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


Kentucky Association of Mortgage Professionals P.O. Box 1641 O Owensboro, KY 42302 Phone: (270) 929-2836 O Fax #: (270) 574-0005 E-mail: O Web site: Brady Webb Richard D. Hatfield Margaret Miller Brad Chambliss Ron Mitchell, CRMS Nicolas M. Ellis, CMC, CRMS Don Rupert Marty Preston Darlene Conkright

OFFICER AND DIRECTORS President (502) 327-9770, ext. 222 Vice President/NAMB Delegate (270) 965-9695 Council Alternate Secretary/Treasurer (502) 400-6100 Director/NAMB Delegate Council (270) 763-8111 Member Director/Parliamentarian (502) 859-2076 Director (502) 371-5005 Director/NAMB Delegate Council (502) 425-6345 Alternate Director (859) 293-0411 Executive Director/NAMB Delegate (270) 929-2836 Council Member

OCTOBER 2012 Monday, October 15 NMLS #2800 Eight-Hour SAFE Core Comprehensive Pennyrile Area Development District 300 Hammond Drive Hopkinsville, Ky. 9:00 a.m.-5:00 p.m. Tuesday, October 16 KAMP Board of Directors Teleconference 9:15 a.m.-10:15 a.m. Tuesday, October 23 Non CE-How to Improve Credit Scores for Your Customers Location to be determined Louisville, Ky. 3:00 p.m.-5:00 p.m. KAMP Meet ‘N Greet Location to be determined Louisville, Ky. 5:30 p.m.-7:30 p.m. (search National Mortgage Professional Magazine)

Got an opinion? Want to share your thoughts on the industry?

DECEMBER 2012 Tuesday, December 11 KAMP Board of Directors Teleconference 9:00 a.m.-10:00 a.m. NMLS #2800 Eight-Hour SAFE Core Comprehensive Site to be determined Louisville, Ky. 9:00 a.m.-5:00 p.m. Wednesday, December 12 NMLS #2800 Eight-Hour SAFE Core Comprehensive Site to be determined Lexington, Ky. 9:00 a.m.-5:00 p.m. For information on all KAMP events, call (270) 929-

Wednesday, October 31 NMLS #2800 Eight-Hour SAFE Core Comprehensive Location to be determined Florence, Ky. 9:00 a.m.-5:00 p.m. NOVEMBER 2012 Tuesday, November 6 NMLS #2626 Four-Hour Kentucky Law Elective Site to be determined Louisville, Ky. 9:00 a.m.-5:00 p.m.

For information on all KAMP events, call (270) 929-2836, e-mail or visit

KY 1


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Tuesday, October 30 NMLS #2626-Kentucky Law: A Review of KRS 286.8 & 360.100 Location to be determined Florence, Ky. 1:00 p.m.-5:00 p.m.

Wednesday, November 14 NMLS #2800 Eight-Hour SAFE Core Comprehensive Site to be determined Lexington, Ky. 9:00 a.m.-5:00 p.m.


d r ne Lea s n o s rida Les ss: ut of Flo hem e: O r Bo c S e d v u age Fra erco s M o rtg Un d ast Texa E r jo a M 203(k) Rehab Loan Program: Foreclosures Present Challenges, Opportunity NMLS an d St ate Testing fo r Mortgage Pr ofessionals

KAMP Meet ‘N Greet Location to be determined Lexington, Ky. 5:30 p.m.-7:30 p.m.

Tuesday, November 13 KAMP Board of Directors Teleconference 9:00 a.m.-10:00 a.m. NMLS #2800 Eight-Hour SAFE Core Comprehensive Site to be determined Louisville, Ky. 9:00 a.m.-5:00 p.m. O

Wednesday, October 24 Non CE-How to Improve Credit Scores for Your Customers Location to be determined Lexington, Ky. 3:00 p.m.-5:00 p.m.

Wednesday, November 7 NMLS #2626 Four-Hour Kentucky Law Elective Site to be determined Lexington, Ky. 1:00 p.m.-5:00 p.m.



KY 2

National Mortgage Professional Magazine

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September 2012




Volume 4, Number 9


Web Site



A Special Look at “Certification, Education & SAFE Act Compliance”

America’s Choice Home Loans .......................... ......................Inside Back Cover

The CFPB is the New Sheriff in Town … Ready for a Visit? By Ginger Bell ........................................36 .................................... ..........................31 & 46

Leveraging Your Mortgage Education to Win in Today’s Market By Jeff Mifsud ........................................38

Frost Mortgage Lending Group .......................... ..............................45

Calyx Software ................................................ ......................................19 CBC National Bank .......................................... ..............................................9 Document Systems, Inc./DocMagic .................... ............................................23

First Guaranty Mortgage Corp. .......................... ......................................17

Guaranteed Home Mortgage Company .............. ............................................27

Finding the Right Mortgage Education Provider By Sharmen Lane ..................................................................39

Icon Residential Lenders, LLC ............................ ........................................5

Learning in the Mortgage Industry is More Important Than You Think By Judy Wheatley & Alice Alvey ....40

LoanMarq ........................................................ ............................................43 .................................... www, ..................................45

MBA-NJ/NJAMB ................................................ ................................................30


Meadowbrook Financial Mortgage Bankers Corp. .. ..................................11

A Matter of Trust By Al Crisanty ..........................................4

Menlo Park Funding ........................................ ................................31

The Supreme Court Presented With Major Decision in McBurney v. Young By Terry W. Clemans ..........4

Mortgage Brokers Network Corp, Inc. ................ ..............................25

CFPB Proposes Rule to Simplify Mortgage Disclosures By Laurie Spira ......................................................................6 Building a Referral Network By James Citrone ....................8

NAMB NATIONAL.............................................. ........................32, 33 & 47 NAPMW .......................................................... ..................................................20 NFM, Inc. ........................................................ ..........................................29

Never Miss an Opportunity to Impress By Mike Cox ........10

NRMLA ............................................................ ..........................................34

NAMB Perspective ..........................................................12

PB Financial Group Corp. .................................. ......................................19

National Mortgage Professional Magazine’s Legends of Lending: United Wholesale Mortgage By David J. Coster ................................................................14

Power Training LLC .......................................... ..........................35 REMN (Real Estate Mortgage Network)................ ......................................7 Ridgewood Savings Bank .................................. ....................................41

The Elite Performer: Sales or Service? By Andy W. Harris, CRMS ........................................................15

Streetlinks LLC ................................................ ....................Inside Front Cover

For Managers Only: Managing for the Future (Part I) By Dave Hershman ................................................................18

The Bond Exchange .......................................... ................................39

A Watchdog for the Warrior By Louise Thaxton ..................24 Combating Mortgage Fraud With Technology By Greg Holmes ..................................................................26 Bonded With NAMB: Surety Simplified With Bond Basics By Mason Grashot, CPA ..........................28 Pursuing Excellence: What Every Loan Officer Needs to Know By Casey Cunningham ................................28

How to Make $1 Million in the Mortgage Business … and Still Have a Life By Gibran Nicholas ..............................32 Maintaining (and Keeping!) Steady Customer Relations is Key to the Growth of Your Business ........42 Finding Your Leadership Edge By Dr. Joelle K. Jay ............42 ValueNation: Understanding AVM Cascades for Compliance and Efficiency By David Rasmussen ..........44

Columns Heard on the Street..........................................................6 New to Market ................................................................27 NMP Mortgage Professional Resource Registry ..........49 NMP Calendar of Events ................................................52

Veros .............................................................. ..........................................................19


NMP News Flash: September 2012 ..............................16

United Wholesale Mortgage .............................. ........................................Back Cover


Creating the New NAMB NATIONAL Conference By John Stevens ..................................................................32

TagQuest ........................................................ ..............................................21 

Do You Have the Account Executive Advantage? By Casey Cunningham............................................................22


Volume 4 • Number 9 1220 Wantagh Avenue • Wantagh, NY 11793-2202 Phone: (516) 409-5555 • Fax: (516) 409-4600 Web site: STAFF Eric C. Peck Editor-in-Chief (516) 409-5555, ext. 312 Joel M. Berman Publisher - CEO (516) 409-5555, ext. 310 David Coster Senior Editor Joey Arendt Art Director Jon Blake Advertising Coordinator (516) 409-5555, ext. 301 Beverly Koondel National Account Executive (516) 409-5555, ext. 316 Tara Cook Billing Coordinator (516) 409-5555, ext. 324

ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact National Account Executive Beverly Koondel at (516) 409-5555, ext. 316 or e-mail ARTICLE SUBMISSIONS/PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck at (516) 409-5555, ext. 312 or e-mail The deadline for submissions is the first of the month prior to the target issue. SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail or visit Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600. Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the authors alone and do not imply the opinion or endorsement of NMP Media Corp., or the officers or members of National Association of Mortgage Brokers and its State Affiliates (NAMB), National Association of Professional Mortgage Women (NAPMW), National Credit Reporting Association (NCRA) and/or other state mortgage trade associations. Participation in NAMB, NAPMW, NCRA, and/or other state mortgage trade associations events, activities and/or publications is available on a non-discriminatory basis and does not reflect the endorsement of the product and/or services by NMP Media Corp., NAMB, NAPMW, NCRA, and other state mortgage trade associations. National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, and/or other state mortgage trade associations do not make any misrepresentations or warranties concerning the regulatory and/or compliance aspects of advertisers, products or services and/or the editorial content contained in NMP Media Corp. publications. National Mortgage Professional Magazine and NMP Media Corp. reserve the right to edit, reject and/or postpone the publication of any articles, information or data.






National Mortgage Professional Magazine is published monthly by NMP Media Corp. Copyright © 2012 NMP Media Corp.

Yes … I ask, “Where are you?: The recent loan officer compensation regulation released by the Consumer Financial Protection Bureau (CFPB) for comment and slated for implementation in early 2013 is a perfect example of when trade associations work to improve their profession. After months of rumors of flat fee for LOs, the recent version presented by the CFPB contains nothing regarding a flat fee. After years of an “uneven” playing field for LO qualifications, education and continuing education, the CFPB is finally attempting to level the playing field for all LOs. And do you know why this happened? The work that goes on behind the scenes and the hours put in by the volunteer members of these trade associations is usually swept under the carpet. But, I am here this month to recognize the work of these individuals who have put so much on the line for their own livelihood. These volunteers have sacrificed time with their family and time that could have been spent doing business to ensure that all mortgage professionals, not just the ones who pay their dues, benefit in the end. They spend time away from their family, camped out in meetings and on trips to Washington, D.C. and their own state Houses locally in order to see that the industry is treated fairly. So, what am I striving for in this month’s column? I simply want you, if you have yet to do so, to get off the sidelines and get into the game. In addition to your active participation in these trade associations, your financial support and backing is equally as vital to the longevity of the industry. This month on page 13, you will find a Membership Application for NAMB—The Association of Mortgage Professionals. Explore what they have to offer for you as a member by visiting What I am getting at here is that the time of jumping onto these people’s backs and reaping the benefits of all their work should be over. Do realize that as you sit back, there are others out there, the duespaying members of your industry’s trade associations, who are paving a path to a brighter future for you? I don’t want to lecture you here either, you know they are out there and exist representing nearly every niche of the industry. I am sure you have been approached by them in the past and have deleted their emails and discarded their mailers in the trash. It is true that there is strength in numbers, and now is the time to align yourself with a trade association to bolster their ranks and have your voice heard loud and clear to the decision-makers who govern the industry. One of the steps you can take in order to become a better member and participant in the industry is by enhancing your professionalism through education and learning more about your trade. Of course now, with passage of the SAFE Act, education is required in order to be licensed in the industry. But, did you know that discounts on your education are a benefit to membership in most trade associations? Why not kill two birds with one stone by not only becoming a stronger advocate for your industry, but becoming a strong advocate who is well-educated is a bonus. This month, we focus on mortgage industry education in the era of Dodd-Frank. Kicking things off on page 36 is Ginger Bell with her article on CFPB enforcement. Ginger provides a breakdown of what to expect if the CFPB decides to examine your firm, and what steps to take now in order to avoid troubles later. Immediately following on page 38, Jeff Mifsud of Mortgage Seminars LLC details ways in which to use your continuing education and leverage it with different clients to find success in today’s ever-changing marketplace. Sharmen Lane of Loan Officer School, on page 39, discusses various educational situations and how these situations can help you in finding the ideal education partner. And wrapping up our section this month is an article from Judy Wheatley of Indecomm Global Services and Alice Alvey, founder of Mortgage U Inc. Judy and Alice drive the point home about the importance of education and exactly why and how education plays a key role into the continuing development of a mortgage professional. There are also major opportunities on the horizon for you to meet and greet your industry peers and get a better sense of the opportunities that lie in belonging to a trade association. Our Calendar of Events on page 52 highlights many of these events. Notably, Oct. 21-24 at the Hyatt Regency in Chicago, the Mortgage Bankers Association (MBA) will present their 99th Annual Convention & Expo. In addition, NAMB will host their first-ever NAMB National annual convention at The MGM Grand in Las Vegas from Dec. 7-10. Both are great opportunities to meet the movers and shakers in the industry and generate new business leads in the process. These events also provide you with the opportunity to personally thank those who are fighting your fight, and hopefully, you too will one day be among those being thanked as well as one of those fighting for the industry. This way, the next time someone asks, “Where are you?” you can reply, “I’m there.” Sincerely,

Joel M. Berman, Publisher - CEO NMP Media Corp. MO






Where are you?



From The Publisher’s Desk


September 2012




The Association of Mortgage Professionals

National Association of Professional Mortgage Women

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

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

NAMB 2012-2013 Board of Directors

National Board of Directors 2012-2013

OFFICERS President—Donald J. Frommeyer, CRMS Amtrust Mortgage Funding Inc. 200 Medical Drive, Suite D Carmel, IN 46032 (317) 575-4355 Vice President—Donald Fader, CRMS SMC Home Finance P.O. Box 1376 Kinston, NC 28503-1376 (252) 523-5800 Treasurer—John Councilman, CMC, CRMS AMC Mortgage Corporation 2613 Fallston Road Fallston, MD 21047 (410) 557-6400 Secretary—Olga Kucerak, CRMS Crown Lending 222 East Houston, Suite 1600 San Antonio, TX 78205 (210) 828-3384 Past President—Jim Pair, CMC Mortgage Associates Corpus Christi 6262 Weber Road, Suite 208 Corpus Christi, TX 78413 (361) 853-9987

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

Kay A. Cleland, CMC, CRMS KC Mortgage LLC 200 South Wilcox Street #224 Castle Rock, CO 80104 (720) 810-4917

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

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

Senior Vice President Christine Pollard (607) 226-1046

Secretary Sara Vasura (703) 255-7460

Vice President—Central Region Kelly Hendricks (314) 398-6840

Treasurer Jeanne Evans, CME (918) 431-0155

Vice President—Eastern Region Katrica J. Driscoll, MML, CME, CMI (919) 877-5683

Parliamentarian Hulene Works (972) 494-2788

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


2012 Board of Directors & Staff Donald J. Unger President (303) 670-7993, ext. 222 Daphne Large Vice President & Treasurer (901) 259-5105 Tom Conwell Ex-Officio & Legislative Chair (800) 445-4922, ext. 1010 Nancy Fedich Director–Conference Chair (908) 813-8555, ext. 3010 Judy Ryan Director-Strategic Alliance Chair (800) 929-3400, ext. 201 Susan Cataldo Director–Education & Compliance Chair (404) 303-8656, ext. 204

William Bower Director–Tenant Screening Chair (800) 288-4757 Mike Brown Director–Technology Chair (800) 925-6691, ext. 4350 Maureen Devine Director–Education & Compliance Co-Chair (413) 736-4511 Renee Erickson Director–New Membership & Elections Chair (800) 311-1585, ext. 2101 Terry Clemans Executive Director (630) 539-1525 Jan Gerber Office Manager/Membership Services (630) 539-1525


John Stevens Bank of England d/b/a ENG Lending 11650 South State Street, Ste. 350 Draper, UT 84120 (801) 427-7111

President-Elect Jill Kinsman (206) 344-7827


Andy W. Harris, CRMS Vantage Mortgage Group 1596 SW Boones Ferry Road, Ste. 100 Lake Oswego, OR 97035 (503) 496-0431

Vice President—Northwestern Region Debbie Tofte, GML (425) 483-3359 

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

President Candace M. Smith, CME (512) 306-6354

A Matter of Trust By Al Crisanty

In their great book, The Trusted Advisor, David Maister, Charles Green and Robert Galford provide a comprehensive review of the subject of “trust” and a roadmap for businessmen and businesswomen who seek to develop trust-based relationships with their clients. In the first chapter, they provide a list of “Traits Trusted Advisors Have in Common.” While the list reads as almost itemized common-sense, each of the 22 points is important, and its absence would diminish trust in any business relationship. As I thought about the list, I realized that trust is being broken by some lenders. The modifications to the Home Affordable Refinance Program (HARP) that have become known as HARP 2.0, have been dramatically successful in enabling tens of thousands of homeowners to refinance who were previously ineligible. Statistics show that up to 20 percent of all originations are currently HARP related. Clearly, the changes made to extend eligibility have met a real need of American homeowners. Yet, while the demand is clearly present, many lenders have limited their acceptance of HARP loans, or imposed restrictions on loans they will accept that go beyond the program requirements. For an industry that desperately needs to rebuild trust, these actions seem poorly chosen at best. Three of the 22 “Traits Trusted Advisors Have in Common” seem particularly relevant to the current situation with HARP originations: 2. Trusted advisors “are consistent (we can depend on them)” 11. Trusted advisors “are in it for the long haul (the relationship is more important than the current issue)” 17. Trusted advisors “are reliably on our side and always seem to have our interests at heart”




Despite being supported by all taxpayers with billions of dollars, the big banks have chosen to limit their HARP refinances to loans already in their portfolio. On top of that, these big banks have also eliminated their wholesale mortgage operations, greatly reducing access points for consumers to this program. These actions appear self-serving and short-sighted, and do not appear to be a solid basis for developing trust. Even some independent mortgage bankers have curtailed their acceptance of new originations, citing capacity and service issues. Moreover, many of these mortgage bankers have also placed overlays or additional requirements on borrowers that go beyond program guidelines. These actions also appear out of step with a desire to build trust. These decisions by big banks and some independent, non-depository mortgage bankers slow down the process of repairing the U.S. housing sector and the balance sheets of average Americans. The risk is that mortgage rates will rise before tens of thousands of Americans will have the opportunity to refinance, costing them dearly and placing additional, unnecessary risks, in the housing system. There are hundreds of thousands of additional American borrowers who still fall outside the eligibility requirements for HARP 2.0. Voices are growing for a Version 3.0 of the HARP program that would extend it to responsible borrowers with non-agency loans. What will lenders do then? Find ways to service these American homeowners and citizens or place additional roadblocks in their path? My firm is a wholesale mortgage banker with direct approval status with Fannie Mae. We have made it a companywide priority to seek out and serve as many American homeowners as possible with the current version of HARP, or any subsequent versions that may extend the program. We add no overlays to the existing program guidelines. Yes, this requires that we work harder and longer, but we see this as common-sense. It is good business to build trust with our clients—the mortgage brokerage community and to empower them, in turn, to build trust in their communities and with homeowners. Al Crisanty is vice president of national wholesale production for 360 Mortgage Group and is responsible for overseeing regional sales managers as the company seeks to expand operations to all 50 states. Formerly the national wholesale director for Caliber Funding, Al was responsible for the development and expansion of Caliber’s wholesale production channel. Additionally, Al served as executive vice president of national production for American Home Mortgage, successfully transitioning the 500-member production team from Capital Commerce Mortgage Company. Al may be reached by phone at (916) 761-1624 or e-mail SPONSORED EDITORIAL

The Supreme Court Presented With Major Decision in McBurney v. Young Case has huge impact on Virginia consumers’ public record access for mortgages By Terry W. Clemans

On Aug. 30, the United States Supreme Court received an Amicus Brief filed by the National Credit Reporting Association Inc. (NCRA) in conjunction with several other parties (including Consumer Data Industry Association, National Association of Professional Background Screeners, Multifamily Real Estate Information Council, Coalition for Sensible Public Records Access, Software Information Industry Association, CoreLogic, Reed Elsevier Inc., and Polk) in support of them hearing the case of McBurney v. Young. If not resolved, this case will have a huge impact on the mortgage industry due to the restrictions it brings on public record access, including that needed by credit reporting agencies to process mortgage credit reports, and other mortgage closing services. The basics of the case involve a state of Virginia statute that limits access to public records to “citizens” (or entities) of the state to protect the citizens of Virginia. This would effectively ban public record access, including that of public record aggregators (e.g., credit reporting companies, tenant screening companies), to any companies based outside of the state of Virginia, forcing them to exit the Virginia market, or to open physical offices in the state with sole purpose of processing their credit reports. In the McBurney case, this law was challenged as unconstitutional in the U.S. Federal Court’s Fourth Circuit, which upheld it from attack under the privileges and immunities and commerce clauses on two separate grounds: (1) that the effect of the ban on the petitioners’ business was merely “incidental,” and therefore, immune from challenge; and (2) that public record information is not “commerce.” The key finding that needs to be reversed to continue with business as we know it today is the latter of those two, the contention that public record information is not commerce. Chris Mohr, a partner in the Washington, D.C. firm of Meyer, Klipper & Mohr PLLC, representing the group for the Amicus, believes that “… there is a good chance for the Supreme Court to hear this case as there is a conflict with the McBurney case and another Federal Appellate Court decision.” This conflict is found in the U.S. Third Circuit, which voided a Delaware statute that barred non-Delaware citizens from filing public record requests (Lee v. Minner, 458 F.3d 194 [3d Cir. 2006]). That case was similar to the McBurney case featuring an out-of-state real estate data aggregator, who challenged the “citizens-only” provision arguing that this discriminatory limitation on access to public records was unconstitutional due to it denying the plaintiffs the privileges and immunities available to them as citizens of other states and violating the Commerce Clause. While those were successful arguments in the Third Circuit, the Fourth Circuit denied both claims. Mr. Mohr stated, “The reason the case is important is because if Virginia wins, any state can bar non-citizens from access to public records, and it’s not clear how far they can go. This case as applied to real estate lending, employment screening, and a host of other activities is as if every state did it.” Mohr added, “There are national industries that depend on nondiscriminatory access to public records, all of which would be negatively affected if the Court leaves the lower court’s decision unreviewed.” That is the most potentially dangerous precedent in the McBurney case, for all public records aggregators, and the implications extend well beyond Virginia. McBurney’s logic enables statutes in Virginia and elsewhere to discriminate against out-of-state entities. This is especially important in the mortgage market, as only one of about 70 mortgage credit reporting companies who can produce mortgage credit reports that meet federal lending criteria for mortgage transactions is currently located in Virginia. None of the three national credit bureaus who require access to the public record data for the industry to continue to function are located in Virginia. The outcome on whether or not the Supreme Court takes the McBurney case should be known by mid-October. If not, then a full court lobbying press will be needed to change the Virginia law to stop this restrictive access before serious damage is incurred by Virginia residents seeking mortgages, apartments, jobs, or any type of credit transaction. Information providers will either have to relocate an office to Virginia to service those residents, or pull out of the state entirely forcing those citizens to have a much different offering of credit terms than enjoyed by the rest of the nation. For a copy of the Amicus brief filed by the group, visit Terry W. Clemans is executive director of the National Credit Reporting Association Inc. (NCRA). He may be reached at (630) 539-1525 or e-mail

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CFPB Proposes Rule to Simplify Mortgage Disclosures By Laurie Spira

On July 9, the Consumer Financial Protection Bureau (CFPB) published a proposed rule intended to simplify and improve mortgage disclosure forms. The proposal introduces the combined Truth-in-Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) disclosure as required by sections 1032(f), 1098, and 1100A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The proposed rule also includes a detailed explanation of how the proposed disclosures should be completed. If implemented, the rule would apply to most closed-end consumer mortgages, except home equity lines of credit, reverse mortgages, or mortgages secured by a mobile home or dwelling that is not attached to real property. The proposed rule calls for two new disclosure forms: I The Loan Estimate, which would replace the early Truth-in-Lending Disclosure and the Good Faith Estimate (GFE), would be provided to customers within three business days of application. The Loan Estimate is intended to assist consumers in understanding the features, costs, and risks of the mortgage for which they are applying. The proposed rule permits either the broker or the lender to provide the disclosure; however, the lender remains responsible for the accuracy of the disclosure.


