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O MAY 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.

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

MAMP Code of Ethics

5201 Lakeland Boulevard, S186 O Flowood, MS 39232 Phone #: (866) 844-6262 / (601) 919-2200 Fax #: (866) 542-9846 Web site:




Mississippi Association of Mortgage Professionals

Phone #



(601) 829-5000

Melissa Manseill


(601) 829-5000

Steve Daniels

Vice President

Margaret Byrd

Anthony Atkins, CMC, MRMS Immediate Past President

(601) 605-2728 (662) 536-2111, ext. 11



Benefits of MAMP Membership



The Professional shall act in accordance with all state and federal regulations. The Professional shall promote and support the actions and positions of MAMP. The Professional shall conduct business affairs with honor and integrity. The Professional shall not offer or advertise terms or conditions that are not available. The Professional shall not create, distribute or dispense any information that is known to be false, fraudulent or illegal. The Professional shall abide by federal regulations promulgated by the Federal Trade Commission (FTC) with regard to advertising. The Professional shall abide by all agreements, written or oral, made to the public. The Professional shall keep complete and accurate records of all transactions. The Professional shall maintain separate accounts for the deposit of trust or escrow funds. The Professional shall take all steps to avoid conflicts of interest with their clients, and if a conflict of interest comes to the attention of a member, to promptly disclose such conflict to all parties. The Professional shall conduct their business so as not to deny equal professional services to any person for reasons of race, color, creed, sex, religion, national origin, marital status, age or disability. The Professional shall keep all information acquired confidential unless release is authorized by the individuals in question. The Professional shall make representations in other areas of expertise only when duly licensed or accredited in the field. The Professional shall become knowledgeable as to new and innovative financing alternatives by attending educational seminars. The Professional shall comply with the By-Laws and Code of Ethics of MAMP and report violations of same to the Ethics Committee of MAMP

What is MAMP? The Mississippi Association of Mortgage Professionals (MAMP) is a nonprofit corporation dedicated to the representation of the interest of its membership.

MS 1

MAMP Mission Statement To protect and raise the standards of the mortgage industry while serving the needs of the consumer.

Who should join? Professionals involved in all aspects of mortgage lending who wish to have a say in their future and to be active in the direction the industry takes, both in Mississippi and nationwide. O

MAMP membership benefits O Free education: During the membership year, members receive 12 hours of MAMP-sponsored continuing education credits free. RML, online courses and education offered at convention are not included in free education. There is a $10 fee per course for materials. Additional MAMP-sponsored continuing education courses are $10 per credit hour for members.

O Certification program: MAMP has developed the Mississippi Residential Mortgage Specialist (MRMS) certification program to recognize mortgage brokers and loan originators who have attained the highest levels of professional expertise. O Mississippi Mortgage Professional Magazine: MAMP’s monthly electronic publication that keeps everyone up to date on current issues that affect professionals in the mortgage business.

O Protection of the interests of MAMP members through legislative lobbying: MAMP is involved in legislation that will positively affect your business, including licensing and lending practices. (search National Mortgage Professional Magazine)

O MAY 2011

O Networking: Annual Membership Meeting, Monthly District Luncheon Meetings and Socials.


O Free registration for the MAMP Annual Meeting and Trade Show (February): Professional and Loan Originator Members only.

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National Mortgage Professional Magazine






May 2011




Volume 3, Number 5





Accurate Quality Control .................................. ..........................................10 Bay Equity LLC ................................................ ....................................................4

A Special Look at “Building Relationships” Expanding Realtor Relationships By Stephen A. Marrs

Benchmark Mortgage ...................................... ..............................5 & 24 Calyx Software ................................................ ......................................32


Elliott and Company Appraisers, Inc................... ................................31 .................................... ..............................MS2

Social Media: More Than Just a Buzzword By Chad Jampedro


Flagstar Wholesale Lending .............................. ....................Back Cover Freedom Mortgage .......................................... ......................Inside Back Cover

Building Business Relationships Via Social Media By John Seroka

Internet Connections … It’s Not What You Think! By BJ Bounds

27 28

Frost Mortgage Lending Group .......................... ..............................34 GSF Mortgage Corporation ................................ ........................................39 Guaranteed Home Mortgage.............................. ....................................33 HVCC Appraisal Ordering .................................. ..........................29

A Roadmap for Building Relationships With Key Sources

Icon Residential Lenders, LLC ............................ ........................................9

By Casey Cunningham

Loyalty Express ................................................ ......................................12

Is Building Relationships on Social Media Worth It? By Joy Gendusa


Majestic Security LLC ........................................ ............19


Mortgage Dashboard ........................................ ................................35

Features Truth in Marketing By LoyaltyExpress Value Nation: Appraisers Must be Paid More By Charlie W. Elliott Jr., MAI, SRA, ASA

12 14


Leaders on the Frontline: Keeping the Entrepreneurial Spirit Alive By Stewart Hunter and Jim McMahan


By Jeff Mifsud

The Changing Landscape of Housing Finance By Teresa Bryce Bazemore

Ridgewood Savings Bank .................................. ......................................6 StreetLinks National Appraisal Services .............. ..........Inside Front Cover

US Mortgage .................................................... ............................................7 USA Cares ........................................................ ................................................22 Windvest Corporation ...................................... ........................................23

25 32 38

Columns NMP News Flash: May 2011

4 10

Letters to the Editor


New to Market


Mortgage Heroes: A True Neighborhood Hero


NMP Mortgage Professional Resource Registry


NMP Calendar of Events



 MAY 2011

Heard on the Street


FHA Insider: FHA Changes Rules on Advertising



By Dave Hershman

REMN (Real Estate Mortgage Network)................ ....................................37

United Northern Mortgage Bankers Ltd. ............ & 36

By David Lykken

The Secondary Market Overview: From Bonds to Production … LO Compensation and the Markets

Nationwide Equities Corp. ................................ ................................................8

TMS Funding.................................................... ..........................................11

The Future of the Mortgage Broker and Correspondent Markets: The Sequel By Andy W. Harris, CRMS 19 Lykken on Leadership: How Confident Are You?

NAPMW .......................................................... ..................................................13

PB Financial Group Corp. .................................. ..............................................31

Forward on Reverse: FIT for Reverse Mortgage Lenders (Part IX) … Medical Mobility Risk By Atare E. Agbamu 15 NMP Mortgage Professional of the Month: Lisa Schreiber, Executive Vice President of Wholesale Lending at TMS Funding ..................................44

May 2011 Volume 3 • Number 5



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. 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

The future of housing finance This month’s issue also features a great article from Andy Harris, CRMS on “The Future of the Mortgage Broker and Correspondent Markets.” This story is a follow-up piece that Andy did back in July 2010. In this article, Andy takes a step back from his role as a mortgage broker to evaluate the changes that our industry is facing and how they impact the mortgage broker and correspondent lenders. As we face these changes, strong leadership is crucial for the growth of mortgage companies, and our good buddy, David Lykken with his “Lykken on Leadership” column this month, gives an analogy between the mortgage banking industry and the famed Apollo 13 mission. Crucial to the growth of mortgage companies is keeping the entrepreneurial spirit alive, and mortgage banking experts Stewart Hunter and Jim McMahan share their thoughts on this topic in their “Leaders on the Frontline” column on page 24. At the recent Regional Mortgage Bankers Association Conference in Atlantic City, N.J., we had the pleasure of hearing Teresa Bryce Bazemore, president of Radian Guaranty, discuss the rise in FHA premiums and the efforts of the FHA to return to its role as a less dominant player in the housing finance industry. Read more about the growing role of private mortgage insurance companies like Radian as we deal with GSE reform, QRM and other obstacles the mortgage industry faces in Teresa’a article, “The Changing Landscape of Housing Finance,” on page 38.

Mortgage Professional of the Month This month’s Mortgage Professional of the Month is Lisa Schreiber, executive vice president of wholesale lending at TMS Funding, the wholesale lending channel of Total Mortgage Services. Lisa is a long-time hero of the wholesale business and dedicated fighter in keeping the mortgage broker alive and thriving for decades. Like most, she wound up in the mortgage business by accident, but learned just about every facet of the business, from processing to underwriting and even servicing. It seems to be the best leaders in the mortgage business are the ones who have been involved in every area of real estate finance, and Lisa is a prime example of that. Moreover, through the years, I have personally worked with dozens of mortgage professionals around the country who have showered Lisa with praise about how great of a leader she is. I find it amazing that she was such a driving force in mortgage banking, while being a single mother and very active in personal passion projects, such as rehabilitating schools in West Africa and as an advisor to an NGO. Read more about Lisa and her commitment to the mortgage broker beginning on page 16 of this issue.

Rounding things out Also in this issue, LoyaltyExpress discusses “Truth in Marketing” in its new column on page 12; Charlie W. Elliott Jr. presents his arguments on why appraisers should be paid more on page 14; Atare E. Agbamu discussing reverse mortgages and post-illness medical care on page 15; a look at Mortgage Hero Rachel Donovan of Legacy Mortgage in Albuquerque, N.M. on page 22 and Dave Hershman analyzes LO compensation and the financial markets on page 25. Until next month …

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




Building relationships in a hyper-connected world really isn’t much different than when “Add to Your Network” meant filing a contact’s business card in your Rolodex. Instead, we now use tools like CardMunch (a LinkedIn company) to scan, add to your address book and connect on LinkedIn. While the tools have changed to allow increased connectivity and to build those connections into mutually-beneficial relationships, it’s still your ideas, thoughtfulness and willingness to help others that build your relationships … whether it’s through Facebook, Twitter or your top real estate referral partner’s open house. Our special look at building relationships starts off with a piece from Stephen A. Marrs of Gold Star Financial discussing how showing your real estate agent referral partners lots of support and love will help you build a fruitful relationship for years to come. Casey Cunningham of XINNIX looks at targeting the right sources in fostering new business relationships. This section also includes four articles from some of the brightest marketing minds in the mortgage industry talking about social media. We’ve got Chad Jampedro of GSF Mortgage talking about how you should be genuine and yourself on social media. John Seroka of PR firm Seroka with a strategic plan behind building relationships via social media (hint … it’s not about the number of followers). BJ Bounds of Calyx Software breaks down Twitter and Facebook and determining what is the right option for you. Rounding out the section is an article from Joy Gendusa of PostcardMania detailing a number of ways how to actually generate leads from social media.


MAY 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.

Building relationships



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.

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 (248) 473-7400 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

 MAY 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

OCC, OTS and Fed Hit Mortgage Servicers With Enforcement Action


The Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS) and the Federal Reserve Board (FRB) have announced they have collectively taken enforcement actions against eight national bank mortgage servicers and two third-party servicer providers for unsafe and unsound practices related to residential mortgage loan servicing and foreclosure processing. The eight servicers in question include Bank of America, Citibank, HSBC, JPMorgan Chase, MetLife Bank, PNC, U.S. Bank, and Wells Fargo. The two service providers are Lender Processing Services

Inc. (LPS) and its subsidiaries DocX LLC, and LPD Default Solutions Inc.; and MERSCORP and its wholly-owned subsidiary, Mortgage Electronic Registration Systems Inc. (MERS). “These comprehensive enforcement actions, coordinated among the federal banking regulators, require major reforms in mortgage servicing operations,” said acting Comptroller of the Currency John Walsh. “These reforms will not only fix the problems we found in foreclosure processing, but will also correct failures in governance and the loan modification process and address financial harm to borrowers. Our enforcement actions are intended to fix what is broken, identify and compensate borrowers who suffered financial harm, and ensure a fair and orderly mortgage servicing process going forward.”

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MAY 2011 


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The enforcement actions require the servicers to promptly correct deficiencies in residential mortgage loan servicing and foreclosure practices that examiners identified in reviews conducted during the fourth quarter of 2010. The actions require the servicers to make significant improvements in practices for residential mortgage loan servicing and foreclosure processing, including communications with borrowers and dual-tracking, which occurs when servicers continue to pursue foreclosure during the loan modification process. The actions taken by the OCC, OTS and FRB require that each servicer to take a number of steps, including making significant revisions to certain residential mortgage loan servicing and foreclosure processing practices. Each servicer must, among other things, submit plans acceptable to the FRB that:  Strengthen coordination of communications with borrowers by providing borrowers the name of the person at the servicer who is their primary point of contact;  Ensure that foreclosures are not pursued once a mortgage has been approved for modification, unless repayments under the modified loan are not made;  Establish robust controls and oversight over the activities of thirdparty vendors that provide to the servicers various residential mortgage loan servicing, loss mitigation, or foreclosure-related support, including local counsel in foreclosure or bankruptcy proceedings;  Provide remediation to borrowers who suffered financial injury as a result of wrongful foreclosures or other deficiencies identified in a review of the foreclosure process; and  Strengthen programs to ensure compliance with state and federal laws regarding servicing, generally, and foreclosures, in particular. “MERS provides an important, dependable service for homeowners, their communities, the mortgage industry, and regulators. The Interagency Review provided us with some clear guidance on how we can do better,” said MERS Chairman Kurt Pfotenhauer. “MERS brings value to the real estate system today, and we’re confident that the changes we’re making will enhance that value.” Actions taken against the servicers are based on the findings of examinations conducted as part of the interagency horizontal reviews undertaken by the federal banking regulators in the fourth quarter of 2010. Examinations of these eight national bank servicers identified significant weaknesses in mortgage servicing and foreclosure governance that resulted in unsafe and unsound practices. The scope and degree of these practices differed among the servicers; however, based on the sample of files reviewed by OCC examiners, borrowers in the sample were seriously delinquent at the time of foreclosures and servicers held the notes and documents required to foreclose.

FHFA Orders GSEs to Align Guidelines for Servicing Delinquent Mortgages Federal Housing Finance Agency (FHFA) Acting Director Edward J. DeMarco has directed Fannie Mae and Freddie Mac (the governmentsponsored enterprises) to align their guidelines for servicing delinquent mortgages they own or guarantee. The updated framework will establish uniform servicing requirements, as well as monetary incentives for servicers that perform well and penalties for those that do not. “FHFA’s directive to align enterprise policies for servicing delinquent mortgages should result in earlier servicer engagement to identify the best solution available for homeowners, given their individual circumstances,” said FHFA Acting Director DeMarco. The updated guidelines also address the so-called “dual track” by requiring servicers to contact borrowers as soon as they become delinquent and focus solely on remediating that delinquency. The foreclosure process may not commence if the borrower and servicer are engaged in a good faith effort to resolve the delinquency. The servicer must conduct a formal review of each case to ensure a borrower has been considered for foreclosure alternatives before the loan is referred for foreclosure. Even after foreclosure processing begins, financial incentives are provided to encourage servicers to continue to help borrowers pursue a foreclosure alternative. Consistent with statements recently issued by federal and state regulators, this initiative is intended to deal with identified problems in mortgage servicing. The updated framework will streamline and expedite borrower outreach, align mortgage modification terms and requirements, and establish a consistent schedule of performance-based incentive payments and penalties. Fannie Mae and Freddie Mac will each issue detailed guidelines to their servicers in the second and third quarters of 2011. “Once fully implemented by the servicing industry, the enterprises’ aligned policies should give homeowners a greater understanding of the process and faster resolution by requiring earlier contact, more frequent communication, and prompt decisions,” said DeMarco. “Equally important, the newly aligned policies will minimize taxpayer losses by ensuring that enterprise loans are serviced efficiently and fairly.”

U.S. Slaps Deutsche Bank With $1 Billion Buyback for MortgageIT Loans U.S. Attorney Preet Bharara has filed a mortgage fraud suit in U.S. District Court in Manhattan against Deutsche Bank and its subsidiary, MortgageIT. The suit claims that MortgageIT lied about the quality of its lending practices in order continued on page 6





Positive Attitude

news flash


continued from page 4

to take advantage of the U.S. Department of Housing & Urban Development’s (HUD) and the Federal Housing Administration’s (FHA) mortgage insurance program. The government’s complaint seeks damages and civil penalties under the False Claims Act for repeated false certifications made to HUD in connection with the residential mortgage origination and sponsorship practices of MortgageIT. To date, the FHA has paid insurance claims on more than 3,100 mortgages, totaling $386 million, for mortgages endorsed by MortgageIT. According to the complaint filed in Manhattan federal court: In a 10-year span between 1999-2009, MortgageIT was an approved direct endorsement lender, having endorsed more than 39,000 mortgages for FHA insurance, totaling more than $5 billion in underlying principal obligations. These mortgages were highly marketable for resale to investors because they were insured by the full faith and credit of the United States. MortgageIT and Deutsche Bank, which acquired MortgageIT in January 2007, made substantial profits through the re-sale of these endorsed FHAinsured mortgages. According to the complaint, MortgageIT repeatedly made false certifications to HUD to obtain approval of

mortgages that MortgageIT underwriters wrongfully endorsed for FHA insurance. These mortgages were not eligible for FHA insurance under HUD rules. Notwithstanding the mortgages’ ineligibility, underwriters at MortgageIT endorsed the mortgages by falsely certifying that they had conducted the due diligence required by HUD rules when, in fact, they had not. By endorsing ineligible mortgages and falsely certifying compliance with HUD rules, MortgageIT wrongfully obtained approval of these ineligible mortgages for FHA insurance, thereby putting millions of FHA dollars at risk. In addition, MortgageIT and Deutsche Bank never implemented the quality control (QC) procedures required of direct endorsement lenders, but falsely certified to HUD that MortgageIT had the required procedures in place. On various occasions when HUD discovered evidence that MortgageIT was violating the QC requirement, MortgageIT falsely stated the failures had been corrected. “As alleged, MortgageIT and Deutsche Bank ignored every type of red flag and breached every duty of due diligence before underwriting thousands of federally insured mortgages,� said U.S. Attorney Bharara. “While the homes the defendants issued loans for may have been built on solid ground, the defendants’ lending practices were built on

quicksand. Ultimately, prudence was trumped by profit, and good faith took a back seat to good fees. This is exactly the kind of misconduct that our Civil Frauds Unit was created to combat.� In 2004, MortgageIT contracted Tena Companies Inc. to conduct QC reviews of closed FHA-insured loans. Tena prepared its findings in letters detailing rampant underwriting violations found in FHA-insured loans underwritten by MortgageIT’s branch location in Chicago. No one at MortgageIT read the Tena reports when they arrived in 2004, as the finding letters were forwarded to MortgageIT’s Manhattan base of operations and stored in a closet. “I personally believe there is no way that all 39,000 loans are bad,� said Tommy A. Duncan, CMT of Quality Mortgage Services LLC. “A test of 10 percent is what is needed to prove what percentage of loans are good, and Deutsche Bank then could have cause to dismiss the action.� Shortly after, MortgageIT hired its first QC manager in December of 2004, who requested to review the Tena findings only to be shown a closet containing the unopened letters. MortgageIT’s neglect of the Tena findings prevented the company from taking action towards amending these fraudulent underwriting practices. The government’s complaint seeks treble damages and penalties under the False Claims Act for the insurance claims already paid by HUD for mortgages

wrongfully endorsed by MortgageIT through the false statements of Deutsche Bank and MortgageIT. In addition, the United States seeks compensatory and punitive damages under the common law theories of breach of fiduciary duty, gross negligence, negligence and indemnification for the insurance claims that HUD expects to pay in the future for mortgages wrongfully endorsed by MortgageIT as a result of Deutsche Bank’s and MortgageIT’s false statements.

Class Action Suit Against Saxon Alleges Illegal Use of HAMP A class action lawsuit has been filed against Saxon Mortgage Inc., the Morgan Stanley mortgage servicer division, claiming that the company uses the Homeowners Affordable Modification Program (HAMP) to lure customers into making “trial� payments on loans it has no intention of ever permanently modifying. The suit, Gaudin v. Saxon Mortgage Services Inc., was filed in the Northern District of California Federal Court by Peter Fredman of the Law Office of Peter Fredman and Daniel Mulligan of Jenkins Mulligan & Gabriel LLP. The suit alleges a pattern of misconduct by Saxon of collecting trial payments, delaying the processing of loan modifications, and then denying the application altogether for demonstrably false reasons. continued on page 8

MAY 2011 


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news flash

continued from page 6

The lead plaintiff, Marie Gaudin, the owner of a San Francisco bridal boutique that suffered hard times as a result of the recession brought on by the mortgage crisis, asked Saxon for loan modification on her underwater Daly City, Calif. home. Gaudin was directed to Saxon’s “Home Preservation Department” and provided extensive documentation of her financial condition. Saxon assured her it was “committed to assisting you in any way we can to complete the [the loan modification]. We want to help!” It sent her a written agreement that seemed to promise a per-

manent HAMP loan modification after she made three “trial” payments to prove she could. The complaint notes that Saxon instead delayed the processing of the loan modification, while urging her to continue making trial payments. After receiving numerous trial payments and fulfilling the rest of her obligations under the agreement, Saxon denied her a permanent modification falsely claiming that she had failed to make payments or comply with document requests. Saxon’s correspon-

dence with Gaudin shows a pattern of inaccurate and irresponsible behavior on the part of a major global bank. The company claimed that she did not make payments, while in the same letter actually acknowledged that she was current on all payments. It also claimed that the U.S. Treasury Department was involved in reviewing HAMP applications. “Saxon and Morgan Stanley are taking advantage of the good faith and intentions of distressed borrowers,” said Fredman. “If they don’t want to give modifications, fine, they should face the political music and the flood of foreclosures that will result when all their underwater borrowers give up hope. But tricking them into wast-


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ing their time and money applying for a modification that Saxon has absolutely no intention of handing out is a deceptive debt collection practice plain and simple.” The class action alleges that Saxon’s breach of contract, rescission and restitution, deceptive debt collection practices violated California’s Rosenthal Fair Debt Collection Practices Act (Rosenthal Act) and fraudulent, unlawful, and unfair business practices under California’s Unfair Competition Law (UCL).

