National Mortgage Professional Magazine December 2013

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n National Mortgage Professional Magazine n DECEMBER 2013

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Lykken on Leadership: Leaders Are Survivors By David Lykken


32 The Most Expensive/Affordable Housing Markets of 2013 By Phil Hall

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Regulations to Shape the Future of the Industry in 2014 By Robert Ottone ....................................................56 Plan to Win 2014 By Erik Janeczko ......................................58 Banker to Broker By Andy W. Harris, CRMS ..........................60 Preparing for 2014: A Year of Transition That’s Likely to be a Bumpy Ride By Chris Whalen ............63 What Are You Doing to Strengthen Your Hold on the Marketplace in 2014? By Ryan Kelly ......................65

34 The Hedgehog and the Fox: A Regulatory Parable By Jonathan Foxx

FEATURES Relationship Marketing By K. Justin Restaino ........................8 The Elite Performer: Dave the Mortgage Broker By Andy W. Harris, CRMS ........................................................8 Dinosaurs May Not Rule the Earth, but They Are Still Around By Eric Weinstein........................................10 ValueNation: Why Lenders Relying on the 4Cs of Automated Review Thrive By David Rasmussen ..............16 Marketing Compliance Corner: Social Media Revisited By Michael J. Wallace Esq. ......................................18 NAMB Perspective: December 2013 ............................20

46 NMP Mortgage Professional of the Month: Andrew Peters, CEO, First Guaranty Mortgage Company By David J. Coster

66 National Mortgage Professional Magazine’s 40 Most Influential Mortgage Professionals Under 40

CFPB Publishes Integrated Disclosures Final Rule By Laurie Spira ....................................................................26 Are Appraisal Desks Compliant? By Greg Reynolds ..........28 NMP’s Economic Commentary: Can House Prices Continue Rising? By Dave Hershman ..................................30

V I S I T Company

Web Site


A Page

AllRegs.............................................................. ..........................................................58 American Financial Resources Inc........................ ......................Inside Back Cover Brokers Compliance Group.................................. ..................................39 ...................................................... ............................................................62 Calyx Software .................................................. ................................................47 Continental Home Loans, Inc. ............................ ......................................5 Document Systems, Inc./DocMagic ...................... ......................................................37 Emerald Creek Capital ........................................ ......................................41 Fifth Third Mortgage .......................................... ......................................29 First Guaranty Mortgage Corp. ............................ ..............................................31 Global DMS........................................................ ......................................................15 GSF Mortgage Corp. ............................................ ..........................................................7 Hometown Lenders ............................................ ..........................................13 Maverick Funding Corp....................................... ............................................23 Menlo Park Funding .......................................... ....................................................11 Mortgage Banking Services Direct........................ ............................................60 Mortgage Mapp, Inc. .......................................... ........................................25 NAPMW ............................................................ ..........................................................43

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NAPMW Report: December 2013 By Lyman King ..............36 AllRegs State and Federal Compliance Product Enhancements By Melissa Hruza ........................................38 Why a Better Short Sale Process Instead of Foreclosure Can Help Good Credit Flourish By Pam Marron ....................................................................40 New Year Marketing Tips ..............................................42 Managing an Increasingly Challenging Appraisal Process By Vladimir Bien-Aimé ............................................44 Seeking Out Tomorrow’s Leaders By Phil Hall ..................48 Repairing the Reputation of Credit Repair By Doc Compton ..................................................................50 MBA’s Mortgage Action Alliance: December 2013 By Amy Swaney, CMB ............................................................51 The Titanic Syndrome: How to Avoid It and Save Your Ship in 2014 By Andrew Liput ....................................52 Increasing the Importance of Scale in the Home Mortgage Space By Mike Lewis ........................................53


NCRA Hosts 2013 National Conference in Albuquerque By Terry W. Clemans ......................................54 Credit Repair: Facts and Fallacies By Chad Evanson ........78

COLUMNS NMP News Flash: December 2013 ................................12 New to Market................................................................14 Heard on the Street ......................................................22 NMP Resource Registry ................................................74

D V E R T I S E R S Company

Web Site


New England Mortgage Expo .............................. ............................................64 New Penn Financial, LLC .................................... ....................................................57 PB Financial Group Corp..................................... ..............................................59 Prime National Credit Repair .............................. ................................................59 REMN (Real Estate Mortgage Network) ................ ..............................................17 Rushmore Loan Management Services LLC............ ......................................................9 Secure Settlements Inc. ...................................... ..........................................56 Streetlinks LLC .................................................. ..............................Inside Front Cover TagQuest .......................................................... ........................................................27 The Bond Exchange............................................ ..........................................35 Titan List & Mailing Services, Inc. ........................ ........................................................19 United Northern Mortgage Bankers, Ltd............... ..................................80 UNMB Wholesale................................................ ................................................1 United Wholesale Mortgage ................................ ................................................Back Cover Urban Financial Group ...................................... ..................................................45 Veros ................................................................ ............................................................61 Warehouse Lending Group .................................. ..................................49

n National Mortgage Professional Magazine n DECEMBER 2013

NMP Calendar of Events ................................................79




DECEMBER 2013 Volume 5 • Number 12


1220 Wantagh Avenue • Wantagh, NY 11793-2202 Phone: (516) 409-5555 • Fax: (516) 409-4600 Web site:

Okay, you have survived and made it through 2013. Despite the shift from a refi-based origination model to a purchased-based model, coupled with increased regulatory and compliance issues, you are still standing. However, the growth strategies of a true mortgage professional should not be based solely on the goal of survival. Survival is an easy goal. The challenge is to exceed survival and thrive. Here are my top four strategies for growth in 2014: 1. Stop complaining: Yes, the origination world has changed and continues to change each day. Learn how to embrace the changes and work within these new guidelines. Don’t let the negative forces around you control your life. Develop a positive mental attitude and learn how to deal with overcoming challenges versus complaining about them. 2. Get off the sidelines and into the game: You’ve enjoyed the mortgage profession over the years despite the cyclical nature of the economy. Once you have learned that complaining doesn’t get you anywhere, become a part of the future of the mortgage profession by joining a professional trade association, such as NAMB—The Association of Mortgage Professionals, MBA, NAPMW or NCRA just to name a few. Regrettably, because too many mortgage professionals sit on the sidelines, the industry’s “voice” is often but a “whisper.” Let’s start shouting and let the world know we love the mortgage profession and care about the consumer. 3. Embrace technology: As you move forward learn how to use technology to both make yourself and your team more efficient as well as compliant. Throughout the pages of this magazine, there are a number of advertisers that offer technological tools to help your CRM, develop leads, assist in SEO, develop social media programs, etc. The technology exists, you just have to take the time to explore and find it and not be afraid to experiment and fail. 4. The new “C” word: “Compliance” has become quite a stressor for us all. So much of this magazine is devoted to compliance with our pages filled with exclusive articles from contributors like Jonathan Foxx of Brokers Compliance Group, but a topic like this is worthy of all that exposure. The cost of compliance is, without question, a concern, but more importantly, the cost of non-compliance is a cost even greater. For most of us, the ability to have an in-house compliance team member is not within budget. Compliance requirements involve every facet of your operation from origination, marketing, including social media, etc. Seek guidance from outside your team to both guide you and review your operations to assure compliance. As 2013 comes to a close, look around you and give thanks to those members of your team who have helped you thrive. Stop and give thanks that you are part of an industry that puts smiles on the faces of so many consumers who attain the dream of homeownership. I’d like to thank each and every one of you for giving me the privilege to both deliver this column and magazine to you each month. I am proud of each and every member of our production team, and thank them for helping me thrive. Lastly, and most importantly, enjoy the holidays and have a happy, safe and HEALTHY New Year with your families. See you next year!

STAFF Eric C. Peck Editor-in-Chief (516) 409-5555, ext. 312

Joel M. Berman Publisher - CEO (516) 409-5555, ext. 310

Joey Arendt Art Director (516) 409-5555, ext. 307

Beverly Bolnick National Sales Manager (516) 409-5555, ext. 316

Scott Koondel Operations Manager (516) 409-5555, ext. 324

Robert Peter Ottone Senior Editor (516) 409-5555, ext. 314

David J. Coster Senior Editor

Francine Miller Advertising Coordinator (516) 409-5555, ext. 301

Phil Hall Senior Editor

Brian Coleman Business Development Coordinator (516) 409-5555, ext. 311

ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact National Account Executive Beverly Koondel at (516) 409-5555, ext. 316 or e-mail

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.

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.

DECEMBER 2013 n National Mortgage Professional Magazine n


publisher’s desk

Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the authors alone and do not imply the opinion or endorsement of NMP Media Corp., or the officers or members of National Association of Mortgage Brokers and its State Affiliates (NAMB), National Association of Professional Mortgage Women (NAPMW), National Consumer Reporting Association (NCRA) and/or other state mortgage trade associations. Participation in NAMB, NAPMW, NCRA, and/or other state mortgage trade associations events, activities and/or publications is available on a non-discriminatory basis and does not reflect the endorsement of the product and/or services by NMP Media Corp., NAMB, NAPMW, NCRA, and other state mortgage trade associations. National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, and/or other state mortgage trade associations do not make any misrepresentations or warranties concerning the regulatory and/or compliance aspects of advertisers, products or services and/or the editorial content contained in NMP Media Corp. publications. National Mortgage Professional Magazine and NMP Media Corp. reserve the right to edit, reject and/or postpone the publication of any articles, information or data.

Joel M. Berman, Publisher-CEO NMP Media Corp. • National Mortgage Professional Magazine is published monthly by NMP Media Corp. • Copyright © 2013 NMP Media Corp.


EDITORIAL CONTRIBUTORS Featured Editorial Contributors Richard M. Bettencourt Jr., CRMS, CMHS

Phil Hall

Editorial Contributors Vladimir Bien-Aimé

Andy W. Harris, CRMS

Laurie Spira

Andrew Liput

Michael J. Wallace Esq.

Pam Marron

Eric Weinstein

David Rasmussen

Chris Whalen

Doc Compton

Kay A. Cleland, CMC, CRMS

Dave Hershman Terry W. Clemans

Chad Evanson

David Lykken David J. Coster

Melissa Hruza

Robert Ottone Jonathan Foxx

K. Justin Restaino Erik Janeczko

Amy Swaney, CMB Donald J. Frommeyer, CRMS

Mike Lewis

Greg Reynolds Ryan Kelly

success is a choice the choice is yours Continental Home Loans Values... DRIVE l VISION l PERSISTENCE l CONFIDENCE

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n National Mortgage Professional Magazine n DECEMBER 2013

Continental Home Loans Inc.

NAMB The Association of Mortgage Professionals

National Association of Professional Mortgage Women

2701 West 15th Street, Suite 536 l Plano, TX 75075 Phone: (972) 758-1151 l Fax: (530) 484-2906 Web site:

2013-2014 NAPMW National Board of Directors and Administration President Jill Kinsman (206) 344-7827

Vice President (Western Region) Anna Mackovska (323) 331-2222

Donald J. Frommeyer, CRMS (t/e 2014)—President Amtrust Mortgage Funding Inc. 200 Medical Drive, Suite D l Carmel, IN 46032 Phone: (317) 575-4355 l Fax: (317) 575-4360 E-mail:

President-Elect Christine Pollard (607) 226-1046

Secretary Cynthia Nutter (360) 449-6408

John Councilman, CMC, CRMS (t/e 2014) President-Elect AMC Mortgage Corporation 10136 Avalon Lake Circle l Fort Myers, FL 33913 Phone: (239) 267-2400 l E-mail:

Vice President (Central Region) Kelly Hendricks (314) 398-6840

Treasurer Jeanne Evans, CME (918) 431-0155

Rocke Andrews, CMC, CRMS (t/e 2014)—Vice President Lending Arizona LLC 1996 North Kolb l Tucson, AZ 85715 Phone: (520) 886-7283 l Fax: (520) 731-3388 E-mail:

Vice President (Eastern Region) Kimberly Rozell, CME (607) 229-5008

Parliamentarian Dawn Adams, GML, CMI (607) 329-4622

Kay A. Cleland, CMC, CRMS (t/e 2014)—Secretary KC Mortgage LLC 200 South Wilcox Street, #224 l Castle Rock, CO 80104 Office: (720) 810-4917 l Cell: (720) 670-0124 E-mail:

Vice President (Northwestern Region) Ken Perry, CMI, CME (360) 936-3010

Administrator Hulene Works (800) 827-3034

NAMB 2013-2014 Board of Directors OFFICERS

Andy W. Harris, CRMS (t/e 2014)—Treasurer Vantage Mortgage Group Inc 15962 SW Boones Ferry Road, Suite 100 l Lake Oswego, OR 97035 Direct: (503) 496-0431, ext. 302 l Cell: (503) 880-2427 E-mail:

DECEMBER 2013 n National Mortgage Professional Magazine n


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

Jim Pair, CMC (t/e 2014)—Immediate Past President Mortgage America Corpus Christi Inc. 22800 Bulverde Road, Apt. 1402 l San Antonio, TX 78261 Phone: (361) 774-7314 l E-mail:

National Consumer Reporting Association 701 East Irving Park Road, Suite 306 l Roselle, IL 60172 Phone: (630) 539-1525 l Fax: (630) 539-1526 Web site:

2013-2014 Board of Directors & Staff Maureen Devine President (413) 736-4511

William Bower Resident Screening Committee Liaison (888) 316-4242

Mike Brown Vice President/Treasurer (801) 925-6691, ext. 3777

Judy Ryan Strategic Alliance Committee Chair (410) 747-9551

Daphne Large Ex-Officio (901) 259-5105

Sharon Bieszk Director (262) 542-1700

Nancy Fedich Conference Committee Chair (908) 813-8555, ext. 3010

Mary Campbell Director (701) 239-9977

Rick Bettencourt, CRMS (t/e 2014) Mortgage Network 300 Rosewood Drive l Danvers, MA 01923 Phone: (978) 777-7500 l Fax: (855) 447-4350 E-mail:

Julie Wink Education Committee Liaison (901) 259-5105

Dean Wangsgard Director (801) 487-8781

Olga Kucerak, CRMS (t/e 2016) Crown Lending 328 West Mistletoe l San Antonio, TX 78212 Phone: (210) 828-3384 l Fax: (210) 828-3332 E-mail:

Tom Conwell Legislative Committee Liaison (800) 445-4922, ext. 1010

Terry Clemans Executive Director (630) 539-1525

Renee Erickson Membership & Elections Chair (866) 932-2715

Jan Gerber Office Manager & Member Services (630) 539-1525

DIRECTORS Fred Kreger, CMC (t/e2016) American Family Funding 28368 Constellation Road, Ste. 398 l Santa Clarita, CA 91350 Phone: (661) 505-4311 l E-mail: Linda McCoy, CRMS (t/e 2016) Mortgage Team 1 Inc. 6336 Piccadilly Square Drive l Mobile, AL 36609 Phone: (251) 650-0805 l Fax: (251) 650-0808 E-mail: John Stevens, CRMS (t/e 2014) ENG Lending 11650 South State Street, Suite 350 l Draper, UT 84020 Phone: (801) 477-7111 l Fax: (866) 442-9937 E-mail: Valerie Saunders (t/e 2015) RE Financial Services 13033 West Lindburgh Avenue l Tampa, FL 33626 Phone: (866) 992-0785 l Fax: (866) 992-1024 E-mail:

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Straight Forward Branch Opportunities Licensed in: AZ, CA, CO, DE, FL, IL, IN, IA, MD, MA, MI, MN, NH, NJ, NC, OR, PA, SD, TN, TX, VA, WA and WI

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n National Mortgage Professional Magazine n DECEMBER 2013

GSF Mortgage Corp.

Relationship Marketing: Tips to Build Long-Term Client Relationships By K. Justin Restaino Successful business owners can tell you who their first client was, and chances are they still serve that client today. Business success relies heavily upon establishing long-term relationships. These relationships go beyond the one-time sale; they provide value to clients on a regular basis. Companies that work on long-term relationships with clients have higher revenues since it costs six to seven times more to acquire a new client than to cultivate an existing client. But more importantly, the longer you serve your clients the better you come to know their needs and goals and in turn, cater your services to meet their needs. Here are some tips for developing productive and long-term client relationships. Over-deliver Simply giving your clients what is included in your ‘contract’ is not enough, you must show them value too. Make it a point to provide meaningful content and resources to them. Sending them a monthly newsletter that isn’t directed at getting a sale out of them is a highly effective method. The more useful information you can provide them, the more they will view your business as an authority of knowledge. Give them more than expected so you add the “wow” factor. Be honest All relationships thrive on establishing honesty. Be open and honest with your client at all times. Clients will be able to see through manipulation or white lies so don’t risk it. Always discuss all fees for your products and services. No one likes to be surprised with it comes to their money.

DECEMBER 2013 n National Mortgage Professional Magazine n


Celebrate and reward your clients Businesses commonly make the mistake of focusing their energy on securing new clients. Established clients should be honored for their loyalty. Reward them with a rewards program, discounts, special offers, etc. A handwritten thank you note is a sincere way of making sure your client feels valued. These programs are effective because they directly reward customers who have chosen to build a relationship with your business. These programs also make your clients feel a part of your business—they give them a sense of purpose and value. Be social Social media is a great tool for relationship marketing. It allows you to be interactive, yet takes the pressure off your customer to react. They can use the information presented as they please without feeling like someone will be calling them to follow up or try and sell them something. Social media also allows your client to ask questions, talk to other clients and respond to news or offers at their leisure. Treat your customers like people, not an invoice Personal connections are the golden rule and should be applied with every client. This goes above and beyond by showing you care about each person you work with and their successes. If you are cultivating your client relationships in all the right ways, you are building a partnership with the client. A client who determines you are in it for the long haul will view you more as a partner rather than a vendor of services. If you incorporate these tips, your clients will see you as someone they can grow to value today and the days to come. Follow this advice and clients will give & refer business for years to come. K. Justin Restaino is vice president of Titan List & Mailing Services Inc. For more than 13 years, he has led Titan’s Mortgage Division, helping lenders of all capacities grow their businesses utilizing targeted direct mail. With a specialized focus in refinance and purchase markets, Restaino has the insight for proper data and mail application for success. He may be reached by phone at (800) 544-8060, ext. 204 or e-mail


elite performer

Dave the Mortgage Broker By Andy W. Harris, CRMS Meet Dave. Dave is an old school mortgage broker I’ve had the pleasure of getting to know over the years. When I say “old school,” I mean that he’s been around so long his state license number is a negative number. Dave is a hard-working small business owner and has been through every kind of change you could imagine in the mortgage industry. Needless to say, he’s witty and stubborn (in a good way) and isn’t shy to tell you what he thinks. What I like about Dave is the character and passion he exudes in our industry which has certainly earned my respect and the respect from many others. His intensity is motivated by doing what’s right for his clients even if they don’t know it. This could mean offending a real estate agent when needed or making an underwriter wish they stayed home sick (if the situation calls for it). Either way, at times we can all have thicker skin to navigate through the mortgage process and be direct when necessary. There is nothing wrong with being passionate and intense if it’s supported with experience and strong morals. Here are a few things we can all learn from Dave:

Be stubborn and be grounded You owe it to your career and to your clients to have a plan backed with consistency when executing that plan. Too many in our industry are attracted to the flavor of the day, or short-term incentives rather than long-term rewards. Don’t be influenced by the hypes and shifting around from company to company. Be focused and grounded with a strategy and vision. Do your homework and pay attention.

Don’t be afraid to say what you think If there is a problem, deal with it. If there is a person who attempts something unethical or even illegal, deal with them. We should all have responsibilities and all have accountability. We are dealing with a very important financial transaction and the details matter. All of us can effectively work together with different personalities, but we must never forget our clients come first.

Keep overhead low Control your personal and business finances to avoid being negatively impacted during slower times or making poor career decisions. Those in financial stress are more easily influenced by sales people and recruiters selling nonsense during regulatory volatility. Don’t try to impress potential clients that in all reality will not be impressed by a fancy office and Rolex watch. People are impressed by actions, not appearances. As Dave always says, save your money! So why does Dave make more money and have more options than most mortgage originators? Because Dave has stayed on course and has never sold out. He’s focused and he’s aggressive. He’s only influenced by the inside, not the outside. So when you’re putting together your game plan for 2014, ask “What Would Dave Do?” Here are a few witty Dave-isms you’d hear if walking by his office: l I refuse to get into a battle of wits with an unarmed individual. l Why did the underwriter cross the road? To check owner occupancy.


continued on page 52


n National Mortgage Professional Magazine n DECEMBER 2013

Services LLC. LLC. All Rights Reserved. Reser ved. Equal for the extension of credit credit or a commitment 2013 ツゥ Rushmor Services LLC, Not an offer offer for LLC, NMLS ID# 185729, 15480 Laguna Canyon Canyon Road, Suite 100, Irvine, Rushmoree Loan Management Services ual Housing Lender Lender. r. Rushmore Rushmore Loan Management Services Irvine, CA CA 92618. 1-866-699-5600. Not brokers.. Rushmore Rushmore does Bankerr-Br - okerr--Servicer (#101513); Licensed for mortgage mortgage brokers. Massachusetts, Missouri, Missouri, or Nevada. Nevada. Alabama Consumer Credit Exemption; Arkansas Arkansas Mortgage Mortgage Banker-Broker-Servicer Licensed Credit (#21602); Alaska Mortgage Mortgage Lender (AK185729); (AK185729); Arizona Wholesale Lender Exemption; to lend. Intended for does not lend in Alaska, Massachusetts, by the Department Department of Corporations under the California tgage Lending Act (#4131068); Colorado Wholesale Wholesale Lender Ex Mortgage Lender (ML-185729); Delaware Delaware Mortgage Mortgage Lender (#012394); District of of emption (Regulated by by the Division of Real Estate); Connecticut Mortgage by Mortgage Exemption California Residential Mor Columbia Mor tgage Lender (MLB185729); Florida Mor tgage Lender Licensee (#24224); waii Mortgage Mortgage Loan Originator Company Company (HI-185729); Idaho Idaho Wholesale Lender Exemption; Exemption; Illinois Residential Residential Mortgage Mortgage Licensee (MB.6760723); Indiana Indiana Mortgage Mortgage Lender-Servicer Mortgage Hawaii tgage Lender r-Ser - vicer (MLD622); Georgia Mor 24);; Ha DFI First Lien Mor tgage Lending (#18619);; Indiana DFI Subor dinate Lien Mor wa Mor Kansas Supervised Kentucky Mortgage Mortgage Company Company (MC71455); Louisiana Residential Mortgage Mortgage Lending (#185729), Maine Mortgage Subordinate Mortgage tgage Lending (#187644); Io Iowa Mortgage tgage Bank Banker er (MBK-2009-0083); Kansas Supervised Loan (SL.0026265); Kentucky Super vised Lender (SLM11886); Mar inator (185729); M ississippi M ortgage Lender Servicer (FL0017075); Michigan Seconda Supervised Maryland yland Mor Mortgage tgage Lender (#19168),, Mic Michigan Mor Mortgage tgage Br Broker, okerr, Lender & Servicer Secondary ry Mo Mortgage rtgage Br Broker, okerr, Lender & Ser Servicer vicer (SR0017076);; M Minnesota innesota Residentia Residentiall Mo Mortgage rtgage Orig Originator Mississippi Mortgage (185729); Montana Mor New tgage Lender (#185729); Nebraska Mor tgage Bank er (#2071); Licensed by by the New New Hampshire Hampshire Banking Department Mortgage Mortgage Banker Department Mortgage Mortgage Banker Banker (#15265-MB), Licensed by by the New New Jersey Jersey Department Department of Banking and Insurance Residential Mortgage Mortgage Lender (#186729),, New Mexico Mor tgage Loan Compan th Car olina Mor tgage Lender (L-154769); (L-154769); North North Dakota Dakota Money Money Broker Broker (MB102411); Licensed Mortgage of Registration Registration (SM501700.000); Mortgage Companyy (185729); Nor North Carolina Mortgage Mortgage Banker窶年YS Banker窶年YS Department Department of of Financial Financial Services Services ( #B501009); Ohio Mortgage Mortgage Loan Act Certificate Certificate of Oklahom tgage Br oker (MB001561); Or egon Wholesale Lender Ex emption; Licensed bbyy the P ennsylvania Depar tment of Banking Mor Dakota Mortgage Mortgage Oklahomaa Mor Mortgage Broker Oregon Exemption; Pennsylvania Department Mortgage tgage Lender (#39094); Rhode Island Licensed Lender (#20132838LL); (#20132838LL); South Carolina Carolina Mortgage Mortgage Lender/Servicer Lender/Ser vicer (MLS-185729); South Dakota Lender (ML.04880); T Mor tgage License (109273); T exas SML Mor ennessee e tgage Banker Banker Registration; Utah Wholesale Wholesale Lender Exemption; Washington Consumer Loan Loan Company Company Tennessee Mortgage Texas Mortgage Exemption; Vermont Vermont Lender (#6411); Licensed by by the Virginia State Corporation Corporation Commission Lender Licens Licensee (MC-5664); Washington (CL-185729); W est Virginia Mor tgage Lender (ML-24836); Wisconsin Mor tgage Bank West Mortgage Mortgage Banker er (#185729); W Wyoming yoming Mor Mortgage tgage Lender/Br Lender/Broker oker (#2250); Fannie Mae Seller/Servicer Seller/Servicer (#30519-000-4); HUD FHA Title II (#3094100002);Veterans (#3094100002);Veterans Affairs Lender nder (#902914-00-00);; USDA. USD DA. A

Dinosaurs May Not Rule the Earth, but They Are Still Around

DECEMBER 2013 n National Mortgage Professional Magazine n


By Eric Weinstein


ell sure, you don’t see any 50-ton Triceratopses rummaging through your garbage at night, but they are around. They just look different now. Sharks evolved about 350 million year ago and they are still terrorizing beach resorts, right? Alligators came on the scene about 200 million years ago. Take a stroll through the Florida Everglades

slathered in chicken fat. My point is, you can still be a dinosaur in a mammalian world. You just have to learn to change a little. I am a mortgage broker through and through. That means I am a dinosaur. But, the Consumer Financial Protection Bureau’s (CFPB’s) January rules concerning Qualified Mortgages (QMs) is the burning meteor about to hit the Yucatan Peninsula. Duck and cover is not going to save you, like they taught us in grade school. This means trouble for us dinosaurs.

In case you did not know, a QM is a “Safe Harbor” for loans, because, basically, the repercussions of doing a mortgage loan wrong will be so absolutely horrible. If you do it like a QM, you cannot be sued. This covers, Fannie, Freddie, FHA, VA and USDA loans. To put it in a nutshell, basically, it says you can only make three percent on the deal to be “safe.” This includes the money you make (points and processing fees) plus the lender’s fees (underwriters, administration, etc.). Basically, anything that is not a

third-party pass through. Attorneys fees, recording appraisal, etc. are not included. Any money that goes to you or the wholesaler is included. That is the numerator. The denominator is the “Amount Financed” as per the Truth-inLending (TIL). This amount is lower than the actual loan amount. On a $225,000 loan, it works out to 2.375 percent or lower based on current average lender junk fees. Mortgage insurance (MI) is included if the upfront MI is above 1.75 percent. It must be non-

thought to myself, “What is there to mull over? What is the big decision? You either have the money to stay in the poker game, or you don’t when they raise the ante.” The CFPB’s new January rule basically continued the government’s theme to push loan origination to those with deeper pockets. Since the financial meltdown, their goal is to have someone’s money at stake if things go wrong again. Make no mistake, as a mini-correspondent you will now have more skin in the game, mainly the equity in your home, your life savings and your kid’s tuition fund. They want to make sure you are really, really paying attention. The game just got more risky. It’s ante up or get out of the game.

So, as an average loan officer, what does this have to do with me? Nothing, absolutely nothing. This is really directed to the owner of a small mortgage shop. As a carnivore, I basically kill what I eat. If one hunting territory is not fruitful, I just go onto another. If my broker doesn’t want to change, or cannot change, it will take me about 15 minutes to get hired somewhere else. Loan officers will do what they always do. They will do loans. It is just a matter of who they work for that should concern owners. In the 1990s, mortgage broker companies did 80 percent of the nation’s mortgage business. They were the 38-ton Brontosaurus of their day. Now, mortgage brokers do 20 percent of the nation’s business, they are the alligator of

their day. We are still around, just trapped in the Everglades feeding on turtles instead of crushing cars in Tokyo. And so it goes. Eric Weinstein worked in banking, on the commercial real estate side until 1991, when he fell in love with residential lending. In 1995, he started a small mortgage company in his basement called Carteret Mortgage Corporation, which in 2003, grew to one of the largest mortgage broker companies in the United States. These days, Eric is semi-retired, doing mortgages by referral only. As he likes to put it, “He is either saving people money per month or helping them buy a new home. What a great job!” He may be reached by phone at (703) 5058692 or e-mail


In the Nation! 11

For Branch opportunities call 877.896.8496

Real Estate Mortgage Network Inc, DBA Menlo Park Funding. 499 Thornall Street 2nd Floor, Edison, NJ 08837. NMLS# 6521

n National Mortgage Professional Magazine n DECEMBER 2013

refundable, or it is included. Monthly MI paid only is NOT included. Bona fide discount points up to two percent are not included. So basically, as a broker, you have a few choices. You can make 2.375 percent or less on every deal (or even less if the average loan amount is less in your area), you can get out of the business or join a big net branch, or you can evolve, if it is even possible. This is the little known part of the Jurassic Era where the rich dinosaurs outlived the poorer dinosaurs. To evolve, you are going to need to be a mini-correspondent now. This is basically, a lender with training wheels. Some big wholesaler will pick you up, get you a exclusive warehousing line, do everything for you and BOOM when the meteor hits, you are a “lender” if only in title, anyway. The trouble with this is you need the personal financial strength to make the switch. They don’t just give warehousing lines to just any hobo on the street. You need the net worth for that plus the costs of additional licensing, higher bonds, etc. Don’t forget audited financials for your FHA license, also. That will cost you a bundle. But, with half the market FHA loans, you can’t to be stuck without one. When all is said and done, you are still a broker, but your title is Now “Banker.” You are an alligator, not a dinosaur any more. It’s the same, just different. Now, let’s speculate and consider I am wrong. What’s wrong with only making 2.375 percent per deal? I live in Fairfax County, Va. It is one of the richest counties in the country. My average loan amount is about $350,000. I usually do make only two percent or less on a deal. I am fine, right? Well no. That would be dandy if I was a oneman operation, working out of my basement and had no wishes to ever expand. What loan officer in his right mind would want to come to work for me if the guy down the block could pay higher because he priced higher and his set up was basically the same as mine, except he was a lender and I was a broker? And going halfway to save money by only getting conventional and not FHA is the same problem. Who is going to work for me only doing conventional loans? Small brokers will have to change, because other similar small brokers will change. That will force them to evolve or die. I agree that some small brokers will not change and will begin to price their loans below the minimums set. That will not work, however, in the rural areas where home prices and average loan amounts are low. All things the same, if your costs are the same, but your revenues are lower, well, you get the picture. And don’t think because your pricing is lower that you will now get double the volume. It has been my experience where loan volume tends to follow the loan officer, not the pricing. You will get the same number of loans, just make less money. When I went to my first QM seminar, afterwards there were a room full of mortgage brokers mulling this over. I

EWSFLASH l DECEMBER 2013 l NMP NEWSFLASH l DECEMBER 2013 l NMP NE NAMB Affiliate Changes Name in Oregon

DECEMBER 2013 n National Mortgage Professional Magazine n


The Oregon Association of Mortgage Professionals, the Oregon state affiliate of NAMB—The Association of Mortgage Professionals, will become the Oregon Mortgage Association (OMA), expanding its mission to serve all facets of the mortgage origination process. “OAMP has proudly honored and supported the mortgage brokerage profession for years in Oregon,” said OMA President Matt Jolivette. “But as the mortgage world has evolved, the association needs to evolve with it.” Under the Oregon Mortgage Association name, the group will seek to expand its mission, reaching out to all professionals involved in making mortgages happen for consumers. “We see tremendous opportunities to connect the community of loan originators at brokerages, banks, credit unions and mortgage companies. And not just with each other, but also with consumers, Realtors, lending service companies and more,” said Jolivette. “At all levels, there’s a need for education, for networking, and for vigilance that the mortgage markets remain healthy and free to support our state’s housing industry.” Established in 1995, the Oregon Mortgage Association is the primary residential mortgage association covering the entire State of Oregon. The OMA represents hundreds of mortgage companies and thousands of mortgage professionals throughout the state, including every platform of residential mortgage banking and brokering available in the primary market. The association exists to represent, protect, and improve the quality of mortgage services in Oregon through awareness and communication. In a new initiative, the OMA will also be dedicating parts of its Web site to consumer education. “Buying or refinancing a home these days is a complex process, and consumers need unbiased guidance and help,” Jolivette said. “They’ll be

able to turn to our new Web site,, for tools such as mortgage calculators, help with understanding how much total costs will be, how much home they can afford, and more. We’ll also have news and advice, along with reliable statistical reports. And when consumers want someone local that they can trust, they’ll be able to access our directory of mortgage leaders who’ve sworn to uphold the highest standards of integrity.”

GSEs Announce Loan Limits to Remain the Same for 2014 The Federal Housing Finance Agency (FHFA) has announced that the 2014 maximum conforming loan limits for mortgages acquired by the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, will remain at $417,000 for one-unit properties in most areas of the country. The Housing and Economic Recovery Act of 2008 (HERA) establishes the maximum conforming loan limit that Fannie Mae and Freddie Mac are permitted to set for mortgage acquisitions. HERA also requires annual adjustments to these limits to reflect changes in the national average home price. Further information on potential future changes in the maximum size of loans that Fannie Mae and Freddie Mac guarantee will be forthcoming. “Realtors welcome today’s announcement from the Federal Housing Finance Agency that the current limits on conforming loans will remain in effect until further notice,” said National Association of Realtors (NAR) President Steve Brown. “As the leading voice for homeownership, NAR opposes lowering the ceiling on loans eligible for backing by the governmentsponsored enterprises. Lower loan limits would increase costs for consumers and reduce their access to conventional mortgages.”