I The Closing Disclosure, which would replace the HUD-1 Settlement Statement and the revised Truth-in-Lending Disclosures, would be provided to the consumer at least three business days before closing. The Closing Disclosure provides an accounting of the settlement transaction and would also contain additional disclosures required by the Dodd-Frank Act. The closing disclosure would be delivered to the consumer by either the lender or the settlement agent, but the lender would remain responsible for the accuracy of the form.



In addition to proposing new disclosure requirements, the proposed rule provides for: I Limitations on closing cost increases: Unless an exception applies, charges for the following services could not increase: the lender’s or mortgage broker’s charges for its own services, charges for services provided by an affiliate of the lender or mortgage broker, and charges for services for which the lender or mortgage broker does not permit the consumer to shop. Charges for other services could generally not increase by more than 10%, subject to certain exceptions. I Changes to the calculation of the annual percentage rate (APR): Under the proposed rule, the APR would encompass almost all of the upfront costs of the loan. With certain limited exceptions, most charges paid at or prior to closing would be designated as finance charges. The comment period for most of the proposal ends Nov. 6, including the proposed changes to the calculation of APR and the definition of the finance charge. Initially, the comment period for the proposed changes to the calculation of APR and the definition of the finance charge was Sept. 7. However, comments are due on Sept. 7 regarding the delay of the effective date for certain disclosures required by the Dodd-Frank Act, which would otherwise be effective on Jan. 21, 2013. Laurie Spira is chief compliance officer with Torrance, Calif.-based DocMagic Inc. She may be reached by phone at (800) 649-1362, ext. 6446 or e-mail

Sponsored Editorial

Lenders Compliance Group Launches Risk Management Firm Geared Toward Brokers Lenders Compliance Group Inc. (LCG) has announced the formation and launch of Brokers Compliance Group (BCG), a full-service, mortgage risk management firm specializing in outsourced mortgage compliance and offering a full suite of services to residential mortgage brokers. Together, LCG and BCG will build on existing tools, processes, experts, risk assessments, and resources to provide a “best practices” approach to residential mortgage compliance. BCG will operate as a division of LCG. Mortgage Brokers may apply to become members of Brokers Compliance Group by visiting the BCG Web site at Brokers Compliance Group will offer guidance and services that are specific to the unique needs of mortgage brokers, by providing the following services through a low-cost monthly membership fee: Subject Matter Experts; Policies and Procedures; Weekly Compliance Hotline; Private Social Community (Invitation Only); Weekly Compliance Updates; Personalized Response; Membership Logo Certification; Special Alerts and Advisories; Loan Level Analytics; Webinars and Seminars; Special Pricing on AML Compliance, CFPB Exam Readiness, Testing, Training, Exam Preparation, Licensing, Legal Reviews and Quality Control); E-mail Replies to Inquiries, 24 hours a day, seven days a week, 365 days a year; and a free subscription to the monthly e-edition of National Mortgage Professional Magazine. “Over the years, mortgage brokers have had only their competitors, associations, and lenders to turn to for compliance guidance. That era has now ended with the advent of Brokers Compliance Group,” said Jonathan Foxx, president and managing director of Lenders Compliance Group. “For the first time, mortgage brokers have costeffective access to subject matter experts, compliance attorneys, professional consultants, and a wide array of supportive compliance services.” According to reports to the media, BCG’s monthly fee is said to be very low and is the same fee, whether the mortgage broker is a small or large entity.

The member can pay online and continue the service as long as needed. There is no penalty for withdrawing from membership. Certain add-on services, such as quality control (QC), are deeply discounted. Eligibility is based on an entity’s active licensing status through the Nationwide Mortgage Licensing System and Registry (NMLS). “Mortgage brokers have largely been ignored by law firms and compliance consultants because most brokers are just two to six people and often do not have the financial means to retain competent guidance,” said Foxx. “Our view is that establishing Brokers Compliance Group and making it affordable will level the playing field for brokers and also make them more independent and stronger, especially in dealing with their day to day compliance needs. Just like years ago when we answered the need for lenders to retain cost-effective mortgage risk management, we are now answering the same need on the part of mortgage brokers. Already, our wholesale lender clients are sending their mortgage brokers to Brokers Compliance Group to receive the kind of care and attention that they have been receiving from us all along.”

Mortgage Master Announces Companywide Expansion Mortgage Master Inc. has announced that it is enhancing its operational infrastructure by opening a new operations center in Maitland, Fla., as well as expanding its operations centers in Sea Girt, N.J. and at its corporate headquarters in Walpole, Mass. This expansion is a direct result of the company’s rapid growth, and is now projecting 2012 originations to increase to in excess of $7 billion, from $5.5 billion in 2011. As a first step in its long-term national expansion plans, Mortgage Master has opened a 4,700-square foot operations center in Maitland, Fla. and has appointed Candy Burke-Robertson to serve as operations manager of the Southeast Region. Burke-Robertson, who has 30 years of experience in the mortgage industry, will lead the operations team, which currently consists of approximately 20 professionals, as the company continues to hire in all

Kinecta Federal Credit Union Bolsters Its Mortgage Lending Ops

ward to their contributions as I am sure they will reinforce Kinecta’s overall growth trajectory as the mortgage market continues to show signs of improvement,” said Joseph Whitaker, executive vice president, chief operating officer.

LenderLive Network Approved as a GSE Servicer

LenderLive Network Inc. has announced that it has received approval as a Fannie Mae and Freddie Mac servicer. With this approval, the company is now eligible to service Freddie Mac and Fannie Mae loans. LenderLive’s loan servicing divi-

sion is one of the company’s five divisions: origination services, conduit services, settlement services, document services and loan servicing. The company recently expanded its offices in Denver and Troy, Mich., to accommodate an increased demand for the company’s services and to position it for continued growth. A third Denver location is being added to accommodate further staff and infrastructure expansion. “As the servicing market continues to change and more lenders want to retain servicing, they need assistance in doing so efficiently and without strain on their internal infrastructure,” said Rick Seehausen, president and CEO of continued on page 10



Kinecta Federal Credit Union has announced the expansion of its management team for mortgage lending operations as a part of its strategy for continued growth within its mortgage division. Mike McCarthy has been promoted to first vice president, retail mortgage origination and operations. Previously director of retail loan production, he will now also direct all loan production from the El Segundo, Calif. and Chicago centers. Before joining Kinecta in 2011, McCarthy held executive management positions with Countrywide Financial, and GMAC. Bruce Bingham has joined Kinecta as vice president, mortgage lending operations. He will oversee operations for

both processing centers and report to McCarthy. Bingham comes to Kinecta with considerable operations management experience, having worked for Bank of America, Countrywide Home Loans, Washington Mutual, IndyMac Bank and Ohio Savings Bank. Also joining Kinecta is Nancy Elander as director of mortgage lending operations. Reporting to Bingham, she will be responsible for operations involving wholesale loan processing. Elander comes to Kinecta from ING Direct, where she served as head of home loan operations, and previously, she worked with First Federal Bank of California. “We are very pleased with the caliber and breadth of experience these three executives bring to the table. I look for- 

departments. This new operations center is a key part of Mortgage Master’s plan to expand its geographic footprint. “Mortgage Master is making the necessary investments in its operational infrastructure, from talent to technology to geographic expansion, to ensure the right people, processes and procedures are in place to enhance our lending value chain,” said Paul Anastos, chief executive officer of Mortgage Master Inc. “Central Florida has a great deal of operations talent and this new center will offer tremendous support to our production professionals. The addition of Candy and her entire team will help position Mortgage Master as a more dynamic service company as we to continue to grow in Florida and throughout the southeastern market by offering high-quality borrowers the lowest interest rates in the mortgage industry and best-in-class service.” In addition, Mortgage Master is in the advanced stages of renovating its corporate headquarters building, which includes an additional 14,000-square foot expansion. Over the last 12 months, Mortgage Master has added over 120 employees, many of whom will offer operations support to help bolster Mortgage Master’s elite retail sales force. The company continues to hire processors and underwriters, as well as established loan officers, to further enhance its operational excellence and grow its retail production platform. “Mortgage Master is committed to providing the right mortgage solution through our dedicated employees, superior product and pricing, and unparalleled customer service,” said Anastos. “We are focused on becoming the premier service business, not only in the mortgage industry, but in the country.” Mortgage Master is currently licensed in 22 states and the District of Columbia, with a significant presence in California, Connecticut, Massachusetts, Maryland, New Hampshire, New Jersey, New York, Pennsylvania, and Rhode Island.

Building a Referral Network By James Citrone

In today’s ever-changing market, developing a strong referral network has become increasingly important to the success of a loan originator. Given the many obstacles you must overcome in developing this network, a broad and consistent plan should be implemented.

Building a list




First, you must identify your potential referral partners. Anyone who can vouch for your professional capabilities, character or knowledge of the industry should be considered. You should also research the top real estate agents in the area, active participants in business organizations and any other “movers and shakers� in your local community. After you have created a list containing all of your potential partners, narrow it down to a top 10 or 20. Your priority partners should encompass sources in various spheres of influence, considering the potential volume of referrals based on their profession and the number of contacts at their disposal.

Building relationships Once you have finalized your list, you need to work on building relationships. Since the days of open access to offices are gone, and without the ability to stuff rate sheets, program updates and marketing material in mailboxes of referral agents, you must develop new methods of communication. Judicious use of blast e-mails and active participation in social media will keep your name on the tip of their tongues until they need your services. Send out simple and consistent messages highlighting your services, capabilities and differentiation from your competitors. In addition to promoting your brand, you should also try to establish yourself as an expert in your field. E-mail newsletters can also be used to provide interesting material using the 80/20 rule: 80 percent of your con-

tent should be informative and vendor neutral, and only 20 percent should be purely promotional. Sending a newsletter every other month can keep you in mind until an opportunity arises.

Top 10 list Your top 10 or 20 individuals require a more focused and high-touch approach. Use lunch-and-learns, as well as joint advertising and marketing ventures, to emphasis your commitment and mutual attitude to your top referral partners. Your willingness to go beyond exceptional service and help them develop their business in a meaningful way will set you apart from the competition and strengthen the bond between you and your key referral partners.

In addition to direct communications, you should identify associations attended by your best referral partners and consider becoming a member so you can get to know them on a whole other level. In doing so, you will transform your relationships from just business to a blend of business and friendship. This transformation can prove critical in building a long-term referral partner.

In conclusion, when building a referral network, you must patiently nurture key relationships and understand it takes time to build your reputation. And that the entire process starts with just one referral, so when that referral comes, you should treat it as such! James Citrone is Mid-Atlantic regional director for Guaranteed Home Mortgage Company. Founded in 1992, Guaranteed is a licensed mortgage investment and banking firm comprised of more than 300 mortgage professionals lending in 28 states. He may be reached by phone at (914) 696-3400 or e-mail




Never Miss an Opportunity to Impress By Mike Cox Finding an edge for your business in today’s market usually focuses on adding a new technology, system or application. Mortgage industry participants spend hours on Webinars, conference calls or watching videos of the latest and greatest that will change your business for the better and finally allow you to take the weekend off. The fact is even with all the widgets and wadgets, gidgets and gadgets, the truly successful business models still focus on three fundamental principles: Organization, service and engagement. When the three fundamentals are working well in your business, your clients feel it, your referral partners feel it and you feel it. We felt it too, when we built LoanMarq. LoanMarq is designed by mortgage professionals for today’s marketplace as a simple engagement platform to organize and communicate with your clients and transaction participants and provide the “knock your socks off ” customer service that you only see in commercials. We love mortgage loan processors. There it is … we said it … and you know it’s true that the mortgage processor plays a key role in the mortgage transaction that in many cases make or break your deal. They work hard, stay late. They are the magic behind the scenes that gets it done when it needs to be done. We know you cannot live without them. We also know is that they need help. No matter how dedicated, organized and efficient they are, there never seems to be enough hours in a day to get it all done.




Automate the love If you had the chance to personally call every client, every day during their transaction, you would. It would be great customer service, you would almost never lose a client and all mortgage catastrophes would be avoided through constant communication. You would if you could inform every referral partner of the status of the transaction that they have entrusted to you. You would also ask for another. No, we will not pretend that LoanMarq will make those calls for you, because it will not. What it will do is send customizable status emails and text messages to everyone involved in the transaction when milestones are reached. We have a bunch of teenagers in the back room just sending out texts at 90 words per minute. Just kidding... The smartphone interface is just about complete and every angle will be covered. NOT one size fits all Yes, LoanMarq does come in extra medium! You can customize just about every part of the system. From the interface branding to the process configuration, emails, and text alerts LoanMarq can be reshaped to fit your business. It is not our goal to change what you do or how you do it. It is our goal to offer a tool that can automate and increase the effectiveness of your engagement. Protect your eggs You know what I mean! Your business means something to you. It takes time, effort and money to yield transactions. Not every strategy works the first time or every time. We have all lost deals to competitors and think back to the gaps in service or communication that allowed for that transaction to be taken from us. LoanMarq will help you close the gaps. Having an air-tight engagement platform will keep you in front of your clients when you need to be, answer questions before they are asked and keep competitors from exploiting a moment of doubt or indecision. Turn your business into more business We all talk about it and LoanMarq helps you do it. By engaging the client at a high level, they are more likely to send you additional business at the most optimal time (that is during the transaction). Real estate agents will naturally send you more business due to your high level of engagement. Simply put. Your level of service makes them look good. Mike Cox has been active in the mortgage industry for more than 12 years. He is currently a mortgage sales consultant and strategist working with companies across the country, films a daily video blog educating consumers called “Rates In Motion” and is also an owner and chief executive officer of Quality Lender Services (QLS). LoanMarq is a software application than was acquired and enhanced by QLS in 2012. If you would like to contact Mike, he may be reached directly by e-mail at or call (800) 705-7921.

Sponsored Editorial

heard on the street

continued from page 7

LenderLive. “It is important that we continue to enhance our service offerings as the industry evolves. Being approved by both Fannie Mae and Freddie Mac positions us to better meet the needs of our current and prospective customers.”

Churchill Mortgage Enters Recruitment Partnership With Ron Quintero Churchill Mortgage has announced a partnership with Ron Quintero, chief executive officer of the Real Estate Radio Network, a nationwide alliance of real estate professionals reporting on the current real estate market. Through this partnership, Quintero will help support the lender in recruiting, training, motivating and retaining loan officers. With Quintero’s strategic guidance, Churchill Mortgage has also created, a centralized training portal to support branch managers in recruiting and training local talent. The Web site features employee testimonials and informational videos about Churchill’s lending philosophy, in addition to information about applying for open positions. “I’m excited for the opportunity to work with a mortgage company that is not only celebrating its 20th anniversary, but continues to excel despite the challenging economic environment,” said Quintero. “Churchill Mortgage truly sets the industry standard in mortgage lending, and I look forward to supporting their recruitment efforts.” Churchill Mortgage continues to maintain steady growth and is currently on track to reach $1 billion in loans. In 2011, the lender increased staff by more than 11 percent, and continues to recruit industry talent and open new branches across the nation. “Ron’s professional insight and proven methods give us a tremendous advantage in preparing our employees for the evolving mortgage landscape as well as recruiting new staff,” said Mike Hardwick, president of Churchill Mortgage. “As we continue to grow, Churchill aims to recruit the industry’s top professionals, and we look forward to Ron’s support as we maintain our commitment to being the nation’s most trusted financial advisor.”

LPS Forms Data Exchange Partnership With RentRange Lender Processing Services Inc. (LPS) has announced an agreement with RentRange to offer rental property income data to mortgage servicers, investors and others in need of reliable

rental market intelligence to make informed decisions related to distressed housing assets. With many servicers contemplating rental programs for their acquired assets, LPS will now provide RentRange reports to clients seeking accurate rent estimates for these real estate-owned (REO) properties and to investors and others wanting established values for properties based on their rental income potential. “LPS selected RentRange because we felt it offers the best empirically based rental estimates of any product on the market today,” said Rob Walker, managing director of LPS Applied Analytics. “RentRange is a powerful tool to help our clients make more informed decisions about real estate in a new and challenging environment.” LPS Applied Analytics will provide the RentRange solution to mortgage servicers looking to make sell or holdand-rent decisions on REO assets, or to calculate reliable rent estimates for their REO properties. RentRange can also be used by investors, asset managers, REITs or hedge fund managers seeking to value properties or a portfolio of loans based on rental income potential. RentRange reports ordered through LPS will incorporate property characteristics data from LPS’ nationwide property database for higher levels of confidence in the accuracy and quality of the reports. “The rental property market is on the rise because of low interest rates and home prices, and modest increases in rents in many markets,” said Walter Charnoff, founder/CEO at RentRange. “Our product is the best way to offer reliable rental market intelligence to those trying to understand the market and make informed decisions during this increasingly active time.”

Cogent Road Announces Integration With PriceMyLoan Cogent Road, a provider of cloud-based mortgage technologies, has announced the integration of its Roohmz Mortgage (Enterprise) Management/Loan Production System with PriceMyLoan, the automated underwriting and loan pricing system. Using investor guidelines, pricing matrices and rate sheets, PriceMyLoan returns accurate loan eligibility and pricing results. With this completely seamless integration, Roohmz Mortgage Enterprise’s comprehensive workflow management system now offers all of the notable features of PriceMyLoan. That includes the ability continued on page 19

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The President’s Corner: September 2012





here has the year gone? It seems just like yesterday we were having Christmas back at my mother-in-law’s house and all of the family was gathered around the dinner table. I feel like I have been running around and the months just keep jumping up at me. Business has been very good, and I have only one complaint … I need more loan originators! I have talked with several owners in and around Indiana and they are all saying the same thing: “I just hired two new originators and it took them 45 days to get all of their items completed and the NMLS and the state to allow them to start to work.” We need to start working on some kind of program that will entice new people to get into the business and become mortgage brokers. As I look at all of the originators who went to work for the banks and bankers, they are slowly working their way back to the broker side of the business. I am going to create a Task Force to work on something that we can do to start to promote people back into our side of the business … stay tuned! NAMB—The Association of Mortgage Professionals has a Facebook page that draws a lot of people looking as to what is going on in our business. I want to address something that came up there and maybe shed some light on what we are asked to do with reporters. I was approached by Fox Business to talk

about what can be asked when taking an application. As you know, when a reporter calls and wants to talk, you cannot always just put out there that you only want to talk about one thing. And so you know, this is a problem that has existed for years … and I mean many years! Over those years, many a person, be it male or female, has been asked questions that are not allowed. So in talking to this reporter, she asked me about the difference between a broker and a mortgage banker. That is exactly what I told her, a mortgage banker funds his loans. And in reality, that is the difference of mortgage banker and a broker. That is one step that we as brokers do not do. The ironic thing is that all of the criticism is aimed at me because you say that I do not support brokers because of that statement. I suppose you have a better definition? I am a mortgage broker. I own a mortgage brokerage company. I am the president of NAMB. Now, our Association represents the mortgage professional. We have members who are appraisers, processors, account executives of wholesale lenders, processors, title companies, owners of broker companies, loan originators, originators who work in banks, originators who work for credit unions, commercial originators, real estate agents who are also originators, and mortgage bankers and owners of mortgage banks. The most fascinating thing is that we not only represent members but nonmembers as well. We represent all mortgage professionals. And just so we’re clear, I am always working for all

of you and them! It has to do with being a professional. I volunteer all of my time to NAMB. I give up thousands of hours a year and I have given up thousands of dollars to make sure that the job that I love and the profession that I love is still here and all mortgage professionals are represented and protected. Our NAMB Government Affairs Committee Chair John H.P. Hudson also gives up time and money. And yes, he is also working to protect the mortgage professional. Why? Because without people like John and myself, and the other members of our Board who give up numerous hours of time and money, we would all be working, doing something else and probably not in the mortgage business. But I think the real question is why are these people …the ones who always complain and have an opinion on everything … are not members of NAMB. Besides the national association, there are state associations that are also working very hard giving their time and energy representing those people each and every day. According to statistics that I have received from lenders and wholesalers, the average fee on a loan that closes is around $4,300. That is a pretty good living if you ask me. So the real question is: “Why don’t you belong and support the very people and the associations that fight and dedicate their lives to help you?” When you realize that a Platinum Membership for NAMB is $120 per year or $10 per month, or a Silver Membership is $50 per year or just a

little over $4 each month. Don’t tell me that it is too expensive. That is not the truth. So what is it? I would really like to know. NAMB has just a little over 5,000 members. There are 113,000 loan originators out there. Do you know how brokers would be treated if we went to Washington, D.C. and told them that we represented 100,000 members? So, instead of constantly complaining about this and about that, it’s time to step up to the plate. Volunteer to help. Step up and join. I don’t care if you join as a Platinum or a Silver Member of NAMB, but first join! Then, contact me and tell me what you want to do to help us with the cause. We want you and now is the time to put your money and time where it should be … being part of the solution. And while you are at it, get your friends to join. There is no reason to have them sitting out there. We need people to help and it is about time you start doing your part. So take the challenge. I have included an application on the following page for you to complete and send in with your dues. Or, you can go to and join the association online. But, whichever way you choose, it’s time you step up and participate and quit sitting on the sidelines. Sincerely,

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

The First Annual NAMB Benefit Golf Tournament Wednesday, October 17 Coyote Ridge Golf Club • 1640 W Hebron Parkway • Dallas 1:00 p.m. Tee Time Entry Fee of $100 per player/$400 per team Great prizes and giveaways including golf clubs, gift cards and the chance to win a BMW in the hole-in-one challenge. All proceeds to benefit NAMB—The Association of Mortgage Professionals.

For more information, visit








United Wholesale Mortgage

egends are born on the field of battle or on the fields and courts of play. In the mortgage world “legendary status” is not achieved overnight—it’s earned after years of hard work, overcoming adversity and excelling where others have failed. Michigan-based United Wholesale Mortgage (UWM), a division of United Shore Financial Services LLC, and a nationwide wholesale lender, has earned over the past 26 years the right to be labeled as one of the honorary “Legends of Lending.” Some would point to another legend from Michigan to identify where United Wholesale Mortgage found its inspiration. Michigan State University has a legendary history in college basketball. From its two National Championships in 1979 and 2000, to its iconic players including Earvin “Magic” Johnson and Mateen Cleaves, Michigan State has established itself as one of the greatest college basketball programs in the country. Since 1995, the Michigan State University men’s basketball program has been led by future Hall of Famer Tom Izzo. Coach Izzo is famous for teaching the fundamentals—defense and rebounding—believing that a team that does those things well can compete with any other team they might play. His motto is: “Players Play–Tough Players Win.”



J .


“Our customer service is second to none. While it may be taken for granted that service is key in this industry, we take it to another level.” —Allen Beydoun, Executive Vice President of Sales United Wholesale Mortgage

United Wholesale Mortgage is led by Mat Ishbia, a former Michigan State walk-on point guard who was a member of the national championship team in 2000. Ishbia later became a graduate assistant to Coach Izzo, which continued to strengthen his own philosophies on what it means to lead a winning team. In 2003, Ishbia would bring his work ethic, winning spirit and determination that made him a champion on the basketball court to United Wholesale Mortgage.

