to be considered by the full Financial Services Committee in the next few months.

Delaware Attorney General Biden Files Suit Against MERS Delaware Attorney General Beau Biden has filed suit against the Mortgage Electronic Registration System (MERS) charging that MERSCORP and its subsidiary Mortgage Electronic Registration Systems Inc. have repeatedly violated the state of Delaware’s Deceptive Trade Practices Act.

County, Del. in which MERS foreclosed on a loan in which it had no interest and without naming the real party in interest. In fact, the entity upon whose behalf MERS sought to foreclose had actually been dissolved months prior. MERS’ own records indicated numerous transfers in and out of MERS that were not reflected in the county records, as required by MERS’ own rules. The confusing path and inaccurate records associated with this mortgage are not an isolated instance of bad record keeping by MERS.

A Bright Spot in

Financial Institutions See Rise in Fraud in Defaulted Mortgages


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The Financial Crimes Enforcement Network (FinCEN) has reported in its Second Quarter 2011 Analysis of mortgage fraud suspicious activity reports (SARs) that financial institutions filed 29,558 Mortgage Loan Fraud SARs in the second quarter of 2011, up from 15,727 MLF SARs reported in the same quarter of 2010. A large majority of the MLF SARs examined in the second quarter involved mortgages closed during the height of the real estate bubble. The upward spike in second quarter MLF SAR numbers is directly attributable to mortgage repurchase demands and special filings generated by several institutions. For instance, FinCEN noted that 81 percent of the MLF SARs filed during the quarter involved suspicious activities that occurred before 2008; 63 percent involved suspicious activities that occurred four or more years ago. “We’re continuing to see a large number of SARs filed on activity that occurred more than two years ago, an indication that financial institutions are uncovering fraud as they sift through defaulted mortgages,” said FinCEN Director James H. Freis Jr. “But we also continue to see indications of ongoing mortgage fraud activities. FinCEN’s report released today raises awareness of the common scams that homeowners and lenders may encounter when arranging or modifying home financing.” The Q2 2011 FinCEN report showed that misrepresenting income, occupancy, or debts and assets, followed by debt elimination scams and scams involving the fraudulent use of social security numbers, topped the types of suspicious activity reported by filers of MLF SARs. FinCEN examined a subset of quarterly filings that reported suspicious activity occurring within 90 days of filing, to better understand the latest trends in the reporting of suspected mortgage fraud. Other suspicious activities noted in MLF SARs include identity theft, false statements and false documents, debt elimination scams, fraud involving short sales and appraisals, forged rescission of notice of default, advance fee scams, buy and bail schemes, and money laundering. 

“Since at least the 1600s, real property rights have been a cornerstone of our society,” said Attorney General Biden. “MERS has raised serious questions about who owns what in America. A man or woman’s home is not just his or her largest investment, it’s their castle. Rules matter. A homeowner has the obligation to pay the mortgage on time, and lenders must follow the rules if they are seeking to take away someone’s house through foreclosure. The honor system won’t work.” Biden feels that MERS engaged, and continues to engage, in deceptive trade practices that cause confusion among homeowners, investors and other stakeholders in the mortgage finance system, seriously damaging the integrity of the land records that are central to Delaware’s real property system, and leading to improper foreclosure practices. These deceptive trade practices fall into three broad categories:  MERS, through its private mortgage registry, knowingly obscures important information from borrowers and the information that MERS does provide to borrowers is frequently inaccurate. The opacity of MERS’ mortgage registration database makes it difficult for consumers to know of or challenge inaccuracies in the MERS System.  MERS often acts as an agent without authority from its proper principal. Because the MERS System was both unreliable and frequently inaccurate, MERS often does not know the identity of its proper principal. Where the name of the owner of the mortgage loan recorded in the MERS System does not reflect the true owner, any action MERS takes on behalf of the purported owner is without authority.  MERS is effectively a “front” organization that has created a systemically important mortgage registry, but fails to properly oversee that registry or enforce its own rules on its members that participate in the registry. Rather than maintaining an adequate staff to provide MERS’ services, MERS operates through a network of over 20,000 deputized non-employee corporate officers who cause MERS to act without any meaningful oversight from anyone who works at MERS. MERS, which is incorporated in Delaware and based in Northern Virginia, was formed in 1995 to facilitate the growing mortgage finance market. Large banks, such as Bank of America and Wells Fargo, the quasigovernmental institutions Fannie Mae and Freddie Mac, and other participants in the mortgage-lending industry created MERS to bypass the county Recorders of Deeds offices throughout America. Unfortunately, there was little to no outside oversight of MERS’ murky registry or transparency for homeowners. MERS did not meaningfully audit its records and failed to even enforce its own rules governing members’ conduct. The complaint cites an example of a recent foreclosure in New Castle

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NRMLA Study Finds to warehouse lenders, while still proSeniors Own More Than tecting Ginnie Mae’s interests as the $3 Trillion in Home Equity guarantor of the securities.”


An estimate of senior home equity owned by Americans aged 62 and over stood at $3.14 trillion as of the end of the second quarter in 2011 measured by the National Reverse Mortgage Lenders Association (NRMLA)/RiskSpan Reverse Mortgage Market Index (RMMI). The index tracks the reverse mortgage market opportunity by analyzing and reporting on trends in senior home values and senior home equity levels. The RMMI continued its slide in the second quarter of 2011, falling by two percent to 149.9, its lowest level since the second quarter of 2004. In the second quarter of this year, housing prices in 340 of the 395 MSAs (including the 10 largest) tracked by FHFA and RiskSpan saw quarter-overquarter declines, sending aggregate senior housing values down 1.6 percent to $4.16 trillion. Senior mortgage debt levels fell for the ninth straight quarter to $1.02 trillion, leaving seniors with $3.14 trillion in equity, a level $63 billion lower than in the first quarter. “While the senior equity level is 22 percent off of its Q2 2006 peak, the equity level of the overall population is down 38 percent from its Q1 2006 peak,” said Peter Bell, president of NRMLA. “This is due to the relatively fast growth and lower mortgage debt levels of the senior population.”



Ginnie Mae Increases Program Flexibility for Issuers and Warehouse Lenders

Additionally in the new agreement, Ginnie Mae no longer requires creditors to name a stand-by issuer when an Acknowledgment Agreement is executed; instead, when a portfolio needs to be transferred, the creditor is given the opportunity to identify an approved Ginnie Mae Issuer to assume the portfolio. In exchange for limiting its ability to refuse a transfer of servicing, Ginnie Mae requires the creditor to accept the portfolio. The changes to the Acknowledgement Agreement are aimed at addressing concerns of Issuers that it can be difficult to pledge Ginnie Mae servicing as there has not been certainty regarding whether Ginnie Mae will agree to transfer the collateral to the creditor. “This new agreement balances the interests of Ginnie Mae, its Issuers and their creditors and takes us one step closer to our goal of ensuring the Ginnie Mae program has a large, diverse Issuer base that makes it possible for borrowers in government programs to obtain the best interest rates,” Tozer said. Recently, Ginnie Mae issued guidance to clarify the rights of creditors when Issuers pledge mortgage loans prior to securitization, allowing warehouse lending arrangements to proceed more smoothly. The updated Acknowledgement Agreement offers additional flexibility to creditors that are not Ginnie Mae Issuers and eliminates obstacles that prevent smooth servicing transfers.

Report Shows Heating and Utility Needs Among Ginnie Mae has Issues Facing American announced that it is Homeowners

providing its issuers with greater flexibility to pledge mortgage servicing rights for financing. Ginnie Mae’s announced enhancements provide program flexibility by clarifying and limiting the circumstances under which Ginnie Mae can refuse a transfer of servicing to the issuer’s creditor. These “Acknowledgement Agreement” changes will make it simpler for Ginnie Mae to honor servicing pledges and permit the transfer of related servicing rights. In the Ginnie Mae program, the “Acknowledgement Agreement” lays out the legal rights and responsibilities of Ginnie Mae, its issuer and the issuer’s creditor when a Ginnie Mae servicing portfolio serves as collateral for a loan. “As part of our ongoing effort to meet the needs of Issuers and their creditors, and ultimately provide increased liquidity for consumer lending, Ginnie Mae has taken steps to make our program more flexible,” said Ginnie Mae President Ted Tozer. “The updated agreement offers additional flexibility

MortgageKeeper Referral Services, developer of a Web-based app that connects struggling homeowners with qualified non-profit and government agencies, has released its third quarter 2011 Homeowner Needs Status Report. The report showed that homeowners received from MortgageKeeper nearly 224,000 referrals between July and September 2011—the most referrals ever requested. Utility assistance was the most requested category for help (15 percent of referrals). Food assistance (13 percent) and employment services (12 percent) rounded out the top three most needed services. “The number of homeowners in financial trouble keeps rising, and local assistance is the best, most reliable means of help,” said Rochelle Nawrocki Gorey, president of MortgageKeeper Referral Services. “MortgageKeeper is continued on page 38

FCRA Certification for Your Employees Coming to a credit reporting agency near you! By Terry W. Clemans To keep up with today’s ever-increasing regulatory environment, the National Credit Reporting Association Inc. (NCRA) has developed a certification program designed for the users of credit reports (employees of mortgage lenders, and property managers/landlords) to assist them in understanding the various federal laws and national credit repository guidelines that regulate their access to credit data. Access to consumer credit data is critical to their business operations and for continued access, tight compliance with these regulations is mandatory. Those who participate in the certification program will be provided with a study guide and expected to complete a certification test. A major portion of the test is knowledge of the Fair Credit Reporting Act (FCRA). Additionally, the test will cover areas of the Fair and Accurate Credit Transactions Act (FACTA the 2003 overhaul to the FCRA), the Gramm-Leach-Bliley Act (GLB), the Red Flags Rule, and specific national credit repository requirements that also impact a credit report user’s access to consumer credit data. A solid working knowledge of the responsibilities for those who come into contact with consumer credit reports is required by federal law. Any company that is granted access to a consumer’s credit report data needs to be sure that anyone in their organization with access to these reports knows how to properly obtain that credit data and how they maintain and dispose of it when the transaction is complete. This entire process is being scrutinized more than any other time in history, both internally by our own industry, and by the federal regulators who oversee compliance. The Federal Trade Commission (FTC) and the new Consumer Financial Protection Bureau (CFPB) have authority over this data as well as over those who use it, and have been taking action for its misuse. With the devastating problems millions of Americans have had due to the abuse of the information by fraudsters and computer hackers looking for any possible gateway into the systems, the increased scrutiny is not going to subside. Being certified on your knowledge of the regulations about the safeguarding of this data is an important step to being assured your access to consumer credit bureau data will continue. The program is online and features a comprehensive study guide that provides all of the materials needed to be able to learn the information required to pass the test. The test features 30 multiple choice and true/false questions that can be taken in an open book (if the user prints the study guide) format. Since only 45 min. is provided to complete the 30 questions, the test-taker must know the data thoroughly to be able to answer 75 percent of the questions accurately and to obtain FCRA Certification. Retesting is allowed if the person is not successful on the first attempt. After successfully completing the test, an FCRA Certification will be downloaded to document successful completion of the program. Retesting is suggested every year to keep up with the latest changes in the complex regulatory world in which we operate. Developed by NCRA and sponsored by 80 percent of the credit reporting agencies in the U.S. that can provide credit reports that meet the standards of Fannie Mae, Freddie Mac and the U.S. Department of Housing & Urban Development (HUD) for mortgage lending, the test will be provided free of charge to the customers of NCRA member credit reporting agencies. It is important to note that while certification is not currently mandatory, there have been strong indications from at least one of the national repositories and federal agencies that further education to the laws and advanced training may be required in the near future. To obtain access to the FCRA Certification Program, ask your credit reporting provider if they are a member of the NCRA or contact the NCRA at to locate an agency near you that can sponsor your FCRA Certification beginning Jan. 1, 2012. Terry W. Clemans is executive director of the National Credit Reporting Association Inc. (NCRA). He may be reached at (630) 539-1525 or e-mail

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Mortgage Professionals to Watch

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Why Is It Easy to Trap Real Estate Agents with ShortSaleSpeedway™? Many real estate agents shy away from short sales because of the complexity involved in doing it themselves. When they refer the work to an attorney or third party negotiator, they risk losing a great chunk of their commission. ShortSaleSpeedway™ automates the short sale process, by creating all of the documents a real estate agent needs to create the superior short sale proposal exactly how banks want to see them.

