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O MAY 2010




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MAY 2010 O



Ours are 35% LESS.


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

Montana Association of Mortgage Brokers P.O. Box 1012 O Helena, MT 59624-1012 Phone: (406) 227-5490 O Fax: (406) 227-7000 Web site: Montana Association of Mortgage Brokers

Phone #

Honesty and Integrity E-mail


(406) 844-2345

Vice President/President-Elect

(406) 259-0877

Charles Bott


(406) 294-7070

Loren Olsen


(406) 556-9016

Past President

(406) 652-6677

Gary Tomljenovich

Steven Tucker

Code of Ethics and Business Standards

Montana Association of Mortgage Brokers


Montana Association of Mortgage Brokers

MAMB members shall conduct business in a manner reflecting honesty, honor and integrity.

Professional Conduct MAMB members shall conduct their business activities in a professional manner.

Honesty in Advertising

Delinquencies in Montana Fall in Latest National Delinquency Survey

MAMB members shall avoid unauthorized disclosure of confidential information.

Compliance With Law MAMB members shall conduct their business in compliance with all applicable laws and regulations. For more information on MAMB membership, call the MAMB state office at (406) 227-5490 or visit

Are You an MAMB Member? The Montana Association of Mortgage Brokers (MAMB) is an association of licensed mortgage brokers and loan originators from across the state that share an interest in offering the best possible service to their clients and supporters. By offering quality in-person training, opportunities to meet and exchange ideas and a forum for discussion about the changes and ramifications of the licensing law, MAMB is striving to create a level of professionalism in the state of Montana that surpasses that of all others. Membership in MAMB also carries a membership in the National Association of Mortgage Brokers (NAMB) which gives members a voice in Washington, D.C. and up to date information on what is happening nationally. The Board members and membership of MAMB have been working diligently for the past ten years to establish a strong relationship with the Montana Department of Administration’s Division of Banking, brining quality trainers and courses to Montana and building strong industry relationships.

Montana Association of Mortgage Brokers

O MAY 2010

For more information on the benefits of MAMB membership, call the MAMB state office at (406) 227-5490 or visit


For more information, visit

Confidentiality O

The delinquency rate for mortgage loans on residential properties in Montana was 5.08 percent at the end of the first quarter of 2010, a decrease of 48 basis points, according to the Mortgage Bankers Association. The delinquency rate excludes loans in the process of foreclosure. The percentage of loans in Montana on which foreclosure was started during the quarter rose 1 basis point to 0.66 percent, while the percentage of loans in the foreclosure process at the end of the quarter rose five basis points to 1.89 percent. Mortgage delinquency rates normally fall between the fourth and first quarter of the year due to a variety of seasonal factors, particularly heating bills and Christmas holiday spending. Many borrowers are behind on their mortgage payments at the end of December, but are current by the end of March. The delinquency rate for prime adjustable-rate mortgage loans decreased 45 basis points to 8.95 percent and the rate for prime fixed-rate mortgage loans decreased 15 basis points to 3.15 percent. The delinquency rate for the sub-prime ARM loans decreased 184 basis points to 27.89 percent, while the rate for subprime fixed-rate loans increased 28 basis points to 17.4 percent. The delinquency rates for FHA and VA loans were 7.29 percent and 4.84 percent, respectively—down 142 basis points for FHA loans and down 75 basis points for VA loans. The foreclosure starts rate for prime ARM loans in Montana increased 20 basis points to 1.84 percent, while the rate for prime fixed-rate loans decreased one basis point to 0.34 percent. The foreclosure starts rate for sub-prime ARM loans increased 20 basis points to 5.17 percent, while the rate for sub-prime fixed-rate loans increased nine basis points to 2.57 percent. The percent of prime ARM loans in foreclosure increased 18 basis points to 5.84 percent and increased five basis points to 1.09 percent for prime fixed-rate loans. The rate for sub-prime ARM loans increased 25 basis points to 18.29 percent, while the rate for sub-prime fixed-rate loans increased 58 basis points to 8.23 percent. The percentage of FHA loans in foreclosure increased 14 basis points to 1.65 percent. The percentage of VA loans in foreclosure decreased 32 basis points to 1.35 percent. Among the 50 states and the District of Columbia, Montana ranked 47th in delinquencies and 46th in foreclosures started. Nevada ranked first in delinquencies with a rate of 14.03 percent and first in foreclosure starts with a rate of 3.23 percent. Montana has 18 percent non-prime borrowers (FHA and sub-prime) versus a national average of 22 percent. On a national level, the delinquency rate for mortgage loans on one-to-fourunit residential properties was 9.38 percent on a non-seasonally adjusted basis, down 106 basis points from 10.44 percent in the fourth quarter of 2009. The seasonally adjusted delinquency rate on residential properties was 10.06 percent in the first quarter, up 59 basis points from last quarter’s seasonally adjusted rate. The non-seasonally adjusted percentage of loans in which foreclosure was started during the quarter increased three basis points to 1.23 percent, while the non-seasonally adjusted percentage of loans in the foreclosure process at the end of the quarter rose five basis points to 4.63 percent.

MAMB members shall endeavor to be accurate in all advertising and solicitations.

MT 1

Thursday, June 24, 2010 Friday, June 25, 2010 AAMB welcomes NAMB to beautiful Phoenix! Come see the new NAMB President and the new NAMB Board installation, while participating in some great networking opportunities. State delegates can also participate in the NAMB Delegate Council Meeting.

Phoenix Airport Marriott® 1101 North 44th Street • Phoenix, Arizona 85008 USA

MAY 2010 O



Rooms are $99 per night, and will be honored at the same rate if you wish to extend your stay.

MT 2

Hotel Toll-Free: 1-800-228-9290

Visit for details.

SAFE Smart … Testing, Education and Licensing: The Test in the Bar By Paul Donohue, CRMS


Five Steps to Get the Media Exposure You Deserve


By Josephine Nicholas

The NAMB Perspective


NMP Mortgage Professional of the Month: Kelley Berkheiser, Branch Development Manager, Guaranteed Home Mortgage Company


Value Nation: Is There a Better Way to Select Appraisers? By Charlie W. Elliott Jr., MAI, SRA

HOPE NOW Takes Foreclosure Solutions on the Road


FHA Insider: New FHA Rule … All Brokers Now Have Access to FHA Loans By Jeff Mifsud


The Secondary Market Overview: Rub-a-Dub-Dub … The Fed Pulls the Plug By Dave Hershman


Regulatory Compliance Outlook: May 2010—Mortgage Loan Officers Lose Administrative Exemption


Mortgage Originators be Warned: Credit Repair Could End Your Mortgage Career! By Terry W. Clemans


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


Forward on Reverse: Spring Sale in Reverse Country By Atare E. Agbamu, CRMS


Brokers … Don’t Jump Ship! By Paul A. Lucido


A View From the C-Suite: Branch Development … Four “C” Tips From the “C” Suite By David Lykken


Branch Development: Steer Clear of Risks and Focus on the Finish Line By Joe Ramis


Mortgage Branching in a Changing Industry


Establishing the Branch Relationship By Shawn Sirko & Tina Jablonski











Trend Spotter: Real Estate Investors … The $141 Billion Market By Gibran Nicholas

By Mark Buskuhl



By Eric C. Peck

By Jonathan Foxx




O MAY 2010


May 2010 Volume 2 • 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

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

So many mortgage brokers over the last two years have been facing some serious decisions, such as closing up shop and joining a larger entity (i.e. branch manager position). In this issue, we focus on Branch Development. The section begins with a piece from Paul A. Lucido of PRMG call “Brokers … Don’t Jump Ship!“ Paul makes a great case for riding out the storm in what many still feel is a great business model. In this section, David Lykken’s “A View From the C-Suite” shares some tips on how to find the right branch partner when looking to make a change. Later in the section, Joe Ramis of Inlanta Mortgage shares his tips on what to demand from your partner when looking to make the change. There are a few more pieces in the section that will help you better inform yourself before making the change. The section wraps up with a “Who’s Hiring” directory which includes some of the top branch opportunities currently out there.

Inspiration for success in 2010 and beyond from Mortgage Revolution On May 6-7, there was an event happening in San Francisco that was truly a game-changer for many … Mortgage Revolution. This Mastermind Event was the creation of Mark Green, Mark Madsen and Brian Larrabee. In San Francisco, there was help from local hosts like Think Big, Work Small and folks like Ginger Bell who helped put together the amazing speaker lineup, and David Childers who handled the logistics of the event. Mortgage Revolution is an event for the mortgage originator by the mortgage originator. The speakers, many of whom are top originators in their respective markets, are free-flowing with their ideas. As Carl White from put it: “The sharing of the ideas. The mastermind concept. There is no mine and yours. Everyone is sharing their best ideas. As we share ideas together, I’ll benefit from yours and you will benefit from mine.” Todd Duncan, one of the speakers of the Mortgage In Carl White and Chris Brown’s session, they shared Revolution event in San Francisco, delivers his ideas to help create Facebook pages that “attract referring inspirational message to a packed house real estate agents like flies to a picnic.” The session had attendees including Tim Swierczek of Creative Mortgage Partners in Minnesota and Matt Miller from First Priority Financial in Sacramento walk out of the session ready to start implementing Carl White’s Facebook ninja tactics immediately. Even video master Roberto Monaco, learned about perfecting his Facebook page. “I learned that I am not being effective with my Facebook page,” said Monaco. “I have lots of friends and family view my page, but my Facebook page is not targeted. I have thousands of people in my social network, but they are not clients and potential clients. I am attracting people, but not the people who need help with my services. It’s about the numbers with the right people.” Monaco delivered a powerful session with Jeff Paro on video marketing. Roberto gave simple steps on how to make a video right there in the session! He actually had the room full of attendees walking out of the room screaming, “I am a video making machine!“ (spoken in Roberto’s Brazilian accent). Between Roberto and Jeff’s session, and Frank Garay and Brian Stevens from Think Big Work Small, it’s no wonder guys like Ted Gross from Milestone Mortgage walked away saying, “I need to get video savvy!” There were countless other power presentations at Mortgage Revolution, too many to list here, and there will be a video of the full conference available shortly. In fact, the founders of Mortgage Revolution, agreed to offer the most powerful presentation of the event (quite possibly the most powerful ever at a mortgage industry event), Todd Duncan’s opening session. Todd is responsible for training some of the industry most successful mortgage originators, yet faced some failure and personal setbacks. He took these hard lessons and presented a session that left guys like Hans Bruhner of First Priority Financial from Samoa County, Calif. saying, “Todd Duncan talking about transparency, accountability and memories was huge. Life changing!” You can view Todd’s presentation at As Sponsorship Chairman of Mortgage Revolution, I was truly fortunate to have been able to take part in this event and get a first-hand perspective of seeing the inspiration happen live in person! As Torry Burdick from Mortgage Success Source put it, “This has been the most amazing two days of the industry getting together, getting ready and poised to take back the world. Everyone has been very giving by sharing what is working for them. There were a lot of great speakers and sessions … not a lot of platitudes, but really a lot of back-to-basics sessions and presentations on what works successfully and how these successes can work for you.” Sincerely,




MAY 2010 O

ARTICLE SUBMISSIONS/PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck at (516) 409-5555, ext. 312 or e-mail The deadline for submissions is the first of the month prior to the target issue.



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

Making the change?




Jennifer Moeller Billing Coordinator (516) 409-5555, ext. 324

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




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

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

The National Association of Mortgage Brokers

National Association of Professional Mortgage Women

7900 Westpark Drive, Suite T-309 O McLean, VA 22102 Phone: (703) 342-5900 O Fax: (703) 342-5905 Web site:

P.O. Box 140218 O Irving, TX 75014-0218 Phone: (800) 827-3034 O Fax: (469) 524-5121 Web site:

NAMB Board of Directors Officers President—Jim Pair, CMC Mortgage Associates Corpus Christi 6262 Weber Road, Suite 208 Corpus Christi, TX 78413 (361) 853-9987 President-Elect—William Howe, CMC, CRMS Howe Mortgage Corporation 9414 E. San Salvador Drive, #236 Scottsdale, AZ 85258 (602) 200-8100 Vice President—Michael D’Alonzo, CMC Creative Mortgage Group 1126 Horsham Road, Suite D Maple Glen, PA 19002 (215) 657-9600 Secretary—Ginny Ferguson, CMC Heritage Valley Mortgage Inc. 5700 Stoneridge Mall Road, Suite 150 Pleasanton, CA 94588 (925) 469-0100 Treasurer—Don Frommeyer, CRMS Amtrust Mortgage Funding Inc. 200 Medical Drive, Suite D Carmel, IN 46032 (317) 575-4355

Joe Camarena The Mortgage Source 10120 Southwest Nimbus Avenue, Suite C-7 Portland, OR 97223 (503) 443-1060 O

Olga Kucerak Crown Lending 8700 Crown Hill Boulevard, Suite 804 O San Antonio, TX 78209 (210) 828-3384 O Walt Scott Excalibur Financial Inc. 175 Strafford Avenue, Suite 1 O Wayne, PA 19087 (215) 669-3273 O

Senior Vice President Sharon Patrick, MML, CMI (386) 985-1620 Vice President/Northwestern Region Jill M. Kinsman (206) 344-7827 Vice President/Western Region Tim Courtney (760) 792-5620

Vice President/Southeastern Region Jessica Edmonston (919) 414-3028 Secretary Laurie Abisher, GML, CMI (661) 283-1262 Treasurer Kay Talley, MML (919) 846-4294 Parliamentarian Hulene Bridgman-Works (972) 494-2788

Vice President/Central Region Candace Smith, CMI (512) 329-9040

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

2010 Board of Directors Marty Flynn—President (925) 831-3520, ext. 224 Tom Conwell—Vice President (248) 473-7400 Daphne Large—Treasurer (901) 259-5105 William Bower—Director (800) 288-4757

Sanford (Sandy) Lubin—Director (805) 481-3155 Judy Ryan—Director (800) 929-3400, ext. 201 Tom Swider—Director (856) 787-9005, ext. 1201 Donald J. Unger—Director (303) 670-7993, ext. 222

NCRA Staff Mike Brown—Director (800) 285-6691

Terry Clemans—Executive Director (630) 539-1525

Susan Cataldo—Director (404) 303-8656, ext. 204

Jan Gerber—Office Manager/Membership Services (630) 539-1525

Nancy Fedich—Director (908) 813-8555, ext. 3010

O MAY 2010

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

President-Elect Gary Tumbiolo, CMI (919) 452-1529

Vice President/Greater Northeast Region Colleen-Therese McKeever, CMI (646) 584-8332


John Councilman, CMC, CRMS AMC Mortgage Corporation 2613 Fallston Road O Fallston, MD 21047 (410) 557-6400 O

President Liz Roberts-Fajardo, GML (702) 498-8020 O


National Board of Directors


SAFE Education’s Best Kept Secret Imagine a class that offers the convenience of online access, yet gives you the powerful experience of a live event. Think about a class without the cost of travel or disconnect from the office, yet puts you right into the class live with the instructor in real-time. The revolution in mortgage education that is taking the industry by surprise is Online, Live Equivalent With Live Instructor. Often an overlooked option, this Nationwide Mortgage Licensing System (NMLS)-approved “classroom equivalent” format delivers the convenience of online and the powerful impact of a live classroom event.

Online, Live Equivalent

MAY 2010 O



Because of the obtuse descriptive name “Live Equivalent,” many people are missing the distinct advantages of this best kept secret in education. This versatile format is an “online” delivery of an actual live class event. Online, Live Equivalent education can be streamed anywhere across the nation to your computer or to a group in the conference room at your office. This interactive format may include full audio and video streaming of the instructor teaching the material in real-time. When considering an Online, Live Equivalent course, be sure your provider offers all the course text, the live PowerPoint presentation, exercises, quizzes and the ability to interact directly with the instructor. One advantage to “live equivalent” is that your questions are answered and you hear the responses to other students live while you are absorbing the material. Your retention is enhanced by participating in a live class over a concentrated two- or threeday period and because you are not reading or working alone.


Know Your Options When choosing your pre-licensing (PE) course, keep in mind not every education format is appropriate for you. Each person’s learning style is different. Only you know how you learn and retain information. If you prefer online education to live classroom, keep in mind self-paced online is approved for continuing education, but not for PE. The only other approved online format for PE is instructor-led online. Instructor-led online education is similar to a correspondence course with a defined start and end period; normally spread out over 10 days or two weeks. The instructor leads the students through the course by assigning reading material, exercises and quizzes that the student must complete on their own. The advantage of this format is that the student can fit the coursework in on their own free time. The disadvantages are the student must do all the reading on their own and the additional time it takes to complete all the exercises and assignments. Do you remember homework?

SAFE-Smart Tip Your education choice will be critical to your success on the test, so choose wisely. If you prefer online education, the advantages of Online, Live Equivalent are significant. It delivers the powerful impact of a live class, the accessibility of online, you get the class done in 20 concentrated hours and there is no homework. My SAFE-Smart Tip is to check out this best kept secret of SAFE education. Paul Donohue, CRMS is a 23-year industry professional and founder of Abacus Mortgage Training and Education. Paul served on two NMLS working groups, establishing the new national education protocols. Go to to find out more about your obligations for testing, education and licensure, or call (888) 341-7767.

NAMB applauds three housing bills approved by the House Committee on Financial Services The National Association of Mortgage Brokers (NAMB) has applauded the House Committee on Financial Services for passing three bills positively affecting the mortgage industry, clearing the bills for consideration by the full U.S. House of Representatives. The bills would, among other things, provide additional funding for the U.S. Department of Agriculture (USDA) Rural Housing Service Loan Guarantee Program (Section 502 Loans); would extend the National Flood Insurance Program; and would provide necessary Federal Housing Administration (FHA) reform to continue offering borrowers affordable mortgage options. “These bills have cleared a legislative hurdle today, and NAMB commends members of the House Committee on Financial Services for taking a step forward in addressing the nation’s affordable housing needs,” said NAMB President Jim Pair, CMC. NAMB recently sent a letter to Congress urging them to not allow the USDA Loan Guarantee Program to exhaust its fiscal year federal funding, which was projected to run out within days. HR 5017, the Rural Housing Preservation and Stabilization Act of 2010, sponsored by Rep. Paul Kanjorksi (D-PA), would provide additional budget authority for USDA to continue to guarantee rural loans, as well as make the Loan Guarantee Program self-funded going forward. HR 5017 has been approved on the House floor under suspension of the rules. NAMB, along with a coalition of industry representatives, sent a letter to the House Committee on Financial Services in support of FHA reform included in HR 5072, the FHA Reform Act of 2010, sponsored by Reps. Maxine Waters (D-CA), Barney Frank (D-MA), Al Green (D-TX), Shelley Moore Capito (R-WV). NAMB also advocated for an extension to the National Flood Insurance Program and other provisions designed to strengthen the program included in HR 5114, the Flood Insurance Reform

Priorities Act of 2010, sponsored by Rep. Maxine Waters (D-CA). HR 5114 will be considered on the House floor shortly, a definitive date has not yet been chosen. “NAMB looks forward to continuing its work with members of Congress as the bills move forward, in what is sure to be a victory for consumers,” said Pair. For more information, visit

FHA to issue regulations to increase net worth requirements of approved lenders The Federal Housing Administration (FHA) has announced new regulations to further reduce and better manage counterparty risks to its insurance funds as it continues to play a critical role in the nation’s housing market. FHA will issue regulations to increase the net worth requirements of FHA-approved lenders, strengthen lender approval criteria, and make lenders liable for the oversight of mortgage brokers. “These changes support quality mortgage lenders while excluding organizations that are ill-equipped to handle the risk associated with market variations,” said FHA Commissioner David H. Stevens. “That is particularly important now when a robust, competitive mortgage finance market is a crucial element in rebuilding the American economy. Lenders bear the overall risk of FHA-endorsed loans, therefore it makes sense for them to approve their counterparties and have sufficient capital to operate.” The final rule permits FHA to more effectively focus its resources on lenders that pose the greatest potential threat to its insurance funds and to ensure that lenders possess the resources appropriate for the financial services they deliver. FHA solicited public comments on this new regulation and considered those comments in the development of the final rule. On Sept. 18, 2009 FHA Commissioner Stevens announced a set of credit policy changes that enhanced FHA’s risk continued on page 7

Five Steps to Get the Media Exposure You Deserve By Josephine Nicholas

How many times have you watched the news, listened to the radio or read the paper and thought, “I could have been the ‘mortgage expert’ they interviewed.” If your answer is “many times,” this article is for you. As a public relations agent with clients scattered throughout different industries across the country, I would like to pass on five PR tips that will help you position yourself as the media’s local expert. Now, more than ever, our industry needs positive media exposure, so read on and get ready to be the media’s newest star!

Step #1: Find yourself

in the media whom you want to address, and drill down on the message you will be sending them. Ask yourself questions like: O Which media outlets are best positioned to get the word out about you and your knowledge? O What are the current headline stories in your market, and how can you contribute a new voice to those subjects? O What angles are these media outlets not addressing that you have the scoop on?

Step #3: Send the information to the media You are now ready to send your information out to the media. There are programs available that have the direct contact information to local and national media outlets. You can plug into those sources, or you can gather all the direct contact information for your target media outlets and send it to them one by one. You can also connect with a PR agent to do this for you. Many PR agents charge unnecessarily large monthly fees, so make sure you find one who is charging a fair price for the service they are offering.

Step #4: Respond well to the media Make sure that you and your team members prepare a system to handle the media response. Sometimes, you will get an immediate flurry of activity from the media; other times, they save your release and information and contact you at a future date; and still other times, they reprint your quotes, or talk about you on the radio and TV without telling you first. Remember, you are helping the media sound smarter—they value that and respect you for helping them carry out their job well. Additionally, you are contributing to the greater good of society by easing clients’ and the public’s fears—so, keep in mind that, although you won’t always know the entirety of the impact you’re having, be assured your message is reaching its audience. There’s something else you’ll want to keep in mind—the media doesn’t always credit you with its newfound knowledge that you’ve so graciously provided. Yet, whether you are or aren’t getting the credit for the information quoted, keep the big picture in mind— you are affecting more people than you could possibly imagine by passing this knowledge on to the media, and you will get rewarded. When the media outlets answer, respect their time and questions— remember they are generally working on very tight deadlines. In your phone

interview or e-mail reply back, stick to your expert opinion on how the news and the facts in your press release affect the media’s target market. If you don’t have the correct information readily available, do not make the mistake of misquoting an answer to their question; tell them you will get back to them with that particular answer. Then, promptly use the resources available to you to gather that information and send it to them that same day. They will be more impressed with your solution to take more time and effort to find for them the correct answers, than with you making a fool out of them by supplying them with misinformation. This is also an opportunity for you to show that you run a high quality mortgage firm, by having access to resources others may not have available to them. Remember, once you earn the media’s trust as a reliable source, they will call on you time and again.

