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

MBA-NJ/NJAMB State Office 385 Morris Avenue O Springfield, NJ 07081 Phone: (973) 379-7447 O Fax: (973) 379-5152 MBA-NJ Web site: O NJAMB Web site: MORTGAGE BANKERS ASSOCIATION OF NEW JERSEY MBA-NJ OFFICERS Phone # Fax # Joseph Sheridan Jr. President (732) 264-2700 (732) 264-6127 Maria G. Chaux, CMB Vice President (201) 861-0531 (201) 861-0754 Michael DiSalvio Second Vice President (609) 519-0484 (856) 468-3856 W. Thomas Kelly Treasurer Gregory S. Tornquist Immediate Past President (609) 883-3900 (609) 538-4006 E. Robert Levy Esq. Executive Director (732) 404-1128 (732) 404-1129 MBA-NJ BOARD OF GOVERNORS 2010 Maureen A. Erwin, CMB Samuel P. Lamparello, CMB (732) 738-7100 Michael Mahfouz (201) 226-2356 Nelson Ramos (609) 518-1421 Stanley M. Weeks (973) 624-0865

(732) 738-5806 (201) 226-0898 (609) 518-1423 (973) 624-4369

2011 Robert J. Angelucci Kenneth Gunther Paul T. Logan Richard W. Miller, CMB Alex Saphos Russell J. Tucker

(215) 293-6800 (732) 389-9898 (856) 685-0096 (609) 883-3900 (215) 575-1452 (973) 376-8100

(215) 293-6807 (732) 460-7651 (856) 428-7213 (609) 538-4006 (215) 575-1900 (973) 376-0180

(732) 499-9007 (973) 890-7440 (800) 596-6200 (609) 965-6660 (856) 663-7800

(732) 875-0456 (973) 890-9206 (856) 985-8562 (609) 965-1572 (856) 663-6565

2012 Robert Baerenbach Laura J. Borrelli Eugene J. Brown Robert E. Knuth Lawrence R. Lesiger


Anna Lazar Dennis Astrella Al Rubin

(800) 832-7334 (973) 283-8111 (732) 345-5000 (973) 713-5669

NJAMB BOARD OF DIRECTORS (201) 224-3863 (973) 882-2919 (856) 667-5396 MBA-NJ/NJAMB STAFF Executive Director and Counsel (732) 404-1128 Assistant Director (973) 379-7447 Membership/Registrations Coordinator (973) 379-7447 Meetings Coordinator (973) 379-7447 Financial Coordinator (973) 379-7447 Executive Assistant (973) 379-7447 Communications Coordinator (973) 379-7447

(732) 797-1685 (732) 345-5049 (800) 377-0987

(201) 224-8895 (856) 482-0425

(732) 404-1129 (973) 379-5152 (973) 379-5152 (973) 379-5152 (973) 379-5152 (973) 379-5152 (973) 379-5152

Mark Your Calendars … Sunday-Friday, March 14-19, 2010

27th Annual Regional Conference of Mortgage Bankers Associations For preliminary exhibitor, sponsorship and attendee information, contact the MBA-NJ state office at (973) 379-7447 or visit

continued on page NJ 2


Trump Taj Mahal Casino Resort O Atlantic City, N.J.


E. Robert Levy Jessica Jacobson Monica Cedeno Dana Maki Leslie Merkelson Charlene Gilbert Rosa Fernandez

President Vice President Secretary/Treasurer Immediate Past President

Do we want to retain the state regulatory system for mortgage finance in the U.S. or would we prefer to have a federal system designed to achieve total uniformity of regulation across the country? If that sounds like an academic question then you have not been keeping up with current news regarding our industry. In fact, the Consumer Financial Protection Agency (CFPA) legislation has raised the issue very squarely as to whether we should have a uniform system of laws and regulations across the United States applicable to mortgage finance. This would impact, among others, mortgage bankers and mortgage brokers. A matter of concern is whether the legislation should provide regulation as a floor, so that state laws could exceed it, or as a ceiling, as some are currently suggesting, so that no state law could exceed the requirements of the federal provisions. While there are strong voices now pushing for a ceiling, they also suggest that state regulators should have a voice in devising the laws and regulations to be applied across the country, as well as to have some enforcement authority. However, it is likely that this compromise will not suffice to save the state regulatory system. In this regard, state enforcement would probably still be diverse in terms of the way various states interpret the uniform laws, as well as how they view the regulatory punishment for violations (assuming some discretion is provided). This would only lead to the same voices that sought uniformity in the first place, arguing that this isn’t working and we simply don’t need to have the state regulators involved at all. It is particularly noteworthy that House Finance Chairman Barney Frank, as well as others in Congress, have openly stated that the federal agencies had dropped the ball and accomplished little in the way of consumer protection. In fact, they had not made any serious effort to act until Congress began to enact legislation in this area. With the federal system having all but flunked in the area of consumer protection, why would anyone think that the creation of another federal agency to deal directly with consumer protection will fare any better? At the very least, it is likely that the states that have done a credible job in the area of consumer protection over the years would be the far better way to deal with such issues. The states have also been working toward greater uniformity in their laws and regulations through the efforts of the Conference of State Banking Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) (e.g. subprime guidance, non-traditional mortgage product guidance). It is not surprising that the states would be more likely than federal agencies to deal with consumer protection on a more proactive basis, as they have in the past, since they are closer to the issues and are more aware of consumer needs in their jurisdictions (brought to their attention either by consumers directly or through advocacy groups). In fact, most of the state statutes dealing with mortgage lending and brokerage are consumer protective-oriented, with their provisions directed at assurance that consumers are fairly dealt with. In this regard, the states began considering the licensing and education of loan originators well before the federal government did under the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act). For example, in Pennsylvania, the Department of Banking, working with industry and consumer groups, filed loan originator licensure bills which were passed and enacted into law before the SAFE Act was passed. The analysis of what type of legislation was necessary in Pennsylvania to fully protect consumers was developed as a result of task force meetings with the Secretary of Banking and other members of the Banking Department that had taken place over a two-year period before the state legislation was filed. In New Jersey, there were also bills filed in the legislature to license and educate loan originators prior to the SAFE Act. In addition, there were anti-predatory laws enacted in the states, the necessity for which might have been avoided if the federal agencies had been more proactive in the ways in which they dealt with mortgage finance. What is transpiring now gives one pause as to whether the federal system is the right way to regulate mortgage finance. All one has to do is look at the Truthin-Lending Act (TILA) disclosures vs. the government-sponsored enterprises (GFEs) which differ without any real need to do so causing more confusion and cost to the consumer than is necessary. The suggestion that the Federal Reserve and the U.S. Department of Housing & Urban Development (HUD) get together on a uniform regulation has gone unheeded to the point where Congress is being asked to act. When one looks at the Real Estate Settlement Procedures Act (RESPA), one will remember the difficulty in getting a “bright line guidance” from HUD regarding Section 8 of RESPA and its anti-kickback provisions. I recall counsel at O

Joseph Heisler Edward Morba Brian Benjamin Gary Lehnes

A Message From MBA-NJ/NJAMB Executive Director and General Counsel E. Robert Levy Esq.

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a message from mba-nj/njambexecutive director and general counsel e. robert levy esq. continued from page nj1

OCTOBER 2009 Wednesday-Friday, October 21-23 Northeast Mortgage Brokers Conference Trump Taj Mahal Casino Resort • Atlantic City, N.J. Thursday, October 29 Mortgage Bankers Association of New Jersey Members Day at Fannie Mae Fannie Mae, Northeast Regional Office 1835 Market Street, Suite 2300 • Philadelphia 8:30 a.m.-2:00 p.m. MARCH 2010 Sunday-Friday, March 14-19 27th Annual Regional Conference of Mortgage Bankers Associations Trump Taj Mahal Casino Resort • Atlantic City, N.J.

Events are subject to change. For more information on all MBA-NJ/NJAMB events, call (973) 379-7447, or visit and MBA-NJ and NJAMB board meetings are for board members only.

HUD some years ago saying that they would provide such guidance in the near future. Several years later, not having done so, the same counsel claimed that “RESPA is broken” and couldn’t really be interpreted with “bright line guidance!” It was also extremely difficult to get opinions directly from HUD with regard to the meaning of some of RESPA’s provisions. In fact, when the state regulators began meeting with HUD through AARMR to try to deal with these interpretive issues, their meetings were confidential and the industry was not permitted to be involved. HUD would not reveal to the industry any discussion as to how RESPA might be interpreted. It is clear, therefore, that the federal system has never proved to be an effective way to deal with consumer protective issues in the mortgage finance area. That being the case, the whole idea of a consumer protection agency with uniform laws and regulations should be reevaluated as it does not seam to be a practical way to achieve the goals that Congress would like to achieve.

E. Robert Levy Esq., Executive Director and General Counsel Mortgage Bankers Association of New Jersey/New Jersey Association of Mortgage Brokers

Mortgage Bankers Association of New Jersey Members Day at Fannie Mae




Thursday, October 29

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Fannie Mae, Northeast Regional Office 1835 Market Street, Suite 2300 O Philadelphia 8:30 a.m.-2:00 p.m. MBA-NJ and MBA-PA members ............................................................Free Non-members ......................................................................................$35

Preliminary program 8:30 a.m.-9:00 a.m. ....Registration and Arrival/Continental Breakfast) 9:30 a.m.-10:00 a.m. ........................................Welcoming Remarks O Catherine Lasher, Vice President, East Region, Fannie Mae O E. Robert Levy Esq., Executive Director and Counsel, MBA-NJ O Joseph Sheridan, President, MBA-NJ O Jennifer Whip, Vice President, Sales and Marketing, East Region, Fannie Mae 10:00 a.m.-10:45 a.m. ................HVCC With a Fannie Mae Perspective O Robert Murphy, Credit Risk Analyst and Appraisal/HVCC specialist 10:45 a.m.-11:30 a.m. ..................Electronic Appraisal Reporting and New Data Delivery Requirements Effective March 2010 O Rosemary Norwood, Director, Fannie Mae Business Technology 11:30 a.m.-12:30 p.m. ......................Reviews and Projections on the Economic Outlooks O Richard Koss, Director, Fannie Mae Economics and Mortgage Market Analysis 12:30 p.m.-1:30 p.m...............Lunch/Sandwich Bar and Refreshments For more information, contact the MBA-NJ state office at (973) 379-7447 or visit

CB Richard Ellis Releases White Paper on the State of the Commercial Market

Schedule of events (Subject to change)

Wednesday, October 21 11:00 a.m. ..........Golf Outing Check-In at the Renault Winery Resort & Golf, Egg Harbor City, N.J. Noon ..............Golf Outing With Lunch at the Renault Winery Resort & Golf, Egg Harbor City, N.J. 10:30 a.m.-5:00 p.m.....SAFE Pre-Licensing Education for Loan Originators 7:00 p.m.-9:00 p.m.................................Cocktail Reception Cash Bar

8:30 a.m.-9:00 a.m. ........................................Continental Breakfast 9:00 a.m.-Noon ....................General Session With Featured Speaker: Barry Habib, CEO, Mortgage Market Guide Noon-5:30 p.m. ....................................................Exhibit Hall Open 12:30 p.m.-2:00 p.m. ........................................Lunch in Exhibit Hall

6:00 p.m.-8:00 p.m. ........................Cocktail Reception and Cash Bar

Friday, October 23 8:30 a.m.-4:00 p.m. ....SAFE Pre-Licensing Education for Loan Originators 9:00 a.m.-10:15 a.m. ............................................Breakout Sessions 10:30 a.m.-11:45 a.m. ..........................................Breakout Sessions 11:45 a.m.-1:00 p.m. ............................................Breakout Sessions 4:00 p.m. ......................................................Conference Concludes

For more information,


For more information, call (973) 379-7447 or visit


4:00 p.m.-5:30 p.m...............................................Breakout Sessions O

Thursday, October 22

As the economic downturn continues to impact real estate, a new paradigm has been established for assessing office leasing markets, particularly in the state of New Jersey, finds a recently released White Paper that was issued by CB Richard Ellis (CBRE), one of New Jersey’s largest commercial real estate brokerage firms. Concluding that commercial real estate will not return to what has historically been normative in New Jersey, this White Paper, entitled, “New Jersey Office Leasing: A Market Redefined,” helps define this new context for commercial real estate, or the “new normal,” and speculates on the present and future opportunities for tenants and owners. “The New Jersey market is in the midst of a dynamic shift as a result of the economic environment, and while opinions are plentiful as to the depth, duration and impact of the current economic downturn, one fact is crystal clear: This is not like any other change we have ever experienced during previous down cycles,” said Kevin Welsh, first vice president at CBRE. “The bottom line is that the New Jersey commercial real estate marketplace it is being re-segmented and redefined, with new rules and trends being established creating what we have termed the ‘new normal.’ This White Paper sets the foundation for understanding and operating in this ‘new normal’ in order to better position the players in the commercial real estate industry to be able to capitalize on the opportunities that exist in New Jersey.” According to the White Paper’s findings, this “new normal” can be traced back to a structural shift in supply and demand dynamics and a change in tenant profiles, including a “flight to quality” and a slow migration of larger corporate tenants out of the state. More specifically, because New Jersey’s economy is more diversified now than in past down cycles, there has been an influx in smaller, growth-oriented companies to the state, which has shifted the size of the space requirements demanded by this new smaller-sized tenant base. As a result, 64 percent of all tenants in New Jersey occupy 10,000-square feet or less, while only10 percent of all tenants occupy 50,000-square feet and greater, which has created a discrepancy in availability rates for each tenant class. Consequently, there remains a large discrepancy in supply and demand ratios based on tenant size, which will continue to expand until the over-supply of older, larger footprint properties is addressed through adaptive re-use or other measures. In addition, because of the depressed market, there has been an increase in the number of tenants that are looking to take advantage of lower rental rates for more modern work environments, or and increase in the “flight to quality.” This trend towards state-of-the-art work environments, which include efficient space configurations, location and mass-transportation, technology, building systems, aesthetics and architecture, amenities and sustainable environments, at more affordable price points than in the past, have impacted availability rates and New Jersey’s leasing market overall. For example, based on a comparison of the performance of modern properties and the overall market, there has been an annual increase of 145 percent from 2004 to the end of 2008, with modern properties clearly out performing the market. Despite the fact that leasing velocity at the end of last year was 51 percent below the average of the prior four years, with renewals accounting for 41 percent of all activity (as compared to historic renewal levels of 24 percent) and the continued divide between pricing expectations of tenants and owners, which is at a historic high, there are still pockets of opportunities available in this marketplace, finds CBRE. For example, urban centers such as New Brunswick, Newark, Hoboken and Jersey City will receive significant attention, as both business and government focus on further developing these mass transit-serviced urban centers and incentives such as the Urban Transit Hub Tax Credit continue to entice tenants to these areas. Additionally, spin-off businesses in the areas of pharmaceuticals and finance, which will result from the continued consolidation of the major players in these sectors, will remain in New Jersey due to its attractive pricing and highly trained workforce. And, the healthcare industry will also be a significant driver in the state, as expanded medical facilities/medical hubs in Princeton and Hackensack will continue to drive significant growth in the medical office building sector and supporting industries. “Ultimately, finding opportunity for tenants and owners in the ‘new normal’ will require more analysis and understanding of market nuances, as micro-market segmentation continues in seemingly comparable markets,” said Welsh. “As for our role, we will continue to expand our market data collection and further analyze and interpret market trends that will lead to opportunity for both tenants and owners. Our research shows that these opportunities do in fact exist, and while some will remain focused on cost containment, others will see a unique window of opportunity to capitalize on the market transformation that the ‘new normal’ is creating.”

NJ 3












2009 NORTHEAST CONFERENCE OF MORTGAGE BROKERS - NON-EXHIBITOR REGISTRATION FORM OCTOBER 21, 22, & 23, 2009 - TRUMP TAJ MAHAL CASINO RESORT, ATLANTIC CITY, NJ To register for the Conference, please complete the following form and mail with your check made payable to: New Jersey Association of Mortgage Brokers and mail with this form to NJAMB, 385 Morris Avenue, Springfield, NJ 07081 or Fax Credit Card Information (Visa or MasterCard ONLY) to 973-379-5152. If you have any questions, please call 973-379-7447, or e-mail: Photocopies of Registration Form are acceptable.

OTHER REGISTRANTS Conference Only Option — Includes Continental Breakfasts, General Sessions, Breakout Sessions, Exhibit Hall Access, All Coffee Breaks, Lunch, and Evening Networking Cocktail Receptions

Golf/Conference Option: Includes All of which is included in the Conference Only Option Plus 18 Holes of Golf, BBQ Lunch at the Golf Course and Golf Prizes.

SAFE Pre-Licensing/Conference Option: Includes All of which is included in the Conference Only Option Plus 12 hours of SAFE Pre-Licensing Education Units, and a discount on the remaining 8 hours given at a later time.

MEMBERS (Full Conference Registrations) Conference Only Option SAFE Pre-Licensing Education/ Conference Option Golf/Conference Option

Register Before September 15, 2009

Registration After September 15, 2009

On-site Registration

‰$125 per person

‰$175 per person

‰$225 per person

‰$365 per person

‰$415 per person

‰$465 per person

‰$225 per person

‰$275 per person

‰$325 per person

NON - MEMBERS (Full Conference Registrations) Register Before September 15, 2009

Registration After September 15, 2009

On-site Registration

Conference Only Option

‰$145 per person

‰$195 per person

‰$245 per person

SAFE Pre-Licensing Education/ Conference Option

‰$465 per person

‰$515 per person

‰$565 per person

Golf/Conference Option

‰$245 per person

‰$295 per person

‰$345 per person




EXHIBIT HALL PASS (For Entrance to the Exhibit Hall ONLY on Thursday, October 22, 2009)

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Register Before September 15, 2009

Registration After September 15, 2009

On-site Registration


‰$25 per person

‰$35 per person

‰$50 per person

Non- Member

‰$45 per person

‰$55 per person

‰$70 per person

10% Discount on Attendee price for 5 or more registrations from the same company. Name ____________________________________________________Badge Name ___________________________________ Company ________________________________________________________________________________________________ Street _____________________________________________________________________________________________________ City _______________________________________________________________________State ________ Zip ______________ Phone ____________________________ Fax _________________________ E-Mail ____________________________________ Payment Method:

‰Check (made payable to NJAMB)

‰Credit Card (Visa or MasterCard ONLY)

Total Enclosed: $_______________ Credit Card:




Name on Card ____________________________________________ Signature _____________________________________________ Card Number ______________________________________________ Exp ____________/___________ V-code __________________ Hotel Reservations: Hotel rooms are NOT included in the Conference Registration Fee. Upon receipt by the NJAMB of your completed registration form and fee, you will receive hotel reservation information. Rooms are available on a limited basis at a special rate for single/double occupancy. You are not guaranteed a room, because rooms are provided on a first-come first served basis. Do NOT send your hotel room deposit to the NJAMB. Refunds: for cancellation of Conference registration will be made only upon written request, minus a $25 administrative fee until September 15, 2009. A $30 fee will be charged for returned checks. Cancellation of Conference: The Conference may be changed or cancelled at the sponsor’s option if circumstances require. If you require a receipt please request it at time of registration.

The NAMB Perspective


Technology Gives Brokers and Lenders a Defensive Edge By Steve Grant


The Secondary Market Overview: From Bonds to Production: Secondary Leads the Trends (Part II) By Dave Hershman


Trend Spotter: Converting Rate Shoppers With Unique Knowledge By Gibran Nicholas


Forward on Reverse: HECM at 20: Leaders and Pioneers in U.S. Reverse Mortgage Series … A Principal Architect of HECM By Atare E. Agbamu, CRMS


Ask Tommy: Your QC Expert By Tommy A. Duncan


Policy Changes and Clarifications Regarding Credit Reports at the GSEs By Terry W. Clemans


NMP Mortgage Professional of the Month: Frederick L Assini, President and Chief Executive Officer of Franklin First Financial Ltd.


Value Nation: Where Has the Economic Meltdown Taken Us?


Rebuilding Trust After a Layoff By Andrea Obston


The CFPA Controversy: Asking the Tough Questions


FHA Insider: Getting the FHA Business: Presentation and Paradigm By Jeff Mifsud


Regulatory Compliance Outlook: October 2009 … New Advertising Rules By Jonathan Foxx


A View From the “C” Suite: Marketing—Nothing Has Changed, Yet Everything is New By David Lykken


The Biggest Marketing Mistakes to Avoid and What to Do to Correct Them By Brian Sacks


Maximioze Your Direct Mail Marketing Results by Raising Your Postal IQ By Jeremy Crosslin


Low Cost Marketing Ideas By Dave Hershman


Mortgage Marketing 101: Weathering the Storm


By Gary Opper


Internet Savvy Marketing By Laura Lynn Burke


Lead Provider Roundup











Reaching Your Market By Linda Williams



By Jonathan Foxx


By Charlie W. Elliott Jr., MAI, SRA





October 2009 Volume 1 • Number 6



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

1220 Wantagh Avenue • Wantagh, NY 11793-2202 Phone: (516) 409-5555 / (888) 409-9770 Fax: (516) 409-4600 Web site: STAFF Eric C. Peck Editor-in-Chief (516) 409-5555, ext. 312 Andrew T. Berman Executive Vice President (516) 409-5555, ext. 333 Domenica Trafficanda Art Director Karen Krizman Senior National Account Executive (516) 409-5555, ext. 326

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 of fact and opinion in National Mortgage Professional Magazine are the responsibility of the authors alone and do not imply an opinion on the part of NMP Media Corp. National Mortgage Professional Magazine reserves the right to edit, reject and/or postpone the publication of any articles, information or data. MO





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



ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact Senior National Account Executive Karen Krizman at (516) 4095555, ext. 326 or e-mail




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



A Message From NMP Media Corp. Executive Vice President Andrew T. Berman It’s all about the marketing! Marketing is really such a broad topic and that is seen here in our special section, “It’s All About the Marketing.” It could be using tools like video, social networking as described in this month’s View From the “C” Suite by David Lykken, or using affordable tools and techniques as David Hershamn suggests in his article, “Low Cost Marketing Ideas,” Dave discusses increased phone usage, writing press releases and articles, and much more to get your name out there to the masses. For some, marketing is just about continuing to further your expertise by education and letting your community know that you are an expert on whatever facet of the industry you focus on as recommended by Gary Opper in his article “Mortgage Marketing 101.” No matter what medium you use to get your message out there, there is nothing more important than measuring the results. Sure, the concept of branding is great if you have a large budget or just want community awareness; however, most small- to mid-sized mortgage origination shops need to analyze and account for each dollar spent. Both Brian Sacks and Jeremy Crosslin did a great job of sharing their thoughts on closely scrutinizing your marketing campaigns in Brian’s “The Biggest Marketing Mistakes to Avoid and What to Do to Correct Them,” (even the most skilled marketers make these common mistakes on a regular basis) and Jeremy’s “Maximize Your Direct Mail Marketing Results by Raising Your Postal IQ,” a must-read for direct mailers).

How a trip to Vegas can help save your business and ensure a great 2010 This month, I will be heading to the 96th Annual Mortgage Bankers Association Convention & Expo in San Diego. There is no question about it, the people that I meet at this convention will be some of the top leaders and shakers of the industry. The focus is less of “What can I do right now?” and is more geared toward “How can I build my business in five years from now?” Of course, both are equally important to any business. From Saturday-Tuesday, Dec. 5-8, NAMB/WEST will be in Las Vegas at the MGM Grand Hotel. While it’s great to be able to attend both the MBA and NAMB/WEST, NAMB/WEST provides you with strategies and tactics that can help build your business right away! Everything from learning social networking skills, to video marketing, to productivity tips. Of course, there will be ample updates on the Secure and Fair Enforcement of Mortgage Licensing Act (SAFE Act), Mortgage Disclosure Improvement Act (MDIA), Home Valuation Code of Conduct (HVCC), the Federal Trade Commission’s Red Flags Rules and other regulatory acronyms that will have a major impact on how you will conduct business in the future. However, one of the biggest benefits of attending the 2009 installment of NAMB/WEST will not be found on the pages of the conference site … it’s the countless networking opportunities you’ll be able to take part in. I cannot tell you how many times I have seen conference and trade show attendees share their blockbuster marketing programs with someone who is not from their local market and not a competitor. Almost done as a braggart, however, with a little bit of altruism mixed in. More details about NAMB/WEST can be found at

Who cares what happens after this loan get closed? You should! Sure, I know that a good percentage of our readers are involved in mortgage banking operations and deal on a daily basis with the secondary market. Some are watching the trading of mortgagebacked securities (MBS), ready to lock their loan at any sign of a changing direction. As of last month, Dave Hershman has been providing a monthly overview of the secondary market. We have received positive praise from both secondary market amateurs and seasoned vets. Dave’s secondary market overview provides a strong foundation to truly grasp the concepts of mastering the secondary market and shed some insight on wether to lock or float.

NMP’s October Mortgage Professional of the Month This month, we have selected Frederick Assini, president of Franklin First Financial Ltd. as our Mortgage Professional of the Month. He is based out of Melville, Long Island, N.Y. Melville is, what I have always called, the “Irvine of the East.” There is more mortgage companies in that zip code than any other zip code in the country outside of Irvine, Calif. Melville served as home to industry titans like American Home Mortgage, plus nearly every mortgage company had a branch office in Melville over the years, including AmeriQuest, GreenPoint, National City, Wilmington National Finance and more. In the dust of the fallen companies remains a few left standing. One of them is Franklin First, led by Mr. Assini. He has taken a slow steady growth which was a trait he learned from his father. Besides having a nationwide branch network, he also has a growing wholesale operation known as Presidents First. There’s lots more to explope in the pages of this month’s issue of National Mortgage Professional Magazine. We hope our graphical table of contents will help you narrow down the “Must Read” articles and provide guidance on learning about subjects you didn’t know you “Should Read.” And as always, I want to close by thanking you again for dedicating the time to read this month’s issue of National Mortgage Professional Magazine. I also urge you to log on to our Web site,, updated throughout the day, brining you the latest industry news as it happens. Sure, we live in a hectic world, juggling a multitude of tasks on any given day. It is our hope that, as you navigate the sometimes turbulent mortgage landscape, that we are there as a source for you to stay on top of the game, brining you the news as it happens. Sincerely,


National Mortgage Professional Magazine is published monthly by NMP Media Corp. Copyright © 2009 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 O Corpus Christi, TX 78413 (361) 853-9987 O President-Elect—William Howe, CMC, CRMS Howe Mortgage Corporation 9414 E. San Salvador Drive, #236 O Scottsdale, AZ 85258 (602) 200-8100 O Vice President—Michael D’Alonzo, CMC Creative Mortgage Group 1126 Horsham Road, Suite D O Maple Glen, PA 19002 (215) 657-9600 O Secretary—Penny Fagan, CRMS P. Fagan Mortgage Inc. 222 East Moulton Street O Decatur, AL 35601 (256) 355-5505 O Treasurer—Don Frommeyer, CRMS Amtrust Mortgage Funding Inc. 200 Medical Drive, Suite D O Carmel, IN 46032 (317) 575-4355 O Immediate Past President—Marc S. Savitt, CRMS The Mortgage Center 115 Aikens Center, Suite 20-B O Martinsburg, WV 25401 (304) 267-9040 O


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

Board of Directors President—Judy Ryan (800) 929-3400, ext. 201 Vice President—Marty Flynn (925) 831-3520, ext. 224 Treasurer—Daphne Large (901) 259-5105 Ex-Officio—Nancy Fedich (908) 813-8555, ext. 3010

Director—Dave Miller (317) 573-0667 Director—Donald J. Unger (303) 670-7993, ext. 222 Director—Tom Swider (856) 787-9005, ext. 1201 Director—Donovan Williams (714) 638-2855

NCRA Staff Director—Thomas Conwell (248) 313-1000

Executive Director—Terry Clemans (630) 539-1525

Director—Don Goldammer (661) 398-4700

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

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

Legal Counsel—James Sutton (972) 680-2665


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


Ginny Ferguson, CMC Heritage Valley Mortgage Inc. 5700 Stoneridge Mall Road, Suite 150 O Pleasanton, CA 94588 (925) 469-0100 O

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

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

National Board of Directors





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


The Fall Forecast

Here are some things you need to do to help your association in addressing these issues.