Investigation Discovers Fraud Common Among Loan Mod Providers Four fair housing organizations have released their findings of a year-long undercover investigation of 80 loan modification companies. The National Fair Housing Alliance, the Connecticut Fair Housing Center, Housing Opportunities Made Equal of Virginia Inc. and the Miami Valley Fair Housing Center have issued the report, “Have I Got a Deal for You! An Undercover Investigation of Mortgage Loan Modification Scams,” which documents the tactics mortgage modification scammers use to take money from vulnerable homeowners. An analysis of the 80 loan modification companies uncovered common tactics used by scammers to entice homeowners to use their services:  55 percent required an upfront fee to start work or required a low initial fee to conduct minimal work on behalf of distressed homeowners, such as reviewing loan documents;  43 percent guaranteed or promised they could secure a loan modification even before learning about the homeowners’ financial limitations;  24 percent advised or encouraged homeowners to stop making their mortgage payments or to stop contacting their lenders;  16 percent guaranteed a new, much lower interest rate ranging between two and six percent on modified loans;  12 percent discouraged homeowners from seeking free help from government-approved housing counseling agencies;  Eight percent encouraged homeowners to provide fraudulent information to their lenders. “This is shameful abuse by loan modification scammers to take advantage of desperate homeowners,” said Shanna L. Smith, National Fair Housing Association (NFHA) president and chief executive officer. “We and our partner organizations will work to see to it that these companies are prosecuted by the Federal Trade Commission and other federal and state enforcement agencies.” continued on page 11

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The Collingwood Group and Patton Boggs Form Strategic Alliance The Collingwood Group LLC has announced the formation of a partnership with Patton Boggs LLP. The partnership combines the strength of one of the nation’s premier law firms with one of the top business advisory groups in the financial services industry. Patton Boggs’ expertise on legal, regulatory and policy issues facing the mortgage banking industry will be further enhanced by The Collingwood Group’s ability to assist clients in defining their business goals and identifying ways to strategically implement them. By leveraging the resources of both firms, clients will have access to a more complete solution to their industryrelated needs. In working together, Patton Boggs and The Collingwood Group will provide clients with an unprecedented approach to navigating through industry hurdles, on both the legal and operational fronts. Patton Boggs and The Collingwood Group will also collaborate regularly on clientfocused written materials, events and media outreach. Patton Boggs’ Mortgage Banking Group, which is led by Partners Richard Andreano, John Socknat and Michael Waldron, will spearhead the teaming arrangement on behalf of the firm and in doing so, will work with The Collingwood Group’s leadership, which includes Joe Murin, former president and CEO of Ginnie Mae and Brian Montgomery, former Assistant Secretary for Housing and Federal Housing Commissioner. Murin and Montgomery both played major roles in the federal government’s efforts to address the nation’s financial crisis and restore stability and liquidity to financial markets, and they remain in the spotlight due to their efforts at The Collingwood Group. “We’re delighted about the formation of this teaming arrangement with Patton Boggs. This collaborative effort represents the first of its kind in the mortgage banking industry, bringing together thought leaders on housing and real estate finance with leading legal minds that specialize in these areas,” said Murin. “This collaboration will enable us to bring highly

focused expertise to our respective clients that relate to legal and regulatory compliance within the mortgage banking and real estate finance industries.” The teaming framework between the two firms will allow both to pursue, wherever appropriate, joint projects where the talents of both firms can be employed to meet potential client needs. Each firm will remain independent of the other. “The Collingwood Group is pleased to be joining forces with a well-regarded firm such as Patton Boggs,” said Montgomery. “With Patton Boggs’ legal proficiency and Collingwood’s expertise in both the public and private sector mortgage and financial service industries, there now exists a new and exciting opportunity for both our organizations and most importantly for our clients.”

PIMCO Announces the Formation of New Mortgage REIT Pacific Investment Management Company (PIMCO) has announced the formation of a new real estate finance company that intends to acquire residential and commercial real estaterelated debt. To be called PIMCO REIT Inc., the Newport Beach, Calif.-based company has filed documents with the U.S. Securities & Exchange Commission (SEC) requesting approval to raise $600 million through a public offering of common stock that will trade on the New York Stock Exchange (NYSE). Jennifer Bridwell, who leads PIMCO’s mortgage-related product development efforts, will serve as chief executive officer of the new REIT. Founded in 1971, PIMCO manages investments totaling more than $1.2 trillion as of Dec. 31, 2010. That figure included securitized holdings of more than $372 billion, of which $46.9 billion were in dedicated directly to mortgage and real estate-related strategies. PIMCO’s other assets consisted of $268.6 billion in residential mortgage-backed securities (RMBS) and $81.6 billion in mortgage credit holdings such as non-agency RMBS and commercial mortgage-backed securities (CMBS). continued on page 12

news flash

continued from page 8

FinCEN Reports: Mortgage Fraud Rises Four Percent in 2010

by the Bank Secrecy Act grew nearly four percent to 1.3 million SARs up from 1.9 million filed in 2009.

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

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


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The Financial Crimes Enforcement Network (FinCEN) in its latest report, “Mortgage Loan Fraud SAR Filings in Fourth Quarter and Calendar Year 2010,” has released full year data showing the number of suspicious activity reports (SARs) involving mortgage loan fraud (MLF SARs) increased four percent in 2010 to 70,472 compared with 67,507 MLF SARs filed in 2009. The report also shows that the growth rate of MLF SARs began to slow over the last two to three years. Looking at just the 2010 fourth quarter, filers submitted 18,759 MLF SARs, a one percent decrease from the 18,884 filings over the same period in 2009. “FinCEN remains active with law enforcement and other partner agencies to provide lead information and to identify and combat potential abuses in the mortgage market,” said FinCEN Director James H. Freis Jr. “As a member of the President’s Financial Fraud Enforcement Task Force, FinCEN is coordinating with the United States Trustee Program (USTP) and the Federal Bureau of Investigation (FBI) to identify potential mortgage loan fraud in a number of areas including identifying potential abuse of the bankruptcy system to facilitate mortgage fraud.” The FinCEN report found that references to bankruptcy have steadily increased over time in MLF SAR filings. In 2010, six percent of all MLF SARs contained a key term related to bankruptcy in the SAR narrative, compared to one percent in 2006 and 2007. In 2010, mortgage loan fraud was cited in 54 percent of all SARs referencing bankruptcy fraud, up from 42 percent in 2009. Some MLF SARs specified the type of bankruptcy filing, most frequently Chapter 7, which was cited in 27 percent of 2010 reports citing both bankruptcy and MLF. Filers in their SARs also called attention to debt elimination scams as one of the emerging practices. Debt elimination scams were cited in nearly 1,300 MLF SARs in 2010. In these SARs, filers noted subjects sending a variety of documents or bogus payment methods to financial institutions, in attempts to eliminate or satisfy mortgage obligations. SAR filers over the course of 2010 explicitly referenced “flopping” in 112 SARs last year. This compares with relatively stable occurrences of suspicious activity involving broker price opinions and short sales in 2010. Flopping occurs when a foreclosed property is sold at an artificially low price to a straw buyer, who quickly sells the property at a higher price and pockets the difference. Anecdotal feed-

back on this practice from law enforcement and industry sources suggests that the volume of related MLF SARs is much lower than the actual number of suspected flopping incidents. The increasingly dated activities reported on SARs suggests a lack of emphasis on this type of current activity. The FinCEN report also contains data of state, county, and metropolitan statistical area (MSA) by total number of and per capita filings of MLF SARs. For instance, the report shows that Nevada had the highest number of MLF SARs

per capita in 2010, followed by Florida, California, Illinois and Georgia. The five MSAs with the highest per capita filings of MLF SARs in 2010 were Miami, Fla.; Las Vegas; San Jose, Calif.; Riverside, Calif. and Los Angeles. The five counties with the highest number of MLF SARs per capita were MiamiDade County, Fla.; Gwinnett County, Ga.; Broward and Orange Counties in Florida; and Nassau County in Long Island, N.Y. FinCEN also reported that all types of SARs filed by depository institutions in 2010 fell 3 percent to 697,389 compared with 720,309 SARs filed by depository institutions in 2009. But, the total number of SARs filed in 2010 by all types of financial institutions covered

heard on the street

continued from page 10

LPS’ SoftPro Division Adds North American Title to Its 360 Vendor Network

Truth h in n Marketing

MAY 2011 



With all of the dramatic changes that have impacted the mortgage industry, none of us should be surprised by the enlightenment that resulted from the real “truth” in lending that surfaced as a result of years of unacceptable standards and guidelines. Anyone could get a loan (no documentation required) … really? The tragedy isn’t that a fallout occurred; but rather, that it didn’t happen sooner. And through it all, organizations and individuals guided themselves with a wide range of policies and procedures. So wide-ranging, perhaps, that the ability to implement fundamental methodologies and best business practices became unattainable. But congratulate the loan officers, banks and mortgage companies that had the discipline to embrace high standards of “truth” in every aspect of their business. They are the leaders of our industry today. So what does it mean to establish “truth” in marketing? At a minimum, it means making a sincere commitment to the relationships that surround a business and continuously sharing time-sensitive information. Homeowners deserve lifelong guidance to make sound decisions with their money. With steady market fluctuations, educational and timely communication will make a big impact on savings and wealth. The next critical component is to lock down privacy and compliance standards so information sharing does not violate conditions. With ever rigorous rules on external communications, removing loose canons in an organization is mandatory. It is a major liability to produce marketing on the fly. The best method is to create and centralize branded and compliant materials for enterprise-wide access (with opt-out information integrated). It can be challenging to implement without proper technology and infrastructure—educating customers, partners and prospects with relevant information requires centralized databases, the ability to mine data and intelligent alerts. It is well worth the investment and effort. A dependency on reactive, rather than proactive processes, results in delayed access to intelligent, actionable data—and the loss of deserved business. Realizing the power of professionalism and quality is the next important element. When marketing initiatives are being assessed, focus on value rather than cost. Mass-produced, junk marketing standards should not be considered. With the proper planning, there is no need to utilize them as a vehicle of communication. The final core components of high-impact marketing are personalization, automation and cross-media. No matter how many contacts exist in a database, segmenting them against specific business rules is key to success. The same holds true for one-to-one customer relationships with loan officers. Drilling down and delivering communications based on targeted needs of a customer from the loan officer of record is the best method to generate higher response rates. It will also allow loan officers to receive inquiries from customers they can immediately assist. The next step is automation, which relies on core methodologies that are driven by algorithms that recognize specific database attributes and conditions to push out targeted communications. It greatly minimizes the need to create fragmented marketing pieces. Chaos also disappears, and the heartbeat of an organization is complimented with timely communications to steadily capture new business. Finally, media formats should not be limited or isolated. Print, e-mail and telephone campaigns are each relevant to an organization. Cross-media allows information to be shared across multiple formats with sensitivity to opt-out requirements. If a customer asks not to receive e-mail, it is imperative to utilize approved methods. Overall, being relevant and compliant with marketing standards is being true to you, your customers and organization. Taking shortcuts or thinking that “something is better than nothing” is ineffective. If you want to rival the competition, take marketing seriously and implement effective strategies. You will be pleased with the impact it will make.

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Lender Processing Services Inc. (LPS), a provider of integrated technology and services to the mortgage and real estate industries, has announced that North American Title Insurance Company is now helping its agents become more productive by making its underwriting products instantly available to its agents via SoftPro 360, a business exchange platform offered by LPS’ SoftPro Division. “We are pleased that North American Title Insurance Company is now integrated with SoftPro 360, allowing agents to order electronic policy jackets without leaving their SoftPro workspace,” said Joyce Weiland, LPS SoftPro’s president. “By using SoftPro 360, agents will no longer have to go to a separate Web site, significantly improving their day-to-day productivity.” LPS SoftPro’s real estate closing and title insurance software seamlessly integrates with North American Title Insurance Company’s products and services and links to a variety of additional products and services offered by other vendors in the SoftPro 360 network. When agents place orders with North American Title through SoftPro 360, digital copies of electronic policy jackets are returned to them electronically through the SoftPro 360 interface. No data needs to be re-entered— saving time and reducing the likelihood of error. “North American Title Insurance Company is proud to do business the old-fashioned way—by listening to our agents,” said Emilio Fernandez, president, North American Title. “Our agents asked us to simplify their lives and do away with the need to go to a separate Web site to get products from their underwriter. By offering all of our products via SoftPro 360, our agents can get everything they need from us without ever having to leave their production environment.“

Freddie Mac Selects Green River Capital to Sell REO Inventory Green River Capital (GRC), a real estate-owned (REO) property asset management and loss mitigation provider, has announced that Freddie Mac has selected the company to provide REO sales and disposition services to its real estate unit HomeSteps. GRC is one of three third-party companies that will support HomeSteps in all 50 states and help the organization maintain and sell properties in a timely manner, while preserving local property values. HomeSteps’ Good Neighbor Practices protect neighborhoods by requiring agents to show

clean and maintained homes and then sell them at market prices. “Selecting Green River Capital underscores HomeSteps’ commitment to working with proven real estate professionals who have the capacity and drive to support our goal of stabilizing communities and maximizing recoveries for Freddie Mac and taxpayers through the sale of our REO inventory,” said Chris Bowden, vice president of HomeSteps. HomeSteps markets and sells Freddie Mac REO homes to homeowners and investors and manages every stage of the REO process, from handling title issues after foreclosure to working with local listing agents to facilitate a sale. “Our goal to help stabilize communities aligns with the objective of Freddie Mac and HomeSteps, which are devoted to upholding high property and sales standards,” said Joe D’Urso, president of Green River Capital. “We are proud to have been selected to help HomeSteps’ REO sales and disposition efforts and look forward to a long-term relationship with Freddie Mac.”

Realpoint Launches Unit to Evaluate Mortgage Servicing Firms Morningstar Inc., a provider of independent investment research, has announced that its Realpoint unit has launched an operational risk assessment practice to evaluate the performance of mortgage servicing firms. The new practice, which is part of Realpoint’s credit ratings business, will complement its long-standing tradition of providing transparency and insight to investors in structured finance transactions. Michael Gutierrez, formerly managing director and head of servicer evaluations for Standard & Poor’s, recently joined Morningstar to lead this business. “The addition of operational risk assessment capabilities adds another important component to Realpoint’s analytical scope,” said Robert Dobilas, chief executive officer of Realpoint. “We can now enhance our transactionlevel ratings and analysis of mortgagebacked securities with a comprehensive assessment of the operational risk of the parties to the securitization process. Mike Gutierrez and his team will use Realpoint’s robust data set, technology, and industry-leading analytics to develop an investor-focused solution that will establish a new standard for operational evaluations in the structured finance market.” Initially, the unit will be staffed by Gutierrez and three senior operational analysts: Michael Merriam, Richard Koch, and Mary Chamberlain. “Realpoint’s well-known focus on investor concerns and its highly devel-

oped analytical infrastructure will allow us to take operational risk analytics to an entirely new level,” Gutierrez said. “It is increasingly apparent that mortgage servicing, as well as origination, and the ancillary service providers involved in both businesses, play a crucial role in the performance of structured transactions.”

InHouse to Offer Appraiser Credentials Management

Clayton Holdings Forms New Asset-Backed Solutions Firm

 MAY 2011

continued on page 14



Clayton Holdings LLC, a leader in providing customized risk analysis, loss mitigation, operational solutions and staffing services to the mortgage and fixed-income industries, has announced that it is forming an independent financial analysis and consulting group and has hired a team of seasoned, structured-finance professionals to run the practice. The new subsidiary, Asset Backed Solutions (ABS) LLC, will focus on providing litigation support and valuation services to market participants in the structured finance space. David Lehman has been named president of ABS and will report to Paul Bossidy, chief executive officer of Clayton Holdings LLC. Tyler Simpson and Florin Nedelciuc were named directors of the new venture, the company said. Among other activities, ABS will provide independent valuations and financial analysis to market participants facing legal challenges linked to the valuation of complex structured products and related assets. ABS will assist firms and individuals with issues surrounding the value of residential mortgage-backed securities (RMBS), whole loans, CDOs (cash and synthetic) and other securities that were issued and sold prior to the credit crisis. The group will also consult on asset valuations tied to mergers and acquisitions, transaction advisory services and risk management. The new ABS team has a strong track record in assisting clients and their legal counsel on the valuation of complex financial instruments in the context of securities litigation, bankruptcy, restructuring, and regulatory scrutiny. The team includes: David M. Lehman II who joins Clayton from Navigant Economics, New York City, a subsidiary of Navigant Consulting; Florin Nedelciuc, who also joins Clayton from Navigant Economics, where he advised capital market participants and their legal counsel on the valuation of structured products in various securities litigations, bankruptcy and restructuring matters; and Tyler T. Simpson, who was previously head of residential capital markets at Pentalpha Capital Group and led that firm’s RMBS and residential whole-loan business including its subprime, alt-A and prime sectors. “We are pleased to add David, Florin and Tyler to the Clayton team,” said Paul Bossidy, chief executive officer of Clayton Holdings. “There is a critical need for independent valuation and analysis of complex financial instruments. Our Asset Backed Solutions group will continue the Clayton tradi- 

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 that its Connexions appraisal management system now offers a new feature for managing appraiser credentials and ensuring credential compliance. Lenders and servicers can order the new option for any appraisal with the click of a mouse at minimal cost. Lenders and servicers face layers of new regulations under the Dodd-Frank Act appraiser independence rule, federal interagency guidelines and new state appraiser and AMC licensing requirements, making compliant management of appraiser credentials critical when any violation can result in stiff civil fines. It takes time and effort to gauge if appraisers around the country are appropriately credentialed for the type of appraisal or valuation work ordered, and not all AMCs are licensed to do business in every state. InHouse’s credential management feature automatically verifies an appraiser’s licensing credentials with the National Registry of State Certified and Licensed Appraisers. In addition, it allows the assignment of an AMC that is properly licensed in the state in which an appraisal has been ordered through its services. The new Connexions feature tracks an appraiser’s errors and omissions and license status for lenders and servicers, and will automatically notify appraisers on the InHouse platform when their license is expiring or if it has already expired. With the credential management feature, no orders will be placed with an appraiser or AMC that does not have the appropriate credentials for the type of appraisal or broker price opinion. The new credential option costs only $5 per appraisal ordered, reducing appraisal coordinator overhead for lenders. “Especially for lenders self-managing their appraisers and AMCs, the Connexions platform can reliably manage their compliance with state and federal appraiser credential guidelines,” said Jennifer Creech, president of InHouse. “Not every state has the same licensing requirements for the same scope of work. For example, real estate sales persons cannot complete a BPO in the state of Michigan.” InHouse’s Connexions platform gives financial institutions the freedom and agility to run the appraisal process in

any way that works best for them, from self-managing their appraiser panels, working with multiple AMCs, to a combination of both self-management and AMC outsourcing.