Step #5: Repeat Media outreach is not a one-night stand; you want to repeat these steps over and over in your business practice to get the most effect out of your media campaign. As with everything in life, consistency matters, so stay focused and don’t get discouraged. Once you’ve earned a good reputation with the media contacts, media professionals will forward your releases to colleagues, save your releases, and put you on their lists so that when they need a certain question answered, they’ll reach out to you, the expert. Josephine Nicholas runs her own public relations agency, She specializes in helping map out individualized media campaigns, and offers a comprehensive array of services to handle the diverse PR needs of her clients. Josephine’s clients have also appeared in other national and local media outlets, including, but not limited to, MSNBC, Fox Business News, CNN, NPR; in The Wall Street Journal, Reuters, The New York Times, The Washington Post, Financial Advisor Magazine, Financial Planner Magazine, CPA Magazine, and various entertainment and lifestyle outlets. She may be reached by e-mail at

Here’s what our customers are saying: “My loan officers have been closing more loans by running credit reports through PCS’s credit scoring services”

O MAY 2010

Learn more about our services by calling, Lorenzo Pugliano, President and CEO at 631-299-2084.


• Rapid Rescore (NO DOC) • Score Increasing Tools • Monthly Credit Score Monitoring (SCORE WATCH) • Instant Credit Reports • Same Day Credit Supplements O

Once you’ve answered these questions, you have “There’s something what you need to start The first step in getting else you’ll want to creating the message; the media exposure you keep in mind—the now you can start writing deserve is to understand your own value and why media doesn’t always your messages down in the form of press releases. the media needs you. credit you with its When you tell the local There are several things newfound knowledge media how a national criyou may be an expert in, that you’ve so grasis is affecting the local including: ciously provided.” market (true stories from your clients or referral 1. Unique financial concept(s) you implement in your mort- partners), this gives you the star quality and authentic perspective that others gage practice 2. A segment of your local market that may not have. I suggest telling your message you focus on: through a press release format, because a. Investment properties it’s something the media outlets are b. High-end homes used to seeing; however, you can write c. Foreclosures a talking points outline, which will also 3. Unique referral partners serve a good purpose when you get The list is endless; each of us operates ready to approach the media. In writing a press release, you want our business differently, and we all have something at which we are so good we to make sure you stick to facts and your could do it in our sleep. Take some time to expert opinion on how these facts really find out what that niche is for you. affect your target market. Make sure Once you find out your forte, and your release is written in story format, where you are most confident in your spiced throughout with quotes by you mortgage practice, go one step further as the expert. Many outlets will copy and make sure you thoroughly under- and paste your quotes directly into stand your subject matter and become their print/online media or re-quote a student of the market and study you on the radio/TV. You will want to human behavior. Examine what others make sure the title of your release is are doing and talking about in the not too long, because they won’t open media, see what angles they are pre- it with a lengthy title. Sprinkle direct senting on the subject matters you are links to your site, graphs, charts, etc., most qualified in. Be a student of your within the release; this serves two purclients and referral partners—find out poses—it points the media back to you, what the market is lacking that the and it validates your release. Make sure media is not providing. Use resources you do not sell or market yourself available to you to refine your expert- throughout the release or you will get ise, and get grounded—be the best in “blacklisted.” These releases are strictly a way to get your information to the those areas that you can possibly be. Now that you’ve solidified your cor- media—the fact that you are the expert ner of the market, you are ready to go quoted, “sells” you to the media and audience. out and educate the media. What many of us don’t always realize is that, though the media may seem Step #2: Create your target audience and message like they are unapproachable, in most It’s time to create the group of people cases, they are desperate for new infor-

mation, facts and story ideas. You will be invaluable to them if you provide them with quality content.


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

The Ever Growing Voice of NAMB in Our Nation’s Capitol

MAY 2010 O



A Message From NAMB President Jim Pair, CMC


There seems to be some concern with a small number our members regarding what is happening in Washington, D.C. and what the National Association of Mortgage Brokers is doing to ensure our industry is being protected. Let me assure you that legislative protection is the highest priority of your association. Our staff and our lobby team are constantly monitoring Capitol Hill and the agencies to learn the hot issues of the day. The rapport we have on the Hill and with the agencies is the best we have ever experienced in the history of our association. Let’s look back and see where we were and where we are now. For many years, we played a very small role in Washington, D.C. It was difficult to find anyone who would meet with us to hear our position on issues that directly affect our industry. Through the strong leadership of previous boards and a constant message that benefitted not only our industry, but protected the consumer, we now have a seat at the table. We are invited to present our position at various legislative committee hearings. We are able to meet with the various regulatory agencies as proposed rules are being formulated. We are respected as a voice of our industry. Some of our positions have taken years to be implemented either by Congress or the regulatory agencies. Let’s look at two good examples of how long the process can take. The first example is the passing of the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act), which created the National Registry and the licensing of loan originators. Another example is the Federal Housing Administration (FHA) now allowing all mortgage brokers to originate FHA loans without having to go through the cost of an audited statement. These issues were advocated by NAMB for years before they became a reality. The strong relationship that NAMB has developed with Congress over the past few years gives us the opportunity to be a part of legislative process from the very beginning. We now have the opportunity to hear what is being considered and lend our voice on how this would impact our industry and the consumers. Two examples of NAMB being invited to be a part of the process in the early stages was when Congress was considering a net worth requirement of $1 million for mortgage brokers and the banning of yield spread premiums (YSPs) as part of new bill. Working directly with staff and the legislators themselves in the very beginning, we were able to have both dropped. These two issues would have put the mortgage broker out of business. It seems that there is something happening, almost on a daily basis, in Washington, D.C. It is very important that you, as a member of NAMB, are kept informed of those issues that affect our industry and the way we do business. NAMB communicates these messages by e-mails to its membership. We use legislative alerts, weekly “News From NAMB” bulletins and “Calls to Action” when your help is needed on a particular issue. Hopefully, if you are an NAMB member, you are receiving all these types of correspondence from us. If not, please check your computer to see if it is blocking e-mails from NAMB. If it is not, please contact Paul Nierman of NAMB’s Membership Department at to verify your current e-mail address in the NAMB database. This will allow us to make any corrections to ensure you receive these important e-mails in the future. NAMB’s Web site,, is a good way to keep yourself updated on

legislative matters and other important information about what is happening with your association. You will be able to review the accomplishments of your association by clicking on the document, “What Has NAMB Done in 2009.” This document will give you a breakdown of the month-by-month happenings of the association in 2009. The reasons for the success of our national association in Washington, D.C. over the past years is due to the dedicated staff at NAMB, the many volunteers and members who have served on the Government Affairs Committee and have given so much of their time and talent to the legislative issues, and an exceptional team of lobbyists. Without these ingredients, NAMB would not have been able to accomplish our objective of protecting our industry and the consumers we serve. Jim Pair, CMC is with Mortgage Associates Corpus Christi and is president of the National Association of Mortgage Brokers. He may be reached by e-mail at

Certification? Certainly! The “Buzz” Around Certification

A Message From NAMB Certifications Committee Chair Pava J. Leyrer, CMC, CRMS My article this month is really geared toward those individuals who have already taken the voluntary steps of validating the knowledge, skills and abilities they possess beyond the regular scope of their jobs. We have the attitude that our professions are worth the extra effort to become certified and proudly display those certifications. We realize the growing statistics that consumers are looking for those individuals who set themselves apart and are able to demonstrate their willingness to excel. It has been increasingly difficult for mortgage brokers and loan originators to show that the media accounts of the minority in our industry are no different than bad actors in other industries. Being certified and showing your commitment to honesty and lending integrity are key ways to promote our passion and ability to provide for families in our communities. Those of us still surviving and fighting for the rights of our customers show these very aspects every time we help someone in need. The National Association of Mortgage Brokers is proud of every person who has taken the time and effort to reach the goals of certification they earned through education, experience and hard work. This is nothing new to those of us who are diligent in what we have done for homeowners and will continue to do. Share the benefits you have received from certification with someone today. Let them know that this is a great way to promote and take pride in a profession that is extremely important and represents our united dream … the American dream of homeownership. Those who are not certified may already have the education and criteria to meet the requirements. Check out the “Certification” section of NAMB’s Web site,, apply today to broaden your horizons and become certified. Pava J. Leyrer, CMC, CRMS, is president and owner of Heritage National Mortgage Corporation in Grandville, Mich., and Certifications Committee chair for the National Association of Mortgage Brokers. She may be reached by phone at (616) 534-4993 or e-mail

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management function, including the hiring of a Chief Risk Officer for the first time in the agency’s 75-year history. In addition, Stevens announced his intent to propose new regulations to further strengthen FHA’s risk management. The final rule, to be published in the next few days, makes good on that promise and will: O Strengthen the capacity of FHAapproved lenders: Since 1993, FHA has required approved lenders to have a net worth of at least $250,000. To ensure that FHA lenders are sufficiently capitalized to meet potential need, effective immediately, all new lender applicants for FHA programs must now possess a minimum net worth of $1 million. O Provide sufficient time for current FHA lenders to increase net worth. Effective one year following the enactment of this rule: O Current FHA approved lenders, with the exception of small businesses, must possess a minimum net worth of $1 million; O Current FHA-approved small business lenders must possess a minimum net worth of $500,000.

Consensus of opinion? FHA withdraws approval of two lenders

O Due to bad loans, Fannie Mae and Freddie Mac have both been taken over by the federal government and are costing the taxpayers billions of dollars. (fact) O Since 2007, we have had 230 banks failures, due to toxic mortgages, with Federal Deposit Insurance Corporation (FDIC) losses of $60 billion, and there is much more to come. (fact) O By the end of 2011, we will have experienced, in four years, 10-plus million home foreclosures. (likely fact) Our country cannot afford another mortgage meltdown. Background checks and ethics training will not solve the problem. The taxpayers, bank stockholders and homeowners deserve better. —Charlie W. Elliott Jr., MAI, SRA, President, Elliott & Company Appraisers, Greensboro, N.C.

• Tax Return Verification (4506 tax transcript done in less than 24 hours in most cases) • Flood Certification Report • Automated Valuation Model (AVM) Reports • Verification of Employment (VOE) Here’s what our customers are saying: “By using PCS’s VOE service, I was able to move the cost onto the HUD1 and virtually get the VOE’s done at no cost to my company” “PCS’s high level of customer service ensures that my loans close on TIME!”

Learn more about our services by calling, Lorenzo Pugliano, President and CEO at 631-299-2084.

O MAY 2010

continued on page 8

Certainly, I respect Mr. Tata’s opinion and his right to it. It is not my nature to argue over such issues; however, given his interest in facts, I will respond with some facts to ponder.


The Federal Housing Administration (FHA) has announced that it is permanently withdrawing its approval of Atlanta-based RSA Financial Inc. and 1st Alliance Mortgage LLC of Houston, Texas. The actions announced prevent these lenders from originating and underwriting new FHA-insured mortgages or from participating in the FHA singlefamily insurance program. The U.S. Department of Housing & Urban Development’s (HUD) Mortgagee Review Board (MRB) also voted to impose a $15,000 civil penalty against RSA and seek $267,900 from 1st Alliance. HUD’s MRB cited RSA for misleading HUD that it was properly licensed by the Georgia Department of Banking and Finance at the time the company submitted an application to FHA for lender approval. In addition, the MRB alleges that RSA submitted false and/or misleading information regarding the criminal conviction and sanction history of its owner and executive, Ramsey Suphi Agan. HUD claims 1st Alliance engaged in prohibited branch arrangements, provided false certifications, failed to implement a quality control plan, and a number of other violations of HUD/FHA standards. “If lenders want to do business with the FHA, it’s critical that they provide complete and truthful information so that we can properly determine who we’re dealing with,” said FHA Commissioner David H. Stevens. “If any lender can’t operate within FHA’s guidelines, they can’t do business with us.” The permanent withdrawal of RSA Financial’s FHA approval is based upon violations set forth in a Notice of Violation dated Dec. 4, 2009. RSA’s application to FHA contained false and/or materially misleading information in connection with RSA’s failure to obtain proper licensing in the State of Georgia and in connection with Agan’s history of criminal convictions and administrative sanctions. Specifically, RSA represented that company officials “are neither currently, nor have ever been, debarred, sanctioned, fined, convicted, denied approval, or refused a license by any state, federal, or local

Although Charlie W. Elliott Jr.’s article [National Mortgage Professional Magazine, April 2010 issue, page 4] was well written and easy to understand, his ‘article’ or more accurately, editorial, “The Mortgage Meltdown and Appraiser Selection,” was long on hyperbole and short on facts. He never mentioned whose opinion was being referred to, but used ‘consensus of opinion’ as the basis to support a model that benefits his appraisal business makes a very weak argument. Everyone faces moral and ethical decisions, why do appraisers need special consideration to keep them honest? It would have been much more enlightening to read why appraisers aren’t strong enough to resist unethical and illegal acts. Then these reasons could be addressed through background checks, ethics training, etc. This would be much more efficient, and ultimately, benefit the industry and more importantly, the consumer. On the surface, the current appraisal process sounds logical, but in practice it’s a mess and is hurting the consumer in countless ways, which I’m sure you are already aware. Should we also create intermediaries between loan officers and consumers to avoid undue influence? How about between lobbyists and legislators? Did you know we can eliminate car accidents by banning automobiles? Yes, stricter rules do come at a price, whether you’re an advocate or not depends on who is paying, and who is collecting. —Brian D. Tata, President, Advanced Mortgage Corporation, Warwick, R.I. O

Effective three years following the enactment of this provision: O Approved lenders and applicants to FHA single-family programs must have a net worth of $1 million plus one percent of total loan volume in excess of $25 million. O Approved lenders and applicants to FHA multifamily programs must have a minimum net worth of $1 million. O Multifamily lenders that also engage in mortgage servicing must have an additional one percent of total volume in excess of $25 million. O Multifamily lenders that do not perform mortgage servicing must have an additional 0.5 percent of total loan volume in excess of $25 million. O Streamline lender approval: FHAapproved lenders currently assume liability for all the loans they originate and/or underwrite. While mortgage brokers will continue to be able to originate FHA-insured loans through their relationships with approved lenders, they will no longer receive independent FHA eligibility approval. These changes align FHA with Fannie Mae and Freddie Mac and have potential to increase the number of mortgage brokers eligible to originate FHA-insured loans while providing for more effective oversight of brokers by FHA-approved lenders. Mortgage brokers or other third-party originators, already

approved by FHA, will be authorized to continue to originate FHAinsured loans through the end of the calendar year without sponsorship of an FHA-approved lender. Commencing Jan. 1, 2011, however, the origination authority will end. For more information, visit


news flash

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MAY 2010 O



government agency.” Agan has been suspended and debarred by HUD on at least two occasions and has two felony convictions. In 1982, Agan pleaded guilty to two counts of knowingly submitting false statements for the purposes of influencing the actions of a federally insured bank. He was sentenced to two years in prison (suspended), two years of probation, and fined $10,000. These actions led to the permanent withdrawal of his former FHA-approved company, Adana Mortgage Bankers, and a five-year debarment of Agan. In 1988, Agan was convicted of multiple counts of bribery by a Georgia Court, causing HUD to debar Agan indefinitely. RSA has 30 days to challenge the withdrawal action before an administrative law judge. The permanent withdrawal of 1st Alliance’s FHA approval is based on violations set forth in a Notice of Violation dated Oct. 21, 2009. The MRB alleges that 1st Alliance used independent contractors to originate 708 loans from branch offices that were not true branches of the company and then falsely certified these contractors were full-time employees of the company. The MRB also contends 1st Alliance failed to adopt and maintain a required quality control plan; failed to report employee compensation on IRS Form W-2; charged consumers unallowable, excessive or duplicative loan processing and origination fees; and failed to properly ensure that fees “paid outside of closing” were listed on borrowers HUD-1 Settlement Statements. For more information, visit


HOPE NOW reports servicers finished 148,000 loan mods in February HOPE NOW, the private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors has announced that its February 2010 data estimates 95,586 homeowners received proprietary loan modifications for the month. Combined with the United States Treasury’s recently released Home Affordable Modification Program (HAMP) data that showed 52,905 HAMP modifications for February, a total of 148,000 loan modifications were provided to homeowners in February. Approximately 78 percent of the proprietary loan modifications completed in February included reduction of principal and interest. The data also showed that foreclosure starts and sales dropped 17 percent for the month, along with a four percent decrease in the number of 60plus day delinquencies. The total number of loan workout plans provided to homeowners (including repayment plans) in February was 279,831.

“Our data shows that mortgage servicers are continuing a strong effort on proprietary and HAMP modifications in the first two months of 2010,” said Faith Schwartz, executive director of HOPE NOW. “Additionally, we are encouraged by the decreases in serious delinquencies and foreclosures. With almost four million loans currently in default, we realize that our work is not yet done. Since 2007, the industry has completed more than 6.7 million workout solutions, including almost 2.7 million loan modifications. Mortgage servicers and housing counselors have worked extremely hard through aggressive borrower outreach and HOPE NOW remains determined to keep as many families as possible in their homes.” HOPE NOW continues its efforts to reach troubled homeowners via face-toface workshops held across the country and the Homeowner’s HOPE Hotline at (888) 995-HOPE. Additionally, HOPE NOW recently introduced its Web portal, Hope LoanPort, which allows non-profit housing counselors working with homeowners to securely upload completed HAMP modification applications directly to participating servicers. For more information, visit

MBA report: Nearly 1.2 million households lost during the recession Approximately 1.2 million households were lost from 20052008, despite the population increase of 3.4 million in the study area, as Americans experienced one of the deepest recessions in decades, according to a study released by the Mortgage Bankers Association (MBA). This decline in households is likely what contributed significantly to the excess supply of apartments and single family homes on the market. The study, “What Happens to Household Formation in a Recession,” which was conducted by Professor Gary Painter of University of Southern California (USC) and sponsored by the Research Institute for Housing America (RIHA), analyzes the impact of economic and housing conditions on household formation and how the recent recession has affected Americans’ propensity to form new households, mobility trends, and changes in the rate of overcrowding. “With such a significant drop in households nationwide, it is clear the most recent recession impacted individuals’ decisions to move out on their own and caused many Americans to join already formed households,” said Painter, associate professor in the School of Policy, Planning and Development at USC. “Due to data limitations, my analysis had to focus on household formation as of 2008. Clearly, given the depth of the downturn continued on page 10

Kelley Berkheiser, Branch Development Manager Guaranteed Home Mortgage Company list of the fastest growing companies in the United States, provides residential mortgage financing to a wide variety of consumers and real estate professionals.

Here’s what our customers are saying: “PCS appraisal management services allowed me to create a virtual firewall between the loan officers and the appraisers, yet still maintain a high level of quality, fast, and accurate appraisals”

Learn more about our services by calling, Lorenzo Pugliano, President and CEO at 631-299-2084.

O MAY 2010

Founded in 1992, Guaranteed Home Mortgage Company, a licensed mortgage investment and banking firm, is comprised of more than 300 mortgage professionals. The firm, previously named in the Inc. 500

We understand that Guaranteed Home Mortgage offers lots of free marketing services to its branches. Do you feel that your experience learning the marketing tricks in the highly competitive consumer goods gives your branches an upper hand in their local market? Our strength is that our branches’ sales efforts remain autonomous. We

• We make FHA and HVCC compliance easy with our tools built around your business • We work with YOUR appraisers • Online automated appraisal ordering


“Our strength is that our branches’ sales efforts remain autonomous.”

Does Guaranteed Home Mortgage allow branches to act as a broker? Guaranteed does permit its branches to broker reverse mortgages and 203k. We keep all Federal Housing Administration (FHA) and conforming business inhouse. In days past, we were more receptive to brokering conforming and FHA loans, but because of the recent heinous reps and warranties, it made no sense to jeopardize the company. Also, we are very protective of our FHA performance. Brokering FHA is a recipe for disaster as an investor might do an inadvisable loan, but our company deals with its performance. O

Each month, National Mortgage Professional Magazine will focus on one of the industry’s top players in our “Mortgage Professional of the Month” feature. Our readers are encouraged to contact us by e-mail at for consideration in being featured in a future “Mortgage Professional of the Month” column. This month, we had a chance to chat with one of our advertisers, Kelley Berkheiser, Branch Development Manager of White Plains, N.Y.-based Guaranteed Home Mortgage Company. Kelley oversees the hiring, licensing, transitioning and marketing of Guaranteed Home Mortgage’s offices in 27 states nationwide. With more than seven years of experience in marketing and promotional activities, including a stint with Kraft Foods where she won a sales leadership award, Kelley also assists Guaranteed with branch training, mortgage company research and lead distribution.

How does Guaranteed Home Mortgage Company manage the appraisal ordering process? Guaranteed is full compliant with the Home Valuation Code of Conduct (HVCC). We apply the rules to both agency and government loans. Our firm has a list of approved appraisal management companies (AMCs) and we restrict providers to this bi-monthly updated list. The management company makes payment arrangements with the borrowers, and loan officers are prohibited from dealing with the appraiser directly.

recognized long-ago that different As the company’s top branch methods work in different demo- liaison, what are the biggest graphics and geographies. Guaranteed problems branches face when trying to get business from local real estate “… we are very protective of our agents? FHA performance. Brokering FHA Many of the larger money center banks have set-up shop within real estate brois a recipe for disaster as an kerage operations. These types of inteinvestor might do an inadvisable loan, but our company deals with grated relationships create an initial barrier of resistance for outside mortits performance.” gage firms. However, the upside is that our firm has the ability to offer many Home Mortgage regularly provides more options and much quicker turnstrategic and monetary support around. When word gets around a broaround a broad spectrum of available kerage shop that deals are getting done marketing conduits. Because we won’t with Guaranteed, we usually have no overlap our locations, our branches do further obstacles. not have to compete territorially, and we are able to implement successful marketing programs across the company. Simply put, we strive to produce more loans from existing locations, not more locations. It is better for our employees and for the company.


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in 2009, and the ongoing weakness in the job market through the beginning of this year, this study gives no reason to expect that household formation has picked up at all.” The study includes analysis of data from the past 40 years, a period covering six recessions, to examine the historical impact of recessions and associated elevated unemployment rates on the formation of new households. Key findings from the study include:

By Charlie W. Elliott Jr., MAI, SRA

MAY 2010 O



Is There a Better Way to Select Appraisers?


