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table o N A T I O N A L

8 The Elite Performer: Map Your Goals! By Andy W. Harris, CRMS

J U N E

2 0 1 3

l

M O R T

V O L U

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A SPECIAL LOOK AT “ARE YOU IN COMPLIANCE?”

The Mortgage Motivator: Five Forbidden Words

Seven Ways to Close Loans Faster and Stay in Compliance By Johnna Leeds ..........................46

By Ralph LoVuolo

Regulations, Breaches and eDiscovery: Drilling Into Compliance Pains By Jim McGann ..................48 Building a Compliance Checklist By Scott K. Stucky ..........50 Compli-Ants Problems By Eric Weinstein ............................51 Compliance Considerations for Managers of Non-Securitized Consumer Assets By James Dooley ....52

24 Lykken on Leadership: Leaders Own the Outcomes ... Leadership and Sales Support By David Lykken

Changing the Paradigm From “Regulatory Burden” to “Competitive Advantage” By Mark H. Fleming, CMB ........54 Compliance Best Practices: Using Third-Party Providers Can be an Example By Kathalin Carvalho ............56

FEATURES HARP: Past, Present and Future By K. Justin Restaino ..........8 Consumer Complaint Policies and the CFPB By Joy K. Gilpin ....................................................................16 Summertime Tips to Keep Your Pipeline Red Hot ........18 The NAMB Perspective: June 2013................................20 For Managers Only: Managing for the Future: Coaching—Is It Call Reluctance? By Dave Hershman ..........30

28 Passing the Two-Minute Prospect Value Assessment By Eric Petersen

44 Eight Characteristics to Look for in an Effective Learning Management System By Harlow Spaan

NMP’s Mortgage Professional of the Month: Corey Dubnoff, President of American Financial Resources Inc. (AFR) By David J. Coster ..............34

V I S I T Company

Web Site

O U R

A Page

AllRegs.............................................................. www.allregs.com ..........................................................20 American Financial Resources Inc. ...................... www.afrwholesale.com ............................Inside Back Cover Appraisal Nation, LLC ........................................ www.appraisal-nation.com ..............................................3 Brokers Compliance Group.................................. www.brokerscompliancegroup.com ..................................21 Calyx Software .................................................. www.calyxsoftware.com ................................................39 CBC National Bank ............................................ www.cbconnex.com ......................................................30 Clix Inc. ............................................................ www.clixmg.com ..........................................................54 Credit Plus, Inc. ................................................ www.creditplus.com/undisclosed-debt-monitoring ............23 Data Facts ........................................................ www.datafacts.com ........................................................57 Document Systems, Inc./DocMagic ...................... www.docmagic.com ........................................................9 FAMP ................................................................ www.myfamp.org ..........................................................15 FindMortgageJobs.com ...................................... www.findmortgagejobs.com ..........................................43 First Guaranty Mortgage Corp. ............................ www.fgmcwholesale.com ..............................................37 GSF Mortgage Corp. ............................................ www.gsfsales.com ..........................................................7 Hometown Lenders ............................................ www.whotookmybacon.com ..........................................13 HomeBridge ...................................................... www.homebridgewholesale.com ....................................19 Maverick Funding Corp....................................... www.maverickwholesale.com ........................................27 Maximum Acceleration Coaching ........................ www.maccelcoach.com ..................................................25 MBA-NJ/NJAMB .................................................. www.mbanj.com ..........................................................63 Menlo Park Funding .......................................... www.mpfunding.com ....................................................55


f contents

T G A G E

M E

P R O F E S S I O N A L

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N U M B E R

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Regulatory Updates: June 2013 By Laurie Spira ................36 FHA Next in Line for Bailout? By Robert Ottone ..................36 USA Cares Mortgage Heroes: Elisabeth Everett of W.J. Bradley Mortgage By Joann Muncey ......................40 Tune Up to Capitalize in a Rising Rate Environment By Sharon Bitz ......................................................................42 Closing Protection Letters Are NOT Insurance Against Mortgage Fraud By Andrew Liput ..........................45 The Challenges of Internet Leads By Josh Conklin ............58 USDA Releases Notice to Standardize Income Calculation By Rich Obermeier ..............................................59 NAMB Sales & Marketing Tips for Today’s Mortgage Professional: What Will Your Legacy Be?

By Fred Arnold ......................................................................................60

Secrets to More Closings: Stage Six of the Sales Funnel (Part III) By Jean LeBlanc ..............................61 ValueNation: Technology to Manage Today and Prepare for Tomorrow By David Rasmussen ................61 Bonded With NAMB: Consider the Source By Mason Grashot, CPA..........................................................62

NMP News Flash: June 2013 ........................................12 New to Market................................................................14 Heard on the Street ......................................................26 NMP Resource Registry ................................................64 NMP Calendar of Events ................................................68

Company

Web Site

Page

Mortgage Mapp, Inc. .......................................... www.mortgagemapp.com/MO ........................................29 NAPMW ............................................................ www.napmw.org ..........................................................38 National Credit Fixers ........................................ www.nationalcreditfixers.com ........................................46 New Penn Financial, LLC .................................... www.gonewpenn.com ....................................................47 OnlineEd, Inc..................................................... www.inlineed.com ........................................................52 PB Financial Group Corp..................................... www.pbfinancialgrp.com ..............................................43 Quality Mortgage Services .................................. www.qcmortgage.com ....................................................24 REMN (Real Estate Mortgage Network) ................ www.remnwholesale.com ................................................5 Ridgewood Savings Bank .................................... www.ridgewoodbank.com ..............................................49 Rushmore Loan Management Services LLC............ www.rushmorehl.com ....................................................17 Salomon James Capital Group, ULP...................... www.salomonjamesfinance.com ....................................11 Secure Settlements Inc. ...................................... www.securesettlements.com ............................................1 Streetlinks LLC .................................................. www.streetlinks.com ..............................Inside Front Cover TagQuest .......................................................... www.tagquest.com ........................................................33 The Bond Exchange............................................ www.thebondexchange.com ..........................................50 Titan List & Mailing Services, Inc. ........................ www.titanlists.com ........................................................31 United Wholesale Mortgage ................................ www.uwm.com ................................................Back Cover Veros ................................................................ www.veros.com ............................................................22 WCS Lending...................................................... www.wcswholesale.com ................................................41

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D V E R T I S E R S

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COLUMNS

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JUNE 2013 Volume 5 • Number 6

FROM THE 1220 Wantagh Avenue • Wantagh, NY 11793-2202 Phone: (516) 409-5555 • Fax: (516) 409-4600 Web site: NationalMortgageProfessional.com STAFF Eric C. Peck Editor-in-Chief (516) 409-5555, ext. 312 ericp@nmpmediacorp.com Joel M. Berman Publisher - CEO (516) 409-5555, ext. 310 joel@nmpmediacorp.com David J. Coster Senior Editor davidc@nmpmediacorp.com Robert Peter Ottone Assistant Editor (516) 409-5555, ext. 314 robertpo@nmpmediacorp.com Joey Arendt Art Director joeya@nmpmediacorp.com Jon Blake Advertising Coordinator (516) 409-5555, ext. 301 jonb@nmpmediacorp.com Beverly Koondel National Account Executive (516) 409-5555, ext. 316 beverlyk@nmpmediacorp.com

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Scott Koondel Operations Manager (516) 409-5555, ext. 324 scottk@nmpmediacorp.com ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact National Account Executive Beverly Koondel at (516) 409-5555, ext. 316 or e-mail beverlyk@nmpmediacorp.com. ARTICLE SUBMISSIONS/PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck at (516) 409-5555, ext. 312 or email ericp@nmpmediacorp.com. The deadline for submissions is the first of the month prior to the target issue. SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail orders@nmpmediacorp.com or visit www.nationalmortgageprofessional.com. Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600. Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the authors alone and do not imply the opinion or endorsement of NMP Media Corp., or the officers or members of National Association of Mortgage Brokers and its State Affiliates (NAMB), National Association of Professional Mortgage Women (NAPMW), National 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.

National Mortgage Professional Magazine is published monthly by NMP Media Corp. Copyright © 2013 NMP Media Corp.

publisher’s desk

The Catch 22 of compliance (take two) Last month, I discussed how I attended a recent Mortgage Bankers Association (MBA) trade show and the hot button topic of the day was compliance. Well, what do you know … this month, we take a detailed look at the world of compliance as we focus on the subject of “Are You in Compliance?” The introduction of the Dodd-Frank Act has given birth to an entire industry of compliance professionals whose sole job is to keep the mortgage professionals of today on top of the changes which govern their industry. These compliance professionals hold volumes of knowledge which guide the marketplace and keep the industry of today on the right path to legally assisting today’s consumer to close a home loan. These compliance professionals are deemed guardian angels by many because without their existence, a firm may deviate from abiding by today’s industry standards and they will find themselves either heavily fined or out of business entirely. Today, compliance now is cemented into sales, and one cannot function without the other. This issue will highlight how the two (compliance and sales) work in conjunction to create large and stable mortgage industry of today. Johnna Leeds of Data Facts kicks things off on page 46 in her article which provides seven tips on how to remain in compliance in today’s marketplace. On page 48, Jim McGann of Index Engines takes a closer look at many of the root issues and causes of compliance breaches. Scott K. Stucky of DocuTech Corporation on page 50 provides an easy-to-use checklist of things to look for when building your compliance plan. On page 51, myrmecologist mortgage professional and Eric Weinstein takes a satirical look at the issue in his piece, “Compli-Ants Problems.” James Dooley of NewOak Capital takes a look at things management must know and be wary of when implementing a compliance plan in his article on page 53. Mark H. Fleming, CMB of Actualize Consulting on page 54 shares the three lessons learned from compliance in 2013 in his article, and wrapping up our section this month on page 56 is an article from Kathalin Carvalho from ProVest discussing the development of a successful corporate compliance program.

Weighing the costs If you have not already made compliance a high priority in your organization, now is the time. In order to validate my previous statement, one must weigh the costs of non-compliance versus compliance. Say you fail to comply. In doing so, you leave yourself open to scrutiny. Scrutiny from your industry peers who, by word of mouth, may network with others and let them know that you do not play by the same rules everyone else is mandated to play by. Your reputation will suffer as your networking partners will dry up and no one will want to do business with you. Consumers may too get wind of your non-complaint practices. Word of mouth, via the keyboard and other social media outlets, can tarnish one’s business reputation as well. How are you going to do business if no one wants to do business with you? Finally, you will be scrutinized and fined by those in charge of governing the industry, those who set the rules … the regulators. These fines are not slaps on the wrist either as evidenced by the rulings handed down in our judicial system on an almost daily basis. Now, with these three points of contention serving as my basis as to why one should be compliant in today’s marketplace, is there any doubt? Be in compliance or get out. No matter how successful you may think you are, failure to comply may cost you everything in the end.

NMP’s Mortgage Professional of the Month This month, we had a chance to chat with Corey Dubnoff, president of American Financial Resources Inc. (AFR). Corey started AFR in 1997, and has built the firm from the ground up. Corey treats his customers as family and treats them as such, with trust and honesty, a business model that has seen AFR excel in today’s marketplace. See page 34 for David J. Coster’s profile on Corey Dubnoff and AFR. I feel this issue is as vital an issue that we have ever put out. The bottom line is comply or get out. You want to stay in business and thrive and make a living in this profession, then get in compliance. I cannot state it any more clear than that. Those who do not follow that, well you are risking a lot … your livelihood, your reputation and in more extreme cases, your freedom as those who play the dangerous game of non-compliance could wind up in behind bars. The choice is yours … Sincerely,

Joel M. Berman, Publisher-CEO NMP Media Corp. joel@nmpmediacorp.com


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


NAMB—The Association of Mortgage Professionals

National Association of Professional Mortgage Women

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

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

NAMB 2012-2013 Board of Directors

2013-2014 NAPMW National Board of Directors and Administration

OFFICERS Donald J. Frommeyer, CRMS—President Amtrust Mortgage Funding Inc. 200 Medical Drive, Suite D l Carmel, IN 46032 (317) 575-4355 l dfrommeyer@amtrust.net

President Jill Kinsman (206) 344-7827 president@napmw.org

John Councilman, CMC, CRMS—Vice President AMC Mortgage Corporation 11920 Fairway Lakes Drive, Suite 2 l Fort Myers, FL 33913 (239) 267-2400 l jlc@amcmortgage.com

President-Elect Christine Pollard (607) 226-1046 cpollard1046@gmail.com

Fred Arnold, CMC—Treasurer American Family Funding 24961 The Old Road, Suite #101 l Stevenson Ranch, CA 91381 (661) 284-1150 l fred.arnold@affloans.com Kay A. Cleland, CMC, CRMS—Secretary KC Mortgage LLC 200 South Wilcox Street #224 l Castle Rock, CO 80104 (720) 810-4917 l kay@kcmortgagecolorado.com Jim Pair, CMC—Immediate Past President Mortgage America Corpus Christi Inc. 22800 Bulverde Road, Apt. 1402 l San Antonio, TX 78261 (361) 774-7314 l E-mail: jlpair@aol.com

DIRECTORS

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Rocke Andrews, CMC, CRMS—Director Lending Arizona LLC 1996 North Kolb l Tucson, AZ 85715 (520) 886-7283 l randrews@lendingarizona.net Rick Bettencourt—Director Mortgage Network 300 Rosewood Drive l Danvers, MA 01923 (978) 777-7500 l rbettencourt@mortgagenetwork.com Donald E. Fader, CRMS—Director SMC Home Finance PO Box 1376 l Kinston, NC 28503-1376 (252) 523-5800 l dfader@smchf.com Andy W. Harris, CRMS—Director Vantage Mortgage Group Inc 15962 SW Boones Ferry Road, Ste. 100 l Lake Oswego, OR 97035 (503) 496-0431, ext. 302 l aharris@vantagemortgagegroup.com Olga Kucerak, CRMS—Director Crown Lending 328 West Mistletoe l San Antonio, TX 78212 (210) 828-3384 l olga@crownlending.com Linda McCoy—Director Mortgage Team 1 Inc. 6336 Piccadilly Square Drive l Mobile, AL 36609 (251) 650-0805 l linda@mortgageteam1.com Dick Morin—Director Consumers First Mortgage P.O. Box 918 l Kennebunk, ME 04043 (207) 985-2895 l dick@consumers1stmortgage.com Valerie Saunders—Director RE Financial Services 13033 West Lindburgh Avenue l Tampa, FL 33626 (866) 992-0785 l valsaun@gmail.com John Stevens—Director Bank of England d/b/a ENG Lending 11650 South State Street, Ste. 350 l Draper UT 84020 (801) 427-7111 l jstevens@englending.com

Vice President (Western Region) Anna Mackovska (323) 331-2222 anna.napmw@gmail.com Secretary Cynthia Nutter (360) 449-6408 cynthia.nutter@fnf.com

Vice President (Central Region) Kelly Hendricks Treasurer (314) 398-6840 Jeanne Evans, CME (918) 431-0155 khendricks@fsbfinancial.com drmjevans@att.net Vice President (Eastern Region) Parliamentarian Kimberly Rozell, CME Dawn Adams, GML, CMI (607) 229-5008 kimrozellnapmw@gmail.com (607) 737-2584 dawnadams@elmirasavingsbank.com Vice President (Northwestern Administrator Region) Ken Perry, CMI, CME Hulene Works (800) 827-3034 (360) 936-3010 hulene01@verizon.net kenapmw@gmail.com

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: www.ncrainc.org

2013 Board of Directors & Staff Daphne Large President (901) 259-5105 daphnel@datafacts.com Maureen Devine Vice President (413) 736-4511 mdevine@strategicinfo.com Donald J. Unger Ex-Officio (303) 670-7993, ext. 222 don@advcredit.com Mike Brown Treasurer (800) 925-6691, ext. 4350 mike.brown@ncogroup.com Nancy Fedich Director–Chair Legal Committee (908) 813-8555, ext. 3010 nancy@cisinfo.net William Bower Director–Chair Tenant Screening Committee (800) 288-4757 wbower@continfo.com Tom Conwell Director–Liaison Legislative Committee (800) 445-4922, ext. 1010 tconwell@credittechnologies.com

Judy Ryan Director–Chair Strategic Alliance Partnership Committee (800) 929-3400, ext. 201 jryan@kroll.com Renee Erickson Director–Chair New Membership Committee (866) 932-2715 renee.erickson@acranet.com Sharon Bieszk Director (262) 542-1700 sbieszk@wititle.com Mary Campbell Director (701) 239-9977 mary@advantagecreditbureau.com Terry Clemans Executive Director (630) 539-1525 tclemans@ncrainc.org Jan Gerber Office Manager/Member Services (630) 539-1525 jgerber@ncrainc.org


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HARP: Past, Present and Future By K. Justin Restaino

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Anyone in the mortgage industry–unless they have been living under a rock for the past seven years–knows the housing market bubble began to burst in 2006, causing home values to plummet and suddenly erased millions of dollars in equity that Americans had in their homes. Homeowners sat helpless as they watched the value of their homes drop below the balance of their mortgage. A time of profitable real estate transactions and rising equity stakes suddenly came to a screeching halt. Rates went up, homeowners started to go delinquent, and foreclosures were on the fast track. When the Home Affordable Refinance Program (HARP) fell short of its goals, HARP 2.0 was introduced to fix the parts of HARP that were still falling short, leaving far too many homeowners still under water. The governments upgrade to HARP 2.0 did away with this cap with the final goal of enabling more homeowners, even some of the most seriously upside down on their loans, to refinance. HARP 2.0 also worked on other sectors of the program. They have removed the LTV cap entirely and the “reps and warrants” were adjusted so lenders are not being held liable for following the rules of the program. One of the biggest adjustments is the reduced loan level price adjustments. These lower price adjustments allowed borrowers to get the current market interest rates. The goal is to also encourage these borrowers to take a shorter term so they build the equity in their home faster and pay less interest over the life of the loan. More than one million people have already taken advantage of the new HARP 2.0. You can certainly say that the creation of HARP 2.0, when compared to the original HARP, has opened the door for a majority of underwater homeowners to refinance and put their finances in a better situation. The continued evolution of HARP has had positive results. It took the original HARP three years to reach one million households, where HARP 2.0 did that in just eight months. With each change in the act, we have seen a positive result. The looser restrictions help to aide in this fury of eligible borrowers. On Feb. 7, 2013, HARP 3.0 was introduced into Congress. This is known as the Responsible Homeowner Refinancing Act of 2013. This bill is proposed to eliminate many closing costs, reduce upfront fees, and make it easier for homeowners to change servicers. The Responsible Homeowner Refinancing Act would also remove income and employment verifications from the approval process. They are also trying to include homeowners that are not currently serviced by Fannie Mae and Freddie Mac. They are estimating that the program would save borrowers on average of $250 a month in mortgage payments. The bill, though just submitted, has gained a lot of support including big real estate trade groups, the Mortgage Bankers Association (MBA), the National Association of Home Builders (NAHB), NAMB—The Association of Mortgage Professionals, the National Association of Realtors (NAR), the National Association of Real Estate Brokers, and the Center for Responsible Lending (CRL). What does this mean for the future? The Responsible Homeowner Refinancing Act of 2013, also known has HARP 3.0, has yet to pass, and will likely encounter many changes. There is a possibility that the bill could take place in 2013, 2014 the latest. Hopefully, the third time is the charm for millions more of homeowners to refinance their homes and take full advantage of a lower rate and a sizeable monthly savings. K. Justin Restaino is vice president of Titan List & Mailing Services Inc. For more than 13 years, he has led Titan’s Mortgage Division, helping lenders of all capacities grow their businesses utilizing targeted direct mail. With a specialized focus in refinance and purchase markets, Restaino has the insight for proper data and mail application for success. He may be reached by phone at (800) 544-8060, ext. 204 or e-mail justin@titanlists.com.

Sponsored Editorial

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elite performer Map Your Goals! By Andy W. Harris, CRMS

L

ast month, we talked about setting goals and the importance of having vision and self-motivation. This month is all about mapping your goals and actually laying out the visual plan. Let’s face it, the year is nearly half over, and before we know it, we’ll be facing 2014. How has your year shaped up so far? Are you where you want to be in growth in comparison to last year? Have you adapted to the purchase market and planned accordingly? Setting goals is vital for your business, but you must also map out what it will take to hit these goals specifically. Your vision will create the goal and your self-motivation will help you reach it. First, visualize the specific goal (not necessarily an easy one) and write it down on a piece of paper. Use pictures if you’d like also. Next, draw a windy road the length of the page down from the goal and at the bottom of the page write “Start.” As with anything of value, there are steps to take in order for achievement. Take time to think about what steps and actions must be taken daily and weekly in order to meet your final destination and mark those on the road to success in order toward your final goal.

“Don’t let life change your goals, because achieving your goals can change your life.” —Unknown

You can create these maps for one goal or several different goals. Keep your goal maps at your desk for reference at all times and carry a section for notes. Once you reach each milestone, make note of it until you meet that final destination. Track your progress and if you hit some speed bumps along the way or take unexpected detours that did not work out, just remember that the most important part is getting back on the road and stay on track for success. When you have finally met that goal, it’s time to celebrate. Don’t get too comfortable though, because it’s time now for a new goal and a new map. Never stop dreaming! Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and 20102011 president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431 or e-mail aharris@vantagemortgagegroup.com or visit VantageMortgageGroup.com.


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The Mortgage Motivator: Five Forbidden Words By Ralph LoVuolo

An admission

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I

t 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 cannot 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 us the likes of Howard Stern. 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 or desk does. You do what you were taught by your boss and 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 am 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?

Something new Let’s try something, not quite as dramatic 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 again … please promise me. Even before you read them, please? When a psychologist told me that by actually doing something over a long period of time, repeatedly, we could actually see how beneficial the actions are and how they impact those we interact with.

An actual true story My nephew passed his real estate license test in New Jersey a couple 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 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 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.”


Oh God, please mute the sound, my brain is fried. Stop please! For most of you, nay, the greater majority of you, probably 90 percent of you, as life goes on day-to-day and week-to-week and month-to-month, it seems apparent that you have a problem. Same-old, same-old, yada-yadayada. You just won’t change what you do. You just won’t. 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, 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. It isn’t even funny; no entertainment value, so why bother? For the life of me, if I didn’t really think this stuff was valuable to most of you I would just fold my own tent and slink away.

most of you don’t even know how to properly explain, I think I’ll throw up.

ly stop trying to convince everyone you meet that you are better than your competition.

It is staring at you. There is a laser pointed at you. Can’t you see it? Alright, I’m done for now.

Competition Oh! This is a good one. I’ve always loved how you all trash the competition. I can/will do it better than my competition. My competitors are all just making promises that they really can’t keep. My competition is not as good as me. I’m better than the competition. 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 real-

Service

The words we live by

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.” Okay, maybe you said it this way: “My service is better than anyone else. Give it up, will you. Please? Can’t you now see that this is the most overused promise that any of you use? Can’t you see it?

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 continued on page 32

The five words

Rates

Points The secondary market is the secondary market. Loans are sold to the same end buyers. Points are a function of rates. Since 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.

Programs Sure, I know you have the most, the best, the most detailed list of unexplainable nonsensical crap that has ever been sent out over the airwaves. Nobody gives a crap. Nobody! Got it? And if you try to bore my busy life with your need to delve into programs that

n National Mortgage Professional Magazine n JUNE 2013

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.

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Let’s try this! Never say POINTS, PROGRAMS, RATES, SERVICE and COMPETITION. Never again will I say them. You must make this statement to yourself over again until 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.


EWSFLASH l JUNE 2013 l NMP NEWSFLASH l JUNE 2013 l NMP NEWSFLASH l NMP’s “40 Under 40” Honoree Mat Ishbia Named CEO of USFS

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United Shore Financial Services (USFS) has announced that Mat Ishbia will be appointed to the position of chief executive officer for the company. Ishbia currently serves as both president of USFS and also its successful wholesale operation, United Wholesale Mortgage (UWM), which under his leadership has now become the fourth largest wholesale mortgage lender in the country. “We have put in place strategic plans and the necessary infrastructure to expand at a healthy, controlled rate due to our recent tremendous success,” said Mat Ishbia, current president of USFS and UWM. “I look forward to assuming the role of CEO at United Shore Financial Services and continuing to grow the company’s wholesale and retail residential lending channels.” Notable is that under Ishbia’s guidance, UWM has grown exponentially since he started—from only five percent of total company production to over ninety percent. Recently, Ishbia was named as one of the 40 Most Influential Mortgage Professionals Under 40 by National Mortgage Professional Magazine, and was also named a Crain’s Detroit Business 40 under 40. His vision to establish a unique business model that is intensely focused on next-level client service is, among other things, what has largely attributed to UWM’s success. “USFS is pleased to announce Mat as our new CEO; he has demonstrated his leadership by far surpassing industry benchmarks and setting unprecedented growth rates. His business acumen, proven leadership skills and sterling reputation are unrivaled,” said David Hall, president of USFS’ retail arm, Shore Mortgage. Kip Kirkpatrick, USFS’ present CEO, will make a planned transition from running the day-to-day operations of the business to holding a seat on the company’s advisory board. “Since joining USFS as CEO in 2011, Kip has supported our growth with

unwavering passion and commitment, laying the foundation for continued success,” said Jeff Ishbia, USFS founder and board chair. “We look forward to working with him as a trusted, highly experienced advisor to assist in strategically growing the business.” Earlier this year, USFS brought its more than 1,200 employees together under one roof at its new state-of-the-art corporate headquarters located at 1414 Maple Road in Troy, Mich. The move consolidated all of USFS’ team members from four locations in Birmingham, Mich. and Troy, Mich. into a single location on three floors with more than 140,000 square feet of new space. Just two weeks ago, Michigan Gov. Rick Snyder visited this new headquarters to spotlight USFS’s contributions to the community and its plans to hire 600 new employees in 2013.

DocMagic Hosts 2,000-Plus for Dodd-Frank Act Webinar DocMagic Inc. has announced that its Dodd-Frank Implementation Roadmap Webinar attracted a capacity crowd, with more than 2,000 people requesting a spot at the virtual table, making it the most popular online event the company has presented this year. The program, which aired May 15, was the first in a series that the company is offering to the industry and was designed to help those who may be subject to the final Dodd-Frank Rules jumpstart implementation of the Rules. Other webinars in the series include the Ability-toPay/Qualified Mortgage, Loan Officer Compensation and HOEPA. “The Compliance Edge in-house compliance team is proud to sponsor this Dodd-Frank Webinar series. The high turnout for our Kick-Off webinar demonstrated that compliance with the Dodd-Frank Rules is at the forefront of everyone’s mind,” said Melanie Feliciano, DocMagic’s chief legal officer

and co-host for the event. “In fact, based on polling taken during the webinar, it is clear that many in our industry, at this point in time, do not feel sufficiently prepared to comply with the Dodd-Frank Rules. Industry participants are navigating a very complex compliance landscape right now, and they need tips and guides as well as dependable tools and resources they can use to mitigate noncompliance risks with the Dodd-Frank Rules.” “As a business partner to lenders, brokers, and other industry participants, DocMagic has a unique opportunity to see organizations in action, implementing compliance strategies that really work,” said Laurie Spira, DocMagic’s chief compliance officer and co-host of the event. “Our Webinar series gives us a chance to showcase best practices and share them with the mortgage lending community.” Feliciano and Spira were joined on the program by Steve Rattray, from Wells Fargo, and Sue Baker from D+H Mortgagebot. This variety of perspectives provided attendees with a comprehensive 360-degree approach to understanding and implementing the latest Dodd-Frank Rules.

