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Louisiana Mortgage Lenders Association 2561 CitiPlace Court, Suite 750-177 Baton Rouge, LA 70808 Phone #: (225) 218-9746, ext. 27 v Fax #: (225) 612-6357 Web site: www.

Belinda Janecke Kevin Morgan Lanie Boudreaux Benjamin Leonards Ross Miller Liz Peri

LMLA 2013 BOARD OF GOVERNORS Phone # E-mail President (985) 727-0755 President-Elect (985) 867-8334 Secretary (337) 572-3659 Treasurer (337) 993-5626 Immediate Past President (504) 455-7002 LMLA/LMLF Association Coordinator (225) 590-5722

Van Bush David Talbert Janean Wood Shy Tittlebaum

Governor Governor Governor Governor

(225) 810-3752 (225)490-4997 (337) 408-5103 (225) 810-6085

Terry LeBlanc Jason Dupree Shelley Graham Ross Miller

Legislative Chairman Affiliate Member Representative Affiliate Member Representative NAMB Delegate

(225) 766-1236 (225) 751-9101 (225) 978-3270 (504) 455-7002

• Daily updated mortgage industry news • Industry blogs • Write your own blog

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n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

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n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

table o



Lykken on Leadership: Are You a Peacekeeper or a Peacemaker? By David Lykken


28 Navigating the Origination Obstacle Course: Recruiting Obstacles & More By Robert Ottone


2 0 1 3




Continuing Education Requirements: More Than Compliance … a Path to Success By Barbara Scalera ................................................................54 A Game of Clue: What is Considered “Required” Training by the CFPB? By Ginger Bell ................................56 Better SAFE Than Sorry By Eric Weinstein ..........................60 Live Classes vs. Self-Paced Courses: The Choice is Yours By Jayne Combs ................................61

34 NMP Mortgage Professional of the Month: Kelly Taylor, SVP of StreetLinks Lender Solutions By David J. Coster

Design and Align Compliance Education By Alice Alvey ....62 Mortgage Data Standards Propelling the Need for Education and Certification By Heather Kerns & Matt Seu ..................................................64

FEATURES Today’s Purchase Market: Change on the Horizon By K. Justin Restaino ..............................................................8 The Elite Performer: Purchase Planning By Andy W. Harris, CRMS ........................................................8 Does the Bell Toll for Independent Mortgage Brokers? By Mike Lewis ......................................................10 Fannie Mae/Freddie Mac Announce Policy on Qualified Mortgages By Melanie A. Feliciano Esq. ............16

40 Legends of Lending: GSF Mortgage Corporation By David J. Coster

44 The MiniCorrespondent Channel: Pros and Cons By Jonathan Foxx & Michael G. Barone

ValueNation: Make Your CTO Your Ally By David Rasmussen ............................................................18 A Closer Look at the USDA Rural Loan Pilot Program By Rich Obermeier ................................................................26

V I S I T Company

Web Site


A Page

AllRegs.............................................................. ..........................................................62 American Financial Resources Inc. ...................... ............................Inside Back Cover Appraisal Nation, LLC ........................................ ..............................................3 Brokers Compliance Group.................................. ....................................5 Calyx Software .................................................. ................................................51 CBC National Bank ............................................ ......................................................61 Data Facts ........................................................ ........................................................55 Document Systems, Inc./DocMagic ...................... ......................................................31 First Guaranty Mortgage Corp. ............................ ..............................................33 Florida Capital Bank Mortgage ............................ ..........................................................23 Global DMS........................................................ ......................................................11 GSF Mortgage Corp. ............................................ ..........................................................7 Hometown Lenders ............................................ ..........................................13 HomeBridge ...................................................... ....................................43 IAAMB (Iowa Association of Mortgage Brokers)...... ............................................................53 Loans4Less ........................................................ ......................................................57 Maverick Funding Corp....................................... ............................................27 Maximum Acceleration Coaching ........................ ..................................................45 MBA-NJ/NJAMB .................................................. ..........................................................49

f contents








For Managers Only: Europe Rises From Recession By Dave Hershman ................................................................30 Sales & Marketing Tips for Today’s Mortgage Professional: Cultivating the Fruits of Your Labor By Fred Arnold ....................................................................32 An Uptick in MLO Licensing Activity By Phil Hall ..............36 Marketing Compliance Corner: Social Media By Michael J. Wallace Esq. ......................................................42 Selecting the Right AMC: What Lenders Need to Know By Vladimir Bien-Aime ............................................44 NMP’s Inside Look: TagQuest … An Interview With Caleb Guillory, President ........................................46 Work-Life Balance: Find Your Model Match By Eric Petersen ..................................................................48 Who Has Access to Your Borrower’s Data? By Andrew Liput ..................................................................50 PRIMARQ: Re-Creating the American Dream of Homeownership ............................................50 False Hope for Mortgage Bankers in Appeals Court Win? By Kimberly Priest Johnson ..................................52


A New Day for Reverse Mortgages? By Phil Hall ..............66 Compliance and Marketing 2013 ..................................67


NMP News Flash: September 2013 ..............................12 New to Market................................................................14 Heard on the Street ......................................................22 NMP Resource Registry ................................................70 NMP Calendar of Events ................................................75


Web Site


Menlo Park Funding .......................................... ....................................................15 Mortgage Mapp, Inc. .......................................... ........................................47 NAPMW ............................................................ ..........................................................69 New Penn Financial, LLC .................................... ....................................................30 PB Financial Group Corp..................................... ..............................................64 Quality Mortgage Services .................................. ....................................................60 REMN (Real Estate Mortgage Network) ................ ..............................................17 Ridgewood Savings Bank .................................... ..............................................58 Rushmore Loan Management Services LLC............ ......................................................9 Secure Settlements Inc. ...................................... ..........................................65 Simple Nexus .................................................... ..................................................59 Streetlinks LLC .................................................. ..............................Inside Front Cover TagQuest .......................................................... ........................................................29 The Bond Exchange............................................ ..........................................56 Titan List & Mailing Services, Inc. ........................ ........................................................19 United Northern Mortgage Bankers, Ltd............... ....................................1 United Northern Mortgage Bankers, Ltd............... ..............................................76 United Wholesale Mortgage ................................ ................................................Back Cover Veros ................................................................ ............................................................54

n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013


USA Cares Mortgage Heroes: Angela Jett of Equity Missouri By Joann Muncey ..............74

SEPTEMBER 2013 Volume 5 • Number 9


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

Change for all the right reasons To the successful mortgage professionals who reads our magazine on a regular basis, this issue represents an obvious change. We have made several significant changes to our appearance and our presentation both in our print and online formats. But the changes do not represent “plastic surgery” as part of a vain attempt to keep our looks up to date. Quite the contrary, our changes are a natural evolution for this publication, as we seek to enhance the power of our voice within the mortgage industry. Let me summarize the changes we are making, beginning in this issue:

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

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

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

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

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

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

David J. Coster Senior Editor

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

Phil Hall Senior Editor

New look … The September 2013 edition of National Mortgage Professional Magazine comes with a new look—a crisp, clean, re-designed front cover graphic accompanied by a 100 percent glossy magazine. We have adopted a new, brighter, higher contrast, more modern logo that clearly signals that our magazine remains committed to being on the cutting edge of mortgage industry trade publications. No more dirty fingers … For the past 20 years, our team has been delivering targeted industry insights to you in a newsprint format. This format allowed us to be fast and deliver to the highest number of industry stakeholders. However, we’ve been waiting for the day when we can still deliver you a slick magazine, while keeping production time down … and now that day has come! New tagline … We are making a subtle, yet meaningful change to our tagline which appears below our title. We are replacing, “Your source for the latest on originations, settlement and servicing;” with “The source for top originators.” The reason behind this change is simple. While we will continue to cover important developments as it relates to settlement and servicing, everything in the mortgage industry begins with origination. We intend to remain the preferred source of information for mortgage originators and an advocate of mortgage originators. We will highlight excellence and best business practices, and provide a voice for those who wish to be heard. Our re-focus on the future will be to support the loan originators whose contributions to the mortgage profession allow for the success of those in settlement and servicing. We are proud to emblazon that in the new look on the cover of the September 2013 edition, National Mortgage Professional Magazine—“The Source for Top Loan Originators.” This is just the visual outgrowth of a re-focus for the benefit of our dedicated readership. As we move forward, we want to increase the relevancy of our content to help you navigate daily through the myriad of product, technology, regulatory and legislative issues facing the mortgage professional. Our mission is simple and continues to be to deliver high-value content, deliver that content sharply and to be your trusted source to help you make your decisions. Moving forward, look to our pages to include frequent quotes and commentary on the impact of the stories we are reporting on. The mortgage industry has changed quite a bit over the past few years, and, like any other industry, it will continue to change. We will provide clear and concise content to give you a snapshot of this ever-changing industry in our print magazine, e-editions, Web site, NMP Daily e-mail newsletter and NMP Ticker e-mails to keep you informed. We’ve also conducted numerous focus groups over the past few months and the outcome of them has been a resounding realization that National Mortgage Professional Magazine has been—and continues to be—the source and voice of loan originators in the mortgage banking and mortgage broker communities, whether they are primarily focused on retail, wholesale, branch or mini-correspondent. We thank our loyal subscribers and advertisers for your past support, and we pledge to continue to pursue change only for all the right reasons—when it benefits you . Until next month …

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

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.

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


publisher’s desk

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

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


EDITORIAL CONTRIBUTORS Featured Editorial Contributors Fred Arnold, CMC

Andy W. Harris, CRMS

Jayne Combs

Andrew Liput

K. Justin Restaino

Dave Hershman

By Melanie A. Feliciano Esq.

Joann Muncey

Matt Seu

David Lykken

Joy K. Gilpin

Rich Obermeier

Barbara Scalera

Heather Kerns

Robert Ottone

Michael J. Wallace Esq.

Jean LeBlanc

Eric Petersen

Eric Weinstein

Mike Lewis

David Rasmussen

Michael G. Barone

David J. Coster

Jonathan Foxx

Editorial Contributors Alice Alvey

Donald J. Frommeyer, CRMS

Ginger Bell

Phil Hall

Vladimir Bien-Aime’


n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

NAMB—The Association of Mortgage Professionals

National Association of Professional Mortgage Women

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

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

NAMB 2013-2014 Board of Directors

2013-2014 NAPMW National Board of Directors and Administration

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

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


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


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

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

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

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

Maureen Devine Vice President (413) 736-4511

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

Secretary Cynthia Nutter (360) 449-6408

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

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

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

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

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

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

Itâ&#x20AC;&#x2122;s All We Do!


n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

Today’s Purchase Market: Change on the Horizon By K. Justin Restaino It’s becoming more evident that change is coming to the mortgage industry. The record low rates are coming to an end, and lenders will soon see, if they aren’t already, an industry-wide shift away from a refinancing market to a purchase-driven market. With these changes, a trend is emerging on the lender side of business. High-quality loan officers are moving from large banking institutions to smaller and livelier mortgage banks. Why the shift? These smaller banks are better able to service their clients and referral partners. With the current rise in mortgage rates, applications for refinancing will see a big decrease. According to the Mortgage Bankers Association (MBA), they predict that rates for the 30-year fixed loan will reach 4.4 percent by the end of this year. By the fourth quarter, the MBA predicts the refinancing share will only account for 40 percent of home mortgage application volume. At the same time, they expect purchase originations to increase this year by 16.8 percent and 20.5 percent next year. As originations change, loan officers will need to adjust to these new dynamics. Refinancing is very different from purchasing. It requires communication, trust and speed. Needs are demanded every day by clients, and loan officers must be in an environment that provides the resources to meet these needs in a timely manner. Below are some tips to remember when writing the copy for your purchase direct mail marketing. If you cannot engage your reader, you won’t see the return you are anticipating.

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


1. Keep it short and sweet. Long messaging discourages people from investing their time in your direct mail piece. If you keep your message brief and to the point, your reader can quickly determine the importance of your message and choose to read further or take action 2. Use acronyms and short forms sparingly, if at all. Most industries, especially the mortgage industry, are filled with daily uses of acronyms or short forms, such as Ginnie Mae, ARMS, MBS. Unless you know for certain that your reader understands these terms in their abbreviated form, it’s always best and safe to spell everything out or provide the complete definition of the term. 3. Create a personal tone. Your direct mail piece may be sent out to hundreds of people at a time, but your message should be created as if you are only writing to one person. Determine the best “voice” to fit your audience. Is it formal? Friendly? Funny? Etc. 4. Cross your T’s and dot your I’s. It may seem like an obvious step, but it’s critical to check your spelling and grammar in all content that is sent out. Readers will be turned off if they feel you didn’t put the effort into making your direct mail a worthwhile piece for their time. Having multiple people review the content will help prevent these errors. Overall, this shift for loan officers will have a positive effect on consumers. Officers will be better equipped to provide service and speed to close these loans, which is critical to all parties involved. K. Justin Restaino is vice president of Titan List & Mailing Services Inc. For more than 13 years, he has led Titan’s Mortgage Division, helping lenders of all capacities grow their businesses utilizing targeted direct mail. With a specialized focus in refinance and purchase markets, Restaino has the insight for proper data and mail application for success. He may be reached by phone at (800) 544-8060, ext. 204 or e-mail


elite performer Purchase Planning By Andy W. Harris, CRMS

If you’ve been vacationing this summer, you may have noticed when you returned to the office that rates have risen considerably. You might have also noticed that applications have fallen for the 10th time in the last 11 weeks and are down 64 percent since May of this year. So what does all this mean for your business? Well, that completely depends on you. During these peaks and valleys in our industry, it is always important to realize that the numbers will always change and the overall media will reflect this. Layoffs and mergers will happen and adaptation will occur. The most important thing you can pay attention to is YOUR business and not others. While applications are down and interest rates are up, your pipeline does not have to suffer over these national numbers and averages, unless of course you feel that you are average. If you have not noticed, licensed mortgage loan originator numbers are down historically and home sales are up. You might also notice monthly data in your area on how many homes have sold and the potential for you to capture more market share. The business is out there, but you have to be confident that you are great at what you do. Here are a few simple ways you can prepare and focus on this purchase market: l Don’t market or target refinances. Let’s face it, a few refinances may trickle in, but we’re in a purchase market and your pipeline should reflect primarily all homebuyers. Take the refinances as they come, but don’t waste your time and effort trying to pluck the hairs off a bald man. l Spread your positive reputation. Create strategies and unique ideas to capture more market share and referral business. Build your online and offline presence and focus on your brand and reputation through client promotion and testimonials. Document all professional sources of referrals and where more diversity needs to be created and what sections need more focus for volume should they be lacking. l Never stop learning. Read every day. Listen every day. Never stop learning, thinking and creating. Be open-minded and work with others who motivate and inspire you through positivity and support. A good idea can result in excitement, but the action can produce a fortune. l Only work with good people. Don’t waste your time chasing bad real estate agents and only work with an agent you would refer. Build relationships and trust for referrals and a positive outcome for your client. Avoid any joint ventures or unethical nonsense, and remember that you only work for the consumer’s interests. It’s a good idea also to pull an agent’s production over the last 12 months by requesting it from your local title company. This will put how active they are into perspective and will help you better figure out just where to invest your time. l As always, monitor your finances. Plan for the worst and expect the best. Always strive to have liquid reserves and savings of at least six months’ living expenses at all times to deal with any unforeseen volatility in volume. Remain as liquid as possible and pay cash for everything other than real estate for housing or investment if applicable. Don’t allow debt to result in poor short-term career decisions. Homebuyers are all around you … get out there and get focused!


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

– Abraham Lincoln


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

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

n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

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


Does the Bell Toll for Independent Mortgage Brokers?

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


By Mike Lewis To paraphrase John Donne’s famous line, “Don’t ask whether you will be affected by the ongoing changes in the mortgage market—you will be.” The recovering but still nascent U.S. economy, the assault upon former industry practices and the uncertainty of the government’s future role in residential housing will severely challenge the capability of large wholesale correspondent lenders to adapt to the new market conditions. According to the Mortgage Bankers Association’s (MBA) 2012 year-end forecast, overall mortgage volume is expected to drop from $1.7 trillion to $1.08 trillion in 2014. In addition, the ratio of refinance to purchase mortgages will essentially flip-flop, as refis decrease from 71 percent to less than 35 percent of total new mortgages in 2014. Since the bulk of refinancing occurs in the Big Four (Wells Fargo, Citibank, JPMorgan Chase, and Bank of America), they will be hurt to a greater degree by the product shift than their smaller competitors. In fact, the lower volume and the fundamental structural change provide extraordinary opportunities for independent local and regional mortgage competitors to prosper.

Pressures on the Big Four According to a 2012 study by Harvard Business School professors Robin Greenwood and David Sharfstein, the growth of residential mortgages from

“…small, locally-owned businesses are preferred almost universally by consumers to large, national entities.”

34 percent of the gross domestic product (GDP) in 1980 to 79 percent of GDP in 2007 was spurred by the tremendous profits in the financial industry from fees, as well as the growth of a “shadow banking” system with loose or non-existent regulations. The subsequent failure of the subprime mortgage market and resulting loss of confidence in the larger financial entities to self-regulate have had several results: l A slow-recovering U.S. economy: In its Feb. 5, 2013 report, the Congressional Budget Office (CBO) projected slow growth (1.4 percent) in GDP through 2013, strengthening to an average of 3.5% from 2014 and 2018, and falling back to 2.25 percent from 2019 to 2023. Housing starts (914,000 last month) remain considerably below their peak in January 2006 (2.27 million), and per capita personal income has been stagnant for almost a decade ($42,524 in 2006 versus $42,693 in 2012). l The imposition of Consumer Financial Protection Bureau (CFPB)

regulations: The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) created the CFPB in 2011 and new qualified mortgage (QM) and qualified residential mortgage (QRM) rules. According to the CoreLogic MarketPulse February report, only about one-quarter of purchase originations would meet the QM and QRM requirements if not for a temporary exclusion (up to seven years) of loans that otherwise meet GSE and FHA underwriting requirements. l Growing pressure to reduce federal government guarantees: The Senate has introduced the Jumpstart GSE Reform Act, while the Financial Services Committee of the U.S. House of Representatives introduced its version, the Protecting American Taxpayers and Homeowners Act (PATH Act). The MBA has also proposed its own version of reform. While there is yet to be a consensus on the role federal government will play in housing finance, it is likely that federal government guarantees will be substantially reduced.

The Big Four, originating two-thirds of mortgages nationally, have billions of dollars in fixed costs for extensive correspondent networks, thousands of employees, and an elaborate, multitiered management system, as well as continuing financial obligations related to cleaning up old loans from the early period of excess. In periods of high volume, these costs can be leveraged over huge numbers of mortgages. But as total production drops, those assets become liabilities, reducing earnings and provoking shareholder unrest. These are very visible public companies with demanding shareholders who scrutinize each quarter’s return. It is unlikely that shareholders will have the stomach to continue to feed an infrastructure built to serve a market that may be a decade or more from returning to its former size. And though the large national mortgage brokers and banks are already engaged in programs to rapidly reduce costs and cut staff to minimize losses, it is also unlikely that they will be able to downsize as quickly as the market is contracting, thereby providing an opportunity for fasterreacting, smaller competitors.

The opportunity for independent mortgage brokers A local or regional mortgage broker is ideally positioned to move into the void left by the retrenching big boys if that broker exploits his or her natural advantages of speed and flexibility. Moreover, the downturn in the industry

means that industry suppliers of technology will be more willing to negotiate prices for heretofore unaffordable software programs to boost efficiency, improve customer service, and expand market reach. While larger competitors are laying off employees, closing offices and slashing marketing budgets in efforts to satisfy public shareholders, the dinosaurs of the industry are focusing on how to roll back change to return to the status quo, even as they struggle to adapt to new rules and the changing climate.

the elements of a value proposition to a potential buyer. The brand conveys a marketing message, literally and subliminally, to viewers, and should be consistent in every detail and channel where it appears. The name and logo of your organization, the pictures and copy of your advertising and marketing materials, and the location of your office—as well as the appearance, demeanor, and attitude of your employees—should be scrutinized to ensure conformity with the image you seek to present. According to a May 2013 poll by the Institute of Politics at Harvard, Wall Street was considered less trustworthy than almost every federal and state gov-

ernment, surpassing only the media. Bankers consistently rate below average in trustworthiness and likeability among professions. On the other hand, small, locallyowned businesses are preferred almost universally by consumers to large, national entities. Your message should emphasize your local or regional roots—a down-home, friendly neighborhood business—versus the remote, cold, bureaucratic image of the national mortgage bankers.

tunity to grab significant market share from bigger competitors is unprecedented—the attention of the behemoths focused on Washington and survival, the availability of revolutionary technology at reasonable prices, and the access to multiple marketing channels at low cost are unlikely to repeated when the market stabilizes. The future of the mortgage business is being written today, and regional and local mortgage brokers will be its authors. Now is your time to act.

Final thoughts

Mike Lewis is a retired business executive and personal finance columnist. He may be reached by e-mail at

The competitive environment of the mortgage banking industry has been turned on its head. The present oppor-

Institute a customerfocused strategy

Create a reliable brand emphasizing a local or regional presence Despite the overuse of the term, the importance of “branding” cannot be overlooked. A successful brand strategy communicates instantly and viscerally

n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

l Elimination: Stop doing unnecessary tasks that add costs, but do not add value to the customer. l Automation: Much of the form-filling, filing, printing and copying tasks accompanying a mortgage submittal, approval, closing and funding has been automated in recent years. Look for and invest in affordable software that eliminates mistakes, improves communication, and cut costs. l Upgrading: Prioritize, reorganize, and combine tasks that cannot be eliminated or automated. Upgrade your personnel, selecting the best of the thousands who will be released by the big national firms. Invest in training, and incentivize your staff by spreading the wealth.


To capitalize on the opportunity at hand, it is essential to understand your value proposition—in other words, why should a customer buy from you versus your competitor? In most cases, the rates and the mortgage terms you offer are similar, if not identical, to your competitor. As a consequence, you must make the process more convenient, fast, and understandable, and easier for the customer to complete without having to charge a premium for your enhanced value. Breaking down the mortgage process into its various elements— understanding who is responsible, what the desired outcome is, and how the work is performed—will allow to you to improve each element and the process as a whole in the following ways:


SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


GSF Mortgage has been named a “Platinum Million Dollar Lender” by the United States Department of Agriculture for the second consecutive year. This certification is awarded to organizations that utilized over $5 million in Guaranteed Rural Housing (GRH) Loan Funds for home purchases in 2012. According to the USDA, more than $414 million in GRH funding was delivered to homeowners, which resulted in over 3,388 home purchases. GSF Mortgage utilized over $5 million in GRH Loan Funds to make this possible, which helped many rural residents improve their quality of life and strengthen America’s rural economy.

CFPB Releases Second Update to Mortgage Regulation Exam Procedures The Consumer Financial Protection Bureau (CFPB) has released a second update to its exam procedures in connection with the new mortgage regulations issued in January 2013. The interim exam procedures offer valuable guidance to financial institutions and mortgage companies on what the CFPB will be looking for as the rules become effective. “We are committed to transparency around our examination process,” said CFPB Director Richard Cordray. “So we have worked hard to provide industry with advance notice of what we will be expecting. That, in turn, will improve compliance and benefit consumers.” The CFPB issued several new regulations reforming the mortgage market in January 2013. Many of the new rules were directed by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. The rules cover the various stages of a consumer’s mortgage experience, from shopping for a loan to paying it off. Most of the CFPB’s new rules go into effect in January 2014.

These updates cover the Ability-toRepay/Qualified Mortgages, high-cost mortgages, and appraisals for higherpriced mortgage loans, as well as new amendments related to the escrows rule. The updates also cover recent changes to credit card rules. With this release, the exam procedures now cover the Bureau’s mortgage origination rules issued through May 29, 2013, and mortgage servicing rules issued through July 10, 2013. The CFPB is sharing with the industry what it will be looking for in its examinations under the new rules by updating the applicable sections of the exam procedure manuals for the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). These documents are intended for use by CFPB examiners in examining the mortgage companies and other financial institutions subject to the new regulations.

Q2 Commercial/Multifamily Volume Up 36 Percent Over Q1 Commercial and multifamily mortgage origination volume during the second quarter of 2013 were seven percent higher than during the second quarter of 2012 and 36 percent higher than during the first quarter of 2013, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/ Multifamily Mortgage Bankers Originations. “Commercial and multifamily mortgage lending and borrowing continued to grow during the second quarter,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “The apartment market continues to be the belle of the ball, with multifamily mortgage originations running 31 percent ahead of last year’s first half total. And after a slow start to the year, lending by life insurance companies surged in the second quarter to record the highest quarterly volume on record for that sector.” The seven percent overall increase in commercial/multifamily lending volume, when compared to the second quarter of

2012, was driven by the increase in originations for multifamily properties. The increase included a 31 percent increase in the dollar volume of loans for multifamily properties, a three percent increase for hotel properties, a 14 percent decrease for retail properties, a 36 percent decrease for health care properties, and office and industrial properties remained unchanged when compared to the second quarter of 2012. Among investor types, the dollar volume of loans originated for life insurance companies increased by 16 percent from last year’s second quarter. There was a 13 percent increase for commercial bank portfolio loans, an eight percent increase for government-sponsored enterprise loans, and a 14 percent decrease in dollar volume of loans originated for conduits for CMBS. Second quarter 2013 commercial and multifamily mortgage originations were 36 percent higher than originations in the first quarter. Compared to the first quarter, second quarter 2013 originations for hotel properties saw an 89 percent increase. There was a 75 percent increase for office properties, a 48 percent increase for retail properties, a 44 percent increase for industrial properties, a 22 percent increase for multifamily properties, and health care properties were unchanged from first to second quarter 2013. Among investor types, between the first and second quarters of 2013, loans for life insurance companies saw an increase in dollar volume of 100 percent, loans for conduits for CMBS saw an increase in loan volume of 27 percent, originations for commercial bank portfolios increased 14 percent and loans for GSEs increased by two percent. Year-to-date (through the second quarter) 2013 commercial and multifamily mortgage originations were eight percent higher than originations during the same time period of 2012. Compared to 2012, year-to-date originations for multifamily properties saw a 31 percent increase. There was a 13 percent increase for hotel properties, a one percent increase for industrial properties, a two percent

decrease for office properties, a 19 percent decrease for retail properties and a 27 percent decrease for health care properties. Among investor types, year-to-date (through the second quarter) 2013 versus the same time period in 2012, loans for conduits for CMBS saw an increase in loan volume of 22 percent, loans for GSEs saw an increase in loan volume of 20 percent, originations for commercial bank portfolios increased 11 percent and loans for life insurance companies were even year-todate 2013 versus year-to-date 2012.