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

Appraisers Must Be Paid More

MAY 2011 



considering the cost of managing the Lately, we have seen spectacles from variappraisal process, many appraisers ous groups of different professionals, comperform appraisals at rates that are plaining about not getting paid enough. much less than this. This seems to have been mostly government workers who are members of labor unions. There have been marches,  Younger people are not entering the appraisal business. According to the demonstrations, civil disobedience; you Appraisal Institute, among its memname it … all in the name of either bership, the average age of a desigincreasing pay to various groups of worknated appraiser is 60, and the average ers or justifying existing pay levels and age of a non-designated benefits. These are usually appraiser is 53. The sanitation workers, policeappraisal schools are genmen, firemen and teacherally void of students takers. These people usually ing pre-licensing courses. get a number of weeks of The economic incentive is paid vacation, liberal just not there, especially healthcare benefits, lucrawith the current recession. tive retirement packages Obtaining a real estate and sick leave. I generally appraisal license requires, applaud the efforts of these on an average, three-topublic servants and supfour years for a residential port their well-deserved appraiser and four-to-five right to a comfortable stanyears for commercial dard of living, excluding “Unless material appraisers. During training, some who seem to position themselves to receive a dis- changes are made soon appraisers are typically proportionate share of the to compensate apprais- paid apprentice rates, taxpayers’ hard earned ers fairly and equitably which are significantly money. for their efforts, we will lower that those paid experienced valuation profesThere is another group find a shortage of of professionals who, in my qualified people to per- sionals. mind without question, form the tasks of propSome complain that deserve more compensaerty evaluation.” appraisal management tion than they receive. companies (AMCs) are the They typically get no reason that appraisers are paid so little. healthcare benefits, paid vacation, 401(k) programs or sick pay, and they have no As the owner of a non-bank-owned labor union to negotiate on their behalf. AMC, I disagree. I have experienced the These people are the real estate apprais- very competitive nature of the business ers who perform the service of evaluating firsthand, especially for residential homes, land, and the many different appraisals. The restricted rate that independent AMCs can charge, coupled with types of commercial property. While there is no source for which I the overhead associated with increased am aware that provides statistics on the regulations, leave them with even less amount of compensation these people as to pay their appraisers, not more. There individuals receive, there is much anti- is pressure from every angle, and those dotal evidence that supports my con- of us who want to pay appraisers more are not able to do so due to the low fees tention. Please consider the following: we must charge in order to remain  My memory tells me that the going competitive. Unless material changes are made rate for a home appraisal 20 years soon to compensate appraisers fairly and ago in most areas was about $300. Today, in many areas, the going rate equitably for their efforts, we will find a is still at or close to this rate. After shortage of qualified people to perform

the tasks of property evaluation. It is not inconceivable that, when the market turns around, it could take four to six weeks to obtain a residential appraisal and six to eight weeks to obtain a commercial appraisal. What must happen to correct this problem? It is probably too late to avoid a shortage if the economy improves soon, as most of us would hope. It is not too late, however, to begin to correct the problem. This should be done immediately. Appraisal fees are controlled by the major banks. It has been estimated that 80 percent of all mortgages are originated by the four largest banks in the United States. The management of these banks control appraisal fees to the customer. We must encourage these institutions, along with all of the smaller banks, to raise appraisal fees if they are to insure the availability of appraisals in a timely manner to underwrite their loans. These professionals are the bank’s only hope for accessing collateral, which is

heard on the street

the foundation of their mortgage investment. Appraisal fees to the consumer must be increased soon to head off a critical shortage of professional appraisers. I suggest that, across the board, appraisal fees should increase by a minimum of 50 percent within the next year to avoid a critical shortage of qualified appraisers. This will not guarantee that a shortage will not occur, but it will be a step in the right direction. We must provide young people with an economic incentive to join our profession if we are to have a pool of qualified professionals to draw from. We deserve the best and brightest in our profession, and we will only get this if we pay our professionals fairly and competitively. Charlie W. Elliott Jr., MAI, SRA, is president of Elliott & Company Appraisers, a national real estate appraisal company. He can be reached at (800) 854-5889, email or visit his company’s Web site,

continued from page 13

tion of offering superior independent advice in these situations. In addition, as the securitization markets recover, we expect David, Florin and Tyler to significantly enhance the depth of Clayton’s offerings and advisory services.”

Mortgage Professionals to Watch

 John Axt has joined ISGN as title products operations delivery executive. 

 John Axt

 John Van Tassel has been named vice president of strategic growth for Hammerhouse LLC.


John Van Tassel

 Mortgage Capital Trading (MCT) has named Rhonda Beck regional sales director for the firm’s Charlotte, N.C. office and will lead the company’s expansion into the southeastern United States.  ICON Residential Lenders has named three new area sales man-


agers: Debbie Hood for the Pacific Northwest region; Rhett Hubbard for the Orange and San Diego County regions; and Justin Smith for the Los Angeles, Riverside, San Bernardino and Ventura County regions. Real Estate Mortgage Network Inc. (REMN) has named Tom Conklin western division sales manager overseeing wholesale operations on the West Coast. TMS Funding, the wholesale residential lending channel of Total Mortgage Services LLC, has named six new account executives: Alan Caldwell, Patrick Creighton, Ingrid Helfgott, Mark Karanovich, Samantha Hay and Kathleen McLaughlin. Coester Appraisal Group has announced the hiring of Harood Khalid as chief developer and Joseph Bryant as national sales director. Jerome T. Lienhard has been named president and chief executive officer of SunTrust Mortgage Inc. CoreLogic Valuation Services has promoted Wes McDaniel to the newlycreated position of chief appraiser. J.I. Kislak Mortgage LLC has announced the appointment of Felix Beck as senior advisor to the company. James Zeldin has been named executive vice president and chief sales officer of Default Resource. has named Chris McLain as director of business development. Pamela S. Morris has joined Colonial National Mortgage as branch manager. continued on page 22

lenders make a better decision for all parties in the reverse mortgage asset chain. To paraphrase the great Indian Independence leader Mahatma Gandhi … “There is more to reverse mortgage lending than speed.” Atare E. Agbamu is author of Think Reverse! and more than 140 articles on reverse mortgages. Since 2002, he writes the nationally-distributed column, “Forward on Reverse.” A former director of reverse mortgages at Minneapolis-based AdvisorNet Mortgage LLC, Agbamu has years of hands-

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

FIT for Reverse Mortgage Lenders: Part IX Medical Mobility Risk Hospital or nursing home re-admissions are serious financial risks for older Americans, especially those without strong family or social support. So, what do reverse mortgages and hospital and nursing home re-admissions have in common? Three words: Medical Mobility Risk. And what is medical mobility risk in reverse mortgage lending? It is the chance that a chronic illness or poor post-discharge planning could compel seniors to shuttle between their homes and the hospital or nursing home, hurting their ability to stay at home long enough to benefit from their loan funds and limiting their capacity (in case of heavy out-of-pocket health expenses) to meet critical borrower obligations, such as residing in the home, paying taxes and homeowner’s insurance, and maintaining the home.

Crowne Plaza Valley Forge Hotel 260 Mall Boulevard King of Prussia, Pa.

The event includes:  The NAMB Annual Meeting;  Delegate Council Meeting & Legislative Update;  Installation of New Board & Officers;  A Special Reception Honoring NAMB President Michael J. D’Alonzo, CMC; and  An Eight-Hour NMLS Continuing Education Program.

Program of events (Subject to change)

Saturday, June 4 7:30 a.m.-1:30 p.m. ................................................................Registration 7:30 a.m.-8:30 a.m. ................................................Continental Breakfast 8:00 a.m.-Noon ....Eight-Hour NMLS Continuing Education Session (Part I) 1:30 p.m.-3:30 p.m. ................................NAMB Delegate Council Meeting 4:00 p.m.-6:00 p.m. ..............................NAMB Board of Directors Meeting 6:30 p.m.-8:30 p.m. ................................................President’s Reception

Sunday, June 5 8:00 a.m.-Noon....Eight-Hour NMLS Continuing Education Session (Part II) For more information, call (703) 342-5900 or visit


 MAY 2011

It may not be an easy conversation. While some seniors consider a reverse mortgage to pay for health expenses, others may be reluctant to talk about such personal issues. For this reason, some fine commentators in reverse mortgage blogosphere have suggested that the FIT questions and process are too invasive and time-consuming. Like surgery, prudent mortgage lending is inherently invasive. That is why in forward mortgage lending, we ask for divorce decrees, bankruptcy papers, child-support papers, financial statements and other very personal documents that could have bearing on the mortgage lending decision. Only fools lend other people’s money without asking relevant personal questions. In the wake of our recent mortgage lending-led national and global financial meltdown, normal invasiveness in service of sound lending for all parties is a good thing. On the time-consuming charge, an extra 20 or 30 min. conversation to get it right at the critical primary market level is a bargain if it helps seniors and

Saturday-Sunday, June 4-5


In gauging a senior’s ability to stay at home and profit from a reverse mortgage over time, why is it important for lenders and counselors to pay attention to medical mobility risk? Hospital and nursing home readmissions are major challenges in our acute-care, hospital-dependent healthcare delivery system. Re-admissions costs Medicare approximately $12 billion annually. MedPAC, the research arm of Medicare, says 17.6 percent of all hospital admissions in America are actually re-admissions. One in five Medicare beneficiaries who is discharged from a hospital re-enters a hospital within a month. As boomers age in droves in the years ahead, we can expect these numbers to climb if current trends hold. This is the socio-medical context for “yellow flag” seven in the Financial Interview Tool (FIT) process. As thought-

“Mr. Jones, at FreeFloat Bank, we pride ourselves on helping our customers think through complex financial decisions for two reasons: Our customers deserve our best thinking, and it is good business practice. During counseling, you mentioned health issues that required hospitalization and re-hospitalization. I believe we should talk about what it may mean for you down the road, shall we?”

2011 National Association of Mortgage Brokers Mid-Year Meeting 

“Only fools lend other people’s money without asking relevant personal questions.”

ful and prudent reverse-mortgage lending professionals, you should find ways to discuss this risk if it comes up in the FIT summary. Although how you bring it up and how you discuss it will depend on the dynamics of the loan interview and your skill in framing questions, it is important that you discuss it during the loan-application interview. For illustration, let’s try this question as an example:

Lisa Schreiber, Executive Vice President of Wholesale Lending at TMS Funding

MAY 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 email at for consideration in being featured in a future “Mortgage Professional of the Month” column. This month, we had a chance to chat with Lisa Schreiber, executive vice president of wholesale lending at TMS Funding, the wholesale lending channel of Total Mortgage Services. In this role, Lisa is responsible for defining and implementing the company’s vision, strategy and day-to-day execution to build TMS Funding into a leading nationwide wholesale lender. Prior to joining TMS Funding, Schreiber was chief strategy officer of NetMore America, where she focused on building out NetMore’s lending platform to include the highest utilization of Web-based technologies, a communication strategy for both internal and external customers and defining performance measurements. Formerly, Schreiber was an executive vice president at American Brokers Conduit (ABC), where she led the vision and implementation of the platform that drove ABC to become one of the fastest-growing and most respected wholesale mortgage lenders in the industry. During her tenure of just over five years, ABC grew its production to

more than $33 billion at the end of 2006 from just $1.9 billion in 2002 and maintained a 95 percent employee retention rate and delivered the industry’s number one ranking in customer service. Prior to ABC, Lisa demonstrated success in sales management at Bank of America, where she grew the Southeast region to a top tier region in volume, profitability and quality of performance. Lisa has been recognized as a valued speaker in the mortgage industry and also applies her business knowledge and energy in working with charitable organizations. Today, Lisa has completed the rehabilitation of a school in West Africa and is an advisor to an NGO (non-governmental organization), How did you get started in the mortgage business? Like many in our industry, I came by my first job in the mortgage business by accident. I was a single mom with two young children, newly divorced. I realized that I needed to step up my career to support my family, so I decided to pursue a paralegal certificate. I should have done more research because at the time, it was the mid-1980s and paralegals only made around $15,000-$16,000 annually. Since I was looking for a better salary, I turned to the classified section in the newspaper and looked for jobs in the legal field. I found my first job doing post-closing work with First Performance Mortgage in northern New Jersey. I lived in central New Jersey, so the commute was about 90 min. each way, but it paid $18,000 a year so I was excited. I had already completed the real estate section of my paralegal studies, so I had some knowledge of the subject, but I found that the job was too slow-paced for my personality. I went to my boss, Pat Burns Taylor, who happened to be president of the Mortgage Bankers Association of New Jersey at the time, a great lady, and told her that I didn’t think I was going to able to stay. She asked me what else I wanted to do within

the company, and I pointed to the closing department where everyone was running around with plenty of activity. I said it “Looked like fun,” so I became a closer and came up through there. To continue my goal of gaining experience and improving my income, I eventually moved on to a small savings and loan in Chatham, N.J. owned by Weichert Mortgage. It was a small shop, so I got my feet wet with everything— selling bridge loans and seconds, processing, underwriting, and even did mortgage servicing when our servicing rep was out on maternity leave. I met a rep with MGIC who was looking for a sales service rep and MGIC hired me in 1989. It was a sales-oriented position and it gave me the opportunity to polish my sales skills. With each new role, I was able to increase my income so that I could support my family, but I also gained valuable career knowledge and improved my skill set through the process increasing my value to my employers and myself.

“For as long as I have been in the mortgage business, I’ve just been lucky. I think it’s a combination of opportunity, the willingness to jump in, wanting to be challenged and understanding things quickly.” From MGIC, I ended up moving to northern Virginia in 1991, and got a job at Dominion Bancshares. I was hired by Faith Schwartz, who currently serves as executive director of HOPE NOW. I started working with Dominion’s purchase program which was a correspondent group, so I learned the whole correspondent aspect of the business. I was in charge of purchasing compliance, and started working with the secondary market, jumbo loans and pricing for wholesale.

It’s fascinating that, in such short period of time, you were exposed to so many areas of the mortgage business. Did you feel overwhelmed by any of this? For me, I was always driven. I had a couple of motivating factors; I wanted to make more money to support my family, but I also loved to learn about the business. I always wanted to know more, so each time I encountered a new department, I wanted to learn their operations through and through. At Dominion, I was doing all kinds of things that I had no initial experience in, but I learned these tasks quickly and thoroughly, and proved my value to the company. In 1992, I was going to leave Dominion to work for Chase as a wholesale rep, but Dominion asked me to stay and be the rep for their new wholesale group. Unfortunately, Dominion was bought by First Union about two weeks later, but it worked out well for me because we took that tiny little wholesale group and took our team to Arbor National Mortgage, working for Ivan Kaufman. It was a time of rapid growth, and my boss at Arbor left the company within nine months of our arrival. I had a great opportunity to go from an AE to a regional manager. In 1993 as an AE, did approximately $260 million in sales which truly solidified my love for wholesale and now I could grow a wholesale region. Two years later, we were bought by Bank of America where my boss was Ed Kalush, a wholesale leader. When Bank of America and NationsBank merged a couple of years later, the new entity’s corporate offices moved from California to Charlotte, N.C. in the heart of my territory. This was a great opportunity for me as I was able to get corporate exposure at the company and gain more global knowledge. The real game-changer for me came when Bank of America assigned a project to Guy Taylor and I, as sales leads, called “Wholesale Reinvention.” I believed the intent of this effort was to solidify Bank of America in a position of strength and lead-

ership within the wholesale lending channel. We were given a budget in the millions for the project, and spent a year building new technology, working with broker focus groups, collaborating with design consultants, and basically working on a re-launch of their entire wholesale program from scratch. It was now 2001, and I remember delivering the Wholesale Reinvention presentation to our entire wholesale team of 250-300. I was on my way home from the airport after delivering that presentation, and got a call from my boss saying that he was really sorry, but Bank of America was channeling all of their resources toward, their banking platform. Our resources to implement the work we had done were no longer available to us!

“Total Mortgage Services has already come up with these characteristics for TMS Funding which are perfect for doing business with brokers … making the process easy, with consistent pricing, and then, of course, quality customer service ...”

I used to hear that a wholesaler targeted to get 60-70 percent of a broker’s business and that was the target. Is that number still accurate or where do you see that number today? I certainly think that having a deeper relationship is better for everybody. It’s better for the broker because they learn your process and we both get better results because they know what you require. It’s all about setting and meeting expectations on both sides. It is a true partnership when you can get a certain portion of a broker’s business We are trying to broaden our product set so that we can do more of that broker’s business. Today, we’re offering Federal Housing Administration (FHA) business, we’ve got agency and high balance, United States Rural Development (USDA) loans, and we’ve applied to do U.S. Department of Veterans Affairs (VA) loans. We’ve seen jumbo and conduit loans creep back in a little bit, so we want to be able to offer those as well. Our goal is to offer a complete product set so somebody can send me 60 percent of their business. That is a big goal of ours at TMS Funding. Do you see any other challenges in today’s market? As a wholesale group, as in the past, our AEs would have 15-20 brokers. Our best AEs would concentrate on them and would get a good portion of that 15 or 20 brokers’ business and make a really good living. I think that is much harder to do these days. We’re talking more about what I would call wide net. TMS Funding’s philosophy with our AEs is to give them more of a territory, not less of one, so that they can go wider and get more brokers. For example, in the D.C. area, many companies have five to 15 reps between continued on page 18


 MAY 2011

How you support a broker as a wholesaler in today’s market has completely changed. What does TMS Funding do to support their brokers to win their loyalty away from other wholesalers? It’s funny because it really hasn’t changed very much. You would think that it would have changed dramatically, but I really feel that our industry is returning to a back-to-the-basics approach to conducting business. The things that a broker looks for that we will provide is good pricing, but we will not be in and out of the market, we will provide consistency. Today, there are big banks trying to buy their way back into the market, and that will happen all the time as somebody will be in trying to buy the market but brokers can’t rely on that. Our technology is very simple. I’ve been showing it to new AE recruits, and basically when I have that second phone call with them after they’ve had the opportunity to look at the technology, they are usually ready to go. We don’t even have to train brokers. We have a product and pricing engine, so they lock online and upload the info. The whole thing is completely paperless and yet it’s that easy. Total Mortgage Services has already come up with these characteristics for TMS Funding which are perfect for doing business with brokers … making the process easy, with consistent pricing, and

then, of course, quality customer service, specifically investing in great ops people. Where else have you heard of a company that truly understands that a great process and delivery is the backbone to success? Whenever I roll out a new product or service, I think of myself as the customer, and then I call my friends and brokers and ask for their honest opinion. Even with LO compensation, we’re trying to give the best options we can. We were able to take a look at all of the lenders, what they are coming out with and are trying to take the best of all options. If you have a deal and you set it up as lender-paid or consumerpaid, and throughout that deal you see that it’s not going to work for your borrower, we’re going to let them change the option as long as they meet all of the regulations. If we can do it, we are going to offer it in order to keep the customer happy, at the end of the day, there is a borrower and we can’t forget that.


What do you think was the greatest accomplishment in your professional career? When we were at American Home Mortgage just starting to build ABC, we were kind of chugging along and slowly building the wholesale platform. When I first got there, they were doing about $15-$20 million kind of scattered and it wasn’t really a true wholesale program. They were calling in for deals and scenarios; we started with a ratesheet building us to $200 million a month which is when we brought on the CapCom Group. It was a difficult transition for the company and for me personally, because I felt like I had done a lot of good, solid work,

When hiring others, do you try to hire someone like yourself, someone who is well-rounded and knows all areas of the industry? Or, do you try to hire someone who is more of a specialist and just knows how to work with brokers on finding deals and closing them? What do you look for when you’re hiring account executives specifically? Because I am recruiting account executives right now, what I am looking for is an AE that is very seasoned. I am looking for someone who has been in the business—has seen the industry’s ups and downs—and has continued to be successful throughout. I come across AEs all the time who seem so downtrodden—a lot of them say they just need a home where they can be successful again because they love what they do. They are very close with their brokers and know the business and just want to find a home where they can have fun again. No one has been having fun. Attitude in AEs is very important to me. The other thing for me right now is that I want the AEs I am recruiting to be entrepreneurs. I want them to treat their territory like their own business and be successful from the minute they start. If you don’t believe in yourself, you’re not going to be successful. I’ve been in a number of markets nationwide, so I have a sense of what those markets are like and what it takes to be successful in those areas. I look to support AEs and their brokers in each market we enter to be as successful as they can be!

“My goal is simple … I want to have a successful wholesale program for our company, and I want to see brokers succeed.” 

How did you feel about all that hard work that seemed like it was for nothing? I had a friend who was a recruiter who had been calling me all along, saying that if my role with Bank of America didn’t work out, then make sure to call him. I had been at Bank of America for seven years at that point, but as soon as I found out that our resources were being dedicated to, I called my recruiter friend. They said that Michael Strauss of American Home Mortgage was looking for someone to develop a wholesale channel for the company, and I said, “I have one in my trunk.” Michael started laughing and I told him that I wasn’t kidding! If he wanted a wholesale program, I was the right person for the job which eventually led to my role in the development of American Brokers Conduit (ABC).

and all of a sudden, we had all these folks representing what could be a couple billion dollars for us coming in and they were all very strong in what they believed to be the way to do business. To me, the biggest challenge and biggest accomplishment was finding a way to come together as a team and turning that foundation into the ABC people remember. Now that I am with TMS Funding, the wholesale lending channel of Total Mortgage Services LLC, I am really enjoying my role because I know that I can truly be a valuable contributor to the organization and its growth strategy. I bring my many years of building out successful platforms, including technology, branding, managing sales and broker relationships, for a quality product. I am happy to help wherever. Although I’ve been hired to run the wholesale channel, if they’re working out some things with their technology side, I can lend a hand in developing those goals as well. My goal is simple … I want to have a successful wholesale program for our company, and I want to see brokers succeed. Brokers are the people whom I’ve done business with for so many years and are an entity I respect. I see great value in brokers.