A Message From NAMB President Jim Pair, CMC

O Participate: Study the issues and give the Government Affairs Committee your input on how you think these issues should be resolved. O Share this information with your non-member competitors. They need to get off the sideline and become a part of the solution. Recruit them to become member to join us in protecting our industry. O Become a regular contributor to the NAMB Political Action Committee.

With the coming of fall, we will experience many changes, and I don’t mean only in the weather … Congress has concluded its summer recess and has returned to Washington, D.C. Without going into detail on each issue, the following are a few issues that the National Association of Mortgage Brokers (NAMB) is working on. We expect Chairman Barney Frank of the Financial Services Committee to push his proposed bill, HR 3126, out of committee and to the floor of the House of Representatives for a vote. This bill will create the Consumer Financial Protection Agency (CFPA). There are a number of provisions in the bill that directly address our industry, and we will endeavor to have those provisions either changed or eliminated. The Federal Reserve Bank Board has a new rule that goes into effect Oct. 1. Part of that rule is already in effect and has caused a lot of confusion in the industry as to how the disclosures should be implemented. The consumer is the one being hurt by this confusion since it is causing time delays in the ordering of appraisals and the ability to establish closing dates. In some instances, the consumer would have to pay a lock extension fee in order to meet a closing date. The Federal Reserve also has a proposed rule that is out for comments, which are due in December of 2009. We are in the process of studying the proposed rule and putting our comments together. We believe there are some provisions in this rule that would seriously harm our industry. One such provision is the amount of compensation a loan originator can receive and another is the possible banning of yield spread premiums (YSPs). In addition to the above, the new RESPA Rule will take effect January 2010. We are working with other groups to delay the implementation of this rule so that the U.S. Department of Housing & Urban Development (HUD) can make some changes. We also have the ongoing problems with the Home Valuation Code of Conduct (HVCC) and the damage it is causing the consumer in both time delays and money. We will continue to work to have the HVCC changed to protect the best interest of the consumer. These are some of the issues and challenges we know about right now. Who knows what else Congress or any of the regulatory agencies might propose in the coming months. You can see how full our basket is at this time. NAMB’s Government Affairs Committee, our lobbyists and staff can only do so much of the work to protect our industry. Your participation is needed and needed today!

It will take all our efforts these next few months to ensure we remain a viable part of the distribution channel. Now is not the time to be a turtle and pull back into our shell. We must be aggressive in our actions. Your association is doing its part. Will you do yours? 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

NAMB’s Membership Corner A Message From NAMB Interim Membership Committee Chair Donald E. Fader, CRMS Let me begin by saying that Interim Membership Chair was not a position that I sought, coveted or expected to hold. For those of you who may not know, our Membership Committee Chair, Victoria Johnson, has experienced some health problems, but I am happy to report that she is recovering nicely and I for one am looking forward to her return to this position. In the meantime, I will do my best, with the assistance of NAMB Director of Membership and Marketing Jessica Savitz, and Membership and Marketing Associate Paul Niermann, to keep the work moving forward. As the name implies, the NAMB Membership Committee is responsible for promoting membership in the association. Membership in a voluntary association, such as NAMB, is optional which means that we have to give you a reason to join. Through the years, NAMB has provided, information, education, certification, representation on legislative issues, and networking, along with other services that you would expect from a professional organization. Today, survival has become the watchword that we all live by. We have become burdened by legislation and regulation meant to protect the public, but in fact, the net result is the shutting off of access to credit extending the economic morass generously referred to by the media as the “Great Recession.” Let’s face it, things are changing and nobody likes change except maybe a baby with a wet diaper. But change creates opportunity and brokers are in the best position to capitalize on these changes because we are nimble, innovative and efficient. We are constantly asking ourselves how we can help that broker who gets up in the morning looking for ways and opportunities to help build a better community one loan at a time. Beginning in October, we will sponsor Webinars for our members that will offer ideas, some old, some new, relating to sales, processing and compliance. NAMB understands that our relevance is determined by our ability to help you navigate this maze of regulation, while at the same time, assisting your customer in making the biggest financial decision of their life. Donald E. Fader, CRMS is Interim NAMB Membership Committee Chair and executive vice president of SMC Home Finance in Kinston, N.C. He may be reached by phone at (252) 523-5800 or e-mail

Certification? Certainly! What Do You Believe? A Message From NAMB Certifications Committee Chair Pava J. Leyrer, CMC, CRMS Beliefs are very personal and specific. Some of us believe that anything is possible and others believe that nothing is possible. I believe that anything is possible and you may be asking why you care about my beliefs. I would answer that I believe that everyone reading this article has the ability to obtain one or more professional certification, expand their knowledge, and grow their professional careers to new heights even in this market. One of the main reasons many people procrastinate or delay obtaining their certifications is time. “I don’t have the time, I am too busy, I am afraid I will not pass and have to retake the test� are common statements we hear. But if you really think about those answers, I think it boils down to belief. Do you believe in yourself? Do you believe it is a valuable way to spend your time? Do you believe you are not alone and many will assist you with information and education to be successful? The answer again in my eyes should be, “yes!� Yes, you should believe that this is important and can make a difference in your career, especially in this market and environment. Yes, you can find the time to promote yourself. And Yes, the National Association of Mortgage Brokers stands ready to help you with the tools to excel. So, why not start today and answer “yes� to certification. It is a matter of believing.


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

NAMB/WEST 2009: Las Vegas in December! A Message From NAMB/WEST 2009 Committee Member Allison Kinsley, CMM, CMP

Vegas at a bargain

Platinum Credit Services, Inc. will train and educate your staff of mortgage professionals on how to use and maximize our score enhancing software. PCS will guide them through our re-score process and get the scores increased at the bureau level in as little as 2 – 5 business days with or without documents. Call us today!

Rolled-back registration fees Members can register early for under $200. If you are not a member, you can take advantage of discounted fees by registering before Thursday, Oct. 15.

High-octane program Learn from experts, network with your peers and see the latest from exhibitors ‌ all in an energized three-day experience.

Win prizes worth thousands of dollars Each full-conference registrant will be entered into a drawing, which will take place at the Opening Reception on Saturday, Dec. 5. To increase the odds of winning, register by the end of October to get two chances.

Allison Kinsley, CMM, CMP is the chief meeting architect for Kinsley. She may be reached by phone at (303) 798-3664 or e-mail



For a complete agenda and further conference information, visit the NAMB/WEST 2009 Web site at


Conference rates at the fabulous MGM Grand Hotel & Casino are $89/night from Sunday, Dec. 6 through Tuesday, Dec. 8. Make plans to arrive for the Saturday night opening reception. NAMB has even negotiated a $159 rate for Saturday night that cannot be matched online.


The energy of Las Vegas serves as the backdrop for the 2009 NAMB/WEST Conference, set for Saturday-Tuesday, Dec. 5-8 at the MGM Grand Hotel & Casino in Las Vegas. This year’s conference offers a combination of program, setting and networking to provide participants opportunities to stay ahead of the industry curve. The planning committee has strategized to create a NAMB/WEST event you should not miss. Here are the top reasons to attend:



Technology Gives Brokers and Lenders a Defensive Edge Advanced systems, teamwork prevent ‘end-arounds’ and help fight fraud By Steve Grant




The government guarantee is not MBA proposes framework intended to support the entire mortgage for federal role in market, but only those products needed secondary market


The Mortgage Bankers Association (MBA) has released a new paper outlining a proposed framework for a refined government role in the secondary mortgage market designed to ensure liquidity for mortgages without presenting unnecessary risks for the taxpayer. The paper, “Recommendations for the Future Government Role in the Core Secondary Mortgage Market,” is the result of work by the MBA’s Council on Ensuring Mortgage Liquidity, a 23-member task force representing MBA’s membership base. “It’s now been more than two years since the secondary mortgage market collapsed,” said Michael D. Berman, MBA’s vice chairman and chair of the Council on Ensuring Mortgage Liquidity. “Rebuilding the secondary market is critical to restoring liquidity and confidence. The government has an important, limited role to play to ensure a stable flow of funds for mortgages.” The centerpiece of MBA’s recommendation is the creation of a new line of mortgage-backed securities (MBS). Each security would have two components: A loan level guarantee provided by a privately-owned, government-chartered and regulated mortgage credit-guarantor entity (MCGE); and a security-level, federal governmentguaranteed wrap. The wrap would be an explicit government guarantee focused on the credit risk of these mortgage securities, similar to that on a Ginnie Mae security. Fannie Mae and Freddie Mac’s infrastructure, including their technology, human capital, standard documents and relationships, could be used as the foundation for one or more MCGEs. “Our Council, featuring some of the best minds in our industry, has spent significant time looking at the secondary market—what worked and what didn’t— and came up with these recommendations,” said John Courson, MBA’s president and chief executive officer. “While this is not the only viable framework, we believe the recommendations represent a workable approach, balancing the government’s ability to ensure liquidity, with the need to protect taxpayers from the credit and interest rate risk inherent in mortgage finance.”

to keep the secondary market for core mortgage products liquid and functioning even during times of extreme market stress. Under the MBA proposal, the government securitization guarantee would support only “core” mortgage products with well-understood, well-documented risk characteristics. New products would be proposed by the MCGEs, recommended by the government guarantor and would require approval from a regulator. For more visit

States issue report on multistate mortgage examinations initiative The Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) have published the first report on multistate examination efforts to improve supervision of the mortgage industry. The “Multistate Mortgage Committee Report to State Regulators” identified the following key steps states have taken over the past year, including: The states formed the Multistate Mortgage Committee in December 2008 to represent the states in the coordination of examinations of the largest multi-state mortgage companies; all 50 states, plus the District of Columbia and Puerto Rico have adopted the nationwide protocol for information sharing and coordination of multistate exams; and the states have begun the first comprehensive multi-state examination of a mortgage company and anticipate expanding this effort significantly next year. This progress on the coordination of multistate examination efforts builds on the states’ success in developing a nationwide mortgage licensing system in January 2008. Forty-six states are scheduled to participate in the nationwide licensing system by January of 2010, with all states expected to participate by 2011. Currently, more than 11,000 companies and 66,469 loan originators are licensed in the nationwide system. “This initiative is about uniformity in approach and modernization of processes,” said Steve Antonakes, Massachusetts continued on page 13

The football season kicked off just the field. These fouls fall into two main weeks ago, and every good coach categories. knows that a strong defense can be the key to a winning season. That philoso- O Fraud for profit: This typically phy also applies to today’s mortgage involves industry professionals who industry—utilizing the right technoloinflate home values, overstate gy-based systems can give brokers and income and assets, steal identities, lenders a significant defensive advanand create fake properties and buytage in this highly competitive industry. ers to secure loans. More and more mortgage professionals O Fraud for property: This illegal activare making Tax Return Verification ity includes buyers who misrepresent (TRV) reports key players on their fraudthemselves and their financial qualififighting teams. cations to get a loan for which they Defensive coordinators can attest that may not have otherwise qualified. a good defense is made up of more than Fraudulent income, credit, employjust tackling or pass interceptions. It ment or appraisal docurequires teamwork, savvy ments are the tools used and plenty of strategy— to commit the fraud. the same skills necessary to succeed as a mortgage proAccessibility and fessional. The mortgage ease of use are a industry today is like a winning combo game with new rules and You don’t need to be a Bill regulations, played on a Belichick, Dom Capers or field—the housing marother defensive mastermind ket—that is as unsteady as to use TRV reports. The fact a new turf field. Pile on is that TRV reports are as consumers desperate to get straightforward as a safety loans or people attempting blitz. Simply put, they com“The mortgage industo make money by dishonpare income-related lines of try today is like a est means, and it’s easy to a borrower’s tax return with game with new rules see why mortgage fraud is the same lines on file at the and regulations, at an all-time high. Internal Revenue Service played on a field— (IRS) and highlight any disFraud instances: the housing market— crepancies. They also match Red Flags abound that is as unsteady as information in Social The facts speak louder Security Administration and a new turf field. Pile than a 0-12 coach after a on consumers desper- IRS files with what is on the blown play: loan application and, using ate to get loans or IRS-validated data, provide people attempting to O Tax return and financial cash flow analysis that commake money by disstatement fraud rose 17 pletes the underwriter’s calhonest means, and percent in 2007 and 28 culations. it’s easy to see why percent in 2008, accordSome companies have mortgage fraud is at ing to the Mortgage added technology to the Asset Research Institute team and offer fully elecan all-time high.” (MARI). tronic order and delivery O The FBI reports Mortgage Fraud of TRV reports. That means if you’ve Suspicious Activity Reports (SARs) scanned or imaged the 4506-T, the IRS rose 36 percent in 2008 to 63,175. release form used to pull a taxpayer’s The amount of Mortgage SARs filed tax transcripts, you can upload the docso far this year has reached 33,291. ument to the order you’re placing O There has been a three-fold increase in online. You then receive the data back actual mortgage fraud cases in the last electronically within 24 to 48 hours. three years, the FBI reports, with $1.5 Putting TRV reports on your defenbillion in specific dollar losses in 2008. sive line does more than just assure lenders the original IRS figures haven’t Increasingly, TRV reports are being been manipulated. They give lenders seen as a defense against these legal more confidence in making loans by and ethical end-arounds by helping to providing accurate information. That’s erect a figurative “steel curtain” around absolutely vital, given the explosive brokers and lenders. TRV reports pro- growth in lender requests, not to mentect them from a range of scams and tion increased regulations and a diminfraudulent practices perpetrated by ishing number of loan originators. buyers, sellers, mortgage brokers, real estate agents, appraisers and others in continued on page 10

Secondary Leads the Trends (Part II) Where we have been and where are we heading

Dave Hershman is a leading author for the mortgage industry with eight books and several hundred articles to his credit. He is also head of OriginationPro Mortgage School and a top industry speaker. If you would like to stay ahead of what is happening in the markets, visit for a free trial or e-mail

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All the while, the secondary market was evolving—in an era of deregulation. What did that mean? It meant the development of new products we had never seen before. No money down, stated-income, low credit score, multiple investors, unapproved condos and more. We had actually seen many of these before—but not in a combination like this. When I entered in the mortgage business 30 years ago, even when rates were a relatively low eight percent, if you had bad credit, you borrowed from a finance company at a rate of 18 percent or more. Now “sub-prime” was 0.5 percent above prime. How could that happen? Well, combine the real estate boom that was taking place with these new products. These new products grew up in a time of a boom. They had never been tested in a bad real estate market. There are apparently no regulations requiring this. The pricing and guidelines were built only for prices of real estate going up. And not only did the price of real estate go up, but the availability of these products caused them to go up even faster. It was a feeding frenzy. The banks wanted even more product to sell and they made it ever so easy for mortgage brokers to get approved, and all of a sudden, we had a huge sales force— one that was new, inexperience and untrained. Why not? There were gobs of fees to be made and if the loans were “sold” there was no risk. The brokers and the bankers both felt invincible. Well, you all know what happened. Seems like someone should have said, “What happens when the price of real estate goes down?” It certainly did during the late 1980s. It was like everyone lost their memory. The bigger they are, the harder they fall. And that’s exactly what happened— the biggest rise we ever saw and the


O Early in the decade, the stock market crash brought the technology boom stocks to a halt. This means that investors were looking for “safer” investments. O Despite the stock market crash, we had a strong economy, with plenty of cash out there—and real estate was seen as that “safe” investment. O We also experienced an immigration boom, raising the demand for housing significantly.

O Sept. 11 hit, and though this caused a major disruption in the economy, a sharp downturn was avoided because the Fed drove rates down and turned on the spigot for credit.

Granted, some of this money will come back when the banks purchase back their shares and securities are sold, but if the government withdraws from the markets too quickly, this will be as bad as rates going up quickly and choking off the recovery. As a matter of fact, we are in a Catch22 situation. The more the government spends, the more likely rates will rise some time in the future. If the government stops spending, there is a chance that the markets will collapse again and we have to work our way out of a hole. So during the coming months and throughout the next year, the government will move from a full scale stimulus mode to an important balancing act mode. Our industry and our economy hang in this balance. Our technical advisor, Eric Holloman, chief executive officer of RateLink, tells us to expect the next year to be interesting and the months ahead to be volatile as these conflicting forces fight to prevail. O

This is the second in a two-part series of articles introducing my new “Secondary Market Overview” column for National Mortgage Professional Magazine. The goal of this column is to provide some perspective on how the secondary markets played a role in what has happened in the rise and fall of the real estate markets over the past 10 years. We left off in the September 2009 edition with the end of the Savings and Loan (S&L) crisis in the late 1980s. We moved from the S&L-dominated portfolio lending industry to one which was dominated by banks and the sale of mortgages on the secondary markets. The banks became stronger, and in an era of “deregulation,” they were able to make some major gains, easing and eliminating restrictions that were laid down in the wake of the banking crisis that occurred as part of the Great Depression earlier in the century. This culminated with the passage of the Financial Services Modernization Act of 1999. Remember that banks had to expand because they were called upon the talk over many of the assets of the failed S&Ls, and this expansion fueled a major merger and acquisition frenzy. The 1990s was a decade of healing for the real estate industry. After another recession early in the decade, home prices stabilized and started recovering and the secondary markets were gaining steam. This recovery gained momentum towards the end of the decade. There was a convergence of factors heading into the new decade:

biggest fall we ever saw. And the secondary market was in the “thick” of things. The pendulum has swung—especially the credit pendulum. We have moved from the easiest credit environment to one in which it is very hard to get the average American approved. Equity is gone for many and credit scores are down. Foreclosures are soaring. The next year will be interesting. We have been “healing” for at least a year and the scars are so bad, it will take more than one year. The wild card? The government. Our healing process may have never have started if the government did not intervene. The government is purchasing Treasuries to keep rates down. They are purchasing mortgages to keep them priced reasonably. They have raised the conforming limits because the jumbo markets were in disarray. The tax credit has been absolutely essential to support the housing markets. The Federal Housing Administration (FHA) has become the hottest program in the nation. This all comes behind the fact that the industry already enjoys the single biggest tax break in America. But the government cannot support us forever. They have spent hundreds of billions of dollars supporting the banks that make the loans, those who purchase homes and more.






Converting Rate Shoppers With Unique Knowledge


On the one hand, it’s kind of nice that most of your competitors have left the business. On the other hand, why is rate shopping so intense and cut-throat in today’s marketplace? The answer is that although less people are selling mortgages, the salespeople who have survived are all selling the same product! After all, there are only so many ways to uniquely package a Federal Housing Administration (FHA) or conventional 30-year mortgage. So, how do you stand out from the crowd and motivate people to do business with you in this cut-throat environment of commoditized mortgages? One powerful way to convert and motivate rate shoppers is by adding value to them through relevant and unique knowledge that your competition is overlooking. Let’s face it. Most, if not all, of your competitors are milking that first-time homebuyer tax credit for all it’s worth. Most, if not all of your competitors are doing FHA presentations for their local Realtor offices. But let me ask you this: How many of your competitors are talking to clients, prospects, real estate agents, and financial advisor referral partners about creative downpayment ideas involving interfamily gifts and loans? What about gifts of equity involving properties that would take too long to sell at a reasonable price in today’s real estate market? What about creative ideas on how to solve or reduce negative equity problems? What about creative ideas on how to cope with a job loss and/or avoid foreclosure? Knowing how to properly structure interfamily gifts and loans is a huge way to differentiate yourself from the competition, convert and motivate rate shoppers, and gain exclusive access to referrals of your clients’ wealthier friends and relatives. Gifts and loans can be used for many purposes including: O Helping loved ones catch up on mortgage payments or avoid being late O Helping to provide funds for a downpayment on a new home O Helping to subsidize income temporarily due to loss of job O Helping to reduce a negative equity situation in order to allow for refinancing or selling a home

Exclusion,” but they did not yet use their second checkbook called, “The $1 Million When dealing with gifts, it is important Lifetime Exclusion.” So, mom can deduct the $8,000 from to understand two important rules perher lifetime exclusion and be left with a taining to the gift tax: $992,000 exclusion that she could still O The person(s) receiving the gift is use in the future. Dad could deduct the never subject to paying tax on the $8,000 from his lifetime exclusion and be left with a $992,000 exclusion that he gift; and O The person(s) giving the gift may not need could use in the future. Or, mom and to pay gift taxes if the gift falls under one dad could otherwise split the $8,000 and each deduct a portion of it from of two possible gift tax exclusions. their respective lifetime exclusions. The bottom line is that no gift tax The first exclusion is would need to be paid, that each individual has a even though the parents $13,000 annual gift tax exceeded their $13,000 exclusion that replenishes annual exclusions! Most of every year. The second your competitors don’t exclusion is that each indihave any clue about this. vidual also has a $1 milHeck, even you may not lion lifetime exclusion have known about this that can only be used until just now. This is exactonce, and that does not ly the type of unique replenish. In other words, knowledge, insight and this is kind of like two value that would cause a checkbooks from which rate shopper to think twice you can give gifts. The first “So, how do you about nickel and diming checkbook allows you to stand out from the you about an 1/8th of a gift up to $13,000 per percrowd and motivate point in interest rate. This is son, per year; and the secexactly the type of unique ond checkbook allows you people to do business knowledge, insight and to gift up to $1 million in with you in this cutvalue that would cause real total throughout your lifethroat environment estate agents to want to do time above and beyond of commoditized more business with you the $13,000 per year. mortgages?” versus your competition. Consider an example involving parents who want to gift $60,000 to their daughter Structuring interfamily and son-in-law in order to help them loans Knowledge on how to structure interpurchase a home. In this case: family loans is another area that could O Mom could gift $13,000 to the be very useful in converting rate shoppers, closing more deals, and gaining daughter O Dad could gift $13,000 to the daughter more qualified leads and referrals. O Mom could gift $13,000 to the son- Consider a case involving Jane who is getting a $50,000 personal loan from in-law O Dad could gift $13,000 to the son-in-law her brother, Bill. Jane plans to use the funds in order to pay down her mortIn this example, a total of $52,000 was gage balance, eliminate her negative gifted tax-free using the $13,000 annual equity problem and qualify to refinance gift tax exclusion. But remember, the gift the remaining mortgage balance into a in this example was $60,000. Does this lower interest rate. In this case, Jane would need to mean that the parents have to pay gift make payments to Bill in order to repay taxes on the remaining $8,000? Probably the personal loan over time at a certain not, as long as they haven’t used up their $1 million lifetime exclusion. In other interest rate. Jane and Bill could negotiwords, mom and dad used the first check- ate the interest rate and repayment book called, “The $13,000 Annual terms as they like, as long as Jane pays

Structuring interfamily gifts

the minimum “federal rate.” The federal rate is updated periodically by the IRS and is currently in the neighborhood of 4.3 percent for long-term loans. In other words, the $50,000 would be classified as a gift and Bill may need to pay gift taxes on all or part of the $50,000 unless Jane agrees to pay him at least 4.3 percent annual interest on the loan. Additionally, when Jane applies with the mortgage company to refinance her mortgage, she will need to notify them of the $50,000 personal loan so they can account for the payments on the personal loan when calculating her debt ratios and qualifying her for the mortgage. As far as Bill is concerned, he is also benefiting from this transaction because it gives him the opportunity to earn a rate of return on his money, while simultaneously, helping someone that is important to him in his life. In fact, you could even use this opportunity to talk to Bill about his own mortgage, housing and real estate situation. Perhaps he would be a great candidate for purchasing or refinancing a primary home, vacation home or investment property. The bottom line here is that you are the hero to both of these clients by being the one to suggest and implement some creative solutions that your competition is overlooking. Yes, you need to be up to speed on the latest FHA guidelines and mortgagee letters. Yes, you need to make a habit of visiting and reading up on the latest changes to conventional underwriting guidelines. Yes, you need to make sure your loan process is fully compliant with the new Real Estate Settlement Procedures Act (RESPA) rules and the Fed’s amendments to Regulation Z. This is the price you need to pay in order to survive in this ever-changing, ever-crazy mortgage industry. But if you really want to crush your competition and take your business to heights never before seen, you need to be able to have intelligent conversations with clients about these and other financial and life issues that have nothing to do with lending guidelines. That’s where the unique knowledge you will gain from certification training really equips you to stand out from the continued on page 10


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defensive edge

continued from page 6

New rules help the anti-fraud squad A couple of new players have appeared on the regulation side:

HECM at 20: Leaders and Pioneers in the U.S. Reverse Mortgage Industry Series




A Principal Architect of HECM


On Feb. 5, 1988, President Roland mates) credit industry in 20 years. Reagan signed reverse mortgage insur- What attracted you to the design ance legislation, and it became the task project at inception? First, let me say at the outset, that my of the U.S. Department of Housing & Urban Development (HUD) to create a responses to your questions reflect my marketable product out of the law. personal opinions, and I am not in any There were no models. So, HUD put a way speaking for HUD. Secondly, I want to say that HECM is not my “contrapproduct-design team together. Edward J. Szymanoski, an Associate tion.” It was very much a team effort. I Deputy Assistant Secretary for presume you will be speaking with Economic Affairs at HUD’s Office of some of my colleagues involved with Policy Development and Research, was the development of HECM 20 years ago a vital member of that pioneering prod- as well, including Judy May, who very ably led the HUD team. uct-development team. A demonstration proAt HUD, Szymanoski, a gram for home equity Hartford, Conn. native with conversion was authordegrees in applied matheized by the Housing and matics and economics, Community Development manages economic and polAct of 1987 (Public Law icy support for HUD’s pro100-242). This concept grams. Before that, he ran was championed by sevthe annual actuarial review eral very dedicated advoof HUD’s home mortgage cates for older homeowninsurance fund, led modelers who helped get the ing teams assisting HUD’s provision included in the financial and budget reportEdward J. Szymanoski law (for example, Ken ing, and served at Fannie Scholen). The statute limMae and Freddie Mac’s for“HUD’s work in ited the HECM pilot to mer regulator. HECM design 2,500 total mortgages, Szymanoski has authored underscores the fact although that limit was many papers on housing that sometimes soon raised. The first and economic issues in acagovernment can HECM loan was made in demic journals. His 1990 get it right.” October 1989. paper on reverse mortgage Congress, in its wisrisk, “The FHA Home Equity Conversion Mortgage Insurance dom, left it up to HUD to design the Demonstration: A Model to Calculate HECM pilot. The legislation set down Borrower Payments and Insurance Risk,” guidelines for consumer protections and basic program requirements, but is considered the best on the subject. Personally, I have been a beneficiary of HUD took the lead in establishing the Ed’s boundless intellectual generosity over main features of the HECM program. the years. He is one of my teachers on HUD needed to build a simulation reverse mortgages and on Home Equity model for analyzing the actuarial risks Conversion Mortgages (HECM). The following that the FHA [Federal Housing are the reflections of Edward J. Szymanoski, Administration] would be exposed to a principal architect of HECM and a world- under various economic and demographic assumptions involving future class resource on reverse mortgages. house prices, and borrower mortality You are one of HECM’s inventors. and move-out rates. The HECM design team used this Your contraption has spawned a multi-billion-dollar (possibly a multitrillion-dollar by 2030 by some esticontinued on page 12

O The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act licensing of 2008): This act requires mortgage companies to screen loan officers before they handle sensitive customer information. The process involves entering fingerprints, criminal history, background checks, personal history and experience into a Nationwide Mortgage Licensing System and Registry (NMLSR) and makes use of the latest employment screening technology. O The Mortgage Reform and AntiPredatory Lending Act (HR 1728): This piece of legislation protects against fraud and was designed to amend the Truth-inLending Act (TILA) to help stabilize the mortgage market. An amendment to this bill requires mortgage lenders to verify the income history of each home loan applicant by obtaining an IRS tax return transcript from a third-party provider prior to closing a loan. The goal is to verify stated-income through IRS tax transcripts to protect taxpayers, investors and the mortgage market by discouraging fraud, reducing foreclosures and strengthening the market. The bill passed in the House and it’s now in the Senate and expected to be voted on soon. The number of loan originators is becoming as scarce as players without sixfigure salaries, so there is even more reason to be vigilant. Two to three years ago, for example, buyers had a wide choice of where to secure mortgage loans. Today, MARI reports that more than 300 companies that once originated loans have folded their franchises. This has caused some to speculate that fewer loan originations may be leading buyers desperate to purchase homes to commit mortgage fraud.

