Page 1

O JUNE 2011








They say there’s no bad weather, just the wrong attire. Spreads are down, LO comp is a mess and buyback percentages continue to rise. Combined with the new Fannie Mae Appraisal Independence Regulations and Dodd-Frank appraisal guidelines, the mortgage storm continues to swell. To ensure that you’re protected, you need the right appraisal solution in place right now. Whether you prefer to self-manage or use an AMC, don’t settle for anything but the best. StreetLinks’ LenderPlus™ and LenderX™ appraisal management solutions are the best at ensuring compliance and appraiser independence without compromising speed or quality.

Call 1.800.778.4947 to find your StreetLinks solution today. | 1.800.778.4947



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


Missouri Association of Mortgage Professionals 4700 South Lindbergh Boulevard O St. Louis, MO 63126 Phone #: (314) 909-9747 O E-mail:

2010-2011 Board of Directors Dennis Tate Shawn von Talge Mark Osborne Andrew Conner Greg Aftayev Gary Lange Lisa C. Kelam

President President-Elect Vice President Secretary Treasurer Immediate Past President Executive Director

Phone # (314) 872-2178 (573) 442-3850 (314) 973-9836 (573) 302-0600 (314) 983-0200 (573) 334-9627 (314) 909-9747


Wendy Cromer Mark Delhougne DeWayne Duhon Gwen Flack Erik Janeczko Dan McLaughlin Jamie Pandolfo Bob Peery

Board Member-at-Large Board Member-at-Large Board Member-at-Large Board Member-at-Large Board Member-at-Large Board Member-at-Large Board Member-at-Large Board Member-at-Large

(314) 729-0059 (314) 301-2261 (816) 220-5660 (314) 378-2313 (573) 353-6766 (314) 575-3031 (314) 495-3104 (573) 876-7719

JULY 2011 Friday, July 15 MAMP Education: Excellence Through Education (NMLS Course Approval ID 1962) St. Louis Association of Realtors 12777 Olive Boulevard St. Louis 8:00 a.m.-5:00 p.m. $99 for MAMP Members/$149 for Non-Members Class includes manual and NMLS reporting fees NOVEMBER 2011 Wednesday, November 2 2011 MAMP Trade Show & Convention St. Charles Convention Center One Convention Center Plaza St. Charles, Mo.

For information on all MAMP events, call (314) 909-9747, e-mail or visit MO 1

MAMP 2011 SPONSORS (search National Mortgage Professional Magazine)

Corporate membership

O JUNE 2011

Access Capital Funding Community Lending Services Doering Mortgage Flat Branch Home Loans Homestead Financial Plaza Mortgage Group Quest Mortgage Consultants


Fifth Third Bank Franklin American Mortgage Company Michigan Mutual Security National Mortgage Company Sierra Pacific Mortgage O

Gold sponsors

JUNE 2011 O


MO 2

MO 3 O


O JUNE 2011

Branch Manager Business Analyst Business Development Manager Commercial Loan Officer Corporate Sales Credit Analyst Inside Sales Legal Assistant

Advisor Asset Protection Management Bank President

Client Relationship Manager Client Relationship Specialist Collateral Asset Manager

Licensing Assistant

Mortgage Loan Processor Mortgage Originator National Account Manager National Sales Rep PC Support Admin Post Closing QC Expert Processor Regional Vice President REO Closer Retail Branch Manager Retirement Planner Reverse Mortgage Specialist Sales Manager

Loan Administration Manager

Secondary Marketing Analyst

JUNE 2011 O



MO 4

• • • •

Loan Originator

Senior Loan Officer

Senior Underwriter

Senior Vice President Software Engineer

Job Seekers Post your anonymous resume free Sign-up for free job alerts Free career management tools Geographical and job type searches Use coupon code NMP0551 to take advantage of this special offer!


Vice President

Wholesale Account Executive

Employers • Responses from highly-qualified candidates • Your ad can also be posted on Indeed and SimplyHired as a Featured Job, on Craigslist (most cities), Googlebase, Oodle, Juju, CareerMetaSearch, TopUSAJobs, Jobalot, and more! • Pay-per-use resume bank

Post your resume. Find a job.

Be happy.

40% Discount on Job Postings and Subscriptions for all National Mortgage Professional Magazine Readers This offer expires 12/31/11.

National Mortgage Professional Magazine






June 2011




Volume 3, Number 6





Special Focus on “Branch Development” Things to Think About Before You Choose a Branch Program By Douglas Rotella


The End of the Mortgage Branch and the Rise of the Mortgage Office By Rick Roque 33 The Timing Couldn’t be Better: Consider Franchising or Net Branching By Gregg Harris


Retail Origination of the Future: Determining Your Best Platform By Daniel H. Jacobs


Evaluating Your Ship: Questions to Think About When Considering Joining a Larger Company By Dan Rawitch & Tim Ray

Shooting the Wounded … What’s Happened to Our Industry? By Nicholas J. DelTorto

Building Out Your Branch Network

37 38

By Stewart Hunter & Jim McMahan


2011 Who’s Hiring Report


Features The Do’s and Don’ts of Complying With the Fed’s LO Comp Rule By Jonathan Pinard More Mortgage Servicing Woes: Is SPOC Doable?


By Doug Thorpe


The NAMB Perspective


Lykken on Leadership: Who Are You Following? By David Lykken

Generating New Business Is Easier Than You Think


NMP Mortgage Professional of the Month: Lynn Tucker, Vice President of Branch Operations, Freedom Mortgage Corporation 18 The Elite Performer: Motivation Vs. Incentive By Andy W. Harris, CRMS

Value Nation: Preventing Appraisal Fraud By Charlie W. Elliott Jr., MAI, SRA, ASA

By Jonathan Foxx

21 22 26

The Secondary Market Overview: From Bonds to Production … Oil and Home Prices—The Real Story By Dave Hershman


FHA Insider: FHA Removes One Percent Origination Cap on the Ks By Jeff Mifsud 52

Columns NMP News Flash: June 2011 Heard on the Street New to Market NMP Mortgage Professional Resource Registry NMP Calendar of Events


 JUNE 2011

Mortgage Heroes

4 24 25 46 56 60


Ability-to-Repay: Regulating or Underwriting? (Part I)


By Mary Beth Doyle


Accurate Quality Control .................................. ..........................................50 AllRegs ............................................................ ........................14 Associated Mortgage Bankers, Inc. .................... ......................................19 Bay Equity LLC ................................................ ....................................................6 Benchmark Mortgage ...................................... ..............................5 & 39 Calyx Software ................................................ ..........31 Elliott and Company Appraisers, Inc................... ................................23 .................................... ..............................MO4 Flagstar Wholesale Lending .............................. ....................Back Cover Freedom Mortgage .......................................... ......................Inside Back Cover Frost Mortgage Lending Group .......................... ..............................49 GSF Mortgage Corporation ................................ ........................................17 Guaranteed Home Mortgage.............................. ....................................55 HVCC Appraisal Ordering .................................. ..........................23 Icon Residential Lenders, LLC ............................ ..............................13 & 20 Land Home Financial Services .......................... ......................................7 LenderCity, Inc. ............................................................................................................................34 Loyalty Express ................................................ ..............................12 & 27 Majestic Security LLC ........................................ ............44 Menlo Park Funding ........................................ ..................................6 ..................................53 Mortgage Brokers Network Corp, Inc. ................ ......................29 Mortgage Dashboard ........................................ ................................45 NAPMW .......................................................... ..................................................21 PB Financial Group Corp. .................................. ..............................................31 Polaris Home Funding Corp. (Branches).............. ..................11 Polaris Home Funding Corp. (Wholesale) ............ ............................................46 REMN (Real Estate Mortgage Network)................ ....................................15 StreetLinks Lender Solutions ............................ ....................Inside Front Cover TMS Funding.................................................... ..........................................48 United Northern Mortgage Bankers Ltd. ............ & 23 US Mortgage .................................................... ..................................47 & 60 USA Cares ........................................................ ................................................25 Windvest Corporation ...................................... ........................................51

June 2011 Volume 3 • Number 6



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 Domenica Trafficanda Art Director Karen Krizman Senior National Account Executive (516) 409-5555, ext. 326


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

Branch development Due to increased regulation, shrinking profits (the Mortgage Bankers Association shows only $1,082 profit on loans on their last profitability report, down from $1,423 per loan in the third quarter of 2010) and fear of the unknown, we have seen significant growth in mortgage bankers building their presence by enlisting mortgage brokers and smaller mortgage bankers to open up “net branch-like” branches. For many, it’s a dream come true. They get the power of a larger entity, while being able to focus on what they love … originating loans. Due to the lower barriers of entry that mortgage brokers previously faced, there were a lot of excellent loan originators who became mortgage brokers, when in fact, they really had no business running their own mortgage company. Our July 2011 Special Focus on Branch Development starts off with a piece from Real Estate Mortgage Network Inc. (REMN)’s Founder Douglas Rotella, where he shares “Things to Think About Before You Choose a Branch Program.” This is a must-read for mortgage brokers, as REMN is a top wholesaler that just launched their Menlo Park Funding division where they created a branch program designed around the mortgage broker. Doug’s article is followed by a great contribution from legendary mortgage banking consultant and mortgage tech vet, Rick Roque. Rick discusses the changing of business models we are seeing from profitable mortgage bankers with his article, “The End of the Mortgage Branch and the Rise of the Mortgage Office.” Rick’s piece is followed by a sponsored contribution from Gregg Harris of LenderCity. Gregg has an amazing program that is being looked at as a branch alternative. His piece, “The Timing Couldn’t be Better: Consider Franchising or Net Branching,” talks about franchising in the mortgage business. Imagine getting the power of a larger player, but keeping your company the way it is. Gregg’s article is followed by a contribution from Daniel H. Jacobs where he shares his many years of knowledge from building branch networks by offering some pointers on what to look for in branch models in, “Retail Origination of the Future: Determining Your Best Platform.” Following Jacobs is another piece designed to help you select from various companies offering branch programs. Dan Rawitch & Tim Ray from First Cal Mortgage share their tips in “Evaluating Your Ship: Questions to Think About When Considering Joining a Larger Company.” Next is a piece from Nicholas J. DelTorto from Inlanta Mortgage where he shows how all of the immense changes that have come to our industry have made a lot of mortgage professionals take a look at branch opportunities in his piece, “Shooting the Wounded … What’s Happened to Our Industry?” The section wraps with Stewart Hunter & Jim McMahan from Benchmark Mortgage with an installment of their Leaders on the Frontline series titled, “Building Out Your Branch Network.“ This piece talks about changes the industry has gone through and changes coming down the pike, and how branch companies are dealing with them.

June’s Mortgage Professional of the Month This month’s National Mortgage Professional Magazine’s Mortgage Professional of the Month is Lynn Tucker, vice president of branch operations for Freedom Mortgage. Lynn was the perfect fit for this month, being that Freedom Mortgage is one of the top branch companies and offers a great package to mortgage brokers looking to become branches of a mortgage bank. Lynn, like most, didn’t grow up saying, “I want to be a mortgage banker.” However she, like most of the top mortgage industry leaders, started a job somewhere in the mortgage business and learned virtually every facet of the mortgage business from originations to servicing. In this feature, she shares the secrets of her success and what you can incorporate into your own company.

Two new columns I want to introduce you to two new columns that will be in the pages of National Mortgage Professional Magazine. First is the Compliance Corner by Jonathan Pinard and Bonnie S. Nachamie Esq. from First National Compliance. Their first contribution, “The Do’s and Don’ts of Complying With the Fed’s LO Comp Rule” and you might be surprised about what you think you know about LO comp rules. The other new monthly column is by Andy W. Harris, CRMS called “The Elite Performer.” Andy’s first piece, “Motivation Vs. Incentive,” discusses the real motivation in successful mortgage professionals (hint … it’s not money).

Dealing with SPOC 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



No, it’s not that Vulcan made famous by Star Trek nor that doctor made famous for his views on childhood development, but Doug Thorpe shares with us his concerns about SPOC or the “Single Point of Contact.” Doug points out that these systems were designed to handle cash flow management and how it is troublesome to have these legacy systems make significant changes like SPOC … especially when you hear that the majority of servers are running software that was built in the 60s and 70s. Also in this edition, Jonathan Foxx thoroughly dissects the Federal Reserve Board’s ability-to-repay rule on page 26. Jonathan delivers yet another thorough analysis of a highly complex regulation and delivers his breakdown in laymen’s terms of yet another governmental regulation. This and much more awaits you inside the June 2011 issue of National Mortgage Professional Magazine. Until next month …



JUNE 2011 

ARTICLE SUBMISSIONS/PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck at (516) 409-5555, ext. 312 or e-mail 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

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




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

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

Sign-on weekly at

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—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

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

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

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

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:


2011 Board of Directors & Staff Tom Conwell President (800) 445-4922, ext. 1010 Donald J. Unger Vice President (303) 670-7993, ext. 222 Daphne Large Treasurer (901) 259-5105 Marty Flynn Ex-Officio (925) 831-3520, ext. 224 William Bower Director—Tenant Screening Chair (800) 288-4757 Mike Brown Director—Technology Chair (800) 285-6691

Janet Curtis Director—New Membership & Elections Co-Chair (212) 224-6121 Renee Erickson Director—Tenant Screening Co-Chair (800) 311-1585, ext. 2101 Nancy Fedich Director—Conference Chair (908) 813-8555, ext. 3010 Judy Ryan Director—New Membership & Elections Chair (800) 929-3400, ext. 201 Tom Swider Director—Legislative Co-Chair (856) 787-9005, ext. 1201 Terry Clemans Executive Director (630) 539-1525

 JUNE 2011

Susan Cataldo DirectorEducation & Compliance Chair Jan Gerber (404) 303-8656, ext. 204 Office Manager/Membership Services (630) 539-1525


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 

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

National Board of Directors

The Do’s and Don’ts of Complying With the Fed’s LO Comp Rule By Jonathan Pinard and Bonnie Nachamie We are 60 days into the effective date of the Federal Reserve Board’s rule on loan originator (LO) compensation … why are there still so many misunderstandings on how an LO can be compensated? Limited guidance and no testing Unlike other rules issued by the U.S. Department of Housing & Urban Development (HUD), state banking departments and other federal agencies, the Fed’s rule is one-page long, does not include model compensation plans, and the guidance that was issued by the Fed was, by and large, in direct response to questions that were designed to find a way around the rule. More importantly, the rule is unprecedented. The government has, for the first time, severely limited the ways in which an employer may pay an employee. Don’t compensate based on loan program Despite industry guidance to the contrary, many people think that LOs can be compensated more on Federal Housing Administration (FHA) loans than they can be on conventional financing. The argument that those loans may take longer to process or are harder to originate will ultimately fall on deaf ears especially if the borrower ends up paying more.


Don’t pay your LOs commissions on brokered loans that were “BorrowerPaid Loans” The guidance that was offered by the Fed specifically stated that LOs could only be paid hourly or by salary in a borrower-paid transaction. Don’t pay less on some deals because of yield spread premium (YSP) limitations Limitations on YSPs for specialty products that are brokered to banks have made some think that they can reduce an LOs’ compensation for those programs. This violates the provision that an LOs’ compensation is not to vary based on loan product.

JUNE 2011 


Do be “mindful of your buckets” If you’ve chosen different compensation levels from your lenders, make sure you document the benefit for the borrower if you earned more than you would have from another lender. Figure out your expenses on an average loan Calculate how an individual LO has produced in the past and come up with a fixed basis point number that will fairly compensate your LO without it being tied to profitability or loan type. For higher producers or to encourage increased volume, use a tiered structure. Volume bonuses can even be done on a quarterly, semi-annual or annual basis to ensure that bonuses are only paid for consistent, rather than sporadic, increases in volume. Does the Fed’s rule require your compensation plan in writing The Rule provides for steep penalties for non-compliance. Put your individual LO compensation plan in writing. A compliant plan that is followed is the only defense for accusations of steering a borrower to a more expensive loan not in their best interest. Have a written pricing policy and make sure its fair lending-complaint Now that your LO compensation structure needs to be in writing, the obvious question from a regulator is how and why do you price loans the way you do and how might that impact your borrowers from a fair lending perspective? Update your fair lending plan In those cases where some LOs have higher commission structures that will result in higher pricing to their borrowers, a well-defined fair lending plan with a testing component to ensure that a fair lending violation related to disparate treatment or disparate impact is avoided. Jonathan Pinard is president of First National Compliance Solutions Inc. in Merrick, N.Y. he may be reached by phone at (800) 400-4134, e-mail or visit Bonnie Nachamie is the Chief Executive Officer of First National Compliance Solutions.

CFPB Draws Up Two Alternatives to the TIL and GFE Roadmap to Consumer Simplicity The Consumer Financial Protection Bureau (CFPB) has announced the “Know Before You Owe” project, an effort to combine two federally required mortgage disclosures, the Truth-in-Lending Act (TILA) disclosure and the Real Estate Settlement Procedures Act (RESPA) Good Faith Estimate (GFE), into a single simpler form that makes the costs and risks of the loan clear and allows consumers to comparison shop for the best offer. On May 19, the CFPB began testing two alternate prototype forms designed to be given to consumers who have just applied for a mortgage loan. This testing—which will take place over the next several months and involve oneon-one interviews with consumers, lenders, and brokers—will precede and inform the CFPB’s formal rulemaking process. The CFPB also has posted the prototypes on its Web site with an interactive tool to gather public input about the designs. “I think the forms are a good start to simplifying the shopping process,” said Mike Anderson, CRMS, Government Affairs Committee chair of the National Association of Mortgage Brokers (NAMB). “I applaud the CFPB for asking for feedback from industry and keeping us involved in the process.” The current TILA mortgage disclosure form is two pages long and the current GFE is three pages long, and while they are intended to convey the basic facts about home loans to help consumers comparison shop, these forms have overlapping information and complicated terms that can be difficult to understand to a consumer. The CFPB expects to conduct five rounds of evaluation and revision through September 2011 to select a single draft disclosure and then refine it. Initial rounds of testing will include both English- and Spanish-language versions. Interviews will be conducted in six cities: Albuquerque, N.M.; Baltimore; Birmingham, Ala.; Chicago; Los Angeles; and Springfield, Mass. In addition to this qualitative testing, the Bureau is soliciting online feedback

from consumers and reaching out to consumer and industry groups to gather input, particularly regarding implementation and usability. “Buying a home is one of the biggest financial decisions most Americans will ever make,” said Elizabeth Warren, Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau (CFPB). “The ‘Know Before You Owe’ project is about giving consumers upfront, easy-to-understand information that helps them compare different mortgage offers and find the one that’s best for them. The current forms can be complicated and difficult for consumers to use. They are also redundant and can be costly for lenders to fill out. With a clear, simple form, consumers will be in a better position to answer two basic questions: Can I afford this mortgage and can I get a better deal somewhere else?” The testing and public feedback process will enable the CFPB to revise the design and refine the content based on how it works for consumers. The CFPB has taken a fresh approach to the form, considering what the laws mandate, what information consumers really need for comprehension and comparison, and how to make the form stand out from other loan documents. “I think these sample disclosures do still need some work,” said Anderson. “They need to add the sales price/estimated value, signature line for the consumer and showing private mortgage insurance/mortgage insurance.” Over the summer, in addition to testing the draft forms, the CFPB will conduct additional analysis and research. The CFPB will also consider underlying regulatory issues and ways to refine closing-stage forms, a process that will likely extend into the fall and early next year. The Bureau is required by the Dodd-Frank Act to issue proposed forms and implementing regulations by July 2012 for formal notice and comment. The CFPB also expects to conduct quantitative tests prior to finalizing the form. “I really like that it is simple and easy to read and understand. Ironically, the form looks a lot like the old GFE, continued on page 6





Positive Attitude

news flash

continued from page 4

but with TIL references,” said Jonathan Pinard, president of First National Compliance Solutions Inc. and chairman of the Empire State Mortgage Bankers Association (ESMBA). “There are likely some improvements that could be made. Specifically different expiration dates for rates versus closing costs and more columns to address state-specific charges. I am hopeful that these improvements will be addressed during the comment period.”

Study Finds Reverse Mortgage Market Performing Well Despite Tough U.S. Economy


JUNE 2011 


Come in out of the dark ...and see what Menlo Park Funding has to offer. As a division of Real Estate Mortgage Network, MPF provides an affiliation with a respected national lender, while allowing you to express your entrepreneurial spirit.

Inquire: Ÿ Full use of established REMN operation centers and resources Ÿ Complete product line with banker and broker options Ÿ Administrative, Accounting, Compliance, Technology, Training,

and more resources available... Ÿ Dedicated Account Executive, Operations Team and Help Desk Ÿ Same-day underwriting turn times on new file submissions

The National Reverse Mortgage Lenders Association (NRMLA)/RiskSpan Reverse Mortgage Market Index (RMMI) estimates the value of home equity held by seniors aged 62 and older to be $3.3 trillion as of the end of 2010. The index has tracked reverse mortgage market opportunity since 2000 by analyzing and reporting on trends in senior home values and home equity levels. The impact of falling home prices on aggregate senior equity levels has been partially offset by the demographic growth of the senior population and its lower mortgage debt levels relative to the rest of the population. The level of senior home equity has fallen by 18 percent from peak levels, compared to a 31 percent decline for the total population of homeowners. “This data shows us that the home equity is still an important component of total wealth for seniors. As such, this equity will be increasingly important to help seniors fund longevity as they outlive the generations before them,” said Peter Bell, president of NRMLA. National home prices and mortgage debt levels indicate a stabilizing of the RMMI. After a slight uptick in the third quarter, housing prices fell again in the fourth quarter, according to Federal Housing Finance Authority (FHFA) index data. The RMMI fell to 157.7 in the fourth quarter of 2010 (the RMMI is indexed to Q1 2000), 0.3 percent lower than the preceding quarter’s level and 18 percent below the fourth quarter of 2006 peak. Based on RiskSpan’s analysis of FHFA and U.S. Census Bureau data, the aggregate value of senior housing fell by $15 billion to $4.3 trillion, while senior mortgage debt levels fell by $4 billion, resulting in an $11 billion reduction in the level of senior home equity.

Bipartisan Plan Introduced in House to End GSEs Successful Principals and Branch Managers only 877-896-8496

U.S. Reps. John Campbell (R-CA) and Gary Peters (D-MI) have introduced a bipartisan plan to

reform the mortgage market—HR 1859: The Housing Finance Reform Act of 2011—putting an end to taxpayer-funded bailouts, while preserving access to affordable mortgages for middle class families. The Campbell-Peters plan would overhaul the federal mortgage finance system and wind down the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, while establishing a new system of private associations—funded by private capital—to continue ensuring liquidity in the secondary mortgage market. While mortgage investments would still be backed by a government guarantee, the plan mandates strict standards, safeguards and capital requirements to protect taxpayers. “Housing is one of, if not, the most important consumer elements of the American economy,” said Rep. Campbell. “This bill is a practical solution that replaces the unlimited government guarantee of Fannie Mae and Freddie Mac with multiple private companies competing in the marketplace. There would be a catastrophic government guarantee of their securities, not of the companies themselves, moving us away from “too big to fail” institutions. The taxpayers would be protected by the judgment of a highly independent regulator and several layers of private capital.” While some on the right have proposed removing the government from the secondary mortgage market altogether, most housing experts and economists agree that this would drastically raise the cost of mortgages for average families—and could jeopardize the housing recovery. “As Congress moves forward on this issue, which is so vital to our housing recovery, I want to thank the sponsors for putting forward this thoughtful legislation,” said Michael D. Berman, CMB, chairman of the Mortgage Bankers Association (MBA). “MBA looks forward to working with the leadership of the House Financial Services Committee and Senate Banking Committee on comprehensive legislation that reforms our housing finance system in a way that encourages the return of private capital while also providing for a limited but explicit government role in backing the availability of affordable mortgage products through all market conditions.” HR 1859 would replace the existing system with privately-capitalized entities authorized to purchase an explicit and limited guarantee covering the securities they issue. The proposed system would be built on the concept of the Federal Deposit Insurance Corporation (FDIC), and would ensure that bedrock housing financial products like the 30-year fixed-rate mortcontinued on page 12

More Mortgage Servicing Woes: Is SPOC Doable? By Doug Thorpe

1. Technological considerations The dual tracking methodology typically has parallel systems supporting the respective duties and functions. Though some specialty servicers have automated the process in its entirety, closely integrating the data collection and borrower contact management, a large group of servicers still exist who operate these two environments fairly autonomously. Legacy systems simply were never designed to contemplate the simultaneous aspects of these processing worlds. Making the two mesh into a comprehensive dashboard-style reporting platform will require major development and deployment. 2. Staffing The age old challenge ‌ getting single point of contact team members trained and versed in all aspects of loan resolution will be a big requirement. Even by assuming that the proper technology can be implemented, getting staff trained and ready will be a costly and time-consuming effort. 3. Statutory requirements The legal standards by which loan resolution is pursued will be an ever-constant force. Some states have laws that are still requiring that foreclosure actions be tied closely with delinquency timing targets (e.g., first 60 days upon payment default). These laws cause servicers and the investors holding the cash streams to focus on compliance with the code to drive foreclosure actions. Historically, this runs counter to consumer advocacy concerns. As state attorneys general move to protect their citizens, many of these laws will likely change, but that takes time to effect.

So ‌ what’s the solution? Mortgage servicers might want to consider the creation of an ombudsman

team who will, in fact, serve as this SPOC center. While existing loss mitigation and foreclosure efforts run somewhat status quo in the near term, this newly formed group could serve to satisfy the single point of contact demands to which regulators are leaning. By giving this team access to any applicable systems supporting the servicing effort, the servicer can establish controls and tracking for any and all customer service inquiries. The members of this team could have the authority to suspend various actions occurring in the pipeline depending upon the status of borrower cooperation and satisfactions of new agreements. At a minimum, they would need to have direct interface with senior management to sound an alarm should there be a looming conflict of action within the servicing events. This solution could buy time for banks and servicers to make technology changes and work toward other staffing alignment/training needs. Further, as regulators finalize guidelines and rules for implementing SPOC solutions, this team could more nimbly respond to the interim directions passed down.

Conclusion Loan servicers at all levels should first look to their existing portfolio to determine the possible need for SPOClike responses. Then, plans should be developed to create this team of specialists who can properly interface the consumer with correct knowledge of the loan status and the changes that might be pending. By adding the super powers to these team members for halting steps in the sequence, a front line of defense can be established to achieve the right dialogue and correct response to avoid foreclosure nightmares. Much as the first two Spocks created and inspired major changes in thinking, this SPOC will likely do the same for the mortgage finance industry. Doug Thorpe is a senior consultant and mortgage SME for SolomonEdwardsGroup LLC. He may be reached by e-mail at or visit


Does this describe You? If so then we are the company for you: s 0OSSESS A BOOK OF BUSINESS






Equal Opportunity Employer

If you are a leader that thrives in a high paced working environment, then this is the job and company for you.

Contact AMX for more information: joinamx@lhďŹ

 JUNE 2011



Take T ake Advantage Advantage of of O Open pen Territories! Territories! Rare Opportunities Opportunities & Rewards Rewards Are Are Waiting Waiting Rare For Top Top Producing Producing Wholesale Wholesale AE’s! AE’s! For


Roughly 50 years ago, Dr. Spock hit the So, from a servicer’s perspective, not scene with teachings and practices that only were volumes growing on “the polarized the Western Culture’s views on wrong side of the shop,â€? but the scrutichild rearing. Then, there was Mr. ny under which these transactions Spock, the Star Trek character who were placed caused new pressure for made us think about making decisions servicers to perform. In addition, there without being driven by emotion. existed a common practice to “dual Today, there is a new SPOC attempting trackâ€? a mortgage in default. to radically change our thinking and Dual tracking means that once a norpractice for servicing mal collection effort has mortgage loans and dealfailed (60 days past due in ing with mortgage bormost cases), the loan is rowers who have run into placed in two simultanefinancial difficulty. ous and concurrent proThe recent news of cessing pipelines. First, the Congress’ intent on writing loan goes to loss mitigation laws to mandate the crewhere specialists attempt ation of Single Point of to work directly with the Contact (SPOC) processing borrower to propose and for mortgage service evaluate options for loan providers and banks has modifications, short sales, certainly raised attention in deeds in lieu, etc. Loss â€œâ€Ś from a servicer’s several sectors. Consumer mitigation gained notorigroups laud the idea as the ety as federal regulators perspective, not only perfect solution. Industry were volumes growing and agencies sought to segments worry about the assist the home-owning on ‘the wrong side of ultimate impact. Vendors of public. Mandates for program the shop,’ but the all types are already scramassistance like the Home scrutiny under which bling to offer solutions. Even Affordable Modification these transactions before Congress got rolling Program (HAMP) expanded were placed caused on the topic, the OCC hit 14 the role of the loss mitigation new pressure for sermajor banks with consent specialist. Systems and proceorders that include a great dures had to beef up quickly. vicers to perform.â€? deal of oversight around But there is also a secSPOC. ond track, wherein the foreclosure process is commenced. The First ‌ a look back foreclosure stage is driven by legal For many years, the chief role of mort- requirements in the state where the gage servicing has been to manage the property is located. For a long time, the cash streams derived from the existence thinking has been that the of a mortgage note (i.e., the borrower lender/investor should protect their has agreed to pay the lender a certain rights to foreclose by following statutoroutine payment sum, usually monthly, ry guidelines to the letter. If the forethat includes an amortized principal closure law in a particular state says amount, some interest and possibly that at 60 days delinquent, some type some proportional amount to cover the of notice must be made, then the expense to make tax and insurance pay- lenders prepared and sent those ments). These cash streams were the notices to the borrowers even though core of a secondary market that the loss mitigation team was also talkenabled the creation of more cash to ing to the same homeowners about fuel the housing market in the U.S. As other options. This process approach is loan originators sold these cash streams like starting the ticking of the forecloto investors, liquidity grew and more sure clock. transactions were made available. When historic delinquency rates were Confusing to a consumer? less than three percent, the practice by You bet it is! And, as has been highly which mortgage servicers went about publicized in recent months, often the processing a foreclosure were largely two teams of mortgage servicing staff unnoticed. are not in perfect sync with each other. In early 2007, when mortgage Loss mitigation teams reaching a sucdefaults began to rise due to the sub- cessful resolution to preserve the mortprime crisis and other market condi- gage are not coordinated with foreclotions, the investors who held the rights sure teams who allow cases to proceed to these cash streams placed more through the courts, sometimes ending emphasis on the entire servicing in foreclosure judgment and sale. process. Delinquency rates rose into Clearly there is a need for a cure ‌ double digits for the first time in right? recent history. The notion of mortgage payment interruption became more The white knight widely viewed as publicly acceptable. So, along comes the idea for SPOC, the

Single Point of Contact. If the homeowner could have a single point of contact, then the likelihood of errors or omissions in the dual track environment should go away. While this makes good logical sense, consider the road to get there. Here are just a few of the roadblocks that might be encountered:

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

A Trip to the NMLS User Conference By Deb Killian, CRMS, NAMB Board Member

JUNE 2011 



This year, I was fortunate enough to be selected by the board of directors of the National Association of Mortgage Brokers (NAMB) to attend the Nationwide Mortgage Licensing System (NMLS) User Conference, held in Orlando, Fla., Feb. 7-10. I don’t know why, but I was surprised to see more than 400 people in attendance. There were regulators, lenders, attorneys, compliance officials, title companies, state associations, owners of mortgage schools, instructors and many speakers present. Being a mortgage broker, it was interesting to hear the perspectives of other mortgage professionals, as the NMLS and state regulators are still working out the kinks. Each session had regulators and NMLS staffers on hand. The most common answer to most questions was “Check with your state.” I noticed what appeared to be misdirected anger and frustration and realized it stemmed from a lack of understanding just what the NMLS’s purpose is. They are simply an aggregator of information … just a big database. They have no regulatory authority other than to fulfill the responsibilities assigned to it by the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act). The NMLS does not issue, approve, deny or renew licenses, nor do they issue administrative actions. They have no licensing requirements. They are a federal database designed to be THE source for companies, state-licensed mortgage loan originators (MLOs) and registered MLOs. Their purpose is multifaceted, but mostly for the benefit of the regulators. Aggregating this information is saving states a lot of money and information now flows easily between the NMLS and the regulators, and between the regulators of different states. At the first session, the Ombudsman Meeting, I arrived to find a packed room. Apparently, many people had many questions, some I had never thought of: 1. How should originating companies deal with advertising/marketing that use social networking sites? Some states require a state license number to be on the ad, some want just the NMLS unique identifier and some want both. The answer: Check with your state. 2. How do offshore mortgage companies, employing non-U.S. residents complete an MU4 form when the applicant doesn’t have a Social Security Number? Again, the answer is: Check with your state. 3. Will the NMLS provide education and testing in Spanish? At this time, they have no plans for other languages.