As they are always facing regulatory hurdles and competition, what do you think the future holds for the mortgage broker? It’s interesting because I think that we are in another year of transition, but in a positive way this time. With the new loan originator compensation rules from the Federal Reserve Board, the wholesale world will be very well-defined. I think it’s pretty straightforward, you pick a plan for lender-paid, so everybody is pretty much on the same page there. I think it’s certainly clearer on the wholesale side than the retail side. On the retail side, it’s kind of grey, especially for banks, and I really believe that banks will not pay their LOs. If you think of a bank, banks are generally cheap. They don’t generally want to pay their people more than they believe the job is worth … they don’t get paid big dollars. If there is a way for the banks to get away from paying LOs big dollars, I think they will use this as another way to cap what an LO can make. They have always wanted to do that. I think that a lot of people who ran to banks to hide from licensing regulations or because they were afraid of what was going on with licensing will begin to come out of the banks and look toward mortgage bankers. On the retail side, you may also see many variations in compensation plans. All of the basics of why somebody went to be a broker now apply again. I actually think we are going to see more LOs want to go out on their own, but I don’t think they’ll be big shops. Broker/owners are going to struggle with how to pay their loan officers; I think that’s one of the biggest challenges a broker/owner has today.

mortgage professional Maryland, Virginia and D.C. What happens is you only get two or four reps that can actually make a living. Everybody else is starving. They are doing a couple million a month because all of the good accounts are with the top four reps. Our philosophy with TMS Funding is to have three or four reps in that area and they’ll share that area based on relationships. I don’t mind if my northern Virginia rep goes into Maryland, or if my Maryland rep goes into northern Virginia. I want them to be able to get a wider net so that they do well and obviously stick with TMS. There have also been a lot of acquisitions in the industry. I’m not singling out Wells Fargo specifically, but Wachovia rolled up into Wells and when that happened, all of the Wachovia reps lost all the accounts they had because the Wells Fargo reps already had them. Again, a lot of that has been happening at the bigger companies, and you know, I want to give these guys a chance to make a good living.

“TMS Funding’s philosophy with our AEs is to give them more of a territory, not less of one, so that they can go wider and get more brokers.”

MAY 2011 


18 How would you define your management style? Do you employ any particular sort of management technique? I am very straightforward. I expect people to know their job and the products they are selling. I don’t mind anybody asking a question, as long as it’s not something that we’ve discussed 20 times. That gets a bit frustrating. I really love self-motivated people. I will do anything for a self-motivated person. I ask my employees repeatedly, what do you need? I am here to support them … I’m not a game player. If I’m challenged with something, I’ll tell you. If I’m happy … I’ll tell you. When I came to TMS Funding, I got so many e-mails from past co-workers asking if they could come and work for me. It was really nice; it made me feel great as I will always give my all for anyone I work with. I think people appreciate knowing where they stand. Do you have anyone who has served as a mentor to you professionally? Have you been inspired by any books you’ve read? I think that I’m inspired by people all the time. I’ve traveled all over the United States obviously for business, and I meet people all the time that have a passion for what they do. I’ve visited Africa on several occasions, and I think those experiences were amazing for me because it’s just a completely different world without things we take for granted. The people

continued from page 17

that I met there were Peace Corps-type of people and people that work for NGOs [non-governmental organizations]. They have very little by way of material goods, and yet they smile, they’re happy. They live their life and appreciate everything that they have even though in our eyes it might be so little. I’m amazed by people that give up their life to live in African villages, administer vaccines and help assist the villagers. I could be a Peace Corps person I think. I would love to do something like that. I would say those are the people whom I admire the most that just do for others all the time without a lot in return. I actually funded school rehabilitation in Ghana and worked with an NGO in Senegal when ABC went under. It really brought home to me what good I could do with the money I had earned. It just felt great. As far as books go, it’s funny because I really don’t read self-help books. I have some self-motivation books that people have given me, but my motivation comes from within. I have read Atlas Shrugged and many other novels referencing the past, and I think it is interesting is to see history continuously repeat itself. We have cycles of greed and good, and desperation and war … these things are not new. I think it is most interesting and telling on how we handle these issues. Life is unpredictable, and on a daily basis, something bad could happen. Maybe its something as minor as putting soy milk in my coffee instead of regular milk, or something as serious as the death of my uncle, which actually just did happen. Of course, I’m very sad and feel horrible for my family, but life goes on. He was very ill and it’s better that it happened so quickly. The key is remembering and placing those feelings appropriately in something positive. Any closing comments? I’m really happy that I’m finding people who are still very excited about our business. There are people out there, like me, who just really want to do well and get back to business; get back to making deals and getting people into houses … just doing our thing. There is a lot of passion out there. We have been dealt with restrictive regulatory issues like LO compensation, changes to the Real Estate Settlement Procedures Act (RESPA), the Home Valuation Code of Conduct (HVCC), etc. but we’ve always been able to deal with it. For as long as I have been in the mortgage business, I’ve just been lucky, that’s certainly how I feel. I think it’s a combination of opportunity, the willingness to jump in, wanting to be challenged and understanding things quickly. And I’ve been lucky enough to have had learned from some great mentors and people along the way. I am grateful!

Dear National Mortgage Professional Magazine: I read Charlie W. Elliott’s article “How Will the Dodd-Frank Act Affect Appraisal Fees?” in the March 2011 issue with great amusement. Not long ago, Charlie was writing articles extolling the virtues of the Home Valuation Code of Conduct (HVCC) regulation on the housing industry and consumers, regardless of its “unintended consequences” of increased cost to consumers, both directly through an immediate spike in fees, and indirectly by creating more administrative red tape in the loan process. It seems Mr. Elliott now has a completely different view of the HVCC derived regulation and its “unintended consequences” as it increases costs to his business and may affect his ability to compete … the exact same issues independent appraisers voiced before their careers were extinguished by the HVCC. Maybe now Mr. Elliott sees the monster HVCC has created for consumers. As more inefficiencies are added to any process, the cost to the consumer rises and the economy suffers as a whole. The purported benefits of the HVCC were suspect from the start, it is now more apparent than ever that the HVCC’s costs far outweigh its purported benefits. We should all support U.S. Rep. Michele Bachmann’s bill to repeal the Dodd-Frank Act. Sincerely, Brian Tata Advanced Mortgage Corporation, Warwick, R.I.

Dear Mr. Tata: Thanks for your interest in my articles. I do think that I must set straight my position on some of these issues. First, I never have supported the Dodd-Frank Act and would not do so. Second, I did support, in principle, the HVCC and still do. These are two entirely different issues in my mind, even though they share a few overlapping characteristics. Few, if any, of the big government, excessive-regulation and inefficient canons of the Dodd-Frank Act are found in the HVCC. Unlike the Dodd-Frank Act, the HVCC was written on a few pages and created little, if any, government waste, bureaucracy and/or onerous regulation. It simply addressed the issues that contribute to mortgage fraud and collusion. Being an appraiser and managing an appraisal company, I have maintained, and still do, that no one having a vested interest in a loan closing should select, supervise or pay the appraiser. There is simply too much temptation and room for collusion. We are seeing some of the results of such relationships between lenders and appraisers in the recent economic crisis, which was caused, at least in part, by inflated appraisals. If you question the severity of the mortgage fraud problem, I suggest that you visit the FBI’s Web site and read the FBI Mortgage Fraud Report 2009. Thanks again for your interest in my column. I am currently writing one on appraisal fraud, which will provide more detailed information on the subject. If interested, you should find it in next month’s issue of National Mortgage Professional Magazine. Sincerely, Charlie W. Elliott Jr., MAI, SRA, ASA Elliott & Company Appraisers, Greensboro, N.C.

The Future of the Mortgage Broker and Correspondent Markets: The Sequel

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In July of 2010, I wrote an article about the gage loan originator has different backfuture of our industry primarily as it relates grounds and levels of involvement in to non-depository lending institutions. our industry, the biggest challenge is After spending several months on legisla- with education and communication for tive issues, visiting Washington, D.C. and all to understand. Some of the questalking with hundreds of loan originators, tions I’ve heard come up on many difI felt drawn to do a follow-up on this topic ferent conference calls (with only weeks nearly a year later as the level of continued from the rule being implemented) were confusion surrounding our industry is simply shocking to say the least. I unprecedented. The Federal Reserve understand that all the interpretations Board’s ruling on loan originator (LO) com- and details may have been confusing, but too many generally do pensation has only added not understand the basics to this confusion and it’s of the rule and are relying important to me that I on their employer, lender communicate topics that I or others to decipher for feel to be extremely importhem. tant moving forward. Most of us, of course, In my last article, I disdisagree with the unincussed the importance of tended consequences the awareness and concerns LO compensation rule we should all have about generates. We will continindustry pessimism, fearue to fight for what is based recruiting and/or right, but no one should self-promotion, excessive have been unprepared by net branching, along with “Most of us, of the April 1st implementaindustry monopolization course, disagree with tion date. Time should toward limited origination the unintended have been more focused platforms which reduces consequences the LO on compliance rather competition. There is no compensation rule than complaints about doubt that our industry generates.” the LO compensation rule, has gone through signifigiven the direction govcant change, but many are making decisions too quickly or not taking ernment regulation is moving. I personthe necessary time to understand the ally don’t like the outcome to the conimplications of their actions. I want to sumer on heightened costs and will expand on this topic, primarily as it per- fight to make the plan a better one, but tains to the recent reform in compensa- I do agree with anti-steering rules and tion. I also want to clearly state, as I did the inability for an LO to be compensatbefore, that I support all channels of ethi- ed based upon the terms of the loan. As we know, creditors are not regucal loan origination for healthy competition and accountability, which ultimately lated under the rule for payments protects the consumer. Both wholesale received on the sale of a closed loan on and correspondent channels must thrive the secondary mortgage market. Only the LO is subject to the rule in the primoving forward. I have recently read opinion articles mary mortgage market, while dealing from “industry gurus” with a product to with the consumer under any originasell or self-promoting bias company tion channel. Because of the possibility managers talking about the “difficult” that the rule favors owners and creditimes ahead for the mortgage broker tors over originators, it’s very important (don’t make me laugh again) and many that LOs understand how this will don’t even originate loans themselves! impact their choices and compensation Listen, if you do not personally origi- going forward. For an owner, it primarily comes nate mortgage loans in the present or have not in the recent past, there is no down to balancing overhead and profway you can fully understand or relate its, while not leaning too far toward with the implications of these rules, let greed or too far toward generosity alone how they pertain to a mortgage when setting compensation plans, corbroker under the wholesale channel responding rate sheets and lender exclusively. For the purpose of this arti- agreements. For LOs, it comes down to cle, I am defending the abused mort- clearly understanding their options and gage broker and wholesale origination determining a compensation plan and channel which is now completely mis- channel that doesn’t price them out of understood. The gloves are off … the market. The primary issue I’ve seen with hands up, chin down. To begin, the new Federal Reserve operating the Fed’s rule is that owners LO compensation rule needs to be put continued on page 20 into perspective. Because every mort-

the sequel

LoyaltyExpress Launches CustomerManager 4.0

MAY 2011 



LoyaltyExpress has announced the release of its fourth generation marketing automation software-as-a-service (SaaS), CustomerManager, delivering retention marketing services to mortgage brokers, lenders, and banks. New features include electronic closing surveys (with loan officer scoring and reporting), as well as robust compliance controls to prevent loan officers from marketing in non-licensed territories. “CustomerManager continues to be the most demanded and flexible marketing service in the mortgage industry,” said Jeff Doyle, chief executive officer of LoyaltyExpress. “With an exceptionally diverse and notable roster of clients, we continue to advance our offerings and solutions to steadily conquer—and exceed—existing and future user requirements and expectations. Our proprietary platform is built on flexible and scalable architecture, which continues to satisfy even the most demanding requests for specialized components and functionality.” The 4.0 release builds upon the original success of the service with the following enhancements: Post-closing, electronic closing surveys with scoring and loan officer performance feedback; referral submission by survey recipient and instant alert to loan officer for immediate follow-up; hierarchical reporting on survey results for branch manager, regional and divisional managers, and corporate marketing users; expanded license fields for corporate Nationwide Mortgage Licensing System (NMLS), corporate banking license, loan officer NMLS, loan officer state license, and state-specific disclaimers; LicenseLock, the suppression of mailings to recipients where a loan officer is not licensed, preventing any regulatory infractions; data sharing with PromotionalMaterials (the LoyaltyExpress Web-to-print flyer site), eliminating duplicate data entry requirements; automated e-newsletter and email functionality on client retention programs for multi-media marketing impact; and automated lead campaigns consisting of direct mail and e-mail communications.

CSi and MortgageFlex Announce Document Technology Collaboration Compliance Systems Inc. (CSi), a provider of compliance documentation technology, and MortgageFlex Systems Inc., a provider of mortgage technology, have announced the integration of their core products. CSi IntelleDocs are now available via MortgageFlex’s loan origination system (LOS), the Residential Lending System. CSi IntelleDocs reduce processing time for lenders by eliminating the need for a separate “doc prep” company interface. CSi’s Document Selection Logic validates and selects all the required documents for loan transactions. Additionally, CSi warrants the compliance accuracy as regulatory conditions change, proactively updating documents. “We are ever mindful of providing our customers with the latest technology advantages and have formed this alliance after an extensive evaluation of available products,” said Craig Bechtle, executive vice president of MortgageFlex. “The last thing our customers need to worry about is compliant loan documents. This alliance with CSi gives them additional compliance confidence while reducing business process time.” “Each IntelleDoc is a smart software application that streamlines the creation of loan packages and helps mitigate compliance risk,” said Dennis Adama, president of CSi. “The combination of our intelligent documentation system with the capabilities of the Residential Lending System is unique in the industry and will deliver tremendous efficiencies to our mutual customers.”

Xerox Mortgage Releases BlitzDocs eXtended Edition to Streamline Paperless Process Xerox Corporation is expanding the benefits of paperless loans to closing agents with the newest release of BlitzDocs eXtended Edition (XE). The new software connects participants electronically so they can work together to process loans without delays or bottlenecks. BlitzDocs XE now continued on page 33

continued from page 19

are not thinking like LOs and LOs are not thinking like owners. The other major hurdle is trying to balance all of this with the least amount of damage to the consumer. The higher your compensation plan, the higher your rate sheet. The question is on what each origination channel can provide in comparison for an LO since it’s all about basis points (BP) and the corresponding interest rates and flexibility. Keep in mind that we are in a transaction-based industry without the benefits of passive or residual revenue. This forces businesses to revise policies when volume is up or down. How do we solve the compensation and interest rate puzzle? It really comes down to the marketplace, the employer’s overhead and how they are balancing anticipated risks with unknown profits. I predict that we’ll be in a testing phase for a good portion of 2011.

Understanding what a “Banker” and “Broker” is, pre- and post-compensation reform I can only hope that any LO reading this understands that they are ultimately a third-party originator (TPO) to Fannie Mae, Freddie Mac and Ginnie Mae with the exception of any rare portfolio loan here and there which likely are still not owned or serviced by your employer. Drawing from a warehouse line of credit does not change your position or status. Although the futures of these agencies are unknown, there is no doubt that we are all puppets to a system that pulls the strings. It makes absolutely and entirely no difference if you are brokering or banking a loan to the consumer.

“Time should have been more focused on compliance rather than complaints about the LO compensation rule, given the direction government regulation is moving.” One definition for a bank is a chartered institution empowered to receive deposits, make loans, and provide checking and savings account services, all at a profit. Most correspondent lenders truly are not banks, however, the term “mortgage banker” is loosely used. I’m personally okay with that unless an individual with this title is brainwashed into thinking a warehouse line of credit is any different than or superior to brokering a loan. That is completely false in every sense of the word. If I borrowed money from my bank and then lent it to a friend temporarily whom I felt to be a low credit risk, would I then be a “banker” until I repaid that loan since the loan is in my name? You get where I’m going with this … Those working for retail correspondent bankers/brokers or net branches

have been told for years to sell “inhouse” programs due to internal underwriting benefits, fast turn-times, service, “we know we’ll get it done,” etc. to justify using their credit lines for more revenue over-brokering. Add significant compensation incentives and you have the fuel to make brokering look like it’s a disease. I view this as the heavy smoke and mirrors hiding reality. Transaction performance, turn time and loan quality are all derived from the human being originator and the systems and lenders their chosen employer has in place … not the channel of origination. All of these benefits have nothing to do with banking or brokering a loan.

We are all mortgage professionals The terms “banker” and “broker” mean nothing more than the channel used in the primary market to provide consumers access to residential real estate financing. These terms do not provide credentials or leverage in the nondepository lending world. The Federal Reserve LO compensation rule will continue to commoditize our product. It’s time we get rid of titles and focus on filtering the problems with this crazy lending climate from our consumers as best we can with a smile on our faces and a focus on protecting their interests for continued referrals. If you are an LO working by referral, self-branding is always better than channel branding.

Understanding steering, pre- and post-compensation reform The Federal Reserve’s anti-steering rule has people concerned when they should not be. While the safe harbor disclosure is optional, an LO’s presentation should have always had this type of comparison done prior to rate lock. Sure, showing the very lowest rate and highest discount points available makes no financial sense and the details need to be relevant, but not providing this disclosure or not offering your borrower multiple rate and fee structure choices within reason is a disadvantage to any LO. Most are not using this form unless brokering, but full disclosure is an advantage and not a disadvantage. I highly suggest that a mortgage continued on page 23

By David Lykken

How Confident Are You? What I find most astounding is that Rep. Barney Frank and Sen. Chris Dodd, who “unwittingly” contributed to the demise of Fannie Mae and Freddie Mac at great cost to the American taxpayers, were the same two “leaders” that “engineered” a legislative “solution” and then had the gall to name the solution after themselves … the “Dodd-Frank” Act! What a boondoggle!

“Leadership involves motivating others to their finest efforts and channeling those efforts in a coherent direction. Leaders must believe that they can count on other people to come through.”

1. Ambition Confident leaders are ambitious. They refuse to merely “exist” or “survive.” They see themselves as able to overcome undesirable or unacceptable circumstances.

are not necessarily competitive with others, but push and challenge themselves.

3. Good communicators Confident leaders communicate using good eye contact. They know how to ask for what they want and to hear advice and counsel. It is less important for them to be right than to be effective. They listen more than they speak!

4. Care about people Those who are confident leaders have a good inner self-image from nourishing relationships instead of toxic relationships. They have learned to detach from relationships which do not allow them to be authentic.

5. Good listeners Confident leaders draw people in by genuinely listening to people. They subtly exude their confidence in a way that attracts people to them.

6. Having a confident “can-do” attitude This has to genuinely come from the heart and a positive attitude in times of difficulty. I like what tennis player Stan Smith said, “Experience tells you what to do; confidence allows you to do it.” But as it relates to leadership, Rosabeth Moss Kanter really brought it in to focus when she said, “Self-confidence is not the real secret of leadership. The more essential ingredient is confidence in other people. Leadership involves motivating others to their finest efforts and channeling those efforts in a coherent direction. Leaders must believe that they can count on other people to come through.”

2. Goal-oriented As I close out this month’s article, I want to share this poem that was given continued on page 22

 MAY 2011

Confident leaders seek to challenge themselves by setting and achieving goals that they set for themselves and those who are in their influence. They



So, we had a failure of leadership at the federal level, but I ask you: “Where were our industry leaders to challenge these misguided federal misfits?” The residential market is a $10 trillion industry. You would think that any industry of our size would have had leaders that would have been more effective in stemming the tide of legislation such as the Dodd-Frank Act. The harsh reality is that we didn’t! Instead, we, as an industry, became “the villain and reason” for our failed economy. Why? No leadership! Unfortunately, the number one industry leader of that era became the poster child of greed and mismanagement. It is for this reason that in January of this year, I started writing this series of articles on the topic of leadership. In my February 2011 article, I outlined the seven characteristics, “The 7-Cs” of Leadership. In March, I wrote about the first of the 7-Cs which was character, the cornerstone of every great leader. Last month in the April issue, I wrote about the second of the 7-Cs which focused on the importance of having

“conviction” as a leader. This month, I am writing about important it is for a leader to confidently follow his convictions and to communicate in confidence! As I started writing this article and thinking of an example of a leader that operated with confidence, I thought of Gene Kranz, the NASA Flight Director of the Apollo 13 Mission. Throughout the Apollo 13 crisis, he demonstrated amazing character and conviction, all the while, leading with a calm and convincing confidence. He assembled what he called his “White Team,” which was quickly dubbed the “Tiger Team” by the press. They quickly went to work on setting constraints for consumption of the spacecraft’s consumables (oxygen, electricity and water) and carefully managed three course-correcting “burns” that altered the trajectory that allowed the astronauts to successfully return home. Because of his calm and amazingly confident leadership, Kranz, his team, as well as the astronauts, received the Presidential Medal of Freedom for their heroic roles during this crisis. If you haven’t read Kranz’s book, Failure is Not an Option, I would encourage you to do so. It chronicles the life and events of this great leader. Here are six key characteristics of confident leaders … and the good news is that these six characteristics can be learned. In other words, confidence is a choice! 