How Can ShortSaleSpeedway™ Help YOU Trap Real Estate Agents? Your company can have your very own, private labeled version of ShortSaleSpeedway™ that you offer at no cost to your real estate agents. They will now have the tools provided by your company to be a true short sales specialist. Now they can negotiate short sales with ease and not have to give away their commission to someone else. You’re providing them with a tool that puts more money in their pocket.

What Do We Provide You? When you have your own ShortSaleSpeedway™, we provide you with the following: Q Your own customized private labeled ShortSaleSpeedway™ site Q Access to reporting on all borrowers being put into the system Q Training for you, your real estate agents and a dedicated support team Q Marketing materials to promote your ShortSaleSpeedway™ to real estate agents In many cases, the setup for the private labeled site costs you nothing!

For a free demo, contact Erik Wind, at (800) 262-3783, ext. 701 or visit


 Jennifer Creech has been promoted to the position of president and CEO of InHouse Inc.  360 Mortgage Group has announced the addition of David White as an account executive.  Jay Jacobs has been named senior vice president of ServiceLink’s Default Abstract Solutions Group.  Multi Financial Services Company Inc. has announced the addition of Sonja Grant Wheeler to its firm.  Mike Forgas, former CEO of National Real Estate Information Services (NREIS), has joined Urban Lending Solutions as chief strategy officer.  Brandy Sams has joined WFG National Title Insurance Company as director of the firm’s Default Division.  Radian Guaranty Inc., the mortgage insurance subsidiary of Radian Group Inc., has announced the addition of several new team members nationwide: Christine Brown joins the firm as senior account manager in the Maryland and Washington, D.C. areas; Katherina DiMartino has been named senior account manager in the Illinois, Indiana, Missouri, Kansas, Kentucky and Ohio regions; Rona Draper has joined the Radian team as director of regional new business development for the Alaska, California, Hawaii, Nevada, Oregon and Washington regions; Deanna Kase has been named senior account manager for the Tampa Bay and northern Florida regions; Baird Marble as senior account manager in the southern California region; and Rebecca McDermott as senior account manager in the southern Texas region.



 Rick Sharga, former senior vice president of RealtyTrac Inc., has joined Carrington Mortgage Holdings as executive vice president. Carrington Property Services LLC, a subsidiary of Carrington Mortgage Holdings, has hired Michael Harris as president. 

 The Mortgage Bankers Association (MBA) has elected its leadership for the 2011-2012 year, including Michael W. Young, CMB, chairman of the board of Cenlar FSB, as chairman; Debra W. Still, CMB, president and CEO of Pulte Mortgage LLC as chairman-elect; and EJ Burke, EVP and group head of KeyBank Real Estate Finance, as vice chairman.

 Lender Processing Services Inc. (LPS) has announced the appointment of Hugh R. Harris as president and chief executive officer.


the company’s partnership with eSignSystems to make the firm’s SmartSAFE eVaulting software available as part of the eLynx electronic closing network (eCN). The SmartSAFE Bundle offers a complete solution to store, access, and manage legally binding electronic mortgages. The addition of eVault services to eCN, gives eLynx customers electronic options for all stages in the life-cycle of a loan. “Lenders understand the value of an end-to-end electronic mortgage workflow but want to avoid the high risk of disrupting their established systems and processes,” said Sharon Matthews, president and CEO of eLynx. “eLynx’s customers can now easily and seamlessly extend their existing loan fulfillment to include eVaulting services.” “eVault services allow lenders to improve efficiency and transparency of mortgages by reducing funding times and improving loan quality through an electronic workflow,” said Kelly Purcell, executive vice president of marketing and sales for Wave’s eSignSystems division. “SmartSAFE builds on the strong compliance foundation already built into eCN with additional audit logs and controls required for eMortgage lending. We’re proud to be part of the eCN solution.” eLynx’s eCN solution has become an industry-recognized electronic closing platform, with more than one million loans being processed annually and approximately 100,000 settlement agents registered in eLynx’s nationwide settlement agent database to close loans.


heard on the street

loan originator compensation 16.



19. 20. 21.

last three years, in how many transactions has the institution required or used the steering Safe Harbor provision under the Rule? Institution may answer with a number or the percentage of total loans originated. Does the institution require third party originators to use the steering Safe Harbor provision? If a creditor, what action does the institution take to monitor third party compliance with the steering Safe Harbor provision? If the institution does not require or use the steering Safe Harbor provision what methods does it use to determine that steering has not and will not occur? How long does the institution retain compensation agreements? How long does the institution retain records of actual compensation? How long does the institution retain records that support the options offered under the steering Safe Harbor provision?

Documents and information




I would like to end this article with a brief overview of the kinds of documents that should be involved in a thorough review involving loan originator compensation. The list I am providing is not meant to be complete, since each financial institution differs in many ways. This is a general list that we would require in a Document Request. A financial institution should be prepared to provide the documentation and information virtually immediately. If a lot of time is needed to get the documents together, the financial institution is, unfortunately, simply not prepared for the examination and should expect the examiner to notice the lack of preparedness. In addition to the Institution Information Request and Institution Questionnaire that I have described, expect to provide Employment Agreements for Loan Officers, Sales Managers, Producing Branch Managers, and Non-Producing Branch Managers. If the Compensation Plans are not part of the Employment Agreements, but separately attested to, then expect to provide them for these same individuals. A list of affiliates will be required (i.e., title companies), if applicable.11 Wholesale channels must be able to deliver the Wholesale Broker Agreement, Compensation Plan, and any Announcements. Indeed, any origination channel must be ready to provide Presentations and all relevant Announcements. Examiners will audit certain areas of interest that directly impact actual loan originations. In this regard, expect to provide the loan application register for all applications taken from April 6, 2011 to the date stipulated in the examiner’s Document Request letter. For that same period, also expect to provide Monthly

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Production Reports, and Rate Sheets. Finally, the examiner will test the data provided against a complete analysis of loan originator specific data, such as the loan number, loan originator’s name, and borrower’s name, as well as the subject property state, each MLO’s compensation payments, and each MLO’s date of employment or affiliation.

Final words of advice Most of our clients know that I tend to be a Mother Hen when it comes to taking care of their mortgage compliance needs. I admit it wholeheartedly. In my opinion, each institution should appoint its own version of a Mother Hen in order to assure that examination preparation for loan originator compensation is properly vetted and readied. The penalties for violations are steep and could be catastrophic, not only with respect to the so-called “traditional” penalties, such as actual damages, statutory damages (up to $4,000 for each individual action and potential class action), and attorneys’ fees and costs, but also there is “enhanced” liability for creditors, such as refunding all finance charges and fees paid by the consumer (unless the creditor demonstrates that the failure to comply is not material). Loan originators are exposed to penalties of the greater of actual damages or three times the compensation or gain on the loan (i.e., liability even if there are no damages); a longer “statute of limitations” for loan originator compensation and certain other violations so that actions may be brought until the end of a three year (i.e., not a one year) period from the date of the violation; and, state Attorneys General are authorized to enforce violations of loan originator compensation and certain other requirements. Given the penalties for violations of the loan originator compensation guidelines, now is the time to prepare, in advance, and be continually ready for the inevitable notice of the forthcoming regulatory examination. Jonathan Foxx, former chief compliance officer for two of the country’s top publicly-traded residential mortgage loan originators, is the president and managing director of Lenders Compliance Group, a mortgage risk management firm devoted to providing regulatory compliance advice and counsel to the mortgage industry. He may be contacted at (516) 442-3456 or by e-mail at

Footnotes 1–Due to litigation, the April 1, 2011 implementation date was temporarily stayed. The stay was dissolved. The effective compliance implementation date of the Rule is April 6, 2011. 2–For instance, Foxx, Jonathan, “Landmark Financial Legislation: New Rules for Mortgage Originators–Part I: Reformation and Regulations,” National Mortgage Professional Magazine, August 2010, Volume 2, Issue 8, pp.

28-42; Foxx, Jonathan, “A New Era of Mortgage Reform–Part II: Legislation–Reactive or Proactive,” National Mortgage Professional Magazine, September 2010, Volume 2, Issue 9, pp. 22-28; Foxx, Jonathan, “A New Era of Mortgage Reform–Part III: Consumer Financial Protection–Bureau and Bureaucracy,” October 2010, Volume 2, Issue 10, pp. 22-40; Foxx, Jonathan, “The Birth of an Agency,” National Mortgage Professional Magazine, September 2009, Volume 1, Issue 5, pp. 24-27; and Foxx, Jonathan, “The CFPA Controversy: Asking the Tough Questions,” National Mortgage Professional Magazine, October 2009, Volume 1, Issue 6, pp. 22-25. All newsletters and articles through 2011 are available at: 3–See information about the FAQs Outline–Loan Originator Compensation by visiting the Library section of my firm’s Web site, 4–HR 4173: Dodd-Frank Wall Street Reform and Consumer Protection Act, 111th Congress (2009-2010): “A bill to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end “too big to fail”, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.” Sponsored by Rep. Barney Frank (D-MA) and Sen. Christopher Dodd (D-CT). 5–Compliance Guide to Small Entities, Regulation Z: Loan Originator Compensation and Steering, 12 CFR 226, Federal Reserve Board, Jan. 26, 2011. 6–July 21, 2011 is the date, pursuant to DoddFrank, that the Consumer Financial Protection Bureau (CFPB) receives rulemaking and exami-

nation authority over the “enumerated laws,” the so-called “Designated Transfer Date.” See Designated Transfer Date, Bureau of Consumer Financial Protection, Federal Register, Vol. 75, No. 181 (09/20/10). The Designated Transfer Date must be between Jan. 17, 2011 and July 21, 2011, unless the Treasury Secretary determines that the orderly implementation of Title X is not feasible within 12 months; but, in no case may the Designated Transfer Date be later than Jan. 21, 2012. In fact, the loan originator compensation guidance was transferred to the CFPB on July 21, 2011. 7–The State Non-Depository Examiner Guidelines for Regulation Z–Loan Originator Compensation Rule is dated Oct. 6, 2011, although the announcement of its issuance was on Oct. 7, 2011. 8–The Multistate Mortgage Committee (MMC) released this set of examiner guidelines to assist state regulators in implementing the FRB’s loan originator compensation restrictions under Regulation Z [12 C.F.R. § 226.36(d), (e)]. Earlier this year, the MMC also issued the Mortgage Examination Manual, which provides information and criteria for the examination of multistate mortgage entities, and further provides guidance on examination planning and administration. 9–Please take note: This article is being published in the November 2011 edition of National Mortgage Professional Magazine, and it reflects certain information available at this time. Please be mindful that regulatory requirements and preparedness actions may change in the future and at any time. 10–See §226.36(e)(1). 11–See §226.36(d)(3).

