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


Nevada Association of Mortgage Professionals 1020 Wigwam Pkwy O Henderson, NV 89014 Phone #: (702) 932-6300 O Fax #: (702) 974-4463 Web site:

Sophie Lapointe Ken Raack Janis Grady Kim Borselli Shawn Moshrefnoory

BOARD OF DIRECTORS Phone # E-mail President (702) 947-7827 Vice President (South) (702) 251-9001 Secretary (702) 948-8644 Treasurer (702) 604-0500 Northern Director (775) 786-8600

Former Vegas Resident Charged With Committing Mortgage Fraud in Nevada

For more information on NAMP events, call the NAMP state office at (702) 932-6300 or visit









For more information, visit

JANUARY 2010 Thursday, January 7 NAMP Board Meeting NAMP State Office 1020 Wigwam Parkway Henderson, Nev. 6:00 p.m.-8:00 p.m. O

A former Las Vegas resident has been charged with federal conspiracy and fraud charges for his involvement in a Nevada mortgage fraud scheme involving straw buyers and falsified mortgage loan documents, announced Daniel G. Bogden, United States Attorney for the District of Nevada. Brian K. Jackson, currently of Anaheim, Calif., was indicted by the Federal Grand Jury in Las Vegas on Oct.21, 2009, and charged with conspiracy to commit bank fraud, mail fraud, and wire fraud. On Nov. 10, Jackson was arrested in the Los Angeles area, and appeared before a U.S. Magistrate Judge there and was released on a $50,000 surety bond. Jackson is scheduled to be arraigned by U.S. Magistrate Judge George W. Foley in Las Vegas on Nov. 20. The indictment alleges that from about 2002 to May 14, 2008, Jackson, owner of Unlimited Properties, a now-revoked Nevada limited liability corporation, participated in a conspiracy to defraud financial institutions by causing money from mortgage loans to be diverted to his own use and benefit. Jackson solicited and paid persons (straw buyers) to apply for mortgage loans in their name. The loans were processed through Sapphire Mortgage, located in Henderson, Nev. Jackson caused false and fraudulent information to be placed in the straw buyers’ mortgage loan applications concerning their employment, income, assets, intent to occupy property, etc. Jackson caused the same home to be purchased multiple times by different straw buyers at ever increasing prices. Jackson caused the “equity� to be diverted to himself personally or his company, Unlimited Properties. Jackson also placed renters in the properties, and caused the mortgages to default. The Indictment specifically discusses several transactions involving a home located at 2061 Scenic Sunrise Drive in Las Vegas. Between March 2002 and late 2004, Jackson twice orchestrated the sale of the property using two straw buyers and the placement of false information in their loan applications. In June 2004, Jackson also orchestrated the sale of the Scenic Sunrise property to himself and falsely stated in his loan application that he intended to reside in the property when he knew he did not. During this period, Jackson also leased the Scenic Sunrise property to another individual and accepted money from the individual as guarantee that he would purchase it in the future, even though Jackson knew that the property at the time was owned by the first straw buyer and was in the process of being sold to the second straw buyer. The indictment alleges that Jackson or his company received about $179,000 from these fraudulent transactions. In May 2008, the owner of Sapphire Mortgage, Cindy Birkland, was arrested and charged in state court in Las Vegas with mortgage fraud related offenses. If convicted, Jackson faces up to 30 years in prison and a $1 million fine. This investigation is being led by IRS Criminal Investigation and the FBI, and other agencies of the Southern Nevada Mortgage Fraud Task Force, including the Las Vegas Metropolitan Police Department, the Nevada Attorney General’s Office, Office of the Inspector General for the Social Security Administration, Office of the Inspector General for the Department of Housing and Urban Development, the U.S. Postal Inspection Service, and the U.S. Secret Service. The case is being prosecuted by Assistant United States Attorney Brian Pugh.

DECEMBER 2009 Thursday, December 3 NAMP Board Meeting NAMP State Office 1020 Wigwam Parkway Henderson, Nev. 6:00 p.m.-8:00 p.m.

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Value Nation: How Far Away Can an Appraiser Be? By Charlie W. Elliott Jr., MAI, SRA


FHA Insider—More FHA Changes: Appraisal Ordering, Lender Eligibility and Streamlines By Jeff Mifsud


Mortgage Trigger Leads Pass Another Legal Challenge By Terry W. Clemans


The NAMB Perspective


Ask Tommy: Your QC Expert By Tommy A. Duncan, CMT


NAMB/WEST 2009 Program & Guide


Forward on Reverse: HECM at 20: Leaders and Pioneers in U.S. Reverse Mortgage Series (III)… An Essential Industry Leader By Atare E. Agbamu, CRMS


NCLC’s “Sub-Prime Revisited:” The Cheapest Shot By Atare E. Agbamu, CRMS

Trend Spotter: How to Play the Fed Card

20 24

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


Buzzwords: What They Say to Get the Fraud Done


By Michael S. Richardson

A View From the “C” Suite: Ignoring the Inevitable By David Lykken & Thomas J. Johnson, CPA

Growth Strategies: 2010 By Linda Arcadipane & Mark Schnurman

Growing Your Business Through the Process of Reduction

36 37 38

Seven Tips for Success in a Down Market: Charting Your Winning Course By Brad Kelso


Announced Plans to Eliminate FHA Oversight of Mortgage Brokers Originating FHA-Insured Mortgages By Tommy A. Duncan, CMT & George S. Daugharty, CPA


Regulatory Compliance Outlook: November 2009—New HMDA Requirements By Jonathan Foxx


The Secondary Market Overview: Low Rates and Fences


By Dave Hershman










By Michael Gualtieri


By Gibran Nicholas






November 2009 Volume 1 • Number 7



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

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 of fact and opinion in National Mortgage Professional Magazine are the responsibility of the authors alone and do not imply an opinion on the part of NMP Media Corp. National Mortgage Professional Magazine reserves the right to edit, reject and/or postpone the publication of any articles, information or data. MO

There are 40 Mortgage Professionals of the Month this month! This month, we have shined the spotlight on not just one “Mortgage Professional of the Month,” but 40 of the most influential mortgage professionals under the age of 40. We received lots of positive comments for putting a list of this type together, yet there were some who felt a feature dedicated to those under the age of 40 in an industry where most of its leaders are over the age of 40 wasn’t sufficient. Sure, there are some mortgage professionals over 40 who have already established themselves as leaders in the industry; however, the idea behind this section was to find tomorrow’s leaders. Our process to find these leaders was to first collect nominations from our readers. Those who received numerous verifiable nominations went to the top of the list. The rest of the list was compiled based on production, innovation and community participation. Through this process, we narrowed the list down to the 40 most influential mortgage professionals under 40. Turn to page 28 of this issue to view our first of what we hope to be many, “40 Under 40” features.

Are you ready for 2010? In our November 2009 Special Focus, we take a look at “Growth Strategies for 2010.” This set of articles from a number of different industry sources details ways in which you, as a mortgage professional, can get a step ahead of the competition as we enter a new year. The piece co-authored by David Lykken and Thomas J. Johnson, CPA takes a look at what C-Level executives need to know about 2010 and beyond in forecasting the outlook of the industry, and how ignoring the inevitable could lead to an unfortunate demise. Brad Kelso from Informative Research provides seven tips that he feels will sustain your business in an uncertain market. In the co-authored article by Linda Arcadipane and Mark Schnurman, four tips are presented and detailed to get you through tough regulatory obstacles and guide your business to its most optimal in operational efficiency. And finally, Michael Gualtieri takes a look at how eliminating paper from your office and consolidating your document shipments will eliminate costly paper trails and help cut unnecessary and often costly shipping costs. As we wind down 2009 and close out the first decade of the 21st Century, I can say it has certainly been quite the rollercoaster ride. From the dot com booms and busts to begin the decade, to the restructuring of the industry that we are currently experiencing, I’m sure many of you concur with my assessment. Despite the many curveballs thrown at us on the business front, I feel it’s the right time of year to stop, take time to look around at your loved ones and be thankful for what we have. Whether at home or abroad, these people are still there for us, despite the state of our ever-shifting marketplace. Sure, it may be cliché to say, but I am thankful, above all, for my family and friends, who, regardless of the peaks and valleys the mortgage industry has driven us through, are always there despite the state of the market. To them, I give a heartfelt “thank you” and praise them for their support. I’m popping my champagne well before Dec. 31st at midnight … a toast to the memories of 2009 and cheers to the successes that lie ahead in 2010. Sincerely,





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.

This year’s Mortgage Bankers Association Annual Convention in San Diego had a great vibe in the air, reminiscent of better times in this industry (sans overspending on gaudy and lavish parties). It’s no wonder, since the MBA figures that this year, mortgage originations are projected to be at almost $2 trillion, compared to 2008’s mark of $1.5 trillion. However, this number will drop down to around the $1.5 trillion mark in 2011, according to the MBA’s Mortgage Finance Forecast released at the event. Sure, seeing that we will lose 25 percent of originations doesn’t sound like good news, but there is a silver lining. For 2009, the purchase market is set to represent only 37 percent of originations at $718 billion. However, this number will climb to 63 percent of originations at about $980 billion. This will be done with layers of overlays from mortgage insurance companies and lenders/investors beyond government-sponsored enterprise (GSE) and Federal Housing Administration (FHA) guidelines. However, if your business is generated from real estate agents, builders and other sources of purchase, the next few years will be a GREAT time to be in the mortgage industry. Let’s face it ... the refi market is something that the top servicers should be able to capture. Back in the early 2000s, InterFirst CEO William Newman, as keynote speaker at a mortgage broker industry conference, claimed that they were developing systems to capture the refi, thereby ensuring that smaller mortgage bankers and mortgage brokers would rarely see another refi boom. While that statement might have been a little premature, there is no question that the top three banks have been aggressively calling their borrowers, capturing the refi before they call their loan officer, offering refis where they absorb the closing costs and deliver a “can’t beat” rate. However, there is no system that can replicate years of experience and reputation of getting deals done and most real estate agents and builders know that.



ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact Senior National Account Executive Karen Krizman at (516) 4095555, ext. 326 or e-mail

My perspective on the MBA Annual Convention … some bad news and some good news



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

A Message From NMP Media Corp. Executive Vice President Andrew T. Berman




National Mortgage Professional Magazine is published monthly by NMP Media Corp. Copyright © 2009 NMP Media Corp.

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

The National Association of Mortgage Brokers

National Association of Professional Mortgage Women

7900 Westpark Drive, Suite T-309  McLean, VA 22102 Phone: (703) 342-5900  Fax: (703) 342-5905 Web site:

P.O. Box 140218  Irving, TX 75014-0218 Phone: (800) 827-3034  Fax: (469) 524-5121 Web site:

NAMB Board of Directors Officers President—Jim Pair, CMC Mortgage Associates Corpus Christi 6262 Weber Road, Suite 208  Corpus Christi, TX 78413 (361) 853-9987 President-Elect—William Howe, CMC, CRMS Howe Mortgage Corporation 9414 E. San Salvador Drive, #236  Scottsdale, AZ 85258 (602) 200-8100 Vice President—Michael D’Alonzo, CMC Creative Mortgage Group 1126 Horsham Road, Suite D  Maple Glen, PA 19002 (215) 657-9600 Secretary—Penny Fagan, CRMS P. Fagan Mortgage Inc. 222 East Moulton Street  Decatur, AL 35601 (256) 355-5505 Treasurer—Don Frommeyer, CRMS Amtrust Mortgage Funding Inc. 200 Medical Drive, Suite D  Carmel, IN 46032 (317) 575-4355 Immediate Past President—Marc S. Savitt, CRMS The Mortgage Center 115 Aikens Center, Suite 20-B  Martinsburg, WV 25401 (304) 267-9040


John Councilman, CMC, CRMS AMC Mortgage Corporation 2613 Fallston Road  Fallston, MD 21047 (410) 557-6400

Olga Kucerak Crown Lending 8700 Crown Hill Boulevard, Suite 804  San Antonio, TX 78209 (210) 828-3384 Walt Scott Excalibur Financial Inc. 175 Strafford Avenue, Suite 1  Wayne, PA 19087 (215) 669-3273

Senior Vice President Sharon Patrick, MML, CMI (386) 985-1620 Vice President/Northwestern Region Jill M. Kinsman (206) 344-7827 Vice President/Western Region Tim Courtney (760) 792-5620

Vice President/Southeastern Region Jessica Edmonston (919) 414-3028 Secretary Laurie Abisher, GML, CMI (661) 283-1262 Treasurer Kay Talley, MML (919) 846-4294 Parliamentarian Hulene Bridgman-Works (972) 494-2788

Vice President/Central Region Candace Smith, CMI (512) 329-9040

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

Board of Directors President—Judy Ryan (800) 929-3400, ext. 201 Vice President—Marty Flynn (925) 831-3520, ext. 224 Treasurer—Daphne Large (901) 259-5105 Ex-Officio—Nancy Fedich (908) 813-8555, ext. 3010

Director—Dave Miller (317) 573-0667 Director—Donald J. Unger (303) 670-7993, ext. 222 Director—Tom Swider (856) 787-9005, ext. 1201 Director—Donovan Williams (714) 638-2855

NCRA Staff Director—Thomas Conwell (248) 313-1000

Executive Director—Terry Clemans (630) 539-1525

Director—Don Goldammer (661) 398-4700

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

Director—Sanford (Sandy) Lubin (805) 481-3155

Legal Counsel—James Sutton (972) 680-2665


Don Starks D.C. Starks Mortgage Associates Inc. 141 South Main Street  Bourbonnais, IL 60914 (815) 935-0710

President-Elect Gary Tumbiolo, CMI (919) 452-1529

Vice President/Greater Northeast Region Colleen-Therese McKeever, CMI (646) 584-8332


Ginny Ferguson, CMC Heritage Valley Mortgage Inc. 5700 Stoneridge Mall Road, Suite 150  Pleasanton, CA 94588 (925) 469-0100

President Liz Roberts-Fajardo, GML (702) 498-8020 

Joe Camarena The Mortgage Source 10120 Southwest Nimbus Avenue, Suite C-7  Portland, OR 97223 (503) 443-1060

National Board of Directors




By Charlie W. Elliott Jr., MAI, SRA


FTC Extends Enforcement Deadline for Identity Theft Red Flags Rule

and creditors subject to their oversight. For more information, visit

At the request of members of Congress, the Federal Trade Commission (FTC) has delayed enforcement of the “Red Flags” Rule until June 1, 2010, for financial institutions and creditors subject to enforcement by the FTC. The Rule was promulgated under the Fair and Accurate Credit Transactions Act, in which Congress directed the Commission and other agencies to develop regulations requiring “creditors” and “financial institutions” to address the risk of identity theft. The resulting Red Flags Rule requires all such entities that have “covered accounts” to develop and implement written identity theft prevention programs to help identify, detect, and respond to patterns, practices, or specific activities, known as “red flags,” that could indicate identity theft. The Commission previously delayed the enforcement of the Rule for entities under its jurisdiction until Nov. 1, 2009. The Commission staff has continued to provide guidance to entities within its jurisdiction, both through materials posted on the dedicated Red Flags Rule Web site (, and in speeches and participation in seminars, conferences and other training events to numerous groups. The Commission also published a compliance guide for business, and created a template that enables low risk entities to create an identity theft program with an easy-to-use online form. FTC staff has published numerous general and industry-specific articles, released a video explaining the Rule, and continues to respond to inquiries from the public. To assist further with compliance, FTC staff has worked with a number of trade associations that have chosen to develop model policies or specialized guidance for their members. On Oct. 30, the U.S. District Court for the District of Columbia ruled that the FTC may not apply the Red Flags Rule to attorneys. The announcement that the FTC will delay enforcement of the Rule until June 1, 2010, does not affect the separate timeline of that proceeding and any possible appeals. Nor does it affect other federal agencies’ ongoing enforcement for financial institutions

FHA announces credit policy changes and addition of chief risk officer Federal Housing Administration (FHA) Commissioner David H. Stevens has announced plans to implement a set of credit policy changes that will enhance the agency’s risk management functions. Stevens also announced his intention to hire a chief risk officer for the first time in the FHA’s 75-year history. “By keeping affordable loans flowing, particularly to the growing ranks of first-time homebuyers, the FHA has been critical to our nation’s economic and housing market recovery,” said U.S. Department of Housing & Urban Development (HUD) Secretary Shaun Donovan. “As we begin to move from recession to recovery, these changes will not only ensure FHA’s financial strength but they will also help to further strengthen our nation’s economy.” In addition to adding a chief risk officer, the FHA is proposing specific credit policy changes largely focused on ensuring responsible lending and risk management for FHA-approved lenders. As the FHA’s stable of lenders grows, these lenders must have “skin in the game.” These credit changes will do that by ensuring they have long-term interest in the performance of the loans they originate. Supervised mortgagees will be required to submit audited annual financial statements to FHA. This new requirement is a prudent safeguard that permits FHA to ensure that those entities with which it does business are adequately capitalized to meet potential needs. FHA is aware that the majority of supervised and non-supervised mortgagees are already required to prepare audited financial statements for various regulatory bodies, governmentsponsored enterprises (GSEs) and investors. The FHA plans to propose to increase the net worth requirement for approved mortgagees to meet industry standards. The requirement is currently at $250,000 and has not been increased continued on page 8

How Far Away Can an Appraiser Be? Amidst all of the discussion of the mort- incompetence and errors. One of the gage crisis and the implementation of most common complaints is that the Home Valuation Code of Conduct appraisers are being assigned work in (HVCC), there has been lots of finger areas long distances from their home pointing, concerning who was at fault bases or offices. for the meltdown and what should and The details of the HVCC and appraisshould not be done to fix the problem(s). er independence are multifaceted and Unless you have been in seclusion for would require much discussion, far the past year, you have heard of the beyond the scope of this article. With attempts of New York Attorney General this in mind, we will restrict our discusAndrew Cuomo to keep appraisers sepa- sion to the distances appraisers travel rated from loan originato do appraisals and distors. He, along with Fannie cuss “how far is too far.” Mae and Freddie Mac, our This question reminds two largest governmentme of the question of how sponsored enterprises long a man’s legs should (GSEs), signed an agreebe. U.S. President Abraham ment as a compromise to Lincoln is reported to have settle a lawsuit. This lawanswered that question by suit was primarily about saying, “Long enough to mortgage foreclosures, reach the ground.” In which resulted, according appraisal distances, an to Attorney General analogy may be made that Cuomo, from lenders placit varies with the person ing pressure on appraisers and the circumstance. Not “In the end, an to appraise properties to trivialize the issue, there appraiser closest to a higher than their market are distances and locations property, who is capa- that individual appraisers value in an attempt to ble of delivering the make fraudulent loans. will find excessive to travel most professional These loans ended up in order to provide profescosting homeowners their service, is usually the sional appraisal service. homes and costing taxpayHaving said that, some cirbest choice.” ers billions of dollars in cumstances will warrant bailout money. The resulting agreement further distances than others and there between the participants led to the cre- can be no hard and fast rule. The circumation of the HVCC, which, among other stances that matter most in addressing things, forbids mortgage brokers from the question, in my opinion are, the ordering appraisals from appraisers on number of appraisers available to serve a loans, which they make that are sold to specific location at a specific time, the Fannie Mae and Freddie Mac. It also geographic experience and competence restricts loan production officers in banks of the appraiser, whether the assignment from ordering appraisals or communicat- is commercial or residential and the ing with appraisers who are performing availability of sales data. appraisals on bank loans. A couple of examples of some realMany mortgage brokers and bank life issues relating to the above are: loan officers are crying foul, claiming that the HVCC has damaged their abili-  The property is located in a rural ty to make loans. They allege that the county and there are only two result has caused many appraisals to be appraisers serving the area. One has assigned to bank-owned or independa reputation of providing poor servent appraisal management companies ice and the other is located 50 miles (AMCs) and that their applications are being turned down due to appraiser continued on page 8

Mortgage Trigger Leads Pass Another Legal Challenge More FHA Changes: Appraisal Ordering, Lender Eligibility and Streamlines c) The first lender delayed the appraisal transfer to the second lender so as to cause harm to the borrower (e.g. missing a closing date or expiration of a rate lock). 5. Appraisals are now valid for only 120 days for all existing, proposed or underconstruction properties.

Lender Eligibility Here are the three things you need to know about changes regarding Lender Eligibility: 1. Changes are effective as May 20, 2009 in accordance with the Helping Families Save Their Homes Act of 2009. 2. A lender or mortgagee applying for FHA approval may not currently employ anyone who is currently suspended, debarred, under indictment, under investigation by HUD, or was convicted or pled guilty to a felony related to the real estate or mortgage industries during the seven-year period prior to the date of the application or any time if felony involved fraud, dishonesty, breach of trust, or money laundering.

Appraisal Ordering

3. Lenders are not required to use appraisal management companies (AMCs), but may do so.

Streamline Refinance update This update contains the pertinent changes to Streamline Refinance guides as outlined in Mortgage Letter 2009-32 and are effective on Nov. 17, 2009. Here are the 11 things you need to know about these changes to the Streamline Refinance: 1. Current loan must have six months seasoning. continued on page 14

• Please visit us in booths #111 and #210.

w w w. e f a n n i e m a e . c o m


4. When a borrower switches to another lender, FHA prohibits the second lender from ordering additional appraisals to obtain a higher value, unless: a) The Direct Endorsement (DE) Underwriter determines the first appraisal is deficient; b) The appraiser of first appraisal is on second lender’s exclusionary list; or

continued on page 8

Fannie Mae is proud to be a sponsor of the 2009 NAMB/WEST Conference. © 2009, Fannie Mae. Registered trademarks.

2. Mortgage brokers and commissionbased lender staffers will be prohibited from selecting the FHA appraiser.

3. FHA lenders must use their U.S. Department of Housing & Urban Development (HUD)-registered name in all advertisements and promotional materials and keep copies of all materials for two years from date of use.

The sale and use of mortgage trigger leads has successfully cleared another legal challenge recently, when the Second Circuit Court upheld the prior decision to dismiss a challenge to the practice by Premium Mortgage Corporation of Rochester, N.Y. This comes after the three national credit bureaus, lead by their trade association, the Consumer Data Industry Association (CDIA), successfully filed a lawsuit against the Minnesota Attorney General to stop a Minnesota law that would have effectively banned the practice in July of 2007. For years, mortgage companies have asserted that the release of trigger leads by credit reporting agencies to their competitors is an unfair business practice and should be prohibited under federal law. On Oct. 5, 2009 the Second Circuit Court of Appeals challenged this notion by handing down a decision which states that credit reporting agencies did not commit fraud when they

released trigger leads to mortgage companies’ competitors. Premium Mortgage Corporation filed a class action suit against Equifax Inc., TransUnion LLC, Experian Information Solutions and Credit Plus Inc. on behalf of itself and other mortgage companies. The case argued in the Second Circuit on Sept. 11, 2009, was an appeal from an order of the United States District Court for the Western District of New York, entered on Sept. 30, 2008, dismissing all claims against the defendants. The claims asserted by Premium Mortgage Corporation in the class action suit relate to the credit reporting agencies’ sale of mortgage trigger leads to thirdparty lenders. The central issue in the dispute is the plaintiff’s challenge to the defendants’ practice of permitting other lenders to purchase “pre-screened” consumer reports that, in essence, contain trigger leads. According to Premium Mortgage, these trigger leads constitute its proprietary customer information because such information is not readily known in the industry and it cannot be obtained except through extraordinary effort. Based on these allegations, the plaintiff


1. Appraiser changes are effective as of Jan. 1, 2010.

Note: This article should not be interpreted as the author being in support of the use of trigger reports. It is purely for the purpose of informing the readers of this publication about the events pertaining to a subject that is very controversial to them. 

Given the need for the Federal Housing Administration (FHA) to assure solvency of their insurance fund, they are continuing to publish changes that are designed to protect FHA. Although some of these updates seem a bit extreme and may affect our ability to do some loans, most of the changes are based on good reasoning. Since the majority of loans being done today are FHA loans, we as an industry want to make sure that the FHA does what they need to do to make sure the program doesn’t collapse. I would say just about every financial crisis in history is preceded by a period of deregulation and then followed by a period of high regulation. These measures will hopefully make us a stronger industry and give us the ability to offer FHA financing well into the future. This article contains the pertinent changes to Appraisal Ordering, Lender Eligibility and Streamline Refinancing guides as outlined in Mortgage Letters 2009-28, 29, 30, 31 and 32. Here are the five things you need to know about changes regarding ordering appraisals:

By Terry W. Clemans


For more information on the National Association of Mortgage Brokers, visit

Let’s Give Thanks

Certification? Certainly!



A Message From NAMB President Jim Pair, CMC Change


With Thanksgiving only a few weeks away, I started thinking about all the things in my life for which I should be thankful for. I am thankful for my family and friends. I am thankful for the opportunity to worship as I please and to live in a country that allows me to pursue my dreams. Being able to pursue the career of my choosing made me think about the National Association of Mortgage Brokers (NAMB) and all that I have experienced serving as president of such a great organization. One of the things that has impressed me the most during my term is the volunteers who serve the association. In the years that I have been active with NAMB, I believe that the volunteers I have been associated with this year are the very best group of volunteers NAMB has ever had. Our current volunteers are people who have served for a number of years on various NAMB committees, combined with a brand new group serving for the first time. This combination brings to our association a great balance of experience, fresh deals and an enthusiasm to complete any goal or task. Our volunteers give NAMB many hours of their time and talent. You cannot imagine the staggering amount of time they give to the association which takes them away from their business and their family. They do this even though they have a company to run in an economic atmosphere where they have to work harder than ever to originate loans. They do it for no other reason than for the betterment of the association. I wish I had the space to name all of you who have volunteered. You deserve the thanks of all of the members (and even the nonmembers who choose to stay on the sidelines) for the work you do for our industry. This is an example of true dedication. We should also be very thankful for the staff of NAMB. Even though the size of the staff is smaller than in previous years, the quality of their work and the dedication they give to the association has not diminished. If anything, in my opinion, it has become stronger. They have had to take on additional responsibilities and have done so without any hesitation. Any time you have the opportunity to communicate with anyone of NAMB’s staffers, please say thank you for all they do. This Thanksgiving, be sure to include all these unsung heroes in your thoughts and prayers. To all of our members, I want to extend a special thank you for your support of our association. Please mark your calendar for the dates of Saturday-Tuesday, Dec. 5-8. These are dates for the NAMB/WEST Convention in Las Vegas. You must attend and learn the latest methods to build your business and be updated on the current legislative information. Please log on to to register for the event, reserve your room and view the Schedule of Events that are a must to attend. I wish everyone a very special Thanksgiving and may God bless this great nation in which we live. Jim Pair, CMC is with Mortgage Associates Corpus Christi and is president of the National Association of Mortgage Brokers. He may be reached by e-mail at

A Message From NAMB Certifications Committee Chair Pava J. Leyrer, CMC, CRMS We are currently all immersed in change. It is one thing we can all be certain of. But, have you considered that change has always occurred? We have seen what we consider major changes and it makes me think of my grandmother telling me about one her most vivid memories, the first time she saw a car. Her father was sure it would be the downfall of the country. They were noisy, smelled bad, scared good-working horses, and were expensive … how could anyone afford them? My grandmother thought they held excitement and fear, but that a car was a key to a new future she wanted to be a part of. You may wonder how this has anything to do with mortgages and certification. We too are seeing many things that are very different and difficult to handle, even often seem impossible to work with in our industry right now. Many legislators openly attack us without even understanding who we are or what we do in our communities. We are left to struggle, inform and fight for our lives as we know them. But consider what we can do and how we should do it. We are entrepreneurial Americans. By nature, strong, hard-working, honest individuals with values and codes of conduct. We obtain strength through education and that education leads to certification and licensing as our answer today. Ignorance is combated by knowledge, sometimes not immediate, but it does prevail. Your customers return to you because they trust your experience and knowledge. They know your commitment to being the professional they can rely on for the answers their families need. They admire your commitment to being a part of your state and local associations, and dedication to volunteering in your communities. You make a difference and provide the choices that consumers need. Just as my grandmother was ready to see what lied ahead, you too must take the steps to get yourself ready for what lies ahead. Knowledge through education can never fail. Growth and commitment to becoming involved is vital to success. Make your choice today to become involved and certified for your future. Pava J. Leyrer, CMC, CRMS, is president and owner of Heritage National Mortgage Corporation in Grandville, Mich., and Certifications Committee chair for the National Association of Mortgage Brokers. She may be reached by phone at (616) 534-4993 or e-mail

The Communications Corner You don’t have to be Kim Kardashian to use Twitter And YES, you can generate business here!

A Message From NAMB Communications Committee Member Andrew T. Berman So, if you are in the mortgage biz right now, you know what heck you are doing and enjoy doing it. Let’s face it … one of the only positive effects of the mortgage meltdown is that there has been a mortgage originator cleansing. Those who were just able to pick up phones and take apps on easy deals are gone the way of the hand-

written 1003. Today, we are left with the crème de la crème … those who have their business built on networking, relationships and reputation. If you haven’t already embraced Twitter, I’ll share with you some ways to look at Twitter that will help you to go from an anti-social networking outsider, to a highly connected mortgage professional.

