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National Mortgage Professional Magazine






January 2011




Volume 3, Number 1





ACC Mortgage .................................................. ....................................8 Accurate Quality Control .................................. ............................................7

Special Focus on “Managing and Selling REOs”

BankFinancial.................................................. ........................................8 Bay Equity LLC ................................................ ..................................................38 CallFurst Conferencing...................................... ..............................................36

FHA Insider: REO Investors … An FHA Referral Source You Must Have in Today’s Market By Jeff Mifsud

Remembering the REO Basics By David Shelton

Calyx Software ................................................ ......................................31


Comergence Compliance Monitoring, LLC .......... ..................4 & 39 Elliott and Company Appraisers, Inc................... ................................20 Envision Direct ................................................ ......32


Flagstar Wholesale Lending .............................. ....................Back Cover Freedom Mortgage .......................................... ......................Inside Back Cover

Structuring Effectively for REO Disposition By Derrick Logan

The Need for Transparency Has Never Been Greater By Damien Chiodo


Frost Mortgage Lending Group .......................... ................................4 GSF Mortgage Corporation ................................ ........................................35 Guaranteed Home Mortgage.............................. ......................................9


HVCC Appraisal Ordering .................................. ..........................19 MBA-NJ/NJAMB ................................................ ..................................................34 .................................... ..................................23


Mortgage Concepts .......................................... ................................11 Mortgage Insurance Agency .............................. ................................................31

The New Solution By Bruce Norris

Lykken on Leadership By David Lykken


Mortgage Planner CRM/ MPC ............................ ............................27 Mortgage Services III, LLC.................................. ................................................27 Nationwide Equities Corp. ................................ ..............................................37



NMLF, Inc. ...................................................... ......................................................21 PB Financial Group Corp. .................................. ..............................................21

The Challenges of International Real Estate Appraisals

Radian Guaranty .............................................. ..................................................27

By Charlie W. Elliott Jr., MAI, SRA, ASA


11 Ideas to Ignite Your 2011


By Dave Hershman

The “Fatal Flaw” in HAMP By Steven Gillan

Regulatory Compliance Outlook: January 2011 … New Risk-Based Pricing Rules By Jonathan Foxx

By Atare E. Agbamu

Terrace Mortgage Company .............................. ..................................10 United Northern Mortgage Bankers Ltd. ............ .............................. 6 & 13 Windvest Corporation ...................................... ........................................15

18 21



Forward on Reverse: FIT for Reverse Mortgage Lenders (Part V) … Holes in the Safety Net

StreetLinks National Appraisal Services .............. ..........Inside Front Cover 

The Secondary Market Overview: From Bonds to Production … Why Did They Go Up?

REMN (Real Estate Mortgage Network)................ ......................................5


Columns NMP News Flash: January 2011

4 18

New to Market


NMP Mortgage Professional Resource Directory


NMP Calendar of Events




Heard on the Street

January 2011 Volume 3 • Number 1



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

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


Jon Blake Advertising Coordinator (516) 409-5555, ext. 301

A Message From NMP Media Corp. Executive Vice President Andrew T. Berman 2011: The Year of Leadership According to Chinese Zodiac, 2011 is the Year of the Rabbit. However, we at National Mortgage Professional Magazine have dubbed 2011, “The Year of Leadership.” This year, you will see the pages of National Mortgage Professional Magazine focusing on the new leadership of the mortgage industry, as well as provide guidance and insights for the future leaders. Sure, we still will provide tactical guidance on specific topics such as valuations and appraisals (like Charlie W. Elliott’s “The Challenges of International Real Estate Appraisals on page 14), to secondary market (like Dave Hershman’s “Why Did They Go Up? on page 18), default management (like Steven Gillan’s piece, “The ‘Fatal Flaw’ in HAMP on page 21), rules and regulations (like Jonathan Foxx’s Regulatory Compliance Outlook on page 22 focusing on “New Risk-Based Pricing Rules”) and more. But the overall theme of National Mortgage Professional Magazine will be focusing on the newly-crowned leaders of the mortgage industry. However, you will see more of the articles like David Lykken’s new column, “Lykken on Leadership” on page 12. David talks about the need for leaders to step up and grab the bull by the horns and start leading!

Managing and selling REOs The pages of National Mortgage Professional Magazine covers everything from origination to settlement to the servicing sector of the industry. However, we received an overflowing handful of requests to dedicate an issue on managing and selling real estate-owned (REO) and in this issue, we deliver. Part of this was obviously from the readers who are working at servicers; however, there was also a large number of our production-focused readers who also want to learn more about REOs. For production-focused readers, Jeff Mifsud’s “REO Investors ... An FHA Referral Source You Must Have in Today’s Market” is a must-read on page 28. For a “back to the basics look at servicing, be sure to turn to page 29 for David Shelton’s “Remembering the REO Basics.” Derrick Logan shares with us some insights on property preservation and asset management on page 30 with his article, “Structuring Effectively for REO Disposition.” Our REO section is wrapped up by a great commentary from Damien Chiodo on page 31 and his piece, “The Need for Transparency Has Never Been Greater.”

11 ideas to ignite your 2011 Our first issue of 2011 also brings you the special two-page spread on pages 16-17, “11 Ideas to Ignite Your 2011.” Here, you will find some quick tips on how to ensure that 2011 will be one of your best years in the mortgage biz. Until next month …

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

SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail or visit Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600. Statements, 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. MO






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



ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact Senior National Account Executive Karen Krizman at (516) 409-5555, ext. 326 or e-mail




National Mortgage Professional Magazine is published monthly by NMP Media Corp. Copyright © 2011 NMP Media Corp.

Andrew T. Berman, Executive Vice President NMP Media Corp.

The National Association of Mortgage Brokers

National Association of Professional Mortgage Women

11325 Random Hills Road, Suite 360 Fairfax, VA 22030 Phone #: (703) 342-5900  Fax #: (703) 342-5905

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

NAMB Board of Directors Officers President—Michael D’Alonzo, CMC Creative Mortgage Group 1126 Horsham Road, Suite D Maple Glen, PA 19002 (215) 657-9600 Vice President—Donald J. Frommeyer, CRMS Amtrust Mortgage Funding Inc. 200 Medical Drive, Suite D Carmel, IN 46032 (317) 575-4355 Secretary—Virginia Ferguson, CMC Heritage Valley Mortgage Inc. 5700 Stoneridge Mall Road, Suite 225 Pleasanton, CA 94588 (925) 469-0100 Treasurer—John Councilman, CMC,CRMS AMC Mortgage Corporation 2613 Fallston Road Fallston, MD 21047 (410) 557-6400 Immediate Past President—Jim Pair, CMC Mortgage Associates Corpus Christi 6262 Weber Road, Suite 208 Corpus Christi, TX 78413 (361) 853-9987

Directors Michael Anderson, CRMS Essential Mortgage 3029 S. Sherwood Forest Boulevard, Suite 200 Baton Rouge, LA 70816 (225) 297-7704

Olga Kucerak, CRMS Crown Lending 222 East Houston, Suite 1600 San Antonio, TX 78205 (210) 828-3384 Walter Scott Excalibur Financial Inc. 175 Strafford Avenue, Suite 1 Wayne, PA 19087 (215) 669-3273

Vice President—Central Region Lisa Puckett (405) 741-5485

President-Elect Laurie Abshier, GML, CMI (661) 283-1262 E-Mail:

Vice President—Eastern Region Christine Pollard (646) 584-8332

Senior Vice President Candace Smith, CMI, CME (512) 329-9040

Secretary Murielle Barnes, CME (806) 373-6641

Vice President—Northwestern Region Jill M. Kinsman (206) 344-7827

Treasurer Hulene Bridgman-Works (972) 494-2788

Vice President—Western Region Tim Courtney (760) 792-5620

Parliamentarian Dawn Adams, GML, CMI (607) 737-2584

National Credit Reporting Association Inc. 125 East Lake Street, Suite 200  Bloomingdale, IL 60108 Phone #: (630) 539-1525  Fax #: (630) 539-1526 Web site:


2011 Board of Directors & Staff Tom Conwell President (248) 473-7400 Donald J. Unger Vice President (303) 670-7993, ext. 222 Daphne Large Treasurer (901) 259-5105 Marty Flynn Ex-Officio (925) 831-3520, ext. 224 William Bower Director—Tenant Screening Chair (800) 288-4757 Mike Brown Director—Technology Chair (800) 285-6691

Janet Curtis Director—New Membership & Elections Co-Chair (212) 224-6121 Renee Erickson Director—Tenant Screening Co-Chair (800) 311-1585, ext. 2101 Nancy Fedich Director—Conference Chair (908) 813-8555, ext. 3010 Judy Ryan Director—New Membership & Elections Chair (800) 929-3400, ext. 201 Tom Swider Director—Legislative Co-Chair (856) 787-9005, ext. 1201 Terry Clemans Executive Director (630) 539-1525


Susan Cataldo DirectorEducation & Compliance Chair Jan Gerber (404) 303-8656, ext. 204 Office Manager/Membership Services (630) 539-1525


Deb Killian, CRMS Charter Oak Lending Group LLC 3 Corporate Drive, P.O. Box 3196 Danbury, CT 06813-3196 (203) 778-9999, ext. 103

President Gary Tumbiolo, CMI (919) 452-1529 

Donald Fader, CRMS SMC Home Finance P.O. Box 1376 Kinston, NC 28503-1376 (252) 523-5800

National Board of Directors

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Zillow Study Finds Homes Set to Lose $1.7 Trillion in Value During 2010

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U.S. homes are expected to lose more than $1.7 trillion in value during 2010, which is 63 percent more than the $1 trillion lost in 2009, according to analysis of recent Zillow Real Estate Market Reports. That brings the total value lost since the market peaked in June 2006 to $9 trillion. By comparison, from 2001 to the end of September 2010, the war in Iraq has cost $750.8 billion, according to a September report by the Congressional Research Service. The bulk of the total value lost during 2010 was in the second half of the year. From January to June, the housing market lost $680 billion. From June to December, Zillow projects residential home value losses will top $1 trillion. Less than one-fourth (31) of the 129 markets tracked by Zillow showed gains in total home values during 2010. Among those were the Boston metropolitan statistical area (MSA), which gained $10.8 billion in value, and the San Diego MSA, which gained $10.2 billion. “Despite a strong start to 2010, by the end of the year homes lost more of their value in 2010 than they did in 2009,” said Zillow Chief Economist Dr. Stan Humphries. “Government interventions like the homebuyer tax credit helped buoy the market during the second half of 2009 and the first half of 2010, but we saw a renewed downturn in the last half of this year. It’s a testament to the nearly irresistible force of the overall market correction that government incentives can only temporarily hold back the tide, and that the market will ultimately find its natural equilibrium of supply and demand. Unfortunately, with foreclosures near an all-time high in late 2010 and high rates of negative equity persisting, it does not appear that the first part of 2011 will bring much relief.” Declines in home values have led to increases in the percentage of homeowners in negative equity. At the end of 2009, 21.8 percent of single-family homeowners with mortgages were in negative equity, meaning they owed

more on their mortgage than their home was worth. In the third quarter of 2010—the last time Zillow calculated negative equity—23.2 percent were underwater. For more information, visit

NRMLA Announces New Certified Reverse Mortgage Professional (CRMP) Designation Consumers interested in exploring reverse mortgages can now turn to a loan originator who has committed to a new, high standard of training with the implementation of the Certified Reverse Mortgage Professional (CRMP) designation by the National Reverse Mortgage Lenders Association (NRMLA). After two years of preparation, NRMLA awarded CRMP designations to a first class of 13 members at its Annual Meeting & Expo on Nov. 3 in New Orleans. With the support of its board of directors and membership, NRMLA has invested more than $200,000 to create the program. “In our ongoing effort to assure America’s seniors that they can borrow with confidence from a NRMLA lender, we have made a significant investment of both human and financial resources, and created a rigorous program focused on solid experience, continued education and ethical training,” said Peter Bell, NRMLA president. Eligibility to apply for a CRMP designation requires that a loan originator have at least two years of experience and closed 50 reverse mortgages. Only then can they enter the process which includes 12 hours annually of continued education, participating in a threehour interactive ethics training seminar, a background check and sitting for an exam. The certification is valid for three years, but a designee must recertify every year and obtain 12 hours of continuing education credits annually over that period. The CRMP designation process was designed in collaboration with Professional Testing Inc. of Orlando, Fla., international experts on creating licensure and certification programs. The program is administered by an Independent Certification Committee comprised of NRMLA members that

oversee the establishment of criteria, eligibility, testing and recertification. In accepting their responsibility in governing this credentialing organization, committee members must understand that their fiduciary responsibility includes safeguarding the public’s trust through the administration of a credible credential and in exercising due diligence to uphold the integrity of the certification program. For more information, visit

Shadow Inventory Rises More Than 10 Percent in One Year According to CoreLogic Study Photo credit: Comstock



TransUnion: Mortgage Delinquencies Expected to Experience Double Digit Decreases Through 2011 TransUnion has released its annual forecasts on consumer credit, which indicate that national mortgage loan delinquencies (the ratio of borrowers 60 or more days past due) will drop nearly 20 percent by the end of 2011 to 4.98 percent from an expected 6.21 percent at the conclusion of 2010. The projected decrease in 60-day mortgage delinquencies, a statistic generally considered a precursor to foreclosure, would more than double the 9.87


percent yearly decline that is expected between the end of 2009 and 2010 (from 6.89 percent to 6.21 percent). This is a welcome contrast to the year-over-year increases of 54 percent between 2006 and 2007, 53 percent between 2007 and 2008 and 50 percent between 2008 and 2009. TransUnion is projecting doubledigit declines in mortgage delinquencies for every state and the District of Columbia through 2011. Interestingly, the states projected to experience the greatest decreases in mortgage delinquencies—Nevada (-24.77 percent), Arizona (-24.27 percent) and Florida (-23.90 percent)—are the same areas expected to continued on page 7



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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.


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CoreLogic, a provider of consumer, financial and property information and business services, has reported that shadow inventory of residential property as of August 2010, reached 2.1 million units, or eight months worth of supply, up from 1.9 million, or a five-months supply, from one year earlier. With visible inventory remaining flat at 4.2 million units, the change in shadow inventory increased the total supply of unsold inventory by three percent. CoreLogic estimates shadow inventory, sometimes called pending supply, by calculating the number of properties that are seriously delinquent (90 days or more), in foreclosure and real estateowned (REO) by lenders and that are not currently listed on multiple listing services (MLSs). Shadow inventory is typically not included in the official metrics of unsold inventory. According to CoreLogic, the visible supply of unsold inventory was 4.2 million units in August 2010, the same as the previous year. The visible inventory measures the unsold inventory of new and existing homes that were on the market. The visible months’ supply increased to 15 months in August, up from 11 months a year earlier due to the decline in sales during the last few months. The total visible and shadow inventory was 6.3 million units in August, up from 6.1 million a year ago. The total months’ supply of unsold homes was 23 months in August, up from 17 months a year ago. Although it can vary and it depends on the market and real estate cycle, typically a reading of six to seven months is considered normal so the current total months’ supply is roughly three times the normal rate. “The weak demand for housing is significantly increasing the risk of further price declines in the housing market,” said Mark Fleming, chief economist for CoreLogic. “This is being exacerbated by a significant and growing shadow inventory that is likely to persist for some time due to the highly extended time-toliquidation that servicers are currently experiencing.” In its analysis, CoreLogic also found

that the highest levels of distressed months’ supply, which is the ratio of the number of properties that are 90plus days or more delinquent to the number of sales, are in Florida, Michigan, and California. Although Phoenix and Las Vegas have high months’ supply of total housing inventory, they are not among the markets with the highest distressed months’ supply because of the increased number of distressed sales that have been occurring in those markets. The markets with the lowest distressed supply are all in Texas, which largely bypassed the housing boom and subsequent bust. For more information, visit

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

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• 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 technology) • In-house valuation desk to help ensure accurate values and responsive turnaround time • Virtual office support • Multiple established warehouse lines • Licensing and regulatory compliance services

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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

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

news flash

continued from page 5

have the highest 60-day mortgage delinquency rates at the end of next year (Florida—11.06 percent; Nevada— 10.87 percent; Arizona—7.59 percent). North Dakota (1.12 percent), South Dakota (1.80 percent) and Nebraska (2.05 percent) should continue to rank among the states with the lowest delinquency rates at the end of next year. “We believe the nation will experience an improvement in mortgage delinquencies during 2011,” said Steve Chaouki, group vice president in TransUnion’s financial services business unit. “This will be driven by a slowly improving unemployment picture and continued stabilization in housing prices. While there is continued price pressure in many markets, we expect a growing number of areas of the country to experience a rise in property values along with some stabilization of values in those states and markets hardest hit by the recession.” For more information, visit

Mortgage Fraud SARs Rise Seven Percent in the First Half of 2010

continued on page 9

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Just days after U.S. Department of Housing & Urban Development (HUD) Secretary Shaun Donovan presented Congress with its annual report on the financial status of the Federal Housing Administration (FHA), the George Washington University Center for Real Estate and Urban Analysis has announced a new research project whereby the Center will release a series of reports analyzing the FHA. Entitled, “FHA Assessment Report: The Role and Reform of the Federal Housing Administration in a Recovering U. S. Housing Market,” the report series seeks to analyze and interpret FHA reforms underway to improve the agency’s performance. In 2010, Congress made several reforms to the FHA to better manage risk amid growing demand for FHA-insured mortgage loans. As the 112th Congress convenes in January, the reports will evaluate FHA residential mortgage activity and examine steps the agency is taking or may consider to ensure its long term viability, while fulfilling its goals of enabling low and moderate income home buyers to qualify for mortgage financing. The project will be undertaken by Dr. Robert Van Order Ph.D. at the George Washington University School of Business and chair of the Center for Real Estate and Urban Analysis, Vanessa Perry, associate professor of marketing and Anthony Yezer, professor of economics. “The FHA served a critically important role in the economic downturn to ensure that low downpayment lending continued, but, as in past cycles, there is concern that current policies may push the FHA toward instability,” said Dr. Van Order. “Steps have been taken to manage risk, but there are many components of the system and no one

Are You Aware Of...


 References to bankruptcy in SARs have steadily increased, rising to

George Washington University Study Examines the FHA 

The Financial Crimes Enforcement Network (FinCEN) has released two mortgage fraud reports entitled Mortgage Loan Fraud SAR Filings, which together cover the first six months of 2010; one report covers January through March 2010, and the other covers April through June 2010. Taken together the reports show that suspicious activity reports (SARs) indicating mortgage loan fraud (MLF) climbed seven percent, rising to 35,135 in the first half of 2010 compared with 32,926 in the first half of 2009. In part, the increase can be attributed to increased attention to older loans spurred by repurchase demands. In the first quarter of 2010, 78 percent of reported activities occurred more than two years prior to filing, compared with 44 percent in the same period of 2009, showing a continued focus on loans originated from 2006-2008. “SARs are one of the most important sources of lead information for mortgage fraud investigations available to law enforcement,” said FinCEN Director James H. Freis Jr. “As a member of the President’s Financial Fraud Enforcement Task Force, FinCEN remains active with law enforcement and other partner agencies in the task force to provide lead information and to identify potential abuses in order to combat mortgage loan fraud.” Other key findings of FinCEN’s latest reports include:

seven percent of MLF SAR filings in 2010, compared to one percent in 2006 and 2007.  SAR reports referencing “short sale” and “broker price opinion” appeared 827 times and 41 times in SARs respectively during the first quarter of 2010. Short sales and broker price opinions mentioned in SARs are sometimes associated with a particular type of flipping scheme known as “flopping.” Flopping occurs when a foreclosed property is sold at an artificially low price to a straw buyer, who quickly sells the property at a higher price and pockets the difference. For more information, visit

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Homeownership has lost its luster. Need proof? Pick up a newspaper or ask any Jane on the street; you’ll soon figure out the industry is not viewed in a particularly good light these days. You’ll also figure out that everyone has a fix, like scrapping interest rate deductions or requiring a 20 percent downpayment—which is great if you want homeownership to decline another 10 percent, as history suggests they would. Here’s another idea you’ll hear: “Simply wait ... I can hear a stampede of buyers just around the corner.” Yes, there are some who still speak of the mythi“… our woes can be cal pink unicorn that is pent-up demand. As if during solved by thinking this time of record-breaking bad news of delinquenoutside of the box and cies, unemployment, underwater homeowners, etc., getting to the root of there is a reserve of money-hungry homebuyers the problem: Creating waiting for the stars to align before they break out their checkbooks. sufficient capable Not so. In truth, we have the least capable and demand for the comleast willing group of buyers since the Great ing inventory.” Depression. But despite all of this, our woes can be solved by thinking outside of the box and getting to the root of the problem: Creating sufficient capable demand for the coming inventory. Before we begin, just a quick note: Your first instinct will be to dismiss this idea as pure nonsense. Give it a chance. If these suggestions were implemented, we’d have the housing problem whipped in 24 months—and those in the business of making loans would have all the clients they could handle. Here’s the plan: For the next two years, we create a zero-down loan program with two special features that will assure it creates virtually no foreclosures. The loans, of course, would require real qualifying—thus avoiding more garbage paper. First, let’s start with our target demographic. In the chart below, you’ll notice that the under-35 group has the smallest percentage of homeownership. That being the case, their credit is the least damaged coming out of the housing crash. (You can’t lose what you don’t own.)