In determining 2014 loan limits under the terms of the Housing and Economic Recovery Act (HERA), FHFA did not change the baseline maximum conforming loan limit for the United States. The baseline limit, $417,000 for one-unit properties in the contiguous U.S., was left unchanged based on historical index values for FHFA’s monthly and quarterly House Price Index (HPI). HERA requires that the baseline loan limit be adjusted each year to reflect changes in the national average home price. After a period of declining home prices, however, HERA requires that prior price declines be fully offset before a loan limit increase can occur. HERA provisions require that FHFA set loan limits as a function of localarea median home values. Where 115 percent of the local median home value exceeds the baseline loan limit ($417,000 in most of the U.S.), the local loan limit is set at 115 percent of the median home value. The local limit cannot, however, be more than 50 percent above the baseline limit. In the District of Columbia and all U.S. states except Alaska and Hawaii, the highest possible local area loan limit for a oneunit property is $625,500 (150 percent of $417,000). Consistent with FHFA’s prior practice in determining the 2014 HERA limits, FHFA used median home values estimated by the Federal Housing Administration (FHA) of the U.S. Department of Housing & Urban Development (HUD). FHA has calculated those median values for the purpose of determining its own lending limits. After the FHA loan limits are announced, FHA allows a 30-day appeals period for appellants to submit data suggesting a potentially higher median home value for a given area. If FHA changes its median price estimates as a result of any appeals, and if those changes would impact the FHFA conforming loan limits, FHFA may adjust the conforming loan limits and announce the resulting changes. In determining the 2014 HERA loan

limits in high-cost areas, FHFA continued its policy of not permitting declines relative to prior HERA limits. While HERA did not explicitly prohibit declines in high-cost area loan limits, that approach is consistent with the statutory procedure for responding to changes in prices on a national basis. Subject to this policy, the 2014 HERA limits reflect the higher of the limits directly calculated for 2014 and HERA loan limits determined for years 2009 through 2013.

HUD Unveils Its Definition of QM The U.S. Department of Housing & Urban Development (HUD) released its final rule which defines a “Qualified Mortgage (QM)” that is insured, guaranteed or administered by HUD. The final rule will be effective on Jan. 10, 2014 and will apply to mortgages with a case number assignment on or after that date. The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that HUD to propose a QM definition that is aligned with the Abilityto-Repay criteria set out in the Truth-inLending Act (TILA) as well as the Department’s historic mission to promote affordable mortgage financing options for underserved borrowers. HUD’s rule builds off of the existing QM rule finalized by the Consumer Financial Protection Bureau (CFPB) earlier this year. In order to meet HUD’s QM definition, mortgage loans must: Require periodic payments without risky features; have terms not to exceed 30 years; limit upfront points and fees to no more than three percent with adjustments to facilitate smaller loans (except for Title I, Title II Manufactured Housing, Section 184,Section 184A loans and others as detailed below); and be insured or guaranteed by FHA or HUD. Currently, HUD does not insure,

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360 Mortgage Announces New Pricing Model

DECEMBER 2013 n National Mortgage Professional Magazine n


360 Mortgage Group LLC has announced it launched a new aggressive pricing model on all currently offered mortgage products to further support the mortgage brokerage and correspondent lending communities. 360 Mortgage Group has made significant improvements to their pricing. This improvement translates into an overwhelming advantage for both wholesale and correspondent customers by offering competitive interest rates across the entire product spectrum, including conforming and government products, as well as streamline and HARP products. “360 Mortgage Group is 100 percent committed to the wholesale and correspondent channels and we are excited to now offer mortgage brokers and third party lenders access to one of the most competitive pricing models for both mainstream and niche mortgage products,” said Mark Greco, president of 360 Mortgage Group. “This new pricing initiative, coupled with our comprehensive technology platform and best-in-class service, will especially help the underserved mortgage broker be better positioned to help a larger segment of borrowers refinance or purchase a home.”

Velocify Announces New Customer Retention Tool Velocify has launched Engage for Mortgage Purchase as a part of its Velocify LeadManager product. This purchase loan-focused automated guided selling program is designed to help mortgage professionals build better relationships with borrowers and real estate partners and convert more purchase mortgage leads into closed loans. The new technology solution was developed in response to growing demand from the mortgage industry for automated sales tools that help lenders and loan officers take advantage of the shifting housing market and encouraging outlook for purchase mortgage originations. “In the last few years we have

worked closely with hundreds of clients who have successfully taken advantage of a healthy refinance market,” said Kelly Booth, Velocify’s mortgage division director. “As the market shifts, our goal is to help our clients remain agile, quickly adapting their business to take advantage of new purchase opportunities.” Engage for Mortgage keeps borrowers engaged through a number of automated sales processes including: automatically generated email messages to guide borrowers on next steps; reminders for loan officers to make calls to borrowers at key points in the borrowers’ home search process; triggers the loan officer when a certain number of days have passed since the last contact or when the borrower’s application is about to expire, and much more.

Guardian Launches New Site to Better Serve Customers Guardian Mortgage Company has announced the launch of their new Web site. The new site has been created to enhance the brand and support their commitment to educate and serve Guardian Mortgage customers throughout the life of their loans. “One of the principles we hold with high regard at Guardian is that we build true relationships with our customers that go far beyond the loan closing,” said Marcus McCue, EVP and chief business development officer. “These relationships are built on trust and our mission to serve each client’s short-term financial need to ensure their longterm financial success, so we want our customers to understand all aspects of the mortgage loan process and home ownership. Our new site was designed specifically for this reason.” The Loan University section of the new site contains rich and informative content created specifically for current and future homebuyers. Articles, blogs, infographics, resources and FAQs are available to help support homebuyers’

decisions throughout the life of their loan. “At Guardian Mortgage, we truly view ourselves as partners with our customers,” said Cari McCue, Guardian Mortgage EVP and chief administrative officer. “As such, we’ve created a new website full of information to help guide and inform our customers on key elements of the home buying and home refinancing process like new regulations, loan options, the loan process – as well as functionality and support for clients who are currently being serviced like the My Account portal and FAQs for various topics focus on payments and escrow accounts.”

Axacore Announces Latest EDM Platform Axacore Inc. has announced the latest release to their EDM platform. “This release is just another example of our commitment to continuously invest in our products for our customers and partners,” said Steve DeBlasio, vice president of Business Development. A few highlights include: Updated document stack security features that allow even greater role based security to viewing, uploading and editing documents; enhanced search capability for certain LOS integrations; new investor and servicer e-delivery templates; enhanced e-delivery security features to prevent unauthorized document delivery; new audit log fields for enhanced accountability; and print client updates to more efficiently handle large files. In addition to these features, Axacore is continually updating its underlying technologies to build on the existing high performance, scalability and reliability that the Axacore platform is known for. “Regulatory changes are forcing our customers to implement greater controls over their documents,” said DeBlasio. “This release will give them the control they need while maintaining the flexibility and performance

that they have come to expect from Axacore. This release also paves the way for a number of new and innovative features and product releases in the near future.”

Generation Mortgage Launches Site Geared Toward Understanding Home Equity Generation Mortgage Company has announced the launch of its nu62 Web site at, an online destination that helps homeowners understand the ways that their home equity may serve as a source of additional income and financial options during retirement. The site features borrower scenarios using real market economics to illustrate four home equity consumption strategies and showcases Generation’s cutting-edge, patentpending nu62 technology. The nu62 software allows potential borrowers to input information related to their personal situation, so they can determine which consumption strategy is best for their unique circumstances. “Many Americans who are retired or are approaching retirement have much of their net worth tied up in home equity, but they don’t realize that strategically utilizing this asset can be an important element of a retirement plan,” said Generation President and CEO Colin Cushman. “We developed to show homeowners exactly how they can strategically use their home equity. It was incredibly important to us that the site be interactive; visitors enter their own financial information and can visualize for themselves the positive impact strategic utilization of home equity could have on their financial future.”

Coester Announces New AI Appraisal Review System

Coester Valuation Management Services has announced the release of its new automated artificial intelligence based appraisal review system.

LoanLogics unveiled its MERS Independent Third Party Performance Monitoring and Annual Review service, a specialty niche audit practice. The service audits and tests MERS controls and processes, an offering many servicers need and have done without for too long. “Lenders have long recognized the importance MERS plays in helping save time, money and improving accuracy. At the same time, however, there is an extensive procedures manual that servicers have to familiarize themselves with, and that can prove to be a daunting task for many of them,” said Gary Vandeventer, LoanLogics’ vice president loan servicing consulting. “Our firm can deliver the expertise required to review MERS processes and proce-

Vandeventer. “That’s a critical consideration in the wake of everything that has happened to the mortgage industry over the past few years.”

Equifax Unveils New Risk Score Aimed at Minimizing Bankruptcy Losses Equifax has announced the launch of its fourth generation Bankruptcy Navigator Index (BNI) score, its most comprehensive and predictive bankruptcy risk score ever. With BNI 4.0, lenders can make more confident risk decisions through significantly enhanced insights and predictability

into potential consumer bankruptcy. “This is our most effective consumer bankruptcy risk score yet, providing deeper and more predictive insights driven by wider data and more powerful analytics,” said John Cullerton, senior vice president of Product Innovation and Management with Equifax. “BNI 4.0 will give lenders the ability to predict and avoid potential consumer bankruptcies with improved performance and more consistent decisioning. The benefits of this new product translate to overall more confident risk decisions for Equifax customers.” By leveraging BNI 4.0 lenders and continued on page 36


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LoanLogics Debuts New MERS Service

dures and ensure that clients are always compliant. We perform those services for them on a continuous basis.” The aim is to identify the processes already in place and those procedures that need to be added to a servicer’s operations to ensure they are compliant with MERS regulations. For instance, servicers have to incorporate the legal requirements for lien releases into their processes, or risk regulatory scrutiny and possible action. Or, a loan in bankruptcy has to be signed out of MERS before that process can begin. “We make sure the rules covering MERS have been implemented and tested, and that allows our clients to feel confident that they can pass a MERS audit without any issues,” said

Appraiser Intelligent Review, or AIR, employs appraiser based logic to automatically review all reports completed by CoesterVMS network appraisers. The two-part process includes an initial validation of key fields on the report followed by nested analytics to ensure adherence to applicable FHA and GSE requirements. “Nothing like this has even been close to done before, we are not using just a base checklist but this is actual appraisal logic and will be more accurate than anything ever done,” said Brian Coester, CEO of CoesterVMS. “The great part about this is the more information and data a client puts into the system the more accurate it is. In certain geographic areas where we have a lot of relevant data the report is as accurate as an appraisal desk review because we have data from hundreds of reports in the local market area to compare the appraisal report to.” CoesterVMS developed basic Appraisal Validations to eliminate time consuming conditions relating to transposed verbiage or minor errors. Immediately upon report transmission, the Cloud Control System provides appraisers notification regarding any fields discrepancies between order data and the uploaded report. Following validations, the system scans an XML version of the appraisal against two million lines of code and over 150,000 algorithms to tract and score appraisals based on actual appraiser logic. XML review results in a scrub against rules representing the tenants of regulatory and investor valuation guidelines. In the event a report exceeds allowable logic for a specific rule, additional logic factors in specific market conditions and market adjustments to identify support for the discrepancy. Clients receive a detailed breakdown of all logic employed by the system, as well as commentary from quality control staff in the event the system recommends further analysis.

Why Lenders Relying on the 4Cs of Automated Review Thrive By David Rasmussen

DECEMBER 2013 n National Mortgage Professional Magazine n


Lenders using the 4Cs of automated appraisal review are thriving. Technology is not taking the place of qualified human reviewers; instead the 4Cs are better aligning operations for efficient, consistent and more compliant review. At Veros, we define the “4Cs” through the four primary components of VeroSCORE: Completeness, Compliance, Credibility and Complexity. Let’s take a look at how applying a technology-based focus on those four critical areas of the appraisal are providing valuation teams with tremendous lift in operational efficiency. Completeness and Compliance checks are no-brainers (yes, I believe that is the technical term). By this, I don’t mean to imply we should assume every report will be complete and compliant, what I’m saying here is that in today’s day and age it is unacceptable for a lender not to have a process by which they can verify an appraisal is in fact complete and meets basic compliance standards. This basic level of functionality should be readily available in any marketable appraisal scoring tool. “Why not simply have my internal team perform these checks,” you ask? Two reasons: Automating this logic process will save you and your team tremendous amounts of time, allowing you to reinvest those hours in more fruitful activities. Secondly, no matter how skilled your team, mistakes can and do happen and manual processes that vary from person to person encourage error, inconsistency and are difficult to document from a regulatory compliance standpoint. An automated check in these two functional areas on the appraisal report put time, reliability and audit trails directly back into your organization, often, without lifting a finger. As important as those areas are, the latter two components of appraisal scoring are where a lender really begins to gain traction. A common concern raised in the arena of Credibility scoring is how an automated tool can assess and quantify this attribute. The answer is two-fold. First, by comparing the appraisal data to known and verified data or trusted analytics outside of the appraisal report and scoring against weighted measures for issues such as data integrity; and second, by reporting the supporting data related to identified discrepancies back to the user, allowing a qualified human reviewer to take the next appropriate action. The final area, Complexity, is an aspect to appraisal scoring introduced by Veros earlier this year. Some homes are cookie-cutter, sitting within highly conforming neighborhoods with a steady market trajectory and plenty of recent sales data to consider. However, this description fits only some homes in certain market conditions and one of the fundamental reasons the appraisal profession exists is that it isn’t always quite so black and white. Before jumping to the conclusion an appraisal report is “wrong,” or that an adjustment discrepancy detected by a compliance check needs correction, a reviewer of any skill level would benefit from understanding how difficult the valuation assignment is believed to be and to review the data supporting or rejecting this measure of complexity; thus, creating context and the opportunity for a more informed conversation with the appraiser. It’s important to view automated scoring tools as a supplement to the lender’s due diligence practice and an opportunity to establish common ground based on verifiable data when value disputes arise between a reviewer and an appraiser. David Rasmussen is senior vice president of operations at Veros Real Estate Solutions. For more information, call (714) 415-6300 or visit


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guarantee or administer mortgages with risky features such as loans with excessively long terms (greater than 30 years), interest-only payments, or negative-amortization payments where the principal amount increases. Moreover, HUD’s existing underwriting standards require lenders to assess a borrower’s ability to repay their mortgage debt. The new limit on upfront points and fees for all Title II non-manufactured housing FHA-insured single family mortgages is consistent with the private sector and conventional mortgages guaranteed by Fannie Mae and Freddie Mac to attain qualified mortgage status under CFPB’s final rule. The rule establishes two types of Qualified Mortgages that have different protective features for consumers and different legal consequences for lenders. HUD’s Qualified Mortgage classifies a loan as either Rebuttable Presumption Qualified Mortgages or Safe Harbor Qualified Mortgages depending on the relation of the loan’s Annual Percentage Rate (APR) to the Average Prime Offer Rate (APOR), the rate for the average borrower receiving a conventional mortgage. A Rebuttable Presumption Qualified Mortgage will have an APR greater than APOR + 115 basis points (bps) + on-going Mortgage Insurance Premium (MIP) rate. Legally, lenders that offer these loans are presumed to have determined that the borrower met the Ability-to-Repay standard. Consumers can challenge that presumption, however, by proving that they did not, in fact, have sufficient income to pay the mortgage and their other living expenses. Safe Harbor Qualified Mortgages will be loans with APRs equal to or less than APOR + 115 bps + on-going MIP. These mortgages offer lenders the greatest legal certainty that they are complying with the Ability-to-Repay standard. Consumers can still legally challenge their lender if they believe the loan does not meet the definitions of a Safe Harbor Qualified Mortgage.

Study Finds Older Homeowners More Financially Secure The Mortgage Bankers Association’s (MBA) Research Institute for H o u s i n g America (RIHA) released a new report entitled “A Profile of Housing and Health among Older Americans,” authored by Professors Michael D. Eriksen of Texas Tech University, Gary V. Engelhardt of Syracuse University, and Nadia Greenhalgh-Stanley of Kent State University. “The study found older Americans who own their homes are more financially secure and generally experience

fewer impediments to good health than their peers who rent,” said Professor Eriksen. “Owning a home provides the single largest asset in most Americans’ retirement portfolios, while renters have far more difficulty modifying their living space to adapt to any of the myriad physical ailments that tend to affect older people. Our report serves as a useful reference for all parties interested in the implications of housing on an aging society, a situation America now faces with large numbers of the Baby Boomer generation rapidly heading into retirement age.” This new RIHA report examines the housing and health status of older Americans roughly a decade after the Commission on Affordable Housing and Health Facility Needs for Seniors in the 21st Century released its report detailing the challenges facing all levels of government and society in ensuring support for housing and health needs as the population ages. This latest study provides a profile of the housing, functional status and health status of the near old (individuals aged 55 through 64) and older Americans (aged 65 and older) using the most recent data available from the Health and Retirement Study, a joint product spearheaded by the National Institute on Aging and the University of Michigan. “Housing demand over the next decade will be significantly impacted by the aging of the U.S. population. Real estate finance must also evolve to meet these changing needs, whether older Americans age in place and continue to own their homes, or whether they rent,” said Mike Fratantoni, executive director of RIHA, and vice president, Research and Policy Development for MBA.

GSEs Ordered Servicers to Stop Benefiting From Captive Reinsurance Arrangements The Federal Housing Finance Agency (FHFA) has announced that it has directed Fannie Mae and Freddie Mac to prohibit servicers from being reimbursed for expenses associated with captive reinsurance arrangements. The announcement follows a Notice that FHFA published in the Federal Register last March regarding its views on these lender-placed insurance practices and accepting public input. The Notice also cited concerns that the practices expose Fannie Mae and Freddie Mac to potential losses as well as litigation and reputation risks. FHFA also established a Regulatory Working Group consisting of federal and state regulatory agencies to ensure that all parties with an interest and role in the subject of lender-placed insurance continued on page 18


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Marketing Compliance Corner: Social Media Revisited By Michael J. Wallace Esq. Here are some interesting facts: 93 percent of marketers use social media for business, which means only seven percent of businesses do not use social media. The 45-54 year age bracket is the fastest growing demographic on both Facebook and Google+, and social media is the number one activity on the Web (Belle Beth Cooper, @bellebethcooper, July 16, 2013). Regulation and compliance risk certainly are concerns. However, this should not prevent your company from using this marketing channel. The question is not should you use social media, but rather, how to use it compliantly and manage the risks to reap the rewards of this marketing tool. Companies may not use social media because of the concern that the cost and hassle factor of managing and reviewing it are too onerous. After all, companies have to comply with all of the federal and state rules and regulations concerning marketing. We believe that your company can manage the risk in a cost-effective manner. Here are some practical tips for managing your risk: 1. Create and implement a Social Media Policy which should include: a. Disclosure of all sites used by each LO (including Web sites/pages); b. A detailed review process/procedure for LO with a grading system; c. Feedback to the LO and management; d. Disseminate policy and updates to all staff;

DECEMBER 2013 n National Mortgage Professional Magazine n


2. Establish and implement review process/procedures: a. Train compliance staff to identify and correct posts b. Provide written reviews to loan officers and management c. Maintain copies of all reviews, posts for Reg. N purposes; d. Implement a system to use or purchase an existing tool to assist with the process; 3. Train, train and train: Educate the LO and all staff about the proper use of social media including: a. Copyright, use of various words, phrases, logos and privacy issues b. Private and business uses (social media, Web sites, e-mail addresses) c. All federal and state rules and regulations that apply generally to marketing and communication are applicable to social media. 4. Develop a library of compliant and relevant posts for LOs to use. This may set your Company ahead of competitors. Please feel free to contact me with any questions or comments: Michael J. Wallace Esq., president of CLIX MG by phone at (727) 474-0961 or e-mail Social Media Management System (SMMS) is a Web-based tool to help compliance staff implement the company’s social media policy. SMMS reduces overhead costs and helps review the use of social media, identify and correct compliance issues and complies with Regulation N as well as the Consumer Financial Protection Bureau’s requirement for a CMS. For more information, visit Michael J. Wallace Esq. is president of CLIX MG. Marketing Compliance Manager (MCM) is a Web-based compliance management system for marketing and lead programs, including social media. For a 15-minute live demonstration, please visit He may be reached by phone at (727) 474-0961 or e-mail


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are engaged in the discussions. The views of the Working Group were carefully considered along with the more than 30 replies FHFA received from consumer advocates, state regulators, lender-placed insurance carriers, servicers, managing general agents, individuals, and trade associations in response to the Notice. “FHFA remains concerned about the cost of lender-placed insurance for Fannie Mae, Freddie Mac, and consumers,” said FHFA Acting Director Edward J. DeMarco. “One of our primary responsibilities as conservator of Fannie Mae and Freddie Mac is to preserve and conserve their assets on behalf of taxpayers. This directive is intended to reduce their costs as we consider additional measures.”

Home Values Projected to End Year 6.7 Percent Higher Than 2012 More than 100 forecasters said they expect the U.S. home values, as measured by the Zillow Home Value Index (HVI), to end 2013 up an average of 6.7 percent yearover-year, according to the latest Zillow Home Price Expectations Survey, before slowing over the next five years. Most panelists also said they would like to see the federal government maintain a considerable role in the mortgage market. The survey of 108 economists, real estate experts and investment and market strategists was sponsored by leading real estate information marketplace Zillow Inc. and is conducted quarterly by Pulsenomics LLC. While appreciation is expected to remain strong through the remainder of this year, the pace of home value growth is predicted to slow considerably through 2018. Panelists said they expect appreciation rates to slow to roughly 4.3 percent next year, on average, eventually falling to 3.4 percent by 2018. Based on current expectations for home value appreciation over the next five years, panelists predicted that overall U.S. home values could exceed their May 2007 peak by the first quarter of 2018, and may cross the $200,000 threshold by the end of 2018. “The housing market has seen a period of unsustainable, breakneck appreciation, and some cooling off is both welcome and expected,” said Zillow Chief Economist Dr. Stan Humphries. “Rising mortgage rates,

diminished investor demand and slowly rising inventory will all contribute to the slowdown of appreciation.” The most optimistic quartile of panelists predicted an 8.3 percent annual increase in home values this year, on average, while the most pessimistic quartile predicted an average increase of 5.6 percent. Expectations among the optimists fell from 9.3 percent in the last survey, but rose from 5.1 percent among the pessimists. The most optimistic panelists predicted home values would rise roughly 12.5 percent above their 2007 peaks by the end of 2018, on average, while the most pessimistic said they expected home values to remain about 6.2 percent below 2007 peaks. A number of public and private plans for overhauling the nation’s mortgage finance system and reforming government-sponsored entities Fannie Mae and Freddie Mac have been proposed, all of which seek to reduce and redefine the government’s role in the mortgage market to some degree. As these policy conversations begin, panelists were asked how involved they think the federal government should be in any re-imagined mortgage system. Among those panelists expressing an opinion, the majority (58.4 percent) said the federal government’s involvement in the conforming mortgage market should be “somewhat significant,” “significant” or “very significant.” Only eight percent of respondents said the federal government should have a “non-existent” role in the conforming market. Panelists were also asked to define an appropriate level of government-backing for mortgage loans going forward. Among those panelists expressing an opinion about what maximum percentage of all new mortgages should be backed by the federal government, the median response was 35 percent, roughly the level seen in 2006 at the height of the housing bubble.

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.


n National Mortgage Professional Magazine n DECEMBER 2013

NAMB PERSPECTIVE The President’s Corner: December 2013

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As you begin this article, I hope you are enjoying the 2013 holiday season. The year 2014 is knocking at our door, and then we begin a brand new year. For the most part, 2013 has been a great year for not only business, but also for family and friends. I have traveled to several state conferences, the NAMB National event in Las Vegas, the Ultimate Mortgage Expo in Atlantic City, the NMLS Conference in San Antonio, to Washington D.C. for the Legislative & Regulatory Conference and back to D.C. several times to meet with the Consumer Financial Protection Bureau (CFPB), other associations and legislators to work on the qualified mortgage (QM) rule, the disclosures and everything else going on in our broker lives. The best part of all of these travels is meeting the NAMB members and having the opportunity to engage in dialogue about almost anything. I personally want to thank all of you who are members for being members and staying members. NAMB’s Board of Directors has changed somewhat over the past two years of my Presidency, and I feel that we have made this association a better one for everyone.

I hope you have had a great year, but now it is time to begin to prepare for the 2014 push. This year is going to be the year that you will need to take yourself back to your beginning and do things like we used to do to get loans. The days of the phone ringing off the hook and getting those loans falling into your lap are gone. I think that 2014 is going to be the year that you will need to put a plan together and to stick to it. I can remember my economics professor in college, Mr. Percy O’Vera, who said, “If you fail to plan, then you plan to fail.” I can tell you that we all need to make new business plans and move forward with them. You are going to need to go back to the dance with the one that brought you and understand that there are still a lot of refis out there, but you have to work to get them. Yeah, I know the other push is for purchase business and this is also starting to get better. Here in Indianapolis, I have finally started to see some of my buyers getting out and finding homes. The main reason is they want to make sure that they can get those great rates that are still available. One item that seems to be a little more active out there is commercial business. I have been receiving requests

Happy Holidays ... A Gift From the CFPB? Look Out … I See Flood Waters on the Horizon! By Richard M. Bettencourt Jr., CRMS, CMHS Happy December to all! I hope this article finds each of you enjoying this wonderful time of year! Something just clicks inside of me once we turn that corner that is Thanksgiving, and head in December. It's that one time of the year when people give a little more, care a little more, and love a little more. So, whether it's Christmas, Hanukah, Kwanza or any other holiday you may celebrate in December, I hope it's a wonderful season for each and every one of you! Speaking of giving … I would say the Consumer Financial Protection Bureau (CFPB) gave a nice little gift to our "confused" consumers in the form of an updated Loan Estimate Form and Closing Disclosure Form. Now, I put confused in quotation marks because I

don't really believe our consumers are naturally confused about the mortgage process; I think an industry of old and new regulators, Fannie Mae, Freddie Mac, banks, brokers, credit unions, congressional leaders, and other players in the process of rule making intentionally and unintentionally confused the hell out of these poor consumers! However, in defense of my mortgage peers, there are a fair share of consumers that completely understood the process and the ramifications of their decision-making, yet they cried poor when they couldn't get out of a program/loan they asked for. So what do they do … they blame the originator! These changes were not brought on by brokers, they've been the scapegoat for six years now. Ironic that a recent article shows a TPO mortgage is higher credit quality and performing better than most … interesting! So, what is the most recent change! For those of you that are members of NAMB—The Association of Mortgage

for this type of loan and before, I would just say that I didn’t do them. But now, NAMB+ has partnered with USA Business Lending to help you with those requests. All you need to do is contact Mike Surber or Pam Pfenning at (317) 846-2800 and they will walk you through the sign-up process and look at your deal. This is an excellent opportunity to increase your business from a different source. They do hotels, strip malls, and just about anything out there commercially. So give them a call. They also offer Webinars to help you talk about what you can do to increase your production on the commercial side. It amounts to a great opportunity to make you more money. I hope that all of you have been reading my weekly updates with the “Monday Morning Messenger.” This seems to be something that everyone is looking forward to getting each week. I enjoy the fact that we are sharing what we are doing each week with you and you should be becoming a betterinformed member. If you think that there might be something else we could do to help the membership, please drop me a line and let me know. One of the highlights has been we are spotlighting a NAMB+ Strategic Partner each week so you can see the vast array of things we do for you as our member. If you think that there is something out there that can benefit you and a lot of our members, let us know by e-mailing

me at We are always looking for partners to make your life easier. Just a reminder, that this is the time of year for your mortgage license renewals. Make sure that you have all of your education completed prior to trying to renew. I know that it is a tedious process, but it is something you must do. As we close out the year, I again want to thank each of you for your support, and I appreciate the help throughout the year. I hope each and every one of you have a great holiday and a joyous New Year. Please continue to send me your suggestions and watch for the “Monday Morning Messenger” each and every Monday. It is my way of staying in touch with you, the member and well as you staying in touch with NAMB. And from the entire NAMB Board of Directors, we wish you the gifts of laughter, peace, and love this holiday season! Sincerely,

Professionals, you saw in my most recent video that I was at the CFPB's Public Hearing on the NEW Integrated Mortgage Disclosures. You know where this hearing was held? It was held in my hometown and home of the 2013 World Series Champions, this can be no other than Boston! As a die-hard baseball and Red Sox fan, I felt it was important to highlight this awesome fact! In attendance at this meeting was the who's who in the Commonwealth as it pertains to finance and regulatory oversight. We heard from our Commissioner of Banks, David Cottony and State Treasurer Steve Grossman. They were followed of course by former Massachusetts Commissioner of Banks and current Department Director of the CFPB Steven Antonakes. Director Richard Cordray completed the presentations with an excellent speech on the goals of the Integrated Mortgage Disclosures which is the simplification of the mortgage process for our consumer. I've been asked many times since that hearing "What is your take on these new forms?" The minute the final rule was published on the CFPB's Web site, I immediately went to work with my Government Affairs Team to break

down these 1,364 pages to see what the impact would be on the consumer and of course my mortgage broker friends and family. Now, if our interpretations hold true on this final rule, then this is a HUGE win for our consumers. For the first time in I don't know how many years, a consumer will now be able to compare a Loan Estimate (old GFE) Form across all conduits without disparity. Simply put, a Loan Estimate (old GFE) from a Broker, Bank, Non-Depository, Credit Union, or Small Community Bank will look exactly the same. That consumer will now be able to compare apples to apples and oranges to oranges. What eliminated this disparity? The CFPB executed it's exemption authority under Dodd-Frank to exclude interest rate based compensation from the Loan Estimate Disclosure. Here are two excerpts from the final rule page 824-825:

Donald J. Frommeyer, CRMS, President NAMB—The Association of Mortgage Professionals

"Consistent with Dodd-Frank Section 1405(b), disclosure of only the direct charges the consumer will pay will reduce both consumer confusion and the possibility of information overload, improve consumer understanding of the Loan Estimate, and make it easier for creditors or mortgage brokers to com-

NAMB PERSPECTIVE plete the estimates of closing costs, which is in the interest of consumers and in the public interest." "As stated above, § 1026.37(f)(1) is being adopted pursuant to the Bureau’s exemption authority under TILA section 105(f) to exempt the creditor from the disclosure of loan originator compensation from the creditor, as required by TILA section 128(a)(18). The Bureau has considered the factors in TILA section 105(f) and determined that, for the reasons discussed above, an exception is appropriate under that provision." Please note that the above referenced text was taken from pages 816825 of the CFPB's Final Rule on the RESPA/TILA Integrated Mortgage Disclosures. WOW! That is awesome! So, what else came from this new Final Rule? Another big win for consumers was the elimination of the All-In Annual Percentage Rate Calculation (APR). This would have most definitely confused the you know what out of a consumer

shopping for a home loan. Imagine a NOTE rate of 4.25 percent with an All-In APR of 6.975 percent? Have fun explaining that one in your office when you're taking a mortgage application. Also, the CFPB realized that requiring creditors to keep records of the Loan Estimate and Closing Disclosures in an electronic, machine readable format was not practical; so that was removed from the final rule. So, to surmise the RESPA/TILA Integrated Mortgage Disclosure Final Rule, I would say we are, at this stage extremely happy with the CFPB's approach and ultimately end product. I would also like to add that if our interpretation holds true, the CFPB should be applauded its use of their exemption authority to simply the mortgage process. NAMB would like to thank the CFPB for listening to our commentary and taking our suggestions into consideration. One last thing, and I saved this for last paragraph to emphasize the importance of this very real and very serious issue! Some of you may or may not be

aware, but a law recently went into effect and it's wreaking havoc on the flood insurance premiums homeowners are forced to pay. The BiggertWaters Flood Insurance Reform Act went live on Oct. 1st and this has had an immediate and adverse impact on thousands of consumers across the country. This law removes the federal subsidies that were available under the National Flood Insurance Program (NFIP). The subsequent result has equated to flood insurance premiums nearly tripling overnight in some parts of our country. This is not just a coastal issue. This is an issue that affects landlocked states as well. Take Vermont for example. In 2011, the State of Vermont suffered devastating floods. This pendulum swing from a fully subsidized insurance premium to NO subsidy at all is NOT the way to address a situation such as this. SO, there are two bills right now in Congress that need your help. Please reach out to your Senator and Congressional Leader and ask them to support Senate Bill 1610 and House Bill 3370. This will delay the

implementation of the Biggert-Waters Flood Act and require FEMA to initiate an affordability study over the next four years. Please contact your representative and ask them to support HR 3370 and S 1610! Well, I'd say that's enough for today! If you're not a member of NAMB - The Association of Mortgage Professionals please go to and join. The more members we have the louder our voice will be when we need to use it! It's never about how many loans you close, rather it's about how your voice can make a difference for your industry and the consumer. I hope you all have a wonderful holiday season and a happy and safe New Year! Richard M. Bettencourt Jr., CRMS, CMHS of Danvers, Mass-based Mortgage Network is Government Affairs Committee Chair of NAMB—The Association of Mortgage Professionals. He may be reached by phone at (978) 777-7500 or e-mail

What Does It Mean to be a Member of NAMB?

Raise the bar for yourself and our industry. Get yourself a national designation and get recognized for being one of the best in the business. Go to and join today! You can make a difference, if you choose to. Get involved. Kay A. Cleland, CMC, CRMS of KC Mortgage LLC in Castle Rock, Colo. is secretary of NAMB—The Association of Mortgage Professionals. She may be reached by phone at (720) 810-4917 or email

Our mission is to use the power of video to complement the written word and inform, educate, enable and empower mortgage professionals with the most relevant, up-to-date information and advances in the mortgage industry. It is our goal to offer worthwhile information to our viewers, while delivering it with the utmost professionalism.

n National Mortgage Professional Magazine n DECEMBER 2013

What exactly does it mean to be a licensed mortgage originator, a mortgage company, and a member of NAMB—The Association of Mortgage Professionals. I remember when I started in the mortgage business in 1982. Rates were 18 percent with discount points. FHA files were thick, files were expressed-mailed to lenders, and originators and companies joined their trade association, just like doctors, dentists and attorneys. A professional joined a trade association just because it was the right thing to do. It was important to stay up to date on what was happening in the industry. We went to association meetings, networking events, conference call updates, and lobby days locally and nationally. The more people that support the industry, the louder the voice and the better the result. It’s time to get back to the basics and get involved. Not only does your association need your support, you need it and the consumers need it as well. Why join NAMB? Simply put, you need to support the industry that is supporting you NAMB fights for you on a daily basis, both locally and nationally.

The benefits of being a member are significant: l Take control and get involved … if you don’t get involved, you will not have a job l Legislative updates and activities l Best business insurance l Professional designations such as the General Mortgage Associate (GMA), Certified Mortgage Consultant (CMC), Certified Residential Mortgage Specialist (CRMS) and NAMB’s Lending Integrity Seal of Approval l Recognized as a professional … join your association just like doctors, real estate agents and builders do l Power in numbers l Members only discounts l Credibility and notoriety l Education l Networking among your peers

By Kay A. Cleland, CMC, CRMS


heard street ON THE

Our Heard on the Street column is a chronicle of events, changes and passages in the lives of the people and companies shaping the mortgage industry.