You don’t need to let them know you got done getting dressed, ate an apple or walked your dog … you decide the message and its tone! It seems there is still a lot of resistance to share every innate details of one’s life (personally I think this is a good thing). You only share what you want to share. Some feel the need to share it all, while others only share certain professional messages. The communications you send out will sync up to the referral partners you will be comfortable doing business with and the borrowers who want to do business with you. While you might not think it that way just because you are not some celebutante or reality TV icon that the world is enamored with for no real good reason, it doesn’t mean that your network of contacts and potential new contacts wouldn’t want to know about what’s going on in your world. Here are a few common social networking types:

 It’s always business, never personal These types tend to just publish rates, maybe a good quote here and there, but are really doing social networking not so much because they bought into it, but because they feel they have to. Effectiveness: Well, it’s a start Daily updates: From zero to two

 I work, I play, and here are the highlights

 The “I wanna be a celebrity” type

Start talking! Once you have started to share your world (well, what there is to share) you then start to engage other Twitter users. They can become your contacts, or from contacts you find by using or Tweet Grid (thanks to David Orsini in his last NAMB Communications Corner article for sharing this in the September 2009 issue of National Mortgage Professional Magazine, page 5). You can search “open house” in your area and find agents announcing their open houses or buyers heading out to one. Twitter allows you to engage with contacts that you may not even know.

Donald J. Frommeyer, CRMS is Membership Committee chair of the National Association of Mortgage Brokers and senior vice president of Amtrust Mortgage Funding Inc. in Carmel, Ind. He may be reached by phone at (317) 575-4355 or e-mail


Andrew T. Berman is executive vice president of NMP Media Corp. and a member of the NAMB Communications Committee. You may follow him on Twitter @andrewtberman. He may be reached by phone at (516) 409-5555, ext. 333 or e-mail

It is hard to believe that it’s that time of year once again for our annual NAMB/WEST event. All of the planning and hard work by all of the volunteers is coming to a head. To be truthful, the committee and volunteers are still working to make sure that your conference is educational, informative, relaxing and professional. As you pass through the halls and rooms of the conference, please think about all of the hours that these volunteers have given to make your time in Vegas productive. I cannot speak highly enough of the job that Penny Fagan and her Communications Committee has done getting all of the information out and helping with the many NAMB/WEST Webinars. And to Andrew T. Berman, a big thank you to you for helping with this platform so we could get it out to everyone. Making the Webinars available sure has brought the association into the 21st Century and it shows that NAMB is up-to-date with the current trends. On Saturday, Dec. 5, come early to take the SAFE ACT Test Prep class from 2:00 p.m.-4:00 p.m. It will give you a crash course on what you need to know to take the Nationwide Mortgage Licensing System (NMLS) national test. Then, go get ready for an Opening Reception to welcome everyone to Las Vegas for NAMB/WEST 2009. It will be a lot of fun meeting your new friends, old friends and members of NAMB. Sunday, Dec. 6 marks the start of a very full and concise conference. You will get economic updates, updates from NAMB’s Government Affairs team, SAFE Act updates, Mortgage Disclosure Improvement Act (MDIA) updates, Home Valuation Code of Conduct (HVCC) updates, and Red Flags Rule updates just to drop a few topics to be openly discussed and presented. In the afternoon, we will host a Federal Housing Administration (FHA) program and a Veterans Affairs (VA) session … what better way to meet new lenders or to find out what programs old lenders have that maybe you didn’t realize that they had. We end Sunday with a rash of NAMB Committee Meetings in what you, the NAMB member, requested as face-to-face meetings. Monday, Dec. 7 at NAMB/WEST will help you understand what you can do with the magic of Facebook, Twitter and other forms of social media. Mark Green and Mark Madsen will take you to where you need to be to build your business, and Frank Garay, co-creator of Think Big Work Small, will show you how to use video in your business. Also on Monday, we will host the first Exhibit Hall Showcase presented by NAMB since the our Annual Convention in Indianapolis in June of 2008. This one will be jam-packed with lenders, vendors and companies that want to do business with NAMB members. On Tuesday, Dec. 8, we will wrap NAMB/WEST 2009 with the Delegate Council Meeting and NAMB Board Meeting. On a final note, membership in NAMB is a must if you are trying to follow all of the government affairs items, and having a voice in what the association does on a state and national front in your best interest. I had a discussion with a state regulator, and he commented on the fact that now is the time that people should belong to an association more than ever, due to the rapidly-changing rules and regulations. Being an NAMB member makes your individual vote count on a larger scale, rather than trying to do it yourself. If you have not been a member of NAMB for three years or more, we now have a great “Get Back to the Membership” program available for you. You can join for the cost of $100 this year (NAMB portion of dues) plus your state affiliate’s dues. So, call your state affiliate of NAMB and sign up now to start getting all of the important information and stay informed.


So they think that their adoring public wants to know every single boring detail of their life. From when they brushed their teeth first thing in the morning, to drinking a glass of water before their head hits the pillow. These users try to inject as much wit into each of their posts as possible. This group will let it all hang out. From the mundane details of their life to what some of us find inappropriate. However, some people will find this interesting and they will get followers! Effectiveness: You will get followers, friends and others paying attention, but you will turn off some people Daily updates: Anywhere from 10 to infinity!

A Message From NAMB Treasurer Donald J. Frommeyer, CRMS 

This type seems to have found the sweet spot. This is where you do what Mark Madsen calls “Let the Web work for you, don’t work the Web.” You share what you have planned for the day that is out of the ordinary from your other days, share good news or even what someone like Rhonda Porter from Oregon does where she shares mortgage quotes and scenarios on Twitter (i.e., @mortgageporter: Quoting 4.125% w/1 pt. for 15 yr.-fixed $415k loan rate-term refi <60% LTV with 740+ credit in Seattle [apr 4.349]). Sure, some might say that quoting rates is mundane since you are doing it every day; however, this reminds everyone of the diverse loans you can do. Some might argue that it’s not great to post your rates like that, but it’s your call. Remember, you are in control of your message! You can even get personal by posting new places you have been to (maybe some photos), new food you have tried and major milestones with your family and personal life. This will help to build rapport with your networking partners and clients by showing the personal side of you. Effectiveness: Very. This seems to be the sweet spot are far as a “time put in” to “benefits gained” ratio. Daily updates: Two to 10 a day

NAMB/WEST and Your Membership




news flash


value nation

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since 1993. HUD is proposing an initial increase of approximately $1 million that would be in place within one year of the enactment of this rule. To maintain consistency with industry standards, HUD may propose that the net worth requirements be increased further in future years to a level comparable to those required by GSEs and other market institutions. These changes will help to ensure that FHA lenders are sufficiently capitalized to meet potential needs, thereby permitting HUD to mitigate losses and decrease risks to the FHA insurance fund. FHA will revise current procedures for streamline refinance transactions to establish new requirements for seasoning, payment history, income verification and demonstration of net tangible benefit to the borrower; provide for collection of credit score information when available; and to cap maximum loan-to-value (LTV) at 125 percent. An appraisal will be required in all cases where a borrower wants to add closing costs to the transaction. These revisions bring documentation standards for streamline refinance transactions in line with other FHA loan origination guidelines, ensures the borrower’s capacity to repay the new mortgage, and prohibits the dangerous practice of loan churning, where borrowers raise cash through successive cash-out refinancings that put them further in debt. New guidelines will be provided on ordering appraisals for FHA-insured mortgages and existing policy on FHA requirements regarding appraiser independence and geographic competence will be reaffirmed. Mortgage brokers and commission-based lender staff are prohibited from ordering appraisals. FHA does not require the use of appraisal management companies (AMCs) or other third-party providers, but does require that lenders take responsibility to assure appraiser independence. While FHA’s existing policies regarding appraiser independence are consistent with the Home Valuation Code of Conduct (HVCC), FHA will adopt language from the HVCC to ensure full alignment of FHA and GSE standards. FHA’s appraisal validity period will be reduced to four months for all properties, including existing, proposed and new construction. Previous validity periods were six months for existing properties and up to 12 months for proposed and under construction properties. This provides for more accurate home values used for underwriting FHA-insured mortgages during volatile housing market conditions. FHA will provide new guidelines that allow a second appraisal to be ordered under a limited set of circumstances when a borrower switches from one lender to another and restates the requirement that the first lender must transfer the appraisal to the second

lender at the request of the borrower. Lenders seeking approval to originate, underwrite or service an FHA loan must meet the eligibility criteria for a supervised or non-supervised mortgagee. Mortgagees with this approval status must assume liability for all the loans they originate and/or underwrite. Loan correspondents will continue to be able to originate FHA-insured loans through their relationships with approved mortgagees; however, they will no longer receive independent FHA approval for origination eligibility. These policy changes will require the FHA-approved mortgagee to assume responsibility and liability for the FHA-insured loan underwritten and closed by the approved mortgagee. These changes align FHA with the GSEs and will potentially increase the number of loan correspondents who are eligible to originate FHA-insured loans, while providing for more effective oversight of loan correspondents through the FHA approved mortgagees. For more information, visit

MBA study shows increased production profits in Q1 of ‘09 Mortgage bankers made an average profit of over $1,088 on each loan they originated in the first quarter of 2009, according to the Mortgage Bankers Association (MBA). This profit marks a marked improvement over the fourth quarter 2008 results in which average profits were $148 per loan, according to the MBA’s Quarterly Mortgage Bankers Performance Report. This new report measures the performance of independent mortgage bankers and subsidiaries of banks, thrifts and hedge funds. “It is clear the refinance boom in the first quarter of 2009 contributed greatly to an increase in overall production volumes, allowing production operating expenses per loan to finally drop,” said Marina Walsh, MBA’s associate vice president of industry analysis. “The average share of refinancings to total originations for these companies jumped to 66 percent in the first quarter, from 42 percent in the previous quarter. As a result, the average production volume for each firm was $213.9 million in the first quarter of 2009 compared to $125.6 million in the fourth quarter of 2008.” Among the principal findings of the MBA report are: 85 percent of the firms in the study posted pre-tax net financial profits in the first quarter 2009, but in the fourth quarter 2008, only 53 percent of the companies posted profits; mortgage banking production profits were 54.58 basis points or $1,088 per loan, exhibiting a significant improvecontinued on page 12

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away from the subject property. The latter does good work, has access to all market data and has time in his schedule.  A known and trusted appraiser has served a radius of 60 miles for 20 years successfully, has performed many appraisals near the subject, has access to all MLS data, but lives 43 miles away from a subject property requiring evaluation. The bank assigning the appraisal is not able to confirm the availability of any other competent appraiser; however, there are a number of other appraisers located near the subject. In the above examples, it is easily understandable why appraisers may be selected some distance from a given property. It is only fair also to acknowledge that reports have been circulating that accuse banks and AMCs of sending appraisers from one large city to another, sometimes 50 to 100 miles apart. It is equally understandable why, in such cases, there would be major concern for such broad-reaching, geographic area, appraiser-stretching, assuming that the property is a residential property, not having any unusual characteristics addressable by local appraisers. I would place no specific limit on how far an appraiser should travel to perform an appraisal. It is not unusual for commercial appraisers to travel across country or even into other countries to perform highly-specialized assignments. This is not usually the case

mortgage trigger

with standard residential properties; however, some appraisers routinely cross state lines and cover several cities competently. Other appraisers never leave their city or even their part of their city in their practice. I suggest to you that all of these situations can and do produce acceptable practices. In the end, an appraiser closest to a property, one that is capable of delivering the most professional service, is usually the best choice. In conclusion, distance alone is not a sufficient factor to determine whether a specific appraiser is the best for a particular assignment. Many other factors must be considered, and all factors must be evaluated. One of the primary considerations is whether the appraiser is able to deliver a fair, unbiased and honest appraisal, free from outside pressure. The mere fact that different appraisers are being used than those used in the past is not a legitimate basis to criticize the system. This is especially true when we consider that the old system has cost taxpayers billions of dollars, due to fraudulent loans where the “appraiser next door” may have performed the appraisal. It is the responsibility of those selecting appraisers for a particular assignment to find the best person for the job, not simply the one closest in proximity. 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,

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brought nine state law claims, including misappropriation of trade secrets, fraud, unfair competition, tortuous interference, breach of contract, and unjust enrichment. The credit bureau defendants moved to dismiss the plaintiff’s claims against them, arguing that the claims are preempted by the Fair Credit Reporting Act (FCRA). Judge Michael Anthony Telesca held that the FCRA expressly preempts each of the plaintiff’s claims against the credit bureau defendants. “The plaintiff has not identified the legal basis for the credit bureau defendants’ alleged’ duty and obligation to maintain the confidentiality” of trigger leads, the judges wrote. The judges also dismissed the plaintiffs’ fraud complaint as inadequately pleaded, characterizing their complaints as “unadorned, the defendants unlawfully harmed me accusations.” The Court reviewed the plaintiff’s remaining arguments and found them

to be without merit. Accordingly, the Second Circuit Court affirmed the District Court’s order of Sept. 30, 2008. These two court losses, combined with the support that mortgage trigger leads has received from the Federal Trade Commission (FTC) many times, means that this product, like it or not, will most likely be around for a long time. For more info on the FTC’s position via their consumer alert on the subject of trigger reports, visit Terry W. Clemans is the executive director of the National Credit Reporting Association Inc. (NCRA). He may be reached at (630) 539-1525 or e-mail Visit the National Credit Reporting Association Inc. (NCRA) on the Web at

By Tommy A. Duncan, CMT

NetMore America breaks $1 billion production milestone

AllRegs and LoanSifter announce integrated solution

Tommy A. Duncan, CMT is executive vice president of Quality Mortgage Services LLC. For answers to your QC and FHA questions, please contact Tommy at (615) 591-2528, ext. 124 or e-mail You may also visit Quality Mortgage Services LLC on the Web at

Sponsored by


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It is flat out war. There is a war raging never seen before at the corporate levels of mortgage banking. It is the survival of which corporation has the best QC department or outsource QC company. Investors have engaged their QC departments or have outsourced to QC companies to build cases against lenders for repurchase. The lenders have engaged their QC department or outsourced to QC companies to rebuttal repurchase claims. This is the most exciting time in QC history … to be competing against competitors and robust QC departments at large mortgage banking corporation based on material facts. Mortgage insurance companies are doing the same thing and trying to push toxic or potential toxic paper back down to the source of underwriting or origination. Investors and mortgage insurers have the right to seek repurchase claims base on the breach of contract. What makes this endeavor exciting is finding QC errors on a QC department or an outsourced QC company. It is relatively easy to find origination oversights and regulatory errors, which so many files going through repurchase claims have. What is difficult for some auditors is finding the material substance to justify a repurchase. Just because a loan is a default, does not mean it is automatically a repurchase. For example, a lender had a large number of files that went into default. The investor/insurer issued a repurchase letter to the lender requiring indemnification. We conducted our audit and found that every file had a borrower or co-borrower who worked for one of two corporations that had gone out of business. We obviously found minor oversights in the loan, but the minor oversights did not warrant the repurchase of the investor/insurer’s claims. In fact, the lender did not have to repurchase a single loan associated with the claim. Are investors/insurers calling fraud when there is not fraud in a file? Things that make you say, “Hmmm?” Well that is a tough question. There does appear to be some perception of desperation out there from a select few making claims of fraud in the loan in order to justify a repurchase claim to lenders that are difficult to substantiate fraud. For example, the income is documented at $130,000, but the 1003 loan application has $1,300,000, which was a typo. The fraud would have been if the borrower had provided electronically-altered documents or falsified documents or if someone in the loan origination had altered documents. I will agree that this error should have been caught and corrected somewhere in the loan process or underwriting, but the W-2s and income verification supported the amount of $130,000. The rebuttal audit showed, on material fact, to support fraud, but showed human error or oversight. The loan qualified under the $130,000 income requirement. This loan was not in default and payments were current. However, this loan audited by an outsourced QC company proclaimed fraud and working toward a repurchase on behalf of a mortgage insurance company. These are exciting times in the QC world, and we love going to battle each and every day, either finding fraud or rebutting repurchase claims. May the best QC army win!


AllRegs, an information provider for the mortgage lending industry, and LoanSifter, a provider of Web-based loan product eligibility and pricing tools, have combined resources to provide an integrated solution for loan officers, mortgage bankers and secondary departments. The AllRegs LoanLibrary product, which features 2,000 products and 60 investors, is now available to all searches that LoanSifter perform on investor guidelines and loan products. The data from the AllRegs LoanLibrary application is integrated into LoanSifter via a sophisticated Web service that allows users to stay within the LoanSifter system and still access updated investor guidelines. LoanLibrary will be accessible throughout LoanSifter’s “best of breed” solutions, from loan initiation, pipeline monitoring, auto quotes provided to Zillow and Lending Tree, Web site consumer portals, LoanSifter’s online 1003 mortgage application, and wholesale/third-party originator Web portal. LoanSifter users currently perform six million searches for loan products and guidelines per month. “With the release of this integrated system, loan officers have a valuable tool on their hands that provides loan eligibility, rate and product guideline information,” said Dan Thoms, AllRegs senior vice president. “Combining our resources with LoanSifter’s unique technology provides loan officers with the ability to better manage their loan products, search them in seconds, and view all the investor guidelines they need to choose the appropriate products for their customers. The integration will help increase their productivity on a loan-by-loan basis. LoanSifter is offering a truly powerful solution to the marketplace.” “Across the board, LoanSifter users are constantly searching out loan products and

Question: What do you see happening at high levels of mortgage banking and quality control (QC)? 

NetMore America Inc., an expanding next generation mortgage banker, has announced that its production volume surpassed the $1 billion milestone for its fiscal year that ended Sept. 30, 2009, a 300 percent increase compared to the same 12-month period for fiscal year 2008. The significant production increase was driven by both purchase and refinancing activity in the company’s wholesale lending platform and professional branch system. “The $1 billion mark is a milestone that we are very proud to report as it validates our model and demonstrates our commitment to building the next generation mortgage banker through profitable and sustainable relationships,” said Mark Freedle, president and chief executive officer of NetMore. “We will continue to focus on enabling our lending partners, mortgage brokers and our branch system to operate in a friction free environment optimizing the lending value chain to operate more efficiently and empower them to exceed their own expectations.” NetMore funded its first mortgage loan in October 2007 and is focused on building a mortgage banking leader through the power of the right relationships and a sustainable national platform. The company is currently able to lend in 22 states through its wholesale channel and 18 professional retail branches. At this time, NetMore is generating 60 percent of its production from its wholesale channel and 40 percent from its professional retail branch system of which, on average, 40 percent is purchase and 60 percent is refinancing activity. NetMore’s goal is to build a nationwide lending platform in a responsible and strategic manner by focusing on states with high potential for quality business. The company is currently going through the licensing process in Maryland, which, when finalized, will be its initial entry into the East Coast market. For fiscal-year 2010, the company is projecting production volume to increase to the $1.3-$1.5 billion range. “Despite the full blown reset of the wholesale channel, the high quality, better skilled and credible mortgage broker is not going away,” said Freedle. “There is a definitive need in the marketplace for experienced independent mortgage

professionals that are committed to extensive product knowledge, ethical behavior, customer service and open and honest communication to help borrowers understand the mortgage process, set and manage expectations and put them into the right mortgage.” For more information, visit


For more information and the most up-to-date program of events for NAMB/WEST 2009, visit Program of events (Subject to change) Continuing Education Credits are not offered at this year’s conference.

Saturday, December 5 2:00 p.m.-6:00 p.m. ........................................................Registration Open 2:00 pm- 4:00 pm ..........................SAFE Act Test Prep Crash Study Workshop This workshop is open to all full conference attendees for an additional $25.This Crash Study Workshop is designed to provide an overview to prepare for the federal portion of the SAFE Act exam, which covers federal law and regulation, instruction on fraud, ethics, consumer protection, fair lending issues and the non-traditional marketplace. This workshop will be an overview of several of the sections on the federal SAFE Act Test. While this workshop is intended to prepare a student for the federal portion of the loan officer assessment as required by the SAFE Act, the course does not qualify for pre-licensing educational requirements of the same act. 4:30 p.m.-6:00 p.m. ........................NAMB/West Advisory Committee Meeting 7:00 p.m.-9:00 p.m. ......................................................Opening Reception

Sunday, December 6



7:30 a.m.-5:00 p.m. ........................................................Registration Open


9:00 a.m.-9:45 a.m. ........................................................Economic Update Speaker: Dr. Ted C. Jones, Director of Investor Relations, Stewart Information Services Corporation Join Dr. Ted Jones as he addresses the state of our industry and the economy. Dr. Jones will provide information regarding his on-going research and support of the economic and financial analysis of what is affecting the economy today. Jones earned a PhD in finance with a minor in statistics and a master’s degree in land economics and real estate from Texas A&M University. He holds a bachelor of science degree from Colorado State University. 10:00 a.m.-10:45 a.m. ....................NAMB’s Government Affairs Team Update Speakers: NAMB Board Members Jim Pair, Harry Dinham, Denise Leonard & Roy DeLoach On Monday, Feb. 23, NAMB, with the support of Baker & Hostetler LLP, filed a lawsuit with the United States District Court for the District of Columbia against the Federal Jim Pair Harry Dinham Denise Leonard Roy DeLoach Housing Finance Agency (FHFA) Director James B. Lockhart over the controversial Home Valuation Code of Conduct (HVCC) included in the appraisal agreements between the FHFA, Fannie Mae and Freddie Mac (GSEs), and New York Attorney General Andrew Cuomo. Attend this session to find out critical updates to NAMB’s lawsuits and other regulatory updates. 11:00 a.m.-11:45 a.m. ..................SAFE Act, MDIA, HVCC, Red Flags and Other Regulatory Updates Panel Speakers: Theresa Ballard, President of BFO Solutions; Ken Perry, President of Broker Knowledge & Ginger Bell, CEO of Go2Training The year 2009 will go down as the year of regulatory reform. An hour hardly seems like enough time to cover all of the updates, but it will give us a chance to give an overview of what all has happened and what you need to do to make certain you Theresa Ballard Ken Perry Ginger Bell understand the new regulations and how

they affect your business. This will be one of the most important and informational sessions of the NAMB/WEST conference! You will want to attend this session! Theresa C. Ballard is CEO of BFO Solutions Inc., a compliance company offering compliance audits, post secondary closing audits, loan delivery and loan guarantee services. Ken Perry is the president/CEO of Broker Knowledge Group, a training and consulting firm that specializes in all matters related to real estate and finance. Ginger Bell is the president of Go2Training, a Web-based solution to locate, track and manage continuing education and training. 11:45 am - 1:00 pm ......................................................Lunch on Your Own 1:00 p.m.-2:00 p.m.....................FHA: The Best and Fastest Mortgage Finance Option for Your Clients Today Speaker: Nancy West, Marketing & Outreach Specialist for HUD Join industry expert Nancy West, marketing and outreach specialist for HUD, as she covers the newest updates with FHA, as well as the many changes that have taken effect under the Housing and Economic Recovery Act of 2008. Nancy West has been in the mortgage lending industry since 1977, and has worked in a variety of positions within the industry from branch manager, small business owner, account executive, and mortgage loan underwriter. Nancy underwrote mortgage loans for major U.S. lenders; both government insured and non-government backed. Nancy holds two degrees, in real estate and in education. Nancy is also a licensed California Real Estate Broker. 1:00 p.m.-2:00 p.m. ..........................................................VA Loan Options Speaker: Jeff Wilson, Loan Production Officer for the Department of Veterans Affairs Join Jeff Wilson of the U.S. Veterans Affairs Department as he shares important information regarding VA loans. Do you know what it takes to do a VA Loan? What are you doing to tap into this growing market? Join industry experts as they cover the ins and outs of VA lending. Jeff is a loan production officer for the Department of Veterans Affairs. 2:15 p.m.-4:00 p.m. ............Speed Dating Mortgage Style … Learn Who/What is Available Join us as we match “Speed Dating” with mortgage lending and provide a platform for you to meet a wide selection of vendors who are “available” to help you in your business. It’s really simple. 10 tables, 10 chairs, 10 min., 10 chances to meet the vendor of your dreams, or at least one who may be able to help you with your business! Move quickly from one table to the next to find out who will best fit what you are looking for. Matches may include: Lenders, technology companies, marketing tools and compliance tools. It’s a fun way to find out what is new out there. Lenders will be available to discuss files too so bring your questions. Fun, games and prizes will be included in this action packed section. Be sure to join in the fun and excitement and who knows … maybe you will find a “perfect match.” 2:15 p.m.-4:00 p.m. ......Double Your Profits Without Doubling Your Workload Speaker: Fred Arnold, President of American Family Funding Join Fred Arnold as he leads this powerful session on breakthrough business building action steps and superior selling techniques that will position you to: Boost your business sales to the next levels, create sustainable business profits, build your referral base, create a sales machine and close sale after sale, and put more money in your pocket. It’s worth an hour of your time to find out what the top loan originators are doing to create their success in this market. 4:00 p.m.-4:30 p.m. ..............................Refreshment Break and Networking

4:30 p.m.-5:30 p.m.............................................NAMB Committee Meetings Education Committee Meeting led by Joe Camarena, Ethics Committee Meeting led by Walt Scott and Government Affairs Committee Meeting led by Harry Dinham. 4:30 p.m.-6:30 p.m.............................................NAMB Committee Meetings FHA Committee Meeting led by John Councilman, VA Committee Meeting led by Jim Brown, NAMB PAC Meeting led by Mike Anderson, Membership Committee Meeting led by Victoria Johnson, Communications Committee Meeting led by Penny Fagan and an Executive Team Meeting.

Wells Fargo Wholesale Lending

Power up your purchase IQ Helping you and your borrowers capture today’s market opportunities.

Monday, December 7 8:00 a.m.-5:00 p.m. ........................................................Registration Open 8:30 a.m.-9:50 a.m. ....Social Media: How to Use Facebook, Twitter & Blogging to Build Your Business Speakers: Mark Green, President of Top of Mind Networks and Mark Madsen Creator of and Everyone is a-twitter about Twitter, Facebook, blogging and video. Questions run the gamut from “What is it all about?” to “How do I use it for business?” Mark Green and Mark Madsen are the experts when it comes to social media! In this jam-packed session, you will learn how to use the social media applicaMark Green Mark Madsen tions to: Network with others in your industry or community; stay connected to customers and prospects; monitor what is being said about your company, products, services, industry and competition; gather valuable feedback about products or services; and find answers and get advice. 10:00 a.m.-11:00 am................................Using Video to Build Your Business Speaker: Frank Garay, Co-Creator of Think Big Work Small Join Frank Garay, co-creator of Think Big Work Small (TBWS), as he shares how to use online video to build your business. Online video can help to: Raise awareness about the company, product or service; offer proactive customer service; promote events, products and services; drive traffic to your Web site or blog; share helpful content, such as articles or blog posts; and generate leads. TBWS provides a daily (News and Views You Can Use) show which is faithfully watched by more than 7,000 mortgage professionals and is virally growing every day.

Contact us today to learn more.

Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. © 2009 Wells Fargo Bank, N.A. All rights reserved. #67866 11/09-2/10

11:00 a.m.-Noon ..............................................................Broker Challenge Noon-1:00 p.m. ............................................................Lunch on Your Own 

1:00 p.m.-5:00 p.m. ........................................................Exhibit Hall Open 5:00 p.m.-7:00 p.m. ..........Exhibitor Appreciation Reception (Exhibitors Only)

Tuesday, December 8 7:30 a.m.-Noon ..............................................................Registration Open 8:30 a.m.-12:30 p.m. ..................................NAMB Delegate Council Meeting 1:30 p.m.-4:00 p.m. ....................................................NAMB Board Meeting

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ment over the previous quarter in which profits averaged 7.10 basis points or $148 per loan; the “net cost to originate” (including all production operating expenses and commissions minus all fee income, but excludes secondary marketing gains, capitalized servicing, servicing released premiums and warehouse interest spread) fell to $1,725 per loan in the first quarter 2009, compared to $2,324 per loan in the fourth quarter 2008; and production operating expenses—commissions, compensation, occupancy and equipment, and other production expenses and corporate allocations—dropped to $3,738 per loan in the first quarter 2009, compared to $4,810 per loan in the fourth quarter 2008. The average number of retail loans originated per retail sales employee rose to 10.4 loans per month in the first quarter 2009, from 5.3 loans per month in the fourth quarter 2008. Net warehousing income, which represents the net interest spread between the mortgage rate on a loan and the interest paid on a warehouse line of credit, continued to pose a challenge for the mortgage bankers in this study. Interest spread dropped to 6.60 basis points in the first quarter 2009, compared to 9.28 basis points in the fourth quarter 2008. The servicing shops of these independent mortgage companies and subsidiaries essentially broke even in the first quarter 2009 with net financial losses of $1 per loan serviced. Quarterby-quarter net operating servicing income (servicing fees, net escrow earnings and ancillary income less direct and indirect expenses) remained at $165 per loan. The direct cost to service averaged $163 per loan. For more information, visit

Zoot uncovers troubling data regarding credit risk management Zoot, a provider of advanced instant credit decisioning and loan origination solutions, recently polled financial industry executives regarding their credit risk policy development processes. The results revealed data about the current development cycle of most financial institutions, where they are facing significant challenges because the length of time required to develop and implement new credit risk policy is ineffective in a rapidly changing economic climate. According to the poll, 93 percent of participants identified it takes at least nine months to develop, test and deploy a credit risk policy concept. The majority (64 percent) reported this process takes their institution 12 to 18 months. “Zoot’s poll showed that about half

of the respondents share risk management resources across origination, servicing and collections, which is encouraging,” said Bobbie Britting, research director of consumer lending at TowerGroup. “Simply restricting credit is not a sustainable practice and to emerge from this crisis, preventing loss on the back end begins with knowing what to look for in originations. Paying careful attention to changes across the consumer credit lifecycle and intervening in a timely manner will help minimize losses and possibly prevent accounts from becoming bad.” For more information, visit

Appraisal summit concludes that reform is still necessary The National Association of Home Builders (NAHB) hosted a Residential Real Estate Appraisal Summit with federal regulatory agencies and the major housing and financial institution stakeholder and appraisal organizations to discuss constructive solutions to appraisal problems. Among the problems discussed at the summit was the use by some appraisers of foreclosed or other distressed properties as comparables without proper adjustments. Summit participants also addressed unintended consequences from the implementation of the Home Valuation Code of Conduct (HVCC) which are impeding the ability to obtain appraisals of the quality required in today’s distressed markets. These inappropriate practices, including reports that some appraisers are working in areas where they don’t know the market, are driving down home values and impacting home sales as inaccurate appraisals are coming in below the contract sales price. This is causing unwarranted downward pressure on home prices at a time when housing and the economy are struggling to emerge from the worst downturn in decades. Following the meeting, the leadership of NAHB, the National Association of Realtors (NAR) and the Mortgage Bankers Association (MBA) were united in calling for immediate action to address their appraisal-related concerns, including clarifications with regard to the HVCC and the establishment of “best practices” for the appraisal process. The groups also urged the regulators to adopt and enforce clear, concise regulatory guidance on the use of distressed and/or foreclosed properties that will allow appraisers to develop realistic valuations based on sales that are truly comparable. “Appraisers generally are only required to inspect the exterior of a continued on page 14

HECM at 20: Leaders and Pioneers in the U.S. Reverse Mortgage Industry Series (III)

An Essential Industry Leader Like most pioneers and leaders in other ents the reverse mortgage concept to industries and other spheres of life, mortgage lenders, her peers in the pioneer loan officers in the U.S. reverse reverse mortgage industry, and senior mortgage industry were a curious advocacy groups. A four-term former co-chair of the bunch of happy warriors. They were the foot soldiers who brought the innova- National Reverse Mortgage Lenders tive home equity loan to America’s Association’s (NRMLA’s) board of directors, and current director ex-officio and skeptical senior homeowners. Making a bundle in a hurry could not co-chair of NRMLA’s Ethics Committee, have been their motivation, for origina- NRMLA President Peter Bell has tion fee during the first eight years of the described Sarah F. Hulbert as an “essenindustry was pegged by law at $1,800. tial leader for our industry.” Hulbert and I caught up After commission splits recently. The following are with their employers and her reflections on the U.S. taxes, they probably took reverse mortgage industry home a third or less of that 20 years after the first Home amount per loan. And they Equity Conversion Mortgage were extremely lucky if they (HECM) was made. closed one loan in a month. Understandably, not many What attracted you to made the journey to where reverse mortgages, and the industry is today. why did you commit to Sarah F. Hulbert, chief the business? executive officer of Senior In 1991, I was a project Financial Corporation in Sarah Hulbert manager for a marketing Renton, Wash., is one of research firm. A small bank those happy warriors who “Reverse mortgages in Santa Rosa, Calif. conmade the long trek. In have moved from a tacted us about conducting more than 17 years of toil boutique to a maina focus group on consumer in almost every area of stream product, a attitudes towards reverse the business and in some viable financial option mortgages. At that time, I of the leading companies had not heard of reverse for today’s senior in the industry, Hulbert mortgages, but I became has helped shape the homeowners.” increasingly more interestindustry. Hulbert was a —Sarah F. Hulbert, ed as I researched the leader in the team that Chief Executive product. The focus groups built Seattle Mortgage Officer, Senior we conducted indicated Company’s reverse mortFinancial Corporation the product was extremely gage operations into the well-received by senior third largest lender/servicer in the industry (acquired by Bank homeowners. Ironically, shortly after I finished the of America in 2007). Besides her strong operational lead- research project, a friend told me ership, Hulbert is a thought leader with about a reverse mortgage company in a flair for writing and public speaking. San Francisco that had just issued a Her articles have appeared in The very successful IPO. The company’s Mortgage Press, The Seattle Times, The name was Providential Corporation Oregonian, and Secondary Marketing and they were aggressively staffing Executive. She is a regular guest on sev- their sales and marketing team. I intereral talk radio shows, as well as at conferences and seminars, where she prescontinued on page 15 




fha insider

2. Current loans with six-12 months seasoning, no 30-day late payments are allowed. 3. Current loans with 12-month seasoning or greater there is a maximum of one 30-day late payment in the last 12 months. 4. Refinance must reduce principal, interest, taxes and insurance (PITI) by five percent or take them from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage (the fixed-rate cannot be more than two percent higher). For hybrids, new fixed-rate cannot increase more than 20 percent), or take them from a fixed-rate to an ARM (the ARM must be two percent less than the fixed-rate). 5. If a borrower is reducing the term, it must be processed as a rate and term refinance. 6. Investment properties and second homes are no longer eligible to refinance to ARMs with the Streamline Refinance Program. 7. The lender must include a signed and dated letter on their letterhead, that the borrower is employed and has current income. 8. The maximum combined loan-tovalue (CLTV) ratio is 125 percent of the new value or the original value if the loan is processed without an appraisal. 9. Lenders should not use TOTAL on streamlines unless they want to process the loan as a regular rate and term refinance. 10. Lenders may no longer use the short Uniform Residential Loan Application (URLA or the 1003). 11. Payoff statement of current mortgage cannot include delinquent interest, late charges or escrow shortages.

“I would say just about every financial crisis in history is preceded by a period of deregulation and then followed by a period of high regulation. These measures will hopefully make us a stronger industry and give us the ability to offer FHA financing well into the future.”

There are a lot of changes, and I recommend you have an office meeting regarding them to make sure that all your operations and origination staff are on the same page. The last thing you want occurring is to have dozens of borrowers’ loans end up in process that won’t be able to close because you weren’t up on the changes. Most FHA updates create an opportunity for loan officers to be a resource of FHA information for their referral partners. If creating the marketing pieces to present the updates is too overwhelming for you, then do what our members have done and subscribe to The FHA Originator, our monthly newsletter that provides you with tools to brand your image as an FHA expert. For more information and to get a free sample, log on to Go FHA! Jeff Mifsud founded Southfield, Mich.based Mortgage Seminars LLC in 2004, has been an FHA originator for 12 years, is a contributor to and is a former FHA underwriter. Jeff may be reached at (877) 342-9100 or e-mail Visit author Jeff Mifsud’s Web site at for tips and information on FHA loans and details from some of the nation’s top FHA specialists.



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property that is being used as a comparable because they are normally unable to enter these homes and examine their interiors,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “But all too often, properties that have been subject to foreclosure or distress sales have issues related to deferred maintenance or internal damage that an external inspection simply cannot detect. You can’t compare these properties to new homes that are in market-ready condition. NAHB believes that it’s time for appraisers to have regulatory guidelines that acknowledge such realities.” “NAR supports the independence of appraisers and the integrity of the appraisal process,” said NAR President Charles McMillan. “An accurate appraisal is an important part of any real estate transaction, and reforming the appraisal process is critical to the nation’s housing recovery. Quality appraisals are threatened by unintended HVCC consequences and an inconsistency among the various federal regulators. As the leading advocate for housing issues, NAR calls on the federal government to establish consistent appraisal rules for FHA and the GSEs [government-sponsored enterprises].” “Ensuring that appraisals are fair and accurate is the lynchpin of our secured lending system,” said Robert E. Story Jr., CMB, chairman of the MBA. “As a lender, it is crucial that I can count on the fact that an appraisal is correct and that the appraiser has not been subject to pressure from any interested party to the transaction. We want to work with appraisers and regulators to ensure that every appraisal results in an honest, truthful evaluation of a property’s value.” For more information, visit

FDIC embarks on foreclosure prevention Initiative The Federal Deposit Insurance Corporation (FDIC) has announced the release of a free toolkit of information that will help borrowers, community stakeholders and the banking industry avoid unnecessary foreclosures and help prevent foreclosure “rescue” scams that promise false hope to consumers at risk of losing their homes. The toolkit includes critical information to help borrowers know who to contact and what documents they need to have available to apply for a loan modification that could save their home from foreclosure. This toolkit also describes the warning signs of potential foreclosure “rescue” scams and how consumers, community stakeholders, and bankers can report scammers and prevent

fraud. To ensure this information is widely available, the FDIC is conducting outreach to community-based organizations and the banking industry, and furnishing a referral service to help consumers identify sources of legitimate help and report fraud to the appropriate law enforcement agencies. “It is vitally important that consumers and bankers know all of the resources available to help prevent unnecessary foreclosures,” said FDIC Chairman Sheila C. Bair. “The toolkit, along with our outreach, should help consumers know how to get a loan modification when they need one. While reaching out a helping hand, we must also be on guard for those who would prey on consumers who are facing foreclosure. Everyone with a stake in this issue—from community leaders to those with a neighbor, friend or family member facing hardship— must take responsibility for reporting questionable activity and directing consumers to legitimate sources for assistance.” Also as part of this initiative, the FDIC is continuing to work with banks and community-based and consumer organizations to avoid foreclosure and stop foreclosure “rescue” scams, particularly in underserved communities. Consumers are encouraged to report questionable activities, including solicitations or offers, to their servicer and appropriate state and federal authorities, which may include the Federal Trade Commission (FTC) and the appropriate state attorney general. For more information, visit

OCC and OTS release mortgage metrics report for Q2 ‘09 Actions to keep Americans in their homes grew by almost 22 percent during the second quarter of 2009, according to a report released by the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS). The latest OCC and OTS Mortgage Metrics Report showed that difficult economic conditions resulted in higher rates of mortgage delinquencies and foreclosures in process, which increased to 8.5 percent and 2.9 percent of all serviced mortgages, respectively, but as the Obama Administration’s “Making Home Affordable” program got underway during the quarter, efforts to assist homeowners and avoid loss were also on the rise. Since the first quarter of 2008, these home retention actions have increased by nearly 75 percent. The “Making Home Affordable” procontinued on page 18

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viewed with the company and joined them two weeks later. I can almost pinpoint the moment when I knew reverse mortgages were going to be my career. After spending about six months in the office working with customers over the phone, I finally had the opportunity to go out in the field to meet with clients. After meeting with my first customer and originating my first loan, I felt so invigorated and went home that night feeling, for the first time in my career, that I had truly made a difference in somebody’s life that day. From that point on, I was hooked on reverse mortgages.

have thousands of lenders approved to offer the product. While most reverse mortgage originators are in the business for the right reasons and conduct their business ethically, a few “bad eggs” have hurt our industry’s reputation. I remember being asked, time and time again over the years, “Why aren’t any of the large banks offering reverse mortgages?” For obvious reasons, that question is no longer being asked. The product has evolved and matured to the point where banks and other financial institutions who do not offer reverse mortgages find themselves at a competitive disadvantage. They now continued on page 18

Why some Mortgage Professionals fail in Credit Repair while others Make Serious Money Mortgage Professionals make money in credit repair while getting borrowers Mortgage Ready!

You don’t need to be a credit expert to they couldn’t close before due to bad credit! It means more loans and more revenue for my loan start your own Credit Repair business Fortunately, with HTDI Financial’s Credit Services Organization (CSO) program, you will be able to handle ALL aspects of your business except having to do the actual repairs; we do that for you! We will train you on how to handle these customers and you will have the support you need every step of the way. We will make you look like a Fortune 500 company even if you work from home! YOU control how much money you make. In fact, through our CRM, we give you the tools and resources to harvest leads, manage prospects and monitor their progress.

You don’t have to spend tens of thousands of dollars for start-up costs for your own Credit Repair Company Once you are set up in our system, you will get access to software and tools that HTDI has spent over $1 million on research and development. You don’t need to spend an arm and a leg to start building your own credit repair business. Here is a quote from a mortgage company located in upstate New York who spent months of research before choosing HTDI:

Get those impossible to close deals CLOSED! As the number of loan programs are shrinking, the bar on credit scores keep rising. This program will allow your borrowers to become “Mortgage Ready” as soon as 45 days. As one of our CSO stated:

“I have many loan officers that are now able to send their clients through the credit repair, raise their scores, and then close the client’s loan that

Get started in a business that is booming and shows no signs of slowing The credit industry, as a whole, is one of the most powerful and profitable industries in existence. With loans, insurance and even employment taken into consideration individuals’ credit picture, the credit industry is getting bigger every day. Inside the credit industry, Credit Services is helping by assisting consumers with getting back on track by removing unverifiable and inaccurate negative items from their credit reports. As a CSO, you can benefit in being in a profitable industry and helping clients with their futures.

“I’ve been in the mortgage business over 22 years. A year ago, as the mortgage crisis worsened, I began trying to find a way to help clients who needed a better credit profile in order to get a mortgage. Fortunately for both me and my clients, I stumbled on HTDI. After a year of experience, I can honestly say the success rate is 100% and client satisfaction is through the roof. All of my clients have seen significant improvements, and some have experienced breathtaking jumps in their credit scores, even on the first round! From Day One you can be sure your “back office” (HTDI) has you covered. They will execute their part of the job seamlessly, with precision, on time, and with total consistency. All you have to do is SELL the service! Just sign people up, collect the money, and send HTDI the paperwork they need to get started. If you simply focus on selling the service, you will make lots of money, the work will get done, and you will never have to worry about unhappy customers. Although I got into it as a part timer, I now realize this is an excellent full time business opportunity. (Frankly, these days it’s probably a better business than the mortgage business!) You could easily make six figures in the first year with a minimal investment of money. How many opportunities like this exist these days? What you must invest is your time – SELL, SELL, SELL & SELL some more! Ultimately, what you are selling is the professionalism of HTDI, which is why this really rocks as a business opportunity.”

Industry Leading Results 46.95%

20.44% 17.32% 14.21%

Round 1 Round 2 Round 3 Round 4 We average one of the highest fix/deletion rates in the industry for the first 45 days of service. Shown below, in real-time, is the average percentage of fix/deletes per round.

If you are going to get involved in Credit Repair, be VERY CAREFUL First you have “Fair Credit Reporting Act” (FCRA). The FCRA holds credit bureaus and creditors to their reporting methods and has guidelines they must comply with. There are numerous techniques that are used along with similar laws to maximize results for each client. You must know these laws inside out. You can’t forget “Credit Repair Organizations Act.” (CROA). Just like the FCRA, the CROA hold credit repair companies to specific guidelines as well. If you choose HTDI Financial for your backend processing, we will ensure you maintain compliance. Lastly, you have applicable State Laws. Depending on the state you wish to conduct business in, you may have a state Credit Services Organizations act to comply with. As an active member in good standing of the National Association of Credit Services Organizations, you can be sure that we take our job very seriously, making sure you stay compliant and your clients.

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visit or call us at 877-877-4834 option 5.


There is only one step you need to take;


“Until last year, I owned a large mortgage company in upstate NY with over 125 employees. We got hit hard during the mortgage industry crash and had to close our doors. I was stuck in a position with thousands of leads and customers that couldn’t get qualified for anything. I decided to start looking for a way to capitalize on my left over resources and help people in the process. I called many other credit repair companies and was very unimpressed. One west coast based company was charging $15,000 and had nothing but negatives written about them on the Internet. Then I found HTDI. They helped me to get started at the beginning of this year and it has been great. I have not only made great money helping people to repair their credit, but I have refinanced 8 of them and helped 6 buy houses that would have never qualified with the new guidelines. The software is very user friendly and all of my clients, affiliates and Brokers have increased business because of it.”

officers. Even better than that, it is very rewarding to be able to help a client regain their credit and be able to get the loan they need.” 

How has the industry changed since you came in? It would be easier to answer the question if you asked me, “What hasn’t changed?” When I entered the industry, only a handful of lenders offered reverse mortgages. Without fail, whenever people asked me what I did for a living and I mentioned “reverse mortgages,” I would be asked, “What? What’s a reverse mortgage?” Today, everyone has heard about them … the good, the bad and the ugly. We strive to overcome misperceptions about our product. The awareness and acceptance of reverse mortgages are result of industry participants dedicating many years to educating the public. Customers today have choice compared to customers then. Until recently, there were many proprietary products (which we may see again as housing finance recovers). HECM products have changed as well. When I came into the business, HECM was in its infancy. The only available option was an annualadjusting CMT HECM. So, when we met with customers, the conversation was straightforward: “This is what you’re eligible for, this is what it costs, and do you want to proceed?” Today, we have HECMs with multiple margins and rates, including a fixed-rate option. We are in transition from a CMT to a LIBOR index. Speculation abounds about other changes, including a so-called “HECM II,” as well as cuts to the principal limit (effective Oct. 1, 2009, FHA reduced HECM’s principal limit by 10 percent). Income opportunity has also changed. In my first eight years in the industry, origination income was limited to $1,800. The wages we earned were anything but livable income, and we were forced to run our businesses on a shoestring budget. Limited revenue hurt our marketing. To build our businesses, we became experts on grassroots marketing, the cheaper the better, with free publicity as our goal. Low revenue made it hard to recruit good loan officers because it was difficult to earn a living. That was one of the reasons reverse mortgages were so slow to catch on. The previous county-by-county loan

limits affected our ability to qualify prospects. I remember meeting with prospects who lived in $300,000 homes, but were limited to $113,500 maximum claim amounts! The single national loan limit is a blessing. It has allowed lenders to help senior homeowners who were previously cut off. Change is a constant in today’s regulatory and compliance arena, resulting in a need for increased staffing in compliance and quality control areas of most reverse mortgage companies. And the marketplace has become more

competitive and more saturated with new players. Technology has greatly changed as well. For the first eight years, HECM calculations were run on HUD’s DOS-based HECM calculation software. Application packages were manually generated, usually using a combination of preprinted forms (which you would complete on the typewriter) and homemade disclosures created on our PCs. E-mail was non-existent, so the closing process involved a series of faxes (on thermal paper, which would need to be copied so the print wouldn’t fade). Industry participants have also changed over the years. Where we used to have a very small number of lenders originating reverse mortgages, we now


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guidelines—it is integrated into everything we do,” said Bruce Backer, president of LoanSifter. “Empowering our clients with the coverage and depth of AllRegs’ LoanLibrary application will ultimately allow them to lower costs and improve productivity. Especially in today’s challenging lending environment, it is crucial that our clients are able to rely on accurate, up-to-date investor guidelines and product information. Matched with the strength and speed of our loan eligibility and pricing tools, AllRegs’ LoanLibrary fills this need perfectly.” For more information, visit or

16 announces integration with Mortgagebot Inc. has announced a comprehensive integration and a new preferred referral alliance with Mortgagebot LLC, a provider of multichannel point-of-sale (POS) mortgage automation solutions. Mortgagebot’s PowerSite is a hosted, software-as-aservice (SaaS)-based solution. As such, both Mortgagebot and

products can be conveniently and costeffectively deployed and updated via the Internet; with no server-based software for lenders to install or maintain. “Today’s market needs efficient, affordable mortgage automation,” said Sean Dugan, vice president of sales and marketing at “The integration of PowerSite with our Webbased LOS [loan origination software] platform provides lenders with a robust, highly compliant and cost-effective solution that can handle every aspect of the mortgage-lending process.” PCLender’s LOS platform enables lenders to manage the entire lifecycle of a loan, from marketing and origination through closing, secondary marketing, loan-level reconciliation and

Residential Mortgage Banking Branch Program for Professionals Guaranteed, an established and well-funded Mortgage Banker since 1992, is positioned to continue its prominence in the industry. As a leading FHA Direct Endorsed Lender, we underwrite all files in-house. This allows for faster approvals, common-sense underwriting and timely closings. We are actively seeking relationships with productive mortgage teams and entrepreneurial mortgage professionals.


108 Corporate Park Drive, Suite 301, White Plains, NY 10604 CALL: Kelley Berkheiser at (443) 418-7213 or Louis Tesoriero at 888-329-GHMC.

post-closing—ensuring full regulatory compliance. “Mortgage lenders are increasingly turning to advanced POS automation as a way to reduce costs, increase efficiency, and provide better service,” said Dan Welbaum, chief marketing officer of Mortgagebot. “Our new alliance with PCLender enables even more banks and credit unions to gain easy access to mortgage POS technology that can make them more competitive—and more profitable.” For more information, visit or

Triad agrees to sell MI platform to Essent Guaranty Triad Guaranty Inc. has announced that it has reached a definitive agreement to sell its information technology and operating platform to Essent Guaranty Inc., a new mortgage insurer founded to provide private capital to America’s housing finance system. Under the terms of the asset purchase agreement, Essent will acquire all of Triad’s proprietary mortgage insurance software and substantially all of the supporting hardware, as well as certain other assets, in exchange for up to $30 million in cash and the assumption by Essent of certain software contractual obligations. Approximately $15 million of the consideration is fixed and up to an additional $15 million is contingent on Essent writing a certain minimum amount of insurance in future years. Triad will retain the obligation for all risks insured under its existing insurance contracts and will continue to pursue the voluntary run-off of its existing inforce book of business. The transaction is expected to close in the fourth calendar quarter of 2009. “We believe that this is a very beneficial transaction for both Triad and Essent,” said Ken Jones, president and chief executive officer of Triad. “While preserving our control over loss mitigation and claims processing to protect our policyholders during run-off, Triad stakeholders benefit from the proceeds generated by the sale of the platform and reduced costs to service our run-off book of business going forward. The platform, which we believe will benefit from Essent’s ongoing maintenance and investment, provides Essent with the opportunity to enter the market utilizing an established operating platform and a seasoned team of mortgage insurance technology and operations professionals.” Essent, which is headquartered in Radnor, Penn., will establish its operations and technology center in Winston-Salem, N.C., where Triad is based, and a number of Triad’s information technology and operations employees are expected to join Essent upon closing of the transaction. As part of a services agreement between the two companies, Essent will provide continued on page 19

Saturday-Tuesday, December 5-8, 2009 MGM Grand Hotel • Las Vegas Scheduled Sessions

Don’t miss out on a great lineup of education and networking events.

• Economic Update by Dr. Ted Jones, Director of Investor Relations, Stewart Information Services Corporation • Update from NAMB’s Government Affairs Team • SAFE Act, MDIA, HVCC, Red Flags and Other Regulatory Updates Panel

Overview of schedule of events

• FHA the Best and Fastest Mortgage Finance Option for Your Clients Today, presented by Nancy West of FHA • Speed Dating Mortgage Style – Learn who/what is available

Saturday, December 5 NAMB/WEST Opening Reception

• Double Your Profits Without Doubling Your Workload, presented by Fred Arnold Sunday, December 6 Speakers, Education and Committee Meetings Monday, December 7 Speakers in the Morning/Exhibit Hall in the Afternoon Tuesday, December 8 Delegate Council Meeting in the Morning/NAMB Board Meeting in the Afternoon

• Using Video to Build Your Business, presented by Frank Garay, Co-Creator of Think Big Work Small

Visit for more details.


Visit to learn about FREE hotel rooms, FREE advertising, and the FREE networking reception


Make sure you book your hotel before November 10th to take advantage of the fabulous group rates offered at MGM Grand Hotel. 

• Social Media: How to Use Facebook, Twitter & Blogging to Build Your Business, presented by Mark Madsen


news flash

gram requires borrowers to successfully complete a three-month trial period before loan terms can be permanently modified. The Mortgage Metrics Report classified actions under this program as payment plans. As a result, payment plans increased by 73.9 percent for the second quarter of 2009, while loan modifications declined by 25.2 percent. Successfully completed trial period payment plans will be reported as loan modifications in future reports. The percentage of modifications that reduced borrowers’ monthly principal and interest payments continued to increase to more than 78 percent of all new modifications, up from about 54 percent in the previous quarter. Also, the percentage of modifications that reduced principal more than tripled to 10 percent, from 3.1 percent in the first quarter. This trend represents a significant shift from earlier quarters, when the vast majority of loan modifications either did not change monthly payments or increased them. As noted in prior reports, modifications that reduce borrowers’ monthly payments continued to produce lower levels of re-defaults and longer term sustainability than modifications that either increased payments or did not change them. For more information, visit or



Sen. Reed introduces bill to keep families in their homes


forward on reverse

continued from page 14

In an effort to curb high foreclosure rates nationwide and stabilize the housing market, U.S. Sen. Jack Reed of Rhode Island has introduced legislation that will help keep families in their homes and prevent communities from deteriorating as a result of skyrocketing mortgage defaults. Sen. Reed’s Preserving Homes and Communities Act of 2009, co-sponsored by Sens. Dick Durbin of Illinois, Sheldon Whitehouse of Rhode Island and Jeff Merkley of Oregon, will help address the housing crisis by requiring that qualified homeowners are evaluated for and offered loan modifications; establishing a new mortgage payment assistance program; and incentivizing states and local governments to create strong mediation programs, which allow homeowners and servicers to meet face to face to try to find an alternative to foreclosure. “In the last year, the federal government has taken decisive action and devoted substantial financial resources to shoring up financial markets, averting a potential national and global financial meltdown,” said Sen. Reed. “Despite federal efforts, the number of foreclosures continues to rise at an alarming rate on pace to surpass last

year’s foreclosures by a third. The Preserving Homes and Communities Act will ensure that we are taking similarly aggressive actions to address the housing crisis, which has devastated families, crippled local communities, and dragged down the broader economy. More and more households are finding that even with a fixed-rate mortgage that they could afford before the recession, they are just one pink slip away from losing their biggest investment. My bill provides targeted relief to qualified homeowners so that more families can keep their homes, protects communities from suffering even greater financial losses, and sets us on the path to stabilizing the housing sector as a foundation for lasting economic recovery.” “As foreclosure rates continue to climb, a lasting economic recovery becomes harder to reach,” said Sen. Durbin. “Until we stabilize the housing market, we simply won’t get a handle on the broader economic crisis. Voluntary efforts to keep families in their homes have failed. This bill will force lenders to modify qualified mortgages, create a homeowners assistance program and give states a bigger role in mediation efforts. It’s long past time for the Senate to step up to keep families in their homes and to help lead the way toward economic recovery. This bill will help achieve those goals.” The bill would improve the current loan modification program by expanding it to more qualified homeowners; giving these homeowners protection against all foreclosure proceedings while waiting for a loan modification analysis, not just against a foreclosure sale; and providing these homeowners with the legal tools to help save their homes when lenders fail to follow the program’s rules. It would also help establish state mortgage assistance programs nationally and encourage mandatory mediation programs. For more information, visit

CMSA and MBA file joint letter to address capital treatment of assets The Commercial Mortgage Securities Association (CMSA) and the Mortgage Bankers Association (MBA) have filed a comment letter with banking regulators to address the proposed risk-based capital treatment of assets coming on the books of banks on Jan. 1, 2010, as a result of FAS 166 and FAS 167. FAS 166 and FAS 167, issued by the Financial Accounting Standards Board in June 2009, will generally require that assets and liabilcontinued on page 20

continued from page 15

see the value of offering this product to their client base as part of their efforts to serve their customers throughout the various stages of their lives. Reverse mortgages have moved from a boutique to a mainstream product, a viable financial option for today’s senior homeowners. What are some lessons you have learned about seniors, the market, and the business? First, never underestimate the intellect of your customer. The seniors we work with have significantly more life experience than the majority of us who are originating reverse mortgages. Their knowledge and experience is tremendously valuable and should be treated with respect. The worst thing an originator can do is to treat their customers in a condescending manner. Second, always approach the origination process with the intent of fully educating your customers about all aspects of the reverse mortgage. Anything less than full disclosure of the benefits, costs and features of the loan is unacceptable. And third, communicate regularly with your customers and prospects. Follow up diligently and make yourself available to answer any questions or concerns your customer may have. Lack of responsiveness and failure to regularly communicate with your customers can only lead to negative results. What are the prospects and some challenges for the reverse mortgage industry and why? I think, overall, the prospects for our industry are good. All indicators point towards ongoing demand for reverse mortgages: Our target age group is increasing daily, the current economic environment necessitates options such as reverse mortgages for many senior homeowners who are trying to finance their retirement, and the investment community’s appetite for reverse mortgages appears to be increasing once again. Also, we will be seeing new products that will meet the needs of a segment of our customers who, until now, have not seen the reverse mortgage as a product that fits their needs. Our biggest challenge is going to be tied to the increasing number of originators entering the reverse mortgage space. As an industry, we need to be vigilant to ensure that lenders offering reverse mortgages are offering the right products for the right reasons and presenting the product honestly. Everincreasing regulation and scrutiny of reverse mortgages has exposed several unscrupulous lenders and originators. The resulting negative publicity has been damaging to the industry’s reputation. We need to further develop and maintain zero tolerance for unethical business practices.