Despite Sluggish Economy, Construction Starts Forecast to Grow Six Percent New construction starts are forecast to rise six percent this year to $506 billion, according to the Midyear Update to the 2013 Construction Outlook from McGraw Hill Construction, a division of McGraw Hill Financial. This is the same rate of increase for total construction starts that was predicted last October, and follows the eight percent gain that took place in 2012. “The recovery for construction continues to unfold in a selective manner, proceeding against the backdrop of the sluggish U.S. economy,” said Robert A. Murray, vice president of economic affairs for McGraw Hill Construction. “While the degree of uncertainty affecting the economy seems to have eased a bit from last year, tight government financing continues to exert a dampening effect on both the economy and the construction industry. On the positive side for construction, the demand for housing remains strong, market fundamentals for commercial building are strengthening, and lending standards for commercial real estate loans continue to ease gradually. On balance, the recovery for construction is making progress, but at a single-digit pace given the mix of pluses and minuses by major sector.” Single family housing will advance 28 percent in dollars, corresponding to a 24 percent increase in the number of dwelling units to 640,000 (McGraw Hill Construction

continued on page 16


n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

Carrington Broadens Its Government Loan Options Via New USDA Loan Offerings

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


Carrington Mortgage Services LLC announced that it has broadened its portfolio of government loan programs by offering USDA loans through its retail and wholesale lending operations. Requiring low—and in some cases no downpayment or cash reserve, Carrington’s USDA loan program complements the company’s existing range of government products designed to increase the borrowing potential of real estate consumers, offering them, the agents and the brokers who serve them a competitive advantage in today’s real estate market. With a USDA loan through Carrington, eligible borrowers can obtain up to 100 percent financing on a home’s appraised value. Purchase, Rate/Term Refinance and Streamline Refinance options are available to borrowers with a debt-toincome ratio of 29/41 and a minimum FICO score of 580 (other restrictions may apply). “Carrington is deeply committed to providing a wide range of products that meet the individual needs of borrowers – and that give the real estate professionals and brokers who serve them the confidence to close transactions,” said Ray Brousseau, executive vice president of Carrington Mortgage Services LLC’s Mortgage Lending Division. “By adding USDA loans to our government-based portfolio, we’re providing consumers with an additional lending option that can make purchasing or refinancing a property more accessible.”

Advantage Systems Releases Web-Based Version of Workflow Management Product Advantage Systems has announced that it has released a Web-based version of its ApprovalSoft imaging, workflow and approval management software. Users can access the application from desktops, tablets and smartphones and it automatically adjusts to fit the screen of any device for consistent viewing.

ApprovalSoft enables users to take a picture of supporting financial documents, such as receipts for meals, using the camera from a smartphone or tablet and eliminates the time and cost of sending documents to corporate offices by regular mail or e-mail. Users can access ApprovalSoft from any location with an Internet connection. ApprovalSoft requires no configuration on the user’s device, just launch the app and log in. The technology makes the process of recording accounting transactions as easy as possible. In addition to handling vendor invoices, ApprovalSoft was designed to handle all accounting transactions, including journal entries. “Our clients are being audited more now than ever,” said Brian Lynch, president of Advantage Systems. ”They need an efficient way to manage the approval process in a system that allows them to demonstrate that they have control over their accounting transactions.”

NOVO Appraisal Management Releases Tool to Streamline Appraisal Process NOVO Appraisal Management has unveiled a new proprietary Automated Appraisal Underwriting (AAU) tool that can significantly cut the time needed to review appraisals. The AAU makes it possible to identify problems and deficiencies in the processing of an appraisal on the front end where they can be addressed and cleared promptly. NOVO’s Automated Appraisal Underwriting (AAU) uses algorithms, an automated rules-based engine, and underwriting logic to highlight areas that may be of concern to a lender. The underwriter simply has to focus on problem areas rather than having to review the entire appraisal. This provides a first-level comprehensive review of the appraisal allowing the underwriter to have plenty of time to clear all issues prior to funding. The release of the new AAU tool is timely given the lender’s need to gain efficiency while still limiting their exposure to risk. Tom Hutchens, president of NOVO, said, “The AAU tool simply makes everyone

involved in the appraisal process more efficient and the lender more confident in their collateral decisions. We expect this tool to dramatically increase the ability of our clients to close loans.”

Equifax Announces New AVM Offering Equifax has announced the availability of its Collateral Value Connector, an automated valuation model (AVM) cascade that rank orders the industry’s leading AVMs by accuracy to provide lenders a precise collateral valuation that can be depended on. In an effort to provide the lending community with a truly transparent and documented approach to AVM testing and facilitate compliance with federal regulatory guidelines, Equifax has partnered with Southwest Financial Services Ltd. to independently test and validate the AVMs that are available via the Collateral Value Connector. As a national provider of appraisal management, title, flood zone determination and valuation services, Southwest Financial Services is qualified to independently test and make sound recommendations as it relates to which AVM(s) a lender should consider using given the geographic location of an asset. Through exhaustive testing that takes place on a weekly basis, Southwest Financial Services is able to measure the performance of the models that are available via the Collateral Value Connector and rank them at the county-level according to their respective accuracy rates to ensure delivery of the most accurate collateral valuation possible. In previous years, loose AVM testing standards led to the use of inaccurate and unsupported collateral valuations, which in turn increased fraud, repurchase, and reputational risk for lenders. However, today’s strict Interagency Appraisal and Evaluation Guidelines mandate comprehensive testing policies for lenders to justify the use of an AVM according to how it has performed in a given subject property’s geographic area. “With today’s low rates and increasing home values in the vast majority of areas

in the US, homeowners are returning to leverage the equity in their home as a flexible source of credit,” said Craig Crabtree, senior vice president Equifax Mortgage Services. “For lenders, the need for valuation accuracy and transparency is more important than ever. Through Southwest Financial Services’ independent and comprehensive testing criteria, the Equifax Collateral Value Connector exceeds the standard automated valuation model to deliver an unparalleled level of accuracy, coverage and documentation that lenders can rely on to effectively manage their collateral risk and meet regulatory compliance demands.”

CoreLogic Launches PoolTrack Service for BPOs and New Mobile MLS App CoreLogic has announced that it is adding a new online pool tracking service to all of its data validated broker price opinions (BPOs), providing up-to-the-minute status, broader access and transparency for capital markets and servicing clients. Clients will now be able to view the status of all of their BPO orders as well as digital versions of completed BPOs and billing information via a secure, pool-driven Web site known as PoolTrack. At a client’s discretion, buyers, sellers and due diligence providers may also be granted limited access to BPOs that are offered as part of pool or portfolio transactions. “We are committed to enhancing both the quality of our data validated valuation products and how they are delivered, shared and consumed,” said Dave Williams, vice president of broker price opinion services for CoreLogic. “PoolTrack utilizes technology to help users monitor the progress of their orders at a trade or pool-level and potentially give investors and diligence providers faster, self-administered access to this information.” CoreLogic has also announced the launch of GoMLS 2.0, a mobile productivity application for multiple listing service (MLS) providers. Compatible with any MLS system, GoMLS gives real estate professionals access to in-depth listing and property data from their Apple iPhone, iPad and Google Android devices, plus the ability to extend mobile search functionality to their home buying and selling clients. GoMLS 2.0 introduces a new feature called Home

Assist that allows real estate agents and consumers to collaborate remotely on the home search process using their mobile devices. Using GoMLS with Home Assist, real estate agents can chat and share listings with clients in a running thread, making it easy to see their favorite homes, notes and new search activity. Agents can use e-mail, text messaging, Facebook or Twitter to invite their clients to download an agentbranded consumer version of the app that lets them stay in touch while searching for properties. GoMLS’ deep MLS integration provides agents with access to real-time MLS data, agent-only listing information, MLS saved searches and contacts, listing edit capabilities and optional Realist property information.

have been answered in this major release. Corporate marketing administrators and loan officers are now able to create fullybranded and compliant automated marketing campaigns for each element of the retail mortgage sales process.” CustomerManager 5.0 builds on the existing solution with multiple enhancements, including: New user interface for easier navigation and system-wide efficiencies; site ‘skinning’ with company logo for seamless corporate branding; feed delivery and list upload support for corporate-wide lead distribution (or placement within individual loan officer’s prospect database); custom Lead Status definition (per lead type) and ability to attach phone scripts and documentation for specific lead sources; easy lead disposition from home

page and contact records; integrated Lead Lifecycle & Calendar Functionality summarizing loan officers’ opportunities, tasks and responsibilities; expanded contact record fields for prospects, customers, and partners; lead group creation and automation for inbound leads with a variety of assignment options; and automated marketing programs within overall lead management process (consisting of e-mail and direct mail communications). Leads can be manually entered into the system by a corporate administrator and distributed across the enterprise – or fed into the system for specific groups, users or via round-robin assignment. Automated marketing programs can also be deployed based on lead type or the stage of the leads in the sales process. When leads are

entered into the system, entries are automatically created in each loan officer’s calendar to remind them of specific obligations and deadlines.

New Churchill Mortgage Offering Promises Expedited Closing Times Churchill Mortgage has announced its “Purchase Guaranteed Close” program, promising qualified borrowers a timely closing of loans. According to Ellie Mae’s latest Origination Insight Report, the avercontinued on page 74

National MI Integrates With LoanServ


In the Nation! 15

For Branch opportunities call 877.896.8496

LoyaltyExpress has released the fifth generation of its CRM platform– CustomerManager. CustomerManager, a software-as-a-service (SaaS) platform. The version 5.0 release includes a robust user interface enhancement and extensive lead management capabilities to fully support the ‘pre-to post-closing’ mortgage sales cycle. “CustomerManager continuously exceeds client expectations based on world-class functionality and stability,” said Jeff Doyle, chief executive officer, LoyaltyExpress. “Ever-rigorous demands for lead management with extensive direct mail and email marketing integration Real Estate Mortgage Network Inc, DBA Menlo Park Funding. 499 Thornall Street 2nd Floor, Edison, NJ 08837. NMLS# 6521

n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

LoyaltyExpress Releases Latest CRM Platform

National MI has successfully completed systems integration with LoanServ from Fiserv, a technology platform that performs mortgage servicing functions, including insurance coverage activation, billing transactions and certificate administration for lenders, banks, aggregators and credit unions. The integration with LoanServ streamlines data transfers and is expected to increase efficiencies for National MI’s lender customers that use the Fiserv solution. “Our integration with LoanServ from Fiserv will enable National MI to support many of our customers’ servicing needs by making the process more convenient and straight-forward,” said Pete Pannes, chief sales officer at National MI. LoanServ automates all loan servicing processes, including integrated default management and collections, cashiering, escrow and investor accounting for both closed-end and revolving loans. With LoanServ, data transactions are available online in real-time to ease compliance risk and eliminate the limitations associated with an end-of-day batch processing cycle. National MI began writing mortgage insurance in April of this year. Both Fannie Mae and Freddie Mac approved National MI as a qualified mortgage insurer in January of 2013.

Fannie Mae/Freddie Mac Announce Policy on Qualified Mortgages By Melanie A. Feliciano Esq. On May 6, 2013, Fannie Mae and Freddie Mac (the GSEs) each announced their policies with respect to the effect of the Ability-to-Repay/Qualified Mortgage Rule on mortgages that are eligible for sale to each one of the GSEs (see Fannie Mae Lender Letter LL-2013-05; Freddie Mac Industry Letter, dated May 6, 2013). Both GSEs indicated in their respective announcements that their future purchase of loans would be limited to loans that are: 1. Qualified mortgages under the Ability-to-Repay Rule (Rule), including those meeting the special or temporary qualified mortgage requirements under the Rule; or 2. Exempt from the ability-to-repay requirements, such as investor transactions. Accordingly, effective for mortgages subject to the ability-to-repay requirements under the Rule with application dates on or after Jan. 10, 2014, the GSEs will not purchase loans: l That are not fully amortizing (e.g., no negative amortization or interest-only loans); l With terms in excess of 30 years (e.g., no 40-year terms); or l With points and fees in excess of three percent of the total loan amount or such other limits for low balance loans, as set forth in the Rule.

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On Aug. 20, 2013, pursuant to Fannie Mae Selling Guide Announcement SEL-2013-06 and Freddie Mac Bulletin 2013-16, the GSEs announced their additional policies and requirements based on the Rule, including those relating to, among other things: l Retiring mortgages with original maturities in excess of 30 years; l Retiring mortgages with prepayment penalties; l Introducing new points and fees thresholds of three percent for those mortgages covered by the Rule; l Updating requirements for Higher-Priced Mortgage Loans (HPMLs) for the following mortgages: n ARMs with initial periods of seven or 10 years n Fannie Mae Refi Plus loans and Freddie Mac Relief Refinance Mortgages These policies and requirements are effective for mortgage loans with application dates on or after Jan. 10, 2014 (see Fannie Mae Lender Letter LL-2013-06; Freddie Mac Industry Letter, dated July 2, 2013). Please refer to the above-referenced Fannie Mae and Freddie Mac’s Bulletins and Letters for specific details. Melanie A. Feliciano Esq. is DocMagic Inc.’s chief legal officer and currently serves as editor-in-chief of DocMagic’s electronic compliance newsletter, The Compliance Wizard. She received her JD from the Georgetown University Law Center, and is licensed in California and Texas. She may be reached by phone at (800) 649-1362 or e-mail


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Dodge basis). The inventory of new homes for sale is currently very low, which should spur more construction, and home prices are heading upward. The recent increase in mortgage rates has raised concern, but rates remain near historic lows and have not significantly affected affordability for most potential homebuyers. Multifamily housing will climb 23 percent in dollars and 20 percent in units, helped by the gains reported for occupancies and rents over the past year. Major metropolitan areas such as New York continue to see groundbreaking for large apartment projects, along with the reemergence of large condominium projects. Commercial building will grow 15 percent, after the 11 percent increase reported for 2012, although this year’s level of activity in dollar terms will still be 39 percent less than what was reported during the 2007 peak year. The pace of store construction is picking up, joining earlier gains registered by warehouses and hotels. The increase for office construction will remain relatively subdued in 2013, as more privately financed office projects are countered by fewer government office buildings.

exclusively from independent mortgage bankers. Overall production among independent mortgage bankers increased 11 percent from the first to the second quarter of 2013. Among this quarter’s findings are: l Profitability rose among independent mortgage bankers. Net income margins increased from the first to the second quarter of 2013. l Net worth for independent mortgage bankers continues to climb, and increased roughly 20 percent during the second quarter of 2013. This is a continuing trend with capital increasing approximately 34 percent from the year ending Dec. 31, 2012. l Commissions have been on the decline since their four-month high in the fourth quarter of 2012, when they reached approximately 82 basis points. They averaged roughly 78 basis points in the second quarter of 2013, with four-month average commissions at approximately 80 basis points of total production. “Independent mortgage bankers face different business challenges than the big banks do, particularly when it comes to profitability and fiscal spending,” said Ken FHFA Seeking Public Richey, managing partner of Richey May. “There are a lot of otherwise healthy comInput on GSEs The Federal Housing panies that are suffering undetected losses Finance Agency (FHFA) and missed revenue opportunities.” is seeking public input on strategies for reduc- Mortgage Fraud Declines ing Fannie Mae and 25 Percent Year-Over-Year Freddie Mac’s presence The Financial in the multifamily housing finance market Crimes Enforcein 2014. In keeping with the goal of conment Network tracting the market presence of Fannie Mae (FinCEN) has reand Freddie Mac while simplifying and leased an analysis shrinking their operations, FHFA’s 2013 of Mortgage Fraud SAR Filings in calendar Conservatorship Scorecard included reduc- year 2012. FinCEN’s data on suspected ing their volume of new multifamily busi- mortgage fraud shows that reports ness by 10 percent relative to 2012. FHFA declined 25 percent in 2012 (from 92,561 expects this reduction to be achieved this to 69,277) as compared to the previous year through a combination of increased year. The past three years of suspected pricing, more limited product offerings and mortgage fraud suspicious activity reports stronger underwriting standards. (SARs), if counted by the date they were FHFA is now evaluating alternatives for received by FinCEN, accounted for approxireducing Fannie Mae and Freddie Mac’s mately 46 percent of the past decade’s multifamily businesses in 2014 and is seek- mortgage fraud SARs. However, suspicious ing public input on the potential market activity is often only recognized and reportimpact of various strategies. These include: ed years after loan origination, after a Restrictions on available loan terms; simpli- review of origination documents is promptfication and standardization of loan prod- ed by a loan default, repurchase demand, ucts; limits on property financing; limits on or other factors. business activities; and, other options that As a result, many mortgage fraud SARs FHFA should consider to contract the are filed much later than the date that the Enterprises’ multifamily businesses. suspicious activity actually began. Thus in 2012, 57 percent of SARs received reported Independent Mortgage mortgage loan fraud (MLF) activities that started more than five years before the SAR Banker Production Rises was filed. The bulk of FinCEN’s MLF SARs, 11 Percent Quarterly Richey May & Co. has regardless of filing date, reference suspireleased its 2013 sec- cious activity that filers believe began in ond quarter trend calendar years 2006 and 2007. The followreport for independ- ing chart depicts the number of annual ent mortgage bankers. mortgage fraud SAR filings based on the The quarterly bench- year FinCEN received the SAR, versus the marking survey was created using Richey year that the SAR filer believed the suspiMay Select, an analytical technology providing benchmarking information derived continued on page 18


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Make Your CTO Your Ally By David Rasmussen

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Whether your company staffs a chief risk officer, chief appraiser or director of valuations, there's an office where the proverbial “buck” stops on collateral valuation issues. In today’s world, where valuation regulations and expectations have been redefined, we can point to numerous situations in which change has needed to occur quickly and has required technology to get there. Enter the CTO. We’ve grown accustomed to the days when IT’s role in valuations was to ensure the person(s) responsible for appraisal ordering had a functioning e-mail account, or to provide the underwriting team with functioning computers and access to a photocopy machine. How times have changed. Valuations can no longer be independent of real, CTO-supported technology. Appraisals are now almost exclusively transmitted via XML and when they are not, PDF extraction technology must be employed. Automated valuation models (AVMs) are ordered through software-as-a-service (SaaS) solutions or XML feeds; and all through the pipeline, your LOS, AMCs and document retention services must stay connected, all while delivering the required data to Fannie Mae and Freddie Mac through Uniform Collateral Data Portal (UCDP) in a Uniform Appraisal Dataset (UAD)-compliant fashion. Consider how many of those terms in the last sentence even existed 10, five or even two years ago. Yes, the world is changing, rapidly, and the greatest ally a valuations expert can have is the person who can open the technological gateway to a swiftly flowing mortgage pipeline. In the world of valuations, we speak in terms of USPAP, AVMs and the ASB, while our counterparts in IT are caught up in DRPs, BRDs and PIIs. So what can you, the valuations stakeholder, deliver to the CTO to speak his/her language and get your integration project moving? We counsel our clients to come to an early understanding on the shortand long-term goals for new technology. Documenting these needs will be the first step in delivering on your CTO’s first request: An SOW, or “scope of work” document. Sometimes, these needs are as black and white as the regulations themselves. Other times, they may be part of a valuations “wish list,” offering more qualitative benefits to the valuations team. Either way, identifying the requirements so IT can create a road map will put your IT relationship and overall project on stronger footing. Secondly, initiate an early introduction to your vendor’s integrations team. Ideally, this introduction should instill confidence in the vendor and an understanding of what lies ahead. When this is not the case, understanding concerns upfront and making necessary adjustments will save considerable effort down the road. One final word of caution: Don’t be fooled into thinking cloud technology will get you around talking to your IT team. True, cloud technology has alleviated considerable burden for in-house technology teams, but like all things valuation-related, outsourced services do not equate to outsourced responsibility. Bring your technology team in early to validate the security and reliability surrounding the application and feel confident your data is safeguarded. 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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cious activity actually began (which was usually at loan origination). It shows that there was an extraordinary concentration of suspicious mortgage origination activity beginning in 2006 and 2007, the years immediately preceding the financial crisis of 2008.

TransUnion Study Links Minimum Credit Card Payments and Mortgage Delinquencies A new TransUnion study found that consumers with the ability to pay larger amounts than the minimum payment due on their credit cards had significantly lower delinquency rates on not only their credit cards, but also their auto loans and mortgages. Consumers who made the minimum payment, or close to it, generally had higher delinquency rates. “TransUnion’s study has confirmed the conventional wisdom that transactors—those consumers who pay off their entire balance each month—are better risks than revolvers, i.e. consumers who only pay a portion of their balance, and moreover has quantified just how big an increase in risk revolvers represent,” said Ezra Becker, co-author of the study and vice president of research and consulting in TransUnion’s financial services business unit. “Just as importantly, the study revealed that not all revolvers are equal: those who pay more than the minimum on their credit cards, even if they don’t pay off the full balance, present less risk across product types.” The TransUnion study found that, of the consumers who make payments on their credit cards, each month about four in 10 will pay off their entire credit card balance. Six in 10 of those making payments on their credit cards will only pay part of their remaining balance, and of those six consumers two will pay off only the minimum owed. “This study was important because it allowed us to quantify the extent to which higher credit card payments lead to improved loan performance—and not just on credit cards, but also on mortgages and auto loans,” Becker said. “Our findings provide lenders another tool with which to evaluate consumer risk that is not generally captured by traditional credit scores.”

Fannie Mae Recognizes Top Servicers Fannie Mae has announced Servicer Total Achievement and Rewards (STAR) Program results for the first half of 2013. STAR was created to establish servicing standards and recognize Fannie Mae servicers on their overall performance, customer service and foreclosure prevention


efforts. The program measures servicers across key operational and performance areas relative to their peers, and acknowledges their achievement through STAR designations. For the first time, the midyear results also provide increased insight into the key metrics used to measure servicer performance and foreclosure prevention efforts. “Our mortgage servicers’ efforts are critical to keeping people in their homes, preventing foreclosures and stabilizing communities,” said Leslie Peeler, senior vice president of Fannie Mae’s National Servicing Organization. “With our expanded 2013 mid-year assessment, we continue to recognize servicers that are on track to meet overall performance scorecard goals while also recognizing more servicers that are top performers in specific operational areas. We are working hard to share more information regarding our STAR assessment process so the industry can more easily identify and adopt best practices for the benefit of homeowners.” For overall performance, the following servicers produced results on the STAR Scorecard at or above median levels relative to their peers for the first half of 2013: l Peer Group One: Green Tree Servicing LLC, Nationstar Mortgage, Ocwen Financial Corporation, PHH Mortgage Corporation, PNC Financial Services Group Inc., Seterus Inc., and Wells Fargo Bank NA l Peer Group Two: Fifth Third Bank and Regions Bank l Peer Group Three: Capital One NA, Colonial Savings FA, M&T Bank, Navy Federal Credit Union, Sovereign Bank, and Third Federal Savings and Loan In order for a servicer to be successful in the Fannie Mae STAR Program, they must be effective in these core functions. The STAR program recognized the following servicers for demonstrating leading performance at the top of each peer group for these key metrics: l 90+Days Delinquent to Better: Seterus Inc., Regions Bank, Branch Banking & Trust Company l Retention Efficiency: Seterus Inc., OneWest Bank FSB and Colonial Savings FA l Liquidation Efficiency: GreenTree Servicing LLC, Fifth Third Bank and Navy Federal Credit Union

Your turn National Mortgage Professional Magazine invites you to submit any information on regulatory changes, legislative updates, human interest stories or any other newsworthy items pertaining to the mortgage industry to the attention of: NMP News Flash column Phone #: (516) 409-5555 E-mail: Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.


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THE PRESIDENT’S CORNER: SEPTEMBER 2013 want to take a moment to thank all of you who sent me thank you notes about my umpiring appearance in the Big League World Series. It is because of you, our NAMB members, that I continue to do this job each and every month. Being your president is not easy. It takes about six to eight hours every day to update information, write articles, talk to lenders and originators, follow up on government affairs, speak with account executives, schedule future events and make sure that my calendar is up to date to make sure that I don’t forget anything. With changes in the lending world right around the corner, we are trying to make sure that we get to each congressman and senator and push our fight. I have instructed our Membership Committee to reach out to every state and do what they can to get everyone who is an originator to join NAMB. This is becoming a larger-than-life obstacle with a lot of people who believe that if “They are not joining your association, it must not really be important!!” This cannot be further from the truth. Small business, mortgage brokers and mortgage bankers are all fighting for their lives and we need to band together NOW and prove the fact that we speak for the originator every day. I know that you get tired of me always telling you to join, but if you join, it is actually better than sending money and not joining. We need members and we need them now!!! I am asking everyone out there who are originating mortgages and in the mortgage business to join NAMB—The Association of Mortgage Professionals. Nothing says it better than to walk the halls of Congress and tell them that we have 25,000-30,000 members. So you need to join today, and go to your peers and tell them to join and get this movement going. It would be really neat to have everyone who is on the Nationwide Mortgage Licensing System & Registry (NMLS) to join. I would just love to see their faces if we could go there and say we are 100,000 members strong. They would really have to listen to us then. So visit and join as a Silver Member today. It will cost you $50. That is the cost of a dinner out on the town. And you will then be part of a movement to keep


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mortgage professionals in high demand. I appreciate everyone giving up their time to wage this war for our origination lives. I promise you that I will do everything I can to try to get changes made and to make our industry stronger each and every day in this fight. But I need you to be part of it. And you know, this really brings me to something that I have hanging on my wall that I look at almost every day. It is a poem that I feel reflects my commitment and devotion to you, our members, as I work each day to help the originator succeed. It isn’t much, but I think after you read it, you will understand my passion for this industry.