TRV reports make confidence a snap It’s no wonder, then, that some lenders,

trend spotter

tired of being thrown for financial losses by scammers and fraud artists, are asking that TRV reports be included with loan applications to confirm such things as employment and income. Some companies offering TRVs have seen orders increase six-fold since last year. My firm, Credit Plus Inc., has experienced a whopping 628 percent increase in the use of TRVs over the past year. TRV reports, like a star rookie in training camp, are proving their worth in ensuring that more loans are being approved faster and with greater confidence. David Wind, president of Guaranteed Home Mortgage Company Inc. in White Plains, N.Y., said, “Not only have TRVs enabled us to more fully verify our files, they have assisted us in expediting our underwriting processes as we are ordering them at initial application submission so that they are available for initial underwrite. This has the effect of reducing the need for supplemental verification or consumer explanation stipulations on our commitments.”

Technology makes defense the name of the game Credit information companies are scoring big points with mortgage industry customers through the use of TRV reports and other technology-based systems that help them sideline mortgage fraud by gathering and validating information. Using technology this way levels the playing field for everyone in this new competitive environment, where the stakes keep getting higher all the time. Taking a team approach and putting TRV reports in play is a win-win strategy that will lead to gains by mortgage brokers, lenders, consumers and other players in the fight against fraud. You may not earn a trophy, but you can feel good that you have gone the distance to make a difference in our industry. Steve Grant is president of Credit Plus Inc., a credit information services provider since 1928. He may be reached by phone at (800) 258-3488 or e-mail

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competition, convert and motivate rate shoppers, and skyrocket your referral business. 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. O




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model to simulate the net present values of insurance premiums and claim costs under multiple program design features. Innovations from our initial design recommendations, which FHA adopted, included the first-ever two-part premium structure for an FHA program (two percent upfront and 50 basis points annual), a two-dimensional “principal limit” factor table (by borrower age and interest rate) that is used as an effective limit on HECM LTVs [loan-to-values], and formulas for borrowers to set up their own customized payment plans—allow-

ing maximum flexibility in choice among monthly payment streams, lines of credit or combination plans with both. These HECM design features that we developed are still in use today. The HUD Appropriation Act of 1998 made HECM a permanent program of HUD, based upon the early successes of the pilot program. HUD’s work in HECM design underscores the fact that sometimes government can get it right. HUD accomplished this by assembling a design team of its own staff, including myself, along with extensive

consultation with external stakeholders. My contribution was to propose an actuarial pricing and simulation model, and to provide clarity to some of the financial structure of the product. This means the development of the principal limit table, itself, and in establishing formulas for computing borrower cash draws from the principal limit. I also assisted in software development and early program implementation as well as initial program evaluation reports to Congress. What attracted me to the team was the opportunity to apply mathematical models to the problem of managing risk for a new reverse mortgage product. I have an educational background in mathematics and a love for solving mathematical problems of an applied nature.


Shared Vision, Shared Success.SM Make Your Way With A Lender Committed To Leading Responsible Change Wells Fargo Wholesale Lending is dedicated to working with mortgage brokers who are committed to five key principles for long-term industry success:




Responsibility: Ensure fair and responsible lending and borrower education are top priorities.


Quality: Produce high quality loans. Controls: Better manage our collective risk and eliminate fraud. Excellence: Create, promote and adhere to industry-leading standards of excellence. Efficiency: Develop capabilities that drive greater efficiency and ease of use between our companies. Together, we will lead the way, helping to establish a foundation for a stronger, healthier and more responsible industry. Share in this vision. For more information, tools, ideas and market insights visit our Shared Vision, Shared Success.SM web site located on






This information is for use by mortgage professionals only and should not be distributed to or used by consumers or other third-parties. Information is accurate as of date of printing and is subject to change without notice. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. © 2009 Wells Fargo Bank, N.A. All Rights Reserved. #64153 4/09

“In some sense, the HUD HECM product is the envy of the world ... it is the ‘gold standard.’” —Edward J. Szymanoski How has the product and the industry changed, and where do you see HECM and the industry going in the years ahead? During the past 20 years (most of which I have spent working at HUD, except for a two-year stint at the Office of Federal Housing Enterprise Oversight [OFHEO], now the Federal Housing Finance Agency [FHFA]), I have seen the HECM product change from a limited pilot program to a nationwide niche market product, and then to a near mainstream product. I say near mainstream product because there is yet more work to improve the efficiency of the secondary market for HECM to the point where it provides as much liquidity and efficiency of execution as does the secondary market for standard prime mortgages (current market problems notwithstanding). For most of the 20-year period, HECM relied on the liquidity provided by one investor, Fannie Mae. Fannie Mae played a key and valuable role in the early success of HECM. However, if HECM is to become a truly mainstream financial product, a sustainable, competitive secondary market is essential. Ginnie Mae, which began guaranteeing HECM MBSs [mortgage-backed securities] in 2007, has already made great strides toward achieving this goal. In my view as a researcher, there is also need for more formal research on the benefits of HECM to borrowers and to society as a whole. This type of research will better enable us to retool HECM for the coming wave of retirements of the large baby boom cohorts over the next two decades. For example, in what ways are older homeowners better off from having taken out a HECM? Is society as a whole better off with a mainstream HECM product? These and other research questions will ultimately need to be answered in order to guide HECM policy changes in the future. What were the design assumptions you started with as a team, and have they been validated by market experience? The major design assumptions involve: 1. The timing of loan terminations due to mortality, voluntary move-out or refinancing into a new HECM; 2. The mean and volatility of home price appreciation; and 3. The projections of loan balances into the future based on variable interest rates and borrower cash drawdown patterns. The answer to your question as to whether these assumptions have been validated by experience is an ongoing one. We are learning more and more, with each passing year, about these continued on page 15

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Commissioner of Banks. “States have been hard at work for nearly two years delivering an examination format that is not only effective, but efficient for regulators and stakeholders.” In addition to these regulatory improvements, state legislatures have also been hard at work. In the past 12 months, 49 states have enacted legislation to update mortgage licensing schemes to meet or surpass the federal minimum requirements of the federal SAFE Act enacted in July 2008. AARMR and CSBS drafted and adopted a model state statute to assist states in complying with the SAFE Act. This model statute was determined by the U.S. Department of Housing and Urban Development (HUD) as meeting federal requirements for the licensure of mortgage loan originators under the SAFE Act. For more information, visit

MBA: Commercial/multifamily delinquency rates continue upward trend

Bachus says government must sever ties with ACORN

I must say that the MBA did a great job combining quality assurance personnel and underwriters all in one conference. The conference would not have been successful if it had received the support of committee volunteers and speakers. This forum cannot support the variety of hot topics and concerns that were addressed in the breakout sessions at the conference. However, there were a number of intense discussions outside the agenda during networking events and after hours lounging that served as a voice of concern. The concerns of these mortgage professionals were not necessarily discussed during the breakout sessions. Stop the blame game for the economy and state of the industry These quality assurance professionals and underwriters are positioned to see what is going on in the industry. We all need to be held accountable for our role and learn from it so that we can move forward. There is a perceived notion that the MBA is not policing their own. The industry pushed for the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) and the states are requiring that mortgage brokers and loan officers to be licensed. In some states, processors and underwriters must be licensed or registered as well. The industry is allowing a virtual “Phoenix,” the burning in flames of failed mortgage corporations and resurrection of new mortgage corporations with the same leadership that allowed scrupulous mortgage banking practices. Some of these mortgage professionals have earned the coveted Certified Mortgage Bankers (CMB) designation and continue to wear that badge of honor. The quality assurance professionals and underwriters are taken back by an industry that has not policed its own and they may have to touch loans that came from those who are allowed back into the industry to run, manage or direct mortgage operations. Many of the MBA members know who these individuals are and see these individuals back in action. This puts a bad taste in the mouth of those who must see these individuals hide behind a corporate structure with no sanctions being applied by the industry. There is a perceived notion that a great deal of unnecessary regulation is being written with little or no real value added to the customer or industry. The mortgage professionals want to know where the data to support all the new regulations is. If the industry wants to recover, stop funding loans to those who cannot pay or are given at-risk loans. Stop insuring and purchasing loans on the secondary market that have risk and regulatory errors. Renting is affordable housing and it is okay to wait a season so those potential homebuyers are creditworthy enough to qualify for a home purchase. Quality assurance and underwriting perceptions are at an all-time low. These mortgage professionals are looking out for the welfare and health of the respective corporations and industry. There was much chatter about how the industry needs to take a more proactive approach in showing how prudent pre-funding quality control is, both prior to and during the underwriting process. They also stressed that fact that post-closing quality control is saving the mortgage corporations, the mortgage industry and the economy. The industry takes the approach of reporting mortgage failures that were the result of poor underwriting practices, failed quality control policies and procedures, and mortgage fraud. The industry needs an information campaign celebrating the successes of best practices, solid underwriting, and successful quality control policies and procedures, and have associated those successes with the positive impact it is making on the industry and the economy.

Tommy A. Duncan is executive vice president of Quality Mortgage Services LLC. For answers to your QC and FHA questions, please contact Tommy at (615) 5912528, ext. 124 or e-mail You may also visit Quality Mortgage Services LLC on the Web at

Sponsored by


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Tommy: What did you take away from the 2009 Mortgage Bankers Association (MBA) Quality Assurance and Residential Underwriting Conference?


Rep. Spencer Bachus (RAL), the top Republican on the Financial Services Committee, has called for an end to federal funding for the Association of Community Organizations for Reform Now (ACORN), a left wing activist group linked to voter registration fraud and other criminal activity. Rep. Bachus became an original co-sponsor of the Defund ACORN Act, which would eliminate all ties, including financial support, between the government and the organization. He also signed a letter to President Barack Obama demanding a termination of taxpayer assistance to the group. “Taxpayer funding for ACORN’s far left agenda must end now,” said Rep. Bachus. “It is unconscionable to use the hardearned money of the American taxpayer to support a radical organization that has repeatedly been embroiled in scandal and shady activity. This is an outrageous use of public money and the ties must be cut off immediately and permanently.” According to one analysis of budget data, the federal government has awarded more than $53 million in direct funding to ACORN since 1994. ACORN fraudulently registered thousands of voters during last year’s elections and has been investigated for other potentially illegal activities. The U.S. Census Department recently said it would not allow ACORN to officially assist with the 2010 census count, citing a lack of confidence in the organization. As Ranking Member on the House Financial Services Committee, Rep. Bachus has spotlighted funding that ACORN has received from the U.S. Department of Housing & Urban Development (HUD) and formally requested that House Financial Services Committee Chairman Barney Frank (D-MA) to hold hearings on the group’s alleged abuse of taxpayer funds. For more information, visit

By Tommy A. Duncan O

Delinquency rates continued to increase in the second quarter of 2009 for all commercial/multifamily mortgage investor groups, according to the Commercial/Multifamily Delinquency Report from the Mortgage Bankers Association (MBA). “The economic fallout of the recession continued to push commercial and multifamily delinquency rates higher during the second quarter,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “Lower levels of employment, the pullback by consumers and other aspects of the slowdown translated into a difficult operating environment for many income-producing properties. That, in turn, has led to increased stress on the loans those properties support.” Between the first and second quarters, the 30-plus day delinquency rate on loans held in commercial mortgage-backed securities (CMBS) rose 2.04 percentage points to 3.89 percent. The 60-plus day delinquency rate on loans held in life company portfolios rose 0.03 percentage points to 0.15 percent. The 60-plus day delinquency rate on multifamily loans held or insured by Fannie Mae rose 0.17 percentage points to 0.51 percent. The 90-plus day delinquency rate on multifamily loans held or insured by Freddie Mac rose 0.02 percentage points to 0.11 percent. The 90-plus day delinquency rate on loans held by Federal Deposit Insurance Corporation (FDIC)insured banks and thrifts rose 0.64 percentage points to 2.92 percent. The MBA analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, CMBS, life insurance companies, Fannie Mae and Freddie Mac. Together, these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding. The analysis incorporates the same measures used by each

individual investor group to track the performance of their loans. Because each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to another. Based on the unpaid principal balance of loans (UPB), delinquency rates for each group at the end of the second quarter were as follows: CMBS were at 3.89 percent (30-plus days delinquent or in REO); life company portfolios were at 0.15 percent (60-plus days delinquent); Fannie Mae was at 0.51 percent (60 or more days delinquent); Freddie Mac was at 0.11 percent (90 or more days delinquent); and banks and thrifts were at 2.92 percent (90 or more days delinquent or in non-accrual). For more information, visit


Policy Changes and Clarifications Regarding Credit Reports at the GSEs

By Terry W. Clemans

It seems that there has been some confusion lately regarding the changes in policy on credit report life cycles and which of the credit score models are accepted by Fannie Mae and Freddie Mac. Many credit reporting agencies are getting questioned on these issues lately, so let’s look at each one.

Fannie Mae In June, Fannie Mae (Announcement 09-19 of the Selling Guide) reduced the life cycle of mortgage credit reports by 30 and 60 days, pending the type of loan. For mortgage products on existing homes, the life cycle of the credit report was reduced from 120 days to 90 days from the date the report was issued. For mortgage products on new home construction, the life cycle of the credit report was reduced from 180 days to 120 days from the date the report was issued. Please note that both of these date reductions include all types of credit documentation, not just the credit report. Employment, asset and income verification documents also have the same life cycles, depending on the type of home being financed. More information on this new Fannie Mae policy can be found online at




Freddie Mac


I have not heard of any changes in the Freddie Mac credit document life cycles at this time; however, since so many policies in the industry are changing, it may be best to adopt the same timelines.

Credit reporting agencies On the approved scoring models, many credit reporting agencies are being requested to provide some of the older, or not yet approved, credit scoring models. This can create issues if the credit report is sent to either one of the government-sponsored enterprises (GSEs) as the Web sites of Fannie Mae and Freddie Mac ( and, respectively) clearly designate which credit scoring models mortgage originators should use. The only credit score models for GSE loan underwriting are currently the same at both agencies and are as follows: O Equifax Beacon 5.0 O TransUnion FICO Risk Score 04 O Experian/Fair Isaac Risk Model V2 More information on this can be found on the Fannie Mae website at, or for more information directly on this issue from Freddie Mac, log on to There are bound to be more changes ahead as the mortgage industry works through the problems of the past, stay tuned to your lender notices and GSE updates to stay compliant. 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

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The UFA Default Risk Index: Defaults on newly originated loans edge higher as unemployment soars The University Financial Associates (UFA) Default Risk Index for the third quarter of 2009 rose to 237 from last quarter’s revised count of 230, but remains below the 2008 Q4 peak. After extraordinary price declines in many housing markets around the country, one might expect improvement in UFA’s forward-looking Default Risk Index. Steep increases in unemployment are almost fully offsetting the positive effects of lower, and in some areas, stabilizing, house prices. The Index illustrates the important role that local economic conditions have played in this credit cycle since loan, borrower and collateral characteristics are held constant over time in the Index. Under current economic conditions, non-prime investors and lenders should expect defaults on loans currently being originated to be 137 percent higher than the average of loans originated in the 1990s. “Plummeting house prices from overvalued levels interacting with questionable underwriting practices have been the primary driver of defaults to date in this credit cycle,” says Dennis Capozza, professor of finance with the Ross School of Business at the University of Michigan and a founding principal of UFA. “As house prices return to more sustainable levels, we are transitioning to a phase where high unemployment rates will exacerbate the level and extend the period of elevated foreclosures.” The UFA Default Risk Index measures the risk of default on newly-originated nonprime mortgages. UFA’s analysis is based on a “constant-quality” loan, that is, a loan with the same borrower, loan and collateral characteristics. The Index reflects only the changes in current and expected future economic conditions, which are much less favorable currently than in prior years. For more information, visit

MBA study: Mortgage banker production profits improved in 2008 Mortgage bankers managed to make a marginal profit of $184 per loan on every loan they originated in the second half of 2008 despite lower net warehousing income and higher production operating expenses, according to the Mortgage Bankers Association (MBA). This modest profit marks an improvement over average per-loan losses in 2006 and 2007, according to the MBA’s Annual Mortgage Bankers Performance Report. “Many independent mortgage companies and bank subsidiaries made radical changes in their product offerings in order to remain alive in 2008,” said Marina Walsh, MBA’s associate vice presi-

dent of industry analysis. “Among this group, the government share of total originations, mainly FHA loans, was 45 percent in the second half of 2008, compared to less than ten percent the year before. Small- and mid-sized mortgage bankers were able to quickly respond to changing secondary market conditions as they had the flexibility to realign their business models toward FHA business and it was a key to their profitability.” The average firm posted pre-tax net financial income of $0.7 million in 2008, compared to $0.9 million in 2007 and $6.4 million in 2006. Fifty-nine percent of the firms in the study posted pre-tax net financial profits. The remaining 41 percent, primarily firms with asset sizes less than $10 million, posted overall net financial losses. Mortgage banking production profits were 8.75 basis points, or $184, per loan. These profits were a modest improvement over the previous two years (2006-2007) in which net losses of around $50 and $560 were reported respectively. Many firms that were not profitable in production exited the market in 2007 and 2008, so the increase in profitability may be partly driven by having only the surviving firms in the survey. In 2007, loan origination and ancillary fees grew on a per-loan basis, but they did not keep pace with production operating expenses. However, in 2008, loan origination and ancillary fees continued to grow, and compensated for continued per-loan increases in production operating expenses. As a result, the “net cost to originate” fell to $2,291 per loan in 2008. The “net cost to originate” includes all origination operating expenses and commissions, minus all fee income, but excludes secondary marketing gains, capitalized servicing, servicing released premiums and warehouse interest spread. The average pull-through rate (number of loan closings to number of loan applications) was 56.6 percent. 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, dropped to $148 per loan in 2008 from $175 per loan in 2007. Likewise, the average days in warehouse dropped to 15 days from 20 days in 2007, partly because the reduced availability of warehouse lines caused lenders to move loans out as quickly as possible. The change in product mix towards government loans helped improve net marketing income in 2008 because of the higher revenues associated with the government servicing assets. Net marketing income includes the gain or loss on the sale of loans in the secondary market, pricing subsidies and overages, as well as capitalized servicing and servicing released premiums. Servicing financial profits per loan dropped to an average loss of $19 per loan (or 1.24 basis points) from a $109 per loan profit in 2007. Many servicers reportcontinued on page 18

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2. In some sense, the HUD HECM product is the envy of the world ... it is the “gold standard.” There are many barriers to be overcome in implementing a successful reverse mortgage program in most nations (including legal, institutional and cultural barriers), and most countries which have launched reverse mortgage programs have not yet achieved the level of success that the U.S. has enjoyed with

1. Asian countries are especially interested in learning about the U.S. experience with HECM because many of these counties are faced with populations which are aging even faster than the U.S. population is aging.

When You THINK Of...

3. Finally, many nations are debating the role of the government in establishing an effective reverse mortgage program. In the U.S., the federal guaranty backing HECM has been a huge plus in the development of the market—other countries are debating whether they should or could replicate that government involvement.

“In some ways, the most confounding problem is in predicting future house price trends, because the past doesn’t always predict the future.” —Edward J. Szymanoski What could be done to design a competitive private-sector product? I believe that private sector reverse mortgage products will come back once there is a re-emergent non-agency secondary mortgage market to provide liquidity. The private sector products will probably focus on the jumbo market as in the past (loans on homes valued above $625,500), but maybe also on lower loan-to-value products in the non-jumbo space. For example, a 75-year-old senior homeowner with a $400,000 house might only want to borrow $75,000. This homeowner could get more than that from a HECM, but may choose instead to go with a conventional reverse loan that might be better priced than HECM due to the relatively low risk of the lower LTV.

Author and columnist, Atare E. Agbamu, CRMS is director of reverse mortgages at Minneapolis-based AdvisorNet Mortgage LLC. A member of the BusinessWeek Market Advisory Board, Agbamu is author of Think Reverse! and more than 100 articles on reverse mortgages. Through his advisory firm, ThinkReverse LLC, Agbamu advises financial professionals, institutions and regulators across the country. In a 2007 national report on reverse mortgages, the AARP cited Agbamu’s work. He can be reached by phone at (612) 436-3711 or (612) 2039434, and e-mail at or Visit author Atare E. Agbamu’s blog at for his thoughts and insights on the reverse mortgage marketplace.

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Copyright © 2009 Emigrant Mortgage Company, Incorporated (Emigrant). All rights reserved. Emigrant is a subsidiary of Emigrant Bank, Member FDIC and is an Equal Opportunity Lender. All product names, company names and logotypes are servicemarks or trademarks of Emigrant in the United States and other countries. The information, products and services contained in this advertisement are believed to be correct but may include inaccuracies, typographical errors and/or omissions. Emigrant does not guarantee the accuracy of the data contained herein. This information is intended for mortgage and/or real estate professional use only and should not be distributed or presented to consumers or any other third parties. This is not an offer or guarantee to extend consumer credit. Program guidelines, terms and/or conditions are subject to change by Emigrant without notice. All loans are subject to submission of a complete application, underwriting review and credit and property approval by Emigrant. Not all products and/or programs are available in all states and/or localities and/or for all loan amounts. Certain products / program are offered through third parties. Other restrictions and limitations may apply. New York Licensed Residential Mortgage Lender: Exempt. Emigrant is registered or licensed with the Banking Departments or Divisions in CT, DE, FL, MA, NH, NJ, NY and PA.


Besides sovereign insurance, what are the sources of HECM’s strength, and what structural changes would you make today, with the benefit of hindsight? Clearly, the full faith and credit of the U.S. government is key in a program with risks that are hard to measure “ex ante” (meaning before the fact of insuring the loan) as is the case with the HECM program. However, HECM contains additional strengths that have made it a success. First, for all of its alleged complexity, HECM is really based on a simple guiding principle. This principle is that all the many actuarial and economic assumptions that one must make to assess risk can be boiled down to a single number, the principal limit factor, for any unique combination of borrower age and expected interest rate environment. These assumptions include borrower mortality and voluntary move-out patterns, house price growth trends (both average growth rate and price volatility), interest rate changes over time, and borrower cash draw patterns. The concept of principal limit based on this single factor times the maximum claim amount (property value capped by the HECM lending limit) is the foundation for all cash flow patterns that borrowers could want (from regular monthly “tenure” payments to lines of credit under which borrowers control the amounts and timing of cash draws). This simplicity in HECM construction has provided borrowers and the lending

Comparatively, where do you think HECM and the U.S. reverse mortgage industry rank with other programs in the world (please give copious examples from your international engagements)? HUD hosts many visiting international delegations each year that come to learn about HECM. I and other HUD staff regularly brief these visitors, whose backgrounds range from academics and researchers, to government officials and banking and finance industry executives. In addition, several foreign governments have requested HUD participation at conferences in their countries for exchange of information on reverse mortgages. Since the early 1990s, I have briefed about 30 or more visiting delegations, and these visitors came from places like Japan, Korea, Singapore, India, Australia, France and Poland. In addition, I have made presentations on behalf of HUD on HECM in five countries: Hungary, Mexico, Germany, Latvia and Chile. My sense is that:

On Oct. 19, 1989, Marjorie Mason of Fairway, Kansas, signed her closing documents, becoming the first person to receive an HECM reverse mortgage in the U.S. Twenty years and more than 500,000 HECM loans valued at more than $55 billion later, a vibrant growth industry is in place. History matters, even in business. So, in this series, we bring you the priceless reflections, perspective, and insights of the men and women who created the U.S. reverse mortgage industry and made the first 20 years of HECM possible. We believe we will need their wisdom, leadership, pioneering and entrepreneurial spirit to take the industry to the next stage in its evolution. Please send me your feedback on the series at If you know a person who you feel is a leader/pioneer in the U.S. reverse mortgage industry, send me the following via e-mail: Their name, phone number and e-mail, and a few words on why you think they are considered a leader/pioneer in the industry.


community with a great deal of confidence in the product, in my view.

