National Mortgage Professional Magazine December 2015

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40 Under 40: The Most Influential Mortgage Professionals Under 40


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A Year of Change Positions the Mortgage Industry for a Promising 2016 By Dan Goldman ..............................................................56

Everything You Wanted to Know About TRID, But Were Afraid to Ask By Marc Israel

The New Frontier: Real Estate Crowdfunding By Steven Kaufman, CPA, MsEDE ..................................................................60

Going Modern: Embracing Technology for a Seamless Consumer Closing Experience By Aaron King ............................................58

Steps to Making 2016 a Banner Year By Paul M. Peters, CMB ..................62 Formulating Your Official Business Plan for the Coming Year By Eric Weinstein ............................................................................................63 How to Achieve Those New Year’s Goals By Kerry Johnson, Ph.D. ..........64 Three Keys to Profitable Mortgage Lending for 2016 By Paul Doman......66 An Appraisal Industry Forecast for 2016 By Tom Hurst..............................68

53 Who’s Afraid of Google Compare for Mortgages? By Phil Hall

FEATURES Progress Is Not Possible Without Change By Paul Lucido ..........................8 The Elite Performer: Work During the Holidays By Andy W. Harris, CRMS ................................................................................8 Use the “V” to Fly Higher (and Easier) in Mortgage Lending By Bubba Mills ................................................................................................10 The End of Interest Rate Selling ..................................................................16 2015: A Big Year for Non-Prime By Tom Hutchens ....................................18 NAMB Perspective ........................................................................................20 What You Need to Know About the HomeReady Loan By Karen Deis ....24 The Five Cs of Lending … With a Twist By Michael Boggiano ..................26

74 The Home Mortgage Disclosure Act: Big Changes on the Way By Jonathan Foxx

V I S I T Company

Web Site


A Page

Agility Resources Group ...................................... ......................................65 American Financial Resources Inc. ...................... ....................Back Cover Angel Oak Mortgage Solutions ............................ ..................................................25 Assurance Financial............................................ ....................................................39 Brokers Compliance Group.................................. ..................................88 Caliber Home Loans.............................................. ..............................................11 ...................................................... ............................................................59 Carrington Mortgage Services, LLC ...................... ..............................29 & 58 Comergence Compliance Monitoring, LLC ............ ..................................57

81 Step Inside Ginnie Mae By Ted W. Tozer

Document Systems, Inc./DocMagic ...................... ........................................................7 Equity Prime LLC................................................ ..................................................56 First Guaranty Mortgage Corp. ............................ ..............................Inside Front Cover & 60 Flagstar Bank .................................................... ....................................................17 HomeBridge Wholesale ...................................... ....................................13 LendingHome .................................................... ............................................1 Lykken On Lending ............................................ ............................................66 MBS Highway .................................................... ..........................................79






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Survival of the Fittest: Weathering the Storm With a Robust Management Internal Control Function By Vincent Spoto ........28 A Look Back at the NCRA’s 23rd Annual Conference By Terry W. Clemans ......................................................................................42 Lykken on Leadership: Five Important Things to Know About Millennial Buyers By David Lykken ....................................................48


are you hiring

coming in january 2016

Industry Updates: December 2015 By Melanie A. Feliciano Esq.................50 Shaving Cost Out of the Loan Origination Process: A Competitive Imperative By Joe Dahleen ..................................................51 The Long & Short: The Business of Short Sales By Pam Marron ..............52 Just Ask Eric & Laura By Eric Weinstein & Laura Burke ..............................54 Operation VA SITREP “Your VA Situation Report” By Richard M. Bettencourt Jr., CRMS, CMHS................................................69 How Will You Protect Borrower Data in 2016? By Andrew Liput ..............70 Tales From the Closing Table By Andrew Liput ..........................................71 Important Numbers to Know About Your Mortgage By David Hosterman ........................................................................................72 OrigiNation: By Originators, For Originators By Andy W. Harris ................73 3

MBA’s Mortgage Action Alliance: A Message From MAA Chairman Fowler Williams ..................................................................77

The Five Forbidden Words By Ralph LoVuolo Sr. ........................................80 Dealing With Challenging Co-Workers By Kurt Rasmussen ......................82 NMP’s Economic Commentary: A Season of Thanks By Dave Hershman ..........................................................................................83

D V E R T I S E R S Company

Web Site


Mortgage News Network (MNN) .......................... ..............................30-31 ............................41 NAMB+ ............................................................ ......................................................23 NAPMW ............................................................ ....................................................51 & 64

Go to to vote for your company. Please only one submission per person or your company may be disqualified. Your company must be involved in originating mortgages, be at least two years old with a minimum 15 employees.

NAWRB ............................................................ ............................................................69 New England Mortgage Expo .............................. ............................................61 New York Community Bancorp, Inc. .................... ................................................19 Paramount Residential Mortgage Group, Inc. ...... ..........................44, 45 & Inside Back Cover PB Financial Group Corp..................................... ................................................47 REMN Wholesale ................................................ ................................................5 Secure ..................................................15 TagQuest .......................................................... ........................................................27 Texas Mortgage Roundup.................................... ........................................67 The Bond Exchange............................................ ..........................................63 The National Real Estate Post.............................. ..............................49 United Wholesale Mortgage ................................ ..............................................................9

NMP Media Corp. 1220 Wantagh Avenue Wantagh, New York 11793-2202 p 516.409.5555 f 516.409.4600 e w

n National Mortgage Professional Magazine n DECEMBER 2014

Love your job? Love your company? We want to hear about it. We're compiling a list of the best mortgage companies to work for. There will be a total of 200 winners selected on a National and Regional basis.

Marketing Services Agreements: What’s a Lender to Do? By H. Burton Embry ........................................................................................78

DECEMBER 2015 Volume 7 • Number 12 FROM THE

Goodbye to 2015!

1220 Wantagh Avenue • Wantagh, NY 11793-2202 Phone: (516) 409-5555 • Fax: (516) 409-4600 Web site: STAFF Eric C. Peck Editor-in-Chief (516) 409-5555, ext. 312

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DECEMBER 2015 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.

For those who know me, the year 2015 has been the most difficult year of my life. For those who missed the tribute to my son John Joseph Hanley in the June edition, 2015 was the year my wife Anna and I lost our 29-year-old son. Suffice it to say, that the pain doesn’t dissipate over time, and while the memories help us move forward, they simply do not fill the void left by his unexpected departure. I know one thing … John would want for me to carry on for both my business and our family, and it is with that outlook I look forward to the year 2016. This month, we take a look at growth strategies for the coming year. The mortgage industry has, without question, bounced back from the dreary days of the past and all indications are that 2016 will continue the march towards continued growth, albeit tempered by reduced profitability caused by growing compliance costs. I’ve talked about W. Clement Stone’s, philosophy of Positive Mental Attitude (PMA) in past columns and often raise this concept in my conversations both in business and socially. W. Clement Stone was a businessman; philanthropist and author who passed at the age of 100 in 2002. Stone’s concept was simple: You can overcome the most difficult times of your life if you don’t allow the negative to overtake your actions and seek to find the positive, no matter how small, and let that PMA drive you. Without question, it is PMA that helped me get through 2015, and I implore you to use the PMA concept in your business and personal life as well. It is an easier path to allow the negative take over. Compliance is the “C Word” that captivates every discussion in the mortgage industry and its impact on the bottom line should be looked at as a cost of doing business (until it changes, hopefully). Concentrate more on growing your knowledge and being a trusted advisor for the consumer as you assist them to navigate the ever-growing complexities of the origination process. As we enter each year, you should not assume that you know everything and be open to learn. Stone built an empire starting with $100 and built that empire into an insurance business built on optimism. Lastly, every December, National Mortgage Professional Magazine features the “40 Most Influential Mortgage Professionals Under 40.” The process for the following year for nomination and selection in this coveted group begins almost the minute the 40 Under 40 is released. My hats off to those selected this year. One comment I’d like to make. The NMLS reports the average age of a loan officer at 54-years-old. I’m embarking on a campaign to “Recharge the Mortgage Profession” and you will hear and read more about this in the near future. Simply put, if we don’t do something to attract Millennials, veterans, and those wanting to change their careers to the mortgage profession, we may, out of need, have to change the feature to “60 Under 60!” Sincerely,

Joel M. Berman, Publisher-CEO NMP Media Corp.

National Mortgage Professional Magazine is published monthly by NMP Media Corp. • Copyright © 2015 NMP Media Corp.


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

Terry W. Clemans

Ted W. Tozer

Editorial Contributors Michael Boggiano

Jonathan Foxx

Laura Burke

Andy W. Harris, CRMS

Karen Deis

David Lykken

Paul Doman

Pam Marron

H. Burton Embry

Melanie A. Feliciano Esq.

Kerry Johnson, Ph.D.

Bubba Mills

Dan Goldman

Steven Kaufman, CPA, MsEDE

Paul M. Peters, CMB

David Hosterman

Aaron King

Kurt Rasmussen

Tom Hurst

Andrew Liput

Vincent Spoto

Tom Hutchens

Ralph LoVuolo Sr.

Eric Weinstein

Marc Israel

Paul Lucido

Fowler Williams


n National Mortgage Professional Magazine n DECEMBER 2015

NAMB The Association of Mortgage Professionals

National Association of Professional Mortgage Women

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

2015-2016 NAPMW National Board of Directors

NAMB 2015-2016 Board of Directors OFFICERS Rocke Andrews, CMC, CRMS—President Lending Arizona LLC 3531 North Pantano Road l Tucson, AZ 85750 Phone: (520) 886-7283 l E-mail: Fred Kreger, CMC—President-Elect American Family Funding 28368 Constellation Road, Suite 398 l Santa Clarita, CA 91350 Phone: (661) 505-4311 l E-mail: John Stevens, CRMS—Vice President Bank of England d/b/a ENG Lending 11650 South State Street, Suite 350 l Draper UT 84062 Phone: (801) 427-7111 l E-mail: Rick Bettencourt, CRMS—Secretary Mortgage Network 300 Rosewood Drive l Danvers, MA 01923 Phone: (978) 777-7500 l E-mail: Andy W. Harris, CRMS—Treasurer Vantage Mortgage Group Inc. 15962 SW Boones Ferry Road, Ste 100 l Lake Oswego, OR 97035 Phone: (503) 496-0431, ext. 302 E-mail: John Councilman, CMC, CRMS—Immediate Past President AMC Mortgage Corporation 10136 Avalon Lake Circle l Fort Myers, FL 33913 Phone: (239) 267-2400 l E-mail:

DECEMBER 2015 n National Mortgage Professional Magazine n


Donald J. Frommeyer, CRMS—NAMB CEO American Midwest Bank 200 Medical Drive, Suite C-2A l Carmel, IN 46032 Phone: (317) 575-4355 l E-mail:

DIRECTORS Kay A. Cleland, CMC, CRMS l KC Mortgage LLC 2041 North Highway 83, Unit CPO Box 783 l Franktown, CO 80116 Phone: (720) 670-0124 l E-mail: Olga Kucerak, CRMS l Crown Lending 328 West Mistletoe l San Antonio, TX 78212 Phone: (210) 828-3384 l E-mail: David Luna, CRMS l Mortgage Educators and Compliance 947 South 500 E, Suite 105 l American Fork, UT 84003 Phone: (877) 403-1428 l E-mail: Linda McCoy, CRMS l Mortgage Team 1 Inc. 6336 Piccadilly Square Drive l Mobile, AL 36609 Phone: (251) 650-0805 l E-mail: Nathan Pierce, CRMS l Advanced Funding Home Mortgage Loans 6589 South 1300 East, Suite 200 l Salt Lake City, UT 84121 Phone: (801) 272-0600 l E-mail: Valerie Saunders l RE Financial Services 13033 West Lindburgh Avenue l Tampa, FL 33626 Phone: (866) 992-0785 l E-mail: Robert Sweeney, CRMS 600 East Carmel Drive l Carmel, IN 46032 Phone: (317) 625-3287 l E-mail: Michele Velez, CMC l WJ Bradley Mortgage Capital LLC 1300 South El Camino Real, Suite 505 l San Mateo, CA 94402 Phone: (650) 409-2850 l E-mail:

1851 South Lakeline Boulevard, Suite 104, Box 303 Phone: (800) 827-3034 • E-mail: Web site:

National President Kelly Hendricks (314) 398-6840

Treasurer Judy Alderson (918) 250-9080, ext. 300

President-Elect Nikki Bell (678) 442-3966

Parliamentarian Frances Reinhardt (678) 331-1384

Vice President Cathy Kantrowitz (845) 463-3011

Vice President Laurel Knight (425) 412-6787

Secretary Windee Falla (281) 556-9182

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:

2014-2015 Board of Directors Mike Brown President (908) 813-8555, ext. 3020

Judy Ryan Director Credit Plus (800) 258-3488

William Bower Vice President (800) 288-4757

Mike Thomas Director (615) 386-2285, ext. 285

Maureen Devine Ex-Officio (413) 736-4511

Dean Wangsgard Director (801) 487-8781

Julie Wink Treasurer (901) 259-5105

Terry Clemans Executive Director (630) 539-1525

Renee Erickson Conference Chair (866) 932-2715

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

Mary Campbell Director (701) 239-9977

Scott Ledbetter Director (801) 375-5522


n National Mortgage Professional Magazine n DECEMBER 2015



Progress is Not Possible Without Change By Paul Lucido The year 2015 showed strong signs of growth for many mortgage professionals and companies across the nation. Additionally, regulatory agencies ranging from the implementation of TRID to the CFPB have clearly played a major role in governing what we can and cannot do, forcing many mortgage entities to rethink their game plan and learn to adapt to the everchanging landscape. Yes, change seems to be the subject on everyone’s tongue these days and has always been somewhat of a controversial matter. Over the last year alone, many of us have learned to become quite comfortable with change, no matter how challenging it may be. Yet, some still refuse to accept change, embracing the old adage “If it ain't broke, don't fix it”. However, this philosophy tends to lose its legs rather quickly especially when the sheer force of change arises. Moreover, it lends to a mindset that breeds an atmosphere of complacency and a lack of motivation—thus becoming a little too comfortable and not wanting to aspire to do better—and let’s face it, there is no room for mediocrity or complacency, especially if you want to move ahead in life.

DECEMBER 2015 n National Mortgage Professional Magazine n


So what’s the answer? Perhaps we need to consider another ideology—“being comfortable with the uncomfortable.” The idea of change. For many of us, just the thought of change can be viewed as unwelcoming and unsettling. Change brings with it a certain set of circumstances and unknowns, a possible disruption of order, as most of us are quite settled in our ways and daily routines. Change can also be positive and bring about new ideas and an evolution of progress. “In our case, it has been a full paradigm shift in how we look at things in an effort to do better in all that we do—literally turning them 180 degrees upside-down on their face to see how they fare,” said PRMG CEO Paul Rozo. “Short of doing a complete forensic, you really have to look closely at all departments and processes particularly at the correlating data provided by KPI’s (Key Performance Indicators) to identify weaknesses and where positive improvements can be made. From there it becomes more about redefining and modifying your processes along the way in an effort to roll with the contour of the changing landscape; all while not compromising the integrity of the business or the customers we serve.” Again, in an ever-changing landscape such as the mortgage industry, it is vital that you stay in touch with regulatory changes and remain nimble and flexible enough to adapt to them. Perhaps it’s time we all consider embracing the idea of change. For PRMG, it is clear and imminent: “Progress is not possible without change.” Paul Lucido is national marketing director at PRMG with more than 20 years in marketing and advertising. PRMG’s National Marketing Department offers loan originators unique marketing tools to help them grow and retain business. PRMG is a national leading lender that is licensed in 47 states, offering retail, wholesale and correspondent business. Paul can be reached directly by e-mail at


elite performer

Work During the Holidays By Andy W. Harris, CRMS always seem to battle with separation from work when vacationing which I’m even dealing with this week to prepare for next when leaving on a week vacation. I try to delegate as much as possible, but each time I tell myself I will fully disconnect, I fail in doing so. It’s hard in this industry for the demands and deadlines and what our clients are going through to fully release, but it is very important for our mental state, family and spouse that we do. Vacation is defined as a period of time a person spends away from home, school or business usually in order relax or travel. If we remove the relax portion, we’re not following the purpose of vacationing. The other thought is working habits around the holidays. I have a better time disconnecting during the holiday, specifically providing no one is working, “I planned out our but the days leading to and around holidays is the area some might disconnect whole day. First, we’ll a little too much in a service-based make snow angels for industry. Unfortunately, the holidays bring more stress to many in this industwo hours, and then try as well as the consumer planning to move around periods that result in we’ll go ice skating, delays on a calendar. Pressure can be and then we’ll eat a applied to service providers working with these consumers even with expec- whole roll of Toll House tations clearly set, but it’s important to cookie dough as fast as relax on the holiday to refuel. There are some advantages to those we can, and then, to entrepreneurs that work around the holidays. First, you have the ability to finish, we’ll snuggle.” outperform competitors, many of which —Buddy the Elf may not be present. Secondly, it’s the perfect time for catch-up work and planning for the New Year to come. The better you feel about being caught up and prepared, the more you can relax during the holidays. Nothing is worse than that pestering thought in the back of your mind on the pending pile of work waiting for you back at the office if not caught up. So is working around the holiday a sin? No, but just know when to disconnect and when not to and you’ll find that your down time becomes even more relaxing if prepared. Happy holidays!


Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and past president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431, e-mail or visit



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n National Mortgage Professional Magazine n DECEMBER 2015




DECEMBER 2015 n National Mortgage Professional Magazine n


Use the “V” to Fly Higher (and Easier) in Mortgage Lending By Bubba Mills “Build for your team a feeling of oneness, of dependence on one another and of strength to be derived by unity.”—Vince Lombardi Mortgage pros can learn a lot from nature. Take this fall for example. Did you see geese heading south for the winter in their typical V formation? Ever wonder why they use that shape? When each bird flaps its wings, it creates a slight lift for the bird behind. So a flock can fly farther in a V shape than a single bird can on its own. When a goose falls out of the V, it can feel the drag and quickly rejoins the formation. And if one falls away, two geese will follow it and stay with it until it’s able to fly or it dies. In my life as a coach, I’ve come to realize top producers also fly in a V. Oh sure, a top producer is a single person, but they know the real reason they’ve reached such great heights and flown so

far: They have a team around them. Look at the so-called individual sports. Take tennis. Without fail, every time tennis pros win a tournament, they talk about their teams: their coach, their physio, their trainer, their parents, etc. They always have their V around them. And they know they wouldn’t be hoisting trophies without their team. They travel on the thrust of others. Here are four tips to help you build a team to help you soar to new heights:

1. Know why you want a team Consider your business as it is now and ask yourself what’s been the key to your current situation. Then ask yourself where you want to be in three months, half a year, a year and three to five years. Create your team based upon where you want to be. Ask yourself why you need someone: Do you have too much business? Do you need a transaction specialist for paperwork? Do you just want more

time to enjoy life? There’s no right or wrong answer—the reasons just help you find the right group of folks to achieve your goals.

“Mortgage lending is a year-round business. You don’t have to travel through the high peaks and deep valleys that so many lenders complain about.”

2. Start small I’m not suggesting you go out and hire 10 people next week. Start small. For starters, consider a part-time assistant. See how that feels. After a few months, maybe you make your assistant full-time. Then look at adding a part-time lender. Many of the clients I’ve worked with over the years were individual lenders who were struggling. But by slowly adding the right number of team members, they moved on to become much more productive and padded their bank accounts, too.

3. Don’t forget the team you already have You may not think of co-workers, real estate agents, attorneys and closing specialists, etc. as your team, but you couldn’t get your job done without them. Take

time to nurture these existing relationships and brainstorm ways to help each other.

4. Hire slow, fire fast The last thing you want is to hire someone who’s just doesn’t fit. It’s not fair to you or the job seeker and it’s a waste of time for both parties. Take all the time you need to decide who fits your team best. But if you do hire the wrong person, waste no time showing them the door. Their vibes can spread like cancer throughout your office and perhaps even worse, to your prospects. Bubba Mills is executive vice president of Corcoran Consulting & Coaching Inc. He may be reached by phone at (800) 9578353 or visit


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Imagine working for o a national lender that values you and your ideas, and where the sales

as vvoted oted on b byy lloan oan officerrs b byy Mortgage Mortgage officers E ecutive Magazine Ex Magazine Executive Our 2015 2015 lloan oan v volume olume

in Whol Wholesale/ esale/ Br oker Broker Originations* Origin Originations *

MBA’s Mortgage Action Alliance Announces New Advocacy Action Center

DECEMBER 2015 n National Mortgage Professional Magazine n


The Mortgage Bankers Association’s (MBA) Mortgage Action Alliance (MAA) launched a new grassroots advocacy action center designed to help people better engage policymakers and stay informed about key policy and regulatory decisions regarding the real estate finance industry. “MBA believes this new action center will bolster our ability to engage policymakers and regulators about the issues affecting our industry,” said MBA’s Senior Vice President of Legislative and Political Affairs Bill Killmer. “With more than 10,000 members, the Mortgage Action Alliance is an invaluable piece of MBA’s advocacy efforts and we intend to continue to grow and activate its membership as we face ongoing challenges.” Specifically, the new grassroots action center will include an easy to use Call to Action platform, legislative tracking capabilities, a key contact survey and other features that easily connect MAA members with their elected officials.

Ellie Mae Integrates Guidelines From AllRegs Into Encompass Ellie Mae has announced that it has integrated AllRegs mortgage information and guidelines into Encompass, Ellie Mae’s all-in-one mortgage management solution. The integration is part of a multi-phased effort to make AllRegs guideline and compliance content seamlessly accessible to users of Encompass. With this first phase of integration, AllRegs’ Market Clarity content is now accessible via investor guideline links within the Encompass Product and Pricing Service. AllRegs’ Market Clarity is a business information tool for the mortgage banking industry that helps lenders and investors manage risk, identify market opportunities and maintain a competitive edge. Built into Encompass, the Encompass Product and Pricing Service enables automated and

effective pricing and eligibility to help Encompass users increase profitability and compliance. As a natural complement to Encompass Product and Pricing Service, the Market Clarity integration offers access to a product summary with key eligibility requirements, the industry leading AllRegs guideline library, and investor bulletins. This same set of information and guidelines is also available to Encompass lenders that offer a broker or wholesale channel via the Encompass TPO WebCenter and utilize the Encompass Product and Pricing Service. With this integration, Encompass users will not only see if a loan is eligible, but can also see the documentation needed to ensure that they have chosen the right product for their borrower. In addition, loan officers, underwriters and secondary marketing professionals now have access to critical information without having to switch platforms or visit multiple Web sites. “Our customers were excited about our acquisition of AllRegs last year as the AllRegs interface and platform make it easy for customers to locate mission critical content about loan products,” said Jonathan Corr, Ellie Mae president and CEO. “The integration of AllRegs into our Encompass Product and Pricing Service brings guideline information closer to our customers and solidifies our leadership role in providing a truly end-to-end mortgage solution.”

Quicken Loans Expedites the Mortgage Process With New Rocket Mortgage Offering In the eight minutes it takes a space shuttle to reach orbit, Americans will now be able to receive a full mortgage approval online with Rocket Mortgage by Quicken Loans. More than 500 Detroit-based developers, designers, QA technicians and business analysts from QL Labs—Quicken Loans’ technology innovation team— have worked for over three years to

completely redesign the highly complex mortgage process. Rocket Mortgage brings the home loan experience to the fingertips of consumers whether they are at their desktops or using a mobile device. “Quicken Loans has been the clear leader in mortgage technology for almost two decades. We changed the mortgage industry when we created the first 50-state online retail lending platform that has since helped millions of Americans achieve their home financing goals, while experiencing the best client service in the nation,” said Bill Emerson, Quicken Loans chief executive officer and chairman of the Mortgage Bankers Association (MBA). “Today, we took another monumental leap forward with the launch of Rocket Mortgage, which brings simplicity and clarity to the home loan process like never before, while delivering solutions at unimaginable speed.” “Rocket Mortgage simplifies the largest, most complex and important financial transaction most consumers experience in their lifetime,” said Linglong He, Quicken Loans chief information officer. “Our team at QL Labs has worked tirelessly to ensure that Rocket Mortgage users have the same awardwinning experience that has made Quicken Loans an eight-time J.D. Power top-rated mortgage lender for client satisfaction. This is one of the biggest breakthroughs in financial technology history, born and built in downtown Detroit. The team effort to get this off the ground was extraordinary.”

Mid America Mortgage Products and Pricing Now Available to Calyx Customers

CalyxSoftware and Mid America Mortgage have jointly announced that all Calyx Point users can now access products and pricing sheets for Mid America programs, regardless of whether they have registered to broker

loans with Mid America. Mid America is a multi-state wholesale mortgage lender with nearly 30 branches in the United States. The company offers a wide range of purchase and refinance programs including low downpayment and expanded credit options for homebuyers and investors. "This integration is a win/win for Calyx customers and Mid America," said Dennis Boggs, vice president of business development for Calyx. "It gives our customers access to Mid America's expansive and highly competitive loan programs; while at the same time, exposing Mid America's products and pricing to Calyx's extensive user base." Jeff Bode, President of Mid America, said, "It is great to be working with Calyx again. In 2000, we were the first lender to be integrated with Point, streamlining the process from applications through closing. Now we are working together to help borrowers and brokers take advantage of expanded opportunities within the purchase market." Calyx said that its subsidiary, LoanScoreCard, provided the product and pricing engine that enabled the integration and the new search capabilities.

Mortech Announces New Mortgage Pricing Integration With Calyx Point

Mortech, a Zillow Group business, has announced a new integration between Mortech’s product and pricing engine (PPE) and secondary marketing solutions, and Calyx’s Point and PointCentral (Point) loan origination software (LOS). Through this integration, Point users can access Mortech’s mortgage product and eligibility information and compare loan pricing scenarios from over 400 supported investor rate sheets all within the Calyx interface. “In today’s competitive market place, closing loan transactions quickly and efficiently is critical and lenders are increasingly looking for technology

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n National Mortgage Professional Magazine n DECEMBER 2015

EWSFLASH l DECEMBER 2015 l NMP NEWSFLASH l DECEMBER 2015 NMP NEW GSEs Establish 2016 Maximum Conforming Loan Limits

DECEMBER 2015 n National Mortgage Professional Magazine n


The Federal Housing Finance Agency (FHFA) has announced that the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2016 will remain at existing levels, except in 39 high-cost counties where they will increase. In most of the country, the loan limit will remain at $417,000 for one-unit properties. The Housing and Economic Recovery Act of 2008 (HERA) established the baseline loan limit at $417,000 and mandated that, after a period of price declines, the baseline loan limit cannot rise again until home prices return to pre-decline levels. The $417,000 loan limit will stay the same for 2016 because FHFA has determined that the average U.S. home value in the third quarter of this year remained below its level in the third quarter of 2007. HERA provides for higher loan limits in high-cost counties by setting loan limits as a function of area median home value. Although the baseline loan limit will be unchanged in most of the country, 39 specific high-cost counties in which home values increased over the last year will see the maximum conforming loan limit for 2016 adjusted upward. Although other counties also experienced home value increases in 2015, after other elements of the HERA formula—such as the statutory ceiling and floor on limits—were accounted for, these local-area limits were left unchanged. “Access to credit is a critical factor for potential homebuyers, especially in many high-cost areas, and the Federal Housing Finance Agency’s announcement today addresses those concerns in a number of markets,” said National Association of Realtors (NAR) President Tom Salomone. “We will continue working with FHFA to recognize the challenge of rising prices in high-cost areas so we can ensure that families everywhere have the tools they need to achieve the dream of homeownership.”

Fewer Foreclosure Filings in November Foreclosure filings were reported on 104,111 properties last month, according to new data from RealtyTrac. This represents a 10 percent decline from October and a seven percent drop from November 2014. November also witnessed a 15 percent monthly drop in foreclosure starts, with 41,208 properties starting the foreclosure process for the first time—the lowest monthly total since May 2005. However, property repossession by lenders in November was up 10 percent from October and up 60 percent yearover-year. Repossessions were up in 41 states, most notably in Tennessee (up 608 percent), Mississippi (up 341 percent), Texas (298 percent), Nebraska (up 295 percent), New York (up 270 percent) and New Jersey (up 205 percent). “Banks are continuing to work through the backlog of lingering foreclosures, pushing bank repossession numbers higher in the short term even as foreclosure starts drop to new lows,” said Daren Blomquist, RealtyTrac vice president. “This also means the share of active foreclosures tied to bubble-era loans is shrinking, with 59 percent of all loans in foreclosure originated between 2004 and 2008. While that is still a disproportionate share of active foreclosures, it continues to decrease from 61 percent earlier this year and 75 percent two years ago.” For the second month in a row, Maryland led the nation in foreclosures, with a total of 4,631 properties with a foreclosure filing in November—down nearly 10 percent from the previous month, but up 13 percent from a year ago. Atlantic City had the highest number of foreclosure filings for a major metro area for the fifth consecutive month with one out of every 307 housing unit being impacted.

FHA Sets 2016 Loan Limits The Federal Housing Administration (FHA) has announced that its national loan limit “ceiling” will remains at $625,500 and the “floor” will remain at $271,050 for 2016. The FHA sets the minimum national loan limit “floor” at 65 percent of the $417,000 national conforming loan limit, while the floor applies to areas where 115 percent of the median home price is less than 65 percent of the national conforming loan limit. However, the FHA announced that maximum loan limits for forward mortgages increased in 188 counties; changes in local housing prices were cited for this increase. No county has been designated for a decrease in the maximum loan limits for forward mortgages. The mortgage loan limits for FHAinsured reverse mortgages will remain unchanged next year, with a maximum claim amount of $625,500. FHA calculates limits based on property value, borrower age, and current interest rates.

Construction Spending Up in October Construction spending during October was estimated at a seasonally adjusted annual rate of $1,107.4 billion, which is one percent above September’s revised estimate of $1,096.6 billion and 13 percent above the October 2014 estimate of $979.6 billion, according to new data from the U.S. Census Bureau of the Department of Commerce. Residential construction was at a seasonally adjusted annual rate of $399 billion in October, which is one percent above the revised September estimate of $395 billion. Non-residential construction was at a seasonally adjusted

annual rate of $403.4 billion in October, 0.6 percent above the revised September estimate of $400.8 billion. Spending on private construction in October was at a seasonally adjusted annual rate of $802.4 billion, 0.8 percent above the revised September estimate of $795.8 billion. Construction spending amounted to $888.1 billion during the first 10 months of this year, which is 10.7 percent above the $802.3 billion for the same period in 2014.

Harvard Report Traces Expanding Renter Numbers Forty-three million families and individuals are now living in rental housing, an increase of nearly nine million households since 2005, according to “America’s Rental Housing: Expanding Options for Diverse and Growing Demand,” a new report released by the Harvard Joint Center for Housing Studies. This expansion of renters marks the largest increase in any 10-year period on record. Complicating matters, according to the report, is a shortage of inventory (rental vacancy rates are at their lowest point in 30 years) and rising rents (inflation-adjusted rents are increasing 3.5 percent annually). While renters’ money is going out, the funds coming in are increasingly limited: renters’ incomes have dropped nine percent since 2001 and the average renter is now paying more than 30 percent of income for housing. Furthermore, the report found that the renter household demographics are heavy with those traditionally earning lower incomes: 38 percent of single-parent families, 33 percent of blacks and 30 percent of Hispanics are in rental housing. “Record-setting demand for rental housing due to demographic trends, the residual consequences of the foreclosure crisis, and an increased appreciation of the benefits of being a renter has led to strong growth in the supply of rental housing over the past decade both through new construction and the conversion of formerly owner-occupied

homes to rentals,” said Chris Herbert, managing director of the Joint Center For Housing Studies at Harvard, which publishes its report on the state of rental housing in the U.S. every other year. “Yet the crisis in the number of renters paying excessive amounts of their income for housing continues, because the market has been unable to meet the need for housing that is within the financial reach of many families and individuals with lower incomes. These affordability challenges also are increasingly afflicting moderate-income households.”

Fed Approves Final Rule on Emergency Lending

The mortgage industry completed approximately 337,000 non-foreclosure solutions for at-

Royce Targets GSEs on FICO-Only Credit Scoring After successfully pushing through bipartisan legisla t i o n t h a t capped the salaries of the government-sponsored enterprise (GSE) chief executives, Rep. Ed Royce (R-CA) is taking

a new aim at Fannie Mae and Freddie Mac with a bill that would change the GSE credit scoring process. Rep. Royce, together with Rep. Terri Sewell (D-AL), has introduced HR 4211, the Credit Score Competition Act of 2015, which will allow the GSEs to use other credit scoring models besides FICO. Royce and Sewell based their legislation on the problems faced by would-be homebuyers—mostly lowand middle-income Americans—that have the wherewithal to responsibly pursue homeownership but are disqualified from consideration to a low or non-existent FICO score. The represents also noted that the GSEs maintain a continued on page 16

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n National Mortgage Professional Magazine n DECEMBER 2015

HOPE NOW: 337,000 Non-Foreclosure Solutions in Q3

“Our third quarter loan solution data continues to show evidence of an improving housing market on a national level,” said Erik Selk, executive director at HOPE NOW. “When we reach the end of the year, I believe that the last quarter of data will also show continuing trends towards a healthy housing market.”

The Federal Reserve Board has approved a final rule that changes its procedures for emergency lending for financial institutions considered too big to fail. In announcing the final rule, the central bank noted that the Dodd-Frank Act limited its ability to engage in emergency lending to programs and facilities with “broad-based eligibility” that were established with the approval of the Department of the Treasury. With the final rule, the Fed stated that it has achieved “greater clarity” regarding its emergency lending assistance while noting that it still must find that “unusual and exigent circumstances” exist as a pre-condition to authorizing emergency credit programs. “In the Dodd-Frank Act, Congress reviewed the scope of the Federal Reserve's emergency lending authority and determined to make significant modifications that enable the Federal Reserve to extend emergency credit only through broad-based facilities and programs designed to provide liquidity to the financial system,” said Federal Reserve Chairwoman Janet Yellen. “The Dodd-Frank Act amendments eliminated the authority to lend for the purpose of aiding a failing firm or preventing a firm from entering bankruptcy or another resolution process, such as was done with loans to Bear Stearns and AIG. “In place of this authority to lend to specific firms,” Yellen added, “Congress enacted a framework for orderly resolution and provisions that encourage large financial firms to develop plans for their resolution in bankruptcy. These modifications have been in effect since the passage of the Dodd-Frank Act, and would govern any lending pursuant to section 13(3). The ability to engage in emergency lending through broad-based facilities to ensure liquidity in the financial system is a critical tool for responding to broad and unusual market stresses.”

risk homeowners, according to new data released by HOPE NOW. During this period, there were approximately 98,000 permanent loan modifications and 21,000 short sales, with the remaining 218,000 solutions divided between repayment plans, deeds in lieu, other retention plans and liquidation plans. It is important to note that short term solutions often lead to permanent and sustainable positive outcomes for distressed homeowners. The third quarter also saw a decline in foreclosure sales—76,000, down 15 percent from 89,000 in the second quarter-decreased from the previous quarter—as well as a drop in foreclosure starts— 159,000, down nine percent from the second quarter level of 176,000.

The End of Interest Rate Selling

DECEMBER 2015 n National Mortgage Professional Magazine n


Since the market crashed, we’ve been stuck in a world of rate reduction refinances. For a long time, no one had equity and consumers were afraid of the term “Adjustable-Rate Mortgage.” So the only refinancing to be done is lowering interest rates. Now everything is different, home prices are steadily rising with another strong year-over-year jump in home prices. What are we going to do when rates go back up? The time has come to change our sales approach from only having rates reduction conversations back to the method of finding out a borrower’s situation and then presenting them with as many options as possible. They will choose the one that best suits their needs. This will increase your close ratios and bring you more loans and more income each month. The highest close ratios come from the mortgage professionals who do not have rate conversations with their borrowers. But rather, the conversations about the borrower’s financial needs and then move to their mortgage, and eventually to what they quality for. Home values are rising, thus allowing borrowers to qualify for lower monthly payments, cash-out refinances, etc. Borrowers have options besides rate reduction now and it’s important to talk to them about all the products they may qualify for. Some people would rather have a short-term loan and have no problem with higher payments to get it. If you were trying to pay off all your debt so you can retire, buy a second home, or put your kids through college, the interest rate doesn’t matter as much because you are paying off the loan early anyway. Loan officers have become accustomed to asking for the rate first and telling the borrowers how much they can save if they lower it. Now that those same loan officers are trying to sell mortgage insurance premium (MIP) removal, they are having a hard time conveying the benefits to the borrowers. The conversations still revolve around interest rates because loan officers are still asking what their current rate is. This is putting rates first in the borrower’s mind. When you know what is motivating someone to make a major financial change, it’s a lot easier to explain the benefits in terms they will understand. TagQuest customer spotlight Zack M., Nevada—Direct Mail Campaign Each month, we talk with our clients to see how their campaigns are going. Here’s some feedback we received from Zack M. l What volume they do per month or per drop or per order: Five thousand pieces every two weeks. l Some kind of measurable result: “Closed loans, response rates, number of applications taken. The more details here the better.” l Response rate: 0.85 percent, apps about 30 percent of the calls, close 2.5 loans per week from the mail. l Highlights of the campaign that appeal to your client: “Ease of the process. Everything from ordering to taking calls takes little effort on my part. Even the free tracking helps ease the time tracking down information. It’s been that way for two years now. Based in Medford, Ore., TagQuest Inc. is a full-service marketing firm developed throughout the ever-changing mortgage industry. Utilizing industry knowledge, marketing expertise, and technology we implement any or all aspects of your marketing and/or advertising campaigns. With a proven track record, more than 10 years in business, and decades of experience TagQuest knows what it takes to produce unprecedented results in today’s fast-paced mortgage environment. For more information, call (888) 7178980 or visit


nmp news flash continued from page 15

near-monopoly on the secondary market and relying on FICO solely reinforces this dominance. “The GSEs' use of a single credit score is an unfair practice that stifles competition and innovation in credit scoring,” said Rep. Royce. “Breaking up the credit score monopoly at Fannie and Freddie will also assist them in managing their credit risk and decreases the potential for another taxpayer bailout.” “Fannie Mae and Freddie Mac are the largest mortgage purchasers in the nation, but they rely on credit score models that don’t necessarily take into account something as simple as whether borrowers have paid their rent on time,” added Sewell. “Homeownership is an integral part of the American Dream that shouldn’t be out of the reach for low-income, rural, and minority borrowers who lack access to traditional forms of credit. This legislation takes an important step towards addressing this issue and helps make homeownership a reality for more Americans across the country.”