DON’T QUIT When things go wrong, as they sometime will. When the road you’re trudging seems all up hill, When the funds are low and the debts are high, And you want to smile, but you have to sigh, When care is pressing you down a bit, Rest if you must, but don’t you quit. Life is queer with its twists and turns, As everyone of us sometimes learns, And many a failure turns about When he might have won had he stuck it out; Don’t give up, though the pace seems slowYou might succeed with another blow. Often the goal is nearer than It seems to a faint and faltering man, Often the struggler has given up When he might have captured the victor’s cup. And he learned too late, when the night slipped down, How close he was to the golden crown. Success is failure turned inside out– The silver tint of the clouds of doubt– And you never can tell how close you are, It may be near when it seems afar; So stick to the fight when you’re hardest hit– It’s when things seem worst that you mustn’t quit. —Author Unknown

I know that you are all out there and that you read these articles. I am challenging you all to go now and join. It’s hard to imagine that we won’t reach this goal by the end of the month. Numbers are what it is going to take. Are you going to just let this happen to us? To force you to do go do something that you don’t want to do. To go find another job that you will love doing as much as this and maybe, just maybe, pays you what you are worth. I don’t think that I am willing to go and change what I do for a living. I have been an originator for almost 38 years and I love doing this. I like seeing people smile and be happy because I helped them reach a goal. I like being an independent entrepreneur each and every day. I like setting my schedule to go see my grandchildren, my kids and my family on my time. I like umpiring a baseball game at 4:00 p.m. and not have to worry whether I made a mistake by leaving the office early. I like being in control of how I make a living and how much I make. It is the American DREAM, and I live it every day. I also make DREAMS come true for all of my customers. I love my life, and I think all of you do to. So go do the right thing and go join NAMB today! Let me count you in the numbers that I am proud to say are members. It is now all about the membership. We cannot wait for someone else to do this … it now has to be you. Don’t think that you will not make a difference. Don’t be the one that is standing alone. Don’t put it off until tomorrow … you have to do it today. As the old saying goes, “United we stand, divided we fall!” Now is the time to unite, and the easiest way is membership. Join us and join us right now! Join today! Sincerely,

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


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heard street ON THE

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

REMN Expands Into Atlantic City Area

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Real Estate Mortgage Network Inc. (REMN) has announced the opening of their first Atlantic City area office in Galloway Township, NJ. Joining REMN in the new office will be Frank Montufar in the position of branch manager, as well as a team of highly regarded and knowledgeable local mortgage experts, including Chuck Reed, Tom Schindler, Frank DeFrancisco, Tracy Klos and Lora Dinunzi. Under Montufar’s direction, this new branch will extend REMN’s nationally recognized reputation for quality mortgage products, highly competitive interest rates and exemplary customer service to home buyers and real estate professionals in the Atlantic, Cape May, Cumberland, Salem and lower Ocean County areas. Montufar and his team have been recognized for their expertise in the affordability markets by providing financing for VA, USDA, the statebacked New Jersey Housing and Mortgage Finance Agency programs, and most notably, FHA renovation and rehabilitation mortgages. True renovation and rehabilitation mortgage experts, Montufar and Schindler have more than 40 years of collective experience in originating and closing these specialized mortgage products.

GSF Re-Tools Its Sales and Marketing Efficiency GSF, a leading wholesale, retail and consumer direct lender, has selected Vantage Production LLC’s Vantage Integrated Production (VIP) to improve the effectiveness and efficiency of sales and marketing across all of its businesses. Based in Brookfield, Wis., GSF originated nearly $500 million in mortgages in 2012. GSF plans to use VIP to increase loan officer productivity and centralize sales and marketing. The platform will also allow GSF to engage with leads more effectively during both the sales cycle and over the life-ofthe-loan relationship. VIP will be integrated with GSF’s loan origination system (LOS) and its product and pricing engine.

“Working with Vantage Production will allow us to deliver marketing efficiencies to our customers and referral partners,” said Mike Maida, national sales director at GSF. “Integration with this platform is an important part of establishing a lasting relationship with those who drive our business. With VIP, we will have one common CRM database supporting all channels of origination. This will allow us to replace manual sales and marketing practices with more strategic and controlled processes: increasing our conversions while maintaining compliance.”

Jeff Ishbia of USFS Wins Ernst & Young Entrepreneur of the Year Award United Shore Financial Services (USFS) has announced that its Founder and Chairman Jeff Ishbia has won Ernst & Young’s 2013 Entrepreneur of the Year Award for the Michigan and Northwest Ohio region. The winners were recently honored at a black tie gala event held at the MGM Grand in Detroit, Mich. USFS is the parent company of United Wholesale Mortgage (UWM), Shore Mortgage and Capital Mortgage Funding. Ernst & Young’s Entrepreneur of the Year award recognizes outstanding highgrowth entrepreneurs who demonstrate excellence and extraordinary success in such areas as innovation, financial performance and personal commitment to their businesses and communities. “To be named to Ernst & Young’s Entrepreneur Of The Year list is a tremendous honor,” said Ishbia. “This achievement celebrates the overall fostering of intra-company entrepreneurship that we embrace at USFS and an unwavering drive and commitment by each of our talented employees that are dedicated to moving our company forward.” Ishbia will move on to compete at the national level of the competition. The national winners in several national cate-

gories will be announced at the annual awards gala in Palm Springs, Calif., on Nov. 16, 2013. The awards are the culminating event of the EY Strategic Growth Forum, the nation’s most prestigious gathering of highgrowth, market-leading companies.

panel sessions and roundtables, is a frequent thought leader in the media, and has authored many articles on the topics of valuation management software and various mortgage technologies that help move the mortgage industry forward.

Global DMS CEO Honored by Philadelphia Business Journal

New Penn Expands Into Nine New Markets

Global DMS announced that the Philadelphia Business Journal designated its president and CEO, Vladimir Bien-Aime, to the publication’s 2013 annual Minority Business Leaders list. Bien-Aime was among only 23 individuals to earn a spot on this year’s list. “It is a huge honor to be among a select few of the region’s top minority businessmen and women that were named to the Philadelphia Business Journal’s Minority Business Leaders list,” remarked BienAime. “I feel privileged to receive this highly regarded award and I look forward to continue making positive contributions in everything that I do.” Bien-Aime is regarded a through-andthrough entrepreneur who commands professionalism, business ethics and excellence in service. He personifies a minority owned and operated business—Global DMS— where he serves in the capacity of president and CEO. Global DMS is a wildly successful software firm focused on automating complex processes in the mortgage banking industry. Bien-Aime constantly strives to inspire creative freedom and entrepreneurship among his people. As a result, his company is comprised of highly dedicated and passionate staff that thinks out-of-the-box and possesses an entrepreneurial mindset in business and the introduction of new ideas. Bien-Aime is an active participant in national and regional mortgage banking trade shows, conferences and events. He regularly serves as an expert resource on

Nationwide lender New Penn Financial LLC, recently recognized as one of the 500 fastest-growing companies of 2012 by Inc. Magazine, continues its strong growth in 2013 as the company recently opened in nine new markets and now operates 50 local offices across the nation. New Penn has opened branch locations in Columbia, S.C.; Estero, Fla.; Knoxville, Tenn.; Las Vegas; Manassas, Va.; Maryville, Tenn.; Plano, Texas; Rapid City, S.D.; and Universal City, Texas. The branch managers of these locations average 10 years of experience in the mortgage lending industry. Licensed in 46 states, New Penn has forged a national industry presence built on competitive rates, exceptional customer service, and healthy lending practices. Since its founding in 2008, New Penn has surpassed $12 billion in loans and provided funding for borrowers on more than 50,000 loans. “While rates have increased, they are still near record lows,” said Brian Simon, chief operating officer with New Penn Financial. “For customers looking to buy homes, whether it is their first home or they want to consider a new property, it is a great time to lock in a low rate.”

Total Mortgage Receives Arizona Mortgage Banker License

Total Mortgage Services LLC has announced that it has received its Arizona Mortgage Banker License from the Arizona

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Are You a Peacekeeper or a Peacemaker? By David Lykken am a firm believer in the power of education to change the mortgage industry. I believe that the more educated the public is about proper management of personal finances, the more robust the industry will be. I have written before about the importance of educating the community. I believe that leaders in the mortgage banking industry should go out of their way to educate the public. They should hold seminars at libraries, universities, and conference halls. The more informed the public is, the healthier the profession will be. I also believe that the more educated industry professionals are on financial products and services, the more we will see a thriving mortgage banking industry. While education isn’t the end-all-be-all, an educated world increases the chances for a prosperous world. I have written


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about the responsibility of leaders in the mortgage banking industry to own the outcomes of the their salespeople. By that, I mean that great leaders will ensure the proper training of their people. Depending on the specific needs of their people, they will hire trainers, consultants or coaches to improve the skills of their people. Education is, without a doubt, the most powerful, albeit underutilized tool, for building a stronger and more durable mortgage banking industry. That being said, I believe that there is a right way and a wrong way to educate. I’m not talking about where the education comes from. Like I said, I believe managers should educate their sales reps. I also believe there is great benefit in seeking an outsider’s perspective and hiring trainers, consultants and coaches. And certainly there is value in attaining higher industry-recognized certifications. All of these things are great for building a stronger team. I believe

the key thing to consider in education isn’t who is doing the education but, rather, how the education is being done. Here’s the bottom-line: Great education challenges existing beliefs. Great teachers don’t cater to the perspectives of their students. Instead, they give their students new perspectives to consider. If the education only serves the purpose of making students feel good about what they already know, it is worthless. Students never learn anything until their teachers are willing to confront the preconceived notions they hold and show them a new way of thinking. Great education changes minds. And great learning comes from being open to that change. In this way, education is a lot like leadership. The teacher is a lot like the leader. Just as a teacher can end up pandering to the existing beliefs of the student instead of teaching something new, you, as a leader in the mortgage banking industry, can end up pandering to the existing beliefs and behaviors of your followers rather than leading them in a new direction. A friend of mine recently put it into terms that really made a lot of sense to me. As leaders, we don’t want to be peacekeepers; instead, we want to be peacemakers. Whereas peacekeepers are more interested in appeasing their followers and making sure not to ruffle anyone’s feathers, peacemakers are more interested in confronting issues and changing their followers for the better. Throughout this article, I want to address a few reasons why we would all be better leaders if we were willing to confront problems head on and challenge the thinking of

our followers. Great leaders don’t keep the peace; they make it. The first reason why great leaders will adopt the posture of peacemakers rather than peacekeepers is that, while peacekeepers are interested in maintaining the status quo, peacemakers are interested in provoking change. If you want your people to grow, you’ve got to get comfortable with change. You’ve got to be willing to break the mold and upset the traditions that they are used to following. A peacekeeper would allow his people to stay where they are, but a peacemaker pushes them toward growth. There is no growth without change. And, as with all change, making transitions in the mortgage industry comes with growing pains. The great leader is not afraid to push his people through these changes in order for them to become better, more competitive professionals in the industry. The second reason why great leaders will choose to be peacemakers rather than peacekeepers is that, while peacekeepers are more likely to appease their people, peacemakers are more likely to be willing to confront important issues. History has shown us time and again what the drastic consequences can be of adopting a policy of appeasement. Many militaristic rulers in totalitarian regimes have taken advantage of the lenience of opposing countries. In war, no conflict was ever settled by allowing the offender to get off scotfree. It’s only when those tyrants were confronted that they backed down. It’s the same way in leadership. No, of course I’m not saying that your people are evil dictators. But they can get on the wrong track, and they might need some coaching to get

ested in giving their people what they want as they are in giving them what they need. Great leaders aren’t interested in appeasing, pandering, or keeping the peace. Great leaders are peacemakers. I am not at all suggesting that great leaders shouldn’t listen to their people or consider feedback from others. Proverbs 11:14 says, “Without wise leadership, a nation falls; there is safety in having many advisers.” I believe this maxim wholeheartedly. Great leaders are great listeners. Great leaders are willing to learn from others and are always open to alternative points of view. They become great by surrounding themselves by

even greater people. I want to make that very clear. Great leaders willingly admit that they stand on the shoulders of giants. Nevertheless, at the end of the day and after all has been taken into account, the great leaders are those who are willing to take a stand. It’s easy to simply back down and keep the peace at all costs, but great leaders will resist that temptation in order to do what’s best for leading their people. No one ever said leadership was easy. But, if you are strong enough to stand up for what’s right, it will always be worth it in the end. So what about you? Which path

will you take? Are you a peacekeeper … or a peacemaker? David Lykken is president of mortgage strategies and managing partner with Mortgage Banking Solutions. He has more than 35 years of industry experience and has garnered a national reputation, and has become a frequent guest on FOX Business News with Neil Cavuto, Stuart Varney, Liz Claman and Dave Asman with additional guest appearances on the CBS Evening News, Bloomberg TV and radio. He may be reached by phone at (512) 977-9900, ext. 10, or e-mail dlykken@mortgagebankingsolutions.c om or


Be Part Of Utah’s Biggest Gathering Of Mortgage Pros Each year, the Utah Association of Mortgage Professionals stages an extraordinary event, celebrating, advancing and supporting the men and women who finance residential and commercial real property. With top speakers, great hands-on sessions and a wealth of opportunities from exhibitors and sponsors, it’s a can’t-miss day for hundreds of mortgage professionals.

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CMG Financial CRE Credit Services Credit Plus E-Trafficers Fairway Wholesale Lending Franklin American Mortgage Frost Mortgage HomeBridge Wholesale Kroll Factual Data National Mortgage Professional Magazine Nationstar Mortgage Maximum Acceleration

back on the right track. If you were trying to keep the peace, you would allow them to keep practicing the destructive behaviors that they are practicing. But if you were instead a peacemaker, you would be willing to confront them head on and help them to regain the proper perspective before they do further damage. Keeping the peace won’t help. If you want your people to head in the right direction, you’ve got to be a peacemaker. The third reason why great leaders will tend toward peacemaking rather than peacekeeping is that, while peacekeepers are prone to burying problems, peacemakers will be more inclined to solve problems. Peacekeepers don’t like trouble. They prefer to think that, if they ignore it, it will go away. So, they dust the poor business practices under the rug and hope that will take care of the problem. Unfortunately, it always ends up blowing up in their faces. If you want to solve the problems your people are encountering, you’ve got to be a peacemaker. You’ve got to face the challenge and deal with it immediately rather than letting it slide. Especially if the issue is a matter of integrity or ethics, you’ve got to solve the problem right away. But even if it’s a performance issue, you’ve got to be willing to tackle the issue when it presents itself. Delaying the solution never solved the problem. Peacekeepers prefer to turn a blind eye to pressing issues in hopes that they will sort themselves out. But that never happens. If you want to be a great leader for your people, you’ve got to step forward and solve problems right away. You’ve got to be a peacemaker. One final reason why great leaders will opt to be peacemakers rather than peacekeepers is that, when it really comes down to it, peacekeepers aren’t leaders at all; they are followers. Sticking with the educational theme that we opened up with, imagine a kindergarten teacher attempting to resolve a disagreement between two children. Suppose the children are fighting over a puzzle. They both want to put the same puzzle together so, rather than making them share or take turns using the puzzle, the teacher simply buys another identical puzzle so they each can have one. If that’s the solution the teacher offered, who really had control in the situation—the teacher or the children? Who was really leading and who was really following? That’s something that you should ask yourself as you attempt to settle disagreements with your people and as you attempt to guide your people to making better decisions and becoming better professionals. If you attempt to solve their problems just by always giving them what they want, aren’t you really following them? Great leaders aren’t as inter-

A Closer Look at the USDA Rural Loan Pilot Program By Rich Obermeier The USDA Rural Loan Pilot Program was launched on Feb. 1, 2012 to assist current USDA Guarantee Loan borrowers with refinancing their mortgage to obtain a lower interest rate with minimal requirements. A USDA Guaranteed Home Loan can assist most individuals and families in rural areas to become homeowners. The central purpose of the USDA’s Guaranteed Rural Housing Program is to help moderate- and low-income borrowers qualify for a mortgage loan, even if they cannot afford a downpayment. The USDA program is the only program that allows up to 100 percent financing for non-veteran borrowers. Eligible applicants must: l Be a current Section 502 Direct or Guaranteed Loan borrower l Meet the applicable adjusted income eligibility limit l Reside in an eligible rural area, or an area that was eligible a the time of original loan closing l Have made timely mortgage payments for the previous 12 months at the time of the loan application

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


USDA Rural Loan Pilot Program Eligibility Requirements: l Borrower must have a USDA Guaranteed Loan to qualify l Borrower must meet income eligibility requirements to ensure that the household income does not exceed allowable amount l Borrowers cannot be more than 30 days late on any mortgage payments over the last 12 months l The USDA Rural Loan Pilot Program refinance interest rate must be one percent lower than the current interest rate States eligible for the Refinance Pilot Program: Alabama, Alaska, Arkansas, Arizona, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Michigan, Mississippi, Missouri, Montana, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington, West Virginia and Wisconsin How to apply: Applicants may apply with an approved lender of their choice that participates in the Rural Refinance Pilot Program. The USDA Rural Loan Pilot Program will be evaluated after two years to determine whether to continue it, terminate it or make it permanent. With more than 25 years in the mortgage industry, Rich Obermeier, branch manager for GSF Mortgage Corporation, has worked with some of the largest mortgage companies in the county developing retail and wholesale channels. Rich has assisted in developing and implementing operational protocols for sales managers, originators and loan processors. In recent years, Rich has developed the USDA Rural Development Product in multiple states and locations. Rich may be reached by phone at (262) 957-8901 or e-mail


heard on the street

continued from page 22

Department of Financial Institutions, and is now able to originate residential mortgage loans in the State of Arizona. Total Mortgage is licensed for lending and brokering activities in Arizona. In conjunction with its Arizona license, Total Mortgage opened its first Arizona branch office, located in Phoenix, Ariz., and has named Larry Gates as the new location’s branch manager. In his new role, Gates and his team will focus on offering high quality mortgage lending services, some of the lowest mortgage rates available and personalized service to borrowers throughout Arizona. Gates joins Total Mortgage with 17 years’ experience in mortgages. Gates has acted as Arizona area manager for a nationwide mortgage lender and president/CEO of a leading mortgage broker firm.

Bay Equity Home Loans Marks Significant Growth in 2013

Bay Equity Home Loans nearly doubled its branches in the first half of the year, having its largest six months of steady and substantial growth as a San Francisco-based mortgage lender. The company has added 30 new branches as it expands its reach of mortgage lending professionals. Bay Equity’s expansion in 2013 adds to an already impressive reputation for growth. In 2011 and 2012, Bay Equity was ranked by the San Francisco Business Times as among the “Top 100 Fastest-Growing Private Companies.” From opening its doors in 2008, Bay Equity has opened 69 branches and is licensed in 12 states: California, Idaho, Montana, New Mexico, Texas, Colorado, Oregon, Washington, Hawaii, Utah, Nevada, and Arizona. The branches that joined Bay Equity this year are experiencing their own success. Bay Equity’s Costa Mesa, Calif. branch opened in February. In its first two months alone, the branch originated $6.5 million in loan volume. It quickly became a top 10 branches for Bay Equity generating $9.8 million in monthly volume in its third month.

PRMG Expands Operations and Adds Regional Manager Paramount Residential Mortgage Group (P R M G ) a n nounced the recent expansion of their operations into the central United States, and the Midwest Region. The Midwest territory will be headed up by the recent hiring of PRMG’s new regional manager, Brian Reynolds. Brian brings with him over 17 years of experience in the mortgage industry that includes leadership roles in both operations and sales. Brian has extensive industry experience in opening loan fulfillment offices in multiple locations throughout the country, and has been

instrumental in growing production while being the director of operations at Fairway Independent Mortgage Corp, director of wholesale (central division) at Caliber Funding, and regional vice president at First Magnus Financial. His background includes sales, origination, recruiting, and training support for the companies he has served. In his new position as regional manager, Brian Reynolds will be responsible for recruiting and developing a strong presence in the Midwest territory while overseeing a full service fulfillment operations center that will be underwriting and funding locally, including generating business in the states of Illinois, Indiana, Kentucky, Ohio, West Virginia, Missouri, Michigan, Wisconsin, Minnesota, and Iowa. Brian will be reporting directly to Ron Gapp, Divisional VP, and Herb Lewis, Divisional VP. PRMG president and CEO, Paul Rozo, indicated both he and Robert Holliday, PRMG COO, are truly excited about the recent expansion into the central United States. “We are very confident that our new fulfillment center will position PRMG to handle a high volume of production while also providing superior levels of service to our customers,” said Rozo.

LoanLogics Announces Upgrades to Its LoanDecisions Platform LoanLogics has e n h a n c e d LoanDecisions, the company’s pricing and eligibility platform. Specifically, the enhancements are to LoanDecisions’ Pipeline Management Tool, which now includes the ability to create custom statuses for locked loans and the inclusion of additional reporting fields for enhanced compliance tracking. Also, the LoanDecisions pricing form now supports expanded pricing characteristics related to the HomeStyle Renovation Mortgage. LoanDecisions is the mortgage loan pricing and eligibility solution that is preferred by mortgage lenders who need more comprehensive investor data and an intuitive user interface that supports rapid user adoption. Users of the Pipeline Management Tool can now add up to 10 custom lock statuses to track loans from lock through close, funding and sale. In addition, the lock desk reporting feature has been expanded to include 18 additional fields, including status and margin detail that can be used for compliance tracking at the branch and account levels. “Updating the locked status of loans at a more granular level provides lock desk staff with a more complete picture of the continued on page 51


n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013


Recruiting Obstacles & More By Robert Ottone

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


eff Van Note is a leading financial expert in the New York area, with over a decade of experience in the mortgage industry. He prides himself on getting to the closing table within 30 days, as well as driving new business opportunities via innovative services. Van Note is also a recognized leader in the realm of customer service. Covering a variety of topics, Van Note was keen to shed some light on common issues that could affect businesses, as well ways to drive business in a difficult economy. Despite his youth, Van Note’s experience has been varied and has made him a top-earner for a good portion of his career in the mortgage industry. We started with recruiting obstacles and continued to cover a


multitude of topics over the course of our Q & A.

Van Note on recruiting … “This is a relationship business. If anyone is going to be recruiting someone, it should be a sales manager, someone who can manage you day to day. You need someJeff Van Note one who is going to be in the trenches with you. It’s important not to be promised the world because you’re not going to deliver on it. If you’re selling your company to someone, you shouldn’t be out there, that means you’re a

salesman, not someone to be trusted to hire anyone or recruit anyone. Recruiters are worthless.” Making a comparison to New York Yankees shortstop Derek Jeter, Van Note states that: “You’re not going to send the bat boy to recruit a talent like that. You need to send someone who’s in charge of scouting, someone high up in the company.” “I’m looking for people who know the business, can open doors and meet expectations. I think the people who recruit are desperate. You can’t just go out and recruit,” Van Note said. “You need to hand-pick who you want. Everyone has a different system, but this is what works for me. For me, it’s always been about my gut feeling. You need to see a sales side and see the operations side. You need to see how the operation works, top to bottom, depending on what you’re looking for. If you’re closing three deals a month, you’re not a tremendous asset to the company. You want someone who’s worth their weight in gold.”

What does Van Note look for? Some of the more tangible aspects of what recruiters or those looking to hire talent are looking for, according to Van Note, include: “Operations. That’s number one. Without operations, you cannot be a top originator. You could originate $100 million a year, but without the products and the bank behind you, what good is it?”

On large banks vs. small banks … “I think the larger the company is, the

more important it is to have infrastructure in place. Small banks can have a niche, but they’re less likely to take on a huge loan,” Van Note said. “Big banks have the edge because they have more outlets. More overhead, more corporate mentality. To be honest, I’d rather work with a smaller bank that has a more personal mentality.”