Yes, we as taxpayers did lose hundreds ing properties too low, using unqualiof billions of dollars recently due to the fied appraisers, sending appraisers too mortgage crisis. This is the second time far to perform appraisals and not paythat this has happened during my ing appraisers all of the fees collected career as a mortgage professional. by the bank when the loan application The first time it occurred was in the was taken. 1980s, when it was called the Savings & If this sounds like sour grapes, it Loan (S&L) Crisis. Back then, the govern- probably is, at least some of it. Very few ment stepped in and bailed out the S&Ls of us in the mortgage loan industry are along with some banks. making the money we Many people blamed the were two or three years appraisers for the debacle, ago. People are trying to because they were not state position themselves to licensed. The S&L bailout make up for the shortfall. resulted in a national camRealtors need to close paign to require state deals, mortgage brokers licensing of all real estate need to make loans and appraisers. Before that appraisers need to perform time, appraisals had been appraisals. The industry is performed by designated in an economic meltdown, appraisers, who had property values have plumdemonstrated their profimeted, loan parameters ciency through belonging are tighter, many people “Those complaining to appraisal trade groups, do not have jobs, and say that AMCs are such as the Appraisal those with jobs, in some appraising properties Institute and the American cases, are afraid that they Society of Appraisers. Now, too low, using unquali- will lose them. fied appraisers, sendit seems that state licensing This all boils down to ing appraisers too far very select few qualified of appraisers is not enough. to perform appraisals borrowers with tons of Many are blaming appraisers yet again for the huge people applying who do and not paying losses experienced by the not make the cut. What it appraisers all of the banks. This time around, comes down to is that fees collected by the there are practically no many are blaming the bank when the loan S&Ls left. Will we ever appraiser-selection sysapplication was taken.” tem for the lack of busilearn? In an attempt to stem ness. Does this equate to further losses, Fannie Mae, Freddie Mac rigging the system to make loans close? and the Federal Housing Administration Is this not just what we are trying to get (FHA) have taken steps to promote away from? Appraisers must be indeappraiser independence by not allowing pendent in order for them to provide mortgage brokers to select appraisers or honest and accurate appraisals. to place appraisal orders. This has Given the above statements, should caused an outcry from many quarters in we go back to the policies of the past the industry, including mortgage bro- that got us into this mess, just to prokers, Realtors and appraisers. They are vide jobs to those who now do not blaming appraisal management compa- have as much income because of the nies (AMCs) because they are now han- mortgage crisis? I should think not, dling appraisal orders, which once were and as a taxpayer, I hope not. It is a ordered by mortgage brokers. Those continued on page 13 complaining say that AMCs are apprais-

O In a recession, the likelihood that a young adult will form an independent household falls by up to four percentage points depending on the age of the person and severity of the changes in unemployment rates. In this particularly severe recession, this prediction has been borne out with data through 2008 revealing a reduction of nearly 1.2 million households nationwide despite the continued increase in population and likely even more households lost in 2009. O Though the national homeownership rate has fallen from a peak above 69 percent to just over 67 percent, this decline may be understating the magnitude of the change when we take into account the simultaneous drop in renter household formation. In fact, the rental market saw a steeper decline in new households formed than the homeownership market. As a result of this drop, the denominator in the homeownership rate calculation has been reduced, mitigating the decline in homeownership. O This recession has also caused a dramatic increase, almost five-fold, in the rates of overcrowding (defined as having more than one person per room in the household), indicating that many families are doubling up in response to the downturn. O Overall, there was a greater impact on the creation of new households among native born Americans over new immigrant households. The data show native born Americans experienced a larger decline in household formation and a larger increase in overcrowding rates than immigrants. O Children whose parents have higher incomes are more likely to remain at home, with this effect largest for youths moving into the rental market. However, children whose parents have higher financial wealth are more likely to form their own new rental households. For more information, visit or

TAVMA report finds the average AMC has 15-plus years of experience On average, an appraiser working with major appraisal man-

agement companies (AMC) has more than 15 years of experience appraising residential properties, according to a new survey conducted by the Title/Appraisal Vendor Management Association (TAVMA). In addition, the survey showed that the vast majority of appraisers used by TAVMA members are “certified” appraisers, a designation that requires more experience and an additional level of testing above the state-licensed level. According to the survey of TAVMA members, 87 percent of appraisers used by TAVMA members are certified appraisers. According to the Federal Financial Institutions Examination Council (FFIEC) registry, 83 percent of appraisers have a certified registration. The certified designation is a higher level of appraisal licensing than state licensing. Although each state has its own rules, many require additional experience and testing-levels to reach the certified level. States also demand that appraisers successfully complete continuing education classes each year to maintain their licenses. “Our members, the nation’s largest appraisal management companies, monitor their roster of appraisers to ensure that they are properly certified and experienced for a specific assignment,” explained Jeff Schurman, executive director of TAVMA. “We surveyed our members to answer the allegations that brokers and realtors have been making in the media, regarding the experience levels of AMC appraisers. Our member survey clearly shows that not only are AMC appraisers experienced, the vast majority hold the higher, certified-level, appraisal credential.” AMCs currently provide approximately two-thirds of all residential appraisals used in the mortgage industry, and TAVMA’s 45 AMC members together account for more than 80 percent of this volume. Although some AMCs employ inhouse appraisers, most assign orders to local independent appraisers. “TAVMA members continually review their roster of appraisers to make sure that all certifications and licenses are up to date,” said Schurman. “This is just one element that AMCs look at before assigning an appraiser. They also look for an appraiser who has experience within an appropriate geographic area, usually not more than a 13-mile radius, and with the property type in question.” For more information, visit

Wells Fargo signs HAMP second lien modification program agreement with Treasury Department Wells Fargo has announced that it has signed the second lien modification component of the Obama Administration’s Home Affordable Modification Program (HAMP).

The program will be offered to qualified Wells Fargo and Wachovia second lien mortgage customers who have completed their HAMP modifications on their first mortgage. “The Second-Lien Modification Program offers struggling homeowners with yet another valuable option for reducing payments so they can remain in their homes,” said Kevin Moss, executive vice president of Wells Fargo’s Home Equity Group. “This program is an important component of joint industry and government efforts to bring further stability to the housing market.” Wells Fargo has already implemented a variety of its own programs to assist its home equity customers. Since last year, the company’s Home Equity Group has participated in Wells Fargosponsored home preservation events in Atlanta, Baltimore, Chicago, Phoenix and St. Paul to provide thousands of customers the opportunity to talk faceto-face about their payment challenges. Three more events will be held in the first half of this year in Los Angeles, Oakland and Miami. Over the past two years, Wells Fargo has proactively reached out to its customers through telephone calls, mail and other means to discuss potential assistance options. In addition, the company added more than 2,000 team members to its staff to focus on helping its customers who may be struggling to make their home equity payments. As a result of all of these efforts, as of

the end of February 2010, Wells Fargo provided assistance to more than 180,000 second lien mortgage customers through various programs, including loan modifications and subordinations, and more than a half million first mortgage customers with first lien modifications. This included 139,065 active trial and completed first-lien HAMP modifications. Given the HAMP focus on affordability and documentation, Wells Fargo expects loans modified under the new second-lien program to have a similar quality and performance to those made under its own internal programs. “With so many families challenged by current economic conditions, Wells Fargo remains committed to providing help to customers who qualify for HAMP and those who don’t,” Moss said. “This new program will help expedite our efforts and likely increase the number of borrowers we can assist through loan modifications, which will benefit our customers, our communities and our shareholders.” Borrowers with second lien mortgages who qualify for a first-lien HAMP should contact their first-mortgage providers to determine if they are eligible for the new federal program. Servicers participating in the program are required to contact all first-lien HAMP customers with second-lien mortgages to make them aware of the new payment relief option. For more information, visit

O The share of refinancings to total MBA study on mortgage originations for this sample was relbankers finds production atively constant at 45 percent in the profits held steady in Q4 ‘09 Independent mortgage bankers and their subsidiaries made an average profit of $890 on each loan they originated in the fourth quarter of 2009, down from $902 per loan in the third quarter of 2009, but up from $296 in the fourth quarter of 2008, according to the Mortgage Bankers Association (MBA). “Production profits remained favorable in the fourth quarter because of strong servicing rights valuations and secondary marketing gains,” said Marina Walsh, MBA’s associate vice president of industry analysis. “However, provision expense for repurchase demands may weaken profitability in upcoming quarters. We saw the expense provision double to over six basis points from the fourth quarter of 2008.” Among the principal findings of MBA’s Quarterly Mortgage Bankers Performance Report are: O Seventy-six percent of the firms in the study posted pre-tax net financial profits in the fourth quarter 2009, compared to 82 percent in the third quarter 2009. O The average production volume for each firm was $216.5 million in the fourth quarter 2009, compared to $189.6 million in the third quarter 2009.





fourth quarter 2009, compared to 44 percent in the third quarter 2009. The average pull-through (the number of closings divided by the number of loan applications) was relatively constant at 73 percent in the fourth quarter 2009 from 72 percent in the third quarter 2009. The “net cost to originate” rose to $2,345 per loan in the fourth quarter 2009, from $1,950 per loan in the third quarter 2009. The “net cost to originate” includes all production operating expenses and commissions minus all fee income, but excludes secondary marketing gains, capitalized servicing, servicing released premiums and warehouse interest spread. Production operating expenses— commissions, compensation, occupancy and equipment, and other production expenses and corporate allocations—rose to $4,402 per loan in the fourth quarter 2009 compared to $4,376 per loan in the third quarter 2009. Net warehousing income, which represents the net interest spread between the mortgage rate on a loan and the interest paid on a warehouse line of credit, was almost constant at 6.26 basis points in the continued on page 15

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O MAY 2010

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MAY 2010 O



By Eric C. Peck


Most of the stories are similar … your will be a more effective force than by and deal with a live person and not just Home Mortgage Servicing Inc., Aurora Loan average American family with two work- working solo. leave an endless number of voicemails.” Servicing, Bank of America/Countrywide, ing parents and two to three children, HOPE NOW, along with co-sponsors Since 2008, HOPE NOW has hosted Carrington, Chase/Washington Mutual, Citi, living in a modest home are beginning the Making Home Affordable Program 60-plus homeownership outreach GMAC/Homecomings, Home Loan Servicing to feel the crush of economic hardship and NeighborWorks America, have events, assisting approximately 59,000 (HLS), HSBC, Litton Loan Servicing, Ocwen, One firsthand through the families in the process. West Bank/IndyMac, PNC Mortgage/National threat of losing their When an event is on the City, Saxon, Select Portfolio Servicing and Wells home. The ripple effect horizon, HOPE NOW noti- Fargo/Wachovia who sent along approved of high unemployment fies area lenders and counselors to reach out to their customers. rates in struggling to surbanks. In turn, the banks “There are a lot of borrowers out there vive as a homeowner in and lenders send out who are confused about the whole process the 21st century has mailings to their cus- and need our help,” said Jamie Holland, wreaked havoc on the tomers to notify them of compliance manager with Ocwen. nation, thrusting foreclothe opportunity to meet Not all homeowners are guaranteed sure and bankruptcy one-on-one with a trained a home-saving conclusion, and that too rates into record high housing counselor at the was the case at the New York event. For territories. Help for Homeowners every success story, whether it be qualForeclosure intervenCommunity Event. If a ifying for a loan modification or obtaintion by financial institucustomer’s lending insti- ing a temporary forbearance, there tions and governmental tution happens to not be were stories with unhappy endings as it mediation through proon hand for the event, was either too late to save a consumer’s grams such as the Home Lenders set up shop at Nassau Coliseum to meet one-on-one with consumers are paired up home and the realization of a short Affordable Modification homeowners with non-profit housing sale, deed-in-lieu or foreclosure started Program (HAMP), has counselors who assist the to become a reality. been a bumpy road for many. Some organized a number of “Help for homeowner through their situation. A man by the name of Bob was one attribute it to the big banks, often stub- Homeowners Community Events” on Homeowners are given a checklist of such success story. He came to the event born in nature in providing a home- their road show that bring the banks paperwork to bring in order to see if seeking a reduction in his monthly owner with foreclosure relief as they and servicers together, face-to-face, they qualify for HAMP or other alterna- mortgage payments which stood in the deal with the training and implementa- with homeowners looking for solutions tives from their lender. $2,400 range. The loss of his wife’s job tion of their loan modification pro- to their problems. The common com“The personal contact a congrams, as other chalk the issues up to plaint from a customer seeking a modi- sumer has with a housing counbureaucratic red tape that is binding fication is the chain of voicemails and selor is a plus,” said Alvina the government’s efforts to step in and departments they have to deal with and McHale, director of communicahelp the struggling U.S. homeowner. No the mountain of paperwork required in tions and marketing for the U.S. matter where the finger is pointed, the order to get the modification process Department of the Treasury. problem remains … scores of started. “These events are a win-win situAmericans each day are slowly sinking “Locations for these outreach events ation for all involved as the borunder the weight of wage loss and are determined by the amount of rower can discuss their situation mounting expenses with the inevitabil- HAMP activity in a particular region, directly with their financial instiity of eventually losing their home. and then, an easily accessible and cen- tution.” That is where the HOPE NOW Alliance tralized location is selected to house At day one of a Help for is trying to make a difference. HOPE the event,” said Brad Dwin, director of Homeowners Community Event, held NOW is an alliance between counselors, communications for the HOPE NOW in late April on Long Island, N.Y. in Alvina McHale, director of communications and marketing for the U.S. Department of mortgage servicers, investors and other Alliance. Uniondale at the Nassau Veterans mortgage market participants with the “Face-to-face contact and personal Memorial Coliseum, 646 cases were the Treasury, with Jamie Holland, complicollective goal of maximizing outreach interaction is important in a situation as heard in a four-hour span by the ance manager with Ocwen, at the New York efforts to homeowners in distress to delicate as this,” said one homeowner at lenders on hand. The doors for the Help for Homeowners Community Event help them stay in their homes. HOPE a recent New York Help for event opened at 1:00 p.m., with NOW’s nearly 70 member companies Homeowners event. “We really got many lining up as early as 6:00 a.m. in order due to a layoff made the family’s finanrecognize that by working together to nowhere dealing with our bank by the to meet with their lender. On hand for this cials an issue and Bob was no longer stamp out the foreclosure crisis, they phone, at least we can come here today particular New York event were: American able to keep up with payments. He visit-

The check-in desk at the April Help for Homeowners Community Event at Nassau Veterans Memorial Coliseum in Uniondale, N.Y. ed the event and met with his lender and walked away with a trial modification and a reduction of $700 a month off each mortgage payment, thus setting his mind at ease and saving his home became a reality. “This is a dog and pony show,” said one attorney on hand for the event. “The banks are putting on a really good show here by showing up and giving the impression they are doing the right thing. I feel they can do so much more.” Brian and Laura, a middle-class Long Island couple, came to the event seeking to meet a counselor in person after dealing unsuccessfully over the phone for months trying to obtain a loan modification. Brian’s job cut back on his overtime hours, thus impacting their ability to meet their monthly mortgage commitment. The couple showed up two hours in advance of the doors

value nation

opening, taking the day off from work and hiring a babysitter. Their end result, the same as on the phone, dead ends and no resolution. “No one seems to know what is going on or have a clue about our situation,” said Brian. “I thought it would be good to come on down, meet with a human and not play phone tag. I wanted immediate results, but got what seems to have been a wasted day. In the end, we were deemed ineligible for a modification and were left with a great deal of questions about the future of our home.” No matter the end result, HOPE NOW, its alliance partners—Making Home Affordable Program and NeighborWorks America—and their lender supporters are putting forth a strong concerted effort to save America’s homeowners. Their overall goal is to keep the American dream of homeownership alive and well, even in this current economic downturn.

continued from page 10

O MAY 2010

Charlie W. Elliott Jr., MAI, SRA, is president of Elliott & Company Appraisers, a national real estate appraisal company. He can be reached at (800) 854-5889, e-mail or visit his company’s Web site,


all-inclusive prices, which would be the dollar amount charged by the company providing the appraisal service, including the management of the process. There would be no other appraisal fees charged to the customer. Banks, opting to engage in the process of offering their clients appraisals, would be required to set up management companies and register in all states, as well as at the federal level, if and when required of other AMCs. Said another way … bank-owned AMCs would be required to follow the same rules as all other management companies. Would this be perfect? Probably not, but I believe that it would foster competition, while giving the borrower at least a bit of say-so in the appraisal process. It would go a long way toward providing transparency and would help to remove questions as to the ethics of the bank in the transaction. Banks would undoubtedly benefit from the increased customer satisfaction and could focus more on what they do best, make loans. O

much bigger and more important issue than just providing industry members with jobs. There is plenty of room to discuss the shortcomings of appraisals and appraisers. That being said, I do not believe that there are many appraisers out there intent upon killing an otherwise healthy loan package with a bad appraisal. The problems we currently face are too few qualified borrowers and declining home values. This cannot be corrected with appraisal legislation, rule changing or loosening up of the standards. Such action would only make things worse in the long run. This begs the question: Is there a better way to select appraisers? I suggest that there very well may be. Whatever it is, it should not include the lender making the loan, selecting the appraiser, ordering the appraisal and paying the appraiser. When the lender is really not lending his or her own money, there is just too much temptation for the undue influence of appraisers. It is my suggestion that a bank, funding a loan, give the customer at least two options for the selection of a management company to acquire an appraisal for their property. At least one of these must come from an independent management company. Each would include


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MAY 2010 O



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news flash

continued from page 11

fourth quarter 2009, compared to 6.67 basis points in the third quarter 2009. MBA’s Quarterly Mortgage Bankers Performance Report offers a variety of performance measures on the mortgage banking industry and is intended as a financial and operational benchmark for independent mortgage companies, bank subsidiaries and other non-depository institutions. Seventytwo percent of the 285 companies that reported production data for this report were independent companies. For more information, visit

FTC files comments with FFIEC on reverse mortgage guidance

HUD brings on Michaelson, Connor & Boul as mortgagee compliance manager

Lending in TX, NM, and OK



O MAY 2010

continued on page 20

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The U.S. Department of Housing & Urban Development (HUD) has announced the agency has contracted Michaelson, Connor & Boul Inc. (MCB) of Huntington Beach, Calif. to serve as its mortgagee compliance manager. MCB will be responsible for ensuring that Federal Housing Administration (FHA)-approved lenders and loan servicers convey foreclosed properties to the FHA in acceptable condition. MCB will establish a central office for lender compliance oversight in Oklahoma City, Okla., which is projected to create 75-100 new professional jobs. HUD’s National Servicing Center (NSC) in Oklahoma City will be responsible for the direct oversight of the new compliance manager contract. “This new contract is part of FHA’s continuing effort to reduce risk, increase return, and improve efficiency in the resale of its inventory of foreclosed property,� said HUD Deputy Assistant Secretary Vicki Bott. “It is critically important that FHA recaptures as much of our claims through the eventual sale of these properties and this compliance management firm will help us do that.� The contract is awarded under FHA’s Management and Marketing (M&M) III disposition structure. Under M&M III, the process of conveying foreclosed properties to FHA has been centralized and streamlined in order to simplify the process for FHA’s lenders and servicers, as well as to improve communi-

1. Go to 2. Pick a low ďŹ xed rate for your borrower 3. Enjoy an easy closing, and then relax! O

The Federal Trade Commission (FTC) has filed comments with the Federal Financial Institutions Examination Council (FFIEC) supporting a measure designed to protect consumers from deceptive claims and to help them make better-informed decisions about whether to obtain a reverse mortgage. A reverse mortgage is a home-secured loan that becomes due when the homeowner moves, sells the home, dies or fails to meet loan terms such as paying property tax or homeowners insurance. Although reverse mortgages have assisted many elderly consumers in drawing on the equity in their homes, some consumers may not fully understand these complex products or may be deceived by advertising claims made about them. In December 2009, the FFIEC issued proposed guidance for its members on how to deal with reverse mortgages. FFIEC members include the federal banking agencies—Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation (FDIC), Office of Thrift Supervision (OTS), National Credit Union Administration (NCUA) and the State Liaison Committee, which includes representatives from the Conference of State Bank Supervisors (CSBS), American Council of State Savings Supervisors (ACSSS), and National Association of State Credit Union Supervisors (NASCUS). The comments, prepared by the staff of the FTC’s Bureaus of Consumer Protection and Economics and its Office of Policy Planning, describe FTC work in this area, including forming a federal-state working group to strengthen law enforcement efforts against illegal practices. The comments also note FTC consumer and business education efforts, such as including a revised consumer brochure, “Reverse

Mortgages: Get the Facts Before Cashing in on Your Home’s Equity,� a new business alert to help housing counselors spot and report potentially deceptive claims, and presentations to reverse mortgage industry groups. FTC staff specifically supports the FFIEC’s efforts to advise lenders of the importance of not making deceptive claims for reverse mortgages and to provide them with concrete guidance as to the circumstances under which claims may be deceptive in violation of Section 5 of the FTC Act. The comments also encourage reverse mortgage lenders and brokers under the FTC’s jurisdiction to review and consider the proposed guidance’s advice and examples relating to deceptive claims. The comments further note the value of testing disclosures and other measures in certain circumstances to confirm that they are clear and useful and do not create unintended consequences. For more information, visit


New FHA Rule: All Brokers Now Have Access to FHA Loans


MAY 2010 O











ASK ABOUT REGIONAL OPPORTUNITIES Contact Us For An Immediate Response at or call 1-800-562-6715, ext. 150

On Sept. 18, 2009, David H. Stevens, Commissioner of the Federal Housing Administration (FHA), made an announcement in a press release. This announcement was that a proposed rule (published in the Federal Register) would not require mortgage brokers to get FHA approval in order to have access to FHA programs. This rule, in fact, became final on April 20, 2010, when the rule was published in the Federal Register. This provides a wonderful opportunity for brokers who were previously unable to meet net worth requirements allowing FHA approval. However, the other side of this rule is that brokers will need to be sponsored by an FHAapproved lender and they must meet the FHA lender’s requirements for being sponsored. Now the big question is: How difficult will the FHA lenders make it for the brokers? Likely, by the printing of this article, many lenders will have already established their broker guidelines for doing FHA loans. In reality, why is doing a loan that will be sold to Ginnie Mae any different than a Fannie Mae or Freddie Mac loan? It shouldn’t take a lot of effort on the part of FHA lenders to create internal policies that establish some guidelines allowing brokers to do FHA loans with them. FHA lenders already have very strict reporting and administrative requirements in place for the FHA-approved brokers they currently sponsor. Thus, FHA feels the transition will not present a big challenge to existing FHA lenders. What about currently approved FHA brokers? The rule states that currently approved FHA lenders will do business as usual through the rest of 2010, and starting on Jan. 1, 2011, mortgage brokers will no longer be required to submit audited financials to maintain their access to FHA loans. Many brokers are ecstatic about this change and are excited about the fact they won’t have to spend thousands of dollars on the audits. I spoke with HUD directly on the question of whether or not currently approved FHA brokers will have to submit audited financials in 2010, and was told that if you are a broker that is in

good standing with FHA, you will not be required to submit audited financial, but will have to re-certify through FHA Connection and pay the fee. This leads to another question: What if an FHA-approved broker wants to get approved now as an FHA lender? The answer is that they will have to meet a certain net worth requirement, or NWR. For 2010 and 2011, smaller companies (as defined by the Small Business Administration [SBA]) will need

“Be prepared to give these talented originators a good reason to stay or be prepared for attrition, because when the market gets hot, talented people are always looking for ways to improve their lot.” $500,000 in net worth, and larger companies will need a minimum of $1 million in net worth. In all cases, 20 percent of the net worth must be in the form of liquid assets. In 2013 and beyond, all companies applying for FHA approval will be required to have a minimum net worth of $1 million, 20 percent of which must be liquid assets. Given this new NWR, many companies will be faced with a tough decision. The companies that are currently FHAapproved will have to decide if they want to meet and maintain the NWR, and the companies that want to get FHA approval will have to decide if they also want to come up with the cash meet the new NWR. Because FHA is such an important loan product to have today and many loan officers need it to survive, we have seen a national trend of consolidation of smaller broker offices into larger companies just to enable access to FHA. It could be that this rule will reverse that trend. If so, we may see an increase in smaller broker offices, especially as housing sales improve. If you are a broker who has hired a lot of talented originators and/or brokers over the past several years, you need to look seriously at why the talcontinued on page 22

Rub-a-Dub-Dub: The Fed Pulls the Plug Okay, that is a bad rhyme. But the truth is, we might as well be rubbing the bottle with the genie to see what is coming next. We have talked about this for months. The Federal Reserve Board has finally reached the date in which they are no longer purchasing MortgageBacked Securities (MBS). The devastation of the secondary market for home loans was one of the major effects of the financial meltdown which occurred over a year ago. The Fed took many definitive actions to keep rates down while the government took many other actions to right the financial ship. Here are some of these actions:

“The Congressional Budget Office recently announced that the TARP program, which was supposed to cost the government $700 billion, is now estimated to cost only 16 percent of that total, or $109 billion. How times have changed. We now think of $100 billion as a bargain!”

