KSMP_october11 by United Sports Publications

O OCTOBER 2011

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KANSAS MORTGAGE PROFESSIONAL MAGAZINE NationalMortgageProfessional.com O

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Mortgage PROFESSIONAL K A N S A S

MAGAZINE

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

Kansas Association of Mortgage Professionals 14904 West 87th Parkway, PMB 234 Lenexa, KS 66215-4159 Phone #: (316) 243-3454 Fax #: (913) 397-8772 Web site: www.ksamp.org E-mail: director@kamb.org

Craig A. Yaryan Dave R. Purdy Melissa Walker CMC, CMPS Connie Swafford Susie Mize

BOARD OF DIRECTORS Phone # President (316) 322-7300 Vice President (913) 338-2929 Secretary/Treasurer (816) 286-1542 Past President (913) 422-9466 Executive Director (913) 764-5600

E-mail craig@emgkansas.com dpurdy@kc.rr.com mwalker@theprivatebank.com cswafford@kc.rr.com director@kamb.org

Ryan M Wiebe Tasha Brackeen AW Pickel III, CMC Donna Huffman JD, CMC, CRMS Steve M. Jeselnik Tim Wooding, CMC,CRMS

DIRECTORS Director—Kansas City Chapter (816) 778-7011 Director—South Central Chapter (316) 789-0202 Director—Legislative Affairs (913) 747-4000 Asst. Director—Legislative Affairs (785) 863-3399 Industry Partner (913) 486-1302 Director-at-Large (316) 773-1515

ryan@firstmortgagekc.com tasha@loanontop.com awpickel@leader1.com a1loanlady@aol.com steve.jeselnik@53.com timw@emgkansas.com

Maurice J. Barkley Melissa Walker CMC, CMPS Connie Swafford AW Pickel III, CMC Donna Huffman JD, CMC, CRMS Farley Gilliam Craig A. Yaryan Dave R. Purdy Susie Mize Craig A. Yaryan Susie Mize

COMMITTEE CHAIRS Bylaws Committee (913) 451-1060 Education Committee (816) 286-1542 Executive Committee (913) 422-9466 Legislative Committee (913) 747-4000 Legislative Committee (785) 863-3399 Membership Committee (913) 261-5060 Nominations Committee (316) 322-7300 Political Action Committee (913) 338-2929 Partners Relations Committee (913) 764-5600 Public Relations Committee (316) 322-7300 Sponsorship Committee (913) 764-5600

mbarkley@kc.rr.com mwalker@theprivatebank.com cswafford@kc.rr.com awpickel@leader1.com a1loanlady@aol.com fgilliam@metlife.com craig@emgkansas.com dpurdy@kc.rr.com director@kamb.org craig@emgkansas.com director@kamb.org

KS 1

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facebook.com/mortgageprofessional

OCTOBER 2011

LinkedIn.com (search National Mortgage Professional Magazine)

KANSAS MORTGAGE PROFESSIONAL MAGAZINE

Twitter.com/ntlmortgagepro

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

New in 2011! KS 2

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

OCTOBER 2011

KANSAS MORTGAGE PROFESSIONAL MAGAZINE

NationalMortgageProfessional.com

(Subject to change)

Saturday, December 3

Monday, December 5

10:000 a.m.-5:000 p.m...........Registration n Open

8:000 a.m.-4:000 p.m.............Registration n Open

10:000 a.m.-Noon ................Committeee Meetings 8:300 a.m.-10:300 a.m...........NMLS—Reversee Mortgagee (Twoo Hours) Some or all of the following NAMB Committees could meet during these times … ad- Reverse Mortgage course to be instructed by David Luna of Mortgage Educators. ditional details will be posted at a later date: The Government Affairs Committee, Membership Committee, Ethics Committee, By-Laws and Education Committee, Com- 10:300 a.m.-10:455 a.m.........Break munications Committee and the Finance Committee. 10:455 a.m.-12:455 p.m.........NMLS—Ethicss (22 Hours) 1:000 p.m.-4:000 p.m.............NAMB B Delegatee Councill Meeting Ethics course to be instructed by David Luna of Mortgage Educators. 4:000 p.m.-6:000 p.m.............Networkingg Event

12:455 p.m.-2:000 p.m...........Networkingg Lunch

Sunday, December 4

n From m Suee Woodardd & Jim m McMahan, 2:000 p.m.-3:000 p.m.............Presentation Mortgagee Successs Source

8:000 a.m.-6:300 p.m.............Registration n Open 8:300 a.m.-9:300 a.m.............NMLS—FHAA (Onee Hour) FHA course to be instructed by David Luna of Mortgage Educators. 9:300 a.m.-9:455 a.m.............Break 9:455 a.m.-12:455 p.m...........NMLS—Federall Law w (Threee Hours) Federal Law course to be instructed by David Luna of Mortgage Educators. 12:455 p.m.-2:000 p.m...........Networkingg Lunch n & Networkingg Reception 2:000 p.m.-6:000 p.m.............Expoo Halll Open

3:000 p.m.-3:155 p.m.............Break 3:155 p.m.-4:155 p.m.............Presentation n From m Suee Woodardd & Jim m McMahan, Mortgagee Successs Sourcee (continued) 4:155 p.m.-4:300 p.m.............Grandd Prizee Drawingg forr a Tripp too Hawaii 4:300 p.m.-6:300 p.m.............NAMB B Boardd 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 www.namb.org.

$200

$250

Non-Member Registration Fee Access to all conference events.

$350

$450

Visit Exhibit Hall Only This is for mortgage originators only.

$100

Cancellation and refund policy: Notice of cancellation must be made in writing (no exceptions) and sent to registration@kinsleymeetings.com 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.

KANSAS MORTGAGE PROFESSIONAL MAGAZINE

For more information on the NAMB/WEST 2011 Loan Originator Conference, contact Kinsley at (303) 798-3664, e-mail registration@kinsleymeetings.com or visit www.nambwest.com.

NationalMortgageProfessional.com

Reservations can be made by calling (877) 313-5757 or (702) 891-7777, or visiting http://goo.gl/kjd3b. 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.

KS 3

OCTOBER 2011

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

KS 4

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

OCTOBER 2011

KANSAS MORTGAGE PROFESSIONAL MAGAZINE

NationalMortgageProfessional.com

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

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. Member FDIC

National Mortgage Professional Magazine

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TABLE OF CONTENTS

ADVERTISERS

GAGE PR

SSIONAL

NATIONAL

NMP

October 2011

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MAG

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Company

Volume 3, Number 10

Web Site

Page

AllRegs ............................................................ www.allregsmortgage.com/nmp ............................38

A Special Look at “The Future of Mortgage Banking”

Bay Equity LLC ................................................ www.bayeq.com ..................................................42

Capturing Opportunity in the New Mortgage Marketplace By Eric Wiley All That You Can Be: Optimizing Efficiency in Your Bank’s Mortgage Division By BJ Bounds The Next Generation of Mortgage Loan Originator

CBC National Bank ................................................................................................................KS4 & 7

By Casey Cunningham

Facing the Challenges of the Current Mortgage Banking Landscape By Leif Boyd Banker to Broker: The Advantages to Mortgage Brokers By David Hardin Leading Mortgage Bankers Out of Chaos: Utilization of SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats)

Benchmark Mortgage ...................................... www.iambenchmark.info ......................................5 Calyx Software ................................................ www.calyxsoftware.com ......................................37

Elliott and Company Appraisers, Inc................... www.appraisalanywhere.com ................................30 Flagstar Wholesale Lending .............................. www.paperless.flagstar.com ......................Back Cover

37 38 40 41

Freedom Mortgage .......................................... www.fmbranch.com ......................Inside Back Cover Frost Mortgage Lending Group .......................... www.frostmortgage.com/nmp ..............................21 GSF Funding .................................................... gsfusda.com ........................................................11 Hometown Lenders .......................................... www.hometownbranch.com ................................35 HVCC Appraisal Ordering .................................. www.hvccappraisalordering.com ..........................30 Icon Residential Lenders, LLC ............................ www.iconwholesale.com ..............................15 & 30 Land Home Financial Services .......................... joinamx@lhfinancial.com ....................................20 Loyalty Express ................................................ www.loyaltyexpress.com ......................................16 MBA-NJ/NJAMB ................................................ www.njamb.org ..................................................10

Menlo Park Funding ........................................ www.menloparkfunding.com ................................41

By Debra Gaveglio

Featured Exhibitors at the MBA’s 98th Annual Convention & Expo

NAMB West...................................................... www.nambwest.com ..........................KS2, KS3 & 22

PB Financial Group Corp. .................................. pbfinancialgrp.com ..............................................16

The Elite Performer: How to Use the “F” Word in the Mortgage Industry By Andy W. Harris, CRMS Short Sales: A Sweetening Alternative for Servicers

By Daren Blomquist

Credit Repair Scams: A Disease, Not a Cure

Polaris Home Funding Corp. (Wholesale) ............ www.polarishfc.com ............................................45

REMN (Real Estate Mortgage Network)................ www.remnwholesale.com ....................................29 Ridgewood Savings Bank .................................. www.ridgewoodbank.com ....................................44 Shortsale Speedway.......................................... www.shortsalespeedway.com/freedemo ................19 StreetLinks Lender Solutions ............................ www.streetlinks.com ....................Inside Front Cover The Warrior Sales Academy .............................. www.warriorondemand.com ................................12

10 12 16 18 18 19

24 26 45

9 11 33

United Northern Mortgage Bankers Ltd. ............ www.unitednorthern.jobs ............................13 & 39 Veros Real Estate Solutions .............................. www.sapphirebyveros.com ..................................43 Windvest Corporation ...................................... www.windvestcorp.com ........................................23

OCTOBER 2011

33 48 52

TMS Funding.................................................... www.tmsfunding.com ..........................................31

KANSAS MORTGAGE PROFESSIONAL MAGAZINE

Columns Heard on the Street NMP News Flash: October 2011 New to Market USA Cares Mortgage Heroes: Traci Ramirez of Tri-County Mortgage NMP Mortgage Professional Resource Registry NMP Calendar of Events

Polaris Home Funding Corp. (Branches).............. www.polarishfc.com/TimeForAChange ..................27

NationalMortgageProfessional.com

The Secondary Market Overview: From Bonds to Production … The Confidence-JobsHousing Connection By Dave Hershman Mortgage Marketing Classics: Direct Mail and Networking By Joy Gendusa Who is Responsible for Post-Closing QC on FHA Loans? By Tommy A. Duncan, CMT Get Set for the Home Stretch By Mary Beth Doyle ValueNation: Maximizing the Order Module in a Valuation Management Platform By David Rasmussen FHA Insider: Need More Realtors? FHA Gets You in the Door! By Jeff Mifsud Three Reasons Why Short Sale Real Estate Agents Should be Your Best Friend By Erik Wind Lykken on Leadership: Communication and Leadership (Part II) By David Lykken The NAMB Perspective: The Value of Becoming NAMB-Certified By John L. Stearns, CMC, CRMS Mortgage Companies Breaking the 2011 Inc. 500 List

NAPMW .......................................................... www.napmw.org ..................................................14 Nationwide Equities Corp. ................................ www.nwecorp.com ..............................................17

Features

By Mike Hall & Greg Holmes

Mortgage Brokers Network Corp, Inc. ................ www.mortgagebrokersnetwork.com ......................23

October 2011 Volume 3 • Number 10

Mortgage PROFESSIONAL N A T I O N A L

MAGAZINE

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: NationalMortgageProfessional.com STAFF Eric C. Peck Editor-in-Chief (516) 409-5555, ext. 312 ericp@nmpmediacorp.com Andrew T. Berman Executive Vice President (516) 409-5555, ext. 333 andrew@nmpmediacorp.com Joey Arendt Art Director joeya@nmpmediacorp.com Jon Blake Advertising Coordinator (516) 409-5555, ext. 301 jonb@nmpmediacorp.com Kelsey Domino Executive Sales Assistant (516) 409-5555, ext. 316 kelseyd@nmpmediacorp.com

Tara Cook Billing Coordinator (516) 409-5555, ext. 324 tarac@nmpmediacorp.com

SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail orders@nmpmediacorp.com or visit www.nationalmortgageprofessional.com. 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

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OCTOBER 2011

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 ericp@nmpmediacorp.com. The deadline for submissions is the first of the month prior to the target issue.

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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 karenk@nmpmediacorp.com.

MAG

AZIN

A Message From NMP Media Corp. Executive Vice President Andrew T. Berman A look into the future Our October 2011 issue’s Special Look at “The Future of Mortgage Banking” starts off with a piece from Eric Wiley from Pacific Residential Mortgage LLC on page 36 giving his perspective on the past, present and the future of the mortgage industry. Following Eric is a contribution from BJ Bounds from Calyx on page 37 that’s great for our readers who work for community banks and credit unions to maximize their efficiencies through utilization of the right technology. We are privileged to have Casey Cunningham write about finding the next generation MLOs for your mortgage banking operation on page 38. Casey knows a lot about this topic as her school, XINNIX, is one of the only non-CE training schools designed to build strong sales forces, from the MLOs to the top brass. Leif Boyd from American Pacific Mortgage follows with a piece on page 40 that talks about the current mortgage banking environment and the future opportunities. Later in the section is a piece from David Hardin from Bay Equity Home Loans on page 41 bringing up the long standing debate of broker versus banker and which model is best for your situation. Wrapping up the section is a must-read piece from Debra Gaveglio of Actualize Consulting on page 43 about using the SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) for the purpose of business-planning for your mortgage bank.

Post-closing QC … who needs to do it? When the U.S. Department of Housing & Urban Development (HUD) killed the mini-eagle program and pushed the responsibility of working with mortgage brokers on the fully-endorsed lenders, it created some question regarding who handles the post-closing quality control (QC) on Federal Housing Administration (FHA) loans. This month, Tommy A. Duncan, CMT from Quality Mortgage Services LLC shares his expert opinion on this matter on page 16 in his piece, “Who is Responsible for Post-Closing QC on FHA Loans?”

Credit repair could do more harm than good On page 8, Mike Hall and Greg Holmes of Credit Plus Inc. send a stern warning to mortgage professionals about using credit repair services. This includes warnings from the Federal Trade Commission (FTC), as Mike and Greg provide some ways that you can legally and effectively handle misinformation on a credit report.

How are you preparing for the short sale boom? This month, RealtyTrac’s director of marketing communication, Daren Blomquist, talks about short sales as an ideal alternative for servicers in his article on page 6. Later in the magazine on page 23, short sale expert Erik Wind of ShortSaleSpeedway provides three reasons why real estate agents should be your best friend and what you can do to land their business.

The benefits of “alphabet soup” after your name Last month, we covered the topics of education and certification, and while it’s nice that we finally have a minimum set of standards established with the SAFE Act in place, industry designations can still take your level of professionalism to a much higher level. In this month’s NAMB Perspective on page 26, NAMB 20112012 Certification Committee Chair John L. Stearns, CMC, CRMS provides some great tangible net benefits you get when you decide to advance your career and become certified by NAMB.

Your monthly favorites Also in our October issue, Andy W. Harris, CRMS’s “The Elite Performer” series discusses the use of the “F” word in the mortgage industry (no, not that one … read page 4 for details). Dave Hershman’s Secondary Market Overview on page 10 discusses the interconnected consumer confidence, jobs and housing numbers. Jeff Mifsud’s “FHA Insider” on page 19 reminds our readers how to leverage their FHA knowledge to break into real estate office and win the ears and business of agents. This issue also features another great installment from mortgage banking consultant to the stars, David Lykken, in this month’s “Lykken on Leadership” on page 24. This is the second part in David’s series that breaks down effective communications for leaders, and this month, he provides crucial tips on how to communicate with different types of personalities.

Don’t let new opportunities “fall” out of grasp Sure, the leaves may be falling and the cold of winter will replace the crisp fall air as the calendar pages fade from October to November, but it’s no time to pack up and hibernate for the winter. If anything, it’s time to get out and begin renewing and reinventing yourself, positioning your business for success in 2012. The New Year is right around the corner, and it’s never too soon to begin charting your course to success for the next year. Until next month ...

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

The National Association of Mortgage Brokers

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: www.namb.org

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

NAMB Board of Directors Officers President—Michael D’Alonzo, CMC Creative Mortgage Group 1126 Horsham Road, Suite D Maple Glen, PA 19002 (215) 657-9600 mjdalonzo@hotmail.com President-Elect—Donald J. Frommeyer, CRMS Amtrust Mortgage Funding Inc. 200 Medical Drive, Suite D Carmel, IN 46032 (317) 575-4355 dfrommeyer@amtrust.net Vice President—Michael Anderson, CRMS Essential Mortgage 3029 S. Sherwood Forest Boulevard, Suite 200 Baton Rouge, LA 70816 (225) 297-7704 mikea@essentialmtg.com Treasurer—John Councilman, CMC, CRMS AMC Mortgage Corporation 2613 Fallston Road Fallston, MD 21047 (410) 557-6400 jlc@amcmortgage.com Past President—Jim Pair, CMC Mortgage Associates Corpus Christi 6262 Weber Road, Suite 208 Corpus Christi, TX 78413 (361) 853-9987 jlpair@aol.com

Directors Fred Arnold, CMC American Family Funding 24961 The Old Road, Suite 101 Stevenson Ranch, CA 91381 (661) 284-1150 fred@fredarnold.com

Deb Killian, CRMS GMAC 246 Federal Road, Unit C-24 Brookfield, CT 06804 (203) 778-9999, ext. 103 debkillian@snet.net Linda McCoy Mortgage Team 1 Inc. 6336 Picadilly Square Drive Mobile, AL 36609 (251) 610-0494 linda@mortgageteam1.com

President-Elect Candace Smith, CME (512) 329-9040 csmith@wrstarkey.com

Vice President-Eastern Region Christine Pollard (607) 656-5005 cpollard1046@gmail.com

Senior Vice President Jill Kinsman (206) 344-7827 jill.kinsman@usbank.com

Secretary Katheryn M. Farrell (509) 528-0349 katherynfarrell@yahoo.com

Vice President-Northwestern Region Nita Cook, GML, CME, CMI (360) 705-5053 nita.cook@legacyg.com

Treasurer Jeanne Evans, CME (918) 431-0155 drmjevans@att.net

Vice President-Western Region Lyman King III, CME, CMI (916) 967-4653 lking@gemcorp.com

Parliamentarian Hulene Bridgman-Works (800) 827-3034 hulene137@yahoo.com

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

2011 Board of Directors & Staff Tom Conwell President (800) 445-4922, ext. 1010 tconwell@credittechnologies.com Donald J. Unger Vice President (303) 670-7993, ext. 222 don@advcredit.com Daphne Large Treasurer (901) 259-5105 daphnel@datafacts.com Marty Flynn Ex-Officio (925) 831-3520, ext. 224 marty@ccireports.com William Bower Director—Tenant Screening Chair (800) 288-4757 wbower@confinfo.com Mike Brown Director—Technology Chair (800) 285-6691 mike.brown@ncogroup.com

Janet Curtis Director—New Membership & Elections Co-Chair (212) 224-6121 jcurtis@sarma.com Renee Erickson Director—Tenant Screening Co-Chair (800) 311-1585, ext. 2101 renee@zipreports.com Nancy Fedich Director—Conference Chair (908) 813-8555, ext. 3010 nancy@cisinfo.net Judy Ryan Director—New Membership & Elections Chair (800) 929-3400, ext. 201 jryan@kroll.com Tom Swider Director—Legislative Co-Chair (856) 787-9005, ext. 1201 tswider@creditlenders.com Terry Clemans Executive Director (630) 539-1525 tclemans@ncrainc.org

Susan Cataldo DirectorEducation & Compliance Chair Jan Gerber (404) 303-8656, ext. 204 Office Manager/Membership Services susancds@cdsusa.net (630) 539-1525 jgerber@ncrainc.org

OCTOBER 2011

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

Vice President-Central Region Lisa Puckett, CME (405) 741-5485 lpuckett@ameagletitle.com

KANSAS MORTGAGE PROFESSIONAL MAGAZINE

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

President Laurie Abshier, GML, CME, CMI (661) 283-1262 lauriea@gemcorp.com

NationalMortgageProfessional.com

Olga Kucerak, CRMS Crown Lending 222 East Houston, Suite 1600 San Antonio, TX 78205 (210) 828-3384 olga@crownlending.com

National Board of Directors 2011-2012

How to Use the “F” Word in the Mortgage Industry

OCTOBER 2011

KANSAS MORTGAGE PROFESSIONAL MAGAZINE

NationalMortgageProfessional.com

I have had the pleasure of working with and meeting all types of interesting people during my career. As I’ve mentioned in the past, long-term success is not something that just “happens.” It takes hard work and focus, especially in our current housing market and with constant changes in the industry. Adapting to change is no longer optional if you plan to succeed in 2012 and beyond … it’s a requirement. This should be common sense by now for most of you career-minded folks. You must update your systems and business plan to not only comply with regulatory changes and avoid speed bumps, but to also make sure you take advantage of any new opportunities that come your way. Many of us are succeeding in our mortgage careers and many are failing. The primary factor I see in dividing these results is how each person responds to their new challenges. In other words, how they use the “F” word. Each morning, you wake up before heading to the office you’re filled with either FEAR or FAITH. Do you have negative thoughts and fear about the future of your career or do you have unrelenting optimism and faith that you’ll succeed in this new world of opportunities? Always remember that if you strive to be successful in this industry, you must work hard and have faith. There is no doubt that we have challenges in our industry, but when fearful thoughts enter your mind, you must eliminate them. Having faith will slowly uncover the hidden opportunities behind any challenges you face. Yesterday is gone and it’s not coming back. If something happened in the past that caused you concern or distress, just remember that it no longer exists unless you voluntarily hold onto it. Focus on the present and future with confidence. Uncertainty about the future is a burden you were not created to carry. Only the big man upstairs is built for that burden. Preparing for the future of your career is important as long it’s driven by faith and without a doubt. Concerns or fears about

“Therefore do not be anxious about tomorrow, for tomorrow will be anxious for itself. Sufficient for the day is its own trouble. Each day has enough trouble of its own.” —Matthew 6:34

the future will do nothing but create anxiety and negative thoughts, holding you in a self-constructed prison. It’s not easy to block out fearful thoughts or doubts, but always remember, worrying is worthless. Your success relies on your decision to live by faith over fear. Challenge yourself each day to see the opportunity behind any obstacle. Take time each day to reflect on the positive things in your life since the negative things tend to stand out on their own. Help others do the same during these challenging economic times. Just remember … your thoughts are already shaping your future, whether you are aware of it or not. I don’t know about you, but I’ll put my money on FAITH.

Tip of the month Find a calendar that fits your style. Obviously it’s important that we keep an organized schedule of our personal and business appointments, but the way you remember your appointments is key. Some like having a schedule they can physically carry and manually write-in, while others might like an electronic calendar via Outlook or on their mobile device. Whatever you choose to use, set alerts so that you don’t forget your appointments and meetings! Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and 2010-2011 president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431 or e-mail aharris@vantagemortgagegroup.com or visit AndyHarrisMortgage.com.