More important today, we need to reassure regulators and the public that reverse mortgages are beneficial and necessary products in our communities. Above all, we need to constantly educate ourselves and our communities about reverse mortgages, selfpolice our industry, and focus on creating a good reputation for our product and our industry. What is your favorite reverse mortgage story? In the late 1990s, I worked with a couple who could not afford their mortgage payments because of medical bills. The husband had to go back to work to help make the mortgage payments, and the only job he could find was cleaning tables at a McDonalds. He had acute arthritis in his feet, and by the end of the workday, he was in so much pain that the only way he could get around the house was to crawl on his hands and knees. When I first met with them, they were wary about the reverse mortgage because they hadn’t heard much about them in the press. They had considered selling their home, but that option wasn’t appealing because it was the home they had lived in their entire marriage of over 50 years at that time. After a detailed program explanation, they decided to apply for a HECM. We closed their loan about five weeks later, and I will never forget that day. When we were done signing the closing documents, the husband looked at me with a twinkle in his eyes and said, “Well, now I suppose it’s time for me to go quit my job!” He was so happy that he didn’t have to endure the crippling pain he’d been dealing with for over six months. The reverse mortgage was a life-changing event for this couple. We stayed in touch for a number of years. Two years after the HECM, the wife had a stroke. Cash from the reverse mortgage helped them fund her home care and avoid a nursing home. Author and columnist, Atare E. Agbamu, CRMS is director of reverse mortgages at Minneapolis-based AdvisorNet Mortgage LLC. A member of the BusinessWeek Market Advisory Board, Agbamu is author of Think Reverse! and more than 100 articles on reverse mortgages. Through his advisory firm, ThinkReverse LLC, Agbamu advises financial professionals, institutions and regulators across the country. In a 2007 national report on reverse mortgages, the AARP cited Agbamu’s work. He can be reached by phone at (612) 436-3711 or (612) 2039434, and e-mail at or Visit author Atare E. Agbamu’s blog at for his thoughts and insights on the reverse mortgage marketplace.

heard on the street

continued from page 16

ongoing information systems maintenance and services, customer service and policy administration support to Triad after the closing. Triad will continue to directly manage loss mitigation and claim activity during its run-off and will retain its personnel in the loss management, quality assurance and corporate areas to perform these functions. “The acquisition of Triad’s operating platform is the next major step in the formation of Essent’s mortgage insurance business, which is being created to support qualified borrowers who can afford a home, but may not have the funds for a large downpayment,” said Mark Casale, president and chief executive officer of Essent. “With this transaction, we can begin to provide mortgage insurance in the near future on a proven technology and operating platform in which our clients and regulators can have utmost confidence.” For more information, visit or

ISGN agrees to acquire Fiserv’s Loan Fulfillment Services business

Prommis Solutions LLC, a provider of default processing services, announced that it will now perform full-service loss mitigation solicitation and fulfillment services for mortgage lenders, servicers, insurers, investors and law firms through its subsidiary, Prommis Homeownership Solutions Inc. The loss mitigation teams at Prommis work directly with clients and their borrowers to solicit, facilitate and execute all types of loss mitigation programs including Home Affordable Modification Program (HAMP) and Homeowners Affordability and Stability Plan (HASP) waterfall analyses, repayment plans, loan modifications, HomeSaver Advance (Fannie Mae), partial claims, short sales, deeds-in-lieu of foreclosure and bankruptcy loss mitigation. As the product spectrum and options for borrowers increase and change, Prommis Homeownership Solutions works closely with clients to quickly update its suite of services when needed. Prommis Homeownership Solutions assists clients in meeting the changing regulatory and compliance needs of the default services industry while also maintaining a cost-effective balance of staff and outsourced services. For more information, visit

ServiceLink announces corporate rebranding initiative

• Senior Underwriter • *Virtual Mortgage Loan Officers (VMLOs) • *In-House Mortgage Loan Officers (MLOs) • *Team Leaders/Sales Managers

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244 Fifth Avenue Suite P 206 New York, NY 10001-7604 Toll Free: 888-833-5478 Direct Line: 718-502-6563 Fax: 212-710-4326 www.WallStreetList.Com


continued on page 21

• Production Manager


ServiceLink, the national lender platform for Fidelity National Financial and provider of origination and default services, has announced a corporate rebranding initiative. With this rebranding, ServiceLink has maintained its name, but has updated the logo, incorporating both the Fidelity colors and brand. The initiative consolidates all product offerings of origination, default, technology and business consulting under the new ServiceLink brand. It also better aligns the company’s integral position within Fidelity National Financial and highlights its robust offerings that drive performance through the life of the loan. “Our national lender platform and management team have been serving lenders and servicers for the past two decades,” said Jeff Coury, ServiceLink president and CEO. “Our name has always been synonymous with the highest levels of customer service. This rebranding changes our logo and colors but does not change our Serve First culture and commitment to providing the products and support clients need to drive performance through the life of the loan.” “Given ServiceLink’s momentum and its position as Fidelity National Financial’s

• Operations Manager 

ISGN Corporation, a provider of technology products and services to the U.S. mortgage market, announced that its subsidiary, ISGN Solutions Inc., together with its parent company CFCL Technologies Ltd., has signed a definitive agreement to acquire the Loan Fulfillment Services business of Fiserv Inc. Financial terms of the transaction were not disclosed. ISGN is a mortgage solutions company that offers lenders, brokers and servicers a broad range of residential mortgage products and services to support various stages of the loan life cycle, including loan origination, title and settlement services, loan servicing and default management. Fiserv’s Loan Fulfillment Services provides financial institutions with outsourced home equity loan fulfillment services, including broker price opinions, closing and settlement services, fee appraisals, flood and title certification, home retention programs, portfolio and vendor management solutions, and related services. “Once the transaction is complete, the combined entity will give our customers a suite of innovative products and services dedicated to the mortgage industry,” said Krishna Srinivasan, CEO of ISGN. “ISGN is now poised to become a leader that helps customers manage all aspects of the borrower experience and loan profitability.” The acquisition, which is subject to customary closing conditions, is expected to close within the next 30 days. At that time, ISGN will communicate its plans to integrate the business into its existing operations. Under the terms of the definitive agreement, Fiserv will receive a minority ownership interest in CFCL Technologies Ltd. For more information, visit or

Prommis performs loss mitigation through its subsidiary

United Northern is Seeking Highly Qualified, Experienced Mortgage Professionals To Grow as We Grow


news flash

continued from page 18

impact of FAS 166 and FAS 167. We and many other trade organizations have been consistent in our comments to both FASB and IASB that all standards related to financial instruments should be worked on jointly and converged on an accelerated basis.” “FAS 166 and FAS 167 will require hundreds of billions of dollars of assets to come onto the banks’ balance sheets on Jan. 1, 2010,” said John A. Courson, MBA’s president and CEO. “These assets would immediately require an allocation of capital under the regulatory capital rules proposed. Coming at a time when regulatory capital is already a scarce resource, it may hinder the current economic recovery underway.” For more information, visit and

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.



ities of prior private label residential mortgage-backed securities (MBS) and commercial mortgage-backed securities (CMBS) be put on the balance sheet of the issuer, servicer or special servicer for all deals prior to Jan. 1, 2010. These new guidelines will also apply to all deals commencing on or after that date. In the joint letter, CMSA and MBA recommend that the regulators grant regulatory capital relief if a security meets the following structure: If the primary beneficiary is the transferor, the transfer meets all other criteria for sale accounting under FAS 166; the beneficial interest holders of the Variable Interest Entity (VIE) have no recourse to the general credit of the primary beneficiary other than standard representations and warranties; the VIE’s assets can be used only to settle the obligations of the VIE; and there are no explicit arrangements or implicit variable interests that could require the primary beneficiary to provide financial support to the VIE, other than servicing advances, which are only required if the servicer deems them to be collectible. “While the International Accounting Standards Board hasn’t yet issued its FAS 166 and 167-equivalent reporting standards, there are significant differences in approach between FASB’s and the IASB’s exposure drafts,” said Dottie Cunningham, chief executive officer of CMSA. “This should serve as further reason to delay the regulatory capital


Built By Originators for Originators

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NCLC’s “Sub-Prime Revisited:” The Cheapest Shot By Atare E. Agbamu, CRMS

For good reasons, it is open season on sold abusive annuity contract(s) by Wall Street, bankers and their sidekicks third-parties unrelated to James B. in the mortgage-lending food chain, Nutter Company. Yet the ‘report’ makes but Americans still value balance and James B. Nutter Company look sinister fairness in their public discourse. That for doing its legitimate business of is why I believe “Sub-Prime Revisited,” underwriting reverse mortgages. In the ‘report’ released on Oct. 6 by the other words, if you get mugged at National Consumer Law Center, is a home after withdrawing a pile of cash one-sided editorial with a regulatory from your neighborhood bank, the policy agenda built on generalizations bank, not the muggers, is responsible and extrapolations. for your misfortune. This is the kind of Underlying the 28-page report is an ‘logic’ that permeates the much-hyped insidious and condescending subtext: NCLC ‘report.’ [Full disclosure: I have Reverse mortgage lenders never worked for (or broand brokers are crooks and kered a reverse mortgage seniors need more governloan through) Wells Fargo ment protection because or James B. Nutter they are stupid. Seniors are Company]. smart, and most reverse Among other generalmortgage lenders and broizations, the ‘report’ regurkers are decent, ethical gitates “reverse mortgages professionals. are complicated” misconLet’s look at the ‘revelaception. Reverse morttion’ that major subprime gages are simply home lenders have recently equity loans without migrated to reverse mortmonthly repayments. They “In other words, if gages to reap profits lost in are no more “complicatyou get mugged at the sub-prime bust. While ed” than traditional forhome after withit is conceivable that some ward mortgages or other drawing a pile of ‘sub-prime’ lenders have forms of financing. It is cash from your jumped into reverse morttrue that they are different neighborhood bank, gages, the major lenders and shrouded in misinformentioned in the report the bank, not the mation fed by half-baked are reverse mortgage pio- muggers, is responsireports, such as “Subneers. Wells Fargo’s Prime Revisited.” ble for your misforinvolvement in reverse tune. This is the kind Furthermore, the report mortgages dates back to of ‘logic’ that permelooks like an attempt to 1991 through Directors ates the much-hyped find evidence for U.S. Mortgage Corporation in Comptroller John Dugan’s NCLC ‘report.’” California. unfortunate remark in Directors Mortgage Corporation June, comparing reverse mortgages with was one of 50 lenders selected in a “sub-prime.” As I wrote then in response lottery for the original Federal to Mr. Dugan, “If sub-prime loans had the Housing Administration (FHA) Home layers of consumer protection built into Equity Conversion Mortgage (HECM) reverse mortgages, there would have pilot program. Directors Mortgage was been no ‘sub-prime crisis.’” subsequently swallowed by Norwest In an Oct. 16 Webcast on AARP’s Mortgage, which later merged with “Inside E Street,” hosted by Sheilah Wells Fargo. So Wells Fargo is not a Kast, Rep. Barney Frank of new player in reverse mortgages, nei- Massachusetts, chairman of the House ther is James B. Nutter Company. Financial Services Committee, disJames B. Nutter Company originated missed Dugan’s sub-prime analogy, the first FHA reverse mortgage in declaring that, with reverse mortgages, 1989. It is a conservatively-run, fami- the “evidence and results are different ly-held FHA lender that, to my knowl- from sub-prime.” Rep. Frank drew edge, was not a ‘sub-prime’ lender. Kast’s attention to the new layers of It’s no secret that Wells Fargo was a consumer safeguards wired into reverse major sub-prime lender through its mortgages under the Housing and sub-prime unit, but does that mean its Economic Recovery Act (HERA) of 2008, reverse mortgage division (as well as its such as the cap on lender/brokers fees other business units) should be called and the prohibition on cross-selling into question for the alleged wrongdo- reverse mortgages with annuities and ing of its sub-prime unit? Should the other financial products. See the link to consumer advocacy industry and con- the AARP Webcast online at sumer advocates be lambasted because of ACORN’s recent troubles? mortage_inside_e_street/. According to the report, James B. The Great Recession of 2008-2009 Nutter Company underwrote a reverse mortgage for a borrower that was later continued on page 25

heard on the street

continued from page 19

only national lender platform, we believe now is the right time to launch the rebranding of the company,” said Randy Quirk, Fidelity National Financial president. “The new look more fully connects the strength and stability of Fidelity National Financial to ServiceLink’s brand.” For more information, visit

Radian makes the paperless move with Prime Alliance

continued on page 26

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Lender Processing Services Inc. (LPS), a provider of integrated technology and services to the mortgage and real estate industries, has announced its Mortgage Servicing Package (MSP) supports all requirements of the Second Lien Modification Program (2MP) administered by Fannie Mae. Inherent in MSP is functionality to support the steps required to modify a second lien, when the first is being modified under the Home Affordability Modification Program (HAMP), including capitalizing

MRG Document Te c h n o l o g i e s (MRG), a provider of mortgage technologies to banks, credit unions and other lenders, announced that its MIRACLE Online electronic document preparation and compliance software has been fully integrated with OpenClose’s Web-based, end-to-end loan origination software (LOS), LenderAssist. Users of LenderAssist can now access compliant document packages and electronic delivery solutions from MRG through a single sign-on built into the LOS. The partnership streamlines the loan origination process by integrating data exchange between the two systems to eliminate the need to re-key data. “Mortgage lenders are facing a number of hurdles these days and need a loan origination system they can rely on to be compliant no matter what legislation or regulation was just passed or what state they operate in, “ said JP Kelly, president of operations for OpenClose. “Through



LPS announces full compliance with Fannie’s second lien mod program

MRG integrates with OpenClose’s LenderAssist LOS

We are the lender, and final decision maker, not a broker. 

Radian Guaranty Inc., the mortgage insurance subsidiary of Radian Group Inc., has announced its integration with the Prime Alliance loan origination platform, an end-to-end, paperless mortgage technology solution for the credit union industry. The Prime Alliance platform provides a unique, “anytime, anywhere, anyone” mortgage lending technology specifically tailored for the credit union community. Through any Internet-connected PC, credit union loan officers and mortgage staff can gain up-to-theminute information on their loans, from origination through closing. “Prior to this, Prime Alliance customers had to leave the system to order Radian mortgage insurance,” said Tony Bruschi, CMB, vice president of secondary marketing at Radian. “But with this integration, Radian has further demonstrated its commitment to the credit union segment—40 percent of which use Prime Alliance for their loan origination needs—and made it easier for their users to leverage the value of Radian’s mortgage insurance options.” Radian is offering its exclusive Free After Five product through the platform, which allows for automatic mortgage insurance termination after five years, provided the borrower has maintained a good payment history. Additionally, Prime Alliance customers will automatically qualify for Radian’s Platinum Guidelines Program, which offers more flexibility than the company’s Standard Guidelines Program. For more information, visit

accrued interest and servicing advances, supporting escrow accounts, reducing interest rate, extending term, forbearing principal and setting up the trial period. “Our teams have been working tirelessly to enhance MSP to fully support servicers as they complete HAMP modifications,” said Dan Scheuble, co-chief operating officer, LPS. “By servicing second liens on MSP as well as first mortgages, servicers can take advantage of the full functionality needed to participate in the 2MP program. We are proud to work with servicers in their HAMP and 2MP efforts to lower payments on both first and second lien mortgages.” In 1999, LPS boarded its first home equity lines of credit onto MSP with full escrow functionality available for those loans. In addition to supporting escrow accounts, MSP has functionality to establish escrow cushions, automate escrow refunds, spread shortages and ensure annual compliance and disclosures. This powerful functionality is available for traditional mortgages, as well as home equity products and other second liens. “We recognized that since home equity products were backed by collateralized assets, escrow accounts were critical, especially for those in the first lien position,” said Scheuble. “Back then, it was a key risk management strategy; now it is required, and we have proven over the last decade that MSP can fully support this escrow requirement.” For more information, visit





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Very competitive rates, common sense underwriting in 48 hours, wet funding with docs...what more can I say? - Jason Roberts St. Louis, MO Our semi-annual BranchPartner Master Mind Meetings are what really motivate me. Great mentoring and loads of business building ideas coupled with the hands on “How to.” - Momi Pointer Tustin, CA Is there another company that has as many Underwriters has Loan Processors? Greg has turned that proverbial bottleneck into a slick funnel. Two days for a decision. Great! - Kevin Hodge Hunt Valley, MD

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The J. Berman Group launches iPhone calculator app MortgageZen

NYLX releases automated investor locking application

continued on page 27


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Interthinx has announced the de velopment of a new proprietary risk analytics tool based on income verification results and integrated them into FraudGUARD, its premiere loan-level fraud detection tool. In addition, lenders will now have the ability to automatically and manually place 4506-T orders for income verification by the IRS directly through FraudGUARD. The integration and display of 4506-T results within FraudGUARD provides an added level of risk mitigation and helps lenders ensure that false income information wonâ&#x20AC;&#x2122;t lead to the approval of loans with a higher likelihood of default. â&#x20AC;&#x153;Technology has made it easy to forge or procure documents that can fool even the best loan underwriters, and Interthinx has noted an increase in fraudsters using these forged documents to falsify assets and income,â&#x20AC;? said Connie Wilson, executive vice president of Interthinx. â&#x20AC;&#x153;This type of fraud is dangerous because it can make ratios used to underwrite loans virtually meaningless. Income verification with the 4506-T service has become a prefunding requirement for many lenders, and now Interthinx has made it easier and faster to attain results.â&#x20AC;? According to the Interthinx Mortgage



NYLX, a provider of automated mortgage data applications and solutions, has released AppNavigator, a cross platform automated mortgage loan locking application to automate the flow of high volume, best effort lock requests to investors. In addition, through data validation and profiling, an entire pipeline of lock requests can be locked or distributed to secondary resources as appropriate. â&#x20AC;&#x153;AppNavigator is so customizable, it can literally be designed to work in any secondary process and with any secondary systems. Loan lock detail is captured, populated on investor sites and flowed back into secondary systems for a complete closed loop process,â&#x20AC;? said Paul Griffin, developer of AppNavigator. Current NYLX customer, Cornerstone Mortgage, was the first lender to deploy AppNavigator. Driven by the need to eliminate human error, the firmâ&#x20AC;&#x2122;s president, Mike Powell, was looking to replace unpre-

Interthinx integrates new income analytics into FraudGUARD


The J. Berman Group announced the launch of MortgageZen, a blended rate mortgage calculator for the iPhone. MortgageZen saves time and helps mortgage professionals provide a more sophisticated financing discussion with their customers. â&#x20AC;&#x153;We developed this application with the mobile mortgage originator in mind,â&#x20AC;? said Jason Berman, principal of The J. Berman Group. â&#x20AC;&#x153;The idea for MortgageZen came from a desire to have a quick and simple way to calculate the weighted average interest rate of an existing first and second mortgage. While itâ&#x20AC;&#x2122;s not a difficult calculation, it can be cumbersome to get the answer quickly, especially when youâ&#x20AC;&#x2122;re mobile and the tools to calculate a blended rate arenâ&#x20AC;&#x2122;t readily available.â&#x20AC;? The J. Berman Group is busy working on plans to extend the functionality and utility of MortgageZen and welcomes all feedback and suggestions. MortgageZen is now available in the iTunes Store. For more information, visit

dictable, manual processes and improve quality. â&#x20AC;&#x153;Pricing will make or break your business, with the cost of mistakes starting at about $1,000. We needed a solution that could accurately and quickly lock our pipeline and allow secondary resources to focus on higher value activities.â&#x20AC;? NYLX saw the benefits Cornerstone Mortgage was experiencing and wanted to help distribute this value more broadly to others in the industry. Joining forces with Lenders One, a national alliance of independent mortgage bankers, NYLX launched the application at its recent mid-year member conference. â&#x20AC;&#x153;We partnered with NYLX in 2006 to provide our members with a best in class product and pricing engine, knowing the company understands the needs of smallto mid-sized lenders,â&#x20AC;? said Luke Pille, Lenders One director of national programs. For more information, visit



How to Play the Fed Card It’s no secret that mortgage rates are at record lows due to the Federal Reserve’s unprecedented intervention in the mortgage markets. The question is: How do we utilize this information to motivate fence-sitters to buy a home or refinance their mortgage right now?



Understand and communicate the facts


According to the latest numbers available at the time of this printing, the Fed has already purchased nearly $1 trillion in mortgage-backed securities (MBS) since January 2009. Furthermore, they still have more than $250 billion allocated toward their MBS “While many savvy purchase program that they will be wrapping up by clients have taken the first quarter of 2010. The bottom line here is that the opportunity to the Fed is the single largest purchaser of mortgagebuy a home in this backed securities in the marketplace today. This has low interest rate resulted in mortgage rates dropping by more than a environment, there are still a large num- full percentage point as compared to where they ber of people that are were prior to the Fed’s interventions in the market. hoping for home val- After all, it’s not every day that the Fed spends a whopping $1.25 trillion buying mortgages! ues to decline even While many savvy clients have taken the opportufurther before they nity to buy a home in this low interest rate environpurchase a home.” ment, there are still a large number of people that are hoping for home values to decline even further before they purchase a home. Here is some scripting that you can use to play the “Fed card” and demonstrate why it makes more sense for clients to buy now.

As you can see, if you buy right now and take advantage of the Fed’s $1.25 trillion mortgage rate subsidy, you will save more than $43,000 over the life of your mortgage. This is double the amount of money you would save on your purchase price if home values declined by 10 percent over the next 12 months! From a cashflow perspective, you would save $66 per month by buying now, even though your mortgage balance is higher as compared to column number two. Keep in mind that column number one also includes a three percent seller concession because most sellers are very motivated to negotiate in today’s marketplace. Many sellers will likely lose this incentive to negotiate once home values begin to rise again. The bottom line here is that even if you win the bet that home values may decline by another 10 percent from today’s levels, you would lose the broader financial gamble because you’d be missing out on the Fed’s mortgage rate subsidy. After all, it’s not every day that the Fed spends a whopping $1.25 trillion to subsidize mortgage rates! But here’s an interesting question: what if you wait 12 months and home values stay the same? Buy today Purchase price Downpayment % Downpayment $ Mortgage LTV Mortgage balance Points paid by the seller % Points paid by the seller $ Mortgage interest rate Mortgage payment Monthly payment savings Closing costs

$250,000 20% $50,000 80% $200,000 2.25% $4,500 4.50% $1,013 $186 $3,000

Wait 12 months & prices stay the same $250,000 20% $50,000 80% $200,000 — — 6.00% $1,199 — $3,000

Closing costs paid by seller Buyer’s downpayment & costs

$3,000 $50,000

$0 $53,000

Interest paid over five years Savings over five years

$43,118 $14,937

$58,055 —

Interest paid over 10 years Savings over 10 years

$81,783 $29,481

$111,264 —

Interest paid over 30 years Savings over 30 years

$164,813 $66,863

$231,676 —

Paint a picture of “What if you don’t?” Here is a chart illustrating what would happen if you buy a $250,000 home today, using the Fed’s $1.25 trillion mortgage rate subsidy. The alternative would be to wait 12 months while hoping for home values to decline by another 10 percent. Buy today Purchase price Downpayment % Downpayment $ Mortgage LTV Mortgage balance Points paid by the seller % Points paid by the seller $ Mortgage interest rate Mortgage payment Monthly payment savings Closing costs

$250,000 20% $50,000 80% $200,000 2.25% $4,500 4.50% $1,013 $66 $3,000

Wait 12 months & prices go down $225,000 20% $45,000 80% $180,000 — — 6.00% $1,079 — $3,000

Closing costs paid by seller Buyer’s downpayment & costs

$3,000 $50,000

$0 $48,000

Interest paid over five years Savings over five years

$43,118 $9,131

$52,249 —

Interest paid over 10 years Savings over 10 years

$81,783 $18,354

$100,137 —

Interest paid over 30 years Savings over 30 years

$164,813 $43,695

$208,508 —

As you can see, if you buy right now and take advantage of the Fed’s $1.25 trillion mortgage rate subsidy, you will save more than $66,000 over the life of your mortgage. In other words, if you wait and home values don’t decline, don’t increase, but stay exactly the same as they are today, you would lose $66,000! From a cashflow perspective, you would lose $186 per month by waiting 12 months. Now Mr. or Mrs. Client, you tell me … with odds like these, does it make more sense to buy now or wait for the Fed’s $1.25 trillion mortgage rate subsidy to expire? Gibran Nicholas is the founder and chairman of the CMPS Institute, which administers the Certified Mortgage Planning Specialist (CMPS) designation. The CMPS Institute has enrolled more than 5,500 members since its founding in 2005. Gibran is also the chairman of Published Daily, a customizable online magazine, newsletter and marketing service that helps professionals transform their clients and prospects into a referral-generating sales force. He may be reached at (888) 6089800, ext. 101 or e-mail Visit author Gibran Nicholas’s blog at where he shares his insights on economics, real estate and financial issues, including the current mortgage and credit crises.

the cheapest shot

same lenders and brokers the NCLC ‘report’ calls “predators” in 2009 with isolated anecdotal evidence from 1993, 2005 and 2006.

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had deeper philosophical, systemic and socioeconomic roots than the excesses of the sub-prime mortgage industry. Even Federal Reserve Chairman, Ben Bernanke, has conceded this point: “But we know now this was much bigger than sub-prime lending. It was a credit bubble much more broadly construed. The sub-prime crisis triggered a much broader retreat from credit and risk-taking. It became a much bigger deal than I anticipated. And to top of that, we didn’t—nobody really did— understand the interconnections of offbalance sheet vehicles and complex credit derivatives and all those other things that followed.”1 Clearly, an October 2009 report that had to go back to 1993, 2005 and 2006 to find isolated anecdotal evidence of alleged wrongdoing has no legs to stand on. Mind you, I do not minimize the gravity of the three or four instances of alleged wrongdoing mentioned in the report. Our legal system can handle them. For some perspective on HECM and reverse mortgages, let’s consider these facts:

tomer satisfaction among those who became reverse mortgage customers was even higher, as 93 percent were satisfied, 78 percent very satisfied, and 15 percent somewhat satisfied (page 86).  Here is the home run: “Even [senior] homeowners who did not become borrowers gave lenders positive ratings, as 75 percent were satisfied, of whom 47 percent were very satisfied, and 28 percent somewhat satisfied” (page 86). Again, these are the

The 2007 AARP national report findings on senior homeowners’ satisfaction with reverse mortgages and reverse mortgage lenders and brokers are consistent with previous studies attributed to Fannie Mae and others on customer satisfaction with reverse mortgages. There are probably not many products in the world with customer satisfaction consistently in 90 percent plus range. Yes, there is evidence of reckless marketing. Yes, there is potential for senior abuse in the industry as in any other industry catering services or

goods to seniors. And yes, reverse mortgage investors, lenders and brokers are driven partly by the profit motive. In America, there is nothing wrong with legitimate profit! To assert without qualification that reverse mortgage lenders and brokers are “predators” who are out to steal seniors’ home equity, as the NCLC report suggests, is grossly unfair because the industry is full of committed, passionate, decent, idealistic do-gooders who go the extra mile everyday to help seniors and their families. Because they strike fear and create confusion in seniors and their families about reverse mortgages, these irrecontinued on page 26

 Call Now: 1-877-773-7178 

 HECM reverse mortgages and the reverse mortgage industry have been around for 20 years this year.  With more than 500,000 HECMs and proprietary reverse mortgages originated, there has been no crisis in 20 years.

 In the AARP national report, cus-

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 A major, detailed AARP-sponsored 208page national report on reverse mortgages in 2007said that nine out of 10 senior homeowners were “satisfied with their experience with their reverse mortgage lenders,” (“Reverse Mortgages: Niche Product or Mainstream Solution?” page 86). These are the same lenders and brokers that the NCLC ‘report’ called “predators.”