lender insurance to play key role receive a Standard Flood Hazard Determination more quickly. The rise in the number of real estateowned (REO) properties nationwide presents unique challenges as well. While most insurance carriers will not cover REO properties without also providing lender placed hazard and flood programs, third-party offerings may include plans that are tailored toward “stand alone” REO properties independent of a lender placed program. Some lenders may seek insurance that covers multiple property types. Blanket Insurance Protection eliminates the need for lenders to track each individual policy, reducing the cost associated with servicing loan portfolios. This type of protection includes hazard coverage for first mortgages, second mortgages, home equity line of credit and condominiums. Other options may include Vendor Single Interest Insurance, policies which provide lenders with either Named Peril or All Risk physical damage in the event of an uninsured loss. Such a case might occur if a borrower fails to insure their collateral. Third parties also provide lenders with a unique opportunity for insurance outsourcing. There are outsourcing service providers available for every portfolio, no matter the size. Today’s technology can match lenders with the solution that works best for them from

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“More often than not, lenders shop much like a typical consumer does—find the insurance plan that meets their immediate needs in the fastest way possible, which often means accepting a product with inadequate coverage or pricing.”

institutions with as few as 1,500 loans to those exceeding one million loans.

Contain costs, improve efficiencies In uncertain times, lender insurance products provide a safe haven for lenders. Experienced third-party providers can help lenders more accurately evaluate their insurance needs and identify the best plan that matches the individual needs of each lender. As the economy continues to show sluggish rates of recovery, lenders will simply be required to insure property themselves to protect their bottom line. Larry Cason is president and founder of The IL Group. Founded in 1980, The IL Group is based in Gulf Shores, Ala. The business provides customized lender placed products and services to lending institutions nationwide. For more information, visit or call (251) 968-9888.

and Marketing Policy Manual, Appraiser Independence Policy Manual, Broker Quality Control (QC) Plan, FHA Delegation Policy Manual, Loan Repurchase and Rescission Policy Manual, SAFE Act Policy Manual, Servicemembers Civil Relief Act (SCRA) Policy and Procedure Manual, and Wholesale Quality Control and Broker Monitoring Policy Manual. Currently, AllRegs offers 20 Policy and Procedure Manual Templates, with more titles in development. Current offerings focus on a variety of topics— including anti-predatory lending, mortgage underwriting, loan originator (LO) compensation, federal compliance, employee handbook policies and more.

Veros Releases New Sapphire Collateral Valuation Management Tool

availability of seven new Policy and Procedure Manual Templates, pre-written by industry experts. All Policy and Procedure Manuals are offered for a one-time purchase price per company. The templates are delivered in an MS Word document and can be personalized by the customer, using their company brand by performing a simple find and replace function, or customized to include their own internal policy and procedures. “Developing a policy and procedure manual is a necessary yet costly process, both in terms of time and resources,” said Dan Thoms, executive vice president for AllRegs. “Creating these detailed manuals can take the focus away from actually conducting your business. Our Policy and Procedure Manual Templates are a turnkey solution that keeps you focused on your business goals while still meeting important agency, regulatory or corporate policy requirements.” The latest Policy and Procedure Manual Templates available include: Advertising

Nationwide mortgage lender New Penn Financial LLC has announced the launch

heard on the street

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 Don R. Baskin has been named area manager for the Tennessee region for Churchill Mortgage.  Crescent Mortgage Company has announced the promotion of Kelly Byers to the position of chief operating officer and chief financial officer.

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


Veros Real E s t a t e Solutions has launched Sapphire, a Web-based ordering and review platform that will initiate the next generation of collateral valuation management. Available in a series of packaged editions, each supported by a range of add-on options, Sapphire provides structured flexibility to manage valuation strategies from the beginning to the end of the loan lifecycle and enables clients to select a feature set tailored to their specific business model. The platform includes comprehensive order, quality control (QC), review, reporting, analysis and self-administration functions, as well as modules for Uniform Collateral Data Portal (UCDP) submission, preview and delivery, appraiser panel management, vendor management, channel optimization, and many more. Designed from the ground up with ease of use in mind, Sapphire offers modular functionality that clients can introduce as necessary to reflect evolving business demands and changing regulatory requirements. Recognizing that lenders are continually managing their business operations to accommodate new government regulations and requirements, Veros created Sapphire to help these organizations stay organized, transparent and compliant. “Sapphire was created with three goals in mind,” said Adrian Newby, chief technology officer for Veros. “First, we wanted the most intuitive user-experience available in the industry. For a system to make a meaningful contribution to organizational productivity, the learning curve needs to be shallow. Second, we wanted to provide flexibility by designing modules that allow clients to select capabilities specific to their needs without incurring costs for functionality they neither need nor want. Third, we wanted to bring some ground-breaking new capabilities to the marketplace. For example, powerful vendor management and pipeline optimization features and comprehensive, self-service reporting and analysis capabilities are included.”

Non-Agency Correspondent Program From New Penn Helps Serve Foreign AllRegs has Nationals, Investors and announced the Other Borrowers

AllRegs Releases New Policy and Procedure Manual Templates

of its correspondent business channel that will buy non-agency loans from approved clients. Approved correspondents can offer New Penn’s non-agency portfolio loan products to their customers. The loans’ expanded guidelines enable more borrowers to qualify for financing—for example, those seeking jumbo loans or second homebuyers. These loans provide more flexibility in loan qualification, loan amounts and other criteria, and include specialized programs for real estate investors and foreign nationals. “We’re pleased to offer approved clients the opportunity to serve more customers by offering our unique portfolio programs,” said Jerry Schiano, president and chief executive officer of New Penn Financial LLC. New Penn recently hired Karey Geddes as VP of sales for the newly formed Correspondent Division. Geddes has more than 20 years of experience in correspondent lending, and has served as senior vice president at BANC of Manhattan Capital, a partner at The Winter Group and VP at Credit Suisse

new to market

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First Boston prior to joining New Penn. “There are limited options today for correspondent lenders to originate high quality loans that do not fit agency standards,” said Bob Wexler, head of New Penn’s Correspondent Division. “New Penn’s proprietary loan programs fill a major gap in today’s market and the Correspondent channel helps us reach more of these borrowers.”

Interthinx’s ValueGUARD Upgrade to Feature Increased Transparency and Interactive Google Mapping and Launches QC Offering Interthinx has announced the release of major enhancements to its risk solution, ValueGUARD, strengthening the platform with data fortification, improved visibility, and an elevated user experience offering interior and exterior MLS photos of neighborhood comparable sales, listings and distressed property exhibits, as well as interactive Google mapping with satellite images and the ability to select comparables from neighborhood sales and listings. Using analytics along with proprietary, public and MLS data (including broker remarks) and imaging, ValueGUARD assists

users in increasing their risk detection proficiency, while offering product transparency. Problematic issues surrounding property value and marketability can be easily identified, prioritized and ultimately mitigated. “The market has enthusiastically embraced our ValueGUARD offering as a primary tool in its mission to increase the integrity and quality of collateral as surety for a loan. However, Interthinx is constantly working to address the market’s ongoing needs, enhancing and adjusting our solutions to the pertinent issues of the day,” said Mark Chapin, chief valuation officer at Interthinx. “A fierce commitment to research and development, backed by our stability and the support of our parent company, enables continual product innovation. We believe the current enhancements to ValueGUARD are spot-on and reflect our users’ need for accuracy and efficiency in their processes.” Interthinx has also announced the launch of its Quality Control (QC) Review Services, combining automated technologies with deep, loan-level audit expertise. The Interthinx approach to QC file reviews is designed to ensure compliance and mitigate risk for lenders and investors by using only certified professionals. The staff for Interthinx QC Review services includes: Certified fraud examiners, certified mort-



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Lending Career, LLC

Colette Colet tte Berrebi,, CMPS cberrebi cberre ebi@LendingCare 703.957.4139 g m ffor application li i


gage bankers, compliance lawyers and certified appraisers. “A quality control system of the highest caliber must be made available to the ailing mortgage markets,” said Kevin Coop, president of Interthinx. “Business-as-usual in regard to QC file review will not suffice. Issues creating tremendous anxiety for lenders include lack of compliance expertise, underperforming QC, risk of repurchase, and resource constraints. Clients who leverage Interthinx QC Review Services can alleviate administrative burdens while experiencing efficient and cost-effective outsourcing of scalable and customizable staffing resources. Capacity is ensured without sacrificing control or quality.”

ClosingCorp Launches Compliance Upgrade for GFE Data

ClosingCorp has announced the launch of its SmartGFE Service 2.0, a one-click, online solution giving mortgage lenders fast access to Real Estate Settlement Procedures Act (RESPA)-compliant Good Faith Estimate (GFE) data. ClosingCorp launched its original SmartGFE Service in 2010 to deliver live rates for local and national real estate closing services, as well as transfer taxes and recording fees, enabling lenders and brokers to create instant, accurate GFEs. Based on market demand for greater efficiency and precision, ClosingCorp developed the SmartGFE Service 2.0 to eliminate the need for loan officers to make decisions and manually input information already existing in a loan file. The 2.0 solution requires virtually no user interaction and instantaneously generates real-time, geocoded rates for GFE Blocks 3-8 from thousands of preferred providers throughout the U.S. at any time. “The regulatory environment, as well as competition for mortgage applicants, continues to require timely and accurate GFEs,” said Paul Mass, president of ClosingCorp. “We made significant enhancements to our SmartGFE Service and know our 2.0 release will dramatically increase the productivity of mortgage lenders while significantly reducing the amount of tolerance violations being reimbursed to borrowers given our Compliance Guarantee. The SmartGFE Service 2.0 provides custom configuration options to lenders at any level—corporate, branch or individual, enabling them to improve work flow efficiency and increase GFE data quality, all while accessing their own unique preferred provider’s data.“ The SmartGFE Service 2.0 is an integrated rules-based engine that allows lenders to configure their vendor preferences and customize settings once to have Compliance Guaranteed data delivered instantaneously into their GFE, itemized fee work sheet and service provider list. The SmartGFE Service 2.0 incorporates client-specific business rules to ensure appropriate fees are included in each quoted price. The service instantly notifies users if transfer tax or recording fees change, and it is backed by a compliance guarantee to eliminate tolerance viola-

tions. Lenders can override decisions on a per-transaction basis, allowing them to retain ultimate control over the entire process.

