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A Commentary on the Transfer of Mortgage Loans to RBMS Securitization Trusts By Stephen Kudenholdt and Stephen F.J. Ornstein
The Secondary Market Overview: The New Financial Services Law … Long-Term Benefit By Dave Hershman
Value Nation: The Desk Appraisal Review Under the Microscope By Charlie W. Elliott Jr., MAI, SRA
The Trusted Mortgage Professional: Back on Track Encouraging Takeaways From This Year’s MBA Annual Convention By Greg Schroeder
Trend Spotter: Don’t Let America’s Lost Decade be Your Lost Decade By Gibran Nicholas
SAFE Smart … Credit When Credit Is Due By Paul Donohue, CRMS
Forward on Reverse: FIT for Reverse Mortgage Lenders: Part III … Why Lenders Must be FIT Smart
FHA Insider: FHA Update on CLTV Changes and UFMIP Refunds By Jeff Mifsud
Social Media: Take Two Breaths and E-mail Me in the Morning By Andrea Obston
Ask Tommy: Your QC Expert By Tommy A. Duncan, CMT
National Mortgage Professional Magazine’s 40 Under 40: The 40 Most Influential Mortgage Professionals Under 40
MRev Hits New York
A View From the C-Suite: Predictions and Strategies in a Down Market By David Lykken
2011: The Year of Big Decisions By Marve Stockert
Embrace These Five Actions and Grow in 2011 By Josephine Nicholas
The New Mortgage Company: Changing Your Business to Thrive in Today’s Market By Joshua Stein
Mortgage Professionals: Where Are You Headed in 2011?
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Professional Servicing Companies: The Key to Seller Carry-Back Loan Survival By Drew Louis
By Joy Gendusa
The NAMB Perspective
By Atare E. Agbamu, CRMS
November 2010 Volume 2 • Number 11
A Message From NMP Media Corp. Executive Vice President Andrew T. Berman What Thanksgiving Means to NMP
N A T I O N A L
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Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the authors alone and do not imply the opinion or endorsement of NMP Media Corp., or the officers or members of National Association of Mortgage Brokers and its State Affiliates (NAMB), National Association of Professional Mortgage Women (NAPMW), National Credit Reporting Association (NCRA) and/or other state mortgage trade associations. Participation in NAMB, NAPMW, NCRA, and/or other state mortgage trade associations events, activities and/or publications is available on a non-discriminatory basis and does not reflect the endorsement of the product and/or services by NMP Media Corp., NAMB, NAPMW, NCRA, and other state mortgage trade associations. National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, and/or other state mortgage trade associations do not make any misrepresentations or warranties concerning the regulatory and/or compliance aspects of advertisers, products or services and/or the editorial content contained in NMP Media Corp. publications. National Mortgage Professional Magazine and NMP Media Corp. reserve the right to edit, reject and/or postpone the publication of any articles, information or data.
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NAMB/WEST Our partnership with the National Association of Mortgage Brokers (NAMB) as their official magazine has brought us some great insights from the frontlines. This month, we feature a message from Mike Anderson, NAMB Government Affairs Committee Chair, talking about the need to band together to fight the predators preying upon mortgage originators. Make sure you are at NAMB/WEST in Las Vegas to learn how to protect yourself from these attacks. In addition,, it will be a great event to learn how to build your business in 2011 with some of the industry’s brightest minds, including Greg Frost, Frank Garay and Brian Stevens from Think Big Work Small, and other industry leaders.
Our 40 Mortgage Professionals of the Month Last year, the list was comprised mostly of originators. However, this year, we were more open to suggestions from individuals involved with mortgage technology, the secondary market and the servicing sector. While my roots are personally in the origination side of the business, I recognize that those individuals who bring technology, help with automation, provide access to products and give originators the ability to be competitive on pricing impact a larger pool of mortgages (literally and figuratively). So, the idea is to still highlight the originators out there who are crushing it (hat tip to Gary Vaynerchuk) and to also shine the spotlight on some of the individuals who empower these MLOs to help America with their real estate financing.
Positive vibes at this year’s MBA Convention This month’s Trusted Mortgage Professional column from Greg Schroder has some positive comments on the Mortgage Bankers Association (MBA) and its recent Annual Convention in Atlanta speculating that wholesale market is making a strong comeback. Mark Green of Top of Mind Networks attended the MBA Annual Convention to create video content for the upcoming launch of MortgageProfessional.TV. You will be able to see his footage in January 2011 on MortgageProfessional.TV. As Mark put it, “Suffice it to say, all in attendance agreed that 2011 is going to be another chaotic year in the mortgage business—and that the only thing that will stay the same is lots of change.”
Growth strategies As you prepare your goals for 2011, be sure to check out our Special Focus on Growth Strategies for 2011. The section starts off with David Lykken sharing some of his insights from his panel discussion at the MBA Annual Conference. Following David, Marve Stockert provides a number of planning tips for 2011. Then, you can grab five strategies from Josephine Nicholas that will be sure to help you grow in 2011. Joshua Shein shares some business models to look at to see what is right for you and your organization, and this month’s focus wraps up with a piece from direct mail expert, Joy Gendusa, on three strategies to grow your business in the new year. Until next month ...
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For me, I, like everyone else, am thankful that I have a wonderful family, great friends and a team of wordsmiths, designers and business development experts that help us deliver a product that just keeps growing (much like my waistline on Thanksgiving!). I also want to take the time to give thanks to our readers for helping us create this magazine each month by letting us know what they want to see in an industry publication. I also need to give thanks to our thoughtful and inspiring monthly contributors. Folks like Dave Hershman, with his monthly update on the secondary market, or Charlie W. Elliott Jr. who provides his insights from the frontlines of the valuation business. How about industry leaders like Gibran Nicholas of the CMPS Institute who attended “The Future of Housing Finance” conference, hosted by the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, on behalf of National Mortgage Professional Magazine. Gibran learned the sobering fact that this was nothing more than a photo-op. He does continue on with a pretty motivating message for our readers. We also cannot forget one of the top reverse mortgage authorities in the nation, Atare E. Agbamu, who, this month, brings us the third installment of his FIT for Reverse Mortgage Lenders series. I am also really thankful for one of my longtime favorite trainers in the industry, Paul Donohue. We enjoy sharing his insights on the SAFE Act and industry training grace the pages of our publication each month. This month, Paul covers the controversial credit reports that mortgage loan originators are subject to. And how can I forget our “FHA Insider” Jeff Mifsud? Our readers are very thankful for the insights on FHA that he has shared with us over the years, and this month, he covers CLTV changes and UFMIP refunds. How about David Lykken’s view from the C-Suite? I am honored to have the top mortgage banking consultant share monthly his insights on what he sees with mortgage industry CEOs, CIOs, CSOs, COOs and other C-Level executives. Last, but certainly not least, I’d like to mention Tommy A. Duncan. Tommy has been writing his “Ask Tommy: Your QC Expert” column since we launched the magazine. He has provided some great insights on loan quality as he sees it, looking at the data from all sources of origination, from credit unions, to community banks, to TPOs, to big banks and everything in between. I thank him for his great articles and also his service to our country. While you might know him as executive vice president of Quality Mortgage Services, many don’t know he is also an active duty lieutenant colonel commanding a battalion with 30 years of service and has earned multiple campaign badges.
National Mortgage Professional Magazine is published monthly by NMP Media Corp. Copyright © 2010 NMP Media Corp.
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NAMB Board of Directors Officers President—William R. Howe, CMC, CRMS Howe Mortgage Corporation 13322 East Paradise Drive Scottsdale, AZ 85259 (602) 200-8100 firstname.lastname@example.org President-Elect—Michael D’Alonzo, CMC Creative Mortgage Group 1126 Horsham Road, Suite D Maple Glen, PA 19002 (215) 657-9600 email@example.com Vice President—Donald J. Frommeyer, CRMS Amtrust Mortgage Funding Inc. 200 Medical Drive, Suite D Carmel, IN 46032 (317) 575-4355 firstname.lastname@example.org Secretary—Virginia Ferguson, CMC Heritage Valley Mortgage Inc. 5700 Stoneridge Mall Road, Suite 225 Pleasanton, CA 94588 (925) 469-0100 email@example.com Treasurer—John Councilman, CMC,CRMS AMC Mortgage Corporation 2613 Fallston Road Fallston, MD 21047 (410) 557-6400 firstname.lastname@example.org Immediate Past President—Jim Pair, CMC Mortgage Associates Corpus Christi 6262 Weber Road, Suite 208 Corpus Christi, TX 78413 (361) 853-9987 email@example.com
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lower than the profits in the second quarter of 2009. Walsh said, “A year before, quarterly production volume averaged $280.9 million and the refinancing share was over 60 percent. The heavy volume and refinancing share helped lower perloan operating costs to $3,414 per loan and profits soared to $1,358 per loan.” For more information, visit www.mortgagebankers.org.
Federal Reserve Board announces rule protecting the integrity of the appraisal process
MBA survey finds mortgage bankers made $300-plus more per loan in Q2 over Q1
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Independent mortgage bankers and subsidiaries made an average profit of $917 on each loan they originated in the second quarter of 2010, up from $606 per loan in the first quarter of 2010, according to the Mortgage Bankers Association (MBA)‘s Second Quarter 2010 Mortgage Bankers Performance Report. The increase was driven by a rise in the average production volume for each firm to $196.6 million in the second quarter of 2010, compared to $157.8 million in the first quarter of 2010. As a result, production operating expenses decreased to
$4,677 per loan in the second quarter of 2010, from $5,147 per loan in the first quarter of 2010. “The significant rise in loan origination volume during the second quarter reflects the surge in first-time homebuyers seeking to take advantage of the tax credit before the deadline expired,” said Marina Walsh, MBA’s associate vice president of industry analysis. “Higher production operating expenses typically are associated with purchase production compared to refinances. But in this case, fixed costs were spread out over more loans and lenders experienced higher pull-through rates. These factors help explain why operating expense dropped on a per-loan basis by $470 per loan between quarters.” However, average profits in the second quarter of 2010 were significantly
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The Federal Reserve Board (FRB) has announced an interim final rule to ensure that real estate appraisers are free to use their independent professional judgment in assigning home values without influence or pressure from those with interests in the transactions. The rule also seeks to ensure that appraisers receive customary and reasonable payments for their services. The interim final rule includes several provisions that protect the integrity of the appraisal process when a consumer’s home is securing the loan. The interim final rule: Prohibits coercion and other similar actions designed to cause appraisers to base the appraised value of properties on factors other than their independent judgment; Prohibits appraisers and appraisal management companies hired by lenders from having financial or
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other interests in the properties or the credit transactions; Prohibits creditors from extending credit based on appraisals if they know beforehand of violations involving appraiser coercion or conflicts of interest, unless the creditors determine that the values of the properties are not materially misstated; Requires that creditors or settlement service providers that have information about appraiser misconduct file reports with the appropriate state licensing authorities; and Requires the payment of reasonable and customary compensation to appraisers who are not employees of the creditors or of the appraisal management companies hired by the creditors. The interim final rule is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Compliance will be mandatory on April 1, 2011. Public comments are due 60 days after the interim final rule is published in the Federal Register, which is expected soon. For more information, visit www.federalreserve.gov.
Zillow report finds 33 percent of Americans do not qualify for a mortgage Nearly one-third of Americans are unlikely to qualify for a mortgage because their credit scores are too low, making homeownership out of reach for many, according to an analysis of
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Coester Appraisal survey finds appraiser inexperience populates the marketplace A recently conducted survey of more than 5,000 licensed appraisers across the country contradicts lenders’ continued on page 8
Although the rise in sub-prime lending and the ensuing wave of foreclosures was partly a result of market forces that have been well-documented, the foreclosure crisis was also a highly racialized process, according to a study by two Woodrow Wilson School scholars published in the October 2010 issue of the American Sociological Review. Woodrow Wilson School Ph.D. candidate Jacob Rugh and Woodrow Wilson School’s Henry G. Bryant, professor of sociology and public affairs; and Douglas Massey, assessed segregation
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
Study finds race a factor in foreclosure process
and the American foreclosure crisis. The authors argue that residential segregation created a unique niche of minority clients who were differentially marketed risky sub-prime loans that were in great demand for use in mortgage-backed securities (MBS) that could be sold on secondary markets. The authors use data from the 100 largest U.S. metropolitan areas to test their argument. Findings show that black segregation, and to a lesser extent Hispanic segregation, are powerful predictors of the number and rate of foreclosures in the United States— even after removing the effects of a variety of other market conditions such as average creditworthiness, the degree of zoning regulation, coverage under the Community Reinvestment Act (CRA), and the overall rate of sub-prime lending. “This study is critical to our understanding of the foreclosure crisis since it shows the important and independent role that racial segregation played in the housing bust,” said Rugh. A special statistical analysis provided strong evidence that the effect of black segregation on foreclosures is causal and not simply a correlation. “While policy makers understand that the housing crisis affected minorities much more than others, they are quick to attribute this outcome to the personal failures of those losing their homes—poor credit and weaker economic position,” noted Massey. “In fact, something more profound was taking place; institutional racism played a big part in this crisis.” The authors conclude that Hispanic and black racial segregation was a key contributing cause of the foreclosure crisis. “This outcome was not simply a result of neutral market forces but was structured on the basis of race and ethnicity through the social fact of residential segregation,” the authors note in the article. “Ultimately, the racialization of America’s foreclosure crisis occurred because of a systematic failure to enforce basic civil rights laws in the United States,” the authors write in the article. “In addition to tighter regulation of lending, rating, and securitization practices, greater civil rights enforcement has an important role to play in cleaning up U.S. markets. It is in the nation’s interest for federal authorities to take stronger and more energetic steps to rid U.S. real estate and lending markets of discrimination, not simply to promote a more integrated and just society but to avoid future catastrophic financial losses.” For more information, visit www.asanet.org.
more than 25,000 loan quotes and purchase requests on Zillow Mortgage Marketplace during the first half of September 2010. Borrowers with credit scores under 620 who requested purchase loan quotes for 30-year fixed, conventional loans were unlikely to receive even one loan quote on Zillow Mortgage Marketplace, even if they offered a relatively high downpayment of 15-25 percent. Nearly one-third of Americans, or 29.3 percent, has a credit score this low, according to data provided by myFICO.com. Meanwhile, the lowest interest rates went to mortgage borrowers who were among the 47 percent of Americans with excellent credit scores of 720 or above. In the first half of September, borrowers with credit scores of 720 or above got an average low annual percentage rate (APR) of 4.3 percent for conventional 30-year fixed mortgages. Borrowers with mid-range credit scores between 620 and 719 received APRs between 4.73 and 4.44 percent, with the APR rising as credit score drops. Those with credit scores below 620 received too few loan quotes to calculate average low APR. For those with mid-range credit scores of 620 to 719, improving one’s credit score can mean a significant savings in interest over time. For each 20point credit score increase, the average low APR declines 0.12 percent, which for a $300,000 home, with a 20 percent downpayment, equates to a savings of $6,400 over the life of a 30-year loan. “We are in an era of historically low mortgage rates, reaching levels not seen in decades. Coupled with four years of home value declines, homes are more affordable than we’ve seen for years. But the irony here is that so many Americans can’t qualify for these low rates, or can’t qualify for a mortgage at all,” said Zillow Chief Economist Dr. Stan Humphries. “Four years ago, in the era of easy-to-get subprime loans, many borrowers with low scores did buy homes, which in turn helped contribute to a housing bubble. Today’s tighter credit is a predictable response by banks after the foreclosure crisis, but also keeps a cap on housing demand, which is important for the greater housing market recovery.” For more information, visit www.zillow.com.
A Commentary on the Transfer of Mortgage Loans to RMBS Securitization Trusts By Stephen Kudenholdt and Stephen F.J. Ornstein
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There is a tremendous amount of public 2. A lien on real property collateral securcommentary these days about possible ing this obligation to repay the debt, defects in foreclosure proceedings com- which is created by a mortgage or a deed menced by loan servicers. Much of this dis- of trust. cussion concerns procedural matters, such As used in this article, â€œmortgageâ€? as whether the appropriate steps are being taken to verify the accuracy of statements includes a deed of trust. Transfers of notes are governed by made in affidavits executed applicable state contract in connection with these law including the Uniform proceedings. These issues Commercial Code (UCC). are very fact specific and it Transfers of a mortgage or may take some time to deed of trust are generalascertain what effect, if any, ly governed by state real they may have on any given property law. While these loan. laws do not conflict, they Within this overall diado have the result of logue, however, more funtransfers of mortgage damental issues have been loans being legally comraised challenging both the plex. There is no single validity of the procedures legally prescribed format used to convey mortgage Stephen Kudenholdt for transferring mortgage loans into securitization â€œâ€Ś the industry stan- loans, such as the certifitrusts and the qualification cate of title rules for of the securitization trusts as dard procedures used for decades in transmotor vehicles. In addia real estate mortgage ferring mortgage tion, ownership of a investment conduit (REMIC) at the time those trusts were loans to securitization mortgage loan does not require the owner to formed. These statements vehicles comply with are false and misguided. the well-settled princi- have recorded an assignment of the mortgage in The reasoning behind ples of law governing the real property records. these statements appears the transfer of mortThere are decades of to be as follows: gage loans, and there- custom and practice in fore, are effective to the transfer of mortgage 1. In order to satisfy proloans as between the origcedural requirements in transfer ownership of inator and successive purconnection with foreclothe mortgage loans.â€? chasers or into a securitisure, certain steps may need to be taken in order to document zation. The practices used in conveying the ownership of a mortgage loan by mortgage loans to private label securitization trusts are consistent with the the securitization trust; and 2. Since not all of these steps were taken at practices used in transferring mortgage the time of the securitization, the securiti- loans to Fannie Mae and Freddie Mac. In zation trust must not own the mortgage addition, these practices are the same loan. This reasoning is faulty, because some practices used in sales of mortgage loans of the steps that may be required under (whole loan sales) in transactions prior to applicable state law in order to bring a or not involving a securitization, as foreclosure action are not required to between the originator and successive purchasers in these whole loan sales. transfer ownership of the mortgage loan. These standard transfer procedures The purpose of this article is to refute are essentially designed to meet three these challenges to the efficacy of mort- objectives: gage loan transfers to securitization trusts. Simply stated, the industry standard pro- 1. Document the partiesâ€™ intent to effect cedures used for decades in transferring a sale of the mortgage loans and mortgage loans to securitization vehicles memorialize all terms and conditions of comply with the well-settled principles of that sale; law governing the transfer of mortgage 2. Evidence the transfer of ownership loans, and therefore, are effective to by delivering the physical notes with transfer ownership of the mortgage loans. endorsements consistent with UCC provisions, which protects the purchaser from being subject to adverse third Standard procedures for transferring a mortgage loan party claims in the mortgage loans; and A mortgage loan can be thought of as a 3. Enable the purchaser to become the mortgagee of record as needed for forebundle of rights, including: closure proceedings or other purposes. 1. A borrowerâ€™s obligation to repay continued on page 10 debt, evidenced by a note; and
The New Financial Services Law: Long-Term Benefit
dence to the world that our mortgages are safe to purchase. If it works, a healthy secondary market will mean lower rates and more choices in the long run, which will help restore long-term health to the real estate markets. If the secondary market begins to strengthen, it can start evolving again … and that is what will start the pendulum swinging back. Only this time, it can evolve within a healthy regulatory framework. There is no doubt that a lack of regulation with regard to the markets helped an unhealthy situation become worse. Too much regulation? Perhaps. But it is a necessary medicine to fix a very sick system. Most everyone agrees that the real estate markets will take a long time to heal. A healthy secondary market for mortgages is one of the more important parts of this healing process. In reality, they will both heal
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not continue to be healthy in the future. It is true that most in this industry consider this legislation just another aspect of government intrusion. After all, we already have the government taking over the world in the wake of the financial crisis, including hundreds of billions of dollars in stimulus spent over the past three years, bailing out major corporations and putting Fannie Mae and Freddie Mac into conservatorship. However, believe it or not, sometimes a higher level of government regulation can actually have the longerterm result of lessening the need for government involvement. How can that be? One impact of the financial crisis was that the secondary markets for home loans pretty much shut down in response to this crisis. Not only were the secondary giants— Fannie Mae and Freddie Mac—basically bankrupt, what investors were going to purchase securities backed by mortgages as they were defaulting and home prices were declining? Immediately, rates on home loans rose even as the Federal Reserve Board was lowering benchmark rates because of this lack of confidence. The most dramatic affect was on jumbo mortgages, as this market dried up completely. The Fed stepped in and became the primary purchaser of these loans, as well as purchasing Treasury securities. This helped stabilize the markets. The good news is what resulted from these actions. What could have resulted in hundreds of billions in losses for the government with regard to this operation actually has turned out to be profitable. Rarely has there been such a “winwin” result as the markets also stabilized. We should mention also that the recently “retired” TARP program has been met with similar success in regard to at least limiting losses to the government as banks and automobile companies were also saved. But here is the problem, the government cannot support the secondary markets forever just as it cannot own stakes in private companies forever. That is not how capitalism works. The tight controls upon home loan programs and underwriting sought by the financial services legislation may restrict choices with regard to exotic mortgages for consumers and business models for originators, but they are designed to give confi-
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The long-term benefit of financial services legislation Recently, I hosted a Webinar which covered a summary of the new financial services legislation as it affects those in the mortgage industry. We had a guest speaker, Jim Milano of Weiner, Brodsky, Sidman and Kider PC, who focused on the topic of greatest interest to mortgage loan officers, compensation. Of course, the feedback we have heard time and time again, is “woe is us.” The industry will never be the same. Actually, the industry will be the same. This legislation completes a cycle that takes it back to where it was 30 years ago when I first got in the industry. We had some fixedrate loans, adjustable-rate loans and some growing equity mortgages, but nothing fancy. There were no overages paid. Banks had lists of approved appraisers and that is all you could use. There wasn’t much of a secondary market outside of being able to sell government and conforming loans, and I made quite a good living at that time. Now in reality, I don’t think that the industry will stay at this 30-year-ago phase. This is truly a pendulum that was swung completely to the other side from the cowboy days of just five years ago. The pendulum will swing back. But it will swing back more slowly and not nearly as far. The legislation really makes sure this pendulum does not move as violently as it has in the past. That is probably a good thing. Not only had the industry swung too far, but it has also swung too fast. Who could possibly keep up with the changes? That is one reason I moved to having a legislative update two to three times per week as part of our Certified Mortgage Advisor program (www.webinars.originationpro.com) and I can tell you that it has been a major task for me to keep up to communicate this information on a timely basis. Rather than just continue with the “woe is me” bent on all the information coming out with regard to the financial services and all the other legislation, I would like to advance one very important benefit for the mortgage and real estate industries—survival. Perhaps I am being a bit melodramatic about what is happening here, but I don’t think so. There is nothing that is more important that what has happened within this industry and what could go wrong if this industry does
slowly, together. Meanwhile, don’t be surprised that the foundation will be put in place for a recovery that comes more quickly than many are predicting. Why? There will be pent up demand and population growth. Even those who are relegated to renting will need homes in the future. But first, the foundation must be put in place.
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and independent appraisersâ€™ claims that appraisal management companies (AMCs) are employing inexperienced appraisers and are significantly underpaying appraisers. The survey, which was conducted by Maryland-based AMC Coester Appraisal Group, revealed that only three percent of appraiser respondents have less than five years of experience, and more than half have been in the business for 15 years or more. Additionally, almost two thirds of appraisers earn $250 to $350 per appraisals assigned through an appraisal management companyâ€”fees that are well above the rumored $180 to $220 fees that appraisal management companies are believed to pay appraisers, according to Brian Coester, chief executive officer of Coester Appraisal Group. When working on their own as independent appraisers, almost 40 percent earn $250-$350 per appraisal. The use of AMCs surged when the Home Valuation Code of Conduct (HVCC) went into effect in May 2009. Since then, numerous lenders and independent appraisers have been accusing appraisal management companies of taking an unfair percentage of appraisal fees while also producing lower quality appraisalsâ€”supposedly
requirements such that the mortgage never should have been endorsed by the mortgagee in the first place just as FHA would not have insured the mortgage on its own. Specifically, these lenders may be required to indemnify HUD if they failed to: (1) Verify and analyze the creditworthiness, income, and/or employment of the borrower; (2) verify the source of assets brought by the borrower for payment of the required downpayment and/or closing costs; (3) address property deficiencies identified in the appraisal affecting the health and safety of the occupants or the structural integrity of the property; or (4) ensure that the property appraisal satisfies FHA appraisal requirements. HUD may seek indemnification irrespective of whether the violation caused the mortgage default. While HUD will seek indemnification in cases of fraud or misrepresentation at any time, the Department intends to codify a â€˜reasonable time periodâ€™ for requiring indemnification in cases where the mortgagee failed to meet FHA requirements. For those cases not involving fraud or misrepresentation, it has been HUDâ€™s long-standing practice of requiring indemnification â€œwithin five years from the date of mortgage insurance endorsement.â€? The date of endorsement is a fixed date, and therefore has the benefit of
HUD issues proposed rule to solidify the FHA lender indemnification process completed by grossly inexperienced appraisersâ€”at higher prices than their independent counterparts. â€œQuite a few negative misconceptions about AMCs have been getting a lot of media coverage, which is fueling undue distress among lenders and appraisers,â€? said Coester. â€œAs an AMC, we knew those claims were unfounded, but just to be absolutely sure appraisers felt the same way, we set up a survey to get their feedback first-hand.â€? The survey, which was completed in August 2010, tracks the responses of 5,384 licensed appraisers throughout the U.S. The study revealed that over half (52.4 percent) of respondents feel that an ideal fee of $350 to $400 would allow for the highest quality of work on a conventional appraisal, and 45.3 percent said that $400 to $450 would allow for high-quality Federal Housing Administration (FHA) appraisals. Nearly 78 percent of respondents stated that the typical fees they were receiving were enough for them to do their highest quality of work, more than 82 percent feel that AMCs should keep a percentage of 15 percent or less, and almost 17 percent felt that AMCs were entitled to 15 to 30 percent. For more information, visit www.coesterappraisals.com.