What will happen? No one actually knows. Rub-a-dub-dub. This is not the only program which is ending. The tax credit is schedule to end at the end of April. Many had expected an automatic extension. As a matter of fact, homebuyers seem to be acting like this extension was a given. From CNN/Money:

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O MAY 2010

There is little sentiment for continuing this program, especially because many consider the latest iteration’s results to be disappointing. Even the Senate’s biggest proponent of the homebuyer tax credit, Johnny Isakson (R-GA) is ready to let it end. “He has no plans to introduce legislation to extend the credit,” said Isakson’s spokeswoman. “Part of the benefit of the tax credit was the urgency its sun-setting generated.” Thus at the time of printing the tax credit is up in the air.

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Now, the Fed is ready to see if the private markets will pick up the slack and allow home loans to be originated and sold on the open markets at a price that will not halt the economic recovery, particularly in the real estate sector. Is this a non-event at this point? Note that rates had already increased moderately in the weeks before the Fed’s deadline of March 31. There have been many explanations for this increase, including tepid response to government bond auctions. However, it is entirely possible that the tepid response was due to anticipation of this important date.

No one expects the Fed to unload its holdings anytime soon, which would be reckless given the housing market’s fragility and the country’s high unemployment. But since the Fed now owns about 25 percent of the outstanding stock of bonds, any talk about actually selling should be a cause for greater concern than the Fed simply ending further purchases.

Now we come back to the question, how do all of these factors affect originations? For one, the rate volatility we warned about has become a reality. That means that originators must keep on top of the markets at all times. Even when you are in loan application as you are filling out the rate on the Good Faith Estimate (GFE). Second, rising rates are not ever pleasant. However, if these rising rates are due to a recovery in which people start finding jobs, it will be a positive tradeoff. That is why the positive employment report for March was so important. We have another eight million jobs to go before we recover the jobs lost during the recession. That is a long road to travel. A long-term recovery only happens when people are employed and can afford to keep their homes in the long run. We will accept higher rates that are still historically low if people are going back to work. O

O The Fed lowering benchmark shortterm rates to close to zero. O The Fed purchasing hundreds of billions of dollars in Treasury securities. O The Fed purchasing hundreds of billions of dollar in MBS. O The Fed providing significant liquidity to the system. O Congress passing two versions of the Homebuyer Tax Credit. O Congress increasing high-end loan limits on conforming and government loans. O Congress bailing out the banks with an influx of Troubled Asset Relief Program (TARP) funding. O Not to mention several tax rebates, foreclosure prevention programs, unemployment aid, bailing out the car companies and more.

Now, speculation moves to another level as it appears we will ponder as to whether rates will continue to rise and whether the Fed will start selling some of the hundreds of billions of dollars in bonds they currently own. Here is a quote from a recent article from The New York Times:

Government support of housing recovery is not ending. The Obama Administration recently announced a new initiative to refinance and modify underwater mortgages with incentives to investors to pare down principal. The program includes mortgage payment aid for those who are unemployed. Also, grants were announced to five more states hit hardest by the crisis. Here is an interesting note. The Congressional Budget Office recently announced that the TARP program, which was supposed to cost the government $700 billion, is now estimated to cost only 16 percent of that total, or $109 billion. How times have changed. We now think of $100 billion as a bargain! What is the point of all this? With the jobs picture turning positive, the markets are turning back to normal. This means that the government has to facilitate this process. Do not think by any means that we are out of the woods just yet. There are a ton of foreclosures to come, and if a recovery means higher rates and oil prices, it will be an even slower recovery than expected. The Fed has indicated that they are prepared to keep rates low because of these facts, and if the recovery continues, expect more speculation regarding when and how the Fed will increase rates. In the meantime, the Fed has also told Congress that they are ready to step in and reintroduce measures when and if necessary.

©2010 Inlanta Mortgage


collar exemptions. The following table provides a brief synopsis, with salary requirements, of those revisions:4

Executive employees Pre-August ‘04 rule Minimum compensation

$250 qualified weekly salary $455 qualified weekly salary

Duties required

• Primary duty consists of management of enterprise or recognized department or subdivision thereof; and • Customarily and regularly directs work of two or more other employees.

• Same

• Same

• Authority to hire/fire other employees (or suggestions about hiring/firing/promotion/other status changes given particular weight).

Mortgage Loan Officers Lose Administrative Exemption In an Administrator’s Interpretation (Interpretation),1 issued March 24, 2010, the U. S. Department of Labor (DOL) determined that employees who perform the typical duties of a mortgage loan officer have a primary duty of making sales for their employers and, therefore, do not qualify as bona fide administrative employees exempt under the Fair Labor Standards Act (Act).2 Accordingly, mortgage loan officers are subject to minimum wage and overtime requirements.

Beginning August ‘04

Administrative employees Pre-August ‘04 rule

Beginning August ‘04

Minimum compensation

$250 qualified weekly salary $455 qualified weekly salary

Duties required

• Primary duty consists of performing office or nonmanual work directly related to management policies or general business operations of the employer or the employer’s customers; and • Includes work requiring exercising discretion and independent judgment.

Administrator’s Interpretation The Interpretation applies to employees who: O Spend the majority of their time working inside their employer’s place of business, including employees who work in offices located in their homes, rather than mortgage loan officers who are customarily and regularly engaged away from their employer’s place of business; and O Do not spend the majority of their time engaging in “cold-calling,” contacting potential customers who have not in some manner expressed an interest in obtaining information about a mortgage loan.

• Same

• Primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

MAY 2010 O



Outside sales employees


By issuing this Interpretation, the DOL has now rejected its own Sept. 8, 2006 Wage and Hour Opinion Letter FLSA 2006-31, asserting that its previous position provided an “inappropriately narrow definition of sales” as including only customer-specific persuasive sales activity (i.e., the time that a mortgage loan officer spends directly engaged in selling mortgage loan products to customers).3

Exempt versus non-exempt

Pre-August ‘04 rule None Minimum compensation Duties required

The Act identifies two types of employees: non-exempt employees and exempt employees: O Non-exempt employees are employees who, based on the duties performed and the manner of compensation, are required to account for time worked and sick leave, vacation, and other leave on an hourly and fractional hourly basis. The Act requires that these employees be paid overtime at the premium (time-and-one-half) for actual time worked in excess of 40 hours per week. O Exempt employees are employees who, based on the duties performed and the manner of compensation, are exempt from the Act’s minimum wage and overtime provisions. Exempt employees are paid an established monthly or annual salary and are expected to fulfill the duties of their positions regardless of the hours worked. They do not receive premium overtime, straight overtime or compensatory time for working more than 40 hours in a work week.

• Employed for the purpose of, and customarily and regularly engaged away from the employer’s place of business in, making sales; or in obtaining orders or contracts for services or for the use of facilities; and • Devotes no more than 20 percent of hours worked by nonexempt employees to activities not incidental to and in conjunction with employee’s own outside sales or solicitations.

Table of certain white collar exemptions The August 2004 revisions to the Act elucidated the requirements for certain white

Same • Primary duty of making sales, or obtaining orders or contracts for services or use of facilities; and

• Customarily and regularly engaged away from the employer’s place of business.

Highly compensated employees Pre-August ‘04 rule

To be considered “exempt” from the Act’s requirements, employees must meet two tests: the Salary Basis Test and the Duties Test. The Act has a number of white collar exemptions from overtime and minimum wage. Changes made to the Act in August 2004 modified these tests, compelling an examination of how to classify and pay mortgage loan officers. Eligibility for these exemptions is based on the primary duties of their job functions and their weekly salary.

Beginning August ‘04

No such exemption Minimum compensation Duties required

• No such exemption

Beginning August ‘04 $100,000/year (including minimum weekly salary of $455) • Non-manual or office work • Customarily and regularly performs one or more exempt duties or responsibilities of an executive, administrative or professional employee.

Exemption test Under the Interpretation, to fall within the meaning of an “employee employed in a bona fide administrative capacity” (therefore, exempt) an employee’s job duties and compensation must meet all of the following tests: 1. The employee must be compensated on a salary or fee basis as defined in the regulations at a rate not less than $455 per week; 2. The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and 3. The employee’s primary duty must include the exercise of discretion and independent judgment with respect to matters of significance. The DOL, contending that the second test (listed above) does not apply to mortgage loan officers, argues that the typical, primary duty of the mortgage loan officer is sales, not office or non-manual work directly related to the management or general business operations of their employer or their employer’s customers.

Mortgage loan officer is a salesperson Although mortgage loan officers compile and analyze potential customers’ financial data, they do so because doing so is necessary to evaluate the customers’ qualifications for a loan (in order to consummate a sale); that is, the DOL’s position is that mortgage loan officers are not analyzing the customers’ information to provide advice to the customer, which the customer could take and use elsewhere, but performing “screening” for the benefit of the employer, rather than servicing for the benefit of the customer. In determining whether an employee’s primary duty is making sales, the DOL’s view is that work performed incidental to sales should also be considered sales work. An employee who performs the typical duties of a mortgage loan officer, as defined by the Department, does not qualify for exempt status as bona fide administrative employees. In short, the Interpretation’s position is that a mortgage loan officer’s primary duty is sales and not the management or general business operation of the employer.

not reduce an employee’s earning to below the salary basis requirement for hours worked. Additionally, commissions may not be used for weeks other than when earned as a means of making up amounts in a different week where commission earnings are insufficient to meet the statutory amount. The Act permits an agreement between an employer and employee which provides that the employee will receive the statutory amount for all hours worked along with any additional amount by which commissions may exceed the statutory amount required. It appears that a monthly commission period may be utilized; however, the computation and recording of hours must be on a work week basis.

Submit your questions … Do you have a regulatory compliance issue that you’d like to see addressed in the Regulatory Compliance Outlook Column? If so, e-mail your issue or concern to Jonathan Foxx at Jonathan Foxx, former chief compliance officer for two of the country’s top publiclytraded residential mortgage loan originators, is the president and managing director of Lenders Compliance Group, a mortgage risk management firm devoted to providing regulatory compliance advice and counsel to the mortgage industry. He may be contacted at (516) 442-3456 or by e-mail at

Footnotes 1—Administrator’s Interpretation 2010-1, Department of Labor. (This is the first Administrator’s Interpretation ever issued by the DOL.) 2—See: 29 U.S.C. § 213(a)(1). 3—The withdrawn opinion letter is Opinion Letter FLSA 2006-31. (Also withdrawn was a previously supporting interpretation Opinion Letter: FLSA 2001 WL 1558764.) 4—The analysis of this article pertains to federal law. State law and licensing requirements must also be considered in determining how to classify employees. In addition, the Federal Reserve Board is considering a proposal to eliminate compensation based on the “terms” of the loan.

Salary arrangements In structuring salary arrangements to meet the $455/week, the issue of commissions and draws must be considered.5 The general rule is that an exempt employee may be paid solely on a commission basis if the payments for each work week are sufficient to meet the salary basis requirement for that work week. A draw may

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5—A mortgage loan officer who cannot satisfy the administrative exemption may still satisfy the highly compensated employee exemption by “customarily and regularly” performing at least one of the exempt responsibilities associated with the three exemption criteria for that category.


news flash

continued from page 15

cation and the dissemination of program guidance and requirements. As the largest seller of real estate in the country, HUD has been outsourcing the disposition of its foreclosed FHA inventory under the M&M contracting process since 1999. After conducting extensive research into market-based best practices, HUD has developed its new M&M III disposition structure to streamline its operations, capitalize on the expertise of potential vendors and provide flexibility in a changing environment. Under M&M III, lenders and loan servicers seeking to convey foreclosed properties to FHA will find a more efficient and less complex process than under previous M&M contracts. Michaelson, Connor & Boul, Inc will serve as the sole entity responsible for mortgagee compliance. For more information, visit or

NCRC study finds troubling trends with loan mods

The National Community Reinvestment Coalition (NCRC) recently testified before the House Oversight and Government Reform Committee, which

has opened an investigation into Making Home Affordable, the federal foreclosure prevention program. As part of the Committee’s investigation, NCRC released a survey of homeowner experiences in the loan modification process, conducted by over 29 housing counseling organizations affiliated with the organization. “We’ve surveyed housing counselors from the front lines of the foreclosure crisis, and they tell us that the battle is being lost.� said John Taylor, president and chief executive officer of the NCRC. “While this administration has been more proactive than the last, Making Home Affordable is simply failing to make enough of a difference relative to the size of the problem. It’s not for lack of good ideas, including more aggressive principal reductions that this crisis has been allowed to continue mostly unabated. The end result, if we don’t get ahead of this problem now, is the ongoing loss of wealth from America’s communities.� NCRC’s HAMP Mortgage Modification Survey provides alarming insight into the experience of homeowners going through the federal Home Affordable Modification Program (HAMP). The survey was administered to distressed homeowners seeking assistance from NCRC’s Housing Counseling Network. The

survey documents performance and programmatic issues, issues of fairness and equity, and pragmatic recommendations to improve upon the HAMP program. Among survey respondents, some key trends include:

fourth quarter of 2009, though home foreclosures slowed and new home retention actions continued strong, according to a report released by the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS). The OCC and OTS Mortgage Metrics Report for the Fourth Quarter 2009 showed the overall percentage of current and performing mortgages fell to 86.4 percent at the end of 2009, driven by an increase in mortgages that were 90 or more days past due. Prime mortgages, which make up two-thirds of the mortgages in the portfolio, continued to have the greatest increases in delinquency. Overall, servicers implemented more than 594,000 new home retention actions during the quarter, including 259,410 new trial plans initiated under the “Home Affordable Modification Program� (HAMP) and 21,316 existing trial plans converted to permanent HAMP modifications. The actions also included 102,102 loan modifications, 94,667 trial plans, and 116,600 payment plans for borrowers who did not qualify for HAMP. Although the number of new home retention actions was more than twice the number of new modifications during the same quarter a year ago, it dropped 12.4 percent from the third quarter. Servicers reported that the fourth quarter decline followed a surge

O Loan servicers foreclose on delinquent black or African-American borrowers more quickly than White or Hispanic borrowers. Additionally, White HAMP eligible borrowers are almost 50 percent more likely to receive a modification than AfricanAmerican or Latino borrowers. O The majority of loan modifications involve an interest rate reduction, while principal reductions were scarce. O Homeowners with foreclosure pending were less likely to receive a modification than those current on their payments. Half of the delinquent survey respondents did not receive a modification, compared to 25 percent of those borrowers who were current on their mortgage. For more information, visit

OCC and OTS release Mortgage Metrics Report for Q4 of 2009 Performance on home mortgages serviced by the largest national banks and federally regulated thrifts declined for the seventh consecutive quarter in the

continued on page 23

MAY 2010 O



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A PRMI Company O

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Thursday, June 24, 2010 Friday, June 25, 2010 AAMB welcomes NAMB to beautiful Phoenix! Come see the new NAMB President and the new NAMB Board installation, while participating in some great networking opportunities. State delegates can also participate in the NAMB Delegate Council Meeting.

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iServe Servicing Inc., a residential servicer of performing, s u b - p e r fo r m i n g , non-performing and bank-owned assets, has announced it has received certification for immediate participation in the U.S. Department of the Treasury’s Home Affordable Modification Program (HAMP). HAMP, a key component of the Obama Administration’s Making Home Affordable Program, was established to help financially struggling homeowners avoid foreclosure by modifying residential loans to a level that is affordable and sustainable for borrowers over the long term. “Beginning in 2007, the management of iServe Servicing understood the undeniable need to work with homeowners to essentially re-underwrite loans and make every effort to help stabilize their position and pro-

fha insider




iServe Servicing certified to participate in HAMP

Visit for details.

mote long-term viability,” said iServe Chief Executive Officer Richard Cimino. “We have always understood that continued homeownership, whenever possible, is an obvious benefit to the homeowner, but is also a tremendous advantage for the underlying mortgage investor because a successfully modified and performing loan presents significantly more value than a foreclosure. With a team of highly trained loss mitigators that work a low caseload and use cutting edge technology solutions, we believe we have the right model that can help homeowners maintain their dignity, support home values in communities and let lenders focus on financing future homeowners.” iServe Servicing has significant loss mitigation experience in servicing non-performing, delinquent and subperforming residential loans with an average of 60-plus days delinquency. continued on page 25

continued from page 16

ent would want to stay with you. Be prepared to give these talented originators a good reason to stay or be prepared for attrition, because when the market gets hot, talented people are always looking for ways to improve their lot. Now, when the market isn’t booming, is the time to start thinking about these things. Some brokers are scared that they will not be able to get sponsored by their lenders to do FHA loans. It pays to keep this in mind … as I explained at the NAMB/WEST conference last December in Las Vegas, we are in an era of what I call “Relationship lending.” This means that good lending practices rely on and are built on good relationships. So, the brokers that have created good relationships and have delivered quality loans to their wholesale lenders will be the ones who will be sponsored by their lenders to do FHA loans. The brokers that have not created good relationships and have only shopped their

lenders based on how much they can profit may find it difficult to get sponsored by an FHA-approved lender. If you are a broker not yet sponsored by an FHA lender and you need access to FHA programs, I strongly encourage you to make some phone calls to your lenders and find out their guidelines for sponsoring you to do FHA loans. Don’t sit and wait … Go FHA! Jeff Mifsud founded Southfield, Mich.based Mortgage Seminars LLC in 2004, has been an FHA originator for 13 years, is a contributor to and is a former FHA underwriter. Jeff may be reached at (877) 342-9100 or e-mail Visit author Jeff Mifsud’s Web site at for tips and information on FHA loans and details from some of the nation’s top FHA specialists.

continued from page 20


institutions, FHA/Ginnie Mae, REITS, mortgage REITS, investment funds, and other investors; HFF LP for conduits; MetLife for life insurance companies; PNC Real Estate for Fannie Mae; CBRE Capital Markets Inc. for Freddie Mac; TIAA-CREF for pension funds; Glacier Real Estate Group for credit companies; and Deutsche Bank Commercial Real Estate for specialty finance.

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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in new home retention actions in the second and third quarters of 2009 after the introduction of HAMP. More than 82 percent of all modifications implemented during the quarter reduced principal and interest payments, and all HAMP modifications reduced monthly payments. Most of HAMP modifications decreased borrowers’ monthly payments by 20 percent or more. Recent vintages of modifications that emphasized sustainability through lower monthly payments performed better at three and six months after modification than older vintages. However, re-default rates remained high overall, with more than half of all modifications falling 60 or more days past due by nine months after modification. Newly initiated foreclosures fell by more than 15 percent in the fourth quarter and foreclosures in process were stable, as mortgages remained delinquent for longer periods before entering the foreclosure process and the servicers evaluated more borrowers for loss mitigation and foreclosure prevention programs. However, servicers report that they expect new foreclosure actions to increase in upcoming quarters as alternatives to prevent foreclosure are exhausted and a larger number of seriously delinquent mortgages slip into foreclosure. Current second liens that stand behind delinquent or modified first liens have an elevated risk of default and loss. The OCC and OTS have instructed banks and thrifts that hold such second liens, which are a minority of all second liens, to hold appropriate loan loss reserves to reflect the elevated risk. For more information, visit and

Your turn


news flash

By dollar volume, the top five originators for third parties in 2009 were Deutsche Bank Commercial Real Estate, Wells Fargo Bank, PNC Real Estate, CBRE Capital Markets Inc. and HFF LP. The MBA study presents a comprehensive set of listings of commercial/multifamily mortgage originators and the different roles they play. The MBA report, “Commercial Real Estate/Multifamily Finance Firms—Annual Origination Volumes,� presents origination volumes in more than 140 categories, including by role, by investor group, by property type, by financing structure type, and by the location of the originating office. For more information, visit



MBA finds Wells Fargo as top U.S. commercial/multifamily originator in 2009




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O MAY 2010

O Wells Fargo Bank as the top originator for commercial banks/savings



Wells Fargo Bank was the top comm e rc i a l / m u l t i family originator in 2009, according to a set of listings released by the Mortgage Bankers Association (MBA). Other originators in the top 10 include PNC Real Estate, Deutsche Bank Commercial Real Estate, CBRE Capital Markets Inc., HFF LP, Prudential Mortgage Capital Company, Meridian Capital Group, MetLife, Northmarq Capital LLC and Capmark Financial Group Inc. Eight different companies topped the 11 lists reporting originations by investor groups:




Real Estate Investors: The $141 Billion Market Investors currently account for 19 percent of all home sales according to the National Association of Realtors (NAR). This means that real estate investors are purchasing one out of every five residential homes being sold today. In fact, it is estimated that a whopping $141 billion of non-owner-occupied investment property loans will be funded in 2010. What if you could capture more business from this lucrative segment of the market?

Finding qualified real estate investors

MAY 2010 O



The first step to working with qualified investors is to find them! I’m not talking about a “wanna-be investor” with a 520 credit score who wants to buy a foreclosed property with no money down. I’m not talking about a “speculator” who wants to flip properties by buying today and selling tomorrow. No; I’m talking about an “investor” who is defined by the financial dictionary as being:


“In order to capture your share of the $141 billion of annual loan volume from qualified real estate investors you need to find out what is important to them and their financial advisors.”

“A person who purchases income-producing assets. An investor as opposed to a speculator usually considers safety of principal to be of primary importance. In addition, investors frequently purchase assets with the expectation of holding them for a longer period of time than speculators.”

So, where do you find true, qualified investors who frequently purchase or would like to frequently purchase income-producing real estate rental properties? When you go fishing, it helps to fish in a lake or stream where there are a lot of fish. The same idea applies to “fishing for qualified investors.” This is as simple as establishing referral relationships with CPAs, attorneys, financial advisors and Realtors who specialize in working with real estate investors. After all, who uses a CPA? Business owners and/or people who pay a lot of taxes; and remember, you don’t pay taxes unless you are making money. Who uses a financial advisor? People who need advice or help in managing their money; and remember, you don’t need financial advice or money management services unless you actually have money to invest. You get the picture.