Homeownership rates by age of householder

Apartment Apartment Lending Lending n is our bus business. siness. $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 multi-family mul ti-family financing *Larger *Lar gerr loans considered on a case-by-case case-by-case basis.

Source: U.S. Census Bureau

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 Madeyˆ ˆ 630-242-7251ˆ ˆ vmadey@ba 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 Willemsˆ ˆ ˆ 630-242-7249ˆ ˆjwillems@ba Baltimore, Baltimor e , Philadelphia, Kansas City, Cityy, St. Louis,, Raleigh/Durham

Jennyfer Col Colon on nˆ ˆ630-242-7248ˆ ˆjcol jcolon on@ba Columbus, C olumbus,, Louisville, Louisville , Minneapolis/St. Minneapolis/St. Paul, Oklahoma Oklahoma City/Tulsa City/Tulsa

1-800-894-6900 Member Me mber FDIC FDIC

With zero-down and an interest rate of five percent or less, many would see their monthly obligation actually decrease. By leaving the variable (and often accelerating) rental market in favor of fixed housing costs, over time, this payment would shrink. It’d almost feel like a car payment, freeing up money for other consumer purchases. In short, they would be enjoying the American dream. But what about “virtually no foreclosures,” you’re wondering? Good question. In the highly unlikely event that 10 percent of the borrowers stopped making their housing payment, lenders wouldn’t lose a dime. They’d simply move the loan to someone willing to cover the missed payments and assume the remaining loan balance. Once upon a time, the Federal Housing Administration (FHA) had something called “simple assumption.” (Never was anything more perfectly named.) The new

Helping He elping you do more. more . continued on page 10

news flash

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part should become overextended. Our research project will take a close look at some of the tough questions: Should FHA’s loan limits remain at pre-housing crash levels? How should FHA limit risk to the fund? What products should FHA insure? What types of borrowers should FHA serve?” Secretary Donovan recently presented Congress with its annual report on the financial status of the FHA Mutual Mortgage Insurance Fund. The independent actuarial analysis contains projections of the capital reserve ratio of the FHA MMI Fund, which, in recent years, has been below the congressionally mandated two percent ratio. This year’s report found that the MMI fund ratio has changed minimally; at 0.50 percent today, down from the 0.53 percent in fiscal year 2009. The decline over last year is the result of a drop in performance of the Home Equity Conversion Mortgage (HECM) business (which has a negative ratio) that was largely offset by improvement in the single-family portfolio from 0.42 percent to 0.79 percent (before the transfer of 0.20 per cent to the HECM account). For more information, visit

operations like these, and state and federal law enforcement partners have brought hundreds more. The most significant consumer protection under the FTC’s new rule is the advance fee ban. Under this provision, mortgage relief companies may not collect any fees until they have provided consumers with a written offer from their lender or servicer that the consumer decides is acceptable, and a written document from the lender or servicer describing the key changes to the mortgage that would result if the con-

sumer accepts the offer. The companies also must remind consumers of their right to reject the offer without any charge. The MARS Rule requires mortgage relief companies to disclose key information to consumers to protect them from being misled and to help them make better informed purchasing decisions. In their advertising and in communications directed at individual consumers (such as telemarketing calls), the companies must disclose that: They are not associated with the government, and their services have not been approved by the government or the consumer’s lender; the lender may not agree to change the consumer’s loan; and if companies tell

consumers to stop paying their mortgage, they must also tell them that they could lose their home and damage their credit rating. Companies also must explain in their communications to consumers that they can stop doing business with the company at any time, can accept or reject any offer the company obtains from the lender or servicer, and, if they reject the offer, they don’t have to pay the company’s fee. The companies also must disclose the amount of the fee. The FTC rulemaking proceeding was conducted pursuant to Congressional legislation sponsored in 2009 by Sens. continued on page 14

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Homeowners will be protected by a new Federal Trade Commission (FTC) rule, the Mortgage Assistance Relief Services (MARS) Rule, that bans providers of mortgage foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they decide is acceptable. “At a time when many Americans are struggling to pay their mortgages, peddlers of so-called mortgage relief services have taken hundreds of millions of dollars from hundreds of thousands of homeowners without ever delivering results,” said FTC Chairman Jon Leibowitz. “By banning providers of these services from collecting fees until the customer is satisfied with the results, this rule will protect consumers from being victimized by these scams.” The FTC is issuing the MARS Rule to protect distressed homeowners from mortgage relief scams that have sprung up during the mortgage crisis. Bogus operations falsely claim that, for a fee, they will negotiate with the consumer’s mortgage lender or servicer to obtain a loan modification, a short sale or other relief from foreclosure. Many of these operations pretend to be affiliated with the government and government housing assistance programs. The FTC has brought more than 30 cases against


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buyer put $35 in the mail and the loan was transferred from the current owner to the new owner; no formal qualifying or assumption paperwork required. The only stipulation was that the loan be made current. Simple indeed. Let’s take a look at a typical example, with a property that has a $150,000 loan at five percent interest: $805 (principal and interest) + $195 (taxes and insurance) = $1,000 monthly payment Assume the owner is three months behind when the lender gives notice of its intent to start foreclosure. Instead of losing the home, the owner finds someone willing to make the payments current and deeds them the property. The lender is made whole, and the new owner goes from being a renter to a homeowner. Take a look at this foreclosure chart. How many buyers do you think might jump at the chance to own a home—without having to formally qualify?

Trustees deeds recorded: Southern California






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Source: Real Estate Research Council of Southern California, Cal Poly Pomona There are record numbers of former owners whose credit was damaged credit in the past few years. Each is a family who lost property to foreclosure, and they’re perfect candidates to again become homeowners via simple assumption. Of course, no lender will make them a new loan because of their credit history. But that doesn’t necessarily make them a risk to lose another home. If they’re able to bring five to 10 percent cash to the deal, they have “skin in the game.� Not only have they made a substantial financial commitment, but they are overjoyed to get a chance to own again. Only this time, their payment is less than rent. As an aside, didn’t we just have a zero-down homeownership program when we gave an $8,000 tax credit to the buyer of a $100,000 house? Buyers didn’t need $8,000 to close escrow, so in essence, that’s a zero-down purchase. The problem is that the loan cannot be easily transferred in case of a default, and that loan program will create foreclosures on top of the $8,000 bill for each sale. The tax rebate program created artificial demand. My nothing-down program would create real demand and permanent benefits. Overjoyed-ness aside, it’s possible that the new owner could stop making loan payments. They hide their head in the sand and the lender takes the property to a trustee sale. Bad news. Or is it? Under this system, the opening bid at the trustee sale will only be the late payments and fees—not the entire principal amount plus late charges and everything else. On our hypothetical $150,000 loan, the back payments wouldn’t exceed $7,000 and the fees $2,000. By show of hands, how many investors would pay $9,000 for a chance to own a positive cash flow rental with five-percent financing for 30 years? I am an investor, I can tell you the number would be unlimited. What’s more, each property would likely see overbids, which normally go to the owner. For this loan program, however, borrowers who default get none of the overbid. Call it “provisional ownership.� If they live rent-free for six months, that’s reward enough. Let the overbid fund an insurance policy that backs any losses for the new loan program. One important element is to allow the participation of Realtors. Give them the assurance that the former owner will have no residual liability by allowing the loan to transfer to the new owner. This would assure huge demand for the inventory across all price sectors of the market. It would also save the lenders a ton of money. Instead of foreclosing and losing money, the loan will be brought back in good standing; just with a different owner’s name. For the time being, the lenders should care more about having a loan payment being made than whose name is on the check. continued on page 13




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By David Lykken




I am going start off with a bold assertion that “we” (our nation and our industry) are facing a serious leadership crisis. I am also going to assert that this is the result of the unusual and extended season of prosperity and “good times” we have enjoyed from 1996 through 2006. It has been my observation that in times of great prosperity such as this period, we rarely see new leadership emerge. If anything, leadership development seems to go into remission. That is not to say that there are new potentially strong leaders walking among us, but the absence of a perceived or real crisis doesn’t seem to foster or allow an opportunity for those leaders to emerge … i.e., the need for their existence did not exist (or so we thought). Regrettably, the catalysts for leaders to arise seems to be when we have the emergence of a new crisis. I will even assert that when we, as a society, have extended periods of great prosperity as we have become confused on what strong leadership looks like.

“Overindulgence, greed and materialism cause us as a society to become lazier, more complacent and less disciplined … the characteristics opposite of true leadership. In fact, capitalism that gives way to excess is an enemy to leadership development.” For those of you questioning this, consider this question: During your life, when have you experienced your greatest times of development and growth? Isn’t it during those unpleasant seasons when you’re going through some difficulty that feels like a crisis? There is no question that we all enjoy the good times and want them to continue for as long as possible. But when you do a honest analysis of what actually happened during the decade

between 1996 and 2006 where we all enjoyed such an extraordinary extended time prosperity, we witnessed our nation increasingly subscribe to the mistaken notion that “greed is good” and “he who dies with the most toys wins.” Overindulgence, greed and materialism cause us as a society to become lazier, more complacent and less disciplined … the characteristics opposite of true leadership. In fact, capitalism that gives way to excess is an enemy to leadership development. Economists have said that we entered the current recession in December, 2007, and some would suggest that we have begun to emerge from that recession. Whether we are or not, having unemployment hovering around 10 percent and the most recent Case-Shiller report advising that some real estate markets are likely going to experience a double-dip in housing prices, there’s no question that the good times are over. Most economists advise that we are no longer in a recession and have begun a recovery, albeit a modest recovery. Others are not so easily convinced, suggesting that things are going to get much worse before they get any better. If the latter is true, could this actually be a blessing in disguise? Or maybe another way to look at it is the old expression “where is the pony in this pile” (my apologies if you haven’t heard the story with that as the punch line). If it is true that we are heading into more troubled economic times, than the topic of “leadership” and “leadership development” is more critical now than ever. It is for this reason that I have chosen to write a new series of articles on leadership. It is my hope that you will enjoy and benefit from reading this column in the months ahead. Whether we have an economic downturn or an economic recovery, it is important either way to develop the leaders amongst us. Good leadership is key to our future and survival as an industry and as a country.

If I were to ask you to quickly start naming list of some of the greatest leaders in history, what names would come to mind? Would names like George Washington, Abraham Lincoln, Winston Churchill, Gen. Douglas MacArthur, Martin Luther King, Nelson Mandela, Golda Meir or Mahatma Gandhi come to mind? For those who are more sportsminded, names like Vince Lombardi or John Wooden might come to mind. In reality, it wouldn’t be very difficult for most of you to quickly compile a list of individuals you consider to be leaders. Now, if I were to ask you to give me a list of the qualities that make for a great leader, I dare say that most would find that exercise a bit more challenging. Why is that? Most of us immediately recognize leadership when it shows up. However, when you asked most of us to logically explain or identify what it is about someone that makes that person a leader, we struggle. Leadership is something that we intuitively or instinctively recognize when experienced. It is not something we arrive at logically. Okay, now let’s take this discussion to the mortgage industry. If I were to ask you who is or has been a great leader in the mortgage industry, who comes to mind? With “tongue-in-cheek” I ask, “Does anyone come to mind?” If some names do come to mind, ask yourself: “Why do I consider these people leaders?” As I suggested at the opening of this article, many years of prosperity skews our definition of what makes for a strong leader. When I ask myself the question, “Who in the mortgage industry do I consider to be a leader” … I struggle for an answer. Several individuals surface in my thinking; however, recent revelations about some of these individuals’ lack of character cause me to say to myself, “You know, they may not have been the leader that I thought they were.” History has a tendency to qualify or disqualify genuine leadership. Allow me if you will, to share a personal story about someone influential

early in my career. When I started my career in mortgage lending, one of the very first bosses I had seemed like anything but a leader. To say that “we didn’t start off on the right foot” is an understatement. From my perspective, he seemed to enjoy making my life miserable. I was right out of college, and in hindsight, I now recognize that I was definitely “rough around the edges,” but I had an intense desire to succeed in mortgage lending. The harder I tried, the more difficult this new boss seemed to get. He was rough on me, and from my perspective, was harder on me than anyone else. I just assumed he didn’t like me and there was nothing I could do about it. Nonetheless, he was extremely really good at what he did and I wanted to learn from one of the best, so in my mind, I was going to put up with him. With that attitude, there’s no telling what he was thinking about me at the time. However, it wasn’t long before I realized I was growing and getting better and better. It wasn’t too long that I started getting promoted and eventually started receiving job offers from the competition, some of which were really attractive offers. To my own amazement, every time I was offered a bigger salary or “better opportunity,” I chose to stay put. While we never grew close, I had grown to respect boss as a leader. I saw mortgage lending as my long-term profession and my desire to grow and be mentored by one of the best in the business exceeded anything else. As a result, I ended up staying with that company for a number of years despite numerous attractive offers from competitors. For that company for whom we both worked, my boss’ good leadership paid great dividends for me and the company we worked for, as I stayed there and produced a good amount of revenue for that company. Leadership does matter. I had the privilege of reconnecting with that old boss many years later after he had retired and a short time before he passed away. I

found myself getting somewhat choked up as I thanked him for all he had done in the early days of my career. I cannot tell you how many times I have looked back and appreciated his contributions to my career and my life. Leadership may not yield friendship, even though I wish it had in this case, but it did yield dividends well beyond this man’s time on this earth. Here’s the point of me telling you this story. History and time provides us with the best “optics” to clearly see/recognize the leaders in our lives.

“History has a tendency to qualify or disqualify genuine leadership.” Here are the questions I now have for you, “Do you want to be a leader?” “Do you see yourself as a leader or a potential leader?” To make the point more clearly, let me rephrase the question this way, “Do you want to be successful in this business?” If you do, you MUST learn how to become a GREAT leader. That is what this series of articles is going to be dedicated to accomplishing … developing great leaders. I believe we are entering a season where those who have developed strong leadership skills will not only prosper and do well, but will also have amazing opportunities for growing strong companies that will dominate the next market cycle. While speaking at the Mortgage Bankers Association (MBA) Annual Expo

in Atlanta late last fall, I made the following prediction and it bears repeating as I start this new series of articles on leadership: “One of the most interesting things about 2011 will be which companies survive and thrive, and which ones will fail. The primary determining factor between success and failure in the days ahead will be ‘leadership’ or the lack thereof.” Again, I look forward to writing on the topic of leadership each month in this publication in the year 2011. It is my hope and prayer that 2011 will be your best year ever. Again, happy new year! 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) 9779900, ext. 101 or e-mail To listen to author David Lykken’s online radio show, log on to and type in “Lykken on Lending” in the “Search” box on the right-hand side of the page.

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Compare that to today’s typical downpayment requirement for investors: 20 to 30 percent with a limit of 10 loans, which eliminates the best and brightest investors from helping with the economic recovery. If this new loan program would be allowed, investors would be able to prevent a foreclosure from happening and get better financing than they could anywhere else ... and in unlimited quantity. The more buyers are interested in a property, the higher the bid would go. Then, take the overbid and build a fund to do something worthwhile … fund Habitat for Humanity or green building, etc. Now, do you still think this nothing-downpayment idea is ridiculous?

• Operations Manager 

 First, it gets young adults involved in homeownership much earlier than normal. This creates part of the demand we need to turn the percentage of homeownership headed in a positive direction.  Second, when a borrower defaults on this new loan program, it actually allows a former owner to once again own a home. All they have to do is make the loan current and record a grant deed. Call it forgiveness or amnesty or a failing longterm memory, but the group of credit-damaged former owners is huge and needs to be considered. (And there’s no way the new program would generate enough foreclosures to fill the demand—that’s a guarantee.)  The third way is taking the property to a trustee sale with an opening bid of only the back payments and fees. Buyers, with cashier’s checks in hand, bid against other trustee sale buyers. The starting bid is the total of the late payments plus foreclosure costs, not the principal under this new loan program (approximately six percent of the balance of the loan.

news flash

By Charlie W. Elliott Jr., MAI, SRA, ASA

The Challenges of International Real Estate Appraisals

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Jay Rockefeller and Byron Dorgan. The Final Rule applies only to entities within the FTC’s jurisdiction under the Federal Trade Commission Act, which excludes, among others, banks, savings and loans, federal credit unions, common carriers, and entities engaged in the business of insurance. In June 2009, the FTC issued an Advance Notice of Proposed Rulemaking seeking comment on the practices of forprofit mortgage relief companies. In February 2010, the FTC announced a Notice of Proposed Rulemaking and sought comments from interested persons, including advocates for consumers, the business community, and the legal profession. For more information, visit

Ginnie Mae Reports Increases in Revenue, Recently, I had the opportunity to per- not uncommon for a lender to com- Net Income and Loan form an appraisal in Costa Rica. The plain about an appraiser traveling 30 Loss Reserves in 2010




function of the appraisal was to evaluate miles to do an appraisal, especially if a property to be used as collateral for a the results do not turn out to favor the mortgage loan; in much the same way as closing of a loan transaction. When this it would be done here in the United is contrasted to the traveling of hunStates. While Costa Rica is a foreign coun- dreds or even thousands of miles, the try and offers many differences, it has question would likely seem more apromuch in common with our country, if for pos. My response to such a question is no other reason than that much of the that it is better for a proven professionreal estate there is owned al to perform an appraisal by United States citizens. in a somewhat unfamiliar Actually, the client on the territory than assigning project was a United the task to a local person States-based bank and the who lacks the qualificaproperty owner was a tions to perform the United States citizen. appraisal correctly. Many The fact that the countries, including Costa assignment was in anothRica, do not have licensed er country did not relieve real estate brokers or cerme of the obligation of tified real estate appraispreparing a professional ers. Furthermore, the proappraisal. While the client fessional appraiser from “While geographic making the loan will have another country would collateral outside the unfamiliarity offers likely be ill-equipped to country, the lending regu- the traveling apprais- follow the requirements lations are the same, if not of an appraisal used for a er a challenge, permore stringent, and there haps one of the biggest mortgage loan in this is every expectation that country. USPAP would be obstacles for the the appraisal conform the unknown to such an indiUniform Standards of appraiser to overcome vidual, and this is the in less developed Professional Appraisal basic requirement of any areas, whether one is appraisal used for collatPractice (USPAP), a very local or from out of U.S. requirement. That eral here. having been said, it would To carry the subject a town, is finding a be fair to point out that bit further, it is not unususource of reliable appraising property in al for a certified appraiser market data.” other countries, especially to cover more geographic countries with fewer or different regula- territory for more unusual or demandtory requirements, offers challenges over ing assignments. The fewer local profesand above those that appraisers are typ- sionals there are available to perform a ically subjected to when appraising in task, the more need there is to bring in the United States. a professional from a greater distance. Before getting into some of the spe- This is especially true for appraisals of cific challenges, one of the questions commercial properties. The challenge of that I am sometimes asked in doing following USPAP alone would seem such an appraisal is: “How would you almost insurmountable to an outsider know enough about the area to do an not steeped in the education and reguappraisal there? This brings up a sub- latory environment of our country. ject typically referred to as “geographic continued on page 19 competence.” In the United States, it is

Ginnie Mae has reported revenues of more than $1 billion for fiscal year 2010, up from $657.3 million in 2009. The increased revenues are driven primarily by increases in guaranty fee income and interest income. Net income for 2010 reached $541.5 million, surpassing the $509.6 million net income total for 2009. The company increased its provisions for loan losses to slightly more than $1 billion in 2010, up from $559.9 million in 2009. “Given the continued slow pace of growth in the U.S. economy, Ginnie Mae’s increase in both revenue and net income is quite an accomplishment,” said Ginnie Mae President Ted Tozer. “This year we’ve increased our loan loss reserves, and we believe this increased provision is more than sufficient to offset losses on servicing portfolios taken over by Ginnie Mae due to Issuer defaults.” Ginnie Mae, a self-financed, whollyowned corporation within the U.S. Department of Housing & Urban Development (HUD), earns revenue from fees collected on the mortgagebacked securities (MBS) issued under the Ginnie Mae full faith and credit guaranty. The corporation’s business volume reached a historic milestone in 2010 by surpassing $1 trillion in MBS outstanding. The trillion dollar portfolio supports more than eight million housing units for families across the country. During the housing crisis, the corporation helped stabilize the largest segment of the market by pumping more than $900 billion in liquidity into the single-family housing market since June of 2008. “Our goal is to be the best-in-class conduit for bringing capital into the U.S. housing finance system, while minimizing risk to U.S. taxpayers,” said