Multiple regulators were very clear that the NMLS is not only a licensing system, but one that will be used for sharing information and enforcement. Everyone is encouraged to have current contact information in the system so there is no problem being contacted when issues arise. “Not responding to a deficiency in a timely manner, in and of itself, speaks to the character and fitness of a licensee,” said one state regulator. There was a great deal of angst and discussion about the new Mortgage Call Reports (MCR) that were due May 15th. The purpose of the MCRs came about when the mortgage crisis hit. The industry had a difficult time responding to regulators and Congress about the size of the industry. The MCRs will provide useful information to regulators and will be used to monitor MLOs nationwide. Approximately 91 percent of licensees submit abbreviated MCRs. The number of fields for brokers (non-governmentsponsored enterprise lenders) to complete has been reduced to approximately 27 fields. Individual loans by loan information does not have to be filed, but total volume of the MLO is required by MLO Unique Identifier. MCRs are broken down by state and filed with each state regulator. Every loan will be connected to a MLO. The MCR will create a “scorecard” for each MLO and regulators will conduct off-site exams using the data. MCRs will be used to create a report calculating ratios for licensees (compared to their peers), provide risk assessment profiles and determine the frequency of examinations, scope of examinations and allocation of resources. The example given was that based on the data, higher risk profiles may be audited more frequently. Lower risk profiles may not have physical audits as in-depth or as often. Those on hand at the NMLS Conference were not very clear about how the risk profile would be determined. Any time a change is made to a licensee record, the state regulator is immediately and automatically notified. An amendment, new license application, new branch or application for another state—pretty much any time a change is made in the system.

2010 NMLS statistics  The NMLS estimated that 35,230 companies would transition into the system. The actual number of companies that transitioned was 16,896.  The NMLS estimated that 242,623 MLOs would get licensed. The actual number was around 50 percent of their projection at 122,435.  The NMLS reported that 164,448 national tests were administered. The firsttime pass rate was 69-83 percent of MLOs who passed the national exam  The NMLS found that 92 percent of MLOs passed the state component of the exam. The NMLS reported that 192,049 criminal background checks were submitted and passed as were 108,132 credit authorizations. Michael Fratantoni, vice president of research for the Mortgage Bankers Association (MBA) forecasted some statistics:

Originations (Billions) 4. Do wholesale account executives have to be state-licensed? Again, check with your state. The issue is that the broker/MLO acts as an agent of the wholesaler, negotiating on behalf of the lender. I would love your feedback on this, as it is currently not a requirement of most states. 5. If a MLO is employed by a company that has “hundreds of affiliates or subsidiaries, do they all need to be listed on the MU4 form? The SAFE Act requires them to be listed. Once you list them, who is responsible to maintain the list and update the MU4 form to be fully compliant? What is the purpose of this list? Again the answer was “Check with your state.” I got the feeling that state regulators are somewhat embarrassed by the lack of oversight and enforcement, and came away believing that going forward, they will interpret and enforce more laws and more harshly. There was a lot of discussion about deficiencies in the system. Some states post a deficiency as soon as there is an issue. Some give notice to the licensee, and if unresolved, post it then. There were several requests that regulators give the licensee the benefit of the doubt and notify them first, especially in the case of consumer complaints.




















Fratantoni said that the National Association of Realtors (NAR) estimates that 25-30 percent of all sales will be cash sales, and some expect it to be as high as 40-50 percent. By the end of 2011, 30-year fixed-rate mortgages will be at the 5.50 percent mark and by December 2012, rates will hit the six percent mark. There are four million active foreclosures and another four million in shadow inventory which are 90 days or more delinquent or pending foreclosure, equating to a four-year absorption rate. Prices are expected to bottom out at the end of 2011 and expected to be up by 3.6 percent in 2012. Regulators discussed the top issues facing licensees and the most common violations found:  Unlicensed MLOs and branches;  A lack of control or management;


Poor policies and procedures; The charging of improper fees; Non-compliance on borrower disclosures; and Non-compliance on record retention (not easily available and not legible).

A moment of humor came when the room broke out in laughter after one regulator said: “And no shredding or White Out allowed! One auditor asked a broker for files and when the broker disappeared to get the files, the auditor heard the shredder going in the next room!” When it comes to the attitude and psychology of regulators, they want you to know that state audits are really meant to help brokers and MLOs remain in compliance. They are not meant to be witch hunts. Their true purpose is to verify the quality of the originations. Technology is your friend, embrace it and use systems to help with compliance. Most MLOs leave compliance to their employer and going forward that just won’t do. Because there are fewer players, there will be more audits. Compliance will be stricter and there will be less tolerance and higher penalties. The coordination between states will be much easier. The regulators made a good point when they said “Get to know your regulator.” Attitude is everything and cooperation speaks to your intent to comply with the law. Every company, no matter what size or how much volume, must maintain policies and procedures. Calendars of employee trainings go a long way in an audit as does keeping the material trained used. If you are found guilty of any violations, I urge you to correct them immediately, and respond to regulators in a timely fashion. Pick one chief to respond that has data and authority. Above all, be respectful as these regulators hold your career in their hands! They suggest you resolve issues during the examinations, and if you have serious violations, you are best served by seeking legal counsel. When it comes to NMLS education, one issue everyone seemed to agree on was that most of the pre-licensing education offered will be for new entrants to the

business and 20 hours may not be enough. There were suggestions of somewhere between 40 and 60 hours being considered. Education needs have changed and educators must adapt. There was also discussion that perhaps a “gold standard” type certification might some day be issued by the NMLS. Providers should know audits have begun on live and online classes. State and national tests are updated regularly and providers should teach the most current content, and test-takers must take the rules seriously! “This is a high-stakes test,” said Pete Marks, vice president of national testing and education programs at the Conference of State Banking Supervisors (CSBS) Mortgage Division. At the time of the conference, there were 35 test violations resulting in 30 investigations. Yes, there were MLOs actually trying to cheat, and if you don’t like a particular question, there is even a process to challenge the test. I left the 2011 NMLS User Conference with a different mindset than when I arrived. The staff of the NMLS is making every effort to be transparent and work cooperatively with the mortgage industry to improve products and the marketplace. Education and testing is constantly being improved. Processes are constantly being evaluated. Regulators aren’t fooling around … they are flexible and will help licensees (their customers), but they expect to be treated with respect. There are processes in place to challenge the process and there are appeal processes for problems that may arise. The NMLS can be utilized in a positive way if we all work together and this is all new for everyone. The NMLS staff acknowledged that they may not get it right the first time, but they need and rely on feedback from licensees and regulators to make improvements and to consider changes for the future. Deb Killian, CRMS is a National Association of Mortgage Brokers (NAMB) board member and statewide president of the Connecticut Association of Mortgage Brokers (CTAMB). Deb is also Connecticut wholesale account executive for GMAC. She may be reached by e-mail at

Scenes From the 2011 National Association of Mortgage Brokers Mid-Year Meeting


June 4-5 at the Crowne Plaza Valley Forge Hotel in King of Prussia, Pa.

Members of the NAMB 2011-2012 board take the oath of office: John Councilman, Walt Scott, Jim Pair, Linda McCoy, Don Frommeyer, Olga Kucerak and Mike Anderson

NAMB Past President Jim Pair presents the NAMB Presidential Pin to 2011-2012 President Mike D’Alonzo 

NAMB President Mike D’Alonzo presents Ginny Ferguson with the NAMB Distinguished Industry Service Award


NAMB President Mike D’Alonzo presents the NAMB President’s Award of Merit to Denise Leonard for her work on behalf of the association

 JUNE 2011

NAMB President Mike D’Alonzo presents John Councilman with an NAMB President’s Award of Merit

NAMB Government Affairs Committee Chair Mike Anderson (right) accepts the NAMB President’s Award of Merit from President Mike D’Alonzo (left)

By David Lykken

Who Are You Following? Two Kinds of Charismatic Leaders

JUNE 2011 



Have you ever met someone who just captures your attention? No, I am not talking about the physical attributes of some drop-dead gorgeous person you just met. What I am talking about is when you meet someone where there are attributes about their personality that draws your attention towards them. The stronger the draw, the more likely you find yourself being fascinated by this person and eventually “drawn” to following them. It is human nature and the starting point of most relationships, whether personal or professional. We use words like “charisma” or “charm” or “appeal” or “magnetism” or “allure” to explain or describe this almost inexplicable phenomenon that drew us into relationships with them. I have always enjoyed people and found it fascinating to study why some people inexplicably connect. I find it even more puzzling how some of the most inexplicable relationships seem to prosper, while others that seem very understandable fail. All of this has had me on a quest to gain a greater understanding about the phenomenon of charismatic leadership.

“I encourage each mortgage professional reading this article to follow a more logical decision-making process and carefully evaluate the Vision, Values and Vehicle of any leader before, as Ralph Waldo Emerson would say, ‘Hitching your wagon to someone else’s star.’”

Before I go deeper into this topic, it is important that we establish that to be a good or even great leader, you do

not have to have an over-the-top charismatic personality or even any charismatic characteristics at all. It sure helps make it easier to build a following, but the followers may not be following for the right reasons. However, because so many leaders have such a strong charismatic nature, I believe you will benefit from having a deeper understanding and insights on how to respond to a charismatic personality or how to be a good charismatic leader. Interestingly, “charisma” is defined as a “spiritual power or personal quality that gives an individual influence and/or authority of a large group of people.” Anytime you find words defined or characterized in “spiritual” terms, be assured we are dealing with something that is more ethereal in nature … i.e., it has some unexplainable qualities. Maybe that is why it can be difficult to describe or define what makes up the attributes or qualities of a strong charismatic leader. And my use of the word “strong” is not to be confused with “good” or “bad.” No question that there have been some great charismatic leaders and there have been some bad ones. I would suggest that one way to judge the good from the bad is the outcome. So, how do you discern the good from the bad? You start by asking the question: Who are you following and exactly why? Later in this article, I lay out three important areas that will keep you from following bad leadership. If you want to develop yourself as a leader, you will benefit from clearly communicating these three things. While some may take exception to this, I will assert that to one degree

or another, we are all following someone or, at a minimum, someone’s ideology. defines “ideology” as “The body of doctrine, myth, belief, etc. that guides an individual, social movement, institution, class or large group.” It is so important that we understand what someone’s system of ideas, ideals, beliefs, values or manner of thinking is before we follow them. The outcome can be disastrous if you become mesmerized by and follow a charismatic type of person, especially if that person doesn’t line up with your values or ideology. To drive home this point, I was thinking of some examples of four extremely different charismatic leaders. Politics aside, millions of Americans believe that Bill Clinton was one of the most charismatic presidents of modern times. Others were John F. Kennedy and Ronald Reagan. If you struggle with any of these, try and set aside their political ideologies if you can. Now let’s contrast these charismatic leaders with two other charismatic leaders. Consider David Koresh, the cult leader in Waco, Texas where on Feb. 28, 1993, he and some of his followers met their demise in a confrontation with Federal authorities. An even larger tragedy came via the leadership of Jim Jones who on Nov. 18, 1978 lead 918 of his followers to commit “revolutionary suicide.” When looking at these two guys as leaders we can dismiss them as extreme examples of charismatic leaders that became cultic “wackos.” But when you look back to their earlier days, they captured the hearts and minds of some seemingly “nor-

mal” people and rubbed shoulders with some high profile mainstream people. Speaking figuratively in navigational terms, the life or values “compass” of Koresh and Jones was off by only a few degrees … okay, maybe in their cases, way off! However, in the early stages of their leadership journey, it may have been more difficult to discern this fact. To the causal observer, only time and distance would have revealed how misguided they were. A passenger jet flying across the country with a compass off even by a one or two degrees may start its journey headed generally in the right direction, but several thousand miles later, that one or two degree misstep will cause the plane to veer way off course and potentially miss its destination possibly with tragic consequences. The fact that Koresh and Jones amazed the number of followers they did, would suggest that their “moral compass” was off by some imperceptible amount at least initially. If it had been off by a lot in the beginning, it would have been easier to spot and they would have never been able to get the number of followers that they did. It is for this reason that I am writing this particular article. Here’s a cardinal rule I have in place and suggest that you do as well. I have painfully learned that the more charismatic a leader is, the more I need to double down on examining their moral compass and compare it to the three things I am going to get into in a minute. continued on page 14



 JUNE 2011

news flash Generating New Business Is Easier Than You Think by Mary Beth Doyle, Founder


e have all learned from the earliest days of school to rely on fundamental strategies for success. Yet when it comes

to the mortgage industry, only a small percentage of executives & loan officers truly master the fundamentals of high-impact business development initiatives. As a result, the average mortgage entity has become accustomed to 20 percent of loan officers producing 80 percent of the business. This is something that can be (and should be) avoided. The first step is to take ownership of best practices for the benefit of the entire organization. Relationship-centric businesses thrive on retention-marketing methodologies that consistently engage customers, partners, and prospects with high-impact, targeted communications. E-mail, direct mail, telephone campaigns, intelligent alerts – all are integral to the equation. And when specific brand, privacy, compliance, and personalization attributes can be integrated into the framework, a pivotal turning point is reached that yields substantial levels of enterprise-wide production. 12

So what does it take to prepare an organization for retention marketing? The key ingredient is clean and centralized databases for each loan officer’s contacts and historical closed loan activity. When loan officers can rely on secure ‘anywhere, anytime’ access

continued from page 6

gage remain accessible for qualifying households. “This bill is not only the right way to fix the problem, but also happens to be a solution that falls directly in the political center of the issue, making it very attractive to broad, bipartisan support,” said Rep. Campbell. “We know this legislation has the support it needs to become law by the end of this session, but we still have work to do in order to get it there.” Securities issuers would be required to keep healthy capital reserves, which would stand in between taxpayers and potential losses, and would also pay into a privately-capitalized catastrophic reinsurance fund. The fund could only be tapped in after the issuer’s assets had been exhausted, and would cover payment of principal and interest on mortgage-backed securities to investors only. “This is a reasonable, bipartisan approach to achieving two key goals: Putting an end to taxpayer-funded bailouts and ensuring that responsible, middle class families can still achieve the dream of homeownership,” said Rep. Peters. “The status quo is unacceptable, but eliminating any government role in the mortgage market would undermine the fragile housing recovery and essentially eliminate the 30-year fixed rate mortgage.”

Mortgage Success Source Study Finds Top 15 Percent of LOs Produce Seven Times the Average Volume

to their up-to-date books of business – as well as actionable alerts that segment immediate sales opportunities – it is pretty simple to

JUNE 2011 


calculate how effective it will be in both the short- & long-term. And with exceptional advancements in the mortgage industry’s service-based marketing platforms and products, the ability to quickly and effectively implement retention strategies is within reach. Take the time to learn more about the specifics of retention marketing and the impact that powerful methodologies can have on your business. Not only will it substantially improve production levels, more importantly, it will allow you to successfully recruit and retain top-producing loan officers that can continuously realize their full potential. Too often, organizations neglect the core elements required to foster (and maintain) a dynamic work environment & infrastructure. If you stick to the basics, the results will speak for themselves.

Woburn, Mass.-based LoyaltyExpress customizes, automates and manages retention marketing programs that yield extraordinary value. For more information: call 877.938.1175 or visit

Mortgage Success Source, a provider of client acquisition and retention solutions for thousands of mortgage banking institutions, depository banks, mortgage brokers and their loan officers, has released the findings of its landmark study on the best practices of the top performing mortgage loan originators. The new study, “Mortgage Loan Origination: Reaching Peak Performance During Challenging Times” was conducted by independent research firm FirstUSA Data, and provides a roadmap for mortgage firms seeking to improve customer acquisition, retention, and loan production in a year when volume is expected to fall approximately 30 percent, from an estimated $1.4 trillion in 2010 to less than $1 trillion in 2011. The study found a vast difference between the loan production volumes and work habits of top originators and average performers. Each of the top onethird of loan originators generated loan production sales volume averaging in excess of $30 million in the 12 months prior to the survey, three times more than the $10 million produced during the same period by the average loan originator. Another key finding: Top

originators spend more time than the national average on both customer acquisition and knowledge acquisition. Top producers dedicate one-third of their time to acquiring new customers and maintaining relationships with prospects and former customers, whereas average originators only spend onequarter of their time in such activities. “We discovered in the study a sevenfold greater production level in the top 15 percent of mortgage loan originators compared to their average or even above-average counterparts,” said David Fournier, chief executive officer of Mortgage Success Source. “The best practices of top performers are effective for all originators regardless of the type of lending and financial institution in which they are employed.” Top performing loan originators are not better trained or more experienced than average performers, according to the study’s findings. They are not compensated differently nor work longer hours. However, top performers uniformly stay more in touch with potential customers and adapt more quickly to changes in the marketplace than their peers. For example, top producers continued to prosper in 2009 as they re-focused more quickly on refinance loans as home purchase loan volume collapsed by two million loans, while refinance loans increased by one million from 2008. The study surveyed originators of every size in all segments of the industry—from independent mortgage originators and mortgage brokers to mortgage banking firms—across the country. More than 3,600 individual originators completed an initial online survey and more than 650 of those respondents participated in a detailed followup phone interview. “The study showed that top producers believe obtaining more financial and product knowledge gives them more power in the marketplace,” said Mark Teteris, vice president of banking solutions at Mortgage Success Source. “Top loan originators rely much more heavily on trade journals and publications, and complete more accreditation and licensing courses than their originator peers.”

HUD Settles With U.S. Bank for $1.2 Million for FHA Non-Compliance The U.S. Department of Housing & Urban Development (HUD) has announced a settlement with Minneapolis-based U.S. Bank, National Association, the Federal Housing Administration’s (FHA) eighth-largest mortgage lender. Under the terms of the settlement, U.S. Bank will pay $1.2 million to resolve allegations that it failed to comply continued on page 15

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

I 90 Day Seller Seasoning Not Required

I Free DU

I FHA and FHA High Balance Loans Down to 620 Fico

I Direct Access to Underwriting

I Limited Trade Line Requirements- Subject to DU Approval

I Bank Funding

I Maximum 10 Financed Properties Allowed


For additional information regarding Conforming, Jumbo, FHA and VA Lending, Call us at 1-888-247-4207 or visit us online at 

I LPMI Available to 95%


lykken on leadership

interviewed for this article agreed that he was very charismatic as a leader. Many followed him to the bitter end, and in staying loyal, it destroyed the careers of a good number of his followers. Love or hate Angelo Mozilo, you have to admit that he attracted thousands of associates and billions of dollars of investment capital to follow him. I first met Angelo in the early 1970s shortly after starting my career in mortgage banking. Later, when I chaired a technology committee for the MBA in the mid-1980s, I worked closely with the MBA’s leadership of which Angelo was a part. Then, when I started my first mortgage banking company in the early 1990s, I was fascinated by his gutsy leadership and management style … it truly mesmerized me. One thing I admired was the fact that Angelo wasn’t afraid of boldly calling people out on things he thought were wrong. I will never forget that one Western Secondary Conference when he boldly challenged all of us mortgage banking business owners and executives “to not turn a blind eye to fraud for the sake of getting more production or making more money.” In an unusual moment of transparency for someone that had built what he had at that point, he said something to the effect that “We all, myself included, have tolerated fraud, but I am not going to allow it anymore and encourage you to do the same!” It was one of those “leadership moments” that made a real impression on me at the time. He spoke of the values to which I subscribe, and did so in such a bold and powerfully convincing way. You might say, “I drank the Kool-Aid!”

JUNE 2011 



Now, let’s take a look at two presentday charismatic leaders and compare the impact they have had on our industry—one with a positive impact and the other negative. The first individual is David H. Stevens, the former commissioner of the Federal Housing Administration (FHA). While I don’t know David personally, David and I have a close mutual friend. Our mutual friend worked closely with David for years and speaks admirably about his character, his people skills and his charismatic qualities. I believe those qualities are what gave him the ability to accomplish what he did as commissioner of the FHA. Stevens and the team he assembled did an exemplary job of getting FHA back on a track after it had become derailed by taking unacceptable risks that could have jeopardize this instrumental “institution” and cornerstone of our industry. Other factors beyond David’s strong character is his ability to lead with conviction and confidence … just a few of the characteristics I have written about in recent articles in this publication. But in the most difficult of times, it was David’s charismatic leadership style that convinced an industry to get behind his agenda to get the FHA back on track. I wish David all the success in his new role as the head of the Mortgage Bankers Association (MBA). Now let’s consider Angelo Mozilo, the former head of Countrywide, possibly one of the most controversial and charismatic leaders in our industry’s history. Some would say that he had more of a Machiavellian management style than a magnetic one. Yet most of the mortgage professionals I

continued from page 10

Years later when Countrywide’s business practices were being called into question, I doubted the reports. In fact, I’ll never forget being interviewed on the CBS Evening News by a tough investigative reporter that was covering the unfolding Countrywide story. While on national prime-time television, she grilled me for my defense of Angelo and Countrywide’s management team. I learned a valuable and humbling lesson about the effects of drinking any charismatic leader’s Kool-Aid. Regardless of how you choose to cut it, the Countrywide Empire went from being in iconic superstar status to becoming the poster child of everything that went wrong with the mortgage industry. Tens of thousands of jobs were lost, and billions of dollars of investment capital evaporated … ultimately as the result of a dynamic and charismatic leader’s failure to hold to the values that, at one time, had made Countrywide such an amazing success story. This is why I have dedicated myself to write about leadership, and specifically this month, about charismatic leadership. Values of our leaders do matter. Do you remember when it came to light that President Clinton had in fact lied when he swore, “I have never had sexual relations with Monica Lewinsky?” I specifically remember one television commentator after another dismissively say, “It really doesn’t matter what he does in his personal life!” I remember talking (more like screaming) back at my television, “You are wrong, it does matter … in our leaders character does matter!” In reality, character matters throughout an entire organization. Just ask any owner of a mortgage banking company that has one or two loan originators that lacked character and knowingly did some fraudulent loans. In many cases, those fraudulent loans resulted

Don’t Wait.

Get your CE courses today! NMLS Fees included.

SAFE Act Training Solutions ƒ Meet Federal and State CE C requirements with our NMLS-approved courses ƒ NMLS training approvalss in most states, districts and terrritories across the country ry ƒ For full course and appro oval list, visit www.allregsmortga ƒ Fe Feature red Co Cours rse! New low w pri ric ice! 8 Hour SAFE Comprehensive for $66 ƒ Credit banking fees included with individual self-study co ourse fees

Donn’to oW an ttitt. ... GeyyurCEcsudCeCr G rG!scNEeMr (800) 848-4904 | NMLS Approved Mortgage Education Course Provider #1400024 MetFdrralnSCFMlaEquqSFiCmsuE EwlhFolmaNSFLalnwCSaF-pvccc

in repurchase demands from investors that ended up forcing the company to file bankruptcy and shut its doors. Excuse me for again stating the obvious, but CHARACTER MATTERS! Never has it been a more important to know and understand the value and importance of good leadership. Good or bad leadership is typically evident throughout the entire organization. One of the blind spots that can cause people to be misled and follow after bad leadership is when they meet a dynamic and charismatic leader. In almost every failure of leadership I have seen, there was a failure to evaluate three critical factors: Vision, Values and Vehicle.  Vision: What are the goals and direction of the leader?  Values: What are the guiding principles by which the leader will steer their course?  Vehicle: By what means is the leader going to get from where they are at to where they want to go? As the mortgage industry continues to experience disruption and dislocation, mortgage professionals will feel the need to consider alternatives to their current employer. It is critical that those considering a move avoid the trap of doing so in a reactive manner “drinking the Kool-Aid” of the next dynamic charismatic leader. I encourage each mortgage professional reading this article to follow a more logical decision-making process and carefully evaluate the Vision, Values and Vehicle of any leader before, as Ralph Waldo Emerson would say, “Hitching your wagon to someone else’s star.” What should matter the most is not the mesmerizing words a charismatic leader speaks, but the (carefully examined) character behind the words spoken. Next month, I will be writing once again on leadership, but this time, on the importance of clear and concise communication. I would also encourage you to go back and read my previous articles on leadership. Each new article builds on the previous month’s article. I welcome any and all feedback. David Lykken is president of mortgage strategies and managing partner with Mortgage Banking Solutions. He has more than 35 years of industry experience and has garnered a national reputation, and has become a frequent guest on FOX Business News with Neil Cavuto, Stuart Varney, Liz Claman and Dave Asman with additional guest appearances on the CBS Evening News, Bloomberg TV and radio. He may be reached by phone at (512) 977-9900, ext. 101 or e-mail To listen to author David Lykken’s online radio show, “Lykken on Lending,” log on to

news flash

continued from page 12

with FHA requirements in connection with 27 mortgage loans. U.S. Bank did not admit any liability. HUD documented losses of more than $465,000 in relation to these loans. “FHA’s underwriting and endorsement standards exist to protect its insurance fund and every family hoping to sustain homeownership,” said HUD General Counsel Helen Kanovsky. “We expect our lenders to uphold those standards and we will hold them accountable when they don’t.” The agreement follows a 2006 audit by HUD’s Office of Inspector General, which concluded that U.S. Bank failed to meet FHA underwriting standards in connection with mortgage loans originated in 2003 and 2004. FHA generally prohibits the inclusion of overdue principal, interest and late charges in refinanced loans; however the audit found that in some cases U.S. Bank refinanced loans that included such prohibited amounts, among other violations of FHA underwriting requirements. The audit also found that U.S. Bank submitted loans that were in default to HUD for late endorsement. FHA requires that loans not be in default when they are submitted for late endorsement, or more than 60 days after closing.

cent, a decrease of 50 basis points from last quarter, and a decrease of 144 basis points from the first quarter of last year. The combined percentage of loans in foreclosure or at least one payment past due was 12.31 percent on a nonseasonally adjusted basis, a 129 basis point decline from 13.60 percent last quarter. “Most of these numbers continue to point to a mortgage market on the mend. Short-term delinquencies remain at prerecession levels,” said Jay Brinkmann,

chief economist of the Mortgage Bankers Association (MBA). “Loans 90 days or more delinquent have now dropped for five straight quarters and are at their lowest level since the beginning of 2009. Foreclosure starts are at the lowest level since the end of 2008 and had the second largest drop ever. The percentage of loans somewhere in foreclosure is down from last quarter’s record high and also had one of the largest drops we have ever seen, although the reasons for the drop will differ from market to market.” On a seasonally adjusted basis, the overall delinquency rate increased for all but Federal Housing Administration (FHA) loans, with the biggest increases coming in the sub-prime categories. The seasonally adjusted delinquency

rate stood at 4.59 percent for prime fixed loans, 11.25 percent for prime adjustable-rate mortgages (ARMs), 22.04 percent for sub-prime fixed loans, 26.31 percent for sub-prime ARM loans, 12.03 percent for FHA loans, and 6.93 percent for VA loans. The percentage of loans in foreclosure, also known as the foreclosure inventory rate, decreased 12 basis points overall to 4.52. The foreclosure inventory rate for prime fixed loans, which make up the largest portion of the survey (accounting for 63 percent of all loans outstanding), decreased eight basis points to 2.59 percent. The rate for prime ARM loans decreased 69 basis continued on page 17

Pulling your hair out with other lenders?

MBA Survey Finds Significant Drops in 90Plus Day Delinquencies and Foreclosures

Account Executives Inquire:

*Same-day decisions guaranteed if file is received by 11 a.m. EST.

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.

 JUNE 2011



REMN’s Sales and Operations team gives you - and your loans - the time and attention you deserve. Even better, at REMN, same-day approvals are guaranteed.* You can rely on us to get the little, yet vital, things taken care of on time. When you have REMN to send your loans to, why pull your hair out with other lenders? 

The delinquency rate for mortgage loans on one- to-four-unit residential properties increased to a seasonally adjusted rate of 8.32 percent of all loans outstanding as of the end of the first quarter of 2011, an increase of seven basis points from the fourth quarter of 2010, and a decrease of 174 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The nonseasonally adjusted delinquency rate decreased 117 basis points to 7.79 percent this quarter from 8.96 percent last quarter. The MBA’s National Delinquency Survey found that the percentage of loans on which foreclosure actions were started during the first quarter was 1.08 percent, down 19 basis points from last quarter and down 15 basis points from one year ago. The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the first quarter was 4.52 percent, down 12 basis points from the fourth quarter of 2010 and 11 basis points lower than one year ago. The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 8.10 per-



Investing in communities

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

news flash

53 basis points for FHA loans, and 16 basis points for VA loans. continued from page 15

points from last quarter to 9.53 percent. Sub-prime fixed loans saw an increase of 67 basis points to 10.53 percent, which is a new record high in the survey. The rate for sub-prime ARM loans increased 26 basis points to 22.26 percent, while the rate for FHA loans increased five basis points to 3.35 percent and the rate for VA loans increased four basis points to 2.39 percent. “National statistics, however, are somewhat meaningless in real estate because local market conditions determine values and peoples’ perception of values of conditions,” said Brinkmann. “Florida remains a problem. Twentyfour percent of all mortgages in the country that are in foreclosure are in Florida and 23 percent of the loans in Florida are anywhere from one payment past due to in foreclosure. In Nevada, foreclosure actions are still being initiated at an annualized rate of over nine percent. In Arizona, the annualized rate of foreclosures started is over seven percent and more than half of all of the loans in foreclosure in this country are in just five states. Yet 38 states have foreclosure rates that are below the national average. We have areas of recovery but those numbers are often overwhelmed by the bad numbers still coming out of a few large states.”

The foreclosure starts rate decreased 16 basis points for prime fixed loans to 0.68 percent, 42 basis points for prime ARM loans to 2.38 percent, 19 basis points for subprime fixed to 2.56 percent and 57 basis points for sub-prime ARMs to 3.67 percent. The foreclosure starts rate also decreased nine basis points for FHA loans to 0.93 percent and 15 basis points for VA loans to 1.02 percent. Given the challenges in interpreting the true seasonal effects in these data when comparing quarter to quarter changes, it is important to highlight the year-over-year changes of the non-seasonally adjusted results. The non-seasonally adjusted delinquency rate decreased for all loan types since the first quarter of 2010. The delinquency rate decreased 146 basis points for prime fixed loans, 205 basis points for prime ARM loans, 330 basis points for sub-prime fixed loans, 245 basis points for sub-prime ARM loans, 103 basis points for FHA loans, and 88 basis points for VA loans. The non-seasonally adjusted foreclosure starts rate decreased one basis point for prime fixed loans, 33 basis points for prime ARM loans, eight basis points for sub-prime fixed loans, 65 basis points for sub-prime ARM loans,

Seventy-Five Percent of Refinancing Homeowners Maintain or Reduce Debt in Q1 Freddie Mac has released the results of its Q1 CashOut Refinance Report, showing that homeowners who refinance continue to strengthen their fiscal house. In the first quarter of 2011, 75 percent of homeowners who refinanced their first-lien home mortgage either maintained about the same loan amount or lowered their principal balance by paying-in additional money at the closing table. Fifty-four percent maintained about the same loan amount, the highest share since 1985, when Freddie Mac began keeping records on refinancing patterns. In addition, 21 percent of refinancing homeowners reduced their principal balance. Borrowers who took “cash-out,” those that increased their loan balance by at least five percent, represented 25 percent of all refis; the average cash-out share over the past 25 years was 62 percent. “The average interest rate on singlefamily mortgages outstanding at the end of 2010 was about six percent, so there are still plenty of homeowners that can benefit from refinancing,” said Frank Nothaft, Freddie Mac vice president and chief economist. “We found the typical borrower reduced their interest rate about 1.2 percentage points by refinanc-

ing during the first quarter. For a 30-year fixed-rate mortgage with a $200,000 loan balance, that’s a monthly payment savings of about $150.” The net dollars of home equity converted to cash as part of a refinance, adjusted for inflation, was at the lowest level in 15 years (third quarter of 1996). In the first quarter, an estimated $6 billion in net home equity was cashed out during the refinance of conventional primecredit home mortgages, down from $9.1 billion in the fourth quarter and substantially less than during the peak cash-out refinance volume of $83.7 billion during the second quarter of 2006. Among the refinanced loans in Freddie Mac’s analysis, the median appreciation of the collateral property was a negative six percent over the median prior loan life of five years. In comparison, the Freddie Mac House Price Index shows a 21 percent decline in its U.S. series between the end of 2005 and end of 2010. Thus, borrowers who refinanced in the first quarter owned homes that had held their value better than the average home, or may reflect value-enhancing improvements that owners had made to their homes during the intervening years. “Consumers continue to reduce their debt, either by paying down or paying off their mortgage loan, or reducing the interest cost,” said Nothaft. “Homeowners’ aggregate financial-obligation ratio, which peaked during the third quarter of 2007, continued on page 22



 JUNE 2011

Lynn Tucker, Vice President of Branch Operations Freedom Mortgage Corporation vice president of servicing and collections. In 2003, Lynn joined Mt. Laurel, N.J.based Freedom Mortgage Corporation where she currently serves as the company’s VP of branch operations, responsible for more than 100 branches nationwide.