HUD: Homelessness Nationwide Continues to Decline U.S. Department of Housing & Urban Development ( H U D ) Secretary Julián Castro has announced HUD’s latest national onenight estimate of homelessness, highlighting a continuing decline across the nation. The results are based on HUD’s ‘point-in-time’ estimates, which seek to measure the scope of homelessness on a single night in January each year. HUD’s 2015 Annual Homeless Assessment Report to Congress found that there has been an overall 11 percent decrease and 26 percent drop in the unsheltered homeless population since 2010, when President Obama launched Opening Doors, the nation’s first-ever comprehensive strategy to prevent and end homelessness. Between 2010 and January 2015, veteran homelessness declined 36 percent, family homelessness declined 19 percent, and chronic homelessness declined 22 percent. The report shows that certain communities are making significant positive progress, while others are struggling in light of the widespread housing affordability crisis, budget shortages, or slow adoption of best practices. In remarks last week at a Veterans Day ceremony in Richmond, Va., Secretary Castro congratulated the Commonwealth for becoming the first state to effectively end veteran homelessness, as well as other communities across the nation from Syracuse, New York to Las Vegas, Nevada. The decline in veteran homelessness is largely attributed to significant investments

made by the U.S. Congress and the close collaboration between HUD and the U.S. Department of Veterans Affairs on a joint program called HUD-VA Supportive Housing (HUD-VASH), which provides a rental subsidy along with support services for those veterans who need them. Since 2008, nearly 80,000 rental vouchers have been awarded and more than 101,000 veterans have been served through the program. Last week, HUD and VA announced an additional $12 million to expand the program. “The Obama Administration has made an historic commitment to effectively end homelessness in this nation," said Castro. "Together with our partners across the federal government and communities from coast to coast, we have made tremendous progress toward our ambitious goals. But our work is far from finished. We have to continue making smart investments in the strategies that work so that everyone has a place to call home." Since the passage of the McKinneyVento Homeless Assistance Act in 1987, HUD has worked with communities to build the capacity of homeless programs across the country. By targeting investments to individuals and families who need assistance most—those on the street the longest, or with the greatest barriers to housing—HUD is ensuring that its limited resources are used as effectively and efficiently as possible. Despite increased requests in the President’s Budget each year, HUD homeless assistance funding from Congress has not kept pace with need. This has resulted in only a small decrease in the number of persons experiencing chronic homelessness between 2014 and 2015. In the meantime, HUD continues to incentivize communities to target resources, prioritize assistance, and invest in programs with proven track records. The data being reported by HUD on youth experiencing homelessness is a work in progress because communities are still learning how to collect this data accurately. Because of this, HUD cautions its partners and stakeholders from drawing conclusions regarding the state of youth homelessness based solely on this data. In order to continue to improve data on youth, HUD revised its data collection requirements, which may result in future increased point-intime counts as communities improve their methodologies. HUD is also working with communities to improve collection to better understand the size and scope of homelessness, including efforts like youth engagement and collaboration with schools and other youth-serving systems. In addition, HUD is in the process of improving and updating its year-long data collection on youth, and now also continued on page 26


Connect with us. Visit to to find an account executive executive near you. you.

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n National Mortgage Professional Magazine n DECEMBER 2015

Warehouse lines up to $100 million • Agency/government products • Multi-channel delivery Underwriting flexibility • TRID-ready • Local account executives— direct point of contact

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2015: A Big Year for Non-Prime By Tom Hutchens In 2013, six years after the sub-prime crisis had played out, lenders tested the waters by reintroducing a new, safer nonprime product to mortgage markets. Early uncertainty on the viability of non-prime was quickly stamped out as both borrowers and investors demonstrated a healthy demand for the products. Despite early success, non-prime lending activity was fairly tame throughout 2014. In 2015, however, the market has really started to take off. Lenders and borrowers alike are catching wind of non-prime product availability, fueling both supply and demand for non-prime products. Even though there are still only a few lenders that are exclusively underwriting non-prime loans, a handful of traditional lenders have jumped on the bandwagon in an effort to get a piece of the potentially enormous non-prime pie. Though consumer credit quality has continued to strengthen over the last few years, nearly a third of Americans with a FICO score are under 650 (according to FICO as of April 2015). It’s tough to put an exact number on just how big the non-prime market has grown. Aggregate data for the U.S. non-prime market is limited because there simply aren’t any reliable sources available that track the market. However, anecdotally speaking, things are ramping up. We feel that our in-house statistics paint a fairly accurate picture of the market. Angel Oak Mortgage Solutions’ year-over-year stats:

DECEMBER 2015 n National Mortgage Professional Magazine n


l Closed loan volume for 2015 is on pace to more than triple 2014 volume. l Our approved network of broker companies has grown by more than double, from 540 to more than 1,200. l The list of approved states in which we are lending has grown from 20 to 24. l We’ve doubled our staff of account executives to more than 30. l Our Web site traffic has tripled from an average of 67 visitors per day in January to more than 200 per day today. l We receive more than 1,000 loan scenario requests per month through the online “Quick Quote” tool. We expect 2016 to be even bigger than 2015 for non-prime. As the sour taste of the housing crisis dissipates, the general public will warm up to learning why it is truly different from the era of pre-crisis sub-prime. Two data points in particular drive this point home: The average credit score of our portfolio of loans is over 670 and we haven’t had any defaults in our non-prime program. The mortgage industry needs non-prime. There are just too many Americans who fall outside of qualified mortgage (QM) lending standards. Non-prime and non-agency loans are the key to bringing much-needed liquidity back to the U.S. mortgage market. Tom Hutchens is senior vice president of sales and marketing at Angel Oak Mortgage Solutions, an Atlanta-based wholesale lender currently licensed in 24 states. Tom has been in the real estate lending business for nearly 20 years. He may be reached by phone at (855) 539-4910 or e-mail


new to market continued from page 12

solutions to help streamline the loan process,” said Doug Foral, general manager at Mortech. “By aligning the Mortech and Calyx Software offerings, we are providing our customers with the mortgage automation solutions they seek to optimize their day-to-day workflow, bringing simplicity to the complex mortgage environment and ultimately, delivering a technological solution to allow our customers to close more loans more quickly.” The new integration provides instant access to Mortech pricing, including loan specific rate, profit and adjustment information, along with automating the lock request process by seamlessly transferring borrower scenario data between Marksman and Point. The enhanced integration removes manual data re-entry, reduces the possibility of human error, and improves loan-processing automation through multi-system interoperability. “At Calyx, we’re continually enhancing our software and adding quality technology partners to our network to offer a competitive edge to our mortgage banking and broker clients,” said Dennis Boggs, executive vice president of business development at Calyx Software. “Integrating Mortech’s product and pricing engine into our platform will simplify the searching process for our users and provide them access to pricing from Mortech’s extensive portfolio of supported wholesale and correspondent programs.”

Applied Business Software Launches Redesigned Web Site

Applied Business Software Inc. (ABS), developers of The Mortgage Office and The Loan Office software, has announced the launch of a revamped Web site to its signature software, The Mortgage Office. “The goal of redesigning the Web site is to provide easy navigation, while accessing rich content through desktops or mobile devices,” said Elizabeth Morales, ABS’s director of marketing and communications. “Visitors will enjoy intuitive navigation while accessing the software’s robust capabilities that have positioned it as the leading provider of loan servicing software.” The Long Beach, Calif.-based software company announced the launch of a redesigned site to offer its visitors a comprehensive overview of the company’s software. The newly redesigned site, supported by all browsers and mobile devices, with an ability to search has a refreshed simplified look and feel. It details all of the modules available for its clients’ scalable needs, company news and events, case studies, testimonials and

latest publications where Applied Business Software has been featured. “As a worldwide organization with world-class customers, we need a Web site to represent our forward-thinking mentality,” said ABS CEO Jerry Delgado. “We have been in business for almost 40 years and continue to evolve with the emergent mobile technologies and market’s current needs.”

New Black Knight Integration Boosts LOS

Black Knight Financial Services (BKFS) has announced that LoanSphere Closing Insight, a Web-based solution that automates the closing process, is now integrated with LoanSphere Empower, Black Knight's end-to-end loan origination system. This integration will help lenders gain significant operational efficiencies by providing a bi-directional communication technology to obtain, aggregate and validate fee quotes from multiple sources; direct integration with settlement agents to reconcile and finalize closing disclosure data; and seamless access to system-of-record data required for the loan closing process. Empower helps lenders electronically capture, process and close loans and is used by lenders to manage retail, wholesale and consumer-direct lending channels. Empower can be hosted by the lender or application service provider (ASP). Closing Insight is an innovative solution that supports the collaboration between lenders and their network of settlement agents to streamline the loan closing process and help them comply with their obligations under the CFPB's Integrated Disclosure (TRID) rule, which went into effect on Oct. 3, 2015. Closing Insight is delivered through RealEC's Exchange, an open technology platform that provides integration, data and workflow, and decisioning support through a 24/7 data exchange that connects more than 17,000 of the mortgage industry's service and solution providers with the top lenders in the industry. "Now that we have integrated the data and process between the Empower and Closing Insight platforms, clients can now seamlessly move between the two systems," said Jerry Halbrook, president, Black Knight's Origination Technologies division. "This integration is another example of how Black Knight can help lenders realize significant efficiency gains, while supporting timely loan closings to help lenders satisfy their regulatory obligations and provide a better borrower experience." continued on page 50

A National Leader in Wholesale and Correspondent Solutions

Together, we can

reach new heights.


Email or contact one of our Sales Executives:

Combined with a comprehensive product menu including Conventional, Jumbo, Portfolio and FHA solutions, you’ll quickly realize why NYCB has everything you need to take your business to the next level.

Together, we‌ Serve the borrower – Your customers want economic value, convenience, expediency and reliable counsel throughout the loan process. Your expertise and the NYCB platform enable you to originate and close loans faster, easier and at one of the lowest per loan costs of any loan origination channel in the industry. You are very well equipped to compete on the combined effect of dramatically lower operational costs, service responsiveness, and technological innovation.

Build trusted partnerships – By utilizing our Gemstone technology platform, you gain control over aspects of the mortgage transaction that experience... for you and your customer. There is no doubt this gives you an edge over your

This information is for use by current and prospective Clients of New York Community Bank, doing business as NYCB Mortgage Banking, and should not be distributed to or used by consumers or other third parties. Š 2015 New York Community Bank. All Rights Reserved.

National Sales Director Sheryl Heffernan Senior Vice President (310) 678-1613

Western Region Sean Gerrity Vice President (415) 876-8017

Central Region Debbie Schultz Vice President (832) 317-3931

Eastern Region Jim Ford Vice President (770) 590-7348

n National Mortgage Professional Magazine n DECEMBER 2015

The NYCB model serves the needs of Correspondent Lenders, Brokers, Community Banks and Credit Unions throughout the nation. Our proprietary web platform elevates your business by offering a

Going up? Let’s reach new heights together.

NYCB Mortgage Banking’s core focus is developing lending solutions that enable you to win today while preparing you for even greater heights tomorrow. As the mortgage division of New York Community Bank, we’re proud to be building on the Bank’s over 150 years of strength and stability.

NAMB PERSPECTIVE The President’s Message: December 2015 As we begin planning and budgeting for the new year, keep in mind some of the benefits of NAMB membership available through our portal on NAMB+. NAMB has negotiated discounts for members with many service providers for tools that can help your business thrive.

DECEMBER 2015 n National Mortgage Professional Magazine n


l Our newest provider is Infosight, which will provide you with a security awareness training program for you and your staff. This will help you meet the CFPB’s requirements, as well as protect your systems, network and consumer information. They offer tiered options based on your company size, as well as many other technology solutions, such as encrypted e-mail. Look for an announcement for the introductory Webinar to explain their offerings and solutions. l Best MLOs offers a low-cost source of the best practices of elite originators. Learn marketing and practical procedures to help your business operate in a highly efficient manner necessary for




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smaller shops and origination teams. offers a Web site for reviews of your services that consumers can visit to find a fair review of your past performances. Use this to market yourself through testimonials and reviews. Birchwood Credit is one of our longest partners and best received. Their credit and 4506-T services are highly regarded and very well priced for the service you receive. Brokers Compliance Group (BCG) is another long-time partner that offers complete compliance solutions for your business on a tiered scale depending on your volume. Custom Canvas Prints offers a quality framing solution for decorating your office as well as your home. LoanTek offers a pricing tool that incorporates with your lead management sites. It will automatically generate pricing for consumer sites such as Zillow and Trulia, while consolidating your investor partners’ pricing in a single solution. Maximum Acceleration provides

The CEO Perspective A Message From NAMB CEO Donald J. Frommeyer, CRMS I have written many articles over the past year not only for NAMB, but for other business publications. The response that I get is that most people like what I write and they either send me a note that they liked it, that they wanted more information, or that they may not totally agree, but understand what we do at NAMB. But the one that I got last month was one of those responses that left me hanging. It had to do with why would I devote so much time to NAMB and continue the cause. They could not believe that I would first spend three years as your president, but that I would continue to work with NAMB as the association’s CEO. I was really shocked that someone would take the time to write to me, but could not see the forest for the trees. The first question was, “Why would you take your time helping the association when you could be out there

tripling your business and making a lot of money?” My response to him was, “Since when is giving back for what you have a monetary decision?” You see, if everyone thought that way, we wouldn’t have a board of directors. We wouldn’t have members either and all of you would either be unemployed, working for minimum wage in a restaurant, or doing something that you really do not love. And the people who currently do lots of work for you would not be around. Just consider this. Years ago in Indiana, there was a law that was about to go into effect that would have made being a broker/originator so hard that people would not want to pursue that as a career. You were going to be required to update your last 52 weeks of financial statements and give them to the customer each time you met with them. It would list the last 20 transactions that you did with customers and would include the money you made,




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affordable personal coaching with many different coaching styles to choose from. MBS Highway is a well-known pricing alert system to keep you aware of directions and tendencies of mortgage-backed securities (MBS). Mortgage Currency is a subscriptionbased tool that keeps you up-to-date on agency and government underwriting guidelines. It includes a help desk, as well as marketing tools to use with your real estate partners. Simple Nexus offers a mortgage mobile application to increase your efficiency in processing, as well as to market your services. Simplii offers a high-end VOIP system for your business at a lower cost. Social 5 is a way to handle social marketing for you and your business without the large time requirement. Sure Payroll is a lower-cost payroll solution that keeps track of the forms and reports needed in your small business. Syncro offers a way to provide consumer chat on your Web site. Consumers can engage you while on your site by chatting through their computer or cellphone directly to your cellphone or computer. The Bond Exchange will meet all your state licensing bonding needs

the expenses that you had in your office, the fees that you charged every customer in the last 52 weeks and would include the cost of the loan giving them the complete information of all of the last 20 loan transactions. I know that this was 1990, but that is when we formed the Indiana Association of Mortgage Brokers (INAMB), gathered information and succeeded in stopping this legislation after its first reading. This was just in Indiana. There are numerous cases of this type of thing happening in every state over the last 25 years. Those who worked so hard to keep us out there are the volunteers in all of your states. When a state association reacts to things in their state, many times these situations are handled by volunteers. Let me assure you, these volunteers make no money for this fight for you. The reason they do this is purely for the love for the business that they are in and for the ability to be that entrepreneur that they are and to be able to make a living doing what they love doing—helping people. Let’s face it … this is a relationship-driven business and we all rely on our customers to send us more customers and to get referrals, we have to be good at what we do. This entails being able to work

at a fraction of the cost offered elsewhere. l USA Business Lending is a solution to those commercial transactions that you do not have the expertise or time to handle. Earn fees in combination with their team. l Warm Welcome is a solution to those who do not have a social marketing plan in place. They will take your business and provide s a social marketing presence for you without the pain and confusion. So, as you can see, there is a lot available on Visit the site and find the services you need to move your company ahead in the coming year. You can log on to the site the first time through your NAMB membership ID. There will be more offerings coming, and if you have an idea or need, please let your NAMB+ President Nathan Pierce know and he will work on getting them included. NAMB membership has many benefits and this one is to help your business grow in an efficient and affordable manner. Sincerely, Rocke Andrews, CMC, CRMS, President NAMB—The Association of Mortgage Professionals

within the confines of the state laws that we are governed by and the federal rules that go with them. Your volunteers at the state level and national level are these people working for you. I have gotten other responses as to why I am constantly advocating for membership and asking people to join. We are always being asked by legislators why we don’t have more members, and I always struggle with the answer because I really don’t have a good answer. I have been told things like, “It costs too much,” “It doesn’t do anything for me,” and the best one is that “I don’t get anything out of it.” The “It costs too much” excuse is so wrong. The current NAMB membership fees are $50 per year for an Associate Member and $120 per year for a Professional Member. Ladies and gentlemen, this is really cheap. If you were working in a plant making cars, you would have to join the union and these dues are expensive … way more than NAMB’s dues. And you have to pay an upfront fee and weekly fee in order to belong. When you get a check, they get their dues. As I have said before, I am an umpire in Indiana and my dues are three times this amount. I assure you that I do not make any where the

NAMB PERSPECTIVE amount of money as an umpire as I do as an originator, and I do a lot of Little League games and for those there is no pay! You do these games to help pay back for what you get and that is experience doing games. There are more than 115,000 originators out there doing loans for cus-

tomers and there are 109,000 of you who are not members of NAMB. I guarantee that most of you make a fairly decent living being an originator. So I am asking you … do your part. Become a member today and start helping NAMB in getting their membership numbers to where they should

NAMB EAST Registration Now Open! By Linda McCoy, CRMS Attention all originators! It is time to go online and register for NAMB EAST, Wednesday-Friday, March 9-11. This is an “I Do Not Want to Miss” Conference. The place is The Westin Hilton Head, located at 2 Grasslawn Avenue on Hilton Head Island, S.C. Just go to and register for this most exciting conference where you, as a mortgage originator or a mortgage professional can learn from the best in the industry. We are even giving you quality time to play every afternoon. This is a resort loca-

tion right on the beach and we expect you to make the most of having fun while you are there. You can attend the conference in the morning, visiting with all the vendors and spend the afternoon in the sun, playing golf, sun bathing, whale watching, fishing, shopping or just playing on the beach. We might even get a volleyball game going for those of you who have never had your feet in the sand. We sold out most of our booths and sponsorships for the conference in the first few weeks. We have so many great vendors for you to talk to and see if they can add value to you and your companies. The exhibit hall will be closed in the afternoon so the vendors can play too. We will meet

By Fred Kreger, CMC

back in the evening for food, drinks and networking. You can spend time visiting with vendors, attendees and friends. NAMB Membership Committee Chair Kimber White is going to be talking to as many of you as he can to find out what you need or want as a member. We are all trying to make NAMB better and better every year. For those who love to play golf, a PAC Golf Tournament is scheduled for Wednesday afternoon. They always say, some of the best business is done on the golf course. Do not miss this opportunity to play at Hilton Head. The conference will have a roundtable discussion lead by Brian Miller from United Wholesale Mortgage (UWM), a variety of classes, and an originator panel with Andy Harris. We have keynote speakers for each day who will keep you on the edge of your seats. One of our speakers is Lisa Myers, a former chief congressional correspondent for NBC News. She has won mul-

tiple Emmy Awards, and has covered seven presidents. She does not identify herself as a conservative or liberal, but as someone who thinks the media ought to be fair and unbiased. She will be quite interesting. As the conference date nears, we will be giving you more details about the events. Please sign up now and make plans to attend. We are very happy to offer you, as NAMB members, something of value. NAMB EAST is for mortgage originators and professionals who plan to stay in this business. A conference is a great place to come and express yourself and let us know what you think.

Donald J. Frommeyer, CRMS is chief executive officer for NAMB—The Association of Mortgage Professional. He may be reached by e-mail at

Linda McCoy, CRMS is broker/owner of Mortgage Team 1 Inc. in Mobile, Ala., a member of the NAMB Board of Directors and serves as NAMB East Committee Chair. She may be reached by phone at (251) 650-0805 or e-mail

nity and philanthropy. It is also important for a company to provide mentorship and training. This new adaptation must be aligned with a Millennial culture or they will not be motivated to thrive and grow within our new companies. I read a recent article in Forbes titled “Millennials In The Workplace: They Don’t Need Trophies, But They Want Reinforcement”. Millennials’ office walls are not covered in plaques and certificates for excelling in industry or workrelated accomplishments. The most important thing to remember is that Millennials no longer work for you, they work with you. The article pointed to four things you should know about the Millennial generation: 1. They want to grow, even if that means growing out of your company. 2. They want a coach, not a boss. 3. They don’t want to waste time on the little things. 4. They want balance and democracy.

remembering what used to be. They entered the mortgage industry after the meltdown and our regulations were intensified. My previous statement of thriving is so true. While we in my peer group sometimes look at surviving qualified mortgage (QM), the loan officer compensation rule changes or TRID, Millennials are looking way beyond these new rules and regulations. They want to thrive in our post-mortgage meltdown and Dodd Frank Act world. We know as leaders in our industry, branches and associations are recognizing this and frankly are enjoying this newfound youth exuberance. I, for one, find it very refreshing and it gives me a great sense of optimism. I am personally still coachable and often remind myself that I still need to learn. This is why I am so engrossed in helping transition our new workforce and look forward in making myself and my own organization thrive with some great new Millennial leaders right beside me. Thank you and Namaste’.

Training is key. Show them what technology and innovation will be used to train. Webinars can be a key training tool. They may need that mentorship to replace the two years of experience that our generation had focused on when we were looking at the mortgage industry. It will be much easier to train these new Millennials coming up the ranks. They are living in a post-Dodd Frank world. They are not living in the past and

Fred Kreger, CMC is branch manager at American Family Funding, a Division of American Pacific Mortgage. He is a past president for the California Association of Mortgage Professionals (CAMP) and currently president-elect and Government Affairs Vice chairman for NAMB—The Association of Mortgage Professionals. He can be reached by e-mail at or call (661) 505-4311.


n National Mortgage Professional Magazine n DECEMBER 2015

We at NAMB had a great panel of The Young Mortgage Professional Association at NAMB National recently in Las Vegas. This group provided me with some insight that I was unaware of prior to my attending the conference. I know it might be the cart before the horse, but Millennials are and will be selling to other Millennials. In my first article a couple of months ago, I had laid out some foundations on hiring, training, and how to keep motivating Millennials: “To attract today’s job entering Millennial, we need to offer more than just here is your loan application software and now go originate. They want to be given a goal and then let them figure out how to master it and move on to the next goal. They, in general, do not subscribe to the idea of paying your dues in order to move up in an organization. We need to be transparent about their career path or we will lose them in the short run. They also need to know that there are rewards for their achievements and recognition for their contributions and accomplishments. They need to see the path of

how to move up and us, as their managers, need to balance that need with our business goals. We need to bring them into the goal-setting experience and allow them to have a voice in order to contribute and not expect them to just have a “follow the rules” mentality.” I want to now focus on getting Millennials into our workforce and keeping them motivated to not survive, like some of my peers feel, but thrive. Some new and great information was divulged to me during NAMB National. The Millennials who spoke talked about the way they are entering the workforce. Many are coming in through their family and friends. That relationship is of high value. As we look at hiring them, we need to focus on getting Millennials to be introduced to our industry by creating a culture that they want to join. I have been taught that philanthropy is an important part of their thought process when looking for a company to join. Look at other industry leaders that are hiring this generation. A lot of them have a strong emphasis on community and charity. Millennials will look at their personal alignment with community’s goal and decide if a new company for them to join has similar goals with respect to commu-

part of a great organization that believes in you and what you do … no questions asked!

Mortgage-Minded Millennials: The Call to Thrive

be. We will never get all of you to be members, but it is your obligation to join and become a member of the association that represents you 365 days a year. Go to and become a member. And let me be frank … we need you. So come help us and be


getting toknow Linda McCoy, CRMS NAMB Director B Y

DECEMBER 2015 n National Mortgage Professional Magazine n

22 The journey from a small interior decorating business in rural Mississippi to the board of directors of NAMB— The Association of Mortgage Professionals may not seem like your typical journey from Point A to Point B, but for Linda McCoy, it was an unusual road that resulted in a prominent and successful career in the mortgage industry. National Mortgage Professional Magazine spoke with McCoy about her distinctive career trajectory and her work as part of NAMB’s leadership team. How did you get into the mortgage profession? Was this your original career choice? I got into the mortgage business by accident. My husband, Tiffany, and I owned an interior decorating business in a small Delta town in Mississippi. We did quite well there, until big corporations came in and started buying up the rich cotton land. Big machines took over where laborers had tended to the fields for generations. The plantation owners and their families either died off or moved on leaving the towns to dry up. One day, I looked around and decided this was not a good place to raise a family anymore. My children deserved more opportunity, so we went back to school and changed careers. We decided that we would


become attorneys. We graduated from Delta State University and were ready for Law School at the University of Mississippi in the fall, but we were on a waiting list. So, we moved to Mobile, Ala., for the summer and decided to get real estate licenses. I was at the real estate office one day when a lady came in and asked if there was anyone there who would like to become a mortgage originator— there was an opening at her company. Since my husband was in graduate school for the summer, I decided he might have time to do that—and we needed the extra money. He went to the interview and got the job. After a few months, he told me to quit my other jobs and join him. We both became mortgage originators over 20 years ago and loved it.


teachers and I learned so much. After a few years, I was asked to be on the AMPA board and spent years working my way up until I finally became president in 2010. As I became more involved on the state level, I found out how important NAMB was for me as well as the state association. I started going to NAMB’s Legislative Conferences and Delegate Council Meetings to represent AMPA. I was asked to be on an NAMB committee and become more involved. I realized that people needed to step up and support their trade association.

What positions have you held in NAMB, and what were your responsibilities? I started out with the Membership Committee and was soon asked to be a director on the NAMB board. I How did you first become involved found out that once you are on the with NAMB? I went from working as a top originator board, you end up on just about all at one company closing more than 300 of the NAMB committees. I have loans each year, to becoming a branch served as a director on the NAMB board for four years now and I have manager at another major lender. I served two years on the NAMB+ found that I was turning away too many customers that needed my help, board of directors. I feel like most of my so my husband and I opened Mortgage Team 1 Inc. Thus, I went from retail to responsibilities have been geared towards increasing membership and being a broker. helping with government affairs. I I had a lot to learn, so I turned to have helped on the NAMB National the Alabama Mortgage Professional Convention Committee for the last Association (AMPA). They had great two years and now have the great education classes by NAMB-certified

honor of being the NAMB East Committee chair. My responsibilities are to help make that conference one that brings real value to the originators and all who attend. I want NAMB East to be well-attended and one that we will remember for many years to come as something special. Why do you believe it is important for mortgage professionals to become involved with NAMB? I cannot even tell you how great NAMB has been for my business. These mortgage professionals who have donated their time and talents to NAMB are among the most knowledgeable in the industry. They keep us updated on anything that affects us as mortgage professionals. I need to be a part of an association that has my best interest as top priority and I know that NAMB does. What do you see in 2016 for the mortgage profession? I see TRID becoming a part of everyday origination, and I see people buying, building and refinancing. I see more hope than we have had in many years. I see NAMB getting stronger, bigger and better. What can the industry do to attract more young people into mortgage careers? That is a concern for NAMB. We have

NAMB PERSPECTIVE seen the statistics that state the average age of today’s originator is over 50-years-old, but there are a few young people starting to enter the industry. We can start mentorship programs in our own offices. I have heard of college programs in the planning stages for new originators. I think an apprentice program would be good where they started as a junior processor and learned the business from the beginning, and then move into origination. We could hire bright new college graduates and invest in their education by sending them to a mortgage originator school. I think maybe writing a few articles on “What a Great Career You Could Have in the Mortgage Industry” might be helpful.

Looking back on your career, what do you see as you greatest accomplishments? I love helping people reach their dream of homeownership. I think the greatest accomplishment would be opening and managing Mortgage Team 1 for the last 13 years. In my career as a mortgage professional, I

Outside of work, how do you spend your leisure hours? We have 10 acres in the country. It has

a stocked pond with a fountain, a pistol range and play areas for the grandchildren with beautiful plants, trees and flowers. We pick up sticks, make bonfires, take target practice, ride the four-wheeler, fish, sit in our chairs, relax and admire the scenery. Phil Hall is managing editor of National Mortgage Professional Magazine. He may be reached by email at

NAMB+ is an independent, wholly-owned, for-profit marketing subsidiary of NAMB, The Association of Mortgage Professionals. Dear Mortgage Professional, Happy Holidays! I truly hope that you all are enjoying a very safe and happy holiday season. Let me first say “thank you” to each of you who have supported us by using one or more of the NAMB+ Endorsed Providers listed below this past year. As you almost certainly know from experience, our NAMB+ Endorsed Providers are tremendous to work with and they are dedicated supporters of our industry and our trade association, NAMBthe Association of Mortgage Professionals. Whether you are searching for a last-minute gift idea for a family member, friend or colleague, or you are looking ahead to the New Year for ways to improve your business in 2016, is where you should be shopping. Our Endorsed Providers are offering exclusive discounts and promotions, and they are eager to work with

you. Please, take a moment and visit to see all that our Endorsed Providers have to offer. And, be sure to check back after the 1st of the year for new offerings that we are very excited to unveil. Sincerely,

Nathan Pierce, CRMS, CMP, President NAMB+, Inc. See below for a complete listing of the current NAMB+ Endorsed Providers and visit for more information.

23 Go to to start learning from the best. NAMB members enter NAMB Member Coupon Code: NAMB15 is free to get started with the option to upgrade if you’d like. As an NAMB member optional upgrades are discounted by 10%.

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n National Mortgage Professional Magazine n DECEMBER 2015

What are some of the challenges facing Mortgage Team 1 in today’s market? It’s just little things that could be improved or made better to help us speed up the process of getting a loan closed. Hiring more staff and training them with all of the ever changingrules and regulations is difficult at times. Since TRID took effect, it is taking a few days longer to close loans. Yes, the three days that the purchaser has to wait to close after receiving a copy of the closing disclosure is causing hardships on some purchasers. We are trying to set better expectations for closing dates. At times, it’s tough to get the title companies and the lenders working together to get the closing disclosure correct so the loan can close. This is just an adjustment period for us all, but I think we will get it figured out soon.

What goals do you have for 2016? My personal goal is to see Mortgage Team 1 increase business and to have more time to be with my family. I know that being a part of AMPA and NAMB will help me reach my personal goals, but I want to give back to my trade associations. I want to help bring about some conformity in the industry. This year, NAMB hosted Wholesale

Summits to bring together the leaders in the industry so that we could discuss the issues we all face as mortgage professionals. It takes time, but we made the first steps and the wholesalers who were a part of the summits made a commitment. I just love being a part of a group who are making a difference.

What is the housing market like in your home state of Alabama? In the last year, we have seen a great increase in people buying and building new houses. We are lucky because we have had so many big companies choose Alabama as their home. We have car manufacturers and are building airplanes, and so many support companies are moving in to help with production. There were a few times this year that I told my office that business was beginning to feel like it did before the financial crisis.

have helped more than 5,000 clients obtain homeownership.

What You Need to Know About the HomeReady Loan

By Karen Deis

DECEMBER 2015 n National Mortgage Professional Magazine n


So, Fannie Mae has jumped back into affordable lending with a revolutionary new loan called HomeReady. This is a great solution for your Millennial homebuyers who have the ability to pay a mortgage, but not the downpayment needed. You can even use “boarder” income, which was unheard of until now. In a nutshell, here’s what it means to you and your clients:



l Fannie Mae is replacing their current Affordable Lending Product (the MyCommunityMortgage) with their new product designed for Affordable Lending, called the HomeReady mortgage. l Fannie Mae will retain the Standard 97 product, but and has retired the MyCommunity Mortgage as of Dec. 12, 2015. This article will highlight the start date of the HomeReady product and the improvements/benefits from their current Affordable Lending Product (MyCommunityMortgage). After reading all of the Fannie Mae announcements and supporting documents, here’s the interpretation for you in plain language. We’ll first look at the new enhancements and/or requirements: 1. Enhancement: Desktop Underwriter will actually flag potentially eligible borrowers based on census tract and borrower income … very cool! 2. Enhancement: Competitive pricing and simplified lenders pricing will eliminate or cap loan level price adjustments which should help keep mortgage payments affordable for borrowers: Standard risk-based pricing waived for LTV’s >80 percent with a credit score of > 680 (a 150 bps cap will apply for loans that fall outside these parameters). This may or may





not be passed on to you from your wholesale lender or, if you work for a mortgage banker, from your secondary marketing department. Requirement: An online education course that prepares the borrowers for the homebuying process and assists in post-purchase support. Training is provided by Framework, and the cost is $75 and may be credited by the lender subject to maximum contribution limits. Enhancement: Introducing, for the first time, an ability to use income from a non-borrowing household member as a compensating factor in DU only to allow a DTI Ratio >45 up to 50 percent (important benefit: Non-borrower household income is not considered qualifying income and is not applied against the income limits for the program). The non-borrower household income must total at least 30 percent of qualifying income before it can be considered a compensating factor. The income can be from multiple non-borrower household members. And, finally, this income source can be from both relatives and non-relatives. Enhancement: Allowing income from non-occupant co-borrowers, such as parents, and allowing rental payments like from a basement apartment to augment borrower’s qualifying income (up to 30 percent of total qualifying income)—based on certain parameters (important note: LTV limited to 95 percent for loans with non-occupant co-borrowers and the income is subject to the income limits for the product). Enhancement: Allowing rental income per standard rental income guidelines for accessory dwelling units Enhancement: Allowing the product for both first-time and repeat homebuyers with as little as 3% down. Enhancement: HomeReady will be available to borrowers at any income

level for properties in designated lowincome census tracts. 9. Requirement: HomeReady will be available to borrowers that are at or below 100 percent of the area median income for properties in highminority census tracts or designated natural disaster areas. 10.Requirement: For all other remaining census tracts, HomeReady can be used for borrowers that are at or below 80 percent of AMI. 11.Requirement: Reduced MI coverage requirement for LTV’s above 90 percent at 25 percent coverage (this used to be 18 percent coverage on the MyCommunityMortgage product). 12.Enhancement: Flexible sources of funds for downpayment and closing costs with no minimum borrower contribution on one-unit properties—this includes Cash on Hand—an exclusive opportunity only available on the HomeReady product. The changes to the product announced in Fannie Mae selling guide SEL-2015-12 have been addressed above. There is a great deal of information about this program, but the single most valuable document is the FAQ document provided by Fannie. It contains 57 questions and answers that are spot on. Trust me, we have read each and every document that Fannie Mae has released about this new product and the FAQ is comprehensive, direct, and covers every topic for eligibility. The AMI limits will be applied by Fannie Mae during the DU assessment. They will assist DU in determining borrower eligibility as noted above, and will likely be the driving force behind flagging the lender if a borrower is eligible for the HomeReady product. You will have until June 1, 2016 to deliver loans that were originated on the MyCommunityMortgage Product. It actually may no longer be the best fit loan for some of your borrowers, so you may want to opt to originate the loan again as

a HomeReady product. There are other opportunities available on the HomeReady product, like the manual underwriting option for borrowers with thin credit profiles. The FAQ document is a really a great resource for determining the eligibility of a manually underwritten HomeReady product. Also, on two- to four-unit properties, the LTV’s are reduced and the borrower must invest a minimum three percent contribution of own funds. You can combine HomeReady with community seconds, gifts, grants, etc. and get to a CLTV of 105 percent for one-unit properties. You can combine on the HomeStyle Renovation products if you work with a lender approved to deliver HomeStyle products. DU Version 9.3 will have new fields added for income types—like “non-borrower household income” so that it can make the assessment for necessary conditions. If the income is not needed per DU assessment, and you added the income anyway, DU will not respond with conditions for documentation! If you did not select the Affordable Lending Product when you ran DU, your findings will review the property census tract and apply the income limits. If borrower meets guidelines, DU will indicate that the loan may be eligible for the HomeReady product. This is an awesome product. And subscribers to can download a Mortgage Talking Points article to use in their marketing to real estate agents and clients, social media and blog posts. Karen Deis of had been in the mortgage business since 1972 and left the industry in 2000 to focus on helping loan originators and company owners increase their business and close more loans. is a NAMB+ endorsed provider and members of NAMB can get a special subscription discount at She may be reached by e-mail at

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n National Mortgage Professional Magazine n DECEMBER 2015


· Mortgage lates last 12 months OK


The Five Cs of Lending… With a Twist By Michael Boggiano In the mortgage business, lenders determine creditworthiness based on a number of factors related to a borrower’s financial situation. Often referred to as the “Five Cs,” these fundamentals are described as: 1. Character: A subjective measure of the borrower’s willingness and ability to repay the loan, taking into consideration the borrower’s credit and financial strength. 2. Capacity: A financial evaluation of the borrower’s ability to repay the loan. 3. Capital: The amount of money invested in the business or property. 4. Collateral: The asset securing the loan or additional forms of security, including guarantees provided to the lender. 5. Conditions: The loan purpose and use of loan proceeds. A wide variety of lenders incorporate a version of the Five Cs into their borrower assessments. While a particular lender may consider one “C” to be more important than another, a borrower can typically expect all five to factor into their general evaluation. But why should lenders be the only ones who get to evaluate their clients? Let’s flip the concept for a moment, to a mortgage broker considering a potential lender partner. You can apply a similar approach, with a different set of Cs, to the due diligence process when evaluating prospective lender partners. Here are “Five Cs” to consider:


1. Credibility: The lender’s history of funding loans. Are they experienced or are they new to the marketplace? What is their reputation (don’t be afraid to ask for references)? Are they well-capitalized to fund their loans? 2. Certainty of execution: Following timelines and guidelines to demonstrate the ability to close transactions in a reliable, consistent manner. Plainly stated … do they do what they say they’re going to do, when they say they’re going to do it? 3. Consistency of underwriting: Well-defined guidelines that are transparent and consistently applied, rather than a new approach to every transaction. 4. Customer experience: A positive experience as supported by testimonials, which indicates that the lender treats and values the client relationship in a manner consistent with your expectations. 5. Continuity: From the senior management team to sales team, the more history together, the better the indication that there is harmony within the organization and a productive lending platform, not to mention an environment more conducive for a favorable customer experience. Think about the best lender partners you have worked with over your career. Do they score high marks in the Five Cs above? Probably. Perhaps this exercise even brings to mind some not-so-great lenders, and a “C” or two where they fell short. If you measure prospective partners against these Cs, you will quickly discover which lender best suits your specific needs. A final thought about another important C: Clients. Your client relationships make up the foundation of your business. As a mortgage professional, you want to work with a lender who values relationships the same way that you do. When you can find that alignment, with the right partner and program for your borrower, it’s a grade-A match. Michael Boggiano is national sales manager for Silver Hill Funding, a smallbalance commercial mortgage lender offering nationwide financing from $250,000 to $1 million. He may be reached by phone at (888) 988-8843 or e-mail


nmp news flash continued from page 16

includes data from the U.S. Department of Education and American Housing Survey in its Annual Homeless Assessment Report to Congress. Improved data collection informs HUD’s strategies for ending homelessness. Across the nation, communities are implementing systems to quickly and effectively house individuals and families experiencing homelessness in a coordinated way. They are working together across agencies, creating unprecedented partnerships toward achieving the national goal of ending homelessness.