GSF Mortgage Opens New Texas and Minnesota Branches

DECEMBER 2013 n National Mortgage Professional Magazine n


GSF Mortgage has announced the addition of its newest branch in Sugar Land, Texas. Bernice Frimpong will head the new GSF branch. Frimpong comes to GSF with a diverse background. She graduated from Sam Houston State University with a major in business with a focus on finance and accounting. With her degree, Frimpong worked at a credit union for numerous years and has experienced being an independent insurance agent. She is a licensed real estate agent, only taking referrals. With this extensive knowledge, Frimpong dabbled in various entrepreneurships and found her passion in the mortgage industry. Using her real estate background, she finds it important to educate her clients on both subjects. “I like the satisfaction of knowing I contributed to the success of my client’s homeownership,” said Frimpong. To help make her new branch successful, Frampong plans to take advantage of booming construction loans. By doing so, she will be able to form partnerships with small banks. GSF Mortgage has also announced a new branch in Alexandria, Minn. The addition will be overseen by Branch Manager Todd Hocum, and joining Hocum, is Leif Nohre and Bruce Strandskov. Hocum comes to GSF with 26 years of experience in the mortgage industry and an educational background in finance. He worked alongside Jim Guzanick, Phil Siebert and Brian Fiskum, the founders of GSF Mortgage, for many years. In 1995, they parted ways and each started their own mortgage company. With nearly 20 years of entrepreneurship under his belt, Hocum chose to join the GSF family. “There are a lot of net branches out there to work for, but I didn’t even have to look around,” said Hocum.

DocMagic Partners With Veri-Tax on Tax Transcript Initiative DocMagic Inc. has announced a new integration with VeriTax. Together, DocMagic and Veri-Tax have created an automated ordering mechanism for retrieving tax transcripts from the IRS, which is triggered when a borrower successfully eSigns the 4506-T form via DocMagic’s eSign platform. “Through this integration, DocMagic has created a highly efficient, completely automated, no-touch ordering mechanism for ordering and delivering IRS tax transcripts, a mortgage loan underwriting requirement,” said Dominic Iannitti, CEO of DocMagic. “By combining a number of our automated technology solutions, we have created a streamlined approach that improves lenders’ efficiencies while keeping them in compliance.” DocMagic’s automated solution is utilized when a 4506-T form is embedded in an initial disclosure package, included in another document package, or ordered individually by the lender. Once the entire package is eSigned by the borrower, DocMagic’s automated solution instantly forwards the eSigned 4506-T, with the document-level audit log, to Veri-Tax to process the tax transcript request. The completed transcripts are delivered directly to the lender’s designated location without ever having to log into an ordering portal or third-party platform. “DocMagic’s integration is the easiest and fastest way for lenders to request a borrower’s signature on the 4506-T and to automatically receive tax transcripts,” said Maria Kirgan, VeriTax’s senior director of product management. “Our goal is to make our products accessible and easy to use

through key partner integrations. We are thrilled to offer this new integrated solution to our customers, saving them time and streamlining their process.”

Shore Mortgage Now Licensed in All 50 States Shore Mortgage has announced that the firm is now licensed to originate and service mortgages in all 50 states. This makes Shore Mortgage, a division of United Shore Financial Services, part of a select group of direct lenders with nationwide coverage. “Pardon the pun, but we now operate from shore to shore,” said David Hall, president of Shore Mortgage. “Being able to operate in every state—which means covering our country’s nearly four million square miles gives Shore Mortgage a strategic advantage. In terms of training and technology, this was hard work, an effort only a few are willing to attempt. But it is well worth it … especially for our clients moving from state to state.” Founded in 1986, Shore Mortgage offers clients a range of programs, competitive rates and terms, and the convenience and security of a direct Internet-based application and approval process. “This is an important part of Shore Mortgage’s growth strategy,” Hall said. “We are built upon more than 20 years of world-class service, and I’m happy we are extending that reach.”

FGMC Named to 2013 Ellie Mae Hall of Fame

First Guaranty Mortgage Corporation (FGMC) has been named an Ellie Mae 2013 Hall of Fame inductee. FGMC is a

full-service mortgage lending firm offering retail, correspondent, warehouse and wholesale mortgage solutions to clients nationwide. Each of the inductees was chosen for its innovative and creative use of Ellie Mae technology. FGMC, one of 11 inductees in this year’s class, was commended in the category of “Exceptional Customization of Encompass.” Encompass is Ellie Mae’s leading loan origination system. “Our Hall of Fame inductees are some of the most technologically and business savvy mortgage companies in the country,” said Jonathan Corr, president and chief operating officer of Ellie Mae. “They have leveraged Ellie Mae’s Encompass technology to automate the process of originating loans, improve compliance and enhance their customers’ overall experience. We are pleased to congratulate these leaders on their well-deserved place in our Hall of Fame and look forward to working with them for years to come.” “Technology has long since exceeded the status of ‘nice-to-have’ and is no longer a luxury in this market,” said Ben Sizemore, chief information officer for FGMC. “We are proud to partner with Ellie Mae to provide easy-to-use technology to our clients on all levels to make each transaction more efficient and cost effective at all ends.”

AllRegs to Publish Sun West’s Lending Library Sun West Mortgage Company Inc. has announced that AllRegs will publish Sun West’s lending library of wholesale and correspondent guides. Sun West will now leverage the AllRegs technology platform and publishing expertise to manage and maintain its underwriting guides. Users will benefit from a variety of productivity tools, including an electronic table of

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Leaders Are Survivors moved and inspired. But what is it about these personal stories that ave you ever taken we find so compelling? On The New the time to notice York Times best-seller list, at the what kind of time of this writing, the list of books make the best- books that could be classified as seller list? You know, those books memoirs includes titles such as I that are on display at the ends of Am Malala, The Death of Santini, aisles at Wal-Mart, Target and even Lean In, Undisputed Truth, and The Barnes & Noble? Of course, there's Reason I Jump. What do all of these always fiction. There's the latest titles have in common? They are teen fantasy saga. And there's survivor stories. always a string of crime and susWe love a good survivor story. pense novels. There are your We love a story in which the hero romance stories and your Stephen emerges against all odds. I Am King books, but what about non- Malala is a story about a girl surfiction? What kind of non-fiction viving an oppressive culture. The books really sell? Death of Santini is about a boy surThere are always a good bit of viving an abusive relationship. political and self-help books on the Lean In is about woman surviving best-seller list. And there's always an industry dominated by men. a significant number of history Undisputed Truth is about a man books. But if there's one genre that surviving poverty and violence to always seems to sell—it's the mem- enter into professional sports. The oir. When people tell stories about Reason I Jump is about a boy surtheir lives and experiences, we viving autism. We love these surtend to listen. We're convicted, vivor stories, because they fill us By David Lykken


DECEMBER 2013 n National Mortgage Professional Magazine n


with hope. We put ourselves in the shoes of these protagonists. We begin to think, "If they can make it, so can we." These survivors are our heroes. These survivors are great examples to us. These survivors are leaders. The mortgage banking industry is facing challenges today that pose threats to its very existence. The increasingly strenuous economy is making it difficult for people to afford homes. Increased regulation is adding to the strain by significantly limiting the pool of people available who can buy homes and adding significant costs to the companies who sell them. Sometimes, it can look bleak. But, then again, that's where the really good stories come from. Our industry could use some survivor stories. In the mortgage banking industry, it is the truly great leaders who will break through the obstacles and achieve success. Obstacles only serve to make victory that much more glorious. Leaders thrive on their challenges. Leaders don't back down … leaders are survivors. In this article, I want to give you a few tips on how to turn your tragedy into a survivor story. I want to show you how to turn yourself and your company from becoming a victim of the circumstances into becoming a leader for the industry. No matter what challenges arise, there are three guiding principles that can keep you on the right track and shelter you against the storms. These principles are: l Seize opportunities; l Be adaptable; and l Maintain integrity.

Have you ever seen the movie “Antz?” The 1998 computer-animated film was the first produced by Dreamworks and featured a well-known cast of voices, including Woody Allen, Sharon Stone, Gene Hackman, Sylvester Stallone and Dan Akroyd, just to name a few. In the story, "Z" (voiced by Woody Allen) is one of a countless number of worker ants in a totalitarian ant colony that places very little value on its individuals. Desiring to win the affection of the queen, Z convinces a befriended solider ant to trade places with him. As he joins the military, he uncovers a conspiracy by the colony's general to take over the colony and eliminate the weaker ants. Through a series of events and a cast of characters coming to his aid, Z is able to overpower the malicious general and save his colony. It's the classic underdog story. And it has a powerful lesson to teach us as leaders in the mortgage banking industry. All too often, I hear mortgage professionals tell me that there is not enough opportunity. "We can't change the regulation, Dave," and "I'm just a little guy in Canton, Ohio, Dave … what can I do?" The truth is that, even in the current climate, opportunity abounds. But the opportunity isn't for everyone. The gold isn't just lying around waiting to be taken. There are indeed great opportunities, but they are for a select few true leaders who seek in adversity the opportunities that such adversity represents. Great leaders see the opportunities embedded in challenges. Great leaders thrive on such challenges that will inevitably crush others.

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n National Mortgage Professional Magazine n DECEMBER 2013

Just like the characsaid, "Well done is ter Z" in the movie better than well “Antz,” you might be “Leaders thrive said." This company just a small fish in a big said something well, on their chalpond. You might be a but it didn't do what David in a world of it said. As a result, it Goliaths. But great lenges. Leaders was sued and its repopportunities often utation was severely shine the brightest in the don't back down damaged. eyes of the oppressed If there is one … leaders are and persecuted. Something you don't want times, when you're at the called into question, survivors.” bottom, you have the it's your integrity. An clearest view of the top. organization with Look for the opportunimediocre performties around you to exploit the situa- ance but exceptional integrity will tion and emerge victoriously. Take stand a greater chance of living to advantage of every chance you get. fight another day than an organiBe a survivor. zation with outstanding performThe second key to surviving the ance but questionable integrity. current environment in the mort- You can bounce back from losing gage industry is to be adaptable. your revenue, but cannot quite Often, when faced with adversity, bounce back from losing your soul. our gut reaction is to change every- So, in an age of increasing regulathing and do a complete "180." But tion, how do you survive as a busithat isn't necessarily the best ness and still maintain integrity? option. Sometimes, we don't need Leverage your high integrity as a to completely reengineer our strat- differentiating factor. Position egy. Sometimes, we just need to be yourself against those who neglect a pivot. integrity. You don't necessarily To be adaptable, you don't have have to advertise the poor integrity to change everything. Being adapt- of other companies, but you should able means being responsive. It promote your high integrity. doesn't mean being reactive. If, Collect stories from customers and every time you face a challenge, partners about your honest and you run scared in the other direc- trustworthy business practices. tion, you are letting circumstances Incorporate these stories into the control you. Instead of turning ethos of who you are as a business. around a running, you simply need Look at the regulatory environment to "dodge" the obstacle and push and embrace it. Become known in on. You will never know whether or the industry as a company that not a strategy will work if you don't keeps its promises. Maintain your give it enough time. Perhaps victo- integrity and let everyone know ry is right around the corner but, if you're serious about it. you give up too soon, how will you If your company were to write a know? If you've committed to a memoir, would anyone want to strategy, do all you can to see it read it? Would it be a best-seller? through. Would it be the kind of story that But that doesn't mean your strat- inspires? Would it be a survivor egy can't be flexible. Leave room story? Great leaders are destined for unknowns. Have a responsive survivors. The toughest times are strategy that allows you to pursue when true leaders prove themthe same goals, but with varying selves. When you look at the envitactics. Being adaptable doesn't ronment in the mortgage banking mean changing everything, but it industry, recognize it for what it does mean being willing to change is—an opportunity for you to prove some things. Change only what you yourself. If you can adapt and surmust in order to proceed, but vive, you will have proved to yourchange it quickly and confidently. self and the marketplace that you Being adaptable means being flexi- are a true leader. Now, go forth … ble with your strategy. It means and lead. dodging, not retreating. The final key to surviving chal- David Lykken is president of mortlenges in the mortgage banking gage strategies and managing partner industry is to maintain integrity. In with Mortgage Banking Solutions. He an age of increasing regulation, has more than 35 years of industry this principle can be the most diffi- experience and has garnered a cult to sustain. One well-known national reputation, and has become case of failed integrity involves a a frequent guest on FOX Business recent investigation of a mortgage News with Neil Cavuto, Stuart baking company by the Consumer Varney, Liz Claman and Dave Asman Financial Protection Bureau (CFPB). with additional guest appearances on This company perhaps thought the CBS Evening News, Bloomberg TV itself too small to end up on the and radio. He may be reached by radar of the CFPB. The company, phone at (512) 977-9900, ext. 10, or whether through intentional deceit e-mail dlykken@mortgagebankingsoor simple negligence, wrote a slop- or dlykken@mbspy policy. As Benjamin Franklin has

CFPB Publishes Integrated Disclosures Final Rule By Laurie Spira More than two years in the making, the CFPB’s Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act (Regulation X) and the Truth-in-Lending Act (Regulation Z) were published on Nov. 20, 2013. Effective Aug. 1, 2015, the final rule replaces the familiar Truth-in-Lending Disclosure Statement, Good Faith Estimate (GFE), and HUD-1 Settlement Statement with two new disclosures. The final rule provides detailed rules and guidance regarding the use of the new disclosures: l The Loan Estimate will be provided to consumers within three business days of application. The Loan Estimate, which replaces the initial Truthin-Lending Disclosure Statement and GFE, summarizes the terms of the transaction and provides an estimate of loan and closing costs. l The Closing Disclosure will be provided to consumers three business days before loan closing. It replaces the final Truth-in-Lending Disclosure Statement and the HUD-1 Settlement Statement, and provides a detailed accounting of the transaction.

Laurie Spira is chief compliance officer with Torrance, Calif.-based DocMagic Inc. She may be reached by phone at (800) 649-1362, ext. 6446 or e-mail

DECEMBER 2013 n National Mortgage Professional Magazine n


The final rule also restricts circumstances in which consumers can be required to pay more for settlement services than the amount stated on the Loan Estimate and limits the amount of such increases. Also significant is a provision that isn’t included in the final rule. The proposed rule, published in August of 2012, would have re-defined the way the Annual Percentage Rate (APR) is calculated by including almost all upfront costs of the loan in the definition of finance charge. However, based on public comments it received, the CFPB has determined not to finalize these provisions in this final rule.


heard on the street

continued from page 22

contents tree with links to guidelines, a robust search engine that features a thesaurus with industry jargon and relative matching results. Internal Sun West staff and business partners will be able to access content through the online lending libraries, including: Government Product Guidelines, HECM Product Guidelines, Conventional Product Guidelines and Underwriting Guidelines. In addition, the Sun West Lending Libraries feature a Recent Updates section to identify changes to content, as well as Email Alerts to notify users of changes. “We at AllRegs are proud to provide Sun West Mortgage staff and business partners with an innovative and robust resource to access their product guidelines,” said Dan Thoms, executive vice president of AllRegs. “Delivered through our proprietary technology, the Sun West Mortgage’s lending libraries will help their staff and partners alike to streamline business processes and increase productivity.”

Rushmore Loan Management Approved as a Freddie Mac Seller Rushmore Loan Management Services LLC has announced that it has received approval to act as a Freddie Mac seller/servicer. With this approval, Rushmore is now an approved seller/servicer for both government-sponsored enterprises (GSEs), Freddie Mac and Fannie Mae, as well as an approved issuer of Ginnie Mae mortgage backed securities. “The Freddie Mac approval will significantly expand the company’s business, enabling Rushmore to originate and service loans for a new customer base,” said Terry Smith, CEO of Rushmore. “This is an important designation for both our employees and broker clients, and we are confident that this will be a competitive advantage as we look to grow the business.” Rushmore also announced that it had received a positive rating from Standard & Poor’s Ratings Services, which assigned an average ranking to Rushmore as a residential special servicer and residential primary servicer. Standard & Poor’s specifically identified Rushmore’s strengths as its experienced management and staff, its multiple auditing mechanisms, its proprietary technology along with a vendor system, its competitive servicing metrics, and good oversight and controls throughout the default areas. Standard & Poor’s also ranked Rushmore’s management and operations as above average. “This is a great vote of confidence for Rushmore as a growing organization, and we will continue to make invest-

ments in the company to ensure excellent service and controls that exceed our customers’ expectations,” said Smith.

Quandis Partners With Amazon Web Services Network

Quandis Inc. has announced that it has become a technology partner of Amazon’s Web Services Partner Network (APN). Joining APN underscores the investment and commitment that Quandis has made to utilize Amazon Web Services (AWS) for cloud computing. “We’ve been using AWS cloud-based storage services for quite some time to cost effectively and efficiently support our enterprise-level client base,” said Eric Patrick, CTO of Quandis Inc. “By joining AWS Partner Network we are able to take advantage of a number of different services that benefit us, it allows us to further scale our technology, and it provides us with additional expertise in managing data that resides in the cloud.” Quandis joining AWS Partner Network reinforces the company’s software development and maintenance approach to building, migrating and managing client infrastructures within the cloud. Quandis is known to develop contemporary, flexible and scalable best-of-breed default servicing solutions delivered on a SaaS basis that securely hosts data in the cloud. The company possess years of cloud computing and enterprise application development experience. Strengthening its relationship with AWS better positions Quandis to expand operations and facilitate use of the comprehensive benefits that AWS offers.

Mortgage Master Enters the Lone Star State

Mortgage Master has announced it has opened its first retail branch office in Austin, Texas after receiving its Texas Mortgage Banker License from the Texas Department of Savings and Mortgage Lending. Mortgage Master is now able to originate residential mortgage loans in the State of Texas and provides borrowers looking to refinance or purchase a home with some of the best pricing and best-in-class solutions and service. In conjunction with the opening of the new Austin retail branch, Mortgage Master has hired Larry Weisinger as branch manager. Weisinger, who has more than 15 years of mortgage induscontinued on page 44


n National Mortgage Professional Magazine n DECEMBER 2013

Are Appraisal Desks Compliant?

DECEMBER 2013 n National Mortgage Professional Magazine n


By Greg Reynolds There is a common misperception that, just because there is a mirage of separation between the lender’s loan production personnel and their appraisal management desk, they are compliant with current regulatory requirements. This could not be further from the truth … let me reiterate: This could not be further from the truth. The facts are that, based on the interagency guidelines, which were developed in response to the Dodd-Frank Act, lenders are now required to not only have processes in place to identify potential issues (including valuation issues), but to have processes in place to remediate those issues once identified. Fannie Mae has followed suit with their Selling Guide Announcement SEL-20135, which echoes the interagency requirements of having processes in place to identify potential valuation issues, along with processes to remediate those issues, but as specifically regards their valuation processes, the lender “ … must have a process for an annual review of an appraiser’s state licensing or certification status, a procedure for suspending or terminating busi-

ness with individual appraisers, and a procedure for referrals of appraisers to the applicable state appraiser licensing and regulatory board.” In addition to the requirements at the federal level, states are beginning to weigh in as well. Several states now require mandatory review of appraisal work done in their particular state(s). And in most cases, the quality control (QC) reviews must be performed by appraisers who are credentialed in that state. In other words, there is more and more pressure to have the valuation process managed by folks who are experts at just that–valuation. In most cases, lenders who “self-manage” do so with a bare bones group and sourced software solution. The reason for this is because an appraisal desk is a loss-center to a lender. Because of the new appraisal management company (AMC) requirements, lenders are no longer allowed to collect an “administrative margin” without falling under the auspices of state AMC regulations. The net effect is that the appraisal desk function is a loss center, is generally managed by personnel without particular appraisal/valuation expertise, and is a function that is not the lender’s wheelhouse.

Can a lender be successful by selfmanaging the valuation function? Yes, but not as successful as they would be if they focused on their strengths and sourced the valuation management function to groups who are more efficient, more compliant, and ultimately, more effective. Self-managing the valuation function is the same as self-managing other settlement services. The industry has not seen significant horizontal integration of lender/title functions or lender/flood functions or lender/credit functions. Why? Because, generally speaking, lenders are good at loan origination and have trusted other settlement services groups to manage those ancillary functions. Why in the world would the valuation function be any different? Okay, so there is a compelling argument for sourcing the valuation management function. Why have more lenders not done so yet? Simply put, because they have not yet been audited. Once the Consumer Financial Protection Bureau (CFPB) or the Office of Thrift Supervision (OTS) audits a lender who cannot establish “absolute lines of independence” between production personnel and appraisal management personnel, fines will be levied

and the penalties will be stiff. Lenders who proactively engage third parties to manage their valuation function, however, not only stay ahead of the game with respect to compliance, but also reduce costs and increase loan production. All due to the fact that they are allowing the experts to do what they are good at … for the lender, originating loans, and for the vendor management groups, managing the valuation function. The upside to self-managing is limited to a mirage of control. The upside to sourcing the valuation management function is myriad, including higher levels of compliance, more consistent valuation services, QC functions, expert support from valuation professionals, reduced overhead and greater loan production. Greg Reynolds, chief appraiser with A1 Closing Services, is a published author and nationally-recognized speaker on appraisal topics. He has more than 25 years in residential appraisal and 15 years in appraisal management. He is an AQB-Certified USPAP Instructor, TALCB Peer investigative committee member, and TALCB Appraisal Mentor. Greg has an MS in economics and is a licensed pilot.


At Fifth Third Mortgage, we’ve streamlined our process. Meaning, callbacks are more prompt and the approval process is faster than ever so that closings can happen more quickly. It’s also good to know we offer low rates, have a wide variety of mortgage options, and are among the Top 5 Wholesale Mortgage Lenders in the country.* So whether your customers are looking for a conventional loan, FHA, VA, Jumbo, MyCommunityMortgage®, Home Possible® Mortgage or a HARP Mortgage, we’re the lender you can count on to get through the process quickly.

*According to Inside Mortgage Finance, May 17, 2013. Home Possible is a registered service mark of Freddie Mac. MyCommunityMortgage is a registered service mark of Fannie Mae. The information contained is intended for the sole and exclusive use of the business entities to which it was distributed and is subject to change without notice. Loans are subject to credit review and approval. Fifth Third Mortgage Company, 5001 Kingsley Dr., Cincinnati, OH 45227, an Illinois Residential Mortgage Licensee. Fifth Third Mortgage is the trade name used By Fifth Third Mortgage Company and Fifth Third Mortgage-MI, LLC. Member FDIC. Equal Housing Lender.

n National Mortgage Professional Magazine n DECEMBER 2013

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M A G A Z I N E ’ S

economic commentary


DECEMBER 2013 n National Mortgage Professional Magazine n


ere is an interesting picture. The S&P/CaseShiller House Price Index showed prices in the 20 largest cities increased 13.3 percent annually in September, the highest year-over-year increase since February 2006. Yet, existing home sales have slowed a bit and pending home sales have been lower for several months, according to the National Association of Realtors


(NAR). How can home prices be rising at a time in which home sales are slowing down? The answer is found in two important numbers. For one, the percentage of distressed sales is falling as the foreclosure inventory shrinks. Lender Processing Services (LPS) reports that foreclosure inventory is down 30 percent over the past year. Meanwhile, NAR reported last that distressed homes are making up fewer of the total existing-home sales recorded in the past year. Sales of distressed homes—which include

foreclosures and short sales—made up 14 percent of October sales, down 25 percent year-over-year. Since distressed homes sell at a significant discount over non-distressed sales, it makes sense that the average sale price is rising. During the height of the housing crisis, the flood of foreclosed homes exaggerated the drop in home prices and on the way out of the crisis, the rise in home prices his now exaggerated by the lower numbers of these sales. Secondly, we still have a lack of inventory in many markets, especial-

ly at the lower end of the market. Housing sales are being held back because of this lack of inventory but at the same time we are not seeing slower housing sales cause downward pressure on prices. If there is more demand than supply, prices will be stable or rise regardless of the number of total sales. What does this mean for the future? If demand continues to rise, housing prices will continue rising or at least stabilize. Theoretically, higher prices will also induce more sellers to list their homes. The first factor—distressed sales— will become less of a factor in the future as we approach normalized levels of distressed sales. The key is demand. If the economy continues to produce jobs at a decent rate, then we will have a greater demand for the homebuying market. That is what makes December’s employment report interesting. Heading into December we had a series of numbers which pointed to a stronger jobs market, including the lowest number of first time claims for unemployment benefits since before the recession started and a strong October report. This made the markets optimistic before the numbers were released. More on that factor in a future column. Dave Hershman is a top author in the mortgage industry with seven books published, including The Complete Mortgage Management Kit. Dave is also director of branch support for McLean Mortgage. He may be reached by e-mail at or visit

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n National Mortgage Professional Magazine n DECEMBER 2013

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The Most Expensive/Affordable Housing Markets of 2013

...real estate trends are shifting away from affordability to higher pricing.

By Phil Hall f your borrowers are looking to purchase a four-bedroom, two-bathroom home, there are plenty of choices across a wide spectrum of budgets. How wide? Well, one can snag a property in Cleveland in the five-digit range, or one can seek ownership of a Malibu, Calif.-based residence in the seven-digit range. Admittedly, that is quite a spread, especially since average listing price of a four-bedroom, two-bathroom home is $301,414, as according to the 2013 Home Listing Report issued on Nov. 6 by Coldwell Banker Real Estate. This annual report, which covers more than 1,900 markets and 52,000 listings, has discovered some rather distinctive data regarding the current state of U.S. housing. For starters, California reigned as the go-to state for high-priced residential real estate. The top five most expensive markets are in the Golden State, as the two most expensive markets, Malibu and Newport Beach, are within minutes of Los Angeles. The city of Angels itself was not among the 13 California markets that occupied the top 25 expensive spots. What makes Malibu so pricey? Coldwell Banker put forth one of its agents from that market, Madison Hildebrand, who is also the star of the Bravo reality TV show “Million Dollar Listing,” to explain. “With its laid back, yet star-studded lifestyle, Malibu is undergoing a transformation from a seasonal destination to a year-round locale,” said Hildebrand in a statement released by Coldwell Banker. “Situated on the Southern California coast with beautiful homes and even more stunning views, you’re not only paying for world class properties, you’re paying for a way of life.”


One surprise on the most expensive list was Stone Harbor, N.J., where a four-bedroom/two-bathroom house averages $1.3 million. After all, Stone Harbor was among the shoreline communities that felt the wrath of Superstorm Sandy. Things were so bad in the Stone Harbor community that the local elementary school was shut down for four months after the storm made landfall in October 2012. But, it appears that the tumult created by Sandy failed to dent the upper-level home prices, and Stone Harbor continues to be the Garden State’s prime location for luxury real estate. For those with a somewhat more modest budget, Cleveland offered the most affordable housing, with the average cost of a four-bedroom/two-bathroom going for $63,729. Garfield Heights, also in Ohio, came in second on the most affordable list at $66,075. “Cleveland’s friendly, hometown feel draws people of all ages, and in recent years, the community has been revitalized with more young professionals entering the market,” said Ed Dolinsky, president of Coldwell Banker Hunter Realty, in a press statement issued by the company. “Energized by a growing tech hub that effectively supports nearby renowned hospitals and research institutions, this Midwest city continues to reinvent itself through its diversified business sectors and strong sense of neighborhood communities.” Indeed, it appears the region as a whole provides a broad landscape for affordable housing: Midwestern cities made up 15 of the 25 most affordable markets this year. In comparison, the Minnesota city of Orono was the sole Midwest representative among the top 25 markets on the most expensive list–the rest of that selection consisted of Northeastern and Western markets. But straddling both the most expensive and most affordable lists was New York, and its positions on both lists affirmed the historical economic split between downstate and upstate. The pricey New York City suburbs of Great Neck and Larchmont landed in the top 25 on the most expensive list, while the somewhat scrappy upstate cities of Buffalo, Utica and Niagara Falls were at home in the top 25 on the most affordable list. Ultimately, the 2013 report might suggest that real estate trends are shifting away from affordability to higher pricing. This year’s report found 20 markets where the hypothetical four-bedroom, two-bathroom home cost more than $1 million, but only eight markets where a similar residence was listed for less than $100,000. Phil Hall is senior editor of National Mortgage Professional Magazine. He may be reached by e-mail at

Top 25 List of America’s Most Expensive/Most Affordable Real Estate Markets The top 25 most expensive and most affordable real estate housing markets in the 2013 Coldwell Banker U.S. Home Listing Report includes: Rank

2013 Most Expensive Markets

Avg. Listing Price

2013 Most Affordable Markets

Avg. Listing Price


Malibu, Calif.


Cleveland, Ohio



Newport Beach, Calif.


Garfield Heights, Ohio



Saratoga, Calif.


Flint, Mich.



Los Gatos, Calif.


Saginaw, Mich.



San Francisco, Calif.


Jackson, Miss.



Stone Harbor, NJ


Sioux City, Iowa



Cupertino, Calif.


Jonesboro, Ga.



Orono, Minn.


Moberly, Mo.



Weston, Mass.


Buffalo, NY



Redwood City, Calif.


Kankakee, Ill.



Breckenridge, Colo.


Utica, NY



San Mateo, Calif.


Ashland, Wis.



Great Neck, NY


Hillsdale, Mich.



Pasadena, Calif.


Johnstown, Penn.



Greenwich, Conn.


Arcadia, Fla.



Wellesley, Mass.


McCook, Neb.



Sunnyvale, Calif.


Park Forest, Ill.



Santa Barbara, Calif.


Niagara Falls, NY



Danville, Calif.


Eatonton, Ga.



Kailua, Hawaii


Lehigh Acres, Fla.



Mercer Island, Wash.


Kansas City, Mo.



Campbell, Calif.


Dayton, Ohio



Larchmont, NY


Camden, Ark.



Westport, Conn.


Akron, Ohio



Newton, Mass.


Aurora, Mo.


DECEMBER 2013 n National Mortgage Professional Magazine n


The Hedgehog and the Fox: A Regulatory Parable By Jonathan Foxx


he 7th Century BCE Greek lyric poet, Archilochus, observed: “The fox knows many things, but the hedgehog knows one big thing.”1 Twentytwo centuries later, Erasmus transliterated Archilochus’s dictum by precisely rendering it into the Latin aphorism: “Multa novit vulpes, verum echinus unum magnum.”2 When it comes to these two ways of thinking and acting, things didn’t change much between the 7th Century BCE and the 16th century CE, when Erasmus penned his elucidation. Isaiah Berlin, the British political philosopher, whose life span stretched nearly the whole 20th Century,3 wrote a well-known essay in 1953, inspired by Archilochus’s apothegm. It was entitled, “The Hedgehog and the Fox: An Essay on Tolstoy’s View of History.”4

Of Berlin’s essay, Arnold Toynbee, one of the great historians of our time, wrote: “This fragment of verse by the Greek poet Archilochus describes the central thesis of Isaiah Berlin’s masterly essay on Tolstoy, in which he underlines a fundamental distinction between those people (foxes) who are fascinated by the infinite variety of things and those (hedgehogs) who relate everything to a central, all embracing system.”5

ing to it, and thus quickly find opportunities. Because the fox is acutely aware of each part of the whole, it devises complex strategies to gain an advantage on the hedgehog. Often, it succeeds in its plans due to this advantage. The kinds of idiomatic expressions that foxes use are “zero in on something,” “devil’s in the details,” “under construction,” “mixed feelings,” “barking up the wrong tree,” “at this stage,” “first in class,” “trying something new,” and “let’s get another pair of eyes on this matter.” Foxes are centrifugal: They pursue divergent ends and usually possess a sense of reality, which keeps them from designing a logistical framework that purports to contain all possibilities. They instinctively know that complexity does not conduce to a unitary structure. Although foxes may have a broad vision and much agility in complex interactions, often their grasp exceeds their reach. Examples of foxes are Montaigne, Balzac, Goethe and Shakespeare. Foxes pursue many ends at the same time, with much energy and cunning ways. They see the world in all its complexity. Hedgehogs simplify a complex world into a basic principle or concept that unifies and guides everything. Foxes tend to be scattered, diffused and inconsistent. For hedgehogs, the world is reductive; that is, all challenges and dilemmas are reduced to simple hedgehog ideas, and anything that does not correlate to the hedgehog idea is without relevance. Hedgehogs see what is essential and ignore the rest. Generally, the fox’s style is often

deprived of rigorous models, specific goals, and global metrics. Foxes learn incrementally, over many iterations of experience. The foxy RMLO has a succinct advantage in swaying the hedgehog Bureau, because it nimbly responds to new information, constantly reconfiguring its market knowledge in reaction to changing circumstances. Such vital information leads to greater performance and the ability to provide solutions that open up new ways for the Bureau to fine tune its single overarching vision. The CFPB has set compliance effective dates in January 2014 for many new rules that will affect RMLOs. As these rules go into effect, we enter the New Year noting a rather obvious example of the hedgehog’s vision and the fox’s hastening to fulfill it. Their relationship is bound by the unwavering path of the Bureau and the serpentine path of the RMLO. The Bureau’s grand vision presents a broad plan of action that must be implemented. In complying with the Bureau’s rules, the RMLO must bestir itself to be particularly attuned to working with the minutiae of details that are a part of the practical experience of actually originating and servicing residential mortgage loans. In 2014, here are three questions to keep in mind about the relationship between the Bureau and the RMLO: 1) How prepared is your financial institution to comply with the Bureau’s expectations? 2) Are you ready to implement the

Bureau’s complex requirements? 3) Does your company act like the visionary hedgehog or the nimble fox? Foxes are cunning and have the advantage of knowing how reality works, poking holes in the hedgehog’s grand scheme of things, even as the many spindled hedgehog rolls into a big bulky ball. But beware of that ball! The hedgehog and the fox have learned never to underestimate each other. Although the fox is clever, swift, skilled in action, and knows many tricks, the hedgehog knows one big, decisive trick: it can roll itself into a ball of sharp and painful spikes! Jonathan Foxx is president and managing director of Lenders Compliance Group and Brokers Compliance Group, mortgage risk management firms devoted to providing regulatory compliance advice and counsel to the mortgage industry. He may be contacted at (516) 442-3456, by e-mail at, or visit or

Footnotes 1—Archilochos (c. 680–c. 645 BC) was a Greek lyric poet from the island of Paros in the Archaic period. 2—Adagia, (“Erasmus”) Desiderius Erasmus Roterodamus (Oct. 27, 1466-July 12, 1536), Paris, 1500, from Robert Bland, Proverbs, Chiefly Taken from the Adagia of Erasmus, with Explanations; and Further Illustrated by Corresponding Examples from the Spanish, Italian, French & English Languages, Volumes 1-2, London, 1814. 3—Sir Isaiah Berlin, (June 6, 1909-Nov. 5, 1997), British social and political theorist, philosopher and historian of ideas. 4—Berlin, Isaiah, The Hedgehog and the Fox: An Essay on Tolstoy’s View of History, Weidenfeld & Nicolson, London, 1953. 5—Idem.

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n National Mortgage Professional Magazine n DECEMBER 2013

We have them! Do you?


