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A Special Focus on “Leadership”

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Volume 5, Number 4

Company

Web Site

Page

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How Leaders Can Use Technology to Connect With Their Followers By David Lykken ........................................42

AllRegs ............................................................ www.allregs.com ................................................42 American Financial Resources Inc. .................... www.afrwholesale.com ..................Inside Back Cover Amerisave Mortgage Corporation ...................... www.amerisavetpo.com ........................................37 Appraisal Nation, LLC ...................................... www.appraisal-nation.com ..................................57

Leadership From the Heart By Kerry Elam ........................43

Brokers Compliance Group................................ www.brokerscompliancegroup.com ........................27

Are Leaders Born or Can Someone be Taught to Lead? By Les Acree ........................................................45

CBC National Bank .......................................... www.cbconnex.com ............................................44

Leading With Honor: Do You Have What it Takes?

By Lee Ellis ..........................................................................46

Calyx Software ................................................ www.calyxsoftware.com ......................................33 Cendix ............................................................ www.zairmail.com/mortgage_marketing ................45 Credit Plus, Inc. .............................................. www.creditplus.com/undisclosed-debt-monitoring ..13

Visionary Organizations ..................................................47

Data Facts........................................................ www.datafacts.com ..............................................52

Features

Equity Loans LLC .............................................. mathew@equityloans.com ......................................5

Consistency is Key By K. Justin Restaino ..............................4

FindMortgageJobs.com .................................... www.findmortgagejobs.com ..........................36 & 55

The Elite Performer: Membership Matters

By Andy W. Harris, CRMS ........................................................4

HomeBridge .................................................... www.homebridgewholesale.com ..........................11

True Partnership By Sharon Bitz ..........................................6 The Enforcement Powers of the Consumer Financial Protection Bureau By Jonathan Foxx ....................................8 Using Engagement-Based Professional Services to Meet Your Business Needs By Dan Thoms ........................10 Part II: Postal Service to Stop Delivering Mail on Saturdays … No Impact on Timing of Disclosures, Rescission Period By Melanie A. Feliciano Esq. ......................12 Three Origination Strategies to Deploy Now

Document Systems, Inc./DocMagic .................... www.docmagic.com ..............................................9

First Guaranty Mortgage Corp. .......................... www.fgmcwholesale.com ......................................23 Meadowbrook Financial Mortgage Bankers Corp. .. www.mortgagesalesjob.com ..................................25 Menlo Park Funding ........................................ www.menloparkfunding.com ................................55 NAPMW .......................................................... www.napmw.org ..................................................16 New Penn Financial, LLC .................................. www.gonewpenn.com ..........................................41 PB Financial Group Corp. .................................. www.pbfinancialgrp.com ......................................36 REMN (Real Estate Mortgage Network)................ www.remnwholesale.com ......................................7 Residential Home Funding Corp. ...................... www.RHFBranch.com ..........................................35 Ridgewood Savings Bank .................................. www.ridgewoodbank.com ....................................39

By Don Kracl ........................................................................................14

Streetlinks LLC ................................................ www.streetlinks.com ....................Inside Front Cover

Bonded With NAMB: It’s Not Personal …

It’s Just Business By Mason Grashot, CPA ..........................18

TagQuest ........................................................ www.tagquest.com ..............................................17

For Managers Only: Developing a Recruitment Package By Dave Hershman ................................................19

Titan List & Mailing Services, Inc. ...................... www.titanlists.com ..............................................29

NAMB Perspective ..........................................................20

United Wholesale Mortgage .............................. www.uwm.com ........................................Back Cover

The HECM Loan Comparison Summary

By Ralph E. Rosynek Jr. ..........................................................24

WCS Lending .................................................... www.wcswholesale.com ......................................58

NMP Mortgage Professional of the Month: Eddy Perez, President, Equity Loans By David J. Coster ....30 Finding and Attracting Customers in 2013 ....................34

USA Cares Mortgage Heroes: Joann Muncey

By Jennifer Robinson ............................................................................38

Mortgage Lead Buying Guide By Joshua Conklin ................41 The Secrets to More Closings By Jean LeBlanc ................52 Social Media and Becoming Your Local Expert

By Cathy Blaszyk ..................................................................53 NAMB Sales & Marketing Tips for Today’s Mortgage Professional: Keeping in Contact

By Fred Arnold, CMC ............................................................54

Compliance Solutions for the Appraisal Management Industry ....................................................56

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You Are a Prime Target … But Are They a Prime Destination? By Steve Rennie ..............................................55

Ultimate Mortgage Expo.................................... www.ultimatemortgageexpo.com ..........................15

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Transferring Appraisals: Helping: Lenders and Brokers Understand How Standards and Rules Interact By Richard L. Borges II, MAI, SRA ....................37

The Bond Exchange .......................................... www.thebondexchange.com ................................19

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Filling the Void: Vision and Aggregation Benefits All By Todd Hollosi ................................................26

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Reverse Mortgage Solutions .............................. www.RMPath.com ................................................31

Volume 5 • Number 4 1220 Wantagh Avenue • Wantagh, NY 11793-2202 Phone: (516) 409-5555 • Fax: (516) 409-4600 Web site: NationalMortgageProfessional.com STAFF Eric C. Peck Editor-in-Chief (516) 409-5555, ext. 312 ericp@nmpmediacorp.com Joel M. Berman Publisher - CEO (516) 409-5555, ext. 310 joel@nmpmediacorp.com David J. Coster Senior Editor davidc@nmpmediacorp.com Robert Peter Ottone Assistant Editor (516) 409-5555, ext. 314 robertpo@nmpmediacorp.com Joey Arendt Art Director joeya@nmpmediacorp.com Jon Blake Advertising Coordinator (516) 409-5555, ext. 301 jonb@nmpmediacorp.com Beverly Koondel National Account Executive (516) 409-5555, ext. 316 beverlyk@nmpmediacorp.com Scott Koondel Billing Coordinator (516) 409-5555, ext. 324 scottk@nmpmediacorp.com ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact National Account Executive Beverly Koondel at (516) 409-5555, ext. 316 or e-mail beverlyk@nmpmediacorp.com.

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

SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext.

301; e-mail orders@nmpmediacorp.com or visit www.nationalmortgageprofessional.com. Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600.

Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the authors alone and do not imply the opinion or endorsement of NMP Media Corp., or the officers or members of National Association of Mortgage Brokers and its State Affiliates (NAMB), National Association of Professional Mortgage Women (NAPMW), National Consumer Reporting Association (NCRA) and/or other state mortgage trade associations.

Participation in NAMB, NAPMW, NCRA, and/or other state mortgage trade associations events, activities and/or publications is available on a non-discriminatory basis and does not reflect the endorsement of the product and/or services by NMP Media Corp., NAMB, NAPMW, NCRA, and other state mortgage trade associations.

National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, and/or other state mortgage trade associations do not make any misrepresentations or warranties concerning the regulatory and/or compliance aspects of advertisers, products or services and/or the editorial content contained in NMP Media Corp. publications. National Mortgage Professional Magazine and NMP Media Corp. reserve the right to edit, reject and/or postpone the publication of any articles, information or data.

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With clarity comes vision This month, beginning on page 47, we present our first-ever look at the mortgage industry’s trendsetters who have remained ahead of the curve in our “Visionary Organizations” feature. We took a closer look and polled 18 of these such firms to find out what makes them tick and what differentiates them from their peers. We went straight to the decision-makers to gauge their thoughts on how they came into their current position, what they are doing to remain on top, and where they see themselves down the line. I want to personally thank all of these visionaries once again for taking part in this first ever feature and it is my hope that our readership learn and implement ways in which to keep their own firms ahead of the game.

Our Mortgage Professional of the Month This month, we had the opportunity to profile Eddy Perez, president of Atlanta-based Equity Loans. Eddy, a Cuban immigrant, discusses a healthy balance between work and home life, the sacrifices made in building up Equity Loans to what it is today, his proudest industry accomplishments and why his firm stands apart from the rest in today’s market. Read more about Eddy and his story on page 30.

In closing …

I want to personally thank you again for reading yet another issue of National Mortgage Professional Magazine. We are just one issue away from celebrating our fourth anniversary, and nearly 50 issues later, we have brought to you, month in and month out, the most relevant news and stories from an array of authors spanning all facets of the industry. Much like many of our leaders today, our magazine is wellversed, covering a number of topics with the primary goal of assisting you in succeeding in the mortgage industry of 2013 and beyond. If you see something in our publication that strikes you, feel free to reach out to us and our authors and let us all know just what it was that inspired you.

Sincerely,

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

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

Copyright © 2013 NMP Media Corp.

Leaders in all shapes and sizes What is the first thing you think of when you think of the term “leader?” A chief of the tribe? A war general? A coach? A team captain? These people all share a number of qualities, but this month, we take a closer look at leadership and exactly what it takes in today’s marketplace to be deemed a leader. To me, I would describe a “leader” as one who can keep on top of the industry, always maintaining an even keel, through the highs and lows. They are the ones who boost the morale in the downtimes, and who realize that the upswings in the marketplace will not last forever. They have the vision and foresight to look ahead and project where the next wave will come and properly prepare to ride it out.

For me in particular, I look to those who are involved with our industry trade associations as those who can easily be deemed leaders in today’s ever-shifting mortgage market. The heavily-regulated mortgage industry has just a handful speaking and giving a voice to the masses. This small population of trade association participants carries the load. They do yeoman’s work on behalf of the entire industry. At a time when the industry is coming back to life, there are still too many who sit on the sidelines and benefit from the work of others. Those others are their peers, yet they are a unique group who shares leadership qualities in the sense that they sacrifice time out of the office and spend time away from their families in order to benefit the industry as a whole. This small minority of the industry labors for the greater good, whether it be by meeting with their elected officials to educate policy-makers in D.C. or locally, to hosting industryoriented events designed to bring mortgage professionals together for networking opportunities and education requirements. Just as everyone on a championship sports team gets a championship-winning ring when they win a title, everyone from the team secretary to the captain, everyone in the mortgage marketplace is benefitting from their work, and to me, this truly exemplifies what makes up today’s leaders in the mortgage marketplace.

Kicking things off in our special section on leadership this month is David Lykken of Mortgage Banking Solutions. David’s article on page 42 explores the many ways today’s leaders can stay on top in the industry, with technology at the forefront. Following David, Kerry Elam of Actualize Consulting takes a closer look at some character traits beginning on page 43 of what it takes to be a leader. In her piece, “Leadership From the Heart,” Kerry examines the principles that can be used to guide the leaders of today, and provides us with a list of books on what it takes to develop these leadership qualities. On page 45, Les Acree of Freedom Mortgage brings us the age-old debate, is a leader born or can a leader be developed. Les tends to agree that our leaders need to be developed, and highlights ways in which to find tomorrow’s leaders who may be buried deep within your own organization. Lee Ellis of leadership development company Leadership Freedom, takes a closer look on page 46 at honorable leaders. Lee takes a personal perspective as a former Vietnam prisoner of war and discusses the need for honorable leaders in all facets of today’s society.

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O F F I C E R S

The Association of Mortgage Professionals

National Association of Professional Mortgage Women

2701 West 15th Street, Suite 536 v Plano, TX 75075 Phone #: (703) 342-5900 v Fax #: (530) 484-2906 Web site: www.namb.org

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

NAMB 2012-2013 Board of Directors

National Board of Directors 2012-2013

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

President Candace M. Smith, CME (512) 306-6354 president@napmw.org

Vice President—Northwestern Region Debbie Tofte, GML (425) 483-3359 dtofte@gmail.com

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

President-Elect Jill Kinsman (206) 344-7827 jill.kinsman@usbank.com

Vice President—Western Region Lyman King III, CMI, CME (916) 967-4653 lking@gemcorp.com

Fred Arnold, CMC—Treasurer American Family Funding 24961 The Old Road, Suite #101 v Stevenson Ranch, CA 91381 (661) 284-1150 v fred.arnold@affloans.com

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

Secretary Sara Vasura (703) 255-7460 svasuranapmw@gmail.com

Kay A. Cleland, CMC, CRMS—Secretary KC Mortgage LLC 200 South Wilcox Street #224 v Castle Rock, CO 80104 (720) 810-4917 v kay@kcmortgagecolorado.com

Vice President—Central Region Kelly Hendricks (314) 398-6840 khendricks@fsbfinancial.com

Treasurer Jeanne Evans, CME (918) 431-0155 drmjevans@att.net

Jim Pair, CMC—Immediate Past President Mortgage America Corpus Christi Inc. 22800 Bulverde Road, Apt. 1402 v San Antonio, TX 78261 (361) 774-7314 v E-mail: jlpair@aol.com

Vice President—Eastern Region Katrica J. Driscoll, MML, CME, CMI (919) 877-5683 kdriscoll4@nc.rr.com

Parliamentarian Hulene Works (972) 494-2788 admin@napmw.org

Rocke Andrews, CMC, CRMS—Director Lending Arizona LLC 1996 North Kolb v Tucson, AZ 85715 (520) 886-7283 v randrews@lendingarizona.net

National Consumer Reporting Association

Rick Bettencourt—Director Mortgage Network 300 Rosewood Drive v Danvers, MA 01923 (978) 777-7500 v rbettencourt@mortgagenetwork.com

Andy W. Harris, CRMS—Director Vantage Mortgage Group Inc 15962 SW Boones Ferry Road, Ste. 100 v Lake Oswego, OR 97035 (503) 496-0431, ext. 302 v aharris@vantagemortgagegroup.com Olga Kucerak, CRMS—Director Crown Lending 328 West Mistletoe v San Antonio, TX 78212 (210) 828-3384 v olga@crownlending.com

Dick Morin—Director Consumers First Mortgage P.O. Box 918 v Kennebunk, ME 04043 207-985-2895 v dick@consumers1stmortgage.com Valerie Saunders—Director RE Financial Services 13033 West Lindburgh Avenue v Tampa, FL 33626 (866) 992-0785 v valsaun@gmail.com

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

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

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John Stevens—Director Bank of England d/b/a ENG Lending 11650 South State Street, Ste. 350 v Draper UT 84020 (801) 427-7111 v jstevens@englending.com

2013 Board of Directors & Staff

OHIO MORTGAGE PROFESSIONAL MAGAZINE

Linda McCoy—Director Mortgage Team 1 Inc. 6336 Piccadilly Square Drive v Mobile, AL 36609 (251) 650-0805 v linda@mortgageteam1.com

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D I R E C T O R S

Donald E. Fader, CRMS—Director SMC Home Finance PO Box 1376 v Kinston, NC 28503-1376 (252) 523-5800 v dfader@smchf.com

701 East Irving Park Road, Suite 306 v Roselle, IL 60172 Phone #: (630) 539-1525 v Fax #: (630) 539-1526 Web site: www.ncrainc.org

Consistency is Key

By K. Justin Restaino

K. Justin Restaino is vice president of Titan List & Mailing Services Inc. For more than 13 years, he has led Titan’s Mortgage Division, helping lenders of all capacities grow their businesses utilizing targeted direct mail. With a specialized focus in refinance and purchase markets, Restaino has the insight for proper data and mail application for success. He may be reached by phone at (800) 544-8060, ext. 204 or e-mail justin@titanlists.com.

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Over the last four months, our team has offered insight for mortgage direct marketing that include how to properly model your data, design and develop your mail pieces and how to properly vet your marketing company. This month, we will touch upon how to extract the most from your marketing efforts through volume and mailing consistently.

Marketing can be boiled down to one simple concept … it’s a numbers game. Lenders with the capacity to market large universes enjoy great returns, as they capture the most prospects within their target market. However, for those lenders and brokers without a large marketing budget, consistency in efforts will play a major role in return on investment.

Let’s assume that in a universe of 10,000 prospects, there are 100 unique responders (one percent response). To capture all 100, you must mail all 10,000 prospects. If you break up the 10,000 prospect universe into smaller drops of 2,500 for example, you may not get the same response rate on each drop until the total universe is completed. Why? Because how do you know where all of the responders lie within the data? The first pull may only have 15 of the assumed 25 responders, while the remaining records have the others. If you do not have the budget to mail all 10,000 at once, your best return will come once the entire universe is completed, at which that point you can make the fair assessment of the overall campaign. While drops as small as 2,500 pieces can be effective, anything less is shown to have inconsistent returns. This is because you simply cannot capture enough “meat” within the universe. In reference to the aforementioned 10,000 universe, if you were to mail only 1,000 pieces per drop, you would need 10 total drops to see the full potential return. Minimum quantity delivers minimum results, whereas maximum volume delivers maximum results.

Experienced marketers will tell you that response is not consistent, as many variables come into play on a weekly basis. These variables include market conditions, the general economy, talking points on the news, holidays and even the weather. However, by mailing consistently, you will not see the dramatic highs and lows experienced by those with sporadic drops. In doing so, you will build a sustainable platform that will allow for proper monitoring of performance and provide a true “calendar of results.” Lenders that market on a weekly or bi-weekly schedule typically see their return-on-investment (ROI) range from $3 to $16 for every marketing dollar invested. When establishing your direct mail goals, build your plans with the intent of mailing weekly and to mail as much as possible of your given universe.

Sponsored Editorial

Membership Matters I want to tell a little story that I believe most of you can relate with that are in the mortgage industry. It’s a personal story about when things changed in our industry and what I chose to do about it. The purpose of this story is to uncover the importance in being part of a trade association and the all too often question asked, “Why?” We are facing historic times in our industry and understanding how association membership improves your business and the consumer experience is very important.

It was the tail end of 2009, and we were just getting through the largest financial meltdown many of us are all too familiar with, and will likely never again witness in our lifetime. The level of economic impact and regulatory response, as a result, was inevitable. It was clear that things were going to change and change had already begun.

While at this time, I felt that I was somewhat well-informed and had a successful business, I really started to pay closer attention.

The primary thought in my mind was if the aftermath of regulatory changes would be created by factual data and occurrences or just general blanket assumptions. Equally important was the face of our industry to the general public. Where do our regulators, legislators and consumers get their information from? We now have an opportunity to improve the future of our industry and correct the clear issues that could not continue, but how do we influence the decision-makers and keep abreast on the most recent proposals and changes we face? Small or large, every change will impact the operations and future for all mortgage professionals.

One day, the light went on in my head when I was sitting at my desk. It was me. I am one that needs my voice heard. I am the one who must do my part to step up and get involved. After all, this is my career and shouldn’t I

“And so, my fellow Americans: ask not what your country can do for you – ask what you can do for your country.”

—John F. Kennedy

treat it as such? Our industry is finally cutting the fat and this is a huge opportunity to be part of shaping our future.

While I had been a member of our state association for some time, I had never really put much thought into it or really paid attention until now. This is our industry and our association. This is not an association for the few, and we must shape this together.

In early 2010, I began diving into our state trade association. I went to meetings and got involved. Shortly thereafter, my passion led me to a leadership position as president of my state association in Oregon. A lot of invested time, meetings, travel, and a few years later, I can tell you this was the best decision I have ever made for my career and I am now on the 2013 board of directors with NAMB—The Association of Mortgage Professionals. Even with some of the expenses and lost time on production, the outcome and experience is unmatched in revenue. Being in the direct line of everything we face and networking with educated and experienced colleagues from around the nation is priceless.

Key points and benefits on joining our trade association: n As of 2009, there are more than 7,800 associations, professional societies, and labor unions. n The mortgage industry conducts one of the most important financial transactions in a consumer’s life, but has one of the lowest rates of membership as it pertains to the number of licensed professionals. n One of the biggest advantages of continued on page 32

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True Partnership

By Sharon Bitz

“Partnership” is defined as, “An arrangement where parties agree to work together for mutual advantage.” In the residential brokered loan business, partnerships are essential since the work involved in producing the mutual product (a mortgage loan) is inherently split between brokering firms which originate, and lenders which process and underwrite.

What distinguishes the best partnerships and how can those firms which broker loans find those qualities in prospective lender partners?

There are six essential components of an effective partnership:

1. Sharing of values, entrepreneurial spirit and vision Partners must share core values, drive and expectations. When values such as honesty, integrity, professionalism and timeliness are not shared between partners, it is a strong indication that the relationship will not be successful. In the mortgage industry, the key value that must be shared is a common sense of customer service. The broker’s customer is the borrower and the lender’s client is the broker. If the lender fails to provide service that enhances the broker’s status with the borrower, then they have failed to provide their essential contribution to the relationship.

2. Complimentary skills and experience Partners cannot do the same jobs in a partnership or no advantage of working together would be gained. Complimentary skills and experiences make the best partners. In the mortgage industry, the division of labor between brokers and lenders necessitates that each party have differing yet complimentary skills. For example, a broker must have the ability to achieve and maintain the trust of customers, while lenders must deliver on that trust through efficient use of technology and processes to produce timely loan decisions and solid availability.

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3. Deliver resources As a broker, your banker partners need to offer resources such as unique technology, marketing assistance and competitive, well-priced products.

4. Practice ethical behavior Without exception, partners must share a commitment to ethical behavior. This means the same thing in all types of partnerships, whether in the mortgage industry or elsewhere. Each partner is responsible for “policing” themselves by establishing a culture in which unethical behavior is not tolerated and is eliminated without delay.

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5. Financially stable Nothing distracts from delivering good performance more than financial difficulties. Brokers and lenders must each be assured that their partners are financially stable and focused on the tasks at hand. We’ve all observed how our partners can behave under financial duress.

6. Respect Frankly, all successful and effective partnerships are built on mutual respect. The sign that a party has respect for their partner in any business—the mortgage business included—is that they put their partner’s needs and interests first. Does the broker put together complete loan files on a consistent basis? Does the lender respond to all requests and questions from the broker within a few hours at most?

True partnership is what will dictate a successful relationship. We must remain dedicated to accepting only the best from our partners and providing the best to our partners.

Sharon Bitz is the national head of wholesale lending for WCS Lending, one of the largest privately-held mortgage banks in the U.S. that has been recognized as an Inc. 5000 honoree for the fourth consecutive year. WCS, which is licensed in 49 states, has offices in Florida, New York, California, Michigan, Maryland, Delaware, Ohio and Hawaii and generates $2 billionplus in loans annually. She may be reached by phone at (916) 996-1620.

www.wcswholesale.com

SPONSORED EDITORIAL

Equity Loans LLC Celebrates Its Fifth Anniversary and Lands Fannie Mae SellerServicer Approval Equity Loans LLC has marked its fifth year in the mortgage lending business, and in honor of its fifth anniversary, Equity Loans will host a corporate luncheon to commemorate the milestone and to announce the company’s first Equity Five Star Award recipient. The Equity Five Star Award honors an employee who exemplifies the principles on which the company was founded, including quality, honesty and integrity. The recipient is an individual who has played a pivotal role in Equity Loans’ growth and continually strengthens relationships within departments, among investors and with other industry peers.

Founded at the height of the mortgage crisis in 2008, Equity Loans has grown to become one of the leading residential mortgage lenders in the U.S., operating 26 branch locations across more than 30 states. With a solid team of experienced professionals, Equity Loans continues to expand at a rapid rate, adding 17 new branch locations and 12 new hires in 2012 alone.

“Since we opened our doors during one of the most difficult times in the mortgage industry, we’re incredibly proud to be celebrating five years of successful business,” said Kunjan “KP” Patel, CEO of Equity Loans. “We’d like to attribute this accomplishment to the success of our employees, who are some of the most talented and hardworking individuals in the industry.