United Wholesale Mortgage was already a leader in one aspect of the lending industry prior to Ishbia’s arrival. The firm had established itself as one of the top wholesale providers of FHA loans in the country. Paired with its sister firms, Shore Mortgage and Capital Mortgage Funding, both retail loan shops, to form United Shore Financial Services, the organization became a big fish in a small pond. Ishbia joined United Wholesale in 2003 as an account executive in the Chicago area, but within three

years had impressed the company’s leadership with his focus and intensity and was brought into the Detroit-area headquarters to become its national sales manager. When asked about what those early days were like, Ishbia stated: “We were known as an FHA lender and FHA wasn’t really relevant then. We never offered sub-prime loans because our senior management did not want them in our portfolio. We lost business during the sub-prime period, but it has proven time and time again the decision was on point and the right thing for us to do.” Then in 2007, as we all know, the mortgage industry changed drastically and sub-prime lending disappeared. It was the opportunity that United Wholesale Mortgage was prepared for— particularly with Mat Ishbia, now the company’s president, running point. As FHA lending started growing in popularity in 2008, Ishbia made a crucial business decision that facilitated United Wholesale Mortgage’s rise into the highest ranks of the industry. He decided to bring all of his account executives in-house, and all but eliminated traditional externally-based sales personnel. When asked about this move Ishbia explained: “What I wanted to find out was who they (account executives) were talking to, when were they talking to them and were they trained well-enough to rep-

resent United Wholesale Mortgage. What I found was that the outside AEs had required more extensive training. We brought all of our AEs inside and began training them like they were sales managers at broker shops or leaders at broker shops. Most people in the industry didn’t understand this change, and still most companies don’t do it this way, but I think it is a big differentiator and makes us who we are at United. My AE’s roles are not different than traditional outside AEs—we just think they are enhanced.” Now with 105 inside AEs and growing, this bold move has clearly paid off for United Wholesale Mortgage. Having all the sales representatives together within UWM’s headquarters in Metro Detroit has enabled the organization to move beyond its singular focus of FHA and become a diversified wholesale lender providing a comprehensive product mix to its brokers nationwide. Conventional loans currently encompass 85 percent of their volume, and their percentage of purchase is above the industry standard during the current refi boom. Realtors and brokers lean on UWM to meet or exceed their purchase contract dates. Another advantage that UWM has on the competition is their ability to arm their account executive team with an arsenal of innovative products, providing their broker network the best possible options for their borrowers. A prime example is their ELITE program which is said to provide the best conventional 30-year fixed rates and pricing in the industry for elite borrowers. Last year, they introduced their jumbo loan product, called The Big & Easy, which is a true jumbo loan up to $2.5 million with clear and hassle-free guidelines. Their product offerings and online broker portal, dubbed EASE, have helped differentiate United Wholesale Mortgage from their competition. Coach Izzo has famously said, “We’ll play anybody, anyplace, anytime. It doesn’t matter, morning, noon or night, and it doesn’t matter who it is.” It sounds like United Wholesale Mortgage shares that philosophy. In addition to the unique inside account executives differentiating United Wholesale Mortgage in the marketplace, Ishbia and Executive Vice President of Sales Allen Beydoun would point to two other factors that set United

United Wholesale Mortgage’s management team of Division Managers Chad Osterhout and Shaun Groves, Executive Vice President of Sales Allen Beydoun, President Mat Ishbia, Business Manager Kristina Bennett, Business Development & Training Manager Justin Glass, and Division Manager Scout Trim

Wholesale Mortgage apart and explain its rise to national prominence. Beydoun put it this way: “Our customer service is second to none. While it may be taken for granted that service is key in this industry, we take it to another level. On top of that, our commitment to the fastest possible turn times, from submission to closing, gives us a distinct advantage.” Describing this customer service superiority in more detail, Beydoun explained that it all goes back to having the AEs and operations staff together in one office. “UWM employees come to work knowing that they are experts in their field. This is not just a job to them, and that is projected in our customer service and communication. When you have a question, the answer can be found in a matter of minutes,” he said. He further explained that all calls are answered by a live receptionist and routed to the correct person the first time, and underwriters are always available to speak with you directly. Underwriters proactively call out every loan and update to conditions. Giving brokers direct access to a dedicated underwriting team has created a unique structure at UWM that guaran-

tees second-to-none service levels. UWM is continually analyzing ways that they can make the lending experience even easier for their brokers. This continuous improvement commanded the creation of UWM’s slogan: Lending Made Easy. UWM listens to their broker’s needs and reacts with innovative solutions. Backed by a massive in-house IT team comprised of professionals with extensive mortgage technology backgrounds, UWM is able to create their own proprietary online tools. Their commitment to Lending Made Easy doesn’t sit idle. UWM is constantly staying on the forefront of technology to provide cutting edge mortgage tools to make the entire loan process even easier for brokers and their borrowers. United Wholesale Mortgage has big goals. Chief among them is to become a constant presence in the top five of wholesale mortgage lenders. With the departure of the biggest banks from the wholesale market, United Wholesale Mortgage is seizing this opportunity to continue its growth while maintaining the value proposition that has led to its success—the most knowledgeable AEs in the industry, unparalleled customer

service, and consistently the fastest underwriting turn-times of any wholesale lender. Coach Izzo once said: “I’m so sick of people saying, ‘He’s a defensive coach, he’s a rebounding coach.’ I want to be a great defensive coach, a great rebounding coach, a great running-game coach, a great offensive-execution coach, a great special-teams-sidelines-out-of-bounds coach. I want utopia. I want my players to want utopia.” Somewhere, just outside of Detroit, Mich., Mat Ishbia is probably saying something similar. The point guard, who took advantage of his opportunities, made it through the “wars” and achieved success on the national stage, wants even more for his firm. If wholesale mortgage banking utopia can be achieved, if it can be made better through hard work and diligence, then United Wholesale Mortgage is a good bet to get to that ball first and put a strong, two-handed grip on it. David J. Coster is senior editor of National Mortgage Professional Magazine. He may be reached by phone at (919) 559-2171 or e-mail

The Birmingham, Mich.-based headquarters of United Wholesale Mortgage


SEPTEMBER 2012 HARP Refis Maintain Strong Pace in July

Sales or Service? “Quality in a service or product is not what you put into it. It is what the client or customer gets out of it.” —Peter Drucker




The other day, I was meeting with one of our loan originators to discuss some pricing options and a consumer presentation. During our meeting, an interesting subject came up and it’s something I’ve thought about myself for the last several years I’ve originated loans. The topic was around what in today’s world would be considered “selling” as a mortgage professional? Are we still defined as “salespeople” in our industry? Are we viewed by others as being in “sales?” He did not feel as though he was a salesperson based off the transparent options and full disclosure offered to consumers, but rather, just in a position to educate them on their options and potential benefits. While the definition of the word “sales” would suggest that we are, in fact, “salespeople,” the new era of our residential lending world may not. Each of us may have our own view and opinion of what a salesperson looks like, but I personally consider us to be “persistent educators” rather than salespeople in the mortgage industry. While we are ultimately offering a product and service to consumers in a competitive market, a prerequisite to acquiring this product or new liability would be confirming that it results in some kind of benefit to the consumer. For example, one would hope that we would counsel a new buyer on their budget and what they should comfortably qualify for on a new purchase rather than extending them or “selling” them into something that they cannot afford. The same would apply for refinancing and making sure there is a tangible benefit in improving an existing rate or term, as also required in underwriting. Our newer industry regulations implement and force ethical protections against bad players or those who were steering or up-selling for financial gain. The ability to “sell” someone into a program or situation that is not beneficial to them is extremely difficult if not impossible. Our industry

requires a level of integrity in each one of us, along with the requirement to educate consumers on their options through presentation and supporting documentation. Many of us feel that things should have always been done this way, but unfortunately, were not as we know too well. We are now witnessing the “salesman” slowly leaving our industry and being replaced with a more professional service provider. Selling yourself and selling your brand is part of the process. Selling a product is somewhat different when it comes to a mortgage. A mortgage loan is a large— possibly the largest—liability on a consumers balance sheet. Education is the key and professional services and comparison is our responsibility as mortgage professionals. Selling someone into a mortgage product, rather than advising them on the product, provides no benefit to the originator or to the consumer. Providing excellent service and persistent education, however, provides benefits to both. Persistent education and excellent service with multiple options will also help offset the challenges that come to those facing rate shoppers. You can eliminate becoming a commodity in a somewhat fixed-pricing world by separating yourself from those stuck in that model of selling. If you replace the idea of selling with service, you will find that consumers will lean more toward the sincere mortgage professional, rather than the commission-focused salesman.

Tip of the month … Always remember to thank someone immediately for a referral. Don’t put it off or you may forget, and no matter how many times they may refer you, thank them by acknowledging the name of the person and sincere thanks that they sent them to you. Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and 2010-2011 president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431 or e-mail or visit

The Federal Housing Finance Agency (FHFA) has released its July Refinance Report, which shows a key milestone was reached when more than 519,000 loans were refinanced through Fannie Mae and Freddie Mac under the Home Affordable Refinance Program (HARP) since the beginning of this year. The continued high volume of HARP loans is attributed to record-low mortgage rates and program enhancements announced last year including removal of the loanto-value (LTV) ceiling for borrowers who refinance into fixed-rate loans and the elimination or lowering of fees for certain borrowers. “When we announced additional program changes to HARP last fall, we were cautiously optimistic that the changes would double or more the number of HARP refinances,” said FHFA Acting Director Edward J. DeMarco. “With more than half-a-million homeowners taking advantage of the program in the first seven months of this year Fannie Mae and Freddie Mac are on track to meet or surpass our original estimates.” Also in the FHFA’s July Refinance Report:  Fannie Mae and Freddie Mac refinanced 519,339 loans in the first seven months of this year through HARP—more than all HARP refinances—400,024—last year.  Since the program’s inception in 2009, Fannie Mae and Freddie Mac have financed more than 1.5 million loans through HARP.  Borrowers in June and July 2012 with LTV ratios greater than 105 percent accounted for more than half the volume of HARP loans as lenders began to sell Fannie Mae and Freddie Mac securities containing these loans with LTV ratios greater than 125 percent as of June 1.  In July, 20 percent of underwater borrowers chose shorter-term 15and 20-year mortgages, which help build equity faster.  In July, HARP refinances represented nearly 60 percent or more of total refinances in states hard-hit by the housing downturn—Nevada, Arizona and Florida—compared with 27 percent of total refinances nationwide.  In Nevada, Arizona and Florida,

underwater borrowers with LTV ratios greater than 105 percent represented more than 70 percent of HARP volume in July.

FHFA Announces Increase in Guarantee Fees The Federal Housing Finance Agency (FHFA) has announced that it has directed Fannie Mae and Freddie Mac to raise guarantee fees (g-fees) on single-family mortgages by an average of 10 basis points. The changes to g-fee pricing represent a step toward encouraging greater participation in the mortgage market by private firms, a goal set forth in FHFA’s Strategic Plan for Enterprise Conservatorships. “These changes will move Fannie Mae and Freddie Mac pricing closer to the level one might expect to see if mortgage credit risk was borne solely by private capital,” said Edward J. DeMarco, Acting Director of FHFA. For loans exchanged for mortgagebacked securities (MBS), the increase will be effective with settlements starting Dec. 1, 2012. For loans sold for cash, the increases will be effective with commitments starting Nov. 1, 2012. Fannie Mae and Freddie Mac will work directly with lenders to implement the changes. The FHFA also released its fourth annual report on single-family guarantee fees, covering the years 2010 and 2011. The report, required by the Housing and Economic Recovery Act of 2008, found that the average g-fee charged by Fannie Mae and Freddie Mac increased from 26 basis points in 2010 to 28 basis points in 2011. This and prior reports also found that mortgages that posed higher credit risk, on average, were subsidized by lower-risk loans, and that a majority of the singlefamily mortgages acquired by Fannie Mae or Freddie Mac came from a small group of large lenders. The guarantee fee changes announced today aim to address both issues. The increase will: Make more uniform the g-fees that Fannie Mae and Freddie Mac charge lenders who deliver large volumes of loans as compared to those who deliver smaller volumes; and reduce cross-subsidies between higherrisk and lower-risk mortgages by increasing g-fees on loans with maturities longer than 15 years more than on continued on page 29

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both be held. Perhaps one might hold staff meetings one time per month and sales meetings three times per month. Or, start with a staff meeting and then break into groups. In other words, don’t ignore operational issues. Some meetings should be solely operational personnel, some solely sales personnel and some should combine the two groups.

Managing for the Future: Conducting Effective Meetings (Part I) By Dave Hershman





ales meetings … managers in this industry have a very uneven record regarding delivering them regularly and delivery them effectively. In today’s business environment, scheduling effective meetings is even harder with many sales and operational people working in virtual locations. Fortunately, technology such as Webinars help with regard virtual meetings. Here are some rules for meetings in general, and next month, I will present ideas specifically for making sales meetings more effective:  Consistency: They should be held at regularly scheduled times so that employees can integrate meetings into their long-term schedules. They should not be called only when there is a dire issue to discuss or some other emergency. In other words, when you schedule a meeting, your sales staff should not be

thinking, “Uh-oh … what happened now?”  On-time: They should start on time. Consider penalties for those who are late—or, even better, awards for those who are on time! Make the penalties fun, such as the last person brings coffee/doughnuts for everyone next time. Of course, this example only works for “in-person” meetings. However, I am sure you can think of ideas for virtual meetings. For example, give out an award to the first person on the line.  Agenda: They should follow a published agenda. Good meetings follow a plan. It does not mean writing a novel—just a few bullet points. Invite participants to add items to the agenda. Unfinished items should carry over first on the next meeting’s agenda.  Diversity: General staff meetings and specific meetings should

 Training: Training should be an integral part of the meeting. It would be too much to have a regular meeting schedule and a regular training schedule: Employees still have to perform their jobs. Go over a short training topic meeting and add a larger topic periodically. Solicit advice as to what topics the employees need. And make sure you are not only training on company procedures, technology and products. Help them become better industry professionals as well.  Time management: Cover other administrative tasks at the same meeting—but limit the focus so as not to take away from sales. Many don’t read e-mails or memos and you must address these issues live, even if only briefly.  Atmosphere: Keep the meetings positive. Improvement of performance is important, but it is important to keep individual criticism to a minimum. Handle individual criticisms in private. Do not let these sessions degenerate into complaint sessions, especially regarding issues over which the participants have no control. Sales meetings are notorious for falling back to the company’s rate policy or operational issues. Make a pact: If someone wants to change a policy, they must make a recommendation and it is to be placed on the next meeting agenda for vote. If you cannot change

the policy (perhaps it is a corporate issue), encourage them to write an e-mail for the group with a recommendation. Integrate success stories and positive news to steer the group towards a positive atmosphere. Praise and awards are great agenda items.  Objectives: Make sure you have clear objectives for the meetings: Training, recruitment, goal-setting, etc. If you don’t know where you are going, you are much less likely to arrive at the destination. One objective you should have is to bring a big picture analysis. Many times, meetings get stuck in the “minutiae” of what is happening every day. They miss the fact that everyone else in the industry is suffering the same fate. Bring articles up that talk about trends and where the industry is heading in the long-term.  Participation: Allow each employee to contribute. Perhaps you could have someone different conduct the meeting each time. Unless they become interactive, they will represent a form of oneway communication and that is not our objective. Also, having top leaders in the office/company conduct meetings is great management training. This serves a dual objective. This article was extracted from Dave’s book, The Complete Mortgage Management Kit. You can view the entire content online at, or call (800) 581-5678. Dave Hershman is a top author in the mortgage industry with seven books published, as well as hundreds of articles. Dave has delivered hundreds of keynote speeches, seminars and schools for the industry as well. He may be reached by phone at (800) 581-5678, or e-mail at or visit

Correction … Due to a production error in the August 2012 issue of National Mortgage Professional Magazine, First Guaranty Mortgage Corporation was left out of our “Who’s Who in the 2012 Wholesale Marketplace” section. First Guaranty Mortgage is a national lender specializing in niche-based government lending programs and initiatives. The company makes its underwriting decisions based on the borrower’s ability to pay, rather than their FICO score(s). First Guaranty Mortgage also specializes in home renovation loans and manufactured housing loans, and offers a myriad of available options for both. First Guaranty Mortgage believes in the business model of third party origination (TPO) lending and puts its business partners in a position to be more profitable and capture a larger market share. First Guaranty Mortgage has lending models to suit the needs of both full DE lenders and mortgage brokers.

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Mortgage industry veterans Kevin Breeland and Stan Gordon have announced that they are partnering in a new venture designed to represent industry interests in legislative and regulatory venues. DC Solutions Group LLC is an advocacy firm positioned to communicate the viewpoint of real estate services entities to policy-making entities considering issues impacting the industry. Headquartered in the nation’s

e-mail: visit:


Industry Vets Establish D.C.-Based Mortgage Advocacy Group

capital, DC Solutions Group was created to meet a growing demand for a more focused industry voice at the grass roots level in the regulatory and legislative decision-making process, according to founding member Gordon. “We have already entered an era in which a number of agencies and legislators with a limited understanding of the real estate services business are implementing new laws and rules directly affecting the mortgage industry,” said Gordon. “It appears that these policy changes are being launched without an appreciation of the concerns expressed by the industry on the potential impact and unintended consequences of their actions. We intend to give our industry a clearer and louder voice at the policymaking table to achieve a balanced result to protect the consumer while preserving a functional marketplace.” DC Solutions Group is not seeking to supplant or compete with the existing trade organizations, but rather, to reinforce and supplement their message, according to founding member Breeland. “We believe that the mortgage and real estate industry is well-represented by its respective trade organizations,” said Breeland. “However, we’re fighting a huge battle against a sea of new laws and regulations, much of it knee-jerk in nature. It’s going to take a lot more engagement and constituent follow up on the part of our industry to educate policy makers in Washington on the actual effects of their actions. DC Solutions Group will seek to channel that energy to for positive results.” Breeland, a mortgage industry veteran of 33 years, comes to DC Solutions Group with extensive operational experience in all aspects of the mortgage banking industry. He has spent the last several years overseeing the government affairs for a major mortgage banker, with particular attention to federal issues. This has included direct interaction with members of Congress, their staffs and the agencies involved with regulation of mortgage and real estate. He is active in a number of trade associations including the Mortgage Bankers Association (MBA), where he has earned its designation as a Certified Mortgage Banker (CMB). He is a past chairman of RESPRO, which focuses on issues pertaining to Affiliated Business Arrangements under RESPA. Breeland has also participated in several industry and governmental task forces, including SBA Roundtables. He was recently selected to participate in the CFPB’s Small Business Review Panel as well. Gordon’s experience includes having served in the role of General Counsel for the Coldwell Banker Residential Group, where he was extensively involved in obtaining the amendments to RESPA which permitted affiliated business 

to check pricing, lock loans, track locks, auto-import all investor-specific overlay conditions and distribute to all parties involved. In addition, Roohmz provides access to historical pricing to help lenders quickly calculate pricing adjustments should loan criteria change during the lock period. Users don’t have to leave the Roohmz site to perform the pricing functions and no additional Web site access is necessary. “The seamless integration combines Roohmz’s unique workflow system with the only automated underwriting and pricing engine in the industry,” said Binh Dang, president of LendingQB, parent company of PriceMyLoan. “The PriceMyLoan technology is a significant enhancement to Roohmz Mortgage Enterprise,” added William DiPaolo, chief executive officer of Cogent Road. “We envision that this will serve as another model of how two software providers working in close cooperation can integrate their products in ways that provide new benefits for their users.” First introduced in 2010, Roohmz Mortgage Enterprise evolved out of Cogent Road’s expertise in data packaging and analytics, ultimately creating a workflow management system that continually monitors loan data from application to origination. Roohmz ensures loans are underwritten accurately every time, significantly reducing the risk of loan buybacks. It keeps every loan in compliance with Regulation B, Regulation Z and the Real Estate Settlement Procedures Act (RESPA), and automatically delivers adverse notices when necessary. Roohmz provides workflow automation, paperless origination, complete with e-signing and automatic assembly of loan packages to investors. PriceMyLoan is a pricing and automated underwriting engine designed for residential mortgage lenders. Originally developed in 2004, PriceMyLoan is delivered as a Web browser-based software as a service (SaaS) application with the goal of enhancing productivity, reducing IT dependency and accelerating the return on investment (ROI) for its clients.

heard on the street NMLS

Why W hy NAPMW? NAPMW? M Three T hree Simple Reaso Reasons ons Education E duc d cation Organized for Organized for the purpose purpose of providing providing education education to to professionproffession e als in all phases off the mortgage mortgage industry, industry, N NAPMW NAPMW offers offers educaeducamanyy vvenues workshops held ar around tion via man enues – seminars and w orkshops k ound the on-line,, and National Conference ccountry, ountry, on-line a at at its Na tional EEducation ducation C onference held each h May. May. NAPMW NAP MW membership membersship gives gives you you exclusive exclusive access a cess to ac to timely educaeducaaffecting career tion regarding regarding the e regulations regulations aff ecting yyour o car our eer such as a webinar FREE TO TO MEMBERSS monthly monthly w ebinar on industry ind dustry updates updates AND education class offering our 8 hour NMLS continuing continuing educa tion cla ss off ffe ering (NMLS Provider P rovider # 1400309) 140030 09) 20

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If If you you believe believe in helping helping to to elevate elevate the educational edu ucational standards standards of this industry, industry, or assisting asssisting in developing developing the e most competent competent industry work industry w ork force, force, then you you believe believe in NAPMW. NA APMW. NAPMW Butt sinc since women NAPMW is not a women’s women’s organization. organization. Bu ew omen make up the major majority profesity off professionals professionals in the mortgage/banking morrtgage/banking pr ofession, our purpose purpose is to to help them advance advance in business, business, personal, personal, and leadership development. de evelopment.

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

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

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continued from page 19

arrangements. Gordon also worked as outside counsel with Prudential Residential Affiliates and Prudential Government Affairs on issues pertaining to real estate and financial services. Recently, he participated in the review and comment by the U.S. Department of Housing & Urban Development (HUD) on marketing services agreements in the real estate services industry. In all of these matters his responsibilities included coordinated efforts with the major trade associations, obtaining interpretations or comments from relevant federal agencies such as HUD, testifying before congressional committees and interfacing with members of Congress and their staff. He is a graduate of the UCLA School of Law, and has been a member of the California bar.

Mortgage Contracting Services Expands Its Texas Operations

Mortgage Contracting Services LLC (MCS), a provider of property preservation, inspections and real estate-owned (REO) property maintenance to the financial services industry, has announced the expansion of its office in Plano, Texas. Presently at more than 30,000-square feet, MCS is adding more than 15,000-square feet to the second floor of its current office. The expansion is complete and hiring to fill those new positions has already begun. The Plano office was initially formed to strengthen MCS’ national presence by providing additional resources and complete time zone coverage for its customers. In five years, it has become vital to MCS’ operations, propelling the company to gain full facility, workforce and data redundancies to maintain optimal disaster recovery and business continuity capabilities. “We feel strongly that we should continue to prepare for future growth by ensuring that we have capacity for what lies ahead,” said Caroline Reaves, chief executive officer of MCS. “This is more than just creating space. Each phase of our growth is done to better serve our customers and the communities and neighborhoods across our country in which we help preserve and protect.” The company recently announced the addition of a third operational site in Ruston, La., to complement its facilities in Tampa and Plano. This is the second expansion in Plano since the Plano facility’s opening in 2007 as the second MCS site. The growth continues as the expansion in Plano will accommodate the company’s current growth and will create immediate capacity for upcoming initiatives.

a la mode Partners With SharperLending on Appraisal Initiatives

a la mode inc. has announced a new strategic integration that allows lenders using mortgage technology provider SharperLending’s Appraisal Firewall platform to place appraisal orders with any appraisal management company (AMC) using a la mode’s Mercury Network. The single integration with Mercury Network gives lenders using Appraisal Firewall more control when selecting appraisal providers, and expanded coverage for areas when they need it. It also gives those lenders more options in complying with wholesale and investor requirements. The integration gives Appraisal Firewall clients instant and fully integrated access to a full list of some of the best AMCs in the business. Mercury Network’s customization options enable workflow to be streamlined on a client by client basis, so lenders can enforce their own business requirements within Appraisal Firewall with every AMC they choose. Payment for the appraisal can also be processed by the AMC, providing the lender a receipt immediately upon payment. In addition, the integration provides live status updates to the lender so they are kept in the loop during the appraisal cycle just like they are when they use their known and trusted Appraisal Firewall appraiser panel. “The integration with Mercury Network gives Appraisal Firewall lenders instant access to an expanded list of AMCs with which they can work,” said Dave Black, president and chief executive officer of SharperLending, the company behind the Appraisal Firewall technology. “We feel that this is an especially effective strategic partnership because both of our companies have demonstrated a commitment to delivering efficiency and compliance technology solutions to lenders to make sure appraisal processes don’t get bogged down.” a la mode’s Mercury Network offers both interfaceless “black box” MercuryDirect services and APIs, as well as turn-key MercuryManaged Web front ends for use by loan officers and compliance staff. Mercury has been used in both capacities by a lengthy roster of the nation’s largest lenders and AMCs, as well as by numerous community banks, credit unions, wholesale and correspondent lenders, and mortgage brokers, simplifying full compliance with appraisal independence standards and banking security regulations. continued on page 46

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Do You Have the

Account Executive Advantage?