The U.S. Department of Housing & Urban Development (HUD) has proposed new regulations to strengthen its authority to force certain lenders to indemnify or reimburse the Federal Housing Administration (FHA) for insurance claims paid on mortgages that are found not to meet the agencyâ€™s guidelines. In addition, HUDâ€™s proposed rule would require all new and existing lenders with the ability to insure mortgages on HUDâ€™s behalf (Lender Insurance mortgagee) to meet stricter performance standards to gain and maintain their approval status. Last January, FHA announced a series of policy changes to address risk and strengthen the financial position of its insurance fund. This announcement will create a regulatory framework and codify the legal authority FHA currently has under the National Housing Act. â€œItâ€™s important that our expectations are crystal clear,â€? said FHA Commissioner David H. Stevens. â€œWe need to clarify which circumstances weâ€™ll require indemnification and the level of loan performance we expect lenders to maintain.â€? For those lenders with special authority to insure mortgage loans on FHAâ€™s behalf, HUD seeks to force indemnification for â€˜serious and materialâ€™ violations of FHA origination
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transfer of mortgage loans General custom and practice in the sale of mortgage loans involves three key steps from a documentary perspective:
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seller in blank, are also key components in the sale of mortgage loans for several reasons. First, because mortgage notes are generally “instruments” Contract under the UCC, possession of the mortIn mortgage loan sale transactions, gage note by the purchaser in a valid there is almost always a contractual sale is generally sufficient to establish agreement as between seller and pur- that the purchaser’s ownership rights chaser which: Clearly establishes the are superior to the rights of any other parties intent to sell the mortgage person in the mortgage loan. Second, loans to the purchaser; identifies the as an “instrument,” the note can be specific mortgage loans being sold by transferred and the purchaser will be use of a loan level schedrecognized as the holder ule; contains granting in accordance with applilanguage which states cable UCC provisions, that it conveys ownership upon physical delivery of of the mortgage loans; the note to the purchaser identifies the time of with an endorsement sale; and specifies the (which may be in blank). governing law for the sale The question of whether a transaction (frequently, mortgage note is a negothe laws of the State of tiable instrument is factNew York are designated specific, and the standard by the parties as the govtransfer procedures are erning law). These condesigned to be effective Stephen F.J. Ornstein tractual agreements typiirrespective of whether it cally also contain repre“The question of is a negotiable instrusentations and warment. Third, since there is whether a mortgage ranties made by the sellgenerally only one physinote is a negotiable er. An agreement of this cal note per mortgage instrument is facttype is essential to establoan, delivery by the sellspecific, and the lish the parties’ intent to er to the purchaser effecstandard transfer sell the loan, to actually tively prevents the seller procedures are convey the loan to the from engaging in any misdesigned to be effecpurchaser and to articutaken, improper or fraudtive irrespective of late the terms and condiulent sale or pledge of the tions of the sale. (Delivery mortgage loans to multiwhether it is a negoof the note and an assignple parties. Fourth, postiable instrument.” ment of mortgage, while session of the mortgage important for the reasons discussed note may be needed for enforcement below, do not in and of themselves of the note in the event of default, establish the parties intent and articu- including by foreclosure. late the terms and conditions of the Notes may be delivered to the pursale.) chaser with an endorsement in blank. It In a private label residential mort- is common for a mortgage note for a gage-backed securities (RMBS) transac- mortgage loan that has been sold to tion, the relevant contractual agree- have stamped on it an endorsement to ment is typically a pooling and servic- the effect of “Pay to the order of_____, ing agreement, which conveys the without recourse,” signed by the origimortgage loans from the depositor to nator or a subsequent purchaser. Such the trustee on behalf of the securitiza- an endorsement has the effect that any tion trust. Another relevant document subsequent transfer of the note precould include a separate mortgage loan sumptively only requires physical delivpurchase agreement, under which the ery (i.e., with no additional endorsemortgage loans are sold by the sponsor ment). Therefore, where there are sucto the depositor immediately prior to cessive purchasers to a note, the the sale from the depositor to the trust, endorsement in blank by any prior holdwith representations and warranties er is a sufficient endorsement for purthat are assigned to the trustee. These poses of the most recent purchaser. For documents contain clear granting lan- this reason, a mortgage note that has guage that conveys ownership of all of been transferred numerous times typithe seller’s “right, title and interest in cally will only show one endorsement, and to” the mortgage loans to the which remains in blank. Importantly, for trustee on behalf of the securitization all purposes for which an endorsement trust. There is a schedule or exhibit to of a mortgage note may be necessary or these documents that specifically iden- desirable in connection with a sale of tifies each loan sold under the agree- the mortgage note, an endorsement in ment. blank is sufficient and is equally effective as an endorsement where the name Delivery of Note is filled in. Physical delivery of the mortgage note In private label RMBS transactions, to the purchaser or its agent, together with an endorsement of the note by the continued on page 16
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The Securities & Exchange Commission (SEC) has charged a pair of employees at Boston-based State Street Bank and Trust
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NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
SEC charges two State Street employees with misleading sub-prime mortgage info
Company with misleading investors about their exposure to sub-prime investments. The SEC’s Division of Enforcement claims that John P. Flannery and James D. Hopkins marketed State Street’s Limited Duration Bond Fund as an “enhanced cash” investment strategy that was an alternative to a money market fund for certain types of investors. By 2007, however, the fund was almost entirely invested in sub-prime residential mortgage-backed securities (RMBS) and derivatives. Yet despite this expo-
accountable those who violated the law and harmed investors through subprime investments.” According to the SEC’s order instituting administrative proceedings against Hopkins and Flannery, they played an instrumental role in drafting a series of misleading communications to investors beginning in July 2007. Flannery was a chief investment officer who no longer works at State Street. Hopkins was a product engineer at the time, and is currently State Street’s head of product engineering for North America. According to the SEC’s order, the misleading communications to
being known to both HUD and the lenders with the authority to self insure mortgages. HUD believes five years is a reasonable “seasoning” period for a particular mortgage loan to either perform or go into default and for the Department to ascertain whether origination errors were made. In addition, this five-year period is not considered a burden to lenders who might otherwise face the possibility of indemnifying insurance claims made on long-ago endorsed mortgage loans. The proposed rule will also require those mortgagees with delegated lender insurance authority to continually maintain an acceptable claim and default rate, both to gain this special lender status as well as to preserve it. HUD proposes that all new unconditional direct endorsement lenders who have the authority to self-insure mortgages must demonstrate a default and claim rate at or below 150 percent for the previous two years. This standard would apply to the state/states where the lender does business, rather than a national default/claim average. The present regulation defines an acceptable claim and default as at or below 150 percent of either: (1) The national average rate for all insured mortgages; or (2) if the mortgagee operates in a single state, the average rate for insured mortgages in the state. The current regulation may make it easier for a single-state lender to meet the acceptable standard if that lender operates in a state that has a high default rate. In contrast, a mortgagee would be disadvantaged by having its claim and default rate compared to the national average if the mortgagee operates in states with comparatively high default rates, even if the mortgagee is in full compliance with FHA requirements and otherwise eligible for “Lender Insurance” approval. HUD believes the proposed methodology will more accurately reflect mortgagee performance by evaluating each mortgagee based on its actual area of operations. FHA will continually monitor lender performance rather than conduct an annual review of each “Lender Insurance” mortgagee. The FHA will also consider the two-year default and claim performance of either entity in the case of acquisition or merger without requiring these entities to seek a waiver. FHA, at its own discretion (without any judicial or administrative action) also clarifies that it has the authority to immediately withdraw a lender’s ability to selfinsure mortgage loans. For more information, visit www.hud.gov.
sure to sub-prime securities, the fund continued to be described as less risky than a typical money market fund and the extent of its concentration in subprime investments was not disclosed to investors. The SEC charged State Street in a related case earlier this year and the firm agreed to settle the charges by repaying fund investors more than $300 million. “Hopkins and Flannery misled State Street’s investors about the risks and credit quality of a fund concentrated in subprime bonds and other subprime investments,” said Robert Khuzami, director of the SEC’s Division of Enforcement. “The SEC is committed to identifying and holding
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In an effort to inform the current discussion on the future of the housing finance system, the Federal Housing Finance Agency (FHFA) has released data on Fannie Mae and Freddie Mac
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NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
FHFA releases data on Fannie and Freddie single-family mortgages for 2001-2008
that compare the credit quality and performance of the loans they acquired relative to loans financed with privatelabel mortgage-backed securities (MBS). “Data on the Risk Characteristics and Performance of Single-Family Mortgages Originated From 20012008 and Financed in the Secondary Market” documents the differences in single-family, conventional mortgages acquired by the government-sponsored enterprises (GSEs) versus those financed through the issuance of pri-
loans had LTV ratios at origination of 80 percent or less, while two-thirds of mortgages financed with private-label MBS had LTV ratios at or below 80 percent, with that share increasing from 54 percent of 2001 originations to 81 percent of 2008 originations. The pattern of decreasing LTV ratios over time, most pronounced for loans financed with private-label MBS, is consistent with the greater use of second liens to avoid mortgage insurance on low-down payment mortgages, a practice that was increasingly common into 2007 and that contributed to the unusually poor performance of loans with low LTV ratios relative to past experience.
investors related to the effect of the turmoil in the subprime market on the Limited Duration Bond Fund (established in 2002) and other State Street funds that invested in it. State Street provided certain investors with more complete information about the fund’s subprime concentration and other problems with the fund. These betternotified investors included clients of State Street’s internal advisory groups, which provided advisory services to some of the investors in the fund and the related funds. The SEC’s Division of Enforcement alleges that State Street’s internal advisory groups, one of which reported directly to Flannery, subsequently decided to recommend that all their clients redeem from the fund and the related funds. The pension plan of State Street’s publicly-traded parent company (State Street Corporation) was one of those clients. At the direction of Flannery and State Street’s Investment Committee, State Street sold the fund’s most liquid holdings and used the cash it received from these sales to meet the redemption demands of better informed investors. This left the fund and its remaining investors with largely illiquid holdings. In the settlement with the firm, announced jointly by the SEC and the offices of Massachusetts Secretary of State William F. Galvin and Massachusetts Attorney General Martha Coakley, State Street agreed to pay more than $300 million to investors who lost money during the sub-prime market meltdown in 2007. State Street distributed those funds to investors in February and March. State Street additionally paid nearly $350 million to investors to settle private lawsuits. When the SEC announced its settlement with State Street in February, it also announced that State Street had agreed—pursuant to a limited privilege waiver—to provide information to enable the SEC to assess the potential liability of individuals involved with State Street’s investor communications about the fund. The SEC’s case was investigated by Robert Baker, Cynthia Baran, Deena Bernstein, and John Kaleba. The SEC’s litigation against Hopkins and Flannery will be led by Bernstein, Kathy Shields and Baker. For more information, visit www.sec.gov.
vate-label mortgage-backed and asset-backed securities (private-label MBS) during the recent mortgage lending and house price boom and the ensuing bust. Eighty-four percent of single-family mortgages acquired by the enterprises during 2001 to 2008 were made to borrowers with FICO credit scores above 660, while five percent were made to borrowers with FICO scores below 620. In contrast, 47 percent of mortgages financed with private-label MBS originated during this period were made to borrowers with FICO scores above 660, while 32 percent were made to borrowers with FICO scores lower than 620. Over 82 percent of GSE-acquired
For more information on the National Association of Mortgage Brokers, visit www.namb.org.
NAMB/WEST 2010 Saturday-Monday, December 4-6, 2010 MGM Grand • Las Vegas For more information, visit www.nambwest.com.
4:00 p.m.-6:00 p.m. ..............NAMB Government Affairs Committee Meeting
Scarcity … The rule of the rare … emphasize genuine scarcity, unique features, exclusive information. The ethical use of influence means being honest and maintaining integrity. Within these principles are triggers that cause people to say, “Yes.” These are the teachings of Robert Cialdini, Ph.D., author of The Principles of Ethical Influence. Greg Frost will present the psychology, establish the science, stipulate that science can be learned, and then share the practical applications of the science in his market-proven strategies, systems and tactics that he has used for years to grow his business. What’s old is new.
5:00 p.m.-6:00 p.m. ..................................NAMB Ethics Committee Meeting
1:45 p.m.-2:00 p.m. ........................................................................Break
6:00 p.m.-7:00 p.m. ............NAMB By-Laws & Education Committee Meetings
2:00 p.m.-4:00 p.m. ............Video Workshop: Brian Stevens & Frank Garay of Think Big Work Small
Program of Events 14
(Subject to change)
Friday, December 3 2:00 p.m.-6:00 p.m.........................................................Registration Open
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4:00 p.m.-5:00 p.m. ........................NAMB Membership Committee Meeting
6:00 p.m.-8:00 p.m. ................................NAMB Finance Committee Meeting
7:30 a.m.-5:00 p.m. ......................................................Registration Opens
3:30 p.m.-4:30 p.m. ............................................FHA Mortgage (1 CE Hour) Additional fee applies for NMLS and class materials. Limited seating. Register online in advance to attend this class.
8:00 a.m.-9:00 a.m. ..............................Allison Jenkins of Hondros Learning American Society for Asset Protection
4:00 p.m.-5:00 p.m. ..................Session Featuring Steve Richman, Marketing Manager, National Spokesperson and Trainer With Genworth
Saturday, December 4
8:00 a.m.-10:00 a.m. ......................................................Ethics (2 CE Hours) Additional fee applies for NMLS and class materials. Limited seating. Register online in advance to attend this class. 9:00 a.m.-9:15 a.m...........................................................................Break 9:15 a.m.-10:15 a.m. ......................A Presentation From Orawin Velz, Senior Economist, Fannie Mae
4:00 p.m.-6:00 p.m.....................................Speed Dating … Mortgage Style! 4:45 p.m.-6:45 p.m. ......................................Reverse Mortgage (2 CE Hours) Additional fee applies for NMLS and class materials. Limited seating. Register online in advance to attend this class. 7:00 p.m.-9:00 p.m. ....................................Networking Cocktail Reception
10:15 a.m.-10:30 a.m. ......................................................................Break
Sunday, December 5
10:30 a.m.-11:45 a.m. ................................A Presentation From the Federal Housing Administration (FHA)
8:00 a.m.-11:00 a.m. ..................NAMB Government Affairs Panel Discussion
Noon-1:45 p.m. ......Lunch With Greg Frost: The Principles of Ethical Influence Reciprocity … Be the first to give, service, information, concessions. Authority … Establish your position through professionalism, industry knowledge, your credentials, admitting weaknesses first. Consensus … Unleash people power by showing responses of many others, others’ past successes, testimonials from similar others. Liking … Uncover similarities, areas for genuine compliments and opportunities for cooperation. Consistency … Start small and build with existing commitments toward voluntary choices.
7:30 a.m.-5:00 p.m. ........................................................Registration Open
10:00 a.m.-1:00 p.m. ..............................Federal Law Education (3 CE Hours) Additional fee applies for NMLS and class materials. Limited seating. Register online in advance to attend this class. 1:00 p.m.-6:00 p.m. ........................................................Exhibit Hall Open 6:00 p.m.-8:00 p.m. ....................................Networking Cocktail Reception
Monday, December 6 8:30 a.m.-12:30 p.m. ..................................NAMB Delegate Council Meeting 1:30 p.m.-4:00 p.m. ..................................................NAMB Board Meeting
A Message From NAMB Government Affairs Committee Chair Mike Anderson, CRMS
Mike Anderson, CRMS, Government Affairs, PAC Chair and Board Member National Association of Mortgage Brokers
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If you aspire to reach new heights with your business, then it’s time to explore joining Inlanta Mortgage through a strategic partnership or merger. For nearly two decades we’ve provided stable ﬁnancial backing, a wide range of products, an experienced team, and unparalleled support services – marketing, compliance, processing, human resources, training, technology, accounting, legal, in-house funding, and underwriting.
The Government Affairs team of the National Association of Mortgage Brokers (NAMB) has been very active so far this year and has had some significant impact with lawmakers and regulators in Washington, D.C. The most recent victory is the recently released appraisal independence announcement from the Federal Housing Finance Agency (FHFA) and Fannie Mae. NAMB has fought hard and had several meetings with FHFA/Fannie Mae to stress the importance of appraisal independence and portability. Well, they listen to us, and on Oct. 14, the announcement was made and appraisal portability was included. NAMB was invited to attend two very important meetings this year. The first meeting was the Future of Housing Conference hosted by the U.S. Department of the Treasury and the U.S. Department of Housing & Urban Development (HUD). The intention of the meeting was to gather thoughts and ideas of the future of the government-sponsored enterprises (GSEs) and housing finance in general. NAMB presented a position paper on our thoughts for where the GSEs’ role should be in the future, which can be found on the NAMB Web site, www.namb.org. We also stressed how we must get underwriting back to some sort of normalcy and bring back some common sense. We discussed the overlays in underwriting and stressed how they are slowing down the recovery of the U.S. housing market. They made it clear that more meetings will be scheduled and that NAMB will be invited back to the table on this very important issue. The second meeting in September was with a very small group of industry leaders held at the Treasury with Timothy Geithner, Secretary of the Treasury, and the newly appointed head of the Consumer Financial Protection Bureau (CFPB), Elizabeth Warren. You can all count on a new simplified combined Good Faith Estimate (GFE) and Truth-in-Lending (TIL) no later than July of 2011. The meeting went very well and NAMB was very instrumental in the proceedings of the meeting and we received a lot of face time. The outcome of the meeting was for a simple-to-understand GFE and TIL. NAMB stressed doing away with the annual percentage rate (APR), which drew quite a bit of conversation that, in the end, most agreed the APR is very confusing and very difficult to understand and explain to a borrower. More meetings will be scheduled in the months ahead and NAMB will be invited back to the table to participate. We are also working extremely hard on the new Fed rule on loan originator compensation. I cannot discuss the plans at this current time, but rest assured, we are working on a plan. We are extremely concerned that this rule places mortgage brokerage companies and their loan officers at a competitive disadvantage in the marketplace. We have scheduled meetings with executive branch agencies to discuss our concerns, including the newly created Consumer Financial Protection Bureau. Now is the time to attend NAMB/WEST 2010 in Las Vegas in early December to participate in the Government Affairs planning session where we will discuss our goals and directives for the remainder of the year, especially now that we have the results of Election Day. Your voices are important and please plan on attending for your opinions matter to us. I would like to close with a crucial cry and plea … the loan originator has predators preying upon us in the form of regulators and lawmakers who do not understand our business. They are chipping away at our livelihood and our futures every day. The number of loan originators has decreased considerably from three years ago. According to Nationwide Mortgage Licensing System (NMLS), there are approximately 143,000 licensed loan originators in America today. Here is the sad part, of that 143,000, only approximately 5,000 are members of NAMB … yes, 5,000! This sends a signal to lawmakers! If you do not care enough about your industry or profession to join it and protect your interests, then why should anyone in Washington, D.C.? I can assure you that NAMB cannot continue the fight on Capitol Hill with only 5,000 members. We need 20,000 members minimum to really be effective in a big way. We will not be able to pay for the lobbyists to fight and represent our livelihood without more members. A national association is very crucial when dealing with Washington, D.C. and individual states cannot be as effective without a national force behind
them. NAMB has an excellent reputation on the Hill and Roy DeLoach is very respected in Washington, D.C. I am afraid that without more members, we cannot retain such a high profile person to lead the way. It cannot be a matter of cost. NAMB dues are $120 for mortgage brokers and $50 for originators—a bargain price to protect your livelihood. My plea to you is to join NAMB and recruit new members and we will do the fighting if you simply do your part and that is “Protect Your Industry and Join NAMB!” Please visit www.joinnamb.org and show how much you care about the profession you choose to make a living in. Thank you,
transfer of mortgage loans the prevailing and nearly universallyfollowed practice has been for the endorsed notes to be physically delivered to the trustee, or to a custodian as the trustee’s agent, at the closing of the securitization. Typical procedures include a requirement that the trustee or custodian provide an initial certification at closing and a final certification a specified number of days thereafter in order to confirm the delivery of each mortgage note. Any exceptions noted in these certifications result in a repurchase obligation of the seller within a specific period of time. Significantly, these procedures require a specific verification by the trustee or custodian that it has in fact received the physical notes for each loan listed on the mortgage loan schedule. These procedures make it highly unlikely that there has been any widespread failure to deliver the mortgage notes that simply went undetected.
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Assignment of Mortgage The final key step in transferring ownership of a mortgage loan is to provide an assignment of mortgage in recordable form to the purchaser. Typically, the assignment is in blank so the name of the assignee can be filled in later prior to recordation. Because the mortgage “follows the note,” it secures the debt for the benefit of the note holder, and as between seller and purchaser it is not necessary to record the assignment in the name of the purchaser in order to convey rights under the mortgage to the purchaser. However, in order to exercise its rights under the mortgage against the borrower following default, it may be necessary, under certain states’ law, that the purchaser become the mortgagee of record. Delivery of an assignment of mortgage
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in recordable form in blank is intended to enable the purchaser to become the mortgagee of record by completing the assignment in its name and submitting it for recording. Because every recording of an assignment of mortgage involves a filing fee and other expenses, it is not unusual for these assignments to remain unrecorded until such time as is needed in connection with a foreclosure of a specific defaulted loan. In a private label RMBS transaction, the prevailing practice has been to deliver an original-signed assignment of mortgage in recordable form in blank. In many cases, the securitization governing documents have not required that the assignments of mortgage be recorded in favor of the trust as a general matter. Certification of receipt by the trustee or custodian of the assignments of mortgage has been required under the same procedures as for the mortgage notes.
Variations from the above procedures In our experience, we are not aware of material deviations from the general practice of delivering the physical mortgage notes to the trustee or its custodian. In some programs, delivery of the notes was permitted to occur within a specified period of time after issuance, but subject to the overall procedures for checking in the notes and providing a certification of receipt by the trustee or custodian with repurchase required for any delivery failures as described above. In some cases, at the time of the securitization it is known that the seller will be unable to produce the physical note because it had been previously lost or destroyed. In that case, a lost
note affidavit executed by the seller would be delivered to the trustee which affidavit would confirm that the seller: 1. Had owned the loan; 2. Had possession of the original note; and 3. Had attached a true and complete copy of the original note to the affidavit, and also that the original note had been lost or destroyed. The securitization governing documents by their terms would still nevertheless convey ownership of those mortgage loans to the trustee, although the lack of the original note might in some states give rise to additional requirements that the lender must comply with in connection with a foreclosure (e.g., posting a bond). With respect to mortgage loans where, as of the time of the securitization, the mortgage was held through the Mortgage Electronic Registration System (MERS), instead of delivering an assignment of mortgage, the seller would transfer its beneficial interest in the mortgage to the trustee through MERS. In jurisdictions where the note holder must be named as the mortgagee of record in order to complete a foreclosure, relatively simple steps can be taken to accomplish this, thereby permitting foreclosure if necessary (although delays may occur).
Validity of original transfer procedures For the reasons described above, these standard procedures are sufficient to validly transfer ownership of the mortgage loans to the securitization trusts, consistent with the clear and unambiguous intent of all parties to the transactions (including the investors) at the time. Specifically, use of an endorsement in blank on the mortgage note is fully consistent with a sale. Recordation of an assignment of mortgage to the securitization trust is not necessary to evidence ownership of the mortgage loan by the trust, and the delivery of an assignment of mortgage in blank in recordable form is sufficient to enable the trust to become the mortgagee of record if needed for foreclosure. There may be additional steps required at the time of foreclosure in order to comply with procedural or documentary requirements. For example, an assignment of the mortgage may need to be recorded to the securitization trust. Any such additional steps would not convey any new or additional ownership rights to the securitization trust and would not negate the sufficiency of the transfer procedures described above to convey ownership of the mortgage loans to the securitization trust at the time of issuance. It should not be surprising that additional steps may be needed at the time of foreclosure. The standard transfer procedures described above are used in the context of transactions between sophisticated financial institutions and institutional investors, who clearly mutually intend for the transactions to be sales. As commercial transactions, the steps taken are certainly sufficient to legally convey ownership and
protect the rights of the purchaser, but do not include additional steps not required to convey ownership that would involve additional time or expense. In contrast, the foreclosure process is adversarial, and in that context, it is understandable that extra requirements could be imposed over and above those necessary to convey ownership of the loan itself.
Is there a REMIC qualification issue? A few commentators have added to the parade of horrors, a concern that the REMIC would lose its qualification because it did not own the mortgage loans. The underlying premise to this argument is that the actions taken to convey ownership of the loans at issuance were ineffective and that any subsequent step taken to supposedly “cure” such deficiency (such as recordation of an assignment of mortgage) would have the effect of transferring the mortgage loan to the REMIC after the 90-day period following the issuance date during which transfers to the REMIC are permitted, causing a prohibited transaction tax. The simple response to this argument is that the mortgage loans have been legally conveyed to the securitization trust at the time of issuance, which satisfies the requirements of the Internal Revenue Code and the related Treasury Regulations governing REMIC qualification. Under basic principles of tax law in which substance is controlling over form, there is no question that the REMIC at the time of issuance was the owner of the mortgage loans for tax purposes.
Conclusion We believe that the recent allegations of possible wholesale failures to convey ownership of mortgage loans to private label RMBS trusts are baseless and unfounded. All parties to these transactions, including issuers, underwriters, trustees and investors, clearly intended that the transactions convey ownership of the loans to the trusts, and appropriate steps were taken to effect such conveyance in accordance with well-settled legal principles governing transfers of mortgage loans. Any attempts to assert otherwise today are inaccurate and uninformed, and, if left to stand unchallenged, could cause substantial and unwarranted harm to the economy. Stephen Kudenholdt is co-chair of SNR Denton’s Capital Markets practice. His practice includes residential and commercial mortgage-backed securities and other asset-backed securities, primarily focusing on residential mortgage loan securitization. He may be reached by phone at (212) 768-6847 or e-mail firstname.lastname@example.org. Stephen F.J. Ornstein is a partner in SNR Denton’s Capital Markets practice. His practice concentrates on banking and real estate law with an emphasis on federal regulation of real estate. Orenstein regularly counsels mortgage companies, mortgage insurers, financial institutions and others in complying with mortgage and consumer lending regulations. He may be reached by phone at (202) 408-9122 or e-mail email@example.com.
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Back on Track
Encouraging takeaways from this year’s MBA Annual Convention By Charlie W. Elliott Jr., MAI, SRA, ASA
The Desk Appraisal Review Under the Microscope This column is the second of three that I am writing to bring attention to and to extol the virtues of the three most commonly used appraisal review reports as quality control tools:
Greg Schroeder is president of Comergence Compliance Monitoring. To learn more about how the Comergence Compliance Trusted Mortgage Professional program can help, call (714) 495-4720.
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
Right about now is the time when folks in the industry stop to reflect on the year gone by and make their predictions for the coming year. Given that the Mortgage Bankers Association (MBA) Annual Convention & Expo falls just before this time each year, it’s not surprising that the reviews and forecasts reflect the mood of conference attendees. At the 2008 show in San Francisco, the mood was bleak, if not suicidal! At least half, if not two-thirds, of the industry was wiped out and protestors were literally knocking at the door. Relief was the prevailing emotion at the 2009 San Diego show— relief to still be in business, relief that blame for the financial crisis was shifting towards Wall Street, relief that people actually showed up to the conference. Prior to last month’s MBA Annual Convention & Expo in Atlanta, I’m not quite sure what my prediction for 2011 would have been. This was the year of the regulator, with the changes to the Real Estate Settlement Procedures Act (RESPA) going into effect the beginning of the year, the Dodd-Frank Act passing a mere two months before the show in October and Washington, D.C. showing no signs of slowing down the winds of financial reform. With the Federal Reserve Bank’s changes to yield spread premium (YSP) compensation going into effect in the second quarter of 2011, Bank of America’s announced exit from wholesale, and early predictions by analysts that interest rates will rise, one would assume that the mood at this year’s show would be anything but optimistic. However, after spending two solid days on the exhibit hall floor talking with lenders and vendors alike, I can say, with a reasonable measure of certainty, that 2011 is going to be a good year for the mortgage industry. Folks are encouraged by the growth the industry has experienced over the year, and they see the potential for the industry to come back perhaps stronger than ever. In regards to wholesale, there is every reason to believe that this channel is going to come back in a big way over the next 18-24 months. I spoke with multiple lenders who expressed a desire to either start up a wholesale division at their institution, or to revive their now-defunct wholesale operations. And why shouldn’t they? It’s no secret within the industry that brokers are, by far, the least expensive way to originate loans, and although the industry is expected to rebound even more, the need to hold down costs, especially in light of the increased cost of regulatory compliance, will remain a top priority for lenders across the board. Additionally, the regulations put in place to police brokers in a way that hadn’t been done during the mortgage bubble and the technology now available to lenders to proactively manage their brokers has made the wholesale channel perhaps the safest origination method available. Bank of America’s announcement that it was shuttering its wholesale division threw lots of folks in a tizzy about the effect this would have on the resurgence of wholesale. What’s interesting is not one person even mentioned the announcement to me during the show. The truth is Bank of America’s exit from the channel actually opens the doors for both new and more active players to gain market share and fuel the growth of the channel. Given the exciting prospects for wholesale growth over the next two years, it’s more important than ever for brokers to adopt the policies and procedures necessary to demonstrate their status as true Trusted Mortgage Professionals and gain their fair share of the business that is to come.
