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

Michigan Mortgage Professionals Association Headquarters 350 West 22nd Street, #104 O Lombard, IL 60148 Phone: (888) 869-5999 O E-mail: Web site: OFFICERS

Brian Siebert Kevin Goldman Buck Drummond Lue Turner

President President-Elect Treasurer Secretary

Phone # (248) 666-2700 (248) 538-1500 (248) 203-7726 (248) 557-3230


ADMINISTRATION Marve Stockert Jim Ryan

Executive Director Lobbyist

(888) 869-5999 (517) 371-3800

DIRECTORS Allan Daniels Patricia Finn Dan Giroux Tim Kleyla Eric Stevenson Drew Sygit Kirk Van Horn

(248) 335-6166 (989) 284-4017 (231) 932-9300 (616) 392-2290 (517) 272-5626 (248) 356-3739 (269) 926-8966

MMPA 2010 Industry Partners

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For more information on the MMPA Industry Partners Program, contact the state office at (888) 869-5999 or visit


Mortgage Brokers and Loan Originators

SAVE THE DATE! Attend the




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2010 NAMB/WEST Conference December 4-6, 2010 at the MGM Grand Las Vegas!

Visit for updates.


NOVEMBER 2010 Thursday, November 4 MMPA 2010 Fall Conference The Johnson Center • Howell, Mich. For information on all MMPA events, call the MMPA office at (888) 869-5999 or visit

Chase to Assist Unemployed Michigan Homeowners Through Hardest Hit Fund

Headlines and breaking news from

Headlines and blogs from around the web.


For more information, visit or

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Chase has announced that it will participate in Michigan’s Hardest Hit Fund to help borrowers who live in the state and are receiving Michigan unemployment benefits. The program may pay up to half of qualified borrowers’ monthly mortgage for up to 12 months on their primary residence, saving them up to $9,000. It’s available for Chase customers who are behind on their mortgage payments, as well as those who are current. Chase will roll out the program once the Michigan State Housing Development Authority (MSHDA) has all of the logistics in place. “We’re pleased to offer one more way to help Michigan homeowners who are struggling with their payments,” said Sarah McClelland, president of Chase in Michigan. “We’ve been working closely with MSHDA on the details so this will work smoothly for homeowners.” Chase already has set up face-to-face loan counseling centers in Detroit and Troy, has sent counselors to 36 local outreach events and offered more than 900,000 mortgage modifications to struggling homeowners nationwide. MSHDA designed this portion of the Michigan program to help unemployed borrowers in making mortgage payments on their own home. For example, a borrower who has been making a $1,400 monthly payment for principal, interest, property taxes and homeowners insurance may be eligible to pay only $700 per month, with the state paying the difference. When a homeowner calls Chase, a Chase counselor will ask basic eligibility questions and then send an application package to the homeowner by overnight delivery. The homeowner must complete and return the package and other required information—such as asset and income documentation—by fax or overnight delivery to Chase. Chase will check the documents promptly and forward them electronically to MSHDA, which will determine whether the homeowner qualifies. The borrower will receive notification and instructions from both MSHDA and Chase. If an application receives full approval by the 15th of a month, borrowers get the benefit the next month. They will be instructed to send their portion of the next month’s payment to the state, which will add its portion and send the full payment to Chase. Over the last 18 months, Chase also has helped Michigan homeowners through its Chase Homeownership Centers in 611 Woodward in Detroit and 1235 East Big Beaver in Troy, Mich. Chase counselors have met face-to-face with more than 4,400 struggling Michigan homeowners both at the centers and at 36 events across the state. Chase counselors across the country have met directly with more than 140,000 borrowers. Nationally, Chase has offered more than 900,000 mortgage modifications to troubled homeowners since the beginning of 2009 through a wide range of government and Chase initiatives to address the housing crisis.



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Exhibitors and Sponsors


2010 NAMB/WEST Conference




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December 4-6, 2010 at the MGM Grand Las Vegas!

Visit for updates. Exhibitors will receive a complimentary ad in the December issue of the National Mortgage Professional

For more details on Exhibiting and Sponsorship, please contact Kinsley at 303-798-3664 or

Value Nation: Appraisal Review Goes High-Tech By Charlie W. Elliott Jr., MAI, SRA

Is the Broker-to-Banker Business Really Dead? By Elaine Roccio

SAFE Smart … Is the Light Worth the Candle? By Paul Donohue, CRMS















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Ask Tommy: Your QC Expert By Tommy A. Duncan, CMT


The NAMB Perspective


NMP Mortgage Professional of the Month: Paul Donohue, Founder of Abacus Mortgage Training and Education


Trend Spotter: The Three Numbers That Really Matter By Gibran Nicholas


The Secondary Market Overview: The Short-Term and the Long-Term By Dave Hershman





By Jonathan Foxx




Forward on Reverse: FIT for Reverse Mortgage Lenders: Part II … The Fuss Over FIT By Atare E. Agbamu, CRMS

A New Era of Mortgage Reform … Part III: Consumer Financial Protection—Bureau and Bureaucracy










Taking Control of Your Marketing By Rene F. Rodriguez


A View From the C-Suite: Marketing vs. Sales … Understanding the Difference By David Lykken


What Are You Marketing For? By Andy W. Harris, CRMS


The Truth About Direct Mail By Joy Gendusa


Turning a Headache on Its Head By John A. Woloshen


How the Consumer Experience is Driving Change in the Mortgage Industry By Jeff Solomon








The Trusted Mortgage Professional: Bonded and Insured … A Foundation for Rebuilding Trust By Greg Schroeder


October 2010 Volume 2 • Number 10



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

1220 Wantagh Avenue • Wantagh, NY 11793-2202 Phone: (516) 409-5555 / (888) 409-9770 Fax: (516) 409-4600 Web site: STAFF Eric C. Peck Editor-in-Chief (516) 409-5555, ext. 312 Andrew T. Berman Executive Vice President (516) 409-5555, ext. 333

A Message From NMP Media Corp. Executive Vice President Andrew T. Berman This month’s edition starts off with a great piece by Elaine Roccio on a topic we haven’t covered in a long time ... broker to banker. Read her article see just what “broker to banker” means in today’s world. How’s your ADDP? There’s a new word that is pronounced “Add-Pee” and stands for “Appraisal Defect Detection and Prevention.” Turn to this month’s “Ask Tommy: Your QC Expert” column to learn what this word means to you and your LQI. This month’s NAMB Perspective has some details on the NAMB/WEST program in Las Vegas in December from NAMB/WEST Conference Chair, Donald Frommeyer, CRMS, as well a great piece from Deb Killian, CRMS issuing a call to action for wholesalers. Another must-read piece is Gibran Nicholas’s installment of Trend Spotter. Gibran reveals three crucial numbers that you should know by heart as they can help serve as motivation to finish this year off strong. Dave Hershman shares his thoughts on the short-term and longterm direction of the marketplace in this month’s Secondary Market Overview. This month, we wrap up the three-part series where Jonathan Foxx dug his hands deep into the 2,000-plus pages of the Dodd-Frank Act. It is wrapped up by a look at the Consumer Financial Protection Bureau (CFPB).

This month’s Mortgage Professional of the Month We had a chance this month to shine the spotlight on a legend in lending and training, Paul Donohue. Paul shares his roots from being a builder, to being active in the North Carolina Association of Mortgage Professionals, to using his philosophy of using teams to help close a loan.

It’s all about the marketing Domenica Trafficanda Art Director Karen Krizman Senior National Account Executive (516) 409-5555, ext. 326


Jon Blake Advertising Coordinator (516) 409-5555, ext. 301 Jennifer Moeller Billing Coordinator (516) 409-5555, ext. 324

SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail or visit Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600. Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the authors alone and do not imply the opinion or endorsement of NMP Media Corp., or the officers or members of National Association of Mortgage Brokers and its State Affiliates (NAMB), National Association of Professional Mortgage Women (NAPMW), National Credit Reporting Association (NCRA) and/or other state mortgage trade associations. Participation in NAMB, NAPMW, NCRA, and/or other state mortgage trade associations events, activities and/or publications is available on a non-discriminatory basis and does not reflect the endorsement of the product and/or services by NMP Media Corp., NAMB, NAPMW, NCRA, and other state mortgage trade associations. National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, and/or other state mortgage trade associations do not make any misrepresentations or warranties concerning the regulatory and/or compliance aspects of advertisers, products or services and/or the editorial content contained in NMP Media Corp. publications. National Mortgage Professional Magazine and NMP Media Corp. reserve the right to edit, reject and/or postpone the publication of any articles, information or data. MO






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.



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




National Mortgage Professional Magazine is published monthly by NMP Media Corp. Copyright © 2010 NMP Media Corp.

What does this phrase mean? Technically, everything you do is marketing. Sure, there are many things about outbound communication, such as direct mail, e-mail marketing, Web site promotion, search engine optimization (SEO), etc., however, it so much more than that. It’s how you communicate on the phone with your clients, its about the appearance of your e-mails to your borrowers from your processors, how a servicer rep deals with payment issues on the phone, and basically any interaction you have with your borrowers and potential referral sources. This month, we collected articles from some of the leading minds in the mortgage business to share their thoughts, strategies and secrets on marketing. The section starts off with Mortgage Dashboard Chief Executive Officer Rene F. Rodriguez sharing his thoughts on controlling your marketing processes. Renee is followed by the “View From the C-Suite” by David Lykken discussing the difference between sales and marketing, and developing a powerful marketing strategy that fits you business plan. Further in the section, Andy W. Harris, CRMS from Vantage Mortgage Group Inc. teaches us about executing long-term marketing strategies which include personal development. Direct mail maven, Joy Gendusa from PostcardMania talks about how direct mail is still relevant in today’s marketing environment. While we are on the subject of direct mail, be sure to check out the piece by John A. Woloshen of RATA Associates on using HMDA and CRA data for target marketing. The section is wrapped up with a piece from Jeff Solomon of Leads360 about cultaivating consumer experience from the early stages of the sales process.

An opportunity to share and grow At the beginning of this year, I saw video by Carl White of Mortgage Marketing Animals about sharing your ideas. In the video, Carl lights a candle and shares the flame with others in the room. As he shares, the light becomes stronger, yet his flame does not go down. You can see the video at As an example, taking what you’ve learned in your market and sharing these successful strategies with others from around the country. This year, I witnessed this firsthand at the Mortgage Revolution events that have been held nationwide. I mention this because one of the last chances to meet with other mortgage professionals from around the country is coming up Saturday-Monday, Dec. 4-6 at NAMB/WEST 2010 in Las Vegas. For more details about this event, visit Until next month ...

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

The National Association of Mortgage Brokers

National Association of Professional Mortgage Women

11325 Random Hills Road, Suite 360 Fairfax, VA 22030 Phone #: (703) 342-5900  Fax #: (703) 342-5905

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

NAMB Board of Directors Officers President—William R. Howe, CMC, CRMS Howe Mortgage Corporation 13322 East Paradise Drive  Scottsdale, AZ 85259 (602) 200-8100 President-Elect—Michael D’Alonzo, CMC Creative Mortgage Group 1126 Horsham Road, Suite D  Maple Glen, PA 19002 (215) 657-9600 Vice President—Donald J. Frommeyer, CRMS Amtrust Mortgage Funding Inc. 200 Medical Drive, Suite D  Carmel, IN 46032 (317) 575-4355 Secretary—Virginia Ferguson, CMC Heritage Valley Mortgage Inc. 5700 Stoneridge Mall Road, Suite 225  Pleasanton, CA 94588 (925) 469-0100 Treasurer—John Councilman, CMC,CRMS AMC Mortgage Corporation 2613 Fallston Road  Fallston, MD 21047 (410) 557-6400 Immediate Past President—Jim Pair, CMC Mortgage Associates Corpus Christi 6262 Weber Road, Suite 208  Corpus Christi, TX 78413 (361) 853-9987


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

Olga Kucerak, CRMS Crown Lending 222 East Houston, Suite 1600  San Antonio, TX 78205 (210) 828-3384 Walter Scott Excalibur Financial Inc. 175 Strafford Avenue, Suite 1  Wayne, PA 19087 (215) 669-3273

President-Elect Laurie Abshier, GML, CMI (661) 283-1262 E-Mail:

Vice President—Eastern Region Christine Pollard (646) 584-8332

Senior Vice President Candace Smith, CMI, CME (512) 329-9040

Secretary Murielle Barnes, CME (806) 373-6641

Vice President—Northwestern Region Jill M. Kinsman (206) 344-7827

Treasurer Hulene Bridgman-Works (972) 494-2788

Vice President—Western Region Tim Courtney (760) 792-5620

Parliamentarian Dawn Adams, GML, CMI (607) 737-2584

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


2010 Board of Directors Marty Flynn President (925) 831-3520, ext. 224

Sanford (Sandy) Lubin Director (805) 481-3155

Tom Conwell Vice President (248) 473-7400

Judy Ryan Director (800) 929-3400, ext. 201

Daphne Large Treasurer (901) 259-5105

Tom Swider Director (856) 787-9005, ext. 1201

William Bower Director (800) 288-4757

Donald J. Unger Director (303) 670-7993, ext. 222

Mike Brown Director (800) 285-6691

NCRA Staff

Susan Cataldo Director (404) 303-8656, ext. 204 Nancy Fedich Director (908) 813-8555, ext. 3010

Terry Clemans Executive Director (630) 539-1525 Jan Gerber Office Manager/Membership Services (630) 539-1525


Donald Starks D.C. Starks Mortgage Associates Inc. 141 South Main Street  Bourbonnais, IL 60914 (815) 935-0710

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


Deb Killian, CRMS Charter Oak Lending Group LLC 3 Corporate Drive, P.O. Box 3196  Danbury, CT 06813-3196 (203) 778-9999, ext. 103

President Gary Tumbiolo, CMI (919) 452-1529 

Michael Anderson, CRMS Essential Mortgage 3029 S. Sherwood Forest Boulevard, Suite 200 Baton Rouge, LA 70816 (225) 297-7704

National Board of Directors

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Rep. Cardoza seeking mass refinance of all mortgages to prevailing low rates California Rep. Dennis Cardoza has announced legislation to stabilize the foreclosure crisis through the federal government’s conservatorship of Fannie Mae and Freddie Mac with support of two of the nation’s leading economists, Columbia Business School Senior Vice Dean Christopher Mayer and Moody’s Analytics Chief Economist Mark Zandi. The Housing Opportunity and Mortgage Equity (HOME) Act would use the federal government’s conservatorship and backing of Fannie and Freddie mortgages to secure the current low market rates for longer fixed terms. Mortgages currently held by Fannie Mae and Freddie Mac that meet the basic criteria will also qualify for the opportunity to refinance without penalty fee barriers. To fund the program, Fannie and Freddie would issue new mortgage-backed securities (MBS) to fund the refinanced mortgages and use the proceeds to pay off the existing mortgages. Fannie and Freddie would receive the same cash flow to cover default risk that they do now, passing along the reductions in financing costs to borrowers. The proposed legislation would impact nearly 30 million mortgages held or backed by Fannie and Freddie. The HOME Act would allow for refinances of 30-year, fixed-rate mortgages at the current record-low rates in the 4.4 percent range for anyone seeking to refinance a government-backed loan. “With mortgage rates near record lows, the quickest and most effective way policymakers can help the economy is to facilitate more mortgage refinancings,” said Zandi. “The HOME Act does this at little or no cost to taxpayers.” The HOME Act would also help stabilize the housing market by decreasing the inventory of foreclosed homes and reducing declines in property values from issues surrounding blight and abandonment. At the same time, those with mortgages backed by Fannie and Freddie would have additional disposable income, providing a direct economic stimulus.

“No solution to date has addressed both foreclosure prevention and the decline of home equity. The reality is the housing crisis has spread far beyond the subprime market, hindering our economic recovery,” said Rep. Cardoza. “None of the Administration’s current housing programs have been far-reaching enough to make a dent in the worst foreclosure crisis in U.S. history. Until we see a program that cuts to the heart of the recession, we will continue to see little growth in our economy, families losing their homes and lifetime investments with lost equity.” The legislation was initially introduced in January 2009. It has been modified based on new input received from leading economists and the House Financial Services Committee. It also reflects changes in the housing market. It was reintroduced with contributions from Mayer and Zandi. The proposal has gained increased interest as more economists realize that measures aimed at addressing the foreclosure meltdown have not been sufficient. For more information, visit

FHA announces new affordable HECM Saver reverse mortgage option The Federal Housing Administration (FHA) has announced a new modified version of its Home Equity Conversion Mortgage (HECM) product. The HECM loan is a reverse mortgage-insured by the federal government. It allows older home owners to tap into their equity to cover living expenses and healthcare costs, while continuing to live in their home without having to make the mortgage payments that are required with a traditional mortgage or equity loan. The FHA designed HECM Saver as a second reverse mortgage option for the purpose of lowering upfront closing costs, for homeowners who want to borrow a smaller amount than what would be available with a HECM Standard loan. This option will be available for all HECM case numbers assigned on or after Oct. 4, 2010. “Despite the popularity of our HECM loan product, we have noted concerns that some senior citizens find that our continued on page 7

By Charlie W. Elliott Jr., MAI, SRA, ASA

Appraisal Review Goes High-Tech This month’s column is the first of three installments that I am writing to bring attention to and to extol the virtues of the three most-commonly used appraisal review reports as a quality control tool. These tools are:




loans, require specialized review attention. A few of them will require a lot of review and scrutiny. I would go so far as to say that the 80/20 rule is alive and well in the appraisal review business. Said another way, it is probable that 20 percent of the appraisals require 80 percent  The Electronic Appraisal Review, of the review resources invested by a bank  The Desk Review, and for a given lot of loan applications. The  The Field Review. process of resource allocation and the directing of scrutiny toward specific They are listed in the order of the appraisals requiring the most attention least comprehensive to the most com- can be an onerous one. prehensive. This series of How does one determine columns is designed to which of the appraisals repassist the reader in makresent the 20 percent that ing the proper decision as cause most of the heavy liftto which review tool is ing? How do we tell if a best for a given situation. given appraisal justifies a lot With all the concern of review time and expense? today about the mortgage Those in charge of the meltdown and what appraisal review budget caused it, much discussion may be interested to learn has been focused on the that there is a safe and ecoaccuracy of appraisals. nomical way to perform While we would all agree reviews without betting the that there are many confarm on each deal. It is “Realizing that the tributing factors to one of called the Electronic bank must make an the largest banking disasAppraisal Review and is an investment in the ters in history, the real electronic screening tool quality of its estate appraisal undoubtthat serves to identify the edly deserves its share of appraisals is one thing. qualities that are out of sync How much should be with the norm or the typithe blame. While there are many different types of invested is this quality cal. Electronic review tools shortcomings associated control another.� are offered by a number of with appraisals, most can mortgage IT companies, be detected with a proper appraisal including ACI and FNC. These review sysreview. It is the responsibility of the tems only work on standard appraisal financial institution to monitor the quali- forms, such as the Fannie Mae 1004 (stanty of all appraisals it uses in connection dard) or its 2055 (drive-by) formats. They with its collateralized loans. hone in on the fields of each form and This responsibility does not come address each part of the appraisal with without a monetary cost. Realizing that what are called rules. If a field does not the bank must make an investment in the conform to the pre-prescribed rule, it will quality of its appraisals is one thing. How receive a demerit for that part of the much should be invested is this quality appraisal. The demerits are cumulative control another. It would be very easy to depending what field a rule is broken in. for a bank spend more on the review of Some review systems have their own foran appraisal, than it did for the appraisal mula that is used to grade an appraisal. itself. These costs manifest themselves in Some fields carry more weight than others. a variety of ways, including office over- Once the review is complete, depending head, technology services, staff costs and upon the software program, a decision can review appraisers. More than half of the continued on page 14 appraisals, considered for collateralized

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news flash

continued from page 4

fees are too high for them,” said FHA Commissioner David H. Stevens. “In response, we created HECM Saver which will provide seniors with a reverse mortgage option that significantly lowers costs by almost eliminating the upfront Mortgage Insurance Premium (MIP) that is required under the standard HECM option.” HECM Saver will have an upfront premium of only 0.01 percent of the property’s value. Under the HECM Standard option, the upfront premium will remain at two percent. The MIP for both HECM Saver and HECM Standard will be charged monthly at an annual rate of 1.25 percent of the outstanding loan balance. The reduction in upfront fees will be accomplished while substantially lowering the risk to the FHA insurance fund because the principal limit or amount of money available to a borrower under the HECM Saver program will be reduced. Borrowers will receive approximately 10 to 18 percent less under the HECM Saver option, than they would receive under HECM Standard. HECM borrowers may opt to receive funds as a lump sum at loan origination, establish a line of credit or request fixed monthly payments that are disbursed for as long as they continue to live in the home. Funds are advanced to the borrower and interest accrues, but the outstanding amount does not have to be repaid until the borrower dies, leaves the home or sells the property. At that time, if the balance due on the loan exceeds the value of the home, FHA insurance pays the difference. For more information, visit

sale mandates automation and outsourcing of technology to reduce loss and risk for lenders.” The results are derived from CoreLogic’s examination of a representative data sample of single family residence (SFR) short sale transactions from the past two years. The CoreLogic transaction data used for the study represents 98 percent of real estate transactions and 85 percent of mortgage financing details. This large collection of historic and current data gives CoreLogic the ability to analyze seg-



ments of transactions, such as short sales, with tremendous precision. “By definition, short sales constitute a financial loss to lenders but will continue to be a necessary part of the mortgage industry as it seeks stabilization. The primary objective for lenders is to eliminate unnecessary loss,” said Tim Grace, senior vice president of fraud analytics for CoreLogic. “The best way to mitigate fraud risk and unnecessary loss is through a collaborative effort where lenders collectively share pre-closing and post-closing information. Lenders in the CoreLogic Mortgage Fraud Consortium will benefit greatly from sharing knowledge of concurrent transactions pending on short sale properties in real-time.”


continued on page 8



At REMN, we understand that mortgage companies perform best when they focus on what’s important: their customers. We are industry veterans and FHA specialists who understand that every application is precious.

urgency – it deserves. Even better, at REMN, same-day approvals are guaranteed.*

Learn more at

Real Estate Mortgage Network, Inc. is located at 499 Thornall Street, Second Floor, Edison, NJ 08837. NMLS #6521. This information is for use by mortgage professionals only and should not be distributed to or used by consumers or third parties. Information is accurate as of date of printing and is subject to change without notice.


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It’s about time.