The difference between a successful loan officer and a failure … “They make excuses. If the first thing they say is ‘my rate’s too high,’ I know they’re a bad salesman. I can sell to anyone, at any rate,” Van Note said. “You’re not in the rates business, that’s the bank’s deal. If the bank is charging us 10 percent, that’s the rate. Most of the time, everyone makes excuses. You need to weed out who is full of it and who has an issue to work out. It all comes down to working harder. You need to have a drive from within. If someone has it, you can work with them. I think that we’re at a time where people with a great work ethic who are willing to learn and work within our system could have a tremendous opportunity for entry.” Van Note’s opinions on recruiting and the principles behind selling may seem like something out of “Glengarry Glen Ross,” but there’s no denying that he’s a top figure in the mortgage industry. In future installments, Jeff Van Note will answer more questions regarding topics in the mortgage industry, while also offering personal approaches to common issues.


n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

for managers only Europe Rises From Recession By Dave Hershman

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


Many have wondered why interest rates have risen so sharply this year without the economy showing significant enough strength to heat up inflationary pressures. Yes, the threat of the Federal Reserve Board decreasing stimulus by lowering their purchases of Treasuries and mortgage-backed securities (MBS) hovers over the markets. Yet, the Fed would not be considering lessening stimulus if they were not more confident about the economy. One must remember that the Fed put

these extraordinary measures in place to keep us out of a second recession as the worldwide economy was slowing while we were struggling to come back from our deep recession. How many times did we hear that Europe’s recession and fiscal crisis could drag us back into recession? The phrase “double-dip recession” became commonplace in media headlines for well over a year. In the past we have asked the question: “Will Europe pull us back into recession or will we lead Europe out of recession?” An important theory arose this year … if the real estate markets in the U.S. continued their recovery, then it was more likely that

our economy would help lift Europe. While we cannot say there was a direct relationship, the news released recently that the Eurozone experienced a positive quarter of growth bodes well for this scenario as well. It is important to realize that a 0.3 percent growth rate for the 17-nation region is nothing to write home about. The fact is that any positive growth represents progress. One should also remember that the central banks in Europe have been applying their own brand of low interest rate stimulus. In reality, we realize that Europe is not out of the woods and we are a long way from a normal recovery. However, the eas-

ing of Europe’s recession weakens another significant threat to our economy. The Fed’s reaction to lessen stimulus is a normal reaction to the lessening of threats. We are still a long way from ending all stimulus activity by the Federal Reserve, but the markets now recognize that we seem to be on the doorstep of the first move. Dave Hershman is a top author in the mortgage industry with seven books published, including The Complete Mortgage Management Kit. Dave is also director of branch support for McLean Mortgage. He may be reached by e-mail at or visit


n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

Sales Marketing Tips for Today’s Mortgage Professional Cultivating the Fruits of Your Labor


Serving clients year-round ensures a bountiful business

JUNE 2013 n National Mortgage Professional Magazine n

even in a competitive market By Fred Arnold, CMC magine for a moment you are a farmer. Year after year, the same specific acre of your farm bears your best produce. Can you even conceive of a scenario in which you would purposefully decide to neglect that acre one year? Of course you can’t, as that would be nothing short of foolish. Yet, to a certain degree, that is what many mortgage professionals tend to do with their strongest “crops.” In this case, I’m talking about those clients in your database who already like, love and trust you. These clients are those who are the most likely to yield new business for you, but for some reason, you’ve decided to stop nurturing, cultivating and fertilizing that relationship, perhaps because you think that it has already been “picked over.” Consider that most experts say that, at any given time, 20 percent of your clients, friends and neighbors are looking to buy, sell or refinance. To illustrate, this means that out of 200 clients, friends and neighbors, 40 of them are in need of your help right now. So what are you doing to culti-


vate that relationship? The trouble that most sales professionals run into is in thinking that just because a client recently refinanced their home, or bought a home, they no longer need you. Nothing could be further from the truth. Granted, they likely don’t need another refinance, but that’s about the only thing you know for certain. Fortunately, you’re in a terrific position to cultivate that relationship with that client even further, merely by being helpful. They may need a trust set up, they may need a new tax professional or may want to remodel and need a trusted contractor. You likely have the referrals they need. Part of nurturing and fertilizing an existing relationship, so that it ends up being one of your most fruitful relationships will involve genuinely trying to help your clients. To do that, you will have to get to the root of their financial goals. This means, of course, that you’re going to have to pick up that phone, and call your clients. The opportunity to help your clients never wanes, despite what is happening with home prices, interest rates and even a rocky economy. Use benchmarks such as the year anniver-

sary of their closing or their birthday to reach out and find out how you can be of help to them. Ask what their financial goals are; ask if they are happy with their CPA or their financial planner. For that matter, ask if they even have a financial planner! The beauty in helping others, without regard for financial reward, lies in the fact that in business, as in all things in life, you truly do reap what you sow. If you’re not convinced, think about the person in your life who gives back more than anyone else. Think of those who are actively involved in community causes, who volunteer their time, who know they can’t save the world, but they can start by helping just one person, animal or cause at a time. Isn’t that person one of the most fulfilled people you know? That’s because in giving of themselves, they are getting a great deal in return. By trying to help our clients in all the ways we can, we are in fact retooling the soil and are adding nutrients to help that relationship to flourish. These are people who have already entrusted us with one of the biggest investments of their lives, so the onus is now on us to show them that they did so for a good reason. Perhaps we

can refer their cousin to a terrific real estate agent who will work tirelessly to get them the home they want for the price they love. Perhaps their aging mother needs help setting up a trust and we happen to know the local area’s most reputable trust and estate attorney. There’s no limit to the ways you can be of assistance to your clients, which means there is also no limit to the business and referrals that they can give to you. So before you ignore those clients who like, love and trust you just because they may not need your current assistance with a mortgage loan, remember that nurturing and cultivating existing relationships is always as important as sowing new seeds. Fred Arnold, CMC is past president of the California Association of Mortgage Professionals and a mortgage professional at American Family Funding in Southern California. Fred hosts the radio show SCV Chamber and Business Spotlight on AM 1220 KHTS, as well as the televised program “Out of the Rough” on, Channel 20. He may be reached by phone at (661) 284-1150, ext. 109 or e-mail

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n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

Your most qualified borrowers deserve a standout lender.


Kelly Taylor, Senior Vice President StreetLinks Lender Solutions


SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


National Mortgage Professional Magazine’s Mortgage Professional of the Month for September 2013 is Kelly Taylor, senior vice president of StreetLinks Lender Solutions, a nationwide appraisal management company (AMC) based in Indianapolis, Ind. Recently, we had a chance to ask Kelly about his career and the industry. Congratulations on being named NMP’s Mortgage Professional of the Month. Can you give us a quick overview of your personal and professional background? I am originally from Colorado, which is where my mortgage career began. I have 20 years of mortgage industry experience on both the origination and operations sides of the business and I’ve run large retail divisions from Florida to Hawaii and everywhere in between. Seven years ago, I invested in StreetLinks and became one of the minority owners and then moved to Indianapolis five years ago with my wife and four children to be at headquarters. How did you come to the AMC business from lending? I had used most of the AMCs out there, so I understood the good and bad of what AMCs were doing from a lender’s perspective. I got to know some of the guys at StreetLinks and felt I could bring

a lender perspective to their business to help run a company the way a lender would if they had their own AMC. At that point, StreetLinks was a small company. They had good technology, really good ideas and a solid core foundation but lacked the ability to scale a business. They hadn’t done anything like that in the past, but they were eager to facilitate change and make a huge impact in the mortgage industry. I was able to shed some light on the lender’s perspective of the AMC world. That insight, coupled with a knowledgeable leadership team, industry-leading technology and a ton of dedication, kept us going and allowed us to grow rapidly. StreetLinks has become a dominant force in the AMC space. To what do you attribute the company’s success? I’d like to think that we were doing things the right way and that’s how we gained our market share and retained our customers. It’s the core foundation that we had back then, plus the passion that our team continually pours into bringing customers the best quality and service in the industry that have contributed to our success. Who have been some of your mentors? One of them would be Ed Wooten. Ed was my senior vice president when I was just a loan originator, and then later on

as a manager. Ed was a hard-nosed executive who didn’t accept excuses. He pushed me to be the best and always held me accountable. He was also good at knocking me down when I needed to get knocked down and was able to dust me off and get me back up again. He kept me grounded in constructive ways so I could continue to learn. Another mentor that comes to mind is Steve Haslam, CEO of StreetLinks, who came on board when I did. Steve and I have a track record that goes back over 20 years. He is a phenomenal salesperson and has taught me more about sales than anybody else. Steve instilled in me an understanding that better management can come from better reporting, so we track everything that can be possibly measured and are much wiser for it. Most importantly, Steve’s philosophy is “do things right and do right things,” which has truly been the root of StreetLinks philosophies as a whole and paramount to our success. What do you love about the business? I love building life-long partnerships and friendships with our lender clients. It’s not just about building our business, but actually going in and helping other lenders be more successful because of the things that we do. That approach of being a partner and not just a vendor is what builds friendships.

What concerns you about the business or keeps you up at night? The regulatory changes that are happening have made the industry incredibly complex—not only from a lender’s perspective when it comes to disclosures, requirements and the Consumer Financial Protection Bureau (CFPB), but from an AMC standpoint as well. It’s challenging that every state has its own rules which all vary wildly. Another is the dramatic increase in interest rates, which has a massive impact on the loan volume of a lender. Refinance volume went from very robust to almost nothing overnight and that dramatically impacts volume for everyone. I also have concerns about QM, the qualified mortgage rules that are coming out in January and what impact they will have on the industry, particularly on wholesale lenders and mortgage brokers. Some lenders complain that AMCs assign appraisers from too far a distance. What do you say? Years ago, I was presenting to a large regional lender in Wisconsin and I sat down with the guy who was in charge of appraisals. I think he was saying that there are people from Milwaukee driving all the way up to Oshkosh or Green Bay to do an appraisal, which

L OF THE MONTH doesn’t make any sense. I agreed with them. I said, “Mike, what if I give you reporting on how far the appraiser comes from on every file?” He was thrilled. StreetLinks assigns orders first based on proximity of the appraiser— then quality measures, and then on service measures. We don’t assign on based on fees. Since then it has become more of a national requirement that AMCs provide reporting on how far away their appraisers are and as one of the first to do it, I like to think we helped change that in the industry. You recently announced another industry-changing innovation. Tell us about it. In August, we launched our AppraiserPlus program that allows appraisers to get paid at inspection—something that’s been unheard of for years. Since the Home Valuation Code of Conduct (HVCC) came out, appraisers have been getting paid 30 or 60 days after an appraisal was completed—with some AMCs they never got paid at all. With AppraiserPlus, we are paying appraisers within one business day of the inspection. The program also eliminates phone, email and systemic message follow up notifications, treating appraisers like professionals and allowing them to do their job. I think it’s going to change the industry for the better.


are you

nominated coming in december 2013

Can you offer a couple of predictions for the industry over the next two years? I think you will see fewer AMCs and very few, if any, captive AMCs. I don’t know exactly how many AMCs there are today—hundreds I’m sure—but I see there being be far fewer in the coming years. Especially with QM on the horizon, I think it will be difficult for the captive AMCs to compete effectively. I think property values will continue to rise over the next couple of years. I also think that you are going to see a massive rebound of home equity lending.

Do you believe it is important to be involved in industry trade organizations such as the Mortgage Bankers Association (MBA) and NAMB—The Association of Mortgage Professionals? I think it’s extremely important. If you want to help drive change in the industry, you need to be part of the industry community and part of the voice of the industry. The only way to have a positive impact on what’s going to happen in the future is to work together with others to formulate those changes in ways that benefit everyone. David J. Coster is senior editor of National Mortgage Professional Magazine. He may be reached by phone at (919) 559-2171 or email

We are seeking nominations from our readers for National Mortgage Professional Magazine's "40 Under 40" feature, slated to appear in our December 2013 edition. Anyone who is under the age of 40 and has had a major impact on the industry can qualify for this feature. This could be through innovation, association participation, sales force automation, community activism, management techniques, technology or any other significant method that has influenced our industry. We would need a short, three-line bio on the nominee, along with a color photo and company contact info to complete the profile. To nominate yourself or someone else, visit

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

n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

What should folks in the mortgage industry know about StreetLinks? We really want to continually improve the industry not just from an AMC standpoint, but from an overall standpoint. We want to make it better for the appraiser by treating them like partners and ensuring they get paid more easily and more quickly. Also, from the lender’s point of view, we feel strongly that the lender should expect more from their AMCs and hold them accountable for quality and service. The lender should expect their AMCs to back them when there is a problem with the appraisal.


Do you worry about stories of AMCs and lenders still pushing appraisers and attempting to load panels with “preferred” appraisers? I don’t think anyone really wants an appraisal that is pushed or not done in a compliant manner. There is too much regulation out there and too much risk. It’s not worth trying to push an appraisal to get a value that is not supported just so that you can end up getting a buyback a month, six months, or a year down the road. Lenders want appraisals done right and done in compliance. Right means not low, not high, but supported and accurate. I think that’s what the industry is striving to do and it gets better all the time. We’ve never let people load up their own panels when utilizing our AMC services. I think that’s a questionable practice and I don’t know how you can have a long-term business doing something that you know is questionable. It’s just a matter of time before that shoe drops and you are out of business. We only assign orders based on quality, service and proximity, which really means that the best appraisers will get the most orders from StreetLinks. Any appraiser can join most AMCs’ networks but the ones with a proven track record of delivering on quality and service within a given local area will be the ones that see the most work.

What is your greatest career accomplishment to date? Without a doubt it would be helping to grow StreetLinks. When I came on board, StreetLinks was doing less than 1,000 appraisals a month. In fact, I recall some days early on where we weren’t even doing double-digit appraisals in a single day! Today, we will do 30,000 to 50,000 appraisals in any given month. Seven years ago, no one had even heard of StreetLinks and now, I don’t know if there’s anybody in the industry who hasn’t. I’m extremely proud of helping us to become a strong force in the industry and a company who is changing the industry for the better by setting the bar higher on quality, service, technology, reporting and innovation. We’re forcing other AMCs to rise to that level, and frankly, the ones that can’t, will go away.

An Uptick in

Individual MLO Licenses




252,555 226,010



220,000 200,000



180,000 160,000


140,000 120,000 MAR ’13

DEC ‘12

SEP ’12

JUN ‘12

MAR ’12

DEC ‘11

SEP ’11

JUN ‘11

MAR ’11

100,000 DEC ‘10

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


MLO Licensing Activity

Company Licenses

36,000 34,000

33,827 32,797







28,000 26,000


24,000 22,000

MAR ’13

DEC ‘12

SEP ’12

JUN ‘12

MAR ’12

DEC ‘11

SEP ’11

JUN ‘11

MAR ’11

DEC ‘10



shown “steady growth” since the first


quarter of 2012–83,262 MLO applications

licensing through the NMLS employed


were submitting during last year, and the

between one to five MLOs during the first

released on July 30 by the

first quarter of 2013 saw a new quarterly

quarter of the year. However, the num-

Conference of State Bank

high of 27,509 applications.

ber of companies sponsoring a single

By Phil Hall the






On the flip side, the CSBS found a sig-

MLO dropped year-over-year (to five

growing trend in the state licensing appli-

nificantly lower volume of new application

percent) while the number of companies

cations under the Nationwide Mortgage

activity for companies, with an average of

with more than 100 MLOs increased 16

Licensing System (NMLS) is shifting away

1,400 per quarter. The first quarter of 2013

percent during the same period.

from companies and more toward the

saw company application activity at 1,494,

Ultimately, the CSBS data suggests that

individual mortgage loan officers (MLOs).

barely higher than the 1,440 level record-

despite the tumult that continues to rock

ed in the first quarter of 2012.

the housing market, loan origination is not

During the first quarter of this year, the CSBS found the number a seven percent

One of the more interesting aspects

(by any stretch of the imagination) a dying

year-over-year increase in MLOs licensed

of the NMLS data is the geographical

profession. Indeed, the growing level of

through the NMLS. In comparison, the

spread of the license holders. The CSBS

MLOs seeking licensing suggests that

number of unique companies licensed

found that 81 percent of companies

many people view the mortgage industry

through the NMLS saw a year-over-year

holding a license in just one state. But

as a solid foundation for building a career.

decline of 0.2 percent during the same

while the number of companies with just

And even if the number of companies


one license is on the decline (12,838 in

within the industry should decline–either


the first quarter of this year, down from

through the normal cycles of mergers and

licensed declined,” said the CSBS in its

13,232 a year earlier), the number of

acquisition or through any new disruptions

first quarter data report, “the number of

companies holding more than 10 state

in the near future–the quantity of origina-

licenses held by companies increased

licenses has seen a slight increase.

tors appears to be solid. If anything, the

3.5 percent and the number of licenses

MLOs holding one license increased a

near-future looks to be a positive environ-

held by MLOs increased by 22 percent

mere three percent on a year-over-year

ment for the industry.

over the same period, indicating an over-

basis during the first quarter of 2013,

all increase in lending authority.”

while the number of MLOs holding more

Phil Hall is senior editor of National

than 10 licenses spiked by 52 percent

Mortgage Professional Magazine. He

during the same period.

may be reached by e-mail at philh@nmp-





Yes, but where is this increased lending authority centered? The CSBS found that new application activity by MLOs has

Furthermore, the CSBS found that 75

n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

Supervisors (CSBS) is any indication, the




SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n











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legendsoflending BY DAVID J. COSTER

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n



eing considered a “legend” in any pursuit in life is quite the accomplishment. It signifies more than simply longevity … it signifies extraordinary achievement as well. That is certainly true of National Mortgage Professional Magazine’s “Legends of Lending” designee for September 2013, GSF Mortgage Corporation. Formed in 1995 by two castoffs from what had been formidable financial firm ITT, Jim Guzanick and Phil Siebert laid the strong foundation for what became a legendary firm, presenting a successful role model for others to emulate. How do you spot a legendary firm? From my experience in working with and interviewing the leadership of these types of firms over the years, it is clear that they have one thing in common—they have a story to tell. Legendary firms are filled with leaders who are completely immersed in the history, value and culture of their firm. They view themselves as the keepers of the flame, with a responsibility to those who came before them, those with whom they currently work and serve, and those who will follow in their footsteps. Recently, I interviewed Chad Jampedro, GSF Mortgage’s newly appointed president. Well, interviewed is not exactly the correct term. I scheduled an interview, but what occurred was simply me listening to a flamekeeper’s story of his legendary firm. Listening to Chad, who was recruited to join GSF as an originator in 2001 shortly after graduating from college, I was able to discern the key components of the GSF story: Meeting challenges, selectivity, risk aversion, control, poise, recognizing opportunity, relationships, communication, fundamentals, getting better with time, fun and being focused on the future.

As I take you through the highlights of the GSF story, you will hear all of these components referenced.

A history of challenges met GSF’s very existence is due to the response of two men, the aforementioned Jim Guzanick and Phil Siebert, to what could have been a very negative experience. Their employer ITT was a diversified conglomerate that split into four subsidiaries in 1995. Financial services was not among the priorities going forward for ITT, and this led them to shut down their financial services division at that time. Jim and Phil had known each other since the 1980s, and despite being based in different states (Wisconsin and Illinois), the two believed that they could create and manage a successful mortgage brokerage operation together. They took a chance, but one they believed was not risky. They believed in their own abilities, in each other and felt the economy was strong enough to give their venture an excellent opportunity for success. Chad described the company’s founding this way: “Phil and Jim were essentially out of work. They had severance packages and took them, plus, I think, mortgaging their homes to come up with the capital to start GSF.” Challenges were presented to everyone in the mortgage industry in late 2007. Chad’s reflection: “We knew the ‘writing was on the wall’ in the later part of 2007. We had an investor approve us on a Monday morning, and by Tuesday afternoon, they had issued a statement saying that they were totally out of the mortgage business.” While all firms faced the liquidity crisis that unfolded in late 2007, many fewer firms had the makeup to meet it head on and come out stronger on the other side. How does Jampedro remember that time? He says, “We have always had a tight-knit group of branch managers.

We kept them in the loop as far as what decisions we were making from a company standpoint and the potential risks we were facing. We got on a conference call with the group and told them what we saw. We discussed how underwriting was going to get tighter and how every loan was going to be gone through “Our philosophy with a fine-toothed is to embrace what comb. We had to be prepared for a secis in the market ondary market that rather than what was going to be scrutinizing loans like was, and to respond never before. We as quickly as told them we would possible.” need their help because the loan doesn’t begin on the Chad Jampedro, underwriting side, it begins with originaGSF Mortgage tion.” Then he added a crucial nugget as it relates to understanding why GSF Mortgage Corporation is a legendarytype firm: “We told them we would need to embrace this change in order to make it a competitive advantage for our was careful management of their lines customers and to reassure our referral of credit, which represented their partners.” ability to stay in business. Jampedro During the crisis, GSF focused on remembers it as follows: “We were the “fundamentals of loan origina- very careful about the loans we did tion,” which Jampedro defined simply book so they would come off our lines as, “carefully originating and under- quickly and allow us to meet contract writing loans for customers who are dates and satisfy demands from our worthy of being extended credit.” But referral partners.” Chad continued, another fundamental important dur- “We originated through it. Our referral ing this liquidity-constrained period partners calmed down, our originators

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Recognizing opportunities GSF’s founders recognized an opportunity in 1995 that existed in mortgage loan origination. They recognized the advantages that come from the banker business model much earlier than most of their contemporaries. They later developed a specialized wholesale channel, and more recently, a servicing platform to capitalize on other opportunities they saw in the marketplace. Due to their geographic base in the rural and semi-rural Midwest, they developed an expertise in underwriting USDA Rural Development loans. Both through their retail branches and as a wholesaler, GSF has become a leader in the USDA lending space. Jampedro says, “In most of the areas in which we lend, USDA loans are prevalent, and every one of our underwriters is an expert in these loans.” Regarding their wholesale lending, Chad adds, “We are committed to the wholesale channel as long as it remains


In addition to the circumstances of its founding and the crisis that began in 2007, there was one additional period of significant challenge in GSF’s history. In 2003 the firm made, what was, at the time, a seemingly unusual decision—to move from the broker to banker business model. In a booming time in the mortgage industry that featured extreme competition and an array of product choices, brokers and their originators were growing market share and making considerable money. But something about the broker model didn’t fit with the philosophy of the firm’s founders. As Jampedro explains, “We made the switch from broker to banker at a time when it was not considered an advantageous business plan. As a result, we lost 30 percent of our originators.” But the change was crucial to GSF’s ability to weathering the coming industry crisis Jampedro asserts, “Phil and Jim are risk-averse, but also visionary. Control was the big reason. Not simply control over the business, but control over individual transactions.” According to Jampedro, GSF’s founders wanted a say in the decision-making on underwriting because they saw that as key to developing relationships with customers and referral partners. This control over the service that is provided becomes even more important in the future as the industry faces the transition to a purchase-orientation and rising rates. Jampedro’s forecast is this: “The market will become ultra-competitive and that competition will be very much focused on service levels. We believe superior

service levels are achieved through communication. Real estate agents want to know that originators have an open line of communication to underwriters and can pass information back and forth quickly to meet contract dates. For real estate agents, nothing is more important than meeting contract dates.” One benefit is already being seen in the new competitive environment— originators are getting better and having more fun. According to Jampedro, “It’s great to see the energy that is coming from originators as they get back to the traditional building of relationships and marketing. They are coming in with new ideas. It’s great to see everybody working in that way and having fun!”

Marketing Compliance Corner: Social Media By Michael J. Wallace Esq. There is a requirement from the Consumer Financial Protection Bureau (CFPB) that mortgage companies have a Compliance Management System (CMS). We will focus on issues specifically relating to marketing and lead programs with a CMS. We want to provide useful information to assist you in the management of risk regarding marketing & lead acquisition for your mortgage company. In January of 2013, the Federal Financial Institutions Examination Council (FFIEC) requested comment on its proposal, “Social Media: Consumer Compliance Risk Management Guidance,” in the Federal Register. The period for comments closed in March, and it appears that regulations concerning social media are coming. Social media is an exploding and fast-changing communication medium and a very powerful marketing platform. Mortgage companies and mortgage loan originators (MLOs) are embracing social media more and more each day. You can use this medium while satisfying the needs for compliance. The definition of social media is very broad and fluid. It includes email, Web sites, blogging, Facebook, LinkedIn, Twitter and other such sites. What can mortgage companies do now to reduce risk with social media? It is important that your social media policy and procedure plans be in writing. Here are a few ideas to consider in developing your plan:

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


1. Develop a library of approved content based upon social media outlets for your MLOs and other marketing programs. 2. Establish an approval process for content for posting and require preapproval of content. 3. Require disclosure by MLOs for all social media sites they are using. 4. Require all Web sites to be pre-approved before launching. 5. Develop a library of Web site templates for use by MLOs. 6. Require employees to use approved e-mail addresses connected to company and not personal e-mail accounts. 7. Indicate that periodic reviews of sites will be performed and develop a review process based upon CFPB guidelines. 8. Establish responsibility for compliance to a senior staff person. 9. If you have a wholesale channel, review the social media risk plan that your brokers/bankers have in place or recommend that they adopt one. The CFPB, as well as state regulators, will review your plan, but also determine if you are, in fact, using it. If you have a wholesale channel, you are also responsible for your brokers/bankers. Don’t just shelve the plan and dust it off when regulators come knocking on your door. Social media is a great way to interact with borrowers and an exciting technology that you need to embrace. With a little planning and thought, you will be able to manage risk while enjoying the benefits of social media. Please feel free to contact me with any questions or comments. Michael J. Wallace Esq. is president of CLIX MG. Marketing Compliance Manager (MCM) is a Web-based compliance management system for marketing and lead programs, including social media. For a 15-minute live demonstration, please visit He may be reached by phone at (727) 474-0961 or e-mail



2 0 1 3

Regional Education Highlights NAPMW’s September Schedule elcome to the National Association of Professional Mortgage Women (NAPMW), a national organization comprised of four regions broken down into 30 local groups spread across the country, from California to New York, Alaska to Texas. NAPMW was founded in Seattle, Wash. in 1964, and we will be celebrating its 50th anniversary during the association’s 2014 National Education Conference in May 2014. Come and join us … it will be a Golden Opportunity! NAPMW is a not-for-profit organization with an emphasis on education. The association’s membership includes mortgage professional men and women, as well as professionals in mortgage-related industries. NAPMW’s vision is to provide business, professional and leadership development advancing women and men in mortgage-related professions. Our defining statement is to serve all mortgage professionals who want to excel and employers who want excellence. For additional information, log onto our Web site at In addition to our annual National Education Conference, you will not want to miss out on our upcoming Regional Educational Conferences. This year, the NAPMW Central Region, in conjunction with the NAPMW Eastern Region, will hold their annual Fall Education Conference in New Orleans, La. on Sept. 19-21 Education topics will include regulatory compliance, mortgage fraud, mortgage underwriting, title company red flags and using social media to optimize professional marketing. The keynote speaker will be Sally-Ann Roberts, co-anchor of the highest rated local morning news program in Louisiana. You will not want to miss this event. NAPMW Central and Eastern Regions invite you to attend and learn more about the benefit of membership with NAPMW. This conference is being held in the heart of New Orleans at the Downtown Marriott and will offer mortgage education to help you and your companies navigates the ever-changing mortgage business. Along with some great education, be sure to find time to enjoy the sights and sounds of the host city. For more information, e-mail You can also follow the link and get more details and register online at The NAPMW Western Region is also holding their Annual Fall Education Conference on Saturday, Sept. 21 at the Hennessey’s Tavern, downtown on Freemont, in Las Vegas, Nev. There is a full-day of educational classes and also a Regional Board Meeting on the agenda. Education sessions will help you learn about applications for your electronic devices to increase business and there will be a session on if repairing credit really works. It will be a great time to network and to get to know more about the Western Region. For more information on how to register and/or the educational offers, please contact Susan James at or Pat Beebout at You can immerse yourself in a rich entertainment setting in vintage Vegas. Come join the Western Region for some great education and stay for the fun. Both conferences will provide some great educational and networking opportunities. Please take advantage of the opportunities that NAPMW has to offer by attending one of these Regional Conferences.