New eMASON Online Portal Unites All Involved in Mortgage Process eMASON Inc., developer of the Clarifire business process automation software for the financial servicers industry, has unveiled the Clarifire Community, enabling servicers to drive compliance with U.S. Department of the Treasury regulations, while delivering a solution to borrowers—and all others involved in mortgage servicing—that provides real-time access to borrower delinquency management processes. Clarifire Community is the portal through which borrowers, servicers, investors, title agents, realtors, regulators and other mortgage industry players can finally come together in one platform to synchronize activities relating to mortgage loans. With Clarifire Community, borrowers access their single point of contact with just one click. Banks and servicers often have over a dozen customer points of entry. With Clarifire Community, this is consolidated into one solution. A live chat feature, Clarifier Concierge, expedites the flow of information borrowers need. Clarifire automates the myriad business processes that touch the mortgage loan, each to servicer specifications, while providing an action or contact trail that is both accountable and auditable. The various workflows and user interactions involved in delinquency management now happen in one place, in a secure, easy to use, intuitive platform. “Clarifire Community lets servicers deal accurately and efficiently with the volume of work they see today and are likely to continue to see in the future,” said Jane Mason, founder and chief executive officer of eMASON. “The technology also gives borrowers a voice by letting them be informed participants in the process, which is what our regulators want to see. Technology is the heart of the solution.” In addition to its auditable single point of contact features, Clarifire Community generates documents, such as borrower final workout agreements, and delivers them through a secure Internet connection. Messages are delivered instantly to borrowers, telling them that the documents are ready in the communication method of their choice, e-mail or text message.

NexBank Reaches Out to Non-Conforming Market With New Product Offering NexBank has announced the launch of the Mortgage Connect Program, a suite of traditional, nonconforming mortgage products to sup-

port loans from $250,000 to $2 millionplus. The Mortgage Connect program features common-sense underwriting and is funded directly from NexBank’s balance sheet. According to Jed Meaux, vice president and head of NexBank’s Mortgage Division, the success of the bank’s recent Jumbo Connect program led management to create Mortgage Connect. “Our Jumbo Connect mortgage program specialized in non-conforming loans between $417,000 and the $2 million-plus range,” Meaux said. “It proved that there’s a strong need in the current market for traditional, non-conforming lending products with common-sense underwriting and fast turn times.” NexBank Chief Executive Officer John Holt said that by satisfying continued demand for traditional non-conforming solutions in the North Texas market, the Mortgage Connect program plays a strategic role in the bank’s growth and expansion plans. “As the Texas housing market continues to weather volatile economic times, we want NexBank to be a key resource for mortgage brokers looking for common-sense solutions at competitive rates,” said Holt.

DocMagic Announces the Availability of Its Free eSign Technology

Moody’s Analytics to Begin Offering the LPS Home Price Index

MortgageFlex Releases Next Generation LOS

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



MortgageFlex Systems Inc. has announced the launch of the newest generation of LoanQuest, the company’s flagship enterprise loan origination system (LOS). The origination platform

• Multiple National Lenders • 580 FICO FHA • Local Underwriting • VA-USDA-203k-Reverse • Onsite Migration Assistance


L e n d e r Processing Services Inc. (LPS) has announced that Moody’s Analytics will begin offering LPS’ Home Price Index (HPI), which shows historical price trends for residential properties in the U.S. Moody’s Analytics will offer the LPS HPI through its data delivery platform, DataBuffet, to clients who depend on or are exposed to housing markets, such as lenders, commercial banks, residential mortgage-backed security (RMBS) market participants, insurance firms and government institutions. “We are excited to work with Moody’s Analytics to bring a new and progressive product to capital markets professionals and investors who need it, especially in today’s volatile market,” said Kyle Lundstedt, managing director of LPS Applied Analytics. “Moody’s Analytics is known and respected for providing trusted guidance, and LPS is confident our home price index can add value with a solution that brings increased accuracy, coverage and timely information to the industry.” LPS’ data provides comprehensive coverage for approximately 75 percent of U.S. properties, and the LPS HPI provides prices for 98 percent of these at the ZIP code level. There are no gaps in historical data for this broad geographic coverage. The LPS HPI collects prices for more than 13,500 ZIP codes nationwide, including many in non-disclosure states. Within each ZIP code, the LPS HPI explicitly provides five price levels to show the varied price histories of entry-level homes, high-end homes and homes priced in the middle of the market. The LPS HPI tracks real estateowned (REO) discounts down to the ZIP code level. These are used in the HPI analysis to correct for distortions that otherwise occur when REO sales are included in price-data analyses. More importantly, the LPS HPI reports these discounts to support better estimates of sales prices on REO properties. The LPS HPI can also help market participants determine the impact REO sales have on individual markets, allowing non-distressed and distressed property values to be estimated. 

DocMagic Inc. has announced that it is making its eSign platform available to any user at no cost. DocMagic’s eSign solution gives users the ability to capture electronic signatures for any document saved in a .PDF file format. It digitally seals those documents to prevent fraud, provides access and audit trail capabilities, document versioning, and e-mail notifications. The eSign Solution works by leveraging DocMagic’s proprietary ClickSign technology, which has traditionally been used by borrowers to electronically execute agreements, disclosures and notices provided in conjunction with a mortgage transaction. DocMagic has taken this technology to a new level by enabling open access to this innovative system—for free. “We developed eSign to be used for any document purely as goodwill for the industry, and we did it for free to encourage greater adoption of electronic signatures,” said Dominic Iannitti, president and chief executive officer of DocMagic. “I strongly believe that our offering will revolutionize the way documents are signed by creating a domino effect among companies using it. We are laying the foundation for other software vendors to follow suit and our aim is to reduce the need to rely on paper and help organizations go green.” Setup and use of the platform is quick, easy and completely free to anyone interested in using it. An application programming interface (API) is available that provides a collection of XML-based Web services that enables

seamless integration with any platform. As a result, data can easily be passed from eSign to various back-office systems.

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one way mortgage servicers and housing counselors can find help for struggling homeowners and for individuals transitioning out of their homes.” Counselors and servicers who subscribe to MortgageKeeper’s database provide struggling homeowners with a list of exhaustively researched, bestin-class non-profit and government agencies in seconds. Often the agencies are located just a few miles from the homeowner. “Homeowners in the South are facing high electric bills from the summer heat wave, and some families up North are still paying off bills from last winter,” said Gorey. “Their heating, cooling, and water costs are skyrocketing, and show no signs of dropping.” MortgageKeeper Referral Services assists more than 2,000 families find answers and assistance every day. Subscribers include Saxon Mortgage Services, Ocwen Loan Servicing, and the Homeownership Preservation Foundation’s 888.995.HOPE hotline. MortgageKeeper connects individuals in financial distress to reputable community services. Borrowers with access to outside resources have additional opportunities to cure default, benefiting the homeowner, servicers, and investors.

Recording Fees and Transfer Taxes Named Top Hurdle on GFE and HUD-1 Ernst Publishing Company has reported that a survey the firm conducted shows that 80 percent of respondents considered recording fees and transfer taxes to be the top challenge that the Good Faith Estimate (GFE) and HUD-1 present to them. The Ernst survey was e-mailed to more than 8,600 clients of the firm, of which almost six percent responded. “That such a large majority of respondents considered recording fees

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.




and transfer taxes to represent their most difficult problem is surprising,” said Gregory E. Teal, president and chief executive of Ernst. “Clearly, from a business standpoint, there is much riding on populating the GFE in as accurate a fashion as possible. The failure to do so can result in expensive consequences, so understandably there is anxiety over that effort.” To be sure, technology plays a key role in producing these fees and helping to ensure their accuracy. While lenders have invested in the technology, understanding the complexity of the fees and the due diligence necessary to maintain the systems requires tremendous focus. “Automation can make handling these fees easier, if it is provided by a provider who builds in the idiosyncrasies needed to reflect these fees accurately and updates them continually,” said Teal. “Retaining a third-party that sources its own data and delivers innovative solutions will ensure accuracy, save time, and cut costs.” Thirty-nine percent of respondents reported that costs decreased as a result of automating their processes. The results of this survey are similar to one Ernst completed about six months ago that also showed that handling recording fees and transfer taxes was the number one challenge for clients.

e-mail: visit:

new to market

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allows lenders to differentiate themselves from the competition by providing a lending solution that meets their unique needs while still being affordable and easy to maintain. The LOS provides extensive user configuration flexibility of the core system and a comprehensive, easy to use tool set for additional system tailoring. The technology platform puts lenders in control of their system functionality, not the vendor. Lenders can build to their strengths while enhancing staff performance, increasing capacity and improving quality and customer service. During the past three years, MortgageFlex strategically entered into an extensive research and development mode to rewrite its LOS from the ground up including a redesign of the database schema. LoanQuest retains all the functionality developed over the past 30 years while adding significant enhancements that take advantage of the latest technology. LoanQuest has been completely re-engineered utilizing Microsoft’s latest version of .NET architecture including several technologies not available in earlier versions of .NET.

LoanSifter Launches New Real Time Mortgage Data Index LoanSifter Inc. has announced the launch the LoanSifter Available Mortgage Rate Index (AMRI), a real-time mortgage rate index that provides a realistic idea of what borrowers typically pay for a loan. The LoanSifter AMRI is derived from actual daily mortgage rate searches and can be found online at The LoanSifter AMRI can be used by mortgage lenders, journalists, borrowers and other parties to gain insight into the current costs of getting a home loan, the current pricing environment, and the overall climate for mortgage rates, as well as to identify trends in the mortgage market. Developed after examining traditional indices of mortgage rates and discovering flaws in their approach and resulting information, the LoanSifter AMRI leverages the LoanSifter database through the daily mining of real-time rate searches to create a set of residential loan rate data charts on what rates are offered in the marketplace. “Current mortgage rate indices are useful, but they do not provide an accurate reflection of what is happening in the market in real time,” said LoanSifter President Bruce Backer. “In addition, other market tools ignore the variation that exists among borrowers in their willingness to pay points or closing costs, as well as the differences in characteristics of loans and borrowers. The LoanSifter AMRI provides all this and more, giving the mortgage industry a much more complete view of the realities of the market as they happen. Meanwhile, consumers get a closer view into the costs of currently available loans.”

Aklero Amps Up QC With New PreQx Offering Aklero Risk Analytics, a provider of automated data and document validity assurance for the mortgage industry, has announced the launch of PreQx designed to perform an automated quality control (QC) check once the file has reached a clear to close status. During this final stage, PreQx performs an automated QC audit using Aklero’s document and data validity platform, Q-Close. The technology automates the vast majority of the manual audit tasks contained in a pre-closing checklist. Moreover, it automates the review and scrutinizes data and original documents for issues that include the borrower’s income, property valuation and the latest credit report. “Many lenders recognize that repurchase risk is prevalent in today’s market and that, early in the origination process and prior to the closing, lenders require more certainty that their loans meet the investor’s eligibility guidelines,” said Brian K. Fitzpatrick, CEO at Aklero. “Traditional quality control solutions do not adequately address the timeliness and cost efficiency of preclosing audits. In a pre-closing audit, time is of the essence and the completeness of the audit is paramount. PreQx is the industry’s first automated, document based pre-closing audit solution that solves the time and cost issue while providing our clients with the most effective quality control safety net in the mortgage industry.” PreQx can be combined with Aklero’s audit services or lenders can use their internal audit teams to review results and complete the audit. In both cases, PreQx removes the majority of manual audit tasks associated with a pre-closing audit and focuses the auditor’s time and attention on the total risk picture of the loan. This enables users to have a more granular review while significantly increasing the effectiveness and productivity of audit resources. Additionally, PreQx focuses on data accuracy by evaluating the data in the documents to the data in the loan origination system (LOS).