NationalMortgageProfessional.com NOVEMBER 2010
third and last occasion requiring an appraisal review is that of loss mitigation or foreclosure. Admittedly, this is after the horse is out of the barn, but it does provide the lender with information that is helpful in making decisions The electronic appraisal review; in managing slow paying accounts The desk review; and and/or delinquent accounts. There is The field review. also ample time to perform the review without the pressure of a closing loomThey are listed in the order ing over the head of the of the least comprehensive review appraiser. to most comprehensive, The desk review is perand this series of columns formed by a human, as is designed to assist the opposed to the various reader in making the electronic applications proper decision as to used today in appraisal which review tool is best review. While it is not for their given situation. always required that the The desk review is a very reviewer be a state-certified commonly used collateralappraiser, that is the most assessment, appraisalcommon way that the review tool. It is used to crireview is performed. In tique the appraisal of real “Since the desk review some cases, regulations property, typically on three is prepared by a require that the desk different occasions. The review be performed by an human, one may first is the pre-funding appraiser certified in the expect a level of logic review, which typically state where the property is and reasoning, not takes place immediately located. Since the desk found in electronic prior to the closing of a review is prepared by a loan. This is arguably the reviews, to be applied.” human, one may expect a most critical of the times at level of logic and reasonwhich an appraisal will be reviewed. If the ing, not found in electronic reviews, to be review is properly executed, it can prevent applied. Given the human element, one the making of a loan on property where may expect a superior product from a the appraisal is flawed. This, by definition, desk review over that of the electronic means that the review must be made type. quickly. This factor works against quality to Desk review standards vary in scope. a degree. The second occasion is the It is important that the lender know post-funding, quality control sampling how the review is to be performed. review. This is typically done to satisfy Some of the variables of the desk review bank regulators, mandating that a sam- include whether sales and subject proppling of all appraisals be reviewed on erty data is confirmed, whether addiall closed loans. This is done, not to tional sales data is researched beyond prevent the making of a particular that which is included within the loan, but to identify a weak risk man- appraisal, whether the reviewer simply agement system or to put the spotlight offers a pass-fail grade on the appraisal on incompetent or unscrupulous or whether the reviewer offers a differappraisers. There is usually ample time ent opinion-of-value of the subject, in to perform the review, so there is little continued on page 20 pressure to do a quick or hasty job. The
By Greg Schroeder
BY GIBRAN NICHOLAS
Don’t Let America’s Lost Decade be Your Lost Decade
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
I recently was able to attend the least, this seems hypocritical for two Symposium on Mortgages and the Future reasons. of Housing Finance hosted in First, our government is willing to Washington, D.C. by the Federal Deposit run up trillion dollar deficits and Insurance Corporation (FDIC) and the engage in trillions of dollars of “quantiFederal Reserve. The conference was a tative easing” in the name of “economhuge disappointment to me. In fact, I ic stimulus.” Spending $766 billion to walked out after the first few sessions wipe out the negative equity of millions because it seemed that the conference of homeowners seems like a small price was nothing more than another photo-op to pay compared to what we are doing for the government to say they are doing now with these enormous deficits cresomething (while doing ated by the U.S. Treasury nothing) about the mortand “quantitative easing” gage and housing mess. created by the Federal One thing that sparked Reserve. Perhaps nothing a fire inside of me was a would save us more brief mention of Japan’s money in the long run or “Lost Decade.” Japan went stimulate our economy through an asset bubble more than spending $766 collapse in the 1990s. The billion to wipe out negagovernment of Japan did tive equity; no matter not have the courage to how repugnant this radirequire the Japanese banks cal idea seems to those of to write down their bad us who believe in free loans and own up to their market capitalism. “The government’s losses. As a result, Japan’s Secondly, $700 billion $700 billion bet is economy stagnated for 10 is the amount that the now paying off as years as real estate prices government loaned to Wall Street firms are deflated and consumers Wall Street firms, and the reporting record were reluctant to borrow U.S. Treasury is actually profits once again or spend money. making a significant profand repaying their Compare this to America. it on their investment as This is the end of 2010 and the Wall Street firms get government loans.” our crisis started in 2007. back on their feet. The We are 30 percent of the way toward a same can be said for homeowners with “lost decade” of economic growth in negative equity. For example, what if the United States. Our country may the government paid down a homehave another one, two or seven years owner’s negative equity in exchange to go before we make it out of this for a non-dischargeable future lien on lackluster economic situation. Let’s the homeowner’s earnings? appreciate the gravity of our situation: The bottom line is that our country There is a whopping $766 billion of has three choices: negative equity in the U.S. today. The government does not want to force 1. Remove all government intervention mortgage lenders to write down this in the housing market; in this case, the $766 billion of negative equity because housing market will most likely fix if they did, most every financial institu- itself after another five to 10 years of tion in the U.S. would be bankrupt. struggle. This $766 billion problem could take 2. Continue with the ineffective blend years to resolve. of free market capitalism and halfThe government does not want to hearted government tinkering that we figure out a creative way to arrange a have been experiencing since 2007. In homeowner “bailout” by loaning home- this case, who knows when the housing owners $766 billion to reduce their neg- market will recover. ative equity because of “moral hazard” 3. Fix the negative equity problem with and “free market concerns.” To me, at some form of large scale government
intervention. In this case, the housing market may be fixed sooner rather than later. The bottom line is that it seems clear that we are 30 percent of the way toward a “lost decade” in the United States with no plausible end in sight. My question to you is what are you going to do about it? You cannot control house prices or economic cycles. You cannot control the government and what they do or do not do about the negative equity situation. However, you can control how you yourself respond to the world you find yourself in. For example, you have three choices: 1. Get out of the mortgage business entirely and find some other line of work to generate an income for yourself and your family. 2. Approach your mortgage career with half the passion and ability that you are capable of. 3. Approach your mortgage career with 100 percent of the passion and ability that you are capable of. When Wall Street and the financial markets were crumbling in the fall of 2008, Warren Buffett said that if he had the money, he would spend $700 billion to bail them out (aka, invest in their future). Incidentally, the U.S. government was the only entity on earth that had the kind of resources needed to arrange a large scale bailout. The government’s $700 billion bet is now paying off as Wall Street firms are reporting record profits once again and repaying their government loans. As the mortgage industry goes through one turbulent change after another, you are the only one who has the kind of resources needed to bail yourself out (aka, invest in your future). You have a treasure chest of passion within you. It is up to you on where and how to spend it. Do you believe in your own future as much as the government believed in the future of Wall Street? If so, invest all of your $700 billion of passion and ability in your own future and you will reap the profits. Let me ask you two questions: 1. When will people in the United States stop needing to live in homes, and when will they stop using mort-
gages to finance their house purchases? 2. When will people in the United States stop needing to restructure their personal finances and refinance their mortgages? If you can answer never to the two questions above, you are a good candidate to invest 100 percent of your passion and energy into your career as a mortgage originator. Remember the three numbers we discussed in last month’s column (“The Three Numbers That Really Matter,” National Mortgage Professional Magazine, October 2010 edition): $6.96 trillion of home equity remaining in the U.S. equals plenty of people can still qualify for financing. $1.56 trillion of mortgage volume in 2010; half the volume of the boom years with half the competition equals equal opportunity for you to have a record year. Four million housing units sold on an annual basis in one of the worst years on record equals one top producing Realtor is worth at least 32 annual referrals to you. The bottom line is that it is 100 percent possible to make this the best decade of your life, both personally and professionally. Don’t let America’s lost decade become your lost decade. Gibran Nicholas is the founder and chairman of the CMPS Institute (CMPSInstitute.org—NMLS Provider ID# 1400384). The CMPS Institute administers the Certified Mortgage Planning Specialist (CMPS) designation and has enrolled more than 5,500 members since 2005. Through CMPS, Gibran empowers mortgage professionals with confidence, unique knowledge, and dynamic marketing resources to simplify compliance, increase their competitive advantage, and generate more business. Visit Gibran’s blog and Web site at http://gibrannicholas.com. Visit author Gibran Nicholas’s blog at http://gibrannicholas.com where he shares his insights on economics, real estate and financial issues, including the current mortgage and credit crises.
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Eighty-eight percent of enterpriseacquired mortgages were fixed-rate loans originated between 2001 and 2008 and ranged from 79 percent for 2004 originations to 96 percent for 2001 originations. Mortgages financed with private-label MBS were predominantly adjustable-rate loans. These loans comprised 70 percent of mortgages financed with private-label MBS originated between 2001 and 2008 and ranged from 53 percent of 2008 originations to 75 percent of 2004 originations. Adjustable-rate loans offer borrowers lower initial payments in return for less certainty about future payments. In the data analyzed here, adjustable-rate loans perform worse than fixed-rate loans in part because some originators of adjustable-rate loans evaluated borrower repayment capacity using artificially low rates, called “teaser rates.” Roughly five percent of GSEacquired, fixed-rate mortgages and 10 percent of GSE-acquired ARMs were over 90 days delinquent at some point before the end of 2009. Roughly 20 percent of fixed-rate mortgages and 30 percent of ARMs financed with privatelabel MBS were over 90-days delinquent at some point before year-end 2009. For more information, visit www.fhfa.gov.
rent payoff of that mortgage. HR 6133 would also require lenders to respond to consumer short sale requests within 45 days. “The short sale, which requires lender approval, is an important instrument for homeowners who owe more than their home is worth,” said Vicki Cox Golder, president of the National Association of Realtors (NAR) and owner of a real estate company in Tucson, Ariz. “While the lending community has worked to improve the size and training of their short sales staffs, they still have a long way to go on improving response times.” The bill has been referred to the House Financial Services Committee for consideration. “Unfortunately, homeowners who need to execute a short sale are severely hampered because lenders (loan servicers) are unable to decide whether to approve a short sale within a reasonable amount of time,” said Golder. “Potential homebuyers are walking away from purchasing short sale property because the lender has taken many months and still not responded to their request for an approval of a proposed short sale price. Many consumers have mentioned that the delay in short sale price approval exceeds 90 days, and in many cases never arrives.
New legislation introduced to quicken short sale time frame
NMP News Flash column Phone #: (516) 409-5555 E-mail: firstname.lastname@example.org Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.
Coming in 2011!
Nov. 1, 2010 credit report functionality was made available through the NMLS. In the first two days, more than 23,000 individuals went into the system and completed the Identity Verification Process (IDV), which authorizes the NMLS to send a credit report to the state regulator on their behalf. With end of year license renewal and the state deadlines for credit authorization approaching, it’s time to focus on these two obligations. You can streamline the process by completing both the credit request and annual renewal in one shot. It is critical to check with your individual state to determine both deadlines for license renewal and credit report authorization, then simply combine the process. Go to www.mortgage.nationwidelicensingsystem.org, then go to the “MLO SAFE Requirements Compliance Chart” and read the renewal and credit report authorization deadlines carefully. It is different for every state and it’s your responsibility to know the deadlines.
How to authorize credit Even if you have previously provided credit authorization to your state, you are required to complete the process again through the NMLS. Go to the NMLS Resource Center and click on “Credit Report” for MLOs. The credit report fee is $15 and the NMLS pulls a single bureau TransUnion Report with Vantage Score. This is a soft pull and will not affect your credit score. Your company can submit a credit report request on your behalf or you can do it yourself. Either way, you must first complete the IDV process in which you are asked a series of questions regarding your credit history, then you attest to the filing prior to paying for the credit report request.
SAFE Smart credit request There is no national automated standard or minimum credit score required. The SAFE Act leaves determining the financial responsibility of licensees up to each state regulator. If you are concerned about your credit, go to www.annualcreditreport.com, request a copy of your TransUnion Report, and begin cleaning up any derogatory marks. Remember: Know your deadlines because it’s time for you to authorize credit when your credit is due. Paul Donohue, CRMS is a 23-year industry professional and founder of Abacus Mortgage Training and Education. Paul served on two NMLS working groups, establishing the new national education protocols. Go to AbacusMortgageTraining.com to find out more about your obligations for testing, education and licensure, or call (888) 341-7767.
Streamline the process: Know your deadlines
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
The SAFE Act mandates that a mortgage loan originator (MLO) must continuously demonstrate the financial responsibility, character and fitness such as to command the confidence of the community. The new standard requires you to submit to a review of your credit. Beginning Oct. 31, 2010, every state licensed MLO shall furnish to the Nationwide Mortgage Licensing System and Registry (NMLS) authorization to obtain a credit report. Because of declining commissions throughout 2009, the credit rating of many originators has taken a major hit. Some are worried about losing their license upon review of their consumer report. Most state regulators are reluctant to take away someone’s livelihood solely because of credit. If your credit score has dropped, include a letter of explanation with your annual renewal. Provide good reasons why you can still command the confidence of the community and you may get credit when credit is due.
Legislation has been introduced that would require lenders and servicers to hasten the time it takes to approve or disapprove a short title or short sale. HR 6133, the Prompt Decision for Qualification of Short Sale Act of 2010, co-sponsored by U.S. Reps. Robert Andrews (D-NJ) and Tom Rooney (R-FL) is designed to assist homeowners who are underwater on their mortgages and have a buyer reader to purchase the house at a price which will net less than the cur-
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:
Credit When Credit Is Due
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
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cases where the reviewer disagrees with the appraisers opinion of value. When is it appropriate to use the desk review as an appraisal evaluation tool? This question could be somewhat open-ended like the one about how long a manâ€™s legs should be. We have all heard that a manâ€™s legs should be long enough to reach the ground. The answer, concerning the use of the desk review, may be similar. When the desk review should be used is unique to the situation. It is the middle ground in the review-appraisal toolbox, more comprehensive than an electronic review and less thorough than a field review. Some lenders use it as a second line of defense, when the electronic review indicates a need for more review of a given appraisal. While this is probably the most used avenue to the desk review, it is, by no means, the only way to come to the conclusion that a desk review should be performed. Institutions subscribing to a higher level of quality control may require a desk review on all appraisals prior to the closing of a loan. Issues, such as cost, also enter into the mix, concerning if and when an appraisal review should be ordered for a particular transaction. Desk review cost is moderate, typically between $100-$200, perhaps somewhere in the neighborhood of half the cost of an appraisal. The desk review is covered in Uniform Standards of Professional Practice (USPAP). Under USPAP, the reviewer must, when providing a review without a reviewerâ€™s value opinion, state and/or identify the client, the users, the purpose of the review, the work under review, the date of the work under review, the effective date of the opinions and conclusions, the name of the appraiser performing the appraisal, the effective date of the appraisal review, all extraordinary assumptions and hypothetical conditions, how these assumptions and conditions affect the
results, scope of the work, reviewer opinions and conclusions and include a signed certification. Yes, as with all review tools, the desk review is not without its shortcomings. These include, in some cases, a lack of independence and the possibility of reviewer bias, as well as the absence of a subject property and/or a comparable-sales inspection. These issues, within themselves, do not mean that a credible desk review cannot be performed most of the time, however, consideration must given to these weaknesses in the product when other review tasks are contemplated. In reflecting upon the benefits offered by the desk review, one would not want to ignore the importance that the human element offers. There is little substitute for logic and reasoning provided by a human over that of an electronic review system. Having said that, the reviewer typically has not actually inspected the subject and comparable properties, as would be the case with a more comprehensive appraisal review. The desk review is a viable option for lenders requiring a middle ground analysis of an appraisal. It should be further noted that there will be times when the desk review proves to be inadequate. In such cases, a more comprehensive appraisal review will be required. There is no substitute for competent and experienced management overseeing and interpreting the results of a desk review. Institutions not having qualified in-house support for this function should consider the possibility of employing experts in this field or outsourcing this function to a reputable appraisal review firm. Charlie W. Elliott Jr., MAI, SRA, is president of Elliott & Company Appraisers, a national real estate appraisal company. He can be reached at (800) 854-5889, e-mail email@example.com or visit his companyâ€™s Web site, www.appraisalsanywhere.com.
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FIT for Reverse Mortgage Lenders: Part III Why lenders must be FIT smart Immediate needs drive most reverse mortgage lending. Everyone knows that. What everyone may not know is that lending to meet immediate needs could be very risky for seniors and for lenders without good intelligence about seniorsâ€™ long-run needs and goals. The newly-mandated Financial Interview Tool (FIT) is about digging a little deeper for better home equity conversion mortgage (HECM) prospect intelligence to inform the lending decision-making. This critical insight persuaded the U.S. Department of Housing & Urban Development (HUD) to impose the National Council on Agingâ€™s (NCOAâ€™s) innovations in the new HECM counseling protocol. Why should reverse mortgage lenders care about FIT (after all, it is a counseling mandate)? Two words: Intelligence and understanding. To help seniors make better HECM decisions, lenders need to be better informed about seniors, and FIT provides that extra intelligence. Since Sept. 11, 2010, every HECM prospect counseled is given a FIT summary printout, which shows â€œyellow flagâ€? issues (risk factors) raised in counseling and their implications for a borrower to â€œfully benefit from a reverse mortgage.â€? Lenders can use these yellow flag issues as cues for questions and conversation with prospects. Letâ€™s look at a yellow flag: Living alone. This factor could prompt questions such as: How much help do you have with your daily activities, Mrs. Akuna? Who can you call when your health changes suddenly? How lonely and isolated do you feel?
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One implication for a live-alone person is that they may be too dependent on the reverse mortgage cash to pay for services freely available to seniors with spouses, partners, neighbors or relatives.
As NCOAâ€™s Barbara Stucki said, â€œBy themselves, each of these issues may not be a risk, but they can add up.â€? Add poor health to living alone, and you have prospects whose financial needs may outrun their expectations, thus hurting their ability to meet borrower obligations such as paying property taxes, buying homeownerâ€™s insurance and maintaining the home. FIT could also help lenders manage reputation, litigation and financial risks by giving them early warning and opportunities to manage risks upfront. For example, a FIT report might flag poor health; more conversation might uncover mental health issues. If they are matters involving the seniorâ€™s decision-making capacity, the lender could (and should) work with counselor to refer the prospect to mental health professionals. A HECM lenderâ€™s failure to spot a coborrowerâ€™s mental health problems caused a New York Supreme Court Judge to void a reverse mortgage in December 2009 (The Doar Matter). Before you say, â€œWait a minute. This is not fair. We are lenders, not psychiatrists!â€? Here are the judgeâ€™s words: â€œâ€Śthe burden of knowledge â€Ś must be shifted to the mortgagee [lender] when dealing with a reverse mortgage.â€? To carry this burden of knowledge (knowing the reverse mortgage borrower holistically), lenders and their loan officers must understand seniors. Questions, conversation and interactions are more reliable means of knowing customers. No quantitative technology (the idols of lending) can alter this fact. For 21 years, the industry lived under the delusion that it understands seniors and their needs. Lenders and loan officers told themselves that â€œAll continued on page 23
Professional Servicing Companies: The Key to Seller Carry-Back Loan Survival By Drew Louis
As you may have noticed, most of the risk falls on the seller. But so do most of the rewards. Minimizing the risks, or eliminating them all together, could lead to a very safe and profitable investment for the seller, a new home for the buyer, and a sale that otherwise may have never happened for the agent. A professional servicing company can offer full document disclosure, review the terms of the loan, service the loan, collect impounds for property taxes, Homeowners Association (HOA) fees and insurance, and even pay the senior lien from the buyer’s monthly payment to assure it is being paid in a timely manner. All of these services help minimize or even extinguish most of the risks involved with a carry-back loan. Full disclosure is extremely important in today’s economy. More than ever before, lenders have been forced to enforce rights and penalties, which need to be clearly stated and understood by the borrower. Electing to use just a simple note and deed could leave the seller in front of a judge without the necessary proof that they properly disclosed all that they should have … that’s a huge risk. Employing a professional servicing company not only protects the seller’s investment, it can help structure it, as well. Whether the seller wants to obtain a lump sum in the near future or collect monthly payments for the long term of the loan, a professional servicing company can help strategize the best possible terms of the note and then enforce them. The servicing
company can also help find buyers for the note when the seller wants to obtain cash. What many sellers and agents forget when discussing the possibility of owner financing is the tedious act of actually servicing the loan. The seller is on the hook for accurately calculating interest and principal, keeping track of payment history, issuing federal and state tax forms and many other timeconsuming tasks. It’s not just sending a bill and collecting a check. In fact, part of the reason the seller carry-back loan has developed a bad reputation and has died out in the past is because agents are not around to help the seller figure out what to do when the buyer misses a payment. That would not be an issue with the help of a professional loan servicing company. All of the servicing needs of the loan can be taken care of for as little as $15 per month. The buyer and seller can have a go-to resource for questions for the duration of the loan; and the agent gets positive remarks for a successful transaction. The revival of owner financing is a second chance for agents to get it right, sellers to take advantage of an opportunity to establish a monthly cash flow, and for buyers who have been denied by the banks to purchase a home. Employing a professional servicing company brings the carry-back loan one step closer to infinite survival. Drew Louis is president of Del Toro Loan Servicing Inc. He has been successfully servicing loans since 2003 and has more than 20 years of experience in the financial services industry. For more information, call (619) 474-5400 or visit www.deltoroloanservicing.com.
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fail to keep the property insurance Seller carry-back loans have been growor taxes current. ing in popularity since mortgage companies have tightened the noose on poten- A lack of tools to verify the buyers’ application information can open tial borrowers. As even some of the most the doors to fraud. If the buyer is creditworthy applicants are being turned deceiving the seller, there is more away by mortgage giants and banks, sellof a chance it will go undiscovered er carry-back loans are once again until it is too late. becoming a realistic alternative to traditional mortgages. Buyer risks Seller financing made If the seller does not own up 1.3 percent of sales in the property free and California last year, up clear, there is a chance from 0.4 percent in 2007, they could default on according to a survey of the senior mortgage, members of the California possibly sending the Association of Realtors property into foreclo(CAR). That’s a fair increase sure. Having the payover two years, but it ments made by the could be so much more. buyer directed to the There is a huge pool of senior lien through a buyers out there that “What many sellers bona fide servicer can could benefit from the and agents forget eliminate this potential carry-back loan, but have when discussing the problem. not been approached with If the seller decides to the idea because agents possibility of owner finance the buyer for a either do not believe in it financing is the short period of time, or they just don’t under- tedious act of actualthen the buyer will stand it. Buyers are losing ly servicing the loan.” need to refinance at the a chance to purchase a end of the term and home, sellers are losing a chance to sell and agents are losing out pay off the balance. If the buyer cannot qualify for a refinance, they can be on business. By properly utilizing and understand- foreclosed on by the seller. ing the carry-back loan, everyone can be a winner. However, before that can hap- Positives for buyers and pen, all parties need to understand the sellers risks involved, and more importantly, The buyer is able to get a home despite their credit history. how to reduce those risks and even sometimes eliminate them by hiring a The seller can set the demands of the note and establish a monthly cash flow. professional loan servicing company. The seller will likely get asking price or better for the property because Seller risks carry-back loans open the door for The biggest risk for the seller is the more potential buyers. potential for the buyer to default on the loan. The reason most buyers are Closing time is significantly reduced; a carry-back loan could close in as in the market for a carry-back translittle as two weeks. action is because they are unable to obtain a mortgage through tradition- There can be a tax deferral for the seller when they report under the al means. Often, their credit scores Installment Sale Method. are low and they have a limited Should the seller ever want a lump amount of income and credit. sum, they can sell the note to an Seller carry-back loans are often secinvestor for cash today rather than ond position or junior liens. The collect payments over a time period. buyer’s mortgage with the bank may be in first position and have the first If the buyer does default, the seller could “re-own” the property at the right to any funds obtained through sales price LESS the downpayment. a foreclosure or sale. This means the Having intimate knowledge of the carry-back loan could be completely property, this could be a risk worth wiped out should the property go to taking. foreclosure. The seller is not only “The Bank” in Banks are paying very low interest on depositor’s money. A lump sum the transaction, but also “The sale poses the dilemma of where to Servicer.” The interest, principal and invest the proceeds: The stock marbalance of the loan must be tracked ket, more real estate, a savings and recorded accurately. This can account? Current interest rates on become a huge headache should the carry-back loans are very attractive. Borrower start missing payments or
How a professional loan servicing company can help
FHA Update on CLTV Changes and UFMIP Refunds CLTV changes
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In the Federal Housing Administration’s (FHA) recent Mortgagee Letter 10-36, published in late October, the requirement that the combined loan-to-value (CLTV) ratio not exceed the FHA geographical loan limit for both purchases and refinances was eliminated. As this is a change that will affect only a small percentage of the FHA loans being originated, I debated as to whether or not I should spend time clarifying this new guideline. In the end, I reasoned that since in some markets this will make a difference to a home owner, mortgage loan originators (MLOs) should be informed and clearly understand what this FHA update states. The wording FHA used in this Mortgagee Letter was potentially confusing. To sum it up, here’s what you need to know: The CLTV cannot exceed the applicable LTV for your loan program, but it can exceed the geographical loan limit as long as the FHA first does not. For example, in Lexington, Ky., the maximum FHA loan amount is $271,050. Let’s say you have rate and term refinance of a first mortgage with a balance of $265,000 along with a re-subordination of a second mortgage with a balance of $15,000. The home in this scenario has an appraised value of $288,000. Provided the borrower meets all other criteria, this scenario would meet the new guidelines because: Although the total of both loans ($280,000) exceeds the geographical limit if $271,050, the FHA first is below the geographical limit and the combined LTV is 97.2 percent (which is below the allowable maximum LTV of 97.75 percent for rate and term refinances).
Since the new mortgage insurance premiums (MIPs) are in effect as of Oct. 4, 2010, many MLOs are asking what will happen to the excess premium on a streamline refinance, since the new Upfront Premium is now one percent of the loan amount. The recent ML 10-28 that gave us the new premiums states: “The cancellation policies defined in Mortgagee Letters 2000-38 and 2000-46 remain unchanged.” To refresh your memories, ML 2000-38 reduced the refund period from seven years to five years and ML 2000-46 stated: “… If the refund amount exceeds the new upfront premium, the excess will be sent directly to the borrower from the U.S. Treasury using FHA’s disbursement process.” I contacted the U.S. Department of Housing & Urban Development (HUD) personally on this refund question, and they responded by saying that: “Currently, if excess unearned premiums remain after netting of the refund to the new case number, then the funds are refunded to the borrower. However, FHA is examining this process and may make changes in the future.” The last part of this statement tells us that the FHA is looking for a way to change the guidelines allowing them to reduce the amount of the refund to the borrower. These refunds can be very substantial especially for the high-cost areas. Take a $500,000 FHA loan in California that closed in May 2010, where the borrower paid a 2.25 percent premium in the amount of $11,250 and now they want to do a streamline refinance. The refund they will receive for a December closing will be, according to the chart below, 83 percent of the original premium, which is $9,337. In this example, the new premium of one percent will be $5,000, so they will receive a refund of $4,337 after collecting the new premium at closing.