“Houston … we have a problem!” was the famous line from the movie Apollo 13. Tom Hanks, playing the role of Jim Lovell, mission commander, radioed NASA’s Mission Control Center in Houston with those infamous words. As you may recall, he was advising Mission Control that they had just experienced a major system failure and they were in serious trouble. The key to a successful conclusion in the Apollo 13 story was that there was strong leadership that organized an amazing collaborative and creative solution to the crisis. They demonstrated amazing character, as well as an intense conviction and confidence that there had to be a solution to the crisis. I find some interesting parallels between the mortgage industry today and the Apollo 13 mission. Between the years of 2001-2006, we as an industry were “going where no man had ever gone before” (excuse yet another line from another space odyssey). As an industry, we were using experimental loan products never used before to advance homeownership to new levels. Just like the Apollo 13 mission, the mortgage industry experienced major systemic failure across many of our “systems.” This was in part because we were venturing into unexplored realms of “affordable” homeownership, which culminated in the infamous “mortgage meltdown” and housing and economic implosion. However, unlike the team at Mission Control in Houston, who creatively and collaboratively worked around the clock to identify a workable solution to save “the mission,” our “leaders” (and in this case, I am speaking of politicians) worked around the clock to put safeguards in place to make sure we didn’t have another crisis. They failed to recognize that we needed to engineer a way in which we could avert a crisis, figuratively speaking, and safely land the economy.

heard on the street A True Neighborhood Hero “I remember waking up to news that the World Trade Center Twin Towers were attacked and watching in horror as the first, then second Tower plunged to the ground. News coverage continued and I was shocked to learn that America was attacked by terrorists. 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 my country as our soldiers were lining up by the hundreds to enlist in the defense of our country. Most of my family had served throughout the years and I wanted to help where I could.” —Rachel Donovan, Legacy Mortgage, Albuquerque N.M.

MAY 2011 



From mortgages to budget training and credit counseling, Rachel Donovan from Legacy Mortgage in Albuquerque, N.M. has since helped about 3,000 servicemen and servicewomen over a 22-year lending career. Working at Kirtland Air Force Base, she has helped military borrowers all over the world. One of her most gratifying loans was for a woman who had missed some house payments and was afraid to tell her husband. “After a few months passed,” said Rachel, “she became afraid to open her mail so she didn’t. One night during dinner, their doorbell rang. It was a man who told the husband that he was the new owner of the house and they had 30 days to buy the house from him or they would have to get out.” The husband was shocked. Desperately needing to refinance, they started calling lenders and Realtors for help. One of them advised calling Rachel, saying, “If she cannot do it, it can’t be done.” Rachel called the man who had purchased the house from the bank. “I was disgusted with what he was charging them to buy it back,” she said, “making in excess of $10,000 for holding the loan for 30 days.” Not sure she’d be able to refinance, Rachel was eventually able to build a profile and loan package that made sense for the lender and allowed them to approve the loan. “That lady was so grateful, she sent me a Christmas card with pictures of her little girls and wrote, ‘These are the girls that didn’t lose their home because of you, I will always be thankful.’” Volunteering with the JROTC at the local high schools led Rachel to join the local chapter of the Blue Star Moms, an organization that provides support for moms and their children serving in the military. Helping one family at a time is what it’s all about.

Rachel Donovan, NMLS #368845 Mortgage Loan Consultant Certified USA Cares Lender 6725 Academy Road NE Albuquerque, NM 87109 Direct: 505-858-3825 Mobile: 505-328-4792 • Fax: 505-938-5892 E-mail: Apply online:

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

continued from page 14

 REO Allegiance has announced the hiring of Brian Daily as vice president of business development.  New Millennium Title Group has announced the appointment of David Wilson as senior vice president of national sales.  Stephen M. Renna has been named chief executive officer of the CRE Finance Council.  Scott Chase has been named a partner with Absolute Mortgage Banking.  Jim Gross has been promoted to the position of vice president of financial accounting and public policy for the Mortgage Bankers Association (MBA). MBA has also announced the hiring of Thomas T. Kim as vice president of commercial regulatory policy.

lykken on leadership to me when I was a young man by my father who passed away last year. He was very successful and a great role model and mentor. He read the following poem in his wallet and read it to himself almost every day … You Can, If You Think You Can! If you think you are beaten, you are, If you think you dare not, you don’t. If you like to win, but you think you can’t, It is almost certain you won’t. If you think you’ll lose, you’re lost, For out in the world we find, Success begins with a fellow’s will. It’s all in the state of mind. If you think you are outclassed, you are, You’ve got to think high to rise, You’ve got to be sure of yourself before You can ever win a prize. Life’s battles don’t always go To the stronger or faster man. But soon or late the man who wins, Is the man who thinks he can. The “confidence” we see in great leaders is birthed in a strong belief that comes from a deep-in-the-heart knowing that they can and will succeed, and know how to inspire the same in others! Today, more than ever, you want to make sure that you are following a leader or leaders that operate in this

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

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

continued from page 21

kind of confidence, and then, hopefully, you yourself will aspire to become a strong leader. I hope this month’s article is helpful. Next month, I’ll be writing about the fourth characteristic of leadership … strong leaders are charismatic. I welcome your thoughts and feedback via e-mail or a message post on a new LinkedIn discussion “Group” that I created called “Mortgage Leaders.” I would be honored if you would join this group and share your thoughts on leadership. 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

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

the sequel

continued from page 20

There are challenges and issues with the compensation rule under all channels, but nothing we cannot adapt to as we have with all other recent regulation. In this case, things have been blown way out of proportion. With the exception of the inability to provide broker credits to the consumer at closing, lender-paid is an excellent option. It provides more consumer-friendly rate sheets with the ability to offer no-cost loans, as well as an optional discount buy down. Call it origination points or discount points, if the borrower chooses to take on these costs you get the same net interest rate. It makes no difference at all, and I personally prefer this method over consumer-paid any day of the week. It’s consistent, it’s clean and it simply works. I have found that the benefits of YSPs to cover origination services for the bor-


 MAY 2011

The issue on consumer-paid options when commissioning an employee

“The primary issue I’ve seen with operating the Fed’s rule is that owners are not thinking like LOs and LOs are not thinking like owners.”


Lender-paid vs. consumer-paid

came up early on in the process of deciphering the new compensation rules. It sat quiet for a while, and then was reintroduced weeks before the rule went live and concerns were confirmed by the Federal Reserve Board. The good news is that mortgage brokers don’t need the consumer-paid option. Say what? I repeat, the mortgage broker can thrive without the consumer-paid option. Yes, it’s still available to the broker owner, but it’s truly not a necessary option if you’ve set up your systems properly and understand how this thing works. 

broker, or anyone brokering loans, sets the same lender-paid margin with each investor. I know that many are not doing this, but it is my personal opinion that you may have an uphill battle should an audit expose favor to the higher-paying lenders. I will be interested to see what future changes occur as it pertains to how employers and wholesalers are allowing the originating party to control the rate sheets for compensation. Depending on the details, this could potentially be a violation of the rule, even if compensation is fixed for a period of time. On the topic of steering, I want to make something very clear that everyone seems to disregard … if you have the ability to save your client on rate or costs for an identical product and program, but choose not to do so for your own financial gain (such as using a warehouse line over-brokering), this is steering. If you don’t agree with that, clearly discuss it with your borrowers and see how they feel about it. I just witnessed (after getting involved and creating competition) a re-issued Good Faith Estimate (GFE) within days from initial GFE by an originator going from using a warehouse line to brokering with no changes in the market or their borrower’s credit profile. The different was $6,000 out of pocket for the same rate and program due to exposing the credit in Block 2 rather than a cost with hidden service release premium (SRP). Keep in mind, he was still making a significantly fair compensation when brokering. This steering has gone on for way too long under both channels, but change is here. Competition can avoid and expose this behavior, but this type of steering will be very difficult going forward as the Fed intended. The LO employed by the creditor will have an extremely difficult time brokering in general if at all given their compensation agreement cannot increase or decrease. When brokering, the creditor is an originator under the rule. In order for outside lenders not to compete with their warehouse lines on price, they will need to price them out by setting high lender-paid margins or cutting them off entirely. If the company falls short on the required reserves needed to offer Federal Housing Administration (FHA) loans, however, they will be forced to broker which makes things extremely difficult. These factors can be a disadvantage to the LO employed by a creditor. To help alleviate these issues, the creditor must get as many “niche” products as possible under their banking channels while also staying competitively priced.

rower (directly or indirectly with lender While rate is not everything, it can be if paid) are significant after pricing and lost premiums equate to others offering locking several loans under this model. significantly lower adjusted origination Paying any kind of points typically makes charges with equal or higher levels of service, organization and expeno financial sense in most cases rience. Keep in mind, these under the wholesale pricing performance traits are model. Lender-paid simplirequired to succeed in fies this by taking care of THE our now volume-based the brokers’ agreed comCFPB industry. Since we all pensation and starting carry the same proeach loan at a “0 points” grams, I feel that fair PAR interest rate to the pricing and terms cerconsumer. They still have tainly do matter, along full flexibility and a wide with the expected performarray of products and pricing ance. The importance lies on to choose from, giving an advantage to both parties if the margin is set consumer education and the underfair and if it’s clearly understood. I’m not standing of loan disclosures. Ultimately, saying there are no kinks that need to be the consumer will dictate the balance ironed out, but I am saying that those between service and pricing and who questioning the new broker model are they choose and refer as a service misinformed. The biggest challenge will provider. be to those setting their margins too high or those who have a difficult platform Lenders exiting the and/or higher overhead to operate their wholesale marketplace channel competitively and effectively It’s amusing when you see everyone freak out and the mass media that folunder the rule. lows when a lender exits the wholesale Interest rates and pricing lending business. Why? Because fear is As indicated earlier, the interest rates good press during these times of you offer your client will be dictated by change and many times special interyour compensation plan and your ests are at play. Listen, these lenders employer’s overhead. Some will be are leaving wholesale either through greedier than others and some will be greed with now-controlled retail commore generous than others. It’s truly a pensation and revenue potential or matter of finding balance and it’s not poor operational and pricing systems an easy task for the employer or broker- that simply did not make them a comowner or the LO working under them. It petitive entity in wholesale. These will take some periods of testing and lenders would have left wholesale fluctuations to determine where most regardless of these rules at some point will find this balance. It’s important to or another which I am sure we’ll conkeep an eye on the marketplace, as well tinue to see when volume drops as with as the big retail banks to make sure any channel. Change is not new to us in they don’t try to buy the market when the wholesale lending channel and we volume goes down since they’re paying are a resilient group of people. their employees less and have the abilAs noted before, the wholesale lending ity to do so. channel is the most cost-effective and effiI anticipate we’ll see many employ- cient way for a creditor to bring products ers again start working with and train- to market. When it comes to concerns on ing originators on selling higher rates after these rate sheet adjustments. continued on page 24

the sequel Keeping g thee Entrepreneurial Spiritt Alive By Stewart Hunter and Jim McMahan

MAY 2011 



There is a huge opportunity to thrive in today’s mortgage marketplace—despite all the new regulations. It requires firms to embrace the entrepreneurial spirit present in their people, fostering idea generation and then incubating and developing those ideas until they’re ready to deploy. When that spirit flows from the company’s team into the marketplace and then back into the firm, enormous lifts will result in the company’s loan origination volume. When I say ideas, I am not referring to gimmicks, but rather innovations that have a profound effect on the marketplace and ultimately create more relationships that translate into more loans. At Benchmark, loan originators are sharing their innovative ideas with their home offices, and the home office is listening, developing the ideas, delivering them out to their originators, and then supporting them. Despite the difficult regulatory environment, it is not a violation to brainstorm, develop new ideas and bring them to fruition. Neither is it a violation to work with referral partners. In fact, it makes good business sense to educate referral partners—to think of them as “idea partners” and work together on the best ways, for example, to communicate with clients—through co-marketing, blogging, Facebook pages, video or webcasts. The aim is to generate ideas, and then have a dedicated team in the home office that can develop those ideas to ensure that they meet the needs of users. At Benchmark we have created a special department to gather those ideas, add more to them and then redistribute the finished products or tools back into the hands of our sales teams. Here’s how it works: Mastermind groups gather up our mortgage professionals from different regions that have the goal of increasing the size of their businesses. These groups then work together to capitalize on social media and develop other innovative techniques such as video business cards or Facebook applications to reach out to past company clients and referral partners. They work on creating more effective ways of co-marketing and delivering a targeted sales message into the market place. In short, they dedicate themselves to finding innovative ways to maintain communication and relationships. Believe it or not, the approach really works! Once an idea is suggested, the team brainstorms to improve the idea, determines exactly how headquarters will support it, and then determines the best ways to distribute the finished idea out to business partners. This ensures that the new ideas do not remain the private reserve of a think tank, but rather they find their way out into the marketplace. Cooperation is built into this approach because every member of the mastermind group recognizes that performance requires flexibility and an open mind; one that embraces new ways of doing things that is capable of impacting the marketplace in a positive manner. They realize this, but they will also tell you that this method his highly creative and a lot of fun. The aim of all of this is to get originators and branches to share ideas with their home offices, where they can then be developed and supported. One of our favorite tools for this process is video. We strive to make it easy for creative branchbased personnel to create a short video and forward it through the Internet to the home office. Once the video is received, it is edited and completed for use by the loan originator, branch partner or mastermind group. To really serve a marketplace and to be considered an entrepreneur requires firms to develop their own creative formats for generating ideas, gathering feedback and then implementing good ideas. The aim is to ensure buy-in from the company and to create a process for bringing these ideas to market. More importantly, this approach has the added benefit that the creative work will be a part of the culture of the business on a daily basis. Innovation cannot be delegated to part-time status, or worse, given to someone that is not passionate about developing a new idea. Firms that understand how to apply these techniques of entrepreneurship in pursuit of innovation have a competitive advantage over companies that are sitting back, content to do business as they always have. Jim McMahan is president and Stewart Hunter is founding partner and core values officer for Dallas-based Benchmark Mortgage. You can find them both online at

continued from page 23

compliance, it’s irrelevant in our existing I support all non-depositories that run lending climate and the loans currently a good business … banker or broker. I produced and quality control (QC) meas- have great friends and colleagues who ures in place on both ends. It’s very easy work in the correspondent channels and for a lender to expose and weed out bad this in no way is a poke to that model mortgage brokers or bad loans. which is a good model. This is, howRegarding loan quality, if the ever, a poke to those that quesnumber two wholesale tion or clearly do not underlender is at approximatestand exclusive wholesale ly $27 billion funded in originations. Non-deposiLO COMP 2010 with more than tory mortgage lending 90 percent brokered must be protected at all business with just over costs for competition and a two percent default accountability to the big rate doesn’t tell people banks and it should be a something about broker required option for the conquality, I’m not sure what will. sumer with all the increases in The Federal Reserve rule on comcosts and regulation. I personally rely pensation is no different than reforming on the man upstairs to expose good and the Real Estate Settlement Procedures Act evil, but my unrelenting passion for our (RESPA) in the eyes of a wholesale lender industry and those who do right by their … this will soon just be another change clients cannot be denied. For those who we’ll look back on. feel the mortgage broker or wholesale lending channel is not a continued force Non-depository lenders in the industry and deny what or who we are, I’m waiting in the cage of debate and and brokers working the gloves are off. together These new rules will all take time to operate efficiently just as all the other What’s next? changes we’ve recently faced as an  The final definition of a qualified residential mortgage (QRM) and details on industry. Attention now should be exemptions as it pertains to five perplaced on compliance, but also on the cent retention. Agencies allegedly will future of our industry. The Consumer be exempt, but if this is not confirmed Financial Protection Bureau (CFPB) down to the primary market creditor takes over on July 21st of this year. I am than this is a huge game-changer. personally optimistic for the bureau and the potential for a better understanding of our industry at the street  New disclosures and structure under the CFPB. level to the consumer as it pertains to non-depository lending. As the first federal non-depository regulatory agency,  The future of Fannie Mae and Freddie Mac. How can the private we can expect to be getting more attensector grow under all of these regution. I truly feel, from my experiences lations? How can the government with them, that their intention is to regslowly dissolve these agencies in our ulate fairly as well as protect competicurrent housing market? When are tion for the benefit of the consumer. these risk-based price adjustments going to get under control and actu“Keep in mind that we are in a ally apply to the risks?

transaction-based industry without the benefits of passive or residual revenue. This forces businesses to revise policies when volume is up or down.”

As a successful LO and exclusive mortgage broker working under the wholesale channel, I can personally tell you that these compensation changes do not put us at a competitive disadvantage. If anything, I feel that it continues to put us at a competitive advantage with greater flexibility and pricing. There are pros and cons to every lending channel and LOs just need to understand, without influence, what is best for them. Again, unless someone is exclusively brokering loans or has in the last two years or less, it’s nearly impossible to know how these rules truly affect the mortgage broker. Our channel will once again grow when awareness spreads.

 With all of the unknowns and much more … get ready for a wild ride! I believe there is more opportunity for a mortgage professional right now than there has ever been to thrive in their career. I also believe that there is a significant opportunity in the wholesale origination channel for any LO. We are beginning to see new lenders entering or re-entering the wholesale channel to also take advantage of these new opportunities. Be aware, be positive and be driven by the things in life that actually matter. 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

certainly be possible because of the smaller population of loan officers within the industry. The industry will also experience increased volumes as the real estate market recovers. 2. Yes, the real estate market will recover People will be purchasing homes 30 years from now and they will need financing. And there will be more people purchasing more homes as our population expands. As of right now, we are not building enough homes to house the needs of this expanding population.

LO Compensation and the Markets  While the YSP is supposedly banned as payment for compensation, the truth is that the YSP can be used by a borrower for closing costs and a LO’s or broker’s compensation is part of the closing costs paid by a borrower. If the interpretation was taken “literally,” then a “no closing cost” loan would not be possible. The Federal Reserve Board’s intention was not to disallow “no closing cost” loans.  Though it appeared that direct broker compensation was an option to allow an LO to circumvent the restrictions of the rule with regard to getting paid on the terms of the loan, this direct broker compensation does not allow for paying a “commission” to the loan officer working for a broker. In these situations, the loan officer must be paid salary or hourly.  “Point banks” used by lenders many years ago in lieu of overages, are not allowed. However, I suspect you will see an “informal practice” of pricing discretion for more profitable loan officers. See Eric Hollman’s perspective later within this article. Confusing? It is even more confusing because each wholesale lender seems to have their own interpretation of the rules. Since the Fed has put nothing in writing, what I have gleaned may not be any more accurate than what a particular wholesale lender indicates. The real question is: What is the real effect of these rules with regard to LO compensation, the industry, as well as the secondary markets? Here is my interpretation of the broader implications.

Eric Holloman of RateLink gives us this perspective: In the past, LOs who under-quoted the market would simply have the underage taken from their pay. That is no longer the case. If a loan officer closes a loan at a loss, the company is required, by law, to pay a full commission and eat the marketing loss. One thing is for sure, LOs who get caught off guard by unscheduled price changes are in great danger of losing their jobs. You can be assured a company will not be willing to pay commissions and take marketing losses from a specific mortgage loan originator very long. In essence, LOs who keep up with the markets will be in a position to give the best quotes to their prospects. It will

Dave Hershman is a leading author for the mortgage industry, with eight books and several hundred articles to his credit. He is also a top industry speaker. If you would like to stay ahead of what is happening in the markets, visit for a free trial. Dave’s NewsletterPro Marketing System can be found at and he may be contacted by e-mail at

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 MAY 2011

1. Originators will still be able to make a good living in this industry They will not be able to survive using a business model that depends upon making a “killing” on one or two loans per month. LOs will need a consistent volume of loans and this volume will

4. LOs will need to keep up with the markets more fervently While they cannot gain from “raising the rate,” they also cannot take a loss if they offer a lower rate than what is published. This is a major contention of the NAMB and NAIHP lawsuits. The rules were supposed to protect consumers, but how are consumers protected if the LO cannot give them a lower quote?


 No payment based upon the “terms” of the loan, aside from loan amount, is allowed. Translation … no overages and the provision does

not allow an LO or broker to cut their quote to a borrower by cutting their commission.

not be about trying to make more money per loan, but doing more loans at a fair price. Again, volume will be the name of the game and price will be a factor. The more volatile the markets, the trickier this game will become. Great service will still be important. In today’s environment, having a loan officer who understands how to get a deal through the system is essential. Underwriters are looking at loans with microscopes. This part of the job has become more difficult than ever. The new rules proposed by the CFPB with regard to qualified loans will make sure that the old ways of loose credit will not be returning. Any loan which is not guaranteed by the government with less than 20 percent down and outside the prescribed ratios will carry an even higher rate if this latest proposal is finalized. Again, market data will play an important factor. Risk-based premiums will become even more pronounced under this scenario. I imagine a prospect shopping will become even more confused because the quotes they receive will bear little resemblance to reality. Keeping up with rate changes will be imperative because a competitor will leave you behind if the market is improving during the day and you are not aware of what is coming next. Knowing when lenders will change their rates even before the lenders change will be a very important factor in the new world. 