WCS Lending: Misconceptions Remain About USDA Mortgages

The majority of loan officers and borrowers are operating under misconceptions about USDA mortgages, according to WCS Lending. Marla Grassgreen, director and rural housing program manager for WCS Lending, explains that USDA mortgages, which are guaranteed by the USDA (United States Department of Agriculture) for up to 90 percent of their total value, are commonly thought to be limited to rural properties or low income borrowers. In actuality, homes in many suburban neighborhoods are eligible for USDA mortgages, and household

income for applicants for USDA mortgages can reach up to $75,000 for a single person, and over $98,000 for a household of five or more, depending on the property’s location. Plus, USDA mortgages are the only mainstream, first trust deed mortgages that permit borrowers to finance 102 percent of the appraised value of a home, even if it is greater than the purchase price. This allows for borrowers to finance closing costs, in addition to a two percent guarantee fee. “There are good, qualified borrowers who wouldn’t qualify for a Fannie Mae or Freddie Mac mortgage because of the income, credit or down payment requirements of those programs. Were it not for USDA mortgages, these people would have to remain renters and miss out on the benefits of home ownership when in reality, they can get into a home with no down payment,” said Grassgreen. “The issue is, there are many misconceptions about USDA loans and few lenders who understand them, so many borrowers are being told they don’t qualify for a mortgage, when they actually do.” USDA loans offer 102 percent financing, competitive rates, and a common sense underwriting approach, explains Grassgreen. The U.S. Department of Agriculture has allotted $24 billion for mortgages throughout 2013, and approximately 90 percent of USDA mortgages are for home purchases. North Carolina is the largest producer of USDA loans, followed in order by Texas, California, Florida and Michigan. Subject properties must be located in eligible rural areas, cities and towns with populations less than 20,000. “One of the common misunderstandings about USDA loans is that they are limited to very low-priced homes in small rural areas,” said Grassgreen. “In reality, our average loan amount is $140,000 and we are making loans all across the country, including suburban towns that are anything but rural. In fact, in some states, the vast majority of the state is eligible for USDA loans.”

continued on page 16


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StreetLinks Lender Solutions Eyeing August for New AppraiserPlus Offering

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StreetLinks Lender Solutions has announced the August 2013 launch of its AppraiserPlus program. AppraiserPlus enhances the professional partnership between StreetLinks and appraisers by removing the traditional hurdles of micromanagement and post-completion appraiser payment cycles. StreetLinks’ lender partners will continue to benefit from exemplary quality and service levels, with the assurance that they will never be responsible for an AMC’s failure to pay the appraiser. “I have said many times that we want to make a positive impact on our industry and to continuously make it better than it was when we entered. AppraiserPlus is consistent with that goal by providing measurable benefits to appraisers and lenders through real partnerships – not traditional vendor micromanagement,” said StreetLinks President Tom Hurst. “This program allows appraisers to focus on running their businesses and brings back the days of ‘COD’ style payment. This announcement is a year in the making and as an original founder of StreetLinks, this is the most exciting announcement of my career.” AppraiserPlus will limit or remove calls, text messages and emails to participating appraisers during the appraisal fulfillment process, thus allowing appraisers to spend their time inspecting properties, compiling data and writing appraisal reports. Appraisers will have the opportunity to remove nearly all follow-up questions, revisions and stipulations by completing a StreetLinks QX review prior to report delivery. Additionally, AppraiserPlus will generate ACH payments to appraisers the same day the property is inspected. Appraisers accepted into the program agree to consistent and fair service metrics and quality control requirements. Hurst noted that this will also ensure lenders that the best, most qualified appraiser will be handling each report.

Veros Launches New Home Price Index for Market Analysis Veros Real Estate Solutions has announced it is making its proprietary home price index, VeroHPI, available for commercial use for the first time. Now lenders, secondary marketers, servicers and analysts will have direct access to information previously available only in Veros products. This information includes sophisticated analytics with a repeat sales index, which immediately improves decision-making regarding residential property price trends in markets across the country. VeroHPI is constructed using a methodology that is widely accepted as one of the most accurate ways to determine residential real estate price changes. These models were created nearly 15 years ago at Veros, and today they are among the core methodologies used to fuel the VeroVALUE automated valuation model (AVM), with its documented industry-leading accuracy. The index data provides robust trending logic, offers national coverage and is available at the CBSA (county-based statistical area) or FIPS (Federal Information Processing Standard) levels. “This data has never been made available for use outside of Veros’ own analytic tools and solutions,” said Eric P. Fox, vice president of statistical modeling and economics for Veros. “In addition to the repeat sales models, our HPI is fueled by ‘purchase only’ transactions. This filter offers yet another measure to ensure accuracy and clarity that can be lost if other sources of data, such as refinance appraisals, are used.” Veros’ repeat sales methodology compares two or more sales prices of the same property over a lengthy period of time to ensure that the price changes measured are as accurate as possible. Indices that simply fit a model to sales prices of a large number of sales prices over time are open to errors during periods of market

shift–such as when more lower priced entry-level homes are being sold–giving the impression, for example, that a market is depreciating when it may be flat. “Simplistic methodologies are not good enough for today’s more complex market,” said Fox. “For a number of years we have received requests for these highly accurate indices and we’re pleased to be able to make the tool available to the industry.” The VeroHPI data has powered the company’s proprietary analytics with extraordinary results since the company’s inception. VeroVALUE, a prime example, is consistently one of the nation’s top performing AVMs, as independently verified by multiple thirdparty testing entities as well as by large national lenders who perform recurring blind testing with the company on a routine basis.

Guaranteed Mortgage Quote Launched to Replace Pre-Approvals With Mortgage Closing Guarantee Guaranteed Mortgage Quote LLC has developed a new mortgage application processing system that includes a guaranteed closing provision for borrowers, and has been granted U.S. Patent #7,788,148. The patent covers the business method allowing mortgage lenders to offer borrowers a written guarantee that their loan will close under the originally disclosed terms. And, if that turns out not to be the case, the borrower is eligible to receive a Guaranteed Mortgage Quote payment. This payment may be used to reduce the closing costs for a loan the borrower ultimately qualifies for, or the borrower can elect to receive a guarantee payment check and walk away from the deal. Borrowers must verify and maintain all their application information through the time of closing in order to qualify for the guarantee. “Even after all of the federal and

state regulations designed to address the country’s mortgage-induced financial crisis, the mortgage industry still has one dirty big secret,” said Alan Bercovitz, founder of The Guaranteed Mortgage Quote. “That secret is the amount of mortgage ‘fallout’ caused by mortgage loan originator oversights. Too many borrowers are ‘approved’ for mortgages they don’t qualify for because originators did not fully analyze the borrower’s financial situation. These errors are ultimately discovered during the underwriting process when it’s too late to save the applicant from financial harm.” To reduce fallout, the system includes software that generates a highly-detailed supplemental application, called The Complete 1003. The Complete 1003 contains all the additional crucial mortgage application questions that are missing on the industry standard 1003 form. The Complete 1003 also incorporates the Fannie Mae, Freddie Mac, FHA, and FHA/USDA guidelines underneath each pertinent application question. This gives mortgage loan originators all the information needed to determine if a borrower truly meets the requirements of the mortgage program so that the application package will pass through underwriting.

LPS Unveils Web-Based Servicing App L e n d e r Processing Services Inc. (LPS) has announced the launch of its Workout Interaction Tool (WIT), a Web-based application that provides data from its marketleading MSP servicing system to and from Fannie Mae’s Servicing Management Default Underwriter (SMDU) platform. Using LPS’ WIT, mortgage servicers can access SMDU to provide consistent, real-time decisions on loan modifications and other solutions for homeowners with payment challenges. SMDU enables timely workout decisions based on Fannie Mae and Servicing Alignment Initiative guidelines by integrating with existing loss mitigation systems to enhance solution delivery during


the foreclosure prevention process. “We’re pleased LPS has developed a solution that enables access to SMDU during the loss mitigation process for Fannie Mae loans,” said Leslie Peeler, senior vice president of Fannie Mae’s National Servicing Organization. “WIT shows that LPS understands Fannie Mae requirements and sees the value of delivering fast, consistent workout solutions in a user-friendly format that helps more borrowers avoid foreclosure.” After WIT submits data to SMDU from LPS’ MSP, which includes collections and loss mitigation functionality, then SMDU returns a response file that includes the recommended loss mitigation program based on the data received. The response file also contains messages specific to each loan based on SMDU’s analysis that are designed to facilitate processing and completion of loan workouts. “LPS is proud that WIT supports Fannie Mae’s efforts to increase the quality and consistency of loan modification workouts across the servicing industry,” said Dan Scheuble, LPS chief operating officer. “Together, we hope to facilitate faster adoption of Fannie Mae loss mitigation programs and improve workouts for both servicers and borrowers through improved loan workout standardization.” WIT retains servicer requests and SMDU responses for future reference and audit purposes. When eligibility of a loan modification is confirmed, relevant data can be fed back into LPS’ MSP and provided in an exportable CSV file format for HAMP Treasury reporting.

Mortech has announced that it has rolled out additional features to Connect Plus, a borrower contact and management tool. The new offering, part of the Marksman mortgage mar-

applications, loan officer search, and rate search; enhanced User Security, customizable, CFPB-compliant mortgage application; mortgage calculators; mortgage FAQs; mortgage glossary; lender or loan officer-specific Web page templates; a complete product and pricing engine; and custom lender disclosures.

LendingQB Implements New MI Underwriting Guidelines

LendingQB has announced that it has implemented the mortgage insurance continued on page 43

Grow with FAMP in 2013...

Join us at our 2013 Convention & Trade Show July 31 through August 3, 2013 Attendees     

Complete Your NMLS-Approved Required Continuing Education in 1 Day Meet and Hear Industry Experts at Our Luncheons Attend Breakout Sessions to Sharpen Your Professional Skills and Knowledge Attend Our Annual Trade Show to Meet the Industry Professionals You Need to Know Participate in the FAMP Golf Outing at the Beautiful Shingle Creek Golf Club

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Vendors    

Network, Network, Network Meet New Prospects, Strengthen Existing Customer Relationships Gain a Competitive Edge Do you want to bring home leads, sell your products/services and build your company image? Meet the Mortgage Professionals you need to know at our Trade Show. People want to do business with people they’ve met.

Visit us at www.MyFAMP.org for more information.

HERE WE GROW AGAIN

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Capsilon has released a new version of its DocVelocity Mobile app to enable on-the-go mortgage professionals to securely access loan documents. The newest version of the app has performance and security improvements. The DocVelocity Mobile app is designed specifically for Apple iPhone, iPad and iPod Touch devices and works exclusively with the DocVelocity cloudbased imaging solution, so users are quickly able to access loan documents with the assurance these documents are correctly formatted, named, indexed and versioned. A new feature the mobile app offers is an optional capability to cache documents which may need to be viewed repeatedly, cutting down on required download time. Documents viewed via DocVelocity Mobile are encrypted on the mobile device to maintain security even if the device is lost or stolen. Secure authentication on the mobile device and access control settings managed centrally by the system administrator ensure documents are viewed only by authorized users from allowed folders, inboxes and threads.

Mortech Rolls Out Additional Features to Connect Plus

keting and lead management system, offers a variety of features, including Web site templates and landing pages formatted to increase borrower clickthrough rates. “Loan officers are getting better about sourcing mortgage leads from the Web, but regardless of where the lead comes from, loan officers must be able to quickly and efficiently make contact with prospective borrowers,” said Don Kracl, vice president of mortgage tools for Zillow. “Connect Plus takes the idea of a borrower portal and makes it work, without sending the borrower or the loan officer outside the Marksman system to find additional functionality.” Functionality offered in Connect Plus now includes: Stand-alone mortgage

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DocVelocity App Receives Latest Updates From Capsilon

“DocVelocity Mobile lets our customers see up-to-date loan documents, wherever they are, whenever they need them,” said Sanjeev Malaney, chief executive officer at Capsilon. “The new version has even better performance and higher security.”


Consumer Complaint Policies and the CFPB By Joy K. Gilpin

The Dodd-Frank Act provides authority to the Consumer Financial Protection Bureau (CFPB) to prevent financial harm to consumers. One of the CFPB strategies to accomplish this goal is to handle complaints and inquiries regarding challenges consumers face in the financial marketplace, including mortgage products and services. The CFPB monitors and shares the complaint data it collects with other regulators for investigation and enforcement of consumer protection laws. In today’s lending environment, a consumer complaint policy is integral to establishing a compliance management system called for by the CFPB. Do you have a source to guide development of your company’s consumer complaint process? AllRegs can help. The AllRegs Consumer Complaint Policy Manual is designed to aid mortgage brokers, lenders and originators in the development of a consumer complaint process. This document reviews the need for a consumer complaint policy and the risks of noncompliance; identifies existing complaint portals managed by industry regulators; outlines the framework of a consumer complaint process; and provides training protocols and best practices to effect process implementation. Several federal offices require implementation or access to this manual, including: n CFPB—Consumer Financial Protection Bureau n FNMA—Fannie Mae n FHLMC—Freddie Mac n FTC—Federal Trade Commission n OCC—Office of the Comptroller of the Currency n HUD—U.S. Department of Housing & Urban Development 16

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The Consumer Complaint Policy Manual features the following: Identifies federal regulations surrounding consumer protection laws Highlights the risks associated with non-compliance Defines differences in customer communications relating to feedback, inquiries and complaints Outlines requirements surrounding Consumer Complaint Management Establishes a Consumer Complaint policy that can be adjusted or tailored to the needs of your organization

The Consumer Complaint Policy Manual is a pre-written AllRegs Policy Manual. It is a complete plan, ready for personalization with your company or organization’s name. You can even customize it to include your own internal policy and procedures. Visit www.allregs.com or contact your dedicated account executive to learn how you can implement this consumer complaint policy manual today. For a personal consultation on your consumer complaint and other policy needs, call your dedicated account executive at (800) 848-4904. Or, get more information about AllRegs and the full suite of products and services by visiting www.allregs.com today. Joy K. Gilpin is professional services manager with AllRegs. She may be reached by phone at (800) 848-4904.

Sponsored Editorial

nmp newsflash

continued from page 12

HAMP Program Extended Through the End of 2015 The U.S. Department of the Treasury and the U.S. Department of Housing & Urban Development (HUD) have announced an extension of the Obama Administration’s Making Home Affordable program through Dec. 31, 2015. The new deadline was determined in coordination with the Federal Housing Finance Agency (FHFA) to align with extended deadlines for the Home Affordable Refinance Program (HARP) and the Streamlined Modification Initiative for homeowners with loans owned or guaranteed by Fannie Mae and Freddie Mac. The Making Home Affordable Program has been a critical part of the Obama Administration’s comprehensive efforts to provide relief to families at risk of foreclosure and help the housing market recover from a historic housing crisis. The program deadline was previously Dec. 31, 2013. “The housing market is gaining steam, but many homeowners are still struggling,” said Treasury Secretary Jacob J. Lew. “Helping responsible homeowners avoid foreclosure is part of our wide-ranging efforts to strengthen the middle class, and Making Home Affordable offers homeowners some of the deepest and most dependable assistance available to prevent foreclosure. Extending the program for two years will benefit many additional families while maintaining clear standards and accountability for an important part of the mortgage industry.” Since its launch in March 2009, about 1.6 million actions have been taken through the program to provide relief to homeowners and nearly 1.3 million homeowners have been helped directly by the program. The Making Home Affordable Program includes the Home Affordable Modification Program or HAMP, which modifies the terms of a homeowner’s mortgage to reduce their monthly payment to prevent foreclosure. As of March 2013, more than 1.1 million homeowners have received a permanent modification of their mortgage through HAMP, with a median savings of $546 every month – or 38 percent of their previous payment. Data from the Office of the Comptroller of the Currency (OCC) shows that the median savings for homeowners in HAMP is higher than the median savings for homeowners in private industry modifications, which has helped homeowners in HAMP sustain their mortgage payments at higher rates. As a result, HAMP modifications continue to exhibit lower delinquency and re-default rates than industry modifications. “The Making Home Affordable Program has provided help and hope to America’s homeowners,” said HUD Secretary Shaun Donovan. “Families across the country have used its tools to reduce their principal, modify their mort-

gages, fight off foreclosure and stay in their homes—helping further stimulate our housing market recovery. And with this extension, we ensure that the program keeps supporting communities for years to come.”

CFPB Amends Ability-to-Repay Rule The Consumer Financial Protection Bureau (CFPB) has finalized rules to facilitate access to credit by creating specific exemptions and modifications to the CFPB’s Ability-to-Repay rule for small creditors, community development lenders, and housing stabilization programs. The amendments also revised rules on how to calculate loan origination compensation for certain purposes. The final rule amends the CFPB’s Ability-to-Repay rule, which was finalized in January of this year. “Our Ability-to-Repay rule was crafted to promote responsible lending practices,” said CFPB Director Richard Cordray. “These amendments embody our efforts to make reasonable changes to the rule in order to foster access to responsible credit for consumers.” The CFPB finalized its Ability-to-Repay rule on Jan. 10, 2013. The Ability-to-Repay rule established that most new mortgages must comply with basic requirements that protect consumers from taking on loans they do not have the financial means to pay back. Lenders are presumed to have complied with the Ability-to-Repay rule if they issue “Qualified Mortgages” (QMs). These loans must meet certain requirements including prohibitions or limitations on the risky features that harmed consumers in the recent mortgage crisis. If a lender makes a Qualified Mortgage, consumers have greater assurance that they can pay back the loan. “NAMB is currently reviewing the entire text of the Final Rule and upon completion, we will release a statement regarding our findings,” said Donald J. Frommeyer, CRMS, president of NAMB—The Association of Mortgage Professionals. “We strive to ensure that the information we disseminate to our constituents and members has been thoroughly reviewed to provide the highest level of accuracy and understanding.” The CFPB proposed the amendments finalized in conjunction with the adoption of the Ability-to-Repay rule. The CFPB solicited public input on the proposal before releasing today’s final rules. “We are pleased at the adjustments made to the rule as it relates to smaller lenders, regardless of business model, that will allow them to continue to provide the safe and sustainable mortgage products that they are currently offering their borrowers,” said David H. Stevens, president and CEO of the Mortgage Bankers Association (MBA). “We also welcome continued on page 18


“It is better to offer

NO EXCUSE

than a bad one.” – George Washington

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Equal Housing Opportunity. Rushmore Loan Management Services LLC, NMLS ID# 185729, 15480 Laguna Canyon Road, Suite 100, Irvine, CA 92618. 1-866-699-5600. Not an offer for the extension of credit or a commitment to lend. Intended for mortgage brokers. Rushmore does not lend in Alaska, Massachusetts, Missouri, New York, Nevada or Rhode Island.. Alabama Consumer Credit (#21602); Alaska Mortgage Lender (AK185729); Arizona Wholesale Lender Exemption; Arkansas Mortgage Banker-Broker-Servicer (#101513); Licensed by the Department of Corporations under the California Residential Mortgage Lending Act (#4131068); Colorado Wholesale Lender Exemption (Regulated by the Division of Real Estate); Connecticut Mortgage Lender (ML-185729); Delaware Mortgage Lender (#012394); District of Columbia Mortgage Lender (MLB185729); Florida Mortgage Lender-Servicer (MLD622); Georgia Mortgage Lender Licensee (#24224); Hawaii Mortgage Loan Originator Company (HI-185729); Idaho Wholesale Lender Exemption; Illinois Residential Mortgage Licensee (MB.6760723); Indiana DFI First Lien Mortgage Lending (#18619); Indiana DFI Subordinate Lien Mortgage Lending (#187644); Iowa Mortgage Banker (MBK-2009-0083); Kansas Supervised Loan (SL.0026265); Kentucky Mortgage Company (MC71455); Louisiana Residential Mortgage Lending (#185729), Maine Supervised Lender (SLM11886); Maryland Mortgage Lender (#19168), Michigan Mortgage Broker, Lender & Servicer (FL0017075); Michigan Secondary Mortgage Broker, Lender & Servicer (SR0017076); Minnesota Residential Mortgage Originator (185729); Mississippi Mortgage Lender (185729); Montana Mortgage Lender (#185729); Nebraska Mortgage Banker (#2071); Licensed by the New Hampshire Banking Department Mortgage Banker (#15265-MB), Licensed by the New Jersey Department of Banking and Insurance Residential Mortgage Lender (#186729), New Mexico Mortgage Loan Company (185729); North Carolina Mortgage Lender (L-154769); North Dakota Money Broker (MB102411); Ohio Mortgage Loan Act Certificate of Registration (SM501700.000); Oklahoma Mortgage Broker (MB001561); Oregon Wholesale Lender Exemption; Licensed by the Pennsylvania Department of Banking Mortgage Lender (#39094); South Carolina Mortgage Lender/Servicer (MLS-185729); South Dakota Mortgage Lender (ML.04880); Tennessee Mortgage License (109273); Texas SML Mortgage Banker Registration; Utah Wholesale Lender Exemption; Vermont Lender (#6411); Licensed by the Virginia State Corporation Commission Lender License (MC-5664); Washington Consumer Loan Company (CL-185729); West Virginia Mortgage Lender (ML-24836); Wisconsin Mortgage Banker (#185729); Wyoming Mortgage Lender/Broker (#2250); Fannie Mae Seller/Servicer (#30519-000-4); HUD FHA Title II (#3094100002);Veterans Affairs Lender (#902914-00-00).

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WE WORK TO GET YOU AN ANSWER AND RESPOND TO YOUR BUSINESS NEEDS. That’s just one of the simple ways we do business. At Rushmore Home Loans we believe that to succeed, we need to work harder than everyone else. Smarter than everyone else. And unfortunately for our people, sometimes later than everyone else.


Summer Tips To Keep Your Pipeline Red Hot Here are some tips to keep your pipeline full regardless of market conditions Follow the trends It’s never a good idea to try and develop your own marketing campaign until you’ve found multiple types of marketing that work for you. If the big word in the industry is HARP (the Home Affordable Refinance Program), don’t try to go against the grain and market for something that isn’t working. The public is well-aware of the changes in the mortgage industry, and is keeping up on buzz words like “FHA STREAMLINE” and “HARP.” Find a marketing means that works for you and your budget and get to work. When you go to trade shows or talk with colleagues about how great their own campaigns are working, GO AFTER THE SAME THING! The marketing is working because the market is accepting it. Find a marketing firm that follows the trends, and then follow them yourself. The market will always show you how to best offer your products.

Test, measure, test again Many people begin a new marketing campaign with a new marketing firm and think that they should be setting records right away. This couldn’t be further from the truth. In fact, in most cases, the first campaign is only the beginning. Campaign number three or four is where their efforts really begin to pay off.

Tips for 2013

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Direct mail responses are up. If you haven’t tried direct mail in a while, it might be time to give it a try again. VA responses are down so try to mix your VA campaign with other loan types as well. It’ll keep your response rates up while keeping an eye the VA market so you’ll see exactly when responses come back. Internet leads work if you work them. Don’t expect to make an easy buck … those days are over. If you must use them, make sure you get exclusive Internet leads and not ones that have been sold 10 times already, unless you already know those type of leads work for you. When it comes to Internet leads, cheaper is not always better. Live transfers are back! They are expensive but they are performing very well. If you’re not able to make outbound leads work, let your marketing firm do all the work for you. All you have to do is answer the phone. New data files are available specifically for the mortgage industry. You don’t have to get set up with credit bureaus to get qualified data anymore. Mail houses won’t have it, but good marketing firms will. Trigger leads are still being sold by the credit bureaus. Remain aware of what methods your competitors are using. Whether you are using them or not, it’s a reality that must be dealt with. Last, but not least, RIDE THE WAVE! The mortgage industry is back and it’s time you came back with it. If you are not having the biggest year of your career, you’ve got to take a look at your own marketing efforts and how you can make your campaigns perform better. Medford, Ore.-based TagQuest is a full-service marketing firm created specifically for the ever-changing business world. TagQuest assists companies with their direct marketing, advertising and branding needs, and knows what it takes to generate quality customers and, most importantly, how to retain those customers for years to come. TagQuest brings forth a unique opportunity to utilize our experience and expertise in varying consumer sales and marketing environments. For more information, call (866) 376-5540 or visit Tagquest.com.

VIEW OUR MOST RECENT WEBINAR ON YOUTUBE Online readers please click on the link below, readers of the print edition, please copy the link and paste it into your browser. http://www.youtube.com/watch?v=coBEsmEV0go

Sponsored Editorial

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the stipulation that compensation paid by brokers and lenders to loan originator employees do not count toward the points and fees threshold for what constitutes a ‘Qualified Mortgage.’ Both of these provisions should facilitate a more efficient and affordable marketplace for borrowers.

$50 Billion-Plus Paid Out to Date by Servicers Under Terms of Nationwide Settlement

The nation’s largest mortgage servicers have distributed $50.63 billion in direct relief to over 620,000 homeowners, or roughly $81,000 per homeowner as part of the National Mortgage Settlement, according to a progress update released by independent settlement monitor Joseph A. Smith of the Office of Mortgage Settlement Oversight. Over one year ago, the Department of Justice (DOJ), U.S. Department of Housing Urban Development (HUD) and 49 state attorneys general reached a landmark agreement with the nation’s five largest mortgage servicers to address mortgage loan servicing and foreclosure abuses. “One year in, it is clear that this historic settlement is making a profound difference on lives and communities,” said HUD Secretary Shaun Donovan. “We have far surpassed expectations in our efforts to assist struggling Americans. Due to the efforts by 49 bipartisan state attorneys general and the federal government, hundreds of thousands of people are able to stay in their homes or avoid foreclosure, preventing the erosion of the social fabric of our communities. As a result of the settlement, over 620,000 homeowners have received on average more than $81,000 in benefits thus far.” The report demonstrates significant progress on the broadest and most robust principal reduction program in the nation’s history. Nearly $30 billion of the overall completed consumer relief has come in the form of principal forgiveness and refinancing. Because of the settlement, the principal reduction helps borrowers stay in their homes, lowering monthly payments on over 310,000 loans and actually reducing struggling homeowners’ loan balances by more than $83,000 on average. “New York homeowners have received almost $2 billion in financial relief under the National Mortgage Settlement—far more than the federal government projected would flow to our state a year ago,” said Attorney General Eric T. Schneiderman. “While we are pleased that the benefits to homeowners—including reduced debt, lower

mortgage payments, and averted foreclosures—have been substantial, our work is not finished. My office will continue to monitor the banks’ compliance with the settlement.” According to data reported by the Monitor of the National Mortgage Settlement, 621,712 borrowers benefited from some type of consumer relief totaling $50.63 billion, which, on average, represents about $81,437 per borrower. This figure includes both completed Consumer Relief and active first lien trial modifications. The information is self-reported by the banks and will not be credited under the Settlement until each bank requests a review from the Monitor; to date, only the ResCap parties (formerly GMAC) have received credit.

HUD to Sell Thousands of Severely Delinquent Mortgage Loans For the second time this year, the U.S. Department of Housing & Urban Development (HUD) will sell thousands of severely delinquent mortgage loans insured by the Federal Housing Administration (FHA) as part of a broader effort to address the housing market’s shadow inventory and to target relief to areas experiencing high foreclosure activity. This summer, HUD will sell approximately 20,000 distressed loans through its expanded Distressed Asset Stabilization Program (DASP) to increase recoveries to FHA’s Mutual Mortgage Insurance (MMI) Fund from non-performing FHA-insured loans, while contributing to stabilization and recovery in some of the nation’s communities hit hardest by the housing crisis. Like previous note sales, HUD’s offerings will be conducted through two auctions–on June 26th, HUD will sell approximately 15,000 notes through ‘national pools’ and on July 10th will offer approximately 5,000 notes through Neighborhood Stabilization Outcome (NSO) pools. The NSO pools will offer qualified bidders notes located in the following areas: Southern California, Chicago, southern Ohio (including Cincinnati, Columbus and Dayton), and the entire state of North Carolina. HUD is expanding the use of single-family loan sales through a competitive bidding process in which loan pools are sold to the highest bidder, including non-profit and communitybased organizations. “We’ve seen a tremendous response to our note sales which allow us to support particular areas of our country hard-hit by foreclosures while improving outcomes for FHA,” said FHA Commissioner Carol Galante. “These auctions allow us to continue stabilizing hard-hit housing markets and to improve FHA’s overall financial position at the same time.” continued on page 62


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NAMB

perspective

The President’s Corner: June 2013

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his is an open letter to all members of NAMB—The Association of Mortgage Pro-fessionals, all non-members of NAMB and every mortgage professional in the United States. The time has come to unite together NOW! We are working very hard in Washington, D.C. with our congressmen and congresswomen, our senators and all of their staff. We are now in the fight of our life. We can no longer sit on our hands and hope that changes will be made to the Qualified Mortgage (QM) rule and other items in our favor. The time has come to join together and make our statement as one unit and as the entrepreneurs that we are. I have been in the mortgage business for 37-plus years. This is my life and I enjoy it almost as much as being a baseball umpire. I know that we have come through a lot in all of those years and we cannot afford to be shoved aside and/or go work for a bank. I like doing what I do on my time in my state and helping my customers.