JUNE 2011 



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: to be considered for a future “Mortgage Professional of the Month” feature article. This month, we had a chance to chat with Lynn Tucker, vice president of branch operations at Freedom Mortgage Corporation. Lynn began her career in the mortgage industry with Lenders Servicers Inc. (LSI) in Philadelphia as an officer manager. It was at LSI that Lynn began to see the full operations and inner-workings of a major mortgage operation. From LSI, Lynn moved on to Associates Financial Services in Cherry Hill, N.J., serving as assistant manager and furthering her industry knowledge until she joined Equity One Inc. in 1990. At Equity One, Lynn held a number of positions, from assistant branch manager, to branch manager, underwriter, senior branch manager, and assistant

How did you first get involved in the mortgage industry? Early in my career, I started working for a bank and wanted to attain a better understanding of the financial business. A friend of mine was a recruiter and mentioned that Lenders Services Inc. (LSI) in Philadelphia was looking for an office manager. I spent four years with LSI doing title and abstract work, along with appraisal reviews. At the time, LSI had three major centers employing around 2,000 companywide. I worked at the headquarters in Philly that oversaw all of the East Coast operations. Ready to broaden my career, I learned that Associates Financial Services was hiring. I was offered a position as an assistant manager and took the opportunity to learn the finance side of the industry. I spent around five years there before I was ready to make another vertical move in my career. At Equity One, I served as office manager and learned a great deal about this industry. I ran one of their smaller offices for around three years, until moving to their corporate office where I worked in a number of positions, including origination and underwriting, learning all aspects of the servicing department. Eventually, I headed the servicing division, where we did everything from payment processing to new loan setup, to customer service escrows. We also did collateral securitizations and worked with a couple of firms on Wall Street. Moving forward in my career, I learned that Freedom Mortgage was considering the branch business, and here I am today.

Having been involved in everything from originations to underwriting and servicing, do you think all of that experience is an advantage as a growing leader? Absolutely. I’ve been on both the outside and inside of the corporate structure and have seen both sides of the fence. One thing I fully understand is what those loan officers out there on the street are up against on a daily basis. It really helps with relationshipbuilding when I can draw from my time spent in the corporate office and apply it to establishing new relationships.

“The sad part is that a lot of people don’t realize that everybody in this business is in the same boat. Without the borrowers, you have nothing at all!”

Has your experience dealing with the servicing side of the industry guided Freedom Mortgage’s branches to stay away from certain products? I wish I could take credit for that. The chief executive officer of our organization is very involved in the day-to-day operations. He has his finger on the pulse of the mortgage marketplace and has a very talented group of key executives to consult with when it comes to decision-making. He is very good at following the fluctuations in the industry and keeping on top of industry changes. When you take on a new branch at Freedom Mortgage, what is the best way to have all parties involved learn the new products? What tools do you use to get everyone on the same page? We have corporate trainers dedicated

to the branch division. We strive to readily prepare our employees and support their training needs as much as possible right out of the gate. This is crucial to their success. When industry changes take place, we bring employees up to speed in real-time via Web-based information exchanges. It is crucial that originators convey accurate product information, while educating the consumer on products and services best for their unique situation. What has been the biggest improvement in Freedom Mortgage’s operations over the last five years? Strong team building with an emphasis on customer service. Basically, you are trying to stress that a deal is not just another deal, it’s the most important deal. Correct. I believe the company’s success is strongly tied to the fact that we truly care about each and every customer. We encourage a human touch approach in our daily operations, where common courtesy, kindness and a real effort in understanding the uniqueness of each individual’s needs are essential to our success as a whole. What are some of the ways in which you inspire your employees to see your vision? Communication. We hold frequent staff meetings where we share some of the challenges branches are facing out there on the frontlines. We stress to our employees that their service is key … it is what will set them apart from the competition. We also emphasize that communication between the field and our main office is vital to our business. Sitting here in your office, the one thing I notice is that you really don’t have a desk, it’s more of a table. What

down to Earth. When you buy a house, you should be able to afford it. The sad part is that a lot of people don’t realize is that everybody in this business is in the same boat. Without the borrowers, you have nothing at all!

sort of management techniques do you employ? Do you have any particular mentors that have guided you over your career? I employ management techniques that never seem to go out of style: “I don’t care who broke it, let’s fix it. I don’t care who made the mistake, let’s just get it corrected.” If it works for me, but doesn’t work for you, it’s not working. I’ve been influenced by several people professionally throughout my career. Ray Matteucci, a former colleague, comes to mind. You tend to look at the people you admire and adapt their management styles. I observed as he worked his way up to a successful career. This gave me the insight to say, “If he can do it, so can I.” He took the time to make sure that I understood everything through and through, which is a management tactic that I employ to this day.

“I don’t care who broke it, let’s fix it. I don’t care who made the mistake, let’s just get it corrected.” “If it works for me, but doesn’t work for you, it’s not working”.

What do you feel has been the greatest accomplishment of your career? I really do not look at myself in that light … ever! The fact is that most of my accomplishments are team efforts. This is a rough business where you have your good days and those that are a bit more challenging. I would have to say that being a person of conviction and applying a healthy mix of intuition and good business sense to every approach is personally fulfilling. Do you have any regrets in your career? I probably regret that I didn’t listen more to others’ input than I have. I believe that if one does good, honest hard work that the company’s goals can be advanced. However, listening is as important and doing, and so I strive to strike a balance between the two. I am a person of true conviction. When I feel like somebody or something is wrong or somebody has being wronged, I stick up for them and make it right, even if it’s at my own cost.

They say people are influenced most by either books, people or the places they go in life. Have any of these three have had a profound impact on your life at any point? The person who had the largest impact of my life is my father, Richard. As I was growing up, my father would make us do a lot of work … we always had chores and work had to be done … we continued on page 20


L Associated Mortgage Bankers prides itself on the highest integrity owners & employees in the industry L Our long term goal is to attract and retain clients by meeting their needs with quality service and competitive pricing L We are innovative, aggressive, and productive in the operation of our business L We operate at the lowest cost consistent with providing quality and value

Associated Mortgage Bankers Inc. Gail Young 516-303-0681 800-684-1045

 JUNE 2011

What is your opinion of the housing crisis? Is there any one party that you can point the finger at? The business went through a lot of changes over the last couple of years … like its own little evolution. While I will not position myself as a finger-pointer, I believe that it’s time to come back

Throughout the purchase boom, what channels of origination will lead—the wholesale retail banks or affiliate branch partners? I feel that the wholesale market will still

What do you feel makes a good leader in the mortgage business? In my personal opinion, a good leader is someone who cares about the customer above all else and is not just out to make a dime. We all went through different phases in the business over the past 10 years, as business was up and down. Think about it … do you tend to remember those who do the right thing? Treat you right? Refer them to others?


Do you have any explanation of why, in today’s world, there are not more women leaders in the field of mortgage banking? It’s difficult sometimes, more so for a

How are you able to do it? I have a wonderful husband who actually does a lot for me. He’s been with a company for 20-plus years and he’s got more flexibility in his schedule than I do. He runs the kids around from hockey to gymnastics, and even driving lessons. He’s very supportive. When I come home, dinner is on the table and the house is usually in order. Then on the weekends, it’s my turn. His weekends are his time to play and tinker with his cars, motorcycles and everything else, and I am the one doing the running around.

As we enter what the Mortgage Bankers Association (MBA) sees as a huge purchase market, going from $600 billion to $900 billion in the next five years, what can mortgage loan originators and organizations do to capture this business? Pay attention to the service level in this industry. If you have the ability to close your borrower’s loan quickly, professionally, at a decent rate and with minimal fees, you will be successful. It goes back to the mentality that you should treat people the way that you want to be treated. Of course it’s important to have a good competitive rate, but the customer will remember you better by the way you treated them. 

Have you set any goals for yourself or Freedom Mortgage? Personally, I’m probably harder on myself than anyone else. I have my own internal goals that I’d like to see happen. However, I try not to set too many on the staff because I don’t want anybody to feel disappointed, so I try to set them very gingerly. I’ll give you an example … I don’t feel satisfied unless my productivity increases 10 to 15 percent on a regular basis, even if my boss thinks I’m doing great. If I were to have 100 branches and each branch does one more loan this month than they did the previous month, it seems like a pretty easily attainable goal right? That’s 100 extra loans. So when you put it into perspective, the results are astronomical compared to the goal that I asked for. If I told each person to have each branch manager submit two more applications each month, it’s not a lot to ask for, but two for each of 100 branches is 200 more apps a month. It’s a big 200 in comparison to what I asked for. I ask myself, “Can I make a difference in one person’s life this month? Can I make a difference and help a branch do one more loan? Can I help a loan officer get one more lead or lead source?” If I make the goal simplified, it’s easier to obtain and no one feels disappointed.

woman than for a man, because we have a tendency to have lot more outside interference with the ability to work the hours that are required to work. This is a very strenuous business. On average, most of the women that are in the business in management positions are putting in 10-, 12- or 14hour days. That’s not that as easy to do when you have a home to take care of and children to tend to. We don’t have as much freedom when trying to raise a family or be a member of a family as a man would in this business … I think that’s the only reason there are a lack of women leaders in the industry. Although you might want to strive to make a career, you also take just as much pride in what your family means to you and value that time shared with them.

“We stress to our employees that their service is key … it is what will set them apart from the competition.”

dominate. There are more people out there dealing with wholesale business than retail. You’ll find that most times when you go to banks, the banks are priced a little higher. You have someone who is doing 15 different things. You go to a banker and they try to sell you CDs, life insurance, etc. in addition to a mortgage loan because that’s part of their job. You go to a branch partner and our only focus is getting the customer’s loan closed.

mortgage professional

ICON RESIDENTIAL is GROWING in markets across the country. Top producing Account Executives are joining us because we offer: I Compensation Above Industry Standard I Excellent Employee Benefits I Customer Service That Exceeds Expectations I Competitive Pricing I Paperless Solution I Bank Subsidiary If you’re a top producing Account Executive please take a minute to explore how ICON RESIDENTIAL can help you take your career to the next level. We have opportunities in markets across the country.

For an immediate interview contact Chris Weir, Talent Acquisition Manager at or call him at 949-502-6030. 20

didn’t go anywhere until it was done. Even if everyone else was out playing, it didn‘t matter. It wasn’t until I got in my later teens that he and I started really sitting down and talking. One day, he turned around and looked at me and he said that if anything ever happened to him, that he wanted us to be able to stand on our own. He raised us with a lot of backbone and hard work is an understatement. He taught me to do whatever it takes to get the job done, whether it is putting in 12-, 13- or 14-hour days. I watched my father work like there was no tomorrow, whether he was sick or not. He was in the restaurant business and I remember walking in one day and asking where he was and they said he was out washing trash cans. I though that after 30 years in the business, he deserved a little better and wouldn’t have to do those tasks. I asked him why he was washing trash cans, and he asked me, in return, “What makes me different from anyone else?” From that point on, I spent my entire career trying to impress my father.

“It is crucial that originators convey accurate product information while educating the consumer on products and services best for their unique situation.”

JUNE 2011 


Earlier, you asked what my greatest accomplishment was in my career. I guess it was knowing that my father was proud of me … the rest doesn’t matter. If I got a raise, promotion or advancement, the first person I called was my father. If I knew that he was proud, then the rest just didn’t matter. He’s one of the

continued from page 19

strongest men I think I’ve ever met in my life who would do anything for anybody.

“One thing I fully understand is what those loan officers out there on the street are up against on a daily basis.”

What do you feel about the future of the mortgage industry? In regards to the way business is conducted today, there are ways to do things and ways not to do things. Many of the industry’s giants have fallen. We’d all like to be everything to all people and we’re not. I think that the people who are left in the industry really need to sit back and examine the priorities and what is right or not. You’re not going to be able to go out and get everyone in a house. We all have financial obligations and need to understand that. I think we all need to be accountable for our actions. If you do what you’re supposed to do when you’re supposed to do it, you won’t have issues. When I was a loan officer, I got business hand over foot. It wasn’t in the busiest market, it was because I did what I had to do. Also, be careful what you promise, because if you make a promise, you should deliver on it. If we all did that, then we’re way ahead of the game and are not struggling in this business. A good loan officer is a good loan officer and will always be a good loan officer and will get business because they do the right thing. We all need to be responsible human beings; from a borrower understanding what they can qualify for, to the lender educating the customer on the home financing options that best fit their current situation, even if it means having to tell them no.


Whether you’re actively searching for a new job or not, don’t miss what could be your next career opportunity. Post your anonymous resume now to start building a better career in the mortgage industry. Search the vast number of career possibilities available in the origination, settlement, secondary & servicing areas of the Mortgage Business or create a personal job alert to be notified of new jobs that match your search criteria. Be available for your next career opportunity. Post your resume at where employers search for mortgage professionals.

Post your resume. Find a job.

Be happy.

2011 Mortgage Leader Cruise Sets Sail Oct 13th-17th Visit for details.


Why W hy NAP NAPMW? M MW? Three T hree Simple Reasons Reaso ons

Motivation vs. Incentive perfect it and enjoy it. Hard work does not always have to “feel” hard, it’s simply a statement for being active and motivated.

“It’s not enough that we do our best; sometimes we have to do what’s required.” —Winston Churchill

Organized for Organized for the purpose purpose of providing providing education education to to professionproffession e als in all phases off the mortgage mortgage industry, industry, NAPMW N NAPMW offers offers educaeducamanyy vvenues workshops held around tion via man enues – seminars and w orkshops k around the on-line,, and National Conference ccountry, ountry, on-line a at at its Na tional EEducation ducation C onference held each h May. May. NAPMW NAP MW membership membersship gives gives you you exclusive exclusive ac aaccess cess tto o timely educaeducaaffecting career tion regarding regarding the e regulations regulations aff ecting yyour o car our eer such as a webinar FREE TO TO MEMBERSS monthly monthly w ebinar on industry ind dustry updates updates AND education class offering our 8 hour NMLS continuing continuing educa tion cla ss off ffe ering (NMLS Provider 1400309) P rovider # 140030 09) 21

LLeadership eadership p

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

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

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

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

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

 JUNE 2011

continued on page 24

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


From my years in management, I have found that there are specific traits shared by elite performers and high producers. There are also specific traits that the mediocre producers or failures share. While external efforts are made to help all succeed, you simply cannot change one’s free will. In the long haul, people will do what they do. Some things simply cannot be trained, regardless of how hard you try. There is no temporary or shortterm option for success and you cannot help someone if they truly do not have the desire to succeed. It’s all or nothing to succeed in the mortgage industry, every day. You must understand yourself and how to stay motivated, along with the difference between motivation and incentives. While some are confused thinking money is a motivator, it’s not. Money simply creates an exterior incentive to do something. Sure, we all work to get paid in order to continue covering living expenses and build wealth, which is a large factor in our goals, but the true high performers go beyond this material thought. When I see workers cleaning portable toilets after football games, I see the incentive being money. Motivated? I highly doubt it (or I surely hope not). True motivation comes from deep fulfillment and enjoyment of the results that come from meeting your business and per- 

As a real estate professional, your job duties require hard work if your intention is to succeed. “Hard” work is defined and interpreted much differently from one person to the next. Hard work could mean long days and backbreaking labor, or simply showing up to work on time—day in and day out— with an agenda to get things done. The physical part of hard work is easy to distinguish by the position and duties, however, the motivational and psychological side of hard work is much harder to decipher amongst office and white collar professionals. I believe most employed in the real estate and finance industries would agree that our jobs do not require much physical effort. So … what is hard work to us and what is required for success in our industry? The real question should be: What am I doing each and every day to improve my business and the experience of my clients? Am I giving all of my effort each and every day to serve my clients and get more referrals? For any questions you have or obstacles you face, stand in a mirror to see the problem and solution. Is your career in drive, neutral or in reverse? If you need to shift gears, do it now. When it comes to our profession, some are lazy and some are not. If you’re working by commission or wages based off performance, than you have no excuse to be lazy. You owe it to yourself and your family to give 100 percent every day. If you are not finding yourself giving 100 percent, then you might need to take some time and re-evaluate yourself to ensure you are in the right career field and not in the real estate industry for what you “could” be making in relation to any other respectful career. My personal opinion is that hard work is required in any industry, but you must enjoy what you do. Whatever you do, be the best at it …

Education E duc d cation

news flash

continued from page 17

had dropped by the end of 2010 to a level last seen more than a decade ago.” The median interest rate reduction for a 30-year fixed-rate mortgage (FRM) was about 1.2 percentage points, or a savings of about 20 percent in interest costs. Over the first year of the refinance loan life, these borrowers will save over $1,800 in interest payments on a $200,000 loan.

U.S. Housing Market Found Enticing to the International Buyer By Charlie W. Elliott Jr., MAI, SRA, ASA

Preventing Appraisal Fraud

JUNE 2011 



Consideration was given to titling this column, “Preventing Mortgage Fraud.” It is true that much mortgage fraud stems from appraisal fraud, however, not all mortgage fraud relates to appraisals. Also, not all appraisals involve mortgage loans, so, given our focus in this column on property evaluations, the title will remain as it was first written. That being said, much of this writing will involve mortgage fraud, as well as inflated or fraudulent mortgage loan appraisals. Some may wonder whether fraud in our industry is a material issue. To put the challenge of fraud into perspective, I offer the following recent industry fraud reports:  In response to questions about the Obama Administration’s efforts to prosecute those responsible for the mortgage meltdown, in March, FBI Director Robert Mueller reported to the House of Representatives Judiciary Committee that his agency had 3,000 open investigations into mortgage fraud, using 94 task forces and 340 agents.  According to the U.S. Office of Thrift Supervision (OTS), FBI investigations into suspicious loans increased 400 percent from 2005-2009.  The 2009 FBI Mortgage Fraud Report states that lenders circumvented the Home Valuation Code of Conduct (HVCC), designed to eliminate collusion between the appraisers and those earning income from closings, by allowing non-commissioned employees to order appraisals.  The Mortgage Bankers Association (MBA) reported last year that 14 percent of all home mortgages were delinquent or in foreclosure. CoreLogic, a company that produced a research report, entitled “2010 Mortgage Fraud Trends,” reported that 25 percent of all foreclosures manifest evidence of fraud.  The OTS recently reported that 80 percent of all mortgage fraud

involves collaboration or collusion by industry insiders.  An estimated $14 billion was lost in mortgage fraud in 2009 alone, stated Tim Grace, senior vice president of fraud analytics at CoreLogic. “While the industry has done good work, there is evidence that fraud patterns are changing and becoming increasingly more hidden,” Grace said. The survey also reported a combined total of $75 billion in losses from 2006-2009.  According to the Financial Crimes Enforcement Network (FinCEN), lenders filed more than 35,000 suspicious activity reports (SARs) on questionable loans during the first half of 2010.  According to the Federal Deposit Insurance Corporation (FDIC), in 2009, 140 banks failed, costing $37.4 billion. According to the FDIC’s Web site (, 351 banks failed in the period from Jan. 1, 2007-March 31, 2011.  Acting U.S Attorney Nora D. Dannehy stated that most mortgage fraud cases involve false representations on mortgage loan applications and inflated property appraisals and that an estimated 83 percent of all mortgages are legally problematic.  The Mortgage Asset Research Institute (MARI) reported that suspected appraisal/valuation fraud stood at 22 percent in 2008 and that the rate jumped to 33 percent in 2009, based upon SARs from lenders. Most but not all of the information above is factual in nature. My research intentionally came from a broad range of independent sources in an attempt to obtain the most reliable set of data possible. Regardless of your profession, political persuasion or understanding of finance and economics, these facts continued on page 24

The United States continues to remain a top destination for foreign buyers as international purchases surged by $16 billion this year, one of the highest increases in recent years, according to the National Association of Realtors (NAR) 2011 Profile of International Homebuying Activity. According to the survey, total residential international sales in the U.S. for the past year ending March 2011 equaled $82 billion, up from $66 billion in 2010. Total international sales were split evenly between non-resident foreigners and recent immigrants, while combined total domestic and international existing-home sales in the U.S. were $1.07 trillion. “The U.S. has always been a desirable place to own property and a profitable investment,” said National Association of Realtors (NAR) President Ron Phipps, broker and president of Phipps Realty in Warwick, R.I. “In recent years we have seen more and more foreign buyers coming here to take advantage of low prices and plentiful inventory. In addition to the advantageous market conditions, Realtors in this country have a global perspective and experience in working with clients from different cultures and real estate practices, helping them bring value to their international clients.” Historically, foreign buyers have been attracted to property ownership in the U.S. for a number of reasons. U.S. homes are generally less expensive than comparable foreign properties, homes in this country are viewed as a secure investment, and the U.S. market offers rental opportunities and long-term appreciation potential. More recently, Realtors have noticed new factors motivating foreign buyers. Many U.S. colleges and universities have a significant number of international students, and some foreign families are purchasing U.S. properties in college areas so their child has a place to live. Another source of international demand is foreign executives temporarily working in the U.S., some of whom prefer to purchase a residence instead of renting. “Besides the strength of the dollar and the general economic trends in the U.S., international buyers are also recognizing the benefits of home ownership in this country, especially in the case of recent immigrants,” said Phipps. “Many foreigners perceive owning a home here as an

important accomplishment in their efforts to become established in this country.” According to the 2011 Profile of International Homebuying Activity, recent international buyers came from 70 different countries, up from 53 countries in 2010. For the fourth consecutive year, Canada was the top country of origin, with 23 percent of sales to foreigners. China was the second most popular country of origin, with nine percent of international sales this year. Tied for third were Mexico, the U.K., and India. Argentina and Brazil combined reported an increase in foreign sales with five percent, up from two percent in 2010. The top five countries of origin accounted for 53 percent of international transactions in 2011. The average price paid by an international buyer was $315,000 compared to the overall U.S. average of $218,000. However, 45 percent of international purchases were under $200,000. This price segment has grown significantly over the years, most likely due to overall price declines in the U.S. as well as the strengthening of some foreign currencies. Almost every state had at least one international transaction in the past year. The four states with the heaviest concentration of international buyer activity have remained the same over the past five years. Florida had 31 percent of total international transactions this year, the most of any state. California had 12 percent, Texas had nine percent, and Arizona rounded out the top four with six percent of international transactions.

Reps. Gary Miller and Brad Miller Sponsor Home Construction Lending Act Rep. Gary Miller (RCA), Rep. Brad Miller (D-NC) and 29 other original co-sponsors have introduced bipartisan legislation—HR 1755, the Home Construction Lending Regulatory Improvement Act of 2011—aimed at restoring the flow of acquisition, development and construction (AD&C) credit to the housing sector to help spur job growth, support a recovery in the housing market and keep the economy moving forward. “We commend Reps. Gary Miller and Brad Miller for championing a legislative solution aimed at ending the freeze in housing production credit that has forced countless home building firms across the nation to shutter their doors, resulting in grave repercussions for job growth and the overall economy,” said National Association of Home Builders (NAHB) Chairman Bob Nielsen, a home builder from Reno, Nev. The credit crunch has taken an enormous toll on the nation’s economy, with job losses felt most acutely in the housing sector, where more than 1.4 million construction workers have been idled since 2006. Factoring in the effect of the

housing plunge on industries that provide materials and services to home builders, the total impact of the housing slump has been the loss of more than three million jobs and $145 billion in wages in all housing-related industries. HR 1755 would address specific regulatory obstacles to the credit needs of the nation’s homebuilders. In a letter to fellow lawmakers seeking support for their bill, Reps. Gary Miller and Brad Miller said that “one of the major reasons for this lack of credit is the overly restrictive actions by banking regulators which have hindered federal and state chartered banks and thrifts’ ability to make and maintain loans to qualified small home builders that have viable projects.” To rectify this situation, the legislation would grant authority and guidance to federal and state banking regulators to ensure that financial institutions that provide financing to America’s homebuilders are permitted to make loans, restore liquidity and provide stable financing to the residential housing sector.

Florida, New York and California Top Nation’s Mortgage Fraud States



FTC Returns $1.5 Million to Consumers From Lender Charged With AntiHispanic Discrimination

Web: 23


An administrator working for the Federal Trade Commission (FTC) has mailed 3,162 refund checks totaling approximately $1.5 million to borrowers allegedly harmed by Golden Empire Mortgage Inc. and Howard D. Kootstra. The refund checks stem from a lawsuit the FTC filed against Golden Empire and Kootstra, alleging that they illegally charged Hispanic consumers higher prices for mortgage loans than nonHispanic white consumers—price disparities that could not be explained by the applicants’ credit characteristics or underwriting risk. A settlement order imposed a $5.5 million judgment that was suspended when the defendants paid $1.5 million for consumer redress. The settlement order bars the defendants from discriminating on the basis of national origin in credit transactions and requires Golden Empire to establish and maintain a policy that restricts loan originators’ pricing discretion, a fair lending monitoring program, a program to ensure the accuracy and completeness of their data, and employee training programs. 

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

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

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

 JUNE 2011

Reported incidents of subscriber-verified mortgage fraud and misrepresentation by professionals in the mortgage industry in the U.S. have decreased from 2009 to 2010, according to a new report released by the LexisNexis Mortgage Asset Research Institute (MARI). Florida, ranked number one in 2009, is once again first place in the country for reported mortgage fraud and misrepresentation based on the Mortgage Asset Research Institute Fraud Index. Florida also has just over three times the expected amount of reported mortgage fraud and misrepresentation for its origination volume. New York remained in second place, followed by California in third. The 13th Periodic Mortgage Fraud Case Report examines the current state of subscriber-verified residential mortgage fraud and misrepresentation in the U.S. committed by industry professionals, based on data submitted by LexisNexis Mortgage Asset Research Institute subscribers. Reports of fraud and material misrepresentation submitted to LexisNexis MARI decreased 41 percent from 2009 to 2010, the first time in several years there was a decrease. This decrease does not necessarily correlate to actual occurrences of mortgage fraud, which are still rising according to several industry sources, including Mortgage Fraud Suspicious Activity Reports (SARs) submissions. The decline brings the number of cases reported to the LexisNexis Mortgage Asset Research Institute in 2010 to the same level (by less than half a percentage point) as the number of reported cases in 2006. The decrease in reports is believed to be attributed to several factors, including a decrease in loan origination volumes, fewer resources available to investigate and report incidents and new and stronger Financial Crimes Enforcement Network (FinCEN) requirements that encourage professionals to report on suspected fraud.

“The data suggests that in 2010 there was a decrease in the number of verified incidents of fraud reported to the LexisNexis Mortgage Asset Research Institute. While this is a noticeable decrease, we believe it can be attributed to a variety of factors, including the post-economic crisis mortgage fraud landscape,” said Jennifer Butts, LexisNexis Mortgage Asset Research Institute manager of data processing and co-author of the report. “We are seeing the convergence of several factors, including decreasing loan origination volumes and fewer resources available to investigate and report incidents of fraud as discovered.” “Mortgage fraud has become more complex and harder to verify using traditional methods,” said Denise James, LexisNexis Risk Solutions director of real estate solutions and co-author of the report. “Mortgage businesses are quickly trying to implement new procedures to detect emerging frauds while, at the same time, focusing their energies on recovering the huge financial losses of recent years.”

value nation

JUNE 2011 



continued from page 22

must be sobering, if not alarming. We because few appraisers get windfalls simply cannot continue on this road. from participating in fraudulent pracThere are those, including myself, who tices. Most do it only to preserve their say that what we see above is the root job, based upon my inside information cause of the financial woes we have into the profession. experienced during the current ecoWhat can be done to prevent appraisnomic crisis. er fraud? First, I submit to you, given the In relating the above facts to the above scenario, that most appraisers who appraisal profession, it is difficult to be commit fraud while performing precise as to what part of the corruption appraisals do not do it because they want the evaluation profession actually bears to. They are lured into it in order to pay responsibility for. It could their bills and to continue be said that in all appraispracticing their profesal fraud, there were others sion. If they believed that who were equally complictheir client wanted a nonit in each transaction. Even inflated, fair and honest if this is the case, the appraisal, most would be appraiser is still commitrelieved and provide just ting appraisal fraud when that. We must begin sendhe or she submits an ing them that message. appraisal that is known to Recently, there has provide false opinions. The been progress made in MARI report states that 33 this direction. New regupercent of mortgage fraud lations are in place, is committed by appraiswhich are intended to “The MARI report ers. Given my experience states that 33 percent prevent lenders from in the appraisal profession, pressuring appraisers to of mortgage fraud is I see this as a reasonable inflate values. More estimate and accept it as a committed by apprais- should be done. There basis for addressing ers. Given my experi- are still appraisers who appraisal fraud for purpos- ence in the profession, fear for their jobs if they es of this column. I see this as a reason- do not hit some predeterIf one-third of the mined numbers. This able estimate …” mortgage fraud is caused must stop. by appraisers and if the True appraiser indeannual cost of fraud is $14 billion as it pendence and fair compensation will go was in 2009, that equates to our pro- a long way toward obtaining accurate fession costing our economic system appraisals. Most appraisers who work somewhere in the neighborhood of $5 within a professionally-managed system billion per year. We have approximate- and believe that their client wants him ly 100,000 licensed appraisers within or her to provide a fair, unbiased and the industry, meaning that each accurate appraisal will do so. appraiser costs our system $50,000, on the average, per year. I would estimate Charlie W. Elliott Jr., MAI, SRA, is president of that the average appraiser, after Elliott & Company Appraisers, a national real expenses, makes no more than estate appraisal company. He can be reached $50,000 per year. That includes the ill- at (800) 854-5889, e-mail gained compensation received by or visit his company’s Web site, www.appraisalthose who perpetrate fraud. I say this

elite performer

continued from page 21

sonal goals. We all know the 80/20 rule—20 percent of the people are getting 80 percent of the business. Are you in that motivated group of 20 percent? So what builds and maintains your internal motivation? What are your external incentives? How can you strengthen and build your personal motivation as a priority? Do not let incentives replace motivation. Instead, let your motivation “by nature” create those incentives without you even thinking about it. Motivation comes from true happiness in what you do. The result of happiness in the workplace is success in meeting your per-

sonal goals and providing better service to your clients and business partners. Happy clients and business partners create ongoing and stable success. Take pride in what you do and do the right thing even when no one is looking. Be an Elite Performer! Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and 2010-2011 president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431 or e-mail or visit

Major Wholesaler Launches Broker-Centric Branch Program Real Estate Mortgage Network Inc. (REMN), a national mortgage lender based in River Edge, N.J., has announced the launch of Menlo Park Funding, a new branch opportunity for select independent brokers and bankers. Menlo Park Funding will be the fourth business channel in REMN’s existing wholesale, retail and consumer direct divisions. “The original thought for Menlo Park Funding was to create a business channel for independent brokers that are currently doing business with REMN and having a tough time navigating the new rules for our industry,” said Joe Amoroso, Menlo Park Funding’s national sales director. “With all the changes that have gone on in the broker world with licensing, disclosures and new compensation rules, many brokers have felt challenged, especially within the last year. Being that REMN is a major wholesaler with our brokers having a huge allegiance to us, we wanted to figure out a way to help those brokers who felt particularly challenged.” “With Menlo Park Funding, we’ll be partnering with brokers who already share REMN’s commitment to quality and customer service, but need some assistance navigating the intricacies of the industry that weren’t in place when they first began doing business,” said Amoroso. “We think the broker business is here to stay. The big banks can’t handle the volume or offer the same customer service levels that small mortgage bankers and mortgage brokers provide.” REMN’s commitment to customer service, quality, and education have helped the company become not only one of the largest independent mortgage lending firms in the U.S., but also one of the most respected in the industry. In addition to helping brokers adjust to compliance changes and bonding requirements, those who join Menlo Park Funding will have access to REMN’s comprehensive training resources to help ensure associates are up to speed on industry and product changes. “Menlo Park Funding has gone so well with the branches that we originated through our wholesale division, that

we decided to open it up to brokers that aren’t already REMN customers,” said Amoroso. “They too want access to a national mortgage banking company with IT support, training, compliance, administrative and help desk support, as well as our same day turn-times on new file submissions, which is always a favorite with our current brokers. Existing brokers that make the switch to Menlo Park Funding maintain the same account executives and underwriters that they would normally work with if they were already partnering with REMN as a broker.” Recently, REMN has opened eight Menlo Park Funding branches in the Northeast with more offices slated to open across the country during the second and third quarters of 2011. “Menlo Park Funding is not in lieu of our wholesale business,” said Amoroso. “Wholesale still remains one of our core businesses and that will continue to be. I’m very bullish on the mortgage brokerage business. We currently have nearly a thousand brokers who are actively sending us business. REMN has signed up more brokers in the last month than we’ve signed up in the previous three months combined!”