By Casey Cunningham

I love the mortgage industry … absolutely love it! What do I love about it? Besides the obvious benefit of earning a living, it basically boils down to one thing: You help people. You help people achieve the dream of homeownership. You help people overcome credit obstacles. You help families relocate. You help retirees. You help people plan their financial futures. You help, period. And, if you’re an account executive (AE), you have the ability to help on an even larger scale than you may realize. I titled this article “Do You Have the Account Executive Advantage?” for a specific reason. AEs are tasked to serve the loan officers and brokers of the mortgage world. They provide the service platforms to expedite loans through to closing. They support their customers with training, education and industry updates. They assist with technology challenges. They’re always ready to answer questions regarding their systems, guidelines, underwriting, overlays and so forth. They serve and protect. It’s rumored that some AEs have been seen leaping tall buildings in a single bound. Their performance affects so many. The buying or refinancing customer, their real estate agent, financial planner or referral source, and finally, the very income of the loan officer or broker they call “customer.” Those customers call them

partners and with good reason, it truly is Why? Because, believe it or not, it’s a partnership. In that partnership is where salespeople/loan officers strugwhere the AE Advantage dwells. gle the most. If the name of the game If you are looking to create more mar- is to get new business, then it must ket share (and who isn’t), I believe there contain two components. The first is to may be a missing, or shall we say under- find out who actually has the business utilized, component to your business and the second is to get an appointmodel. It may just be the missing ingre- ment with them. It’s amazing how dient to phenomenal success. It may be many salespeople are great at marketthe biggest help you can bring to your ing themselves, yet poor at accomcustomers and in turn, your Advantage! plishing the main objective in marketWhen polled with the quesing … name recognition to tion “Why do people do create a warm call. If a business with you?” virloan officer wants a “AEs … tually every salesperpotential referral do you know who son can recite the source to take Big Three … they their call with your loan officers have KNOW you, they the end goal of LIKE you and they an appointtargeted for business? TRUST you. But ment, then Find out and get them ask f o r t h e f o r they have to m u l a behind the connect with thinking about it now to Big Three a n d them on a perget a head start on their sonal level. Let’s silence reigns supreme. It’s no differface it, when the competition.” ent in the mortgage refinances end and world. The refinance market purchase is the name of will end and when it does, loan the game, what is going to get a officers who have been meeting the vast real estate agent’s attention? A busirefinancing needs of their communities ness card with a professional headmay find themselves scrambling to create shot? An e-mail announcing an those know you, like you and trust you “Important Market Update?” Or the relationships out of thin air to survive in a slickest product flyer known to man? purchase market. That’s when AEs who Probably not. have mastered the formula and are masYears ago, I knew of a highly successterful at aiding their customers with the ful real estate agent in my area. We tactics and strategies necessary to capture knew each other, but never really did purchase business will indeed have a dis- business together, not that I didn’t want tinct advantage. So get masterful. to, I just hadn’t made it a priority. I was Let’s discuss the KNOW you piece. determined and did some research. Her

Web site proudly announced the birth of her first grandchild, a boy. I went to the local Barnes & Noble book store and found a fantastic book about grandmothers and grandsons. I sent it to her with a congratulatory note. My intent was to call the next day to follow as my note said I would, but I didn’t need to, she called me. We set an appointment and thus began a long business relationship. She told me years later that not one person had noticed the update to her Web site about her becoming a grandmother and I had really connected with her personally. AEs … do you know who your loan officers have targeted for business? Find out and get them thinking about it now to get a head start on their competition. Help them focus on making a strong personal connection with their intended referrals sources. Help them research the individuals; know their interests, charities, favorite vacation spots, restaurants and books. Are they dog lovers, cat lovers, fishing enthusiasts or scuba divers? Help them with marketing ideas, a strategy, game plan, a way to connect with each person. Your loan officers will be grateful, astonished, pleased, excited, thrilled, and will have forgotten all about your competition and above all, thankful. And you? You will have gained the advantage. Casey Cunningham is president of XINNIX, a provider of mortgage sales and leadership development programs. She may be reached by phone at (678) 3253501 or e-mail




A Watchdog

for the





By Louise Thaxton

“Honor never grows old, and honor rejoices the heart of age. It does so because honor is, finally, about defending those noble and worthy things that deserve defending, even if it comes at a high cost. In our time, that may mean social disapproval, public scorn, hardship, persecution, or as always, even death itself. The question remains: What is worth defending? What is worth dying for? What is worth living for?” —William J. Bennett


everal years ago, in an attempt to break into the military market, I ventured into a small U.S. Army town in central Louisiana. The first real estate agent I met said these words to me: “I’m warning you. You had better do what you say you will do for my soldiers. The first time you don’t, I will never use you or your company again.” She said it with such ferocity, I was taken aback. She referred to her clients as “my soldiers.” It was a promise, not a threat, and I knew it. I will never forget her words of warning that she would not tolerate any-

thing less than excellence for her mili- conduct.” The “warriors” in this case, of tary clients. She was ensuring that any- course, are the military men and one she trusted with her client referrals women who serve our country. But why operated with the excellence these mil- is this necessary to be a watchdog for itary clients deserved. But it wasn’t until this group? I sat across the table from my first miliUnfortunately, there are individuals tary client, a young soldier just home and companies in our industry that use from Iraq, that I could truly understand. predatory financial practices and As we talked, I realized this solaggressive marketing tactics to dier had just risked everytarget servicemen and thing he had in order women as they return “To me, for our country to from war. I call being a watchdog enjoy its freedom. those predators He had risked his the “wolves.” The for the warrior is a life for me. It wolves, for became personexample, would mission to honor the men al. The weight of rather steer a and women of the U.S. my responsibility service member to this young military and their families into a higherman was heavy on cost, conventionfor their service to my shoulders. al loan because it Since that first is easier for them to our nation …” day, I have originated originate than a VA thousands of VA loans for loan. I have personally thousands of military clients. pledged to stand as a watchdog But I never take for granted that I have between “warriors” and the “wolves,” the privilege of serving those who serve. and to encourage others to do the It is not a small thing, and I consider it same. And I am not alone. an honor. I call it being “a watchdog for One of the more famous military our warriors.” advocates in our country is Holly What exactly does this mean? The Petraeus, the wife of General David definition of a watchdog is “a watchful Petraeus. Perhaps the ultimate warrior guardian … to watch carefully, espe- watchdog, Holly Petraeus has pledged cially so as to detect illegal or unethical to protect our military from becoming

the victims of scams. After conversations with service members from 27 military bases across the country, Petraeus joined the Consumer Financial Protection Bureau (CFPB) in 2011 as the assistant director of the Office of Servicemember Affairs. Petraeus, who understands first-hand, as a military spouse, the hardships that service members and their families face, also expresses an obligation to protect service members from predatory practices. The military are a targeted population for many businesses who cheat, scam and overbill. In a recent USA Today article, Petraeus referred to the pawn shops, “Buy Here, Pay Here” car lots and stores offering “pay day” loans that were “lined up like bears at a trout stream” outside her husband’s military base. Because many service members are young, financially inexperienced, and transient, they are unaware of these potentially dishonest businesses. Petraeus admits she is using her name recognition and is on a mission to educate military consumers and monitor their complaints. She could use help. Never has so long a military conflict been fought by such a small percentage of Americans. Right now, for loan professionals across the nation in particular, there is a huge opportunity to become watchdogs over

our service members. There are 23.5 million living veterans and 1.4 million active duty military personnel. This translates into eight percent of Americans, many of whom have fought and served, have special needs and challenges, and some of which are:         

Repeated deployments Experience a higher rate of suicide Experience a higher rate of divorce Find themselves in a higher rate of unemployment Higher rate of homelessness Suffer from Post-Traumatic Stress Disorder (PTSD) Have experienced traumatic brain injury Bouts of depression Other invisible wounds of war

 Proficiency with VA loans and military culture: Having extensive knowledge and expertise in these areas is absolutely crucial. Regular training should be mandated for individuals and teams.  Additional certification: USA Cares ( provides an excellent training course for anyone who is serious about working with the military. The course is directed by Beverly Frase who works to ensure lenders and housing professionals everywhere know how to provide the skilled services our military personnel expect and deserve. Last, but certainly not least, consider giving of your time, talents and money to projects to honor the military and veterans and become a part of a give-back program. One of the organizations my company supports is the Boot Campaign (, a grassroots military appreciation and veteran awareness campaign started by five women from Texas, known as the Boot Girls. The Boot Girls launched the Boot Campaign in 2009 to spread awareness about the needs of military personnel returning home from combat and to express gratitude to those currently enlisted. Through the sale of military combat boots, the Boot Campaign donates its proceeds to a group of partner charities that work with soldiers who are healing from a variety of physical and emotional combat wounds. To me, being a watchdog for the warrior is a mission to honor the men and women of the U.S. military and their families for their service to our nation, and to fulfill the obligation we have to each and every one of these heroes for the freedoms we enjoy. The Warrior Ethos has become my personal battle cry on this mission: “I will always place the mission first. I will never accept defeat. I will never quit. I will never leave a fallen comrade.”


Louise Thaxton is a producing branch manager for Fairway Independent Mortgage Corporation, with satellite offices across Louisiana and Florida. She has been in the mortgage business for 15 years and is an ambassador of the Boot Campaign. She can be reached by e-mail at



 Checklists: There is an absolute necessity of checklists for setting standards of excellence in all areas of your mortgage practice, including origination, processing, underwriting, closing and shipping. You will find military clients appreciate the importance of checklists. As one former fighter pilot said “you live and die by the checklist.” Checklists not only detail the loan process, but

 Written best practices: This establishes a protocol when the military client is deployed and utilizing a Military Power of Attorney. Written best practices include: • Method of communication with deployed/absent borrower • Method of transmitting and receiving documentation • Delivery and receipt of time sensitive loan documentation • If the client is deployed, a method of contact on the date of closing to verify he or she is alive and well 

But there’s more. Service members are often young and not equipped with the financial education to protect themselves. As a result, many become susceptible to and vulnerable to scammers. According to, about 27 percent of military families owe more than $10,000 in credit card debt, compared to 16 percent of all Americans. One-third of enlisted personnel and junior non-commissioned officers admit patronizing “pay day” or other high-cost, easy-credit lenders. In fact, indebtedness is the top reason why service members get their security clearances revoked. While fighting in battles abroad, a soldier’s focus may be on staying alive and not on their financial condition back home. As a result, many are face foreclosure or financial problems while they are serving overseas. According to ABC News, approximately 185,000 service members face a Permanent Change of Station of order each year. If they have underwater loans, this could lead to challenges as they are forced to leave that home and move to a new base. Recently, my company determined that there was a need to provide a platform whereby loan professionals could be thoroughly trained, equipped and certified to handle with excellence the mortgage home loan needs of active duty military and veteran clients. A standard of practice and operation guide was created for loan professionals who work with military clients to ensure that all service members and veterans would receive a positive home loan experience. If you are considering working with the military, below are some of the standards of practice you may want to incorporate into your operation:

also serve as a reference and establish standards and accountability.

Combating Mortgage Fraud With Technology What You Don’t Know Can Hurt Your Bottom Line By Greg Holmes




Many mortgage professionals are, unfortunately, becoming more familiar with the old adage “What you don’t know can hurt you,” especially when it comes to undisclosed liabilities that occur during the loan underwriting process. According to a study recently conducted by a national lender, a review of approximately 4,500 loans over a three-month period revealed that nearly 1,000 borrowers had opened new trade lines between the initial application and final sign-off date. These new trade lines carried an average payment of $300, which then required a minimum increase of some $9,400 in net income to absorb the payment and keep borrowers’ debt-to-income (DTI) ratio change at less than three percent. It’s not hard to imagine the added time and expense that would be incurred if this type of activity was discovered the day before the loan was scheduled to close. Unfortunately, misrepresentation of liabilities continues to be a growing issue, and one that challenges mortgage professionals to be at the top of their games when it comes to loan quality control methods. Consider Fannie Mae’s 2011 through April of 2012 loan review fraud findings—in 45 percent of potentially fraudulent cases, the borrowers’ liabilities were found to be misrepresented in some way. This significant increase over Fannie Mae’s 2010 findings, which showed 26 percent liability misrepresentation, underscores how important it is to closely monitor and address undisclosed liabilities.

this “quiet period,” the time between the original credit pull and the loan closing, can greatly impact a borrower’s debt-toincome ratio and delay closing. Quality control (QC) programs, such as Undisclosed Debt Monitoring powered by Equifax, inject more transparency into borrower credit activity by providing continual monitoring of borrower files during the “quiet period.” These QC tools provide daily alerts highlighting potential risk areas associated with undisclosed liabilities, as well as other activity that could negatively impact a borrower’s loan application. By identifying potential risks before loans are scheduled to close, QC tools deliver strong pull-thru rates, better pricing and enable lenders to proactively work with borrowers and offer input throughout the entire loan process. Consider two hypothetical scenarios: The first situation involves a borrower who purchases new furniture on credit 15 days after his original loan application, which changes his DTI ratio from 30 percent to 38 percent. Through the use of QC technology, the loan officer is notified immediately of this transaction and has time to work with the borrower so the loan can still close on time. Now, imagine a similar situation with one change—the mortgage professional does not learn of the borrower’s furniture charge (and its impact on his DTI ratio) until two days before the loan is scheduled to close. The change in DTI ratio would delay closing and the rate lock would expire. These delays could ultimately result in less profit for the mortgage professional, depending on the cost to extend the term and the additional documentation required.

Targeted activity alerts lead Digitally connected through to immediate action QC tools actively monitor trade lines, credcontinuous it inquiries and secondary re-issued files on monitoring While most mortgage professionals handle a healthy percentage of low-risk loans as compared with those deemed questionable or high-risk, the challenge still remains: How can the questionable borrowers, as well as their undisclosed liabilities, be better identified? Fannie Mae’s Loan Quality Initiative recommends credit checks be pulled during the initial application, and then again before closing to ensure no undisclosed liabilities appear. Debt incurred during

loans that have been pre-approved and/or likely to close. Secondary re-issue alerts quickly let lenders know when a borrower is shopping around for a mortgage or trying to commit some type of fraud. Alerts enable lenders to start an immediate conversation with the borrower, which may help him/her save the loan and keep the relationship intact. Lenders have access to comprehensive, user-friendly reports that are automatically generated for all borrower-related activ-

ity. By monitoring these types of activities, lenders can streamline their loan underwriting and QC efforts.

Other areas of borrower misrepresentation Undisclosed liabilities that impact DTI ratios are just one of six key areas that could harbor significant borrower representation during the underwriting process. The other areas that lenders are encouraged to monitor include:  Income: Represented 15 percent of borrower misrepresentation according to a 2011 through April 2012 Fannie Mae loan review fraud findings from 2011 through April 2012. This rate was 25 percent in 2010. Income monitoring and verification can be streamlined through the use of tax return verification reports that easily compare income-related lines of a borrower’s tax return with the same lines from his/her IRS form.  Employment status: Employment reports are available to help simplify the verification process.  Occupancy: Represented 16 percent of borrower misrepresentation according to recent Fannie Mae loan review fraud findings, as compared to 19 percent in 2010. Additional information can be gathered through third-party sources and compiled into an occupancy and bankruptcy report.  Property valuation: Represented 11 percent of borrower misrepresentation according to recent Fannie Mae loan review fraud findings, as compared to 14 percent in 2010. Mortgage professionals often tap into subject property reports to obtain additional insight regarding a property’s current owner, property characteristics, and prior sales or refinance history.  Borrower authentication: There have been recent advances in technology to help reduce fraud in this area, such as e-signatures (and other verification services) that reduce paperwork and save lenders valuable time from the start. Identity investigation reports can also help identify potential risk factors.

Strides made in reducing mortgage fraud Although there has been a slight reduction

in fraud misrepresentation in several of the previously mentioned key areas over the last year, undisclosed liabilities continue to rise. Such liabilities are one of the leading reasons mortgage fraud and many lender repurchase demands occur today. According to an April 2012 report from the Financial Crimes Enforcement Network (FinCEN), 92,028 mortgage loan fraud reported suspicious activity reports (MLF SARs) were submitted last year—a 31 percent increase over the 70,472 submitted in 2010. There is a silver lining, however—40 percent of the MLF SARs submitted by filers showed that suspicious activity and/or fraud found in the SAR was the main reason an applicant’s loan was declined. In other words, financial institutions are preventing mortgage fraud from happening in the first place. The FinCEN report shows a significant improvement in overall mortgage lending since the height of the housing crisis, which can be attributed to better QC monitoring from lenders who are able to identify potential fraud issues before they even occur. More of this report can be found at /20120423.html. The challenge of increasing transparency and identifying borrower’s undisclosed liabilities is one that should be focused on by mortgage professionals when evaluating their current QC methods. Thanks to recent changes in mortgage policies and an uptick in the number of mortgage loan fraud reported suspicious activity reports (MLF SARs) that are filed, major improvements are being made in how fraud is detected and prevented. Continuous monitoring tools that detect new borrower debt incurred during the “quiet period,” are taking the guesswork out of the process and empowering lenders to take action. The valuable information garnered from this type of monitoring will increase the ability to originate loans more efficiently, resulting in mortgage professionals singing the praises of a different, more positive, adage—knowledge is power. Greg Holmes is national director of sales and marketing for Credit Plus Inc., a Salisbury, Md. provider of credit and mortgage information services since 1928. He can be reached at

Ellie M a e has announced the release of the latest upgrades to its Encompass360 mortgage management solution. The release, the first of two scheduled for 2012, contains new functionality and enhancements designed to further increase compliance, efficiency and ease of use. The major enhancements include:  Integration of Encompass Commissions for hosted Encompass360 Banker and Broker Edition clients. This optional module is designed to improve the accuracy of calculating and paying LO commissions, provide regulatory backup for commission payments and help reduce human error and back-office costs.  Greater speed and flexibility in viewing “native” format and image-based documents. Users can now view the first pages of documents in seconds and see multiple documents as a single file within one window.  Remote access to the Encompass Product & Pricing Service. Loan officers can remotely find and price loans via their iPad or Android tablet and submit the data directly to Encompass360 to create a loan file.  Core updates that enable self-hosted clients to receive new updates to Encompass360 seamlessly and securely without work interruptions; allow users to choose which aspects of a loan file they want to duplicate when originating new loans for existing customers; and help calculate net tangible benefits of mortgage refinances under the FHA streamline refinance program and communicate these benefits to customers. The new release contains more than 230 enhancements in all. A number of the enhancements, such as the new electronic document management capabilities, were designed to align the functionality of DataTrac and Encompass360: Giving DataTrac clients additional reasons to consider migrating to the Encompass platform. Similar to past releases, much of the focus of the upgrades has been on compliance, secondary marketing and trade executions. For instance, new call reports continued on page 30



Lender Processing Services Inc. (LPS) has announced the release of a new offering, which enables lenders to order Good Faith Estimate (GFE) data through the LPS Loan Quality Gateway, powered by RealEC. The new GFE Service helps lenders accurately quote loan fees and eliminates the need to maintain internal fee tables and cumbersome, manual calculations for GFE disclosures. The GFE Service uses a provider network to deliver GFE settlement charges, which can help lenders manage tolerance requirements related to fees, amounts owed and adjustments shown on the HUD-1 form. “By using LPS’ new GFE Service, lenders are now better positioned to meet regulatory requirements and improve efficiencies,” said Andy Higginbotham, executive vice president of strategy and business development for LPS’ Loan Origination Technology division. “The GFE Service streamlines the origination process by delivering more accurate data and increased automation to an otherwise manually intensive process.” The new GFE Service complements the existing LPS loan origination services available on the Loan Quality Gateway, including appraisals; AVMs; title insurance; closing services; flood insurance; verifications of income, employment and identity; mortgage insurance; and fraud prevention tools. “The addition of the GFE Service to the Loan Quality Gateway is just the latest investment in support of more than 12 years of dramatic growth through our RealEC platform,” said Dan Sogorka, president of LPS subsidiary RealEC. “Our goal remains the same: to continually extend the value we offer both lenders and service providers as we all collectively work toward a more automated, transparent, data-centric mortgage origination process.” The LPS Loan Quality Gateway is an open platform that provides the integrations, data management, decisioning and workflow management required for current and emerging loan quality programs.


Ellie Mae Upgrades Encompass360 

LPS Loan Quality Gateway Supports New GFE Service

Bonded With NAMB

Surety Simplified With Bond Basics By Mason Grashot, CPA

By Casey Cunningham

Why do I need to have a surety bond? The short answer is “because THEY said so!” It’s the law.

What does a bond do, anyway?


Surety bonds are similar to insurance in that they offer protection from defined risks. One primary difference is whom they protect. Bonds provide NO protection for the licensee (principal) who is required to purchase them. Instead, bonds protect the state regulating department (obligee) who requires them to be purchased. The “defined risks” they protect against can be found in the bond form, state legislation or rules and regulations prescribed by the state regulator responsible for overseeing the licensees. These typically include fines and fees levied by the regulator as a result of actions (or inactions) of the licensee. Another primary difference is that, unlike insurance where risk is completely transferred to the insurance carrier via the insurance policy, the indemnity (or hold-harmless) agreement between the principal and the surety allows the surety carrier to be reimbursed by the principal for any claims it has to pay to the obligee under the surety bond provided on the principal’s behalf.


What value do surety bonds provide to the industry?


What Every Loan Officer Needs to Know

Because the underwriting of surety bonds evaluates the character, capital and capacity of the principal, they are often relied upon as part of the overall qualification process to obtain (or maintain) a license with the state regulator. Aside from the consideration that the regulator provides to the license application, that regulator gets a second opinion since the licensee has also met the independent qualifications of the surety industry who has agreed to provide a bond on the licensee’s behalf. Indirectly, the surety underwriting process functions as an additional filter to help ensure that only those individuals of a certain caliber are able to operate as a licensed professional. This certainly assists those high-quality professionals to maintain the reputation of their industry by helping guard against less scrupulous or more risky individuals and the wrong kind of attention that they inevitably attract. Mason Grashot, CPA is president of The Bond Exchange, a national insurance agency focused on surety bonds with a unique specialty practice centered on the mortgage profession. As the endorsed strategic partner of NAMB—The Association of Mortgage Professionals, The Bond Exchange services thousands of surety bonds through programs designed specifically for the mortgage industry. For more information, call (501) 224-8895 or visit

Sponsored Editorial

In my 28 years in mortgage lending, it’s been my observation that skilled mortgage professionals make it a priority to be students of their profession. From my own career to training some of our industry’s top earning loan officers, it’s readily apparent, they have a continual thirst for knowledge and are always learning. With school back in session, I thought it would be appropriate to address the subject of learning and what I believe should be your favorite subject … science. Yep, you got it … I said “science,” not “math,” “communications,” “English” or any other elective you may study to sharpen your loan officer skills. I didn’t say to neglect those areas, but science should top the list and one discipline in particular … the Science of Customer Retention. You may have the best product, the best price and have the most experience, but if you don’t understand the science of why people buy and why they buy from you, you may never experience your true potential. Customer retention may begin before you even speak to a customer, but is definitely influenced by the minute you say hello. The key to enormous success is to know and understand the social science behind how we engage and influence our customers to use our services, send referrals and come back time and time again. Gaining a complete understanding of customer retention begins with a thorough understanding of the buying process. What you understand, you can control. What you control, you can make work for you. What you make work for you equates to enormous success. You could spend countless hours researching the buying process and you’d be overwhelmed with the results. So, let me save you time, effort, energy and provide you the Reader’s Digest version. There are basically five steps. The buyer, of course, participates in all aspects of the process. The loan officer may as well, but typically only participates in the last three. Either way, you must have complete knowledge. The good news is, once you’ve educated yourself, the process never really changes.