The changes that are coming in six months to the QM are not good. We are again going to have to reduce our pay, and in some cases, we will not be able to help customers who are not doing loans in excess of $180,000. My loans in Indiana are averaging $120,000, but I have done many loans for $65,000-$85,000 in my area. We don’t have loans in large amounts. If this goes through, we will not be able to do these loans, let alone make a profit from our loans. In all reality, this only impacts those who are mortgage brokers. I have an idea, and I will be writing letters to all of our statesmen, but we need to join together and unite. I have always said that a mortgage loan is a mortgage loan is a mortgage loan. You need to do the same things on each loan, whether it is a broker, banker, correspondent or depository bank. All of the regulations are the same. You have the same rules about loans in every area. Income, employment, credit and appraisal, title work and closings: Everyone does it the same. So why are their different rules for some and hard-

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er rules for others? As mortgage brokers, we need to be licensed, have a background check, be fingerprinted, have our credit checked, have taken a national and state test, and meet continuing education requirements every year. We have had to disclose our fees and need to fill out a steering disclosure so we do not take advantage of the customer by making too much money. We have to have a contract with the lenders that we close loans with and we are limited on how much can be involved in the transaction. Yet on the other side, they are not licensed, they don’t disclose fees, they can waive some fees for the customer, they can lock to the customer but float the loan to make more money. And five days after they take the application, they can change the lender and make more money for themselves and their companies. A good example is a mortgage banker in my area. They don’t list what they are making, they tell the customer that I have all of these fees that are disclosed, even though I am taking what is left over and giving it to the customer to pay some closing costs. My company is making 2.5 percent as our fee, and they are making six percent to seven percent for their company and their pocketbook, meanwhile the customer thinks they are getting a great deal because they don’t have any fees. Now I know that you are probably thinking, “Hey, 2.5 percent is great, so what are you upset about?” In the current QM, we are going to have to disclose our fees along with any affiliated fees to be included in the three percent. This also includes any annual percentage rate (APR) fees on the loan … but not the other side! I have given nearly two years of my life to this association as your president. I have accepted the role of being your leader and I am going to do it for another year so that we have some consistency in the management of this organization as we have really come a long way. I believe that we have been very successful in the past few years and have very good people involved. But I cannot express to you that if you do not step up and get involved, you could soon be working at the local ice cream parlor, grocery store or food establishment for minimum wage. Is that what you want?? This is not about generating money to help pay expenses. We are doing fine as we have tightened our belt so tight and reduced our expenses so much, we are better each day. No one, not anyone on the NAMB board, is paid to do what we do. I have lost thousands of dollars in personal income by doing this job, but I am a believer. I have heard people say to me that there is no benefit to joining. But they are just taking the easy road and they don’t under-

stand and don’t want to know what we do for you. We are out there for you working for you to keep your job. We are there to make sure that this profession is one of integrity and professionalism and that were holding our members accountable for their actions. And today, we are so much further ahead. The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) was a beautiful thing. It got rid of the most of the bad mortgage people. Those who found a way went over to where they could hide and not have to go through what we did. But I need you … yes YOU! If you are not a member, go to www.joinnamb.com and sign up. All it takes is $50 to become a Silver member. You need to embrace this and stand up for your rights and your profession. You need to do this today. And I promise you that you will get value for every dollar in membership dues that you pay. You also have an open door to contact me about anything you need or want to ask. Just e-mail me at president@namb.org and I will get back to you. But I need everyone to join within the next 30 days so when we start this march to success, we have the membership that we need. Now, we are going to take on a task that we will need your support and by that I mean in membership numbers. There are 113,000 originators out there nationwide. We need to grow our numbers tenfold. We currently have 5,100 NAMB members and we need 50,000 members. I am personally embarking on this trek to change the mortgage rules. We are going to start to push our Congress and Senate to understand that all mortgages are the same. We need to change the rules for the good of the industry and for the good of the American people. Remember, we are all about the customers and the people. Why should customers have to pay more for a mortgage loan? Why do they have to pay more for appraisals? Why do they have to pay more for their loan to companies that are not disclosing fees because they don’t have to and then have them being told that “We don’t have those fees,” knowing that nothing is free in this world. Someone is paying for it. I will be contacting all of the largest lenders in America to get behind us and help us, but we need the numbers. Talk to your co-workers, talk to your friends, your title people, your credit companies, your every other person involved with your company and your loan. We need members and we need to do this now! Are you behind me in this fight? Sincerely,

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


NAMB

perspective

NAMB Government Affairs Committee Update Still Fighting By Richard M. Bettencourt Jr., CRMS, CMHS

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One of the biggest questions I felt was left unanswered in the CFPB’s Final ATR/QM rule was the treatment of Loan Level Pricing Adjustments (LLPAs) and their impact on the three percent points

and fees cap. How are they to be counted? Are they to be counted regardless of the methodology they are assessed or are continued on page 22

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n National Mortgage Professional Magazine n JUNE 2013

e are just about halfway through the year and to say it’s been uneventful is a slight exaggeration. As you all know, the Consumer Financial Protection Bureau (CFPB) released their Ability-to-Repay and Qualified Mortgage Standards Under the Truth-in-Lending Act (QM/ART) final ruling on May 29, 2013. Several trade associations have already made statements regarding the final rule and NAMB—The Association of Mortgage Professionals Government Affairs Team has reviewed the entire 279-page document and will be making a formal statement in the immediate future. The final rule had a few surprises and still leaves some questions to be answered. Allow me to ask a question: If the ultimate goal of the powers that be is to ensure our consumers are granted equal and fair access to credit, then why is it that the mortgage broker is consistently put in a different pasture like the proverbial BLACK SHEEP? How come all lenders, creditors, mortgage brokers and mortgage bankers are not held to the same standard? We all deal with customers. We all originate mortgages. We all discuss closing costs and pre-paid expenses. We all provide a service that the consumer trusts and relies on us to guide them through. Shouldn’t we all be on the same playing field? Why is it that a banker/creditor/retail mortgage office and their individual loan originator’s compensation is excluded from the three percent points in fees cap as defined in the QM/ATR, but compensation from a creditor to a mortgage broker is still included? That major issue creates a significant disparate impact on the small business. As it was clearly indicated in the CFPB’s recent tabulation of complaints, mortgage brokers received, by far, the fewest overall complaints in the preceding year, yet the powers-that-be still feel this is an entity that needs to be “handcuffed” and “reigned in” so to speak. The mortgage broker was not the cause of the “mortgage meltdown,” nor were they the cause of the significant property depreciation we saw over the last few years. One thing I do know the mortgage brokers were very good at was providing an overwhelming amount of credits to their consumers to pay for closing costs and pre-

paids to make homeownership affordable. I know of one company in Louisiana that, in a one-year period, provided close to $750,000 in credits to consumers to assist them with their purchase!


perspective

NAMB they only going to be counted if they are a direct pass-through expense to the consumer. The latter never happens! When was the last time or how often do you see an LLPA Point being charged to the borrower on a Good Faith Estimate (GFE)? I’ve never seen one in my 13 years! But this brings up the question as to how the CFPB will treat these? If they are to be counted, regardless of whether the LLPA is in the rate or an upfront cost, the broker/banker/lender community needs to know how to approach these fees!

Hey, did you all read the letter the Center for Responsible Lending (CRL) recently wrote to Congress? In it, they state that the two pieces of legislation currently before Congress and the Senate (HR 1077 and S 949) will permit mortgage professionals to overcharge consumers, lead to consumer steering, and they even said it would impact African-American and Latino borrowers! I’m not sure where they collected their data, but it is very inaccurate, and I would love the opportunity to sit down with members of the CRL and help them understand firsthand the ben-

efits both pieces of legislation bring to our consumers and how the new mortgage world operates. NAMB has and always will be a leader in the advocacy and outreach to our consumers to ensure they are being protected under the many laws created. In order to do so, NAMB always welcomes the opportunity to work with our fellow trade associations, like the CRL, to see that it is done! Please contact your congressional leaders and/or senator and ask them to sponsor and endorse HR 1077 and S 949. Well, that’s it for me today! We have a

lot left to do until January 2014, so please, be active and be a part of something bigger than yourself. Join NAMB and help us fight the fight for you! Only a voice makes waves! Richard M. Bettencourt Jr., CRMS, CMHS of Danvers, Mass.-based Mortgage Network Inc. is Government Affairs Committee chair of NAMB—The Association of Mortgage Professionals. He may be reached by phone at (978) 979-0883 or e-mail rbettencourt@mortgagenetwork.com.

NAMB National Conference Exploding With Energy By John G. Stevens

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ast year, nearly 1,500 mortgage professionals signed on to be part of what is now the biggest event for mortgage originators in the nation. We had high hopes when we

launched NAMB National, and the end result exceeded all of our expectations. But the problem with success is that you’re supposed to do it again. That’s certainly what happens in Hollywood. Just look at Iron Man 3, The Fast and the Furious Six, The Hangover Part III, etc. As the summer gets underway and

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everybody’s looking at what the movie blockbusters are going to be, we’re looking at October when “NAMB National, The Sequel” sure looks like it’s going to outdo even the original. We’ve just started putting together the educational agenda for our conference, set for Oct. 20-21 at Harrah’s in Las Vegas. But we’re pleased to say that Dr. Lawrence Yun, senior vice president and chief economist for the National Association of Realtors (NAR), has agreed to be our kickoff Featured Speaker on Sunday, Oct. 20. Attendees will be thrilled to hear Dr. Yun’s outlook on what’s next for the residential sales market. We have also arranged for a special day of continuing education, apart from all of our regular sessions. This will give attendees an opportunity to fulfill all eight hours of continuing education (CE) required to renew their NMLS license, and get it all in with plenty of time to spare before the renewal deadline. As we continue to craft a compelling lineup of speakers and panel discussions, we’re immediately focused on putting together our roster of sponsors and exhibitors. This year, New Hampshirebased Birchwood Credit Services stepped up to become the conference’s Presenting Sponsor. Birchwood is a highly-respected and entrepreneurial company, looking to broaden its reach nationally. It saw NAMB National as its best opportunity to build its business, and we’re honored to be working with Birchwood Credit Services. But Birchwood isn’t the only company that sees tremendous value in being part of this event. In fact, within just the first two weeks of our opening up sponsor and exhibitor sales, we sold out of all our Gold Sponsorships, sold our Title Sponsorship, we sold half of our Featured Speaker Sponsorships, sold half our available Platinum Sponsorships, sold a third of our Track Sponsorships, sold the Name Badge

Sponsorship–and sold out more than half the exhibit hall. Last year, we sold out of every available sponsorship and exhibit space–and still had a waiting list of companies that wanted to participate. This year, we’re on track to sell out again, only faster. So the lesson is simple: If your company wants to be part of the nation’s biggest event for mortgage professionals, don’t wait … go to www.nambnational.com now. The NAMB National Committee is dedicated to bringing our members the best experience possible. That’s why we make sure there’s a broad mix of education. We go from hands-on, business-building sessions to presentations that stir your creative engines. Then we mix in compelling keynote presentations from the profession’s most respected and thoughtful leaders. And it all adds up to a “can’t miss” conference. And after a half-dozen years at the MGM Grand, we’re looking for more variety and a new atmosphere as we move the conference to Harrah’s. Part of Caesar’s Entertainment, Harrah’s is one of the most venerated names in Las Vegas, steeped in fun, elegance and history. Our exhibit hall area and meeting spaces are much more convenient to reach at Harrah’s than they were at MGM, and attendees will be in closer proximity to all that Vegas offers. NAMB National is built for you. So don’t be a stranger. Check out NAMB’s home page for links to the conference, or go directly to www.nambnational.com. And we’ll look forward to seeing you in October. John G. Stevens is Utah manager for ENG Lending. He is a board member of NAMB, and chairman of the NAMB National Committee. He may be reached by phone at (801) 432-0660, ext. 101 or e-mail jstevens@englending.com.


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LYKKEN ON

leadership

Leaders Own the Outcomes: Leadership and Sales Support By David Lykken

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rofessional salespeople know that it’s all about results. They know that it doesn’t matter how much effort

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they put into generating leads and closing deals. They know that it doesn’t matter how much time they invest or how many calls they make. They know that it doesn’t matter how well it looks like they’re doing. If, at the end of the day, there isn’t money

coming in the door, they aren’t doing their jobs. They know these things, but they are also human beings. They will make excuses. They will blame marketing for the quality of the leads. They will blame the customer for being too demanding. And, though they may not ever say it to your face, they will blame you for not giving them enough guidance and support. Well, I’m going to tell you something that may come as a bit of a shock. At least in this last matter, they are right. Wait! What do I mean, “They’re right?” They’re salespeople. You are hiring them to sell. If they don’t close any deals, they aren’t doing their jobs. End of story, right? Well, yes and no. Yes, you do want to instill in your salespeople a sense of accountability. You want your salespeople to take responsibility for their failures and successes. You want your salespeople to own their outcomes. On the other hand, just as you expect this level of maturity from your salespeople; you should also expect it from yourself. You are the leader. You set the bar for performance. When your people don’t follow you, you can easily start looking for excuses. You can blame the economy. You can blame changes in the industry. You can blame your salespeople’s lack of discipline. But, in the end, it all comes back on you. If you want to take credit for the successes of your company, you’ve got to take responsibility for its failures. Leaders don’t blame salespeople for failing to generate results. Leaders own the outcomes. If you truly want your sales team to become a results-generating machine over the years, you must create a cul-

ture that rewards and encourages professional growth and development. On every level, you must oversee that progress in your sales team. Whether you oversee the development yourself, you have someone else in your company do it, or you hire an outside contractor to help you sales team grow, you’ve got to have your hands in the process every step of the way. There are four different levels of sales leadership that salespeople need from you in order to perform better in their roles and grow professionally throughout their careers. They are: Managing, Training, Consulting and Coaching. You need to take ownership of each of these levels. Let’s take a look at each of these levels in turn. Managing Managing is the most detached form of professional development for salespeople. Chances are, either you or someone on your team will be responsible for managing your sales team’s performance. The management function is where you set the quotas, measure the results, and either reward or punish the salespeople for how well they perform. There really is no instruction or guidance at this level. It is pure mechanics and raw numbers. You set expectations, monitor how well those expectations are met, and compensate your salespeople accordingly. Divorced from the deeper levels of sales leadership, performing the function of management will make the salespeople feel like you don’t care about them as human beings and you aren’t really interested in their professional development. If you are only a manager, salespeople will come to believe that


you see them as pawns in your game—a mere means to an end. However, as you get your hands into deeper levels of sales leadership, it is absolutely essential that you have your hands on managing the results. You are, after all, running a business. You have both a right and a responsibility to generate results. At the end of the day, you are an irresponsible leader if your sales team isn’t contributing to the bottom line—regardless of how well they like you and sense that you care about them. If the numbers aren’t there, you aren’t doing your job. You must be able to look at the market, examine the industry, and weigh these things against your salespeople’s present capabilities. Then, you must be able to use this information to set reasonable, yet challenging, goals for your sales team. You must oversee the monitoring of how well your salespeople are doing at reaching these goals. Then, you must be willing to provide rewards and/or punishments that are consistent with your original expectations. If your salespeople fail to generate results, it ultimately comes back on you. That’s what it means to be a leader.

Coaching Coaching is like consulting but scaled down to the level of one-on-one. A sales coach works with individuals on developing their sales techniques and attitudes. Coaching is all about feed-

back. It’s about trial and error. The salesperson receives guidance, applies it, and then reevaluates the strategy with the coach. It’s individualized; it’s tailored; it’s focused. Hiring a sales coach is probably the most expensive form of sales leadership, because it is a direct investment into each individual salesperson. However, it also has the greatest return because the coach can focus on the problems and challenges of each individual salesperson. Coaching should only be done by organizations whose salespeople are committed to the company and are continued on page 29

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n National Mortgage Professional Magazine n JUNE 2013

1) Ask yourself what specific problem in yours sales team you are trying to solve; 2) Ask yourself whether your team needs a strategic trainer or a motivation speaker; 3) Hire a sales training firm whose sales philosophy is similar to yours and whose unique selling proposition you believe truly sets it apart; 4) Hire only sales trainers who are willing to offer a money-back guarantee; 5) Look for programs that are customized for your specific industry and tailored to your specific company; 6) Seek out programs that emphasize long-term development rather than short-term gains; 7) Be open to change when trainers make suggestions about your leadership practices; and 8) Hire trainers who encourage your salespeople to take responsibility for their actions and own their outcomes.

Consulting Consulting takes training one level deeper. It makes the leap from instruction to interaction. When you act as a consultant (or hire a consultant) for your sales team, you are having a conversation. You are starting, not with your solution, but with their problems. Consulting is more about learning than it is about teaching. You are finding out what your sales team is dealing with on

an everyday basis. You are meeting them where they are and attempting to guide through their problems from a ground-up point-of-view. When you hire an outside sales consultant, therefore, it is going to be someone you are doing business with for the long-term. Great consulting cannot be done in a single session. So, if you plan on doing consulting with your sales team, make sure you are willing to commit.

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Training Training is a slightly more intimate level of sales leadership. When you train your sales team, you aren’t simply mandating your expectations. You are showing them how to meet those expectations. Training is teaching. For this function, you may want to hire an outside sales trainer or firm that specializes in sales training. In an article titled “How to Pick a Sales Trainer or Sales Training Program,� sales trainer Tom Freese (author of the best-selling Secrets of Question-Based Selling) offers eight suggestions when selecting a sales training program:

Whether you decide to go with an outside trainer or to do the teaching yourself, these are great guidelines to go by in choosing a program and style for teaching your team how to sell effectively.


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. ent states in the first quarter of this year, with offices now located in Wenatchee, Wash; Mount Pleasant, S.C.; Cogent Road, a pro- Chantilly, Va.; and Southbury, Conn. vider of cloud-based This is the first time Equity Loans has the Washington and mortgage technologies, entered has announced the Connecticut markets. Equity Loans’ upcoming version of its Roohmz newest Branch Manager Scott Campbell Enterprise Loan Production System will lead efforts at the Wenatchee, will seamlessly integrate with Wash., office. Campbell has worked in DocMagic’s loan level com- the lending industry for more than 36 pliance/audit engine. The new inte- years, holding positions with several including Hometown gration incorporates DocMagic’s efficient companies loan document preparation and sophisti- Lending; Pinnacle Capital; and Sound cated auditing directly into the Roohmz Mortgage. Oliver Caminos will serve as branch workflow management engine. Each audit will come preloaded in Roohmz as an indi- manager of the Mount Pleasant, S.C. vidual “event” that can be dropped direct- office. Caminos has more than 20 years ly into any loan production workflow. A of experience in residential mortgage single click runs an audit and stores the lending and prior to joining Equity results. Business rules define how the Loans, he was branch manager for Stearns Lending. Branch Manager Dean workflow branches based on the results. Once the loan is in process, there is a Boeving will support efforts at the consistent level of auditing throughout the Chantilly, Va., office. Boeving has 18 entire production cycle. The initial series of years of industry experience, previously specific DocMagic auditing functions are holding positions such as branch manembedded in Roohmz so that users can ager for Allied Mortgage Group; branch “drag and drop” and initiate such “intra- manager for Vantage Point Bank; and loan” compliance events as: Federal and sales manager and loan officer for First state-specific high cost tests, plus Fannie Choice Bank. The Southbury, Conn. Mae and Freddie Mac points and fees test; branch will be led by Branch Manager federal and state-specific HPML audits; Sean Rogerson, bringing more than 15 TILA/MDIA audits; RESPA audits; and state- years of experience to the Equity Loans specific audits, ranging from prepayment team. Previously, Rogerson served as branch manager for Starboard penalty audits to points and fees audits. “This offers great synergy, with a strong Financial, and was also previously link between the core workflow process owner and executive vice president of and the crucial auditing function,” said Northeast Mortgage Corporation. Equity Loans has also announced Dominic Iannitti, CEO of DocMagic. “For the first time, users can deploy the intra- their selection by the National loan audits they desire on each and every Association for Business Resources loan. New features now being developed (NABR) as one of “Atlanta’s Best and for the audit engine will further expand Brightest Companies to Work For.” the benefits of this collaborative integra- Equity Loans was selected for its commitment to excellence in human tion.” resource practices and employee enrichment. The lender was evaluated Equity Loans Opens Four by an independent research firm in a New Locations and variety of categories including shared Recognized as One of

DocMagic Forms Partnership With Cogent Road

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vision, work-life balance, employee education, community initiatives and employee retention, among several others. Kunjan “KP” Patel, CEO of Equity Loans, said, “At Equity Loans, our employees are our number one priority and we are committed to creating a positive, family-oriented environment across the entire organization. We are honored to be recognized for the work environment we have created, which is a testament to the great individuals we have working for the company.”

REMN Wholesale Launches New Community Bank and Credit Union Channel and Westward Expansion

REMN Wholesale launched their Community Banks and Credit Unions channel to specifically fulfill the needs of independent, local lending institutions. The new channel will be led by Bryan Joy, business development manager. As a non-depository lender, REMN Wholesale’s mortgage-only focus helps ensure that the company will not try to lure away a community bank’s customers for their non-mortgage needs. “REMN Wholesale sees a significant opportunity in helping community banks and credit unions fulfill quality loans for their customers. These lenders have built their businesses by offering customers high levels of customer service and they need a partner they can trust to help them compete against the larger institutions. For community banks and credit unions, REMN Wholesale is proving to be the best partner imaginable,” said Joe Amoroso, national director of Sales for REMN.

As the leader of this new division, Joy joins the REMN Wholesale team with more than 15 years of experience working with national lenders, including time spent specifically building relationships with community banks and credit unions. Prior to REMN Wholesale, Joy held senior level positions with WaMu, Merrill Lynch and Wachovia. Most recently he held the role of national solutions director at Equifax, leading sales efforts for two of the top four U.S. banks, in addition to being ranked in the top five percent of the company’s U.S. sales executives. REMN also announced the opening of its latest Southern California office in San Diego. While headquartered in New Jersey, REMN has been making a significant push into Southern California and currently operates other retail locations in Carlsbad, Riverside and Diamond Bar, in addition to an operations center in Irvine. This new San Diego location will extend REMN’s reputation for quality mortgage products and exemplary customer service in dealing with home buyers, builders and real estate professionals, deeper into Southern California. In conjunction with the office’s opening, local mortgage industry veterans, Michael Pieratt and LaVel Alexander, have joined REMN as Branch Managers. Pieratt is a San Diego native and San Diego State University graduate who comes to REMN with more than 25 years of lending industry experience. While he has helped more then 1,500 of people finance homes throughout his career, many know him for his work in athletics on both a local and international level. In addition to coaching baseball at Patrick Henry High School and continuing to assist at baseball camps throughout the county, Pieratt worked at the executive level on both the 1984 (Los Angeles) and the 1988 (Seoul) Olympics.

Atlanta’s Top Businesses Equity Loans LLC has announced the opening of four new office locations in four differ-

continued on page 32


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Passing the Two-Minute Prospect Value Assessment

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of top-producing mortgage originators the same dynamic is at play—only in ell known author reverse. Top originators are constantly Malcolm Gladwell, in demand by firms who would like to best known per- recruit them away from their current haps for his 2000 best- employers. I believe these top originaseller, The Tipping Point, has written tors make snap-judgments within the about scientific research that indi- first few minutes of a recruitment meetcates that positive or negative initial ing relative to managers and the firms impressions are formed during the they represent. These judgments or hiring process in just twoassessments are based on seconds. Moreover, these perceptions of value. Will “You can get better initial impressions corthis person recruiting at creating positive relate highly with the me and his/her firm decision to hire or not represent an overall first-impressions if you to hire a candidate. positive or negative concentrate on it and According to Gladwell’s value to my business? practice—both during research, these imLet me give you a role-play exercises and in pressions are based case in point. I was almost entirely on recently on the phone live recruitment whether the candidate with one of our lender scenarios.” “feels right,” a basic, gutclient’s executives discussing level assessment of the candithe fact that one of his mandate. But Gladwell qualifies this snap- agers was struggling to recruit sucjudgment as an instinctive response to cessful producers in his local market. the question “is this person a friend or Having worked with this manager and a foe.” I believe that in the recruitment attempted to place candidates with By Eric Petersen

W

him, I knew that he had a reputation for doing little to support his producers. The executive asked me to define the problem as I saw at. Here is what I said in an e-mail response: When a candidate meets with a manager, regardless of the manger’s title, the candidate’s bottom line perception is centered on value. What I mean is that key producer candidates are going to question whether or not they would get sufficient value from the compensation the manager makes on the candidate’s personal production. The candidate is asking themselves the following questions: l Are they adding value to my business? l Are they inspiring? l Do they lead or do they manage? l Do we share the same values? l Do they shield me from feeling pain? l Do they have my best interest in mind or do they have their own agenda? l If candidates don’t perceive quickly

that the answer is “Yes” to these questions, they are going to go elsewhere and not feel like building a relationship with you is worth their time. The exchange I had with this client became the basis of a new focus by this lender. The goal being to ensure that their branch managers, who are involved in the recruitment of originators, are focused on communicating value during the recruitment process and throughout their relationships. Here are the most important points to keep in mind regarding firstimpressions in mortgage producer recruitment: 1) First impressions are VITAL. The first moments of an initial recruitment meeting creates an impression that is difficult to change. All words you use and actions you take are being processed and a valuation made.


2) First impressions are a SKILL. You can get better at creating positive first-impressions if you concentrate on it and practice—both during roleplay exercises and in live recruitment scenarios. Your goal is to convince the prospect that the value they gain from you and your firm is greater than that they are experiencing currently, and also what they want to do with their business in the future can be better accomplished – with tangible examples. 3) It’s all about the PROSPECT. If you find yourself doing most of the talking or discussing your interests, family or career, then you are not listening and you are suggesting that your focus is on your needs. Working for a self-focused manager is not valued highly by top producers. 4) Prospect names and histories are IMPORTANT. It is imperative to know who you are talking to. You must know their history and how to pronounce their name to demonstrate you are genuinely interested in them. Be prepared, it suggests that you value their time and are serious about understanding what drives them. 5) Focus on what is POSITIVE. Never criticize people or your competition. Doing so makes you appear insecure and small. Focus on what is great about your firm. Top prospects value organizations with leaders that have vision and integrity, not firms with leaders focused on what is wrong with others.

7) Be prepared to provide EXAMPLES. Top producers value “show me, don’t tell me” folks. When describing marketing support, or operations capabilities, or anything else relevant to the prospect’s business should they choose to join your firm, be prepared to back up claims and assertions with documents, data, policies, testimonials and contacts who can back it up. By focusing managers on delivering value to producers, lenders can expect better morale, better performance and better results from the recruiting process. In the two seconds to two minutes that a top originator prospect takes to form an initial impression of a manager, a firm and an opportunity, it is essential that you immediately and clearly demonstrate value.

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Eric Petersen is a managing partner at Hammerhouse LLC, an expanding national recruiting and strategic growth firm for the financial services industry with mortgage sales and leadership placement at its core. He may be reached by phone at (949) 525-9408 or e-mail eric.petersen@teamhammerhouse.com.

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not very likely to leave. By the same measure, investing in coaching for your salespeople is a powerful tool for making them more likely to stay and commit to your organization.

David Lykken is president of mortgage strategies and managing partner with Mortgage Banking Solutions. He has more than 35 years of industry experience and has garnered a national reputation, and has become a frequent guest on FOX Business News with Neil Cavuto, Stuart Varney, Liz Claman and Dave Asman with additional guest appearances on the CBS Evening News, Bloomberg TV and radio. He may be reached by phone at (512) 977-9900, ext. 10, or e-mail dlykken@mortgagebankingsolutions.com or dlykken@mbsteam.com.

• The always-on business card • Track the leads as it goes viral • Engage clients and prospects with interactive tools and videos

Ready to get started? Go to MortgageMapp.com/MO and sign up today!

©2013 Front Pocket Marketing

n National Mortgage Professional Magazine n JUNE 2013

Like many other decisions in business, you will encounter the “make or buy” dilemma in deciding how you will go about developing your sales team. Should you handle all of the salespeople yourself—managing, training, consulting, and coaching them to greater performance? Or, rather, should you outsource pieces of your sales teams’ development to people or organizations that specialize in improving the performance of salespeople? In the end, only you can make that decision for your business. In either case, the more focused (consulting and coaching) the development, the more expensive and yet more beneficial the development will be and the less focused (training and managing), the less expensive and yet less beneficial the development will be. As with anything else, it all depends on

how much you are willing to risk. The important thing is that you are doing something for your salespeople. Yes, of course, they should be held accountable for their own performance. But you are the leader. In the end, it always falls back on the leader. If you don’t take responsibility for your sales teams’ performance, it’s on you. So, do something. Start today, and take the necessary steps toward developing your sales team into an unstoppable force.