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 Securitization of proprietary jumbo reverse mortgages dates back to 1999, and “No securitized reverse mortgage classes have suffered any ratings downgrades because the rating agency criteria are very conservative.” [Joseph J. Kelly and Michael McCully, pioneers in reverse mortgage securitization in the U.S., soon to be published article for my “HECM at 20” Series] 

 With the exception of Ginnie Mae’s HECM mortgage-backed securities (HMBS), there has been no securitization of reverse mortgages since 2006 (the ‘report’ says “securitization [a sinister tool in its view] … is becoming commonplace in the reverse mortgage industry.


heard on the street

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partners like MRG, we can offer our customers all the tools necessary to confidently close more loans and serve more borrowers in every possible market.” MRG offers a browser-based system for the preparation and delivery of compliant document packages, electronic disclosures, loan modifications and other services for mortgage lenders, banks and credit unions nationwide. MRG guarantees that its products are in compliance with the most recent legislative and regulatory changes. “OpenClose users now have easier access to compliant mortgage closing documents that have been thoroughly vetted by MRG’s staff attorneys,” said Laura LaRaia, an attorney and director of customer service at MRG. “OpenClose users also have the ability to offer their borrowers electronic disclosure delivery options in order to both maintain compliance and shorten the disclosure and closing timeline.” For more information, visit or



Stewart Lender Services organizes to support full lifecycle of loan


Stewart Lender Services (SLS), a wholly owned subsidiary of Stewart Title Company, has announced implementation of a new enterprise-wide business model that will support national lenders, investors and servicers throughout the lifecycle of a loan. The company has strategically aligned its businesses, opened new customer support centers, and added a number of key executives to enable it to better serve its base of customers throughout the United States. “Stewart has made a significant commitment to our continued growth in serving the real estate finance market,” said Jason Nadeau, SLS president and chief executive officer. “Our challenge was to build a full suite of services for the lender without creating the separate silos that are often found in companies such as ours. We have been able to blend and integrate those competencies into cost-effective, fluid performance. We now can provide sound customer solutions from origination all the way through to asset disposition.” Stewart Lender Services was realigned to streamline its operations and ensure that all the various lender service offerings take advantage of a unified base of staff and technology capabilities. What evolved were complementary solutions for loss mitigation and asset management and disposition. The key factor enabling successful implementation was providing customers centralized processing from a growing list of support operations. Business centers in Dallas, San Diego, Irvine and Phoenix were added to existing operations in Houston and Tampa.

Additionally, a loss mitigation call center in San Diego supplements the Houston call center. And, existing asset management operations in Tampa have been bolstered by a new Irvine-based operation. “I think our commitment to our customers is reflected in how we have organized our business and the increased number of support centers,” said Nadeau. “But I think it’s also shown in the key staff members we have added to our team. We have a knowledgeable, experienced leadership group that is driving hard to offer our customers a solid alternative to the same old players.” For more information, visit

Wells Fargo and Prudential Douglas Elliman Real Estate launch DE Capital Mortgage Wells Fargo Ventures LLC, a wholly-owned subsidiary of Wells Fargo Bank NA, and Prudential Douglas Elliman Real Estate have announced a joint venture to originate and fund mortgage loans for Prudential Douglas Elliman and other New York customers looking to finance or refinance their home. The jointlyowned mortgage company, DE Capital Mortgage LLC, replaces Preferred Empire Mortgage Company, which maintained wholesale relationships with a nationwide network of financing institutions for Prudential Douglas Elliman. DE Capital Mortgage will serve as the financing component of Prudential Douglas Elliman’s core services. Prudential Douglas Elliman’s family of services includes real estate, mortgage, title and property management. “We’ve listened carefully to the needs of our clients, and feel strongly that we provide them with the financial services they require and work with the biggest and best in the business, Wells Fargo,” said Dottie Herman, president and chief executive officer of Prudential Douglas Elliman. “With this joint venture, our clients will enjoy the ability to obtain a mortgage directly from our affiliate, DE Capital Mortgage—with competitive rates, hightouch service, a broad product line and convenience.” Herman said the selection of Wells Fargo as Prudential Douglas Elliman’s affiliate was based on an alignment of core values, and proven track record of supporting customer and sales-professional needs. “Prudential Douglas Elliman has remained strong in a challenging environment and has a high-talent team,” said Joe Jackson, head of Wells Fargo Ventures. “We’re glad to be able to add top talent to the team with our extensive mortgage expertise—and experience with the joint venture model.” For more information, visit

AAG announces actor Peter Graves as reverse mortgage spokesperson

mortgages and promote the personal and patient service AAG provides.” For more information, visit

American Advisors Group (AAG) has selected veteran film and television actor Peter Graves as its spokesperson for a national media campaign. The new television commercials on national cable and broadcast networks will further promote the value and benefits of reverse mortgages for American seniors and air on cable and national networks. Graves’ appearance kicks off the second-half of a two-part national media campaign, which was begun last month by AAG—a campaign that is replete with personalized stories of how reverse mortgages have provided much needed relief from their current financial hardship. The new series of TV ads coincides with the reverse mortgage originator’s release of a new informational DVD, brochure and Web site launch. “It’s wonderful to be part of a company that places customers first and is assisting seniors across the country to improve their lives—AAG really is helping seniors live a better life,” said Graves. Graves, who was a favorite amongst senior audiences in AAG’s pre-selection testing, is best-known for his starring role in the television series Mission: Impossible. Graves played lead role, Jim Phelps, the sometimes gruff leader in the series, which ran from 1967-1973 and again in a revival, from 1988-1990. In 1971, he won a Golden Globe for Best TV Actor for the role. Graves has also been nominated for three other Golden Globes and an Emmy. He has appeared in 51 films and made more than 130 TV and other appearances since his career began in 1941. His recent roles include Men in Black in 2002 and host of Biography on A&E for 58 episodes from 1994-2006. “We’re very excited to have a Hollywood legend like Mr. Graves representing AAG and this important financial product for seniors,” said Reza Jahangiri, chief executive officer of AAG. “The national television campaign will better educate seniors about reverse

Clayton Staffing Solutions named Lenders One preferred vendor partner

the cheapest shot

Clayton Staffing Solutions Group, a subsidiary of Clayton Holdings Inc. and a provider of specialty remote and on-site staffing to the mortgage and securities industries, has announced that it has been selected as the preferred staffing provider by Lenders One Mortgage Cooperative, a national alliance of more than 145 mortgage bankers. Through this agreement, Clayton Staffing Solutions will provide contract Federal Housing Administration (FHA) and conforming underwriting support to Lenders One’s membership to fulfill either temporary or full-time capacity issues. The company will also be able to provide professional support for closing, processing, quality control, default management and servicing functions. These staffers can be located on-site at Lenders One members’ offices, or remotely based at Clayton’s National Operation Center, a 55,000-sq. ft. facility in Tampa, Fla. “In selecting a preferred outsourcing staff provider, we were looking for a partner that could immediately, as well as effectively, help our members cope with the changing demands of the marketplace,” said Luke Pille, Lenders One director of national programs. “Clayton maintains a database of more than 10,000 vetted underwriters and processors, including a significant number of FHA underwriters. Its resources, expertise and the technology will help our members capitalize on the current market opportunities, and longer term will give them the option of converting their fixed labor costs to variable ones.” “Clayton’s mission is to help clients solve business challenges, so we were extremely pleased to be selected by Lender One to help their members deal with capacity issues” said Paul T. Bossidy, chief continued on page 34

continued from page 25

sponsible and inaccurate “reports” and the me-too articles they generate in the media are hurting seniors and their families who are in dire need of cash and for whom reverse mortgages may be the only option. The NCLC report is a disservice to the cause of a balanced civic discussion on how to make reverse mortgages and the reverse mortgage industry stronger for baby boomers’ (and for America’s) financial health in an era of uncertain retirement finance. It is the cheapest of cheap shots.

LLC. A member of the BusinessWeek Market Advisory Board, Agbamu is author of Think Reverse! and more than 100 articles on reverse mortgages. Through his advisory firm, ThinkReverse LLC, Agbamu advises financial professionals, institutions and regulators across the country. In a 2007 national report on reverse mortgages, the AARP cited Agbamu’s work. He can be reached by phone at (612) 436-3711 or (612) 2039434, and e-mail at or

Author and columnist, Atare E. Agbamu, CRMS is director of reverse mortgages at Minneapolis-based AdvisorNet Mortgage

Footnote 1-Wessel, David. In Fed We Trust (New York: Crown Business, 2009), page 129.

new to market

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Fraud Risk Report for second-quarter 2009, the employment and income fraud index decreased by 33 percent from second-quarter 2008. The report analysis concludes the decrease in the index is due in part to the increased use of the 4506-T service by lenders nationwide. “We’re thrilled to see the industry taking a bite out of income and employment fraud,” added Mike Zwerner, senior vice president of business development and marketing for Interthinx. “The mortgage industry must not settle for this decrease. We must continue to improve our ability to prevent fraud through underwriting guidelines that include mandatory income verification from the IRS. The integration of the 4506-T service into FraudGUARD is helping lenders secure an access point where income fraud has previously crept into the transaction, and it secures it swiftly.” Lenders now have the ability to review results from both the IRS and Interthinx proprietary analysis directly within the FraudGUARD report. Additionally, the company reports the new enhancement will improve underwriting efficiencies for lenders by enabling a quicker response from the IRS through the use of the electronically uploaded consent forms with prepopulated information provided through FraudGUARD. For more information, visit

Fiserv releases Aperio Lending product and fraud risk mitigation solution

ket leading suite of financial crime risk management products through integration and delivery of our best-in-class fraud and anti-money laundering transaction and event monitoring systems. The latest releases that we are announcing today are a vital part of the delivery on this vision.” For more information, visit

PriceMyLoan tool helps lenders track current pricing PriceMyLoan has developed the Rate Sheet Expiration tool to assist mortgage continued on page 35


Shared Vision, Shared Success.SM Make Your Way With A Lender Committed To Leading Responsible Change Wells Fargo Wholesale Lending is dedicated to working with mortgage brokers who are committed to five key principles for long-term industry success: Responsibility: Ensure fair and responsible lending and borrower education are top priorities. Quality: Produce high quality loans. Controls: Better manage our collective risk and eliminate fraud. Excellence: Create, promote and adhere to industry-leading standards of excellence. Efficiency: Develop capabilities that drive greater efficiency and ease of use between our companies. Together, we will lead the way, helping to establish a foundation for a stronger, healthier and more responsible industry.







This information is for use by mortgage professionals only and should not be distributed to or used by consumers or other third-parties. Information is accurate as of date of printing and is subject to change without notice. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. © 2009 Wells Fargo Bank, N.A. All Rights Reserved. #64153 4/09


Share in this vision. For more information, tools, ideas and market insights visit our Shared Vision, Shared Success.SM web site located on 

Fiserv Inc. has announced the availability of its new Aperio Lending solution, an integrated, thin client loan origination platform for secured and unsecured loans, such as mortgage and home equity loans, car loans, education loans and staff loans. “Aperio Lending comes at exactly the right time for financial institutions concerned about consistency, process and control in lending,” said Nick Wilde, managing director, Asia-Pacific, bank solutions, Fiserv. “Aperio Lending simplifies and streamlines any complex loan origination process and provides integration with the front office, back office and external service providers. With a single, real-time view of the customer, Fiserv clients using Aperio Lending can improve their decisioning, enter the market faster with new products and deliver a more responsive service to their customers. In addition, the solution’s best-in-class business process, automated workflow and exception management provide better risk management and mitigation capabilities.” Aperio Lending is designed for integration with external parties such as credit bureaus. A checklist for document verification is standard, enabling

the bank to certify customer application audit satisfaction prior to funding, regardless of whether the application originates in the bank or externally. The solution is available neutral of core provider, but is pre-integrated with the Signature Bank Platform from Fiserv, as well as with Aperio CRM and business process management. Fiserv has also announced the availability of Fraud Risk Manager 4.6, the company’s newest version of its multichannel fraud detection and management solution. Also available is AML

Manager 4.6, an anti-money laundering solution. Both Fraud Risk Manager and AML Manager from Fiserv are designed to enhance and optimize financial institutions’ financial crime risk management operations by delivering fraud and anti-money laundering (AML) transaction monitoring solutions, integrated with a common platform for automated alert intelligence and investigation, case management and regulatory reporting. “At Fiserv, we are taking a ‘glass bottom boat’ approach to our risk management strategy—that is, to provide a complete and consolidated view of all risk and risk mitigation plans across the entire enterprise,” said John Filby, president of risk management solutions at Fiserv. “Our vision is to deliver the mar-




In this month’s “40 Under 40” feature, you will find a list of the top mortgage professionals under the age of 40, as voted on by their peers, who exemplify professionalism and top production in today’s housing market. Despite the rough waters of the U.S. economy and the ever-shifting landscape known as the mortgage industry, these 40 professionals have persevered in a time of great uncertainty. In assembling this list, we at National Mortgage Professional Magazine took some criticism when we began this endeavor. Many felt a list of this nature ignored many, and others felt that a list of this type is a thing of the past, but we firmly stood by our decision to assemble this group. Like the pioneers before them, these individuals are the ones who will carry the torch of professionalism in the year 2010 and beyond, fighting the daily barrage or regulatory and legislative pressure and negative coverage by the mainstream media as the culprits for the collapse of the U.S. economy. However, they forge forward, as they continue to lead by example and set the bar for education, professionalism and excellence in the mortgage industry. We’d like to congratulate all of the following individuals named to our “40 Under 40” list, in no particular order but alphabetical, and thank all the nominees for their participation in our first-ever “40 Under 40: The 40 Most Influential Mortgage Professionals Under 40” feature.


Brian Augustine, CRMS Capital Financial Bancorp Inc., Chief Executive Officer  Schaumburg, Ill. Phone #: (866) 386-3789 E-mail: Brian Augustine is currently chief executive officer of Schaumburg, Ill.-based Capital Financial Bancorp Inc., established in 1997, overseeing all financial and general ledger items for company. Brian graduated Northern Illinois University in 1992, with degrees in economics and communications. An active member of the Illinois Association of Mortgage Professionals (IAMP) and National Association of Mortgage Brokers (NAMB) since 1997, he is only one of 85 mortgage professionals to hold the Certified Residential Mortgage Specialist (CRMS) designation in the state of Illinois. Brian is a Political Action Committee Gold Club Member for IAMP, and his company was recently awarded Mortgage Company of the Year and nominated National Mortgage Broker of the Year. Brian helped pioneer his company’s “Green Lending” initiative, the “Free Home Owner Mortgage Benefit Program” for businesses and the “Union Advantage” Mortgage Benefit Program, for union members and families.

Timothy Baise, CMC Top Flite Financial, President and Chief Executive Officer  Williamston, Mich. Phone #: (517) 420-3684 E-mail: As president and chief executive officer of Top Flite Financial, an Inc. 5,000 company licensed in 32 states, Timothy Baise, CMC has been changing the lending industry, one person at a time, by being and staying in compliance with state and federal laws. While riding the edge or operating in grey areas may make for more short-term income, riding the straight and narrow line will produce long-term relationships, solid results and a permanent home for its employees and that is exactly what Timothy has done with Top Flite Financial. While most lending companies are downsizing or closing their doors altogether,

Top Flite Financial has been increasing revenue and expanded its operations through the toughest economic times the mortgage industry has ever seen, all this under the direction and leadership of Timothy Baise, CMC.

Hayes Barnard Paramount Equity, Founder Roseville, Calif. Phone #: (916) 290-9999 E-mail: Hayes Barnard founded Paramount Equity with two friends in 2003, with the goal of saving their neighbors money. Since then, Paramount has expanded to offer services in Oregon, Washington, Utah, Arizona, Virginia and across California. Under Hayes’ leadership, the firm has closed more than $7 billion in loans since the company’s inception, and Paramount has been recognized with several “A+ Employee Awards” from The Sacramento Business Journal. Dedicated to giving back, Paramount donates 4,300 employee hours each year to better the communities it serves.

Mark Bologna Department of Veterans Affairs Loan Guaranty Service, Director Phone #: (202) 461-9500 E-mail: Mark Bologna was appointed director of the Department of Veterans Affairs (VA) Loan Guaranty Service in January 2009. In this capacity, he is responsible for the national administration of the VA Home Loan Program, a program that guarantees more than 18 million loans totaling nearly $1 trillion since its inception in 1944. As director, Mark is also responsible for administering the Specially Adapted Housing Program, which provides grants to severely disabled veterans to modify or construct homes to meet their adaptive housing needs; and the Native American Direct Loan program, which provides direct loans to Native American veterans residing on Federal Trust land. He served as the director of VBA’s Office of Performance Analysis & Integrity (PA&I) from October 2006 until mid-January 2009. PA&I’s mission is to enhance service to veterans and their dependents by providing quality information that leads to improved processes and systems for benefits delivery, and to assure VA leaders and external stakeholders that benefits and services are provided only to those persons entitled to receive veterans’ benefits. Mark began his VA career in New Orleans as a loan specialist with the Loan Guaranty Program in 1993.

Joe Bowerbank Loan-Score Decisioning Systems, Senior Vice President of Marketing and Strategic Alliances  Irvine, Calif. Phone #: (949) 378-9685 E-mail: Joe Bowerbank has more than 14 years of marketing management experience in the technology and mortgage banking sector, helping to launch marketplace solutions, grow organizations, obtain technology adoption and build brands. He is a company-building marketing professional who understands what it takes to catapult growing ventures to the next level.

Currently, Joe is the senior vice president of marketing and strategic alliances at Loan-Score Decisioning Systems, an AUS vendor. Before joining Loan-Score, Joe was the vice president of marketing at Portellus Inc. Prior to Portellus, he headed marketing strategy at Commerce Velocity Inc., a mortgage AUS vendor, and prior to his time with Commerce Velocity, Joe was the director of marketing and market adoption at Electronic Distribution Networks Inc. (EDN), a software communications provider serving multiple vertical markets. Joe sits on California State University, Fullerton’s UEE Advisory Board for their sales and marketing program course development. He holds a BS in business administration with a concentration in marketing from California State University, Fresno and an MBA in entrepreneurial management from Concordia University, Irvine.

Nichole Browning Moneywise Home Loans, President Eagle, Idaho Phone #: (208) 272-1408 E-mail: Nichole Browning currently operates Moneywise Home Loans, located in Eagle, Idaho. She has been in the mortgage industry for seven years and is a native to the Boise, Idaho area. In 2003, Nichole received her bachelor’s degree in finance. In 2005, she was awarded “Loan Officer of the Year” by the Idaho Association of Mortgage Brokers (IAMB), a state affiliate of the National Association of Mortgage Brokers (NAMB). Nichole has spent the last five years as a board member of IAMB and has served on many of the association’s committees. She is currently president-elect of IAMB and will begin her term as association president in January 2010. When not at work, she can usually be found on the golf course or on the river with a fly rod.

Tim Davis The Originators Guide  Nashville Phone #: (615) 255-2352 E-mail:

Jeffrey T. Doyle is the chief executive officer of LoyaltyExpress, bringing the mortgage industry CustomerManager, a Web-based integrated CRM service with print and e-mail fulfillment. LoyaltyExpress also offers LoyaltyPrint, a Web-based online store for loan officers to access high-quality, personalized direct mail and closing gifts. CustomerManager currently has more than 5,000 subscribers and leverages world-class marketing automation capabilities through an easy user interface.

Ted Edginton is a member of the U.S. Bank Home Mortgage President’s Club, the elite sales team of U.S. Bank Home Mortgage in Southfield, Mich. This prestigious distinction speaks for Ted’s hard

Robert English Texas Mortgage Concepts, President & Broker  Arlington, Texas Phone #: (817) 460-8765 E-mail: Robert English is president and broker with Arlington, Texas-based Texas Mortgage Concepts, and was named 2009 Broker of the Year by the Texas Association of Mortgage Professionals (TAMP). Robert entered the mortgage business after many successful years as a professional real estate agent. Since making the transition to the mortgage industry, Robert has continued to offer his clients a mix of honest, down-to-earth guidance with a thorough knowledge of the area. He is a recipient of the National Association of Mortgage Brokers (NAMB) Lending Integrity Seal of Approval Recipient, a member of the TAMP board of directors, TAMP Membership Committee co-chair, and immediate past president of the Central Texas Association of Mortgage Professionals (CTAMP). Robert started out working for large banks like Union Planters, Regions and Wells Fargo before he found himself wanting to be a mortgage broker and eventually opened his own company.

Chris Frost Frost Mortgage Banking Group, Vice President and Business Development Manager  Albuquerque, N.M. Phone #: (505) 550-3912 E-mail: Chris Frost is the nephew of celebrated mortgage superstar Greg Frost and learned the mortgage business at Greg’s offices in Albuquerque, N.M. Chris attended New Mexico State University in Las Cruces, N.M., majoring in finance. He had worked part-time in commercial banking for three years to put himself through college. Chris spent a total of seven years in banking, culminating as assistant vice president and branch manager of the Bank of Albuquerque. He made his move to mortgage banking and Frost Mortgage Banking Group in December of 2002. Chris has been a top loan originator, sales trainer, sales manager, and now serves as Frost Mortgage Banking Group’s vice president and business development manager. Under Chris’s watch, he has helped grow the company from five local branches to 20 national branches encompassing 13 states. Chris and his team have another 12 branches committed and in the process of being vetted and approved by Frost’s parent company, PRMI. His team continues to strive for the divisional goal of 30 branches and $100 million per month in fundings. Chris has been instrumental in assisting Frost to become the number one division at PRMI.


Ted Edginton U.S. Bank Home Mortgage, Certified Mortgage Consultant  Southfield, Mich. Phone #: (248) 945-5292 E-mail:

Nick Ellis, CMC, CRMS founded Continental Funding Group Inc. (CFG) in 2004, and the company has not only maintained, but increased, revenue and has maintained a zero layoff policy. Nick went over a year with near-zero compensation from the company to ensure that he did not lay anyone off. He has been the secretary and interim treasurer for the Kentucky Association of Mortgage Professionals (KYAMP), formerly the Kentucky Mortgage Brokers Association (KMBA), since 2006, and volunteers his time with the National Association of Mortgage Brokers (NAMB), KYAMP and Junior Achievement. At the age of 26, Nick was Kentucky’s first individual to gain the Certified Mortgage Consultant (CMC) and Certified Residential Mortgage Specialist (CRMS) designations from NAMB. Nick has contributed to the second wave of mortgage legislation to pass in Kentucky, by working with all interested parties to help ensure integrity and consumer protection.


Jeffrey T. Doyle LoyaltyExpress, Chief Executive Officer Woburn, Mass. Phone #: (781) 897-2121 E-mail:

Nick Ellis, CMC, CRMS Continental Funding Group Inc., Founder Louisville, Ky. Phone #: (502) 371-5005 E-mail: 

Tim Davis is a 17-year veteran of the mortgage industry and host of the free podcast for loan originators, The Originators Guide ( In his podcast, he motivates, encourages and inspires loan officers to be their best. He also interviews guests and discusses new, innovative and real world marketing strategies. With an industry going through massive change, Tim does this to bring hope to loan officers everywhere. In addition, Tim has created several easy methods to implement high result marketing strategies that have helped originators gain new business in today’s market. Tim is an industry speaker, coach, author and originator.

work and dedication to his profession. Ted works with many top producing real estate agents through out the metro Detroit area and nationwide. The majority of his business transactions are referrals and repeat business from satisfied customers and business partners.


Mark Green Top of Mind Networks, President  Atlanta Phone #: (404) 943-9910 E-mail: Mark Green is the president of Atlanta-based Top of Mind Networks and is the brains and brawn behind Mortgage, a grassroots effort of loans officers and for loan officers to take back the industry from those who have damaged it and those who would. Mark is a selfless individual, and while just getting started, is sure to be a rising star. He created Top of Mind Networks in May 2003, after one mortgage professional too many failed to stay in touch after a transaction closed. Top of Mind Networks was created with the vision to provide customized, turn-key CRM solutions to mortgage professionals nationwide.

Scott Hardin Ascent Home Loans  Denver Phone #: (720) 341-9977 E-mail: Scott Hardin of Denver-based Ascent Home Loans is a highly-motivated manager who leads by example. Scott inspires his staff to achieve new heights in sales numbers, and to increase efficiency internally. With 15 years in the mortgage industry, Scott’s experienced is only outpaced by his willingness to learn and grow with the ever-changing mortgage industry.



Christopher G. Hurn Mercantile Capital Corporation, Chief Executive Officer/Co-Founder Altamonte Springs, Fla. Phone #: (866) 622-4504 E-mail:


Christopher G. Hurn is currently chief executive officer and co-founder of Mercantile Capital Corporation (MCC), a firm specializing in providing cash-on-cash return financing for small business owners and entrepreneurs buying commercial property. Christopher’s company was on the 2007 Inc. 500 list of America’s fastest-growing companies, ranking 245th with 951 percent growth over a three-year period. To date, MCC has closed commercial loans in 33 states for more than $385 million in total project costs—one business owner at a time, including numerous franchised concepts— and has been voted “Best Place to Work” by The Orlando Business Journal for four consecutive years. Christopher is a frequent speaker and writer, and has appeared in The Wall Street Journal, Inc. Magazine, BusinessWeek, The Los Angeles Times, Forbes, The Sacramento Bee, The Orlando Sentinel, Franchise Times and many other regional- and nationally-recognized trade publications, as well as five business books to date. He maintains a busy civic calendar as a board member with the Orlando Regional Chamber of Commerce’s Small Business Board and the Florida Hospital Foundation Board, as well his involvement with many other esteemed community organizations.

Daniel H. Jacobs Phone #: (704) 904-1263 E-mail: The chief executive officer of 1st Metropolitan Mortgage until August 2009, Daniel H. Jacobs is an executive who enjoys building and growing a company through a delicate combination of technology and systems implementation, smart infrastructure, and fostering a culture of hard work, loyalty, service, dedication and pride. Daniel grew 1st Metropolitan’s parent company from six offices and $100 million per year in production in 2000, to a 250branch $4.2 billion production company with a sterling reputation throughout the industry. 1st Metropolitan Mortgage was sold to an investment group in 2009.

Stephan Kachani Lone Oak Fund LLC, Vice President, Sales & Marketing  Los Angeles Phone #: (310) 826-2888 E-mail: Stephan Kachani is vice president, sales and marketing at Lone Oak Fund LLC, a private mortgage fund making short-term bridge loans between $250,000 and $10 million on commercial real estate properties in

California. Stephan is responsible for developing and managing hundreds of relationships throughout the state with institutional banks, commercial banks and real estate brokers, as well as with attorneys, accountants, estate planners, etc. Stephan brings a unique perspective to his role at Lone Oak, having spent many years on both the residential and commercial sides of real estate and as both broker and lender, generating more than $100 million in loans for Lone Oak before joining the firm late in 2002. Since then, he has closed more than $250 million in commercial real estate loans and generated close to 50 percent of Lone Oak’s volume over the past two years. Stephan holds a bachelor’s degree in finance and marketing from San Diego State University.

Steven Kaufman, CPA Zeus Mortgage, Principal  Houston Phone #: (713) 275-9387 E-mail: Steven Kaufman, CPA is a principal at Zeus Mortgage, where he has coordinated more than $1 billion in real estate financing for companies like American Express, Hewlett Packard and Exxon Mobil. Under Steven’s leadership, Zeus Mortgage has become the 37th fastest-growing private financial service firms in the U.S., according to Inc. Magazine. Steven is frequently interviewed by ABC, CBS, Bloomberg News and CNN Radio regarding the current mortgage market. His community involvement in grassroots organizations, like The Fanatical Change Foundation, and his unwavering commitment to keeping “team synergy” at the core of his organization have made him sought after by customers and competitors alike.

Kimberly Kerrigan Generation Mortgage Company, Senior Vice President of Sales Phone #: (916) 759-2479 E-mail: Kimberly Kerrigan serves as Generation Mortgage Company’s senior vice president of sales, overseeing multi-channel sales initiatives. Previously, Kimberly was a senior vice president with One Reverse Mortgage LLC where she was instrumental in creating one of the nation’s largest reverse mortgage companies. Her seven years of reverse mortgage experience include representing the industry’s pioneer as a wholesale regional manager. Kimberly graduated magna cum laude from California Polytechnic State University in San Luis Obispo, Calif. with a bachelor of science degree, majoring in business with a minor in economics.

Doug Lebda, Chairman and Chief Executive Officer Phone #: (704) 944-8670 E-mail: Doug Lebda is chairman and chief executive officer of Inc., the parent company of LendingTree LLC, LendingTree Loans,, GetSmart,, Domania and iNest. Doug, the founder of LendingTree, led the start-up company through a successful IPO, five acquisitions and expansion into the consumer real estate category, and he grew the business to more than $300 million in revenue. Lebda served as the president and chief operating officer of IAC from 2005-2007 before returning to LendingTree. At IAC, Doug oversaw more than 60 brands and 20,000 employees. Once back at LendingTree, he led the company through a spin-off from IAC, forming Inc.

Jason Madiedo Venta Financial Group Inc., President/Chief Executive Officer  Las Vegas Phone #: (702) 588-5430 E-mail: Jason Madiedo is president and chief executive officer of Venta Financial Group Inc., a 100 percent (Hispanic) minority-

owned mortgage banking company serving Nevada, California, Oregon, Washington, Colorado and Texas. Jason began his real estate career more than 15 years ago as a mortgage loan consultant for Great Western Bank. He went on to co-found a multistate mortgage banking firm (Star Funding, Inc) that included real estate sales and escrow divisions. He founded Venta Financial Group Inc. in 2007. Jason is very passionate about assisting underserved markets and consumers who have worked hard to achieve the American Dream. He is the immediate past president of the National Association of Hispanic Real Estate Professionals (NAHREP)—Nevada Chapter and is a member of the national board of directors for NAHREP. Jason is also an approved trainer for Freddie Mac, the California Association of Realtors and ERA Franchise systems, and is an active advocate for Latino homeownership, having appeared on CNBC Money Line, Reuters, Real Voices and Big Builder Magazine.