1. Identification: This phase is externally-driven as the customer identifies a product, good or service to satisfy a want, need or problem. There is an additional factor at work and it is the driving force behind the decision. Actually, there are two driving forces. One is what the identified item will accomplish and the second is the decision to do business with you. Driving force is a critical component in the science of retention and the loan officer who links their performance to the customer’s driving force vastly increases their long term customer retention. 2. Search: This is where the potential customer actually begins the search for information. Information about what they’re looking for and who will provide it. The challenge for the loan officer in the early stages of the buying process is limited or may have no involvement at all. Which begs two questions … what will your potential customer see, read or hear about you and is your image and message compelling? 3. Evaluation: You may actually engage with the customer for the first time as they evaluate you, your services, your product, etc. At this stage, it is imperative you are able to correctly identify the driving force motivating the customer’s decision. Knowing what is driving the decision allows you to tap into the emotions behind what is driving the customer. To increase your odds in acquiring a customer, you must spark their attention on as many emotional levels as possible. The more you can engage them emotionally, the more you will stimulate them to take action. The challenge in the evaluation process is you typically only get one chance to make a good impression and build trust. With a mortgage company on every corner and a plethora of loan officers to call, you better be good. No pressure, but don’t blow it! 4. Purchase: You’ve got the deal, and your customer has made a decision to use you. This step is much more than just taking a loan application. Setting the stage at this point is crucial to your success. Do you explain the loan process continued on page 48

nmp news flash

continued from page 16

shorter-maturity loans. FHFA shortly will release for public input an approach to developing risk-based pricing at the state level.

Treasury Department Maps Course to Wind Down GSEs

capital, and return to the market in their prior form; supporting the continued flow of mortgage credit by providing borrowers, market participants, and taxpayers with additional confidence in the ability of the GSEs to meet their commitments while operating under conservatorship; and providing greater market certainty regarding the financial strength of the GSEs. “Today’s announcement is a clear and appropriate effort to limit taxpayer exposure resulting from the federal government’s investment in Fannie Mae and Freddie Mac,� said David H. Stevens, president and CEO of the Mortgage Bankers Association (MBA). continued on page 33



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The U.S. Department of the Treasury has announced a set of modifications to the Preferred Stock Purchase Agreements (PSPAs) between the Treasury Department and the Federal Housing Finance Agency (FHFA) as conservator of Fannie Mae and Freddie Mac—the government-sponsored enterprises (GSEs)—that will help expedite the wind down of the GSEs, make sure that every dollar of earnings each firm generates is used to benefit taxpayers, and support the continued flow of mortgage credit during a responsible transition to a reformed housing finance market. “With this announcement, we are taking the next step toward responsibly winding down Fannie Mae and Freddie Mac, while continuing to support the necessary process of repair and recovery in the housing market,� said Michael Stegman, counselor to the Secretary of the Treasury for Housing Finance Policy. “As we continue to work toward bi-partisan housing finance reform, we are committed to putting in place measures right now that support continued access to mortgage credit for American families, promote a responsible transition, and protect taxpayer interests.� The modifications to the PSPAs announced are consistent with FHFA’s strategic plan for the conservatorship of Fannie Mae and Freddie Mac that it released in February 2012. “These changes provide certainty to Fannie Mae, Freddie Mac and market participants as they continue to perform their critical mission of providing liquidity and stability to the country’s housing market,� said FHFA Acting Director Edward J. DeMarco. “The steps today are also important as Congress and policymakers contemplate the future of Fannie Mae and Freddie Mac.� The modifications include the following key components:  Accelerated wind down of the retained mortgage investment portfolios at Fannie Mae and Freddie Mac: The agreements require an accelerated reduction of Fannie Mae and Freddie Mac’s investment portfolios. Those portfolios will now be wound down at an annual rate of 15 percent—an increase from the 10 percent annual reduction required in the previous agreements. As a result of this change, the GSEs’ investment portfolios

must be reduced to the $250 billion target set in the previous agreements four years earlier than previously scheduled. To support a thoughtfully managed wind down, the agreements require that on an annual basis, each GSE will— under the direction of their conservator, the FHFA—submit a plan to Treasury on its actions to reduce taxpayer exposure to mortgage credit risk for both its guarantee book of business and retained investment portfolio.

The agreements will replace the 10 percent dividend payments made to Treasury on its preferred stock investments in Fannie Mae and Freddie Mac with a quarterly sweep of every dollar of profit that each firm earns going forward. This will help achieve several important objectives, including: Making sure that every dollar of earnings that Fannie Mae and Freddie Mac generate will be used to benefit taxpayers for their investment in those firms; ending the circular practice of the Treasury advancing funds to the GSEs simply to pay dividends back to Treasury; acting upon the commitment made in the Administration’s 2011 White Paper that the GSEs will be wound down and will not be allowed to retain profits, rebuild

new to market

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have been added to help lenders comply with Nationwide Mortgage Licensing System (NMLS) requirements. Disclosure tracking for U.S. Department of Housing & Urban Development (HUD) requirements has also been added, and integration with the new Encompass Document engine has been improved. New secondary marketing enhancements include state-specific servicing release premium adjustments, purchase price update and lock-request reporting tools and lock-extension enhancements. “Our clients choose Encompass360 because they realize just how high the stakes are in today’s zero-tolerance environment where the slightest error can result in a significant fine or a large buy-back request,” said Jonathan Corr, chief operating officer of Ellie Mae. “Our latest release re-calibrates our automated solutions to deliver even greater efficiency and confidence to our clients.”

MISMO Releases Version 3.2 Reference Model




MISMO, the not-forprofit data standards subsidiary of the Mortgage Bankers Association (MBA), has announced the release of the Version 3.2 Reference Model (Candidate Recommendation) for a 30-day intellectual property rights (IPR) review. The IPR review period is the final opportunity for entities to submit any concerns over intellectual property infringement within the standard. Version 3.2 is a significant step forward in the evolution of the MISMO Reference Model and is the result of hard work and cross-collaboration among many participants in the mortgage industry. This version is a fully self-contained release of the MISMO Reference Model that includes the following new features, revisions and improvements from previous versions: Additional data elements and containers, enhanced data relationships, increased extensibility, improved attribute definition and handling, and support for open content model abstraction.

Credit Plus Launches New Mortgage Fraud Prevention Tool

Credit Plus Inc. has announced the launch of a new mortgage fraud prevention tool called Undisclosed Debt Monitoring, powered by Equifax. Developed to help lenders meet Fannie Mae’s Loan Quality Initiative (LQI) recommendations and check borrower credit activity during the processing of a mortgage, it offers users continuous monitoring and daily proactive alerts on potential risks.

“We are always looking for ways to enhance our credit tools and are excited to be one of the only companies in the industry authorized to provide this service,” said Greg Holmes, national director of sales and marketing for Credit Plus Inc. One of the major benefits of this mortgage fraud prevention tool is pipeline protection. Loan officers are notified when mortgage inquiries occur on their borrowers’ accounts alerting them to rate shopping, undisclosed mortgage loans and possible fraud. This feature enables lenders to proactively work with borrowers throughout the mortgage process and reduce loan fallout. Credit Plus customers will now be able to continuously monitor borrower credit activity during the “quiet period” between the time of the original credit file pull and the closing of the loan by utilizing Undisclosed Debt Monitoring powered by Equifax. Other Undisclosed Debt Monitoring features include: Activity alerts for credit inquiries, tradelines and secondary reissues; one comprehensive, user-friendly report for all borrower related information; and streamlined integration for ordering results. Users of Undisclosed Debt Monitoring, powered by Equifax also have access to an exclusive insurance program backed by Arated carriers and offered through Arthur J. Gallagher Risk Management Services Inc. It protects lenders against buyback or repurchase losses associated with undetected liabilities or borrower misrepresentation resulting from hidden debt. “Transparency is imperative to the loan process and many lenders simply do not have the tools in place to effectively monitor borrower activity once the original credit file pull occurs,” said Holmes. “Our customers who utilize this service will now be better prepared to communicate with borrowers regarding specific activities detected during the mortgage process, increase their operational efficiency, and significantly reduce the costs associated with repurchasing loans.”

Interthinx Launches TrueOutlook Forecasting Solution

Interthinx has announced the release of TrueOutlook, a portfolio forecasting and stress testing tool that enables financial institutions to predict to what extent the quality of underwriting, age of loans, and economic impacts will affect future losses. TrueOutlook allows for the forecasting and stress testing of portfolios against different originations strategies and economic factors to show lenders what percentage of risk is within their control and what is not. With TrueOutlook, small to mid-tier banks and credit unions can leverage world-class technology previously available only to large global financial entities. TrueOutlook uses Dual-time Dynamics, the patented

forecasting technology of the Interthinx LookAhead and TrueCapital products, which has proven accurate through more than 15 years of global economic change. “TrueOutlook makes sophisticated scenario-based forecasting and stress testing available to a much larger group of lenders across the United States,” said Michael Smith, chief technology officer and chief architect at Interthinx. “It’s a comprehensive, cost-effective service that can be used for all U.S. consumer retail portfolios, such as auto loans, credit cards, home equity loans, and personal or small business loans. TrueOutlook is designed to meet the needs of organizations with limited internal resources and staffing. The tool enables customers to benefit from industry benchmarking and more accurate forecasting models that stress-test portfolios under different economic scenarios in line with regulatory guidance from the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).”

CoreLogic Upgrades Its OnSite Product With Increased QC

Bradford Technologies Releases Collateral Valuation Report Upgrade


continued on page 45



Bradford Technologies, provider of valuation analysis software, has announced the release of CVR 2.0, the next generation of CVR— Collateral Valuation Report—the appraisal report that introduced statistical analysis into the appraisal process, making it known by many valuation experts as the most advanced appraisal on the market. Changes in the new format provide greater clarity and transparency of the appraiser’s valuation process. The new CVR 2.0 report format makes greater use of charts to convey information and statistics to enhance the reliability and accuracy of the valuation. CVR 2.0 combines four analyses: Market analysis, regression analysis, the sales comparison approach and the listing comparison approach to arrive at a reconciled value conclusion. The analyses are synergistic, strongly interdependent and add to the reliability of the value conclusion. For instance, regression analysis predicts a value, but it also produces the components of value that can be used as adjustment factors in the sales comparison approach. The market analysis provides the sales/listing ratio, which is used to normalize listings as sales. This mathematically allows the components of value from regression to be used as adjustment factors on the currently listed properties in the listing comparison approach. This interdependence ensures that the reconciled value conclusion is highly reliable. CVR 2.0 also introduces value ranges. Historically, appraisals have provided a market value at a point in time. With the introduction of statistics into the valuation process, ranges and probabilities can start to be incorporated into the process. CVR 2.0 takes the first step in this direction by introducing the Value Reconciliation Chart, which visually summarizes the four analyses, indicated values, valuation ranges and value conclusion. This innovation allows the results of the appraisal to be summarized visually and quickly understood. CVR 2.0 also now incorporates identity theft and appraisal fraud prevention technology, the same technology used by the United States Post Office to prevent mail fraud. “Lenders have seen the benefits of statistically-enhanced appraisals. The future is about valuation analytics, scatter plots and regression models. CVR 2.0 has all this today. With the CVR 2.0, appraisers can provide their clients with the most reliable, most advanced, statistically accurate appraisal in America,” said Jeff Bradford, chief executive officer of Bradford Technologies. 

CoreLogic has announced the introduction of OnSite Plus, a property condition report that provides an overall condition rating constructed on a patent-pending algorithm and based on an inspection by a licensed real estate professional. Like the existing OnSite report, OnSite Plus incorporates local market conditions into a single property condition report that includes a professional physical inspection and quality control (QC) process to help ensure an accurate report. OnSite Plus is designed to be used with an automated valuation model (AVM) report to generate an evaluation consistent with the Interagency Appraisal and Evaluation Guidelines issued in December 2010. “We have had over 50 top lenders and servicers adopt and now rely on OnSite from CoreLogic to create an evaluation that supports decision making on home equity loans, refinancings and loan modifications,” said Susan Allen, vice president of strategic relations at CoreLogic. “While our customers tell us they save millions of dollars by using OnSite-based evaluations, performed by credentialed inspectors, some expressed a preference for inspections performed by licensed real-estate professionals. We listened and responded with OnSite Plus, which leverages all the preferred features of OnSite with the added benefit of inspections performed by licensed real-estate professionals.” OnSite Plus evaluates the condition of the property relative to other properties in the neighborhood and includes positive and negative external factors observed adjacent to or within the immediate neighborhood, as well as photos and comment fields for as-needed explanations, and contains local market assessments based on CoreLogic property and listing databases. The report provides an overall condition rating based on a patent-pending method

designed to increase consistency of results and align the condition report with assumptions made by automated valuation models. To ensure the highest quality standards, OnSite Plus includes a post-inspection quality assurance process. OnSite Plus can be bundled with CoreLogic industry-leading AVMs, AVM cascades, or ordered on a standalone basis.

Creating The New NAMB NATIONAL Conference

Friday-Monday, December 7-10, 2012 MGM Grand • Las Vegas, Nevada By John Stevens


he mortgage industry is roaring back and we’re building the nation’s best event for mortgage originators to help it along. Not with just a conference or tradeshow, but with a community of loan originators, correspondent lenders, mortgage brokers, front line home lending pros, and the companies that serve them. This is not a regional event, so we’ve renamed the former NAMB/West as NAMB NATIONAL. We’re adding an extra day of leadership training for all our state affiliate leaders, with a special awards banquet on Sunday evening. This will start the conference with hundreds of the best in the mortgage business from across the nation. We’ve altered our session lineups. On Sunday, Dec. 9, all of the education will be hands-on workshops and direct take-aways. We will build attendees’ Facebook and LinkedIn company pages for them, and we will hold training sessions about reverse mortgages and how you get into these complex offerings. Monday, Dec. 10, is an entire day of Heavy Hitters — four top national attractions, starting with Bill Matthews, president of the NMLS, and Ginnie Mae President Ted Tozer. Lots of new elements will make the show more inviting and fun for everyone. Specifically:


I We’re giving away a 40-inch flat screen HDTV at every single session break. We’ve got a great lineup of exhibitors and sponsors this year, and we want to promote interacting with them at every opportunity. Your reward will be a chance at every session break to walk away with an amazing prize!



I Our grand prize will be a trip to Hawaii. (Prefer Cancun, or Ireland? No problem – you can change your destination to wherever you’d prefer.) I A photo studio in the middle of the exhibit hall, with backdrops and professional lighting will be available for all attendees, offering free professional headshots, to use for marketing, social media - however they want. I Attendees can come for free if they make friends with our exhibitors. Every exhibitor and sponsor will have a special URL during the month of October (longer for sponsors). Look for special invitations from them inviting you to NAMB NATIONAL as their guest. It’s not an exhibit hall-only pass, but a complete, free registration for the entire conference, a $200 value! To get your complimentary invite, just reach out to the exhibitors listed at the website and click on their invitation link! I The Exhibit Hall will be open two days, Sunday and Monday. On Sunday, we’ll be hosting a two-hour cocktail reception, including a special session with an amazing motivational speaker. On Monday, all attendees will get breakfast and lunch, in the exhibit hall, and on both days, all refreshments will be available in the exhibit hall. This is just the beginning of our plans, and this conference will be a blockbuster. But we can’t do it without your participation and support. So be part of the new NAMB NATIONAL conference. Just go to now to sign up. John Stevens is chairman of the NAMB NATIONAL conference. He is a member of the board of NAMB – The National Association of Mortgage Professionals, and is branch manager for ENG Lending in Utah.

How to Make $1 Million in the Mortgage Business … and Still Have a Life


We’ve all the run the numbers: There’s only one small problem with this formula … who has time to close 20, 30 or 40 loans per month and have a life outside of work? I’ve spoken to hundreds of loan originators in the past few months and this is what I’ve heard:  I have 100 emails in my box right now, and I cannot possibly get to all of them …  I’m having my best month EVER, but I’m working 12-14 hour days …  Why does it have to so HARD to get a loan closed right now?! I could get so much more done if my operations team would just get it together …

So what’s the answer? I’ve spent a lot of time researching this and I’m excited to report my results to you. There are three strategies I’ve discovered from conversations I’ve had with dozens of top producers in the mortgage, financial and real estate industries. Here’s what they’ve told me: Strategy #1: Life balance through better time and energy management I spoke to one top producer who just came back from a two-week Safari in Africa … this summer in 2012! Who has time to go to Africa on Safari? I spoke to one top producer who was on his way to his first 10-day vacation with his wife in over 20 years. Who has time to go to Europe for 10 days in the middle of the biggest refinance boom in recent memory? I spoke to one top producer who said to me, “Gibran, I had to go through cancer before I got my life in order. I had to get real close to death before I finally realized the meaning of life …” So I asked him “Why?” I asked him what the whole cancer experience taught him and why it propelled him to top producer status. He said, “I realized my time on this Earth is limited, so I chose to spend my time more efficiently. I called up all my B- and C-Level clients and fired them. I told them, ‘Sorry, I have cancer, I can’t service you anymore.’ Then, I changed the way I spent my time to focus on the relationships that really matter most, in my business and personal life. When I’m at home with my kids, I stay focused on family and don’t check e-mail. When I’m at work, I stay focused on work and don’t check Facebook. I just got real clear on what I need to be spending my time on.” Powerful. This top producer, Ken Deleon, went on to become the number one real estate agent in the country, closing $275 million in volume last year. I hope to God we don’t have to go through cancer to learn this lesson in our own lives. What can we learn from Ken?  The choice is ours in terms of how we spend our time and energy.  Some choices we make will keep us stuck, while other choices we make will propel us to top producer status.  We could improve our results in life and business if we simply make different choices. So let’s make better choices. Starting right now! Strategy #2: Team building and leadership One of my favorite conversations was with Diane Clark, a top loan originator who closes $100 million annually in purchase volume (plus an additional $16 million in continued on page 48

nmp news flash

continued from page 29

“We support efforts to protect the taxpayers, but want to emphasize the importance of ensuring continued liquidity that will provide the affordable mortgage financing necessary to support the housing market. It is critical that the transition of Fannie Mae and Freddie Mac’s role in financing real estate does not limit the availability, or increase the cost, of financing.”

FHFA Releases New Short Sale Guidance for GSEs

Home Values Continue to Climb in July Home values continued to climb in July, increasing 0.5 percent from June to a Zillow Home Value Index of $151,600, according to the July Zillow Real Estate Market Reports. Home values were up 1.2 percent year-over-year. Sixtytwo percent of the metro markets covered in the reports saw home values climb during the month, with only 49 of the 167 metro areas experiencing declines. Of the 30 largest continued on page 34



The Federal Housing Finance Agency (FHFA) has announced that Fannie Mae and Freddie Mac— the government-sponsored enterprises (GSEs)—are issuing new, clear guidelines to their mortgage servicers that will align and consolidate existing short sales programs into one standard short sale program. The streamlined program rules will enable lenders and servicers to quickly and easily qualify eligible borrowers for a short sale. The new guidelines, which go into effect Nov. 1, 2012, will permit a homeowner with a Fannie Mae or Freddie Mac mortgage to sell their home in a short sale even if they are current on their mortgage if they have an eligible hardship. Servicers will be able to expedite processing a short sale for borrowers with hardships such as death of a borrower or co-borrower, divorce, disability or relocation for a job without any additional approval from Fannie Mae or Freddie Mac. “These new guidelines demonstrate FHFA’s and Fannie Mae’s and Freddie Mac’s commitment to enhancing and streamlining processes to avoid foreclosure and stabilize communities,” said FHFA Acting Director Edward J. DeMarco. “The new standard short sale program will also provide relief to those underwater borrowers who need to relocate more than 50 miles for a job.” This alignment comes as part of a broader FHFA effort, the Servicing Alignment Initiative, to streamline Fannie Mae and Freddie Mac programs for short sales and other foreclosure alternatives to assist struggling homeowners. FHFA announced guidelines in June that establish strict timelines for servicers considering short sales. Servicers are required to review and respond to short sales within 30 days of receipt of a short sale offer; they must provide weekly status updates to the borrower if the offer is still under review after 30 days, and they must make and communicate final decisions to the borrower within 60 days of receipt of the offer and complete borrower response package. These borrowers will not be eligible for a new mortgage backed by Fannie Mae

or Freddie Mac for at least two years after a short sale. “As the leading advocate for homeownership, Realtors know that when a family is absolutely unable to keep their home, a short sale is often the best option for homeowners hoping to avoid foreclosure,” said National Association of Realtors (NAR) President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. “Realtors appreciate FHFA’s efforts to increase the number of short sale approvals,

which limit the losses incurred by homeowners, lenders, the federal government and taxpayers.” NAR worked closely with FHFA and the GSEs to create the new guidelines and has long advocated improving the short sale process to provide more distressed homeowners with alternatives to foreclosure. NAR believes that improving short sale eligibility will allow more families to avoid foreclosure and reduce the negative impact foreclosures have on families and communities. Short sales also help stabilize home values and neighborhoods by keeping homes occupied, which benefits the housing market and aids in the recovery.

nmp news flash

continued from page 33

metro areas covered, the Phoenix metro area experienced the largest monthly increase, with home values rising 2.2 percent. Other large metro areas with notable monthly increases include the San Francisco metro with 1.2 percent and the Denver metro at one percent. U.S. rents continued to rise, climbing 0.2 percent month-overmonth and 5.4 percent year-overyear to a Zillow Rent Index of $1,278. Nationally, rents have increased in six out of the past 12 months, with

70 percent of metros experiencing rent increases from June to July. Rents have experienced double-digit, annual increases in several large metro areas where home values continue to decline, including Chicago (12.6 percent); Providence, R.I. (12.1 percent); and Baltimore (11.9 percent). This is likely due to both continued high foreclosure levels in these markets, which increases rental demand, as well as consumer reluctance to buy when home values continue to fall.

“This summer, the housing market continued to heal, as home values experienced their eighth consecutive month of increases,” said Zillow Chief Economist Dr. Stan Humphries. “Tight inventory levels are leading to bidding wars and multiple offers across the country. Looking ahead, we expect to see less aggressive increases in the fall as rising values lift some would-be sellers out of negative equity, allowing them to place their homes on the market.” Foreclosures continued to decline in July, with 5.7 out of every 10,000 homes in the country being foreclosed. That was down from 6.5 out of every 10,000 homes in June.