For more information on all NAPMW events, visit

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Selecting the Right AMC: What Lenders Need to Know By Vladimir Bien-Aimé Working with the wrong appraisal management company (AMC) can slow the appraisal process, cost you money, cause potential reporting gaps and create exposure. You have to be discriminating when deciding which AMCs to use, as many AMCs lack the qualifications to properly execute, and the lender is ultimately responsible for any errors the AMC makes. There are numerous constantly changing compliance regulations that lenders must adhere to. Now, more than ever, it is imperative to remain in compliance or risk being fined, receive buy-backs or have appraisals delayed which can kill deals. Most lenders turn to AMCs to manage what has become a much more intricate and complex process than it once was amid compliance mandates. But be careful, not all AMCs are created equal. A significant number of AMCs lack technology, expertise and stability to effectively handle the process and produce compliant appraisals. However, if you select the right AMC to work with, you’ll lower costs, reduce risk, prevent fraud, speed up turn times and sell compliant loans to the secondary market. There are number of things to consider when selecting an AMC. Below is a checklist to help guide you.

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


l Make sure the AMC is truly national and licensed in every state. Most AMCs are not. Unbeknownst to lenders, it is not uncommon for them to outsource appraisals to AMCs that are licensed in states they are not. This introduces a third party that can complicate matters. l Make sure the AMC uses sound technology to automate the appraisal process. Does the technology offer ease of communications, status updates and detailed reporting? Does the AMC offer a mobile application that appraisers can utilize in the field? Can their technology integrate with your LOS? l Make sure the AMC is Uniform Collateral Data Portal (UCDP) compliant, uploads appraisals to the UCDP in a Uniform Appraisal Dataset (UAD) compliant format, and returns a compliance certificate. l Make sure you check references and Google the AMC (the results might surprise you). All too often, lenders make the decision to work with AMCs without doing this. The AMC’s reputation is very important. For example, some are slow pay or don’t pay their appraisers, resulting in unexpected financial liability. Certain states, like Texas, require AMCs to be paid within 60 days. l Make sure the AMC has been in business and is established along with what their attrition rate is among the staff? It’s telling. Many AMCs sprang up due to an uptick in demand, and many later closed their doors with limited to no notice. l Make sure they are experienced. What is the combined experience of their management team? Do they fully understand the appraisal process? l Make sure the AMC has a robust reporting structure. If the CFPB audits you, the burden of proof is on your organization. Detailed reports will prove you are handling appraisals efficiently and compliantly. l Make sure their fees are customary and reasonable per the Dodd-Frank Act. Many overcharge you and underpay appraisers. Score the AMCs and then make an informed decision based off capability and price. Don’t just rush into an engagement and wait to see how they perform. Just because you have an AMC managing your appraisals, it doesn’t mean you have nothing to worry about–unless you selected the right AMC. Vladimir Bien-Aimé is president and chief executive officer of Global DMS. Since co-founding Global DMS in 1999, Bien-Aimé has grown the company to capture a leading share of the appraisal management segment, with a client base of over 20,000 unique users and a 100 percent retention rate among lender clients. He may be reached by phone at (877) 866-2747 or visit


The Mini-Correspondent Channel: Pros and Cons BY


everal years ago, our firm, Lenders Compliance Group, provided unique guidance to the mortgage division of a bank. The bank wished to build a special origination platform for its mortgage brokers. At that time, the prevailing regulations required disclosure of the yield spread premium (YSP), and the bank wanted to give their thirdparty originators (TPOs) an opportunity to close in their own name, with their own funds, and, among other things, by-pass disclosure of the YSP. In building the platform for the bank, many features were needed to implement these relationships in accordance with federal and state law, as well as safety and soundness metrics. This all took place at a time when a three percent fee cap on broker revenue was not even a glimmer in the eyes of legislators or regulators, and Elizabeth Warren1 had yet to promote the creation of the Consumer Financial Protection Bureau (CFPB). As Shakespeare wrote in The Tempest, “What’s past is prologue.” Since the early part of this year, many lenders are building a new origination channel. The proximate cause for the new channel is found in the Final Rule pertaining to the Ability-toRepay guidelines and the requirements of a Qualified Mortgage (Rule).2 The new channel is meant specifically for brokers who hope to bypass a three percent cap on loan amounts above $100,000, the new CFPB requirement that substantially and principally affects broker TPOs.3 The loans covered by the Rule are first lien and junior lien mortgage loans that are closed-end mortgage loans secured by a dwelling, including home purchase, refinance and home equity loans. (Excluded loans are HELOCs; Timeshares; Reverses; Bridges with a term of 12 months or less and loans to purchase a new dwelling where the consumer plans to sell another dwelling within 12 months; Vacant Lot loans; Loan Modifications not subject to the “refinancing” provisions under TILA; and Business Loans.)4



In particular, many brokers usually seek to charge fees between two and three percent per loan transaction; however, as of Jan. 10, 2014,5 any excess above three percent in total points and fees virtually guarantees that such loans, originated by brokers, will not be eligible for treatment as a Qualified Mortgage (QM). The result of the Final Rule and specifically the three percent cap is to create an incentive for many brokers to morph into a new kind of correspondent, termed the “MiniCorrespondent.” The new origination channel developed by some wholesale lenders is aptly called the “MiniCorrespondent Channel.” One of us, Jonathan Foxx, has written extensively–both in magazine articles and newsletters–about the Ability-to-Repay guidelines (ATR), the Qualified Mortgage (QM), and the Non-Qualified Mortgage (viz., which he has titled the “NQM”). For additional details and guidance, please read those publications.6 In this article, we are going to explore two interrelated issues. First, we will discuss the three percent cap, its implementation and placement within the QM framework, and the way it affects the originations of the mortgage broker. To do that, we will provide the QM framework into which the three percent cap is situated. Secondly, we will discuss the structure of and certain requirements relating to a mini-correspondent TPO. Bear in mind that this new type of TPO is taking place in a dynamic regulatory environment and loan origination market; therefore, aspects of our observations may change, due to a regulatory response, or other material factors, that pertain to originating loans through this new channel.

Two classes of qualified mortgages Essentially, the Rule creates two types of QMs, one of which provides a safe harbor from liability and another which does not provide a safe harbor, but

percent cap any compensation paid, per transaction, by a mortgage broker to an employee of the mortgage broker and compensation paid by a creditor to its loan officers. Compensation paid by a creditor to a loan originator other than an employee of the creditor (i.e., paid to a broker by a creditor on a lender paid transaction) is included in the three percent cap along with other upfront charges paid by the consumer to the creditor or its affiliates.9 Furthermore, the three percent cap includes certain fees paid to affiliates, mortgage originator compensation paid directly or indirectly by the consumer, and amounts imposed by secondary market investors and passed through to bor-

rowers to compensate for credit risk. When these “points and fees” are factored into the loan origination costs, many loans will exceed the three percent limit.10

The mini-correspondent channel Many brokers feel they are being unfairly singled out, since only their compensation is included in the three percent cap. As such, many lenders, to whom brokers are a tremendous revenue stream, have explored certain remedial options–one of which is the “MiniCorrespondent Channel.” Most Mini-Correspondent Channels are set up in a manner that the work flow is as follows: A broker obtains a

continued on page 47

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Qualified mortgage and the three percent cap As mentioned above, a QM with an APR that does not exceed the APOR thresholds receives a safe harbor from liability (i.e., compliance with the ATR guidelines). If the APOR thresholds are exceeded, this means that the loan is a higher-priced QM, and, as such, receives the rebuttable presumption of compliance. In effect, the two classes of QM constitute a prime and non-prime market, with the prime entitled to safe harbor and the non-prime entitled to a rebuttable presumption.8 But there are several challenges that a lender must overcome in order to use the safe harbor defense, one of which is the three percent cap. The Rule excludes from the points and fees three

lending license in the jurisdiction(s) in which it seeks to lend. Some states have a correspondent lenders license designed only for correspondents (i.e., Pennsylvania) and the requirements are less stringent than those states that require a correspondent lender to obtain a lenders license not limited to correspondent lending. For example, New York, does not have a correspondent lenders license, and therefore a broker who wants to be a correspondent lender would need to apply for a New York State Banker’s License. After the license is obtained, the broker (now a mini-correspondent) would enter into agreements with lenders to whom it

does offer a rebuttable presumption of compliance with the Rule. Obviously, the former is preferred, though the latter is not without its merits. The safe harbor is only available if the creditor complies with all aspects of the Rule, including, at minimum, all the ATR guidelines, and where the Annual Percentage Rate (APR) on a first lien loan must be within 1.5 percentage points of the “average prime offer rate” (APOR) as of the date the interest rate is set (viz., the APR on a junior lien must be within 3.5 percentage points of the APOR).7 If the APR threshold is exceeded, the creditor has a rebuttable presumption of compliance. The distinction between the safe harbor and rebuttable presumption is very significant. With the safe harbor, a lender obtains a conclusive presumption of compliance and may refute a claim that it violated the Rule, such as not complying with the ATR guidelines. But if the lender obtains only a rebuttable presumption of compliance, a claim can be litigated on the basis of a creditor not making a “reasonable” and “good faith” determination of the borrower’s ability to repay, irrespective of a lender’s complying fully with various aspects of the Rule, such as the ATR guidelines. The ATR test promulgated by the Rule consists of eight factors. Neither the safe harbor nor the rebuttable presumption is available to a lender solely because a loan is underwritten to the ATR test’s guidelines. The ATR factors require the lender to underwrite and verify (1) current or reasonably expected income or assets, other than the value of the dwelling, (2) current employment status (viz., if the creditor is relying on employment income), (3) monthly payment, (4) monthly payment on any “simultaneous loan” of which the creditor is (or should be) aware, (5) mortgage-related obligations, (6) current debt obligations (including alimony, palimony, and child support), (7) monthly Debtto-Income (DTI) ratio or residual income, and (8) borrower credit history. It should be noted that the ATR test itself does not place limits on points and fees.

NMP’s Inside Look T A G Q U E S T Helping Mortgage Lenders Customize Their Marketing to Reach the Right Client in Real-Time An Interview with Caleb Guillory President of TagQuest Inc.

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


aleb Guillory is president of TagQuest Inc., a leader in the direct marketing, prospect management and lead generation arenas. Based in Medford, Ore., TagQuest works with many leading financial services firms and has deep experience working with mortgage lenders to enhance their sales process. Through its data-driven, customized targeted marketing campaigns, TagQuest helps mortgage sales teams directly reach qualified prospects and close more loans. Tag Quest’s Web-based reporting capabilities, such as its Leads Tracker, allow the firm’s clients to increase control over sales and marketing efforts, improve efficiency and productivity, as well as gain control over lead tracking and account status. TagQuest’s solutions also drive sales and marketing productivity, which allows clients to lower customer acquisition costs and drive new revenue opportunities through superior customer care. To learn more about TagQuest, visit National Mortgage Professional Magazine recently sat down with Caleb Guillory to get an update on TagQuest.


Can you give our readers some background on how TagQuest was founded? TagQuest was started in 2004 as a data provider selling data lists and prescreened leads from the credit bureaus and other data files. The company evolved into a full-service marketing firm out of necessity. Once a client had the data or leads in their hands, they wanted but more importantly needed, to know how to effectively market directly to their potential customer. The mortgage industry has always been our top market and will continue to

be as we move forward. We understand the mortgage business and what our clients need to be successful, especially in a purchasedriven market. Our mortgage industry expertise and our full understanding of all compliance rules/regulations allows TagQuest to target a better prospect, with a higher conversion rate and a higher return-on-investment.

cess, it would have to be compliance. We are one of the most compliant marketing firms in the nation. The Consumer Financial Protection Bureau (CFPB) is looking closely at predatory lending and paying close attention to how mortgage lenders are marketing. Even though we are not a legal entity, we are able to help our clients get education on compliance and how it could affect them.

What are the keys to the success of TagQuest’s product offerings? Our unique value proposition is called “Customized Customer,” and has three key criteria: (1) Lasts the longest; (2) Is the easiest to work with; and (3) Is the most profitable. This approach is the backbone of our company. In addition, saving our clients time saves them money. We don’t have “widgets.” We customize each campaign for our client based on their needs. Most marketing companies have one or two products or services that they offer. We have hundreds. It does lengthen the startup process for new companies using sophisticated marketing techniques for the first time, but our clients agree that it is the right process. Being able to offer a full spectrum of marketing services allows our clients to have a one-stop marketing firm they can grow with and change their campaign as the industry changes. It eliminates the need for clients to move from one marketing company to another, which has become common for many mortgage lenders and professionals. If I had to pick a second key to our suc-

What is TagQuest’s current client focus? At this time, it seems we are working with and getting new inquiries from larger corporate companies that have national licensing. But, we have a strong niche within the mortgage industry and work with many start-ups and mid-tier lenders. We pride ourselves on being able to help everyone, no matter what type of loans they write, the channel they originate in, or location or size. What type of growth is the company experiencing? Over the last three years, we have grown by over 300 percent. Year to date in 2013, we are currently tracking at a run rate of 200 percent over the same period in 2012. We are growing rapidly and to manage that growth, we just opened a satellite office in Seattle, Wash. What exactly is driving your growth? Our laser focus on execution and our “no customer left behind” philosophy. We are not a company that just rides the waves. We do our best to create new waves. Our

newest product line includes “Live Transfer Leads” that seem to be creating quite a buzz and demand in the mortgage industry. But as far as driving force, that credit would have to go to our talented sales team. We are relentless about following up and diligent in our outbound marketing efforts. Marketing sometimes gets put on the back burner, so we stay on top of our clients ensuring they don’t miss opportunities. Can you give us a little more detail on “Live Transfer Leads?” TagQuest provides exclusive live transfer leads 24/7 to match any lead generation model our clients use. One of the frustrations with the purchase market has been how long the loans take to fund. Some firms even suggest using aged Internet leads for the purchase market. We listened to our clients and are utilizing multiple channels from outbound to inbound telemarketing and blending data lists with real-time and aged leads. Then, we call the prospect, make sure they are qualified, interested and transfer them to our clients live to speak with them—realtime marketing. For refinance live transfers, we use select criteria, such as loan amount, credit rating, loan type, interest rate and many others to pre-qualify the prospect before transferring a call. Our clients are realizing significant returns. One of our success stories was able to get seven sets of signed docs back to his office within three days of receiving his first call. In those three days, he received a total of 21 calls. That’s a 33 percent close ratio and that doesn’t take into account his pipeline and how many more loans he will fund from the program. The program is making the mortgage business fun again and delivering results.

the mini-correspondent channel previously brokered loans (hereinafter referred to as the “investor”), whereby the mini-correspondent would take the application but the investor would underwrite the loan. The loan is then closed in the name of the mini-correspondent, but usually funded by the investor’s warehouse line and immediately assigned at the table by the minicorrespondent to the investor. In the foregoing arrangement, the mini-correspondent’s participation in the loan process is almost identical to its participation when it acted as a broker. The only additional step is that the loan is closed in the name of the minicorrespondent. Nevertheless, this takes very little or no time and effort for the mini-correspondent, because the investor usually prepares the loan documents for the mini-correspondent and sets up the closing with the settlement agent just as it did when it was the lender and the mini-correspondent was a broker. These are benefits of a broker transforming itself to a mini-correspondent and are easy to see:

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n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

So, this seems like a no-brainer! Perhaps all mortgage brokers should start lining up as many mini-correspondent lending channels as possible! Right? Not so fast and maybe not at all. First, many mortgage brokers will have a hard time qualifying for a lenders license in the jurisdictions where they wish to lend. While the requirements vary from state to state, most states have higher net worth and bond requirements for correspondent lenders than brokers. A broker will not be able to move into the MiniCorrespondent Channel if it cannot meet these net worth and bonding requirements. Second, many states, such as New York, require a correspondent lender to have a warehouse line with a minimum $1 million limit even if the correspondent lender plans to have their loans funded by the investor’s warehouse line. Warehouse lines are not easy to obtain, and the requirements of warehouse lenders include many items

which a mortgage broker may not have, because these eligibility criteria are not necessary for a broker to acquire. For example, a warehouse lender will require audited financial statements and have their own net worth requirements which frequently exceed the state’s net worth requirements. Warehouse lenders also may require a certain amount of the assets to be liquid. If a correspondent lender should be lucky enough to obtain a warehouse line, it must then deal with the increased financial reporting obligations to the warehouse lender and the annual due diligence reviews conducted by a warehouse lender. If the correspondent lender then allows its loans to be funded by the investor’s warehouse line, the correspondent lender will incur non-usage fees, which add up over time. Third, as a correspondent lender, the mortgage broker has an increased level of risk, because it is now the lender, and when a loan is closed in its name the level of risk and responsibility rises. If a correspondent lender decides to fund the loan on its own warehouse line and subsequently assign the loan to the investor, the correspondent lender incurs the risk of loss if the loan cannot or will not be purchased by the investor. Other enhanced responsibilities fall upon a correspondent lender such as abiding by all of the rules pertaining to regulatory compliance (i.e., requirement of Quality Control Audits, responsibility for adhering to high cost limits, and so forth). Fourth, correspondent lenders have further requirements when it comes to FHA loans. A correspondent lender needs to be approved as an FHA NonSupervised Mortgagee. In order to become an FHA Non-Supervised Mortgagee all state licensing requirements must be fulfilled. FHA requires correspondents to have an adjusted net worth of at least $63,000 plus an additional $25,000 for each registered branch. In addition, correspondent lenders must have 20 percent of their adjusted net worth in liquid assets (assets not restricted or reserved for payment of anything other than current liabilities) which do not include lines of credit or loans payable. A NonSupervised Correspondent Mortgagee must select a Sponsor (viz., the investor in the foregoing example) who must be a Direct Endorsement (DE) mortgagee and register such Sponsor in FHA Connection. There are many other FHA requirements as further set forth in FHA Handbooks and Mortgagee Letters that apply to correspondent lenders and not brokers.11 Thus, correspondent lending is not for everyone. This option must be care-

(1) No more worrying about the three percent cap as fees paid by a lender to its loan officers are not included. (2) The lender paid compensation does not need to be included on Box 1 of the GFE. (3) The mini-correspondent could receive fees from a borrower (on a borrower paid transaction) and also from the investor on the sale of a loan. (4) Many anti-steering concerns are eliminated as the mini-correspondent is not a lender and not a broker.

continued from page 45

Work-Life By Eric Petersen oday, many companies are coming to the conclusion that there are more to company benefits than just the usual perks. In an ever-changing, competitive world of adding top talent, culture plays a big role. During the recruiting, hiring and retaining process, it comes down to culture. Although culture can encompass many aspects, one that seems to stand out as an overlooked fringe benefit would be work-life balance. In some cases, the individual candidate is not even aware that this is a component to consider when evaluating companies. A recent Accenture survey of 4,100 business executives, from medium- to large-sized organizations, revealed work-life balance—above compensation, recognition and autonomy—was the determining factor in the overall success of their careers. The results also found half of those surveyed had turned down job offers due to how the job would impact their life. The term itself, work-life balance, will mean different things to different people. Some may define this to be a correlation of lifestyle and career, or what I want to do versus what I need to do. It is not just a matter of companies saying they offer this, but they need to know how it is defined by the individual. Only then will a company have the right model match culture for that particular employee or candidate. At Hammerhouse, we have assisted many candidates in evaluating concerns about their current work environment, including work-life balance, which may not be consistent with their personal needs. That’s when we put our model-match methodology to work using our six core components. We break down each individual’s wants and needs and match them with a company that offers those facets. We’ve been fortunate to help many professionals find a more appropriate fit and a greater level of overall career and personal satisfaction. Recently, we had the opportunity to work with a client who has been in the mortgage origination business for more than 20 years. This elite top producer had been working under the same management team for more than 15 years, and was not only successful, but genuinely liked the individuals with whom he was working. At a certain point, however, he was faced with serious and unexpected health issues that required major surgery


SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


e Balance: Find Your Model-Match Hammerhouse, and when I needed them, they were there. This was all based upon Hammerhouse listening and finding the right model-match.” He adds, “It turned out to be a brilliant move, for my career, my personal life, my financial life and my health. It’s the best company I have ever worked for. I’m very grateful.”

Regardless of the type of work-life balance challenges presented, finding the right model-match for both parties is a win-win situation. Employees are happier, have increased job satisfaction, and achieve greater success; while companies can target, attract and retain top talent, and improve the organization’s success over the long-term.

Eric Petersen is a managing partner at Hammerhouse LLC, an expanding national recruiting and strategic growth firm for the financial services industry with mortgage sales and leadership placement at its core. He may be reached by phone at (949) 525-9408 or e-mail


n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

and had him laid up in bed for two months. “You start thinking about how to make your life better, and I uncovered what I thought was important and very specifically wanted to find a new company.” It was in that moment he decided there had to be a better way. He was internalizing a lot of stress and that was creating his health issues. He needed to make a change and find a company where he would not be faced with the same issues that were causing him such a high level of stress. Despite his incredible success in the past, and fondness for his co-workers, he was convinced a change in employer was necessary. He needed to find a better work-life balance. “I contacted Hammerhouse and specifically told them what I was looking for and they heard me loud and clear.” This is where the model-matching process began. We identified what the client was seeking: A national firm, not a small banker; high values and morals that were consistent with his own; a company geared towards purchase business, a strong operations team, effective marketing and flexibility. After understanding the candidate’s initial needs and wants, we moved forward with our objective consultation. We explored the unique value propositions of the companies that we initially believed were well suited to what our candidate had to offer. This process allowed all parties to evaluate the existence of a model-match. In the case of our top producer, we found a firm that we believed presented a high-potential match and shared the specifics of the company’s attributes. Our candidate liked what he heard and felt the company offered the work-life balance he was seeking. Both parties determined they wanted to move forward with an in-person meeting at the company headquarters. We prepared both parties by discussing, in detail, questions that needed to be addressed in order to determine the full impact of the model-match. Our candidate’s meeting was a success and both parties determined they could develop a mutually beneficial relationship. Our candidate was offered, and accepted, a position with the new company. “When all was said and done, I went with this company because of their high values and morals. I went with what my gut told me.” Our client had successfully found not only the work-life balance he had been seeking, but also additional benefits that were also uncovered during the discovery process. Although he had never used a recruiter before, our client says, “I developed a relationship with

Who Has Access to Your Borrower’s Data?

heard on the street

continued from page 26

Consumer privacy and the protection of personal consumer financial information

By Andrew Liput

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


The Consumer Financial Protection Bureau (CFPB) now has rule-writing authority and enforcement authority over financial institutions, and this includes interpreting how various federal data privacy and protection statues will be enforced in the mortgage industry. As a mortgage lender, bank, credit union or broker shop you need to know what these statutes and rules mean for your business. The Gramm-Leach-Bliley Act (GLBA) requires financial-related institutions to safeguard sensitive data. Because you collect personal information from customers, including names, addresses and phone numbers; bank and credit card account numbers; income and credit histories; and Social Security Numbers, the GLBA requires that you ensure the security and confidentiality of this type of information. As part of the implementation of the GLBA, the Federal Trade Commission (FTC) issued the Safeguards Rule, which requires financial institutions under FTC jurisdiction to have measures in place to keep customer information secure. According to the Safeguards Rule, financial institutions must develop a written information security plan that describes their program to protect customer information. All programs must be appropriate to the financial institution's size and complexity, the nature and scope of its activities, and the sensitivity of the customer information at issue. Covered financial institutions must identify and assess risks to customer information, design a safeguards program, and detail the plans to monitor it; as well as select appropriate service providers and require them (by contract) to implement the safeguards The Federal Fair Credit Reporting Act (FCRA) governs personal information included in consumer reports. The main “security” feature of FCRA is that the law limits access to certain “permissible purposes,” such as credit, employment, insurance underwriting and rental history. Many companies covered by FCRA may also be “financial institutions” under GLBA. Amendments were made to the FCRA by the Fair and Accurate Credit Transactions Act of 2003 (FACTA). As a safeguard against identity theft, FCRA and FACTA require any company with access to a consumer’s credit information to manage its access, use and disposal to protect identity theft and improper use. In the end, data security rules under GLBA, CFPB, FCRA, FACTA, and Dodd-Frank mandate that you know who has access to borrower information, and manage the risk of loss, theft and other harm that may occur. Settlement agents (lawyers, escrow agents, title agents and even notaries) routinely access (and sometimes retain for their records) data regarding a borrower’s name, address, Social Security Number, bank account information, employment history, assets, income, all which are clearly visible on the 1003 and HUD-1 at closing. Various other documents at the closing table may reveal even more information, such as credit issues, family relationships (children’s names, divorce, separation, civil unions, etc.) Can you vouch for the credibility of these individuals when it comes to such personally sensitive data? Better yet, if there is a breach or loss and a consumer is harmed, will you be able to demonstrate that you took appropriate steps to vet these people before you provided them such access? Just in case you were wondering, the Closing Protection Letter (CPL) does not cover you in the event that a settlement agent improperly accesses and uses a borrower’s personal information. However, independent vetting and monitoring can provide the comfort factor you need to ensure you are taking reasonable steps to meet data security and privacy rules. Andrew Liput is president and CEO of Secure Settlements Inc., a company he founded after nearly 10 years studying the problem of escrow and closing fraud and the uninsured risks associated with mortgage closing professionals. He may be reached by e-mail at


Re-Creating the American Dream of Homeownership RIMARQ, a private capital market company, is looking to the concept of online capital formation to give homeowners a better stake in the housing market. By “uniting homebuyers and homeowners with investors in a marketplace for the trade of residential real estate equity,” the company aims to bring measurable benefits to homebuyers, homeowners, investors, lenders and brokers. “We believe the current method of housing finance has created systemic risk, and there is a need to rethink the level of debt being employed,” said PRIMARQ Founder and CEO Steve Cinelli. “Equity funds provided by investors, which share both the upside and downside of property price movement and complement homebuyers’ own contribution, create a more sustainable homeownership structure.” The way the PRIMARQ five-step structure works:


1. A residential property for purchase or refinance is submitted to the PRIMARQ exchange. PRIMARQ reviews the projected performance of the property using third-party data, and assesses the mortgage level and credit quality of the homebuyer. Assuming the criteria are met, the investment is posted as an offering to the investor side of the market. 2. Investors submit bids, designated as a “Q” position, to participate in the investment (1Q = $10,000 purchase equity holding). Investors then submit funds to escrow upon acceptance of that bid. 3. Funds are present and financial contingencies associated with PRIMARQ are met. Other elements of the home financing (buyer downpayment and loan) are simultaneously coordinated, and the mortgage loan is approved based on lower loan-to-value (LTV) and debt-to-income (DTI) ratios, due to the incremental investor equity. 4. Escrow and closing honors the current methodology and schedule and the homeowner enjoys full occupancy and improvement rights. 5. Investors are seeking appreciation in the property and need not wait until the property is sold or refinanced but may monetize positions through access to the secondary market for Q trading. “Lending at the current levels against a volatile and illiquid asset defies basic credit principles,” said Cinelli. “We have learned that markets rise and fall, though lenders continue to behave as though values will only move in one direction. Lenders are not intended to take price risk, and them doing so precipitated today’s housing bubble rubble.” Only time will tell before new models of finance and capital formation, spearheaded by PRIMARQ, will excel in the volatile housing finance marketplace. But until proven otherwise, PRIMARQ’s online private equity concept aspires to kickstart the American dream of homeownership into a new reality. “Not only do we believe our approach brings prudence to the homeowner’s financing, but we enable investors to participate in a new way in one of our largest asset classes, passively, transparently and on an informed basis,” said Cinelli.

heard on the street

continued from page 26

mortgage pipeline and an audit trail for better tracking through the lock process,” said Matt Thoman, LoanLogics’ product manager for Origination Technologies. In addition, LoanLogics has enhanced the pricing form within LoanDecisions to capture additional loan scenario detail. A checkbox has been added for the HomeStyle Renovation Mortgage that allows a user to view only HomeStyle pricing and eligibility results. Administrators can also use this new loan scenario characteristic to create custom adjusters, margins and guideline rejects through LoanDecisions Advanced Margins settings.