Acris Launches Consulting Service to Develop Cloud-Based Mortgage Ops

Acris Technology, the software development company behind Mortgage VCO, a full suite of cloud-based software applications and business support resources for mortgage bankers and lenders, has continued on page 48


About the company Acris Technology is an ISP provider of cloud-based mortgage technology.

(888) 934-7740 • Mortgage industry resources, training and business intelligence. (800) 848-4904 • The most used LOS provider offering affordable and compliant solutions. (800) 362-2599 • We specialize in mortgage originator due diligence and surveillance. (714) 489-8859 •


Credit Plus is a credit reporting provider to the mortgage industry. (800) 258-3488 • Founded in 1990, serving the mortgage lending community nationwide.

Compliant closing and initial mortgage document preparation services. (800) 554-1872 •

(800) 333-4510 • mortgageflex provides loan origination and servicing software. (800) 326-3539 •

(615) 591-2528 •

We provide QC services nationwide. Our ability to provide the examinations and compliance verification is supported by extensive experience in mortgage lending.

(800) 778-4920 •


StreetLinks provides a broad and innovative suite of lending solutions.


Interthinx is a leading national provider of risk mitigation solutions. 

(800) 445-4922 •

Technology Supports the People Who Drive Our Business By Eric Wiley nyone who has been in this business for any period of time has heard the rumor. A fancy ATM, and more recently, the Internet will be replacing loan originators (LOs) which will reduce lender costs, save consumer time, and generally make residential mortgage brokers and our professional counterparts a thing of the past. All of this would happen because credit would be able to be accessed immediately, assets electronically verified, homes analyzed for value via database comparisons, and incomes validated by employers through a central repository. This rumored obsolescence has everything to do with technology’s perceived role in our business. Is technology friend or foe? Is it a necessary evil? No, on both counts. Is it something to be embraced by management? Absolutely. Does it or should it, replace the human element? Not at all. The fact is, technology serves to increase our individual value to an organization which makes people less of a professional commodity than ever before … and that is good for everyone. The mortgage business has always been about people serving people. What has changed is how technology enables us to serve those people. If we are honest in our assessments, most of us love the practical side of technology, but need to be better at managing the efficiency of its use. Cell phones are now small computers that are always with us. Laptops have their own data services and can be operational all the time. Our offices are no longer the sole location for getting work done and then, at the end of the day, leaving work at work. Thanks to technology, we are more efficient, accessible and far better empowered to serve people. Managing technology is paramount to your own mental health, as well as the long-term sustainability of your career, and ultimately, the financial health of your organization. You need to run technology, not allow technology to run you which is becoming more and more of an issue for each of us. We all have some difficult times in this





respect. We are becoming increasingly busier, lots of e-mails are hitting our inbox, our Facebook Page needs constant updating, and it builds from there. To help in this management process, here are some helpful hints we practice at Pacific Residential Mortgage LLC (PRM) that have been garnered through the management of LOs of all different personality profiles and productivity levels.  Electronic calendars enable all of us to schedule our week in advance, and that should be done by the prior Friday. This insures that your most important business (and personal) commitments are integrated into your calendar and thanks to technology, you will be prompted as scheduled times approach. Think of this as building a short-term business plan that can be modified as necessary.  Prioritize activities that are enabled by technology. While a loan application may trump a calendar-scheduled activity, it is vital that “low-hanging fruit” supported by technology (automated marketing messages to clients, status reports on loans, etc.) are being cultivated with regularity.  E-mail technology is a primary communication tool that facilitates the business process, while often times, slowing it down as well. Proper management of your e-mail calls for figuring out which messages are hot and which can wait for a few hours and then to respond accordingly. Everyone’s priority is not your priority and your referral partners and clients are likely handling their e-mail technology with this mindset.  Loan status reports, preferably ones that are automated to go out at certain checkpoints, are what we use at PRM to maintain transaction flow and supplemental contact. Some LOs feel they must infuse

their own personality taught me that without and/or personal touchlinking company affiliaes to their loan status tion to personal marketreports. Our experiing, you are not capitalence shows that such izing on the significant personalization serves market momentum no useful purpose and being established by the in fact, Realtors and very organization you clients love the simare part of, and results ple, automated status will reflect that lost reports we send them. opportunity. Similar to The reason? These e-mail, it is important to reports happen elecmanage time spent online “The mortgage tronically, without fail, engaged with this media. business has always on every transaction as We have seen many indibeen about people checkpoints are reached. viduals invest way too serving people. The LO is misallocating much time in social What has changed is valuable time by trying media to the point of how technology to personalize each diminishing financial enables us to serve one of these messages. return. Remember: Social those people.” Rule of thumb in manmedia, while a great aging this technology: technology for our indusDeal personally with exceptions, not try, won’t get you many immediate the rule. deals. It is, however, a great way to be get found in online searches and  Database marketing technology has a solid way to validate yourself to a enabled our industry to reach out referral who is checking out both with frequency and efficiency you and your company. unlike ever before. My advice: Do the least, get the most. Just like The mortgage business will continloan status updates, don’t try to be ue to be about people serving people, overly personal. These are simply and technology will enable us to be electronic or print media that have better at it. How you manage your your name, contact information, personal use of technology in doing and most likely your photo—we your job will have an impact on how view database marketing as one efficiently and quickly you grow your more means of getting out your business. Ironically, the best way to business card to sustain name and characterize use of technology is with company awareness. The key to a not-so-technical piece of advice: successful use of this technology is Keep it simple. Doing so will yield posmaking sure the database is up-to- itive results on many fronts. If what date and includes referral sources you’re doing with technology is too plus current and past clients. complicated, costs too much money, or takes too much time to utilize, then  Social media is a relatively new tech- dump it. Remember, all of us in this nology that is an exciting and effec- industry get paid when clients are tive tool for communicating to the found and a loan is closed for them. masses and targeted groups. PRM Our success will never be measured by has embraced it’s use for many rea- the number of e-mails we respond to, sons, two of which are its low cost or the tweets we read or send in a day. and the ease at which it can be kept Our success will come from the ways current. As part of our application of we engage technology to support the this technology, we support our LOs people who drive our business. with in-house marketing resources so they can leverage the company’s Eric Wiley is chief operating officer and ongoing social media outreach on a co-founder of Pacific Residential personalized basis. Mortgage LLC. He has served on the board of the Oregon Association of  Dovetailing your company’s generic Mortgage Professionals (OAMP) and is an social media presence with your active member of the Oregon Mortgage own personal social media presence Lenders Association (OMLA). He may be is an effective application of this reached by phone at (503) 905-4902 or etechnology. My experience has mail

Moving Through the Short Sale Process Using Technology By Laura Hadley



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With technology, however, short sales can be completed in as little as 60 days, not 12-plus months. Technology establishes visibility, speed and efficient processing, thus dramatically cutting down on the length of time it takes to complete a short sale. Web-based short sale applications are commercially available that automate short sale workflows and streamlines communications. Typically, these types of solutions encompass a centralized Web portal that the buyer, seller and real estate agents can log into, view the status of the loan and upload documents in a standardized format. Servicers then use the application internally to effectively manage communications between all parties, monitor tasks and reduce the sheer volume of phone calls, voicemails, e-mails and faxes. Servicers no longer have to contend with lost or misplaced information, and stacks of paper and files. Short sale requests can be kept as separate and distinct, offer negotiations are managed and centralized, and borrowers and agents are continually involved and updated on the status of the process. Servicers can easily receive and complete short sale packages directly from the borrower or its listing agent, which includes complete financials, property valuation data, lien verification and all supporting qualification documentation that is needed. In addition, these applications integrate directly with leading mortgage servicing platforms and thirdparty partners, which improves data integrity, workflow and response times. So what does all of that boil down to? The need to eliminate terrible communication, tremendous inefficiencies, a lack of visibility, and an overall disjointed process that’s incredibly slow. With the use of the right technology, you can dramatically speed up time frames to successfully get short sales approved in as little as two months. You should note that most servicers use antiquated back-office technology that is ill-equipped to handle heavy short sale volumes. With a flurry of increasing short sale applications, having old technology, or worse yet, no technology, is a huge problem. There are mortgage technologies that are commercially available on the market today that bring much needed transparency, ease 

he mortgage meltdown, depreciating home values and a dragging economic landscape have foreclosures at an all-time high. However, short sales are increasingly emerging as a viable, preferred alternative to foreclosures. But, many short sales can take more than a year to complete, and even when a suitable buyer and price are agreed upon, deals can still fall out and the foreclosure process ensues anyway. The short sale process involves a number of different parties and moving parts that must all work together concurrently to successfully complete a deal. More than anything, visibility is critical to preventing confusion, lost information, missed deadlines, neglected tasks, etc. Today, utilization technology is key to providing some much-needed visibility into a notoriously convoluted process that is often handled manually. Unfortunately, many lenders and servicers have not implemented technology to adequately handle an influx of short sale applications. The parties involved to complete deals include servicers, lenders, seller, buyer and real estate agents. It is crucial that they have the transparency to all be on the same page, share information, and complete tasks in a timely manner. By and large, completing a manual short sale involves countless numbers of e-mails, phone calls, voicemails, facsimile transmissions and document imaging uploads that are constantly sent back and forth to various parties. To manage such a complicated process full of minutia, using these types of inefficient mediums is a recipe for disaster. E-mails are missed, voicemails are not picked up, documentation is commonly misplaced, and overall communication becomes hampered from the start. All too often, these types of encumbrances create a prolonged “waiting game” with little visibility into status, which quickly causes buyers to become frustrated and pull out of the deal. Then, a new suitable buyer must be found and the process starts all over again. By this time, an NOD (Notice of Default) has probably been filed, which inserts a new party into the equation—the foreclosure attorney. The servicer must then begin timely, closely monitored communications with them or the house can potentially be foreclosed upon with little notice.

of communication and data Technology can cut a 12exchange to the detail-intenmonth-plus process down to sive short sale process. two or less months. The Lenders could enjoy the value of technology is clearbenefits that various mortcut … it just needs to be gage technology providers implemented. offer such as short sale processing platforms, business Laura Hadley is vice presirule-driven workflows, data dent of product developcollection and imaging, ment for Quandis Inc., a document management, default management mortpriority queues, system-togage technology provider. system integrations, realShe is a 20-year veteran of “With the use of the time visibility, automated right technology, you the mortgage industry and approvals and more. has extensive experience in can dramatically The technology is there. speed up time frames default servicing and mortIt’s just that some lenders and gage technology. Throughout to successfully get servicers never implemented short sales approved her career, Hadley has held platforms, and are now chalexecutive-level positions at in as little as two lenged in handling an ongoUSRES, UBS, People’s Choice months.” ing influx of short sales very Home Loans, LPS and Option inefficiently. The bottom line is that the short One. She may be reached by phone at (949) sale process doesn’t need to be so broken. 382-1178 or e-mail