Author’s note O

assumptions, and in hindsight, I would say that the original assumptions missed by a little but not by a lot. In some ways, the most confounding problem is in predicting future house price trends, because the past doesn’t always predict the future. I would note, however, that between the first quarter of 1991 and the first quarter of 2009—an 18-year period covering most of the 20 years during which HECM has been active—the U.S. house price index, as reported by the Federal Housing Finance Agency, has increased at an annual compound rate of 3.9 percent. Even accounting for the recent price drop due to the recession, the 18-year growth in U.S. house prices has averaged very near the four percent assumed in the original HECM model. With regard to the timing of loan terminations, studies have shown that younger borrowers terminate their HECM loans considerably earlier and older borrowers terminate slightly later than originally assumed in 1989. The 2000 HUD report to Congress on HECM, “No Place Like Home,” contained an analysis of the original termination assumption and concluded that although no single multiple of mortality rates can adequately capture the timing of HECM terminations for all borrower age groups, the original assumed multiple of 1.3 “comes remarkably close for the entire HECM book of business.”

regard to overcoming the barriers. Legal barriers can range from statutes which explicitly conflict with reverse mortgages, to those which simply pose ambiguity about potential conflict. Institutional barriers can range from the insufficiently developed systems of property valuation to unwillingness of local banking institutions to participate. An example of a cultural barrier can be a widespread desire among seniors in some nations to pass along their wealth to their heirs rather than consume it themselves.





Frederick L. Assini, President and Chief Executive Officer of Franklin First Financial Ltd.


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 Frederick L. Assini, president and chief executive officer of Melville, N.Y.based Franklin First Financial Ltd. At just 27 years of age, Fred created Franklin First Financial with a vision and determination to build one of the country’s finest lending institutions. Today, as company president, CEO and sole shareholder of Franklin First, he oversees a 40-state business operation with sales of more than $2 billion annually. A native New Yorker, Assini attended St. John’s University, focusing his academic attention on the field of finance. He began his career as a sales manager for a successful home improvement corporation with an exclusive partnership with Sears. It wasn’t long before he rose to the position of president, supervising all sales, finance and investor relations. It was during this period that

the idea of running his own company took form. In 1993, he opened Franklin First Financial in a small building in Elmont, N.Y. Since then, Franklin First has moved to a three-story facility in West Hempstead, N.Y. with a staff of more than 250 employees. Credit for the company’s growth is widely given to Fred’s executive marketing strategies and personal philosophy of customer service, together with a commitment to leading-edge technology and financial product diversity. Through Assini’s philosophy of treating every customer as if they were the company’s only customer, Franklin First Financial enjoys a large percentage of repeat business, as well as referrals from real estate professionals. Tell us a little about your background prior to entering the mortgage business. My family was in the remodeling business, and much of our remodeling projects revolved around financing. Because we had to do a lot of financing, I was always somehow involved in running credit reports and calculating debt-to-income ratios. In the early 90s when home improvement loans became scarce, we had to seek out professionals to do mortgages.

When we started seeking out mortgage brokerages back then, we weren’t too happy with the service we were getting, so we stared doing the mortgages ourselves. When we did a mortgage and the client wasn’t happy with the broker, it would reflect poorly on us. We ended up doing the mortgages ourselves as an adjunct to our remodeling business. The mortgage business remained a side business until about 1993, when I saw that not only the business was growing by referrals and the hiring of loan officers, but the leads were coming in more than with our remodeling business. I knew how to do a lot of sales. I felt that selling a mortgage became a lot easier than selling a kitchen remodel. I saw it as a cash flow that was easier because you didn’t have to lay out money for labor and materials. Those factors swung me more to the mortgage side of the business. What sort of marketing techniques did you use when you first launched Franklin First Financial? Do you utilize any of those same techniques to this day? When we first launched, we used a lot of referrals and we were doing some direct mailings. We also had an inbound call center that took applications. Today, we still keep our face in home visits and appointments. We sit down with the clients and explain the entire mortgage process. We also still do a lot of training of loan officers. We are able to train loan officers into the business, instead of hiring LOs from the outside. That was always one of our strengths. We hire people who weren’t in the mortgage business and teach them the business. One of the gentlemen recently hired in our retail centers was a financial planner prior to joining Franklin First. He was hired three months ago, and he’s been closing four loans per month in a three-month span so far. I cannot say that one particular marketing method has brought in the largest number of calls, but I feel a mar-

keting mix is very important. I think you have to be very versatile. We had a TV commercial and I didn’t like the quality, and the same went for our radio spot. You need a wide array of testing to see exactly what works. As you grew professionally or in your business, what are some the practices you still maintain to this day as you’ve grown? My philosophy is still the same to this day. I didn’t try to grow the company too quick. It’s has been organically grown from within. We never went outside to borrow capital to grow. We used our own money to grow. We have people here who have 12-plus years with the company. That was my basic principle. I’m 43-years-old and realize that I have a long time to keep growing successfully. I never tried to go too far and have offices worldwide. I’m pretty laid back. We are a mid-sized company and didn’t grow to compete with the Flagstar Banks, and Option One Mortgage Corporations of the world. Is there a long-term goal of the company to get to those levels? You’ve experienced steady growth over the years and are licensed in over 40 states. Right now, there is the opportunity to get to that level one day, and it will take a few more years to think like that again. The company is set up to go nationwide. We just got our Fannie Mae approval, an approval that is very hard to get as you need the proper net worth requirements, etc. We are going to be the seller/servicer, which means we actually can compete with banks like Citi and Chase. That is our goal. We are set up to do loans for the U.S. Department of Housing & Urban Development (HUD) and Fannie Mae, and with our upcoming Ginnie Mae platform, we will have all the irons in the fire.

What do you do to encourage your loan officers to get more referrals? To this day, we still exercise old-fashioned relationship building. We knock on doors and spend time with our customers, treat them with respect and work weekends at open houses. Purchases are currently on the rise and we are getting market share in that department each day. We have the products to offer and provide good service. A lot of companies don’t have that mentality with respect to service. At Franklin First, we have a strong operations and service center. It is completely separate from our sales center. This is everything a mortgage banker or sales agent does not want to do … warehousing, compliance, IT, accounting, underwriting, etc. … everything that has nothing to do with sales is done out of our service center building. Having a service center does not interfere with the daily work environment with sales. Our sales centers are processing and sales centers and everything else is done at a separate service center. The system works out well. The salespeople do their jobs and the backend of the business is doing their job. The back-end is oftentimes more important than the front-end.

How does Franklin First handle the lack of warehouse lines available in the current mortgage marketplace? We were very well-position a year ago, because we had good relationships with our warehouse lenders. We have now switched to other warehouse lenders because the sad part is that some of them were just going out of business. It’s not that the model wasn’t good. We are dealing with national banks, we never dealt with second tier warehouse companies. One good thing about Franklin First is that we have the net worth requirement to meet 99 percent of the warehouse lenders out there. That’s the key. Small companies are being treated unfair in this respect. We are still positioned at a high net worth on a cash basis. We can keep our loans on our warehouse line and make money on it. We don’t have to rush it up the line and spin it twice. A lot of companies have maybe a $15 million warehouse line and can do maybe $30 million if they turn it over twice. We don’t have to do that. We still have more than $50-$60 million in warehouse lines. It’s a stringent process, but we still go to national banks, and there are new players slowly coming into the market.

Are there any individuals who have mentored you through this business and have helped shape your approach to business? I think the way my father approached business shaped the way I run a business, whether it’s a mortgage business or remodeling business. When he remodeled someone’s home, he left the customer with a good taste in their mouth, he always ran a very personable company with a dynamic personality. He always took care of the client to get a referral. He always did the right thong by the supplier. Those practices shaped the way I went into business. He also let me know that making money is easy and keeping it is very hard. He always stressed a slow approach and an organic approach to growing your business long-term. That is why I think I am still in business today. That slow approach leads to a proper business that becomes a profitable business and in turn, you will stay in business. That definitely did shape my philosophy of how to run a business. In the mortgage business, I did have some mentors that I looked up to who are no longer in the business. I cannot really say I currently have any mentors, which is sad to say because I aspire to reach another level in the business. All that is left are protégés who want to be me, and I really need a mentor. I used to look up to Angelo Mozilo and certain people in the business and its kind of weird that I am now the one looked up to. I was at an industry trade show once and shook hands with Mozilo. I thought he was my idol. He was a star to me and ran a really good company. There is no one I see as a mentor in the mortgage business. I do business with credit unions and savings banks and look at the way they run their policies and procedures in their little thrifts. I look up to the Chase’s and Wells Fargo’s of the world and look up to the way they do business.

How do you see the regulatory landscape impacting the way business is done over the next few years? It seems that the regulatory landscape changes on a daily basis. Some of these changes are necessary and some of it is hard to understand, but I think that through technology, we can keep up with it. Every time a new compliance rule comes along, a new piece of technology is added to make sure that you’re in compliance. Franklin First has a large compliance department and quality control division that keeps up with these regulatory changes. We are currently licensed in 40 states and have branches across the U.S. We keep up on the latest regulatory and compliance issues through our IT department. They upgrade the software to make sure that with things like the Home Valuation Code of Conduct (HVCC), they cannot order appraisals in the last three days of the application.

“My philosophy is still the same to this day. I didn’t try to grow the company too quick. It’s has been organically grown from within.”

Which side of the business do you see with greater growth potential, the wholesale or retail side? I think more growth will be seen on the wholesale side. Presidents First does business with thousands of brokers. It can change on a month-to-month basis. There could be more retail opportunity one month and then all of a sudden the rules are changed and the bankers go back to the brokers. We will be opening up a correspondent channel in the coming weeks to do business with other bankers that are having warehouse line issues and/or net worth requirement issues. It’s a great channel to partner up with other correspondents together. Since Franklin First has a strong backbone of secondary and warehousing, they can tap into our market with us. How has the professionalism of the mortgage broker changed as compared to two or three years ago? I don’t know if there is a change, I think most have adapted to the changes of the rules. We have a really nice broker base that get really great service from us. I think that the most important thing to them is our service. I cannot say there is a difference in professionalism because I don’t deal with the broker on a daily basis. I think the business has changed because everyone knows there is less business available and the broker has a disadvantage. I think if there are rules that come out, they have to deal with it, such as a spike in rates or the HVCC rule. I think there are fewer brokers in the market these days. I don’t think there are broker shops anymore with 20 loan officers sitting around. I think it has become a smaller network in the broker’s community that will do some loans. We won’t find the mortgage broker doing business in 40 states, as there is no value in that. The broker’s presence has become more localized. It’s a pleasure doing business with brokers. We value the brokers we do business with to a great degree.


Do you feel that the HVCC has had any impact on values? The rules are the rules and we must follow these rules. You have to originate these loans and some of it may be unfair, but since there are declining values nationwide, whatever went up must come down. There is plenty of business out there where the appraisers do come into it. Again, you do see now where the purchase market is picking up and home prices are returning to

Have there been any books that you read that may have influenced your business philosophy or management style? I don’t do a lot of reading. I did see some books about the mortgage meltdown and sub-prime crisis, but I didn’t read them because I didn’t want to feel negative about the industry. I look to the motivational side to running the business through sales and marketing and learning about the negative things that can impact your business. Right now, I am learning a lot about Fannie Mae and servicing, etc. I’m going to a lot of conferences, such as the 96th Annual MBA Convention in San Diego, to further educate myself.

Have you adopted any sort of particular technology that has helped streamline your operations? Over the last couple of years, Franklin First installed a very big back-end program called DataTrac that put tight controls into running a mortgage banking firm in place for us. We are heavily involved in the secondary market, and DataTrac does everything past the origination for us in tracking, even roll costs. When you have a loan that locks in and it rolls past that date because the funders funded it late, you could lose $50,000-$80,000 per month not knowing what your roll cost is.


Can forward loan officers sell reverse loans? We have it separated into separate forward and reverse mortgage divisions. I feel a reverse mortgage loan officer really cares about the client. They are doing it more because they embrace the reverse product. They understand the product and they understand the

more realistic numbers. When houses come down to the right price, consumers will buy. People need a place to live, it’s a fact. Some people took on too much financial responsibility, but if the payments come down to the proper levels, they will buy if its affordable. O

Are there any new lines of business that you see have great potential? At Franklin First, we are focused only on mortgages. We have a reverse mortgage division that is growing tremendously called Senior Funding Group. We were recently listed 97th in the nation for top HECM [Home Equity Conversion Mortgage] originations. We also have our wholesale lending division, Presidents First, offering correspondent and wholesale programs in 40 states. We are always looking for the next big thing and need to grow through relationship-building and not by going out there and offering commissions. Most companies don’t realize that it costs $1,500-$1,700 to originate a loan through a system, but it costs $1,000-$2,000 to close a loan marketing-wise. That is where a lot of companies make a mistake when they do marketing and sales and do not realize the actual cost. We get a lot of referral reverse mortgages. It’s a nice addition to the company.

timeline it takes, generally one to two months to close a reverse mortgage client. The reverse customer is a very sensitive client who needs to discuss issues with family members. It’s a much longer process that needs to be understood.


news flash

continued from page 14

ed mortgage servicing right impairments in the fourth quarter 2008, as interest rates dropped and refis ramped up. Almost 75 percent of the 270 companies that reported production data for this report were independent companies. Overall, the average firm in the report originated about $500 million in 2008. For more information, visit

CampusMBA approved as a SAFE Act education provider By Charlie W. Elliott Jr., MAI, SRA




Where Has the Economic Meltdown Taken Us?


Within the past year, we in the financial strange and bizarre sort of way, has industry have witnessed catastrophic opened up opportunity that most of us economic changes like never before have never experienced before. It has seen in modern times. The change, thinned out the ranks, eliminating while seeming to erupt from a typical those among us who had reached a soft market, exploded into a multifac- level of professional incompetence. The eted economic tsunami of biblical pro- storm has pruned the tree. It has portions. It resulted in a complete eco- reduced the price of property in many nomic collapse of the underpinning of places to more affordable levels. It has our financial system and provided many of us with affected every part of our more of a sense of apprelives. ciation for those assets We have, and are conthat we do have left, tinuing to experience, including friends and many negative effects family. Most of us are less from this crisis, both at a likely to invest in risky personal level and a proventures than we were fessional level. Personally, when the market drove us we have lost pride, mutuin that direction. Perhaps al funds, stocks, income, in this regard, we will jobs, credit, homes, cars have more confidence in and our professions. At a ourselves and in our deciprofessional level, we sions. Each of us now has “The economic melthave lost accounts, transdown, in a strange and a clean slate of sorts to actions, clients, co-workreprove our worth in our bizarre sort of way, has profession. The chalk is ers, credibility, bosses and subordinates. We have opened up opportunity there, and who better that most of us have lost much of our profesthan us to fill the slate sional independence to with positive and producnever experienced the heavy hand of governbefore. It has thinned tive penmanship. Yes, the ment regulation, and the circumstances and the out the ranks, elimilist goes on and on. rules will be different. We nating those among us We have also experiwill find new horizons, who had reached a enced various states of there will be new level of professional mind, including sadness, demands, and we will be incompetence.” bewilderment, anger, able to taste the wine disappointment, emptiwith a cleaner pallet. ness, pain, fear and, yes, a bit of hate. In realistic and specific terms, what It is time to get over it. While not all will be really different in the financial of the negative conditions are behind industry? Generalizing is easier than us, it is safe to say that most is, and it is being specific; however, I will throw out time to move on. Yes, there will be a few issues and conditions, which we other shoes to drop, but we have seen may find ourselves looking at in our the worst. We are wiser, tougher, leaner profession over the next few years. and meaner than we were in the past. Fewer people will own homes if recent We serve no purpose by worrying, pout- reports are to be believed. Rather than ing, whining and generally serving as looking at homeownership at the 70 pernegative examples to those around us. cent level, we will probably be looking at In short, we are better people now after levels in the mid-to-low 60s. That does having weathered this storm. continued on page 20 The economic meltdown, in a

CampusMBA, the education division of the Mortgage Bankers Association (MBA), has announced it has been approved as an educational provider through the Nationwide Mortgage Licensing System (NMLS) to offer courses under the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act). The SAFE Act, part of the Housing and Economic Recovery Act of 2008 (HERA), establishes minimum national standards for mortgage training, both in pre-licensing and continuing education. In order for an educational provider to offer these courses, it must be approved by NMLS, which was created by the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) and is responsible for implementing these requirements. “CampusMBA has long been committed to ensuring our members have the relevant tools and training necessary to comply with the most up to date industry and regulatory standards,” said Paul Green, MBA’s senior vice president of corporate relations, education and business development. “We are thrilled to provide thorough and dynamic courses to ensure companies and their staff can meet the SAFE Act’s pre-licensure and continuing education requirements with minimal disruption to their important daily business.” Requirements for all state-licensed mortgage loan originators include at least 20 hours of pre-licensing education and at least eight hours of continuing education on an annual basis. Required subject matter includes federal law and regulations, ethics, fraud, consumer protection and fair lending issues, as well as instruction on mortgage origination. CampusMBA offers all approved SAFE Act training privately at company locations or online for staff convenience. For more information, visit

National Default Servicing becomes The National Groups

National Default Servicing LLC (NDS), a provider of default and servicing related

solutions to the real estate industry, announced the integration of its mortgage service operations under the new parent name, The National Groups. Affiliate companies to be combined include: National Default Services LLC, an outsourcer of asset management, marketing and disposition of real estate-owned (REO) properties held by government agencies, institutions and private investors; National Collections & Loss Mitigation Services LLC, a default management firm specializing in short sale and modification services; National Valuation Services LLC, a provider of all types of valuation products and valuation quality control services; and National Closing, Escrow and Title Services Inc., a licensed and regulated closing and escrow services firm. “The National Groups is an enterprise designed to create a meaningful change in the way the institutional and private investors service their assets,” said Bob Vanderbilt, chief executive officer of The National Groups. “Our combined operations represent a streamlined, cross-functional approach that will achieve a higher degree of efficiency than the affiliates could ever produce individually.” The National Groups will be providing its clients a full suite of customizable services, nationwide resources, flexible technology, and full compliance, a portfolio management methodology Vanderbilt calls “Service Without Boundaries.” The firm’s approach to service delivery, operating systems, and data will consider such aspects as SAS 70 compliance, carbon footprint impact and conformity with federal debt collection practices. These entities are also licensed to collect debt in all 50 states. “The combined expertise of The National Groups is an effective response to the volume of distressed borrowers under the [Home Affordable Modification Program] HAMP initiative and the significant increase in foreclosed and REO properties nationwide,” said Larry Bird, chief marketing officer of The National Groups. “The company represents a veritable ‘who’s who’ of professionals to support these efforts from coast to coast.” For more information, visit

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

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

Rebuilding Trust After a Layoff By Andrea Obston O


How does a company rebuild trust after cation and focusing on the positive. For a layoff? Is it best to push past the lay- example (assuming this is true), you tell offs and hope no one notices? Not in your customers, prospects, employees, today’s environment. Not if you expect vendors and the rest of the world that to be in business tomorrow. the layoffs were a thoughtful business We know that companies that decision on the part of strong company weather layoffs most successfully are with a good future. In plain language those that communicate the decision (and before people have a chance to honestly to all the stakeholders it make up their own stories), you need to touches. But most companies are so deliver these kinds of messages: focused on the internal aspects of this difficult decision that they choose to O We have had a staff reduction of X ignore its external impact. This puts number of people; their company’s reputation in jeopardy. O We value all employees who work As a manager or business owner, you for this company and did not make may be faced with the tough decision of this decision lightly; whether or not to deal with your layoff O This was a difficult choice that we publicly. It will help if you remember made to ensure the long-term this: The purpose of most layoffs is to health of this company; preserve the business in tough econom- O The layoffs were necessary because ic times so it lives to fight another day of the impact of prevailing economin the future. In other words, the busiic conditions. These have hit our ness (and you) will be experiencing the customers, and therefore, our botshort-term pain of a laytom line. (By the way, it is off in exchange for the not necessary to be as long-term health of the dramatic as one organizacompany. It’s not pleastion that ascribed the ant to face, but it is often need for layoffs to “the a solid business judgment global financial crisis”). made with an eye O This company is towards the future. And strong and has a long hisin order to preserve the tory of weathering ecocompany and its reputanomic changes. It will tion, you need to include continue to provide the managing the public face superior customer service of that layoff as part of and products that have “As a manager or your downsizing plan. characterized it for the business owner, you Ignoring this point puts last [insert number of] may be faced with the future of your business years. at risk. Businesses that the tough decision of close their eyes to the comIt is also helpful to prewhether or not to munication aspect of lay- deal with your layoff pare for any outside interest offs can expect to find in the layoff as a symbol of publicly. It will help themselves on the defense. if you remember this: a trend in your industry or No one looks good in region. While these stories The purpose of most defensive mode, especially have been done over and layoffs is to preserve when they are dealing with over, there is a good chance angry customers, curious the business in tough that a reporter or blogger economic times so it reporters and surprised may seize on this if they are local government officials. lives to fight another looking for an angle to The last guy who looked make the story of your layday in the future.” good playing defense was off more “interesting.” Troy Polamalu of the Pittsburgh Steelers. Here are some basic steps that will As crisis managers, we are called in to help you prepare for the public face of companies in the planning stages of a lay- your layoff decision: off to help them with their communications before, during and afterwards. We Make a list of all groups help them put a public face on this very impacted, in addition to private decision. Over the years, we’ve the employees laid off learned two key truths in this work: Look at both internal and external audiences. Internally, these may include O Companies either choose to take some or all of these groups: Remaining charge of their own reputations dur- employees, managers, members of the ing difficult times or end up allow- board, stockholders and investors and ing others to do it for them; and retirees. Externally, think about cusO People judge companies by the way tomers, vendors, affiliated organizathey behave when the going gets tough. tions, referral sources, industry trade groups, government officials (locally Companies either take control of and statewide), customers, lenders and these situations or the situations end up members of the community. controlling them. Taking control means engaging in straightforward communicontinued on page 24


value nation

continued from page 18

not mean one-third of us will never own homes, but we may not own them at the same time. We are likely to see younger people moving up the ladder to homeownership, while older people sell their homes and move into facilities offering more care with less maintenance. We will all own relatively less expensive homes. More of us will be content to stay in the smaller home and make it our palace, rather than borrow more than we can afford in an effort to chase the unrealistic versions of the American dream. Home values will stabilize, but not increase so fast in the future. Fewer people will be owning homes, and tighter credit will curb demand. There is a lot of talk about more appraiser independence or less pressure from those with a stake in closing a transaction. This would lead one to believe that appraisals will be more accurate. While that is a good goal, it is a lofty one. There will be, at a minimum, more emphasis placed upon separation between those selling loans and those performing the appraisal. There will be appraisal management companies, but they will not take over the business as some have suggested. Banks will continue to order appraisals directly from appraisers. Fewer appraisals will be ordered by mortgage brokers. We as a group will have less debt

going forward. Credit will be harder to get and people will have more equity in their homes. Credit card debt will be tighter and fewer of us will be tempted to run up large, unsecured debt. We will have less reason to refinance our homes to pay for credit card debt. That will be a very good thing. In the end, the finance industry will be smaller. There will be fewer loans and fewer new homes. More emphasis will be placed on quality and less on quantity. It will be a long time before we see home prices increasing at such a frantic pace as 25 and 30 percent per year. The numbers of new homes constructed each year will be smaller. It may be just a while before we see politicians placing the taxpayers’ money at risk at the frantic pace, which we saw recently. Would that not be refreshing? In a nutshell, we are in for some rightsizing of our financial system, which has been long overdue. We will be just fine and, who knows, we may just look back on the past and say it was time for it to happen and that we are better for it. Charlie W. Elliott Jr., MAI, SRA, is president of Elliott & Company Appraisers, a national real estate appraisal company. He can be reached at (800) 854-5889, e-mail or visit his company’s Web site,




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Lend America to launch wholesale mortgage lending platform Lend America has announced that it is entering the wholesale residential mortgage lending business by launching Lend America Wholesale, to compliment its nationwide retail lending platform, and offer mortgage brokers and borrowers greater choice, knowledge and efficiency in the mortgage lending process. Lend America Wholesale anticipates accepting its first wholesale loan in mid-October 2009. Lend America Wholesale is built around a mission of responsible lending, with a clear focus on service and speed. The business is looking to build longterm relationships with a high quality, skilled and credible mortgage brokers. “A full blown reset has taken place within the wholesale lending channel since our parent company strategically exited the wholesale business in 2008,” said Michael Ashley, chief business strategist of Lend America. “With wholesale lending platforms dwindling we believe today there is a tremendous opportunity to help mortgage brokers better meet borrowers’ needs, increase close rates and rebuild their businesses. Through our innovative centralized model and systematic loan process, which address risk factors as well as time and cost inefficiencies in the lending value chain, we can quickly become a major resource for the mortgage brokerage community. In addition, we are able to build off our past experience to insure we are better equipped to meet the needs of the mortgage brokerage community.” Lend America Wholesale will be based in Melville, N.Y. and operate through a centralized model in order to better mitigate the risk associated with the wholesale lending process and improve the consistency and quality of the broker experience. Building on a base infrastructure of 25 geographic focused teams, more the 30 Federal Housing Administration (FHA) Direct Endorsed underwriters and an automated paperless platform for all loan originations and processing, Lend America Wholesale will look to partner with mortgage brokers committed to extensive FHA product knowledge, ethical behavior, customer service and open and honest communication. The business is currently licensed to do business in 47 states. “With our unparalleled leadership and

technology platform, which brings the entire mortgage process into a single user friendly application, we believe we can help mortgage brokers build a better business,” said Ashley. “In addition, our wholesale team has the experience to offer realtime solutions and train or answer questions on FHA products or loan processes in order to help our mortgage broker partners close loans faster. In the current challenging environment mortgage brokers need the right partner to be successful and we can definitely fill the void that is currently impacting the wholesale channel.” For more information, visit

Informative Research and Comergence partner to provide Trusted Mortgage Professional Seal Informative Research has partnered with Comergence Compliance Monitoring LLC to complete the requirements for the Comergence Trusted Mortgage Professional Seal. Used by consumers and lenders to ensure that brokers meet the highest standards of honesty and integrity, this seal verifies member ethics, professionalism and compliance with local, state and federal laws. Informative Research provides the prospective member access to their income tax records (4506-T), as well as tools to become Red Flags compliant. These are combined with other components, including business and license history to complete the application for the Trusted Mortgage Professional Seal. “The need for thorough vetting of mortgage brokers has never been greater,” said Greg Schroeder, president of Comergence. “With the income verification and Red Flag compliance tools from Informative Research, we have completed the requirements for the full certification of brokers, setting a new standard of professionalism for the industry.” For more information, visit or

Mortgagebot and form marketing alliance

Mortgagebot LLC has announced a new referral alliance with Honolulu, Hawaii-

AllRegs SAFE Act course approved by NMLS

sion of learning objectives; the course must have sufficient material, the course must be of sufficient difficulty; the course must be of sufficient length; the course must be delivered in an environment conducive to learning; and the course must have a defined start and ending time. “This approval brings AllRegs one step closer to achieving our goal of being the premier source for SAFE Act education and helping industry professionals meet their licensing requirements,” Thoms added. State-licensed mortgage loan originators are currently required to have the 20 hours of pre-licensing education completed by Jan. 1, 2011 or an earlier date set by each state.