VirPack Relocates to Accommodate Corporate Growth

Mortgage Professionals to Watch

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Your turn


National Mortgage Professional Magazine invites its readers to submit l Premier Nationwide Lending (PNL) has any information, events, passages, named John H.P. Hudson as its new promotions, personal or professional occurrences that seem appropriate vice president of regulatory affairs. and/or other pertinent data to the attention of:

l Russ Warner has joined Affinity Lending Solutions as senior vice president. l DocMagic Inc. has announced that Lisa Rose has joined the company as its

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.

800.362.2599 ww

n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

l Erik Wind has returned to GeoData Plus as the company’s president.


Responding to growth in its customer base for VirPack’s document management and eDelivery solutions, the company has relocated its corporate headquarters into a larger office space in McLean, Va. The new office houses VirPack’s recently expanded team and includes space for a new training center, dedicated to customer training. In the past year VirPack’s staff has grown 22 percent to support a significant increase in its customer base. “The steady growth of our organization, driven by the increased demand for our industry leading paperless solutions, has given us the opportunity to expand our offices,” said Michael Coar, president and CEO. “Our expanded space accommodates additional VirPack team members while also providing additional capacity for future growth, including the launch of our customer training facility.”

newest investor compliance specialist. l GSF Mortgage Corporation has added long-time mortgage professional Mike Morrison to the firm’s Raleigh, N.C. branch. l Equity Loans LLC announced the additions of David Carr as corporate processing manager and Teresa Ciccolella as controller, and the promotion of Alison Raymond to assistant vice president of operations. l Susan Blackmore was named branch manager of Mortgage Master’s new retail branch location in Vienna, Va. l 360 Mortgage Group has announced the hiring of six new wholesale account executives: Greg Ashcraft, Lael Fisz, Jeff Hoge, Evelina Escalante-King, John Knecht, and Mike Kuhn. l Hammerhouse LLC has announced that it has hired Jason Kutcher and Eric Pennell as strategic growth partners, and Scott Hollo as junior recruiter to support client growth and expand the company’s national mortgage sales recruiting infrastructure. l Norcom Mortgage has announced the grand opening of its new Fairfield, Conn. branch, and Manny Gomes has been named branch manager of the new Fairfield branch. l The Wholesale Lending Division of Carrington Mortgage Services LLC has announced the appointment of industry veteran Rey Maninang to senior vice president and national sales director for the company’s wholesale channel. Carrington Holding Company LLC has also announced that Christopher Whalen, executive vice president and managing director of Carrington Investment Services, has been named EVP of Carrington. l NXTLoan | First American Mortgage Trust has announced that Rob Philion has joined the company as the new director of sales/national sales manager. l Boston National Title Agency has announced that Steve Megson has joined the company as senior vice president, director of national sales.

False Hope for Mortgage Bankers in Appeals Court Win? 52

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n

By Kimberly Priest Johnson These are heady times for a vast majority of the mortgage banking industry, following a recent federal appeals court ruling that mortgage loan officers shouldn’t be classified as hourly employees. The appellate victory for the Mortgage Bankers Association (MBA) essentially reversed a 2010 policy change enacted by the U.S. Department of Labor (DOL) to classify mortgage loan officers as hourly employees. The recent decision issued by the U.S. Court of Appeals for the District of Columbia Circuit came as welcome news to most MBA members, who have anxiously awaited the opportunity to return to their longtime system of compensating loan officers based on the number or volume of loans closed. Many industry veterans also view the ruling as insulation against liability from loan officers’ claims under the Fair Labor Standards Act (FLSA). But a closer inspection of the court’s decision in Mortgage Bankers Association v. Harris, No. 12-5246, is required for those mortgage bankers who believe now is the time to move back into their pre-2010 business model. In fact, as you review the case, here are three things you and your business need to consider.

Plaintiffs’ lawyers are still interested The real impact of the 2010 DOL policy change, which was issued under an Administrative Interpretation, was to put loan officers and the mortgage industry on the radar of the nation’s plaintiffs’ lawyers. These resourceful attorneys are unlikely to simply turn their attention elsewhere and forget about the industry and its practices. Indeed, the recent court decision inevitably will draw attention to some non-compliance matters that garnered little attention prior to 2010. For example, historically, some mortgage lenders treated loan officers as though a blanket administrative exemption was appropriate based simply on job title. Others assessed the duties performed by the loan officers and accordingly classified them as exempt. Even fewer assessed the compensation structure and ensured that the salary component of the exemption also was satisfied. The legal reality is that the administrative exemption has a two-fold requirement: 1. The duties prong; and 2. The minimum salary requirement. Failure to satisfy both prongs still requires that loan officers be paid at least the federal minimum wage for all hours worked and overtime pay equal to time-and-a-half the regular rate of pay for all hours worked beyond 40 hours a week.

The duties prong To qualify for the administrative exemption, a loan officer’s primary duty must be: 1. The performance of office or nonmanual work directly related to the management or general business operations of the employer or the employer’s customers. 2. Primary duties must include the exercise of discretion and independent judgment with respect to matters of significance. The regulations and the jurisprudence interpreting the FLSA have attached particular meaning to “primary duty,” “directly related to the management or general business operations of the employer,” and “exercise of discretion and independent judgment.” For example, employers must conduct a case-by-case assessment of a loan officer’s job duties to determine whether the administrative exemption applies. Job titles do not determine exempt status. When employers conduct the individualized inquiry, some loan officers may very well fail to satisfy the duties prong of the administrative exemption test.

The salary requirement Administratively exempt loan officers also must be guaranteed and paid at least $455 every week ($23,600 per year) on a “salary basis.” Obviously, this guaranteed salary

amount need not be the entire compensation received, and loan officers can be paid on a commission basis above and beyond the weekly salary, but the $455 weekly “guaranteed minimum” must be paid for any work week during which an employee performs work, regardless of the quality or quantity of the work, the number of days or hours worked, and whether the employer actually has work for the employee to complete. One exception would be if an employee performs no work at all during a particular workweek, but the permissible deductions from the guaranteed minimum are few and far between. So, as the mortgage industry continues to rejoice—indeed, the appeals court has foreclosed the DOL’s authority to make such abrupt upheavals in the law such as the 2010 Administrative Interpretation—and employers venture to retrace their steps on roads once traveled, they should proceed with caution with eyes opened wide for the legal traps that will snag the unwary. Kimberly Priest Johnson is founder of Dallas-based Priest Johnson PLLC. Priest Johnson and her firm regularly represent companies and individuals in the mortgage industry in courtroom litigation, regulatory compliance matters, Fair Labor Standards Act claims, and other industry issues. She may be reached by phone at (214) 720-4006 or e-mail

the mini-correspondent channel fully explored by a mortgage broker before a decision is made to enter a lender’s “Mini-Correspondent Channel.” It is certainly not akin to brokering loans by another, different name. Brokers considering this option need to know exactly what they are getting into before they go down this road.

Mini-correspondents and the CFPB

Conclusion We have provided highlights of many issues a broker must consider when evaluating whether to become a minicorrespondent, a branch of a lender or remain a broker. There are a variety of opinions on this issue floating around the mortgage industry. This is certainly not a ‘one-size-fits-all’ scenario. While the individual decision on which way to go hinges on a variety of factors subjective to the specific broker, there is one overriding objective theme which pertains to all brokers: You must do your homework and leave no stone unturned when making this decision. To the mortgage broker contemplating becoming a mini-correspondent, we say this: Do your due diligence, investigate the requirements of the states where you do business, investigate the lenders and their motives when persuading you to become a mini-correspondent, but also know everything about a lender before you become its branch. A rash decision will likely lead to regrets and, given everything the mortgage industry has faced the last few years, regretting and unwinding a decision to become a mini-correspondent or branch is not something you want to add to the “headache pile.” If you take one thing from this article let it be the realization that this is a time when all mortgage brokers should evaluate their business plans, continued on page 74

AGENDA Thursday, October 17, 2013 NAMB/ NMLS Approved Education will be provided from 8:30 am to 5:00 pm with Reception to follow. Tradeshow will be open the whole time. Check out the website to sign up for the education.


Convention set up: Breakfast will be served from 8:00 to 9:00 Exhibitors set up by 9:00 am on October 17 Education for those attending will be from 8:30 to 11:30 Lunch from 11:30 to 12:15 (Tradeshow open) Exhibitor Showcase talks from 12:15 to 12:45 Education from 12:45 to 5:00 5:00 to 6:30 tradeshow open/ Reception and Association update Food and Drink will be provided

Member Exhibitor Costs: FREE WITH MEMBERSHIP Advertising on the flyers; booth table; meet and greet all day long; speaking at the lunch; food and drink provided

Lender Non-Member Exhibitor Costs: $275 advertising on the flyers; table for all-day event; food and drink provided

Industry Non-Member Exhibitor Costs: This is for anyone that in a housing related business; home inspector, handyman, carpet cleaning, air duct cleaning, heating and cooling industries, roofing, siding, etc. $50 advertising on the flyers; table for all-day event; food and drink provided

Add Membership for additional $ 200 Registration DEADLINE: October 9th, 2013 Register Online at: 4949 Weston Parkway Ste 165-111, West Des Moines, IA 50266 E-mail: Phone: 800-462-0077 Fax: 866-931-7542

n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

l A branch can obtain the support needed to get the training and education required by the CFPB. It comes as no surprise that brokers have had trouble keeping up with the training requirements. Relying upon a lender for this need would eliminate this burden to a broker. l A branch would certainly obtain better support in the underwriting department which would turn into

quicker approvals. The underwriting of broker and correspondent lender files often sit behind files from the lender’s loan officers. Quick approvals lead to happy borrowers and happy borrowers lead to referrals. l A branch would usually have far greater compliance support than a broker. Like training and education, brokers have struggled to keep up with all of the compliance requirements imposed upon them in recent years. Brokers obtain assistance with this key aspect of mortgage lending when they become a branch as they have the lender’s compliance department or compliance officer as a direct resource. l A branch would have far more enhanced technology and software programs available to it as a branch than it did as a broker. There are countless software programs to assist mortgage loan originators and a broker usually does not have the financial wherewithal to make use of all the software necessary to make their lives earlier. This often changes when a broker becomes a branch.

Before concluding please consider these final points. Has anyone given consideration as to what the CFPB might take as a position when a tremendous amount of mortgage brokers transform themselves into mini-correspondents with the primary purpose of avoiding QM’s three percent points and fees cap? We surely have, and so have many others. The CFPB has not commented on this issue, but you bet they will at some point down the road. It is possible that the CFPB will take no issue with mortgage brokers becoming mini-correspondents! After all, this has been done for years, and when done correctly, it has been a valuable intermediary step for a brokerage firm that wishes to transition from broker to lender. But would it shock anyone if the CFPB took issue with the mini-correspondent channel and tried to eliminate it to the extent it is used to avoid the three percent points and fees cap? This would not be difficult. The CFPB could modify the exception to loan originators of the entity that makes the credit decision or take any number of other actions to prevent the mini-correspondent channel from growing solely for the benefit of avoiding the three percent cap. For now, we have to wait and see what their position on mini-correspondents will be. Lastly, there is another option for a mortgage broker whose business model is disrupted by the three percent point and fees cap under QM. Such a broker can find a lender whom it trusts and has had a relationship in the past, seeking to become a branch of this lender. Many brokers have found that starting a branch is a beneficial decision to their business. Some well-known benefits of a broker becoming a branch of a lender are as follows:

continued from page 47

“… the goal of continuing education is uniform throughout the country: Equip mortgage loan originators with the necessary information to most effectively and efficiently provide mortgage services.”

Continuing Education Requirements More than compliance … a path to success By Barbara Scalera

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


There is one school of thought that says continuing education requirements are here and mortgage originators have to live with it. There’s another that says the regulation and oversight are too much, and it’s time to leave the industry. And finally, there’s the school of thought that says mandatory education is not only necessary, it’s great for the industry and should be embraced. Considering where

the mortgage industry has been, this last option seems the best by far. The number of hours vary, depending on the state, but the goal of continuing education is uniform throughout the country: Equip mortgage loan originators with the necessary information to most effectively and efficiently provide mortgage services. The time spent in class will help eliminate problems and issues

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throughout the year. There’s no doubt that some mortgage originators view continuing education as a necessary evil. They are the same ones who will be cramming at the end of the year to squeeze in their continuing education classes, like cars lined up at a motor vehicle inspection station on the last day of the month. This “compliance” mentality toward continuing education is great news for the portion of mortgage originators who view yearly coursework as a way to improve themselves and separate themselves from the competition. Remember the industry pre2008, when just about anyone could hang a shingle and claim they were mortgage loan officers? Recall how difficult that made it for the experienced MLOs who actually had expertise and training, knew the ins and outs, and could expertly guide a new homebuyer through the maze of the mortgage process. The real estate bubble and the new licensing requirements effectively took care of those who were less professional, leaving a leaner and smarter group of mortgage professionals to improve the industry’s reputation, loan by loan. The annual continuing education requirements may have the same effect on the unmotivated, and sometimes incompetent, loan originators and they may drop out of the industry because of the hassle. And as previously noted, there are some originators who will take the courses, but do so begrudgingly, and not really become a more professional MLO because of the additional education.

Continuing education benefits Mortgage loan officers may think they have heard or seen just about every scenario, but the truth is that, number one, they haven’t; and number two, the mortgage industry is in a state of flux as the rules and regulations are constantly changing based on the events of 2008-2009. When faced with a unique situation, asking a colleague, company executive or a compliance officer is better than providing an educated guess, but not as good as knowing the answer yourself. Prospects and customers are typically impressed when you are educated, confident and can answer the tough questions.

Even with continuing education, it’s not unusual for mortgage loan originators to have questions, especially if they’ve heard or read conflicting information. The mandatory continuing education courses are a great venue to have these questions answered, even if the course work doesn’t address them directly. Most expert instructors can provide their perspective at any time during class. Additionally, a proactive approach to continuing education results in: l Better comprehension of federal and state laws l Better understanding of the rules and regulations still being formulated, and the compliance issues associated with specific loans l Better understanding of the government agencies tasked with making and implementing these rules l Increased chance that clients and prospects will view you has a true expert in the industry, and therefore, confidently refer you to others It’s important to note that potential customers are coming in more educated than in the past. There is an abundance of personal finance and mortgage-related information available on the Web which allows these prospects to know more about the mortgage process and ask more informed questions.

What to look for in a continuing education program From the outside, schools that offer continuing education courses can look very similar. They are all approved through the National Mortgage Licensing System (NMLS) after all. But there are key factors to consider: l Are the instructors working in the industry? Look for instructors who work within the industry and are not just “book-trained” in mortgage issues. Because they work in the mortgage and real estate industries every day, these instructors are able to integrate instruction on the new rules with practical applications and examples from their real world experience. Just as impor-

tantly, they can explain how changes in rules and regulations translate into the day to day work and mortgage origination process. l Does the continuing education facility travel? Some continuing education facilities can mobilize their coursework, and travel to either a mortgage firm’s office or a nearby hotel or conference center to make it more convenient for the loan officers to attend. Because licensing is relatively new, and getting approved to offer coursework is an arduous process, the number of approved course providers can be geographically limited. In New Jersey, for instance, there are less than 10 facilities throughout the state. l Do they offer courses in multiple states out of their facility? In many areas, such as the greater New York metropolitan area, it’s not unusual for

referral business to come from another state. It’s important for many loan officers to be licensed in multiple states– and much easier for them to keep up with continuing education if they can do so in one primary facility. l Are courses offered online as well as live? Once frowned upon in the education field, online and Webinarbased courses are now an everyday part of many educational systems. It’s not for everyone, but it’s good to know that your provider can deliver courses in a variety of formats.

Hot continuing education topics There is no shortage of new topics and updates to be addressed. Some could even argue that the current mandated federal and state continuing education hours are not enough. Here are some of the topics being addressed by the latest coursework

l Federal laws, including the Dodd-Frank Act, anti-discrimination, Truth-inLending-Act (TILA), and Real Estate Settlement and Procedures Act (RESPA) l Terms and conditions of Qualified Mortgages (QMs) as determined by the Consumer Financial Protection Bureau (CFPB) l Requirements of the Home Ownership and Equity Protection Act (HOEPA) amendments TILA that require a creditor to verify and document a borrower’s ability-to-repay a home mortgage loan l RESPA and the updated foreclosure requirements of RESPA amendments. l Differentiating between loan-tovalue and loan-to-cost l State-specific rules, regulations and programs (such as differentiating between civil and criminal usury in New York, and identifying the Housing Purchase and the Owner-occupied Residential Mortgage Programs in Pennsylvania)

Conclusion To say the least, the mortgage industry has had many changes since 2008. Even if continuing education wasn’t mandatory, it would be highly recommended. It’s a nobrainer when considering the factors that separate the best MLOs from the rest. Primary factors are motivation; knowledge/expertise and experience. It’s impossible to teach motivation or to create experience overnight. That leaves knowledge/expertise as the only factor that differentiates MLOs in the short term. How do they improve their knowledge and expertise? Two words … Continuing education. Barbara Scalera is the licensing and compliance officer for Residential Home Funding, a licensed mortgage banker in the mid-Atlantic Region, headquartered in White Plains, N.Y., with corporate offices in Parsippany, N.J. She may be reached by phone at (973) 577-7008, ext 245 or e-mail


n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

“By looking at the CFPB Supervision and Exam Manual, we can find clues to what they are looking for in their exams.”

A Game of Clue: What is Considered “Required” Training by the CFPB? By Ginger Bell

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


Remember the game of Clue? Through deductive reasoning, players must figure out which character, weapon and location are in the secret file. To do this, players must uncover what cards are in other players’ hands by making more and more accusations. Once a player knows what cards the other players are holding, they will know what cards are in the secret file. It’s a great game for those who enjoy reasoning and thinking things out. Determining what compliance training a company must provide to their staff these days is much like playing the game of Clue. You are provided with the game board to play on by the Consumer Financial Protection Bureau (CFPB), the CFPB Supervision and Examination Manual. From the Exam Manual, we must read through the various sections to find clues to determine exactly what

compliance training should be included in a company’s compliance management system the CFPB expects companies to have in place. Gone are the days where a company can leave training up to the individual loan originator to complete on an annual basis. It is not enough for a company to merely require NMLS continuing education for their originators. Now, a company must look for and provide compliance training for their entire staff, including training for compliance professionals, managers, processors, originators, underwriters, closers, funders, pre-purchase reviewers, etc.

the Exam Manual for the word “training.” More than 120 times, the word “training” is noted in the CFPB Supervision and Examination Manual, yet you will not find a single list of what training is specifically required for a company to have in place. This leaves many companies wondering, “What training am I required to provide to my staff?” There is no magical list that exists to tell companies what training they should be providing to their staff. The CFPB expects that, as a company, you are providing compliance training to the appropriate personnel based upon their job function. This means that you are providing training on the federal consumer financial laws which are related to the job that they perform.

Clue number two: Details of examination procedures

The CFPB Supervision and Examination Manual, details what the CFPB is reviewing in a company’s training program in Part III of their We find our first clue when we search examination procedures. This is the

Clue number one: The importance of training to the CFPB

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portion of the exam where the examiners will provide comments regarding what they have reviewed during the exam. This is a great place to start when developing your company’s compliance management system and also a good clue as to what your company should be developing for your training program. It also tells us how important training is to the CFPB because it is listed as part three out of six parts that they provide in their compliance management review.

Table 1—CFPB Supervision and Examination Guide— Page 891 III. Examination Procedures— Training To evaluate the quality of the entity’s compliance training program, examiners should: 1. Request and review the schedule, record of completion, and materials for recent compliance training of board members and executive officers. 2. Determine the involvement of compliance officer(s) in selecting, reviewing, or delivering training content. 3. Request and review policies, standards, schedules, and records of completion for compliance-specific training of compliance professionals, managers, and staff, and documents demonstrating that service providers who have consumer contact or compliance responsibilities are appropriately trained. 4. Request and review samples of the content of training materials and comprehension tests, including training related to fair lending, new regulatory requirements, new products or channels of distribution, and marketing (including scripts). 5. Request and review training developed as a result of management commitments to address

Although the CFPB does not provide us with a written list of what training they want to see in a company’s training program, we can look to the examination objectives they provide for clues regarding what they are looking for.

Table 3—CFPB Supervision and Examination Guide— Examination Objectives— Page 40 Training—Examination Objectives Education of an entity’s board of directors, management, and staff is essential to maintaining an effective compliance program. Board members 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. Requirements for compliance with Federal consumer financial laws, including prohibitions against unlawful discrimination and unfair, deceptive, and abusive acts and practices, should be incorporated into training for all relevant officers and employees, including audit personnel. Examiners should seek to determine whether: 1. 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. 2. Training is consistent with policies and procedures and designed to reinforce those policies and procedures. 3. 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.

Let’s look for the first clue … “Board members should receive sufficient information to enable them to understand the entity’s responsibilities and the com-

mensurate resource requirements.” This means that all individuals who are in an ownership position or executive level receive to help them make the decisions they need to make for the company. Even if you are an individual broker owner you need to complete compliance training to help you effectively manage the regulatory requirements of your business. Let’s look for the second clue … “Management and staff should receive specific, comprehensive training that reinforces and helps implement written policies and procedures.” This means that everyone in a company, from the managers to the processors complete training that reinforces the policies and procedures a company has in place. So, if you have a policy in place for how you handle consumer com-

plaints then you should be providing training that reinforces that policy and if there are any problems which arise or changes you need to make to your consumer complaint policy that you must provide updated training to your staff to make sure they know and understand the changes. Let’s look for the third clue … “Requirements for compliance with Federal consumer financial laws, including prohibitions against unlawful discrimination and unfair, deceptive, and abusive acts and practices, should be incorporated into training for all relevant officers and employees, including audit personnel.” This means that you; as a company, should be training your staff on all of continued on page 58


n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

Table 2—CFPB Supervision and Examination Guide— Page 892 Conclusion—Training Draw preliminary conclusions about the strength, adequacy, or weakness of the compliance training program. Consider whether: a. Compliance training is current, complete, directed to appropriate individuals based on their roles; b. Training is effective, and commensurate with the size of the entity and nature and risks to consumers presented by its activities; c. Training is consistent with policies and procedures and designed to reinforce those policies and procedures; and d. Compliance professionals have access to training that is necessary to administer a compliance program. Confirm the preliminary conclusions through a riskfocused review of the compliance training program.