AY IRRUP C A T ST GRE

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Short Sales:

A Sweetening Alternative for Servicers By Daren Blomquist

Short sales have rarely been the first choice of servicers given the extra complications involved in negotiating a property sale with at least two other parties—more if there are second lien holders and investors involved. Beyond the practical complications lies the belief that short sales flout one of the fundamental principles of mortgage lending: Those who enter into a legally binding contract to pay off a mortgage should, in fact, be required to pay off that entire mortgage. A short sale violates that principle by, in effect, giving the borrower a principal balance reduction. In the interest of keeping both the principal and principle intact, mortgage servicers have typically favored disposing a property through foreclosure rather than short sale. RealtyTrac’s foreclosure sales report shows sales of foreclosed and real estate-owned (REO)

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properties nationwide have surpassed the sales of pre-foreclosure properties (in default or scheduled for foreclosure auction, these are typically short sales) in every quarter since the first quarter of 2008. Cumulatively over that time period, a total of 2.3 million REO properties have sold compared to 1.5 million pre-foreclosure sales.

Short sales spiking But, we noticed a significant shift in the second quarter of this year that indicates short sales may be growing on servicers. Overall, REO sales still outpaced pre-foreclosure sales by a wide margin, approximately 60,000. Nevertheless, pre-foreclosure sales spiked 19 percent from the previous quarter, while REO sales posted a fractional decrease from the previous quarter. In some of the nation’s biggest real estate markets, it appears that lenders, servicers and investors are pushing preforeclosure sales as a means to reduce costs and clear non-performing loans. Some of the states with the biggest quar-

Fig. 1

Fig. 2

terly increases in pre-foreclosure home sales included Nevada with a 43 percent increase, Washington with a 39 percent increase, California with a 38 percent increase, and Texas with a 34 percent increase (see Fig. 1). If this trend continues, it could be a solid sign that short sales are finally becoming more palatable to servicers, lenders and investors. Another sign of this trend can be found by looking at foreclosure sales data at the metro level. In a few bellwether local markets, pre-foreclosure sales actually topped REO sales in the second quarter. For instance, the RealtyTrac report shows 2,755 pre-foreclosure sales in the San Diego metro area in the second quarter compared to 2,393 REO sales during the same period. Across the country in the Cape CoralFort Myers, Fla. metro area, another market hard-hit by foreclosures, a total of 1,358 pre-foreclosure properties sold during the second quarter compared to 1,151 sales of bank-owned properties during the same time period.

Deeper discounts Furthermore, the average discount on pre-foreclosure sales increased in the second quarter, indicating servicers may be more willing to authorize lower selling prices for short sales. Pre-foreclosures, which are often sold via short sale, had an average sales price nationwide of $192,129, a discount of 21 percent below the average sales price of non-foreclosure homes. That discount was up from a 17 percent discount in the previous quarter and a 14 percent discount in the second quarter of 2010. Despite the growing discounts on preforeclosures, however, the average discount on REO sales continued to be more than double. Nationally, REOs had an average sales price of $145,211 in the second quarter, a discount of nearly 40 percent below the average sales price of non-foreclosure homes. That was up from a 36 percent discount in the previous quarter and a 34 percent discount in the second quarter of 2010. The bigger discount for REO sales offers a clear sign that servicers may often be able to get a better return on a distressed property by selling via short sale rather than selling as REO. The bigger REO discount is undoubtedly impacted to a certain extent by the type of properties and location of properties that tend to make it to REO status, but it’s still reasonable to expect a short sale property to be in better sellable condition simply because it is usually occupied by a homeowner and not vacant.

Shrinking time to sell Apologies to all the real estate pundits and prognosticators out there, but the old reliable quip that there is nothing short about short sales may not evoke knowing laughs much longer. That’s because short sales appear to actually be getting shorter, if ever so slowly. Preforeclosures sold in the second quarter took an average of 245 days to sell after receiving the initial foreclosure notice, down from an average of 256 days in

the first quarter—following three straight quarters of increases in the average time to sell. Nationwide, it still takes longer to sell a short sale than an REO property, but the time to sell those REOs is headed up. REOs that sold in the second quarter took an average of 178 days to sell after being foreclosed on, up from 176 days in the first quarter and up from 164 days in the second quarter of 2010. In some states, however, the average number of days to sell a pre-foreclosure is shorter or virtually equal to the average number of days to sell a bank-owned property. In Texas, pre-foreclosures that sold in the second quarter took an average of 165 days to sell, compared to an average of 195 days to sell REOs. The average number of days to sell a preforeclosure was also shorter than the average number of days to sell an REO in Oregon, Washington, Virginia and Georgia. In California, it was a virtual tie, with pre-foreclosures selling in 169 days on average, and REOs selling in 165 days on average (see Fig. 2). The second quarter jump in pre-foreclosure sales, coupled with bigger discounts on pre-foreclosures and a shorter average time to sell pre-foreclosures all point to a housing market that is starting to focus on more efficiently clearing distressed inventory through more streamlined short sales—particularly in some areas. This gives distressed homeowners who do not qualify for loan modification or refinancing—or who are not interested in those options and want to sell—a better chance of completing a short sale to avoid foreclosure. Streamlined short sales give lenders the opportunity to more pre-emptively purge non-performing loans from their portfolios and avoid the long, costly and increasingly messy process of foreclosure and the subsequent sale of an REO— which may end up selling for a lower price than it would have as a short sale and in the meantime further stress already overloaded REO departments. Significant challenges to streamlining the short sale process remain. It’s no easy task to deal with the complications of cutting a deal with secondary lien holders and getting approval from investors. But the added foreclosure documentation and processing requirements now being imposed by regulators, legislators and judges are making the foreclosure process more complex, costly and risky. Even foreclosures done by the book using today’s standards may not measure up to higher standards imposed in the future, and therefore, might be subject to dispute even after the REO has been resold to a third party. Certainly short sales will not completely supplant foreclosure as an alternative to disposing of non-performing loans, but they are starting to look like a much sweeter alternative. Daren Blomquist is director of marketing communications for RealtyTrac. He may be reached by phone at (949) 502-8300, ext.115 or e-mail daren.blomquist@realtytrac.com.

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Credit Repair Scams:

A Disease, Not a Cure By Mike Hall & Greg Holmes

new contagion is now spreading through the consumer credit industry. Mortgage professionals will want to be especially vigilant to avoid contact with this disease, which promises to bring as much misery to brokers as it does to the customers who are its carriers. The virus is called “Credit Repair,” and it spreads through late night TV commercials, junk e-mails and yard signs in low-income neighborhoods. Slick hucksters create the ads, disguising themselves as earnest professionals promising to magically wipe the black marks of late payments, defaulted loans and maxed-out credit cards from a consumer’s credit report. Their procedures for the “doctoring” of credit records can range from merely useless to downright fraudulent and malicious. While there are many good reasons for a mortgage professional to help a customer improve their credit score, it is important to avoid using the phrase “credit repair” to describe this assistance. It is equally important to avoid associating yourself with firms who use the phrase to refer to their services. Chief among the reasons: All three of the major nationwide credit repositories strictly prohibit providers of credit repair services from receiving their reports or credit scores. Mortgage lenders who associate with a credit repair company similarly run

the risk of losing the ability to access Equifax, Experian and TransUnion for mortgage lending. The best antidote is to recognize the critical difference between lawful assistance in helping a consumer qualify for a loan and the unethical activities of a credit repair firm. Some firms charge hefty fees for services a consumer can perform for free. Other credit repairers are out-and-out fraudsters, taking advance payments from desperate borrowers and skipping town without providing any service whatsoever. The most egregious operators use unscrupulous techniques to artificially manipulate a credit score, jeopardizing the nation’s credit reporting system for the sake of a short term improvement.

on their own at no charge. All three repositories comply with laws that require a do-it-yourself procedure for correcting the erroneous data that can lower a consumer’s credit score. Amending the record can often raise scores sufficiently, elevating a previously unqualified borrower to a status where a loan might be possible. The most troublesome operators in the credit repair business go beyond merely selling free services, seeking to artificially improve their clients’ scores by exploiting loopholes in the federal laws that govern U.S. repositories. The flood of paperwork creates major headaches for administrators at Experian, Equifax and TransUnion, which potentially increases the cost of credit reporting for everyone.

No good, says the FTC

Big trouble for mortgage professionals

According to an article at Bankrate.com (http://bit.ly/nTeGe0.), the Federal Trade Commission (FTC) has yet to uncover a worthwhile repair operation. The FTC raises the legitimate question: How can bankruptcy be legally removed from a credit report when, by law, it is supposed to remain on it for 10 years? A key to understanding the FTC’s concerns lies in the definition of the phrase “Credit Repair.” Most of the firms that promise to “repair” credit are actually correcting errors in a credit record. Consumers can accomplish this task

Association with a credit repair operator holds the potential to paralyze a mortgage lender’s ability to write new business. Repositories have strict rules against providing credit information to firms associated with the credit repair industry. Credit information services providers like Credit Plus must be very careful to comply with the prohibition as well. Some credit repair operators circumvent the roadblock by partnering with legitimate lenders, including mortgage companies, and using them to obtain credit information in exchange

for a commission or business referral. Other mortgage professionals choose to unwittingly assist the repair scammers voluntarily, based on the misguided belief that they are benefitting their borrowers. The result of partnering with a credit repair company could be a complete cutoff of credit reports to the lender or broker, effectively eliminating the ability to close new loans. Fortunately for mortgage professionals, there are many helpful alternatives to credit repair: Self-service: Most borrowers are capable of fixing errors in their credit report on their own, although the process requires a bit of effort. The procedure to follow is well-documented in a comprehensive article on the FTC Web site (http://1.usa.gov/19scU7), and federal credit laws have been established to make the steps as straightforward as possible. The down side of selfhelp is the time commonly required to make a correction. A complete amendment process can take 30 to 60 days, far longer than some eager borrowers are willing to wait. Credit service agencies can offer a valuable shortcut for borrowers who seek to correct a report: Credit service agencies can use their insider access to amend a report in days rather than weeks, using proof

of an error provided by the borrower. Additional assistance can advise mortgage professionals on personal finance changes that applicants can make to improve the possibility of loan approval. Credit advice: The vast majority of borrowers aren’t approved because their financial situation truly disqualifies them from obtaining a loan. Although the process isn’t immediate and painless, the outcome of true credit improvement can be ultimately more satisfying for all c o n cerned.

Considering facts and feelings Consumers often turn to credit repair for emotional reasons. A quick fix seems to be the perfect antidote for the shock of being rejected for a loan. Mortgage professionals can help by explaining that restoring credit worthiness is a restorative process, like healing a broken leg. Proper care and

“While there are many good reasons for a mortgage professional to help a customer improve their credit score, it is important to avoid using the phrase “credit repair” to describe this assistance.” —Mike Hall, VP of operations, Credit Plus Inc.

“The most troublesome operators in the credit repair business go beyond merely selling free services, seeking to artificially improve their clients’ scores by exploiting loopholes in the federal laws that govern U.S. repositories.” —Greg Holmes, national director of sales and marketing, Credit Plus Inc.

time to convalesce yields a far better outcome than grasping for a miracle cure. It is important for everyone in the mortgage lending process to maintain a proper sense of perspective. We’re all in this together. Credit reporting agencies, lenders, borrowers and the public atlarge ultimately want the same things: To help individual consumers manage their own credit in the best way possible, and to make sure lenders create the soundest, most solid loan portfolios. This goal will be best accomplished when we all work toward the day when credit repair joins smallpox, a scourge which once threatened but has thankfully become a thing of the past. Mike Hall is vice president of operations and Greg Holmes is national director of sales and marketing for Salisbury Md.-based Credit Plus Inc., a provider of credit and mortgage information services since 1928. They can be reached at beyondbundled@creditplus.com.

Your mortgage customers would be wise to completely avoid credit repair operators. If they insist on investigating, offer these helpful warning signs drawn from an article on the Federal Trade Commission (FTC) Web site (http://1.usa.gov/19scU7). It should help them recognize the first symptoms of potentially crippling credit damage to come.

Bay Equity Home Loans has announced that it is initiating an aggressive effort to expand its roster of branch offices by encouraging mortgage brokers to transition into the mortgage financing industry. Veteran mortgage broker and banker Dave Hardin, director of retail operations for Bay Equity, has been charged with overseeing the growth and marketing of Bay Equity’s current team of retail branches across the Western region of the country. “Dave Hardin has built an exceptionally successful 25-year career as a mortgage broker and banker,” said Casey McGovern, managing director in charge of production for Bay Equity Home Loans. “He has proven himself as a sound financial leader. Dave knows how to grow business, and under his leadership we anticipate strong and consistent growth in our retail branches.” In addition to his role with Bay Equity, Hardin also serves as chief executive officer of Covenant Mortgage, which he founded in 2003. Covenant is one of many mortgage brokerage firms to move into a banking relationship with Bay Equity in recent years to take advantage of the bank’s corporate infrastructure, offer more products and services, and better navigate the recent changes in federal regulations governing the mortgage industry. “I’m excited to join Casey McGovern and the management team at Bay Equity,” Hardin said. “They have done an outstanding job building a solid continued on page 29

OCTOBER 2011

Many federal and state laws govern the activities of credit repair agencies. Consumers who feel they have been victimized are urged to contact their local consumer affairs office or their state’s Attorney General.

Bay Equity Pushes Nationwide Broker to Banker Initiative

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Companies that require payment before credit repair services are performed (a requirement prohibited under the federal Credit Repair Organizations Act.) A pitch that includes no information on the actions individuals can take on their own at no charge. Firms that discourage consumers from contacting any of the three major credit repositories directly. Promises to remove accurate, current information from a credit report. Recommendations to create a “new credit identity” to improve creditworthiness. Suggestions to dispute portions of a credit report that are known to be accurate.

AllRegs and The Prieston Group Inc. (TPG) have announced a partnership that will offer risk assessment resources to the mortgage industry. Together, the two companies will build on existing tools, processes and resources to provide realtime corporate level risk assessment tools and benchmarks. Research and development, technology infrastructure, product development and various other capital resources will be invested by both organizations to create a new suite of risk assessment resources and benchmarks. “For over 10 years, I have known the great work that TPG has been providing to the industry,” says Dan Thoms, executive vice president for AllRegs. “The innovative insurance products, statistical knowledge about risk and performance, and legal resources available through TPG are exceptional. We believe that our combined forces, together with our business intelligence tools, industry distribution capabilities, and other AllRegs core competencies will create a suite of powerful new products and services for the mortgage industry.” AllRegs, founded in 1989, provides guidelines, federal and state compliance, information, forms, content and business intelligence for the mortgage lending industry. Used by virtually all of the top 100 lenders and in various government agencies, products include single and multifamily underwriting and insuring guidelines, as well as federal compliance laws and regulations, state compliance laws and regulations with plain-language analyses, policy and procedure manual templates, training opportunities, contract publishing services and a library of historical guidelines. “For 22 years AllRegs has provided extraordinary tools and resources to the mortgage industry, and we at TPG are excited to begin a valuable and meaningful relationship with such an innovative company,” said Arthur Prieston, chairman of TPG. “We are excited to bring together our resources and provide the mortgage industry with risk assessment tools that will impact the way business is conducted in the future.” The Prieston Group Inc. (TPG) was founded in 1986 by Arthur J. Prieston,

one of the country’s foremost experts on mortgage fraud. TPG was the first U.S. company to offer insurance covering repurchase losses due to mortgage fraud and material financial inaccuracy; to date, it has written fraud-insurance coverage on more than one million loans. The company also provides training and consulting services designed to minimize fraud risk and uses a patented lender-rating system to quantify the risk embedded in a lender’s underwriting, quality control and review practices. The American Mortgage Law Group PC (AMLG), a mortgage law practice founded in 1981, is a TPG affiliate.

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AllRegs and The Prieston Group Partner on Mortgage Industry Risk Assessment Resources

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The Confidence-Jobs-Housing Connection

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Want to know when the housing slump These analyses fall short because they will end? Forget about measuring shad- don’t address the importance of confiow inventory against the pace of sales dence. Americans need to be confident … start measuring job creation. If the that their government is going to help. job market turned strong tomorrow, When Federal Reserve Board Chairman instead of four years to clear shadow Ben Bernanke goes out and says, the inventory, it would take half that time. Fed stands ready to help and Americans Of course, jobs will not return until believe that there are more bullets left housing gets stronger. The housing sec- in the gun, it makes a big difference. tor is a very important component of Speaking of Bernanke, even he weighed the labor force. Sound like a Catch-22 in on the issue of confidence, according to you? It certainly is. Unemployment to The New York Times: depresses housing and housing depresses employment. That is a Households have tightened up spending vicious cycle. The question is … how and are behaving in a way as if the can we move to a virtuous cycle in economy was even worse than it actualwhich both support each other? ly is, say economists. Economic growth Here is where we insert the most continues to fall short of expectations important word: Confidence. Companies and Federal Reserve Chairman Ben are currently flush with cash and they Bernanke, speaking at a luncheon in could hire if they felt the need. But Minneapolis, suggested that it may parcompanies will not hire unless they tially be because the public is depressed. have the confidence that the consumer Americans are facing high levels of unemwill be purchasing. Thus far, consumer ployment, slow gains in wages for the spending has held employed, falling up during the soft home prices, and “Unemployment depresses patch the econodebt burdens. housing and housing my has encounHowever, “even takdepresses employment. tered this year, ing into account the That is a vicious cycle.” but businesses are many financial presworried about sures they face, c o n s u m e r s households seem retrenching. exceptionally cautious,” Bernanke said at Take the Presi-dent’s job package. the luncheon. Even before it was officially proposed, it was being assailed by conservatives So if the President’s “teensy, little” as being another stimulus giveaway $400 billion jobs package does not do and by the media as being too small to much, it does not matter. It matters make a difference. Here is an excerpt whether it has the ability to lift confifrom an article in CNN/Money which dence which will make a difference appeared the day before the package … all the difference in the world. I will was proposed: tell you this … the prolonged haggling over the budget and other proposals by Economists say the package won’t be Congress and the President does not enough to change the struggling econo- instill confidence. It makes matters my’s trajectory. worse. Solidarity and teamwork by our “The kick to growth is going to be politicians sure would be a welcome pretty small. It will add substantially sign. I am afraid that this teamwork less than one percent to GDP growth in would be harder to achieve than clear2012,” said Nigel Gault, the chief U.S. ing out the shadow inventory. economist at IHS Global Insight. “If we’re Overall, the economy is in a much talking about whether the package is big better place than it was two years ago. enough to start making a dent, it’s prob- Two years ago, we were losing hunably going to fall short of that goal,” said dreds of thousands of jobs. Now we are Gary Burtless, a labor economist at the continued on page 14 Brookings Institution.

CoreLogic Study Finds Nearly One Fourth of All Residential Properties Are Underwater

OCTOBER 2011 MBA to Manage MISMO

dards, I would like to encourage MBA members and the regulatory community to become more active in the development and support of industry standards.”

continued on page 17

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Beginning Dec. 1, 2011, the Mortgage Bankers Association (MBA) and MERSCORP Inc. (the parent company of Mortgage Electronic Registration Systems Inc. or MERS) have jointly announced that management of the Mortgage Industry Standards Maintenance Organization Inc. (MISMO) will transfer to the MBA beginning Thursday, Dec. 1, 2011. “MERSCORP successfully managed MISMO during an important period of technical and technological development for MISMO, and a period of significant change for our industry,” said David H. Stevens, president and CEO of the MBA. “With the successful launch of the MISMO 3.0 reference model, MISMO can now shift to focus efforts on regulatory implementation and advocating for broader adoption throughout the industry. The MBA and MERSCORP came to the conclusion that with this shift in focus, management should return to MBA, where MISMO adoption efforts can be synchronized with MBA advocacy. We appreciate the commitment of MERSCORP, which will continue to play an important role in influencing the work of MISMO.” Bill Beckmann, president and CEO of MERSCORP, agreed that the time was right for MISMO to return to MBA, stating, “We are one of the largest adopters of the MISMO Standards and we’ll continue to work closely with MISMO to encourage adoption of standards that, along with the mission of MERSCORP, promote efficiency in mortgage transactions.” “Due to changes in the regulatory environment over the last two years, the benefit of implementing data standards across the real estate finance industry has never been greater,” said Stevens. “Significant new reporting requirements highlight the need for a common vocabulary and data exchange mechanism. The continued enhancement of data standards and transparency are critical to the return of investor confidence and liquidity in our marketplace. MBA will continue to encourage regulators to adopt MISMO standards for regulatory reporting. The utilization of a single, consensus industry standard will greatly reduce compliance costs for the mortgage industry. To continue the development of world class stan-

CoreLogic has released its second quarter negative equity data showing that 10.9 million, or 22.5 percent, of all residential properties with a mortgage were in negative equity at the end of the second quarter of 2011, down very slightly from 22.7 percent in the first quarter. An additional 2.4 million borrowers had less than five percent equity, referred to as near-negative equity, in the second quarter. Together,

negative equity and near-negative equity mortgages, or what is commonly known as an underwater mortgage, accounted for 27.5 percent of all residential properties with a mortgage nationwide. The new report also shows that nearly three-quarters of homeowners in negative equity situations are also paying higher, above-market interest on their mortgages. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both. Nevada had the highest negative equity percentage with 60 percent of all of its mortgaged properties underwater, followed by Arizona (49 percent),

Mortgage Marketing Classics: Direct Mail and Networking By Joy Gendusa

You can’t battle a down market with passivity … it will eat you alive, with a side of green beans. You need to get out there and claw for business. The good thing is that if you do just that, the business is still out there. Often when things get bad, businesses react by cutting their marketing budget. You can see why: It saves money, people won’t respond anyway, etc. The problem with that theory is, if you market, people will respond and actually in higher numbers than if the economy was wonderful but why? When you don’t slash your marketing budget, you’ll be one of the few, and you’ll get more bang for your buck because there is less competition. But enough about why … let’s look at how you grow your mortgage firm and get more clients. I’m going to outline three important strategies you can implement immediately to get moving in the right direction. First, you need to make sure you’ve covered the basics … the old stand-bys: Direct mail and networking. They may not be flashy, but these classic marketing techniques are proven to work—and “if it ain’t broke” … you know the rest. The key to success here is diligence, so be ready to commit. Single serving efforts in these areas are a waste of time and money. By the same token, if you apply them in a consistent schedule, they just flat out work.

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Direct mail

Do you manage a sales team? Call 866-360-6645 and ﬁnd out just how effective and affordable an on-site training program can be for your entire sales team.

"Ron Vaimberg knows how to teach originators to be successful. His step-by-step approach makes it easy for anyone to take their business to a whole new level!" Julio De Cardenas Executive V.P. of United Northern Mortgage Bankers

"As a 20+ year veteran of the mortgage industry, I believe that you never stop learning, and Ron took my business to the next level. Ron keeps his ﬁngers on the pulse of the market and is spot-on with his insights and strategies!" Scott St. John Executive V.P. of American Paciﬁc Mortgage

There are many options these days in the direct mail industry, but the most effective one for raising awareness of your business and growing name recognition is postcards. Because there is no envelope to open and the designs are, or at least should be, eye-catching, you are guaranteed your prospect at least views your message, even if the card eventually ends up in the trash. When stuck to, a postcard campaign goes a long way towards solidifying your credibility in the community. As a mortgage professional, however, there are times that may call for fullsize letters with envelopes. If you are inviting prospects to a seminar, these are definitely the way to go. Classy, professional invitations work better in this case because you are projecting your professionalism to the recipient. The fact is 79 percent of households read or skim direct mail advertising according to the 2010 DMA Statistical Fact Book. When you send out postcards, you will boost your visibility. It is a necessary byproduct of an effective campaign. Send out invitations through the mail, and just about 80 percent of

“Remember, there is no more powerful form of marketing than word-of-mouth. People trust their peers far more than they trust advertisers.”

your prospects give you the chance to woo them. With a quality invite and compelling copy, you will see a great response. It’s important to choose the right firm to handle your direct mail campaign. Be sure to find one that is willing to share previous samples of their work. Also, ask if they work with you on the design (i.e. give you free revisions, listen to suggestions, etc.). It is often helpful to select a firm that handles printing and mailing in-house. They can save you money on postage.