Executive Vice President Mary Kinney. “During this incredibly challenging housing market, Ginnie Mae has overseen tremendous business growth, while simultaneously implementing strong risk management practices and providing efficient solutions to our business partners.” Ginnie Mae raises capital from investors in the global credit markets to ensure liquidity for affordable rental and homeownership opportunities across the country. Its business is to finance housing mortgage programs run by the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), the Office of Public and Indian Housing (PIH), and the Department of Agriculture’s Rural Development Housing and Community Facilities Program (RD). For more information, visit

HUD to Launch Investigation Into 22 Discriminatory Lenders The U.S. Department of Housing & Urban Development (HUD) has announced that it is launching multiple investigations into the practices of certain mortgage lenders to determine if their home loan policies illegally deny qualified AfricanAmerican and Latino borrowers access to credit. The investigations are in response to 22 complaints the National Community Reinvestment Coalition (NCRC) filed with HUD alleging that the loan activities of the mortgage originators showed that their home lending practices deny Federal Housing Administration (FHA)insured loans to African-Americans and Latinos with credit scores as high as 640. FHA guidelines allow mortgages to borrowers with credit scores above 580, provided the borrowers have downpayments equaling 3.5 percent of the loan amount, or above 500, provided the borrowers have down payments equaling 10 percent of the loan amount. “FHA is an important vehicle for Americans who want to purchase or refinance a home. We thank NCRC for bringing these complaints to HUD. For lenders to deny responsible home seekers this source of credit, without regard for their capacity to repay the loans, would raise serious fair housing concerns and, if proven, undermine our nation’s recovery efforts,” said HUD Assistant Secretary for Fair Housing and Equal Opportunity John Trasviña. “HUD will take appropriate action against any lender found to be engaging in discriminatory practices.” Prior to the recent downturn in the economy, FHA-insured mortgages comprised less than three percent of new home loans. Since the economic crisis,

FHA and the government-sponsored enterprises (GSEs) have insured or guaranteed nearly 95 percent of new mortgage loans being originated. By the end of 2008, almost half of new home purchase loans and one quarter of new refinance loans were FHA or Veterans Administration (VA) insured. According to NCRC, an association of more than 600 community-based organizations that promote access to basic banking services, their fair lending “testers” evaluated the practices of national lenders, financial services corporations, and other regional and local FHA-approved lenders. In the complaints filed, the NCRC states that lenders were chosen according to their market share and volume of FHA loans, as well as through discussions with community leaders. Under the Fair Housing Act, HUD impartially investigates allegations of housing discrimination and, during every phase of investigations, attempts to settle complaints through conciliation efforts. For more information, visit

HOPE NOW: More Than 1.5 Million Loan Mods Completed in 2010

 Proprietary loan modifications decreased—117,000 in September compared to 101,000 in October.  60-plus days delinquencies increased— 3.2 million in September compared to 3.4 million in October.  Foreclosure starts decreased from 245,000 in September to 205,000 in October.  Completed foreclosure sales decreased from 118,000 in September to 69,000 in October.  Loan modifications outpaced foreclosure sales in October 125,000 to 69,000. For more information, visit

Ginnie Mae to Enhance Disclosure Transparency on HECM Securities Ginnie Mae has announced that it will soon release enhanced disclosure information on its Home Equity Conversion Mortgage

(HECM) securities program. Ginnie Mae’s HECM securities program supports a growing number of government-insured reverse mortgages, an important financial solution for many seniors. For Ginnie Mae HECM pools, the additional disclosure information will include the number of HECM Saver loans and their remaining principal balance (RPB). Ginnie Mae will also disclose the HECM Saver RPB as a percentage of the total HECM RPB. The new disclosure information is aimed at helping investors better predict the performance of the underlying mortgage collateral and evaluate the performance of HECM Saver loans relative to that of standard HECM loans. “Investors will certainly appreciate the additional information, but ultimately consumers should benefit the most from the more robust disclosures especially in terms of lower financing costs,” said Ginnie Mae President Ted Tozer. “We believe more detailed and timely disclosure information on this segment of the market should enhance investors’ ability to assess the performance of these securities and allow Issuers to sell their loans into the secondary market for better prices.”

For more than 40 years, the industry has turned to the stability of the Ginnie Mae mortgage-backed security (MBS), allowing Ginnie Mae to provide homeownership opportunities for millions of Americans. Ginnie Mae securitizes loans insured or guaranteed by the Federal Housing Administration (FHA), the Department of Veterans Affairs, the Department of Agriculture’s Rural Development, and the Department of Housing and Urban Development’s Office of Public and Indian Housing. For more information, visit

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

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







HOPE NOW, the private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors, has released its October 2010 survey data which estimates that the industry has completed more than 1.54 million permanent loan modifications for at-risk homeowners from January through October 2010. That translates to an average of 154,000 homeowners per month who have been able to remain in their homes with an affordable loan modification solution. The reported data for October shows mortgage servicers completed approximately 101,000 proprietary loan modifications for homeowners and 24,000 Home Affordable Modification Program (HAMP) modifications (as reported by U.S. Treasury Department), for an estimated total of 125,000. “There were anomalies in the October data that affected 60 day plus delinquency, as well as foreclosure, metrics which we believe may be largely attributed to widespread foreclosure delays across the country,” said Faith Schwartz, executive director of HOPE NOW. “Despite these irregularities the mortgage industry’s efforts to keep homeowners in their homes and offer viable mortgage solutions continues to show strong results each month. Far more homeowners are receiving workout solutions—including loan modifications—than are going to foreclosure sale each month.” Of particular note in October’s data is the effect foreclosure delays and pauses (initiated by some mortgage servicers nationwide) had on the delinquency and foreclosure numbers for the month. Specifically foreclosure starts and sales

dropped to 205,000 and 69,000, respectively while the number of homeowners more than 60 days delinquent increased slightly to 3.4 million. Here are the highlights of the October 2010 monthly data (based on industry estimates):

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Why Did They Go Up?




There have been two important messages delivered on a consistent basis from this column. First, no one can predict the future, and second, you must be prepared for the future. An expert is not in position to predict the future. An expert is in position to know what could affect the future. An expert is also prepared for what could happen in the future. Last month, I discussed the need to be prepared for the transition from a refinance to a purchase market. I certainly was not predicting that rates would go up immediately. However, it did happen. The next question is … why did it happen? I asked our resident secondary technical expert, Eric Holloman of RateLink and here is what he had to offer … “Rates came under a double whammy following the announcement from the Fed where they published the amount of bonds they intended to buy. There is a saying on the ‘Street,’ buy the rumor, sell the news. Rates fell following Ben Bernanke’s hint at further quantitative easing. That sparked a firestorm on Wall Street on how much the Fed would buy. Remember QE1 was a whopping $1.75 trillion, including $1.25 trillion in mortgage-backed securities (MBS) and $500 billion in Treasuries? Some market ‘experts’ were forecasting the number as high at $2 trillion for the second quarter The $600 billion was in the middle of what the Street was expecting. Rates came under pressure following the announcement because the Fed’s number was not ‘shocking.’ Adding to the pressure on rates is the VERY REAL concern that QE2 may spark inflation, the number one enemy to rates. The inflation concern in very real, even within the Fed. Several Fed districts dissented (voted no) on further easing citing inflation as the reason for their dissent.” Eric makes some great points. I would add that most of the experts were saying that rates would stay low and you should always bet against the experts. That sounds good and many times this is a good bet; however, it does not give us a substantive reason as to why the experts are wrong. It does explain why I refuse to predict the future. It did look as though rates were

staying low, especially with the economy faltering, the addition of the foreclosure crisis to an already weak real estate market and the Federal Reserve announcing a plan to start purchasing up to $600 billion in assets in order to keep rates down. The stage was set for low rates as far as the eye could see. Don’t get me wrong. I don’t think that rates are high right now, but why did they rise so quickly? The rate spike is a reminder that the all-important powerful government cannot control as much as it would like. For example, the Federal Reserve Board cannot control rates. Yes, it can control short-term rates, but it cannot control long-term rates. We may have forgotten this important fact in the past few years because the Fed’s plan to purchase mortgages and Treasuries worked so well as the financial crisis peaked. However, the key was that the Fed was purchasing these instruments while the economy was in shambles. The markets accepted the move. The markets do not seem to be as accepting of the Fed’s plan to purchase another $600 billion in assets over the coming months with many concerned that this stimulus could fuel inflation, as Holloman has indicated. It should be noted that this inflation scare came right at the time that the government reported the lowest level of consumer inflation since 1957. The markets are highly psychological, especially in the short-run. That is why you can never predict the future of the stock market and rates. If the market sees a Fed move such as lowering short-term rates or purchasing assets as inflationary, long-term rates can rise in reaction. The fact that rates went up sharply was a surprise to many. On the other hand, there was another fundamental reason for this move. Buried in a very busy week in early November was the employment report. It was buried because we had an election that week and the Federal Reserve announcement as well. However, the employment report was very important. While the increase of 150,000-plus private sector jobs was welcome, it cercontinued on page 20

Calyx Announces the Acquisition of Loan-Score Decisioning Systems Calyx Software has announced the acquisition of Loan-Score Decisioning Systems Inc. The addition of a product and pricing engine, an automated underwriting system, as well as Federal Housing Administration (FHA) eligibility decisions to the number one mortgage origination platform, further solidifies Calyx’s end-to-end offering. “This is a historic move for Calyx Software; a very significant and strategic move to better serve our customers and further our presence in the lending industry,” said Doug Chang, president of Calyx Software. Beginning immediately, Calyx will execute on the integration of the two companies and will be working to leverage the value of this acquisition to bring new and better products to the market. The service experience for Loan-Score customers will be business as usual, contact numbers and personnel will remain the same. Loan-Score Decisioning Systems is a 10-year old company out of Irvine, Calif. that offers their clients a full suite of decisioning solutions satisfying small, medium and large production and servicing organization needs. The modular suite includes a product & pricing engine (PPE), automated underwriting system (AUS), portfolio analysis engine (PAE), channel focused point-ofsale (POS) Web portals, a system-tosystem integration bridge and more. Loan-Score maintains a comprehensive, up-to-date library of investor guidelines and pricing to ensure eligibility is met and market conditions are adjusted to deliver precision-based underwriting that result in fundable and saleable loans. These options are available via software-as-a-service (SaaS) and self-hosted technology models. Loan-Score integrated with Point in September of 2010 giving mutual customers added efficiencies as well as cost saving opportunities. “Loan-Score’s AUS and its interface to FHA TOTAL Scorecard, are two major differentiators from their competitors,” said Dennis Boggs, senior vice president of business development of Calyx. “This is what made our initial integration important and now underscores the value and significance of the acquisi-

tion. We are extremely pleased to be gaining a stronger foothold in the industry. By combining the number one loan origination suite of products from Calyx with the Loan-Score product offerings we are maximizing our value positioning for both our current and prospective customers.“ As a result of this purchase, Calyx will be adding staff within the next several months to accommodate the business and customer needs of both companies while optimizing the two talent pools of current staffing. For more information, visit

Ellie Mae and SOURCECORP Partner on Doc Management Solution Ellie Mae Inc. and SOURCECORP Inc. have announced a partnership to develop an integrated solution to enable Ellie Mae customers to securely and efficiently transfer electronic loan files. Customers using Ellie Mae’s Encompass360 can securely submit their electronic loan files into FASTRIEVE, SOURCECORP’s Web-based electronic document repository and workflow management system. The integrated solution enables loan file images to be automatically batched and delivered to correspondent lenders and servicers as needed. Secure data transmission ensures that all proper images are transferred; eliminating missing documents and saving the time and cost associated with manually copying and uploading individual documents. “Previously, the process of exporting images from Ellie Mae Encompass into FASTRIEVE was time and labor intensive. But with the new integrated solution, the process is automatic and seamless, saving Ellie Mae customers anywhere from five to 15 min. per file,” said Michael Zwall, director of Mortgage Services for SOURCECORP’s BPS Division. “With an unparalleled level of configurability, our industry leading technology enables integration with key service providers, like Ellie Mae, to support a paperless workflow throughout the origination process.” For more information, visit or

CampusMBA Extends Partnership With Insurance Advisors for Online Education

Clayton Holdings to Offer Special Compliance Servicing Through Its Quantum Division Clayton Holdings LLC, a provider of customized risk analysis, loss mitigation, operational solutions and staffing services to the mortgage and fixedincome industries, has announced that its Quantum Servicing unit is now offering a full-range of loan administration and asset management services to

Is local knowledge required to perform a creditable appraisal? Some say yes, and in principal, I agree. To be more succinct, I would prefer subscribing to the term possessing adequate local market information. Generally, the term “local knowledge” is used because it makes doing an appraisal easy. One does not have a need to do nearly so much market research when local knowledge is available. Said another way, local knowledge is cheaper and quicker than exhaustive research. Finally, once the proper research has been completed, those from outside the market will possess the necessary local knowledge to perform a creditable appraisal. While geographic unfamiliarity offers the traveling appraiser a challenge, perhaps one of the biggest obstacles for the appraiser to overcome in less developed areas, whether one is local or from out of town, is finding a source of reliable market data. In many localities, the Multiple Listing Service (MLS) is foreign to the vocabulary of local real estate practitioners, and having access to an online property tax database is either non-existent or not readily available. In these markets, data is usually horded by a few people who have small snippets of information, which they develop firsthand from transactions they handle. In these cases, they are among the few who know about specific transactions; however, there are tons of transactions that they just do not know about. In these situations, everyone suffers, since no one can know about the entire market. This makes for a less efficient system and produces fewer professional appraisers who have complete knowledge of the local market. This problem seems to be less of an issue for local banks in these areas. Perhaps this is because they do not have the same appraisal requirements as do banks in the United States. Given the above scenario, my challenge in Costa Rica was not just my unfamiliarity with the market, but my need to obtain information in a timely and cost-efficient manner. Fortunately, I was able to befriend three of the most active real estate brokers in the local

market and they helped me get up to speed quickly on what was happening in their market. Another challenge in such markets is the language barrier. U.S. lenders expect their appraisals to be delivered in English, even if the property is located in a land where few, if any, people, who refer to themselves as appraisers, read, write and speak English. Since all public records in Costa Rica are written in Spanish, this necessitates a bit of translating. Along the same line, the local money is not measured in U.S. dollars. There, it is measured in colones, a completely different medium from what we are accustomed to. At the time of my visit, a U.S. dollar was worth 516 colones. This required translation and further calculation. In the end, the boundaries between countries offer challenges to those making mortgage loans, regardless of who does the appraisal. This will almost always equate to a more expensive, timeconsuming and complicated appraisal assignment, no matter who does the work. In foreign countries, there will sometimes be local professionals competent enough to provide professional appraisals which conform to the standards of the lending community in the United States, but usually not. The difficulties in appraising internationally, created by lack of accessible market data, local customs, language, different monetary systems and related issues, make for an interesting stew frequently favoring the travel of United States professionals over hiring local appraisers in parts of the world that do not conform to the requirements of our own system. In closing, I would like for the record to show that the country of Costa Rica is a beautiful place, and that it is understandable why those fortunate enough to have property there do so. Charlie W. Elliott Jr., MAI, SRA, is president of Elliott & Company Appraisers, a national real estate appraisal company. He can be reached at (800) 854-5889, e-mail or visit his company’s Web site,



continued on page 20



Equifax has announced that it is working with BlackBox Logic to give investors greater transparency into borrower credit health. ABS Credit Risk Insight Direct, Equifax’s data solution for the mortgage-backed securities (MBS) market, now leverages BlackBox Logic performance data on more than 21 million loans across nearly 7,600 deals. By linking anonymous borrower credit information to BlackBox Logic’s extensive MBS performance data, ABS Credit Risk provides a more complete picture of the collateral health underlying non-agency MBS.

continued from page 14


Equifax and BlackBox Logic Partner on Borrower Credit Transparency Product

value nation 

CampusMBA, the award-winning education division of the Mortgage Bankers Association (MBA), has announced that it has extended its partnership with Stamford, Conn.-based Insurance Advisors LLC. Under the agreement, CampusMBA, in conjunction with Insurance Advisors, will offer live online workshops addressing insurance issues for commercial/multifamily real estate loans. “MBA remains committed to offering a wide variety of industry education and this partnership with Insurance Advisors illustrates our continued commitment to these efforts as we offer focused classes on commercial insurance issues that are so vital to our commercial and multifamily members,” said Gail Cardwell, MBA’s senior vice president of commercial/multifamily. Each workshop will cover both broad topics as well a specific issues that industry professionals face on a daily basis. The workshops are designed to provide practical information that is useful to commercial/multifamily loan originators and underwriters, loan closers, drafting attorneys and loan servicers. “The Commercial Insurance LIVE Online Workshops are a great resource for our members to enhance their knowledge base through the expertise provided by CampusMBA and Insurance Advisors,” said Paul Green, MBA’s senior Vice President of corporate relations, education and business development. “We are delighted to renew our joint venture with MBA to put on Live Online Workshops related to commercial real estate insurance. This has been a great partnership and we look forward to our third year together in this endeavor,” said Bernie Brown, president of Insurance Advisors LLC. “We are committed to providing superior educational assistance to MBA members and we are proud the MBA has chosen to continue our partnership with them.” For more information, visit or

This relationship represents the latest step Equifax Capital Markets has taken to equip investors with powerful data solutions. ABS Credit Risk Insight provides leading indicators of loan performance such as updated credit scores and detail on all mortgage and home equity payments, owner-occupancy and performance on past mortgages. Now, Equifax’s solution statistically matches up-to-date borrower credit information to BlackBox Logic’s database of MBS performance data to help investors improve model accuracy, better predict loan default and prepayment and enhance deal surveillance. “More than ever before, investors are focused on addressing industry and policy requirements while looking for ways to increase their confidence in the collateral behind securities. This is where solutions that provide transparency into collateral risk play a critical role,” said Steve Albert, vice president of Equifax Capital Markets. “The combined strength of Equifax’s industry-leading solution and BlackBox Logic’s extensive loan-level MBS data gives investors the insight they need to better predict securitized loan performance and make more confident trading decisions.” In addition to making ABS Credit Risk Insight available to investors using various types of loan-level data, Equifax continues to find new ways to enhance its data solutions for the secondary market. Over the past year, Equifax has added several new and unique data variables to its ABS Credit Risk product line, including owneroccupancy and bankruptcy indicators as well as the FICO credit score and the FICO Mortgage Industry Option known as the BEACON Mortgage Score. VantageScore, a consumer credit scoring model developed by Equifax and the other major credit reporting companies, is also available through ABS Credit Risk Insight Direct. “Equipping investors with tools that allow them to conduct more granular analysis of collateralized mortgage obligations is essential for this industry,” said Wyck Brown, chief marketing officer of BlackBox Logic. “Working together, we are delivering to the secondary market powerful solutions that leverage very unique data attributes and highly accurate risk models.” For more information, visit or

the secondary market overview




tainly was not Earth-shattering since we lost more than seven million jobs during the recession. It did represent a small move in the right direction. The weeks following this announcement saw first-time unemployment claims continue to drop as well. We have also indicated previously that employment is key to our economy recovery. The real estate market will not recover without the economy creating jobs. Of course, it is hard for the economy to create jobs when the real estate market is suffering. This “Catch-22” means that we must take tiny steps out of this vicious cycle. Creating more than 150,000 jobs per month is one of these steps. This fundamental, coupled with the skittishness of the markets regarding the Fed plan and inflation could be what contributed to the spike. So where do we go from here? Well, we need the economy to create 150,000-plus jobs per month on a consistent basis. In other words, the number cannot go back below the 100,000 mark and it must move towards 200,000. That is exactly what happened in November, as the economy actually created less than 50,000 jobs. However, let’s take a look back for some perspective. Just over 18 months ago, we were losing more than 500,000 jobs per month. The fact that we consider the creation of 50,000 jobs bad news is actually good news at this point. Of course, we are not out of the woods and this is why rates are not likely to continue to rise indefinitely. If they do, we may never get out of the woods. The foreclosure crisis must be resolved because we must get rid of the shadow inventory. Like the overall recovery, this should take some time. Early reports on holiday retail sales were encouraging. Consumer spending is another key factor in the recovery process. Does it sound like we are rooting for rates to go up? If rates are going up

continued from page 18

because the economy and real estate markets are recovering, then that is a good thing. But as we emphasized, they cannot rise too fast without jeopardizing the recovery. Will rates remain at this level or go back down somewhat? Again, you cannot predict the future. What if Korea breaks out in an all-out war? What if the European debt crisis gets worse? These are factors that theoretically could bring rates back down in a flight to safety. One event could cause everything to go out the window with regard to the fundamentals. We may have already have seen some movement from the time I write this column until the time it is published. For now, the fundamentals have not changed that much. There is no inflation. The economy is still very slow and will slow further temporarily due to the foreclosure crisis. Of course, the reminder we received last month of what can happen to rates in an instant should be taken seriously for those who are waiting to purchase a house or a car and think they can wait because they believe rates will remain low forever. Blink an eye and the world can change. That goes for loan officers as well. Go back to my message regarding the transition to a purchase market. If you are not getting ready for this transition at some time in 2011, then you will be left behind. It will be too late to make the transition after it already happens … and November was a month which reminded us of how just quickly it can happen.