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CoreLogic’s short sale survey finds lender loss amounts to $300 millionplus annually CoreLogic has announced the release of its 2010 Short Sale Research Study, a scientific, data-driven approach to analyzing mortgage short sales to identify trends, risks and opportunities for mortgage lenders. The estimated industry financial impact of short sale fraud is $310 million annually with the risk of ‘unnecessary losses’ occurring in one in every 53 short sale transactions. The average amount of unnecessary loss is $41,000 per short sale transaction. “A jobless economic recovery and weak home prices are fueling short sales volume,” said Craig Focardi, senior research director, consumer lending at The TowerGroup. “In many instances, government-sponsored or private short sale programs are a preferable alternative to foreclosure. However, important aspects of the short sale transaction are disclosure of all potential buyers to the seller and accurate home price comparables. The long duration of mortgage defaults and potential loss upon home

Highlights of the study include:  The number of short sales in the market has more than tripled since 2008 with the estimated annual volume at 400,000. Multiple variables indicate short sales will continue to be a frequent and important part of the mortgage industry.  Over half (55.8 percent) of all short sales occur in just four states (California, Florida, Texas, and Arizona).  Approximately four percent of short sales have a subsequent resale within 18 months. Investor driven short sales are not inherently bad. Investors provide the industry with necessary liquidity.

news flash

continued from page 7

 Short sale transactions may be deemed risky to the lender when either: The second sale amount is vastly higher than the short sale amount, and/or the two sale transactions are executed within a very short window of time.  Short sale fraud exists. While the exact definition of what constitutes fraud continues to evolve, CoreLogic analysis indicates lenders are consistently incurring more loss than necessary. Approximately one in every 53 (1.9 percent) short sale transactions was part of an egregious flip and therefore deemed risky.  It is estimated that lenders are incurring unnecessary losses of $300 million in short sale transactions annually.  Group, consortium analysis and reporting are necessary to fully leverage multiple-lender data and mitigate risk. For more information, visit

Interthinx study finds the stain of mortgage fraud tough to wipe away

Communities that are currently struggling from the effects of fraudulent

mortgage transactions may still be suffering years from now, according to research released by Interthinx. In its quarterly Mortgage Fraud Risk Report, Interthinx notes that six of the 10 riskiest metropolitan statistical areas (MSAs) in the nation were in the top 10 just a year ago, and all 10 of the MSAs that were at the top of the list for fraud last year are still in the top 20 today. The report analyzes national fraud risk and indices for the four most common types of mortgage fraud risk. Overall, analysts found that fraud risk increased by 12 percent, compared with the same period a year earlier. Currently, the national fraud risk index is 145. “As a result of our commitment to high-quality fraud detection and risk mitigation analytics, we are able to provide our lender clients a deeper analysis of the data that we collect,� said Kevin Coop, president of Interthinx. “The data distributed through our most recent report is designed to help lenders identify and plan for trends that will affect their risk mitigation strategies—and help assure their success.� Other findings in the quarterly report include:  Nevada replaces Arizona as the state

with the highest fraud risk, though both states have indices about 40 points greater than that of thirdplace California. The high indices in Nevada and Arizona are due mostly to the disproportionately high refinance risk in those states.  ZIP-code-level analysis showed that the majority of the 10 riskiest ZIP codes are, not surprisingly, located within MSAs that are in the “very risky� category. However, two of the three riskiest ZIP codes are located in Chicago, which at the MSA-level has an index less than the national value.  The identity fraud risk index had a quarter-on-quarter increase of 10 percent for the second consecutive quarter, the only type-specific fraud index to display a strong increasing trend over the last three quarters.  The occupancy fraud risk index decreased by nine percent from the previous quarter. It fell 11 percent between the fourth quarter of 2009 and the first quarter of 2010. The Mortgage Fraud Risk Report is an Interthinx information product that the company’s team of fraud experts created. The report was prepared with input from Constance Wilson, Ann Fulmer, Shane De Zilwa, and the Interthinx analytics team. This is the fifth time the company has released its quarterly report. The information is designed to provide deeper insight into current fraud trends through analysis

of the extensive pool of data the company amasses from the industry’s use of the Interthinx FraudGUARD loanlevel fraud detection tool. “For lenders, the report has become a must-read because of its analysis and its relevance to their businesses,� said Mike Zwerner, senior vice president for Interthinx. “The report also serves Interthinx as a road map for product innovation on behalf of lenders. We’re keeping a close eye on the identity fraud risk index, but more important, we’ve observed and responded to the disturbing trend of the valuation fraud index with development of such products as CVM, ValueGUARD, and Interthinx Review Appraisal Services.� For more information, visit

ALTA reports dip in title insurance premiums in Q2 The American Land Title Association (ALTA) has reported title insurance premiums written during the second quarter of 2010 decreased 8.5 percent when compared to the same period a year ago. According to ALTA’s preliminary Market Share Analysis, the title insurance industry generated $2.3 billion in title insurance premiums during the second quarter of 2010, down from $2.5 bilcontinued on page 10




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lion during the same period last year. For the first half of 2010, the industry reported $4.4 billion in title insurance premiums, down 2.9 percent when compared to the first half of 2009. “The latest market share analysis reflects an on-going recession in the housing market, with further downward pressure on home prices,” said Kurt Pfotenhauer, chief executive officer of ALTA. “With mortgage rates at record lows, we noticed a shift in more refinance transactions toward the latter part of the quarter. While an abundance of affordable homes and low interest rates make the market attractive, people need jobs to obtain credit and purchase homes.” The states generating the most title insurance premiums during the second quarter of 2010 were California ($350.7 million, down 13.6 percent compared to second-quarter 2009), Texas ($266.1 million, up 0.1 percent), Florida ($169.9 million, down 2.2 percent), New York ($150.8 million, up 2.4 percent) and Pennsylvania ($97.1 million, down 19.2 percent). Only five states and the District of Columbia reported increases in title insurance premiums written when compared to secondquarter 2009. “The varying results demonstrate real estate is a local business and each

market performs differently depending on local economic conditions,” Pfotenhauer said. “Title companies in each market will continue to produce policies that provide assurance to homeowner they have clear ownership to their property and that they will be insured against any mistake, fraud, risk or defect, whether it is known or unknown.” For more information, visit

State Foreclosure Prevention Working Group finds re-default rates on loan mods improving According to a report issued by the State Foreclosure Prevention Working Group, increased use of loan modifications resulting in significant payment reduction has succeeded in creating more sustainable loan modifications. The number of foreclosures continues to outpace the number of loan modifications being made, but there are reasons to be optimistic about the improvement in loan modification performance. The State Working Group’s data indicate that some recent modifications are performing better than loan modifications made earlier in the mortgage crisis. In addition, the State Working Group




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found that modifications which significantly reduce the capital balance of the loan have a lower rate of re-default compared to loan modifications overall. Currently, however, only one in five loan modifications reduce the loan amount, and the vast majority of loan modifications actually increase the loan amount by adding servicing charges and late payments to the loan balance. Despite these positive developments, the numbers of foreclosures continue to far outpace the number of loan modifications. The State Working Group finds that more than 60 percent of homeowners with serious delinquent loans are still not involved in any loss mitigation activity. Absent additional improvements in foreclosure prevention efforts, the State Working Group anticipates hundreds of thousands of foreclosures will occur later this year. “The report certainly indicates there are positive developments with regard to loan modifications,” said Neil Milner, president and chief executive officer of the Conference of State Bank Supervisors (CSBS). “However, there is still a tremendous amount of work to be done to prevent unnecessary foreclosures. Servicers must continue to perform meaningful outreach to those homeowners who are seriously delinquent and to perform modifications with significant principal reduction.” For more information, visit

Record number of 269,960 bank repossessions recorded in Q2 of 2010 Bank Foreclosures Sale, an online provider of bank-owned home listings and foreclosure information industry, has announced that bank foreclosures were up five percent in the second quarter of 2010. With 269,960 bank repossessions recorded, a new quarterly record was set for bank repossessions, which are up a staggering 38 percent from the second quarter of 2009. The news comes as a good sign for buyers and foreclosure investors looking at buying real estate-owned (REO) or bank-owned property. While the larger foreclosure property market actually decreased four percent during the second quarter, bank foreclosure repossessions mark an area where a surplus of properties could be a source of better deals. “Due to mortgage refinancing and loan modification programs, we’re not seeing as many new foreclosure properties come on to the market right now,” said Simon Campbell, a market analyst for Bank Foreclosures Sale. “But what we are seeing is homes that have been in foreclosure for a while are being repossessed by banks trying to work through thousands and thousands of defaulted loans.” With banks now clearing their backlog of foreclosures through repossession, they will soon look to sell them off to regain the capital lost on unpaid mortgages. Experts believe this could lead to record low prices on bank foreclosures and bank owned properties for foreclosure buyers.

“I’d say this summer and fall are the times to look for bank owned homes and bank REOs,” said Campbell. “With a big surplus, banks will be looking to unload properties, so it’s a good chance to find a low and competitive price.” According to Bank Foreclosures Sale, California led the nation in REO home filings during the second quarter, with over 45,700 currently inventoried throughout the state, especially in areas like Modesto, Los Angeles and Fresno, Calif. Florida was close behind with 32,860 REO properties, with hotspots in Fort Myers, Cape Coral and Fort Lauderdale, Fla. Other top states for bank repossessions and REOs during the second quarter were Michigan, Arizona, Georgia, Illinois and Nevada, all of which are expected to see continued foreclosure growth over the rest of 2010. For more information, visit

GAO releases report on mortgage scams Rep. Doris Matsui (D-CA) announced that the Government Accountability Office (GAO) has released a report on the current situation of mortgage foreclosure scams occurring around the country, and an analysis of the government’s efforts to prohibit such deceptive financial practices. In May 2009, Rep. Matsui and House Commerce, Trade and Consumer Protection Subcommittee Chairman Bobby Rush (D-IL) sent a letter to the GAO requesting a thorough report on these mortgage scams, which the California Department of Real Estate (DRE) had described as the biggest consumer fraud it faced that year. The report documents that because of the dramatic increase in foreclosed homes across the country since 2005, opportunities for scam artists were in abundance. But such valuable information had been kept out of the public record—until now. “I am pleased that the GAO has completed this long-overdue report that I requested, and have finally put necessary information out into the public domain,” said Rep. Matsui. “It is imperative that we understand the nature of the size, scope and type of mortgage scams so that we can help put in place necessary measures to stop them, and promote awareness for American homeowners about how to avoid them. In many instances, the report found that the same individuals that initially steered homeowners into sub-prime loans are the same bad actors who are offering false promises to struggling homeowners attempting to save their home. These unlawful and deceptive financial practices must stop. The GAO report sheds light on this serious problem occurring in Sacramento, and across the nation. I look forward to working with my colleagues on the Energy and Commerce Committee in reviewing this report and enacting legislation to address the loopholes that continued on page 13

Is the Broker-to-Banker Business Really Dead? By Elaine Roccio

now starting to look around and say, “I think I can make more money now by upgrading my approvalsâ€? ‌ and they can. The value of an existing mortgage banker, one who has survived the last two years, is a serious candidate for consideration. More options become available each month. The mortgage broker who has managed to save their money, cut some

“The industry no longer resembles itself from even two years ago, except in one regard ‌ the constant drive to find a way to ‘make money.’â€? of resilient, hard-working people who like to exercise their “optionsâ€? to remain profitable. Elaine Roccio is a mortgage banking consultant with 25-plus years of mortgage experience and 10-plus years specializing in the broker-to-banker business. She may be reached by e-mail at or visit

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It has been a long time since Iâ&#x20AC;&#x2122;ve written an article about the broker-tobanker business, but it appears that the time has come around once again. From the ashes of the spectacular and abrupt meltdown of the mortgage industry, has come the tinkering of the federal government with matters that are really beyond their level of expertise. From the new legislation, which has yet to prove that it is a benefit to anyone remaining in this industry, comes the ever resourceful mortgage broker. The mortgage brokers who understood the value of â&#x20AC;&#x153;quality controlâ&#x20AC;? or â&#x20AC;&#x153;compliance performanceâ&#x20AC;? for the most part, are still standing and thriving and trying to figure out what to do next. Those who invested in advanced computer software programs, like Ellie Mae or Pro Lender Solutions, to assist them with pipeline management and the constant drum of â&#x20AC;&#x153;quality controlâ&#x20AC;? have reaped the reward of their investment. The industry no longer resembles itself from even two years ago, except in one regard â&#x20AC;Ś the constant drive to find a way to â&#x20AC;&#x153;make money.â&#x20AC;? The crazy thing about the mortgage business is that if you love what you do, and it gets into your blood, you will stick with it no matter what. The â&#x20AC;&#x153;highâ&#x20AC;? comes not only from helping borrowers achieve their goals of homeownership in whatever form that takes, but also from how to â&#x20AC;&#x153;beat the systemâ&#x20AC;? and remain profitable under incredibly adverse conditions. Slowly but surely, the new rules and regulations are re-shaping the conditions under which the mortgage industry will function for many years into the future. Good, bad or indifferent, we learn to live with them and adapt. Slowly but surely, the warehouse lenders that retreated or were put out of business are beginning to test the waters again for business. As always, the question is, â&#x20AC;&#x153;Can we make a profit and not get burned?â&#x20AC;? The answer is increasingly, â&#x20AC;&#x153;Yes.â&#x20AC;? Ginnie Mae, Fannie Mae and Freddie Mac have raised their net worth requirements from $1 million to $2.5 million, an unreachable number even for most of the existing mortgage bankers. One has to wonder the logic of that strategy, given that their future existence remains in doubt. Be that as it may, the correspondent lenders who also raised their net worth requirements, and are now starting to think â&#x20AC;&#x153;volumeâ&#x20AC;? and becoming â&#x20AC;&#x153;competitiveâ&#x20AC;? once again. For those mortgage brokers who did transition to mortgage banker status and still remain open for business, are

overhead, realign their loan production strategy and have maintained a clean record, is also a viable applicant for consideration. Again, more options become available each month. The loss of jobs in the mortgage industry has also resulted in the loss of licensed loan officers, who have just decided to give it up. The demand for loans, however, is still strong, as opposed to what is quoted on the news or through mainstream media coverage. The fewer the â&#x20AC;&#x153;players,â&#x20AC;? the greater the share of loan production is to the remaining few. The future may look bleak to some. It may look as though there are no more options, but the mortgage business is, and always has been, made up

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

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Bankrate study finds New Yorkers pay the most to close a home Photo credit: Comstock

A study released by Bankrate Inc. has revealed that the costs associated with buying a home may are on the rise. Bankrate’s 2010 Closing Costs Survey continued on page 15

Shockingly, there have been more than 72,000 failed SAFE test attempts according to reports from the Nationwide Mortgage Licensing System (NMLS). If one of the objectives of SAFE was to raise the bar of entry into the industry and thereby protect consumers from originators who don’t test well, then mission accomplished. Here’s a question we should ask, “Is the light of protections worth the candle of energy, time and cost?” The latest data indicates more than 28,700 people have given up and/or have failed out of the licensing process altogether. A pattern has emerged that once a person fails their initial test attempt, there is a less than 45 percent chance of passing on the next attempt. We should wonder if these people are now migrating to the banks. If the SAFE Test is a mechanism for consumer protection, then who will be protecting the future borrowers of these originators?

Cost of the candle The figures indicate only 65 percent of total national test attempts are successful. It’s better on the state tests at 79 percent. When calculating test retakes, the costs exceed $3.6 million. This does not include the 28,700 people who have quit trying and the money they have spent on education and testing. My conservative estimates for these losses are approximately $6.73 million. None of these figures take into consideration the cost of travel, hotel expenses, study materials or test prep tools. There is also no way to account for the heartache of failing or the anxiety of the licensing process in general. If you were to look at the total cost for education, testing and licensing of the approximately 111,000 mortgage loan originators who are SAFE Act compliant thus far, the figures go above $80 million. These costs will surely soar past $100 million by the Dec. 31 deadlines.

Is it worth the light? Every shop is bearing the cost. Many companies are spending millions of dollars on education and licensing. No one can calculate the cost of lost production, frustration and disruption to its organization, or the costs of examination and enforcement that has just begun. The question remains, what is all this energy, time and dollars being spent for? Will this massive effort result in a better industry? We hope the SAFE Act has built a brand new stadium with a higher playing field on which to work. You will no longer be competing against shortsighted amateurs, dishonest fraudsters or those that lack the ability or commitment to learn this business. The candle of licensure is meant to illuminate a new profession where knowledgeable loan originators have chosen to compete.

SAFE brand You are paying a high price for your license. Frame it proudly knowing you have earned it, when not everyone could. Use it to differentiate yourself. Think about it; if you were borrowing $350,000 and you could choose between an unlicensed or a licensed professional originator, which would you choose? My guess is you’re going with the SAFE brand. It will be up to you, to make the “Light Worth the Candle.” Paul Donohue, CRMS is a 23-year industry professional and founder of Abacus Mortgage Training and Education. Paul served on two NMLS working groups, establishing the new national education protocols. Go to to find out more about your obligations for testing, education and licensure, or call (888) 341-7767.



Hagens Berman Sobol Shapiro LLP has announced that it has filed a classaction lawsuit against Charles Schwab & Company on behalf of investors who owned shares in the Schwab Total Bond Market Fund as of Nov. 30, 2006. The suit, filed in the U.S. District Court for the Northern District of California, accuses San Francisco-based Charles Schwab of causing the fund to deviate from its fundamental business objective to track the Lehman Brothers U.S. Aggregate Bond Index.

Is the Light Worth the Candle?


Class action suit filed against Charles Schwab for high-risk MBS

“We intend to prove that Charles Schwab caused investors to suffer losses when it began investing in volatile, highrisk mortgage-backed securities without informing shareholders or seeking shareholder approval through a vote, which the company was obligated to do, according to the fund’s prospectus,” said Hagens Berman Managing Partner and plaintiffs’ attorney Steve Berman. The plaintiffs contend that the fund deviated from its stated investment objective by investing a material percentage of its portfolio in high-risk, nonagency collateralized mortgage obligations, or CMOs, which were not part of the Lehman Bros. U.S. Aggregate Bond Index, according to the complaint. Plaintiffs attorneys also contend that the fund deviated from its stated fundamental investment objective by investing more than 25 percent of its total assets in non-agency mortgage-backed securities and CMOs, the suit alleges. Schwab’s deviation from the fund’s primary investment objective led to tens of millions of dollars in shareholder losses due to a long-term decline in the value of non-agency mortgage-backed securities, the lawsuit contends. Plaintiffs’ attorneys believe that the fund’s deviation from its stated investment objective caused investors to experience a negative 12.64 percent differential in total return for the fund compared to the Lehman Bros. U.S. Aggregate Bond Index from Aug. 31, 2007 to Feb. 27, 2009, the lawsuit contends. During that period, the suit states, the fund’s shareholders suffered a negative total return of 4.8 percent, compared to a positive total return of 7.85 percent for the Lehman Bros. U.S. Aggregate Bond Index. The suit accuses Charles Schwab of violations of the California Business & Professions Code. Plaintiffs have asked the court to award restitution to all class members, to order Charles Schwab to return any management or other fees collected after the fund’s alleged deviation from its fundamental business objectives and to order Charles Schwab to cover the class’ legal costs. A separate action was previously filed against Schwab by other counsel, but the Ninth Circuit Court of Appeals recently remanded that case back to district court, ruling the plaintiff could not pursue its claim under the Investment Company Act of 1940. For more information, visit 

allow these scams to continue.” In the Spring of 2009, Chairman Rush introduced HR 2309, the Consumer Credit and Debt Protection Act, which would help address many of these loopholes. Rep. Matsui, an original cosponsor of HR 2309, included a provision to the bill which would direct the Federal Trade Commission (FTC) to develop standards to prohibit mortgage foreclosure scams. Rep. Matsui’s provision also puts an end to so-called advance-fee loan modifications so homeowners do not pay an advanced fee, ranging from $500 to more than $5,000, for a loan modification service never rendered. Many Sacramento homeowners were tricked into paying an upfront fee for the false promise of modifying their mortgage loans, only to not receive a service. The Matsui provision would end that practice for good. This legislation is now before the Energy and Commerce Committee. The GAO report found two principal types of foreclosure rescues and loan medication schemes perpetrated against consumers: the advance-fee loan modification schemes, as well as sales-leaseback schemes. The advance-fee scheme occurs when a person charges a fee in advance of renegotiating someone’s mortgage with a lender, and then provides little or no service. The sales-leaseback scheme involves someone convincing a homeowner at risk of foreclosure to transfer the deed of their home to them. The GAO report also found two newer schemes that have been emerging. The first is a forensic mortgage loan audit scam, which the report explained as a “new twist on foreclosure rescue fraud.” In this scam, someone charges a fee to conduct an “audit” intended to find regulatory violations in the mortgage loan origination in order to allow the homeowner to use the “audit” results to avoid foreclosure, accelerate the loan modification process, reduce the loan principal, or even cancel the loan. The other is described as a variation of advance-fee scams in which a person promises to eliminate a homeowner’s mortgage or other debt on the premise that the debts were illegal or the government would assume responsibility. For more information, visit

the five comprehension questions (out of 10) HECM prospects are required to answer to be issued a certificate. The fuss over FIT is understandable as FIT is fairly new. It is change. Change has come to reverse mortgage counseling (and lending). Atare E. Agbamu is author of Think Reverse! and more than 140 articles on reverse mortgages. Since 2002, he writes the nationally-distributed column, “Forward on Reverse.” A former director of reverse mortgages at Minneapolis-based AdvisorNet Mortgage LLC, Agbamu has years of

FIT for Reverse Mortgage Lenders: Part II The Fuss Over FIT Lord HUD’s new FIT mandate for HECM counselors is giving some originators a fit




So, what is the fuss over FIT? We look at seven fusses and counter-fusses before moving on to the FIT risk factors and questions in other articles in the series. As designer of the Financial Interview Tool or FIT, the counter-fusses are the National Council on Aging (NCOA’s) responses to the fuss over FIT. Fuss # 1: FIT is addressing a demographic that no longer exists (field data says average HECM borrower age is now 63). Counter-Fuss: Younger borrowers are taking out fixed-rate Home Equity Conversion Mortgages (HECMs). As other products are developed, the demographic profile of borrowers may change again. FIT reminds seniors that their life circumstances may change rapidly because of an accident, illness or the loss of a spouse. Fuss #2: FIT is too invasive. Seniors might refuse to answer the questions if a third person (family or an advisor) is present. Counter-Fuss: Seniors can decide who will participate in the counseling session. Family members and advisors often find it difficult to discuss sensitive issues such as declining health with a senior. The FIT review may be a good opportunity to begin to address these issues and their implications for the senior’s well-being. Fuss #3: FIT is static; it does not anticipate changes. Counter-Fuss: As with many budgeting tools, FIT focuses on a client’s current financial situation. We may add questions about post-retirement income changes. Fuss #4: FIT could add to counseling time.

Counter-Fuss: Absolutely! A good counseling session should last at least an hour. Fuss # 5: FIT is borderline “financial planning,” but HECM counselors are not trained and certified financial planners. Counter-Fuss: At one point, the U.S. Department of Housing & Urban Development (HUD) was considering having counselors conduct a very detailed budget analysis to determine the suitability of a reverse mortgage for their client. FIT brings a more holistic perspective to a client’s financial situation. It helps them understand their risks and options in taking out a reverse mortgage. Fuss #6: FIT takes away the HECM counselor’s discretion. Counter-Fuss: FIT helps to standardize counseling, a concern of the lending community for years. The goal of the FIT review is to stimulate discussion about issues that may impact the senior. In addition, FIT collects data about the characteristics of potential borrowers, which can help both lenders and policymakers to better understand the needs and vulnerabilities of older homeowners. Fuss #7: Prospects’ failure to answer FIT questions could cost them their HECM Counseling Certificates, thus the ability to get HECMs. Counter-Fuss: FIT questions have no right or wrong answers. It will be impossible for counselors to conduct a budget analysis as required by HUD if seniors refuse to answer FIT questions. Seniors can provide approximate income if this is a problem for them. Besides, there is no relationship between the FIT questions and

value nation

hands-on experience marketing and originating reverse mortgages. Through his advisory, ThinkReverse LLC, Agbamu advises financial professionals, institutions and regulators across the country. In a 2007 national report on reverse mortgages, AARP cited Agbamu’s work. He can be reached by phone at (612) 203-9434 and e-mail at Visit author Atare E. Agbamu’s blog at for his thoughts and insights on the reverse mortgage marketplace.

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be made relative to whether the appraisal has passed scrutiny. This is where the electronics stop and humans begin. If there are few deficiencies listed, the appraisal may pass the review test and the appraisal may be considered appropriate to qualify the property for collateral. Conversely, if a number of rules are broken, the appraisal may fail the test. In such a case, the appraisal will be subject to more tests. What happens next will vary with those performing the quality control test. Some may contact the appraiser for explanations; others may order additional higher-level review appraisals, while others may simply reject the appraisal from further consideration. It is at this juncture where the competence of the review staff can be the determining factor as to whether the lender makes a good or bad loan. Whether it is an underwriter, the chief appraiser or an outside quality control vendor, the lender is investing its future in the hands of those making this call. This responsibility should be assigned only to highly-trained experts, who have a depth of risk management and appraisal review experience. Institutions without adequate in-house expertise may consider outsourcing this risk management function to an independent appraisal review service provider, to insure high-quality results and meet regulatory compliance mandates. In addition, it is not just this one deal, but all of the deals that are approved or rejected by the institution that make up the organization’s track record and determine its economic success. It is also important to note that when properly used, the Electronic Appraisal Review is blind to bias and can help reduce fraud. Even the most sophisticated review provided by a certified appraisal does not carry a guarantee

against bias with it. This factor is a big plus for the Electronic Review, where regulatory compliance is an issue. Cost is another important factor when considering Electronic Reviews. Typically, they can be purchased at a fraction of that of a review by a human with state certification credentials. Costs vary, but depending upon the quality and details, the raw report can be purchased at prices of $10 or less. Depending upon the amount of labor required in the handling and interpreting the review report, an Electronic Review, complete with critique, can usually be completed for under $50, and, in some cases, substantially less. Electronic Appraisal Reviews are not subject to Uniform Standards of Professional Appraisal Practice (USPAP), since they are not prepared by people. Appraisal Reviews, such as the Desk Review and the Field Review, do require USPAP-reviewer compliance. In summary, the Electronic Appraisal Review, in many cases, may provide all of the information needed for a lender to make a final decision, regarding the quality of the appraisal under consideration. It can save a lender a great deal of money that may have otherwise been needlessly spent on in-depth appraisal reviews for perfectly good appraisals. Since Electronic Reviews are not prepared by humans, there is less potential for fraud. That, coupled with the fact that it is less expensive, makes the Electronic Appraisal Review a powerful quality control tool, something that cannot be ignored. Charlie W. Elliott Jr., MAI, SRA, is president of Elliott & Company Appraisers, a national real estate appraisal company. He can be reached at (800) 854-5889, e-mail or visit his company’s Web site,

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Fannie Mae has issued Selling Guide Announcement SEL-2010-11, which clarifies that lenders are not required to obtain a second credit report just before loan closing. Rather, Fannie Mae is reminding lenders to have processes in place to facilitate borrower disclosure of changes in financial circumstances throughout the origination process. “This is an important update, because every mortgage loan delivered to Fannie Mae has to be underwritten to establish that the borrower is able to repay the debt,” said Deborah SladeHorsey, vice president for single-family risk policy. “Our primary objectives are to support borrowers’ ability to sustain homeownership and to strike a reasonable balance between requirements that may reduce loan repurchases and requirements that might over-burden lenders’ origination processes.” The updated policy reminds lenders that Fannie Mae expects them to have continued on page 24

Fannie Mae recently hosted its inaugural Quality Control Vendor Summit that included the leading quality control (QC) vendors in the county. Fannie Mae is very serious about improving loan quality and improving the Loan Quality Initiative (LQI). One discussion we had was how to monitor the effectiveness of pre-funding QC because many tools involved in pre-funding QC are there to help fix loan defects in order to get the loan through underwriting or to deny it. One of the most effective pre-funding QC tools available is the tax transcript which is pulled when the borrower signs the 4506-T. The lender is able to affirm much of the applicant’s information, such as the borrower’s Social Security Number, past residences, past income, past employers and can check amended returns. What if the mortgage industry was to apply a similar methodology to appraisals in order to reduce loan defects from the appraiser or appraisal? This process is called Appraisal Defect Detection & Prevention (ADDP) or “Add-Pee.” ADDP is the new up and coming pre-funding QC process that will change the way appraisers, appraisal management companies (AMCs), and lenders will handle appraisals and appraisers. This new process may even evolve the Home Valuation Code of Conduct (HVCC) as we know it today. ADDP can be used on the front end of the loan process, prior to funding, and on the back end in the post-closing QC process. ADDP may also reduce the requirement for a Field Review Appraisal and automated valuation model (AVM). I foresee the appraiser being held accountable for the quality of the valuation with technologies behind ADDP. The appraiser’s valuation may hold higher credibility if he or she submits the appraisal to an AMC or lender with data behind the ADDP. The lender wants to reduce the amount of underwriting stipulations and conditions on the appraisal in order to expedite the closing. The AMC and appraiser do not want to touch or revisit the appraisal again and the broker and the borrower is left hanging waiting on the appraisal so they can close the loan. In many loan and underwriting scenarios, it is the appraisal or appraiser that delays a closing. Those wholesale lenders who have incorporated ADDP as part of their prefunding QC process have seen a significant drop in repurchase claims based on collateral. Also, those AMCs who incorporate ADDP for the banks or lenders are making their services more valuable by reducing the probability of a change in an AMC vendor. The ADDP adds so much more creditability to the collateral valuation that I could see brokers getting back in the appraisal ordering process if the broker had the ADDP incorporated into their QC plan and was providing the collateral data to the lender with the appraisal submission. LQI is about compliance, and Fannie Mae is looking for effective QC policies and procedures. ADDP seeks to reduce loan defects and helps in loan approval efficiency. It can be applied down to the broker and appraiser levels as well. If you have not implemented ADDP as part of your QC plan, you are assuming risk in delayed closings and potential loan repurchases based on collateral. Tommy A. Duncan, CMT is executive vice president of Quality Mortgage Services LLC. For answers to your QC and FHA questions, please contact Tommy at (615) 591-2528 or e-mail You may also visit Quality Mortgage Services LLC on the Web at