Networking Here is another great form of marketing, especially in the financial industry. It may be intimidating for some people, but you don’t have to be crazy about it. The simple act of having lunch with a few real estate agents can be a huge boost to your business. No amount of direct mail or Web site design can fully convey who you are to your prospects. There is something about your physical presence that lends credibility and trust—so be real, not pitching sales. Search for mortgage professional groups and look over the events they have in your area. Some of the best ways to establish contacts in the community can be found through these events. While you’re at it, read Keith Ferrazzi’s book on networking, Never Eat Alone: And Other Secrets to Success, One Relationship at a Time. Keith is a power networker, but even the timid can gain valuable lessons from his insights. Remember, there is no more powerful form of marketing than wordof-mouth. People trust their peers far more than they trust advertisers. Networking gets people talking about you. If you are disinclined to put yourself out there in this way, try to strategize. Who will make the biggest impact for your business? Select two or three individuals in your area who are well-connected to the real estate industry and introduce yourself to them. Invite them to lunch and tell them about yourself and your business. If all goes well, you could see a significant difference in traffic just based on these individuals’ recommendations. That’s not too scary, is it? So direct mail and networking are continued on page 14

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United Northern Mortgage Bankers, Ltd. Corporate NMLS ID# 7230 New York State Dept. - Licensed Mortgage Banker - License #100724 New Jersey Dept. of Banking and Insurance - Mortgage Lender - License #L0046623 Pennsylvania Dept. of Banking - Mortgage Lender - License #20887 Connecticut Dept. of Banking - Mortgage Lender - License #20372 Massachusetts Div. of Banks and Loan Agencies - Mortgage Lender & Mortgage Broker - License #MC5070 North Carolina Commissioner of Banks - Mortgage Lender - License #L140365 South Carolina State Board of Financial Institutions - Supervised Lender - License #S7, 461 Florida Dept. of Financial Institutions - Mortgage Lender - License #ML0700679 Senior Security Home Advantage is a lending area of United Northern Mortgage Bankers, Ltd. Direct FHA Endorsed Lender

the secondary market overview NMLS

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 around the manyy vvenues workshops held 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 ac aaccess cess tto o 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 educational standards IIff yyou ou believe believe in helping helping to to elevate elevate the edu ucational standar ds 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.

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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 across across the Country engage mortgage banking industry. Men C ountry who eng age in the mor tgage / ba anking industr y. M en 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 excelthey want want tto oe xcel e aatt wha yers who want want e xcellenc 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: www.napmw.org 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: napmw1@aol.com napm w1@aol.c . om

Coas Coast oast to to C Coast oas A oast Associations ssociations D iscoun un nted S errvic v es Discounted Services IIndustry ndustrry Updates U Updatess

not creating enough jobs to replace the ones we lost, let alone fuel future growth. Consumers are spending, the service sector is expanding and exports are growing. It is housing and jobs which are lagging, which brings us back to confidence. We need leaders … leaders who will help lift up our economy. It is time we stop looking to Washington, D.C. to provide that confidence. We need to look at ourselves. Are you selling with confidence? Do you have the confidence that real estate is still the best investment anyone can make in the long run? Are you growing your company? We need every company in America to start hiring. Again, the big ones have the cash, but they are waiting for consumers. Instead, they need to be leading consumers. As soon as we lead the public forward, the vicious cycle breaks

and the virtuous cycle begins. Are you tired of hearing about negatives and reacting negatively? We live in a great country in which there is opportunity to make your own fortune. We even have the opportunity to get rid of politicians without a revolution. It is time we remembered this. 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 www.ratelink.originationpro.com for a free trial. Dave’s OriginationPro Marketing System can be found at OriginationPro.com and he may be reached by e-mail at dave@hershmangroup.com.

mortgage marketing classics Elvis and The Beatles. They are the classics, but what is the next big thing? You won’t find it in the Cavern Club. Well, you might, but it won’t be on stage— it’ll be on the computers and every smartphone in the building. It’s social media, and for the more timid networkers among us, online social networking is a dream come true. It’s also effective, which is nice bonus.

Social media Social media is great for posting funny pictures and interesting anecdotes from your day, but is it really a viable growth strategy for expanding your business? Quite simply … absolutely! According to the 2009 Realtor Technology Survey, 84 percent of real estate agents engage in social media to some extent. If you want their business you go where they are, and for the vast majority of them it’s social media. Two social media sites to utilize for targeting real estate agents are Facebook and LinkedIn. Facebook wins the popular vote, according to the same study, with 78 percent of respondents saying they use the Internet colossus. LinkedIn, a business networking site, comes in at a very respectable 58 percent. Registering for these sites is free, and using them is actually quite simple. Register for an account and take a few minutes to familiarize yourself with the site and you will immediately be more comfortable with it. For Facebook, you want to create a Fan Page for your business to give real estate agents the opportunity to connect to you. Also, search for groups that may contain prospects. For example, “Real Estate Agents Dallas” might

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turn up a networking group of professionals for the Dallas area, and it would be a great place to meet potential clients. On LinkedIn it’s even easier to make business connections, because that’s the whole point of its existence! It allows you to build connections with other professionals and also get recommendations from past clients to build your credibility. Use it to post news and articles about your business. Remember, nobody likes blatant advertising on social media. If you want to succeed you need to offer valuable content that subtly promotes your business. This is especially true for Facebook; less so for LinkedIn. Informative articles, facts, trivia questions and contests are great ways to involve people and market your business. Dedicate yourself to executing these growth strategies, and your business will grow. Of course, you could always just keep treading water and hope things work out—but you do so at your own risk. Don’t say I didn’t warn you! Joy Gendusa is chief executive officer and founder of PostcardMania. She began PostcardMania in 1998 with nothing but a phone and a computer and zero investment capital. By 2008, revenues reached nearly $19 million and the company now employs more than 150 people, prints four million and mails two million postcards each week representing more than 40,000 customers in over 350 industries. For more information, call (800) 628-1804, ext. 342 or visit www.postcardmania.com.

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Who is Responsible for Post-Closing QC on FHA Loans? By Tommy A. Duncan, CMT

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Since the Federal Housing Administration (FHA) changed the way correspondents and mortgagees are approved with their agency, there has always been confusion at both the broker and lender level on who performs the post-closing quality control (QC) audits. Since that initial change in FHA approval, the brokerâ&#x20AC;&#x2122;s interpretation has been â&#x20AC;&#x153;My sponsor is going to do the QC for me.â&#x20AC;? Of course when we called the lenders and large banks to validate this information last year, their response was generally, â&#x20AC;&#x153;We have not communicated such information nor have we approved such communication to our account executives.â&#x20AC;? In order to clear up any misinterpretations in the previous Mortgagee Letters, the FHA has provided more specifics on what and how post-closing QC should be performed. The U.S. Department of Housing & Urban Development (HUD) issued Mortgagee Letter 2011-02 on Jan. 5, 2011, made efforts to further clarify post-closing QC efforts and quality control plans. Weâ&#x20AC;&#x2122;re now halfway through 2011 and many lenders are still not in full compliance. Here is a step-by-step view into what HUD is requiring: The procedures used to review and monitor sponsored third-party originations (STPOs) must be included in a mortgageeâ&#x20AC;&#x2122;s FHA-approved QC Plan. Itâ&#x20AC;&#x2122;s not enough for the lender to start performing this review â&#x20AC;Ś they also must work it into their QC Plan and get it approved by FHA. All FHA-approved mortgagees, including those in a sponsored relationship, must have a QC Plan that requires the review of loans that are originated or underwritten. Interpretation: Itâ&#x20AC;&#x2122;s not just the sponsoring lender that needs a plan, but also all STPOs. For those mortgagees who have STPOs, the QC Plan must require the review of loans originated and sold to the mortgagee by each of its STPOs. Mortgagees must determine the appropriate sample amount of each STPOâ&#x20AC;&#x2122;s loans to review based on volume, past experience, and other factors. Interpretation: The sponsoring mortgagee will articulate, in its QC Plan, how it will test and sample files from each STPO. This will be expensive to the sponsoring mortgagee, especially if the STPOâ&#x20AC;&#x2122;s volume is

very low. This means that the sponsoring mortgagee could possibly be performing more than 10 percent sampling post-closing QC resulting in more files being audited whether the QC is performed inhouse or outsourced. The next question is, â&#x20AC;&#x153;What technique will the sponsoring mortgagee use to ensure that each STPOâ&#x20AC;&#x2122;s files are sampled correctly?â&#x20AC;? In addition, sponsors must document the methodology used to review STPOs, the result of each review, and any corrective action taken of their review findings. A report of the QC review and followup that included the review findings and actions taken, and the procedural information (such as the percentage of loans reviewed, basis for selecting loans, and who performed the review), must be retained by the mortgagee for a period of two years. Interpretation: Articulate the methodology used to review STPOs in the QC Plan. In addition to the loans selected for routine QC reviews, sponsoring mortgagees must review all loans that are originated or underwritten by their company and that are originated by their STPO that go into default within the first six payments (referred to as early payment defaults). In order to ensure that sponsoring mortgageesâ&#x20AC;&#x2122; operations are in compliance with fair lending regulations, HUD requires that rejected applications must be reviewed within 90 days from the end of the month in which the decision was made. The clearer this issue becomes, the more onerous it appears to be for FHA lenders. With FHA taking on more responsibility for insuring loans for Americaâ&#x20AC;&#x2122;s riskiest home loan borrowers, HUD will take whatever steps it deems necessary to mitigate risk and protect the program. The real question is whether lenders will be able to comply with the resources they have, outsource QC effectively or move away from FHA lending altogether. 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 firmâ&#x20AC;&#x2122;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 taduncan@qcmortgage.com. You may also visit Quality Mortgage Services LLC on the Web at www.qualitymortgageservices.com.

news flash

continued from page 11

from 13 percent to 18 percent, which is large given such a small time period.

Revamped Ginnie Mae Buyout Policy to Enhance Loan Mod Performance Ginnie Mae has announced that it is expanding the parameters regarding loans eligible for repurchase from Ginnie Mae Mortgage-Backed Securities (MBS). Under the new policy, any modi-

will be eligible to be repurchased from Ginnie Mae pools. Additionally, the newly-modified loan can be re-pooled into MBS by Issuers. “This is one of our most important efforts this year,” said Ginnie Mae President Ted Tozer. “FHA loan performance data shows that many modified borrowers are at risk of a redefault. By requiring that high-risk nonHAMP borrowers undergo a trial payment period on the modified loan terms in order to test the borrower’s ability to repay, we hope to avoid the pattern of high re-defaults on modified loans. Given the investor concerns about pre-payment speeds, working continued on page 20

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Florida (45 percent), Michigan (36 percent) and California (30 percent). The negative equity share in the hardest hit states has improved. Over the past year, the average negative equity share for the top five states has declined from 41 percent to 38 percent. Nevada had the largest decline over the last year, with the negative equity share dropping from 68 percent to 60 percent. The reason for the Nevada decline is the high number of foreclosures that led to lower numbers of remaining negative equity borrowers. “High negative equity is holding back refinancing and sales activity and is a major impediment to the housing market recovery. The hardest hit markets have improved over the last year, primarily as a result of foreclosures. But nationally, the level of mortgage debt remains high relative to home prices,” said Mark Fleming, chief economist with CoreLogic. Negative equity significantly limits the ability of borrowers to capture the benefit of the low-rate environment. There are nearly 28 million outstanding mortgages that have above market rates and are in theory refinanceable. Twenty million borrowers with positive equity, or 53 percent of all above-water borrowers, have above market rates. Eight million borrowers with negative equity, or nearly 75 percent of all underwater borrowers, have above market rates. The disparity is even greater for those with severe negative equity. More than 40 percent of borrowers with 125 percent or higher loanto-value (LTV) ratios have mortgages with rates at six percent or above, compared to only 17 percent for borrowers with positive equity. Negative equity not only restricts refinancing, but also sales. Since the 2005 sales peak, non-distressed sales in zip codes with low negative equity have fallen 61 percent, compared to an 83 percent sales decline in high negative equity zip codes. The typical seasonal changes in sales volume in high negative equity zip codes is very muted, which indicates that non-distressed sales are being heavily impacted by the high levels of negative equity in their neighborhood, even if sellers have equity. The federal homebuyer tax credit that expired last year contributed to a spike in high LTV loans. As the housing market collapsed, underwriting began to tighten in 2008 and the share of high LTV loans (90 percent to 100 percent LTV) began to decline. However, the federal homebuyer tax credit helped propel home sales in 2009 and 2010 and led to minor spikes in high LTV FHA lending centered near the expiration of the tax credit initially in November 2009, which was then then extended to April 2010. In the span of six months in 2009, the high LTV share increased

fied loan may be repurchased after successfully completing a three-month trial payment period, if a trial period is required. This change aligns Ginnie Mae’s repurchase policy for the Federal Housing Administration (FHA) nonHome Affordable Modification Program (HAMP) high-risk loans with the current policy for FHA-HAMP loans. Ginnie Mae’s updated loan repurchase policy is designed to accommodate the recently expanded FHA trial payment requirement for modified loans. The FHA policy now requires that high-risk non-HAMP loans complete a three-month trial period before a modification becomes permanent. Loans that have completed the required three-month trial payment program

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Maximizing the Order Module in a Valuation Management Platform By David Rasmussen

As the use of valuation management platforms by lenders grows in the industry, mortgage professionals are taking advantage of their ability to automate product ordering and processing. As I mentioned in the previous ValueNation column (September 2011, page 18), a valuation management platform is a critical tool for those wanting to stay competitive and compliant in today’s evolving lending environment. The platform should be comprised of several components that work seamlessly together to promote the accuracy and efficiency of the valuation process. In this column, I will focus on the logistics of the order module. Additional components will be addressed in subsequent columns. A premium order module will be an effortless interface for placing single or batch orders and connecting users to valuation providers, be it AVM, BPO or appraisal. It should allow users to effectively manage the valuation ordering process across the entire spectrum of products. Traditionally, many departments review valuation types individually by looking at one report type for a specific need, due in part to limited resources. Recently, regulations and guidance from government bodies have recommended utilizing multiple valuation models to verify loan decisions. With accountability for both objectivity and competence measured at the individual assignment level, an order module must be dynamically scalable for regulatory compliance. The re-issued Interagency Appraisal & Evaluation Guidelines cite the importance of appraiser independence and objectivity in appraiser selection, as well as appraiser competence. Appraisers are expected to be selected for individual assignments based on their competency to perform an appraisal. Whether managing an appraiser panel internally or with vendor managers, the responsibility for ensuring appraiser independence and compliance rests with the regulated institution. An order module that only employs a straight “roundrobin” method falls short of regulatory requirements. Valuation management platforms provide the ability for users to comprehensively manage a set of vendors and deliver assignments only to those most qualified. Additionally, users can easily see which vendors consistently uphold the appropriate standards of quality in their returned valuation. The benefits of a well-tuned order module include: Order automation and objectivity Business efficiencies in processing Increased quality control (QC) and consistent decision-making Easy scalability In an order module, users should have the ability to effectively organize all active and newly completed orders, of which they can be searched continued on page 25

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Take a quick study of any sales profes- real estate agents, and many guideline sion, and you will find that the top pro- changes affect their business! Given this ducers are experts in their field and the fact, you can provide educational FHA ones with the most referral relation- presentations to agents in real estate ships. You could be one of the best offices, making them aware of how FHA mortgage loan originators (MLOs) in the affects them and their clients. By educountry, but without relationships that cating the agents, you increase their create a stream of potential clients, you professionalism and help them provide are doomed to an ongoing struggle to better service to their clients. One of the stay in the business, fighting self- biggest challenges real estate brokers defeating thoughts and the feeling that have is providing affordable and useful training to their agents. You can you’re underachieving. Zig Ziglar teaches that “you have to become the FHA resource for numerous go out and see the people.” There were offices in your area, thereby developing times in my career during which I the relationships that will provide you would spend more time at the office with the loans you need to meet your than not, struggling to reach produc- production goals. Relationships help tion goals. During those spells, Zig’s you win in any market. Have you become pretty good at prowords would always ring in my ears. cessing FHA loans, Going out and “seebut wonder how to ing the people” is a “Relationships help you generate more FHA habit that needs to win in any market.” business? Been be cultivated, nurbeaten up in tured and maintained. It needs to be a part of who you underwriting enough to know how to are as an MLO. It is, hands down, the put together the tough FHA deals? You best way to assure that you will always know by now that if you want to become a serious FHA originator and have clients. As you enter the fourth quarter of get more FHA loans, then you need to 2011, you may be giving some thought first become an expert, and then brand to your business plan for 2012. yourself as an FHA expert. And you Speaking from experience, it’s too easy know that if FHA real estate agents for MLOs to get caught up in the process don’t see you as an FHA expert, you will of planning. Planning and goal-setting not be the one they think of when they is, without question, very important, if have their next FHA buyer. But expertise and branding alone not critical. However, it’s important that you not get “paralysis of the analy- won’t get you in the door. You need a sis,” getting caught in a trap of procras- plan to make that happen. I suggest you tination, coupled with the delusion take The 360° Challenge. This is a way that you are doing something to bring for you to turn your business around in business while you pore over and 360 degrees by committing to building perfect your “plans” … all the while, relationships in a structured, deliberate buyers are out there purchasing homes way. Specifically, you are to devote without you! As you plan new ways to three, 60-min. sessions each week to attract business, remember that you building new relationships (this will always need referral relationships includes scheduling FHA presentations to create a viable, long-term and mean- for real estate offices) and rekindling ingful business. While it’s true that agents you’ve worked with in the past. If there are MLOs that pay for Internet that feels overwhelming, then start with leads, and they can certainly do well if one session a week, and before long, they have the capital invest, strong move to twice a week. Hold steady once relationships are not developed from you get to three times a week. While it may be challenging at first, this business model. you will find that, before long, it will So how does doing Federal Housing Administration (FHA) loans get you “in the door?” FHA is such a critical loan for continued on page 20

news flash

continued from page 17

with FHA to create this trial modification initiative was clearly in the best interest of borrowers, issuers, and investors.â&#x20AC;? FHA loan data shows that modified high-risk borrowers were responsible for more than half of re-defaults in Fiscal Year 2010. The majority of loan defaults occurred within three months on modified loans without a trial payment period. This new requirement for a trial payment period on high-risk mortgage loans prior to the permanent loan modification means that the loans most likely to default at an early stage will not be placed into Ginnie Mae MBS. The Ginnie Mae policy also applies to loans insured or guaranteed by the U.S. Department of Veterans Affairs (VA), Rural Development (RD), and the Office of Public and Indian Housing (PIH) when the agencies require trial payment periods for permanent loan modifications.

Mortgage Bankers Profits Per Loan Rise to $575 in Second Quarter

OCTOBER 2011

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Independent mortgage banks and subsidiaries made an average profit of $575 on each loan they originated in the second quarter of 2011, up from $346 per loan in the first quarter of 2011, according to the Mortgage Bankers Associationâ&#x20AC;&#x2122;s (MBA) Second Quarter 2011 Mortgage Bankers Performance Report. â&#x20AC;&#x153;Contrary to overall MBA industry data in which estimated production volume declined, the average firm in our study of independents and subsidiaries experienced volume growth. The firms in our study were able to more quickly adjust to a purchasefocused mortgage market environment after a significantly refi-heavy fourth quarter of 2010,â&#x20AC;? said Marina Walsh, associate vice president of industry analysis at the Mortgage Bankers Association (MBA). â&#x20AC;&#x153;At the

same time, secondary marketing gains improved as spreads between 10-year Treasuries and 30-year mortgage rates began to widen towards the end of the second quarter.â&#x20AC;? MBAâ&#x20AC;&#x2122;s Mortgage Bankers Performance Report series offers a variety of performance measures on the mortgage banking industry and is intended as a financial and operational benchmark for independent mortgage companies, bank subsidiaries and other non-depository institutions. More than 71 percent of the 310 companies that reported production data for the second quarter report were independent mortgage companies. Highlights of the report include: Average production volume was $174 million per company in the second quarter of 2011, up from $164 million per company in the first quarter of 2011. The MBA estimate for overall quarterly industry origination volume was $290 billion in the second quarter of 2011, down from $302 billion in the first quarter of 2011. The refinance share of total originations, by dollar volume, for this sample of independent mortgage banks and subsidiaries was 36 percent in the second quarter of 2011, compared to 50 percent in the first quarter of 2011. The MBA estimate for overall industry refinancing share was 62 percent in the second quarter of 2011, down from 65 percent in the first quarter of 2011. The government share of total originations, by dollar volume, for this sample of independent mortgage banks and subsidiaries was 41 percent in the second quarter of 2011, compared to 37 percent in the first quarter of 2011. Average borrower FICO scores dropped to 729 in the second quarter of 2011 from 733 in the first quarter of 2011 and 737 in the fourth quarter of 2010.

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Average loan balances remained relatively constant at $197,039 in the second quarter of 2011, from $196,456 in the first quarter of 2011. However, on a repeater-company basis, average loan balances dropped to $195,347 in the second quarter from $198,590 in the first quarter. Measured in basis points, secondary marketing gains increased to 210 basis points in the second quarter of 2011, compared to 201 basis points in the first quarter of 2011. Secondary marketing gains rose to $4,006 per loan in the second quarter of 2011, from $3,827 per loan in the first quarter of 2011. Personnel expense slightly decreased to $3,561 per loan in the second quarter of 2011, compared to $3,640 per loan in the first quarter of 2011. Total production operating expensesâ&#x20AC;&#x201D;commissions, compensation, occupancy and equipment and other production expenses and corporate allocationsâ&#x20AC;&#x201D;dropped to $5,644 per loan in the second quarter of 2011, compared to $5,837 per loan in the first quarter of 2011.â&#x20AC;? The â&#x20AC;&#x153;net cost to originateâ&#x20AC;? slightly decreased to $3,513 per loan in the second quarter of 2011, from $3,540 per loan in the first quarter of 2011. The â&#x20AC;&#x153;net cost to originateâ&#x20AC;? includes all production operating expenses and commissions minus all fee income, but excludes secondary marketing gains, capitalized servicing, servicing released premiums and warehouse interest spread. Seventy percent of the firms in the study posted pre-tax net financial profits in the second quarter of 2011, compared to 63 percent in the first quarter of 2011.