Adding unique value and capturing the business In order to capture your share of the $141 billion of annual loan volume from qualified real estate investors you need to find out what is important to them and their financial advisors. Then, you need to find a way to deliver this value in way that is more unique and effective than your competition. What is important? When we go back to our definition of “investor,” we discover that investors are looking for income and consider “safety of principal to be of primary importance.” Put simply, in order to capture the business, you will need to show investors how working with you and implementing your strategies will result in: O More safety of their principal O More income and a higher rate of return on their investment

How do you deliver unique value? Consider this loan comparison prepared for an investor who wants to purchase a $200,000 property with 25 percent down:

Cash flows 30-year fixed 15-year fixed 7-year interest-only ARM Value of property




1st mortgage balance




Interest rate




Monthly payment












First mortgage closing costs




Total points & costs







Gross monthly rent




Monthly cash flow




Cash needed to close




Monthly taxes & expenses

Rate of return 30-year fixed 15-year fixed 7-year interest-only ARM Current value of property




Current mortgage balance




Equity invested plus costs (PV)




Rate of appreciation




Value of property in seven years




seven years




Equity in seven years (FV)




Monthly cash flow (PMT)




Annual internal rate of return (IRR) over seven years




Mortgage balance in

Most investors think that a 15-year mortgage carries less risk than a 30-year mortgage, and a 30-year mortgage carries less risk than an interest only adjustable-rate mortgage (ARM). However, one of the biggest risks with income property is that the property goes vacant. In that case, if the investor fails to make their mortgage payment, the property will go into foreclosure and the investor will lose all their principal investment. As you can see from the illustration, the seven-year interest-only option in column number three will result in more safety of principal. This is because it carries a much lower monthly obligation and allows the investor to maintain their payments and/or set aside more capital reserves in case the property goes vacant. A 10-year interest-only option could even be used as a variation to this strategy if the investor’s time horizon for the property is greater than five to seven years. The interest-only option also results in greater monthly income and a higher rate of return than either the 30-year option or the 15-year option. In other words, if you were trained and equipped to calculate and compare IRR for your investor clients, you could show investors and their CPAs, financial advisors, and Realtors continued on page 28

heard on the street

Byte Software partners with AppraiserLoft for integration in BytePro

continued from page 22

In order to ensure that homeowners have consistent and direct contact with an experienced servicing specialist, each iServe Servicing loss mitigation specialist manages less than 200 cases at any one time. “We are proud to participate in the HAMP program and apply our unique approach to loan servicing and loss mitigation for institutions and private investors that are looking to work within the HAMP guidelines and also for larger servicers that are looking for a specialized partner to help them with component servicing mandates,” said Cimino. For more information, visit

Sterling Bancorp announces launch of Sterling Warehouse Lending Group

Byte Software, a provider of mortgage software solutions for banks, credit unions, mortgage bankers and mortgage brokers has partnered with AppraiserLoft to provide compliant and warranted valuation products to Byte Software customers. The integrated solution allows Byte Software customers to quickly and seamlessly order AppraiserLoft services directly from within Byte Software’s BytePro loan origination software (LOS). Byte Software specializes in providing soft-

continued on page 26

You've Decided to Make a Move... 5 Questions You Must Ask! 1. Have they been branching for nearly two decades? 2. Will they work closely with you to expand your business? 3. Will they provide underwriting, compliance and accounting? 4. Can they license your branch in multiple states? 5. Will they pay the next day, on funded loans? Guaranteed Home Mortgage Company was founded in 1992 and was named in the Inc. 500 list of fastest growing companies in the United States. Last year, we moved to a larger headquarters to support our expansion. Call Louis Tesoriero today to learn about our winning team, and find out why so many professionals have joined Guaranteed.

Branch Program for Professionals IT'S ALL WE DO.

O MAY 2010

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Sterling Bancorp, a financial holding company based in New York City and the parent company of Sterling National Bank, has announced the launch of a new mortgage warehouse lending business to serve the financing needs of the residential mortgage banking industry as the U.S. housing market recovers. Known as Sterling Warehouse Lending Group, the new division will provide funding to highly qualified mortgage banking firms from the time of closing until the mortgages are sold. “Our new warehouse lending operation is an excellent example of our strategies to deploy the capital from our recent common stock offering to grow our core business,” noted Sterling Bancorp’s Chairman and Chief Executive Officer Louis J. Cappelli. “Warehouse lending is a natural extension of our business, drawing upon Sterling’s demonstrated strengths in both asset-based financing and mortgage banking.” Sterling Warehouse Lending Group will focus on serving established mortgage banking firms and will concentrate primarily on warehouse facilities secured by Fannie Mae, Freddie Mac and Federal Housing Administration (FHA) residential loans. The company is building a team of experienced warehouse lending professionals to work with its existing personnel in maximizing the opportunities for this business. Gary Timmerman, with more than 20 years of executive experience in bank warehouse lending, has joined as senior vice president and managing director of Sterling Warehouse Lending Group. “Warehouse lending has historically been a successful product for a number of banks,” said Cappelli. “As the

housing market has now begun to show signs of stabilizing, we see an opportunity to apply Sterling’s capital, experience and market knowledge to fill this financing need and generate solid returns on our investment in the warehouse business. In keeping with our traditional disciplined and prudent approach, our focus will be on financing only the most qualified, experienced and successful mortgage banking firms.” For more information, visit

ware products to streamline and automate the processes used by mortgage originators, processors and closers. AppraiserLoft, a nationwide appraisal management company (AMC) operating in all 50 states, offers residential valuation services targeting the mortgage lending and servicing industries. AppraiserLoft provides immediate access to residential real estate appraisal services through an in-house developed appraisal platform. AppraiserLoft’s proprietary platform and processes allows for client collaboration to help provide customized solutions. This collaboration and customization adds


heard on the street

continued from page 25

value to the clients’ process since it allows them to structure the system to meet their business needs. In addition, AppraiserLoft is in full compliance with Federal Housing Administration (FHA) regulations and Home Valuation Code of Conduct (HVCC) guidelines, providing peace of mind to the mortgage professionals in today’s challenging regulatory market. Masad Baba, chief compliance officer of AppraiserLoft said, “This integration in BytePro enables our customers to order appraisals easily and directly within the

software returning the full appraisal meeting all FHA regulations and HVCC guidelines.” For more information, visit or

IMS expands REO asset management offering with REO Leasing Solutions Integrated Mortgage Solutions (IMS) and REO Leasing Solutions LLC have joined forces to address the loss mitigation and real estate-owned (REO)

challenges in today’s housing market. “Ever-changing legislation necessitates uniting with a proven organization that has deep experience in the both the mortgage market as well as property management in the residential market,” said Cheryl Lang, president and chief executive officer of IMS. “REO Leasing Solutions brings a seasoned management team and a national perspective to this emerging market. In working with REO Leasing Solutions, IMS is equipped to offer additional loss mitigation and REO options to our customer base. The additional expertise that REO Leasing Solutions deliver enables IMS to work within landlordtenant law—leases, tenant qualification, payment by credit card, tenant

Why some Mortgage Professionals fail in Credit Repair while others Make Serious Money Mortgage Professionals make money in credit repair while getting borrowers Mortgage Ready!

You don’t need to be a credit expert to they couldn’t close before due to bad credit! It means more loans and more revenue for my loan start your own Credit Repair business Fortunately, with HTDI Financial’s Credit Services Organization (CSO) program, you will be able to handle ALL aspects of your business except having to do the actual repairs; we do that for you! We will train you on how to handle these customers and you will have the support you need every step of the way. We will make you look like a Fortune 500 company even if you work from home! YOU control how much money you make. In fact, through our CRM, we give you the tools and resources to harvest leads, manage prospects and monitor their progress.

You don’t have to spend tens of thousands of dollars for start-up costs for your own Credit Repair Company

MAY 2010 O



Once you are set up in our system, you will get access to software and tools that HTDI has spent over $1 million on research and development. You don’t need to spend an arm and a leg to start building your own credit repair business. Here is a quote from a mortgage company located in upstate New York who spent months of research before choosing HTDI:


“Until last year, I owned a large mortgage company in upstate NY with over 125 employees. We got hit hard during the mortgage industry crash and had to close our doors. I was stuck in a position with thousands of leads and customers that couldn’t get qualified for anything. I decided to start looking for a way to capitalize on my left over resources and help people in the process. I called many other credit repair companies and was very unimpressed. One west coast based company was charging $15,000 and had nothing but negatives written about them on the Internet. Then I found HTDI. They helped me to get started at the beginning of this year and it has been great. I have not only made great money helping people to repair their credit, but I have refinanced 8 of them and helped 6 buy houses that would have never qualified with the new guidelines. The software is very user friendly and all of my clients, affiliates and Brokers have increased business because of it.”

Get those impossible to close deals CLOSED! As the number of loan programs are shrinking, the bar on credit scores keep rising. This program will allow your borrowers to become “Mortgage Ready” as soon as 45 days. As one of our CSO stated:

“I have many loan officers that are now able to send their clients through the credit repair, raise their scores, and then close the client’s loan that

officers. Even better than that, it is very rewarding to be able to help a client regain their credit and be able to get the loan they need.”

Industry Leading Results 46.95%

Get started in a business that is booming and shows no signs of slowing The credit industry, as a whole, is one of the most powerful and profitable industries in existence. With loans, insurance and even employment taken into consideration individuals’ credit picture, the credit industry is getting bigger every day. Inside the credit industry, Credit Services is helping by assisting consumers with getting back on track by removing unverifiable and inaccurate negative items from their credit reports. As a CSO, you can benefit in being in a profitable industry and helping clients with their futures.

“I’ve been in the mortgage business over 22 years. A year ago, as the mortgage crisis worsened, I began trying to find a way to help clients who needed a better credit profile in order to get a mortgage. Fortunately for both me and my clients, I stumbled on HTDI. After a year of experience, I can honestly say the success rate is 100% and client satisfaction is through the roof. All of my clients have seen significant improvements, and some have experienced breathtaking jumps in their credit scores, even on the first round! From Day One you can be sure your “back office” (HTDI) has you covered. They will execute their part of the job seamlessly, with precision, on time, and with total consistency. All you have to do is SELL the service! Just sign people up, collect the money, and send HTDI the paperwork they need to get started. If you simply focus on selling the service, you will make lots of money, the work will get done, and you will never have to worry about unhappy customers. Although I got into it as a part timer, I now realize this is an excellent full time business opportunity. (Frankly, these days it’s probably a better business than the mortgage business!) You could easily make six figures in the first year with a minimal investment of money. How many opportunities like this exist these days? What you must invest is your time – SELL, SELL, SELL & SELL some more! Ultimately, what you are selling is the professionalism of HTDI, which is why this really rocks as a business opportunity.”

20.44% 17.32% 14.21%

Round 1 Round 2 Round 3 Round 4 We average one of the highest fix/deletion rates in the industry for the first 45 days of service. Shown below, in real-time, is the average percentage of fix/deletes per round.

If you are going to get involved in Credit Repair, be VERY CAREFUL First you have “Fair Credit Reporting Act” (FCRA). The FCRA holds credit bureaus and creditors to their reporting methods and has guidelines they must comply with. There are numerous techniques that are used along with similar laws to maximize results for each client. You must know these laws inside out. You can’t forget “Credit Repair Organizations Act.” (CROA). Just like the FCRA, the CROA hold credit repair companies to specific guidelines as well. If you choose HTDI Financial for your backend processing, we will ensure you maintain compliance. Lastly, you have applicable State Laws. Depending on the state you wish to conduct business in, you may have a state Credit Services Organizations act to comply with. As an active member in good standing of the National Association of Credit Services Organizations, you can be sure that we take our job very seriously, making sure you stay compliant and your clients.

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turnover, make ready, and habitability and maintenance requirements.” IMS adds the deep experience of REO Leasing Solutions in residential market property management to its distressed portfolio management services. IMS provides an array of asset management solutions on a third-party basis to mortgage servicers, expediting the loss mitigation process. “We are strategically building our company in order to provide organizations like IMS with end-to-end specialty solutions in the distressed market and on a scale they demand,” said C. Alan Paylor, president of REO Leasing Solutions LLC. “IMS is able to give their investors immediate options, even at their initial due diligence of a distressed portfolio. REO Leasing Solutions can model a rent/lease option and provide cash flow analysis and ROI on a portfolio or a single loan.” For more information, visit or

Intelenet partners with SigniaDocs for real-time eModification solution Intelenet Global Services, a provider of business process outsourcing (BPO) support services for the mortgage banking industry, announced that it has partnered with SigniaDocs Inc., an eMortgage solutions provider, to offer an eModification solution for lenders and servicers. This online, real-time approach compresses the loan modification process to identify and collect the required documents into a “Mods in Minutes” solution. “The HAMP modification program has only reached a small fraction of the distressed borrowers it was intended for,” says Robert Guatelli, vice president of sales for banking and financial services at Intelenet Global Services. “It is still far short of the Obama Administration’s goal of helping millions of homeowners that are in danger of losing their homes.” Intelenet Global Services works closely with distressed borrowers as a seamless extension of the lender’s or servicer’s staff, from initial contact to identifying and recommending viable workout options, as well as completion and execution of agreements and documents. “Using SigniaDocs’ eModification, borrowers can execute the documentation immediately and securely online,” Guatelli said. “Immediacy is the key, and our loan workout specialists can walk them through the click-to-sign process on the phone. Within minutes the mod can be completed.” Tim Anderson, president of SigniaDocs, notes that Intelenet’s expertise in outsourced support services and process automation technology combines with SignaDocs’ secure eSigning capability and eModification docucontinued on page 28

Mortgage Originators be Warned: Credit Repair Could End Your Mortgage Career! By Tommy A. Duncan, CMT

By Terry W. Clemans

First, I would like to say that the Mortgage Bankers Association (MBA) and its committees that did such a great job in hosting this conference. They featured a great number of panelists and speakers who are quite knowledgeable in the field of technology and fraud issues regarding the mortgage industry. One particular session that really grabbed my attention was a discussion regarding Home Affordable Modification Program (HAMP) loan modifications and short sales. I could not believe the number of problems that plague the federally-mandated HAMP. There are 300,000 loans currently in their trial period that are expected to go into default. The reasons appear to be income related. The borrower, when applying for the loan modification, is working with the loan specialist and when asked about income, the findings appear the income is temporary or part-time, the borrower has not started yet, immediate loss of income for reason beyond the borrower’s control, or the income just insufficient to make the payments even with a full-time or several part-time jobs. Also, there appears to be a question regarding getting the appropriate paperwork to complete the loan modification from the borrower. There are two ideas surrounding this dilemma: The borrower is not sophisticated enough to know what to do or understand what to do. The borrower is afraid they will get caught for misrepresentation/fraud once the first loan’s income is discovered to be incorrect so the completed paperwork is not sent in due to fear. When the audience was asked which option they felt was the probable reason, option two was recognized by a majority for the reason. Simply put, if the borrower is not sophisticated enough to send in the supporting documents, how did they receive the loan in the first place. Some enemies of brokers may say the loan officer broker did it or made them do it. We know that is not true. It does make sense that the borrower misstated or misrepresented their income on the first loan. We know that there are many honest borrowers who truly disclose their income and not every mortgage loan is fraudulent. We understand many borrowers and brokers made good loans out there and unfortunate things happened to many innocent borrowers. However, this was a fraud conference and the focus was on those loans containing fraud.

Tommy A. Duncan, CMT is executive vice president of Quality Mortgage Services LLC. For answers to your QC and FHA questions, please contact Tommy at (615) 591-2528 or e-mail You may also visit Quality Mortgage Services LLC on the Web at

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Lenders are faced with a moral dilemma … if the first loan had fraud for housing with overstated income, should the loan modification be made? The servicers are making them. However, what are the statutory limits for reporting a loan officer to authorities for allowing fraud for housing? There is not one yet. However, there are servicers mad as hornets with loan officers and they may unite and submit information to SAR and other organizations that are monitoring mortgage fraud. Servicers are finding the borrower overstated their income when they received their first loan and understating their income to receive the loan modification. This must be the few hundred thousand who actually received their loan modification. Effective in June, all loan modification will require full documentation and the borrower will be required to sign a general authorization for a vendor or third-party to verify income rather than sending documents to the servicer. Mortgage fraud is expanded in the servicer’s world and it has taken them by surprise. After all this time, they are just now learning how to deal with it. We hope the best for those who are stressed and being stretched, and hope to see America to get through these difficult days. O O MAY 2010

In early 2008, with the industry enter- unrecognized, is the Credit Repair ing a meltdown that made most night- Organizations Act (CROA). This is the mares serene, a troubling trend primary governing law for credit emerged. It was the feature of cover repair companies and it strictly prostory of the issue of Broker Magazine hibits many practices that are unfortuthat discussed various methods of cred- nately still in use by many credit it restoration and improvement. With repair companies today. For a credit the mortgage marketplace drastically repair company to be compliant with changing over the past year, it was easy the most basic of CROA regulations, to understand the increased awareness they must start with a clear contract in the maximization of a consumer’s spelling out exactly what they will do credit score in an attempt for the consumer, inform to salvage every loan, and them of their rights and make some extra income not charge the consumer to boot. Other articles any fees until all terms have since been written of the contract have in several mortgage pubbeen completed. lications featuring these Many of these compaprograms. With today’s nies have policies that increased underwriting barely meet the requirescrutiny, providing deciments of the law, and sions that hang on the would likely fail a CROA smallest of credit score legal challenge by a conmargins. The desire to be sumer or government involved in making credit enforcement agency. Even “The desire to be improvement happen is a couple of the national involved in making obvious, but at what cost? credit repositories and credit improvement There is no shortage Fair Isaac and Company happen is obvious, of firms looking to part(FICO) got surprised by but at what cost?” ner with mortgage origCROA litigation chalinators offering various lenges regarding the sale methods of correcting, improving or of their credit reports, scores and cred“repairing” credit, and profits from it correction/improvement programs the process there are two very on the Web for violating the pre-payimportant missing aspects of “credit ment portion of CROA. If you are interrepair”—aspects that mortgage orig- ested in further detail, log on to inators must carefully consider when working with their clients and credit for a complete copy of the CROA. repair companies. While the firms promoting these programs will The sale of credit reports address one of the problems, they The second issue, and the issue with miss one very important one … the greatest potential impact on your mortgage originators must be ability to continue your mortgage warned: Being involved with credit origination business, is related to the “repair” may bring major conse- three national credit repositories and quences, including the loss of your their policies prohibiting the sale of ability to originate loans! credit reports to companies in the business of credit repair. Any accurate In terms of legality derogatory data on a consumer’s The first issue with credit repair credit report cannot be removed involves its legality. Does the program through legal methods until the specifically comply with federal law? statute of limitations expires (seven In addition to the Fair Credit years for everything other than bankReporting Act (FCRA), there are very ruptcy, which is 10 years). Companies specific and strict laws about credit that make claims other than that repair. One of the most important continued on page 28 laws, and one of the most frequently

What were the hot topics at the Mortgage Bankers Association’s recent Fraud Issues Conference?


fair lending violations should have their practices carefully reviewed for both FCRA and CROA compliance. Since any firm that is found to be in the business of credit repair no longer qualifies to purchase credit reports, if you are discovered and listed on a “do not sell” list of the repositories for being involved in credit repair, what is going to happen to your mortgage originations? This also affects any company that shares office space with a credit repair company. In other words, starting a new “company” to shelter the connection with your mortgage broker business will not work if you are sharing physical office space with the other company. This is one of the items reviewed during the mandatory site inspections prior to receiving clearance for the purchase of credit reports. Mortgage originators now are now being cut off on a regular basis for violating this policy. In a down market, it is only natural to seek new ways to expand your consumer base and look for new revenue streams. When doing so, careful evaluation should be given to the potential consequences to both your consumer and your mortgage origination business if credit repair is something being

continued from page 27

considered. Make sure that any company you are considering referring to your consumers meets all of the federal guidelines for legally offering credit repair. The FTC brochure at this link, credit/repair.shtm, will help you to determine if the company you are planning to refer is worthy of consideration by your consumer. And, of course, if you are considering getting into this business, remember that being involved in a credit repair company impacts your ability to access credit report information. Make sure to include the loss of access to credit reports for your mortgage operations from any considerations on getting into this business line and if the potential loss of your company is worth the benefits of these programs. Terry W. Clemans is the executive director of the National Credit Reporting Association Inc. (NCRA). He may be reached at (630) 539-1525 or e-mail Visit the National Credit Reporting Association Inc. (NCRA) on the Web at

continued from page 24

how working with you and implementing your strategies will result in: O More safety of their principal O More income and a higher rate of return on their investment As an investor, wouldn’t you much rather deal with a loan originator who is trained and qualified to help you preserve safety of your principal while enhancing your income and rate of return? As a CPA, financial advisor or Realtor, wouldn’t you feel more comfortable referring your clients to a loan originator who can make you look good by “wowing” your clients, and helping them make smart real estate investment choices? Remember, Realtors make more money the more transactions they close. If you can help their investor clients make more money with less risk, the investors will buy more properties, and the Realtors will make more money. CMPS certification equips you with unique knowledge, training, tools and resources to help you and your clients cal-

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culate and compare IRR, and implement the seven keys of profitable real estate investment. It’s time for you to capture your share of this $141 billion market! Gibran Nicholas is the founder and chairman of the CMPS Institute, which administers the Certified Mortgage Planning Specialist (CMPS) designation. The CMPS Institute has enrolled more than 5,500 members since its founding in 2005. Gibran is also the chairman of Published Daily, a customizable online magazine, newsletter and marketing service that helps professionals transform their clients and prospects into a referral-generating sales force. He may be reached at (888) 608-9800, ext. 101 or e-mail Visit author Gibran Nicholas’s blog at where he shares his insights on economics, real estate and financial issues, including the current mortgage and credit crises.

continued from page 26

ments to make the “Mod in Minutes” possible. “Nearly every servicer I’ve spoken with has said that their number one challenge is getting documents completed and executed in a timely manner,” said Anderson. “With the size of the task at hand, it seems logical to me that strained lenders and servicers would outsource these functions to quickly scale and address the problem, rather than throwing people and paper at the process. From a true cost and efficiency perspective, our partnership with Intelenet Global Services provides a best of both worlds approach.” For more information, visit or




trend spotter

National Quick Sale and Hollander join forces to expedite short sales National Quick Sale, a provider of short sale automation technology, has announced an agreement with real estate and mortgage services provider Hollander Financial Holding Inc. of Claremont, Calif., to promote the use of its short sale platform’s capabilities through Hollander’s network of real estate professionals nationwide. National Quick Sale’s Web-based technology enables all parties in a short sale opportunity to monitor workflow and complete documentation requirements in a condensed time frame. Hollander Financial will bring its

relationships with approximately 1,000 independent real estate agents nationwide to the National Quick Sale platform, working with both buyers and sellers to effect successful short sale transactions. As a national mortgage banking firm, Hollander Financial will also be offering financing options, providing additional continuity and speed to the process. “Short sales can be complex,” said Mark Hollander, president of Hollander Financial. “National Quick Sale has found a way to simplify and accelerate them immensely, and it is our role to bring that message to the marketplace. Real estate professionals see the enormous potential offered by short sales, and National Quick Sale makes those opportunities realistic with their technology platform. We are using social media, our Web site and other means to make certain all parties know that short sales no longer have to be an ordeal. Thanks to National Quick Sale, they are a viable, commissionable business opportunity for Realtors and a sound exit strategy for borrowers in trouble.” “Short sales let the market do most of the work in the recovery process,” said Rich Rollins, founder and chief executive officer of National Quick Sale. “Instead of foreclosures and vacant houses, motivated buyers can benefit from realistic offers and lenders can reduce losses substantially. This partnership with Hollander Financial means thousands more people can sell their homes and avoid the pain and misery of the foreclosure process. By

bringing more real estate professionals into the network served by National Quick Sale’s short sale platform, Hollander Financial enables thousands of agents to become engaged, earn commissions and help the housing market get moving. We are very pleased to be working with them to achieve this important goal.” For more information, visit or

Mortgage Professionals to Watch O Elliott & Company Appraisers has promoted Carlyle Holt to the position of vice president.