Sponsored by



The Federal Reserve Board (FRB) has issued an interim rule that revises the disclosure requirements for closed-end mortgage loans under Regulation Z (Truth-in-Lending). The interim rule implements provisions of the Mortgage Disclosure Improvement Act (MDIA) that require lenders to disclose how borrowers’ regular mortgage payments can change over time. The MDIA, which amended the Truth-in-Lending Act (TILA), seeks to ensure that mortgage borrowers are alerted to the risks of payment increases before they take out mortgage loans

Fannie Mae clarifies undisclosed liabilities policy

By Tommy A. Duncan, CMT


Federal Reserve Board revises disclosure requirements for closed-end mortgages

with variable rates or payments. Accordingly, under the interim rule, lenders‘ cost disclosures must include a payment summary in the form of a table, stating the following:  The initial interest rate together with the corresponding monthly payment;  For adjustable-rate or step-rate loans, the maximum interest rate and payment that can occur during the first five years and a “worst case” example showing the maximum rate and payment possible over the life of the loan; and  The fact that consumers might not be able to avoid increased payments by refinancing their loans. The interim rule also requires lenders to disclose certain features, such as balloon payments, or options to make only minimum payments that will cause loan amounts to increase. All of the disclosures required in the interim rule were developed through several rounds of qualitative consumer testing, including one-on-one interviews with consumers around the country. Lenders must comply with the interim rule for applications they receive on or after Jan. 30, 2011, as specified in the MDIA. Lenders have the option, however, of providing disclosures that comply with the interim rule before that date. The Board is also soliciting comment on the interim rule for 60 days after publication in the Federal Register before considering the adoption of a permanent rule. For more information, visit 

reveals that the average origination and title fees on a $200,000 mortgage this year totaled $3,741, up from $2,732 in 2009. In the study’s geographical breakdown, New York leads the nation at an average fee of $5,623, with Texas, Utah, San Francisco and Los Angeles rounding out the top five. Arkansas is the least expensive area with an average fee of $3,007, replacing Nevada, now number 34, at the bottom of the list. One of the reasons for such a dramatic rise in the average estimated closing costs across the nation has to do with new regulations implemented in January of this year. When providing a potential borrower a Good Faith Estimate (GFE) of costs, regulations now require lenders to provide a Title and Closing Fee estimate within 10 percent of what the final cost will be; in previous years, estimates could fall lower on the spectrum without penalty for the lender. “The big rise in average closing costs may scare some homebuyers, but it’s important to keep things in perspective,” said Greg McBride, CFA, senior financial analyst for “Increased regulation on lenders’ GFEs means more accurate estimates and less expenses popping up for consumers on the back end.” For this study, Bankrate surveyed one area in 49 states, two areas in California (Los Angeles and San Francisco) and the District of Columbia. Researchers picked a ZIP code in some of the largest cities in each state and requested information on the closing costs for at $200,000 loan. They requested fees on a 30-year, fixed-rate mortgage for a borrower with a 20 percent downpayment and good credit to buy a single-family house. Bankrate’s survey includes lenders’ origination fees and title and settlement fees, and not taxes or prepaid items. For more information, visit

For more information on the National Association of Mortgage Brokers, visit

A Message From NAMB/WEST 2010 Conference Committee Chair Donald J. Frommeyer, CRMS Redefining innovation ... one step at a time!




I, along with Co-Chair John Stevens, have been serving as chairmen of the NAMB/WEST Committee for about eight months now, and I can tell you that this will be the best conference that we have ever hosted in Las Vegas. It has always been a great place to visit, but now this is the time you can come and learn about what is going on in the current state of the mortgage world. We have kept the cost of registration at a reasonable $200 for the entire event and the rooms at the MGM Grand, our host hotel, at $105 per night. These rooms can be reserved from Friday-Tuesday, Dec. 3-7. Of all years, this will be the year that you need to come to NAMB/WEST. With everything on the verge of changing the way we have been doing business in the mortgage industry, you need to be on hand in Vegas to ask the questions and get all the answers you need to know. It all starts Saturday, Dec. 4, with speakers from Genworth and the American Association of Asset Protection. Then, at 9:15 a.m. in the Main Reception Room, we will present Dave Duncan from Fannie Mae who will discuss the state of the economy and what Fannie Mae is doing in these economic times. Following this, we will feature a speaker from the U.S. Department of Housing & Urban Development (HUD) who will be discussing the state of the Federal Housing Administration (FHA), a session that I feel will be a very informative and important one for all mortgage professionals. At noon, lunch will be served and our featured speaker, California Rep. Gary Miller, will fill us in on the latest rumblings from Capitol Hill. We will also have video features from guests that have been invited to make comments throughout the day. All registered attendees will be able to spend Saturday evening at the NAMB/WEST 2010 Opening Reception from 7:00 p.m.-9:00 p.m. We will have music and food and drink, and prize drawings for all attendees to participate in to win tickets to KA by Cirque Soleil and other prizes. Sunday will be dedicated to the Government Affairs Panel. From 8:00 a.m.11:00 a.m., NAMB will put their best minds together and meet with you to cover all of the newsworthy items that are currently making the headlines. Mike Anderson, NAMB’s Government Affairs Committee Chair, will lead this panel discussion that will cover a range of topics, including loan officer compensation, new regulations and legislation, licensing, and other pertinent industry topics, and then, the panel will turn the floor over to the audience to field their questions. We have allotted three hours for this session, plenty of time to answer all the questions you may have. At 1:00 p.m., we invite you to come join the exhibitors that have gathered in the Exhibit Hall for an eye-opening adventure of seeing new lenders and vendors that have come into the market and companies that are here for your business. The exhibit hall portion of the program will last until 6:00 p.m., at which time, you are invited to attend a networking reception until 8:00 p.m. with exhibitors, loan officers, owners, and NAMB’s board of directors for an opportunity to sit, relax and unwind from this great conference. I strongly urge you to make your reservations now by visiting

and registering for the event. If you complete your registration today, you will be entered into the weekly drawings for a gift basket compliments of the states representing the NAMB/WEST Committee. See you in Vegas! Donald J. Frommeyer, CRMS, 2010 NAMB/WEST Committee Chair and Vice President National Association of Mortgage Brokers

Will Wholesalers Get Tougher to Keep Brokers Alive? By Deb Killian, CRMS, NAMB Board Member

What insanity! How can wholesalers help the broker channel survive the tsunami of regulations and ever-changing compliance? A shift in perspective is what we need. As a SAFE Act course instructor, I have a unique opportunity to speak with my friends and peers who are out there trying to figure out what the broker business model will ultimately look like. To be sure, it will continue to evolve and we won’t really know until Elizabeth Warren and her ultimate successor at the Consumer Financial Protection Bureau (CFPB), the Federal Reserve, Congress, Fannie Mae and Freddie Mac, and every other entity that has their two cents to add, is finished discussing, conducting hearings, writing and creating rules related to mortgage origination, in particular, the mortgage broker community. That’s why we need representation in Washington, D.C. The regulatory environment we are in is unprecedented. I have been a mortgage originator since 1994 and have owned my own company since 1998. There have been more changes in the last two years than the previous 10 years. It’s hard to keep up with. Just when you think you have a system down, along come more changes. The Federal Housing Administration (FHA), Fannie Mae and Freddie Mac define the base. With fear of buybacks, lenders then take the base and create something totally different. Why you may ask … because it’s the Golden Rule. They have the gold, and our clients want it, so they get to make the rules. Fair enough. We need to be thankful for the lenders who have hung in there with the wholesale channels to provide brokers with product. The one complaint I hear consistently in all of my classes (I teach the 20-hour SAFE course and a Connecticut Mortgage Law test prep course) is how come the brokers are taking the brunt of what everyone knows was created by the big banks and Wall Street? My answer: We didn’t have enough numbers to fight anything. “Why ?” they ask, haven’t the Realtors been called on the carpet? My answer: The National Association of Realtors (NAR). Real estate agents need access to products. Their product is the multiple listing services (MLS) that provide information for buyers and sellers. In many states, access to the MLS is gained by membership through a local real estate board. If you don’t belong to the board or the MLS, you cannot gain access to the services needed to conduct your business. Do you know how many members NAR has? As of Aug. 31, 2010 NAR had 1,089,839 members.1 Over one million members!

Deb Killian, CRMS of Charter Oak Lending Group, LLC is a member of the National Association of Mortgage Brokers board of directors. She may be reached by phone at (203) 778-9999, ext. 103 or e-mail

Footnotes 1-National Association of Realtors, Aug. 31, 2010, Monthly Membership Report. 2-Web site:

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Imagine a world where wholesalers required anyone selling them loans, to be a member of a professional organization in order to have access to their products, and encouraged and supported mortgage loan originator (MLO) education. Ever notice how many nationally-recognized designations are available for Realtors? “If the biggest problem lenders What would wholesalers gain? A betface today is repurchases, maybe ter educated and more accountable broit’s time to consider prevention ker base. Imagine a world where an eduinstead of punishment.” cational advisory committee was comprised of wholesalers who were continually providing input on current issues and what education was needed with one constant goal: Quality originations. If the biggest problem lenders face today is repurchases, maybe it’s time to consider prevention instead of punishment. The quality of loans is still not where it needs to be. Originators submit poorly structured loans, loans that are non-compliant, or worse, loans that are fraudulent. The solution is easy … the implementation is challenging at best, but not insurmountable. According to,2 fraud is up 55 percent from the first quarter of 2010 to the second quarter of 2010 … an interesting fact if true, now that banks are originating the lion’s share of the business. “The government’s push to bring mortgage fraudsters to justice is certainly welcome, but the cases brought to date represent only the tip of the iceberg in terms of how much fraud was actually committed during the real estate boom,” said Ann Fulmer, vice president business relations at Interthinx. “It’s sobering to know that only a small minority of cases are ever prosecuted, and it ought to serve as a reminder that the industry must protect itself by focusing on prevention.” Prevention starts with awareness. Codes of ethics, professional mindsets, education and ongoing learning, is what it takes to originate quality loans. I may be going out on a limb here, but maybe individuals who want to fly under the radar, not participate in industry efforts and only take the bare minimum to get by may be the ones that wholesalers have the trouble with. Can investing time and money to belong to an association be indicative of a propensity toward compliance and ethical behavior? Joining state and national associations in and of itself is only a start and does not guarantee the existence of ethical behavior. However, it’s a good place to start. To encourage participation, wholesalers could strongly suggest that they want brokers who demonstrate professionalism. The more brokers, the more the associations can protect the broker channel. While we have taken the brunt of it all over the last year or two, as long as we are still here, we should try new strategies and make a concerted effort to change our thinking to match what is happening in our industry. For mortgage brokers who are viewed as scapegoats, wouldn’t it have been great if everyone had been a member of the National Association of Mortgage Brokers (NAMB)? Wouldn’t it have been great if we were all members of a strong trade association that could have had more resources to protect the brokers and originators who are now fighting the fight of their lives? Would it have been a wise thing to support an association like NAMB that had hundreds of members fighting for the benefit of non-members? Oh, and the cost … simply one processing fee every year! We are under attack because originators making hundreds of thousands of dollars per year, wouldn’t part with just $350. Who do we have to blame, really?

Paul Donohue, Founder Abacus Mortgage Training and Education




Each month, National Mortgage Professional Magazine will focus on one of the industry’s top players in our “Mortgage Professional of the Month” feature. Our readers are encouraged to contact us by e-mail at for consideration in being featured in a future “Mortgage Professional of the Month” column. This month, we had a chance to chat with Paul Donohue, founder of Abacus Mortgage Training and Education. Over the years, Paul has been very active with industry trade associations, including national involvement with the National Association of Mortgage Brokers, and locally in his home state of North Carolina with the North Carolina Association of Mortgage Professionals. He has served NAMB in a number of volunteer roles, including time spent as a member of the NAMB Ethics Task Force, North Carolina’s representative to the NAMB Delegate Council, and was a certified instructor with the NAMB Educational Foundation. In 1997, Paul was honored with the NAMB Teamwork in Education Award and in 1998, was named NAMB Regional Broker of the Year. Serving his home state of North

Carolina’s NAMB state affiliate, NCAMP, Paul served NCAMP as statewide association president in 1997 and was named the winner of the 1996 NCAMP Broker of the Year Award. He began his career as a custom home builder, crafting unique architecture in Blacksburg, Va. He entered the mortgage industry in 1987 and founded MoneyNet Mortgage Planning Services in North Carolina in 1989. Paul has personally originated more than 4,000 loan applications. Teaching from a lifetime of accomplishment and personal experience, Paul believes his purpose is to give the real estate finance industry the tools, skills and vision it needs to thrive in an everchanging marketplace. Paul’s personal code of integrity and personal philosophy of reciprocity are woven throughout his teachings and storytelling. Paul grew up in Buffalo, N.Y. and as a young adventurer, spent three years traveling the United States before settling in Southwest Virginia. Married since 1978, he and his wife Deonna have raised two sons, Austin and Francis. They are currently building and living on the horse farm of their dreams in Summerfield, just north of Greensboro, N.C. Paul is a member of the Nationwide Mortgage Licensing System (NMLS) Education Provider Working Groups, is the author of more than a half-dozen courses approved for state mandatory education and a regularly featured columnist in industry magazines and publications.

builder in Blacksburg, Va. Virginia Tech has a terrific architecture school and we were building fine energy-efficient passive solar homes. It was very cuttingedge architecture for the times. I loved custom home building, especially the interaction with the families I served. It was extremely rewarding; however, after 10 years of pickup trucks and nail aprons, I was ready to make a change. My wife and I had two small children, and I wanted something where I could create a better family life … and, I wanted to buy a tie! To me, with my blue-collar background, a white collar job represented a life change. I answered an ad in the Roanoke Times that a mortgage broker was looking for an originator for the Roanoke, Va. area. When I discovered I could make a great living, control my own time and serve homeowners, I was in. I knew nothing about mortgages or finances, but I loved home sales and was willing to work hard to learn the business. That was early in 1987, back at the beginnings of the mortgage broker industry. My company’s registration number was seven. Within six months, the owner made me the general manager and I stayed with him through the end of 1988. In 1989 I started MoneyNet, Mortgage Planning Services, a mortgage brokerage shop that I ran until the beginning of 2007.

What was the secret to your personal production success back then?

Two key concepts propelled my production over a 20-year origination career that allowed me to produce in excess of 4,000 loan applications. First was a singular focus on my customers. I discovered early on that my How did you first get involved in the mortgage customers borrowed money for their own reasons not mine. I learned that industry? I started my career in 1976, as a home every single person I met had a finan-

cial need and that need was always changing. When I fully embraced this truth, it caused me to focus entirely on my borrower’s needs. I was simply selling into my customer’s changing financial needs and timing was crucial. If they were not “mortgage ready” when I first met

“The mortgage business is one of those wonderful opportunities in which you can make a great living while providing a service that is meaningful.” them, and if I treated them well and stayed in front of them with consistent follow-ups, I could provide them with a loan when they were ready. This was the foundation of my practice, and we went on to build a tremendous repeat and referral business as a result. Secondly, I quickly grew frustrated with prospecting where I spent 90 percent of my time getting in front of a borrower and only 10 percent of my time actually selling. To correct this, I developed a team selling concept where entry level employees were trained to prospect, pre-screen applicants and coordinate in-home appointments for me and my senior loan originators. This created a training ground for new loan originators and allowed the more experienced originators to spend their time in front of families originating. The result was a “high volume, high margin” loan production team and we effectively served a lot of families.

Would you say that you utilize a particular management style to inspire and motivate your employees? I was a working manager and produced

loans personally until 2007, when I transitioned my career. It’s a principle of leadership that dictates, “You cannot teach what you don’t know and you cannot lead where you won’t go.” One of my great mentors, Bill Brooks, taught me this. The leader sets the pace, communicates clearly the expectations and then demonstrates the values of the organization through his or her actions. The sales manager is the most important job in a sales organization, yet I find it’s the least understood position and gets the least amount of training and attention. Sales management consists of coaching, teaching and reinforcing expectations.

“There are givers and takers in this world, and I find most people want to do the right thing if they know why and how to do it.” Ultimately, you get the results that you measure and hold people accountable for. This cannot be done from behind a desk. Effective sales management happens in real-time, on the production floor and in the field. You must be committed to your originator’s success, which means direct involvement. It demonstrates that you are serious, that you care about individuals and I find people respond well to this.

thing, it cannot be unlearned. Education represents growth and progress. Through the late 1990s, I was teaching and speaking across the industry. As the laws changed, individual licensing and education created an opportunity I gravitated towards. In 2000, I started my education company that has evolved into Abacus Mortgage Training and Education. With the SAFE Act and the development of the Nationwide Mortgage Licensing System (NMLS), I was privileged to serve on two working groups developing the education protocols for mortgage loan originator licensure. As an NMLS education provider, we are teaching nationwide and providing test preparation tools for the industry. It has been extraordinarily satisfying to play a part in educating our industry.

As a former mortgage broker and past president of the North Carolina Association of Mortgage Professionals, how do you feel about the current role of the mortgage broker in the marketplace? This is a very complex issue in which mortgage brokers have been marked as the scapegoat and have been outmanipulated politically by influential power brokers with very deep pockets. With that said, I still think the mortgage broker can reemerge as a significant player in the primary market. With proper systemic safeguards, mortgage brokers still represent the least cost

to the thinking that it is over for the mortgage broker. The relationship between the mortgage broker and its sponsoring lenders will no doubt be the critical link. To secure a seat at the table, mortgage brokers will need to demonstrate an ability to produce investment-grade product and have sys-

“Effective sales management happens in real-time, on the production floor and in the field. You must be committed to your originator’s success, which means direct involvement.” temic quality control processes in place. The safety and soundness principles that were once the domain of depository institutions are being pushed down into the non-depository channel. And, the accountabilities go all the way down to the originator that sits across the table from the borrower. Although the mortgage broker industry has suffered deeply, it can ultimately rise again as a better incarnation of its former self.

Do you feel that exemption from full SAFE Act requirements by depository banks will soon end? Before Dodd-Frank I would have said no. With its passage down the road, I do see it as possible. One of the objectives of the Dodd-Frank Act is the “leveling of the playing field” between banks and non-bank entities. With that,


Can you tell us about some required reading that has been helpful in your career path?

When did you see a need for educational requirements in the mortgage industry?

I think we have a chance of seeing the hypocrisy of unlicensed activity by mortgage loan originators (MLOs) working for banks coming to an end. The banks will fight hard to keep this exemption. If it does come to licensure for registered MLOs, it will be several years down the road.

How can mortgage loan originators create distinction in this marketplace? The professional MLO brings two things of value to every loan transaction. First,


and most effective way to produce loan contracts. Several factors, including regulations, perceived capital risk and investor appetite for mortgage-backed securities, also happens to Fannie and Freddie and how we respond as an industry to our new realities, are just a few issues that will dictate the future role of mortgage brokers. Depending on the direction we go politically as a nation, it is very likely the mortgage broker can recapture much of the market share it has lost. I do not subscribe


“Give your customers an exceptional experience and the word about your value distinction will spread like wildfire. A highly-trusted mortgage expert exerts influence and is intrinsically distinct.”

The list is too numerous to itemize. I think you are either learning or you are dying. It’s that simple. The key is to have a reading or listening habit. The great thing is, the better you become, the better your rewards. I like audio books and use my windshield time for learning. With that said, here are a few classics that are must-reads: Philosophy: Atlas Shrugged by Ayn Rand; sales and business development: You Are Working Too Hard to Make the Sale by Bill Brooks and What Clients Love: A Field Guide to Growing Your Business by Harry Beckwith; personal development: How to Win Friends and Influence People by Dale Carnegie and Think and Grow Rich by Napoleon Hill. The mortgage business is one of those wonderful opportunities in which you can make a great living while providing a service that is meaningful. This is the new era of the professional mortgage originator. I believe five and 10 years from now, we will look back and see that we have built a better industry. It will take each of us committed to that end. It’s a pursuit worthy of our best work. Our nation’s future depends on it. 

The independent mortgage broker and mortgage banker channel exploded on to the market throughout the mid- to late-1980s. By the early 1990s, there was a trend of abuses and deceptive trade practices that had spread widely across the retail marketplace. Much of these practices were by short-term thinkers who entered the industry with the intention to take as much as possible out of each transaction. Back then, consumers were much less financially sophisticated and they were ripe for the unethical practices of the few. I also recognized that many originators did not fully understand their methods were destructive and that education and training could be a solution. There are givers and takers in this world, and I find most people want to do the right thing if they know why and how to do it. In the mid 1990s, I got involved with the National Association of Mortgage Brokers Education Foundation and began teaching the fundamentals of origination with a focus on borrowercentric principles. Knowledge is not retractable. Once a person learns some-

the value they deliver with their product solution and the impact it has on the families they serve. Secondly, the value of who they have become as a person and a professional. We must never forget, people do business with people. And, more than anything else, people want to do business with people they like and trust, and with someone who takes the time to understand what they want. It’s a tight credit market and consumers have shifted their approach to taking on debt. My advice to originators is to become experts in their field. Become intensely knowledgeable in areas of debt, credit, equity management and the financial markets. Expertise provides comfort to consumers and that is value people will pay a premium for. To differentiate, drive up your expertise. In business today, your income will be proportional to your expertise. It’s also a highly skeptical time where people do not know who or what to believe. The integrity and good name of an originator has actual value today. This is a very positive trend. With the advent of things such as viral community chat, an endorsement by happy customers is the lifeblood of an originator’s business. The MLO should focus on every aspect of the customer experience, from application through funding and follow through. Give your customers an exceptional experience and the word about your value distinction will spread like wildfire. A highly-trusted mortgage expert exerts influence and is intrinsically distinct.


The Three Numbers That Really Matter




Let’s do something different. How about stardom. After all, what’s the use of playing we tune out all of the compliance if you cannot win? And you cannot win withheadaches and negative news headlines for out knowing the real boundaries. a minute and focus on just three numbers. These three numbers are important. These Boundary #1: $6.96 trillion three numbers are important because they You’ve heard the sob story … heck you outline the borders of your could probably even recite playing field as a mortgage it better than anyone else. originator. The majority of Americans It’s football season have negative equity and right? You cannot get a hardly anyone can qualify touchdown by running out for financing … right? of bounds. It just doesn’t Wrong. According to the work. A football player latest stats by the Federal needs to know the boundReserve, Americans still aries of the gridiron. The have a whopping $6.96 same is true for the morttrillion of home equity gage industry. A mortgage remaining even after the originator needs to know Great Housing Crash of the boundaries of the 2007-2010. That represents “Although loan volmortgage field. The prob- ume is cut in half, the a very large population of lem is that most people in Americans who can qualify number of people you the mortgage industry play for financing. Let’s use the are competing with within the wrong bound80/20 rule here. According has also been cut in aries. They limit themselves to the U.S. Census Bureau, by not understanding how half. In other words, if there are just more than big the field really is and it was possible to have 100 million households in where they need to focus a record year in 2003the U.S. If 20 percent of their time and energy. 2006, it is equally pos- them control 80 percent of That’s why these numbers the equity, there are sible to have a record are important. approximately 20 million year in 2010.” I didn’t make these numhouseholds that have bers up. They are what they more than enough equity are. You need to know these numbers if you in their homes to qualify for financing. want to score more touchdowns in this In fact, according to the Fed, there are industry and enhance your mortgage super- approximately 20 million American house-


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holds who have a net worth greater than $350,000. This is a perfect example of the 80/20 rule in action. Your mission, should you choose to accept it, is to find these people. Where? Let’s think this through. If I have at least $350,000 of cash and home equity, where would I hang out? Do you think you’d find me click-shopping through the Facebook pictures of all the goodlooking loan originators in my market? Maybe; but probably not. Would you find me scavenging Twitter for the latest tweets of all the loan originators in my market? Maybe; but probably not. How about finding me when I’m sitting down with my CPA or financial advisor figuring out what to do with all my money and home equity? Now we’re talking! Not to knock social media (I use it, like it and I recommend it), but I really do think that spending your time with CPAs and financial advisors can provide much more targeted access to this $6.96 trillion pool of opportunity. After all, they not only have access to these clients, but they also have their trust and loyalty.