We’re looking forward to see what the future holds for Equity Loans.”

Equity Loans LLC has also announced that it has received approval as a seller/servicer of one- to four-family first lien mortgages to Fannie Mae for whole loan execution, further enhancing the lender’s product offering and benefits for borrowers. In securing Fannie Mae approval, Equity Loans’ financial condition, organization, staffing, experience and written processes and procedures were carefully vetted and tested by Fannie Mae. As a result, Equity Loans is now approved to sell mortgages for delivery to the government-sponsored enterprise (GSE).

Equity Loans adds its Fannie Mae

approval to its existing industry certifications and memberships, including: Better Business Bureau Accreditation; Community Mortgage Lenders of America; Lenders One; Mortgage Bankers Association; and the National Reverse Mortgage Lenders Association.

“Equity Loans has one of the most diverse portfolios of loan products in the residential mortgage industry, and the ability to sell whole loans to Fannie Mae gives us a greater opportunity to help even more borrowers achieve their dreams of homeownership,” said Patel.

“We’re looking forward to a successful and long-standing relationship with Fannie Mae.”

LCG Forges Partnership With The Law Offices of Joyce Wilkins Pollison Lenders Compliance Group Inc. (LCG) and The Law Offices of Joyce Wilkins Pollison Esq. have announced a strategic alliance to offer mortgage risk management guidance to the mortgage industry. Together the two firms will build on existing tools, processes, risk assessments, and resources to provide a “best practices” approach to residential mortgage compliance. LCG and Pollison both offer regulatory guidance to members of the real estate and banking industries. LCG provides a suite of services for all areas of mortgage banking, such as loan audit analytics, research, regulatory compliance guidance, loan origination channel and product development, mortgage quality control (QC), and due diligence reviews.

Joyce Wilkins Pollison has accepted the position of director of legal and regulatory compliance at Lenders Compliance Group and in that capacity she will work with the firm’s clients on their residential mortgage compliance needs.

“We are especially pleased to welcome Joyce to our firm,” said Foxx, LCG’s president and managing director.

“Her background, experience, and diverse knowledge offer our clients a unique opportunity to satisfy their mortgage compliance needs at the highest professional level. For 15 years, Joyce Pollison has counseled clients on applicable federal and state industry laws and regulations, with respect to mortgage acts and practices. Indeed,

she has particular expertise in identifying risks as well as developing, reviewing and editing procedures and policies to assure regulatory compliance.�

Pollison will join LCG’s other directors, specialists, subject matter experts and mortgage consultants in providing hands-on mortgage compliance support to the firm’s clientele, including single and multi-platform lenders, investors, servicers, mortgage brokers and banks.

First Nations Home Finance to Utilize Regulatory Guidance From AllRegs First Nations Home Finance Corporation has announced that AllRegs will publish its lending library of internal policies and procedures. First Nations Home Finance will now leverage the AllRegs technology platform and publishing expertise to manage and maintain its policy and procedures manuals. Users will benefit from a variety of productivity tools, including an electronic Table of Contents tree with links to a supporting matrix and a variety of policy manuals.

Content is also accessible through a robust search engine that features a thesaurus with industry jargon and relative matching results. “We at AllRegs are very excited to help First Nations Home Finance Corp. provide their staff with an innovative and robust resource that allows them to search the company’s policies and procedures,� said Dan Thoms, executive vice president of AllRegs. “First Nations Home Finance Corp’s online policy manuals will help staff streamline business processes and increase productivity.�

Tommy A. Duncan, COO of QMiS Systems. “We take pride that a U.S.owned offshore company is offering support back to U.S. companies.

Being that we are U.S. owned, we understand the concerns of many of the U.S. companies.�

QMiS is committed to providing its clients with the confidence required to maintain a strong business relationship. Given the scope of the work and the volume of business that many firms use to assess their processes and technology needs, firms develop the means to rate efficiencies and quality “But once that is done, there has to be a way to deliver performance and that’s why we developed the QMiS Systems for tech-

nology and processes outsourcing,� said Duncan. “Our goal is to ensure companies are successful and able to adapt to new creative business models while retaining the best technical performers and secure infrastructure in an intuitive fashion.�

Global DMS and MortgageFlex Unite Platforms Global DMS has announced that its eTrac Enterprise platform has been integrated with MortgageFlex’s loan origination system (LOS), LoanQuest. The integration is bidirectional and completely streamlines

data exchange and facilitates ease of communication between the two platforms.

The new integration works by providing lenders with the ability to easily order and manage appraisals, check real-time status, and receive completed appraisal files back into MortgageFlex’s LoanQuest LOS. The file is then automatically submitted to the Uniform Collateral Data Portal (UCDP) in full compliance and without errors or missing information. A detailed report is provided complete with audit tracking functionality giving lenders visibility and control over the entire appraisal process. continued on page 10

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Quality Mortgage Services LLC has announced the opening of QMiS Systems, a provider of Knowledge Processing Outsourcing (KPO) and Business Processing Outsourcing (BPO) designed to serve the financial services and banking industries. QMiS is a U.S.-owned foreign subsidiary incorporated in Kochi, India with the ability to support clients in outsourcing of technology and human capital business processes. QMiS Systems provides technology support in appraisal management software, as well as appraisal movement within platforms allowing the clients to work directly with underwriters and appraisers from the front office.

QMiS Systems provides process solutions as well as technology project management. “More companies are finding that lesser functions critical to client’s operations are better outsourced so that professionals can better utilize their time while reducing costs. This is very timely as the mortgage and banking industries begin to shift and prepare for reduced production volumes,� said

The Enforcement Powers of the Consumer Financial Protection Bureau

By Jonathan Foxx

8

For several months, the Consumer Financial Protection Bureau (CFPB or “Bureau”) has implemented a spate of enforcement actions against banks and non-banks.

My interest in this article is neither to re-litigate those cases nor single out any particular financial institution for further scrutiny. Sometimes we must learn our lessons at somebody else’s expense, rather than to castigate another for unseemly conduct. None of us, however, is absolved of the responsibilities, the violations of which could lead to enforcement actions against us or the financial institution where we are employed.

It is important, therefore, to have some sense of what is meant by the term “enforcement,” especially with respect to the CFPB’s authorities. The CFPB received a host of enumerated laws and related authorities on July 21, 20111, and, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), a concomitant set of defined rules were established2 that gave the Bureau numerous enforcement powers, including the powers to conduct investigations and implement enforcement actions to enforce federal consumer financial law.3 For instance, Section 1052 of the Dodd-Frank Act authorizes the CFPB to engage in joint, interagency investigations and requests for information, including matters relating to fair lending. Though the statute specifically provides that, “where appropriate,” the Bureau may conduct “joint investigations” with the Secretary of Housing and Urban Development, the Attorney General of the United States, or both, it also sets forth lengthy provisions governing subpoena powers and civil investigative demands.

Hearings and adjudications On Nov. 7, 2011, the Bureau issued CFPB Bulletin 2011-04 (entitled “Enforcement”),4 the first in a series of bulletins relating to policies and priorities of the Bureau’s Office of Enforcement. The Bulletin announced that before the CFPB commences an enforcement proceeding, it may (or may not) give the subject of the proceeding notice of the nature of the potential violations and may (or may not) offer the subject the opportunity to submit a written statement in response.

The Bulletin also gave specific instructions regarding the submission requirements of the written statement, such as the paper size, spacing, font size, and length, while also mandating that the response had to be received by the CFPB by no more than 14 calendar days after the notice.5 Almost a year after the CFPB received its authorities, it adopted rules, on June 29, 2012, regarding the procedures it expected to follow when investigating whether a “person” (a legal term for an individual or entity) is or has been engaged in conduct that would constitute a violation of any provision of federal consumer financial law.6 Indeed, Dodd-Frank authorizes7 the Bureau to conduct hearings and adjudication proceedings to ensure or enforce compliance with the following applicable items: n Title X, which established the Consumer Financial Protection Bureau as an independent agency within the Board of Governors of the Federal Reserve System, including any rules prescribed by the CFPB under Title X; and n “ … any other Federal law that the Bureau is authorized to enforce, including an enumerated consumer law, and any regulations or order prescribed thereunder, unless such Federal law specifically limits the Bureau from conducting a hearing or adjudication proceeding and only to the extent of such limitation.”

Furthermore, Section 1053 of DoddFrank sets forth the rules for Cease-andDesist proceedings and enforcement orders.

Statutorily, Dodd-Frank authorizes the CFPB to apply to the United States district court within the jurisdiction of which the principal office or place of business of the person is located, for the purposes of enforcing any effective bulletin or notice, outstanding notice, or order.

Thus it was that, soon after the Bureau announced its rules for investigating violations, in July 2012 the CFPB announced its first enforcement action.

That action consisted of a consent order in which Capital One agreed to refund $140 million to two million customers and pay a $25 million penalty. The enforcement was the consequence of alleged deceptive marketing tactics used by Capital One’s vendors to coax consumers into paying for add-on products when they activated their credit cards.8 Dodd-Frank authorizes the CFPB to commence a civil action against any

person who violates a federal consumer financial law and to impose a civil penalty or to seek all appropriate legal and equitable relief including a permanent or temporary injunction.

When commencing a civil action, the Bureau must notify the Attorney General and, with respect to a civil action against an insured depository institution or insured credit union, the appropriate prudential regulator.

Except as otherwise permitted by law or equity, no action may be brought under Title X more than three years after the date of discovery of the violation.

Indeed, the CFPB published an interim rule regarding its awarding of attorney fees and other litigation expenses in certain situations, as required by the Equal Access to Justice Act.9

Scope of legal remedies The CFPB has extensive authorities to not only investigate violations of federal consumer protection laws but also implement broad enforcement relief.

Consider this list, which I do not assert to be comprehensive. These legal remedies are held to be “without limitation:” n Rescission or reformation of contracts n Refund of money n Disgorgement and refund of various types of assets n Return of real property n Restitution n Disgorgement or compensation for unjust enrichment n Payment of damages or other monetary relief n Public notification regarding the violation (including the costs of notification) n Limits on the activities or functions of the person n Civil monetary penalties Indeed, Dodd-Frank authorizes the court in a court action, or the CFPB in an administrative proceeding, to grant “any appropriate legal or equitable relief with respect to a violation of federal consumer financial law, including a violation of a rule or order prescribed under a federal consumer financial law.”10 The relevant statute provides that there may not be an imposition of exemplary or punitive damages; however, in an action to enforce any federal consumer financial law, the CFPB, the states Attorneys General, or state regulators may recover their costs, if they prevail.

Notwithstanding the foregoing exclusion of exemplary or punitive damages,

for any violation of a law, rule, or final order, or condition imposed in writing by the CFPB, a civil penalty may not exceed $5,000 for each day during which the violation or failure to pay continues. However, take note: that penalty amount jumps to $25,000 for each day for any person that recklessly engages in a violation of a federal consumer financial law, and to $1 million for each day for any person that knowingly violates a federal consumer financial law.

And if the CFPB obtains evidence that any person has engaged in conduct that may constitute a violation of federal criminal law, the Bureau will immediately refer the case to the Attorney General of the United States.

Blowing the whistle on violations The Bureau has distinguished whistleblower information from consumer complaints. Section 1057 of DoddFrank protects certain employees from retaliation who submit information about their employers’ potential violations of the consumer financial protection laws now enforced by the CFPB. On December 15, 2011, the CFPB issued Bulletin 2011-05 (Enforcement and Fair Lending) to solicit information about potential violations of federal consumer financial laws.11 The Bulletin notes that Dodd-Frank § 1057 protects certain employees and their representatives who provide information against retaliation by their employers.12 Dodd-Frank provides broad whistleblower protections to employees of covered persons and their subsidiaries (viz., “covered persons” being defined in Sections 1024, 1025, and 1026 of Dodd-Frank).

A covered person or service provider is defined in the foregoing sections as: Being one that: n Offers or provides origination, brokerage, or servicing of loans secured by real estate for use by consumers primarily for personal, family, or household purposes, or loan modification or foreclosure relief services in connection with such loans; n Is a larger participant of a market for other consumer financial products or services, as defined by the applicable section of Dodd-Frank; n The Bureau has reasonable cause to determine, by order, after notice to the covered person and a reasonable opportunity for such covered person to respond, based on comcontinued on page 32

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v APRIL 2013

Using Engagement-Based Professional Services to Meet Your Business Needs

By Dan Thoms

The mortgage industry today is in the midst of significant change. Between investor and agency requirements, and the ongoing changes in regulatory compliance requirements, the need for clear and current documentation has never been greater. In today’s fast-paced, change-centric environment, finding the time, attention, and most importantly, resources, to complete large scale authorship initiatives is a challenge in and of itself.

To that end, AllRegs has launched engagement-based professional services to meet the documentation needs of mortgage lenders and the various departments within their organizations, including mortgage compliance, mortgage underwriting, mortgage servicing and more.

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While doing custom documentation for many large scale clients, we found that many companies need continued updates to projects as industry changes are made. For example, a company looking for a Credit Policy Manual or Seller’s Guide may also benefit from scheduled quarterly updates. Engagement-based services offer the ease of continuing updates and changes without the need for additional contracts or sales meetings. You let us know how else we can support your documentation goals, and our writing team gets back to work without a loss in momentum.

From policies and procedural guidance, to full service lending guides (wholesale, retail, correspondent, etc.) mortgage lenders can rely on our team of experts to create a custom documentation solution, with the ability to scale up or down as the needs changes. Some benefits of these engagement-based services include: n Leverage AllRegs 20+ years of industry experience and understanding of regulatory compliance and industry best practices for a fraction of the price of a full-time staff writer n Create full-scale documentation for your organization that can easily be published in a variety of formats, including AllRegs Publishing Services n Expand project scope easily using the engagement-based project model n Create the custom solutions you need, based on the available suite of services n Engagement Reports issued regularly to keep you informed on the time/resources expended on your project, with no budgetary surprises n Project management and communication supported by AllRegs, with insight into how comparable companies are approaching similar challenges n Consultative guidance resulting in stronger practices and improved efficiencies For a personal consultation on your engagement needs, call your dedicated account executive at (800) 848-4904. Or, get more information about AllRegs and the full suite of products and services by visiting www.allregs.com today.

heard on the street

continued from page 7

VirPack Partners With IDS VirPack and IDS Inc. are teaming to provide lenders piece of mind relating to critical initial loan disclosures. The expanded relationship involves eDisclosure integration with IDS’ flagship document prep solution idsDoc, offering multiple benefits, including the automation of the document indexing process and the secure transmission of the package to VirPack’s document management platform, Enterprise Center.

“The expansion of our relationship with IDS from closing docs to now include eDisclosures provides lenders even greater efficiencies. The eSigned initial disclosure package will be securely and automatically imported into the designated loan in Enterprise Center, automating the indexing process and ensuring compliance,” said Wayland T. Pond IV, VirPack vice president, sales and marketing.

Importantly, eDisclosure ensures the initial disclosure package is handled in a fast, secure, accurate and compliant manner. eDisclosure will get state and investor specific disclosures delivered in a way that best fits the lender’s business model.

New Broker Network Announced by RealtyTrac RealtyTrac has announced the launch of the RealtyTrac Network (RTN), a licensed network available to leading independent and franchised brokerage companies across the nation. Through RTN, RealtyTrac will extend its considerable brand awareness, media presence, real estate content, real estate data, varied sources of consumer leads, and advertising resources to brokerages, helping them build an exclusive and sustainable competitive advantage in their local markets.

“We’re excited to see our proven national brand—backed by unparalleled real estate data, content and more than 15 years of online marketing experience— take root at the local level through these exclusive brokerage relationships,” said RealtyTrac CEO Jamie Moyle. “Supported by the powerful resources of RealtyTrac, these brokerages and their agents will be poised for strong growth for the long term while providing RealtyTrac valuable neighborhood and hyper-local market expertise that will enrich our comprehensive data and content.”

Wingspan Acquires Chase’s Florida Mortgage Servicing Operation

Sponsored Editorial

Wingspan Portfolio Advisors has entered into an agreement with JPMorgan Chase to acquire its mortgage

servicing operation in Melbourne, Fla. Wingspan Executive Vice President, Servicing Operations Jason Spooner will be in charge of this site, which is based on the East Coast of Florida.

“This is big news for us and we see it as indicative of where our industry is headed,” said Wingspan CEO and President Steven Horne. “We are now fully equipped to meet the needs of clients as they downsize the scale of their default servicing operations.”

As part of the agreement, Wingspan will offer positions to more than 400 Chase employees and has acquired the lease of the Melbourne office building. The acquisition brings Wingspan to almost 2,000 employees in four locations in Texas and Florida, with approximately 420,000 square feet of office space. Wingspan will now assume all operations on-site and provide services to Chase, as well as to others seeking support.

“These associates in Florida are recognized for their deep experience in servicing,” said Spooner. “The addition of this team and its capabilities provides Wingspan a true strategic advantage in the marketplace.”

Carrington Technology Solutions and Equator Partner on New Software App Carrington Technology Solutions LLC and Equator Business Solutions have announced a partnership to provide financial institutions, institutional investors and large-scale property management companies with a scalable, end-to-end, single-family asset management suite dedicated to efficiently maximizing the performance of multiple-property portfolios.

Through an exclusive agreement, RentPointe, Carrington’s proprietary software application specifically designed to meet the complexities of managing diverse portfolios of singlefamily rental properties, is being integrated into Equator’s EQ Investor Platform.

Equator’s EQ Investor Platform provides due diligence, acquisition, asset transfer, REO rental and REO disposition through its virtual Equator Marketplace to agents, vendors, tenants and investors via various marketspecific portals.

Integrating RentPointe within this platform provides multiple user-specific benefits, including a higher, more efficient workflow, access to Equator and Carrington data for net present value modeling, full transparency and audit compliance, in addition to providing an electronic marketplace for realtime management of vendor orders. continued on page 40

11

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This information is provided for the use of mortgage professionals only and is not intended for distribution to consumers or other third parties. Product information is subject to change without notice. HomeBridge is a division of Real Estate Mortgage Network, Inc. NMLS #6521. HomeBridge is licensed or operating with a license exemption under the name Real Estate Mortgage Network, Inc. d/b/a HomeBridge except in the following states; AK, IL, MD, MN, NY, RI, VA “Real Estate Mortgage Network, Inc.”; VT: “Real Estate Mortgage Network, Inc. d/b/a HomeBridge Funding” © Real Estate Mortgage Network, Inc. d/b/a HomeBridge. All rights reserved.

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is a national wholesale lender offering both conventional and government products. We are committed to providing the highest value to our clients through competitive pricing, unique product offerings, superior customer service, and state-of-the-art technology.

Part II: Postal Service to Stop Delivering Mail on Saturdays: No Impact on Timing of Disclosures, Rescission Period APRIL 2013

By Melanie A. Feliciano Esq.

The waiting periods for early disclosures and corrected disclosures; rescission period With respect to the waiting period for the early disclosures (Truth-in-Lending [TILA] Statement), Regulation Z § 1026.19(a)(2)(i) provides that the creditor must deliver or place them in the mail not later than the seventh business day before consummation of the transaction. And, Section 1026.19(a)(2)(ii) provides that if the annual percentage rate (APR) becomes inaccurate, as defined in Regulation Z § 1026.22, the consumer must receive the corrected TILA Statement reflecting the changed terms no later than three business days before consummation. If the corrected disclosures are mailed to the consumer or delivered to the consumer by means other than personal delivery, the consumer is deemed to have received the corrected disclosures three business days after they are mailed or delivered.

With respect to the rescission period, Regulation Z § 1026.23(a)(3)(i) provides: The consumer may exercise the right to rescind until midnight of the third business day following consummation, delivery of the notice required by Section 1026.23(b), or delivery of all material disclosures, whichever occurs last. If the required notice or material disclosures are not delivered, the right to rescind shall expire three years after consummation, upon transfer of all of the consumer's interest in the property, or upon sale of the property, whichever occurs first. In the case of certain administrative proceedings, the rescission period shall be extended in accordance with section 125(f) of the Act. 12

v NationalMortgageProfessional.com

Accordingly, Saturdays are to be counted in the rescission period and the waiting periods for the early and corrected disclosures unless a legal holiday falls on a Saturday. Additionally, if New Year's Day, Independence Day, Veterans Day, and Christmas Day fall on a Saturday, but these holidays are observed on a day other than Saturday or Sunday, then the day on which the holiday is observed shall be considered a business day.

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The Official Staff Interpretations for Section 1026.2(a)(6) provides clarification that: Four Federal legal holidays are identified in 5 U.S.C. 6103(a) by a specific date: New Year's Day, January 1; Independence Day, July 4; Veterans Day, November 11; and Christmas Day, December 25. When one of these holidays (July 4, for example) falls on a Saturday, Federal offices and other entities might observe the holiday on the preceding Friday (July 3). In cases where the more precise rule applies, the observed holiday (in the example, July 3) is a business day.

OHIO MORTGAGE PROFESSIONAL MAGAZINE

For purposes of the rescission period and waiting periods for the early and corrected disclosures, Regulation Z § 1026.2(a)(6) provides that a “business day” includes all calendar days, except Sundays and legal public holidays: “Business day” means a day on which the creditor's offices are open to the public for carrying on substantially all of its business functions. However, for purposes of rescission under §§ 1026.15 and 1026.23, and for purposes of §§ 1026.19(a)(1)(ii), 1026.19(a)(2), 1026.31, and 1026.46(d)(4), the term means all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a), such as New Year's Day, the Birthday of Martin Luther King, Jr., Washington's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day.

Melanie A. Feliciano Esq. is DocMagic Inc.’s chief legal officer and currently serves as editor-in-chief of DocMagic’s electronic compliance newsletter, The Compliance Wizard. She received her JD from the Georgetown University Law Center, and is licensed in California and Texas. She may be reached by phone at (800) 649-1362 or e-mail melanie@docmagic.com.

Sponsored Editorial

Senators Take Aim at GSE Reform

U.S. Sens. Bob Corker (R-TN), Mark Warner (D-VA), David Vitter (R-LA) and Elizabeth Warren (D-MA), all members of the Senate Banking, Housing and Urban Affairs committee, in an effort to spur housing finance reform nationwide, have jointly introduced the “Jumpstart GSE Reform Act.” The Act would prohibit any increase in the guarantee fee–which is required to be charged by government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac–from offsetting other government spending. Additionally, the bill would prohibit the sale of preferred shares without congressional approval and structural housing finance reform. The preferred shares were purchased by the U.S. Treasury Department during the 2008 financial crisis and are within Treasury’s discretion to sell or otherwise dispose of.

Any premature actions outside of structural reform will only build obstacles to a new housing finance system.

“The reality is that if Congress were to spend ‘G-Fee’ revenue from the GSEs on other programs, reforming these mortgage behemoths would become nearly impossible,” said Sen. Corker. “At the same time, if Treasury were to decide to sell its preferred share investment without Congress having first reformed our housing sector, we would just be returning to a time where gains are for private shareholders and losses are for taxpayers. Neither of these is an acceptable outcome, so I’m very happy that Senators Warner, Vitter and Warren have joined me in this effort, and I hope Congress will take the necessary steps to ensure housing finance reform can happen as soon as possible.”