O HOPE LoanPort has named Larry Gilmore as chief executive officer and has named the following to the board of directors: William A. Longbrake, John H. Dalton, John A. Courson, Faith A. Schwartz, Kenneth D. Wade and Camillo T. Melchiorre. O Fairway Independent Mortgage Corporation has appointed Paul Walnick president of mortgage operations and Dan Cutaia president of capital markets and risk management. O Saxon Mortgage Services Inc. has named John P. Kim as head of business development. O Brian D. Frame, CMB, AMP has been appointed to the position of director, strategic segment manager for Radian Guaranty Inc., the mort-






gage insurance subsidiary of Radian Group Inc. Level 1 Loans, a wholly-owned subsidiary of The Sextant Group, has announced the hiring of Tom Healey III as product manager. The First American Corporation has named Anand K. Nallathambi as its new chief executive officer and Buddy Piszel as chief financial officer of its Information Solutions Group. David Hall has announced the launch of Hall Financial, based in Birmingham, Mich. UnitedTech Lender Services Inc. has announced the appointment of Bradley Coburn as vice president of valuations. Anthony Self has joined as head of business marketing.


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.


Carlyle Holt

O Danielle Drewisch has been named director of client relations for EquiTrax Asset Solutions LP.

Danielle Drewisch

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

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

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Credit Plus announces direct connectivity to FHA TOTAL Scorecard

Credit Plus Inc. has announced that its customers can obtain direct access to the Federal Housing Administration (FHA) TOTAL (Technology Open to Approved Lenders) Scorecard through its innovative technology. “We’re excited to be one of the first credit reporting agencies to offer this direct access,” said Greg Holmes, national director of sales and marketing for Credit Plus. “This connection allows our customers to save money and submit directly to FHA TOTAL Scorecard.” The U.S. Department of Housing & Urban Development (HUD) developed the FHA TOTAL Scorecard to evaluate the credit risk of FHA loan applications that are submitted through an automated underwriting system. A mortgage professional simply uploads the 1003 loan data into the FHA TOTAL Scorecard and the application is approved or denied. A realtime response is provided through the automated technology. For more information, visit

NYLX adds live MBS pricing and analysis in its price decisioning platform NYLX, a provider of automated mortgage data applications and solutions, has announced a partnership with MBSQuoteline to incorporate streaming real-time Mortgage-Backed Securities (MBS) and Treasury prices, market news and analysis, and an economic events calendar into its LoanDecisions product eligibility and pricing platform. Users will be provided a dashboard of summary MBS market data, and access to the rich information services provided by MBSQuoteline. These services include real-time MBS pricing, intra-day MBS price monitoring to anticipate pricing risk or opportunity, charting of mortgage rates to view volatility and developing trends, and concise analysis of the day’s economic events affecting mortgage rates. “MBSQuoteline market information and services will help NYLX LoanDecisions users get the same realtime streaming data professional traders use, enabling them to stay in touch with the market information they need,” said

Howard Conyack, chief executive officer of NYLX. “They’ll be able to make better lock/float decisions because they’ll have access to real-time MBS data and will know about upcoming economic events that could move market rates.” MBSQuoteline market information and services will help NYLX LoanDecisions users get the same real-time streaming data professional traders use, enabling them to stay in touch with the market information they need. “It is a natural fit for MBSQuoteline to provide its services through the NYLX market leading platform for product eligibility and pricing,” stated Scott Sanderson, president of MBSQuoteline. “We supply the essential market information—what you need to know, when you need to know it—necessary for effective decision making for originators when assisting borrowers during the loan origination process, and for secondary marketing departments managing pipelines.” For more information, visit or

New Interthinx product detects occupancy issues related to fraud

Interthinx has enhanced its flagship FraudGUARD product with new variances to help detect occupancy issues related to mortgage fraud. The changes come in response to a disturbing trend the company uncovered in its quarterly fraud risk reports. Occupancy fraud showed a slight quarter-over-quarter increase in the third-quarter 2009 report, which alerted the Interthinx product team to study issues including occupancy fraud, buy and bail schemes, straw buyers, risks associated with delinquency/default, and risks associated with increased home value. The introduction of the new variances, designed to help protect mortgage lenders from fraud and improve loan quality, is made possible by the unique FraudGUARD comparison of the borrower’s current residence to the subject property. Interthinx is a leading provider of proven risk mitigation, mortgage fraud prevention, and regulatory compliance tools for the mortgage industry. “We look very closely at the findings in the mortgage fraud risk reports,” said Connie Wilson, executive vice pres-

ident of Interthinx. “In the third quarter report for 2009, the Occupancy Fraud Risk Index, which is closely correlated to schemes involving speculative investments, declined 30 percent from a year ago. However, a very slight increase over the last quarter—the first since fourth-quarter 2006—suggested that occupancy risk may be poised for a rebound. We decided to respond swiftly to this analysis with the new ability to compare subject properties to the current residences of borrowers within FraudGUARD. As it stands now, results from our fourth-quarter 2009 Mortgage Fraud Risk Report reveal a 16 percent rise in the Occupancy Fraud Risk Index. The magnitude of the quarter-on-quarter increase suggests that occupancy fraud risk may become a serious issue as continuing price declines and getrich-quick schemes lure investors back into the market. FraudGUARD is ready to support lenders facing occupancy risk issues.” Using a borrower’s current address, FraudGUARD produces a data comparison that identifies renters that buy non owneroccupied properties and borrowers claiming owner occupancy on a subject property of lesser value than a currently owned property; both scenarios present a certain level of risk. The new variances will also help identify potential risks associated with increase in value of housing and the potential problems associated with the ability to qualify for the increased value. The new variances analyze all borrowers and are available to all FraudGUARD customers. For more information, visit

The review includes an examination of an institution’s lending, compliance, vendor management, and staff training procedures. It also includes a loan file review that looks at GFEs and HUD-1 and HUD-1A forms for accuracy and adherence to all RESPA requirements. Wolters Kluwer Financial Services’ compliance and risk management experts then offer a comprehensive diagnosis of each institution’s RESPA compliance program, highlighting any areas of potential concern. And they suggest practical ways in which policies, procedures and documentation can be enhanced from compliance and operational standpoints. “The effective compliance date for RESPA passed several months ago, but

financial institutions are still tackling related obstacles,” said Jason Marx, vice president and general manager, mortgage, for Wolters Kluwer Financial Services. “Now is a perfect time to evaluate their compliance programs and ensure they are meeting the requirements through the easiest, most cost-effective routes possible.” For more information, visit

Pro Teck announces Appraisal Order Portal for the wholesale/retail market

estate valuation and risk solutions provider, has announced the expansion of its services by offering a configurable Appraisal Order Portal for wholesale and retail mortgage origination. The platform, already in use by top national mortgage wholesalers, is designed to meet the national appraisal needs of the market; including regulatory, investor and Home Valuation Code of Conduct (HVCC) requirements. With a streamlined interface, multiple payment options, robust status reporting capabilities and the quality demanded today, Pro Teck’s solution does away with the need for a third party ordering platform and

Pro Teck Valuations Services, a real

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Wolters Kluwer Financial Services has announced the launch of its new RESPA Post-Implementation Audit Service. Through the service, the company’s compliance and risk management professionals can help banks and credit unions effectively and efficiently comply with recent changes to the Real Estate Settlement Procedures Act (RESPA). Since the RESPA revisions took effect on Jan. 1, financial institutions have identified several common challenges in complying with them. These include meeting the new fee tolerance and Good Faith Estimate (GFE) re-disclosure requirements, and the responsibility to make sure third parties they do business with, such as mortgage brokers and settlement agents, are also in compliance. Wolters Kluwer Financial Services’ RESPA Post-Implementation Audit Service helps institutions rapidly put the necessary policies, procedures and documentation in place to overcome the most common and complex challenges. The company’s attorneys, compliance analysts and regulatory consultants use decades of experience and expertise to perform an efficient and thorough review of institutions’ RESPA compliance programs.


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continued from page 31

truly simplifies the appraisal management process. For more information, visit

MCS launches Broker360 to reduce market time of REOs Mortgage Contracting Services (MCS), a nationwide property preservation and inspection services provider to the financial services industry, has launched Broker360, a Web-based portal that allows real estate-owned (REO) brokers to access the status of preservation work completed by MCS. With inbound and outbound communication capabilities, the portal enables brokers to submit information and bid requests in addition to receiving electronic notifications regarding the properties they manage. Broker360 works in union with MCS’ existing Web-based client platform, MCS360, but is designed specifically to enhance the communication between the servicers, field service providers and real estate agents managing the sales process of REO properties. MCS360 was developed in response to the industry’s need for software that allows for two-way communication as well as real-time delivery of work order results. While MCS360 is a client-based Web-portal, Broker360 essentially performs the same functions for individual real estate brokers, thereby providing them with up to the minute information about their properties and affording them a direct line of communication with their asset preservation coordinator. This advancement in the speed in which information is sent and received allows asset managers to make more timely decisions with regards to preservation initiatives, which ultimately enhances short- and long-term maintenance as well as enables them to move the sale of these properties at a faster rate. Chad Mosley, vice president of operations for Mortgage Contracting Services, said, “It is important that we continue to promote cohesion and further develop our working partnership with brokers. With more and more properties adding to an already swollen REO inventory each day, it is vital that we do all we can to assist real estate agents in the selling process.” After logging into the system, brokers assigned to manage properties by MCS’ mortgage servicing clients can view information about their properties including inspection results, work order details and photos of completed work. If they elect to do so, brokers can “watch” selected properties, allowing them to receive e-mail notifications when MCS completes work at one of the designated properties. The e-mails are automatically generated through Broker360 once a

work order or inspection has been fulfilled and validated by MCS. “Broker360 will not only increase communication between MCS and real estate brokers, but it will also make that communication more efficient, allowing us to perform our work faster, hopefully reducing the time properties are on the market and the cost our clients have to spend to maintain them,” said Mosley. “In giving brokers the ability to view work upon completion and opening an additional avenue to communicate with our shared clients, we can help them trim down sale cycles as well as portfolio volumes.” For more information, visit

Bank of America introduces earned principal forgiveness program to help curb foreclosures Bank of America announced that it will look first at principal forgiveness, ahead of an interest rate reduction, when modifying certain sub-prime, pay-option and prime two-year hybrid mortgages qualifying for its National Homeownership Retention Program (NHRP). Several enhancements are being made to the program, including the introduction of an earned principal forgiveness approach to modifying mortgages that are severely underwater. The program changes are designed to encourage greater customer participation in the company’s aggressive homeownership retention programs, including our continued strong commitment to the federal government’s Home Affordable Modification Program (HAMP). The Commonwealth of Massachusetts worked with Bank of America to develop these additional homeownership retention strategies that help ensure sustainable solutions and is the most recent state to join the NHRP. There are now 44 states and the District of Columbia participating in the NHRP mortgage modification program and related foreclosure relief payment and relocation assistance programs. Bank of America developed and launched the NHRP in 2008, in cooperation with state attorneys general, to provide assistance to Countrywide borrowers who financed their home with certain sub-prime and pay-option adjustable-rate mortgages (ARMs). Bank of America removed these from the Countrywide product line upon acquiring Countrywide in July 2008. These new components of the agreement apply to certain NHRP-eligible loans that also meet the basic qualifications for the government’s Home Affordable Modification Program. “The centerpiece of these enhancements is a program of earned principal forgiveness that addresses severely underwater mortgages with some of

Fairway Independent Mortgage launches virtual data storage solution

security, as its mortgage data is now hosted in a remote, secure location and consistently backed up. â&#x20AC;&#x153;Given our explosive growth over the past several years, our growing data load, and the upcoming rollout of our new origination platform, we realized it was an ideal time for us to make this switch,â&#x20AC;? said Randy Allen, vice president of enterprise infrastructure for Fairway Independent Mortgage. â&#x20AC;&#x153;In the past five years alone, the amount of data we produce and store had grown by 400 percent. While many organizations our size have not yet embraced virtual storage solutions, we believe it will become more and more critical as paperless platforms and electronic documentation become

industry standards. Fortunately, weâ&#x20AC;&#x2122;ll be ready.â&#x20AC;? For more information, visit

AIMSdashboard releases latest version of its appraisal software AIMSdashboard has released the latest version of its Web-based Appraisal Independence Management System (AIMS), featuring several compliancefocused additions. AIMS 4.4 will promote lender compliance with the appraisal independence requirements continued on page 35

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F airway Independent Mortgage Corporation, one of the countryâ&#x20AC;&#x2122;s largest mortgage bankers, announced that it has deployed a new virtual data storage solution geared toward saving the company hundreds of thousands of dollars in costs over the coming years, while providing unlimited storage capacity. The deployment was a key goal for the company in 2010, which recently surpassed the $3 billion mark in loan volume, as it moves its growing mortgage operations toward a more electronic and environmentally-sustainable future. Fairwayâ&#x20AC;&#x2122;s new virtual data storage solution employs the use of a storage area network (SAN) which allows data to be consolidated at a remote data center where it is accessed and managed virtually over the Internet. For

Fairway employees, the SAN appears as if itâ&#x20AC;&#x2122;s an on-site server, one in which the data can be called up instantly, at any time. The new system replaces the companyâ&#x20AC;&#x2122;s network of nearly 30 physical on-site servers, which is similar to how most mid-sized mortgage lenders store their data. The solution is provided by Dell EqualLogic and managed by software provided by VMWare. Since rollout was recently completed, Fairwayâ&#x20AC;&#x2122;s SAN has resulted in a 50 percent savings across the organization in hardware, maintenance and administration costs. The company now has an unlimited ability to add additional storage space without the need for new hardware, as well as better data O

the highest rates of delinquencyâ&#x20AC;&#x201D; specifically sub-prime loans, payoption ARMs and prime two-year hybrid ARMs that are 60 days or more delinquent with a principal balance of 120 percent or more,â&#x20AC;? said Barbara Desoer, president of Bank of America Home Loans. â&#x20AC;&#x153;At the same time, earned principal forgiveness helps homeowners, it also recognizes and addresses the interests of mortgage investors by ensuring that forgiveness is tied to the homeownerâ&#x20AC;&#x2122;s performance, reducing the probability of a future default under the modified terms, and adjusting the total amount to be forgiven in light of any gains in property values that might occur in an economic recovery.â&#x20AC;? Bank of America expects to be operationally ready to implement the new principal reduction components of NHRP in May. The bank will identify mortgages that may be eligible for these solutions and proactively contact those customers to ascertain their interest in a modification and to request documents necessary to determine actual eligibility. With implementation of these enhancements, Bank of America will make principal reduction the initial consideration toward reaching the HAMPâ&#x20AC;&#x2122;s target for an affordable payment equal to 31 percent of household income when modifying qualifying sub-prime, pay-option ARM and prime two-year hybrid ARM loans that are also eligible for NHRP. An interest rate reduction and other steps would then be considered, if additional savings are necessary to reach the targeted payment. Bank of America estimates that it will be able to offer these enhanced principal reduction solutions to about 45,000 customers who qualify for a HAMP modification, for an estimated $3 billion in total reduced principal offered under this NHRP enhancement. For more information, visit


present, reinstating these necessary fees after conditioning seniors, regulators, and the public to forget them will do lasting damage to industry veracity. It will keep feeding the PR beasts and “repositioning” the industry. It is short-term thinking.

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

Atare E. Agbamu, CRMS is author of Think Reverse! and more than 130 articles on reverse mortgages. Since 2002, he writes the nationally distributed column, Forward on Reverse. Through his advisory,

Visit author Atare E. Agbamu’s blog at for his thoughts and insights on the reverse mortgage marketplace.

Spring Sale in Reverse Country

MAY 2010 O



Ginnie Mae saw it coming. The experts predicted it. And it has finally arrived, with a vengeance. The entry costs reduction food-fight among home equity conversion mortgage (HECM) reverse mortgage lenders is on. Among the major players, MetLife Bank lobbed the first salvo on March 26, by discarding origination and servicing fees on its fixed-rate HECMs. Others have since jumped in with their version. Wells Fargo spread it to its adjustable-rate HECMs. Bank of America stretched it to front-end mortgage insurance premiums (MIP), offering to pay 100 percent of the borrower’s MIP and erasing servicing fees. Other cost-reduction ideas are coming. One lender can easily match another’s offering. None has a cost-reduction competitive advantage. The HECM consumer is the winner. Call it spring sale in reverse country!


“The entry costs reduction foodfight among home equity conversion mortgage (HECM) reverse mortgage lenders is on.” Jacking up volume is a driver of these lenders’ largesse. Volume is down 22 percent for the first half of fiscal 2010 from the same period a year ago. Volume projection for the remainder of the fiscal year is dismal. High secondary market premiums for fixed-rate HECMs is a second driver. A third is lenders’ guilt for making a bundle on the backend. What do these happenings mean for borrowers and the industry? For borrowers, it means more cash at a time of the Federal Housing Administration’s (FHA’s) cash-advance cutbacks and premium increases. If the trend continues, it could help change the perception of reverse mortgages as expensive loans. If it doesn’t, we are back where we started. For the industry, it is a mixed blessing. It is a great public relations opportunity. Government is taking away cash from seniors. Presumed predators are giving it back. Forget the $100,000 plus industry “repositioning” PR cam-

paign. Scream about the cost reduction revolution in reverse mortgages. Speak of the difference it is making for seniors, saving their homes from foreclosure. Sing about the extra cash in seniors’ pockets in these tough times. So, what could go wrong? O Suitability: Lenders must ensure that loan officers or brokers do not need the fixed-rate HECM more than seniors. With eye-popping premiums floating around for fully-funded fixed-rate HECMs, the risk exists that some may push fixed-rates on seniors who do not need them. If these seniors end up losing their lump sum in some post-reverse transaction situations, the industry gets the blame, canceling any PR gains.

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.

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O Complexity: The flood of cost-reduction and pricing options is creating another layer of complexity in reverse mortgages. While professionals may find these “new” options good and easy, consumers may find them bad and confusing. Industry should focus on simplifying these options:

• • • •

Tell consumers that zero origination and servicing fees mean slightly higher rates. Tell them that high front-end costs equals slightly lower rates. Tell them what investors are paying for their loans on the secondary market and how it affects their longterm loan costs. And tell them that ultimately, they are paying for the zeros.

O Disclosure: The conventionalization of reverse mortgage entry costs have begun. As lenders wrap costs and yields into rates similar to forward lenders, they need to disclose everything, beyond the letter of the law. O Zero-fee conditioning: The industry has started training borrowers and the public to think origination and servicing fees are alien to reverse mortgage lending. When premium pricing disappears and it finds its non-variable operating costs are still (search National Mortgage Professional Magazine)

new to market

continued from page 33

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O MAY 2010

Lender Processing Services Inc. (LPS), a provider of integrated technology and services to the mortgage and real estate industries, has announced the launch of its professional short sale

continued on page 43


LPS Asset Management rolls out short sale product

service. Offered through LPS Asset Management Solutions, LPS’ short sale solution helps servicers respond more quickly to short-sale offers and close more transactions. In the current environment, servicers must be prepared to efficiently leverage alternatives like short sales. They must also be able to manage an increase in short sale requests from borrowers and process the increased volume, while minimizing risk exposure and keeping operating complexity to a minimum. “As the need for short sale management continues to increase, servicers

alliances that may not offer the same benefits. LPS Asset Management Solutions’ ability to quickly draw upon related LPS resources, including property preservation and code enforcement services, title and closing services, analytics, valuations, MLS data and market trending data, offers servicers a powerful, comprehensive solution for its short sale needs. With the expertise and ability to assist servicers at any stage of the short sale process, LPS works directly with its clients to review title; assess and resolve junior liens; review property values against short sale offers; evaluate the equity position for each transac- O

of the Uniform Standards of Professional Appraisal Practice (USPAP), Federal Housing Administration (FHA) Mortgagee Letter 09-28, Federal Financial Institutions Examination Council (FFIEC) and the Home Valuation Code of Conduct (HVCC). AIMS 4.4 further automates several elements of appraisal operations, smoothing lender-appraiser interaction during appraisal production. “Lenders are seeking more oversight in the appraisal process, which may appear to conflict with appraisal independence requirements” said Chris Williams, president and chief technology officer for AIMSdashboard. “AIMS 4.4 strikes a balance between the requirement of appraisal independence and lender process oversight. The two seemingly opposed qualities can be achieved through the use of software, eliminating dependence on third party appraisal management companies.” AIMS 4.4 delivers several new elements designed to restore efficiencies to the entire process, including: O An automatic engagement letter from the lender, which allows appraisers to accept or reject the lender’s assignment within the framework of the system. O Automatically-generated questionnaire addressing USPAP competency affirmation and ethics rule disclosure for each appraisal assignment, allowing the lender to actively manage the process where an appraiser’s response merits further consideration. O Introduction of Appraiser Administrators, providing increased efficiency through the performance of administrative functions (appraisal status updates, document download/upload), especially while appraisers are busy performing “field inspections.” According to Williams, the new features amount to real-time status updates for the lender and originator, as well as faster delivery of any appraisal-related notifications necessary for the Real Estate Settlement Procedures Act (RESPA) compliance. “More than ever, mortgage originators are looking for ways to regain efficiency in the valuation process without sacrificing accuracy,” said Williams. “AIMS has always focused on maintaining conformity with the variety of appraisal independence standards. AIMS 4.4 will make that process even faster and smoother without sacrificing business controls.” For more information, visit

must have an exceptionally efficient process in place for accuracy, timeliness and high-performance results,” said Chad Neel, president of LPS Asset Management Solutions, LPS Field Services and LPS Auction Solutions. “With our extensive industry and short sale experience and resources, we are ideally poised to help servicers streamline the short sale process, enabling them to keep costs down and work with defaulted homeowners more effectively.” LPS Asset Management Solutions has an established network of asset managers who manage, market and sell distressed and bank-owned properties, so servicers don’t have to experiment with alternatives or create


Brokers … Don’t Jump Ship!

MAY 2010 O



By Paul A. Lucido


“Loan brokers are one of the least expensive ways to bring a loan to market,” said David H. Stevens, commissioner of the Federal Housing Administration (FHA) during his presentation to the National Association of Mortgage Brokers 2010 Legislative & Regulatory Conference in Washington, D.C. Brokers, in their purest form, are an extension of the lenders they represent and a borrower’s best friend. Without sacrificing professionalism or ethics, professional mortgage brokers find the very best lending programs at the best rates, fees and terms. They, in fact, do the shopping for the consumer and this is why we believe that not only will brokers remain a viable source of loan originations for the industry, but will dominate once again in the future. Bottom line, consumer demand will dictate it. Many brokers are finding themselves drifting about in a sea of uncertainty, wondering if they will still be in business due to the rising notion that wholesale business is sure to become a thing of the past. This self-serving myth is often perpetuated by industry leaders who are using this current climate to gain market share. Their lack of belief in those who made them what they are is shameful and we will not abandon our business partners when they need our support the most. What’s alarming is that many of those companies, who are pushing brokers to become net branches, are in fact wholesalers themselves.

“Have we have lost sight of the spirit of the wholesale model?” Paul Rozo, president and chief executive officer of Paramount Residential Mortgage Group (PRMG) said, “I find this quite ironic to say the least! Many wholesalers are speaking from both sides of their mouth. Some of them are literally cannibalizing their own brokers by corralling them into their wholesale channels by playing off the broker’s fear-based notions, and ultimately leaving them no

choice but to become part of their own self-serving net branch platform with the intent of hedging their odds against a broker/wholesale collapse. This is not in the best interest of the broker, the consumers or even that of the industry, especially at a time when we need to support our brokers the most. Rozo continued, “I began my career as a broker, and have been disappointed over the last seven years by the lack of enforcement of the standards that I adhered to when I entered this profession. Have we have lost sight of what the entire spirit of the wholesale model is to begin with? It’s time the ‘professional’ broker reclaims their role within their communities, and as a wholesaler, we intend to help them do just this.”