NationalMortgageProfessional.com

lykken on leadership

6) You must be AUTHENTIC. Never attempt to be something or someone you are not. Prospects, particularly top producers, are excellent at reading people and will see right through any efforts that are not genuine. Producers and managers operating in a local mortgage market cannot get away with pretending to be anything but what they are. There are simply too many people around that know your true value as a manager.


for managers only Managing for the Future Coaching … Is It Call Reluctance? By Dave Hershman

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ast month, we talked about the difficulties of training and coaching sales personnel in my article, “Training and Coaching Sales Personnel.” One of the difficulties is figuring out why certain team members are not producing. Have you ever wondered why some seemingly “barely compe-

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tent” people make a great living in sales, while others who seem to be near genius level fall flat on their face? Often it is because they are overcome with call reluctance. Call reluctance is the road-block that keeps many from succeeding in sales. If call reluctance is hurting your employees—then it is time you do something about it. First, understand that everyone has some sort of call reluctance. We

all find reasons not to make a particular call. For some, this is a momentary lapse which they overcome. For others, it is a daily battle, causing each day to pass without true productivity. Therefore, the question is not does someone have call reluctance, but is that call reluctance strong enough to keep them from performing the way you both desire? Here is the good news. Call reluctance can be overcome. For some it will take hard work. But if they are willing to put in the time and effort, they can be successful. The first step is recognizing that they have call reluctance. There is no way that they can overcome an obstacle unless both of your recognize that this obstacle exists. The key is definitely identifying the culprit and that is a coach’s job. If you are truly not sure of the answer, you must look for signs of call reluctance: l At the end of the day, did they find that they did not get to their calls as they took care of “administrative functions,” such as organizing or answering mundane e-mails? l Do they purchase leads or make cold calls instead of talking to previous customers or others with whom they have close relationships? l Are they consumed with planning, taking classes or creating an image, to the detriment of not getting through marketing objectives? l Do they make “excuses” as to why they do not make certain calls or undertake particular marketing activities? For example, do they predispose a negative result of a call? These “clues” are sometimes easier to see from a coaching standpoint. It is always harder to see the “forest from the trees.” The salesperson is likely to have a problem seeing the forest—and it is the coach’s job to

help them see the situation from another vantage point. It is also important to understand that there are different forms of call reluctance. Some are reluctant to call those with whom they are close while others are reluctant to use the phone, but have no problem meeting people face-to-face. Obviously, nailing down their specific reluctances will make it easier to fashion a solution. The next step in the process would be to go deeper and more specific within the situation that has affected their performance. It is not enough to say, they are not comfortable calling people over the phone. Are they uncomfortable calling in all situations? Is it cold calling they are uncomfortable with or warm calling? Do they have a problem calling present customers who are “in process” to give them updates, or is it just sales situations? Are they more comfortable with e-mails because they won’t necessarily hear or see the response? Once you have nailed down the fact that your team member has call reluctance which is impeding their results, you know what specific reluctances are most profound in this situation and you have drilled down to the details of the uncomfortable feelings, now you are ready to fashion some solutions. Next month, we will continue with ideas for you to help others overcome reluctance. There are no magical solutions. Solutions will require work. However, you will find many times that the solutions are far less severe than the fears that have been holding them back from making simple calls? Dave Hershman is a top author in the mortgage industry with seven books published, including The Complete Mortgage Management Kit. Dave is also director of branch support for McLean Mortgage. He may be reached by e-mail at Dave@HershmanGroup.com or visit OriginationPro.com.


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who’s who in the

wholesale arena coming in august 2013

the mortgage motivator and should not be taken in a cavalier way to 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 until the day you pass on. People might not hear you say what you said. Why shouldn’t you say these five words? What’s wrong with them? What about them is so bad? The fact of the matter is: Everyone is saying them! 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

heard on the street

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Norcom to Leverage AllRegs’ Lending Library

We would like to include your company in our 2013 list of wholesale lenders for our "Who's Who in Wholesale" special in the Wholesale and Correspondent Update issue. Please visit https://nmpmag.wufoo.com/forms/m7p8p5/ to include your company. There is no cost for the link, however if you would like to include your logo, there is a $297 charge (If you are a member of NAMB, the charge is only $197). Your listing will appear in the August print and electronic issue of National Mortgage Professional Magazine and on NationalMortgageProfessional.com.

NMP Media Corp. 1220 Wantagh Avenue Wantagh, New York 11793-2202 p 516.409.5555 f 516.409.4600 e advertise@NMPMediaCorp.com w www.NationalMortgageProfessional.com

sources, you need to say different words and 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 make more money.” If you say these words and follow them up with the ideas that will follow in other articles or if you call me, then maybe, just maybe you’ll make it in this business … just maybe. But, I won’t be making any bets. With more than 45 years in the mortgage industry, Ralph LoVuolo is president of Mortgage Motivator, a consulting firm on the cutting edge of the mortgage business. He may be reached by phone at (561) 509-8425 or e-mail ralph@mortgagemotivator.com.

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Alexander, also a native San Diegan, has more than 15 years of lending industry experience, most recently in vice presidential and similar senior-level roles for Synergy One Lending, Wells Fargo and CTX Mortgage. Alexander is a University of San Diego graduate and well versed in the cyclical changes that affect the San Diego real estate market.

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Norcom Mortgage has announced that AllRegs will publish its lending library of mortgage underwriting guidelines. Norcom Mortgage will now leverage the AllRegs technology platform and publishing expertise to manage and maintain its retail and correspondent lending library of mortgage underwriting guidelines. Users will benefit from a variety of productivity tools, including an electronic Table of Contents tree with links to content, guidelines and forms. Content is also accessible through a robust search engine that features a thesaurus with industry jargon and relative matching results. Norcom Mortgage internal staff and business partners will be able to access mortgage underwriting guide content through the online Lending Library that includes the following topics: General Requirements, Freddie Mac Loan Prospector, Conforming Conventional Loans, Appraisal Standards, Specific Property Types–Eligible Products, Government Loans and New Construction. “We at AllRegs are very excited to help Norcom Mortgage provide their staff and business partners with an innovative and robust resource that allows them to search the company’s underwriting

guide,” said Dan Thoms, EVP of AllRegs. “Norcom Mortgage’s lending library will help their staff and partners alike to streamline business processes and increase productivity.”

AmeriSave Mortgage Launches Correspondent Lending Division Atlanta-based AmeriSave Mortgage Corporation has announced the launch of its Correspondent Lending Division. AmeriSave Correspondent Lending has hired a team of veterans who have extensive experience in mortgage and commercial banking to help correspondent clients achieve these objectives. The team will be lead by National Sales Manager Craig Dodds who has been in the mortgage business for over 25 years having served in many capacities including national mortgage operations, sales management, secondary marketing and strategic planning. “Through the launch of a Correspondent Lending Division, AmeriSave is filling the gap in investor availability for lenders who fall within the zone between the GSE’s and the large bankowned correspondent private investors,” said Ed Abufaris, executive vice president of AmeriSave. “As a direct seller to the agencies, Amerisave Correspondent Lending provides needed liquidity to the market.”

Fast Start for MSS’s Vantage Integrated Production Introduced in March 2013, Vantage continued on page 38


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mortgageprofessional N M P

O F

T H E

M O N T H

Corey Dubnoff President

American Financial Resources Inc. (AFR)

C

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orey Dubnoff is an optimist. He sees opportunity and responsibility in the mortgage industry. Corey is president of American Financial Resources Inc. (AFR), a nationwide residential mortgage company, based in northern New Jersey, with an outstanding reputation. Corey works hard to keep the company focused on positively impacting families. Not just through the impact home financing can have on the families of AFR’s customers, but the impact on families that work for the firm as well. National Mortgage Professional Magazine recently had the opportunity to speak with Corey about his career, his firm and his focus on families. How did you first get started in the mortgage industry?  I’ve always lived in New Jersey. I grew up in northern New Jersey and stayed in northern New Jersey for school. I went to Fairleigh Dickinson University. Back in 1995, we had a nice refi boom going on where rates dropped into the 6.5 percent range. It was just a great time to be in the mortgage business. For me, the mortgage business was always a good fit. We started American Financial Resources Inc. (AFR) in 1997. From 1997 to present, it’s just been growing. We started out as a broker. We worked our way up; got some warehouse lines; became a banker and funded our own loans as a correspondent. Then we made that step into a delegated lender. We hired some underwriters. We underwrote. We closed. We funded. We sold. Six years ago, we got our Ginnie Mae approval. Then, we got into the wholesale business. When IndyMac and Taylor Bean were on their way out, we started our wholesale business. Though it didn’t seem like it then, it was a great time to get into the wholesale business. We didn’t have any legacy issues. FHA became the flavor for years, and that is when we stepped in and used our knowledge of the mortgage business to grow the company. What would you say about wholesale’s overall impact on your business? It’s had a tremendous impact. Right now,

BY DAVID J. COSTER

“Whether it’s an employee asking a question, a customer asking a question, a regulator asking me a question … you’re going to get the truth.”

wholesale is two-thirds of our business. It’s a national platform. As I stated before, we started our wholesale lending platform in 2008 and then a correspondent division a few years later, and today, we continue to grow both channels. We started by hiring the best of the best. Our Director of Operations Manager Laura Brandao is the hardest working person that I’ve ever met in my life. She’s extremely knowledgeable in the wholesale world and the operations side

of the business and she has been able to attract very hard working and dedicated people. Wasn’t it a risky decision to step into wholesale at that time? Our CEO is a lot less risk averse than I am—that’s for sure. The big decision of actually getting into the wholesale space and continuing to grow … that’s a lot of him. He had the vision. The opportunity presented itself and we seized it.

What do you love about the mortgage business? The first thing is helping families achieve either homeownership or to be placed into a better financial position. We have a rule. In our process, whenever we communicate about a file, we don’t just say Loan No. 1, 2, 3. We say the Dubnoff Family File No. 1, 2, 3 for example. So it’s always about the families that we help. Whenever we send out our numbers to the company, it’s always about how many families we’ve helped


and how many people we’ve really put into a better financial position. That’s not just BS … we truly do believe that we are helping people and putting them into a better position. With our country’s mortgage system, we have the ability to lend people money and give them the opportunity to go and get shelter for their families in a house they want to live, in a community they want to live in, and in the country they want to live in. I think the mortgage concept is truly one of the cornerstones of this nation. Without it, we would all live where the government or a select few super wealthy landlords tell us to live. What kind of country would that be? Not very free.

How do you find the right people who will echo the corporate culture that you’ve built around service? I typically don’t hire people anymore. I have already done that job years and years ago. It’s certainly paid off with the senior staff that we have in place. Most of our senior staffers have been here for more than five years. Those are the ones who are hiring underwriters, processors and loan officers and support staff. I leave it up to them. I trust them dearly and trust their judgment. I brought in the leaders and managers and set the tone. Then, I gave them freedom to carry it on from there.

?

are you

nominated coming in december 2013

What drives you? What inspires you? The honest and simple fact is that everybody at AFR gets up and comes to work every day. I’m sure they would much rather be with their family and off doing whatever in their personal lives. They come to work every day and work hard. That drives me. It drives me to make sure that I am also thinking about work. I rely on them to do it, and they rely on me to do it. The drive to constantly improve AFR, improve the company—the drive to know that these 500-plus families that call AFR their home, rely on me to do the best I can is a big driving force for me.

We are seeking nominations from our readers for National Mortgage Professional Magazine's "40 Under 40" feature, slated to appear in our December 2013 edition. Anyone who is under the age of 40 and has had a major impact on the industry can qualify for this feature. This could be through innovation, association participation, sales force automation, community activism, management techniques, technology or any other significant method that has influenced our industry. We would need a short, three-line bio on the nominee, along with a color photo and company contact info to complete the profile. To nominate yourself or someone else, visit https://nmpmag.wufoo.com/forms/m7p8s1/.

NMP Media Corp. 1220 Wantagh Avenue Wantagh, New York 11793-2202 p 516.409.5555 f 516.409.4600 e advertise@NMPMediaCorp.com w www.NationalMortgageProfessional.com

n National Mortgage Professional Magazine n JUNE 2013

Do you have any mentors? My wife is a mentor of mine. She works hard at keeping my family life as great as it is and I love her dearly for it. Besides her, on a work level, there are quite a few. My employees are my mentors. There are some who are here before me and leave after me. They are certainly my mentors. My six other partners are my mentors: What’s your greatest career accom- One being my father, another being Laura plishment? Brandao whom I mentioned earlier. I only have one. That’s this business. My They’re constantly working. They’re thinkblood, sweat, and tears … literally every ing. They’re constantly trying to improve single one of them has gone into this themselves and the company and their company. Not only is being part of this division and the people they work with. company a great personal accomplishment for me but it is one that I am very Is there anything else that you’d want proud of. your peers in the industry, employees or others to know that we have not What are you most proud of in this discussed? business? What you see is what you get with AFR. The fact that we truly do think of the fam- Everything that I’ve just told you was the ily when we write the loans, we write God’s honest truth, and that’s what you’re them in a responsible way. We never put going to get from me. Whether it’s an people in positions that they shouldn’t be employee asking a question, a customer in. It’s a family transaction done by a asking a question, a regulator asking me a family business and in the case of whole- question … you’re going to get the truth. sale and correspondent, in conjunction That’s the way our partners are. That’s the with other family businesses. That’s what way we are built. We’re built on trust and we’re proud of. honesty, we have a family focus and a hope that what we are doing is improving Are there any decisions that you’ve people’s lives. made in your career that you wish you could go back and change? David J. Coster is senior editor of National I make mistakes every day … I know I do. Mortgage Professional Magazine. He may I know I’m not perfect. I know everybody is be reached by phone at (919) 559-2171 or not perfect. I’m not going to say that I e-mail davidc@nmpmediacorp.com.

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What keeps you awake at night about the mortgage business … regulations, higher interest rates? I am generally an optimistic person. I’m not afraid of regulations. I think it’s helpful to write the rules down on paper and make sure that everybody follows them. If you build an organization with people who also follow rules, something like that shouldn’t keep you up at night. I think the pendulum swing went from nothing to a lot. We think of the majority of the regulations and the rules put in place to govern the industry are actually a good thing for all. One issue that keeps me up at night would definitely be a rise in interest rates. I think things in the housing market have to improve greatly in order for them to really start to significantly rise. Are they going to rise when the Fed stops buying what we are selling? Yeah, sure. What sort of an impact is that going to have on originations? I am sure, a decent amount. There will always be a market for mortgages though. People want to own homes and homes they can afford.

would go back if I had the ability to change every single one of them, but you have to constantly be moving forward. I never say, if only… I don’t have any regrets.


Regulatory Updates: June 2013 By Laurie Spira

Mandatory Escrow Requirements Effective June 1, 2013 The Escrow Requirements under the Truth-in-Lending Act (Regulation Z) Final Rule (Final Rule) will be effective June 1, 2013.

HPML determination and audit messages l Currently, the definition of “Higher-Priced Mortgage Loan” or “HPML” is the same for all first lien loans: A loan secured by the consumer’s principal dwelling is an HPML if the annual percentage rate (APR) exceeds the annual prime offer rate (APOR) by 1.5 percent or more. Effective June 1, 2013, the definition of HPML will change to incorporate a separate HPML threshold for jumbo loans. A jumbo loan is an HPML if the APR exceeds the APOR by 2.5 percent or more. l The current regulation includes two thresholds for whether or not a first-lien HPML is required to have a mandatory escrow account—a threshold that applies to jumbo loans, and a threshold that applies to all other loans. Effective June 1, the mandatory escrow account requirement will apply to all first-lien HPMLs, regardless of whether the loan is a jumbo loan. The regulatory changes described above simplify the determination of whether or not a loan is an HPML that is subject to enhanced compliance requirements.

Prohibition on Financing Credit Insurance Premiums Delayed

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On May 7, 2013, the Consumer Financial Protection Bureau (CFPB) issued a HYPERLINK "http://files.consumerfinance.gov/f/201305_cfpb_proposed-rule_loan-originator-compensation.pdf" proposal to temporarily delay the effective date of a prohibition on creditors financing singlepremium credit insurance in connection with consumer credit transactions secured by a dwelling. The prohibition, was included in the Loan Originator Compensation Requirements under the Truth in Lending Act (Regulation Z) Final Rule, and originally had an effective date of June 1, 2013. On May 31, 2013, the CFPB issued a final rule, delaying the effective date of the prohibition on financing single-premium credit insurance until January 10, 2014, in order to permit the CFPB to clarify its applicability to transactions in which credit insurance premiums are charged periodically (in lieu of adding a lump-sum premium to the loan amount at closing) before the provision takes effect. Until then, the CFPB will solicit comment on clarifications as well as the appropriate effective date of the prohibition. However, note that the CFPB has indicated that it is not contemplating extending the effective date beyond January 10, 2014. Laurie Spira is chief compliance officer with Torrance, Calif.-based DocMagic Inc. She may be reached by phone at (800) 649-1362, ext. 6446 or e-mail laurie@docmagic.com.

?

FHA Next in Line for

Bailout BY

ROBERT

OTTONE

Some lawmakers are stating that the Federal Housing Administration (FHA) may have been lying about the size of its losses after declaring that it might need public assistance in its almost-80 year history, according to CNBC. Carol Galante, Commissioner of the FHA recently testified before the Senate Committee of Appropriations, imploring the committee to allocate funds to the FHA in order to continue their work with the U.S. Department of Housing & Urban Development (HUD). “The President’s Budget shows that the FHA, while still under stress from legacy loans, has made significant progress and is on a sound fiscal path moving forward,” said Galante in her testimony. “Like nearly all mortgage market institutions, FHA sustained significant losses due to the precipitous fall in the housing market and home prices and is putting additional funds aside this year to cover those legacy losses. Moreover, like most other market participants, recent and future books of mortgage business are expected to bring healthy gains and perform well.” While a government agency seeking more funding isn’t exactly unheard of, the FHA is required, by Congress, to keep cash on-hand to cover expenses at all times. The initial estimates as to how much the FHA might require in taxpayer assistance are said to be around $943 million, according to the Boston Herald. The near-$1 billion bailout would be for loans insured by the FHA that were posted as losses. Sen. Susan Collins (R-ME) stated, “It’s of great concern to us.” The FHA has until Sept. 30 to make a decisions as to whether or not they’ll actually require the money in order to continue operation. The Treasury, which does not require Congressional approval, would be providing the bailout. “A recent example of FHA’s apparent inability to quickly react to changing conditions can be seen in its efforts to require lenders to indemnify HUD for serious and material violations of FHA origination requirements and for fraud and misrepresentation in connection with the origination of FHA loans,” said David Montoya, Office of the Inspector General with HUD, in his testimony before the Senate Committee of Appropriations. “Historically, HUD has sought such indemnifications through agreement with the lenders. HUD already possesses the statutory authority to require such indemnifications for lenders participating it its Lender Insurance program and issued a proposed rule in October 2010 to, among other things, provide additional guidance on HUD’s regulations implementing this authority.” While most lenders require at least 10 percent down, the FHA only recently raised its cap to five percent, up from 3.5 percent. Under new ruling, borrowers who put down less than 10 percent will be forced to pay for mortgage insurance covering the life of the loan. “We are driving as hard as we can get to get a proposed rule out by July or August,” Galante said. “We need to get it in place as soon as possible.” The FHA’s share of the housing loan market has risen sharply since the decline began in 2006, however; the FHA does not provide loans itself, only providing security and insurance to loans taken out by clients. Since 2006, the FHA has only insured around five percent of the current market’s loans. Primarily the source for first-time homebuyers, the FHA also provides loans for those with modest incomes. Robert Ottone is assistant editor of National Mortgage Professional Magazine. He may be reached by phone at (516) 409-5555, ext. 314 or e-mail robertpo@nmpmediacorp.com.

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Why W hy NAPMW? NAPMW? Three Three Simple Reasons Education E duc d cation or the pur pose of providing providing education education to Organized purpose to professionproffession e Or ganized ffor als in all phases of the mor tgage industr y, N NAP MW off ers educa mortgage industry, NAPMW offers educa-orkshops held ar ound the manyy vvenues workshops around tion via man enues – seminars and w tional EEducation ducation C onference held country, on-line,, and at National Conference country, on-line at its Na May. each M ay. NAPMW access to to timely educaeducaNAP MW membership gives gives you you exclusive exclusive access affecting career our car eer such as a tion regarding regarding the regulations regulations aff ecting yyour webinar ebinar on industry industry updates updates AND FREE TO TO MEMBERS monthly monthly w education offering ss off ffe ering (NMLS our 8 hour NMLS continuing continuing educa tion class Provider P rovider # 1400309) 38

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IIff you you believe believe in helping to to elevate elevate the educational educational standards standards of this industry, industry, or assisting in developing developing the most competent competent industryy w work industr ork force, force, then you you believe believe in NAPMW. NAPMW. NAPMW since women NAP MW is not a women’s women’s organization. organization. But sinc ew omen make majority profesmortgage/banking pr ofesup the major ity of professionals professionals in the mortgage/banking purpose business,, personal personal,, sion, our pur pose is to to help them advance advance in business and leadership development. development.

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Coast C oast to oas to C Coast oas A oast Associations ssociations Discounted D iscoun un nted Services Serrvic v es Industry Industry Updates Up U datess

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Integrated Production (VIP) from Mortgage Success Source LLC, one of the industry’s most comprehensive, enterpriseclass sales and marketing services, has opened to an enthusiastic reception with nearly a dozen companies in the process of licensing and installation. “We worked with numerous lenders over the last 18 months to make sure VIP would be exactly what was required; a production platform capable of meeting today’s regulatory challenges while driving revenue,” said Paul Zoukis, CEO of Mortgage Success Source. “We’re confident we hit the mark with this multi-million dollar investment.” Built on a common database that integrates data from across the lender’s internal systems, VIP provides an unrivaled Customer Relationship Management (CRM) platform coupled with industry-leading solution and content for proposal development, presentation and marketing. “Vantage Integrated Production is designed to support every aspect of production,” said Sue Woodard, president of Mortgage Success Source. “We provide Vantage CRM, a powerful sales automation solution capable of driving both field and call center performance, and then turn the usual approach to CRM marketing modules on its head by empowering the lender to manage and control the creation and distribution of its marketing collateral. With Vantage Marketing the lender can take charge of both compliance and brand management in one easy-to-use platform, unlike anything else in the industry. If the lender needs more assistance, we can provide the Vantage Content Library to supplement their creative efforts with an ever expanding array of marketing materials and sales aids.” Built on a central database that combines the lender’s prospect, borrower, partner, loan and pricing information, the Vantage Data Center enhances analysis, empowers event-triggered automated marketing, ensures the suitability of proposals and drives efficiency by sharing data across services. “We don’t believe you can really drive conversion rates or assure compliance unless you reach every point of contact with the customer,” said Todd Ballenger, EVP of sales solutions and business development for Mortgage Success Source. “Whether it’s face-to-face or over the Web, every proposal needs to be suited to the customer’s specific needs, every presentation clear and presented in the form the prospect prefers. Of course, from the enterprise view, everything should be consistent and incorporate the best sales practices possible. That’s precisely what Vantage Sales delivers.”

Title Source to Add 550 Team Members to Downtown Detroit Operations

Title Source has announced that it will

be locating an additional 550 people in the technology district at Campus Martius in downtown Detroit, Mich. Title Source moved 200 team members to the company’s headquarters in the historic First National Building. Last July, the company moved 1,500 team members to downtown Detroit. In addition, Title Source is in the process of hiring 250 new, full-time team members and 100 summer interns who will also be located at its Detroit headquarters. Positions are available in all areas of the company, including technology, title clearance, training, marketing and more. “We’re excited to bring more of our team members to Detroit to join our ongoing efforts to reinvigorate this great city,” said Jeff Eisenshtadt, president of Title Source. “We are nearly one year into our transition and our team members have fully embraced the atmosphere and activities only available downtown.”

Aklero and NYLX Merge to Form LoanLogics

Aklero Risk Analytics Inc. and NYLX have announced that the companies have signed an agreement to merge. The combined entity, LoanLogics, launches as a recognized leader in performance and loan quality analytics. The company has 450 clients and more than 20,000 users and offers proven technology, compliance and risk expertise, and strong industry leadership to improve the transparency and reliability of loan assets through life of the loan. Howard H. Conyack, founder and CEO of NYLX, will serve as chairman and founder of LoanLogics. Brian K. Fitzpatrick, CEO of Aklero, will serve as president and CEO of LoanLogics. “Both NYLX and Aklero have had a vision to truly address the need for better quality loan data and greater transparency and reliability of loan assets through the life of the loan,” said Conyack. “Independently, we were making progress, but together we will have the talent and technology to achieve this goal more quickly and with greater impact.” LoanLogics has created the mortgage industry’s first Enterprise Loan Quality and Performance Analytics Platform that enables lenders, investors, servicers and counterparties to improve loan quality, validate compliance, improve profitability, and manage risk, during origination, sale and servicing of loan assets. LoanLogics management team is comprised of senior managers from Aklero and NYLX as well as some new industry recruits. “The merger of Aklero and NYLX enables clients to benefit and gain the advantages of a seamless solution that


reduces risk and formally tracks and reports on loan quality and performance metrics at various stages of the life of the loan,” said Fitzpatrick. “LoanLogics’ mission is to bring our customers to greater stability and strength through advanced technology and services that support verification, audit and measurement of loan quality.”

360 Mortgage Adds Three New Wholesale Executives

Bay Equity Home Loans Receives Ginnie Mae Approval

Bay Equity Home Loans has announced that it is now approved by Ginnie Mae, the agency expands affordable housing opportunities nationwide. In addition to Ginnie Mae, Bay Equity also has the approval of the two other federal agencies operating in the secondary lending market—Fannie Mae (FNMA) and Freddie Mac (FHLMC). “Our hard work to secure these approvals will lead to a variety of positive developments for the company,” said Bay Equity President Brett McGovern. “Above all, we are striving to build a company that is built on a solid foundation and the quality of our loans and strong relationships with the Agencies are central to that end.” Full agency approval means increased liquidity, freedom from investor overlays and purchase turn times, and the ability to issue mortgagebacked security pools direct to Wall Street. Other Bay Equity agency-direct products include DU Refi Plus, Open Access and LP.

Fidelity National Financial to Acquire Lender Processing Services

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Fidelity National Financial Inc. (FNF) and Lender Processing Services Inc. (LPS) have announced the signing of a definitive agreement under which FNF will acquire all of the outstanding common stock of LPS for $33.25 per common share, for a total equity value of approximately $2.9 billion. Under the terms of the definitive agreement, FNF will pay 50 percent of the consideration for the LPS shares of common stock in cash and 50 percent in shares of FNF common stock, subject to adjustment as described below. The purchase price represents a 19 percent and 25 percent premium, respectively, to the prior 30day and 60-day average closing prices for LPS’ common stock through May 22, 2013, the last trading day before media reports regarding a potential transaction between FNF and LPS. At closing, FNF will combine its ServiceLink business with LPS in a new consolidated holding company and sell a 19 percent minority equity interest in the new consolidated holding company to funds affiliated with Thomas H. Lee Partners, L.P. for approximately $381 million in cash. FNF will retain an 81 percent ownership interest in the new consolidated holding company. “As the mortgage industry continues to face increasing regulation, participants in the industry are seeking out

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360 Mortgage Group has announced the hiring of three new wholesale account executives with a combined total of over 65 years of mortgage industry experience. Wayne Starn, Danny Tunnell, and Spencer Davis all join 360 Mortgage with successful track records in developing new business relationships and supporting high quality mortgage brokers. All three new account executives will report to Brad Smith, regional manager for the South East Region of the U.S. and will expand 360 Mortgage’s production team in Florida, North Carolina and Virginia. “These three new mortgage production professionals will have an immediate impact on expanding 360 Mortgage’s superior third-party lending platform in Florida, North Carolina, and Virginia,” said Mark Greco, president and founder of 360 Mortgage. “360 Mortgage’s model of service, speed, and sustainability, coupled with the introduction of new products, such as our “FreeMI” product, will enable their clients to operate more efficiently and profitably.” Davis joins 360 Mortgage with more than 40 years of mortgage industry experience and a proven ability in developing sales opportunities and providing exceptional service, primarily in the wholesale lending channel. Most recently, Davis was a wholesale account executive at U.S. Bank Home Mortgage, covering the state of Virginia. Starn comes to 360 Mortgage with 15 years of mortgage industry experience developing, managing, and servicing clients in the wholesale and retail lending channels. Tunnell joins 360 Mortgage with over 11 years of experience in wholesale mortgage lending. Most recently, Tunnell was an account executive at American Mortgage Network/Vertice, where he managed over 90 mortgage broker accounts and 10 account executives. “We are very excited to add these three sales professionals to our growing team and look forward to seeing the positive impact they will have with their customers in their respective markets,” said Al Crisanty, vice president of national wholesale production. “I’m really encouraged to see the number of talented sales professionals who are actively seeking to align with an organization like 360 because of our emphasis on providing an exceptional customer experience through the use of industry-leading technology and high-

ly-trained and dedicated sales and operational professionals.”