Fannie Mae Announces First Half STAR Program Servicer Results Fannie Mae has announced its Servicer Total Achievement and Rewards (STAR) Program results for the

fha insider

first half of 2011, measuring the performance of servicers in helping homeowners avoid foreclosure. Announced in February 2011, STAR provides clear expectations and specific, consistent measurements to help Fannie Mae servicers increase their focus on areas of critical importance to Fannie Mae. The program is designed to encourage improvements in customer service and foreclosure prevention outcomes for homeowners by rating servicers on their performance in these areas. â&#x20AC;&#x153;We are committed to helping stabilize the housing market by requiring servicers to prevent foreclosure whenever possible,â&#x20AC;? said Leslie Peeler, VP for Servicer Portfolio Management at Fannie Mae. â&#x20AC;&#x153;The STAR program helps us evaluate and hold servicers accountable for measurable, consistent results in preventing foreclosure. Servicers who achieve the highest ratings are leading the way in providing assistance to homeowners who are having difficulty making their mortgage payments.â&#x20AC;? As of the end of the second quarter, the following servicers in Peer Groups One and Two are on track to achieve at least a 3 STAR rating for 2011: Peer Group 1 (consists of a total of 11 servicers): GMAC Mortgage LLC (Ally Bank), CitiMortgage, Everhome Mortgage, Wells Fargo Peer Group 2 (consists of a total of 10 servicers): Fifth Third Bank, The Huntington National Bank, HSBC Mortgage Corporation (USA), Aurora, Regions Bank and Central Mortgage Company. Peer Group 3 (consists of a total of 13 servicers): Results for this peer group will be released in the next 30 days. These results indicate that the servicers referenced above are producing better results than their peers on the STAR Performance Scorecard. Full year results will incorporate the results of the operational assessments. STAR ratings are based on a 5 STAR scale. Servicers have achieved an overcontinued on page 28

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become second nature. Performing results-oriented actions is what helps you achieve your goals, and thatâ&#x20AC;&#x2122;s the premise of the 360Â° Challenge. If you have the desire but not the material, TheFHAOriginator.com can help. This is a service I created for FHA loan specialists, providing access to ready-made, easy-touse FHA presentations at an extremely affordable rate per office. If you seriously apply yourself to The 360Â° Challenge, you can significantly change your production levels and enjoy the fruits of your commit-

ment! Donâ&#x20AC;&#x2122;t wait until January to implement this strategy â&#x20AC;Ś get a jump start on 2012 and start the 360Â° Challenge today! 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 LoanToolbox.com and creator of The FHA Originator, a monthly FHA newsletter. Jeff may be reached by phone at (248) 403-8181 or visit www.MortgageSeminars.com.

• Multiple National Lenders • RESPA/Compliance Training

• Weekly Production Training • Multiple Warehouse Lines

“My experience with Frost Mortgage has been “as advertised.” Our recent MasterMind Meeting in Albuquerque was one of my best learning experiences I’ve had since entering the mortgage business.” - Loren Winzeler, Santa Rosa, CA

We picked a company who shared our "core values" of ﬁnding the best mortgage solutions for our clients. Frost has what we need. - Roxanne Baggett, Lake Charles, LA

“Greg promised to put an Underwriter in my ofﬁce when I hit my numbers. I did, he did, and we couldn’t be happier. This local decision making ability gives my team a decisive advantage over our competition.” - Robert Shaffer, Lancaster, CA

“We were plugging along at $1.5M a month for years. Greg offered to help me recruit and has joined me in Nashville for several days in the the last few months. Our branch production is up 300%.” - Shane Atwell, Nashville, TN

“In my 7 years of Branch Management I have never seen such a well oiled management team as I have working with Frost. I can’t wait to see my team’s production numbers in 2011!” - Mark Sipe, Cincinnati, OH

http://FrostMortgage.com/NMP Regulation and Licensing Department, Financial Institutions Division #621 • Branch License #00621

OCTOBER 2011

If you would like to learn more about our BranchPartner business model, please inquire:

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After eight months of researching dozens and dozens of potential Lending Partners, I found that Frost had the best tools out there. - Daren Crockett, Pocatello, ID

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 www.namb.org. 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 Friday-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 0 a.m.-5:00 0 p.m. ........Registration n Open

10:00 0 a.m.-Noon ..............Committeee Meetings Some or all of the following NAMB Committees could meet during these times … additional details will be posted at a later date: The Government Affairs Committee, Membership Committee, Ethics Committee, By-Laws and Education Committee, Communications Committee and the Finance Committee. 1:00 0 p.m.-4:00 0 p.m. ..........NAMB B Delegatee Councill Meeting 0 p.m.-6:00 0 p.m. ..........Networkingg Event 4:00

Sunday, December 4

OCTOBER 2011

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8:00 0 a.m.-6:30 0 p.m. ..........Registration n Open 8:30 0 a.m.-9:30 0 a.m. ..........NMLS—FHA A (Onee Hour) FHA course to be instructed by David Luna of Mortgage Educators. 9:30 0 a.m.-9:45 5 a.m. ..........Break 9:45 5 a.m.-12:45 5 p.m. ........NMLS—Federall Law w (Threee Hours) Federal Law course to be instructed by David Luna of Mortgage Educators. 12:45 5 p.m.-2:00 0 p.m. ........Networkingg Lunch 2:00 0 p.m.-6:00 0 p.m. ..........Expo o Halll Open n & Networkingg Reception

Monday, December 5 8:00 0 a.m.-4:00 0 p.m. ..........Registration n Open 8:30 0 a.m.-10:30 0 a.m. ........NMLS—Reversee Mortgagee (Two o Hours) Reverse Mortgage course to be instructed by David Luna of Mortgage Educators. 10:30 0 a.m.-10:45 5 a.m. ......Break 10:45 5 a.m.-12:45 5 p.m. ......NMLS—Ethicss (2 2 Hours) Ethics course to be instructed by David Luna of Mortgage Educators. 12:45 5 p.m.-2:00 0 p.m. ........Networkingg Lunch 2:00 0 p.m.-3:00 0 p.m. ..........Presentation n From m Suee Woodard d & Jim m McMahan, Mortgagee Successs Source 3:00 0 p.m.-3:15 5 p.m. ..........Break 3:15 5 p.m.-4:15 5 p.m. ..........Presentation n From m Suee Woodard d & Jim m McMahan, Mortgagee Successs Sourcee (continued) 4:15 5 p.m.-4:30 0 p.m. ..........Grand d Prizee Drawingg forr a Trip p to o Hawaii 4:30 0 p.m.-6:30 0 p.m. ..........NAMB B Board d Meeting

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 Cancellation and refund policy: Notice of cancellation must be made in writing (no exceptions) and sent to registration@kinsleymeetings.com 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 (www.mgmgrand.com). 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 http://goo.gl/kjd3b. 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 registration@kinsleymeetings.com or visit www.nambwest.com.

Three Reasons Why Short Sale Real Estate Agents Should be Your Best Friend

Mortgage Brokers Network "The Mortgage Industry's Matchmaker"

By Erik Wind

We’ve all been there. We helped our borrower through the mortgage process, the appraisal came in and the value is right. The seller is ready, willing and motivated. aThe only problem … “it’s a short sale.” Those four words can make any seasoned originator cry. So then why am I suggesting that you focus on adding more short sale real estate agents to your referral network? I have three good reasons and they all lead to increasing your business.

Short sales are on the rise like never before.

closure, a HUD-1, BPO and numerous other documents. Do you think you can help write these documents? Why not, many of the documents associated with a short sale proposal are just like the ones you complete for a regular mortgage. In fact, there is software out there you can share with the agent to make writing this proposal even easier. When you empower a real estate agent to negotiate their own short sales, you increase their gross commission earned, and of course, you position yourself as the point person for the mortgages their buyers will need.

Every short sale listing can lead to seven transactions!

Several Mortgage Branch Companies to Choose From with Banker and/or Broker Status! AL, AK, AZ, AR, CA, CO,CT, DE, FL,GA, HI, ID, IL, N, IA, KS , KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, DC, WV, WI and WY.

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It sounds crazy, but it makes perfect sense. Phil Tesoriero is a short sale expert based on Long Island, N.Y. He reports that because his short sale listings are priced to market, they appear as a bargain in comparison to the higher priced listings placed by sellers with unrealistic expectations. “Due to the fact that my listings are usually priced less than competing listings”, said Tesoriero, “I get quite a few calls from buyers. Whether or not they buy that listing, my team is qualifying these buyers with my mortgage person, and we’re showing them other properties in the neighborhood. That one listing can You will become an yield me seven transactions. Working indispensable resource short sales pays dividends.” to real estate agents. Phil’s mortgage originator greatly One of the most important components to a successful short sale is a benefits from those dividends, as comprehensive, properly-prepared he’s qualifying buyers for not just and well-executed short sale propos- short sales, but all other kinds of al. Unfortunately for most agents, transactions. With trends as they are, short paperwork is not their strong point. To compensate for this, agents refer sales aren’t going anywhere. In fact, this part of the transaction to attor- they’re getting more mainstream neys or negotiators, reducing their every day. Don’t wait until they are overall gross commission earned a part of someone else’s business. Make it part of your business today! (GCE). A properly-prepared and executed If you start taking steps to work short sale proposal includes more with short sale agents now, you’ll than just the buyer’s qualifications. have a giant head start on your It also requires a detailed income competition. and expense worksheet from the seller to demonstrate how they cannot E r i k W i n d i s c o - f o u n d e r o f Shortafford their mortgage, a financial SaleSpeedway. He may be reached by analysis showing that a short sale is phone at (516) 882-6930 or e-mail at in the bank’s best interest over fore- erik@ewdc.net.

Mortgage Branch Opportunities

NationalMortgageProfessional.com

As heavily reported in the press, the banks have the foreclosure engine in gear and are ready to roll. After a temporary delay questioning the legality of many foreclosures, banks were forced to re-examine their foreclosures processes. The good news is this made the short sale process move along faster than ever before. The number of real estate agents who now realize they can charge a higher commission on a short sale is growing. You should plan now to capitalize on this, capture those agents and have them as key components of your network. Many are predicting that in 2012, 50 percent of all homes will be underwater. Short sale agents are preparing for this and will be an ongoing source for mortgage originations for months, if not years, to come.

“One of the most important components to a successful short sale is a comprehensive, properly-prepared and well-executed short sale proposal.”

By David Lykken

Communication and Leadership (Part II)

OCTOBER 2011

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Communication and leadership are so intertwined that you cannot talk about one without talking about the other. As implied by the words “Part II” in the title above, this month’s article is a continuation of last month’s article on communication, which again, is the sixth “C” (characteristic) in the 7-Cs of Leadership. As I said in last month’s article, the definition of communication (the exchange of information) sounds simple enough, but for most of us, it only takes listening to a few arguments to realize that it is about as complicated of a topic as any on the planet. And further complicating communications these days are the new technologies out there such as texting and social media posts. Again, there are various forms of communication available to us today, but things get crazy when you consider the amount of new methods available. In spite of all these new various forms and methods of communication, studies indicate that we are doing a worse job of communicating effectively than ever before. How can this be? The answer is that we are finding it more difficult to “relate” and “connect” with each other in spite of all the forms and methods of communicating that we have at our disposal. While a book could be written about this, the bottom line all of this is that it is having a profound impact on our business dealings and has alarming implications as a society unless we turn this around. So, how can we turn this trend around and improve our ability to communicate with each other more effectively? The answer starts with how well we “relate” to each other. The degree to which we can successfully relate to each other is the same degree to which we will succeed (or fail) at whatever we, collectively as a company, set out to do.

What I have found most effective in helping people learn how to relate better to each other is to start with an overall understanding of the four personality types … the melancholic “social worker” type, the sanguine “cheerleader” type, the phlegmatic “accountant-engineer” type or the choleric “army general” type. Take a moment to look over the diagram to the right. Most of us have a dominant personality type and a sub-dominant. For me, my dominant personality type is sanguine and my sub-dominant is choleric. The dominant type is who or how you are most of the time and the sub-dominant is where you go in times of stress or if you are feeling pressure. Some folks live their entire professional lives and their sub-dominant personality type because they feel they need to make an adjustment for the position they have found themselves. This could possibly explain why there are so many successful people not experiencing job satisfaction that they otherwise could. As the saying goes, “Find a job doing what you love to do (that which aligns with your personality type) and you’ll never work another day of your life.” For those who might think this topic is too much of an oversimplification on an otherwise complicated topic, I’d merely countered by saying that we have to start somewhere and a great place to start is understanding who we are and how we were act and respond to others. If you agree, I recommend you start by doing two things: First, I want you to identify the personality type that you most closely identify with. For some of us, we can almost immediately relate more to one personality style or another. If you struggle with identifying your personality type, then I would recommend you ask those close to you—family or friends—to help you.

A Melancholic person is a someone who is a more self-less, kind, tender hearted, quieter, sensitive, takes on causes of others and more concerned about right & wrong.

A Phlegmatic person thinks things through, is calm, unemotional, consistent/even temperment, rational, curious, and observant, making them good administrators and diplomats.

Second, take a moment and think of someone with whom you find it a struggle to relate to. Another way to say it is to ask you this question: Is there someone who you work with that drives you up the wall or seems to be from another planet For most of us, someone comes to mind almost immediately. However, if that doesn’t work, consider your spouse. As the expression goes, “opposites attract.” That certainly is the case with my wife and I as we are polar opposites. I’m a classic sanguine personality type and my wife is more of a phlegmatic personality type. At times, it

A Sanguine person is generally light-hearted, fun-loving, a people person, loves to entertain, spontaneous, confident and can be more selfish. They can lack focus and be impulsive.

A Choleric is a goaloriented, ambitious, very self-confident in what he believes the facts to be, wants info in bullets “short & to the point”, can be a control freak... has a very dominate personality.

seemed like a fatal attraction. We jokingly say that in the early days of our marriage, we had our marriage counselor on our speed dial … that is until we began to grow in our understanding of how to communicate based upon what was important to each other with respect to each other’s personality type. While the level of relationship and commitment is different in marriage, there are similarities to a cohesive and well-managed company. It starts and ends with how well two or more people relate to each other and how they handle conflict. Consider for a moment the

After the war, he dedicated himself to studying this phenomenon which he later applied to people in the workplace. Side note to all you “Hook’em Horns” fans out there, Dr. Birkman completed his doctoral dissertation at the University of Texas by writing his “Test of Social Comprehension” that later became known as The Birkman Method. Dr. Birkman’s company, Birkman & Associates, is the provider of the industryleading personality assessment that facilitates team building, executive coaching, leadership development, career and talent management and interpersonal conflict resolution. I would encourage you to learn more by visiting his Web site, Birkman.com. The beginning of strong leadership is to develop an understanding of these four personality types and then study each for the purpose of learning how to relate more effectively to the other personality types. For example, if you’re a choleric personality type explaining the benefits of some new loan program, you are introducing to a group of sanguine loan officers (LOs), you will have better success if you communicate in an upbeat and positive manner, telling them about how “everyone” is using this program and making a lot of money with it. Conversely, a sanguine personality type LO who is about to meet with a phlegmatic type underwriter would do well to slow down and present their case with a more subdued and even temperament, presenting the facts in a more rational and analytical manner. Again, if you read and study each of the four personality types you quickly begin to create your own scenarios of how you need to adjust to better relate to that other personality style. If you are one of the ones reading this that is pooh-poohing this concept, consider this. There is a company in Austin, Texas that has developed technology used by large call centers. This technology predicts the personality type of an inbound caller within milliseconds of the caller speaking their first words. This same tech-

nology then routes the caller to someone with a similar personality type. In other words, it routes a sanguine and caller with a sanguine customer service representative at the call center. In this way, a caller getting routed to someone like themselves increases the probability of a successful outcome, regardless of the situation. Can you begin to see how much more effective a company could be if their personnel at all levels were trained in how to quickly recognize another’s personality and make adjustments to the way they interact with that person? This will only happen if the leaders of each company embrace this personally, and then push it throughout their entire organization. If you e-mail me, I will send you an electronic copy of the “Understanding the Four Personality Types” diagram. Also, please direct all questions and/or comments to dlykken@mbs-team.com. I look forward to hearing from you.

valuenation

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 dlykken@mortgagebankingsolutions.co m or dlykken@mbs-team.com.

To listen to author David Lykken’s online radio show, “Lykken on Lending,” log on to www.lykkenonlending.com.

continued from page 18

based on specific criteria to review their status, as well as to reassign, cancel or modify as appropriate. One of the most powerful features available in select systems is an order dashboard. It gives a high-level view of all the activities surrounding order placement and order management. Including the initiation, processing assignment and delivery of individual and batch valuation orders, the dashboard should also provide downloadable charts and graphs of data. As valuation providers feel the trickle-down from the secondary market, it is increasingly important to quickly comply with investor and government regulations and prepare operations for additional changes that will come down

the road. Benefits of a valuation management platform for mortgage professionals in this regard are immense. Users are able to streamline business operations by automating cumbersome valuation processes, as well as maintain quick access to data that will help to increase efficiency of processing and completing orders for clients. Organizations that do not embrace technology and find the right tools to fit their business are going to fall behind and not be able to effectively compete in the current environment. David Rasmussen is senior vice president of operations at Veros Real Estate Solutions. For more information, call (714) 415-6300 or visit Veros.com.

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personality type that is most common amongst sales/loan originators. While this is not an absolute, it is far more common to find the sanguine personality types populating the sales ranks of most companies. They are highly relational, extraverted and fun to be around. Not surprisingly, the personality type that is most commonly found amongst loan processors, underwriters and funders is that of the phlegmatic personality type. They are more process-oriented, analytical and logical. Again, I would refer you to the diagram, and without sounding too stereotypical, we see more choleric command-and-control personality types running companies or in management positions. Choleric types are uniquely positioned in the diagram to relate well to both the sanguine and phlegmatic types at least in theory. That being said, let me emphatically say that you DO NOT have to be a choleric personality type to be an effective leader. If you study leadership, you will find that there are successful leaders in every personality group. While it’s important to understand your personality style, it is equally or possibly more important that you understand the personality type of other and develop skills to relate to them genuinely and effectively. The hardest people to relate to are those who are confused about who they are. I would refer you back to what I said about those who operate in their subdominant personality type without realizing. This might explain why some people project themselves to have one personality type publicly, but in reality, have a completely different personality type. That is why I recommend using a higherend personality assessment tool to determine who you really are. There are many that exist, but the one I like the best is the Birkman Method … more on this in a minute. Keep in mind that this article and this series of articles (The 7-Cs [characteristics] of Leadership) focuses on leadership and leadership development. Therefore, it is essential that we incorporate a thorough understanding of these four personality types if we ever hope to improve our own leadership skills or develop ourselves to be the future leaders of tomorrow. Again, the degree to which you become familiar with other personality types is the same degree to which you have a better chance of relating to a greater number of people. There is someone I want you to meet … his name is Dr. Roger Birkman, a man who is in his 90s and is still an active consultant. He is an inspiration to me for many reasons, one of which is that he still consults on social and interpersonal interactions involving people in the workplace. The basis for his life’s work began when he piloted a B-17 bomber in World War II. While on bombing missions, he observed how the group of men flying with him on each mission all observed the same battle scenario at the same time and yet each arrived at a completely different conclusion. “How can this be?” Dr. Birkman thought.

The Value of Becoming NAMB-Certified By John L. Stearns, CMC, CRMS

am often asked by mortgage professionals, “Why should I become NAMB-certified?” and “What does becoming certified do for me?” Let me explain the reasons why the Certified Mortgage Consultant (CMC), Certified Residential Mortgage Specialist (CRMS), and the General Mortgage Associate (GMA) programs were developed and why many of your colleagues have led the way to becoming certified by the National Association of Mortgage Brokers. Many years ago (and before we experienced the industry problems we face today), NAMB and its leaders determined that the association needed to develop a program that encouraged mortgage professionals to meet the highest level of professional knowledge. With extensive research by industry professionals, the CMC, CRMS and GMA designations were developed for individuals who wanted to stand out from their peers and prove their dedication to the industry. To obtain a CMC and CRMS certification, a mortgage professional must meet certain requirements of experience and knowledge to practice mortgage brokering, as well as pass a written exam. In order to gain a GMA certification, no prior work experience or course work is required. However, the applicant must have a high school diploma or GED and pass a written GMA exam. Attaining an NAMB certification is not easy, but with hard work and determination it can pay off. In fact, according to a recent survey of industry professionals, earning power of mortgage professionals who have an NAMB certification is significantly greater than those who are not certified! Mortgage professionals have also shared with me the following reasons that they receive a NAMB certification:

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1. To differentiate themselves from other mortgage professionals. Once you become NAMB-certified,

inform your clients and peers of this great accomplishment and encourage them to choose you over the rest of your competition. 2. To promote my accomplishments within the industry and my clients. NAMB provides certified professionals with various promotional and marketing materials including, certificates, lapel pins, press release templates, logos and much more. 3. To take advantage of the many benefits NAMB offers. In addition to receiving materials, NAMB-certified professionals receive discounts to NAMB conferences and events and are featured in the “Find a Broker” section of the NAMB Web site, NAMB.org. 4. To exemplify professionalism. To maintain your certification, you must participate in 30 hours of continuing education courses over a three-year period. These requirements ensure that NAMB-certified professionals continues to keep up with the ever-changing mortgage industry. 5. To network with other certified professionals. After you gain certification with NAMB, you have access to new professional relationships. This allows you to refer your valued customers to other dedicated mortgage professionals and vice-versa. 6. To be identified as a leader. The CMC, CRMS, or GMA certification shows that you are a leader and you strive to be the best in your industry. It is now more important than ever for mortgage professionals to demonstrate their commitment to their profession. By

meeting certain requirements and adhering to a strict code of ethics as well as best business practices, NAMB-certified professionals represent hard work and prestige. Show your colleagues and your clients just how much you value your industry by becoming NAMB-certified today! For more information on NAMB’s certification programs, contact certification@namb.org. John L. Stearns, CMC, CRMS is a senior mortgage banker with American Fidelity Mortgage located in Mequon, Wis. and has been in the residential mortgage business since 1993. John also serves as 2011-2012 Chair of the NAMB Certification Committee. He may be reached by phone at (262) 478-1154 or email jstearns@afmsi.com.

“… according to a recent survey of industry professionals, the earning power of mortgage professionals who have an NAMB certification is significantly greater than those who are not certified!”