The cash back opportunity Do try to take advantage of this opportunity, before the FHA finds a way to take the refunds away! Most MLOs are analyzing their FHA streamline opportunities from a payment reduction perspective and haven’t considered this FHA guideline as an incentive for homeowners to refinance! Go back through your closed pipeline and review streamlines from this refund perspective. Contact your clients who may not be saving as much as they would like to on the payment, but stand to get a nice refund. In effect, this is like a cash-out refinance opportunity. Presenting the proposed loan to your client in this way, it makes a lot of sense (and dollars!) … even if the savings on the payments are not substantial. Go FHA! Jeff Mifsud is founder of Michigan-based Mortgage Seminars LLC, a former FHA underwriter with 15-plus years of experience originating FHA loans, an FHA expert for LoanToolbox.com and creator of The FHA Originator, a monthly FHA newsletter. Jeff may be reached by phone at (248) 403-8181 or visit www.MortgageSeminars.com.
Upfront Premium Refund Factors Match Month & Year Since Closing To Determine Refund Rate Month of Year Year
Social Media: Take Two Breaths and E-mail Me in the Morning By Andrea Obston
continued from page 20
you need to work with seniors successfully is trust.” While trust is important in working with seniors or non-seniors, earning someone’s trust is not the same thing as understanding them. For the first time in the industry’s 21-year history (thanks to NCOA and to HUD), counselors are being required to make the effort to understand seniors and all their needs. It is a game changer. It is a good thing. Wise lenders will get the message and adopt FIT-like processes to capture more prospect intelligence and make better reverse lending decisions. Others will whine about “over-regulation” and return to business as usual. Could it be that a scathing U.S. Government Accountability Office (GAO) report to Congress on HECM counseling last June and the Doar decision drove HUD toward FIT and other tighter rules in the new HECM protocol? Lenders ignore these developments at their peril. Call it Atare’s first law of reverse mortgage lending: Know your borrowers beyond immediate needs. If you do not, courtrooms and newspapers’ pages could be very expensive places to find out.
“Call it Atare’s first law of reverse mortgage lending: Know your borrowers beyond immediate needs. If you do not, courtrooms and newspapers’ pages could be very expensive places to find out.” Atare E. Agbamu is author of Think Reverse! and more than 140 articles on reverse mortgages. Since 2002, he writes the nationally-distributed column, “Forward on Reverse.” A former director of reverse mortgages at Minneapolis-based AdvisorNet Mortgage LLC, Agbamu has years of handson experience marketing and originating reverse mortgages. Through his advisory, ThinkReverse LLC, Agbamu advises financial professionals, institutions and regulators across the country. In a 2007 national report on reverse mortgages, AARP cited Agbamu’s work. He can be reached by phone at (612) 203-9434 and e-mail at firstname.lastname@example.org. Visit author Atare E. Agbamu’s blog at thinkreverse.com for his thoughts and insights on the reverse mortgage marketplace.
Booth #301 | www.franklinamerican.com Equal Housing Lender; Franklin American Mortgage Company Inc. 501 Corporate Centre Drive Suite 400 Franklin, TN 37067. NMLS ID 1599. For mortgage banking professionals only; not authorized for distribution to consumers. 10/27/10 G101027AD
WHOLESALE LENDING www.LoanKinection.org
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Okay, enough of Marketing 101. What If you are feeling guilty, outdated or downright dowdy because your business about this crazy idea of social media? Let’s is not using social media, consider this start with a definition: Social media is Webcolumn your safe island in the storm. based communications which seeks to set “Just do it” may work for Nike, but it has up a conversation; a relationship. They are interactive, personal and something that no place in your marketing efforts. The mere size and speed of social net- people invite into their lives. Contrast that working has made everyone sit up and with advertising which essentially intrudes take notice. The mantra, “If Facebook were into your customers’ lives. Think about it … people turn to their a country it would be the Facebook page as an activiworld’s third largest” is ty. Ads interrupt an activity enough to make any busi(say reading the newspaper) nessperson’s heart beat to deliver their message. So, quicker. Or consider this … if you’re interested in really a recent Consumer Reports’ maintaining or creating a “State of the Net” survey dialogue with customers said that “…two out of and prospects, then social three online U.S. housemedia—be it a Facebook holds use social networks fan page; a You Tube such as Facebook and Channel, or a blog—may MySpace, nearly twice as be for you. Use them to many as a year ago.” offer practical advice that Feeling the old guilt about “Think of the social your customers will want to missing the boat creeping media world as one read and pass along, such into your brain? Stop it! I giant cocktail party. as tips on dealing with promise this will be a guiltWhen you go to such some of the problems your free read. So continue on functions, who do product solves. Businesses without fear. that use social media to talk If you get nothing else you end up spending about themselves (“We had from this column, take this your time with? The 50 people here for a terrific one thought: Just because person who offers sale on Wednesday”) offer a marketing tactic exists, it you an interesting nothing that anyone would doesn’t mean it’s right for conversation or the want to pass along. Before your business. Social media one who assaults you you post that blog or tweet is one of many ways to that tweet, ask yourself, “Is reach your customers. with diatribes about themselves?” this something someone Some have been around would want to share with a since the 1920s, when young Allen Odell convinced his father to friend?” If the answer is “yes,” tweet away. allow him to put up small wooden road- If it’s “no,” then tell your mother. As with side signs to pitch their product, Burma any marketing effort it’s not about what Shave. And some were invented within you want to say, it’s about what your custhe last few years like blogs, Facebook tomers want to hear. Think of the social media world as business pages and You Tube channels. They all work in some form or another. one giant cocktail party. When you go But they won’t necessarily drive the right to such functions, who do you end up customers to your bottom line if they spending your time with? The person don’t suit your marketing objectives and who offers you an interesting conversatheir needs. The real bottom line here is tion or the one who assaults you with that any marketing effort starts with the diatribes about themselves? So, here are a few tips on whether or answers to a few key questions: not social media is for you: Who are your most profitable customers? What do they want from your business? Do you or someone on your staff have the time to devote at least five How do you deliver it? hours a week (throughout the week) Why would they come to you to updating and monitoring social instead of your competitors? media? Where do they go for information Do you have access to a 20-year-old before they buy? who can do this for you, has exist How can you make them into loyal ing experience on the Web and can customers who come back and send be trained on what you offer well in their friends? enough to essentially hold social media conversations about your Essentially, I am asking you to decide business? who you are, who you want to be in the eyes of your customers and how you can Do you currently participate in social media and enjoy it? deliver what they want. Once you know that, you can be a more intelligent marketer on all fronts. continued on page 24
forward on reverse
take two breaths
continued from page 23
Do you cater to the kind of customer who can answer yes to the question above? Do you understand that your picture of the average social media user may be way off? A few facts here: The average user of social media such as Facebook, LinkedIn or My Space is more affluent and more urban than the average American, according to Nielsenwire. A profile of users of social media from a site called Royal Pingdom tells us: Those 35 to 44 dominate users of social media. The average social network user is 37-years-old. LinkedIn, with its business focus, has a predictably high average user age; 44. The average Twitter user is 39-years-old. The average Facebook user is 38years-old. The average MySpace user is 31years-old. So what do you do next? Before sub-
scribing to the “Just Do It” principle, I suggest you do two things: 1. Look long and hard at the customers you want and how they use social media; and 2. Become more literate about the creative uses of social media. Start by reading two wonderful blogs: Mashable and FreshNetworks. Get smarter; get more comfortable with your choices and get going in the way that best suits your business.
Countdown To Buy launches private label No guilt … no worries … just bot- solution
tom-line communications. However that looks. Andrea Obston is president of Bloomfield, Conn.-based Andrea Obston Marketing Communications LLC. The firm’s expertise includes strategic marketing audits, brand development and marketing, public and media relations, media training, Web sites and Internet advertising. Its subsidiary, Andrea Obston Crisis Management (www.crisismasters.com), provides public image crisis planning and management. She may be reached at (860) 243-1447 or e-mail email@example.com.
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Countdown To Buy, an online real estate marketplace, has announced the launch of “powered by Countdown To Buy,” a private label solution featuring the company’s online offer management and negotiation platform. Being “powered by Countdown To Buy” enables institutions and real estate companies to leverage their existing brand, while taking advantage of the benefits offered by Countdown To Buy’s trusted platform and hosted solutions. In conjunction with the launch, Countdown To Buy has entered into an agreement with Diamante Cabo San Lucas, a high-end golf resort featuring some of the most spectacular properties the world’s golfing community has to offer. The site went live on Sept. 20, 2010, and the first set of properties ranging from $250,000-$2.2 million can be viewed at http://diamante.countdowntobuy.com. “We are excited to see the marketplace realization of Countdown To Buy’s effectiveness in serving any transaction, whether it is a traditional, REO, short sale, or now a specialized resort sale,” said Tom Furey, managing partner of Countdown To Buy. “Both Countdown To Buy and Diamante Cabo San Lucas strongly believe our core principles of a fair, trusted and transparent transaction, are the foundation of any buyer-seller relationship.” Countdown To Buy’s online real estate marketplace allows qualified homebuyers to purchase properties through an offer management platform that automatically reduces the price one percent per day until an offer meets or exceeds the daily price. For more information, visit www.countdowntobuy.com.
First American Title Insurance launches new Mortgage Services Division • Daily updated mortgage industry news • Industry blogs • Write your own blog
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First American Title Insurance Company has announced the launch of its new mortgage services division, which is designed to address the title, settlement and valuation needs of residential origi-
nators with national retail platforms. First American Title’s Mortgage Services Division supports many of the nation’s largest financial institutions in pursuing a national strategy for residential origination that focuses on speed, efficiency, customer satisfaction and cost reduction by providing custom closing solutions, leveraging the strength of a national underwriter, applying proprietary technology and tapping into the extensive resources available within the First American family of companies. First American Title’s Mortgage Services division will replace two legacy divisions of First American Title Insurance Company: National Lenders Advantage and Equity Loan Services, both of which have been collectively serving the residential lending market since 1983. Over the next year, all National Lenders Advantage and Equity Loan Services operations and technologies will transition to First American Title’s Mortgage Services division. In addition to a business strategy focused on the distinct objectives of each residential originator, Pat McLaughlin, division manager of First American Title’s Mortgage Services division, said: “First American understands that mortgage originators need more than a central point of contact to be competitive in a volatile market. We’ve listened closely to our clients and invested in the technology, personnel and infrastructure that our organization needs to support complex relationships with top national lenders. Our newly formed division better represents us as an innovative company with the capacity and experience to successfully deploy cost- and risk-reduction solutions for the mortgage industry.” Robert Camerota, head of division operations of First American Title’s Mortgage Services division, said: “Service is not only one of our core values, it’s also what separates First American Title Insurance Company’s Mortgage Services division from other providers. Because we recognize that every touch-point throughout the mortgage closing process is important, our employees are committed to delivering a superior experience on every transaction for both the mortgage lender and their customers.” For more information, visit www.famortgageservices.com. continued on page 31
Scenes From the MBA’s 97th Annual Convention & Expo October 24-27 at the Georgia World Congress Center in Atlanta Photo credit: Lauren-Ashley Luesing
By Tommy A. Duncan, CMT
Chip Langley, CRMS; Thomas F. Duncan and Tommy A. Duncan, CMT of Quality Mortgage Services LLC were on hand to discuss implementing quality control plans
Greg Schroeder from Comergence Compliance Monitoring in Orange, Calif. was on hand to detail his company’s product offerings
Patrick Wolohan, Kris Barnes, Carson Mullen, Kat Ebeyer, Kelly Taylor, Jim Anderson and Tom Hurst proudly represent StreetLinks National Appraisal Services
Mark Sike and Melissa Sike from Credit Plus Inc. on the exhibit hall floor of the Georgia World Congress Center in Atlanta
Allen Johnson, Stephen Crowley and Grady Petty from Advanced Data were on hand for the MBA’s 97th Annual Expo to share information on their company’s product offerings
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Tommy A. Duncan, CMT is executive vice president of Quality Mortgage Services LLC. For answers to your QC and FHA questions, please contact Tommy at (615) 591-2528 or e-mail firstname.lastname@example.org. You may also visit Quality Mortgage Services LLC on the Web at www.qualitymortgageservices.com.
The crew from a la mode inc. shows their support at the MBA Annual Convention, (back row): Nick Solis, Chris Sullivan, Leonard Acquaye, Jennifer Miller, Scott Kinnard, Molly Dowdy, Brad Eaton, Jason Dowdy and Joe Buell, with (front row): Amanda Meredith, Christina Davidson, Whitney Glass, Stephanie Wilder and Lacey Beardon
Credit unions have the highest loan quality so far in 2010, based on postclosing quality control audits performed by Quality Mortgage Services LLC (QMS), a national compliance solution provider. In the study by QMS, nearly 50 percent of credit union loans are rated as “Excellent” whereas 34 percent of bank loans were ranked “Excellent” and non-bank loans ranked 22 percent in the “Excellent” category. These loans were audited for federal regulatory audits, credit and collateral analysis, and mortgage fraud. Non-banks took the lead in the “Good” ranking, where nearly 61 percent of the loans had minor loan defects, but were very marketable on the secondary market. Banks ranked at 56 percent and credit unions ranked at 43 percent. For the credit unions to score so well in the “Excellent” ranking, there is a noticeable difference in the credit scores and ratios. The average credit score coming from credit unions in 2010 is 761, whereas in 2009, the average credit score was 772. Banks averaged a score of 755 for 2010 and 2009. The nonbank credit score average came in at 737 for 2010 and 722 for 2009. Credit unions maintained a high credit score average of 761 for loans that ranked “Good” in 2010, while banks and non-banks had an average credit score of 736 and 710, respectively, in the “Good” category. When analyzing the percentile of pooled loans for purchase on the secondary market, credit unions and banks ran very closely at 92.17 percent and 91.13 percent respectively of loans with low loan defects. Non-banks had 83.03 percent of mortgage loans with low loan defects, which is the same percentile for 2009. The credit union average back ratio is another measurement that sets the credit union’s loan quality apart from the other lending institutions. The average back ratio for credit unions in the “Excellent” category currently came in at 33 percent where banks had an average of 36 percent and non-banks had 35 percent average for back ratios. In the “Good” category, credit unions maintained the lead with an average of 34 percent, banks were at 36 percent and non-banks had a 41 percent back ratio average. Credit union borrowers are financially a stronger borrower based on the results of post-closing audits. Credit unions and banks are very close in their averages for potential repurchases. Credit unions had a 7.09 percent ranking in the “Fair” category where loan defects may warrant a repurchase claim. Banks had a 7.78 percent “Fair” ranking and non-banks had a 14.21 percent loan defect ranking as “Fair” that may provoke a repurchase. When it comes to fraud for housing, credit union had a 0.75 percent ranking in the “Poor” category, banks had a 1.10 percent ranking and non-banks had a 2.76 percent ranking. This “Poor” category is where fraud for housing was discovered during the post-closing audit. The “Poor” category has nothing to do with a loan in default, but a ranking where the loan should have never been made.
In our second annual “40 Under 40” feature, you will find a list of the top mortgage professionals under the age of 40, as voted on by their peers, who exemplify professionalism and top production in today’s housing market. Despite the rough waters of the U.S. economy and the ever-shifting landscape known as the mortgage industry, these 40 individuals have persevered in a time of great uncertainty. In assembling this list, we at National Mortgage Professional Magazine took some criticism when we began this endeavor. Many felt a list of this nature ignored many, and others felt that a list of this type is a “thing of the past,” while some even cited age discrimination, but we firmly stood by our decision to assemble this group. Like their industry pioneers before them, these individuals are the ones who carried the torch of professionalism in the year 2010, fighting the daily barrage or regulatory and legislative pressure and negative coverage by the mainstream media as the culprits for the collapse of the U.S. economy. However, they forge forward, as they continue to lead by example and set the bar for education, professionalism and excellence in the mortgage industry. We’d like to congratulate all of the following individuals named to our “40 Under 40” list—in no particular order but alphabetical—and thank all the nominees for their participation in our second annual “40 Under 40: The 40 Most Influential Mortgage Professionals Under 40” feature.
Timothy Baise Top Flite Financial President and Chief Executive Officer
As president and chief executive officer of Top Flite Financial, an Inc. 5,000 company, Timothy Baise, CMC has been changing the lending industry, one person at a time, by being and staying in compliance with state and federal laws. While riding the edge or operating in grey areas may make for more short-term income, riding the straight and narrow line will produce long-term relationships, solid results and a permanent home for its employees and that is exactly what Timothy has done with Top Flite Financial. While most lending companies are downsizing or closing their doors altogether, Top Flite Financial has been increasing its revenue and has expanded its operations through the toughest economic times the mortgage industry has ever seen, all this under the direction and leadership of Timothy.
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Raymond Bartreau Best Rate Referrals LLC Chief Executive Officer and Founder Raymond Bartreau is chief executive officer and founder of Best Rate Referrals LLC in Las Vegas, Nev., a marketing company specializing in the mortgage industry. In 2010, Best Rate Referrals was named one of the fastest-growing companies in the country.
Don A. Blaize Franklin American Mortgage Mortgage Specialist Don A. Blaize, mortgage specialist with Franklin American Mortgage, has demonstrated his ability to be a leader within his community and state through his involvement with the Mississippi Association of Mortgage Brokers (MAMB) following Hurricane Katrina. Don has been involved with local organizations to promote homeownership in his respected community.
Joe Bowerbank Loan-Score Decisioning Systems Senior Vice President of Marketing and Strategic Alliances Joe Bowerbank has more than 15 years of marketing management experience in the technology and mortgage banking sector, helping to launch marketplace solutions, grow organizations, obtain technology adoption and build brands. He is a company-building marketing professional who understands what it takes to catapult growing ventures to the next level. Currently, Joe is the senior vice president of marketing and strategic alliances at Loan-Score Decisioning Systems, an Irvine, Calif.-based AUS vendor. Before joining Loan-Score, Joe was the vice president of marketing at Portellus Inc. Prior to Portellus, he headed marketing strategy at Commerce Velocity Inc., a mortgage AUS vendor, and prior to his time with Commerce Velocity, Joe was the director of marketing and market adop-
tion at Electronic Distribution Networks Inc. (EDN), a software communications provider serving multiple vertical markets. Joe sits on California State University, Fullerton’s UEE Advisory Board for their sales and marketing program course development.
Chris Brown Certified Mortgage Planners Mortgage Loan Originator Chris Brown, a mortgage loan originator with Certified Mortgage Planners, is changing the landscape of what a mortgage professional is and does. He is actively involved as an advocate for the mortgage industry through serving his fellow loan officers through the Mortgage Revolution, but he is also fully engaged with serving agents through REBar Camps, establishing Mastermind Groups, and coaches agents to help their marketing and business development.
Douglas Calabrese Terrace Mortgage Company Regional Operations Manager Douglas Calabrese is the regional manager for Terrace Mortgage Company in Tampa, Fla. where he oversees compliance and implements guidelines with varying investors and agencies. In addition to his full time position at Terrace Mortgage as regional operations manager, Douglas currently holds the position of treasurer for the Mortgage Bankers Association of Tampa Bay and supports The Children’s Home in Hillsborough County.
Adam Calvery a la mode’s Mortgage Solutions Division President Adam Calvery is the president of a la mode’s Mortgage Solutions Division, managing the company’s full line of compliance and quality control tools. His focus is spearheading the Mercury Network vendor management platform (VMP), which has just reached a volume milestone of 10,000 appraisal transactions per day.
Craig Doriot LoanSifter Inc. Founder and Chief Technical Officer Craig Doriot is founder and chief technical officer of LoanSifter Inc., a mortgage pricing engine and consumer direct application process that has helped revolutionize mortgage technology, and who has previously created other successful Internet-based ventures. LoanSifter has grown from its first customer in 2006, to servicing more than 670 mortgage-related institutions to date. Under Craig’s guidance, LoanSifter has pioneered the growth of pricing engines to help reach consumers on their terms with auto-quoting, e-mail campaigns, rate tables, open house flyers, consumer pricing portals and rate alerts.
Derek Egeberg Academy Mortgage Corporation Branch Manager Derek Egeberg, a branch manager with Academy Mortgage Corporation in Yuma, Ariz., is a consummate professional who is always willing to offer support and knowledge to the industry and loan officers across the country. He has been a supporter of The Mortgage Revolution since its inception and has spoken at both Mortgage Revolution events in Atlanta and New York. Derek fields frequent calls and responds to message board posts from originators around the country. His focus on creating a positive experience for his borrowers and referral partners helps to improve the image of loan officers and our industry as a whole. He also worked behind the scenes to help propel a major, industrywide legislative effort into the forefront earlier this year. Derek Egeberg is a great loan officer, a great leader and a great friend to many in our industry!
Chris Frost Frost Mortgage Banking Group Vice President and Operations Manager Chris Frost attended New Mexico State University, majoring in finance. He had worked part-time in commercial banking for three years to put himself through college. Chris spent a total of seven years in banking, culminating as assistant vice president and branch manager of the Bank of Albuquerque. He made his move to mortgage banking and Frost Mortgage Banking Group in December of 2002. Chris has been a top loan originator, sales trainer, sales manager, and now serves as Frost Mortgage Banking Group’s vice president and operations manager. Under his watch, Chris has helped grow the company from five local branches to 21 national branches encompassing 13 states. His team continues to strive for the divisional goal of 35 branches and $100 million per month in fundings.
Steve Grant Credit Plus Inc. President Steve Grant joined Credit Plus Inc. 20 years ago and has served as the company’s president for the past 13 years, directly overseeing the company’s sales and operations functions. Under his leadership, Credit Plus has grown from 10 employees to 125 and has experienced a 1,650 percent increase in sales. He is often called upon to author industry articles for his keen industry foresight.
Bryan Harlan Benchmark Mortgage Loan Officer
Jason “Hammer” Helmer Jacob Dean Mortgage Inc. Loan Originator Jason “Hammer” Helmer is well-known for introducing strategies on how to get more business and make more money with the 2010 Good Faith Estimate (GFE). Jason has been a speaker at multiple Mortgage Revolution events, and currently mentors a national audience of originators through his Webinars at RateAlert. Jason is a loan originator with Jacob Dean Mortgage Inc., in addition to serving as a business development consultant for Hammer Solutions LLC.
Greg Holmes Credit Plus Inc. National Director of Sales and Marketing
Greg Holmes joined Credit Plus Inc. four years ago as the southeast regional sales manager and was promoted to the position of national director of sales and marketing last year. Greg leads a team of regional sales managers and account executives. He has more than 15 years of experience in the credit-reporting industry and has been an integral factor to Credit Plus’ success helping grow the company by 20 percent and maintain profitability despite a weak economy.
Stewart Hunter Benchmark Mortgage President/Co-Founder Stewart Hunter, along with Bryan Hunter, co-founded Benchmark in August of 1999, and currently serves as company president. The holder of a BBA degree in Business Administration from Louisiana Tech University, Stewart is quite a visionary and has led the charge in Benchmark’s rapid expansion. Stewart oversees Benchmark’s expanding base of 167 branches, working closely with Gil Holloway on new branch partnerships and business development. Stewart also oversees the company’s underwriting, funding, closing and secondary market divisions, as well as Benchmark’s new products department. He also supervises daily branch and client support functions. For two years prior to Benchmark, Stewart was owner/operator of a branch for The Mortgage Factory in Frisco, Texas. He managed 10 mortgage consultants with Bryan Harlan, and assisted in the opening of satellite branches in Baton Rouge and Shreveport, La. In the mid-1990s, Stewart also worked for Landmark Mortgage where he met Bryan Harlan. Stewart was a top-producer at Landmark for two consecutive years, earning awards for being number one in the company for both units and volume. He was also inducted into the President’s Club.
Mat Ishbia United Wholesale Mortgage Executive Vice President Mat Ishbia is executive vice president of United Wholesale Mortgage (UWM) and is primarily responsible for growing UWM from 20 employees servicing $140 million in mortgages in 2006, to more than 200 employees closing more than $2 billion in mortgages in 2009. Recognizing the need for a workflow process that would serve brokers in record time, the company has grow into one of the top 10 Federal Housing Administration (FHA) lenders in the country.
Bryan Harlan is an award-winning MBA and senior executive with demonstrated success as an entrepreneur, CEO, trainer and mortgage consultant. Co-founded, organized and currently manages a national mortgage banking corporation with nearly 60 branch offices throughout the U.S. Bryan is experienced in strategic planning, business and product development and marketing execution. A goal-directed change agent and a skillful team builder with a sense of urgency, Bryan thrives on P&L responsibility and driving top-line revenue growth, as well as bottom line profitability. As the broker of record for Benchmark Mortgage, Bryan holds the prestigious Certified Mortgage Consultant (CMC) designation awarded by the National
In the industry for nearly nine years, Andy W. Harris is the owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and 2010 president of the Oregon Association of Mortgage Professionals (OAMP). As a passionate owner and high-producing originator, Andy took the market challenges head-on and motivated in 2007 with new DBA when everyone was doing the opposite. Vantage Mortgage Group has been profitable as a startup company not only every year, but in every quarter since 2007. Vantage Mortgage features unique and innovative origination and marketing systems with paperless processing. Andy has an excellent reputation in the and his personal articles and motivational pieces have been published nationally in different industry outlets.
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Born and raised in the Pacific Northwest, Annie Gulosh’s passion for the community is the driving force behind her desire to become a leader in the mortgage industry. Annie is a mortgage advisor with Portland, Ore.-based Northwest Mortgage Advisors, and the founder and visionary behind www.365ThingsPortland.com, where she posts a new idea for something to do in the Portland, Ore. area on a daily basis, whether it be a restaurant or coffee shop to check out, a theater or park to visit, a special event to look into, and more. Her grasp of the subtleties of real estate, as well as her compassion and commitment to her clients and their goals, is what sets her apart as a mortgage professional. Annie understands that the key to a perfect transaction is mutual trust and partnership, and considers her clients valuable assets to a winning team.
Andy W. Harris Vantage Mortgage Group Inc. Owner
Annie Gulosh Northwest Mortgage Advisors Mortgage Advisor
Association of Mortgage Brokers (NAMB). This designation has only been awarded to approximately 1,100 mortgage professionals in the country, based on experience, education and industry leadership.