USA Cares Mortgage Heroes: Elisabeth Everett of W.J. Bradley Mortgage in Colorado Springs, Colo. By Joann Muncey

Though the weather in Colorado is often cooler than the rest of the country, it is home to some very warm-hearted friends. This month’s Mortgage Hero is Elisabeth Everett of W.J. Bradley Mortgage in Colorado Springs, Colo. Last year Ms. Everett completed the USA Cares Certified Military Housing Specialist Course and is now serving our veterans in another way, as a USA Cares volunteer. Elisabeth’s passion for serving the military began early in life, as she comes from a long line of veterans. Though she hasn’t donned the uniform, she serves as a military spouse. She and her husband of 10 years have been through “the normal military life” which includes countless moves and multiple deployments. “I have been working in the mortgage industry for more than eight years, and as a military spouse, I truly understand the unique and often complex decisions milElisabeth itary families deal with while deciding to buy or refiEverett nance a home,” said Elisabeth. When asked about a military family she assisted, Elisabeth shared:

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“Every military family has a different story and a unique family dynamic. It makes it difficult to narrow down specific cases because each customer impacts me. However, I am always honored to help, whether a military servicemember is buying their first home or retiring and buying a retirement home. I have clients who have very sharp deadlines and need to purchase a home immediately. Being able to offer quick mortgage turn times and understanding the VA loan process is essential. I have also worked with numerous borrowers who are deployed overseas. Taking the stress away and streamlining the process is very important. We work as hard as we can with family members and our service members. The last thing they should or need to stress over is mortgage paperwork.” This year marked a new venture for USA Cares as it has established five chapters nationwide, including one in Colorado. Elisabeth reached out to USA Cares and did all the heavy lifting to help get the Colorado Chapter off the ground which has now grown to 10 members. Their first effort to raise awareness about USA Cares will be with the USA Cares Certified Military Housing Specialist Course on June 20, 2013. “Serving our military is an honor,” said Elisabeth. “Making sure a servicemember and their family are in the best mortgage loan, that fits their specific family financial goals is so very important and one thing that I do not take lightly.” To find out how you can make the lives of our veterans a little easier, e-mail Elisabeth at elisabeth.everett@wjbradley.com. For more information about how you can get involved with USA Cares and its events, visit www.usacares.org. Be a Mortgage Hero! This recognition is free to Certified Military Housing Specialists. Take the course offered online by USA Cares and tell us how you are, “Helping those who defend our homes, preserve their own.” Joann Muncey is director of housing assistance at USA Cares, where she has worked since 2008. She may be reached by e-mail at joann@usacares.org.

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those strategic partners who offer quality, comprehensive solutions, a strong balance sheet and a commitment to innovation,” said Hugh Harris, president and CEO of LPS. “The combined LPS and FNF offer comprehensive technology and services to address many of the challenges facing the industry today and the best solutions to support future success.” The transaction is subject to approval by LPS and FNF stockholders, approvals from applicable federal and state regulators and satisfaction of other customary closing conditions. Closing of the transaction is currently expected to occur in the fourth quarter of 2013.

Total Mortgage Approved as a Ginnie Mae Issuer/Servicer

Total Mortgage Services LLC has been approved as a Ginnie Mae issuer for the GNMA I and II single-family mortgage-backed securities program. The approval allows Total Mortgage to pool and securitize FHA, VA, and USDA mortgages, and to retain Ginnie Mae mortgage servicing rights. Total Mortgage will also be able to expand its Ginnie Mae product offerings to better serve borrowers. “Total Mortgage is proud to have completed this rigorous approval process and now be included on the exclusive list of Ginnie Mae issuers,” said John Walsh, president of Total Mortgage. “This approval not only confirms the strength of our business and responsible lending model, but is another proof point of Total Mortgage’s best-in-class operational infrastructure.” In order to become a qualified Ginnie Mae issuer, Total Mortgage had to undergo a rigorous screening process to determine its suitability. The company needed to be an approved FHA mortgagee in good standing and possessing demonstrable experience and management capacity in underwriting, originating, and servicing mortgage loans. In addition, Total Mortgage needed a quality control (QC) plan in place for underwriting, originating, and servicing mortgage loans, as well as for secondary marketing. To maintain Ginnie Mae Issuer status, Total Mortgage must submit annual and quarterly financial reports to demonstrate its continued financial stability, as well as meet several other requirements.

MBA Partners With EverFi on Financial Literacy Initiatives Sponsored Editorial

The Mortgage Bankers Association (MBA) announced that the initial stage of its

partnership with EverFi to provide interactive, Web-based financial literacy education to more than 10,000 Americans across the United States as part of the Association’s Financial Fitness USA program. EverFi helps banks and other financial institutions drive innovation in financial literacy education through its learning platforms with their customers and employees or in local schools. “We are thrilled to partner with EverFi, a leader in technology-based education, to deliver financial literacy products to Americans across this country,” said MBA President and CEO David H. Stevens. “MBA and its members are constantly looking for new ways to invest in communities and serve our neighbors, and our partnership with EverFi is doing just that.” Four financial institutions—Arvest Bank, BrandMortgage, Sente Mortgage and US Bank—have already signed on to bring EverFi’s cutting-edge, newmedia technology to the communities they serve. Together, their programs will provide financial fitness courses to more than 10,000 adults and high school students. MBA and EverFi plan to announce additional participating financial institutions in the coming weeks. “Today’s consumers are digitally savvy and do almost everything online, from paying bills to finding a new home,” said EverFi CEO Tom Davidson. “EverFi learning platforms enable companies to educate consumers in a fun, engaging, new-media way—all while aligning their brand with an educational mission using robust analytics to measure the impact of their efforts.”

Quandis Announces Partnership With Bankers Asset Management Quandis Inc. has announced that Bankers Asset Management (BAM) is successfully utilizing its valuation system to streamline the company’s entire broker price opinion (BPO) process within BAM’s valuations division. Quandis’ solution ensures that agents are of high quality, BPO orders are submitted in a timely manner, and all BPO files are complete and accurate. Quandis’ valuation system is completely Web-based and enables outsourcers like BAM to effectively manage the placement, receipt, distribution, processing and automatic delivery of BPO orders. Approved agents are provided with secure logins to use a centralized Web portal to receive order requests, complete BPOs, submit them using a standardized form, and check status. BAM’s internal staff utilizes the application to automate their BPO workflow, complete scheduled tasks, and quickly and accurately


review, audit and fulfill orders for clients. “Quandis’ solution gives us complete control over our BPO process and provides us with visibility over agents working with us in the field, which has resulted in our ability to quickly, efficiently and cost effectively deliver accurate, well-documented BPOs to our clients that helps eliminate risk,” said Richard Johnston, senior vice president at BAM.

Indecomm Acquires Mortgage U and Rebrands as Indecomm-Mortgage U

DataQuick has announced the rebranding of Rels Title, which was acquired by DataQuick in September of 2012, to DataQuick Title.

Carrington Holding Company LLC has announced that it is renaming several of its businesses in an initiative designed to bring the entire Carrington family of companies under one brand umbrella, more effectively leverage the Carrington name and capitalize on the full continuum of services offered by the organization’s various business units. All management, personnel, ongoing business operations and principal executive offices will remain the same. As part of the rebranding activities, the company’s national residential real estate brokerage, Atlantic & Pacific Real Estate LLC will operate as Carrington Real Estate Services LLC, while Atlantic & Pacific Foreclosure Services LLC and Atlantic & Pacific Document Services LLC will operate as Carrington Foreclosure Services LLC and Carrington Document Services LLC respectively. Specialized debt resolution services provider Compass Resolution Services LLC will operate as Carrington Resolution Services LLC and White Van Real Estate Services LP, which offers a full range of inspection, property preservation, maintenance and repair services to lenders, servicers and asset managers, as well as institutional clients, private real estate investors and real estate agents, will operate as Carrington Home Solutions LP. Carrington is also renaming its business units currently housed under the Telsi brand. Telsi Real Estate Solutions LLC, and Telsi Escrow Inc. will become Carrington Title Services LLC, and Carrington Escrow Inc. The rebranded business units join several business units already operating under the Carrington brand, including Carrington Property Services LLC (property asset management); Carrington Mortgage Services LLC (loan origination and servicing); Carrington Capital Management LLC (investment managecontinued on page 42

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Rels Title Fully Integrates into DataQuick, Now Known as DataQuick Title

Carrington to Consolidate Several Businesses Under One Brand

NationalMortgageProfessional.com

Indecomm Global Services has acquired the assets of Mortgage U Inc. The acquisition will allow Indecomm to expand its learning and mortgage training offerings as well as its total compliance support and consulting. Indecomm’s new mortgage learning services will be branded as Indecomm-Mortgage U. “The acquisition of Mortgage U completes a process begun over two years ago when Indecomm and Mortgage U signed an alliance agreement,” said Rajan Nair, president, Financial Services, Indecomm Global Services. “Mortgage U and Indecomm share a common philosophy and dedication to clients across a wide spectrum. It is a virtuous cycle of technology and content, which will enhance Indecomm’s ability to serve our clients.” This acquisition comes at a propitious time in the industry as the surge of new regulations is redefining the mortgage business. Indecomm’s partnership with its clients will be enriched by the products and services that Mortgage U brings to Indecomm. This includes the Mortgage U Health Check, which enables companies to measure and monitor their policies and procedures, and its state-of-the-art policy and procedure manuals, which have become industry standards. Combining Indecomm’s proprietary Yellow Platter Learning Management System and Mortgage U’s extensive training content will provide lenders and servicers with an easily accessible source of off-the-shelf content and assessments. These courses cover all the functions within the origination channel of a lender: Processing, underwriting, closing, and post-closing audits. In addition, several off-the-shelf training courses covering key areas in servicing will be provided as part of the solution suite.

“The transition of Rels Title to DataQuick Title signifies the fulfillment of our promise for consistency and stability to associates and customers in local markets as well as the company nationwide,” said John Walsh, president of DataQuick. “DataQuick Title customers will continue to receive the same high-quality, personalized service they have come to expect from our organization.” DataQuick Title offers a national title and settlement capability with licenses in 36 states plus the District of Columbia through local title offices across 11 states. This integration enables access to DataQuick’s national property database of more than 125 million properties and more than 267 million property transactions.


2. Maximize your efficiency Part of that “perfect process” is to ensure that every task that needs doing is assigned and performed correctly and completely the first time. The goal is to do something once. This way you are not repeating tasks and you can spend more of your time generating business.

3. Maximize lender relationships 42

Are you getting all the leverage you can from your lender relationships? Do your lenders offer assistance with marketing, training or other business areas that can improve your business development and operations? If you need help—ask for it. The answer will tell you a lot about the partners you have.

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4. Maximize referral relationships Are you getting the most from your referral partners that you can? Are they participating in co-branded marketing? Are they inviting you into their existing seminars, webinars or passing along invitations to your events? Have you offered to perform loan option presentations for all prospects or clients? Have you offered to perform annual mortgage reviews for their clients or prospects? Are they re-posting/re-tweeting your social media content? Reengage your referral partners and find ways to be of service to each other.

5. Maximize your time management Are you getting as much done during your work days as possible? Studies clearly show that those who utilize “time-blocking” get far more accomplished than those who do not. Time blocking refers to the practice of segmenting your day into time blocks during which certain activities are performed and other tasks and distractions are minimized. Organize your work day to minimize non-business generating activities and maximize business generating activities. Most originators in the business today are successful professionals. But even successful professionals need a tune-up every now and then to make sure they are performing as efficiently and effectively as possible. Higher interest rates may lower production volume overall, but the best originators will actually grow their production as their superior level of service is clear to see by consumers and referral partners alike. Sharon Bitz is the National Head of wholesale lending for WCS Lending, one of the largest privately-held mortgage banks in the U.S. that has been recognized as an Inc. 5000 honoree for the fourth consecutive year. WCS, which is licensed in 49 states, has offices in Florida, New York, California, Michigan, Maryland, Delaware, Ohio and Hawaii and generates $2 billion-plus in loans annually. She may be reached by phone at (916) 996-1620.

NMLS #4260

www.wcswholesale.com

SPONSORED EDITORIAL

LoanSifter Integrates With Fannie Mae’s Desktop Underwriter LoanSifter Inc. has integrated with Fannie Mae’s Desktop Underwriter, used by lenders to make informed credit decisions on conventional conforming, non-conforming, and government loans. The integration allows LoanSifter users to obtain instant underwriting findings and credit reports immediately after receiving an online 1003 mortgage application from a borrower. LoanSifter users can also use Desktop Underwriter’s findings to discuss a borrower’s mortgage application and collect any supporting documents necessary to complete the application before moving ahead in the loan process. “With all the solutions we offer, we’re pleased to give our customers the added bonus of having seamless access to the industry’s top tool for underwriting loans,” LoanSifter President Bruce Backer said. “We know of no other technology provider that equals LoanSifter’s range of pricing tools and options. Now with instant underwriting recommendations from Desktop Underwriter, we’re giving lenders the speed, accuracy and results they need, the minute they need it—every time.” Besides instant underwriting findings, the integration with Fannie Mae’s Desktop Underwriter also gives lenders access to additional credit reporting services from within LoanSifter—with no extra steps or duplicate entries. When combined with LoanSifter’s other solutions—such as its consumer-facing eOriginations platform, its Best Execution Mortgage Insurance Pricing Platform and loan guidelines from 165 investors—LoanSifter users can provide borrowers with complete, fast, accurate approvals and pricing results in an instant.

LenderLive Network Certified as a Seller by Freddie Mac

LenderLive Network Inc. is now an approved Freddie Mac seller. This certification allows the company to deliver better loan product options and more flexibility to its community lender clients. LenderLive was approved as a Freddie Mac servicer in 2012. The number of community banks and credit unions originating or wanting to originate mortgages has grown as more people chose to bring their business to these local, communitybased lenders. To effectively meet that need without significantly increasing fixed costs yet providing real know-how

and quality mortgage customer service, many of these institutions have turned to knowledgeable, experienced mortgage business partners. “LenderLive has an established, 23year history of success in helping financial institutions build and grow their residential mortgage businesses, cost-effectively and efficiently,” said Rick Seehausen, president and CEO of LenderLive. “We provide value-added services not offered by most correspondent lenders, including the ability to provide private label fulfillment services to our clients. “In addition, we are committed to providing competitive rates and reduced turn times on loans purchased. This certification is another way for LenderLive to further our dedication to serving community banks and credit unions.”

Mortgage Professionals to Watch l First Guaranty Mortgage Corporation (FGMC) has appointed Amy Ellenburg as regional TPO manager, correspondent lending.

ELLENBURG

1. Maximize your strategic pipeline When overall volume declines, as it will when rates rise, the successful loan officer will quickly determine which loans have the greatest potential to fall out and those that will close. Energy will be refocused to maximize pullthrough, keeping in mind that purchases generally weather rate fluctuations. It is more imperative than ever that you close the highest possible percentage of the inquiries you receive and the loan applications you take. The key to this is to focus on the details … making sure that your “perfect process” is followed with each opportunity, which of course includes an appropriate prequalification. Mortgage origination is a repetitive business where consistent systems and processes produce consistently high closing ratios.

ment); and Carrington Investment Services LLC (registered broker-dealer).

l VirPack has announced that Cy Brinn will join its leadership team as chief operating officer.

BRINN

Nobody wanted it to happen … for mortgage rates to rise. When rates are stable and low, it is always easier to find plenty of willing borrowers for a refinance of an existing loan, or for the purchase of a home. However, the last several weeks have reminded us that rates will always be a variable outside of our control. Moreover, we must use this wake-up call to tune-up our business to ensure our success regardless of the prevailing interest rates. Here are five ways to tune-up your business:

continued from page 41

l FirstClose has hired Chip Caldwell to manage the company’s Southeastern U.S. territory.

CALDWELL

By Sharon Bitz

heard on the street

l 360 Mortgage Group LLC has named Jeff Slain as regional manager for the central region of the United States.

SLAIN

Tune Up to Capitalize in a Rising Rate Environment

l Residential Finance has appointed Rick Roque as vice president of business development. continued on page 63


new to market

continued from page 15

Freddie Mac Unveils New Loan Quality Advisor Tool

Fannie Mae Launches New Servicing Management Default Underwriter Tool

Fannie Mae has introduced its Servicing Management Default Underwriter (SMDU), a tool to help mortgage servicers work faster and more consistently with homeowners to prevent foreclosure. This technology, a counterpart to Fannie Mae’s Desktop Underwriter for mortgage originations, breaks new ground by evaluating a homeowner’s financial situation and determining what options are available to prevent foreclosure. “SMDU addresses several challenges the servicing industry has faced in recent years by eliminating a manual and resource-intensive process for servicers while improving accuracy and consistency,” said Leslie Peeler, SVP of Fannie Mae’s National Servicing Organization. “So far, adoption has been voluntary and we are pleased a number of leading technology providers and servicing partners have implemented SMDU. There are several large servicers working towards adoption this year. Servicers should anticipate that adoption will be required at some point in the near future. SMDU serves the interests of homeowners, servicers and taxpayers. The bottom line is that we want servicers to prevent as many foreclosures as possible and provide excellent service.” SMDU was developed and tested over the past three years to help ensure homeowners receive accurate and timely assistance. Servicers who adopt SMDU experience faster speed to implementation of Fannie Mae policy changes. This tool allows servicers to make real-time calls to Fannie Mae’s business rules as they collect information from homeowners. SMDU informs the servicer when the homeowner is eligible for streamlined processing for any loss mitigation option, which can elimicontinued on page 59

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n National Mortgage Professional Magazine n JUNE 2013

Freddie Mac has announced the launch of Loan Quality Advisor, a new online loan tool that gives lenders an automated way to identify credit, data and purchase eligibility issues before they deliver loans to Freddie Mac. By helping lenders spot and fix potential problems earlier in the loan manufacturing process, Loan Quality Advisor can make Freddie Mac’s purchase requirements more transparent and give lenders greater certainty in the loans they sell to Freddie Mac. Loan Quality Advisor also gives lenders Freddie Mac’s view of credit risk on mortgages that were not originated on Loan Prospector, Freddie Mac’s automated underwriting service. Loan Quality Advisor marks the launch of Freddie Mac’s new Greater Purchase Certainty initiative to help lenders improve loan quality while making

business with Freddie Mac more efficient and transparent for all Freddie Mac customers. “Loan Quality Advisor gives lenders fast, transparent feedback they can use to aid their loan manufacturing processes and take fuller advantage of Freddie Mac’s new representation and warranties framework,” said Mike Dawson, vice president of customer business services, Freddie Mac. By using Loan Quality Advisor, our customers can enjoy Greater Purchase Certainty when they do business with Freddie Mac. Giving lenders greater certainty and comprehensive support is at the center of Freddie Mac’s customer mission.”

NationalMortgageProfessional.com

(MI) companies’ full set of underwriting guidelines into its automated underwriting system (AUS). As a result, MI eligibility and pricing is automatically calculated and paired with the investor’s underwriting decision for a complete and accurate decision that is rendered instantly at the point-of-sale (POS). “One of the problems with calculating MI is that loan officers and underwriters are forced to individually visit each of the MI companies’ respective Web sites to determine eligibility and pricing, which is time consuming and error prone,” said David Colwell, vice president of corporate strategy at LendingQB. “Our proprietary AUS already houses the entire set of underwriting manuals for each investor. By implementing MI eligibility guidelines and rate cards into our decisioning engine, clients are able to quickly render an accurate decision with the click of a button—without having to bounce to other applications. This makes it a breeze to shop for the best MI products and prices.” LendingQB manages and ensures that all of the guidelines and rates are current in its AUS for MI companies Radian, MGIC, Essent and Genworth. When a decision is rendered, loan products are paired with eligible MI products along with accurate debt to income (DTI) calculations and thus correct pricing. At the POS where loan officers are talking to borrowers, they are able to easily and quickly view side-byside comparisons for all eligible products from each of the MI companies along with best execution pricing. Underwriters working in the back office are able to simply re-run the decision to ensure accuracy.


Eight Characteristics to Look for in an Effective Learning Management System

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By Harlow Spaan

T

he Consumer Financial Protection Bureau (CFPB) Exam Guide has created a need for mortgage companies, regardless of size, to provide compliance training for all of their staff. When evaluating effective compliance training solutions, set your focus on what is most important for your company. During our research process, we analyzed dozens of Learning Management Systems (LMS). Below are eight characteristics to look for in an effective learning management system.

1) Customizable reporting and records When considering a learning manage-

ment system, the most important factor is being able to find the exact information you’re looking for, quickly and efficiently. You know how you want your data, so make sure you can get it easily. The ideal system should have easy access to reporting information, the ability to view completion records in multiple categories, and be able to provide reports by department and course. This will allow you to easily see who is out of compliance. The biggest disadvantage to limited reporting is that you waste time and effort trying to work around an inflexible system in an effort to get to your data. Some systems only let you see completed and not completed requirements, not allowing searches by date, course, person, department, etc. Avoid systems where you cannot

easily search records or systems that have too much clutter. l Bottom line: Look for systems with customizable records and reporting and choose a flexible system that works for you, not an inflexible system that you’ll have to work around. You know how your company operates and how you need to access your information so look for a management system flexible enough to accommodate your needs.

2) Automated reminders and reports Employees will likely put off their compliance requirements as long as they can. Look for a system that automatically reminds employees of their requirements and keeps the administrator informed.

Look for a system that can manage and send multiple e-mail reminders for each course at various intervals and set definitions, such as Fair Lending to be completed within 90 days of employment date. This customizable system should apply to administrative functions as well. For example: An admin should be able to set up a report for all noncompliant employees to be emailed to the compliance officer on a weekly basis. l Bottom line: Look for systems with automated reminders and reports. You are looking for a system to streamline the compliance management process, and if you have to remind your employees yourself, the system isn’t making your job any easier. Choose a system that keeps your employees in line and keeps you in the loop.


3) Separate admin access You may not be the only one at your company who wants to review compliance records and reports. Look for a system that allows multiple administrator access. A good LMS allows management and admins of various levels to keep tabs on their staff. Some systems do not accommodate separate admin accounts for department heads, only providing one admin account or charging steeply for additional admins. Systems that limit multiple admin ability also limit your functionality and productivity. l Bottom line: Choose a system that accommodates your company and its structure. Don’t pay more than you have to keep the right people in the know.

time learning a new job function to add to your already busy schedule. Look for something that will get you up and running quickly and efficiently. What constitutes quick and efficient implementation? It isn’t huge dropdown lists, rows of boxes to check and un-check, a maze of links and a clunky user interface. You want a system that is intuitive at a glance. Look for a system that you can understand and use right off the starting line. l Bottom line: Be sure to look for an LMS that can easily fit into your business plans and provide a quick, effective solution. Ask for a demonstration to make sure you will be able to be up and running quickly.

7) Reasonable price 4) Pre-integrated content development and/or content management capabilities

5) Extended functionality

6) Quick, efficient implementation When looking for a LMS, consider the ease-of-use and the learning curve. If you’re looking for a third-party system, you don’t want to spend weeks of your

You wouldn’t expect a construction contractor to give you legal advice, so don’t settle for a learning management system from another industry claiming they can support you. Access to experts who can answer your questions quickly and accurately is a valuable tool, so look for a company that has tenure and experience. Watch for support resources and tools to help you with your implementation. l Bottom line: Relevant experience matters. You shouldn’t feel like you’re on your own after choosing a LMS, so look for a system that allows easy access to people knowledgeable about the mortgage industry.

What steps should be taken now to prepare? Look now to implement an effective compliance and training program. Get on top of what is required to comply with future examinations by the CFPB and make certain that the plan you have in place can provide you with the protection you need, not only for your business, but for your customers as well. Harlow Spaan is president of OnlineEd Inc., an online provider of education for licensed professionals since 1999. He received his JD from Willamette University College of Law and his career experience includes tax consulting, law practice, real estate brokerage, founder of a national home inspection franchise, and investment real estate. He may be reached by phone at (503) 670-9278 or email harlow@onlineed.com.

You are about to wire closing funds to the table, into the hands of a lawyer, title agent or escrow company employee you have never met before, but no worries because you have a Closing Protection Letter (CPL) right? Wrong. Take a good look at the language in this warranty letter. The majority of CPLs insure against two events: (1) Outright theft of the mortgage proceeds, and (2) Any other event that impairs the invalidity or unenforceability of the lien of the mortgage. But what happens when the closing agent engages in a conspiracy with others to commit fraud such as the borrower, seller, real estate agent or all three? Or, the agent is “willfully blind” ignoring fraud taking place in their presence, such as undisclosed intervening property flips, cash outside closing, straw buyers, identity theft, fake POAs? These issues can create a loan defect (triggering future repurchase) but not impair title because you can still foreclose. When you try and file a claim in these circumstances you may get one of these responses, taken from actual claims denial letters: “Although the borrower’s identity was stolen and she never signed the loan documents or mortgage at the closing, your lien remains enforceable.” No coverage! “We can find no evidence to support your claim that [XYZ] Title acted with fraud or dishonesty, or that it did anything in a manner giving rise to our obligations under the Closing Protection Letter.” No coverage! “The mere fact that there was fraud at the closing does not support a claim that {ABC} Title was implicit in any fraud.” No coverage! Title underwriters naturally approach CPL claims in the same manner as any insurance company. They are inclined to avoid paying through the letter’s coverage limitations. It is rare for a lender to recover 100 percent of its losses on defective loans in a CPL claim and/or resulting litigation. In addition, there is no uniform approach to vetting by underwriters. Some may conduct “one and done” background checks on title agency owners but they do not work with one another nor share information publicly. Rarely if ever do they examine the backgrounds of agency employees, let alone the independent closers, mobile notaries and attorneys who are delegated much of the actual closing table functions. It involves little or no ongoing monitoring discounting its effectiveness as an indicator of the clear and present danger of fraud losses the day you wire funds to the closing table. Random audits of trust accounts are a standard practice for some, but that’s like checking the barn after the horse has already run off. Lenders must initiate policies to verify settlement agents are legitimate, experienced and trustworthy, before the closing takes place. A reliable thirdparty can do the vetting for you. Today, despite early objections, third-party agent vetting firms are accepted as a necessary and reliable fraud tool. Lenders know the risk from escrow and settlement fraud is manageable through emerging technology and deterrence programs, and is a key component of overall loan quality assurance. Still not convinced that the CPL is not a reliable tool for deterring or insuring against fraud at a mortgage closing? I will leave you with an actual claims response from California: “Our title agent has no legal obligation to even report any fraud it may suspect at a closing, and we deny any responsibility for how funds were brought to the closing table, or to whom they were disbursed, as long as the closing instructions were followed.” No coverage! Andrew Liput is president and CEO of Secure Settlements Inc., a company he founded after nearly 10 years studying the problem of escrow and closing fraud and the uninsured risks associated with mortgage closing professionals. He may be reached by e-mail at aliput@securesettlements.com.

Sponsored Editorial

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n National Mortgage Professional Magazine n JUNE 2013

A good learning management system doesn’t just fix one problem; its functions can potentially be used for other areas. Assess the utility of the system you are considering and the different ways it can help your company. Many companies begin their evaluation of a LMS without considering how it may integrate with other areas of their business. Some may not even envision that there may be additional features to an effective system. It is important to understand how you intend to use the functionality of the system before choosing a LMS. Be sure to check with each LMS to find out what they offer with their system. Are there integrated compliance courses or policies and procedures that you can immediately integrate into your business? These are added benefits to consider. l Bottom line: Assess your “big picture” and choose a system that will help you achieve it on multiple levels.

8) Industry experts

By Andrew Liput

NationalMortgageProfessional.com

Throughout the course of operating your business, you may have created or plan to create some of your own educational content: policies and procedures, documents or e-learning courses. The ideal learning management system will allow you to integrate your custom content. Not every LMS has its own set of built-in authoring tools, so if you are planning on creating your own content, it is critical to define how this is to be done early in the selection process. This will allow you to find systems that inter-operate with your desired authoring tools. l Bottom line: Determine what you utilized or intend to utilize in creating your own custom content and make sure the learning management system will support that custom content.