Bill Rewriting the QM Rule Passes House The House of Representatives rebuked the Consumer Finan-cial Protection Bureau’s Qualified Mortgage (QM) rule last night by passing HR 1210, the Portfolio Lending and Mortgage Access Act. Under the current QM rule, smaller depositories enjoy an exemption that enables them to achieve QM status without having to follow the ability-to-repay rule. This proposed legislation broadens the exemption to depositories of all sizes, but only if the loan remains in the portfolio a lender would lose the “safe harbor” protection for the loan if it is packaged and sold into the secondary market. Rep. Andy Barr (R-KY) hailed the House passage as a bipartisan achievement, even though the 255-174 vote was almost entirely along party lines, with only 12 Democrats voting for the bill and one Republican opposing it. Barr, who unsuccessfully introduced the same legislation in the previous Congress, insisted that this rewriting of the CFPB’s rules would benefit consumers and the wider economy. “This reform would have the dual benefit of promoting responsible lending practices which will prevent future crises and bailouts, while encouraging economic growth through expanded homeownership,” Rep. Barr said. Several trade groups hailed the House vote as a step in the right direction. “We strongly support this commonsense effort to provide credit unions and their 100 million member-owners regulatory relief and look forward to continuing to work with Congress to help advance this legislation,” said Brad Thaler, vice president of legislative affairs for the National Association of Federal Credit Unions (NAFCU). “Loans held in portfolio are well underwritten and conservative by their very nature—banks hold only the safest loans in portfolio,” said James Ballentine, the American Bankers Association’s executive vice president of congressional relations and political

affairs. “There is no need to create additional barriers for creditworthy borrowers for loans held in a bank’s portfolio.” But Rep. Maxine Waters (D-CA), ranking member of the House Financial Services Committee, insisted that the bill would turn the clock back to the pre2008 origination environment. “The bill undermines the anti-predatory lending provisions of the DoddFrank Act and virtually eliminates one of the most significant consumer protection rules implemented by the CFPB,” Rep. Waters said. The bill’s future is hazy, at best–there is no great movement in the U.S. Senate to reform the QM rule, and the Obama Administration is promising a veto. “The bill would limit the right of borrowers to file claims against holders of such loans and against mortgage originators who directed them to the loans,” said the White House in a press statement. “HR 1210 also would open the door to risky lending by allowing balloon loans made in any geographic area to qualify for the safe harbor as long as they are held in portfolio. The Administration strongly opposes this bill because it would undermine critical consumer protections by exempting all depository financial institutions, large and small, from QM standards—including very basic standards like verifying a consumer's income—as long as the mortgage loans in question are held in portfolio by the institution. This bill would undermine the essential protections provided under the Qualified Mortgage rule.”

Commercial/Multifamily Delinquencies Drop in Q3 Delinquency rates for commercial and multifamily mortgage loans continued to decline in the third quarter of 2015, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report. “Commercial and multifamily mortgages are performing very well,” said Jamie Woodwell, MBA’s vice president of Commercial Real Estate Research. “Delinquency rates for loans held by life companies, Fannie Mae and Freddie Mac are all hovering near zero. Among loans held by banks, the delinquency rate for multifamily loans is now lower than it has been since the series began in 1993, and the delinquency rate for mortgages backed by other commercial properties is down to levels seen before the most recent recession.” The MBA analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, commercial continued on page 39


n National Mortgage Professional Magazine n DECEMBER 2015

Survival of the Fittest:

Weathering the Storm With a Robust Management Internal Control Function


By Vincent Spoto In today’s marketplace, regulatory scrutiny has taken center stage. No longer can mortgage originators, loan servicers and other mortgage banking service providers take a ‘blind-eye’ to regulatory practices aimed at protecting consumers. Within the past decade, a large number of consumers have purportedly fallen prey to a host of unscrupulous lending, servicing, default management and other mortgage finance administration practices. As a result, a series of regulatory requirements have been enacted to help reign-in the ‘bad guys’ and offer protections to consumers nationwide. In this regard, a series of guidelines have been enacted by the Consumer Financial Protection Bureau (CFPB) principally aimed at protecting consumers from firms engaging in critical residential mortgage finance activities

and practices. A major fallout of these new regulations has been shrinkage as to the number of players in the industry due to an increase in costs relating to the vast organizational and personnel changes necessary to ensure compliance. This, together with a significant number of consolidations that have occurred throughout the industry has sharply reduced the number of active mortgage banking participants. Further, adding to this contraction is the weariness of investors to participate in residential mortgage-backed securities (RMBS), thereby leading to a significant reduction undertaken by issuers to package, structure and sell RMBS. Hence, today’s mortgage finance industry is merely a fraction of what it was less than 10 years ago and only the strongest and most committed players remain. Surviving in today’s marketplace is clearly linked to having a strong commitment (both organizationally and financially) to a robust internal control

environment designed to protect consumers. This commitment is also an essential cornerstone for continued growth in 2016 and beyond, and is something that more and more key players in the industry are beginning to embrace. As such, many mortgage banking firms today have begun implementing formal Management Internal Control (MIC) utilities designed to proactively ensure that key mortgage finance functions are appropriately managed and controlled to ensure proper consumer protection. Strong MIC functions are also helping many firms identify and reduce process redundancies, streamline operations and ultimately lower costs. Once outside regulators have commenced a formal audit and have identified internal control and processing inefficiencies relating to mortgage lending and/or loan servicing practices, the ‘cat is out of the bag’ so to speak and damages have already occurred to the consumer

as well as to the firm’s overall marketplace reputation and cost infrastructure relating to remediation efforts. Beginning to emerge as a critical component of robust MIC functions within mortgage finance organizations is the development and implementation of formal Business Self-Testing (BST) Programs. Such programs are being designed to monitor compliance with applicable laws and regulations for a host of mortgage banking functions. BST is slowly becoming the first line of defense in ensuring that mitigating controls are working as intended on an ongoing basis. Properly designed and implemented, BST programs can also be utilized by auditors and external regulators to reduce the scope of their testing and modify examination procedures accordingly. For 2016 and beyond, mortgage bankers can more effectively weather the storm brought on by increased regulatory scrutiny and compliance requirements by adopting

ner with the business to more effectively drive growth in a controlled environment aimed at protecting consumers from improper residential mortgage finance activities and practices. The BST program should be formally documented, with critical components of a ‘winning’ program inclusive of the following: l Sampling methodologies and related sampling criteria; l Testing strategies, testing procedures and guidelines; l Development of key metrics and related reporting protocols; l Development of corrective action plans; and l Development of training guidelines and programs.

It goes without saying that BST results should be documented and formally reported to senior management on a consistent basis. As appropriate, it is suggested that MIC choose and consider the following when capturing and reporting testing results: l Summary of errors by regulatory/legal issue; l Error trending by process and by regulation or law; l Repeat errors that have occurred over three consecutive reporting cycles (i.e. quarterly); l Status reports by functional area; and l Additional enhanced reports, as deemed appropriate. continued on page 83



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© Copyright 2007-2015 Carrington Mortgage Services, LLC headquartered at 1600 South Douglass Road, Suites 110 & 200A, Anaheim, CA 92806. 800-561-4567. NMLS ID 2600. Nationwide Mortgage Licensing System (NMLS) Consumer Access website: AZ: Mortgage Banker BK-0910745; 2159 McCulloch Blvd 4, Lake Havasu City, AZ 86403. CA: Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, File 413 0904. CO: Check license status of your mortgage loan originator at GA: Georgia Residential Mortgage Licensee 22721. IL: Illinois Residential Mortgage Licensee. KS: Supervised Loan License SL.0000313. KY: Mortgage Loan Company License MC21112. MN: This is not an offer to enter into an interest rate lock agreement under Minnesota Law. MO: Residential Mortgage Broker License 09-1746-S. NH: Licensed by the New Hampshire Banking Department. NJ: Licensed by the N.J. Department of Banking and Insurance. NY: Licensed Mortgage Banker—NYS Department of Financial Services. New York Mortgage Banker License B500980/107664. OH: Ohio Mortgage Broker Act Mortgage Banker Exemption MBMB.850208.000 (FHA, DE & VA automatic loans only) OR: Mortgage Lender License ML4886. PA: Licensed by the Department of Banking. RI: Rhode Island Licensed Lender, Lender License 20112809LL. VA: Licensed by the Virginia State Corporation Commission MC5382. WA: Consumer Loan License CL2600. Also licensed in AL, AR, CT, DE, DC, FL, ID, IN, IA, LA, ME, MD, MS, MT, NM, NC, OK, SC, TN, TX, UT, WV and WI. NOTICE: All loans subject to credit, underwriting and property approval guidelines. Offered loan products may vary by state. There is no guarantee that all borrowers will qualify. Restrictions may apply. This is not a commitment to lend. Terms, conditions and programs are subject to change without notice. This information is for mortgage professionals only and is not intended for distribution to consumers. Carrington Mortgage Services is not acting on behalf of or at the direction of HUD/FHA or any government agency. All rights reserved.


n National Mortgage Professional Magazine n DECEMBER 2015

MIC serves as a collaborative partner with the business, provides subject matter expertise for legal regulatory compliance issues and is the focal point for issue escalation. In addition, MIC would inform the business of new regulations or changes to existing regulations which warrant additional testing or changes to processes and current test routines. MIC

should also independently validate BST test results and may perform sub-testing of certain activities, as deemed necessary. Based on this validation, MIC may from time-to-time make process change recommendations to the various lines of business. In addition to processes performed internally, functions performed by external thirdparty vendors (such as property valuation services, title services, property management services, etc.) should be subject to BST as well. This is critical since processes performed by thirdparty vendors generally represent greater risk than do processes performed in-house. By utilizing a formal BST program as its base, effective MIC utilities can part-

a robust MIC function with a solid BST Program at its core. Simply speaking, the purpose behind having a formal BST Program is for business owners to monitor ongoing compliance with legal and regulatory requirements for certain processes and functions performed throughout the organization. An effective BST program should be designed to monitor compliance with applicable laws and regulations via periodic and continuous testing of these processes. Through a program of independent monitoring and testing that is generally performed by a dedicated MIC utility, reasonable assurance can be obtained to validate that key assumptions, data sources and procedures utilized in measuring and monitoring compliance risk can be relied upon on an ongoing basis; in the case of transaction testing, assurance can be obtained that controls are working as intended. The testing of controls and remediation of deficiencies identified as a result of testing activities are essential to proactively maintaining an effective internal control framework. Unlike internal audit utilities, an effective MIC function is embedded within each business line (i.e. origination, servicing, etc.). Effective and credible MIC utilities should have a dual reporting line into both the designated business head and into the CEO’s office. Some have argued that having both an internal audit function and a separate [line-driven] MIC function within a given organization is overkill, creates redundancies and increases costs. Given today’s regulatory focus and scrutiny, many are beginning to realize that the costs associated with this added level of internal control and oversight is an absolutely critical investment necessary to properly maintain and grow the business. Specifically, this dual reporting structure ensures that the following two essential factors coexist: l Business ownership: To ensure that complete ownership by the business (whether it be origination, servicing, default management administration, etc.) exists to ensure that practical business concerns are taken into consideration when implementing and monitoring regulatory compliance processes necessary to balance consumer protections with goals and initiatives to grow the business; and l Independence: To ensure that an appropriate level of independence is maintained in order to provide an overall sense of credibility to the function as well as to provide necessary comfort levels to all internal/external audit and external regulatory constituencies.

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DECEMBER 2015 n National Mortgage Professional Magazine n


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


n our seventh 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 2015 and beyond. We’d like to congratulate all of the following individuals named to our “40 Under 40” list for 2015—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.

Daniel Andersen Senior Mortgage Banker Peoples Home Equity • Oak Brook Terrace, Ill. With just eight years in the mortgage business, Daniel Andersen has surpassed each and every goal that he set for himself when he began, to be the mortgage professional that everyone wants to work with. Daniel is a senior mortgage banker at Peoples Home Equity, and has built The Andersen Team. Daniel is very knowledgeable and his customer focus is commendable. He works hard to ensure that every borrower has the best loan experience. Daniel has more than 175 FiveStar Zillow reviews, and is pleased to be part of the 40 Under 40 this year!

Vice President, National Inside Sales and Development Freedom Mortgage • Phoenix, Ariz. Help others and you too will succeed. Karl Benjamin’s many business partners will be the first to tell you about his influence on their growth. Having started his wholesale career at Countrywide as an account executive to his recent promotion as vice president of national inside sales at Freedom Mortgage, Karl has always been trying to find ways to make others around him more successful. A graduate from Arizona State University with a communications background, Karl believes that a strong sales team begins with great communicators who strive to make others better through longterm success.

Jenay Bowen Senior Loan Officer Summit Funding • Plano, Texas Jenay Bowen leads as a top producer in the lending industry. She has more than 10 years of experience in the business and offers a well-rounded, highly communicative mortgage lending process. She and her team are committed to providing the highest level of integrity and genuine care and concern for their clients. Jenay is also a professional business coaching member of The Core Training Inc. where she continues to strive and learn to be the best she can be. What drives Jenay most is her family. As a wife and mother of two small children, she understands that family is extremely important.

Chief Audit Officer Parkside Lending LLC • Chandler, Ariz. Serving as chief audit officer for Parkside Lending LLC, Mike Burns manages internal audit, fraud, origination and servicing QC programs. Mike is proud to be a part of a company that is committed to making a positive difference in the lives of both our clients and their customers. He recently implemented a multi-stage pre-fund QC process that reduced the impact of QC audit on closings by 80 percent. With more than 15 years in the industry, his experience includes operations, training, quality control, process improvement, and risk management. Mike earned his MBA in 2009 and is a Certified Internal Auditor candidate.

Cari Burris Director of Operations Nationwide Appraisal Network • Oldsmar, Fla. Cari Burris is a founding partner of Nationwide Appraisal Network. Her leadership and dedication to the organization is believed to be what sets the company apart from many of its competitors. A main goal for Cari this year includes the design of a more technologically efficient solution for enhancing quality control. Her team follows in her footsteps when it comes to service and commitment to vendors and clients and as a business owner, she believes her team’s involvement and dedication to the community is truly inspirational. On her downtime, she is spending time with her family, cooking and gardening.

Amiee Carr Loan Officer Southern Trust Mortgage • Virginia Beach, Va. Amiee Carr transitioned into the mortgage industry in 2013 after spending eight years as a real estate agent in Hampton Roads, Va. She prides herself as a trusted resource for her clients as well as real estate agents. Aimee is committed to helping clients through the entire lending process, from planning/loan application to closing and beyond. Her goal is to create lasting client relationships by making the process as stress-free as possible with good communication backed by a great product. n National Mortgage Professional Professional Magazine Magazine n n DECEMBER DECEMBER 2014 2015 P R O F E S S I O N A L M A G A Z I N E ’ S 4n0National U N DMortgage ER 40

Karl Benjamin

Mike Burns


Product Manager and Head-Mortgage Center of Excellence Wipro Gallagher Solutions Inc. • Franklin, Tenn. Abhinav Asthana manages the enterprise loan origination product innovation and consulting strategy. He is a design enthusiast and over the course of the last five years, he has led strategies in reimagining borrower’s journey and has been championing Borrower Journey Engineering and Design Thinking in the mortgage industry. He has published thought papers on creating digital process “pathways” for Millennial borrowers. Abhinav has been a trusted adviser to several of Wipro’s clients in the mortgage space and has helped them re-imagine their borrowers’ journeys in addition to adding mobile capabilities to help their sales staff offer “concierge-like” services to their borrowers.

President & CEO BRIK Home Loans • San Diego Andy Brikho has consistently performed and has been awarded top producer for 11 consecutive years. His 16 years of successful lending experience has led him to open up his own company, BRIK Home Loans, based in his hometown of San Diego. BRIK Home Loans strives to efficiently serve its clients with the utmost integrity, honesty and dependability. In his personal time, Andy loves to spend time with his wife Sandra and three children. Andy enjoys spending time with family, laughter, traveling, charity, and being active in the community.


Abhinav Asthana

Andy Brikho

33 33

John R. Cushma

Kelly D. Haney Branch Manager, RMLO Residential Bancorp Inc. • Dallas As a talented, experienced, and trustworthy mortgage professional, Kelly D. Haney has been helping individuals and families realize their dreams of homeownership since 2000. Kelly began his multi-faceted career in the mortgage industry as a call center representative. He quickly advanced into loan origination and sales management, gaining excellent skills in loan transactions, client relations, team leadership, and training and development along the way. For the last seven years, Kelly has undertaken leadership roles that have included directing business operations, managing teams of processors, facilitating regulatory compliance, handling complex transactions, and streamlining existing operations.

Monika B. DeJesus

Andy Harris, CRMS

Loan Originator United Northern Mortgage Bankers Levittown, N.Y. Monika B. DeJesus currently resides in Long Island, N.Y. with her family and two dogs. She have many natural skills that have been polished through years of management, sales experience and education. Additionally, Monika has worked in fields which include college planning and credit repair, which have provided the knowledge to assist her clients in these areas. In 2006, she graduated from NYIT with a BA in Business Management. She is currently a mom to Edward and an expert mortgage planner with United Northern Mortgage Bankers and has been in the mortgage field for nearly nine years.

President Vantage Mortgage Group Inc. • Portland, Ore. Andy W. Harris, CRMS is owner and president of Vantage Mortgage Group Inc. based in the state of Oregon and serving the Pacific Northwest. Vantage Mortgage is one of the most unique and innovative mortgage brokerages in the U.S., embracing wholesale lender competition and choice for best price and execution through technology and compliance. Andy’s nationally-published outspoken articles supporting originator independence can be found in numerous industry publications. He has served as past president for the Oregon Association of Mortgage Professionals (OAMP) and currently serves as treasurer on the executive board with NAMB— The Association of Mortgage Professionals.

DECEMBER 2015 n National Mortgage Professional Magazine NATION A L RTGAGE PROFESSIONAL





Founder/Partner • Pittsburgh John R. Cushma has spent the past 13 years in banking and has enjoyed every moment. He is currently a senior loan officer for American Financial Mortgage Corporation, as well as the founder/partner of a company named MobileMLO. His company provides a mobile phone application that mortgage loan officers can give free of charge to their clients and real estate agents. It allows them to track the status of their loan, send documents and more. John likes to combine his knowledge of the mortgage industry with technology to help his clients navigate through the sometimes scary loan process.


Alex Elezaj CEO Class Appraisal • Birmingham, Mich. New to the industry in 2015, Alex Elezaj brings a successful track record of leadership and growth across multiple industries to Class Appraisal, a nationwide appraisal management company, which works with several of the top 10 lenders in the country. Alex focuses on people, culture and technology to drive results. “There are many companies that do what we do, but they do not have our people,” said Alex. “That’s our advantage. Providing the absolute best client experience will win in every industry, and that is what is fueling Class Appraisal to become one of the largest and most respected AMCs in the country.”

Shaun Groves Vice President of Sales United Wholesale Mortgage • Troy, Mich. A true professional at maximizing talent and simplifying the mortgage process, Shaun Groves passionately leads 300-plus United Wholesale Mortgage account executives and drives the most fluid inside sales model in the mortgage industry. He possesses a uniquely charismatic leadership style and top-flight industry knowledge that has helped UWM become the top conventional wholesale lender in the country, with production of $13 billion in 2015. Prior to joining UWM and ascending through the company ranks over a 10-year period, Shaun was a mortgage broker, giving him the ability to accurately connect with clients’ needs.

James Hooper First Vice President Freedom Mortgage • Phoenix, Ariz. As first vice president of Wholesale Lending for Freedom Mortgage, James Hooper is in charge of all aspects of sales and operations for the West Coast. Today, he leads a sales team that generates more than $3 billion annually in production for Freedom Mortgage. James is involved with various chambers and associations within the broker community. James is a born leader, striving to help his employees to get better every day. As he shuts down his computer each day, he asks himself, “What can I do to get better tomorrow?” In his spare time, James likes to watch football and enjoy time with his family.

Anthony Hoshmand Production Manager Parkside Lending • Walnut Creek, Calif. Anthony Hoshmand is a leader at Parkside Lending LLC, where he oversees four front-end operations departments to deliver best-inclass service to wholesale and correspondent business partners nationally. With more than 13 years in the industry in both sales and underwriting, Anthony brings a balanced perspective to the burgeoning mortgage banker and is developing a seasoned team of professionals at Parkside that exemplify their brand promise that “every decision is driven by the deep-rooted desire to make a positive difference for both our clients and their customers.”

Vincent Ingui National Director of Sales Annie Mac Home Mortgage • Mount Laurel, N.J. Vince Ingui joined AnnieMac in 2012 after successfully owning and operating Louviers Mortgage Corporation for the prior nine years. During Vince’s tenure at Annie Mac as national director of sales, he has brought them to record-breaking production and profitability. AnnieMac is quickly becoming recognized as one of the top lenders nationally and one of the best companies to work for. Vince’s leadership approach focuses on culture first and then vision as a close second. Vince is a resident of the New Jersey Shore and his true passion is in his children, 10-yearold Vinnie Jr. and eight-year-old Sophia.


Director of Marketing, PNW Opes Advisors • Seattle, Wash. Sara Monzo is director of marketing for the Pacific Northwest Region for Seattle, Wash.-based Opes Advisors. Sara brings more than 15 years of industry experience to Opes Advisors. Her marketing background with national home builders and real estate brokerage leaders, combined with her experience managing social media efforts for an online retail giant, empower her to accurately target and reach today’s diverse homebuyer markets. A native Californian who has resided in the Pacific Northwest for nearly 20 years, Monzo previously served as marketing manager for one of the largest privately-held lenders in the U.S.

n National Mortgage Professional Magazine n DECEMBER 2014 2015

Sara Monzo


Regional Sales Manager REMN Wholesale • Iselin, N.J. Tina Lewandowski grew up in the mortgage industry and has spent the last 18 years living and breathing the business. Lewandowski manages a team that hit more than $300 million in 2015, including $75 million in personal production. She is highly respected by her peers and customers, viewed as a knowledgeable leader who will continue to be recognized in the mortgage industry.

Vice President Freedom Mortgage Corporation • Mt. Laurel, N.J. Michael Middleman joined Freedom Mortgage as a vice president in January of 2013. Prior to joining, Michael gained seven years of experience in public accounting. His current role at Freedom is in corporate oversight and has leadership responsibilities for the corporate finance and analytics teams. Michael also created and oversees Freedom Mortgage’s First Flyer Program. Michael graduated from Hofstra University with a BA in finance and accounting, and is a licensed Certified Public Accountant (CPA). In addition, he is currently pursuing his MBA at the Wharton School of Business at the University of Pennsylvania, graduating in May 2016.


Tina Lewandowski

Michael Middleman


President Academy Mortgage • Sandy, Utah With Adam Kessler as president, Academy Mortgage has grown from a small regional provider to one of the nation’s largest independent mortgage lenders. Since Adam assumed leadership in 2009, Academy has more than doubled its total loan volume, from $2.8 billion in 2009 to $5.5 billion in 2014, to an estimated $8 billion in 2015. Another of Adam’s achievements was leading Academy’s successful acquisition of Republic Mortgage. Most importantly, Adam has fostered a people-centric culture. Production, growth, and revenue stats are important because they fuel opportunity, but Adam believes the numbers are only as important as the people they benefit.

Team Lead, Senior Account Executive United Wholesale Mortgage • Troy, Mich. A superstar in the mortgage industry, Danny Marogy is currently United Wholesale Mortgage’s top-producing account executive and has led the way for the past five years. Danny is a seasoned UWM veteran—experience, knowledge and elite service have catapulted his career. He takes pride in providing industry-leading client service, training and exclusive tips and tactics to his clients to cultivate their growth. With Danny’s support, his broker and correspondent clients continue to exceed their business goals.


Adam Kessler

Danny Marogy


Owner/Vice President Associated Mortgage Brokers • Portland, Ore. Matt Jolivette is a second generation mortgage broker. He received his bachelor of science degree in finance from Portland State University. Matt started his mortgage career in 1997 as a loan processor, then to a loan officer in 2001, and eventually became a partner in 2011 of Associated Mortgage Brokers (formerly Associated Mortgage Group Inc.). In 2011, Matt was elected on to the Oregon Mortgage Association board, and in 2013, was elected president of the association through 2014. Matt is still an active board member with OMA.

President Neighborhood Loans • Lombard, Ill. Reno Manuele serves as president of Neighborhood Loans, an FHA-direct endorsed residential mortgage lender headquartered in Chicago. Since Neighborhood Loans’ inception, Reno and his partner, Tony Ameti, have incorporated an intuitive marketing approach by implementing industry leading technologies. Having realized the effectiveness of targeted marketing campaigns, Reno has since built out an in-house marketing department. This team enables loan officers and real estate agents to become top producers, while always keeping the consumer’s best interests in mind. This initiative has resulted in higher customer satisfaction rates, more educated clients and a foundation for inevitable growth. NATIONAL

Matt Jolivette, CMC

Reno Manuele

James Morin

Mortgage Planner Element Funding • Charlotte, N.C. Brad Roche, loan originator and mortgage planner for Element Funding in Charlotte, N.C., has been a loan officer for 21 years and has been ranked as one of the top one percent of all mortgage originators in the U.S. by Mortgage Executive Magazine from 20122014. He is a best-selling author and has a weekly radio show that is broadcast in the Carolinas on CBS, FOX and ESPN. He is also a national sales trainer and offers his marketing expertise. Brad is widely known as “The Mortgage Planner.”

DECEMBER 2015 n National Mortgage Professional Magazine NATION A L RTGAGE PROFESSIONAL





Senior Vice President of Lending Norcom Mortgage • Avon, Conn. James Morin’s commitment to excellence, caring and compassionate style makes up some of his greatest strengths as a leader. His experience in the mortgage industry started in 2001 when he began his career by working on the frontlines as a loan officer before climbing the ladder to become an executive prior to landing at Norcom Mortgage. Norcom capitalized on James’ experience and knowledge to help expand their team. In his six years at Norcom, he has grown the company into a regional powerhouse licensed in 23 states, which is now a Fannie Mae and Freddie Mac Seller/Servicer, as well as a Ginnie Mae issuer.

Brad Roche


Kevin Peranio Regional Vice President, East Coast PRMG • Plantation, Fla. Kevin Peranio has been in the mortgage banking industry since 2001 at First Magnus as an account executive. From 2004-2007, Kevin was the Southeast regional manager over the top territory at FMFC with a team of 107 people. Kevin served as COO at North Star Lending for three years. As part owner, he and his team serviced loans with Fannie Mae, creating a $330 million portfolio. For the past five years, Kevin has helped build the Eastern region of PRMG, overseeing wholesale, retail and correspondent sales and operations. Currently, there are approximately 400 people in his region.

Joni Pilgrim Director of Sales and Business Development Nationwide Appraisal Network • Oldsmar, Fla. Joni Pilgrim is a founding partner of Nationwide Appraisal Network (NAN). Since beginning the company in 2004, Joni’s goals and visions have always prevailed … building a dynamic team of appraisal management professionals, embracing and promoting significant company culture and embedding deep roots in her local community. As a leading business owner in a women-owned and award-winning AMC, Joni’s dedication to her team and community are positively unrivaled. In 2016, NAN is slated to change the appraisal world through technology and collaboration. In her spare time, Joni enjoys spending time with her family, paddle boarding and volunteering.

Ronya Rjiale Senior Vice President of Operations Parkside Lending • San Francisco Ronya Rjaile joined Parkside Lending in 2007 and has more than 15 years of mortgage industry experience. In 2009, she was promoted to operations manager and she became senior vice president of operations in early 2015. Ronya expanded Parkside Lending’s non-delegated correspondent lending platform and is currently responsible for the analysis and optimization of operations in both the wholesale and non-delegated correspondent channels. With a uniquely deep understanding of Parkside Lending’s proprietary loan origination system and organizational needs, Ronya works closely with the IT team to create efficiencies and processes to better support both internal and external customers.

Evangeline Scott Certified Mortgage Planner Alpine Mortgage Planning • Folsom, Calif. Evangeline Scott is known for her “Get It Done” approach to business and providing outstanding service. Her experience, honesty and hands-on approach is an asset during every transaction and shines through with each client she helps. Evangeline is committed to helping people achieve homeownership. She has always been a top producer, but that is not what drives her. She loves what she does, the relationships she builds and the impact she is able to have in peoples’ lives ... one loan at a time!

Jacqueline Sendra Mortgage Loan Originator Residential Home Funding • Syosset, N.Y. Jacqueline Sendra has been a mortgage loan originator since 2004 and is licensed by New York State to teach real estate and finance education. She is passionate to help others grow, develop and achieve their dreams and goals. Jacqueline offers homeownership education classes to inspire and empower Long Island and the boroughs of New York City. Jacqueline always has a team-focused attitude which has helped her become a top originator within her company.

Matthew Skas Senior Mortgage Advisor Peoples Home Equity • Oak Brook Terrace, Ill. Matt Skas is in his sixth year in lending. This is his second year being featured in National Mortgage Professional Magazine’s 40 Under 40 list. Matt specializes in adding value to his agents and fellow loan officers by staying ahead of the technological curve. Last year, Matt partnered with 40 Under 40’s Daniel Andersen. Together, they do monthly updates with videos of “Lending Lingo” They have also done more units than any person or team at Peoples Home Equity.

Curt Snow Vice President of Operations TagQuest Inc. • Medford, Ore. Curt Snow started with TagQuest Inc. in 2005 as a 23-year-old not knowing much about the mortgage industry. Today, Curt is vice president of operations at TagQuest with 10 years of experience in the industry, and has a vast knowledge of data and compliance. In 2015, TagQuest was named one of “Inc. 5000’s Fastest Growing Companies.” Born and raised in Southern Oregon, in his spare time, Curt enjoys the outdoors, playing golf, and spending time with friends and family.


President GeoData Plus • Melville, N.Y. Erik Wind is the president of GeoData Plus, a real estate data provider for New York and New Jersey. Erik has a unique blend of expertise, with a background as a software engineer and a real estate practitioner. Prior to GeoData Plus, Erik owned and operated a software and consulting company that created various tech solutions for spaces such as short sale negotiation and property tax reduction services. Erik sits on multiple boards at his alma mater, LIU Post, and volunteers his time working with veterans by helping them bridge the gap from military to civilian work life.

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Erik Wind


Branch Manager/Senior Loan Officer Movement Mortgage • Savannah, Ga. Stacie Jo Taylor has been a mortgage loan officer for more than 14 years now in Georgia and its surrounding states. She is a wife and a mother of four beautiful daughters. Stacie is with Movement Mortgage, where they share the same interest with her in supporting communities and building the American Dream. Stacie loves what she does and plans to build a team. She is currently licensed in Georgia, South Carolina, North Carolina, Virginia, Kentucky, Florida, Alabama and Colorado, and plans to expand more. Additionally, she is also a consecutive Gold Award Winner by the Mortgage Bankers Association of Georgia (MBAG) and a Summit Circle Gold Award Winner for New Home Residential Loans.

Vice President of Business Development Peoples Home Loans, a Division of Peoples Home Loans-KS • Morganville, N.J. Torrey Weiss has always been a successful entrepreneur. Torrey started out with NJ Premier Baseball, recruiting elite high school baseball players nationwide to help showcase their talents to NCAA Coaches and Major League Baseball scouts. Torrey parlayed his eye for talent into a premier mortgage recruiting firm, bringing it to the forefront of the industry before joining Peoples Bank, where he has been vital in the growth of their latest Mortgage Division. Torrey is among the most well-connected mortgage professionals in the industry. His vast network relies on his expertise, integrity, and knowledge of mortgage branch and loan officer opportunities.


Stacie Jo Taylor

Torrey Weiss


Vice President of Sales & Marketing Class Appraisal • Birmingham, Mich. Jon Tallinger started Class Appraisal as its first employee in 2009. Since then, the company has become one of the top nationwide appraisal management companies in the industry. Jon is in charge of Class Appraisal’s growth and expansion. Class is currently working with four of the top 10 wholesale lenders in the country. Through improved technology and streamlined processes, Class Appraisal has an aggressive plan to grow production by over 50 percent in 2016, while continuing to offer the best service levels in the business.

Mortgage Loan Originator Jersey Mortgage • New York & New Jersey Jeff VanNote has been around the mortgage business since the day he was born. His competitiveness, understanding of people, and drive to succeed has allowed him to develop long lasting relationships throughout the New York and New Jersey marketplaces. VanNote focuses directly on his personal relationships and network to provide a service second to none. With VanNote, you are not just a loan number or a commission check … you become his friend and family of the company. In an industry that has an average reputation, Jeff has set out to make his reputation the very best. Experience the difference in mortgage lending.


Jon Tallinger

Jeff VanNote


Vice President of Business Development Mountain West Financial Inc. • Sandy, Utah John G. Stevens currently serves as vice president for NAMB— The Association of Mortgage Professionals. He just finished a three-year term as president of NAMB+. John is active in his local Rotary Club in Pleasant Grove Utah, and serves as an Honorary Colonel in Pleasant Grove as well. He is passionate about the mortgage industry and was just named NAMB Mortgage Professional of the Year for 2015. A month later, he received the UAMP Mortgage Professional of the Year for 2015 as well. When he is not helping with loans, he is enjoying quality time with his family.

Chief Operating Officer Absolute Home Mortgage Corporation Woodland Park, N.J. Over the past decade Matthew VanFossen has built a reputation as an expert in centralized management, as he has successfully built and managed multiple entities in a multitude of industries including mortgage, real estate, insurance and technology. Matthew is responsible for all of AHMC’s custom marketing material (both digital and print), corporate and branch websites, investor presentations, logo integration, internal corporate newsletter as well as the overall corporate appearance and brand maintenance. Matt has developed an easy-to-use and efficient environment that is attractive to both current and prospective branches of AHMC. With strong production, easy & accessible training, custom system integrations and frequent webinars branch approval, management and growth have become a seamless process under Matt’s leadership.