heard on the street

continued from page 19

investors in small balance commercial real estate loans. Quantum’s Commercial Servicing Division, based in Tampa, Fla., will primarily handle non-performing commercial loans—acquisition, development and construction (ADC), multifamily, shopping center and strip mall—valued at $5 million or less. According to Fitch Ratings, commercial real estate losses in 2010 have already reached $21.66 billion so far this year, surpassing the 2009 levels of $17.75 billion. The number of defaults through 3Q 2010 (1,452) nearly equals the total for all 2009 (1,464). Paul Bossidy, chief executive officer of Clayton, said that Quantum was preparing to enter this market when several large investors approached the company and asked them to coordinate their efforts. As a result, Quantum is already servicing approximately 6,000 non-performing and performing small balance loans. “We are approaching this new market the same way we approached residential special servicing,” said Bossidy. “We’re not trying to be all things to all clients. Instead, we’re focused on a growing but under-served part of the market, not the mega deals. Our goal is to be the best-in-class option for investors looking for customized servicing programs, and higher levels of collaboration and transparency from their servicer.” Scott H. Kramer, a commercial real estate veteran with 20-plus-years experience will direct Quantum’s commercial default servicing operations. He Dave Hershman is a leading author for the will report to Quantum’s President mortgage industry with eight books and sev- Scott Conradson. eral hundred articles to his credit. He is also For more information, visit www.clayhead of OriginationPro Mortgage School and or a top industry speaker. Dave’s NewsletterPro Marketing System can be found at MRG Announces If you Integration With would like to stay ahead of what is happen- Mortgage Builder’s LOS ing in the markets, visit ratelink.originationMRG Document for a free trial or e-mail Technologies (MRG), a provider of mortgage document preparation software and compliance technology to banks, credit unions and other lenders nationwide, has announced that its MIRACLE Online electronic document preparation system is integrated with Southfield, Mich.-based Mortgage Builder’s awardwinning loan origination software (LOS) system. For lenders operating in several states, such as Texas, closing document packages must be prepared by a licensed attorney. Through the integration, loan data can now be imported directly from the Mortgage Builder LOS into MIRACLE Online where MRG’s inhouse staff of attorneys creates the content for the closing packages. This automation alleviates the risk of inaccuracy that can develop with the manual re-keying of data. In addition,


Mortgage Builder’s clients benefit from closing documents that are guaranteed to be in compliance with the latest regulatory updates. “Our goal is to streamline the origination process so our lenders can work more efficiently and cost-effectively,” said Liz Fafette, vice president of operations for Mortgage Builder. “By integrating with MRG, our customers are able to easily move the data between the LOS and doc prep system, improving accuracy and saving time. Accuracy is essential to prevent repurchase demands in the current environment. And with the additional oversight we can expect as the Dodd-Frank Act is enacted, lenders will benefit from the precision this integration brings.” “Data such as escrow setup, title insurance premiums and county tax stamps can easily be misread and reentered into the system incorrectly,” said Kathleen Mantych, senior marketing director for MRG. “Direct export from the LOS into MIRACLE Online is especially beneficial for those lenders producing loans in states that require attorneys to prepare closing packages because it cuts a step out of the process. We look forward to assisting Mortgage Builder’s clients with the quicker, streamlined production of regulatory compliant documents.” For more information, visit or

Wipro Gallagher Solutions Partners With Mortech Inc. Wipro Gallagher Solutions (WGS), a provider of costeffective, end-toend loan origination technology and fulfillment services for mortgage lenders, has announced an integrated joint offering with Mortech Inc., a mortgage technology software company specializing in daily pricing, product decisioning and lead management solutions for secondary marketing teams and mortgage bankers. The collaborative effort offers users of WGS’ loan origination system (LOS), NetOxygen, to access Mortech’s Marksman loan product and pricing engine and compare real-time pricing quotes from multiple investors for any type of loan program within seconds. The Marksman-NetOxygen joint offering increases conversion rates throughout the sales cycle and optimizes the loan closing process for originators and secondary desks. “Our partnership with WGS offers a dynamic solution for efficiently originating and closing loans,” said Don Kracl, president of Mortech. “The interface combines the best features of both continued on page 22

The “Fatal Flaw” in HAMP By Steven Gillan

This “Escalation” process would also give the Treasury the information they need to verify if the servicer is doing the right job and take action on those that are not. It would let the servicing industry know that they cannot continue to perform their job poorly because no one will check on them. The hope would be to get the servicer, due to competition the knowledge that they no longer have a monopoly on the process, to act properly. Unfortunately at this time, the Treasury has stated clearly they have no intention of performing this function even though it is mandated by HAMP. It makes sense to actually “review” a file for accuracy and they have been presented with a plan to implement a program immediately by our organization, the American Alliance of Home Modification Professionals (AAHMP). Without this, what recourse is left to the investor and homeowner? The answer is possibly the courts, but that takes a long time which will continue to just further slow the process. This does not benefit anyone but the servicer. This “Fatal Flaw” needs to be corrected. Steven Gillan is executive director of the American Alliance of Home Modification Professionals (AAHMP), an association formed to establish nationwide, newly elevated, lasting and consistent operational and behavioral standards for the professional mortgage loan modification industry. Steven may be reached by phone at (631) 875-3181, e-mail or visit 21

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Approximately 20 months into the Home is evident at the Treasury and in Congress Affordable Modification Program (HAMP) with the failure of the servicer to follow and the Obama Administration’s efforts guidelines as designed yet the servicer to slow foreclosures with its many trou- claim they are doing everything possible. Now we have the robo-signing issue bles still exist. This is evident from all of the processing problems we still see and which they (the servicers) have admitted hear about on a daily basis, from lost to being part of. Lets review … after 20 months of faildocuments; improper calculation of ing to implement loan income; poor knowledge modifications, several miland implementation of the lion Americans who have underwriting guidelines; lost their homes, millions four, six, 12 and 20 months of below-market real for approval; and now, the estate-owned (REO) proprobo-signing situation. The erties waiting to hit the list continues, but yet after housing market, and abusall this time, we do not see es like “robo-signing,” why improvement. Now, we is the government still not find a “fatal flaw” in HAMP physically overseeing the that could be our last work of servicers? What is chance to fix the problems. the Treasury to do? They What we do see is a level “…after 20 months of can leave it up to the of frustration from all interfailing to implement courts or the attorneys ested parties; we have the loan modifications, general around the couninvestor who hired the sertry, but that will take vicer under a Master Servicing several million months if not years. Agreement (MSA) who cannot Americans who have The Treasury could get their service provider to lost their homes, milimplement a component in even respond to their lions of below-market HAMP that deals with cominquires—plus a continuous real estate-owned pliance. It is a tool that has stream of fees to deal with (REO) properties waitbeen built into the guidethe foreclosure process. We ing to hit the housing lines for compliance of polihave the homeowner who is making every effort to com- market, and abuses like cy by the servicer. This job is contractually the responsiply with the servicers’ contin‘robo-signing,’ why is uous request for documen- the government still not bility of Freddie Mac. It is a tool that allows Freddie Mac tation. Then, there is our physically overseeing to review the servicer opergovernment representatives the work of servicers?” ation and procedures to wondering just exactly what assure that all applications is going on? The plan in the beginning was to cre- for HAMP are given the same treatment. ate the MHA/HAMP where the Treasury This compliance operation is part of the would provide an overall strategy, guide- Servicer Participation Agreement (SPA) that lines, policy directives and alterations as more than 100 servicers have signed with required to try and meet the overall the U.S. Department of the Treasury. Part of objectives of stabilizing real estate values this guideline is the “Escalation” process nationwide. The Treasury hired Fannie where a homeowner that has been denied Mae and Freddie Mac to run the pro- a modification has the ability to have their grams—Freddie as its compliance team case reviewed by the Treasury. The Treasury and Fannie as the agency responsible for has hired the Homeownership Preservation implementation. After all this time, it is Foundation (HPF) to handle those calls. evident the program is failing for reasons According to the Treasury, it is the job of the as mentioned earlier, what is to be done. HPF to work with the homeowner and serTo the Treasury’s credit, they have tried vicer to try and iron out differences and act to work with the servicing industry to as an advocate of the homeowner with the make the plan workable. The frustration servicer.

The troubling part of the above process is this … during that “Escalation” process, no one checks the servicer work product. When this homeowner was denied a HAMP modification, or the process is taking 10-20 months, no one checks if the servicer underwriting was correct to begin with, no one request to see the files to determine if that homeowner does or does not actually meet the guidelines. Again, are we just to believe that the servicer did the job correctly or that the file is not being dragged on for financial gain. This is the “Fatal Flaw” in HAMP which will doom it to failure because no one is checking on the servicer. How can the Treasury assure the homeowner or the American taxpayer that the particular file did not “in fact” qualify for a HAMP modification if no one determines that it was underwritten properly? The servicer can do and say whatever they want and the Treasury or the homeowner has not recourse but to accept their conclusion. A strong “Escalation” process performed by a neutral third party can either affirm or dispute those finding. With cases that the decline is valid based on HAMP underwriting guidelines, everyone knows where they stand and they all can move on. In a case where the servicer did “in fact” make a mistake, a completed modification application, fully underwritten by a U.S. Department of Housing & Urban Development (HUD) Direct-Endorsed Underwriter would be given to the servicer for them to review and complete the process.

heard on the street

New Risk-Based Pricing Rules Effective January 1, 2011 Overview





Risk-based pricing (RBP) refers to the practice of using a consumer’s credit report, which reflects his or her risk of nonpayment, in setting or adjusting the price and other terms of credit offered or extended to a particular consumer. The risk-based pricing rules implement Section 311 of the Fair and Accurate Credit Transactions Act of 2003 (FACTA), which amends the Fair Credit Reporting Act (FCRA). The Federal Reserve Board (FRB) and the Federal Trade Commission (FTC) proposed regulations in May 2008 that generally would require a creditor to provide a consumer with a risk-based pricing disclosures (RBP Disclosures) when, based in whole or in part on the consumer’s credit report, the creditor offers or provides credit to the consumer on terms less favorable than the terms it offers or provides to other consumers. On Dec. 28, 2009, the FRB and FTC announced the final risk-based pricing rules, with the effective compliance date of Jan. 1, 2011. Publication in the Federal Register of the final rules took place on Jan. 15, 2010.1 The new rules apply to mortgage brokers (if they are credit grantors), correspondents, and lenders and impact all consumers that have credit data and/or scores accessed for a risk-based pricing decision, regardless of loan approval status. Indeed, risk-based pricing rules apply, with certain exceptions, to all creditors that engage in risk-based pricing. A risk-based pricing notice would generally be provided to the consumer after the terms of credit have been set, but before the consumer becomes contractually obligated on the credit transaction. The rules provide a number of different approaches that creditors may use to identify the consumers to whom they must provide risk-based pricing notices. In addition, the rules include certain exceptions to the notice requirement, the most significant being an exception that permits creditors, in lieu of providing a risk-based pricing notice to those consumers who receive less favorable terms, to provide all of their consumers with their credit scores and explanatory information. As an alternative to providing risk-based pricing notices, the final rules permit creditors to provide consumers who apply for credit with a free credit score and information about their score. Today, most consumers must pay a fee to obtain their credit score. Companies that use a credit report or score in connection with a credit decision must send notice, containing specified information, to a consumer when, based on a credit report or score, the company grants credit on material terms that are not the most favorable terms offered to a substantial proportion of consumers. For instance, in most cases, the rule defines material terms as the loan’s annual percentage rate (APR).

What are Material Terms? With respect to closed-end (residential real property) credit, there are two specific categories: 1) Material Terms: The Annual Percentage Rate (APR) required to be disclosed.2 2) Materially Less Favorable: The terms granted, extended or otherwise provided to a consumer differ from the terms granted, extended or otherwise provided to another consumer from or through the same person (i.e., original creditor) such that the cost of credit to the first consumer would be significantly greater than the cost of credit granted, extended, or otherwise provided to the other consumer. continued on page 24

continued from page 20

NetOxygen and our Marksman loan product and pricing engine, reducing the time and resources many lenders and secondary desks currently devote towards the processing of loans in their pipeline. We’re confident this synergistic collaboration will promote a unique and efficient work-flow process for the mortgage community.” The new integration will allow users to perform various lender tasks more effectively, such as instant rate searching and re-pricing, viewing detailed pricing summaries, accessing product guidelines and gaining product eligibility intelligence. Data is transmitted seamlessly between the two solutions through an exclusive bi-directional process. NetOxygen can be enhanced so that customers can trigger price requests to their Marksman account based off of a particular loan status. Marksman then transmits critical data back to NetOxygen. The free flow of data exchange allows for an end-to-end loan closing experience. “By adding the Marksman interface to its already robust vendor ecosystem, WGS has enhanced the overall loan closing process by providing lenders the opportunity to access all loan rates across all channels through a single ata-glance portal,” said Anil Raibagi, business head for WGS. “By eliminating such time-consuming search processes associated with pricing rates and product guidelines, NetOxygen provides greater workflow automation and helps lenders to focus more on their lending and closing deals.” For more information, visit or

MDA DataQuick Acquired by TPG Capital MDA DataQuick, a division of MDA Lending Solutions and an independent provider of property data to real estate and mortgage professionals, has announced that it has been acquired by TPG Capital (TPG), based in Fort Worth, Texas. This acquisition is part of a larger sale to TPG of MacDonald Dettwiler & Associates Ltd.’s (MDA) Information Products business. The Information Products group includes several businesses across the United States, United Kingdom, Canada and Europe. Properties acquired in the deal, which services the lending industry in the United States, includes MDA DataQuick, MDA Mindbox, MDA Lending Solutions as well as Marshall & Swift, a provider of data and analytics to the insurance industry. The Information Products group will benefit from joining TPG, which has extensive experience in the market and ownership of complementary companies. TPG is very knowledgeable about the data and financial services sector

and is interested in investments that will grow the business. “We are very excited about investing in these high-quality property information businesses. MDA and the respective management teams have done an excellent job growing these companies,” said Bryan Taylor, a partner at TPG Capital. “This investment fits very well within our broader data services portfolio, and we look forward to working with management in the US, Europe and Canada to continue growing these businesses.” “TPG Capital’s acquisition of MDA DataQuick reaffirms the strength of our business model and will help us to grow our leadership position as an analytics and data provider in the real estate and lending markets,” said John Walsh, president of MDA DataQuick. “We’re positioned to compete and win in these challenging markets, because of operational performance and the stability of our client base. TPG’s ownership and guidance helps set the stage for future growth.” For more information, visit

Embrace Home Loans Reaches Goal of 3,200Plus SAFE Act Compliant Employees Embrace Home Loans, a direct lender for Fannie Mae and Freddie Mac, approved by FHA and VA, and an issuer for Ginnie Mae, recently achieved a corporate goal of meeting the licensing requirements to date of the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act. More than 275 of the company’s loan officers successfully completed the required paperwork, submitted the appropriate documentation for the Nationwide Mortgage Licensing System (NMLS), and passed professional licensing exams in multiple states. In total, the company achieved more than 3,200 licenses that all meet or exceed the requirements of the regulation. “We have been preparing for the SAFE Act for more than a year, and consequently have invested thousands of man-hours and millions of dollars in resources to ensure all of our loan officers are ready to meet the requirements of the SAFE Act,” said Embrace Home Loans President Kurt Noyce. “We are in favor of the regulations and believe this is an important step in terms of protecting consumers and ensuring only credible and professional loan officers remain employed. We believe the entire industry, not just non-depository lenders, should be held to this standard in an effort to restore professionalism and ensure the consumer’s best interest is honored.” continued on page 24



Plus Postage & Handling

Part I: The new pillar of retirement security Part II: Marketing reverse mortgages: It’s all about education Part III: Originating reverse mortgages Part IV: Enhancing freedom: The essence of reverse mortgages Part V: A new frontier in mortgage lending

“When I first began reviewing the contents of this book, I became quite jealous ... Atare Agbamu has set down an impressive amount of information ... And he delivers it in an easy-to-read, simpleto-understand style that will make this book essential reading for all reverse mortgage professionals.” —from the Foreword by Jim Mahoney, Co-Founder and Former Chairman, Financial Freedom Senior Funding Corporation, and former four-term Co-Chair of NRMLA’s Board of Directors

“The stories [Chapter 15: Profiles in Satisfaction] are the best vehicle to increase understanding and acceptance of reverse mortgages among us laypeople. They are very compelling ...” —Therese Cain, Executive Director, Minneapolis/St. Paul Chapter of Little Brothers—Friends of the Elderly

“This book should be required reading for all new loan consultants originating reverse mortgages and is recommended for experienced ones as well. This book provides excellent insight and information on preparing ahead to provide the service our seniors deserve, to ensure a smooth loan process and shorten the time to closing. Most of the problems caused in the processing and closing of reverse mortgages come from inadequate preparation.” —Deanne Opstad, AVP, Senior Underwriter, Generation Mortgage Company


Think Reverse! Table of Contents

—Sarah F. Hulbert, President, Senior Financial Corporation and former four-term Co-Chair of NRMLA’s Board of Directors




“Atare Agbamu is one of only a handful of people in the reverse mortgage arena who possesses a commanding understanding of the reverse mortgage industry. As an originator, he has hands-on experience educating seniors and their advisors. As author of the “Forward on Reverse” column in The Mortgage Press since 2002, Atare Agbamu communicates nationally with the housing finance community, bringing the unique insights and experience of an ardent reverse mortgage expert into a wider business context. “This book combines Atare’s keen insights and know-how with extensive research to create a first of its kind resource for the reverse mortgage industry. It offers a comprehensive overview of the industry plus detailed information on marketing and originating reverse mortgages. “Present and future reverse mortgage professionals and senior advisors will profit from decades of experience skillfully woven into this book. If you plan to succeed in this industry, this book is the place to start.”