David H. Stevens, president and CEO of the Mortgage Bankers Association (MBA), said, “It is imperative that Congress as well as the White House and key members of the housing community come together to create a comprehensive, transparent process that properly addresses the concerns and objectives of all affected stakeholders

involved with GSE reform. Without this all inclusive, broad approach, uncertainty will continue and the housing market will be unable to fully rebound.”

“It has been nearly five years since the financial crisis, and it is past time to reform Fannie and Freddie,” said Sen. Warren. “That means removing the obstacles and starting a bipartisan effort to take on housing finance reform this Congress. I am pleased to have the opportunity to work with Senators Corker, Warner, and Vitter, and I look forward to collaborating with them and other Senators in the months ahead on this important issue.”

Equity Loans to Provide Homeownership Tips on Lifetime Television

Reality television program Designing Spaces welcomed Equity Loans LLC to the show, as the company will make an appearance as part of an upcoming “Arming Yourself With Home Loan Knowledge, Tips for Successful Ownership” segment. A representative from Equity Loans will educate viewers on the process of buying a house, the importance of staying within their budget and price range when choosing their home, as well as what questions to ask their loan expert when looking for a house. The representative will also cover percentages down and the important points to remember when a homeowner is looking to refinance their house.

“We are very excited to welcome Equity Loans to our show. We’re looking forward to giving our viewers the tools and great information on how to navigate the home-buying process,” said Lysa Liemer, Designing Spaces on Lifetime executive VP of programming and chief operating officer.

Nine AGs Demand FHFA St ability in Letter to Congress New York Attorney General Eric T. Schneiderman has joined Massachusetts Attorney General Martha Coakley in leading a nine-state coalition demanding new, continued on page 16

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Make sure you’re in compliance with LQI and protected from buybacks. Regulations are going to get tougher tougher.. The GSE GSEs are working g on additional suggestions to make sure your loan is sell-ready in 2013. Can you afford not to use Undisclosed Debt Monitoring? ss -OONITORS BORROWER S CREDIT ACTIVITY BETWEEN THE ORIGINAL CREDIT lLE NITORS BORROWER S CREDIT ACTIVITY BETWEEN THE ORIGINAL CREDIT lLE pull and the loan closing

ss 0RROTECTS AGAINST BUYBACK OR REPURCHASE LOSSES THROUGH OTECTS AGAINST BUYBACK OR REPURCHASE LOSSES THROUGH insurance program backed by A-rated carriers and offered THROUGH !RTHUR * 'ALLAGHER 2ISK -ANAGEMENT 3ERVICES )NC THROUGH !RTHUR * 'ALLAGHER 2ISK -ANAGEMENT 3ERVICES )NC

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Three Origination Strategies to Deploy Now With origination estimates down for 2013, you should do all you can to win more business

By Don Kracl

APRIL 2013 v

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M

ost of the regular mortgage loan volume prognosticators have by now weighed in on the question of where our overall industry volume will be for the year ahead. Most are in the neighborhood of the Mortgage Bankers Association’s estimate, which puts 2013’s overall mortgage loan volume at about $1 trillion.

This is not a huge change from 2012, which now looks like it will come in at about the $1 trillion mark when all the chips are finally counted. But there is a change hidden in these estimates and it’s the kind that will catch many lenders off guard. The change has to do with the type of loans that will make up the final volume number.

My company’s mortgage product and pricing search engine is hit many thousands of times each day and the data that ultimately flows through our systems lets us know what product types are most popular with consumers at any given time. For that past few months, we have been observing a trend that shows more consumers reaching out for information about purchase money transactions and fewer borrowers coming back to their lenders for refinance loans.

The trendline is clear. We’re not the only industry participants to identify it and yet so many of the lenders we work with today don’t seem to be making changes in their businesses that will allow them to deal effectively with the new environment.

Originating purchase money loans is quite different from refinance business. There are often more steps to the process and more underwriting that must be performed. Quality control (QC) is required for any type of origination, but investors may require more diligence for new loans than for refinance business. Some industry consultants have claimed that originating purchase money loans actually costs lenders more money per closed loan. I doubt that’s true for lenders who have streamlined their processes with purchase money loans in mind.

Unfortunately, that’s not what we’re seeing in the market today.

We’re still seeing lenders rewarding loan officers for the type of behavior that results in attracting more refi business. These behaviors will not serve lenders well when the refinance business is eclipsed by purchase money transactions.

Attracting new purchase money business is definitely more challenging than refinance business. When a borrower refinances, it’s because they have a driving desire to get a better deal on their mortgage, or to take equity out of the deal for something they need or want. This is quite different from the homebuyer who must apply for a loan to transact the purchase. The homebuyer needs the loan and sees it as a necessary evil, while the refinance borrower wants the loan and sees it quite differently.

This fact, more than anything else, turned an entire generation of mortgage loan officers into order takers, most of whom lost their jobs and went

to other industries just after the financial crash.

So what can lenders and loan officers do now to prepare for this coming change and attract more business in the meantime? We’ve come up with three tactics you can begin using today that will accomplish these goals. But first, we have to explore a whole new mindset.

nificantly more results than waiting by the telephone for it to be rung by refinance buyers who never call.

If you make the commitment to becoming a purchase money lender, for at least a portion of your business, you are ready to put the following tactics into use.

Get back to the future

Tactic number one: Build and support a network of business connections

Sometimes, moving ahead means going back into the past. In the case of the popular 1980s movie series, Marty McFly was sent back in time and couldn’t return until he had fixed the mistakes he had made in the timeline.

Some lenders surely wished they had a time machine after the crash. The best we can do is to mentally go back in time and remember the techniques that made us successful lenders in the past.

In this case, going back to a time when lenders expected their business to come from people financing a new home and building out their businesses accordingly is essential if we want to respond appropriately to the future.

There was a time, perhaps before many of you readers entered this business, when purchase money loans was the primary type of business and lenders just expected to have to work harder for their new business.

Before these tactics will yield all of the benefits we know they can, the lender and loan officer must be willing to go back to that previous time, at least mentally, and accept the fact that this game is different, will undoubtedly take more work and will require more time.

On the other hand, it will soon yield sig-

Manufacturing a mortgage loan is a complicated process and it involves many partners. Like making a Hollywood feature film, many specialties are called upon to get the deal from pre-application all the way to close. In the past, close alliances were formed between the lender and the settlement services companies that provided some of the services. This worked great for a long time, with local Building & Loans working with area appraisers, title agents, attorneys and others to get loans closed.

Some companies took it too far and the Real Estate Settlement Procedures Act (RESPA) was enacted to ensure that borrowers had the power to get their best deals. RESPA rules are critically important today and the cost of noncompliance can be devastating to a company. Still, there are many, many ways to work with other businesses in your local community in order to jointly serve consumers.

Real estate agents are the most often cited as potential business partners for lenders and with good reason. These professionals are often the first to know when a buyer is in the market for a new home. They also depend upon their

clients finding financing to make sure their deals get closed and they get paid.

But there are plenty of other business professionals that can send their clients in need of home financing to whatever lender they choose. Going back to the days when lenders actively work to build up these relationships is what will be required to be a top originator when the refi business goes away.

The most important consideration when deploying this tactic is to make it easy for business partners to refer business to you. Every lender would love to have the other business people in the community send them leads, but few have thought through the process and made it easy for their referral partners to do so.

Tactic number two: Tap into your database of past customers

Tactic number three: Increase your conversion rate Regardless of what kind of business you’re going after, you’re going to be more successful if you can convert more leads to applications and more applications to closed loans. Lenders should be carefully tracking their conversion rates across their enterprises in an effort to drive down their cost per closed loan.

Here are some easy ways to drive up conversion.

First, do more, faster. The further down the path toward the close you can get the borrower, the less likely they’ll

leave you for another option, so get as much done on the file upfront as you possibly can. We know that if you can get a new loan applicant to let you pull a credit file, they have a reason to stay engaged with your mortgage company and are less likely to leave. If you can also order the appraisal, the chances that the borrower will go to another lender falls to the floor. Don’t let hot leads simmer. Do something with them as soon as possible.

Second, open up your lines of communication, wide open! This is for your borrower but also the partners you’re working with to close the transaction.

It’s not that hard to keep all of the parties to a transaction up to date and on the same page, especially with the tech-

nology we have at our disposal today.

But not enough lenders are doing it.

Better communication leads to shorter times to close and a better borrower experience. Find a way to do it.

Third, don’t waste time on applications that cannot close. Use the best product & pricing engine you can find and pre-qualify the borrower as soon as you possibly can. It makes no sense wasting resources on a deal that can never close, so move those that can’t into a drip marketing or other lead nurturing campaign as soon as you’re sure they won’t qualify. We call it separating the app from the crap, but highly recommend that you maintain contact continued on page 38

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The mortgage market is hot, and we’re kicking off the summer with the biggest gathering of mortgage origination pros so far this year!

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Why should you be an Ultimate Exhibitor or Sponsor? n Innovative and effective techniques to drive crowds of top mortgage originators to the show, and to you. Invite all your customers and prospects to attend the entire conference for free — a $295 value. n We’re giving all paid attendees a chance to get all of their required 8 hours of continuing education for free. n Speaking opportunities available to select sponsors. n We’re expecting 700-1,000 attendees n We drive traffic into the Exhibit Hall constantly, where all meals and beverages are served. We give away a 42-inch HDTV at every break! And we’re hosting two cocktail receptions for added networking! n We offer affordable exhibiting and sponsorship opportunities.

This is not just a great conference for attendees, but an exciting and profitable one for our vendors as well.

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In a refinance-focused world, we rewrite the loans as fast as they come in and move on to the next. If we look back at our database of borrowers at all, it’s to try to figure out who might be interested in a refinance next. Because there are many factors involved in the consumer’s process of returning to a new loan, this can be tricky to predict and so too many loan officers just go back to watching the phone.

The database of satisfied customers is a very powerful tool and lenders need to reacquaint themselves with it.

Of course, this presupposes that the lender has actually satisfied these customers in the past, but with federal regulators focusing more attention on the borrower’s experience, we expect more lenders to have more satisfied borrowers in their databases today than they may have had in the past.

One of the best uses of the database is another blast from the past called customer referrals. Back when I was originating loans instead of developing Point of Sale technology, I made good use of our database and always asked for referrals. I did it because I was taught to do it. It’s not difficult to call up a past customer, ask them how they’re doing and ask them if they know anyone who is looking for home financing. It’s a skill that can save lenders a lot of money.

Consider for a moment that Internet leads generally cost the lender about $1,000 per closed loan, when everything is taken into consideration. That’s a big number. A good loan officer can get a lot of referrals for that amount of money, just by asking people the lender already knows.

Seeking out referral business can be particularly important to smaller institutions. We’re seeing some strong evidence that the larger lenders are being favored by some online lead providers.

This is understandable as these companies need the prestige that comes from offering programs from the nation’s largest lenders if they hope to attract enough consumers online. But the result is that it can be harder for smaller lenders to get enough qualified leads

through these channels. Don’t get mad; get asking for referrals.

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permanent leadership at the Federal Housing and Finance Agency (FHFA), the agency that oversees the governmentsponsored enterprises (GSEs), Fannie Mae and Freddie Mac. In a letter to the President and Congressional leaders, the attorneys general write that under the current leadership of the FHFA’s Acting Director Edward DeMarco, Fannie Mae and Freddie Mac have been a “direct impediment to our economic recovery� by the continued refusal to give principal relief for struggling homeowners, and call for a new permanent leader to replace DeMarco, an appointee of former President George W. Bush. Also joining Schneiderman and Coakley in signing the letter were Kamala D. Harris, California Attorney General; Joseph R. “Beau� Biden III, Delaware Attorney General; Lisa Madigan, Illinois Attorney General; Douglas F. Gansler, Maryland Attorney General; Catherine Cortez Masto, Nevada Attorney General; Ellen Rosenblum, Oregon Attorney General; and Bob Ferguson, Washington Attorney General. “The FHFA’s refusal to allow for principal write-downs that would result in more loan modifications is a direct impediment to our economic recovery and stands in way of our efforts to provide much needed assistance to homeowners in New York and across the country,� said Attorney General Schneiderman. “Under the leadership of Acting FHFA Director Edward DeMarco, Fannie Mae and Freddie Mac remain an obstacle to progress by refusing to adopt policies that will help maximize relief for struggling homeowners.

The time has come for the President and Congress to work together to install a new, permanent leader at FHFA that will be a partner, not an impediment, in the national effort to comprehensively address the foreclosure crisis.�

In the letter, the AGs argue that principal write-downs are a central component of the national settlement, and continue to bring meaningful relief to distressed borrowers, spurring our nation’s economic recovery. Principal reduction is a form of loan forgiveness that would help “underwater� borrowers whose mortgages are worth more than their homes.

In general, all loan modifications rely on a net-present value (NPV) analysis that serves the dual purposes of helping borrowers keep their homes and meeting the economic interests of lenders and investors. The positive impact of mortgage modifications which often include principal writedowns continues to be felt on the housing market, economy, and our local communities.

The FHFA’s continued position that principal forgiveness conflicts with its goal of asset preservation is “not supported by reality,� the attorneys general

assert in the letter. The agency’s current policy actually reduces the value of its holdings portfolio. It is far more profitable for any financial institution to hold a portfolio of performing $200,000 mortgages that lets families keep their homes than a portfolio of non-performing $250,000 mortgages headed toward default. “We have worked tirelessly, along with our federal, state, and local partners to develop a multi-pronged approach to dealing with the foreclosure crisis,� the letter concludes. “Fannie Mae and Freddie Mac should be among our partners in this effort, and leaders in the arena of loan modification best practices. Instead, they have been an obstruction.�

Multi-State Mortgage Committee Reports on 2012’s Accomplishments

The Multi-State Mortgage Committee (MMC) has released its 2012 annual report highlighting accomplishments of the Committee in 2012. The MMC spent a considerable amount of time in the mortgage servicing area during 2012.

Those efforts helped contribute to the successful culmination of the historic $25 billion Nationwide Mortgage Servicing Settlement with the five largest mortgage servicers. Through a partnership with state attorneys general, the settlement will help many homeowners remain in their homes and avoid foreclosure through loan modifications.

Other initiatives achieved by the MMC noted in the 2012 annual report include: n The creation of a collaborative Web site for examinations; n Refining the Limited Scope Electronic Examination platform; n The development of an anti-money laundering examination module; n Completion of SAFE Examination Guidelines; n Establishing MMC operating procedures; and n Formalizing the MMC Information Sharing Protocol with the Consumer Financial Protection Bureau (CFPB). “The efforts of the MMC over the past year have greatly enhanced and refined our coordinated supervisory efforts over large, multi-state mortgage lenders and servicers,� said Cynthia Begin, president of the American Association of Residential Mortgage Regulators (AARMR) and Chief Risk Officer at the Massachusetts Division of Banks. “Through the increased use of technology and the successful developcontinued on page 18

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nmp news flash

Bonded With NAMB

It’s Not Personal ...

It’s Just Business

By Mason Grashot, CPA

Why does the bond carrier underwrite me personally when my bond covers my company?

Because the majority of licensed businesses are closely-held, meaning they are each owned by either one individual or a very small group of individuals who are often intricately involved in the business itself, it is usually quite difficult to disassociate the financial success and stability (or struggles) of the business from that of its owner-operator(s).

How does my personal credit affect the ability of my company to be bonded?

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If there are problems in the owner’s personal life (such as an overextended lifestyle reflected in too much debt, health challenges reflected in unpaid medical bills, lack of attention reflected in late payments to creditors, etc.) that reach the point where they impact his or her personal credit condition, that scenario can be a leading indicator of increased pressure on the business to provide the financial support for the owner’s personal problems in spite of whether it is in the best interest of the business itself to do so. It can also provide a perspective as to the owner’s personal financial responsibility with the correlation that how he or she manages the financial affairs of the household is often indicative of the approach or tolerance applied to the business.

Conversely (and retrospectively), problems in the business can have an indirect effect on the owner’s personal credit in situations where the owner increases personal debt or reduces personal income in order to support the business. The personal finances of the owneroperator are often available as a safety net for the business in the event the business is not healthy enough to support itself.

A poor personal credit condition alerts the surety that the risk may be higher than average. The bond underwriters may apply conditions to the approval (such as non-standard premium rates or even collateral), or they will often simply decline to bond that company and wait to pledge their capital for a less-risky principal instead.

Mason Grashot, CPA is president of The Bond Exchange, a national insurance agency focused on surety bonds with a unique specialty practice centered on the mortgage profession. As the endorsed strategic partner of NAMB—The Association of Mortgage Professionals, The Bond Exchange services thousands of surety bonds through programs designed specifically for the mortgage industry. For more information, call (501) 224-8895 or visit www.thebondexchange.com.

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continued from page 16

ment and testing of a risk-profiling model, state mortgage regulators are now able to effectively risk scope examinations and prioritize our coordinated resources. With such measurable achievements, the MMC has and will continue to enhance the overall system of state mortgage supervision.”

The MMC was created in 2008 by state financial regulators through the Conference of State Bank Supervisors (CSBS) and AARMR. The MMC is charged with coordinating the examination and supervision of those mortgage lenders and brokers operating in more than one state. The MMC is comprised of 10 members who are elected by the boards of CSBS and AARMR. “In 2013, technology will continue to be paramount in coordinating and enabling state mortgage regulators to efficiently and effectively do their work,” said Charlie Fields, chairman of the MMC and director of non-depository entities at the North Carolina Office of the Commissioner of Banks. “The MMC will continue to stress the use of technology in the examination process to create a more comprehensive, less burdensome assessment of the mortgage industry.”

Fannie Mae Measures Servicer Performance in 2012

The following servicers produced results on the STAR Scorecard at or above median levels relative to their peers for 2012: n Peer Group One: EverBank, GMAC Mortgage LLC (Ally Bank), Green Tree Servicing LLC, Nationstar Mortgage LLC, PHH Mortgage Corporation, Seterus Inc., and Wells Fargo n Peer Group Two: Fifth Third Bank, RBS Citizens NA, and Regions Bank n Peer Group Three: Associated Bank NA, The Branch Banking and Trust Company, Capital One, Colonial Savings, M & T Bank, Navy Federal Credit Union, Third Federal Savings and Loan and Trustmark National Bank Servicers that achieved a three STAR or greater designation will be recognized for their commitment to customer service and foreclosure prevention efforts in April, when the 2012 STAR Operational Assessments are complete. Servicers who earn a three STAR designation achieved above median results on the Scorecard and demonstrated consistent and standardized processes in most business processes.

Servicers who earn a four STAR designation achieved top quartile results on the Scorecard for their peer group, demonstrated consistent processes with repeatable outcomes in all reviewed areas, and achieved Fannie Mae credit loss targets.

Commercial Delinquency Fannie Mae has announced Servicer Rate Trends Downward Total Achievement and Rewards (STAR) in Q4 Program’s Scorecard results for 2012, the program that measures servicers across key operational and performance areas relative to their peers, and acknowledges their achievement through STAR designations. Final STAR designations will be communicated in April and will be based on the program’s two methods of servicer evaluation: Scorecard metrics related to customer service and foreclosure prevention and operational assessments of the servicer’s processes, policies and capabilities. The operational assessments include evaluation of servicers’ key processes and drivers that produce the Scorecard outcomes.

“STAR is one of the many ways that we are helping servicers improve their work with homeowners,” said Leslie Peeler, senior vice president of Fannie Mae’s National Servicing Organization.

“Fannie Mae is pleased that servicers continue to focus on keeping families in their homes and preventing foreclosures. In the peer group representing our largest servicers we observed improvement in the delivery of home retention solutions from our top and bottom performing servicers. Servicers understand the importance of delivering solutions to homeowners and are focused on achieving better results.”

Delinquency rates continued to decline for commercial and multifamily mortgage loans in the fourth quarter of 2012, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report.

“The delinquency rates for commercial and multifamily mortgages dropped again in the fourth quarter,” said Jamie Woodwell, MBA’s VP of commercial real estate research. “The continued decline is being driven by improving property fundamentals and a strong finance market.”

During the fourth quarter of 2012, the 60-plus day delinquency rate for commercial and multifamily mortgages held in life company portfolios decreased 0.04 percentage points to 0.08 percent. The 60-plus day delinquency rate for multifamily loans held or insured by Freddie Mac decreased 0.08 percentage points to 0.19 percent.

The 60-plus day delinquency rate for multifamily loans held or insured by Fannie Mae decreased 0.04 percentage continued on page 24

rectify this situation. For example, what actions have you taken to become an expert in the industry? Why would someone want to work for a manager who is not an expert—especially in areas that will help them increase their income? Why would someone want to work for a manager who cannot show them how to become an expert? In this regard, career advance becomes a very important part of the discussion.

Here are some additional parts of a solid recruitment or informational package:

Developing a Recruitment Package

By Dave Hershman

n How many well-qualified managers are available? n How many less-than-qualified managers have they worked for? n How much income will it mean to them to have a manager that can deliver real support? n What is your knowledge and experience worth to them? Have you elucidated this clearly and precisely?

In other words, you should not only have a flyer for the company that is part of the package. You should include your most important recruiting tool—your resume/flyer! And if your resume is not impressive, you need to

Today, the Web is important I am not telling you anything you did not know with this statement. As we are describing a recruitment package, we are also describing the components of a solid recruiting site. Again, smaller companies may not have the time or budget for such a site. However, they should have the ability to put together at least a rudimentary package. Larger companies are more likely to need and have use for both.

How about you?

The last question I will ask is: What would you include in your package? Do not consider my list to be inclusive of every item that you would include. Nor is every item essential. The goal is to get you to think of a way to differentiate yourself from the competition. Notice I left out any conversation regarding compensation plans. It is usually the first question asked by a candidate. Just as a consumer asks what their rate is, you should not give a rate without first developing a relationship and trust and discovering their real needs. Similarly, a discussion about commissions also comes down the road after the use of the recruitment package.

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Dave Hershman is a top author in the mortgage industry with seven books published, including The Complete Mortgage Management Kit. Dave is also director of branch support for McLean Mortgage. He may be reached by e-mail at Dave@HershmanGroup.com or visit OriginationPro.com.

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The key to cultivating the right targets in the recruitment process is to define your targets carefully. Once you have, then the networking/marketing/selling process must begin. Obviously, there must be many steps to this process as recruiting top-level candidates takes time and energy.

This month, we will talk about the marketing step. The key to marketing is to make your company look different in a positive manner. When most people are introduced to a company or situation, they rarely receive anything but directions to the office. Loan officers are offered a rate sheet or perhaps a marketing flyer. Is this the professional presentation we are trying to make to attract our top professional targets?

The key to the selling step is listening.

You should not spend your time in the interview/networking process talking.

The art of sales is the art of listening. Yet, the prospect will have questions about your company. You can go over the contents of your recruitment package in a few minutes and give it to them to read at their leisure. In many cases, the information may be distributed ahead of time as part of the marketing process.

In some respects, the name “recruitment package” is a misnomer. The term “information package” may be a better description, especially if you are distributing as part of or before a networking meeting.