Clue Number Three— Examination Objectives

monitoring, audit, or examination findings and recommendations or issues raised in consumer complaints and inquiries. 6. Determine whether the program is designed to provide training about the specific regulatory requirements relevant to the functions of particular positions for loan officers, such as the Truth-in-Lending Act (TILA) and the Equal Credit Opportunity Act (ECOA). 7. 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. 8. 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.

a game of clue

continued from page 57

the federal consumer financial laws, including Fair Lending, Fair Housing, ECOA, UDAAP, MAPs, SAFE Act, TILA, RESPA, GLBA, HMDA, etc. which relates to the job they perform. Want the full list of required training? Sorry, it doesnâ&#x20AC;&#x2122;t exist. However; if we move on to Clue Number Four, we can get a better idea of what that training that list may include.

Clue number four: CFPB Consumer Financial Protection regulations If we look to the list of consumer financial protection regulations on the CFPB website we can get a better idea of what they are looking for in a training program. These are all of the regula-

tions which the CFPB refers to in their Supervision and Exam Manual and what they expect; along with your policies, procedures and processes that you train your staff on.

Table 4â&#x20AC;&#x201D;CFPB Consumer Financial Protection Regulations Regulation B: Equal Credit Opportunity Regulation C: Home Mortgage Disclosure Regulation D: Alternative Mortgage Parity Act Regulation E: Electronic Fund Transfers

Regulation F: Fair Debt Collection Practices Act Regulation G: SAFE Mortgage Licensing Actâ&#x20AC;&#x201D;Federal Registration of Residential Mortgage Loan Originators Regulation H: SAFE Mortgage Licensing Actâ&#x20AC;&#x201D;State Compliance and Bureau Registration System Regulation I: Disclosure Requirements for Depository Institutions Lacking Federal Deposit Insurance Regulation J: Land Registration Regulation K: Purchasersâ&#x20AC;&#x2122; Revocation Rights, Sales Practices and Standards Regulation L: Special Rules of Practice Regulation M: Consumer Leasing Regulation N: Mortgage Acts and

Practicesâ&#x20AC;&#x201D;Advertising Regulation O: Mortgage Assistance Relief Services Regulation P: Privacy of Consumer Financial Information Regulation V: Fair Credit Reporting Regulation X: Real Estate Settlement Procedures Act Regulation Z: Truth-in-Lending Regulation DD: Truth-in-Savings Other regulations l Disclosure of records and information l Rules Implementing Equal Access to Justice Act l Enforcement of Nondiscrimination on the Basis of Disability in Programs and Activities Conducted by the


SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n

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Table 5—2013 CFPB Dodd-Frank Mortgage Rules Readiness Guide— Page 15 Training 1. Have you determined what training needs to be developed?

Ginger Bell, a renowned education specialist in the mortgage industry, is the best-selling author of Cracking the Success Code, a book she co-authored with Brian Tracy and other business owners. Ginger was recently named national compliance training director for C3Compliance Consultants, a division of Offit Kurman Attorneys at Law, one of the top law firms in the mid-

Atlantic region. In 2011, Ginger was awarded the “Professional Woman of the Year” Award by the National Association of Professional Women

The player who eliminates all false possibilities the fastest during the game of Clue is most likely to win the game in the end. However; any turn not used to make a suggestion is essentially a wasted turn. So it is important to always look for clues and make suggestions. Same goes for your company’s training program. By looking at the CFPB Supervision and Exam Manual, we can find clues to what they are looking for in their exams. Look to the industry for articles, experts, conferences, Webinars and training for suggestions as to what others are doing and then find a good resource or solution that fits your business model. Follow the suggestions below when developing your training program. Think this is something new? No. Guess where it came from? Want a clue? It came from the CFPB Web site in their 2013 CFPB Dodd-Frank Mortgage Rules Readiness Guide on page 15. Why is this important? Because the CFPB expects you to train your staff on all of the new regulatory changes that are happening in January 2014. Yes, another clue. The CFPB Web site is full of great information and clues to help you become and stay compliant. It is just a matter of reading through the information, looking for clues and making sure you are implementing the right training for your company.

2. Have you determined who needs training? 3. Have you considered the following questions in developing training: l What information will be covered in the new training? l What will the format be for training? (Instructor-led, online, etc.) l How will training vary based on job duties? l How do you document completed training? l What are the consequences for employees not completing training by the assigned deadline? l Have the changes to the training program been fully integrated into your full training program and ongoing schedule? 4. How will you roll out the changes to your training program? l When will training be completed? l Do training timelines allow for enough time for staff to fully understand rule requirements prior to the effective dates? l Have you done any testing of training program changes? 5. Who is responsible for developing course content? l Did you purchase content from an outside vendor? l How is senior management involved in developing and approving course content? l How did you determine that course content is adequate? l What is the process for identifying the need for additional changes? 6. Have you determined what training will be needed to address operational changes? l What areas are impacted by the changes?

“…why do mortgage broker loan originators have to take the SAFE test, but not bank loan officers?”

Better SAFE Than Sorry By Eric Weinstein

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


If you read my article last month, “Go Dinosaurs !” you will know that I recently left a commercial bank to go back into the mortgage broker world. If you haven’t read it, go read it now (see page 40 of the August 2013 issue of National Mortgage Professional Magazine). I will wait here. Besides the low pay, the one thing that struck me while working at the bank was the crappy quality of the loan officers. I guess if they were higher quality, could get

depository regulated by OCC, OTS, FDIC, FRB and NCUA or the Farm Credit Administration, you are not required to take the SAFE MLO Test. As a registrant you are eligible to take the SAFE MLO Test.

So riddle me this Batman … say you are a legislator, and you want to make sure the public is getting the most professional, trustworthy and smartest loan officer there is to protect the public … why do mortgage broker loan originators have to take the SAFE test, but not bank Question: If I work for a commercial loan officers? If both are dealing with the bank, do I need to take the SAFE public in the same capacity, why is one treated differently from the other? MLO Test? Let me give it to you in a nutshell. The Answer: If you work for an insured banking lobby is bigger than the nonexistent mortgage broker lobby. Big business wins over the mom and pop shop. It is totally unfair, but there it is. I took my SAFE test about two years ago while working at the bank. I was happy at the bank at that time. I did not need to take the test, but it gives you a leg up if they treat you badly and you want to jump ship one day. Most bank loan officers don’t do that, and guess what … when they do decide to leave, they have a longer ramping up period if they decide not to go to another bank. For the cost of a SAFE class and test, it is good to have “options,” if you know what I mean. As I said before, “I am a Dinosaur.” I have been a mortgage broker for over 20 years. I started in Virginia. That was before you needed to be licensed, unless you owned the place. That was before you needed to take a test. That was before you needed to take a class. Basically, if you could find someone to hire you, you could have been a hobo on the street just before becoming a loan officer. Back then, I knew some loan officers that were. I am currently licensed as a mortgage loan officer in Virginia, Maryland and the District of Columbia. I just completed this year’s continuing education (CE.) I literally took the class lying in my bed in my underwear. Just a few years ago, if I tried that in a CE classroom, I would probably have been arrested. CE classes have come a long way. Back when I owned Carteret their own leads, didn’t have credit problems or a spotty license record, they would be mortgage brokers. I think some of them were just too scared to take the SAFE test. This is from the online FAQ of the NMLS Resource Center:

Mortgage, I had to fly from state to state taking my CE classes and state tests. Now, all the classes are online and my local testing facility covers most states. It’s like living with The Jetsons. One class even required I get a camera for my computer so they could watch me to make sure I was not dozing in class. Okay, that class I had to get dressed from the waist up. One question I get is, “Do I market and leverage my education and/or professional industry certifications and designations to consumers.” LOL. Get real. Do you think borrowers have the slightest clue on what it takes to be a loan officer? No, they would sell their grandmother for an 1/8 percent lower rate. Still, it is up to us, for our own benefit, to be the most knowledgeable salesman for our product. The more you know, the more you make. I would take the classes even if they were not required. Consumers go with the smartest guy and the one they know can help them. Of course, having the lowest rates also helps a bit. Speaking as a Dinosaur who has seen it all, I am very happy with the SAFE test. I think it should be required of all loan officers (even bank loan officers), There is no doubt; it keeps out the riff and the raff that were previously in the industry during the last financial boom. It creates baseline knowledge, and may I say a level of intelligence that hereto was not in the industry. This is one loan officer’s opinion. If you want me, I will be in bed in my underwear. Eric Weinstein worked in banking, on the commercial real estate side until 1991, when he fell in love with residential lending. In 1995, he started a small mortgage company in his basement called Carteret Mortgage Corporation, which in 2003, grew to one of the largest mortgage broker companies in the United States. These days, Eric is semi-retired, doing mortgages by referral only. As he likes to put it, “He is either saving people money per month or helping them buy a new home. What a great job!” He may be reached by phone at (703) 505-8692 or e-mail

“While it can be a grueling 20 hours that is usually done over a period of two days, the information you take away from a live classroom setting is superior to any other format offered.”

Live Classes vs. Self-Paced Courses: The Choice is Yours By Jayne Combs

Jayne Combs is a mortgage loan officer with First California Mortgage. She may be reached by phone at (661) 965-0088 or e-mail

calendar of events N A T I O N A L



see page 75 61

n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

comes to learning, limits distractions and helps you to form a solid foundation when preparing for your exam. For continuing education (CE) classes, there is a little more flexibility when it comes to which teaching platform is the best. While I am still a firm believer that a live classroom is the best option, a live Webinar comes in at a close second. In the classroom setting, you are sitting with other seasoned loan originators who share similar day-to-day experiences, can hold discussions of various interconnected topics and run through specific scenarios based on the information being presented. In some cases, they have found out that they were actually out of compliance and had it not been for the open forum, they might have continued to expose themselves to possible fines and/or jail time and the possibility of losing their license. However, if you are unable to attend a live classroom setting, then my next recommendation would be a live Webinar. With a good instructor who engages the group, a live Webinar class runs a close second to the live classroom setting. It still gives you the ability to ask questions and run scenarios by the instructor. The downside to a Webinar is that while you have some interaction with the instructor, you lose the discussions that typically take place in live classes between other attendees. Now, there are those of you out there, and you know who you are, who don’t want to have to sit still that long and think the online self-paced course is the way to go. To some it may be, but for the majority, I would say no. I’m not going to lie, the material isn’t the novel you just can’t put down. People tend to skim through it so they can go and pass the test and get it over with. But you’re really only harming yourself because you are not retaining or learning much.

a live Webinar, and then lastly, the online self-paced course.

Whether you are looking to obtain or renew your Nationwide Mortgage Licensing System & Registry (NMLS) license, you will need to choose which teaching platforms to use. Will it be the live classroom setting, live Webinar, or the online self-paced format? As a Mortgage Loan Officer (MLO) and NMLS instructor, I have both the personal experience and student feedback with respect to these various platforms which I’m going to share with you. I will begin with the pre-education (PE) classes. In most cases, people taking the PE course are either new or getting back into the business and are looking to get licensed. The information can be overwhelming if you are trying to learn it on your own via a Webinar or online self-paced course. I have heard this from many students that end up taking one of my classes after attempting to take one of the other platforms. They have all said it was a lot of information to absorb and was overwhelming. They also found it hard to remain focused. The students felt the live class helped them to retain the material better, a forum to ask questions freely, and also enjoyed the group discussions. As an instructor in a live classroom setting, I’m able to tell if someone is struggling with the material which allows me to further expand on the topic at hand. Whereas, the other platforms are either limited or don’t offer this at all. In my opinion, it would be worth your time and effort to find a live classroom format even if it means traveling to a remote location. While it can be a grueling 20 hours that is usually done over a period of two days, the information you take away from a live classroom setting is superior to any other format offered. The live classroom setting is your best bet when it

This could jeopardize your license if you are not aware of all the laws. But for those of you that find this the only way and it works, then great! In conclusion, my recommendation is always the live classroom setting whenever you get a chance, followed by

“The importance of employee training under the new regulations cannot be underestimated. It is not enough to recite the new rules and applicable procedures.”

Design and Align Compliance Education By Alice Alvey

In January of 2014, the tidal waves of regulatory change will hit the shores of the mortgage business, rocking all boats from the cruisers to the ships. It was long-predicted and is still a surprise. When the new rules and procedures were announced, they shocked the institutions but most especially the people. Adapting to the regulatory changes requires discipline and process

in compliance education—the discipline to understand rapidly evolving and novel business regulations as well as the process of embedding new written procedures into an efficient mortgage compliance education. Perhaps, the creation of the Federal Housing Administration (FHA) and Fannie Mae in the 1930s saw such a challenge but otherwise there are few

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


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other analogous periods of operational change in mortgages. Many will remember the underwriting shift after the subprime collapse. Underwriting standards like the Automated Underwriting Systems (AUS) were able to tighten the criteria for loan approval in origination. The AUS provided a test with which a lender who had properly maintained mortgage data could expect some level of confidence that the loan met basic regulatory criteria. Not too long afterward the Real Estate Settlement Procedures Act (RESPA) was added. The Good Faith Estimate (GFE) form, for example, provided basic information about the terms of a mortgage loan and estimates of the costs. It was implemented incrementally and allowed loan level cures to resolve mistakes found at closing. The loan remained saleable to the Agencies. Both the sub-prime and RESPA changes pale in comparison to the impact of these new regulations. Those operational changes occurred separately and over reasonable implementation time lines. But the 2014 regulations are novel in another way. They shift the burden of proof with new underwriting standards to determine the borrower’s ability-torepay. The determination will be left solely up to the lender. This intent, while dramatic, has been made perfectly clear by Fannie Mae and Freddie Mac in recent announcements. The new rules change the process and the liability. It simultaneously creates new paths of litigation and repurchases risks that last the life of the loan. The amount of change is compounded. Don’t forget the added fines and penalties under the Truth-in-Lending Act (TILA).

It all comes down to the person The importance of employee training under the new regulations cannot be underestimated. It is not enough to recite the new rules and applicable procedures. An employee training plan must be designed and aligned with the written procedures, from application through delivery and quality control, in order to ensure everyone on the front

lines knows, understands, and implements the procedures. This protects the company and the employee.

The “how to’s” Where do we start? Let’s assume we have a good loan origination system (LOS) and have worked with a technology provider to understand how the system will identify all of the new TILA and Qualified Mortgage (QM) requirements. The next step is to identify the gaps between a lawyer’s interpretation of the regulations, the LOS, and your company’s current processes. Once a firm develops a manual or alternate process to fill the gap between the old and new regulations, changes to the procedures need to be written. This sounds simple but it takes a lot of time to get it in writing. Regulators have been clear that procedures must match what is actually taking place, which means, for example, that the new TILA procedures must be completed before any training can begin. Unfortunately, that’s not the typical mortgage banker’s way of implementation. Generations of mortgage bankers have taken FHA loan applications long before they ever went to the training class. Processors everywhere got their start submitting a loan to an automated underwriting system wondering what happens next. Good Faith Estimates, which were out of compliance in the first part of 2010, provide an example not to be emulated. You get the picture.

Get a good plan The right training plan will help ensure that your first loans of 2014 are in compliance and there is no doubt that good content is the place to start next year. Courses offered by third party providers will be a valuable time saver to get the foundation set, but customized training needs to be added to every program and every position. The customized course design includes content teaching the written procedures. When this is done, the procedure document itself should be referenced whenever possible in the training. It is an invaluable asset and visuals taken from it should be prominently displayed throughout the course.

A general course covering the ability to repay requirements will be especially useful to underwriters. After the general rules, the next level of training needs to pull the federal requirements together with various company specific items such as non-QM products and how QM loans are identified and marked in the LOS. Quality control (QC) staffs need the same basic components as the underwriters but in addition, they also need modules on the steps for handling loans later found to violate QM standards. Small creditors face special challenges. They will need to determine the appropriateness of a training program that covers all aspects of the RESPA servicing regulations. A general training class like this may be poorly aligned with company procedures.

Completing the learning cycle Once the content has been organized and aligned with the procedures, the

employees need an effective and focused plan to complete their specific courses. The new rules are too dynamic to fit into excessively formal programs. The annual onslaught of 30 e-Learning compliance courses, to be completed by year-end, will interfere with the success of the new regulation training. Consider adjusting the usual schedule and setting realistic goals for each person to stay focused on whatâ&#x20AC;&#x2122;s new. Perhaps the third repeat of the Home Mortgage Disclosure Act (HMDA) or flood zone lesson can be postponed. Employees should complete a test as a part of the training and their work analyzed through quality control reviews. Postclosing QC isnâ&#x20AC;&#x2122;t going to help here because of the lagging turnaround time. Prior to closing, the data should be compared with documents in the file as well as the policy and procedures documents. External resources can check these documents for you and any errors can be caught before closing. Validation is a three-legged stool. The

data in the LOS, the documents, and the final reports are each critical in supporting compliance.

Now the LMS And of course, a flexible learning management system (LMS) to set controls that fit your firm needs to be implemented. It must give the right training to the right people at the right time. And once again written policies and training are part of the final tool. Having the written policy and procedure documents available in the LMS for reference will give the employees coordinated tools as they begin their new tasks. After the procedures have been in place, the QA results should be combined with a follow up survey of the employees. People on the front lines have great ideas that can makes things run more smoothly and still be in compliance. The surveys are a great way to collect feedback about the effectiveness of the training and the process itself. Implementation of the new regula-

tions will be a continuous process for months to come as the new regulatory waves hit our shores. Having policies and procedures aligned with welldesigned training content and early quality checks is essential and can be very cost effective. There are many affordable solutions in the market. Building it yourself or partnering with a provider, keeping the LMS current, is the best insurance money can buy to protect against fines, penalties, or loans missing the QM safe harbor target. Alice Alvey, Master CMB, is senior vice president of Indecomm-Mortgage U Inc. She is a national expert in mortgage training and compliance, with field experience from application through servicing. She co-founded Mortgage U with Jan Wetzel in 1996 and has designed hundreds of education programs. Alice is author of the FHA and VA Practical Guides used widely in the mortgage industry. She may be reached by e-mail at


n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

“The industry needs education and training on the MISMO standards. Being MISMO-certified will be a differentiator to conduct business in the mortgage industry going forward.”

Mortgage Data Standards Propelling the Need for Education and Certification By Heather Kerns & Matt Seu The mortgage industry has been far from standardized throughout history. Before the government-sponsored enterprises (GSEs)—Fannie Mae and Freddie Mac—and the Federal Housing Administration (FHA) there

were no true standards. The industry evolved from a paper and formsbased business transaction process to an electronic version. Processes began to mature, however, organizations were still required to have an in-


SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n

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“The mortgage industry organizations will have employees with MISMO certifications to ensure working with the vendors is more productive and ensure accuracy with the electronic transfer of data to support the lifecycle of a mortgage.” depth and specific knowledge of each investor/insurers policies to conduct business. Smaller lenders and servicers would choose one investor or maybe a handful. Doing business with many investors was simply too expensive in terms of manpower, training, education and technology solutions given the differences in processes and systems. Within the agencies, the standards have not been aligned, but things are shifting due to industry demands and regulations. The Federal Housing Finance Agency (FHFA), in coordination with the GSEs, has made advances to standardize practices, contract language, and associated data and systems required to perform the transactions existing in the life of a loan. One key decision was the choice to use Mortgage Industry Standards Maintenance Organization (MISMO) standards, its XML schema, and logical data dictionary, often referred to as the MISMO Reference Model, as the basis for the Uniform Mortgage Data Program (UMDP). MISMO has been in existence for years, and is mostly a volunteer organization instrumental in creating a robust and data schema covering the mortgage industry from application through securitization. Volunteers worked tirelessly to advance the cause, but MISMO did not have any real power to make people use the standards. Because of this, adoption was slow and only a few companies truly embraced the usage of the MISMO Reference Model. With the introduction of the UMDP, the landscape changed forever. FHFA, Fannie Mae and Freddie Mac decided that it was their mission to standardize data transfers among the primary markets and the GSEs. The theory was that this standardization would lead to process efficiency and data quality, reduced barriers to entry and lower switching costs. Enhanced usage of MISMO and a gaining of greater knowledge continues to evolve and be proven through the implementation of the Uniform Loan Delivery Dataset (ULDD) and the Uniform Appraisal Dataset (UAD). More UMDP standard

data sets are expected to enter the market related to servicing and closing later this year. While the UMDP began moving the industry forward, MISMO remains a volunteer army exposing a big problem. Few outside of a core set of volunteers really understands the MISMO Reference Model. Think about that for a moment. The industry is being directed to use a standard that many are still working to understand. MISMO acknowledges this shortfall and has put several efforts in motion. MISMO is attempting to promote the use a single common language across the industry, and that MISMO is that language. Not only are they working to develop the standards and to train industry, they are working closely with the government housing agencies (FHA, VA, USDA, and Ginnie Mae) as well as the regulatory community to educate them about the benefits of using the common MISMO standards. During 2012 and 2013, MISMO launched several efforts focused on increasing the number of subscribers (members) by nearly 50 percent. This first step brought some new resources to the volunteer groups and provided some additional band width to the key contributors who have been involved for years. The rest of this article will focus on two areas currently underway with MISMO that bridges the knowledge gap; educational training and certification. Why is training and certification so important? Look at the landscape. Currently there are thousands of lenders and servicers, title companies and mortgage insurers. Additionally, there are well over 100 software companies supporting the mortgage industry. These organizations will need to understand MISMO or rely on vendors who do in order to conduct business. There is no way around it. The GSEs are moving to a standard for transactions based on the MISMO Reference Model, and Ginnie Mae is not far behind. Work has also been done at the FHA as part of their transformation efforts. The industry needs education and training on the MISMO

Vendors will be certified and their associated employees who build and maintain their software and tools will also possess a level of certification enhancing the knowledge base, as well as the products supporting the data exchange throughout the mortgage industry. The mortgage industry organizations will have employees with MISMO certifications to ensure working with the vendors is more productive and ensure accuracy with the electronic transfer of data to support the lifecycle of a mortgage. This process and training may not happen

overnight, but the industry demands it and the need to start soon is evident based on feedback from across the industry. Matt Seu is a partner and owner of Actualize Consulting and is a member of the MISMO Strategic Planning Committee. Heather Kerns is a senior manager at Actualize, managing all MISMO offerings for the firm. Matt may be reached by e-mail at and Heather may be reached by e-mail at


n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

ware compliance program. We are also beginning to lay the groundwork towards a professional certification for individuals as the MISMO education program matures. As these programs evolve, a full company certification will also be a consideration.” MISMO recently concluded the first wave of on-line training for individuals. The three-day course focused on MISMO Concepts and Fundamentals; the training sold out. Kyle Bensen, CMB from MGIC, who leads the MISMO Education Committee, said, “We are at a critical juncture in the adoption of the MISMO standard in the industry, and an unprecedented amount of change is being introduced to the standard to accommodate GSE and regulatory reporting requirements. Therefore, it is necessary that we ‘raise the MISMO IQ’ throughout the industry by educating and developing leaders for the standard setting effort. We recently launched Course I— MISMO Fundamentals, the first of our three-course instructor guided online MISMO implementation series. We had over 55 registrants for the sixhour training session, and the feedback has been very positive.” The intent of the MISMO organization is to continue to increase the education offerings. Eventually, there are plans for a full curriculum, starting with the fundamentals and moving to more in-depth and targeted courses from a business and technical perspective. Courses are expected to target multiple audience levels to ensure understanding of the purpose, use, and benefits that span from executives to technologists, analysts, developers and business experts. Following the education, online Webinars will be a certification program for individuals that achieve a designation that the individual has a certain level of training and MISMO knowledge. The individual certification program is anticipated to be somewhat similar to the Certified Mortgage Banker (CMB) designation within the MBA’s education area. Although nowhere near final, one would expect some type of continuing education requirement to retain the designation. A possible future is a world where MISMO is fully-integrated into the fabric of mortgage data, encompassing the entire mortgage lifecycle.

standards. Being MISMO-certified will be a differentiator to conduct business in the mortgage industry going forward. Let’s review a scenario that will play out over the next year or two. The agencies expect to have valid XML transactions from their counterparties based on the MISMO Reference Model. With the Uniform Collateral Data Portal (UCDP) the GSEs currently control the outcome; resulting with a single platform that all organizations use for appraisal information. With ULDD, most companies rely on their LOS vendors to create a valid XML file. As an organization using these vendors, how do you know if the vendor is really exchanging data properly using the MISMO standards? The enterprises do publish a list of providers who assert that their tools comply with the MISMO standards. That does not necessarily mean that the vendors are well-versed in MISMO and it does not mean that they will be able to keep up with new releases of the Reference Model. The faster UMDP rolls out new data sets, the more pressure vendors experience. MISMO announced at their Spring Summit in the June 2013 that they are considering implementation of a software certification program. The work is ongoing, but we expect more information will be released during the upcoming MISMO Fall Summit. The certification will render service marks or a seals of approval that indicate that the vendor and software are worthy of the MISMO Compliance designation. It is anticipated that the program includes certification of company practices and evidence of the ability to store and generate MISMO based data sets. This is colossal, because going forward, the results of the MISMO Compliance Certification will provide transparency into which vendors ARE or ARE NOT equipped to support the data exchange files using the MISMO Reference Model. Feedback from lenders shows that the certification will be a differentiator going forward. Jan Davis, director of industry standards at the Mortgage Bankers Association (MBA) and the vice president of MISMO recently said, “Certification will be one of the pillars for the future of MISMO. We are currently working to develop a soft-

A New Day for Reverse Mortgages?