regulatory compliance outlook




continued from page 22

heard on the street

continued from page 22

Factors relevant to determining the significance of a difference in cost: the type of The SAFE Act requires that all resicredit product, the term of the credit extension, if any, and the extent of the dif- dential loan officers who are employees ference between the material terms granted, extended, or otherwise provided to of agency-regulated institutions be the two consumers.3 licensed through a series of requirements recently put into place by the Who provides the RBP Disclosures? NMLS. The SAFE Act standards are Two-prong test designed to enhance consumer protecThere is a two-prong test to determine the RBP compliance requirement, and both tion by promoting transparency in conditions must be met: mortgage lending, though licensing requirements apply only to non-depos(1) Determine that a consumer report is being used in connection with an appli- itory lenders. Officers working for fedcation for, or a grant, extension or other provision of, credit (for personal, house- erally regulated and insured instituhold, and family—not business—purposes) to a consumer; and tions are considered registered by the (2) Based in whole or in part on the consumer report, determine if credit is grant- SAFE Act and do not have to take the ed, extended or otherwise provided to that consumer on “material terms” that are steps to obtain licensure. All loan offimaterially less favorable than the most favorable terms available to a substantial cers working outside the banking sysproportion of consumers from or through the credit grantor. tem are subject to new training, testing and extensive licensing requirements. Who receives the RBP Disclosures? The process for compliance begins A consumer must receive the RBP Disclosures by determination of the following with pre-licensure education courses, methodologies: which the loan officer must then sustain annually in continuing education Direct comparative analysis courses. A written exam is required to Directly comparing the material terms offered to each consumer and the materi- evaluate competence, as well as a credal terms offered to other consumers for a specific type of credit product.4 it check for financial responsibility and a criminal background check. Issues Credit score proxy5 such as bankruptcy could affect a loan (A) Determining the credit score (cutoff score) that represents the point at which officer’s chances at being licensed. A approximately 40 percent of the consumers to whom it grants, extends or provides loan officer then obtains a unique idencredit have higher credit scores and approximately 60 percent of the consumers to tifier, which remains with them whom it grants, extends or provides credit have lower credit scores; and throughout any changes in employ(B) Providing a risk-based pricing notice to each consumer to whom it grants, ment. Once the new Registry system is extends or provides credit whose credit score is lower than the cutoff score. fully operational, a mortgage loan officer must provide in certain circumTwo or more credit scores used stances, their unique Registry identifier Determine the cutoff score using the same method the creditor uses to evaluate to consumers. This identifier provides multiple scores when making credit decisions. Evaluation methods may include, access to all requirements the officer but are not limited to, selecting the low, median, high, most recent or average met in the licensing process, including credit score of each consumer to whom it grants, extends or provides credit. such information as the background check and financial history. No credit scores For more information, visit When using the credit score proxy method (see above) to grant, extend or provide credit to a consumer for whom a credit score is not available, an assumption is made that the consumer is receiving credit on material terms that are materially Calyx and CCMC less favorable than the most favorable credit terms offered to a substantial pro- Announce Strategic portion of consumers from or through that original creditor and a risk-based pric- Alliance Aimed at ing notice to the consumer must be provided. Workflow Efficiency Calyx Software has Tiered-pricing method announced a strategic Tiered-pricing occurs when the creditor places the consumer within one of a disalliance with CCMC to crete number of pricing tiers for a specific type of credit product, based in whole provide interfaces with or in part on a consumer report. If the consumer is not placed within the top pric- other critical systems such as core proing tier or tiers, the RBP Disclosures compliance are met, as follows: cessing, core servicing or back-office software. CCMC’s bridge products will  Four or fewer pricing tiers: Providing a risk-based pricing notice to each con- enable even more efficient workflow sumer who does not qualify for the top tier (that is, the lowest-priced tier). and increased productivity for financial Example: A creditor that uses a tiered pricing structure with annual percentage institutions using Calyx for their mortrates of eight, 10, 12 and 14 percent would provide the risk-based pricing gage platform as information is easily notice to each consumer to whom it grants, extends, or provides credit at annu- shared between systems. al percentage rates of 10, 12, and 14 percent.6 Calyx mortgage solutions combine  Five or more pricing tiers: Providing a risk-based pricing notice to each con- the latest technology with the functionsumer who does not qualify for the top two tiers (that is, the two lowest-priced ality that mortgage professionals require tiers) and any other tier that, together with the top tiers, comprise no less than for loan marketing, prequalification, the top 30 percent, but no more than the top 40 percent of the total number origination, and processing. As a robust of tiers. Each consumer placed within the remaining tiers must receive a risk- server-based solution designed with based pricing notice. Example: If a creditor has nine pricing tiers, the top three added security required by financial tiers (that is, the three lowest priced tiers) comprise no less than the top 30 per- institutions, PointCentral protects busicent, but no more than the top 40 percent of the tiers; therefore, a creditor ness integrity from the simplest access using this method would provide a risk-based pricing notice to each consumer restriction to ensuring that all employto whom it grants, extends, or provides credit who is placed within the bottom ees follow specified business rules—all six tiers.7 with the easy-to-use screens and compliance features of Point that meet the continued on page 26 needs of all mortgage professionals.

“I am very excited about our alliance with CCMC,” said Wade Brantley, national sales director for Calyx Software. “Many of our clients operate in sophisticated environments and need to bridge Calyx with other critical business software. CCMC provides us with a highly respected and talented bridge builder. Our clients have been thrilled with the results as Calyx continues to reap market share gains with mortgage banks, banks and credit unions.” CCMC provides bridge solutions that link core banking systems with specialty applications such as Point and PointCentral, providing a streamlined data flow backed by a sophisticated middleware engine that ensures that transactions are complete and error free as they are shared across multiple software applications. CCMC bridge solutions also connect Calyx Software products with back-office software used by many mortgage banks. Additionally, CCMC can build a customized bridge from any other critical system to Point or PointCentral, giving all financial institutions the opportunity to utilize the number one mortgage platform in the nation with the end-to-end functionality, efficiency, and data flow they need to increase productivity. “Competition and industry regulations have developed a need for realtime information exchange between systems,” said Dana Giesler, vice-president of sales for CCMC. “Bridging critical systems with Calyx products gives Calyx clients the fast, accurate data flow that will keep them competitive.” For more information, visit or

CIS Group Announces the Acquisition of Cornerstone Appraisal Services CIS Group LLC, a subsidiary of CIS Holdings LLC and an affiliate of CEP, has completed its acquisition of Cornerstone Appraisal Services of Valparaiso, Ind. This acquisition marks the third property inspection services company that CIS Group has acquired, including GPL Solutions in 2005 and Advanced Field Services in 2008. “Cornerstone’s core products are a perfect complement to our existing field underwriting services,” said Michael Stanley, chief executive officer of CIS Holdings. “The acquisition of Cornerstone broadens CIS’ product offering and gives our clients access to a best-in-class high-value appraisal product. More importantly, our clients will continue to have the Perfect Customer Experience they associate with CIS Group.” Cornerstone continues CIS Group’s consolidation strategy in the field services sector. “We see an increasing

opportunity to add specialty service providers to the CIS portfolio,” said David Rollins, president of CIS Group. “Because CIS conducts over two million inspections a year across the entire United States, servicing most of the top insurance carriers, we believe that consolidating complementary service companies onto the CIS platform will enable us to continue to provide a superior level of service to our customers at extremely competitive prices. We are passionate about increasing route density with complementary products for our inspector-vendors, and sharing those resulting efficiencies with our vendors and our customers.” For more information, visit

HomeGain and AgencyLogic Announce Web Partnership

Mortgage Professionals to Watch  Rory Lane has been named director of community engagement for MortgageDashboard where he will be responsible for customer support and corporate objectives through social media.

Sen. Fred Thompson’s commercial pushing government-insured reverse mortgages did it for Tom and Bertha Akuna of Lake Matata, Minn.* Tom Akuna, 69, retired two years ago because of chronic back problems from decades of back-breaking odd jobs. Bertha Akuna, 63, is a dedicated homemaker from the old school. The couple has no children and no pets. During pre-lending counseling, the counselor, Sonia Hudloom, uncovered two gaping holes in the Akunas’ safety net: No life insurance policy and no pension benefits for a surviving spouse. Although Tom Akuna gets about $900 from Social Security (which covers their basic monthly living expenses) and their home is paid for, the absence of life insurance policies (which the Akunas’ religion forbids) and pension benefits for a surviving spouse means the Akunas need to manage their home equity wisely to support the surviving spouse. In new the Financial Interview Tool (FIT) process “no life insurance policy and no pension benefits for a surviving spouse,” is risk-factor number two. Along with other risk factors discovered in counseling, it will appear on the FIT summary the Akunas will take to their loan application interview, and their loan officer should find a way to bring up the issue. Here is a sample question: “Mr. and Mrs. Akuna, the paper from your loan counselor says your home equity is the largest support you both have for retirement, how would you keep it for whoever survives the other?”**

Rory Lane

 American Home Mortgage Servicing Inc. has named David M. Applegate as its new president and chief executive officer.  Kislak Mortgage LLC has appointed Edward Scott as its new senior vice president and southeast divisional manager. continued on page 27

This question should achieve the FIT objective of getting the Akunas and their loan officer to think through and discuss the Akunas’ long-term financial survival. It may help them and their loan officer to come up with the right mix of loan-advance options (a.k.a. payment plans) to conserve their equity, while giving them the means to meet any monthly budgetary shortfall they may have, a need that resonated when they watched the Law & Order actor

and former U.S. Sen. Thompson pitching reverse mortgages on TV. Suppose the Akunas had come to the loan interview with the intention of requesting a lump sum, thinking they can “invest” it for maximum profit. The above question and the ensuing conversation should give the loan officer an opportunity to ask a number of follow-up reality-testing questions with the aim of getting the Akunas to be more careful with their home equity. It bears repeating that one or two FIT risk factors or “yellow flags” may not be a problem, but a number of them could be a red flag. A Fred Thompson commercial may have motivated the Akunas to consider a reverse mortgage, but a FIT question could help them and their loan officer think through and discuss the holes in their retirement safety net. *Tom and Bertha Akuna, as well as Lake Matata, Minnesota, are fictional. **Please give me your feedback (e-mail me at on the strengths and weaknesses of this question, as well as your suggestions for improvement. 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 Minneapolisbased AdvisorNet Mortgage LLC, Agbamu has years of hands-on 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 Visit author Atare E. Agbamu’s blog at for his thoughts and insights on the reverse mortgage marketplace.



Annaly Capital Management Inc. has announced the formation of Shannon Funding LLC, a wholly-owned subsidiary that intends to provide warehouse financing and other services to residential mortgage originators in the United States. Shannon will be led by Bruce E. Watterson, a veteran mortgage finance executive who most recently was a managing director at LPS Capital Markets, a division of Lender Processing Services Inc. (LPS). Shannon, which will operate out of offices in Bellevue, Wash., plans to begin operations in the first quarter of 2011.

Holes in the Safety Net


Annaly Capital Announces the Formation of Shannon Funding LLC

FIT for Reverse Mortgage Lenders: Part V 

HomeGain, a Web site that connects real estate agents with homebuyers and sellers, has announced that it has partnered with AgencyLogic to provide single property Web sites to its real estate agent and broker members. The HomeGain Property Web sites enable real estate agents and brokers to showcase a single home listing to potential buyers and sellers. Each single property site provides a custom domain name, ability to add videos and unlimited photos, syndication to the major search engines, and sharing on social networking sites. “We are always searching for ways to help our agent members, and these single property websites are an excellent marketing tool for them to help sell their clients’ homes,” said Louis Cammarosano, general manager of HomeGain. “This partnership builds upon our existing and long standing relationship with HomeGain, a premium brand in the real estate industry,” said Stephen Fells, chief executive officer and cofounder of AgencyLogic. “Single property Web sites are a perfect addition to the existing HomeGain product line and compliment the many other ways the company helps Realtors.” For more information, visit or

“Now more than ever, new mortgage origination activity is dominated by the handful of large money center banks with ready access to capital,” said Michael A.J. Farrell, chairman, chief executive officer and president of Annaly. “Small- and medium-sized mortgage companies with good credit cultures and successful track records are challenged to source warehouse funding in this environment. Shannon plans to provide funding to these smaller participants in order to help them generate well-underwritten mortgage product. As opportunities present themselves in the future, Shannon will expand its strategy and operations into additional markets.” Watterson has more than 25 years of experience in mortgage banking, due diligence, servicing and technology. He was founder of Watterson-Prime LLC which provided due diligence, portfolio stratification and other consulting services to buyers and sellers of financial residential and commercial mortgage assets, and also launched WattersonPrime Software Inc., a software and technology company serving the assetbacked finance industry. Watterson’s prior experience includes senior positions in the mortgage, hedging and structuring groups at First Boston and Shearson Lehman Hutton, as well as head of the due diligence practice at PricewaterhouseCoopers LLP. Watterson received his BA degree at Miami University in Oxford, Ohio. Annaly manages assets on behalf of institutional and individual investors worldwide. The company’s principal business objective is to generate net income for distribution to investors from its Investment Securities and from dividends it receives from its subsidiaries. Annaly is a Maryland corporation that has elected to be taxed as a real estate investment trust (REIT). For more information, visit

regulatory compliance outlook

continued from page 24

When are the RBP Disclosures sent? With respect to close-end (residential real property) credit:  The RBP Disclosures are provided before consummation of the transaction, but not earlier than the time the decision to approve an application for, or a grant, extension or other provision of, credit, is communicated to the consumer by the creditor.8  RBP Disclosures are required to be sent individually and separately. These disclosures cannot be combined with any other non-FACTA documents and/or required disclosures.

What are the Model Forms? With respect to closed-end (residential real property) credit, there are four Model Forms provided. Technical modifications to the language of the forms are permitted, providing a “safe harbor,” as long as the substance of the model forms is not modified.9 1. Model Form for Risk-Based Pricing Notice 2. Model Form for Account Review Risk-Based Pricing Notice 3. Model Form for Credit Score Disclosure Exception for Loans Secured by One to Four Units of Residential Real Property 4. Model Form for Loans Where Credit Score is Not Available

Are there exceptions? There are five exceptions to the RBP Disclosure compliance requirements. 1) Application for specific terms: A creditor is not required to provide a riskbased pricing notice if the consumer10 applies for specific material terms11 and is granted those terms, unless those terms were specified by the creditor using a consumer report after the consumer applied for or requested credit and after the creditor obtained the consumer report.




2) Adverse action notice: A creditor is not required to provide a risk-based pricing notice to a consumer12 if the creditor provides an adverse action notice to the consumer under section 615(a) of the FCRA.13 3) Prescreened solicitations: A creditor is not required to provide a risk-based pricing notice to a consumer14 if the creditor: (i) Obtains a consumer report that is a prescreened list as described in section 604(c)(2) of the FCRA; and (ii) Uses the consumer report for the purpose of making a firm offer of credit to the consumer; or, provides more favorable material terms. This exception applies to any Firm Offer of Credit offered by a creditor to a consumer, even if the creditor makes other Firm Offers of Credit to other consumers on more favorable material terms. 4) Loans secured by residential real property–credit score disclosure: A creditor is not required to provide a risk-based pricing notice to a consumer15 if: (i) The consumer requests from the creditor an extension of credit that is or will be secured by one to four units of residential real property; and (ii) The creditor provides a notice to each consumer containing the following: A. A statement that a consumer report (or credit report) is a record of the consumer’s credit history and includes information about whether the consumer pays his or her obligations on time and how much the consumer owes to creditors; B. A statement that a credit score is a number that takes into account information in a consumer report and that a credit score can change over time to reflect changes in the consumer’s credit history; C. A statement that the consumer’s credit score can affect whether the consumer can obtain credit and what the cot of that credit will be; D. The information required to be disclosed to the consumer pursuant to section 609(g) of the FCRA;16 E. The distribution of credit scores among consumers who are scored under the same scoring model that is used to generate the consumer’s credit score using the same scale as that of the credit score that is provided to the consumer, presented in the form of a bar graph containing a minimum of six bars that illustrates the percentage of consumers with credit scores within the range of scores reflected in each bar or by other clear and readily understandable graphical means, or a clear and readily understandable statement informing the consumer how his or her credit score compares to the scores of other consumers. (See Model Form # 3, hereinabove.) continued on page 32

MortgageDashboard Announces LOS Upgrade MortgageDashboard, an on-demand loan origination system (LOS) enabling straightthrough, paperless mortgage processing for lenders, credit unions and banks, has released a major upgrade to its SaaS LOS. The new functionality will allow originators to attract new business, take applications, process and close the loans without leaving the software. The new version offers contextual navigation based on fully customizable templates that streamline the process and ensure compliance. “Advancements like this are possible because we’re approaching software development from a totally different perspective,” said MortgageDashboard Chief Technology Officer Jorge Sauri. “Our template-based approach will make it possible to customize MortgageDashboard quickly and easily to fit the kind of lending our clients are doing. We’re providing niche-based marketing power in a Web-based tool that delivers bullet-proof compliance in an interface so easy to use it won’t even feel like work.” The new version was rolled out to existing clients in early October and is now ready for new clients. Pricing is currently on a per-transaction basis and there is no upfront fee for the use of the platform. “We set out to build a more intelligent, powerful and flexible enterprise resource than our industry has ever seen before,” said Rene F. Rodriguez, MortgageDashboard chief executive officer. “Ultimately, the success of lenders in the future will depend directly on the success of the loan officers working within their companies. Solid loan origination technology is the cornerstone of the loan officer’s success. With this new version, we’re providing them with a strong foundation.” Rodriguez said that MortgageDashboard would be providing both support for the company’s LOS technology, as well as other forms of support for loan officers using the company’s products, including sales training, marketing support and motivation tools. Much of this support will be provided through the company’s new Web site at

In addition, Sauri said MortgageDashboard would maintain an aggressive schedule of future updates, rolling out new functionality for the LOS about every 30 days. Updates to the software that are already scheduled include:  A “Quality Coach” that follows each originator through the transaction, warning them of compliance violations in real time and making suggestions that will help the company originate the best possible loans.  A new eBriefcase that will collect and manage all of the documents that go through the transaction, keeping everything in its place and warning the loan officer when an expected document isn’t in the file yet.  A more complete borrower summary that will tell originators and managers at a glance what they need to know about their customers to turn them into customers for life. For more information, visit

Coester Appraisal Group Announces the Launch of

Coester Appraisal Group, a nationwide appraisal management company (AMC), has announced the launch of, a Web site for reverse mortgage professionals to order appraisal products that are specialized for reverse mortgage transactions. Among the services offered on the site is Coester Appraisal Group’s ValueSafe Appraisal Program, an innovative appraisal program that can save borrowers hundreds of dollars on upfront reverse mortgage fees. Unlike traditional mortgages, reverse mortgages are not based on the borrower’s credit or income. However, the value of the property is of prime importance. The vast majority of reverse mortgage lenders have a full appraisal conducted on the subject property prior to initiating the transaction. This can cost the borrower $350 to $450, on average. When added to the approximately $200 for counseling

mandated by the U.S. Department of Housing & Urban Development (HUD), the borrower’s upfront fees can total $500 or more with no assurance that the transaction can be fulfilled. Coester Appraisal Group helps borrowers get an approximate valuation of their home without incurring a major investment. Through Coester’s unique appraisal program, ValueSafe, borrowers may purchase a preliminary desktop appraisal for $100, which is approximately one-fourth the cost of a traditional appraisal. If the desktop appraisal indicates enough equity to fulfill the transaction requirements, the borrower can apply the amount paid on the ValueSafe desktop appraisal to the full appraisal if ordered through Coester Appraisal Group. If the desktop appraisal indicates that the property is lacking the required amount of equity, the borrower has only paid $100, as opposed to the full appraisal fee. “Borrowers are risking hundreds of dollars in preliminary fees for transactions that may not even qualify for a reverse mortgage,” said Brian Coester, chief executive officer of Coester Appraisal Group. “We created to provide reverse mortgage professionals with direct access to money-saving valuation alternatives. If completed prior to counseling, a ValueSafe appraisal can save upwards of $500 in upfront fees. That is a huge amount of money, particularly for those relying on retirement income. We’re hopeful that this money-saving option will become the new standard for evaluating property values for reverse mortgages.” For more information, visit or

ates a GFE with real-time settlement service fees for local, state and national closing services. Encompass Assured GFE can be configured to offer a company’s preferred providers, and is backed by a ClosingCorp compliance guarantee that rates and fees are presented in realtime and will not result in a HUD-1 tolerance violation. Users can easily order these services through Encompass360 and a compliance guarantee certificate is saved in the users’ Encompass360 eFolder. “We believe that the number one concern of lenders today is how to stay compliant and how to control the costs of staying compliant, particularly with so many changing and new regulations,” said Jonathan Corr, chief strategy officer for Ellie Mae. “We’re here to help our customers with compliance. Our customers rely on us to provide the tools they need to maintain compliance and promote total loan quality. Encompass Assured GFE is one more way we’re responding to our customers’ needs.” “Integrating this simple but powerful compliance tool within a loan originator’s workflow, allows lenders to prepare GFEs quickly, select their trusted providers, and access live rates along with recording fees and transfer taxes, in a few easy steps,” said ClosingCorp President Paul Mass. “Borrowers tend to select lenders who respond rapidly to their loan requests; this new service not only helps drive more business but assures the lender that the data used will meet HUD’s RESPA accuracy requirements.” For more information, visit or

Ellie Mae and Launch New Encompass Assured GFE

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continued on page 33

Mortgage Center as a residential lender.  Joe Adamaitis has been appointed state of Florida FHA 203k representa-  Mortgage Harmony Corporation has named former Mortgage Bankers tive for Academy Mortgage Home Association (MBA) chairman David G. Loan Corporation. Kittle, CMB to its advisory board and has also announced the appointment of Marlisa Senchack as senior vice president of product management and strategic outreach.  MDA Lending Solutions has named John Hosey as its chief appraiser.  Valuation Partners has announced the hiring of Dawn Svedberg as vice president and national account executive. Joe Adamaitis  Williston Financial Group LLC (WFG) has named William Moody execu ICBA Mortgage Solutions has named tive vice president of WFG’s lender Michael Azzarello as its new execuservices division, New Millennium tive vice president of national sales. Title and has named Moody to  Susan Anderson has been named WFG’s executive committee. vice president of sales for the northeast region for InHouse Solutions.  Pulaski Financial Corporation has Your turn named Brian Boyles president of National Mortgage Professional Magazine invites its readers to submit any inforPulaski Bank’s mortgage division.  Patrick Harrigan, CMB of Franklin mation, events, passages, promotions, American Mortgage Company has personal or professional occurrences been named chairman of the Mortgage that seem appropriate and/or other perAction Alliance Steering Committee, tinent data to the attention of: the grassroots advocacy affiliate of the Heard on the Mortgage Bankers Association (MBA). Street/Mortgage  Vinod Thomas has been named senProfessionals to Watch ior vice president, default strategy column and execution for ServiceLink. Phone #: (516) 409-5555  Equi-Trax Asset Solutions LP has E-mail: announced the hiring of Greg Musso as national sales director.  Ron Zaccaria has been appointed vice president of sales for BluFi Note: Submissions sent via e-mail are preferred. The deadline for submissions is the Direct Mortgage.  Brad Farris has joined Guaranty Bank 1st of the month prior to the target issue.