PRMI Implements PLATINUMdata’s REALview for Quality Control

PLATINUMdata Solutions, a provider of comprehensive appraisal review and collateral valuation technologies, has announced that Primary Residential Mortgage Inc. (PRMI), a nationwide mortgage lender with offices in 48 states, has implemented REALview, PLATINUMdata’s automated appraisal quality control technology. By implementing REALview, PRMI is not only safeguarding itself against the inaccurate or fraudulent appraisals that can result in fines, fees and possible buybacks, but also reducing appraisal underwriting time by roughly 50 percent per file. Federal regulators have responded to the detrimental effects of compromised valuations with a number of new regulations and guidelines, as well as noncompliance fines and fees that can

cost lenders tens of thousands of dollars per violation. The Dodd-Frank Act has established new regulations, and the Interagency Appraisal and Evaluation Guidelines have been completely revised with new stipulations, as well. “Your evaluation of an appraisal is only as good as your data,” said Cheri Bruno, director of underwriting for Primary Residential Mortgage Inc. (PRMI). “One of the reasons we chose REALview is because it provides the highest quality data, which is a big assurance for us.” REALview’s automated process reviews all of the USPAP (uniform standards of professional appraisal practice) guidelines and the specific data points within the appraisal forms. REALview also cross references the appraiser’s license status, in addition to integrating public record and other local market residential information in its analysis to validate an appraised value. “The industry is preoccupied with all of the new guidelines and regulations, like the Dodd-Frank Act and the new Interagency Guidelines, but that doesn’t mean lenders want to sacrifice cost-efficiency or timeliness in their pursuit of quality,” said Arturo Garcia, chief operating officer of PLATINUMdata. “We’re happy to provide quality-focused lenders like Primary Residential Mortgage the technology power and data quality they require, while also providing the speed, economy and reliability that benefits their internal processes and bottom line.”

Branch Pioneer Daniel Jacobs Launches RFC’s Retail Branch Division

REMN Continues Its Expansion on to the West Coast

 JUNE 2011

continued on page 28

Are you a “Mortgage Hero” or know of anyone who might be? We want to hear from you if you’ve completed the FREE Military Family Housing Education Course as Mortgage Heroes deserve to be recognized for their outstanding service to America’s servicemen and servicewomen. Please send a short bio to MFHE Program Manager Beverly Frase at



Real Estate Mortgage Network Inc. (REMN), a national mortgage lender based in River Edge, N.J., has continued its West Coast expansion with the opening of a new office in the San Diego area of Carlsbad, Calif., and the addition of three new team members. The new office will better help REMN service the needs of southern California’s future and existing homeowners, real estate professionals and residential builders. REMN’s new office will be staffed by three experienced mortgage professionals, all dedicated to REMN’s commitment to customer service, quality and honesty in helping people navigate the mortgage process. Kevin Hoyt, REMN’s new Western regional retail

We all love to read about local heroes who saved the day, saved a home, or saved a life. Invariably, the “hero” is reluctant to be labeled, saying “I just did what needed to be done.” Mortgage Heroes fit that bill, unwilling to come forward for the recognition they deserve, yet making a difference in the lives of every military client they assist. When the Mortgage Heroes at Kentucky Neighborhood Bank (KNB) in Radcliff, Ky. heard about the USA Cares Military Housing Specialist course, designed to provide a clear understanding of how to work with military borrowers, they were eager to take it and get certified. Not only did all their loan officers take the course, their entire lending staff signed up! Even though they’ve been skillfully serving their military clients for many years, Loan Officer Ken Dozer remarked after completing his exam, “Everyone who touches a loan should take this course!” Loan Officer Ben Mendoza of Frost Mortgage Group in Albuquerque N.M. feels the same. He’s quite committed to this special group of men and women he loves to help. It’s very clear to him that the job they do each day is a sacrifice for his own freedom, and he’s determined that their work won’t go unnoticed. “I’m intricately familiar with VA guidelines and passionate about serving this special client,” said Mendoza. His ability to provide the quality help they’ve earned and deserve is his way of giving back. The branch offices of Pioneer Services, the Military Banking Division of MidCountry Services, have stepped up their support to military clients. Positive brand awareness in the military market and great customer service has resulted in some inspiring phone calls over the past several months. One of the more memorable ones for Loan Officer Steve Flom was from a soldier who called specifically because, in his words, “I really like Pioneer! The fact I might be able to get a VA loan with their help is like this big weight has been lifted from my chest.” Flom said, “I have to admit … I got a little choked up. I told him that his appreciation cannot possibly match our appreciation for the sacrifices he’s made for our nation.” Pioneer’s Director of Marketing Randy Freese, said, “Having worked with USA Cares so often in the past, we knew this program would focus on the families first. It has allowed us to give our customers the most accurate and useful information out there, while also helping to prevent any surprises during the application process.” That appreciation is why all of their frontline associates and loan officers have gone—and will continue to go—through the USA Cares Military Housing Specialist program, and why they will continue to find ways to change lives, one military service member at a time. Rachel Donovan of Legacy Mortgage in Albuquerque N.M. remembers “waking up to news that the Twin Towers were attacked and watching in horror as the first, then second tower plunged to the ground. I found my American flag, went out to my mailbox and attached it so that it flew freely. Shortly after, a veteran walking down the road stopped by my flag, stood at attention and saluted it, then continued down the street. I knew, at that time, my life would change. I had been a mortgage loan officer for more than 11 years, but wanted to do more to serve our country as our soldiers were lining up by the hundreds to enlist in defense of our nation. I wanted to help where I could.” It’s like the little boy on the beach, throwing stranded starfish back into the sea amid the naysayers who claimed he couldn’t possibly make a difference to the desperate creatures, there were just too many. As he stooped to toss one more starfish back into the water, he said, “Well, it made a difference to that one.” 

Residential Finance Corporation (RFC) has announced the launch of its retail branching division, ProLending Network. The new division offers branch managers the speed and economic advantages of a large, nationwide lender with the personal service and attention required to build a solid business in today’s marketplace. The ProLending Network retail branching division, which will be led by President Daniel Jacobs, officially opened in January 2011 and has 11 branches in various stages of opening across the country. Founded in 1997, RFC has built a successful business through its call center locations in Ohio and Florida; the branching operation will build on the company’s experience and success. Retail branches will close and fund loans through RFC’s diversified mortgage banking platform. “After nearly a year of due diligence and working with the top consultants in the industry, we determined the branching model to be an ideal fit for RFC. It allows us to leverage our award-winning platform of best-in-

class banking operations, marketing, technology, training and finance to provide a truly unique and unparalleled parent company for highly experienced branch managers,” said Michael Isaacs, chief executive officer of RFC. “With ProLending Network, we have been able to combine our extensive mortgage banking experience with the best management team, technology and mortgage industry know-how. The platform gives proven entrepreneurs an option that not only alleviates their risk concerns but gives them the freedom to do what they do best—develop relationships and originate loans.” ProLending Network President Jacobs has more than 16 years of mortgage industry experience, including many as chief executive officer of one of the largest and most successful branching companies, 1st Metropolitan Mortgage. Purchased in 2009 at its peak 1st Metropolitan boasted 200 branches around the country, originating $4 billion per year. “Our goal was to build the highest quality retail branch platform around the best talent in the industry,” Jacobs said. “This Dodd-Frank compliant platform has the necessary structure, people and technology to succeed in the new mortgage banking environment and attracts entrepreneurs who want to maintain their relationship-based originations without the risk and hassles of ownership.” ProLending Network’s paperless origination model will allow the company to consistently underwrite in less than 24 hours and close a loan, on average, within 18 days of disclosure. “With five warehouse lines, the capacity to fund over six times our current volume, and an lending operations team that operates under strict, established service level agreements to meet the needs of our originators and their referral sources to ensure we close loans on time, every time,” Jacobs said.

Ability-to-Repay: Regulating or Underwriting? (Part I)

contain certain risky features and limits points and fees on the loan. Furthermore, one feature of a higher-risk mortgage loan (i.e., subject to enhanced appraisal requirements under Dodd-Frank § 1471) is the loan may not be a QRM.9 (Under the Dodd-Frank Act § 941, a “qualified residential mortgage” may not be broader in scope than a QM as defined in the Rule.) I will provide an outline, followed by some elucidation of the implications and dimensions of the Rule.

Four options “I like not fair terms and a villain’s mind.” —William Shakespeare, The Merchant of Venice (Act I, Scene III) There are four options to the determination of compliance with the Rule. The Rule refers to these origination options as “methods” and equips each method with a description of: (1) Limits on the loan features or term; (2) Limits on points and fees; (3) Underwriting requirements; and (4) Payment calculations. Option #1: General ability-to-repay standard A creditor can meet the general ability-to-repay standard or test by:  Considering and verifying the following eight underwriting factors: 1. Income or assets relied upon in making the ability-to-repay determination; 2. Current employment status; 3. The monthly payment on the mortgage; 4. The monthly payment on any simultaneous mortgage; 5. The monthly payment for mortgage-related obligations; 6. Current debt obligations; 7. The monthly debt-to-income ratio, or residual income; and 8. Credit history.  Underwriting the payment for an adjustable-rate mortgage (ARM) based on the fully-indexed rate.

By Jonathan Foxx 26

JUNE 2011 


“Then,” said Poirot, “having placed my solution before you, I have the honour to retire from the case.” —Agatha Christie, Murder on the Orient Express1 On May 11, 2011, the Federal Reserve Board (FRB) issued a Proposed Rule to implement ability-to-repay requirements for closed-end residential loans.2 The Rule implements Section 1411, Section 1412, and part of Section 1414 of the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act of 2010 (Dodd-Frank Act).3 Comments on the Rule are to be received by no later than July 22, 2011.4 Having published the proposed Rule, the FRB will soon retire from its involvement in this matter, because it will hand over its rule-making authority in the subject statute to the Consumer Financial Protection Bureau (CFPB) on July 21, 2011. Thus, the promulgation of the final Rule will be under the aegis of the CFPB. In this article, we will explore some of the salient features of this Rule, noting particularly that, as a revision to Regulation Z (the implementing regulation of the Truth-in-Lending Act [TILA]), it requires creditors to determine a consumer’s ability-to-repay a mortgage before making the loan and would also establish minimum mortgage underwriting standards. The Rule applies to any consumer credit transaction secured by a dwelling, except an open-end credit plan,5 timeshare plan, reverse mortgage or temporary loan or “bridge” loan with a term of 12 months or less. It appears that the Rule applies to purchase money and refinances, but not modifications of existing mortgages. There is a prohibition on prepayment penalties unless the mortgage is a prime, fixed rate, qualified mortgage and unless the amount of the prepayment penalty is limited. Complying with the requirements of the ability-to-repay Rule is essential, because borrowers in a foreclosure proceeding will likely claim that the creditor failed to comply with the Rule as a defense by way of recoupment or set off, without regard to the normal statute of limitations under TILA.6 A violation of the Rule subjects the creditor to the TILA civil monetary penalties, plus the same enhanced civil remedies that apply to violations of TILA’s high-cost loan rules,7 and TILA also would authorize state attorneys general to bring actions for violations of the Rule for a period of up to three years.8 A loan that is a covered transaction must qualify, among other things, as a qualified residential mortgage (QRM) if the creditor wishes to include a pre-payment penalty in the loan. The Rule provides a presumption of compliance with the ability-to-repay requirements if the mortgage loan is a QRM, which does not

Option #2: Qualified mortgage (QM) A creditor can originate a “qualified mortgage,” which provides special protection from liability. The FRB is soliciting comment on two alternative definitions of a “qualified mortgage.” Alternative #1: Provides a legal safe harbor and defines a “qualified mortgage” as a mortgage for which: • The loan does not contain negative amortization, interest-only payments, or a balloon payment, or a loan term exceeding 30 years; • The total points and fees do not exceed three percent of the total loan amount; • The income or assets relied upon in making the ability-to-repay determination are considered and verified;10 and • The underwriting of the mortgage (a) is based on the maximum interest rate that may apply in the first five years, (b) uses a payment scheduled that fully amortizes the loan over the loan term, and (c) takes into account any mortgage-related obligations. Alternative #2: Provides a rebuttable presumption of compliance and would define a “qualified mortgage” as including the criteria listed under Alternative #1 (above), as well as additional underwriting requirements from the general ability-to-repay standard (see Option #1). In any event, under Alternative #2, the creditor would also have to consider and verify: • The consumer’s employment status; • The monthly payment for any simultaneous mortgage; • The consumer’s current debt obligations; • The monthly debt-to-income (DTI) ratio or residual income; and • The consumer’s credit history. Option #3: Balloon-payment qualified mortgage This option is obviously meant to preserve access to credit for consumers located in rural or underserved areas where creditors may originate balloon loans to hedge against interest rate risk for loans held in a portfolio. Under this option, a creditor may make a balloon-payment qualified mortgage with a loan term of five years or more by: • Complying with the requirements for a qualified mortgage; and • Underwriting the mortgage based on the scheduled payment, except for the balloon payment. Option #4: Refinancing of a non-standard mortgage A creditor may refinance a “non-standard mortgage” with “risky” features into a more stable “standard mortgage.” It has been asserted that this option is meant to

preserve a consumerâ&#x20AC;&#x2122;s access to a streamlined refinance that â&#x20AC;&#x153;materiallyâ&#x20AC;? lowers the mortgage payment. Under this option, a creditor complies by: â&#x20AC;˘ Refinancing the consumer into a â&#x20AC;&#x153;standard mortgageâ&#x20AC;? that has limits on loan fees and that does not contain certain features such as negative amortization, interest-only payments, or a balloon payment; â&#x20AC;˘ Considering and verifying the underwriting factors listed in the general ability-to-repay standard, except the requirement to consider and verify the consumerâ&#x20AC;&#x2122;s income or assets; and â&#x20AC;˘ Underwriting the â&#x20AC;&#x153;standard mortgageâ&#x20AC;? based on the maximum interest rate that can apply in the first five years.

Just a few more laws, please! â&#x20AC;&#x153;Laws are like cobwebs, which may catch small flies, but let wasps and hornets break through.â&#x20AC;? â&#x20AC;&#x201D;Jonathan Swift, Thoughts on Various Subjects There are other provisions incorporated into the Rule,11 such as: â&#x20AC;˘ Implementing the Dodd-Frank Actâ&#x20AC;&#x2122;s limits on prepayment penalties. â&#x20AC;˘ Lengthening the time creditors must retain records that evidence compliance with the ability-to-repay and prepayment penalty provisions. â&#x20AC;˘ Prohibiting evasion of the Rule by structuring a closed-end extension of credit as an open-end plan.

Strangers in a familiar world â&#x20AC;&#x153;Because some stories end, but old stories go on, and you gotta dance if you want to stay ahead.â&#x20AC;? â&#x20AC;&#x201D;Terry and Lyn Pratchett, The Amazing Maurice and his Educated Rodents12 Letâ&#x20AC;&#x2122;s elucidate the aforementioned options, keeping in mind that this is a very complex statute and by offering this broad overview, I am concomitantly constrained to a selective approach in evaluating key principles and features. Often, it is not merely what is included from discourse, but what is excluded, that militates against a comprehensive understanding of a subject. For guidance, I urge you to seek advice of a competent, risk management professional. Option #1: Ability-to-repay13 This is an option that will be carefully reviewed by plaintiffâ&#x20AC;&#x2122;s counsel in an action


â&#x20AC;&#x201D; the industryâ&#x20AC;&#x2122;s leading marketing company.

2. Has a loan term of no more than 30 years. 3. Has total points and fees that do not exceed the permitted percentage of the total loan amount (discussed below). 4. The creditor underwrites the loan by including all mortgage-related obligations. 5. The creditor underwrites using the maximum interest rate that will apply at any time during the first five years following consummation (assuming, of course, that the interest rate for an ARM will rise as quickly as possible, taking any contractual rate caps into consideration) and periodic payments of principal and interest that will repay either the outstanding principal over the remaining loan term once the maximum interest rate is reached or the loan amount as of the date of consummation over the loan term. Two alternatives are given: In the first alternative, to obtain a legal safe harbor, the creditor must consider and verify the borrowerâ&#x20AC;&#x2122;s current or reasonably expected income or assets to determine the borrowerâ&#x20AC;&#x2122;s repayment ability; and, in the second alternative, to obtain a rebuttable presumption of compliance, the creditor must consider and verify the borrowerâ&#x20AC;&#x2122;s current or reasonably expected income or assets (i.e., other than the value of the dwelling in question), the borrowerâ&#x20AC;&#x2122;s current employment status (assuming the creditor relies on employment income), the borrowerâ&#x20AC;&#x2122;s monthly payment on any simultaneous loan, the borrowerâ&#x20AC;&#x2122;s current debt obligations, the borrowerâ&#x20AC;&#x2122;s monthly DTI or residual income, and the borrowerâ&#x20AC;&#x2122;s credit history. It should be noted that the second alternative is for the most part similar to the ability-to-repay test. There are some important aspects of Option #2 that should be considered. With the safe harbor alternative, the FRB states that a QM will be deemed to have complied with the ability-to-repay test; therefore, the only way that the borrower can get past the safe harbor is by proving that the loan is not a QM. If this occurs, the burden will shift to the creditor or assignee to demonstrate that the loan meets the ability-to-repay test. With the presumption of compliance alternative, the FRB states that a QM is presumed to have complied with the ability-to-repay test; which means that, even if the mortgage is a QM, the borrower can rebut the â&#x20AC;&#x153;presumption of complianceâ&#x20AC;? with evidence that the mortgage did not meet the ability-to-repay test. Part of the basis of the FRBâ&#x20AC;&#x2122;s proposal is to determine, through comments, which conditions should apply, either the safe harbor or the presumption of compliance. In my opinion, creditors and similarly situated entities (i.e., mortgage lenders, investors, and servicers) would probably favor the safe harbor approach because of the protection from liability that it will afford. On the other hand, consumer advocacy groups and the plaintiffâ&#x20AC;&#x2122;s bar will favor the presumption of compliance because that provides the opportunity to challenge the ability-to-repay for any mortgage, particularly those in imminent foreclosure.

Points and fees Embedded in the QM requirements is a test for points and fees, the purpose of which is to determine what does or does not constitute a QM. The Rule would limit the total points and fees to a specific percentage of the total loan amount in order to create a threshold to identify a QM. The term â&#x20AC;&#x153;points and feesâ&#x20AC;? uses the definition of that term provided in the revised high-cost mortgage rules, which include the following: A. All finance charges Regulation Z15 (except interest; time-price differential; mortgage insurance premiums assessed under a federal or state agency program; mortgage insurance premiums not in excess of the amount payable continued on page 29


 JUNE 2011


1. Provides for regular periodic payments (except for payment changes that result from rate changes in an ARM or step-rate loan) that do not result in an increase in principal, allow the borrower to defer repayment of principal (i.e., an interest-only loan or partially amortizing loan), or result in a balloon payment (except for the special balloon-payment QMs). A single-payment loan cannot be a QM.


/RDQ2IĂ&#x20AC;FHUV Know Who   :H$UH

Option #2: Qualified mortgage (QM)14 Perhaps it is best to understand the QM as a mortgage that lacks (or is perceived to lack) risk features. It consists of six elements, as follows: 


to challenge a creditorâ&#x20AC;&#x2122;s compliance with the Rule. Consequently, enforcing compliance with the Rule will require fully vetted, tested and continually updated and written procedures to govern every aspect of the application and underwriting process. Without clear and unambiguous policies and internal enforcement of appropriate policies and procedures, the creditor is allowing exposure to such a challenge. This option contains rigorous underwriting criteria and requires unmitigated, fact-based evaluations. Option #1: The ability-to-repay test is a somewhat unstable (due to the invariant rigors of procedural compliance) though a relatively favorable methodology for the creditor, even if the loan flow process leaves very little room for error.

heard on the street

Oil and Home Prices: The Real Story

JUNE 2011 



Are we imagining the fact that there seems to be more natural disasters than ever? Blizzards, earthquakes, hurricanes and floods seem to dominate the headlines. Certainly, these events have a major effect upon the economy. Case in point, even though the price of oil dropped substantially in mid-May from its peak, gas prices did not drop as much because the floods in the nation’s midsection threatened refineries. And the price of gas is very important to our economic well-being. While certain stocks may benefit from $4 per gallon gas, the average consumer is hurt. When consumers are hurting, this means they slow down their purchases of larger ticket items such as houses, cars, furniture and more. This quote from CNN/Money says it best as gas prices are now gobbling up almost 10 percent of the income of the average American household. Obviously this will affect discretionary purchases … $368.09 per month on gasoline … that’s the average amount American households spent on gas in April, according to an exclusive analysis of data by the Oil Price Information Service for CNNMoney. The study, which compared average gas prices with median incomes nationwide, also showed that U.S. households spent nearly nine percent of their total income on gas last month. That’s more than double what the average American family spent just two years ago, when gas prices were hovering around $2.05 a gallon. “Gas prices have just skyrocketed,” said Fred Rozell, director of retail pricing at OPIS. We are not even sure why the stock market keeps falling when oil prices recede and rallying when oil prices rally. We understand that a certain segment of the economy benefits from higher oil prices and you can guess who. However, in the long run, higher oil prices translate into slower economic growth. At least initially, the stock market is reacting “perverse” to rational judgment. On the other side of the coin, an argument can be made that lower

housing prices will hurt the economy today, but help the economy in the long run. How can that be? Well, let us present an excerpt from a Washington Post article: Housing’s troubles may have a silver lining. If you’re a homeowner, the steep fall in prices is calamitous. But if you’re a future buyer, it’s a godsend. What we’re seeing is a massive wealth transfer from today’s older homeowners to tomorrow’s younger homeowners. From year-end 2006 to 2010, housing values fell $6.3 trillion, reports the Federal Reserve. Assuming there’s no sharp rebound in prices—a good bet—that’s $6.3 trillion the young won’t pay. Up to a point, the lower home prices merely deflate the artificial “bubble.” But there’s evidence that the declines transcend that. The National Association of Realtors routinely publishes a housing “affordability” index, which judges the ability of median families to buy the median-price home at prevailing rates. By this measure, existing homes are the most affordable since the index started in 1970. Young buyers “will be able to enter the housing market at bargain prices,” argues NAR economist Lawrence Yun. When home prices again rise, increases will parallel income gains, meaning that the relative burden of housing costs will remain roughly stable, Yun says. He expects only modest increases in rates. Crises pass and have unintended consequences. The young just might catch a much-needed break from this one. What a great time to be young— when purchasing a home is the most affordable it has been in more than 40 years! These low prices will hurt homeowners who are underwater today, but will set the stage for a much more robust housing sector for the next generation. I have said this again and again as the economy rebounds, household formulation will increase. Rents will go up. Housing affordability will be a factor in bringing housing back more quickly than anyone can continued on page 31

continued from page 25

manager, will be based out of this office and joins the company with more than 30 years experience in the lending industry. Laurie Peterson, the office’s branch manager, has more than 20 years industry experience, including roles in sales, operations and training capacities. Hoyt and Peterson are joined in the office by Nancy Sexton, who has been brought onto the team as the office’s first mortgage loan originator. “This new office in San Diego is just the latest example of REMN’s continued commitment to the retail side of mortgage industry. We see a tremendous opportunity for REMN’s customercentric approach to doing business in southern California and look forward to seeing our business, both wholesale and retail, grow across the country,” said Rick Floyd, managing director of retail sales for REMN Inc.

a la mode’s Mercury Network Named a UCDP Integration Platform by GSEs a la mode inc.’s Mercury Network has been listed as an appraisal submission platform for Fannie Mae and Freddie Mac’s Uniform Collateral Data Portal (UCDP). The UCDP is the single portal for the electronic submission of appraisal data files to Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs). The GSEs announced that UCDP will go live on June 27, 2011. Appraisal reports for all conventional mortgage loans delivered on or after March 19, 2012, must be submitted to the UCDP before the delivery date of the mortgage if the loan application is dated on or after Dec. 1, 2011 and an appraisal report is required. Mercury Network has been named as a solution to submit electronic appraisal data to UCDP on the GSEs Vendor Web page. a la mode has been deeply involved in the UCDP initiative since the beginning. They were the first and currently only vendor to release appraisal form-filling software for appraisers’ compliance with the program, and they will also offer a free platform for lenders who are not Mercury Network clients to submit to UCDP. a la mode will also host training conferences in dozens of cities nationwide for its appraiser customers, as well as host online training for lenders throughout the summer. “Frankly, we’ve heard from many lenders over the past few months who think they’re ready because vendors have told them they’ve got it under control,” said Sean Shiplet, chief operating officer of a la mode inc. “But when they take a closer look, it’s clear they’re not. For example, many lenders are still rely-

ing on appraisal data extracted from PDFs to satisfy the GSEs, but it is our understanding that this method will cause delays in their pipelines and they’ll be hit with file conversion fees on top of the delays. The Native XML straight from the appraisers’ desktops is easy to get, yet some lenders don’t know they even need it. Our training will address all of these pitfalls so a majority of the country’s lenders have smooth transitions to UCDP.”

Lenders One Partners With on Continuing Education Initiatives Lenders One Mortgage Cooperative, a national alliance of community mortgage bankers, correspondent lenders and suppliers of mortgage products and services, has announced it has a new preferred vendor, The firm will offer access to pre-licensure and state-specific continuing education to Lenders One members. “With our flexible and comprehensive course options, we can ensure that mortgage companies can meet their varied educational needs,” said Tycho Rosenfeld, chief executive officer and president of offers courses nationwide and in four formats: online instructor-led, classroom, online self-paced study and classroom equivalent. Pre-licensure and continuing education can be taken at any time and includes state-specific education. The pre-licensure education is divided into courses that can be taken in any order and can be completed in an online format in as few as five days. “More and more mortgage professionals are required to have a higher level of expertise and licensing that demonstrates their commitment to excellence in the industry,” said Scott Stern, Lenders One Mortgage Cooperative chief executive officer. “Our relationship with a proven and experienced provider such as affords our members easy access to the training they need for licensing and continuing education at every level. In this ever-changing, regulatory-centric climate, it is imperative that we ensure our members’ loan originators have access to everything they need to continue to provide the same quality, compliant service they always have, if not better.”

MRG Document Technologies Selected by Helena Community Credit Union for Doc Compliance MRG Document Technologies (MRG) has announced that Helena, Mont.-based Helena continued on page 31


continued from page 27

under policies in effect at origination under §203(c)(2)(A) of the National Housing Act [regardless of when or how paid]), provided that the premiums are automatically refundable on a pro rata basis upon notification of the satisfaction of the mortgage, or the mortgage insurance premiums are payable after loan closing. B. All compensation payable directly or indirectly to loan originators (i.e., third party mortgage brokers, table-funding brokers, and in-house loan officers). C. All items under Regulation Z § 226.4(c)(7) that are payable at or before the loan closing (other than tax escrows), unless the charge is reasonable, the creditor receives no direct or indirect compensation in connection with the charge, and the charge is not paid to an affiliate of the creditor. D. Premiums payable at or before loan closing for certain credit insurance or debt cancellation/suspension coverage, whether mandatory or optional. E. The maximum prepayment penalty that may be collected for the loan. F. The total prepayment penalty incurred if the loan is being refinanced by the current holder or servicer of the existing mortgage, or an affiliate of either. Points and fees do not include compensation paid to licensed persons who perform real estate broker services (so long as they are not compensated by a creditor, loan originator, or an agent of either); a servicer or its employees or agents, including those who negotiate loan offers or modifications for delinquent or defaulted loans or those in danger of delinquency or default; and, certain employees of manufactured home retailers. Having set forth a basic outline of what constitutes “Points and Fees,” the FRB provides two ways to account for them, the first caps them based on the loan amount tier (i.e., Points and Fees Cap: Based on Loan Amount Tier) and the second caps them based on a loan amount tier or formula (i.e., Points and Fees Cap: Based on Loan Amount Tier or Formula). For purposes of the QM Points and Fees Test, bona-fide third-party charges (other than includable mortgage insurance premiums) may be excluded so long as they are not paid to the creditor, a loan originator or an affiliate of either of them.16 And, up to two bona-fide discount points can be excluded if the interest rate before discount does not exceed by more than one percent the average prime offer rate (APOR)17 for a comparable transaction as of the date the interest rate is set for the discounted interest rate. But, if these discount points have not been excluded, then up to one bona-fide discount point can be excluded if the interest rate before discount does not exceed by more than two percent of the APOR for a comparable transaction as of the date the interest rate is set for the discounted interest rate.18

Loan originator compensation and third-party charges

Option #4: Refinancing of a non-standard mortgage25 A refinance of a non-standard mortgage into another mortgage is at the basis for this regulatory framework. The Rule provides for refinancing a “non-standard mortgage” into a “standard mortgage.” So let’s be clear by what is meant by these terms. A non-standard mortgage is a covered transaction that is an ARM with an introductory fixed rate for a period of one year or more (i.e., a 2/28 ARM), an interestonly loan, or a negative amortization loan. The Dodd-Frank Act refers to a “hybrid mortgage,” but the Rule uses the term “non-standard mortgage.” A standard mortgage is a covered transaction which, among other things, does not contain negative amortization, interest-only payments or balloon payments, and limits the points and fees. Essentially, the standard mortgage structure provides regular periodic payments that do not cause the principal balance to increase,26 does not allow the borrower to defer repayment of principal, and does not result in a balloon payment; the total points and fees do not exceed the permitted percentage of the total loan amount (see the previously mentioned Alternative #1 or Alternative #2); continued on page 30


Mortgage Branch Opportunities! Several Mortgage Companies With Banker and Broker Status To Choose From! With hundreds of mortgage branch employment opportunities out there, making a choice on who to sign up with is not an easy task. We are here to help!

Subscribe to Mortgage Brokers Network Daily Feed by Email

 JUNE 2011

Call Today! Toll Free 1-888-589-7048 or visit


Option #3: Balloon-payment qualified mortgage20 As mentioned above, this option is obviously meant to preserve access to credit for consumers located in rural or underserved areas.21 This kind of QM is a loan that generally qualifies as a QM, but also includes a balloon payment. Option #3 QM is not subject to the requirement that the loan be underwritten based on a fully amortizing payment schedule that takes into account all mortgage-related obligations and uses the maximum interest rate that may apply during the first five years after consummation.22 However, the Balloon-Payment Qualified Mortgage must satisfy the following requirements: (1) The creditor must determine that the borrower can make all of the scheduled payments, other than the balloon payment, from the borrower’s current or reasonably expected income or assets (not including the dwelling that secures the loan); (2) The scheduled payments are calculated using an amortization period (regardless of the actual loan term) that does not exceed 30 years and includes all mortgage-related obligations; (3) The loan term is five years or longer; (4) During the preceding calendar year, the creditor extended more than 50 percent of its total covered transactions that provide for balloon payments in one or more counties designated by the FRB as “rural” or “underserved;”

Option #3 is subject to certain requirements to which all QMs are subject; for instance, there must be regular periodic payments that do not result in an increase in the principal balance, the loan term may not exceed 30 years, the total points and fees may not exceed the permitted percentage of the total loan amount, and the loan must satisfy the same underwriting and verification requirements. 