The components of the package should be items already produced by your company. The purpose of putting together a recruitment package is not to reinvent the wheel. Your time is at a premium and should not be utilized in developing flyers or other materials solely for this purpose. If your company has not developed the items necessary for this package, then support for your present originators may be lacking as well. As a matter of fact, it is this level of support which should be an important focus of the package and presentation.

Start with the reasons why someone should work for YOU and your company—this can become part of a great flyer that can double as a flyer to prospective consumer targets with a few modifications. It is important that you not only differentiate your company at this juncture, but also differentiate yourself as well. Why? Because you will become a mentor to these targets.

n Sample marketing materials: How much support will you give them in their marketing efforts? If your company is solid in this regard, show off the results. n History of the company: This may include excerpts from the annual report for larger companies to a paragraph from the company Web site for smaller concerns. n Company mission statement: If you have one defined. n Company newsletter: How do you inform the employees of the company with regard to company and industry news? n Articles featuring the company: This is an important feature, especially if the targets may not have heard of your company. n The company’s ownership structure: How do they contribute to the success and stability of the company n Training materials or a training syllabus: Another important area of support in which you can differentiate yourself from the competition. n Benefits: Actually, you have been showing them benefits throughout the package. Here, we are focusing on traditional benefits such as medical, 401K, etc. n Testimonials from present employees: These testimonials can be from loan officers, operational employees and even real estate agents and con-

sumers. This is called social proof.

Testimonials are a key. They are what help develop your uniqueness.

You saying that this is a great company is not going to have much credibility. Your employees and customers saying that this is a great company (and you are a great mentor) will have tons of credibility.

The President’s Corner: April 2013

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The months are really starting to roll by now that spring has attempted to raise its head and the birds are now singing every morning. This is the time of year that all of the customers that you had pre-approved in the winter months should start finding their homes.

That is why the contact that you have with your customer and with their real estate agent is that much more important. As the time begins to put us into some of that great weather, the daylight savings time has started to put that extra hour of sunshine into your business life.

Make it work for you by establishing those extra hours of work and let your customers know that you are available to them.

I reflect back on the 2013 NAMB Legislative & Regulatory Conference, and note that on Sunday, we had a great four hours dedicated strictly to compliance.

Talk about opening up your eyes.

Jonathan Foxx and his group from Lenders Compliance Group did a fantastic job. I think that we are going to make compliance a big portion of every conference that we have because of the importance that is inevitable in our daily lives now. Soon, NAMB+ will be offering something for each person that will help them in the compliance arena. I personally want to thank all who attended this conference. I think that it was the best one that we have put together, based on the speakers and the information that was shared with all of you.

A big thank you to Provident Funding and Mr. Herman Churchwell for their continued support and sponsorship of the Legislative & Regulatory Conference the last three years. This really shows the importance that this company and the 2012 NAMB Affiliate of the Year puts on this event and for that we are truly thankful.

As I mentioned earlier, a big thank you

also goes to Jonathan Foxx and Lenders Compliance Group and Brokers Compliance Group for their outstanding compliance program on Sunday.

Jonathan Prendergast, Chuck Cross, Michael Barone and Wendy Bernard also contributed to make this session one that should not have been missed. On Monday, the Industry Panel of Stephen Linville of the National Association of Home Builders (NAHB); Jess Sharp, U.S. Chamber; Ken Trepeta of the National Association of Realtors (NAR); and Justin Wiseman of the Mortgage Bankers Association (MBA); and John Hudson of NAMB drew a large crowd. People wanted to know what the industry was thinking, doing and commenting on a wide array of subjects. All of these people did a great job and answered many questions for the attendees. In the next segment, Mark Calabria from the Cato Institute gave a regulatory outlook for 2013.

The afternoon session began with a person who has attended several of our Legislative Conferences, Bart Shapiro, formerly with the Consumer Financial Protection Bureau (CFPB) and now with C3 Compliance Consultants. His insight into the CFPB and compliance was a great addition to the entire day. He was very informative and offered a first-hand look into the mortgage compliance arena. This was followed up by the Keynote Speaker of the day, Edward Pinto, resident fellow at the American Enterprise Institute. Mr. Pinto spoke to a packed house and answered questions for several of the attendees. The day came to an end with John Hudson and Rick Bettencourt from our Government Affairs Committee and Roy DeLoach, NAMB’s Lobbyist, talking with attendees about what they need to do on the Hill and how to approach questions and items from the congressmen and senators and their staffs. It was, in my estimation, the best Legislative Conference in the past five years. It was a great job by all and I want to personally thank each of these people for an outstanding job in making this Ledge

Conference a huge success.

And while we are on the subject of Government Affairs, please join with me in welcoming our new Government Affairs Chair Rick Bettencourt. You will soon start seeing videos from him as John Hudson has stepped down to spend more time with his wife and soon to be born new baby. John will be really missed, as he has done an excellent job since taking over for Mike Anderson. Now, Rick has stepped up to oversee this committee, and I look forward to working closely with him on our government affairs initiatives.

The dates are in and NAMB National will be changing to a better date and different location for 2013. We will be going to Harrah’s Casino & Resort in Las Vegas from Friday-Tuesday, Oct. 18-22. The Committee has started to put together some great speakers and some great programs, and the price for rooms will be $119 for Friday and Saturday nights and $49 for Sunday and Monday nights. This really should make this much more financially easier for everyone with room rates being this low. Be on the lookout for information on this upcoming event in the very near future.

NAMB is looking for those of you who have wanted to get involved into the association to step up. By the time that you read this, NAMB will have been asking for nominees for the Board of Directors. If you or someone you know is interested, please make sure that you get your nominations in ASAP. And if you just want to part of a committee, send your information to me at president@namb.org. I will find a place to put you, or if you have a specific committee in mind, let me know that as well. We need good members to be on these committees and now is the time for you to be part of it. This is your chance to make a difference in the association … to make yourself part of it!

The NAMB+ Board is working on several opportunities for our members in the benefits department. This is the for profit side of NAMB that we put together to work on programs and benefits for all of

our members. They currently have several beneficial programs that you as a member can take advantage of right now. Visit www.namb.org and look on the “Strategic Partners” page and see all of the benefits available to you, our members.

As I close out the President’s Corner this month, I want to make another request that you join NAMB. We have continued to grow members each and every month, but there are still 108,000 originators and maybe 15,000 mortgage professionals out there who have not joined. I ask that if you are the only person that is a member in your office, ask the others to join. I have to admit that when I visited my congressmen and senators when we lobbied on Capitol Hill, they continually asked me about membership and why more people are not members.

Last month, I gave you the top 10 reasons to join NAMB-The Association of Mortgage Professionals. Now, in having a discussion with a new member, this person made a statement that I thought was really good. He said, “I put this off for two years until I had an account executive tell me that being a member shows that I truly believe in my profession and organization and truly value what I do.” I have personally been a member of NAMB since 1989, and I believe that membership has its own privileges, and NAMB offers so much to the member for so little amount, that it should really be a no-brainer for everyone to join. For just $50 per year for a Silver Membership or $120 per year for a Platinum Membership, you will get more than your money’s worth. Keeping up to date on what is going on in your everyday world makes this information the best you can get for the money. So quit putting this off and go to www.joinnamb.com and sign up today.

Sincerely,

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

NAMB Government Affairs Update

By Richard M. Bettencourt Jr., CRMS, CMHS

As my first official article as the new Government Affairs Chairman for N A M B — T h e Association of Mortgage Professionals, I wanted to first thank our outgoing Chairman John Hudson for doing

an exemplarily job representing the roughly 100,000 mortgage professionals across the country. I know I speak for NAMB’s membership when I say, “Great job and we appreciate everything you did”.

Where do we begin? I think the best thing to do is ask a very simple question. What do you get when you take 128 of some of the most passionate mortgage professionals in America, send them to a brand new hotel in

Washington, D.C., and then ask them to spend eight long hours walking miles to and from buildings with names like Russell, Dirksen, Hart, Cannon, Longworth, Rayburn and Ford? The answer is quite easy, I can assure you! What you get, without question, is one of the most successful lobby events NAMB has had in close to 10 years. The 2013 NAMB Legislative & Regulatory Conference was a complete and total success.

Coming off the best NAMB National Convention we’ve had in five years, the board had high hopes for this year’s Legislative Conference, but I think no one quite expected the type of energy, passion and determination we saw from our members that showed up. There was a buzz and hum in the air that you just didn’t hear, you felt it as well. Whether at registration, breakfast, lunch or dinner; the talk was about what can I do

to help preserve our industry, our way of life, and our consumers right to choice. This same energy carried over to Monday night when we held our Political Action Committee (PAC) event, and when all was said and done, 128 people raised over $28,000 for our PAC. As many of you know, PAC funds are the lifeblood of any national organization that is striving to ensure that our industry and those we serve continue to function for years to come.

The day we stormed the Hill started as an overcast and rainy day that initially didn’t perk our spirits.

However, after speaking with many of the 128 members over the previous two days we knew we had a record number of scheduled congressional appointments and no amount of rain was going to hold back the wave of mortgage professionals determined to spread the word contained within HR 1077—The Consumers Mortgage Choice Act. Surely by now, we’ve all heard of the Dodd-Frank Act, the Consumer Financial Protection Bureau (CFPB), and hopefully the Qualified Mortgage, better known as the QM Rule.

The QM Rule has specific verbiage contained within its body that, in my opinion, renames the QM Rule to the “Broker Killer.” The knockout blow to brokers can be found within the rules definition of loan originator (LO) compensation and the specific terminologies the CFPB uses to define individuals and entities. One of HR 1077’s pri-

mary missions is to amend, albeit in a minute way, the statutory body of the Dodd-Frank Act so that compensations paid to brokers by creditors is excluded from the three percent points and fees cap established under the QM Rule. This minor fix will essentially create an even and level playing field that all lending institutions will survive. Whether you are a broker, banker, wholesale lender, community bank or a credit union, this change will allow each institution to survive in their respective markets. Another encouraging feature of HR 1077 is that it is a multi-colored bill. It’s a red and blue bill, which can be some of the best bills shuffled across the busy floors of Congress. We would like to thank Rep. Bill Huizenga (R-MI) for authoring this bill and the 13 other Republicans and Democrats who have co-sponsored this bill. NAMB, its members, and the remaining 95,000 licensed mortgage professionals who are not members of NAMB need to reach out to their Congressional leaders and kindly ask them to support and endorse this bill.

So, what’s next for the Government Affairs Committee in 2013? I can assure you it’s not sitting back and hoping this issue corrects itself. We are coming off two amazing events, the energy is there, the excitement is there, and the momentum is there as well. We are going to carry that momentum all the way through the next 12 months and use it to get the necessary changes we need for our

consumers and our industry.

We are immediately setting up a sub-committee to investigate and assess the issues surrounding Disparate Impact and the affects this will have on the broker and banker community. I’m quite confident who will chair this sub-committee and this announcement will be made in the immediate future. Our monthly GA Committee meetings will begin in April, and I am asking all of our members who may be interested in government affairs to reach out to NAMB President Donald Frommeyer (president@namb.org), and request an appointment to the GA Committee.

To the members of NAMB who attended the 2013 Legislative Conference, it is imperative that you routinely reach out to the congressional staffers you met and provide them with every HR 1077 update that we pass on to you. They are the eyes and ears of your congressional leaders and are vital for this piece of legislation. I will continue the tradition started by our former GA Chair Mike Anderson and regularly-produced videos which will be loaded with up to date government affairs information and then distributed to our membership. But, please don’t let it stop there! Take that video and send it to all who will benefit from the changes we are trying to enact. Send it to your clients, your real estate agents, your attorneys, and of course, your congressional staffers. Everyone needs to

know what we’re trying to do!

Lastly and certainly not least, I will be extremely adamant about increasing our membership and I will be a very outspoken and vocal member of the NAMB community as it pertains to our membership. I am tired of hearing other mortgage professionals talk about closing 100, 200, 300 or more units and basking in the media spotlight, yet many of them are not members of the association fighting to allow them to enjoy the fruits of our labor. I know hundreds of mortgage professionals who will never close near that amount, yet they still find a way to be members and attend the various events that NAMB sponsors.

Brothers and sisters of the mortgage community, the fees are small to join, but the impact of your voice and presence is immeasurable. Take the time and spend the small cost to be part of something bigger than yourself.

I would like to close my first article with a quote from Robert Louis Stevenson that I feel has so many different meanings: “Don’t judge each day by the harvest you reap, but by the seeds that you plant.” Become the person that makes a difference!

Richard M. Bettencourt Jr., CRMS, CMHS of Danvers, Mass.-based Mortgage Network Inc. is Government Affairs Committee chair of NAMB—The Association of Mortgage Professionals.

He may be reached by phone at (978) 979-0883 or e-mail rbettencourt@mortgagenetwork.com.

By John Glen Stevens

rooms are directly across from the trade show space. This will give attendees easy access to all educational sessions and to the great lineup of sponsors and exhibitors. Our exhibit hall floor was alive with energy last year. We’re working on ways to keep it electrified with possibilities.

We’ll be reaching out shortly to exhibitors and sponsors, and attendee outreach will begin in earnest in June.

But keep your calendars open, and keep checking in at www.namb.org for additional updates. We’re working to build the best show in the nation for mortgage professionals … again.

John Glen Stevens is chairman of the NAMB National Conference Committee, and is Utah area manager for ENG Lending. He may be reached by phone at (801) 427-7111 or e-mail jstevens@englending.com.

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for all attendees and exhibitors. The NAMB National Conference Committee is already working on a lineup of sessions and speakers that will impress, and will bring value to every attendee.

At NAMB National, our goal isn’t just to inform, but to help give every mortgage origination professional something you can bring back with you to immediately help you in your business.

We’re also looking forward to an expanded exhibit hall, giving attendees even more opportunity to find the best products, services and funding sources.

For the first time in six years, our conference won’t be at the MGM Grand.

We’ve had a wonderful experience working with the staff there, and the facility has been terrific. But change is also good, and we’re excited about working this year with Harrah’s. We’ve secured all of their main ballroom space, and have arranged so all meeting

OHIO MORTGAGE PROFESSIONAL MAGAZINE

NAMB National is gearing up for its 2013 conference–and we’ll be coming in bigger, newer, and earlier than we have in the past years.

Mark your calendars for FridayTuesday, Oct. 18-22, when NAMB National convenes at Harrah’s Casino & Resort in Las Vegas. We’ve moved away from our traditional December time slot so that attendees won’t run into conflicts with other holiday gatherings and events, and so that we can offer continuing education classes in time for annual license renewal deadlines.

Last year’s NAMB National was a huge hit, with more than 1,400 registrants and scores of exhibitors and sponsors ratcheted up the excitement.

This year, we’re working hard to make it even bigger and more compelling.

Watch for announcements of some of the nation’s biggest names in the mortgage industry as our featured speakers, and for even more fun packed into the event, with great networking opportunities, exhibitor prizes and more.

NAMB is also recognizing the conference as its biggest event of the year by moving our annual Installation of Officers to NAMB National. Saturday, Oct. 19, will be day packed with activities for NAMB’s leadership, our Delegate Council Meeting, and our State Affiliate Leadership. We’ll not only engage in planning out NAMB’s strategic initiatives, but we’ll be installing the next group of dedicated leaders for our growing organization.

On Sunday, Oct. 20, and Monday, Oct. 21, NAMB National clicks into gear

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NAMB National 2013: Building the Best

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Scenes From the NAMB 2013 Legislative & Regulatory Conference March 10-13 in Washington, D.C. Credit all photos to Robert Ottone

Jonathan Foxx of Lenders Compliance Group delivers his regulatory update

NAMB Director Donald E. Fader, CRMS welcomes attendees to the 2013 Legislative & Regulatory Conference

Rep. Peter Gallego (D-TX), second from left, meets with reps from NAMB’s Texas delegation Sen. Elizabeth Warren’s Chief of Staff, Dan Geldon (right), meets with NAMB reps in D.C.

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v NationalMortgageProfessional.com

John Stevens, CRMS addresses the NAMB Delegate Council Meeting

Members of the group representing the California Association of Mortgage Professionals gather for a photo Members of the Texas delegation pause for a photo prior to lobbying on Capitol Hill

Michael Barone of Lenders Compliance Group during the Sunday afternoon Compliance Symposium

National Mortgage Professional Magazine Publisher-CEO Joel M. Berman, NAMB President Don Frommeyer and NCRA Executive Director Terry Clemans in D.C. during the 2013 Legislative & Regulatory Conference

Jonathan Foxx of Lenders Compliance Group (right), presenter of the Compliance Symposium, is welcomed to D.C. by NAMB Director Donald Fader (left)

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seeking the American Dream. FGMC hasn’t forgotten that,

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In our crazy world of mortgage securitization and lender

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The HECM Loan Comparison Summary

By Ralph E. Rosynek Jr.

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The HECM Loan Comparison Summary is the “best fit” tool designed for presenting borrower options for a reverse mortgage pre-qualification discussion. The initial Loan Comparison Summary document is generated by the loan originator based upon pre-qualification discussions with the borrowers. The contents of the documents cannot be calculated using traditional forward loan origination software platforms or calculators. Generally, lenders provide access to proprietary Home Equity Conversion Mortgage (HECM) software and full LOS resources for this document creation based upon parameters and formulas published by the U.S. Department of Housing & Urban Development (HUD). A sample loan comparison summary is available for review by contacting info@rmpath.com.

Specific to this document is the ability for the borrower to view various loan transaction scenarios in a side-by-side presentation format. The program column product details prepared are displayed based upon initial input of the age of the youngest borrower, the property value and location, the current initial and expected rate index and in the case of an adjustable rate product, the current margin.

The resulting loan comparison establishes a preliminary principal limit (the amount of funds available based upon the input values) and then continues to adjust the principal limit by reducing available proceeds per amounts necessary to extinguish all property liens, establish reserves for repairs and monthly servicing fees (if applicable), payment of required Mortgage Insurance Premiums (MIPs) and payment for all permitted closing costs, fees and charges. The actual principal limit is determined by verified input information and a property value set by the underwriter.

Each loan summary document generally provides one or more columns for a Fixed-Rate Saver, Standard Adjustable-Rate and Adjustable Saver Rate product comparison to initially identify the different types of program options, features and benefits available. The remaining proceeds are then presented based upon the payment plan chosen by the borrowers; a lump sum disbursement (for the closed-end Fixed-Rate Saver product) or a line of credit, term payment, or tenure payment option in the case of an adjustable-rate product. Borrowers may also choose from additional payment plan options displayed which include combinations of line-of credit, term and tenure payments in the various loan comparison summary columns as well.

The loan comparison summary is also utilized in the mandated HECM counseling process, wherein counselors will review the presented program and payment plan options with the borrowers to determine the best fit and right choice based upon their desire to remain in their home and remain financially independent or other specific needs.

Accurately estimating the amount of lien payoffs, MIP, reserves, closing costs, fees and charges associated with the HECM loan transaction in addition to the basic input information required to produce the loan comparison summary is an important part of presenting a realistic initial review of the HECM program choice. Borrower discussions should also include evaluating overall borrower and property eligibility per HECM guidelines and lender underwriting and pricing criteria. The HECM transaction may not meet the needs of some borrowers.

Ralph E. Rosynek Jr. is senior vice president, national production manager for RMS, Reverse Mortgage Solutions Inc. RMS provides complete HECM program training, product availability and partnership access to mortgage professionals through the company RMPath wholesale and correspondent channels. He may be reached by phone at (281) 404-7970 or e-mail rrosynek@rmsnav.com.

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nmp news flash

continued from page 18

points to 0.24 percent. The 90-plus day delinquency rate for loans held by FDICinsured banks and thrifts decreased 0.32 percentage points to 2.62 percent.

The 30-plus day delinquency rate for loans held in commercial mortgagebacked securities (CMBS) decreased 0.13 percentage points to 8.73 percent.

The fourth quarter 2012 delinquency rate for commercial and multifamily mortgages held in life insurance company portfolios was 7.45 percentage points lower than the series high (7.53 percent, reached during the second quarter of 1992). The delinquency rate for multifamily loans held by Freddie Mac was 6.62 percentage points lower than the series high (6.81 percent, reached in the fourth quarter of 1992).

The delinquency rate for multifamily loans held by Fannie Mae was 3.38 percentage points below the series high (3.62 percent, reached during the fourth quarter of 1991). The rate for commercial and multifamily mortgages held by banks and thrifts was 3.96 percentage points lower than the series high (6.58 percent, reached in the second quarter of 1991). The rate for loans held in CMBS was 0.29 percentage points below the series high (9.02 percent, reached in the second quarter of 2011).

Senior Home Equity Reaches New Three-Year High Americans 62years old and older now have more equity in their homes than at any time since mid2009, according to data released by the National Reverse Mortgage Lenders Association (NRMLA). The new information comes from the NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI), which analyzes trends in the home values, home equity, and mortgage debt of homeowners 62 and older. The RMMI is updated quarterly and tracks back to the start of 2000.

“The positive trends supported by today’s RMMI are good news for senior homeowners, and they contain positive signs for the American economy and housing market,” said Peter Bell, president of NRMLA. “Thankfully, the recovering real estate market continues to grow seniors’ home equity, creating a valuable resource for them.

Tapping into that equity is one option to help fund living expenses, home maintenance costs, or health care needs in retirement. With proper planning, seniors can use their home equity to pay off a forward mortgage and lower their monthly expenses, or they can use it for the financial flexibility needed to hold onto other assets during a down market.”

In the fourth quarter of 2012, the RMMI reached its highest level (152.59)

since the second quarter of 2009. After falling to start 2012, the RMMI increased slightly in the second quarter before showing significant growth in the third and fourth quarters.

“In the second half of last year, the RMMI had its strongest two quarters of growth since early 2006,” said Allen Jones, managing director of RiskSpan, the analytics firm which designed and manages the RMMI. “Senior home equity increased by $50 billion between the third and fourth quarters of 2012, driven largely by the increase in the aggregate value of seniors’ homes.”

Over the last 12 months, the total home equity of homeowners 62 and older increased by $117 billion (+3.8 percent), while their home values increased by $97 billion (+2.3 percent) and their mortgage debt declined by $20 billion (-1.8 percent). The housing value estimate used in the RMMI is based on the Federal Housing Finance Agency’s Q4 2012 all-transactions Indices, which saw housing values increase in 71 percent of the 395 MSAs covered by RiskSpan.

In addition to calculating the RMMI level for the most recent quarter, RiskSpan recalculates historical RMMI levels using the Federal Reserve’s revisions to its historical Home Mortgage Debt figures and FHFA’s revisions to its historical HPI figures. As a result of the Fed’s and FHFA’s revisions to the data they published in Q4 2012, the Q3 2012 RMMI level was upwardly revised from 149.99 to 150.21. Most quarters show similar very small adjustments.

Going back to the start of 2000, the RMMI peaked at 191.22 in the fourth quarter of 2006, when the collective home equity owned by Americans 62 and older hit $4.0 trillion. Since that high water mark, home values have declined 13.6 percent for homeowners 62 and older, and their collective home equity has declined by 20.2 percent.

Over the long term, however, home equity has proven to be a valuable resource. The collective home equity of Americans 62 and older has grown by more than 50 percent since the RMMI’s starting point. In Q1 of 2000, seniors owned $2.1 trillion in home equity, compared to $3.2 trillion today.