Kroll Factual Data, a provider of independent verification solutions, has announced a new service to help clients save time and efficiently comply with the Fair Credit Reporting Risk-Based Pricing Regulations that take effect Jan. 1, 2011. Customers can now take advantage of the ability to automatically generate Risk-Based Pricing Notices with each credit report request at no charge and an optional automated fulfillment service to print and mail notices to applicants for a nominal fee. “We have been paying close attention as this new regulation was being created, and working to educate our customers about their need to respond,” said Dennis Littlejohn, chief operations officer of Kroll Factual Data. “Once the scope of the Fair Credit Reporting Risk-Based Pricing Regulations was clearly defined, we created this convenient way for our users to meet the new obligations it created for them.”

continued from page 25 

Ellie Mae and have announced the launch of Encompass Assured GFE service powered by’s SmartGFE Service. With Encompass Assured GFE, Encompass360 users can now create Good Faith Estimates (GFEs), which are backed by a ClosingCorp compliance guarantee, directly from their Encompass360 systems. The January 2010 changes to the Real Estate Settlement and Procedures Act (RESPA) have created new compliance challenges for mortgage lenders and brokers. One such change involves the disclosure of fees provided to the borrower on the GFE and HUD-1 forms, which now must fall within certain accuracy tolerances. Encompass Assured GFE utilizes the same platform as’s SmartGFE Service and is private-labeled for use by Encompass360 customers. Once the borrower’s information is entered into Encompass360, users simply click the “Assured GFE” button, select the service providers from whom they’d like to receive quotes, and within seconds, Encompass Assured GFE gener-

heard on the street

FHA Insider: REO Investors … An FHA Referral Source You Must Have in Today’s Market Working With Investors and FHA Loans By Jeff Mifsud




You have a great opportunity in 2011 to other fields and form amateur REO help improve neighborhoods by help- investment groups with peers. Thus, ing investors get their buyers approved offering ways in which you can assist with Federal Housing Administration them with marketing removes a large (FHA) loans! As the economy chugs burden from them, and is always along and banks continue to release appreciated. their real estate-owned (REO) inventory in waves, Finding real great FHA origination estate investors opportunities will exist The following are five for mortgage loan origiways to locate real estate nators (MLOs) in the foreinvestors: seeable future. There are three reasons 1. Real estate investor why investors and MLOs associations make a great partnership. If you haven’t attended To begin with, my expethese events, it’s time you rience has shown that start! These groups consist of investors generally do not investors coming together to possess a great deal of share ideas. There is usually “REO agents have knowledge about buyer a feeling of camaraderie, listing contracts with financing. Your expertise is making networking simpler. banks to sell their important to, and welTo find an association, comed by, investors, allow- foreclosed properties. search the Internet for your ing them to focus on get- Contact these agents, area. One good resource is explain that you ting the renovations pleted and the property assist investors with ready for market. 2. REO agents helping them underSecondly, investors REO agents have listing constand how FHA can are not inundated with tracts with banks to sell help them be more calls from MLOs, as is their foreclosed properties. profitable, and ask often the case with real Contact these agents, them for names and estate agents. While explain that you assist numbers of investors investors do tend to be investors with helping them they work with.” harder to find, once you understand how FHA can find them, you may find help them be more profit easier to arrange a meeting with itable, and ask them for names and numthem. This is especially true if you have bers of investors they work with. a clear message that communicates Additionally, insofar as investors often use how much you can help them. agents to buy property but not to sell it, you And finally, investors are often chal- may end up generating the agent’s curiosity lenged with a lack of resources to prop- and setting up a meeting with them as well. erly handle the marketing of their Your goal is to get the names of investors, properties. Many are trying to simulta- but if you end up setting an appointment neously perform the jobs of real estate with the agent too, that’s a bonus! agent, general contractor and marketing director. In fact, many investors 3. “For Sale” signs often have primary employment in Often, “For Sale” signs are posted at

vacant homes and homes being renovated. This is a good indication the home is investor-owned. Call the number on the sign or stop by when you see workers at the property to get the name of the investor.

2. Flyers Create flyers for the property advertising financing information and the fact that buyers need little money down. Distribute them to homes in the surrounding neighborhood.

4. Business networking groups These groups are great ways to get referred to investors. Once, at a BNI group meeting, when I asked for referrals to investors, I received three right on the spot!

3. A call capture system Advertise your investor’s properties with a toll-free number, offering information about the property, thereby creating leads. Again, note to adhere closely to RESPA guidelines. This may sound old fashioned, but signs still generate leads. You never see an agent list a home without a sign … well no home should go without a finance sign as well.

5. Sphere of influence If you don’t belong to a networking group, inquire within your own contacts to find investors. You may be surprised at how many investors you find this way. Now that you have arranged a meeting … now what? Give them four reasons why FHA is the loan of choice for investors: 1. There is only a 90-day seasoning requirement calculated from the date the deed is signed. Because of the history of fraud with property flipping, many lenders have a 12-month seasoning. 2. Through the use of government agency down payment assistance programs, the entire amount of the buyer’s funds can be covered with no expense to the seller. Check you area for local homebuyer programs. 3. Their buyer gets a better loan. This creates a happier client who may refer friends to buy other homes the investor offers. 4. With FHA, there is a lower credit score requirement. Give them five ways to market their properties: 1. Finance signs Get signs made that state clearly how much they need to put down and the amount of the monthly payment. Have signs printed with the spaces for down payment and monthly payments blank so you can customize each sign to its property. It’s worth the extra effort and it generates more leads. Be sure to follow Real estate Settlement Procedures Act (RESPA) guides and include the annual percentage rate (APR), the loan type and terms of the loan.

4. Brochures Create a personal brochure for potential buyers. 5. Homebuyer guides Publish informational homebuyer guides, educating clients about homeownership. I highly recommend to help you with your marketing efforts. True to their name, no company in the country provides more tools for the originator looking to grow their business. With just a few clicks, you can create powerful marketing pieces, and then get back to what you do best: Originating loans.

The FHA Streamline K Finally, I want to make you aware of the enormous market that exists right now in many metropolitan areas for an FHA product called the Streamline K. Also known as the “Baby K,” this is a 203k rehabilitation loan for primary occupants only. The loan allows the buyer to finance up to $35,000 for the purpose of cosmetic repairs only. Some items eligible for financing include: Kitchens, bathrooms, roofing, windows and even appliances (sorry, no wall mounted plasma TVs). For further information, go to and search for HUD Handbook 4155.2 and Mortgagee Letter 2005-50. For a full list of 203k Mortgagee Letters, visit 3kltrs.cfm. This product has tremendous potential for two major reasons: One, the banks that price their REO properties too high leave little or no room for investor profit. Two, there are more consumers than investors available to

purchase these homes. The Streamline K has the potential to be a key factor in improving neighborhoods: It allows the investor’s buyers to use government funds to finance renovations, it puts a primary occupant in the home (rather than a renter), and it leaves the buyer with a great loan product. Fellow originators … you have a great opportunity to create a very profitable and stable niche for yourselves by creating a group of investors who rely on you to help them finance the

buyers of their homes. Create an plan of action for 2011 to develop your network of real estate investors. 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 and creator of The FHA Originator, a monthly FHA newsletter. Jeff may be reached by phone at (248) 4038181 or visit

Remembering the REO Basics By David Shelton

Evaluating performance One thing that I was taught and have never forgotten is that you cannot manage what you cannot measure. You have to know if your disposition strategies are working effectively so that adjustments can be made as needed to maximize performance. We constantly evaluate our performance and the performance of our partners (agents, closing companies and valuation specialists) against a standard for our key performance indicators. While a number of areas are tracked, our key measurements for the disposition process are average days on the market, average sales price to list price, continued on page 30


You notice that I said “reasonable” rather than “accurate.” I really don’t know how to determine if a broker price opinion (BPO) or appraisal value is accurate; only if it is reasonable. Experience shows that

It doesn’t matter if you manage your inventory in-house or outsource to asset management companies, you have to rely on partners nearby the property. We have found that the key partnership is in selecting the right listing agent for the property. It seems

The age old question … do we rehab the property? If so, to what extent? What kind of repairs are really necessary? The old adage of “throwing good money after bad” is true so you have to be careful. Likewise, “you have to spend money to make money” is also true, but again, you have to be careful. The key is to understand which one applies so that you are making an investment rather than incurring an added expense. I have worked with institutions that had hard and fast policies on REO repairs and rehab. I worked with one that wanted every property rehabbed to “AS IS” means “AS IS,” and outside of required preservation, wouldn’t spend a dime. Neither had any real flexibility. In today’s market, common sense, flexibility and good judgment are the keys to maximizing value on your REO sales. Extremes in either direction will end up costing you money. You have a lot of information available to you to assist in making these decisions that may not be obvious. For example, a good BPO will tell you, based on prop-



carefully Obtain reasonable valuations

Maximize value

erty condition, value and location, who the most likely buyer will be. Are we marketing to an investor or an owner occupant? The agent will provide recommendations as to the minimum repairs needed to attract the target buyer. The BPO should also tell you if the property will qualify for most financing types in its current condition, and if not, what issues must be addressed in order to qualify. Additional information is available in the BPO that can be used to solidify your decision. Is the neighborhood stable or on the decline? How many properties are currently for sale in the area and how many of these properties are REOs? Are there boarded up properties in the immediate vicinity, and if so, how many? What is the percentage of rental properties compared to owner/occupied properties in the neighborhood? Use the information available to identify your target market and understand what is necessary to meet the needs of that market. For years, the primary market for REOs was investors. Over the past few years, we have seen a large increase in the number of buyers looking to purchase a primary home. Sales to owner occupants are generally going to bring a higher sales price, but there are also generally more issues to be addressed on these sales. Most homebuyers are going to require financing. While you can get the buyer to insure that they have the required funds for downpayments and a pre-approval from a reputable lender, the property also has to qualify for the loan. By recognizing and addressing any property issues that would limit financing upfront, not only are you going to save time in getting the deal closed, but will often generate higher offers. Your asset managers need the information to develop an effective marketing plan for each property and the flexibility to implement it. 

It was probably 1974 when I managed if you have a reasonable valuation, you my first real estate-owned (REO) prop- most likely also have an accurate one. erty. Foreclosures were rare and there We determine reasonableness by reviewwas plenty of time to give individual ing the valuation for certain factors. Are attention to each REO asset. How times the sold and listed comps used really have changed! The one thing that has- comparable to the subject property? Are n’t changed for anyone managing an the comps the same age, style, condition REO portfolio is the need to dispose of and location? Are the sold comps used the inventory as quickly as possible, reflecting current sale dates or stale? while at the same time, maximizing How long have listed comps been on the market? Have reasonable recovery. Which of these adjustments been made two areas takes priority for differences in the at any given time is based comps used and the subon the makeup of your ject property? We are sellportfolio and internal ing an REO … are we using goals. Your marketing REO comps? Because havstrategies will be formuing a high confidence level lated based on that priorin the valuation is so critiity. As your inventory cal to pricing, we always swells, every market recommend getting multiseems to be saturated ple valuations. A little with REOs, and everyextra money spent in this thing starts getting really area can make a big differcomplicated, it is tempt“By recognizing and ence in your overall recoving to start looking for a addressing any propery rates. I have worked in gimmick. Oftentimes, the erty issues that would environments where the key to keeping things limit financing acceptable sales prices manageable is simply upfront, not only are were based on a percentremembering the basics. you going to save time age of the remaining prinI’ve broken this down in getting the deal cipal balance of the loan. into some areas that I closed, but will often In today’s market, I believe think every REO manager must consider. generate higher offers.” that acceptable sales prices must better reflect the current local market 1. Obtain reasonable valuations and price your properties to conditions and pricing set based on current valuations. Otherwise, your properreflect current market conditions. 2. Choose the right partner for the job. ties sit and carrying costs escalate. 3. Maximize value. Choose your partners 4. Evaluate performance.

that today, every agent out there wants to be an REO agent. That is understandable since that is where the sales are, but wanting to sell REOs and being qualified to sell REOs is very different. It’s kind of like the dentist from the United Kingdom that I met a couple of years ago while on vacation. He told me that Botox injections were all the latest rage in the UK and a lot of money was being made. He was going to take a two-day training course and start administering Botox. Maybe there are some folks out there that will get Botox injections from a dentist, but I think I’ll pass! In addition to understanding local market conditions and the special challenges associated with marketing REOs, a good REO agent is also up to date on the latest code requirements, vacant property registration requirements, city-required inspections and all of the other ever-changing local requirements for REO/vacant properties. Keeping the property in compliance with local codes and requirements can save the seller a lot of unnecessary expense from fines and assessments, as well as keep the migraines to a minimum. We have a number of agents that do a great job selling properties in the $30,000-$150,000 range but do not do well on the highend luxury properties. Other agents are great on the high-end, but not on the average properties. To obtain the best results, we always want to use the specialists.

average sales price to valuation, and average days to close once under contract. These measurements are drilled down to the individual agent, title/closing company, or appraiser level and allow us to base our partnership decisions on objective data. This also allows us to recognize when we need to modify our processes or partner relationships to meet specific client needs. With everyone from the federal government to local municipalities and homeowners associations (HOAs) getting involved and imposing obstacles to the REO management process, you will

certainly continue to be thrown curveballs and flexibility will be required. In this ever-changing environment, a continued focus on the basics will generally serve you well. Keep in mind, you can try the trick plays, but it is more often the best blocking and tackling that wins the close games. David Shelton is chief operating officer of Turnkey Asset Management Solutions in Newport, Ky. Turnkey manages the preservation, valuation, and disposition of REO properties on a nationwide basis. He may be reached by phone at (859) 815-6905 or e-mail

Structuring Effectively for REO Disposition By Derrick Logan




We are now three years into the that’s if the shadow inventory doesn’t nation’s retreat from historically high set off another round of foreclosures. Fortunately, things are changing. homeownership rates, with millions of homes transferring out of the hands of delinquent borrowers and back into A new approach to REO the banks that held their mortgages. In It was at the National Property the third quarter of last year, the last Preservation Conference in November period for which data is currently avail- that the U.S. Department of Housing & able, the Mortgage Bankers Association Urban Development (HUD) reiterated its (MBA) reported that 13.78 percent of all plans to split its property preservation and asset management borrowers were either in groups into separate foreclosure or at least one departments. It was a payment behind on their move that put the federal mortgage. agency in line with the The MBA has estimated best of the industry’s asset that nearly two million management companies bank-owned properties and one that will likely were on the market at the make the agency more end of 2010, with twice successful in the future. that many at least 90 days Until recently, the delinquent and heading two departments operatdown the path to forecloed as a single unit within sure. Guhan Venkatu of “The truth is that the HUD. Separating properthe Federal Reserve Bank structure of an REO ty preservation and asset of Cleveland has estimated that the shadow inven- asset management firm management is a strong move that will allow tory, those real estatemust be a reflection of HUD to deal more effecowned (REO) properties how it approaches the tively with the influx of that banks already own work it does.” foreclosures, disposing but have not yet released of properties faster and into the market, accounts more efficiently than in the past. for another four million or so homes. There was a time when the older That many homes would take well over a year to sell in the current envi- model made sense and many asset manronment. RealtyTrac reported last year agers utilized a similar internal structure. that roughly one-quarter to one-third With fewer REO properties to deal with, of all real estate sales in the first half of companies could operate with smaller 2010 were homes in some state of fore- teams and cross-train them for increased closure. If nothing changes, it could efficiency. But it makes much less sense in take years for the industry to cycle today’s market. Today’s asset managers are flooded through the REO lot that we already have coming into the market, and with properties, many of which are

either already in a state of disrepair or at risk of becoming so. Banks are taking back homes of every description in neighborhoods of every kind all over the country. There are critical tasks that must be completed for both preservation and disposition of the REO. With the work coming in so rapidly, it would be easy to overload and overwhelm a firm that tried to accomplish both functions within the same department. Over the past 18 months, most companies working in this space have found that there is sufficient work to employ full-time teams in both areas. In fact, because of the time-related expenses involved, it makes good sense to do so. Time is a critical concern in this business. The longer a non-performing asset is held in portfolio, the more money is sacrificed on a daily basis.

An effective structure for success Over the past 13 years, we have been developing the systems in use my company, REO Allegiance. We believe that HUD’s move to separate these two departments will make the agency more effective because we have become more effective and successful when we began to separate the various functions that go into the work we do for servicers and investors. But HUD’s move is only the beginning. With today’s high REO volume and the need to dispose of every property as quickly as possible, it is imperative that asset managers isolate every critical function required for both property preservation and REO disposition and scrutinize the processes that lead to successful outcomes. When this is done, it becomes clear that there is a single set of steps that leads to the optimum outcome in the shortest period of time. In fact, the goal is to visualize the workflow as a sequence of steps leading directly to accomplishing that goal. In the end, the best companies have found that separating property preservation from REO disposition is only the beginning. When we consider the work pertaining to property preservation, the goal is clearly to protect and preserve the property. To achieve this goal, the work required for each property must flow through several departments, each with its own specific list of tasks. For instance, in our firm, we utilize an order placement team, a property preservation team, a quality assurance team, a recurring service team and an eviction team. There are also auxiliary functions that must be considered, such as vacant property registration and utility management.

By breaking the work down and distributing it effectively across these teams, we’re able to process thousands of orders at any given time efficiently and without errors. On the other side of our business, REO disposition has its own set of complicated issues that must be carefully analyzed and then managed to achieve the goal of 100 percent REO disposition. To meet that goal, real estate brokers are assigned, marketing plans are formulated, a selling price is agreed upon for each property, contracts and closing issues are resolved, rehabilitation issues may be referred back to us for preservation and many other tasks and processes must be accomplished quickly and correctly. It doesn’t make sense for all of these functions to reside within the same department in an environment like the one we’re experiencing today. Of course anytime you decentralize any operation, communications and information technology become critical concerns. Without the right technology to keep information flowing freely across the enterprise, firms with any number of departments are just as sure to fail. To be successful, it’s important that the company’s IT specialists also have a complete understanding of REO preservation and disposition.

The perfect structure for success Given this discussion, it may yet be unclear how many departments it actually takes to be effective at both maintaining properties and effectively disposing of bank-owned real estate. There can be no question that structuring a firm to deal effectively with the work it will face as it fulfills its function is an important part of being an industry leader. At REO Allegiance, we’ve spent a great deal of time and effort making sure that our structure is conducive to efficiency and error-free operation. The truth is that the structure of an REO asset management firm must be a reflection of how it approaches the work it does. Firms that take a specialist’s approach to their business are likely to have more departments, each focused on the critical tasks that are crucial to their part of the business. It will be interesting to see what HUD does next in regard to their portfolio of real estate. It’s heartening to see that the agency has taken the first step in the right direction. Derrick Logan is director of business development of Bayonne, N.J.-based REO Allegiance, a nationwide property preservation and eviction services company. He may be reached by phone at (201) 746-8734, email or visit

The Need for Transparency Has Never Been Greater By Damien Chiodo

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as open and honest as possible. The local Broker is usually the only contact a borrower will have with an industry professional. It hasn’t helped that the agenda gap between servicer and agent continues to widen, even while real estate agents are the group that servicers depend upon the most to carry out their initiatives. That’s why, if we are to change the perception of our industry, it must be on a local level. This is the key point that most financial institutions have missed. After all, it does no good to have lofty initiatives if the people you are asking to carry them out, simply don’t care. So, how do servicers and banks get local agents to comply with their initiatives? A good place to start would be the traditional stance of non-disclosure that is widely accepted as the norm in real estate markets across the country. I don’t know how or why someone convinced all real estate agents that nondisclosure was the only way to uphold their fiduciary duty to their clients. A closed door policy will never calm the nerves of the consumer. This practice has made it more difficult for families to buy an REO property during what should have been one of the more satisfying half decades for first-time homebuyers. Non-disclosure has propped open the door and let agent fraud and deception stroll right in. It has eliminated the fairness and honesty in what should be a completely transparent process. After all, we are selling someone’s dreams, not widgets. If I make a transaction involving a 30-year commitment and my life savings, I want it to be totally transparent. I first fell in love with the idea of transparency as a rookie REO broker. I couldn’t understand why agents would fail to return calls, be courteous or disclose offers. When I finally got my first REO listing, I was determined to not be one of those agents. I listed the home on the local MLS and included the remarks “open negotiation and proactive communication is encouraged, call agent anytime for the current highest offer.” Not so stunningly, I received a call days later from my local MLS association. Apparently, a rival agent didn’t like my philosophy of total openness and had called her local association to complain. 