Non-licensed mortgage loan originators must have their pre-licensure education completed by July 30, 2010 or a deadline determined by the regulator of the state in which they do business. For more information, visit

LPS acquires fraud prevention provider Lender Processing Services Inc. (LPS), a provider of integrated technology and services to the mortgage and real estate industries, has announced its acquisition of Verification Bureau, a developer of fraud prevention and

Residential Mortgage Banking Branch Program for Professionals Guaranteed, an established and well-funded Mortgage Banker since 1992, is positioned to continue its prominence in the industry. As a leading FHA Direct Endorsed Lender, we underwrite all files in-house. This allows for faster approvals, common-sense underwriting and timely closings. We are actively seeking relationships with productive mortgage teams and entrepreneurial mortgage professionals.


108 Corporate Park Drive, Suite 301, White Plains, NY 10604 CALL: Kelley Berkheiser at (443) 418-7213 or Louis Tesoriero at 888-329-GHMC.

continued on page 26


AllRegs has announced that its 20-Hour Mortgage Loan Originator SAFE Comprehensive course has been approved by the Nationwide Mortgage Licensing System & Registry (NMLS). The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) requires that pre-licensing and continuing education courses for state-licensed mortgage loan originators be approved by the NMLS. Currently, 20-hour pre-licensing and eight-hour continuing education courses are set as the minimum requirements in every state under the SAFE Act. In order to meet these SAFE Act requirements, courses must be approved by the NMLS. AllRegs’ 20-Hour Mortgage Loan Originator SAFE Comprehensive coursework fulfills the entire 20-hour prelicensing requirement. “We are happy to announce that AllRegs’ 20-Hour Mortgage Originator SAFE Comprehensive course has been granted ‘NMLS-approved’ status,” said Dan Thoms, senior vice president for

AllRegs. “Now, loan originators will be able to fulfill their 20-hour pre-licensing requirement with this single, all-inclusive course. Additionally, lenders are already calling us now to provide a comprehensive training solution at their location. They are looking for this approved course, the practice assessment questions developed by AllRegs, and access to our state compliance product to provide a best-in-class solution for meeting SAFE Act requirements and preparation.” The NMLS must “apply reasonable standards in the review and approval of courses” in order to approve a course to fulfill SAFE Act requirements. The NMLS has established six criteria that a course must satisfy to gain approval, including: the posses- O

based Inc. Under the terms of the agreement, will recommend the integrated, multichannel Mortgagebot PowerSite pointof-sale (POS) platform to its clients and prospects as a preferred solution. “Mortgage lenders are increasingly turning to advanced POS automation as a means of reducing costs, increasing efficiency, and providing better service,” said Dan Welbaum, chief marketing officer of Mortgagebot. “Our new alliance with PCLender enables even more banks and credit unions to gain easy access to mortgage POS technology that can make them more competitive—and more profitable.” Mortgagebot PowerSite is a “hosted,” software-as-a-service (SaaS)-based solution. Both Mortgagebot and products can be conveniently deployed and updated via the Internet; with no PC software for lenders to install or maintain. PowerSite integrates a lender’s consumerdirect mortgage Web site with every other mortgage point of sale: the branch, the call center, and the lender’s team of professional loan officers. “Today’s market needs efficient, affordable mortgage automation,” said Sean Dugan, vice president of sales and marketing at “The integration of PowerSite with our Web-based LOS platform provides lenders with a robust, highly compliant, and cost-effective solution that can handle every aspect of the mortgage-lending process.” The new alliance gives clients ready access to mortgage POS tools that can help better serve borrowers, but also to manage increasing application volume and maintain full regulatory compliance—elements that are critical business requirements in light of today’s rising mortgage volumes and sweeping regulatory changes. For more information, visit or


Obama Administration announced its intention to revamp the regulatory framework.4 In a white paper, wistfully titled Financial Regulatory Reform—A New Foundation: Rebuilding Financial Supervision and Regulation5 (Plan), the Administration suggested new regulatory schemes to prevent a recurrence of another financial crisis. Admitting that the “government could have done more” to prevent the crises that ensued throughout the financial system, the Plan declares: “We must build a new foundation for financial regulation and supervision that is simpler and more effectively enforced, that protects consumers and investors, that rewards innovation and that is able to adapt and evolve with changes in the financial market.”6




By Jonathan Foxx


The Consumer Financial Protection Agency (CFPA) is on the way and its gestation stage will not be as long as many expect.1 Although its nascence will endure the inevitable crucible of politics churned out by the Congress, federal and state regulatory bodies, bank and non-bank industry lobbyists, and eminent legal scholars,2 the actors in this drama seem to argue, at one extreme, for a CFPA with robust oversight and regulatory enforcement authorities, and, at the other extreme, some kind of oversight agency that reviews financial products and consumer protection statutes, but without the authority to create new guidelines or enforce such protections. What is com“There are other ing could be a witches’ brew of regulatory authorities components to the migrated from various existing regulatory venues, CFPA legislation that along with a red hot dash of new authorities especould derivatively cially aimed at regulating the non-bank industry. The impact many aspects Consumer Financial Protection Agency Act of 2009 of the mortgage (Act), HR 3126, is viewed by politicians and many in industry. The Plan is the mainstream media as the antidote to preventing another toxic “mortgage meltdown.”3 complex, nuanced, Whatever newly legislated agency we are eventualand far-reaching.” ly confronted with, it is important to understand the implications of the many features being suggested for the CFPA. There are cogent arguments on both sides of this issue, given industry orientation and political bias. More deliberative, though, would be to ask some tough (and perhaps disturbing) questions, the answers to which will help us to evaluate the proposed and even final legislative results. It’s time to ask those tough questions now, however impolitic they may seem, in order to be able to evaluate the import of the legislation. What follows is a set of probing questions, along with some tentative answers, that should help us to manage our expectations for the CFPA.

Will the CFPA improve the current regulatory framework? Recent events have demonstrated that the existing regulatory framework is either dysfunctional or in need of a complete overhaul. In many cases, just enforcing current regulations might have stemmed or slackened the mortgage crisis; however, there were challenges for which the regulations were not adequately responsive. The

Some believe that any improvement is better than no improvement at all. Given the dismal enforcement of existing regulatory mandates, there seems to be some systemic dysfunction. Indeed, a “report card,” issued by the House Financial Services Committee, demonstrated “the poor record of the Federal Reserve in using the tools provided by Congress to protect consumers from abusive financial industry practices,” and asserting that “consumer protection has long been overlooked by federal regulators, and their motivation to protect consumers has been driven more by congressional pressure rather than a sense of duty to protect the American public.”7 The basis for creating the CFPA rests on the assertion that “as abusive practices spread, particularly in the market for sub-prime and non-traditional mortgages, our regulatory framework proved inadequate in important ways.”8 Systemic risk is supposed to be remedied through the CFPA by consolidating into it certain authorities from other regulatory bodies, as well as by having it raise the standards between and among financial intermediaries.

Will regulatory consolidation lead to greater consumer financial protections? It should be noted that there are three areas of divergence between the Act and the Plan. First, the Act does not transfer oversight and enforcement authority over the Community Reinvestment Act to the CFPA;9 second, the Act does not eliminate the thrift charter, and, by extension, the Office of Thrift Supervision (OTS); and third, the Act makes reference to “the head of the agency responsible for chartering and regulating national banks,”10 but not an oversight supervisor. However, the Plan calls for the transfer of CRA enforcement authority to the CFPA, eliminates the thrift charter (converting thrifts to state or national banks),11 and suggests the establishment of a National Bank Supervisor. Consolidation of regulatory authorities will be considerable. The Plan is actually proposing to transfer and consolidate within the CFPA primary enforcement authority over the consumer financial protection functions currently performed by the Federal Reserve’s Board of Governors, the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA) and the Federal Trade Commission (FTC). This includes exclusive authority over all related research, rule-making, guidance, supervision, examination and enforcement activities. At least 16 existing consumer protection laws will be included in the transfer, giving new exclusive rule-making and examination authority to the CFPA. These laws include: O Alternative Mortgage Transaction Parity Act (AMTPA)12 O Community Reinvestment Act (CRA)13


Consumer Leasing Act (CLA)14 Electronic Funds Transfer Act (EFTA)15 Equal Credit Opportunity Act (ECOA)16 Fair Credit Billing Act (FCBA)17 Fair Credit Reporting Act (except with respect to sections 615(e), 624 and 628) (FCRA)18 Fair Debt Collection Practices Act (FDCPA)19 Federal Deposit Insurance Act, subsections 43(c) through 43(f)(12) (FDIA)20 Gramm-Leach-Bliley Act, sections 502 through 509 (GLBA)21 Home Mortgage Disclosure Act (HMDA)22 Homeownership and Equity Protection Act (HOEPA)23 Real Estate Settlement Procedures Act (RESPA)24 SAFE Mortgage Licensing Act (SAFE Act)25 Truth-in-Lending Act (TILA)26 Truth-in-Savings Act (TISA)27

We are the lender, and final decision maker, not a broker. WE ARE NOT CREDIT SCORE DRIVEN, We look for loans that improve a clients situation, in fact we recently increased our funding capacity. • No Credit Score Minimum -NO DOC and STATED Welcome In Certain Situations! • Residential & Commercial • Loan Amounts $100,000 to $2,000,000 • Debt Consolidation, Foreclosure and Bankruptcy Buy-Out • First and Second Trust Mortgages

Never A Pre-Payment Penalty

Does the CFPA thwart financial innovation?

1. Loan must show tangible net benefit to borrower 2. Borrower must demonstrate some capacity to repay 3. Is the appraisal accurate? We are going to verify, not low ball your appraisal. It's Just That Simple...

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continued on page 25

Our 3 Point Lending Philosophy:


Winston Churchill wrote that “If you have ten thousand regulations you destroy all respect for the law.” One might also add, perhaps, that you could destroy all respect for innovation as well! At least that is the argument against allowing the CFPA to regulate consumer financial products. Both price discovery and innovation in financial products often come through the arbitrage created in a dynamic and open market. Although a regulator might have no immediate concerns with respect to the exercise of its prudential function, such exceptional, dynamic market activities as price discovery and innovation could be viewed with much apprehension by an agency whose specific mandate is to provide consumer protection. The debacle is made even more clear when the Plan advocates for a “plain vanilla” financial product—whatever that is supposed to mean! Presumably, this is a financial product which offers the legislation’s motifs of transparency, simplicity, fairness, accountability, and access to all.28 These types of products could be “standardized” fixed-term mortgages without pre-payment penalties, and would require financial institutions to offer them alongside the institution’s other products. Such standards are “simpler and have straightforward pricing,” and these products are to be disclosed “prominently, alongside whatever other lawful products” a provider chooses to offer.29 The premise, of course, is that there is no efficient market upon which to base a regulatory framework. To put it bluntly, the need to codify the “plain vanilla” product and promulgate its regulatory management through an oversight agency is a rejection of the consumer as a rational, informed actor in the marketplace. It is an embracing of the rule that consumers need to be protected from themselves and regulations provide that protection. However, it is often the case that regulations must necessarily exclude certain activities, even though it may include other activities. What may be excluded, though, could be the very kinds of innovations that allow a market to evolve, grow, and be responsive to public need. The damp- O

Although the CFPA would be assigned “The debacle is made even more primary authority to enforce these laws, clear when the Plan advocates for other federal regulators, including the a ‘plain vanilla’ financial prod- banking agencies and the FTC, would uct—whatever that is supposed to retain overlapping, secondary enforcement authority over certain requiremean! Presumably, this is a finanments. And state attorneys general cial product which offers the legis- would be empowered to enforce federal lation’s motifs of transparency, laws under the CFPA (subject to any existsimplicity, fairness, accountability, ing limitations in the laws to be transand access to all.” ferred to the CFPA’s authority). State consumer financial protection laws would not be preempted, except to the extent that they are inconsistent with federal law (although such state laws could be stricter than the federal laws, in which case they would not be preempted by federal law). A quick look at the list of affected laws indicates that the CFPA’s authorities will be coming for the most part from federal banking statutes. Therefore, this begs the question: how does it benefit the consumer by transferring these existing authorities from their current regulators, who already are or should be enforcing these laws, to a new primary regulator to do the very same enforcement measures? Two views are generally held in response. The first maintains that there is an inherent conflict between encouraging institutional profitability and availability of credit, but also offering risky, complex, and high-cost loans to borrowers which can, at times, lead to abuse. An opposing view would be that adding yet another layer of regulatory control does nothing really to alter the fact that broad and robust measures of consumer protection are already in place. Presumably, the CFPA’s mandate should be over time to eliminate bureaucratic waste and duplicative procedures, and bring about the further streamlining of authorities. The goal, apparently, would be to create an agency that has the capacity to proactively enforce existing and new powers as well as respond quickly and deliberately to critical financial conditions.


rebuilding trust

continued from page 19

Understand the concerns Communicate with each of each group and be of these audiences in the prepared to address them most direct way possible Often, these concerns will vary. Employees will be most worried about losing their jobs in the event of more layoffs, and how the layoff will impact them if they remain. Investors need to know the bottom line impact of this move, especially if it sets the stage for longterm profitability. Local government officials, on the other hand, will want to know what you’re doing to help laid off workers find other jobs. Customers need to be assured that service will not be impacted.

That may be through written letters, phone calls, pro-active press releases (if you want announce the layoff yourself), reactive press statements (if you prefer to have something on-hand in response to a reporter’s call), posts on your Web site, and/or updates on any social media your company uses for self-promotion. Remember, you’ll be depending on these outlets to carry the good news about your company as part of your recovery. That means treating them

with respect during the tough times to gain once you tell one person, you can expect the story to be public. Employees Tweet. their trust for the future. Members of the board have neighbors in Remember that timing is the media. Vendors share information with your competitors and retirees stay in touch everything When we pre-plan for layoffs with our with each other. The best way to “manage” clients, the most difficult part is the timing this process (and you’ll note that I purposeissue. It all boils down to this: The more ly put that word in quotes) is to have a writpersonally affected someone is by the lay- ten internal policy about how information off, the earlier they need to be told direct- is to be shared outside company walls. That ly. Not by reading it in the newspaper; not policy should designate one person as the by stumbling upon it on someone else’s only liaison with the press. It should also Facebook page and not by catching wind include explicit instructions to all employof it through the grapevine. They need to ees about how they handle any press calls or requests for interviews outside the comhear it from you. pany walls as sometimes happens after a layoff. That should include a strong stateFight information leaks as aggressively as you can ment that they not speak with any member In today’s “porous” business environment, of the traditional or “new” press (i.e. bloggers) and a phrase that allows them to tactfully send the caller to the official press contact. We prefer something like:

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


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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There is only one step you need to take; visit or call us at 877-877-4834 option 5.

O “We have someone who’s handling calls from the media.” O “Give me your contact information and I’ll make sure gets into contact with you.” That sounds a lot less suspicious than, “They told me I’m not allowed to talk to you.” Your policy statement should also cover what people write about the company when they participate in social media, such as LinkedIn, Facebook and Twitter. While the jury is still out on how much control you can exert over people’s off-work communications, you can and should explain why refraining from social networking about the company’s internal affairs benefits everyone associated with it, especially in stressful times. And remember that the more thoughtfully and openly you handle communications with them, the more respectful they’ll be of your requests.

Look for ways to deliver good news after a respectful time It’s not enough to say your company is strong and expects to weather hard times, you’ve got to prove it. As part of your communications planning, look for ways to demonstrate that your company is back to business. Search out customer hero-tales. Congratulate employees who picked up the slack. Celebrate small victories internally and announce them publicly. Touch base with customers to make sure transitions to new customer contacts are going smoothly. Be willing to learn from any complaints you hear. Your company has worked hard to establish relationships of trust with your customers, employees and local reporters. Those relationships are the assets upon which you can rebuild your company’s future. If they are cultivated and nurtured, they’ll get you through and past these difficult time and lay the foundation for your future success. Andrea Obston is president of Andrea Obston Marketing Communications LLC. Its subsidiary, Andrea Obston Crisis Management, provides public image crisis planning and management. She may be reached by phone at (860) 243-1447 or e-mail

asking the tough questions

continued from page 23

ening effect of restrictive, consumer protection regulations might eventually leave the consumer with less financial options. Unexpected consequences, as we all should have learned recently, cannot be regulated away.

Evaluating the CFPA: Key questions There are other components to the CFPA legislation that could derivatively impact many aspects of the mortgage industry. The Plan is complex, nuanced, and farreaching. For example, the preemption provisions in the Act itself, if narrowly interpreted, could have a detrimental effect on a bank’s financial products and services on a multi-state basis, thereby increasing administrative costs. On the other hand, if the CFPA broadly interprets its authorities, the same provisions could lead to multi-state companies having a single set of rules, thereby depriving consumers of the kinds of full protection from predatory products that they otherwise would be receiving under a state’s own statutory framework. The complexity of this new legislation—especially because it creates a new government agency—is structured to provide the following five stated objectives:30 1. Promote robust supervision and regulation of financial firms. 2. Establish comprehensive supervision of financial markets. 3. Protect consumers and investors from financial abuse. 4. Provide the government with the tools it needs to manage financial crises. 5. Raise international regulatory standards and improve international cooperation.

12—12 U.S.C. §§ 3801 et seq. 13—12 U.S.C. §§ 2901 et seq. Not included as an “Enumerated Consumer Law” in HR 3126, but enforcement authority over this Act is transferred to the CFPA. HR 3126 § 184(b)(2). 14—15 U.S.C. §§ 1667 et seq. Not specifically referenced in HR 3126’s definition of “Enumerated Consumer Law, but enforcement authority over this Act is transferred to the CFPA. HR 3126 § 184(b)(2). 15—15 U.S.C. §§ 1693 et seq. 16—15 U.S.C. §§ 1691 et seq. 17—15 U.S.C. §§ 1666-1666j. Not specifically referenced in HR 3126’s definition of “Enumerated Consumer Law;” but enforcement authority over this Act is transferred to the CFPA. HR 3126 § 184(b)(2). 18—15 U.S.C. §§ 1681 et seq.; and, 15 U.S.C. §§ 1681m(e), 1681s-3, 1681w. 19—15 U.S.C. §§ 1692 et seq. 20—12 U.S.C. § 1831t(c)-(f). 21—15 U.S.C. §§ 6802-6809. 22—12 U.S.C. §§ 2801 et seq. 23—15 U.S.C. § 1639. 24—12 U.S.C. §§ 2601-2610. 25—12 U.S.C. §§ 5101-5116. 26—15 U.S.C. §§ 1601 et seq. 27—12 U.S.C. §§ 4301 et seq. 28—Op.cit. 5, pp. 63-67. 29—Op.cit. 5, p. 15 30—Op.cit. 5, pp. 3-4.

The means by which the CFPA accomplishes the above-enumerated objectives will determine both its longevity and efficacy. Nevertheless, how will you evaluate the implications of the Consumer Financial Protection Agency Act of 2009, as it makes its way through committees, hearings, votes, and eventually to President Obama’s desk? Your answers to the following five questions can guide your judgment. Will the CFPA:

• Daily updated mortgage • Find loan programs • Discover local and industry news • Industry blogs national events • Write your own blog • Get access to video

1. Improve the transparency and fairness of financial products and services? 2. Provide transparent and uniform enforcement of regulations? 3. Focus on the safety of credit products, features, and practices? 4. Protect consumers from discriminatory, deceptive, or fraudulent loans? 5. Contribute to long-term sustainability of lenders and the economy as a whole? Each member of the mortgage industry will need to research and answer these questions individually, and, as market participants, decide collectively how to prepare for the substantial and fundamental changes soon to become the law of the land.

For more information on author Jonathan Foxx, visit Lenders Compliance Group on the Web at

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1—Foxx, Jonathan: “The Birth of an Agency,” National Mortgage Professional Magazine, Volume 1, Issue 5, September 2009, pp. 24-27. 2—On Sept. 29, 2009, more than 70 law scholars who teach in fields related to consumer law and banking law issued a detailed “Statement of Support” demonstrating their strong views in favor of passing HR 3126 and the creation of the CFPA. Hyperlink: 3—Consumer Financial Protection Agency Act of 2009, House Bill 3126. The Financial Services Committee in the House, chaired by Rep. Barney Frank (D-MA), commenced hearings on the CFPA in September 2009. 4—U.S. Department of Treasury, June 17, 2009, TG-175: President Obama to Announce Comprehensive Plan for Regulatory Reform. 5—Financial Regulatory Reform—A New Foundation: Rebuilding Financial Supervision and Regulation, issued by the U.S. Department of Treasury on June 17, 2009, and updated Aug. 11, 2009. 6—Ibid. p. 2. 7—The Federal Reserve’s Record on Consumer Protection, issued by House Financial Services Committee, Chairman Barney Frank (D-MA). Press Release: Sept. 23, 2009. 8—Op.cit. 5, p. 55. 9—HR 3126 § 101(16). 10—HR 3126 § 112(a). 11—Opt.cit. 3, pp. 30-31. O

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

United Northern is Seeking Highly Qualified, Experienced Mortgage Professionals To Grow as We Grow


keep in touch and provide important FHA updates. Before ending your presentation, let them know about the next presentation by telling them the title and what they will learn.




Getting the FHA Business: Presentation and Paradigm


I’ve been asked many times by loan officers just how to develop Federal Housing Administration (FHA) business. My patent response is “You have to brand yourself as an FHA specialist, get out there and give FHA presentations to your FHA referral sources and then follow up.” If you are proficient in the basic FHA guides and want the FHA business, you need to make yourself the resource for FHA information. Remember, one of the biggest burdens a real estate broker has is providing useful and effective training to their agents. The FHA guides are so vast and changing so often, even we as loan officers have a hard time keeping up. What do you think that means for the real estate community? In the last five years alone, there have been more than 1,000 changes to FHA loan programs! Keeping up with FHA is hardly the priority of a real estate agent! And yet, the more knowledge they have, the more it helps their business. That’s where you, the FHA information source, come in. Real estate agents need some catching up on FHA, and they need you to help them. Unfortunately, many loan officers feel they lack the requisite FHA knowledge to go out there and do FHA presentations. I have to tell you that if you know the basics, then you start presenting the basics. Agents don’t need to become FHA underwriters, they just need the FHA information that can help them add to the value they can give their clients. As you learn more guides, go out and present them to your agents. Over time, you will become an expert and serve as a valuable resource to as many agents as you can effectively manage in your database. The crucial factor in being successful in growing your business through presentations is the paradigm you establish. The paradigm I’m referring to is the pattern of steps you take after you walk out of an office following your FHA presentation. This is where many loan officers drop the ball: By failing to implement a post-presentation system (PPS). But this is where your referral base, and income stream, is at. Now, unfortunately I speak from personal experience when I say that many loan officers get into an office, establish great rapport with the agents, and give a great presentation. They feel great and on

top of the world, but then fail to follow up effectively because other things came up. Whether it’s a bunch of refinances or other referrals or any other legitimate distractions, the bottom line is that if you allow other things to distract you from following up, then the seeds you planted at the presentation—along with those important relationships (and future referral business)—will not bear fruit. I would like to offer you a Five Step Paradigm you can follow to help you develop FHA business through presentations: 1. Establish a series of three 15 min. FHA presentations you can offer to real estate offices. Here are some presentation ideas: “The Three Things All Realtors Must Know About FHA Buyers,” “How to Avoid the Top Three Mistakes Realtors Make When Writing Purchase Agreements” and “How to Sell Three More Homes in the Next Three Months.” In each presentation, include the guides you feel will benefit your agents. 2. Start with five real estate offices in areas that will bring you the ideal buyers you seek I got my start in FHA in inner city Detroit in the mid-1990s when the auto companies were doing well and buyers could easily qualify. I had to cultivate 10 leads to close one loan. After time, that ratio changed to 30 leads per one loan closed. I had to find business elsewhere to bring that ratio down. If you’re not sure who your ideal buyer is, you need to make that determination before you start your campaign. Call each office, ask to speak to the manager, and then talk about your FHA presentations. Sound excited when you speak about them! Focus on the benefits the agents will receive. You should be able to schedule at least two presentations. 3. The big day! Your focus should be on establishing rapport with the agents and walking away with a list of the names, phone numbers and e-mail addresses of agents. You can do this by collecting their business cards for a small raffle item, or by passing around an attendance form. Let them know you will use their information to

4. The follow-up Make a follow-up phone call to each agent that attended, and schedule an appointment to meet with them oneon-one. The purpose of this meeting is to establish a more personal relationship and learn more about them and what their business goals are. Building trust with them is paramount to them feeling confident in referring their clients to you. 5. Follow through on your word, and provide your new database with FHA tips and updates to keep them informed Continue to make appointments with the contacts you really feel you can grow with and make scheduled calls to keep your name on the top of their minds.

heard on the street

Follow this Five Step Paradigm and you will have a fresh new group of real estate agents to work with. Sometimes we get stagnant in our relationships and we need new ones to provide excitement, new ideas and enthusiasm. If you need assistance with your FHA marketing and need to access some tools that can help you develop more FHA business, you can subscribe to my newsletter, “The FHA Originator” at Go FHA! Jeff Mifsud founded Southfield, Mich.-based Mortgage Seminars LLC in 2004, has been an FHA originator for 12 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 21

Web-based verification solutions. LPS is combining its current collateral risk tools and analytic capabilities with Verification Bureau’s automated income, identity and employment verification solutions to provide the mortgage industry with a comprehensive solution for combating mortgage fraud and managing risk. Established in 2001, Verification Bureau serves 2,500 clients and 18,000 users worldwide. “Mortgage fraud is complex and evolves constantly,” said Greg Whitworth, president of LPS’ Loan Portfolio Solutions Division. “LPS is proud to expand its risk management offerings to include the most comprehensive, agile fraud solution set in the industry.” With the addition of Verification Bureau’s FraudPredator offerings, LPS now delivers automated, Web-based solutions to quickly verify applicant income, identity and employment against Internal Revenue Service (IRS) and Social Security Administration (SSA) databases. All results are delivered through secure, convenient online accounts, and users can submit and track orders in real-time. “Verification Bureau pioneered paperless and automated IRS and SSA direct verification solutions for lenders to help optimize their fraud prevention efforts,” said Esteban Reyes, CEO of Verification Bureau Inc. “By becoming part of LPS, we will take fraud prevention to the next level.” For more information, visit

Lenders One selects Affiliated Mortgage as newest preferred investor Lenders One Mortgage Cooperative, a national alliance of mortgage bankers, announced that Affiliated Mortgage Company (AMC) has become the cooperative’s newest preferred investor. AMC, a wholly-owned subsidiary of Benchmark Bank of Dallas and Plano, Texas, focuses on correspondent lending and purchasing agency-quality whole loans servicing released from a group of lenders nationwide. Through this relationship, the members of Lenders One will have access to special terms provided by AMC, while Affiliated will have special marketing and promotional opportunities to generate business from the members. “Affiliated Mortgage Company has a strong commitment to correspondent lending, and they also have a strong commitment to providing the type of customer service that is necessary to make a correspondent lending channel successful,” said Scott Stern, Lenders One chief executive officer. “Many of their employees have more than 25 years of correspondent lending experience, which shows they have what it takes to develop long-lasting, profitable relationships with its investors and lenders. With investor partners such as Affiliated Mortgage, we can continue to give our members access to programs, products continued on page 28

Saturday-Tuesday, December 5-8, 2009 MGM Grand Hotel • Las Vegas Scheduled Sessions

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• FHA the Best and Fastest Mortgage Finance Option for Your Clients Today, presented by Nancy West of FHA • Speed Dating Mortgage Style – Learn who/what is available

Saturday, December 5 NAMB/WEST Opening Reception

• Double Your Profits Without Doubling Your Workload, presented by Fred Arnold • Social Media: How to Use Facebook, Twitter & Blogging to Build Your Business, presented by Mark Madsen

Monday, December 7 Speakers in the Morning/Exhibit Hall in the Afternoon Tuesday, December 8 Delegate Council Meeting in the Morning/NAMB Board Meeting in the Afternoon

• Using Video to Build Your Business, presented by Frank Garay, Co-Creator of Think Big Work Small

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Sunday, December 6 Speakers, Education and Committee Meetings


be undertaken to review the advertising in all media, including reviews of rates, monthly payments, and other loan features. O All advertising must also undergo compliance reviews for: • Advertising terms that require additional disclosure • Catalogs or other multiple-page advertisements • Electronic advertisements • Disclosure of rates and payments in advertisements • Alternative disclosures used in television and radio advertisements • Misleading advertising for “fixed” rates, payments or loans • Misleading comparisons in advertisements • Misrepresentations about government endorsements • Misleading claims of debt elimination • Misleading use of the name “counselor” • Misleading foreign language or payments can vary without adeadvertisements quately disclosing that the interest rate or payment amounts are “fixed” only O Consult a competent risk managefor a limited period of time, rather than for the full term of the loan.