Boundary #2: $1.56 trillion Mortgage volume is down and many people have left the industry. Competition is fierce and regulators are squeezing profit margins. Sound like a good time to go all in? Heck yeah! The Mortgage Bankers Association (MBA) estimates that there will be $1.56 trillion of loan volume originated in 2010. This is roughly half the annual volume that we saw in the boom days of 2003-2006. However, the Nationwide Mortgage Licensing System (NMLS) estimates that approximately 200,000 total originators will be licensed and registered by the end of 2010. This is also roughly half the number of originators that were selling mortgages in the boom days of 2003-2006. Although loan volume is cut in half, the number of people you are competing with has also been cut in half. In other words, if it was possible to have a record year in 2003-2006, it is equally possible to have a record year in 2010. Yes, compliance is a challenge, and yes, negative equity is a challenge. Dude, that’s why loan volume and your competition have been cut in half … deal with it, because the opportunity to ethically make a lot of money in the mortgage industry is still alive and well. If you aren’t closing these loans, somebody else must be having a record year! By the way, don’t even try giving me that lame excuse that the Fed is reducing compensation levels … Okay, so you

can’t make four points per loan to your pocket. But were you making four points per loan in your pocket in 2003-2006?

Boundary #3: Four million units Home sales have plummeted to record lows! Let’s all go out and shoot ourselves! Wait a minute. Before you pull the trigger, check this out. I’ll agree with you that home sales have declined dramatically, if you agree with me that eight million referrals are still up for grabs. There will be an estimated four million home sales in 2010, according to the latest (and widely mourned) statistics from the National Association of Realtors (NAR). That means that there are eight million buyers and sellers in today’s market. Using the 80/20 rule on the roughly one million Realtors that are out there, the top 20 percent of Realtors should be closing an average of 32 transaction sides in 2010. This means that one top-producing Realtor is worth at least 32 potential referrals to you even in one of the worst purchase years on record. How would you like to get 32 referrals from one top-producing Realtor? How about 128 referrals from four top-producing Realtors? Again, if you aren’t closing this business, someone else must be having a record year. That’s exactly where CMPS comes in. We are launching the free CMPS Webinar series to help you focus your time and energy on these three numbers that really matter. Why should someone else have a record year when you deserve the business? Know your numbers. Know your boundaries. Tune out the noise. Gibran Nicholas is the founder and chairman of the CMPS Institute (—NMLS Provider ID# 1400384). The CMPS Institute administers the Certified Mortgage Planning Specialist (CMPS) designation and has enrolled more than 5,500 members since 2005. Through CMPS, Gibran empowers mortgage professionals with confidence, unique knowledge, and dynamic marketing resources to simplify compliance, increase their competitive advantage, and generate more business. Visit Gibran’s blog and Web site at Visit author Gibran Nicholas’s blog at where he shares his insights on economics, real estate and financial issues, including the current mortgage and credit crises.

lending standards, which are actually the ones we had 20 years ago, seem to be set in place for a long time. These standards are necessary for investors to regain their confidence with regard to purchasing mortgage-backed securities (MBS). The government cannot support the secondary markets forever—or can it? We need a healthy secondary market for the long-term viability of the mortgage industry. Now let’s talk about the factors affecting the long-term.

The Short-Term and Long-Term I receive a lot of questions regarding the short-term direction of the markets, as well as the long-term viability of the industry. By now, you should recognize that I am not much for predictions. There are too many uncontrollable factors that can intervene. However, there are some factors that have at least some degree of certainty attached to them. Therefore, this month I will not focus on the markets but will take a broader view. For all of those who have written regarding why the purchase market has become so “slow” this summer, let’s take a look at the factors we are facing …  Seasonal: It is not unusual for purchases to fall in July and August. In most areas of the country, the strong sales season is in the spring and there is a secondary rise in the fall after Labor Day as well. August and December are usually the slowest purchase months of the year. December can be a strong closing month, with builders trying to get houses finished and on the books for the year, at least when builders are building.

 Unqualified borrowers: When the housing market rebounds, we will still be left with consumers with low credit scores, high debt ratios and tighter lending standards. We don’t expect the sub-prime boom to resurrect itself in the future. While these are not all the factors affecting the short and the long term, these are very significant factors that will impact our future. What I am suggesting to the average loan officer is to take a longterm view. This is always the case when I suggest that loan officers focus on purchases rather than solely refinances. It is also the case when I suggest that they have a system in place to help borrowers get qualified in the future, even if it does not mean a deal next week. Yes, the mortgage industry will be here in the future. But the real question is … will you be a part of this industry? The opportunity is there for the taking but you will have to have a longterm view, as well as a short-term view? Dave Hershman is a leading author for the mortgage industry with eight books and several hundred articles to his credit. He is also head of OriginationPro Mortgage School and a top industry speaker. Dave’s Certified Mortgage Advisor Program can be found at If you would like to stay ahead of what is happening in the markets, visit for a free trial or e-mail




 The slow economy: The economy was not roaring in the first quarter, but it was a lot stronger than it was just two years ago. All along, we have said this would be a recovery of “stops and starts.” Well, this summer we had a “stop.” The question is: “Did the economy slow down because of the end of the tax credit or did the real estate market slow down because of the economy?” I don’t really think it matters whether it was the chicken or the egg, because you cannot have one without the other. We proved that when the collapse of the U.S. real estate market fueled a worldwide recession.

 Very low rates: That is an understatement. We had record low rates that should be encouraging sales. I am sure some sales were encouraged by these rates, but obviously not enough to offset the first three factors. Many origi-  The population will grow: Many ananators have been living this summer lysts love to point out that the homeoff of refinances and are keeping their ownership rate is shrinking and will fingers crossed that these rates will last probably continue to shrink. I don’t until the end of the year. On the other doubt these numbers, nor do I believe hand, continued extraordinarily low that this won’t hurt the industry in the rates could be considered bad news long-run. However, if you look at the for the economy and purchases. long-term demographics, we have a lot to look forward to. And many of those  Unqualified clients: We should have “turned into renters” will want to rent the largest refi boom in history right condos and houses instead of apartnow. We don’t because so many clients ments. As a matter of fact, some will be cannot qualify because of lack of equirenting the houses they lost in forecloty, low credit scores and high back sure. This will turn out to be a great ratios (or low incomes). The governopportunity for investors because we ment (Federal Housing Administration) are not building enough homes or is adding an “underwater refi program, apartments to meet this demand in the but 97.75 percent loan-to-value (LTV) long run. requirement and mandatory principal reduction will keep many banks away  The deficits: Yes, eventually we will have from this option. Of course, tighter to deal with the deficits. The stronger the lending standards will also keep the economic rebound, the less this situation volume in the purchase market down. will hurt. However, in the long run, if we We really cannot say that this is a “seahave a stronger economy and we are sonal” phenomenon or will swing back dealing with massive government debt, with the economy starts growing. New we will likely see higher rates in the

future. But I emphasize again, the higher rates are not likely until the economy improves. And an improving economy will mean more purchases because more will be employed. This will definitely require a balancing act by the Federal Reserve Board. 

 The tax credit: We all knew that the end of the tax credit would coincide with a drop in purchases. I am not sure why so many seemed to be surprised at the severity of the decrease. Not only was the incentive removed, but we “borrowed” from future purchases. And don’t forget that the tax credit ended and the summer pause came along shortly afterwards, a double whammy.

 Industry viability: If you are wondering whether this industry will be viable in the future, here is one thing I can assure you: People will be buying homes for decades in the future, and more likely for centuries. And they will need to borrow money. I cannot tell you the shape or format of the industry, but I can tell you we will have a mortgage industry.

“Yes, the mortgage industry will be here in the future. But the real question is … will you be a part of this industry?”

By Jonathan Foxx

“Society is founded not on the ideals but on the nature of man and the constitution of man rewrites the constitutions of states. But what is the constitution of man?”1 —Will and Ariel Durant In the first two parts of this three-part series,2 we have explored the basic structure of the new financial reform law, known as the Dodd-Frank Act (Act), as it affects residential mortgage loan originations.3 We have already given consideration to the many mortgage loan regulatory provisions that the Act covers4 and especially to the Mortgage Reform and Predatory Lending Act, a primary component of this landmark financial legislation.5 Now, we will turn our attention to the very core of the Act itself vis-à-vis the mortgage industry and consumer financial protection: the Bureau of Consumer Financial Protection (known also as the Consumer Financial Protection Bureau or CFPB, and hereinafter as the “Bureau”).6




 Consumer Leasing Act (CLA))14  Electronic Funds Transfer Act (except the Durbin interchange amendment) (EFTA)15  Equal Credit Opportunity Act (ECOA)16  Fair Credit Billing Act (FCBA)17  Fair Credit Reporting Act (except with respect to sections 615(e), 624 and 628) (FCRA)18  Fair Debt Collection Practices Act (FDCPA)19  Federal Deposit Insurance Act, subsections 43(c) through 43(f)(12) (FDIA)20  Gramm-Leach-Bliley Act, sections 502 through 509 (GLBA)21  Home Mortgage Disclosure Act (HMDA)22  Home Ownership and Equity Protection Act (HOEPA)23  Real Estate Settlement Procedures Act (RESPA)24  SAFE Mortgage Licensing Act (S.A.F.E. Act)25  Truth-in-Lending Act (TILA)26  Truth-in-Savings Act (TISA)27  Omnibus Appropriations Act–Section 626 (OAA)28  Interstate Land Sales Full Disclosure Act (ILSFDA)29

But first, a thought experiment7 A vast, entangled array of very small and sleek wires, super strong magnets, and very wide and long cables extend out omnidirectionally—all of which lines and circuits are laid throughout a network of interlocking, electrically generated devices that are held in place in their respective positions on a shaky iron scaffold by fraying, single-knotted ropes. The devices are needed to power vital and critical services to a community. But, due to wear and tear on their bindings, some devices are about to break free, threatening to pull down with them the entire array of wires, magnets, cables, and other devices. Any device can plummet at any time. Before it is too late, all the lines must be disentangled, traced to each of the devices, and rerouted to a new and more stable grid; plus, the devices themselves must be transferred, one by one, to the new grid without damaging them, and then reconnected to their lines. But the collapse can take place at any time. A “crisis” looms! So, how are you going to accomplish this heroic task quickly and effectively? Now let’s consider this analogue: The energy source is Constitutional authority; the grid is the financial regulatory framework; wires and cables are the ways and means that implementing regulations affect one another; magnets are the legal foundations (i.e., case law precedents or stare decisis), statutes (federal and state), Constitutional laws or rights) on which all subject enumerated laws (see below) rest; devices are the existing regulations; and ropes are the various governmental agencies that are charged with enforcement of and monitoring compliance with specific implementing regulations. By the end of this article, I hope you will have decided how best to solve the above-described and admittedly convoluted “crisis.” This article and the preceding articles in this series outline how Congress decided! Please keep in mind that this series on the Dodd-Frank Act is meant to provide an overview. However, the legislation itself is extremely detailed and extensive. Therefore, for guidance and risk management support, I strongly recommend that you consult a risk management firm, residential mortgage compliance professional, or regulatory counsel to develop policies and procedures to implement the Act’s requirements.

One Bureau, many bureaucrats “Nothing is more destructive of respect for the government and the law of the land than passing laws which cannot be enforced.”8 —Albert Einstein There are numerous existing consumer protection laws that will be included in the transfer to the Bureau by July 21, 2011, the Designated Transfer Date,9 thereby giving it exclusive rulemaking and examination authority.10 These “enumerated laws” include:11  Alternative Mortgage Transaction Parity Act (AMTPA)12  Community Reinvestment Act (CRA)13

As I have discussed elsewhere, the Bureau would be assigned primary authority to enforce the aforementioned laws, but other federal regulators, including the U.S. Department of Housing & Urban Development (HUD), the banking agencies, and the Federal Trade Commission (FTC), would retain overlapping, secondary enforcement authority over certain requirements. State attorneys general would be empowered to enforce federal laws under the Bureau (subject to any existing limitations in the laws to be transferred to the Bureau’s authority).30 And state consumer financial protection laws would not be preempted, except to the extent that they are inconsistent with federal law (although such state laws could be stricter than the federal laws, in which case they would not be preempted by federal law).31 The Bureau is established pursuant to Title X of the Act and is placed functionally within the purview of the U.S. Department of Treasury. It is housed within the Federal Reserve (Fed), but the Fed has no direct, operational authority over the Bureau.32 Its purpose is to regulate consumer financial products or services under the federal consumer financial laws.33 These financial products and services include, but are not limited to, credit extension; credit counseling; loan servicing; Credit Reporting Agencies, their agents and affiliates; real property leases; real estate settlement services; real estate appraisals; depository accounts; financial advisory services; exchange of funds and transmittal of funds; consumer custodial fund services; so-call “stored value cards;” check cashing; debt management, settlement, and collection services; payment processing services; and, a catch-all “other products and services” as the Bureau so defines. Breaking this down, the Bureau will have purview over virtually all financial products and services that are offered or provided to consumers for personal, family, or household purposes. The Bureau has authority over the above-stated enumerated laws through rulemaking, orders, guidance, interpretations, policy statements, examinations, and enforcement actions. It will be responding to the changing financial landscape by continual rulemaking, as well as providing guidance and rules in accordance with timeframes required by the Act. Implementation functions include enforcement of existing laws and the Bureau’s prescribed rules through civil monetary penalties,34 as well as in response to “covered persons” and service providers to prevent unfair, deceptive and abusive practices in connection with a consumer financial product or service. To take just one example, regarding disclosures, the Bureau’s rulemaking will ensure that the features of any consumer financial product or service are fully, accurately, and effectively disclosed to consumers in a manner that the Bureau determines will permit consumers to understand the costs, benefits, and risks associated with the product or service. Or, with respect to forms, in tandem with the Bureau’s new disclosure rules, it may provide model forms, which, although

The Bureau has exclusive authority to require reports of insured depository institutions and conduct examinations, including authority over their affiliates. The Bureau’s

“Neither a borrower nor a lender be, For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry.”44 —Polonius, William Shakespeare’s “Hamlet” The Bureau has supervisory authority over several types of non-depository institutions. In coordination with the FTC,45 the Bureau will determine the scope of its purview over non-depository institutions, with an initial rule to be issued within one year after the Designated Transfer Date. To identify such non-depository institutions and other entities, a specific classification is established, called “covered persons,” which is defined, as follows: A. A person (entity) that engages in offering or providing a consumer financial product or service; and, B. An affiliate of a person (entity) described in A, if the affiliate acts as a service provider to such person (entity). Covered institutions are those persons or entities that: 1. Offer or provide origination, brokerage, or servicing for residential mortgage loans. In effect, all businesses that are involved in mortgage loan originations. 2. Offer or provide other consumer financial products or services for which the Bureau has yet to promulgate a rule. 3. Engage or have engaged in conduct that, in the view of the Bureau, poses risk with regard to the offering or provision of consumer financial products or services, which include non-bank lenders, debt collectors, and consumer reporting agencies. 4. Offer or provide private education loans. 5. Offer or provide payday loans to consumers. continued on page 24


“If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.” —John Paul Getty

Bureau and the non-banks



Bureau and the banks

authority extends to credit unions and their affiliates, as well. Threshold size is $10 billion in total assets; below $10 billion in assets, bank oversight will remain with their principal supervisory agencies—their prudential regulators. In such instances for banks with total assets below $10 billion, the prudential regulator will retain exclusive enforcement authority with respect to federal consumer financial laws. The Office of the Comptroller of the Currency (OCC) will continue to regulate small thrifts. Obviously, the Bureau’s mission is to monitor and enforce consumer financial laws; therefore, its authorities will be exercised in this particular area of oversight. In any event, the Bureau must coordinate examinations with prudential regulators and state bank supervisors. Although the threshold is $10 billion in total assets, the Director may still require reports from insured depository institutions and credit unions that have total assets of less than $10 billion. The Bureau is not required to participate in examinations performed by the prudential regulator for such institutions, but it may do so. If the Bureau finds that any institution has materially violated a federal consumer financial law, it notifies the prudential regulator and recommends appropriate action. Under the Act, a state law is not inconsistent with the provisions of Title X if such law offers greater consumer protection.39 Therefore, the Bureau may determine that a state law is inconsistent with Title X on its own motion or in response to a petition by any interested person. Procedurally, the Bureau must initiate a rulemaking whenever a majority of the states enact a resolution to establish or modify consumer protection regulation promulgated by the Bureau. With respect to visitorial powers, the provisions of Title X do not affect the application of a regulation, order, guidance or interpretation of the OCC or Office of Thrift Supervision (OTS) regarding the applicability of state law to a preexisting contract. But the Act does provide a preemption standard pursuant to which a state consumer financial law is preempted if it either (1) has a discriminatory effect on national banks in that it “prevents or significantly interferes with the exercise by the national bank of its powers,” or, (2) is preempted by a provision of federal law.40 Determining the preemption standard—permitting preemption of state consumer financial protection law – requires the following de minimus analysis: (1) If the preemption’s application would have a discriminatory effect on national banks, compared to banks chartered by a state; (2) If the preemption determination, made by the OCC or a court on a case-by-case basis, is in accordance with the legal standard in Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance Commissioner, et al., which set a standard for preempting state regulation in the insurance industry;41 or (3) If it is preempted by another federal law. Determining that a state law prevents or significantly interferes with a national bank’s powers may be made by a court or by the OCC on a case by case basis.42 The preemption standards also apply to state laws affecting federal savings banks as well. Contrary to the U.S. Supreme Court’s decision in Watters v. Wachovia Bank,43 federal preemption will not apply to subsidiaries and affiliates of national banks that are not themselves national banks. 

optional, would provide a “safe harbor.” Yet another example would be the Act’s requirement to restructure the TILA and RESPA Disclosures (i.e., TIL Statement, GFE, and HUD-1 Settlement Statement) by combining them. So, not later than one year after the Designated Transfer Date, the Bureau must propose a new model disclosure that combines the initial and final TILA Statement and the GFE and HUD-1 Settlement Statement into a single disclosure for mortgage loan transactions. A Penalty Fund35 will be established for payments to the victims of activities for which civil penalties have been imposed. The Bureau will have the authority to impose registration requirements on persons subject to its jurisdiction, other than insured depository institutions and insured credit unions and their related affiliates. The Bureau is further permitted to prescribe rules and take enforcement actions. In general, then, the Bureau’s enforcement authority includes the right to impose penalties and restitution, bring a civil action in its own name in order to impose a civil penalty or seek equitable relief. And, as a specific power delegated by the Act itself, the Bureau can provide protection for whistleblowers and employees who report violations and cooperate with authorities. Excluded from the Bureau’s purview are insurance products or services, entities regulated by stated insurance regulators, and electronic pass-through services; employee benefit and compensation plans; small merchants, retailers or other sellers offering purchase money credit where the debt is not assigned; real estate brokers; services offering identity theft information; certain retailers of manufactured housing or modular homes; attorneys; persons and entities regulated by a state securities commission; certain charitable contribution functions; accountants and tax preparers; persons regulated by the Farm Credit Administration; activities related to the solicitation or making of voluntary contributions to a tax-exempt organization; and, persons and entities required to be registered with the Securities and Exchange Commission, Commodity Futures Trading Commission (CFTC), and the Bureau itself. Automobile dealers who assign their credit contracts to unaffiliated third parties are also excluded.36 The Bureau does not have the authority to establish usury limits, unless explicitly authorized by law. The Bureau has a five-year term director (Director), who is appointed by the President, and requires Senate confirmation. A new bureaucracy will be established in order for the Bureau to fulfill its mission. There will be various units and offices: a research unit to monitor the consumer financial products and services market, and a unit to collect and track complaints; three new offices to be established within one year of the Designated Transfer Date, an Office of Fair Lending and Equal Opportunity, an Office of Financial Education, an Office of Service Members Affairs; and, an Office of Financial Protection for Older Americans, which must be established within 180 days after the Designated Transfer Date. Furthermore, there will be a Private Education Loan Ombudsman to process complaints from borrowers of private education loans. Periodically, the Director reports to Congress and provides documentation in support of the Bureau’s work. The Director forms and appoints members to a Consumer Advisory Board (Board), which consists of six members recommended by regional Federal Reserve Bank Presidents. The Board advises and consults with the Bureau regarding consumer financial laws, provides information on emerging practices in the consumer financial products or services industry, and reviews regional trends, concerns, and other relevant information. It should be noted that the Act establishes the Financial Stability Oversight Council (Council), charged with identifying systemic risks to the financial stability of the United States, which is ostensibly meant to monitor conditions leading to “too big to fail” and emerging threats to the U.S. financial system. This Council is composed of 10 voting members and five non-voting members, and one of the 10 voting members is the Director of the Bureau.37 The Council may set aside a final regulation prescribed by the Bureau, or any provision thereof, if the Council decides that the regulation will put the safety and soundness of the U.S. banking system or the stability of the U.S. financial system at risk. The Chairperson of the Council also may stay the effectuating of a regulation in order to permit further consideration of a petition to the Council upon the request of any member agency.38 Until such time as the Council decides to vacate its stay, the subject regulation or provision would be unenforceable. In addition to the Bureau’s responsibility to build its own staff and administrative operations, it will collaborate with the federal banking agencies and HUD to choose employees to be transferred from their agencies to the Bureau. All such employee transfers are to be fully effectuated not later than 90 days after the Designated Transfer Date. The Bureau is expected to cost approximately $500 million to run, an amount not altogether high when compared with the cost to run many other federal agencies – although the cost will no doubt increase over the years.

news flash continued from page 23

The Bureau requires reports and has examination authority over covered institutions. The scope of such authority extends to (1) assessing compliance with consumer financial protection laws, (2) obtaining information about the activities and compliance systems or procedures, and (3) detecting and assessing risk to consumers and markets of consumer financial products and services. This also means that the Bureau will promulgate, through its rulemaking authority, recordkeeping and record retention requirements in concertu with state and federal regulators. Indeed, the Bureau can exercise its authority even if other provisions of law grant some enforcement, rulemaking, or examination authority to another agency.

Director of the Bureau “If a sufficient number of management layers are superimposed on top of each other, it can be assured that disaster is not left to chance.”46 —Norman Augustine Creating any new governmental agency is a Herculean, and perhaps also a heroic, undertaking! To create a new agency that has consumer financial protection as its primary mission requires appointing a Director with considerable managerial, legal, political, and financial knowledge, all of which ideally would be expressed through a balanced temperament, a focused and incisive mind, a fierce consumer advocacy, and sophisticated communication skills. Consider the ostensible tasks that a Director of the Bureau must accomplish, and it becomes eminently clear that few individuals in or out of government could meet such high standards. Here is a chart of the units that the Director must establish:47

Supervisory Units & Functions




Compliance Requirement

Research • Research • Analyze • Report

A. Developments in consumer financial product markets, alternative markets with high growth rates, and areas of risk to consumers. B. Access to fair and affordable credit for traditionally underserved communities. C. Consumer awareness, understanding, and use of disclosures and communications regarding consumer financial products or services. D. Consumer awareness and understanding of costs, risks, benefits of consumer financial products or services. E. Consumer behavior—including mortgage loans—with respect to consumer financial products or services. F. Experiences of traditionally underserved consumers, including un-banked and under-banked consumers.

Community affairs • Provide Information • Guidance • Technical Assistance

Support to consumers regarding consumer financial products or services offered and provided to traditionally underserved consumers and communities.

Collecting and tracking complaints

A. Toll-Free Number, Web site, centralized Database to monitor and respond to consumer complaints, in coordination with the FTC and other federal agencies. B. Route complaint calls to states. C. Data sharing requirements with prudential regulators, FTC, federal and state agencies.

Office of Fair Lending and Equal Opportunity

A. Ensure fair, equitable and non-discriminatory access to credit for individuals and communities. B. Coordinate fair lending efforts with federal and state agencies. C. Work with private industry, fair lending, civil rights, consumer and community advocates. D. Provide annual reports to Congress.

Office of Financial Education

Develop and implement initiatives to educate and empower consumers to make better informed decisions.

Office of Member Affairs

Educate and empower service members and their families to make better informed decisions regarding consumer financial products.