Years from now, when all of the real estate-owned (REO) agents, asset managers, vice presidents and directors are back to originating loans, will we have learned anything? Ironically, many of the same leaders in the default industry had a hand in a lot of the originations that ultimately became foreclosures. I certainly applaud those individuals for evolving with the market. Heck, I am one of those individuals. But I didn’t write this piece to scold bad mortgage bankers or real estate agents. Every industry has its good and bad apples. My question is simple … What can we, the people on the front lines, do to better our industry? Servicers and banks have certainly at least appeared to do their share. Under the direction of the Obama Administration, the government-sponsored enterprises (GSEs) have been able to slow the bleeding and curb the drastic reduction in property values by slowly releasing their bankowned inventory to the market. Servicers and banks around the world have increased their staff and have changed their policies to accommodate the wave of underwater borrowers in their portfolios. Short sales are being conducted three times faster than they were just two years ago and 10 times faster than they were just four years ago. Laws have changed to give more relief and options to tenants who are victims of foreclosure. The regulations and requirements needed to originate loans have increased as well. In other words, lots of things have been and are being done to improve the current process. But while progress has been made, our industry has never been seen in such a skeptical, negative light as it is viewed now. Considering the past reputation of the financial industry, that’s saying a lot. Loan officers and real estate agents have often been generalized as “overpaid crooks.” To the general public, loan originators and agents just fill out some forms, make some calls and get paid thousands of dollars to do it. Well, 80 percent of the time they’re right. After all, we are all aware of the 80/20 rule. Whether you think that’s true or not is irrelevant. It’s clear we have a lot of work to do if we ever want to erase the negative stigma that our industry carries. A home purchase is the single most important investment most people will make in their lives. As an industry, we owe it to the public to make that process

It seems that the supposed stan- tion of an entire industry and gain the dards of real estate negotiation had trust of a public that stopped believing become so jaded, that even the associ- anything we had to say years ago. ation responsible for its policing Even Fannie Mae has recently thought the “radical” idea of full disclo- released an online portal where buyers sure was illegal or against its rules. It and their agents submit offers directly was at that moment that I realized the to the seller, bypassing the listing agent industry needed a breath of fresh air. all together. I can only assume that they Eventually, I got my felt it necessary to put this way and I continued on portal in place after years with my transparent of struggling to get local model. It was pretty clear listing agents to comply that by being transparent, with their agenda. I was swimming against It’s time that we all chalthe current. lenge ourselves to be proNever one to join the active in finding ways to herd, I instructed my entire improve the process of buystaff to conduct business in ing and selling real estate a transparent fashion. We on a local level. Ultimately, created disclosures that no matter what actions seroutlined our written policy vicers take to improve perand philosophy of total “My question is simformance and execution, it transparency. We felt that won’t matter if we don’t ple … What can we, while we couldn’t change gain the confidence of the the people on the an entire industry, we front lines, do to betcommon consumer. could certainly set an Albert Einstein said, “The ter our industry?” example. And truthfully, significant problems we the multi-offer process face cannot be solved at the became a lot more fun. The agents and same level of thinking we were at when we buyers I worked with were grateful for a created them.” I’m not about to pick a stress-free process, where they knew the fight with Albert Einstein … I’ve already stakes from start to finish and nothing was picked a fight with an entire industry. concealed or withheld. We felt good about the way we conducted business. Damien Chiodo is managing director Since then, I have urged everyone I and founder of KeyLink Asset have come in contact with to do busi- Management. He may be reached by eness this way, knowing that with each mail at sale, we can slowly change the percep- or visit www.

regulatory compliance outlook

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F. A statement that the consumer is encouraged to verify the accuracy of the information contained in the consumer report and has the right to dispute any inaccurate information in the report; G. A statement that federal law gives the consumer the right to obtain copies of his or her consumer reports directly from the consumer reporting agencies, including a free report from each of the nationwide consumer reporting agencies once during any 12-month period; H. Contact information for the centralized source from which consumers may obtain their free annual consumer reports; and I. A statement directing consumers to the Web sites of the Federal Reserve Board and Federal Trade Commission to obtain more information about consumer reports.



The following documents may be downloaded from the FCRA/FACTA section of our firm’s Web site Library (  Fair Credit Reporting Risk-Based Pricing Regulations, Final Rule, FR 75/10 (01/15/10)  Fair Credit Reporting Risk-Based Pricing Regulations - Agency Notice (12/28/09)  Model Forms—Risk-Based Pricing, Agency Notice (12/28/09)  Fair Credit Reporting Risk-Based Pricing Regulations: Correction, FR 73/104 (05/29/08)  Fair Credit Reporting Risk-Based Pricing Regulations, Proposed Rule, FR 73/97 (05/19/08)

Submit your questions … Do you have a regulatory compliance issue that you’d like to see addressed in the Regulatory Compliance Outlook Column? If so, e-mail your issue or concern to Jonathan Foxx at Jonathan Foxx, former chief compliance officer for two of the country’s top publicly-traded residential mortgage loan originators, is the president and managing director of Lenders Compliance Group, a mortgage risk management firm devoted to providing regulatory compliance advice and counsel to the mortgage industry. He may be contacted at (516) 442-3456 or by e-mail at



5) Credit score not available: a creditor is not required to provide a risk-based pricing notice to a consumer17 if the creditor: I. Regularly obtains credit scores from a consumer reporting agency and provides credit score disclosures to consumers in accordance with the final rule, but a credit score is not available from the consumer reporting agency from which the creditor regularly obtains credit scores for a consumer to whom the creditor grants, extends, or provides credit; II. Does not obtain a credit score from another consumer reporting agency in connection with granting, extending, or providing credit to the consumer; and III. Provides to the consumer a notice that contains the following:  A statement that a consumer report (or credit report) includes information about the consumer’s credit history and the type of information included in that history;  A statement that a credit score is a number that takes into account information in a consumer report and that a credit score can change over time in response to changes in the consumer’s credit history;  A statement that credit scores are important because consumers with higher credit scores generally obtain more favorable credit terms;  A statement that not having a credit score can affect whether the consumer can obtain credit and what the cost of that credit will be;  A statement that a credit score about the consumer was not available from

a consumer reporting agency, which must be identified by name, generally due to insufficient information regarding the consumer’s credit history; A statement that the consumer is encouraged to verify the accuracy of the information contained in the consumer report and has the right to dispute any inaccurate information in the consumer report; A statement that federal law gives the consumer the right to obtain copies of his or her consumer reports directly from the consumer reporting agencies, including a free consumer report from each of the nationwide consumer reporting agencies once during any 12-month period; The contact information for the centralized source from which consumers may obtain their free annual consumer reports; and A statement directing consumers to the web sites of the Board and Federal Trade Commission to obtain more information about consumer reports.

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rida L ss: ut of Flo hem e: O r Bo c S e d v u age Fra erco s M o rtg Un d ast Texa E r jo a M 203(k) Rehab Loan Program: Foreclosures Present Challenges, Opportunity NMLS an d St ate Testing fo r Mortgage Pr ofessionals

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1—This outline is based on information provided in “Fair Credit Reporting RiskBased Pricing Regulations,” Federal Register, 75/10, 01/15/2010, Rules and Regulations, pp. 2724-2784. The FTC is placing the final regulations and guidelines in the part of its regulations implementing the FCRA, specifically 16 CFR Part 640. This is the source document used herein for citations. 2—See 12 CFR 226.17(c) and 226.18(e). 3—Op. cit. 1, p. 2753. 4—That is, one or more credit products with similar features that are designed for similar purposes. 5—The credit score proxy method must be used to recalculate the cutoff score(s) no less than every two years, by considering the credit scores of all or a representative sample of the consumers to whom it has granted, extended, or provided credit for a specific type of credit product, or within one year after using a cutoff score derived from market research, third-party data, or information from a party which it acquired, with which it merged, or from which it acquired the portfolio. 6—Op. Cit. 1, p 2754. Actual example is in the Federal Register. 7—Idem, Actual example is in the Federal Register. 8—RBP Disclosures are provided before the first transaction is made under the HELOC plan, but not earlier than the time the creditor communicates to the borrower its approval decision. 9—Op. Cit. 1, Part 698-Model Forms and Disclosures, Appendix B(3), p 2776. Any rearrangement or modification of the language of the model forms “may not be so extensive as to materially affect the substance, clarity, comprehensibility, or meaningful sequence of the forms.” 10—Pursuant to § 640.3(a) or (c). 11—‘‘Specific material terms’’ means a single material term, or set of material terms, such as an annual percentage rate of 10 percent, and not a range of alternatives, such as an annual percentage rate that may be eight percent, 10 percent, or 12 percent, or between eight percent and 12 percent. 12—Pursuant to § 640.3(a), (c), or (d). 13—FCRA § 615. Requirements on users of consumer reports (15 U.S.C. § 1681m), (a) Duties of users taking adverse actions on the basis of information contained in consumer reports. 14—Pursuant to § 640.3(a) or (c). 15—Pursuant to § 640.3(a) or (c). 16—FCRA § 609. Disclosures to consumers (15 U.S.C. § 1681g), (g) Disclosure of Credit Scores by Certain Mortgage Lenders. 17—Pursuant to § 640.3(a) or (c).

new to market

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Depending on each user’s RiskBased Pricing policy, they can select any of the five pre-formatted letters available. Letters automatically populate with information specific to the type of notice and transaction. For transactions with more than one applicant, multiple applicant-specific letters are generated, as required by the regulations. For users who access Kroll Factual Data’s services directly through the internet, pre-formatted notices are available directly from each credit report. For those who access services via a system integration, three options are available, depending on the system, including: notices appended to the credit report; inclusion of customer score rank, score model percentile data and the disclosure as a Portable Document Format (PDF); or as a Hypertext Markup Language (HTML). The optional mail fulfillment service relieves clients’ operational staff of the burden of printing and mailing letters to applicants. Monthly management reports included with this service provide standardized, ongoing documentation to easily demonstrate compliance in response to an audit. For more information, visit

New HUD Web Site Provides In-Depth Economic and Housing Market Data

Headlines and breaking news from

Headlines and blogs from around the web.


continued on page 34



 ”Market at a Glance” reports contain economic and housing market data trends for every metropolitan area and county nationwide with employment data updated on a monthly basis. Employment data is provided from the Bureau of Labor Statistics and housing data is derived from the Census Bureau’s American Community Survey. Some adjustments are made by HUD field economists based on regional information. The data are expected to be released on monthly basis for most of the metropolitan areas and counties. Eventually these reports will become “live” documents enabling field economists to include analysis as they complete more in-depth research for specific areas and monitor local conditions.  “Regional Housing Market Profiles” are based on the quarterly U.S. Housing Market Conditions report and include non-farm employment, population changes, and building activity. These regional profiles also focus on the most recent housing rental and sales activity for the past two years. In addition, approximately 10-12 individual metropolitan areas are specifically profiled each quarter to provide these same data down to the metro area level.  “Regional Narratives” are broad overviews of economic and housing market trends within ten regions of the U.S. These narratives are based on information obtained by HUD economists from state and local governments, from housing industry sources, and from their ongoing investigations of housing market conditions.  “Comprehensive Housing Market Analysis:” Periodically, HUD field economists focus on particular metropolitan housing markets to produce counts and estimates of employment, population, households, and housing inventory. Each housing market analysis considers changes in the economic, demographic, and housing inventory characteristics during three periods: from 1990 to 2000; from 2000 to the as-of date of the analysis; and from the as-of date to up to up three years in the future. For more information, visit 

The U.S. Department of Housing & Urban Development (HUD) has unveiled a new Web site that consolidates a wide variety of economic and housing market data at the regional, state, metropolitan area and county levels. Using data from the U.S. Census Bureau, U.S. Department of Labor Department, state and local governments, housing industry sources, as well as HUD’s own field economists, the new site,, employs interactive maps that allow visitors to access a variety of reports— from a region-wide look at employment and housing activity to individual county-level figures on population trends, rental activity and vacancy rates. “This is a powerful new tool that’s easy to use and offers the public a remarkable look at their local economic and housing markets,” said Dr. Raphael Bostic, HUD’s Assistant Secretary for Policy Development and Research. “Current and reliable data shouldn’t be hard to come by. This is precisely why this site will be so helpful to state and local leaders, developers, the real estate industry, and the general public who need the latest available

data on their markets.” HUD’s new site displays an interactive map of the U.S. allowing visitors an intuitive way to seek data in a number of areas of geography—from an entire region down to a particular county. In particular, the portal offers the following reports:

new to market managing in the brave new world of mortgage finance attend the 28th Annual Regional Conference of Mortgage Bankers Associations March 15 - 17, 2011 Trump Taj Mahal Casino Resort, Atlantic City, NJ For The First Time: The Residential Program Will Include A Commercial Track So That Attendees Will Have A Choice As To Which Sessions To Attend. Both Cocktail Receptions And The Exhibit Hall Will Be For Both Residential And Commercial Programs.

Tuesday Opening Residential Networking Cocktail Reception in the Exhibit Hall

Wednesday General Session Topics The Future of the Securitization Market, Risk Retention, TBA Market, Reforming the GSE’s, Government Guarantees & More MBA’s Report on Current Legislative/Regulatory Issues Banks in the Mortgage Market How to Use Social Networking: Facebook, Twitter, LO Websites, Blogs


Exhibit Hall with Lunch Afternoon Session Topics LO & Broker Compensation Labor Law Issues (LO Overtime, Department Of Labor Opinion, Minimum Wage)



Mortgage Bankers & Financial Institutions Panel: Independent Mortgage Bankers Mortgage Brokers (FHA Business, Use Of Compare Ratio’s, Etc.) Regulators Roundtable Regulators from NJ, PA & NY Mortgage Fraud Panel: How To Detect And Avoid Mortgage Fraud Networking Cocktail Reception

Thursday Critical Issues Day An in Depth Look at Financial Regulatory Reform LO Compensation Risk Retention Ability To Repay CFPB Regulations Fed Reserve Rules SAFE Act And Related Issues MI’s: Future Of The Private MI Industry Residential Mortgage Lending For Financial Institutions Subsidiary vs. Division Registration Of LO’s Obtaining HUD Approval Investor Approvals Underwriting A View From The Regulators: OCC, FDIC, State Reg

For Registration Information visit

continued from page 33

Mortgage Contracting Services Launches New Photo Inspection Feature Mortgage Contracting Services LLC (MCS), a provider of property preservation, inspections and real estateowned (REO) property maintenance to the financial services industry, has announced that it now provides photo inspection services to supplement the traditional data required for valuations, proof of property condition and other verification reporting. MCS’ photo inspection capabilities add value to several industry practices, including appraisals for valuation providers, substantiation of policies for insurance companies, confirmation of a property’s existence and condition, as well as fulfillment of re-certification or due diligence requirements for origination and servicing shops. These parties have historically relied on local field contractors to provide necessary photo documentation, but have been challenged with securing coverage in all areas, especially for minimal cost and quick turnaround. MCS is positioned to alleviate those concerns as it maintains a nationwide network of inspection subcontractors to improve workflow processes and provide clients with cost savings. “MCS strives to be proactive in providing solutions to the needs of its clients. Photo evidence of a property and its condition is a critical validation measure to support written documentation and provide depth to any form of reporting,” said Caroline Reaves, chief executive officer of MCS. For more information, visit

CoreLogic Introduces Fraud Management Platform CoreLogic, a provider of consumer, financial and property information and business services, introduced the next generation of LoanSafe Fraud Manager, a customizable platform that builds upon the CoreLogic LoanSafe Fraud Manager and empowers lenders with more access, speed and control over their fraud management systems. LoanSafe Fraud Manager leverages patented pattern recognition technology and offers comprehensive business intelligence and decision-making by harmonizing data, analytics, policy, strategy and operational workflow. This Web-based platform makes mortgage fraud prevention easily adaptable by fraud managers by minimizing reliance on information technology departments to address the everyday needs of fraud prevention teams. “CoreLogic is again raising the bar on

fraud by giving lenders the power to adapt their strategies and policies to respond within minutes as new fraud schemes appear,” said Tim Grace, senior vice president, Fraud Analytics, at CoreLogic. “New and sophisticated mortgage fraud schemes can emerge overnight. We want to empower lenders to be able to stop those schemes through their own flash fraud rules and alerts. With next generation LoanSafe Fraud Manager, lenders can change their rules, add an alert or change a workflow within minutes of finding a new fraud trend.” Once lenders have identified the population of loans that most need attention, LoanSafe Fraud Manager prioritizes and determines the optimal action steps needed for each. The fraud manager’s ability to create strategies that combine scores and alerts along with action steps for the analyst that are specific to each lender’s best practices helps ensure that the optimal group of loans is worked in the best way in every instance. Operational workflow is optimized by ensuring fraud prevention is repeatable and reproducible every time, as directed by the system and the lender-supplied best practices. An interactive workspace presents loan, borrower and collateral information within an easy to use browser-based interface. This workspace includes clickable, drill down information on all relevant fields (e.g., Social Security number, address, phone, etc.) and gives access to a customizable menu of third-party tools (e.g., maps, verifications, reverse lookups, etc). Next generation LoanSafe Manager includes userfriendly screens that summarize integrated loan risks, integrated risk action and disposition details. LoanSafe Fraud Manager offers flexible integration with internal and external systems while minimizing IT involvement. A white paper on “The Next Generation of Fraud Management” provides more detail on limitations of current fraud prevention technologies and how lenders can now be in control of their fraud prevention management system. For additional information, please visit For more information, visit

Hartford National Title Launches Free GFE and HUD-1 Calculator

Hartford National Title Inc., a provider of title insurance and real estate closing services, has announced the launch of OneSourceQuote, its new Good Faith Estimate (GFE) and HUD-1 title calcula-

Equator Releases Invoice Solution for Mortgage Servicers Equator, a provider of default servicing solutions, has announced the launch of its EQ Invoice Module for the servicing industry. Using a rules-based approach, the system simplifies the invoicing process and expedites reimbursements. Servicers can easily configure different rules per portfolio and communicate with agents and vendors online to streamline the approval process. Equator’s Invoice Module has an intuitive workflow that instructs users on which actions to take and when to

fulfill each task. Automated workflow decisions are based on client configurable factors such as duplication, frequency and dollar amounts of claims, enabling custom rule sets to be established for each portfolio. Pre-determined value thresholds and automated decisioning result in quicker reimbursements for invoices complying with these specific terms. Additionally, the solution rapidly identifies invoices that should be rejected and addressed on an individual basis. “The Equator platform has allowed agents and vendors to submit expenses for years,” said Chris Saitta, Equator chief executive officer. “Now, rather than pass expenses to other systems,

they can easily be reviewed and approved right in Equator. This streamlines approvals and makes the expense data readily available for strategy decisions.” The EQ Invoice Module is available for all existing Equator clients as well as companies that have yet to leverage Equator’s solutions. Users benefit from a full investor-based rules engine and a complete end-to-end paper trail providing them with unprecedented audit control. They can also set autoapproval thresholds for the system to immediately approve invoices that fall within the specified parameters, saving continued on page 36