Is Mortgage Technology Really the Wave of the Future? Weighing the cost of human interaction in the age of technology By Tommy A. Duncan, CMT hile I cannot loan audits, there are some speak on using underwriting defects where technology to the underwriter did not analower your applications to lyze the data produced from close in a short amount of the technology used for time because I am not a fraud detection and loans user of such technology, I slipped through and were can speak on what I see as funded. A good example is a result of technology used the analysis of tax transcripts in this manner. It is a given and income and expenses that the cost of technology, reported to the IRS. Even the purchase of a software though tax transcripts are a license and the cost to set very valuable tool when val“I am convinced up that technology can idating income, the underthat technology hurt, especially as volumes writer must have the ability are at record lows in many significantly contributes to understand these compockets of the nation. There to closing loans faster, plex transcripts in order to but the humans are many factors even after make a sound credit deciprocessing the loan are sion. If they do not undersetup and license purchase that one must consider as the center of gravity of stand complex tax tranwell in adapting any new the loan approval and scripts, some loans will get the efficiency of the mortgage technology: through that should need bandwidth, cabling instal- technology being used.” more analysis or should be lations, routers, firewalls, denied. servers, multitask machines, and in some The automated valuation model (AVM) is cases, hosted data centers. And do not for- another technology-based tool that is someget the cost of operating systems and other times misused for some loan scenarios. software licenses services like backups. If Some underwriters pull an AVM to help something breaks or service is disrupted, them make a judgment on value of a propthen there are even more costs if you don’t erty, but the data is usually not current or have someone in the office to take care of accurate from the data source. The governit. The bottom line, the cost of technology ment-sponsored enterprises (GSEs) will not is getting increasingly expensive to support take an AVM except from their respective a broker or lending operation. Once the AVM source of a Home Affordable Refinance loan production starts flowing, then the Program (HARP) loan because of incorrect cost of the technology investment may pay data from some AVM sources. for itself, but as a company grows, its techIn some cases, the underwriter needs a nology must grow as well. stronger collateral risk tool rather than an I am convinced that technology signifi- AVM, such as Appraisal Defect Detection cantly contributes to closing loans faster, but and Prevention (ADDP). There are times the humans processing the loan are the cen- when an underwriter needs a collateral ter of gravity of the loan approval and the tool that provides risk measurements and efficiency of the technology being used. scores to assist underwriters if they are not There are too many people involved and familiar with a particular region. If they do touching the loan in a given period of time not have the collateral technology to supfrom the borrower, loan officer, processor, port them, the loan can be challenged for underwriter and the multiple revisits that a repurchase if the value is off or serious may result in the delay of the closing. The appraisal defect are in the appraisal. technology can only move as fast as the peoThe credit report is important and necple who are using the technology. essary, but quality control (QC) mortgage Fraud detection is another cost associat- audits often find where not all credit liaed with technology that is only as good as bilities are entered correctly into the autothe people using it. From some mortgage mated underwriting system or after the





loan is funded, an item show up that was not initially detected that should have been disclosed during the loan application. The problem is, the borrower did not disclose this, thus misrepresenting the credit liability did not synchronize with the depositories in a timely manner which is probably a function of a human to have it submitted. Even though the technology is excellent, there are still the asymmetrical or the human factor that caused the technology to not work as it was designed. Occupancy is very difficult to determine, and as far as I know, there is no real known technology that can verify if properties are occupied or going to be occupied by the borrower. Even though occupancy fraud is not as high as income fraud, asset fraud and appraisal fraud, it is very difficult to verify with technology and requires more manual efforts with a flare of creativity to validate.

Figure 1: FHA & Conventional Mortgage Fraud Detection

It is amazing that we are see mortgage loan misrepresentation or fraud approaching numbers last seen pre-2009 with the abundance of fraud detection and technology the industry has available today that was not available before 2009.

Figure 2: Purchase and Refinance Mortgage Misrepresentation or Fraud

As the data shows, the purchase market continues to exceed the number of misrepresentation or fraud before 2009 with an arsenal of pre-funding QC and

technology available with historically the lowest mortgage production volumes in years. The refinance market is steadily climbing, and the year 2011 still has a story to tell.

Figure 3: Non-Banks vs. Banks

As you can see from the data, the nonsupervised financial institutions are the largest producers of mortgage loans that contain misrepresentations or mortgage fraud. One would think that the same technology available at the banks is also available at the nonbanks. Again, I do not think it is the technology that is the issue. It is the end-users of this technology. The banks likely have more resources at hand, like a budget, staffers and heavy oversight to help promote stronger lending practices where non-banks lack these things. At this point, the real cost should be evaluated at what is the cost of loan quality or not having loan quality. Repurchase have placed a number of financial institution on the scratch and dent sale from the Federal Deposit Insurance Corporation (FDIC) and other have simply folded altogether. Personally, I am a believer of the old days of manual underwriting, and when you place the cost of manual underwriting and the cost of technology, I will take manual underwriting over technology for now because most all of the fraud found in the loan that produced this data came as the result of some type of automated underwriting system. Tommy A. Duncan, CMT, is president of Quality Mortgage Services LLC, a provider of mortgage quality assurance and mortgage compliance solutions. He was instrumental in developing the firm’s QA/QC software currently in use by mortgage bankers/lenders. Tommy may be reached by phone at (615) 591-2528, ext. 124 or e-mail You may also visit Quality Mortgage Services LLC on the Web at

Save Time, Money and be More Successful Utilizing Free Lender Technologies By Kristina Bennett urchasing high-end loan origination software (LOS), electronic signature programs or other important mortgage technology tools can become costly and quite involved for brokers to absorb. However, there are a number of wholesalers that offer broker-oriented technology tools for free. If you are an originator or a broker/owner, you’ll want to partner with lenders that offer you free tech-savvy programs and tools. It isn’t necessary to buy applications, pay for software licenses, incur service fees and other costs when you can lean on a lender’s technology applications to eliminate additional overhead and gain efficiencies that result in greater success. To maximize your success and efficiency, there are a number of things to consider before developing a relationship with a lender. Whether you’re an independent originator, or you own a broker business, you’ll find the below checklist valuable to assist you in navigating through the different bells and whistles that lenders provide. The following tools will ease your job as an originator, processor or broker owner:


E-sign or e-consent technology With more borrowers on the go and having limited time to actually sit down and complete an application, e-sign technology is becoming priceless in a fast-paced world. Some lenders may also allow borrowers to e-consent the Truth-in-Lending (TIL). This saves time and allows the originator to collect money for the appraisal right away.

There is no reason to waste time with lenders that require a package to be

Time is money … we all know that

Another benefit that can save you and your processor hours is an Automated Findings Help Desk. It can be nearly impossible to know what the coded errors on automated Desktop Underwriter (DU) findings mean. This could take hours to figure out just to get your approved findings. If a lender offers help interpreting DU findings, it means they have specialists who know exactly what each and every error is, and these errors can be fixed within minutes. This is a huge benefit if your lender provides free DU assistance.

Length of time in the wholesale business There are wholesale lenders in operation today that have either closed their doors and started new companies, or existing retail lenders that have re-started wholesale channels. As a broker, when you’re

In summation, there are important technologybased features, benefits, services and more that will help you be more successful and enjoy a competitive advantage. If the lenders you are currently working with do not offer you these types of technological tools, then it’s time to research lenders that do. In a cut-throat lending landscape where is it is paramount to close purchases and refinances as quickly as possible, it’s imperative to be aligned with lenders that offer these type of broker-facing technologies for free. Kristina Bennett is the business manager for United Wholesale Mortgage (UWM). Kristina is responsible for representing UWM at mortgage and real estate seminars throughout the country, along with rolling out new lending products and programs for UWM’s broker network. She may be reached by email at or visit

Online Case Number accessibly Working with a lender that provides an online Federal Housing Administration (FHA) Case Number system which ensures you can speak with a live person to order your FHA Case Number within 48 hours is crucial. As we all know, the originator that pulls the case number first wins. As a broker, once you have a Case Number ordered, it means you have a commitment from the borrower and control to order the appraisal and move forward with the loan.

Is it easy to order the AMC appraisal with your current lender? It should be as easy to log into your pipeline via the lender’s Web site. Typically, a link resides within the broker’s

June Ju ne 4-6, 2012




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Accessibility to scan, upload and track your loan package and conditions online

Some lenders allow their brokers to log in to a secure Web portal and take the entire application online. This is a huge benefit, not only due to the expense of most origination software systems, but because it is not a thick-client application which must be downloaded and installed on a broker’s desktop. Instead, the 1003 is taken via a secure Web site, thus enabling brokers to take a borrower’s application from any location, on any computer, laptop, smart phone, iPad or tablet that has Internet access. The more tools you can utilize from a lender the better. You need to be focused on selling and working with your borrowers, not spending time and money on tools that your lender could be offering you. Make sure you align with lenders that complement your abilities with technology. Brokers should also look for additional lender offerings available via their Web sites that considerably cut down your application time to clear and close. Some key functions to consider include:


This is essential to allow a broker to input minimal information from the borrower to determine specific products they qualify for. As a broker, this tool reveals product options and the associated payments for fixed-rate, adjustable-rate, government or conventional loans, with or without monthly mortgage insurance to cover with your borrower. These tools can also show you what your compensation is with the lender.

Robust LOS

“The more tools you can utilize from a lender the better. You need to be focused on selling and working with your borrowers, not spending time and money on tools that your lender could be offering you.”

evaluating lenders to partner with, it’s important to take into account the length of time they have been in the wholesale business. Some retail and startup lenders that have recently jumped back into the wholesale arena are light in their technology offerings and processes. From a business and technology perspective, it behooves you to thoroughly understand the type and depth of broker-facing technology they offer. 

Product qualifying tools

mailed, or even worse, a package to be faxed. If lenders give you the ability to electronically upload a package, it becomes much easier to see exactly what is attached and track your documents. It also alleviates playing the blame game of if or when a package or conditions were actually submitted.

pipeline that swiftly takes them straight to the appraisal management company’s (AMC’s) site to order an appraisal. Serviceoriented lenders make it as convenient as possible to order appraisals and secure a commitment with their AMC for standard four to seven day turn times. Another feature that saves you and your processors time is an AMC that e-mails you and your lender the appraisal the minute it is complete, thus avoiding lag time.

Accounting and Audit

Branch Manager

Branch Manager

Flagship Mortgage Corporation ........1-800-492-5239 Multi-State mortgage bank has management opportunities available for experienced, successful & ethical professionals. Click/Email:

Mark Wilson Certified Public Accountants 9455 Ridgehaven Ct, Suite 101 • San Diego, CA 92123 619-649-0712 A full service CPA firm specializing in the needs of the mortgage industry. Providing monthly bookkeeping services,FHA and financial statement audits , corporate tax preparation and contract CFO services. Contact us today to learn more.

iServe Residential Lending 415-298-2500 Freedom Mortgage Corporation 800.220.9498

iServe offers a complete product mix - aggressively priced, with hassle-free service & turntimes. Branching & Loan Officer opportunities available nationwide. For a change, focus on production, quick closes & a good night's sleep!