Since its inception, it seemed clear to me that the Consumer Financial Protection Bureau (CFPB) is a hedgehog. It tends to view the world through the lens of a single defining idea: Consumer financial protection. In accordance with this idea, the Bureau exercises this vision through a single, predominant, and coherent framework of regulations. As a hedgehog, the CFPB stays focused on this one foundational principle and repeatedly, unvaryingly, and rigidly seeks to implement that overriding proposition by applying the same methods and solutions, usually to the exclusion of other possible remedies. This predilection is not simply a matter of judgment or style. Hedgehogs actually have one grand theory which they seek to extend into many domains, furthering their rule through a fervent belief in the guiding principle. They express their views with confidence; assurance; coolness; obstinacy; unrelenting drive; generally rigid adherence to an impliable mission; unwavering obedience and devotion to a regnant objective; a proclivity to roll results up into an aggregate value; and, a tendency to express themselves with such idiomatic phrases as “mission critical,” “the ends justify the means,” “by and large,” “ballpark figure,” “jack-of-alltrades,” “grand strategy,” “seeing the larger picture,” and “the system is the solution.” Usually, hedgehogs have a unique vision that gives rise to the ability to notice complex circumstances and discern the underlying patterns. In effect, their reach exceeds their grasp. Examples of hedgehogs are Plato, Dante, Proust and Nietzsche. Residential lenders and originators (RMLOs) are, as a group, foxes—they draw on a wide variety of experiences and do not believe for a second that the world can be boiled down to a single idea, evinced through an allembracing framework, howsoever cogent it appears to be. Foxes are skeptical about grand theories. They are constrained in their forecasts, and adaptive to actual events. They tend to be more accurate in their predictions than hedgehogs, since they are more agile in assigning probabilities to their expectations. While hedgehogs see the larger picture, thereby missing opportunities, foxes notice each and every pixel contribut-

“In complying with the Bureau’s rules, the RMLO must bestir itself to be particularly attuned to working with the minutiae of details that are a part of the practical experience of actually originating and servicing residential mortgage loans.”

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ISGN Launches New Risk Evaluation Software

DECEMBER 2013 n National Mortgage Professional Magazine n



continued from page 15

ISGN Corporation has announced during the availability of Home Equity Advantage, a suite of products and services designed to help home equity lenders transform and scale their operations. Home Equity Advantage combines technology, title/settlement, valuation and outsourced fulfillment in a cost-effective solution set targeted at the unique dynamics of the Home Equity process. Home Equity lenders who are just starting out or looking to build their existing business can choose one or all of the solutions in this set to enhance the borrower experience and mitigate risk. The product set includes LienSure, designed to provide a framework for lenders to evaluate and mitigate specific risk factors when underwriting home equity lines of credit and close-end home equity loans. Home equity lenders can leverage LienSure as an alternative to uninsured products such as a deed report or property report without an insurance wrapper, thereby mitigating the risks covered by the policy. This product provides additional risk coverage at a cost-effective price points. “Home equity lending has historically been a viable product on a standalone basis and a counter-cyclical product to the first mortgage refinance market,” said Paul Imura, CMO of ISGN. “During the mortgage crisis, home equity lending retreated as home values declined and equity evaporated, leaving many in a negative equity position.” In addition to traditional appraisal products, ISGN offers a proprietary Desktop Evaluation, a reliable and accurate valuation solution completed by licensed, local appraisers. Leveraging the strength of industryleading analytics combined with the local experience and expertise of a licensed appraiser, ISGN’s product meets state and federal regulations and is both USPA and IAG compliant. It can also be combined with a Property Condition Report to assess the subject’s current condition and the surrounding market.

“Over the last five quarters, however, more than 3.2 million borrowers have reached positive equity,” Imura said. “Because of this, coupled with a declining refinance market, ISGN predicts that the market will see an increase in home equity lending in 2014. With $5 trillion in untapped home equity as of the second quarter, lenders must prepare to meet this increased demand.”


2 0 1 3

LPS Unveils Home Equity Valuation Solution and CFPB Compliance Tool Lender Processing Services Inc. (LPS) has announced the release of its Home Equity Valuation solution that meets the interagency guideline requirements for both appraisals and evaluations for home equity loans. In support of recent advisories from the Office of the Comptroller of the Currency (OCC) urging banks to strengthen their oversight of the home valuation process related to home equity loans, LPS’ Home Equity Valuation solution provides a USPAPcompliant appraisal report format that meets these higher standards. It incorporates an automated valuation model (AVM), a subject property inspection by a local, licensed real estate professional, and a state-licensed or certified appraiser’s independent desktop appraisal for a credible, cost-effective valuation. Additionally, the Home Equity Valuation workflow can be customized to meet client-specific risk management policies. For example, more complex properties, such as those that are highend, rural, or have a unique design or location, can be seamlessly upgraded to more traditional drive-by or interior appraisals, to offer clients a solution that addresses all of their home equity valuation needs. LPS has also announced the launch of its Error Resolution Tracking solution, a tool designed to assist mortgage servicers in meeting new Consumer Financial Protection Bureau (CFPB) requirements for recording, tracking and responding to consumer complaints regarding possible errors with their loans. LPS can quickly implement Error Resolution Tracking to help servicers meet the CFPB’s compliance deadline of Jan. 10, 2014. “With the CFPB’s deadline fast approaching, servicers are looking for solutions that can be implemented quickly to help them enhance compliance and control,” said Joe Nackashi, CIO and executive vice president of the LPS Servicing Solutions and Technology division. “Error Resolution Tracking delivers highly efficient capabilities for continued on page 38

Ho Ho Ho!!!

The Mortgage Industry Working Hard to Stay Current BY LYMAN KING As the mortgage industry steams into 2014 and all the mysteries that the latest Consumer Financial Protection Bureau (CFPB) changes bring, it sure makes me thankful for all of the education going on around the country! I have seldom seen, in all my years in the industry, the emphasis on education and training that we are seeing today. Sales staff and operational staff alike are seeing so many changes that it is difficult to keep up … and they are being offered more classes than ever before. It is especially nice to see the industry working hard to educate their own. One trade association in particular, the National Association of Professional Mortgage Women (NAPMW), is working hard to keep their members updated. In November, the NAPMW put on national Webinars concerning the CFPB, appraisal underwriting, sales marketing for LOs and multiple leadership classes. In December alone, NAPMW is offering an updated DU Webinar to assist production staff, in addition to a class titled “HARP: The Continuing Story” that sounds like a can’t miss session as well. In talking to NAPMW National President Jill Kinsman of U.S. Bank, December will also bring an FHA underwriting class, as well as an FHA “Back to Work” program. It sounds to me like NAPMW’s commitment to education is a vital part of what the association is all about. Many small- to mid-sized mortgage banks have added entire training departments where none existed just 12 months ago. Webinar software providers like Web-X and have announced record sales the last couple of years … a clear testament to companies trying to reach out and teach their staffs. From this writer’s opinion, keep up the good work everyone. To find out more about the NAPMW’s classes and Webinars, visit the association’s Web site at Lyman King is a 27-year mortgage industry veteran, and works as a corporate operations trainer at DHI Mortgage in Austin, Texas.


n National Mortgage Professional Magazine n DECEMBER 2013

AllRegs State and Federal Compliance Product Enhancements By Melissa Hruza At AllRegs, we are always seeking to improve upon our product offerings to better provide our customers with the fast, reliable answers they need to conduct their daily business. To that end, we have made product enhancements to our State Compliance content, specifically to State Mortgage Compliance Checklists, State Required Disclosure Matrices and Permissible Fee Matrices, available for every state a customer subscribes to within the product. In addition, AllRegs Single-Family Lending subscribers now have access to Federal Compliance disclosures, such as the Good Faith Estimate, the CHARM booklet, and Truth-in-Lending statement. These enhancements are now available and accessible with AllRegs State Compliance and Single-Family Lending subscriptions. Subscribers can directly print these documents, or export them to MS Excel, print and insert them in front of every loan file and use them to be sure your file is compliant! These loan guidance checklists and matrices will be indispensable to your business. Additions and enhancements include: Compliance Checklists l Expanded content and categories (transaction-specific) l Expanded categories to include advertising, balloon loans, fees, foreclosure, rate locking, modifications, servicing, loss mitigation, prohibited acts, refinancing restrictions, usury l Expanded to include citation and relevant Act or Regulation l Features identification of the function typically responsible (broker, lender, servicer, etc.)

DECEMBER 2013 n National Mortgage Professional Magazine n


State Required Disclosure Matrices l Expanded issuance timing, with descriptions l Added disclosure attributes include: l Entity breakdown (retail, wholesale, table-funded) l Expanded Purpose (purchase, refi, new lien, construction, construction/permanent, etc.) l In addition to citation, the Act or Regulation that governs as well l Special Attributes (high-cost, PMI, escrows, prepayment, etc.) l Expanded Lien Type (first, second, HELOC, reverse) l Loan Type (conventional, FHA, VA) l Property Types (single-family residential), condo, PUD, two- to fourfamily, manufactured, etc.) l Conforming or Jumbo l Amortization Type (fixed, ARM, balloon, interest only, buydowns, etc.) l Whether or not the form is optional (i.e., if commitment fee is charged, etc.) l Expanded notes regarding that specific form Permissible Fee Matrices l Expanded listing of fees l Addition of the following: l Third-party allowable l Governing act or regulation (in addition to the citation) l Expanded notes for the customer l Expanded information regarding Governing Act reflected in footnotes l Example: This content reflects loans originated under the Licensed Lenders Act, etc. If you have any questions or are interested in adding State Compliance or the Single-Family Lending Package to your subscription or beginning a new subscription, contact AllRegs at (800) 848-4904 or visit Melissa Hruza is marketing and communications specialist for AllRegs. AllRegs has a variety of resources to help meet your company’s anti-money laundering needs, including turnkey policy manuals, training, tracking and implementation resources, and even a free online course to get you started. Visit to register for the free course. Or, learn more about AllRegs and the full suite of products and services at today or call (800) 848-4904.


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servicers to gain more control over processes, provide a timely response to their borrowers and be better prepared to respond to new CFPB regulatory requirements.” Using servicer-defined parameters within the configurable settings in its logic and workflow, Error Resolution Tracking links incoming borrower correspondence with the loan number in LPS’ MSP servicing platform and assigns the borrower inquiry to the appropriate work queue for immediate action. To help streamline servicer response time, the solution auto-generates an initial response to the borrower acknowledging receipt of their complaint, and also preserves an audit trail of all borrower correspondence received and sent. If the servicer determines more time is needed to respond to a borrower’s inquiry, the Error Resolution Tracking solution auto-generates an extension notification to the borrower.

Pro Teck Unveils Hybrid Appraisal Product Pro Teck Valuation Services announced a new hybrid appraisal product for home equity and second mortgage lending. The Appraisal Desktop with Inspection (ADI) is completed by an in-state licensed staff appraiser in compliance with USPAP standards. ADI fills the gap between an Automated Valuation Model (AVM) with Property Condition Report (PCR) and a field appraisal. The ADI is a desktop appraisal that appraisers can complete and be USPAP compliant, and is more economical than field appraisal alternatives, such as a Form 2055. The process begins with a local real estate broker/agent from Pro Teck’s national panel who takes photos and completes a full inspection of the subject property and neighborhood influences. The inspection is then routed to an appraiser who uses MLS and other market data along with access to Pro Teck’s local market condition analytics to determine the most accurate valuation. “For those searching for a valuation product that meets stringent risk and regulatory demands, Pro Teck’s ADI is a safe, accurate, timely and affordable field appraisal alternative,” said Tom O’Grady, CEO of Pro Teck Valuation Services. “The ADI provides a quality valuation in an easy-to-read format with a turn-time of less than five business days.”

CoreLogic Enhances Its Lead Management Capabilities CoreLogic has announced the availability of new lead management enhancements to its AgentAchieve suite for real estate bro-

kerages. These new capabilities allow brokers to generate and convert more leads, and provide more control over listing syndication activities. Agents within the brokerage can now better capture and convert leads into new business, while brokers can more efficiently recruit and effectively retain the best sales agents. The new lead management enhancements are seamlessly integrated within the AgentAchieve suite including the customer relationship management (CRM), broker and agent Web sites, eMarketing and broker listing management modules. New and upgraded capabilities include: Data feeds dashboard; automated lead capture from marketing portals; lead distribution policies; mobile lead management; and enterprise lead management dashboard. “The difference between AgentAchieve and other solutions in the market is the seamless integration of enterprise-class lead management with our real estate customer relationship management system. Now that AgentAchieve provides automated lead capture from real estate portals like Zillow, Trulia, and, agents can manage all clients on a single platform,” said Chris Bennett, general manager of the Real Estate Services group for CoreLogic.

Compliance VERIFY and MSA Products Upgraded by QuestSoft QuestSoft Corporation released major enhancements to its Compliance VERIFY software to help lenders satisfy the Consumer Financial Protection Bureau’s (CFPB) Ability-to-Repay (ATR) rule by providing users with full Internal Revenue Service (IRS) 4506-T and Social Security Administration (SSA-89) verification services, as well as electronic transcripts integrated into its Compliance EAGLE QM/ATR pre-funding solution. Compliance VERIFY provides a simple interface for ordering, collecting and organizing income and Social Security Number (SSN) verifications. QuestSoft can also accept e-signed 4506-T submissions with seven e-sign companies including: Communication Intelligence Corp. (CIC), DocMagic, DocuPrep, DocuSign, eSignSystems, IDS and Silanis. Additionally, a free software development kit is available for any loan origination software (LOS), document or pricing vendor to quickly integrate the services and automate ATR compliance directly into the processing workflow. “The ATR rule has placed unprececontinued on page 42


n National Mortgage Professional Magazine n DECEMBER 2013

Why a Better Short Sale Process Instead of Foreclosure Can Help Good Credit Flourish By Pam Marron

DECEMBER 2013 n National Mortgage Professional Magazine n


In the article, "Popularity of Short Sales Waning?"1 by Daren Blomquist, vice president of RealtyTrac, the author, stated: “After a surge in short sales in late 2011 and early 2012, the favored disposition method for distressed properties is shifting back toward the more traditional foreclosure auction sales and bank-owned sales. The combination of rapidly rising home prices—along with strong demand from institutional investors and other cash buyers able to buy at the public foreclosure auction or an as-is REO home—means short sales are becoming less favorable for lenders.” So, what is the factor that shifted a change to the more costly foreclosure route as the better end result than a short sale (where the negative equity homeowner works with the bank to get the undervalued property sold)? One answer may be due to the number of parties required on a short sale and a perceived quicker process for a foreclosure.2 Another answer appears to be quicker turnaround in non-judicial states, where foreclosures can proceed without the intervention of the courts. But, is the increasing number of foreclosures due to real foreclosures, or the continued lender practice of “dualtracking” where lenders require underwater homeowners to be delinquent in order to get short sale approval, causing an escalation to loss mitigation departments at the same time a short sale is being processed? So what’s the big deal? Whether a foreclosure or short sale, these homeowners are leaving a partially paid debt behind them and should have credit negatively affected. Here’s why the difference matters to credit: l There are variations of credit code borrowed from foreclosure codes in the Metro 2 system. However, there is no specific short sale code, and most often, short sale credit is coded as a foreclosure. l A foreclosure code on credit does far more damage than a short sale, resulting in longer wait periods to get a new mortgage and results in higher interest rates on consumer credit.3

l When mortgage payments are late over 120 days, the mortgage goes into loss mitigation, or becomes coded as a foreclosure. Because lenders continue to require a mortgage delinquency in order to proceed with a short sale (even after the Nov. 1, 2012 Federal Housing Finance Agency New Short Sale Guidelines4 allowed for current mortgage payments with one of eight eligible hardships), the majority of short sellers are unaware that their short sale is credit coded as a foreclosure. l On Sept. 24, 2013, the Office of Inspector General along with the Federal Housing Finance Agency published two reports, one for Fannie Mae5 and one for Freddie Mac6 on how both of the government-sponsored enterprises (GSEs) can improve their oversight of recovery of deficiencies. Both reports cited that pursuing deficiencies may serve as a deterrent to borrowers who may consider strategically defaulting, despite having the ability to pay their contractual obligations on foreclosure losses for both GSEs. Guess how many Fannie Mae and Freddie Mac short sale loans are coded as foreclosures? l Many short sellers have been labeled as “strategic defaulters” or a homeowner capable of making the mortgage payment but choosing not to do so. In the August 2013 Atlanta Federal Reserve Working Paper,7 the following was cited: “… we find that individual unemployment is the strongest predictor of default. We find that individual unemployment increases the probability of default by five to 13 percentage points, ceteris paribus, compared with the sample average default rate of 3.9 percent. We also find that only 13.9 percent of defaulters have both negative equity and enough liquid or illiquid assets to make one month’s mortgage payment. This finding suggests that ‘ruthless’ or ‘strategic’ default during the 2007-09 recession was relatively rare and that policies designed to promote employment, such as payroll tax cuts, are most likely to stem defaults in the long run rather than policies that temporarily modify mortgages.”

l In an article in the Tampa Tribune8 on Dec. 1, 2013, it is stated that landlords are requiring greater deposits for tenants with past short sales and foreclosures. There have been attempts to show lenders how bottom line net proceeds can be greater if they allow underwater homeowners who most often have to move because of their hardship, to stay current while going through the short sale process. Many of these folks have had to move for a change of employment, divorce, death of a spouse and other hardship reasons. Many of them opted to rent their underwater home, only to find they could not ride out costs associated with multiple residences, wiping themselves out financially whereupon a short sale became the only option. Why can’t current homeowners who need or want to stay current with a proven hardship, be “fast-tracked,” a procedure done only for delinquent homeowners? And, per the U.S. Treasury,9 servicing fees are available to lenders whether the homeowner is current or delinquent. The Nov. 1, 2012 Federal Housing Finance Agency (FHFA) New Short Sale Guidelines offered a solution to underwater homeowners to keep credit intact by allowing a short sale to proceed when a Fannie Mae or Freddie Mac homeowner was current on their mortgage and had an acceptable hardship. For many, such as small business owners concerned about good credit for business growth and government employees who cannot go delinquent, this was a way to keep credit built over a lifetime intact. But after Nov. 1, 2012, banks ignored FHFA rules, continuing to require underwater homeowners to go delinquent before approving a short sale. There are still an estimated 7.5 million underwater homeowners (June 30, 2013/RealtyTrac) across the U.S. who may face a short sale or now more likely, a foreclosure. There are 2.2 million past short sellers who were locked out of the mortgage market until Nov. 16, 2013, when, thanks to the efforts of Senator Bill Nelson and the CFPB, Fannie Mae agreed to make a change in their automated system that allowed short sales coded as foreclosures to be changed to a short sale, allowing previ-

ously denied mortgages to become approved. And, there is interest from the FHFA to “get data right” so that accurate tracking of credit trends can be done. When lenders start making decisions that account for preservation of high quality credit that they expect for their own loan products, realize that the vast majority of underwater homeowners do not want to and would not go delinquent on their mortgage except that this is the only option given by their lender to proceed with a short sale, and realize the long term benefit of forming policy that can help build towards a substantial number of U.S. consumers to go forward, then the housing market can rebound. Pam Marron of Hudson, Fla.-based Bankers Mortgage of Pasco County Inc. She may be reached by phone at (727) 375-8986 or e-mail

Footnotes 1—“Popularity of Short Sales Waning?” ( 2—“Housing Markets Rebound Faster When Foreclosures Proceed Quickly,” Los Angeles Times ( 3—A foreclosure results in a seven-year wait rather than a two-year wait on a short sale, to get a conventional mortgage. 4—“FHFA Announces New Standard Short Sale Guidelines for Fannie Mae and Freddie Mac; Programs Aligned to Expedite Assistance to Borrowers,” FHFA Web site ( 5—“FHFA Can Improve Its Oversight of Fannie Mae’s Recoveries from Borrowers Who Possess the Ability to Repay Deficiencies,” FHFA Web site ( 6—“FHFA Can Improve Its Oversight of Freddie Mac’s Recoveries from Borrowers Who Possess the Ability to Repay Deficiencies,” FHFA-OIG Web site ( 7—“Unemployment, Negative Equity and Strategic Default,” Federal Reserve Bank of Atlanta ( 8—“Foreclosure Boom Benefits Landlord Investors,” The Tampa Tribune ( 9—Servicing fees are established fees paid to lenders by the U.S. Treasury to perform a specific job. Servicing fees have been widely used during the housing crisis to offset additional costs of lenders to process short sales and foreclosures.


n National Mortgage Professional Magazine n DECEMBER 2013

New Year Marketing Tips: Direct Mail Response Rates Keep Climbing! Ring in the New Year with a bang! We all have New Year’s resolutions to be more profitable than we were in 2013. Here are some good suggestions we’ve gathered from mortgage professionals all over the nation: 1. Get started early A lot of people wait until after the holidays are over to start planning their marketing. Tip … begin to strategize in December and let your phones ring in the New Year. b. You can affectively plan your entire first quarter before the end of December. Get a few last minute tax deductions that pay you in 2014. 2. Start strong Plan 2014 as if it’s going to be the best year ever. Getting the year off to a strong start really sets the tone for the year and you apart from the competition. And having some extra funds allows for better maneuverability with the market throughout the year. 3. Track-Measure-Adjust Just because you spent all that time planning your marketing does not mean it will always work. Markets change and you need to be prepared if they do. Nobody knows what rates will do in 2014 so having a Plan B, C and even D in place will eliminate any roadblocks and lock in your success.

DECEMBER 2013 n National Mortgage Professional Magazine n


Hot tip: What marketing program is working best this holiday season? Direct mail! Yes we said it again! Direct mail response rates have been on the rise since late summer and are now continuing at historically high response rates and close ratios! We’ve been tracking responses over two percent in some heavily marketed states like California, Maryland and it’s working even better in others. If you haven’t tried direct mail marketing in a while, it’s time you gave it another look. You can pick your own criteria and get the phone ringing with qualified & interested prospects that want to talk with you. Customer spotlight Each month, we like to talk with our clients and find out how their campaigns are going. Here’s what we heard from one of our mortgage professionals in Texas on the results of their direct mail marketing: • 15,000 mail pieces sent bi-weekly in November over 36 states • 30,000 total mail pieces sent out • A response rate of 1.02% • 306 totals calls (and still coming in) • 29 closings already • 12 closings still in the pipeline Highlights of campaign that work well for you: “We like direct mail because it allows us to target our own prospects. Highlights of growth that could appeal to other loan officers or offices: “You don’t have to compete with others for these leads and we like that.” —John S., Broker, Dallas, Texas Medford, Ore.-based TagQuest is a full-service marketing firm created specifically for the ever-changing business world. TagQuest assists companies with their direct marketing, advertising and branding needs, and knows what it takes to generate quality customers and, most importantly, how to retain those customers for years to come. TagQuest brings forth a unique opportunity to utilize our experience and expertise in varying consumer sales and marketing environments. For more information, call (866) 376-5540 or visit

VIEW OUR MOST RECENT WEBINAR ON YOUTUBE Online readers please click on the link below, readers of the print edition, please copy the link and paste it into your browser.


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dented pressure on lenders to achieve compliance, quickly and efficiently,” said Leonard Ryan, president of QuestSoft. “Compliance VERIFY automates the ATR process, organizes and tracks IRS requests, and includes e-signatures; simplifying the process for users and offering the option of a paperless workflow.” QuestSoft has also updated all of its software to reflect new Metropolitan Statistical Area (MSA) realignment changes that impact compliance in 2014. In an analysis of the new regions, QuestSoft and its consulting partner, Connecticut-based GeoDataVision, mapped and studied changes regarding MSA’s. The analysis details eliminated and expanded MSA’s, which become effective Jan. 1, 2014 and will impact demographics affecting Community Reinvestment Act (CRA) and Fair Lending programs. “Every CRA officer should be aware of impending MSA changes and the potential implications for their bank,” said Ryan. “Not only will many census tract income classifications be affected, but many banks that are not Home Mortgage Disclosure Act (HMDA) reporters may find themselves in a MSA that did not exist before or was expanded to include counties that now fall under HMDA coverage. QuestSoft’s software adheres to the realigned MSA’s, ensuring compliance and smoothing an unforeseen transition.” Forty states will be affected by new MSA changes; however, Maine, New Hampshire, Vermont, Rhode Island, California, Nevada, New Mexico, Wyoming, Colorado and Alaska will remain unaffected for the time being.

RightStart Launches Offering to Help Borrowers Lower Monthly Payments

RightStart Mortgage has launched a new lender paid mortgage insurance (LPMI) product that enables borrowers to lower monthly payments while avoiding the expense of paying mortgage insurance. Lender paid mortgage insurance is now available through the company’s RightStart Wholesale division, a fast-growing Fannie Mae seller/servicer and a direct Ginnie Mae issuer with a strong focus on fast turn times and short closings. With LPMI products, the lender pays for the mortgage insurance in exchange for a slightly higher interest rate. RightStart Wholesale’s LPMI product is available on conforming loans only and is limited to borrowers who plan to live in the home. The maximum purchase price is $300,000 and a five percent down payment and minimum FICO

score of 750 are also required. “Many borrowers are still having trouble getting a loan that works for them because of tightened credit requirements,” said Buster Williams, president of RightStart Mortgage. “Since our new lender placed mortgage insurance lowers monthly payments, it lowers the borrower’s debt-to-income ratio, which helps the borrower qualify. In addition to helping borrowers save money, this new option also gives our broker partners a competitive advantage in the marketplace at a time when interest rates are still near historical lows.” Compared to an FHA loan, a $285,000 RightStart Wholesale LPMI loan can lower a borrower’s monthly payments by as much as $200, for a savings of more than $28,000 over 10 years.

Ernst Announces New Client Portal to Track Fee Changes Ernst Publishing Company has announced the release of a new client portal that will allow Ernst clients to track fee changes, then apply them to every mortgage transaction in their pipeline so they will know immediately if any cost or fee changes will impact those deals. Federal law requires lenders to disclose changes whenever anticipated closing costs exceed those disclosed on the GFE, beyond a certain tolerance. “This represents a huge efficiency boost for our clients,” said Gregory E. Teal, president and chief executive officer of Ernst Publishing. “Critical information that our lender clients had to track for each individual loan is now provided to them all in one place. Our monitoring service makes the data available and our new client portal makes it easy for the lender to receive that information and take action.” The portal is fully customizable. Ernst clients can move data blocks around on the screen and use filters to determine exactly what information is made available to staff members. It also provides an easy way for lenders and title companies to communicate with their teams and partners. Screens can be branded for the client and the look and feel can be made to match other company tools. Ernst technologists are on hand to aid in the customization. GFE searches and new transactions can also be easily handled through the portal.

Zillow Launches New Marketing Offering Zillow Inc. has announced the launch of Zillow Tech Connect, where leading technology companies can directly integrate and

DocuSign Launches Bundled Transaction Management Solution

Mortgage Builder Software Upgrades LoanXEngine Product Mortgage B u i l d e r Software has announced upgrades to its LoanXEngine product eligibility and pricing technology that will help lenders become more efficient in the hedging and secondary marketing aspects of their business. The enhancements come at a time when lenders are dealing with reduced profits and higher origination costs due to increased regulatory requirements and declining loan volume. LoanXEngine was launched in 2007 by Alan Johnson, who sold the company to Mortgage Builder in late 2012 and serves as executive vice president and head of the LoanXEngine division of Mortgage Builder Software, Inc. The standalone LoanXEngine technology was also integrated into the Mortgage Builder Suite of products in 2013, joining the Architect LOS, the Colonnade LSS and their complementary modules to create the industry’s first true “front end-to end-to-end” mortgage technology platform. LoanXEngine’s enhancements include upgrades to pricing reports that enable secondary marketers to obtain optimal financial execution in loan sales, whether on a per-loan or multiple loan basis. The latest release also includes a new report created to boost hedging efficiency and results, markedly improving profitability for its users through better secondary marketing outcomes. LoanXEngine’s new Hedge/Pricing Management Report displays current best execution on a loan or searches for pricing on a specific target rate, presenting investors by name, product and all loan level pricing adjustments for transactional precision and speed.

PCV Launches New Online Appraisal Ordering Platform

PCV Murcor has launched ValuationsDirect, an online appraisal ordering platform designed specifically for mortgage brokers and correspondents. The platform was built to deliver continued on page 52


n National Mortgage Professional Magazine n DECEMBER 2013

DocuSign has announced a new solution bundle combining DocuSign for REALTORS eSignature service with Cartavi Transaction Rooms to more effectively collaborate and manage all aspects of real estate deals. This bundled solution provides the leading online collaboration and eSignature services by leveraging technology developed through DocuSign’s acquisition of Cartavi earlier this year. “As more and more people come to rely on the convenience of e-signatures, the importance of having a secure, enforceable and easy to use solution is undeniable worldwide,” said Pam O’Connor, president/CEO of Leading Real Estate Companies of the World. “DocuSign’s emphasis on security, paired with the collaborative tools it offers, make it an invaluable tool for our 120,000 member associates.” “DocuSign and Cartavi help real estate professionals deliver exceptional experiences for their clients,” said Glenn Shimkus, DocuSign’s head of transaction management technology and former Cartavi CEO and co-founder.

“Our bundled transaction room and eSignature solutions help close deals faster by offering secure convenience to leverage the industry’s leading document collaboration tools and eSignature transaction management solutions.” The DocuSign for Realtors eSignature and Cartavi Transaction Rooms bundle provides benefits that help real estate agents: Save time and money; streamline collaboration; enhance client satisfaction and loyalty; and gain visibility and control.

connect with Zillow to help brokers and agents be more productive and successful. Contact management and marketing software providers BoomTown and Zurple signed on as launch partners. This program allows technology companies to partner with Zillow to integrate their systems for the successful brokers and agents who use Zillow as a key component of their marketing efforts – at no additional cost. Zillow already offers its own contact management software, which is used by thousands of brokers and agents. However, Zillow recognizes that what is ultimately important is that brokers and agents use the process they are most comfortable with, and that it efficiently connects them to consumers ready to engage. More than 15,000 brokers and agents who are using the first Zillow Tech Connect partners’ software will be able to directly access and manage contacts from Zillow’s nearly 64 million monthly mobile and Web unique users, giving them more flexibility when choosing a CRM system. “The majority of real estate companies and professionals have heavily invested in proprietary productivity and CRM systems, and while Zillow offers excellent tools such as Agentfolio, we think it’s important to support various technology platforms,” said Greg Schwartz, Zillow chief revenue officer. “Our launch partners, BoomTown and Zurple, provide cutting-edge productivity tools and the companies share our desire to help brokers, franchisors, teams and agents to seamlessly connect with Zillow and deliver better, smarter service to consumers.”

Managing an Increasingly Challenging Appraisal Process By Vladimir Bien-Aimé

DECEMBER 2013 n National Mortgage Professional Magazine n


The appraisal process is the longest of all the loan fulfillment processes, averaging seven days from initial order to fulfillment. There are numerous disparate tasks that must be completed to produce an appraisal that is accurate, compliant and ready to be submitted to the Uniform Collateral Data Portal (UCDP), which makes for long turnaround times. Managing the appraisal process is more involved and complicated now than it ever has been. And, there many constantly changing federal and state regulations that lenders must adhere in addition to the Consumer Financial Protection Bureau’s (CFPB) rules and the Dodd-Frank Act. Lenders can employ a number of different methods to effectively and consistently comply with ever-changing regulations. In order to handle an appraisal process that is now largely driven by compliance, some lenders have opted to simply add staff. This approach increases your cost to originate loans and actually creates exposure as a result of the potential for human error. Other lenders will use an appraisal management company (AMC) to manage the process. While this is a viable option, lenders have to be very discriminating when doing business with an AMC, as many are questionable. If they make an error or are out of compliance, the lender is ultimately on the hook for any fines. Further, some AMCs are slow to pay appraisers and some don’t even pay at all. And, similar to the overnight emergence of loan modification companies, many new AMCs were launched when people saw an instant opportunity to make a quick buck. Like the proliferation of loan modification companies, AMCs can close their doors without notice, leaving behind a mess of broken glass and unpaid fees that are due to appraisers. A good example of this is the bankruptcy of Evaluation Solutions/ES Appraisal Services (ESA), which was an AMC that left $11 million in unpaid debts to its vendors and creditors, with a large portion owed to real estate appraisers and agents/brokers. There is also a third option whereby lenders can utilize appraisal management technologies that leverage automation to fulfill tasks normally managed by a person. These technologies ensure that all regulations are met while also establishing transparent access to information, so all that lenders need to do to ensure that their best practices are being followed is regularly review reports. In terms of compliance alone, a good appraisal process management technology is more thorough and consistent than a human tasked with a multi-phase process, and more transparent than the processes undertaken by many AMCs. If a lender opts to use appraisal technology, it can expect more benefits than just preventing the fines associated with noncompliance. By automating best practices to ensure 100 percent compliance, lenders also gain the collaboration, control and confidence that ultimately reduce risk, fraud and operating costs throughout the appraisal process. It also eliminates the element of human error, inaccuracies and speeds up turn times thus preventing deal fallout. Solid appraisal management technology delivers immense value by compliantly managing the entire appraisal process with perfection. The ramifications of making errors and overlooking issues can cripple your business. Whatever method you decide to use to handle appraisals, it has to be full-proof. Vladimir Bien-Aimé is president and chief executive officer of Global DMS. Since co-founding Global DMS in 1999, Bien-Aime’ has grown the company to capture a leading share of the appraisal management segment, with a client base of over 20,000 unique users and a 100 percent retention rate among lender clients. He may be reached by phone at (877) 866-2747 or visit


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try experience, is being charged in his new role with attracting high quality loan originators and expanding production volumes and market share in the Austin marketplace, while providing some of the lowest pricing and best-inclass service to borrowers. “After 25 years of responsible mortgage lending, Mortgage Master is excited about doing business in the great State of Texas, and helping borrowers find the right mortgage solution when purchasing or refinancing a home,” said Paul Anastos, president of Mortgage Master. “As we continue to expand, Mortgage Master is attracting experienced leaders, like Larry, as well as high quality loan originators throughout the U.S. because of our supportive and sustainable business model, which provides borrowers with some of the best pricing available and enables loan officers to increase their production and income.” Joining Weisinger in the Austin retail branch are two loan originators Christian Pfluger III and Christina Cadenhead. Additional loan originators hires are pending.