Office of Financial Protection For Older Americans

Activities designed to facilitate financial literacy of individuals who have attained the age of 62 years or more on protection unfair, deceptive, and abusive practices, and information about current and future financial choices.

continued on page 34

continued from page 15

processes in place to facilitate borrower disclosure of changes in financial circumstances throughout the origination process. It also provides an expanded debt-to-income (DTI) ratio tolerance that will lead to fewer loans having to be re-underwritten. Lenders will only be required to reunderwrite a loan after the initial underwriting decision has been made if the borrower discloses or the lender discovers changes that cause the debt-toincome (DTI) ratio to exceed 45 percent or to increase by three percentage points or more. Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America’s secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America. For more information, visit

NAR survey: Homeownership and community stability linked Homeowners are more active in their communities, benefit from improved education opportunities, and report higher levels of self-esteem and happiness when compared to renters, according to leading research. A new report from the National Association of Realtors (NAR), “Social Benefits of Homeownership and Stable Housing,” explores the impact of stable housing and the positive social outcomes resulting from homeownership. “Homeownership is in investment in your future—home is where we make memories, build our lives and feel comfortable and secure,” said Vicki Cox Golder, owner of Vicki L. Cox Real Estate in Tucson, Ariz. “Owning a home has long-standing government support in this country because homeownership benefits individuals and families, strengthens our communities and is integral to our nation’s economy.” NAR’s study identifies research from government, industry and academia that identified the relationship between homeownership and stable communities. Homeowners move far less frequently than renters, and therefore are embedded into the same neighborhood and community for longer. This allows for social cohesion, ultimately resulting in social benefits and stronger communities. “Realtors care as much about keeping families in their homes as they do about helping them find the home of their dreams,” said Golder. “Social ben-

efits do not arise solely from ownership, but also from greater housing stability and social ties associated with less frequent moves among homeowners.” Several research studies cited in the NAR report have found that homeownership has a significant impact on educational achievement. For instance, the decision by teenage students to stay in school is higher for those raised by parents who are homeowners compared to those whose parents are renters. Access to economic and educational opportunities are also more prevalent in neighborhoods with high rates of homeownership. Furthermore, studies have shown that changing schools frequently due to moving impacts negatively a child’s educational outcome. Civic participation is another social benefit resulting from homeownership and stable housing. Homeowners are proven to be more politically active and are more likely to vote in local elections compared to renters. In addition, homeowners have a higher membership in voluntary organizations. Studies have shown that homeowners are more likely to believe that they can do things as well as anyone else, and they self-report higher ratings on their physical health. “The research shows that homeowners report higher self-esteem and happiness than renters, resulting in better overall health, both physically and psychologically,” said Golder. When it comes to property, homeowners have more invested both financially and emotionally. Property crimes affect homeowners directly, but nonviolent property crimes can impact the property values of the entire neighborhood. Therefore, homeowners are more motivated to deter crime by forming and implementing voluntary crime prevention programs. In addition, it is easier for homeowners to recognize perpetrators in stable neighborhoods because of extensive social ties. Unstable neighborhoods often display social disorganization which can lead to higher levels of crime. Along with protecting their home and neighborhood from crime, homeowners spend more time and money maintaining their home than renters. Neighbors also influence other homeowners to improve their property, resulting in a better overall quality of the community. “Homeownership certainly contributes to positive social outcomes, but those outcomes are truly a result of stable housing communities,” said Golder. “With strong social ties and a cohesive community, homeowners can enjoy not only the long-term financial benefit of owning a home, but also a more satisfying life—which is what’s really at the heart of the American Dream.” For more information, visit

U.S. Census Bureau finds monthly housing costs reach $1,000 for homeowners Photo credit: John Foxx

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

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Bonded and Insured: A Foundation for Rebuilding Trust Insured broker originators secure wholesale lender confidence and borrower preference By Greg Schroeder Okay, so we all agree that being a licensed, bonded and insured broker is not only a smart business decision, but it is also the right thing to do, right? Assuming unwavering agreement from my many loyal readers, this month, I will explain how brokers can achieve maximum value from the adoption of these hallmarks of a true Trusted Mortgage Professional. The licensing part of the equation is easy, mainly because it’s now required. While the advantages of being licensed (i.e. being allowed to lend) may seem pretty obvious and finite, there are ways to use this fact to a broker’s advantage. Many borrowers are unaccustomed to seeing mortgage professionals advertise themselves as being licensed so why not update your marketing materials to include this fact? A sizable banner on your Web site and in your marketing literature, as well as a few well-worded updates on the social media outlet of your choice (Twitter, Facebook, LinkedIn, etc.) announcing this fact, could go a long way in regards to customer acquisition and would be time and money well-spent. The second piece of this equation is a little trickier. People often assume that “bonded” and “insured” are one and the same, but actually, these are two different, yet complimentary, concepts. To be “bonded” means to have financial protection in place to cover claims made against your company for wrongdoing on the part of an employee. The most common type of bond coverage is a fidelity bond, which covers a business in the event of dishonest acts by an employee. However, this type of bond hasn’t been available to brokers until just recently. A newly available fidelity bond just for brokers protects against acts of mortgage fraud or deceit on behalf of an employee intended to enhance that employee’s personal financial gain or to cause harm to the employer, including acts by third-parties such attorneys or closing agents retained by the broker. To provide brokers with maximum protection, the fidelity bond should cover the following: Forged checks and documents; fraudulent mortgages, including fraudulent procurement (theft) of a mortgage investor’s money or collateral; and computer crime. Other features that would be beneficial for brokers include retroactive coverage, automatic coverage for newly-established offices and a definition of “insured” that covers both past and present employees from the top of the organization down. What a fidelity bond doesn’t cover is negligence, which is where professional liability or professional indemnity insurance comes into play. This type of coverage protects a business from errors, omissions and other type of mistakes, hence the policy’s more common moniker “E&O.” The legal definition of negligence is very broad, which is not good news for businesses like mortgage companies that must execute with perfection every time. Most E&O policies are written for a specific business, so be sure to use an agent that has experience in creating these types of policies for mortgage companies to ensure that all of the bases are covered. However, a robust E&O policy should cover the following: Failure to obtain or maintain required property insurance including flood coverage; improper Flood Zone Determination; failure to secure FHA/VA/PMI guarantees; failure to obtain or maintain life or disability insurance on the mortgagor; or failure to pay real estate taxes or special assessments. A true Trusted Mortgage Professional needs to be motivated by more than just the bottom line if they expect to succeed in today’s wholesale environment. A commitment to quality, integrity and fidelity can no longer be lip service, but must now be the foundation upon which brokers must build their business. One small crack in that foundation and the whole structure could come tumbling down. Are you ready? Greg Schroeder is president of Comergence Compliance Monitoring. To learn more about how the Comergence Compliance Trusted Mortgage Professional program can help, call (714) 495-4720.



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The nation’s homeowners paid a median of $1,000 in monthly housing costs in 2009, compared with $808 for renters, according to data released today by the U.S. Census Bureau and the U.S. Department of Housing & Urban Development (HUD). However, renters usually paid a higher percentage of their household income on these costs than did owners (31 percent compared with 20 percent). These new figures come from the 2009 American Housing Survey, the definitive source of information on the quality of housing in the United States. Statistics are provided for apartments, single-family homes, manufactured housing, new construction and vacant housing units. Issued jointly bi-annually by the Census Bureau and HUD, this survey provides detailed information on the characteristics of the nation’s housing stock. A wide range of specific topics is covered, such as the presence of air conditioning, crowding, housing costs, special living services offered to older residents, safety equipment present, type of heating fuel used, satisfaction with the neighborhood, cost of utilities and size of the home. The survey also covers the demographic characteristics of the housing units’ occupants. “So many of these measures are really unique to this survey,” said Tamara Cole, chief of the Census Bureau’s American Housing Survey Branch. “Together they provide a comprehensive view of the quality of the nation’s housing stock. This survey is also a longitudinal one, meaning it follows the same unit over time. For example, you can track the remodeling done to a specific unit from one survey to the next.” The 2009 survey indicates that respondents are generally quite content with where they live: Approximately 70 percent rate their homes an 8, 9, or 10 on a scale of 1 to 10 with 28 percent giving them the “best” rating of 10. Residents of new construction tend to rate their homes even more highly: 84 percent gave them between an 8 and 10, and 45 percent gave a perfect 10 rating. Likewise, more than two-thirds of residents (68 percent) rated their neighborhood highly with 25 percent giving it a “best” rating. People living in newly built homes rate their neighborhoods especially highly: 75 percent (rated highly) and 35 percent (rated best), respectively. Other highlights for the nearly 112 million occupied housing units:  The median year housing units were built was in 1974, with owneroccupied units being slightly newer (median of 1975 compared with 1971 for renter-occupied units).  The median purchase price of homes was $107,500; for a newly constructed home, it was $240,000.

 Thirty-two percent of owner-occupied units were owned free and clear, 66 percent had a regular and/or home equity mortgage and two percent had only a line-ofcredit.  The most important consideration for recent movers in choosing their homes was financial (28 percent), followed by room layout/design (15 percent) and size of home (10 percent). Furthermore, the most common reasons recent movers had for choosing their neighborhoods were convenience to job (20 percent), convenience to friends or relatives (14 percent), look/design of neighborhood (10 percent) and the house itself (10 percent).  About two-thirds (64 percent) of the units used a warm-air furnace for heating; 12 percent used an electric heat pump; and 11 percent used a steam or hot water system. The latter is increasingly falling out of use as only two percent of new units use this system.  About half of homes (48 percent) had a separate dining room and three in 10 (30 percent) reported two or more living rooms or recreation rooms. About one-third (35 percent) had a usable fireplace.  About two-thirds of housing units (65 percent) had central air conditioning and another 21 percent had window units; for new units, the percentage with central air conditioning was even higher (89 percent).  About nine in 10 units (93 percent) reported the presence of a smoke detector. Additionally, 36 percent reported having a working carbon monoxide detector, 45 percent purchased or recharged a fire extinguisher in the last two years and 5 percent had a sprinkler system.  Most homes had three or more bedrooms (64 percent), with the percentage even higher in new homes (80 percent). Additionally, about half of homes (51 percent) had two or more bathrooms, with the percentage even higher (89 percent) in new homes.  Ten percent of communities had secured entrances, with the likelihood somewhat higher (15 percent) in new communities. For more information, visit

Taking Control of Your Marketing By Rene F. Rodriguez




Marketing during a downturn isn’t Two runners approach a hill. One runner walks up the hill and the other, the only challenge we face. Today, a runs up the hill. Which is a better strat- great deal of people are focused on the back end of the mortgage transaction. egy for a long distance race? Well, I’m not a runner, so I really don’t With defaults at historic levels, mortknow which is a better strategy, however, gage fraud out of control and constant when we look at this from a marketing government pressure to help homeperspective, the answer becomes a lot owners in distress, mortgage loan servicers have their work cut out for them. more clear. Let’s look at it again. Two businesses hit a downturn in the But soon, very soon if the federal govmarket. One business seizes all market- ernment’s academic advisors are coring activities. The other, decides to rect and we have exited the recession, invest more into marketing. Which is a the focus will return to the point of better strategy for long-term business sale. It will be here where the future of the mortgage industry is being written, success? for only by closing new The answer to that loans will companies question comes down to remain in business and understanding the value succeed as we move into of the incremental gain the recovery. earned while running We are already seeing versus walking up a hill. some excellent signs. In running, you expend Some pockets of secondenergy to gain distance. ary market investment In marketing, you spend are starting to get active money to gain customers. and we’ve already seen at The big difference is that least one mini-refi boom the energy spent running this year. Those who harder does not translate believe that this new busiinto more energy for the “Today, it takes a ness is only the result of race. In fact, you’ll have combination of less energy to finish the touches from different government bailout funds are missing the point. The race hard. In business, channels (or media) government can spark however, the money to keep prospective interest on the part of spent on marketing transborrowers engaged.” prospective borrowers, lates into more cusbut only lenders can close tomers now, which means more cash to invest in more the deals. And only lenders who have a marketing to get even more customers. good understanding of what it means to An unfortunate common practice for market to the new generation of mortcompanies at the onset of a poor econ- gage borrowers will be around. Most discussions of marketing are omy is to begin cutting operating costs. Even more unfortunate is the fact that complicated by confusion about how it marketing budgets are often the prime relates to sales. While sales are the results targets of those cuts. It has been proven of good marketing, they are not at all time and time again that it’s not a good similar disciplines. While sales is what idea to reduce marketing efforts during ultimately makes the company money a recession. This short-term approach and keeps the machine working, marketsaves money, but leaves your brand in ing tells us who to sell to, why they want a less competitive position whenever our product and what salespeople must the economy recovers. And over the say to get them to close. The companyyears, research has confirmed that the centric (or supply side) “Four P’s of best strategy in terms of long-term Marketing:” (Product, Place, Price and return on investment (ROI) is to Promotion) now need to be accompaincrease marketing efforts during an nied, if not replaced with, the customerfocused “Four C’s of Marketing:” economic slowdown.

Customer value (product), Cost to the customer (price), Convenience for the buyer (Place) and Communication (Promotion). Beyond that, marketing is the machine that keeps future borrowers on the line until they are in the “buy zone” and ready to sign an application. While loan officers know they must maintain these databases and stay connected to these prospects, it can be very difficult to do so on a regular basis. Without that kind of marketing support, sales become much more difficult, referrals are harder to get and customer loyalty goes out the window.

So what do we do? Gary Kellar, Dave Jenks and Jay Papasan wrote a game-changing book entitled The Millionaire Real Estate Agent. Their research into what they call “mindshare” illustrated that the 92 percent of sellers will list their home with either the first or second agent they meet with and 82 percent of buyers will sign a contract with either the first or second agent they meet with. That means that you’d better be number one or number two or you’re not even in the game! We see the same lack of loyalty from customers in the mortgage industry today. While the industry has worked hard to increase customer satisfaction, and the numbers are promising, it is not translating into customer loyalty. We’re still seeing almost every borrower go to a different lender for their next loan. I believe this is because no one in our industry is taking control of the marketing process.

Who owns the marketing process? I strongly believe that marketing should be owned and managed by the company so that originators can focus their time, energy and money on selling and building relationships. Sounds great, but there is one big problem. For a mortgage company to “own” marketing, they have to pay for it and where will they find that money? For too many years, mortgage companies competed for the industry’s top talent through the promise of high commission splits. Over time, as those splits continued to rise, there was less and less money available to spend on supporting, training and developing the originator. In the end, the originator was left with not only the task of selling, but

they also now had to spend their own money to implement marketing systems. We all know that dollars spent on an individual basis go a lot less further than collective dollars. One-hundred originators individually spending $250 per month on marketing with no cohesive message generates a pretty weak impression on the market. Now, if you pool the $250, you can now spend $25,000 per month into a cohesive message and effort. Much more powerful! In the past, mortgage lenders went down one of two paths when it came to marketing. Either they had a process that they subjected every loan officer to as a matter of course, or they left all of that to the front line originators, letting the best rise like cream to the top. As you might imagine, those loan officers that did the best job of marketing to their prospects on a regular basis, closed the most loans and earned the most commissions. The top producing loan originators do a few important things consistently. After years of training and consulting with some of the nation’ top originators, I can tell you that when it comes to database building, mining and maintaining, these guys are experts and they spend a lot of money to do it. They have teams of people whose sole job is to execute marketing best practices similar to Kellar Williams’ 8 x 8 (eight touches in eight weeks) and 33 Touch (33 touches per year) programs. The ROI on campaigns of that nature have been proven and easily justify the expense of a full-time person. Sadly, the amount of work and expense to properly execute those campaigns on a regular basis prohibits the majority of originators from being able to enjoy the benefits of such activities.

e-mail marketing to the rescue … NOT! I’m not saying that I don’t like e-mail marketing because I do. What I am saying is that the days of uploading your email marketing list to an online service that kicks out an e-mail a few times a month are over. In the beginning, it was a very powerful too, but the influx of automated spam messages and the continued abuse of people’s personal information has forced e-mail spam filters to tighten up. I personally know of several owners of e-mail marketing sys-

tems who are constantly testing to see if they receive the e-mail they send out, and some of the marketing messages don’t even clear their own spam filters.

la as of yet, I can guarantee you that we are going to see strategies like this pop up all over the place.

Hidden opportunity Multi-channel marketing Even when the e-mail does get through to us, we’ve all seen so many e-mail marketing messages that they don’t even register on us before we’ve clicked the delete button. It’s like the check engine light in our car, if nothing bad happens right away by ignoring it, we eventually learn not to take it very seriously. After a few weeks, we don’t even see it anymore. It’s not news to any of us that there’s very little power in solely using e-mail as your communication and marketing tool. Today, it takes a combination of touches from different channels (or media) to keep prospective borrowers engaged. Borrowers are alerted to messages in one medium, say e-mail, but will respond and engage with companies that approach them through multiple avenues, such as e-mail combined with social networking sites, YouTube videos and a personal phone call. The problem, of course, is that loan officers don’t the have time, expertise and money to do this type of marketing, much less generate the content it takes to provide the messages for those media. Some outsource it but most, cross their fingers and do nothing in hopes that maybe the statistics won’t apply to them.

Marketing responsibility falls to the lender

When Gary Keller looked into the habits of the most successful real estate agents in their industry, they learned that marketing was less about the particular sales messages that the salesperson used and more about the different ways the prospect was touched and how often.

“Most discussions of marketing are complicated by confusion about how it relates to sales. While sales are the results of good marketing, they are not at all similar disciplines.”


Rene F. Rodriguez is a corporate business strategist, acclaimed speaker and trainer, and chief executive officer of MortgageDashboard. He may be reached by phone at (612) 310-4010, e-mail or visit



Their research indicated that the nation’s best agents had two databases, one that was comprised of past customers and people they knew (their “met” list), and the other consisted of a targeted group of prospects, typically a purchased list in a specific area code or neighborhood (their “not met” list). The agent would systematically farm both lists. It turned out that, if the agent sent a postcard to every person in the “not met” database once each month for 12 months, Kellar Williams calls this approach the 12 Direct program, they would earn one new transaction for every 50 contacts they mailed to. In other words, they got a two percent response rate. When it came to marketing to their “met” database, Kellar’s book recommended a two-step approach. Step one would be to touch every new prospect eight times in eight weeks, then follow up with a total of 33 touches throughout the year. Those touches consisted of e-mails, postcards, drop-offs, gifts, etc. That strategy yielded two deals for every 12 people they marketed to (or a 17 percent response rate). The value of this research is realized when you utilize these metrics to not only accurately determine what your marketing activities should be to reach your desired income level, but also, you could calculate the cost of not marketing to your clients. These metrics are consistent with the mortgage industry. The Mortgage Bankers Association (MBA) reported that 8.7 percent of your closed clients will refinance each year and the U.S. Census Bureau stated that 6.8 percent of the nation’s population will purchase a home each year. Combine those numbers and the end result is that 15.5 percent of your database will be in need of a new loan each year. For example, if an originator has a database size of 500 people, that means that 77.5 loans will happen, but the question is, “Will they be yours?” According to the research and stats we

stated previously on the subject of mindshare, if you are number one or number two, the chances of those loans coming to fruition is pretty good. It’s not like I need to twist the knife any further, but if the average fees on a loan are $3,000, then that means there is in excess of $232,000 of opportunity in a 500-person database. Even if we are half-right with these numbers, it still translates into a huge opportunity for those can properly execute this plan. That’s what we call database math. Other results that the nation’s top agents were enjoying came clear after the research, but they all said basically the same thing. Once the metrics were worked out and the agent knew how many touches were required to produce a sale, the marketing function was reduced to a numbers game, and the most successful agents keep doing the work. Now, the federal government is working harder to make it possible for home loan borrowers to shop around for the right lender. While that has traditionally been harder to do here, the government is not likely to stop moving the industry in that direction. That means that mortgage loan officers will soon face a similar challenge and will need to remain in the forefront of the prospect’s mind. This will prove increasingly difficult for mortgage lenders who are dealing with legal and investor compliance, technology, mortgage fraud and a host of other issues critical to their business. Those who are able to deal with these pressures without letting their marketing suffer will succeed. Many say that we are living in the “Information Age,” but I no longer think that’s true. I believe we are now living in the “Implementation Age.” You can do a quick Google search and receive any information you want, but that data alone benefits you little. It’s what you do with that information that matters. The very same is true of marketing. Many know that it’s the number and quality of prospects that leads to future business. Few have the wherewithal to implement a practical marketing program that works. I hope this information will help shift focus away from the upfront cost of marketing to the real question of what is it costing you NOT to market to them. 

In the end, it’s up to the mortgage lender to provide the marketing that will provide a steady stream of sales leads to the loan officers. In fact, it makes good business sense to do so. But here again, we run into the challenge of recruiting the nation’s best loan originators and paying the high commissions required to get them to come aboard, there is little money left for marketing purposes. Soon, many lenders are going to be forced to re-think and re-structure how they compensate originators, which will inevitably lead them re-think how they are going to retain top talent. Herein lies the opportunity. Lenders that are able to find ways to offer ancillary value that originators are able to monetize are going to be the big winners. Most likely, the originator’s compensation will be perceived as going down, but if done correctly, lenders will be able to successfully reduce the cost of business to the originator by taking on such expenses as marketing. The positive result will be more business generated at a lower cost to the originator. While there isn’t a magic formu-

As everyone rushed to make the move to e-mail marketing, traditional printers were somewhat left behind in the dust. The printing industry has been under heavy pressure coming from online adverting and falling prices for traditional mass media. While advertising online may not always be cheaper than doing so in print, it comes without the cost of printing or paper. All of this is taking business away from printers. Consequently, printing companies are hungry for business. They have streamlined their operations and have added technologies that allow them to do some great things for marketers. At MortgageDashboard, we chose to fully integrate Cross Media’s ( LeadStar marketing engine into our new loan origination software (LOS) and customer relationship management (CRM) system. They are a perfect example of what is possible when you combine the expertise of a traditional printer and the power of variable data printing to execute marketing best practices. With their technology, they can offer their clients individuallyprinted marketing pieces printed directly from a database at an affordable price. The ability to automate certain marketing and communications that were personalized and delivered through multiple channels based on strategically placed triggers throughout the loan process was a dream come true for me. The more customized a direct mail marketing piece is, the more effective it will be. One of the advantages to the company for handling this type of marketing on behalf of its mortgage originators is that should an originator leave the company, a simple change to the database, perhaps the addition of a new originator’s name and photo, and prospects may not even notice the change if the company’s other branding remains the same. It falls on the shoulders of the company to seek out these marketing opportunities and make sure that prospects are getting attention regularly. This will require firms to either bolster the staff in their marketing departments to handle the content generation, media buying and database maintenance responsibilities; outsource it to a firm that can handle it for them; or invest in a technology to help them streamline and execute their marketing plan. Those firms that keep the work in-house must be prepared to play a numbers game.

Database math

A View From the C-Suite Marketing vs. Sales: Understanding the Difference By David Lykken




If you walked up to most anyone in our ing efforts are only costing you money industry or any industry for that matter and not making you money, you are and asked them, “What is the differ- not alone. By in large, the mortgage ence between ‘sales’ and ‘marketing?’” industry is not known for its marketing you would be surprised at how many prowess. To many in the mortgage different answers you would receive. industry, marketing is a mystery. But in For many, the words “sales” and “mar- reality, the subject of marketing comes keting” are mistakenly to all of us naturally and used interchangeably. at a young age. Think These terms are not interback to our single days changeable, and it is when that “special someimportant that we estabone” caught our attenlish a solid definition for tion. One way or another these two words and have we found a way to “mara thorough understandket” ourselves to those ing as to their differences. that caught our atten“Sales” is an act or tion. Clearly, some excel effort of persuading or at marketing more than influencing someone to others, which is why I enter into a relationship hope to make a differ“Those who want to with you and/or your ence with this article. company for the purpose Bigger companies achieve extraordiof exchanging (transacthave a chief marketing nary success have to ing) something of value officer (CMO) occupying take ownership and for products and services personal accountabil- the “C-Suite” along with being offered by you all the other C-Level ity for their own and/or your company. At executives (see last marketing.” its core, selling or sales is month’s article for an transactional in nature. explanation of the “C“Marketing” on the other hand, is Suite” and C-Level executives). But, your effort to communicate informa- the vast majority of companies in our tion about yourself, your company industry don’t, and it is painfully and/or your products and services to obvious. That is why I advise you to those with whom you would like to have the attitude that you are pertransact business. At its core, market- sonally responsible for your own ing is all about communicating a mes- marketing. Even if your company has sage. a marketing department with a good While sales and marketing are marketing strategy, you should never uniquely different, they share one rely on anyone else’s marketing common goal and objective … and efforts to achieve your goals and that is to make money! If your market- objectives. If you do, you are putting


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your fate in the hands of another and that compromises your potential for success. Those who want to achieve extraordinary success have to take ownership and personal accountability for their own marketing. I was recently talking to a very successful originator and asked him, “What has been the key to his success?” And I should point out that he worked for a company that had an excellent marketing plan. His answer was refreshing and highlighted what I am talking about. He said, “While I am grateful for all that my company does in the area of marketing to generate leads for me, I have learned that if I am be successful at all times and in all market conditions, I cannot fall prey to becoming dependent upon someone else’s efforts to do something as important as marketing.” He went on to say, “All it takes is one cut in the market budget and I could be in trouble. I believe it is my responsibility to do all that I can in conjunction with what my company does to market myself, my company and our products and services.” Obviously the best of all scenarios is if your company has an effective marketing plan. Whether you work for a Wells Fargo, Bank of America or a oneperson shop, to be successful, you must have your own marketing plan/strategy and you must work the plan consistently. The best part is that a good marketing plan doesn’t have to cost a fortune and you don’t have to be a creative genius. The key is developing a marketing strategy that fits your business plan. It will serve as a solid foundation for your target market. You can develop a strong marketing plan by taking the following steps:

1. Determine that you are your primary product I would suggest that when it comes to the mortgage business, you are your primary product that needs to be marketed. The color of money is the same at any mortgage company. The 30-year fixed-rate mortgage loan is the same across the industry, but who is offering that 30-year fixedrate loan product varies by the same number as those offering the product. People make the difference in this industry. It is truly a relationship-driven business. So, you would do well to identify what makes you unique. The greatest differentiator is you! Identify those strengths that are unique to you and publish them loud and clear.

2. Determine your target market You might think that everyone and anyone might be potential prospect. That approach lacks focus and will eventually fail. Once you determine who you are, I would suggest you identify with whom you enjoy working with. By doing so, you are well on your way to identifying your target market upon which you would do well to focus all of your efforts. When I was a loan officer 30-plus years ago, I chose the purchase market. It became my target market, and I did very well at it. What amazes me today is the number of loan originators that don’t like or respect Realtors, yet they have chosen to focus all their efforts on the purchase market. Folks, if you do not enjoy working with Realtors, you should forget focusing on the purchase market. You’d do better to consider a consumer-direct marketing strategy. There is another old saying that goes something like this, “Find a career doing something you love to do and you’ll never work a day in your life.”

3. Your competition There are two primary ways to view your competition. They are either “friend” or “foe.” One perspective is by nature negative and usually based on insecurity. The other is positive and based upon a confidence/secure outlook. There is nothing better than a healthy relationship between two competitors to make each other stronger which will, in turn, typically help them to do a better job serving their common markets. We have several clients that are competitors in the same community where one company referred us to the other … again, one of their competitors. I have respect for these types of companies and individuals. I have come to recognize a common denominator amongst the most successful companies and individuals … they commonly have good relations with their toughest competitors. Given the fact that we have so many external threats aimed at our industry, doesn’t it make sense to get to know and collaborate with others in our industry and within our own markets? If you haven’t already, get to know your competition. It will be good for both of you.