For months, loans originators (LOs) have lived under the threatening cloud of the Federal Reserve Board’s LO compensation rule. For months, everyone tried to figure out what the real implications were. Was the yield spread premium (YSP) actually banned? Was direct borrower payment to a mortgages broker a way out from the regulation? All the while, the Federal Reserve was curiously silent, putting nothing in writing. That is until the National Association of Mortgage Brokers (NAMB) and the National Association of Independent Housing Professionals (NAIHP) both filed suits to stop the regulations. Then, the Fed finally decided to go public with a Webinar to answer questions on their LO compensation rule just a few weeks before the April 1st implementation date. Even after the Webinar, confusion reigned—right up until hours before the April 1st implementation date. Just hours before April Fools Day, a Federal Judge granted a stay of execution for few days so that a hearing could be held, and just a few days later, the stay lifted. While thousands of LOs held candlelight vigils across the nation, praying for a miracle, the truth is that the result of the hearing may not have mattered that much. Why? The best result the industry could have hoped for is a delay until the new Consumer Financial Protection Bureau (CFPB) issued their own rules which will pretty much mirror those which were issued by the Federal Reserve Board because their agency must follow the provisions of the Dodd-Frank Act. The only hope of avoiding this scenario would be Congressional action voiding the DoddFrank Act or the specific compensation provisions of the Act. First, where do we stand with regard to the provisions of the regulations? In general, here is what I have gathered from the many different Webinars and consultations:

3. The need for mortgage brokers and smaller lenders will not diminish The dominant banks are likely to interpret the LO compensation rules conservatively. The bigger they become, the more public and regulatory scrutiny they will be under. Smaller lenders and brokers will have more flexibility to change as new interpretations and different scenarios come up. Right now, because different lenders are interpreting the rules differently, brokers can shop compensation terms, as well as rates. As these differences may diminish over time, competition will cause interesting variances.

“The dominant banks are likely to interpret the LO compensation rules conservatively. The bigger they become, the more public and regulatory scrutiny they will be under. Smaller lenders and brokers will have more flexibility to change as new interpretations and different scenarios come up.”

Expanding Realtor Relationships By Stephen A. Marrs

A key part of my success as a loan originator (LO) has been the development of strategic partnerships with Realtors. Of course, it has taken years to establish this valuable niche, but the result is evident. Approximately 95 percent of my annual business is referral-based, primarily from real estate agents. Our overall focus on Realtor relationships highlights three main areas:

MAY 2011 



in the office. These are strong endorsements that often lead to new associations with agents with whom we haven’t worked before. It seems so simple, but gaining entry to these additional agents has helped further expand my referral-based business. In addition, we send weekly e-mail updates that help agents better understand new loan programs, guideline changes and other hot topics. When the Federal Housing  Education; Administration (FHA) increased its monthly  Value-added support; mortgage insurance premiand ums, we were able to pro Accessibility. vide them with advance notice of the upcoming While the specific stratechanges and how they might gies aren’t necessarily new, impact their clients. Our ethey are effective because bulletins usually include scewe are consistent in their narios of actual borrower sitapplication and because uations, such as how a spemany of our competitors cific loan program can offer don’t go out of their way to customers more purchasing create long-term associapower. One of our objections with agents. tives is to prompt the “Because agents freRealtors to ask questions Education quently work evenings after reading one of these It’s no secret that real e-mail updates, offering and weekends, estate agents are hungry another opportunity to Realtors appreciate for information, especially LOs who can adapt to demonstrate our expertise. in the current, more chalWhen appropriate, we their schedules. I lenging marketplace. They also extend this educationwant to be informed of make sure that myself al approach to the agents’ the latest developments in or an assistant return borrowers. For instance, I real estate finance and calls and provide necwill suggest to Realtors that how specific loan pro- essary support whenwe can contact their buyers grams can help their borwho are currently looking ever they need it.” rowers, thereby leading to for homes to see if we can more home sales. One of our most effec- answer any of their questions regarding tive strategies has been quarterly educa- loan amounts, qualifying and other tion seminars in Realtor’s offices. We issues. We will do this even though anothmake sure these programs highlight rel- er lender already may have pre-approved evant topics that will help them be more them. Even if these discussions do not successful. For example, condos are a big result in new clients for us, we have furmarket in our area, so one of our pre- ther shown our commitment to helping sentations features a comprehensive agents grow their business. review of guideline changes for condo purchases. We also organize mini-semi- Value-added support nars for smaller groups of agents at a cof- As we developed mutually beneficial relafee shop or other convenient location. tionships with Realtors, we saw the opporA special benefit of these presenta- tunity to offer other support that helped tions is that it affords me another set us apart from the competition. A good chance to be on-site and ask the pri- example of this is our coaching of select mary agent for introductions to others agents in the preparation of their pur-

chase contracts. We review the contract to identify possible issues, such as additional buyer costs, seller credits, etc. We then suggest language that can minimize legal issues or other potential problem areas and ensure that any concerns are identified as early as possible. For example, with some condo purchases, we suggest that the purchase agreement include a condo checklist contingency, which speeds up receipt of the information necessary to approve the loan. The seller is responsible for providing the information from the Homeowners Association or their management company. This may save the borrower money since they won’t have to pay for the information and it can also pinpoint issues resulting in a loan denial, prior to the borrower paying for an appraisal. Experienced agents are not necessarily interested in this coaching, but newer ones have told us that our proactive approach is beneficial; saving time for them and their borrowers. Our telemarketing leads assistance has been especially popular. Many of our agents have a group of “C” leads, those prospects who aren’t quite ready to go house hunting. I explain that we will stay in contact with these long-term prospects on the agent’s behalf. We meet with the agents to develop an overall plan, which includes periodic calls or e-mails to their prospects. We want to answer questions about homeownership, financing, credit scoring and anything else that will establish rapport with these future homeowners. When they are ready to purchase or want to know specific information about the area or a particular home, we advise the Realtor who then follows up with them. Of course, this isn’t an overnight process; it can take weeks and months before a “C” lead becomes an “A” or “B” prospect. We give agents weekly phone reports and have regular status meetings to make sure that everyone is on the same page. In addition, some of those “not ready to buy yet” prospects have credit challenges and we are able to further assist agents by preparing their future clients for homeownership. Sometimes it is an easy fix, as we suggest basic tactics to help borrowers improve their credit situation. In other instances, it may take a more involved approach, in which case our Credit Repair Division might be instru-

mental in enhancing the borrower’s credit profile. Either way, we are helping to rescue customers that the Realtor might otherwise lose.

Accessibility We know how important availability is to Realtors and this is something that I continually stress. Because agents frequently work evenings and weekends, Realtors appreciate LOs who can adapt to their schedules. I make sure that myself or an assistant return calls and provide necessary support whenever they need it. We’re able to write and deliver pre-approval letters in a short time-frame, which is significant advantage for those who have interested buyers on a Saturday or Sunday. Our agent partners know this same availability exists when I’m away from the office for a day or longer on vacation or business travel. If I’m not in the office or immediately accessible, they can reach my experienced assistant who is then able to handle critical situations. Should the need arise, I also work with a senior loan officer who can provide advanced support during my absence. The fact that I am available 24/7 can be a major factor in an agent’s decision to use me. Realtors also are impressed that we don’t ignore them during busy refinance periods. Throughout my career, I have focused on purchase business. I have always been careful to pay attention to agents during hectic refi markets, when other originators seem too busy to return calls or offer other support. Agents know that I have their best interests in mind at all times. Of course, I don’t avoid refi business, but rather, have an assistant who coordinates the majority of this activity. I monitor my strategic partner relationships on an ongoing basis, always looking for new opportunities to enhance them. I never assume that because we have worked together in the past, real estate agents will automatically give me their future business. I continue to make an effort to deserve their trust and referrals. Stephen A. Marrs is vice president of sales for Gold Star Financial Group in Ann Arbor, Mich. He may be reached by phone at (866) 249-2192 or e-mail

Social Media: More Than Just a Buzzword It is how you will do business for the rest of your career By Chad Jampedro

ed for his innovation. A great excerpt from the presentation was: Question: “What is the ROI of social media?” Gary’s response: “What is the ROI of your mother?” Interesting response, that is how important this is to your business! Be an originator … originate a loan a day or a relationship a day, both are equally as important to your business. Chad Jampedro is managing vice president of GSF Mortgage Corporation. He may be reached by phone at (262) 901-1444 or email

Building Business Relationships Via Social Media By John Seroka



You’ve probably read plenty of articles especially if you haven’t made a connecabout social media, about how it helps tion with your followers. Why? Because mortgage companies connect with cus- without a connection, it’s unlikely the tomers, about how a good marketing plan messages you send out will even end up today includes a social media plan, about at the top of your followers’ news feeds. how some company quadrupled its sales Which means, your message will be just by using social media, and about how buried under all of the other messages you’d better get involved or get left sent by all of the other friends that perbehind … far behind. son is following. Better to So, after standing on the be actively engaged with shore a while, you dove in fewer followers that you and set up a Facebook page, know are receiving your maybe even set up a Twitter message, than to have a account or a blog. You postlarge following that isn’t ed messages steadily for a even seeing your postwhile, got some followers ings. Didn’t your mother and a comment or two, ever tell you, it’s not posted a few more mesabout quantity of friends, sages, got a few more folit’s about quality? lowers, got busy, couldn’t think of anything to write Start with a “Social media is not about, didn’t see the value strategy in the time you were devot- a straight-laced busi- Making social media work ing online, and before long, ness meeting … it’s takes a commitment— months had passed since just like every other marpeople connecting you last put out a message. with people. It’s way keting project you’ve ever That, or you’re still more low-key than a taken on. This commitstanding on the shore. ment doesn’t mean you formal news release Either way, you aren’t have to spend all day postor a product getting the bang out of ing on Facebook or tweetannouncement.” social media that you ing on Twitter, however. could be getting. All What it means is this: because you just aren’t sure how to make it work. Well, here are some ideas  Help people find you online: List that should help get your social media your Facebook, Twitter, and party started. LinkedIn URLs right alongside your Web site URL on your literature and It’s not all about business cards. Put signage and rack numbers of followers cards in your lobby highlighting Of course you want followers … but your online locations and the type of racking up numbers for the sake of numcontinued on page 28 bers doesn’t guarantee you anything— 

I am sure everyone in the mortgage refinanced qualifying customers to historiindustry is just about fed up with cally low rates and they are not going to be change … the changing guidelines, back in the market any time soon. The rest changing regulatory environment, and do not qualify and have the drastic change in stopped opening the direct income. One change that mail you send. By the way, has occurred is a change they are all checking their for the better. For those Facebook pages each day of us who accept it, it will for relevant content and not only survive through cool stuff people are doing what I have just menor offering. That database is tioned, but it will also alive with every status help in achieving the update. Mailing to 15,000 reinvention and stabilizawill be less effective that tion of their business having 150 people “Like” with new tools and the your page, read your Twitter same relationship-buildupdates or watch your “The terms ‘social ing fundamentals that video on You Tube. The flat have made this industry media’ or ‘social netfact is that consumers want great. working’ are not just a more intimate relationI will admit, it has ship with the companies the buzzwords of the been tough to get excited year; they are the way they do business with. about the mortgage They want to know you you will do business industry on a day-to-day and see transparency in for the rest of your basis. We all have our your business offerings. career. They repredays where doubt, frusThere has never been a tration and anger cloud sent a plan, and most better way to achieve all people I speak to our minds. I will admit of these objectives than these days are withthat the peaks and valthe use of social media leys in this industry have out a clear plan.” tools. The Internet is huge become more of a valley and getting “bigger.” It is than a peak, but there is the tool used by most a new dawn on the horizon and it every consumer to set a frame of referbrings back feelings of excitement ence and find out if they are getting a about the possibilities of what our busi- good deal or not. ness can achieve, not only by creating Social media outlets are tools within new opportunities to attract clients, but the tool. You can earn the trust and servicing existing relationships and business of the consumer by building clients better. Rarely do these two and maintaining a relationship with objectives align so perfectly. transparency. The terms “social media” or “social The bad news is … it can go the networking” are not just the buzzwords other way as well. Social media will of the year; they are the way you will do hold you accountable. If you do a business for the rest of your career. bad job or do not properly deliver, They represent a plan, and most people your customer has a powerful outlet I speak to these days are without a clear to tell the world about the experiplan. ence. This is more powerful than Here is the good news: If you have the old understanding of “Word of been successful in this industry and Mouth,” as this can be a wide open have survived to this point, you are mouth that never stops telling the already proficient building and main- truth. That accountability and transtaining relationships. Now you have parency should be welcomed into new tools to bring these abilities online your business. and build a community that “likes” you As I have mentioned before, you and what you have to offer. have navigated through the changes in Like it or not, your past client mailing the industry and have built relationdatabase is dead! You have either already ships to this point … you are ready for

this! If you have not already started, then by all means get started! If you have started, then take it to the next level. If you think social media and social networking are buzzwords or fads, you may want to update your plan to operate in this decade. I had an opportunity to watch Gary Vaynerchuk present his new book, The Thank You Economy. Gary’s book touches on the power of the Internet and how social media can propel your business. Watching Gary present was fabulous, he is a “real” guy that built a multimillion dollar business by giving away information and has become a social media guru and widely respect-

information customers can expect to receive if they follow you (market trends, rate information, the chance to provide feedback about such things as customer service and more).  Loosen up: Social media is not a straight-laced business meeting … it’s people connecting with people. It’s way more low-key than a formal news release or a product announcement. It’s conversational and casual. Once you have pulled off your tie, though, don’t put on a lampshade— there are boundaries! This isn’t really a party with your best friends even though, once in a while, it might feel that way. If you’re not quite sure what I mean, go to the social media sites of several companies you like, in different fields, and take note of the tone and content of their postings. Emulate companies and people who have been doing it for a while.

MAY 2011 



 Provide information of value: If you’re going to put something out there, make sure it is relevant, timely, helps your followers solve their problems, provides tips to increase sales, announces an event of interest to them … you get the idea. Figure out what information your followers would find valuable and provide it to them. Offer links to articles of interest. Search YouTube for relevant videos that discuss anything from, “How to Choose the Right Real Estate Agent,” “Choosing the Right Mortgage,” to the latest industry news for consumers, prospects or business partners. Then, provide a link via Twitter or upload the video to your Facebook page. Your goal is to be a trusted and valued source, providing information that your followers will want to pass along to their friends and building the kind of relationship that makes you the person they call when they are ready to get a mortgage.  Get your followers engaged: With social media, you want to accomplish more than simply pushing a message at your followers … you want them talking back to you. Remember, there are real people behind those pictures, so make an effort to engage. Here is an example: When you post an announcement of an upcoming event, finish it up with a question, such as, “Are you planning to attend?” This simple question encourages followers to post replies or simply click the “Like” button. Either way, you are now engaging in a two-way conversation. You can even use a Facebook poll to ask a question, find out what is on

your followers’ minds, or ask how you can make your content more useful to them. Hold a Tweet chat with customers to get input on a business-related decision. Invite followers to introduce themselves. Upload pictures of completed events so people who didn’t attend can see what they missed and set aside time for the next one. Run a contest that gives a prize to the person who gets the most people to follow you on Facebook, Twitter or LinkedIn. Just be careful when running contests not to violate the Real Estate Settlement Procedures Act (RESPA), which prohibits awarding prize packages in exchange for a person’s business.  Comment back: When your followers comment on your blog or post, be sure to respond with a thank you and/or an additional comment of your own. This will let them know you are listening and will encourage further discussion.  Don’t talk too much: Attention spans are short—some say 10 sec. short—and there’s a lot of competition. Craft your message to say what it needs to say and be done.  Help worthy causes: At key times throughout the year, set a fundraising goal and raise money for a worthy cause. Not only will you help organizations and people who need it, but you may also generate some publicity for your company when you reach your goal. You can launch such a program with a combination of Facebook posts, Tweets and e-mails.  Don’t be polarizing: It should go without saying, but I’ll say it anyway—don’t publicize support for political parties or candidates, state your religious views or discuss topics about which people have stronglyheld beliefs. It won’t help your business to get into an online skirmish with someone—a skirmish that is then read by all of your followers.

Get social and create some influence According to Arbitron/Edison Research, 51 percent of people over the age of 12 are using Facebook in 2011. That’s 43 percent higher than it was just three years earlier. Clearly, social media is not a fad—it’s a trend, and a rapidly growing one at that. Now think about how that piece of information relates to your business. How many of those people may need a mortgage now or in the not-so-distant future? How many have the potential to be your customer in five years? If you

want to connect with the people who are going to need your services, social media is where you’ll find them. Yes, it can be scary at first. Any new undertaking is. But if you dive in with a strategy to guide you—and let yourself have some fun along the way—you’ll discover the water is just fine.

John Seroka is vice president of Seroka, a full-service branding, advertising, marketing and public relations firm that serves a nationwide client base. He may be reached by phone at (866) 379-0400 or e-mail You also can connect with him at, or on Facebook.

Internet Connections … It’s Not What You Think! Building business relationships through social media By BJ Bounds

If you’ve made it into the 21st Century, tial customers need, while providing peryou’ve probably heard of a thing called sonal, meaningful dialogue. It’s the perFacebook. And if you’ve heard of Facebook, sonal interaction that can make the difthen you’re probably also familiar with ference in building and maintaining Twitter and maybe even a handful of other modern long-term client relationships. If you’ve been in the busisocial media platforms. So ness for any length of many of us devote our time time, you know that buildto outbound marketing such ing and maintain personal as e-mails, flyers, phone relationships are imporcalls, visits, etc., that we negtant for a successful enterlect the most common of prise. modern modes of inbound Historically, these relamarketing—Internet media tionships have been develplatforms. Your colleagues oped over time, through are on Facebook; your comface-to-face networking and petitors are on Facebook; old fashioned leg work. So your fiends are on although modern methods Facebook; and your clients through the Internet can are on Facebook. You “Facebook can help prove to be more effective should be, too. lure potential clients, with less effort, these techI chose Facebook and but your own Web niques, your “old school” Twitter to focus on site can seal the deal.” marketing tools, still have because they are the most their place in the mortgage talked about platforms in business social media and easily the industry. Use your loan origination system most visible. Both of them boast boom- (LOS) for your database and to distribute ing membership numbers and so much your marketing materials, but truly considhas already been written about the suc- er the value of modern digital marketing. cesses of companies using them for cultivating customer relationships and What is a Tweet worth? new business. And if you’re not already When Twitter first made it onto the using social media, perhaps this might mainstream business radar, its usefulness was still in question. After all, in convince you to explore your options: marketing we’re taught to tell a story,  According to, and 140 characters—often abbreviated Facebook was the most visited site into text-speak—does not make a story. in 2010, easily toppling Google for So what exactly is Twitter good for— other than perhaps to find out what your the spot.  At 18 million searches per month favorite celebrity ate for breakfast this last year, Twitter was beginning to morning? The beauty of Twitter is that it can reduce the lead Google had with 88 serve as your “sound bite.” It’s micromillion searches per month. advertising that you can use to generate But it’s not just about garnering as interest for your target audience. many Twitter followers or Facebook fans Combine a great “headline” with a link as you can. It’s about putting out infor- to your Web site, blog or Facebook page mation that your customers and poten- and you have free, effective, inbound

marketing. Simply put, your customers find you with little effort of your own. There have been many studies and presentations explaining the importance of post times and content for Tweets. Recommendations vary tremendously and much of it is common sense. It would behoove you to Tweet multiple times a day. You won’t be visible to all people at all times, but a blitz-type attack can get you on the page. Don’t make the mistake of posting the same message 20 times a day. If you have something new on your Web site, by all means post the link multiple times. However, change your messaging. Besides alienating your followers, you will be violating Twitter rules and this could get you kicked off. Your content can naturally follow the trends of the industry. Post what is important to you; often it is also important to your followers, whether it be clients or colleagues. Helpful tips, links to great sites other than yours, opinions, fun trivia— it’s all up for grabs. Make it personal.

might not mesh with everybody, but we all want to know who we’re doing business with. This is your opportunity to provide fans with things you are doing besides the typical 9-5 grind. Are you involved in your community? Did your company have a food drive or participate in some other charitable event? These are things that help you become more personable and more approachable. Third, use Facebook for a modified version of its original purpose—networking. Networking is so important in the mortgage industry. In person, on the phone, even online, networking can help you develop the industry relationships and subsequent referrals you need to be successful. Find colleagues and vendors who are on Facebook and “Like” them. Seek out the pages of trade organizations where you can participate in meaningful dialogue to offer and receive guidance. Facebook can become your new Google.

And the rest … Do you remember the theme song to

personality shine. In almost no other accepted business setting, can you make such a concerted effort at being personable than in social media? It is important to be polite, considerate, and by all means, check your grammar. Like traditional outbound marketing, cultivating relationships is essential. Remember that “Fans” and “Followers” are people, too so have fun and enjoy the interaction.