Hammerhouse Seeking Respondents to Survey on Critical Industry Issues

Hammerhouse LLC has released its Third Annual Survey of Originator Opinion, which seeks out originators for their opinions on critical issues facing continued on page 28

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Filling the Void

Vision and aggregation benefits all

By Todd Hollosi

Nature abhors a vacuum. Can the same be said about the mortgage industry? Probably not with the same zest.

Think back to high school physics and the classic demonstration in which the air from a thick bell-shaped jar was removed to create a vacuum. Light smoke surrounded the outside of the jar and when the inside vacuum was pierced, the smoke rushed in, instantly filling the jar with a light wispy cloud. Nature’s laws held steadfast as the void was instantly and efficiently filled.

Until recently, there existed a ponderous void in risk management solutions on the back-end of the mortgage origination lifecycle—at the closing table. The void has now been filled.

Fraud in the origination cycle It has been many, many years since the earliest mortgage fraud schemes were carried out, over time impacting all exposed parties to the loan transaction. The mortgage industry has been the target of fraud for many years, for good reasons—“that is where the money is.” The risk management efforts focused on fraud have typically been one or two steps behind, allowing bad actors, schemers and fraudsters to prey upon the industry. The mortgage industry reacts directly or through the marketplace of commercial providers, and the fraudsters react to the reaction,

evolving their schemes to stay one step ahead.

Over the years, the void of risk management in the mortgage industry has steadily filled with a variety of utilitarian tools and services. Historically, these tools and services have spanned the broad mortgage origination and servicing lifecycle and addressed every component— almost.

An increasing number of astute observers and engaged practioners realize that one of the most important and risky components of the loan origination lifecycle has remained virtually untouched with respect to effective risk management solutions. The risks associated with unscrupulous or ineffective closing agents are very real, wide spread, and increasingly costly to the affected parties.

Change is not only imminent, it is happening now. Due to the insight and persistence of some dedicated and passionate champions, the first stage of effective risk management for the closing transaction is now a reality and available to all. Filling this void is conspicuously late in the development of the basket of risk management tools. However, there are advantages to late entry.

Solution architects have the advantage of keen insight that comes from years of experiential perspective combined with the knowledge of the initial definitive regulatory requirements. In addition, technology overall has advanced dramatically resulting in a more advanced technology toolbox to be leveraged in solution design.

The good news for the industry is that a solid, efficient, broad solution for all interested parties has been developed and the

first major component is now available.

The solution architects have developed a multi-pronged approach to closing agent fraud mitigation and availed themselves of the latest technology trends and a vision refined by years of experience and research.

Pervasiveness of closing fraud Why hasn’t the void been filled previously?

It could be that the best design concept requires an aggregated, centralized solution and the industry does not readily coalesce on concerted initiatives. It could be that the extent of closing agent fraud was not well known historically as there were no comprehensive, granular and reliable reporting capabilities.

With support of SARS, the FBI now estimates mortgage fraud losses annually around $13 billion and growing. Indeed, between 2007 and 2011, mortgage fraud cases doubled, notwithstanding the evolution of risk management in the industry.

The FBI further estimates that 15 percent of mortgage fraud is associated with the closing end of the origination lifecycle.

Even with the growing, wide-ranging set of risk management tools and services that have emerged, those that set about to defraud the industry continue to find success. Today, the FBI considers mortgage fraud the number one white collar crime in America. Of the various mortgage fraud targets, closing fraud could arguably require the least imagination and be the easiest fraud to perpetrate.

There are many schemes and methods for mortgage fraud but several techniques are more commonly encountered and

reported such as false documents including income and asset documentation, identity theft, appraisal fraud, hidden straw-buyer relationships and fake title and escrow companies who cover up prior liens.

However, at the closing end of the transaction, not a lot of imagination is required. The money and the collateral security documents are sent to a closing agent in hope that the agent will disburse the money and insure the proper execution, recording, and delivery of loan documents as directed. As one of my esteemed CIO associates would say, “Hope is not a strategy” —and similarly, it does not make for a very good control. Good controls in this instance require solid processes combined with effective tools and services.

Evolution of tools and services There is a veritable cornucopia of tools and services available to the mortgage industry with purposes that run the gamut of functionality. These tools and services continue to evolve in their sophistication as the mortgage industry evolves. The jaded observer may note that in recent years the speed advancement in global technology overall has well-outpaced the speed of technology advancement in the mortgage industry. However, the industry continues to progress nonetheless and in recent years more of the technology advances are pushing towards disruptive in nature.

Looking back at the evolution of mortgage technology there are distinct eras that can be characterized. In the early days the technology solutions for any

Risk management capabilities

Late entry solution with benefits The void of effective closing agent risk management has been filled by a standardized, comprehensive, and consequential solution. A long time coming, and ponderously late, there are advantages in developing a solution at this

n Knowing the regulatory requirements and designing a solution that satisfies them accordingly; n Having the time necessary to fully contemplate and “vet” the solution, reflecting and reacting to years of closing fraud. These years of experience sharpen the vision of the solution architects and led to a most effective design in combating closing fraud, and as a highly leveraged tool; n Access to the latest technology advancements and capabilities; and n A target audience that better understands and is more bought into a viable solution due to a combination years of

risk experience, observance of government audits, and enlightened perspective on risk management.

What is the solution? The solution has multiple components with the first being a national database of closing agents professionally analyzed and continuously monitored for risk characteristics. This common information warehouse is a single central, aggregated database that can be leveraged by lenders, mortgage banks, real estate agents, and consumers alike. Other complementary components are in the development pipeline for delivery in the not too distant future. continued on page 38

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n FinalTrac: Provides an integrated solution that electronically track the validation of the lien pay-off n CSC Ingeo: Offers a tool for secure, Webbased, recording technology for submitters and recording offices n Rynoh: Verification of trust and escrow accounts

Only recently has a truly effective solution focused directly on the risks at the closing table been designed.

late juncture. The solution architects had the benefit of:

OHIO MORTGAGE PROFESSIONAL MAGAZINE

Up until last year, the tools and services developed to address risk on the back-end of the mortgage origination process have been valuable but at best, tangential to the direct vulnerabilities of closing agent risk. There are some noteworthy examples of either companies that leverage aggregation, integration, e-capabilities or mobility. For example:

n ClosingCorp: Established and maintains a comprehensive, aggregated database of all the state and local fees and provides a guarantee of accuracy n DocMagic: Advancement of electronic signature authorities and confirmations

NationalMortgageProfessional.com v

aspect of the process, including risk management, were rudimentary in nature.

Again, my quote-happy associate would characterize the technology solutions as akin to “paving the cow-path.” The earliest applications of technology in the mortgage industry involved simply taking a plethora of paper mortgage forms and documents and scanning them into an electronic form, sans process improvements or workflow modifications.

Over time, these simple automations evolved from the most rudimentary level to increasing levels of sophistication. For example, electronic forms and documents became part of electronically defined, controlled, and optimized workflows. Other examples included tools to improve and control data integrity. Eventually, tools and services offerings expanded to include the dimension of automated analytics that today continue to evolve with respect to sophistication.

The natural evolution of mortgage technology was re-directed in 2006 and the following years. During those turbulent times technology tools and services were often geared to the reaction to the seismic changes that occurred in the mortgage and credit industries. Organic drivers were at least partially displaced by regulatory.

Recently, and to the credit of those in the industry who are more forward-thinking and willing to stretch the envelope, we are seeing more solutions leveraging the global technology trends of the past few years including mobility, advanced data analytics, and outsourced hosting services.

Importantly, more emerging solutions have either broad integration capabilities or leverage aggregation across the industry.

From a mortgage technology perspective any broad-spanning solution developed in today’s era also has to pay homage to the advantages brought to bear vis-à-vis the standards developed within the Mortgage Industry Standards Maintenance Organization (MISMO) framework.

The MISMO advancements permit not only electronic process flow within a company, but to various partners, service providers, and customers/investors. The pervasive Logical Data Dictionary and XML interface technology have been keys to the development of complex information sharing at many levels with many types of partners.

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Mortgage Professional Resource Registry The Resource Registry is a directory of lenders (wholesaler or retail that are recruiting), affiliated services and resources that is seen by more than 191,181 active Professionals.

Call 516-409-5555, ext. 4 to register your company.

See the National Mortgage Professional Magazine’s Resource Registry on pages 59-63

continued from page 24

the mortgage industry and impacting their job performance. The Annual Survey of Originator Opinion has become a key indicator for mortgage lenders on what they need to focus on to attract, hire and retain talent with transferable books of business.

“Hammerhouse is committed to being a key industry resource to originators and mortgage lenders to drive positive change throughout our industry,” said Drew Waterhouse, managing director of Hammerhouse.

“The best way to improve our industry is to become part of the discussion. We encourage all originators to spend a few minutes to take this important survey and let their voices be heard.”

Hammerhouse annual comprehensive survey covers six key business components within the mortgage origination industry: Leadership, Culture, Business, Operations, Technology and Geography. All mortgage loan originators (bank, mortgage bank, correspondent or broker) are invited to complete the survey. Answers are confidential and will only appear in an aggregate analysis. Results of the survey are used to educate lenders on the perceptions of loan officers and to advocate for improvements that will benefit loan officers, leaders, lenders and consumers.

In Hammerhouse’s Second Annual Survey of Originator Opinions released in 2012 originators responses indicate a strong preference to: n See clarification of regulatory issues outstanding in the industry. n Work with regional rather than national lending organizations. n Find a home with financially secure lending organizations with effective operations and marketing. n Value the leadership, communication, integrity and culture of an employer. n Work with a recruiter to identify potentially better matched opportunities

FINRA Foundation Study Shows Lack of Savings Can Result in Mortgage Problems

The FINRA Investor Education Foundation has released a new study revealing that households without emergency savings are more likely to experience mortgage payment problems when faced with an income shock. Households without emergency savings, or rainy day funds, were three times more likely than households with emergency savings to make a late mortgage payment—

and almost twice as likely to be involved in a foreclosure. These differences exist even after controlling for other factors that can impact mortgage payment behavior—like income, education and geographic region.

The new study, “Softening the Blow: Income Shocks, Mortgage Payments and Emergency Savings” is based on data from the 2009 National Financial Capability Study, an online survey of more than 28,000 respondents (approximately 500 per state, plus D.C.).

“Softening the Blow” found that minorities and households with dependent children are more vulnerable to income shocks. Among households that experienced an income shock: n Minorities were 52 percent more likely to make late mortgage payments relative to non-minorities; and n Dependents in the household increased the likelihood of late mortgage payments by 48 percent.

“The Great Recession and the housing downturn devastated the finances of families across the country,” said FINRA Foundation President Gerri Walsh. “Data collected during this period, when many family budgets were stretched past the breaking point, suggest that having a rainy day fund can make the difference between being able to stay in your house and making late mortgage payments and facing foreclosure. That’s an important lesson for all Americans, especially as the economy continues to recover.”

The FINRA Foundation’s new study shows the extent to which lower-income Americans were especially unable to withstand an income shock during the Great Recession. Among households experiencing an income shock, those with incomes below $50,000 were 43 percent more likely to make late mortgage payments relative to their more affluent counterparts.

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

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mortgageprofessional N M P

O F

T H E

M O N T H

Eddy Perez President

Equity Loans

BY DAVID J. COSTER n this month’s issue of National Mortgage Professional Magazine, we had a chance to speak with Eddy Perez, president of Equity Loans. The son of Cuban immigrants, Eddy has had a front row seat to the American Dream. Now balancing family obligations with the challenges of building a growing retail mortgage banking firm, Eddy is living out the lessons he learned in childhood. Here is Eddy’s story.

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How did you begin your career in the mortgage business?

My father owned a residential construction company, so I have always been somewhat into residential real estate.

After I graduated college, I got into stocks and financial advising. However, the crash of 2000 hit me really hard. My girlfriend at that time told me I should try mortgages because, as she said, her hairdresser’s brother had gotten into it and was doing pretty well for himself! I went online found a company that was hiring and was willing to train me.

“Homeownership builds unity, it builds family, and it builds memories that you can never take back. We, as a company, want to provide that to people.”

What was it about the mortgage business that attracted you?

My parents moved to the United States from Cuba. It brought back childhood memories from being with my father and seeing how many homeowners bought his houses. It is truly what separates us from a lot of other countries.

It’s very American to be a homeowner.

I understand that your mother is a frequent visitor to the Equity Loans offices.

Oh, my mom’s cakes are legendary here at Equity Loans! I mean the employees want to make up holidays sometimes just to get them. The good thing is my mom will bring them in for any holiday: Valentine’s Day, St. Patrick’s Day, Christmas, etc. Also, my mom’s cooking is phenomenal. People joke by saying they don’t know how I am not fat! I am like 5’10”, but am only 175 pounds.

They don’t understand why I am not 100 pounds heavier!

How did your mortgage career develop?

I originated a lot of loans and started to

get licensed in a lot of states. My partner and I decided to open up our own office.

We were mortgage brokers, and then in 2008, at the height of the U.S. housing crisis, we decided to become mortgage bankers. We were running an office of 21 employees and thought it was the right move for all of our futures to move into mortgage banking. It was very evident that the regulators wanted people to have more skin in game—more involvement and be held more accountable.

How do you balance family time with your business?

I wake up early in the morning, and I go to the gym first to avoid traffic. I stay at the office until anywhere between 6:30 p.m.-7:00 p.m. Then, I spend a couple of hours with my children at night, and on the weekends, I am completely devoted there. I spend time with my kids whenever I can so that they don’t grow up with an absent father.

Do you travel a lot?

We are licensed in 30 states, but we have offices in about 17 of those states. We like to go out and see the branch managers ourselves and shake their hands. We also go to all the major mortgage events. The industry has shrunk now and everybody knows each other on the national level.

The consolidation of the industry was good, because it left the survivors and left those who are very committed and have passion for this business.

Is it important to have direct approval authority?

I think one of the things that helps set any independent mortgage banker apart from the rest of the field is having government-sponsored enterprise (GSE) approval. It just allows you not only to have more products, but it allows you to have more flexibility. The big banks you were selling loans to are two to three weeks behind. They are bogged down with business. If you can sell it directly to the GSEs and keep moving, it doesn’t disrupt you as much.

What is your proudest accomplishment in the business?

I think the proudest accomplishment is that Equity Loans started with 21 employees, and today, we have more than 200. Our volume has grown from a little over $30 million the first year, to last year when we did more than a half billion in production.

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David J. Coster is senior editor of National Mortgage Professional Magazine. He may be reached by phone at (919) 559-2171 or email davidc@nmpmediacorp.com.

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Who have your mentors or role models been?

My father was my mentor, my confidante, and my best friend. He passed away when I was 31. He taught me to be very humble. He set an example. He showed me a sense of purpose. Both of my parents showed me how you can change people’s lives. My dad was a contractor and he took so much pride in his work. He would put in the extra hour,

Any closing comments?

I think this business helps to continue the American dream of homeownership. I understand that some things happen.

However, the purity of it is still there. It is still very rewarding that if you take care of your clients, you will be taken care of for the rest of your life. You get a very big sense of accomplishment. Which is something I learned from my father is a key to a happy life.

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What are you looking for as you grow?

I want other like-minded folks. I want to also move into other areas. I would like us to be able to expand on some products. This business is very, very pure in the sense that it is very American. What separates us from other countries is how much we value homeownership.

Homeownership builds unity, it builds family, and it builds memories that you can never take back. We, as a company, want to provide that to people.

What differentiates Equity Loans from the rest of those in the mortgage marketplace?

I think we bring a unique, complimentary management approach and that is an advantage. I have been an originator and I have been a branch manager, but I haven’t had to learn how every moving piece works. KP and I divided and conquered. I took over the operation and sales side, while he is over financing and maintaining compliance. I think that works very well. We are each other’s Yin and Yang. I don’t think we are perfect, however, you know our motto has always been, “Work every day to improve.”

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To what do you attribute your growth?

Excellent employees. KP was born in India. I was born here in the U.S., but I am first generation American. We attribute a lot of our success, not just to working smart, but to working hard. You could be very smart, but if you work five hours a day, you won’t accomplish as much as someone who puts in 14-hour days. We couldn’t have done it without just amazing hard-working employees.

Your direct path to growth in the Reverse Mortgage market.

What are the biggest issues facing our industry?

I think we have done a great deal on the regulatory front. However, if we do not address our nation’s budgetary issues, if we don’t deal with entitlement spending, and if we don’t work together, it could potentially lead to downgrading of our bonds. Foreign investors will not want to buy our bonds one day. What encourages me is that Americans, as a whole, have always been able to do that, even if it does come with some kicking and screaming. Courage is never popular until something is accomplished, then it is commended.

even though it hurt the bottom line, but he wanted his work to be great, not good.

He also taught me about preparation.

Have all your ducks in a row … have all of your facts and study. He taught me to be tough, but to be fair. If your employees do not perform good work, hold them accountable.

My father taught me not only lessons in life, but also lessons in business. He was the first one who introduced me to residential housing. Now, I took a different path. I finance residential homes. My dad showed me how rewarding it is when people move in to a home you helped them get into.

Another role model was a gentleman by the name of Tim Arrington. He was a very, high-producing loan officer when I first met him. At that time, I was new to the industry and young, and he took me under his wing when we met at another company. He told me: “You know, your conviction is very strong. You speak well and you study the business, which is unheard of. I just need to show you few things: How to qualify loans, ways to think outside the box and the technical side of this business.” He made it clear that anybody can talk and spit out interest rates, but looking at the situation from your client’s standpoint is how you will stand apart from the rest.

The last role model is KP. He taught me how to look at a financial statement.

I am the production side and on the operations side. But KP taught me the finance side. He would say, “Hey, you’ve got to look at this, we have to worry about expenses here.” You know we have never lived extravagant lifestyles. We have chosen to keep our money invested in the company.

consumer financial protection plaints collected through the CFPB’s complaint system under or information from other sources, that such covered person is engaging, or has engaged, in conduct that poses risks to consumers with regard to the offering or provision of consumer financial products or services;13 n Offers or provides to a consumer any private education loan;14 or n Offers or provides to a consumer a payday loan.

Being an: n Insured depository institution with total assets of more than $10,000,000,000 and any affiliate thereof; or n Insured credit union with total assets of more than $10,000,000,000 and any affiliate thereof.

Being an: n Insured depository institution with total assets of $10,000,000,000 or less; or n Insured credit union with total assets of $10,000,000,000 or less.

A covered person may not terminate or in any other way discriminate against any covered employee or any authorized representative of covered employees.

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Policy statement and whistleblower protection The protections afforded the whistleblower and the Bureau’s procedures relating to whistleblower protection should invoke a response from all affected financial institutions to draft and ratify a policy statement relating to preventing retaliation toward a whistleblower.

Such a policy should include various statements of principle, practice, policy, and procedures—what I call the “Four Ps” —to ensure that all employees understand the importance of internally reporting to a company’s chain of command any suspicious practices or potential violations.

When the internal route fails, whistleblowers may go to a government entity, such as the CFPB, to report their concerns. As part of the policy statement, there should be a clear and unambiguous provision to protect the whistleblower from any harassment by the employer or any employees.

Therefore, the aforementioned policy should specifically state that whistleblowers will be protected from retaliation if they: n Provided, caused to be provided, or are about to provide or cause to be provided, information to the employer, the CFPB, or any other state, local, or federal, government authority or law enforcement agency relating to any violation of, or any act or omission that the employee reasonably believes to be a violation of any other provision of law that is subject to the jurisdiction of the CFPB, or any rule, order, standard,

continued from page 8

or prohibition promulgated by the CFPB. n Testified or will testify in any proceeding resulting from the administration or enforcement of any provision of law that is subject to the jurisdiction of the CFPB, or any rule, order, standard, or prohibition prescribed by the CFPB; n Filed, instituted, or caused to be filed or instituted any proceeding under any federal consumer financial law; or n Objected to, or refused to participate in, any activity, policy, practice, or assigned task that the covered employee (or other such person) reasonably believed to be in violation of any law, rule, order, standard, or prohibition, subject to the jurisdiction of, or enforceable by, the CFPB. The Bureau established an e-mail address and phone number for submitting whistleblower tips. Additionally, the CFBP has built a web space for whistleblower communications.

prevailing covered employer a reasonable attorney fee, not exceeding $1,000, to be paid by the complainant.

Jonathan Foxx is president and managing director of Lenders Compliance Group and Brokers Compliance Group, mortgage risk management firms devoted to providing regulatory compliance advice and counsel to the mortgage industry. He may be contacted at (516) 442-3456, by e-mail at jfoxx@lenderscompliancegroup.com, or visit www.LendersComplianceGroup.com or www:BrokersComplianceGroup.com.

Footnotes 1—The Designated Transfer Date, Dodd–Frank Wall Street Reform and Consumer Protection Act, (Pub.L. 111–203, H.R. 4173), signed into law on July 21, 2010.

2—Ibid. Subtitle E of Title X. 3—Op. cit. 1 Title X. 4—Enforcement, Early Warning Notice, CFPB Bulletin 2011-04, Nov. 7, 2011.

5—77 Federal Register 27446 (May 10, 2012) .

6—Specifically, on June 29, 2012, the CFPB

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Locking horns with the Department of Labor Dodd-Frank gives an employee who believes that he or she has been discharged or otherwise discriminated against 180 days after the date on which the alleged violation occurs to file a complaint with the Secretary of Labor.

Furthermore, Dodd-Frank sets forth certain rules for Department of Labor investigations, such that if the Department concludes that there is reasonable cause to believe that a violation has occurred, it may issue a preliminary order providing relief. However, the Department must dismiss a complaint unless the complainant makes a prima facie showing that the action in question was a contributing factor in the unfavorable personnel action.

No investigation is permitted if the employer demonstrates, “by clear and convincing evidence,” that the employer would have taken the same unfavorable personnel action in the absence of that behavior.

The Department of Labor has vast authorities to redress the grievances of covered employees. If it determines that a violation has occurred, the Department may order the person who committed the violation to, among other things, take affirmative action to abate the violation; reinstate the complainant to his or her former position, together with compensation (including back pay) and restore the terms, conditions, and privileges associated with his or her employment; and provide compensatory damages to the complainant.

At the request of the covered employee who has been retaliated against, the Department may assess a sum equal to the aggregate amount of all costs and expenses (including attorney fees and expert witness fees) reasonably incurred by the complainant. But, if the Department finds that the complaint is frivolous or has been brought in bad faith, it may award to the

n

n

n

n

n n

n

n

n

revised the interim rules it had adopted on July 28, 2011 regarding these procedures. See: 76 Federal Register 45168 (July 28, 2011); 77 Federal Register 39101 (June 29, 2012).

7—Op. cit. 1, § 1052(d).

8—The Consent Order was issued pursuant to 12 U.S.C. § 5563 (Hearings and Adjudication Proceedings, Dodd-Frank § 1053) and § 5565 (Relief Available, Dodd-Frank § 1055).The consent order stated that the CFPB found–though the bank had not admitted or denied—violations of Dodd-Frank §1031 regarding unfair, deceptive or abusive acts or practices.

9—Op. cit. 6, 77 Federal Register 39117.

10—Op. cit. 1, §1055, codified at 12 USC § 5565.

11—Enforcement and Fair Lending, Bureau Invites Whistleblower Information and Law Enforcement Tips, and Highlights Anti-Retaliation Protections, CFPB Bulletin 2011-05, Dec. 15, 2011.