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all satisfactory rating on operational assessments by achieving a 3 STAR rating or above: Three STARs indicates that a servicer has accomplished at least median performance relative to peers. Four STARs signifies the servicer is on track to meet Fannie Mae targets and is performing above median performance. Five STARs represents superior performance wherein the servicer is meeting or exceeding Fannie Mae’s targets. Servicers are categorized into three peer groups based on the number of Fannie Mae loans they service. Each servicer is scored within their peer group using the Servicer Performance Scorecard, which provides monthly performance snapshots and trends for 10 key performance indicators. Those indicators are heavily weighted toward measuring the servicer’s impact on helping distressed homeowners by delivering sustainable solutions. Under the STAR Program, Fannie Mae is also conducting operational assessments across key business processes performed by the servicer. The outcomes from the operational assessments conducted thus far and the servicer’s results on the Servicer Performance Scorecard will drive the overall annual STAR rating. Under the program, servicers that do not perform at a median level OR that do not receive satisfactory results on operational assessments do not receive a STAR rating.

closure. The percentage of loans in the foreclosure process at the end of the second quarter was 4.43 percent, down nine basis points from the first quarter and 14 basis points lower than one year ago. The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 7.85 percent, a decrease of 25 basis points from last quarter, and a decrease of 126 basis points from the second quarter of last year. The combined percentage of loans in foreclosure or at least one payment past due was 12.54 percent on a non-seasonally adjusted basis, a 23 basis point increase from last quarter, but was 143 basis points lower than a year ago. “While overall mortgage delinquencies increased only slightly between the first and second quarters of this year, it is clear that the downward trend we saw through most of 2010 has stopped. Mortgage delinquencies are no longer improving and are now showing some signs of worsening,” said Jay Brinkmann, chief economist of the MBA. “The good news is the continued decline in long-term delinquencies, those mortgages that are three payments or more past due. The bad news is that drop is offset by an increase in newly delinquent loans one payment past due.” On a seasonally adjusted basis, the overall delinquency rate increased for all loan types. The seasonally adjusted delinquency rate increased 15 basis points to 4.74 percent for Delinquencies See 8.44 prime fixed loans and increased 51 basis points to 11.76 percent for Percent Quarter Over prime adjustable-rate mortgage Quarter Rise The delinquency (ARM) loans. For sub-prime loans, the rate for mortgage delinquency rate increased 58 basis loans on one- to points to 22.62 percent for subprime four-unit residen- fixed loans and increased 87 basis tial properties points to 27.18 percent for sub-prime increased to a sea- ARM loans. FHA and VA loans also sonally adjusted saw increases, with the delinquency rate of 8.44 percent of all loans out- rate increasing 59 basis points to standing as of the end of the second 12.62 percent for FHA loans and quarter of 2011, an increase of 12 basis increasing 12 basis points to 7.05 points from the first quarter of 2011, percent for VA loans. and a decrease of 141 basis points The percentage of loans in foreclofrom one year ago, according to the sure, also known as the foreclosure Mortgage Bankers Association’s (MBA) inventory rate, decreased nine basis National Delinquency Survey. The points overall to 4.43 percent. The non-seasonally adjusted delinquency foreclosure inventory rate for prime rate increased 32 basis points to 8.11 fixed loans decreased three basis percent this quarter from 7.79 percent points to 2.56 percent. The rate for last quarter. prime ARM loans decreased 37 basis The percentage of loans on which points from last quarter to 9.16 perforeclosure actions were started dur- cent. The rate for sub-prime ARM ing the second quarter was 0.96 per- loans decreased three basis points to cent, down 12 basis points from last 22.23 percent and the rate for VA quarter and down 15 basis points loans decreased nine basis points to from one year ago. The delinquency 2.30 percent. The rate for FHA loans rate includes loans that are at least decreased 11 basis points to 3.24 perone payment past due but does not cent. Sub-prime fixed loans saw an include loans in the process of fore- increase of 48 basis points to 11.01

percent, which sets a record high in the survey for three straight quarters. The non-seasonally adjusted foreclosure starts rate decreased six basis points for prime fixed loans to 0.62 percent, 14 basis points for prime ARM loans to 1.82 percent, 12 basis points for sub-prime fixed to 2.44 percent and five basis points for subprime ARMs to 3.62 percent. The foreclosure starts rate decreased 20 basis points for FHA loans to 0.73 percent and 18 basis points for VA loans to 0.55 percent. “Mortgage loans that are one payment, or 30 days, past due are very much driven by changes in the labor market, and the increase in these delinquencies clearly reflects the deterioration we saw in the labor market during the second quarter,” said Brinkmann. “Weekly first-time claims for unemployment insurance started the quarter at 385,000 but finished the quarter at 432,000. The unemployment rate started the quarter at 8.8 percent but climbed to 9.2 percent by the end of the quarter.” Given the challenges in interpreting the true seasonal effects in these data when comparing quarter to quarter changes, it is important to highlight the year over year changes of the nonseasonally adjusted results. Compared with the second quarter of 2010, the foreclosure inventory rate increased 20 basis points for prime fixed loans and increased 211 basis points for sub-prime fixed loans, while the foreclosure inventory rate decreased 100 basis points for prime ARM loans, 76 basis points for subprime ARM loans, 38 basis points for FHA loans, and 20 basis points for VA loans. Over the past year, the non-seasonally adjusted foreclosure starts rate decreased nine basis points for prime fixed loans, 14 basis points for prime ARM loans, 29 basis points for FHA loans and 15 basis points for VA loans. The foreclosure starts rate increased 14 basis points for subprime fixed loans and increased 23 basis points for sub-prime ARM loans.

Wells Fargo Tops Commercial Servicers With $442.9 Billion in Loans Serviced in the First Half of 2011

The Mortgage Bankers Association (MBA) has released its mid-year ranking of commercial and multifamily mortgage servicers as of June 30, 2011. On top of the list of firms is Wells Fargo with $442.9 billion in U.S. master and primary servicing, followed by PNC Real Estate/Midland Loan Services with $346.5 billion, Berkadia Commercial Mortgage with $184.2 billion, Bank of America Merrill Lynch with $123.7 billion and KeyBank Real Estate Capital with

$107.7 billion. PNC Real Estate/Midland Loan Services serviced the most loans in the first half of 2011, with a whopping 84,359 loans currently being serviced, followed by Wells Fargo with 39,613 loans serviced, and Berkadia with 24,804 loans serviced. Wells Fargo, PNC/Midland, Berkadia, Bank of America Merrill Lynch and KeyBank are the largest master and primary servicers of commercial/multifamily loans in U.S. CMBS, CDO and other ABS; PNC/Midland, MetLife, GEMSA Loan Services, Prudential Asset Resources, and Northwestern Mutual are the largest servicers for life companies; and PNC/Midland, Wells Fargo, Berkadia and Deutsche Bank Commercial Real are the largest Fannie Mae and Freddie Mac servicers. PNC/Midland ranks as the top master and primary servicer of commercial bank and savings institution loans; GEMSA the top servicer of credit company, pension funds, REITs, and investment funds loans; PNC/Midland the top FHA and Ginnie Mae loan servicer; Wells Fargo the top servicer for loans held in warehouse facilities; and Berkadia the top servicer for other investor type loans. The MBA also asked firms to provide information about loans on which they are the “named special servicer,” where the firm stands ready to service the loan should special problems develop, such as delinquency. The leading named special servicers were LNR Partners Inc., CWCapital LLC & CWCapital Asset Management and C-III Asset Management LLC. T h e M B A ’ s M i d - Y e a r Commercial/Multifamily Mortgage Servicer Rankings also collected servicing volumes for loans on commercial/multifamily properties located outside the United States. Hatfield Philips International, an LNR Property Company, ranks as the largest master and primary servicer of non-U.S. commercial/multifamily mortgages, followed by Deutsche Bank, PNC/Midland, GEMSA and Manulife Financial/John Hancock.

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

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business model in a challenging economy. As a veteran of the mortgage brokerage industry I understand the benefits of transitioning from being a mortgage broker to banking – and in light of new federal financial regulations the time to make that switch has never been better.” Prior to launching Covenant, Hardin spent a decade at Hawthorne Financial where he served as EVP and chief banking officer for Hawthorne Savings, and president and CEO of HFS Financial Services. Hardin is also a member of the board of Pacific Premier Bank. At Hawthorne Financial, Hardin’s responsibilities included income property, construction, residential, community and commercial lending. He also was involved in marketing, appraisal, loan servicing, and was a member of the executive loan committee.

compliance. Our suite of auditing and due diligence services further supports these cost-effective efforts.” Neil Garfinkel, named partner of Abrams Garfinkel Margolis Bergson LLP (AGMB) and the head of its real estate and banking practices, and Michael G. Barone, head of regulatory compliance for AGMB, have accepted positions as directors of Lenders Compliance Group Inc. (LCG). “After working with Jonathan Foxx on a variety of matters through the years it is clear that Jonathan and LCG

provide a wealth of information and unprecedented access to mortgage risk management support within the mortgage banking and mortgage brokerage industries,” said Garfinkel. “The procedures and requirements for originating residential mortgage loans are experiencing enormous changes and will continue to do so for many years to come. This alliance ensures that AGMB and its clients are well versed and represented, with respect to all regulatory compliance issues affecting their businesses. We are excited to bring together our resources and provide the mortgage industry with ‘best practices’ solutions that strengthen our clients and the industry.”

Byte Software Forms Compliance Partnership With Docu Prep Docu Prep, a nationwide closing document, initial disclosure, and electronic delivery services company, has announced a partnership with Byte Software, a provider of loan origination software (LOS) for banks, credit unions and mortgage bankers and brokers, offering their services to Byte Software’s customers. This completed integration is available now allowing for easy access to Docu Prep from within BytePro Standard or BytePro Enterprise, continued on page 30

Lenders Compliance Group Joins Forces With Leading National Law Firm

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Lenders Compliance Group Inc. (LCG) and Abrams Garfinkel Margolis Bergson LLP (AGMB) have Photo credit: Bananastock announced a strategic alliance to offer mortgage risk management guidance to the mortgage industry. Together, LCG and AGMB will build on existing tools, processes, risk assessment analyticals, and resources to provide a “best practices” approach to residential mortgage compliance. Both firms offer regulatory guidance to members of the real estate and banking industries. LCG provides a suite of services for all areas of mortgage banking, such as loan audit analytics, research, regulatory compliance guidance, loan origination channel and product development, mortgage quality control (QC), and due diligence reviews. “Abrams Garfinkel is a well-respected leader in providing legal and regulatory counsel,” said Jonathan Foxx, president and managing director of LCG. “The mortgage banking and mortgage brokerage industries have needed appropriate, affordable resources to implement compliance solutions that reflect reliable and accurate best practices. So this kind of alliance is somewhat unique to mortgage banking and mortgage brokerage. It offers a ‘best practices’ approach for our respective clients: top legal talent at AGMB who are experienced in mortgage banking and mortgage brokerage combined with top risk management professionals at LCG who are experienced in all areas of regulatory and mortgage banking

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the hosted or non-hosted version. Byte Software users can order initial disclosures or closing documents; as well as other business solutions that Docu Prep offers. They have a vast array of products to make the mortgage professional’s loan process more streamlined by providing secure electronic delivery tools, loan analysis testing, bar-coding and dynamic selection of documents. BytePro Enterprise has a fully SQL database offering comprehensive indepth mortgage calculations built into the program. The software is ready “out of the box” or it can be fully customizable including automation to meet the unique mortgage business processes of various companies. It includes a back office module for lenders to sell loans on the secondary market for either best efforts or mandatory delivery. “We are very excited about this integration,” said Docu Prep Senior Programmer Brian Ashton. “It will allow Byte customers the ability to use BytePro as their single source database eliminating the need for gap screens, document selection, or additional input which will make them more efficient end-to-end saving them time and money throughout the process.” Docu Prep and Byte Software each have more than 20 years of experience working closely with mortgage industry leaders. This partnership provides compliant documents nationwide and advanced productivity LOS features enabling clients to close more loans in less time. “Because our documents are dynamically generated we can customize any package on the fly which allows BytePro customers a fully customized solution to fit their exact needs,” said Dorothy Urborm, Docu Prep’s senior document analyst.

Residential Lender Platinum Home Mortgage Launches New Correspondent Lending Division Residential mortgage lender Platinum Home Mortgage Corporation has announced the launch of its new correspondent lending division that will specialize in renovation lending. Led by division vice president Jane C. King and assistant vice president and operations manager Michael Young, the Albany, N.Y.-based correspondent lending division will serve retail mortgage lenders in the contiguous 48 states. Platinum Home’s correspondent lending division will specialize in government and conventional renovation financing programs with special emphasis on FHA 203(k) and FHA 203(k) Streamlined programs. They

also offer the Fannie Mae HomePath Mortgage and HomePath Renovation Mortgage, along with a more traditional product menu. “Our correspondent lending division is designed as a resource for our residential lending partners to add more delivery options and to open the doors to more production,” said William W. Giambrone, chairman and chief executive officer of Platinum Home Mortgage. Prior to joining Platinum Home Mortgage, King and Young served in similar capacities at Freedom Renovation, a division of Freedom Mortgage. King comes to Platinum Home Mortgage with more than three decades of renovation lending industry experience. Young has more than 20 years of experience.

REO Allegiance and Atlas REO Partner on Distressed Property Product REO Allegiance has announced that it has been chosen as a premier inspection service provider for Atlas REO Services. The new program goes well beyond the services traditionally offered by asset management firms. “Using third-party field inspection companies is a part of our comprehensive national field inspection program,” said Brian Devlin, property operations manager at Atlas REO. “REO Allegiance has been engaged to perform services for some time. When we needed a new process for field inspections, they were eager to help us develop the new program. The company is very willing to take on new challenges and its executives have an amazing ability to adapt to the needs of the changing market.” Under the new program, Atlas REO regularly orders comprehensive inspections on a representative sample of properties that they are contracted to sell in markets across the country for servicers or investors. Firms like REO Allegiance then investigate and report on the property condition, including client specific requirements, property upkeep, curb appeal, and a range of marketability and compliance areas. By streamlining this process, quickly processing results and relaying that information back to its agents and preservation partners, the company has found that it can move properties back into the market more quickly, saving its customers time and money. “Atlas’s field inspection program is exceptional,” said Lisa Sadaoui, president and chief executive officer of REO Allegiance. “Consistent inspections head off potential problems and ensure that all client specific guidelines have been met and that the property is in

show-ready condition, which helps to drive sales. By being proactive, Atlas REO consistently achieves high scores from their clients on property condition and maintenance. We’re proud to be part of a process that is dedicated to providing clients with added value.”

New Equifax and Interthinx Partnership Provides Increased Underwriting Transparency

HOPE LoanPort has announced that it will partner with the state of Maryland and mortgage servicer GMAC Mortgage (GMACM) on a direct-to-consumer foreclosure mediation portal. GMACM is funding development of the portal and will be the first mortgage servicer to use it. The portal, scheduled to go live in October 2011, will be the first statewide program in the nation to allow homeowners and servicers to exchange documents electronically prior to foreclosure

mediation. Maryland state law provides homeowners who receive a notice of foreclosure the opportunity to meet with their servicer and a mediator to discuss alternatives to foreclosure. A homeowner has 25 days after receiving a notice of foreclosure to “opt-in” to foreclosure mediation. HOPE LoanPort has also partnered with the state of Maryland to provide a Web-based portal for Maryland homeowners working with housing counselors to apply for unemployment assistance through Maryland’s Emergency Mortgage Assistance (EMA) program. “We are thrilled that both GMAC Mortgage and the state of Maryland are going to use HOPE LoanPort for this important initiative,” said Larry

Gilmore, president and chief executive officer of HOPE LoanPort. “For the first time, at-risk homeowners will be able to upload all of the documents necessary for foreclosure mediation without lost paperwork and with improved communication.” By developing a Web-based mediation solution for both the state of Maryland and mortgage servicers such as GMACM, HOPE LoanPort will offer the following benefits to homeowners: Easier document exchange with mortgage servicers. Electronic submission of all necessary documents for mediation. Faster access to assistance from continued on page 32

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Equifax and Interthinx have announced an expansion of their existing relationship to Photo credit: Creatas Images give financial institutions unprecedented visibility into the underwriting process. Now, Interthinx clients can seamlessly access The Work Number’s fully automated solution for verified employment and income (VOE/VOI) through FraudGUARD to reduce lenders’ exposure by delivering timely and increased transparency into a borrower’s true current employment status and ability (capacity) to pay. “Obtaining current, independently verified income information can be a challenge, and one that presents a certain level of uncertainty that a lender may not want to accept,” said Craig Crabtree, senior vice president of mortgage services for Equifax. “Given today’s volatile market conditions, having timely and increased transparency into a borrower’s true current employment status and ability (capacity) to pay is more important than ever, and integrating The Work Number’s income and employment verifications into FraudGUARD enables lenders to effectively outsource this critical function of loan production with assurance.” This integration of VOE/VOI into FraudGUARD expands upon Equifax’s existing relationship with Interthinx. In March, Equifax announced the integration of Undisclosed Debt Monitoring— a system of monitoring and notifying financial institutions of new accounts and borrower activity initiated during the “quiet period,” which spans from the application date to the mortgage closing—within FraudGUARD. A solution that is “always on,” Undisclosed Debt Monitoring alerts lenders of borrower activity that may represent risk associated with mortgage loans in their pipelines. The Work Number’s VOE/VOI is now integrated into the confidence score FraudGUARD delivers to lenders. “Interthinx remains committed to helping lenders mitigate risk, eradicate fraud and support compliance, and adding VOE/VOI to our solution furthers this commitment,” said Mike Zwerner, senior vice president of business development for Interthinx. “Together with The Work Number, we are poised to deliver automated verifications that further streamline the risk mitigation process for lenders.”

Direct to Consumer Foreclosure Mediation Portal Launched in Maryland

eLynx and Document Express Announce Partnership

OCTOBER 2011

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eLynx, a portfolio company of American Capital, has announced that Document Express, a provider of mortgage loan document preparation, will partner with eLynx to offer Document Express customers electronic delivery, signature, and print-and-mail fulfillment services using the eLynx Expedite platform. “eLynx is the right partner for us because it has a comprehensive suite of services and a solid reputation in the industry for quality products and excellent customer service,” said Lori Johnson, president of Document Express. “Partnering with eLynx gives us the confidence to expand our offerings to the lenders we serve and that will make all of us more successful.” Document Express services are fully integrated with the eLynx platform. The extension of services allows Document Express customers to prepare loan documents and then deliver those documents electronically to borrowers and closing agents, including electronic consent and signatures, without a break in their loan-processing workflow. To ensure compliance, documents that cannot be delivered electronically are automatically sent to recipients using one of eLynx’s two secure printand-mail centers. “Through this partnership, Document Express offers its lender customers the connectivity and services they need to fulfill the loan production process in an efficient yet compliant manner,” said Sharon Matthews, president and chief executive officer of eLynx. “Their customers will save money and time through increased automation, document tracking, and auditing capabilities for compliance. As a result, our partner will see higher levels of customer satisfaction and retention.”

Mortgage Master Looks to Take a Bite Out of the Big Apple’s Market Mortgage Master Inc. has opened an office in Manhattan to serve the city’s housing market. The new office, which is licensed in New York, Connecticut and New Jersey, will handle the purchase and refinancing needs for thousands of residents in the Tri-State area. “The Manhattan housing market has been remarkably resilient,” said Marc Kunen, head of Mortgage Master’s Manhattan office and a veteran mortgage specialist. “Establishing a foothold in the city will allow us to compete as one of the lowest cost providers and avail those savings to our customers.” Based in Walpole, Mass., Mortgage Master Inc. continues to see strong demand as low mortgage rates spur homeowners to refinance and renovate their homes. Kunen also expects to see more customers take out new loans as housing prices in the TriState area begin to firm. The company, which is licensed in more than 20 states with branches in nine of those states, funded approximately $6 billion in 2010 and continues to expand its reach in the mortgage market. “Our company has been successful because we open offices in markets like Manhattan where we know we are dealing with a stable, reliable community of borrowers,” said Mortgage Master’s Chief Executive Officer Leif Thomsen. “The housing market is growing in the Metropolitan area, and we want to contribute to that growth by offering low cost loans to the community.” Prior to joining Mortgage Master to open the Manhattan office, Kunen was with GFI Mortgage Bankers Inc. as a managing director where he built their Manhattan branch into a $200 million residential mortgage division. He also worked for Preferred Empire Mortgage Company as a senior loan officer. He holds an MBA from NYU’s Stern School of Business and graduated with a B.S. in Business from SUNY Buffalo. Marc is a native New Yorker, and is familiar with the local real estate market and its financing nuances.

SCHREIBER

Accenture has agreed to acquire Zenta, a provider of residential and commercial mortgage processing services in the United States. The acquisition will significantly expand Accenture’s ability to help lenders, servicers and real estate investment trusts (REITS) retool and streamline their operations, enhance the customer experience, and improve profitability in response to new market conditions, while enhancing Accenture’s BPO portfolio. Terms of the transaction were not disclosed. In conjunction with the agreement, Accenture is launching Accenture Credit Services, a full-service consulting, technology and BPO capability that will expand its support for institutions in the residential mortgage, commercial real estate, leasing and automotive finance industries. Zenta’s mortgage processing capabilities will be a key component of the service. “The wave of regulations and a changing credit environment are redefining the competitive landscape of the mortgage industry,” said Terry Moore, global managing director of Accenture Credit Services. “In the residential mortgage business, low customer satisfaction, rising fulfillment costs, and falling pull-through rates— coupled with slower refinancing and purchase activity—are undercutting profitability. On the servicing side, regulatory changes are forcing operational transformation.” Headquartered in Dallas, Texas, Zenta is one of the top three providers of mortgage processing services in the U.S., serving four of the five largest U.S. banks. Zenta’s approximately 3,700 employees are expected to join Accenture. Its services include residential and commercial mortgage origination and servicing, default management, real estate portfolio management, and accounts receivable management. Zenta is also among the largest providers of real estate accounting and capital market analytics to U.S. REITS, institutional investment managers, owners and operators, and investment banks. The company also provides a variety of other credit related services. “As part of Accenture, we can offer our clients greater scale, a broader range of services and world leading business process expertise to help them meet new market demands,” said Henry Hortenstine, chief executive officer of Zenta. “We share a common goal of providing the highest quality service and measurable business value to clients, which makes this an ideal match.”

John Courson, former president and chief executive officer of the Mortgage Bankers Association (MBA), has been named a senior advisor at Treliant Risk Advisors.

COURSON

Top Mortgage Processing Services Firm to be Acquired by Accenture

Mortgage technology provider Blueberry Solutions has named Dominick Marchetti its new executive vice president.

MARCHETTI

housing counselors and/or pro-bono attorneys. Sends reminders about mediation date and location. Allows servicer to obtain all the information it needs to fully evaluate and make decisions on foreclosure alternatives. “Foreclosure mediation is an important tool for homeowners who want to ensure the best possible outcome from dealing with their lenders,” said Raymond A. Skinner, Maryland Secretary of Housing and Community Development. “The HOPE LoanPort, direct-to-consumer foreclosure mediation portal will make it easier for us to track the progress of those in mediation. It is a way for us to provide more efficient service for our customers.”

Ellie Mae has announced the hiring of Lisa Schreiber as vice president of lender business development.

CCG Catalyst has named Lee A. Kidder as its new practice group manager and senior consultant.

KIDDER

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Mortgage Professionals to Watch

Brent Stokes has joined Sperlonga Data & Analytics as the company’s new senior vice president.

STOKES

heard on the street

Accenture Credit Services offers consulting, process reengineering, systems integration and management, and business process outsourcing services for residential mortgage, commercial real estate, leasing and automotive finance lenders and servicers looking to transform and industrialize their operations. The services are designed to bring significant customer service, efficiency, quality, and profitability improvements to Accenture’s clients’ lending business. Accenture Credit Services serves more than 80 major lending institutions worldwide.

Real Estate Mortgage Network Inc. (REMN) has announced the addition of Angie Gora and Todd Greak as managers in the state of Georgia reporting to REMN Southeast Regional Manager Greg Janicki. The Mortgage Bankers Association (MBA) has announced the hiring of Jeffrey M. Schummer as vice president of education. HOPE LoanPort has named Camillo Melchiorre, former senior VP of loss management at Radian Guaranty Inc., as its new president and chief executive officer. continued on page 35

USA Cares Mortgage Heros Traci Ramirez, President Tri-County Mortgage, Russellville, Ark. Non-Agency Program Now Available From New Penn for Underserved Real Estate Investors

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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 Beverly.Frase@usacares.org to join our national team and be our next Mortgage Hero. We want to recognize you!