Mark Madsen Raintree Mortgage Services, Social Media Manager  Las Vegas, Mortgage Blogger Phone #: (702) 432-5626 E-mail: With nine years of experience as an active loan originator, Mark Madsen has spent the past two years serving as the full-time social media manager for Raintree Mortgage Services in Las Vegas, Nev. His job description involves leveraging the Web and integrating search engine marketing strategies for the purpose of reaching and building relationships with clients and real estate partners online. Mark believes “Friends Keep Friends in the Business” and that Internet marketing is a team sport, which is why he dedicates his time to helping other industry professionals learn how to take control over their future online.

Thirty-six-year-old Robert Mitchell is an early mover in the reverse mortgage industry. He is the founder and chief executive officer of Coastal Finance LLC in Quincy, Mass. The company is currently tracking to be the number one broker and lender in New England by the first quarter of 2010. Robert has been the co-host of Money Matters, a nationally-syndicated

Yana Peifer American Home Bank, Vice President of New Business Development, Joint Ventures Mountville, Pa. Phone #: (717) 725-2833 E-mail: Yana Peifer is vice president of new business development, joint ventures at American Home Bank and is a leader in lender relations. Yana is responsible for the development, training, support and supervision of targeted affiliated mortgage business relationships. She works closely with the sales management team and is director of all new preferred lender relations. She is a member of the National Association of Home Builders (NAHB) and is an area trustee for the NAHB Women’s Council. She serves on American Home Bank’s Habitat for Humanity Committee, and in fall of 2007, worked on ABC’s television show, Extreme Makeover: Home Edition, as the volunteer coordinator in charge of more than 700 volunteers.

Jake J. Pescatello Integrity First Financial Group, Principal Partner San Diego Phone #: (619) 318-2443 E-mail: Thirty-one-year-old Jake J. Pescatello is a principal partner and broker of record for Integrity First Financial Group. Integrity First Financial Group has been recognized as one of the top 10 mortgage companies based in San Diego, three years in a row by the San Diego Business Journal, recognized by The Wall Street Journal as offering the lowest rates and fees in the country, and on FOX NEWS for being one of seven certified upfront mortgage companies in the entire country. Prior to IFFG, Pescatello spent nearly a decade working directly with consumers at companies, including Paramount Equity Mortgage, One Mortgage Network Inc., Town & Country Credit and Windsor Capital Mortgage, where he was the nationwide top producer among the lender’s 2,000 employees. He’s held several key positions, such as area manager, loan officer, financial specialist and broker, and has experienced, first hand, how predatory lending bilked consumers out of their American dream. Integrity First Financial was born from Jake and his three business partners, Anthony Balsamo, Trevor Gates and Alex Barnett’s desire to change the system and restore integrity to the mortgage industry.


Robert Mitchell Coastal Finance LLC, Chief Executive Officer and Founder Quincy, Mass. Phone #: (617) 237-3002 E-mail:

Gibran Nicholas is the founder and chairman of the CMPS Institute, which administers the Certified Mortgage Planning Specialist (CMPS) designation. The CMPS Institute has enrolled more than 5,500 members since it was founded in 2005. Gibran is also the chairman of Published Daily, a customizable online magazine, newsletter and marketing service that helps professionals transform their clients and prospects into a referral-generating sales force. Through CMPS and Published Daily, Gibran empowers mortgage and financial professionals with the confidence, unique knowledge and effective resources to increase their competitive advantage and generate more business. Gibran has personally trained 6,000-plus financial professionals across the country, including CPAs, attorneys, financial planners, bankers and mortgage brokers. He is regularly quoted as an industry expert in national publications, such as The Wall Street Journal, Barron’s, MarketWatch, Business Week and The Washington Post, and has been featured on FOX News and ABC News.


Daniel Milstein is the founder and chief executive officer of Gold Star Mortgage Financial Group. He is currently the number three producing loan officer in the United States. He has been ranked in the top 10 for the last nine years. Gold Star Mortgage currently stands as one of the top mortgage brokerages in the United States. Inc. 500 lists Gold Star as one of the fastest-growing, privately-held companies nationwide. Within the last year-and-a-half alone, Gold Star has opened 10 new branch offices in five states, acquiring great market share. Gold Star currently holds 3.2 percent of the FHA market share in southeast Michigan, surpassing major banks operating in the same market. Gold Star has grown to over 275 employees total, thriving in a financial job market that is dwindling as a whole. Gold Star Mortgage Financial Group operates 16 branch offices in five states and is licensed to originate mortgages in more than 20 states. Since 2005, company revenue has increased 712 percent, and Gold Star Mortgage Financial Group is closing more than $1 billion in loans annually. Gold Star is currently expanding its branch operations across the United States through acquisitions.

Gibran Nicholas, CMPS CMPS Institute, Founder and Chairman Ann Arbor, Mich. Phone #: (734) 531-0180 E-mail: 

Daniel Milstein Gold Star Mortgage Financial, Founder and Chief Executive Officer Ann Arbor, Mich. Phone #: (734) 971-9900 E-mail:

radio show for five years, and recently, the show made its debut on The Howie Carr Show, aired on WRKO. Robert is an active member of the National Reverse Mortgage Lenders Association (NRMLA).


Marty Preston Mymortgagepro  Lexington, Ky. Phone #: (859) 293-0411 E-mail: Marty Preston of Mymortgagepro is vice president of the Kentucky Association of Mortgage Professionals (KYAMP), a state affiliate of the National Association of Mortgage Brokers (NAMB). Marty has owned a mortgage company employing 15-25 people since 1999. He consistently originates in excess of $100 million per year. On behalf of KYAMP, Marty has made trips to Washington, D.C. and has met with more than 10 elected officials to lobby on behalf of the mortgage industry.

Lorenzo Pugliano Platinum Credit Services, Owner and Chief Executive Officer  Farmingdale, N.Y. Phone #: (631) 299-2084 E-mail:



Lorenzo Pugliano has been owner and chief executive officer of Platinum Credit Services (PCS), a full level credit reporting agency, for over six years. His focus over that time period has been to make his customers (mortgage bankers and brokers) succeed during these tough times. Lorenzo is constantly looking for the new products or platforms to bring to his clients to make them more efficient, compliant and increase their revenue. He is currently working on a new product that will allow his clients to profit from dead files and monitor them. This new product will automatically inform loan officers when dead credit files become creditworthy again. In his constant quest to provide the newest products and technology to his clients, Lorenzo has grown to be one of the biggest credit reporting agencies in the northeast, with more than 400 customers nationwide. In 2008, his company was ranked the number 576th fastest-growing private companies in the country, the number 41 fastest-growing private company in the New York, New Jersey and Pennsylvania, and the number 32 fastest-growing financial services company in the nation.


Rene Rodriguez Volentum, Chief Executive Officer Minneapolis Phone #: (952) 232-1771 E-mail: Rene Rodriguez is a renowned behavioral and organizational change expert, leadership coach, world-class sales trainer and dynamic keynote speaker at major, national mortgage conferences across the United States. His reputation as a dynamic individual placed him in constant demand as a keynote speaker at annual conventions and events. Rene was a featured speaker for the Business Plan 2008 Conference in Las Vegas. His approach earned him the rank of trusted adviser to leadership and business teams at large mortgage banks, such as Wells Fargo and Bank of America, as well as countless small to mid tier mortgage operations across the country.

Bill Rogers Homeowners Financial Group, President and Founding Partner  Scottsdale, Ariz. Phone #: (480) 305-8550 E-mail: As a native Arizonan and graduate from Arizona State University, Bill Rogers has been a top producing loan consultant for more than 16 years. As president and founding partner, Bill was instrumental in the development of Homeowners Financial Group (HFG), its meteoric growth and its unique culture. One of the most important goals for Bill was to help create a special place to work, where all associates feel empowered knowing that they each host important roles in the success of the company. Due to this emphasis, HFG is ranked as a “Top Five Best Place to Work,” four years running, by the Phoenix Business Journal and is ranked as the Sixth Largest Mortgage Banker in Arizona. As president, Bill was also recognized as one of Phoenix’s prestigious “Top 40 Under 40” for the class of 2009, as well as one of the “Top 1,000 People to Know in Real Estate.” Bill’s most recent endeavor includes the development of the Homeowners Benefits Program, available to local employers, which he designed to educate, counsel and assist employees with their financial and real estate related needs.

Rick Roque Phone #: (408) 914-5895 For the past 15 years, Rick Roque has successfully focused his energy on American and Canadian banking and mortgage/lending operations, business development, and customer-focused, sales management. Rick consults with some of America’s largest mortgage technology vendors, mortgage banks and lending institutions in the areas of mergers and acquisitions, operations management, technology implementation, regulatory compliance and reporting. Rick’s most recent corporate position, he served as a senior member of the Calyx Software management team. While with Calyx, he managed all major banking relationships with clients such as Bank of America, Flagstar, SunTrust and Countrywide, as well as supporting industry relationships, such as state and national associations for brokers and banks and the American Securitization Forum.

Ryan Sharratt Alaska National Mortgage LLC, Originator Alaska Phone #: (907) 486-5544 E-mail: Ryan Sharratt began originating loans after college in 2002. He has attended the Certified Mortgage Planning Specialist (CMPS) course and proved himself as an industry leader, having a consistent loan volume of $35-$40 million annually, a volume that is completed in a small island community of 9,500 people. Ryan is attending his first self-established humanitarian effort in Togo, West Africa where he is traveling to install a clean drinking water system in the Northern part of the country. This water project will assist 1.3 million people in receiving clean water every day. Ryan funded this project through personal contributions and major community support by such organizations as the Lions Club, Rotary International, Kodiak Chamber of Commerce and private donations. Not only is Ryan getting the support of the local community, but interest is now rapidly growing across the state of Alaska for this project and future projects. Ryan, as a teacher, mentor, father and humanitarian, has helped and will continue to help people and make a positive impact on their lives, whether in the mortgage industry or through his individual efforts.

Adam P. Smith The Colorado Real Estate Finance Group Inc., President  Greenwood Village, Colo. Phone #: (303) 770-2262 E-mail: Adam P. Smith is president of The Colorado Real Estate Finance Group Inc., a commercial and residential real estate finance firm. During his career, he has helped thousands of clients, both individuals and corporations, in their goals regarding real estate finance, as well as both personal and corporate finance. He has personally written billions of dollars in mortgage and finance deals. Adam has been a member of the Colorado Mortgage Lenders Association (CMLA), the Colorado Association of Mortgage Brokers (CAMB) and the National Association of Mortgage Brokers (NAMB). He was also a founding charter member of the Rocky Mountain Association of Mortgage Brokers. He played an integral part in the Colorado mortgage licensing process, serving as a lobbyist and counsel at the Business Affairs Committee hearings at the State House of Representatives in 2006 and 2007. Adam works in a volunteer public information officer capacity for the Douglas County Sherriff’s office as a watch captain, and has been a SAR member in past years. He has been a certified member of the Red Cross HOPE Disaster Volunteer Program since 2005.

Brian Suder Home Rescue Programs, President Marina Del Ray, Calif. Phone #: (866) 832-7000 E-mail: Thirty-three-year-old Brian Suder is the founder and president of Home Rescue Programs, one of the nation’s premier loan modification companies. As an advocate for homeowners in distress and a board member of the United Loss Mitigation Association, Brian has spent weeks in Washington, D.C., meeting with members of Congress, state governors and senators in an effort to educate policymakers on the important role that compliant loss mitigation companies play in the recov-

ery of the nation’s economy. Under his direction, Home Rescue Programs currently boasts one of the highest successful loan modification rates in the nation, has modified thousands of loans, and is licensed in more than 45 states nationwide.

Tory Tarsitano, CRMS Capital Financial Bancorp Inc., President Schaumburg, Ill. Phone #: (847) 944-1470 E-mail: Tory Tarsitano is currently president of Schaumburg, Ill.-based Capital Financial Bancorp Inc. He graduated Northern Illinois University in 1994, with a focus on business finance. Tory just finished up serving as a board member of the Illinois Association of Mortgage Professionals’ (IAMP) Mortgage Education Foundation, and has attained the mortgage industry designation, Certified Residential Mortgage Specialist (CRMS). He has worked hard as a mortgage broker/banker for more than a decade, and has grown his company 150 percent in less than five years. Capital Financial Bancorp was honored twice with the Mortgage Company of the Year by IAMP, nominated National Mortgage Broker of the Year in 2007, and Tory was personally awarded Lending Champion of the Year in 2006 by Chicago Metro Real Estate Magazine. Tory helped his company develop a “Green Lending” initiative, the “Free Home Owner Mortgage Benefit Program” for businesses and The Capital University, an educational resource for Realtors, business partners and consumers.

Melissa L. Walker, CMC, CMPS FirsTrust Mortgage Inc., Certified Mortgage Planning Specialist  Leawood, Kan. Phone #: (913) 579-2567 E-mail:

Joshua Weinberg is a business analyst for Calyx Software, in charge of compliance, government loan programs and reverse mortgages. He is a member of the product management team and is the lead designer for all features and requirements related to those topics. Joshua is licensed as a broker by the California Department of Real Estate (DRE) and has been originating loans since 2004. He is active in the industry and works closely with the U.S. Department of Housing & Urban Development (HUD), the Federal Reserve Board, and many state regulatory agencies. He also sits on committees for the Mortgage Bankers Association (MBA), as well as the National Association of Mortgage Brokers (NAMB).

Back in 2002, Jason Wroble moved to Chicago and began his career in the mortgage industry working for a lender. His experience working behind the scenes at a lender gave him the knowledge of what


Jason Wroble Chicago, Ill. Phone #: (312) 307-5593 E-mail:

Dave Zitting is president and chief executive officer of Salt Lake City-based Primary Residential Mortgage Inc. (PRMI). Dave was one of PRMI’s founding partners in 1998, and in his role as the company’s chief executive officer, is responsible for determining and executing PRMI’s strategic direction, and the development of partnerships within the mortgage industry. Often described as optimistic, persuasive and innovative, Dave enjoyed a decade-long career as a loan originator before establishing PRMI. He has used his experience as an originator and his knowledge of the market to help PRMI become one of the most respected institutions in the country.


Joshua Weinberg, CRMS Calyx Software, Business Analyst Phone #: (831) 325-3369 E-mail:

Dave Zitting Primary Residential Mortgage Inc., President and Chief Executive Officer Salt Lake City Phone #: (801) 596-8707 E-mail: 

After owning her own mortgage broker company for 10 years, Melissa L. Walker, CMC, CMPS worked in the wholesale side of the industry for more than six years with companies such as Bank of America and GMAC Mortgage. She has been a state and national instructor for the mortgage industry since 2002, teaching law, ethics and general continuing education courses across the country and in Kansas at Johnson County Community College. Melissa served on the National Test Review Committee for the Nationwide Mortgage Licensing System (NMLS) to develop test questions to comply with the SAFE Act. In 2002, she was named the National Association of Mortgage Brokers (NAMB) Mortgage Broker of the Year, and in 2003, the Kansas Mortgage Broker of the Year by the Kansas Association of Mortgage Professionals (KAMP). After serving as president of KAMP, she moved on to serve as a Regional Legislative Chairperson and Education Committee chairperson for NAMB. She holds the designations of Certified Mortgage Consultant (CMC) and Certified Mortgage Planning Specialist (CMPS). Melissa currently serves as a Director-at-Large for KAMP and as co-chairperson of the association’s Education Committee.

it takes to get a mortgage successfully from application to closing. As a result of his volunteer work with the Illinois Association of Mortgage Professionals (IAMP) functioning in the roles of executive vice president (past) and as a current member of the IAMP board of directors, Jason has gained a better awareness of the ever-changing mortgage market, with a goal to help borrowers efficiently navigate. Jason earned a bachelor’s degree in management information systems from Arkansas State University. For rest and recreation, Jason enjoys spending time with his wife and traveling as much as possible. Also with 15 years of playing fútbol, he enjoys some pickup games now and then.


heard on the street

continued from page 26

executive officer of Clayton Holdings Inc. “Over the past 18 months there have been huge fluctuations in demand for mortgage financing, making it extremely difficult for mortgage bankers to profitably staff for varying levels of volume. By providing flexible onsite and remote solutions, we are able to help Lender One members keep up with spikes in demand, without adding to permanent staff and increasing their infrastructure expenses.” For more information, visit or

Mortgage Professionals to Watch  NetMore America has announced the hiring of David Shirk as the company’s chief information officer/compliance officer.

David Shirk



 Residential Finance Corporation (RFC) has named former U.S. Bank executive Douglas Harris as chief operating officer.


Doug Harris

 Nigel D. Brazier has been named president of Acqura Loan Services.

Nigel D. Brazier

 Shane Barbanel has joined the commercial broker sales team at GFI Realty Services.

Shane Barbanel

 Jeff Ellison has been named president of the warehouse lending division for BB&T Corporation.  Flagstar Bancorp has elected Joseph P. Campanelli as president and chief executive officer.  Fannie Mae chief executive officer Mike Williams has appointed Terry Edwards as the company’s new executive vice president, credit portfolio management.  Genworth Financial’s mortgage insurance division has created three new senior management positions: Jacqui Pearce has been named senior vice president and chief operations officer, Rohit Gupta has been named senior vice president and chief commercial officer, and Jim Bennison has been named senior vice president of strategy and capital markets.  Ross J. Kari has been appointed chief financial officer of Freddie Mac.  Ellie Mae has named Robert Levin, former executive vice president and chief business officer with Fannie Mae, to its board of directors.  Stephen D. Conlin has been named risk manager of mortgage technology company FNC.  John A. Courson, chief executive officer of the Mortgage Bankers Association (MBA), has announced the addition of Tom Koonce as the association’s vice president of legislative affairs, Brad Cheney as director of legislative affairs and Pace Bradshaw as director of government affairs.  Generation Mortgage has added Alison Calamia as customer support manager in the company’s wholesale division; Keith McNulty as senior vice president, strategy and process; and Amy Lynn Davies as human resources director.  Premier Reverse Closings, a division continued on page 44

Buzzwords: What They Say to Get the Fraud Done By Michael S. Richardson

As you know, real estate is a people pro- “We have never had a fession. From the real estate agents in problem with it before.” the field, to the loan officers or loan Fraud is an insidious crime. It starts slowprocessors working with borrowers, to ly and works its way into the most honest the title agents sitting down with fami- companies, as I have witnessed firsthand lies closing on their first home, we are when fraud was committed right under people serving people. Those who my nose by a long-time trusted employee. would commit fraud know this, per- I, too, never had a “problem with it haps even better than we do. before,” i.e. employees committing fraud, In addition, like those of us who are until I realized it was too late and the U.S. legitimately doing good business in the Department of Housing & Urban real estate finance industry, they need Development (HUD) shut me down! I once people to pull off their scams. What heard someone say that the biggest probkind of people? Willing people, that’s lems aren’t immediately revealed, they who. People willing to help them lie, are eventually discovered. Just because people willing to buy shell properties or something hasn’t been a problem before willing to work for shell corporations or does not mean it won’t be in the future those who are willing to falsify the and, most likely, it’s a warning sign that facts, figures and docuthis will, in fact, become a mentation. They cannot problem before too long. do it alone, and more Again, early detection and often than not, they come immediate reportage are to us for help. the two biggest counterThe sad part is that effects for such fraudulent some of us don’t even statements. realize when we’re being included in a fraudulent “Can you throw scheme. I believe some of that one away this is partly due to ignoand I will get rance, other times it is out you a new one?” of laziness. More times Documentation is the than not in the hustle and “I once heard someone means by which fraud is bustle of our daily lives, produced. After all, it’s say that the biggest it’s out of sheer busyness, the documents that get problems aren’t but sometimes, it is simply immediately revealed, doctored and the docudue to a “don’t ask, don’t ments that pass without they are eventually tell” policy that is quietly scrutiny by busy or hurdiscovered. Just eating away at the very ried handlers that allows because something integrity of the home fraud to exist. The forms hasn’t been a problem we use in our industry are financing industry. Whether we are superbefore does not mean nothing short of holy; vising folks who are helping they are the means and it won’t be in the out these fraudsters or future and, most like- tools by which we borrow being duped into helping and lend. “Throwing one ly, it’s a warning sign them ourselves, knowing away” is a sure sign that that this will, in fact, the buzzwords the bad guys something is amiss, and become a problem use is often our first line of to combat this all too before too long.” defense in actually ignoring common practice, we what they have to say. should all implement a Here are the most common terms, means of collecting discarded docuphrases and come-ons I’ve discovered: ments, to be reviewed at the end of the day, week, month or quarter. Much like “This is done all the time.” scientific laboratories have special bins Part of a fraudster’s ploy is to lure you and procedures for destroying biohazinto believing that what you are doing ard items, we too should treat such is not wrong when, in fact, nothing requests as “hands off” and, as we could be further from the truth. While should all such statements, report them fraud may be committed every day, immediately. that doesn’t mean you have to be a part of it or, for that matter, tolerate “This loan needs to close it. Phrases like this one—designed to quickly … it is a super rush.” entice you via the element of conspir- Time is the ultimate motivator. Why? acy or convenience—should be a def- Because time, after all, is money. inite red flag as to not only who is Especially in our business, when an committing fraud but, in fact, how increase in the interest rate or public perthey’re doing it. Take the first step ception that a market is no longer “hot” toward vanquishing fraud in your own can mean the difference of thousands, if private kingdom: Report such behavcontinued on page 44 ior immediately.

new to market

continued from page 27

StreetLinks introduces quality and service guarantee

Integra Software Systems releases all-inclusive LOS

continued on page 43


Integra Software Systems has announced the availability of a complete lending solution for mortgage, consumer and commercial lending. Integra has partnered with Compliance Systems Inc. (CSi) to integrate CSi’s IntelleDoc Solutions, a comprehensive dynamic documentation system, into its Destiny product as the single documentation solution to satisfy all its business channels. Destiny is configurable with documents, screens, products, loan pricing, fees and other requirements served up dynamically to the user based upon numerous user defined guidelines. A single point of administration is provided, yet business channel autonomy is preserved. “Our clients really come out the winners with this joint development effort,” said Jerry Pratt, president of Integra. “They get the efficiencies and consistencies that a single, synchronized system can deliver. Plus, with CSi’s IntelleDocs in the background doing the heavy lifting for compliance, document selection and document creation, they get the assurance that every transaction—no matter what line of business—is done right the first time.” Rick Allen, senior vice president of operations for Integra said, “The way CSi architected its whole IntelleDoc Solutions, in particular what they did with the CSi Data Schema, really gave us an edge up in our development efforts. Through the Schema, we were able to manage all the data holistically in the Destiny system. Essentially, our developers could tackle a piece of data once— no matter how many times it’s used, no


StreetLinks National Appraisal Services has introduced its Performance Guarantee. StreetLinks guarantees that its quality and service levels will exceed the performance of any other appraisal solution or it will pay a performance penalty. “Like any other industry, not all appraisal management companies are the same,” said StreetLinks Chief Executive Officer Steve Haslam. “We are so confident in the superiority of our appraisal management solution that we back it with an industry-exclusive Performance Guarantee. Our clients put their time, reputation and money on the line with every loan transaction, every day. Now they have an appraisal management partner that does too. StreetLinks will guarantee that the consistency of our appraisal quality and customer service levels will be superior to any other HVCC [Home Valuation Code of Conduct] and FHA [Federal Housing

Administration]-compliant appraisal management solution. Should we fail to deliver, StreetLinks will pay a performance penalty from our one-million dollar Performance Guarantee account. StreetLinks will also guarantee the geographic competence and proximity of their appraisers to subject properties, a topic of much media attention today.” Tom Hurst, StreetLinks managing director, added, “Many lenders are seeking a better appraisal management solution. With our Performance Guarantee, we put our reputation and money on the line to prove that we are the absolute best at managing the appraisal process. This type of transparent partnership approach is unheard of in this industry, but we believe that it should be the standard. We give our lender clients the confidence to partner with us. They know from day one that StreetLinks consistently delivers superior quality and exceptional service. We guarantee it.” For more information, visit 

lenders in maintaining up-to-date pricing on their loan products. An uncertain mortgage environment has heightened pricing risks for many lenders. Loan pricing technology has emerged as a necessary tool for mortgage lenders. Instead of the traditional paper rate sheet, the industry now expects lenders to offer online tools that allow instant verification of loan pricing in real-time. But the ability to quote prices instantaneously creates a problem for mortgage lenders when prices change faster than their online tool can handle. “Lenders are under the gun to provide competitive pricing,” said Gigi Campbell, national sales director for PriceMyLoan. “But if they’re quoting prices that aren’t available when they lock with investors, they either risk losing money trying to cover the difference or lose a customer because they can’t deliver on what was promised.” Through the use of Rate Sheet Expiration, lenders are able to selectively shut down pricing on specific loan products and prevent originators from locking on results that they know are not current. Rates can then be released whenever the rates are updated so their originators can request locks on correct rates. “PriceMyLoan uploads new rate sheets on a continuous basis throughout the day,” said Campbell. “But our automation relies on investors delivering new rate sheets in a timely matter, and that isn’t always the case. It’s during those periods when our lenders know pricing is going to be updated that they need to be covered. That’s why the Rate Sheet Expiration feature is so valuable.” For more information, visit


A View From the “C” Suite Ignoring the Inevitable



By David Lykken & Thomas J. Johnson, CPA


Successful senior executives occupying remember how crazy things became. the C-Suite are those who recognize During the last quarter of 1999, one of trends and don’t ignore the inevitable. our business development managers, Less successful executives have a ten- Thomas J. Johnson, CPA, was the chief dency to be like the ostrich sticking executive officer of a start-up company. their heads in the sand or some other While in that position, Tom was in close dark orifice. Not everything that is contact with CEOs of public companies, “inevitable” has to be construed as neg- venture capitalists, lawyers and investative. The inevitable can bring about ment bankers. Being trained as a certiunprecedented opportufied public accountant nities for growth in every (CPA), Tom asked these sense of the word. professionals about the In the world of busivaluations of companies ness, we have witnessed driving the NASDAQ to periodic and predictable record highs. Privately, cycles where inevitable most would acknowledge events are as certain as the possibility that this all the seasons, yet people was a huge bubble, but choose to ignore the telltimes were so good and tale signs that the money was flowing so inevitable is about to fast that no one wanted happen. Hindsight is, as to change their freeDavid Lykken the saying goes, 20/20. wheeling approach to Many acknowledge that business. “Many acknowledge the inevitable is going to In March of 2000, the that the inevitable is happen and few forwardNASDAQ Composite peaked going to happen and thinking executives even at 5132.52. By the end of few forward-thinking that year, the composite fell speculate as to when it will happen. Given all executives even specu- more than 50 percent and that, what I find astoundlate as to when it will closed at 2470.52. Venture ing is this … rather than capital virtually dried up. happen. make decisions to protect Business people stopped —David Lykken, themselves from an measuring business success president, mortgage inevitable event, they in terms of “hits” to a Web strategies and managseem to ignore their site, and once again, startoptions and live life as if ing partner, Mortgage ed paying attention to Banking Solutions nothing is ever going to Earnings Before Interest, change. Taxes, Depreciation and Is it possible that mortgage brokers Amortization (EBITDA) numbers. are the next group of business people Again, what was amazing about that ignoring the inevitable? time was that most people had a sense In this decade alone, there have that a correction was coming, but been two immensely negative business- nonetheless, continued running busirelated events, the dot com bust and ness as usual anyway. They ignored the the housing price collapse, that most inevitable. The inevitable happened. people knew, deep down in their gut, Huge fortunes were lost and most of was going to happen. Yet in both cases, the dot com’s disappeared overnight, they did little to protect themselves but not the regrets of those that failed from the devastating consequences. to see it coming.