12—Ibid. The bulletin encourages “knowledgeable sources” with information about potential violations to email their information to whistleblower@cfpb.gov or to call toll-free (855) 695-7974. On Feb. 2, 2012, the CFPB published its own whistleblower protection notice for its employees.

13—Op. cit. 1, § 1013(b)(3).

14—As defined in § 140 of the Truth-in-Lending Act (15 USC 1650), notwithstanding § 1027(a)(2)(A) and subject to § 1027(a)(2)(C) of Dodd-Frank.

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association membership is networking and camaraderie.

Some estimates claim approximately 85 percent of all business failures occur in firms that are not members of their trade association.

A trade association not only lets you know what is going on in the industry, but shows you how you can be part of it and make a difference.

Opportunities to preside in leadership roles within associations; subscriptions to newsletters and magazines; access to seminars, conferences and association events; and access to members-only offers, among many others.

Education and experience to more accurately communicate with business partners and the consumers you serve, building more credentials and respect.

Associations also extend various educational, training, licensure and certification opportunities to its members.

Membership in trade associations not only benefits employees of your company, but it also projects a positive image of your firm to your customers.

Membership in associations shows a business’ initiative, its engagement in a particular trade and its commitment to staying abreast of current developments in the market.

To influence Congressional leaders and the Consumer Financial Protection Bureau (CFPB) to improve the Dodd-Frank Act and avoid unintended consequences.

To reap the benefits of membership, you must also make an investment of time and effort in association activities and become involved.

You simply get out what you put in.

From one colleague to another, I ask you to join or renew in your trade association. I ask you without any financial or

special interests that most experience when it comes to a “pitch.” I ask you because it improves our industry by having a larger voice and footprint and it’s our responsibility together. If you feel this is your career, than join. If this is just a job, than don’t. If you are an originator, manager or owner, join your state trade association. If you are part of a multistate licensed or larger firm, consider joining as a corporate member or directly with NAMB—The Association of Mortgage Professionals.

I understand that there are other trade associations out there. I am even a member of some of them also. I have personally seen what NAMB has done in recent years and the grassroots efforts made to improve the future of this industry. I also understand that they represent delegates from all states and carry extremely affordable dues. Very few seem to understand why they should already be thankful and realize that although they were not supporting their industry in recent years, their industry trade group was supporting them.

So instead of asking “Why,” ask “How?” Instead of making assumptions or invalid complaints from the past, pay attention and get involved. Invest in your career.

Our future depends on realizing we are responsible for it. Having a strong trade association requires greater numbers and I cannot think of a more important industry in the Unites States where this would apply.

Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and 2010-2011 president of the Oregon Association of Mortgage Professionals.

He may be reached by phone at (877) 496-0431 or e-mail aharris@vantagemortgagegroup.com or visit VantageMortgageGroup.com.

MBA Launches New CFPB Compliance Program

advanced second generation loan marketplace, designed specifically for consumers, lenders and publishers. Having worked with LendingTree for many years, we were able to evaluate the new offering and made the decision to integrate it immediately.”

LoanExplorer allows consumers to access a real-time, informative mortgage shopping experience, by comparing loan product details, costs and rates based on their individual financial situation. Borrowers can then choose to connect with the lenders that match their needs.

Mortech’s Marksman allows the loan originator to quickly respond to these consumer inquiries, initiating the relationship and providing accurate loan pricing, which Mortech believes is the actual starting point for any serious conversation about financial services products.

“This type of immediate access to loan product information has been the basis for Mortech’s product development efforts since the beginning,” Kracl said. “Giving our users access to consumers who enter through the LendingTree LoanExplorer makes perfect sense for all parties involved.”

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T h e M o r t g a g e Bankers Association (MBA) has announced the launch of a new compliance program to help companies in the mortgage finance industry navigate their businesses through the new compliance rules recently released by the Consumer Financial Protection Bureau (CFPB). The program, titled “MBA Compliance Essentials: Education for our New Mortgage World,” will be presented through a series of Webinars and related compliance guidebooks that will provide companies with the foundation of essential policies and procedures necessary upon which to build their own compliance programs.

“We are pleased that through CampusMBA we can offer comprehensive, top-notch guidance and training for compliance executives at our member companies,” said David H. Stevens, president and CEO of MBA. “This offering is particularly important for our smaller, community-based lenders facing a daunting new regulatory land- Residential Finance scape. The CFPB Supervision and Corporation Offers New Examination Manual is over nine hun- Program Geared Toward dred pages long and covers thousands of Foreign Homebuyers pages of regulations. The MBA Compliance Essentials program will be a much needed resource to companies that must build compliance manage- Residential Finance Corporation (RFC) ment systems to comply with these new has rolled out a new mortgage program specifically designed for foreign-born regulations.” homebuyers, a demographic group that has been steadily increasing in the Mortech Adds New United States. The award-winning LendingTree Product to national lender’s new “Foreign National Slate of Offerings Loan Program” was created to meet the special needs of foreign-national buyers.

“The U.S. market is being increasingly Mortech Inc. has announced the suc- viewed as attractive to non-citizen cessful integration of LendingTree’s new homebuyers,” said Mark Fowler, chief LoanExplorer product into Mortech’s revenue officer at Residential Finance. suite of marketing and Point of Sale “We’re seeing growing interest from fortools for mortgage originators. eigners in securing home loans, particuLendingTree announced the availability larly in coastal areas.”

A report released recently by the of LoanExplorer earlier this week.

“The online loan marketplace is an Mortgage Bankers Association (MBA) excellent source of mortgage leads for shows a steady upswing in the number originators who are responsive and ready of foreign-born homeowners in the to interact with consumers quickly,” said United States over the past three Don Kracl, vice president of Mortgage Products Zillow. “LoanExplorer is an continued on page 34

Finding and Attracting Customers in 2013 Growing your business is essential and finding qualified prospects can be extremely difficult. Having a reliable marketing campaign enables you to grow at your own pace and plan for the future, no matter where the mortgage industry takes you. These three factors MUST be considered before setting out to accomplish this task:

First You must be willing to pay for good customers. Do the math: Take the total dollars made from commissions or basis points, or whatever your pay plan and subtract your desired profit margin and costs associated with the file.

What’s left is the reasonable amount you could spend to acquire a new customer. The average acquisition cost per customer in the mortgage industry is between $600-$1,200. That cost, multiplied by the amount of new customers you want per month, will determine your monthly budget. Don’t worry if it seems astronomically high. You’ll want to ramp up over time.

Second Take a look at your sales approach. Do you hard sell, or wait for the customer to ask how they buy from you? If you are a closer you will keep your acquisition costs low. If not, you will need to spend more to hire salespeople, or pay for better marketing. It’s always more cost-effective to do the work yourself, but anyone can have an effective marketing campaign, regardless of their sales ability. Knowing how you best sell allows you to find the right type of marketing campaign for your needs.

Third Dissect your close ratio and plan your return-on-investment (ROI). Take the number of loans you closed over the last 90 days and divide that by the total number of “leads” (or interested prospects). That will give you a reasonable close ratio. You should find yourself anywhere from five percent to 15 percent, on average.

Key factors that will contribute to the overall success of your campaign:

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1. Planned growth: How many new customers you want to add every month.

2. Acquisition cost: How much you can afford to spend per customer.

3. Approach: The best type of marketing to work with your abilities and your budget.

4. ROI: The expected return on your investment.

Now that you know where you stand, ask around about what marketing programs fit within your acquisition cost and sales style. Direct mail, mortgage leads, live transfers, data lists, etc. … these campaigns are all tried and true, and will fit into most any marketing strategy. Don’t try to take this on yourself. You are a mortgage professional, not a marketing expert, so let the pros guide you through the process. Call a marketing firm, NOT A LEADS COMPANY—a marketing firm.

Talk with people who understand your business. There are some companies that will take the time to explain what works and what doesn’t and explain exactly why. You will be able to rule out certain types of marketing and advertising because they don’t match either your sales style or your budget. Better to know up front, before spending your hard earned money.

Once you find the right program, test it a few times on a small level. Don’t blow your whole budget on the first trial. Test, test and re-test. Once you prove it is profitable, THEN spend every dollar you can spare on it. And finally, you’ll be in control of how much money you make!

Medford, Ore.-based TagQuest is a full-service marketing firm created specifically for the ever-changing business world. TagQuest assists companies with their direct marketing, advertising and branding needs, and knows what it takes to generate quality customers and, most importantly, how to retain those customers for years to come. TagQuest brings forth a unique opportunity to utilize our experience and expertise in varying consumer sales and marketing environments. For more information, call (866) 376-5540 or visit Tagquest.com.

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decades. Immigrant Contributions to Housing Demand in the United States reports that the number of foreign-born homeowners has increased each decade, rising from 0.8 million new immigrant homeowners in the United States during 1980-1990, to 2.1 million new immigrant homeowners in 1990– 2000, to 2.4 million in 2000–2010. That number is projected to rise further to 2.8 million in the current decade (2010– 2020), according to the MBA report.

Foreign-national borrowers who qualify for Residential Finance’s new mortgage program can chose from both fixed-rate and adjustable rate mortgages with terms that compare favorably to those available to domestic borrowers, according to Fowler. The program allows a loan-to-value ratio (LTV) of up to 65 percent, and places a maximum cap on borrowing of $600,000 per property for both home purchase loans and refinances. Single-family homes, condominiums, townhouses and second homes are all eligible.

“Due to the unique qualifying features of these loans, each is manually underwritten by Residential Finance,” Fowler said. “There are no pre-payment penalties and the program permits borrowers to be self-employed.”

Benedict Group Adds Series of Data Bridges

Benedict Group Inc. (BGI) has announced that it has added a series of automated data bridges between its LOANS! For .Net loan servicing software and the CRE Loan Origination and Asset Management software of The Rockport Group. The new bridges provide support for sharing application, loan, occupancy, lease, and financial statement data between the two systems, and are available with the standard LOANS! For .Net software. Once the links are activated, all of the data brought over from Rockport can be viewed on LOANS! For .Net’s screens and reports and accessed with LOANS! For .Net’s integrated report writer and data exporter.

BGI integrated the two systems at the request of one of its larger clients, an $8 billion commercial lender.

“One of our ongoing goals is to make our LOANS! For .Net software as open as possible, so we’ve been adding a series of automated bridges across a wide range of areas. We feel this Rockport integration will be especially helpful for institutional lenders who require the sophistication of both Rockport’s origination software and our servicing software” said Tom Scott, Benedict Group’s director of business development.

Genworth Releases New Rates and Comparisons Tool Genworth U.S. Mortgage Insurance (USMI) has announced the release of an enhanced, easy to use mortgage insurance (MI) rates and comparisons tool that can increase loan officer and processor productivity and let them quickly compare Genworth USMI rates or obtain a rate quote, so lenders can process loans faster. The new simplified rates and comparisons tool offers more features and functionality than versions currently available from other private mortgage insurance providers.

“The improved rates and comparisons tool offers customers the ease of use and robust features they want, and demonstrates Genworth USMI’s commitment to be their preferred business partner,” said Erika Stinson, digital channel product manager.

With the new tool, loan processors only need to complete five required fields to receive Genworth USMI mortgage insurance premium rates: loan amount; state; credit score; loan-to-value ratio; and loan interest rate.

Users are able to edit loan parameters from within the tool, saving time. Users also can create as many loan scenarios as needed to evaluate how adjusting certain factors will affect the borrower’s payment, and email results without a login, all from within the tool.

The tool offers users an easy way to compare the cost of Genworth MI against insurance coverage from the Federal Housing Administration (FHA), which is especially useful in light of recent FHA premium increases that now make Genworth mortgage insurance cheaper than comparable FHA insurance.

Carrington Pushes Efficiency With New 30Day Loan Closing Offering

The Wholesale Lending Division of Carrington Mortgage Services LLC has announced a new program offering 30day loan closings for borrowers looking to purchase properties. Designed to significantly reduce closing times compared to industry averages, the new program applies to FHA and conventional purchase loans. Effective immediately, Carrington commits to process any qualifying loan from the time that a file is submitted to underwriting to the time that it funds within 30 calendar days, or the company will apply a closing credit to the loan at the time of closing.

In 2012, the mortgage industry’s average time to close a purchase loan was 46 days, while the average time to close a refinance loan was 49 days

according to an Ellie Mae Origination Insight Report. In many cases, processing can take longer—up to 60-90 days.

Carrington’s 30-day closing program provides consumers, brokers and their realtor partners a shorter, more predictable timeline to secure financing, giving them a competitive edge in a tight market. Expedited processing allows brokers to be compensated faster and helps alleviate concern among real estate agents over sales lost due to a homebuyer’s inability to close in a timely manner.

“We’re proud to offer shorter turn times through our wholesale lending division and to bolster broker, agent and consumer confidence with this 30day closing commitment,” said Ray Brousseau, executive vice president of Carrington Mortgage Services LLC’s Mortgage Lending Division. “Over the past year, we’ve worked diligently toward refining and expanding our operational processes to deliver maximum efficiency and give wholesale brokers an edge over traditional retail lending institutions. By redefining the way we do business and continuing to challenge industry norms, Carrington is well-positioned as the go-to lender for anyone looking to close quality loans expeditiously.”

The new program compliments Carrington’s ongoing “FHA Streamline Ready to Close” program, which offers closings on eligible refinance loans any day of the month with no additional interest cost to the borrower regardless of when the loan is funded. Enabling borrowers to close on their own schedule allows them to take advantage of possible lower rates and expedites compensation timelines for brokers.

Leads360 Releases CloudBased CRM Solution

Leads360 Express. “Leads360 Express is not your typical sales CRM solution. We have taken our research and the powerful sales automation workflows used by leading sales organizations and made them accessible and easy to use for even the smallest of companies. Almost anyone can be up and running with Leads360 Express in 10 minutes and will start seeing improvements in productivity and lead conversion from day one.”

LPS Develops New Model to Order MI Lender Processing Services Inc. (LPS) has announced the launch of new

mortgage insurance (MI) products through the LPS Loan Quality Gateway.

Customers may now place automated orders for MI products for reduced processing time and fewer manual errors.

The LPS Loan Quality Gateway is an open technology platform that provides the integrations, data management, decisioning and workflow management required for current and emerging loan quality programs through a 24/7 data exchange connected to more than 15,000 of the mortgage industry’s service and solution providers. Through this platform, lenders can now access new MI products through LPS to order rate quotes; eligibility and rate quote checks; and MI Certificates. The LPS Loan Quality Gateway is a strategic com-

ponent of LPS’ origination technology growth initiative.

“This new enhancement offers lenders more accurate, standardized and efficient selection of mortgage insurance, while helping them better meet the challenges of new regulations and requirements for overall loan quality,” said LPS Chief Operating Officer Dan Scheuble. “The new MI products offered through LPS are one more way we can help lenders and service providers work together toward a more transparent, data-centric loan origination process.”

Currently, several leading MI carriers including United Guaranty, MGIC, continued on page 36

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Leads360 has announced the availability of Leads360 Express, a cloud-based CRM software solution designed to help small mortgage companies and loan officers improve their sales lead conversion rates and grow their revenues.

Leads360 Express empowers small sales teams and loan officers to sell and close deals just as effectively as much larger competitors. Leads360 Express enables companies to capture and track leads coming from any source; instantly distribute and prioritize leads to sales reps; respond immediately to leads with one-click phone dialing; stay topof-mind with borrowers with statustriggered e-mails; and analyze lead conversion rates and sales campaign effectiveness. Leads360 Express also integrates with third-party lead sources and is accessible from anywhere, even by mobile phone.

“Small businesses often struggle with CRM software that is over-complicated and hard to set up, making it virtually useless to anyone with limited tech expertise or IT resources,” said Corey Brundage, general manager for

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Genworth, Essent Guaranty, Inc. and Radian, among others are integrated with the LPS Loan Quality Gateway, offering lenders one convenient source for MI carrier integrations. By providing accurate, upto-date rate and renewal information directly from each MI carrier, LPS’ MI products help lenders eliminate the cumbersome process of maintaining internal mortgage insurance rate tables, while reducing data-entry time and errors through the systemic delivery of data and documents. The LPS Loan Quality Gateway can also manage a lender’s mortgage insurance vendor compliance rules, including best-fit formulas, and provide continuous access to MI carriers throughout the mortgage life cycle.

Offered by RealEC Technologies, an LPS subsidiary that powers the LPS Loan Quality Gateway, the new MI products expand the loan origination services now available on the LPS Loan Quality Gateway, including appraisals; automated valuation models (AVMs); title insurance; closing services; flood insurance; fee services; verifications of income, employment and identity; fraud prevention tools; loan quality analytics; and Valuation Insight, an appraisal evaluation tool that quickly identifies the overall quality of an appraisal.

MCS Expands Its Slate of Mobile Offerings

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Mortgage Contracting Services LLC (MCS) has announced an expansion of its mobile technology toolset. These additional tools will provide vendors with several mobile field services applications that work across multiple devices and systems.

“We understand that information can be transmitted more accurately and timely to our clients and their investors with the use of mobile devices,” said Caroline Reaves, chief executive officer of MCS. “By leveraging enhancements in mobile technology, it allows us to receive real-time information, which ultimately helps us protect and preserve properties and communities across the nation.”

The effort is twofold: MCS has developed MCS Mobility, a proprietary mobile photo management tool that is integrated solely with MCS360, a Web-based technology platform used by MCS along with its clients and vendors to manage inspections, property preservations and REO services.

Additionally, MCS is announcing that Mobile Business Concepts has been named a preferred MCS vendor and will offer an MCS Web services integrated version of its mobile application, REO Photo.

MCS Mobility is HTML5-based and made freely available to MCS vendors. It enables vendors to upload photos to the cloud and to MCS360 directly from their mobile device. This reduces the time needed to process orders while also improving quality by providing real-time photo review capabilities. This application is in limited release to select MCS vendors and will soon

be available to its entire vendor network.

REO Photo enables jobs to be assigned to contractors, then tracked as tasks are fulfilled and documented with the inclusion of photos. Every job profile, sorted by status, displays property condition details, location by address and work orders with their associated deadlines. Vendor photos are stamped with the date and time, and can be shared in real time to document progress before, during and after each service. Vendors have the ability to obtain directions to each property and report issues via phone or email without leaving the app. MCS vendors may download subscription-based REO Photo on iTunes and in the App Store.

Specialized Business Software Improves Docunym Document Management Solution

Specialized Business Software has enhanced its Web-based Docunym document management and workflow solution to enable mortgage servicers to manage and retrieve loan documents faster. The new enhancements enable users to quickly retrieve loan documents by loan numbers using a minimal number of clicks. This eliminates the traditional requirement of users having to search multiple files to retrieve a specific document. Users can also train the system to automatically identify and organize incoming loan documents into electronic folders according to specific criteria, such as borrowers’ names and loan number, eliminating the need for users to key this information into the system.

“Mortgage servicers need to be as efficient as possible in order to compete effectively in today’s marketplace, which means reducing the time it takes to manage information and documents,” said Steve Wiser, president and founder of Specialized Business Software. “Our Docunym solution provides mortgage servicers with a tool to go paperless and operate more efficiently than competitors. This increases the speed and efficiency in which tasks are completed.”

HSH.com Launches Two Consumer-Oriented Mortgage Calculators HSH.com, a publisher of mortgage and consumer loan information, has launched two unique calculators for homeowners who are unable to refinance at today’s low interest rates, but who want to achieve a similar savings. By calculating an appropriate additional payment to their monthly mortgage, these two calculators, LowerRate and PreFi, will help borrowers achieve savings as if they had refinanced continued on page 40

Transferring Appraisals: Helping Lenders and Brokers Understand How Standards and Rules Intersect

By Richard L. Borges II, MAI, SRA

Seven assignment elements set the parameters for the assignment and define the problem to be solved. The identification of these seven elements comprise a significant portion of Standard 1 in USPAP. The valuation process begins with establishing: n n n n

Client; Other intended users; Intended use; Purpose (type of value, in an appraisal assignment);

n Effective date (date of value) n Relevant property characteristics; and n Assignment conditions.

If any one of the assignment elements change, the appraiser needs to stop and re-think the assignment. Many clients and appraisers incorrectly assume that a brand new report will be required, which isn’t the case. Appraisers need to carefully explain the new details to the client to avoid any surprises. continued on page 39

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Although appraisers and lenders work closely together, the Appraisal Institute believes that there is still some confusion in the marketplace over when, if and how appraisals can be transferred.

According to the Appraisal Standards Board’s Advisory Opinion 26, after an assignment has been completed and the report has been delivered, appraisers are sometimes asked to readdress (transfer) the report to another party. The Uniform Standards of Professional Appraisal Practice states that once a report has been prepared for a named client(s), and any other identified intended users and for an identified intended use the appraiser cannot readdress (transfer) the report to another party.

To illustrate this point, take the example of an appraiser being engaged by Client A to appraise a property. The appraiser delivered the appraisal report to Client A. The client has decided not to pursue the transaction that generated the need for the appraisal report. The appraiser is then contacted by Client B who requests that the original report be readdressed by replacing Client A’s name with Client B’s name in the report. This is unacceptable, according to USPAP’s Advisory Opinion 26. Simply changing the client name on the report cannot change or replace the original appraiser-client relationship that was established with Client A. When an appraiser identifies the client, other intended users and intended use at the beginning of an appraisal assignment, the appraiser thereby obligates him/herself to meet the needs of those parties for that use. The appraiser’s scope of work must be appropriate for that intended use, and the level of detail in the appraisal report must be sufficient to enable the client and other intended users to understand that report. If a report is simply transferred to another party, that report might not be appropriate for that party’s use. An appraiser is hired to provide a professional opinion of value for a particular circumstance, not to prepare a report that can be used by anyone for any purpose.

The ASB addresses another common issue in its Advisory Opinion 27; appraisers who have previously appraised a property are asked by a different party to appraise the same property. In some instances this request is made shortly after the first appraisal; in others, it could be months or years later. According to USPAP, accepting the assignment from the subsequent prospective client is not prohibited provided appropriate disclosure is made to the client prior to being engaged, and any existing confidential information is handled properly. If a prior assignment included any confidential information, its disclosure to a

different client or intended user without the prior client’s permission would violate the Ethics Rule if the information were still classified as confidential information.

Litigation appraisals are also addressed

by Advisory Opinion 27. Sometimes appraisers perform appraisals for a client involved in litigation and then are asked to appraise the same property for the opposing party. This is not prohibited by USPAP assuming that appropriate disclosure is made to the client and confidential information is handled correctly.

USA CARES MORTGAGE HEROES

USA Cares Mortgage Heroes: Joann Muncey, USA Cares

By Jennifer Robinson

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USA Cares recently named Joann Muncey as director of Housing and Emergency Assistance. This new role expands her responsibilities from managing the financial assistance requests of post 9-11 veterans to managing and facilitating the USA Cares Certified Military Housing Specialist Course. This important course highlights the unique lifestyle of our military men and women. Joann is a former military spouse who has worked with USA Cares for more than five years, in various roles supporting military families.

“Growing up in a military family can be a curse because you are always moving and starting over, but it can also be a blessing,” said Joann. “Now, I can draw on my experiences to help our nation’s newest veterans get through their challenges.”