4. Identifying your niche As I mentioned above, my target market for years was the purchase market. But within that market, I developed a real niche with the first-time homebuyer market. A number of my competitors, most of whom were friends, focused their efforts on the refinance market. When rates dropped, they

went crazy and made a lot of money. I did well during those times, but certainly not as well as my half-crazed refinance buddies. When rates rose, however, I was the one to be envied. You would do well to identify your niche.

5. Creating awareness

6. Creating credibility

Question: “Why has the fast food franchise of McDonald’s been so successful?” Answer: “They are consistent!” It doesn’t matter where you go in the


7. The power of consistency



I am sure that there are several ways that you can create credibility within the markets you served, but none is more effective then positive testimonials from past customers. The “mustread” book, Raving Fans, written by Ken Blanchard and Sheldon Bowles speaks to the importance of having satisfied customers willing to tell others about the positive experience they had doing business with you. If you make having “raving customer” as the number one objective of your marketing plan, you are well on the road to success in marketing.

What Are You Marketing For? 

It is essential that your target market knows you exist. In today’s world, especially with so many social media tools, there are numerous ways you can create awareness without having to go with expensive advertising campaigns. I would recommend you go back and read the article I wrote in the June edition of National Mortgage Professional Magazine about social media, “Show Me The Money.” As I pointed out in that article, I primarily use LinkedIn and, to a lesser degree, Plaxo to connect with my market. Facebook is a great option, but I use it primarily for my personal connections. I have also launched a radio program called “Lykken on Lending” that is heard by thousands each week (if you are interested, go to to learn more). Additionally, I write articles like this one in National Mortgage Professional Magazine, as well as speak at conferences and conventions every chance I get. Trust me, it works! You can do the same. The key is finding out what comes naturally to you and to start there. In some cases, it may be that you have to develop a skill such as writing. When I started writing, it did not come naturally to me. Nonetheless, I recognize its value and press forward to develop my writing skills. The point is that you are in control and you may have to step out of your comfort zone to create a greater awareness.

world, a hamburger and fries from McDonald’s looks the same, tastes the same and is served in the same manner every single time. Another example is By Andy W. Harris, CRMS Starbucks Coffee. Any successful business must provide consistently excelness. Believe in yourself and your lent service over and over and over It’s funny to think back to the early years of grade school when I’d spend the entire product, but never be arrogant. again. recess chasing girls. When that bell rang, they were running and I was following. It  Be credible. Gain education, build 8. Stay focused credentials and testimonials. Make In an industry where an inordinate seemed like a good idea at the time and sure when someone researches you number of us struggle with ADD and just what we did as young boys. After and/or your company, they are ADHD, nothing can challenge a solid doing this for some time, we quickly realimpressed and not concerned. marketing strategy more than a lack of ized that we had no idea what to do when we actually caught a focus. The key to staying focused is  Be different. Don’t walk having a well-thought out plan and few of the slower girls and talk like everyone making a firm commitment to that other than giggle, run and else. Be yourself and be plan. I cannot tell you the number of jump in the bushes. I find this analogy similar unique. times that I was challenged in my commitment to stay focused on my mar- with how many handle their  Have a specific followketing plan of pursuing the purchase marketing in our industry. up system. Have a stepmoney market when the refinance We spend all of this time, money and effort to produce by-step lead follow-up craze was going so strong. But it paid more prospects, but unforsystem and checklist in off! Another example of staying place to ensure immedifocused on a marketing plan were tunately, many of us do not ate and organized conthose executives who made the unpop- have the systems or skills in tact from every angle. ular, but wise, decision to avoid doing place to convert a prospect sub-prime products and kept them- to a client. New and innova“No one likes a cheesy  Listen. The more you selves and/or companies focused on tive marketing ideas are salesman, especially listen, the better you the core Fannie Mae, Freddie Mac and important, but preparation one who pressures for the response and converunderstand a situation U.S. Department of Housing & Urban sion is much more imporor goal and the more Development (HUD) products. Many their client.” you will convert. that yielded to the temptation of veer- tant. Don’t go golfing withing away from their market focus and out a putter. You don’t become an expert overnight.  Listen to yourself. Record a message started offering sub-prime lending lost and listen to it. Hear what others hear in not only their focus, but in many cases, It takes years to develop the education and your introduction or follow-up. Critique they lost their companies as well. The expertise in our industry to speak accuyourself and make adjustments. key to maintaining your focus is found rately and intelligently when communicating with a prospect. Your confidence and in making an informed and quality decision and then following through abilities as a service provider will clearly  Have access to great products. In this market, you cannot afford to not be … staying focused on your commit- show, either on the phone or in person. The hard truth is that some people simply competitive on price or program ment to your marketing plan. will never convert as much as others. Some choices. Don’t make things harder on yourself when there is no reason to. As always, I welcome your feedback things just come naturally and are difficult on this or any other article I have writ- to train in those who don’t have the “gift.” ten or anything else you would like me The solution would be to determine your  Be professionally persistent. The strengths and build upon them, while surmajority of conversion comes from to write about. rounding yourself with a team that can the fifth contact. Put status on your lead as quickly as possible. David Lykken is president of mortgage support your weaknesses. One major problem our industry has strategies and managing partner with Mortgage Banking Solutions. He has faced (which hopefully is getting better) is  Educate. Educate your clients on what they don’t know which is more than 35 years of industry experi- turning a respected professional into a important. This goes a long way with ence and has garnered a national repu- general commodity for quick comparison building rapport and expert status. tation, and has become a frequent guest without the thought of commitment. I primarily blame excessive, and sometimes on FOX Business News with Neil Cavuto, Stuart Varney, Liz Claman and Dave unethical, online and media marketing in  Put your client before yourself. When you do this, you get business. When Asman with additional guest appear- conjunction with limited education, backyou don’t, you lose business. Focus ances on the CBS Evening News, ground and accountability requirements on the long-term and be a good perBloomberg TV and radio. He may be to loan originators and others selling real son or please do the rest of us a favor reached by phone at (512) 977-9900, estate. I’m glad to say this is changing and and do something else for a living. ext. 101 or e-mail dlykken@mortgage- finally improving other than some bad legislation affecting the consumer which I will not get into in this piece. Market share  Return phone calls and e-mails. Simply put, return phone calls and e-mails! To listen to author David opportunities are excellent. So the marketing is working … great! Lykken’s online radio show,  Answer your phone. Again, simply log on to www.blogtalkra- How do we convert these prospects? put, answer your #@!* phone! and type in “Lykken on Lending” in the “Search” box on  Be confident. Confidence is one of the most important factors in busicontinued on page 30 the right-hand side of the page.

 Track your conversion and place quickly. If something is not working, correct it. Make sure to deny or approve loans quickly. Good news fast, bad news faster.  Lose the salesman and become the expert. No one likes a cheesy salesman, especially one who pressures their client. You’re dealing with one of the largest and most important financial decisions a person will make … act like it!  Be current. Web, video, social, search engine optimization (SEO), etc.— make yourself accessible. You must be on board here to adapt with today’s consumer.  Be positive and stay positive. Are you having a bad day? Get over it. Your prospect doesn’t care, but can tell from your tone. Don’t surround yourself with negative people. Remain focused and appreciate your blessings. Never allow fear to make decisions or control emotions.

 Always think referral. The more referrals you get, the more passive marketing is happening through others. It’s free and much easier to convert. Use new ideas and strategies to gain market share. Manage time (yourself) wisely everyday. Watch your return on investment (ROI) both financially and from time spent on each marketing campaign. Just remember … when creating a marketing plan, don’t forget the most important piece of the puzzle which is to build the skills that convert a prospect into a client. It’s not selling, it’s educating through persistent communication. 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) 4960431 or e-mail or visit




 Be consistent with successes and correct failures. If something works, maintain it. If something does not,

change it. Always market no matter how busy you think you are to avoid peaks and valleys.

Odds of a child becoming a professional athlete: 1 in 16,000 Odds of a child being diagnosed with autism: 1 in 110

Some signs to look for: No big smiles or other joyful expressions by 6 months.

No babbling by 12 months.

No words by 16 months.

To learn more of the signs of autism, visit © 2010 Autism Speaks Inc. “Autism Speaks” and “It’s Time To Listen” & design are trademarks owned by Autism Speaks Inc. All rights reserved.

The Truth About Direct Mail Still effective for the mortgage industry or a dying strategy? By Joy Gendusa

As a mortgage professional, you may way to capture their identity so you can wonder “Is direct mail dead?” It’s a now send them a campaign. That camcommon conversation going on paign consists of e-mails, letters, conamongst mortgage marketing experts necting with them on social media sites today. Actually, the debate rages in and staying in front of them until they every industry, but you deserve to know are ready to buy. the truth about direct mail and how it For all of the skeptics who continue personally affects your business. to argue against the effectiveness of So here it is: Is sending print advertising, specifipostcards, letters and snail cally direct mail in today’s mail a dying strategy? world, here is some hard The simple answer is no. evidence that clears up a Direct mail isn’t taking few common myths. its last breath any time soon, but it is evolving. Myth #1: Business marketing strate“Nobody reads gies are different than four junk mail or five years ago. Now, it’s anymore” common and necessary to This is one of the most misintegrate a marketing camguided beliefs out there right paign with your Web site, now. According to the 2010 social media pages and e- “A well-written letter DMA Statistical Fact Book, 79 mail marketing. percent of households read will draw the reader The bottom line … direct or skim direct mail pieces. in and present your mail still yields results, is Also, an International case in a conversaeffective for mortgage proCommunications Research tional, to-the-point fessionals today and is still study found people were style. Be sure it is one of the only mediums 31 percent less likely to absolutely clear why that can specifically target ditch unopened mail than your ideal clients. they should read your delete unopened emails, So what does this letter, or it won’t pass and 45 percent said they mean for you as a mortfound direct mail less the skim test.” gage professional? intrusive than e-mail. Only when you allow You are not limited to direct mail to work with e-mail market- the traditional “letter and envelope” ing, your Web site and online mediums method of direct mail. More and more like Pay-Per-Click (PPC) will you maxi- mortgage brokers are turning to direct mize the return on investment (ROI) for mail postcards to reach their clients. your marketing dollars. With marketing Postcards are eye-catching, easy to read today, there isn’t a solo action that will and, best of all, don’t have to be bring a stampede of clients through your opened. door or make the phone ring. When you The biggest strength in postcards lies plan to market, you must think with an in their ability to generate responses. If integrated approach. You’ll see a big dif- you can get your prospect to call (either ference in your responses. right away or after visiting your Web Let me explain. Your job as a mar- site), you have a much higher chance of keter is to isolate identities of individu- closing the loan. als likely to need what you have to offer. Once those identities are isolated, Myth #2 “You can’t track it is your job to warm them up over the the effectiveness of course of time until they reach for your direct mail” services. You don’t know where these Whether you are sending letters or identities are exactly in the sales postcards, there is just no way to tell process. They could be ice cold, luke- exactly how many people read your ad. warm or ready to close. This is true, but what is it you really I’ll break it down further for you. want to track? How many pieces get You buy a list, you mail to it. Those opened, or how many responses you recipients even highly interested proba- receive? bly will not call. They might go to your It really doesn’t matter how many peoWeb site. On your site, you must have a ple read them if nobody calls. However,

tracking is important and direct mail offers a variety of ways to measure effectiveness. One tactic available is placing a customized landing page on each postcard or letter. You can tell exactly how many people visit the site, collect new lead contact info and track the effectiveness of your mailings. You can also set up a separate 1-800 number for your mailings, or print a promotional code on the piece to track which offers are pulling a response. In reality, direct mail is one of the easiest mediums to track!

Myth #3 “Direct mail is more expensive than e-mail”

These myths are busted

As mentioned earlier, 79 percent of people read or skim their mail. This means a prospect is intentionally setting aside time to hear what you have

Do you offer reverse mortgages? If you do, direct mail is essential for you! The evidence showing older generations prefer receiving offers through the mail is overwhelming. Whether it is inherent distrust of the Internet or force of habit, it doesn’t matter, it just works. A well-crafted letter or well-designed postcard will go a long way to increase the number of reverse mortgage loans you close.

Now that you know direct mail is very alive … what do you do with this information? Use it to boost the results of your marketing plan! If you have relied solely on direct mail in the past, branch out into email marketing. Get a professional Web site, track your campaigns with custom

Joy Gendusa is chief executive officer and founder of PostcardMania. She began PostcardMania in 1998 with nothing but a phone and a computer and zero investment capital. By 2008, revenues reached nearly $19 million and the company now employs more than 150 people, prints four million and mails two million postcards each week representing more than 40,000 customers in over 350 industries. For more information, call (800) 628-1804, ext. 342 or visit

Greater visibility Especially after the housing crisis, many mortgage brokers cut back on advertising. This isn’t a smart move, but it’s what happened, and you can use it to your benefit. While others drag their feet, you have the opportunity to saturate your local market with targeted direct mail postcards. Stand out from the competition and capture the market share simply because your competitors stopped marketing! Consider the example of Bed Bath & Beyond and Linens ‘n Things. When the recession hit, one cut back on their marketing and the other ramped up their direct mail campaign driving home their well-known 20 percent off coupon. Today, one company is going



An attentive audience

In a marketing e-mail, people aren’t looking for emotion. They want the facts, and they want them quickly. That is, if they bother reading it in the first place. With a direct mail piece, you have the opportunity to make an emotional connection with your prospect. You can inspire excitement, fear, curiosity, etc. You must capture attention and mail to a list of people interested in your services, but your chances of being remembered by the prospect increase every time you make an emotional connection with them. I have a mortgage client who used one of our sample designs for his postcard. The headline reads, “Wait any longer and you may MISS THE BOAT!” On the card is a picture of a group sailing on a small sailboat over beautiful clear blue water. Then it reads, “Refinance While Rates Are Still Low!” The emotion evoked by this postcard would never translate in an email, because it just isn’t the appropriate venue. My mortgage customer had a 2,500 percent ROI from that piece, and the emotion it conveyed to the reader had a lot to do with it.

The best way to reach seniors

landing pages, market online with PayPer-Click—integrate your marketing! If you have never tried direct mail or have believed the “dying” myth, get back in the water! Know the benefits you get with direct mail and apply them to your advantage. Use direct mail to drive traffic to your Web site and collect e-mail addresses, then follow up with more e-mails! It’s a proven formula that does work for mortgage professionals, even in today’s market. Remember, direct mail isn’t dying, it’s evolving. Evolve with it, integrate your marketing and dominate your competition.


Clearly, due to developments in the direct mail industry, these concerns don’t hold water. Direct mail is still effective and will be around for a long time to come. But is it still an effective venue for mortgage professionals? With changing technology and a volatile marketplace, should direct mail be a part of your marketing plan? Yes, it absolutely should. But remember, it has to be part of an integrated approach. Let’s look at some of the benefits you get with a direct mail campaign.

An emotional connection

strong while the other closed all of its physical locations. Can you guess which one kept marketing? Right! Bed Bath & Beyond weathered the storm because they kept mailing! They got great visibility because their competitor bailed out of the market. 

This myth is true. E-mail is an extremely affordable way to advertise, and postage rates seem to always be on the rise. However, there is more to the story. Direct mail is far more effective than email marketing. Unsolicited e-mails have an unimpressive open rate and if your e-mail is opened, very few are read by the recipient, especially if they have no connection with you. An open rate indicates nothing about how many people actually read the contents. And another thing to consider is how you feel when you get an unsolicited e-mail from a strange business you’ve never heard of. Think for a moment. Do you like it? Do you have a good impression of that company or bad? If you become the “spammer,” how will 99 percent of the recipients feel about your company? With that said, the best option is to integrate both e-mail and direct mail. The main problem with e-mail marketing is the scarcity of high quality lists. To save money, use direct mail to drive traffic to a custom landing page, collect e-mail addresses on that page and send follow-up e-mails to those addresses. Your open (and read) rates will be off the charts and you’ll save the money on follow-up mail pieces!

to say. They may not give you a lot of time to capture their interest, but they are giving you the chance—and that’s a big advantage! A well-written letter will draw the reader in and present your case in a conversational, to-the-point style. Be sure it is absolutely clear why they should read your letter, or it won’t pass the skim test. Postcards have an even better chance. State “why they should use your services” simply and quickly, provide a few important benefits on the back, and include a compelling offer and emphasize your contact info with a strong call to action. This method has been working for mortgage brokers and other industries alike. Take a look at what’s in your mailbox—how many times have you called a business because you received an ad in the mail?

Turning a Headache on its Head Transforming the HMDA/CRA process into a winning marketing strategy By John A. Woloshen




Each year, lenders are required to ded- ering 2009 lending activity, such as icate valuable time and resources to applications, originations, purchases compiling and submitting Home of loans, denials and other actions, Mortgage Disclosure Act (HMDA) and such as incomplete or withdrawn Community Reinvestment Act (CRA) applications. data. While typically viewed as a burAccording to the FFIEC, the total densome process necessary for main- number of originated loans of all types taining regulatory comincreased by nearly 1.8 pliance, there is a signifimillion, up 25 percent cant benefit to be derived from 2008. This is largely if done properly—one due to a 67 percent that can positively impact increase in refinancings. your marketing strategy. Additionally, FHA loans Once institutions subwere up 37 percent in mit HMDA/CRA data at the 2009 and VA loans were beginning of each year, up by 6.7 percent. the Federal Financial CRA data was released Institutions Examination in August for small busiCouncil (FFIEC) then releasness, small farm and es that data to the public. community development This presents useful infor- “Much is revealed by lending reported by cermation that lenders can tain commercial banks analyzing relevant use to effectively compare and savings institutions. HMDA/CRA data, their marketing efforts to A total of 941 lenders and doing so can those of their competitors reported data about origand determine where enable institutions to inations and purchases of opportunities for improve- better strategize their small business and small marketing and sales ment lie. farm loans, a two percent approach.” decrease from the 965 2009 HMDA/CRA lenders reporting data in data indicate 2008. And of the 941 significant market institutions reporting 2009 data in changes 2010, more than 40 percent were not On Sept. 20, HMDA data from mortgage “large” institutions under the applicalending transactions was released. ble regulation and, therefore, reported HMDA data was collected from 8,124 either voluntarily or because they U.S. financial institutions including elected to be evaluated as “large.” banks, savings associations, credit CRA lending, however, is down. The unions and mortgage companies, cov- total number of small business loans

reported in 2009 decreased by 42 percent from 2008, and the number of community development loans originated decreased 29 percent, from 22,287 in 2008 to 15,882 in 2009. Institutions need to not only make note of these national trends, but also focus on community trends that directly impact their own businesses. Much is revealed by analyzing relevant HMDA/CRA data, and doing so can enable institutions to better strategize their marketing and sales approach.

Using 2009 HMDA/CRA data for strategic marketing Evaluating HMDA/CRA data can help institutions make significant and highly strategic changes to their marketing efforts. An institution can evaluate its lending activity alone to look for weak areas, such as identifying communities with little lending activity. Any weak areas may need a different marketing strategy or different loan products to generate activity. Since HMDA/CRA data is public information, it provides a detailed view of what other lenders are doing in specific markets. Institutions can compare their lending patterns to any number of other institutions to see how others are doing in any given area. By comparing one’s own lending activity to a competitor’s activity, institutions will have better information to guide strategic changes where necessary, offer new loan products, increase marketing efforts in more competitive areas, reduce marketing efforts in less competitive areas, etc. This should lead to more focused marketing and crossselling.

Analyzing peer data There were more than 19 million appli- 561-630-1257 CEO: Thomas R. Evans

Lead Provider Roundup A short list of companies offering leads for mortgage professional

Type of leads: Cost Per Click, Internet leads, performance based is the leading aggregator of rates and other information on more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate's CPC program provides a performance-based, cost effective method for reaching Bankrate's qualified, in market consumers. Advertisers enjoy greater control and flexibility over their marketing dollars, which means better campaign performance and higher ROIs.

cations in the 2009 HMDA data. While this information is public and readily available at no cost, analyzing the data can be costly and time-consuming for lenders in need of evaluating hundreds of institutions. There can be a significant amount of information to consider, and lending institutions need a viable solution to evaluate this data effectively and efficiently for marketing purposes. Using a Web-based tool built on modern, .NET technology, institutions can more easily gauge how they compare and rank with their peers. Ideally, a system should enable an institution to perform evaluations by selecting a specific geographic area. Once you determine your criteria, you can filter the Loan Application Register (LAR) data, a register that lists all loan applications taken by a savings association, select institutions you consider to be your peers based on criteria such as volume or geographic vicinity, and then run analysis reports. Once the information is analyzed, different types of reports can be generated, such as table reports, top peer reports, ranking reports, market share reports, pricing reports or spatial assessment reports. HMDA/CRA data provides some of the best, most cost-effective market research available. Institutions that take advantage of this information are better positioned to improve their marketing efforts and move themselves into a more competitive position. John A. Woloshen is executive vice president and chief operating officer of RATA Associates, a provider of HMDA/CRA data compliance software and services for financial institutions. For more information, call (407) 831-7282 or visit

EnVision Direct 800-922-9860 CEO: Christian DeWorken Type of leads: Our clients stay ahead in this changing market with our great service and allinclusive pricing. EnVision Direct is a full-service printing and direct mail company. From start to finish, we build quality into every stage of the process to ensure your print and mail campaigns sail efficiently through our state-of-the-art facility. Our services include specialty list acquisition, data management, mailing services, graphic design. offset, web and digital printing. Whatever your project may be, we will strive to help you meet your goals!

How the Consumer Experience is Driving Change in the Mortgage Industry Bill gets a mortgage and a lot more than he bargained for By Jeff Solomon

Type of Leads: Internet Leads, Inbound Calls, Branded Leads Established in 1995, is the first Internet site to feature live mortgage interest rates on the Internet for consumers. More than half a million residential mortgage shoppers look to every month for our unique combination of interest rate information, financial news, consumer education materials, and personal finance tools.

Jeff Solomon is founder and senior vice president of product and marketing for Leads360. He is responsible for defining and implementing the strategic product roadmap of the company, as well as overseeing the company’s lead generation and branding efforts. For more information, visit

Split Test Media, LLC CEO: Michael Andrew

Type of leads: Targeted mailings, creative design, direct response campaigns Premier Advantage Marketing has over 30 years of industry experience in direct mail marketing. Our team of professionals leads the way in managing and executing strategic direct mail marketing campaigns. We have a powerful understanding of the messages that impact consumers and reach your prospects. With dedication to implementation and attention to detail, your project will succeed as it moves from A to Z with measurable results. We handle all types of targeted direct mail marketing, whatever your venture, and will consult with you to create your next lead generation campaign.

Type of Leads: Refinance Leads Only. Conventional, FHA, VA, & Jumbo. Rate-And-Term, Cash-Out, & Debt-Consolidation. “GIVE a man a fish, feed him for a day. Teach a man HOW to fish, feed him for life.” I teach mortgage loan originators HOW to generate exclusive refinance leads. Stop cold calling. Learn how to make borrowers call and beg you to refinance their loans. I raised myself from failure to success by mailing cheap refinance letters from home. I closed 71 loans and made $248,954.62 last year. I’ll show you exactly what I did. Just copy me and win.

JUNE 2009  O CTOBER 2010

Premier Advantage Marketing 888-799-3959 Vice President: Tom Emmerson



greatly. Lead nurturing is about consistent, relevant communications to consumers. The key is relevance. Sending an e-mail simply asking if a consumer is ready to refinance is not a relevant piece of communication. Lenders should take care to create a string of drip e-mails that have useful content for consumers. Success relies on how much information about the consumer was learned during the discovery calls early on in the process. With good intelligence about who the consumer is and what they are seeking, lenders can customize content that will be relevant and useful. Implementing a customer-centric approach requires a combination of effort, discipline and automation. Lenders who want to be successful should consider upgrading their lead management process or investing in software to optimize customer acquisition. Mortgage professionals can learn from their failures, as well as their successes. In fact, many of the best practices learned from the lending boom, such as speed to contact and consistent follow-up, still apply. Lenders must combine those tactics with a consumer-focused attitude to win in the new mortgage landscape. In the end, Bill didn’t refinance his home. Sue had done a great job understanding Bill’s financial situation and had recommended he wait and focus on maximizing his credit. Of course, Sue will be staying in constant contact with Bill because she knows that eventually he will refinance and that being a valuable resource for Bill now can pay dividends later. That’s a customer-centric lending experience. What’s yours like? 