Freedom Mortgage Corporation, The BEST Branch Solution, Period.

Appraisal Management Company

HVCC Appraisal Ordering National Appraisal Management Center Please call 866-396-6260


We help you Meet & Exceed UMDP enforced by the GSE’s We Improve your evaluation of collateral with “REALviewTM” Appraisals submitted in a MISMO/XML or PDF format. We’ve raised the bar for Appraisal Management Services!

Guaranteed Home Mortgage Company, Inc. 108 Corporate Park Drive, Ste 301 White Plains, NY 10604 888-329-GHMC • Find out what Guaranteed can do for you. Branch Program for Professionals. It's what we do.

Mortgage Brokers Network Corp, Inc. 1-888-589-7048 The Mortgage Industry’s Matchmaker http://mortgagebrokersnetwork • Mortgage Branch Employment Opportunities • We work with some of the top mortgage branch companies in the industry! • With hundreds of branch employment opportunities out there, making a choice on who to sign up with is not an easy task! We are here to help! • Hiring Licensed Mortgage Originators for branch management and loan origination. • Bank and Broker status to choose from, multi-State lending and more... Visit our site or call us today to speak to one of our representatives.

Appraisal Management Company

Hometown Lenders (888) 606-8066




United Northern Mortgage Bankers......888-600-8808 Limited room available for established Team Leaders and Licensed Mortgage Originators. Become part of an established 30-year Mortgage Banker with a proven track record and success.

NO File Fee or Monthly Fees

StreetLinks Lender Solutions (800) 778-4920 StreetLinks Lender Solutions provides an innovative and comprehensive suite of valuation services and lending technology solutions used by lenders and appraisers nationwide to improve everyday business operations.

• Get a BPS payback from our volume incentive that your loan officers can’t see • You have the ability to control your loan officers pricing • Create, Customize and Optimize your branch’s compensation plan • Recruiting Support – Our network of recruiters place producers in your branch! • Full Eagle Lender and we’re currently looking for high-quality Producers in TX, GA, AL, TN, FL, MS, and SC

Branch Recruitment ....................201-489-0256 Currently working with various bankers & federally chartered banks. Seeking established, new branches & Loan Officers Nationally. We are a top recruiting firm handling all types of mtg positions.

StreetLinks industry-leading products include LenderPlus™ full-service appraisal management, LenderX™ lender-executed appraisal management software, BPOs, SCORe™ appraisal validation reviews and more. 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

Inlanta Mortgage W229 N1433 Westwood Drive, Suite 103 Waukesha, WI 53186 • 262-513-9853

Church Financing

Established in 1993 and headquartered in Waukesha, Wisconsin, Inlanta Mortgage is a multi-state mortgage banking company committed to delivering superior service to our branch clients. For more information, call 262-513-9853 or visit

Does Advertising in the Resource Registry Work? It just did!

Call 888-409-9770 ext. 4 to Register your company.

CONCORD CHURCH FINANCE NATIONWIDE FINANCING FOR CHURCHES Pre-qualify Online @ 800-926-0399 • Fax: 858-756-8108 • Church Purchase & Construction • $100,000 to $2,500,00 • Church Refinance & Cash Out • Churches all 50 states • 75% of Appraised Value • 20 Yr. Fixed Rate

Contact Management/CRM

LoyaltyExpress 877.938.1175 LoyaltyExpress, the leading mortgage marketing company in the nation, delivers high-impact marketing that substantially increases production levels. Direct mail, e-mail, and intelligent alerts are combined to deliver unprecedented results. Learn more today.

Continuing Education

DocVelocity (877) 362-8356 DocVelocity is an end-to-end paperless solution designed to simplify the loan origination experience. Imagine having all your documents in the loan process as electronic files, all online, from pre-approval to closing. DocVelocity provides: Fast and easy loan delivery to any lender … Automatic doc sorting, naming and filing … Real-time online document sharing for anyone you choose … Friendly and intuitive user interface … No start-up fees, and free training and support. DocVelocity addresses important compliance issues while giving your office the competitive advantage of being paperless. It streamlines all aspects of the mortgage process and most important, it does so in one easy-touse and inexpensive package. DocVelocity is the flagship product of Paperless Office Solutions, Inc., a wholly owned subsidiary of Flagstar Bancorp. Visit to find out more.

Abacus Mortgage Training and Education PO Box 780 Summerfield, NC 27358 888-341-7767 • NMLS approved 20 hour Prelicensing Education NMLS approved Continuing Education Live Classroom Instruction, Web Delivery and Private Events The SAFE-Smart ExamCram, Powerfully Innovative Test Prep

MSS Learning Center (800) 963-1900 Email: Time is running out...are you ready?

Document Preparation •

646.210.2545 • 914.763.8008 “The Expo for Real Estate Professionals" For ongoing Networking Events throughout the year please visit

FHA Audit and Licensing

Bonnie Nachamie & Jonathan Pinard have assembled a team of experts to assist Mortgage Brokers, Mortgage Bankers, Federal and State Chartered Banks & Credit Unions with their mortgage compliance needs.


Mortgage Banking Systems - ProClose 1360 Beverly Rd. Ste 200, McLean, VA 22101 800-783-2283 · ProClose provides compliant closing documents and software for Residential Mortgage Lending. Created with closers in mind, we help make a lender’s staff more efficient and supported.

45 LenderCity Home Loans 888.880.2489

• The Ultimate Test Prep Kit and Test Prep Boot Camps – Cover everything to pass the S.A.F.E. Act Test — on your first try.

• Continuing Education - Exciting, NMLS approved courses that meet your Continuing Education needs and build your business.

NYC Real Estate Expo LLC Anthony Kazazis - Director

First National Compliance Solutions Inc. 1-800-400-4134

Pass the S.A.F.E. Act Test, meet your 20 hours of Pre-licensure, and complete the 8 hours of Continuing Education you need

• 20-hour Pre-licensure - Packed with everything to successfully complete your pre-licensure requirements.


Doc Management

Robertson | Anschutz 800-343-7160

• Growing with a recognized brand • Local and National marketing and advertising • Online search engine marketing • More aggressive lender pricing based on volume incentives • A proven system that generates more revenue than average broker shops • Ability to retain your license, existing corporation, and autonomy • Lead generation

Direct Mail

• Processing and closing services also available

Document Preparation (SaaS) Best Rate Referrals ............................................800-811-1402

Hard Money/Private Lending Docs on Demand 800-343-7160 Your Complete Mortgage Marketing Solution. Call Us Today! (800) 922-9860

Mortgage Loan Closing Document Preparation & Compliance Software Loan Documents and Compliance – Web-based/SaaS – Easy to Use Intuitive – Secure and Reliable – Integrates with Leading LOS Free Setup and Support – Extensive Compliance Audits

• Specializing in Official Snap Packs for Greater Open Rates • Envelope Mailers, Business Reply, Postcards and Much More • Targeted Mortgage Lists with Many Selects • Complete Design, Printing and Mailing Services

Errors and Omissions Insurance CB Malaga Insurance Services LLC ......877-245-5887 Insurance broker providing errors & omissions (E&O) insurance to mortgage brokers and bankers. All loan types. Available in 22 states.

We are doing traditional subprime lending, fix & flip lending and hard money lending.

Windvest Corporation ............................877-285-0777 Specializing in rehab loans for property investors in So. CA. Up to 60% ARV, 12.99% fixed rate, 3.5-5 points, 1 yr. term. Fast & professional service since '94! Visit!


Call 888-409-9770 ext 4, to register your company.

ACC Mortgage, Inc. 932 Hungerford Drive #6 • Rockville, MD 20850 240-314-0399 • 240-314-0336 fax


Mortgage marketing company with decades of combined experience providing quality leads, mailers, lists and dialer products. & 

Mortgage Loan Closing Document Preparation & Compliance Services Fulfillment Services Including Pre-Funding Review & Post-Closing Interfaces with Leading Loan Origination Software Systems Foreclosure – Loss Mitigation Services

LenderCity Home Loans is now offering individual franchises. This is perfect for the L.O. who has always wanted to open their own brokerage but didn't know how. Benefits include:

Income Verification Services Advanced Data (800) 537 - 0458 Advanced Data is a leading national provider of data services, streamlining income and employment verification with proprietary software. Clients can submit 4506-T directly through Encompass360. Also ask about our AVM and flood services!



SM • 877-390-4750 is the largest online directory for mortgage professionals and a favorite of consumers shopping for mortgage loans.

Comergence Compliance Monitoring, LLC 630 The City Drive South, Suite 205 • Orange, CA 92868 Office: 714-740-9000

Our network attract over one million visitors per month. Our paid lead program as well as our free lender directory will help you connect with targeted new consumer traffic from with high-intent consumers searching online for the right mortgage lender.

Comergence Compliance Monitoring is the mortgage industry’s only Complete broker desk management software and outsource solution for TPO management and monitoring. We can supplement lenders inhouse management and monitoring resources departments.

Loan Management Systems Income Verification Services Xetus ....................................................877-GO-XETUS Platinum Credit Services, Inc.................631-299-2084 Tax return vertification (4506 tax transcript done in less than 24 hours in most cases). Call Lorenzo Pugliano, President and CEO at 631-299-2084.

Loan Origination Systems 46

Retail Branch

XetusOne is a powerful, easy-to-use loan management system that streamlines loan processing. Our affordable SaaS applications are lenders #1 choice for origination, subordination & modification.


Polaris Home Funding Corp. 616-667-9000 #1 USDA RD lender in multiple states with strong FHA/VA/CONV product lines as well. Don't be held hostage by a captive branch arrangement. Bank it or broker it. Have a business name/identity you don't want to give up? We allow DBAs (subject to state rules).

AAA Refi Leads.....AAA Refi Leads.....AAA Refi Leads Learn how I went from failure to success by mailing cheap refi letters from home, closed 71 loans & made $248,954.62 last yr. I’ll show you exactly how I did it. Go to: www.Refi-Leads.NET

Calyx Software 800-362-2599



Calyx Software, the #1 provider of mortgage solutions is dedicated to offering reliable and affordable software that streamlines, integrates and optimizes the loan process. Find out how PointCentral can streamline your business and create compliant processes today.

Internet’s Leading Consumer Mortgage Marketplace Attracting over 8 million unique consumers every month • 561-630-1257

Mortgage Forms

Reach affluent and creditworthy consumers who are in-market and ready to transact. Bankrate is a consumer direct Web site, NOT a lead aggregator. Qualified leads for every sized budget, and pay only for performance. No set up fees! No contracts! No risk! • Reach self directed, highly qualified consumers that are actively searching for mortgage loans • Geo-targeting – reach the right consumers in the right markets • Our proprietary Advertiser Portal gives you complete control over your campaigns, budgets, and performance reports. • YOU determine your daily/weekly/monthly budget • Pay only for consumers who click on your listing • NO cancellation fees Try us risk-free! Call 561-630-1257 or visit for more details.