Currently, Joann is working with Navy Federal Credit Union in association with Freddie Mac through a partnership called, “Operation Home Run.” The goal of the partnership is to certify real estate professionals across military markets, ultimately helping veterans and their families find the Joann Muncey home of their dreams. The course offers many benefits to those who are not familiar with military family life. The objectives of the course are:

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To provide insight to military family life Present an overview of military structure and rank To introduce common military language Share marketing tips to reach military families Provide ways to prevent foreclosure Certify by granting 10 CEUs from the Association of Financial Counseling Planning & Education (AFCPE)

For those wishing to take advantage of the course online, there is a $25 registration fee. Other options to take the course are through company-sponsored Webinars and “live events” such as Operation Home Run. Registrants are certified upon successful completion of the exam and will be listed in our online search map. For information about the course, e-mail joann@usacares.org or visit www.usacares.org.

Be a Mortgage Hero! This recognition is free to Certified Military Housing Specialists. Take the FREE Certified Military Housing Specialist course offered online by USA Cares and tell us how you are “Helping those who defend our homes, preserve their own.” Jennifer Robinson is the vice president of programs and services at USA Cares, where she has worked since 2007. She may be reached by phone at (800) 773-0387, ext. 115 or e-mail jrobinson@usacares.org.

three origination strategies with every potential borrower that doesn’t qualify today because one day they might.

Fourth, get your process mobile. While I don’t see home loan borrowers filling out entire 1003s on a smartphone, I do see more consumers than ever leaning on these devices for just about everything. A lender can pre-qualify a borrower for a loan through more traditional methods and then hold that data until the borrower finds the home they want to buy. This is likely to happen out in the field somewhere, perhaps an open house. When they find it, the borrower can connect via mobile device and move the process forward. Mobile consumer technology is a huge trend. Ignore it at your own risk.

Finally, work every lead source you’ve got. Too many lenders think that Internet leads are the only leads. They forget about

fil ing the void

referrals from business associates and past customers, as well as Facebook, Twitter and other social media outlets. Traditional media is still important as is direct mail and other consumer direct marketing. High conversion rates are key to your success, but so is loading your pipeline with plenty of leads, so find them everywhere you can.

If this looks like I found an old article from 1995 and dusted it off, well, that’s just a coincidence. These ideas will serve you well in the mortgage market we expect to be working in for the remainder of 2013 and the foreseeable future. Use them well.

Don Kracl is vice president of mortgage products for Mortech Inc., a Zillow business. Don may be reached by e-mail at don.kracl@mortech-inc.com.

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The benefits of aggregation In general, the tools and solutions developed for the mortgage industry can be focused and deployed in an aggregated or disaggregated manner. A disaggregated approach would place the tool usage within the micro environment of the entity.

The aggregated approach reaches across wide segments and delivers a product or service that can be used by many or all within a broad spectrum, universally, in a standard, consistent manner.

A central, aggregated model has been proven out previously by two pioneering initiatives. The Mortgage Electronic Registration System (MERS) and the Nationwide Mortgage Licensing System & Registry (NMLS) both have established and clearly demonstrated the benefits of this model. Both of these initiatives provide widespread, universal, and standard information in a one-stop shopping model.

The architects of the new closing agent risk management solution understood the widespread benefits of aggregation and implemented a solution where one central database can house the risk analyses and characterizations of all the closing agents across the industry. This includes individuals and entities allowing lenders who have not transitioned to an individually-focused model to at minimum understand the risk characteristics of the closing agent entities with which they may want to engage for the closing transaction.

The solution is also largely agnostic of the type of closing professional and can handle all according to state requirements including attorneys, settlement agents, escrow agents, title producer/agents and notaries.

Conclusion Sponsored Editorial

continued from page 15

By approaching the problem with a holistic solution, the entire mortgage industry benefits. The inclusion of each closing

agent in an aggregated and central database provides one stop shopping for all consumers of this solution. Closing agents also benefit by the centralized, aggregated model in two significant ways. They only need execute the application process once and as a result are visible universally for those in searching for a low risk provider for the closing transaction.

Given the mortgage marketplace and the industry dynamics, the mortgage technology may never be viewed as the leaders of global technology. However, as the industry approaches the proposition of disruptive change, the greater potential for real changes of consequence to the application and functionality to all interested parties.

There are some global technology trends that clearly, when leveraged in the mortgage industry, could have disruptive impacts. Mobility and delivery of new functionality to the user anytime, anywhere, and on any device is an example.

Social/business networking and the ramifications of Web 3.0 should have some exciting developments for the industry and consumer. Related to this, the continuing evolution of big data and advanced analytics will result in the more forward-thinking and creative companies making leaps ahead in some yet to be determined ways.

There are plenty of other emerging technology trends but the hope is that risk management and fraud mitigation will advance correspondingly and those responsible for establishing creative visions will avail these technologies to the benefits of the industry.

Todd Hollosi is CIO and CTO for Secure Settlements Inc., a national risk management and technology company focused on the closing dimension of the loan origination lifecycle. He may be reached by phone at (973) 434-7409 or e-mail thollosi@securesettlements.com.

transferring appraisals With regard to updating a prior assignment, updates are commonly misunderstood by both appraisers and their clients. For many clients, “update� means faster and cheaper. This is not necessarily the case.

In an update, the effective date of value in the new assignment is different from the effective date of value in the prior assignment, so the appraiser will need to consider market data and changes in market conditions that have transpired since the prior assignment.

In the past, loan originators have requested that appraisers update appraisals prepared for other institutions for free.

Needless to say, there is additional liability created for the appraiser when performing work for a new client. Appraisers will likely charge commensurately for the additional time, expense and liability to perform an appraisal update service, which is essentially a new assignment.

Let’s consider a couple of other examples where lenders might have misconceptions about the valuation process. n Client B asks the appraiser for a reliance letter regarding an appraisal that was prepared for Client A. The appraiser cannot accept this request. n A letter giving a party permission to rely on an appraisal is not appropriate. This would amount to adding intended

continued from page 37

users after the fact. USPAP requires that intended users be identified at the time of the assignment, not after it’s completed. If Client B wants to rely on the appraiser’s opinion of value, they should hire the appraiser for a new assignment. n Client B asks the appraiser for a copy of the appraisal report that was prepared for Client A. n The appraiser can give Client B a copy of Client A’s report only if authorized to do so by Client A. Giving Client B a copy does not make Client B a client or an intended user. If after obtaining Client A’s authorization the appraiser gives Client B a copy, the appraiser should inform Client A of this.

It is important for lenders and appraisers to note that there are a couple of new USPAP requirements that mandate certain actions on the part of the appraiser: n Tell the potential client (prior to accepting the assignment) if s/he has been involved in any service relating to the property in the past three years; and n Include the following statement, edited appropriately, in the certification to the report: “I have performed no (or the specified) serv-

ices, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.�

While it’s important for lenders and brokers to be more familiar with the rules and standards that appraisers must follow, it’s also worth exploring Fannie Mae and Freddie Mac’s rules relative to accepting original appraisals (https://www.fanniemae.com/content/faq/appraiser-independence-requirements-faqs.pdf), (http://www.freddiemac.com/singlefamily/appraiser_independence_faq.html#37 ) via the following examples. This is further covered in the Interagency Appraisal and Evaluation Guidelines (http://www.fdic.gov/ regulations/laws/rules/5000-4800.html). u A mortgage broker submits a loan to Lender A, who orders an appraisal. The broker later decides to submit the loan to Lender B because Lender B offers better terms, or for another reason.

Assuming the mortgage broker has no control over, or involvement in the appraisal assignment, may the appraisal obtained by Lender A be used by Lender B? n Yes. A lender may accept an appraisal from a different lender if that appraisal complies with Appraiser Independence Requirements. In this scenario, since Lender A is the original lender, Lender A must be named as the client on the appraisal report.Â

u Can lenders accept appraisals transferred from another lender? n A lender may accept an appraisal from a different lender if the appraisal is obtained in a manner consistent with AIR, and the lender receiving the transferred appraisal determines that the appraisal conforms to its own requirements and is otherwise acceptable. u Can lenders accept an appraisal from an AMC specifically authorized by a different lender to act on its behalf? n Yes. If the lender receiving the transferred appraisal determines the appraisal was obtained in a manner consistent with AIR that the appraisal conforms to the lender’s requirements and is otherwise acceptable. u May an appraiser update an appraisal for another lender? n Yes. An appraiser is permitted to perform an update of an appraisal for another lender. u What documentation is required during an appraisal transfer to demonstrate that the lender transferring the appraisal to another lender is complying with AIR? n Each lender must develop its own documentation requirements to ensure compliance with AIR, based on its business model and processes. u AIR allows Lender B to originate a continued on page 58

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Markets may be volatile, but there’s one thing you can always count on, the total commitment Loyalty, continuity of service and our dedication to protecting the of our Mortgage Team. e integrity of our relationships are just a few of the things that set us apart.

Ridgewood understands the needs of its communities and develops speciďŹ c product beneďŹ ts to meet those needs.

heard on the street

n Phyllis Cheong and Pattie WainrightHosti have joined Fairway Independent Mortgage as senior loan officers.

continued from page 10

n

n Residential Finance Corporation has hired Sonya Gray as the director of organizational development and Green River Capital LLC (GRC) has has named David Stein as president announced the formation of a surof its retail branch division. veillance division to address the risks surrounding the rapidly expanding REO-to-rental market. In collaboration with its parent company, Clayton Holdings, GRC is leveraging Clayton’s sophisticated technology and years of experience in credit risk management to customize product offerings targeting all stakeholders n LenderLive Network Inc. has in the REO-to-rental markets, includannounced the additions of Brian ing investors, lenders, real estate Fitzgerald as West Coast regional investment trusts (REIT) and other account manager and Donna West as parties involved in the securitization Southeast regional account manager. of portfolios.

“Rating agencies and institutional lenders have identified the property management function as an area of considerable credit risk related to the financing and securitization of REO-to-rental portfolios,” said Lorenz Schwarz, COO of Green River Capital. “GRC’s surveillance division monitors various risk components associated with “scattered-site” residential property management and provides our clients independent, third-party assessments of portfolio and property management performance, comparing this to underwritten assumptions and actual market n Lender Processing Services Inc. (LPS) performance.” has announced the appointment of Dr. This expansion in services follows John Snow, former U.S. Secretary of the the launch of GRC’s component servTreasury, to its board of directors. icing division, established in n Dan Longman of Priority Lending September 2012 to provide cushas received his Certified Residential tomized services to investors and Mortgage Specialist (CRMS) designalenders entering the REO-to-rental tion from NAMB—The Association market. The component servicing of Mortgage Professionals. division provides an end-to-end suite n Hammerhouse LLC has announced of services to facilitate property the hiring of Julie Ann Holmes and sourcing, acquisition and collateral Beatriz Camacho as strategic growth underwriting. partners.

FITZGERALD

WEST

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CHEONG

ZEITZ

n WCS Lending has announced the addition of Ivan Choi as head of affinity relations.

STEIN

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n Real Estate Mortgage Network Inc. (REMN) has promoted Jamie Zeitz to the newly created position of Florida renovation manager.

CHOI

Green River Capital Introduces New Division to Monitor REO-to-Rental Market

Mortgage Professionals to Watch

n

WAINRIGHT-HOSTI

n Access to and delivery of RentPointe information will flow through Equator’s existing interface, creating a seamless experience for the end-user.

“RentPointe was built from the ground up to meet our needs for managing geographically-dispersed portfolios of single-family rental units,” said Carrington Holding Company CEO Bruce Rose. “Over the past seven years, we have used the solution to optimize rental collections, provide in-depth analytics and effectively manage a portfolio of nearly 20,000 U.S. properties. Understanding the impact a solution such as this can have on the industry, we are pleased to be able to offer RentPointe to the growing market for single-family rentals.”

n

n Mortgage Master has announced the hiring of Karen Menza as regional operations manager to lead the company’s Midwest operation team. n Steven Rossman has joined the Philadelphia branch of AnnieMac Home Mortgage. n Leads360 has announced the addition of mortgage industry veteran Kelly Booth as director of the company’s mortgage unit. n GMH Mortgage Services LLC has announced the addition of Janine Ranski as their new regional sales manager and assistant vice president for the New Jersey, New York and Pennsylvania regions, and the hiring of John Minigiello as new regional sales manager and assistant vice president for the New England region. n Vericrest Financial Inc. has announced that Joe Anderson has been appointed chairman and chief executive officer. n Norcom Mortgage has announced the

new to market

n

n

hiring of Frank Haran as vice president of business and development.

LoanSifter Inc. has announced the hiring of Sue Stewart as vice president of client services.

Indecomm Global Services has named Michael Frotten director of business development for the lending solutions group.

Capsilon has announced that Jim Sciarra has joined its executive team as vice president of support and services, where he is responsible for building successful customer service and technology support operations.

Caliber Funding LLC has announced that it has appointed Tammy Richards as its new senior vice president of operations.

Stonegate Mortgage Corporation has announced the hiring of Robert Meachum as executive vice president of servicing.

Beech Street Capital LLC has named Carolyn Whatley as its new senior vice president of originations, supporting the firm’s FHA business nationwide.

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

continued from page 36

to today’s rates.

“If you can’t refinance your mortgage but can afford to pay some additional money each month, that prepayment might save you as much as an actual refinance,” said Keith Gumbinger, vice president of HSH.com. “It’s technical, but by prepaying the loan principal just a little each month, borrowers lower their effective interest rate and can create savings equivalent to those possible with an actual refinance.”

With these new tools, HSH hopes to introduce homeowners to the concept of a ‘prepayment refinance.’ HSH.com’s PreFi calculator will tell borrowers with a specific dollar amount available to devote to mortgage prepayment exactly how much they will save and the effective interest rate they will achieve.

The PreFi calculator is a perfect tool for homeowners with older loans with only a few years of payments left; small-balance loans; homeowners who refinanced already but want to achieve rock-bottom interest rate savings; and homeowners who cannot refinance due to today’s stiffer underwriting standards.

“The PreFi calculator allows users to

input the additional amount they can send in each month with their regular mortgage payment and it will report the effective interest rate a borrower can achieve with that extra payment, their total interest savings and more,” notes Gumbinger.

The LowerRate prepayment calculator was designed for borrowers who want to achieve a specific, lower interest rate than their current mortgage rate.

Your turn National Mortgage Professional Magazine invites you to submit any information promoting new “niche” loan programs, new products or any other announcement related to the introduction of a new program, to the attention of: New to Market column Phone #: (516) 409-5555 E-mail: newsroom@nmpmediacorp.com Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

Mortgage Lead Buying Guide

BY JOSHUA CONKLIN If you are considering purchasing mortgage leads, here are some tips you should know before working with a lead vendor and things you should consider when developing your campaign. n What makes a quality mortgage lead? n How to develop a successful campaign that will give you a good ROI n Managing your campaign and converting applications into closed loans n Targeting qualified and motivated prospects

A complete guide to online mortgage leads The Internet has revolutionized the way consumer’s evaluate, compare and choose mortgage products and services.

Every day, more and more mortgage shoppers utilize the Internet to study and purchase home mortgages. As a mortgage broker, you must recognize this industry shift and learn to utilize this tool. Each day, thousands of mortgage seekers fill out forms on thousands of mortgage leads generation Web sites requesting more information on mortgage loans or quotes from mortgage lenders. These mortgage leads are made available to you by an array of internet mortgage leads generation brokers. The big question is … are these Internet mortgage leads worth your

effort and money? Will the return on investment be there? In this article, we will discuss the in and outs, do and don’ts and questions you should ask when purchasing Internet mortgage leads. Careful consideration must be given to purchasing internet mortgage leads, including: n What makes a quality Internet mortgage lead? n What you should expect from an Internet mortgage lead? n Closing the sale and converting more leads to loans n Questions to ask before purchasing Internet mortgage leads

Quality Internet mortgage leads What makes a quality internet mortgage lead? A lead that closes. Not necessarily. We all know that not all leads will close. In fact, the industry standard is around six percent so if you are able to get a seven to 12 percent conversion ratio on an Internet lead campaign that would be a success. I consider a mortgage lead to be a high-quality lead if it meets the following criteria: n The lead is fresh: It is critical to find out how quickly mortgage lead brokers turns the lead around and delivers it to you. Best case scenario, the lead is delivered instantly (a real-time mortgage

lead) and it is an exclusive mortgage lead (only delivered to you). At a minimum, you want to make sure the lead is delivered in less than 24 hours. Otherwise, the lead is less valuable and should not be sold at the same premium as a realtime mortgage lead. The more time that passes from the time the user requested information, the less your chances of closing the sale to this lead. I’ve seen many cases where users deny even requesting information. The quicker you contact them, the less likely this is to happen. Hit while the iron is hot. n The lead is accurate: One of the biggest challenges mortgage lead generation companies face is obtaining accurate data from users. No matter what type of technology a mortgage lead company claims to have, no company can completely stop users from entering inaccurate data. A recent example of technology to improve data accuracy is telephone number/location verification. Companies use software to make sure the area code in the phone number matches the state. This is a nice feature because chances are if a user is going to enter a bogus phone number they will not enter the correct area code. What you must do is evaluate mortgage lead generation companies

and decide who has the best solution to fit your needs. n The lead is a true lead: What do I mean by a true lead? I consider a true lead to be a lead that was actually generated by someone that is truly interested in obtaining a mortgage. You have to be careful that the lead is not an ‘Incentivized Lead’. For those of you that aren’t familiar with this new term I will explain. Many Web sites today offer users incentives to fill out forms. In exchange for filling out these forms users are given points towards the purchase of merchandise or even money. Make sure you stay away from companies that have anything to do with incentivized leads.

These leads are worthless

What you should expect from an Internet mortgage lead This is simple. Don’t set your expectations too high. Like I said earlier, it would be great to close at a rate of a seven to 12 percent. Remember that you are buying leads, not sales. Expect accurate data 75 percent of the time and try to close at least eight percent of these leads and you should be doing very well for yourself. continued on page 58

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How Leaders Can Use Technology to Connect With Their Followers

By David Lykken

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To understand how leaders can use the latest technology to connect with their followers, a brief review of the history of technology is in order. One of the biggest misconceptions about technology is the notion that it is new. Contrary to popular opinion, technology predates the Internet. Technology predates the industrial revolution. Technology predates our even keeping records of history. Technology has existed for as long as civilization itself—perhaps even longer. As long as there have been ways of doing things, there have been people searching for ways to do those things

better. That, at its very core, is what technology is—improvement upon existing conditions.

Throughout history, technology has been used for many purposes: Industry, war, travel, and so on. What I would like to deal with in this article is one particular breed of technology: Communication technology. The first known form of human communication was oral. People told each other stories and relied on communal memory and shared culture to keep them alive.

Soon, writing systems were developed, and the oral traditions became more

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30,000 downloads per permanent. In 1450, week. We live in an Johannes Guttenberg was unprecedented time in credited with bringing us history for a business the printing press. Then, leader to have the kind of written communication reach at his disposal. Yet was able to be mass-prothe Internet has made it duced. In the late 1800s, possible for me to connect radio became a means of with thousands of people mass-producing oral comwho want to hear what I munication. Then, in the have to say. I would have early 1900s, television to have been out of my made it possible to scale mind to turn down such audio/visual communica“Leaders in the 21st an opportunity. tion. Finally, our latest century who are I have had amazing iteration of the evolution not using the opportunities to develop in communication techcommunication my leadership qualities nology, the Internet has technologies of the through “Lykken on magnified communication Internet to connect Lending.” I have had conin ways we would have with their followers are versations with listeners never thought possible. sorely missing out.” before and after the There are two critical show. I have been feafactors that separate the Internet from the communication tech- tured on national television. I have connologies that precede it. First, the nected with other professionals with Internet is interactive. In real-time, the whom I’ve had amazing opportunities message sender and receiver can com- to do great work. And it’s all because I municate back-and-forth. This can be decided to tap into the existing comdone via text, audio, and video—all munication technology to reach greater communication platforms of the past. audiences.

What communication technologies Perhaps more importantly, though, the Internet has an unbelievably low barri- on the Internet have you used to coner to entry. The cost of using the nect with your audience? And, by audiInternet to communicate with audi- ence, I mean your employees, your cusences is next to nothing. Tools that were tomers, and your colleagues. Your only available in the past to depart- employees need to hear from you in ments with hefty budgets are now avail- order to be inspired to do the work that able to pretty much everyone. Nothing brings in customers. Your customers is free, of course, but the Internet is just need to hear from you in order to be convinced that yours is the appropriate about as free as it gets.

Leaders in the 21st century who are company with whom they should be not using the communication technolo- doing business. Your colleagues need to gies of the Internet to connect with hear from you in order to get ideas on their followers are sorely missing out. how they themselves can grow profesThose of us who still think that social sionally. You have an infinite amount media, for example, is a fad of youth of platforms at your disposal to put culture need to start seeing it for what it your leadership into action and inspire is—the next step in the evolution of those around you. Are you using any of human communication. We can’t dig them?

Are you using “Podcasts?” A podcast, our heels in the dirt and refuse to move without getting too technical, is really forward while the rest of the world embraces these new technologies. If just another word for an Internet radio we’re to be effective communicators program like I’ve just subscribed. going into the future, we must be will- People can subscribe to podcasts so that, when you publish a new one, they ing to learn.

I have found a tremendous amount of receive it in their libraries. There are no success in using Internet radio as a rules as far as content or length. You method of reaching my audience. For can make a podcast about changes in several years now, I have conducted the the housing market for your customers weekly “Lykken on Lending” broadcast or a podcast about customer service or for mortgage bankers. People have been sales for your employees. You can featuning in to the broadcast from all over ture guests and have an hour-long diathe world, and I’ve been getting 25,000 to logue, or you can give a 10 minute solil-

By Kerry Elam Arbinger Institute, it Who do you think of as defines being in the box pivotal leaders from the as, “having self-deceppast? Who presently tion–the inability to see stands out? What qualithat one has a problem ties do these leaders posand that everyone has a sess? Who has been most problem.” By taking influential to you as a accountability for each leader in your career? situation versus blaming By asking these quesothers, you promote tions, you will determine everyone to work towards what resonates with you the collective good of the in regards to leadership. team, not individual Different qualities will “… as a team accomplishments. stand out for each of us. member, you have a n Treat others as peoLeaders such as Eleanor key role as your ple: This goes back to Roosevelt, Martin Luther actions and tone basic principles we King Jr., Mother Teresa will be followed learned as children, do and Thomas Jefferson all by others.” unto others as you would possess the quality of have them to you. Be leading from their heart. reasonable in all your dealings and They were not worried about what othensure you are looking at the big ers might think as they felt their focus picture. on others rights and feelings was most n Be self-aware: In the book, The important.