Carrington Expands Wholesale Lending With New Florida Ops Center

The wholesale lending division of Carrington Mortgage Services LLC has announced that it has expanded its coverage in the Southeast, adding an operations center in Jacksonville, Fla. This latest addition reflects the company’s ongoing commitment to extending its reach and growing its wholesale business into 2014, even as other lenders are exiting the new purchase-centric market. Focused on extending the borrowing potential of consumers through conventional and government loan products, Carrington is committed to providing what consumers, real estate professionals and brokers rely on: a wide breadth of product, reduced turn times and exceptional service. The new office is led by Divisional Sales Manager Richard Dybel and Director of Operations Jawana Thomas—both formerly with EverBank Financial Corporation, which recently exited wholesale lending. Dybel and Thomas each come to Carrington with more than 20 years of experience in mortgage lending management. “We’re pleased to open our fourth wholesale operations center, and to welcome industry veterans Richard Dybel and Jawana Thomas to the Carrington family,” said Ray Brousseau, executive vice president of Carrington Mortgage Services LLC’s Mortgage Lending Division. “By increasing our Southeastern sales and service footprint

under their capable management, we’re taking yet another step toward helping our broker partners grow their businesses, their agents close more loans, and the borrowers they work with get into the homes they want.” The wholesale lending division has also announced that it has expanded its offering to include banks and credit unions as approved third-party originators. Effective immediately, approved banks and credit unions can partner with Carrington to provide their customers with access to a wide portfolio of loan programs designed to extend the borrowing potential of consumers. The new program also serves as a risk mitigation method for these financial institutions by allowing them to act as third party originators rather than as lenders on both conventional and government loan products. Among the benefits differentiating Carrington from other wholesale lenders is its expedited processing times made possible through the company’s Purchase Promise Program. Carrington’s 21-day loan closing program announced in June was designed to significantly reduce closing times compared to industry averages and applies to both FHA and conventional purchase loans. “This is yet another step in Carrington’s plan to aggressively expand its reach in the changing market and help more people get into the homes they want,” said Ray Brousseau, executive vice president of Carrington Mortgage’s Mortgage Lending Division. “Now more consumers can access Carrington’s extensive lending and servicing capabilities through their neighborhood banks and credit unions. We believe that these institutions will grow to appreciate what makes Carrington an ideal wholesale lending partner for third party originators—breadth of product, competitive pricing and unmatched commitment to help our partners succeed.”

ValuTrac and LPS Partner on Appraisal Initiative ValuTrac Software has announced an agreement with Lender Processing Services Inc. (LPS) to integrate with the LPS Loan Quality Gateway, which is powered by RealEC, a provider of collaborative network solutions for the mortgage industry. This new integration will allow ValuTrac’s customers to seamlessly connect to the LPS Loan Quality Gateway and gain significant operational efficiencies by eliminating any manual data entry to facilitate appraisal ordering, real-time appraisal tracking, appraisal review and delivery of a completed appraisal product.

Bastian, Colleen Conchelos and Armando Tautiva.




l Wingspan Portfolio Advisors has named industry veteran Susan Pettem to the newly created position of executive vice president of business development.


l First Guaranty Mortgage Corporation has named Zenon Zorij as its regional TPO manager for the western U.S., signaling its intention to expand its wholesale and correspondent presence from Texas to California. l 360 Mortgage Group LLC has announced that it has named Joseph Kowalewski as regional manager for the east region of the United States. l GSF Mortgage Corporation has added Linda Howe as branch manager at GSF’s newest branch in Waterford, Mich. l Paramount Residential Mortgage Group (PRMG) has announced the hiring of John Rigler as retail branch manager. l Norcom Mortgage has announced the additions of Daniel Sack as senior loan officer, and the promotions of James Morin to senior vice president of retail lending and Greg Radding as vice president of retail lending. Norcom has also announced that Brian Thompson has been named senior vice president of wholesale lending, and that Tom Pellicone and Frank Fitzpatrick as regional sales managers. l Inlanta Mortgage has announced that Lori Jasicki has joined the company as branch manager of its Brookfield, Wis. office. Inlanta has also announced the addition of Paul Buege as senior vice president, busi-



l l l


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Reverse Mort gages: T he right sstrategy trategy Reverse Mortgages: The for a well well div ersified busines s for diversified business If R Reverse everse Mort Mortgages gages ar aren’t en’t part of y your our product produc mix —or if y ou’re not w orking with the right mix—or you’re working R everse Mort gage c ompany—you may may be Reverse Mortgage company—you mis sing an unpr ecedented opportunity tto o missing unprecedented serv e a rrapidly apidly gr owing cus tomer base: serve growing customer homeo wners age 62 and older homeowners older.. As leading e xperts in R everse Mort gage financing, w e can experts Reverse Mortgage we giv ey ou the rresources esources y ou need tto o succeed succeed with give you you this vital pr oduct. product. T o learn mor e, call 855-77-URBAN To more, 855-77-URBAN (855-778-7226) (855778-7226) or visit uf Mention off offer er c code ode NMA1213 and w we’ll e’ll w waive aive the h wholesale/correspondent wholesale/ /correspondent partner application application fee. fee.1 *Since December 2011. Based on trailing 12 months’ endorsement volume. Source: Reverse Market Insight. 1 Offer valid through 01/31/14. For business and professional use only. NMLS #2285 (; Corporate Office: 8909 South Yale Avenue, Tulsa, OK 74137. Not all products and options are available in all states. Terms subject to change without notice. © 2013 Urban Financial of America LLC. All Rights Reserved.


n National Mortgage Professional Magazine n DECEMBER 2013


l Valuation Partners has named

l REMN Wholesale, a division of Real Estate Mortgage Network Inc. (REMN), announced that Carl Markman will be transitioning into the role of director of national sales. REMN has also named Tim Owens to the role of regional vice president, charged with leading REMN’s retail expansion throughout Arizona, as well as across the greater West Coast region. REMN has expanded its Orlando-area office with the addition of three new mortgage loan originators: Eric


ness development and strategic partnerships to its corporate team. The Mortgage Bankers Association (MBA) has announced that Teressa Jefferies, has been promoted to vice president of marketing and design. American Mortgage Network and Castle Mortgage Corporation have announced the appointment of Chip Adkins as eastern divisional manager. RealtyTrac has announced that ecommerce specialist David Towers has joined the company as senior vice president of revenue generation and operations. The lending division of Carrington Mortgage Services LLC has announced the appointment of Kathy Pilgrim as branch manager of its Duluth, Ga. Office. Stonegate Mortgage Corporation announced that Mike McElroy has been named general counsel. Mortgage Connect has announced the appointment of Cristy Ward as chief strategy officer. Franklin American Mortgage Company (FAMC) has announced that Christopher Anderson has been named vice president of portfolio retention; Kristi Irwin as vice president, wholesale regional operations manager; and Gary Royal as divisional vice president of retail lending. Freedom Mortgage Corporation has appointed industry veteran Carl Streicher as the company’s new senior vice president and western division leader. Freedom has also added two new executives in its growing retail division, Steve J. Greenberg as director of retail and business development, and Larry Yacovelli as vice president and branch manager for the Mount Laurel, N.J. branch.

l Donna B. McKeown has joined Mortgage Network Inc. as a senior loan officer in the company’s Waltham, Mass. branch. Brian Moloney has also joined Mortgage Network as a sales manager serving Boston’s South Shore area.


Mortgage Professionals to Watch l Lenders Compliance Group Inc. has announced the appointment of Michael J. Wallace Esq. to the position of director of marketing compliance.

Shawn Barmore as vice president, national account executive for the eastern U.S. region.



RealEC Technologies is a wholly owned subsidiary of LPS. A part of LPS’ comprehensive origination technology offering is the LPS Loan Quality Gateway’s Exchange, an electronic partner network that enables thousands of service providers to connect securely and electronically to their lending clients through a standards-based data exchange. “This new integration will allow our customers to seamlessly connect to the LPS Loan Quality Gateway to enhance the appraisal process by delivering a consistent and fully compliant appraisal outcome,” said Clint Cornett, CEO of ValuTrac Software. “We are excited about this integration and the opportunities it gives ValuTrac’s customers to globally connect to RealEC users. ValuTrac remains focused on being part of the movement of integrating innovative technology into holistic platforms to further streamline and mitigate risk throughout the lending value chain.”


Andrew Peters, Chief Executive Officer First Guaranty Mortgage Company


DECEMBER 2013 n National Mortgage Professional Magazine n



ational Mortgage Professional Magazine is pleased to name Andrew Peters, chief executive officer of First Guaranty Mortgage Corporation (FGMC), as its Mortgage Professional of the Month for December, 2013. Beginning his career in the industry while still in college, Andrew has literally worked his way from sweeping the floors to the executive suite. We recently had a chance to speak with him and learn how his unique perspective has contributed to his firm’s amazing growth. How did you first get introduced to the mortgage industry? I’ve been in the mortgage industry my entire career. I am 36 now, and started at the age of 19 during the summers when I was home from college, working as a loan officer assistant. My two bosses back then are First Guaranty Mortgage’s chief operating officer and my chief revenue officer today. I worked my way up from answering telephones to processing to underwriting to sales management, and for the last two-and-a-half years as chief executive officer. How does your experience in multiple areas of the industry impact your work today? I started at the ground floor, and I think

what I learned from my experiences starting from that point are invaluable. You get to see through everybody’s eyes that you work with on a daily basis. I’ve been a front-line underwriter. I’ve been on the document management side and post-closing. I’ve been on the sales side giving presentations, and even out trying to drive in business. Things that get lost in the industry when you have your daily blinders on are the stresses that each department experiences. When I have a meeting with somebody or sit down to chat with any department, they know I understand any issue they may present because I was once in their shoes. Did you ever consider leaving the mortgage industry? I never seriously thought about stepping out of the business. What has kept me in it through close to 20 years now is the people, first and foremost … the people who work for you and the pride of ownership of your job. At some point, once you’re into something for a certain amount of time, you have to make the decision of “This is going to be my career? Am I going to take ownership of it, and am I going to make the most of it?” I think it took me a few years, early on from around the ages of 19-21, where I wasn’t seeing the world so clearly. But somewhere around 24 or

25, I made a conscious decision that this is really what I want to do, what I am going to do and made a conscious effort to make it my career. How did the boom and bust period impact your viewpoint on the industry? The time period from 2002-2008 was an interesting one, and it was an amazing learning curve for me coming up in the industry. It’s that time period of my career where I saw something that affected the entire country’s economic stability … not just the mortgage industry. That really changes your perspective on the business and how you make decisions going forward. What I love most about the mortgage business and what I did for the majority of my career is underwriting and underwriting management. That is really where I kind of molded my own ability-to-pay decision-making, how to view files—not just from a black-and-white matrix, but really looking at making a true ability-to-pay underwriting decision on a loan. I think what the industry has shown is that a lot of people have learned a great deal from the mistakes that were made. What do you feel is the most underutilized or rarely-used loan program? I will mention two. Our DNA it is first-

time homebuyer programs. We offer everything from Fannie Mae or Ginnie Mae, but our bread-and-butter today is really the programs that lend themselves to first-time homebuyers. Two products that I think have a stigma today because they are difficult and there’s a barrier to entry from an intellectual capital perspective—number one is the 203k program under FHA, and number two is manufactured housing. For a first-time homebuyer to be able to buy a distressed property, roll the cost of renovations into the loan amount, not have to pay out-of-pocket for any of those expenses, get a prime-market interest rate, and be able to move into a fully rehabilitated home of their dreams with some equity and value built in that is phenomenal. They are always not easy, and you have a lot of moving parts, but if you put the right structure together you can make it very customer-centric. It’s a great program. Second, during my entire career, First Guaranty Mortgage has been a huge proponents of manufactured housing. I think it’s that unsung hero in the housing market that provides ability to get housing for many in Middle America. Those are the two products that I think we do a good amount of that really underutilized today.


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n National Mortgage Professional Magazine n DECEMBER 2013

F For or more more tthan han 20 yyears, ears, tthe he preferred preffer e red loan loan o origination rigination p platform latform

As an industry, do you feel there is and growth. First Guaranty has devoted great opportunity for a mortgage more capital in the last 12 to 18 banker like FGMC to build retail, months to compliance than we have to wholesale or correspondent channels marketing. over the next five years? If you only have one hammer and one When you look back at your career, nail, then no matter what, you keep try- what would you consider to be your ing to hit that same nail harder and greatest accomplishment? harder and harder. When the market I think the easy answer is taking over First changes or regulatory changes come or Guaranteed two-and-a-half years ago as home values decrease or any number of CEO. At that time, the company was things—a lot of mortgage bankers don’t doing $25 million a month. We are now know what else to do. They don’t have doing $225 million a month. The compathe ability to diversify. They don’t have ny had a $5 million net worth. We have different income streams. They just have over a $50 million net worth. I think those are the things that I’m very proud one thing, and that’s typically retail. that we’ve accomFor a mortgage banker, plished as a team. At the I think having multiple end of the day, I think income streams is unbe“For a mortgage what I’m most proud of lievably important. As those things come down banker, I think is the team that we have built. We have 250 the pipeline, you can be nimble. You can focus on having multiple employees now, and every single one of those one. You can focus on more than one if neces- income streams people is putting in 100 percent effort. Our sensary and can devote capiis unbelievably ior leadership team that tal to more than one. For we built over the last FGMC, we currently have important.” two years is one of the seven or eight platforms, best in the country I and platforms within believe. those platforms. That’s how we always have been, and that’s how we will continue to be. Today, we What’s one thing that you would have have retail, and within retail, we have done differently if you knew then what consumer direct and relationship retail you know now? with agents and builders. We have Since I have been CEO, I think I would put wholesale. We offer correspondent—del- a bit more focus on retail in the refi egated and non-delegated. We have cap- boom. We really ramped up our TPO corital markets where we do bulk trades, respondent lending division, and that mini-bulk, mandatory AOTs, things like was the majority of our focus in 2012. that. We will buy servicing rights. We Maybe devoting a little bit more capital have a warehouse lending platform. and time to the retail platform—and Staying diverse and making sure you we’ve gotten there now—but it took us a have income coming in multiple arenas little bit longer than we would have liked. is definitely a recipe for success. What are your goals for the firm over What concerns you the most about the the next few years? current state of the industry and the We really like the vision of a non-bank being able to play in all spaces and grow future of the industry? First are the industry’s regulatory market share in all spaces. We feel like changes. All you can do as a company is because some of the Basel III rules commake sure that number one, from the ing up that the large banks are going to top down, you are setting the tone for a continue to try and downsize their marculture of compliance. Number two is ket share. We think there is a lot of making sure that you are devoting the opportunity for small- to mid-sized noncapital to technology to back it up and banks to eat up some of that market having the right senior leadership. share. We are very bullish on aggregation That’s a compliance officer, probably of mortgage servicing rights (MSRs). We an enterprise risk manager, and prob- would like to grow ourselves into a large ably one or two outsourced partners— non-bank owner of MSRs. We would like legal firms that can give you an opin- to continue to diversify our origination ions over and above what you current- strategies between TPO and retail. We ly have in your probably counsel’s have a goal of $3.5 billion for the 2014, office or with your compliance officer. and we would love to see our servicing I just look at the regulatory environ- book, which is now close to $4 billion, to ment as—these are the rules of the be around the $10 billion mark by the game. We all play by the same rules, end of 2014. and it’s actually going to be an opportunity for those companies that do it David J. Coster is senior editor of National the right way. Companies that are con- Mortgage Professional Magazine. He may ducting business the right way will be be reached by phone at (919) 559-2171 or able to eat up additional market share e-mail

Seeking Out Tomorrow’s Leaders

By Phil Hall


n the lyrics of the popular 1950s song “Que Sera Sera,” we are told that “Whatever will be will be, the future’s not ours to see.” However, that sentiment does not work in today’s mortgage banking industry—especially in regard to identifying and shaping the next generation of originators. “We have an industry that is aging, and we need to do more to attract younger people who want to get into real estate finance,” said Jeff Schummer, vice president of education for the Mortgage Bankers Association (MBA). “If we really want a next wave of people working in the industry, we need to be able to train them upfront, rather than by osmosis,” said Andrew Peters, chief executive officer of First Guaranty Mortgage Corporation, headquartered in Tysons Corner, Va. Increasingly, mortgage banking companies are relying on proactive recruitment of new graduates and internal mentoring programs to help create the next generation of lenders. Although there are a number of different strategies involved here, their core goal is the same. “We play such a critical and noble role in the U.S. economy, and it is really easy to sell a career in this very exciting industry,” said Debra Still, chief executive officer of Denver-based Pulte

Mortgage and former chairwoman of the MBA. Pulte Mortgage has been among the leaders in proactively recruiting new since the mid-1990s, and Still noted that her company is on the lookout for “college graduates with that right attitude and the right aptitude that will go through Pulte’s 90-day training program.” During her tenure at the helm of the MBA, Still advocated for recruiting efforts to ensure diversity and inclusion as part of the industry’s outreach. “Not only do we have to attract and engage new talent, but we need to make sure that our industry is a reflection of the new consumers,” still said.

What’s a lien? But this raises a thorny question: Do today’s college graduates know anything about how this corner of the economy operates? “Some college graduates came in and knew nothing about mortgage industry,” said Jessica Hammon, vice president of talent acquisition at Troy, Mich.-based United Wholesale Mortgage (UWM). “One kid came up to me and asked, ‘How do I become an account executive? That is what I really want to be.’” The MBA offers educational courses, but only a small number of colleges have curriculum that focus exclusively on mortgage banking. One of a handful of schools that provides a degree in this subject is Irving, Texas-based North

Lake College, which offers an associate degree program. Many of the enrolled students at North Lake are already veterans of the mortgage world. “Half of the students at North Lake worked 10 to 15 years in the industry, but they were not promoted because they did not go to college,” said Keith Baker, program coordinator at North Lake College. “More and more companies require some sort of college education to get promoted. And very few companies hire underwriters with no experience.” Baker said that the recent problems that plagued mortgage banking did not help pique many students’ curiosity in exploring this field. “We had a hard time in 2009 through 2011, when we were down to 100 people in program,” said Baker. “Now we’re up to 350, and we also have online courses.” But on the whole, very few college students leave school with any educational training in the basic tenets of mortgage banking. “I’m a good example of someone who landed in the business by circumstance,” said Peters, whose company recently launched the online FGMC University, a program that includes Webinars, training modules and testing. “We have been to local community colleges, but they don’t have mortgage banking training. Our online program is good for new entrants and even for current staff trying to get up to speed on

the CFPB and compliance issues.”

Making the grade There are numerous variations on how mortgage companies bring talent into their fold. For example, at Pittsburghbased PNC Mortgage, a combination of academic excellence and personal initiative is viewed positively. “When we send managers from PNC Mortgage to the colleges to do first round of interviews, where we look at GPA averages and whether the students held leadership positions on the college campuses and outside,” said Catherine Grover, PNC Mortgage’s senior vice president and director of strategic initiatives. At Hallmark Home Mortgage in Fort Wayne Ind., recruitment efforts do not focus on newly-minted graduates. “I prefer not to see them fresh out of college,” said Deborah Sturges, president and chief executive officer at Hallmark. “I think it’s important for an individual to have some experiences out of college. I tend to identify people with a job or two—they’re more serious minded in starting a career. Oftentimes, when people graduate from college, their expectations are not developed and they are not sure where their strengths lie.” Danvers, Mass.-based Mortgage Network works with local universities to identify potential talent, but the company also places a strong emphasis on referrals and recommendations for new recruits.

“We want someone to recommend a potential hire,� said Brian Koss, executive vice president of Mortgage Network. “We don’t take out big ads. We take recommendations from all of those we work with—vendor partners, real estate agents, even borrowers.� Perhaps the most unusual recruitment effort came via a conversation that Mike Hardwick, president of Brentwood, Tenn.-based Churchill Mortgage, had with his son 18 months ago. Hardwick’s son had just graduated from college, but was complaining about the tight job market and the lack of opportunities for newcomers to the work force. As a result, Hardwick created a mortgage training program at his company, with his son and four other recent graduates as the first wave of recruits. “We’ve been encouraged by progress they are making,� said Hardwick. “Unemployment is still high and underemployment dramatically too high. There is a lot of young talent out there for a business like ours.�

place to make sure they succeed. The new college graduates are used to working online and by mobile devices—they are not the pen and paper people.� Kovalak added that the lengthy training process needs to be supported with a compensation package that will ensure new recruits will want to stay with company. “Many college grads are not willing to make minimum wage for six to nine months,� she said. But Eddy Perez, president of Atlantabased Equity Loans, points out that even if a company wanted to rush a new recruit into origination, government oversight would not allow it. “Due to regulatory and licensing requirements, new recruits cannot start straight on sales,� said Perez, noting that the lengthy training process is both a financial and time investment by companies. “It takes a year or two before they can see a return.�

How things work

However, an emphasis on youth, combined with continued tightness in the job market, has created something of a backlash for older individuals that are eager to get work in the mortgage field. “Age discrimination is a problem,� said North Lake College’s Baker. “Older people who get training here have trouble getting placed within their expectations.� And not every firm is eager for untested youth. One company that favors more experienced professionals instead of college graduates is Fay Servicing, which actively recruits former loan originators. Patrick Norton, senior vice president of servicing at the Chicago-based Fay Servicing, believes that originators can use their sales experience to focus on the solutions-driven work required in servicing. “We don’t have to teach people about loan-to-value or debt-to-income ratio,� he said. Norton added that Fay Servicing fields its older employees via referrals and active outreach to mortgage companies that are initiating layoffs. Lenders One’s Kovalak acknowledges that hiring experienced workers also takes a corporate focus away from the learning curve and puts it on the bottom line. “People with no experience fresh out of college are not the same as a seasoned professional with a portfolio full of business,� she said. Still, the mortgage industry—indeed as is all industries—inevitably need a transfusion of new blood in order to stay vibrant and competitive. Churchill Mortgage’s Hardwick recognizes that the current older guard can only stay in place for a finite amount of time. “There seems to be graying in our industry,� said Hardwick. “We need to find young talent and skills.�

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n National Mortgage Professional Magazine n DECEMBER 2013

Phil Hall is senior editor of National Mortgage Professional Magazine. He may be reached by e-mail at


Most programs offer new recruits the chance to work in various departments within the company, in order to determine which aspect of mortgage banking would best fit their skills and personalities. “We start them off in the processing area of company for seven months,� said Hardwick. “From there, they move to underwriting, then secondary marketing. After three to six months training in each department, they receive an overall broad-based knowledge of the mortgage industry. After two to three years, we sit with them and the department heads to see where they will be best-suited in the company.� But many new recruits are caught off-guard by both the complexity of their newly chosen profession, and frequently, by the corporate cultures they enter. “Even if one comes in with mortgage knowledge, they are not always successful navigating a matrix organization and dealing with a client base,� said Teresa Blake, practice director at Wipro Gallagher Solutions, based in Franklin, Tenn. “This is another way to help people to help themselves.� Blake’s company responds to this challenge by pairing new recruits with a “buddy,� who is nominated from a specific part of the company to aid the recruit in learning the ropes. “This helps them ramp up faster,� added Blake. Yet, as UWM’s Hammon points out, the company’s needs also need to be part of the balance within this process. “We need to step back and evaluate the situation,� said Hammon. “We are looking to develop strategies for the future. We are in it for the long haul— and for the individual out of school, we hope they’re looking to stay.� “You need to think through how to bring new talent on board,� said Kristi Kovalak, director of marketing at St. Louis-based Lenders One. “For example, you need to have the right tools in

A more experienced worker

Repairing the Reputation of Credit

DECEMBER 2013 n National Mortgage Professional Magazine n


By Doc Compton If you’re one of the credit bureaus, or the people who sell their reports, you’ll swear that it’s a complete sham. If you’re a lender, you either love it or hate it, depending on your past experiences with it. But if you’re one of the millions of consumers with errors on their credit report, it’s a godsend. Who’s right..? All three …

an 800 number and the promise of a fresh new start, line the roads throughout my city. Radio and TV ads that make ridiculous guarantees bombard the airwaves, and print ads that offer too-good-to-be-true results to the disenfranchised and fill mailboxes from coast to coast. And all of this leaves me to wonder: Where is this industry, one that’s been so good to me for so many years, headed? But before I try to answer that, let me elaborate on my first few statements.

Let me explain … I have been doing credit repair for nearly two decades. Initially, I needed it for myself, then I did it as a favor to friends and family, and eventually in 2004, I founded a registered credit services organization. Since then, I have seen a lot of changes in the credit repair industry—some good, some not-so-good. I’ve been through ups and down in the real estate and mortgage markets, and I’ve watched credit repair companies come and go, with only a few remaining afloat, mine among them. I have made consumer credit my career. And in the wake of a terrible recession, caused in part by the mortgage crisis, credit repair companies have begun to pop up everywhere. Cardboard “bandit signs” at busy intersections and billboards with

The credit bureaus … Plain and simple, the credit bureaus think what we do is a scam. Or do they? In a recent article on Yahoo!, I pointed out the similarities between credit repair and rapid rescoring. I detailed how, for nominal fee, inaccurate, incomplete, erroneous, outdated or unverifiable information could be removed from consumer credit files and create an increase in their scores that could mean the difference between a loan being approved or declined. And then I talked about credit repair. Here’s the thing … the companies that lenders purchase their tri-merged credit reports from purchase the same data from the bureaus that any consumer could, but in a concise, easy-to-read format. In other

words, they’re a customer of the credit bureaus. A customer that is happy to sell–with a slight markup–the same information to lenders as a third party. And what’s a lender to do if they happen to pull one of the millions of credit files with an error in it? They pay to have it fixed. Seems legit, right? Of course it does, so long as the thirdparty reseller (read, “bureau customer”) makes money doing it. But credit repair companies, if everything else is assumed the same about the process—an error is found, a fee paid, the credit repaired, scores raised—are consistently labeled as a scam by the bureaus. The whole thing sort of leaves me scratching my head.

What about lenders? I was speaking to a large group of lenders several years ago, when I was asked a tough, but fair, question. “Yeah, but as a credit repair guy, don’t you feel a little bit like the defense lawyer that gets someone off on a murder trial for a technicality?” I thought about it for a minute, before said, “Yeah, I suppose I do. But let me ask you something … If you were wrongly accused of murder, would you care if I got you off on a technicality?” The answer you get about whether credit repair is a legitimate industry

depends exclusively on which lender you talk to. Many lenders have had a less-than-favorable experience, because they enlisted the help of a less experienced or perhaps even disingenuous company. Perhaps they referred a borrower to a company that they knew little about, only to have the client return upset, because the results weren’t there. Or maybe a commissioned salesman promised more than his or her company could deliver. Either way, the borrower’s money was the only thing gone, and the results simply never came. Most lenders would be hesitant to refer a borrower to a credit repair company after an experience like that, and I wouldn’t blame them. However, in the interest of customer service and getting a loan closed, many offer to do some of the repairs for their client, manually or via rapid re-score. Others might suggest that the borrower do it themselves. Some might even go as far as to provide the borrower with template letters for the purpose of disputing inaccurate information. Unfortunately though, many opt to simply decline the loan, and offer no alternative for the prospective homebuyer. On the other hand, there are legions of loan officers who will absolutely swear by what we do. Having been a

t Repair

profitable) task of maintaining credit data for hundreds of millions of people, and with that much data, mistakes are inevitable. Fortunately, under federal law, there exists a mechanism by which these errors can be corrected. The Fair Credit Reporting Act (FCRA) allows the consumer to contact the bureaus and request that they conduct an investigation into the alleged inaccuracies. The problem, as was pointed out by Ohio Attorney General Mike DeWine in the 60 Minutes story, is that although the investigation mechanism exists, the bureaus are often “not doing any investigation at all.” That leaves consumers frustrated, and with the errors unresolved. Invariably, the argument comes up that credit repair companies cannot do anything for people that they cannot do for themselves. Would you say that about barbers or lawyers? How about accountants? After all, you can certainly cut your own hair, represent yourself in court, and do your own taxes, right? But would you trust the results to be the same? Or would you prefer experienced, professional help? That’s where credit repair comes in … or should come in.

Back to the future …

I could write a book, several, actually, about the nightmares I have heard from people about their efforts to deal with credit errors on their own. In February of this year, CBS’ 60 Minutes did a lengthy story about the statistically significant number of errors on consumer credit files, and incredibly flawed system for correcting them. That story was inspired by a recent Federal Trade Commission (FTC) study which found that one in five credit reports had errors on them, and that one in 10 had errors that negatively impacted the consumer’s scores. Now, to be fair, the credit bureaus are burdened with the massive (albeit,

Doc Compton accepted the position of operations manager for the consumer credit section of Prevost and Shaff LLC, a “Family and Finances” law practice in Dallas. He may be reached by phone at (214) 733-8336.

A Message From MAA Chairwoman Amy Swaney

As 2013 comes to a close, we reflect on a busy year that saw many changes affecting the real-estate finance industry. In January alone, there were seven regulations enacted from the Dodd-Frank Act, and the constant chatter about GSE reform reiterated the unpredictable future of the secondary mortgage market. Going forward, there is little doubt that this “change” will continue. In fact, we know with great certainty that our industry is in the middle of a transformation as opposed to a tranquil state. Because of this, it is important that we continue to communicate with our leaders in Washington to sort out uncertainty and fight for our interests through participation in the Mortgage Action Alliance. When our collective voice is coupled with the strength of the Mortgage Bankers Association (MBA), we have the ability to be the most vocal and effective advocates in the industry. Consider MBA’s accomplishments this past year:

Ability-to-repay and the qualified mortgage (QM) MBA was steadfast and successful in obtaining a broadly defined, reasonable safe harbor with flexible underwriting standards that supports a safe market for lenders and consumers under the final rule.

Qualified residential mortgage (QRM)/risk retention MBA led efforts to harmonize the riskretention exemption (QRM) with the ability-to-repay standard (QM), in order to eliminate onerous down payment and credit history requirements from the QRM definition, and to ensure that the industry was not overburdened with two separate yet similar compliance requirements.

Basel III MBA’s efforts with the Federal Reserve, the Federal Deposit Insurance

Corporation (FDIC) and Office of the Comptroller of the Currency (OCC) resulted in less severe final rule provisions. In fact, the final rule dispenses with the existing deduction from capital of 10 percent of MSR fair value and would offset deferred tax liabilities against MSRs for 10 percent limit calculation.

GSE reform Elements of the MBA’s GSE Reform Plan, including providing an explicit federal backstop, placing private capital in the first-loss position and ensuring that the secondary mortgage market works for all 51 lenders through all market conditions, have been included in every other thinktank and trade association plan, and have been part of most bills in Congress.

Servicing compensation The MBA led efforts to block the GSEs and the Federal Housing Finance Agency (FHFA) from dramatically reducing the minimum servicing fee on GSE loans to protect your revenues and your ownership of the servicing asset. Adding to these accomplishments will be no small task. It will take even greater participation from our industry professionals to ensure the future of the real estate finance industry is sustainable and beneficial to all stakeholders. It is more important than ever that we band together our collective voices and speak up for our industry through the Mortgage Action Alliance. Make it your goal to actively participate with the MAA. Enlist your peers and friends to join and participate. MAA is a voluntary, non-partisan and free nationwide grassroots lobbying network of real estate finance industry professionals, affiliated with the MBA. As the Mortgage Action Alliance Chair, I am personally dedicated to strengthening the industry’s voice and lobbying power in Washington, D.C. and state capitals across America through this network. Enrollment in MAA is easy … simply fill out an online form at our Web site, continued on page 52

n National Mortgage Professional Magazine n DECEMBER 2013

Then there are the consumers …

“The L A R G E R the group, the L O U D E R the voice”

referral-only company for nearly a decade, I have a long list of top producers who would insist that their success wouldn’t have been possible without our help. Of course, I won’t name them by name, though. The credit bureaus and third-party resellers not only frown on loan officers referring their clients to credit repair, they generally forbid them from sharing reports with credit repair companies in their contracts. Perhaps it’s because of the inherent competition with the rapid re-score model.

I suppose I’d liken my situation to that of my lender friends, who, in the face of increasing regulation and the creation of the Consumer Financial Protection Bureau (CFPB), wonder what the future holds for their industry. Residential lending has suffered at the hands of those who have bent the rules, not to mention those who have ignored them altogether. So too, is the challenge that the credit repair industry currently faces. Those who are not in line with the federal Credit Repair Organizations Act are making it increasingly difficult for those of us who are. What’s more, it seems that the good companies are the only ones that ever honestly acknowledge that there are bad guys in the industry. I know that I have to overcome it in virtually every sales call I make. That leaves me in the unusual position of battling to defend my industry’s reputation, while also working to help consumers defend their financial reputations against credit bureaus that refuse to correct inaccuracies submitted by the creditors and collection agencies trying to collect them. So, what’s a guy with that kind of challenge supposed to do? I tell you what he does … he continues to be an example of how credit repair should work. He continues to play by the rules, fight the good fight, for the little guy, and do his part to make the American dream a reality for people … just like you do.

MBA’s Mortgage Action Alliance

The Titanic Syndrome: How to Avoid It and Save Your Ship in 2014 By Andrew Liput

DECEMBER 2013 n National Mortgage Professional Magazine n


Being a sales-oriented business, mortgage lending resists anything that creates roadblocks, no matter how temporary, to the loan closing. The attitude is understandable however short sighted it may be when facing a crisis or potential crisis. Some might say, in fact, that the industry ignored warning signs of potential financial liability and consumer harm before the last banking crisis. The passage of the Dodd-Frank Act and the creation of the Consumer Financial Protection Bureau (CFPB) were reactions to that widespread belief. The inability to recognize danger and do something about it is frequently referred to as the “Titanic Syndrome.” As one commentator explained it, “Okay, so say the world was about to explode. Instead of trying to do something about it, you spent the night partying, getting drunk, and just having fun …” Next year is going to be a game-changer for many lenders. Those unable or unwilling to play by the CFPB’s new rules will find it difficult to survive. The one-two punch of QM’s three percent costs and fees rule, together with the need to adopt more compliance and risk management functions, could very well result in a winnowing of the industry where only the strongest, best-managed, quality originators survive. To make matters worse, the market is down thanks to rising interest rates, the death of the refinance boom, and low inventory of homes for sale nationwide. The choice then, for many, becomes this … do we spend the money and effort in a down market to adopt procedures and acquire the tools to prepare for the CFPB in January, or do we cut costs, get down and dirty and hope we fly under the radar? Do we don the life vests offered through compliance tool vendors and quality control firms and “check the box” for CFPB compliance despite the short-term costs, or continue to party like its 1999 and hope that the ship stays afloat long enough for us to get back to a better balance sheet before incorporating regulatory changes? The risks may to be too great to wait. The CFPB has made it clear that they have no intention of delaying the rollout of final rules, especially for QM. In addition, the CFPB has shown that it is serious about audits and enforcement penalties. In the past 12 months, there have been more than $600 million in fines and penalties assessed or agreed to following CFPB enforcement actions. How can a lender avoid the Titanic Syndrome and save their business in 2014? l Educate yourself and your staff about the new rules l Conduct a front to back (origination through closing) analysis of risk and compliance holes. Enterprise risk management needs to be your new watch-word. l Adopt a written operating plan incorporating the appropriate policies, procedures and third-party tools to assist in filling those risk and compliance holes. l Contract for third-party verification of best practices, QC and compliance. Auditors will want to know: How are you evaluating your own performance? l Spend the money now, a worthwhile investment, to prepare for January 2014. The dollars spent today may very well guarantee you will be around to enjoy the fruits of the next year’s business cycle. Don’t go it alone. Find a risk management partner. At SSI, we not only provide our clients with a life jacket and a boat, we actually do the rowing for them too! Andrew Liput is president and CEO of Secure Settlements Inc., a company he founded after nearly 10 years studying the problem of escrow and closing fraud and the uninsured risks associated with mortgage closing professionals. He may be reached by e-mail at


elite performer

continued from page 8

l Don’t just do something, stand there. l What’s the difference between a terrorist and an underwriter? You can negotiate with a terrorist. l I re-underwrote the file and decided you don’t need that. l We have looked everywhere for your approval, perhaps it is still in your imagination. l Are these conditions multiple choice or do I have to get them all? l What’s the difference between and dead dog and a dead real estate

agent in the road? The dog had skid marks in front of it. l I am madder than a mosquito in a mannequin factory. Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and 2010-2011 president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431, e-mail or visit

mba’s mortgage action alliance Your membership is always free and lasts for one calendar year. MBA is proud to be the voice of the industry and with your help through MAA, we can continue to raise our voice and make an important impact. We look forward to a busy and productive 2014. Let’s work together to build a real estate finance industry who’s success will last for decades to come. Amy Swaney, CMB is governmental rela-

new to market

continued from page 51

tions officer and branch manager with Scottsdale, Ariz.-based Citywide Home Loans. Amy is also chair of the Mortgage Action Alliance (MAA), a voluntary, non-partisan and free nationwide grassroots lobbying network of real estate finance industry professionals, affiliated with the Mortgage Bankers Association (MBA). Amy may be reached by phone at (480) 822-6262, ext. 2164, email or visit nAlliance.

continued from page 43

an easier, more transparent method of ordering appraisals that delivers PCV Murcor’s unmatched turn times, quality and a certification of appraiser independence. Rare among large national valuations providers, appraisals can be ordered through ValuationsDirect with a simple credit card payment—no lengthy sign-up agreements required. Orders can be placed immediately with qualified, expert appraisers in all major U.S. markets and clients receive online, time-stamped status reports 24/7, as well as live phone support with licensed appraisers. “ValuationsDirect brings greater ease of use and transparency to the appraisal ordering process,” said Keith D. Murray, MAI, president and CEO of PCV Murcor. “While some platforms may have some of the features and functionalities that we provide with ValuationsDirect, none of them provides the transparency and quality control processes that this platform provides. Whether originators are looking for a solution to handle an appraisal outside of their market, or a full-scale platform for all their valuations, they get the solution they need in ValuationsDirect.”