(800) LOANS-15 Are you a broker/owner or current branch manager looking to expand your business into Mortgage Banking with FHA capabilities? Then our PARTNER BRANCH ADVANTAGE© program is perfect for you. We are offering you all the benefits of partnering with an established lender while still enjoying your independence. US Mortgage Corporation is a nationwide FHA Direct Lender with a 16 year long reputation of excellence. Same Day Shipping (orders placed prior to 3pm et) 24/7 Secure e-Commerce Site Save 33-50% • • • •

HUD Settlement Cost Booklets CHARM Booklets Uniform Residential Loan Applications HUD Case Binders

YOUR SUCCESS IS OUR SUCCESS! For more information contact THOMAS R. SIRICO, Vice President of Business Development at (917) 923-1472 or email at We look forward to sharing our services with you!

Sign-on weekly at Loanbright 27902 Meadow Drive, Suite 375 Evergreen,CO 80439 866-391-2709 • Loanbright helps mortgage companies capture and close more business through its marketing and software tools. An INC. 500 awardee, Loanbright has helped thousands of companies since 1999 by providing them with well over 3 million qualified sales leads.



BankFinancial ..........................................800-894-6900 We have money to lend for apartments, $250M to $2MM, up to 75% LTV. We offer competitive rates, fees & terms. We’re committed to helping you and your clients close the deal. Call us.


Icon Residential Lenders (888) 247-4207

Flagstar Wholesale Lending (866) 945-9872 Flagstar Wholesale Lending, a division of Flagstar Bank, is one of the nation’s largest wholesale and correspondent mortgage lenders, providing the technology, products, service and support that independent mortgage brokers, correspondents, and bankers need in today’s mortgage arena. In the ever-changing environment of mortgage banking, Flagstar takes pride in accommodating the specific needs of each customer. At Flagstar, we understand that you need every available advantage to stay ahead of the competition. This is why we provide multiple technology options to meet your needs to register, lock, underwrite, close, fund and deliver your loans. Our wholesale website ( and the loan processing tool Loantrac provides our customers with the functionality that make it easier and faster to close loans, saving you time and money! Visit to learn more.

Icon Residential, a wholly owned subsidiary of Grand Bank N.A., is one of the nation’s leading Conforming, Jumbo, FHA and VA wholesale lenders. Our strength, success and longevity is derived from delivering customers service that exceeds our valued business partners expectations. With deep industry knowledge, financial stability and innovative technology we provide the solutions for our business partners to fund loans while avoiding risk. • • • • •

Direct Access to Underwriters Competitive Pricing Innovative Technology Paperless Solution Bank Funding

Terrace Mortgage 4010 W. Boyscout Blvd., Suite 550 Tampa, FL 33607 866-934-4631 • We offer competitive pricing and fast turn-times for FHA, VA, Conventional, and USDA programs without having a retail presence in the industry. We are a wholesale lender with 22 years of experience and believe in exceptional service.

Wholesale/Residential AMX/Land Home Financial ..................800-349-4172 AMX/Land Home Financial Services Wholesale Lending Division - Great Rates, Great Programs, Great Service. Offering financing options that work in today's market.

TMSfunding Wholesale Lending 326 W Main Street • Milford, Ct. 06460 888.371.2989 • WWW.TMSFUNDING.COM Your Partner in Success! • • • •

Paperless! Quick and Easy! Top Tier Account Executives Committed to Wholesale Operations that Earn Your Business

Now Wholesale Lending in:

• Arizona • California • Colorado

• Nevada • New Mexico • Oregon

• Texas • Utah • Washington

Veros Real Estate Solutions 2333 North Broadway, Suite 350 • Santa Ana, CA 92706 (866) 458-3767 • @verosres (Twitter) Veros Real Estate Solutions is a premier technology leader in the mortgage industry and proven leader in enterprise risk management and collateral valuation services. Veros combines the power of predictive technology and data analytics for advanced automated solutions.

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 now hiring Account Executives in AL, TN, KY, VA, & MD.

Big Enough to MATTER…Small Enough to CARE

to register your company. Wholesale Reverse Mortgages

NATIONWIDE Equities Nationwide Equities Corporation 201-529-1401 For Licensed Mortgage Brokers in NY, NJ, CT, PA and FL No HUD Approval Required – Live Help Desk Will Provide Training at Our Office or Yours 48 Hour Underwriting - Get Paid Within 48 Hours of Funding

Bookmark this! Access these listings online at


Contact Stu Ehrlich in our HR department at for further details.

Call 888-409-9770 ext. 4


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

The Resource Registry is a directory of lenders (wholesaler or retail that are recruiting), affiliated services and resources that is seen by more than 191,181 active Professionals.


88 Kearny Street, 3rd Floor San Francisco, CA 94108 Phone: (415) 632-5150 • Fax: (925) 226-1938

If your ad was here, you would be seen by 191,181 Mortgage Professionals looking for resources to help them in their business.

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 DECEMBER 2011 Sunday-Tuesday, December 3-5 2011 NAMB/WEST Loan Originator Conference MGM Grand 3799 South Las Vegas Boulevard Las Vegas For more information, call (303) 798-3664, ext. 15 or visit




FEBRUARY 2012 Sunday-Wednesday, February 5-8 2012 CREF/Multifamily Housing Convention & Expo Atlanta Marriott Marquis 265 Peachtree Center Avenue Atlanta For more information, call (800) 793-6222 or visit Tuesday-Friday, February 21-24 The Mortgage Bankers Association’s 2012 National Mortgage Servicing Conference & Expo Orlando World Center Marriott Orlando, Fla. For more information, call (800) 793-6222 or visit

Thursday, March 29 Maryland Association of Mortgage Professionals 2011 March Mortgage Madness Convention Martin’s Crosswinds 7400 Greenway Center Drive Greenbelt, Md. For information, call (410) 752-6262, or visit

APRIL 2012 Wednesday-Thursday, April 18-19 2012 National Policy Conference Hyatt Regency on Capitol Hill 400 New Jersey Avenue Northwest Washington, D.C. For more information, call (800) 793-6222 or visit Sunday-Wednesday, April 22-25 2012 National Technology in Mortgage Banking Conference & Expo Arizona Biltmore 2400 East Missouri Avenue Phoenix For more information, call (800) 793-6222 or visit

MARCH 2012 Sunday-Thursday, March 11-15 29th Annual Regional Conference of Mortgage Bankers Associations Trump Taj Mahal Casino Resort 1000 Boardwalk at Virginia Avenue Atlantic City, N.J. For more information, call (732) 596-1619 or visit

Sunday-Wednesday, April 22-25 2012 National Fraud Issues Conference Arizona Biltmore 2400 East Missouri Avenue Phoenix For more information, call (800) 793-6222 or visit

Wednesday, March 14 Florida Association of Mortgage Professionals Broward Chapter 2012 Annual Trade Show Broward County Convention Center 1950 Eisenhower Boulevard Ft. Lauderdale, Fla. For more information, call (850) 942-6411 or visit

MAY 2012 Sunday-Wednesday, May 6-9 2012 National Secondary Market Conference & Expo New York Marriott Marquis 1535 Broadway New York, N.Y. For more information, call (800) 793-6222 or visit

Friday-Wednesday, May 18-23 2012 Mortgage Bankers Association of Georgia Education Forum & Expo Sandestin Hilton Golf Resort & Spa 4000 South Sandestin Boulevard Destin, Fla. For more information, call (478) 743-8612 or visit

Sunday-Wednesday, May 20-23 2012 Legal Issues/Regulatory Compliance Conference La Quinta Resort & Club 49-499 Eisenhower Drive La Quinta, Calif. For more information, call (800) 793-6222 or visit

Sunday-Wednesday, May 20-23 2012 Commercial/Multifamily Servicing & Technology Conference Hilton Anatole 2201 North Stemmons Freeway Dallas For more information, call (800) 793-6222 or visit

OCTOBER 2012 Sunday-Wednesday, October 21-24 Mortgage Bankers Association 99th Annual Convention & Expo The Hyatt Regency 151 East Wacker Drive • Chicago For more information, call (800) 793-6222 or visit

new to market

continued from page 38

launched a new consulting service designed to help lenders and other financial service companies build an entirely cloud-based virtual corporate office. Named VCO Airlift, the new consulting program will identify the specific steps a lender needs to undertake to run a compliant, scalable, paperless, virtualized mortgage office without the expense and complexity of on-site servers, software, maintenance and upgrades, while taking into account the company’s existing software and business needs. Airlift will also pinpoint the savings in dollars that lenders will realize by freeing themselves from on-site servers and legacy systems and migrating to a virtual environment. Airlift leverages lessons gained since Acris Technology has been managing and hosting virtualized platforms since its inception in 2005. Earlier this year, Acris Technology launched VCO Desk, a virtual office platform tailored specifically for the mortgage industry. Through a secure Citrix environment, VCO Desk enables racks of servers to be replaced by an array of hosted, load balanced virtual servers, allowing desktop users remote access to all of a company’s applications and data while providing greater IT power, scalability and security. Developed and refined over the course of years, VCO Desk had been in use privately for years by Laguna Hills, California-based Millennia Mortgage to process over $10 billion in funded loans. “Everyone is talking about cloud computing, yet it is not clearly understood by many small and mid-sized lenders in a way that makes it actionable,” said Martin Williams, chief executive officer of Acris Technology. “Because we have ‘been there, done that’ with our own virtual office platform, VCO Desk, it occurred to us that

we can guide others who are weighing this transformation but aren’t sure how to get there. We’re calling it VCO Airlift because it is designed to ‘lift’ companies into a cloud-based environment, where so much more is possible.” While some additional expense and equipment may be required to build a totally cloud-based mortgage office— such as procuring sufficient high-speed Internet service and configuring dual monitors for staff, for example—virtualization allows lenders to save an enormous amount of money that is normally spent on IT staff and on-site, physical servers, which typically handle email, database, file storage and other functions. In comparison, a virtual corporate office uses secure, remote servers to handle all of a company’s IT needs, while allowing staff to use emails, files, electronic documents, loan origination software (LOS) and customer relationship management (CRM) tools just as they normally would. In addition, in most cases, lenders do not have to give up any of their current applications or software to place their business in the cloud.

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

New to Market column 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.

Nationwid e FHA Lend er Looking fo r: TO P P R O D U CER


Call for De tails!

T h e B E ST B r a n c h S o l u t i o n , P e r i o d . 800.220.9498 This information is provided to assist business professionals and is not an advertisement extended to the consumer, as defined by Section 226.2 of Regulation Z. Freedom Mortgage corporate office is located at: 907 Pleasant Valley Ave. Suite 3, Mount Laurel, NJ 08054. Lender NMLS ID: 2767. Licensed by the NJ Department of Banking and Insurance, License #9100861. All Rights Reserved.


Some restrictions may apply. All borrowers are subject to credit approval. Programs subject to change. The information provided herein is for dissemination to and for the use of real estate and financial business entities only and is not an advertisement for the extension of credit to consumers. Š 2011 Flagstar Bank