New Advertising Rules Effective October 1, 2009 Regulation Z revisions




O Implementation of the higher-priced mortgage loan (HPML) requirements went into effect on Oct. 1, 2009. Please refer to last month’s Regulatory Compliance Column (September 2009 issue of National Mortgage Professional Magazine, page 20) for helpful preparedness information regarding the mandatory enforcement of this new revision to Regulation Z, the implementing regulation of the Truth-in-Lending Act (TILA). New advertising rules were also in the TILA revisions.


O The Final Rule promulgated by the Federal Reserve Board (Board) included revisions to improve mortgage advertising (12 CFR 226, Supplement I: B; VI, B; XI: A, amending §226.16 for open-end home equity plans, B amending §226.24 for closed-end credit). O The purpose of these revisions is to ensure that advertisements for mortgage loans provide accurate and balanced information and do not contain misleading or deceptive representations. O The Board’s rules require that advertisements for both open-end and closed-end mortgage loans provide not only accurate and balanced information, but must also be designed in a clear and conspicuous manner, and provide unambiguous information about rates, monthly payments and other loan features.

Seven new advertising prohibitions O The Board has adopted rules to prohibit the following seven deceptive or misleading practices in advertisements for closed-end mortgage loans [under TILA Section 129(l)(2), 15 U.S.C. 1639(l)(2)]: 1. Advertisements that state “fixed” rates or payments for loans whose rates

ment firm or your company’s compliance manager to be sure you are correctly implementing all of the new advertising requirements, only some of which have been highlighted above. The new revisions are extensive and complex, and will require a careful and thorough compliance review of your advertising program.

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 publicly-traded 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

2. Advertisements that compare an actual or hypothetical rate or payment obligation to the rates or payments that continued from page 26 would apply if the consumer obtains the advertised product unless the advertisement states the rates or pay- and pricing that will allow them to insurance agencies and other entities. ments that will apply over the full term remain competitive in their markets.” Its products include basic and life of of the loan. Affiliated Mortgage provides its cus- loan flood determination services. tomers access to senior management in Stormwater also offers regulatory con3. Advertisements that characterize the all areas of operation, including, sec- sulting services to provide clients with a products offered as “government loan pro- ondary marketing, registration, under- comprehensive solution to their flood grams,” “government-supported loans,” or writing and funding. This access risk mitigation efforts. otherwise endorsed or sponsored by a fed- enables Lenders One members the The increased volume of loan modieral or state government entity even opportunity to communicate directly fications and refinancing activity has though the advertised products are not with any department for a timely, accu- underscored the need for lenders and government-supported or government- rate response to their questions. servicers to partner with providers that sponsored loans. “With the changes our industry has can help them handle increased volgone through during the last two years, ume efficiently and effectively. The 4. Advertisements, such as solicitation it is even more important now to know acquisition of Stormwater will allow letters, that display the name of the with whom you are doing business,” said Wolters Kluwer Financial Services to consumer’s current mortgage lender, Dan Hastings, president of AMC. expand and strengthen its presence in unless the advertisement also promi- “Partnering with Lenders One is a way to the flood determination part of the nently discloses that the advertisement work with well-recognized, experienced mortgage lending process. Currently, is from a mortgage lender not affiliated mortgage bankers located throughout Wolters Kluwer Financial Services with the consumer’s current lender. the U.S. Its members have a reputation Settlement Services unit, which in the industry that is second to none in includes the company’s PCi flood deter5. Advertisements that make claims of terms of producing quality loans, which mination solutions, serves more than debt elimination if the product adver- is the type of relationship that we pride 1,500 banks. tised would merely replace one debt ourselves in building.” Both Stormwater’s and Wolters obligation with another; For more information, visit Kluwer Financial Services’ PCi line of flood solutions offer lenders accuor 6. Advertisements that create a false rate, efficient and affordable deterimpression that the mortgage broker or Wolters Kluwer acquires minations compliant with all federal lender is a “counselor” for the consumer. assets of flood flood regulations, as well as government agency and loan servicer compliance provider 7. Foreign language advertisements in requirements. They also assist which certain information, such as a lenders and servicers ensure flood low introductory “teaser” rate, is proinsurance is maintained throughout vided in a foreign language, while the life of the loan. In addition, both required disclosures are provided only Wolters Kluwer Financial Services has companies offer a comprehensive in English. announced the acquisition of the assets service experience by employing a of Austin, Texas-based Stormwater skilled team of trained map analysts, Action steps Research Group (Stormwater), a who are available to answer any O Because there are numerous revi- provider of flood compliance solutions questions regarding exceptions and sions to advertising and “trigger to the banking and mortgage industries, regulatory implications. term” rules, immediate steps should real estate development companies, By joining Wolters Kluwer,

heard on the street

Stormwater customers will now also have access to a comprehensive upto-date, online database that provides flood determinations in a matter of seconds. The combination also enables Wolters Kluwer to offer existing Stormwater customers access to its other leading PCi compliance analytics solutions, including those that address Community Reinvestment Act (CRA), Home Mortgage Disclosure Act (HMDA) and fair lending requirements. Stormwater customers will also have access to the company’s financial crime control solutions and an expanded suite of Settlement Services. “The combination of Stormwater and our own PCi line of flood determination tools allows Wolters Kluwer Financial Services to grow and strengthen our position,” said Brian Longe, president and chief executive officer for Wolters Kluwer Financial Services. “Both companies share a commitment to offering trusted solutions and exceptional service, and I am confident the transition for Stormwater’s existing customers will be seamless.” For more information, visit

Mortgage Professionals to Watch O Joseph Murin, former president of Ginnie Mae, has been named to the board of directors for iGATE and will also serve on the company’s nominating and corporate governance committee.

O The Appraisal Institute has elected Sara Stephens as the institute’s new vice president.


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O Residential Finance Corporation has expanded its legal department with the additions of Judith Tribble as senior counsel and Sandy Finan as licensing and compliance manager. O Ken Witte has been added to the management team of Primary Capital Mortgage as senior vice president, retail lending. O USA Funding Corporation has announced that Mitch Harmann has been named a manager for the company and that Connie Burhans has been named trusted mortgage advisor. O Mortgage technology company FNC Inc. has announced the appointment of Glen Evans as company president. O John DeJulio has been named chief executive officer of The Mortgage Store—USA. O Rhonda Beck, CMB has joined Southwest Securities FSB as relationship manager of the company’s mid-Atlantic region of Kentucky, North Carolina, Ohio, South Carolina, Tennessee, Virginia, West Virginia and Western Pennsylvania. O Paulina S. McGrath, chief financial officer and chief operating officer of Republic State Mortgage, has been named president of the company. O Generation Mortgage Company has named Scott Peters president and chief executive officer. O Primary Capital Advisors LC has announced the addition of Ashley Hayes and Rick Joyner as regional manager for the company. O Mortgage Harmony Corporation has appointed Shane Chalke as company president.

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:

O Jeff Taylor, vice president and national programs manager for Wells Fargo Home Mortgage’s senior products group, has announced his retirement. Tim McDonald, a 24year-old industry veteran, has been named new national programs manager for Wells Fargo’s senior products group. O John McFarland, a 20-year veteran of the mortgage industry, has joined

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A View From the “C” Suite Marketing: Nothing Has Changed, Yet Everything is New By David Lykken




In a world where it seems like everything is changing, isn’t it comforting to know that some things just never change? Basic human nature is one of them. While we credit Abraham Maslow for documenting the five basic human needs, they have been around since the beginning of time. They are:


1. Biological and physiological needs: Air, food, drink, shelter, warmth, sex, sleep, etc. 2. Safety needs: Protection from the elements, security, order, law, limits, stability, etc. 3. Belongingness and love needs: Work group, family, affection, relationships, etc. 4. Esteem needs: Self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility, etc. 5. Self-actualization needs: Realizing personal potential, self-fulfillment, seeking personal growth and peak experiences. And anyone seeking to be successful at marketing would do well to keep Maslow’s “Hierarchy of Needs” in focus. Regardless of any “new-new” thing that emerges in the marketplace, basic human nature and needs will never change. We all know this instinctively. Yet, as a C-level executive, we have to ask the question, “Why then do so many seem to lose sight of these basic elements of marketing?” Even some of the greatest students of marketing lose sight of these basics. For example, in the book written by Al Ries and Jack Trout, The 22 Immutable Laws of Marketing (1993), a book I regularly recommend, they fail to relate back to these five basic human elementary needs. As a country, we seem to have an insatiable appetite for new things … new approaches, new theories and new ideas. This is what has made our nation so powerful and so innovative. But things can go awry when, in the pursuit of innovation, we cast-off or ignore the basic tenants of human nature. Nowhere is this more evident than in marketing.

One of the reasons I enjoy reading books like The One Minute Manager by Kenneth Blanchard is that they help me stay focused on the basics … the core aspects of human nature. As a C-level executive, I’ve come to recognize the importance of never losing sight of the basics as I explore how to be more effective using the latest “new” things. This month’s “A View From the C-Suite” is dedicated to the topic of marketing. It is written with the intent and desire to help Clevel executives in the mortgage industry use the latest “new thing,” while staying grounded in the basics.

are returning to a healthier prioritization of values and what is important … our needs. As it relates to the American dream, we are realizing that the importance of owning a home (shelter) securely trumps the delusional value of owning a bigger or better “ego” house insecurely. This is going to change the size of homes we live in, how they are constructed and how they are financed. After dealing with the consequences of an extraordinary season of excess, American citizens are returning to more conservative fiscal values. It is important that your market plans reflect this trend. We, as a country, will regain our balance and bounce back stronger then ever. As we do, we will be on a much more secure foundation.

Rethinking our approach to marketing

Financing the American dream One of the reasons it is so easy to market the American dream of homeownership is that it encompasses the following basic needs groups:

“But things can go awry when, in the pursuit of innovation, we cast-off or ignore the basic tenants of human nature. Nowhere is this more evident than in marketing.”

1. Provides shelter. 2. Offers protection from elements. 3. Provide security for us and our families. 4. Provides us a place to care for, nurture and love our families. 5. Our places of shelter can be places where we derive self-esteem, obtain a sense of achievement, independence, status, dominance and prestige. 6. And, for many, homeownership is a driving force for self-fulfillment. Regrettably, we have lost sight of the basics. As a country, we abandoned secure fiscal management for a materialistic extreme, as evidence by the T-shirt that reads, “He who dies with the most toys wins.” At the height of the last market cycle, I heard it suggested that we have “matured” as a society beyond the first two most basic need groups, namely physiological needs and safety needs. That was delusional. If there is anything good that has come from this painful recession, it is that we

So, what should be your approach to marketing in this new “needs realigned” world? Here are some suggestions I would offer to every C-level executive. Each of the following builds upon the former:

1. Explain how your products and services address “physiological needs” with statements like “By working with us, you will not lose sleep because …” Contrast yourself to those who are not taking the customer’s best interests to heart. 2. Design your marketing to address the “safety needs” of your customer, emphasizing how your products and services offer more security, order and stability to the customer’s overall financial future. 3. Develop strong meaningful relationships which will meet your customer’s “belongingness and love needs.” The mortgage business has always been a relationship-driven business. Those with the strongest “relational skills” do the best. 4. Redefine and refocus your marketing materials to meet the “esteem needs” of your customers. But remember, “secure” homeownership now trumps “size of home” ownership. 5. Through your marketing, make sure you relate how doing business with you and your company will allow your cus-

tomer to achieve their personal potential and self-fulfillment as it is now being defined. I predict that we are going to see a trend of companies marketing how working with them allows their customers to achieve financial independence through a more conservative approach to homeownership. One of the ways I monitor what society trends are is by looking at what books are on the best-seller list. Granted, this can be a bit confusing to sort out with so many agendas in the world today, but if you back up and try and see “the forest for the trees,” you will be able to discern developing trends. My observation is that many books on the best-seller list today are books about returning to basic values. Pay attention and adjust your marketing strategy accordingly. Also, seek advice from someone you respect in the market … from someone with an objective view of the industry.

New tools for marketing We live at a time when technology is bringing us many new marketing tools. We now have the Internet, the iPhone, the Blackberry, e-mail, texting, Skype video conferencing, LinkedIn, Plaxo, Twitter, Facebook and MySpace all thrown on top of HDTV, satellite radio and my latest favorite, Amazon’s Kindle. Never has there been a generation that has had more “new things” to connect with customers. Depending upon your age and “geek score,” it can be a bit overwhelming. PDAs and texting What you don’t really have a choice about is those personal digital assistants (PDAs) … those “necessary” Blackberrys, iPhones and the like. That’s right, PDA no longer just means a “public display of affection.” In spite of my addiction to my PDA technology, I have never been accused of a public display of affection for my PDA. They are one of the most intrusive devices ever invented, but to succeed in today’s marketplace, it is assumed that you have a Blackberry, iPhone or similar device. What I find interesting as the younger crowd enters the marketplace, is that “texting” is growing in dominance for quick messaging to clients. If there was any question about the growth of the text message as a communication tool, all you have to do is look at the last election and note how President Barack Obama

announced his selection for Vice President. Text messaging is a great way to connect and communicate with the next generation if that is your target audience/market. But any way you slice it, you’re going to be required to carry some form of PDA technology. Electronic social networks In recent years, we have witnessed an explosion of electronic social networks, such as Facebook, MySpace, and more recently, Twitter. These tools are fast replacing, at least for the new generation, direct snail-mail or e-mail marketing campaigns for staying in contact with your established network of past customers. It is important that you know if your customer uses one of the social networks, and if so, which one is the more dominant … that is if you only choose to use one. When it comes to more professional networking, I use them all, but have found LinkedIn to be the most effective. For market updates and quick messaging, Twitter is the more preferred method for those who are “following” you. The fact that someone is taking the time to “follow” you, gives a greater probability that they will see your quick message posts. Again, it all comes down to knowing which service your target customer prefers using. It doesn’t take too much to make that determination once you become familiar with the various social networks.

Old tools still work I wouldn’t forget too quickly about some of the old marketing tools that have worked for years. Most notably, is direct mail. For those who have mastered direct mail as a marketing strategy can attest, response rates have returned to all-time highs. There are a number of factors that are driving this, but the fact remains that direct mail can be a valuable, viable and a reliable tool in your marketing strategy. A word of caution … if you’re not big enough to do your own direct mail marketing campaigns, it is essential that you find a vendor you can trust! This is easier said than done. Get references and call them. Do your own due diligence or call someone you trust to get advice on how to do direct mail. Amazingly enough, snail mail campaigns to your past customer base can be very effective in developing an ongoing referral marketing campaign. It is very effective. In fact, in a time where legitimate e-mails and spam e-mails flood our inboxes, receiving a written postcard or letter can be very effective. Whether you use e-mail or snail mail, it should be delivered in a non-bulk, non-mass-distribution manner to be most effective. E-mails can be effective, but if sent as spam, you run the risk of your e-mail campaign getting caught in spam filters.

In conclusion

I’ve been thinking a lot about what to share with you in this article on marketing. The truth is that I could have filled the entire magazine with the ideas, mistakes, proven campaigns and little-known yet highly-effective tactics I have learned and used over the past 25 years. Before we even go into the mistakes, I want to tell you that you are extremely lucky. Yeah, I know none of us really feels too lucky in this business, so let me explain. Take a look around … you aren’t getting too many calls at dinner anymore, are you? You’re probably not getting many e-mails or direct mailings either. Why? Simply because when business slows down and times get tough, the first thing originators stop is their marketing. This is a big mistake! Now, let’s dig in and explore the most common mistakes and reveal what does work.

Mistake number one: Stopping your marketing You must never, ever stop marketing. When you take a step back and think about … we really aren’t originators, are we? In reality, we are marketers of our services, and no marketing equals no business. I mentioned earlier how lucky we are, so let me explain. Now that others have stopped marketing, there is less clutter and less competition for your prospect’s attention. That’s why I believe this is a great time to kick up your efforts. I know! You are afraid! Or, you simply don’t have a lot left for a marketing budget. Hang in there, because I will share a few no cost ways to generate business. Plus, I will give you the “magic formula” for your marketing dollars.

Mistake number two: Doing what everyone else does Let’s be honest for a minute with each other … tell me if this describes your marketing campaigns … You want to get your name out there so people will think of you when they are looking for a mortgage. That’s what I

thought when I first started. It’s what I see most other “marketing gurus” teaching. Worst of all, it’s what I see most other originators doing when they are marketing. None of us has the advertising budget of a Coke or Pepsi. This type of advertising is known as “brand advertising” and most simply cannot afford the cost or the time it takes to finally penetrate the market and get them to know who you are … or even care who you are! You see, everyone is tuned in to station W-I-F-M … What’s In it For Me … and as brutal as this may sound, no one cares that you do mortgages and provide good service. All they care about is what you can do for them. My business started changing when I discovered Emotional Direct Response Marketing. It allows you to target your prospect, give them a message they want, and most importantly, gives you the ability to track every penny you spent and makes you accountable. More on that subject in our next marketing mistake … Before we leave this mistake, I want you to read the mistake again. One of the problems with all of us telling people how great our service is and how many programs we have is that we all look the same. When that happens, the only way a prospect can choose is based on price. You never want that to happen because you will never have the best price!

Mistake number three: Not being able to track every penny you spent This goes back to the last mistake, but let’s get a little deeper. I go crazy when I hear people tell me they got a two percent or five percent response to a marketing piece. Who cares! This is a big money trap and it’s what all of the marketing companies and sales reps tell you when they try to sell you ads. All you need to care about is your ROI or “return on investment.” I don’t care if 100 people responded to my marketing piece ... all I care about (and all you should care about) is that I spent $1,000 hard earned dollars and I earned “X” in closed loans (not applications). continued on page 32


David Lykken is president, mortgage strategies and managing partner with Mortgage Banking Solutions. David has more than 34 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

By Brian Sacks


I hope this article provides you direction or provides some new ideas as you plan your marketing campaign. One of the joys I receive from writing this column each month is the feedback that I receive from you the readers. I value and welcome your feedback via e-mail. If so inclined, please write to me at and share your thoughts on this or previous articles. Also, I welcome suggestions on topics for future articles. Thank you for taking the time to read this article. I wish you all the success as you develop your marketing strategy.

The Biggest Marketing Mistakes to Avoid and What to Do to Correct Them O

Tele and video conferencing Depending on your market and the products you offer, you may find that teleconferencing and video consummate conferencing very effectively. For more of a group or mass marketing approach, GoToMeeting or GoToWebinar should be considered as an option. Our company has used both to effectively reach out and quickly bring together audiences of all sizes on specific topics of interest. It is a very fast and cost-effective way of marketing your products and services. It can be very interactive and personal, especially if you employ the video conferencing component. VoIP technologies such as Skype provide easy-to-use voice and video communications that can make all the difference in the world when communicating with customers and prospects. Something that I have started using in the last six months is Internet radio via BlogTalkRadio. To learn more about this exciting new way of marketing, go to, enter “Lykken on Lending” in the search box/window and you will be directed to my weekly radio program. You can listen to past programs that are archived there. As you listen to my program, “Lykken on Lending,” you will learn how I use this valuable tool to communicate to the industry, updates on interest rates, pending legislation and other “hot topics” related to our industry.

While we are using this as a public service tool to the mortgage industry, you could use this as a tool to market your company, your products and services.





If you are earning more than you object that companies send us promisspent, then continue. If you earned ing us a ton of new business. It’s ironic less, then you are either marketing in that most of these companies have the wrong place or your marketing never originated a loan … isn’t it. But yet, they are telling us how they materials need improvement. will help us get more deals if we pay While we are on this topic ... Most people would be thrilled to them. I have found that most originaget their ad in the big town newspa- tors never give their campaigns a fair per, or on their big city television or chance. They will send out a mailing once or radio station. But stop and think about it for a minute … let’s say you put an run one advertisement and say that ad in that big town newspaper and it direct mail and advertising doesn’t has 200,000 readers daily. Publications work. The key to direct mail and any will charge you based on their reader- other marketing strategy is to keep pership numbers (the same goes for radio fecting and testing it and improving and television as rates). The problem is upon it. With direct mail, I would rather that maybe only one to 2,000 people mail to a tight selected group of 1,000 prospects, five times, are in need of a mortrather than dropping gage, but you are paying 5,000 mailings at once … for 200,000 sets of eyewhich leads me to our balls to see your ad. next mistake. So, what do you do? Well if you are marketMistake number ing for first-time homefive: Not followbuyers, then why not ing up advertise in your local I’ll keep this one brief. You “homes” magazines? It must follow up with your will definitely be prospects. That means cheaper than the big staying in touch with the newspaper and you “Take a look around ones who do respond (I use know that anyone read… you aren’t getting ing it is most likely too many calls at din- to do this online) and conlooking for a home or else they wouldn’t pick ner anymore, are you? tinue putting your marketing message in front of it up. The same goes if You’re probably not you are marketing getting many e-mails your group of targeted prospects. reverse mortgage or direct mailings They will be ready deals. Find the publicaeither. Why? Simply when they are ready, not tions geared toward seniors in your area because when business when you need to close a slows down and times deal! and advertise there. So, how do you make get tough, the first Okay, so we have gotyour ads accountable and thing originators stop ten through some of the able to be tracked? One is their marketing. biggest mistakes, but I tool is Arch Telecom This is a big mistake!” still have a few more important things to share: ( the other is Mortgage Web Success (www.whatbri- 1. Always give your prospects more, or watch a video on the than one way to respond. I allow them components every Website must have to call an 800 number or allow them to respond online. at In each ad, I give them a phone 2. Always include testimonials from number with an extension and a Web past clients in your marketing pieces to address to respond to. Each ad or mar- add credibility. keting piece has a different extension 3. Always market! and Web address, so I can track what 4. Use free public relations to get your exactly is working and what exactly is name out. not. Why would you spend your hard- 5. Write articles for your local papers. earned money on marketing and not 6. Go meet real estate agents at your local board and teach some courses. know if it’s working? 7. Get your own radio show or be a guest on someone else’s show. Mistake number four:

Not giving your marketing a fair chance … shiny object syndrome I call this the “Shiny Object Syndrome” because we are all bombarded each and every day with the next shiny

I could go on and on here, but I think I am out of room. The bottom line here is that you must always remember that you are a marketer of your services. Read the mistakes above

again and then implement them! If you want even more tips, I have put together a 32-page free report at If you have a question you would like Brian to answer in this column, please send an e-mail with “Ask Brian Question” in the subject line to Brian Sacks is CEO of He has been an industry expert for more than 25

years, closing 6,000-plus loans totaling $1 billion. You can read Brian’s 32-page special report entitled “The Death of Mortgage Origination as We Know It” and “The 10 Things You Must Do Now to Survive and Thrive” at www.loanof f icerf or This report sells for $97 and has been downloaded by more than 9,200 originators and company owners, but is free for a limited time for readers of National Mortgage Professional Magazine. He may be reached by email at

Maximize Your Direct Mail Marketing Results by Raising Your Postal IQ By Jeremy Crosslin

prepared, you will have the ability to maximize your profits.