ValuationsDirect attempts to solve issues that brokers and correspondents face. For instance, many local appraisal management companies (AMCs) provide their own individual ordering platform, but require greater oversight to ensure quality and compliance. The other option is to go to a national appraisal company, but it is often a time-consuming process to establish an account. Appraisal reports ordered through ValuationsDirect are only sent to local appraisers who have specific expertise for similar properties in his or her market. In addition, every appraisal ordered through ValuationsDirect comes with a certificate that ensures the report qualifies for all requirements of appraiser independence.

Easy Mortgage Apps Now Available in Canada (EMALLC) has announced that it is now offering their private label Mobile App to lenders and continued on page 73




An old boxing adage claims that a good big man beats a good small man every time, simply because size brings more power. The same can be said of mortgage institutions. Scale does matter and it brings specific advantages to those who have it: l Fixed costs can be spread over a larger base to increase profit margins. Increased profits means there is more money to reinvest in employee recruitment, training, and compensation. It also allows for investment in new technology and innovative marketing programs, further leveraging strategic advantage

l Unlike variable costs which move proportionately to sales volume, fixed costs cannot be easily eliminated. l Pipelines, laboriously and expensively assembled over years of stable refinancing markets, are crumbling as smaller originators adjust to more complex home-purchase, rather than refinancing, mortgages. l Traditional servicing has become much more complicated and expensive as the mega-banks wrestle with millions of foreclosures, unprecedented government scrutiny and regulation, a potential change in the role of government in the mortgage markets, and new securitization rules yet to be finalized. The market dynamic has been turned on its head, the big boys are reeling, and there are opportunities for new leadership and companies to emerge. While the size of mega-banks has become a disadvantage in today’s market, primarily due to an inability to rapidly adjust to the new environment, scale is nonetheless important for new competitors if they seek a national footprint.

Essential elements of success Successful mortgage companies share several common traits which combine to accelerate their growth and create competitive advantage. As they grow larger, the advantage of scale, whether

l Purpose: Good results rarely happen by chance. Success is the outcome of a coordinated, thoughtful combination of goals, strategy, and implementation. For example, Wingspan Portfolio Advisors, founded in 2008 in the midst of the mortgage securities debacle, was named number 23 on the 2013 Inc. 500 list of America’s fastest-growing companies with a growth rate of 8,768 percent in the last three years. Wingspan, using a combination of strategic hires, advantageous acquisitions and innovative technology, is an example of a small company aggressively moving into market space previously occupied by the biggest mortgage players. l People: Employees matter, as all good companies know, but troubled companies often forget. Guaranteed Rate, a private company based in Chicago, more than doubled its home mortgage business from $7 billion in 2011 to $14.7 billion in 2012, providing loans in all 50 states and becoming the second largest independent home loan company in the country. The company has a Net Promoter score of 77 percent, higher than companies like Apple, Amazon, and Southwest Airlines. Guaranteed Rate employees receive multiple benefits including on-site meals, a private gymnasium and year-round training programs. The company was recognized as one of Chicago’s top places to work by the Chicago Tribune in 2012. l Process: Combining a $150 million proprietary servicing system with a superior loan resolution process, Ocwen Financial Corporation has been widely recognized by consumer advocacy groups for its foreclosure prevention. Ocwen acquired Barclays’ mortgage servicing business, HomEq, in 2010 and developed a consumer-friendly mortgage modification model widely recog-

nized by consumer groups for its expertise in HARP. The company also acquired Liberty Home Equity Solutions, a reverse mortgage originator, in 2013 to achieve a 149 percent growth rate in revenues in the first half of 2013 versus 2012. The company plans to make more acquisitions in the future. l Position: Scale is not limited only to those companies which offer a complete range of mortgage services and products. Mark Greco, founder and president of 360 Mortgage Group LLC, completely changed his company’s focus in 2010, abandoning the retail market to focus exclusively on third-party origination and serving the mortgage broker community. The company began operations in the southwest and is now licensed in 31 states. Even as mortgage volume has grown, it has captured advantage in scale by maintaining a single centralized operation center in Austin, Texas. Knowing your strengths and focusing on them is essential to occupying a strong competitive position.

Final thoughts To paraphrase Rudyard Kipling’s famous poem, “If,” keeping calm, maintaining focus, and overcoming your fears are the keys to success in any business. This is particularly true in the world of mortgages, where interest rates, regulations and changing consumer preferences make for a chaotic industry. The old order is under siege and new players are going to emerge to become the leading mortgage companies of tomorrow. Even though the mega-banks will eventually adapt, the opportunities for new companies to join them on the upper tiers of success have never been greater. The window is open, but it’s going to close at some point in the future. Make sure your company seizes the moment. What do you think mortgage companies should do to remain competitive? Mike Lewis is a retired business executive and personal finance columnist. He may be reached by e-mail at


n National Mortgage Professional Magazine n DECEMBER 2013

Does size matter?

However, size has its disadvantages too, which the mega-banks are discovering today. When cataclysmic change hits the markets, as it did in 2008 and 2009, it is difficult to react quickly and take corrective action. What are seen as assets in a stable market become millstones in a chaotic environment:

in a single market niche or as a fully integrated mortgage firm, adds to their dominance. The common traits of market leaders are as follows:

ince the early 1980s, interest rates on 15year and 30-year fixed-rate mortgages (FRMs) have trended downward, eventually reaching lows under 3.5 percent in early 2013. This trend generated multiple periods of high refinancing volume, accelerated a historic increase in securitization, and created megabanks such as Wells Fargo, JP Morgan Chase and Bank of America, which grew to dominate the mortgage securities industry. The subsequent mortgage security crisis in 2008 slashed bank earnings, led to billion dollar lawsuits, and resulted in new legislation that added increased scrutiny and extended potential liabilities for industry participants. The mega-banks continue to be under pressure with billions in bad loans yet to be worked out, refinancing volumes at their lowest since 2000, huge staffs, and excess capacity built during the years of extraordinary growth and friendly regulation. At the same time, there are new opportunities for companies to capture market share from the retreating behemoths whose size has become a liability in the rapidly changing mortgage market. While it is unlikely that the mega-banks will disappear, there is the real possibility that new, aggressive competitors can nudge them aside and gain a foothold in the national marketplace.

in the marketplace. l Products and services are available to a wider, more diverse market, thereby minimizing the impact of adverse conditions in a single geographical area or product line. l Competitive barriers are established that must be overcome by new and potential rivals who want to gain a foothold in the marketplace.

NCRA Hosts 2013 National

NCRA 2014 President Maureen Devine awards Bill Bower of CIC the 2013 President's Member of the Year Award

DECEMBER 2013 n National Mortgage Professional Magazine n


By Terry W. Clemans


Pam Marron of Bankers Mortgage presents the CFPB and NCRA special recognition on behalf of the consumers with troubled short sale credit reports to for working on a solution to the problem

The Data Security Discussion Panel fields q

Colo. for serving 10 years on the

Trans Union sponsored the first

Our panel was moderated by

board, including as association

keynote speaker, award-winning







president in 2012, and Daphne

business consultant Brad Hams,

President Marty Flynn, and



Large of Data Facts in Memphis,

author of Ownership Thinking:



Tenn. for serving on the board for

How to End Entitlement and

Armstrong, senior counsel on

representing half the

six years and as our 2013 presi-



dent. During the awards presen-


mortgage credit reporting indus-

tation, Bill Bower of CIC received


try and many resident screening

the 2013 President’s Award and

focused on getting rid of employ-

American Information security

companies, came together in


ee entitlement thinking, and LPS


November at t h e



Flood sponsored the second

president of Property Solutions

C o n s u m e r Reporting Associa-

Consumer Financial Protection

keynote speaker, Tracy Spears,


tion’s (NCRA) Annual National

Bureau (CFPB) and NCRA for

who broke down what motivates

Division; Dave Vision of Data

conference in Al b u q u e r q u e ,

their work on getting a solution

people to do what they do. Both


N . M . T h e Conference marks

to the problems documenting

speakers were well-received by

Sword & Shield Enterprise

the annual changing of the lead-

short sale transactions in credit

the membership, with numerous


ership at NCRA, as Maureen


comments that the information










a whose





the Fair Credit Reporting Act



(FCRA) for the FTC; Shoaib



Experian’s Scott


Ledbetter, Screening


The on





discussion problems

Devine of Strategic Information

Two packed days of meetings

shared was “enlightening” and

associated with the software

Resources (SIR) in Springfield,

were on NCRA’s agenda, featur-

would help them become better

protections and data safety

Mass. was elected 2014 NCRA

ing 28 speakers (including four

leaders and, in turn, create a

protocols of loan origination,

president, Mike Brown of NCO

speakers from the Federal Trade

more productive workplace.

property management sys-

Financial Systems is the new



One of the most important

tems and other software appli-

vice president/treasurer, and we

Housing Finance Agency and the

sessions for the mortgage origi-

cations on a mortgage origina-

welcome two new directors to

CFPB) providing the educational

nation industry, with huge impli-

tors’ computer that may open

the board, Julie Wink of Data

foundation for numerous sub-

cations for anyone using con-

access to hackers and identity

Facts and Dean Wangsgard of

jects related to consumer report-

sumer reports was the data

thieves. A discussion was also



ing for the housing industry.

security discussion panel that

held about the demand for

NCRA would like to extend our

Supporting a theme of “CRA

focused on the loopholes in data

mobile apps in the market-

deepest appreciation to retiring

Survival,” this year’s conference

protection protocols often asso-

place and the concerns about


focus was on compliance and

ciated with third-party loan origi-

protecting data in that chal-


nation software (LOS) providers.

lenging mobile space. The FTC





Advantage Credit in Evergreen,




Conference in Albuquerque


Keynote Speaker Tracy Spears discusses motivation in the workplace

A packed house listens in to one of the many discussions

office excellently and we thank

the data to be protected in all cir-

her for 10 years of dedicated

cumstances and pointed out the

service. Second, NCRA is going

numerous $100,000-plus settle-


ments they have collected from

Conference schedule from its



current early-November timeslot

involved in data breaches and

to a late May/early June time-

been found to be using systems


that did not meet FTC standards.

schedule will now rotate between



The feature networking event







Conference and


Vegas. Each non-election year



(odd years like 2013) will be in

International Balloon Museum.

Washington, D.C., as part of a

NCRA members got a chance to

legislative and regulatory ses-

discover the history of balloon-

sion. The even years (beginning

ing, enjoy some live classic rock

this spring as 2014 is a mid-term

and dinning on a New Mexican

federal election year) will be held

feast. It was a perfect evening

in Las Vegas.

for many to have their first

Thank you to all of those who

encounter with a hot air balloon

attended, exhibited and spon-

as more than 120 people hopped

sored events at NCRA’s 2013

in the basket and floated up in a

Conference, and we look forward

tethered ride a bird’s eye view

to seeing them again under the

and an opportunity to experience

bright lights of Vegas this spring.

The NCRA’s feature event party was held at the International Hot Air Balloon Museum as members prepare for a trip up

how a hot air balloon operates. There




Terry W. Clemans is executive

announcements from the NCRA

director of the National Consumer

Conference this year. The first of

Reporting Association (NCRA).

which is the celebration of Jan

He may be reached by phone at

Gerber’s 10th year with the

(630) 539-1525 or e-mail tcle-

NCRA. Jan maintains the NCRA

FHFA’s Robert Avery discusses the National Mortgage Database

n National Mortgage Professional Magazine n DECEMBER 2013

was sponsored by Meridian Link the


made it clear that they expect

“The brokers I know seem very good about dealing with buyers, so, if they can get things straightened out with the government, 2014 could be a great year for them because of their traditional focus on word of mouth …” —Ken Harney, nationally-syndicated financial columnist

Regulations to Shape the Future of the Industry in 2014 Ken Harney and Lawrence Yun survey the coming year By Robert Ottone With a wave of legislation unveiled in recent months, and with more on the horizon, it’s fascinating to speculate on the kind of year 2014 could be. Ken Harney, a nationally-syndicated financial columnist and Lawrence

DECEMBER 2013 n National Mortgage Professional Magazine n


Yun, chief economist for the National Association of Realtors (NAR) are two leading experts in the field and were keen to discuss a speculative outlook while also looking back at the year 2013.

“People aren’t defaulting in a rising home price environment. Underwriting is preventing further recovery and the potential for a faster, more robust recovery.” —Lawrence Yun, chief economist for the National Association of Realtors (NAR) Where do you see the residential mortgage marketplace heading in 2014? Ken Harney: The refi boom is clearly gone. I’ve seen estimates around 30 percent lower volume next year, but that means there will be greater concentration on the purchase market. The brokers I know seem very good about dealing with buyers, so, if they can get things straightened out with the government, it could be a great year for them because of their traditional focus on word of mouth, all those things I like … the attention to service, etc. Brokers seem to care. In the past, big banks never gave me that impression. I’d love to see a more mortgage broker style brought to the servicing end of business.” Lawrence Yun: In terms of unit sales, I believe we have hit a plateau. There won’t be any meaningful change in unit sales on existing homes, even though prices, I expect, will continue to increase in moderation, perhaps around six percent next year, overall. What are some of the things that have led to this plateau in the market? Yun: It’s not really a concern, honestly. The home sales market has been recovering nicely over the past two years. Many people would consider 2013 a success in terms of performance, so they’d potentially see a repeat of that. Now, the reason why there isn’t more growth on the horizon is because there are some negative factors that are beginning to impact the market, principally the affordability condition, which is coming down due to a combination of much higher home prices in relation to income growth. That disparity is a prime concern. We’re clearly in a rising interest rate environment. Rising rates will hold back the potential buyers. What impact will compliance issues have on the industry in 2014? Yun: The compliance issue is an uncertainty. Out of new Washington policies, including the QM [qualified mortgage] and QRM [qualified residential mortgage] issues, if there are further title regulations, naturally, that would impact the forecast, but I don’t predict any compliance changes. I think the final rulings

would be very reasonable. The current condition involves tight underwriting and I don’t see any tighter underwriting. Have you found, based on personal experience, that the Big Four are looking for ways to disqualify? Harney: To some extent. The retail guys are looking to do business, but at a lower intensity and lower ambition level. You don’t get the same attention you get from a broker. They want you kept on the hook. They want you as their client, surely. I can’t say every broker is as good, but over time, in investment property purchases, I’ve been able to identify who the good ones are for me, so I stick with them. Is there any criteria you feel a mortgage broker should have that makes them stand out? Harney: Well, it’s hard to advertise words like ‘service,’ so, to tell you the truth, I’ve been connected by word of mouth. A real estate agent will suggest somebody and that person often proves to be the best. That broker is often consumer-focused. That’s the difference between retail guys and brokers. Brokers, in general, are smaller-business, but do a decent volume. They’re constantly in touch and working hard. I can’t say the same for retail guys. Consumers don’t know who the brokers are. Put aside Fed issues and CFPB issues and I think that’s the biggest challenge brokers face … making themselves identifiable to the consumer. Social media and the Internet is the cheapest and easiest way to get your name out there. Brokers need to make a more energetic effort in getting themselves out to clients. Do you foresee any shock to the economic system as we transition from Ben Bernanke to Janet Yellen as Fed Reserve chair considering how drastically different they are? Yun: No, I don’t think so. I think it’ll be relatively similar. Small, modest changes would be made. The tapering of quantitative easing [QE] could be achieved at a faster pace next year under Yellen.”

Do you feel that mortgage brokers are still the poster child of the crisis? Harney: The word I would use is “scapegoat,” but that’s a Biblical term. It has to do with transferring all the sins of the community onto one goat and send it into the wilderness. I do think that brokers were partially responsible for what happened, but you had to have underwriters as well. There’s plenty of blame to go around. You had unscrupulous brokers out there, sure. My sense is that those people who were doing that have been removed or have left the industry. The industry is much smaller now than it was at the height. What you have left are the ethical ones who have weathered the storm of Congress, and particularly, of this Administration.

Do you foresee any further refinement of existing CFPB rules over the next year? Harney: I have been under the impression since day one that the CFPB has tried to bend over backwards to be responsive to various industries. While those industries might not agree, I think those are the marching orders. The pattern is that they are very open, they welcome sitting down and talking and negotiating, and I think that’s the style they have established. Whether they succeed on QM or anything else, in some cases, they’re locked into Dodd-Frank and might not have the room to compromise. I wouldn’t be surprised if they didn’t decide to work more with the industry as a whole. Yun: I think the big-picture is that these banks have benefited from low interest rate policies. Cash reserves are strong. Underwriting standards are very tight, pre-

venting renters from becoming homeowners. This prevents renters from partaking in homeownership, which means they aren’t part of the housing recovery. That’s the big picture. Many public statements from the Fed and the Administration point to underwriting being too restrictive. The CFPB might need to take that as a cue in how they engage in legislation. People aren’t defaulting in a rising home price environment. Underwriting is preventing further recovery and the potential for a faster, more robust recovery. Can you discuss the implications of any regulatory shifts on the consumer? Harney: I don’t think we know how this is all going to work out. I think we’re tumbling towards something that could be more jilting than many people think. If people are shunted into non-QM and being thrown out, especially if it’s com-

bined with the possibility of sometime, after six months or more, lower conventional Fannie Mae or Freddie Mac limits will push people who normally could have gone through with Fannie and Freddie won’t be able to do that. They’ll be in the jumbo arena where they’ll have to pay more. The CFPB exception won’t benefit them. I think that the first six months of 2014 will be a bumpy time. The industry is gearing up to handle this, but as more people get thrown out under lower loan limits, there could be a burst of activity going to the FHA. Their premiums are harsh, so people won’t be able to afford FHA, either. Robert Ottone is senior editor of National Mortgage Professional Magazine. He may be reached by phone at (516) 409-5555, ext. 314 or e-mail 57

n National Mortgage Professional Magazine n DECEMBER 2013

“Focus on progress, and you’ll build momentum and an energy that will fuel levels of growth far beyond your imagination …”

Plan to Win 2014 By Erik Janeczko

Greg Frost, my good friend and mentor, often starts his presentations asking the question, “Have you been in business 12 years or one year for the 12th time.” The question he is really posing is, “Are you reacting to the environment around you or are you learning, growing and evolving year over year making each year better than the previous?” If you are tired of the treadmill repeating

the same old story year after year and struggling to achieve, it may be that you’re working with a broken process. You see, through tens of thousands of hours of coaching top originators and mortgage executives over the last nine years, I have realized that a great majority of mortgage professionals have been following a planning process that is highly reactive and


therefore, has significant limitations. You see most strategic planning processes start with a SWOT analysis: Strengths, Weaknesses, Opportunities and Threats. While this is a good exercise to assess the lay of the land around you, it’s a horrible way to start a planning process. In this article, I will introduce you to the three-step proactive planning process that my coaching team walks its clients through that has yielded growth rates of 40 percent, 60 percent and even 100-plus percent year over year growth for many of our clients over the last nine years. If you implement this process we know that you can follow the same strategy to develop your success plan for 2014.

DECEMBER 2013 n National Mortgage Professional Magazine n

Step I

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We realized that, unlike the reactive SWOT process, you have to begin with a vision in mind, one of purpose, personal goals, and exactly what you want to achieve, and then work backwards from there to find the strategies that will get it done. In our coaching program, we introduce our clients to a volume and goals exercise that gets them thinking about where they want to be a year from now. In an ideal world, what kind of production, what kind of lifestyle, what kind of income and what kind of client experience do you want to create in your business? Take a few minutes to answer these questions for yourself and create a vision of what you ideally want your business and life to look like. As you do, put aside thoughts of limitation, and for a moment, give yourself permission to dream big. Put possibility to the side and instead of thinking “I can’t,” ask “How can I?” Instead of quickly dismissing what you may think is unreasonable or impossible, start by asking the question, “Well, okay, it may not be possible, but if it was, what would it look like?” Using this line of thinking maps out what that ultimate vision of success looks like for where you want to be at the end of 2014. Once you are clear on that definition of what you want your volume to look like, then it’s time to start the actual planning process and work the numbers backwards to determine what your

closing volume must be to achieve those goals. Through a process using of volume goals, simples exercises, it’s just a matter of math. With our coaching clients, we walk them through an income and volume goals Spreadsheet that takes the income they need to support that vision, and works the numbers based on commission-per-loan and lead conversion percentage down to how many leads they need to generate weekly in order to reach these goals. Once you have identified what this weekly lead generation target is, then it makes it a lot easier to stay focused on generating a consistent volume of leads. And this consistent proactive lead generation activity will yield the production and revenue goals you seek to obtain. Just understand that this is where you want to be a year from now, so you’ve got a whole year to grow towards that volume one step at a time throughout the year.

Step II Once you know what your lead generation target; the next step is to determine what strategies you are going to use to achieve that lead generation goal. Often in my coaching work, I challenge my clients to dream big and to start with a number that may seem totally impossible just to challenge them to see how easy it can really be. For example, one of the examples we often use in our on-site workshops and small group coaching sessions, we use the income target of $50,000 per month. Now for some of you, you may have already surpassed that number, so take that and double it to $100,000. But for the rest of you, that may be a pie in the sky dream that you don’t believe is even remotely possible. But I promise you, there are hundreds of loan officers all across the country making that kind of income and more every month. Now, in the $50,000 example, it works out to about eight leads a week to hit the target. But think about it, eight leads a week is less than two a day, right? How hard is it really to find two people a day that you can help with a home loan? Think about it seriously? Worst

l Step 1: Set your plan l Step 2: Decide your strategy l Step 3: Track your progress When you take these three simple steps of planning, I guarantee that you will see significantly bigger results when you look back at what you have accomplished in 2014. And to help you in this process, simply go to and get a free copy of the planning tools mentioned in this article. I wish you all the greatest success as you execute your 2014 Success Plan. Erik Janeczko is a certified and nationally recognized business coach and speaker with Maximum Acceleration. He may be reached by phone at (888) 819-7047 or e-mail



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n National Mortgage Professional Magazine n DECEMBER 2013

Step III Once you have the strategy, how do you make sure that you stay on track throughout the year. Well, the magic secret we have figured out is a simple phrase “What gets measured gets done.” It is called “The Hawthorne Effect” based on the group that identi-

fied this scientific principle, but the reality is if you track your performance daily, your performance will increase significantly, just by the simple fact that you’re tracking it. Of course, if you’re tracking your lead volume on a daily basis and you get to Thursday and have not yet hit your lead volume for the week, you still have a chance to adjust your activity and make sure that you are putting in that extra effort to hit your target for the week. Now the key here is consistency. See, if you fall off two, three or four weeks in a row and then all of a sudden end up with a bad month. If you fall off a couple of months in a row, you end up with a bad year. However, if you stay on top of it starting early in the year, and keep on track and focus on the progress that you’re making towards that higher volume goal of where you want to be 12 months from now, then you can celebrate the progress that you have achieved this week over last week and month over the previous month. Focus on progress, and you’ll build momentum and an energy that will fuel levels of growth far beyond your imagination, and you might even find yourself expanding your goals sooner than you think. I encourage all of you to take the initiative, to set a course of action in motion, and begin with the end in mind to stretch your belief in what’s possible. Are you ready to get started? If so, here are the three simple steps in the Plan to Win Process:

case scenario … if you had to literally cold call apartment renters out of the phone book (cross-referencing the DoNot-Call list of course), how many calls would you have to make to find two people who are at least somewhat interested in buying their first home? And if you simply offered them the opportunity to look at whether they could benefit from buying a home right now by offering what we call a free home opportunity evaluation, how many dials would you have to make to find one or two who were interested? In our experience, the worse case was 30 to 40 calls and you’ll find two or three people who are already thinking about buying a home. Now, this may not be the easiest way to do it and it certainly would take a significant amount of discipline and accountability to make it happen on a daily basis, but if you made 40 calls a day, I guarantee you would find one or two people who could benefit from doing something different with their mortgage and housing situation. But is there an easier way? Let’s say, for example, you introduce this planning concept to real estate agents and other financial or insurance professionals in your community, and over the course of the next 12 months, build six or seven good partners who are focused on generating one good lead a week in conjunction with you through the market reach and communication initiatives of the team you have created. Call it the “Home Opportunity Initiative” or something similar, where you work together in concert to reach as many folks with the opportunity to benefit from buying or upgrading their housing situation. As a result, the team of you are all now generating eight to 10 leads per week that are showing up more or less on auto pilot just due to a concerted effort and consistent approach to reaching out to people in the community who could benefit from this amazing housing opportunity.

“You must have a solid foundation, built by a vision, to grow your career.”

Banker to Broker By Andy W. Harris, CRMS

“What we see depends mainly on what we look for.”—John Lubbock Yes, you read that title correctly. I’ll get back to that, but let’s focus on strategies for 2014 first. Failing to plan is planning to fail. This famous Benjamin Franklin quote comes in many different versions, but they essentially mean the same thing. You better have a plan or

DECEMBER 2013 n National Mortgage Professional Magazine n


you’re simply setting yourself up for failure through your own negligence. What I find shocking is that many, many people in our industry are presently doing just that. It’s not necessarily that they are failing to have a plan entirely, but that their plan is extremely void of self-directed research and education about the realities facing the future of the mortgage industry and

too much focus is on the job rather than the career. I personally believe what I share in the following text is some of the most important material a mortgage professional can take in as we approach 2014. I believe most mortgage professionals think they have a plan and vision. What they don’t realize is that their plan and vision can been skewed and crafted primarily by outer influences and not by self-education, research and math. It’s like walking around holding a pair of binoculars backwards. This tunnel vision is not a good position for anyone and certainly can cause someone to focus primarily on one thing rather than on the big picture. If you want a full view and vision of the future you must first learn how to turn the binoculars around. Starting down the wrong path in 2014 with a limited vantage point could be destructive to your career. When reading this try to “clean the slate” in your mind. Forget about what you’ve heard and forget about what you’ve been told to believe or sell if you’ve drank too much of the corporate juice. Let’s simply discuss the specifics about the very broad mortgage industry without the special interests.

The new era of recruiting If you originate mortgage loans for a living, you likely understand how intense recruiting is in our industry. At the end of 2013 and during the first portion of 2014, I believe we will see the heaviest and most aggressive recruiting in our history. Don’t get caught up in it and slow down. With rates rising and volume dwindling, many creditors have already begun showing losses the last quarter of 2013 and these trends will continue. In addition, the only primary source of revenue in this transactionalbased industry is through closing loans. The time span between 2012 and early 2013 was a party for many, but those not drinking enough reality water or expanding too aggressively using unsustainable volume data will certainly have a hangover in 2014. Regulatory requirements, risks and costs to creditors will be greater than ever when entering 2014. We will unfor-

tunately see many mergers, acquisitions and companies going out of business next year as they simply will not be able to adapt to the losses they face through restricted transactional revenue and margins. As always, the strong will always survive, but only strategically and with planning. It’s extremely important that the originators in our industry make very careful and educated decisions when considering job offers or career-altering changes. Mortgage originators will really need to research the company, the vision, the financial stability and compliance. If you’re considering starting your own business, talk with successful colleagues about the expectations, requirements, and challenges.

Compensation and regulation There is no greater culprit than compensation to mimic “greener grass” or motivate originators to jump around to different companies. Many times this can come in the form of a signing bonus or short-term incentive, but these short-term views will turn your career into a job. Unfortunately, many have been pushing the envelope on the compensation rules and the originator assumes the employer is in compliance. Make no mistake that the Consumer Financial Protection Bureau (CFPB) has been clear that those individuals who play the naïve card and rely on their employers following compensation rules will also be held accountable personally should violations exist. Understand the rules and regulations! It’s amazing to me to see lenders are now making changes before 2014, acting as though the Fed revision to compensation hasn’t already been in place since 2011. Do you really think this past data is omitted in an audit? Another thing to remember on compensation is good old math. The higher your compensation, the higher your rate sheet to the borrower. This compensation margin is in addition to the padding applied by the employer to cover overhead and all costs and profits associated with running a retail mortgage company. When revenue goes

The new wholesale lending channel aka “brokering” (as they so call it) I’ve said it time and time again that the terms “broker” and “banker” are comical. We’re all third-party originators to

ping without steering or special interests, period. For those considering or those already pure brokers, just make sure your margins are identically set and you’re following all compensation, fair lending, and anti-steering policies just as all channels should be. Any origination channel can be a good channel to place your license if you are happy, but never discredit wholesale operations or what you don’t understand. If you work “for” a lender and have a bad experience or a change is made, you’re in a pickle. If you work “with” 25 lenders and have a bad experience, you have 24 other options. Think about it.

Mortgage brokers: Just say no to mini-core Lenders selling this, we’re fed up. Just as we were fed up with the net branch fear-based recruiting of brokers in 2009

that has backfired for those that gave up their businesses, we are also fed up with the mini-correspondent talk as it pertains to QM (the qualified mortgage) come Jan. 10, 2014. Good mortgage brokers will not be impacted by the three percent points and fees test. These salespeople pushing mini-core don’t even understand the analytics, nor do the majority of brokers they are talking to. If a broker is making this change to try and work-around these rules then they need to seek another profession, period. As indicated, this work-around will not work. In addition, the CFPB is very clear some are attempting this and they will be held accountable. Mortgage broker transactions that are table-funded are not secondary market transactions. They continued on page 62




How do you make the best collateral valuation decisions? Are you measuring appraisal risk? Can your AVMs perform just as reliably in a purchase transaction as they do in a refi? Are you checking for UAD and UCDP-compliance, pre-submission? Are your systems giving you a 360-degree view of collateral value and risk? Do you need a clearer perspective on your originations, or your loan portfolio? Get the right perspective with Veros tools and technology.

Lending | Servicing | Secondary Markets | Technology 866.458.3767 | ©2013 Veros and all products are registered trademarks or service marks of Veros Software. All rights reserved.

n National Mortgage Professional Magazine n DECEMBER 2013

Save your money Always expect the best, but plan for the worst. We’re in a volatile industry and you cannot allow your balance sheet to negatively impact your decision-making or emotions. Save as much as you can and try to build enough reserves to be comfortable in any market. Consider also deleveraging any debt other than your primary mortgage or those used for investment purposes to limit the monthly obligations that our industry does not always match as it pertains to accounting. This is very simple, but a huge reminder and security we all need that can significantly improve our lifestyles, behaviors and attitudes.

the primary agencies that buy, insure or guarantee mortgage loans (Fannie Mae, Freddie Mac and Ginnie Mae). Even portfolio and jumbo lending exists on all channels making these titles outdated and unwarranted going forward. Temporary funding or a line of credit to the same agencies will not make someone different than another. While I understand we’re too brainwashed to remove these titles, I’ll go with it for now. Yes, wholesale lending is still here as it has always been and continues to be an important and active origination channel that is growing again. Only those who have been influenced by others with a financial stake in this artificial view have been impacted. The other inaccurate assumption is the one that comes from these that think they broker loans, but in reality really don’t the way it’s meant to be done. Those with correspondent lines interfering with their margins and product offerings “can” broker, but credit line influence removes all the benefits and true picture of wholesale execution and pricing. Priority for most programs will always fall on the credit lines when employed by a creditor. I consider myself a high-producing, experienced, analytical and detail-oriented mortgage originator. I am also a small business owner. I embrace confidence, but despise arrogance. I have reviewed all regulations, data, math and trends over the years to confirm that being a mortgage brokerage exclusively is the best position for my clients, our employees, and my business. If operated correctly, there is nothing like comparing lenders who compete for business on pricing, overlays and execution. I can tell you that we’re dominant in our marketplace when the time comes for competitor comparison with an educated consumer. I love being a mortgage broker and it is the best time in history to embrace the wholesale channel. Do not count out being a mortgage broker or working for one if you have not recently or feel you’re in the corporate roller coaster, I mean a true mortgage broker. As a broker, any bad lender experience for any reason can be removed immediately with unlimited resources on investors to compare. If run properly, it is truly the only channel in which you work exclusively for your borrower and their interests by shop-

down, overhead doesn’t. Pricing will be relevant to the creditor, but no doubt you need to find balance and know your competition. It’s realistic to expect “fair” compensation with good pricing for your target of gaining new educated consumers. Pricing does matter and “selling service” in today’s market lacks common sense. Everyone must execute well and have excellent service and experience in today’s primary mortgage market. Pricing will always be a factor to educated borrowers, just not to a disconnected non-originating sales manager that needs that margin. I try my hardest not to pass judgment, but I have been very disappointed and shocked by the lack of understanding most of my colleagues have on current and future regulations that significantly impact their clients as well as the future of our industry. I am very surprised by the questions people ask when it comes to items within DoddFrank such as the Qualified Mortgage (QM), ability-to-repay, three percent cap calculation for points and fees, APOR test, etc. Everyone must understand these things in order to effectively communicate with clients, real estate agents and others. It is our responsibility if we are communicating with the public. Just being average doesn’t cut it in 2014. Make no mistake, being welleducated about the industry will result in more authority and respect from others, resulting in more referrals.

banker to broker

The good news

continued from page 61

do not consider these bona fide warehouse lines and certainly will pull the data to determine why these lines were set up to bypass rules established for higher compensation and steering. See paragraph (b)(7) in section 1024.5 of the Real Estate Settlement and Procedures Act (RESPA) effective Jan. 10, 2014 for bona fide transfer of loan obligation. There is also tremendous buy-back and other risks to those funding on a What’s worse is that the sales people pitching this simply see an opportunity in the market for volume, using QM as fear and not discussing risk. This is ludicrous and very bad for our industry. You have to be all in or all out of

DECEMBER 2013 n National Mortgage Professional Magazine n


wholesale or correspondent and make a decision as to how you operate your retail business in the future. Why would you eliminate every benefit you have as a mortgage broker by adding a line to steer your borrowers toward higher rates and limited products, purely for an assumed financial gain with significant risk? You lose all the benefits of being a broker I just mentioned, and this is truly an unacceptable practice in my opinion as an actual originator working with consumers daily. Wholesale is an excellent source, but it must be operated properly to avoid issues for our industry in the future.