B.J. Bounds is senior marketing communications specialist for Calyx Software. In addition to media relations and copywriting, BJ is a contributing author to the Calyx Software blog, CalyxCorner. She has more than 10 years of experience in sales and corporate marketing with a focus on technology that spans several industries. She may be reached by phone at (800) 362-2599 or visit



Facebook fan: Friend of foe? “Gilligan’s Island?” It originally closed


Facebook has morphed beyond the teenager-dominated social networking site. Growth in users of social media shows a trend toward a more mature base. In 2010, Flowtown reported that the average age of Facebook users is 38. To get in on this momentum, consider creating a business page to use separately from your personal page (if you have one). The most obvious difference is that a personal page allows you to have “Friends” while a business page only allows “Fans.” Setting up your page this way is also more appealing to individual Facebook users because if even if they “Like” you and can see your posts, you cannot see theirs. Their personal Facebook page remains personal. While there aren’t too many options design-wise with Facebook, having a business page for your company can serve several purposes, three of which I’ll talk about here. First, if yours is a very low-tech company with not much interest in maintaining a business Web site, a Facebook page can serve as the face for your company. However, since with Facebook you are attempting to cater to the masses who are more technically-minded, I strongly suggest you also maintain your Web site, for if nothing else, to take online mortgage applications which appeal to so many of us. Facebook can help lure potential clients, but your own Web site can seal the deal. Second, your Facebook page is a prime place to showcase your personality to potential clients. Here, too, you should make it personal; most people would rather buy from a person than a company. Granted, your personality



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with “… and the rest, here on Gilligan’s Isle.” But it was later changed with proper billing of a couple of beloved characters, “the professor and Mary Ann, here on Gilligan’s Isle.” Likewise, LinkedIn deserves equal billing in the social media arena. But as a professional networking site that has remained true to its original purpose, LinkedIn hasn’t experienced the attention as the other morphing tools have and it hasn’t t quite branched out functionally. It’s a great tool for professionals, and I encourage you to check it out. If you’re just starting out in social media, you first need to figure out how much time you’re willing to devote to your endeavors. A few minutes, several times a day is all you need, especially if you can post from your Smartphone. If you plan ahead for your basic posts or Tweets, implementation is a piece of cake. You can save your other posts for fun things, links to other news or Web sites or words of encouragement. Choosing your social media platform is not a decision to be made lightly. There are really strong cases for both Facebook and Twitter, and yes LinkedIn, too, and using them together may be the best overall choice. There are simple plug-ins and applications you can use to link your posts from one platform to the other to greatly increase efficiency. Check out sites like HootSuite for an easy-to-use social media dashboard and explore the applications within your chosen platforms. If you take nothing else from this article, take this: No matter what platform you choose, make it personal. Let your

A Roadmap for Building Relationships With Key Sources By Casey Cunningham

MAY 2011 



According to the U.S. Department of The first step for loan officers is to create Commerce, new home purchases a personal and professional profile on each declined 16.9 percent in February to a Key Target to determine and establish 250,000 annual pace, the lowest levels common ground. This empowers a loan since December of 2003. With fewer officer with the ability to deliver a value opportunities to close loans, loan officers proposition that speaks to the Key Target’s need to maximize each and every lead needs and wants. Successful loan officers they encounter. While loan officers understand that the most productive relashould be focused on buildtionships are formed over ing and maintaining raptime and require more port with referral sources than just an initial meetthroughout the year, the ing. Investing the time to market shift has made solid grow those relationships relationships more impormore often translates to tant today than ever before. coveted repeat business. What we are seeing now is The industry is in desthat some loan officers have perate need of core sales either lost the competitive basics of building and culedge that they once had or tivating relationships to never truly learned the critigain or maintain market cal skills of establishing and share. Many lenders are maintaining a network of key “Arming the borrower expressing concern that relationships. In response, their loan officers are not with knowledge and lenders today are focusing effectively building reladelivering on time in more attention and a convenient manner tionships. They understand resources on getting their will create fond mem- that loan officers making loan officers committed to the occasional phone call ories of the mortgage the fundamentals of effective from their desk are not process and lead to relationship-building with effectively prospecting. The greater referrals.” potential Realtors, builders, most successful loan offifinancial planners, CPAs, cers are in the market on a stockbrokers, insurance agents and other regular basis, presenting a compelling value key referral sources. proposition and delivering on his/her stated So how does a loan officer build rela- promise to each source. tionships with key referral sources? First, Developing common ground with a they must identify the individual rela- Key Target can provide an added advantionships that they need to build and tage to a loan officer’s success. A true then determine how best to cultivate understanding of what is important to each different type of relationship. For each Key Target, his or her values and example, establishing and maintaining a how he or she operates individually posiworking relationship with a Key Target, tions the loan officer more as a business defined as someone who sends a pre- partner which leads to greater loyalty. determined number of referrals per month, will require more work than a How to maintain relationship with a source that sends relationships with key along sporadic leads. Determining what sources kind of marketing is appropriate for each It is very rare that someone would relationship type is also crucial. agree to marry a stranger. Similarly,

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loan officers must woo their sources before winning their business. Here are some guidelines for cultivating longlasting relationships with Key Targets: 1. Do business with people you enjoy This will make life much more enjoyable. There is a considerable time commitment involved in growing these relationships. Chances are, loan officers will be significantly more enthusiastic about the pursuit and relationship development if they are pursuing a potential friend. Create a list of qualified Key Targets that you enjoy. 2. Be persistent Persistence is crucial when it comes to following-up with Key Targets. Expect that every target already has a relationship with a loan officer and that they probably do not have a compelling reason to replace them. Persistence will clearly set the loan officer apart from his or her competition and is the one area in which most loan officers tend to be weakest. 3. Spend quality time The more time a loan officer devotes to face-to-face interaction, the greater the likelihood is of winning their business. The more time a Key Target spends with a loan officer, the more likely they will be to refer their business. It allows the Key Target to get to know the loan officer .and deepen the relationship. Why is more business done on the golf course? Four uninterrupted hours together! To be out prospecting daily has never been more important! 4. Share valuable information Each Key Target is unique and should be approached based on their business structure, needs and wants. A loan officer must properly interview a Key Target in order to determine the effective approach in presenting a value proposition that is meaningful and impactful. Create a professional presentation that demonstrates a powerful value proposition. 5. It is personal! To distinguish themselves, loan officers must relate to their sources on a personal level as well as a business level. Find an excuse to reach out and do something fun like inviting sources to a sporting event or concert. Meeting after work for drinks or inviting their family to a holiday cookout is another means in which loan officers can establish a close relationship with sources. It is times and events like these where relationships are solidified. Loan officers must pursue their Key Targets with the same passion and

enthusiasm they would pursue any meaningful relationship. Below are several questions loan officers should consider in pursuit of building their referral sources:  What kind of value are you bringing to your Key Targets?  What is your plan to follow-up with your Key Targets each week?  In what ways do you need to be more persistent?  How much personal information do you know about your Key Targets?  Do you have a compelling value proposition that clearly differentiates you from the competition?

New relationship opportunities Any successful relationship is comprised of a certain amount of give and take, and a loan officer’s relationship with his/her referral sources is no different. Communicating proactively and consistently ensures that the loan officer remains “top of mind” with each source. Equally as important, loan officers must educate borrowers on loans and programs that best fit their needs. Borrowers potentially represent the greatest referral source of all, and in the current market, loan officers need to manage expectations the right way. Whether it is declining values, low response time on underwriting, additional underwriting requirements … it is imperative that the loan officer inform the borrower as soon as important facts arise in a transaction and update them accordingly as terms change. Arming the borrower with knowledge and delivering on time in a convenient manner will create fond memories of the mortgage process and lead to greater referrals. As the Dodd-Frank Act continues to transform the way loan officers have traditionally conducted business, returning to the fundamentals of relationshipbuilding will deliver new growth opportunities for loan officers who have been struggling to remain afloat over the past few years. With the promise of a new crop of potential homebuyers surfacing over the next year, how will loan officers seize this opportunity? As the industry calls for greater transparency throughout the lending process, loan officers that have been trained to deliver exceptional service and effectively prospect will prevail. Casey Cunningham is president of XINNIX, a provider of mortgage sales and leadership development programs. She can be reached by phone at (678) 325-3501 or e-mail

Is Building Relationships on Social Media Worth It? Two reasons why it is and four ways to do it By Joy Gendusa

1. Generating leads

It’s ideal to have repetitive mailings, so don’t just mail once and stop. The more prospects who are exposed to your message, the more likely they are to respond. I always encourage my mortgage clients to have a campaign that consists of three

The first goal of marketing is lead generation. Without leads, there is no one to convert into sales. When it comes to lead generation, social media is not your friend. The simple fact of it is that social

An image of a home A success testimonial (if you have one) The color scheme of your branding Your company logo One specific offer A simple, direct call-to-action

leads flowing into your company, you can begin your social media campaign. The best use for Facebook and Twitter is to use them to connect with your current customers and prospects. Here are some ways in which to do it:  Send an e-mail asking clients and prospects to join you. Be sure to include a benefit of joining (free mortgage advice, a giveaway etc).  Send a follow-up postcard with the same info/offer as the e-mail.  When speaking with new prospects or clients, ask them if they are using social media. Then, do a search for them and connect that way. If you want to make a significant impact with your social media cam-

Now that you have gotten your feet wet, it’s time to get to work! It’s important to note here that while your ultimate goal for this campaign is to convert more clients, you need to be aware that prospects can sense if you are only out for their money and it won’t end well for you. When engaging with clients and prospects via social media, always try to provide helpful advice and communication—this is the cornerstone of relationship building. Examples of this type of communication are: Mortgage updates, news from the industry, testimonials, helpful resources, etc. Once they see that you know what you’re talking about and that you’re not trying to rip them off, they will be more likely to close. continued on page 32


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3. Planning your social Once you have a steady stream of new communication strategy


1. Generating leads 2. How to connect with customers and prospects using social media 3. Planning your social communication strategy 4. Engaging and converting

2. How to connect with customers and prospects using social media

paign, you need to put your resources into it. Direct mail and e-mail are proven to increase the visibility of sites. In the overcrowded World Wide Web, it’s nearly impossible to gain traction online without outside promotion. 

Business owners in the mortgage indus- media is where you build relationships try, like so many business owners and with customer and prospects, not where marketers from every industry, are you start them. If you begin a social standing at the crossroads of old and media campaign with lead generation as new marketing media and trying to the goal, you will be disappointed. decide what path to take. To generate more leads You know the old stratefor your mortgage business, gies have worked for you, begin with a targeted postbut you’re concerned card campaign. Direct mail that they may soon be had always been a staple for replaced or that new the mortgage industry, and media might offer better for good reason—it works! returns on your investPostcards are a reliable way ment. Or, maybe you’ve to increase the number of even dabbled in social leads coming into your media but have not seen business. any results. There are a The first thing to conlot of questions sursider for your postcard “When it comes to rounding social media campaign is the list you for mortgage businesses, lead generation, social will mail to. This will but let’s start by answermedia is not your depend on who your best ing the million-dollar friend. The simple fact clients are. You will want question … to either compile or purof it is that social chase a list of these media is where you Should your mortgage prospects so you can probuild relationships company be on Facebook, mote to them with your with customer and LinkedIn, Twitter and direct mail campaign. prospects, not where other social media sites? Examples of lists you can you start them.” purchase are: Yes! There are two compelling reasons: (1) your clients are;  Late payment lists: Individuals who and (2) your prospects are. are 30, 60 or 90 days late on their In order to grow in any business, you mortgage payments. need to stay in front of your clients and  Reverse mortgage lists: People over prospects and build relationships with the age of 65 with a loan-to-value them—and the mortgage industry is no (LTV) ratio of 50 percent or less. exception! Social media can help you do  Simple refinance lists: People with that by connecting you to clients and an LTV of 80 percent or less with an prospects through a media that is coninterest rate at least one percent sidered more personal and less “marhigher than the current rate. ket-y.” The trick is to know how to use it and to have a plan. For your direct mail piece designs, In this article, I will outline four steps go with professional, clean-looking to make social media work for you: designs including the following:

to five cards that get mailed out over set time periods. We call this a campaign, and it’s proven to produce better response than single blast mailings.

Occasionally, you can use your social media presence to advertise specials that you are running or limited time offers, etc. But make sure you don’t overdo it or you will come off as too sales-like and disconnected. I would say once a month is an okay standard to live by.

4. Engaging and converting


You need to have a plan. So many companies let social media become a “good intention.” They “mean to do it,” but they never seem to get around to it. Make your social media campaign a priority and it will be one—it’s entirely up to you. When forming your content, use software like HootSuite or TweetDeck. These programs allow you to create posts and schedule them ahead of time. This is helpful because you want to be able to repost your content a couple times throughout out the day, since different people will log on at different times. A good benchmark is to post up to 20 times a week depending on how much good content you have. Be sure to ask questions in order to elicit feedback. That way, when people reply, you can send them a personal message and engage in a conversation with them about their mortgage. Here is an example of what your weekly social media checklist could look like:

 Befriend 10 clients on Facebook  Post five Facebook status updates  Respond to 10 friends’ posts on Facebook  Post 10 Twitter status updates  Re-Tweet five posts on Twitter  Respond to five posts on Twitter  Network with five companies on LinkedIn  Respond to 10 questions on LinkedIn

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

MAY 2011 


Weekly social media checklist

LinkedIn is only really useful in marketing for B2B companies, so if you’re only dealing direct to consumers, you can skip it. Facebook and Twitter, on the other hand, are universally effective for B2B and B2C business relationship building. Whatever strategy you decide on, make sure you stick to your plan. Keeping a consistent presence on social media sites is crucial to the success of your campaign. Overall, it is important to remember that business always comes down to relationships—the mortgage industry as much as any other. Buying a home is a big deal and people want to feel a level of comfort with their lender. If used correctly, social media is a great way to build those relationships, both with clients and prospects. Not only that, but as you consistently display your presence on social media, you are building a reputation for yourself among those clients and prospects that could lead to more referrals and more return business. So don’t worry about choosing between old and new media marketing strategies—you’ll get the best results by beating a path right in the middle of them. Bring in leads with postcards and build relationships on social media. Integration in your marketing yields the best results!

FHA Changes Rules on Advertising With Mortgagee Letter 11-17, the Federal Housing Administration (FHA) continues to put its hammer down on the lending community in a continued effort to purge the market of unscrupulous lenders that use deceitful practices to obtain their business. This Mortgagee Letter announced changes to the rules of how lenders and third-party originators (TPOs) are permitted to advertise FHA programs with respect to the use of FHA and U.S. Department of Housing & Urban Development (HUD) logos, names and acronyms. The primary targets of this policy are the lenders that run direct marketing campaigns which advertise FHA loan programs (particularly, the FHA Streamline campaigns). Such campaigns have historically used deceptive packaging and language designed to lead consumers to believe that they are doing business directly with the FHA. This policy is a plus for the consumer, as well as for our industry, as there will no longer be tolerance for these types of deceptive advertising methods. Here are the 10 things you need to know about these changes set forth by Mortgagee Letter 11-17:

10. Failure to follow these requirements may result in sanctions—including civil monetary penalties—against any violating person, party, company, firm, etc.

7. Lenders and TPOs may not, through any advertising, lead the public to believe that they are doing business directly with the government. 8. Lenders must retain copies of all ads

continued on page 34

1. The effective date of these changes is Sunday, May 15, 2011. 2. The “FHA Approved Lending Institution” (FALI) logo, when used in any advertisement, must be placed in a discreet manner with a disclaimer that the lender is not acting on behalf of HUD, FHA or the federal government.

4. TPOs are prohibited from using the FALI logo. 5. No person, entity, party, company or firm may use the FHA logo. 6. FHA-approved lenders and TPOs are prohibited from using the official HUD seal.


9. All lenders must have a quality control plan which includes a process for the review of ads produced by TPOs and corrective actions for violations.

This issue of National Mortgage Professional Magazine is dedicated to building relationships. The type of direct marketing that this policy addresses does not produce relationships, but rather, transactions … and it is a business model which depends on significant capital being dumped into the marketing machine. This new FHA policy will force lenders who have used these advertising methods to instead focus on building genuine relationships with consumers. This is a good thing for everyone, including loan officers. Having trained loan officers throughout the country over the course of many years, I’ve seen firsthand how companies gain their business and the level of contentedness that follows from the models they use. I can tell you that LOs have a greater sense of satisfaction in their lives, and business as a whole are the ones that obtain their business through relationships. The relationships you have and develop with your clients, with your real estate agents, with your accounts etc. give meaning to what you do. Relationships are everything! When you have relationships, it’s not just about the rate and costs; it’s about making a difference in the lives of those you serve by helping them achieve their goals. Creating personal connections with each client you do business with creates the foundation of your business; how you maintain those relationships is what builds the structure upon that foundation. Whether or not you currently have strong relationships within your business model, there is no better time than the present to give serious thought to how you can develop new relationships and strengthen existing ones. FHA is a great niche because of the constant changes,

3. The FALI logo must not be altered in any way.


for two years from the date the ad is run.

new to market

continued from page 20

allows third-party closing agents to view and manage loan packages from lenders in one central place. Loan activity is tracked and reported back to BlitzDocs XE, eliminating the need for agents to call and check on package deliveries. Thorough auditing tools are built in to record and track the entire process. The new software also includes an optional print and mail service for borrowers. BlitzDocs XE can be configured to submit loan documents to Xerox’s delivery center for printing and mailing to borrowers who choose not to complete the package electronically. With this service, materials are automatically mailed to the borrower within the appropriate timeframe required by law. This eliminates the need for lenders to manually check on the completion status of the documents and builds in an audit and tracking process. “We continue to take steps forward to improve the paperless mortgage process for our customers,” said Nancy Alley, vice president of product management for Xerox Mortgage Services. “The latest version of BlitzDocs widens the circle of participants that can work together electronically and provides additional compliance safeguards for lenders.”

enables lenders to shift from a traditional sampling and manual review process to an automated methodology that is more effective at identifying potential issues before they become more serious, and more expensive problems. “We saw a natural synergy between ComplianceAnalyzer and PriceMyLoan,” said Jason Roth, senior vice president at ComplianceEase. “Both companies provide automated technology screening to expedite decision making during the loan origination process. With new Truth-in-Lending regulations that

restrict loan originator compensation and forthcoming changes under the Dodd-Frank Act, loan pricing and loanlevel compliance have become increasingly intertwined. ComplianceAnalyzer provides the same accuracy and efficiency for compliance that PriceMyLoan customers have become accustomed to for automated underwriting and loan pricing, boosting a lender’s QC and closing processes.” The integration can seamlessly transfer a loan from PriceMyLoan to ComplianceAnalyzer, which then analyzes the loan information and generates a comprehensive report highlighting the loan’s risk level and provides details concerning potential violations or exceptions. ComplianceAnalyzer’s

comprehensive audit reports are delivered to users directly within the PriceMyLoan system.

Mortgage Cadence Announces the Launch of Its Cloud-Based LOS Mortgage Cadence LLChasannounced the launch of it cloud-based Symphony Loan Origination System (LOS), an on-demand origination solution for lenders of any size. The product fills a current gap within the marketplace by making available enterprise-level power in a pre-configured solution continued on page 34


PriceMyLoan and ComplianceEase Partner on Compliance With New LO Compensation Requirements


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PriceMyLoan has announced an integration that enables lenders to use the PriceMyLoan platform to make automated underwriting and loan pricing decisions, while simultaneously relying on ComplianceEase to ensure loan-level compliance with thousands of federal and state laws, including policies covering new loan originator compensation requirements. The new functionality gives PriceMyLoan customers seamless access to ComplianceAnalyzer. “The combination of our products ultimately helps fulfill the goals we have set before us: to enable lenders to do more with less,” said Gigi Campbell, national sales director at PriceMyLoan. ComplianceAnalyzer performs multijurisdictional audits on residential mortgage loans, instantly providing feedback on Home Ownership and Equity Protection Act (HOEPA Section 32 and 35) rules, Truth-in-Lending Act (TILA) provisions, state and municipal high-cost/anti-predatory lending laws and consumer credit regulations. The system also audits against various secondary market investor and government-sponsored enterprise (GSE) compliance guidelines, as well as internal lender policies, which include tests covering new loan originator compensation requirements. The Web-based, real-time system

fha insider

new to market

continued from page 32

which (if you stay on top of them!) facilitate you becoming a valuable resource of FHA information for referral sources. For example, in our monthly newsletter The FHA Originator, we provide offices with a monthly marketing piece designed to help MLOs brand themselves as FHA experts, providing MLOs the information to present to an office or individual agent. Take time this month to think about how you can develop new business relationships, as well as how to rekindle old ones. Building just a few more relationships to your network each month will have a significant impact on

your business, income, and on the overall level of satisfaction you have in your business. You just have to decide and take action. 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

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son Les

a of Florid oss: e: Out er B d Schem v u ra o F c e ag er s Mortg Un d ast Texa Major E 203(k) Rehab Loan Program: Foreclosures Present Challenges, Opportunity NMLS an d St ate Testing fo r Mortgage Pr ofessionals

Got an opinion? Want to share your thoughts on the industry? Become a Blogger!

It's free and easy. Just head on over to, register and follow the link in the upper right hand side of the page to become a blogger on our site today! 34

continued from page 33

that locks down compliant processes and any lender can implement and put into production in just a few weeks. “All but the nation’s largest lenders have had to settle for substandard loan origination automation for far too long,” said Chuck Kimball, executive vice president of product experience for Mortgage Cadence. “Lenders of all sizes deserve an LOS that offers them all of the compliance support, timesaving features and reliability that the nation’s top-100 lenders have come to expect. With this offering, we’re giving it to them.” The Symphony application features collaborative process capabilities, realtime data access, a branded Web site and a redundant infrastructure providing 24/7 availability, security and disaster recovery. In addition, all system updates and upgrades are provided automatically for free. “In over 20 years in this industry— serving as an originator, a branch manager, a technology executive inside the mortgage bank and as a technology vendor—I’ve never seen a system this robust for anything close to the price,” said Keith Kemph, Mortgage Cadence executive vice president for Symphony. “Symphony is the technology that will turn the mid-tier lenders of today into the leaders of tomorrow.”