Reverse Mortgage Roundup NRMLA’s 2012 Annual Meeting & Expo Hyatt Regency Riverwalk | San Antonio Texas

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SPECIAL S P E C I A L GUESTS: GUESTS: FHA A Commissioner Carol Galante (Ac (Acting) cting) Deputy Coulter Deputy Assistant Secretary Charles Co oulter Senator Fred Thompson Economist Jared Bernstein Ginnie Mae President TTed ed e TTozer oozer

Sessions, include: # Program updates from HUD officials # What can we expect from the CFPB? # Impact of the presidential election on your business # Marketing to different generational groups

For registration information, visit


HARP Revisions Drive Q2 Refi Volume Freddie Mac has released the results of its second quarter refinance analysis showing homeowners who refinance continue to strengthen their fiscal house. In Q2 of 2012, 81 percent of homeowners who refinanced their firstlien home mortgage either maintained about the same loan amount or lowered their principal balance by payingin additional money at the closing table. Of these borrowers, 59 percent maintained about the same loan amount, and 23 percent of refinancing homeowners reduced their principal balance; the share of borrowers that kept about the same loan amount was the highest in the 27-year history of the analysis. The net dollars of home equity converted to cash as part of a refinance, adjusted for consumer-price inflation, was at the lowest level in 17 years (since the second quarter of 1995). In the second quarter, an estimated $5 billion in net home equity was cashed out during the refinance of conventional primecredit home mortgages, substantially less than during the peak cash-out refinance volume of $84 billion during the second quarter of 2006. “The typical borrower who refinanced reduced their interest rate by about 1.5 percentage points,” said Frank Nothaft, Freddie Mac vice president and chief economist. “On a $200,000 loan, that translates into saving about $2,900 in interest during the next 12 months. Fixed-rate mortgage rates hit new lows during June, with 30year product averaging 3.68 percent and 15-year averaging 2.95 percent that month, according to our Primary Mortgage Market Survey (PMMS).” The median interest rate reduction for a 30-year fixed-rate mortgage (FRM) was about 1.5 percentage points, or a savings of about 28 percent in interest rate, the largest percent reduction recorded in the 27 years of analysis. Among the refinanced loans in Freddie Mac’s analysis, the median depreciation of the collateral property was 16 percent over the median priorloan life of 5.1 years. The prior-loan age was the oldest in 13 years, surpassed only by the prior-loan age recorded in the third quarter of 1999. Property-value change and loan age varied between Home Affordable Refinance Program (HARP) and other refinance loans. For loans refinanced during the second quarter through HARP, the median depreciation in property value was 34 percent and the prior loan had a median age of about 5.5 years (to be eligible for HARP, the prior loan had to be originated before June 1, 2009). Excluding HARP loans, other loans refinanced during the second quarter had a median property-value decline of two percent over a median prior-loan age of about four years.

“The enhancements to HARP announced in October, such as removing the maximum loan-tovalue limit, resulted in additional refinance volume during the second quarter,” said Nothaft. “HARP loans were about one-third of Freddie Mac’s refinance fundings during the second quarter, the highest share since HARP’s inception.”

New Ellie Mae Report Finds Purchase Market Showing Some Traction

Independent mortgage banks and mortgage subsidiaries of chartered banks made an average profit of $2,152 on each loan they originated in the second quarter of 2012, up from $1,654 per loan in the first quarter, according to the Mortgage Bankers Association (MBA). “With the surge in production volume in the second quarter, net production profits among independent mortgage bankers increased, surpassing 100 basis points for the first time since inception of our report in 2008,” said

MBA Associate Vice President of Industry Analysis Marina Walsh. “Secondary marketing gains improved by almost 14 basis points over the first quarter, the result of widening spreads between the primary and secondary markets. With the record volume, total production operating expenses also decreased by $164 per loan over the first quarter.” Among the other key findings of MBA’s Quarterly Mortgage Bankers Performance Report are:  In basis points, the average production profit (net production income) was 107 basis points in the second quarter, compared to 82 basis points in the first quarter.  Average production volume was

$371 million per company in the second quarter, up from $301 million per company in the first quarter. The average volume by count per company rose to 1,700 loans in the second quarter, from 1,380 in the first quarter.  The purchase share of total originations, by dollar volume, was 48 percent in the second quarter, up from 42 percent in the first quarter. For the mortgage industry as whole, MBA estimates the purchase share at 26 percent in the second quarter of 2012, from 25 percent in the first quarter.  Measured in basis points, secondary continued on page 43

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Ellie Mae has released its Origination Insight Report for July 2012, drawing its data and insights from a robust sampling of the significant volume of loan applications—more than 20 percent of all originations in the United States—that flow through Ellie Mae’s Encompass360 mortgage management software and the Ellie Mae Network. Ellie Mae found that 45.8 percent of all applications closed in July 2012 compared to 46.2 percent in June 2012. “The 30-year note rates on closed loans declined to 3.870 percent in July, down from 3.992 percent in June, and were at the lowest point since we began tracking in August 2011,” said Jonathan Corr, chief operating officer of Ellie Mae. “With more borrowers ‘in the money,’ the refinance share of closed loans rose by 4% on a monthover-month basis. The percentage of closed conventional refinances with LTVs of 95 percent-plus declined for a second consecutive month to 8.7 percent in July from 10.2 percent in June, perhaps indicating that HARP 2.0 activity may be slowing.” In 2011, the total volume of mortgages that ran through Ellie Mae’s Encompass360 mortgage management software was approximately two million loan applications, or 20 percent of all U.S. mortgage originations. The Origination Insight Report mines its application data from a robust sampling of approximately 33 percent of all mortgage applications that were initiated on the Encompass origination platform. Given the size of this sample and Ellie Mae’s market share, the Company believes the Origination Insight Report is a strong proxy of the underwriting standards that are being employed by lenders across the country. “In July, the closing rate for purchase loans increased for the third month in a row up to 58.7 percent from 57.8 percent in June and 56.8 percent in May––a sign that the purchase market may also be showing some traction,” said Corr. “The combination of extremely low interest rates and a strengthening purchase market pushed out closing times for both refinance and purchase loans in July. These time frames are similar to what we saw in January of last year, when a surge of activity challenged the industry’s capacity.”

Mortgage Banker Profits Surge in Q2

The CFPB is the New Sheriff in Town ... Ready for a Visit? By Ginger Bell Compliance management requirements for all non-banks have reached a new level with the new Consumer Financial Protection Bureau (CFPB) Examination Manual. According to the CFPB’s Web site:




“The CFPB’s approach to non-bank examination will be the same as its approach to bank examination. It may include a combination of any of the following tools: requiring nonbanks to file certain reports, reviewing the materials the companies actually use to offer those products and services, reviewing their compliance systems and procedures, and reviewing what they promised consumers. In general, we will notify a nonbank in advance of an upcoming examination.” While the CFPB has not specified just how much notice they will provide prior to an exam, some non-bank companies have been warned of a CFPB audit up to three weeks in advance. That is an improvement over some state audit notifications, which are often no more than a couple of days. However, given the magnitude and uncertainty regarding what they will be looking for, three weeks seems hardly long enough to prepare. One comprehensive area of CFPB compliance review that is new to most non-banks is policies, procedures and training. It is important for all nonbanks to pay attention to this new requirement, as non-compliance can have a pronounced negative effect on the outcome of the exam.

CFPB examination procedures First, let’s review the purpose of the CFPB examination. The CFPB Supervision and Examination Manual is a guide demonstrating how the CFPB will supervise and examine consumer financial service providers under its jurisdiction for compliance with federal consumer financial law. Completing the examination modules allows examiners to develop a thorough understanding of mortgage loan originators’ and lenders’ practices and operations.

Understanding the Compliance Management Review General principles and introduction The CFPB refers to those under its supervision as “Supervised Entities.” Supervised entities within the scope of CFPB’s supervision and enforcement authority include both depository institutions and nondepository consumer financial services companies. According to the CFPB, the goal of the supervised entity is to maintain legal compliance. A supervised entity must develop and maintain a sound compliance management system that is integrated into the overall framework for product design, delivery and administration. Supervised entities are also expected to manage relationships with thirdparty service providers to ensure that these providers effectively manage compliance with federal consumer financial laws applicable to the product or service being provided. The CFPB expects every regulated entity under its supervision and enforcement authority to have an effective compliance management system adapted to its business strategy and operations. Each CFPB examination will include review and testing of components of the supervised entity’s compliance management system. The initial review will help determine the scope and intensity of an examination. The findings of more detailed reviews and transaction testing will determine the effectiveness of the compliance management system and whether enhancements or corrective actions are appropriate. Compliance may be managed on a firm or an enterprise-wide basis, and supervised entities may engage outside firms to assist with compliance management. However an entity chooses to manage compliance they are expected to comply with federal consumer financial laws and appropriately address and prevent violations of law and associated harms to consumers through its compliance management process. The CFPB expects that compliance management activities will be organized within a firm, legal entity, division, or

compliance, including federal consumer financial laws and policies and procedures related to offerWhat are the components ing consumer financial of an effective compliance products and services. management program?  Review policies and The CFPB advises in its procedures to deterManual that “A sound commine whether and pliance program is essenhow they address new tial to the efficient and sucor amended federal cessful operation of the consumer financial supervised entity, much as “The CFPB expects laws and regulations business plan.” A compli- every regulated entity since the preceding ance program includes sev- under its supervision examination or since eral components, two that and enforcement the most recent conmany organizations are not authority to have an sumer compliance prepared for include: effective compliance examination by a state management system or prudential regula Policies and procedures adapted to its business tor, if applicable, if  Training strategy and this is CFPB’s first operations.” examination. The CFPB outlines that a supervised entity should establish a formal,  Request and review policies and procedures to determine whether they written compliance program. This procover consumer financial gram should be a planned and organized products or services introduced since effort to guide the entity’s compliance the preceding examination or since activities. There should be a written prothe most recent consumer compligram that represents an essential source ance examination by a state or prudocument that may serve as a training and dential regulator, if applicable, if this reference tool for employees. The CFPB is CFPB’s first examination. cites that “A well-planned, implemented,  Review policies and procedures and maintained compliance program will relating to compliance with specific prevent or reduce regulatory violations, regulatory requirements (such as protect consumers from non-compliance the privacy of consumer financial and associated harms, and help align busiinformation) and their implementness strategies with outcomes.” ing procedures. All non-banks must have a compliance  Review policies and procedures for products in which employee compenprogram in place sation structures, pricing or underThe examination objectives and procedures writing discretion, or other features for the compliance program of the supermay pose heightened risk of unlawful vised entity are outlined in the Manual. discrimination. Below we will review two elements of the compliance program which include policies  Review policies and procedures designed to ensure that the entity’s and procedures and training. third-party service providers comply with legal obligations applicable to Policies and procedures–Examination the product or service of the examobjectives ined entity and the provider. The CFPB expects that compliance policies and procedures be documented and in  Review policies and procedures for record retention and destruction sufficient detail to implement the boardtimeframes to ensure compliance approved policy documents. Examiners with legal requirements. will request and review compliance policies and procedures. They will discuss ele-  If compliance procedures are embedded in automated tools or ments with compliance officers or other business unit procedures, deterresponsible officers and employees of the mine that a qualified compliance supervised entity. Here is a short list of officer or contractor reviewed these what examiners will look for: tools for consistency with policies and procedures and compliance  Request and review policies and with applicable federal consumer procedures related to consumer business unit in the way that is most effective for the supervised entity.

laws and approved them for the purpose for which they are utilized. What Examiners will be Looking for in your Training Program The CFPB notes that education is essential to maintaining an effective compliance program. They note that all executives should receive sufficient information to enable them to understand the entity’s responsibilities and the commensurate resource requirements. Management and staff should receive specific, comprehensive training that reinforces and helps implement written policies and procedures. The company should also include requirements for compliance with federal consumer financial laws. This includes prohibitions against unlawful discrimination and unfair, deceptive and abusive acts and practices. Examiners will be looking to see that the following is being met in a company’s training program:

This means that companies will need to have a complete and comprehensive training program in place that not only delivers training but also provides for the accountability to show Examiners content delivered in training programs, who attended and how often training is received.

2. Develop your training program for

4. Size is not important. You may be a one person Mortgage Broker, but in the eyes of the CFPB, you are a “Supervised Entity” and expected to abide by the rules, regulations and compliance requirements just like the “Big Banks.” The Dodd-Frank Act, when fully implemented, will help to promote consumer education and financial literacy. The longterm goal is to provide education for homebuyers entering into the housing market and protect them from loans that are not fair or would not be in their best interest. With an increased knowledge of the risks associated with financing the purchase or refinance of a residential property homebuyers will be able to make more

Ginger Bell is a best-selling author and education specialist who develops training programs for many companies including Plaza Home Mortgage, OnlineEd and Mortgage Success Source. Ginger recently joined forces with author and speaker, Brian Tracy, and other successful business professionals to publish the book, Cracking the Success Code. Bell is an NMLS- and NAMB-approved instructor and has been awarded the Presidential Award by both the California Association of Mortgage Professionals and the Oregon Association of Mortgage Professionals for her commitment to bringing quality education to the mortgage industry. She may be reached by e-mail at or visit



What steps should you take NOW to prepare? 1. Review and update your policies, procedures and compliance manual. If you do not have policies and procedures, get them now!

3. Keep records of your training. This includes material, testing and tracking of all staff. This is more than just your Nationwide Mortgage Licensing System & Registry (NMLS) Continuing Education.

education decisions. The best advice in understanding, complying with and implementing the changes that we will be seeing in the coming years is to be ready. This is REALLY important. It is no longer what you say, but what your customers understand. The best way to succeed with the Consumer Financial Protection Bureau is to be proactive.


Training–Examination procedures Examiners will request and review training records and interview management and staff to evaluate this portion of the compliance program. Examiners will be looking to the following for training compliance:  Request and review the schedule, record of completion, and materials for recent compliance training of board members and executive officers.  Determine the involvement of compliance officer(s) in selecting, reviewing, or delivering training content.  Request and review policies, standards, schedules, and records of completion for compliance-specific training of compliance professionals, managers, and staff, and documents demonstrating that third-party service

your staff. If you do not have a training program get signed up for one and make certain it provides your company with the ability to offer all the training you will need. 

 Compliance training is current, complete, directed to appropriate individuals based on their roles, effective, and commensurate with the size of the entity and nature and risks to consumers presented by its activities.  Training is consistent with policies and procedures and designed to reinforce those policies and procedures.  Compliance professionals have access to training that is necessary to administer a compliance program that is appropriate for that supervised entity and its business strategy and operations.

providers who have consumer contact or compliance responsibilities are appropriately trained. Request and review samples of the content of training materials and comprehension tests, including training related to new regulatory requirements, new products or channels of distribution, and marketing (including scripts). Request and review training developed as a result of management commitments to address monitoring, audit, or examination findings and recommendations or issues raised in consumer complaints and inquiries. Determine whether the program is designed to provide training about the specific regulatory requirements relevant to the functions of particular positions, such as the Truth-in-Lending Act (TILA) for loan officers, Fair Lending, Equal Credit Opportunity Act (ECOA), Home Mortgage Disclosure Act (HMDA), etc. Review records of follow-up, escalation, and enforcement for units with training completion rates that do not meet the supervised entity’s standards or deadlines. Request and review the supervised entity’s plans for additions, deletions, or modifications to compliance training over the next 12 months and any plans for changes to the overall training resources and compare actual training activities to prior plans. Draw preliminary conclusions about the strength, adequacy, or weakness of the training element of the compliance program, and select lines of business, organizational units, or other areas for more detailed review and testing.

Leveraging Your Mortgage Education to Win in Today’s Market By Jeff Mifsud




What will you do with your mortgage education this year that will give you an edge over your competition? If you’re like most mortgage loan originators, your answer is likely, “Nothing.” I’d like suggest that this may not be the best answer! Keep reading and you’ll learn a simple way you can leverage your education to help you win new clients and new relationships. We’re about to enter the last quarter of the year, which is continuing education (CE) season for most MLOs. You’ll have the opportunity to learn some fascinating topics like, the “Red Flag Rules” or the “Depository Institutions Deregulation and Monetary Control Act.” Not so fascinating? Okay, I admit I agree with you there. The sad truth is … with all due respect to the course producers, the topics aren’t so exciting. And more than that, unfortunately the way many of the courses are written make much of the information irrelevant to what you do on a daily basis as an MLO. But here’s another truth: You are putting in the time and expense of educating yourself, so why not make this fact known when meeting with a new client or a potential referral source? Building your business is all about creating strong relationships: Strong relationships with both past/existing clients, and with potential new clients; strong relationships with existing and potential referral sources. Before transitioning to the educational side of the industry, I spent 15 years originating loans. I was a referral-based purchase originator from day one, and I always viewed referral relationships as clients. With the mindset that every referral partner is a client, you will continually be thinking of ways you can nurture and fortify that relationship. Thus, throughout the rest of this article, every reference to “client” includes referral relationships. Communicating the fact that you continue to educate yourself about your profession and its products will engender trust in the mind of potential clients. In the current rate environment, consumers are taking the opportunity to seek out the services of mort-

gage professionals like yourself, but just because a consumer uses you for their mortgage transaction does not mean they will refer business to you. Your service can be viewed as a commodity in the eyes of the consumer, so it is your job to present information to your clients that conveys very clearly:  That you have what they need;  That they have good reason to feel confident about selecting you from all the other MLOs; and  That they wouldn’t want their family, friends, or co-workers to use anybody but you for their mortgage transactions. Tell your clients about the educational requirements that you must honor, perhaps even list a few of the specific courses you have taken. By doing so, you help to instill the confidence they need to feel committed to using you again, as well as to refer others to you. Now let’s take a look at some specific situations in which you can take the opportunity to talk about your mortgage education with your clients.

Client presentations Before taking the actual application from a mortgage client, it is a prudent practice to make an introductory presentation so s/he can get to know you and what you stand for. The time you spend with your client at application is a form of marketing, and too many MLOs just use the time to be an ordertaker. That is, all they do is complete the application and collect documentation. Don’t waste this opportunity to initiate a relationship that is based on knowledge, confidence and trust! Did you ever wonder why a real estate agent enjoys a stronger client bond than does an MLO? The most important reason this is so is due to the fact that an agent may spend about 17-20 faceto-face hours with a buyer. Every time they meet to view a home, the agent imparts knowledge to the buyer which strengthens the trust and confidence in the agent. As an MLO, you’ll only have

about one hour for the application, and brief phone conversations throughout the process, followed by about an hour for the closing … assuming you actually attend your closings! This makes it all the more critical to capitalize on the time that you do have with your client at the time of application. Make the most of the application hour to leave a lasting impression. Finding a way to make them aware of your level of education is an important factor in achieving this.

“Your service can be viewed as a commodity in the eyes of the consumer, so it is your job to present information to your clients that conveys very clearly …”

Real estate agents In the same way you present your educational background with clients, it’s important to do so with real estate agents you are meeting for the first time. Agents want to have trust in you just as mortgage clients do. If you want them to refer you client of theirs, they will want to do so with the utmost confidence that they are referring to a true professional.

Builders are generally very loyal referral sources and once you are “in” they will refer you their clients without hesitation as long as you continue to earn their trust and do well by their buyers. Your level of education and focus on compliance within the educational topics will be something builders will want to hear when you make your presentation to them.

CPAs and attorneys

Of all the groups mentioned, this group is the most educated, and they like to refer to those in other professions that have acumen and knowledge. Both of these fields are the study and application of law, and the mortgage industry is the same in that you need to study the law relevant to your mortgage practice, and then apply it. When you meet with these professionals, it is paramount that you convey the message that you are an educated professional and that the clients they refer are in very good hands.

Real estate brokers If you like to be an information resource for real estate agents, then meeting with brokers or managers and showing them ways that you can help educate their agents is an excellent way to gain referral partners. Explain to the broker that you are constantly educating yourself, and that you can provide information that is important for agents to know. By providing short educational classes, you can help agents become more knowledgeable professionals. This offering is nearly always appreciated, as one of the biggest challenges for a real estate brokers and/or managers is providing quality education for their agents.

Builders As the new housing sector continues to lift itself up, builders will have a greater need for MLOs that they can trust, and who understand the new construction process. At the height of the housing market, it seemed like every builder owned their own mortgage company! But now that it is more difficult to own a mortgage company, more and more builders will need the help of top MLOs.

Taking action Over the next two days, sit down and review the presentation you currently give to your clients at application. Include a list of some of some of the courses you have taken, and how they keep you informed on the latest changes affecting your business—enabling you to provide a higher level of service to your clients. Next, practice your presentation so you feel comfortable speaking about the new topics and language you’ve added. Finally, begin using this enhanced presentation with your new clients (remember, this includes your referral sources!) Increasing your mortgage education may make you smarter, but now you have to leverage this education to help you win more clients. Jeff Mifsud is founder of Michigan-based Mortgage Seminars LLC, a former FHA underwriter with 15-plus years of experience originating FHA loans, an FHA expert for and creator of The FHA Originator, a monthly FHA newsletter. Jeff may be reached by phone at (248) 4038181 or visit

Finding The Right Mortgage Education Provider By Sharmen Lane

you’re considering. Ultimately, you the loan officer are responsible for knowing the laws and regulations in your industry, therefore, it’s up to you to choose the format, venue and content that you will get the most out of. Mortgage education is not one size fits all. Review your options, do your research and choose the one that best fits your needs. Sharmen Lane of Loan Officer School may be reached by phone at (917) 5833830 or e-mail





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There are many things to Each venue has its own consider when choosing benefits and drawbacks. your pre-licensing or conWhen studying on your tinuing education (CE) own, you must read the provider. Whether you material, process and are a seasoned mortgage retain it and hope you professional or just getunderstand it properly. ting started, content and On the positive side, you delivery are just two fachave the flexibility to fit it tors to think about. If you into your schedule so you don’t want your hours to don’t have to take time be a waste of time, then out of the office. Live you need to do your “Ultimately, you the classes have the burden research. of finding the day and loan officer are Technology in the 21st time to be out of the responsible for Century allows you to knowing the laws and office and away from choose not only when your files, employees or regulations in your and where, but how you clients, but many get industry, therefore, take your required mortmore out of the live classit’s up to you to gage education. Before room environment choose the format, deciding on a course, you because of the participavenue and content should ask yourself what tion and interaction. With that you will get the environment best fits Webinars, there’s the most out of.” your needs? benefit of doing it from Not all mortgage education providers your computer and have a live instrucare created equal. In order to be tor to ask questions and run scenarios Nationwide Mortgage Licensing System by. On the downside, you must find the (NMLS)-approved, a course provider must offer material on federal laws and regulations, general mortgage knowledge, loan originator activities and ethics. However, how that material is delivered, and the environment in which it is delivered, can affect your retention and ultimately, your mortgage career. Today, many loan officers think that an online course is the best answer. It’s flexible and you can do the work according to your own schedule. However, not everyone retains the information they’ve been exposed to in an online setting. Others find great value in live courses or private on-site instruction. Here, you can interact with the instructor, and at the same time, learn from the questions and comments by the other participants. These also have a social benefit. Another venue is that of Webinars. This too is an online format, yet with live human instruction. For some, this is the best of both worlds. It’s online, so you can do it from your home or office, yet with a live instructor to deliver the content and interact with.

uninterrupted time to be present and participate in order to receive credit. One last thing to consider when looking at your mortgage education is the actual material presented. Some providers only offer the bare minimum requirements. Others give information with either more of a finance or real estate focus. While others realize that you are a residential mortgage loan originator and focus on the specialized mortgage content that you need to do your job best. Don’t be afraid to call ahead and ask about the material and delivery of the class

Learning in the Mortgage Industry is More Important Than You Think By Judy Wheatley & Alice Alvey The press is replete with the need for a greater professionalization of mortgage participants. This is driven by new regulations as well as profit and loss considerations. Few dispute this, but many underestimate its magnitude. Learning, by which we mean both intellectual achievement and the process of training, is becoming a critical factor for mortgage entities.

Investment trends




While not specific to the mortgage industry, the American Society of Training & Development (ASTD) reported that in 2010, U.S. organizations spent 13.5 percent more than the previous year, but this fell much lower than the pre-recession levels. 1 From our experience, with the ever-increasing regulations and industry changes, mortgage lenders and servicers need to accelerate investment in training. Failure to invest in training has a number of consequences. Underinvestment in training rapidly becomes an impediment to the employee’s professional, as well as the company’s, intellectual stature. Another consequence of underinvestment in human capital is constrained business opportunities. Profit in the mortgage industry, like many others, is idea-driven. And the ideas come from the employees. While this was true in the past, it is ever more important as margins shrink, competition increases and intellectual capital becomes scarcer. It is essentially a question of building versus buying. Building talent in the workforce is far cheaper than trying to buy it at marginal prices in the labor market. Investing in training enhances company profits and improves an organization’s competitive edge. It also increases productivity, as well as customer and employee satisfaction.