OCTOBER 2011

Kinecta Federal Credit Union has launched a new Asset Utilization Loan Program for its

CoreLogic, a provider of information, analytics and business services, has announced that it has integrated a tax return income verification solution—4506-T Direct—with its Mortgage Builder Software. The integration allows Mortgage Builder users to verify applicant income directly through the Internal Revenue Service (IRS), satisfy fraud detection requirements such as Fannie Mae’s requirement for third-party income verifica-

Unsung mortgage heroes are in every community, though it can be a tough search to find one. They are not often found in the spotlight, but the difference they make in the military lives they touch can be huge. Thus, I go panning for those nuggets of golden loan originators each month, and wish that loan originators everywhere would copy what they do. In typical modest fashion, this month’s Mortgage Hero, Traci Ramirez, president of Tri-County Mortgage in Russellville, Ark., fears she would fall very short, compared to what others are doing. But just ask the military folks who own homes today because of Traci’s commitment to persevere, no matter the obstacle, and you’d get a different answer. To each of those families, she is a hero. “As a one-person office” said Traci, “I pride myself on taking all the time necessary for my clients so they understand the loan process and what it takes to get approved to purchase a home in this very volatile and changing market.” Many military members think they qualify for a U.S. Department of Veterans Affairs (VA) loan, simply because they were discharged and have their DD214. Traci educates them that the VA doesn’t provide financing, they guarantee the loan, and qualifying for a VA loan can often be more difficult than other programs. In her area, the USDA Rural Development loan is a good 100 percent financing option. “If they qualify for both,” said Traci, “I show them the difference between interest rates and closing costs. This is very important when you have veterans using the entitlement for subsequent purchase. Several clients have come back to me to refinance their VA loan into the VA Interest Rate Reduction Refinance Loan or ‘IRRRL,’ which is a wonderful benefit for the veterans. “For many years, I have helped Arkansans realize their homeownership goals,” said Traci. “I know the value of honesty, integrity and experience. One of my clients was 100 percent disabled and trying to get a VA loan, but a top federal credit union denied his home loan request due to credit issues. Together, we worked them through, and he was able to purchase his home as he’d hoped, through a VA loan program. I once had a VA client purchasing a home while still serving in Iraq, and because of time change and his duty, we were only able to speak on the phone at 10:00 p.m. We went over all of his loan documents and requirements late at night, and we did it! His wife and kids were able to move into their new home and have it waiting for him when he got home.” Traci’s father retired from the Air Force after putting in 20 years, her husband was in the Army for six and her stepson has just completed four tours in Iraq. “There have been many tears of sadness and pride,” she said, “but there are lots of us out there who still have American pride in our always faithful and fearless troops!”

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Kinecta Offers Wholesale Program as Alternative to Assist High Balance Borrowers

CoreLogic Integration With 4506-T Direct Stamps Out Mortgage Applicant Fraud

“I grew up military and traveled the country and overseas, so I understand the joys and hardships of military life. I am very patriotic and try my best to help all of our veterans obtain financing to purchase their dream homes.” —Traci Ramirez, President, Tri-County Mortgage, Russellville, Ark.

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New Penn Financial LLC, a nationwide lender, has expanded its non-agency loan program with broader guidelines for investment properties. The enhanced investment property loan program provides greater flexibility for seasoned real estate investors and enables more investors to enter the marketplace and finance their projects. New Penn’s investment property program offers the following parameters: Up to 65 percent loan-to-value (LTV) for purchases and cash out refinance; up to 50 percent debt-toincome (DTI) with additional reserves; the ability to have up to 20 other properties financed; the option to close in the name of an LLC; and a six percent seller assist. In addition, qualified borrowers can purchase properties with a deferred maintenance and repairs feature, which is perfect for investors who buy foreclosed properties in need of repairs. With loan amounts of up to $650,000 per property, borrowers can take advantage of today’s real estate market and purchase a wide variety of properties. Investors, even if selfemployed, can qualify with a minimum FICO score down to 640. “The market is missing tremendous opportunities today” said Bob Wexler, vice president of New Penn Financial LLC’s Services Division. “Our platform provides a niche to our wholesale and correspondent customers that exceed Agency guidelines in almost every way. The expanded guidelines for non-owner-occupied properties will allow us to capture many investment quality loans that are currently excluded from the market.”

mortgage lending division. Tailored to Kinecta’s 5/1, 7/1 or 10/1 Jumbo ARM, the new program enables high networth borrowers with significant liquid assets, including self-employed and retired individuals, to use a percentage of those assets as income for qualifying purposes. “This is a valuable niche and a great opportunity for both our retail members and our wholesale business partners who have clients with strong credit histories and financial backgrounds, but are hampered by complex income situations,” said Todd Helmerson, director of wholesale loan production for Kinecta Federal Credit Union. Considered as eligible assets for the new loan program are checking, savings, CDs, stocks, bonds, 401K, IRAs, and insurance policy surrender values. All must be fully documented and held in U.S. financial institutions. Annuities, trust funds and hedge funds also may be used as long as there is evidence that the funds are available to the borrower. Available for loan amounts from $417,001 to $3 million, Kinecta’s Asset Utilization Loan Program takes its place alongside several other specialized offerings from Kinecta, including Fannie Mae HomePath mortgages and mortgage insuranceinsured jumbo loans with high loanto-value (LTV) ratios and above Federal Housing Finance Agency (FHFA) loan limits.

new to market

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tion, and detect inaccuracies in borrower-supplied tax information— directly from the Mortgage Builder loan origination system. The CoreLogic optimized data submission process helps deliver tax return information to the IRS faster, so Mortgage Builder users can obtain quicker, more efficient income verification results. The 4506-T Direct product searches up to four years of IRS verified data on the borrower(s); provides automated, timely posting of transcripts; and is backed by proven quality controls to maximize IRS acceptance. “The integration of 4506-T Direct significantly enhances our continued partnership with CoreLogic,” said Keven Smith, president and chief executive officer of Mortgage Builder Software. “This expanded product offering, accessed directly and easily from the Mortgage Builder platform, supports our objective for setting a new standard in convenient, single-source access to advanced data solutions that help streamline the loan origination process for our customers.”

Commerce Velocity Upgrade Maintains GSE Compliance

OCTOBER 2011

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guidelines and achieving the QRPC benchmarks for compliance will require the support of technology that not only can manage the tasks but also document the communication attempts, document the tasks and requirements completed, and prove deadlines were met throughout all default stages.” The Optimizer enhancements enable servicers to define collection calls as tasks, including follow-ups, which can be managed systematically while the ability to add notes and comments by default stage can aid in documenting the servicing file as required by QRPC. Similar enhancements enable servicers to manage property inspection orders and the forwarding of notices and letters to the borrower in a timely manner. “The Optimizer audit trail provides confidence to our servicers that default stages and requirements are completed according to QRPC,” said Verma. “The ability to document and timestamp default activities will not only help servicers achieve the QRPC benchmark requirements but also help monitor the timeliness of borrower communication which we believe is critical to improved mortgage resolution rates.”

LPS Releases New AVM and BPO Product Commerce Velocity, a member of the Fidelity National Financial (FNF) family of companies and a provider of default technology has enhanced their Optimizer solution to help achieve the new requirements for Fannie Mae’s Quality Right Party Contact (QRPC) initiative. The new enhancements are designed to arm servicers with technology to document, as required by QRPC, the varied forms of communication to the borrower regarding the resolution of their delinquent mortgage. It also maps all of the required notices, letters, and forms required by Fannie Mae to be in a servicer’s default processes by the Oct. 1, 2011 deadline. “QRPC has raised the bar for servicers to prove they have been diligent to build rapport with the borrower, understand their financial circumstances and intent, educate the borrower on foreclosure alternatives, and obtain a commitment from the borrower on the resolution path going forward,” said Umesh Verma, president of Commerce Velocity. “Complicating matters is balancing QRPC with the Fair Debt Collections Practices Act, the United States Bankruptcy Code, and applicable state laws. It’s unreasonable to expect workout specialists to manage all of these compliance risks without technological guidance. Meeting the

Lender Processing Services Inc. (LPS), a provider of integrated technology, data and analytics to the mortgage and real estate industries, has announced that its LPS Applied Analytics division has released a new product to provide default servicers with an alternative to broker price opinions (BPOs) for evaluating residential real estate in their portfolios. LPS’ Distressed Asset Review will combine the accuracy and consistency of an automated valuation model (AVM) with property condition information. Traditionally, AVMs have not accounted for property condition, which is why BPOs have become the valuation tool of choice among default servicers. Conversely, while BPOs evaluate property condition, the inherent subjectivity and inconsistency in these valuations can present challenges for default servicers. “This new product gives default servicers the best of both worlds— values that take into account property condition and an AVM that is not subject to the inconsistencies inherent in BPOs over the distressed property’s lifecycle,” said Robert Walker, managing director of LPS Applied Analytics. “In this market, we know clients are eager for this more reliable data about underlying assets’

values, so they can make critical loss mitigation decisions.” LPS Distressed Asset Review taps the LPS ValueSure AVM and incorporates a real estate professional’s property condition report to produce a more reliable value that also meets both the letter and the spirit of the federal Treasury Department’s new Interagency Appraisal and Evaluation Guidelines, resulting in a single, comprehensive, easy-to-read report that utilizes AVM intelligence and factors in property condition. “Default servicers now have an alternative to BPOs. Research has shown that servicers may order three or more BPOs throughout the lifecycle of a non-performing asset,” said Walker. “Replacing one of these with LPS Distressed Asset Review is a costeffective way to obtain a reliable and accurate value, and to give a higher degree of confidence in BPO results.” LPS’ Distressed Asset Review also provides detailed market analysis on foreclosure and real estate-owned (REO) activity in each subject property’s neighborhood down to the ZIP code level. It includes both current analysis and forecasts market trends over the next 12 months.

DocuSign Takes e-Signatures to the Clouds

DocuSign has announced the latest version of DocuSign for Salesforce, giving customers the freedom to “Close it in the Cloud,” anytime, anywhere, on any device. The latest release of DocuSign for Salesforce is integrated directly into Salesforce CRM to generate dynamic documents on the fly, helping sales organizations to shorten the sales cycle, reduce costs, and see real-time pipeline updates in Salesforce Chatter. “With eight of 10 electronic signatures in the cloud DocuSigned, more businesses have standardized on DocuSign than all other electronic signature solutions combined,” said Keith Krach, chairman and chief executive officer at DocuSign. “DocuSign is excited to further our partnership with salesforce.com as the pioneer and leader in cloud computing. Our deep integration makes it possible for sales organizations, like salesforce.com who uses DocuSign as their exclusive eSignature solution, to quickly and easily ‘Close it in the Cloud.’” Accessible from any browser, including mobile devices, DocuSign for Salesforce allows recipients to enter data, initial, date, and sign contracts online within minutes while automatically updating Salesforce account data. DocuSign for Salesforce supports virtually any document type, and provides for identity management/user authentication, forms/data collection, workflow automation,

storage and more. With support for complex routing rules and dynamic collaboration tools, DocuSign makes sending documents electronically for eSignature as easy as sending an email from Salesforce.

New a la mode Product Streamlines UAD Formatted Appraisals

a la mode inc. has announced the release of its UAD Reader product, a free desktop tool which allows anyone to open, view, error-check, and manage appraisals in the new UAD MISMO 2.6 XML format. It works with any Uniform Appraisal Dataset (UAD)-formatted appraisal, regardless of which software was originally used to create the report. UAD is the appraisal format designed and required by the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, and adopted by the Federal Housing Administration (FHA) as well. All GSE-destined appraisals as of Sept. 1, 2011 must be in strict UAD format. FHA has announced it will require UAD after Jan. 1, 2012. UAD Reader is a free download, available at alamode.com/UADReader. The UAD specification standardizes both the technical XML file structure, as well as the particular words, number formats, and abbreviations that appraisers are allowed to use in the report. Some industry members will find UAD appraisals to be hard to read and understand as a result of the new terminology, but first they have to be able to view the reports on screen at all, which is harder than it seems. “Appraisals are now delivered as ‘.XML’ files, not as ‘.PDF’ files, so anyone in the entire workflow chain will start encountering documents they can’t open, or which look like gibberish on screen”, said Dustin Moore, president of a la mode’s Real Estate Solutions Division. “UAD Reader solves that problem, plus others.” Through a la mode’s UAD Reader, anyone double-clicking a UAD XML file gets the embedded PDF on screen just as they’re used to seeing, along with a variety of appraisal document review and management features. It not only allows the user to save the PDF out separately, it also shows the XML appraisal data in a handy visual “split screen” mode. Beyond the visual display of the appraisal, the UAD Reader also verifies that the appraisal file passes the GSE’s tightly defined rules. Any errors flagged are hyperlinked to the actual GSE descriptions of what the form field should contain, and the offending data is also clearly highlighted on the form. For lenders or AMCs, this makes it easy to request revisions from the appraiser. For the appraiser, it allows errors to be caught

before sending to the client in the first place.

LOS Provider SaM Solutions US Begins Demos of New Software SaM Solutions US, the developer of Engage, a software as a service (SaaS) offering that delivers a cutting-edge mortgage loan origination and processing system, has begun to demonstrate the system to mid-sized banks, community banks, credit unions and brokers. “Too many lenders have to work around or for their loan origination systems,” said Aaron Cope, head of operations at SaM Solutions US. “In contrast, Engage is configured to let lenders work through it, and never around or for the system. Lenders that find themselves in that situation, or that have outgrown their LOS, I am interested in providing with a demonstration of our system.” Every lender receives an Engage “carte blanche” license that entitles them to use every module, without a limitation of any kind, for a price that is modest enough to make the decision to try Engage a risk-less transaction. “Our clients receive the same low price and there is no Silver, Gold or Platinum implementation types,” said Cope. “That’s

heard on the street

because everyone is treated as a Platinum client, and there are no additional costs, for instance, to use the imaging or any other module.” Because Engage is a SaaS offering, SaM Solutions is able to deliver a robust, cutting-edge system for the lowest cost in the industry and create easy access to services that lenders require. “For instance, Document Express has embedded its document preparation solution, DX Elite Series, within Engage,” said Cope. “The deal combines the best of breed in terms of document management and cutting-edge loan origination systems.”

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Chris Knox has joined Kinecta Federal Credit Union as northeast regional manager of Kinecta’s wholesale/correspondent mortgage lending operations. The Conference of State Banking Supervisors (CSBS) has named John W. Ryan president and CEO and the CSBS has also announced that Michael L. Stevens has been promoted to the position of senior executive vice president. LenderLive Settlement Services has named Kimberly Joyce as national sales manager and Brad Noblit as regional account manager. Curtis Brunton has joined Prudential Mortgage Capital Company as a principal in the firm’s western region. John Alarcon has joined Aklero Risk Analytics Inc. as chief financial officer. Doug Walker has been named vice

Capturing Opportunity in the New Mortgage Marketplace By Eric Wiley

OCTOBER 2011

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I have been fortunate to experience many sides of the mortgage industry. My past 16 years have included positions as an originator, sales manager, operations manager, and for the past seven years, co-owner of a successful multi-state mortgage bank/brokering firm. I have also been a participating member with industry trade associations and have worked on legislative efforts. From these experiences, I have seen change, as we all have. And I see opportunity. As all of us in the mortgage industry know, the past four to five years have been, at the very least, “hangon-by-the–seat-of-your-pants” interesting. Most of you would probably agree that we aren’t yet done with this wild ride, despite a widespread desire for things to return to normal. In my view, getting back to “normal” is something we ought not to hold our breath for. Normal was not the 2000s. Normal was my first three years in the business, before automated underwriting engines. So rather than look back, we need to look forward and recognize that there is a new normal in place in the mortgage industry that both individuals and companies need to embrace if they are to capture the opportunities that lie ahead. As housing markets have cooled off, the number of mortgage industry participants has fallen. Unless rates drop yet again, I would estimate that we will continue to see industry numbers fall throughout this coming winter and well into 2012. There will be fewer loans to be had and potentially even fewer participants to originate those loans. Order-takers beware: You are on the short road to extinction. Either your company better be really good at cost-effectively originating loans for you or you had better get out of your (dis)comfort zone and start originating business with a redefined sense of purpose. I have seen success follow individuals who view being in our industry as a true and honorable profession. I have also seen failure engulf those who lacked foresight to plan for

change in the mortgage climate. As industry professionals, we simply cannot do things the way we have in the past because that past no longer exists. We each need to evolve if we are to make it going forward. To illustrate that point, if you are a “refi expert,” I would suggest you are at the end of your line unless you have identified a strong niche of opportunity to focus on when interest rates rise. Our current rates hovering around the four percent range are not, by any standard, normal and they will increase sometime in the near future. I have also seen negative individual traits that lead to poor results in our industry. Most of the time, those who possess these traits do not recognize the dark cloud they are placing right above their own head. Sadly, they are the “walking dead” of our business. Negative traits include seeking out the highest compensation to the detriment of more valuable or comprehensive factors. Another negative individual trait includes switching employers frequently. This is tough on past client and referral relationships, ultimately leading to the conclusion that the real problem is in the mirror, not the company affiliation. Equally negative traits include thinking loan-by-loan versus managing a vibrant pipeline (don’t think commission, think relationships and long-term volume), blaming underwriting instead of poor packaging/application-taking, and generally taking negative news as a negative on your own business. Individuals make up this industry and negative traits can bring down the individuals in it. When I step back and compare my own company with other successful operations out there, I can see that size doesn’t necessarily matter. Rather, there are a handful of traits that seem to be a common thread for success at any sized firm, including: Work ethic Continual industry-related education

Surrounding people with other successful people Meeting and dealing with individuals on a face-to-face basis, which includes referral sources, as well as clients and even industry peers Staying in touch with past clients Putting on a smile when you show up in the morning

bility to our customers. Adding to that is the fact that consumers and large institutions have been trying to commoditize what we do during this low rate, post-housing boom reset period. All of these considerations make us, and what we do, truly unique and that can create opportunities based on how effectively “As industry we distinguish ourselves professionals, and/or our organization. we simply cannot do Granted, the past few things the way we years for our industry Again, the quality and have in the past have posed challenges to strength of a mortgage because that past both individuals and company doesn’t relate to no longer exists. organizations, but from it size or business channel. We each need to all comes great potential Others may say so, but evolve if we are to make for those who recognize don’t listen to them as it going forward.” that innovation and they are operating out of change are good and fear. A strong management team will be able to see the for- essential. When is the last time you est through the trees and successfully and/or your organization assessed your guide those who make their living standing in our current environment? originating loans for the company. What are you doing differently today The key is staff engagement. If you are from what you did yesterday? Now is a manager, are you engaging your the time to refresh or create, for the staff and challenging them to grow or first time, a business plan that are you just a “good times” manager includes a “back-to-basics” approach. (like an order-taker in a refi boom)? If Whether you originate referred busiyou are on a team, is your team ness or leads-based business, you diverse and can your team divide and and/or your team should be sharpenconquer? If you are an originator, do ing your sales and management skills you feel your manager/management along with your knowledge of our is capable or are they floundering mortgage industry. One other benefit from my 16 years right now? In asking these questions, be serious in your analysis because in this business is that of perspective. your own success is most likely on the In drawing upon it, a simple fact is line, if not right now, for sure in the clear: What we have done in the past near future. Make the company’s doesn’t work anymore. My perspecenvironment work for you, or get a tive also tells me that opportunities in the mortgage industry are still to new environment. The mortgage industry is unique to come. The housing market isn’t going other businesses, even service-related away and neither is our industry— businesses. We don’t have any inven- both are evolving and both will surtory on our shelves (at least, we hope vive. The opportunity for all of us is we don’t … think buybacks). As origi- grounded on how effectively we nators, we don’t really have a lasting evolve within today’s new mortgage client relationship (although main- marketplace. taining a post-transaction relationship is always good marketing, espe- Eric Wiley is chief operating officer and co-founder of Pacific Residential cially for referrals). We don’t invest funds for clients so Mortgage LLC. He has served on the we are not advising them over any peri- board of the Oregon Association of od of time. We do not insure their Mortgage Professionals (OAMP) and is homes, and consequently, we don’t col- an active member of the Oregon lect a new check once a year. Bottom Mortgage Lenders Association (OMLA). line: Whether we like it or not, we are He may be reached by phone at (503) providers during a limited period of 905-4902 or e-mail eric.wiley@pacrestime of a financial product that is a lia- mortgage.com.

All That You Can Be Optimizing efficiency in your bank’s mortgage division By BJ Bounds In the past several years, we have seen many modern day advances develop in the banking arena. As consumers, we are thrilled to be able to bank online, get text alerts or check balances on our smartphones, and we still revel in drive-through convenience. As bankers, technological advances help streamline your processes and allow you to accomplish more with fewer resources. If your advances include your mortgage division, you probably already employ a loan origination system (LOS) to originate, process and close mortgage loans with total compliance to regulatory mandates. As an investment and a tool, your LOS can make your division fast, efficient and customer-friendly. Optimizing the efficiency in your mortgage division involves using all of the brilliant features of your LOS that you may not know exist.

Secure your future

All in one place

Insider advantage

e-mail: sales@calyxsoftware.com visit: www.calyxsoftware.com

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Another important aspect of organizational efficiency is limiting the number of errors from the constant re-keying of data to order documents and services. Re-keying data is extremely time-consuming and increases your overall loan processing time. Using your LOS to order services

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Of course, oversight is much easier when all of your loan data is securely located in one place. When your LOS is accessible from the Internet, your software and data are more likely stored on a server. Twenty-four-hour access to your loan files is important for instant reporting and auditing purposes. Additionally, having your loan files all in one place eliminates the risk of losing sensitive data due to computer crashes, theft or natural disasters. Electronic document management not only enhances the security of your LOS, it also enables much greater efficiency in storing, handling and shipping documents. Customizable stacking orders for different groups means you can separate, package and ship documents for your specific needs. Drag and drop capabilities make it easy to move e-mail documents from your e-mail window directly into your document manager. Additionally, you can securely email your specially-prepared document packages directly from your system. Your electronic management system also helps keep you and your division on track with automatic date logging of all documents. You will always know when your documents were shipped, who shipped them and where they went. Being able to peek into your pipeline and know instantly what’s going on with each loan file is important to maintaining a streamlined and compliant workflow.