As it relates to the QM Points and Fees Test, perhaps this is a good place to briefly discuss the role played by the recent revisions to TILA with respect to loan originator (LO) compensation.19 Compensation to LOs is included in the points and fees. However, compensation to an LO that cannot be attributed to a particular loan at the time of origination is not included in the points and fees. Examples of excluded compensation are compensation based upon the long-time performance of the LO, compensation based on the overall quality of the LO’s loan files, and the base salary of an LO who is the employee of the creditor. On the other hand, bona-fide third-party charges may be excluded (other than includable mortgage insurance premiums) as long as they are not paid to the creditor, a loan originator, or an affiliate of either of them.

(5) During the preceding calendar year, the creditor and its affiliates (a) extended covered transactions with loan amounts that aggregated to a tiered loan amount (see above: Alternative #1) or (b) loan amount tier or formula for fewer covered transactions (see above: Alternative #2);23 (6) (a) On or after the effective date of the final rule, the creditor has not transferred legal title to any covered transaction that includes a balloon payment (see above: Alternative #1) or (b) during the preceding and current calendar year, the creditor has not transferred legal title to any covered transaction that includes a balloon payment (see above: Alternative #2); and, (7) As of the end of the preceding calendar year, the creditor had total assets that did not exceed an asset threshold24 which is to be revised annually by the FRB based on movements in the Consumer Price Index (CPI).


continued from page 29

the loan term does not exceed 40 years; the interest rate is fixed for at least five years after consummation (this includes step-rate mortgages without a variable rate feature); and, the loan proceeds are used solely to pay off the outstanding principal balance on the non-standard mortgage and closing costs (including escrow amounts). The Rule introduces a new term to replace a term that has been in use for ARM adjustments for many years. Specifically, for ARMs with low, fixed introductory rates, the term “reset” has typically meant the time at which a low teaser rate converts to a fully-indexed rate, resulting in significantly higher monthly payments for homeowners. According to the Rule, the term “recast” is henceforth to be used in reference to the time at which fully amortizing payments are required for interest-only and negative amortization loans, on the basis that the term “reset” is more frequently used to indicate the time at which ARMs with an introductory fixed-rate convert to a variable rate.27 Consequently, the Rule uses the term “recast” to cover the conversion to less favorable terms and higher payments not only for interest-only loans and negative amortization loans, but also for ARMs.28 Option # 4 is available when: (1) A non-standard mortgage is refinanced into a standard mortgage, and (2) the following conditions are met:


(1) The creditor for the standard mortgage is the current holder or servicer of the non-standard mortgage; (2) The monthly payment on the standard mortgage is materially lower than the monthly payment on the non-standard mortgage;29 (3) The creditor receives the borrower’s written application for the standard mortgage before the non-standard mortgage is recast; (4) The borrower has no more than one payment more than 30 days late on the non-standard mortgage in the 24 months before the creditor receives the borrower’s written application for the standard mortgage; (5) The borrower has no payments more than 30 days late in the six months immediately before the creditor receives the borrower’s written application for the standard mortgage; (6) The creditor has considered whether the borrower is likely to default (a lower standard than “imminent default”) on the non-standard mortgage once it is recast; and (7) The creditor has considered whether the standard mortgage will prevent the borrower’s default.

What may yet come!

JUNE 2011 


“Then, long before we are ready, it moves on.” —Jacqueline Woods, If You Come Softly30 The Ability-to-Repay Rule is enormously complex and interlinks with numerous, other regulatory statutes. In this article, I have endeavored to provide a complex overview, but I have only grazed the surface of the requirements set forth in the FRB’s proposal. In analyzing an implementing regulation, often not only what is outlined, but also what is not outlined may raise significant and substantive issues of procedures, policy and the law. As the proposed Rule makes its way toward its new home at the CFPB, with the comment period ending July 22, 2011, it would be prudent to consult with risk management professionals to determine precisely how and by what means and metrics the Rule will be achieved through a coherent loan flow process. In the next article in this two-part series, we will dig a little deeper into those eight factors that constitute the ability-to-repay, as well as explore many other features of the Rule, including the limits on pre-payment penalties, the lengthening of the time creditors must retain records evidencing compliance with the ability-to-repay and pre-payment penalty provisions, the prohibition to evading the Rule by structuring a closed-end extension of credit as an open-end plan, the delineation of new terms, procedures and their resulting implications, and very importantly, the means by which the Rule claims to offer tools to prevent likely default and mitigate risk for creditors and others who arrange, negotiate, or obtain an extension of mortgage credit for a consumer in return for compensation or other monetary gain. 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—Christie, Agatha. Murder on the Orient Express, G. P. Putnam’s Sons, 1934. 2—Federal Register, Vol. 76, No. 91. Wednesday, May 11, 2011. Proposed Rules, 12 CFR Part 226, Regulation Z—Truth-in-Lending Act. [Regulation Z; Docket No. R–1417]. 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—It is worth noting that the Consumer Financial Protection Bureau (CFPB) will receive rule-making and examination authority over the “enumerated laws” on the transfer date of July 21, 2011, the Designated Transfer Date. See Designated Transfer Date, Bureau of Consumer Financial Protection, Federal Register, Vol. 75, No. 181 (09/20/10). The Designated Transfer Date must be between Jan. 17, 2011 and July 21, 2011, unless the Treasury Secretary determines that the orderly implementation of Title X is not feasible within 12 months; but, in no case may the Designated Transfer Date be later than Jan. 21, 2012. Accordingly, this rule-making will become a proposal of the CFPB and will not be finalized by the FRB. 5—Includes a closed-end home improvement loan on a vacation residence. 6—Op. Cit. 3 § 1413. 7—Under the Home Ownership and Equity Protection Act (HOEPA), a consumer has a right to rescind a transaction for up to three years after consummation when the mortgage contains a provision prohibited by a rule adopted under the authority of TILA § 129(l)(2). Any consumer who has the right to rescind a transaction may rescind the transaction as against any assignee. See: TILA §131(c). The right of rescission does not extend, however, to home purchase loans, construction loans, or certain refinancing with the same creditor. See: TILA § 125(e). 8—Op. cit. 3, §§ 1416, 1422. 9—Mortgages covered by the HOEPA amendments have been referred to as “HOEPA loans,” “Section 32 loans,” or “High-cost mortgages.” The Dodd-Frank Act now refers to these loans as “High-cost mortgages.” 10—Does not define a “Qualified mortgage” or “QM” to include a requirement to consider the consumer’s debt-to-income ratio or residual income. 11—These and other provisions will be explored in detail in Part II of this article. 12—Pratchett, Terry & Lyn Pratchett, The Amazing Maurice and His Educated Rodents, HarperCollins, 2001. 13—Regulation Z § 226.43(c). 14—Regulation Z § 226.43(e). 15—Regulation Z §§ 226.4(a) and (b). 16—The FRB has requested comment as to whether loan-level price adjustments to offset added risks, which are imposed by secondary market purchasers and passed through to borrowers in the form of points, should be excluded from the points and fees under this provision. 17—Required by the Dodd-Frank Act, effective April 1, 2011, if a jumbo loan’s APR exceeds the average prime offer rate (APOR) by 2.5 or more percentage points on the date the interest rate is set, then TILA requires the establishment of an escrow account for the payment of property taxes and any creditor-required premium for mortgage-related insurance, prior to consummation. For jumbo loans with an APR which does not exceed the APOR by 2.5 percentage points or more, this escrow requirement will no longer apply. 18—To be a bona-fide discount point, the calculation must both (1) be consistent with established industry practice, and (2) account for the amount of compensation that the creditor can reasonably expect to receive from secondary market investors for the loan. 19—Regulation Z § 226.36(a). 20—Regulation Z § 226.43(f). 21—A county is “rural” if it is not in a metropolitan statistical area (MSA) (or a micropolitan statistical area), contains no town with 2,500 or more residents, and is (a) either not adjacent to any metropolitan statistical area (or a micropolitan statistical area) or (b) is adjacent to an MSA with fewer than one million residents (or adjacent to a micropolitan statistical area). 22—TILA § 129D(d) authorizes an exemption from escrow requirements for certain creditors operating predominantly in rural or underserved areas and providing an exemption from escrow requirements for transactions secured by shares in a cooperative. 23—The FRB proposal solicits comments on an appropriate dollar amount or number of transactions. 24—Two billion dollars for calendar year 2011. 25—Regulation Z § 226.43(d). 26—The safe harbor offered by the FRB requires that a 10 percent or larger reduction in the monthly payment will meet the “materially lower” standard in reducing monthly payments. 27—The term “recast” is to be used in order to accommodate the proposed Regulation Z §§ 226.43(c) and (d). 28—For instance, an ARM recasts upon the expiration of the period during which payments based on the introductory fixed rate are permitted. An interest-only loan recasts upon the expiration of the period during which interest-only payments are permitted. A negative amortization loan recasts upon the expiration of the period during which negatively amortizing payments are permitted. 29—Op. Cit. 26. 30—Woodson, Jacqueline, If You Come Softly, Puffin Books, 1998.

heard on the street

the secondary market overview

continued from page 28

DocuTech and Axacore Partner on Customer Efficiency Solutions

envision, especially now that rates have acknowledge the pain that higher oil eased back. The two factors that must prices and lower housing prices are step in line for this to happen: causing our population today, we also would be remiss in not looking at what  We must create more jobs. The could be a brighter future. That being 244,000 jobs created in April were a said, the floods have receded and thus great sign, but this must be the aver- the refineries will no longer be threatage every month. ened. If supply and demand comes back into balance, we should be seeing  Credit standards must become loos- some easing of gas prices by the time er. This is that old Catch-22. Credit you read this article. That is, if the standards will not become loose speculators would just start purchasuntil real estate stops losing value. ing real estate instead of oil futures! Of Real estate does not stop losing course, we don’t expect any economic value until credit standards get loos- advisors to be taking my advice, but er. We had the same Catch-22 for we can always dream. There is no employment and real estate and it doubt that the speculators are influseemed like it would never get bet- encing the markets, especially comter, but it did. As jobs are created, modities. Otherwise, oil would not be people will buy and the recovery will this volatile. pull up real estate and credit standards will loosen up. We will not be Dave Hershman is a leading author for going back to the sub-prime days, the mortgage industry, with eight books but it would be nice to get qualified and several hundred articles to his credbuyers approved. it. He is also a top industry speaker. If you would like to stay ahead of what is We should also note that, in some happening in the markets, visit respects, higher oil prices can help the for a economy in the long run as well. free trial. Dave’s NewsletterPro Higher oil prices may force us to come Marketing System can be found at up with alternative energy sources and more quickly, paving the way for ener- he may be contacted by e-mail at gy independence. So, while we must


DataQuick Integrates MDA Lending Solutions, MDA MindBox Into One Operation

continued on page 44

e-mail: visit:


tired of non-per formi u o y Are RD MONEY LENDER ng

HAThen try PB FINANCIAL GROUP S? We have proven closing records

SPECIAL INTEREST: • Loan amounts from $100,000 to 2 million • N/O/O SFR, 1-4 units and apart – to 60% LTV IO / terms may vary • Commercial & Industrial – up to 60% LTV IO with terms up to 60 months • NO Doc and SISA available on n/o/o & invest. Properties • Purchase Money loans up to 65% LTV and in San Diego up to 70%, flips OK • Fico Problem – No Problem, We Are EQUITY BASED


CALL NOW!!! (323) 935-5555 Visit our web site: E-mail: NMLS #357614

 JUNE 2011

As a result of TPG Capital’s purchase of MDA DataQuick, MDA Lending Solutions and MDA MindBox in January, the three companies will integrate their operations effective immediately. The combined company, which will operate under the name DataQuick, will deliver advanced real estate information solutions powered by higher quality data, analytics and advanced decisioning. DataQuick provides lenders, servicers, real estate companies and secondary market investors with one source for customer-focused solutions across a national footprint. The capabilities of these formerly separate companies will be aggregated under one management team, under the direction of DataQuick President John Walsh. “While the property information businesses have always shared resources, integrating our operations will provide customers and business partners complete access to all of our capabilities,” Walsh said. “This integration will enable DataQuick to create innovative product solutions that com-


DocuTech Corporation, a provider of mortgage compliance documents, closing documents and initial disclosures for the mortgage industry, and Axacore, a privately-held provider of document imaging, fax and messaging solutions that are supported by highperformance Web servers and browser interfaces, have formalized a business partnership that saves time and trims overhead for lenders. “We have found that working with these two firms enables us to gather the information we need to complete a loan faster, to produce docs, and to manage thousands of origination files

with an electronic document management system,” said Jerry Schiano, president and chief executive officer at New Penn Financial. “These intuitive, easyto-use systems allow us to provide a better experience for borrowers, generate docs, help to keep us compliant with regulations, reduce our costs, and provide a quick return on investment.” Many lenders have gained the benefits of DocuTech and Axacore working together to bring efficiencies to their operations. The relationship is important because it will benefit clients through reduced overhead and improved service levels. “The combination of Axacore’s industry standard electronic document management system and our document services and compliance solutions brought efficiencies and improved workflow that helped reduce costs for many lenders,” said Scott Stuckey, chief operating officer of DocuTech. “The goal was to ensure that we make available to clients everything we can to help them fatten their bottom lines through faster turnaround times, improved efficiencies and removing paper from the loan origination process,” said Steve DeBlasio, national sales manager for Axacore. “We systematically capture and index DocuTech documents allowing simple and efficient version control of critical documents including GFEs and TILs.” 

Community Credit Union (HCCU) has selected MRG’s Miracle Online platform for its mortgage document compliance needs. HCCU serves four nearby counties through its three branches. The credit union selected MRG based on a referral from a fellow lender, as well its relationship with the credit union’s loan origination software (LOS). MRG’s integration with the LOS enables HCCU to utilize capabilities of its LOS that were not accessible through its previous document preparation provider, including the automatic export of data from the LOS into the doc prep system. The credit union also now has access to automated compliance tests such as state and federal high cost tests and fee thresholds that are intuitively run on loan files. “The transition to MRG’s MIRACLE Online has been seamless and its customer service is outstanding,” said Jessica Michel, real estate loan processor at HCCU. “MRG’s in-house attorneys and automated tests have taken the compliance burden off our shoulders. The Miracle Online platform contains far more capabilities than our previous system and its integration capabilities help us better leverage the data within our LOS and continue to offer excellent service to our members.” The credit union will soon begin using electronic document delivery to further reduce the time associated with closing loans. “Compliance remains an industry wide issue and it is increasingly important for credit unions to shorten the time it takes to provide documents to their members while meeting regulatory demands,” said Mike O’Leary, senior mortgage consultant for MRG. “HCCU can expect to see significant time savings due to MRG’s electronic document delivery and, with guaranteed compliance, can focus its efforts on ensuring each member has the right loan for their needs.”

continued from page 28

Things to Think About Before You Choose a Branch Program By Douglas Rotella

JUNE 2011 



Without a doubt, our industry has undergone some massive changes in the last five years and there are still more to come. Some independent brokers have had a difficult time adjusting, and the idea of becoming part of a larger organization, through a branch program, can be quite appealing. Lately, it seems like new branch opportunities are popping up every month, and interest is definitely on the rise. We’ve seen this firsthand with our own branch division, Menlo Park Funding (, which we announced in May but have slowly been growing since the beginning of the year. While interest in branch opportunities is high, it is important that the decision to become a branch, or similarly, accept an independent broker into your branch program, isn’t taken lightly. When considering a branch program, you need to make sure your house is in order first. Before even picking up the phone to voice interest, the opera“A reputable branch tional and compliance basics have to be in place. Is program is going to everything up-to-date with your licenses, bonding involve more than sign- requirements, etc.? Will you pass a background ing a few papers, a recheck? If one of our managers walks into your office tomorrow, what will be their first impression? If an skinning of your Web independent broker doesn’t have the basics down site and a new sign for now, it’s unlikely they’ll be able to adhere to branch your door. A quality branch program’s com- guidelines later. Great organizations are going to want to bring in mitment level should be great partners for their branch programs. For example, 360 degrees, from the with Menlo Park Funding, we’re not simply looking for initial on-boarding bodies and map tacks to increase our footprint. Real process through Estate Mortgage Network Inc.’s (REMN) reputation for training and ongoing quality and customer service is well-known in the industry, which makes us very picky about who we bring into support they’ll the fold. During the process of vetting potential branchbe providing.” es, we don’t just kick the tires on new applicants, we pull apart the engine. Any good lender who offers a branch opportunity is going to want to see a history of achievement on the applicant’s end. We realize that you may have had trouble competing lately, but to have strong appeal to a reputable organization such as ours, you’re going to need to show that you’ve been successful in good times and bad. A good branch program isn’t looking to explain how the industry works and help you get your start, it’s there to take your business to the next level. While we pride ourselves on having an entrepreneurial spirit at Real Estate Mortgage Network, realize that with any reputable branch opportunity, our Menlo Park Funding included, there’s going to be some loss of control on the end of branch’s principles. For instance, with Menlo Park Funding, you’ll have to adapt to our corporate culture, which shouldn’t be too difficult because you’ve already proven you share our customer and quality-first philosophy. You’re also going to have to adopt the brand identity of whichever branch you’re joining. You may have spent decades cementing yourself in the community under your own name, but if you’re joining up with a branch, expect the logo on the front door to change. If you’re an independent broker deciding on a branch opportunity, don’t take it

lightly. Look carefully at your options and cross-reference them with the reasons you’re considering becoming part of a larger entity. Although Menlo Park Funding is relatively new, we’re seeing two main motives for brokers looking to partner with us. The first is what I touched on earlier, that some independents are having a tough time staying on top of all the changes in the industry. That does not make them bad brokers, but when you’re a small organization used to doing business one way for 10 or more years, massive regulatory changes can be hard to adapt to. Another reason for seeking out a branch opportunity is to strengthen your own offerings. It’s getting harder and harder for independent brokers to compete. For many to grow in the way they want, they’ll need to work with a national lender they can trust, with the infrastructure required for success. Make sure the branch opportunity you pursue has the products and systems in place to help you differentiate yourself from the pack. In line with building up their own offerings, many brokers are finding it necessary to be licensed across state lines to better serve the needs of their customers. No broker wants to turn away an existing or potential client because they are unable to fulfill their out-of-state needs. If that client finds a new broker to help them with something out-of-state, regardless if it was a repeat client, referral or someone new, they may never come back through your door. The better branch programs can help diminish the costs that come with multi-state licensing, increasing the broker’s footprint and making it more affordable for them to compete. The review process for becoming a branch should not be a one-way street. Regardless of who you decide to partner with, you should do the same. Check into their financial strength and history, just as they should do for you. Likewise, ask questions in advance about their on-boarding process. A reputable branch program is going to involve more than signing a few papers, a re-skinning of your Web site and a new sign for your door. A quality branch program’s commitment level should be 360 degrees, from the initial on-boarding process through training and ongoing support they’ll be providing. In addition, make sure to speak with your professional network and find out what others have experienced and heard, both locally and across the country. Does the branch program you’re considering have the right products for your area? Does it seem like they’ve been growing too fast or the opportunity is too good to be true? With all of the information available through the Internet these days, there’s no excuse not to do your due diligence. If a program seems too easy to join or too good to be true, it probably is. While we see the opportunity for branches exploding in the next few years, there are also independents for who branching is simply just not right for. Each lender offering branch programs is going to have their own stipulations for what their branches can and cannot sell. If you want complete reign over deciding which products you offer, then becoming part of a branch probably isn’t for you. Similarly, new branches become part of larger organizations with their own internal reporting procedures and ways of doing business that will need to be adhered to. I’m not saying this to scare anyone off, but if you decide to join a branch, be prepared for there to be some changes in the way you run your business. In the end, the decision to undertake a branch opportunity or bring an independent into your branch program is not one that should be taken lightly. If you’re a veteran of the industry, you’ve witnessed the challenges we’ve faced together and realize how it only takes a few to ruin the reputations of many. Be careful who you bring into your family through your branch program. Likewise, for my friends who are independent brokers, the branch avenue is a strong one and one that will work for many of you, but realize it’s not a bailout or golden ticket. Choose your partners wisely because if the opportunity seems too good to be true, it probably is. The only way to ensure longevity in this industry, decade after decade, is by committing to our customers as well as our own personal reputations. Regardless of if you decide to join a branch or remain independent, realize that you’re part of a greater organization that is the lending industry. For the most part, those that gave this industry a bad name and were in it for the quick buck

are long gone. To ensure our own longevity, prosperity and help rebuild our reputations, focus on service and value, success will come along with it.

a mortgage operation. To illustrate further, in the words of Jared Peterson, partner from Fidelity Mortgage based in Grand Junction, Colo.:

Douglas Rotella has been an active member of the lending industry for more than 22 years. Doug founded Real Estate Mortgage Network Inc. (REMN) in 1989, realizing early on that a dedication to loan quality and customer service would set the firm apart from its competitors. As REMN grew, Doug spearheaded the recruitment and management of the national sales force throughout the Northeast, laying a strong foundation for the expansion efforts that continue to this day. Currently REMN’s executive vice president of retail sales, Doug is active in guiding the company’s retail channel, as well as the new Menlo Park Funding branch division, allowing him to keep his finger on the pulse of the industry. He may be reached by phone at (201) 498-9300 or e-mail

“The compliance requirements and operational effort to do $10 million a month today is about the same as it was doing $30 million a month before these compliance changes took effect. This has definitely slowed things down and is requiring much greater investments in technology and staffing to accommodate this.”

The End of the Mortgage Branch and the Rise of the Mortgage Office How the new regulatory requirements and market dynamics are changing the multi branch operation

This incredible shift in our industry has had significant implications on growth strategies across the country. Retail origination has dramatically shifted away from non-depository institutions, and this is largely due to the fact that this channel is not being capitalized and operationally equipped for these changes. So, what happened and how does a mortgage operation grow its branch strategy in today’s market? Before we review how it has impacted companies of various sizes, it is important to first understand what has happened in the marketplace as the backdrop to each lender in their respective market(s). I will review the impact on each lender in their respective market segments and lay out a blueprint to be successful in today’s competitive market.

Market consolidation Our present market demand for loans hovers around the $1 trillion mark. Mortgage volume in 2010 fell around 1999 levels of production, at roughly $1.4 trillion and in 2011, will fall short of that. Many economists forecast a range from $0.8 trillion to $1.3 trillion (roughly 1997 levels) and the accuracy of these forecasts will revolve around a number of economic factors, such as rates, inflationary pressures, the price of oil/gas and the unemployment rate.

By Rick Roque


Data Source: Mortgage Bankers Association

These changes in the market have led to a significant decline in the number of continued on page 34

 JUNE 2011

Three companies, three markets, three separate challenges


The driving force of this reduction in mortgage lending revolves around a familiar challenge we face on a daily basis … the ability to qualify borrowers that once were easily qualified, but who are now having significant challenges given elevated underwriter requirements. The need to recover recent financial losses and to ensure investors that mortgages originated, underwritten and closed in the U.S. are reliable investments to the international community, all led to a suppression not in the demand for mortgages, but in the delivery of them. Roughly $2 trillion in mortgages are in demand, however, less than half of them can qualify for them given today’s standards. Therefore how does this impact the recruiting and the expansion of the mortgage operation? Well, with so many mortgage companies in the market, and with so few non-depositories prepared to invest in technology and compliance, the net result was a significant reduction in mortgage lenders and mortgage brokers in the marketplace. These two markets once originated more than 80 percent of all mortgages in the United States; with only a 15 percent market share today these operations needed to think through how they were going to be competitive. But how? What would they need to do? How would they grow as they once did? 

The mortgage industry has received a significant amount of attention over the last two years, and who is most interested in what has happened are the banks and public policy makers within international community. As they are developing housing markets with a fledgling lending system for consumer, personal and real estate related transactions, they are looking to other models to understand their strengths and weaknesses. In August of 2009, I was asked to speak at the first Mortgage Liquidity Conference in Lagos, Nigeria. While at the Lagos Business School, the first question was always around the differences between mortgage brokers and mortgage lenders, and why “mortgage brokers were so bad?” With so much negative press about the mortgage brokerage community, I expected such questions and was able to transition their understanding away from “brokers” per se, to a broader political agenda toward homeownership and the consequences of an overlyzealous public policy at the federal level that pro“It is much easier to vided guarantees to certain high-risk categories of grow 10 lending borrowers and their loans. This only becomes a centers to $50 million challenge when the anticipated losses that were per month than it is to expected from this segment become 10 percent of grow 300 branches what you are insuring. Anyhow, I expected those that are largely left to questions in 2009, but in 2011? I recently received an invitation to speak at Ataturk University in themselves for their Erzurum, Turkey in early June to explain to approxgrowth. Once again, imately 100 Middle East college presidents how that is an old net branch model that will retail mortgage origination occurs, how it has changed and why a policy that was intended to not be the future of the address institutions that were “too big to fail” only mortgage industry.” led to a rapidly consolidated market, making such companies even bigger. How mortgage companies grow is fundamental to the U.S. mortgage industry, however, I am beginning to realize how it impacts the global market for mortgages as well. This is why how it is important how mortgage companies grow in the United States. How companies grew in the beginning of the last decade is vastly different than what is required today. The new era of lending that was brought upon us with the Good Faith Estimate (GFE) reforms in 2010 and the Dodd/Frank Act in 2011 have forced us to re-examine the costs and human resources required to run

mortgage lenders and brokerage firms. This is reflected in the decline in employees working for each respectively. The decline in the number of companies—leaving around 10,000 mortgage brokerage firms and less than 3,500 mortgage lenders left in business.

Source: Bureau of Labor Statistics, Mortgage and Non-Mortgage Loan Brokers The result of this is significant consolidation. The consolidation is impacting each of the mortgage market segments below in the following ways:


regarding the performance of the company and its branches. As a result, there is little trust between the branch offices and corporate and as a result, employee retention suffers as does the corporate culture.  Mid-sized mortgage operation ($30-$100 million per month): This segment in the industry has had the most movement and are the most highly recruited. These operations have strong local and regional relationships and have strong management teams. Generally, these companies lack the capital for growth. To accommodate the base salaries and the costs related to branch offices, corporate leases, human resources and the legal needs to support it tend to be cost prohibitive. The challenge these companies face is that they tend to overvalue what they have. These operations will either decline in volume, remain flat or they will seek outside investors to help fund their growth. The owners of these companies tend to overvalue what they have and that gets in the way of either selling their company or seeking outside investors.  Small professional mortgage operation ($10-$30 million per month): This is another segment that is in high demand on the recruiting side. Strong market knowledge and strong local relationships are keeping their volume impressive high in today’s consolidating market. Their lack of capital to fund their growth is their largest weakness. Given the consolidation in the market, they will more than likely be downsized in the continued consolidation in the market by either going out of business or will join a larger, enterprise or mid-sized type mortgage operation. This segment and the last one are the most susceptible to the consolidation in the marketplace. The erosion of these two segments are rooted in the costs of quality and technology necessary to originate, underwrite and close/fund every single loan.

 Enterprise mortgage operation, ($100 million-plus per month): This segment in the industry has the most to gain from the downturn. Companies at this level generally have the capital, experience and staff to address the compliance- and technology-related challenges. The primary weakness in these firms rests in the fact that many of them were net branch companies. They struggle with legacy challenges that are rooted in their culture. Their operations are often still disjointed and lack the level of trust and cooperation between offices that exists with depository institutions. In many cases, large multi-branch operations exist  Small, one office mortgage company ($1-$9 million per month): This is the most desperate of market categories, although they are the beloved in a management culture of secrecy with little communication to its branches

The Timing Couldn’t be Better: Consider Franchising or Net Branching

JUNE 2011 


By Gregg Harris

Back in February while speaking to a colleague of mine, I made a prediction that the industry was finally turning a corner and that the loan originator (LO) compensation rule was a milestone that marked the dawning of a new mortgage industry. My prediction: More one- to three-person offices that specialize in doing what they do best … originating loans. Now, with the LO compensation rule behind us, I see clearer skies on the horizon with opportunities for loan officers and mortgage brokers alike beginning to surface. Whether you are an existing broker looking for ways to enhance your business or are a loan officer looking to go into business for yourself, there are opportunities available that provide the resources to fit your needs. Most importantly, these resources include marketing and lead generation, which are critical to your success. The two primary opportunities are the net branch model and the franchise model. Let’s take a look at both and compare them. The net branch model consists of operating under the corporate license of the company thus surrendering any existing license you may have. However, many companies offering net branch opportunities hold multi-state licenses so you may originate in all states in which the company is licensed. You become a W-2 employee of the company and give up any existing corporate identity, but you take on a more established brand name identity. There are many benefits, such as administrative support, marketing and advertising, lead generation, loan processing and closing, in-house underwriting, and human resources benefits to the net branch route. The costs to become a net branch usually involve a flat monthly fee or other compensation split. The franchise model consists of operating under your existing license or ob-

taining a broker’s license of your own. You also maintain your existing corporate structure or establish a new company, but operate as a d/b/a or “doing business as” of the franchise company. Unlike net branching, franchisees are in business for themselves, responsible for the day-to-day operations. The benefits to franchising are similar to net-branching and include administrative support, marketing and advertising, lead generation, loan processing and closing, accounting support, human resources benefits. The costs to become a franchisee generally involve an upfront franchise fee and monthly royalties based on a percentage of the gross revenue. There are also marketing and advertising funds to which the franchisee is required to contribute to for local and national advertising campaigns. Of the two, franchising is the more entrepreneurial model since you actually own the business. If you’re already in business for yourself, you’re used to the common issues you encounter when running your own business. But if you’ve never owned a business, the thought of this may be overwhelming. The good news is that you’re buying a model that’s already proven and successful, with the training and ongoing support you need to run your daily operations. The bottom line is that change is in the air and you should be considering your options as the industry continues to evolve. Try to picture where you want to be in your career in the next three to five years, setting some milestones along the way. Then, see how either of the above-mentioned models fits into your plans. They say there is always opportunity in adversity. Seek out the opportunities and you shall find that they are plentiful. Gregg Harris is president and chief executive officer of LenderCity Home Loans in St. Louis, Mo. He may be reached by phone at (888) 880-2489 or e-mail

Sponsored Editorial

group of companies. These are the survivors in our business. I was speaking to a mortgage brokerage firm based in South Dakota the other day and they were stating that they “were going to be the last mortgage brokerage firm in America “ if they have to be. These are the operations that most significantly handicapped in today’s market. Small mortgage lenders are virtually disappearing (out of business or have joined a larger operation), while this segment of mortgage broker will fall below 6,000 companies and will be dedicated resellers of a select few mortgage products of a small subset of wholesale lender.

transcend the mortgage transaction between the loan officer, your organization and the consumer? 10. Lending centers: Focus on 10-15 lending centers in key markets around the country. Grow those operations organically. It is much easier to grow 10 lending centers to $50 million per month than it is to grow 300 branches that are largely left to themselves for their growth. Once again, that is an old net branch model that will not be the future of the mortgage industry.