By Phil Hall

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


vercoming a problem-plagued reputation is never easy—and within the mortgage banking world, reverse mortgages have suffered for years from reputational woes. J.D. Dinnocenzo encountered this while trying to explain the benefits of a reverse mortgage to a potential borrower. “I asked her how much she knew about reverse mortgages,” said Dinnocenzo, a Boca Raton, Fla.-based reverse mortgage specialist at WCS Lending. “She said, ‘I know they’re bad.’ I asked what was bad about them, and she said, ‘I don’t know. I just know they’re bad.’ I asked who told her that, and she said, ‘Someone at church told me.’” Not surprisingly, the problems (both real and perceived) associated with reverse mortgages have trailed the product for decades and have kept it from reaching its fullest potential. A great deal of the difficulty stems from bad publicity. Typical of the sour press coverage is a July 18 headline from The Washington Post that reads, “Reverse Mortgages Can Become Nightmares for Seniors and Their Relatives.” Then, there is the belief that the product is weakening the federal housing finance structure. In the two years after the 2008 crash, the U.S. Department of Housing & Urban Development’s Office of Inspector General reported that nearly 13,000


Home Equity Conversion Mortgages (HECMs) were in default. These defaults created havoc for the Federal Housing Administration (FHA), which insured the HECMs. “Congress was curious why there was an increase in reverse mortgage defaults,” said Roger Beane, CEO at LRES, based in Orange, Calif. “The only opportunity for reverse mortgages to be foreclosed upon are due to a lack of payment on taxes and insurance.” Needless to say, advocates of the product have often found it very difficult to sing the praises of reverse mortgages. “It is a wonderful solution for the right needs,” said Todd K. Ballenger, executive vice president at Holmdel, N.J.-based Vantage Production LLC. “But it was always plagued with complexity. It reminds me of the old Zig Ziglar quote: ‘A confused prospect never buys.’”

power to consolidate the pricing options on its Standard Fixed-Rated HECM and Saver Fixed-Rate HECM. As a result of this consolidation, the fixedrate lump-sum option for borrowers will no longer be available. Last month, President Obama signed the Reverse Mortgage Stabilization Act of 2013, which is designed to secure consumer protection while ensuring the financial viability of the FHA’s HECM program. According to the bill’s author, Rep. Denny Heck (D-WA), the FHA will now have the authority to “quickly make changes to the [HECM] program necessary to stabilize it.” Heck adds that while reverse mortgages account for less than seven percent of FHA’s portfolio, they are the root of more than 16 percent of the agency’s expected losses. While observers believe these changes may result in less money for potential borrowers, it nonetheless translates into more consumer confidence about the product. “The changes should help drive consumer behavior,” said Peter Bell, president and CEO of the National Reverse Mortgage Lenders Association

“Not only are borrowers being encouraged to give reverse mortgages a second look, but some lenders are being asked to consider adding the product to their lineup.”

Brave new world However, a new federal oversight regimen may finally help to erase the lingering doubts surrounding the product. In January, HUD issued Mortgagee Letter 2013-01, which gave the FHA the

(NRMLA). “People will be able to take out the amount they need and leave the line of credit. It will be better for everyone.” Also in the mix is the new oversight being provided by the Consumer Financial Protection Bureau (CFPB), which has a particular focus on the marketing of reverse mortgages to seniors. Les R. Kramsky, a Marlboro, N.J.-based real estate attorney, welcomes the CFPB’s supervisory role as a means of building the product’s reputation for safety. “The new level of CFPB oversight will prevent further potential abuses to senior citizens in the reverse mortgage market by unscrupulous loan officers,” said Kramsky. “The CFPB requires improved disclosures to reverse mortgage borrower and it will limit misleading reverse mortgage advertising. Borrowers will now be counseled on alternatives to reverse mortgages and to see if the reverse mortgage is truly understood by the borrower along with determining if a reverse mortgage is the right product for the borrower.” Kramsky adds, “I believe that the CFPB oversight will lead to more senior citizens obtaining reverse mortgages for its intended purpose, which is providing them with loans to allow older homeowners to convert home equity into monthly payments or a line of credit so they could age in place in retirement. As a result of the CFPB oversight, there will be a decrease in reverse mortgage defaults and foreclosures.”

Compliance and Marketing 2013: Safely Growing Your Business and the Safest New Marketing Strategy! If you have ever done a significant amount of marketing, you have probably ran into or heard of others running into problems with compliance (hoops to jump through to keep your marketing compliant). The mortgage industry and your marketing strategy are heavily regulated by the Federal Trade Commission (FTC) and now the Consumer Financial Protection Bureau (CFPB). These agencies are put in place to make sure that consumers aren’t being taken advantage of by lenders or their marketing, and with all the guideline changes in the mortgage industry, it’s easier than ever to get into hot water. How can you stay current with all of these regulations? 1. You can read the guidelines on the agency Web sites. 2. Make sure you work with a reputable marketing firm. This is key. There are plenty of “marketing people” out there who don’t understand the guidelines. If they don’t know the rules, how can you expect them to be followed? 3. If you have a compliance department, USE THEM! They have intimate knowledge of industry regulations and will make sure you don’t get into any hot water. 4. This is the most important of all … TALK TO YOUR MARKETING COMPANY ABOUT IT. If you use an outside marketing firm, you must absolutely take the time to talk with them and find out how much they know about the guidelines for the specific type of marketing that you do or are planning on doing this year. Sure, it’s not their responsibility to make sure you follow the rules, but if you get into trouble they will lose you as a client and any good company will always put your best interest first.

Expanded opportunities

Phil Hall is senior editor of National Mortgage Professional Magazine. He may be reached by e-mail at

Some easy ways to make sure you remain in compliance: l Understand the regulations that impact your marketing, your industry, your loan type and do your best to follow them. They will sometimes lower your response rates, so it’s important to consider this BEFORE you begin a marketing campaign. l If you’ve already started your campaigns, have that conversation with your compliance officer and/or you marketing firm and make any necessary changes ASAP l Talk with your marketing firm to get useful insight into how you can keep your marketing profitable, while following set guidelines and find out what’s working for the types of loans you focus on. Marketing tip for the fall: Live transfer leads These leads have been up and coming all summer. Combining all forms of marketing to produce prospects that are truly interested in refinancing or purchasing now is outperforming any other marketing in the industry. You get qualified interested prospects on the phone now. And since you’re not doing any of the upfront marketing (only paying for the leads), your are only liable for what happens to the lead after it is transferred to you. On top of that, you pay per call, which basically guarantees the success of your campaign. These are offered in all 50 states and for all loan types. It’s the newest wave of marketing to sweep the mortgage industry, and it’s the most compliant. 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

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



n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

house in New Jersey and move to Florida by using a reverse mortgage to cover the new purchase.” NRMLA’s Bell agrees, adding that the product is also getting a new degree of positive media coverage. “Once it was a loan of last resort for people in financial need,” said Bell. “Now, it is being enabled by financial planners for different uses. Jane Bryant Quinn, in her blog, suggested seniors look at it. The Wall Street Journal said that more affluent seniors should look at it, too.” Not only are borrowers being encouraged to give reverse mortgages a second look, but some lenders are being asked to consider adding the product to their lineup. “I have been frustrated for more than 15 years that credit unions have not done more work in this area,” said Bob Dorsa, president of the American Credit Union Mortgage Association. “I thought it would be an ideal product to transcend the generational issues for older homeowners and their younger children to sustain their commitment to the credit union way of life. And considering both the retirement issues facing older people and the fact that 30 percent of homeowners do not have any mortgage at all, this is something that the credit union folks may find to be attractive one of these days.”

These changes come at the perfect time, according to Don Giorgio, president of Levittown, N.Y.-based United Northern Mortgage Bankers, who notes that reverse mortgages may finally be embraced as a means of establishing stability in a less-thanstable economic environment. “Reverse mortgages are going from being a 20-year-old infant into adolescence,” said Giorgio. “This transition is very worthwhile— indeed, it is much needed, in view of the state of the economy and for what our seniors need. Today’s seniors are on fixed incomes, but the cost of living around them is spiraling out of control. Reverse mortgages are transitioning from a needbased product into a want-based product, and a lot of people will use it to stay afloat.” Giorgio believes that the funds tapped from reverse mortgages will play a vital role in covering escalating medical expenses. “No matter how much the government is trying, they are not covering these costs,” Giorgio said. Eddy Perez, president of Atlantabased Equity Loans LLC, states that a new wave of seniors is less apprehensive about reverse mortgages, to the point that they are using them in more innovative ways. “The Baby Boomers are more computer savvy and they have a greater awareness of the subject,” said Perez. “Some are using reverse mortgages for home purchases—they would sell a

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


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

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


Growing Your Real Estate Agent Relationships, Grow Your Mortgage Business Part III Offer Value-Added Services By Jean LeBlanc

Offer niche products for buyers with specialized needs Don’t just tell your buyers you have lots of loan products. Instead, provide various solutions and tools to fit special niche buyers, such as foreign nationals, co-op or condo buyers. You can offer free preapprovals. A newer idea is to offer a free smartphone mortgage calculator app to your business partners that they can share with their clients, so that they can play around with different downpayment amounts and various rates.

Host product-specific real estate classes Offer to train new agents on various loan products. Approach a real estate owner/broker and tell them that you understand their time is limited, and you can assist them with getting new agents up to speed by providing in-house training for various loan programs, helping them to spread the net wider to bring in more potential qualified buyers. You can then bring in breakfast and hold training sessions in their offices. If you can help an agent sell one more property because of a new program you explained to them, you will have achieved a relationship status few LOs ever attain.

Host classes for your local agent association On a larger scale, consider teaching ongoing classes for your local real estate agent association. You may be able to partner with a local title company or attorney who is already teaching real estate continuing education classes, or you can work with your local real estate association to hire a state-certified trainer. One Phoenix branch did this on a regular basis. They found that free seminars were under-attended, so they began to charge $20-$100 per course and every seat was filled. They sent invitations to all real estate agents using the nationwide

company,, which will blast e-mail a flyer to every real estate agent in the area at a cost of approximately $50 for 5,000-7,500 agents. Consider using this service to e-mail your best offer three or four times until you’re built up your own database. With these first four e-mail invites, give local agents a compelling reason to visit your Web site and have them fill out a form on your landing page. Now you’ve captured their e-mail addresses and can begin to build your own list for regular agent-specific e-mails.

Use social media to connect with more agents On both Facebook and LinkedIn, it’s quite possible that you’ll find a group of real estate agents in your local area. Join that group and begin contributing to conversations and asking such questions as, “What are your options when your buyer only has funds for three percent down” or “Hybrid ARMs are making a comeback … what does this mean for your buyers on the fence?” But be careful to NOT be too saleslike or pushy. You want to establish yourself as someone who knows a lot about various mortgage options—not establish a reputation as a pushy LO. You may also want to check out the option of buying Facebook or LinkedIn ads for your target group of real estate agents. You can spend about $100 per month to have your ad viewed multiple times by these agents. Here are a few more ideas for valueadded service: l Maintain an up-to-date database of all of your company’s real estate agentpartners, title reps, attorneys and other strategic business partners and make contact with each one at least once a month. l If you send a monthly e-newsletter to real estate brokers, keep it very short and make sure you focus on “what’s in it for them,” such as your ability to close a loan with 10 days. l Create a Priority Service flyer for agents





to give buyers that says, “Since you’re working with XYZ Real Estate Agent, you’ll receive priority service and a free appraisal with your loan from ABC Mortgage.” Coach your loan officers to fill every visit to a real estate agent with solutions for the agent and their buyers. Don’t make presentations a commercial about the loan officer. The goal is to show agents how you can help them sell more properties. Be on the lookout for new offices or agents, and send them a handwritten note congratulating them. Follow up with another mailing providing sample flyers that you can co-brand and provide to them. Offer to provide real estate sign riders for your agents that give a 24/7 recorded description of the property, but also captures the prospect’s phone number so that both you and the agent can follow up with them. If you’re a blogger or a pretty good writer, offer to write a few mortgage-

legends of lending

related articles for the real estate agent’s Web site, answering basic questions like: “What size loan will I qualify for?” and “What if I don’t have a big downpayment?” and “What loan options are available to me?” Of course, be sure to add your contact info at the end of every article, with a “call to action,” such as “Find out how low your downpayment can be with this loan” or “Get prequalified today to begin your house hunt.” l Offer to split ad costs with agents using co-branded marketing collateral. Provide them with co-branded templates for “new listing” flyers, open house flyers and “just sold” postcards. Jean LeBlanc is director of marketing for Guaranteed Home Mortgage Company. For more marketing tips, download the eBook, 13 Ways to Juice Up Your Marketing in 2013, by going to and clicking on the eBook offer midway down the page. She may be reached by phone at (914) 696-3400.


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

continued from page 41

NAPMW NAP MW membership gives gives you you exclusive exclusive access access to to timely educaeducaaffecting career tion regarding regarding the regulations regulations aff ecting yyour our car eer such as a FREE TO TO MEMBERS monthly monthly webinar webinar on industry industry updates updates AND education offering our 8 hour NMLS continuing continuing educa tion class ss off ffe ering (NMLS Provider P rovider # 1400309) 69

LLeadership eadership IIff you you believe believe in helping to to elevate elevate the educational educational standards standards of this industry, industry, or assisting in developing developing the most competent competent industryy w work industr ork force, force, then you you believe believe in NAPMW. NAPMW.

nearly 20 years, you might wonder if they ever get nostalgic. Jampedro puts it this way, “Do we ever get together and have a beer and talk about the good old days and the old people? Sure … for about 15 minutes, then it’s on to the new. Our philosophy is to embrace what is in the market rather than what was, and to respond as quickly as possible.” Legendary status for a mortgage firm requires longevity … check. Legendary status requires extraordinary achievements … check. But even more, legendary status requires overcoming major obstacles and the ability to have great vision and clarity for what lies in the future … check. GSF Mortgage Corporation has a great story to tell and is a worthy recipient of our Legends of Lending recognition. For more information on all of GSF’s offerings, visit on the Web. David J. Coster is senior editor of National Mortgage Professional Magazine. He may be reached by phone at (919) 559-2171 or e-mail

Networking Net work o king i NAPMW is a ccommunity NAPMW ommunity of near nearly ly 2,000 professionals professionals acr across oss the Country mortgage tgage / bank banking ing industr industry. y. Men Men C ountry who engage in the mor and w women omen fr from om all backg backgrounds rounds have have joined NAPMW NAPMW because whatt they do do.. Emplo Employers yers who w want ant eexcelxcelthey want want tto o eexcel xcel aatt wha lence lenc e from from their employees emplo e yees engage eng with NAPMW N NAPMW for for up-to-date up-to-date education. educa tion. B Both oth pr p professionals ofessionals and emplo employers emp yers have have found found there there is a plac place e for for them in 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 8 1-800-8 827 3034 827-3034 Have Ha ve Q Questions? uestion ns? Please ffeel eel free free to to e e-mail -m mail us a at: t: napm w1@aol.c . om

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n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

viable. We will continue to invest in it. It grows for us each month, particularly as originators move away from refinances.” For the future, Jampedro sees opportunities in lending to the emerging millennial market of homebuyers. In response, the firm has taken bold steps to update and expand its brand, Web and social media efforts. He believes that, “Although the Internet has changed the way that people do business, customers still rely heavily on word-of-mouth recommendations, a reliance that’s especially true in the mortgage and housing industries. When it comes to big purchases such as homes, customers consistently turn to the Web first.” As it relates to future growth, Jampedro expects to follow the same path as his predecessors … deliberate and selective growth. “We will continue to add branches where there is a strategic fit. We are looking for experienced branch managers who understand the concept of running a branch and want to get back to originating.” With all they have accomplished over

NAPMW since women NAPMW is not a women’s women’s organization. organization. But sinc ew omen make up the major majority profesity of professionals professionals in the mortgage/banking mortgage/banking pr ofession, our purpose purpose is to to help them advance advance in business, business, personal, personal, and leadership development. development.



The Bond Exchange (501) 224-8895 LOWEST-COST STATE MORTGAGE LICENSE BONDS Support NAMB in supporting you! Online surety bond applications, instant underwriting approval, and credit card payments administered through The Bond Exchange NAMB's exclusive partner provider for state license surety bonds. The Bond Exchange is a national surety agency specializing in servicing mortgage license bonds for thousands of mortgage professionals across the country. Low prices and fantastic service. You really can have them both at the same time!


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


StreetLinks Lender Solutions (800) 778-4920

SEPTEMBER 2013 n National Mortgage Professional Magazine n


Hometown Lenders (888) 606-8066

StreetLinks Lender Solutions provides an innovative and comprehensive suite of valuation and service solutions used by lenders, servicers and appraisers nationwide to improve everyday business operations. StreetLinks industry-leading products include LenderPlus™ full-service appraisal management, LenderX™ lender-executed appraisal management software and SCORe™ appraisal reviews and a series of valuation analysis tools for services. Our commitment to quality and service, embodied by our partnership approach to clients and appraisers, continues to set us apart as the nation’s premier lending solutions partner. For more information, visit


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


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


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

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

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

Clix Mg 1756 Hanshaw Road • Ithaca, NY 14850 Office: 727.474.1442 Clix Mg, provides the mortgage industry with compliant marketing solutions. We assist mortgage companies to balance the competing needs of effective marketing campaigns and compliance. Our management team includes attorneys, software developers and marketers, combining more than 50 years experience in the industry. During the past year Clix Mg has been developing the LCP (“Lender Compliance Portal”). LCP is a web based platform that provides mortgage companies the ability to track, control, oversee and approve every marketing piece, material, campaign or program according to their own guidelines in an easy user friendly and cost effective manner. LCP provides reporting capability for internal as well as State and Federal audits.



LENDERS COMPLIANCE GROUP 167 West Hudson Street - Suite 200 Long Beach | NY | 11561 | (516) 442-3456

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

The first full-service, mortgage risk management firm in the country, specializing exclusively in mortgage compliance. Pioneers in outsourcing solutions for mortgage compliance. Our Compliance Team Will: Leverage your existing employees. Improve your productivity. Collaborate on projects. Make the most of your current technology. Bring innovation to your company. Be a strong cultural fit. Free you to focus on your core competencies. Give you access to world-class expertise. Lower your total operational costs.



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


LEADS 888-695-3239

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


Mortgage Seminars 248-403-8181 Cost: Only $19.95 per month per physical office location Jeff Mifsud, a former FHA Direct Endorsed Underwriter trained by HUD and an FHA Originator for over 15 years, is publisher of The FHA Originator, a monthly marketing newsletter which gives you… • • • •

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

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

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


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

Calyx Software 800-362-2599 Calyx Software is the #1 provider of affordable mortgage solutions for banks, credit unions, mortgage bankers and brokers. Beginning with customizable websites that offer online mortgage applications with eDisclosures and document request/retrieval, Calyx offers products that enable smooth bi-directional flow of data from start to finish. Our solid yet flexible LOS delivers smart technology with electronic document management, back-end functionality such as underwriting and secondary marketing, strong security, remote access, on-the-go productivity available with optional mobile apps, and a configurable business rules engine needed for workflow and compliance. Convenient interfaces with over 200 vendors providing PPE, closing documents, compliance services and more make endto-end processing and reporting simple & accurate. Lenders can take advantage of our fully integrated automated underwriting and pricing products that determine loan eligibility and pricing against investor or FHA guidelines.

n National Mortgage Professional Magazine n SEPTEMBER 2013

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

TagQuest 888-717-8980


AllRegs—Your Source for Fast, Reliable Answers 2600 Eagan Woods Drive, Suite 220 Eagan, MN 55121 (800) 848-4904




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

SEPTEMBER 2013 n National Mortgage Professional Magazine n


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

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


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

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

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Maverick Fundingg Corp. NMLS# 7706

Gets you more referrals, inquiries, and closings!


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

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

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

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


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


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


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

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

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

Currently expanding and hiring experienced Wholesale Account Executives nationwide.

Contact Gabe Santiago our Corporate Recruiter at for further details.

Please send your resume to

Big Enough to MATTER…Small Enough to CARE


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

mortgage technology providers

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

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

n National Mortgage Professional Magazine n SEPTEMBER 2013

Building bridges to success, one loan at a time.

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


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

SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


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

new to market

continued from page 15

age closing time for first mortgages in June 2013 was 47 days, a three-day increase from the previous month. In an effort to overcome this industry challenge of on-time closing fulfillment, Churchill’s “Purchase Guaranteed Close” program ensures the agreed-upon close date is met. The guarantee starts from the time the loan officer receives a full and complete loan application package from the borrower and, if the loan is not closed within the agreed upon date, Churchill guarantees a $1,000 credit to the borrower at the time of closing. “Our ‘Purchase Guaranteed Close’ program supports Churchill’s strong commitment to borrowers while providing peace of mind and confidence to sellers and real estate agents,” said Mike Hardwick, president, Churchill Mortgage. “Efficiently meeting the

Your turn National Mortgage Professional Magazine invites you to submit any information promoting new “niche” loan programs, new products or any other announcement related to the introduction of a new program, to the attention of: New to Market column Phone #: (516) 409-5555 E-mail: Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

the mini-correspondent channel

continued from page 53

acquire information and options, and then, after careful consideration, make a decision on moving forward.

date of on or after Jan. 10, 2013, for loans for which the creditor receives an application. See 78 Fed. Reg. 6408, 6419 (Jan. 30, 2013) (12 C.F.R. § 1026.43(c).

Jonathan Foxx is president and managing director of Lenders Compliance Group and Brokers Compliance Group, mortgage risk management firms devoted to providing regulatory compliance advice and counsel to the mortgage industry. He may be contacted at (516) 442-3456, by e-mail at Michael G. Barone is director of legal and regulatory compliance at Lenders Compliance Group. He may be reached by e-mail at For more information, visit or

6—Ability-to-Repay: Regulating or Underwriting, Part I, Foxx, Jonathan, National Mortgage Professional Magazine, June 2011, Volume 3, Issue 6, pp. 2630; Ability-to-Repay: Regulating or Underwriting, Part II, National Mortgage Professional Magazine, Foxx, Jonathan, July 2011, Volume 3, Issue 7, pp. 20-42; Ability-to-Repay: The Basics and a Chart, Foxx, Jonathan, National Mortgage Professional Magazine, September 2011, Volume 3, Issue 9, pp. 6-24; and, for our newsletters, visit our firm’s Library ( or its publications Web site (

Footnotes 1—Elizabeth Warren is now a U.S. Senator (D-MA). 2—The three percent cap on broker revenue is included in the Final Rule issued by the CFPB and published in the Federal Register, Jan. 30, 2013, Ability-to-Repay and Qualified Mortgage Standards under the Truth in Lending Act (Regulation Z) at 3—The CFPB issued Proposed Amendments to the Ability-to-Repay Standards under the Truth-in-Lending Act (Regulation Z). See Proposed Amendments to the Ability-to-Repay Standards under the Truth-in-Lending Act (Regulation Z), Jan. 10, 2013, see 4—78 Fed. Reg. 6447, 6581 (Jan. 30, 2013).


needs of those purchasing a home and guiding them into a new chapter in their lives is fundamental to restoring faith in the American Dream of homeownership.”

5—The Final Rule provides a compliance effective

7—The “Average Prime Offer Rate” (APOR), published weekly by the CFOB, is an annual percentage rate that is derived from average interest rates, points, and other loan pricing terms currently offered to consumers by a representative sample of creditors for mortgage transactions that have low-risk pricing characteristics. See 12 CFR Chapter X, Subpart E-Special Rules for Certain Home Mortgage Transactions, §1026.35(a)(2). 8—The CFPB has the authority to assess civil monetary penalties in the amount of $5,000 per day for a violation, up to $25,000 per day for any reckless violation, and up to $1 million per day for any knowing violation. 9—78 Federal Register 6531. The Final Rule establishes a five-tier structure in which mortgages of certain loan amounts retain the designation of a QM so long as the total points and fees do not exceed the listed thresholds. 10—Ibid. 11—For instance, see Handbook 4060.1, and numerous Mortgagee Letters. For more information, see also

calendar of events N A T I O N A L


Thursday, November 7


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

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

Wednesday-Friday, December 4-6

Sunday-Wednesday, October 27-30

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


Thursday-Friday, October 24-25

Sunday-Tuesday, September 29-October 1 Mortgage Bankers Association Regulatory Compliance Conference Renaissance Washington DC Downtown Hotel 999 9th Street NW Washington, D.C. For more information, call (800) 793-6222 or visit


Friday, October 11

Wednesday, November 13

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


Monday-Wednesday, November 4-6

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

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

Sunday-Tuesday, November 6-8 National Consumer Reporting Association (NCRA) 2013 Annual Conference Embassy Suites Hotel & Spa 1000 Woodward Place NE Albuquerque, N.M. For more information, call (630) 539-1525 or visit

Friday, November 15 2013 Great Northwest Mortgage Expo Spirit Mountain Casino 27100 Salmon River Highway Grand Ronde, Ore. For more information, call (860) 922-3441 or e-mail

Tuesday-Thursday, November 19-21 Mortgage Bankers Association (MBA) Accounting and Financial Management Conference 2013 Boca Raton Hotel 501 East Camino Real Boca Raton, Fla. For more information, call (800) 793-6222 or visit

To submit your entry for inclusion in the National Mortgage Professional Calendar of Events, please e-mail the details of your event, along with contact information, to


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

Tuesday-Friday, February 18-21 Mortgage Bankers Association (MBA) 2014 National Mortgage Servicing Conference & Expo The Peabody Orlando 9801 International Drive Orlando, Fla. For more information, call (800) 793-6222 or visit


n Louisiana Mortgage Professional Magazine n SEPTEMBER 2013

Thursday, October 17 IAAMBâ&#x20AC;&#x201D;Mortgage Professionals of Iowa 2013 Convention Stoney Creek Inn 5291 Stoney Creek Court Johnston, Iowa For more information, call (800) 462-0077, e-mail or visit

Saturday-Monday, October 19-21

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

2013 New England Women in Banking Conference The Hyatt Regency Newport 1 Goat Island Newport, R.I. For more information, call (860) 922-3441 or visit


SEPTEMBER 2013 n Louisiana Mortgage Professional Magazine n


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Louisiana Mortgage Professional Magazine September 2013  
Louisiana Mortgage Professional Magazine September 2013