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Security in your mortgage division encompasses the most basic of access controls, as well as the more complex security of business processes through configurable and integrated business rules. Security within your mortgage platform is no less important than within your core banking systems. Beginning with access to your most sensitive data, security must be robust, and it must be functional. Access controls based on individual users or user groups form the basis of a platform with flexibility that helps you manage your business the way you want to, while eliminating the risk of losing data integrity. Flexible and customizable, business rules seamlessly meld loan workflow with your established business processes. Action-based rules with configurable hard and soft stops provide workflow direction through the pipeline to best suit your business and comply with industry regulations. Field-based rules ensure that incomplete files can be properly processed before moving through the

pipeline. The control and oversight you have over your complete loan flow is indispensable to the security of your division.

is fast, easy and will LOS platforms have also greatly increase your kept up with technologdivision’s efficiency. ical advances throughWith the proliferation out the years in order of vendor interfaces, to meet not only federyou never need to go al requirements, but outside to order docualso those of customers ments and services. You who require more funccan do everything you tionality to close more need from within your loans quickly, without LOS platform without adding additional re-entering data, and resources. without having to fax If you want to be “Optimizing the documents back and more efficient, you have efficiency in your forth. As with everything invested in the right mortgage division else, visibility into your tool. LOS platforms have involves using all of third-party orders is progressed for banking the brilliant features institutions and can important. of your LOS that you meet your division’s Using your vendor may not know exist.” loan processing needs management tools from within your LOS, you better than ever. always know when your documents Supporting you with functional overand services were ordered. In addi- sight of your pipeline, advanced secution to internal status tracking, rity, business rules that help you ordering services directly from your manage your workflow, and elecplatform also has another advan- tronic management of all documents tage: Documents ordered from your and vendor services, your LOS can vendors are returned directly into optimize your mortgage division and the electronic loan file from which make it all that it can be! they were ordered—safe and secure. It’s this data-protected, full-circle BJ Bounds is senior marketing communiadvantage that will get your division cations specialist for Calyx Software. In humming! addition to media relations and copywriting, BJ is a contributing author to A well-oiled machine the Calyx Software blog, CalyxCorner. Banks strive to be on the cutting- She has more than 10 years of experiedge of technology when it comes to ence in sales and corporate marketing their core banking systems. If your with a focus on technology that spans mortgage division is struggling with several industries. She may be reached efficiency, you may not be using your by phone at (800) 362-2599 or visit LOS platform to its fullest potential. www.calyxsoftware.com.

The Next Generation of Mortgage Loan Originator By Casey Cunningham

OCTOBER 2011

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The number of mortgage loan originations has shrunk in both number of units and overall dollar volume since its peak in 2003. Without saying, this decline spilled over and sharply depleted the number of loan originators (LOs) able to withstand the storm that has enveloped the industry. Yet the average age of an LO is higher than even five years ago. As the general population of LOs continues to age, the next challenge facing mortgage lenders will be to replenish the ranks. In the past, the practice has been to recruit the traditional LO from competitors; however, the impending shortage of LOs will force the industry to find alternative methods of supplying the next generation. Lenders who focus effectively on recruiting and developing sales teams from outside the mortgage industry will have a marked advantage in the marketplace. To be successful in this endeavor, they must have a clear understanding of their company’s value proposition and how they will leverage key managers within their organization.

They must have a plan to replace their existing sales force. There are countless lenders who have attempted to hire and train their own with little or no success. Organically growing a new segment of your sales force requires effective implementation via a tactical model that blends mortgage strategies and best practices. The new sales professional model need not be an all or none proposition. Each company must determine the desired ratio of experienced LOs to the new generation LOs balancing the need for a strong stable sales team to generate immediate growth and a team properly positioned and poised for long term sustainable growth. While there are many factors to consider, there are some simple steps to follow to ensure a successful new sales force. Consider these “10 Steps for Building the Sales Force of Tomorrow.”

LOs it plans to recruit, hire and train. As part of this initial step, it is important as well to identify the first and second year annual production goals for these new hires. Remember, these new hires are not “exposed” to the traditional knowledge of your current LOs. It is highly recommended you set higher expectations for these new sales professionals as they will work to achieve your minimums with little knowledge of the industry norms.

“Lenders who focus effectively on recruiting and developing sales teams from outside the mortgage industry will have a marked advantage in the marketplace.”

2. Job description and benchmarks/metrics

Once your corporate hiring goals are set, it is time to identify the job description of the new LO. Upon hiring, will they fulfill the traditional model of an LO or will they be an assistant or junior LO for a specified period of time or permanent assistant to a top LO? As you establish benchmarks/metrics for the new position, remember that your corporate hiring goal is impacted. These 1. Corporate hiring goal metrics/benchmarks should be given A company should begin by determin- serious consideration as these are your ing the allocation headcount of new success indicators in your new LO pro-

gram. Items to include in the job description: Number of units and dollars in production, number of sales calls or increase in referral sources/production for top LO, etc. These benchmarks should be determined with expectations for the first three months, increasing from the third to the sixth month, sixth month through the 12th month and again after year one.

3. Compensation

Once the job description is complete, it is time to create a compelling compensation plan to support the acquisition of new talent. An effective recruiting campaign will position you to compete for the same talent as other Fortune 500 companies. Your compensation plan is obviously a huge component of the overall strategy. Create a compensation plan that meets the financial needs of your company and make sure that it has incentives to attract the highlyqualified talent you seek.

4. Ideal new candidate profile Upon completion of the compensation plan and job description, your knowledge of what is “ideal” in a new recruit is imperative to the success of your initiative. There are known key indicators of future success for new LO candidates. A careful examination of previous work history and a well-prepared interview guide will assist in uncovering desirable patterns of behavior, as well as obstacles or warning signs that would impede success. Consider the following traits and determine the “must haves” you will require in developing the next generation of your team: Direct sales experience with a track record of success to include a demonstrable and stable work history, direct sales experience, and excellent verbal communication skills An ability to build long-term relationships with referral sources, including but not limited to, realtors, builders, financial planners, CPAs and attorneys

Candidate should possess a need for achievement in highly-competitive environments The ability to connect with customers for repeat business The ability to creatively market themselves and prior employers Be self-disciplined with fairly strong organizational skills Be a team player (many high producing LOs have participated in competitive sports) Demonstrate an ability to thrive when dealing with adversity and high stress situations Possess an existing referral database— a quality “sphere of influence” with people in their community

5. Training and assimilation plan

6. Manager/mentor qualifications

The key to locating qualified exception-

It’s time to consider this strategy for the overall growth and health of our industry. All of the other financial industries (financial planners, stock brokers, insurance agents, CPAs, etc.) have attracted great talent and require comprehensive training and knowledge to have the privilege of reaching, serving and retaining clients. For so long, we have recruited and committed to hiring only those with previous mortgage experience and success believing it will transfer with the LO into a new corporate environment. The truth is, hiring is risky and experience, knowledge or pipelines do not guarantee

Casey Cunningham is president of Atlanta based XINNIX, a provider of interactive online training for mortgage sales and leadership development programs. She may be reached by phone at (678) 325-3501 or e-mail casey@XINNIX.com.

It is imperative that all components are in place before you initiate your plan and it is also important that you have established benchmarks by which you will measure the success of your recruiting. How many recruits yielded one quality hire? What marketing was most effective? Did one professional sector provide the most viable candidates? Was the set aside capital requirements sufficient?

9. Hire and train As the new hires arrive, the onboarding and training program should clearly explain the expectations for professionalism, ethics and execution. The communication to the leadership team on the overall measures of the program is an integral part for the future planning process of new hires as well.

10. Assimilation process Conducted in tandem with the established training schedule, a great start for a LO begins by shadowing sales calls with the assigned manager/mentor for a period of 60 to 90 days. A probationary period follows where the new hire will, in turn, lead the sales call accompanied by the manager/mentor. Depending on the job description and responsibilities, the LO assistant or junior LO receives a separate but equally defined skill set they are honing. Providing immediate feedback through effective one-on-one meetings is crucial to avoid sales pitfalls and to acknowledge and reinforce positive sales and/or other skills. The

OCTOBER 2011

7. Recruiting plan

The time to start is now

success. We have clearly overlooked the benefits of “growing” our own. Our industry is ready and needs the next generation of LOs as they bring with them the following wonderful traits: Enthusiasm, new energy, an open mindset, motivation, loyalty and most importantly, unlimited production. We will no longer be beholden to the limited recruiting pool currently available. Recruit and train new LOs and you have opened your company up for ultimate success in the long-term.

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The manager/mentor of each new hire is an integral part of the overall success of the new LO. Select company “champions” who strongly support the company mission/vision and are role models for your new LOs. The manager/mentor selected to fulfill this role must possess outstanding technical skills, industry knowledge and proper utilization and efficiencies of the company’s technology. They must have demonstrated the ability to motivate and inspire their current team or fellow loan officers via excellent coaching skills and/or previous success with rookies. The qualified manager/mentor does not need to possess the manager title, but must be an exceptional mentor.

8. Initiate the recruiting plan

more success a new hire experiences immediately, the higher probability of long-term success.

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Outside of the corporate culture and requisite on-boarding of new hires, internal training teams must be prepared to deliver immediate comprehensive mortgage industry essentials and advanced mortgage skills or determine the outsource provider of such training. Mortgage 101 and beyond should be implemented jointly with an effective assimilation plan encompassing, in-field mentoring, daily business practices, prospecting activities, weekly accountability meetings, business planning and other responsibilities within the scope of the job description. The training plan and assimilation plan should include a thorough training of the managers/mentors as well.

al candidates is to take advantage of and optimize the numerous sourcing options available to you. From your existing database to current LOs (ask your team) branch out to other professions, including stock brokers, financial planners, insurance agents, finance managers or sales professionals representing the auto industry, restaurant management and real estate agents. Recruiting from these various sources will allow for a large, highly talented candidate pool. Remember, the best candidates will want to hear a clearly defined value proposition. The effective recruiter will be able to communicate compelling reasons to work for your company, what you offer and the company vision.

Facing the Challenges of the Current Mortgage Banking Landscape By Leif Boyd As we look at the current industry and where it will likely head over the next few years, many brokers have more questions than answers. Companies, brokers and loan officers are still figuring out how loan originator (LO) compensation reform will impact their balance sheets and wallets. As the government and banks have continued to add more requirements to get loans approved, it has become harder for once-qualified individuals to get loans. A few large companies seem to control a large share of the market.

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State of the industry Large, nationwide banks are still dominant players in the mortgage banking industry. However, most of these banks have begun consolidating their retail branches and have refrained from opening additional brick and mortar offices across the nation. The big banks appear to be satisfied with their current volume and customers. They originate a satisfactory number of loans, and at the same time, they can offer their customers a variety of ancillary services from free checking to savings and investment accounts. This keeps the larger banks busy and profitable. This situation also leaves room for smaller mortgage banks to reach customers in ways the big banks are no longer doing as aggressively as in the past. Meanwhile, customers who may be skeptical of the larger banks or may not need the gamut of services offered are likely to choose smaller mortgage banks for their loans.

Banking versus brokers Today’s environment is decidedly more favorable for mortgage bankers. Brokers are increasingly marginalized by the big banks and mortgage bankers who now control approximately 93 percent of the mortgage industry. As risk has increased and government reforms have been put into place, the entire industry has shifted. In this climate, direct lenders, both big and small, have a distinct advantage over individual brokers.

While the pendulum may well swing back in favor of brokers and smaller bankers in the future, today, the consumer, real estate agent, asset managers, investors and warehouse lenders all prefer to deal with banks and mortgage bankers with solid balance sheets and proven business practices. In an industry already overloaded with excessive hurdles, remaining a broker today seems an unnecessary hurdle to leave in place.

Today’s added challenges Implementing LO compensation reform in April of this year was a difficult challenge to overcome for many mortgage companies, brokers and loan officers. As the dust continues to settle from those regulatory changes, the industry faces two large hurdles. First, originators, underwriters and consumers are bearing more of a burden. The underwriting process has become increasingly more laborious and has made gathering the necessary paperwork for a loan more difficult. As the big banks add overlays to already stronger regulations, the process becomes more difficult for consumers. This sometimes results in once-qualified consumers not being approved for a loan. Ultimately, the big banks are overruling Fannie Mae and Freddie Mac as they look to minimize mortgage risk on their balance sheets. The second issue stems from the lack of a viable secondary market for mortgages. In the past, Wall Street investors would buy up loans from banks to help mitigate risk for the bank. Now, although investors are buying loans, they are sold back to the banks if the investor defaults. A viable secondary mortgage market is unlikely to emerge until the end of 2014. In the meantime, mortgages will continue to be written conservatively and analyzed thoroughly before they are approved. These mortgages are so safe that they have some of the lowest interest rates in history and, when sold to investors, they do not offer a high return-oninvestment (ROI). With low interest rates, investors are more likely to

place their money in tures are also more likely other parts of the marto have higher staff ket where there is a highretention rates. In today’s er ROI. competitive mortgage Taking all of that into marketplace, every high consideration, the stock performing LO is a h i g h market is still fickle and l y s o u g h t - a f t e r prize. has seen recent swings of With compensation 100-plus points per day. reform changes now in Even if the market stabiplace, compensation lizes, mortgages may be alone is not enough to seen as one of the safer draw talented LOs to a places to invest money. new company. Having a “Brokers are Mortgage-backed securireputable culture of servincreasingly ties (MBS) that include ice and success, however, marginalized by fully-documented and can go a long way to keep the big banks and scrubbed mortgages are high-quality employees mortgage bankers just as safe as a treasury or attract high-performwho now control bond. Despite the low ing LOs. approximately ROI, some investors may Part of doing business 93 percent of the see mortgages as a safe, the right way means cremortgage industry.” quality way to invest. ating a positive working Think back to 1993 and the Jack in environment for employees and givthe Box E. coli outbreak. In the ing LOs the tools they need to sucmonths after the outbreak, Jack in the ceed. This will keep customers happy Box was probably one of the safest fast and lead mortgage banks to success food restaurants, as they were under and profitability. Small mortgage the watchful eye of the public and banks can also stand out by teaching enacted some of the toughest food basic and effective sales techniques safety procedures in the industry. to their LOs. These techniques Now, with government rules and regu- include: lations in place and banks adding their own layer of rules and regula- Providing excellent customer service tions, mortgage-backed securities are Researching and prospecting the one of the safest options available. right potential customers Listening to prospective customers’ Tomorrow’s opportunities needs and meeting those needs Although the big banks seem to reign Adding value to customers’ businessover the entire industry and have a lot es by providing customers with of leverage when it comes to getting a information to help them succeed loan, there are several opportunities for smaller mortgage banks. Smaller mortBig banks do not always have to gage banks that can consistently rule the mortgage industry. As the approve mortgages within a standard economy recovers and the secondary timeframe will succeed and be prof- mortgage market re-emerges, smaller itable. This does not base success on national and regional mortgage volume for volume’s sake, but instead, banks are likely to become more relies on a wide customer base for over- dominant players within the indusall health, whereas the big banks rely try. In the meantime, showing a comon selling a wide variety of services to a mitment to core business principles, limited number of customers. Servicing employees and customers is a sure is becoming increasingly attractive and way to stand out. feasible for smaller mortgage banks and can be a great way to diversify a com- Leif Boyd is senior vice president of pany’s revenue. production for American Pacific Beyond selling mortgages, the cul- Mortgage. Since joining American ture within a mortgage bank is highly Pacific Mortgage, Leif has taken an important to its current and future suc- active role in overseeing all aspects of cess. A successful company culture is mortgage origination, including the one that encourages employees to help oversight of the production departothers and creates a willingness among ment and 114-plus branches. He may employees to do what is best. be reached by phone at (916) 960-1325 Companies with strong corporate cul- or e-mail lboyd@apmortgage.com.

Banker to Broker: The Advantages to Mortgage Brokers By David Hardin

“… mortgage brokers are increasingly— not yet in droves but certainly in bunches— electing to join mortgage banking operations as employees and run their branches as profit centers of the bank.”

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ingly—not yet in droves but certainly in bunches—electing to join mortgage banking operations as employees and run their branches as profit centers of the bank. In addition to allowing one to remain in a business they probably love, doing so has many advantages. When you broker a loan, there is a preset margin that you must earn, and in many cases, you cannot legitimately credit the client as much as you might like. In some cases this may make the loan undoable for the client or may result in you losing the loan to a competitor with a lower margin. When you become a bank branch you sell off of a rate sheet that allows greater flexibility when it comes to how much credit you can give the client towards costs. Segueing from broker to banker has several inherent positives. For instance, the GFE (Good Faith Estimate) disclosure is cleaner and less confusing to the client. You disclose only what the client is actually being charged and you do not have to show a charge and then show a credit. It makes the closing less confusing and is a much easier sell. Your process also becomes greatly simplified. You no longer have to worry about the submission requirements for multiple lenders. This is an area that is often overlooked, but a simplified process translates to better customer service and the ability to close loans faster and with greater accuracy. When you team up with the right mortgage bank, you become part of an organization with the resources in place to ensure you remain in compliance with new laws and the neverending changes in programs and compliance issues. Most mortgage banks provide accounting, human resources and other administrative support that most small business can only hope for. You become part of a larger entity that generally has resources to help you grow your business, such as marketing programs, collateral and greater access

banking products may have that your clients need. This can be extremely important when, as a broker, your clients are accustomed to you having a wide array of products available. So how do you decide if a conversion from broker to banker is right for you? First and foremost, you have to assess the needs and goals of your business. What are its most important needs? You also need to know if your company has the wherewithal to compete and remain in compliance. Finally, consider how you would rather spend your time: grow-

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Change. Few words in the English language evoke such equal and opposite feelings—of both dread and excitement. Rapid and relentless, everyday change is precisely what mortgage brokers face, and I’m not referring to mortgage rates. For the past two years, waves of federal legislation and regulation have been transforming and changing the home financing and lending landscape. Any mortgage broker still in business must consider a fundamental change: Should they remain a broker or join a banker? This is no small change. We cannot do much about new rules, programs and guidelines—they represent the hand we are dealt. Having been dealt such a hand, many of our colleagues have abandoned their vocation mid-career, choosing to change industries or perhaps take the initiative to start a new venture. But there is another option: We can adapt our business to survive and thrive in this new world. First let’s take a look at the key developments originating from Congress and the Federal Reserve Board (FRB). There’s no question that regulatory changes imposed on our industry over the past three years have had a profoundly negative impact on both mortgage brokers and consumers. The reason these regulations have failed is simple: Faulty aim. They’ve been applied to the industry and the businesses that make up the industry and not to the real problem: Bad mortgage products, such as sub-prime and stated-income loans. Perhaps the most significant negative, at least in terms of compensation and earning potential for mortgage brokers, is that, under the new rules, mortgage broker businesses can no longer be paid by both the lender and the borrower in a loan transaction. They must choose. (For more on the impact of recent Congressional and Federal Reserve Board regulations, see the accompanying sidebar on page 42.) As a result of these and other changes, mortgage brokers are increas-

to technology and legal sources to help you create business arrangements with your target clients that can prove to be very profitable. The resistance of many brokers to convert their employees to a W-2 status has proven costly and if it hasn’t invoked an audit by the state yet, it certainly is a risky way to continue to do business. The payroll services that most mortgage banks provide is the first step in ensuring you are doing things properly. Many mortgage banks now offer the ability to broker loans to fill the gaps in product that their

ing your business or administering your business? The decision to change from broker to banker should not be taken lightly—it could be the single most important decision a broker makes in his or her career. In January 2010, I took a mortgage brokerage operation that had been independent for since its inception in 2004 and transformed it to a mortgage bank with a growing banking firm. The transition was motivated by changes in the licensing laws and in the RESPA changes. The transition allowed my firm to remain in strict compliance and become a more efficient, profitable business, fully prepared to deal with the constant changes over the past 20 months. It is not without hard work, but like most things where hard work is required it had great rewards. If and when you decide to pull the trigger and switch from broker to banker, here are a few of the things you should look for:

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Is the management team one I see myself working with on a daily basis? How are their rates on the key products I sell? What is the breadth of product offering? What level of accounting, compliance, human resources, payroll and marketing support do they offer? What is the financial structure? Am I ready for a change? David Hardin is director of retail operations for Bay Equity Homes Loans, one of the San Francisco area’s most respected and successful mortgage lending institutions. David is in charge of expanding the bank’s team of retail branches across the western United States by encouraging mortgage brokers to transition into the mortgage financing industry. He can be reached at (415) 8204512 or (949) 701-0804, or e-mail dhardin@bayeq.com.

From the Congressional Testimony of Mike Anderson, vice president and chairman of the Government Affairs Committee, National Association of Mortgage Brokers (NAMB). “Mortgage Origination: The Impact of Recent Changes on Homeowners and Businesses,” before the Subcommittee on Insurance, Housing & Community Opportunity Committee on Financial Services, United States House of Representatives, July 13, 2011: On faulty regulatory aim: “The primary reason why recent regulatory changes have done more harm than good for both businesses and consumers is that these regulations, by design or through implementation, disproportionately target individuals, entities, and the disclosure of information rather than addressing specific issues related to faulty products or bad behavior.” On the impact on the mortgage industry: “Because of these regulations, the livelihood of individuals and the survival (of) many entities, large and small, within our industry is being severely threatened. Consumers too are already suffering, as competition continues to deteriorate and the mortgage marketplace becomes increasingly dominated by only a few of the industry’s largest entities.” On the impact on consumers: “Consumer fees have increased substantially as lender and originator expenses per-loan are estimated to have risen by nearly $1,000 from the fourth quarter of 2010 to the first quarter of 2011. Additionally, many consumers are not receiving the time and attention they deserve from their loan originator, particularly if the consumer is seeking a smaller loan amount because such smaller loans have become increasingly unprofitable for the originators and their employers.” On mortgage business performance: “Across the board, entities in the mortgage origination business have seen their profits-per-loan drop by an estimated 66 percent, and individual loan originators have seen their compensation cut by 33 percent or more in some areas. According to a recent survey conducted by the Mortgage Bankers Association, the average per-loan profit for an entity in the first quarter of 2011 was just $346, which was down from a $1,082 in the previous quarter, and down from $608 just one year earlier. The survey also found that 63 percent of the 329 responding firms posted pre-tax profits for the first quarter of 2011, compared to 84 percent in the quarter prior.” On the current business climate for mortgage brokers: “NAMB is gravely concerned that the recent changes promulgated by the Federal Reserve Board and Congress have done little to address the significant root causes of our mortgage and housing crisis, facilitate a recovery in the market, or create a more consumer-friendly mortgage lending environment. In the few short months since the Federal Reserve Board’s rule on loan originator compensation was implemented, mortgage broker businesses have suffered significant and irreparable harm as a result of these new requirements.” On the problematic definition: “The primary flaw in the rule that is causing the harm … is the Federal Reserve Board’s definition of the term ‘loan originator.’ The Board has defined ‘loan originator’ to include mortgage broker businesses, as well as the individual loan originator employees working for those businesses. However, the Board has chosen to exempt mortgage lending businesses (i.e., ‘creditors’) from this definition, even though their individual loan originator employees are also covered by the definition of ‘loan originator’ in the rule. This disparity in the treatment of mortgage broker businesses and mortgage lending businesses has placed mortgage brokers at a considerable competitive disadvantage in relation to their competition in two primary respects. First, a mortgage broker is prohibited from ever adjusting its price, up or down, to benefit a consumer or secure a transaction, while a mortgage lender remains free to adjust its pricing for any reason as circumstances may warrant. Additionally, a mortgage broker is prohibited from compensating its employee loan originators on a commission basis, which remains the most economically viable means for a small business mortgage originator to compensate its individual loan officers.”