“It’s time the ‘professional’ broker reclaims their role in their communities …” Paul Rozo’s passion for the broker is shared throughout his company team members and is the cornerstone of their foundation as an organization. It is part of their culture to serve and their belief in the broker and is shared by other prominent industry leaders as well. “I have spoken with some very high level capital partners on Wall Street and investors in the secondary market, as well as executives at other large institutions who agree that staying true to a business model, which is ‘broker centric,’ allows wholesalers the ability to maintain loyalty and gain new broker partners that few will be able to emulate.” Said Rozo. As wholesalers, we need to believe in our brokers and continue to support them. It is also important that we continue to provide educational resources which remain second to none. Commitment towards education and consumer outreach is paramount. As an example, PRMG demonstrates this in their funding of the Non-Profit HELP (Homeownership Education Learning Program) and

sales are dominating and Realtors are able to choose the very best professional lenders available, often they will turn to their local broker who has been part of their team for years. With net branching, the broker loses the ability to broker a loan outside of the company inhibiting them from offering the best combination of Choose to remain a broker! price and service to their customers. So what about the net branch model? In many cases, if a non-Federal Housing Administration While net branches have (FHA) loan is allowed to certainly helped the be brokered outside, the small broker expand their net branching company possibilities, this usually will charge a significant comes with a great price! fee, thus cutting into the This includes, surrenderbroker’s profitability. ing their broker’s license, Brick and motor offices loss of commissions, and have a significant cost loss of freedom to choose and the originator pays and work with multiple for these costs. Brokers lenders in selecting the who are accustomed to best loan programs and being the customer rates for their clients. often report being treatEssentially, the broker is “Many brokers are ed with contempt from virtually giving up their finding themselves their new “employers” identity, culture and busidrifting about in a when they demand ness autonomy to accept sea of uncertainty, excellence from those a rather so-called conwondering if they around them. trolled and structured will still be in busienvironment.

their ongoing efforts to reach out to the public with such partners as the California Department of Real Estate (DRE), local community colleges, HUD, the Internal Revenue Service (IRS), district attorneys and local governments who all believe that consumer outreach and education is vital to moving our economy forward.

We’ve all heard it … I can’t get anything done around here!”

ness due to the rising notion that wholesale business is sure to become a thing of the past.”

In today’s market climate, net branching is modeled to play on the fears of mortgage brokers to get them thinking that this is their only choice of survival outside of becoming an employee of a mega conglomerate national bank. And let’s face it, most of us know that big banks “bank” on their name and reputation and are generally not attentive to the needs of their loan officers who are trying to get that all important loan through the system. We’ve all heard it: “I can’t get anything done around here!” Nobody cares, nobody listens. The bank’s attitude is, “It’s our way or the highway.” When the market was controlled by real estate-owned (REO) inventory banks could intimidate Realtors into requiring that all offers had to come from a direct lender. Now that short

So, as a broker, you have to ask yourself … “Is it really worth jumping ship?”

We say, “No!” There are, in fact, wholesalers out there that will continue to stand behind mortgage brokers, wholesalers who believe that wholesale business will remain strong for years to come. That belief in maintaining long-term relationships by providing continued education and support to mortgage brokers, along with the best possible loan programs, service and technology in order to ensure they can succeed in today’s mortgage environment. Keep your identity; choose to remain a mortgage broker! Paul A. Lucido is national marketing director for Paramount Residential Mortgage Group (PRMG) in Corona, Calif. He may be reached by phone at (951) 547-6311, ext. 358 or e-mail

A View From the C-Suite Branch Development: Four “C” Tips From the “C” Suite By David Lykken

Tip #2: Consider the culture There are three key ingredients, the “4Ps,” that you should carefully examine before getting into a branch relationship … and these, like everything else I suggest, apply to both sides of the equation … the company with the branch expansion plans and the production team looking for a good home. O Products: This may come as a shock to you, but we are amazed by the number of times this most basic and obvious of considerations is being overlooked. The reason for this is that some wrongly assume that everyone in business today has the same basic product offerings. While this is generally true, don’t make the mistake of assuming something as basic as this, or as the saying goes, it will make an “ass out of you and me.” For companies considering bringing on a production group, make sure to get a report of their last 12 months’ fundings, itemized by product type. Production groups … don’t assume the company you

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O MAY 2010

The harsh “hindsight reality” that will hit you in the face if you make a mistake is this, “You don’t know what you don’t know!” We all have blind spots. Don’t be

O Friends and family: I don’t know about you, but some of my closest and most valued friends are those who tell me what I need to hear and not necessarily what I want to hear! This can be the result of being in denial or just having “blind spots.” Getting to an objective view point from those you trust is important. I have found this advice to be some of the best advice I have received … and best of all, it is the cheapest advice we can get for free! O An experienced consultant: Unlike friends and family, this advice comes at a cost. Yet, it can be some of the best money you every spent and save you hundreds of thousands of dollars in hard cost and even more in lost revenue opportunities as the result of time spent. We can always make back the money, but we can never regain the time lost which may prove more fatal than the loss of money. We don’t always have the time or money for a mulligan … a “do over” if you will. So, to help you “get it right” the first time and avoid those painful “whoops … why didn’t I see this?” kind of mistake, seek the advice of others!


Tip #1: Consider getting counsel

blindsided by your own blind spots! Here are some places to go for advice: O

Production is down and regulation is up. In response, companies hope to increase production via branch development and brokers are looking for a safe harbor from all of the new regulations. But how do you find the right fit? Read on and I will share four tips that will help your chances of getting it right the first time. Whenever I write my column, I try and think of some clever eye-catching title that will draw the reader. One such title was based on the well-known lyrics of an old song “Looking for love in all the wrong places!” It seemed appropriate when considering how some are going about the process of branch development. There are two obvious components in any “branch development” plan … the branch (the production folks) and the company (the funding folks)! Regardless of which side of the equation you are on, both have one common goal: Getting into the right relationships and avoiding the wrong relationships. If you are a company pursuing a branch development strategy, you would do well to follow the principle set forth by James Collins in his book, Good to Great, which is “Get the right people on your ‘bus,’ and get the right people off your ‘bus.’” The same principle works for a production group looking for “the right” company to join. You want to make sure you are “getting on the right ‘bus’ and avoiding the wrong ‘bus’… simple as that. But that can be a bit trickier for both than it would appear. If you doubt that, consider America’s high divorce rate. It would suggest that ‘just maybe’ we get enamored with all the wrong things when considering a long-term relationship. Why do you think we would be good at selecting the right business partnerships when we struggle as much as we do to find the right mate? We are a consulting firm that has extensive experience consulting to companies that have, or desire to have, a branch development plan as well as to production groups looking for the right home. Here is some free advice … three tips to be exact … that I would suggest you consider before entering into a branch relationship.

are considering joining offers the How many couples after a few months or years of marriage realize they may have products you sell. O Pricing: Most originators don’t miss been more “in lust” than “in love?” I would this one, but more companies than suggest that “lust” because it has a “greed factor” to it is way more we can count don’t blinding that “love” ever is. take the time to find And if we look back at most out how price sensitive failed relationships, whether the production group personal or professional, you are considering hindsight reveals a selfishhiring is. The best way ness (a “what’s in it for me” to find out is to again perspective more than a get, if at all possible, “what in this for us” perspecfunding reports of not tive) and lust (“I want this only the products, but relationship for me or my also the rates the procompany”) as the motivation duction group funded behind why we did somethe loans at and comthing. pare those prices to “There are two obviwhere you were at. ous components in any Tip #3: Consider O Personalities: Whether ‘branch development’ capital constraints it’s business or personplan … the branch This is probably the most al, everyone is on their (the production folks) overlooked important facbest behavior in the and the company (the tor a production group courtship phase of any funding folks)! should take into considerarelationship. As soon Regardless of which tion. If ever there was an as it has been deterarea where the saying, “You mined by both parties side of the equation don’t know what you don’t that there is potential you are on, both have know,” is truer, it is here. for a relationship, then one common goal: Capital is king if you are a the courtship phase Getting into the right higher producing group. If hits high gear and our relationships and you are a production group blind spots grow. avoiding the wrong that has the ability to fund O Pressure: As the old sayrelationships. ” a good amount of producing goes, “Haste makes tion each month, you really waste.” Too many deals are done too quickly because there’s a need to dig into the funding capacity of false sense that “We’ve got to get this whomever you are seriously considering done ‘yesterday’ so that we don’t lose going to work for. There is nothing worse this opportunity.” When rushed, than finding yourself in a company that things “below the surface” or blind maxes out their funding ability. spots, don’t have time to become evident and obvious. There are deals Tip #4: Consider character done in haste that blow up that other- If there has been anything we have learned from this last business cycle it is that “charwise didn’t need to blow up. acter matters!” Even if you get good counThe first two may seem like no-brainers, sel that covers the business aspects of the but you would be amazed at how many deal, and if you like the culture of the comfolks overlook the obvious, especially if the pany, and even if you verify that they have courtship phase gets “hot and heated” and continued on page 38 we rush into a relationship prematurely.


plenty of capital, you would do well to make sure they have the kind of character and values that align with yours. Failing this important assessment can lead to frustration in the relationship and even to failure. What is most interesting about assessing character is that it can be the most difficult thing to do. Why? In a word, it is “posing.” Posing is something that we all have a tendency to do to some degree when we are getting to know someone for the first time. Basically, posing is when someone tries to project something about themselves or their company. This is relatively common when people are considering getting into a relationship. Where this becomes a negative is if the intent is an attempt to mislead or even deceive someone about themselves, which drives home the point that assessing character takes effort and a plan. This, in itself, could constitute a whole article if I were to outline ways and tips for making a character assessment, but for the sake of time, I want to simply make sure that you consider and evaluate this critical assessment and make sure there is adequate alignment so as to not impede, inhibit or cause the relationship to fail down the road. After reading this article, I welcome hearing from you and receiving your

feedback. To leave me feedback, please e-mail Also, I would encourage you to tune into my weekly radio program, “Lykken on Lending,” each Monday at 10:00 a.m. Pacific, 11:00 a.m. Mountain, Noon Central or 1:00 p.m. Eastern. To listen, log on to David Lykken is president, mortgage strategies and managing partner with Mortgage Banking Solutions. David has more than 35 years of industry experience and has garnered a national reputation. David 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, log on to and type in “Lykken on Lending” in the “Search” box on the right-hand side of the page.

MAY 2010 O



Branch Development: Steer Clear of Risks and Focus on the Finish Line


By Joe Ramis

Branch development is a bit like Indy Car do to build their business and grow their racing—lots of fun and full networks? Here are some of twists, turns and chalsuggestions based on my lenges. Like Danica Patrick, personal experience and Michael Andretti or Al Unser that of my firm, Inlanta Jr., successfully navigating Mortgage, which has 25 the competitive course and branch offices nationbuilding a viable network of wide and is always lookbranches requires strong ing for more: planning, laser-like precision and nerves of steel. Run the course The best branch developWeather, track conditions ers, those who consistently and the like can conadd new talent, look at tribute to a driver’s suc“In this difficult and recruitment much the way cess or spinout. Similarly, Chip Ganassi Racing or Team changing environment, knowing the mortgage a branch partnership Penske view their operalandscape is essential if can provide you with tions—as team efforts you want to grow your many of the benefits requiring strong knowledge network. The environenjoyed by mortgage of the myriad rules and regment has changed over ulations that impact our bankers—without havthe last several months. ing to invest the time business, the latest technolMy company has been ogy, and of course, the abili- and money necessary to telling clients there are ty to communicate regularly develop and manage a still tax credits available and meaningfully. for homebuyers, the rates full-service operation.” are still historically low. Tips to rev up your business Bottom line … this is a great time to get So, what should mortgage professionals out and buy!

To keep from spinning your wheels, you have to go out and develop your business That means becoming an expert in the mortgage industry, learning the rules and regulations, being a true resource to your clients, and helping to steer them in the right direction. Those are keys for winning. Know where the bumps are Just as Indy drivers familiarize themselves with the tracks at Watkins Glen, St. Petersburg or Long Beach, mortgage professionals must know the ins and outs of regulations and regulatory changes. While “knowledge is strength” may sound cliché, it’s true: The more you know, the more you’re seen as a “go-to” person. A couple of recent regulations illustrate this. One is the Home Valuation Code of Conduct (HVCC). As you are aware, HVCC establishes standards for solicitation, selection, compensation, conflicts of interest and appraiser independence. Since taking effect on May 1, 2009, it has had a dramatic impact on conventional, single-family mortgages sold to Fannie Mae or Freddie Mac. Under HVCC, real estate professionals and mortgage brokers are prohibited from selecting appraisers. Lenders may use “in house” staff appraisers to conduct appraisals, but the loan production staff is prohibited from selecting, retaining, recommending or influencing the selection of an appraiser; and conducting any substantive conversation with an appraiser or appraisal management company regarding the appraisal assignment. For consumers, the appraisal process has remained largely intact. However, they may find the process takes longer and may be more costly than in the past. For appraisers and mortgage firms, it’s a different story. Some appraisers now earn less money and many mortgage firms have had to change the way they interact with appraisers or risk not being in compliance with HVCC rules. Another regulatory change that has raised yellow caution flags among loan originators and independent brokers is one involving Good Faith Estimates (GFEs). Lenders are required by the federal Real Estate Settlement Procedures Act (RESPA) to provide you with a GFE of the fees due at closing. The GFE is supposed to be provided to the potential buyer within three days of applying for a loan. Smart shoppers obtain GFEs from two or more lenders, compare their costs and ask questions about any large discrepancies. According to a February article in The Washington Post, “if the quotes are made on a GFE, they’ve got to be accurate because, under new federal rules that took effect Jan. 1, any significant excesses must come out of the lender’s wallet at settlement.” Clearly, knowing

those rules and what they mean to you as a lender can be a matter of survival in today’s complex and highly competitive mortgage industry.

Consider expanding your pit crew The HVCC and GFEs are only two of the new regulations that have caused confusion among many mortgage professionals. That’s why it is important to keep your finger on the pulse of the industry and stay on top of rule changes. It’s also why you may want to consider entering into a branch partnership. After all, the best drivers not only have a vision for where they’re going, they also have a qualified crew to back them up and keep them running at full speed. In this difficult and changing environment, a branch partnership can provide you with many of the benefits enjoyed by mortgage bankers—without having to invest the time and money necessary to develop and manage a full-service operation. Such benefits include lower overhead, administrative support, licensing in additional states, the ability to write other types of loans, and more. But, branch partnerships aren’t for everyone. So, as you look at potential business partners with an eye toward choosing the best pit crew possible, be sure to ask the following questions: Do they have a banking division? A partnership with a mortgage banker will give you more options; you’ll have the choice of closing loans within your own company or brokering them outside. How much administrative support will you receive? Many of your everyday functions should be taken over by your branch partner, including payroll, marketing, information technology, human resources, processing and compliance. This will enable you to focus on originating loans. Too many branch partners, however, can result in less-than-effective service, so it’s important to find out how many branch offices your prospective partner has. Are there compliance experts on staff? The right partner will have the procedures in place to provide background checks, brand and loan officer licensing, file reviews, and loan audits, as well as ensure that your promotional materials are compliant. Such procedures also ensure the compliance of your other branch partners—an important benefit since their actions can reflect on you. What products and services do they offer? Your partner should enable you to provide a variety of options, such as Federal Housing Administration (FHA), U.S.

Department of Veteran’s Affairs (VA), U.S. Department of Agriculture and Rural Development; and 203k loans; reverse mortgages; and more. In addition, a good partner will also provide training so you can quickly get up to speed on products that are new to you. How long have they been in business and what is their reputation? Once you enter into a partnership, your partner’s reputation reflects on you. That’s why it is crucial to find out how your prospective partner is viewed both locally and within the industry. It’s also important to find out whether they ever been suspended or fined by the U.S. Department of Housing & Urban Development (HUD). Generally, the longer a company has been in business, the more stable it is. It also will have a longer track record, which will help your decision-making process. Do they offer multistate licensing? A business partner that is licensed in multiple states can enable you to expand your business and close loans on out-of-state prospects instead of turning them away. Are they committed to technology? The demand for information just continues to grow. It is important to have a partner that embraces technology so you are able to price loans quickly and accurately, register and lock loans online, and monitor the pipeline regardless of time of day.

What is their ideal branch set-up and is this a good match for you? The reality of a branch partnership is that you are choosing your own boss and coworkers. So it’s imperative that you meet with recruiters in person and visit the corporate office. Discuss both your future plans and theirs to make sure you’re headed in the same direction. Take a look at the most productive offices in your prospective partner’s organization and compare it to how you operate. If you work differently than they do, discuss those differences beforehand to ensure you won’t have conflicts later. Finally, put the details in writing so that everyone involved moves forward on the same page.

Keep your foot on the pedal, eyes on the road Whether you’re developing a branch network or looking to become a branch partner, the process, at times, can be as challenging as driving 500 miles at Indianapolis. There are no shortcuts to success. But with vision, focus, drive and, like any good Indy driver, the ability to anticipate changes and change gears when necessary, you’ll find yourself in the position for the checkered flag and that much anticipated victory lap. Joe Ramis is branch recruitment director for Inlanta Mortgage, a Waukesha, Wis.-based mortgage banker and broker since 1993. He may be reached by phone at (262) 513-9853 or e-mail

By Mark Buskuhl

a quick way to get rich … hire some loan officers, make a few hundred dollars off each loan or a flat fee per month and retire in a couple of years. If only it were so easy. There are going to be some tough lessons learned in the not-too-distant future.

Regulations abound

Gateway Mortgage Group is seeking more leaders to run a retail branch office. Qualified Candidates with a proven track record will get: • Guaranteed Salary • Full Benefits Package • Bonus based on profitability of branch office. • Assistance with recruiting and training team.

Call Dane Basham today 888-544-0034 “If I was in the market to become a branch manager or work as a loan officer, Dane would be on the short list of friends I would contact. His positive attitude is infectious. You cannot have a conversation with Dane and NOT be motivated.” November 28, 2006 Andrew Berman, Executive Vice President, The Mortgage Press was a consultant or contractor to Dane at Gateway Mortgage Group LLC

O MAY 2010

Both federal and state regulators have made, and are likely to continue making, drastic changes to the industry. These changes are not going to make your job any easier. Staying abreast of these changes is a monumental task and requires a heavy emphasis on compliance; something a good branch company should always do for you. To make matters even more challenging, state laws often contradict federal laws. The U.S. Department of Housing & Urban

All of the liability is placed on the company who enters into the agreement, not the loan officer who originates the loan. These agreements have become much stricter in recent years, with some even attempting to pass all of the liability onto the origi… hire some loan nating lender. The repreEveryone lacks officers, make a few sentation and warranty experience at hundred dollars off clauses often require guareach loan or a flat fee one time in their antees beyond loan offilife or another per month and retire cers or the originating Right now, many of the lender’s control. The cost in a couple of years. If companies offering branch for indemnity or loan only it were so easy.” arrangements are just getrepurchase can add up to ting their feet wet with the very sizeable amounts quickly. Couple business model. Sure, they may have this with loans that must be sold, scratch plenty of experience in mortgage lending, and dent for pennies on the dollar, perhaps as a wholesale lender, but wholebecause they failed to meet a particular sale lending is nothing like a retail mortguideline or because a borrower’s cir- gage branch company. An independent cumstances change after funding, and mortgage banker or broker who is looking you have a financial exposure that some to expand may have experience with a could not handle. handful of loan officers at their location, but what happens when some of the conStaffing the branch trol is lost to an offsite office? Federal An often overlooked component of a banking agency-regulated institutions successful mortgage branch company is offer the benefit of skipping the the commitment and passion of the Nationwide Mortgage Licensing System corporate staff, which is critical to assist continued on page 40 the branches. The dynamics between


Mortgage retail branch opportunities are sprouting up like mushrooms after heavy rains. Everyone, from independent mortgage brokers to federally-chartered banks to wholesale lenders, wants to get in on the action. These types of arrangements are often referred to by different names, branch partnerships or affiliate branches, being two of the more popular terms. A few companies are still referring to themselves as a “net branch,” now considered a dirty word thanks to some poorly-operated companies that have given the term a negative meaning. Perhaps there are so many terms currently in use because no new universal term has yet to be coined. A mortgage branch company is not an easy business to manage or operate. To some, opening a branch sounds like

Have you ever read a correspondent or broker agreement?

the corporate staff and loan officers is uniquely personal. Excellent customer service requires specialized professionals with a broad understanding of the mortgage business. Branches depend on this vital link to the corporate office in order to succeed. When the branches succeed, the company succeeds. The staffing and infrastructure requirements for a branch company are extensive. There are plenty of loan origination software systems and back-office software systems to handle underwriting, secondary, closing, funding and other tasks, but systems that manage employees, licenses and the unique “To some, opening a compensation model in branch sounds like a the branching world, are quick way to get rich extremely limited. O

Mortgage Branching in a Changing Industry

Development (HUD) permits a non-traditional branch office to be, “located in a non-commercial space, but it must have adequate office space and must comply with the local government use requirements” (HUD Handbook 4060.1, Chapter 2-11.C.1.). While HUD may permit a home-based branch office, several states require a commercial location.


(NMLS) test and required education, but they bring about stricter oversight from their own set of regulators and will mimic more of a traditional employer/employee relationship, which can be contradictory to the loan originator entrepreneurial spirit. The federal banking agency-regulated institutions are also attracting those who can not pass the NMLS-required background check or test, potentially drawing a crowd that may be questioned.

Do your research When looking at mortgage branch companies, there is a lot of research that needs to be done. Loan officers are being bombarded with opportunities to join a branch company. Solicitations are coming from wholesale account executives that are being required to, not only establish and maintain relationships with mortgage brokers and loans officers, but to now actually recruit and manage them as employees. E-mail blasts and Web sites claim misleading information about production, capabilities and costs. The decision to join a branch company should be a well thought out business decision; it should not be an emotional decision or one that was a result of a great sales pitch. Take the time to do your homework now and you will be rewarded later.

MAY 2010 O



Evaluate experience


When interviewing branch companies, ask them how long they have operated branch offices and how many offices they currently have. Experience counts, unless you want to be a guinea pig. This information can be validated through HUD’s Single-Family Neighborhood Watch Early Warning System (NW). If you do not have access to this information, ask the branch company to provide a printout for you. Not only will NW list all of the company’s active branch locations and the date each was authorized, the system is the only reliable and accurate source for production data and loan performance. Like borrowers, branch companies often speak higher of themselves than what the numbers may show. NW reports the most recent 24month’s production data for all Federal Housing Administration (FHA)-insured loans, as well as the compare ratio, which tracks defaults to that of the national average or other specified geographic areas. There are two reasons why this is very important: the first is to validate a company’s production. If they claim to be the world’s largest branch company or that they pay out over a million dollars a day in commissions, yet the data only reports 1,200 FHA loans in the past 24 months, you know something may be a little fishy. Secondly, and most importantly, is the compare ratio. A compare ratio of 100 percent means the company’s loans default at the exact same rate as the national aver-

age. At 200 percent, the defaults double national average and the game is about over; the days are numbered before HUD revokes approval.