Mark Madsen Raintree Mortgage Online Communications Manager
community. She donates her time, resources and money to numerous organizations, including CandleLighters Childhood Cancer Foundation, a charity for children fighting cancer; St. Andrew Nativity, a charity for educational scholarships; Mark Madsen is the online communications manager for Raintree and Care & Share through the Kerala Association of Washington, which raises Mortgage in Las Vegas. Mark is the owner of an expansive list of money for life-changing eye surgeries for children in India. nationally-recognized industry Web sites, including Patrick P. Palmer MortgageRevolution.info, MyFHAMortgageblog.com, Lenderama.com Pinnacle Capital Mortgage and WannaNetwork.com. Mark has been publishing articles online about homeownerNorthwest Division President, Regional ship education since 2005. While there are several responsibilities required of an inProduction Manager house social media manager, Mark’s primary role is to write mortgage-related conPatrick P. Palmer, Northwest Division president/regional productent online for the purpose of building trust new with clients and agents. With more tion manager, has helped grow Pinnacle Capital Mortgage from than six years of experience online building social networks, developing blogs, study50 employees to 700 within only two years as the president of ing search engine optimization (SEO) and writing for the industry, Mark also coaches his real estate partners through the setup and successful implementation of their Alpine Mortgage Planning. Patrick oversees day-to-day sales and operations within the company and has 15 years of experience in the mortgage lending industry. Internet marketing campaigns. Patrick was the co-founder and chief executive officer of Alpine Mortgage LLC in Lake Oswego, Ore. Patrick has been a Mortgage Banker since receiving his bacheKevin Marconi lor’s degree in Business and Economics from Western Oregon University in 1995. United Fidelity Funding
Chief Operating Officer Kevin Marconi is the chief operating officer of United Fidelity Funding LLC, a national wholesale and retail mortgage banker. Started as a de novo lender in 2007, United Fidelity now funds more than $1 billion annually. When others turned their backs on the wholesale business subsequent to the mortgage meltdown, Kevin began to focus on it, making third-party originators (TPOs) his primary business channel.
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Jason J. Pidgeon New England Federal Credit Union Mortgage Loan Officer
Since Jason J. Pidgeon’s start at New England Federal Credit Union in 2001, he has not stopped wanting to learn and be involved. After a few years of involvement in the Vermont Mortgage Bankers Association, he was nominated for the position of vice president of the association and currently serves as association president. Matthew McCabe Additionally, Jason has become one of a few loan officers in Vermont to obtain his Loan Resolution Corporation Accredited Mortgage Professional (AMP) designation through the Mortgage President Matthew McCabe is president of Loan Resolution Corporation (LRC) Bankers Association (MBA). In 2009, his annual loan production was 521 loans for in Scottsdale, Ariz. LRC has grown from three to 120 employees in $93,260,802, with one assistant and one processor. just three years. Matthew was actively involved with the operaJoseph Puthur tional development of LRC, and is now focused on priority client Mortgage Coach boarding and process improvement through streamlining the company’s short sale President and modification operations. LRC has ranked as the largest short sale vendor in the Joseph Puthur is the president of Mortgage Coach, re-inventing United States by file volume and number of contracts. LRC has contracts with the the industry’s most trusted selling strategy to embrace the government-sponsored enterprises (GSEs) and the nation’s top five servicers. Internet and mobile revolution. Joe and the Mortgage Coach team have released two ground-breaking products in the last 12 Gabe Minton months; Ratewatch and Edge. He is most known as founder and former chief Motivity Solutions Inc. executive officer of Lasso Technologies, a startup launched just after his 19th Chief Strategy Officer While working at the Mortgage Bankers Association (MBA), Gabe birthday, that pioneered bringing loan origination software online. In 2005, Ellie Minton spearheaded the furtherance of the Mortgage Industry Mae, the makers of Genesis, Contour, Encompass acquired Lasso Technologies to Standards Maintenance Organization (MISMO). Gabe has worked create Encompass Anywhere, the online version of Ellie Mae’s flagship product. tirelessly to help standardize the way technology data is utilized in Philip Rasori the mortgage industry, which has been adopted by most technology vendors and MCT Trading lenders. From his time with Ultraprise, to the MBA, to Mortgage Cadence, and now Principal and Chief Operating Officer as chief strategy officer of Motivity Solutions Inc., Gabe has been an advocate and Phil Rasori is a principal and chief operating officer with MCT leader for automation, control and standards for the mortgage industry. Gabe utiTrading, a risk management firm that brings big bank capital lizes his in-depth business experience, leadership and software engineering expertmarkets performance and execution to mid-sized lenders. Phil ise to drive the strategic planning process and develop third party alliances and and his homegrown analyst team have driven MCT growth, relationships, while strengthening Motivity’s technology products and initiatives. quadrupling the company in size over the past two years. Phil has continuously developed and improved the MCT HALO model over the past eight years. In the Gibran Nicholas course of his work, he pioneered a number of hedging metrics that have since CMPS Institute become de facto industry standards. Phil has also developed one of the indusChairman and Chief Executive Officer Gibran Nicholas is a professional writer, speaker and an entrepre- try’s first iPhone/SmartPhone apps for mortgage hedging. In addition to his work neur. Since 2005, he has been the chairman and chief executive in the mortgage industry, Phil is a central figure in a benevolent large micro officer of the CMPS Institute, a national organization that certifies lending project in Kenya that has just celebrated a 10-year anniversary. mortgage bankers and brokers. Gibran has personally trained Stephen Ribultan more than 6,000 financial professionals across the country, including CPAs, attorDocMagic Inc. neys, financial planners, bankers and mortgage brokers.
Executive Sales Manager Amanda Niles Summit Mortgage Mortgage Consultant Amanda Niles, mortgage consultant for Summit Mortgage in Portland, Ore., is a high volume producer on pace to close more than 150 mortgage loans in 2010. She has worked as a mortgage broker/banker for nine years and is active in giving back to the
At a young age, Steve Ribultan, currently executive sales manager of DocMagic Inc., has worked for several leading mortgage technology companies, including Commerce Velocity, Portellus, OpenClose, and presently DocMagic. In particular, and in the wake of numerous new regulations, Steve has been instrumental in introducing technology solutions to tackle new compliance issues to his clients and partners. Steve is a non-year veteran of the mortgage software industry.
Rick Richter Gold Star Financial Executive Vice President Rick Richter is executive vice president of Ann Arbor, Mich.-based Gold Star Financial. Rick has been ranked the number two loan officer in Michigan and number 22 in the U.S., and oversees 300plus loan officers raising productivity by nearly 400 percent in the last two years. Rick created and was responsible for Gold Star’s sales and client management system contributing to the company becoming an Inc. 500 company, and a growth forecast of more than 1,000 employees in 2011 making Gold Star the fastest-growing financial company in the state of Michigan over past two years.
Dawn Robinson PrimeLending Senior Vice President of National Production Dawn Robinson, senior vice president of national production for PrimeLending, is actively involved in the mortgage industry and spends time in Washington, D.C. lobbying for industry causes. Dawn was recently selected and has graduated from the Mortgage Bankers Association’s Future Leaders Program. She has grown up in PrimeLending, serving as an assistant branch manager, to loan officer, to vice president of secondary of product development and investor relations, to her current role with the company as senior vice president of national production. Dawn has watched PrimeLending been close $500 million in a year, to more than $7 billion year-to-date in 2010.
Rene F. Rodriguez MortgageDashboard Chief Executive Officer
Rick Roque was formerly a senior management team member at Calyx Software and is currently a mortgage technology and acquisitions consultant. He assists both technology and mortgage firms in meeting the needs of consumers throughout the mortgage lending process. Having spoken at more than 50 mortgage conferences over the last two years, including the first ever mortgage liquidity conference in Africa in 2009. Rick leverages his technology, process and mortgage lending expertise to grow adoption and top line revenue growth for his clients. At the present time, Rick leverages this consultative background on acquisitions and strategy for Ellie Mae in Pleasanton, Calif.
Adam P. Smith The Colorado Real Estate Finance Group Inc. President
John Glen Stevens ENG Lending Branch Manager John Glen Stevens is the current president of the Utah Association of Mortgage Brokers (UAMB) and branch manager for ENG Lending in Utah, with branches, in Draper and St. George, Utah. He is the delegate for the state of Utah to the National Association of Mortgage Brokers (NAMB) Delegate Council, and is serving as 2010 co-chair of the NAMB/WEST Committee. Previously, John owned his own company, Stevens & Shumway LLC. He serves on the Library Board for the City of Pleasant Grove, and ran for a seat in the Utah House of Representatives in 2010.
Louis Tesoriero Guaranteed Home Mortgage Company, Inc. Branch Development Manager Louis Tesoriero tripled funded loans for another mortgage company, from $30 million to $100 million, in just four months prior to joining Guaranteed Home Mortgage Company Inc. At Guaranteed, as business development manager, Louis has opened 15 new branches in his first two years with the company. Louis is responsible for the nationwide recruitment of full branch operations and the integration of their organization into Guaranteed Home Mortgage. In addition to finding new organizational opportunities, Louis also serves as a liaison for existing locations to ensure branch retention and a seamless interface with Guaranteed’s corporate headquarters.
Drew Waterhouse Hammerhouse LLC Managing Director and Chief Executive Officer Drew Waterhouse has 15 years of experience in mortgage headhunting and supporting strategic growth initiatives. During his career, Drew has lead and managed large teams with a publically-traded mortgage bank and a depository with a focus on building out production, leadership teams and value platforms. In 2008, Drew established Hammerhouse, a national recruiting and strategic growth partner, to help clients expand revenue by adding experienced mortgage professionals that focus on purchase business and have created sustainable relationships with referral partners and past customers. Hammerhouse currently supports an organic expansion for clients, which includes private equity firms entering and expanding in the market, as well as traditional mortgage bankers and depositories, with a focus on model matching and effecting high levels of retention.
Adam P. Smith is president of The Colorado Real Estate Finance Group Inc., a commercial and residential real estate finance firm. During his career, he has helped thousands of clients, both individuals and corporations, in their goals regarding real estate finance, as well as both personal and corporate finance
Andrew Soss is the founder and president of Stewart & Soss Mortgage, a full-service mortgage banking company located in San Jose, Calif. Andrew operates a seven employee operation and had personal production of $42 million in 2009, and is on pace to break $100 million in volume in 2010. Andrew is president-elect of the California Association of Mortgage Professionals, Silicon Valley Chapter and as the Government Affairs Committee chair, he has visited Washington, D.C. to lobby members of Congress on behalf of the independent mortgage professional.
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Rick Roque Menlo Company National Manager of Business Development
Andrew Soss Stewart & Soss Mortgage Founder and President
As chief executive officer of MortgageDashboard, Rene F. Rodriguez is responsible for leading one of the U.S. home finance industry’s leading mortgage technology firms. His unique methodology and approach to leadership and teambuilding have been indispensable to MortgageDashboard as it has innovated through the recent economic downturn. The firm is currently releasing version 4.0 of its loan origination system (LOS) and is poised to increase market share rapidly as the industry enters its recovery. Before assuming his current role, Rene was founder and chief executive officer of Volentum, an enterprise education and consulting company specializing in the application of “The Next Generation of Change Making” to deliver practical ways for individuals and groups to grow and renew themselves even as they engage and profit from recurring change. Prior to Volentum, Rene was CEO of Rapid Change, a consulting firm that trained more than 50,000 people and whose training and tools were named a Best Practice in three Fortune 250 companies, and chief learning officer, founder and former dean of the Corporate University for a national mortgage bank.
and has personally written billions of dollars in mortgage and finance deals. Adam lectures regularly on contact management and marketing to colleagues in the real estate, mortgage, insurance and financial fields. He has taught classes for several of the country’s largest real estate companies, countless title companies and many regional real estate boards. He has also taught technology classes for several Colorado Association of Realtors (CAR) events. The Colorado Real Estate Finance Group Inc is a member of the Denver/Boulder Better Business Bureau with a perfect record for as long as they have been such, and is a multiple recipient of the BBB Gold Star Award and was nominated for the 2009 Torch Award for Marketplace Trust. Adam was also nominated for the BBB Board of Directors in 2008.
Josh Weinberg First Choice Bank Director of Compliance Joshua Weinberg is a nationally-recognized speaker, author, trainer and leader in the mortgage industry, specializing in compliance and technology. He works closely with the Federal Reserve where he was asked to participate in pre-rule making design discussions of new Truth-in-Lending Act (TILA) disclosures; with the U.S. Department of Housing & Urban Development (HUD), working closely with the Department on Real Estate Settlement Procedures Act (RESPA) concerns; and is a member of the Registered Institutions Working Group for the Nationwide Mortgage Licensing System (NMLS) and many industry associations. Josh is currently director of compliance for First Choice Bank, a state-chartered, Federal Deposit Insurance Corporation (FDIC)-regulated bank in New Jersey, and he consults privately for mortgage banks and some of the top mortgage technology vendors in the country. Previously, Josh was in charge of compliance for Calyx Software and prior to that, he owned and operated a mortgage brokerage in San Francisco, Calif.
Andrew WeissMalik 360 Mortgage Group Chief Operating Officer and Vice President Andrew WeissMalik is chief operating officer and vice president of Austin, Texas-based wholesale lender, 360 Mortgage Group. With 10 years of mortgage industry experience in secondary marketing and IT, Andrew served as vice president of secondary marketing at Castle & Cooke Mortgage. His responsibilities there included managing the firm’s loan purchase programs, hedging strategies and IT implementations. Prior to that, Andrew was involved in secondary marketing activities at Echelon Mortgage and McAfee Mortgage (formerly Home Mortgage).
The Next 40 Mortgage Professionals to Watch … Due to the hundreds of submissions we received for our “40 Under 40” list, there are those who are making serious waves in the industry who could not be overlooked. They, like those on the “40 Under 40” list are the leaders of this industry for years to come, so keep an eye out as well for the following innovators and originators as they continue to shape the industry:
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Shane Backer ..........................GFI Mortgage Bankers, Senior Loan Officer Alex Barnett ..................Integrity First Financial Group, Principal Partner Jason Berman ................................................J. Berman Group, Principal Vladimir Bien-Aime............................Global DMS, Chief Executive Officer Mark Bolour ..............Bolour Associates, Chief Executive Officer/Principal Josh Bopp ..................................................................Focus IT Inc., Owner Tim Elkins ........................................PrimeLending, Senior Vice President Scott Estlund ..............First Choice Mortgage, Senior Mortgage Consultant William K. Farrar................................................Flagship Financial Group Lisa C. Forgony ..........................Mortgage Resources of South Florida Inc. Steve Gatti ......................Mortgages Unlimited Inc., Mortgage Consultant Shaun Guerrero ........................................The Legacy Group, Loan Officer Chad Thomas Hagwood ....................Beech Street Capital, Executive Vice President of Originations Mark J. Hanna..............................Directors Mortgage Inc., Chairman/CEO Nicole Marie Hudson ....................Interactive Financial, Vice President of Sales and Marketing Stephan Kachani ......Loan Oak Fund, Vice President of Sales & Marketing Kory Kavanewsky ................CMG Mortgage Corporation, Branch Manager Ryan Kohl........................................Express Capital Mortgage Inc., Owner Dino Lack ............................Wells Fargo Home Mortgage, Vice President, Wholesale Support Technology and Information Office Owen H. Munton ........................Prime Mortgage, A Division of Magnolia State Bank, Vice President Zubin Nagpal..................................Home Lending Source, Vice President Travis Hamel Olsen ....Loan Resolution Corporation, Chief Operating Officer Shelly Panzarella ......................Primary Residential Mortgage Inc. (PRMI) Matthew A. Pineda ......................Castle & Cooke Mortgage LLC, President Shawn Presnell ..................American Mortgage Centers, Branch Manager Marty Preston ................................Benchmark/mymortgagepro, Partner Ron Riemer..................GFI Mortgage Bankers Inc., Vice President of Sales Clinton R. Rockwell........BuckleySandler LLP, Mortgage Banking Attorney Bill Rogers..................................Homeowners Financial Group, President and Founding Partner Josh Shein ............Great Oak Lending Partners, Managing Partner/Owner Kyra Sommerville ..............................Inlanta Mortgage, Branch Manager Zach South............................................Best Rate Referrals LLC, President Kurt W. Strandson ......................Radiant Mortgage Inc., President/Owner Brian Swanson..........................Bank of Internet, Senior Vice President of Residential Lending Ernest Tepman..........................New American Funding, Branch Manager Tory Tarsitano ....................Capital Financial Bancorp, Owner/Originator Julie Toler ................Certified Mortgage Planners, Relationship Manager Ray Vinson III ................................Vinson Mortgage Group, Founder and Chief Executive Officer Dean Wegner ........................................W.J. Bradley, Mortgage Originator Jordan Weimersheimer ....Equity Mortgage Lending LLC, Branch Manager
heard on the street
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DartAppraisal.com chosen by HomeTelos for appraisal services and partners with McKissock for online appraisal education
Veros integrates with a la mode’s Mercury Network for compliance and appraisal ordering
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a la mode has announced that Veros Real Estate Solutions has integrated their VeroSELECT and Valuation Risk Management (VRM) products with Mercury Network’s vendor management platform. The integration connects Veros’ platform clients with the largest network of real estate appraisers and appraisal management companies (AMCs). The services will support realtime appraisal order placement, appraisal order payment processing, status updates through the order cycle, and delivery of the completed appraisal report in MISMO 2.6 format, and electronic appraisal submission in full compliance with the Federal Housing Finance Agency’s (FHFA) mandated Uniform Collateral Data Portal (UCDP). UCDP is being implemented by Fannie Mae and Freddie Mac as part of a greater loan quality initiative—the Uniform Mortgage Data Program—in order to provide seller/servicers with common requirements for appraisal and data delivery, ultimately improving loan quality and transparency across the board. The plug-in between Mercury Network and Veros provides platform users with the ability to connect to the appraiser’s desktop software as well as place orders directly to AMCs using Mercury Network as their vendor management platform. Additionally, the plug-in enables appraisal reports to be delivered to the Veros systems using fully compliant MISMO XML, which in turn, will allow the report data to flow directly to the UCDP. As a result, this connection will provide users with the ability to streamline compliance and enhance quality assurance. Business and workflow rules (which are executed on the appraiser’s desktop from within the Mercury Network plug-in) preprocess the appraisal report before it is delivered to the Veros system. “This integration with Veros perfectly positions our two companies to
DartAppraisal.com, a national provider of residential real estate appraisals, has announced that HomeTelos LP has selected the company as their appraisal services provider for the newly awarded U.S. Department of Housing & Urban Development (HUD) single family residential portfolio. HomeTelos LP, a Dallas-based real estate services and technology firm and approved GSA schedule contractor, was selected to provide new and advanced marketing strategies to sell HUD’s singlefamily residential homes in five regions, covering 25 states and additional U.S. territories. A quick and accurate appraisal valuation is a key element to the execution of selling strategies for the portfolio HomeTelos manages. The geographic area covered by HomeTelos’ services under these contracts includes Alabama, Arkansas, Colorado, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Mississippi, Missouri, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia and West Virginia, including Puerto Rico and the U.S. Virgin Islands. “Our experience in working with Asset Managers for REO valuations makes this a natural partnership,” said Darton Case, president of DartAppraisal.com. “Since 2006, DartAppraisal.com has specialized in REO appraisals. We specifically train our key REO appraisers annually to ensure compliance with all regulations, understanding of the latest changes and avoidance of common reporting errors.” As part of the company’s commitment to quality control, DartAppraisal.com has trained hundreds of appraisers throughout Texas and Georgia on the specifics of real estate-owned (REO) valuations. Additionally, DartAppraisal.com recently introduced DartAdapt quality control technology to on each appraisal to attain the highest level of accuracy. DartAppraisal.com has also announced the launch of Dart Academy, a partnership with McKissock LP to offer online options to appraisers for continuing education and pre-licensing/upgrade purposes nationwide. McKissock LP is a nationally-recognized online provider of appraisal education, with approved courses available in all 50 states and three U.S. territories. Tracey Meldrum will serve as the DartAppraisal.com vendor coordinator overseeing the launch and implementation of Dart Academy. Meldrum was recently added to the team to provide additional resources to the company’s expanding appraiser panel. DartAppraisal.com has relied on McKissock for educational services
since 1996, when Case himself began updating his continuing education credits both online and in classes through the company. In 2006, as the number of properties in foreclosure mounted, DartAppraisal.com prepared its appraisers in several cities to follow U.S. Department of Housing & Urban Development (HUD) real estate-owned (REO) appraisal guidelines with McKissock by offering a full day course on the subject. For more information, visit www.dartappraisal.com, www.hometelos.com or www.mckissock.com.
MRev Hits New York
On the weekend of Oct. 15-17, National Mortgage Professional Magazine had the pleasure of attending another Mortgage Revolution event at the Westchester Marriott in Tarrytown, N.Y. MRev founders, Mark Madsen, Mark Green and Brian Larrabee were assisted with the New York show by fellow North Easterner, Jason Klaskin. Working with some very helpful sponsors, such as Credit Plus Inc., Mortgage Coach, Mortgage Planner CRM, Top of Mind Networks and Estate of Mind, the industryâ€™s top originators had a chance to hear from some of the best trainers in the industry, including Dave Hershman, Rene F. Rodriguez, and Joe Puther, as well as hearing from a huge list of experts on topics ranging from social media, to video marketing, to sales management. The biggest takeaway from the event ... invest time in helping others build their business ... get paid huge dividends. In addition, attendees learned tips on creating viral videos, time management tools and all enjoyed some great networking opportunities. Stay tuned to MRev.org for details on future events.
Khai McBride delivers his presentation on sales management and customer retention
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Anny Havland fields questions during her session on video marketing
Rene F. Rodriguez discusses the traits of leadership during his session
Chris Brown explains how to use social media to gain business during his Social Media 101 presentation
We offer Wholesale and Retail Branches
Dave Hershman explains how making a commitment to your industry will pay dividends during his lively session
Jonas Kruckeberg delivers his session on video and how to effectively use it to boost your business
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continued from page 31
achieve several of our shared priorities, such as forward-thinking compliance, and high-quality finished appraisal reports,” said Adam Calvery, a la mode’s president of mortgage solutions. “We’re excited about the implications this development has for our respective customers.” Veros’ platforms are designed to intelligently order, receive, review and route appraisals, broker price opinions (BPOs) and automated valuation models (AVMs) as well as other forms of collateral valuations and analytics. “We’re delighted to be working with Mercury Network,” said David Rasmussen, senior vice president of sales and operations for Veros. “The ability to seamlessly connect with Mercury’s diverse network of appraisers and AMCs all the way through the valuation chain to the secondary market creates an industry efficiency where everyone wins.” For more information, visit www.veros.com or www.alamode.com.
Fiserv renames its servicing platform “LoanServ”
First American Title forms new REO and settlement services network
LenderLive Network continues to expand
continued on page 41
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LenderLive Network Inc., a provider of business process outsourcing and technology to the financial
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First American Title Insurance Company has announced the formalization of First American’s National Title Insurance and Settlement Solution (FANTISS) network. The FANTISS network provides a central point of contact to assist lenders in closing large volumes of real estate-owned (REO) transactions through First American Title Insurance Company’s network of local offices nationwide. FANTISS team members provide lenders with a single point of contact throughout the settlement process, allowing for a greater level of simplicity and efficiency when closing multiple-property portfolios. Through the FANTISS network, lenders closing multi-property REO portfolios will experience standardized and consistent processes, communication, technology, underwriting and pricing. Further, First American Title has a national underwriting staff dedicated to working directly with the FANTISS network, which allows lenders to efficiently resolve any title-related issues that may arise during the REO sales process. “We are offering a unique and branded solution that benefits both lenders and their home-buying customers,” said Mike Conway, eastern division president for First American Title. “With today’s high volume of REO sales transactions, traditional regional providers offer little standardization and can simply be overwhelmed. By utilizing the FANTISS network, national lenders will experience the convenience of working with a single point of contact while buyers will receive the same quality and personalized service that they have come to expect when working with First American Title Insurance specialists at the community level.” For more information, visit www.firstam.com.
Fiserv Inc. has announced the renaming of its Loan Servicing Platform to LoanServ. As a single-platform, real-time solution, LoanServ combines mortgage loans, consumer loans, indirect financing, home equity loans and lines-of-credit and distressed-loan functionality into one core system so that all of a borrower’s retail loan relationships can be supported on one platform, creating efficiencies and convenience for financial institutions. Most recently known as the “Loan Servicing Platform” from Fiserv, LoanServ grew out of the company’s MortgageServ solution which at the time was the first Web-enabled, real-time solution for all aspects of mortgage servicing and management. As the financing needs of borrowers evolved over the past decade, Fiserv invested in a development strategy to add support for not only home equity loans and lines of credit but for other retail loan products as well. As a result, LoanServ is the only servicing system that has integrated support for all of these financing instruments. “The name change is a significant statement about our vision,” said Thomas Gorman, president of Loan Servicing Solutions, Fiserv. “One of our greatest challenges is ensuring that product innovation is not only a ‘good idea’ but is also a fundamental contribution to business process improvement. LoanServ is a powerful solution that ultimately offers a diverse range of financial institutions greater control over their operations and more flexibility to support products, policies, regulatory changes and customer relationships.” Designed to support any size or type of institution, LoanServ can be
deployed at a range of financial organizations, from entrepreneurial loan servicing operations to the largest financial institutions. By reducing disparate technology systems and redundant interfaces, and integrating online, real-time transaction processing and workflow automation into a single software system, LoanServ allows banks, credit unions, specialty lenders and investors to add loans to their portfolios while reducing costs, increasing productivity and creating opportunity. For more information, visit www.fiserv.com.