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tor. This free online application is the byproduct of many months’ worth of developmental efforts and testing by programmers, staff, and beta clients. OneSourceQuote provides users with the reissue rate calculation on refinances and exact recording fees through an integration with a national recording database that is updated daily. These two features ensure that lenders and mortgage brokers using the calculator will not be “over-disclosing” by providing a borrower with higherthan-actual settlement charges on the GFE. OneSourceQuote was developed due to the lack of free, accurate title calculators available to mortgage brokers and retail lenders. With increased disclosure standards required by the changes to the Real Estate Settlement Procedures Act (RESPA), which were implemented in January 2010, it is now more critical than ever for mortgage brokers and lenders to accurately estimate the closing costs and fees for all real estate transactions. “With the onset of the new GFE we realized that there was a real need for an accurate title calculator for the mortgage broker and lender communities,” said Beth Grassette, in-house counsel for Hartford National Title. “The complexity of the closing cost estimation process, especially when conducting business in multiple states, is such that even small errors could cost an originator thousands of dollars as well as credibility in the marketplace. We conducted extensive research on existing calculators, but did not find one that we considered a viable solution. Therefore, we built our own Good Faith Estimate (GFE) and HUD-1 title calculator that we feel best satisfies the requirements of RESPA and mitigates risk for mortgage originators.” Hartford National Title guarantees its online application to be accurate, and will bear the financial responsibility for any errors in calculations when the Company is being used to close and insure the transaction. Hartford National Title’s calculator utilizes integration with Ernst Publishing Company’s Real Estate Recording Calculator, which is considered the gold standard for recording fee calculations. Hartford National Title’s calculator will estimate all state, city, and county recording fees and taxes, transfer taxes and stamps, title services, and title insurance costs and will automatically update in the event a municipality changes its recording fees or other costs. Other important features of the calculator include: One-click ordering for title services, documentation and recording notes that provide all necessary legal requirements, and a PDF output that provides the quote in both a GFE and HUD-1 format for use by originators. For more information, visit

new to market

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time and money. Agents and vendors can easily submit and track invoices, ultimately resulting in faster approvals and payments. For more information, visit

MDA DataQuick Updates Its PropertyFinder 2G Research Tool MDA DataQuick, a division of MDA Lending Solutions,

has updated its PropertyFinder 2G, the company’s flagship property and ownership research tool. MDA DataQuick PropertyFinder 2G gives real estate professionals and title companies access to a nationwide database of detailed property and ownership information, which includes property profiles, sales comparables, demographic information and property history. To support the increase in distressed properties on the market, PropertyFinder 2G now offers expand-

ed property history details on distressed sales transactions. Users can more accurately track activities, such as notice of default, notice of trustee sale, or short sale as well as the transaction that led to the activity. “In today’s economy and housing market, the number of properties in some stage of default is at historical highs,” said John Walsh, president of MDA DataQuick. “Whether the property is REO or in default, real estate professionals and title companies need a clear understanding of the property history. With PropertyFinder2G, users identify distressed properties and make quicker, more accurate decisions, while providing their clients

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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



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 p ri c in g, I will give you a $ 10 Starbuck s gift card. helps to improve your company's communications,

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with a professional, easy-to-read report.” PropertyFinder 2G’s expanded history also adds loan assignment transactions and flags suspicious property transactions, such as unusually large changes in price or properties with multiple sales in less than 30 days. Instead of personally visiting county offices, users can search online for single or multiple properties with a diverse range of functions, such as text, document, or Google map search. Typeahead technology within PropertyFinder 2G makes search criteria entry quicker. Real estate professionals manage their real-time search results in customizable, professional reports and sales comparables that can include a cover page, photos, Web links and notations. Report editing makes adding and modifying sales comparables, schools, or businesses easier, and report archive eliminates the need to reproduce a report. Reports can be e-mailed, opened as an Adobe PDF document, or downloaded to Excel. For more information, visit, or

ServiceLink Announces New Default Solution Options ServiceLink, a provider of origination and defaultrelated solutions and technology has announced its new comprehensive default solution. This solution empowers servicers to bridge their current technology to ServiceLink’s optimized loss mitigation and default technology and outsourcing services. ServiceLink is well-prepared to manage to the quickly shifting regulatory guidelines, quality control, and audit requirements around workout options from HAMP processing through foreclosure. ServiceLink’s wrap-around technology solutions, combined with proven loss mitigation and disposition processes, allows them to assist servicers throughout the entire default process. Their Commerce Velocity technology aggregates all pertinent information, analyzes the data based on the customized rules, and provides the optimal workout decision from the point of default. This technology also provides business users the ability to manage workflow changes, regulatory rule changes and other product changes instantaneously. Combined with customized outsourcing components including HAMP processing, loan modifications, short sale, and deed in lieu, ServiceLink can provide capacity on a continual or as-needed basis, acting as an extension of the servicer’s organization. “The goal of our complete default solution is to help servicers and investors make the optimal workout

decision while maximizing asset value and remaining in compliance,” said Jeff Coury, president and chief executive officer of ServiceLink. “Our Commerce Velocity technology, along with our proven products and services, eliminates the need for manual tracking and auditing or reporting in disparate systems. All loan workout rules, programs and processes are maintained through a single wraparound application.” For more information, visit

vides sales managers strategies in business planning, recruiting and retention of loan officers, coaching skills and sales force management tactics. In addition to these programs, XINNIX provides clients with a host of training services on a monthly basis for loan officers and managers. For more information, visit

GCC Servicing Systems Launches Electronic Payment Assistance Module GCC Servicing Systems,

XINNIX Offers Comprehensive a provider of mortgage servicing technology Complete Loan Application and solutions, has announced the addition Online Class

important for mortgage loan servicers to be prepared to handle electronic payments,” said Glenn Liebowitz, president of GCC. “The Unapplied Payment Tracking Module was created to help our clients manage electronic payments that present processing issues. Errors typically occur with electronic payment such as from a Lock Box and our clients need to cut down on the time payments sit in limbo waiting to be cashed and applied. The UPT Module helps streamline these payments and assists users in quickly deciding how the payment should be processed, thus saving our clients time and money.” continued on page 38


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Equal Housing Lender. © 2010 Nationwide Equities Corporation. Trade/service marks are the property of Hamilton Management Group and/or its subsidiaries. Some products may not be available in all states. NMLS Company ID:1401, Licensed Mortgage Banker: CT: License# 12304, FL: License# ML0701076, NJ: License# L046060, NY: License# B500883, PA: License# 22104


• For Licensed Mortgage Brokers in: NY, NJ, CT, PA and FL • No HUD Approval Required • 72 Hour Broker Approvals • Great YSP Pricing • Will Provide State of the Art Training at Our Location 

XINNIX, a provider of interactive online training for mortgage sales and leadership development programs, has announced the availability of The Complete Loan Application class. This Web-based class ensures loan officers understand the value of a complete loan application and enables lenders to gain more control of their business. Having a sound understanding of the loan underwriting process is absolutely critical for loan officers today as a means of ensuring repeat business. Lending organizations interested in creating an efficient operations team, while also mitigating errors in the loan process, have utilized The Complete Loan Application class as a means to accomplish these goals. As evidenced by a Top Five mortgage lender sending 600 of its loan officers nationwide through the course, quality assurance is top of mind for all mortgage executives today. “By equipping loan officers with the skills and knowledge of the benefits a complete loan application brings, we are also creating a desire to systematically deliver exceptional customer service on the front end,” said Casey Cunningham, president of XINNIX. “The Complete Loan Application allows loan officers to focus on boosting their referrals as well as gaining respect from their processing teams.” The Complete Loan Application underscores the six fundamental steps that deliver success in the loan process: proper and effective preparation of the borrower, completion of the critical elements of the 1003, thorough reconciliation of all borrower documentation, timely collection of required borrower signatures, communication of next steps to the borrower and the organization and preparation of the loan file for loan submission. Business growth is nurtured when loan officers invest the time and effort to accurately complete the application at the outset. The Complete Loan Application joins XINNIX’ existing family of interactive, online training programs, including XINNIX EDGE Online, the mortgage sales workshop that empowers loan officers to grow their production; and XINNIX LEADERSHIP Online, which pro-

of its Unapplied Payment Tracking Module (UPT) to its Professional Services Suite in order to assist mortgage bankers and servicers with the processing of electronic payments. The UPT Module enables servicers to quickly and accurately handle electronic payment errors. Through a workflow system, the payment errors are routed to the designated departments and employees for correction. The UPT Module is customizable for each company’s payment rules and can also be used to track errors that come from online bill payment programs, as well as rejected manual payments. “As consumers continue to move their financial management online, it is

new to market

Whether you’re actively searching for a new job or not, don’t miss what could be your next career opportunity. Post your anonymous resume now to start building a better career in the mortgage industry. Search the vast number of career possibilities available in the origination, settlement, secondary & servicing areas of the Mortgage Business or create a personal job alert to be notified of new jobs that match your search criteria. Be available for your next career opportunity. Post your resume at where employers search for mortgage professionals.

Post your resume. Find a job.

Be happy.




continued from page 37

The Unapplied Payment Tracking Module is the newest of GCC’s standalone modules that also include Collateral Tracking and Final Docs. The stand-alone modules are cost-effective ways for servicers to integrate useful technology into their existing processing systems. GCC’s G/SERV is a comprehensive platform that automates all functions of loan servicing, including loan setup, cash management, escrow and insurance administration, investor reporting and accounting, default management and federal and state reporting. For more information, visit

Visionary Apps Releases Complete Realty Suite 2.0 Smart Phone Apps Visionary Apps LLC, creators of innovative smart phone tools that aim to improve people’s lives, has announced the third release of its suite of real estate-related smart phone applications (apps), called the Complete Realty Suite 2.0. User features have been added and the apps now run with increased speed, stability and functionality. With millions of listings nationwide per app, Complete Realty Suite apps have revolutionized the way that people conduct their home buying searches, and the way real estate professionals connect with and assist potential homebuyers. Free to consumers, the suite includes three separate applications for download: Complete Foreclosures, Complete Homes and Complete Rentals. Within the first week of release, Complete Realty Suites apps rose to the top 10 most downloaded Business Apps in the iTunes App Store. The suite was released for the iPhone, iPad and iPod Touch, and has revolutionized the way that people conduct their home search, and the way real estate and management professionals connect with and assist potential homebuyers/renters. “Complete Realty Suite 2.0 brings detailed information on new foreclosures to the palm of your hand more efficiently and effectively,” said Dan Burrus, technology forecaster, business strategist and founder of Visionary Apps. “We’ve worked with top technology experts to redefine our apps to better suit the needs of the users.” The new features of Completely Realty Suite 2.0 include: A new interactive map that updates listings in real-time as users pan and zoom; a customizable search criteria function that allows users to only see the properties that match their needs; a revamped sort feature that ensures

users see the listings that best match their criteria first; and new high-resolution images and icons for the iPhone 4. For more information, visit

Berkadia to Expand Products Offerings With Addition of CMBS Loans Berkadia Commercial Mortgage has announced the expansion of its commercial real estate financing options offered through its nationwide mortgage banking network with the addition of a new product— fixed-rate loans for inclusion in the new generation of commercial mortgagebacked securities (CMBS). The new product, expected to be available at the beginning of 2011, will give Berkadia’s clients superior access to capital as they continue to benefit from mortgage banking expertise and service. Senior Vice President Joseph Franzetti will manage the fixed-rate loan origination program. Franzetti, formerly with Cohen Financial, joined Berkadia earlier this year to establish and manage the company’s relationships with capital markets lenders. “Berkadia’s fixed-rate loan program is unique in the market,” said Franzetti. “We are in discussions with potential capital markets partners, and Berkadia is poised to be the only mortgage banking firm providing proprietary capital for CMBS loans. This gives our clients the best of both worlds—access to the capital markets delivered by local mortgage bankers.” An additional option under development is a short-term floating-rate loan program to provide interim financing to select multifamily borrowers with pending Fannie Mae or Freddie Mac executions. The bridge loan program will be managed by Berkadia’s Agency Lending Group under the leadership of Executive Vice President John Cannon. “These programs are positive developments for our clients,” said Cannon. “Following more than two years characterized by extremely limited financing options, Berkadia is pleased to provide additional choices.” For more information, visit

Wipro Announces Enhancements to NetOxygen Cloud LOS Wipro Gallagher Solutions (WGS) has announced that it has updated its NetOxygen SaaS loan origination system (LOS) to remain in full compliance with the latest industry regulations. The

new channels, giving us a huge competitive edge.” For more information, visit

Your turn National Mortgage Professional Magazine invites you to submit any information promoting new “niche” loan programs, new products or any other announcement related to the introduction of a new program, to the attention of:

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

Ahh yes… the broker approval desk. 39

At Comergence, helping lenders holistically manage relationships with their mortgage broker clients is the most important thing we do. And with FHA now holding lenders accountable and responsible for approving brokers, there’s no better time than the present to have us show you how we can help with this important change to your business. For more information and to schedule an appointment, call 714.740.9000 or visit us at Comergence is preferred by leading lenders nationwide.

©2011 Comergence Compliance Monitoring, LLC. All rights reserved.

Gets you all warm and fuzzy just thinking about having to approve and reapprove your brokers, now doesn’t it?


planetRE, a technology provider for online real estate, has announced planetRE CM, one of the industry’s first interactive unified client communication management platforms. The new SaaS platform consists of planetRE RealFace—an agent-branded Facebook property search engine; a next generation CRM integrating leading social networks like Facebook, Twitter and LinkedIn, and others with predictive modeling and analytics. According to the company,

“Social media has forced its way into the world of marketing, and it’s here to stay,” said Subrao Shenoy, chief executive officer of planetRE. “planetRE CM opens up the idea to salespeople that relationships with clients are developed across multiple platforms through multiple channels. Having an agent branded property search page in Facebook gives great exposure to agent listing and services.” “We are a strong believer in social media revolution,” said Chatty Arrieta, chief operating officer of Partners Trust, a real estate brokerage firm in Brentwood, Calif. “planetRE CM allows our company the ability to manage high end clients with these


planetRE Launches Integrated CRM and Social Media Platform

CRM is still a one-dimensional tool, featuring e-mail for direct agentclient relationship management. CRM should include new network channels made possible through the proliferation of social networking with high consumer engagement. planetRE CM provides agents and brokers with multi-channel campaigns with prospects via e-mail, Facebook, Twitter and instant messaging. Combining powerful backend predictive analytics, it lets the user determine which campaigns provide better return on investment (ROI). CM has provisions for single sign on with multiple user-defined external apps like Google Calendar allowing for the first-time single calendaring and task management. 

LOS has been upgraded to fully comply with the latest regulations, including the U.S. Department of Housing & Urban Development’s (HUD) Real Estate Settlement Procedures Act (RESPA), Upfront Mortgage Insurance Premium (UFMIP) for Federal Housing Administration (FHA) loans, Regulation Z changes for higher priced loans and the Federal Reserve Board’s Mortgage Disclosure Improvement ACT (MDIA). In addition, WGS incorporates new workflow management features for retail and broker lending channels. These are in addition to workflow tools already in place to support the entire origination life cycle. Furthermore, new interfaces to Fannie Mae’s Desktop Originator and to Interthinx’s FraudGUARD were integrated. WGS also made updates to its loan modification application available through the NetOxygen platform, which guides lenders through every step of the Home Affordable Modification Program’s (HAMP) loan modification process including prequalification, initial borrower contact, eligibility, underwriting, the trial period and the official modification. The loan modification application now includes portfolio analytics, automated waterfall and NPV calculations and extensive pipeline management and workflow management. “We developed many of NetOxygen’s new features as part of our response to lenders’ requests for an LOS that further boosts efficiencies in order to maximize profitability,” said Anil Raibagi, business head for WGS. “We constantly look to improve our functionality to simplify the loan origination process for users.” NetOxygen incorporates a multi-tenant platform where the company’s solutions can run on a single server, serving multiple customers while keeping proprietary data separate. This offers significant cost savings to users and enables each customer to work with a customized virtual application instance while ensuring each customer’s loan data is isolated and protected from other users. For more information, visit

Appraisal Management Company

Coester Appraisal Group 7650 Standish Place, Suite 107 • Rockville, MD 20855 (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.

Branch Manager

Closing Gifts

Guaranteed Home Mortgage Company, Inc. 108 Corporate Park Drive, Ste 301 White Plains, NY 10604 888-329-GHMC •

Cruise4Two-Loan Incentives 1-866-541-8077

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 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 • 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

LENDERS COMPLIANCE GROUP 167 West Hudson Street - Suite 200 Long Beach | NY | 11561 | (516) 442-3456 The first full-service, mortgage risk management firm in the country, specializing exclusively in mortgage compliance.

iServe Residential Lending 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!

United Northern Mortgage Bankers......888-600-8808



Branch Manager

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

Contact Management/CRM Branch Recruitment ....................201-489-0256

Freedom Mortgage Corporation 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.

Continuing Education

Freedom Mortgage Corporation, The BEST Branch Solution, Period.

Church Financing

GSF Mortgage 15430 W Capitol Dr. Brookfield, WI 53005 1-877-494-4448 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 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 • 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

Continuing Education

MSS Learning Center (800) 963-1900 Email: Time is running out...are you ready?

Document Preparation

Mortgage Banking Systems - ProClose 1360 Beverly Rd. Ste 200, McLean, VA 22101 800-783-2283 · 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 •

646.210.2545 • 914.763.8008 “The Expo for Real Estate Professionals" For ongoing Networking Events throughout the year please visit

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

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

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. &


Windvest Corporation ............................877-285-0777

Your Complete Mortgage Marketing Solution. Call Us Today! (800) 922-9860

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.

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


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 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

Advanced Data (800) 537 - 0458


DocVelocity (877) 362-8356

North Lake College 5001 North MacArthur Blvd, Room T-231-C Irving, TX 75038 (972) 273-3467 •

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

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!

Loan Management Systems


Retail Branch

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 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 • 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!



• 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 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 • 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.

SM • 877-390-4750 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 We look forward to sharing our services with you!

Secondary Marketing Consulting Broker to Banker ..........(951) 746-3075 We complete your applications for approval Save the time and hassle contact:

Title Regulatory/Compliance

Try us risk-free! Call 561-630-1257 or visit for more details.

(800) LOANS-15

Comergence Compliance Monitoring, LLC 630 The City Drive South, Suite 205 • Orange, CA 92868 Office: 714-740-9000 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.

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.

Loan Incentives

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 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 (866) 945-9872 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 ( 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 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 • 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.

Coming in 2011!

Nationwide Equities Corporation 201-529-1401 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




Sign-on weekly at 

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.


Top Five Articles in 2010

“What are these weird boxes?" QR Codes, when scanned with a mobile device, these unique bar codes will open articles in a Web browser with the proper reader software. Now enjoy the top five viewed stories that appeared on in 2010 by scanning the QR Codes with your mobile device.


FHA Commissioner Stevens clears the air: David H. Stevens details the new RESPA rule and the role of the broker and stabilization in housing

The future of the mortgage broker and correspondent



FHA issues guidance for lender approvals

Did HVCC lead to more fraud?

The HUD hammer hits hard: FHA withdrawals FHA approval status from 905 lenders

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 FEBRUARY 2011 Sunday-Wednesday, February 6-9 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) 7936222 or visit Wednesday, February 16 Florida Association of Mortgage Professionals Broward Chapter 2011 Annual Trade Show The Broward Convention Center 1950 Eisenhower Boulevard Fort Lauderdale, Fla. For more information, call (954) 2946360 or visit Tuesday-Friday, February 22-25 Mortgage Bankers Association National Mortgage Servicing Conference & Expo Gaylord Texan Hotel & Convention Center 1501 Gaylord Trail Grapevine, Texas For more information, call (800) 7936222 or visit MARCH 2011 Tuesday-Thursday, March 15-17 2011 Regional Conference of Mortgage Bankers Associations Trump Taj Mahal 1000 Boardwalk at Virginia Avenue Atlantic City, N.J. For more information, call (973) 3797447 or visit Wednesday, March 16 Maryland Association of Mortgage Professionals 2011 March Mortgage Madness Martin’s Crosswinds 7400 Greenway Center Drive Greenbelt, Md. For more information, call (410) 7526262 or visit 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

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) 7936222 or visit Sunday-Wednesday, March 27-30 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) 7936222 or visit MAY 2011 Sunday-Wednesday, May 1-4 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) 7936222 or visit Sunday-Wednesday, May 1-4 Mortgage Bankers Association’s Loan Production Conference The New York Marriott Marquis 1535 Broadway • New York, N.Y. For more information, call (800) 7936222 or visit Sunday-Wednesday, May 15-18 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) 7936222 or visit 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) 7936222 or visit OCTOBER 2011 Sunday-Wednesday, October 9-12 Mortgage Bankers Association’s 98th Annual Convention & Expo The Hyatt Regency 151 East Wacker Drive • Chicago, Ill. For more information, call (800) 7936222 or visit

Profile for United Sports Publications

National Mortgage Professional Magazine - January 2011  

Managing and selling REOs, 11 Ideas for 2011

National Mortgage Professional Magazine - January 2011  

Managing and selling REOs, 11 Ideas for 2011

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