John G. Stevens

Matthew VanFossen

The Next 40 Mortgage Professionals to Watch …

Senior Vice President of Production

AJ Arango

Director of Branch Analytics & Competitive Intelligence

Deric Barnett

Product Manager, Vice President

Jeff Berg

Vice President of Strategy and Product Management

Hope Bucci

QA Analyst

James Charlet

Chief Operating Officer/Owner

John Clerkin

Vice President

Tim Cox

Chief Strategy Office

Casey Crawford

Chief Executive Officer


Sarah Engstrom

Assistant Vice President, Mortgage Loan Originator

Joshua Erskine

Chief Executive Officer

Amy Flores

AVP of Corporate Relations

Doug Foral

General Manager

Jason Frangoulis

Senior Vice President, Wholesale Lending Division

Jason C. Frazier

Chief Information Officer

Sean Herrero

Vice President of Business Strategies, Loan Advisor

Tom Hurst


Reza Jahangiri

Founder, Chief Executive Officer

Bob Jones

SVP, Internal Sales Channels & Marketing Campaigns Manager

BBVA Compass

Steven Kaufman

Chief Executive Officer & Founder

Zeus Mortgage

Matthew Keck

Regional Vice President of Production

Lisa Lund


Jessica Manna


Mike Mirshahzadeh

Chief Revenue Officer

The Money Source

Gracie Morrow

Vice President of Sales

Guardian Mortgage

Matt Moubray

National Sales Manager

Adam Neft

AVP Training and Development

First Choice Loan Services Inc.

Joshua Nieves

Mortgage Loan Originator

Residential Mortgage Services

Tom Pasckvale

Managing Partner

Christopher Picone


Jeremy Potter

General Counsel & Chief Compliance Officer

Norcom Mortgage

Heather Price

Managing Partner & Director of Operations and Marketing

Modern Mortgage

David B. Ricketts

Area Manager

Parvesh Sahi

Vice President of Business Development

Kimberly Smith

Senior Vice President, Wholesale Division

Luke Tomaszewski

CEO/Chief Appraiser

Erika Vaughn

Director of Client Relations & Governance

Joe Welu


Jonathan Yosha

Senior Vice President of Secondary Marketing

Rudy Zabran

Managing Director of Client Services

DECEMBER 2015 n National Mortgage Professional Magazine NATION A L RTGAGE PROFESSIONAL



Natalie Abadir


Due to the numerous submissions we received for the “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, will be leaders in the industry for years to come, so keep an eye out for the following mortgage professionals as they continue to shape the industry:


Endeavor America Loan Services W.J. Bradley Texas Capital Bank Clayton Holdings LLC Vantage Production CRE Credit Services matchbox LLC Mortgage Quality Management & Research Movement Mortgage Priority Mortgage Corporation OneTrust Home Loans United Northern Mortgage Bankers Mortech, a Zillow Group Business United Mortgage Corporation Mason-McDuffie Mortgage RPM Mortgage Inc. StreetLinks Lender Solutions, an Assurant Company American Advisors Group (AAG)

Mountain West Financial Inc. Lund Mortgage Team Inc. Mofiya

Polaris Home Funding Corporation

Top Vine Mortgage Services LLC PRS Capital Group LLC

Bank of England Ellie Mae American Advisors Group eValuation ZONE Inc. GuardianDocs, a Division of LenderLive Total Expert LLC matchbox LLC Opus Capital Markets Consultants LLC

nmp news flash continued from page 26

mortgage-backed securities (CMBS), life insurance companies, Fannie Mae, and Freddie Mac. Together these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding. Construction and development loans are not included in the numbers presented here, but are included in many regulatory definitions of ‘commercial real estate’ despite the fact they are often backed by single-family residential development projects rather than by office buildings, apartment buildings, shopping centers, or other income-producing properties. The FDIC delinquency rates for bank and thrift held mortgages reported here do include loans backed by owner-occupied commercial properties.

Fannie and Freddie Renew Yuletide Eviction Suspension

Pacific Investment Management Co. (PIMCO) has filed a lawsuit against Citigroup Inc.,

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.

I love working for Assurance and I have thrived here. With the support from management, experienced employees, marketing support and continuing education, I quickly became a top producer. The camaraderie is by far the best I have ever experienced. Courtney Arceneaux Loan Officer Houma, LA | NMLS# 829307

Damian Cook Branch Manager Atlanta, GA | NMLS# 203938




Our compensation plans are what set us apart from other companies. There is flexibility and manager input on the structuring of the branch compensation plan and a great balance between pay and the rates we offer to our borrowers. Willie Tucker Branch Manager Madison, AL | NMLS# 174340

I’ve been here 7 months after 20 years in the business. I’m thrilled to be here. We have a very good product line. Our pricing is exceptional. I like the fact we have our own marketing department so we can spend more time getting loans. The support has been outstanding. Brent Edwards Branch Manager Metairie, LA | NMLS# 131432

Ready to dramatically increase your income? We’re hiring branch managers and loan originators throughout the South. Join our team and we’ll equip you to succeed. Best-in-class processing, underwriting and closing support—with a commitment to always close loans on time* Excellent compensation, great rates and competitive closing costs

Ready-to-use marketing materials and customized webpages for originators and branch managers Centralized compliance team

Company-paid licensing, training and education Direct Ginnie Mae issuer and Fannie Mae and Freddie Mac seller and servicer approved, with minimum credit overlays

RESIDENTIAL MORTGAGE LENDER WITH OFFICES THROUGHOUT THE SOUTHERN UNITED STATES * Based on reasonable and customarily expected timelines of 25-30 days. Results are subject to situations directly under lender control and not to include third-party instances that may delay the closing as they pertain to title and abstract, appraisal completion/conditions and buyer/seller clearing of lender conditions necessary to close.

Ready to start closing more loans?

Contact Paul Peters, CMB at (225) 239-7948 or email today.


n National Mortgage Professional Magazine n DECEMBER 2015

PIMCO Sues Citigroup Over Failed Mortgages

One of the things that is great about Assurance is that they are more responsive to the needs of the loan officer, like getting exceptions made and getting loans closed quickly. A lot of underwriters at other lenders are always looking for ways to say no. Our underwriters look for ways to get the loan closed, and our processors make sure we close on time.

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:

Fannie Mae and Freddie Mac are continuing their annual Christmas-season tradition by announcing a nationwide suspension of eviction lock-outs between Dec. 18 and Jan. 3. Fannie Mae’s suspension of evictions will apply to single-family and two-to-four unit properties. Although legal and administrative proceedings for evictions may continue, Fannie Mae will allow residents to remain in the distressed property. Freddie Mac’s holiday policy impacts Freddie Mac-owned REO homes, but will not affect other pre- or post-foreclosure activities. Companies managing local evictions for Freddie Mac may continue to file documentation during the suspension period. “Today's announcement is intended to provide a greater measure of certainty to families during the upcoming holiday season,” said Chris Bowden, senior vice president of REO at Freddie Mac. “We also strongly urge homeowners who are facing financial challenges and possible foreclosures to explore Freddie Mac's workout options with their mortgage servicers. They do help and have prevented more than 1.1 million foreclosures since 2009." “As we have done in past years, we are suspending evictions during the holidays,” said Joy Cianci, senior vice president of credit portfolio management for Fannie Mae. “We also continue to remind homeowners who may be struggling with their mortgages to reach out for help. Options are available to avoid foreclosure, and we want to help pursue those options whenever possible.”

for its role in the failure of $13.8 billion in mortgage-backed securities during the years leading up to the 2008 recession. According to a Bloomberg report, more than two dozen PIMCO trusts plus Prudential Retirement Insurance & Annuity Co. and Aegon NV, the Dutch parent company of Transamerica Corp., filed a lawsuit yesterday in New York state court that charged Citigroup’s subsidiary Citibank NA was aware that the pools of loans backing the trusts

between 2004 and 2007 were polluted with toxic mortgages. "Citibank knew that the pools of loans backing the trusts were filled with defective mortgage loans that materially breached seller representations and warranties," the trusts said in their complaint, accusing Citigroup of putting together a trust collateral that included "spiraling defaults, delinquencies and foreclosures." While the plaintiffs did not offer specifics on the financial damages they were seeking, the bank’s monthly reports noted that the trusts lost more than $183.4 million by January 2009. Citigroup did not publicly comment on the lawsuit.


Everything You Wanted to Know About TRID, But Were Afraid to Ask By Marc Israel By now, everyone in the mortgage industry knows about TRID and what it is. Some even know what it stands for—the new combined TILRESPA Integrated Disclosure forms. Leave it to government to create an acronym out of other acronyms. But does anyone really know what the practical effect of TRID is? How will it affect mortgage originators in their day-to-day business? Will it make their lives easier or harder? Will it be easier or harder to sell loans? The answers to these questions are yes, no, and all of the above. Let’s take a look. Mortgage originators have always made their living in a regulated industry. The federal government has rules, states have rules, and their own banks have a myriad of specific lending guidelines. So on one level, this is just more

of the same for the mortgage professional. They’ve always had to follow rules. It’s just that now the rules have been changed pretty dramatically. Most significantly, TRID will seriously impact the timing of the mortgage application process a number of times upon the route from the initial conversation with the potential borrower, all the way through to the closing table. First, the new rules state that once a mortgage originator “takes an application,” they must immediately send out the new Loan Disclosure (LD) to the potential borrower and cannot do anything whatsoever on the file until the LD has been sent and the requisite time period has passed. This is an important change and needs to be examined a little more closely. Like with any regulatory change, the devil is in the details, and the details are often found in the definitions. So

the mortgage originator is not only going to need to know the new terminology, but also know exactly what it means. “Taking an application” is specifically defined in the new rules as the time when the mortgage originator has received the following six pieces of information from the potential borrower: (1) Name (2) Income (3) Social Security Number (4) Property Address (5) Estimated Value of Property and (6) Mortgage Loan Amount Sought. When the originator has received these six pieces of information, they must act like they are playing freeze tag and not do another thing until the LD is sent out to the borrower. The LD needs to be “delivered” within three business days of the originator taking the application. Again, the definition of this term means a lot. “Delivered” has a very detailed definition under the new rules depending on

the many ways that a lender may choose to “deliver” the LD. However, in order to avoid any confusion and uncertainty, almost all lenders have decided to use the good old fashioned method of sticking the LD in the U.S. Mail. When using the U.S. Mail, the “Mailbox Rule” of counting days applies, which adds another three full days to the waiting period that the originator must abide by. Therefore, taking both the business and non-business days into account, the originator must send out the LD in the mail and then wait a full seven days from the time they take a mortgage application before they can do anything else on the file. This is a big change and one that originators are going to need to get used to. The second major effect that TRID is going to have on loan originators has to do with money. Quite simply, an origi-

nator cannot collect any money from the borrower other than a fee to run a credit report, until after the seven days have run from the time the LD was sent out. This is something that originators will need to keep a very close eye on to make sure they don’t inadvertently run afoul of this new rule. In fact, in addition to taking meditation or Yoga classes to learn to slow down and relax, the next best thing an originator can do to work within the new rules is to get a really good calendar or calendar app. As we can see, timing is truly everything under the new TRID, and unfortunately if you mess up the timing, you open yourself and your bank to serious fines and penalties. So it would be wise for loan originators to know these new timeframes down cold, tack them to their wall, and use one of the many online timing calendars that have already proliferated all over the Web to keep close track of this stuff. Once the mortgage originator gets past the LD time period, the next big game changer is which fees on the LD they can and cannot change. Again, hanging over the head of the originator and the bank is the Consumer Financial Protection Bureau (CFPB), ready and waiting to fine lenders for charging borrowers more than was originally disclosed. TRID has created three new categories of fees which carry their own different level of tolerance to changes. In

the first category, there is zero tolerance and any change of fee will open the lender up to penalties. Included in this category are (1) Fees paid to the lender or its affiliates, and (2) Third-party fees that the borrowers were not given the opportunity on the LD to shop for. In the second tolerance category, the CFPB gives the lender a 10 percent cushion which allows certain fees to change up to 10 percent without penalty. Included in this tolerance category are (1) Recording fees, and (2) Fees paid by the borrower to third parties that were chosen by the borrower from a list of vendors provided by the lender. Finally, the third tolerance category allows for unlimited changes to the fees on the LD without any repercussion to the lender. Those fee changes include (1) Prepaid interest, property insurance premiums, and amounts placed in escrow; (2) Fees for which the borrower was given a list of vendors by the lender but the borrower chose a vendor not on that list; and (3) Fees paid for services not required by the lenders. These tolerance categories get the loan originator pretty deep into the weeds and can be a lot to understand and keep track of. However, similar to the timeframes discussed earlier, the CFPB is very serious about these categories and will come down heavily on anyone who strays from them. As such, if you are a loan originator, it’s better to get your head into the weeds than to bury it in the sand.

Of course, an LD is only as good as the information the originator is given by the borrower. Therefore, if the lender was either given inaccurate information or otherwise was working under a misunderstanding of some sort with the borrower, a new LD will need to be issued which will again trigger all of the timeframes discussed earlier. Specifically, an LD will need to be revised and reissued if the borrower: (1) Provided the originator inaccurate information such as his income; (2) Requests a change in loan terms; or (3) Is subject to an extraordinary circumstance such as the borrower losing her job or the lender learning about a pending lawsuit regarding the property. Once the LD is final, the borrower needs to give the lender her “intent to proceed” which can either be written or verbal. With that go-ahead in hand the originator can then get back to doing what he does best—getting the loan closed. The third significant change brought about by TRID is the Closing Disclosure (CD) Form which replaces and combines the old Truth-in-Lending (TIL) and HUD1 Forms. The CD is the last step on the new, more arduous process laid out by TRID. It discloses all of the actual, final terms and costs to the borrower. As with the LD, the timing of delivery of the CD is crucial. The LD must be received by the borrower no less than three business days prior to the scheduled closing. Again, lenders have indi-

cated that they will be mailing the LD so the Mailbox Rule applies, which means that a loan cannot close until seven days after the LD is delivered to the borrower. Once again, the originator’s calendar app will come in handy. And as with the CD, if certain changes occur after the LD is delivered a new one has to be sent and the clock starts running again. The changes that require the delivery of a new LD are: (1) The APR increases by 1/8 percent; (2) A prepayment penalty is added to the loan; or (3) The loan type (i.e. ARM vs. fixed) changes. In those cases, a new LD needs to be sent and the seven-day count starts again. TRID, along with the CFPB watching over everything, has created a whole new ballgame for mortgage originators. It’s not that the new game is any harder, it’s just different—and the sooner the loan originator learns the new rules of the game the sooner they will be able to thrive in the brand new postTRID world. Marc Israel is president and chief counsel of MiT National Land Services, as well as the founder and owner of its sister company, The National Law Institute. Marc practiced law in New York City for 17 years before becoming a title insurance executive in 2004 and has built a wellearned reputation for excellence by working closely with his clients to make sure that they are protected and their deals close. 41

• Marketing Platform • Coaching & Consulting • MPM Hub Smartphone App • Before, During, After Series Download • Producing Originator, Not Just Trainer

Brad Roche | 855-4-THE PLAN Copyright 2012 All Rights Reserved | Brad Roche, NMLS ID#135191 | Mortgage Planner Marketing, Charlotte Planner, LLC | Includes 90 days with purchase

n National Mortgage Professional Magazine n DECEMBER 2015

Marketing M arketing Strategies S s A Touch h Above Th The he Rest...

Mortgage Planner Marketing

DECEMBER 2015 n National Mortgage Professional Magazine n

A Look Back at the NCRA’ 1


10 2

4 5


11 3





s 23rd Annual Conference BY TERRY W. CLEMANS

Members of the NCRA Board with CFPB Director Richard Cordray


Terry W. Clemans is executive director of the National Consumer Reporting Association (NCRA). He may be reached by phone at (630) 539-1525 or e-mail

01 Capitol Hill breakfast in the Rayburn House Office Building and final preparations by Maureen Thompson of the Hastings Group 02 Carol Wayman, legislative director for Congressman Keith Ellison, addresses NCRA members during the 23rd Annual Conference 03 Rep. Keith Ellison (D-MN), co-sponsor of HR 3035, The Credit Access and Inclusion Act of 2015, pauses for a photo with Dan Firestone 04 Rep. Michael Fitzpatrick (R-PA), co-sponsor of HR 3035, explains The Credit Access and Inclusion Act of 2015 05 NCRA Executive Director Terry Clemans presents a gavel of leadership to NCRA President Bill Bower 06 Tim Richardson delivers his keynote presentation 07 Barrett Burns, VantageScore CEO and Mortgage Bankers Association (MBA) director, welcomes attendees to the NCRA’s Annual Conference 08 FTC Commissioner Terrell McSweeny welcomes attendees to Washington, D.C. 09 NCRA members visit Capitol Hill during their Annual Conference 10 Timothy Smyth, director of Systemic Investigations, addresses attendees 11 Members of the NCRA mingle at the Welcome Reception at the association’s 23rd Annual Conference 12 Chi Chi Wu, senior counsel at the National Consumer Law Center; Edward Mierzwinski, program director at US PIRG; and Pam Dixon, executive director at the World Privacy Forum, take part in the panel discussion


n National Mortgage Professional Magazine n DECEMBER 2015

he experienced provided a special evening, despite Mother Nature’s untimely rain. On the final day of the conference, we took our message to Capitol Hill, starting the day with breakfast in the Rayburn House Office Building and a briefing on the bipartisan effort to amend the FCRA via HR 3035, The Credit Access and Inclusion Act of 2015. The briefing was provided by the bill’s co-sponsors, Reps. Ellison and Fitzpatrick. NCRA is supporting HR 3035, which could help up to 50 million Americans build or rebuild their credit histories so they can obtain credit scores without having to get additional credit cards or high cost loans. The Credit Access and Inclusion Act clears the way for utility, telecom companies and rental histories to be reported for on-time payments to the national credit reporting agencies. The addition of just one or two accounts can have a very positive impact on a consumer’s credit score. If passed, HR 3035 would help Americans obtain that extra account to improve their credit history based on payments they have been making every month. Following the briefing, 40 NCRA members participated in more than 60 congressional meetings booked by NCRA’s lobby team Maureen Thompson and Leah Noonan of the Hastings Group in Arlington, Va. A truly unique experience this year was coverage of the event by Mortgage News Network. Viewers are able to access interviews and coverage of some of the events from our conference via broadcast on their Web site, While this was NCRA’s 23rd Annual National Conference, it was our first in Washington, D.C. It will not be our last trip to our nation’s capital, as 94 percent of the attendees approved NCRA hosting the Annual Conference in D.C. every other year. Next year, and on future election years, we will host our event at a western destination, with all non-election year conferences to be held back in D.C.

he National Consumer Reporting Association (NCRA) recently held its 23rd Annual Conference at the Omni Shoreham Hotel in Washington, D.C. More than two-thirds of the mortgage credit reporting industry was represented during the four-day event that included more than 30 speakers, highlighted by two Presidential appointees, Richard Cordray, Consumer Financial Protection Bureau CFPB Director, and Terrell McSweeny, Federal Trade Commission (FTC) Commissioner; and two members of Congress, Rep. Keith Ellison (D-MN) and Rep. Michael Fitzpatrick (R-PA). Some of the other notable speakers included: Tim Richardson, keynote speaker; David Tyree and Robert Shearer, senior representatives at the Internal Revenue Service (IRS); Patricia McClung, Assistant Director at the CFPB; Timothy Lambert, CFPB Senior Counsel of the Fair Lending Division, Department of Housing & Urban Development; Timothy Smyth, director of Systemic Investigations; Greg Brown, senior vice president of Legislative Affairs at the National Apartment Association; Nicole Upano, manager of State and Local Government Affairs at the National Apartment Association; Barrett Burns, VantageScore CEO and Mortgage Bankers Association (MBA) director; Edward Mierzwinski, program director at US PIRG; Chi Chi Wu, senior counsel at the National Consumer Law Center; Pam Dixon, executive director at the World Privacy Forum; and many other industry representatives from Experian, TransUnion and several of the nation’s leading Fair Credit Reporting Act (FCRA) legal counsel. Of course you can only handle so much compliance, legal and industry education before you need some networking opportunities and a little fun. The kickoff welcome reception provided some of the networking, along with the sessions sponsored by the technology partners MeridianLink, CreditXpert, Sharper Lending and Tazworks. NCRA’s feature event this year, sponsored by MeridianLink, was a private candlelit tour of George Washington’s Mount Vernon, with a reception and dinner at the Mount Vernon Inn. The fare was representative of recipes of George Washington’s time and the evening was made complete with colonial music from David and Ginger Hildebrand. Walking through the rooms in the home of America’s first President in the muted lights that would have been similar to what

DECEMBER 2015 n National Mortgage Professional Magazine n



n National Mortgage Professional Magazine n DECEMBER 2015

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.

Castle & Cooke Mortgage Expands Into Connecticut

DECEMBER 2015 n National Mortgage Professional Magazine n


Castle & Cooke Mortgage LLC, with 38 locations nationwide, has announced its newest branch in Columbia, Conn. an eastern suburb of Hartford. The new branch marks the company’s expansion into the Connecticut market and will offer a full range of mortgage products, fast home loans and exceptional service that have become Castle & Cooke Mortgage’s trademark. Regional Manager Jeffrey Heidtmann, a 32-year mortgage industry veteran, will manage the new office in Columbia. During his career, Heidtmann has helped more than 3,000 families turn their dreams of home ownership into reality. Prior to joining Castle & Cooke Mortgage, he worked as a branch manager for Norcom Mortgage. “I came to Castle & Cooke Mortgage to join a company with the same vision as I have for conducting business—prioritizing customer service,” Heidtman said. “Ultimately, our job as mortgage professionals is to help people realize their dreams of homeownership and to make it a reality, and I love it. It’s very rewarding.” Heidtmann will focus on expanding Castle & Cooke Mortgage’s lending footprint in Connecticut with plans to open three new offices by the end of 2016. He will leverage his expert knowledge of first-time homebuyers, refinances and purchase loans, as well as investor, construction and rehabilitation and government programs to serve Connecticut residents. “With its diverse housing market, Connecticut is the perfect location for Castle & Cooke Mortgage. Homeowners and buyers in the state can benefit from our vast variety of loan products, flexibility and reliability,” said Adam Thorpe, president and chief operating officer of Castle & Cooke Mortgage. “As a Fannie Mae

and Freddie Mac seller and servicer and a Ginnie Mae issuer, we offer an impressive selection of conventional and government programs designed to meet the individual needs of our clients.”

Residential Home Funding Announces Marketing Partnership With Northfield Bank

helping meet the financing needs of home buyers and owners in their communities with products and services delivered with excellent customer service from our RHF team.” Along with having a strong history of serving customers, these organizations provide for their communities through the philanthropic efforts of the RHF Foundation and Northfield Bank Foundation.

HomeBridge Financial Expands in the Lone Star State Residential Home Funding Corp. (RHF) has announced a marketing alliance with Northfield Bank to offer residential mortgage services to their customers. Customers of Northfield Bank’s 30 offices in Staten Island, Brooklyn, and New Jersey will have direct access to Residential Home Funding’s specialty mortgage services and a full range of mortgage choices for FHA, VA, USDA, FNMA, FHLMC, and non-agency jumbo loans. Other loan opportunities such as 203k Renovation loans and reverse mortgages will also be available, coupled with varied financing options. “Residential Home Funding Corp. is a respected leader in the mortgage industry and Northfield Bank is excited to make their residential mortgage services available to our customers,” said Kenneth Doherty, executive vice president and chief lending officer of Northfield Bank. “Through this alliance, Northfield customers will benefit from Residential Home Funding Corp’s dedicated team of mortgage representatives and full line of residential mortgage solutions.” Ralph DiBugnara, VP of retail sales at RHF, commented on the new partnership, “As a native New Yorker, I have known Northfield Bank to be a respected name in banking. I look forward to a long term relationship focused on

HomeBridge Financial Services Inc. continues to grow its footprint in Dallas with the addition of new associates to The Brandy Whitmire Mortgage Team, including licensed loan officer assistants Kyla Blassingame, James Balen and Randal Williams, as well as mortgage loan originators Stephen Lange and Wrayanne Wallace. These local area mortgage professionals are dedicated to providing the same high levels of quality and customer service in the Dallas region that HomeBridge is known for nationwide. In Dallas, Brandy Whitmire’s team is well known for its work with traditional mortgage products, including VA mortgages, but also has a strong reputation for facilitating construction-to-permanent loans and renovation mortgages, which are two areas of lending that are becoming more prevalent in Dallas’ diverse housing market. “What separates HomeBridge and my team from other lenders is that we offer home buyers and builders the national level resources they need, along with the personal approach they want when making major financial decisions. As a nationwide lender, we’re able to work with customers regardless of if their

needs are here in Dallas, or halfway across the country. At the same time, HomeBridge was built on the principles of quality and customer service, so each customer, whether they’re buying a condo or refinancing and renovating a home, leaves our office feeling as if their mortgage is the most important one in the entire organization,” said Whitmire. HomeBridge currently employs nearly 1,400 associates nationwide and is licensed to originate mortgages in 49 states, as well as Washington, D.C. HomeBridge’s overall excellence in the mortgage industry led to it being named as one of the top 10 mortgage companies in America by Mortgage Executive Magazine in 2015.

LendingTree Joins Google Compare for Mortgages

LendingTree has launched an integration with Google Compare for Mortgages, the latest addition to a suite of Google Compare products designed to help consumers make confident, more informed financial decisions. Google Compare now enables Google users to search for and compare mortgages online through an intuitive rate table experience, where LendingTree and its network of lenders, as well as other lending partners, provide customized rate quotes based on the information provided. When searching for a mortgage-related term on Google, consumers are invited to the Google Compare Mortgages page within the search results. After users provide a few additional pieces of information, such as loan amount and home value, Google will display relevant mortgage rates from LendingTree and other lending partners. And much like LendingTree, the experience allows for a comparison of rate quotes from a variety of mortgage providers along with ratings and reviews from LendingTree customers. “We’re thrilled to be a part of Google

Compare, further helping to connect prospective borrowers with qualified mortgage providers as the transition to online lending accelerates,” said Doug Lebda, founder and CEO of LendingTree. “The choice and convenience offered to consumers is imperative when loan shopping online, and Google Compare makes the process even easier. Our expertise in providing an online rate table experience combined with our strong lender network gives LendingTree a distinct advantage when reaching potential borrowers through the online channel. We congratulate Google on the launch and are excited to be working with Google at this early stage.”

The StoneHill Group Approved as a ThirdParty Due Diligence Provider by DBRS

Quicken Loans has announced that its Scottsdale Web Center ranked number one among large companies on Phoenix Business Journal’s ‘2015 Best Places to Work’ list. The award represents the second time Quicken Loans has been named the number one place to work, also taking the top spot in 2011. “At Quicken Loans we are guided by a simple philosophy: Love your people, love your clients. It’s undeniable that there is a direct connection between empowering your team members to make a difference and

Guild Mortgage CEO Honored With Award for “Women Who Mean Business

Mary Ann McGarry, Guild Mortgage CEO, has been recognized with a “2015 Women Who Mean Business Award,” presented by The San Diego Business Journal, for her leadership in building the company into one of the fastestgrowing independent mortgage banking companies in the United States. The continued on page 52

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Happy Holidays from PB Financial and We Hope You Had a Great 2015! 877-686-6565 Office 866-318-4471 Direct Fax • e-mail scenarios to: PB Financial Group Corp. NMLS #357614/PB Financial Group Corp BRE #01522495 Disclosures: per FDIC Regulations Section 6500 Part 226, Subpart C, 226.24. The amount of each payment that will apply over the term of the loan is based on simple annual interest applied to the unpaid balance. Loans range from 1 day to 60 months, are interest only and include a balloon payment due at term. Finance charges apply. Payments do not include amounts per property taxes or insurance premiums. This is not a commitment to lend. Rates and points are subject to change without notice. NMLS #357614


n National Mortgage Professional Magazine n DECEMBER 2015

Quicken Loans Named Top Workplace in Phoenix

only years it has been eligible for the honor. Since opening in 2007, the Scottsdale Web Center has seen explosive growth, and today employs more than 1,000 Valley-based team members serving Quicken Loans clients in all 50 states. Earlier this year, the Scottsdale office underwent a 30,000 square-foot expansion to accommodate the growing needs of the team. “Despite our rapid growth, our team has never lost sight of our culture or the impact we can have on the Valley. We are continually looking for opportunities to give back to this community which has so generously opened it arms to us,” said Stoffer.

The StoneHill Group has announced that it has been determined to be an acceptable third-party due diligence firm for DBRS-rated transactions. DBRS is a full-service credit rating agency respected for its independent, third-party evaluations of corporate and government issues. The StoneHill Group recently became one of just 17 third-party due diligence firms deemed to be acceptable by DBRS, which assesses a company’s staff, operating processes and expertise through on-site reviews before adding a company as an accepted provider. “DBRS is one of the world’s most prestigious rating agencies in the world, so our acceptance as a thirdparty provider places us in an elite category,” said David Green, president of The StoneHill Group. “As we see increasing activity in the private sector creation of mortgage securities, we will be well-positioned to provide meaningful due diligence for our clients.”

the amazing client service they provide as a result,” said Matt Stoffer, vice president and site leader of the Quicken Loans Scottsdale office. “It is this mission that draws us closer as a team, and a family. The impact one person can have is extraordinary, but when multiplied by 1,000 team members working toward a common goal, the possibilities are endless.” This philosophy is evident as Quicken Loans has ranked number one in the country in client satisfaction among all major home loan lenders for primary mortgage origination for six consecutive years (20102015) by J.D. Power, as well as highest in client satisfaction among all mortgage servicers in 2014 and 2015, the



Five Important Things to Know About Millennial Buyers By David Lykken s 2015 draws to a close, there are many issues facing the mortgage industry. We are still dealing with the


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implementation of TRID and the ongoing developments in the regulatory space. We are still anticipating improvement in the economy, hoping that wages will increase along with available jobs. And, we are increasingly spending time considering how different politi-

cians will impact the industry as we draw nearer to the 2016 Presidential election. In this article, I would like to discuss another hot button issue that has overtaken the discussions taking place in the mortgage industry: The rise of the Millennial. Early in 2015, the U.S. Census Bureau revealed that the number of Millennials—or people born between 1982 and 2000—now outnumber Baby Boomers to be the most numerous generation existing in the world today. We used to say “the youth are the future, but now—in a very real way—the youth are the present. The young generation represents more people on the planet Earth than their parents and grandparents. Millennials are becoming our voters, our shoppers, and our workers. Now, we in the mortgage industry have to ask ourselves, “Are we equipped to reach the Millennial market?” In this article, I would like to discuss a few important things to know about Millennials that could help us in answering this important question. The first thing to understand about Millennials—at least for the time being—is that they are experiencing, in some ways, greater financial difficulties than those of their parents and grandparents. Many of the Millennials who are currently at the age to purchase homes were just getting out of college at the height of the financial crisis and those who made it out before were still at the beginning of their careers. As a result, Millennials are off to a slow start as homebuyers. Additionally, the cost of education is rising exponentially, while wages are remaining stagnant. What this means for us in the mortgage industry is that we must be patient with the Millennial market. Burdened with student debt and uncertainty about their financial futures, those who are

potential buyers are probably going to be more hesitant to buy and maybe even more difficult to approve. We can expect longer buying cycles, and we must be willing to invest more time and energy into the process. Increasingly, Millennials aren’t just a market, they are the market. If we are to reach Millennials and keep the mortgage industry thriving, we must be willing to work harder to help Millennials get into homes. Another important thing to remember about Millennials is that they have a different set of values than previous generations. The typical family structure has become much more fluid among Millennials, and the people who share a single home may not be what we conventionally think of as a family. Some people choose to remain unmarried. Some people, both men and women, opt to live alone. Some couples decide not to have children. The list goes on and on—the orthodox rules about what constitutes a family have been thrown out the window when it comes to Millennials. What this means to the mortgage industry is that we can no longer market the mortgage simply as an opportunity to settle down and raise a family. That may work for some Millennials, but it certainly won’t work as well as it did for previous generations. Millennials care about different things, and I believe that homeownership can fit into those values. Home will always be an important part of peoples’ lives … we just need to figure out what it means to Millennials. Since 1982, the first year that marks the generation in which Millennials were born, more information has been created and made available to the average person than

“… in order to succeed with Millennials, we’ve got to anticipate that they may know more than we would expect them to.” with professionals and learn about business services. Increasingly, Millennials are even up to receiving text messages for communication with various professionals in their lives. In the mortgage industry, we’ve got to adapt to the way Millennials communicate if we want the opportunity to talk to them. Communication is everything. If we can strengthen communication

with Millennials, we’ll be able to build trust. And, when we have the trust of the Millennial buyer, everything else will fall into place. David Lykken, a 43-year veteran of the mortgage industry, is president of Transformational Mortgage Solutions (TMS), a management consulting firm that provides transformative business

strategies to owners and “C-Level” executives via consulting, executive coaching and various communications strategies. He is a frequent guest on FOX Business News and hosts his own weekly podcast called “Lykken On Lending” heard Monday’s at 1:00 p.m. ET at David’s phone number is (512) 759-0999 and his email is


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throughout all the rest of human history combined. A third important thing to know about Millennials is that they are more informed than previous generations. The Internet has turned every Millennial into a walking encyclopedia. People in this new generation have so much more knowledge simply because it’s so easy for them to access. They no longer need to go to a library to find information about any given subject, they can simply Google it. Likewise, they don’t need to wait around for the six o’clock news to find out what’s going on in the world. They can simply log on to any of the countless news sites, because news is now on a 24/7 cycle. Likewise, for finding out about professional services—obtaining a mortgage, for example—they don’t need to call a bank or broker. There are Web sites they can visit with the click of a mouse to find the answers to their questions. What this means for us in the mortgage industry is that, when we finally do get a face to face with Millennials, they are much more likely to know how the industry works than their parents were when they bought their first home. Millennial buyers will be more likely to come to us with demands than with questions. And, this new reality can be frustrating if we aren’t expecting it. So, in order to succeed with Millennials, we’ve got to anticipate that they may know more than we would expect them to. The mantra that used to ring out for consumers was “buyer beware.” Now, the tables have been turned. Buyers already know, and it’s the sellers who need to be careful. A fourth thing to remember about Millennials is that they shop differently. Millennial shoppers don’t need to go into a bookstore to ask the bookseller for advice on a book. They can just read a handful of the thousands of user reviews. When they’re buying cars, they don’t need to go from lot to lot for the best price, they can just go to one of the many automobile Web sites and find the best prices on the model they’re looking for within a 50-mile radius. We know this is how Millennials have grown up shopping for cars and books; what makes us think that they’ll shop for mortgages will be any different? Of course, we already know that people are looking through homes online. At the time of this writing, Zillow is ranked as one of the top 50 most visited Web sites in the United States. It’s only a matter of time before it becomes commonplace for people to shop for mortgage rates online as well. The final thing to remember about Millennials—and this may just be the most important of all—is that they communicate differently than previous generations. Millennials are less likely to use the telephone and meet face-to-face, and more likely to engage with professionals electronically. E-mail is still a highly used form of communication among Millennials, but they are also using social media platforms like Facebook to connect

Industry Updates: December 2015 By Melanie A. Feliciano Esq. CFPB Issues Final Amendments to Home Mortgage Disclosure Act On Oct. 15, 2015, the Consumer Financial Protection Bureau (CFPB) issued its final amendments to Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). The HMDA amendments modify: l The types of institutions that must collect, report, and disclose information about their mortgage lending activity; l Which transactions are subject to the HMDA rule; l The types of data that must be collected, recorded, and reported; and l The processes for reporting and disclosing the required data. The most substantive portions of the rule do not become effective until Jan. 1, 2018, giving financial institutions subject to the HMDA amendments some time to prepare. CFPB Revises Supervisory Appeals Process On Nov. 3, 2015, the CFPB announced the release of its supervisory appeals process for financial service providers, including depository institutions, under its jurisdiction. To view the CFPB’s recent guidance, please visit the CFPB’s Guidance Documents page. New York State Department of Financial Services Proposes Cyber Security Regulation On Nov. 9, 2015, the New York State Department of Financial Services (NYDFS) issued a letter regarding a potential new regulation aimed at increasing cyber security defenses within the financial services sector. The letter outlines specific requirements it would implement in its proposed regulation. A link to a copy of the NYDFS’ letter can be viewed from the NYDFS’ home page.