MAY 2011 


PLATINUMdata Launches Property Value Analysis Offering

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PLATINUMdata Solutions, a provider of comprehensive appraisal review and collateral valuation technologies, has launched REALcondition Report, a comprehensive exterior property value analysis based on a physical site visit to the subject property. Released on Dec. 2, 2010, the Interagency Appraisal and Evaluation Guidelines state that collateral valuations must also address the subject property’s condition for originated loans of $250,000 or less. For the past several years, many lenders have relied on automated valuation models (AVMs)—which on their own do not address property condition—to value this segment of loans. These loans include home equity loans, which are a growing segment in the market. REALcondition Report is based on an in-person exterior assessment of the property. The report identifies factors that can affect the property’s condition, including vacancy, “for sale” or “for rent” signs, safety or habitability matters, and other external influences. REALcondition Report also includes verification of the property address and a photo document of the property, and can be added to any of the company’s 19 objective AVMs.

“Lenders are understandably very concerned about compliance, and the new Interagency Appraisal and Evaluation Guidelines are exacerbating that concern,” said Arturo Garcia, chief operating officer of PLATINUMdata Solutions. “Our goal in offering the REALcondition Report is to not only provide a way to stay compliant with this aspect of the guidelines, but also make compliance and quality as fast, economical, and easily accessible as possible. Our clients rely on PLATINUMdata to provide the tools that protect them and reduce their risk. The REALcondition Report further extends our umbrella of protection.” Launches New Property Inspection Report, a provider of customized valuation solutions, has announced the launch of its new Professional Property Inspection report, which incorporates detailed home information from an automated valuation model (AVM) together with verification of the physical condition of the property and full photo documentation. The Professional Property Inspection report is designed to meet the new federal interagency appraisal and valuation guidelines, which go into effect on April 1, the same day the new Professional Property Inspection report by goes on sale, enabling valuation customers to be compliant with the guidelines.’s Professional Property Inspection report provides lenders, servicers and asset managers affordable and time sensitive information to meet the demands of the management and disposition of properties. “The recently published interagency guidelines require that lenders ascertain a property’s current physical condition when utilizing AVMs,” said Walt Coats, chief executive officer of “By supplementing our existing AVMs with external property condition reports and subject photos, as well as the DNA of the subject property, we are assisting lenders in achieving compliance with the new federal requirements while providing local market expertise to the results.”’s Professional Property Inspection reports are conducted by the company’s nationwide network of more than 65,000 licensed real estate brokers and agents, and appraisers. Additionally, the company’s in-house quality control analysts assist in determining the subject property’s location and physical condition, including details of the property’s neighborhood and makeup, resulting in an intelligent determination of a property’s continued on page 37


Investing in communities

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new to market

continued from page 34

condition. All reports contain full photo documentation of the subject properties. The company’s in-house process of compiling and crafting the report together with an AVM provides lenders, servicers and asset managers with a professional property inspection report as a standalone product establishing the home’s condition. “Our clients have a better handle on risk with the Professional Property Inspection report,” said Michael Richardson, president of “We work diligently every day to find the true value, quality and condition of the assets we review, which yields a very accurate valuation assessment and helps mitigate any opportunities for fraud.”

ISGN Launches New Catapult LOS

LoanSifter Announces Enhancements to Keep Pace With LO Compensation Compliance

LoanSifter has enhanced its product offerings to help lenders maintain

of incorporating loan officer compensation into our daily workflow easier than we could have ever imagined,” said Jeff Young, vice president of secondary at Bloomington, Ill.-based Mortgage Services III. “Having all of the LoanSifter features, which include the ability to get price quotes on different scenarios, robust secondary tools, DataTrac integration along with the ability to set up and assign different loan officer compensation plans, has given us a distinct advantage in the marketplace.” Prior to the technology update, LoanSifter had ongoing conversations with the Federal Reserve Board and continued on page 38



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ISGN has announced the launch of its new Catapult Mortgage Origination System, a next-generation loan origination technology developed from the continuing evolution of ISGN’s Diamond and MORvision systems. Catapult has replicated and enhanced the rich functionality of Diamond’s powerful rules engine and fully integrated product and pricing engine. It also integrates the powerful functionality of MORvision, a flexible and scalable LOS, thereby creating a best-of-breed product designed for Diamond and MORvision users in a pure ASP.NET, browser-based system. The Catapult Mortgage Origination System has been designed to upgrade existing MORvision users to the new system without them having to incur the expense and time of implementing a new loan origination system. The data and customization in a lender’s existing MORvision system can be migrated directly into Catapult. ISGN’s MORvision and Diamond systems still will be available to lenders and offer continued customer support. “Catapult enables lenders to employ a loan origination system based on an affordable variable cost structure,” said Murali Gomatam, head of technology products at ISGN. “Lenders no longer need to invest large amounts of capital upfront, plus annual maintenance costs, to obtain the powerful functionality of a superior LOS.” Catapult will include mobile device functionality enabling access by laptop and notebook computers, smart phones, iPads and other tablets. Lenders and their associates gain flexibility and freedom in working with borrowers and other customers, and originating loans outside the traditional home office without the added expense of engaging remote connection tools and services. ISGN anticipates rapid growth and acceptance of mobile tablet devices in the mortgage industry. Catapult offers comprehensive functionality from point-of-sale to closing

and delivery of loans to the secondary market. The system also includes full integration with third-party vendors though ISGN’s Plug-In Partner Network.

compliance with federal Truth-inLending Act (TILA) changes that took effect April 1, 2011—while at the same time, delivering real-time, up-to-theminute loan pricing with integrated marketing and secondary tools. The enhancements to LoanSifter’s product suite now enables clients to customize and report on their own loan officer compensation plans, thus providing them with the tools to better manage their compliance needs. These compensation plan changes flow throughout the entire system, including search results, LOS integrations, secondary desk, management reports, auto-quoting, Web site quoting and marketing campaigns. “LoanSifter has made the transition

The Changing Landscape of Housing Finance By Teresa Bryce Bazemore

We are all managing through one of the most challenging periods in housing finance history. While the government grapples with the many issues of financial reform, those of us in the industry are trying to determine how these changes will impact our customers and our business. The government has defined three objectives:  Supporting the role of private markets as the primary source of mortgage credit.  Returning FHA to its traditional, smaller role as a provider of affordable mortgages.  Reducing the role of Fannie Mae and Freddie Mac.

MAY 2011 



Less than two weeks after my presentation at the Regional Conference of Mortgage Bankers Associations in Atlantic City, N.J. on March 16, the Federal Deposit Insurance Corporation (FDIC) released the proposed definition of a Qualified Residential Mortgage (QRM) as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, a key component of housing finance reform. A comment period on the proposed definition is now underway, with a June 10 deadline. Under the proposal, lenders are required to hold five percent of the risk of a loan unless it is considered a QRM. While the initial proposal recommends a 20 percent downpayment, it is important to note that the proposal also exempts loans guaranteed by the government-sponsored enterprises (GSEs) from the risk retention requirement while the GSEs are in conservatorship. While this will allow the opportunity for private mortgage insurers to continue providing credit enhancement on loans to qualified, low-downpayment borrowers, we believe that private mortgage insurance should be a specific exception to risk retention given its long history of reducing the risk of loss to the lender and investors in mortgage-backed securities (MBS). While it’s easy to be consumed with the impact of these changes on our industry, we must continue to be focused on prospective homebuyers. Our job is to safely and soundly enable first-time and low- to moderateincome buyers to purchase homes of their own. The cost to do this should be both affordable and reasonable. At Radian Guaranty, we support the government’s objective that there be an explicit role

for private sector capital in every part of the mortgage process, and that private mortgage insurance (MI) should be part of the solution. By making loans with MI exempt from the Dodd-Frank Act risk retention requirement, we expand the market and allow more qualified, deserving borrowers to purchase a home. Here are two points to consider:  One-third of homebuyers currently put down less than 20 percent on their homes. Thus, a 20 percent downpayment requirement would shut out onethird of potential home buyers from the housing market at a time when new home purchases are necessary to reduce the unprecedented levels of excess housing inventory. This decrease in demand for housing would reduce home prices, further depress the housing market and impede our nation’s economic recovery.  Private MI protects borrowers, lenders and investors from the risk of default. Private MI attaches to the loan. When a homeowner defaults on a home loan, we work closely with the servicer and borrower to evaluate a variety of options to keep the borrower in their home. If we are unable to find a solution, the insurer may pay a specified percentage of the loan value to the lender. When loans with private MI are included in securitized pools, the claims payments flow through to the benefit of the investors to reduce their losses. Radian will be an active participant in the QRM comment period. The MI industry has provided data which shows how loans with MI have lower default rates than loans without MI. Radian will continue to work to make the dream of homeownership an affordable possibility for qualified low-downpayment homebuyers. Teresa Bryce Bazemore is president of Radian Guaranty. She may be reached by phone at (800) 523-1988 or visit

new to market

continued from page 37

hired a legal firm specializing in mortgage regulatory changes to ensure all of the company’s solutions were compliant with recent and upcoming regulations, including anticipated rules resulting from the Dodd-Frank Wall Street Reform and Consumer Protection Act. Significant consideration was also given to ensure a user interface that remained intuitive and was matched with powerful tools to drive loan production. The updated LoanSifter suite allows mortgage brokers and loan officers to design compensation plans that are broken out clearly in product and pricing search results, but are flexible enough to meet unique business needs. “The business of originating loans is complicated enough without the extra burden of new and constantly changing rules,” said LoanSifter President Bruce Backer. “Our goal is to make life easier for lenders. By continually enhancing our solutions such as eOriginations, OriginatorPLUS and LoanSifter Banker, our customers have a system to help facilitate compliance.”

Wipro Gallagher Solutions Launches Latest Version of NetOxygen LOS Wipro Gallagher Solutions (WGS), a provider of end-to-end loan origination software and services for financial organizations, has announced the latest version of its loan origination system (LOS), NetOxygen 3.4, which includes heightened regulatory compliance, as well as enhanced vendor interfaces and documents/imaging functionality. To comply with recent federal regulations, NetOxygen 3.4 includes updated calculations for the Upfront Mortgage Insurance Premium (UFMIP) factor to comply with the Federal Housing Administration’s FHA’s new ability to adjust its annual mortgage insurance premium. The new functionality works for all loans in which the FHA case is received after the effective date. In addition, NetOxygen now supports new requirements for the Good Faith Estimate (GFE) for the state of New Hampshire by requiring that all fields and the tradeoff table be completed before the interest rate for the loan can be locked. In terms of improving its vendor ecosystem, NetOxygen 3.4 integrated with another leading flood interface, which allows users to initiate a request regarding the subject property’s proximity to a flood zone. NetOxygen 3.4 also includes a new interface for providing lenders with information helpful for completing the GFE. NetOxygen 3.4 also includes

improved document and imaging capabilities so that users can select multiple images from the system and view them as a single PDF file. The updated LOS also now generates information on documents for business and government entity borrowers, as opposed to a person, automating the process for taking an application for “non-individuals.”

Solidifi Launches New Appraisal Quality Product Solidifi U.S., an appraisal management services provider, has announced that it has launched Solidifi iQ 2.0, an upgrade to the Solidifi iQ scorecard that debuted in 2009, Version 2.0 equips lenders with a great deal more flexibility in providing transparency and quality through the valuation aspect of loan origination for the benefit of investors, rating agencies and other stakeholders in the lending process. Solidifi iQ 2.0 is an objective score that provides a view of appraisal quality and completeness based on professional standards and industry requirements. Credit scores that range from 0-1000 and are dynamically weighted based on the last 10 appraisals an appraiser completes for Solidifi. Scores are further segmented by the type of service an appraiser provides—valuation or desk review. Solidifi also conducts a quality control program to further ensure the integrity of appraisals of those 10 appraisals. “Solidifi wants to ensure its customers are connected to the right appraiser the first time,” said Solidifi U.S. President Griff Straw, CMB. “That’s why we’ve enhanced our appraiser transparency strategy to provide features that allow financial institutions to make important decisions about the appraisers to whom they entrust their collateral valuations. Our Solidifi iQ 2.0 score and Appraiser Transparency Report are key to this commitment.” The Solidifi Appraiser Transparency Report supplements the iQ scorecard and is aimed at driving appraisal quality and speed. The real time report compares the performance of appraisers within a specific market area—without violating privacy concerns. Comparisons are based on appraisal turn-around time, revision rate and an appraiser’s Solidifi iQ score. Solidifi then provides a variety of reports to customers that indicate how appraisers rank against each other. From there, customers can make decisions about the appraisers with whom they want to work, thereby ensuring they are initially connected to the right appraiser.

Blueberry Systems Releases Enhanced Conductor Integration Technology

Blueberry Systems LLC, a provider of mortgage production solutions to the financial services industry, has enhanced its proprietary Conductor technology to give mortgage lenders greater control over their loan data, while increasing efficiency and lowering the risk of errors and costly buybacks. These enhancements empower lenders to customize how applications integrated to a given system can or cannot be leveraged by a user. Conductor integrates unrelated software applications and platforms to yield a single, common user experience. Users can now customize Conductor to establish which tools are available to loan officers in the production of a loan. For example, loan officers can be prevented from re-ordering a credit report or automated underwriting findings once the production of a loan reaches a certain point, actions that can create discrepancies between the underwriting data and the loan data seen by the investor. When such discrepancies occur, the investor can force the lender to buy back the loan at great expense. “Users can now also set up flags that turn off certain tools when the status of a loan file reaches a specific threshold

in loan production process,” said Lloyd Booth, president of Blueberry Systems. “Our primary mission is giving lenders greater power and control over data quality and integrity. With our enhanced Conductor technology, users can now customize what their third party applications can do, yet in a way that preserves data quality. The result is fewer overhead expenses and a lower cost-per-loan.” Conductor technology is a critical component of Blueberry Systems’ flagship technology, RELAY, a highly flexible, fully customizable loan production platform. Conductor makes RELAY’s use of a universal data model possible and allows RELAY to leverage the technological advantages of a ‘best-in-class’ system with the workflow efficiencies of an ‘end-to-end’ system. As a result, RELAY offers the highest data quality standards and represents the next-generation of workflow efficiency.

Wingspan Upgrades Investor Portal to Offer Transparency for Mortgage Servicing Stakeholders

Wingspan Portfolio Advisors has announced that it is rolling out its upgraded technology to provide clients with extensive visibility into

Wingspan’s resolution process. The improved Web-based Investor Portal provides each of the stakeholders access to their serviced loans through customizable dashboards, providing transparency into everything being done by Wingspan to derive value from the defaulting mortgages. The new portal has been described as “a controlled, yet flexible, tool with a results-oriented approach that brings an entirely new dimension to special servicing,” said E.J. Kite, senior vice president of information management at Wingspan Portfolio Advisors. Kite spent 20 years at Freddie Mac developing technology, and three years at Fannie Mae as MIS director. Wingspan specializes in handling severely delinquent loans, bringing them back to performing status, or managing foreclosure alternatives to reduce loss severity, including accelerated short sales. They accomplish this with high-touch proprietary methods and technology created specifically for the purpose by Wingspan’s Information Management Department and partner technology firms. Investor Portal’s Version 2.0 was developed internally by Kite and his team with the assistance of Miller & Associates, the Plano, Texas-based technology consulting firm renowned for its rich Internet applications and robust business

intelligence technology. “Wingspan Portfolio Advisors has always been about high-touch and high-tech,” said Steven Horne, Wingspan’s chief executive officer. “Now we have extended that philosophy from the way we deal with borrowers to the unprecedented transparency available to our servicing clients with the new Investor Portal. These new information capabilities empower investors to make critical decisions on loans, whether to approve modification programs or consider foreclosure alternatives in this post-robo-signing environment. The platform enables them to truly understand their best and worst case scenarios with crispness and immediacy.”

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. 39 


 MAY 2011

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!!



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

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. •

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

646.210.2545 • 914.763.8008 “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.

Hard Money/Private Lending

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

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.

 MAY 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 Origination Systems

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

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

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

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.

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!

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


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

Jumbo 42

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.

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

Loan Incentives Regulatory/Compliance Sign up with the Premier Jumbo Lender 877.464.0555, option 2

MAY 2011 


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.

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

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 Management Systems

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

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.

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

Loan Origination Systems

(800) LOANS-15 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.

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.

YOUR SUCCESS IS OUR SUCCESS! 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!

Secondary Marketing Consulting



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

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


Flagstar Wholesale Lending (866) 945-9872 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.

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.


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

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

Wholesale Reverse Mortgages

NATIONWIDE Equities Nationwide Equities Corporation 201-529-1401

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.

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


Register Today! Call 888-409-9770 Ext. 4 to Register Your Company

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.

88 Kearny Street, 3rd Floor San Francisco, CA 94108 Phone: (415) 632-5150 • Fax: (925) 226-1938 Wholesale Lending in: • Nevada • Texas • New Mexico • Utah • Oregon • Washington

 MAY 2011

Now • Arizona • California • Colorado

Sign-on weekly at



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.




Plus Postage & Handling

Think Reverse! Table of Contents

“When I first began reviewing the contents of this book, I became quite jealous ... Atare Agbamu has set down an impressive amount of information ... And he delivers it in an easy-to-read, simple-to-understand style that will make this book essential reading for all reverse mortgage professionals.” —from the Foreword by Jim Mahoney, Co-Founder and Former Chairman, Financial Freedom Senior Funding Corporation, and former four-term Co-Chair of NRMLA’s Board of Directors “The stories [Chapter 15: Profiles in Satisfaction] are the best vehicle to increase understanding and acceptance of reverse mortgages among us laypeople. They are very compelling ...” —Therese Cain, Executive Director, Minneapolis/St. Paul Chapter of Little Brothers—Friends of the Elderly “This book should be required reading for all new loan consultants originating reverse mortgages and is recommended for experienced ones as well. This book provides excellent insight and information on preparing ahead to provide the service our seniors deserve, to ensure a smooth loan process and shorten the time to closing. Most of the problems caused in the processing and closing of reverse mortgages come from inadequate preparation.” —Deanne Opstad, AVP, Senior Underwriter, Generation Mortgage Company

JUNE 2011 Saturday-Sunday, June 4-5 2011 National Association of Mortgage Brokers Mid-Year Meeting Crowne Plaza Valley Forge Hotel 260 Mall Boulevard • King of Prussia, Pa. For more information, call (703) 342-5900 or visit Monday-Wednesday, June 13-15 CRE Finance Council 2011 Convention “On the Road Again” The Waldorf Astoria 301 Park Avenue • New York, N.Y. For more information, call (212) 509-1954 or visit Tuesday-Wednesday, June 14-15 Windy City Marketing Summit Waterford Banquets & Conference Center 933 South Riverside Elmhurst, Ill. For more information, call (630) 916-7720 or visit JULY 2011 Wednesday-Saturday, July 20-23 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 California Association of Mortgage Professionals Annual Convention “Scouting Out Success” San Jose Marriott 301 South Market Street • San Jose, Calif. For more information, call (916) 448-8239 or visit SEPTEMBER 2011 Thursday, September 8 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 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 Tuesday-Thursday, September 13-15 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 Thursday, September 15 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-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 OCTOBER 2011 Sunday-Wednesday, October 9-12 Mortgage Bankers Association’s 98th Annual Convention & Expo The Hyatt Regency 151 East Wacker Drive • Chicago, Ill. For more information, call (800) 793-6222 or visit 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 MO




MAY 2011 

“Atare Agbamu is one of only a handful of people in the reverse mortgage arena who possesses a commanding understanding of the reverse mortgage industry. As an originator, he has hands-on experience educating seniors and their advisors. As author of the “Forward on Reverse” column in The Mortgage Press since 2002, Atare Agbamu communicates nationally with the housing finance community, bringing the unique insights and experience of an ardent reverse mortgage expert into a wider business context. “This book combines Atare’s keen insights and know-how with extensive research to create a first of its kind resource for the reverse mortgage industry. It offers a comprehensive overview of the industry plus detailed information on marketing and originating reverse mortgages. “Present and future reverse mortgage professionals and senior advisors will profit from decades of experience skillfully woven into this book. If you plan to succeed in this industry, this book is the place to start.” —Sarah F. Hulbert, President, Senior Financial Corporation and former four-term Co-Chair of NRMLA’s Board of Directors

MAY 2011 Sunday-Wednesday, May 22-25 Texas Mortgage Bankers Association 2011 Annual Convention Hyatt Regency Lost Pines Resort 575 Hyatt Lost Pines Road • Lost Pines, Texas For more information, call (512) 480-8622 or visit




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

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T h e B E ST B r a n c h S o l u t i o n , P e r i o d . 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.