You’ve started the day with a sales rally and the pep talk of your life. All of your Method in the madness agents have come in for the start of an The USPS works much like the hub and important new campaign. They have spoke system of major airlines. Business mail enters the stream at reviewed the direct mail Bulk Mail Entry Units piece your provider sent (BMEUs). It is then sent to earlier in the week. one of 26 Bulk Mail Centers They’re educated on the (BMCs), the equivalent of a products. They’ve never hub for an airline, or directbeen more ready to sell. ly to one of 450 Sectional Everything and every perCenter Facilities (SCFs). son is in place … and the Generally speaking, each phones are silent. SCF handles mail for which It’s a mortgage brothe first three digits of a zip ker’s nightmare. code match. From the SCF, You invest in direct mail is sent to one of mail marketing, and the 115,000 local post offices, responses don’t come in “The success of your or DDUs (Destination when you expect they marketing campaign Delivery Units). will. Experience tells you is at the mercy of a As with airlines, you that once the letters are system that appears to can pay more to have mailed, you can predict send mail through a your mail travel “firstwhen they’ll arrive in mailboxes, but not where time warp with vari- class.” Though it will travel on the same planes, they’re stuck at the able results.” trains and automobiles as moment. The success of your marketing campaign is at the standard class mail, the first-class desmercy of a system that appears to send ignation means the mail will receive mail through a time warp with variable priority handling. If postal workers run out of time to sort all the mail that results. Lucky for you, there’s actually nothing comes to them in one day, then it’s the so mysterious about the United States standard mail that must go on standby Postal Service (USPS). It works as a well- for a delayed trip. Still, the USPS oiled machine that efficiently delivers bil- requires that standard mail be lions of pieces of mail each year. The sys- processed within a certain timeframe, tem tracks the location of each piece of so it won’t be stranded with an indefimail from the time it is dropped by the nite layover. sender until the time it lands in the local mail carrier’s hands on the way to its final Built-in accountability destination. Working with a direct mail Two key reporting documents can help provider who understands these systems you track your direct mail marketing and puts them to work for you can help pieces. The USPS provides the 3602 postal prepare you for the times the phones receipt when mail is dropped by the actually start ringing. And when you are sender at the BMEU. This stamped receipt,

provided either in electronic or paper form, will show the total number of pieces that were accepted into the facility as part of your mailing, the date they were accepted, and the exact amount of the postage. The 3602 receipt is given to your direct mail provider at no cost, and it should be passed along to you without extra charge. Very few direct mail providers create tracking reports that contain important information to help you maximize the return on investment in your direct mail campaign. Each piece of mail handled by the USPS is stamped with an intelligent bar code, which is scanned at each step in the delivery process, from initial drop off to the DDU. (Individual carriers scan mail only when delivery confirmation is requested.) Direct mail providers can access the information to locate direct mail pieces in the system and to predict when they will arrive at their destination.

Knowledge is power

Jeremy Crosslin is COO of Murfreesboro, Tenn.-based Influence Direct LLC. He may be reached by phone at (866) 634-7771 or e-mail

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If you’re choosing first-class for your mail, why not give yourself an upgrade with a knowledgeable and reputable direct mail provider? Many mortgage brokers choose

In many cases, the cost to receive these

“extras” may be the same or only slightly higher than the competition. However, in the end you will gain a strategic partner with the potential to improve your results exponentially. And you cannot get any more “first-class” than that.


First-class all the way

O Time the mailing of your piece for maximum results; O Consult with you on the staffing of

your call center based on the expected delivery rate of your piece; O Provide a stamped postal receipt to verify completion of the order; and O Track the delivery rate of your mailing to help you meet the needs of your prospects, measure your success and plan for future direct mail marketing campaigns. O

The receipt and the tracking reports will help you in two primary ways: You can confirm that your direct mail provider printed and mailed the correct number of pieces and you can plan your mail drop so that delivery occurs at a convenient time for you. By using first-class mail, you maintain greater control over when your direct mail marketing piece will be delivered. Standard mail is 10 cents cheaper, but it may sometimes be delayed by several days. You should choose the latter option only if you have the ability to take customer calls every day that mail is delivered. A knowledgeable and experienced direct mail provider will have discovered clear trends in mail delivery speed based on the day mail is entered at the BMEU. He or she will help time your mail drop so that it arrives on days when your office is open and you can plan for sufficient staffing to handle the extra calls. Experienced direct mail providers will also have gathered enough data from their mail tracking reports based on USPS daily postal scans to estimate varying delivery times in different states. If you know ahead of time that delivery is likely to come a day earlier in the Eastern time zone than in the Pacific, you can schedule extra morning phone center staff early in the week and more evening workers later in the week. With valuable tracking information and experienced professionals at your side, you will avoid dropped calls and increase your sales.

a provider based solely on the final cost per piece, but it’s worth the extra time be certain you’re working with someone who services your account beyond the basics. Before you undertake your next mailing, consider the added value of a direct mail provider who will:


Low Cost Marketing Ideas By Dave Hershman

In this harsh economic environment, everyone is faced with hard financial choices. Because of the economy, business may be slower than you would like. In response, you should be doing more marketing. Of course, marketing costs money and there is less money to allocate towards marketing when business is down. My message is that marketing does not have to be expensive. Many think that marketing is expensive because they equate marketing with advertising. Advertising is a form of marketing, but marketing encompasses areas outside of advertising. There are plenty of inexpensive marketing solutions that are very effective. This is the perfect time to be implementing these lowcost alternatives.




Make a phone call


implement our networking plans. From personal networking sites such as Facebook, to business connection sites such as LinkedIn, you now have a new way to get the word out and meet people. More and more business people are using these sites to market their services, make connections and more. There are even seminars on the topic of using these sites to implement effective networking plans.

Targeted advertising As we mentioned previously, advertising is expensive. This means that we want to make our advertising as costeffective as possible by reaching out to the right targets. Instead of casting a net over the entire city, try placing an ad in your church bulletin. These people already know you and you will be supporting your church.

A phone call to your Deliver e-mail sphere is one of the most newsletters and effective and inexpensive articles to your “Many think that marketing actions you sphere marketing is expencan take. It does not Once again, your sphere is sound like a phone call a targeted market that sive because they can be that effective, but will be more cost-effective equate marketing try making three calls than reaching the masses. with advertising. each day. Three calls per You need to build your Advertising is a form day will add up to more sphere list and find a way of marketing, but than 750 calls per year. to deliver value in a cost Together, these calls can marketing encompass- effective manner. E-mail es areas outside of make a major difference newsletters are extremely advertising.” in your results. To realize effective and the delivery these results, you must costs are next to nothing. make sure that you prioritize your calls. Prioritizing will dictate that you make Write an article or issue a the calls to the targets that have the news release most potential business to refer or the Marketing yourself as an expert epitogreatest need for your services. Finally, mizes the definition of cost-effective. you must set goals beyond getting direct People seek out experts for their advice referrals. Perhaps someone within your instead of shopping them for prices. sphere of influence can introduce you The good news is that articles and news to a significant referral partner. releases cost little more than sweat equity. Another example of marketing Network as an expert is to hold a seminar. Many When you ask for an introduction dur- local organizations would love to host ing your phone calls, you are starting an expert and having a host lowers the the process of networking. Calls to your cost of the seminar. Also, the news sphere are an effective means to net- releases you send out may lead to inviwork, but they are not the only means. tations to appear on radio and TV For example, try attending networking shows. Now you are getting the same events. Most events are inexpensive effect as mass advertising for no cost! and developing one great relationship could give you the same result as many Use synergy partners thousands of dollars of advertising. The most effective marketing produces referrals from partners. Spend more time Social networking focusing on how you can help your partThe new age gives us a new vehicle to ners build their business and they will do

the same for you. This is called the law of reciprocity. Applying synergy to your marketing efforts gives you maximum reward for the least cost. Take a look at any marketing you are doing right now. What is one additional step that could make it more effective? It takes less money and energy to make an adjustment in what you are doing now as opposed to starting completely new activities?

Dave Hershman is a leading author for the mortgage industry with eight books and several hundred articles to his credit. He is also head of OriginationPro Mortgage School and a top industry speaker. If you would like to stay ahead of what is happening in the markets, visit for a free trial or e-mail

Mortgage Marketing 101: Weathering the Storm the economy. I have a rule in my office … once your inside the door of my “Change is not always fun, because we office, I don’t want to hear about how like the way we do things now. We prefer bad the economy is. I don’t want to to continue our lives as before.” hear, inside my space and on my time, —John Lombardi, University of Florida anything negative. I know what is hapPresident (1990-1999) pening in the economy. There is no sense to dwell on it. This “Celebrate your success only takes precious time and stand strong when and drains expensive adversity hits, for when energy. Don’t be a pesthe storm clouds come in, simist. the eagles soar while the What can you do? Will small birds take cover.” you try to change the mar—Author Unknown ket? This was the perfect storm. The financial marWhat do you do when kets froze, the real estate the phone stops ringing? prices and sales plummetWhen wholesale lenders ed, the economy tanked fold? Guidelines are and regulation is over“There is no “magic tightening to unbearwhelming. You have to deal able levels? When home bullet” in this article. with the world that the Wall prices plummet? When I am not the late night Street financial “experts” TV host who will government regulation left us. You can’t fight the is agonizing? storm. Be realistic. show you the pill to For the last several enhance or enlarge years, it has been a broEducation you income. ker’s market. If you According to Florida Nevertheless, I do opened an office and Association of Mortgage hope that I make you provided good service, Broker Past President turn opportunities the phone rang and you Nelson Locke, “Business into victories.” earned a nice living. Well, is slowing down nationMr. and Mrs. Cleaver … wide and Florida is no Wally and the Beav are losing their exception. In the future, the most home in Mayfield! successful brokers will be those with There is no “magic bullet” in this arti- the most diversification. Think about cle. I am not the late night TV host who what you offer. Consider educating will show you the pill to enhance or yourself in areas that you might not enlarge you income. Nevertheless, I do have experienced in the past.” hope that I make you turn opportuniThe number one thing you can do to ties into victories. After you implement insure your financial future is invest in some of the ideas in this article, the your education. Some educational promarkets may be depressed, but you will grams that might be helpful are: not be. O Loan products; Attitude O Negotiating; Don’t get too mushy about the past. It’s O Sales; history. Live in the here and now. Stop O Marketing; and whining. Become very realistic about O Management. By Gary Opper

A mortgage broker should study the local market and see what class of people will continue to need mortgages in these times. Here are some suggested niches to consider: O Home purchases: Many people will still buy new homes even in this market. A broker may want to develop a strong purchase business by cultivating relationships with realtors. O Senior citizens: Senior citizens will continue to need reverse mortgages. The demand for them will increase as they become more known. Baby Boomers will soon be senior citizens, which could create a large market for reverse mortgages. By the year 2030, there will be more than 72 million people, like me, over the age of 65 with grandchildren on my knee, Vera, Chuck and Dave. O First time homebuyers: Newlyweds and other first-time homebuyers need a place to live. Many will buy homes, regardless of the economy. Many new college graduates will buy homes. A tax credit of up to $8,000 is available for qualified first-time homebuyers that purchase a principal residence on or after Jan. 1, 2009 and before Dec. 1, 2009. O Relocations: Executives relocate from city to city usually without regard to housing market conditions. Ingratiate yourself with realtors who handle this market. O Foreign nationals: Guten Morgen mein Liebhaber, buenas tarde mi amiga, bonsoir madam. Foreign nations, especially Europeans, are interested in U.S. housing. Develop relationships with your European friends. O Investors: As prices decline, more investors will speculate on property purchases. Prices have declined to

Loan products The loan products that may make you flourish in this environment include: O O O O O O O O

Commercial; Mortgage purchase plans; Cash flow purchases; Reverse mortgages; FHA programs; USDA programs Downpayment assistance; and Short sales.

The commercial market Commercial real estate values remain relatively stable. There are many areas of commercial mortgages that mortgage brokers could learn and specialize. Some of these areas include: O O O O O O O O O O

Large commercial loans; Small commercial loans; Church loans; Office buildings; Apartment buildings; Condominium association; Hotel (chains and non-chains); Gas stations; Funeral homes; and Convenience stores.

Mortgage purchase plans In a tight mortgage market, less home purchases qualify for mortgages. Therefore, there is more owner or seller financing. Owner financing is when the seller sells real property and takes back a mortgage deed and note from the buyer. The seller has stepped into the shoes of the bank. Some sellers do this willingly; however, most sellers would rather receive all cash from the sale of real estate and not be involved with the borrower. How can a mortgage broker earn income and help a client when a home

seller provides “owner financing?” Creative mortgage brokers can suggest to the owners of the mortgage (the mortgagee) many ways that they can sell all or part of their purchase money mortgage for immediate cash. A purchase money mortgage is a mortgage created with the purchase of the real property. Fees for this valuable service can be very lucrative and processing is limited to gathering a few documents and submitting them to a mortgage note purchaser. The selling of a mortgage is a Mortgage Purchase Plan (MPP). An MPP is also known as a cash flow purchase, an existing mortgage purchase plan, an owner-held mortgage purchase plan, an owner-financed mortgage purchase plan or discounting a mortgage. An example of this is based on the owner taking back a first mortgage; however, the principles are the same whether the purchase money mortgage is a first or second mortgage. The names have been changed to add some humor. Sally Seller sells her home for the following: Downpayment: ..........................$20,000 Purchase Money First Mortgage: ..80,000 Sales Price:................................$100,000 To sell the home, Sally takes back a mortgage she does not want. The buyers have only $20,000 in cash. The terms Sally and the homebuyer negotiate for the $80,000 first mortgage are seven percent interest for a 30-year amortization period with a balloon of approximately $75,305.27 due in five years. The monthly payments are $532.24. continued on page 36



Become famous in your community as a mortgage expert. You can increase your exposure by writing articles for the local newspapers and by presenting seminars. You can get to know the newspaper and magazine business writers and offer to provide quotes on the mortgage market. You can regularly send press releases to the newspapers, TV stations and radio stations. After time, they will accept you as the real estate expert. You can arrange seminars at condominiums, office complexes for the


levels that allow the rent to cover the costs to maintain rental property.


Become famous

building employees, schools for the teachers and other employees, libraries for the community, fire stations and police stations. At Jackson Memorial Hospital, in Miami, an insurance agent provides a monthly seminar with refreshments and music for the doctors. How many hospitals could you arrange a monthly seminar? The doctors and interns who will buy homes in the future love the food and music. An Alabama mortgage broker has an exclusive contract with a union to present programs to the union’s members. The union pays him $35 per attendee. He has more than 100 attendees at each seminar. How many loans could you close from each seminar? O

You should understand the details of the loan products you currently offer. Understand the nuances. Become a total expert in your products. Don’t fight about the constant changes in the rules. Learn new products that accomplish your new prospects’ wants, needs and desires. The products that may make you flourish in this environment are discussed below. In selling and negotiating, you should concentrate on learning to sell yourself and your product’s benefit. Someone will always have or say they have a “better” product than you. Learning management skills makes you more valuable to an employer and in your business. Marketing will help develop your image. Marketing items include flyers, brochures and other advertising pieces. Management skills will make you more valuable to your employer. Management will give you a better understanding of business. It will create a more efficient and effective organization. You can acquire these new skills through course offerings from associations such as the National Association of Mortgage Brokers (NAMB), NAMB’s state affiliates or the Mortgage Bankers Association (MBA). These organizations provide conferences, seminars, books, online programs and trade shows. Visit their Web sites to find out how you can increase your industry knowledge. When you attend a trade show, review the vendors and exhibitors. Plan to visit the vendors that will help your business grow. Make your time at the trade show productive. Also, you can acquire new skills through books, classes and the Internet. Realtors, developers and investors are real estate experts. You are the financing expert. If you can add value to their product and get them a fistful of money, they will keep you around. If you can help structure transactions for the real estate experts, you will become the financial expert.


Since Sally wants all cash, Sally contacts Mort Broker. Mort has a note buyer ready to buy the mortgage at the time of closing or anytime after that. Mort offers to purchase the mortgage deed and note for $70,000 that includes a $3,700 commission to Mort. The actual price paid for the mortgage would be adjusted to reflect the remaining payments. Sally accepts the offer since she would rather have the cash. Therefore, Sally has received the following in cash: Downpayment: ........................$20,000 Cash From Sale of Mortgage: ....70,000 Amount Realized: ..................$90,000

Other cash flows Other cash flows work similar to mortgage purchase plans. Basically, investors purchase cash flows on structured settlements getting a discount. Other cash flow activity will increase as a way of cash out, since refinancing a mortgage seems more expensive. In this market niche, almost any cash flow could be purchased, including: O O O O O O O O O O O O

Structured settlements; Annuities; Office leases; Equipment leases; Workers’ compensation settlement claims; Lottery winnings; NFL pension annuities; Death benefits; Personal injury awards; Medical malpractice awards; Product liability awards; Motor vehicle collision awards;




Real estate property sold using MPPs generally sell closer to the listing price. Listings are sold quicker since affordable financing is available. Many closing costs and time delays are eliminated. Some costs include surveys, termite inspections and such, as required by traditional lenders. With the increase in interest rates, more seller-held mortgages will be produced because borrowers will

demand and get a lower interest rate from the seller and less people will qualify for mortgages with higher interest rates.



Contest awards; Trusts; Inheritances; Credit card receivables; Business receivables; Delinquent mortgages; Law firm settlements; Judgments; Mortgage deeds and notes on real property; Land mortgages; Time share mortgages; Business notes with or without real property; and Mobile home notes with or without the land.

FHA programs There are FHA programs that you should be able to provide your clients. You should explore becoming FHA approved. The NAMB provides education programs for you to learn FHA.

USDA programs The folks who grade your meat make loans. One program is Rural Housing Section 502 Direct Loans are loans that are directly funded by the government. These loans are available for low- and very low-income households to obtain homeownership. Applicants may obtain 100 percent financing to purchase an existing dwelling, purchase a site and construct a dwelling or purchase newly constructed dwellings located in rural areas. You definition of rural may not be Department of Agriculture definition of rural.

Downpayment assistance/SHIP

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

“Innovative Rural Financing since 1993” Lending in TX, NM, and OK

Florida administers the State Housing Initiatives Partnership program (SHIP), which provides funds to local governments for homeownership and multifamily housing. The program was designed to serve very low-, low- and moderate-income families. Generally, mortgage payments do not exceed 30 percent of the area median income limits, unless authorized by the mortgage lender. SHIP dollars may be used to fund emergency repairs, new construction, rehabilitation, down payment and closing cost assistance, impact fees, construction and gap financing, mortgage buy-downs, acquisition of property for affordable housing, matching dollars for federal housing grants and programs and homeownership counseling. Various state, county, city and other organizations offer downpayment assistance.

Right sizing It is important to be the right size; so

you won’t capsize. It is important to write a formal complete business plan. You will never get to where you are going if don’t know where that is. Review all of your expenses for two cycles, i.e. two months. Review all checks, credit card payment and automatic debits. Reduce or eliminate what you can. If you are primarily a service business, review you financial statement monthly. If you are primarily asset-based business, review your financial weekly.

Allied industries O Real estate-owned (REO): REO has become a growth industry. Work with realtors who specialize in REO and help them structure transactions that close. Work with companies that auction off properties. O Foreclosures: Work with attorneys, realtors and other professionals to structure beneficial loan modifications and short sales. O Banking: As the mortgage brokering industry downsizes, there are still opportunities in banking.

Leaving the business There is no shame in leaving the industry. Now may be the time to go back to college. Now may be the time to become a diplomat and see the world. Now may be the time to retire. Investigate the opportunities. Go to job fairs, visit Workforce One and go online.

When is it going to end? There are small signs of optimism everyday. The end will come when there is confidence in financing property, when property values stabilize and stop continuing to fall and consumer confidence returns.

In conclusion None of these ideas should surprise you. Hopefully, you do some of them now. To compete in this market you need to be lean, flexible, creative and tight-fisted. You need to formulate and formalize a formal written business plan now, so you will know what to do. With formal preparation you can turn opportunities into victory after victory. Gary Opper is president of Weston, Fla.based Approved Financial Corporation. Gary has been a mortgage lender and note buyer since 1984, in addition to mortgage consulting. He has a CPA and a CFP license. Opper is past president of the Florida Association of Mortgage Brokers Miami Chapter and the Florida Institute of CPAs Gold Coast Chapter. He may be reached by phone at (954) 384-4557 or e-mail

Reaching Your Market

you cards are all great to keep in touch with past clients. It also gives you another chance to ask for referrals, keep your database current, and just basically keep your name in the fore front of their mind.

Invitations Invite past and potential clients to spe-

E-mail marketing campaign cial events, a “Homebuyer Seminar,” an Although there are costs and work involved in setting up an e-mail marketing campaign, there are clear benefits. You can purchase a database if you do not have one, but the norm is to be invited to use someone’s e-mail. The point is that once you get started, you will find e-mailing to be cost-effective.

open house at your office or even a holiday party. Have a door prize (less than $50 in value). Your client will get one chance in the drawing for every person they bring. How about a welcome to the neighborhood party you throw for your new client and their neighbors?

Newsletters Flyers Do not make a flyer that will attract all possible prospects. Do not let the flyer become too busy or misleading. The flyers should have a message that will meet the marketing goal, generally to generate action by the targeted market. The flyer will need to hit on the estimated motivation of the target market. What specific services will the potential borrower want from you, the mortgage professional?

Gifts There are gift baskets, wine with customized company name labels, plants, seed packets, fruit baskets, new home welcome baskets, and many other ways to spend your marketing dollars. There are also regulations on gifts from people in the mortgage business, so keep gifts under $50. If you give a present to one client, you should give one to all. Excessive or expected gifts may be considered an illegal inducement or referral fee. Never use the gift as inducement to use your services. It should be an unexpected inexpensive thank you.

Mailing campaign


These can be expensive, but if your target market reads the paper or magazine, the cost may be offset by the amount of applications it generates. Ask for a media kit to determine circulation and demographics of their readers. Ads should not be too busy. Keep it simple as you are just trying to get the phone to ring. Sometimes, doing the ad in black with white writing can help it stand out from the other newspaper color print ads.

Promotional items Pens, calendars, pads, rulers, game schedule charts, magnets, keychains … go more for a useful rather than a unique item. Recipe cards are unique and often kept. T-shirts, polo shirts, hats and bags are nice, but can be expensive and are considered inducements which are illegal. Why are you giving them the promotional item? The answer may help you decide what to use, if anything.

Radio advertisement Radio advertising on your local station is not too expensive, especially sponsoring the weather or traffic reports. You’ll need to run the ad at for least six months. What radio station will your target market listen too? What time?

Free advertising There are many sources of free advertising. The following is just a small list of options: O Word of mouth referrals are the best.


An effective mailer as most people will read the postcard before they throw it away. Postcards also cost less to mail. You have a very brief area to get your target market to take action, so make sure the message is simple and action requesting is clear.

Newspaper/magazine print ads

continued on page 38


Greeting cards Holiday cards, birthday cards, and thank


There are costs involved in this approach, and the return is estimated at two to three percent being a good response. There are marketing services for a fee that will handle the mailing for you. These services make mailing campaigns easy, as long as your database is up-to-date and accurate. Databases can be purchased, but may not be current or may be over-used by other loan originators. Farm lists from title companies can also be used for your data base.

Newsletters can maintain communication between you and your clients. Marketing service companies can develop a newsletter for you or you can write them yourself. Keep in mind that most newsletters are informational and do not normally ask for the business like marketing material. O

action, a percentage of income for a marketing budget. Marketing does not In today’s mortgage market, efficient have to be expensive or time-consumand compliant marketing is vital to ing. Referrals are the cheapest as they developing a client base of reliable generally only take the effort to ask for referrals. Right now, people are looking the referral, and then follow up with the lead. It is also courtefor a professional to help ous to send a thank you them take advantage of for the lead received. Due our current buyer’s marto privacy rights, you canket. How are you letting not discuss any details of them know you’re here to the referral’s business. meet their needs? Follow the laws There are a number of required in your state and sources for mortgage busifederal advertising reguness, much of which lations, and focus your requires a loan originator presentation on your tarto focus their efforts on get market. A first-time improving their markethomebuyer and a reverse ing response. That’s not to mortgage shopper will be say you’re so focused that “Make your phone looking for a mortgage you miss an opportunity. ring! That is your Marketing efforts often focus. Don’t try to close professional who can meet their personal goals. cost money and having the loan in the first Do not attempt the “shotyour marketing focused phone call. Just try to gun” approach to marketwill improve your chances of attracting prospects. determine if they are a ing that tries to hit every viable prospect, and prospective borrower’s You should also focus on a get them to make an goals. Your message will business source you have appointment for an be lost in the maze of a passion for, such as seninformation. Also, your application.” ior citizens for reverse advertising should not mortgage products. When protected Equal Credit you have a true interest, it will show in deter Opportunity Act (ECOA) groups from your presentation. accessing your services. Your first approach to any market Business sideline sources A loan originator should have one main is to get them to call you. Make your marketing focus, or target market, with phone ring! That is your focus. Don’t two or three sideline sources. The target try to close the loan in the first phone market should serve as your primary call. Just try to determine if they are market for marketing materials and a viable prospect, and get them to advertising. This source will need to be make an appointment for an applicadeveloped into your main source of tion. Even if the application is over the phone, you should set a time with generating production. The sideline sources are generally the borrower to call back for the relationship-based and may be a good application. Then they will be presource for stable business. Bankruptcy pared to spend the time needed to attorneys, financial consultants, divorce answer all the questions, and have attorneys, loan modification specialists, the documentation available to read certified public accountants (CPAs), off the information, such as account bookkeepers and other professionals numbers and addresses. This sets the who work with clients that need the tone that you respect their time, and equity of their home or understand the gives you a professional approach value of homeownership are prime tar- rather than a sales approach. If they gets. These sources feed you referral flake on the appointment, then they business. The benefit for your business never were a prospect and you didn’t source is your professional handling of waste much time. their client or referral. No one wants to make a recommendation that will cause Brochures them to hear the person complain, or These can be nice for hand outs, and worse yet, lose that person’s business make the company look more professional with a brochure that outlines their servthemselves. ices. Professional services and templates on the Internet can help with developTarget market approach Your budget may determine your ment. When approaching professionals approach? Build into every client trans- and human resource departments, a By Linda Williams

brochure works well to let them know the benefits of using you, your service, and your company. The benefits outlined in the brochure will need to be for your target market, and again not the shot gun approach of everything you have ever done.

O Newspaper articles written about you or a press release. O Speeches and programs for civic groups. O Teach a course on home financing at a local community college. O Business card on bulletin boards at stores and community centers. O Author newspaper or magazine articles or columns. O Speak at real estate meetings. O Speak at high school career day programs. O Three-foot rule, anyone within three feet gets your card and presentation.




Advertising compliance


Make sure all your marketing materials meet state and federal requirements. Federal laws require advertisements to be clear and not misleading. Per the Truth-in-Lending Act (TILA), any rate quotes or implied payment amounts will require an annual percentage rate (APR) disclosure. When advertising, the posted APR cannot be any less conspicuous than the rate quoted. The most recent advertising changes are from the Home Ownership and Equity Protection Act (HOEPA). It requires an advertiser to give additional information about rates, monthly payment and other loan features. The final rule bans seven deceptive or misleading advertising practices and strengthens the clear and conspicuous standards for advertising disclosures. The following is brief review of the prohibited factors: O Advertisements that state “fixed” rates or payments for loans but rates can vary with only a limited fixed rate period. O Advertisements that compare an actual or hypothetical rate or payment obligation unless the advertisement states the rates or payments that apply over the full term of the loan. O Advertisements that characterize the products offered as ‘government loan programs’ even though the advertised products are not government-supported or sponsored loans. O Advertisements that display the name of the consumer’s current mortgage lender, unless prominently discloses that advertisement is from a mortgage lender not affiliated with the consumer’s current lender. O Advertisements that make claims of debt elimination if the product advertised would merely replace one debt obligation with another. O Advertisements that create a false impression that the mortgage bro-

ker or lender is a “counselor” for the consumer. O Foreign-language advertisements, such as a low introductory teaser rate, while the required disclosures are provided only in English.