Training as motivation Optimizing learning involves elements of career development, as well

the technology of information delivery systems. Mortgage lenders and servicers need to ensure that the right employees are trained at the right times to maximize their return on training investment. Specific learning paths need to start with new employee orientation and onboarding. A common complaint from many new mortgage employees is that orientation was boring or that they were left with a “sink or swim” feeling. In the mortgage industry, it is typical for a new employee’s supervisor to show the new employee the ropes. Onboarding programs should last weeks or even months and they need to be carefully planned to educate the employee about corporate values, who is who in the organization, and their specific job responsibilities, as well as performance expectations. A comprehensive new employee education plan serves as an important recruiting and retention tool, as well as showing the employee the company values and that the firm wants to help them to succeed in their new job. Mortgage lenders and servicers need to create a learning culture within their organizations. Specific and governed learning plans for onboarding new employees, meeting industry compliance requirements, and for developing the careers of employees are needed. In addition, mortgage lenders and servicers must invest in adequate financial and human resources to ensure effective learning management. Regardless of whether education is delivered in the classroom or online, the training must be interactive, relevant, and effectual to achieve desired results.

SAFE Act requirements Optimized training programs also must recognize mandated regulatory constraints. Optimized training now includes meeting a mandated minimum standard—passing a federal exam. Training is now a stay-in-

business item for both System & Registry the employee and the (NMLS) issues the ID firm. number. The Secure and Fair Regulatory standards Enforcement for Mortare time-consuming, as gage Licensing Act (SAFE) well as costly. Transitionhas forced lenders and ing an underwriter from brokers to have a basic conventional to FHA can learning plan for origitake from six to nine nators. However, the weeks, which is a virtual minimum 20 hours of eternity when the turnpre-licensure education around time in underis a crash course on how “Failure to invest in writing is six days. From a to pass the federal exam. training has a number regulatory perspective, Everything from prehowever, failure to adeof consequences.” qualification to forecloquately train is not an —Judy Wheatley, sure and dozens of laws Senior Vice President, option. must be covered to Indecomm Global ensure that the originaOptimized Services tor is prepared for the learning: exam. Now, however, Classroom educators and new origiversus nators struggle with a eLearning class agenda that doesn’t A variety of factors affect allow enough time to the selection of the right truly learn the fundamix of training processes. mentals of a good interThe value of the live view, in depth product classroom experience is knowledge, complete now often questioned documentation or how when so many training to apply the underwritprograms are available in ing standards just to a self-paced, online forname a few. mat. Over the last five “Mortgage lenders Lenders are slowly years, the change in the and servicers need starting to accept that industry has forced comto ensure that the business requirements panies to work with right employees are make regulatory trainfewer resources and trained at the right ing a minimum standecentralize operations. times to maximize dard. It is necessary to Live training for the their return on train to the SAFE Act entire team of processors standards, but that training investment.” at one time brings the —Alice Alvey, training is not sufficient operation to a grinding to produce a fully effec- President/Co-Founder, halt. Mortgage U Inc. tive employee. Generally, a selfSAFE Act requirements paced format will have must be supplemented before a lower cost per person but a typical employees are ready to take applica- “off the shelf” program doesn’t keep tions. The lender may find that four the learner engaged or include hours a week for two months is need- enough reinforcement to get infored just to prepare an employee to mation to stick. The reality is that complete a Good Faith Estimate (GFE) the processor is trying to answer efor each of the product and transac- mails on one monitor and clicking tion combinations available. The next in the course on the other montraining requirements expand as itor just to get the certificate. The areas of expertise are added for an distractions and interruptions which originator. Many lenders appear to occur while taking a self-paced fail to adequately train their new course are one of the primary comentrants. Their process has the indi- plaints about this style of learning. vidual paying the cost of a twenty Whatever the training approach, the hour course and then sending the course time should be treated as out originators in the field as soon as of office training days to increase Nationwide Mortgage Licensing retention.

A hybrid process, the instructorguided online course (IGOL), can give learners more time to practice with the advantage of a subject matter expert being available to answer questions. IGOLs work well when teaching things such as how to complete forms, work with a software program or learn the steps in a process. The IGOL format can cover broad topics, validate the progress and knowledge through quizzes and a final test as well as include practice activities with interactive graphics. For complex, judgment-based decisions such as risk analysis in manual underwriting, teaching requires wellorganized conversations and case studies in a live setting. Sharing experiences in an interpersonal setting gives learners valuable recall points

and therefore greater confidence and ability to execute.

must be structured to integrate and manage education programs and learning opportunities into their dayTraining is ongoing to-day operations. If a mortgage company’s training is Many mortgage lenders and sermostly reactive with the primary goal vicers have invested in a learning manof training to reduce risk and meet- agement system (LMS), which is an ing needs on a case-by-case basis, important technology tool. It helps then the organization is in need of a implement learning programs and governance framework. The key to a contributes to lowering the learning governance model is a continuous cost structure, but a LMS is only part of learning life cycle: Planning, devel- the governance framework. Governopment, deployment, management ance is a continuous process for and evaluation. improvement that requires ongoing Mortgage lenders and servicers alignment to industry changes and corneed to be strategic and align their porate objectives, and enduring combusiness objectives with their gover- mitment to change to realize a measnance principles. They need to deter- urable return-on-investment (ROI). mine how to measure the impact of learning in order to determine the Conclusion return on investment. Organizations Learning is more important than you

think. For the individual and the company, mortgage learning is a stay-inbusiness proposition in this highly competitive and deeply regulated future. Judy Wheatley is senior vice president at Indecomm Global Services, a business process outsourcing company. She may be reached by e-mail at Alice Alvey, Master CMB is president/co-founder Mortgage U Inc. She may be reached by e-mail at

Footnote 1—American Society for Training & Development, State of the Industry, 2011: ASTD’s Annual Review of Workplace Learning and Development Data, (Alexandria, Va.: ASTD Research, December 2011), PDF e-book, 7. 41

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Maintaining (and Keeping!) Steady Customer Relations is Key to the Growth of Your Business Everyone wants their business to thrive, am I right? Although that answer is a no-brainer, getting to the point of having a successful business with repeat clients can be a challenge. Here are some simple strategies to get to that point:




I Even if a potential client does not sign on with you for whatever reason (and there are hundreds of reasons why), if theyy havee a good d rapportt with h you u and feell comfortablee with h you,, then n theyy mayy send d otherr clientss yourr wayy who willl committ thankss to o thiss recommendation. For example, there was a young man who approached you about possibly getting a loan. Although the young man was unable to qualify at that time, he kept referring his friends to you. As a result, of the eight friends he sent you, six were successful sales. One customer even purchased two homes during one year … success! I Believee in n whatt you u aree selling. Clients will sense your confidence and belief in your product and there is greater chance that they will potentially purchase from you repeatedly. A good question to ask yourself is, “How will this be of better use for my clients?” Find out the ins and outs of your products. If there are any glitches, be sure to address them before you introduce it to the public. It may have great potential, but discovering even the slightest problems can scare off clients from doing repeat business with you simply because you didn’t do enough investigating. Which brings me to my next point … I Research,, research,, research!! Know everything about your product. Once you think you know it all, study it again. It’s amazing what you can pick up researching your product the second, third or even fourth time around. Don’t be afraid to add your own personal selling style to it, as long as you are honest with your clients. It is the same in business as it is with life: Honesty goes much further and your clients will respect you for that. n to o bee a leaderr (orr att leastt think k likee one). Think of those who have left I Learn their mark in this world and model their integral business habits and ethics. Start tweaking these habits to your own style and personality. I Alwayss remember:: It’ss aboutt quality,, nott quantity. What is the quality of your product? What is the quality of your selling skills? Of maintaining and keeping your clients? How many clients are you willing to deal with to give them the best customer service possible? Would it best suit you to handle just a few to start off with, and then build from there? When will you get to the point where you may need to hire more salespeople to help with your workload? What is your standard of excellence? I Sett goalss and d stick k with h them. Do you wish to personally sell $100,000 for the month? This may seem like a daunting task to any one of us, so start off with daily goals. Perhaps making 100 cold calls per day. This means in a normal eight-hour work day that comes down to only 12.5 calls per hour. Stick with this and you will get to that one client that much sooner who gives you the word you’ve been waiting for: YES! Perhaps there is a grand vacation you want to save up for, or a boat, motorcycle, house, etc. So ask yourself this very important question: What motivates me to be successful? And finally … I Celebratee yourr achievements!! Know that, at the end of the day, if you stick with your goals, you’re doing the best you are capable of doing. As in life, some days are better than others. The same pertains to achieving a successful business. Taking these simple steps will ensure that your business is going to be successful with the added bonus of having happy repeat clients! Medford, Ore.-based TagQuest is a full-service marketing firm created specifically for the ever-changing business world. TagQuest assists companies with their direct marketing, advertising and branding needs, and knows what it takes to generate quality customers and, most importantly, how to retain those customers for years to come. TagQuest brings forth a unique opportunity to utilize our experience and expertise in varying consumer sales and marketing environments. For more information, call (866) 376-5540 or visit

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Finding Your Leadership Edge By Dr. Joelle K. Jay

Every day, talented and accomplished leaders struggle because they’re too stressed, too stretched or too tired of sacrificing. As a result, many businesses are losing their leaders, and many leaders are losing themselves. They don’t know how to achieve success without sacrificing their quality of life. Fortunately, there is another way to be successful as a leader in today’s world that is more thoughtful, more strategic, and more reflective. In fact, you can learn to lead in a way that preserves your talent while enhancing your quality of life. Realize that every leader has an inner and outer edge. Your inner edge is the “you” behind the scenes: Your thoughts and motivations, aspirations, plans, decisions, strengths and weaknesses, values, and your way of becoming a success. Your outer edge is the “you” that you show the world: Your words, actions, and your interactions with the people around you. Parker Palmer, author of A Hidden Wholeness and Let Your Life Speak, illustrates the relationship between our inner and outer selves using a geometrical shape called the Möbius strip—a seamless circle twisted so that as you trace your finger around the loop, the inner side becomes the outer side, and outer turns to inner. Palmer writes: “The mechanics of the Möbius strip are mysterious, but its message is clear: Whatever is inside us continually flows outward to help form, or deform, the world— and whatever is outside us continually flows inward to help form, or deform, our lives. The Möbius strip is like life itself: here, ultimately, there is only one reality.” Your inner and outer edges are intimately related. The way you feel influences the way you act. Your actions affect your results. Your results determine the way you experience life. So in order to be effective as a leader and in your life, you need to spend time on both your outer and inner edge. Unfortunately, many leaders concentrate only on their outer edge. They focus on the company vision, mission, results, customers and clients. They tend to the emails, the phone calls, the demands, the meetings, the media, etc. Yes, all of that is appropriate and productive in a leadership role, but to be an effective leader, you also need to spend some time on your inner edge where it’s quieter, where you can think, and where you can connect to who you really are so that you can continue to perform at your peak. Your thoughts and feelings (your inner edge) influence your effectiveness as a leader, and your actions and interactions (your outer edge), in turn, shape your life. And just as your inner and outer edges are intimately related, so are your life and your leadership. The way you lead helps shape your life. The life you live will

help you lead. Become a better leader, and lead a better life. And if you don’t pay attention to both outer and inner aspects of leadership, you may suffer a fate common to many leaders: You’ll lose your edge. The more you focus on the inner edge, the more it becomes a part of your everyday life. To get started on your inner focus, pay attention to the following:

Your vision Many leaders are motivated, driven and extremely busy, yet they are still not clear about what they want. What do you want? A promotion? Time for yourself? Better relationships with your friends and family? That ever-elusive work/life balance? None of these are possible unless you stop moving long enough to figure out what you’re after. Explore your ideas. Envision a different reality. In order to achieve success in your life and as a leader, you need clarity about what you really want. That clarity comes from contemplative thought. Therefore, schedule some quite time for yourself each day—even if it’s just 10 min.—so you can develop a clear vision for yourself. Ask yourself, “Who am I as a leader?” “What do I want to achieve?” and “What do I hope to contribute?”

Your strategy Developing your strategy means choosing the select few areas that you must prioritize in order to achieve your vision. When you follow a strategy, you break out of the cycle of busy-ness that characterizes many leaders. Your strategy serves as a lifeline back to your vision. When you have a clear vision and a strategy to help you achieve it, you know your priorities, you can think about them all at once, you keep them from crowding each other out, and you find new opportunities for them to work together. Overall, when you have a strategy, you show respect for yourself and your work as a leader. You are no longer just managing your workload. You’re leading your life. Ask yourself, “What are the most important things I should be doing right now to achieve the vision I’ve set for myself and my business?”

Time for reflection When you’re reflective, you are able to identify, maximize and leverage your unique attributes to be an effective, higher achieving leader. The fact is, if you want to be your best, you need to take the time to reflect on what’s brilliant about you. Once you do, you can develop an approach to leadership that uses all of your attributes in the most advantageous way. As a result, you save time, energy and effort. You get better results, because you are doing things in the way that works best for you. You discover what it truly means to achieve success with quality of life, because they become one and the same. Best of all, you do this not by changing continued on page 45

nmp news flash 

continued from page 35

marketing income increased to 257 basis points in the second quarter, compared to 243 basis points in the first quarter. Personnel expense decreased to $3,246 per loan in the second quarter, compared to $3,350 per loan in the first quarter. Total production operating expenses, including commissions, compensation, occupancy and equipment, and other production expenses and corporate allocations, decreased to $5,128 per loan in the second quarter, from $5,292 in the first quarter. The “net cost to originate” was $3,224 in the second quarter, down from $3,413 per loan in the first quarter. The “net cost to originate” includes all production operating expenses and commissions minus all fee income, but excludes secondary marketing gains, capitalized servicing, servicing released premiums and warehouse interest spread. Productivity improved to 3.6 loans originated per production employee per month in the second quarter, from 3.3 in the first quarter. Ninety-five percent of the firms in the study posted pre-tax net financial profits in the second quarter of 2012, compared to 93 percent in the first quarter. Seventy-two percent of the 305 companies that reported production data for the second quarter report were independent mortgage companies.

Commercial and multifamily mortgage delinquency rates continued to drop for banks and rise for commercial mortgage-backed securities (CMBS) during the second quarter of 2012. Delinquency rates also declined for Fannie Mae during the second quarter, and increased by 0.01 percentage points for life companies and 0.04 percentage points for Freddie Mac according to the Mortgage Bankers Association’s continued on page 44

LOANMARQ is designed for mortgage professionals who will go the extra mile to provide exceptional service to borrowers and real estate agents. Our system will bring everyone in the transaction together and provide a seamless progression from application to closing. LoanMarq is the only service application that will allow you to organize and engage your clients with custom communications and customizable work flow. By the way… your processor will love us. FEATURES Customizable—Create a specific workflow around your current process. User friendly—Provides an easy to use system to keep everyone up to date on the status of their transaction. Alerts—Automatically sends text & email alerts to everyone involved in the transaction when milestones are achieved. Check list—Supplies a specific list of items required to complete the transaction. Upload & Download—All users can upload and download documents in a secure environment. Multi-platform—Loanmarq works on your PC, MAC, iPad and smart phone. (iPhone app coming soon) BENEFITS Turn business into more business—When you exceed the expectations or your clients and realtors they will remember you. They will also remember to send you more business. Clone yourself—Process more loans in the same amount of time. Simply engage—Stay in front of you clients with realtime transaction updates and messages. Increase velocity—Clear communication and automated work flow needed to complete a transaction will create an efficiency that saves you and your clients effort and money.



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Six federal financial regulatory agencies issued a proposed rule to establish new appraisal requirements for “higher-risk mortgage loans.” The proposed rule would implement amendments to the Truth-inLending Act (TILA) enacted by the DoddFrank Wall Street Reform and Consumer Protection Act of 2010. Under the Dodd-Frank Act, mortgage loans are higher-risk if they are secured by a consumer’s home and have interest rates above a certain threshold. For higher-risk mortgage loans, the proposed rule would require creditors to use a licensed or certified appraiser who prepares a written report based on a physical inspection of the interior of the property. The proposed rule also would require creditors to disclose to applicants information about the purpose of the appraisal and provide consumers with a free copy of any appraisal report. Creditors would have to obtain an

Commercial and Multifamily Mortgage Delinquency Rates Continue to Decline 

Six Regulatory Agencies Issue Proposal to Set Appraisal Requirements for High-Risk Mortgages

additional appraisal at no cost to the consumer for a home-purchase higher-risk mortgage loan if the seller acquired the property for a lower price during the past six months. This requirement would address fraudulent property flipping by seeking to ensure that the value of the property being used as collateral for the loan legitimately increased. The proposed rule is being issued by the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau (CFPB), the Federal

Deposit Insurance Corporation (FDIC), the Federal Housing Finance Agency (FHFA), the National Credit Union Administration (NCUA), and the Office of the Comptroller of the Currency (OCC). The Federal Register notice is attached. The agencies are seeking comments from the public on all aspects of the proposal. The public will have 60 days, or until Oct. 15, 2012, to review and comment on most of the proposal. However, comments related to the proposed Paperwork Reduction Act analysis will be due 60 days after the rule is published in the Federal Register. Publication of the proposal in the Federal Register is expected shortly.

nmp news flash

Understanding AVM Cascades for Compliance and Efficiency By David Rasmussen




If you watched the 2012 Olympics, you already know something about valuation cascades, even if you didn’t realize it. A number of events involve multi-layered judging criteria, including diving, gymnastics or dressage. The realm of automated valuation model (AVM) cascades is similar, though obviously more complex, in execution. After careful review of performance by weighting various metrics, an AVM “cascade” is the identification of the best performer for the first, second and third (valuation) positions … or Gold, Silver and Bronze if you will. In last month’s column, we discussed the Interagency Guidelines which were updated in 2010 and include new language governing the use of AVMs. We covered the specifics of the Guidelines and their requirement for AVM users to either possess the in-house expertise to evaluate AVM accuracy or to find a credible external source that provides it. In this column, we will briefly examine what goes into a proper cascade and important factors to consider. Regulators are understandably concerned that while AVMs are useful in a number of lending transactions, they need to be continually tested for accuracy. The most reliable cascades will incorporate rules around variables, including geography (usually by county), confidence score, forecasted standard deviation and others. Testing multiple AVMs side by side and focusing on key metrics, allows the tester to appropriately position the AVMs in a quality cascade. Most cascade designs incorporate three AVMs for a given rule set (i.e. a county). If all industry AVMs are tested and the top three selections are determined to provide (in ranked order) the most accurate result for a required rule set, and none of the three return an acceptable report, there is little to be gained in going further. At that point, it is best to move to your next trusted valuation approach. AVM users need to ensure that AVMs are periodically tested. Practical guidance dictates this should be done on a quarterly basis, but may vary on the size and scope of the user’s purpose. Regulators expect that, as performance results or industry expectations change accordingly, the rule sets should shift to provide the AVM(s) best suited to provide the most reliable valuations. A list of the AVMs tested, associated findings and supporting documentation, as well as the design of the AVM cascade need to be documented and accessible for any regulator discussions. An experienced tester will thoroughly examine the entire array of AVMs in the market, not just those created by a generous vendor or that emphasizes ones the vendor prefers to sell. Cascade creation is theoretically a straightforward process, but that does not mean it is simple. Properly tested and crafted AVM cascades provide a reliable, objective and efficient way to maximize your AVM usage. But always keep in mind, you—the AVM user—are responsible for ensuring the AVMs utilized comply with applicable laws and regulations and are consistent with supervisory guidance. David Rasmussen is senior vice president of operations at Veros Real Estate Solutions. For more information, call (714) 415-6300 or visit


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(MBA) Commercial/Multifamily Delinquency Report. “Commercial and multifamily delinquency rates for life companies, Fannie Mae and Freddie Mac all remain quite low, and the delinquency rate for bankheld loans continues to decline,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “The delinquency rate for loans in CMBS continues to show higher and more sustained aggregate delinquency rates, much of which is driven by the large share of these loans in foreclosure or REO.” During the second quarter of 2012, the 60-plus day delinquency rate for commercial and multifamily mortgages held in life company portfolios increased 0.01 percentage points to 0.15 percent. The 60-plus day delinquency rate for multifamily loans held or insured by Fannie Mae decreased 0.08 percentage points to 0.29 percent. The 90-plus day delinquency rate for loans held by FDIC-insured banks and thrifts decreased 0.34 percentage points to 3.11 percent. The 60-plus day delinquency rate for multifamily loans held or insured by Freddie Mac increased 0.04 percentage points to 0.27 percent. The 30-plus day delinquency rate for loans held in CMBS increased 0.12 percentage points to 8.97 percent. The second quarter 2012 delinquency rate for commercial and multifamily mortgages held in life insurance company portfolios was 7.38 percentage points lower than the series high (7.53 percent, reached during the second quarter of 1992). The delinquency rate for multifamily loans held by Freddie Mac was 6.54 percentage points lower than the series high (6.81 percent, reached in the fourth quarter of 1992). The delinquency rate for multifamily loans held by Fannie Mae was 3.33 percentage points below the series high (3.62 percent, reached during the fourth quarter of 1991). The rate for commercial and multifamily mortgages held by banks and thrifts was 3.47 percentage points lower than the series high (6.58 percent, reached in the second quarter of 1991). The rate for loans held in CMBS was 0.05 percentage points below the series high (9.02 percent, reached in the second quarter of 2011). Construction and development loans are not included in the numbers presented here, but are included in many regulatory definitions of “commercial real estate” despite the fact that they are often backed by single-family residential development projects rather than by office buildings, apartment buildings, shopping centers or other income-producing properties. The FDIC delinquency rates for bank and thrift held mortgages reported here do include loans backed by owner-occupied commercial properties.

The MBA analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: Commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, Fannie Mae and Freddie Mac. Together these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding. Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group at the end of the second quarter were as follows:  Life company portfolios: 0.15 percent (60 or more delinquent);  Freddie Mac: 0.27 percent (60 or more days delinquent);  Fannie Mae: 0.29 percent (60 or more days delinquent);  Banks and thrifts: 3.11 percent (90 or more days delinquent or in nonaccrual); and  CMBS: 8.97 percent (30 or more days delinquent or in REO).

National Mortgage Settlement Head Selects Secondary Professional Firms Joseph A. Smith Jr., designated monitor of the national mortgage servicing settlement, has announced that he has engaged five companies to serve as secondary professional firms (SPFs) to oversee compliance by the five servicers that are subject to the settlement with its terms. BKD LLP, Baker Tilly Virchow Krause LLP, Crowe Horwath LLP, Grant Thornton LLP and McGladrey LLP will join Smith and his team for a period of three-and-a-half years as they oversee the implementation of the settlement involving 49 states, the United States government and five of the nation’s largest banks. The primary role of each SPF is to assist the primary professional firm—BDO Consulting, a division of BDO USA LLP—by conducting the evaluation of one servicer that is party to the settlement. “Each secondary professional firm has a high level of expertise that will bring the detailed, independent attention we need to monitor this settlement,” said Smith of the Office of Mortgage Settlement Oversight. “Over the past month I have worked closely with BDO to select the secondary professional firms, and these firms, working under BDO’s leadership, will help to ensure that the banks are reviewed thoroughly and effectively. I am confident that these six accounting firms make up the blend we need to fully implement the settlement.” The secondary professional firms will work with their assigned servicers, and continued on page 47

finding your leadership edge who you are, but by becoming more of who you are. Ask yourself, “What’s working?” “What’s not working?” and “What should I change?”