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Federal Financial Institutions Examination Council Releases New IT Exam Handbook This November the Federal Financial Institutions Examination Council (FFIEC) released its updated Management booklet, which is one of 11 handbooks making up the Information Technology Examination Handbook. This Management booklet rescinds and replaces its June, 2004 version. The booklet provides guidance to examiners and outlines the principles of overall governance and, more specifically, IT governance. Additionally, this booklet explains how risk management is a component of governance and how IT Risk Management (ITRM) is a component of risk management. To view the Management booklet, please visit the FFIEC’s IT Examination HandBook InfoBase. FHA Eases Condominium Project Approval Requirements On Nov. 13, 2015, the Federal Housing Administration (FHA) published Mortgagee Letter 2015-27, announcing additional temporary approval provisions under its condominium approval process. The Mortgagee Letter provides: l Notice of revised calculation of FHA required owner occupancy percentage; l Provides expansion of eligible condominium project insurance coverage; and l Provides revised requirements for obtaining condominium project recertification. These new guidelines are intended to increase affordable housing options for first-time and low-to-moderate-income homebuyers. The provisions of ML 2015-27 became effective immediately. To view ML 201527, visit the U.S. Department of Housing & Urban Development’s “HUD Letters” page and click on “Mortgagee Letters.” Melanie A. Feliciano Esq. is DocMagic Inc.’s chief legal officer and currently serves as editor-in-chief of DocMagic’s electronic compliance newsletter, The Compliance Wizard. She received her JD from the Georgetown University Law Center, and is licensed in California and Texas. She may be reached by phone at (800) 649-1362 or e-mail


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in this transforming mortgage market,” OpenClose and LBA Ware said Lori Brewer, founder of LBA Ware. Partner on Automating the Compensation Process “The dependable and consistent stream of data CompenSafe pulls from LenderAssist allows near real-time compensation and metrics that our customers depend on for managing and increasing their loan volume." OpenClose and Lending & Banking Automation Software (LBA Ware) have announced a partnership to seamlessly pass loan information from OpenClose’s LenderAssist LOS into LBA Ware’s CompenSafe application to automate the entire commission process. CompenSafe is a scalable, Web-based software solution that automates, tracks, calculates, forecasts and provides detailed analytics and dashboard-level reporting on compensation plans for loan officers, processors, branch managers and other commission-based employees. The integration with LenderAssist enables CompenSafe to extract loan data from the LOS in real-time to fully automate and manage compensations across the enterprise in multiple departments and functional areas down to the employee level. “Integrating LenderAssist with CompenSafe allows our mutual customers to completely eliminate the use of spreadsheets to manually calculate commissions and other forms of compensation, which is laborious, cumbersome and error prone,” said Vince Furey, SVP of lending solutions at OpenClose. “With CompenSafe, however, our customers’ loan officers now have complete visibility over their pipelines and when they’ll be paid while management gains easy access to compensation analytics, metrics, reporting and other performance indicators. This integration delivers a great deal of value for lenders.” Traditionally, since most LOS’ do not include functionality to automate commission and bonus payroll calculations, organizations have been hailed to effectively handle a multitude of variablebased, complex commission sales structures using manual approaches that generally involve Microsoft Excel and the need for additional internal resources. As organizations grow, managing the compensation process becomes more complicated, onerous and labor intensive. CompenSafe removes repetitive, error prone, manual calculations and data re-entry from the lending compensation function, thus increasing efficiency, lowering costs, and effectively overseeing sales compensation and top line profitability. "Companies that recognize the value of knowing their numbers, assessing their pipeline and production to look for opportunities, and having the information to make timely decisions are the companies that will thrive and prosper

MortgageFlex Rolls Out New Managed System Administration Services

MortgageFlex Systems Inc. has announced that they are now offering Managed System Administration services to their customers. TRID has generated numerous process and staffing changes for lenders of all sizes and severely strapped their existing resources. With this new service offering, administration changes are managed by MortgageFlex, at the client's direction, saving customers money and time by allowing staff to refocus their daily efforts. “Managed Services is a cost-effective solution to a burdensome situation. Lenders are expected to meet all of the on-going regulatory demands and educate their staff and borrowers while still maintaining their origination process,” said Craig Bechtle, chief operating officer of MortgageFlex Systems. “Managed Services gives our customers an opportunity to take a break while they regroup or permanently pass off the system administration responsibilities.” The MortgageFlex professional services group, an experienced team of industry experts, provides the administrative services. Typical functionality that is included in the offering is building business workflows, maintaining a business rules library, manage the system and user security modules, and set up all system parameters. “We are flexible in meeting our customer’s needs and will accommodate any mix of services they require. We were founded to simplify mortgage lending and 35 years later, we still holding true to that course,” said Bechtle.

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.

Shaving Cost Out of the Loan Origination Process: A Competitive Imperative By Joe Dahleen

continued on page 72


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to close a loan has been more important to consumers than lenders. The vast majority of these costs are passed on to the consumer directly and, prior to TRID, most consumers were locked into the relationship due to application or appraisal fees before they really had a good idea of what it would cost them to get the loan. TRID changed that and now lenders are faced with providing accurate cost data to borrowers before they are financially locked in, which makes cost to close a competitive issue. And it’s a serious issue. In August, the Mortgage Bankers Association (MBA) released data from its survey of members indicating that total loan production expenses had fallen from above $7,000 per loan to $6,984 per loan. This number included commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations. There was some celebration. There would have been much less if more people had remembered that the net cost to originate a loan in 2010 was about $2,700 (which included all production operating expenses and commissions minus all fee income, but excluding secondary marketing gains, capitalized servicing, servicing released premiums and warehouse interest spread). It’s not yet clear how the rest of the lending community will deal with origination costs in a post TRID world, but you can bet that the leaders will take a proactive approach by working to lower their costs. Not only are there many costs, like compliance, that are difficult if not impossible to pass on to the consumer, but having lower costs will be key to being competitive in the new environment. One way lenders will cut costs will be by cutting out the paper. I wrote recently how the government seems to be driving lenders to all-electronic mortgage lending, but the best lenders have wanted to go there for a long time. The costs are just lower—and not just the hard costs that most lenders track, but

If we were forced to come up with something good that has come out of the tidal wave of change that has descended on the home finance industry in the wake of Dodd-Frank, aside from any future benefits that might accrue to our customers, it would have to be the training it has provided our industry. Those of us who are still working here have received quite an education in change management. Those that were not able to cope with the rapid pace of change have left the industry, or been shown the door. Now, instead of a typical industry where 80 percent of all firms in the space are locked into the traditional way of operating and the top 20 percent (or fewer) are innovators who drive change, we are working in an industry where every surviving company is in a near-constant state of change and the top firms have learned how to manage that proactively. By that, I mean changing their operations to suit their own ends instead of only those imposed on them by federal regulators. To more clearly see the difference between these two types of firms, I would offer this example. In its second National Survey of Community Banks, released earlier this year, the Fed and the Conference of State Bank Supervisors (CSBS) found that compliance costs for community banks ate up 22 percent of their net income. Overall, this line item cost these mid-tier institutions $4.5 billion annually. Because so many of these new rules have been focused on home finance, many of these institutions have moved completely away from the mortgage product, even though close to 80 percent of these institutions admitted that mortgages had been a core product for them before the crash. That’s not managing change proactively. That’s purely reactive, and it will cost community banks money. Having been in the mortgage lending business for many years, I sympathize with the plight of these smaller institutions, especially when it comes to the rising costs of closing mortgage loans. Of course, traditionally, the cost

The Long & Short: The Business of Short Sales

Serving 6.9 Million Underwater Homeowners By Pam Marron

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The latest reports find that 6.9 million underwater homeowners still exist in the United States. “Underwater homeowners” is defined as those who have a mortgage where the amount of the loan(s) exceeds the value of the home. Many of those in this market are trying to “stay put” awaiting equity to return. Underwater homeowners who have a non-Fannie Mae or non-Freddie Mac first mortgage or a second mortgage or home equity line of credit (HELOC) have no refinance option available. Their only option is to apply for a modification which requires mortgage delinquency and proof of hardship first. For many of these folks, lowering their current rate is all they seek to be able to “stay put”. But required mortgage delinquency and proof of hardship stands in the way, threatening to destroy credit built over a lifetime for a shot at betterment of their payment. Most won’t do it. And in pockets all over the U.S., appreciation has not come back enough to put underwater homeowners into a positive equity position. Many have to move and proving hardship is not a problem. The mortgage delinquency requirement dissuades some from short selling, but many give in when their assets are depleted, with no other choice available. Given the option, most would borrow funds to stay current on their 52 mortgage during the short sale process. And some in the mortgage, real estate and title industries are taking a look at this. Credit is the benchmark of the mortgage industry and drives the variety of loan products. The value of building and preserving good credit is taught to all of us, with rewards of the best rate for the best credit. Long ago, practices were put in place where it was determined that help is given after mortgage delinquency occurs first. But for millions of underwater homeowners affected by the housing crisis, the help needed is a refinance program where none exists, or a needed exit from an underwater home. The required mortgage delinquency is not law. There are many who are facing imminent default, meaning they are not yet delinquent on the mortgage but may be at-risk because of a change in their financial situation. Imminent default is pro-active, where the homeowner is not yet delinquent and this is allowed by almost every lender, but rarely applied. States like Florida, 1st in the nation with over 1.2 million underwater homeowners, are starting to see a recovery of the housing market. It makes sense that those in the mortgage, real estate and title industries are wanting to insure that recovering states don’t slip backwards. Lender policy that requires mortgage delinquency to obtain a modification or short sale approval still exists - even for homeowners who request continuing their mortgage payments throughout the process. Many underwater homeowners are trying to stay put, and some cannot any longer. Whether these homeowners apply for a modification to stay put or a short sale to move, lenders still require mortgage delinquency which results in: 1. Delayed timeframe before a new mortgage can be obtained 2. Denial of best mortgage products 3. Credit score reduction, resulting in harm to consumer in acquiring additional credit 4. Slowdown of real estate and mortgage industry when delay for new mortgage occurs Recommended: Allow full or partial mortgage payments even when hardship exists for a modification or short sale instead of the currently required mortgage delinquency. Apply Imminent Default logic. The homeowner benefit should be better credit. The lender benefit is a higher net proceed. The recommendation has been allowed in the past, and for non-veteran short sellers. The mortgage delinquency policy is not a law and can be changed. Pam Marron (NMLS#: 246438) is senior loan originator with Innovative Mortgage Services Inc. (NMLS#: 250769) in Tampa Bay, Fla. She may be reached by phone at (727) 3758986, e-mail or visit, or

heard on the street continued from page 47

award program recognizes dynamic female business leaders and role models who have contributed significantly to San Diego’s businesses. An independent judging panel, comprised of five members, selected 30 winners and three recipients of Awards of Distinction from more than 200 finalists. McGarry was among the 30 winners. “This award acknowledges the strength of our management team and of everyone at Guild who works hard to provide the best customer service in the business,” said McGarry. “This starts with helping people get into homes by giving them choices from a complete array of loan options, which differentiates independent mortgage banking companies from many other lenders and has helped us succeed in new markets.” Guild Mortgage has grown from a single office in San Diego to become one of the leading independent mortgage banking companies in the U.S. The company currently employs more than 500 in San Diego and 2,000 nationwide.

GSF Ranked Among “Best Places to Work” GSF Mortgage has been named among the Milwaukee Business Journal’s Best Places to Work 2015 winners. The company placed second of 10 in the medium-sized company category (25-49 employees) with an overall satisfaction score of 95.60/100. The Milwaukee Business Journal sought participation from the area businesses to have their employees, through surveys created and scored by Quantum Market Research in Omaha, Nebraska, rate their companies on topics such as trust in senior leaders, team/ manager effectiveness, retention probability, work engagement and feeling valued. The Milwaukee Business Journal selected 33 winners based on the highest scores in each category. “GSF is very pleased and excited to be included among The Milwaukee Business Journal’s Best Places to Work 2015 list. We take tremendous pride in creating a dynamic work environment and to see those efforts recognized is gratifying. We offer our sincere congratulations to all of the award winners and hope to see you all again next year,” said GSF Mortgage President Chad Jampedro.

The deal expands MCT’s advisory services to include specialization in mortgage servicing rights (MSR) valuation business. This new MSR Services Group will be headed by Phil Laren, founder of PLar Analytics and PB Pacific Partners. MCT’s acquisition includes certain key assets of PLar Analytics’, PB Pacific Partner’s customer base and its proprietary Enhanced Servicing Model (ESM). Laren is now a fulltime employee at MCT. “This deal is a natural fit for MCT. We have been utilizing the ESM model for over two years; it has multiple advantages over other valuation models,” said Curtis Richins, president of MCT. “With Phil Laren running our new MSR Services Group, we have expanded our service offerings, enabling us to deliver even more tangible value to our lender clients.” MCT clients will benefit immediately as a result of the acquisition with more granular analysis of the “retained” vs. “released best execution” decision-making process and access to the “best-in-class” MSR pipeline valuation services. MCT also intends to integrate PLar Analytics’ ESM and MSR software with MCTlive!, its awardwinning secondary marketing technology platform for real-time trading, analytics and best-execution. “Given Mr. Laren’s extensive capital markets experience and industry-leading knowledge of MSR valuation, he is wellequipped to effectively assist MCT’s clients strategically and operationally as they evaluate retained execution opportunities,” said Phil Rasori, COO at MCT. “He created a very sophisticated, proven valuation model. Our clients are looking to MCT for advice in selecting the best servicing partners and then implement best practices, which strengthens our value proposition for lenders.” “I am extremely excited to join the team at MCT and look forward to growing the MSR Services Group,” said Laren. “Many lenders need specialized guidance in an effort to accurately value their servicing portfolios to maximize profitability and manage risk. They will need help in evaluation potential new partners, such as subservicers. The new group that we’re establishing will be key in supporting existing MCT clients as they grow and in penetrating larger accounts.”

Urban Financial of America Announces Name Change to Finance of America Reverse

MCT Trading Announces Two New Acquisitions

MCT Trading Inc. (MCT) has announced that it has acquired certain key assets of PLar Analytics LLC, a provider of financial models for mortgage bankers, and of PB Pacific Partners LLC, which offers consulting services on capital markets and mortgage servicing.

Urban Financial of America LLC has announced that it has changed its name to Finance of America Reverse LLC. The name change reflects adoption of the branding of parent company Finance of America Holdings LLC. As a continued on page 70

Who’s Afraid of Google Compare for Mortgages?

By Phil Hall

deals. As more consumers look for better deals, brokers are there to get them the best deals.” However, that is not to say that Google Compare may not create some degree of mischief down the road. “Google is the number one search engine, and lenders have to pay very close attention to this,” warned John Seroka, brand consultant and principal in the Los Angeles office of Seroka, a brand development and strategic communications firm. “If they establish a substantial footprint—and I don’t see why they wouldn’t—it will put lenders in stiff competition over rates, fees, reviews and star ratings.” Seroka, who is also co-chairman of the Mortgage Technology and Marketing Committee at the California Mortgage Bankers Association (CMBA), predicted that many first-time homebuyers may use Google Compare as their introductory tool to lenders, thus forcing mortgage companies to become more focused of their online presence. “They will need to think about their messaging very carefully, especially in differentiating on why people should do business with them,” Seroka added. Chris Sorensen, senior vice president and national director of retail production at Corona, Calif.-based Paramount Residential Mortgage Group Inc. (PRMG), wondered whether this new tool would actually injure the people it was intended to assist. “It is too soon to tell, but there may be an increased cost for companies [participating in Google Compare] that, in many instances, will be passed on to the consumers,” said Sorensen. Phil Hall is managing editor of National Mortgage Professional Magazine. He may be reached by e-mail at


n National Mortgage Professional Magazine n DECEMBER 2015

based senior loan manager at AMC Lending and a financial blogger at, did not see any credibility problem with that aspect of the service. “That is the Net’s model,” Mohtashami said. “The more you pay the more access you have.” Instead, Mohtashami wondered whether Google Compare for Mortgages was a solution without a problem. “People don’t really shop for mortgages that much,” Mohtashami explained. “The CFPB is mildly frustrated on why people are not shopping.” Among most of California’s mortgage brokers, the arrival of Google Compare received scant attention. “Maybe one person mentioned something about it that they saw in Rob Chrisman’s report,” said Michelle Velez,” board member of NAMB and sales manager at W.J. Bradley in San Mateo, Calif. “I’ve heard of it and I’ve seen a lot of stories about it, but so far, it has not had any effect I know about. I Googled it, but the only thing I found was for the U.K. … I didn’t find anything for California.” Even though it is clearly too early for any measurable effects, Velez was confident that Google would not disrupt her state’s broker activity. “For regular A-paper people, they may possibly lose one or two people here or there,” Velez said. “But mortgage brokers offer a specialized touch—there are no deals that are clean vanilla deals anymore. People may try it, but they will want a broker to help them maneuver through the regulations.” Mat Ishbia, president and CEO of Troy, Mich.-based United Wholesale Mortgage (UWM), predicted that Google Compare could actually be a blessing in disguise. “I think it is positive for brokers,” Ishbia said. “It is encouraging people to go out and make sure they get the best

On Nov. 23, a posting was added to Google’s Inside AdWords blog that announced the search engine’s entry in the U.S. mortgage market. “Google Compare for Mortgages provides a seamless, intuitive experience that connects lenders with borrowers online,” wrote Nicolas Wk, director of product management for Google Compare. “Whether you’re a national lender or one local to California, people searching for mortgages on their smartphone or desktop computer can now find you, along with a real-time, applesto-apples comparison of rate quotes from other lenders—all in as little as a minute. Borrowers can also see ratings and read helpful reviews, and enter relevant information—like loan amount, estimated credit score, or home value— to receive rate quotes that match their needs. They can then visit your Web site to apply directly online or over the phone through one of your agents or loan officers.” Google, which was already offering a similar service in the U.K., obtained a California mortgage broker license as part of this roll out. Almost immediately, media outlets heralded the news with the melodramatic urgency associated with military invasions. Headlines such as “Google Gunning for Banks’ Mortgage Business,” “Google Takes Another Step Into the Mortgage Sector” and “Google Wants to Change the Way We Shop For Mortgages” turned up in news feeds. But should mortgage professionals— especially mortgage brokers—be afraid of Google’s potential for disrupting their business? The answer can be summed up in a crisp, succinct monosyllable: No. “Google Compare has obtained a California mortgage broker license,

although it has no intention of being a real mortgage broker,” said John Councilman, CMC, CRMS, immediate past president of NAMB—The Association of Mortgage Professionals and president of Fort Myers, Fla.-based AMC Mortgage Corporation. “They plainly state, ‘Google Compare is not a mortgage lender and does not take mortgage applications.’ It is only an advertising medium pretending to be a real mortgage broker.” Councilman also observed the tech giant is working in collaboration with a pair of high-profile housing industry companies, but he brushed away concerns over their impact in this endeavor. “Google Compare is powered by Zillow and Lending Tree, who are also not real mortgage sources, a fact not revealed on its home page,” Councilman continued. “The unfortunate side is the rates quoted are highly misleading since no loan program or term is listed. The APRs listed clearly do not reflect the most common mortgage product, the 30-year fixed. Based on what I see, they look like rates for a 3/1 or 5/1 ARM.” Although Google Compare is only currently involved in the California mortgage market, Councilman predicted it will generate more national attention—if only for the wrong reasons. “If the regulators in California and the CFPB are on their toes, Google may be in for some grief,” Councilman noted. “The net effect will be that some borrowers will get a loan through the advertising, but for the vast majority, it will simply reinforce the belief that mortgage shopping on the Internet is usually bait and switch or a scam.” Google acknowledged that participation in its mortgage comparison service was based on a “flexible cost-per-lead model,” but it added that “payment isn’t a factor in ranking or eligibility.” Logan Mohtashami, an Irvine, Calif.-

Just Ask

DECEMBER 2015 n National Mortgage Professional Magazine n



Eric Weinstein & Laura Burke nowledge is power. Power translates to success, whether it is dollars in your pocket, stronger leadership, increased bottom lines or peace of mind, we are here for you. This month, we are introducing a new column for questions relating to starting a business, managing a business, training, networking, tax-related issues, corporate security policy, fraud alerts and compliance. All answers are for informational purpose only, and are not intended to practice law, or are meant to provide tax advice or tax opinions. After reviewing our informa-


tion, we both recommend seeking legal counsel or the advice of a tax professional. Please e-mail us at to voice any questions or problems. We are here for you! Stop! Before you read this, look in this month’s magazine for Eric’s other column, “Can You Help a Brother Out?” Read that first. This column will make more sense if you do it in order.

Trinidad Trinity from the Jersey Shore asks … I have a TRID question … am so confused. I thought the Closing Disclosure (CD) had to go out three days before

closing and the borrower could acknowledge it electronically. Some of my lenders say yes, others are using a six-day rule if they acknowledge it or not. What is it? Eric’s reply to Trinidad … And well you should be confused, many lenders are confused as well. Yes, the CD must go out three days before closing, and I have some lenders that will let you schedule the closing for six days in advance and then move it up when they get the electronic signature. Then, I have other lenders who tell me it is six days and they will not let you move

up the closing. One lender confided in me, it was because they do the docs when they issue the initial CD and don’t want to do them again. He knew that wasn’t the rule, but they are doing it that way to make things easier for themselves. I have found that every lender is doing something differently with TRID. Some have you do the Loan Estimate (LE) on their Web site, some accept your LE. It is a nightmare right now. No one knows what they are doing or have the systems set up. I feel your pain. Things will get better, but right now, we just have to tough it out.

k Eric & Laura Laura’s reply to Trinity … As a side thought, I recently read this on a lender’s advertisement and it makes perfectly good sense to me: Our IT experts maintain our originations system, we didn’t send our brokers to an outsourced, third-party system. Instead, they have always managed TRID requirements through a familiar system with convenient TRID enhancements. This sounds like something to look for when choosing a lending source. Is the lender not outsourcing their origination system to a thirdparty causing additional delays?

and even before this, most lenders would not allow you to have a second loan officer do your grunt work. They may allow your processor to help you if you were a good producer. For an average producer or below average producer, most companies will more than likely not keep a loan officer who is creating more work for their teammates and not properly following through with their own work. My suggestion is to learn how to do it, and do it!

DeSimone from Hershey, Pa. asks …

I am trying to plan out a strategy for increasing my income for next year, do you have any suggestions?

I am a great salesman, but I don’t like doing all the paperwork that goes with doing a loan. My processors are always yelling at me about forms not being filled out correctly or completely. Now my boss is threatening to let me go because of all the extra work I cause in the office. My volume is not gangbusters because I have other jobs I do. What do you suggest?

Let’s say I need to make $85,000 annual income. Let’s determine what I need per month: $85,000/12 = $7,083. Now what is my commission split, let’s use 0.50 for ease. I would need to close minimally $1,400,000 per month: $1,400,000.00 X 0.50% = $7,000. Let’s plan for fallout, so let’s say I need $1,500,000 X 0.50% = $7,500. Now, let’s break it down a little further. What is my average loan size? Is it $150,000 … $250,000? If it is $150,000, I need to close 10 loans per month. If it is $250,000, I need to close less loans, $1,500,000/250,000 = six loans. Let’s work with the six loans. How many do I expect to be purchases, and how many refis … where is my strength and referral source. Let’s say three purchases and three refinances. What will I do to get the three pur-

Eric’s reply to Wally … It is often said, “In the fog of war, a plan never survives the battle.” That means, you can plan all you want, but most times, that’s not how it ends up. In the Cold War, Russia trained its troops to strictly follow doctrine, basically its battle plan. The Americans were a big believer in improvisation and taking opportunities whenever they came up. That’s why we don’t

Disclaimer: All answers are for informational purpose only, and are not intended to practice law, or provide tax advice or tax opinions. After reviewing our information we recommend seeking legal counsel or the advice of a tax professional. Eric Weinstein worked in banking, on the commercial real estate side until 1991, when he fell in love with residential lending. He may be reached by phone at (703) 505-8692 or e-mail Laura Burke is an author and trainer with 20-plus years of experience in the mortgage marketplace. She may be reached by e-mail at

Eric & Laura welcome your questions, please send your inquiries to


n National Mortgage Professional Magazine n DECEMBER 2015

Laura’s reply to DeSimone … Eric, needlepoints in the bathroom, toilets and jobs not finished … you are a true hoot my friend! DeSimone, I have to agree with Eric as much as I often hate doing so, I think I’m choking, but you must do all of your work, not just the parts you like. As with almost all positions, there are fun aspects and then there are the tedious ones. I believe with the new TRID laws

Laura’s reply to Wally … Loan origination doesn’t simply happen … you must make a plan and follow the plan. It doesn’t work if you don’t stick to the plan. I found that back in the day, some of the most successful loan originators were the ones who didn’t know any better. What I mean by that is that they weren’t jaded or afraid of failure. They were simply hungry for business and did whatever they were lead to do. They were bold, aggressive and eager. They often won big deals and got in with untouchable real estate agents simply because they didn’t know any better. Yes, you guessed it … that was me. I thought I could do anything, meet anyone and get anyone to give me chance. Most often, I was right. I once learned a very simple process to keep on track: Decide what income you need. You can then redo your plan at the income you desire, but my first rule of thumb is to make what you need, then go for the gravy. I’m going to use relatively easy straightforward numbers here:

speak Russian in America now. I agree with Laura, to some extent. But I am not swallowing it hook, line and sinker. I think it is important to train yourself to see opportunities when they come up, even if they are not in the “Grand Plan” or you have even budgeted for them. I hate advertising with a passion that borders on hysterics. I don’t believe it in, period. I had no plans for it in 2015. Suddenly, a good real estate agent friend of mine asked me to join her in an ad. I didn’t believe in the ad, but I believed in her, so I did it. It has been an unbelievable success. Serendipity: The phenomenon of finding valuable or agreeable things not sought for. Many things in my life have turned out to go great while I was trying to do something else entirely. I am not saying “Don’t make a plan,” but what I am trying to say is, “Be open to new things not in the plan.” Being too rigid can be just as bad as being too flexible. Be like the willow that bends in the wind.

Eric’s reply to DeSimone … When I was growing up, we had a needlepoint in the bathroom. It was a little kid on the toilet. The caption was, “A job is not finished until the paperwork is done.” That is your problem. You are making a mess for other people by not doing your full job. In fact, with the new TRID laws, you may actually be a liability to the company where you work. I understand, some people are great salesmen and some people are great at meticulous paperwork. As a loan officer in today’s current regulatory environment, you must be both. Here is my suggestion: Play to your strengths and staff your weaknesses. Find another loan officer or part-time processor who you can work with and pay them something extra for doing the parts of the loan at which you suck. You will make less, but you will keep your job. As long as you turn in a good product, your company will no longer care about your personal deficiencies. Do what you are good at and go out and sell. As long as you have a backroom buffer between you and your office, things will work out fine.

Wally Stack from Baltimore asks …

chases? Will I look for new real estate agents and builders? Will I go to past clients and look for move up buyers? How will I market myself? Plan, plan and plan some more! The best laid plans of mice and men, fail from time to time, but you will surely fail if you fail to plan! What about the refis, how do I plan to get them? What is my marketing strategy—new clients, old clients? Will I use snail mail or social media? What, where and who will be my target audience. Will I change it each month? Will I look for referral sources? Knowing all of this and planning is what will impress your higher ups. If you have a plan, you can do anything, revise these numbers and own it, make it your plan! Stick to it, maybe you go even further and in your plan, you determine that January and February to be slower months for new purchases so you look for two purchases and four refis. Or, you only close five instead of the required six loans. No worries, you have 11 months to add one to a good month. It’s a work in progress, it’s your plan, and you can adjust, revise and make it better at any time you need to. Eric and I challenge you to a new year, with a plan and let’s hear where your plan takes you!

“As time passes and a support system across roles is established, a seamless process will emerge, and we will reach a point when we can all experience and appreciate the protections brought along by TRID.”

A Year of Change Positions the Mortgage Industry for a Promising 2016 By Dan Goldman

DECEMBER 2015 n National Mortgage Professional Magazine n


As the saying goes, the only constant is change, and 2015 certainly has seen its share of changes in the business world. Technology upstarts like Airbnb and Uber made great strides in shaking up hospitality and transportation.

Regulators made decisions with huge implications on topics like Net Neutrality and, closer to home in the far reaches of financial services, fantasy sports betting is a topic of significant debate. The mortgage space has had a simi-

larly change-filled 2015, driven largely by technology and regulation. We saw many developments that will continue to evolve and change the industry as we know it. From a regulatory perspective, TILARESPA Integrated Disclosure (TRID) was finally implemented and the industry has made strides in preparing for, and now complying with the updated regulation. Additionally, with a shift toward paperless forms and technologies, the process to apply for a mortgage has become more convenient and accessible than ever before to prospective homebuyers. While each passing year comes with both its challenges and accomplishments, the mortgage industry has no doubt faced its fair share of change this year, but I’m happy to report that overall, we’re ending 2015 on a high note and entering 2016 with new ideas, fresh perspectives, innovative technologies and regulation that will ultimately benefit consumers, and hopefully the industry itself.

Fretting, accepting and successfully embracing regulations In 2015, the major focus of the industry was on being TRID-ready. The industry moved through the phases of TRID anticipation, TRID-preparation, practicing TRID, and finally, TRID implementation. Moving into 2016, the biggest challenge will be changing the conversation from being TRID-ready to becoming TRID-successful. As is the case with any new regulation, there have been hiccups since TRID was implemented in October, but collectively we’re all working through them. People have identified the major issues and challenges and addressed them, all the while becoming smart on the process and beginning to realize the benefits. One challenge that has proven significant in regard to TRID has been adjusting to the time and effort that it takes to be compliant with new regulations now that they’re in place. The cost of compliance has increased, attributable to the increased hours it takes to process with TRID, vendor oversight and due diligence. The process to apply for and secure a mortgage now involves a greater degree of education and familiarity with new policies so consumers, mortgage

bankers, and realtors alike can each execute in their appropriate roles. In 2016, as we continue to educate and familiarize ourselves with TRID, it will also be critical to prioritize the integration of its components. The players in the mortgage space are still deciphering their roles, and must keep the lines of communication open to get the most out of these new regulations. Many lenders think that their vendors will handle outstanding items and vice versa, when in reality, that’s not the case. This example demonstrates that mortgage bankers, realtors, consumers and others must all work together to be and remain compliant. While we have done our best to prepare ourselves for the changes brought along by TRID, experience is a necessary tool to mastery. As time passes and a support system across roles is established, a seamless process will emerge, and we will reach a point when we can all experience and appreciate the protections brought along by TRID.

Technology transforming mortgage originations, consumer expectations It seems that with each passing year, the world achieves an even greater degree of technological capacity—and overload. This was no different in 2015 as technology flooded the mortgage space, catering to Millennial customers and in due time, the broader market. There is a significant focus right now focusing on Millennials and their experiences in acquiring a mortgage. For Millennials, which are largely entering the market as first-time homebuyers with no preconceived notion of what the experience was like only a few short years ago, it is critical for them to be educated on the impact of new regulations and how it benefits them. For those buying their first home, the support that mortgage bankers and the industry can provide to them is fundamentally different than the type of support offered to other buyers. Expectations are also different. Millennials place a high value on the convenience and accessibility that technology provides to their everyday lives.

As such, the mortgage industry has obliged with paperless technologies and mobile apps that allow customers to complete paperwork electronically and engage in the majority of the process online. Additionally, the mortgage space is now keen on electronic communication among lenders, real estate agents and consumers, with tactics such as mobile applications and video tutorials. From an origination perspective, prospective buyers can now use a mobile app to check their status in the application process. Mobile and online technology beg for simple and concise language and interfaces, so the challenge here will be providing consumers with all of the information they need, while also keeping the process simple, convenient and efficient. As online platforms gain prevalence in the space, the home buying experience is becoming more consumer-

friendly. Due to the popularity of this option and the undeniable continued presence of technology across our daily lives, mobile and paperless technologies will play a large role in 2016, evolving from a differentiator to a must have.

The year ahead The end of the year is historically a time to evaluate the past 12 months including the challenges and successes within them, and to make predictions about what the year ahead will bring. Perhaps even more important, it is an opportunity to contemplate and plan for how the market will respond to changes in the industry. Earlier this fall, Lenders One conducted a survey with our members regarding the outlook of mortgage bankers on 2016. According to the findings, mortgage bankers indicated that 2016 is expected to be a seller’s (rather than a buyer’s) market. It’s probable that

interest rates will rise, and in turn, have an impact on the broader market. One big shift related to higher rates in particular is that there will likely be more purchases than refinancing that occurs. Additionally, the cost of origination will likely increase, but continued competition will lead to margin compression. Other key issues that will impact industry growth may include the supply and demand related to inventory, innovation in banks’ mortgage product offerings, increases in home values, and the reduction of down payment costs as well as an easing of down payment requirements, to name a few. The survey also found that mortgage bankers are generally optimistic moving into 2016, which is not surprising given the advancements we’ve seen in technology and the successful implementation of oncedaunting regulation. While 2015 meant a lot of different

things to the mortgage space, one resounding element remains the same. All key players in the industry are focused on improving the process by which consumers apply for a mortgage with the goal of optimizing comprehension, preparedness, convenience and efficiency so that people can secure the financing they need while also abiding by regulation instated to protect everyone involved in the process. As 2015 comes to a close, we must now consider ways to carry out the initiatives of this past year in 2016 while also looking forward to the new innovations that will undoubtedly arise and disrupt our everchanging industry. Dan Goldman is the interim chief executive officer of Lenders One, a national alliance of independent mortgage bankers, correspondent lenders and suppliers of mortgage products and services.

Comergence makes it easy to manage your company’s Safe Act compliance so your sales people can do what they do best: SUBMITTING AND CLOSING LOANS. Comergence allows us to design a process that meets our objectives of a quick, hassle-free process without giving up any of our due diligence requirements. - Bob, Lender

Giv Give e us a call at 714-489-8860 or visit us online to learn how how.. WWW.COMERGENCECOMPLIANCE GENCECOMPLIANCE.COM

n National Mortgage Professional Magazine n DECEMBER 2015

When sales reps deal with TPO applications and supporting documentation, they aren’t closing loans. That means lost revenue opportunities - every month.



“Unlike legacy systems, modern technology can start with the consumer experience as the core experience.”

Going Modern: Embracing Technology for a Seamless Consumer Closing Experience By Aaron King

DECEMBER 2015 n National Mortgage Professional Magazine n


Word of mouth. It’s one of the most powerful phenomena in human history, and its influence has only grown over the last two decades. Far more efficient than Paul Revere, the Internet puts a megaphone to the

lips—or fingertips—of every consumer. For the mortgage industry, upgrading the consumer experience has never been more critical to success. The lifeblood of lenders is referrals.

Loan Officers, Branch Managers and Teams,



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© Copyright 2007-2015 Carrington Mortgage Services, LLC headquartered at 1600 South Douglass Road, Suite s110 & 200A, Anaheim, CA 92806. 800-561-4567. NMLS ID 2600. Nationwide Mortgage Licensing System (NMLS) Consumer Access Web Site: AZ: Mortgage Banker BK-0910745; 2159 McCulloch Blvd 4, Lake Havasu City, AZ 86403. CA: Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, File 413 0904. CO: Mortgage Company Registration 2600 and Supervised Lender’s Licenses 989668 and 989668-001. To check license status of your mortgage loan originator, visit GA: Georgia Residential Mortgage Licensee 22721. IL: Illinois Residential Mortgage Licensee. KS: Kansas Supervised Loan License SL.0000313. MN: This is not an offer to enter into an interest rate lock agreement under Minnesota Law. MS: Licensed by the Mississippi Department of Banking and Consumer Finance. MO: Residential Mortgage Broker License 09-1746-S. NH: Licensed by the New Hampshire Banking Department. NJ: Licensed by the N.J. Department of Banking and Insurance. NY: Licensed Mortgage Banker—NYS Department of Financial Services. New York Mortgage Banker License B500980/107664. NC: Carrington Mortgage Services, LLC is licensed under the North Carolina Agency Permits 102107 & 103455 and North Carolina Secure and Fair Enforcement Mortgage Licensing Act. OH: Ohio Mortgage Broker Act Mortgage Banker Exemption MBMB.850208.000 (FHA, DE & VA Automatic loans only). OR: Mortgage Lender License ML4886. PA: Licensed by the Department of Banking. RI: Rhode Island Licensed Lender and Broker. VA: Licensed by the Virginia State Corporation Commission MC-5382. WA: Consumer Loan License CL-2600 & Mortgage Broker License MB-2600. Also licensed in AL, AR, CT, DE, DC, FL, ID, IN, IA, KY, MD, MT, NE, OK, SC, SD, TN, TX, UT, WV, WI, WY. All rights reserved.

While referrals used to mean asking your cousin which lender he used to finance his beach house, they now often involve soaking in the reviews of countless consumers who collectively comprise a trusted source. Every interaction with consumers during the mortgage process shapes their opinion of the experience, but those final steps en route to the closing table, in particular, leave a lasting impression. With on-the-go lifestyles becoming the rule rather than the exception, and finding and securing a mortgage online becoming ever easier, “mobile closings” (also known as “remote closings”) are proliferating. Every year, hundreds of thousands of loans are consummated with the help of a mobile notary signing agent, away from a local bank branch, at someone’s kitchen table, the library, or the neighborhood Starbucks. With the closing often being the only face-toface interaction throughout the entire mortgage process, it’s critical that borrowers feel comfortable and well taken care of as they cross the finish line. Throughout the mortgage process, technology can deliver that comfort and confidence to today’s digitally dependent consumers. Homebuyers are highly connected in nearly every aspect of their lives; they’re accustomed to information on-demand and constant contact. Modern tools can keep borrowers in the know and at ease—while making life easier for mortgage professionals. But the mortgage industry has been behind the technological curve for decades. Why? Change and adoption is hard in the space due to a multitude of compliance and consumer experience risks. Thus, a struggle has emerged between companies that are thinking tech-forward and those that aren’t. Many businesses still have systems and processes in place that were developed 20 years ago when the consumer experience wasn’t a priority—and they’re clinging tight. While some have tried to build consumer-facing products, these efforts have often failed because the longstanding workflow isn’t

designed for them and the processes and machinery in place are no longer relevant. The consumer experience can’t be an adjustment to what a company is already doing; it has to be reinvented. Luckily, effective solutions have emerged that allow players in the mortgage industry to stop trying to fit a square peg in a round hole. Today, there is a whole new set of technology tools—in the hands of consumers and businesses—and a different lexicon. Unlike legacy systems, modern technology can start with the consumer experience as the core experience. In almost every industry, the bar for consumer experience has been set to seamlessness. Accenture defines seamlessness as “the ability to deliver a consistently personalized, on-brand experience for each individual customer, at every touchpoint—anytime and anywhere.” With many parties and moving parts involved in every remote mortgage closing, and compliance concerns to boot, achieving seamlessness is nearly impossible without technology tools that automate the process and draw on data to enhance the human element influencing the consumer experience. In truth, “wing it” has long been the approach to this unwieldy segment of mortgages with mobile closings. Scheduling and managing off-site loan signings has long been a painful, manual process for consumers and closers. The traditional process of tracking down available, quality notaries is a tangled mess of phone calls and Excel tracking, and it unnecessarily drains time, money and manpower. Transferring sensitive loan documents online for mobile closings carries serious security risks, as well. Now, the mortgage industry is able to gain control of the process. Modern, intuitive tools for mobile loan closings that solve these challenges and give consumers the experience they’ve come to expect have emerged. Imagine connecting all stakeholders involved with the transaction—the lender, title insurance, escrow, mortgage broker, real estate

agent and notary—to ensure that they are all informed and coordinated during the closing process; sourcing notaries who will represent you well at the out-of-office closing table based on qualifications and reviews (instead of through a you-can-onlylearn-so-much Google search); and taking a page from Uber’s playbook by sending the borrower an e-mail listing all details of the closing, along with the photo and profile of the notary who will facilitate the loan signing. This high level of communication will be appreciated by the homebuyer, whether she is becoming a first-time homeowner or adding a property to her portfolio. Consumer experience will determine who is leading the mortgage space and who is trailing behind. Remote mortgage closings are sure to continue to rise, because conven-

ience is key to delivering seamlessness (and key to getting those golden referrals). As lender models change, it’s crucial that mobile closings stay top of mind, as their decentralized nature increases the likelihood of a poor consumer experience, absent smartlydesigned technology that simplifies the process. In 2016, commit to seek out technology partners that will help eliminate the mortgage process hurdles that caused your company day-to-day headaches in 2015. While making legacy tools history may seem like moving mountains, it will be more than worth the effort. Also in 2016, aim to meet and exceed the expectations of consumers who are now accustomed to having groceries ordered online delivered to their doorstep, finding a popular nearby restaurant while sightseeing, and dis-

patching a car to the nearest corner with the tap of a screen. Consumer experience determines what homebuyers will say to their friends and family, but also what they’ll say to the millions and millions of listeners on the Internet. Positively influencing word of mouth is the name of the game when it comes to evolving mobile closings and the mortgage process overall. Fortunately, innovative technology designed to

meet the mortgage industry’s needs and consumers’ expectations is waiting for the players who want to differentiate and win. Aaron King is the founder and CEO of Snapdocs Inc., a modern technology platform that simplifies mortgage loan closings. Snapdocs is an alum of Y Combinator, the prestigious Silicon Valley accelerator known for helping to launch trailblazing technology startups. 59

n National Mortgage Professional Magazine n DECEMBER 2015

“Similar to traditional loans, borrowers need the same basic information they would for a crowd-funded loan, along with detailed records and documentation of their investment plans.”