If you are with an operation that doesn’t invest or mirror some of the above market needs or suggestions, it is important to identify companies who do. It will be around these companies that the rise in retail mortgage origination will be Blueprint for success To grow today’s mortgage lending platform, there are a number of important factors that built and the consumer will be better served for it. will lead to their success. In my work with several lenders across the country, here are Rick Roque is senior vice president of growth and strategy at Prime Source Mortgage, a the highlights of the successful companies that have grown in volume: subsidiary of PrimeSource Holdings (, a publicly-traded corpora1. Reduce costs: Production costs must be below 50-60 basis points on every loan— tion whose realtor- and consumer-focused mortgage efforts ( how can your use of technology eliminate cycle times, compliance costs and manual are headquartered in New Mexico with offices around the United States. He may be touch points on the file? Ultimately, this will mean head count reduction and the reached by phone at (408) 914-5895 or e-mail need to reduce your staff by 10-20 percent. This can be done by efficiently using technology. 2. A commitment to technology: An end-to-end mortgage banking platform is vital; one that leverages all critical services to the mortgage transaction—docs, product and pricing, and imaging. Solutions like Ellie Mae’s Encompass and PCLender are two solutions that are quickly becoming the industry standard. 3. Minimize physical file touch points: This is worth a separate bullet. Does your technology automate your process? Is there “hands off” quality and compliance controls and verifications? By Daniel H. Jacobs 4. Centralize all of your information as soon as possible: Manage, report and customize this information in the most flexible LOS solution you can afford. Technology, automation and stability of the company are key factors in selecting It’s no secret … lenders are increasingly relying on retail originations as the lowa vendor. Has the company been around for longer than five years and have more est and most variable-cost, high-quality distribution channel. Third-party originathan 1,000 clients? Can the vendor afford to lose 30-40 percent of their clients as tion (TPO) has morphed into a nearly correspondent-only business, and is conmany mortgage companies will lose 30 percent of volume? If the company has trolled by a small handful of aggregators. Retail branching is all the rage, particbeen around, have they struggled to innovate? What is their reputation? Have they ularly as Dodd-Frank, the new Federal Regulation Z lost market share? rules, and agency net worth requirements for corre5. Invest in a compliance officer and a chief information officer: The right peospondents continue to threaten the viability of indeple in these roles are vital to the growth and success of your mortgage operation. pendent mortgage originators. Ten years ago, the The chief information officer is not a “techie” but a technologist; one who can question was, “What’s a net branch?” Today, the match key operational goals with the right technologies available in the marketquestions are “What’s retail branching?” and, most place. The key is the planning and execution of these solutions internally in order importantly, “How do I choose the right lender?” to realize these goals. I am always surprised at the number of mortgage operations Euphemisms abound, and thanks to the complexity who originate $70-$120 million per month that do not have either of these posiof many new regulations, there are more challenges tions filled … yes, this is true! It is amazing and it is prevalent. than ever in the deployment of the retail production 6. Branches to offices: Transition your branches to offices. In the words of Jeff Smith, channel of mortgage origination. What is retail owner of one of the few publicly-traded mortgage platforms, PrimeSource Mortgage branching in 2011 and beyond? (, “As a publicly-traded company, we have ‘offices,’ not As surviving wholesalers have seen their channel ‘branches,’ where we build a corporate culture centered around the company’s sucmarket share shrink to near single digit levels, many “While there is cess and not just the success of one office.” have pursued, with varying degrees of success, “capcertainly money to be 7. Invest in your offices: Don’t take any single office of volume for granted. Many tured wholesale,” and tried to convert their former made, the true of the larger enterprises who have 200 offices, but only 20 of them produce most wholesale customers to retail branches. Surviving net mortgage professional of the volume, suggest that they do not invest in the success of their offices. The branch companies who focused on loose affiliations realizes that the cheese and transaction fees for license rentals have been mortgage operation who will be most successful will be the one who spends the has been moved.” time, money, training and resources to organically grow production. plagued by legacy issues and the challenges of tran8. Liberalize overlays: The year 2011 will see the rise of sub-prime. With volume sitioning to the current mortgage banking model, declining and mortgage companies embracing compliance-driven technologies, finding that the required tectonic culture and operational shifts necessary for sucthere is a growing appetite to lend to borrowers with a 580 or 600 credit score. cess are difficult to achieve. Traditional retail mortgage bankers have found the Why not? The average of FICO score of the American consumer is below 640. There high fixed-cost model of years past unsustainable as the dynamics and geography are many borrowers with stable employment, who pay their bill, but have a low of successful origination have changed dramatically. Agility has proven difficult FICO score because of a catastrophic event (e.g. divorce, short sale, negative equi- for the entire industry, but it has not eluded all players. Some have successfully ty, etc). The years 2011 and 2012 are the year for these borrowers to buy a home. redefined themselves and are expanding into a new version of retail lending that Those who have good credit have already purchased and refinance (as a national blurs the lines between what we have known as traditional retail lending, net trend) their home; so now, it is time we open up the products in a responsible branching, brokering and banking. Most are seeking relationship-based, turn-key, manner in order to assist in the eligibility and options of consumers. purchase-oriented originators with short-term fixed commitments for space and 9. Consumer direct: Go consumer direct; it is critical to get to the consumer first equipment. Lenders are trying to recreate the agility of TPO business in a more before your competitor does. My goal in working with mortgage companies is to controlled, retail environment. get them to get to the consumer before the consumer goes to the real estate agent. Simultaneously, mortgage professionals nationwide are evaluating their The goal for the mortgage company is to be the referral source to the real estate agent and not the other way around. What technologies build relationships that continued on page 36

Retail Origination of the Future: Determining Your Best Platform



futures. Independent brokers are reluctantly converting to mortgage bankers. Independent mortgage bankers are reclaiming the cash, time and risk tied up in their small businesses by affiliating with larger institutions. Net branch managers are seeking a greater level of sophistication and support by partnering with solid mortgage banking firms. Bank originators are obtaining licensing and moving to independent mortgage bankers who will reward their production efforts with richer pay plans after many banks have used new regulations to reclaim commission as profit for shareholders. There has never been a time of greater professional introspection and transition among mortgage professionals. So … what should a mortgage professional consider when deciding to make a move?

JUNE 2011 



These things are fast becoming industry standard, and originators should be certain to choose a lender that is ahead of the curve.

Training Many independent mortgage professionals are considering joining up with a larger organization because so much is changing so fast. Without the resources of a larger industry engine, independent professionals find it difficult to keep up with evolving regulations and can inadvertently put themselves at risk of serious penalties. Any lender considered should offer Fortune 500-style training resources. The leaders in any industry all know that being successful means having a knowledgeable, well-trained sales and operations staff.

Service level agreements

Start up costs

The successful, future-focused mortgage originator will be competing against online providers who are using technology and transparency as an originatoreliminating and cost-saving tactic. Originators will need to leverage their personal service and ability to deliver on promises to not only the borrower, but also their referral sources, in order to succeed. The stark reality is that the further the originator is from owning a mortgage banking firm, the less control he or she has over delivering on their own promises. Lenders expand and contract operations staff and service levels without regard to the effect these changes have on the reputation of their production staff and the long term relationships that are often the cornerstone of success. Mortgage professionals seeking an effective, long-term partnership should evaluate the lender’s commitment to supporting originators by obtaining written service level agreements (SLAs) from the operations team to the production team. They should contact long-term employees of the lender to determine that the SLAs have meaning, and are more than a marketing gimmick or a tool meant to attract originators and boost short-term production.

Mortgage professionals and mortgage entrepreneurs are not mutually exclusive concepts. Mortgage professional entrepreneurs working for successful mortgage banking firms do not pay for employment. Federal and state labor regulations prohibit employees from paying out of pocket for the opportunity to work for a licensed mortgage lender. However, the build-up of reserves from revenue is a responsible method of conducting business. The volatility of the mortgage industry in years past has taught responsible lenders and professionals that setting money aside from the good days to cover the bad ones is a good practice. Franchising, however, is disallowed in our business and mortgage professionals should never pay to become an employee of a mortgage lender. Of course, if one is receiving equity in a company proportional to their investment, an investment may be appropriate.

Loyalty focus As the industry becomes more purchase-focused, relationship-building and referral generation will be more crucial than ever before. The mortgage lending partner should be committed to nurturing long-term referral generation with loyalty marketing programs. If the future of mortgage origination is relationship-based sales over transactional and consumer-direct marketing, originators must have a plan and system in place to foster relationships with referral sources and past customers to develop future business. An agile and proactive lender will support the development of relationship loyalty, where slower-adapting, more tradition-based lenders will be focused on boosting origination staff to influence short-term production. Loyalty marketing programs require significant thought, expense, foresight, commitment, and of course, loyalty from the lender to the originator. Investing these resources now will make sense to the lenders who emerge as the leaders in the future.

Marketing support First impressions are everything. Still reeling from the mortgage meltdown, consumers are leery of “mom and pop” lending operations, and expect to see agencyquality creative pieces. This is a key component of establishing legitimacy and inspiring confidence in today’s borrowers. Having fresh, approachable, informative marketing that portrays the mortgage professional as an expert with institutional stability behind them is essential for success. The modern mortgage professional and lending institution must carefully manage their image. A lender committed to the success of its originators understands this and has a comprehensive marketing program to support its originators. If the lender believes in the originator’s marketing plan, it should support it. Originators are not independent distributors of the lender’s product, therefore, lenders should hire only those originators they believe in supporting as partners for success through well-defined, branded and thoughtful marketing strategies. The bottom line … mortgage professionals should expect professional mortgage marketing support from professional mortgage lenders.

Compensation Specifically, since April 5, 2011, compensation plans now vary wildly among mortgage firms. Some are compliant, many are not. Several of the new regulations impose liability on all parties involved in illegal compensation arrangements, including the originator or branch manager. If a firm is offering to paper 2011 compliance, but practices off books 2010 reality, then stay away. While there is certainly money to be made, the true mortgage professional realizes that the cheese has been moved. Things are different. It’s time to accept, perhaps begrudgingly, the changes, learn about the new rules, and resist compensation plans that feel more like schemes than well defined, well thought-out, compliant plans. What’s interesting is that being well thought-out, well-defined and compliant does not mean boring, homogeneous, lacking incentives or lacking in the entrepreneurial spirit. If you are talking with a potential mortgage lender and they cannot easily answer all your compensation plan questions and explain thoroughly how their plan is compliant with the various rules and regulations, then be wary. The best companies will integrate their compensation plan and training initiatives and make an understanding of their financial model a top priority. If things aren’t explained in a way that makes sense, question the long term fit. Some lenders are flagrantly disregarding the rules and others are taking a very conservative stance, but the best companies are compliantly progressive and positive, rather than sullen, about finding new ways to entrepreneur in a changing environment.

Bank or mortgage banker While banks whose mortgage platforms are no longer subsidiaries have the lure of the licensing exemption, many mortgage professionals have chosen to have the flexibility that an individual license provides them. If one is seeking a bank branch mortgage origination position to have a steady flow of leads from deposit customers, a bank is probably a great partner. An originator seeking a bank due to an inability to obtain state licensing may be disappointed to find that most banks have restrictions for hiring within their exempt environment than do states within their non-exempt environment. The bottom line is that the true mortgage professional should choose a bank or mortgage banker based on factors other than licensing exemptions. There should be a compelling reason other than skirting a professional requirement to focus on a bank origination platform.

Technology While having tomorrow’s technology today is nice, too many originators find themselves still catching up with yesterday’s technology tomorrow. Cutting-edge lenders believe in investing in technology, and offer tools such as electronic disclosures with click-sign, Web sites for all originators, lead distribution, real-time reporting, a Web-based cradle-to grave single system LOS, a fully paperless environment and mobile device compatibility to ensure their originators stay on top.

Cultural fit Professionals in any industry will declare their appreciation of a terrific corporate culture as the reason they stay with a company for decades. Historically, mortgage originators have selected their employers based on rates and commission plans, and lenders have selected their originators based on their production volume. The true mortgage professional rejects the notion that price and compensation

are the only important factors in deciding an employer. The true mortgage professional realizes that agreement of business philosophy, of how the company values and treats people—employees and customers alike—makes the difference between a short-term and long-term relationship. Finding the right cultural fit should be the overarching goal of the mortgage professional seeking a new future.

must partner with a mortgage banking company that has your similar core values and a platform that will create profitable activities and future opportunities for you as a branch owner. One that will, for example, offer competitive pricing and attractive splits so your loan originators will be happy financially. A good compensation package is equivalent to the right sails for the ship to ensure that you can recruit the best and grow your business.

Whether it’s a bank, a broker, an independent mortgage banker or a credit union, if you are seeking a retail origination platform to associate with, finding the right fit for you is the most important element mortgage professionals must consider for their future. The new compensation rules provide an opportunity for mortgage professionals to be more circumspect than in the past in choosing a lender to work for. Daniel H. Jacobs is president of ProLending Network, a division of Residential Finance Corporation. A recognized mortgage thought leader and entrepreneur, Daniel has a solid track record of building and growing companies that solve industry problems through a delicate combination of technology and systems implementation, smart infrastructure and fostering a culture of hard work, loyalty, service, dedication and pride. Prior to joining Residential Finance Corporation, Daniel grew 1st Metropolitan’s parent company from six offices and $100 million per year in production in 2000 to a 250 branch $4.2 billion production company with a sterling reputation throughout the industry. He may be reached by phone at (614) 255-3929 or e-mail

Evaluating Your Ship: Questions to Think About When Considering Joining a Larger Company

What should you be asking? The following are some more questions that must be answered and compared before you think about partnering with any company.

Tim Ray

“You are praying that the hard times of today will pay off in the future when only the ‘professionals’ are left.”

 What type of support does the company give to the branch and loan originators? An example of this is accounting … are you required to run a P&L with reimbursements out of profits, or are you looking for true support from accounting where you can stop doing that type of work. For example, will a mortgage banker’s branch take over all of your expenses and free you of the day-to-day burden of managing the P&L? Imagine spending your day recruiting, marketing and closing loans.

 Is the underwriting fair and responsive? Does underwriting deliver the timeframes promised and are they consistent from underwriting decision to decision. I have heard many “net branch” owners tell me that they now feel like a broker, but now with only one rate sheet. The right mortgage banker will take the opposite approach and the fact that you work for the decision-maker puts more faith in you in the eyes of your referral partners. There are some mortgage bankers who treat managers and loan officers like family, not unwanted and distrusted customers. Ask current branch managers for the mortgage banker you are considering how they feel about them and I they have conducted business with them.


By Dan Rawitch & Tim Ray

tions is in order

 JUNE 2011

The pendulum must come back to the middle …  Is executive management in touch with what is going on in the field? right? The problem is, when will this happen? There Do they understand the process of origination to close? Do they understand seems to be many more “dark clouds” ahead of us as what the originator needs? Do they listen to those needs and make changes to we navigate these dangerous seas … as scary and help. Don’t rely on what executive management says about this, you need to anxious as this makes us feel. Congratulations, you speak to the branch managers and loan officers on the street to see if manageare a survivor! More than 40 percent of your industry ment is really in tune with what’s going on out on the street. counterparts are gone … now what? Do you stay put to weather the storm or do you latch onto a bigger ship? The ship that will make it to the shore first is the one that’s priced right, can close If it is the right ship … absolutely, it could be great! But if you make the wrong the fastest and leave smiles on everyone’s faces. Each time I walk into one of our choice, it can take you down and take you down fast! Remember, production is king, and you have it! That precious resource must be protected at all costs. You continued on page 38


make it to the shore first is the one that’s priced right, can close the fastest and leave smiles on everyone’s faces.” 

 Do loans close on time? So you have a profitable mortgage business and are thinking of joining a larger Can a file run through the underwriting process to closing with project timecompany as a branch. Your business may be small, with four loan originators and lines in mind? When a file hits processing and has a closing date, is it on the a processor, or large, with a full staff with A to Z from origination to closing. Either board and is it treated like project management with that date in mind? Look way, you are a great sales team that lacks the infor a company that is prepared to guarantee a 30 day or less Certificate of house feel of underwriting, closing and funding. Eligibility (COE). Our company’s closing guarantee is 25 days or less, or we Over the past 18 months, you’ve survived the Home assume daily penalties. Look for mortgage bankers who are willing to walk the Valuation Code of Conduct (HVCC), the stall of the plank if they don’t close on time. housing market, the Wall Street lending meltdown, and Washington’s “uneducated” decisions smother-  Does operations care about the client as much as the loan originator? ing any chance we have at industry recovery this Does operations understand that moving vans are coming and that lives are in year. You are praying that the hard times of today limbo? Also, do they understand that good operations can create additional will pay off in the future when only the “professionreferral opportunities for the originator, thus going the bottom line? A well-run als” are left. At that time, the housing market will company will not distinguish the difference between sales and operations. If surely regain its strength with reasonable lending you were to sit in an executive meeting at my company, you would be hardprograms finally bringing buyers and sellers together pressed to understand the difference. It should be that way! We are all one famonce again. ily. The mortgage bankers out there who are smooth-sailing through blue Dan Rawitch oceans know they have the same three customers: (1) You, the loan officer; (2) If you are reading this, a congratula“The ship that will your buyer or client; and (3) your real estate agent.

25 branches, I begin the meeting by holding a roundtable with all of the loan officers in that city. All I care about is, “How is it going and how can we do better?” I have a saying and I use it every day, “We are never good enough, and we are always the worst we will ever be.” My mantra would most likely not win any motivational awards, but it keep us from getting lazy and it keeps us from developing the attitude that many large companies develop as they grow. You know that attitude? Right? In closing, make sure you are with a company that “gets it;” otherwise, all the bells and whistles in the world will not make a difference. Talk to the perspective company’s loan officers and managers … they will tell you! Dan Rawitch is director of retail lending for First Cal Mortgage. Dan has been in the industry for 30-plus years and began as an originator of FHA loans in the late 1970s. He has worked at the fixed-income desk for Bear Stearns and founded a number of companies, including RPM mortgage in 1989. Dan may be reached by phone at (707) 2383748 or e-mail Tim Ray is a regional vice president for the mountain states. Prior to his latest role, he managed the company’s Denver office, an office that Tim and his wife Ronnie Ray built over the last 10 years, operating as Apollo Mortgage. The team joined First Cal in mid-2010. Tim may be reached by phone at (720) 389.0021 or e-mail

Shooting the Wounded … What’s Happened to Our Industry?

JUNE 2011 



By Nicholas J. DelTorto

I am amazed at how different the business of mortgage lending is today compared just three years ago. I unfortunately have to admit that I am approaching 30 years in this business. In my mind, it seems like just yesterday that I was starting out as a new loan officer in what was to become my career. I’ve seen interest rates at 14 percent, three recessions, a couple of housing busts, the Savings & Loan (S&L) crisis, and more than a half a dozen refinance manias; but I can honestly say I’ve never seen anything like our current state of affairs. To say that we have undergone “change” is like saying the Titanic “took on a little water.” Financial services have changed forever. What started as “the sub-prime crisis” seemed to evolve into TARP (the Troubled Asset Relief Program), too big to fail, the housing collapse and the current “great recession.” I’ve never been very political, but I have become much more of a student and more active in politics. “The people left in I’m amazed that so much “we‘ve got to make this our industry today right for the consumer” has come out of Washington, are the best and when Washington politicians have put our country brightest … they are into the face of the worst budgetary mess, deficit the ‘survivors.’ The spending and over borrowing that has left us posiproblem is that even tioned to be a tier-two monetary power, with a queswith all of the right tionable future for our children. The double standards seem to be endless, whether it is healthcare intentions and hard work, it is going to be reform (that doesn’t apply to members of Congress) or secondary market agencies pricing loans based on very difficult to survive as a small- to a “risked-based pricing” that would be considered discriminatory if we varied pricing in the same manmid-sized player on ner. The “do as I say, not as I do” approach to ruleyour own.” making would be comical if it wasn’t so distressing. These are the very same politicians who are directing their energy toward deep and far-reaching legislation. It’s more accurate to say financial services and mortgage lending have been under attack for a number of years and now they are in the “shooting of the wounded” phase of the cycle. As often is the case with deep and singularlyfocused legislation, the baby gets thrown out with the bath water. Granted, our industry needed a clearing out … we needed to change. There were unprofes-

sional and unsavory players. Lending practices had gone awry, but there is plenty of blame to go around. Originators did not create the securities or change underwriting guidelines or put into effect automated underwriting engines that used sophisticated “blind” black box underwriting algorithm that determined if loans were approvable with 100 percent loan-to-value (LTV) and 50 percent debtto-income (DTI). Regardless of the fact that the blame should be shared, it is the people on the front line, those dealing with the consumer directly that are, in fact, bearing the greatest attention and “punishment.” It really surprises me (but it shouldn’t at my age) that so much of the blame and punishment has been directed at the frontline originator. It doesn’t seem that the regulations have been equally directed at the large, more politically powerful players that equally share the responsibility for the heady real estate and mortgage finance market that existed. Now we are seeing the after-effects and the unintended consequences. The effect on good players not being able to survive, or the process just becoming so weighted down with regulatory and compliance burdens, that the costs of obtaining a loan have and are going to continue to increase (or your profits will suffer and drive you out of business). The monopoly forming that the big four banks are capturing in market share and the record profits they are enjoying, will certainly result in higher costs to the consumer as the options dwindle. A languishing real estate market continues to suffer under the intervention and “financial engineering” being done. The intervention has really not helped in my opinion, if anything it has dragged out our recovery and made it worse. Home Valuation Code of Conduct (HVCC), Good Faith Estimate (GFE) reform and foreclosure “management” are making it more difficult to help good people and pushing them to a “back up against the wall” decision-making process. Underwriting guidelines have become so restrictive for refinancing good borrowers to allow them to lower payments, consolidate first and seconds and basic restructuring of their debt that it seems we have gone from too many options to no options. Borrowers who want to pay their mortgage often cannot refinance their rates down to current levels, due to loss of property value. This has clearly been made worse by the effects of foreclosure management, federal intervention of foreclosures which resulted in dragging out inventories longer and continues to hamstring the real estate values and ultimate market recovery. I believe that had we allowed some of the natural market forces take effect, we would have had a natural inventory absorption of foreclosures. I guess I’m a free market capitalist and the more we attempt to manage the process, we thereby create some other equal and opposite reaction. I think we saw a good example of this in the TARP bailout and “too big to fail.” Had we allowed them to fail, other competitors (many not so “big”) would have stepped in and captured the natural opportunities that existed with a healthy competitive environment. The list of examples goes on and on … This is not intended to be a doom and gloom message, but an honest and pragmatic review of where we have come from, where we are now and perhaps where we can go from here. Our business, over the last 10 years, has attracted a number of very entrepreneurial, creative and hard-working people and small business owners that captured the market share from banks and savings and loans that had become complacent in their outreach and execution. Smaller companies could react quickly to market opportunities and reach out to consumers to help them achieve the dream of homeownership that was promoted and mandated from the top down throughout our government and the entire real estate market chain. The people left in our industry today are the best and brightest … they are the “survivors.” The problem is that even with all of the right intentions and hard work, it is going to be very difficult to survive as a small- to mid-sized player on your own. The burden of compliance with all of the new regulations is expensive and only going to get worse. At best, it presents a challenge for any small organization to remain focused on revenue generation when you have to wear so many hats. Technology is advancing swiftly (and finally) in our business as a method of achieving stronger compliance and more efficient marketing, but this also has a significant associated cost. What previously was an advantage for a smaller mortgage banker or broker was more product options, and a better price due to lower cost of overhead has now become a challenge and frustration based on significantly fewer wholesalers (therefore, worse pricing), a product offering of “One Size Fits All,” and rising overhead based on an increasingly complex compliance maze. Licensing, the Nationwide Mortgage Licensing System (NMLS) and loan officer (LO) compensation are just making it all too difficult and many are just throwing in the towel. Everyone is dealing with the velocity of change and frustra-

By Stewart Hunter and Jim McMahan You have all heard that companies are either growing or they are dying. That’s probably overstating it a bit since we contracted with the market during the downturn and have been thriving. But, it is true that more companies—and leading loan originators—are looking for opportunities to grow. For companies like ours that maintain national networks of mortgage banking branches, that means growing out your branch network. For many, growing has proven a challenge in an environment where much of the top talent has fled to greener pastures. We are all competing for fewer top loan officers. The good news is that those who are left are more particular about the companies they work for because they are the good ones, the ones good enough to survive in the lean times. When firms like ours go out in search of new talent, it’s easy to become focused on a person’s price. We have found that to be a mistake. For most real professionals, the initial offer isn’t as important as the potential for future income and it’s not nearly as important as some other elements of the deal. Most professionals we deal with are looking for a branch relationship that is a true partnership. They want to see real leadership within the company and feel that the people they are going to be working with on a day-to-day basis who will be underwriting their loans will be there to support them. They ask questions about corporate culture and support structures. They ask about how the company gets loan transactions done. We’ve done a lot of work over the past few months, honing our compensation system to make it work within the new loan originator (LO) compensation rules and still be attractive to the people we want to partner with. That’s important to the people we’re recruiting to build out our branch network, but not as important as the relationship that will enable them to earn more in the future. The other serious challenge our industry faces today relates to compliance. We’re living and working in an age of unprecedented regulatory oversight and lenders cannot afford to make a mistake. That means everyone in the organization has to be well-trained, properly licensed or certified and routinely checked for compliance. Any business owner interested in growing a branch network must bear in mind that the liability for non-compliance rests with them. Any mistake made by any team member will ultimately come back to them. That makes compliance a top concern and can stand in the way of growing a network. But it shouldn’t. In today’s environment, growing the network goes hand-in-hand with a complete dedication to training and supporting your branch managers and their teams, especially as they come on board. Often, that means working very closely with state regulators to bring on a new branch in another state that has an existing pipeline. There are many steps that must be taken in the right order to make the transition smooth and legal. It requires a lot of cooperation, both internally and with external partners and regulators. It’s a great first test of a new branch partnership. One of the things we have noticed is that we rarely recruit new branch managers alone. They almost always come with teams of good people they have attracted previously and who have, together with them, built a foundation of mutual success. In many ways, this makes it easier to build out the network, but in terms of meeting the expectations of a new team, it can make things more challenging. That’s why it’s so important during the early days of assimilating a new branch and installing a newly recruited team that your home office team realizes that it’s a critical time, a time for all hands to be on deck and doing what they can to smooth the transition. It’s important that the existing partners, loan referral sources and other important contacts of the new team realize at once that their partner’s decision to join your firm was a good one. If they question that, it will negatively impact their pipeline and future business potential. In the end, it’s all about the many relationships that make up the growing company. If those are valued and managed well, all of the other obstacles can be overcome and a company can grow, even during the most challenging of times.

 JUNE 2011

Stewart Hunter is core values officer and Jim McMahan is president of Dallas-based Benchmark Mortgage. You can find them both online at



Nicholas J. DelTorto is executive vice president of Inlanta Mortgage. Previously, he was president of American Foundations MortgageBanc Inc., a wholly-owned subsidiary of Generations Bancorp, a Wisconsin Financial Services Holding Company. American Foundations MortgageBanc merged with Inlanta Mortgage in July 2010. He may be reached by phone at (262) 754-6469 or e-mail

Building Out Your Branch Network 

tion in different ways. It’s disappointing to see how many have simply thrown in the towel, others have surrendered their entrepreneurial spirit to just go work for the big bank and so “it will be easy again.” Others are doing the best they can to hang in there, but realize the long-term challenges are becoming insurmountable. As an old street fighter, it breaks my heart to see the spirit and drive of so many great sale producers become broken. If you look long and hard at the reality of the market and how the business is evolving, there are options and the future for the entrepreneur is not so bleak. In fact, it may end up being even better. Certainly, the big banks will capture enormous market share (more than they will be able to effectively serve in my opinion). The housing market, even with all of the aforementioned “hamstrings,” will not stay at this current weakened state forever and certainly there are considerably fewer players to service the consumers when the business level increases. There are so many more barriers to entry in the industry that we won’t be the next destination of the fly-by-night players as business increases. This market reminds me of the period in the early 1980s when the banks did dominate and the early mortgage bankers and brokers were out there reaching out to serve their referral sources and captured the business, and their market share grew over time. We got away from what we did best, where the rubber met the road—the sales process of going out and forging relationships was where we differentiated ourselves based on being on the front lines and delivering exceptional service and a competitive price. Somewhere along the way, it got too easy; refinances, swelling homeownership and the limited barriers to entry led us to want to own our own shop. After all, let’s face it, our ego is one of the main reasons we succeeded, but it also can result in only seeing the blue sky. The reality is that “owning your own business” comes with a host of new responsibilities and challenges that ultimately distract us from what made us successful in the first place … selling, winning and serving our customers. We need to go back to our roots, the core of our success, focusing on sales and revenue generation and away from being the only one responsible to meet the distractions of compliance and other baggage. Certainly a bank will provide you with the relief from having to wear all of the hats and the larger support structure will do that, but it comes at a steep price. You want to be paid for performance. It can become “easy” at the bank, but remember, you didn’t bring that customer in through your efforts. It will be quickly pointed out to you that the customer is in front of you is mainly there because they are a customer of the bank, and as such will be reflected in your compensation. Branch partnering with the right company provides the best of both worlds. There is strength in numbers. You can run your business, but with the entire support structure you need in the future. Compliance, underwriting, secondary, technology and all the department bench strength you need, to do what you do best. You get paid for the performance of you and your operation, and you benefit from the combined volume with full secondary marketing. Underwriting is done in-house by your teammates; closing, funding and warehouse facilities allow you to control the entire process; and the service quality will skyrocket. The business has changed, but there are awesome opportunities to lighten your load and get back to where our success started. When looking for the right company to partner with, I would urge you to do your homework. Meet with the company and the various department heads. You’ll get a good feel for the level of support you’ll receive. Talk to other existing partner offices and see how they feel. Make sure you choose to work with an ethical and stable organization. Any potential organization that tells you with pride how they “get around” compliance with the latest regulations, or one that hasn’t invested in technology won’t be around long enough to help you succeed. The opportunity in the future will be great for those backed by solid companies, the survivors will get more market share by working to develop and deliver high quality service locally as the market volume continues to grow and recover. You have fought too hard and long and are one of the survivors to just throw in the towel. Choose the right company to partner with so that you can be there to seize the business. Carpe diem!

ALABAMA Allied Home Mortgage Corporation Lawhorn & Associates Mortgage ARIZONA Adecco Allied Home Mortgage Amerifirst Financial First Place Mortgage Hunter Financial Group Mohave State Bank Mortgage Broker / Banker Peoples Mortgage Company

JUNE 2011 



CALIFORNIA ACG Funding Inc. American Capital Credit Corporation American Pacific Mortgage AMX/Land Home Financial Associated Mortgage Group Athas Capital Group, Inc. Bank of Manhattan, Bay Equity Wholesale C2 Financial Corporation Caliber Funding Carrollton Mortgage Co. Castle & Cooke Mortgage Citylights Financial Experess, Inc. CMG Eastland Financial Corporation First Allied Financial Services, Inc. First Priority Financial Residential Mortgage First Rate Financial Garret Associates Greenlight Financial Guild Mortgage Company HPC Real Estate Investments & Financial Icon Residential iServe Residential Lending JMAC Kinecta Federal Credit Union Loan America Mortgage Express Nations Direct Mortgage Oak Tree Home Loans and Opes Advisors Paramount Residential Mortgage Group, Inc. "PRMG"...................................................................................................................... Partners Peoples Bank Provident Bank Mortgage Provident Lending Group Quest Strategic Reunion Mortgage Inc. RPM Mortgage SecurityNational Mortgage Company Sound Mortgage, Stearns Lending Stewart & Soss Mortgage Wells Fargo Home Mortage COLORADO Abacus Financial Inc Affiliated Financial Group, Ascent Home Loans, Inc. Bank of England dba ENG Lending First California Mortgage Integrity Mortgage & Financial Inc Met Life Home Milestone Mortgage Pinnacle Mortgage Group, Inc. Shea Mortgage Sierra Pacific US Mortgages W. J. Bradley Company

CONNECTICUT Anilom Mortgage Gold Coast Mortgage Hamilton Ladd Home Loans Luxury Mortgage Corp Rapid Response Mortgage Services, LLC Total Mortgage Services/TMS Funding FLORIDA Access Reverse Mortgage Corp Certified Mortgage Planners Coast2Coast Lending Empire Funding Enterprises FBC Mortgage, Gulfside Mortgage Innovative Mortgage Services, Inc. LoanWell America, Mortgage Brokers Network Corp, Inc Newbold Advisors Premium Credit Bureau Prosperity Financial Group Realnet Lending Group Royal Capital Group Terrace Mortgage Company Thomas D Wood and Company VanDyk Mortgage Corporation GEORGIA Allied Home Mortgage Corporation Amerisave Mortgage CBC National Bank CFI - First Century Bank, N.A. Good Friend Mortgage, Inc Home Mortgage Corporation Hometown Lenders LLC LoanSouth Mortgage LSI Mortgage Plus National Mortgage Alliance, a division of Georgia Banking Neighborhood Mortgage Peachtree Mortgage Services, Inc. Primary Capital Mortgage Real Estate Mortgage Network, Inc. Southeast Southeast Mortgage Fayetteville Branch Southern Capital Mortgage ILLINOIS 1st Advantage Mortgage a Draper and Kramer Company Allied Home Mortgage Corp. Westchester, IL Blaydes & Associates Caliber Funding LLC Capital Financial Bancorp, Chicago Bancorp CU/America Financial Services, INc. Lakeside Mortgage and Loan Corporation Marquette Bank Mortgage Banker Opus Capital Markets Consultants Partners In Mortgage Quality Mortgage Lending Resource Plus Mortgage Supreme Lending- Naperville The Money Shop, Inc. The PrivateBank & Trust Co. VanDyk Mortgage Corporation INDIANA Allied Home Mortgage Allied Home Mortgage Corporation Amtrust Mortgage Funding Inc. Community Mortgage Corp, Royal United

continued on page 42

a la mode, inc Website: Phone Number: (405) 359-6587 Email:

AMX/Land Home Financial Website: Phone Number: 1-800-349-4172 Email:

Company Bio

Company Bio

a la mode is the company behind Mercury Network, the nation’s premier vendor management platform for lenders and appraisal management companies to manage appraisals and BPOs. We’re also one of the nation’s largest developers of software for appraisers, inspectors, real estate agents, lenders, and mortgage brokers. We’re highly profitable, and we’re hiring. (Amazing these days, isn’t it?)