Your intuition When going after your vision, you have two choices: You can either make things happen or you can let things happen. Making things happen is the active mode. It’s about being rational, strategic, concrete, action-oriented, goal-driven and aimed at results. It’s about forcing things if necessary, and it’s the default mode for many leaders. In contrast, letting things happen is the receptive mode. It’s about being intuitive, trusting, insightful, knowing, optimistic, and open to possibility. On the inner edge there’s space for intuition, which is letting things happen and having enough space and wherewithal to recognize opportunities as they present themselves to you, so you don’t have to work so hard all the time. Ask yourself, “What opportunities are available to me now?” and “What do I instinctively know?”

Your alignment When you’re in alignment, the “you” in your personal life is the “you” in your professional life. The ideas that apply over here also work over there. You are who you are wherever you are; you are true to yourself. Too often, we separate our work and our life into boxes. We compartmen-

new to market

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talize. And while compartmentalizing may work pretty well in a storage room, it’s no way to live a life. You are whole. Take some time to consider all the pieces of your life and business and make sure they all make sense. Ask yourself, “How are the different decisions I’m making all contributing to the vision I have for my leadership and my life?”

The gift of leadership When you practice the personal leadership strategies presented, you gain a greater sense of self. You achieve your vision and goals, and you do so in a way that fulfills and sustains you. You get a sense of control in this crazy world, and you gain the ability to make choices, take risks, and be the leader only you can be. That’s when you discover that leadership itself is truly a gift. Dr. Joelle K. Jay is an executive coach specializing in leadership development and the author of The Inner Edge: The 10 Practices of Personal Leadership, a book that shows leaders how to improve their effectiveness by learning to lead themselves. Her newsletter, The Inner Edge Quarterly, offers articles, exercises, tips, quotes, and success stories from real leaders to help you excel. She may be reached by phone at (775) 324-5377, email or visit

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Your turn National Mortgage Professional Magazine invites you to submit any information promoting new “niche” loan programs, new products or any other announcement related to the introduction of a new program, to the attention of: “We’ve launched mortgage careers since 1987”

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Churchill Mortgage has announced a new training program for recent college graduates. Recruiting several college graduates, including Christopher Forbes (graduate of Virginia Military Institute in Lexington, Va.), Benjamin Goodwin (graduate of The University of Tennessee in Knoxville, Tenn.), Lawson Hardwick (graduate of Lee University in Cleveland, Tenn.), Grant MacFarland (graduate of Lee University in Cleveland, Tenn.) and Richard Sharp (graduate of The University of Tennessee in Knoxville, Tenn.), the new program aims to provide long-term career opportunities for individuals with limited work experience, who are often at a disadvantage when job hunting. Customized for each employee, the program includes high-level introductions to numerous departments within Churchill Mortgage to expose employees to all aspects of the lending process. Employees spend anywhere from several weeks to a couple of months within each department. Based on each employee’s strengths as well as personal career goals

and interests, he or she will then be placed in a permanent position. “Our goal is to prepare young adults for the future,” said Mike Hardwick, president of Churchill Mortgage. “A common challenge faced by college graduates is finding a job. Our training program helps prepare these individuals for long-term careers by equipping them with the knowledge and skill set they need to succeed. Whether they chose to follow a career path with Churchill Mortgage or move on to another opportunity, we look forward to continuing to be a major employer in Nashville.” 

Churchill Mortgage Develops Training Program Geared Toward Recent College Graduates





robust suite of valuation services, United States Appraisals can continue arming its clients with the accurate valuations needed for profitable decision making. This allows United States Appraisals to serve the client’s need for a cost-effective alternative to a full United States Appraisals and appraisal with a higher degree of accuBradford Technologies have formed racy, while maintaining appraiser a partnership to further expand input and keeping the work within the United States Appraisals’ valuation appraiser community. services by offering superior, statisti“We are thrilled to partner with cally supported property valuations United States Appraisals” said James using the latest version of the Regnere, vice president of business Collateral Valuation Report-CVR 2.0. development for Bradford The innovations in the new CVR for- Technologies Inc. “As a top company mat provide greater clarity and that provides professional appraisal transparency of the appraiser’s valu- management services nationwide, ation process. The new report format they offer appraisals of the highest also makes greater use of charts to quality. With the addition of the CVR convey information and statistics to to their valuation services, they now enhance the reliability and accuracy will be able to offer not only top of the valuation. quality appraisals, but will further “With the CVR, we provide a better expand their business and reputation solution than standard BPO/AVM as a leader in the professional products. Giving our clients more appraisal management service.” accurate data will allow them to make better decisions,” said Aaron Fowler, Mortgage Professionals to president of United States Appraisals. Watch “Providing our appraisers with an  Carrington Mortgage Services has additional source of income will also announced the addition of Lynn be of high value moving forward.” Halstead as vice president of wholeWith the addition of the CVR to its sale lending.

 Mortgage Contracting Services LLC (MCS) has announced the promotions of Matt Jones and Nicole Saraceni to assistant vice presidents of operations.



United States Appraisals Partners With Bradford Technologies on Appraisal Transparency

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heard on the street

 First Guaranty Mortgage Corporation has named Patricia Trimble as its national wholesale sales manager.  WFG National Title Insurance Company has announced the additions of Steven Dunsmore as senior vice president, title operations manager-default services and Dean Kirchen as senior vice president, title operations manager-default services.  American Mortgage Network (AmNet), the wholesale channel of Bexil American Mortgage, has announced the appointment of Danielle Royal to southwest division manager; Debbie Hood to division manager of Northern California, Oregon, Washington, Idaho and Utah; and Tony Campat as wholesale sales manager for Southern California.  Jamie Moyle, president and chief operating officer of RealtyTrac, has been promoted to the position of chief executive officer. RealtyTrac has also named Lauren Guzak vice president of data licensing.  Open Mortgage has named Joe

Morris as senior vice president of reverse mortgage lending. Real Estate Mortgage Network Inc. (REMN) has announced the addition of Rose Balhorn as Michigan area sales manager and mortgage loan originator. HomeStreet Bank has named Rose Marie David senior vice president and retail mortgage production leader. David Blazek has joined Plaza Home Mortgage Inc. as regional sales manager. Genworth Financial’s U.S. Mortgage Insurance (USMI) division has announced that John Clifford has been promoted to senior vice president, commercial operations and Matt Young has been named senior vice president of sales. Lisa Taylor has been appointed president of WCS Lending. HeritageBank Mortgage has announced the addition of Stephen M. Cannon and J. Brent Harrell as co-presidents, and Patrick Huefner as executive vice president, director of secondary market operations. Kevin Stafford has been named branch manager for the Churchill Mortgage branch in Memphis, Tenn. Churchill has also named Amy Delk as account executive for community banking solutions. Paul Hayman has been named chief executive officer of Inclyne Inc.

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

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

nmp news flash

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the servicers’ internal review groups, to oversee execution of the settlement. As the Monitor’s primary professional firm, BDO will continue its role as the lead firm associated with the settlement.

Study Finds Affordable Housing Remains Just That ... Affordable

Study Finds Owning a Home After Three Years More Beneficial Than Renting For most buyers who intend to live in a home for at least three years, buying is a better financial decision than renting, according to a new analysis by Zillow. Zillow

analyzed the “breakeven horizon” in more than 200 metropolitan areas and 7,500 U.S. cities to determine how many years it would take before owning a home becomes more financially advantageous than renting the same home. In more than 75 percent of the metro markets analyzed, a homeowner would break even after three years or less of owning a home. All possible costs associated with buying and renting were incorporated into the analysis, including downpayment, mortgage and rental payments, transaction costs, property taxes, utilities, maintenance costs, tax deductions and opportunity costs, while adjusting continued on page 48



Since its inception, the nation’s Low-Income Housing Tax Credit (LIHTC) Program helped produce more than 2.2 million affordable apartments, accounting for roughly onethird of all multi-family rental housing constructed between 1987 and 2006. A new report by the U.S. Department of Housing & Urban Development (HUD) finds that after an initial 15-year required “affordability period,” the vast majority of these LIHTC properties remain affordable for working families. However, the HUD-commissioned report cautions that once all additional state and local use restrictions expire in the years to come, more than a million units of affordable housing could become market-rate properties that lower income families may no longer be able to afford. “This report is a wakeup call to all of us interested in preserving our nation’s affordable housing,” said HUD Secretary Shaun Donovan. “As LIHTC properties age, especially in high-cost areas with escalating market demand, State Housing Finance Agencies must do everything they can to protect the opportunities for working families to live in neighborhoods they might otherwise not be able to afford.” As time goes on, thousands of properties financed using the LIHTC program are becoming eligible to end the program’s rent and income restrictions, prompting HUD’s Office of Policy Development and Research to commission this study. In the worst-case scenario, more than a million LIHTC units could leave the affordable housing stock by 2020, a potentially serious setback to efforts to provide housing for low-income households. Based on interviews with syndicators, LIHTC property owners, and industry experts, as well as analysis of HUD’s LIHTC database and market research, this worst-case scenario is unlikely. The answer to the question of whether older LIHTC properties continue to provide affordable housing for lowincome renters is a ‘qualified yes.’ Most LIHTC properties remain affordable despite having passed the 15-year use restrictions mandated by the Internal Revenue Service (IRS). In addition to federal affordability requirements, many LIHTC developments, including those placed in service between 1987 and 1994, are subject to other use restrictions that last well beyond Year 15. After Year 15, properties take one of three paths: they remain affordable without recapitalization; they remain affordable with a major new source of subsidy; or they are con-

verted to market-rate housing. Most older LIHTC properties are not at risk of becoming unaffordable, the notable exceptions being properties with for-profit owners in favorable market locations. State Housing Finance Agencies (HFAs) will come under great pressure as the large stock of LIHTC housing ages. Restricted by finite resources, state policymakers are going to have to make choices. HUD’s report recommends that those choices be made on the basis of a set of guiding principles and on careful examination of the housing markets in which

the older LIHTC stock within their state operates. The study’s authors suggest that HFAs should place the highest priority on the developments that are most likely to be repositioned in the market as higherrent housing or conversion to homeownership or another use.

how to make $1 mil ion refinance volume). Diane has an infectious laugh, a charming personality, and a refreshing sense of humor and humility … a true Southern Belle from Dallas, Texas. Diane told me one of her main secrets of success is the team she’s built over the years. Her team includes a transaction coordinator, a processor and a few other folks whose sole purpose is to, “care about my clients with the same level of passion as I have.” In fact, that’s how Diane interviews people for her team. She said, “I’m really in this business to help my clients improve their lives. That’s my number one focus. I know I have a winner when I interview a potential team member who’s willing to learn my system and who has a passion to help others.” When I asked about her system, she didn’t take all the credit. She said, “I sit down with my team every day and go over what’s working and what can be improved. Together, we create new processes and improve old processes that need fixing.” What can we learn from Diane?




 You can’t close $100 million in volume all by yourself and not get burned out.  Leadership is about finding passionate people and developing the right systems in your business … as a team!  It is possible to stay passionate about this industry, even after 20plus years, because it’s about helping people improve their lives. Focus on relationships and delegate everything else to capable people who share your passion That brings us to the next point … Strategy #3: Collaborative relationships I don’t know about you, but I want to make $1 million a year every year, not just once every decade. I recently scanned the list of top producing loan originators in all the major industry magazines and discovered that many of these people are making their record volume through refinances due to low interest rates. This is not sustainable. So I asked Diane Clark why she’s the number four loan originator in the country as ranked by purchase volume. How

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does she maintain that level of sustainability in her business? She said it was due to relationships she’d developed with relocation companies, financial advisors and other strategic partners. “I’ve been in this business for a very long time and I have established relationships,” she said. “Most people don’t need more relationships, they just need to go deeper with the relationships they already have.” But then I wondered, “How can loan originators go deeper with top-producing referral partners who may already have relationships?” So I went back to Ken Deleon and asked him why he doesn’t have his own in-house mortgage company. Then I called the top real estate agent in the Midwest who had his own in-house mortgage company. I asked why he’s not sending clients to his in-house guy and why he’s sending clients elsewhere. They gave me five strategies to go deeper. The most important strategy is to discover the referral partner’s problem: No problem equals no sale. In other words, if you want to go deeper with a referral partner, find out what his/her problems are. Go into his/her world and ask questions. Learn more about what he/she is struggling with right now. Learn about what his/her priorities are. The in-house guys and gals aren’t doing that right now. That’s where you come in. We’ll talk about this some more, and we’ll cover some other strategies in the coming months. For now, start by calling up your top three referral partners and asking them what their number one challenge is right now … that’s the first step to going deeper. So you see, it is possible to make $1 million a year in the mortgage business and have an amazing life outside of work!

nmp news flash

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for inflation and forecasted home value and rental price appreciation. In some metro areas where home values fell dramatically during the housing recession, homebuyers break even after less than two years of owning a home. The Miami-Ft. Lauderdale metro is among the most favorable for buying, with homeowners breaking even after only 1.6 years of living in the home. However, in the San Jose metro, where home values are among the highest in the nation, a buyer must commit to living in their home for 8.3 years before they will break even. However, within metros, there is often a sizeable variance from one community to the next. For example, in Mill Valley, Calif., just north of San Francisco, a homeowner can break even after 8.8 years, while in similarly-priced Menlo Park, south of the city, they must live in the home for 14.1 years. “Across most of the country, historic levels of affordability make buying a home a better decision than ever, especially considering rents have risen more than five percent over the past year,” said Stan Humphries, Zillow chief economist. “This is the first analysis of metros and cities that presents the buy versus rent decision in an intuitive way, by telling consumers how long they must live in the home before buying breaks even with renting financially. It’s much more understandable, and therefore useful, than the abstract notion of a

pursuing excellence

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

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

continued from page 28

thoroughly? In other words, peel back the curtain so there is no mystery. Do you take a complete loan application? Do you set proper expectations? Do you explain potential pitfalls? The customer experiGibran Nicholas is a speaker, trainer ence will not be defined only if it is good, and coach to more than 7,000 of but instead by how you handle the good, America’s top entrepreneurs and trust- the bad and the ugly. ed advisors. He’s the founder, chairman and chief executive officer of 5. Re-evaluate: Without a doubt, this is CMPS Institute and Strategic the Danger Zone. As the loan process Relationship Academy, an elite per- launches into full swing, your customer formance training and coaching pro- will re-evaluate their need for the product gram for top producers. He may be or service and their decision to do business reached by phone at (734) 606-0200, with you. This step is directly linked to your e-mail or performance. Are the expectations being visit fulfilled? Are they being surpassed? Are

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simple ratio of prices to rents. If we want consumers to act on market information, we have to align it with how they think about the issue and make it straight-forward to grasp.” Metros where it takes more than five years to reach the breakeven point accounted for seven percent of the 224 metros covered by the report. The metros with the longest breakeven horizons are San Jose, Calif. (8.3 years); Oak Harbor, Wash. (7.2 years); Santa Cruz, Calif. (7.1 years); San Luis Obispo, Calif. (6.3 years) and Salinas, Calif. (6.3 years). The metros with the shortest breakeven horizon are Memphis, Tenn.; Miami-Ft. Lauderdale, Fla.; Salisbury, Md.; Red Bluff, Calif.; Mobile, Ala.; Tampa, Fla. and Fernley, Nev. (all tied at 1.6 years).

they being unfulfilled? The customer experience is not based solely on how problem free it was but more importantly, when there was a problem, how was it handled. The customer retention seed is planted with the way a product or service is marketed or sold. It becomes rooted by how a customer feels about their experience.

Wrap up strong Pulling the buying process together and validating the customers’ decision is done by linking your performance back to the

driving force(s) you identified in your initial conversations with the borrower. It’s of vital importance that you make this connection for them … they won’t do it for themselves. This is your opportunity to influence the perception of not only your performance, but the entire transaction. By linking your performance to one or more of their driving forces, you create customer loyalty and solidify future referral opportunity. People do not obtain a mortgage solely because of your company name or your reputation. They do not obtain a mortgage solely due to your service. They make their decision based on their need and they make the decision to do business with you because you engaged them on the deepest level possible. When this happens, you psychologically restrict their desire to do business with anyone else, now and in the future. By understanding and using every phase to your advantage, you create the “Customer for Life” mentality. And yes … it really is a science. Casey Cunningham is president of XINNIX, a provider of mortgage sales and leadership development programs. She may be reached by phone at (678) 325-3501 or e-mail

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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

Document Preparation (SaaS)


Sign-on weekly at

Leads TagQuest ................................................................888-817-8980 CUSTOMIZE YOUR CAMPAIGNS! FHA - HARP - VA Leads, Loan Modification, Debt Consolidation, Direct Mail, Data List, Live Transfers, Internet Leads –

Docs on Demand 800-343-7160 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

The Lykken on Lending

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.

Bookmark this! Access these listings online at

Loan Origination Systems

Calyx Software 800-362-2599 Calyx Software, the #1 provider of mortgage solutions is dedicated to offering reliable and affordable software that streamlines, integrates and optimizes the loan process. Find out how PointCentral can streamline your business and create compliant processes today.


Wholesale Lenders


Real Estate Mortgage Network, Inc. 866-933-6342

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

REMN has FHA, USDA, 203k, VA and Conventional solutions to fit the needs of your customers. But, at REMN, our most valuable product is our people. The REMN Sales and Operations Teams give you - and your loans - the time and attention that you deserve. Even better, at REMN, same-day approvals are guaranteed.* You can rely on us to get the little, yet vital, things taken care of on time.

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.

Interested in joining our Wholesale Division? Send your resume to

We are now hiring Account Executives in AL, TN, KY, VA, & MD. Contact Stu Ehrlich in our HR department at for further details. Big Enough to MATTER…Small Enough to CARE

Valuation Services 51

Veros Real Estate Solutions 2333 North Broadway, Suite 350 • Santa Ana, CA 92706 (866) 458-3767 • @verosres (Twitter)

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

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.

United Wholesale Mortgage 800-981-8898


AMX/Land Home Financial ..................800-349-4172

Icon Residential Lenders (888) 247-4207 Icon Residential, a wholly owned subsidiary of Grand Bank N.A., is one of the nation’s leading Conforming, 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

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

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.

Call 516-409-5555, ext. 4 to register your company.


• • • • •

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




calendar OF EVENTS

Calendar of Events, please e-mail the details of your event, along with contact information, to SEPTEMBER 2012 Sunday-Tuesday, September 23-25 2012 Asian Real Estate Association of America (AREAA) National Convention Bellagio Resort 3600 South Las Vegas Boulevard Las Vegas, Nev. For more information, call (760) 918-9162 or visit

Tuesday-Thursday, October 9-11 2012 Northeast Conference of Mortgage Brokers Trump Taj Mahal Casino Resort 1000 Boardwalk Avenue Atlantic City, N.J. For more information, call (732) 596-1619 or visit Monday-Wednesday, October 15-17 2012 National Reverse Mortgage Lenders Association (NRMLA) Annual Meeting & Expo Hyatt Regency Riverwalk 123 Losoya San Antonio, Texas For more information, call (202) 939-1760 or visit

NOVEMBER 2012 Wednesday-Friday, November 7-9 Mortgage Bankers Association (MBA) 2012 Independent Mortgage Bankers Conference The Fairmont Dallas 1717 North Akard Street Dallas, Texas For more information, call (800) 793-6222 or visit Wednesday-Friday, November 14-16 Mortgage Bankers Association (MBA) 2013 Accounting & Financial Management Conference The Westin Gaslamp Quarter 910 Broadway Circle San Diego, Calif. For more information, call (800) 793-6222 or visit DECEMBER 2012 Friday-Monday, December 7-10 NAMB National 2012 MGM Grand 799 South Las Vegas Boulevard Las Vegas, Nev. For more information, call (972) 758-1151 or visit

Tuesday-Friday, February 19-22 Mortgage Bankers Association (MBA) 2013 National Mortgage Servicing Conference & Expo Gaylord Texan Hotel & Convention Center 1501 Gaylord Trail Grapevine, Texas For more information, call (800) 793-6222 or visit

MAY 2013 Sunday-Wednesday, May 5-8 Mortgage Bankers Association (MBA) 2013 National Secondary Market Conference & Expo New York Marriott Marquis 1535 Broadway New York, N.Y. For more information, call (800) 793-6222 or visit

MARCH 2013 Wednesday-Sunday, March 6-10 Mortgage Bankers Association (MBA) 2013 Mid-Winter Housing Finance Conference The Ritz-Carlton Bachelor Gulch 130 Daybreak Ridge Avon, Colo. For more information, call (800) 793-6222 or visit

Sunday-Wednesday, May 19-22 Mortgage Bankers Association (MBA) 2013 Commercial/Multifamily Servicing & Technology Conference Arizona Biltmore 2400 East Missouri Avenue Phoenix, Ariz. For more information, call (800) 793-6222 or visit

Wednesday, March 13 2013 Maryland Association of Mortgage Professionals Annual Conference Maritime Institute 692 Maritime Boulevard Linthicum Heights, Md. For more information, call (410) 752-6262 or visit APRIL 2013 Sunday-Wednesday, April 14-17 2013 National Technology in Mortgage Banking Conference & Expo Westin Diplomat 3555 South Ocean Drive Hollywood, Fla. For more information, call (800) 793-6222 or visit

Sunday-Wednesday, May 19-22 Mortgage Bankers Association (MBA) 2013 Legal Issues/Regulatory Compliance Conference Boca Raton Hotel 501 East Camino Real Boca Raton, Fla. For more information, call (800) 793-6222 or visit







OCTOBER 2012 Friday-Saturday, October 5-6 Arizona Association of Mortgage Professionals 2012 Lenders Fair & Education Event Phoenix Convention Center 100 North Third Street Phoenix, Ariz. For more information, call (623) 972-6180 or visit

Thursday, October 25 Utah Association of Mortgage Professionals 2012 Annual Expo Noah’s 322 West 11000 South South Jordan, Utah For more information, call (801) 597-2122 or visit

Sunday-Wednesday, April 14-17 Mortgage Bankers Association (MBA) 2013 National Fraud Issues Conference Westin Diplomat 3555 South Ocean Drive Hollywood, Fla. For more information, call (800) 793-6222 or visit




Sunday-Tuesday, September 30-October 2 Mortgage Bankers Association (MBA) 2012 Regulatory Compliance Conference Grand Hyatt Washington 1000 H Street Northwest Washington, D.C. For more information, call (800) 793-6222 or visit

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

FEBRUARY 2013 Sunday-Wednesday, February 3-6 2013 CREF/Multifamily Housing Convention & Expo Manchester Grand Hyatt San Diego 1 Market Place San Diego, Calif. For more information, call (800) 793-6222 or visit


To submit your entry for inclusion in the National Mortgage Professional




“The main reason is because ACHL is a growing company and is committed to customer service, which I like."

“I’m very pleased that I chose ACHL. They understand the importance of customer service and a team environment. The underwriting and closing departments are responsive and quick. With our excellent management, HR, and accounting team, we have a family working together for a common goal – to Close More Loans!!”

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Nancy Blankensopp

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Jim Patterson

40 years in business Bessemer, Alabama

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15 years in business Morristown, New Jersey

9 years in business Houston, Texas

“ACHL’s has truly been a wonderful company to join. Response and turn times are great. The communication and access to anyone companywide all the way to the top is almost immediate. You are truly part of a family at ACHL.” -

“After weighing my options I decided to go with America’s Choice Home Loans. The branch compensations is one of the best in the industry. They are committed to providing extraordinary customer service. ACHL will help me grow my branch into a mortgage powerhouse by equipping me with their proven tools and systems.”

“I joined America’s Choice Home loans because I felt like I was joining a family. They just jumped through hoops to get me on board and opened. They give me the tools needed to help me run and grow my business.”

“You know the old saying ‘Your company is only as good as your employees’ Jonny and his team have proven that statement to be true! I’ve had the pleasure to work with Jonny and his team for over 10 years. Once I had the opportunity to move and work with him and his team again I took it! It’s the right move!

Mark Silverberg

Simon Nwoke

Renee Ralls

David Velasquez

23 years in business East Brunswick, New Jersey

17 years in business Macon, Georgia

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15 years in business Virginia Beach, Virginia

Give Jonathan Fowler, Director of National Production of America’s Choice Home Loans a call at


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