Prices vary from system to system, just as much as the features, so consider the price and make sure you are getting the right value for your dollar. There is no standardized pricing model for how much a system should cost. You should expect to see a fairly wide array of bids when fielding a proposal. Remember to consider set-up costs and technical support as well. Always ask detailed questions about what you’re paying for, and if there are additional hidden costs. l Bottom line: Know your budget and what you can afford, and consider the utility of the system versus the cost.

Closing Protection Letters Are NOT Insurance Against Mortgage Fraud


“Ease your compliance worries by signing up with a vendor that has the dedicated staff and funds.”

Seven Ways to Close Loans Faster and Stay in Compliance By Johnna Leeds

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In today’s financial climate, it is becoming more evident by utilizing bundled services from a single provider lenders will be able to serve clients more effectively, profitably and will emerge as industry leaders. Why should you bundle services? First of all, one vendor equals fewer headaches. It standardizes operations and saves time. You don’t have to call, e-mail and wait for responses from multiple vendors. Secondly, it builds a stronger relationship. This makes for a more positive overall experience. Lastly, it helps you to stay in compliance. Compliance is always a top priority. Bundling services minimizes the risk of being out of compliance by having all your paperwork from one single source. Your chosen vendor should be constantly providing compliance information for your records.

Credit Buying a home can be one of the most stressful adventures a consumer can embark upon. From choosing the home, negotiating the price, obtaining

a mortgage loan, to securing ownership, there are many pitfalls that can derail the plan. Consumers often mistakenly believe that it is clean sailing after the mortgage loan process has been started. If the credit score it good, they are good to go, right? Wrong. Credit education can help streamline the loan process. The more that the consumer knows on the front end, the easier the process will be. When looking for a Credit Reporting Agency (CRA), there are a few things that you need to know. The Federal Fair Credit Reporting Act (FCRA) regulates the operation of consumer reporting agencies, and also affects you as a user of information. It regulates how a consumer’s information may be used, and restricts who has access to this sensitive information. In order to be in compliance, one needs to have a thorough understanding of the FCRA. One must also know their state laws as certain states have passed restrictions in addition to the FCRA. Make sure to be familiar with any additional laws in your

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state, and follow these rules carefully to maintain full FCRA compliance.

Debt monitoring There are negative actions that can be taken even after the mortgage loan has been applied for that can decrease or annihilate the chances of getting that loan closed. The Fannie Mae Loan Quality Initiative (LQI) is meant to keep the amount of loan buy-back low by verifying the quality of a purchaser before it closes. Debt monitoring allows loan officers to monitor their borrowers during the “Quiet” period between when the loan application is made and when it closes. The borrower is monitored on a daily basis and if there is a change in their credit history, the loan officer is notified within 24 hours. Accessing the tradeline changes by pulling a soft pull credit report is another method of satisfying the Fannie Mae LQI. Soft pulls—as they are known in the industry because they do not have an impact on a person’s credit score—instantly accesses any credit history changes between origination and closing.

Automated appraisal platforms Don’t risk the stiff penalties being imposed for non-compliance. Automated appraisal ordering platforms are a great way to maintain compliance for Uniform Collateral Data Portal (UCDP) and the Dodd-Frank Act. Look for a vendor that allows you to use your own appraisal vendors and allows you to maintain control of the process. The best product will be one that maintains appraiser rotation with total transparency, logs all communication between the lender and appraiser, and allows the appraisal to be uploaded straight to the UCDP. A certificate of compliance or some other form of written documentation should be provided with every appraisal that is generated through the system. Look for an automated appraisal platform that lets you choose if you want to override service areas for all of the appraisers in your panel, or only certain appraisers. You have the option

to have a “mixed” panel: A panel where you have specified service areas for certain appraisers, but kept the appraiserentered service areas for others. When you have controlled the service areas and qualifications of appraisers in your panel, the areas that you have entered will override the appraiser’s settings in the appraiser profile. This will give you more control over your order processes to make sure the appraiser with the right expertise gets the order.

Fraud prevention Regulators and secondary market investors are requiring originators to validate more of the borrower and property data using independent thirdparty sources to help combat this trend. With the changing regulations loan officers must be constantly aware of growing fraud trends. Approximately 60 percent of mortgage fraud includes ID discrepancies. It is a good idea to implement an automated investigation of the borrower’s identity into your best practices. Utilize a system that instantly searches millions of databases and validates the person’s name is actually connected to the Social Security Number, address, phone number, date of birth, etc. This will allow a lender to easily catch and circumvent high-risk identity mortgage fraud in close to nine out of 10 instances.

Verification services Tax return verifications are a great way to combat income fraud. Look for an easy to order platform, from which you can order directly. Your vendor should review the documents before submitting to ensure that the IRS does not reject the order. The IRS will still charge you a processing fee, even if they reject the order. Social Security verifications prove that the person across the desk from you really is who they say that they are. Easy-to-read reports add that extra layer of protection to make sure that you have covered all your bases. Mortgage verifications will verify mortgage payments, payment history and the name of the creditor.


Employment verification checks dates of employment, salary and the position held. Verification of deposit will verify funds in a checking or savings account and the current balance.

Flood certifications Over the last several years, FEMA has made 83,000-plus flood map panel changes affecting 92 percent of the U.S. population. This means millions of properties may have a flood status change. According to the FDIC Annual report for 2011, 80 percent of the fines issued by the FDIC in 2011 were flood related. The Biggert-Waters Flood Insurance Reform and

Modernization Act passed in June 29, 2012 included an increase for penalties against lenders from $350 to $2,000 for each flood violation and eliminated the annual cap on flood violation fines. Ease your compliance worries by signing up with a vendor that has the dedicated staff and funds. Make sure that your vendor is partnered with a reputable flood certification vendor. Flood Certification has improved greatly with regards to technology. Vendors no longer are pulling actual maps to locate specific properties. Everything has been digitized, so information can be gained within seconds. Ninety-five percent of flood cer-

tifications can come back within just a few seconds. Your flood certification portfolio should have the latest flood data throughout the entire life of the loan and will also make sure you receive any revised flood certifications within 60 days of the new maps becoming effective so you can take the appropriate next steps as quickly as possible. With new regulations being implemented daily, there are more requirements than ever to get a loan approved. Bundled services are the way of the future. They reduce turnaround time, improve productivity, improve the bottom line and keep you

in compliance. By utilizing bundled services from a single provider, Lenders can set themselves apart in a highly competitive market. Johnna Leeds is vice president of compliance for Data Facts Inc. She has been with Data Facts since 1996. She is a member of National Association of Professional Background Screeners (NAPBS), and currently serves on the NAPBS Best Practices Group, Litigation Avoidance, Criminal Records Reporting Practices and Breach Prevention committees. She may be reached by phone at (901) 685-7599 or e-mail johnna@datafacts.com.

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“Non-compliance can create a perfect storm of increased governance, substantial fines, loss of public trust and decreased overall revenue.”

Regulations, Breaches and eDiscovery: Drilling Into Compliance Pains By Jim McGann

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Compliance is like a little black dot on your tooth. You see it, you ignore it … it starts to get sore, and still ignore it. It cracks or causes unbearable pain, and eventually it’s time for a root canal. That time- and cost-intensive root canal could have easily been avoided with a one-step visit to the dentist for a little filling, or even better, regular checkups or “audits” of your mouth. However, most of us have irrational fears of the dentist’s chair and all of his tiny instruments–and much like dealing with compliance regulations– it’s all too often something we put off until it’s too late. Instead of seeing all of those sharp metal dental instruments, the financial industry sees stacks of regulations, data breaches snagging headlines and a growing legal presence. Balancing, deciphering and setting policies to manage the new compliance-driven environment are no small feats. But as pain-staking and sometimes costly as proactive compliance management can be, it pales in comparison to the costs of non-compliance. Non-compliance can create a perfect storm of increased governance, substantial fines, loss of public trust and decreased overall revenue. To mitigate these risks, more leading financial institutions are using technology to reduce compliance risks surrounding e-mails and files and better organize and manage data. These technology-based data solutions allow policies to be set around data retention to mitigate regulatory violations, data breaches and eDiscovery costs. “Proactive information management is critical,” said Bruce Radke, head of the records management, e-

discovery and data privacy practice group of international law firm Vedder Price. “Our experience has indicated that the most common challenges for mortgage lenders and brokers include: Managing loans your company has bought or sold, including integrating recent loans into current servicing processes, limiting and controlling access to documents and ensuring sufficient chain of custody and authentication of records. As a result, lenders are conducting a gap assessment on their information governance practices to determine potential areas of non-compliance and associated magnitude and probability of risk and then prioritize tasks to address those gaps.”

Data breaches and you Many of the new regulations govern client communications and documents: What is contained in them, how they are defined and how long they are maintained. In order to comply, there needs to be a set policy. These policies are easier to establish because they are all dictated by law. In addition, the numerous regulations requiring disclosures, NMLS numbers and other communications can be locked in using either internal software or a mortgage-specific marketing vendor. The ability for originators to mass e-mail can even be eliminated or restricted to certain marketing content, removing much of the regulatory risk. What then becomes mission-critical is Personally Identifiable Information (PII) located within these e-mails. A Social Security or bank account number left off an application and quickly e-mailed from applicant to originator creates a violation. If policies aren’t created to encrypt or remove those e-

mails from the system, institutions are increasing their chances of being susceptible to data risks. “Customers are proving highly sensitive financial information to their lenders and mortgage brokers, that trust will likely be irreparably damaged if that information is compromised either thru a malicious hacking or even an incident caused by an innocent mistake,” Radke said. Data breaches are hard to manage because few know where the sensitive information lies until it has been exposed. In addition, hackers are getting savvier creating a sharp rise in unwanted access. Worldwide, 2,644 breaches were reported in 2012, more than double the 2011 number, according to the non-profit Online Trust Alliance. Financial institutions by far have not enacted the technology capable of locating this information and proactively managing it. A number of data profiling products exist to uncover PII on desktops, networks servers and other places within the company so they can be properly addressed according to policy. “When this information is aggregated, it poses substantial security risks, and yet the precautions that should accompany these data treasure troves have not really kept pace with the level of information collected,” class action attorney Joseph Siprut told the Chicago Tribune.

Regulations and disposition The Consumer Financial Protection Bureau (CFPB) recently rolled out another set of rules surrounding who can contact homeowners and when, and gives buyers much more protection. Along with a slew of other regulations, compliance and non-compliance to these laws can be tracked through e-mail communication. Email communication creates a record of what your company did. While that oversight and accountability is key, once these communications lose context and business value and are not part of a required reten-

tion period, they become a liability. Emails sent by former employees or that are simply old and unaccessed cannot be properly interpreted. Tongue-in-cheek gestures sent among colleagues or old modification e-mails can easily be misunderstood and published. While banks primarily worry about the communications being sent today, communications from five, 10 or more years ago can cause an even greater pain are they are often not in compliance with today’s rule and contain language that is no longer permissible. If these aged e-mails were to re-circulate, the risks would be significant. Policies must be set to understand, organize and make decisions on its retention and location. “It is better to understand what information you have, where it is located and identify what sensitive data can be disposed of without adversely affecting business operations and still meet regulatory compliance obligations,” Radke said.

eDiscovery preparation Whether the result of a data breach, foreclosure or regulatory violation, lawsuits are part of every industry. While there is no way to avoid these legal proceedings, there are ways to proactively prepare for the greatest outcome. All too often, series of e-mails and files are put on legal hold, but only a small fraction of them are actually are of importance. Over time, the important documents get buried within the archives and either requires large legal bills to uncover or cannot be found at all. Not producing requested evidence does not bode well for any case. “There is a growing trend where homeowners are using banks’ inadequate recordkeeping practices as a defense in foreclosure actions,” Radke said. “Due to those shortfalls, lenders have been unable to produce the mortgage note—and other critical documentation that proves ownership of the debt, resulting in lenders being unable to establish the legal chain of


title proving their right to foreclose.� Radke continued, “In some instances for lenders, that means no note, no foreclosure. For example, a federal bankruptcy judge dismissed a lender’s action to enforce a New Jersey mortgage because the note had been ‘misplaced, lost or destroyed,’ but then said it had been found and the lender and the broker could not ‘explain the inconsistencies.� An increasing amount of legal and compliance professionals are recommending, value-based archiving. Only 1/10 of the size of traditional archives, value-based systems identify what has value and should be kept

points and looming risks to any financial institution are data breaches, regulatory legislation and litigation. When non-compliance is taken out of that mixture and replaced with automated, compliant proactive steps to safeguard policies enacted by CIOs, CCOs and legal teams, risks are significantly mitigated. At different levels of the organization, communications and sensitive documents can be audited, disposition decided and what needs to be maintained can be put on to legal hold for preservation. These steps secure consumer information, keep data organImplementing policies Arguably, the three biggest pain ized and accessible, and give institufor long term preservation. This eliminates the save-everything strategy and streamlines the archiving process. Information management software can even automatically identify new content and move it to the repository for long-term storage and legal hold. Retention periods can be assigned in order to ensure the content is not preserved beyond any legal or regulatory requirements and only archive the data required for legal and compliance and not everything.

tions the option to not save documents longer than required. A growing number of leading institutions are turning to unstructured data profiling technology to get a better understanding of what risks and compliance violations they are storing and decide disposition on them. This proactive compliance approach allows institutions to avoid costly procedures down the road. Jim McGann is vice president of Index Engines, a provider of enterprise information management and archiving solutions. He may be reached by e-mail at jim.mcgann@indexengines.com. 49

Markets may be volatile, but there’s one thing you can always count on, the total commitment of our Mor tgage Team. Loyalty, continuity of ser vice and our dedication to protecting the integrity of our relationships are just a few of the things that set us apar t. Ridgewood understands the needs of its communities              

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“While lenders may not know the exact requirements of the revised regulations the CFPB will tackle, there is no doubt the regulatory burden will only increase.”

Building a Compliance Checklist By Scott K. Stucky

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As the third anniversary of the Wall Street Reform and Consumer Protection Act, aka the Dodd-Frank Act, draws near, lenders and financial institutions are finally getting a clear picture of the total impact of the law. Dodd-Frank dictates 398 rules that must be passed impacting banking, mortgage lending and other financial and non-financial services. According to New York, N.Y.-based law firm Davis Polk& Wardwell’s monthly Dodd-Frank Progress Report, at the end of April, two-thirds of the required rules had either been finalized or proposed. It’s no secret that a great number of those rules affect the mortgage industry specifically. The impact? Everything from reformed disclosure rules to quality standards to new departments, such as the Consumer Financial Protection Bureau (CFPB) tasked with overseeing

and regulating all financial institutions. This year has seen more movement to clarify and finalize the rules impacting the mortgage industry than in the previous two. With January’s announcement of eight major rulings, the table was set for 2014 to become the year when all of the anticipated changes must be implemented. This sets up a dual need. First, lenders must understand what the laws are pending implementation. Second, they must appropriately prepare for CFPB examinations and complying with the laws.

January 10, 2014: Round one of the year of new rules In January of this year, the CFPB finalized seven new rules that will go live on Jan. 10, 2014. With the deadline less than six months away, lenders must act

now to ensure compliance with the rules. In short, the seven rules can be grouped into three categories: Quality of Underwriting, Servicing Standards and Appraisal Standards.

Quality of Underwriting Three rules passed in January apply specifically to the underwriting and origination process. l Quality Mortgage (QM) and Ability-toRepay (ATR): Outlines eight criteria for determining whether a borrower has the ability to repay a loan and outlines a safe harbor for loans that meet strict QM standards. l High-Cost Mortgage (HCM): This rules expands coverage to money transactions and home equity lines of credit (HELOC) and lowers the threshold for coverage as a HCM. The rule also adds new counseling requirements. l Mortgage Loan Officer (MLO) Compensation and Qualification: Sets limits on compensation and establishes additional qualifications for MLOs. Additional arbitration prohibitions also went into effect in June.

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Servicing Standards Two servicing rulings may provide a hint at the reforms coming to the Truthin-Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) reforms coming to the origination market later this year. l New Servicing Standards–TILA: Servicers must provide additional ARM adjustment notices and provide monthly billing statements in a certain format. l New Servicing Standards–RESPA: Servicers must inform borrowers if the loan will be serviced by another company at the closing table, and servicers must build out more complete processes for tacking and keeping records of borrower communications.

Appraisal Requirements The final two rules going into effect next January apply to appraisal requirements. l Appraisal Requirements for HigherPriced Mortgage Loans: Outlines requirements for HPM loans, including interior inspections and validating that the borrower received the appraisal. l Appraisal Disclosure: Spells out that in any loan, the appraisal must be provided to the borrower at least three days before closing.

Year of new rules round two: Still pending final rulings In addition to the seven rules outlined above, there are a number of major regulations still awaiting a final ruling that are expected to be implemented in 2014. While this list is not a complete overview of reforms expected in the next year, these are the three with the most potential to significantly impact lenders. l TILA/RESPA Integrated Disclosures: This ruling will require new disclosure documents, including a loan estimate given within three days of application and a closing disclosure document delivered at least three prior to closing. A final ruling and document forms are expected in


“It would have been cheaper fixing the problem early on, if we had been paying attention”

September, with at least a year before going live. l Qualified Residential Mortgage (QRM): Similar to the QM rule outlined above, QRM specifies the safe harbor that exempts lenders from retaining at least five percent of the loan amount in reserve. While the rule is expected to sync with QM, nothing is final until a ruling is made sometime mid-year. l Home Mortgage Disclosure Act (HMDA) Reform: The CFPB will be making substantial changes to the content and format of HMDA reports, including new data fields to collect and report. There is no estimated date for either a ruling or implementation.

Preparing for CFPB compliance

By Eric Weinstein I have been in the mortgage business for more than 20 years and am a bit of myrmecologist in my spare time. A myrmecologist is someone who studies ants, if you did not know. One day, I read about the famous myrmecologist, Ernsto Compli, who had discovered a new breed of ant. I had to have an ant farm of them for my office. I must tell you about the time they got loose and almost destroyed my business. First, they got into my paperwork. They ate certain words on the template. After that, all my documentation had Compli-ants problems. Then, I got a call from my local regulator who told me he heard some of my paperwork had compliance problems. I said, “You’re not kidding me, ALL my paperwork has Compli-ants problems!” He said, “I will be right over, it will be fine.” He was not kidding, once he was done, I had to pay a whopping fine. Compli-ants problems are not just making sure your paperwork is in order. Once loose, Compli-ants problems can quickly spread to other systems. Certain procedures set in place often breakdown, and you don’t know they aren’t working properly it is too late. Let’s take the Good Faith Estimate (GFE) as an example.

We had automated our GFE on our loan origination software (LOS). When the tax rate changed in our jurisdiction, no one was monitoring the system while those pesky Compli-ants started infesting it. Only when we started paying “tolerance cures” did we notice the problem. It would have been cheaper fixing the problem early on, if we had been paying attention. Now that all my Compli-ants problems are over, I have joined the Williamsburg Ant Society Protectorate. I have started advertising to our membership. Our motto is “Come get a mortgage if you are a WASP.” What could go wrong? Eric Weinstein worked in banking, on the commercial real estate side until 1991, when he fell in love with residential lending. In 1995, he started a small mortgage company in his basement called Carteret Mortgage Corporation, which in 2003, grew to one of the largest mortgage broker companies in the United States. These days, Eric is semi-retired, doing mortgages by referral only. As he likes to put it, “He is either saving people money per month or helping them buy a new home. What a great job!” He may be reached by phone at (703) 505-8692 or email eweinstein4u@gmail.com.

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Scott K. Stucky is chief operating officer for DocuTech Corporation, a provider of mortgage loan documents, compliance services and technology solutions for the mortgage industry. He may be reached by e-mail at scotts@docutechcorp.com or call (208) 535-9744.

Compli-Ants Problems

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While lenders may not know the exact requirements of the revised regulations the CFPB will tackle, there is no doubt the regulatory burden will only increase. The first step lenders are taking to control their workflow is getting involved in the rule-making process. Through the joint effort of associations such as the Mortgage Bankers Association (MBA), the American Bankers Association (ABA) and the Independent Community Bankers of America (ICBA), financial institutions are working with lawmakers and agency staff to provide comment and feedback on the proposed regulations. The next step is educating consumers on the impact the upcoming rules, such as QM, might have on the marketplace. While the QM will define a type of loan that is not likely to default, the side effect will be that few borrowers will be able to meet the high standards. While any mortgage lender is able to provide products outside of QRM, only those institutions with large reserves, such as the largest depository banks, will initially be able to retain the necessary capital needed to offer other loan products. This will have the dual effect of limiting consumer choices to a handful of lenders and requiring higher interest payments to offset the higher

default risk. Furthermore, many small and medium sized lenders won’t be able to offer these products, accelerating the growth of the “Too Big to Fail” institutions and further limiting competition and consumer choice. Lenders will also seek to counter the costs of implementing new regulatory requirements. In some cases, raising the cost to consumers to close loans will offset those costs. Others will utilize automation to eliminate as much waste as possible from the loan workflow. For many tasks in the mortgage process, automation is the best way to increase speed without sacrificing quality or cost. For example, lenders can supplement their internal legal staff by automating the generation, printing and fulfillment of loan documents and disclosures. Today’s top systems have checks in place that flag loans that fall outside of the defined legal regulations, preventing bad paperwork from making it to the closing table. If a faulty loan made it past closing, it could cost the lender thousands of dollars in potential buybacks from the investors, fines from regulatory agencies or potential lawsuits from consumers. Automated document systems can take the burden of manually updating forms every time a regulation or rule is changed. This takes the guesswork out of generating the correct documents or disclosures. These systems can also create the needed reports for regulatory exams. The CFPB at its best can be a positive force in the industry–protecting consumers while streamlining regulations that have often come from many different agencies. But the coming year will truly tell the tale of whether lenders are able to adequately prepare for the wave of new rules without negatively impacting the ability of borrowers to purchase homes.


“It is incumbent upon portfolio managers and their designated compliance person that they remain on top of changes that are still being implemented.”

Compliance Considerations for Managers of Non-Securitized Consumer Assets By James Dooley

Introduction

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Post-financial crisis regulatory changes have impacted the financial services industry in various and significant ways. But perhaps the sectors most affected are those that are consumer facing. Mortgage originators and servicers took much of the blame during the financial crisis as loan defaults sky-

rocketed. The backlash from regulators and politicians was immediate and material with a flood of new regulations and guidelines. The Dodd-Frank Wall Street Reform and Consumer Protection Act, intended to protect consumers and the stability of the financial system, is highly complex with multiple key rules still not finalized. While many

would agree that the Act is only partially effective, the Dodd-Frank Act did lead to the creation of the Consumer Financial Protection Bureau (CFPB). The CFPB has been highly focused on origination and servicing issues that affect consumers across all spectrums of lending from credit cards and student loans to mortgage servicers and debt collectors and payday lenders. To further complicate matters, there have been a number of settlements with Attorneys General and regulators over origination and servicing practices. While much of this activity has been concentrated on residential mortgage loans at the largest banks and servicers, there have also been significant allegations or settlements with respect to other types of consumer loans and with respect to smaller financial institutions. Portfolio managers tasked with managing non-securitized consumer assets often rely on third party service providers. This is often the case for non-depositories like hedge funds, private equity funds and REITs but may also hold true for those working in a depository setting. While it might be tempting to leave these complicated compliance matters to the service providers, a developing standard ingrained in the Dodd-Frank Act, as well as in other regulatory settlements and pronouncements, holds a financial institution accountable for its service providers’ actions. While it is unclear what liability that would legally create for a non-depository, a negative Office of the Comptroller of the Currency (OCC) or CFPB review of a loan servicer, for example, could have multiple negative consequences such as the servicer becoming distracted by on-going regulatory review issues, negative public relations issues and, in a worst case scenario, investor redemption calls to withdraw funds. Portfolio management teams at private equity firms, hedge funds, and REITs seeking to invest in residential mortgage loans prefer to focus on maximizing their total return through smart acquisitions and positioning portfolios for different market conditions and have less time to spend on

compliance monitoring. Hence these entities often employ specialized advisory firms offering cost-effective loan servicing oversight and hands-on asset management services. These services include the creation and implementation of policies and procedures and ongoing oversight of asset due diligence and loan servicing. Banks’ residential mortgage loan servicing operations seeking cost-effective compliant servicing solutions also use specialized advisors to assist in monitoring and properly documenting compliance with evolving new rules.

The costs of non-compliance The costs of non-compliance can be quite severe especially when you consider that the actions of your thirdparty service providers can have material negative consequences for your operations. The most obvious cost of non-compliance at the service provider level is the expenses involved in a settlement with regulators which often involve a combination of borrower relief, fines payable to the regulators and legal costs. In large servicing organizations, designing, implementing and monitoring real time compliance processes to handle evolving and complex new rules can be very challenging and prone to unintended violations. One of the most highly publicized settlements was the $25 billion National Mortgage Settlement over alleged abusive foreclosure practices by the servicing divisions of the nation’s five largest banks. Unfortunately, a recent survey of mortgage counselors in California alleges that the largest banks could still be in violation of the main terms of the National Mortgage Settlement, such as dual tracking issues or failing to provide borrowers with a Single Point of Contact (SPOC), and has led to calls for an investigation. New York Attorney General Eric Schneiderman has also announced his intention to sue two of the largest banks for purportedly violating the terms of the National Mortgage Settlement. Separately, Capital One


Establishing an effective servicing oversight program requires a commitment from senior management and the selection of individual(s) responsible for defining and implementing the program. Hopefully, you are not starting from scratch, but if you are then consider hiring a compliance manager immediately. Unfortunately, compliance managers are in high demand right now so you can’t expect to do this on the cheap. If your firm is a small hedge fund or

should use some sort of technology solution to assist them with reviewing the portfolio for missing, incomplete or illogical data points that could indicate exceptions to policies. A fourth step is to conduct regular quality control reviews, which may be based on a simple random selection of loans or on exception queries. The reviews should encompass a deep dive into a file and should be conducted on a regular basis. It is prudent that work product be saved in an easily accessible but secure internal site. Any exceptions should be communicated to the servicer and the exception should either be cured or in some cases the policy amended. Lastly, there should be at a minimum an annual on-site review of loan servicers and other third parties to ensure that they are providing a compliant type of service. In particular, there should be a focus on regulatory hot issues such as anti-money laundering and how consumers interact with the servicer especially with regard to consumer complaints. Other critical areas to understand are how the servicer manages their training programs and how they have addressed any negative findings from state regulator and CFPB audits. While there is an obvious cost in implementing a program like this, they pale in comparison to the potential legal costs and penalties in not doing so. For the foreseeable future, portfolio managers who manage non-securitized consumer assets have no choice but to implement a higher level of

oversight over third party service providers that are consumer facing.

Staying on top of changes Many aspects of the Dodd-Frank Act have yet to be interpreted especially with respect to implementation, and the CFPB expects to continue working on rule implementation through the end of 2013. It is incumbent upon portfolio managers and their designated compliance person that they remain on top of changes that are still being implemented. There are a number of good resources that can help one keep abreast of changes. First, you can sign up for e-mail updates from a number of Web sites that specialize in covering the mortgage industry. Several attorney firms also maintain blogs and conduct Webinars on a regular basis. You can also find good information on the Websites of the GSEs and various regulators including the CFPB, the OCC and the Federal Reserve. Lastly, there are a number of vendors, such as AllRegs, that will provide updates on regulatory changes and information on GSE origination and servicing standards. James Dooley is managing director at NewOak Capital Advisor LLC. At NewOak James is the head of loan asset management and servicing advisory. James a has more than 17 years of experience trading and managing distressed residential mortgage loans, REO and other distressed consumer assets. He may be reached by phone at (212) 209-0850.

Correction … In the May 2013 issue of National Mortgage Professional Magazine on page 28, the incorrect photo of Erik Janeczko appeared with the article “The Three Cs of Mortgage Success.” Erik is head coach/speaker with Maximum Acceleration, and is also president of the Missouri Association of Mortgage Professionals (MAMP), a state affiliate of NAMB—The Association of Mortgage Professionals. He may be reached by phone at (573) 298-4237, ext. 101 or e-mail erik@maccelcoach.com. The correct photo of Erik appears to the left.