It’s 9:00 a.m. on a Monday morning. completed a short online application for Bill Bailey arrives at work, pours a cup a mortgage refinance. Within minutes of of coffee and sits down at his desk. completing the form, Bill was bombardBefore starting his day, Bill decides to ed with calls from mortgage brokers. go online and search for “Hello Bill, this is Sue a mortgage. from American National Over the weekend, Bill Mortgage, I received your and his wife spent several inquiry online, do you have hours working through a moment to discuss your their finances trying to figfinancial goals?” Discussing ure out how they were his financial goals wasn’t going to pay for their son to exactly what Bill was go to college in the fall. expecting, but neither was They had come to the conthe rest of the process he clusion that they might went through with Sue to have enough equity in their refinance his house. home to refinance or take out a home equity line of “With good intelliAdopting a credit, but the idea of talkconsumergence about who the ing to another mortgage consumer is and what centric approach broker produced a sinking Enter the new consumerthey are seeking, feeling in Bill’s stomach. He centric approach to mortlenders can customize remembered the nightgage lending, a practice that content that will be mare his family went many lenders are now relevant and useful.” through last time they got a adopting. The idea isn’t new mortgage—they had nearas some financial instituly lost their house due to a scrupulous tions have always approached the lending mortgage broker who got them into an process this way, but now, a greater number unscrupulous program. Reluctantly, Bill of lenders are recognizing that consumers suggested to his wife that he would go have become more informed than ever online to see what kind of rates were before about their personal finances and available. aren’t about to be deceived again. Add to Being more than a bit apprehensive, the equation, government-stipulated regBill clicked on the first search result and ulations, and lenders have little choice

but to change their lending practices. Providing a good consumer experience means a lot more than just being nice, it means being transparent about every aspect of the lending process. Lenders must be open and honest in their communication from start to finish, including the lead generation process. Landing pages must accurately explain the lending process. Being the first to contact a consumer means more than just selling a mortgage; a consumer’s financial goals must also be taken into account. There are far fewer loan programs these days from which to choose, which makes comparison shopping less effective. To win consumers’ business, lenders must provide more value, such as supplying accurate quotes quickly by phone or by email. Many pricing engines make it easy to offer consumers automatic quotes within minutes of completing a contact form, but sending the same rate and program to everyone is a recipe for disaster. Lenders should only work with pricing engines that update rate sheets frequently and have highly accurate quoting technology. New Real Estate Settlement Procedures Act (RESPA) rules require loan officers to be appropriately licensed, thus mortgage companies can expect big penalties if their loan officers discuss mortgage options in states in which they aren’t licensed. But routing leads to the right loan officer goes beyond just state licensing. The most effective mortgage companies are implementing skills-based lead routing to align consumers with loan officers that have similar interests, backgrounds and experiences. The sales process for both refinance and new purchase loans takes longer than it used to. Lenders should be prepared to work with customers for greater lengths of time to win their business, which necessitates setting follow-up reminders, prioritizing call-backs and leveraging automatic e-mails. The days of one-call-closes are long gone, and mortgage professionals who embrace lead nurturing will benefit


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All units are required to be established within specific timeframes, include various coordinating and administrative mandates, provide for reporting requirements to Congress, and must function through interacting participations within and across all Bureau units and, where applicable, certain federal and state agencies and regulators. In addition to the foregoing, the Director must also establish the Consumer Advisory Board and appoint its members.48 By the time of the transfer of authorities to the Bureau on the Designated Transfer Date, as well as its receiving other authorities pursuant to the Act, the Bureau must, among other things, conduct research relating to consumer financial products and services, develop its nationwide consumer complaint response center, plan and take steps to implement the risk-based supervision of non-depository entities, and prepare for the opening of outreach offices.49 On Friday, Sept. 17, 2010, President Barack Obama appointed an Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau. The President’s appointment is charged with the responsibility of developing the Bureau. Such an appointment did not require Senate confirmation, because the Act specifically states that the Treasury Secretary is “authorized to perform the functions of the Bureau” and may provide “administrative services necessary to support the Bureau before the designated transfer date” of the many regulatory authorities to it.50 Therefore, the Treasury Secretary has purview over the Bureau, and also has the authority to appoint somebody to run the Bureau until a Director is chosen and confirmed by the Senate. Timothy Geithner, the Treasury Secretary, acting on and in agreement with President Obama’s wishes, supported this special appointment. Given the Senate’s gridlock and political posturing that have unduly accompanied many of this Administration’s nominations,51 it is no wonder that President Obama chose to appoint an Assistant and Special Advisor to develop the Bureau, rather than subject yet another of his nominees to extensive delays in confirmation. And surely there would be long and torturous delays! As the president said recently when Senate delays in confirming his nominees constrained him to name 15 recess appointments, “I simply cannot allow partisan politics to stand in the way of the basic functioning of government.”52 The appointed individual will serve until a permanent Director is nominated and confirmed to the five-year position. Elizabeth Warren, the person President Obama has appointed to develop the Bureau, is the very person who devised the idea of a consumer financial protection agency and then advocated in the halls of Congress, in speeches, lectures, and interviews throughout the United States, for its creation.53 In some ways, Mrs. Warren has become the face of consumer financial protection advocacy at a time when consumer confidence is at a low mark.54 President Obama expects the Bureau to be a “watchdog for the American consumer, charged with enforcing the toughest financial protections in history.”55 As the President stated unequivocally, Mrs. Warren “will help oversee all aspects of the Bureau’s creation, from staff recruitment, to designing policy initiatives, to future decisions about the agency.”56 Her credentials indicate that she would be an exacting, methodical, insightful, and highly competent shepherd of the Bureau’s mandates. She has published numerous scholarly articles, and, after teaching at other law schools, she has been teaching contract law, bankruptcy law, and commercial law at Harvard Law School. Warren’s legal expertise and experience have led to her being unofficially considered a nominee to serve as a Supreme Court Justice, for the position previously held by Justice John Paul Stevens (and now held by Justice Elena Kagan). She has served as the Chief Adviser to the National Bankruptcy Review Commission, and was appointed by Chief Justice Rehnquist as the first academic member of the Federal Judicial Education Committee. Importantly, her understanding of the financial industry is broad based and hands-on. Warren has served as a member of the Commission on Economic Inclusion established by the FDIC. She has been the Chairperson of the Congressional Oversight Panel, charged with investigating the Troubled Asset Relief Program (otherwise known as TARP), in which role she has consistently fought for more accountability and transparency in the financial system. Mrs. Warren is a mature woman of 61 years of age, somebody who is not an ivory tower scholar, having grown up in Oklahoma, attended non-Ivy League colleges, and received a JD from Rutgers University. Her popular books, entitled The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke,57 and All Your Worth: The Ultimate Lifetime Money Plan,58 reflect a commitment to proper financial planning, transparency, and responsibility. Her broad abilities are reflected in the fact that she has been elected to the American Academy of Arts and Sciences. She has conducted empirical studies for the National Science Foundation and the Ford Foundation. A fierce advocate for preserving middle class financial opportunities through proper consumer financial protection, Warren is a former vice president of the American Law Institute and she is also a former Sunday School teacher. continued on page 36

place. We look forward to continuing to provide our customers with more products and great service.” For more information, visit

Wholesale lender NexBank launches broker to banker platform

American Foundations MortgageBanc announces merger with Inlanta Mortgage Inlanta Mortgage has announced that American Foundations MortgageBanc’s retail offices and operations are merging with Inlanta through a strategic agreement. American Foundations MortgageBanc was previously a wholly-owned subsidiary of Generations Bancorp Inc. Terms of the transaction were not disclosed. “We’re excited that American Foundations MortgageBanc will be adding to the strength and quality that Inlanta has demonstrated over our 17 years in this business,” said John Knowlton, president and founder of Inlanta Mortgage. “As a conservative Midwest lender, American Foundations is a group of quality mortgage lending professionals and their core values

are similar to ours and make this a perfect fit. This merger strengthens our presence in Illinois and Wisconsin.” American Foundations MortgageBanc has retail branches in Illinois and Wisconsin that will change their name to Inlanta Mortgage. The merger will strengthen Inlanta Mortgage’s leadership team. Nicholas J. DelTorto, president of American Foundations MortgageBanc Inc. will join Inlanta Mortgage as executive vice president. He has more than 28 years of industry experience. In addition, John L. Watry will become chief financial officer of Inlanta Mortgage; he was chief operating officer at American Foundations MortgageBanc. “We’re pleased to be merging with Inlanta Mortgage and what the new combined company can offer its employees and customers,” said DelTorto. “Inlanta is a top-notch organization that is highly regarded in the industry and market-

Recognizing the significant role that smaller, independent originators play in generating mortgage loans, NexBank, has announced the launch of a new warehouse lending program designed to give small and mid-sized banks, as well as large mortgage brokers, the capacity and flexibility to grow and compete for business. NexBank has committed $100 million in capital to their new warehouse lines to date. “Not only does this new warehouse lending product allow mortgage bankers and brokers to expand their business capacity with access to capital and control,” said Jed Meaux, vice president and head of NexBank’s mortgage division, “it also gives consumers more options to choose from— and in the market today, this kind of flexibility is a winning strategy.” NexBank will be offering multiple tiers to their program, from $100,000 required in net worth to $1 million depending on the size of the warehouse line. “But with the introduction of this new line of credit, NexBank has realized an overwhelming positive response from our current clients as well as new customers to participate in this lending program,” said Meaux. “Small mortgage bankers

need a financial partner and business support. With this new warehouse line of credit, our customers can significantly impact their profitability and increase their agility in the marketplace.” Meaux noted that he is seeing an increase in the number of brokers in the market who are becoming bankers by obtaining warehouse lines of credit. As this development continues, NexBank will be able to expand and broaden its range of clients—adding small and mediumsized local mortgage bankers and mortgage brokers—who seek the professionals in NexBank’s mortgage division because they recognize the bank’s ability to deliver a financial package that supports longterm growth. “The small to mid-sized banker and large mortgage broker are comfortable doing business with NexBank,” said Meaux. “Essentially, it is really about relationship— it is about doing business with a partner you can depend on and who you know has the means to financially support the growth of your business—and who is not going to surprise you by pulling out of the market, putting both you and your customers at risk.” For more information, visit

Fidelity National Financial acquires Commerce Velocity Fidelity National Financial Inc. (FNF), a continued on page 39


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On the same day that President Obama appointed Warren to develop the Bureau, she wrote:





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“Atare Agbamu is one of only a handful of people in the reverse mortgage arena who possesses a commanding understanding of the reverse mortgage industry. As an originator, he has hands-on experience educating seniors and their advisors. As author of the “Forward on Reverse” column in The Mortgage Press since 2002, Atare Agbamu communicates nationally with the housing finance community, bringing the unique insights and experience of an ardent reverse mortgage expert into a wider business context. “This book combines Atare’s keen insights and know-how with extensive research to create a first of its kind resource for the reverse mortgage industry. It offers a comprehensive overview of the industry plus detailed information on marketing and originating reverse mortgages. “Present and future reverse mortgage professionals and senior advisors will profit from decades of experience skillfully woven into this book. If you plan to succeed in this industry, this book is the place to start.” —Sarah F. Hulbert, President, Senior Financial Corporation and former four-term Co-Chair of NRMLA’s Board of Directors “When I first began reviewing the contents of this book, I became quite jealous ... Atare Agbamu has set down an impressive amount of information ... And he delivers it in an easy-to-read, simple-to-understand style that will make this book essential reading for all reverse mortgage professionals.” —from the Foreword by Jim Mahoney, Co-Founder and Former Chairman, Financial Freedom Senior Funding Corporation, and former four-term Co-Chair of NRMLA’s Board of Directors “The stories [Chapter 15: Profiles in Satisfaction] are the best vehicle to increase understanding and acceptance of reverse mortgages among us laypeople. They are very compelling ...” —Therese Cain, Executive Director, Minneapolis/St. Paul Chapter of Little Brothers—Friends of the Elderly “This book should be required reading for all new loan consultants originating reverse mortgages and is recommended for experienced ones as well. This book provides excellent insight and information on preparing ahead to provide the service our seniors deserve, to ensure a smooth loan process and shorten the time to closing. Most of the problems caused in the processing and closing of reverse mortgages come from inadequate preparation.” —Deanne Opstad, AVP, Senior Underwriter, Generation Mortgage Company

“The new consumer bureau is based on a pretty simple idea: people ought to be able to read their credit card and mortgage contracts and know the deal. They shouldn’t learn about an unfair rule or practice only when it bites them—way too late for them to do anything about it. The new law creates a chance to put a tough cop on the beat and provide real accountability and oversight of the consumer credit market. The time for hiding tricks and traps in the fine print is over. This new bureau is based on the simple idea that if the playing field is level and families can see what’s going on, they will have better tools to make better choices.”59 In response to these sentiments, some critics believe that the consumer needs to evince greater responsibility.60 This view precisely misses the point: providing consumer financial protection upholds the rule of law by actually making sure that the consumer fully understands the terms of financial products and services in the context of a transparent, two-way financial transaction! If the need for financial reform has taught us anything at all, it is that a financial system can collapse when market participants are not properly informed of risks, when information about financial risk is not appropriately vetted into the market, where regulatory compliance created to assure an orderly market is not enforced or does not even exist, and if financial products and services are not monitored for defects that may cause systemic failure. The consumer has never really had a seat at the financial industry’s roundtable—until now! Jonathan Foxx, former chief compliance officer for two of the country’s top publiclytraded residential mortgage loan originators, is the president and managing director of Lenders Compliance Group, a mortgage risk management firm devoted to providing regulatory compliance advice and counsel to the mortgage industry. He may be contacted at (516) 442-3456 or by e-mail at

Footnotes 1—Durant, Will and Ariel, from “Character and History,” in The Lessons of History, p. 32, Simon and Shuster, 1968. 2—I would like to take this opportunity to thank the Publisher, Editor-in-Chief, and Staff of National Mortgage Professional Magazine (NMP) for permitting me the print space needed to explore the Dodd-Frank Act’s impact on the mortgage industry. This three-part series of articles comprised almost 17,000 words and required significant careful planning. In providing this unique forum and journalistic support to the mortgage originator community, NMP’s monthly magazine continues to demonstrate its serious, timely, and unwavering commitment to the needs of the mortgage industry. 3—HR 4173: Dodd-Frank Wall Street Reform and Consumer Protection Act, 111th Congress (2009-2010): “A bill to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end “too big to fail”, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.” Sponsored by Rep. Barney Frank (D-MA) and Sen. Christopher Dodd (D-CT). 4—Foxx, Jonathan, “Landmark Financial Legislation: New Rules for Mortgage Originators—Part I: Reformation and Regulations,” National Mortgage Professional Magazine, August 2010, Volume 2, Issue 8, pp 28-42. 5—Foxx, Jonathan, “A New Era of Mortgage Reform—Part II: Legislation— Reactive or Proactive,” National Mortgage Professional Magazine, September 2010, Volume 2, Issue 9, pp 22-28. 6—I have written extensively about the Bureau. Also see: Foxx, Jonathan, “The Birth of an Agency,” in National Mortgage Professional Magazine, September 2009, Volume 1, Issue 5, pp 24-27. This article provides a chart that outlines the Bureau’s structure and authorities; and, Foxx, Jonathan, “The CFPA Controversy: Asking the Tough Questions,” in National Mortgage Professional Magazine, October 2009, Volume 1, Issue 6, pp 22-25. 7—Known in German as “Gedankenexperiment,” and made famous by Albert Einstein (“riding on a light beam at the speed of light”), Erwin Schrödinger (“Schrödinger’s Cat”), and James Clerk Maxwell (“Maxwell’s Demon”), a Thought Experiment is a thinking exercise which extrapolates a theory or hypothesis into and facilitates the imagining of the potential consequences—especially when actual experimentation may not often be practicable or possible. 8—Einstein, Albert, “My First Impression of the U.S.A.”, 1921, an essay published by Einstein after his first trip to the USA in June 1921. continued on page 38

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9—Designated Transfer Date is July 21, 2011, see Designated Transfer Date, Bureau of Consumer Financial Protection, Federal Register, Vol. 75, No. 181 (09/20/10). 10—The Designated Transfer Date must be between Jan. 17, 2011 and July 21, 2011, unless the Treasury Secretary determines that the orderly implementation of Title X is not feasible within 12 months; but, in no case may the Designated Transfer Date be later than January 21, 2012. 11—In addition to the “enumerated laws” many other laws are amended to provide for the Bureau’s interaction, such as the Expedited Funds Availability Act, Federal Financial Institutions Examination Council Act of 1978, Right of Financial Privacy Act, Telemarketing and Consumer Fraud and Abuse Prevention Act. 12—12 U.S.C. §§ 3801 et seq. 13—12 U.S.C. §§ 2901 et seq. Not included as an “Enumerated Consumer Law” in HR 3126, but enforcement authority over this Act is transferred to the CFPA. HR 3126 § 184(b)(2). 14—15 U.S.C. §§ 1667 et seq. Not specifically referenced in HR 3126’s definition of “Enumerated Consumer Law,” but enforcement authority over this Act is transferred to the CFPA. H.R. 3126 § 184(b)(2). 15—15 U.S.C. §§ 1693 et seq. 16—15 U.S.C. §§ 1691 et seq. 17—15 U.S.C. §§ 1666-1666j. Not specifically referenced in HR 3126’s definition of “Enumerated Consumer Law;” but enforcement authority over this Act is transferred to the CFPA. H.R. 3126 § 184(b)(2). 18—15 U.S.C. §§ 1681 et seq.; and, 15 U.S.C. §§ 1681m(e), 1681s-3, 1681w. 19—15 U.S.C. §§ 1692 et seq. 20—12 U.S.C. § 1831t(c)-(f). 21—15 U.S.C. §§ 6802-6809. 22—12 U.S.C. §§ 2801 et seq. 23—15 U.S.C. § 1639. 24—12 U.S.C. §§ 2601-2610. 25—12 U.S.C. §§ 5101-5116. 26—15 U.S.C. §§ 1601 et seq.

27—12 U.S.C. §§ 4301 et seq. 28—Public Law 111-8, 2009. 29—15 U.S.C. § 1701. 30—For a detailed discussion on the enumerated laws transferred to the Bureau, see Foxx, Jonathan, “The CFPA Controversy: Asking the Tough Questions,” in National Mortgage Professional Magazine, October 2009, Volume 1, Issue 6, pp. 2225. 31—In this article, I will not be discussing the Act’s new regime for national bank federal preemption in the area of state consumer financial laws, or, for that matter, the new framework for determining the states’ enforcement powers against financial services companies. With respect to the former, the Act resets the preemption framework for national banks to pre-2004 compliance guidelines—prior to when preemption regulations were promulgated by the Office of the Comptroller of the Currency (OCC). The Act provides now that the federal savings banks will have the same preemption rules that apply to national banks. July 21, 2011 will mark the commencement of national banks and federal savings banks being required to comply with more limited preemption of state laws in accordance with the 1996 Supreme Court holding in Barnett Bank v. Nelson. In the Barnett Bank decision, the Supreme Court set a standard for delineating preemption for national banks: a state law that “prevents or significantly interferes” with a national bank’s exercise of its powers is preempted. See Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111?203, 124 Stat. 1376 (2010), and Barnett Bank of Marion County, N.A. v. Nelson, 517 U.S. 25 (1996), 517 U.S. at 32. 32—The Act states that no rule or order of the Bureau shall be subject to approval or review by the Federal Reserve. 33—Op. cit. 3: the subsequent outline of the Bureau of Consumer Financial Protection is based on Title X–Subtitle A, Bureau of Consumer Financial Protection, and various Sections (1001-1100H). Title X commences almost threequarters of the way through the 2319 page Dodd-Frank Act. For sake of brevity and reading facility, I will not provide a corresponding citation for each and every analytical part of the outline provided in this article. 34—Op.cit. 3: Relief Available, Title X, Subtitle E, § 1055(c)(2)(A-C). Civil monetary penalties are in three tiers. First Tier: from $5,000 per day for minor violations of federal consumer financial laws. Second Tier: $25,000 per day for “reckless” violations. Third Tier: $1 million per day for “knowing” violations. 35—Consumer Financial Penalty Fund. continued on page 40

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Lender Processing Services Inc. (LPS), a provider of integrated technology and services to the mortgage and real estate industries, has announced the formation of the LPS Strategic Partnership Group. The Strategic Partnership Group will establish a network

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Informative Research has announced the availability of Automated Valuation Models (AVMs)

LPS forms network of default-related service providers


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through an extended relationship with Lender Processing Services (LPS). A cascade of up to four AVMs ensures the highest hit rate possible by sequencing through four AVM products, returning the first to meet the quality benchmark. The standard AVM products in the cascade are ValueSure, SiteX, CVM and CASA. Each delivers estimated property value, comparable sales, location map, and confidence score in an easy-to-read report. “In today’s sensitive lending environment, having an accurate property value estimate is critical not only to the qualification process, but also in underwriting and quality control,” said Brad Kelso,

of default-related service providers, including attorneys, title companies, foreclosure trustees, publication and posting providers and service of process companies dedicated to lowering costs and creating efficiencies for consumers, mortgage servicers and investors. LPS currently provides default-related administrative support services and technology solutions to mortgage servicers, law firms and trustee operations. LPS has recently announced a Request for Proposal (RFP) focused on the attorneys and trustees that provide default legal services. The RFP solicits bids and input from attorneys and trustees to determine the lowest cost and highest service level at which default-related services can be provided in various regions of the coun- 

provider of title insurance, mortgage services, specialty insurance and information services, has announced the acquisition of Commerce Velocity. Commerce Velocity provides technology solutions to mortgage lenders, loan servicing organizations and investment banks that enable users to mitigate risk and optimize outcomes for their mortgage loan portfolios. The firm offers three Web-based, SaaS products: Spectrum, Optimizer and AssetX. Spectrum provides a versatile endto-end loan origination platform, which can provide a true commitment-to-lend at the point of sale, apply risk models and workflow rules to repair problem loan files, and verify that each loan complies with regulatory and investor guidelines throughout the loan life cycle. Optimizer is a market leader helping Servicers to maximize cash flows from delinquencies and enforce workout consistency throughout the default management process. It enables servicers to deploy their preferred loss mitigation strategies. AssetX facilitates acquisition and management of performing and non-performing loan pools by providing the ability to consolidate and evaluate various data sources and provides traders with valuable insight into each transaction. Fidelity announced that the Commerce Velocity technology will be strategically aligned with ServiceLink, the national lender platform for FNF and a leading provider of origination and default related solutions for the mortgage industry. The strategic integration creates a complete workflow management solution from loan origination through loss mitigation, default and asset disposition. Mortgage lenders and servicers have long relied on an extensive suite of mortgage-related solutions from ServiceLink, including valuation, title, closing, subservicing, loss mitigation, and asset management and disposition. The addition of Commerce Velocity’s platform will now extend ServiceLink’s solutions to incorporate technology to process origination loan transactions as well as manage the loans in the default stages. “We are excited to add Commerce Velocity’s capabilities to our family of companies,” said Chairman William P. Foley II. “Commerce Velocity provides a strong complement to FNF’s National Lender Platform, ServiceLink. This acquisition will bring a comprehensive technology platform that can effectively support the lender’s process while incorporating the premier origination and default solutions for which FNF and ServiceLink are known.” For more information, visit or

executive vice president, marketing for Informative Research. “Lenders are looking for better, more robust valuation tools and through our partnership with LPS Informative Research can now deliver the highest quality AVMs available.” For more information, visit or

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36—The House and Senate reconciliation conference promulgated this exclusion and authorizes the Federal Trade Commission to prescribe new rules under Section 5 of the FTC Act to address unfair or deceptive practices by auto dealers. 37—The ten voting members of the Council are: the Treasury Secretary (who is also the chair of the Council), the FRB Chairperson, the Comptroller of the Currency, the Bureau’s Director, the SEC Chairperson, the FDIC Chairperson, the CFTC Chairperson, the FHFA Director, the NCUA Chairperson, and an independent member having insurance expertise (appointed by the President, confirmed by Senate). The five non-voting members of the Council are: the Office of Financial Research (OFR) Director, the Federal Insurance Office (FIO) Director, a state insurance commissioner, a state banking supervisor, and a state securities commissioner. The FIO is also a new entity, under the Treasury’s purview, created under the Act. 38—Procedurally, upon petition of a member agency of the Council, and only by a two-thirds vote of the Council, a Bureau regulation may be set aside. 39—Op.cit. 29. 40—Op.cit. 3: State Law Preemption Standards for National Banks and Subsidiaries Clarified, Title X, Subtitle D §1044 (b)(1)(B). 41—Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance Commissioner, et al., 517 U.S. 25 (1996). 42—Op.cit. 3: Periodic Review of Preemption Determinations, Title X, Subtitle D §1044 (d)(1-2). The Comptroller must publish a list of the OCC’s preemption determinations in effect. 43—Watters v. Wachovia Bank, N.A., 550 U.S. 1 (2007). 44—Hamlet Act 1, Scene 3, 75–77. 45—The Bureau and the FTC must negotiate an agreement for coordinating on enforcement actions and limits the ability of each agency to initiate a civil action for a violation of federal when the other agency has already filed suit based on the same matter. 46—Augustine, Norman R., Augustine’s Laws, 1986, 1997, American Institute of Aeronautics and Astronautics Inc., Reston, Va. 47—Op.cit. 3: Administration, § 1013. 48—Op.cit. 3: Consumer Advisory Board, § 1014. 49—Op.cit. 9.

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50—Op.cit. 3: Subtitle F-“Transfer of Functions and Personnel; Transitional Provisions,” Sections 1066 (a) and (b), inter alia. 51—Presidential appointments require the Senate’s Advice and Consent (U.S. Constitution, Article II, Section 2, and Clause 2). A simple majority (i.e., 51 percent) of those voting in the Senate is required for confirmation, once the nomination reaches the Senate for a vote. However, pursuant to agreed-to convention, presidential nominations requiring Senate confirmation must have 60 votes (i.e., “supermajority”) to break a filibuster, in order for those confirmations to be approved. Many high level nominations made by President Obama have faced a filibuster or a Senator has put them on “hold.” 52—USA Today, Obama announces 15 recess appointments, scolds GOP, 03/28/10. Recess appointments powers are granted to the President in the U. S. Constitution, Article II, Section 2, and Clause 3. 53—Warren’s advocacy for a consumer financial protection agency began publicly on March 10, 2009, when she joined Sens. Dick Durbin (D-IL) and Chuck Schumer (D-NY), and Reps. Bill Delahunt (D-MA) and Brad Miller (D-NC) to announce a bill to create what was then being called the Financial Product Safety Commission. In time, its other appellation was Consumer Financial Protection Agency. The Dodd-Frank Act created the Bureau of Consumer Financial Protection. 54—The Conference Board announced on 09/28/10 that the Consumer Confidence Index (CCI) for September 2010 stands at 48.5 (1985=100), down from 53.2 in August. 55—President Barack Obama’s speech in the Rose Garden, Sept. 17, 2010. 56—Idem. 57—Warren, Elizabeth and Amelia Warren Tyagi, The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke, Basic Books/Perseus, NY, 2003. Elizabeth Warren’s daughter is Amelia Warren Tyagi. 58—Warren, Elizabeth and Amelia Warren Tyagi, All Your Worth: The Ultimate Lifetime Money Plan, Free Press, NY, 2005. 59—Warren, Elizabeth, Fighting to Protect Consumers, The White House Blog, Sept. 17, 2010. 60—As but one objection to the Bureau: “The vast majority of those who held the billions of dollars in mortgages now foreclosed on knew exactly what they were doing. And one of the dirty little secrets of the financial crisis is that one homeowner after another signed mortgage-loan documents that were filled with inaccurate information about his or her net worth, assets, salaries and ability to make monthly mortgage payments.” Cohan, William D., “The Elizabeth Warren Fallacy, Opinionator, The New York Times, 09/30/10.