There is always good news and opportunities always exist. The good news is that I am not sharing sales tips and marketing ideas for 2014. The good news is that I am not giving you 10 more ways to get realtor referrals. The good news is that I am not sharing the top ways to market to your database. The good news is that I am not a selfproclaimed guru selling coaching in a Webinar, seminar or class. The real good news is that I am an experienced colleague in the thick of the mortgage origination process, and I am showing you how to turn your binoculars around without special interests or influences motivating me to do so. You must understand the analytics and trends to see the big picture. You must have a solid foundation, built by a vision,

to grow your career. Education is the new marketing. Education will help you predict the future. Education will allow you to use math and data to the benefit your business. If rates rise or applications drop, there is always someone needing financing to buy a home. You must position yourself to capture new clients long-term without inconsistency. If you want the best business-building and marketing ideas for 2014, look past your nose and look toward wholesale. Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and 2010-2011 president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431, e-mail or visit

“The terrible irony of Dodd-Frank is that it seeks to address the misdeeds of Washington and Wall Street by reducing the availability of credit for American consumers at both ends of the credit spectrum.”

Preparing For 2014: A Year of Transition That’s Likely to Be One Bumpy Ride By Chris Whalen

continued on page 64


n National Mortgage Professional Magazine n DECEMBER 2013

prices that are much closer to comparable retail home valuations than were the deeply discounted REO sales of the post2008 period. The January 2014 effective date of many of the regulations promulgated by the Consumer Finance Protection Bureau (CFPB) pursuant to the Dodd-Frank law is shaping up to be an unmitigated disaster for many organizations and individuals in the mortgage sector. The number of changes and arbitrary decisions imposed upon the industry by the CFPB are going to fundamentally change the economics of the lending business–one reason why so many banks and non-banks are shrinking or exiting the mortgage lending arena. Some firms have operated in the distressed servicing business for years have been able to adapt quickly, while many other firms focused on performing servicing and loan origination have not been so fortunate. Implementing new operational standards with respect to issues such as ability to pay, debt-to-income ratios, record keeping, diversity, and fair lending is causing lenders and servicers alike huge headaches and costs. For many smaller firms, the solution will be to partly or entirely withdraw from mortgage lending. Unfortunately, Dodd-Frank and the regulations issued by the CFPB do not address the financial crisis at its core, and instead penalize both lenders and consumers operating in the residential mortgage market. Under these laws, lenders are encouraged to originate “qualified mortgages.” These low-risk loans include those backed by the Federal Housing Agency (FHA) and the Veterans Administration (VA), conventional loans bought by Fannie Mae and Freddie Mac, and some “portfolio” loans, which are mortgages that lenders originate and then keep. But qualified mortgages exclude many of the mortgage-loan options that have been available in the past. The terrible irony of Dodd-Frank is that it seeks to address the misdeeds of

investors of double digit reductions in mortgage lending volumes in 2013. Residential loan origination volumes are likely to drop more in 2014, suggesting that the recovery in the housing market is waning. Key indicators such as the Mortgage Bankers Weekly Application Survey are down almost 50 percent compared with a year ago. The most recent earnings results from large banks such as JPMorgan Chase, Citigroup and Wells Fargo confirm that the mortgage market is undergoing significant structural change unrelated to interest rates or other short

The year 2014 is shaping up to be a transitional one for the residential mortgage industry. Home prices are likely to continue to improve, albeit more slowly than over the past 24 months, when the narrowing of the spread between real estateowned (REO) and retail sales was the biggest driver of visible home price appreciation (HPA). Thousands of pages of new rules and regulations (care of the regulatory experiment known as Dodd-Frank) will go into effect. Banks will continue to shrink their mortgage lending and servicing operations, and non-banks will continue to grow. A lot of people and infrastructure deployed to deal with distressed loans and mortgage refinancing will be repurposed to serve performing assets and new mortgage originations. But the process of making these necessary operational changes over the next year is likely to be a bumpy road filled with challenges. The U.S. housing market, a critical driver of the economic recovery, is showing increasing signs of improvement. In many markets throughout the United States, prices are rising, construction crews are finally starting to build again and distressed sales are falling. While most analysts expect home price appreciation to slow in 2014, the gains made over the past two years seem real and sustainable. The one caveat to this upbeat assessment, however, is that the new laws and regulations put in place since 2010 are sharply reducing the availability of credit to consumers. The latest data from the FDIC (Q3 2013) shows that bank portfolios of one- to four-family loans are continuing to shrink. The number of cash buyers of real estate is falling fast as the prospects for an easy buy-and-flip strategy are disappearing with the supply of bank REOs. While there remains a substantial supply of REO properties held by various U.S. government agencies–probably more assets than were held by commercial banks–the disposition of these assets is likely to occur at

Washington and Wall Street by reducing the availability of credit for American consumers at both ends of the credit spectrum. The people and companies in the mortgage sector are paying the price for this experiment in social engineering with lost jobs and economic opportunities. Literally tens of thousands of mortgage professionals have lost their jobs and their livelihoods over the past year due to Dodd-Frank and the new CFPB regulations. And the process of employee redundancies and changes to existing mortgage businesses at both banks and non-banks is ongoing. Some of the largest banks in the U.S. have already provided guidance to

preparing for 2014 continued from page 63

term factors. Leading housing analysts such as Michelle Mayer at Bank of America are cutting back estimates for HPA in 2014. Indeed, Meyer believes that Q2 2013 was the peak in home prices for this cycle. Because of the punitive capital and liquidity rules of Basel III, most commercial banks will no longer touch a new one- to four-family mortgage loan with a FICO score below the mid-700s–loans that will generally require a 50 percent capital risk weight. Non-agency loans will have capital risk weights of twice that for agency-qualified loans held in portfolio—in addition to Basel III penalties for liquidity. These higher capital requirements (coupled with an extremely hostile regulatory environment) are driving major banks toward significant-

ly reducing their headcounts. SunTrust Bank, for example, just exited the wholesale lending business, which means that there are no longer any major U.S. banks in wholesale lending. Wholesale was traditionally a non-bank business, but the major commercial banks came to dominate the sector over the last 15 years. We are now coming full circle, with non-bank lenders acquiring valuable wholesale lending teams from banks. The changes in risk preferences dictated by Dodd-Frank and Basel III for commercial banks have enormous implications for the mortgage market. Real estate professionals, for example, know that their clients are having a tough time getting loans from commercial banks, so this creates a big

opportunity for non-bank firms willing to work with prime and below-prime customers. Over the course of 2014, look for more non-bank lenders to expand their lending operations into market segments that commercial banks are unwilling or unable to serve. As we head into 2014 under enhanced regulatory scrutiny, growing uncertainly concerning mortgage rates and varying predictions for what the future might hold in terms of home prices, one thing seems relatively certain. The mortgage industry is headed toward a bit of a shake up. Nonbanks will continue to grow market share as commercial banks shrink, both in terms of lending and loan servicing. It is worth recalling that Wells Fargo, still today the market leader in both categories, actually withdrew from mortgage lending in the early 1990s. Though we have yet to fully realize (or in some cases even imagine) the

possible business and economic implications of having stricter regulations, increased liquidity requirements, and a related shift in bank and non-bank players, these events are sure to change the face of lending for some time to come. And while there are a number of things the industry is already doing to prepare for what is to come, it remains difficult to forecast what awaits us around each and every bend. As these changes continue to take shape moving forward, perhaps our best course of action is to simply buckle up and hold on. Christopher Whalen is executive vice president and managing director of Carrington Holding Company LLC. Christopher is also the author of the book, Inflated: How Money and Debt Built the American Dream, now in a second printing from John Wiley & Sons. He may be reached by e-mail at or visit

DECEMBER 2013 n National Mortgage Professional Magazine n


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“The entire game has changed, and we need to change with it. It is now a purchase market and the focus needs to be on purchase business.”

What Are You Doing to Strengthen Your Hold on the Marketplace in 2014? By Ryan Kelly

Ryan Kelly is marketing manager with Norcom Mortgage He has been at Norcom since January of 2011, and received his bachelor’s degree from Central Connecticut State University in communications and is currently pursuing a master’s degree in graphic/informational design. Follow Ryan’s blog at, or reach him by phone at (860) 899-2734 or e-mail


n National Mortgage Professional Magazine n DECEMBER 2013

whether they are a repeat buyer or a first-time homebuyer. If they don’t recognize your name, they are most likely not going to choose you. Brand awareness isn’t just about being the loudest. The brand awareness campaigns, whether they include radio, television, billboards, print or SEO, are crucial because they catch the consumer’s attention and if successful, motivate a call to action. We are spending a lot of time trying to reach potential buyers before they contact a real estate agent. If we are successful in doing this, we can then share that business with our agents, which will strengthen our partnerships. In turn, we will see that business come back to us. Social media outlets should be monitored on a daily basis. If you don’t set social media goals and don’t have a social media strategy, you are archaic. I suggest setting monthly goals for growth and you will be able to track the success of campaigns quite easily via Google Analytics and Facebook Insights. This way, you can track how many followers are coming from your social media channels to your Web site. In terms of return-on-investment (ROI), this is what it’s all about. Not only does social media get you in front of people everyday with a new message, but it also is extremely successful in driving traffic back to your site. Ultimately, that is where it all happens, and that’s the goal. Content is king with social media, and if you are posting effective material that promotes interaction with clicks, comments and “Likes,” then your audience will grow along with your brand awareness. Spend some time thinking about your target audience and then tailor your content to interact with them. These are real people and potential consumers on the other end you are interacting with. According to,

partners to make the transition as smooth as possible. Potential branches are looking for companies that are stable, compliant and offer the support they previously didn’t have access to. It’s important to make them feel like part of the team from day one. Be inclusive, stay in touch and help them grow their business. If you are able to support them, the partnership will serve you both well. Finally, build out your correspondent and wholesale presence by increasing your sales team. In addition, focusing on newer territories and in spreading your reach throughout the country. It’s important to grow your footprint outside of your comfort zone. Start by increasing your sales teams in these new territories and then follow up with a well-executed marketing strategy. This might include exhibiting at trade shows, running print mail, telemarketing and SEO campaigns to target those territories. Whatever your plan is, make sure that you can track it. It’s crucial to know what’s working and what’s not. In an industry where change is inevitable, you need to change with it.

In order to strengthen our hold on the marketplace in the coming year, my own firm is focusing on a few key areas of the business. First and foremost, we are placing large importance on compliance. Our chief compliance officer is committed and dedicated to the industry’s regulations and upcoming changes. Having a chief compliance officer and a fully staffed quality control (QC) department allows a company to focus on production while the competition could potentially be playing catch up. Having immediate access to a compliance department is a huge advantage for any firm’s sales team. We are making a strong push on the recruiting front with our recruitment team. As some of the smaller competitors exit the market due to a drop in refinance business, we will be looking to acquire more producers in the coming months. The entire game has changed, and we need to change with it. It is now a purchase market and the focus needs to be on purchase business. This fits our business model well as our primary focus has always been on purchase transactions. That requires attention to the real estate agent community. We have been streamlining our retail model to be a resource for our real estate agent partners and to give added value in working with our company. The truth is that all purchase business starts with the real estate agent community. By nurturing those relationships and providing value to their business, loan originators and lenders can lead the industry instead of being left in the dust. Marketing is going to have a large impact over the next few years. A marketing model that includes brand awareness campaigns, a social media strategy and lead purchasing is going to be crucial. Brand awareness directly influences the everyday consumer,

Americans ages 18 through 64 who use social networks say they spend an average of 3.2 hours per day doing so. To market effectively, you need to have a presence where your consumers spend their time. Lead purchasing is another avenue that appears to be on the rise. Companies like LendingTree are investing a great deal of capital in attracting consumers in need of mortgage financing. First-time homebuyers are beginning the search for a home online. According to LendingTree, 60 percent of mortgage borrowers research online before applying. Whether they apply directly on the Web site or through a third-party site, you need to be flexible with this new approach. Make sure that you have easy-to-use online applications present on your site that are integrated with your LOS. With Generation Y, it’s all about immediacy. Lenders need to work around the clock these days in order to compete. I have personally seen a majority of m y company’s online applications coming through during off hours and the weekend. As other lenders exit the wholesale channel, remain committed. The competition may dwindle and with that comes more opportunity and more market share. Rates and service continue to drive the Wholesale market. My firm prides itself on creating great partnerships with our brokers. Honest communication and setting expectations will serve you well. With the upcoming regulations and changes, branch opportunities will present themselves from the wholesale channel. My company has built a support team for its branch


National Mortgage Professional Magazine’s 40 Under 40 The 40 Most Influential Mortgage Professionals Under 40

n our fifth annual “40 Under 40” feature, you will find a list of the


top mortgage professionals under the age of 40, as voted on by their peers, who exemplify professionalism and top production in today’s housing market. Despite the rough waters of the U.S. economy and the ever-shifting landscape known as the mortgage

industry, these 40 professionals have persevered in a time of regulatory uncertainty. In assembling this list, we at National Mortgage Professional Magazine took some criticism when we began this endeavor. Many felt a list of this nature ignored many, and others felt that a list of this type is a “thing of the past,” while some even cited age discrimination, but we firmly stood by our decision to assemble this group. Like their industry pioneers before them, these individuals are the ones who carried the torch of professionalism in the year 2013 and beyond. We’d like to congratulate all of the following individuals named to our “40 Under 40” list for 2013—in no particular order but alphabetical—and thank all the nominees for their participation in our “40 Under 40: The 40 Most Influential Mortgage Professionals Under 40” feature.

Raymond Bartreau Founder & CEO Best Rate Referrals l Las Vegas Raymond Bartreau founded Best Rate Referrals, a mortgage marketing firm, in 2005. Best Rate Referrals has grown into one of the top marketing companies and has been recognized as one of America’s leading 300 small businesses, a Tech 200 company, as well as being listed as one of America’s fastest-growing companies four years in a row. Since the first time Raymond made NMP’s 40 under 40 list, Best Rate Referrals launched their “Brand Builder” program that catapulted the company into the tech space and soon became a dominate force in online lead generation.

Vice President of Branch Operations HomeTown Lenders LLC l Huntsville, Ala. Chris Fiorello graduated from Appalachian State University in 2004 with a degree in Hospitality and Tourism Management. He entered the mortgage business in 2005 and began working with Hometown Lenders in 2006. He currently holds the position of vice president of branch operations and is responsible for training new branches, analyzing branch production and running the branch support department. In his time at Hometown Lenders, he has created the company’s “Processing Best Practices Guide,” and has worked to distribute and implement it throughout the company. He also serves on the Compliance Committee and is a certified DE Underwriter.


Chris Fiorello


Vice President matchbox LLC l Woodbury, N.Y. John Clerkin is vice president of matchbox LLC, a N.Y.-based consulting firm that specializes in creating operational efficiencies within the mortgage process for lenders. John’s career has taken him from loan origination to system development, which allows him a unique perspective of how to use technology to leverage efficiencies on all aspects of the lending process. Since managing his prior firm’s 500-user Encompass 360 implementation, he has continued his extensive knowledge of the Encompass system. Due to John’s efforts, matchbox LLC has been able to double its client base on an annual basis and he continues to receive accolades from clients John continues to expand his craft for matchbox LLC in efforts to meet the needs of lenders through technology.

President & CEO Waterstone Mortgage Corp. l Pewaukee, Wis. Eric Egenhoefer is president and chief executive officer of Waterstone Mortgage Corporation, a Pewaukee, Wis.-based residential mortgage lender. Eric founded Waterstone in 2000 and sold the company in 2006 to Wauwatosa Savings Bank. In 2008, the bank changed its name to WaterStone Bank and currently operates Waterstone Mortgage as a wholly-owned subsidiary. Today, the mortgage company employs more than 700 people in 16 states, and lends approximately $2 billion annually. Eric attended the University of Wisconsin-Whitewater, where he received a Bachelor of Science in Finance. Eric currently serves on the board of directors of BizStarts Milwaukee, is also a member of the Young Presidents Organization, and previously served as a board member for the Wisconsin Mortgage Bankers Association.


John Clerkin

Eric Egenhoefer


Home Finance Advisor Certified Mortgage Planners l Orlando, Fla. Chris Brown has become known in his marketplace as one “Who delivers world-class service to those who come to him for help.” He has also developed the reputation of being the “Generous Lender” by committing 100 percent of every 10th loan’s commission to local charities that support the Central Florida community. He says it has challenged him in acting out his faith, rather than just speaking to it.

CFO Maverick Funding Corporation l Parsippany, N.J. Ben Edelstein joined Maverick Funding in 2010 and became CFO in 2012. He is also the co-founder of Milestone Accounting Solutions, which provides outsourced accounting services in a variety of industries. Before founding Milestone, Ben had 10 years of experience in mortgage banking and related financial services. He has worked with and been a participant of executive management teams for mortgage banking firms and financial institutions, with a focus on formulating and leading initiatives related to profit maximization, business direction and cost saving strategies. Ben holds a BS in Applied Economics and Management from Cornell University and graduated Cum Laude. He currently lives in Central Jersey with his wife, Megan, and sons, Braden and Reece.


Chris Brown

Benjamin Edelstein


Owner & Broker of Record PB Financial Group Corporation l Los Angeles Pouyan Broukhim opened up PB Financial Group in January of 2006 with a focus on funding private money, hard money and bridge loans in California. After seven and a half years, he has led PB Financial to be one of the top hard money and bridge lenders in California, with loan funding exceeding $7-$10 million monthly. With honesty and integrity as the foundation of growth, PB Financial has grown to be a powerhouse in the hard money and bridge financing arena. The company’s 2013 business volume is on track to triple that of 2011’s totals, and they expect 2014 to exceed 2013’s business volume.

CEO CoesterVMS l Rockville, Md. Brian Coester is the founder of CoesterVMS, an Inc. 500 company and winner of the October Research Innovation Award. CoesterVMS is dedicated to providing the best in technology and service in the mortgage industry. Brian is a father of two, devoted Christian, avid reader and former college football player.


Pouyan Broukhim

Brian Coester








Doug Foral Director of Operations Mortech, a Zillow Business l Lincoln, Neb. Doug Foral is currently the director of operations at Zillow’s Mortech division. Prior to the Zillow acquisition in November 2012, Doug started his professional career in the mortgage industry at Mortech more than 10 years ago. He has operated as a national sales executive and vice president of sales during his tenure with the company. Overseeing business development for the Mortech brand, he creates new business initiatives with other leading mortgage and technology companies, manages enhancements to Mortech’s current product line, and closely directs the internal business operations. His commitment to the industry is fueled by an opportunity for innovative technology to change the way mortgage lenders do business.

Justin Glass Vice President, Business Development & Training United Wholesale Mortgage l Troy, Mich. Justin Glass is responsible for overseeing all of United Wholesale Mortgage’s (UWM) mortgage lending and technology training for the entire account executive sales team at the company. He has been instrumental in driving UWM’s training functions and the utilization of innovative sales-centric tools for use by its internal staff, which has played a significant role in UWM being catapulted to the number four wholesale lender in the U.S. Justin spearheads a variety of different training programs at UWM. He has also succeeded in scouting and recruiting top-tier AEs in a very competitive Michigan job market that includes the likes of Flagstar and Quicken Loans. He is an invaluable asset to UWM and is very passionate about helping to drive the company’s continued growth and success. Justin has been with UWM since 2005.

Amy Goldstein Senior Broker BMIC Mortgage Inc. l Rockville, Md. Amy Goldstein is a long-time mortgage broker whose reputation for excellence supersedes itself. Having worked at BMIC Mortgage since 2001, Amy quickly grew her client base helping BMIC become one of the best known mortgage companies in the D.C. Metro area. This is Amy’s second year being recognized as one of National Mortgage Professional Magazine’s “Top 40 Under 40 Most Influential Mortgage Professionals,” as well as “Top 25 Most Connected Mortgage Professionals,” as well as having contributed to NMP’s October 2013 issue, authoring an article titled, “Bridging the Gap.”

Caleb Guillory President TagQuest Inc. l Medford, Ore. Caleb Guillory is the president of TagQuest, a full-service marketing firm dedicated to assisting mortgage companies with their direct marketing, advertising and branding needs. TagQuest works with its clients to overcome the many challenges associated with identifying, acquiring, and retaining customers. Caleb has more than 10 years of experience in sales, marketing, real estate investing and business organization. In 2006 when he started with TagQuest, the company was still in its infancy. Caleb has been instrumental in assisting the company with its growth to the multimillion dollar corporation it is today. He co-founded the first annual Rogue Valley Summit in Medford, Ore., has conducted various Webinars on subjects such as compliance and mortgage marketing, and has published a number of articles on sales and marketing.

Andy W. Harris President Vantage Mortgage Group Inc. l Lake Oswego, Ore. As one of the highest-rated mortgage professionals in the Northwest, Andy W. Harris is a nationally-recognized mortgage broker serving Oregon and Washington consumers for over a decade. Andy is president and owner of Vantage Mortgage Group Inc. in Lake Oswego, Ore. He is very passionate about the industry and remains very active through his candid articles featured in various magazines discussing industry trends and government affairs. In 2013, Andy created the Web site, to call for equal and fair treatment to consumers and small business in the primary mortgage market. Andy currently serves as treasurer on the executive board with NAMB—The Association of Mortgage Professionals and is the chair of the NAMB Bylaws and Finance Committees.

John H.P. Hudson Vice President of Regulatory Affairs Premier Nationwide Lending l Flower Mound, Texas John H.P. Hudson became a residential loan officer in 1998, and has spent the past eight years serving mortgage brokers and loan originators as area manager in San Antonio and southern Texas with Premier Nationwide Lending, a Texasbased mortgage bank. John was recently promoted to the position of VP of regulatory affairs. John served as the 2012-2013 Government Affairs Chair for NAMB—The Association of Mortgage Professionals, working with lobbyists, regulators, legislators and other trade associations to shape the future of the mortgage market. He now serves as NAMB’s Communications Chair. John was recently named one of the “Top 25 Most Connected Mortgage Professionals” by National Mortgage Professional Magazine.

Tom Hurst President StreetLinks Lender Solutions l Milwaukee, Wis. As an original founder of StreetLinks, Tom Hurst has played a pivotal role in the company’s growth and success since leaving the aviation industry in 2002. Tom’s passion and unwavering dedication to quality, service and innovation are contagious, and have helped to propel both StreetLinks and the mortgage industry forward for over 10 years. Tom’s transition from senior vice president, to executive vice president, to president of StreetLinks has allowed him to expand his focus and become an even more integral part of StreetLinks’ growth, product development and commitment to pushing the status quo.

Chad Jampedro President GSF Mortgage Corporation l Brookfield, Wis. Chad Jampedro is GSF Mortgage’s current president and takes an active role in his organization. His tireless navigating has helped GSF weather storms and continues to grow the firm in many ways, including adopting new technologies to stay on top of industry compliance changes, streamlining workflows to become more efficient and enabling the sales force to take advantage of new ways to create business. Chad’s focus has earned GSF a Five-Star Zillow status, a current status as a Platinum Lender for USDA, a Legend of Lending title from National Mortgage Professional Magazine, and gained GSF a spot on Inc. Magazine’s “Hire Power” list as a company that helps create new jobs in our communities. He is excited to begin his second year as GSF’s president and looks forward to continued future growth.

Dan Keller

Lisa Lund

Managing Partner Hammerhouse LLC l Mission Viejo, Calif. Eric Petersen is a founding member and managing partner at Hammerhouse LLC, an expanding national recruiting and strategic growth firm for the financial services industry with mortgage sales and leadership placement at its core. Eric has been working in the mortgage recruiting space for 12 years, with a focus on helping retail, wholesale and correspondent lenders infill existing offices with quality loan officers/teams, and expand strategically into key markets throughout the U.S. Eric believes in building long-term relationships with like-minded and value orientated business professionals.


Eric Petersen


President Neighborhood Loans l Lombard, Ill. Reno Manuele is passionate about helping individuals and families understand the mortgage process, find, qualify for, and own the home of their dreams. He purchased Neighborhood Loans in 2009 after working almost a decade in mortgage lending. They built a reputation of providing competitive rates and costs with a strong focus on honest and ethical business practices. Since then, Neighborhood Loans has originated and closed $1 billion in residential mortgages. He has written numerous articles and has been published professionally. Reno was also selected for the “Who’s Who” of Chicago Agent Magazine in 2012 and for the “40 Most Influential Mortgage Professionals Under 40” by National Mortgage Professional Magazine in 2012.

CEO First Guaranty Mortgage Company Tysons Corner, Va. Andrew Peters has been with First Guaranty Mortgage Company (FGMC) for more than 16 years, most recently overseeing the company’s most profitable year in its existence. During his time as CEO, he spearheaded the launch of successful capital markets, correspondent lending and warehouse lending platforms, which have positioned the company for significant growth in a changing market. Prior to serving as CEO, he managed the company’s successful wholesale lending platform. In that role, he piloted key growth initiatives for the company, including Rebuild the Dream, a 203k-focused initiative. FGMC is a direct issuer for both GNMA and FNMA, and is a two-time recipient of the Savvy Tech Lender award for its commitment to providing a faster, easier-to-use process for brokers and TPOs.


Reno Manuele

Andrew Peters


Digital Engineer Best Rate Referrals l Las Vegas Mark Madsen is a Las Vegas-based mortgage and real estate professional with a career that began as a lender in 1999. Mark manages a portfolio of over 31,00 consumer focused mortgage and real estate niche Web sites for Best Rate Referrals, a direct marketing firm for the mortgage industry. Mark specializes in creating content-rich online resources that educate buyers and borrowers about the housing market. Primarily focusing on mortgage programs that promote community reinvestment, Mark has been publishing articles online about homeownership education since 2006. His network of high traffic industry sites continue to generate more than 90 percent of the new purchase and investor business for his team of real estate agents.

CEO Equity Loans l Atlanta Kunjan “KP” Patel is chief executive officer of Equity Loans, overseeing the company’s finance and regulatory affairs. Also a founder of Equity Loans, KP was a key architect in the strategic planning to develop the profitable mortgage banking operation. KP is a highly successful individual and branch operations producer who has more than 20 years of experience in the banking and mortgage industry, holding various titles including loan officer, branch manager and executive. KP began his mortgage career as a loan officer for NovaStar Home Mortgage in Maryland.


Mark Madsen

KP Patel


President Lund Mortgage Team Inc. l Glendale, Ariz. Lisa Lund is president of Lund Mortgage Team Inc., a mortgage brokerage in Glendale, Ariz. Lisa has worked in the mortgage industry for 16-plus years, and opened Lund Mortgage in February of 2009. She was the 2012 president of the Arizona Association of Mortgage Professionals Central Chapter, and is currently vice president of the statewide association. She has lobbied in Washington, D.C. for mortgage broker laws, chaired state trade shows, scheduled speakers for AZAMP’s monthly luncheons and organized continuing education for licensed loan officers and mortgage brokers. Lisa enjoys giving back to the community and has worked with the ALS Association and the Southwest Autism Research and Resource Center. Lisa is married with three children and currently resides in Glendale.

Area Sales Manager First California Mortgage Company l Las Vegas Shelly Panzarella is an area sales manager for First California Mortgage Nevada, with branches in Las Vegas and Henderson, Nev. She began her 15-year career as an assistant to a branch manager and she quickly went on her own to originate loans. She began as a loan officer for KB Mortgage Company and grew into a manager, leading her team as one of the largest divisions in the company. Today, she leads a team of 25 individuals which encompasses the sales and operations team in Las Vegas. Their team will close out 2013 with more than 650 closings and will be the number one area at First California Mortgage. Shelly was the 2012 Chapter President for the Asian Real Estate Association of America (AREAA) and currently sits on the executive board as an advisor.


Mortgage Advisor Mortgage Advisory Group l Mill Creek, Wash. Dan Keller is a Seattle area mortgage loan officer whose financial commentary has been featured nationally on FOX Business,, and MSN Real Estate. Dan is a nextgeneration mortgage advisor, and a disciple of Todd Duncan and Dave Ramsey, who started in the mortgage industry in 2008. In four short years, Dan’s used his time in the industry to learn the trade and understand how tomorrow’s borrowers are searching for information and solutions. In 2011, Dan was named one of the “Top 40 Mortgage Professional Under 40” by National Mortgage Professional Magazine, and once again in 2013, recognized as one of the “Top 25 Most Connected Mortgage Professionals.” Dan publishes a weekly video program for real estate agents called, “Coffee With Keller.”

Shelly Panzarella








Robert Pieklo Partner, Senior Vice President of Secondary Marketing American Financial Resources Inc. Parsippany, N.J. Senior Vice President of Secondary Marketing and Partner Rob Pieklo entered the industry in 2002 as a loan originator, and after a series of promotions within the organization, including retail sales manager and vice president of retail originations. His current duties include managing AFR’s multibillion dollar servicing portfolio and establishing/maintaining strong investor relationships with brokers/dealers, the GSEs and GNMA. Robert oversees the warehouse facilities and works directly with the CEO and CFO on all corporate endeavors. Rob’s business vision was instrumental in the formation of eLEND, a consumer-direct division geared toward an online purchase-based model.

Steve Ribultan Director of Business Development DocMagic Inc. l Torrance, Calif. Steve Ribultan is director of business development at DocMagic Inc. Steve’s responsibilities range from introducing technology and eSign solutions that tackle new compliance issues for lenders, to managing the quality and care of new and existing strategic partnerships. Over the past 11 years, Steve has worked for several leading mortgage technology companies. Steve has been a member of the DocMagic family for nearly six years. Previously, Steve worked at OpenClose, Commerce Velocity and Portellus.

David B. Ricketts Area Manager Bank of England d/b/a ENG Lending l Denver David B. Ricketts has been in the mortgage/finance industry since 1999, a career that started with Norwest Financial upon conclusion of attaining his management degree at Indiana University Bloomington. Currently an area manager for Bank of England, David has quickly ascended to one of the firm’s top area managers in the country. David was recognized in 2011 by National Mortgage Professional Magazine’s “Next 40 Mortgage Professionals to Watch” and then recognized in 2012 and 2013 as one of “The 40 Most Influential Mortgage Professionals.” David has continued his pursuit to serve the Rocky Mountain Region with efficient, quality standards.

Rene Rodriguez CEO/Founder/Keynote Speaker l Minneapolis Rene Rodriguez is the chief executive officer of Volentum and founder of, a mortgage specific loan officer review site dedicated to restoring trust and credibility, one verified review at a time. A captivating, high-energy speaker, Rene is in high demand for annual events, conventions and keynotes speeches. He has been a featured speaker at the Mastery Business Plan in 2008, 2009 and 2011 Conferences in Las Vegas, has emceed for all four Mortgage Revolution events, and is a frequent contributor and author to industry publications, including National Mortgage Professional Magazine.

Evangeline Scott Certified Mortgage Planner Big Valley Mortgage l Folsom, Calif. Evangeline Scott began her lending career in the late 1990s with The Money Store. When The Money Store closed, she was recruited into the financial planning field. She had the opportunity to work with a top producing real estate firm in California for about two years and obtained her broker’s license. As a professed numbers geek, she realized her love for the industry was in lending and joined Summit Funding, where she was consistently one of their top producers, and numerous times, their number one producer nationwide. She was with Summit Funding for approximately seven years when she made the transition to Big Valley Mortgage, under American Pacific Mortgage, in September of 2011, where she has been their top producer.

Shashank Shekhar CEO Arcus Lending l San Jose, Calif. After starting his business in possibly the worst year for financial markets (2008), Shashank Shekhar has grown his business by 1,400 percent in just five years. This dramatic growth has been achieved because of unrelenting focus on education. An best-selling author and national speaker, Shashank is also the host of the radio show, “Mortgage Matters.” He has been featured on Yahoo! News, ABC, CBS, FOX, NBC, USA Today and several other media for his expertise. Shashank is the founder and chief executive officer of Arcus Lending, a San Jose, Calif.-based mortgage lender.

Josh Sigman Vice President and Senior Loan Consultant Legacy Mutual Mortgage l San Antonio, TX Josh Sigman is vice president and senior loan consultant for Legacy Mutual Mortgage in San Antonio, Texas. After graduating from Trinity University in San Antonio, he spent two years in insurance before joining the mortgage banker community. Josh has been recognized by the San Antonio Business Journal as a top producer for most of his career and as the number one loan officer in the city for the last three years in a row. Josh has a strong belief in mentorship and coaching and is currently serving as the senior coach for THE CORE Training, a national realtor and lender coaching program. He is a national public speaker who enjoys helping companies improve results and closing skills of front line producers.

Adam P. Smith President The Colorado Real Estate Finance Group Inc. Denver Adam P. Smith is president of The Colorado Real Estate Finance Group Inc., a commercial and residential real estate finance firm. During his career, he has helped thousands of clients, both individuals and corporations, in their goals regarding real estate finance. He played an integral part in the Colorado mortgage licensing process, serving as both lobbyist and counsel at Business Affairs Committee hearings at the State House of Representatives in 2006 and 2007. Adam lectures regularly on contact management and marketing to colleagues in the real estate, mortgage, insurance and financial fields. He has taught classes for several of the country’s largest real estate companies, countless title companies, and many regional real estate boards.

Ericka Smith Marketing Coordinator Inlanta Mortgage l Brookfield, Wis. Ericka Smith is a member of the marketing team at Inlanta Mortgage, providing marketing consulting services to more than 30 mortgage branch offices and more than 100 mortgage loan officers in 15 states. In addition to branch support, Ericka supports the business development team’s branch recruiting efforts and is helping to build better awareness of Inlanta’s growing partner platform and strategic alliances division. Smith has an MBA, and serves as a board member on her local Habitat for Humanity affiliate.