The New Frontier: Real Estate Crowdfunding

DECEMBER 2015 n National Mortgage Professional Magazine n


form of investment. Even 3 World Trade Center, in Manhattan, was opened up to investors via online crowdfunding. Real estate crowdfunding has exceeded expectations. Well-established mortgage lenders and financial firms have expanded By Steven Kaufman, CPA, MsEDE their online presence by creating crowdfunding platforms for all types of Real estate crowdfunding has gained trac- GoFundMe and Indiegogo. These sites put investors—mostly as a result of the crowdtion in nearly every form of investment. crowdfunding on the map by allowing mil- funding clause in the 2012 JOBS Act, which From single-home flips to new commer- lions of investors, startups and individuals went into effect in late 2013. Title II of the cial builds, both seasoned investors and to raise the capital they needed to fund JOBS Act was created by the SEC and has novices are looking to get their foot in the their respective projects. Silicon Valley has paved the way for democratizing crowddoor. The $1 billion in crowdfunded produced several prominent real estate- funding in nearly every industry. This Act investments in the U.S. alone has proven it specific crowdfunding sites that rake in also opened up the possibility to advertise hundreds of millions in investments, crowdfunding, but restricted it to accreditneeds to be taken seriously. You may have heard of Kickstarter, which may now qualify it as a mainstream ed investors.

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The advantage of mortgage professionals Now, you’re probably wondering, is real estate crowdfunding right for me? While it may seem like a tech fad, this form of investment is legitimate and encompasses many of the risks and benefits of traditional investment. The often-low investing minimum (as little as $5,000 in many instances) makes it perfect for both established professionals who are looking to diversify their portfolio and for those with less financial resources to give it a try. For mortgage professionals, the sixth sense they acquire throughout their career in regards to borrowers, underwriting, and quality investments makes them the ideal candidate to jump in the game early. This sixth sense can become savant—so take advantage. Possessing the skills that enable you to identify possible issues and outcomes others may not see gives mortgage professionals a clear advantage. Mortgage professionals will have an easy-to-spot sign to know when they should begin thinking about adding crowdfunding to their portfolio: When there is excess liquidity that isn’t for day-to-day living expenses, consider exploring crowdfunding. While very few sites actually guarantee a full return, having property as collateral can offset some or even all of the risk compared to other forms of crowdfunding. Most crowdfunding sites also allow mortgage professionals to earn a fee for referring their mortgage transactions through the platform. This situation is ideal for professionals to use their skills to spot

great investments that would thrive in a crowdfunding environment and find properties and investors that will have an advantage over other borrowers in the marketplace. This scenario takes place when crowdfunding is the best option for a borrower. This also provides the opportunity to be a part of the influencers of investing. With such new technology, this is a platform that can advance professionals to the next level of investing, as much smaller investments can be made than with traditional lending. Adapting to new technology has never been easier.

Its own kind of risks, with its own kind of rewards While many may think this is the best route for them, investors may find some risk in inexperienced borrowers coupled with less-than-great platforms. Compared to traditional lending, most of the extra risk is associated with the platforms themselves. For example, if $5,000 is invested in a crowdfunding real estate deal when the site didn’t perform a proper appraisal and the borrower is foreclosed on, the investor could lose out on that investment. In terms of risk, there’s another possibility regarding the site itself: It fails. Most of the earlier crowdfunding sites were created by young tech entrepreneurs, rather than seasoned mortgage professionals. What if the site itself goes bankrupt? The investor would, of course, lose out on any investment made through the site. It’s recommended to start your crowdfunding investing with sites that have long-term investment experience at their core. In these cases, the sites have the expertise needed to weather a recession, perform the proper due diligence and often have a third party manage their payments should they fail. Between the risks, learning of a new tool and navigating a new form of investment lies far more benefit. So, what do you need to know about crowdfunding in real estate before getting started? Here are the basics:

What are the four main methods of crowdfunding? l In debt-based crowdfunding, investors lend money under the premise that they will receive a return on their investment over a certain period of

time and at a particular interest rate. l Reward-based crowdfunding lets investors receive a tangible item or service in exchange for their loan. The reward is not in the form of money or equity. l The equity-based method requires that investors receive a stake in the company. Investors may receive dividends or a distribution of the profits earned as compensation. l In donation-based crowdfunding, contributions are just that - donations. They go toward a charitable cause with nothing expected in return (other than altruistic feelings, of course).

way to get into the real estate investment market. Companies hosting real estate crowdfunding take care of the paperwork, due diligence (not to say you shouldn’t still do your own research as well) and know that these properties tend to have a higher rate of success. This high rate of success is due, in part, to the fact that in this particular kind of crowdfunding, the properties have already been backed by a mortgage lender or other financial institution.

What’s the borrowing process like?

By using a third party to facilitate the investment, the borrowing process for loan seekers is usually more streamlined than For borrowers, what conventional borrowing. Borrowers have a representative who will guide them are the advantages of through the process, facilitate inquiries crowdfunding over from potential investors and ensure that traditional lending? For investors looking to diversify their port- deadlines are met. The initial mortgage folio, real estate crowdfunding is a simpler backer wants the project to succeed, so

they are dedicated to securing more ed to participate in real estate investments. investors for the project and guiding the To be an accredited investor in the U.S., borrowers through best practices. investors must make a minimum of $200,000 per year or have $1 million in What type of information is assets. Real estate crowdfunding isn’t going needed to borrow? Similar to traditional loans, borrowers away anytime soon. This soon-to-be multineed the same basic information they billion dollar industry has proven that with would for a crowd-funded loan, along with its fast-growing marketplace and innovadetailed records and documentation of tion. Even as a new concept, this method their investment plans. of investing is bound to evolve even more Borrowers will most likely need to pro- in the next few years. Now it’s time for you vide the same items that they would for a to get in the game, ahead of the curve. traditional loan. These include proof of funds, a credit report, inspection report of Steven Kaufman, CPA, MsEDE, is a finance the property, a list of assets, construction enthusiast and the CEO of Zeus Trust budget estimate and timeline, etc. These Company, which operates Zeus are items that, even as novice investors, Crowdfunding, a real estate crowdfunding you will already be familiar with. and investment platform. Zeus Trust also owns and operates a long-term lending platWho can be a real estate form under the brand Zeus Mortgage and a short-term alternative lending platform crowdfunding investor? In most states, investors must be accredit- under the brand New York Mutual. 61

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n National Mortgage Professional Magazine n DECEMBER 2015





“…with ongoing regulatory changes, tight credit requirements, and cautious lending, even the best loan originators may have trouble closing loans—and doing so on time—in the year ahead.”

Steps to Making 2016 a Banner Year By Paul M. Peters, CMB Despite the likelihood of higher interest rates, lower volume and the challenge of complying with increasingly complex regulations, 2016 is shaping up as a year of opportunity for mortgage loan originators. In fact, the best loan originators have the chance to make 2016 a banner year.

DECEMBER 2015 n National Mortgage Professional Magazine n


But first, the bad news The Mortgage Bankers Association (MBA), Fannie Mae and Freddie Mac are all projecting double-digit or so declines in overall originations next year, and the refi market share is expected to drop to about a third of industry volume in 2016, down from about half this year.

Now, the good news The headline forecast numbers from the MBA and Fannie and Freddie don’t tell nearly the whole story. While refis will certainly be less than

what they were this year should rates go up as anticipated, purchase mortgage originations are expected to continue rising steadily over the next several years after slowly increasing the previous four years. Any increase in long-term interest rates, we believe, will be more than offset by an improving economy, with additional people joining the workforce as companies increase hiring and raise wages. That will mean that overall home affordability numbers will remain favorable and we will continue to be able to build, sell and finance more housing and more people will be eligible for loans. Additionally, we are already seeing the wave of Millennial homebuyers coming into the market, which we can expect to keep growing as more and more members of this important demographic group reach the homebuying age and start families.

An eye on the south At Assurance Financial, we are so confident that 2016 will be a great year, we are aggressively expanding throughout the southwest and southeast, from New Mexico, Arizona and Colorado all the way to Georgia, the Carolinas and Florida. Why are we focused on the Sunbelt? We like the fact that the economy is stable and housing is very affordable for the most part. There has been no prolonged weakness in home values even during the deepest parts of the past recession, except in some limited areas. It’s a great place to both originate and service loans.

Steps to making 2016 a banner year If our forecast for 2016 and beyond is accurate, loan originators should have some great years ahead. But with ongoing regulatory changes, tight credit requirements, and cautious lending, even the best loan originators may have trouble closing loans—and doing so on time—in the year ahead. In fact, closing loans on time will be a persistent and growing challenge, with loan originators wasting a lot of time working on loans that fall through at

some point in the process. Lots of firms have low rates and competitive closing costs. But too many drop the ball before they’re even close to the goal line. We all know how important customer service is, and the most critical component to customer service is the ability to close loans and close them on time, when the customer desperately needs it.

The bottom line? Despite widespread forecasts of lower origination volume, 2016 can be a banner year for originators. One key to succeeding in 2016 will be aligning with a lender with a mindset to remove obstacles to loan closings, and a commitment to closing loans on time, every time. Paul M. Peters, CMB, is sales recruiting manager of Assurance Financial in Baton Rouge, La. Paul has more than 35 years of mortgage banking experience. Peters earned a BBA with an emphasis in finance from the University of Louisiana, Monroe. Peters is an NMLA-licensed loan originator in six states. He can be reached by e-mail at or call (225) 239-7948.

NMP Daily is the mortgage industry's source for news, insights, trends and tips. It keeps subscribers informed of the regulatory and legislative updates, latest industry happenings and breaking news about the mortgage technologies and services.


“I know this runs counterintuitive to everything this issue is about, but try this: Don’t plan. When an opportunity comes up, just take it.�

Formulating Your Official Business Plan for the Coming Year By Eric Weinstein

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. Eric is semiretired, doing mortgages by referral only. He may be reached by phone at (703) 505-8692 or e-mail

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n National Mortgage Professional Magazine n DECEMBER 2015

When I owned my own large mortgage broker company, every six months, I would throw a bowling party. It fostered an “Esprit Corp,� but mainly it was to do “cross pollination� as I used to call it. Cross pollination

means that loan officers get together with other loan officers and share war stories, learn new sources and basically find out how the other guy is doing things. Sharing information can help you learn new things and make you more money. It helps you learn what to do right, what you are doing wrong and what the other guy is doing. Sokhea and I both work at small mortgage broker shops. We don’t have the advertising budget of Quicken Loans or the marketing department of a large bank. We basically sit at home waiting for the phone to ring. I thought I was the only one that worked like that, but I have a feeling, most small one person shops are like that. Yes, we do the social media thing, take real estate agents to lunch and do open houses, but we could be doing more. I am sure you are the same way. No matter how

don’t have time to start writing grandiose business plans that never work anyway. It is a waste of time. What’s going to happen will happen. Don’t get all stressed out about it. Yes, I can hear you now saying, “A man who fails to plan, plans to fail.� I say that to people all the time. But consider this, who knows the future? Have a general idea what you want to accomplish and just do it. You don’t have to write down, “I will call my customers back right away,� just do it. I think you already know what works and doesn’t work. Here’s a tip: Do the stuff that works. Basically, keep doing what you are doing. That’s my “Official Business Plan for 2016.�

So I am sitting down for lunch with Sokhea Ean, my counterpart who owns a small mortgage company in my area. She is a broker like me, and we struck up a friendship when she asked my advice on a column I wrote a while ago. Every so often, we grab lunch together and go over war stories, share sources or just chat. It doesn’t hurt that she is absolutely stunning, and I am a lecherous old man over my prime. This month’s special focus is on “Growth Strategies for 2016,â€? and I wanted to write a highly intelligent article about a small mortgage broker’s business plan for the coming year. What can brokers do to strengthen their hold on the market? I am a loan officer in a small brokerage shop, and Sokhea owns her own tiny company. I didn’t have a clue what to write, so I asked her. This was pretty much the conversation: Eric: “Sokhea, what is your effective business plan for increased market share in 2016?â€? Sokhea: “Err ‌â€? Eric: “What are your company’s plans of action to foster growth next year?â€? Sokhea: “Well, I guess I can do more networking, social media and real estate agent interactions.â€? Eric: “Are you doing that now?â€? Sokhea: “Not really, a little, but I could do more.â€? Eric: “If you are not doing it now, what makes you think you will do more next year.â€? Sokhea: “I don’t know. What are you doing?â€? Eric: “Well, not as much as I should, I guess ‌ Nothing really ... I think I will just keep doing what I am doing.â€? Sokhea: “Yeah, me too.â€?

much you do, you could be doing more. Buy your tickets here for the Guilt Trip. After lunch, I felt like a complete failure. Don’t get me wrong, I make a good living and get tons of referrals from my stable of real estate agents and past clients, but I feel like I should be doing something else. Does everyone else make “company plans to foster growth� and have a “business plan for increased market share� but me? I don’t think so. Talking to Sokhea, I came to realize, every small mortgage broker is probably like me. We wake up, put one foot in front of the other and just react to what happens in the day. We do what we can to get more business and don’t really worry about it at the time. That is, until a magazine comes out saying what we should be doing. I know this runs counterintuitive to everything this issue is about, but try this: Don’t plan. When an opportunity comes up, just take it. If you see a marketing idea that seems to work, try it. Go out and meet real estate agents like you do now. Drip on your current customers as always. To tell you the truth, with all this new TRID stuff I have to learn and my increased business lately, I

“If goals are so important, then why do so few of us even do the minimum and write them down?”

How to Achieve Those New Year’s Goals By Kerry Johnson, Ph.D.

DECEMBER 2015 n National Mortgage Professional Magazine n


Jennie was excited last year with her new year’s resolutions. She set goals to lose 100 pounds, prospect more for business, ask for more referrals and make a lot more money. You can never be too skinny or too rich, she would tell herself. The problem was that she could never seem to stick to

her goals for more than a couple of weeks at best. It’s tough to change. Only babies like change, i.e., a change of diapers. You are the way you were five years ago except for the new clothes you are wearing and your hairstyle. And even those may have stayed the same. Recidivism, prison-

ers going back to prison, within five years of getting out is a whopping 85 percent nationwide. Is prison all that much fun now that felons are dying to go back? Probably not. It’s just tough to change. The divorce rate in America is a shocking 62 percent within 10 years of getting married. Do you think that number is higher or lower for second marriages? The divorce rate for second marriages is 78 percent. The reason for the increase is that you took yourself with you to the second marriage. No wonder it’s so difficult to stick to those resolutions. We have a tough enough time just deciding on a change in menu for dinner. Setting goals for yourself is easy. Sticking to the plan to attain those goals is almost impossible. If you have set New Year’s goals before and found that your game plan lasted only until the final football kick-off, read on. Years ago, studies conducted on Harvard University graduates showed that three percent of those students who set career goals achieved three times as much income as their peers who failed to plan. In studies done at San Diego State University, students who were undecided about their major area of study had significantly lower grades than even those who changed their major frequently. Is a change of direction even better than no direction? Recently, I consulted a mortgage originator who was dissatisfied with the way he was prospecting. He needed to make some changes. First, he used mailings to bring in business. Then he marketed to builders. Lastly, he got eyeball to eyeball close to real estate agents and his sales went up. But the biggest change occurred when he started to follow up by phone after mailings. His production was at a $1 million level consistently in spite of his directional change. His peers who were undirected were consistently out produced. If goals are so important, then why do so few of us even do the minimum and write them down? A lot of the difficulty may be in your own fear of failure. I sat in on a management planning session last year in which a super-

visor asked a salesperson what the next year’s production goals were. The salesperson said, “I don’t know. I really don’t believe in goals. They’re just resolutions made to be broken.” The supervisor said, “Look, I need to put down something for you.” The salesperson replied, “Okay, write down last year’s sales—10 percent The point is that many people are unused to setting goals, based on their fear of meeting them. They are so worried about failing to achieve objectives that they avoid setting them at all. Have you ever avoided setting a goal to lose weight? The problem compounds if you have told others you were on a diet before. They all know that you weren’t able to hold to your commitments. Fear of failure is the major contributor to poor goal achievement. The logic follows, “If I don’t set goals, I don’t fail. If I don’t fail, I won’t have to face a loss of self-confidence.” We’ve all heard that it’s better to set high goals and miss, than to fail to set them at all. But this simple philosophy doesn’t work. You cannot listen to a motivational speaker pump you up and suddenly expect to be an achiever. It’s a little like the salesman who walked into his manager’s office and said, “I can’t make my goals this month.” The manager said, “What do you mean you can’t make your goals this month? I paid a motivational speaker $1,500 to pump you up. Do you remember what he said? Be positive. What do you have to say for yourself now.” The salesman said, “I’m positive I can’t make my goals this month.” What can we do specifically to achieve goals? The answer lies in being smart when you set them. Most mortgage producers fail to consider the four keys to getting and achieving New Year’s goals: 1. Be specific 2. Make them short term 3. Plan medium term 4. Schedule long term objectives When I consulted in the late 1990s with a large mortgage company, I

But during the match, I made no mistakes. My volleys were crisp and my serves were so solid, I thought I could burn a hole through a concrete wall. I eventually lost by a narrow margin in the last set, but I also played the best game of my life. If I had not been challenged to such an extent, I also wouldn’t have stretched my game. Make sure your objectives are big and will bring out the best in you. Lastly, get photos of your objectives and tack them on your walls, fold them in your wallet or anywhere else you are sure to see and be reminded of them. Some of the greatest salespeople and achievers I have met were so single-minded and focused, they never took their attention off what they wanted. It’s easier to reach goals than it is to set them. Take some time and discuss with your spouse exactly what

you want and when you want it. If you start to achieve your objectives using the techniques I’ve discussed, you’ll be more successful without working any harder in the long run. No great achiever has ever succeeded without goals. They help us become profitable, productive and build selfesteem. If you take these steps and use them, you’ll plan to succeed instead of planning to fail. Dr. Kerry Johnson is a frequent speaker at mortgage industry conferences. He is the author of six books, including Mastering the Game: The Human Edge in Sales and Marketing, WILLPOWER: The Secrets of SelfDiscipline and his newest book, Why Smart People Make Dumb Mistakes With Their Money. He may be reached by phone at (714) 368-3650 or e-mail

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n National Mortgage Professional Magazine n DECEMBER 2015

go to lunch today. You may want to write the letter you will send out this week by the end of work today. The bottom line is, those who are best at setting objectives work to achieve their goals by the day and often by the hour. The do this or they don’t allow themselves to go home. They are committed and focused to achieving the goals by the date they want them. To show the importance of focusing on days and even hours to achieve goals, consider the originator who wants to be one of the top 10 firms in his market by certain date. He would need to establish a goal over a threeto five-year period. He would then set a one-year schedule of milestones to reach; which might include increasing his own production, hiring superstar loan officers and develop a strong relationship with 10 investors. Lastly, to acquire a net income of $2 million in the fifth year. Next, he would need to determine the amount of business needed by year/month, etc. He would need to know the weaknesses and strengths of his competitors. How many salespeople did they have? Which real estate agents gave them the most amount of business? Working backwards to short-term goals, he would then know what he had to do today and this week. He might have to set up a list of the top 100 real estate agents in the area. He may have to also set up a file on the loan officers who command the most business right now. By doing all this, anyone can achieve exactly the objectives they want at the time they want it. J.C. Penney once passionately said, “Give me a stock clerk with a goal and I will give you a man who will make history. Give me a man without a goal and I will give you a stock clerk.” The bigger the goal, the better. But can goals be unattainable? There are no unrealistic goals, only unrealistic time frames. Big goals bring out the best in yourself. You will perform best when you stretch a little. In St. Moritz, Switzerland, I played in a Grand Prix tennis match against the German national champion. Nobody believed I could win against such a strong player. He was ranked 69th worldwide while I was rated in the 90s for two weeks until the ranking system on the ATP computer was fixed when I dropped down to 10,037.

asked one originator for a goal that would motivate him. He said to be happy. I asked him how he would know when he achieved it. He just shrugged his shoulders. Varying degrees of happiness fade in and out daily. Nebulous goals like happiness only serve to frustrate us. I told him to write down three specific achievements that would make a contribution to his sense of happiness. He said a 560 SEL Mercedes, $100,000 in liquid investments, and to be home at 5:00 p.m. daily so he could play with his kids. Now we’re cooking. He got specific. I then asked him to set dates when he would like to acquire these objectives. When he set dates, the goals became real. I played tennis on a basketball court once when I was a kid. The court had lines but no net. I couldn’t tell if my stroke was a winner or a dog. People who fail to be specific and set dates are playing tennis without a net and possibly without balls. H.L. Hunt, the late great Texas oil tycoon, once said, “If you set goals, you first must decide what you’ll sacrifice to get them.” This is a strong statement coming from a tycoon who won his first Oklahoma oil well in a poker game of five-card stud. But it is profoundly accurate. You cannot set a goal without a change in some part of your business and personal life in an effort to get it. When you set goals you can achieve, first make them long-term and big. A long-term objective is one that exists one to five years out. These are specific and tangible dreams. A long-term objective is one that exists one to five years out, for example, adding three new offices, or expanding your business to numerous states or cities. Next, work backwards and set a medium-term goal that can be achieved between one month to one year. This might be doubling your real estate agent referrals or starting a new telephone follow up on the direct mailings you used to prospect for new business. This mid-term goal objective should really be a stepping stone to hitting the long-term dream. Next, work backwards again from the medium term goal and set short-term objectives. Short-term means setting goals you want to accomplish today or this week. For example, you may want to see three real estate agents before you

“Investing in the right technology is becoming more critical to success in the mortgage industry as everyone involved in the mortgage loan process—including consumers— becomes more tech-savvy.”

Three Keys to Profitable Mortgage Lending for 2016 By Paul Doman

We’ve reached the time of year when most banks and mortgage lending businesses begin strategic planning for 2016—setting goals, prioritizing areas for investment and establishing budgets. In an industry that has had significant ups and downs over the

past decade, it’s difficult to predict what will happen next. But there is a consistent theme to what keeps mortgage lending and servicing executives awake at night—profitability and regulatory pressures. Unfortunately, these two challenges

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are often at odds with each other, as compliance costs continue to grow and eat into profit margins. So where should you focus your 2016 strategic planning efforts, and what investments will deliver the best balance between profitability and compliance while still allowing you to grow your business? To make the best decisions for both the short- and long-term, it can be helpful to organize your strategic planning discussions around three key areas of the business: Processes, technology and people. Looking at each of these categories holistically will help you maintain a focus on the big picture of what actually matters in your business. Let’s examine each area in terms of its potential impact on the profitability of your mortgage business. For each area discussed, we will provide some examples related to appraisal management and mortgage closing to illustrate the positive impact changes can have on profitability and compliance, while at the same time improving the borrower experience. Data from the Mortgage Bankers Association (MBA) shows that both total loan origination costs and personnel costs per loan have risen this year, so now is good time to look at areas for improving efficiency and productivity.


Processes are the backbone of your business, and the efficiency and effectiveness of your core business processes are critical to the profitability of your mortgage business. If you examine each stage of your mortgage operations, how efficient are you? Do you have visibility across processes? Are processes consistent across your business nationwide or does each branch operate in a silo? How seamless are communications and interactions with outside vendors (e.g. appraisal management companies, title companies, etc.) and with borrowers? Now is the time to identify the bottlenecks and consider whether 2016 is the year to take the steps necessary to eliminate them. Also, think outside the box and consider whether all processes need to

remain in-house. Processes such as appraisal management, appraiser panel management and appraisal compliance can be outsourced to free up internal resources to focus on revenue-generating activities like business development and new loan origination. Closing loans faster is also critical to profitability, so streamlining closing processes will save you time and money while also delivering a better borrower experience. Automating closing processes and moving to online settlement documentation are good ways to speed things up, save money and preserve accurate records to strengthen compliance. In addition, choosing outside appraisal, title and closing vendors that have nationwide operations rather than relying on multiple regional players can help you establish greater consistency and economies of scale while lowering the cost and time spent on vendor management. In a nutshell, focusing internal resources on the processes and functions that are going to grow revenue, while at the same time streamlining and automating borrower-facing processes can go a long way to improving profitability. Outsource the supporting stuff to lower fixed costs and strive for operational efficiency.

Technology Investing in modern technology to streamline your business and eliminate silos is one of the best ways to improve operational efficiency and lower operating costs. While in the past, upgrading software technology required large capital investments, that is no longer the case. Softwareas-a-Service (SaaS) and cloud-based applications have become the new standard in technology and in most cases require no upfront investment. These applications have the potential to lower costs across the full lifecycle of a mortgage loan—origination, qualification, valuation, title and closing. Through automation and better visibility, the right technology

administrative burden on your people and making the closing process easier for your borrowers. By making sure you keep your inhouse employees focused on revenue-generating roles, outsourcing cost-center functions to proven vendors with strong people and deep expertise, and moving to electronic closing documentation you can achieve significant improvements in profit margins.

Conclusion A few strategic changes in the areas of processes, technology and people can results in huge improvements in profitability for 2016. Carefully selecting vendors who offer the most flexible, advanced technology and proven expertise can help you streamline processes and close loans

faster, while also enforcing compliance. Outsourcing functions such as appraisal management will yield immediate reductions in fixed costs and overhead while also saving you money longer-term by reducing mortgage buy-back risk. Technology automation, electronic closing and process outsourcing will not only deliver measurable improvements to profit margins, they will allow you to refocus your people on what matters most—customer satisfaction, the best borrower experience and business growth. Paul Doman is the president and CEO of Accurate Group, a nationwide appraisal management and compliance company whose mission is to help real estate finance professionals deliver business growth. 67

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People People are one of the most valuable assets that companies have so it is important to have them focused on

the right things. While this may seem obvious, too often, employees get caught up in administrative work or slowed down by inefficient processes, disparate systems or lack of process visibility. It happens to all of us, and it is both frustrating for employees and detrimental to the profitability of your business. Mortgage lenders and servicers are faced with this challenge daily as a result of legacy technology, excessive amounts of paper documents and a multitude of regulatory requirements. While you’re expecting employees to provide excellent customer service, generate new mortgage and home equity loans and close those loans quickly, too often they are slowed down by factors outside their control. Or worse, they’re focused on overhead functions, such as appraisal management, compliance and document production, rather than contributing to revenue-generating functions that drive business growth. In addition, validating, maintaining and managing the right skill sets and certifications for third-party personnel, such as appraisers, can be timeconsuming, costly and prone to error. In the case of appraisal management and compliance, outsourcing is once again a high-value decision. By outsourcing the entire appraisal management function—or even certain pieces of it—you can reduce the number full-time people who are basically functioning as a cost center and redirect those resources to a profit center. In addition to seeing an improvement in your profit margins, you will likely find that employee satisfaction improves as people realize their work is now contributing more directly to business growth. You will also benefit from outsourcing appraisal panel management in situations where your chosen vendor has a strong, established appraiser network and guarantees maintenance of required licenses and certifications. The closing process is another area that can be a source of frustration for people—both employees and borrowers. Moving to electronic documentation and e-signature technology will reduce overhead and help accelerate loan closing, while reducing the

can accelerate processes, reduce errors and enforce compliance checks, while also improving productivity and lowering costs, thus having a direct impact on profitability. If you are currently outsourcing or choose to outsource processes such as appraisal management in 2016, ensure that you carefully evaluate the strength of the technology platform each vendor provides along with their services. Look for an established vendor with proven technology that can provide fast and easy integration with your existing systems and processes. Also consider each vendor’s focus on compliance. With recent changes to regulations and the complexity of appraisal management and closing compliance requirements, you need to be confident that your solution providers have both the expertise and the technology to ensure your business stays in compliance and is equipped to handle an audit on a moment’s notice. The faster and more accurate your appraisals are, the better the experience for the borrower. Similarly, borrowers want a low-hassle closing process with no errors or delays. One way to achieve this consistently is to implement Web-based, electronic closing technology that includes secure e-signature capability. Closing documentation is delivered electronically, allowing more lead time for borrowers to review the documents and sign them anywhere that is convenient for them. Everyone involved in the closing process then has an electronic record of the settlement, reducing paper and risk of error or mishandling. Investing in the right technology is becoming more critical to success in the mortgage industry as everyone involved in the mortgage loan process—including consumers— becomes more tech-savvy. As with outsourcing processes, consolidating your business with a select few trusted vendors with nationwide presence and deep expertise in the mortgage industry can ensure consistency in your technology applications and lower your compliance risk.

“Recent studies have shown that the total appraiser population has dropped 20 percent since 2007, and 62 percent of appraisers are nearing retirement age.”

An Appraisal Industry Forecast for 2016 By Tom Hurst

The appraisal industry is dynamic, and therefore, can be somewhat challenging to chart which trends will actually take flight. However, there are key factors that will play a major role in the growth and development of the appraisal sec-

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tor. These include client expectations, reliance on appraisers and the buzzword of 2015, compliance. Read below to see where we believe these key issues will take us in the year ahead. In an effort to surpass client

expectations, the appraisal industry will focus on developing a more seamless experience throughout the mortgage lifecycle in 2016. As always in the appraisal industry, quality and timeliness are paramount. However, we continue to see more and more lender clients defining success through performance. Lenders are expanding their focus to include the borrower experience, and StreetLinks expects that the appraisal component of the mortgage loan cycle will be redefined for the borrower in 2016 and beyond. For example, borrowers now expect more responsiveness and scheduling flexibility in their appraisal process. A focus on an improved borrower experience is something that appraisal management companies (AMCs) should welcome and encourage. Creating a seamless, comprehensive and positive experience that keeps all key players in mind will soon be status quo for all vendor partners in the mortgage industry. We also believe 2016 will continue to demonstrate that the demographics of the appraisal industry, and subsequent origination industries, are rapidly changing. The demand for licensed appraisers with knowledge of the local market is higher than ever. This high-intensity structure is not sustainable, and a shift will soon have to take place in the appraiser industry to meet demand across the nation. The industry, as a whole, will have to find creative new ways to engage and leverage their current appraiser panels, with a deliberate effort to attract new talent. One of the main questions facing our industry is how to inspire a new generation of potential appraisers. Recent studies have shown that the total appraiser population has dropped 20 percent since 2007, and 62 percent of appraisers are nearing retirement age. We need to ask ourselves, “How can we be more attractive to encourage Gen Xers and Millennials to continue to enter the appraisal space?”

Another topic that continues to change the face of the appraisal industry is regulations. Compliance will appropriately remain a staple for 2016 as it continues to play a vital part in daily operations for businesses throughout the mortgage industry. StreetLinks has adapted to the new TRID environment by working with our clients to build customized appraisal pricing models that reflect their interpretations of their own regulatory responsibilities. This includes using historical loan footprint data and other metrics to improve predictive capabilities for identifying complex appraisal assignments. Additionally, we have focused on procedural efficiencies designed to elicit more timely notification of complex fee requests at the individual assignment level. Moving forward, we will continue to study trends identified in the data available in order to promote improvement in existing strategies. We’ll also continue to improve on departmental procedures and training for internal team members tasked with communicating complex appraisal scenarios with appraisers and clients. In the future, we also hope to grow our insights into the regulatory environment and potentially play a constructive role in the regulatory discussion. We hope this involvement allows us to be a strong voice for the industry and an advocate for lenders and appraisers alike. As an original founder of StreetLinks, Tom Hurst has played a pivotal role in the company’s growth and success for more than 10 years. Today, as president of StreetLinks, Tom remains an integral part of StreetLinks’ growth, product development and commitment to pushing the status quo, keeping the company at the forefront of valuation technology and innovation.

Operation VA SITREP

“Your VA Situation Report” By Richard M. Bettencourt Jr., CRMS, CMHS

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Private Road … A Hidden Killer! Well, I hope everyone had a wonderful Thanksgiving, enjoyed time with family and friends, and took some time to reboot from this crazy business! I’m sorry I wasn’t able to get my article completed in time last month, but I just had a schedule that wouldn’t give me a second to catch a break! But, it gave me a chance to think about a great topic for this month’s article and it was something that I personally ran into not too long ago on one of my VA transactions. I like to categorize them as one of the silent killers for VA loans: The dreaded Private Road Maintenance Agreement! Imagine this … you’re clipping along on your VA home loan and so far it’s been smooth sailing! You have all of the veteran’s credit docs, their credit is fine, they have a perfect work history, their income is solid, they have a wonderful residual income, excellent assets, and an AUS approve/eligible that should essentially give you a clear to close. Now, depending on what part of the country you’re in, you get your appraisal anywhere from 10 to 30 days from execution of the sales contract, and when that appraisal comes in, you see (if you happen to review appraisals) the box checked off for “Private Road.” The underwriter immediately adds a condition for a “Private Road Maintenance Agreement.” So, you say to yourself, “I’ll just call the listing agent and ask them for a copy. This is pretty standard. I mean, they must know they’re on a private road, right? Wrong!” You quickly call the listing agent, request a copy of the Private Road Maintenance Agreement, and on the other end of the phone, you hear nothing! That five seconds of silence immediately triggers that “butterfly feeling” in your stomach and you instantaneously know there is no such agreement! What do we do? Is this deal dead? Can the veteran just sign an agreement all by themselves? Would executing that document alone be in their best interest? Will I be able to get two, five, 10 or in my case, I needed 60 neighboring houses to sign a legal document acknowledging their financial responsibility to a road they thought was the town’s responsibility? If this deal falls apart, who’s head is on the chopping block? Is it the lenders’ responsibility, the buyer’s agent, the listing agent or the seller? All of these questions quickly come out of the black hole every loan officer hates to admit exists and opens up a can of worms that could potentially kill your VA loan. This leaves the veteran without a house, possibly putting their deposit at risk, and who knows, they may not even have a place to live since they gave up the lease to the apartment they were renting. Luckily for me and my situation, I was able to go online to the Massachusetts Registry of Deeds, locate the Declaration of Trust for the Planned Unit Development (PUD) that nobody told us existed, located the easement right of way, and saw that the cost, maintenance and upkeep of the areas above and below the bituminous asphalt road was equally divided amongst the 60 homes in the subdivision! Dodged a huge bullet there! Let’s just say we don’t want that to happen again! How do we avoid this nightmarish scenario? Well, the only way, which is absolutely critical in a post-TRID environment, is communication! As the loan originator, you need to make that call to the listing agent introducing yourself, explaining this is VA financing, and highlighting any special needs that could arise with the VA loan. Inform those agents about the private road requirements, pest inspection, water tests, minimum property requirements, and anything that can help your veteran close on their home. This goes a long way, especially with listing agents who are petrified of VA home loans. Who knows, it just might create a new referral partner for you! It’s happened to me on more than one occasion. What a feeling, right? You did such a great job on this “difficult” VA home loan that the listing agent begins to refer clients to you because you made a “hard” loan easy! Another, and I sometimes feel mortgage professionals don’t do this

How Will You Protect Borrower Data in 2016? By Andrew Liput

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“Data privacy” and “data security” are terms most lenders are hearing over and over again these days. The reasons for this are numerous, but include the Consumer Financial Protection Bureau’s (CFPB’s) focus on the issue, increased publicity over data breaches in business and industry, and heightened concern by consumers about how their sensitive non-public information is being managed by banks. Although data privacy and data security are terms that are commonly used interchangeably, they in fact mean different things. A data security policy is required to ensure that data privacy is protected. When a lender is entrusted with a borrower’s highly private information, the business must develop, implement and manage a security policy to protect this data. So data privacy identifies that personal and private information which must be protected and how it may be used in a business in an appropriate manner, while data security includes the means and methods used to ensure the security of the data both internally (from employee breaches) and externally (from third party breaches). Data privacy rules mean that lenders must define and police the appropriate use of borrower data within their walls. This includes what data is gathered (relevance to services), who has access (need to know), and where data is stored (how long and how safe). Both the CFPB and the Federal Trade Commission (FTC) have jurisdiction over the mishandling and misuse of consumer data, and each may enforce penalties against lenders that have failed to ensure the privacy of a borrower's data. At a minimum, lenders must screen employees with access to private data regularly, have an appropriate policy in place regarding handling of data, and test these policies on an ongoing basis. Data security encompasses your company’s practices and processes that are in in place to ensure data is not being used or accessed by unauthorized individuals or parties. It ensures that sensitive data is accurate and reliable and is available when those with authorized access need it. A data security plan includes facets, such as collecting only the required information, keeping it safe, and destroying any information that is no longer needed. These steps will help any business meet the legal obligations of possessing sensitive data. A data security policy is simply the means to the desired end, which is data privacy. However, no data security policy can completely overcome the efforts of third parties bent on hacking into databases and seeking access to consumer data to monetize for improper and illegal purposes. At a minimum, lenders must develop written data security policies that include safe storage of data and penetration testing of their backup systems (local and/or cloud) to search for gaps and leakage. Knowing that there is no such thing as a foolproof data security system and that all systems are ultimately vulnerable to breach by determined criminals, lenders must demonstrate a commitment to adopting the most stringent policies relevant to the size and scope of their business, while also considering purchasing crimes and cyber liability insurance to offload risk in the event of unexpected and unintended breaches. Making sure all borrower data is private and being used properly can be a near-impossible task that involves multiple layers of security. Fortunately, with the right people, process and technology, lenders may support their data security policies through continual monitoring and visibility into every access point and with insurance back-up. Andrew Liput is CEO of Secure Insight, a risk analytics firm offering vendor management services addressing settlement agent risk. He can be reached by e-mail at

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result of the ownership of Finance of America Reverse and the recent acquisition of several additional mortgage entities which are part of Finance of America Mortgage LLC, the Finance of America companies have become one of the largest non-bank originators in the U.S. “Unifying the Finance of America Holdings brands is a key step in establishing the wide diversity of products and services available to our customers. Finance of America will be synonymous with all types of lending, and reverse mortgages are a key component of that business. Changing our name also increases transparency and assists us in placing all consumers into the product that best serves their lifestyle,” said Kristen Sieffert, President of Finance of America Reverse. Finance of America Reverse was founded in 2003 and has licensed retail and wholesale divisions in most U.S. states and Puerto Rico.