A View From the C-Suite Predictions and Strategies in a Down Market By David Lykken
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
Never before has it been more critical First of all, let’s talk about the almost that you carefully and conscientiously certainty of a “down market.” With consider your business strategy. We are interest rates being in the low fours and in unprecedented times. What has a high threes, doesn’t it seem a bit illogworked in the past is not going to work ical that we should be in a “down marin the future, at least to the same ket.” I can understand why some might degree. Everything has changed! Unless ask the question: “How can this be?” As you recognize it and deal with it intelli- the then presidential candidate Bill gently, I predict you could be forced out Clinton so aptly put it, “It’s the econoof business. And the most painful part my stupid!” With interest rates at hisof that will be watching those who toric lows, I can see how some may wisely choose the right strategy not have the mistaken notion that we could only just survive, but thrive making have another refinance boom. record profits. I predict While refinancing activthat some of the compaity has been brisk in recent nies that will survive will months, representing as surprise you, and even much as 80 percent of more surprising will be some company’s pipelines, the ones that don’t. Just I predict that refinance look at the Mortgage volumes will drop signifiLender Implode-O-Meter cantly next year. The key (www.ml-implode.com) if culprit preventing any kind you doubt this. of refinance boom is home Some of you reading this values and unemployment may be old enough to or under-employment. The remember the TV show fact is that we, as a nation, “Kung Fu” from the 70s, and “What has worked in are still recovering from a you may recall “The Master” “hangover” from the last the past is not going (Poe) telling Caine to “Choose to work in the future, drunken refinance binge wisely Grasshopper.” Never that created an unpreceat least to the same have there been so many dented “housing bubble” degree. Everything forces out there in the now burst that has resulted has changed!” industry seemingly working in property values falling against us. It seems, at by as much as 40 to 50 pertimes, as though the cards are stacked cent in some markets. Even more conseagainst us. This is especially true when you quential is that there is a high probability consider the tsunami of regulations coming that we could still see another 15 to 20 at our industry, along with a growing num- percent drop in property values in some ber of foreclosures potentially driving home parts of the country before we hit bottom values down even further and therefore and start any kind of a recovery. challenging any potential lift we could see However, property values will not from ongoing refinancing activity. So, read begin to stabilize and improve until the and consider carefully the following and e- overriding issues of unemployment and mail me your thoughts. under-employment are solved. That, At the recent 97th Annual Mortgage plus we need to work through a huge Bankers Convention in Atlanta, I had and growing existing housing inventory, the privilege of speaking on a panel are the results of a growing number of where the discussion centered on the foreclosures. Until all of these issues are title of this article, “Growth Strategies in addressed and are behind us, there will a Down Market.” Some of the content be no recovery. Government spending for this article came from my presenta- has failed to lift us out of this morass. tion and predictions that I made as a Consider the fact that, at the time of this panelist. writing, 23 percent of all existing home
sales is made up of foreclosures. It is anticipated that percentage will grow to as much as 40 percent, possibly more, before we have finally turned the corner. So, when considering your strategy for 2011, my first recommendation is for you to plan for an overall industrywide slow down in the market that could continue into 2012. If you plan accordingly and I am wrong, you will do fine. However, if you do not plan for a down market and we do in fact experience a down market, you could find yourself out of business. But before assuming I am offering a gloom and doom outlook for the next year and beyond, please read on. What I find most interesting about what is going on in the marketplace today is the amount of capital flowing into the mortgage industry. What are investors seeing as the opportunity? To put it in perspective, allow me to remind you of a scene from the movie “Forrest Gump” where Forrest and Lt. Dan rode out the hurricane in the Gulf of Mexico. When they returned, they discovered that all of the other shrimp boats had sunk. The competition was wiped out … gone! They were one of the few survivors. The short of the story is that they capitalized on the demise of others and made a fortune. It is important to keep in mind that, in the midst of turmoil, there is always opportunity and the greater the turmoil, the greater the opportunity. So ask yourself: “How much turmoil has this industry experienced recently?” And then ask yourself the corresponding question, “How much opportunity exists for those that can recognize it and capitalize upon it via the right strategy?” How do you spell E-X-T-R-A-O-R-D-I-N-A-R-Y? One of the first questions asked of me when I spoke at the 97th Annual MBA Convention in Atlanta was, “David, with all of your consulting experience, what are some of the biggest issues and potential opportunities facing our industry?” Here is how I responded: “It certainly could be said that new regulations, such as the Dodd-Frank bill, along with higher capital requirements are some of the biggest issues facing our industry today, but these two issues are actually bringing about what I believe is a far bigger issue and corresponding opportunity. I believe the biggest issue facing our industry is a ‘capacity crisis’ and here is why. While it is true that the industry loan vol-
umes have, and will, most likely continue to drop over the next 12-18 months, what is dropping even further is the number of industry participants left to serve the consumers real estate financing needs.” Back to the movie Forrest Gump … all of the “shrimp boats have sunk” and I am not just referencing companies but also think of all the individuals who have left the industry as well. I went on to say: “Consider the fact that as many as 50-60 percent, or as high as 70 percent in some cases, of those taking the new Nationwide Mortgage Licensing System test are failing to pass the first time. And that doesn’t take into consideration all of those who are being denied licenses due to poor credit. Simply put, it is distinctly possible, if not almost certainly probable, that we, as an industry, will not have enough licensed persons now to take loan applications from the consumers seeking residential financing, whether it be to purchase a new home or to refinance an existing home.” Again, how do you spell E-X-T-R-A-OR-D-I-N-A-R-Y opportunities? This could mean a number of things for you and your business strategy. It is essential that you have a strategy to deal with more loan volume than you can handle. The absence of such a strategy could have disastrous consequences in spite of the fact that it looks like you are “prospering” even in a down market. Almost everyone understands that too little business will certainly put a company out of business, but far fewer understand that too much business can do the same and actually do so faster … one is the result of an obvious demise and the other is a far more subtle demise. The following are two strategy recommendations that I am suggesting you consider before you find yourself taking on more business than you can handle. The following two recommendations will help you avoid the subtle “greed” trap that has blinded many from the subtle demise of not knowing when enough (volume) is enough. First, you have to establish a wellthought-out strategy in advance by using detailed financial planning models to determine how much volume your company can handle before blowing up. If you don’t have a good
financial model, create one or call a consulting firm to help you build one. They can mean the difference between life and almost certain death. Second, I cannot stress enough the importance of having good systems that provide you empirical data (intelligence) of what is going on within your company at each and every stage, and in each and every department. By good “systems,” I mean both computer and operational systems that effectively monitor all activity at every level and at every stage of your operations. And, all of this data from your “systems” should be fed back into your financial model (usually a detailed spreadsheet) so you don’t fall prey to the trap of taking on more business than you can actually handle.
“… greed commonly blinds us from accurately seeing the juncture of where volume goes from being a bottom-line blessing to becoming an overall disaster that blows up your company.”
If we think 2010 was a tough year, then hang on because 2011 is going to be fast and furious. With all of the legislative and regulatory changes coming within the next 18-24 months, we will not be able to sit back and hope it all works out for the best. Yes, there is some good news … all loan officers, no matter who you work for, are now going to be paid on an equal compensation program. Unlike in the past, either one side or the other had an advantage, but now compensation becomes one set of guidelines starting April 1, 2011. Loan officers, effective April 1, 2011, will be paid off the loan amount only, plus any bonuses developed by companies, with nothing involving fees, programs or interest rates. The broker/owner is going to have to plan for all of the following:
number of challenges in developing a plan for 2011. It may be overwhelming, but as the old anecdote says, “How do you eat an elephant … one bite at a time.” The year 2011 may one of the most challenging years to date, but it is going to be one of the most exciting and fun years as you develop your company into the fighting machine it has to be to survive. Don’t give up. As you look at the overall market, in 2006 there were 1,800 mortgage companies in the state of Illinois alone and a total of 18,000 loan officers. In 2011, we will see less than 700 companies and approximately 5,000 loan officers in Illinois. How does that make you feel? It should make you feel fantastic as you are a survivor who has less competition to deal with and you will have a 1. How is my company greater opportunity with going to be paid? “Remember, no mat- the right plan to gain 2. How much is my comincreased market share. ter what the market pany going to make on Everyone predicts that was doing, good or the loan? the banks are going to bad, the mortgage 3. How much does it cost take over the market, I customers came to for me to originate the can assure that has been you, the mortgage loan? said at least five times since 4. What is my compensa- broker and mortgage 1986. Mortgage brokers tion program going to and mortgage bankers banker, because you look like? continue to survive and were more knowl5. Am I going to have a develop their own market edgeable, persistent bonus program and how in getting a loan and and niche. Why, because is going to be structured? they are innovative and are more economical.” 6. Is my company going filled with an entrepreto be a broker, banker or neurial spirit. So, let’s be a hybrid? aware of what others are doing, but let’s 7. How do I attract good producing loan develop our own plan for survival and officers? increase our presence. Remember, no 8. Can I stay competitive? matter what the market was doing, 9. Am I going to be able to meet all of good or bad, the mortgage customers my deadlines on my own, or do I need came to you, the mortgage broker outside help? and mortgage banker, because you 10. How do I make sure I keep my loan were more knowledgeable, persistofficers within Nationwide Mortgage ent in getting a loan and more ecoLicensing System (NMLS) timelines and nomical. requirements? As a mortgage broker and a mort11. Have I met all of the minimum gage banker, we also one other thing wage and labor requirements? that no financial institution can sat 12. What is your mortgage origination and that is we are licensed profesprojections for 2011? sionals … be proud of that. Once you have figured out how to Now that you have answered navigate your business through what these questions, you are ready to sit lies ahead in 2011, I hope you’ll pondown and develop your own busi- der what you can do in terms of helpness plan for 2011. In the past, we continued on page 36 have never had to experience the
To listen to author David Lykken’s online radio show, log on to www.blogtalkradio.com and type in “Lykken on Lending” in the “Search” box on the right-hand side of the page.
By Marve Stockert
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
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. 101 or e-mail email@example.com.
2011: The Year of Big Decisions
Again, greed commonly blinds us from accurately seeing the juncture of where volume goes from being a bottom-line blessing to becoming an overall disaster that blows up your company. There are any number of strategies you can employ to effectively manage this situation, but it all starts by having good systems built and operating in advance that feed accurate information into a good financial model that is closely monitored by management. Another issue that I see in the course of consulting to hundreds of clients across the country is that many good originators or companies that are good at loan originations lack the skill set or discipline to effectively build (much less monitor) their systems or their financial model. An effective strategy in this case would be to retain a consulting firm to help you manage those areas of your business that you are not good at managing or that you intentionally choose not to manage. On an increasing basis, my own consulting firm is ask to build financial models for companies and then play a key role as a contract executive management team that monitors these critical areas. Oftentimes we can do so, and as the saying goes, “better, faster, cheaper,“ than you trying to learn how to do it yourself. As any business coach will tell you, it’s important to know what you’re “good at,” but it’s even more important to know what you’re “not good at” and surround yourself with the necessary resources to shore up those areas that you’re not good at or that you
may not have the time to deal with on a day-to-day basis. Another strategy that I recommend you consider is “taking your business to the next level” by “moving up the food chain.” By this, I mean if you are operating as a mortgage broker, you need to become a mortgage banker. If you are operating as a mortgage banker, but are still selling loans on a “best efforts” basis, you need to “move up the food chain” and start selling directly to the agencies on a “mandatory” basis. Trust me, once you learn how, you will find that the risks are actually less selling on a “mandatory” basis than on a “best efforts” basis. And, if you have bought the lie that it is difficult to find capital partners (investors) to invest the necessary capital to take your business to the next level, don’t lose heart. There is more capital looking to invest in our industry than ever before. But it’s highly unlikely that an investor is going to walk through your front door and say, “I want invest money in your company.” So, you do need to know how to go find them (the investor) and be trained and equipped to “tell your story” and present your business opportunity in such a way so as to cause them to see the value of making an investment in your company and eventually writing you a check. Again, a key component to raising capital is having an excellent financial model that accurately portrays (models) how your business’ income and expenses occur at various stages or volumes. While this may be a “down market” year, it does not have to be a down and out market for you if you employ the right strategies some of which I have suggested above. As always, I welcome your feedback on this or any article. Also I recommend that you listen to my weekly radio program, “Lykken on Lending” that can be heard by going to www.LykkenOnLending.com. Each week, we discuss one of the hot topics within the industry, as well as providing you with an update on interest rates, legislative initiatives, and even tips on how to become more profitable.
ing the industry at large. The greatest opportunity to make a far-reaching impact comes when many small companies band together as one. Whether that’s through getting involved in a trade association, making an appointment with your legislator, taking continuing education classes or attending industry events, we all have many opportunities, and the responsibility, to not only see to it that our companies endure, but that our industry thrives as well. So as we enter the year 2011, we have a lot to look forward to as long as we are willing to make the difficult decision and put together a plan that is real and obtainable. We
will continue to be under attack, but we have survived 15 years of new regulations and we continue to be here, so they cannot do much more to hurt us.
Embrace These Five Actions and Grow in 2011
Marve Stockert has been executive director of the Illinois Association of Mortgage Professionals (IAMP) since 1996. Prior to that, he was involved in the retail, wholesale and servicing aspects of the mortgage business, primarily in the state of Illinois. He has been involved in legislative issues on the state and federal issues. Marve resides in Chicago and can be reached by phone at (630) 601-8601 or e-mail firstname.lastname@example.org.
By Josephine Nicholas
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
Apartment Apartment Lending L ending n is our business. bussiness. $250M to $2MM* $250M Up to 75% loan-to-val loan-to-value ue Competitive Com mpetitive rates, fees and ter terms ms Over Ove er 60 years combi combined ned exper experience rience in mul ti-family financing multi-family *Larger *Lar gerr loans considered on a case-by-case case-by-case basis.
Call us with Call with your your next nex t rrenewal. enewal. W We’re e’re ccommitted ommitted ttoo hhelping elping yyou ou cclose lose tthe he bbest est ddeal. eal. Vivian V ivian Madey 630-242-7251 vmadey@ba bankfinancial.com nkfiinancial.com A Austin, , San Antonio Antonio,, Dallas/F Dallas/Fort or t W Worth, or o th, Den Denver, ver er, Salt Lak Lakee City
Jonathan Jonatha n Willems Willems 630-242-7249 jwillems@ba bankfinancial.com nkfiinancial.com Baltimore, Baltimor e , Philadelphia, Kansas City, Cityy, St. Louis,, Raleigh/Durham
Jennyfer Col Colon on n 630-242-7248 jcol jcolon on@ba bankfinancial.com nkfiinancial.com Columbus, C olumbus,, Louisville, Louisville , Minneapolis/St. Minneapolis/St. Paul, Oklahoma Oklahoma City/Tulsa City/Tulsa
1-800-894-6900 www.bankfinancial.com Member Me mber FDIC FDIC
Helping He elping you do more. more .
When the team at National Mortgage For example, you could say that you want Professional Magazine asked me to your processing times to become more write an article for their November efficient, your people to buy more into 2010 issue, I was thrilled because I am your vision, your team to work as a unit literally brimming with ideas on how to instead of a hodge podge of unconnected efforts, your lenders to help businesses succeed understand you and your in the upcoming year. clients more, your commuBut Josephine, you ask, nity and local media to “How can we grow when respect your market the industry is still reeling, knowledge, or numerous when our teams have other goals. shrunk, guidelines have When you focus on tightened, and our lives are these “smaller” items, still in seeming disarray?” individual items that you Well, sit back, pour yourself can work on very specifisome coffee (although you cally, you will in turn see may not need the caffeine growth in your bottom after you read this article), and enjoy the below out- “… remember that the line. Find coaches, curriculum, trainers, advisline of five action steps I’ve key to leveraging listed to help you succeed. social media for busi- ers, and others who can help you focus on these ness is to use it as a things in your business, I. Sharing is caring platform to provide and watch the seemingly We all have a unique your network with miraculous growth. value or talent that we valuable, timely and bring to the business world, and the minute we relevant information.” III. Steady on Sometimes, it’s simply share that with others is the minute we become more successful. about pursuing, very diligently and How often has a business tip you’ve effectively, those things that you do picked up from a friend or business best, or even about being the one acquaintance given you just the right organization that is still there in the amount of knowledge or confidence aftermath of tragedy. An organization I work with, the you needed to close new business? An exchange of ideas and information that CMPS Institute, is a pretty great examyou have learned from business experi- ple of this concept. CMPS’ founder and ences not only makes you and the one chairman, Gibran Nicholas, has stayed you are sharing this information with firm to the original intentions of the richer, it also establishes a quality busi- company, to be the standard of excelness relationship, which results in more lence in the mortgage industry, and the leading training and certification closed business. I’m a longtime, successful entrepre- organization in the mortgage industry neur and I know this works from expe- for mortgage professionals who want rience. For example, most recently, I market-based training and to be a part have taken this concept and decided to of something wonderful and bigger help people in my immediate commu- than themselves. CMPS members were nity who are wondering, “How can I be very loyal to the Institute through the that expert the media calls on and last couple tumultuous years, and interviews?” Many people don’t know Gibran was faithful to them, continualwhere to start and the tips I pass along ly churning out relevant and timely curat no charge have resulted in net closed riculum. CMPS members hold their desbusiness of more than I could have ignation proudly and tell the Institute they are proud to be associated with an even imagined. organization that has upheld its reputation and continued steady on through II. Smaller is better Pick a part of your business where you industry crisis. When you are true to your company want to see huge growth and pursue it with complete focus, and don’t tell me “I and yourself, when you show people want to see huge growth in my bottom that you are here to stay in the ebb and line,” because what I’m talking about will flow of this industry, they will gravitate result in an increase in your bottom line. to you, and you will see growth.
IV. Embrace change and don’t waste your time
bank can operate in all 50 states withIt’s no secret that these have been tough out being licensed in all of them, which times for the mortgage industry. When the means nearly six figures or more than real estate market began its meltdown, $65,000 in savings per licensed mortgage everyone pointed fingers: Was it the fault broker per year. This can add up to an of the Realtors? The lenders? The brokers? enormous annual savings for a mortgage Needless to say, the brokers took the company, depending on the number of brunt of the criticism and became a scapestates in which they do business. Also, goat of the market crash. Brokers were getsome banks are in trouble ting a bad rap, making it and the Federal Deposit more difficult to be a seriInsurance Corporation (FDIC) ous option to customers. wants them cleaned up, Federal and state regulawhich also makes this an tions were becoming more attractive option. The downstringent so brokers were side to this option is that, no required to do more papermatter how well -capitalized work and find new a mortgage company is or approaches to their work. If how much the deal will help that wasn’t enough, it startthe bank, regulators may not ed to become more clearer allow such a deal to move that lenders were going to past initial conversations cut back on the number of because in the end, they brokers they used—or stop “Mortgage companies often do not want to see a using them altogether. that are running a mortgage company buy a It was obvious there were clean and reputable bank. going to be big changes operation should be ahead for our industry. To a able to adjust and Starting a bank: This certain extent, it was option requires a large inevitable. But how is a move with the market. amount of capital to mortgage company to surBut flexibility is key, get started ($15 milvive, let alone thrive, in this and in some cases, lion-$30 million). It is kind of environment? changing with the also very difficult and The first step is to market could mean extremely time conaccept the changes on the suming to get approved horizon. Mortgage compa- changing your business by federal regulators. nies that are running a model altogether.” clean and reputable operation should be able to adjust and move Applying for your own Full Eagle FHA direct lender license: This is incrediwith the market. But flexibility is key, bly difficult to pursue from scratch and in some cases, changing with the because in order to meet the criteria market could mean changing your busirequired for federal approval, a comness model altogether. pany needs experience, infrastrucOne way to do that is to become a ture and a back-office among others. direct lender. If the brokers become the Approval can take a long time to lender, they can offer more options and obtain and the process can be better service to their customers and help extremely time-consuming. insure that they won’t be shut out by lenders. But with a major change like this comes many daunting challenges, from Becoming a branch of a federallychartered bank: By doing this, the learning to do business on a new software mortgage company becomes part of system, to educating employees that the the bank. The benefit is that the shift is a positive one and not negative. mortgage company becomes a There are several ways to become a direct lender, but the downside is direct lender and adapt to today’s econthat the mortgage company owners omy. Each one has its own pros and must essentially walk away from cons. Here are a few of the options:
Josephine Nicholas runs her own PR agency, Insert Catchy Headlines. She specializes in mapping out individualized media campaigns, and offers a comprehensive array of services to handle the diverse PR needs of her clients. Her clients have appeared regularly as local media experts, and have also appeared in other national and local media outlets, including, but not limited to, MSNBC, Fox Business News, CNN, and NPR; in the Wall Street Journal, Reuters, The New York Times, The Washington Post, Financial Advisor Magazine, Financial Planner Magazine, CPA Magazine, and various entertainment and lifestyle outlets. Josephine is passionate about giving back to others, and, together with siblings Gibran, Jaad and Jihan, runs Party with a Purpose, the Nicholas family’s non-profit arm. She may be reached at by e-mail at email@example.com or by phone Buying a bank: A federally-chartered at (734) 385-6170.
continued on page 38
An entrepreneur specializes in seeing
By Joshua Shein
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
V. Get rid of the desert mentality and think like an entrepreneur
The New Mortgage Company: Changing Your Business to Thrive in Today’s Market
They say insanity is doing the same thing over and over and expecting a different result—I find too many people that are doing this in their businesses. Holding onto old mentalities, ways of doing business, preconceptions, marketing strategies, and so on, will get you nowhere but left behind. It’s important that we don’t waste our time in 2011. For example, let’s take women in executive positions, or as leaders, are any of us still stuck in the old mentality in this regard or are we recognizing that, as more people are looking at alternative forms of income, we are seeing more and more women make the leap towards being an entrepreneur and taking leadership roles across the board? Along with their market knowledge, women have a tendency to ask the most personal of questions in a natural way, and this sets the stage for relationship building; we know that true relationships with clients, vendors and peers are the foundation of any successful business, and that relationship building is an essential skill for growing in this market. Growing in 2011 will require that we don’t waste our time with the old ways of thinking and embrace change. Speaking of change, how many of you are using the “new” social media tools— Facebook, Twitter, and more? If you are not, commit to using one or more of these tools going forward. When you do, remember that the key to leveraging social media for business is to use it as a platform to provide your network with valuable, timely and relevant information. In this age of information overload, people are constantly being bombarded with an overwhelming flow of information and noise. This means that people don’t need more information … they need relevant information. If you are the one providing it to them, it elevates your value and transforms your network of friends, clients and prospects into a referralgenerating sales force. Also, if you are in management, embrace change when it comes to how you relate to your employees; those who succeed and grow in 2011 will be those taking a regular pulse of their employees. Be well aware of the unique value contributions your team members make, and you will be uniquely equipped to position employees in just the right places in the company where they will thrive; thereby growing your business. Remember, companies that grow are companies that consistently change with their environment and grow to meet the needs of their markets, engendering customer loyalty.
what others have seen and thinking about it in such a way that nobody has thought about it, thereby creating an innovative idea. This initiative then creates a spark of change, which leads to improvement in whatever area of humanity they are contributing to with the idea they’ve created. Others look at these situations and see only the “desert” around them—dry, empty, hot and an environment in which it’s virtually impossible to succeed. If you are, instead, someone who is willing and able to convert a new idea or invention into a successful innovation, you will see tremendous growth in 2011. I firmly believe that the great upside to the massive amounts of tragedy we’ve seen is that men and women who felt stuck in certain positions and afraid to pursue their dreams are now free— if not forced—to pursue their passions. The economy has forced people to reevaluate their priorities, reassess their skills and pursue entrepreneur mindsets without being held back by a job to which they feel tied down. If you are facing changes, take a moment to look at things with the entrepreneur’s hat on, and see how that helps you grow. Market changes have also caused a significant shift in the needs and wants of consumers across the board. In any industry, an innovative entrepreneur who identifies and addresses this shift creates an unbeatable connection with consumers. Deep inside us all, we have a desire for our vendors to know our names, and to supply our needs because they anticipated them before we even voiced them. When we address this desire and do everything we can, at our own expense, to instill trust in skeptical consumers, we will see a significant upturn in growth.
their company and hand ownership over to the bank. Consolidating or merging with an established direct lender: A direct lender will already have the infrastructure and warehouse capacity in place to offer a variety of loans. Ideally, the mortgage company brings additional state licensing to the table, as well as the ability to bring in a larger volume of customers. This option requires a lot of legwork because the mortgage company will have to apply for lender licenses in every state in which they operate, and all the licenses must become effective at the same time in order to close on the merger.
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Merging with a lender involves lots of lawyers, state licensing agencies, paperwork and meetings, meetings and more meetings. That’s after finding a strong candidate for a merger. One place to look for a partner is through a trusted compliance and regulatory attorney. Just as they work to keep the mortgage companies in compliance, they may also know of an FHA Full Eagle direct lender who runs a clean operation and is looking to make a change or expand. With a merger or any of the other options, shifting from mortgage broker alone to both broker and direct lender will require compliance and software updating, training all employees on the new systems and—perhaps the most challenging change—a major shift in corporate culture. The broker mentality used to be, and for some still is, that there are an infinite number of lenders to go to try to get the loan approved and the product mix is diverse. The broker’s approach is focused on the sales cycle, as well as analysis and collection of data and documentation, but not necessarily the final underwriting or decision. But when a mortgage company becomes the lender, its employees must look at every loan and every borrower differently, as if they were lending out money from their own pockets. This can be a challenge for processors and loan officers who are more accustomed to moving quickly through high volumes of loans and having numerous options of lenders with whom they can broker a loan. It is also a difficult adjustment for brokers who are accustomed to shopping around for the lowest rates and best deal to fit any situation, to now find themselves limited to one rate sheet and only the loan products that their company offers. But it is important to remind these employees that, on the upside, they can work more efficiently, spend less time searching for the best product and close deals faster.
Still, it is a tremendous challenge for the culture. Making the shift takes lots of phone calls, meetings, discussions and even lots of arguing. It takes a lot of repeating the same message over and over and over again. It means reminding employees that it is no longer an option to go somewhere else because the rate is slightly better or because one lender didn’t approve a loan, but that they can talk to the underwriter and all the people who will handle their loan from beginning to end or from origination to close. And reminding them that this is a good thing because the loan is controlled in-house and they can close loans faster. It also means making compliance changes: Figuring out what new documents and disclosures will be needed as a direct lender to close a loan, what a loan submitted from an originator will look like and how to streamline the process of submissions. A new software system may also be required to move loans through the system in a succinct and cohesive manner. Then, the mortgage company must work hard to educate its employees about the procedures necessary to close deals and train them on new software systems, while assuring them that with every loan going through the same software package, workflow will improve. It may take lots of Webinars, conference room training sessions, coaxing and coddling to make them see these the positives, but as employers, it is our job to show it to them. When a mortgage company also becomes a lender, a lot of new, scary things are thrown at the employees, but new and scary can also be very good. As the shift takes place, many brokers will likely realize they want to work with a mortgage company that is also a direct lender. And even with the change, their job will remain much the same: Locking loans, submitting loans and addressing conditions on loans. In the end, some employees will leave, while others will stay. Some new ones may also come along. Many will recognize that there are not many other options out there because there aren’t many brokerage firms left these days. They will likely recognize that change is a good option, and in this market, it may be the only option. Joshua Shein is chief executive officer of 1st Maryland Mortgage Corporation d/b/a Great Oak Lending Partners in Timonium, Md. He founded the company more than nine years ago and recently led Great Oak’s merger with 1st Maryland Mortgage Corporation, which made the company a FHA Full Eagle direct lender. He may be reached by phone at (443) 901-7617 or e-mail firstname.lastname@example.org.
Mortgage Professionals: Where Are You Headed in 2011? Gain ground in the new year with practical marketing growth strategies By Joy Gendusa
Do you feel like you have been treading least should be) readily eye-catching. This, water ever since the housing bubble burst? If at minimum, ensures that your prospect at you have, where is that getting you? It comes least views your message, even if the card down to this: If you aren’t progressing, you’re eventually ends up in the trash. When created with a solid strategy, a postcard camregressing. That’s just the way it is. The key to growing your business in paign goes a long way towards solidifying this market is implementing a proac- your credibility in the community. The fact is 79 percent of tive strategy. Being reachouseholds read or skim tive in this economy will direct mail advertising, kill you and marketing is according to the 2010 DMA the best way to combat Statistical Fact Book. the dire market and grow Moreover, an International despite industry trends. Communications Research Often, when things get study found people were bad, businesses react by 31 percent less likely to cutting their marketing ditch unopened mail than budget. It seems like a good delete unopened emails, idea, and you start saying, and 45 percent said they “I could pay bills off, people found direct mail less won’t respond anyway, “Being reactive in intrusive than e-mail. etc.” The problem with that When you send out theory is, if you market, this economy will kill people will respond—and you and marketing is postcards, you boost visibility, a necessary element actually in higher numbers the best way to comof an effective marketing than if the economy was bat the dire market campaign. When you send booming. But why? and grow despite out ads or invitations Most businesses slash industry trends.” through the mail, about 80 their marketing in hard percent of your prospects times. But if you don’t, all of the people who need mortgage serv- give you the chance to woo them. With a ices will contact you because you’re the quality call to action and compelling copy, you will see a great response. only message out there. Also, it’s important to choose the So, what does that mean going forward? Let’s look at how you can take right marketing firm to handle your your business on an upward journey in direct mail campaign. Be sure to find 2011. Here are three important strate- one that is willing to share previous gies you can immediately implement to samples of their work. Also, ask if they will work with you on the design (i.e. get moving in the right direction. They may not be flashy, but these give you free revisions, listen to suggesclassic marketing techniques are tions, etc.). It is often helpful to select a proven to work … and why fix some- firm that handles printing and mailing thing that isn’t broken? The key to suc- in-house. This can save you money on cess in this medium is diligence, so be postage because they mail in bulk. ready to commit. Single serving efforts in these areas are a waste of money. By 2. Networking the same token, if you apply them in a The dreaded word … networking. Not consistent schedule, they flat-out work. always a pleasant experience, but it’s a must-add to our list as another great form of marketing, especially in the financial 1. Direct mail: industry. It may be intimidating for some Maximizing your return people, but the effort is well worth it. The on investment (ROI) There are many options these days in the benefits really do outweigh the awkward direct mail industry (letters, flyers, door moments of attending mixers. Simply hangers, etc), but the most effective and having lunch with a few real estate agents time-tested way to increase name recogni- can be a huge boost to your business. No amount of direct mail ads or an tion and get new leads is postcards. Postcards deliver results because there is no amazing Web site design can fully conenvelope to open and the designs are (or at vey who you are to your prospects.