The dot com bust

The housing bubble

For many of us, the “Dot Com Bust” wasn’t so long ago that we don’t

There was a great book written about the housing/lending debacle, Busted:

Life Inside the Great Mortgage Meltdown transitioning from broker-to-banker is by Edmund L. Andrews. The author essential, but increasingly more diffiAndrews writes from his unique perspec- cult. The culture and tendency of the tive about the meltdown as a financial average mortgage broker is to take the reporter in Washington, D.C. He foresaw cash out of their businesses as rapidly as a huge national problem coming, facili- they earned it. In many cases, it was tated by sub-prime, and Alt-A and required that they pull out their cash to option adjustable-rate mortgage (ARM) support an out-of-balance lifestyle that loans. Many in the residential lending was simply not sustainable when the business must have seen it as well. What inevitable happens. Now, they are faced makes this read so interesting is the par- with having to raise outside capital to allel between his view of the national make the transition from broker to issue and his personal borrowing pat- banker. The good news is that capital is terns. He saw the nation over extending out there to be raised. The bad news is credit for debtors on houses that had to that most brokers don’t have a clue on increase in value to justify the debt. how to find or attract the capital withKnowing that, he over out giving up control of borrowed on a house, their business. They simthus getting caught in the ply haven’t developed the trap himself. knowledge and skills to Again, just like the dot raise the capital. com bust, what was amazIn addition to the reguing about that time was latory squeeze, the counthat many mortgage brotry’s warehouse line capackers and bankers knew in ity is far below what is their gut, if not in their needed. So, warehouse heads, that the bubble lenders are very conservawould soon burst. They tively reviewing applicaignored the inevitable. tions from bankers and The inevitable happened. Thomas J. Johnson, CPA brokers in transition. Only Many lost their jobs and brokers with sound busi“Warehouse lenders owners lost their business- are very conservativeness plans, adequate capies. They wondered when tal, experienced managely reviewing applicathe inevitable would hapment and seasoned advitions from bankers pen, yet continued doing sors will likely obtain lines. and brokers in transibusiness as usual. One broker we spoke tion. Only brokers with last week summawith sound business Déjà vu all over rized it this way: “It is my again plan to transition into plans, adequate capiYogi Berra is reported to tal, experienced manbecoming a mortgage have said, “Déjà vu all agement and seasoned banker slowly over the over again.” That really next couple of years.” He advisors will likely sums it up. As a leading went on to say that he obtain lines.” consulting firm to the now recognizes “the mortgage industry, we —Thomas J. Johnson, opportunity to transition CPA, Business speak with brokers, was wide open 18 Development bankers, lenders and months ago, but today, investors all the time. In Manager, Mortgage the window is fast closing our opinion, right now, because of increasing Banking Solutions many in the broker comcapital requirements.” He munity are ignoring the inevitable. recognizes that he needs to act now! He If you are a broker, look carefully at is right. It is inevitable. But the the landscape. One can fairly well con- “inevitable” doesn’t have to result in his clude that the correspondent (bank) demise if he acts immediately and investors are going to continue chang- intelligently to develop a well thoughting the rules to the detriment of the out plan, raises the capital and quickly brokers. In addition, the agencies are applies it to the few warehouse lines making it more difficult to be a thinly still available. It is like catching the last capitalized mortgage banker. Therefore, train out of the land of brokering withbecause of higher capita requirements, out having to exit the business.

Most of the brokers are ignoring the inevitable, but you don’t have to be one of them. In fact, remember my prediction: “More money will be made by the few who survive over the next five years than all the companies that were in business over the past 25 years. To stay informed on key issues related to the many changes coming at the mortgage industry, I invite you to listen each Monday at noon (Central time) to my weekly radio program “Lykken on Lending.” You can either call in on your cell phone by dialing (646) 716-4972 or you can listen “live” thanks to After you have arrived at this Web site, look for the “Search” box and type the program name “Lykken on Lending.” You will be directed to program page and you can listen “live,” as well as listen to many of the previous broadcasts listed.

David Lykken is president, mortgage strategies and managing partner with Mortgage Banking Solutions. David has more than 34 years of industry experience and has garnered a national reputation. David has become a frequent guest on FOX Business News with Neil Cavuto, Stuart Varney, Liz Claman and Dave Asman with additional guest appearances on the CBS Evening News, Bloomberg TV and radio. He may be reached by phone at (512) 977-9900, ext. 101 or e-mail Thomas J. Johnson, CPA is business development manager for Mortgage Banking Solutions. He began his 30-year career with Ernst & Young, and is a member of the American Institute of Certified Public Accountants. He may be reached by phone at (512) 5012817 or e-mail

Growth Strategies: 2010 By Linda Arcadipane & Mark Schnurman 


During the past two years, the mort- Creating custom business gage business has experienced a plans tremendous amount of turmoil. We Every sales manager has a business have watched many well-known com- model that they believe will enable panies in our industry fail, while others loan officers to succeed and often try to still struggle desperately to stay afloat. force those models on others. The problem is that many times However, the select few loan officers are not companies that have capable of executing been scrupulous with those plans. Managers their lending, creating need to understand the operational efficiency, strengths, weaknesses have been able to withand competencies of stand the market and each of their loan officers regulatory pressures. and possess the flexibility In June 2007, GFI to help them identify Mortgage Bankers commitways of being successful. ted itself to using this periIn theory, each loan od to aggressively grow its officer operates as an market share. By impleMark Schnurman independent business menting the following strategies, GFI has man- “The devil you know is owner and, like any sucoften better than the cessful business, a well aged to not only survive, devil you don’t. thought-out, organized but to prosper. Research Change is hard, so plan is necessary to dratells us that the highest performing loan officers therefore, to successful- matically increase the ly create new relation- odds of succeeding. A have used the following ships, you must make business plan can, not strategies to stay on top: a compelling case why only help clarify your vision, but can help you  Creating custom busia referral should give develop effective operaness plans that play on you their business.” tional strategies and loan officer strengths. —Mark Schnurman, understand the risks  Communicating and Director of Human involved in your business. connecting with peoResources, GFI Loan officers who ple at an extremely Mortgage Bankers Inc. know and play to their high level. strengths succeed; those who lack the  Dominating niche markets.  Staying positive in the face of adver- clarity to know their strengths and the wherewithal to play to them fail. No sity and change.

The first call on a potential referral source is important, but will rarely result in a business committal, as there are no magic bullets. The most successful loan officers that I work with create follow-up processes that give their prospect a Copernican complex. In other words, the referral sources think the world revolves around them. Make initial contact by interactive means (e.g. face-to-face or over the phone). After you make the contact, send an informal follow-up e-mail. The same e-mail script can be used after all first contacts and customized simply by referencing your meeting in the opening line. Send the e-mail on Communicating and the same day as the meeting and include a photo (makes you memoconnecting with people rable) and some collateral material on at a high level While it may seem obvious, communi- your firm. Sample: cation is the key to generating new business from a referral source. This is often “It was great meeting with you today. I easier said than done. Any referral enjoyed learning about the success you source (realtor, attorney, accountant, have had in Soho and believe I can help financial advisor, etc.) worth the time you build on that success. My company and effort, already has a relationship has been in business for over 25 years, with a loan officer. They may not be and we have all the programs, products thrilled with their current loan officer, and services to customize solutions and but why should they change? The devil meet your client’s needs. As a direct you know is often better than the devil lender, we control the process that you don’t. ensures your deals will close on time. Change is hard, so therefore, to suc- Finally, my approach focuses on making cessfully create new relationships, you you look good. Attached, you will find must make a compelling case why a some information on my firm, my service referral should give you their business. commitments and personal bio. I look To do this, you must properly communi- forward to speaking with you soon.” cate your message. Industry research demonstrates that it can take up to 30 That same day, send out a handwritcontacts to turn a prospect into a client. ten note. Handwritten notes are more Most loan officers are not willing to formal and personalized, resulting in a commit the time and effort necessary to more significant impact than e-mails. develop new referral relationships. Your note should be simple and to the Recently, a realtor told me that if she point, “Nice meeting you. I understand had a penny for every loan officer who the critical importance of a loan officer visited her office once or twice, never to to your business, and look forward to return, she would be retired. Consistent, the opportunity to serve with you in the repeatable, predicable and planned future.” The note should be accompabehavior is necessary to succeed. nied by a business card. By implementing a process of mass Within three or four business days, customization, you can easily stay in con- call the referral source to set up a fortact and deliver white glove service with mal meeting and send an e-mail out the very little effort. A systematic follow up or same day. Your goal must be a minidrip campaign simplifies your job by mum of two contacts (drips) a week, enabling you to execute on an efficient one being face-to-face. Drop by the approach, positioning you as an expert realtor’s office once or twice a week. and assisting in the acquiring of referrals. Send an e-mail every week, drop mateGoals of drip marketing campaign: rials or a note in the mail and make a call. Persistent? Aggressive? Perhaps,  Build rapport and trust but these actions are necessary for suc Display and establish expertise, pro- cess. You need to differentiate yourself fessionalism and resources from the competition and shorten the  Model service-oriented behavior time it takes to make the 30 contacts  Committed to the referral sources necessary to get business. best interest Communication may seem obvious  Compare favorably to other loan and simple. However, by using commuofficers nication skills to create and implement  Frequent contact … more than curcontinued on page 38 rent provider amount of training or coaching will allow you to fit a square peg into a round hole. That is not a value judgment, only a reality. Hence, you are faced with two choices: Let loan officers fail or work diligently with them to create business plans that they can successfully execute. So, what are your strengths? Are you better at face-to-face interaction or phone conversation? Do you prefer the people side of the business or the deal side? Do you work better with realtors or certified public accountants (CPAs)? Focus on your strengths and free yourself up to succeed!


your drip marketing campaign, you will watch your business grow right before your eyes.



Dominating niche markets


Developing and dominating your niche market is crucial to being successful in the business. Niche marketing is when all of your marketing efforts are concentrated on a small but specific and well-defined segment of the population. You must define your niche market and capitalize on it to the best of your ability. Whether it is a specific geographic region, industry or age group, this market should be a target group that you can closely relate to and that would consider you an expert in your specific field. You must also develop the ability to maximize your marketing budget by targeting your defined niche market. This will help you figure out where to advertise and will make it easier for you to develop products and services that appeal to your niche market. Ask yourself: What are the “extras” that I bring to this market? A perfect example of a dominator in the niche market is a mortgage banker who we will call “Tim” for sake of anonymity. Tim is a native of Bay Ridge, Brooklyn and has made it his priority to know everything about the real estate industry in this area. He uses this knowledge to leverage himself when he visits with local realtors. These neighborhood realtors appreciate the fact that Tim is born and raised in the area and that he possesses an intimate knowledge of the area in which they do business. They often see him around town and feel a sense of comfort in using his services. As a result, 85 percent of Tim’s client base comes from local businesses that know and respect him and are happy to support a fellow businessman. So what’s your niche? If you haven’t already determined your niche market, find one and learn everything there is to know about it. Do whatever it takes to become the loan officer of choice in your niche market.

Staying positive in the face of adversity and change Your career as a loan officer is the sum total of the decisions and choices you make. Your choices result in habits or patterns of behavior. Some patterns of behavior result in success; others result in failure. The patterns are quite clear if you look for them. Let me share some patterns of behavior that are leading loan officers to success in this difficult market.

 Attitude: It can be depressing to read all of the negative news regarding the housing market, interest rates and mortgage applications, but only if you allow it to depress you. Top loan officers see the weaker housing market as an opportunity to grow market share as competition declines. In addition, some loan officers let events drive their behavior. Top loan officers, however, let their behavior drive their attitudes. So instead of sitting around and complaining about the weak market, they are visiting their realtors, CPAs, attorneys and other referral sources and getting results. Start seeing the glass as half full.  Commitment: Unfortunately, the mortgage business is very transient. In good markets, people join only to leave when the going gets tough. The loan officers who maintain and grow their businesses in difficult times are committed to the mortgage business and focus on the activities that have helped them in the past. In addition, top producers commit to building their knowledge base by learning about new products, services and ways of helping their clients. Take the time to create a business plan for your long-term success in the mortgage industry, and identify and learn in areas where your knowledge is lacking.  Hard work: I am always amazed at the difference in work habits between producers and pretenders. Nothing in life is gained without hard work. The path to success is not always the path of least resistance. In today’s tough market, you need to work a little harder. Create a schedule that lays out your regular activities and stick to it.  Success is simple: Look at the ideas and behaviors of top producers and imitate them. Nobody knows what 2010 holds for the mortgage business for sure, but these strategies have never failed in the past and are guaranteed to take your mortgage business to the next level. Remember, only the strong will survive in these times, don’t get left behind. Mark Schnurman is director of human resources for GFI Mortgage Bankers Inc. He may be reached by email at Linda Arcadipane is director of marketing for GFI Mortgage Bankers Inc. She may be reached by phone at (917) 2893125 or e-mail

Growing Your Business Through the Process of Reduction By Michael Gualtieri

Whoever forecasted the paperless office 3:00 p.m. and even a third time at 6:00 is, once again, not going to get their p.m., sometimes requiring special fees.” wish next year. Mortgage processors will tell you that all the attention this issue Work with a courier received since the 1990s hasn’t made a service that is much of a difference and that they experienced in mortgage haven’t seen a substantial decrease in loan document delivery the amount of paper they have to han- “That may not be the same courier you use for on-demand deliveries,” noted dle, process and ship. It’s no surprise that mortgage proces- Chase. “A courier that specializes in sors are continually looking for ways to same-day pickup and delivery might cut the cost of moving paper from their have more resources and be able to offices to the places it has to go without deliver that type of service at a lower cost than a delivery service spesacrificing the protected cializing in overnight servand timely delivery of ice, and vice versa. those documents. Choosing a delivery service I recently put this questhat specializes in the partion to members of the ticular service needed can Messenger and Courier provide a more effective Association of America price point.” (MCAA), the trade association for same-day and Establish a longless-than-24 hour delivery term business services that I head at our relationship annual executive roundwith the courier table meeting. Here are service that will some of the tips I got from “It’s no surprise that be handling loan two of our members who mortgage processors documents are very active in transare continually look- “We concentrated on the porting mortgage-related mortgage industry as a documents. ing for ways to cut niche market 20 years ago the cost of moving by building a lot of routes Avoid multiple paper from their around the need for a big pick-ups offices to the places it rush at the end of the It’s no secret that one has to go without sac- day,” said Chase. “We pick-up a day cuts costs, rificing the protected catered to their business so make sure your procesand timely delivery practices by making sure sors have everything done of those documents.” we could make the closing by one, pre-arranged deadlines. Establishing a time. This avoids the cost longterm relationship with your courier of having the courier come back several company is beneficial to both. The couritimes in one day. “We pre-arrange a daily pick-up time er knows it’s a cost-sensitive and timethat’s as late as possible. That’s the best sensitive industry that can give him a way to get a handle on costs. Our cus- consistent flow of business and the customers know when we’re coming and tomer knows he or she can depend on a they make sure everything’s done service that understands the unique before we get there,” said Rick Chase, a pressures of mortgage processing.” board member of MCAA and vice president of business development and chief Use a regional carrier administrative officer for OnTrac. instead of national service OnTrac is one of the largest regional Regional carriers can improve transit overnight delivery services in the west- times over the national carriers because ern U.S., and has been providing spe- they concentrate on same-day ground cialized services for the title and mort- transportation. “Ground-based regional carriers offer gage industry for more than 20 years. the industry’s most cost-effective and “Other clients who aren’t that wellorganized will call us for a pick-up at time-sensitive ground products and can 3:00 p.m., then another at 5:00 p.m. save money over national carriers,” said because they couldn’t get it all done by Jim Berluti, president and chief executive

officer of Eastern Connection and another involved MCAA member. Eastern Connection is one of the largest regional express logistics providers on the East Coast and has been serving the mortgage processing industry for 25-plus years. “With national carriers, ground delivery to some zones is two-day. If you need to upgrade to a faster delivery, it will cost more. Regional carriers are typically 10 to 20 percent more cost-effective for priority and ground than the industry giants. Regional carriers are also known for being much more flexible with their overall pricing and contracts.”

Negotiate and budget accordingly Make sure you understand the full extent of a carrier’s prices, including accessorial charges and other fees. Then, negotiate and budget accordingly. “Accessorial charges include surcharges and fees for items such as deliveries into rural areas, missing signatures, incorrect addresses and Saturday or early morning delivery. Most of these charges are a few additional dollars that can quickly add up, so make sure you understand and ask about a company’s pricing,” said Berluti.

Timing is everything If your contract is up, consider locking in a new agreement before prices increase next year. Typically, national carriers have price increases after the first of the year. Now is the time to do this.

Conduct a thorough analysis of your shipping needs and expenses to see exactly where you spent your shipping dollars last year.

Perform an analysis of your unique shipping history and characteristics “There are industry consultants who offer specialized services to do this and they are one means of helping you negotiate new terms,” said Berluti. “However, before you pay big consultant fees, consider that some carriers provide comprehensive audits of this kind at no costs. These audits may include a breakdown of cost comparison between national and regional services.” What all this means is that there are ways to control the costs of moving the inevitable paper trail that’s still very much a part of loan processing. It’s all a matter of monitoring your internal processing of paperwork, working with a courier service that understands the mortgage loan business, getting a handle on the true cost of shipping documents and keeping an ongoing eye on the factors that can unnecessarily add to those document shipping costs. Michael Gualtieri is president of the Messenger and Courier Association of America (MCAA) and Pro-Courier Inc. He may be reached by e-mail at

 The Fed’s ability to manage interest rates (monetary policy) is more impaired than since its inception— consider these realities: 1. Credit  The Fed cannot reduce short-term Because the meltdown was, at its core, rates much lower than zero percent. a broad “banking” credit  The Fed has already failure (flawed investpumped cash into ment creation and buybanks. Thus far, it has ing) the real estate’s marbeen used to shore up ket recovery will take far capital and not for lendlonger and be less robust ing. It’s clear the Fed than in past cycles, as evicannot just increase liqdenced by: uidity and prime the pump as in the past.  The regulatory and  Long-term rates are compliance backlash under significant presis already at a full sure from unprecegallop: Governmentdented deficit spendsponsored enterprise ing. This is creating (GSE) programs, the “Despite these rays of inflationary pressures light, the economic Home Valuation Code that, despite being in facts suggest that of Conduct (HVCC), check now, will soon Red Flags Rules, have to be fought with everything necessary Truth-in-Lending, increases in shortfor a growing mortand the Secure and term rates or risk siggage market is still Fair Enforcement for nificantly higher longvery much in flux. Mortgage Licensing term rates. Charting a winning Act (SAFE Act) changes In short, our central course then requires are just the beginbanking system has very ning of a systemic a reality check on the few options left and that market’s facts.” reinvention of our will mean a prolonged industry. There are period of uncertainty. more risk adjustments and underwriting tightening ahead. continued on page 40 There are at least three significant economic issues that will continue to play havoc for mortgage originators:

‘The Solution for the New GFE’

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Charting your winning course By Brad Kelso

ket is still very much in flux. Credit, income and valuation, just as they are critical to any individual loan, are today, national uncertainties. Charting a winning course then requires a reality check on the market’s facts. Once assessed, the best tactics to sustain your business will become more evident. What follows is my analysis and seven recommended best practices to ensure, not just survival, but success, through 2010.







A quick review:  July 2009 marked the largest gain in new home sales in eight years.  The stock market rebounded above 9,000.  Unemployment appears to have finally flattened out.  GM is making cars again. But who’s smiling? Despite these rays of light, the economic facts suggest that everything necessary for a growing mortgage mar-


Seven Tips for Success in a Down Market 

Track your expenses

“Look for hidden charges, multiple pick-ups in a day and last-minute additions that required a specialty courier,” said Berluti. “Evaluate any discounts provided to make sure they weren’t offered for set period of time and then rescinded.” He also points out that many discounts by national couriers are good only for 13 weeks, while regional carriers tend to be more lenient.


 Bank balance sheets are still stuck in neutral (undercapitalized and scared) and there are very few mortgage bankers or wholesalers stepping up (yet) to fill the void. In fact, there is continued contraction (Taylor, Bean & Whitaker Mortgage Corporation, as case in point).

of continued foreclosures and oversupply in many high value markets (and that assumes mortgage rates stay below six percent). The result?  Refinancing volumes will mimic the first half of the year (being volatile to rates). Long-term buyers will be slow and steady, but in no hurry.

2. Income Stubbornly high unemployment is very likely to persist and even grow to more than 10 percent nationwide (12 percent-plus in California) possibly stagnating there for one-two years. Big business is not nimble enough in the shortterm and small businesses, like their owners, are proving to be “out of gas” and leery of taking risk with additional employment unless the business is a sure thing. Growth will be slow to marginal for a while. Without a broad increase in core employment (W-2-type income) to fuel sustainable consumer purchasing any time soon, we can expect a very dull recovery at best, with minimal to no improvement in real estate values. Without income, real estate buying power in limited, especially in the light







 The real estate buying cycle is likely to elongate (more choices, less pressure, more buying power and flat to declining values). Income growth, or in this case, its stagnation, will determine the market’s health.

3. Value The existing supply of all homes is still high overall in relation to “financeable” demand. Keep in mind, we now have approximately 30-40 percent fewer qualified buyers because of bad credit or reduced income. This disequilibrium is likely to persist and values will continue to fall still further.  Most “modifiable borrowers” are coming to the end of their opportunities and many pre-foreclosure

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properties have been held back. The option window for banks is quickly closing, as well as the mandated deferred foreclosure. Both will cause a second wave of supply as these policies are quietly repealed.

more states as the requirements become more in-sync.

4. Establish a sound, defensible identity fraud program to meet Fair and Accurate Credit Transactions Act (FACTA) Red Flags—avoid any risk of a Federal  Thus, a new wave of foreclosures— Trade Commission (FTC) audit or the those previously deferred—is immi- $3,200 fines/loan. nent and with it, an increase in the supply of Short Sales & Foreclosure 5. Improve your income verification Resource (SFR) and more downward (vetting) tactics early on. Apply more pressure. But this time, the higher scrutiny to the returns or go straight to end value markets will be signifi- 4506-T Income Tax Verification—two cantly impacted. Income erosion years. Seek reimbursement for the ITV if and lifestyle adjustments are now you are a broker. being acutely felt at the upper market levels (homes valued at 6. Consider a careful, thorough look at collateral value, including possibly $300,000-$1 million or more). ordering an automated valuation  American Banker reported that 23 model (AVM) upfront to insulate you percent of all borrowers were likely from spending needless energy on underwater and that this was likely deals with little chance of closing. Use to rise to 30 percent by mid-2010. the AVM as a reality check, a pricing Only the low valuation markets have vehicle (FNMA’s LLPA’s play a role) and any insulation from continued price to anticipate and sell previous ARM customers on refinancing to fixederosion. rates even though it may temporarily But there is a little good news too. increase their payments. It’s only a The large bubble of adjustable-rate matter of time for short-term rate mortgage (ARM) payment resets (loans increases. closed in 2006-early 2007) are just now beginning to hit. Thankfully, for now, 7. If you are not already, commit to becomthey are re-pricing into a very low short- ing Federal Housing Administration (FHA)term interest rate environment. certified. With 46 percent of all lendDefacto, initial payment reset pressure ing closed in July into FHA programs, is low and keeping some of the ARM you cannot afford to not offer these to your customers one way or anothborrowers whole. So it’s a fairly uncertain and even er. For more information, visit worrisome picture, but there are seven tactics that will align you to profit and 20020902.pdf. success in such an environment. Our Package all of these improved overall theme is to embrace underwriting as never before in your business. processes both for the benefit of your Embrace the newly added underwriting client and for the benefit of the lender requirements. Originators who don’t, if you are a broker. Actively sell your simply won’t be originating loans much professionalism to both sides in longer, leaving more business for you. response to protecting them. In this dynamic credit- and crediSuch efforts fall into the category “just do it” with a competitive advantage bility-challenged environment, progained by leading full compliance on fessionalism will carry the day. How you will respond can assure a winning every front. course through a sustained, uncertain 1. Improve and adapt your “Truth-in- market. Lending” processes—especially the timing. Sync-up the disclosure and apprais- Brad Kelso is the vice president, director al ordering timing and eliminate the of marketing and product development at Informative Research, with a cumuladowntime or risk of being shopped. tive 22 years in financial services. Prior 2. Adopt HVCC guidelines and stream- to joining Informative Research, Brad led line your appraisal processes with two- Countrywide’s credit fraud initiatives three known vendors. Use multiple ven- and system development efforts with dors to keep pressure on the legitimacy credits as a national expert and speaker on “Authorized User Score Fraud.” He is and quality of your appraisals. the primary architect of two products 3. Elevate your state licensing and regis- related to identity fraud for the mortgage tration efforts. Avoid fines or licensing industry. Brad can be reached by phone woes that keep you out of adjacent at (800) 473-4633, ext. 150 or e-mail markets. Consider doing business in

Announced Plans to Eliminate FHA Oversight of Mortgage Brokers Originating FHA-Insured Mortgages By Tommy A. Duncan, CMT & George S. Daugharty, CPA

II. The current rules establish high, but attainable, standards for mortgage brokers. Current estimates are that nearly half of the nation’s mortgage brokers are now approved to originate FHA loans, though that percentage has grown drastically over the last two years. Consumers who Tommy A. Duncan, CMT George S. Daugharty, CPA select a broker approved to originate FHA loans recogWe write this as professionals who have nize that the broker is held to a higher stanhad numerous clients in the mortgage dard, as mentioned in a recent article in the broker industry for many years, and as Des Moines Register.2 In fact, in mortgage professionals who are very Congressional testimony by the National familiar with the Federal Housing Association of Mortgage Brokers (NAMB), Administration’s (FHA’s) current regulathe association explicitly states those FHA tion of the industry. The announcement requirements which the association recomfrom the U.S. Department of Housing & mended changing, but not eliminating, Urban Development (HUD) stated that provided “a dual layer of protection for mortgage brokers: both the FHA program and the consumer.”3 “ … will continue to be able to originate FHA-insured loans through their relationships with approved mortgagees [lenders]; however they will no longer receive independent FHA approval for origination eligibility. These policy changes will require the FHA approved mortgagee [lender] to assume responsibility and liability for the FHA insured loan underwritten and closed by the approved mortgagee.”1


Consideration should be given to the thousands of mortgage brokers who have recently attained FHA certification under the current regulations. A significant shift has occurred in the mortgage industry since early 2007, when estimates were that only 18 percent of mortgage brokers were certified to originate FHA-insured mortgages.4 Since that time, thousands of mortgage brokers who previously dealt only with conventional loans, have become certified to originate FHA-insured mortgages. This has greatly expanded the number of outlets from which FHAinsured loans are now offered. In fact, some speculation now exists among industry professionals that, unlike 2007 when the number of outlets for FHA loans was last hotly debated on Capitol Hill, most eligible brokers who deal with middle-income or lower-income borrowers have, by now, worked their way through the FHA’s certification process. This would

FHA’s current system provides an independent regulatory body, which provides consistency and dependably. Even during 2007, when numerous mortgage brokers complained about FHA regulations, no one proposed the elimination of its role as regulator of mortgage brokers. At that time, many mortgage brokers yearned for a replacement of the requirement of the annual financial audit with an alternative, such as a bond requirement. Since that time, the ability to obtain bonds had grown and fees for mortgage broker audits has dropped. In addition, the thousands of mortgage brokers who have gone ahead and successfully applied to FHA … its evident that for them and the agency, the process was not as burdensome as some originally thought. The current system, in fact, provides a modicum of consistency and dependability in an industry still facing

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Copyright © 2009 Emigrant Mortgage Company, Incorporated (Emigrant). All rights reserved. Emigrant is a subsidiary of Emigrant Bank, Member FDIC and is an Equal Opportunity Lender. All product names, company names and logotypes are servicemarks or trademarks of Emigrant in the United States and other countries. The information, products and services contained in this advertisement are believed to be correct but may include inaccuracies, typographical errors and/or omissions. Emigrant does not guarantee the accuracy of the data contained herein. This information is intended for mortgage and/or real estate professional use only and should not be distributed or presented to consumers or any other third parties. This is not an offer or guarantee to extend consumer credit. Program guidelines, terms and/or conditions are subject to change by Emigrant without notice. All loans are subject to submission of a complete application, underwriting review and credit and property approval by Emigrant. Not all products and/or programs are available in all states and/or localities and/or for all loan amounts. Certain products / program are offered through third parties. Other restrictions and limitations may apply. New York Licensed Residential Mortgage Lender: Exempt. Emigrant is registered or licensed with the Banking Departments or Divisions in CT, DE, FL, MA, NH, NJ, NY and PA.


FHA regulations seem prudent, given the recent housing and credit crisis. The announcement left unaddressed whether mortgage brokers would be expected to adhere to current FHA requirements, which would be enforced by the lenders with whom the mortgage brokers dealt, or whether there would be no more mortgage broker level requirements. I believe that, given the recent housing and credit crisis, FHA’s existing mortgage broker rules and requirements should remain in effect with or without a shift in enforcement or regulatory responsibility.

When You THINK Of...




Mortgage brokers are independent and separate from lenders, and should continue to be regulated separately. Though mortgage brokers are already governed by agreements with their respective FHAapproved lenders who would remain subject to the FHA, the FHA rules currently applied to both the lenders and mortgage brokers are necessitated by the autonomy of each of these separate, and often distant, players in the current mortgage market. Mortgage brokers are completely separate and independent entities from the lenders with whom they chose to contract. Often, lenders will establish rela-

mean that the majority of those not certified by the FHA are not eligible, whether it be as a result of their not meeting FHA’s net worth requirements, facility requirements, personal credit histories or some other criteria. For FHA to now remove itself from its role as the approval body for mortgage brokers desiring to originate FHA loans, belatedly thinking that some long gone need is out there to “increase the number of loan correspondents (mortgage brokers) who are eligible to originate FHA-insured loans,” fails to see the seismic shift that had occurred since this issue was last argued on Capital Hill. Removing the FHA’s mortgage broker rules now, without a deeper study of the caliber and quality of the remaining uncertified outlets, is contrary to FHA’s desire to better manage future risk. In addition, abolishing its rules now may also leave a bad taste in the mouths of the honest and hard-working brokers who once thought that one of the few rewards for their integrity through the recent scandals was being able to say they one day could be or had become “FHA certified.” 