VP of Secondary Marketing/Capital Markets matchbox LLC l New York, N.Y. Jonathan Yosha graduated with a finance degree from the McCombs School of Business at the University of Texas. After spending four years running the secondary marketing and capital markets department for a $1 billion-plus lender, he became vice president at matchbox LLC. He is currently responsible for managing matchbox’s secondary and capital markets division. Over the past decade, Jonathan has worked with dozens of mortgage and community bankers to increase their gain on sale through operational, hedging, and lock desk efficiencies along with proactive margin and pipeline management and oversight. He continues to actively learn and proactively advise and translate industry changes, such as loan officer compensation and compare ratio analytics to clients across the country.


Jonathan Yosha


Utah Area Manager Bank of England d/b/a ENG Lending l Sandy, Utah John G. Stevens is the Utah area manager for the Bank of England d/b/a ENG Lending. John is an Honorary Colonel with the Pleasant Grove, Utah Police Department and serves as vice chair of the Utah County Planning Commission, as well as the chair for the Pleasant Grove Planning Commission. John is an active member in both NAMB and its state affiliate, the Utah Association of Mortgage Professionals UAMP). John serves on the board of directors for both NAMB and the UAMP, and is currently the president of NAMB+, and served in 2013 as the NAMB PAC chair, as well as chair of the NAMB’s annual conference, NAMB National. He recently received the NAMB President’s Award of Merit for 2013 in recognition of his outstanding contributions to the association.

President & Director Crescent Mortgage Company l Atlanta Fowler Williams, CMB joined Crescent Mortgage Company in 1999 as an account executive and has served as national sales manager, executive vice president over sales and operations, and now is the president of Crescent Mortgage Company and a director on the company’s board. He speaks regularly to financial institutions and their respective organizations on compliance, regulatory changes in mortgage lending, and assessing their overall mortgage operations. He serves on the Presidents’ Advisory Board as well as the Community Bank Advisory Board and Membership Committee for the National Mortgage Bankers Association, as a governor for the Mortgage Bankers Association of Georgia, and has been named to the Regional Customer Advisory Board of Freddie Mac.


John G. Stevens

Fowler Williams


COO Vantage Production LLC l Holmdel, N.J. Ryan Stillwell is the chief operating officer of Vantage Production LLC. Vantage currently aids mortgage originators with multiple product offerings, including Mortgage Market Guide, Loan Toolbox, Platinum Marketing and Borrow Smart Analysis. Ryan graduated from Rutgers University in 1998 with a BA in management and labor relations, and immediately began his lending career as a credit manager for Norwest Financial and continued to work with Norwest through their merger with Wells Fargo, where he served as branch manager. After a brief hiatus from lending, Ryan returned to the residential arena and worked as a successful loan originator for GMAC and CTX Mortgage. Ryan went on to serve in multiple capacities for Vantage Production, including VP of operations and VP of operations and sales.

Mortgage Loan Originator Residential Home Funding l White Plains, N.Y. Jeff Van Note’s recruiting focuses on creating career loan originators who learn the business from the ground up right from college. His team of only seven loan officers will be closing $100 million in volume within the next year. To share his success with those less fortunate, Jeff opened a program called “Mortgages for Meals.” Under this program, he is personally responsible for providing more than 4,000 meals each month in food banks around the country.


Ryan Stillwell

Jeff Van Note


Vice President Fidelity Bank l Edina, Minn. Since joining Fidelity Bank in 2003, Kelli Starkey has become a key player in the Bank’s niche of providing warehouse funding to mortgage firms in the Midwest. In addition to managing some of Fidelity’s largest mortgage banking clients, Kelli’s insatiable appetite to learn and strong business acumen have led to integral roles in product development, legal documentation and market expansion of the bank’s mortgage warehouse business. Kelli was born and raised in West Central Minnesota, and graduated summa cum laude from Minnesota State University in Moorhead with degrees in business economics and finance.

Sales Training & Development Manager AmeriSave Mortgage Corporation l Atlanta Jessica Truitt attended Savannah State University and graduated in 2003 with a bachelor’s degree in business administration with a concentration in marketing. Her professional career began as a loan officer at AmeriSave in 2005, where she has maintained the philosophy of offering top-notch customer service. Her success as a loan officer led her to her current position as sales training and development manager in 2011. In 2013, Jessica designed the Amerisave University, a program that trained 35 recent college graduates for a career as loan originators and prepared them to pass the National Mortgage Lending Exam (NMLS). Jessica conducts weekly training sessions with the retail sales staff to discuss company trends, industry trends, selling techniques, and what it takes to remain successful in an ever-changing industry.


Kelli Starkey

Jessica Truitt

The Next 40 Mortgage Professionals to Watch …








Due to the numerous submissions we received for our “40 Under 40” list, there are those who are making serious waves in the industry who could not be overlooked. They, like those on the “40 Under 40” list are the leaders of this industry for years to come, so keep an eye out as well for the following innovators and originators as they continue to shape the industry:

Jeffrey Angelucci

Senior Loan Officer

Cardinal Financial Company, Warminster, Pa.

Jenay Bowen

Loan Officer

Cari Burris

Owner & Director of Operations

Nationwide Appraisal Network, Oldsmar, Fla.

Brian Call


Rubicon Mortgage Advisors LLC, Edina, Minn.

Casey Crawford

President & CEO

Gwen Creel

Regional Sales Manager, Wholesale Lending Division

Josh Fitzwater

Executive Vice President

Arturo Garcia


Tony Garrido


Justin T. Girolimon

CFP & Senior Vice President

Village Mortgage Company, Avon, Conn.

Chris Hambor

Tax Partner

Richey May & Co Inc., Englewood, Colo.

Shaun Hamman

Senior Vice President, Residential Mortgage Division

David Hansel


Britt Haven

Manager of Client Relationships and Implementation

Joe Herrell

Senior Loan Officer

Matt Jolivette

Vice President

Dan Jones

Vice President, Technology

Anthony Latham


Angie Lee

Senior Vice President, Corporate Communications

Danny Marogy

Team Leader & Senior Account Executive

Jared Martin


Cari McCue

EVP & Chief Administrative Officer

Steven Meyer


Jonas Moe

Vice President of Product Strategy

James Morin

Senior Vice President

Shawn Murphy

Executive Vice President

Randy Oliverson

Senior Vice President

Jeff Onofrio

Director of Renovation Lending

Len Patton

President of Correspondent Lending

Sam Perez


Derrick Polder

Production Manager/Senior Loan Officer

Brandon Poulos


Patrick Scott

Senior Account Executive

Michael Shotnik

Branch Manager

Matthew Skas

Loan Officer

Axhira Sullivan

Founder & CEO

Brian Swanson

EVP, Chief Lending Officer

Tanya Themistokleous

Chief Marketing Officer

Bobby Tsioutas

Director of Operations

Jeremiah M. Wean

Compliance Officer

Service First Mortgage, Plano, Texas

Movement Mortgage, Charlotte, N.C. Michigan Mutual, Kansas City, Mo. First Option Mortgage, Atlanta Platinum Data Solutions, Aliso Viejo, Calif. United America Mortgage Funding, Tampa, Fla.

eLend, Parsippany, N.J. Alpha Funding Solutions LLC, Lakehurst, N.J. Virpack, Washington, D.C. NOVA Home Loans, Scottsdale, Ariz. Associated Mortgage Group Inc., Portland, Ore. Churchill Mortgage, Brentwood, Tenn. National Title Solutions Inc., Woodridge, Ill. MCS Mortgage, New York, N.Y. United Wholesale Mortgage, Troy, Mich. Keystone Funding, Media, Pa. Guardian Mortgage Company Inc., Plano, Texas Advisors Mortgage Group LLC, Ocean, N.J. Ellie Mae, Pleasanton, Calif. Norcom Mortgage, Avon, Conn. ValuAmerica, Pittsburgh Green River Capital, Salt Lake City, Utah AnnieMac Home Mortgage, Mount Laurel, N.J. PHH Mortgage, Mount Laurel, N.J. Silvercreek Finance, Chicago NOVA Home Loans, Tucson, Ariz. Neighborhood Loans, Lombard, Ill. a la mode, Mercury Network, Oklahoma City, Okla. Colorado Mortgage, Centennial, Colo. Peoples Home Equity, Oak Brook Terrace, Ill. Source Appraisal Management LLC, Safety Harbor, Fla. BofI Federal Bank, San Diego, Calif. Closeline Settlements, Rockville, Md. GFI Mortgage Bankers Inc., New York, N.Y. Stonegate Mortgage Corporation, Indianapolis, Ind.

new to market

continued from page 52

mortgage loan companies throughout Canada. The first Canadian company to partner with EMALLC is Canada Mortgage Direct (CMD) out of Calgary, Alberta. Easy Mortgage Apps mobile apps are engineered and designed to streamline the process of obtaining a home loan, featuring real-time loan status updates, a communication channel, and the ability to upload important loan documents to the lender. Easy Mortgage Apps LLC partnered with Canada Mortgage Direct (CMD) as they understand the importance of utilizing the latest advances in technology to offer their clients and realtors a truly enhanced experience. CMD’s native app, developed in partnership with EMALLC, offers clients and real estate agent partners the ability to access their loan information 24 hours a day, seven days a week from any location. CMD clients will be able to securely capture, upload and view important loan documentation with the touch of a finger. The transparent nature of the secure communication and data share improve time to close and allow for a more fluid process overall. “We appreciate the opportunity to work with forward thinking companies like Canada Mortgage Direct,” said EMALLC Spokesperson Michael Kelleher. “Early adapters to shifts within society are able to offer an unparalleled customer experience. In addition, we believe this is


are you hiring

coming in january 2014

Your turn National Mortgage Professional Magazine invites you to submit any information promoting new “niche” loan programs, new products or any other announcement related to the introduction of a new program, to the attention of: New to Market column Phone #: (516) 409-5555 E-mail: Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

73 73

heard on the street

an opportune moment to move into the Canadian market with our product. Our research shows lenders and their customers across Canada experience the same issues facing U.S. companies.” The new app is free and available for download at either the iTunes App Store for iPhone or Google Play for Droid smart phones. “CMD partnered with Easy Mortgage Apps because we immediately recognized that the application they have created will simplify and enhance the customer experience for both our customers and business partners,” said Tim Lacroix, director of Canada Mortgage Direct. “We’re extremely excited to begin our partnership with Easy Mortgage Apps and share their product across our entire organization.”

continued from page 45

l ReverseVision Inc. has announced that Rob Katz has joined the company as executive vice president of sales.

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

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

We’re compiling a list of companies who are actively hiring for National Mortgage Professional Magazine's “Who’s Hiring Report” feature, slated to appear in our January 2014 edition. If your company is hiring, we want to include your company name and website in our 2014 Who’s Hiring Report. It’s really simple. Just go to and complete the form. There is no charge for this simple listing. If you are aggressively hiring on a regional or national level, we also have some additional opportunities to help you. Call (516) 409-5555 ext. 4 for details.

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data to the attention of:




Are you a mortgage origination professional? Are you exceptional? Is your company? Gateway Mortgage Group has immediate opportunities in 16 states. Our origination teams enjoy: • A local branch- and origination-centric model • The perfect balance of corporate support • Competitive compensation plans And best of all, our entire platform is built with one thing in mind— helping local originators take their success to the next level. Visit our careers page on LinkedIn. Follow us. Or call us at 888.360.3773. And we will show you YOUR Gateway to a Great Way of Life™! Gateway Mortgage Group, LLC is an equal opportunity employer. NMLS 7233 HQ: 6910 E. 14th Street, Tulsa, OK 74112



StreetLinks Lender Solutions (800) 778-4920

It’s Time…to join one of the Top Mortgage Bankers as Branch Managers or Loan Officer NOW! Why? You Have Our Guarantee!

DECEMBER 2013 n National Mortgage Professional Magazine n

StreetLinks Lender Solutions provides an innovative and comprehensive suite of valuation and service solutions used by lenders, servicers and appraisers nationwide to improve everyday business operations.

The Bond Exchange (501) 224-8895 LOWEST-COST STATE MORTGAGE LICENSE BONDS Support NAMB in supporting you!

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

Online surety bond applications, instant underwriting approval, and credit card payments administered through The Bond Exchange NAMB's exclusive partner provider for state license surety bonds. The Bond Exchange is a national surety agency specializing in servicing mortgage license bonds for thousands of mortgage professionals across the country. Low prices and fantastic service. You really can have them both at the same time!


Our Guarantee We will not leave you stranded and alone on an island. Our seasoned operational rollout team will ensure you a smooth transition to our branch platform. Our RHF University will train everyone on your staff. We stand by our reputation of providing ongoing support and communication to every branch , every day. You’re our #1 Priority! We are a Full-Service Banker, a Direct Endorsed FHA and Fannie Lender. We are a TRUE 48 hours in Underwriting and Closing. We will close your loans on time. We will give the best service to you and your clients We will give you full access to all marketing and development services from loan origination to hiring to specialty products. We are the Leader in marketing, technology and strategic business partnerships. We assist our Branch Managers in hiring, training and motivating their staff. We will help you build your team. CALL NOW 866-319-4442 or EMAIL or VISIT


Hometown Lenders (888) 606-8066 "WE HELP YOU GROW YOUR BRANCH AND SKYROCKET YOUR INCOME!" • • • • • • • • • •

We fund your start-up costs Corporate Recruiting Team that puts producers in your branch Direct Connection with the branch managers who are crushing it Proven "Marketing Maps" that will double your business "Next Level Support" to help keep you growing Get a BPS payback from our volume incentive, or build a margin for yourself into your rate! Full capability to control your loan officers' pricing. Create, Customize and Optimize your branch's compensation plan. Full Eagle Lender and In-House Underwriting, Closing and Fundings Currently looking for high-quality producers in: TX, CO, NC, SC, NJ, OH, GA, AL, TN, FL, MS, LA, KY

EMERALD CREEK CAPITAL Gary Baxter, Associate Ph: 646-237-2561 COMMERCIAL REAL ESTATE FINANCING EMERALD CREEK CAPITAL, is a direct bridge lender, providing shortterm loans secured by commercial real estate nationwide. Our loans are fast, flexible and catered towards the specific requirements of each client. At Emerald Creek we recognize that many borrowers are in need of immediate financing. Our goal is to provide you with a flexible loan solution in the time frame you’re looking for. Opportunities for financing include but not limited to: • Office buildings -Apartment Complexes -Mixed use -Hospitality • Warehouse facilities -Light industrial space -Land plots –Retail • Residential Investment -Multi-Family/Owner Occupied Facilities Lending Parameters: • 1-3 year terms – Up to 65% LTV - $1-$25 Million - Close within 1-2 weeks One Penn Plaza – Suite 3406 | New York | NY | 10119


BROKERS COMPLIANCE GROUP 167 West Hudson Street – Suite 200 Long Beach | NY | 11561 Division of Lenders Compliance Group, BCG is the first and only mortgage risk management firm in the U.S. devoted to supporting the unique compliance needs of residential mortgage brokers. Leveling the Playing Field for Mortgage Brokers Low Cost Monthly Membership Includes: • Free Weekly Hotline • Access to Subject Matter Experts • Policies and Procedures • Webinars *Special Pricing* • Quality Control • Exam Readiness • Licensing • Legal Reviews


AllRegs—Your Source for Fast, Reliable Answers 2600 Eagan Woods Drive, Suite 220 Eagan, MN 55121 (800) 848-4904 AllRegs offers mortgage professionals fast, reliable answers needed to conduct their day-to-day business. From research and reference to business intelligence, from education and training to professional services, we are your definitive source for mortgage industry information. With tools for originators like NMLSapproved CE training, regulatory content libraries for compliance staff, guidelines for underwriters, policy manuals for operations, and business intelligence for business development – we have you covered as the leading information provider for the mortgage industry. If you have a specific need, our professional services team can help with thing like policy, procedure or guideline development, as well as custom training or publishing resources. Contact us to learn how we can help you – visit today.


TagQuest 888-717-8980 TagQuest is a full service marketing firm created specifically for the ever changing mortgage business. We have tested and proven campaigns for FHA -VA - HARP - CONVENTIONAL loan types. TagQuest knows what it takes to generate quality leads whether through direct mail marketing, telemarketing, internet leads, data lists, tracking systems, or any combination thereof. TagQuest will brand your company, prepare targeted marketing campaigns that generate interest in your company, and most importantly, show you how to turn sales leads into repeat customers.


Clix Mg 1756 Hanshaw Road • Ithaca, NY 14850 Office: 727.474.1442

Mortgage Seminars 248-403-8181 Cost: Only $19.95 per month per physical office location Jeff Mifsud, a former FHA Direct Endorsed Underwriter trained by HUD and an FHA Originator for over 15 years, is publisher of The FHA Originator, a monthly marketing newsletter which gives you… • • • •

FHA guideline news to keep you updated FHA Marketing tips and downloads that are easily customized Personal development tips to help you develop your character Full access to all previous FHA marketing downloads!

Titan List & Mailing Services, Inc. 1020 NW 6th St Suite D, Deerfield Beach, FL. 33442 (800) 544-8060 Titan List and Mailing Services, Inc. is a direct marketing agency that offers a complete range of advertising and design services. The firm specializes in data lists (mail/phone), printing, direct mail, graphic and website design as well as internet and SEO marketing. Starting in 1998, the company has, since then employed highly skilled individuals who have considerable experience regarding marketing trends. The company manages the complete in-house campaign themselves including Design, Data Lists, Printing, Postage, and Mailing.

No contracts so sign up today and give yourself the tools to brand yourself as The FHA Expert in your marketplace. Cost: Only $19.95 per month per physical office location.


LENDERS COMPLIANCE GROUP 167 West Hudson Street - Suite 200 Long Beach | NY | 11561 | (516) 442-3456 888-695-3239

The first full-service, mortgage risk management firm in the country, specializing exclusively in mortgage compliance. Pioneers in outsourcing solutions for mortgage compliance. Our Compliance Team Will: Leverage your existing employees. Improve your productivity. Collaborate on projects. Make the most of your current technology. Bring innovation to your company. Be a strong cultural fit. Free you to focus on your core competencies. Give you access to world-class expertise. Lower your total operational costs.

Credit Plus, Inc. 31550 Winterplace Parkway, Salisbury, MD 21804 800-258-3488

You want to close more loans. We can help you do it. Accurate information is the basis of smart lending decisions. Credit Plus, Inc. provides that – and more. We’re the company mortgage professionals trust for intelligent insight, smart information that enables them to mitigate risk and build their business. Our information services line is more than 160 products strong. Our expertise in the mortgage industry enables us to quickly assess current and future needs, and provide new solutions for a rapidly changing environment. We move mortgage professionals forward.

Mortgage Internet Leads $9.99. Find out why the nation's top lenders partner with MortgageLeads.ORG. Target by: • Refinance • Purchase • HARP • FHA • VA • Reverse. Close more loans today 888-695-3239 or click

n National Mortgage Professional Magazine n DECEMBER 2013



Clix Mg, provides the mortgage industry with compliant marketing solutions. We assist mortgage companies to balance the competing needs of effective marketing campaigns and compliance. Our management team includes attorneys, software developers and marketers, combining more than 50 years experience in the industry. During the past year Clix Mg has been developing the LCP (“Lender Compliance Portal”). LCP is a web based platform that provides mortgage companies the ability to track, control, oversee and approve every marketing piece, material, campaign or program according to their own guidelines in an easy user friendly and cost effective manner. LCP provides reporting capability for internal as well as State and Federal audits.




Gets you more referrals, inquiries, and closings! Count on Calyx: We’re ready to help you do more 800.362.2599 Calyx Software is the leading provider of affordable mortgage solutions for banks, credit unions, mortgage bankers and brokers. We design products that enable smooth bi-directional flow of data from beginning to end. Our solid, yet flexible, LOS gives you: • • • • • •

Underwriting and secondary marketing Strong security Remote access Ubiquitous productivity with optional mobile apps Configurable business rules engine for workflow and compliance Convenient interfaces with over 200 vendors providing PPE, closing documents, compliance services and more


hat’s what mortgage loan

Want more loans?

Warren J. Rosaluk 800.795.2150

Lenders can take advantage of Calyx’s fully integrated automated underwriting and pricing products to help them determine loan eligibility, pricing against investor or FHA guidelines while staying compliant in 2014.



Veros Real Estate Solutions "Innovating Mortgage Technology" | (866) 458.3767 Follow us on Twitter at @verosRES Veros has been an industry leader in real estate collateral valuation management & decision analytics for more than a decade. We offer a wide variety of software solutions and tools to help you manage collateral valuation from the beginning of the mortgage chain and throughout the life of the loan. Contact Veros today to learn about: • Sapphire – the most comprehensive valuation management platform • VeroVALUE – the industry’s leading national AVM • VeroSCORE – automated appraisal scoring quality control tool • ComplianceTRACK – independently designed AVM cascade • VeroFORECAST - most advanced residential market forecast Email Veros at to learn more or to schedule your complimentary product demonstration.


“The year I started their Lender Letter and Week e klly Economic Update, my business the eW DOUBLED. Thank you, Right Side Marketing, for your excellent products and service.�

DECEMBER 2013 n National Mortgage Professional Magazine n


Steve Peterson Sierra Pacific Mortgage

Why should every mortgage broker consider obtaining a warehouse line from Goldome Financial? Go to our website Press “Click Here� and we will tell you

Creating Creating inf informative ormative and wellwellwritt written en prin printt and e e-newsletters -ne ne ewsletters ffor or mor tgage pr offession essionals sinc e 1985. mortgage professionals since

or call us at 469-444-9800

SSee ee for yyourself ourself ightsidemarke 800.456.4395 MARKETING SERVICES


Contac t: Ji m M elc hi or, VP of S ales

8520 Macon Rd. Ste 2 Cordova, TN 38018 | 615-477-7118 MCMF developed My Guide, a Premier Credit & Financial Education Magazine that you can customize with your LOGO and Ad Pages to feature your organization as well as provide your borrowers a go-to-guide for credit and financial resources, empowering them to make the most informed financial decisions. This 16 page, full color, quarterly publication, provides financial literacy tools in a concise, unbiased, easy to understand format.


973-646-3067 AFR Wholesale ranked #1 with the most Sponsor Originated FHA 203(k) closed loans.*

CLOSE MORE LOANS W ITH: Maaverick Funding Corp. is a direct mortgage lender licensed in 30 states across the country. Haavving obttained FHA, VA A, USDA and Fannie Mae appro ovals, Maaverick is growing and seeking top talent for their expanding nationwide footprint.

My Guide is offered in traditional magazine print, as well as our newest electronic flipbook version, bringing “flipping through a magazine� experience right to your desktop

Phone: 855.422.5917 ny NJ NJ,, 07054 9 Entin Rd., Parsippany Visit us at www w.Ma .

Contact me today to learn more about this one of a kind opportunity!

Maverick Fundingg Corp. NMLS# 7706

FREE PROCESSING - NO LENDER FEES ** • Co nve nt i o n a l • U S DA • M a n ufa c t ure d H o usi n g •One -Time Close Construc tion • Fre d d i e M a c O p e n Acce s s a n d Fa n n i e M a e D U R P • VA • FH A, FH A 203( k ) a n d 203( h ) R e h a b i l i t at i o n l o a n s Lender NMLS:2826 - 9 Sylvan Way, Parsippany - NJ, 07054 - *See website for details: This is not an adver tisement ex tended to the consumer as defined by Sec tion 226.2 of Regulation Z. Equal Housing Lender. Equal Opportunity Employer. **No Lender fees by AFR. Third party fees may apply. AB120313



Close Jumbo Loans Others Cannot Service more jumbo borrowers with New Penn’s Jumbo Advantage portfolio product 877-930-PENN

HomeBridge 5 Park Plaza, 10th Floor Irvine, CA 92614

Jumbo Advantage Highlights: • Market leading jumbo rates • Loan amounts up to $2 million • Cash out up to $400,000 • FICO down to 680 • Expanded loan-to-value (LTV) up to 85% (no MI) • Expanded debt-to-income ratio (DTI) up to 50%

HomeBridge is a national wholesale lender offering both conventional and government products. We are committed to providing the highest value to our clients through competitive pricing, unique product offerings, superior customer service, and state-of-the-art technology. Currently expanding and hiring experienced Wholesale Account Executives nationwide. Please send your resume to Building bridges to success, one loan at a time.

The Direct Path into the Reverse Mortgage Market. Ralph E. Rosynek, Jr. / Senior Vice-President National Production Manager /HECM Direct Endorsement Underwriter E-Mail: / Office: 281.404.7970 / Cell: 708.774.1092 / EFax: 866.543.5420 URL: •

Rushmore Home Loans is a wholesale lender dedicated to understanding and answering the needs of our brokers. We provide competitive mortgage loan products with a focus on quality, efficiency and flexibility. Our goal is to deliver an experienced, customer-focused team with access to the most comprehensive technology platform to deliver the highest possible service to our brokers.

Interested in joining our Wholesale Division? Send your resume to

United Wholesale Mortgage 800-981-8898 UWM has a full set of mortgage products to meet all of your lending needs with Conventional, FHA, USDA (Rural Development), VA, Jumbo, HARP 2.0 and DU Refi Plus. With UWM’s ELITE program, you will receive the most aggressive conventional rates and pricing in the industry for your elite borrowers! Discover Lending Made Easy with United Wholesale Mortgage!

n National Mortgage Professional Magazine n DECEMBER 2013

Rushmore Home Loans 888.202.0878

REMN has FHA, USDA, 203k, VA and Conventional solutions to fit the needs of your customers. But, at REMN, our most valuable product is our people. The REMN Sales and Operations Teams give you - and your loans - the time and attention that you deserve. Even better, at REMN, same-day approvals are guaranteed.* You can rely on us to get the little, yet vital, things taken care of on time.


Whether you are an experienced reverse mortgage professional looking to grow faster or a firm wanting to create a new product line, allow RMS’s production division RMPath to work with and alongside you to build a strategic path to success. We have: • Correspondent, Wholesale Lending And Aggregation Partnering • We Offer Exceptional Customer Service And Market - Leading Pricing • Powerful, Secure, Scalable Loan Origination Systems • Proprietary State-Of-The-Art Technology Utilizing The RM COMPASS Technology Platform • Customizable Production Strategies To Fit Your Needs • Rapid Execution And Exceptional Customer Service • Excellent Compliance And Regulatory Controls

Real Estate Mortgage Network, Inc. 866-933-6342

Credit Repair: Facts and Fallacies By Chad Evanson

DECEMBER 2013 n National Mortgage Professional Magazine n


In the world of credit repair, there is so much conflicting information that it confuses consumers. Consumers look to mortgage professionals for help and guidance when it comes cleaning up their credit. So, in order to help clear up some confusion, here are five facts and fallacies about credit repair. 1. Can only time change the information on a credit report? No! The Fair Credit Reporting Act (FCRA) was put in place so that consumers would have the right to challenge a reporting agency for the accuracy of their credit report. People make mistakes, and there could very well be mistakes on the report when someone enters the information. The government realized that these credit bureaus play a vital role in whether or not a consumer could get access to credit. They developed the FCRA to force the credit bureaus to act fairly when it comes to fairness and impartiality. When it comes to credit repair, the recommendation from the Federal Trade Commission (FTC) is that consumers NOT use credit repair services. The FTC says that “everything that a credit repair clinic can do for you, you can do yourself at little or no cost;” however, this is not entirely true. 2. Can accurate derogatory information be removed from a credit report? Yes! The FCRA provides that the credit

bureau do not have to remove accurate derogatory information from a credit report unless the information is outdated. In some cases, if one disputes with the credit bureau and challenges derogatory information, it is possible to get it removed, even if it is valid. This is because when one challenges a credit entry, the bureau has 30 days to verify the information. So, they contact the reporting agency, who must either confirm the information within that time frame or the information has to be removed. Sometimes, they do not respond to the bureau, so that entry has to be removed whether it is valid or not. While the law says that they are not required to remove the valid information, it does not prohibit them from doing so, and if done correctly, one can have accurate derogatory entries removed. 3. Is credit reporting subjective? Yes! There are three different major credit bureaus in the United States: Experian, Equifax and TransUnion. Each has its own resources of information, and each will also be very different from the other in most cases. A credit score can also vary from one agency to the next. Credit scores will

vary from 365, which is the worst, to 840 which is the best. If a score is less than 720, one may benefit from credit repair services. The actual formula used to arrive at a consumers credit score seemed to be a mystery. There are several factors that will arrive at your final score, including delinquencies, the age of your credit file and other factors. It’s a true mystery of how the scores are actually calculated, and each score will be different between the three bureaus. 4. Lenders are the only ones who will review a credit report? No! Many businesses that deal with consumers are now running credit reports for their customers. Many companies are also running credit reports as part of the background check process when they hire new employees. Even insurance companies run credit reports before they will issue a policy to someone. They say that their justification is that because a credit report will give them an indication as to whether a particular client will file a fraudulent insurance claim. The sad part of all of this is that a company may prevent one from being hired because their credit is poor. If a company does reject one for a job

“The bottom line is that when someone has poor credit, it can negatively influence so many different aspects of their life.”

based on their credit report, they are supposed to send a letter of explanation to the applicant. Many companies get around this requirement by simply saying that the applicant was not qualified for a job. The bottom line is that when someone has poor credit, it can negatively influence so many different aspects of their life. Whether or not it is right is irrelevant. 5. Can a legitimate credit repair company do more for a consumer than they can do for themselves? Yes! A reputable credit company has many clients. Therefore, they have the experience necessary to deal with creditors and credit bureaus to get negative information removed from a credit report. Credit dispute procedures can be complicated in some cases. When a case arrives where the consumer is not able to have a negative entry removed, a legitimate credit repair company can probably get it done for them. When it comes right down to it, one has to weigh the benefits against the cost of the service. In other words, legitimate services know things about the credit industry that consumers do not. They deal with these issues on a daily basis and they are up-to-date on all of the current credit laws. They know the angles for getting results. Chad Evanson is a principal of Prime National Inc. “The fastest credit repair in the business: 30 days.” He may be reached by phone at (800) 795-PNCR or e-mail

calendar of events N A T I O N A L


Monday-Friday, January 13-17 2014 MISMO Winter Summit Hyatt French Quarter New Orleans 800 Iberville Street New Orleans For more information, call (800) 793-6222 or visit

Friday, January 17 New England Mortgage Expo 2014 MGM Grand Foxwoods 39 Norwich Westerly Road Ledyard, Conn. For more information, call (860) 922-3441 or visit

Friday, January 17


Sunday-Wednesday, February 2-5

Florida Association of Mortgage Professionals Broward Chapter 2014 Annual Trade Show “Mend Your Broker Heart” The Broward Convention Center 1950 Eisenhower Boulevard Fort Lauderdale, Fla. For more information, call (954)205-0022 or e-mail


Thursday-Saturday, September 4-6

2014 Maryland Association of Mortgage Professionals Annual Conference Annapolis Elks Lodge #622 2517 Solomons Island Road Edgewater, Md. For more information, call (410) 752-6262 e-mail

Thursday, April 17 Tuesday-Friday, February 18-21 Mortgage Bankers Association (MBA) 2014 National Mortgage Servicing Conference & Expo The Peabody Orlando 9801 International Drive • Orlando, Fla. For more information, call (800) 793-6222 or visit MARCH 2014

23rd Annual Rocky Mountain Mortgage Lenders Expo Denver Marriott Tech Center 490 South Syracuse Street Denver, Colo. For more information, call (303) 773-9565 or visit MAY 2014

Monday-Thursday, May 5-8

2014 Regional Conference of Mortgage Bankers Associations Trump Taj Mahal Casino Resort 1000 Boardwalk • Atlantic City, N.J. For more information, call (732) 596-1619 or visit

American Land Title Association (ALTA) 2014 Federal Conference & Lobby Day The Grand Hyatt 1000 H Street NW Washington, D.C. For more information, call (202) 296-3671 or visit

Wednesday-Friday, March 12-14

Thursday-Saturday, May 15-17

Sunday-Thursday, March 9-13

American Land Title Association (ALTA) 2014 Business Strategies Conference The Omni Nashville Hotel 250 5th Avenue South • Nashville, Tenn. For more information, call (202) 296-3671 or visit

Thursday-Friday, February 6-7 California Association of Mortgage Professionals 2014 Sales & Marketing Conference Newport Beach Marriott Hotel & Spa 900 Newport Center Drive Newport Beach, Calif. For more information, call CAMP at (916) 448-8236 or e-mail

APRIL 2014

Thursday, April 3

Tuesday-Friday, March 18-21 MBA’s National Technology in Mortgage Banking Conference & Expo 2014 JW Marriott Los Angeles LA Live 900 West Olympic Boulevard Los Angeles For more information, call (800) 793-6222 or visit

50th Annual NAPMW National Education Conference Location to be determined Seattle, Wash. For more information, call (800) 827-3034 or visit JULY 2014

Monday-Wednesday, July 7-9 Ultimate Mortgage Expo 2014 Hotel Monteleone 214 Royal Street • New Orleans, La. For more information, call (860) 922-3441 or e-mail

To submit your entry for inclusion in the National Mortgage Professional Calendar of Events, please e-mail the details of your event, along with contact information, to

Florida Association of Mortgage Professionals 2014 Convention & Trade Show Rosen’s Shingle Creek 9939 Universal Boulevard Orlando, Fla. For more information, call (850) 942-6411 or visit

Saturday-Monday, September 13-15 NAMB National 2014 Luxor Resort and Casino 3900 Las Vegas Blvd South Las Vegas For more information, call (860) 922-3441, e-mail or visit OCTOBER 2014

Wednesday-Saturday, October 15-18 American Land Title Association (ALTA) 2014 Annual Convention The Westin Seattle 1900 5th Avenue Seattle, Wash. For more information, call (202) 296-3671 or visit

Sunday-Wednesday, October 19-22 MBA’s 101st Annual Convention & Expo Mandalay Bay Hotel & Casino 3950 South Las Vegas Boulevard Las Vegas For more information, call (800) 793-6222 or visit


n National Mortgage Professional Magazine n DECEMBER 2013

CREF/Multifamily Conference & Expo The Peabody Orlando 9801 International Drive Orlando, Fla. For more information, call (800) 793-6222 or visit

Wednesday, February 12


Florida Association of Mortgage Professionals 2014 Regulatory Symposium DoubleTree Sunrise/Sawgrass Mills 13400 West Sunrise Boulevard Sunrise, Fla. For more information, call FAMP at (850) 942-6411 or visit


DECEMBER 2013 n National Mortgage Professional Magazine n



LOSE, Y YOU OU ORIGINATE, ORIGIN NATE, T W WE EC CLOSE, IT’S THA AT S IMPLE. THAT SIMPLE. 888.913.3912 www d Lender NMLS 2826. AFR Wholesale, a division of American Financial Resources, Inc. is a nationwide wholesale residential mortgage lender and an approved lending institution. The company is a GNMA issuer, FNMA seller/servicer, FHA Mortgagee, USDA National Lender and VA Automatic Lender. This information is provided to assist business professionals. This is not an advertisement extended to the consumer, as defined by Section 226.2 of Regulation Z. - Equal Housing Lender - Equal Opportunity Employer. Corporate office located at 9 Sylvan Way, Parsippany, NJ 07054. AB110813