There is something about your physical presence that lends credibility and trust—so be real and not too sales-like. Search for mortgage professional groups and look over the events they host in your area. Some of the best ways to establish contacts in the community can be found through these events. While you’re at it, read Keith Ferrazzi’s book on networking, Never Eat Alone: and Other Secrets to Success, One Relationship at a Time. He is a power networker, but even the most timid can gain valuable lessons from his insights. Remember, there is no more powerful form of marketing than word-ofmouth. People trust their peers far more than they trust advertisers. Networking gets people talking about you. And that’s a necessity, since many mortgage professionals rely heavily on referrals. If you are disinclined to put yourself out there in the networking field, try to strategize. Who will make the biggest impact for your business? Find out who the big influencers are in your community that can spread the word about your company. Select two or three individuals in your area who are well-connected to the real estate industry and introduce yourself to them. Invite them to lunch, tell them about
your vision and convince them that your business plays a role in this market. If all goes well, you could see a significant difference in traffic just based on these individuals’ recommendations. That’s not too scary. So direct mail and networking are Elvis and The Beatles. They are the classics, but what is the next big thing? Well, it won’t be on stage—it’ll be on the computers … and every smart phone in the building. You probably guessed it! It’s social media. For the more timid networkers among us, online social networking is a dream come true. It’s also effective, which is nice bonus.
3. Social media Social media is great for posting funny pictures and interesting anecdotes from your day, but is it really a viable growth strategy for expanding your business in 2011? Quite simply … absolutely! According to the 2009 Realtor Technology Survey, 84 percent of real estate agents engage in social media to some extent. If you want their business, you go where they are, and for the vast majority of them it’s social media. Two social media sites prime for targeting real estate agents are Facebook and LinkedIn. Facebook wins the popular
vote, according to the same study, with 78 percent of respondents saying they use the Internet colossus. LinkedIn, a business networking site, comes in at a very respectable 58 percent. Signing up for these sites is free, and using them is actually quite simple. Register for an account and take a few minutes familiarizing yourself with the site and you will immediately be more comfortable with it. For Facebook, you want to create a Fan Page for your business to give realtors the opportunity to connect to you. Also, search for groups that may contain prospects. For example, “Real Estate Agents Dallas” might turn up a networking group of professionals for the Dallas area, and it would be a great place to meet potential clients. On LinkedIn, it’s even easier to make business connections because that’s the whole point of its existence! It allows you to build connections with other professionals and also get recommendations from past clients to build your credibility. Use it to post news and articles about your business. Remember, nobody likes blatant advertising on social media. If you want to succeed, you need to offer valuable content that subtly promotes your business. This is especially true for Facebook and less so for
LinkedIn. Informative articles, facts, trivia questions and contests are great ways to involve people and market your business. Dedicate yourself to executing these three growth strategies, and you’ll be on the right track to grow your business in 2011. This is a fantastic place to start, but always remember to implement a complete marketing plan that integrates each marketing element to get the most for your marketing dollar. Of course, you could always just keep treading water and hope things work out, but do so at your own risk. It’s never too early to start planning ahead for 2011. Grab the reins to your success and enjoy the ride. Joy Gendusa is chief executive officer and founder of PostcardMania. She began PostcardMania in 1998 with nothing but a phone and a computer and zero investment capital. By 2008, revenues reached nearly $19 million and the company now employs more than 150 people, prints four million and mails two million postcards each week representing more than 40,000 customers in over 350 industries. For more information, call (800) 628-1804, ext. 342 or visit www.postcardmania.com. 39
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heard on the street
continued from page 33
industry, has announced the company has moved to larger office space to accommodate recent, as well as future, growth. The company has increased its office square footage from 25,000 to 73,000 and has also more than doubled its workforce during the last year. “As demands for mortgage services increase, we needed to position our company to handle that growth,” said Rick Seehausen, president and chief executive officer of LenderLive. “This additional space enables us to meet that goal as well as helps us be well poised for the future.” LenderLive is very active in providing comprehensive and component based fulfillment services to lenders of all sizes. The company has experienced rapid growth in all areas of its business including contract underwriting, closing coordination, doc prep, and title and closing services. For more information, visit www.lenderlive.com.
Great Oak Lending announces merger with 1st Maryland Mortgage Great Oak Lending Partners has announced that it has merged with 1st Maryland Mortgage Corporation of Damascus, Md. The merger
makes Great Oak a direct lender with the ability to fund up to $25 million a month in loans. Great Oak was ranked number one in Maryland for reverse mortgage production and volume for the fiscal second quarter of 2010 by RMInsight, a provider of data and analysis for the reverse mortgage industry. It has also been recognized as one of the fastest-growing reverse mortgage companies nationwide. Great Oak provides traditional mortgages on new homes and investment properties, as well as refinancing and reverse mortgages. The merger combines 1st Maryland Mortgage’s seven employees with Great Oak’s 58 full-time employees. The new company plans to hire an additional 20-30 people by the end of the year. As part of the merger, Joshua Shein was promoted to president and chief executive officer of the new company. The combined company will be called 1st Maryland Mortgage, but will operate under the name Great Oak Lending Partners. Financial terms of the deal were not disclosed. “This merger will allow us to meet all of our customers’ needs in-house, from underwriting to closing to funding loans,” Shein said. “These additional services and our predicted growth over the coming months reinforce our position as a major player in the mortgage industry.”
Great Oak Lending has three offices in Maryland and operates in seven other states. The company plans to be operating in another seven states by the end of the year. For more information, visit www.greatoaklending.com or www.greatoakreverse.com.
Aklero Risk Analytics formed to serve loan quality market Aklero Process Solutions, a provider of automated data and document validity assurance for the mortgage industry, and Hall Underwriting & Consulting, a mortgage risk analysis firm, have merged to form a new company, Aklero Risk Analytics Inc. The result of this merger is a state-of-the-art loan quality and risk analytics company, combining Aklero’s Q-Close loan quality and risk analytics platform with Hall Underwriting’s experienced mortgage loan quality analysts and forensic underwriters. Under the terms of the merger, Aklero Process Solutions and Hall Underwriting & Consulting will each remain wholly-owned subsidiaries of Aklero Risk Analytics. Aklero Process Solutions President and CEO Brian Fitzpatrick will serve as CEO of Aklero Risk Analytics and Hall Underwriting CEO Clayton Greenfield will serve as president and chief operating officer. “This merger is symbolic of what the mortgage industry needs to properly ana-
lyze risk and ensure loan quality: A combination of experienced forensic analysts and intelligent automation,” Fitzpatrick said. “Loan quality is the keystone to the industry’s recovery. As a result of this merger, we’re now uniquely positioned to set the bar when it comes to ensuring loan file integrity and mitigating mortgage risk. We look forward to working with players of all segments of the mortgage industry who share our goal.” “The integration of our expert underwriting and forensic analysis staff with Aklero’s automated deficiency detection and risk analysis tools have enabled Hall Underwriting to take its underwriting and quality audit services to a whole new level. There are several companies out there that can underwrite and perform mortgage loan quality control audits, but the combination of this unique technology and our expert analysts creates a solution that quite frankly is unprecedented in this industry and trumps the competition,” said Greenfield. For more information, visit www.aklero.com.
Altisource forms origination, modification and loss mitigation partnership with Members United Altisource Portfolio Solutions, a provider of knowledge process services related to real estate mortgage portfolio management, asset recovery management and continued on page 42
Originating and closing loans these days can be very challenging. Lengthy turn times, inexperienced underwriters, and high costs can contribute to fewer closed loans.
“Protect your loans with GSF” Contact the Client Relations Manager today at
1-877-494-4448 or email@example.com
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GSF Wholesale is the safe and secure place for all of your business. Our experienced staff is dedicated to ensuring your loans are protected. With seasoned underwriters, efﬁcient quality control department and competitive pricing, GSF Wholesale is focused on you and your business every day to meet the challenges of the new lending environment.
GSF Wholesale The Safe Place for your business!
heard on the street
continued from page 41
customer relationship management, and Members United Corporate Federal Credit Union, an $8.9 billion financial institution that provides wholesale investment, credit, payment and correspondent services to approximately 2,100 credit unions, have established a strategic alliance to support Members Unitedâ€™s credit union members. â€œThe alliance with Altisource, one of the nationâ€™s leading mortgage service providers, was established to help Members Unitedâ€™s 2,100 member credit unions navigate through these
turbulent economic times,â€? said Kevin Brauer, senior vice president of member relations for Members United. â€œThrough this alliance, Altisource will offer its origination, modification, loss mitigation and real estate services, as well as technology, to credit unions to help them effectively manage their distressed loans and mortgage application processing needs. Using the power of aggregation, this alliance will allow our members to improve service and performance while also reducing costs.â€?
Altisource leverages its 20-year servicing heritage and more than 3,000 employees to provide products and services to some of the most respected organizations in their industries, including one of the nationâ€™s largest sub-prime servicers, government agencies and many lenders, servicers, investors, financial services companies and hedge funds across the country. â€œDue to the unique nature of each memberâ€™s business, an â€˜off-the-shelfâ€™ solution would not address our needs,â€? said Tim Bruculere, vice president of lending for Members United. â€œWe interviewed several companies, and Altisource was the only provider who understood our needs and offered tai-
lored solutions across our member community.â€? For more information, visit www.altisource.com or www.membersunited.org.
Mortgage Professionals to Watch James Bennett has been named president of the Nevada region by Stewart Title.
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Michael Dimech has been named head of operations at Total Mortgage Services LLC. Chris Knowlton has been promoted to the position of vice president of technology and marketing of Inlanta Mortgage and Inlanta has also added John Malinger as its new underwriter. Radian Guaranty Inc. has announced the hiring of Brien J. McMahon as chief franchise officer. Embrace Home Loans has named Louis Centrella and Wayne Ferguson as loan officers for its Wilmington, Del. branch. Meredith Boyd has been named director of sales for Kirchmeyer & Associates. The Collingwood Group has appointed Mary Lou Christy as the companyâ€™s senior vice president. Solidifi U.S. has named Mark Critchfield and Tony Laurito as vice presidents of business development. Peter G. Butler has been named vice president of national sales for LenderLive Network Inc. Chad Thomas Hagwood has joined Beech Street Capital as executive vice president of origination. BluFi Direct Mortgage has announced the promotion of Ken Emminger as its new senior vice president and the hiring of Kimera Hobbs as its new human resources manager. Joe Drum has been appointed executive vice president of WFG National Title Insurance Company.
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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: firstname.lastname@example.org Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.
StreetLinks SCORes with new underwriting and risk assessment tool
continued on page 44
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Fairway Independent Mortgage Corporation has announced that it is rolling out a full suite of fulfillment services for financial services companies who want to grow their mortgage lending operations, but
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
Fairway Independent Mortgage announces full suite of fulfillment services
StreetLinks National Appraisal Services has announced the launch of a new underwriting and risk assessment appraisal review product, StreetLinks Comparable Opinion Report (SCORe). SCORe will provide lenders with a reliable second opinion of the validity, accuracy and appropriateness of the comparables utilized in an original appraisal. SCORe is a limited-scope, USPAP-compliant review completed by an independent appraiser with experience and geo-competency in the subjectâ€™s specific market. â€œAutomated valuation models (AVMs) rely on flawed or limited public data, while out-of-market appraisers lack local market knowledge and have no access to local market data (MLS),â€? said Steve Haslam, StreetLinks chief executive officer. â€œThe only reliable way to validate the comparable selection and the credibility of an appraisal is by utilizing a second local appraiser with the knowledge, tools and data available to do so. SCORe accomplishes this at a speed and price far more attractive than other credible and compliant appraisal review products.â€? SCORe utilizes an independent, unbiased, local-market appraiser to review the comparables selected in an original appraisal. The SCORe appraiser, who is proximate to the subject property with access to the local market MLS, researches the data to provide a second opinion of the appropriateness and quality of the comparables selected by the original appraiser. SCORe results provide underwriters and risk managers the confidence and/or credible criticism about the validity of the comparable selection which is the nucleus of the appraisal process and the ultimate determinant of the final value opinion. A SCORe report that contradicts the original appraiserâ€™s comparable selection can also serve as an FHA or HVCC compliant basis for lenders to responsibly appeal the original appraisal or to order a replacement appraisal. For more information, visit www.streetlinks.com/SCORe.
may lack the capital, resources or infrastructure to do so. As a fulfillment services provider, Fairway Independent Mortgage will be leveraging its experience and capital as a nationwide, fullservice mortgage banker. The company funded over $3.5 billion in mortgage loans in 2009 and is on pace to either meet or exceed that volume in 2010. By outsourcing their underwriting, processing and document preparation needs to Fairway Independent Mortgage, lenders, banks and credit unions can expand their mortgage lending operations while saving money and enjoying the benefits of Fairwayâ€™s state-of-the-art technology, fraud prevention tools, appraisal management services, and expert staff. Fairway can also help financial institutions maintain compliance with regulatory changes such as the Dodd-Frank Wall Street Reform and Consumer Protection Act. The company will be offering four different business solutions. Fairway Advantage is an entry-level of participation is for the originator who only wants to provide minimal documentation, such as a loan application, credit and income documentation and rate quotes. Fairway processes and underwrites the loan, reviews title documents and prepares the closing package. Fairway Direct is designed for originators with minimal mortgage lending experience who can provide mortgage application and supporting documentation from borrowers and complete the initial disclosures to meet regulatory compliance. Fairway completes processing of the loan application by underwriting the loan, reviewing title documents, and preparing the closing package. Fairway Traditional is a traditional third-party originator (TPO)/lender relationship in which the lender originates and processes the loan, including ordering the appraisal and title work. Fairway prepares the closing documents, schedules the closing date and table funds the loan. Fairway Correspondent is for originators that want to fund their own loans through bank deposits or warehouse credit lines, Fairway performs the credit and collateral analysis and readies the loan to close. Following closing, the loan goes to Fairwayâ€™s post-closing department, where Fairway obtains any additional documentation, perfects the purchase of the loan and delivers the loan into the secondary market. For more information, visit www.fairwayindependentmc.com.
new to market
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Advanced FICO Analytics Incorporated into Experian’s MBS solution FICO, a provider of analytics and decision management technology, has announced that Experian Capital Markets is adding, as an option, the most advanced FICO credit score to its CreditHorizons for Securities solution. Sellers and investors of mortgage-backed securities (MBS) use Experian’s CreditHorizons for Securities to surmount the limitations of loan-level data when analyzing credit risk in MBS. The addition of the FICO Score, branded
by Experian as the Experian/FICO Risk Model, will give RMBS managers, marketers and investors deeper insights for evaluating creditworthiness of the underlying mortgages in non-agency loan pools. CreditHorizons for Securities is used to improve pricing strategies on the sell side, while helping buyers make investment decisions with greater confidence and improve risk management. The FICO Score brings an added dimension of predictive power, enabling users to better assess risks of delinquencies and defaults from securitized mortgages.
Investors benefit from using fresh FICO scores instead of scores calculated when loans were originated, since recently reported changes in borrowers’ credit behavior will likely change their credit risk. “FICO is the dominant provider of credit scoring solutions to the mortgage industry,” said Jordan Graham, executive vice president of scores at FICO. “As an extension of this position, we are excited to offer more comprehensive solutions to support the needs of the secondary market and securitization process for US mortgages. We believe this combination of Experian Capital Markets and FICO solutions will increase investor confidence and make for a more efficiently functioning market.” For more information, visit www.myfico.com.
Call FURST Conferencing solutions for Mortgage Companies
CallFURST Audio Conferencing enables your mortgage company to communicate immediately. We have a versatile suite of products that can support meetings of any size. We offer Reservationless Audio Conferencing, Operator Assisted and Event conferencing all with 24 x 7 x 365 live help available.
How mortgage companies are using CallFURST Audio Conferencing I Branch manager meetings I Sales training and coaching I Addressing problems with active loans in the pipeline
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CallFURST Web Conferencing can be used to conduct live meetings, perform training, provide remote help or give presentations via the Internet. In a web conference, each participant sits at his or her own computer and is connected to other participants via the internet. CallFURST live help is available 24 x 7 x 365. How mortgage companies are using CallFURST Web Conferencing I Borrower presentations I First time homebuyer webinars I Software and systems training for employees We offer:
CallFURST Video Conferencing supports features such as Video Reservations, video streaming and the latest technology allowing you to connect with end users regardless of their platform or technology. Video conferencing is key to keeping business connected as travel budgets tighten and the time we have to get things done is ever-decreasing. Using Video Conferencing, you can be sure you have access to more personal attention and training through our team of video experts, the latest in product innovation and proven service and reliability to ensure your message is successfully communicated. How mortgage companies are using CallFURST Video Conferencing I Presentations to large groups Lowest Pric I Educational programs for branch ofﬁces e Guarente I Software and systems training for employees e If we can't m eet or beat y conferencin our g servicing For more details on how CallFURST Conferencing pricing, I wil give you a $ l 10 Starbuck s gift card. helps to improve your company's communications,
contact Joel Furst, Esq., President at
888-9-ITS-YOUR-CALL (888-948-7968) or at email@example.com Visit CallFURST.com
Call us at 888-948-7 968 to see how we can sta saving for rt you
Wolters Kluwer offering lenders new mortgage information kits Wolters Kluwer Financial Services has announced the availability of the company’s new mortgage application and processing kits. The kits can be used by lenders to educate borrowers on the mortgage process, helping them to improve their financial literacy. The kits can also help lenders expedite the application process in order to close more loans; ensure disclosures are compliant and provided to borrowers as required; and make sure marketing activities are consistent across branches. Both the application and processing kits can be customized to a lender’s specific business, marketing and branding needs. The application kits can be provided to borrowers in English or Spanish. A standard mortgage application kit includes a letter outlining the benefits of working with the lender for their mortgage needs, a loan application with easy-to-follow instructions, as well as several consumer education pieces. The application kit helps educate borrowers upfront by providing consumer education materials from how to select a mortgage to closing cost information. To help the lender ensure compliance with federal disclosure requirements, the kit also includes the U.S. Department of Housing & Urban Development’s (HUD) Settlement Cost Booklet and The Consumer Handbook on Adjustable Rate Mortgages. Once the application is complete, a lender can have Wolters Kluwer Financial Services send the borrower a mortgage processing kit. The kit contains all of the compliance disclosures and ancillary documents specific to the borrower’s loan that are required by federal law to begin processing the mortgage. Wolters Kluwer Financial Services assembles the processing kit on behalf of the lender by collecting borrower data from them via the company’s Secure Document Exchange (SDX) service and printing, assembling and mailing the kit directly to the borrower from the company’s secure fulfillment center. “By outsourcing these compliance, fulfillment and distribution activities to Wolters Kluwer Financial Services, lenders can make their production and origination functions more flexible, adaptable, and nimble while reducing cost and compliance risk,” said Jason Marx, vice president and general manager of the company’s Mortgage business line. For more information, visit www.wolterskluwerfs.com/kits.
a la mode launches new eSignature service a la mode has announced a dedicated client service team for enterprise users of its document eSigning solution, SureDocs. This expansion is a response to rapid SureDocs adoption among large lenders and originators, who have selected SureDocs because of the
unlimited usage pricing policy and the built-in automation needed for larger scale operations. All SureDocs clients, regardless of volume, have unlimited 24x7x365 phone support from a la mode’s headquarters in Oklahoma City, Okla. access to a large training library, and free online classes. Now SureDocs enterprise customers will gain even more services, including access to a personal account representative who will assist them with integration, training, and other needs unique to larger clients. “We’re excited to provide this new level of service to SureDocs enterprise customers,” said Adam Calvery, president of the a la mode’s mortgage services division. “We’re proud of our long standing reputation for excellent service and around the clock live expert help, and this new level of service is a natural evolution for our growing base of enterprise customers.” SureDocs is the document eSigning solution designed specifically for the mortgage lending industry, both in features and in pricing policies. Unlike error-prone solutions that require manual signature tagging, SureDocs recognizes disclosure forms and automatically places signature tags. This automation eliminates the wasted time associated with resending documents for additional signatures or initials. For more information, visit www.alamode.com/suredocs.
The system serves as an important tool for lenders by delivering timely and precise income data to confirm original verification information. “As repurchase activity and instances of fraud both continue to rise, exact documentation is essential in order for lenders to avoid excessive obligations or undisclosed mortgage debt,” said Janet Ford, senior vice president of The Work Number. “Point in Time offers a ‘retro’ income verification review that lends transparency to the underwriting efforts that were performed at the time of origination.” Point in Time uses a custom, automated workflow designed to capture and reuse employer data by tracking and documenting agent progress and findings.
With permissible purpose, it can also access The Work Number’s unique employer database of current and historical payroll data for more rapid delivery. Point in Time presents a cost-effective method to quickly re-verify a borrower’s income at the point of loan funding without compromising data security. For more information, visit www.equifax.com.
Wipro Gallagher Solutions introduces loan processing outsourcing tool WiproGallagherSolutions (WGS), a provider of cost-effective, endto-end loan origination technology and fulfillment services for mortgage lenders, has combined its fully host-
ed and managed origination system, NetOxygen Cirrus, with its loan processing services to form a complete end-to-end loan fulfillment and servicing platform. This new business line enables lenders to focus their efforts on generating revenue, while using WGS to perform the loan fulfillment, loan sub-servicing and vendor management tasks. WGS’ new offering was designed to be a part of a long-term strategic solution for mortgage lenders as opposed to a temporary way to cut costs. Among other benefits, the outsourcing platform: Reduces operational costs; increases speed to market; and continued on page 46
The Work Number launches Point in Time service for retro income verification
At REMN, we understand that there’s nothing ordinary about focusing on what’s important: our customers. We recognize that continued lifeblood of our business. We believe that every application is precious and treat each file with the respect – and urgency – it deserves. Even better, at REMN, same-day approvals are guaranteed. We promise extraordinary service in an ordinary world.
Learn more at www.remnwholesale.com
Real Estate Mortgage Network, Inc. is located at 499 Thornall Street, Second Floor, Edison, NJ 08837. NMLS #6521. This information is for use by mortgage professionals only and should not be distributed to or used by consumers or third parties. Information is accurate as of date of printing and is subject to change without notice.
* Same-day decisions guaranteed if file is received by 11 a.m. EST.
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We’re not afraid to be different.
business from our satisfied customers is the
The Work Number, a service of Equifax, has announced the company’s newest product, Point in Time, a retro income verification service that validates and documents a borrower’s employment and income at the point of loan funding. Point In Time was created to respond to market demands for loan level documentation to investigate repurchases and mortgage insurance rescissions. According to Freddie Mac, a top underwriting deficiency seen in their Q1 2010 reviews of performing and non-performing loans is income misrepresentation, resulting from inaccurate or insufficient data and calculation errors at the time of loan origination. The volume of loans being returned for some type of data deficiency is significant. Through the second quarter 2010, Fitch estimates that the four largest U.S. banks have received $10.7 billion in pending repurchase requests from Fannie Mae and Freddie Mac alone. And, government-sponsored enterprises (GSEs) are requesting that defective mortgages be repurchased at a more rapid pace, which will put greater resource strain on lenders needing to prove underwriting due diligence. The Work Number developed Point in Time to help lenders, insurers and investors manage the increasing volume of unstable loans by automating and streamlining retro income verification for the quality assurance process.
new to market
continued from page 45
improves customer service and the ability to quickly adjust for production peaks. “Flexibility is the key component of the WGS solution; our customers are able to utilize WGS for complete end-toend fulfillment or for specific functions within the loan process,” said Anil Raibagi, general manager and business head at WGS. “This new platform also provides our services on a variable pricing structure, enabling clients to gain the maximum skill sets.” For more information, visit www.gogallagher.com.
DocuSign signs partnership to promote real estate transaction productivity
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DocuSign has announced that it has entered into a partnership with Mosaic Corporation, a business process optimization firm specializing in paperless back office workflows, where the DocuSign electronic signature service will be integrated with the docSTAR Broker Central real estate software product to create an end-to-end document and transaction management solution specifically tailored for residential and commercial real estate brokerages. “Broker Central is a paperless document and transaction management solution tailored specifically for the real estate market. It allows real estate professionals to efficiently and effectively manage real estate documents to drive paperless transactions, improving customer satisfaction and the bottom line,” said James Kingery, president of Mosaic Corporation. “Now with the inclusion of DocuSign, the number one
electronic signature service in real estate within docSTAR’s Broker Central, real estate brokerages have a complete document and transaction management solution to better succeed in a highly competitive real estate market while making significant inroads with green initiatives.” Broker Central is a collaborative software-as-a-service (SAAS) offering from Mosaic and docSTAR, a leader in document management software solutions. It was developed to layer transparently on existing workflows, minimizing interruptions in productivity. Broker Central securely scans and stores paper documents, along with critical electronic files, allowing for immediate retrieval. With the integration of the DocuSign electronic signature service, docSTAR’s Broker Central will provide real estate professionals the ability to manage the entire real estate transaction from the Web from offer to closing completely paperless. docSTAR’s Broker Central offers a green, fully optimized, end-to-end electronic document and transaction management solution for residential and commercial real estate brokerages and marketing centers. docSTAR’s Broker Central users will join more than 30,000 real estate professionals eliminating paper and expediting real estate transactions with DocuSign. Rather than driving across town to get a signature or forcing clients to find a fax machine, real estate professionals use DocuSign to execute agreements with buyers and sellers electronically. With real estate forms signed in minutes, not days, DocuSign and docSTAR’s Broker Central will help real estate professionals achieve higher sales, increase client satisfaction and
maintain a competitive edge. Safe and secure, the DocuSign electronic signature process is also easy to use and legally compliant. For more information, visit www.docusign.com/brokercentral.