Surprisingly, this unexpected policy announcement was buried near the end of HUD’s Sept. 18, 2009 press release whose title, “FHA Announces Credit Policy Changes, Adding Chief Risk Officer,” did not reference this proposed change. Even more surprising was the subtitle of the announcement which began with the statement, “Policy changes will reduce risks …” While some of the proposed changes in the announcement may lead to reduced risks for FHA, this specific proposal would have the opposite effect, and thus, should not be implemented.


tionships over the phone and Internet and never physically meet the brokers who originate loans on their behalf. This is very common in the industry. To thrust upon lenders, a requirement to adequately assume oversight and responsibility for these heretofore independent brokers as both a regulator and de facto insurer all in one fell swoop, represents too great a risk to both the FHA and the marketplace. The risk to FHA will be that many lenders will not adequately fulfill their role. The risk of fraud and default rates will increase in those cases. Certainly, the contemplation of this seems inconsistent with the current administration’s stated contention that the current financial industry requires more regulation and not less. In light of the fact that it was many large wholesale lenders, such as Lehman Brothers and Indy Mac, that developed and pushed down through their mortgage broker channels, millions of now infamous sub-prime loans that contributed to the recent credit and housing meltdown, FHA’s proposed abdication of broker oversight seems perplexing.


Applications before 10/01/09, but originated before 01/01/10 Lien status

Rate thresholds

First lien

Three percentage points or more over the comparable Treasury security yield

Subordinate liens

Five percentage points or more over the comparable Treasury security yield

Procedures3 1. Determine the Treasury yield date. 2. Determine the Treasury yield corresponding to the loan term. 3. Determine the spread between the relevant Treasury yield and the disclosed annual percentage rate (APR). 4. Determine the lien status.

New HMDA Reporting Requirements Regulation C revisions

Applications on or after 10/01/094

 Effective Oct. 1, 2009, Regulation C, the implementing regulation of the Home Mortgage Disclosure Act (HMDA), imposes new data collection requirements, comparison rates and thresholds for reportable rate spreads.1

Lien status

 Transition rules were developed to provide lenders with guidance for reporting rate spread data for changes effective Oct. 1, 2009. To help data users identify loans closed in 2009 and reported using the new rule, the Board will add a notation to each such loan in the publicly available data reported for 2009. The mandatory compliance for all loans consummated on and after Jan. 1, 2010 will eliminate the need for such notations in years after 2009.



 For applications received before Oct. 1, 2009, and originated before Jan. 1, 2010, the revised rules for determining rate spread do not apply and lenders should calculate the rate spread using the “Treasury Securities of Comparable Maturity under Regulation C.”2


 For applications received on or after Oct. 1, 2009 and for loans originated on or after Jan. 1, 2010 (regardless of their application dates), lenders should use the calculation method described in the following table:

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Rate thresholds

First lien

1.5 percentage points above the applicable average prime offer rate

Subordinate liens

3.5 percentage points above the applicable average prime offer rate

Procedures 1. Determine the amortization type. 2. Determine the lock date. 3. Determine the Average Prime Offer Rate (APOR) corresponding to the initial rate term. 4. Determine the spread between the relevant APOR and the disclosed annual percentage rate (APR). 6. Determine the lien status.  The Average Prime Offer Rate (APOR) is the new index developed by the Federal Reserve Board (Board).5 Initially, the Board will base the rate on the Freddie Mac Primary Mortgage Market Survey (PMMS) which is updated on a weekly basis.6 While the APOR is based on the Freddie Mac rates, they are not one and the same. The Board has developed a very complicated formula from which it will expand Freddie Mac’s four rates posted weekly to a total of 14 mortgage products (six variable rates and eight non-variable rates). The Board will publish the APORs on a weekly basis on the Federal Financial Institutions Examination Council’s (FFIEC) Web site.7 Rates are published on Fridays and are effective on Mondays. Effective Oct. 1, 2009, lenders are required to report the spread between the APR and the APOR for mortgage loans of a comparable type (the “rate spread”) for loan originations in which the rate spread meets or exceeds certain thresholds specified by the Federal Reserve Board in Regulation C .  The following chart depicts when the rate spread must be reported:

Reporting rate spread8 Report spread

Do not report spread

Originations of home purchase loans

Applications that are incomplete, with drawn, denied or approved but not accepted

Originations of dwelling-secured home improvement loans

Purchased loans

Originations of refinanced loans

Unsecured home improvement loans

 FFIEC has updated its rate spread calculator for Home Mortgage Disclosure Act (HMDA) purposes, in connection with the Oct. 1, 2009 Regulation C requirement to report rate spreads that trigger higher priced mortgage loans (HPML) coverage rather than rate spreads between a Treasury rate and the loan’s APR. (This calculator can be used to manually to test for HPML. It cannot be used to calculate the [Homeownership and Equity Protection Act] HOEPA status, which requires a different calculation.)  New FFIEC rate spread calculator:

The FFIEC calculator will calculate rate spreads for both fixed and variable rate products. Directions for using the calculator can be found by clicking on the calculator’s Web page.

new to market

continued from page 35

 Setting the rate9 The relevant date to use to determine the APOR for a comparable transaction is the date on which the loan’s interest rate is set by the lender for the final time before closing: 1.If an interest rate is set pursuant to a “lock-in” agreement between the lender and the borrower, then the date on which the agreement fixes the interest rate is the date the rate was set and confirmed by lender. 2. If a rate is reset after a lock-in agreement is executed (for example, because the borrower exercises a float-down option or the agreement expires), then the relevant date is the date the rate is reset by lender for the final time before closing. 3. If no lock-in agreement is executed, then the relevant date is the date on which the lender sets the rate for the final time before closing.

matter where it appears in documentation and no matter what line of business it appears in. It’s a ‘map once, deploy many’ philosophy that enabled us to bring mortgage, consumer and commercial lending to market in just over a year of development time.” For more information, visit or

MRG offers a browser-based system for the preparation and delivery of compliant document packages, electronic disclosures, loan modifications and other services for mortgage lenders, banks and credit unions nationwide. MRG’s products are guaranteed to be in compliance with the most recent legislative and regulatory changes. For more information, visit

MRG launches dashboard for originators  HOEPA reporting (Homeownership and Equity Visionet releases and servicers Protection Act) M R G D o c u m e n t repurchase and claims Although a new test for HPML was added to HOEPA as a result of the above-outTechnologies (MRG), management suite lined 2008 changes to Regulation Z, lenders will still establish HOEPA status using an APR and points and fees trigger tests. The fees trigger may cause a loan to fall under HOEPA even if the loan’s rate spread would not be reportable. If the loan exceeds either the APR or points and fees triggers, its HOEPA status must be reported on the HMDA Loan Application Register (LAR) using Code 1 (for loans that a lender originates or purchases that are subject to HOEPA restrictions because the APR or the points and fees on the loan exceed the applicable HOEPA triggers). The difference in the HOEPA test and the rate spread test is the metric used to determine HOEPA status and rate spread calculations. As currently required by Regulation Z, HOEPA will continue to require lenders to use the H.15 statistical release table as the source of Treasury yields, while the rate spread approach uses new tables developed by the Board titled “Average Prime Offer Rate-Fixed” and “Average Prime Offer Rate-Adjustable.”10

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

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continued on page 45


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1-Regulation C, 12 CFR 203, Final Rule. 2-Source: St Louis Fed: Regulation C Amendments, Transition Rules. 3-Use the rate lock-in date on the loan to first determine the applicable Treasury yield date. Then correlate that date to the 15th of the preceding month (1) if the rate is set between the 1st and 14th of the month or (2) the 15th of the current month if the rate is set on or after the 15th day. After determining the appropriate Treasury yield date, identify the Treasury yield of a comparable maturity from the “Treasury Securities of Comparable Maturity under Regulation C” table. Compare this Treasury yield to the APR at consummation to calculate the rate spread. If the difference between the APR and the Treasury yield is equal to or greater than three percentage points for first liens, or five percentage points for subordinate liens, report the amount of the rate spread. If the difference is less than the applicable threshold, “NA” will be reported in the rate spread field on the HMDA LAR. 4-Op. cit. 2, Rate Spread. 5-Average prime offer rates are annual percentage rates derived from average interest rates, points and other loan pricing terms offered to borrowers by a representative sample of lenders for mortgage loans that have low-risk pricing characteristics. To obtain average prime offer rates, the Board uses a survey that meets these criteria and also provides pricing terms for at least two types of variable-rate transactions and at least two types of non-variable-rate transactions. An example of such a survey is the Freddie Mac Primary Mortgage Market Survey (PMMS). 6-The “average prime offer rate” is survey-based, and, for the foreseeable future, the Federal Reserve Board plans to use a specific survey currently published by Freddie Mac. The PMMS can be found at 8-Op. cit. 2, Pricing Data. 9-Appendix A to Part 203 (HMDA, Regulation C), I, G, 1 (2). 10-Op. cit. 7.

Visionet Systems has announced the availability of the newest versions of its VisiRepurchase and VisiClaims products. VisiRepurchase is used to manage residential mortgage repurchase demands by investors. VisiClaims, is used to initiate claims in line with the parameters of various seller’s agreements. These software solutions increase the number of successful appeals and claims. They improve efficiency by automating routine operations, leveraging skills, enforcing rules and reducing costs for the risk operations department. VisiRepurchase, originally launched in July of 2006, was designed to manage 400 to 500 demands per month, the average repurchase volume at the largest U.S. banks at that time. However, the recent meltdown has pushed repurchase activity to an unprecedented level. In many cases 5,000 to 10,000 repurchases and claims per month are the norm at the top U.S. banks. Visionet redesigned VisiRepurchase and VisiClaims to manage these larger loan volumes and hundreds of additional users. The solutions can support bulk repurchases, appeals, demands, claims and data updates. Both products utilize state-of-the-art workflow and rules engine technologies and can be quickly reconfigured to satisfy changing business and regulatory needs. Visionet has added several standard reports that provide up-to-date portfolio risk information to the chief risk officer or chief financial officer, so regulatory requirements are met in a timely fashion. These reports provide real-time visibility of repurchase and claims pipelines and assist in the enforcement of deadlines. A central portal is provided to connect disparate risk management organs within the bank. For more information, visit 


a provider of mortgage technologies to banks, credit unions and other lenders, has launched a dashboard feature to MIRACLE Online, its electronic document preparation and compliance software, so that mortgage originators and servicers can have detailed visibility into the process workflow of their loan originations, refinances and modifications. Based on workflow criteria provided by the lender or servicer, the dashboard provides real-time visibility to the flow of document creation or the forward movement of multiple events affecting the status of loans. The dashboard and workflow concept gives lenders control of a situation and the ability to automate certain steps that are otherwise handled manually by an individual or team of people. “We created the dashboard feature so lenders can find out exactly at what stage their loans are within the workflow at any given point in time and can share this information with their staff or technology partners,” said Laura LaRaia, an attorney and director of customer service at MRG. “For example, the dashboard reports let the lender or servicer know if loans are flowing at an optimal speed through the process or the reports may show that there is a backlog of loans that needs to be addressed by adding more staff to an area to handle the slowdown.” The process workflow is a customizable, rules-driven engine with automatic notifications, conditional data analysis, reporting and historical audit tracking. Users can configure the visibility of individual windows of information, known as portlets, in the dashboard and can retain each user’s preferences as to the location and order of these portlets to provide a personal dashboard for each user based on his or her role within the organization. Dashboard features include drill-down functionality, role-based security, userlevel filtering and private labeling. Workflow features include parallel processing, automated events created with lender or service definitions, data collection screens for manual events and customizable event duration thresholds with notifications.


fha oversight


continued from page 41

chaotic changes. With the bankruptcy and exodus of lenders in the market, highlighted by Web sites such as The Mortgage Lender Implodometer at, it seems dangerous to require mortgage brokers to rely on their lenders continued operations. In addition, with many lenders changing standards and establishing “tiered” relationships such as those established last year by Wells Fargo Home Mortgage, the consistency and longevity of broker/lender relationships is much shorter and unstable, especially for small brokers. Some brokers are concerned that if this change were to go into effect and the market were to deteriorate again or market changes were to negatively impact lenders, the newfound control they would have with this proposed change would enable them to arbitrarily wipe out a class or category of mortgage brokers or even the entire industry.

2528, ext. 124 or e-mail George S. Daugharty, CPA is a Virginia-based Certified Public Accountant, serving middle-market businesses with a focus on FHA-approved mortgage brokers and lenders. He may be reached by phone at (540) 459-9000 or e-mail Visit co-author Tommy A. Duncan, CMT’s Quality Mortgage Services LLC Web site at for more information on quality control programs and compliance solutions. Visit co-author George S. Daugharty, CPA’s Web site at for more information on income and estate tax planning for closely held, middle-market businesses and high net worth individuals.

Footnotes I applaud the agency’s desire to minimize risk, and especially fraud in the industry, but feel this proposal is contrary to that intent and hazardous to the mortgage broker industry. I would suggest instead that the agency:



1. Increase its staffing and training to better handle the increased number of FHA originators and originated loans being seen in the marketplace; and 2. Continue encouraging greater investigation and prosecution of misconduct by mortgage originators involved in fraud. In doing so, it will better ensure that dishonesty is punished and honesty in the industry is rewarded.


Tommy A. Duncan, CMT is executive vice president of Quality Mortgage Services LLC. He may be reached by phone at (615) 591-

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1-HUD Announcement No. 09-177, “FHA Announces Credit Policy Changes, Adding Chief Risk Officer,” Sept. 18, 2009. 2-Des Moines Register, online edition, March 31, 2009, “How to Select a Mortgage Company in Des Moines.” 3-National Association of Mortgage Brokers prepared testimony on “Solvency and Reform Proposals for the Federal Housing Administration” before the Subcommittee on Transportation, Housing and Urban Development and Related Agencies, Senate Committee on Appropriations, March 15, 2007. 4-National Association of Mortgage Brokers prepared testimony on “Modernization of Federal Housing Administration Programs” before the Senate Committee on Banking, Housing and Urban Affairs, July 18, 2007.

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continued from page 34

not tens of thousands, of dollars. This is an old salesmen tactic, and while most of us reading it can see its intent a mile away, you’d be surprised by how the right person in the wrong situation can succumb to such an obvious and blatant come-on. After all, it’s worked for used car salesmen for as long as, well, there have been used car salesmen. Why shouldn’t it work in our industry as well?

“No one will ever catch us.” Risk may be the ultimate rush, but we’ve all seen those “World’s Dumbest Criminals” shows on TV, and the only difference between a bad guy robbing a bank and a bad guy committing fraud is that they usually don’t show up on surveillance cameras. Even if they did, it’s quite hard to spot someone forging a document when it’s just as easy to put down the right figures, as it is to write in the wrong ones. What would we look for, anyway? A phony moustache and sunglasses? A secret decoder ring and trench coat? If we cannot always see fraud being committed, we can certainly hear it, and it’s important for us to keep our ears open, as well as our eyes. For that matter, let’s open our minds as well. Detecting fraud is a mindset, much like exercising or eating right. Habits are born of routine and the surest way to start spotting fraud is to become aware of its existence. Only then will we start to believe that it exists. When we believe in the existence of fraud, we can then start taking active steps, every day, to combat it. It may be an everyday battle, but the longer we fight, the stronger we get, and once something becomes a habit, the less difficult it is to achieve and the harder it is to forget.

heard on the street

Like the latest technology the bad guys and gals use to commit fraud, fraudsters are always on the cuttingedge of criminal vocabulary to get innocent pawns such as you and I to help them commit their crimes … never forget, fraud is a crime! Like fashion or pop music, what fraudsters say to dupe us will go in and out of vogue from year to year. Industry terms will change and so, too, will their tactics and terms to keep up with the times. Training seminars, workshops, new fraud prevention procedures, Web sites, newsletters … they can all help to educate us on the various buzzwords and phrases to look out for, but we can only combat fraud so far because the bad guys tend to work much harder at this than we do. Remember, all I’m trying to do is educate you as to the various ways in which the fraudsters do business. Obviously, new information comes out on a daily basis that will have tips and strategies the bad guys have adopted since this publication, but at the core—and the way in which we’ll stop the bad guys— will be the same principles of fraud. Buzzwords, forms, technologies, interest rates, documents … these will all change, but so too must we to keep up with the latest cons these fraudsters are pulling. After all, sometimes it’s not even what the bad guys are saying, but how they say it. Are you listening? Michael S. Richardson is director of forensic mortgage services for Lenders Compliance Group and author of the book, An American Epidemic: Mortgage Fraud—A Serious Business. He may be reached by phone at (516) 442-3456, ext. 102 or by e-mail at

continued from page 34

of National Closing Solutions and Placer Title, has announced the addition of Adrian Prieto as vice president, eastern region senior account manager; and the promotions of Alissa Scott and Heather Moulden as vice presidents of the company.  The Stonell Group has added Terry L. King as national director of marketing and sales, Barry Tomlinson as special projects manager, Douglas Parker as quality control manager, Matthew Fair as quality control audit manager, and Sue Messick as fulfillment manager.  NexBankhas named Tish Ashleyvice president of its residential mortgage division.  Caroline Reaves has been promoted to the position of chief executive officer of Mortgage Contracting Services.

Your turn National Mortgage Professional Magazine invites its readers to submit any information, events, passages, promotions, personal or professional occurrences that seem appropriate and/or other pertinent data to the attention of:

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

new to market

continued from page 43

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The National Groups expands modification and short sale programs The National Groups, the parent company of the National Default Servicing LLC suite of mortgage service operations, has announced a full roll out of its Modification and Short Sale Fulfillment Program. National Collections & Loss Mitigation Services LLC, The National Groups’ full-service default management firm, has begun providing its default fulfillment services to government agencies as well as institutional and private mortgage investors and servicers. “The full roll out of this program is an effective response to the volume of distressed borrowers under President Obama’s Home Affordable Modification Program (HAMP) and the significant increase in foreclosed and real estateowned (REO) properties nationwide,” says Larry Bird, chief operating officer of The National Groups. “Our 25-year history in the real estate and REO special servicing industries uniquely positions The National Groups to lead the charge under the HAMP initiative, while offering effective and timely program execution to a default industry that desperately needs it.” The National Groups provides a full suite of customizable default services through an aggressive utilization of

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TSS Software Corporation, an independently-owned provider of software and services for the title and settlement services industry, has released a new version of

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TSS releases new version of TitleExpress

quality control,” said Bruce Wentworth, senior managing director of The National Groups. “Whether it’s an appraisal, a broker price opinion, or an automated value product, we’re constantly reviewing our skill set and value proposition.” For more information, visit Founder, President and Chief Executive Officer Brad Geisen has announced the launch of QuickSale, a short sales offer management system that handles marketing, processing, negotiating and closing services all in one central location. QuickSale was designed to simplify an often long and complicated process, bringing together all parties—distressed homeowners, lenders, investors, buyers and agents— who all share the common interest of moving real estate inventory as fast as possible under the best terms. “Banks lend money, they’re not in the business of marketing and selling real estate—certainly not on today’s current scale,” said Geisen. “And their loss mitigation departments are just too overwhelmed at this point. is a structured tool that provides muchneeded support and relief. It short circuits the entire foreclosure process to ensure the best possible outcome for all parties involved … quickly.” was founded to close the loop by bringing in agents and buyers located throughout the United States and beyond who purchase distressed properties at negotiated prices before the banks repossess them. Agents who coordinate short sales from start to finish through the QuickSale system earn commissions. For more information, visit

its TitleExpress title and closing system that includes the 2010 HUD-1. The new version is designed to help TitleExpress users meet the new requirements mandated by the U.S. Department of Housing & Urban Development (HUD), effective Jan. 1, 2010. The rule directly affects two key elements of the real estate closing—the Good Faith Estimate (GFE) and HUD-1 forms—and requires several dramatic changes in the way the forms must be completed and coordinated. “Our users look to us to help them stay productive and up to date,” said Barbara Miller, president and chief operating officer of TSS. “Implementing the new HUD-1 into the workflow of a settlement services firm will likely mean a disruption in the way they do business, no matter how well it is done. The timing of this release will help ensure that our users are ready to go well before they absolutely need to be. To provide our customers with optimal flexibility in the interim, the new version of TitleExpress offers the option for using either the current HUD-1 or the 2010 HUD-1.” The TitleExpress 2010 HUD-1 release follows TSS’s launch of its Web site in March, which also includes an interactive 2010 HUD-1 and GFE. In developing all customer options, TSS consulted with HUD personnel to ensure the forms’ accuracy. For more information, visit

flexible technology, including ISIS, the firm’s proprietary Web-enabled default solution and data warehouse. In addition, The National Groups utilizes third-party default management software solutions like REOTrans, a provider of asset, vendor and REO management software, and DRI, a leader in default management solutions, by client request. Both strategic partners provide The National Groups an integrated process flow around loan modifications, short sales, deed in lieu of foreclosure, and REO processes. The National Groups, which partnered in the development of DRI’s HAMP platform, has fully trained its representatives on both firms’ applications. As part of the Program roll out, The National Groups is reintroducing its full valuation suite of products offered through National Valuation Services LLC, a nationwide provider of all types of valuation products and valuation quality control services. “Today, it’s all about expertise and


Low Rates and Fences We have ended our perspective on what happened in the secondary markets with regard to the financial crisis. It is time to take a look at what is happening now. The stock market and certain financial measures are telling us that we are in the early

stage of a recovery. For example, the Standard & Poor’s (S&P) Index has rallied from below 700 to over 1,000 from the low hit this spring, a swing of over 50 percent. Meanwhile, many are expecting the gross domestic product (GDP) to show a gain for the


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third quarter according to preliminary numbers that are scheduled for release as we go to press. While the gain is not expected to be strong, that would certainly be a far cry from the first quarter contraction of over six percent. While gains of 50 percent seem very strong, we must understand that we have a long way to go. The S&P is still approximately 30 percent below the record high hit two years ago. Actually, those of us who are in the mortgage industry do not have to be reminded that we have a long way to go in order to climb out of the recession and financial crisis. With foreclosures still soaring, any housing rebound is expected to take a long time. And with the unemployment rate knocking on the door of 10 percent, a slow recovery will take place in most sectors of the economy. This continued risk of slow growth seems to have won out most recently with regard to interest rates. With the Fed supporting low rates by spending tens of billions to purchase mortgage-backed securities (MBS), last month, we again hit the historic lows of this spring. Of course the question most everyone is asking is: Where will rates go from here? Last month, our secondary expert, Eric Holloman, chief executive officer of RateLink, mentioned the likelihood of volatility. With the government spending so much money to support the stimulus of the economy, there is long-term risk of inflation. The price of gold stands as evidence of this belief. However, while there remains a risk of a very slow recovery and even a move back into recession, the risk of inflation is minimized. Hence, lower rates and the potential for volatility that will kick in every time there is a hint that the economy is getting stronger. One thing we can say is that there is a greater risk that rates will go up as opposed to going down from here. We are not predicting the future of rates. We are just looking at reality. It is really physics. When rates are very low, they are more likely to go up. If rates were at 10 percent right now, we would say they are more likely to go down. I have never been a big believer in charts. I am a fundamentalist. Any catastrophic event that occurs tomorrow can change all the rules. I would never predict that rates will rise tomorrow or next week. But risk is risk, and the risk is greater on the upside because rates are so low. What does that mean for your production? Well, we certainly are in refinance territory for millions of Americans. Any time rates go down, you have many Americans waiting for them to go down even further. It is human nature to have prospects on the proverbial “fence.” If rates went down to 3.5 percent tomorrow, they would still be waiting. What typically happens is that they jump into the

market when rates start going up because they are afraid they have missed the opportunity. And if the increase is volatile, they may miss the opportunity. Every loan officer faces this dilemma with one or more prospects. The question is: How do we get them off the fence without trying to predict the future of rates? We should be comfortable citing the risk of rates moving up or down. At the same time, we also need to show the prospect not only the benefits of refinancing, but the cost of waiting. The cost of waiting is merely the money they lose by not acting today. Let’s say that the client would benefit by $250 per month by refinancing today. But the client is waiting for “another 1/4 percent.” That extra downward move in rates, if it comes, would give them another $40 per month in savings according to this fictitious example. The cost for every month they wait is $250. In this instance, let us assume that it takes six months for rates to move another 1/4 percent. In six months, the cost to the client is $1,500. If they successfully refinance at the lower rate, it will take them three years to make up this cost ($1,500 divided by 40). And remember, there is a risk that rates will stay the same. If that happens they will be out $1,500 without any gain. There is also that “greater” risk rates will go up. In this case, the cost would be $1,500 plus the lower gain for as long as they have the mortgage. This cost could wind up being $10,000 or more over 10 years. One other point … while the prospect is waiting in this market, there is always the chance that the appraised value will decrease and/or the lender will raise the rate because credit requirements have increased. In other words, the cost could increase or the transaction may not go through even though rates did not change. Obviously, missing out on the chance to save “X” dollars per month is even more of a cost. Yes, there is a cost of waiting, even if rates go down. Remember, rates can stay the same and the cost of waiting goes up. If rates rise, the costs of waiting rises even more. It is important for our prospects to understand the relationship between rates and risks. This is a perfect example of how understanding the markets and rates can help you production. Dave Hershman is a leading author for the mortgage industry with eight books and several hundred articles to his credit. He is also head of OriginationPro Mortgage School and a top industry speaker. If you would like to stay ahead of what is happening in the markets, visit for a free trial or e-mail




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.”



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ACC Mortgage .................................................. ............................................21 American Pacific Mortgage................................ ..........................................46 Calyx Software ................................................ ........................................6 CCRS Credit Services ........................................ ..................................48 CMG Mortgage, Inc. .......................................... ....................44 Credit Ability .................................................. ..........................................45 Credit Plus, Inc. .............................................. ............................................46 Credit Technologies, Inc. .................................. ................................20 Digital Mail Maker............................................ ..............................NV 1 Elliott and Company Appraisers, Inc................... ..............................................14 Emigrant Mortgage Company ............................ ................................41 Entitle Direct Group.......................................... ..................Inside Front Cover Fannie Mae...................................................... ..............................................5 .................................... ..............................NV 2 First Source Capital Mortgage, Inc. .................... ..........................................11 Flagstar Bank .................................................. ............33 & Back Cover Flex Closing Corp. ............................................ ..........................................39 Franklin American Mortgage ............................ ..................................48 Franklin First Financial .................................... ..............................................45 Frost Mortgage Banking Group ......................................................................................................22 Guaranteed Home Mortgage.............................. ..................................................16 HTDI Financial ................................................ ........................................15 Mortgage Insurance Agency .............................. ................................................48 Mortgage Now, Inc. .......................................... ........................................13 Mortgage Spirit, LLC ........................................ ......................................39 ...................................... ..................................47 NAMB West ...................................................... ....................................................17 NAPMW .......................................................... ..................................................35 NetMore America Wholesale.............................. ..................................46 NYLX .............................................................. ....................................................20 Paramount Residential Mortgage ...................... ............................................20 Platinum Credit Services, Inc............................. ..........................23 Presidents First Mortgage Bankers .................... ......................................25 Quality Mortgage Services ................................ ....................................9 & 40 Specialty Services Credit Repair ........................ ..........................39 TRW Credit Group ............................................ ......................................44 United Northern Mortgage Bankers Ltd. ............ ......19 & Inside Back Cover Uniwest Mortgage Corporation .......................... ..................................42 Wall Street List ................................................ ........................................19 Wells Fargo Home Mortgage.............................. & 27

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 DECEMBER 2009 Saturday-Tuesday, December 5-8 NAMB/WEST MGM Grand Hotel & Casino 3799 Las Vegas Boulevard South Las Vegas For more information, call (703) 342-5900 or visit FEBRUARY 2010 Monday-Thursday, February 1-4 Mortgage Bankers Association CREF/Multifamily Housing Convention & Expo Mandalay Bay Resort & Casino 3950 Las Vegas Boulevard South Las Vegas For more information, call (800) 793-6222 or visit Wednesday, February 17 Florida Association of Mortgage Brokers (FAMB) Broward Chapter 2010 Annual Trade Show The Broward Convention Center 1950 Eisenhower Boulevard Fort Lauderdale, Fla. For more information, call (954) 761-1422 or visit Tuesday-Friday, February 23-26 Mortgage Bankers Association National Mortgage Servicing Conference & Expo Manchester Grand Hyatt 1 Market Place San Diego For more information, call (800) 793-6222 or visit MARCH 2010 Sunday-Wednesday, March 14-17 27th Annual Regional Conference of Mortgage Bankers Associations Trump Taj Mahal Casino Resort 1000 Boardwalk at Virginia Avenue Atlantic City, N.J. For more information, call (973) 379-7447 or visit APRIL 2010 Sunday-Wednesday, April 25-28 Mortgage Bankers Association National Technology in Mortgage Banking Conference & Expo Hyatt Regency Chicago 151 East Wackler Drive Chicago For more information, call (800) 793-6222 or visit AUGUST 2010 Wednesday-Friday, August 18-20 California Association of Mortgage Brokers 2010 Annual Convention & Grand Exposition Hyatt Regency Long Beach 200 South Pine Avenue Long Beach Convention Center 300 East Ocean Boulevard Long Beach, Calif. For more information, call (916) 448-8236 or visit

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