Top Vine Mortgage Services Opens Its Doors Top Vine Mortgage Services LLC has announced the launch of its business in Watchung, N.J., led by Managing Partners Tom Pasckvale and Vinnie Cervo. The official opening was marked with a ribbon-cutting ceremony officiated by Watchung Mayor Stephen Pote, who offered his best wishes and thanked the partners for bringing their business to the area. Cervo and Pasckvale have been in the industry for nearly 20 years combined and have found that now is the time to take this next venture as the real estate market continues to be hot. “We are excited to embrace this opportunity and bring our experience to the next level. We greatly appreciate the relationships that we have built as a result of being in the industry for so long,” said Pasckvale. “Our team has strong values and beliefs that are at the core of how we live. Top Vine’s platform of always putting customers first and educating them along the way is a true testament to the values we practice in our own lives.” “We pride ourselves on offering customers great service and solid financial advice,” said Cervo. “While the industry can be challenging to navigate, mortgage rates remain at historic lows. We look forward to helping customers get the best rates available in the states where we plan to be licensed (NJ, NY, PA, CT and FL).”

Mortgage Professionals to Watch Klosterman has joined l Kevin CoesterVMS. With more than 25 years of experience in valuations, Klosterman will be responsible for training CoesterVMS’ national network of appraisers regarding the company’s existing and new valuation products. He also will be instrumental in the


development of future applications. Mortgage Insurance l National Corporation (National MI), a subsidiary of NMI Holdings Inc., has announced that Dana Abernathy, senior account manager, was named chairman of the Mortgage Banker Association’s (MBA’s) Certified Mortgage Banker (CMB) Society. l Valuation Partners has hired two veteran mortgage industry executives to help prepare for the company’s future growth: Jim Davis will be responsible for overseeing the accounts of all servicing clients in the new position of managing director of Loan Servicing, and David Raskin has been named chief valuation officer, responsible for overseeing all valuation decisions provided through the company’s products and services. l Paramount Residential Mortgage Group Inc. (PRMG) has announced the recent promotion of Chris Sorensen to SVP, national director of Retail Production. Chris brings with him more than 27 years of experience in both real estate and retail mortgage banking. l Amy Ramsey has joined Indecomm Global Services, a provider of mortgage technology, training and outsourcing services, as national sales manager for the Mortgage Learning Division. Amy will be responsible for Indecomm Education, Professional Services, Consulting and Doc Management Solutions. l imortgage, a division of loanDepot LLC, has announced the appointment of Kevin Budde as senior vice president of production for the West Division, and Tom Fiddler, senior vice president of production, East Division. l GSF Mortgage has announced that Leo Spanuello has been named regional manager in GSF’s Brookfield, Wis. branch office, joining GSF with 22 years of experience. GSF has also announced its expansion into the state of Ohio, welcoming Michael Bardy as branch manager in the new Medina, Ohio office. GSF Mortgage has announced the addition of Debra Castellano as mortgage loan originator in Nashville, Tenn., joining GSF with 25 years of mortgage and real estate experience. GSF has also added Branch Manager Khari Nixon in Carmel, Ind., joining GSF with 19 years of industry experience. GSF Mortgage has appointed Marcela Hurtado as branch manager in GSF’s Huntington Beach, Calif. office. The company has also added Beckie Ford as mortgage loan originator in continued on page 72


By Andrew Liput

Top industry news … TRID came, saw and … conquered?

You can’t make this stuff up! This month, like every month, we feature some of the latest news about mortgage and closing fraud affecting our industry. These are real cases from

l In Massachusetts, a Boston real estate broker was sentenced for conspiracy to defraud mortgage lenders of more than $4 million relating to more than two dozen properties. The broker and a co-conspirator identified buildings for sale they could purchase and convert into condos. After the conversion, they set up straw buyers, creating hundreds of falsified documents, then took the funds and deposited them into their own accounts. l In New York, a real estate broker used the proceeds of his latest scam to help finance his fiancée’s wedding dress. The broker and his business partner scammed victims out of their homes in a loan modification scheme. From 20082012, they defrauded more than 1,000 homeowners who hired them to assist with their loan modifications. But the team didn’t

l A former credit union loan officer in Washington approved more than $83,000 in loans for which he held a financial interest. He made false statements on loan documents that enabled him to get the loans approved for borrowers. He did not inform his supervisors that he had a personal and business relationship with the borrowers, according to court documents. In addition, he failed to disclose the true financial worth of the borrowers and all of the loans went into default.

Regulatory updates … CFPB announces HMDA changes On Oct. 15, the Consumer Financial Protection Bureau (CFPB) finalized a rule to improve information reported about the residential mortgage market. The rule is designed to “shed more light on consumers’ access to mortgage credit by updating the reporting requirements of the Home Mortgage Disclosure Act (HMDA) regulation.” The Bureau is working with other federal agencies to streamline the reporting process for financial institutions. CFPB Director Richard Cordray commented that “The Home Mortgage Disclosure Act helps financial regulators, the public, housing officials, and even the industry itself keep a watchful eye on emerging trends and problem areas in the nation’s mortgage market—the largest consumer financial market in the world. With

today’s final rule, we are shedding more light to foster better understanding of the market, and also ensuring that lenders have sufficient time to come into compliance.” HMDA, which was originally enacted in 1975, requires many lenders to report information about the home loans for which they receive applications or that they originate or purchase. Regulators use the information to monitor whether financial institutions are serving the housing needs of their communities, to assist in distributing public-sector investment so as to attract private investment to areas where it is needed, and to identify possible discriminatory lending patterns. Look for discrimination in lending to be a strong focal point of the CFPB and state auditors in 2016.

On the lighter side … A client bought a new home and the mortgage originator wanted to send flowers for the occasion. They arrived at the home and the owner read the card; it said “Rest in Peace.” The owner was angry and called the MLO who, in turn, contacted the florist to complain. After he had told the florist of the obvious mistake and how angry he was, the florist said. “Sir, I’m really sorry for the mistake, but rather than getting angry you should imagine this: somewhere there is a funeral taking place today, and they have flowers with a note saying, “Congratulations on your new home.” Andrew Liput has been a corporate, real estate and banking attorney for nearly 30 years He is the founder, CEO and president of Secure Insight, the first data intelligence and risk analytics firm to offer specialized vendor management services to mortgage lenders and banks nationwide addressing settlement agent risk. He can be reached by e-mail at


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Well, the TRID implementation deadline has come and gone and the Earth is still spinning on its axis. From the deluge of articles predicting a catastrophic end of times event, the TRID changes have occurred fairly quietly. I have even heard from some industry veterans that they are pleased at how the new disclosures are streamlining, even just a bit, the voluminous disclosure process for residential mortgage loans. The biggest difficulties seem to be managing the timing of issuing the Loan Estimate (LE) and Closing Disclosure (CD), followed closely by coordinating with title and settlement agents the delivery of fees and costs so that the CD can be delivered to the consumer with accurate information well prior to the closing date. I guess we will not know the full impact of implementation and compliance until the first regulatory audits take place … oh goody!

l In New Jersey in 2002, a real estate businessman from Connecticut was indicted and served sentence for conspiracy, mail fraud and equity skimming. The man plead guilty, was sentenced to five years in prison with three years of supervised released under the terms that he would refrain from engaging in real estate or mortgage activities. A few months ago in Connecticut, this same man, having used at least 13 different aliases, once again appeared before a federal grand jury in a long-running fraud scheme that targeted dozens of distressed homeowners. It was not until after his arrest for the Connecticut offense that federal agents tied him to the 2002 conviction.

stop there—they defrauded banks and the Federal Housing Administration (FHA) —and even the Small Business Administration (SBA) by using Hurricane Sandy relief funds to pay for personal expenses. Further investigation discovered that, in 2009, this broker was banned in Massachusetts from offering foreclosure-related services.

The mortgage closing transaction is the single largest financial transaction in the lives of most consumers, and it is also the riskiest stage of the mortgage process for lenders. While the vast majority of lawyers and notaries and title agents are experienced, ethical and diligent professionals, for a few the role of closing agent is too tempting a lure for selfish criminal intent. This column addresses the good, the bad and the ugly!

around the country, only the names have been redacted to avoid threats of frivolous legal action…

Important Numbers to Know About Your Mortgage

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By David Hosterman

DECEMBER 2015 n National Mortgage Professional Magazine n


To be fully prepared for closing when buying or refinancing a home, it is crucial to understand the numbers that make up loan. A home is typically a consumer’s largest investment so knowing the numbers associated with a mortgage contract is fundamental. The costs along with the loan terms associated with a mortgage transaction should be explained to the client during the preapproval process of the loan, so that the customer has a clear representation of what is entailed with a mortgage prior to getting a property under contract or going forward with a refinance. The new regulation known as the TILA-RESPA Integrated Disclosure Rule (TRID) allows homebuyers to obtain their final loan terms and conditions at least three days prior to closing. The buyer can review information well before closing to make sure they understand all of the loan’s details. This document is called the Closing Disclosure (CD) and addresses information such as rate, payment closing costs and other essential information related to the loan. This form should be very similar in nature to that of the Loan Estimate (LE) that the client is provided at the time of the initial loan application. The CD allows the client to see what changes occurred from the initial loan application to closing. The CD specifically notes any changes in relationship to the terms of the loan in comparison to the LE. The numbers, including rate, loan amount, insurance, taxes, mortgage insurance, downpayment, closing costs, terms and total payment are important to thoroughly understand. Downpayment is a critical figure. However, in many cases, buyers may think it is the only upfront money needed. Many consumers do not take closing costs into account when estimating how much cash is needed for a home purchase or refinance. Closing costs may be required in addition to the downpayment to close a loan. For a refinance, closing costs are often built into the loan, so knowing the total loan amount is even more necessary. Other expenses such as taxes, insurance and mortgage insurance can also have a major impact on payments. Consumers must be sure these items are explained wholly and that all information is presented. This will provide clear insight into what the final loan payment will be. In most cases, homeowners association (HOA) dues are not included in the mortgage payment, so this is another factor to consider as it affects outgoing monthly cash flow. Furthermore, there are additional expenditures associated with purchasing a home, such as appraisal, inspection, sewer scope and radon testing. These costs typically occur prior to the property closing, so they should be budgeted before starting a home search or going under contract. These costs are typically required to be paid for soon after getting a property under contract. The customer should be prepared to pay for these items within a week after acceptance of the contract. While buying a home can sometimes feel like a puzzle, knowing what information is needed can help. Understanding the numbers that go into a loan is a huge first step. This sets the stage for future decision-making and exciting home buying milestones to come. David Hosterman (NMLS#: 220562) is branch manager of Castle & Cooke Mortgage’s Denver office. He can be reached by phone at (303) 501-1401 or email





Colorado Springs, Colo., joining GSF with 25 years of mortgage industry experience. New American Funding has announced the appointment of Walt Nally as their regional builder sales manager for the West Los Angeles area. New American Funding has also announced the appointment of Misty Lapham as vice president, regional manager, and she will oversee the Orange County, Calif. area. In this position, Lapham will oversee sales and operations for New American Funding’s Orange County branches. HomeUnion has announced that they have hired Akiko Koh as chief operations officer and senior vice president of operations. LRES has announced that Molly Merchant has been promoted as its new REO manager of asset management. Bay Equity has announced the addition of Area Sales Manager Laura Edwards to the company’s new branch in Gillette, Wyo. Newly launched California Members Title Insurance Company, which serves credit unions, mortgage lenders, and institutional lenders throughout California, has named two key executives to its staff: Linda Blood has joined the company as

chief operating officer and Mary MacGregor as senior vice president of Escrow Operations. l CoreLogic has announced the appointment of two senior industry executives to lead the CoreLogic Multifamily business unit: Richard Leurig, senior vice president; and Scott Bradford, vice president of Sales and Marketing l InterLinc Mortgage Services LLC has announced the appointments of David Scheiderich as executive vice president and chief financial officer, and Brennan Holland as executive vice president and general counsel.

Your turn National Mortgage Professional Magazine invites its readers to submit any information, events, passages, promotions, personal or professional occurrences that seem appropriate and/or other pertinent data to the attention of: Heard on the Street/Mortgage Professionals to Watch column Phone #: (516) 409-5555 E-mail: Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

shaving costs continued from page 51

all of the others as well. But again, this is a perfect example of how our industry has changed in the years after Dodd-Frank. Before the financial crash, the lenders that were pushing into electronic mortgages were trailblazers, clearly part of the top 20 percent, the innovators. Not today. Now, the GSEs want the appraisal data electronically, the CFPB wants everyone to go to electronic closings and a growing set of correspondent lenders don’t even care about the paper files. In a fast changing mortgage industry, paperless has become the realm of the “traditional” lender. The best lenders are going beyond this, finding ways to push that envelope, like they always do. They are proactively seeking out changes they can make that others haven’t noticed yet or may not even be aware are available to them. My favorite example is verifying income with copies of tax returns. While other lenders are printing out paper, sending it out to a borrower to get a signature, then sending that

into their Income Verification Express Service (IVES) vendor to get a tax transcript from the IRS, leaders are doing it all electronically, from the borrower’s smart phone. This wasn’t possible a short time ago. It’s a great example of being proactive and driving the change. No one likes change, but lenders that decide to drive it will lead the industry. That’s always been true, in every industry. The difference for us in this fast-changing mortgage business is that firms here are being driven much harder. The leaders are innovating at a tremendous pace, out of necessity and, in the end, that will do more good for our borrowers than any law Congress can pass. Joe Dahleen is president of Taxdoor, a paperless solution for borrowers IRS tax transcripts that does not require a signed 4506-T. he may be reached by email at or find him on Twitter at @Taxdoor, @CogentRoad or @JDMortgageTech.

In the November 2015 edition of National Mortgage Professional Magazine, the incorrect phone number was listed for Global DMS on page 44 in “NMP’s 2015 Mortgage Technology Providers Directory.” The correct contact number for Global DMS is (877) 866-2747. Their Web site is SPONSORED EDITORIAL

is not protecting them in any way.

TRID: The Good, the Bad and the Ugly By Andy W. Harris, CRMS

n We need fee tolerances

removed from appraisal fees and any other minor third-party fee revised under TRID rules (those in which do not impact the rate, APR, term, etc.) to avoid delays and more inaccurate fee padding due to fear of change in circumstance or lender recourse. More ways we are seeing different policies and many disclosing inaccurately to the borrower. n Unless a risky loan with a pre-

Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.based Vantage Mortgage Group Inc. and past president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431, e-mail AHarris@VantageMortgageGroup.c om or visit

n National Mortgage Professional Magazine n DECEMBER 2015

payment penalty or potential future non-prime or nonagency loan with unique features (not applicable to most), we need the three-day waiting period lifted on the CD for any Qualified Mortgage (QM) agency-backed loan under Fannie Mae, Freddie Mac or Ginnie Mae. These loans should be exempt from this outdated and no longer applicable policy written for a 2006 residential mortgage climate. Not only is the consumer protected under tolerances from the original LE from the beginning with additional educational verbiage, but this waiting period harms the consumer in every case I have seen so far due to delays. Every consumer has complained about it and it


I’ve been tracking many different lender policies and talking with mortgage originators across the U.S. to determine what has worked and what has not under TRID. I have found that the closing disclosure seems to be the biggest hurdle presently and causing the most delays, but it is definitely unique to the lender and borrower situation. The lenders that embraced the technology piece and able to order the Closing Disclosure (CD) upfront, and many times, ahead of docs as well as table funding are ahead of the pack on execution. All will need to come to this reality and comply. Technology helps control the data, fees, and timing for compliance from start to finish and table funding is almost required today. The Loan Estimate (LE) certainly has advantages over the GFE/TIL, however, there are disadvantages making the form more confusing for every consumer. It is very concerning that most states have to overdisclose title and other fees to the consumer that they will not pay with the originator put in a

difficult place when the formal disclosure is inaccurate by upwards of thousands of dollars. Remember, on the GFE even with owner’s title policy disclosed as buyer fee (in most states paid by the seller), there was no downpayment reflected so it was an easier explanation. Now on the LE, the cash to close and over disclosure of added lender title policy with no discount (again, as applicable in most states), it makes things very difficult to understand and misleading to the consumer. Certainly our regulators’ intentions were not to mislead consumers. The CFPB needs to amend TRID policies on the following: n We need to quote accurate fees, no exception, without fear of recourse on interpretation. We need to be as clear, accurate and precise as possible to the consumer upfront to closing. Right now, that is impossible due to these rules with “optional” and padded fees reflected as buyer fees when not applicable. This is easy to do if they allow the lender the ability to simply reflect accurate title and title discounted insurance and other fees that will reflect what the consumer will pay at closing in their state.

So the LE in my opinion is a great new form for the consumer, yet due to the policies noted above the clarity has back-fired. We have an opportunity to do what TRID was meant to do and that is to be more transparent and upfront to the consumer. We cannot lose this opportunity and need the CFPB to amend and be clear with policies. I cannot tell you how frustrating it is to overdisclose fees to clients and spend hours explaining how and why they are not paying certain fees when we are forced to disclose that they are. It seems misleading and not necessary. We can be clear and accurate and avoid these problems. The three-day hold also is a huge issue, primarily on educating real estate agents on timing and protecting consumers. So far, I’ve seen nothing but consumer harm vs. protection on the “warning you’re buying a home and you’re a victim so wait and think about it.” Most have thought long and hard about it from the laundry pile of disclosures already received during the 20 to 45-plus day process. Believe me, they are ready to move into their home and don’t need regulators telling them otherwise on non-risky mortgage loans. Let’s give consumers some credit. Please share your TRID stories for next month! What are you seeing? The more the better, but I’m curious to see what other originators are dealing with. Are you an originator? Send your stories! To have topics considered in future editions, please e-mail me with “OrigiNation” in the Subject Line at AHarris@VantageMortgageGroup.c om. These can be confidential or your name and company can be referenced if you wish.

DECEMBER 2015 n National Mortgage Professional Magazine n

The Home Mortgage Disclosure Act:


Big Changes on the Way BY

eliminates the existing origination volume and asset size criteria and replaces them with the “uniform loan volume threshold.” The standard will have the most impact on non-depository institutions, sweeping up many non-bank creditors into Regulation C compliance. This is due to the fact that the Rule actually removes the current coverage requirement that, in the preceding calendar year, a non- depository institution should have originated home purchase loans (including refinancings) equaling: (A) at least 10 percent of the institution’s origination volume in dollars, or (B) at least $25 million. Comparatively, the Rule removes the current coverage requirement for a nondepository institution; to wit, (a) have total assets of more than $10 million as of the preceding Dec. 31, or (b) have originated at least 100 home purchase loans (including refinancings) in the preceding calendar year. Furthermore, currently a non-depository institution must satisfy at least one prong (either (a) or (b) above) or both of these coverage criteria in order to be covered. Consequently, the removal of the foregoing thresholds for non-depository institutions will increase the number of non-depository institutions required to collect and report data. Yet, the Rule will actually decrease the number of depository institutions covered, because it adds the uniform loan volume threshold to the existing coverage criteria for those institutions. The Bureau estimates that the new coverage criteria will exclude from coverage approximately 1,400 depository institutions that are currently covered by the rule and include about 450 non-depository institutions that are not currently covered by the rule. Clearly, the Bureau is casting a wide net in order to apprehend the largest, reliable data set possible! Consider the following chart for depository institutions: Depository Institution

Coverage Criteria - Now

Coverage Criteria-Later

Asset Size

$44 million


Federal Status

Insured or regulated federally


Preceding Dec. 31

Home/Branch office in MSA6


Preceding Calendar Year

Originated at least one purchase Same or refinance on first lien 1-4 family dwelling

Jan. 1, 2017

Meet existing criteria and originated at least 25 home purchase loans (including refinancings) in each of the two preceding calendar years.

Jan. 1, 2018

Meet existing criteria and originated (a) at least 25 covered closed-end mortgage loans in each of the past two years or (b) at least 100 covered open-end lines of credit in each of the two preceding calendar years.7

Covered institutions The Rule provides guidelines to both depository and non-depository institutions. Both of these institution types are covered if, among other things, they originated at least 25 covered closed-end mortgage loans or 100 covered open-end lines of credit in each of the previous two calendar years. This standard is called a “uniform loan volume threshold,” and is part of the new evaluation process to determine if an institution is required to collect and report HMDA data. Regulation C

Thus, on Jan. 1, 2018 a depository institution will be covered by Regulation C if, assuming asset size and the other coverage criteria are met, it originated at least 100 covered open-end lines of credit in each of 2016 and 2017, even if it did not originate 25 closed-end mortgages in each of 2016 and 2017.



n National Mortgage Professional Magazine n DECEMBER 2015

1. Covered institutions (financial institutions required to collect and report HMDA data); 2. Covered transactions (transaction types and applications); 3. Loan-level data (transaction data to collect and report on); and 4. Reporting and disclosure (method and frequency of data reporting and public access to that data).


“It’s just a way to keep the Ph.D.’s employed in Washington, D.C.!” Such was the statement that a CEO of a regional mortgage banker said to me recently about the new changes to the Home Mortgage Disclosure Act, known by its acronym HMDA. “More statistics that go nowhere and tell us nothing,” he said, “and more ways to interfere in our loan origination process.” I grant that the regulatory burdens these days are demanding, but I was surprised by the sense of futility in those remarks. Over the years, in fact, HMDA data has played a very useful role in identifying fair lending concerns, helping financial institutions to avoid disparate impact and disparate treatment violations. It certainly is important to mortgage lenders and originators in their obligation to ensure a level market to all consumers, without the impediment of discriminatory practices by bad actors. Perhaps another way to make sense of the Bureau’s amendments to HMDA is to recognize that a primary reason for those changes is to create a better tool for rectifying adverse fair lending patterns. At the core of the revisions undertaken by the Consumer Financial Protection Bureau (CFPB) is the commitment to consumer protection laws generally, and, by enhancing the metrics of HMDA data collection, the commitment in particular to strengthening fair lending standards. What better way to understand fair lending than through a deep analysis of the HMDA Loan Application Register or “HMDALAR.” The fact is, the new changes to HMDA will derive over 250 million data points from financial institutions related to mortgage loan applications and originations in 2018. The amendments to existing HMDA requirements, effectuated through HMDA’s implementing Regulation C, will be spread over four effective dates between Jan. 1, 2017, and Jan. 1, 2020.1 However, the key date that contains most of the amendments, will the compliance effective date of January 1, 2018. On that effective date, financial institutions will be required to collect HMDA data for applications they receive2 and loans they originate on or after Jan. 1, 2018.3 Certain changes will be new to non-banks, though familiar to depository institutions. For instance, beginning in 2018, non-banks will be required to record HMDA data internally within 30 days of the end of the quarter in which final action was taken. Regulation C has not previously required quarterly recording for non-banks, so this will be a new undertaking for non-depository institutions.4 I am going to provide an outline of four HMDA-related areas that the Bureau revised in its update to Regulation C, promulgated through its issuance of the Final Rule (Rule) on Oct. 15, 2015. These changes to Regulation C affect the following guidelines:


the home mortgage disclosure act continued from page 75

Now consider the following chart for non-depository institutions: Non-Depository Institution Coverage Criteria - Now

Coverage Criteria-Later


10% dollar production or $25 million

See below.

Asset Size

$10 million or 100 purchases

See below.

Preceding Dec. 31

Home/Branch office in MSA8

See below.

Jan. 1, 2018

If (1) on the preceding Dec. 31, it had a home or branch office in an MSA, and (2) it originated (a) at least 25 covered closed-end mortgage loans in each of the two preceding calendar years, or (b) at least 100 covered open-end lines of credit in each of the two preceding calendar years.

Therefore, on Jan. 1, 2018, a non-depository institution will be covered by Regulation C if it has an office in an MSA and it originated at least 25 closed-end mortgages in each of 2016 and 2017.

Covered transactions

DECEMBER 2015 n National Mortgage Professional Magazine n


Currently, HMDA data is collected and reported on closed-end, dwelling-secured loans made for home purchase and refinancing purposes. Also included are closed-end loans made for home improvement purposes, regardless of whether the loan is secured by a dwelling. Reporting home equity lines of credit (HELOCs) to the HMDA-LAR is optional. Regulation C does not specify a distinction between loans made for a consumer or business purpose; that is, both consumer-purpose and business-purpose loans are reportable only if they satisfy Regulation C’s specific “purpose” test, which determines the subject loan to be for the purchase of a dwelling, refinance a dwelling-secured loan, or to make home improvements. Certain terminology is being either changed or will remain intact. These terms are intrinsic to the understanding of the amended Regulation C. Three salient terms are “dwelling,” “preapproval,” and “coverage.” The first term, “dwelling,” is used throughout the HMDA regulatory framework. The definition of “dwelling” remains unchanged from the current rule. Dwelling means any residential structure, whether or not attached to real property. It includes vacation or second homes and rental properties; multifamily as well as one-to-four-family structures; individual condominium and cooperative units; and manufactured and mobile homes. It excludes recreational vehicles such as boats and campers, and transitory residences such as hotels, hospitals, and college dormitories. The second term, “preapproval,” requests for preapproval for a purpose other than a home purchase, will not be reportable. In addition, a covered institution may (but is not required to) report requests for preapproval for home purchase loans that the institution approved but that the applicant did not accept. This will change under the amended Regulation C. On the applicable compliance effective date, institutions will be required to report preapproval requests for home purchase loans that were approved but not accepted. It is worth noting that preapproval requests for home purchase open-end lines of credit, home purchase reverse mortgages, and home purchase loans secured by a multifamily dwelling are excluded from the requirement. The third term, “coverage,” refers to the operative factor that institutions generally will be covered by Regulation C if, in addition to other criteria, they originated at least 25 covered closed-end mortgage loans or 100 covered open-end lines of credit in each of the previous two calendar years (see chart). If an institution satisfies one of these two criteria but does not satisfy the other, the institution need only collect and report data for the type of transactions that qualified the institution for coverage. In this circumstance, institutions are not required to collect data for the other type of transactions. Factors affecting business purpose transactions are provided in the Rule, as well. The coverage test for commercial- and business-purpose loans and lines of credit is similar to, but narrower than, the test for consumer-purpose transactions. In the first place, like the test for consumer-purpose transactions, business-purpose transactions are covered only if secured by a dwelling. Thus, unsecured transactions will be exempt. Open-end lines of credit will be covered. Unlike the test for consumer-purpose transactions, the Rule retains the specific purpose test for business-purpose, closed-end mortgages and extends that test to business-purpose, open-end lines of credit. Therefore, a commercial- or business-purpose loan is covered only if it is secured by a dwelling and it is made to purchase a dwelling, to refinance a dwelling, or to make home improvements. Also, a commercial or business-pur-

pose, open-end line of credit is covered if it is dwelling-secured and it is made to purchase a dwelling, to refinance a dwelling, or to make home improvements. Importantly, if a consumer applies for a loan or line of credit, the proceeds of which will be used for a business purpose, the business-purpose transactional coverage criteria apply. But such a loan or line of credit is not covered unless the specific purpose of the transaction is to purchase a dwelling, refinance a dwellingsecured obligation, or to make home improvements. Commercial or business-purpose loans and lines of credit for other purposes will not be covered transactions, even if they are secured by a dwelling. A word about agricultural loans: a loan to purchase property for an agricultural purpose is not covered as a home purchase loan, even if a dwelling is situated on the property. The amended Regulation C specifically states that all dwellingsecured loans and lines of credit for an agricultural purpose are excluded from coverage, not just transactions to purchase a home.

Loan level data There are 13 new data points in the revised Regulation C. This number of data points was required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. But the Bureau used its authority in order to further require the collection and reporting of many more data points – that is, all in all, in addition to the 25 or so data points required under the current rule. To put a fine point on it, in sum, the Rule seems to require the collection of up to 54 data points. Of these 54 data points, 10 are unchanged from the current rule, 11 have been modified from the current rule, and 33 are entirely new.9 Unchanged data points are the (1) Application Date, (2) Loan Type, (3) Action Taken, (4) Action Taken Date, (5) Property State, (6) Property County, (7) Property Census Tract, (8) Borrower/Applicant Sex, (9) Borrower/Applicant Income, and (10) HOEPA Status. The Rule adds these data points: l Information about applicants and borrowers, including age, credit score, and debt-to-income and combined debt-to-income ratios; l Information about the loan process, including whether the application was submitted directly to the institution, whether the loan was, or would have been, initially payable to the institution, and the name of, and results from, the automated underwriting system that was used; l Information about the property securing the loan, including value and type (i.e., manufactured home); l Information about the features of the loan, such as total loan costs or total points and fees, origination charges, discount points, lender credits, interest rate, prepayment penalty term, loan term, introductory rate period, and nonamortizing features; and l Certain unique identifiers, such as property address, legal entity identifier for financial institutions, and mortgage originator NMLSR identifier. There are some exclusions. For business- or commercial-purpose loans, the following data points are not required: (1) Rate Spread, (2) Total Loan Costs or Points and Fees, (3) Origination Charges, (4) Discount Points, (5) Lender Credits, and (6) Prepayment Penalty Term. For purchased loans, these data points are not required: (1) Rate Spread, (2) Credit Score, (3) Credit Score Model, (4) Total Loan Costs or Points and Fees, (5) Prepayment Penalty Term, (6) Debt-to- Income Ratio, (7) Loan-to-Value Ratio, (8) Application Channel, (9) Obligation Initially Payable, (10) Automated Underwriting System, (11) Result Generated by Automated Underwriting System. Ethnicity and race data are significantly modified, in that, as amended, Regulation C will allow applicants to add details about their ethnicity or race. Thus, additional data may be available about “subcategories” of race and ethnicity. Institutions will not be required or permitted to complete these “subcategories.” On Oct. 3, 2015, the TILA/RESPA Integration Disclosure (TRID) rules became effective. Four new data points involve TRID data for closed-end mortgage loans. There may be a cumbersome heuristic to deriving TRID data on the four data points. Here’s how I see the debacle: these four data points will need to “link” (or be mapped) or otherwise match the information disclosed on the TRID form with what is reported under the Rule. Furthermore, if an institution cures an erroneous disclosure as permitted under Regulation Z,10 that revised disclosure must be reported under Regulation C to the extent the revision affects information required under Regulation C. Let’s consider a scenario. A financial institution discloses discount points on the TRID disclosures in the amount of $2,500. The amount of $2500 discount points is sent to the HMDA-LAR. In due course, the $2,500 discount points is found to be an error, with $2,000 being the actual discount points. So, the institution rediscloses for the $2,000, makes all required adjustments to the TRID disclosures, and then seeks to correct the data thus far recorded in the HMDA-LAR. However, if an institution must report data quarterly and already reported the amount as $2,500, it must correct the amount and report $2,000 in its annual reporting under Regulation C. Inevitably, this infers that institutions will have to link, map, or otherwise match any TRID redisclosures to the data reported to the HMDA-LAR. This would be a significant, logistical challenge.

Reporting and disclosure

Jonathan Foxx is president and managing director of Lenders Compliance Group, Brokers Compliance Group, Servicers Compliance Group and Vendors Compliance Group, national companies devoted to providing regulatory compliance advice and counsel to the mortgage industry. He may be contacted by phone at (516) 442-3456, by e-mail at or visit

A Message From MAA Chairman Fowler Williams y name is Fowler Williams, and I am president of Crescent Mortgage in Atlanta. I am honored to serve as chairman of the Mortgage Action Alliance (MAA). We are a voluntary, non-partisan and free nationwide grassroots lobbying network of real estate finance industry professionals, affiliated with the Mortgage Bankers Association (MBA). MAA is dedicated to strengthening the industry’s voice and lobbying power in Washington, D.C. and state capitals across America. Recently, MAA launched a new grassroots advocacy action center designed to help people better engage policymakers and stay informed about key policy and regulatory decisions regarding the real estate finance industry. MBA’s Senior Vice President of Legislative and Political Affairs Bill Killmer said that “The MBA believes this new action center will bolster our ability to engage policymakers and regulators about the issues affecting our industry. With more than 10,000 members, the Mortgage Action Alliance is an invaluable piece of MBA’s advocacy efforts and we intend to continue to grow and activate its membership as we face ongoing challenges.” Specifically, the new grassroots action center will include an easy to use Call to Action platform, legislative tracking capabilities, a key contact survey and other features that easily connect MAA members with their elected offi- 77 cials. The new Advocacy Action Center can be found online at Getting involved with MAA allows industry professionals to play an active role in how laws and regulations that affect the industry and consumers are created and carried out by lobbying and building relationships with policymakers. It only takes a moment to get started, and you do not have to be a member of the MBA to enroll. The larger the group, the louder the voice! If you would like to run an MAA campaign, please contact Peter Shapiro at (202) 557-2933 or e-mail to receive an enrollment campaign kit and learn more about how you can engage your colleagues and employees in MBA’s advocacy programs. Real estate finance industry professionals who wish to join or learn more about MAA can do so at If you have any questions regarding MBA’s advocacy programs, please contact MBA’s Director of Political Affairs Annie Gawkowski at (202) 557-2816 or e-mail


Fowler Williams is chairman of the Mortgage Bankers Association’s Mortgage Action Alliance. He is also president of Atlanta, Ga.-based Crescent Mortgage. He may be reached by phone at (800) 851-0263 or e-mail

n National Mortgage Professional Magazine n DECEMBER 2015

Footnotes 1—On Oct. 15, 2015, the CFPB released a final rule amending Regulation C, 12 C.F.R Part 1003, the implementing regulation of the Home Mortgage Disclosure Act. Published in the Federal Register on Oct. 28, 2015. 2—On Jan. 1, 2019, additional amendments related to electronic data submission and public disclosures become effective Jan. 1, 2019. Also, institutions will report the data collected under the new requirements by March 1, 2019. On Jan. 1, 2020, quarterly reporting begins for large-volume lenders as of the first quarter of 2020. The first data under the new reporting schedule must be reported by May 30, 2020. 3—Beginning in 2020, institutions with a combined total of 60,000 or more loan originations and applications will be required to report HMDA data on a quarterly basis. For the first three quarters of each year, these large-volume institutions must report the required data within 60 calendar days of the relevant quarter’s end. The first submission (for the first quarter of 2020) will be due on May 30, 2020. Fourth quarter data will be submitted with the annual submission, which will continue to be due by March 1 of the following year. 4—FFIEC examination guidance for depository institutions already mandates this practice. 5—May be revised 6—Metropolitan Statistical Area. 7—The terms “closed-end mortgage loan” and “open-end line of credit” are defined as part of the new transactional coverage criteria, which also become effective on Jan. 1, 2018. Covered open-end lines of credit by definition are secured by a dwelling. 8—Op. cit. 3. 9—Not every data point is collected for every application or origination. 10—12 C.F.R. §§ 1026.19(e)(3)(iv), (e)(4). 11—See 12—Home Mortgage Disclosure (Regulation C), Small Entity Compliance Guide, Consumer Financial Protection Bureau, Dec. 2, 2015. 13—Idem, p. 6. 14—See

MBA’s Mortgage Action Alliance

A new electronic submission portal will be introduced soon by the Bureau. There is a Web site landing page for it on the Bureau’s Web site, although it is not yet functional.11 This portal will be the new way in which the HMDA-LAR will be sent to the Bureau. Guidance on how to complete the current HMDA-LAR will be deleted, effective Jan. 1, 2019. New instructions will be integrated into the electronic submission portal beginning in 2019. In addition, public access disclosure for 2017 and beyond will be available at the Bureau’s Web site. Where institutions are required to maintain their modified HMDA-LAR on their premises, the Bureau will require the filers to send consumers and interested others to the Bureau’s own online database. As to the public database itself, the Bureau has not yet announced what information and data sets will be made public from the amended Regulation C filings. Apparently, the Bureau is contemplating a tiered approach to providing public access, such as access to the general public, the press, researchers, academics, consultants, and so forth. Exactly which data sets will be made available to the public and on what basis will soon be the subject of an elicited response from the public. As I mentioned at the outset, the amended Regulation C may be viewed as a new tool in the maintaining of fair lending initiatives. The Bureau’s enforcement actions make it abundantly clear that HMDA data is and will continue to be intrinsic to fair lending compliance. The use of enforcement orders in reviewing HMDA compliance, along with many new reporting obligations, will amplify regulatory risks for HMDA filers. The obtained data can be expected to form the basis for increased legal and regulatory scrutiny with respect to fair lending requirements. Institutions will also need to be prepared to devote additional and supplementary resources to evaluating potential fair lending matters, particularly where they will be reporting data on a quarterly basis. On Dec. 1, 2015, the Bureau issued a guide, entitled Home Mortgage Disclosure (Regulation C) Small Entity Compliance Guide (Guide).12 According to the Guide, its purpose is to provide “an easy-to-use summary of Regulation C, as amended by the 2015 HMDA Rule, and to highlight information that financial institutions and those that work with them might find helpful when implementing the 2015 HMDA Rule.”13 In addition to the Guide, the Bureau has a Web site devoted to HMDA compliance support.14 Although you may want to read the 797-page Rule itself, at this time the Bureau’s Web site contains useful information and documentation on the Home Mortgage Disclosure Act rule (Federal Register); a HMDA Executive Summary (an overview of changes to the HMDA rule issued Oct. 15, 2015); HMDA Key Dates Timeline (an overview of the effective dates for different elements of the rule); a HMDA Compliance Guide (a guide to the new rule which makes the content “more accessible for industry constituents, especially smaller businesses with limited legal and compliance staff”); a template for Reporting “Not Applicable” (a reference tool on when to report data as not applicable); a Summary of Reportable Data (a reference tool for HMDA data required to be collected, recorded, and reported); and, a HMDA Institutional Coverage Chart (entities covered for 2017 and 2018).