Leading Mortgage Bankers Out of Chaos: Utilization of SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) By Debra Gaveglio

Strengths

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Weaknesses The next step is citing the “Weaknesses.” Inefficient transactional due diligence and post-closing quality control (QC) poses risk throughout the

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The first step in the SWOT is the examination of “Strengths.” Leading Change’s eight critical success factors bear a clichéd theme: “Tone at the Top.” Mortgage bankers can utilize this straightforward approach methodology for business transformation. A key component in sustainability is adapting to change. The first step is creating a vision with an urgently communicated message communicated from the top down. The second step is to build a guiding coalition powerful enough to effect change. The third step is a strategy for change and the fourth is to communicate the change of vision with the coalition leading the charge. No mortgage banking entity will be successful unless the masses buy in to the concept—the guys in the trenches doing the work. Action is taken in the fifth step to reduce obstacles that undermine the goals. The sixth step is short-term wins; grabbing the low-hanging fruit. Shortterm obtainable goals foster the buy-in

of the masses when change is visible. The implementation of short gains enables step seven which is the increase of business transformation. New projects are considered with a strong core team of change agents. The final step is anchoring change into the corporate culture. The success of sustainable change begins with the tone set at the top. The definition of office space is progressing into a virtual world. Successful mortgage bankers who embrace mobility and virtual office spaces can seek to increase efficiency and productivity. With a movement away from a traditional physical locality, a flexible lifestyle and an efficient workplace can seek to meet in the middle. It makes sense for mortgage bankers to humbly self-identify inefficiencies and gaps in compliance to affect change. Prudent project management plans can mitigate the identified risks in the change lifecycle. From my perspective, a conservative approach to reserving for risk and revenue sharing is the name of the game. Mortgage bankers who embrace technology support an evolution towards increased transparency and accountability. Stakeholders throughout the lifecycle of a mortgage asset can engage in system and data integration efforts through digital service vendors, “COTS” (Commercial Off The Shelf) and customized technology tools. With increasing opportunities to share, store and transport data in the internet “cloud,” a potential for cost reduction in the infrastructure exists. It is necessary to note that the security of data and the protection of privacy in a virtual cloud environment is evolving. Mortgage bankers who embrace technology utilize these key business drivers to succeed.

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The new world order of mortgage banking requires the flexibility to adapt to evolving conditions and the ability to reinvent yourself as market conditions dictate. In assessing the sustainable health of the mortgage banking industry, it makes sense to employ certain tools such as a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis. The relatively simplistic SWOT matrix was utilized in the 1960s and 1970s by Albert Humphrey at California’s Stanford Research Institute. SWOT provides valuable intelligence for the planning of business transformation strategies. The book Leading Change by John P. Kotter adds value to the assessment with an eight-step approach. Kotter describes the guiding principles to mitigate the risk of change failure as mortgage bankers adapt to the future state of the industry. To provide a relevant example of a SWOT analysis, four attributes applicable to the mortgage banking industry are discussed for each of the four steps in the SWOT analysis.

lifecycle of a mortgage on the proposed “skin in asset. Building a robust the game” risk retention process for the review of rule (Section 941 of the assets can be a costly and Dodd-Frank Act), for complicated process to example, hampers risk implement and maintain. mitigation. Proposed Once a settled asset is changes to underwriting purchased and sold in the criteria for mortgage secondary marketplace, loans can have a direct the lack of clarity around impact how the industry certain representations reacts. The Dodd-Frank and warranties adds risk. legislation will increase Buy-in from the mortgage “Successful mortgage investor risk retention banking industry is neces- bankers will adapt to and regulatory oversary to support QC plans sight by governmental the President’s jobs which impact the cost of agencies on the finanplan, debt ceiling doing business. The cial markets. extension issue and absence of comprehensive proposed Dodd-Frank The possibility of deanalysis of significant find- legislative requirements r e g u l a t i o n v e r s u s i n ings must be mitigated. by clearly establishing creased regulation will Without a robust depend on how governthe roles, process to insure confiment, government-sponresponsibilities and dence in the data transsored and private marliabilities of the mitted throughout the ketplace entities respond. originators, sellers lifecycle of a mortgage These factors are diffiand servicers.” asset, systemic risk cancult to predict. Historinot be prudently mitigated. The con- cally, weaknesses in the housing solidation of “siloed” data throughout market become systematically visia mortgage banking organization’s ble as the industry is stressed. legacy systems is a complicated task if Market movements over time indinot gathered at the birth of a mort- cate the housing market will ebb gage asset and maintained through- and flow. When the check and balout its lifecycle. Lack of clarity with ance system is laden with risk, the respect to the liability and identifica- volatility can be severe with the axe tion of the legal owners of record as fall point and recovery period assets bought and sold adds risk. being unpredictable. With respect to President Barack Obama’s jobs data transmission and security speech, the debt ceiling extension mat- requirements, the assessment for ter and the Dodd-Frank Act all add risk any technology optimization and to the ability to accurately assess the modernization should align with impact of regulatory requirements. current assessments of the regulaAmbiguity surrounding the legislation tory environment.

Opportunities

There is tremendous â&#x20AC;&#x153;Opportunityâ&#x20AC;? to affect change in the mortgage banking industry. Successful mortgage bankers will strive to increase the efficiency of the way they do business with back to basic principles. Current housing market conditions support a conservative and balanced system of revenue sharing with loss participation in transactional agreements. Establishing a strong foundation of transparency and accountability from loan origination application process to closing and then to the sale of the asset makes sense for long-term sustainability. A transformation project plan for successful mortgage bankers can capitalize on opportunities by aligning the business needs and requirements with the technology and the trifecta: To incorporate a robust risk and fraud mitigation program. Successful mortgage bankers will adapt to the Presidentâ&#x20AC;&#x2122;s jobs plan, debt ceiling extension issue and proposed Dodd-Frank

transformation and modernization initiatives. The success of a mortgage banking business forward plan can be threatened by the sustainability of fiscal backing. The structure of organizational charts that exist in financial institutions is unpredictable. Volatility in the marketplace, loss of subject matter expertise through natural attrition, reorganizations, changes to senior management and to the business plan can impact the success the mortgage banker. If the leadership of a given organization is inconsistent, so is the message which will impair embedding change in the culture. Will legacy credit losses ever sunset? The lack of clarity around liability and the cost of time-consuming litigation spent determining such liability will continue to stress the industry. If the determination of who should bears the credit loss lacks clarity, the perpetuation of legacy loss is an Threats The final step is to identify the â&#x20AC;&#x153;Threatsâ&#x20AC;? to ongoing threat. Dodd-Frank calls for establishing threshsuccess. Process snags, human capital and budget will impact the success of business olds of credit risk retention (skin in the legislative requirements by clearly establishing the roles, responsibilities and liabilities of the originators, sellers and servicers. The opportunity to evolve industry best practices in this arena exist, it is the fiduciary responsibility of mortgage bankers to take part in solutions going forward. Modernization through technology bears mentioning one more time. The successful mortgage banker should align the appropriate subject matter expertise to address the notoriously paper-laden industry. This can promote an improved best practices approach for the reduction of manual and duplicative processes and for the quality of data available for analysis. These goals should incorporate business intelligence tools to promote robust reporting capabilities.

game) and for the modification of underwriting standards that will disqualify certain mortgages from risk retention exemptions The proposed levels of five percent will ultimately be passed on to the consumer. In conclusion, the SWOT analysis can be a powerful brainstorming exercise to foster change in the mortgage banking industry. The identification of the â&#x20AC;&#x153;Strengthsâ&#x20AC;? and â&#x20AC;&#x153;Opportunitiesâ&#x20AC;? can become the foundation for the next step: Establishing a business plan, obtaining stakeholder buy-in, procuring funding, and engaging subject matter expertise to deploy results. Debra Gaveglio is a senior consultant at Actualize Consulting, has managed a variety of derivative and structured fixed-income debt products during her 25 years of experience in the mortgage industry. She may be reached by phone at (267) 760-1396 or email dgaveglio@actualizeconsulting.com.

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Mortgage Companies Breaking the 2011 Inc. 500 List

A Bright Spot in

Each year, Inc. magazine releases its list of the top 500 growing companies in the United States. The prestigious Inc. 500 list is published annually and recognizes those private U.S. corporations who have experienced significant expansion and growth over the past year. In 2011, a number of mortgage-related companies populated the list. As many feel the industry is going through a state of flux at this point in time, the following companies have proven the skeptics wrong and have seized their own niche in the market.

Number 22—Valuation Management Group ValuationManagementGroup.com Founded in 2006, Marietta, Ga.-based Valuation Management Group (VMG) has experienced a three-year growth spurt of 7,910 percent. A provider of national commercial and residential appraisal management services for community banks, mortgage bankers and brokers, wholesale lenders, and credit unions, VMG earned $25.4 million in total revenue in 2010.

Number 140—Stonegate Mortgage StoneGateMTG.com Founded in 2005 and headquartered in Fishers, Ind., Stonegate Mortgage is a lender and servicer offering purchase and refinance loans through a variety of products, including government-sponsored or insured programs such as GSE, FHA, VA and USDA loans. In 2007, Stonegate earned $731,845 in revenue, and in 2010, saw $15.4 million in earnings, a 2,011 percent rise in growth.

Number 149—LeaderOne Financial

Wholesale Lending

Leader1.com Founded in 1992 by A.W. Pickel III, former president of the National Association of Mortgage Brokers (NAMB), LeaderOne Financial is a full-service mortgage banking operation currently underwriting and servicing more than $100 million in conventional and government loans. LeaderOne has seen a three-year rise in annual revenue of 1,882 percent, earning $1.3 million in 2007 and $25.6 million in 2010.

Number 205—Urban Lending Solutions Urban-LS.com Founded in 2002 by current CEO Charlie Sanders, Pittsburgh, Pa.-based Urban Lending Solutions, with offices in Charlotte, N.C. and Broomfield, Colo., is a certified Minority Business Enterprise, providing real estate information products to mortgage industry. The company has seen a three-year earnings growth of 1,529 percent, earning $127.3 million in total revenue in 2010.

Number 215—Integrity First Financial Group

Number 222—US Appraisal Group

Number 345—Flat Branch Home Loans FlatBranchHomeLoans.com Flat Branch Home Loans was launched in 2006 in Columbia, Mo. with the mission of making the home-buying process easy and efficient with nine offices throughout the state of Missouri. In 2007, the company earned $380,063 in total revenue, a total which rose to $4.1 million in 2010, a 974 percent increase over the span of three years.

#1 USDA RD lender in multiple states Quality FHA/VA lender Innovative technology Direct access to your underwriter Instant closing docs

www.PolarisHFC.com 616-667-9000 info@PolarisHFC.com

Number 347—America’s Mortgage Professionals NMLS ID#: 38072 Licensed in: AL, AR, AZ, FL, GA, IL, IN, IA, KS, KY, MI, MN, MO, MD, OH, OK, PA, NC, SC, TN, TX, VA, WV, WI

OCTOBER 2011

AMPRefi.com Based in Ft. Lauderdale, Fla., America’s Mortgage Professionals was founded in 2007 and specializes in residential mortgages, including FHA, VA, Freddie Mac and Fannie Mae offerings. The company earned $413,424 in revenue in 2007, and just three years later, that total jumped to $4.4 million, a 968 percent rise over the three-year span.

KANSAS MORTGAGE PROFESSIONAL MAGAZINE

USAppraisalGroup.com Founded in 2003 and headquartered in Chicago, US Appraisal Group provides real estate appraisal services for lenders, attorneys, relocation companies, homeowners, developers, corporations, and estate and financial planners. In 2010, the company earned $3 million in total revenue, a rise of 1,432 percent over its earnings in 2007 of $194,806.

Same owner navigating industry since 1986. Privately held.

NationalMortgageProfessional.com

IntegrityDirectMortgage.com San Diego, Calif.-based Integrity First Financial Group was founded in 2006 and offers consumers mortgages with no obligation or upfront cost. In 2007, the company earned $373,862 and in 2010, earned $5.8 million in total revenue, a growth of 1,146 percent.

Featured Exhibitors at the MBA’s 98th Annual Convention & Expo October 9-12 at the Hyatt Regency Chicago Company/Contact

Why you should connect with this company

About the company

Virtual Corporate Office provides your business a platform in the clouds.

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

The clock is ticking; get your CE hours in with AllRegs Academy!

Mortgage industry resources, training and business intelligence.

Come by and visit us at Booth #703 for your chance to win an iPad!

Web’s leading aggregator of financial rate info.

User Conference on November 15th will highlight three NEW Calyx products!

The most used LOS provider offering affordable and compliant solutions.

Take our 90 Day Challenge and we WILL OUTPERFORM your current AMC.

Class Appraisal is ranked as the number one AMC nationwide by our clients!

Comergence REALM IQ—Business intelligence solution is coming soon!

We specialize in mortgage originator due diligence and surveillance.

Lending Hand—Evaluation of credit files and in-depth analysis.

Credit Plus is a credit reporting provider to the mortgage industry.

National introduction of Mortgage PreFlight.

Founded in 1990, serving the mortgage lending community nationwide.

Enhanced e-Sign functionality to our initial disclosures services.

Compliant closing and initial mortgage document preparation services.

Major enhancements just made to ValueGUARD, collateral risk solution.

Interthinx is a leading national provider of risk mitigation solutions.

(888) 934-7740 MortgageVCO.com

(800) 848-4904 www.allregsmortgage.com

(561) 630-1257 Bankrate.com

(800) 362-2599 www.calyxsoftware.com 46

OCTOBER 2011

KANSAS MORTGAGE PROFESSIONAL MAGAZINE

NationalMortgageProfessional.com

(866) 333-8311 www.classappraisals.com

(714) 489-8859 www.comergencecompliance.com

(800) 258-3488 www.creditplus.com

(800) 445-4922 www.CreditTechnologies.com

(800) 554-1872 idsDoc.com

(800) 333-4510 www.interthinx.com

Featured Exhibitors at the MBA’s 98th Annual Convention & Expo October 9-12 at the Hyatt Regency Chicago Company/Contact

Why you should connect with this company

About the company

Get details about LPS’ new Loan Quality Gateway and more—Booth 1119.

Proven Expertise. Trusted Solutions.

New multimedia retention programs with online survey and referral form.

LoyaltyExpress is the leading mortgage marketing company.

Mortgagebot will reveal results from their Benchmarks 2011 Report.

Leader in Internet-based mortgage point-of-sale (POS) technology.

loanQuest—Smart, compliant, easy.

mortgageflex provides loan origination and servicing software.

Take control with NewDay Financial’s NEW Correspondent Program!

NewDay Financial is a leading VA and reverse lender in America.

NYLX LoanDecisions will soon include Mortgage Harmony HarmonyLoan™.

NYLX LoanDecisions automates product eligibility and loan pricing.

Our customized appraisal solutions meet UAD/UCDP compliance standards!

StreetLinks provides a broad and innovative suite of lending solutions.

Condo Project Review—Gerry Glavey, a 37-year HUD veteran heads up the team.

UHS America is comprised of a highly-specialized team of professionals.

Industry veteran Mike Forgas joined the team as Chief Strategy Officer.

ULS provides residential & commercial mortgage products and services.

Sapphire: Web-based ordering and review platform for property valuation.

Veros provides tools for property valuation and risk assessment.

(800) 991-1274 www.lpsvcs.com

(877) 938-1175 www.loyaltyexpress.com

www.mortgagebot.com

(800) 326-3539 www.mortgageflex.com 47

(866) 300-8289 www.newdaycorrespondent.com/mba

(800) 778-4920 www.streetlinks.com

(570) 325-2818 www.urban-ls.com

OCTOBER 2011

(714) 415-6300 www.veros.com

KANSAS MORTGAGE PROFESSIONAL MAGAZINE

(877) 899-3760 uhsamerica.com/management_team.html

NationalMortgageProfessional.com

(866) 557-6959 www.nylx.com

Accounting and Audit

Branch Manager

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

Mark Wilson Certified Public Accountants 9455 Ridgehaven Ct, Suite 101 • San Diego, CA 92123 619-649-0712 www.markwilsoncpa.com 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 www.iservelending.com afriedman@iservelending.com 415-298-2500 Freedom Mortgage Corporation www.fmbranch.com info@fmbranch.com 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 www.HVCCAppraisalOrdering.com 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 • www.joinguaranteed.com 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 moreinfo@htlenders.com www.hometownbranch.com

OCTOBER 2011

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE

NationalMortgageProfessional.com

CENTERED ON YOUR NEEDS - FOCUSED ON YOUR SUCCESS

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 www.streetlinks.com sales@streetlinks.com 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 RealEstateBestJobs.com ....................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 www.streetlinks.com.

Inlanta Mortgage W229 N1433 Westwood Drive, Suite 103 Waukesha, WI 53186 www.inlanta.com • 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 www.inlanta.com.

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 @ www.Concordchurchfinance.com 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 start@loyaltyexpress.com www.loyaltyexpress.com 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 www.docvelocity.com (877) 362-8356 sales@docvelocity.com 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 www.docvelocity.com to find out more.

Abacus Mortgage Training and Education PO Box 780 Summerfield, NC 27358 888-341-7767 • www.GetYourEd.com 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 www.MortgageSuccessSource.com Email: info@MortgageSuccessSource.com Time is running out...are you ready?

Document Preparation

apkazazis@optonline.net • www.nycrealestateexpo.com

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

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.

Franchise

Mortgage Banking Systems - ProClose 1360 Beverly Rd. Ste 200, McLean, VA 22101 800-783-2283 · sales@proclose.com www.ProClose.com 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.

49 LenderCity Home Loans 888.880.2489 www.LenderCity.com

• 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 www.firstnationalcompliance.com

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.

Events

Doc Management

Robertson | Anschutz 800-343-7160 sbertrand@radocs.com www.radocs.com/info.html

• 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 stephen.bertrand@docsondemand.net www.docsondemand.info Your Complete Mortgage Marketing Solution. Call Us Today! (800) 922-9860 www.envisiondirect.net/catalog/mortgage.htm

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. www.CBspecialty.com

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 windvestcorp.com!

OCTOBER 2011

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 WeApproveLoans.com

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE

Mortgage marketing company with decades of combined experience providing quality leads, mailers, lists and dialer products. www.bestratereferrals.com & www.mortgageleads.org

NationalMortgageProfessional.com

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

MortgageLoan.com Advanced Data (800) 537 - 0458 www.advanceddata.com verifications@advanceddata.com 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!

Regulatory/Compliance

Leads

www.mortgageloan.com • 877-390-4750 MortgageLoan.com 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 www.ComergenceCompliance.com

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 50

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.

Leads

Polaris Home Funding Corp. 616-667-9000 timeforachange@polarishfc.com www.polarishfc.com/timeforachange #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 sales@calyxsoftware.com www.calyxsoftware.com

OCTOBER 2011

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE

NationalMortgageProfessional.com

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 www.Bankrate.com • 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 www.bankrate.com/cpcprogram/ for more details.

(800) LOANS-15 www.usmortgage.com 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.

www.LendingForms.com 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 tom.sirico@usmortgage.com. We look forward to sharing our services with you!

Sign-on weekly at nmpmag.com/lykkenonlending Loanbright 27902 Meadow Drive, Suite 375 Evergreen,CO 80439 866-391-2709 • www.Loanbright.com 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.

Wholesale/Correspondent

Wholesale/Residential

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.

Wholesale/FHA

Icon Residential Lenders (888) 247-4207 www.iconwholesale.com

Flagstar Wholesale Lending www.wholesale.flagstar.com (866) 945-9872 WLSC@flagstar.com 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 (wholesale.flagstar.com) 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 wholesale.flagstar.com 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 • www.terracemortgage.com 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 www.veros.com • @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 www.nwecorp.com 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

nmpmag.com/directory_list

OCTOBER 2011

Contact Stu Ehrlich in our HR department at sehrlich@cbcnationalbank.com for further details.

Call 888-409-9770 ext. 4

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE

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.

NationalMortgageProfessional.com

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

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

Thursday-Friday, November 10-11 2011 Eastern Mortgage Summit Education & Expo Charlotte Marriott City Center 100 West Trade Street Charlotte, N.C. For more information, call (919) 783-0767or visit www.NCMortgageProfessionals.org.

OCTOBER 2011 Sunday-Wednesday, October 9-12 Mortgage Bankers Association’s 98th Annual Convention & Expo The Hyatt Regency 151 East Wacker Drive • Chicago, Ill. For more information, call (800) 793-6222 or visit MortgageBankers.org.

Friday-Saturday, October 14-15 National Association of Professional Mortgage Women Northwestern Region Fall Conference Tukwila Embassy Suites 15920 West Valley Highway • Seattle For more information, call (360) 705-5053 or visit NAPMW.org.

NOVEMBER 2011 Tuesday-Thursday, November 1-3 Third Annual Northeast Conference of Mortgage Brokers Presented by the Maryland Association of Mortgage Professionals (MAMP), the New Jersey Association of Mortgage Brokers (NJAMB) and the Pennsylvania Association of Mortgage Brokers (PAMB) Trump Taj Mahal Casino Resort 1000 Boardwalk at Virginia Avenue Atlantic City, N.J. For more information, call (732) 596-1619 or visit NJAMB.org.

Friday-Saturday, November 4-5 National Association of Professional Mortgage Women Western Region Fall Conference Bahia Resort Hotel 998 West Mission Bay Drive San Diego For more information, call (602) 277-3800 or visit NAPMW.org. Wednesday-Friday, November 9-11 National Credit Reporting Association 19th Annual Conference Astor Crowne Plaza 739 Canal Street New Orleans For more information, call (630) 539-1525 or visit NCRAInc.org. Thursday-Friday, November 10-11 2011 Oregon Association of Mortgage Professionals Annual Convention Multnomah Athletic Club 1849 Southwest Salmon Street Portland, Ore. For more information, call (503) 670-8586 or visit OAMPOnline.com.

Tuesday-Friday, February 21-24 2012 National Mortgage Servicing Conference & Expo Orlando World Center Marriott Orlando, Fla. For more information, call (800) 793-6222 or visit MortgageBankers.org.

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 MBAG.org.

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 MBANJ.com.

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 MortgageBankers.org.

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 MDMtgPros.org.

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 MortgageBankers.org.

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 MortgageBankers.org.

RTGAGE PRO O M

NMP

SSIONAL

OCTOBER 2011

Monday-Wednesday, October 24-26 National Reverse Mortgage Lenders Association 2011 Annual Meeting & Expo Renaissance Boston Waterfront Hotel 606 Congress Street • Boston For more information, call (202) 939-1784 or visit NRMLAOnline.org.

Thursday, November 3 2011 Utah Assocation of Mortgage Brokers Annual Expo Noah’s 32 West 11000 South South Jordan, Utah For more information, call (801) 597-2122 or visit UAMB.org.

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 MortgageBankers.org.

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 MortgageBankers.org.

KANSAS MORTGAGE PROFESSIONAL MAGAZINE

NationalMortgageProfessional.com

Friday, October 21 Kentucky Association of Mortgage Professionals 2011 Annual Convention & Trade Show Four Points Sheraton 1938 Stanton Way • Lexington, Ky. For more information, call (270) 929-2836 or visit KYAMP.net.

Wednesday, November 2 2011 Missouri Association of Mortgage Professionals Convention & Trade Show St. Charles Convention Center 1 Convention Center Plaza St. Charles, Mo. For more information, call (314) 909-9747 or visit MAMB.net.

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 MortgageBankers.org.

NATIONAL

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 newsroom@nmpmediacorp.com.

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 NAMBWEST.com.

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 MortgageBankers.org.

MAG

AZIN

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

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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 .

www.Fmbranch.com 800.220.9498 Info@Fmbranch.com 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.

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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. ÂŠ 2011 Flagstar Bank