MX/Land Home Financial Services Wholesale Lending Division is a premier full service direct lender for over 20 years in 40 States; our company is a leader in providing diverse mortgage products at competitive prices and superior customer service levels. Managed by a team of knowledgeable career mortgage banking and technology professionals, we are excited to offer rare opportunities to join us at the ground floor as we expand our business model to embrace wholesale lending.

Positions Available Mercury Network Account Executives

Locations Oklahoma City, Oklahoma 73134

Positions Available Wholesale Account Executive

Locations Open territories throughout California, Oregon, and Washington

Associated Mortgage Bankers Inc. Website: Phone Number: (516) 394-1420 Email:

Freedom Mortgage Corporation Website: Phone Number: 1-800-220-9495 Email:

Company Bio

Company Bio

Associated Mortgage Bankers is an industry leader that prides itself on providing support and service to customers and real estate professionals and believes that people are it’s biggest asset! AMB is a Full Eagle FHA & Conventional Lender with access to the best Jumbo, Condo & Co-op programs available. AMB banks 100% of all Reverse mortgages. AMB also allows you to offer to multi-family & commercial loans to your borrowers. We have multiple large warehouse lines and are signed on with all major investors.

The BEST Branch Solution, Period.

Positions Available AMB has been experiencing tremendous growth in the market and is seeking NMLS-licensed loan officers, call center agents, and teams of MLOs to handle an abundance of leads. Our in-house marketing department generates Internet leads, telemarketing leads, direct mail leads, & newspaper leads in the states we are licensed, including NY, NJ, CT, PA, MD, VA, GA, FL, TX and CA. We provide a generous compensation plan with Medical, Dental, and 401k.

Positions Available Branch Managers Loan Originators

Locations Nationwide FHA Lender

Locations Garden City, LI, New York Ronkonkoma, LI, New York

Bay Equity Wholesale Lending Website: Phone Number: (602) 402-1599 Email:

Guaranteed Home Mortgage Company, Inc. Website: Phone Number: 1-888-329-4462 Email:

Company Bio

Company Bio

Bay Equity is an expanding San Fransico based lender focusing on 11 Western states. Offering Agency, FHA and VA lending.

Currently producing Account Executives and Area Sales Manager in the following states: Arizona, California, Colorado, Nevada, Oregon, Texas, Washington and Utah!

A mortgage investment and banking firm founded in 1992, strives to provide competent residential mortgages to consumers and real estate professionals. As a renowned leader Guaranteed prides itself on the support and service provided to our clients and employees. With that belief of our development platform that it's the people within that define the institution, Guaranteed continues to search for individuals who share the same passion for lending, respect for the individual and dedication to making a difference.


Positions Available

Arizona, California, Colorado, Nevada, Oregon, Texas, Washington and Utah!

Branch Managers, Mortgage Originators, Processors, Underwriters

Positions Available

Locations White Plains, NY

41 Benchmark Website: Phone Number: 1-800-236-1824 Email:

HVCC Appraisal Ordering, Inc. Website: Phone Number: (949) 600-6506 Email:

Company Bio

Company Bio

Benchmark is a community of mortgage professionals united by the Benchmark Core Values. Our unique cloud computing technology platform gives our partners the power to deepen relationships, create new products, close loans early, create Realtor partnerships and provide superior service during the most highly regulated environment in the history of the industry. Our competitive advantage is forged on national expansion featuring innovative loan products, a service culture, efficiency in execution, technology, a national brand presence, and most importantly, our people.

HVCC Appraisal Ordering, Inc. began on June 1, 2009 shortly after the inception of the home valuation code of conduct. The company was started by Lance J. Siegel, President (34 years appraisal experience) and Steven A. Smith, CEO (24 years appraisal experience). Nationwide appraisal management with over 40,000 appraisers.

Positions Available Benchmark is creating a community of mortgage banking professionals that build their business on relationships and core values across the United States. These top producers are united by the Benchmark core values and practice what they do best every day because of the corporate team, technology, financial position, product selection and processes that Benchmark offers to their partners. Do you have what it takes to join one of the fastest growing branch mortgage companies? If so, we welcome a conversation.

No positions currently available

Locations HVCC Appraisal Ordering, Inc. TEL 866/396-6260 Website:

Locations Across the country in most states

Icon Residential Lenders Website: Email:

Company Bio

ICON RESIDENTIAL LENDERS is GROWING in markets across the country and is seeking top producing Wholesale Account Executives!

The nation's 12th largest lender, we’re expanding our Home Lending Business Channel. A longtime Broker/Correspondent wholesale leader, we’re committed to our lending partners, and can lend in all 50 states. Our products & technology include Agency/FHA/VA/ Portfolio & Rural Product(s), Jumbo Fixed & ARM, eOrginate/eProcess/eUW/eDocs/ eClose, LO Websites, Co-Branded Servicing Statements, Database Campaign Management Tools and more. Equal Opportunity Employer.

Positions Available Loan Officers Branch Managers


Join the Icon Team and experience the benefits: Above Industry Standard Compensation Plans, Excellent Employee Benefits Package, Competitive Pricing, Outstanding Customer Service, Paperless Loan Submission Process, Bank Subsidiary If you’re a top producing Account Executive explore how ICON RESIDENTIAL LENDERS can help you take your career to the next level. Please forward your resume to

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

Locations Opportunities Available Nationwide.

 JUNE 2011

Nationwide; ask for specific state details.

Positions Available


Flagstar Bank Home Lending Website: Phone Number: 1-866-697-8245 Email: 

Positions Available

Sagamore Home Mortgage, LLC Southwest Funding, LP - Branch 777 Wintrust Mortgage KANSAS Catalyst Lending, Inc. Inlanta Mortgage - Kansas City LeaderOne Financial Corporation Signature Mortgage Group KENTUCKY Allied Home Mortgage Corporation LOUISIANA Allied Home Mortgage Corporation Assurance SB Mortgage MAINE Allied Home Mortgage Corporation

MASSACHUSETTS American Mortgage Resource New England Capitol Mortgage Zenith Mortgage Advisors,

RHODE ISLAND Allied Home Mortgage

MINNESOTA Allstate Home Mortgage American Mortgage and Equity Consultants, Inc. CNC Mortgage, LLC

NEVADA Allied Home Mortgage Corporation - Las Vegas HVCC Appraisal Ordering, Inc. Sierra Pacific Mortgage Company, Inc


OREGON Allied Home Mortgage\Br1692 Landmark Professional Mortgage Company One Source Lending Vantage Mortgage Group, PENNSYLVANIA Allied Home Mortgage Corporation GMAC Mortgage, LLC Primary Residential Mortgage Inc U S Loans Mortgage LLC

MISSOURI Envoy Mortgage ..............................................................................................................WWW.4STLOANS.COM Envoy Mortgage - Chesterfield, MO Office Fidelity Bancorp Flat Branch Home Loans LenderCity Mortgage Resources Inc. NewCastle Home Premier Mortgage Services,

JUNE 2011 

OKLAHOMA a la mode, inc Fairway Independent Mortgage

MARYLAND Academy Mortgage Corporation West Town Savings

MICHIGAN Allied Home Mortgage Corporation Anderson Financial Group, Inc. Firstmark Financial, LLC Flagstar Bank Home Lending Polaris Home Funding Shore Mortgage Sistar Mortgage Team Mortgage Company LLC Top Flite Financial, Inc. United Wholesale Mortgage VanDyk Mortgage Corporation


Hartford Lending Group, LLC Huntington National Bank Lynx Financial Group, LLC Rapid Mortgage Company Real Estate Mortgage Broker Residential Finance SIRVA Inc. Union Savings Bank Union Savings Bank

NEW HAMPSHIRE Omni Mortgage Company, Inc. NEW JERSEY Acre Mortgage & Financial. Inc. Allied Home Mortgage Corporation Allied Home Mortgage Corporation Allied Home Mortgage Corporation Approved Funding - Mortgage Bankers BCB Community Bank CTM Job Solutions AKA eMortgage Management LLC Freedom Mortgage Money Tree LLC Mortgage Unlimited, National Mortgage Staffing REMN Real Estate Mortgage Network Residential Home Funding Corp. NEW MEXICO Sierra Pacific Mortgage New Mexico NEW YORK Advanced Funding Solutions Inc. DE Capital Guaranteed Home Mortgage Company, Inc. Interstate Home Loan Center LW Integrity Funding Meadowbrook Financial Mortgage Bankers Nationwide Equities Corporation New Penn Financial LLC PNC Mortgage Richland Equity Resources Corp. Terrace Capital The Funding Source,LLC United Northern Mortgage NORTH CAROLINA Key Mortgage. LLC New American Mortgage SVI Recruiting OHIO Fairway Independent Mortgage Corp. Flagship Mortgage

SOUTH CAROLINA First Home Equity TENNESSEE Allied Home Mortgage Corporation American Mortgage Service Company Franklin American Mortgage Co. iServe Residential Lending Mortgage Investors of Knoxville, Realty Center Mortgage, LLC United Capital Lending TEXAS 1st Alliance Mortgage LLC Allied Home Mortgage Corporation Allied Home Mortgage Corporation ..............................................................www.alliedcorphome/jameyhodge Allied Home Mortgage Corporation AmCap Mortgage, America's Choice Home Loans American Home Free Mortgage, LLC Eastern Capital, LLC EVC Software Inc F & M Bank Mortgage Finance Austin Associates, LP HomeStart Capital LLC Hunter Financial Group LeaderOne Financial Mortgages & More, Inc Mortgages Nationstar Mortgage Open Mortgage Paramount Residential Mortgage Group PNC Mortgage Rowlett Mortgage Lending, Ltd Service First Mortgage Southwest Supreme Lending Supreme Lending - Nunez Group Town Square Mortgage......................................................................................www.townsquarefinancial.coom Zeus UTAH Academy Mortgage Corporation City 1st Flagship Financial Primary Residential Primary Residential Mortgage, Inc. Security National Mortgage VIRGINIA Acacia Federal Savings Bank ...................................... Allied Home Mortgage Corporation Allied Home Mortgage Corporation Branch 3043 Benchmark Mortgage Inc. Capital One Cardinal Financial Company LP Dominion Residential Mortgage Fannie Mae Genworth Financial TrustMor Mortgage Company, LLC WestStar Mortgage, Inc. WASHINGTON Allied Home Mortgage Cascadia Eastlake Mortgage Evergreen Home Loans Fairway Independent Mortgage Corp. - Northwest Region First Rate Financial LLC Premier Finance WISCONSIN Educated Mortgage Services First Fidelity Home Mortgage of Wisconsin, LLC ..............................................................www.WeSayOk.Com GSF Mortgage Corporation GSF Funding Website: Phone Number: 1-888-337-6888 Email:

REMN Real Estate Mortgage Network Website: Phone Number: 1-866-933-6342 Email:

Company Bio

Company Bio

Responsible lending always means putting our customers first. We’ve been doing that for over 25 years and will continue to innovate, educate, and drive positive change for our customers. For over two decades, we've devoted ourselves to empowering our customers through knowledge and choice.

Founded in 1989 and headquartered in Edison, New Jersey, Real Estate Mortgage network serves the lending needs of mortgage brokers and bankers across the country. Our associates are passionate about customer service and focus on bulinding long-term business relationships. We offer both government and conventional products, helpdesk and same day underwriting on new file submissions.

In order to be successful we need the industry’s top talented individuals. Come join loanDepot. Our company. Your career. Together we grow.

Positions Available NMLS Licensed Sr. Mortgage Bankers-Orange County California Experienced Retail Sr. Processors - Orange County California Experienced Wholesale Account Executives - Western Region/Southern California Experienced Retail and Wholesale VA Underwriters - Orange County California

Positions Available We are growing our Account Executive sales team! Looking for succesful, experienced sales people with backgrounds that include both government and conventional lending. Work with a great group of people who share a passion for customer service. Positions available across the country. Contact us for details and available territories.

Locations Nationwide, contact us for available territories.

Locations Orange County California

Menlo Park Funding Website: Phone Number:1-877-896-8496 Email:

Total Mortgage Services/TMS Funding Website: Phone Number: 1-888-371-2989 Email:

Company Bio

Company Bio

Menlo Park Funding is the Certified Branch business channel of REMN, Real Estate Mortgage Network. Founded in 1989 and Headquartered in Edison NJ, REMN serves the lending needs of brokers, bankers and borrowers across the country. Our associates are passionate about customer service and focus on building long term business and consumer relationships. Branches have full use of REMN resources including administrative, technology, compliance, training, HR and our helpdesk. Same day turn times on new submissions recieved by 11 am.

In business since 1997, Total Mortgage Services is a nationally-recognized, Connecticut-base mortgage banker, acknowledged as one of the fastest growing private financial services companies in the country. In 2009 the company established a wholesale lending operation, TMS Funding. TMS is known throughout the mortgage industry for its commitment to customer service and excellent pricing. Through continual investment in sales and operational staff in both its retail and wholesale operations, TMS continues to be a leader in the mortgage industry.

Positions Available

Positions Available

Menlo Park Funding is looking for successful owners and branch managers to join our growing branch channel. Enjoy an affiliation with a respected National lender, while maintaining your entrepenuerial spirit.

Locations Branch opportunities available to qualified individuals across the country.

Total Mortgage Services has open positions for recent college graduates and experienced Loan Officer candidates in our Milford Connecticut Office. Our Wholesale division, TMS Funding, is looking for seasoned Wholesale Account Executives in TX, CO, NC, CA. Milford Operations is looking for Underwriters and Closers with a minimum 5 years experience. Come join a great team!

Locations Milford, Connecticut

43 Mortgage Brokers Network Corp, Inc Website: Phone Number: 1-888-589-7048 Email: Company Bio Mortgage Brokers Network, The Leading Mortgage Industry’s Matchmaker, offers the ability to place you with some of the top Mortgage Net Branch Companies in the mortgage industry, with strong compensation plans!

United Northern Mortgage Bankers, Ltd. Website: Phone Number: 1-888-600-8808 Email: Company Bio

Positions Available

Positions Available

Hiring Branch Managers and Loan Officers to open a mortgage branch in their area. Mortgage Brokers Network offers mortgage net branch opportunities nationwide with Multi-State lending. Our mortgage companies we work with are all licensed mortgage bankers and require that you are licensed in your State and registered with the NMLS. Most of our mortgage companies payout 100% or they charge a small flat fee per loan. We looking for orignators actively originating loans for the past two years minimum.

United Northern Mortgage Bankers is seeking Branch Managers, Team Leaders, and Mortgage Loan Originators to join our team of industry leaders.

Locations NY, NJ, PA, CT, FL, MA, SC, and NC

Locations United States, all Cities

Company Bio Nationstar Mortgage, formerly Centex Home Equity, is a leading mortgage lender and servicer offering a variety of mortgage programs. Purchased by Fortress Investment Group in 2007, Nationstar is a top 40 originator, the 17th largest mortgage servicer, and the 15th largest Wholesaler (and fastest growing!). Nationstar offers competitive compensation and a benefits package which commences on your first day of employment. For more information please send an email to or apply on-line at

US Mortgage Corporation Website: Phone Number: (631) 580-2600 Email: Company Bio About US Mortgage Corporation Founded by Steven A. Milner in 1994, US Mortgage Corporation, formerly Mortgage Concepts, is a mortgage banking company specializing in the origination, underwriting, and servicing of residential mortgages. Headquartered in Bohemia, NY, US Mortgage Corporation is a HUD approved FHA Direct Endorsed Lender providing retail mortgage lending and reverse mortgage lending to potential homeowners throughout the United States. For more information, visit

Positions Available

Locations Across the US.

Positions Available Licensed Loan Officers, Branches, Operations & Underwriting professionals, support staff.

Locations Please see website for current locations.

 JUNE 2011

Nationstar Mortgage is agressively looking to grow our Retail and Wholesale channels and currently have muliple Retail Loan Officer's and Wholeslae Account Executives positions available across the US, along with managment opportunities. If you are looking for an aggressive company and have the ability to exceed sales expectations, we'd love to speak with you. Feel free to send an email to or apply on-line at


Nationstar Mortgage Website: Phone Number: (972) 956-6867 Email: 

With hundreds of retail mortgage net branch employment opportunities out there, making a choice on who to sign up with is not an easy task! Mortgage Brokers Network can save you time and energy trying to find the best mortgage net branch opportunity that will fit your needs.

Since 1979, United Northern Mortgage Bankers, Ltd. has exemplified ingenuity, integrity and leadership in the mortgage banking industry. Built on a solid foundation and guided by seasoned leadership, United Northern Mortgage Bankers, Ltd. has achieved steady and consistent growth by leveraging opportunities created by the ebb and flow of market shifts and industry expansion. A cornerstone of the company’s philosophy is anticipating rather than reacting to ensure that the company and its loan originators are positioned to succeed.

And the RE EAL customer is???

Enforrcement of the t Red Flag g Rule has Begun! B

Red Fla ag Complliance i the is tth LAW! W Are e you prepared? ?

Protec ct your firm frrom Fines s and Penaltie es. 44

Majestic Security, LLC will professionally produce everything you need to be compliant: ~ A customized written F.A.C.T.A. Red Flag Policy ~ A Red Flag Checklist to simplify identifying Red Flags ~ A Gramm, Leach, Bliley Internal Security Policy

JUNE 2011 


~ A customizable Vendor Compliance Letter ~ An Incidence Response Plan in the event of lost data

all ll fo for only l $349.0 $349 00 0 A simple e 5-minute call is all it take es.

88 88-331-2332 Yo ou can also ord der directly from our o website: www.majestic

Also o Av vailable e:

Quality y Control Polic cies SAFE Act Po olicies and Procedures


National Association of Mortgage Brokers

We are the Preferred Provider off Compliance Solutions for the National Association of Mo ortgage Brokers

heard on the street

continued from page 31

bine our market experience with better data and analytics.” The combined company offering includes appraisal, title, flood, credit and settlement services, performed by the former MDA Lending Solutions, combined with the real estate property data, analytics and advanced decisioning synonymous with the DataQuick name. “Our clients in the lending community have said that the market lacks a provider who can effectively solve business problems by deploying a broad range of capabilities across a national footprint,” Walsh said. “DataQuick fills that gap by delivering unique customer-focused solutions that drive time, cost and risk out of real estate transactions and portfolio management.”

LenderLive Network Taps Into Hudson Cook to Monitor Doc Compliance LenderLive Network Inc. has announced that it has selected the law firm Hudson Cook LLP to monitor the compliance of its mortgage documents. Hudson Cook reviewed and provided guidance on all of LenderLive’s application disclosure and closing document packages, which are provided through its document preparation division that is built on the company’s Guardian Mortgage Documents platform. The review ensured that legal and ancillary documents are compliant with state and federal regulations. Hudson Cook will continue to monitor and change documents as needed. “LenderLive is committed to providing the best services and products to our clients,” said Rick Seehausen, chief executive and president of LenderLive. “We believe having one of the nation’s premier financial services law firms engaged to provide LenderLive a comprehensive document review and continued monitoring to ensure compliance with applicable state and federal laws shows the level of that commitment.” The review also included all junior lien instruments, ensuring that the documents comply with the simple language requirements, including the notes, mortgages and deeds required to secure the lender’s interest in the property. “In today’s lending climate, including the shortage of credit, scrutiny on all facets of lending and mortgage servicing and the record levels of borrower default, the least of the lender’s worries should be on the instruments and documents used in the transaction,” said Tim Meredith, partner with Hudson Cook LLP. “LenderLive’s continued engagement of our firm to support all facets

of their fulfillment solutions as well as all of the clients of the Guardian Mortgage Documents solutions enables just that.”

Urban Lending Solutions Selects FNC for Appraisal Technology Urban Lending Solutions Appraisals LLC (ULSA), a subsidiary of Urban Lending Solutions, has licensed FNC Inc. technology to streamline appraisal compliance and provide a top-notch workflow solution to its clients. ULSA inked a deal for FNC’s Collateral Management System (CMS), an extensive workflow and vendor management platform. FNC’s CMS includes the Generally Accepted Appraisal Rules (GAAR) Compliance Series, a component of the system that provides a consistent and automated review of each transaction, flagging violations that may indicate undue risk. “This deal was an opportunity for us to demonstrate our commitment to our clients and appraisers by providing them with leading-edge technology,” said Scot Rose, president and chief valuation officer for ULSA. “Our aim was to help them become more productive at a time when generating revenue is difficult and every dollar counts. Improvements to our back office benefit our clients every day. They gain because their valuations are more accurate and that keeps them in compliance with their investors. In addition, the standardized API makes integration with other FNC platforms a streamlined process and is a great value when working with other FNC clients.” The system documents the entire process, helps ensure appraiser independence and compliance with USPAP standards, and highlights potential appraisal or appraiser-related red flags. In addition, FNC technology automates vendor management, ordering and delivery of appraisals, and provides easy, secure communication with ULSA’s appraisers through “We saw ULSA’s potential for continued growth in the next few years, their commitment to customer service, and their commitment to building a longterm business—not to mention that their parent company is one of the fastest growing companies in the mortgage business —as compelling reasons to work closely together,” said Mike Mitchell, chief strategy officer at FNC. “ULSA has a deep understanding of the mortgage process from origination through the secondary markets. Throughout the life of the loan, they are committed to providing innovative, cost effective solutions.” continued on page 48

MortgageDashboard Expands Its Cloud-Based Offerings

JUNE 2011 



MortgageDashboard has added automated ticketing functionality and an instant chat feature to allow users of its Web-based MortgageDashboard loan origination software to submit trouble tickets and get help quickly without ever leaving the application. One of the reasons more leaders are seeking out cloud-based solutions for their mortgage banking software is because it puts their loan originators on the same network as their technology provider, making it easier to get support. MortgageDashboard is one of the first companies to capitalize on this fact to provide help and support in a more streamlined fashion. The enhancement is the first of many the company has planned as part of its “Be Better” campaign to help loan officers upgrade their mortgage loan software. “This is exactly what lenders are looking for when they buy into a Cloud-based LOS,” said Brian Clark, director of customer support for MortgageDashboard. “In today’s environment, borrower’s will not wait long for a loan officer to solve a problem. By making it easy to get help without leaving the application, lenders who rely on MortgageDashboard will have the support they need to close more loans.” Loan officers can use an instant chat feature from within the loan origination software to get help immediately. When a user enters a live chat with support personnel, MortgageDashboard tech support can tell exactly where in the application the problem is occurring. For more complex issues, an automated ticketing system gives users the ability to submit a request, in their own words and with screen shot attachments, without having to type anything. A trouble ticket is automatically issued and a confirmation email is sent that provides a link to log into the ticket to either add information or read notes or questions left by one of the company’s support specialists. MortgageDashboard loan origination system was one of the industry’s first cloud-based mortgage broker software applications, though at the time it

was released and became popular in the marketplace, systems delivered via the Internet were referred to as SaaS or Software as a Service offerings. As technology has evolved, MortgageDashboard has evolved with it.

Flagstar’s DocVelocity Releases Version 3.0 of Its Paperless Solution DocVelocity, a Web-based paperless processing system for mortgage bankers and brokers, has released DocVelocity 3.0. The centerpiece of the new Version 3.0 is an all-new interactive Threads feature for multiple users all along the loan process, as well as major enhancements to the functionality of the DV Desktop components. DocVelocity is the flagship product of Paperless Office Solutions Inc., a wholly-owned subsidiary of Flagstar Bancorp. DocVelocity is a Web-based paperless solution designed to simplify the mortgage loan origination experience, enabling mortgage bankers, correspondent lenders or brokers to shift easily to entirely paperless processing. It creates a paperless environment by allowing originators to collect, review and share mortgage loan documents electronically. It has easy options for turning paper into electronic files, accepts documents in most electronic formats, automatically names and sorts documents as they enter the system, and enables instant sharing of documents among staff, borrowers and lenders with the click of a button. “Our customers asked us to make it easier for their borrowers and partners to interact and do business with them,” said Jason Dufner, director of product development at DocVelocity. “We responded by creating version 3.0 to make it happen.” Key features of version 3.0 include:  DocVelocity Threads: This online customer portal connects everyone involved in the processing of a loan, from the originator’s staff to the borrower and third parties such as the title and appraisal companies. Originators can interact directly with the wholesale underwriter in the continued on page 50

heard on the street

rules and regulations covering residential lending.

as vice president of underwriting, and Lisa Kent as title officer.

continued from page 44

Mortgage Professionals to Watch  Total Mortgage Services LLC has announced the additions of Victoria Bextel as executive vice president of operations and Elaine Presta as wholesale operations manager for Total Mortgage’s wholesale channel, TMS Funding.  Bill Beckmann has joined MERSCORP Inc. and Mortgage Electronic Registration Systems Inc. as president and chief executive officer.

Marty Green Bill Beckmann

 Marty Green has joined the residential mortgage law firm Polunsky & Beitel, advising clients on the latest

 WFG National Title Insurance Company has announced the addition of Trevor Cheyne as assistant vice president and manager of the commercial division and senior escrow officer, A. Roger Blauvelt


Trevor Cheyne

 MortgageDashboard has announced the hiring of Jeremy Woodson as business development manager.  CoreLogic has named Arlene Hyde to the newly-created position of vice president of strategic relations for business and information services.  Brian Gilpin has been appointed vice president of capital markets for Embrace Home Loans.  Paul Sveen has joined Integrated Asset Services LLC as the company’s new chief executive officer.  Mike Dugan has joined Berkadia Commercial Mortgage as vice president of the company, and Berkadia has also announced the addition of Luther Peacock as chief risk officer.  Marcia Davies has been appointed to the position of chief of staff for the Mortgage Bankers Association (MBA).  Absolute Mortgage Banking has announced the appointment of Teri Saldivar as branch manager.  Aklero Risk Analytics Inc. has added Richard J. Downing as executive vice president of sales where he will be working to deliver technology-based solutions to residential and equity lenders.  Shore Financial Services Inc. has announced the appointment of Michael Jones as chief financial officer.

Your turn

JUNE 2011 


GREAT PRICE, GREAT PARTNERSHIP TMS Funding is your new lender of choice. • TMS Funding Believes Brokers Matter! • TMS Funding Helps You Compete! • TMS Funding is a Price Leader! • TMS Funding is Paperless, Quick, and Easy! • TMS Funding Empowers You To Succeed! Contact Us today to find out what TMS Funding can do for you!

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.


888.371.2989 Your Partner in Success!

326 West Main St. Suite 206 • Milford, CT 06460

2011 Mortgage Leader Cruise Sets Sail Oct 13th-17th

Visit for details.

• Multiple National Lenders • RESPA/Compliance Training

• Weekly Production Training • Multiple Warehouse Lines

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

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

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

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

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

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

A PRMI Company

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


Us Out!

Experience? Check! Knowledge? Check! Comprehensive nationwide quality control services with overthe-top attention to detail, the best customer care, plus reasonable prices? Check! When selecting a quality control service provider, AQC is the only choice. Isn’t it time you transferred quality control tasks from your checklist to ours?

JUNE 2011 



Post Closing Reviews Early Default Reviews Repurchase Reviews Suspected Fraud Reviews Rejected App Reviews Training & Consulting Give Us a Try ~ No Strings Attached

2 Free QC Reviews *New AQC Clients Only

Call Genny Kelly or Judy Nash-Ellis

770.931.5999 Quality Control Services . Training . Consulting

new to market

continued from page 46

Thread to streamline and speed communication. Threads create a transparent process where everyone can see all relevant documents, without compromising security.  DocVelocity Desktop: The enhanced Desktop (formerly DocVelocity Messenger) functionality in DocVelocity 3.0 combines the scalability and flexibility of a Web-based application with the speed and power of a desktop application. The new DocVelocity Desktop revolutionizes how users navigate and organize loan documents, thus increasing their productivity in an industry environment that requires employees to do more with less.

Coester Appraisal Group Announces New Repurchase Guarantee Program Appraisal management company (AMC) Coester Appraisal Group has launched a repurchase guarantee that protects its clients against appraisal-based buybacks. Effective immediately, Coester Appraisal Group will guarantee all original appraisals it completes moving forward. The guarantee is applicable for any appraisal-based repurchase request as long as the loan is in good current standing and not in any stage of delinquency. Coester Appraisal Group’s repurchase guarantee is automatically applied to any original appraisal completed by Coester Appraisal Group after June 1, 2011. The Coester Appraisal Group guarantee offers three levels of protection. Should the lender receive an appraisalbased repurchase request that falls within the guarantee program’s specific parameters, Coester will initiate and fulfill a formal rebuttal campaign to refute the repurchase request—completely free of charge to the lender. Should the company’s rebuttal campaign fail to successfully refute the investor’s repurchase request, and if the lender is required to repurchase the loan, Coester Appraisal Group will locate and secure a buyer for the loan. In doing so, Coester Appraisal Group extends its insurance coverage to protect the lender against any financial loss resulting from the sale of the repurchased loan, and will cover any difference between the loan amount and the subsequent sales price, should one exist. “Lenders have always been concerned about buybacks, and now with the Dodd-Frank bill, they have even more reason to be concerned,” said Brian Coester, chief executive officer of Coester Appraisal. “More regulations mean more chances of violation. There are over 60 pages addressing appraisals in the Dodd-Frank bill. If lenders aren’t careful, they could be inadvertently putting themselves at buyback risk. Now more than ever, lenders need an appraisal company they can trust. At Coester, we’re confident that we’re that company—and we’re willing to prove it

with our repurchase guarantee.”

AllRegs Releases ID Document Database for Fraud Prevention AllRegs has announced the release of the AllRegs ID Card Database, a comprehensive, online resource that contains card images and details of the most actively used driver’s licenses from all 50 states across the U.S., military IDs and passports. For each ID card, you can access what the card looks like with illustrated details of security features, layouts, and other discerning information that confirms the authenticity of the ID card. “We believe this is the first electronically available database featuring identity documents, such as driver’s licenses, passports and military IDs,” said Dan Thoms, executive vice president for AllRegs. “Our database includes graphics, details and security features. It should be utilized by any organization checking IDs for identity verification, check cashing, financial transactions and other security checks.” The AllRegs ID Card Database can be used by any security professional that has an Internet connection available to identify fraudulent identities. Subscribers should also complete training on how to identify fraudulent documents, also available through AllRegs. “Users of the AllRegs ID Card Database should include police officers, military officers, airport security, department of motor vehicles, alcohol beverage control, bank tellers, gaming and casino professionals, title companies and credit issuers,” said Thoms. “The database is a complement to our highly interactive fraudulent identity document training.”