CoreLogic and Blueberry join forces on mortgage fraud prevention tool CoreLogic has announced the integration of its LoanSafe Fraud Manager Suite with Blueberry Systems’ RELAY loan production platform. LoanSafe Fraud Manager is now directly integrated into the RELAY workflow, so that acceptable loans continue through unimpeded while problematic loans are automatically directed to the appropriate user. As a result, RELAY users will now enjoy a higher mortgage fraud prevention rate with fewer resource requirements. “There are three facets to data integrity,” said Lloyd Booth, Blueberry Systems president. “Completeness, accuracy and truthfulness. Traditionally, LOS vendors have focused only on the first two. Even if the data entered is complete and remains intact, garbage in is still garbage out. Loan data still needs to be authenticated at some point, especially as today’s lenders are struggling to regain the trust of investors. Our integration with LoanSafe Fraud Manager addresses the truthfulness of loan data, and will help lenders regain that trust.” “Blueberry Systems has made a major step toward moving fraud prevention to the front of the loan production process,” said Tim Grace, senior vice president, fraud analytics for CoreLogic. “Integrating LoanSafe Fraud Manager into the mortgage workflow enables lenders to comply with Fannie Mae, Freddie Mac, and other mortgage investors’ requirements while significantly reducing the need for human interaction. This integration makes mortgage loan processing faster,
cheaper, and optimally efficient.” In contrast to most systems that present an outdated ‘database of record,’ RELAY employs a universal data model, using its proprietary Conductor technology, to integrate various systems and applications into a single workflow, eliminating data silos and the need for duplicate or staggered data entry. And while most systems only make the most recent loan data available at any given time, RELAY’s universal data model makes available the various states of data as the loan evolves, in real time, and highlights discrepancies. The bottom line is much higher data quality that prevents costly pricing variances and buybacks. For more information, visit www.blueberrysystems.com or www.corelogic.com.
DataVerify products seek to eliminate short sale and overvaluation fraud DataVerify has enhanced its fraud management platform, DRIVE (Data Risk Intelligent Verification Engine) to help mortgage lenders identify and avoid potential short sale and property flipping losses. As the housing industry continues to struggle, short sales have become more commonplace. A homeowner sells his property for less than the outstanding balance on the mortgage, to avoid foreclosure and to permit the lender to receive some return on the investment. At the same time, property flipping cases have also been accelerating, primarily as a result of depreciating property values. “Our customers tell us these new tools are working and the reason why they work is because we apply what we learn from our customers’ own experiences,” said Steve Halper, president of DataVerify. DataVerify has incorporated a national building permit dataset into DRIVE. Currently containing 88 million permits on properties in more than 4,000 cities in the U.S., this data will allow lenders to greatly reduce the amount of time and resources spent manually calling individual building departments to request permit data on a specific property. “The new short sale and property flipping fraud detection capabilities from DataVerify meet and exceed all stated industry needs today,” said Halper. For more information, visit www.dataverify.com.
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: firstname.lastname@example.org
Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.
At United Northern, we give you the freedom to originate and succeed with our winning team. About working with United Northern Mortgage Bankers • Ongoing training and consultation with top industry executives • An in-house team to monitor SAFE Act compliance • Access to in-house marketing services
• In-house underwriting
• Pricing support desk to ensure maximum profitability on each • Most loans underwritten in 24 to 48 hours loan, while maintaining a competitive advantage over the street • Multiple valuation tools to research value • Proven leading-edge technology (built on Encompass 360 • In-house valuation desk to help ensure accurate technology) values and responsive turnaround time • Virtual office support • Multiple established warehouse lines • Licensing and regulatory compliance services
Limited room available for established Team Leaders and Licensed Mortgage Originators. Become part of an established 30-year Mortgage Banker with a proven track record and success.
Learn about the great opportunities available by making an appointment with United Northern Mortgage Bankers Executive Vice President Julio de Cardenas by calling 888-600-8808, ext. 1 or by e-mailing email@example.com.
United Northern Mortgage Bankers, Ltd. Corporate NMLS ID# 7230 New York State Banking Dept. - Licensed Mortgage Banker – License #100724 New Jersey Dept. of Banking and Insurance – Mortgage Lender – License #L0046623 Pennsylvania Dept. of Banking – Mortgage Lender – License #20887 Connecticut Dept. of Banking - Mortgage Lender - License #20372 Massachusetts Div. of Banks and Loan Agencies - Mortgage Lender & Mortgage Broker – License #MC5070 North Carolina Commissioner of Banks – Mortgage Lender – License #L140365 South Carolina State Board of Financial Institutions – Supervised Lender – License #S7,461 Florida Dept. of Financial Institutions - Mortgage Lender - License #ML0700679 Senior Security Home Advantage is a lending area of United Northern Mortgage Bankers, Ltd. Direct FHA Endorsed Lender
Appraisal Management Company
Coester Appraisal Group 7650 Standish Place, Suite 107 • Rockville, MD 20855 www.coesterappraisals.com (888) 485-1999 Ext. 2 We are a premier National Appraisal Company since 1970. We have a complete product line for your entire organization. We guarantee HVCC and FHA regulatory compliance. Let our experience work for you. The way valuations should be.
Guaranteed Home Mortgage Company, Inc. 108 Corporate Park Drive, Ste 301 White Plains, NY 10604 888-329-GHMC • www.joinguaranteed.com
Cruise4Two-Loan Incentives 1-866-541-8077 www.Cruise4Two.com
Find out what Guaranteed can do for you. Branch Program for Professionals. It's what we do.
Increase your Loans,Get the Edge & Generate More Referrals! Offer your clients a 5 Day 4 Night Cruise certificate for Two to Mexico, the Bahamas or the Western Caribbean (up to a $1798.00 value) only when they close a loan with you. Only $159.00 per certificate!!
Compliance Consultants StreetLinks National Appraisal Services (800) 778-4788 www.StreetLinks.com firstname.lastname@example.org There’s only one avenue to guaranteed appraisal performance! With a commitment to doing business the RIGHT way, StreetLinks is bringing real value as a PARTNER, not a vendor.
• We attract and retain the best appraisers – Our appraisers set their own fees and our peer-to-peer approach attracts appraisers that simply won’t work for other AMCs • IQ Select™ proprietary order assignment methodology assigns based on proximity, service and quality – not lowest fee! • 100% Manual Quality Control – every report is manually pre-underwritten by a USPAP certified appraisal underwriter • Certified compliance with appraiser independence requirements AND INTRODUCING SCORe™ - a revolutionary approach to appraisal validation. Credible 2nd opinions on comp selection from licensed, local appraisers. Stop Guessing. Start Knowing!
Inlanta Mortgage W229 N1433 Westwood Drive, Suite 103 Waukesha, WI 53186 www.inlanta.com • 262-513-9853 Established in 1993 and headquartered in Waukesha, Wisconsin, Inlanta Mortgage is a multi-state mortgage banking company committed to delivering superior service to our branch clients. For more information, call 262-513-9853 or visit www.inlanta.com.
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.
iServe Residential Lending www.iservelending.com email@example.com 415-298-2500 iServe offers a complete product mix - aggressively priced, with hassle-free service & turntimes. Branching & Loan Officer opportunities available nationwide. For a change, focus on production, quick closes & a good night's sleep!
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United Northern Mortgage Bankers......888-600-8808
Limited room available for established Team Leaders and Licensed Mortgage Originators. Become part of an established 30-year Mortgage Banker with a proven track record and success.
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.
Brokers United ........................................877-710-0948 Consulting & Branch opportunities. Exclusive opportunities with a top Federally Chartered Bank, Mortgage Banker and/or Mortgage Banker/Broker Platform. Email Jeff Flees at firstname.lastname@example.org.
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Freedom Mortgage Corporation www.fmbranch.com email@example.com 800.220.9498
Currently working with various bankers & federally chartered banks. Seeking established, new branches & Loan Officers Nationally. We are a top recruiting firm handling all types of mtg positions.
WorkCenter CRM ....................................877.498.6888 A CRM & contact management solution designed for mortgage professionals. Automated campaigns & LOS synchronization make WorkCenter an intuitive timesaver for staying in touch with clients.
Freedom Mortgage Corporation, The BEST Branch Solution, Period.
GSF Mortgage 15430 W Capitol Dr. Brookfield, WI 53005 1-877-494-4448 www.gsfprobranch.com Be in business for yourself, but not by yourself. Join GSF Mortgage's Professional Branch Network. Enjoy freedom and stability and reap the rewards. Signing bonus for Branch Managers, retain 100% of your commissions. Absolutely NO files fees, NO splits
CONCORD CHURCH FINANCE NATIONWIDE FINANCING FOR CHURCHES ONLINE Pre-qualify@ConcordAcceptanceCorp.com 800-926-0399 • Fax: 858-756-8108 • Church Purchase & Construction • $100,000 to $2,500,00 • Church Refinance & Cash Out • Churches all 50 states • 75% of Appraised Value • 20 Yr. Fixed Rate
Abacus Mortgage Training and Education PO Box 780 Summerfield, NC 27358 888-341-7767 • www.GetYourEd.com NMLS approved 20 hour Prelicensing Education NMLS approved Continuing Education Live Classroom Instruction, Web Delivery and Private Events The SAFE-Smart ExamCram, Powerfully Innovative Test Prep
MSS Learning Center (800) 963-1900 www.MortgageSuccessSource.com Email: info@MortgageSuccessSource.com Time is running out...are you ready?
Mortgage Banking Systems - ProClose 1360 Beverly Rd. Ste 200, McLean, VA 22101 800-783-2283 · firstname.lastname@example.org www.ProClose.com ProClose provides compliant closing documents and software for Residential Mortgage Lending. Created with closers in mind, we help make a lender’s staff more efficient and supported.
NYC Real Estate Expo LLC Anthony Kazazis - Director email@example.com • www.nycrealestateexpo.com
646.210.2545 • 914.763.8008 “The Expo for Real Estate Professionals" For ongoing Networking Events throughout the year please visit www.nycnetworkgroup.com.
Pass the S.A.F.E. Act Test, meet your 20 hours of Pre-licensure, and complete the 8 hours of Continuing Education you need • The Ultimate Test Prep Kit and Test Prep Boot Camps – Cover everything to pass the S.A.F.E. Act Test — on your first try. • 20-hour Pre-licensure - Packed with everything to successfully complete your pre-licensure requirements. • Continuing Education - Exciting, NMLS approved courses that meet your Continuing Education needs and build your business.
Robertson | Anschutz 800-343-7160 firstname.lastname@example.org www.radocs.com/info.html
Hard Money/Private Lending
Mortgage Loan Closing Document Preparation & Compliance Services Fulfillment Services Including Pre-Funding Review & Post-Closing Interfaces with Leading Loan Origination Software Systems Foreclosure – Loss Mitigation Services
ACC Mortgage, Inc. 932 Hungerford Drive #6 • Rockville, MD 20850 240-314-0399 • 240-314-0336 fax WeApproveLoans.com
Direct Mail Best Rate Referrals ............................................800-811-1402
Document Preparation (SaaS)
We are doing traditional subprime lending, fix & flip lending and hard money lending.
Mortgage marketing company with decades of combined experience providing quality leads, mailers, lists and dialer products. www.bestratereferrals.com & www.mortgageleads.org
Windvest Corporation ............................877-285-0777
Your Complete Mortgage Marketing Solution. Call Us Today! (800) 922-9860 www.envisiondirect.net/catalog/mortgage.htm
Mortgage Loan Closing Document Preparation & Compliance Software Loan Documents and Compliance – Web-based/SaaS – Easy to Use Intuitive – Secure and Reliable – Integrates with Leading LOS Free Setup and Support – Extensive Compliance Audits
Education Doc Management
Errors and Omissions Insurance CB Malaga Insurance Services LLC ......877-245-5887 Insurance broker providing errors & omissions (E&O) insurance to mortgage brokers and bankers. All loan types. Available in 22 states. www.CBspecialty.com
Advanced Data is a leading national provider of data services, streamlining income and employment verification with proprietary software. Clients can submit 4506-T directly through Encompass360. Also ask about our AVM and flood services!
Platinum Credit Services, Inc.................631-299-2084 Tax return vertification (4506 tax transcript done in less than 24 hours in most cases). Call Lorenzo Pugliano, President and CEO at 631-299-2084.
Bookmark this! Access these listings online at nmpmag.com/directory_list
DocVelocity is an end-to-end paperless solution designed to simplify the loan origination experience. Imagine having all your documents in the loan process as electronic files, all online, from preapproval to closing. DocVelocity provides: Fast and easy loan delivery to any lender … Automatic doc sorting, naming and filing … Real-time online document sharing for anyone you choose … Friendly and intuitive user interface … No start-up fees, and free training and support. DocVelocity addresses important compliance issues while giving your office the competitive advantage of being paperless. It streamlines all aspects of the mortgage process and most important, it does so in one easy-to-use and inexpensive package. Its newest version, DocVelocity 2.5, adds over 50 new features and enhancements to make the best paperless office even better. DocVelocity is the flagship product of Paperless Office Solutions, Inc., a wholly owned subsidiary of Flagstar Bancorp. Visit www.docvelocity.com to find out more.
North Lake College - Specialized Education In Mortgage Banking. Earn An Associates Degree in Mortgage Banking From the First Fully Accredited Mortgage Banking Degree Program in the U.S. For Information About Our 30 Year Program email:email@example.com.
Advanced Data (800) 537 - 0458 www.advanceddata.com firstname.lastname@example.org
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DocVelocity www.docvelocity.com (877) 362-8356 email@example.com
North Lake College 5001 North MacArthur Blvd, Room T-231-C Irving, TX 75038 (972) 273-3467 • http://www.northlakecollege.edu/
Income Verification Services
• Specializing in Official Snap Packs for Greater Open Rates • Envelope Mailers, Business Reply, Postcards and Much More • Targeted Mortgage Lists with Many Selects • Complete Design, Printing and Mailing Services
Docs on Demand 800-343-7160 firstname.lastname@example.org www.docsondemand.info
Specializing in rehab loans for property investors in So. CA. Up to 60% ARV, 12.99% fixed rate, 3.5-5 points, 1 yr. term. Fast & professional service since '94! Visit windvestcorp.com!
Loan Management Systems
Xetus ....................................................877-GO-XETUS XetusOne is a powerful, easy-to-use loan management system that streamlines loan processing. Our affordable SaaS applications are lenders #1 choice for origination, subordination & modification.
Sign up with the Premier Jumbo Lender www.ingloans.com 877.464.0555, option 2 Move your Jumbos to a better neighborhood. ING Mortgage is your home for Portfolio loans up to $3,000,000. We offer aggressive pricing and simple guidelines in all 50 states. Big Loans. Low Rates. Great Value.
Leads AAA Refi Leads.....AAA Refi Leads.....AAA Refi Leads Learn how I went from failure to success by mailing cheap refi letters from home, closed 71 loans & made $248,954.62 last yr. I’ll show you exactly how I did it. Go to: www.Refi-Leads.NET
Internet’s Leading Consumer Mortgage Marketplace Attracting over 7 million unique consumers every month www.Bankrate.com • 561-630-1257 Reach affluent and creditworthy consumers who are in-market and ready to transact. Bankrate is a consumer direct Web site, NOT a lead aggregator. Qualified leads for every sized budget, and pay only for performance. No set up fees! No contracts! No risk!
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
• Reach self directed, highly qualified consumers that are actively searching for mortgage loans • Geo-targeting – reach the right consumers in the right markets • Our proprietary Advertiser Portal gives you complete control over your campaigns, budgets, and performance reports. • YOU determine your daily/weekly/monthly budget • Pay only for consumers who click on your listing • NO cancellation fees
Loan Origination Systems
Calyx Software 800-362-2599 email@example.com www.calyxsoftware.com Calyx Software, the #1 provider of mortgage solutions is dedicated to offering reliable and affordable software that streamlines, integrates and optimizes the loan process. Find out how PointCentral can streamline your business and create compliant processes today.
Mortgage Builder Software 24370 Northwestern Highway, Suite 200 Southfield, MI 48075 800-460-5040 • www.mortgagebuilder.com End-to-end LOS system for multi-channel lending. PreQual thru Interim Servicing. Includes all back-office functionality; Underwriting,Secondary Marketing,Post Closing and much more SaaS, ASP and Client Server delivery options.
www.mortgageloan.com • 877-390-4750 MortgageLoan.com is the largest online directory for mortgage professionals and a favorite of consumers shopping for mortgage loans. Our network attract over one million visitors per month. Our paid lead program as well as our free lender directory will help you connect with targeted new consumer traffic from with high-intent consumers searching online for the right mortgage lender.
Are you a broker/owner or current branch manager looking to expand your business into Mortgage Banking with FHA capabilities? Then our PARTNER BRANCH ADVANTAGE© program is perfect for you. We are offering you all the benefits of partnering with an established lender while still enjoying your independence. Mortgage Concepts is a nationwide FHA Direct Lender with a 16 year long reputation of excellence. YOUR SUCCESS IS OUR SUCCESS! For more information contact THOMAS R. SIRICO, Vice President of Business Development at (917) 923-1472 or email at firstname.lastname@example.org. We look forward to sharing our services with you!
Secondary Marketing Consulting Broker to Banker Services.com ..........(951) 746-3075 We complete your applications for approval Save the time and hassle contact: brokertobankerservices.com
Try us risk-free! Call 561-630-1257 or visit www.bankrate.com/cpcprogram/ for more details.
(800) LOANS-15 www.mortgageconcepts.com
Comergence Compliance Monitoring, LLC 630 The City Drive South, Suite 205 • Orange, CA 92868 Office: 714-740-9000 www.ComergenceCompliance.com Comergence Compliance Monitoring is the mortgage industry’s only Complete broker desk management software and outsource solution for TPO management and monitoring. We can supplement lenders inhouse management and monitoring resources departments.
Intracoastal Abstract Co. Inc.................516-358-0505 Privately owned & operated full service title insurance agency in NY, NJ and FL, with affiliates throughout the US & Canada. Escrow Agent in Florida. www.intracoastalabstract.com.
Wholesale/Correspondent BankFinancial ..........................................800-894-6900 We have money to lend for apartments, $250M to $2MM, up to 75% LTV. We offer competitive rates, fees & terms. We’re committed to helping you and your clients close the deal. Call us.
If your ad was here, you would be seen by 191,181 Mortgage Professionals looking for resources to help them in their business. Cruise4Two-Loan Incentives 1-866-541-8077 www.Cruise4Two.com Increase your Loans,Get the Edge & Generate More Referrals! Offer your clients a 5 Day 4 Night Cruise certificate for Two to Mexico, the Bahamas or the Western Caribbean (up to a $1798.00 value) only when they close a loan with you. Only $159.00 per certificate!!
The Resource Registry is a directory of lenders (wholesaler or retail that are recruiting), affiliated services and resources that is seen by more than 191,181 active Professionals.
Call 888-409-9770 ext 4. to register your company.
Wholesale Reverse Mortgages
NATIONWIDE Equities Flagstar Wholesale Lending www.wholesale.flagstar.com (866) 945-9872 WLSC@flagstar.com Flagstar Wholesale Lending, a division of Flagstar Bank, is one of the nation’s largest wholesale and correspondent mortgage lenders, providing the technology, products, service and support that independent mortgage brokers, correspondents, and bankers need in today’s mortgage arena. In the ever-changing environment of mortgage banking, Flagstar takes pride in accommodating the specific needs of each customer. At Flagstar, we understand that you need every available advantage to stay ahead of the competition. This is why we provide multiple technology options to meet your needs to register, lock, underwrite, close, fund and deliver your loans. Our wholesale website (wholesale.flagstar.com) and the loan processing tool Loantrac provides our customers with the functionality that make it easier and faster to close loans, saving you time and money! Visit wholesale.flagstar.com to learn more.
Call 888-409-9770 ext 4. to register your company.
Terrace Mortgage 4010 W. Boyscout Blvd., Suite 550 Tampa, FL 33607 866-934-4631 • www.terracemortgage.com We offer competitive pricing and fast turn-times for FHA, VA, Conventional, and USDA programs without having a retail presence in the industry. We are a wholesale lender with 22 years of experience and believe in exceptional service.
Nationwide Equities Corporation 201-529-1401 www.nwecorp.com For Licensed Mortgage Brokers in NY, NJ, CT, PA and FL No HUD Approval Required – Live Help Desk Will Provide Training at Our Office or Yours 48 Hour Underwriting - Get Paid Within 48 Hours of Funding
Lykken on Lending is a weekly 60-minute show hosted by mortgage veteran of 37 yrs, David Lykken, along with special guest Alice Alvey & Joe Farr as well as featured special guests. Each week we provide our listeners with up-to-the-minute information of what is happening in mortgage and housing industry.
Sign-on weekly at nmpmag.com/lykkenonlending 51
Join the 2010 NAMB/WEST Conference December 4-6, 2010 at the MGM Grand Las Vegas!
Visit www.NAMBWEST.com for updates. Exhibitors will receive a complimentary ad in the December issue of the National Mortgage Professional
For more details on Exhibiting and Sponsorship, please contact Kinsley at 303-798-3664 or email@example.com
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
REGISTER NOW ON THE WEB SITE www.NAMBWEST.com
Exhibitors and Sponsors
Abacus Mortgage Training and Education .......... www.getyoured.com ....................................19 & 39 ACC Mortgage .................................................. www.weapproveloans.com ....................................30 ACT Appraisal .................................................. www.actappraisal.com ........................................20 American Toner & Ink ...................................... firstname.lastname@example.org ..........5 Bank of Internet USA........................................ www.bankofinternet.com ....................................32
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 email@example.com.
BankFinancial.................................................. www.broker.bofi.com ..........................................36 Best Rate Referrals, LLC .................................... www.bestratereferrals.com ..................................32
Caliber Funding ............................................................................................................................20
Saturday-Monday, December 4-6
Sunday-Wednesday, April 3-6
CallFurst Conferencing...................................... www.callfurst.com ..............................................44
NAMB/WEST 2010 MGM Grand Las Vegas 3799 Las Vegas Boulevard South Las Vegas For more information, call (703) 342-5900 or visit www.namb.org.
2011 National Association of Mortgage Brokers 2011 Legislative & Regulatory Conference Hyatt Regency Washington on Capitol Hill 400 New Jersey Avenue NW Washington, D.C. For more information, call (703) 342-5900 or visit www.namb.org.
Calyx Software ................................................ www.calyxsoftware.com ................................10 & 32 CB Malaga Insurance Services LLC ...................... www.cbspecialty.com ..........................................33 CMG Mortgage, Inc. .......................................... www.homeownershipaccelerator.com ....................21 Comergence Compliance Monitoring, LLC .......... www.comergencetrustedmember.com ..........17 & 42 Crednology Inc................................................. www.crednology.com ..........................................36 Envision Direct ................................................ www.envisiondirect.net/catalog/mortgage.htm ......15
First California Mortgage Company .................... www.firstcaldictionary.com ..................................32
Sunday-Wednesday, February 6-9
Flagstar Wholesale Lending .............................. www.wholesale.flagstar.com ....................Back Cover Franklin American Mortgage ............................ www.franklinamerican.com ..................................23 Freedom Mortgage .......................................... www.fmbranch.com ......................Inside Back Cover Frost Mortgage Lending Group .......................... www.frostmortgage.com/nmp ................................6 Gateway Mortgage Group, LLC .......................... www.gatewayloan.com ........................................32 GSF Mortgage Corporation ................................ www.gsfprobranch.com ................Inside Front Cover Guaranteed Home Mortgage.............................. www.joinguaranteed.com ....................................13
Tuesday-Friday, February 22-25
Sunday-Wednesday, May 1-4
I.C.E. Inc./Infinite Creative Enterprises, Inc......... www.icesigns.com ................................................24
Mortgage Bankers Association National Mortgage Servicing Conference & Expo Gaylord Texan Hotel & Convention Center 1501 Gaylord Trail Grapevine, Texas For more information, call (800) 793-6222 or visit www.mortgagebankers.org.
Mortgage Bankers Association’s Loan Production Conference The New York Marriott Marquis 1535 Broadway • New York, N.Y. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.
iServe Residential Lending, LLC ........................ www.iservecompanies.com ....................................4 Kinecta Federal Credit Union ............................ www.loankinection.org ........................................23 Lender411, Inc................................................. www.lender411.com/register ................................21 MBSauthority.com............................................ www.mbsauthority.com ........................................21
Mortgage Concepts .......................................... www.mortgageconcepts.com ................................12
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
Mortgage Bankers Association’s National Secondary Market Conference & Expo The New York Marriott Marquis 1535 Broadway • New York, N.Y. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.
GSF Funding .................................................... www.gsfsales.com ................................................41
Inlanta Mortgage.............................................. www.inlantapartners.com ....................................15
Mortgage Investors Corporation ........................ firstname.lastname@example.org ..................................10 NAMB/WEST .................................................... www.nambwest.com ....................................40 & 51 NAPMW .......................................................... www.napmw.org ..................................................31 Nationwide Equities Corp. ................................ www.nwecorp.com ..............................................11 NetMore America Wholesale.............................. www.netmoreamerica.com ..................................16 Oxley & Goldburn Insurance, Inc. ...................... www.oxley-goldburn.com ....................................24 PB Financial Group Corp. .................................. pbfinancialgrp.com ................................................7 ProClose.......................................................... www.proclose.com ................................................7
Sunday-Wednesday, May 15-18 MARCH 2011
Wednesday-Thursday, March 23-24 Mortgage Bankers Association’s National Policy Conference Hyatt Regency Washington on Capitol Hill 400 New Jersey Avenue NW Washington, D.C. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.
Quality Mortgage Services ................................ www.qcmortgage.com ....................................7 & 25 REMN (Real Estate Mortgage Network)................ www.remnwholesale.com ....................................45 Ridgewood Savings Bank .................................. www.ridgewoodbank.com ......................................8 Sierra Pacific Mortgage .................................... www.sierrapacificmortgage.com ............................23 StreetLinks National Appraisal Services .............. www.streetlinks.com/SCORe ....................................9 Terrace Mortgage Company .............................. www.terracemortgage.com ..................................43 United Northern Mortgage Bankers Ltd. ............ www.unitednorthern.jobs ............................ 33 & 47 USA Cares ........................................................ www.usacares.org ................................................24 Windvest Corporation ...................................... www.windvestcorp.com ........................................46
Sunday-Wednesday, March 27-30 Mortgage Bankers Association’s National Technology in Mortgage Banking Conference & Expo The Westin Diplomat Resort & Spa 3555 South Ocean Drive Ft. Lauderdale, Fla. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.
Xetus Mortgage Corporation.............................. www.xetus.com ....................................................6
Sunday-Wednesday, March 27-30
Sunday-Wednesday, May 15-18 Mortgage Bankers Association’s Legal Issues/Regulatory Compliance Conference Boca Raton Resort 501 El Camino Real • Boca Raton, Fla. For more information, call (800) 793-6222 or visit www.mortgagebankers.org. OCTOBER 2011
Sunday-Wednesday, October 9-12 Mortgage Bankers Association’s 98th Annual Convention & Expo The Hyatt Regency 151 East Wacker Drive • Chicago, Ill. MO
Mortgage Bankers Association’s National Fraud Issues Conference The Westin Diplomat Resort & Spa 3555 South Ocean Drive Ft. Lauderdale, Fla. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.
Mortgage Bankers Association’s Commercial/Multifamily Servicing & Technology Conference Chicago Marriott Downtown Magnificent Mile 540 North Michigan Avenue Chicago, Ill. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.
Sunday-Wednesday, May 1-4
Mortgage Bankers Association’s Commercial Real Estate Finance/Multifamily Housing Convention & Expo 2011 Manchester Grand Hyatt San Diego One Market Place San Diego, Calif. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.
NAMB/WEST, 40 Under 40, MBA Convention, Growth Strategies