Establishing the Branch Relationship By Shawn Sirko and Tina Jablonski

You may be in the process of making one Ask for the corporate contact list now, not after of the biggest decisions of your professional life—determining whether or not to you have been hired Look for a company that is staffed accordingly for its size and also look at job titles. The corporate office should not only include common back office positions such as, underwriters and closers, but should also include IT, compliance, payroll and support staff who are dedicated to supporting the branch offices with anything and everything, not just underwriting or closing coordinators in disguise as support.

Banker or broker?

be a plus considering lender turn times. However, if the corporate office is Full Eagle and underwrites the file, you have no option if it’s declined. Whereas, some companies may not have a Full Eagle, but utilize lenders as authorized agents to underwrite on their behalf. This provides an opportunity to revive an FHA loan with another lender if you strongly disagree with the initial underwriting decision and have the ability to change it.

establish a branch affiliate relationship. During the last several years, more firms have considered such an option. Some are interested in developing Federal Housing Administration (FHA) business without having to pay the fees and provide audited financials. Others cite a desire to have the correspondent ability, in-house underwriting, the opportunity to work with a larger company that can leverage relationships and obtain better pricing, reduced accounting/payroll and human resources responsiShawn Sirko bilities, and access to multiple states without the expense of the required licenses. Your success in finding the ideal branch affiliate partner will largely depend on the thoroughness of your research. The following are guidelines to help you select one whose model best suits your sales team and customer base.

The choice should not be made now, but on each and every loan. No company can O Compensation plans: be everything to every borrower on every This is at the top of the list loan. We all want the very best pricing, for many firms. Some cominstant service, and every program availpensation plans are per fileable, but the reality is no company can or based flat fee, while others has ever offered this. Is there a wholesale are tied to basis points, and lender you have worked with that can do some build in an extra marthis? No. Look for a company that offers a gin, which can impact your good balance among pricing, products competitive position in the and service, but keep your options open market. You‘ll find those to broker loans too. “First right of refusal” that will cover expenses and is not a policy put in place for your beneoverhead; however, the fit. A branch company that allows you to commission split will be choose on each and every loan, whether lower. That’s fine if you’re you want to bank it in-house or broker it not a risk-taker and want to to their expansive lender list, is forced to make a good income by compete for your business. Loan officers working the minimum 40want to close loans quickly, close all of hour week. If you are truly the loans they come across, and get paid Key entrepreneurial and seek a Tina Jablonski well for their work. Keeping your options considerations higher income, you’ll need open to both bank and broker your loans The first step is to determine the most to assume greater risk and responsibilimportant factors involved in a branch is the key to maximizing your success. ity, and make a more substantial peraffiliate relationship. For example, they sonal investment in overhead and The right branch company will allow will include: related expenses. In doing so, you will you to originate more loans and put definitely be entitled to higher splits. more money in your pocket. By off-load- O Company size/growth: Size can make In addition, investigate whether you a difference. Some companies have ing all of the back office functions and are strictly limited to using in-house 200 branches and others have 12. You associated costs and liability, your time underwriting services and a corporatemay find the one with fewer branches is freed up to work on the tasks that genly published rate sheet, which probais more selective than the larger opererate income for you—originating and bly contains built-in margins that can ation. The 12-branch company may closing loans and/or managing a team of impact your competitive position. give you more direct attention and loan officers. In order for this to work to take a greater interest in your success O Broker/correspondent options: There your benefit, all of the other elements than the one with 200 branches. must be in place. You must align yourare distinct advantages to being either There probably will be a more familyself with a branch company that has the a broker or correspondent. It’s always type culture and attitude as well. You experience in operating branch offices, a good to have options, so don’t limit also want to know if the branch affilicompany that has been around and will yourself to one business channel. If ate prospects are growing and on the be here in the future, so your paychecks warehouse lines become an issue, you incline or downsizing, which is a typiare good and on time. want the ability to broker. If the wholecal sign of decline. Another critical sale/broker channel continues to sufindicator is total annual production, Mark Buskuhl is chief operating officer fer, you will want strong correspondent as you want to be associated with a of Texas-based Southwest Funding LP, relationships and sufficient liquidity top performing organization. one of the longest operating and most on those warehouse lines. successful mortgage branch providers. He may be reached by phone at (877)- O FHA lending process: If you’re inter- O Management style: Management styles ested in FHA business (and you 878-8989, e-mail mbuskuhl@southwestvary greatly and can have a major influshould be), this is critical. Do they or visit www.branchsouthence on your working relationships. You underwrite FHA in-house? That may may chafe under a very structured sys-

tem and welcome a more entrepreneurial approach that offers freer rein. Some people need more structure to be successful, while others thrive when left alone, as long as they maintain high volume. It’s also wise to know about the management and operations team. For example, if the principal leaders have not originated loans themselves, they won’t be familiar with what you’re dealing with on a daily basis. Everyone in our company, Gold Star Mortgage Financial Group, including the chief executive officer, has a strong origination background. The company was created by salespeople for salespeople. You should also confirm how accessible top management is. Our chief executive officer encourages an open door policy. O Margins: If you operate on thin margins and are more of a high volume discount mortgage operation, you need to be aware of pricing when searching for a branch affiliate relationship. You may not be comfortable with a company that builds in additional margin or charges 0.250.375 per file. FHA yield spread premiums (YSPs) obviously provide more room to pay such a fee to the house, but that could be unappealing if you are a 75 percent conventional refinance-based organization.

Shawn Sirko and Tina Jablonski are vice presidents of business development at Ann Arbor, Mich.-based Gold Star Mortgage Financial Group. They may be reached by e-mail at or call (800) 201-LOAN.

Review process In addition to information on the above areas that you obtain from phone conversations, Web sites, brochures and other sources, the following are a few effective ways to ensure you’re getting both objective and subjective insights: O A simple Internet search will reveal if there has been positive and negative publicity about the company. Are there any employee or customer complaints? O You’ll get some useful information by mystery shopping. We constantly mystery shop our competition for retail and branch development because it generates valuable data about how other companies operate. See how the branch affiliate organizations respond to a series of questions. O Ask to contact employees at other company branches to get the real “story.” Query them for their honest assessment of the organization. You can always “read between the lines.” Also, consider how long the branches have operated and the length of employment for branch managers and top originators.


Full Service QC/QA


Contract Underwriting


Default Reviews


Loan Imaging Storage


HVCC Reporting


Software Lease/Purchase


IRS & SSA Reports


Modification Reviews 800-939-5383

United Northern is Seeking Highly Qualified, Experienced Mortgage Professionals To Grow as We Grow • Operations Manager • Production Manager • Senior Underwriter • Virtual Mortgage Loan Officers (VMLOs)

O Of course, you must visit your potential employer before making a decision. You want to get a feel for the energy in an office and how the people interact. This will also give you a better understanding of the company culture. Make sure to meet the upper management team and others involved in affiliate relations. When interviewing with a potential branch affiliate network, don’t exaggerate about your production and abilities. You don’t want the company to have unrealistic expectations, but rather, have an accurate view of your potential so that you can establish a solid foundation. Also, you will want to review a copy of the contract to confirm your responsibilities, the company’s guarantees and other essentials. O Don’t forget that throughout your due diligence process, the companies you talk to will be researching you. They

• In-House Mortgage Loan Officers (MLOs) • Team Leaders/Sales Managers

Visit UnitedNorthern.Jobs, email info@UnitedNorthern.Jobs or call (888) 600-8808 ext 1. United Northern Mortgage Bankers, Ltd. Corporate NMLS ID# 7230 New York State Banking Dept. - Licensed Mortgage Banker – License #100724 New Jersey Dept. of Banking and Insurance – Mortgage Lender – License #L0046623 Pennsylvania Dept. of Banking – Mortgage Lender – License #20887 Connecticut Dept. of Banking - Mortgage Lender - License #20372 Massachusetts Div. of Banks and Loan Agencies - Mortgage Lender & Mortgage Broker – License #MC5070 North Carolina Commissioner of Banks – Mortgage Lender – License #L140365 South Carolina State Board of Financial Institutions – Supervised Lender – License #S7,461 Florida Dept. of Financial Institutions - Mortgage Lender - License #ML0700679 Senior Security Home Advantage is a lending area of United Northern Mortgage Bankers, Ltd. Direct FHA Endorsed Lender

O MAY 2010

O Support services: You want to be certain the company provides excellent support. Is there a compliance department? There should be a thorough orientation to learn systems, meet management and sales staff, and schedule follow-up sessions. Their service menu should also include advanced technol-

Certainly, there are other actions you can take to help select the best possible branch affiliate organization. Your priority should

be to do research the candidates, ask the tough questions, be satisfied with the answers and then do everything possible to make the relationship succeed long-term.


O Diversification: Forward-thinking firms are interested in diversifying their business beyond the residential mortgage base. Do you want to originate reverse mortgage loans or commercial loans, sell life or health insurance, annuities or credit repair services? Adding these product offerings to a core business can significantly expand your revenue streams, as well as bolster your loan closing capability. Offering additional products and services can enhance your long-term client relationships.

O Fee structure: You need to know about all fees, including accounting, payroll, technology, management and other. How often does the corporate entity charge these?

will call their industry partners, wholesale reps, title companies, and others. They will Google search you. Make sure if you are doing social networking for business or personal reasons—using LinkedIn, MySpace or Facebook—that you are representing yourself well. O

O State licensed: If your plans include operating in other states, then you’ll be concerned about where potential branch affiliate partners are licensed. You will need to be licensed in those states and know the type of resources available to help your staff get licensed there. For example, we are willing to get licensed in a state if it’s a good fit and the right prospective company to joins us.

ogy, training and back-up. Leads likely are an integral part of your marketing mix, so confirm the company has a track record of providing and effectively using leads. Is there an ongoing marketing/advertising campaign to help promote the organization as well as the branches?


Who’s Hiring Report for Mortgage Professionals Branch Opportunities

Branch Opportunities

Guaranteed Home Mortgage Company, Inc. 108 Corporate Park Drive, Ste 301 White Plains, NY 10604 CEO: David A. Wind Key Contact: Louis Tesoriero 108 Corporate Park Drive Ste 301 White Plains, NY 10604 888-329-GHMC

Teamwork. Stability. Success. 18 year old National mortgage lender looking for existing branches to join Guaranteed. Our diverse investor list, FHA/VA/Conv direct lending capabilities, and rapid processing ensure a profitable environment. In addition, we have an award winning and innovative management team and unparalleled client and employee satisfaction.

Shore Financial Services Inc. 770 S. Adams Birmingham, MI 48003 Key Contact: Kristina Leszczynski 770 S. Adams Birmingham, MI 48003 (866) 903-8953 ext. 5505

Get access to hot leads and predicative dialing. Take your business to the next level with inhouse underwriting (48 hour Turntime). Monthly minimum volume is required. Health, Dental, 401k available.

Locations: AL, AZ, AR, CA, CO, CT, DE, FL, GA, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MO, MS, NE, NH, NM, ND, NC, OH, OK, OR, RI, SC, TN, TX, UT, VA, WA, WI, WY.

Branch Opportunities

Loan Officer Programs

Inlanta Mortgage W229 N1433 Westwood Drive, Suite 105 Waukesha, WI 53186 CEO: Jean Badciong Key Contact: Joe Ramis – Branch Recruitment Director W229 N1433 Westwood Drive Suite 105 Waukesha, WI 53186 262-436-1278

With Inlanta Mortgage, you’ll close loans faster and more frequently, while enjoying comprehensive support. Our efficient and accurate services make it easy for you to do what you do best – originate. From FHA loans to in-house funding and underwriting, as a mortgage banker, we have the versatility and expertise you need. Locations: We are currently seeking qualified candidates in: Florida, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, North Dakota, and Wisconsin!

MAY 2010 O



Branch Opportunities


ACC Mortgage, Inc.

President/CEO: Robert M. Senko Contact: Robert M. Senko 932 Hungerford Drive #6 Rockville, MD 20850 240-314-0399 ext 11

Key Contact: Tom Maykowski Director of Operations (877) 308-4117 ext. 335

As a Conventional and FHA Full Eagle lender iSRL can assist you in building your business within a much larger business that providing you with the needed stability which is so often missing today. With the Senior Management’s commitment combined with many long-standing and loyal relationships that have been built and nurtured over many years iSRL and our Branch Partners are in a position to take advantage of the many lending opportunities that are evolving today. Locations: TX, OK, LA: David Walden 1-214-878-6300. Southeast & East Coast: Ken Michael 1-931-222-8023 CA, OR, WA, NV: Allen Friedman 1-415-298-2500 UT, CO, ID, WY, MT: Tony Moore 1-801-824-7243

Key Contact: Blanche Harrison Fax: 714-822-3222

Key Contact: Len Ramirez Vice President 631-580-2600

Locations: AL, CA, CT, FL, GA, HI, MA, MD, MS, NC, NJ, NY, OK, PA, SC, TN, VA, VT,

National Title Company seeking an experienced sales person to sell loan origination and default products to lenders and loan servicers on a nationwide basis. The successful applicant must be willing to travel, have 5 years of sales experience, and an understanding of title and closing services. Company is nationally recognized as a premier provider of title and closing services with an outstanding reputation. Competitive salary, commission schedule and benefits. Locations: Nationwide


Mortgage Concepts 4170 Veterans Memorial Highway, Suite 201 Bohemia, NY 11716 Mortgage Concepts is hiring experienced Loan Officers and Branch Managers. We are a multi-state licensed FHA DIRECT LENDER with branches throughout the country. The Branch Manager is responsible for the daily operations of their branch, including but not limited to establishment and recruitment. Proactively meets established loan quality and production goals. Exceptional service is required through knowledge of programs, policies, procedures and professional ethics.

Locations: MD, DC, VA, DE, FL.

Orange Coast Title Company 640 N. Tustin Avenue Santa Ana, CA 92705

Branch Opportunities

CEO: Steven A. Milner

We are searching for smart, experienced and self motivated loan officers who want to keep 100% of the origination income on Hard/Private Money loans. Must have NMLS approval. Some leads provided. We have the money, can you find the loans?

Loan Officer Programs

iServe Residential Lending, LLC 13520 Evening Creek Drive North, Suite 400 San Diego, CA 92128. CEO: Gary Willis

Shore Financial Services is a Direct Endorsed Lender founded over 25 years ago. We’re offering Loan Officers and Branches an opportunity to make 100% commission (YSP Not required to be disclosed!) and opportunity to grow in up to 40 States. We offer a Low Flat Monthly Fee, National Licensing Support, Full Service Marketing Team, your own Underwriting Team U/W in 48 hours or LESS, Virtual Origination Software, Mortgage Returns, Flexible Payroll, BCBS & 401k. Shore Financial Services, Inc., NMLS #3038.

CreditAbility Credit Restoration Hiawatha, IA

CEO: Andrew Yamilkoski Key Contact: Sam Parker 2205 Blairs Ferry Crossing Ste B Hiawatha, IA 52213 Work: 319-373-2822 Cell: 319-560-5999

CreditAbility Credit Restoration is expanding to California! We need motivated and successful Account Executives. CreditAbility's AEs receive generous commission structures which can easily result in a SIX figure income. With some of the lowest fees and fastest turnaround times your pipelines will grow exponentially. As one of the only companies that charges NO UPFRONT FEES, we make it easy for our AEs to set themselves apart from the competition. Don't miss this opportunity, call today! Location: CA

Who’s Hiring Report for Mortgage Professionals Services Quality Mortgage Services, LLC 1111 Lakeview Drive Franklin, TN 37067 CEO: Thomas Duncan Key Contact: Michael S. Richardson Quality Mortgage Services, LLC 1111 Lakeview Drive Franklin, TN 37067 888-877-7951

Quality Control Auditors-Hiring immediately Our steady growth affords the opportunity to bring on-board qualified Quality Assurance Auditors with experiences in Underwriting, mortgage operations and quality control. We look for qualified personnel whose knowledge base takes them beyond a check list method need to apply because we prefer auditors who know how to analyze in depth and detect fraud. We accept remote applicants and telecommuters. For consideration on please reply to this posting and submit your resume: Locations: Nationwide





Plus Postage & Handling

Wholesale Channels New Line Mortgage 5241 S. State Street Salt Lake City, UT 84107 CEO: Scott Leishman

New Line Mortgage, wholesale lender for 27 years, is seeking motivated Account Executives with a proven track record to join our successful team! Our reputation as a prominent mortgage banking firm is built on years of experience and rock solid financial strength. Top FHA/VA lender with expanded product menu, aggressive commissions, pricing and excellent technology will help you and your brokers close more loans! Benefits.

Key Contact: Shauna Reimann Vice President Wholesale Production 800-979-4494 x 147

Locations: AZ, CA, CO, ID, MT, NM, NV, OR, TX, UT, WA

Wholesale Channels Real Estate Mortgage Network Wholesale

Key Contact: Joe Amoroso 499 Thornall Street Edison, NJ 08837 866-933-6342

Locations: Positions available in CT, SC, NC, LA, TX, AZ, CO, CA, OR, IL, OH and other areas.

continued from page 35

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.

“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

O MAY 2010

tion; perform occupancy checks; and provide property preservation services, if necessary. Additionally, LPS can coordinate short sale offer reviews to provide guidance on whether the offers are in line with local market values and appropriate for the servicer’s objectives. Finally, LPS can either manage the entire closing process for short sale offers that are accepted, or support servicers with property auction and deed-in-lieu services to expand the choices available to help clients and their borrowers conclude their transactions. For more information, visit

“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


new to market

Wholesale Account Executives – Experienced in FHA, VA and Conforming loan products. A great opportunity for great Account Executives.

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 O

CEO: Peter Norden

Think Reverse! Table of Contents


To submit your entry for inclusion in the National Mortgage Professional Calendar of Events, please e-mail the details of your event, along with contact information, to MAY 2010 Sunday-Wednesday, May 23-26 Mortgage Bankers Association Commercial/Multifamily Servicing and Technology Conference 2010 Sheraton New York Hotel & Towers 811 7th Avenue • New York, N.Y. For more information, call (202) 557-2790 or visit

MAY 2010 O


Abacus Mortgage Training and Education .......... ......................................4 & 30 ACC Mortgage .................................................. ....................................32 Calyx Software ................................................ ........................................16 Comergence Compliance Monitoring, LLC .......... ....................23 Credit Mastery Event ........................................ ..............................35 Emigrant Mortgage Company ............................ ................................32 Entitle Direct Group.......................................... ..................Inside Front Cover First Source Capital Mortgage, Inc. .................... ..........................................15 Flagstar Wholesale Lending .............................. ......................Back Cover Franklin First Financial .................................... ..............................................28 Freedom Mortgage .......................................... ......................Inside Back Cover Frost Mortgage Banking Group .......................... ........................................21 Gateway Mortgage Group, LLC .......................... ........................................39 Guaranteed Home Mortgage.............................. ....................................25 HTDI Financial ................................................ ....................26 Inlanta Mortgage.............................................. ................................................17 iServe Residential Lending, LLC ........................ ..................................19 Mortgage Concepts .......................................... ........................16 ..................................43 NAMB.............................................................. ....................................MT2, 22 & 32 NAPMW .......................................................... ....................................................8 Orange Coast Title Company.............................. ..................................................37 Platinum Credit Services, Inc............................. ............5, 7, 9 & 11 Presidents First Mortgage Bankers .................... ......................................31 Quality Mortgage Services ................................ ..................................27 & 41 REMN (Real Estate Mortgage Network)................ ....................................29 Ridgewood Savings Bank .................................. ....................................20 Shore Financial Services, Inc. ........................................................................................................33 Titan Lists........................................................ ..............................................13 United Northern Mortgage Bankers Ltd. ............ ............................ 14 & 41 Xetus Mortgage Corporation.............................. ....................................................13

JULY 2010 Wednesday-Saturday, July 7-10 Florida Association of Mortgage Professionals 50th Anniversary Annual Convention & Trade Show “From FAMB to FAMP … 50 Golden Years” Rosen Shingle Creek 9939 Universal Boulevard Orlando For more information, call (850) 9426411 or visit Wednesday, July 14 “Let’s Make a Deal” Tri-State Wholesale Lending Fair Trump Taj Mahal Casino Resort 1000 Boardwalk Atlantic City, N.J. For more information, call (973) 3797447 or visit AUGUST 2010 Wednesday-Friday, August 18-20 California Association of Mortgage Brokers 2010 Annual Convention & Grand Exposition Hyatt Regency Long Beach 200 South Pine Avenue Long Beach Convention Center 300 East Ocean Boulevard Long Beach, Calif. For more information, call (916) 448-8236 or visit SEPTEMBER 2010 Thursday, September 16 Iowa Association of Mortgage Brokers 2010 Annual Convention White Oak Vineyards 15065 Northeast White Oak Drive Cambridge, Iowa For more information, call (515) 210-4675 or visit

OCTOBER 2010 Thursday-Friday, October 14-15 Kentucky Association of Mortgage Professionals 2010 Annual Convention Location to be determined For more information, call (270) 9292836 or visit Tuesday-Wednesday, October 19-20 Utah Association of Mortgage Brokers 2010 Annual Expo Location to be determined For more information, call (801) 787-6611 or visit Sunday-Wednesday, October 24-27 Mortgage Bankers Association 97th Annual Convention & Expo Atlanta Georgia Congress Center 285 Andrew Young International Boulevard NW • Atlanta For more information, call (800) 793-6222 or visit NOVEMBER 2010 Monday-Wednesday, November 8-10 Mortgage Bankers of Pennsylvania Conference Wyndham-Conference Center 95 Presidential Circle Gettysburg, Pa. For more information, call (973) 3797447 or visit APRIL 2011 Sunday-Wednesday, April 3-6 2011 National Association of Mortgage Brokers 2011 Legislative & Regulatory Conference Hyatt Regency Washington on Capitol Hill 400 New Jersey Avenue NW Washington, D.C. For more information, call (703) 3425900 or visit






Thursday-Friday, June 24-25 National Association of Mortgage Brokers 2010 Mid-Year Meeting Phoenix Airport Marriott 1101 North 44th Street Phoenix, Ariz. For more information, call (703) 342-5900 or visit

Monday-Tuesday, September 21-22 Illinois Association of Mortgage Professionals 21st Annual Fall Conference Location to be determined For more information, call (630) 9167720 or visit





Sunday-Wednesday, May 23-26 Mortgage Bankers Association National Secondary Market Conference & Expo 2010 Hilton New York 1335 Avenue of the Americas New York, N.Y. For more information, call (202) 557-2790 or visit

Monday-Wednesday, June 14-16 CRE Finance Council 2010 Annual Convention The Waldorf-Astoria 301 Park Avenue (50th Street) New York, N.Y. For more information, call (212) 509-1844 or visit

Monday-Wednesday, September 20-22 Second Annual Northeast Conference of Mortgage Brokers Trump Taj Mahal Casino Resort 1000 Boardwalk Atlantic City, N.J. For more information, call (973) 379-7447 or visit


JUNE 2010 Thursday-Friday, June 3-4 Hawaii Association of Mortgage Brokers 2010 Annual Conference “2010 & Beyond: Don’t Toy With Us … We’re Licensed & Educated!” The Sheraton Waikiki Hotel 2255 Kalakaua Avenue Honolulu, Hawaii For more information, call (808) 479-8960 or visit