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Establishing a servicing oversight program

servicer, look to expand the role of your general counsel if possible. It’s also probably not a bad idea to interview and possibly engage an outside consultant or attorney firm with compliance experience. In any case, there needs to be a clear commitment from management to define a program and the individual(s) responsible for implementing the program. A second important step is to draft a set of policies and procedures that will provide guidance for due diligence vendors and servicers that you use in the acquisition and servicing of loans that you acquire and manage. The policies don’t have to be 800-page gorillas, but they need to be more than a one pager as well. The policies are meant to give guidance to your servicer and should speak to acceptable loss mitigation programs and how those programs should work, as well as to related operational issues. For example, my company will customize a standard set of policies for that client. With respect to loss mitigation, our policies typically include a loss mitigation overview and individual policies covering modifications and repayment plans, short sales, deeds-inlieu, bankruptcy, foreclosure, real estate-owned (REO) and charge-offs. With respect to operational issues, our policies include an advance policy (for escrow and corporate advances), property valuations, inspections and property preservation, escrow administration, compliance with various regulations that affect servicing (such as FDCPA, TILA and RESPA), borrower complaints and quality control reviews. Without this necessary guidance, your servicers will rely on generally acceptable standards which standards may not address your needs and worse may create a liability for you if those standards turn out to be no longer acceptable after regulatory scrutiny. A third important step is to work with your service providers to ensure that the policies are implemented. While regular face-to-face meetings are always a good idea, asset managers

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recently agreed to a $210 million settlement for allegations of deceptive marketing practices made by their third-party marketing contractors which the bank allegedly failed to monitor adequately. Of course, given all the regulatory compliance challenges and regulatory capital requirements facing the largest bank servicers, there is not likely to be a good match for the largest banks to service portfolios for non-depositories. But other servicing operations aren’t getting a pass just because they aren’t the largest and most publicly visible. The CFPB has stated its intent to review all servicers regardless of size and to pursue violators rigorously where consumers have been harmed. So even if your servicer is a smaller operation focused on a special servicing approach to resolving consumer delinquencies, you can expect that they will be reviewed closely for, among other things, issues involving fair debt collection, fair servicing standards, modifications, dual tracking and their handling of consumer complaints. So private equity firms, hedge funds and REITs without their own servicing operation would be wise to hire third-party servicers who are compliant with your program and with all legal and regulatory requirements. These servicing operations should be able to monitor their compliance and should be open to an independent oversight review from an unaffiliated third-party.


“So what are CFPB’s expectations and what can you do to not only pass the examination, but also leap frog to competitive advantage in domain of ‘customer experience?’”

Changing the Paradigm From “Regulatory Burden” to “Competitive Advantage” The top three regulatory compliance lessons learned in 2013 By Mark H. Fleming, CMB

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Starting in January 2014, the Consumer Financial Protection Bureau (CFPB) will formally implement a variety of farreaching rules that carry substantial non-compliance risks for both servicers and originators. It is important to

understand the unprecedented scope of CFPB’s authority in terms of the institutions it oversees and the products it covers. The Dodd-Frank Act of 2010 gave the CFPB authority to supervise both depository institutions and non-

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depository financial institutions that were previously only lightly regulated (e.g. mortgage companies, payday lenders and student lenders). The covered products include, but are not limited to, mortgages, credit cards, student loans, vehicle loans and consumer loans. As the clock ticks towards the deadline, mortgage finance firms are faced with substantial implementation costs that are drawing on valuable resources and threatening to squeeze profitability. For instance, servicers are making process and systems changes to generate a written statement of foreclosure alternatives as a first response to missed payments. Moreover, “dual tracking,” whereby banks simultaneously initiate foreclosure and engage in loan modification, will be eliminated, and an account will need to be at least 120 days delinquent before foreclosure proceedings can begin. Other risk factors and areas of CFPB regulatory focus will likely include customer complaints, servicing and collection practices and advertising and disclosure practices. At a products level, CFPB will focus on products with relatively high areas of fee income as well as products and services targeted to less financially sophisticated customers. The review will extend beyond internal operations to cover oversight of third parties performing marketing, collection, or other servicing activities. CFPB may also conduct transaction testing in high-risk areas, including customer interviews. Now that the implementation push is in full swing, what are some of the early lessons learned from leading financial services firms at the front lines of this massive change effort?

1. Use the regulatory compliance change effort to become more customer centric The impact of the CFPB will be pervasive throughout organizations, from governance through processing and operations, and will require a structured approach to manage and coordinate. However, treating the requirements of

the CFPB simply as a compliance issue will drive up operating cost in the medium term and may reduce revenue opportunities. Building on the regulatory change effort to become more customer-centric can actually provide a long-term competitive advantage. While the core of the CFPB agenda is driven by the principles of transparency and customer fairness, treating customers fairly and becoming customer centric makes business sense beyond compliance.

2. Utilize customer complaints to reengineer processes and improve the customer experience The Dodd-Frank Act provides the CFPB with broad authority to take any action to prevent unfair, deceptive, or abusive acts or practices (UDAAP), whether those actions are unintentional or otherwise. Therefore complaint management is a prime target for CFPB examinations. Dodd-Frank also adds a new “abusive” standard which appears to provide regulators with broad authority to intervene where a product or service takes “unreasonable advantage” of the “inability of the consumer” to protect his or her own interests. So what are CFPB’s expectations and what can you do to not only pass the examination, but also leap frog to competitive advantage in domain of “customer experience?” CFPB’s first task will be to determine if consumer complaints are resolved adequately and timely. They will investigate compliance with RESPA (responses to qualified written requests related requirements) and Regulation Z (Open-End Credit, Billing Errors Procedures). They will evaluate the comprehensiveness of systems, procedures and/or flowcharts for capturing, logging, tracking, handling and reporting complaints and their resolutions. Customer communications is another key area of focus. Do you have an effective process for telephone communications dealing with inquiries or complaints? Is there a toll-free number? Is it


every effort to get the heart of legiti- can take to ensure customer centricity mate complaints. Prioritize resolution include: of public and examine the reasons why customers become vigilantes. l Undertaking a risk based review of Empathize with unhappy customers all processes, policies, products by familiarizing employees with factors and communications that impact that lead to customer complaints and customers engage senior management in cus- l Systematically reviewing vendor relatomer apologies when appropriate. tionships where services provided Changing the corporate culture to make impact customer known the company’s willingness to l Embedding customer principles and hear customer feedback and promote guidelines within your organization’s the favorable acceptance of complaints governance structure has a powerful impact on customer l Building a structured and sustainretention and new customer acquisiable approach to managing examition. Similarly, removing obstacles that nation requirements and responding prevent customers from complaining to new legislation or guidance and thanking customers for providing their feedback, whether positive or negative, is essential to becoming a “customer centric” organization.

3. Build a strategic customer focus, underpinned by solid customer analytics

Mark H. Fleming, CMB is managing director for the Regulatory Compliance Practice at Actualize Consulting. Mark was an officer in mortgage servicing and technology with Freddie Mac for 14 years, served as a founding board member of MERS and is currently a member of the Mortgage Bankers Association’s Mortgage Industry Standards Maintenance Organization (MISMO). He may be reached by e-mail at mfleming@actualizeconsulting.com.

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The challenge facing organizations is how to grow profitably in a climate of increasing regulation, changing market dynamics and customer mistrust of financial institutions. The CFPB is focused on the customer ensuring fairness and transparency. However, an organizational strategy that focuses on customer centricity (putting the customer in the center of decision making, design and operations) would incorporate the CFPB’s mandate as part of good business practice. Becoming customer centric is as much a culture and organizational challenge as it is a process and technology challenge. As with all process improvement, measurement is key. Does your organization have analytics that provide customer level understanding, along with the internal capabilities to act on the insight you gain? Do you use customer level data to drive decision making and differentiated yourself form the competition? Best practice organizations develop customer-based metrics (not just satisfaction measures), and embed them in the performance management structures of the organization. Other strategic steps an organization

The bottom line … becoming “customer centric” requires development of both outward facing customer strategies and internal development of core capabilities.

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easy to access a live person, with reasonable hold times and low call abandonment rates? CFPB will also assess the effectiveness of written and online options for inquiries, feedback and complaints. Finally, they will evaluate your effectiveness and speed for responding to consumer complaints, including a review of staffing levels in relation to level of volume. Listed above are the basic expectations and mechanics of the examination process. However, leading practices that allow you to gain a reputation as a “customer centric” institution start with creating a learning organization that has the ability to track complaint trends, identify and correct processes and behaviors that lead to the complaints. The first step is to build a solid foundation of resources for complaint resolution. Educating employees on complaint handling procedures is key. You must also establish a corporate wide policy, backed up by practical procedures and reports that ensure every attempt is made to satisfy an unhappy customer quickly. Create a feedback loop for complaints and anticipate complaints by continually monitoring employees’ adherence to processes put in place. Having your quality control staff monitor calls from the perspective of a customer advocate will give you visibility into potential complaints before it becomes a systemic problem. Another best practice is to view customer complaints as an opportunity rather than a burden. By documenting all complaints, leveraging feedback from multiple areas to identify dissatisfaction issues, you transform complaints into process improvements. Information gleaned from complaints can also be turned into new product development ideas. In a similar vein, “customer vigilantes” who are posting detailed complaints online can often become key sources for understanding your process gaps and vulnerabilities from a customer stand point. Contact these disgruntled customers directly and make


“So what are CFPB’s expectations and what can you do to not only pass the examination, but also leap frog to competitive advantage in domain of ‘customer experience?’”

Compliance Best Practices: Using ThirdParty Providers Can be an Example By Kathalin Carvalho

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It is not a secret that banks and nonbanks establish business relationships with service providers to help carry out different tasks associated with maintaining a loan. Furthermore, service providers may also contract specialty firms for services that they cannot support or that they do not have the expertise to conduct autonomously. These specialty firms, or third-party providers, now face increased scrutiny from servicers as a result of the current government regulations and initiatives by agencies, such as the Consumer Financial Protection Bureau (CFPB). Now, banks are required to effectively vet these third-party providers or be held financially responsible for any resulting mistakes. Using third-party providers creates reputational, operational and compliance risk for servicers, and failure to maintain an adequate compliance program by the provider may jeopardize current and potential business relationships. Therefore, it is critical that thirdparty providers implement action plans to overcome the aforementioned risks

and strategize the compliance structure of their shops. Servicers’ initial thoughts may be that it costs too much, we do not have the staff, we do not have in-house expertise, a compliance officer is too costly, or our company is not that big. Regardless, the regulations do not consider these scenarios but compliance is worth the investment. In order to address these issues, a company should go back to the basics. Experience with domestic and international financial institutions as well as different types of services and products can shed some light on the basic elements of a successful compliance program. These elements include:

they are the most commonly important. The level of sophistication of a program will depend on the number of clients, size of the company, internal resources and the exposure the company has to local, national and/or international regulations.

Compliance best practices

There are numerous requirements associated with serving legal documents and these vary from state to state and even county to county. A good licensed investigator should be bilingual and be able to conduct searches in all 50 states and for a variety of areas–banking, legal (foreclosures and collections) and loan servicing. Advanced data tracking and reporting technology can also offer clients superior search and reporting capabilities. So many companies provide specialty services for a variety of the banking and legal industries, which opens these companies to scrutiny by 1) Establishing standards and proce- clients and multiple government agencies. Therefore, it is crucial to dures; maintain a corporate compliance pro2) Compliance oversight; gram that allows the company to sat3) Communication and training; isfy industry requirements while cul4) Monitoring and reporting; and tivating an organizational compliance 5) Independent review. culture through accountability of These elements may vary from business leaders and staff, continuing company to company but in general education and robust reporting processes. The program should manage risk every day. A company’s corporate compliance program should conform to the general principles previously mentioned and recommendations established in the financial industry. The firm should also adhere to other compliance best practices recognized by government agencies and private industry. A company’s corporate compliance program should be built on three pillars–prevention, detection and response–that address compliance risks. The role of the any compliance department should be to assess the regulatory and other industry requirements, detect opportunities for improvement and respond to events that are contrary to the intent

of the law and internal policies and procedures. Each of the elements of the company’s corporate compliance program should be embedded in these three pillars and assists the compliance department to achieve its mission of ensuring the company is compliant.

How to start Here are a few steps to take in developing a successful corporate compliance program: 1) Take a hard look at your business, products and services. 2) Become familiar with current practices. 3) Study recent audits, investigations or other independent reviews conducted on your company and see if opportunities for improvement have been identified. 4) Schedule meetings company owner(s), board of directors/managers or senior management to discuss their “compliance appetite;” are they conservative, neutral or aggressive about compliance? This will help you recognize the level of compliance oversight that needs to be proposed for the business. 5) Document the results or discussions and research and start drafting a compliance plan or program that includes the basic elements mentioned previously. 6) Be sure to review current policies and procedures that cover business practices, and if the company does not have one, create an action plan to develop these documents. 7) Determine who will be in charge of overseeing the compliance and risk efforts and monitoring the processes for the company. It would be prudent to leverage the existing resources, such as information technology personnel, managers, human resources, etc. and determine if any elements of the program can be performed collaboratively with these areas. Your company may need to invest in software to monitor business activities. It will depend on the number of clients the company maintains


and volume of transactions managed. The most important aspect of a successful compliance program is to maintain effective tools (manual or automated) that assist in tracking, monitoring and reporting business activities. Proper documentation and retention of reviews is imperative, therefore; be cognizant of state and federal laws governing the documents and establish a proper methodology to maintain these records according to the legal retention requirements. To completely embrace a compliance culture within your business, ensure that the staff receives proper training and guidelines on compliance.

This leads to acceptable behavior, consistency and understanding of compliance expectations. Ensure that processes are reviewed independently by thirdparty auditors, consultants or by your internal audit team. Finally, formalize the compliance program in a document, discuss it with management and make it available to team members, or to clients if requested.

Success is possible Every company has its own culture. Those accountable for compliance oversight are responsible for discovering the companyâ&#x20AC;&#x2122;s culture and adapting it to industry regulations. Like any internal

conflict, changes in the regulatory environment may lead to distress for the organization and its team members. This is when it is important to have flexible communicators who can find opportunities for agreements between servicers and the third-party provider, and align these agreements with their operations to successfully implementing changes. The success of a compliance program relies on these relationships. Understanding your business and your clients is a priority, but most importantly the program hinges on the commitment to fulfill industry expectations by accommodating business practices to

meet your clientsâ&#x20AC;&#x2122; requirements, the regulators and the law. The relationship between your team members and your clients must be transparent in order for your corporate compliance mission to remain robust. Kathalin Carvalho is vice president of compliance for Tampa, Fla.-based ProVest, a nationwide legal services firm specializing in managing the delivery of legal documents and related foreclosure services. Carvalho ensures that employees and agents adopt appropriate standards, practices and internal controls. She can be reached by e-mail at kathalin.carvalho@provest.us.

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The Challenges of

Internet Leads

President’s Letter June, 2013

BY JOSHUA CONKLIN Hello Fellow Mortgage Professional: It seems as though just yesterday that we were welcoming in the new year and looking forward to accomplishing all of the plans and tasks we had before us. Here we are now, almost midway into the year; I sincerely hope your year to date has been fruitful. The Association has enjoyed sustained growth throughout the year and thanks those of you who have come on board as new members. The Association has a 53 year old history of providing service to our industry and industry partners. I encourage you to take full advantage of all that the state association and your chapter can offer you. The educational programs and networking opportunities alone are well worth the price of admission. Especially considering the substantial discount provided to our members. If you are not yet a member, this is a great time to join.

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Our annual convention and trade show is two-months away and members get a considerable discount on the cost of attending. The convention runs from July 31st through August 3rd, 2013 at Rosen’s Shingle Creek Resort in Orlando. Members pay only $195 for a full admission which includes 8-hours of continuing education, the information-packed industry luncheons on Thursday and Friday, admission to our break-out sessions and the tradeshow. Members wanting education will pay only $75 for an education pass that includes the education, break-out sessions and the tradeshow.

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Also, back by popular demand is the FAMP Golf Outing on Shingle Creek’s beautiful course available at a great price for our attendees If you are a vendor, this is a great opportunity for you to grow your business by meeting the mortgage professionals you need to know at our tradeshow. As of today, we have less than 25 booth spaces available and they will not last, so please do not delay in registering for your space. I look forward to seeing you at the convention. For information, please visit our website http://www.famb.org or call us at (850) 942-6411. Regards,

Carl A. Noriega President

One of the easiest types of leads that you can obtain is the Internet lead. You can just create a mailing list, and all those who signed up can be your potential customers. You can also create a pay-per-click (PPC) campaign, and a number of those who clicked on your ads can be your prospects. However, with Internet leads comes a number of challenges that you need to overcome. When you know what to do with them, you can expect getting the right sort of leads for your business. You can then boost your profits and return for your investments. 

1. Web traffic does not result in leads It is a common misconception among online marketers that traffic means leads. So if you have 100,000 people clicking on your Web page, you assume that you also have the same number of people as your prospects. This not always the case. After all, there are a lot of reasons why Internet users will click on your Web site. It could be that they accidentally clicked on your ad while surfing the Internet. It could also be that they got interested on the freebie, not on the products and services that you are offering. These types of people may not be the ones that you are looking for. Their level of interest is something you cannot bank on. Is then to separate the leads from the mere traffic. That is where lead analytics come in. There are already several programs that can help you out with that one. What they normally do is they feed you information that can help you determine user behavior. If they have been clicking on your Product page, for example, then it could mean that the Internet users are interested with what you are offering. If they have been coming back several times on the same page or even clicking on your Contact Us page, they may want to make a purchase or inquire more about the product.

2. Buying Internet leads does not give you quality leads There are two ways on how you can obtain Internet leads. You can get them on your own, through free and paid marketing services, or buy them from lead-generating companies. The latter provides you the convenience of using the leads right away. You also feel secured, knowing that they have been properly selected by the firm. Nevertheless, you must not feel too dependent on them. A lot of these bought leads may not really be good for your business for a lot of reasons. First, they may not be the prospects that you are looking for. You may end up having a very small percentage of qualified leads out of them. This means that you are not really getting the best return out of your investment. Second, you may end up having recycled leads. They may have been offered to other companies—worse, to your competitors—and got rejected.

3. You still need to track them One of the hardest things you have to do with Internet leads is tracking. Just imagine how many e-mail accounts an Internet user can make in an hour. There is a huge chance that the e-mail address that he or she has given you may not be the e-mail address he or she is primarily using. This is then where lead nurturing can be very helpful. When you know how to nurture your leads, it will be easier for them to stick around with you. They would inform you should they change their active e-mail accounts.

1292 Cedar Center Drive Tallahassee, Florida 32301 (850) 942-6411 FAX (8500 942-4654 E-mail famb@famb.org www.famb.org

Get over the challenges of Internet leads, and you can make the most out of them later on.

Sponsored Editorial

Joshua Conklin is director of business development at MortgageLeads.org and is an authority in the lead generation space. Joshua has more than 14 years of experience at developing strategic marketing platforms for the nation’s tops lenders and brokers nationwide. He may be reached by phone at (800) 848-7086, ext. 201 or e-mail josh@mortgageleads.org.


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nate weeks from the process. Servicers are guided through the tool with scripts to promote consistency and improve customer service. These elements translate to cost savings and improved service to homeowners.

LRC Asset Management Launches New Fraud Elimination Program

CoreLogic announced the availability of its LoanSafe suite of risk mitigation solutions on seven loan origination systems (LOS) through integration with QuestSoft’s Compliance EAGLE, a mortgage compliance review system. The LoanSafe Suite is now available through the Blueberry Relay, Calyx Point, Ellie Mae DataTrac, Harland E3, ISGN MORvision, LPS Empower and OpenClose systems. The CoreLogic LoanSafe suite is designed to help lenders minimize collateral risk and maximize fraud detection. Integrating the LoanSafe suite directly into QuestSoft’s Compliance EAGLE brings these services to originators faster by significantly collapsing

Equity National has introduced Equity ISP (Insured Settlement Protection), an insurance product protecting the insured mortgage lender against closing fraud, defalcation and closing instruction violations. Developed for Equity National by The Prieston Group, the policy is insured through Lloyd’s of London and affords mortgage lenders protection above and beyond that provided by the traditional closing protection letter (CPL). The insurance product is the first of its kind in the mortgage industry. According to Jim O’Donnell, president of Equity National, lenders working with Equity National will be afforded more extensive protection against defalcation and fraud than they receive when covered only by the traditional CPL. He notes that defalcation and theft claims, as well as closing instruction violations, are often inadequately covered by CPLs. Equity ISP, for example, will cover claims up to three years from the date of closing. Most CPLs, in contrast, may only be invoked within 30 to 180 days and are non-assignable. O’Donnell asserts that many closing instruction violations can take years, rather than days, to discover—long after the CPL has lapsed. Similarly, while many defalcation or fraud claims are limited by the standard CPL to “lien-related matters,” Equity ISP goes much further. “We partnered with The Prieston Group on this after seeing a number of lenders experience very real damage where they had mistakenly believed the CPL would protect them,” said O’Donnell. “Right now, lenders are increasing their expectations of closing agents while the title industry is simultaneously cutting back on what it will cover. This is the only product out there right now which can address the shortcomings of the CPL to the advantage of lenders. The coverage also follows the loan and is assignable.” Arthur Prieston, Chairman of The Prieston Group, makes it clear that this

On April 11, 2013 the USDA released (AN) 4714 “Standardized Income, Origination and Closing Templates” to replace AN4575 “Origination and Closing–Lender’s Documentation,” which expired on May 31, 2012. This notice contains information to support lenders and agency staff with a nationwide standardized method to assist in the analysis, calculation and documentation of income. It also identifies required origination and closing documentation. This will ensure the objective and mission of the USDA Guaranteed loan program are met including: n Identify, verify, calculate and document eligible household income. n Identify, verify, calculate and document repayment income. n Identify required origination documents for issuance of Form RD 1980-18, “Conditional Commitment for Single Family Housing Loan Guarantee.” n Identify required loan-closing documents for issuance of Form RD 1980-17, “Loan Note Guarantee.” n Identify electronic delivery e-mail addresses for the agency–all states. n Tips for ensuring a lender’s request is processed in accordance with regulatory time frames. For those of you with limited time to spend on the USDA Web site should focus your attention to Attachment A. This information and method of calculation will be used for documenting household income for eligibility purposes as well as repayment income for those who are a party to the note. The USDA expects the lender to choose the most representative calculation method which most accurately reflects the applicant’s income to be received during the next 12 months and that is validated by supporting documentation. A lender must choose the BEST method that represents the applicant’s projected repayment income and document it accordingly. The following income types and documentation are discussed in detail. n Straight income is based upon the wage or benefit amount and converted to the annual equivalent. n Averaging income is permissible if reported on the pay stubs or benefit statements for the last 30 days and convert to the annual equivalent. n Year-to-date income is gross earnings divided by the year-to-date interval. n Historical income is the income reported on previous year’s tax return. Below are a few other notes on income to consider as you are qualifying your borrowers for eligibility.

Length of employment and stability of income There is no minimum length of employment to consider the income as adequate and dependable. However, the lender must verify the applicant’s employment for the most recent two full years and verify that the applicant’s income has been and will be stable. 

Commission, bonus, overtime, tips and second job USDA states income from commission, bonus, overtime, tips and a second job should have a documented two-year history. If less than a two-year history is utilized for qualifying the loan, the lender must document in their underwriting analysis a credible basis for determining the income as stable and dependable.

Self-employed income Generally, income from self-employment is considered stable and dependable if the applicant has been self-employed for two or more years documented by not less than two years of income tax returns. With more than 25 years in the mortgage industry, Rich Obermeier, branch manager for GSF Mortgage Corporation, has worked with some of the largest mortgage companies in the county developing retail and wholesale channels. Rich has assisted in developing and implementing operational protocols for sales managers, originators and loan processors. In recent years, Rich has developed the USDA Rural Development Product in multiple states and locations. Rich may be reached by phone at (262) 957-8901 or e-mail robermeier@gogsf.com.

Sponsored Editorial continued on page 62

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CoreLogic Launches LoanSafe Suite of Risk Mitigation Solutions

Equity National Releases New Fraud Protection Product

By Rich Obermeier

NationalMortgageProfessional.com

LRC Asset Management has announced the launch of a revolutionary program that catches fraud and speeds REO timelines to less than 180 days. RealtyRecon quickly determines occupancy in REO housing units, addressing one of the industry’s biggest shortfalls. The Scottsdale-based company’s proprietary program works with existing listing agents as a seamless addition to REO and short sales operations. “The amount of fraud in REO and short sales is staggering,” said Travis Hamel Olsen, co-president of Loan Resolution Corporation (LRC). “RealtyRecon virtually eliminates all fraudulent repair claims by agents and contractors, and those tricky pocketinvestors that agents sometimes work with, so we can get the owner of the mortgage the full return they deserve.” The groundbreaking program significantly lowers code violations by providing occupation verifications and weekly inspections. RealtyRecon agents visit the properties on a weekly basis, delivering timely reports complete with photographic evidence. “Our clients have been asking for this resource since the market crashed,” added Olsen.” “It’s time for bogus repair claims and fraudulent agents to go the way of the dinosaurs.”

LOS integration timelines, which can take as long as two years. “CoreLogic is actively broadening the channels through which loan originators can use our risk mitigation solutions, helping them improve loan quality and assist with best practice data validation in their loan origination process,” said Dave Ard, senior vice president, Business Development for CoreLogic. “QuestSoft Compliance EAGLE will provide our clients with a simplified, streamlined experience, helping create a more efficient and productive loan cycle.”

USDA Releases Notice to Standardize Income Calculation


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What Will Your Legacy Be? Accuracy, Manners & Professionalism Will Be Remembered

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By Fred Arnold, CMC recently attended a funeral for a colleague who passed away in his early 40s. Mark was an appraiser who I had worked with many times. In recent years, I hadn’t had the chance to meet with him in person very often, thanks to appraisal independence, but I considered him and his brother Shawn who is also an appraiser, friends; and was incredibly sad that his life had been cut so short. I wasn’t alone. At the funeral, there was an overflow of attendees coming to pay their respects. It dawned on me that no matter what position we hold in the real estate financing business, we impact countless others through our work. As mortgage professionals, of course, we are in a business of service. Our entire job is based upon the foundation of helping others. We help others to save money, to realize the American dream of homeownership, and in some cases, help them to utilize their investments in their homes to live a little more comfortably in their retirement years. This all got me thinking about the legacies that we will leave behind. Will we be remembered as leaders who tried to help others? Will we be remembered by our colleagues for our

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accuracy in our work? For our kind and helpful bedside manner? For our professionalism? In talking with others at the funeral, it was clear that from real estate agents, to mortgage professionals, to homeowners, Mark left a legacy that will continue. When it comes to accuracy, how do we measure up? Is our work such that we deliver an accurate product? Inaccuracies in home financing cause stress to not only ourselves but also all those that we’re working with. From real estate agents to strategic partners to borrowers, does our commitment to excellence in accuracy show through? Or, are we causing others undue stress because of hastiness or cutting corners? Mark clearly understood the importance of delivering accurate home appraisals and his pursuit of excellence is already defining his legacy. Mark’s bedside manner was also one of the reasons that so many people loved him and loved working with him. He was approachable, thorough and addressed all requests with an attitude and demeanor of helpfulness. Mark was thorough, easy to speak with and gave his full attention to whomever he was dealing with. In other words, Mark made everyone feel like their needs, concerns and questions were the most important items on his to-do list. He wasn’t busily planning for the next appointment. You always had his

full attention. It was clear that his people-first philosophy earned him a great deal of admiration from colleagues and peers, who all benefitted from his kind and helpful bedside manner. Indeed, it was clear in talking with others that Mark’s accuracy and manners culminated in how others regarded him as a true professional in all he did. From effective communication to talent in his field, to a positive, supporting attitude in working with others, he exuded professionalism. He made countless lives better as a result of his work and his integrity. He delivered thorough, quality products with a smile. Mark made the lives of those who were blessed to know him that much easier and that much brighter. He made it a point to work towards reducing or preventing undue stress upon others. There’s no other way to say it. He was a consummate professional who everyone in the home financing business could learn from. As mortgage professionals, we can especially learn from the example set by leaders like Mark and others who we come into contact with. We also have the opportunity to leave a similar legacy, as long as we remain committed to the same fundamentals. By providing accurate, quality products to our partners, to first-time homebuyers, to our refinancing clients and to our clients in their retirement years,

we are uniquely positioned to make huge differences in the lives of so many people. Through our pleasant and helpful bedside manner, we have the opportunity to allow our clients and our partners to feel comfortable picking up the phone to call us with a question on a seemingly small detail. We have the opportunity to make others feel good about being thoroughly educated about their own large investment. We have the chance to make everyone we come in contact with feel like they really matter and they really are important to us. Following in Mark’s footsteps, we all get the chance to become true professionals in our work. I don’t know about you, but that is certainly a legacy I would like to leave. Fred Arnold, CMC is past president of the California Association of Mortgage Professionals, current Treasurer of NAMB—The Association of Mortgage Professionals, and a mortgage professional at American Family Funding, a division of American Pacific Mortgage. Fred hosts the radio show SCV Chamber and Business Spotlight on AM 1220 KHTS, as well as the televised program “Out of The Rough” on SCVTV.com, channel 20. He may be reached by phone at (661) 284-1150, ext. 109 or e-mail fred@fredarnold.com.