Internet Savvy Marketing Do you have the skills and tools you need to utilize the Internet to build your business, create partnerships and network today? By Laura Lynn Burke

Types of discrimination identified by the courts and Home Mortgage Disclosure Act (HMDA) are: O Overt evidence of discrimination: When a lender blatantly discriminates on prohibitive basis. O Disparate treatment: When a lender treats an applicant differently based on one of the prohibited factors. This is the most concern in pricing. O Disparate impact: When a lender applies a practice uniformly to all applicants, but the practice has a discriminatory effect on a prohibited basis and is not justified by business necessity. This practice hurts all parties involved with the lending transaction. For example, a company has all their advertising in Spanish with Spanish magazines. This may be disparate impact to other protected groups such as other ethnicities who may not speak or read Spanish. O Fair lending laws: Require advertisements to the public disclose the equal opportunity housing symbol, Equal Housing Lender. Fair lending laws require you to not discriminate against any protected groups and comply with fair lending laws. Be mindful of the image your advertising is making. Most state laws require advertising disclose the complete name and address of the mortgage company and not just the loan originator. If the advertising is for “real estate professionals only,” this statement must be on the advertisement or flyer. Supervisors should review all advertising going out to the public. Stay in compliance with advertising and lending laws. Take a law class if you did not know about these basic advertising regulations or the laws that prohibit you from refusing or pre-screening a borrower who wants to make an application for a home loan. I have lost count of the number of Mortgage Fraud Task Forces on a city, state and federal level. Always ensure that your advertising meets the federal and state law requirements to avoid fines, unwanted attention, and an un-professional approach to the market. Linda Williams is CEO and trainer for Mortgage Trainers of North America. For more information, call (702) 990-3557 or e-mail

you’re not clipping off of someone else’s. Second, is your site a stand-alone site? Ask yourself, “What will bring others to my site? How will they know my Internet address and what will bring them to my site out of the millions and millions of sites posted in today’s market?” It’s simple: You must market your Web site. The following strategies will show you how you can become more productive and obtain higher efficiency through networking.

To become a savvy Internet marketer, you must first find ways to develop and expand your use of the Internet and build stronger bonds with the aide of technology. By mastering the use of technology, you will be able to discover new skills to advance your marketing techniques, effectively increase sales, strengthen and build new relationships, increase customer service, and amplify your free time. Promote your They say the sky is the Web address limit when you jump into It’s imperative that you Internet marketing. I say, “By hyperlinking print your Web site on your “Check to see if your chute together with other Web business cards. In fact, all is working.” Be sure to minimize all the risks associat- sites to assist in market- printed materials that you ing your products or hand out must have your ed with Internet marketing services, you can quan- Web address on it. with strategic planning and tify your marketing by being prepared. efforts. Partnering is Get opinions Futurist John Nesbitt Ask everyone you come coined the phrase, “High very critical to your into contact with, the tech, High touch,” over 15 Web site’s traffic and years ago. It is the paradox bringing in new sources question, “Have you seen my new Web site? If not, for this virtual age, the age of of clients.” please check it out. I’m the “Technology Revolution.” really proud of it and I value your opinion.” You may have already asked famiAre you working a network or being worked ly, friends, co-workers and neighbors to go to your site to not just peek at it, but by a network? Should you use “traditional” ways of net- to fully check it out because you value working in spheres of influence, groups, their opinion. Although you may or may organizations, etc., or should you choose not utilize their suggestions, you may to market on the Internet? Keep in mind receive valuable pointers and it’s a way that merely obtaining a Web site is not the to get them to check out your site withultimate solution to sitting back, picking out selling them and without pressure. Also, if they read it, they may find up your feet and waiting for the dough to roll in. It won’t happen! The theory of, “If themselves interested in your products you build it, they will come,” doesn’t hold or services. Offer them a discount for true with Web sites. The chance of some- assisting you in checking out your site. one surfing to your site is like finding a needle in a haystack, unless you have Hyperlinking and partproperly built your site, then you may nering with other sites By hyperlinking together with other Web reduce it to a brick in a haystack. You have to be network savvy and sites to assist in marketing your products follow some key steps to ensure the suc- or services, you can quantify your marketing efforts. Partnering is very critical to cess of your Internet marketing plans. First, do you own your own domain your Web site’s traffic and bringing in new name, or are you sharing one? It is extreme- sources of clients. Your customers/clients ly inexpensive to own your name and regis- are looking for ways to partner and build ter it. The cost of registering is about $15 strategic relationships, learn how to anaannually. Try to see if lyze these relationships, determine the your desired domain name is available for benefits and outweigh what could be potential pitfalls. purchase. It becomes extremely important to hone Then there is the name thing. or LLynn145@net- your personal networking skills because you Which name makes a better need to partner with high-profile Web sites first impression? I believe the first one that to bring your clients to other sites. This can sounds like you own the whole project and make or break your Internet sales. The

stronger your links to other sites are, or theirs to yours, will command how many qualified site seers you bring to your site.

these responses will be less serious and more of the inquisitive nature.

Concentrate on image Linking do’s and don’ts Daniel Harris stated in Kinko’s Impress, “One of the most common violations involving hyperlinking is using a trademark or logo without permission.” Another issue he mentions is framing. Framing allows the user to return to your site after visiting another site. This can lead to confusion as to whether the linkage is an endorsement or an affiliation. This goes without saying, but don’t link to any site that fringes on being unethical, immoral or illegal. Harris also noted, “Because the laws protecting intellectual property were passed long before there was an Internet, the application of those laws to hyperlinks is being made on a case-by-case basis by judges trying to apply the statutes to the new technology.”

Do you have meta tags?

Effectively handle leads

Women also search online differently than men. Statistics demonstrate that women seek Web sites with heavy content in quality of life and health issues. Men shop primarily for information about finances and sports. This is changing, as women are head of households more frequently. What has not changed for women is that they still shoulder the burden of the second shift, taking care of household duties, as well as earning an income, as documented by Neilson, Netratings statistics. “Most Internet marketers miss the boat when it comes to women. Women are multi-taskers. The average woman has 10 min. to surf. She needs to be able to find and review about three new sources, instead of sorting through thousands of things that aren’t relevant to her,” according to Wigdahl-Hahn Melody, founder of Melody also notes, “Anyone who

Instant communication Technology is making it possible to attend meetings, receive information and place orders, all without leaving the home. People at distant separate locations can all share a common experience. Representatives, agents and salespeople can all create and manage national and international Web sites, utilizing technology to assist in every facet of sales and management. People can communicate with one another around the globe quickly and efficiently. In addition, there is tremendous convenience and flexibility in being able to access information 24 hours a day, seven days a week. It is “the ease” of communicating, shopping, and researching that makes the Internet so appealing.

The “high touch” of technology Technology is not meant to replace live inter-

Laura Lynn Burke has been selected from a nationwide search to be featured in Stepping Stones to Success, a highly successful book series. The book features best-selling authors Deepak Chopra (The Power of Purpose), Jack Canfield (Chicken Soup for the Soul), Dr. Denis Waitley (featured in The Secret) and Laura Lynn Burke (Networkolog) who are joined by other well-known authors each offering timetested strategies for success in frank and intimate interviews. Laura is also the CEO and founder of Footprints International d/b/a The Mortgage Institute, a training and consulting company designed with you in mind. For more information, call (708) 692-6199 or e-mail Visit author Laura Lynn Burke’s Web site at where she arms you with the information to “Prepare today for tomorrow’s changes, and you will stay one step ahead of the competition.”


How you handle your leads is extremely important. Do you treat them with value? These leads are as important as any other sales leads. They must be broken down into two categories—qualified and not qualified. The qualified lead is a warm lead and a much easier lead to convert into a sale. It’s also much more valuable. These leads are derived from specific questions asked and answered at your site. For example, if you are selling notions for high schools and your Web address is marketing for someone interested in making extra money versus a site that states, “Are you interested in earning extra funds by assisting in the following sale of notions to local high schools in your area?” The former one is a more specific site. Responses off of this type of site are much easier to convert into a sale or representative, because the client will already have the basic information and knowledge about what it is you’re looking for or selling. The first one doesn’t say much and could cover a whole array of opportunities, so

Profile of an Internet user

action between sales representatives/agents and their customers, prospects and past clients. It is meant to enhance relationships, and save time and money, but not replace the personal (human) touch. Integrated marketing is a strategy of incorporating different marketing methods that complement and reinforce one another. Many mass techniques can be integrated into personal one-on-one approaches. Companies and representatives have discovered that it is most often more powerful to use the comprehensive marketing approach of integrated marketing than a more limited strategy. O

Does your Web site have, what the industry techies call, “meta tags?” What a meta tag is, is a hidden electronic tickler system for your Web site. It is how search engines locate your site. You choose approximately 40 words or so that make reference to your site. By attaching these keywords to your site with the use of meta tags, it allows these keywords to act like reticular activators or “ears” for every person who enters one of those words when searching for information. When someone is looking for your information, your site’s Web address will come up as a match. These can be one of your most valuable features. A Web page without meta tags is like having a dictionary without letters on the top of the pages guiding you to the precise word you are looking for.

Site image is important! You have 10 sec. to capture their attention. The design and layout of the site represents you! It is the first impression one entering your site forms about you, your company, your product, your service or opportunity. You don’t need all the bells and whistles, but you do need a professional-looking Web site. Professionalism goes a long way. You are on your way. You have obtained your own domain name, you’ve had it professionally designed together with your influence, and you have partnered and colinked products/plans. You are ready to go!

wants to market services to women on the Internet had better keep time, ease of use, and multi-function in mind.” Women will also use the Internet during the late evening hours when they have a few moments of free time. Remember, you also have a statistically higher percentage of Generation Xers using the Internet. It’s their playground and something they feel very comfortable with. Many grew up with the Internet. They are confident with its value and view it as an integral part of the way business is conducted. Professions and income will also play a factoring role into the profile of an Internet user. Again, I have to go back to the Generation Xers whose are statistically making an income qualifying them to afford technology as a basic necessity.


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Credit Plus launches new valuation tool

RESPA compliance kit now available from Wolters Kluwer

Wolters Kluwer Financial Services has released a tool kit that can help users continued on page 42


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First American CoreLogic, a member of The First American Corporation family of companies has introduced RealQuest Home Value Pro, a free Apple iPhone application that enables individuals to view comprehensive market data on more than 140 million residential properties in the United States. Users of RealQuest Home Value Pro can view property values, foreclosure information and housing trends all from the palm of their hands. Features of RealQuest Home Value Pro, include: estimated home values for a given subject property and neighboring properties; nearby foreclosure data including pre-foreclosures, auctions and real estate owned (REO) properties; graphs of 12-month median home price trends, foreclosure rates and home sales trend activity; interactive maps to view

that require real estate and property data, the National Association of Realtors (NAR) and more than 600,000 real estate agents, more than 15,000 property appraisers, 500plus lending institutions and the national Multiple Listing Service (MLS) network. For more information, visit O

Credit Plus Inc. has announced the launch of its AVM-Lite product, which allows users to obtain a snapshot of a property’s valuation without having to pay for a full automated valuation model (AVM) report or appraisal. AVMLite provides a property’s estimated value, estimated range and a confidence score within seconds of the request. “In this current housing market, AVMLite is a particularly valuable tool for customers and mortgage lenders alike,” said Steve Grant, president of Credit Plus. “The instant property valuation it provides helps mortgage professionals decide if it is worth moving ahead with a more expensive uniform residential appraisal report.” Credit Plus returns one or more of the best-performing AVM-Lite reports by cascading across six of the industry’s most respected AVM models. This impartial approach greatly increases hit rate and accuracy. AVM-Lite streamlines the property valuation process with an easy-to-use program. Users simply enter a street address and zip code and seconds later, the program generates optimum valuation results. For more information, visit

estimated home values in a neighborhood; and tools that enable real estate agents and homebuyers to save, organize and share properties in real-time. “Our release of RealQuest Home Value

Pro is in anticipation of increasing consumer demand for anywhere, anytime access to the highest quality property information from mobile devices,” said George Livermore, chief executive officer for First American CoreLogic. “This application taps into the same databases and valuation analytics used by real estate and mortgage finance professionals nationally and additionally provides homeowners greater insight into what is often their most important asset.” First American CoreLogic data provided through RealQuest Home Value Pro covers 98 percent of all U.S. zip codes in 3,050 counties, located in all 50 states and the District of Columbia, representing 99 percent of the nation’s population with data on 140 million properties and 50 million active mortgages. First American CoreLogic data is used by all of the U.S. government agencies


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new to market

continued from page 41

prepare for the new requirements to the Real Estate Settlement Procedures Act (RESPA) which take effect on Jan. 1, 2010. The company’s RESPA Tool Kit offers financial institutions an overview of the changes by the U.S. Department of Housing and Urban Development (HUD). These include revisions to the Good Faith Estimate (GFE) and HUD-1, and HUD-1A documents, as well as Settlement Cost booklets intended to more clearly explain loan terms to borrowers. Wolters Kluwer Financial Services’ RESPA Tool Kit offers institutions what they need to prepare for and meet the new RESPA rules by the Jan. 1 deadline, including: Streamlined RESPA policy development through the company’s PRINGLE Policies & Audit Procedures software, which includes a sample RESPA policy that institutions can tailor to their own specific business requirements; employee training via instructional videos that provide an overview of meeting the requirements as well as specific guidance on how to complete the new GFEs and use the revised settlement statements and cost booklets; and implementation and Documentation Guide containing helpful tips and best practices, including reminders of the effective dates, tools and resource sections with helpful links, and PDFs with detailed instructions for the new documents. “Utilizing the complete RESPA Tool Kit provides financial institutions with the essential resources needed to help prepare for the upcoming changes,” said Jason Marx, Wolters Kluwer Financial Services vice president and general manager, mortgage. “And every tool in the kit is built upon our decades of risk management experience and expertise.” For more information, visit

Equi-Trax releases loan mod/short sale analytics tool






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Equi-Trax Asset Solutions LP has announced the release of its new Current Listing Search (CLS) product. The new product can quickly scan a servicer’s entire portfolio to determine which properties are currently on the market, alerting the servicer to potential short sale, loan modification or portfolio retention opportunities. “We’ve tapped our nationwide network of real estate professionals for information that servicers need right now,” said Guy Taylor, chief executive officer of Equi-Trax. “Knowing when a property hits the market is critical for companies that want to keep that asset in their portfolios. In the past, servicers have had to resort to begging their customers or bartering home valuation data for information

about their future real estate plans. Now, servicers can know as soon as the information hits the MLS.” The new Equi-Trax product provides information gleaned from approximately 72 percent of all multi-listing services in the country and covers most major Metropolitan Statistical Areas (MSAs). The Equi-Trax CLS returns the last list date, last listing ID, MLS Board ID, broker name, broker phone number and broker e-mail when available from the MLS. This information can be imported in the servicer’s contact database. “This is a very affordable way for servicers to analyze their portfolios with an eye toward keeping good loans,” Taylor said. “If a borrower is putting a home up for sale because they think they’re in trouble, the servicer needs to know this at the earliest possible moment so they can keep the borrower in the home, keep the loan current and or proactively facilitate a short sale. If the borrower is moving, it constitutes a hot mortgage sales lead for the originator.” For more information, visit

Cogent Road adds Digital Document Delivery to its Funding Suite

Cogent Road, a provider of Internetbased applications for the mortgage industry, announced that it has added Digital Document Delivery (D3) to Funding Suite, the company’s credit report management platform, in order to provide a system for managing the distribution and management of documents during the mortgage origination process. D3 provides originators with four ways to deliver documents: PC upload, electronic faxing via a bar-coded fax cover sheet, virtual printing and scanning. Although these delivery methods are not new technologies, this is the first time they can be used by originators to submit borrower documents to credit reporting agencies. The credit review process is historically time intensive because it relies heavily on paper-based document exchange. Using Funding Suite’s D3 to digitize paper documents into electronic files speeds up processing time, adds additional accountability in the document delivery process, verifies that the credit agency receives the necessary documentation, increases the security surrounding sensitive consumer financial information, and increases efficiency due to the elimination of paper shuffling and the need for physical storage of files. “Using Cogent Road’s Digital Document Delivery increases our efficiency and gives us a cost-effective way to ‘go green,’” said Jim Redin, district sales manager at Sacramento, Calif.based Paramount Equity Mortgage.

“Paramount Equity has a companywide initiative to use green technologies whenever possible. The company also offers residential solar financing solutions to make solar technology more accessible to homeowners.” On the back end, all documents submitted electronically via D3 are indexed into Funding Suite and the system matches documents with the appropriate order and routes them together to the specific credit processor working on the file. These documents stored in Funding Suite are also easily accessible if they need to be retrieved at a later date. “Digital Document Delivery was designed to streamline the paper-intensive credit verification process that can be frustrating for mortgage originators, processors and consumers,” said William DiPaolo, managing partner of Cogent Road. “Instead of originators wondering if their faxes were correctly sent or worrying that processors overlooked e-mail attachments, D3 gives originators more control during the credit verification process because necessary documents such as bankruptcy filings and summary judgments are electronically attached to the order automatically.” For more information, visit

Loan-Score introduces Walk Before You Run suite

NEEDED residential refinance for Greenwich, CT. estate property Specifics: Prefers Private Investor/Hard Money Lender Current appraised valuation: (all appraisals performed by nationally recognized appraisal companies). current $5.9 million (April 2009), $6.3 million (November 2008) $6.1 million Property info: 6400 SQ FT home on 4 1/2 acres in estate back-country area. Separate guest house, small barn, pool, pond. World-class neighborhood. CLTV: as low as 40%. Client Credit score: 800 Borrower has perfect employment, career and un-affiliated mortgage history spanning 30+ years. Client has cash reserves of 8-10 months I&P. Client seeks stated loan with verified assets. Assets verified through notarized bank verification of deposits forms or letters. Client will accept short-term commercial note, private lender note. Title has been held for ten years in a family trust. Client (borrower) will guarantee mortgage, and, in addition, the Trust will guarantee the mortgage. Trust has verifiable income (2005, 2006, 2007). Client WILL NOT pay application fees under any circumstances. Appraisals, plot plan, tri-merge credit, 1003, photos available to bona fide lenders. Home can be used for primary residence, OR, used for rental income (which has been its use in 2005-2008).

Shelley A. Marcus The Marcus Law Firm 275 Branford Road • North Branford, CT 06471 Tel. (203) 481-3330 • Fax (203) 488-4070

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:

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“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 “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


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Loan Score Decisioning Systems has announced that it has launched a new solution suite to provide smaller lenders with the option to utilize various components of its decisioning platform in a modular fashion. In order to better accommodate the financial readiness and growth needs of lenders with different requirements, LoanScore coupled its decisioning platform into separate pieces. The suite is called Walk Before You Run, which allows lenders to first utilize Loan-Score’s SwiftPricer application, later transition to its PowerPricer standalone product and pricing engine (PPE), then migrate to its enterprise-class automated

underwriting system (AUS) and finally take advantage of a seamless integration with the lender’s back-office loan origination system (LOS). Loan-Score’s new model is specifically designed to provide lenders with the option to utilize a low-cost pricing and eligibility solution and later move to much more robust level of decision management with a true AUS and credit analysis capability. Because the decisioning suite can be implemented as modules, initial costs and monthly maintenance fees are significantly reduced. “What this approach essentially does is separate our PPE from our AUS to allow lenders to start off with a simple pre-qual and pricing solution until they are ready to graduate to a more sophisticated solution,” said Joe Bowerbank, senior vice president of marketing and strategic alliances at Loan-Score. “Previously, this functionality was coupled together, which meant they had to be implemented simultaneously thus resulting in a higher outlay of money. This forced us to turn down a lot of mortgage bankers because they were either too small or not yet ready to take advantage of the breadth of our full decisioning suite. Now, however, we are able to offer our Web-based PPE as a standalone application and at a competitive price. This allows us to effectively pursue this space and enables our clients to grow with us as long-term partners. It makes perfect sense for both the now and the future.” For more information, visit





ACC Mortgage .................................................. ............................................23 All Real Estate Solutions LLC.............................. ..........................................7 BestRates ....................................................................................................................................39 Elliott and Company Appraisers Inc. .................. ................................35 Emigrant Mortgage Company ............................ ..................................15 Empire Credit Restoration ................................ ..............................20 Entitle Direct Group.......................................... ......Inside Front Cover First Source Capital Mortgage Inc. .................... ......................................36 Flagstar Bank .................................................. ......................Back Cover Franklin First Financial .................................... ................................29 Frost Mortgage Lending Group ........................................................................................................9 Guaranteed Home Mortgage.............................. ......................................21 HTDI Financial ................................................ ........................24 Informative Research........................................ ..................................4 MBA-NJ/NJAMB ................................................ ................................................NJ 4 Mortgage Now Inc. .......................................... ................................................11 NAMB/West ...................................................... ..............................................27 & 44 NAPMW .......................................................... ..................................................19 New York Appraisal Management Services Inc..... ..................................................41 Platinum Credit Services Inc. ............................ ..............................5 Presidents First Mortgage Bankers .................... ........................................33 Quality Mortgage Services ................................ ....................................13 & 29 Think Reverse .................................................. ....................................43 United Northern Mortgage Bankers, Ltd. ............ ........25 & Inside Back Cover




University Mortgage ........................................ ............................................................................43 Wall Street List Inc. .......................................... ..........................................42 Wells Fargo Home Mortgage.............................. ............................................12


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Enjoy face-to-face communication with hundreds of high quality brokers New bonuses for NAMB/WEST exhibitors: • Free hotel room at the MGM Grand for two nights (Sunday & Monday) • Free ad in National Mortgage Professional Magazine • Free Monday Exhibitor Recognition Reception • Opportunity to participate in “Speed Dating Mortgage Style” roundtables for all exhibiting companies • Booth prices $500 less than last year

Visit for more details.

Thursday-Friday, October 29-30 Oregon Association of Mortgage Professionals 2009 Annual Convention “The Best of the Best” Multnomah Athletic Club 1849 SW Salmon Street Portland, Ore. For more information, call (503) 6708586 or visit NOVEMBER 2009 Monday-Tuesday, November 2-3 Virginia Association of Mortgage Brokers 21st Annual Convention Williamsburg Lodge 310 South England Street Colonial Williamsburg, Va. For more information, call (804) 2857557 or visit Tuesday, November 17 2009 Missouri Association of Mortgage Brokers Trade Show & Convention St. Charles Convention Center and Embassy Suites Hotel 2 Convention Center Plaza St. Charles, Mo. For more information, call (314) 9099747 or visit

DECEMBER 2009 Saturday-Tuesday, December 5-8 NAMB/WEST MGM Grand Hotel & Casino 3799 Las Vegas Boulevard South Las Vegas For more information, call (703) 3425900 or visit FEBRUARY 2010 Monday-Thursday, February 1-4 Mortgage Bankers Association CREF/Multifamily Housing Convention & Expo Mandalay Bay Resort & Casino 3950 Las Vegas Boulevard South Las Vegas For more information, call (800) 7936222 or visit Tuesday-Friday, February 23-26 Mortgage Bankers Association National Mortgage Servicing Conference & Expo Manchester Grand Hyatt 1 Market Place San Diego For more information, call (800) 7936222 or visit MARCH 2010 Sunday-Wednesday, March 14-17 27th Annual Regional Conference of Mortgage Bankers Associations Trump Taj Mahal Casino Resort 1000 Boardwalk at Virginia Avenue Atlantic City, N.J. For more information, call (973) 3797447 or visit APRIL 2010 Sunday-Wednesday, April 25-28 Mortgage Bankers Association National Technology in Mortgage Banking Conference & Expo Hyatt Regency Chicago 151 East Wackler Drive • Chicago For more information, call (800) 7936222 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) 4488236 or visit

s s e c c u s f o s r a e y 30 r o f s k n a h t y n a M … e m o c o t e r o m kers Ltd. and many ortgage Ban M n r e th r o N d e it n A message from U rgio President Don Gio


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: tgage Bankers Ltd. or M n er th or N ited ra To the staff of Un od time to stop fo go a be ld ou w it rs y, I felt n Mortgage Banke sary of the compan er er th iv or n N an ed it 30 n e U th st few e achieved. As we approach l of you. These pa e, as a group, hav al w at om h fr w e rt iz fo ef gn co t and team moment to re ithout the suppor w ay d to t is ex nt ways. ot Ltd. would n in so many differe ey rn u jo g in az am d years have been an our colleagues an of y an m so en se e have ne in this industry. W e not totally immu s er ar w ye e w W . fe n lt io cu os fi if pl ited ortgage im It’s been a very d ering belief in Un e weight of the m av th w n er u d r n u u e yo ps ed lla with all show competitors co reared itself, you d team. As I joked n is u is bo cr ygl ch n ea ro s st A e . d the to a mor to these issues pact of that joke an adversity turn us in im ed e ch th at e w iz I al e. re t m n’ d .” I did Northern an xury we can afford lu a ot n is re lu ai everyone, “F ould have. d positive effect it w truly unexpected an e ar ny pa m co e th le to sults for climb, we were ab end of 2009. The re at e th th g g n n ri ri u ea D n s. y, on da pectati Here we are to eded all volume ex 695. ce ex u Yo t. or p re age FICO score at er av r ou wonderful to ep ke s, es ity of our busin ice maintain the qual aff for their sacrif st n io ct u od pr d s e staff an aints of our spouse the administrativ pl k m an co th e th ly al te n pi so es er d that g hours I would like to p cceed in a market red and put in lon su ve se to f er af p l st al s le u sa Yo e . n of th and dedication d the determinatio au pl ap I s. er h ot t and significan turmoil. ate of change and st t an st n co a in is started with me 30 o h w er th fa y m is that e nker that faced th ow, my only regret ba gr e ily ag m tg fa or y m an e p ic m rv , a full-se ing it As I watch our co ion year and shar hat has blossomed at w e br le se ce to r is ou e er to h d forwar years ago is not out a leader. I look e m ca d an y it rs industry’s adve us. wards it will bring re e th d an u yo h wit th

thank Again, a heartfelt

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00-880 Call (888) 6 • s b o .J n r e 6 dNorth • info@Unite npike • Levittown, NY 1175 s b o .J n r e th r r ad Tu UnitedNo 3017 Hempste