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try. The attorneys selected as a result of this process will be among the first members of the Strategic Partnership Group. “We realized that by reducing the number of attorney partnerships to those who can provide the lowest cost and highest service level and can meet the demands of the regions they are supporting, we will create a more efficient process, which will help borrowers and investors save money,” said Clay Cornett, president of LPS Default Servicing Solutions. “Last year, legal vendors billed nearly $2 billion in default fees. Even a 10 percent reduction would be significant. Such reductions would make it less costly for defaulted borrowers to reinstate or pay off loans in default.” For more information, visit

Mortgage Professionals to Watch  Citizen Financial Group has named Cheryl Nolda president of the company’s home lending solutions division.

Cheryl Nolda

continued from page 39

 Robert Beni Jr. has joined Meridian Capital Group LLC as vice president of the company’s commercial originations group.


 Robert Beni Jr.

 Community Trust Bank has announced the addition of Ian M. Wright as senior vice president, director of warehouse lending to launch the bank’s mortgage warehouse lending program.  Georgeann Beville has joined Ellie Mae as director of customer care.  John Walsh has been appointed acting Comptroller of the Currency for the Office of the Comptroller of the Currency (OCC).  Tricia Bailey has joined Paramount Residential Mortgage Group (PRMG) as the company’s new corporate operations manager.  TMS Funding, the wholesale residential platform of Total Mortgage Services LLC, has announced the addition of Robin Buttner and


Stephen Jaser as wholesale account executives. Southwest Securities FSB, the commercial banking subsidiary of SWS Group Inc., has named Peter Brown senior vice president, director of special assets. Subha V. Barry has been named chief diversity officer for Freddie Mac. First American Financial Corporation has announced the appointments of Max O. Valdes as chief financial officer and Mark E. Seaton as senior vice president of finance. PHH Mortgage Corporation has named William J. Steinmetz senior vice president, fulfillment operations. Provident Bank Mortgage has announced the appointment of Steve Atwood to the position of retail production manager. Prommis Solutions has named Phil Johnsen senior vice president of sales and marketing. Rick Borges II, MAI, SRA has been elected vice president of the Appraisal Institute. Scott H. Kramer has been named director of commercial default servicing for Clayton Holdings LLC. New Vista Asset Management has named Ivan Choi as the company’s national default sales executive. Berkadia Commercial Mortgage LLC has announced the addition of Hugh F. Frater as the company’s new chief executive officer.

 RiskSpan Inc. has announced the hiring of Allen H. Jones as managing director of the company’s federal services consulting practice.  Kelli Himebaugh has been named to the newly created position of vice president of client development for Mortgage Builder.  Loan Value Group has named Louis J. Petriello chief financial officer and general counsel.  Joe McCloskey has joined Dimont & Associates.  American Capital Agency Management LLC has appointed Christopher Kuehl senior vice president of mortgage investments.

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

Heard on the Street/Mortgage Professionals to Watch column Phone #: (516) 409-5555 E-mail: Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue. 41

Originating and closing loans these days can be very challenging. Lengthy turn times, inexperienced underwriters, and high costs can contribute to fewer closed loans.

“Protect your loans with GSF” Contact the Client Relations Manager today at

1-877-494-4448 or



GSF Wholesale is the safe and secure place for all of your business. Our experienced staff is dedicated to ensuring your loans are protected. With seasoned underwriters, efficient quality control department and competitive pricing, GSF Wholesale is focused on you and your business every day to meet the challenges of the new lending environment. 

GSF Wholesale The Safe Place for your business!

We’ve got

money to lend. Apartment loans $250M to $2MM* Up to 75% loan-to-value Competitive rates, fees and terms Over 60 years combined experience in multi-family financing *Larger loans considered on a case-by-case basis.

Work with a financial partner committed to helping you and your clients close the deal. Vivian Madey • 630-242-7251 • Austin, San Antonio, Dallas/Fort Worth, Denver, Salt Lake City

Jonathan Willems • 630-242-7249 • Baltimore, Philadelphia, Kansas City, St. Louis, Raleigh/Durham

Jennyfer Colon • 630-242-7248 • Columbus, Louisville, Minneapolis/St. Paul, Oklahoma City/Tulsa

1-800-894-6900 Member FDIC




Helping you do more.

Credit Plus suite of products conforms to new Freddie Mac requirements

Credit Plus Inc. has announced that it is offering a suite of products to help lenders comply with the more stringent selling requirements that Freddie Mac announced in its Aug. 16 Bulletin 2010-19. “Making the mortgage process easier for lenders is our focus at Credit Plus. New requirements and rules are constantly being introduced, which is why we are so vigilant about developing tools that keep lenders compliant. Our suite of products assists lenders with pre-closing and post-closing initiatives,” said Greg Holmes, national director of sales and marketing for Credit Plus. A key provision of the updates announced in Freddie Mac’s Bulletin 201019, which apply to mortgages with settlement dates on or after Dec. 1, 2010, revises requirements for inquiries on a borrower’s credit report. Lenders now will be required to look into the borrower’s credit report inquiries made in the previous 120 days, rather than the 90 days previously required. If the borrower was granted additional credit, the lender will be required to obtain verification of the debt, and include the debt in qualifying the borrower. This revised requirement will apply to all loans, not only manually underwritten loans. Credit Plus is offering a number of tools to assist lenders with quality control. These services may be purchased alone or bundled together:  Mortgage professionals can easily compare a credit report pulled at closing to the report pulled at origination with a COMPARE report. Delivered in 10 sec., it includes a quick reference summary section, general information comparison, credit score comparison, credit score factor comparison, trade line comparison, public record comparison, inquiries comparison and information sources comparison.  New account information is easily pinpointed with a manual inquiry verification process.  Soft code inquiries are a valuable resource to quickly check if additional inquiries have been conducted without adversely affecting their credit scores. This could potentially show signs of new debt. For more information, visit

OpenClose releases GFE accuracy product

OpenClose Mortgage Software, developers of Web-based, loan origination software (LOS), has released the enhanced editing version that improves the accuracy of information flow in the new Good Faith Estimate (GFE). The GFE lockdown “significantly improves” accuracy of loan documents allowing for those lenders to gain better control of 2010. Regulatory change called for a redesigned GFE this year to—in part— provide borrowers with more detailed closing cost information in order to make better informed decisions. But mistakes, or erroneously changed fees, can create inaccurate applications and non compliant loans. For example, a loan officer might try to waive a charge that the lender stipulates as mandatory. OpenClose created the GFE lockdown to provide lenders with even greater control by adding the ability to lock down fields in the fee maintenance and closing cost scenarios modules. By checking the “Lock on GFE” checkbox, a loan administrator can freeze the dollar value for that fee and then it cannot be changed on the Good Faith Estimate by any originator or processor. “The redesigned GFE 2010 provides many more details for prospective homebuyers,” said Jason Regalbuto, president of OpenClose, “but with those details comes more chance for error. Our new GFE lockdown feature provides an extra level of control and therefore, peace of mind.” For more information, visit

CoreLogic announces solution to defend against short sale fraud CoreLogic has introduced the Short Sale Monitoring Solution, which the company describes as the industry’s first short sale fraud prevention and pricing solution. The new service allows lenders to receive alerts on “risky” pending and closed short sales to minimize unnecessary losses related to fraud and property underpricing, which CoreLogic estimates at $41,500 per transaction. Short Sale Monitoring Solution provides real-time access to lenders’ con-

current transactions on short sale properties through the CoreLogic Mortgage Fraud Consortium, a repository of application and transaction data that represents 65 percent of annual loan applications. To prevent short sale fraud pre-closing, the CoreLogic solution matches details against other pending loan applications in the consortium database and public records for the same property. When a matching record is found, an alert goes instantly to the lender, recommending a decision to delay pending further investigation. For short sales that have already closed, the Short Sale Monitoring Solution continues to watch the property for a period specified by the lender, CoreLogic explains. Any subsequent loan closed on the property generates an alert to the original short sale lender and the resale lender, if different. Additionally, the new short sale solution watches for and evaluates short sale re-sales for 90 days, enabling lenders to refine pricing methods on an ongoing basis. Another option available is a retrospective short sale analysis that allows lenders to detect fraud, assess pricing-method accuracy and pinpoint problematic geographies. For more information, visit

Enhancements announced to Ellie Mae’s Encompass360 product

PropertyMinder launches Comparable Market Analysis tool for agents

…When you could speak directly with easy-to-reach underwriters who issued fast approvals with common sense underwriting? Well so do we. Go Back in Time. At Terrace Mortgage Company, we believe in providing friendly, fast service with a personal touch, and we’ve done just that for 22 years. We pride ourselves on our easy-to-reach, seasoned underwriters who use common sense and offer unparalleled support by phone or email every step of the way. And we understand you need to close quickly. So we send a link with the closing package directly to the closing company right after you get a clear-to-close.

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:

Terrace Mortgage Company Celebrating 22 years of wholesale lending Sandy Garcia, National Sales Director (866) 934-4631, ext 301



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



PropertyMinder has announced the launch of the first generation of its Comparable Market Analysis (CMA) tool for listing agents. A CMA provides insight for a home seller to determine an appropriate list price for their home. The PropertyMinder CMA searches the MLS to pickup comparables, creates charts and is entirely Web-based within the AccelerAgent Web sites. According to the company, there are many options within the CMA section of the Web site. Agents can create unlimited CMAs, send, print and have their visitor access it via a secure log-in area. Visitors on the Web site can even submit a Home Evaluation Request (CMA) on the agent’s website. Agents can modify the CMA report pages including the Cover Sheet, Table of Contents, About Me, Marketing Plan, Closing Comments and more. As mentioned earlier, the CMA is completely Web-based which means no downloading of software and the agent can just login to the admin toolkit. For more information, visit


Ellie Mae, the enterprise mortgage origination technology provider for mortgage bankers, mortgage brokers, community banks, credit unions and other mortgage lenders, has released enhancements to its Encompass360 Mortgage Management Solution. More than a dozen added or upgraded features comprise this release—many of which were based on suggestions from existing Encompass360 users. The enhancements are components of three primary areas: Regulatory compliance, electronic document management and disclosure, and authorized multi-party access. Each enhancement was designed to address the requests of existing Encompass360 customers. “We are continually investing in our technology, and meeting our customer requests is a big part of that,” said Jonathan Corr, chief strategy officer for Ellie Mae. “In this update, we made some significant improvements around electronic document and disclosure management, multi-party access, and regulatory compliance. Compliance is rightfully a big focus among originators right now.” Some of the key new enhancements include:  More configurable RESPA/TIL alerts that allow users to customize alerts based on company policies.  More refined disclosure workflow that filters disclosures based on entity type and disclosure timing

according to channel-specific configuration.  The ability for the interviewer to esign mortgage applications prior to sending to borrowers for e-signing.  Intelligent document recognition that not only recognizes, but also categorizes and files all commonly used forms and documents, and can easily “learn” virtually any new document.  Productivity functions that allow users to print any document from any software program directly to the loan file’s specific e-folder.  Coordination and monitoring of multi-party access that not only reveals any individual that opens a file, but also logs the specific actions taken on each file by each individual.  Deeper reporting capabilities that offer expanded audit trails and added fields to allow for more detailed and customized categorization. For more information, visit

Appraisal Management Company

Coester Appraisal Group 7650 Standish Place, Suite 107 • Rockville, MD 20855 (888) 485-1999 Ext. 2 We are a premier National Appraisal Company since 1970. We have a complete product line for your entire organization. We guarantee HVCC and FHA regulatory compliance. Let our experience work for you. The way valuations should be.

Branch Manager

iServe Residential Lending 415-298-2500 iServe offers a complete product mix - aggressively priced, with hassle-free service & turntimes. Branching & Loan Officer opportunities available nationwide. For a change, focus on production, quick closes & a good night's sleep!

Compliance Consultants

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

United Northern Mortgage Bankers......888-600-8808

Branch Manager

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

Brokers United ........................................877-710-0948 Consulting & Branch opportunities. Exclusive opportunities with a top Federally Chartered Bank, Mortgage Banker and/or Mortgage Banker/Broker Platform. Email Jeff Flees at

Branch Recruitment

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


Freedom Mortgage Corporation 800.220.9498 Freedom Mortgage Corporation, The BEST Branch Solution, Period.

Contact Management/CRM WorkCenter CRM ....................................877.498.6888

Church Financing

A CRM & contact management solution designed for mortgage professionals. Automated campaigns & LOS synchronization make WorkCenter an intuitive timesaver for staying in touch with clients.



Continuing Education

GSF Mortgage 15430 W Capitol Dr. Brookfield, WI 53005 1-877-494-4448 Be in business for yourself, but not by yourself. Join GSF Mortgage's Professional Branch Network. Enjoy freedom and stability and reap the rewards. Signing bonus for Branch Managers, retain 100% of your commissions. Absolutely NO files fees, NO splits

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

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

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

Cruise4Two-Loan Incentives 1-866-541-8077 Increase your Loans,Get the Edge & Generate More Referrals! Offer your clients a 5 Day 4 Night Cruise certificate for Two to Mexico, the Bahamas or the Western Caribbean (up to a $1798.00 value) only when they close a loan with you. Only $159.00 per certificate!!

Inlanta Mortgage W229 N1433 Westwood Drive, Suite 103 Waukesha, WI 53186 • 262-513-9853 Established in 1993 and headquartered in Waukesha, Wisconsin, Inlanta Mortgage is a multi-state mortgage banking company committed to delivering superior service to our branch clients. For more information, call 262-513-9853 or visit

Bookmark this! Access these listings online at

MSS Learning Center (800) 963-1900 Email: Time is running out...are you ready? Pass the S.A.F.E. Act Test, meet your 20 hours of Pre-licensure, and complete the 8 hours of Continuing Education you need • The Ultimate Test Prep Kit and Test Prep Boot Camps – Cover everything to pass the S.A.F.E. Act Test — on your first try. • 20-hour Pre-licensure - Packed with everything to successfully complete your pre-licensure requirements. • Continuing Education - Exciting, NMLS approved courses that meet your Continuing Education needs and build your business.

Direct Mail

Errors and Omissions Insurance


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

Your Complete Mortgage Marketing Solution. Call Us Today! (800) 922-9860 Specializing in Official Snap Packs for Greater Open Rates Envelope Mailers, Business Reply, Postcards and Much More Targeted Mortgage Lists with Many Selects Complete Design, Printing and Mailing Services

Sign up with the Premier Jumbo Lender 877.464.0555, option 2


Doc Management NYC Real Estate Expo LLC Anthony Kazazis - Director •

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

Move your Jumbos to a better neighborhood. ING Mortgage is your home for Portfolio loans up to $3,000,000. We offer aggressive pricing and simple guidelines in all 50 states. Big Loans. Low Rates. Great Value.

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

DocVelocity (877) 362-8356 DocVelocity is an end-to-end paperless solution designed to simplify the loan origination experience. Imagine having all your documents in the loan process as electronic files, all online, from preapproval to closing. DocVelocity provides: Fast and easy loan delivery to any lender … Automatic doc sorting, naming and filing … Real-time online document sharing for anyone you choose … Friendly and intuitive user interface … No start-up fees, and free training and support. DocVelocity addresses important compliance issues while giving your office the competitive advantage of being paperless. It streamlines all aspects of the mortgage process and most important, it does so in one easy-to-use and inexpensive package. Its newest version, DocVelocity 2.5, adds over 50 new features and enhancements to make the best paperless office even better. DocVelocity is the flagship product of Paperless Office Solutions, Inc., a wholly owned subsidiary of Flagstar Bancorp. Visit to find out more.

Hard Money/Private Lending

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

Windvest Corporation ............................877-285-0777

Advanced Data (800) 537 - 0458

Platinum Credit Services, Inc.................631-299-2084 Tax return vertification (4506 tax transcript done in less than 24 hours in most cases). Call Lorenzo Pugliano, President and CEO at 631-299-2084.

Does Advertising in the Resource Registry Work? It just did! Call 888-409-9770 ext. 4 to Register your company.


"North Lake College - Specialized Education In Mortgage Banking. Earn An Associates Degree in Mortgage Banking From the First Fully Accredited Mortgage Banking Degree Program in the U.S. For Information About Our 30 Year Program • 877-390-4750 is the largest online directory for mortgage professionals and a favorite of consumers shopping for mortgage loans. Our network attract over one million visitors per month. Our paid lead program as well as our free lender directory will help you connect with targeted new consumer traffic from with high-intent consumers searching online for the right mortgage lender.

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

North Lake College 5001 North MacArthur Blvd, Room T-231-C Irving, TX 75038 (972) 273-3467 •




Income Verification Services 

ProClose provides compliant closing documents and software for Residential Mortgage Lending. Created with closers in mind, we help make a lender’s staff more efficient and supported.

• Reach self directed, highly qualified consumers that are actively searching for mortgage loans • Geo-targeting – reach the right consumers in the right markets • Our proprietary Advertiser Portal gives you complete control over your campaigns, budgets, and performance reports. • YOU determine your daily/weekly/monthly budget • Pay only for consumers who click on your listing • NO cancellation fees Try us risk-free! Call 561-630-1257 or visit for more details.

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

Mortgage Banking Systems - ProClose 1360 Beverly Rd. Ste 200, McLean, VA 22101 800-783-2283 ·


Reach affluent and creditworthy consumers who are in-market and ready to transact. Bankrate is a consumer direct Web site, NOT a lead aggregator. Qualified leads for every sized budget, and pay only for performance. No set up fees! No contracts! No risk!

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

Document Preparation

Internet’s Leading Consumer Mortgage Marketplace Attracting over 7 million unique consumers every month • 561-630-1257

Loan Incentives

Retail Branch


(800) LOANS-15

Flagstar Wholesale Lending (866) 945-9872

Cruise4Two-Loan Incentives 1-866-541-8077 Increase your Loans,Get the Edge & Generate More Referrals! Offer your clients a 5 Day 4 Night Cruise certificate for Two to Mexico, the Bahamas or the Western Caribbean (up to a $1798.00 value) only when they close a loan with you. Only $159.00 per certificate!!

Loan Management Systems Xetus ....................................................877-GO-XETUS XetusOne is a powerful, easy-to-use loan management system that streamlines loan processing. Our affordable SaaS applications are lenders #1 choice for origination, subordination & modification.

Loan Origination Systems 46

Are you a broker/owner or current branch manager looking to expand your business into Mortgage Banking with FHA capabilities? Then our PARTNER BRANCH ADVANTAGE© program is perfect for you. We are offering you all the benefits of partnering with an established lender while still enjoying your independence. Mortgage Concepts is a nationwide FHA Direct Lender with a 16 year long reputation of excellence. YOUR SUCCESS IS OUR SUCCESS! For more information contact THOMAS R. SIRICO, Vic President of Business Development at (917) 923-1472 or email at We look forward to sharing our services with you!

Secondary Marketing Consulting Broker to Banker ..........(951) 746-3075 We complete your applications for approval Save the time and hassle contact:

Calyx Software 800-362-2599



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

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

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

Title Intracoastal Abstract Co. Inc.................516-358-0505 Privately owned & operated full service title insurance agency in NY, NJ and FL, with affiliates throughout the US & Canada. Escrow Agent in Florida.

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

Mortgage Builder Software 24370 Northwestern Highway, Suite 200 Southfield, MI 48075 800-460-5040 • End-to-end LOS system for multi-channel lending. PreQual thru Interim Servicing. Includes all back-office functionality; Underwriting,Secondary Marketing,Post Closing and much more SaaS, ASP and Client Server delivery options.


Comergence Compliance Monitoring, LLC 630 The City Drive South, Suite 205 • Orange, CA 92868 Office: 714-740-9000 Comergence Compliance Monitoring is the mortgage industry’s only Complete broker desk management software and outsource solution for TPO management and monitoring. We can supplement lenders inhouse management and monitoring resources departments.

Lykken on Lending is a weekly 60-minute show hosted by mortgage veteran of 37 yrs, David Lykken, along with special guest Alice Alvey & Joe Farr as well as featured special guests. Each week we provide our listeners with up-to-the-minute information of what is happening in mortgage and housing industry.

Sign-on weekly at

Exhibitors and Sponsors


2010 NAMB/WEST Conference December 4-6, 2010 at the MGM Grand Las Vegas!


For more details on Exhibiting and Sponsorship, please contact Kinsley at 303-798-3664 or


Exhibitors will receive a complimentary ad in the December issue of the National Mortgage Professional 

Visit for updates.



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 OCTOBER 2010

Friday, October 22



Evolution: The Oregon Association of Mortgage Professionals Mortgage Industry Convention & Trade Show 1849 SW Salmon Street Portland, Ore. For more information, call (503) 6708586 or visit

Sunday-Wednesday, October 24-27 Mortgage Bankers Association 97th Annual Convention & Expo Atlanta Georgia Congress Center 285 Andrew Young International Boulevard NW Atlanta For more information, call (800) 793-6222 or visit NOVEMBER 2010

Thursday, November 4



Utah Association of Mortgage Brokers 2010 Annual Expo Noahâ&#x20AC;&#x2122;s â&#x20AC;˘ 322 West 11000 South South Jordan, Utah For more information, call (801) 787-6611 or visit




Abacus Mortgage Training and Education .......... ....................................13 & 35 ACC Mortgage .................................................. ....................................37 American Toner & Ink.......................................... ....MI1 & 5 BankFinancial.................................................. ......................................42 Calyx Software ................................................ ......................................42 CB Malaga Insurance Services LLC ...................... ..........................................31 Comergence Compliance Monitoring, LLC .......... ..........11 & 25 Envision Direct ................................................ ......20 Flagstar Wholesale Lending .............................. ....................Back Cover Freedom Mortgage .......................................... ......................Inside Back Cover Frost Mortgage Lending Group .......................... ................................6 GSF Mortgage Corporation ................................ ................Inside Front Cover GSF Funding .................................................... ................................................41 Guaranteed Home Mortgage.............................. ....................................39 iServe Residential Lending, LLC ........................ ..................................40 ..................................36 Mortgage Concepts .......................................... ..................................9 Mortgage Investors Corporation ........................ ..................................10 NAMB/WEST .................................................... ......................MI2, MI8, 38 & 47 NAPMW .......................................................... ..................................................17 PB Financial Group Corp. .................................. ..............................................34 ProClose.......................................................... ..............................................34 Protelus Corporation ........................................ ................................................4 Quality Mortgage Services ................................ ..................................15 & 28 REMN (Real Estate Mortgage Network)................ ......................................7 Ridgewood Savings Bank .................................. ......................................8 Terrace Mortgage Company .............................. ..................................43 United Northern Mortgage Bankers Ltd. ............ ............................ 12 & 34 Windvest Corporation ...................................... ........................................21 Xetus Mortgage Corporation.............................. ..................................................48

Monday-Wednesday, November 8-10 Mortgage Bankers of Pennsylvania Conference Wyndham-Conference Center 95 Presidential Circle Gettysburg, Pa. For more information, call (973) 3797447 or visit

Tuesday, November 9 Tennessee Association of Mortgage Professionals 2010 Mortgage Industry Showcase The Best Western Cedar Bluff Inn 420 North Peters Road Knoxville, Tenn. For more information, call (615) 3020001 or visit

Tuesday, November 16 Missouri Association of Mortgage Professionals 17th Annual Convention St. Charles Convention Center 1 Convention Center Plaza St. Charles, Mo. For more information, call (314) 9099747 or visit

Wednesday-Friday, November 17-19 Mortgage Bankers Association Accounting, Tax & Finance Management Conference 2010 The Roosevelt New Orleans 123 Barrone Street New Orleans, La. For more information, call (800) 793-6222 or visit DECEMBER 2010

Saturday-Monday, December 4-6 NAMB/WEST 2010 MGM Grand Las Vegas 3799 Las Vegas Boulevard South Las Vegas For more information, call (703) 3425900 or visit FEBRUARY 2011

Sunday-Wednesday, February 6-9 Mortgage Bankers Associationâ&#x20AC;&#x2122;s Commercial Real Estate Finance/Multifamily Housing Convention & Expo 2011 Manchester Grand Hyatt San Diego One Market Place San Diego, Calif. For more information, call (800) 793-6222 or visit

Tuesday-Friday, February 22-25 Mortgage Bankers Association National Mortgage Servicing Conference & Expo Gaylord Texan Hotel & Convention Center 1501 Gaylord Trail Grapevine, Texas For more information, call (800) 793-6222 or visit APRIL 2011

Sunday-Wednesday, April 3-6 2011 National Association of Mortgage Brokers 2011 Legislative & Regulatory Conference Hyatt Regency Washington on Capitol Hill 400 New Jersey Avenue NW Washington, D.C. For more information, call (703) 342-5900 or visit


N a ti o n a lM o rt g a g e P ro fe s s io n a l. c o m O M IC H IG A N M O R T G A G E P R O F E S S IO N A L M A G A Z IN E O O CTOBER 2...


N a ti o n a lM o rt g a g e P ro fe s s io n a l. c o m O M IC H IG A N M O R T G A G E P R O F E S S IO N A L M A G A Z IN E O O CTOBER 2...