Marketing Services Agreements: What’s a Lender to Do?

By H. Burton Embry Much has happened with Marketing Services Agreements (MSAs) over the last couple of months with Wells Fargo Home Mortgage and Prospect Mortgage publicly announcing their exit of MSAs and the CFPB’s issuance of Compliance Bulletin 201505. The announcement and the CFPB’s guidance has shaken a lot of lenders and caused them to re-think their MSA strategy. In one corner is many lenders’ prudential regulator (the CFPB) saying MSAs are problematic, they pose substantial risks to lenders and consumers and lenders should exit them. In the other corner are loan originators saying they need to have MSAs to be competitive and will lose their real estate agent relationships if they don’t keep them. In the middle are real estate agents

telling loan originators how important the MSA relationship is. So what’s a lender to do? Unfortunately, there isn’t a simple answer, but there are a number of things on both sides of the issue to consider in order to make the right business decision, and then … hope for the best. After all, this is ultimately a business decision, not just a legal or compliance decision. The main reason for getting out of MSAs is very clear and simple, the CFPB is more or less saying to do so. The CFPB has said very clearly both publicly and in Compliance Bulletin 2015-05 that MSAs are “problematic” and that MSAs are a bad deal for consumers. Samuel Gifford of the CFPB told a reporter from an industry publication, “We are concerned such agreements can carry legal risks for companies and undermine transparencies for consumers”. This is

on top of the CFPB’s sweeping statements in the Lighthouse Consent Order had the industry wondering if that would be the death knell to MSAs. It is clear that the CFPB simply does not like MSAs, and for many, that is enough of a reason to exit them. Sometimes there are arguments that even when one wins, they lose (kind of like me arguing with my wife; even when I win, I lose). In this day and age, many find it tough to go against a regulator’s guidance and advice, especially when that regulator is the CFPB, even if it isn’t the law. Is fighting with the CFPB something a company wants to do? Could the lender win the battle and ultimately lose the war? How significant is the risk? How deep is your checkbook? There are also several state regulators who are beginning to ask lenders about any MSAs it may have. One state regulator has reportedly said they have

not yet seen a compliant MSA program; however, this regulator has yet to cite anyone for a violation. So why continue offering MSAs? Well, first, MSAs are not per se illegal. RESPA Section 8 (c)(2) still contains language that permits the payment of bona fide compensation for services actually performed. No matter what the CFPB says, RESPA permits MSAs, and some loan originators say they need these in order to get business from the real estate agent (which could be a red flag) and many agents have convinced loan originators to have an MSA or they will not get their business. Another reason is that many lenders of all sizes will continue to offer MSAs. Some small lenders are merely waiting for the larger lenders to exit them, and then plan to swoop in and capture that realm estate agent relationship. Most larger lenders are

sages from the CFPB and other regulators. While the state regulator referenced above has reportedly said they haven’t seen a compliant MSA program yet, this specific state regulator hasn’t cited anyone for a violation. And while the CFPB has clearly indicated it does not like MSAs, lenders who are currently going through or have very recently completed a CFPB examination are not being cited for RESPA violations in their MSA program. Is the examination side of the CFPB not on the same page as the enforcement side of the CFPB? Or are these lenders managing their MSA programs properly and the CFPB is recognizing that? Is there a way to administer a compliant MSA program? If the CFPB is not issuing findings on the MSA

programs it is currently or has very recently examined, then there must be a way to compliantly implement and maintain an MSA program. As you can see, there is no easy answer here. Whatever the lender’s decision is, it clearly has regulatory risk, as well as business and reputational risk. How much risk is one willing to take and how big is the checkbook? How much will it cost just to respond to an action or investigation? What else will the regulator find when they start poking around? Is the company’s board of directors willing to take this risk? Will it agree with the decision to continue offering MSAs when hit with a Consent Order and a fine? How will an encounter like this impact the compa-

ny’s ability to recruit loan originators and other needed talent? How much business will a lender lose if it stops offering MSAs? Most lenders are reportedly exiting MSAs while others are not. The stakes here are high. H. Burton Embry is executive vice president and chief compliance officer with Salt Lake City-based Primary Residential Mortgage Inc. (PRMI). He specializes in mortgage banking compliance, quality assurance and risk management, and has more than 30 years of experience in mortgage banking compliance. He can be reached by e-mail at or by phone at (801) 596-8707, ext. 1000201.

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skeptical of MSAs, but because many small- and mid-sized lenders will continue to offer them, some large lenders may believe they have to continue to offer MSAs to stay competitive. Several small- and mid-sized lenders believe they have little to lose and that they are too small to be on the CFPB’s radar, so exposure is minimal compared to the large lenders. “Even though the CFPB is encouraging ‘whistleblowers,’ many of our clients are staying in the MSA game but entering into fewer arrangements with fewer services in order to minimize their risk and compliance burden,” said Loretta Salzano, a partner at the law firm of Franzen & Salzano. “It makes sense that larger lenders with hundreds of MSAs would exit the market as it is virtually impossible to manage and monitor MSAs all across the country and prove the reasonableness of compensation among them and the performance of services. In light of the CFPB’s recent bulletin and their informal statements, I fear that no matter how good a job a lender does of dotting ‘I’s and crossing ‘T’s, MSAs just might be a ‘no win’ proposition” Still, another reason to keep MSAs is to retain loan originators (which may also be a red flag). Some loan originators may say they will leave a company if MSAs are no longer being offered. No company wants to lose loan originators, especially those who are originating a significant volume of loans. But if the promise of business is dependent on the existence of an MSA, that may be a sign that the MSA is not being used for the proper purpose. Remember, MSAs are about promoting a company, helping to get a brand out in the public domain and in front of prospective homebuyers and borrowers, not for simply putting money in a real estate agent’s pocket or for the promise of their referring a company’s business. Speaking of real estate agents, the CFPB has shown little appetite for holding them accountable for RESPA violations. At the recent MBA Annual Conference, CFPB Director Richard Cordray commented that real estate agents would be held accountable the same as lenders and other settlement service providers. That said, seeing is believing, and until the CFPB has demonstrated that they will hold others accountable, a lender should figure that it will bear the brunt of any violation when it comes to an MSA. Then there is the risk of whistleblower complaints. How are loan originators from companies who have pulled out of MSAs at the urging of the CFPB going to react when they see other companies going in and replacing them? The CFPB actively invites whistleblower complaints and has said they are seeing an increase in the number of whistleblower complaints. There will undoubtedly be a number of whistleblower complaints lodged against companies who continue with MSAs. Lenders are also getting mixed mes-




First … an admission

DECEMBER 2015 n National Mortgage Professional Magazine n


It really galls me to no end that I have to admit that someone had a good idea before me, but it happened. Okay, it happened. George Carlin, back in 1973, came up with his “Seven Words You Can’t Say on Television” routine as part of an album he recorded. This was a pretty original idea at the time, full of interesting social consequences and a direct foray into the world that has given Howard Stern his head. In my training, it has come to my attention that most of you cannot do anything other than what you have been taught. You do exactly what the person in the next office/cubicle/desk does. You do what you were taught by your boss. He taught you what he learned and nothing more. How much time did you ever spend on thinking of new ways to market yourself? Bet you can’t prove that you spent more than zero minutes in thinking of new ways to make an impact into your market. Okay, you think, that’s my job, as in Ralph’s job. He’s supposed to think for me, because I’m a lazy slob who thinks I know the mortgage business, but really all I want to do is take an application from someone who called me on the phone, charge them every last cent I can and collect my check? Do I really have to talk to anyone after I take an application? Do I have to participate in any way with the development of the client? Do I really have to help the client, or is it all about me? Do

I have to think about anything? Oh God! Life is so hard!

Something new Let’s try something, not quite as dra-

gist told me that by actually doing something over a long period of time, over and over and over, we could actually see how beneficial the actions are and how they affect those we interact with.

played the same song. There was never once a deviation from the tune. It was repeated so often; … that he called to ask me if it was the right tune he was hearing or was it just his brain on overdrive. The song went like this (pick your favorite song and just plug in the lyrics): Do you have any clients I can help you with? If you get someone who needs a mortgage, don’t forget me, I give the best service, I have the best rates, and my points and programs are the best! This set of words was repeated so often, my nephew actually started to believe them. But in truth, nobody in the real estate business gives a crap about those words. Nobody! Got it? Nobody! And if you try to bore my busy life with your need to delve into programs that most of you don’t even know how to properly explain, I think I’ll throw up. Just yesterday one of my clients had no idea how to help me with the HARP program. He’s been an LO for two-and-ahalf years.

Everyone else is saying them

matic as Carlin’s routine, but almost, and infinitely more important to your business life. You must never say certain words again when attempting to form a relationship with a referral source. Never say “them,” never, never, never again say the word “them.” Please promise me. Even before you read them, please? When a psycholo-

An actual true story My nephew passed his real estate license test in New Jersey a number of years ago. After he got his license, he was assigned to a cubicle in the real estate office that sponsored him. Then, the parade started. Day after day, the parade would stop at his desk and the band would play and they always

That is also a silly thing to use as an explanation. If you want to separate yourself from those who try to do what you do for a living, be more professional and form long-term relations with referral sources, you need to say different words, play a different tune. Say the following words. Say them like you mean them, just like this: “I am not like any loan officer you have ever met.” I want to help you improve your business and bring value to you. If you say these words and follow them up with real ideas,

then maybe, just maybe you’ll make it in this business. Just maybe!

The five words

The words we live by

Ralph LoVuolo Sr. has more than 50 years in the mortgage Industry, with the last 30 as a coach. He is past president and founder of the New York Association of Mortgage Brokers, and long-time member of NAMB—The Association of Mortgage Professionals. He can be reached by phone at (917) 576-1230 or email

Step Inside Ginnie Mae It’s the Best Time of the Year By Ted W. Tozer One of the things I enjoy about the holiday season is a chance to reflect on the past year. From our mission, to our business partners, to our own employees, I have much to be thankful for. From a mission perspective, Ginnie Mae has the privilege of supporting affordable housing through the mortgage liquidity we make possible. While we don’t touch consumers directly, our guaranty backs more than $1.6 trillion in mortgage-backed securities (MBS) that are essential to helping underserved households, U.S. military veterans, Native Americans and rural communities. During Fiscal Year 2015, we supported almost two million households with mortgage money that came from the issuance of $432 billion in Ginnie Mae guaranteed MBS, amounting to about one-third of the mortgage market. Clearly, there is a need for more affordable housing in our country, and we at Ginnie Mae are fortunate to have the ability to help. Of course, we cannot support those most in need without quality business partners. During the year, there continued to be a strong demand, both foreign and domestic, for investments in U.S. housing finance. This manifested itself in the investor demand for Ginnie Mae MBS, as well as the performance of capable mortgage servicers who administered the pools underlying our 81 MBS. All this activity occurred despite considerable obstacles: regulatory uncertainties, cost pressures, lack of progress on housing finance reform, and lingering effects from the Great Recession. Our business partners, whose efforts have been impressive and heartening, have the deep gratitude of all of us at Ginnie Mae. And that brings me to my appreciation for the Ginnie Mae employees. Our business has a very small staff, 129 professionals, that work with third-party vendors to support government mortgage markets. And as these markets grow, the responsibility placed on each employee increases. To give you context, at Fannie Mae and Freddie Mac, their total mortgage portfolios average about $400 million per employee. At Ginnie Mae, our MBS portfolio averages $13 billion per employee! That’s billion with a B. And that is just one reason why I am particularly thankful for our employees who manage our daily operations, monitor a wide array of risks, and modernize our business for the future. A wonderful mission, terrific business partners, and incredibly impressive employees. During this holiday season, these are the three things that I am thankful for. And I hope you are, too. Happy holidays! Ted W. Tozer is was sworn in as president of Ginnie Mae on Feb. 24, 2010, bringing with him more than 30 years of experience in the mortgage, banking and securities industries. As president of Ginnie Mae, Tozer actively manages Ginnie Mae’s $1.5 trillion portfolio of mortgage-backed securities (MBS) and more than $460 billion in annual issuance.

n National Mortgage Professional Magazine n DECEMBER 2015

What is really wrong with these words? These are the words we live by, right? These are the words that define our very existence, our very soul, aren’t they? These are the words we were taught to sing whenever we have the chance to croon for our clients. Well, you can look this one up: Words have meaning. Words when used in certain ways have meanings far beyond the strict definition found in any dictionary. Words are important and should not be spoken in a cavalier way because they define what we are, how we think, what we do. Words need to be phrased in such a way that when people hear our words, they can define us. Please write this down: It’s not what you say, it’s what people hear you say. If you wrote it down, you’ll be able to absorb it into your very being in a short period of time and then be able to carefully choose what you say from now till the day you pass on. People might not hear you say what you said. Maybe you ought to write that one down too. Why shouldn’t you say these five words? What’s wrong with them? What about them is so bad? For most of you, as life goes on, it seems apparent that you have a problem. You just won’t change what you do. I don’t mean that you can’t, because change is completely under your control. You can change what you think, how you act, what you say, where you go, whom you interact with; what relatives you will or will not spend time with, and how you conduct your business. In almost every way possible, you can change. But you don’t want to and if you don’t want to achieve success, you really are wasting your time reading any more of the ranting of an old soul like me. Why do you waste your time reading all this motivational, organizational crap? So what should you do? You should help your referral source make a better impact into their market. You should love their business. You should respect what they do. You should bring them an idea that will make them be more successful each day. It’s such a simple concept, so different of a philosophy than using the five forbidden words. You need to regularly see your referral sources. At least once every two weeks. If you see them more often, all the better. The philosophy is to help them, not you. And you need to mean it!

Let’s try this! When talking to a referral source never say these words “POINTS, PROGRAMS, RATES, SERVICE and COMPETITION.” Never again should you say them. You must make this statement to yourself over again till you are sick of the routine. In previous writings, I asked if you think you could ever have a conversation for more than an hour with a possible referral source and not use these five forbidden words. Since I haven’t heard from any of you, I assume you are all perfect and never use the five forbidden words. Here are the words and an explanation of them, just in case you question me: l Rates: If I’m an educated referral source, do you really think that I don’t already know that almost all mortgage companies have the same rates? Rates are universal, except in short bursts of time. Every mortgage company has to offer the same rates, within a small bandwidth, or they would be out of business in a week. l Points: The secondary market is the secondary market. Mortgages are sold to the same end buyers. Points are a function of rates. Most people want low closing costs most people want zero points. If you really can’t explain why points are important, your lack of knowledge might be costing your clients tens of thousands of dollars. l Programs: Sure, I know you have the most, the best, the most detailed list of unexplainable nonsensical information that has ever been sent over the airwaves. My programs are better than my competition. Don’t waste your time with the other people who come in here, they don’t know what they are talking about, but my rates, points, programs and service are the best, much better than my competition. l Competition: This is a good one. I’ve always loved how you all trash the competition. I can and will do it better than my competition. My competitors are all just making promises that they really cannot keep. My competition is not as good as me. I’m better than the competition. More nonsense! Here’s what you need to know: You have no competition. There is no one like you. You are unique. You are special. You do things that no one else does quite like you. You need to absorb this concept, let it become part of your being. Understand it in ways that become so ingrained in your being that you’ll really stop trying to convince everyone you meet that you are better than your competition. l Service: I’ve saved the best for last. If you’ve ever heard, ever, in your lack of business marketing life that you offer better service than the “competition” raise your hand. Oops, put your hand down. You look silly. Now maybe you want to raise both your hands if you can truly claim that

you have never said: “I will give you the best service that you’ve ever seen”. Ok, maybe you said it this way: “My service is better than anyone else.”

Dealing With Challenging Co-Workers By Kurt Rasmussen

DECEMBER 2015 n National Mortgage Professional Magazine n


I have worked at more than 10 different organizations during my 25-year career, focusing on the management of small, medium, and large projects and programs. During that time, I have also built and managed successful team and processes. One of the keys to successfully managing and implementing projects and processes is to create an environment where the core and extended team members seamlessly work together to achieve shared objectives. Unfortunately, not all teams run like well-oiled machines. There may be individuals on your team that are combative, self-centered, disorganized or who dislike you as a person. I have experienced myriad situations where a negative relationship with a client, peer, and/or manager threatens to derail the overall team’s objectives. Instead of a collaborative and constructive relationship where objectives are clear, ideas are freely shared, roles and responsibilities are defined, and a positive, productive work environment is created, the opposite occurs. A combative relationship can adversely impacts teamwork, morale and ultimately productivity. How does this happen and how can negative results be avoided? I will articulate a recent scenario I experienced that encompasses many different aspects of a difficult relationship and how you might deal with them. I am currently a management consultant and recently had an assignment where my client manager was the difficult co-worker. This was a serious situation because the client ostensibly hired me as a short-term resource to immediately add value to her existing team and we were struggling to get traction from a relationship perspective. As the beginning of the engagement, I was excited about my new responsibilities. The assignment sounded interesting, but I was unfamiliar with the client. I conducted as much research as

possible about the company and reviewed the statement of work to better understand my role. On day one, I arrived enthused and ready to go. Unfortunately, the problems began immediately. Within the first few weeks at the client site, I began to notice the following issues: l The project was behind schedule l Preparation for my arrival on the project was minimal l Dissemination of detailed objectives for the assignment was negligible l Review of roles and responsibilities did not occur l Feedback from the client was always negative and delivered in an angry, unprofessional manner l Planning exercises to define objectives and success criteria were not conducted On the drive home after my fourth week at the client site, I was miserable and decided to take action. It was time to take a step back, breathe and: l Assess the root causes of issues with the client l Develop a plan to address the issues l Meet with my human resources department to assist with a plan of attack l Execute the plan and assess results I started by documenting the negative behaviors exhibited by the client that were contributing to my negative relationship. Once I identified these negative behaviors, I defined the roots causes and developed an action plan for addressing the issues. The action plan included detailed tasks and target due dates (tantamount to a project plan).(See chart above) For someone who is adverse to confrontation, the face-to-face conversation with my client manager was difficult. I kept it positive, concise, and provided clear and implementable action steps. I stood up for yourself, but keep it professional and fact-based. When the conversation got heated, I paused for a minute, and worked to re-route the conversation in a positive direction. As part of the dis-

cussion, I asked for feedback so that she could highlight areas of improvement that I did not contemplate. After we agreed to an action plan for improving our working relationship, I then implemented the following mechanisms to report progress against the plan: l Created a scorecard and reported progress against the specific list of objectives and associated success criteria. l Plotted the incremental value over time added by my work (processes improved, deliverables created, recommendations implemented). As I implemented the road map, I strove to maximize face time with my client manager and ensured that all interactions were value added. I made sure to prepare in advance, provided recommendations, articulated progress, participated in solving her problems, and requested periodic feedback as I presented my progress reports. This type of negative client relationship may be a six sigma event, but if it happens to you, be proactive in identi-

fying the signs of a difficult situation and use the following tactics to diffuse these situations: l Take a step back and assess the situation l Define the root causes l Conduct analysis that will populate the plan l Develop an action plan or road map for improving the relationship l Meet with a trusted co-worker, who is knowledgeable about the situation, to discuss the plan l Execute the plan l Assess progress against the plan l Schedule touch points with the difficult co-worker to discuss progress against the plan Take ownership for making the relationship successful. It worked for me and I know if can work for you! Kurt Rasmussen is a senior manager at Actualize with more than 18 years of experience in the financial services sector. He may be reached by e-mail at or call (571) 422-6526.

survival of the fittest continued from page 29

In order to maximize BST benefits and ensure that underlying processes and controls are effectively modified and enhanced, formal corrective action and issue escalation protocols must be established. Corrective action facilitates the definition and implementation of appropriate controls and processes to ensure that identified errors, their underlying causes and full population impacts are rectified and resolved timely to prevent reoccurrence. Corrective action also helps categorize identified test errors, risk rank the errors, detect systemic and/or historic error patterns, incorporate root cause analysis, ascertain potential broader population remediation needs (for both the tested and the full population) and create reporting to capture, track and help rectify these errors. In general, two types of errors can occur—systemic errors and isolated errors, defined as follows: l Systemic error: An error where the root cause relates to an underlying system or process issue that consists of the same error across an entire population; and l Isolated error: An error generally confined to a specific process or individual, and having a limited impact.

Vincent Spoto is the founding partner of RRMS Advisors, an advisory and consulting firm specializing in servicer/vendor surveillance, risk management, compliance monitoring and default management. Prior to founding RRMS Advisors in 2008, he worked for notable firms such as JP Morgan Chase, Citigroup and Credit Suisse.

continued from page 69

enough, is take responsibility of the transaction and acknowledge the fact that you are a composer! The home loan buying process, thanks to the Consumer Financial Protection Bureau (CFPB), is now very much like a symphony. I mean, it was always a process that took coordination, but now more than ever, you need a “composer” to take that baton and guide a group of individuals in creating an exciting and special work of art—helping a veteran achieving the American dream of homeownership a reality! Nothing makes my day like a closing, but closing a home loan for a veteran holds a special place in my heart, I hope it does for you too! My next article will be after the holidays, and I would like to take this

opportunity to wish each and every one of you a very Merry Christmas, Happy Hanukkah, Kwanzaa and any other holiday you may celebrate! Remember, if you haven’t already, please take a minute and thank a veteran! They’ve done more for us than we could ever repay! This holiday season, let’s all try to pay it forward to a veteran in the form of handshake, a cup of coffee, a dinner, a small present or just a thank you! Richard M. Bettencourt Jr., CRMS, CMHS of Danvers, Mass.-based Mortgage Network is secretary of NAMB—The Association of Mortgage Professionals. He may be reached by phone at (978) 304-0818 or e-mail

A SEASON OF THANKS By Dave Hershman hanksgiving started our holiday season. It’s the time of year that we are supposed to give thanks. Sure there is a lot more involved. We get together with family and friends and some of us get to watch football, plus, if we are lucky, we get to eat some great meals. But, we should not forget the part about giving thanks. Especially this year. Why? Well, the recent tragedy in Paris tells us just how fragile peace, safety and tranquility can be. Clearly we have our challenges in America. Some of these challenges are economically based and some are socially based. However, in many ways, they pale in comparison to what others face in the world. Yes, our economy is not where we would like it to be, but we have created more than 10 million jobs since the end of the recession and more are on the way. Certainly, we could use many more jobs even if their creation causes the 83 Federal Reserve Board to raise interest rates. The jobs report released the first week in December was very significant in this regard. So what did the jobs numbers tell us? The addition of 211,000 jobs and a steady unemployment rate basically tells the Federal Reserve Board that it is all systems go for a rate increase. It was a strong report, especially considering the fact that the previous month’s data was also revised upwards and the overall labor participation rate increased. The jobs report was significant, not only with regard to convincing the Fed to raise rates, but also to what degree they might raise rates and what their language will be with respect to possible future increases. As always, even if there is a rate increase, it will be the Federal Reserve Board’s words that will be watched as close as their actions. Many are worried about what could happen if interest rates go higher. For those, we would like to offer a little history. From 1956 until 2011, a period of 55 years, rates on 30-year fixed loans never went below five percent. That is almost two generations. The real estate markets did just fine over these decades. Now, we are worried that 30-year fixed rates may rise to 4.25 percent or higher. The cost of money is a bargain today. Judging by the statistics, so is owning a home versus renting. For those of us who are homeowners, we should be thankful. For those who are loan officers or real estate agents, any increase in rates will produce a sense of urgency for those who are on the fences. The fence sitters are always coming late to the game. Homeownership is a long-term experience and not a matter of timing the market. For those of us who aspire to be homeowners, they should be thankful that we live in a land of opportunity. Now, let’s pass that turkey and ham and other delicious Holiday treats!


n National Mortgage Professional Magazine n DECEMBER 2015

operation va sitrep

economic commentary

A Corrective Action Plan (CAP) is a formal document designed to outline actions to resolve identified errors and categorize the root cause of an identified issue in a complete manner. CAPs will include remediation actions which detail the approach to formally address and document the efforts that will be taken to make adversely affected consumers ‘whole,’ and also to correct/modify/enhance internal process and controls as necessary to reduce future errors and instill continu-

ous process improvement regimens as appropriate. As a guide, BST results will identify testing errors, patterns of systemic and/or historical errors and create reporting necessary to capture, track and rectify errors identified and drive process improvements as necessary. Clearly, growth and continued survival in today’s marketplace for 2016 and beyond is contingent upon having a strong and robust internal control infrastructure. Development of a formal MIC function, together with a robust and clearly defined BST program are essential components behind having such a ‘winning’ strategy. As one senior default management executive at a medium sized loan servicing organization in the Midwest clearly indicates, “It is no longer possible to grow and compete in today’s marketplace without having a firm commitment to a strong internal control environment targeted at enhancing processes and protecting consumers from regulatory malpractice. In the long-run, investment in establishing and maintaining a strong internal control environment is a must in order to compete and grow [in today’s marketplace].” Yes, weathering the storm in today’s regulatory focused marketplace is a matter of ‘survival of the fittest,’ with the ‘fittest’ being those firms committed to a growth strategy predicated on a strong internal control environment.


Dave Hershman is a top author in the mortgage industry with seven books published. He is also the founder of the OriginationPro Marketing System, and currently the director of branch support for McLean Mortgage. He may be reached by e-mail at or visit


n a t i o n a l

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p l a c e s

t o

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places to work

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1-866-PRMG-YES (806-776-4937)


Built by originators for originators, PRMG was born from a vision of creating a company with a unique culture focused on the successes of the producer. We understand what it takes to be a successful originator and cultivate new business every day.

Voted the #1 place to work in Metro Detroit, UWM is looking for A players to join our talented team. Our business is driven by our culture, and our people are our greatest asset. If you’re looking for the opportunity of a lifetime, apply to UWM today!

calendar of events N A T I O N A L

JANUARY 2015 Thursday-Friday, January 21-22 California Association of Mortgage Professionals Sales & Marketing 2016: Orange County “Power of the Past, Force of the Future” Hyatt Regency Orange County 11999 Harbor Boulevard Garden Grove, Calif. For information, call (916) 448-8236 or visit Thursday, January 21 Mortgage Bankers Association Mergers and Acquisitions Workshop 2016 Hilton Phoenix International Airport 2435 South 47th Street Phoenix, Ariz. For more information, call (800) 793-6222 or visit

Wednesday, February 10 Texas Mortgage Roundup 2016 Hyatt Regency San Antonio 123 Losoya Street San Antonio, Texas For more information, call (860) 922-3441 visit Tuesday-Friday, February 16-19 MBA's 2016 National Mortgage Servicing Conference & Expo Hyatt Regency Orlando 9801 International Drive Orlando, Fla. For more information, call (800) 793-6222 or visit

MARCH 2016 Thursday, March 3 Florida Association of Mortgage Professionals (FAMP) Broward Chapter 2016 Trade Show Bonaventure Hotel & Conference Center 200 Bonaventure Boulevard Weston, Fla. For more information, call (954) 986-0808 or e-mail

Monday-Tuesday, April 18-19 National Association of Professional Mortgage Women (NAPMW) 2016 Annual Convention The Luxor Resort & Hotel 3900 South Las Vegas Boulevard Las Vegas For more information, call (860) 922-3441 or visit

SEPTEMBER 2016 Wednesday September 14 Texas Mortgage Roundup 2016 DoubleTree by Hilton Dallas Near the Galleria 4099 Valley View Lane Dallas, Texas For more information, call (860) 922-3441 visit

Tuesday-Friday, March 8-11 NAMB East 2016 Westin Hilton Head Island Resort & Spa 2 Grasslawn Avenue Hilton Head, S.C. For more information, call (860) 719-1991 or visit

MAY 2016 Monday-Wednesday, May 16-18 American Land Title Association (ALTA) Federal Conference & Lobby Day Renaissance Downtown 999 9th Street NW Washington, D.C. For more information, call (202) 296-3671 or visit

Friday, September 16 OriginatorConnect 2016 Mohegan Sun 1 Mohegan Sun Boulevard Uncasville, Conn. For more information, call (860) 922-3441 or visit

Sunday-Thursday, March 13-17 2016 Regional Conference of Mortgage Bankers Associations Harrah's Resort Waterfront Conference Center 777 Harrah's Boulevard Atlantic City, N.J. For more information, call (732) 596-7642 or visit Wednesday, March 16 American Land Title Association (ALTA) Social Media Summit JW Marriott Indianapolis 10 South West Street Indianapolis For more information, call (202) 296-3671 or visit Wednesday-Friday, March 16-18 American Land Title Association (ALTA) Business Strategies Conference JW Marriott Indianapolis 10 South West Street Indianapolis For more information, call (202) 296-3671 or visit APRIL 2016 Saturday-Tuesday, April 9-12 NAMB 2016 Legislative & Regulatory Conference Hyatt Place National Mall 400 East Street SW Washington, D.C. For more information, call (860) 719-1991 or visit

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

JUNE 2016 Tuesday, June 21 Great Northwest Mortgage Expo 2016 Embassy Suites Washington Square 9000 SW Washington Square Road Tigard, Ore. For more information, call (860) 922-3441 or visit JULY 2016 Monday-Tuesday, July 11-12 Ultimate Mortgage Expo 2016 Hotel Monteleone 214 Royal Street New Orleans For more information, call (860) 922-3441 or visit AUGUST 2016 Wednesday-Saturday, August 17-20 Florida Association of Mortgage Professionals 2016 Annual Convention Omni Orlando Resort at ChampionsGate 1500 Masters Boulevard ChampionsGate, Fla. For more information, call (850) 942-6411 or visit Thursday-Friday, August 18-19 Louisiana Mortgage Lenders Association 2016 Annual Education Conference New Orleans Riverside Hilton 2 Poydras Street New Orleans, La. For information, call (225) 590-5722 or visit

Saturday-Monday, September 24-26 NAMB National 2016 The Luxor Resort & Hotel 3900 South Las Vegas Boulevard Las Vegas For more information, call (860) 719-1991 or visit OCTOBER 2016 Tuesday-Friday, October 4-7 American Land Title Association (ALTA) 110th Annual Convention Fairmont Scottsdale Princess 7575 East Princess Drive Scottsdale, Ariz. For more information, call (202) 296-3671 or visit Sunday-Wednesday, October 23-26 Mortgage Bankers Association 2016 Annual Convention Hynes Convention Center 900 Boylston Street Boston, Mass. For more information, call (800) 793-6222 or visit NOVEMBER 2016 Wednesday-Thursday, November 16-17 Mortgage Star Conference 2016 Canyons Resort 4000 Canyons Resort Drive Park City, Utah For more information, call (860) 922-3441 or visit Friday, November 18 Utah Association of Mortgage Professionals (UAMP) Expo 2016 Canyons Resort 4000 Canyons Resort Drive Park City, Utah For more information, call (860) 922-3441 or visit


n National Mortgage Professional Magazine n DECEMBER 2015

FEBRUARY 2016 Tuesday, February 9 NAMB Wholesale Summit Hyatt Regency 123 Losoya Street San Antonio, Texas For more information, call (860) 922-3441 or visit


Sunday-Wednesday, January 31-February 3 MBA's 2016 CREF/Multifamily Housing Convention & Expo Hyatt Regency Orlando 9801 International Drive Orlando, Fla. For more information, call (800) 793-6222 or visit





CFPB Audit Preparation and Defense LENDERS COMPLIANCE GROUP 167 West Hudson Street - Suite 200 Long Beach | NY | 11561 | (516) 442-3456

We provide required CFPB manuals and customized policies. Our fees are less than the big national firms that don’t call you back. With us you receive 3 months FREE of Q & A Hot Line support. Available in all 50 states. We have hands-on experience with regulators and audits. No theories here; we were Bankers. If you find yourself in federal court, we can handle that as well. Contact Nelson Locke at (800) 656-4584. Or you may email us at All inquiries will be kept strictly confidential. This is not an offer for legal services, but rather for his expert review and opinion about your particular compliance situation. All fact patterns are different so the results will vary. No guarantees are expressed or implied. Licensed by California and Federal Bar. NMLS 149450.

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.



DECEMBER 2015 n National Mortgage Professional Magazine n

LOWEST-COST STATE MORTGAGE LICENSE BONDS Support NAMB in supporting you! 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.

Certified Military Home Specialist Beverly Ray Frase "Training Boots on the Ground" Since 2009 • Trained 3,000 CMHS course grads • Trained for Depts of HUD, Treasury & more • 20+ years' experience in real estate & finance, military life COMING TO YOUR CITY!


Mortgage Seminars 248-403-8181

86 The Bond Exchange (501) 224-8895


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!

TagQuest 888-717-8980

Low prices and fantastic service. You really can have them both at the same time!

Cost: Only $19.95 per month per physical office location.

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.




The Bond Exchange is a national surety agency specializing in servicing mortgage license bonds for thousands of mortgage professionals across the country.

No contracts so sign up today and give yourself the tools to brand yourself as The FHA Expert in your marketplace.

Close More Loans!

We’ll Get Your Phones Ringing! 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

Real Data. Real Tracking. Real Results!

We handle the entire direct mail campaign process from A-Z closely with you to ensure you recieve a postive return on your

Your Success Is Our #1 Priority! Call Now For FREE Mailers!

1 (888) 277-8816



REMN Wholesale 866-933-6342 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.

coming in january 2016


are you hiring

Interested in joining our Wholesale Division? Send your resume to



Contac t: info@afr

Love your job? Love your company?


We want to hear about it. We're compiling a list of the best mortgage


companies to work for. There will be a total of 200 winners selected on a National and Regional basis.

•Conventional •USDA •Manufac tured Housing •One -Time Close Construc tion •Fred d ie M ac O p en Access an d Fan nie Mae D URP •VA and FHA, FHA 203(k) and 203(h) Rehab loans •Jumbo loans up to $2,000.000

Go to

Lender NMLS:2826 - 9 Sylvan Way, Parsippany - NJ, 07054 - *See website for details: Equal Housing Lender. Equal Opportunity Employer. **No Lender fees by AFR. Third party fees may apply. AB071114

to vote for your company. Please only one submission per person or your

company must be involved in WHOLESALE LENDERS

originating mortgages, be at least two years old with a minimum 15 employees.

5 Park Plaza, 10th Floor Irvine, CA 92614 HomeBridge Wholesale is a national wholesale lender offering Conventional, Government, Jumbo, and Renovation Loans. 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.

Now Hiring Wholesale Sales Managers/Account Executives Nationwide Please send resumes to

NMP Media Corp. 1220 Wantagh Avenue Wantagh, New York 11793-2202 p 516.409.5555 f 516.409.4600 e w

n National Mortgage Professional Magazine n DECEMBER 2015

company may be disqualified. Your

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



DECEMBER 2015 n National Mortgage Professional Magazine n


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