LendingSpace Releases Its Automated NMLS Mortgage Call Report LendingSpace has announced the release of its automated solution that meets National Mortgage Licensing System (NMLS) Mortgage Call Report implementation requirements mandated by the federal SAFE Act. The Automated Mortgage Call Report function is among a full array of compliance solutions that comprise ComplianceOne, the suite of compliance-related technologies built into the LendingSpace end-to-end, loan origination system (LOS). “The deadline for implementing and submitting the Mortgage Call Report is imminent, and lenders who find themselves using a patchwork of their existing technologies to meet requirements will spend a great deal of time and resources to ensure impeccable compliance,” said Ravi Varma, chief executive officer of LendingSpace. “With a click of

a mouse, the Automated Mortgage Call Report function in our ComplianceOne suite gathers the information from the loan origination system, and formats it so that it’s ready for transmission to federal and state agencies. We are pleased to be first-to-market with a solution that so thoroughly resolves this compliance issue, while meeting the business need to control expenses.” LendingSpace technology is built by a team that includes both mortgage professionals and compliance experts who have in-depth understanding of the compliance challenges today’s firms face. The forward-thinking company has developed its ComplianceOne suite to provide first-to-market, superior solutions that address current and future challenges, such as loan officer compensation and appraisal management. “In today’s highly regulated environment, it is imperative to seek out technology providers who appreciate the complexities of compliance and work to seamlessly integrate technology and compliance,” said John Socknat, partner in the Mortgage Banking Group in Patton Boggs LLPs Washington, D.C. office. “A technology solution designed in that fashion is much more likely to be comprehensive: built with special knowledge of the array of regulations involved, and their impact on operations.”

ComplianceEase Announces Launch of RESPA Auditor 2.0 Launches to Assist With REOs and Short Sales Designed to decrease the amount of time it takes to process a short sale, a new Web site,, has been launched. The goal of the site is to shrink the transaction time of short sales and real estate-owned (REO) properties to weeks instead of months. By bringing together lenders, buyers, homeowners, and Realtors, aims to more quickly turn foreclosed, short sale and distressed residential properties back into family homes. The concept: Get pre-approved pricing from lenders, detail the properties on a site with a national reach to buyers, pay a standard commission to all Realtors

involved, then complete the sale with a streamlined paperwork process. With this approach, seeks to close on short sales in as quickly as 30 days. The site currently has approximately 3,500 listings driven by concentrations in Florida and California. PREO is talking to lenders around the country to grow its listings and expand its reach, and is focusing much of its initial efforts in states where foreclosure rates are highest, such as Florida, California, Nevada, Arizona, and Texas. “PREO’s system promises to be a major help to lenders who want to reduce their inventory of distressed properties,” said PREO President Eric Friedman. “We are very excited about the potential for our site to improve the flow of short sales, which will minimize lender and investor losses and help speed the housing recovery.”

New FICO Technology Seeks to Pinpoint Strategic Defaults FICO, a provider of analytics and decision management technology, has announced an analytic advance that substantially improves lenders’ ability to identify borrowers at risk of strategic default on mortgages. The company is consulting with top mortgage lenders to provide custom analytic solutions for their mortgage portfolios, allowing them to take preventative action and reduce the costly impact of strategic defaults. Strategic defaults occur when a borrower who has the capacity to make their mortgage payments chooses instead to default, often because the property value is less than the mortgage’s outstanding principal. Lenders have traditionally used the degree of home price depreciation as a basis for predicting strategic defaults; however, new FICO Labs research indicates that borrowers whose houses have lost the most value are only twice as likely to default as those whose houses have lost

the least value. Through the use of custom analytic models, FICO Labs researchers have demonstrated the ability to identify borrowers who are over 100 times more likely to default strategically than others. In addition, FICO Labs researchers have found that, as a group, strategic defaulters tend to be more savvy managers of their credit than the general population, with higher FICO Scores, lower revolving balances, fewer instances of exceeding limits on their credit cards and lower retail credit card usage. This indicates that strategic defaulters display a different type of credit behavior than distressed consumers who miss payments. “Mortgage payment patterns have shifted, and some borrowers are intentionally defaulting on their mortgages because they believe it is in their best financial interest, and because they believe the consequences will be minimal,” said Dr. Andrew Jennings, chief analytics officer at FICO and head of FICO Labs. “Before mortgage servicers can work effectively with potential strategic defaulters, they must first be able to identify them. Our new research shows it is possible for servicers to find those at greatest risk of strategic default, both to prevent losses and to prevent borrowers from making a decision that will damage their credit future.” The FICO Labs team built strategic default analytics to test the ability to rank-order both current and delinquent borrowers by their likelihood of strategically defaulting on their mortgage.


InHouse Inc. Launches Payment Processing Feature on Connexions InHouse Inc., an appraisal management company (AMC) and provider of appraiser management technology for banks, lenders, servicers, credit unions and other mortgage originators, has announced continued on page 52 


 JUNE 2011

ComplianceEase has announced the launch of Version 2.0 of the company’s automated Real Estate Settlement Procedures Act (RESPA) disclosure compliance solution RESPA Auditor. Since the launch of the initial version of RESPA Auditor, it has identified HUD-1 fee disclosure issues on nearly 20 percent of audited loans, enabling lenders to save an average of $1,000 in reimbursements on each of those loans. ComplianceEase has enhanced RESPA Auditor to enable lenders to implement complete end-to-end controls for their RESPA disclosure processes, from the initial Good Faith Estimate (GFE) at application to the HUD-1 at closing. ComplianceEase launched the initial version of RESPA Auditor in 2010 to target RESPA compliance at or after loan closing. This enabled lenders to ensure that fees disclosed on a loan’s final HUD-1 form increased only within allowable tolerances from the loan’s binding GFE. The industry quickly adopted the solution, auditing more then 120,000 loans over the last several months. Given the unprecedented interest in RESPA Auditor, as well as the number of disclosure issues that the solution was identifying, ComplianceEase quickly got to work on an enhanced version of the product that expanded its RESPA compliance features to cover the entire loan origination process. “After the initial version of RESPA Auditor had been in use for several months we were able to put some real numbers to the cost that disclosure

issues are imposing on the industry,” said Jason Roth, CMT, senior vice president of product development and engineering for ComplianceEase. “Our current RESPA Auditor clients, including lenders among the top five in the country, have identified violations that would have required more than $25 million to cure. With that much money at stake for just a few months’ worth of loans, it was clear that the industry needed a way to control their disclosure processes. That’s what RESPA Auditor 2.0 is all about.” The new Version 2.0 allows lenders to centrally manage and maintain the “changed circumstances” policies that govern when fees on disclosures are allowed to change. Audit reports can continuously test fees on multiple revisions of GFE disclosures to ensure that disclosed fees only change when allowed by the lender’s policies. Meanwhile, the system maintains a complete audit trail of who documented the “changed circumstances” and enables online collaboration throughout the origination process. Before closing, lenders can check which GFE is binding and confirm that their HUD-1 will be within allowable tolerances.

new to market

FHA Removes One Percent Origination Cap on the Ks

JUNE 2011 



With the Federal Housing Administration (FHA’s) Mortgagee Letter 2011-18, an originator is no longer limited to the one percent origination cap, and may now charge more than the traditional one percent origination fee on 203k rehabilitation loans (note that the guides for the supplemental origination remain the same). This change now makes the 203k or the “K” a more profitable loan for FHA originators specializing in renovation lending, and is effective for all case numbers assigned on or after April 26, 2011. Regarding the charging of fees, Mortgagee Letter 2011-18 states, “The lender may only collect fair, reasonable, and customary fees and charges from the borrower for all origination services, as described in Handbook 4155.2, 6.A.3.a.” This addendum is clearly FHA’s way of warning mortgage loan originators not to take advantage. As always, lenders need to remain aware of FHA’s Tiered Pricing Rules as outlined in Mortgagee Letter 94-16. This change was likely made in an effort to encourage LOs to offer the product by making it more profitable. Of course, for those with a flat fee compensation plan, this won’t make a difference. However, for those with a niche in rehab lending, it makes a lot of sense to be in the buyer-paid compensation plan. This allows for the flexibility necessary to structure the desired profitability based on the amount of time it will take to process any given transaction. It seems that the FHA realizes the great impact this product can have in purging the housing market of the real estate-owned (REO) inventory, and this change offers good incentive for LOs to offer this product. Given that there are very few LOs who are truly 203k experts (and I am not among them myself!), these rehab lending pros should be able to charge a premium for their expertise. When FHA changed the guidelines on forward loans allowing for borrowers to be charged the normal buyer fees (such as the processing and underwriting), followed by the one percent cap removal, the result was an immediate and significant increase in the FHA originator’s income. We now

have the same scenario with regard to the Ks, which should be pretty exciting to K experts, and presents ample motivation for them to develop and implement plans to increase their referral sources for the Ks.

Time for a new niche? For those of you looking for a new niche, the K may be a good option for you. However, and this is a big however, you must do an honest assessment of yourself and determine if your traits match the required skill set to become a K expert. The MLO who excels at the K is one who has the following traits, or has a team that comprises all of these four traits:  It is absolutely critical that you possess a thorough and good working knowledge of the K guides.  Excellent communication skills are extremely important in order to manage the myriad aspects of the process and to clearly set accurate and realistic expectations for all parties involved, namely the borrower and real estate agents.  One must have a foolproof system of follow up. One of the most common reasons borrowers have negative experiences with the Ks (just read the blogs), is that the follow-up was very poor and they really didn’t know what to expect.  One must possess the diligence to brand oneself as “The Local Expert for 203 K Rehabilitation Loans.” You can know the guidelines forwards and backwards, but if people do not know who you are, you won’t get any loans!

Social media The fourth item above is generally the toughest for an LO. However, with a focused social media plan, the right blogging know-how, and the proper implementation and diligence, you can, in time, come to gain the online equity you need to become the branded K continued on page 54

continued from page 51

that its Connexions appraisal management system now offers a new feature for conveniently processing appraisal payments online. Through a secure online link to the Connexions Web-based software platform borrowers can directly enter their credit card or automated clearing house information to pay lenders on the system for appraisals. The new payment processing feature notifies borrowers and lenders that payments have been approved and accepted. Also, lenders will know immediately if there are any payment issues in the appraisal process needing to be addressed and they can make appraiser payment adjustments more easily when additional work is required in an appraisal order. With the Connexions feature, lenders no longer have to manually pay appraisers and worry about possible missing invoices and delayed payments to vendors. After accessing a borrower’s credit card payment, lenders then can pay appraisers directly on Connexions, giving them the opportunity to lower accounting expenses. And there is no need for lenders to incur the expense of setting up a payment storage plan in a separate database when processing payments on Connexions. The new payment option also enables lenders to make refunds and readjust payments for appraisals, and to address vendorspecific refund policies. “The payment processing feature will help lenders improve their margins by giving them better control of their cash flows,” said Jennifer Creech, president of InHouse Inc. “Lenders will know immediately on Connexions what payments are coming in, which appraisers need to be paid and when they need to be paid. InHouse can hold the funds for them and handle the process from beginning to end, or lenders can set up an account in their name and be responsible for the management of the funds.”

LPS Announces Single-Point-of-Contact Requirement Compliance Solution for Servicers Lender Processing Services Inc. (LPS) has announced that it has developed a solution to help mortgage servicers respond to the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board (FRB)-issued consent orders announced on April 15th. A key element of these consent orders is for mortgage loan servicers to provide their borrowers with a dedicated single point(s) of contact for specific mortgage loan servicing functions. LPS has proactively responded to the required consent orders by enhancing its mortgage loan servicing platform, MSP. Clients will be able to assign, view and easily obtain detailed information on the single point of contact assigned to each specific loan throughout the life of the loan.

“Offering mortgage loan servicers the ability to specify a single point of contact for each mortgage loan helps streamline loss mitigation workflows, increases borrower satisfaction with the process and enables mortgage loan servicers to comply with the proposed regulation quickly and easily,” said Greg Whitworth, executive managing director of LPS’ Servicing Solutions division. This enhancement adds a unique tracking field within MSP to record single-point-of-contact information, as designated by the mortgage loan servicer. LPS will also provide fields in ancillary products to support consistency across all communication channels. While the current focus on a single point of contact is specific to loss mitigation, LPS is working to broaden the scope of its single-point-of-contact functionality to all areas of mortgage loan servicing, whether that mortgage loan is current or in any stage of default.

MortgageFlex Collaborates With Xerox Mortgage Services on Enhanced Doc Management

MortgageFlex Systems Inc., a provider of lending and servicing solutions, has announced its integration with Xerox Mortgage Services’ BlitzDocs platform to provide lenders comprehensive and enhanced document management services. The combined offering provides customers with a roadmap to a complete eMortgage solution, including eDisclosures, investor eDelivery, and integrated processes that drive compliance and improve efficiency. BlitzDocs’ one-click integration to the MortgageFlex origination system, the Residential Lending System, enables lenders to seamlessly synchronize documents throughout the loan process and deliver them to consumers, business partners and investors. “MortgageFlex is an industry innovator that has built its business on a strong foundation of industry leadership and technology,” said Nancy Alley, vice president of product management, Xerox Mortgage Services. “The integration of the Xerox Mortgage Services and MortgageFlex platforms will provide comprehensive document management capabilities from the delivery of electronic disclosures to investor delivery to document archiving.” At the core of Xerox Mortgage Services’ offerings is the BlitzDocs Collaborative Electronic Loan Folder (eFolder). The eFolder provides disparate mortgage participants anywhere, anytime, simultaneous access to its contents. Regulated by role-based continued on page 54



Plus Postage & Handling

Part I: The new pillar of retirement security Part II: Marketing reverse mortgages: It’s all about education Part III: Originating reverse mortgages Part IV: Enhancing freedom: The essence of reverse mortgages Part V: A new frontier in mortgage lending

“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, simpleto-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


Think Reverse! Table of Contents

—Sarah F. Hulbert, President, Senior Financial Corporation and former four-term Co-Chair of NRMLA’s Board of Directors




“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.”

 JUNE 2011

new to market

continued from page 52

security measures, the various participants only see the loan information that is pertinent to their specific task. Providing integrated document delivery and the ability to accept eDisclosures, the eFolder provides the first of many stepping stones along the path to the eMortgage. “Leveraging Xerox Mortgage Services’ BlitzDocs, our clients can drive down costs and improve quality and compliance capabilities,” said MortgageFlex Systems Inc. Chief Executive Officer Lester Dominick. “We are very selective in choosing our business partners and Xerox met all our criteria for providing a high quality product with outstanding support while maintaining the highest level of integrity. We are certain that this partnership will add significant value for our clients.”

Wingspan Announces New Short Sale Management Program Wingspan Portfolio Advisors has announced the formation of the Wingspan Real Estate Network (WREN) for the purpose of offering an accelerated short sale management service to real estate professionals, lenders and

mortgage servicers. Wingspan has been providing a significantly faster short sale management service to primary servicers, investors and other mortgage stakeholders for the past year, and is now leveraging its capabilities to broaden the offering directly to the national real estate community. “The main gap has historically been the Realtor’s ability to navigate a complex process with numerous stakeholders while also obtaining timely decisions on short sale offers,” said Steven Horne, Wingspan’s founder and chief executive officer. “At Wingspan, we deal with servicers’ problem loans every minute of every day, and we speak their language. Marrying those skill sets with borrower-facing real estate expertise means that WREN can effect positive change: eliminating errors and faster short sales that work for all parties.” Horne has assembled a team of experts to form WREN. To develop the operations side of the business, Horne named Chris Plummer, an industry expert who has focused on corporate relocation, financial services and new business creation, as managing director for WREN. Plummer works closely with Wingspan executives E.J. Kite, senior vice president of information man-


JUNE 2011 


fha insider

continued from page 52

expert in your market. A wonderful example of someone who has done brilliantly in raising the integrity of our industry through social media is Mark Madsen with his mortgage video and blogging community geared to the consumer, Many mortgage loan originators have done an outstanding job under his guidance to brand themselves in their local markets. One example of an LO who has successfully branded herself as a K expert with the help of social media in her local market through is Wendy Werdmuller from First Priority Financial in California. I located Wendy online with the simple search phrase, “Alameda County CA 203k” which quickly brought up several of her articles on I then searched adding her name to a new search with “Wendy Werdmuller Alameda County CA 203k;” she was referenced in nine of the 10 Google entries listed. If I was a buyer looking for a mortgage professional who is an expert in the field of 203K, this would be a nobrainer. For LOs who are reading this and thinking, “Wow, that sounds easy,” you are partially right. Though each individual blog entry may be pretty easy, it is the diligence mentioned above that

“One must possess the diligence to brand oneself as ‘The Local Expert for 203 K Rehabilitation Loans.’ You can know the guidelines forwards and backwards, but if people do not know who you are, you won’t get any loans!”

builds the online equity, i.e., making blogging a daily habit. And of course, it’s not just writing blog entries, but learning and applying proper blogging skills, i.e., not just doing it, but doing it right. If after careful and honest consideration you still believe that this is the niche for you, then grab your pencil and paper (or, your laptop) and start writing your plan to become the K expert in your local market. Go FHA! Jeff Mifsud is founder of Michigan-based Mortgage Seminars LLC, a former FHA underwriter with 15-plus years of experience originating FHA loans, an FHA expert for and creator of The FHA Originator, a monthly FHA newsletter. Jeff may be reached by phone at (248) 403-8181 or visit

agement, and Robert Shiller, vice president of enhanced servicing solutions, on WREN’s daily operations and services development. “The idea behind WREN is bringing in real estate expertise and leveraging Wingspan Portfolio Advisors’ impressive capabilities to create a service platform where short sales happen with speed and ease,” said Plummer. WREN speeds the process by facilitating the short sale process from end-to-end for real estate professionals, negotiating offers with all parties, and using Wingspan’s servicing contacts and experience to clear a path to closing around the usual obstacles. By providing more transparency and facilitating the end-to-end process on behalf of the real estate professional, WREN’s executives expect their results will be about two to three times more efficient and successful than the national average for short sales.

Default Resource Announces the Launch of New Homeownership Outreach Program Default Resource, one of the nation’s foremost providers of default management, valuation and loss mitigation services, has launched a new homeownership outreach program geared to helping troubled borrowers stay in their homes while assisting servicers in their loss mitigation efforts. The dynamic program includes initial borrower outreach, door-knocking and in-person initiation of the loan resolution or short sale process. The service is fully compliant with the Fair Debt Collection Practices Act (FDCPA) and may be privately labeled to ensure protection of existing borrower relationships. “Leveraging our nationwide network of qualified and highly trained personnel, our homeownership outreach program was designed to maximize borrower contact and facilitate asset resolution while simultaneously enhancing the relationship between our clients and their customers,” said James H. Zeldin, executive vice president of Default Resource. “By utilizing both our diverse vendor network and our cooperative business model, our clients experience lower losses and greater homeowner retention.”

IDS Adds LO Compensation Compliance Disclosure to Its Docs In response to the changes to loan originator (LO) compensation issued by the Federal Reserve Board (FRB), International Document Services (IDS), a mortgage document preparation vendor, has provided its wholesale customers with a Broker Anti-Steering Loan Option Disclosure within in the idsDoc system so that brokers can certify that they have provided the borrower with the necessary information to achieve safe harbor under the changes to Regulation Z 226.36(e).

The Broker Anti-Steering Loan Option is now required when the loan officer receives the application and before the issuance of the Good Faith Estimate (GFE) or Truth-in-Lending (TIL) disclosure, as the loan information contained in these documents is document-specific. The new form does not include the necessary information for the applicant/borrower that provides safe harbor under Regulation Z 226.36(e). It merely provides documentation that the information was presented to the borrower, as the changes do not specify a particular format (verbal, written, etc.) in which the information must be presented. IDS gives clients the options of customizing their Broker Anti-Steering Loan Option Disclosure, which allows them to set-up the types of document packages in which they would like the disclosure to appear every time. Users also have the option to set-up clientspecific fields so they receive the disclosure on a loan-by-loan basis. “The LO compensation changes have been hotly contested, to say the least, and many people are still trying to wrap their heads around what this will mean for the wholesale market at large, as well as their individual businesses,” said International Document Services (IDS) President Curt Doman. “We wanted to make compliance with the changes as seamless as possible from the docs side by providing our customers an easy-tounderstand form that meets their individual needs.” The FRB’s LO compensation rule prohibits payments to loan originators, which includes mortgage brokers and loan officers, based on the terms or conditions of the transaction other than the amount of credit extended. The rule also prohibits any person other than the consumer from paying compensation to a loan originator in a transaction where the consumer pays the loan originator directly and it prohibits originators from steering consumers to consummate a loan not in their best interest based on the face that the loan originator will receive greater compensation for such loans.

Loan Officer Reporting Tool from Advantage Systems Provides LOs Access to Performance Data Advantage Systems Inc., a provider of accounting and contract management tools for the mortgage and real estate industries, has announced the launch of its Loan Officer Reporting Tool as a module within the Accounting for Mortgage Bankers (AMB) accounting system. The Loan Officer Reporting Tool builds on the capabilities of the Webbased Branch Reporting Module, drilling down further to give loan officers access to real-time loan-level data for each loan they have funded. By providing loan officers with detailed information regarding each of their loans and personal performance,

lenders decrease the number of phone calls from branches that must be fielded by the corporate office. In addition, if the lender has implemented the Commission Calculation Module, loan officers are able to determine their commission for each loan with the click of a button. “Improving lending efficiency is a top priority for branch managers and providing the loan officer with instant, Webbased access to granular information reduces time for the manager, the corporate headquarters and the loan officers themselves,” said Brian Lynch, president of Advantage Systems. “Branching continues to grow as more regulations are implemented and lenders increasingly need technology to automate a significant amount of the data transfer between the corporate headquarters and branches. Loan officers are also seeking the lenders that put the most control in their hands as the look for employment opportunities.”

Melissa Data Launches New Property Information Web Service

Melissa Data Corporation, a developer of high-performance data quality and address management solutions, has announced that customers can now access detailed property and mortgage data on over 140-million U.S. properties by using the company’s unique new WebSmart Property Web Service. The product offers everything from parcel and owner information to square footage to zoning and more on a given property. WebSmart Property ownership changes are updated weekly. The

data is divided into 12 main categories with more than 165 different information fields available. “What Melissa Data has is unique in the industry—a Web service that provides soup to nuts information on over 140-million properties in the U.S.,” said Greg Brown, director of marketing for Melissa Data. “WebSmart Property is invaluable for property investors, mortgage and refinancing lenders, developers, real estate professionals, risk managers, insurance agencies, and companies looking to target market products and services to homeowners.” For pricing flexibility, users have the option between a Basic and Detailed output. The Basic returns only the most important pieces of information in each category for a lower per-record

price. The Detailed output provides all available data for the property.

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

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

The Loan Post Releases New Short Sale Program



888-329-GHMC Openings for all mortgage professionals, originators, managers, operations.

(888) 329-GHMC EXECUTIVE OFFICES: 108 Corporate Park Drive, Suite 301 • White Plains, NY 10604

 JUNE 2011

Licensed in: AL, AR, CA, CT, DE, FL, GA, IL, IN, LA, MA, MD, ME, MI, NC, NH, NJ, NM, NY, OH, PA, SC, TN, TX, VA, WV and growing.


Call Kelley Berkheiser Today & Find out what Guaranteed can do for you! 

The Loan Post Inc., a provider of loss mitigation and short sales solutions, has announced the release of ShortSales360, a do-it-yourself private label short sales system that produces e-signature-ready documents for the federal Home Affordable Foreclosures Alternative (HAFA) short sales initiative. ShortSales360 offers the only available document automation with an e-signature option for short sale documents for all interested parties like real estate brokers and agents, borrowers, and servicers. The system also includes online portals for complete borrower HAFA file submissions to streamline the file intake and prequalification process, while also supporting real-time file updates for all concerned parties in a short sale transaction. ShortSales360 provides all the stepby-step tools needed for real estate brokers and agents, servicers and sub-servicers, non-profit mortgage counselors, attorneys and investors, among others, to manage the whole short sales process for distressed homeowners. The short sales software platform also helps manage third-party vendor relationships for legal, title and appraisal services, as well as real estate-owned (REO) property management. “Mortgage loss mitigation trends are pointing to more short sales as the fastest path to housing market recovery over the next two years,” said Chris Fuelling, chief executive officer of The Loan Post Inc. “In the race to put together HAFA and bank short sale packages, The Loan Post’s new ShortSales360 is the only software system that offers e-signature capability to expedite the short sales process. Borrowers can even draw their own signature inside any web browser. Nobody else has it.” ShortSales360 can auto calculate probable lender losses if a foreclosure is executed and the net investor benefit in a short sale transaction, so lenders and investors can determine if a short sale makes financial sense.

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

Church Financing

GSF Mortgage 15430 W Capitol Dr. Brookfield, WI 53005 1-877-494-4448

CONCORD CHURCH FINANCE NATIONWIDE FINANCING FOR CHURCHES Pre-qualify Online @ 800-926-0399 • Fax: 858-756-8108

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

• 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

Closing Gifts HVCC Appraisal Ordering National Appraisal Management Center Please call 866-396-6260 We help you Meet & Exceed UMDP enforced by the GSE’s We Improve your evaluation of collateral with “REALviewTM” Appraisals submitted in a MISMO/XML or PDF format. We’ve raised the bar for Appraisal Management Services!

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

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!!



JUNE 2011 

Cruise4Two-Loan Incentives 1-866-541-8077

StreetLinks Lender Solutions (800) 778-4920

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

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

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

StreetLinks industry-leading products include LenderPlus™ full-service appraisal management, LenderX™ lender-executed appraisal management software, BPOs, SCORe™ appraisal validation reviews and more. Our commitment to quality and service, embodied by our partnership approach to clients and appraisers, continues to set us apart as the nation’s premier lending solutions partner. For more information, visit

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!

Branch Manager United Northern Mortgage Bankers......888-600-8808 Flagship Mortgage Corporation ........1-800-492-5239 Multi-State mortgage bank has management opportunities available for experienced, successful & ethical professionals. Click/Email:

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.

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

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. 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.

Does Advertising in the Resource Registry Work? ....................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.

It just did! Call 888-409-9770 ext. 4 to Register your company.

Contact Management/CRM

Direct Mail

Document Preparation (SaaS)

LoyaltyExpress 877.938.1175

Your Complete Mortgage Marketing Solution. Call Us Today! (800) 922-9860

Docs on Demand 800-343-7160

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

• 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

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

WorkCenter CRM ....................................877.498.6888 A CRM & contact management solution designed for mortgage professionals. Automated campaigns & LOS synchronization make WorkCenter an intuitive timesaver for staying in touch with clients.

Doc Management

Continuing Education DocVelocity (877) 362-8356 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

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

Time is running out...are you ready?


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.

Document Preparation NYC Real Estate Expo LLC Anthony Kazazis - Director

• 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. •

646.210.2545 • 914.763.8008 Mortgage Banking Systems - ProClose 1360 Beverly Rd. Ste 200, McLean, VA 22101 800-783-2283 ·

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

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.

FHA Audit and Licensing

Direct Mail Best Rate Referrals ............................................800-811-1402

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

First National Compliance Solutions Inc. 1-800-400-4134 Bonnie Nachamie & Jonathan Pinard have assembled a team of experts to assist Mortgage Brokers, Mortgage Bankers, Federal and State Chartered Banks & Credit Unions with their mortgage compliance needs.

 JUNE 2011

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

Robertson | Anschutz 800-343-7160


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

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


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

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

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

MSS Learning Center (800) 963-1900 Email:


Hard Money/Private Lending


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.

ACC Mortgage, Inc. 932 Hungerford Drive #6 • Rockville, MD 20850 240-314-0399 • 240-314-0336 fax We are doing traditional subprime lending, fix & flip lending and hard money lending.

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

Income Verification Services


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

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

Loan Origination Systems

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

Loanbright 27902 Meadow Drive, Suite 375 Evergreen,CO 80439 866-391-2709 •

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.

Mortgage Builder Software 24370 Northwestern Highway, Suite 200 Southfield, MI 48075 800-460-5040 •

Loanbright helps mortgage companies capture and close more business through its marketing and software tools. An INC. 500 awardee, Loanbright has helped thousands of companies since 1999 by providing them with well over 3 million qualified sales leads.

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.

Platinum Credit Services, Inc.................631-299-2084

JUNE 2011 


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.


SM • 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.

Sign up with the Premier Jumbo Lender 877.464.0555, option 2 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

Loan Incentives

Cruise4Two-Loan Incentives 1-866-541-8077

Mortgage Forms Same Day Shipping (orders placed prior to 3pm et) 24/7 Secure e-Commerce Site Save 33-50% • • • •

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


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!!

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

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.

Retail Branch


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

(800) LOANS-15

Icon Residential Lenders (888) 247-4207 Icon Residential, a wholly owned subsidiary of Grand Bank N.A., is one of the nation’s leading Conforming, Jumbo, FHA and VA wholesale lenders. Our strength, success and longevity is derived from delivering customers service that exceeds our valued business partners expectations. With deep industry knowledge, financial stability and innovative technology we provide the solutions for our business partners to fund loans while avoiding risk. • • • • •

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

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

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.

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

Are you a broker/owner or current branch manager looking to expand your business into Mortgage Banking with FHA capabilities? Then our PARTNER BRANCH ADVANTAGE© program is perfect for you. We are offering you all the benefits of partnering with an established lender while still enjoying your independence. US Mortgage Corporation is a nationwide FHA Direct Lender with a 16 year long reputation of excellence. YOUR SUCCESS IS OUR SUCCESS!


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

Wholesale/Residential Wholesale Reverse Mortgages


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

NATIONWIDE Equities Nationwide Equities Corporation 201-529-1401

Secondary Marketing Consulting

We complete your applications for approval Save the time and hassle contact:

Now • Arizona • California • Colorado

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

Wholesale Lending in: • Nevada • Texas • New Mexico • Utah • Oregon • Washington

Title Intracoastal Abstract Co. Inc.................516-358-0505

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

Access these listings online at

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.

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

 JUNE 2011

Bookmark this!

Flagstar Wholesale Lending (866) 945-9872


Privately owned & operated full service title insurance agency in NY, NJ and FL, with affiliates throughout the US & Canada. Escrow Agent in Florida. 

Broker to Banker ..........(951) 746-3075

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

Iowa Association of Mortgage Brokers 2011 Annual Convention & Education Location to be determined For more information, call (515) 210-4675 or visit

Sunday-Tuesday, September 11-13

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

Tuesday-Thursday, September 13-15

JULY 2011

Thursday-Friday, August 4-5

Wednesday-Saturday, July 20-23

California Association of Mortgage Professionals Annual Convention “Summer CAMP: Scouting Out Success” San Jose Marriott 301 South Market Street • San Jose, Calif. For more information, call (916) 448-8239 or visit

Florida Association of Mortgage Professionals 2011 Convention “Reel in Success” Orlando World Center Marriott Resort 8701 World Center Drive • Orlando, Fla. For more information, call (850) 942-6411 or visit AUGUST 2011

Thursday-Friday, August 4-5

Mortgage Bankers Association’s Quality Assurance and Residential Underwriting Conference 2011 Hilton New Orleans Riverside 2 Poydras Street New Orleans, La. For more information, call (800) 793-6222 or visit


Sunday-Tuesday, September 25-27 Mortgage Bankers Association’s Regulatory Compliance Conference 2011 Renaissance Washington DC Downtown 1127 Connecticut Avenue Northwest Washington, D.C. For more information, call (800) 793-6222 or visit

Friday, October 14 Kentucky Association of Mortgage Professionals 2011 Annual Convention & Trade Show Location to be determined Lexington, Ky. For more information, call (270) 929-2836 or visit MARCH 2012

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





Thursday, September 8 2011 Minnesota Mortgage Association Convention & Exhibitor Showcase Sheraton Bloomington Hotel, Minneapolis South 7800 Normandale Boulevard Bloomington, Minn. For more information, call (952) 345-3240 or visit

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


Hawaii Association of Mortgage Brokers 2011 Annual Conference Sheraton Waikiki Hotel 2255 Kalakaua Avenue Honolulu, Hawaii For more information, e-mail or visit

Mortgage Bankers Association’s Mortgage Operations Conference 2011 Hilton New Orleans Riverside 2 Poydras Street New Orleans, La. For more information, call (800) 793-6222 or visit



Thursday, September 8




JUNE 2011 



Partner With US 1-800-LOANS15 US Mortgage Partners a division of US Mortgage Corporation

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


Call for De tails!

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