Secrets to More Closings: Stage Six of the Sales Funnel (Part III) By Jean LeBlanc In previous months, we’ve explored the needs and expectations of your clients as they move down the sales funnel, from initial tire-kickers to loan closing. But we’re not finished! If you nurture them in various and creative ways, these clients will create more income for you in the future!

Stage six: Post-closing You can quell a buyer’s remorse by listening carefully to your clients throughout the home loan process. Strive to understand every client’s hot buttons: Was it the home’s specific location they wanted most, or are they most excited about their plans to remodel? Then, follow up via e-mail or regular mail with reassurance and a reminder based on that hot button. You could also send a congratulatory e-mail that says, “You just saved yourself approximately $____ on your income taxes next year!” (based on their income minus the interest and tax deductions). For example, my company sets up drip e-mail campaigns so purchase and refinance customers automatically receive six e-mails from their loan officer within the first year after the loan closes. The final e-mail says, “It’s been a year—let’s do a loan check-up to see if I can save you more money monthly with a refinance.”

Ask for their testimonials

More ideas

Provide your sales team with tools at each stage of the funnel It’s obvious that the methods your team employs to work with a not-yet-prequalified borrower who has simply expressed an interest in getting a loan will be different than a prequalified borrower who is home shopping, as opposed to someone in the application stage versus docs and closing. And finally, how you maintain contact with a closed-loan borrower will be vastly different than any of the above. As a coach for your sales team, you need to both ensure that your sales team understands each stage and has plenty of tools to help move the client along, regardless of the loan stage they are in. With your coaching, plus a marketing library full of materials built for each stage, your sales team will be ready for any stage of the sales funnel! Jean LeBlanc is director of marketing for Guaranteed Home Mortgage Company. For more marketing tips, download the eBook, 13 Ways to Juice Up Your Marketing in 2013, by going to joinghmc.com and clicking on the eBook offer midway down the page. She may be reached by phone at (914) 696-3400.

Technology has a number of driving forces that spur development at different points in time, but today, most mortgage industry professionals would agree that no force is stronger than a lender’s need to meet compliance expectations. Despite the surge of technology designed to address these regulations, a complication exists that keeps many lenders from pulling the trigger on new technology and beginning to realize the ROI of an efficiently flowing system: The looming and unwritten regulations to be finalized under the Dodd-Frank Act (or perhaps the compliance guidance we might not even see coming). Lenders today are in the precarious position of receiving guidance that requires immediate action and the trained belief that changes are going to keep coming. However, I challenge the notion that technology adoption should wait until after the dust settles for two simple reasons. First and foremost, changes to requirements will not stop coming. Policies tend to give rise to new parameters and if we’ve learned nothing yet, we need to learn how to continually adapt. Secondly, lenders should consider that the best position to find themselves in when the next regulation change comes down the pike is a verifiable understanding of where operations are today. That is precisely what well-implemented technology can help a lender achieve. Let’s look at one example of how the right technology platform can keep a lender on track and, at the same time, remain adaptable for what’s to come. Certainly, in the past five years, we’ve seen the definition of “compliant valuation ordering” evolve, and it will likely do so again. A strong valuation management platform should be able to assist a lender in managing their own appraiser panel, AMC relationship and the procurement of other valuation types (AVMs or BPOs). High-functioning platforms will allow lenders to set automated rules for valuation orders, which are designed to align with the lender’s policies and procedures and should be adjustable as internal or external forces require changes. As an order is placed, the transaction should be time and date-stamped such that each transaction will exist in an audit trail which the lender can later use to support how its policies and procedures were carried out as a measure against the regulations at that point in time. The system accumulates data on the vendors, as well as on the valuation products returned. This data gives lenders a factual basis to determine whether the vendor should continue to receive valuation orders from the lender, and in turn, gives regulators a clearer understanding of what transpired within the lender’s operations at a given point in time. So while the lender is benefiting from the ROI on an optimized vendor management program today, they will have a concrete set of facts on how their vendors performed and were managed when the next industry shift occurs. By setting up operations to manage for today’s needs with flexibility to adapt to tomorrow, lenders can find themselves in a position to keep up with regulations–even those that have not yet been delivered. David Rasmussen is senior vice president of operations at Veros Real Estate Solutions. For more information, call (714) 415-6300 or visit Veros.com.

SPONSORED EDITORIAL

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l Ask for Facebook “Likes” and referrals with your e-mail drip campaigns. l Include suggestions in your messages such as, “ Should you refinance?” or “Are you thinking about purchasing a second home?” toward the end of the first year, or in subsequent years. l Send thank you cards via regular mail that include incentives such as Subway coupons to feed the crew on moving day, or a coupon for free window-washing for a refinance customer.

By David Rasmussen

NationalMortgageProfessional.com

If you have already added your mortgage office to such local directories as Google Places, Yelp, Yahoo! Local or Bing Local Listing, you want these satisfied clients to add their testimonials to one or more of these directories right away. You cannot cut and paste to add their review—they must do it themselves from their computer (that’s how these directories cut down on spam reviews). Ask them to add their review to your Zillow or Homes.com listing, too. One Florida LO told us that he advertises nowhere, but instead, relies entirely on his Zillow reviews to bring him new business. What a coup! Offer to bring pizzas on moving day if they will simply write their reviews and post them. After all, you’re asking for their time right now when they’re bound to be busy, so say thanks by providing help to them. Once they’ve posted their reviews, then you can copy and paste them onto your Web site and on your social media pages. That way, you’re getting lots of mileage out of a single review. At my firm, one conscientious LO has compiled so many reviews that we took out a full-page ad in his local newspaper, pasting dozens of his reviews into the background of the ad.

Technology to Manage Today and Prepare for Tomorrow


new to market

Bonded With NAMB

Consider the Source

NationalMortgageProfessional.com

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product is not for everyone. “We are extremely cautious about who we do business with,” he said. “This product is designed to address a much needed protection that has been missing in the industry. Thus, we demanded a partner in the settlement services industry which uses best practices, has the highest quality of personnel and, quite simply, does business the right way. Equity National immediately stood out as that partner.”

Wipro Upgrades Its NetOxygen LOS

By Mason Grashot, CPA

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The bond business is similar to the mortgage business in that it all starts with access to the products. Whom the customer chooses to guide them into and through the world of surety (or mortgages as a comparison) can be the single most important piece of the puzzle that also happens to be entirely within the customer’s control. Some industry professionals consider themselves to be a “jack of all trades,” but are really a “master of none” (or at least a “master of few”). Others are specialists whose focus, experience and knowledge really add value to the customer’s buying decision. Some insurance agents can and will write any type of insurance that is needed. Surety is a type of insurance (as is life, disability, health, home/auto or commercial lines). Usually, the products that are purchased from people who truly specialize in that specific product type are either better than or less expensive than those purchased from people who handle various types of products. There are thousands of insurance agents out there (some of whom sell surety bonds, too). There are dozens of bond agents out there (some of whom sell insurance as well). Sometimes a customer can purchase a surety bond from an insurance agent and that insurance agent’s bond knowledge, application process, price and service are all no different than what the customer would have experienced by using a bond agent. But more often than not, bond customers find that the price is lower, the process is easier and the knowledge is greater when they choose to purchase their surety bond from a surety specialist. If you’ve had your bond for a while or if you think you might be paying too much because the first answer isn’t always the best answer, you should take a little time to look into something that you pay for year after year after year. Ask your association, your colleagues, or your search engine for recommendations. Find a surety specialist and find out whether your surety bond is costing you what it should be. Mason Grashot, CPA is president of The Bond Exchange, a national insurance agency focused on surety bonds with a unique specialty practice centered on the mortgage profession. As the endorsed strategic partner of NAMB—The Association of Mortgage Professionals, The Bond Exchange services thousands of surety bonds through programs designed specifically for the mortgage industry. For more information, call (501) 224-8895 or visit www.thebondexchange.com.

Sponsored Editorial

W i p r o Gallagher Solutions (WGS), a Wipro Technologies company and provider of end-to-end lending solutions for financial institutions, has announced the release of NetOxygenZip, a preconfigured version of its NetOxygen loan origination system (LOS) that simplifies lending and speeds time to market. NetOxygenZip allows lenders of all sizes to gain access to a more scalable, robust system using a fraction of the time, money and resources traditionally required. The system not only allows lenders to originate loans immediately after installation, but its inherent flexibility and intuitive user interface enables lenders to easily refine components later, based on unique business needs. “Many lenders are looking for a more powerful and compliant LOS but are reluctant to switch systems in fear of a sluggish deployment. Lenders need not compromise any more between a solution that is both robust and can be implemented rapidly,” said Narayan Bharadwaj, business head and general manager at Wipro Gallagher Solutions.

nmp newsflash

“With NetOxygenZip, lenders get a flexible LOS that deploys quickly and simplifies lending.” The system comes equipped with features and functions central to most lending operations including data, tools, reports, service provider integrations, documents and integrated imaging functionality. The system’s workflow is pre-configured based on industry best practices and its built-in products, pricing, fees, adjustments and conditions for the most common loan products enables users to easily update and maintain system functionality without IT intervention. The system seamlessly integrates with reputable external service providers to ensure single system access to critical borrower, property and loan data. Its full document imaging capabilities support paperless lending, which reduces processing inefficiencies through auto-indexing and document classification. It also improves internal communication with loan annotation capabilities.

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: newsroom@nmpmediacorp.com Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

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Under this program, severely delinquent FHA-insured loans are sold competitively at a market-determined price generally below the outstanding principal balance. Once the loan is purchased, foreclosure is delayed for a minimum of six additional months, during which time the new servicer can work with the borrower to find an affordable solution to avoid foreclosure. These loans are purchased at market rate, which is generally below the outstanding principal balance, giving the investor the incentive to take additional steps to help the borrower avoid foreclosure, including modifications that may include reduced principal balances. HUD expects to sell more than 40,000 distressed loans this year through quarterly sales that reduce FHA’s total claims costs and increase

recovery on losses to FHA’s Mutual Mortgage Insurance (MMI) Fund.

Your turn National Mortgage Professional Magazine invites you to submit any information on regulatory changes, legislative updates, human interest stories or any other newsworthy items pertaining to the mortgage industry to the attention of: NMP News Flash column Phone #: (516) 409-5555 E-mail: newsroom@nmpmediacorp.com Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.


heard on the street

continued from page 42

GOULD

l United Guaranty Corporation has named Brian Gould chief operating officer (COO).

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: newsroom@nmpmediacorp.com Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

calendar of events N A T I O N A L

M O R T G A G E

P R O F E S S I O N A L

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n National Mortgage Professional Magazine n JUNE 2013

l New Penn Financial LLC has named Gil Lopez as regional sales manager of correspondent lending. l Stearns Lending Inc. has announced the appointment of Hershel Malett as vice presidentâ&#x20AC;&#x201C; Internal Audit, Mortgage Operations. l Flagstar Bancorp Inc. and its wholly-owned subsidiary Flagstar Bank FSB announced that their respective boards of directors have appointed Alessandro DiNello to serve as president and chief executive officer of each entity, effective immediately. In addition, the bank also announced that its board of directors has appointed Lee M. Smith to serve as chief operating officer. l NAMBâ&#x20AC;&#x201D;The Association of Mortgage Professionals has announced that two of its members, John Hudson of Premier Nationwide Lending and Karl LeBlanc of LeaderOne Financial Corporation, have received their Certified Residential Mortgage Specialist (CRMS) designation. l WFG National Title Insurance Company has named Deborah Everett as senior vice president, compliance and licensing. l The Mortgage Bankers Association (MBA) has announced the appointment of Margaret A. Colon as chief administrative officer. l LRES has named Stephen Massien as its new vice president of marketing. l ISGN Corporation has announced the addition of former Xerox executive Nancy Alley as its chief product officer. l GMH Mortgage Services LLC has announced the addition of Scott Medrow as senior vice president of its national mortgage center (Credence Mortgage) and specialty products division. l LenderLive Network Inc. has appointed Linda St. Clair as vice president and national account manager. l Teri Felix has joined loanDepot.com LLC as executive vice president and chief marketing officer. l Stewart Lender Services Inc. has announced that Jim Davis has joined the company as vice chairman and executive vice president of strategy and business development. l The lending division of Carrington Mortgage Services LLC has

announced the addition of Jeff Gillis as senior vice president of operations and the promotion of Mariano Demarin to national sales director for its retail lending division. l Valuation Partners has named three mortgage and valuation industry veterans to its management team, as Damon Zeigler has been appointed vice president, vendor management; Amanda McIntyre has been promoted to the position of vice president of operations; and Rick Smith has been appointed vice president, controller.

l VRM Mortgage Services has announced the appointment of Ed Hunter as vice president of business development.


APPRAISAL MANAGEMENT COMPANY

BONDS & LICENSING

The Bond Exchange www.bondedwithnamb.org (501) 224-8895 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. The Bond Exchange is a national surety agency specializing in servicing mortgage license bonds for thousands of mortgage professionals across the country. Low prices and fantastic service. You really can have them both at the same time!

BRANCH OPPORTUNITIES

Are you a mortgage origination professional? Are you exceptional? Is your company? Gateway Mortgage Group has immediate opportunities in 16 states. Our origination teams enjoy: â&#x20AC;˘ A local branch- and origination-centric model â&#x20AC;˘ The perfect balance of corporate support â&#x20AC;˘ Competitive compensation plans And best of all, our entire platform is built with one thing in mindâ&#x20AC;&#x201D; helping local originators take their success to the next level. Visit our careers page on LinkedIn. Follow us. Or call us at 888.360.3773. And we will show you YOUR Gateway to a Great Way of Lifeâ&#x201E;˘! Gateway Mortgage Group, LLC is an equal opportunity employer. NMLS 7233 HQ: 6910 E. 14th Street, Tulsa, OK 74112

BRANCH MANAGER

StreetLinks Lender Solutions (800) 778-4920 www.streetlinks.com sales@streetlinks.com

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Itâ&#x20AC;&#x2122;s Timeâ&#x20AC;Śto join one of the Top Mortgage Bankers as Branch Managers or Loan Officer NOW! Why? You Have Our Guarantee!

JUNE 2013 n National Mortgage Professional Magazine n

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StreetLinks Lender Solutions provides an innovative and comprehensive suite of valuation and service solutions used by lenders, servicers and appraisers nationwide to improve everyday business operations. StreetLinks industry-leading products include LenderPlusâ&#x201E;˘ full-service appraisal management, LenderXâ&#x201E;˘ lender-executed appraisal management software and SCOReâ&#x201E;˘ appraisal reviews and a series of valuation analysis tools for services. Our commitment to quality and service, embodied by our partnership approach to clients and appraisers, continues to set us apart as the nationâ&#x20AC;&#x2122;s premier lending solutions partner. For more information, visit www.streetlinks.com.

Hometown Lenders (888) 606-8066 moreinfo@htlenders.com www.hometownbranch.com "WE HELP YOU GROW YOUR BRANCH AND SKYROCKET YOUR INCOME!" â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘

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

Our Guarantee We will not leave you stranded and alone on an island.  Our seasoned operational rollout team will ensure you a smooth transition to our branch platform. Our RHF University will train everyone on your staff. We stand by our reputation of providing ongoing support and communication to every branch , every day. Youâ&#x20AC;&#x2122;re our #1 Priority! We are a Full-Service Banker, a Direct Endorsed FHA and Fannie Lender.  We are a TRUE 48 hours in Underwriting and Closing. We will close your loans on time.  We will give the best service to you and your clients We will give you full access to all marketing and development services from loan origination to hiring to specialty products. We are the Leader in marketing, technology and strategic business partnerships. We assist our Branch Managers in hiring, training and motivating their staff. We will help you build your team. CALL NOW 866-319-4442 or EMAIL fkuri@rhfunding.com or VISIT  www.rhfbranch.com

COACHING

United States Appraisals World-Class Service. Nationwide Coverage. Discover ConďŹ dence in Your Appraisal Partner! www.UnitedStatesAppraisals.com | (866) 562-0123 United States Appraisals combines nationwide coverage with personalized, world-class service. From fast turn-times to rigorous quality assurance and delivery guarantees, we bring much needed confidence to the valuation process. â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘

Fast Turn Times â&#x20AC;&#x201C; We guarantee it! Underwriter-Ready reports â&#x20AC;&#x201C; the first time! 100% Compliance with all regulations and guidelines Customary and Reasonable Fees and a weekly pay cycle Cutting-Edge Technology provides real time reporting and full integration for a seamless business process Call us at (866) 562-0123 for a free consultation. Or visit www.UnitedStatesAppraisals.com to learn more.

Meadowbrook Financial Mortgage Bankers 1-888-MEADOW8 (632-3698) www.mortgagesalesjob.com

"!      !   "   

Meadowbrook loan originators make 33% more money with Meadowbrook than with any other company they worked for. Enjoy the benefits of a low compare ratio, a lead management system with an endless supply of leads, A tier investors, and much more.



Meadowbrook is hiring Branch Managers and Loan Originators. We are licensed in NY, CT, PA, NJ, MD, FL, MA, NC, pending in SC, NH, and RI. Meadowbrook is an FHA, Fannie Mae, Freddie Mac, and VA endorsed lender.

('&%$#"! '%  % % '!#%

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COMPLIANCE CONSULTANTS

BROKERS COMPLIANCE GROUP 167 West Hudson Street – Suite 200 Long Beach | NY | 11561 members@brokerscompliancegroup.com www.BrokersComplianceGroup.com 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

COMPLIANCE/CONTINUING EDUCATION

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

DIRECT MAIL

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

CONTINUING EDUCATION

Clix Mg 1756 Hanshaw Road • Ithaca, NY 14850 Office: 727.474.1442 www.clixmg.com

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

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

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

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

EMPLOYMENT SERVICES

LENDERS COMPLIANCE GROUP 167 West Hudson Street - Suite 200 Long Beach | NY | 11561 | (516) 442-3456 www.LendersComplianceGroup.com The first full-service, mortgage risk management firm in the country, specializing exclusively in mortgage compliance. Pioneers in outsourcing solutions for mortgage compliance. Our Compliance Team Will: Leverage your existing employees. Improve your productivity. Collaborate on projects. Make the most of your current technology. Bring innovation to your company. Be a strong cultural fit. Free you to focus on your core competencies. Give you access to world-class expertise. Lower your total operational costs.

Credit Plus, Inc. 31550 Winterplace Parkway, Salisbury, MD 21804 800-258-3488 www.creditplus.com Credit Plus, Inc., a leader in credit information services, is dedicated to providing mortgage professionals with an unsurpassed level of service and technology. We provide lenders and brokers the best tools and support to close more loans faster and cheaper. Offering the most innovative, reliable and robust credit reporting platforms on the market, Credit Plus goes BEYOND BUNDLEDTM by combining key products, such as credit reports, scoring tools, Undisclosed Debt Monitoring powered by Equifax, flood reports, title services, AVMs, Warranted AVMs, tax return verifications and more, while providing stellar customer service. 

n National Mortgage Professional Magazine n JUNE 2013

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


LEADS

MARKETING SERVICES

VALUATION SERVICES

Gets you more referrals, inquiries, and closings! MortgageLeads.org 888-695-3239

Mortgage Internet Leads $9.99. Find out why the nation's top lenders partner with MortgageLeads.ORG. Target by: â&#x20AC;˘ Refinance â&#x20AC;˘ Purchase â&#x20AC;˘ HARP â&#x20AC;˘ FHA â&#x20AC;˘ VA â&#x20AC;˘ Reverse. Close more loans today 888-695-3239 or click www.MortgageLeads.org

T

hatâ&#x20AC;&#x2122;s what mortgage loan                                         

Want more loans?

Warren J. Rosaluk 800.795.2150

BrochureGuy.com LOAN ORIGINATION SYSTEMS

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Veros has been an industry leader in real estate collateral valuation management & decision analytics for more than a decade. We offer a wide variety of software solutions and tools to help you manage collateral valuation from the beginning of the mortgage chain and throughout the life of the loan. Contact Veros today to learn about: â&#x20AC;˘ Sapphire â&#x20AC;&#x201C; the most comprehensive valuation management platform â&#x20AC;˘ VeroVALUE â&#x20AC;&#x201C; the industryâ&#x20AC;&#x2122;s leading national AVM â&#x20AC;˘ VeroSCORE â&#x20AC;&#x201C; automated appraisal scoring quality control tool â&#x20AC;˘ ComplianceTRACK â&#x20AC;&#x201C; independently designed AVM cascade â&#x20AC;˘ VeroFORECAST - most advanced residential market forecast Email Veros at info@veros.com to learn more or to schedule your complimentary product demonstration.

RECRUITMENT

Calyx Software 800-362-2599 www.calyxsoftware.com

WAREHOUSE LENDERS

Why should every mortgage broker consider obtaining a warehouse line from Goldome Financial?

Calyx Software is the #1 provider of affordable mortgage solutions for banks, credit unions, mortgage bankers and brokers. Beginning with customizable websites that offer online mortgage applications with eDisclosures and document request/retrieval, Calyx offers products that enable smooth bi-directional flow of data from start to finish. Our solid yet flexible LOS delivers smart technology with electronic document management, back-end functionality such as underwriting and secondary marketing, strong security, remote access, on-the-go productivity available with optional mobile apps, and a configurable business rules engine needed for workflow and compliance. Convenient interfaces with over 200 vendors providing PPE, closing documents, compliance services and more make endto-end processing and reporting simple & accurate. Lenders can take advantage of our fully integrated automated underwriting and pricing products that determine loan eligibility and pricing against investor or FHA guidelines.

MARKETING SERVICES

Veros Real Estate Solutions "Innovating Mortgage Technology" veros.com | (866) 458.3767 Follow us on Twitter at @verosRES

Go to our website www.Goldome.com Press â&#x20AC;&#x153;Click Hereâ&#x20AC;? and we will tell you or call us at 469-444-9800

RETAIL BRANCH

WHOLESALE/CORRESPONDENT LENDERS

Jim Melchior, Vice President of Sales 973-646-3067 www.AFRWholesale.com

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

American Financial Resources' Wholesale Division is one of the country's leading wholesale lenders. Recently ranked #1 in total sponsored FHA loans closed, AFR offers a wide variety of products including:

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

 

My Guide is offered in traditional magazine print, as well as our newest electronic flipbook version, bringing â&#x20AC;&#x153;flipping through a magazineâ&#x20AC;? experience right to your desktop

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

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

Maverick Fundingg Corp. NMLS# 7706

â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘

Conventional Freddie Mac Open Access and Fannie Mae DU Refi Plus USDA Manufactured Housing VA One-Time Close Construction FHA 203K full and streamline rehabilitation loans FHA

Since 1997 we have been expanding to better serve you and our hard work and investment have resulted in faster turn times, quality customer service, and one of the most robust product lines in the industry.


WHOLESALE/CORRESPONDENT LENDERS

WHOLESALE LENDERS

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

HomeBridge 5 Park Plaza, 10th Floor Irvine, CA 92614 www.homebridgewholesale.com

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

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

WHOLESALE/RESIDENTIAL

CBC National Bank 3010 Royal Boulevard South, Ste. 230 Alpharetta, GA 30022 888-486-4304 CBC National Bank is one of the nation’s fastest growing wholesale lenders offering Conventional, FHA, VA, and USDA. The most important aspect of being a leader in today’s market is the ability to build and maintain a meaningful relationship with each customer. We understand that these meaningful relationships coupled with competitive pricing and efficient technology are the pillars of today’s lending environment. We are hiring Loan officers in the Southeast. GA, FL, AL, TN, NC,SC. Contact Gabe Santiago our Corporate Recruiter at gsantiago@cbcnationalbank.com for further details.

Building bridges to success, one loan at a time. Big Enough to MATTER…Small Enough to CARE

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

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

Interested in joining our Wholesale Division? Send your resume to aerecruiting@remn.com

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

n National Mortgage Professional Magazine n JUNE 2013

Rushmore Home Loans www.rushmorehl.com 888.202.0878

67

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.

NationalMortgageProfessional.com

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

Real Estate Mortgage Network, Inc. www.remnwholesale.com 866-933-6342


calendar of events N A T I O N A L

M O R T G A G E

JULY 2013

NationalMortgageProfessional.com

JUNE 2013 n National Mortgage Professional Magazine n

SEPTEMBER 2013

Wednesday, July 17

Friday, September 13

Sunday-Wednesday, October 27-30

2013 “Let’s Make A Deal” Tri-State Wholesale Lending Fair Trump Taj Mahal Casino Resort 1000 Boardwalk Avenue Atlantic City, N.J. For more information, call (732) 596-1619 or visit www.mbanj.com.

Washington Association of Mortgage Professionals 2013 NW Housing Summit & Lenders Expo Meydenbauer Center 11100 NE 6th Street Bellevue, Wash. For more information, e-mail admin@mywamp.org or visit www.mywamp.org.

Mortgage Bankers Association (MBA) 100th Annual Convention & Expo Walter E. Washington Convention Center 801 Mt. Vernon Place Washington, D.C. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.

Sunday-Tuesday, September 29-October 1

NOVEMBER 2013

Mortgage Bankers Association Regulatory Compliance Conference Renaissance Washington DC Downtown Hotel 999 9th Street NW Washington, D.C. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.

Utah Association of Mortgage Professionals 2013 Annual Expo & Conference South Towne Exposition Center 9575 South State Street Sand, Utah For more information, call (801) 597-2122 or visit www.uamp.net.

Wednesday-Saturday, July 31-August 3

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P R O F E S S I O N A L

Florida Association of Mortgage Professionals 2013 Annual Convention “Here We Grow Again” Rosen’s Shingle Creek 9939 Universal Boulevard Orlando, Fla. For more information, e-mail convention@myfamp.org or visit www.famb.org. AUGUST 2013

Thursday-Friday, August 8-9 Louisiana Mortgage Lenders Association 2013 Annual Conference Hilton New Orleans Riverside 2 Poydras Street New Orleans, La. For more information, call (225) 590-5722 or visit www.lmla.com.

Wednesday-Friday, August 14-16 California Association of Mortgage Professionals 2013 Conference & Expo San Jose Marriott 301 South Market Street San Jose, Calif. For more information, call (916) 448-8236, ext. 107 or visit www.thecampsite.org.

Friday, November 1

OCTOBER 2013

Thursday, October 17 IAAMB—Mortgage Professionals of Iowa 2013 Convention Stoney Creek Inn 5291 Stoney Creek Court Johnston, Iowa For more information, call (800) 462-0077, e-mail director@iaamb.net or visit www.iaamb.net.

Saturday-Monday, October 19-21 NAMB National 2013 Harrah’s Las Vegas 3475 Las Vegas Boulevard South Las Vegas, Nev. For more information, call (972) 758-1151 or visit www.namb.org.

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 newsroom@nmpmediacorp.com.


LOOKING FOR A COMMITTED RELATIONSHIP? While some of our competitors were trying to get rid of you, AFR was figuring out ways to close more of your loans. Conventional - Conventional Fixed - Freddie Mac Open Access - Fannie Mae DU Refi Plus (Unlimited LTV/CLTV on HARP loans)

- Manufactured Housing VA - Purchases and Refinances - VA IRRRL Refinances - Manufactured Housing FHA - FHA Streamline - FHA Premium Plus - FHA $100 Down - FHA One Time Close - FHA 203(k) and 203(k) Streamline - Manufactured Housing

AFR DOES NOT CHARGE ANY LENDER FEES! To sign up as a TPO or Table Funded Broker, Correspondent or Correspondent with Delegated Underwriting Authority, call us at 888-913-3912 or online at AFRWholesale.com

USDA - Guaranteed Rural Housing Loan - Manufactured Housing

American Financial Resources’ Wholesale Division ranked #1 in total sponsored FHA loans closed and #1 in total sponsored 203k loans closed for all Non-Bank Lenders AFR is a nationwide, direct FHA lender and approved GNMA issuer. Our corporate office is located at 9 Sylvan Way, Parsippany, New Jersey 07054 • 1-888-664-2101 *AFR Wholesale Division ranked 1st in total sponsored FHA loans closed with a beginning amortization date between March 1, 2011, and February 28, 2013, for all non-bank lenders; ranked #4 overall as reported by HUD’s Neighborhood Watch (excludes streamlines). Intended for mortgage professionals only.



National Mortgage Professional Magazine June 2013