Psychology of Winning, self-awareAs Thomas Jefferson said, “The glow ness is the first trait mentioned. It of one warm thought is to me worth states, “Winners are more aware. more than money.” To lead, you must Winners are honest. Positive selfallow yourself to make decisions based awareness is self-honesty. You are a on how you feel and take into considwinner when what you think, what eration impacts decisions might have you feel, and what you do are nearon your employees. Being profitable is ly consistent.” Knowing how you important–yet focusing on your react and deal with situations can employee’s well-being is critical to provide insight and guide you to your success. making the best decisions and havThe remainder of this article will ing the most rewarding interactions provide some key principles incorpowith others. rating lessons learned from leadership n Take time to understand by listenbooks. ing to what others are saying: An activity to try is to pair up with a coPrinciples worker and each person takes turn Leading an organization or a team is a talking for three minutes. The perhuge responsibility as you have others son listening has to stay engaged career’s in your hands. Also, as a team without saying any words. Then, member, you have a key role as your you switch roles. You can gain a actions and tone will be followed by better understanding of the imporothers. It is just like when you sneeze tance of really listening. Many and someone sneezes, attitudes can be times, we interject with our examcontagious. When going through your ples and how we feel about a situaday, take a moment to see how you tion without fully listening and can improve upon implementing these understanding what the other perprinciples. Remember, it is a practice son has to say. as all we do in life … practice leads to n Compassion: Have compassion for perfection. what the other person may be n Accountability: In the book, continued on page 44 Leadership and Self-Deception by the

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

10, or e-mail dlykken@mortgagebankingsolutions.com or dlykken@mbsteam.com.

Leadership From the Heart

OHIO MORTGAGE PROFESSIONAL MAGAZINE

on Twitter? They talk to them. Don’t use social media just to broadcast your content. It’s called “social” media for a reason. Be social!

Are you using “Webinars?” Selling to consumers, you probably won’t have much use of Webinars for your customers. However, they can be great tools for motivating and educating your employees. A Webinar is a more visual, interactive conference call. You can show a presentation to your team and allow them to interact with you virtually while you’re showing it. You can also have video chats if you want the conference call to be more interactive.

Google has a really neat feature called “Hangouts” that allows up to ten people to video conference with one another for free.

By definition, leaders should be among the first ones to embrace new technologies. If they aren’t first, then they aren’t really leaders, are they?

Today more than ever, leaders have the opportunity to inspire their followers and maintain constant communication with their audiences. Technology isn’t going away. The only question is, will you be laggard or an early adopter?

Leaders are always on the cutting-edge.

Leaders get there first.

Who knows what’s next? The Internet has been a truly revolutionary leap for leaders using technology to communicate. We can only imagine what will surpass it in the future. But, for the time being, we must take advantage of the resources available to us.

Podcasting. Blogging. Sending newsletters. Interacting on social media.

Participating in Webinars. All of these are things we could be doing. Our followers are listening. The question is, “when are we going to pick up the platforms and start talking?”

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oquy containing your own advice. The key benefit of using a podcast to connect with your followers is that, unlike any other platform, its content can be consumed while they’re engaging in other activities. Your followers can listen to a podcast while they’re driving, writing, researching, or mowing grass.

Now, that’s accessibility!

Are you using “Blogs?” A blog is the most low-maintenance piece of Internet technology that you could possibly use to communicate with your audience. Essentially, a blog is simply an online journal to which people can subscribe. You can use a blog to convey your professional expertise to your customers or to provoke your employees to take action for your customers. A blog can generate interaction, and you can dialogue with your audience in the “comments” section. You can also use a blog to generate content that you will use to feed other platforms. And, due to the fresh textual content it provides, there is nothing better for generating search engine traffic to your Web site than a blog.

Are you using “E-Newsletters?” A blog is public. Anyone can find it. An email newsletter, like a traditional newsletter, only goes out to the people you send it to. The advantage of the enewsletter is that you have control over who receives it. Your e-mail lists, whether they are customers, prospects, or employees, represent the most direct influence you can have on your audience. A person’s e-mail inbox is private and they don’t grant access to it to just anyone. When you send out enewsletters, always have something valuable to say. Nobody likes spam.

But if you aren’t using e-mail to reach your audience, you’re missing out.

Most people aren’t going to check your blog every day. But everyone is going to check their e-mail.

Are you using “Social Media?” On social networking sites like Facebook, Twitter and LinkedIn, you can both create original content and use content from other platforms like your blog and your podcast. But the more important way of using social media is to interact with the content other people are sharing. Like, share and comment on their Facebook status updates. Participate in groups on LinkedIn. Reply to their tweets on Twitter. Want to know how people who aren’t celebrities get so many followers

leadership from the heart

times. Stop before you get caught up in operations at Actualize Consulting talking about others. Work as a team where her leadership training program continued from page 43 towards your common goals. Eleanor has successfully influenced a teamwork Roosevelt said, “Great minds discuss environment at some of the world’s going through on a personal level the market, the books below are more ideas; average minds discuss events; largest companies. She may be reached by phone at (703) 868-1506, e-mail or even dealing with stressful work based on the attitude you are bringing small minds discuss people.” kelam@actualizeconsulting.com or visit deadlines: Put yourself in the oth- to work. It goes back to the leaders ers shoes when interacting to see that stand out at the beginning. As Kerry Elam is the managing director of www.actualizeconsulting.com. their side.

Mother Teresa always said, “Let no one ever come to you without leaving betThese principles will help you to ter and happier.” That means anyone Book Key Lesson build an environment in which you that you come in counter with from Conscious Capitalism Written by the co-CEO of Whole Foods, the authors want to be a part of as you are allow- your barista to your star employee to share their model of the concept of Conscious ing your team to be accountable for your significant other.

Author Capitalism. It states, “Better leaders=Better world. their role and they will know you value John Mackey, Raj Sisodia The quality of our leaders affects the quality of our their efforts and they can be honest In summary, working towards a lives. Every good leader contributes in ways, big and with you as you will listen to what they common goal together as a team is the small, toward making the world a better place–one are saying. They key is to ensure every- key to success. You do not have to be day, one life, and one company at a time.” They also one knows you are truly listening and the boss to be a leader as we all make define the key qualities of a leader to be trust, care. contributions daily to those around us. accountability, caring, transparency, integrity, loyalBe mindful of judgments and take ty, and egalitarianism.

Books time to see the entire situation. Take There are many leadership books on accountability for your role at all 44

Leadership and Self-Deception, Getting Out of the Box Author The Arbinger Institute

Man’s Search for Meaning

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Author Viktor Frankl

The Power of Full Engagement Author Jim Loehr and Tony Schwartz

The Psychology of Winning Author Dr. Denis Waitley

A story that reminds us to be accountable for our actions and to treat people as people and understand what everyone is dealing with on a daily basis. You are the only one that makes you feel a certain way.

Nobody else makes you feel bad.

Individuals can get through any situation with a positive outlook. Frankl was in a Nazi concentration camp and was able to survive by maintaining an attitude of gratitude and positive thinking.

Provides examples of being fully engaged in all that you do. For instance, they denote the full engagement principles as being: • Managing energy, not time, is the key to high performance • Full engagement requires drawing on four separate, but related dimensions of energy: Physical, emotional, mental and spiritual • Because energy capacity diminishes with both overuse and underuse, we must learn to balance energy expenditure with intermittent energy renewal • To build capacity, we must push beyond our normal limits, training in the same systematic way that elite athletes do • Positive energy rituals–highly specific routines for managing energy–are the key to full engagement and sustained high performance.

Denotes the 10 qualities of a winner are positive self–awareness, esteem, control, motivation, expectancy, image, direction, discipline, dimension and projection.

Are Leaders Born or Can Someone be Taught to Lead?

By Les Acree

How do you find leaders in your organization?

At my company, we foster an environment that promotes leadership at all levels. Our production may have the best people and great plan for success but, without the team’s commitment and sense of urgency, we will not be successful. I am adamant that all of my managers bring a “sense of urgency” to our work. Whatever our strategy for success, there will be unforeseen obstacles that we must overcome as soon as possible! If there is a problem—we solve it—fast.

In our organization, the leaders usually find me. They stand out, they rise to the occasion and become invested in the success of a project. And they attract people to join them. For a leader’s vision to be successful, team members must buy into the leader long before they buy into the vision.

Jim Rohn said, “The challenge of leadership is to be strong, but not rude, be kind, but not weak, be bold, but not a bully, be thoughtful, but not lazy, be humble, but not timid, be proud, but not be arrogant, have humor, but without folly.”

Once you find a leader how do you keep them?

Those who are passionate about what they do appreciate working in an environment where they their ideas are encouraged and supported. When your team does well its ripple effect and the positive energy grows. Your team can sense that. They gain a sense of ownership and feel like a valued member of the company by participating and knowing their views are heard. Once you build Esprit de Corps, it’s more than a job, it’s a shared vision to a common goal people feel as if they are part of something and not just punching the clock.

Les Acree has served as a senior vice president of wholesale production since 1989. Les joined Freedom Mortgage in September of 2006 when Freedom acquired the mortgage assets and technology platform of Indiana-based Irwin Mortgage. He may be reached by e-mail at les.acree@freedommortgage.com.

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We have all heard the ence. I believe all good phrase, “He or she is a born leaders experience effecleader,” but I am not contive and ineffective leadervinced. For me, it’s like sayship. A true leader undering a military leader realstands the differences and izes his or her goals without then applies what works to ever being a soldier, studyhis or her personal style. I ing military history or have learned to be flexible attending the military acadbecause you are always emy. It could happen, but evaluating and need to it’s highly unlikely. quickly determine what’s I do not believe our life’s working and what’s not. work is predetermined for A true leader fosters a “Overall, mortgage us when we are born. I prepositive environment and loan quality has fer to think our experiences promotes participation improved very nicely and leadership at all levels and the opportunities we by two percent from create guide us toward our of the company. In today’s chosen professions. I do 88.34 percent in 2011 mortgage business, leadto 90.49 percent in believe that leaders know, ers must do their home2012 for the collective work, build their strategy at an early age, that they portfolios from all did not come into this and develop the team to mortgage loan types.” enable production. This world to sit on the bench … they came to play. works for all channels in To be an effective leader, we must the industry, whether it be retail, wholeunderstand what it means to follow and sale or correspondent, origination and the importance of what each member servicing. contributes to the team. Following is a Someone once said the only real trainlearning experience, especially under ing for leadership is leadership. Leaders sometimes often ineffective leadership. In arise in times of crisis. Most leaders have those cases, I recommend staying positive what I call the “Likeability Factor.” Years and remaining focused on producing ago, I found it difficult to find the good good work. Always be that team player and take away anything positive from who fully commits to a common goal. someone I did not like. I just could not get Half-hearted efforts eventually become past the fact that I did not like them. apparent. A good leader will acknowledge However, being a leader is not a popularthis and either inspire, redirect or elimi- ity contest. Any leader who says they have nate. no detractors either has not been a leader My first experience with great leader- for any length of time or he has not fulship was through athletics. My coach was filled his role as a leader. an effective communicator and had a clear vision for the team’s success. He What personality traits do you feel knew that having the right people in the are most important to be a leader? right place who were doing the right thing Leaders need to be strong. They cannot at the right time made for a great team. At run and hide from difficult decisions. that point in my life, I was keenly aware of They cannot avoid them. My least which of my team members were buying favorite decisions are the ones that not into the goal, versus those who were out only affect people’s careers, but also for themselves or just passing time. their families. In these situations, a These are just a few of the lessons from leader must accept the responsibility my experiences that have withstood the and move forward for the good of the test of time and have transcended into team. The best decision is not always both my personal and professional lives. clear, not always black and white. It The net is, however, you are exposed to may be the least unfavorable of the leadership and learn from their experi- available options.

At times, a leader has to summon the courage to buck market trends.

Several years ago, when the mortgage industry was flush with high-risk products, my company took a different path.

We trusted our instincts, “drew a line in the sand” and retreated from the “products of the day.” It was an incredibly challenging period for us, especially as we risked losing some of our top sales force.

Thankfully, most of the mortgage companies that did pull away from high-risk products before others were able to survive and many are now thriving.

Leaders never stop striving for improvement. They never settle for the status quo. I become anxious with the status quo. When change needs to happen, we assess the situation, look at it from different sides, come up with a plan and exert influence to make things happen.

Influence must be combined with integrity. For me, integrity means you are who you say you are and you do what you say you are going to do. This is what gives you the credibility necessary to have influence throughout the organization

Leading With Honor: Do You Have What it Takes?

By Lee Ellis

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Are you alarmed by the frequency of ethical scandals in recent years? No doubt, you have seen the headlines about Wall Street greed, but ethical problems are just as prevalent on Main Street where bookkeepers, purchasing agents, and business owners violate the trust that others have placed in them. Think of the headlines in recent years: A highly respected coach resigned for covering up NCAA violations by his players; a Congressman resigns for tawdry behavior; a religious leader cheated on his wife, another is accused of using his authority to fleece the flock; teachers changing students’ responses on standardized tests and administrators collaborated in the cover-up; a college inflated the average SAT score of their students to improve its image.

What is happening to our society?

Does anyone care about honorable leadership? What can you do about it?

What have others done that might guide those of us who seek to turn the tide in this onslaught against characterbased leadership?

It seems ironic that some of the best examples of leading with honor come from the POW camps of North Vietnam, an environment so lifethreatening that one might expect to

see frequent examples of self-centered, self-serving leadership. But when life and limb were on the line, these brave leaders chose honor rather than comfort, humiliation rather than cooperation with the enemy. Their courageous service can inspire and show us what is required to lead with honor. Let us look at some of the lessons they offer to us today.

Know yourself The POWs leaders were experienced and strong, yet they had no choice but to be humble. The enemy used torture and isolation to try to break their will and force them to cooperate in making propaganda. They were vulnerable, stripped to their core; they could not pose or pretend they were something they were not. Fortunately, they were solid—healthy people with strong character that enabled them to lead with honor through the most unimaginable humiliation.

If you don’t know yourself and have a peace about who you are, your fears and insecurities will take you out.

Rather than pursuing your passion and purpose using your unique talents, style and convictions, you will constantly be comparing yourself to others and trying

naturally, there were to guide your life by fears, but he did his duty someone else’s ways and and suffered the consestandards. Alternatively, quences. Great leaders when you know and know that fear is the accept yourself, you can norm, and they know they be authentic, leading must lean into the pain of from your own true north. their fears to do what they Objectively knowing your know is right. Courage strengths gives you confidoes not mean that you dence, while awareness of are not afraid, but that your weaknesses gives you do what is right when you humility. it feels scary or unnatural.

Few will ever be POWs, “Our culture but eventually we will all desperately needs men face situations that and women who will Connect with your support expose who we really are. lead with honor. team Spend time with yourself Don’t take it for and go deep. Accept who granted that you will In your struggle to lead with honor, you are like you are, but realize there lead honorably.” any other warrior—it’s is always room for growth; work every day to build your- not good to fight alone. That’s why the self strong so you can lead authentical- enemy tried so hard to isolate the POWs in North Vietnam and why the POWs ly, from the inside out. risked everything to keep the communication lines open. Even the toughest Clarify your values POWs relied on the counsel and and standards and encouragement of their teammates. commit to them The POWs had a uniform code of con- Authentic leaders realize they cannot duct that everyone knew and was see every situation objectively. On the charged with following. It acted like tough choices, you will usually need signs along the road giving direction the perspective of someone who is outand providing a framework for deci- side the issue to help you evaluate the sions, choices and behaviors, helping situation. Build a network of a few key them stay on the right path even in advisors who can help you navigate the treacherous waters ahead. the most difficult situations.

Unfortunately, most people have Our culture desperately needs men only generic assumptions and a superficial understanding about their moral and women who will lead with honor. values and ethical commitments. Jeb Don’t take it for granted that you will Magruder, the White House advisor lead honorably. Engage in the battle who went to jail, said that he had required to guard your character. To been taught right, but somewhere be prepared, know yourself, clarify along the way he “lost his ethical com- your values, standards and commitpass.” We are all cut from the same ments, confront your doubts and fears cloth as Magruder, and without regu- and connect with your support team. larly clarifying our commitments, we Then you are ready to face the giants and avoid the headlines of failure. will drift off course as well.

Confront your doubts and fears Fears and insecurities take out more leaders than anything else, and they generally can be traced back to the first point above—your identity—knowing who you are and being comfortable with yourself.

Even the smartest, toughest, and best leaders face insecurities and fears.

The POW leaders were tough warriors, but they all struggled with fear.

Commander Jim Stockdale endured frequent physical abuse and more than four years in solitary confinement, so

Lee Ellis is a speaker and the author of Leading With Honor: Leadership Lessons From the Hanoi Hilton, in which he shares his experiences as a Vietnam POW and highlights leadership lessons learned in the camps. As president of Leadership Freedom, a leadership and team development consulting and coaching company, Lee consults with Fortune 500 senior executives in the areas of hiring, teambuilding, executive development and succession planning.

For more information, call (678) 4559514 or visit LeadingWithHonor.com.

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very once in a while, an organization comes along, an organization that sets trends, remains ahead of the curve and sets a bar by which all others strive to attain. This month, we take a look at a sampling of these organizations, organizations that we have deemed “Visionary” for their inspiration to always strive to improve and go above and beyond to assist their clients, and ones that have successfully navigated an ever-changing mortgage industry marketplace. We present to you the following movers and shakers in the industry and the leaders behind them.

AllRegs Dan Thoms, President What was the original vision of the company?

AllRegs launched in 1989 as a digitally-formatted regulatory reference library with the goal of streamlining and improving the mortgage guideline and compliance reference process. Since then, our product menu has grown to include AllRegs Academy, a professional services team, a database of over 3,000 loan products and a custom publishing solution.

What are you doing today to make a difference in the industry or in your local marketplace?

One of newest initiatives centers our consumer training and helping consumers understand and navigate their way to buying or maintaining a home. Not only are we providing the highest quality online home education to homeowners and homebuyers, we are providing the real estate finance industry with a way to easily provide this consumer training to their existing clients, or potential new clients.

Mason Grashot, CPA, President What was the original vision of the company?

The Bond Exchange was formed in 1990 to function as the surety department for a multi-line independent insurance agency with a few locations serving Arkansas. Due to its separate brand and experienced surety professionals, The Bond Exchange was able to assist other local insurance agencies with their bonding needs that didn’t fit within the underwriting guidelines of the few insurance carriers who primarily provided surety products in the state.

What are you doing today to make a difference in the industry or in your local marketplace?

Since The Bond Exchange is truly focused on surety products, our perspective is quite different from insurance agents who try to write the bonds as a compliment to their other products. We believe that most surety products such as mortgage license bonds are commodity items. You have to have it. Through our partnership with NAMB, The Bond Exchange offers the absolute lowest pricing available at a premium rate of only $5 per thousand.

Where do you see your company in five years?

Our simple, southern roots have instilled in us the low-margin philosophy of charging the lowest price we can find instead of the highest price we can get away with. Our custom-built technology platform has empowered us to truly practice the lost art of real customer service instead of giving us a wall to hide behind. In five years, we will be shining a spotlight on those two fundamental values as the world moves further away from them. The Bond Exchange will still be answering phone calls and e-mails with prompt, professional, courtesy, while providing incredibly low prices through a simple, straight-forward approach.

America’s Choice Home Loans What was the original vision of the company?

The owners of America’s Choice Home Loans (ACHL) began as loan originators and still originate today, when they started our company, the first and foremost important vision was for a company to be loan originator friendly!

What are you doing today to make a difference in the industry or in your local marketplace?

What we are doing today in our industry and our local marketplace is providing a “superior” service! We want everyone involved in the transaction to understand how America’s Choice Home Loans values them.

Jonathan Foxx, President & Managing Director What was the original vision of the company?

Many independent mortgage professionals involved in originating residential mortgage products are often unable to pay the cost of hiring a compliance manager, let alone fully staffing a compliance department. Yet they struggle to comply with numerous regulations, frequently dependent on lenders for such guidance.

What are you doing today to make a difference in the industry or in your local marketplace?

Brokers Compliance Group is the first and only compliance firm in the United States that provides low-cost regulatory compliance advice to the residential mortgage industry, by offering the professional knowledge and experience of subject matter experts in all areas of mortgage compliance. We offer clients the real-

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Where do you see your company in five years?

Our hope is to see the company grow in the next five years, but with that said we do not ever want to lose our accessibility to the decision makers or our excellence service! ACHL believes in doing it RIGHT!

Brokers Compliance Group

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Cory Fowler, National Sales Manager

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Where do you see your company in five years?

At AllRegs, we will continue to provide our customers with a comprehensive suite of tools and resources to meet the needs of the mortgage industry, including research and reference tools, business intelligence, education and training, and professional services. Based on our corporate objectives and with an unwavering commitment to excellence, we will continue to: Help people and companies grow by providing them with knowledge, content and training resources; present people with solutions to everyday problems to increase their productivity and create efficiencies; and create opportunities for them to grow and maintain their business based on industry standards, guidelines and compliance.

The Bond Exchange

visionary

organizations

world, practical solutions to regulatory process issues, with an emphasis focused on operational improvement, policies and procedures, and mortgage risk management.

Where do you see your company in five years?

The professionals of Brokers Compliance Group have extensive experience in mortgage risk management, licensing, mortgage quality control, and all other areas of legal and regulatory compliance that affect the residential loan originations of independent mortgage professionals. By providing ongoing, compliance support to mortgage brokers, we plan to substantially strengthen their prospects for maintaining exemplary service and responding to regulatory requirements and examinations.

What are you doing today to make a difference in the industry or in your local marketplace?

Over the last 24 months, CBC National Bank has taken the original vision to a wider base of clientele with expansion in both our retail and wholesale divisions, thus making us a national lender.

Where do you see your company in five years?

In five years, CBC National Bank hopes to be recognized as the best mortgage lender, not the biggest, and keep with our trademark, “Big Enough to Matter …

Small Enough to Care.”

Credit Plus Inc. Steve Grant, President

Calyx Software Doug Chang, President

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What was the original vision of the company?

Founded in 1991, Calyx Software began its operations in San Jose, Calif., with one vision—to provide accessible, affordable and reliable software for all mortgage professionals. More than 20 years later, Calyx Software remains dedicated to helping mortgage professionals increase their profitability by providing software that streamlines and optimizes all phases of the loan process–from initial application through trailing docs– including secondary marketing. We are committed to providing our customers the highest level of service and support possible.

What are you doing today to make a difference in the industry or in your local marketplace?

Calyx Software continues to work to provide mortgage professionals the tools they need to use technology that allows parties to exchange data easily. We work to develop and introduce products that streamline, integrate and optimize all phases of the loan process while providing flexibility and comprehensive functionality to increase efficiency and maximize profitability. Our products are designed to simplify loan processing and enable seamless integration. Our focus remains on our clients’ success and growth in the industry.

Where do you see your company in five years?

Since Calyx’s founding, business has been brisk. According to a 2010 study conducted by Access Mortgage Research & Consulting, more than 72 percent of mortgage brokers reported using Calyx Software as their preferred loan origination platform. Further, Calyx supports 36 percent of community banks, credit unions and mortgage bankers. As the industry evolves, so will our products. We hope to remain the preferred choice of those individuals and organizations by listening to them, responding to their needs and by being proactive to stay ahead of regulatory changes.

What was the original vision of the company?

At Credit Plus, the original vision was to supply credit information to mortgage bankers and brokers in Delaware, Maryland and Virginia, with a strong focus on customer service. Back then, there were few companies doing this and they were so inundated with requests that they would often shut off their phones so they could catch up. Clients and prospects welcomed our new presence in the marketplace as we helped them dig out from their backlogs. Our product then, consistent with today, focused on quality service and exceptional value. Because of those principles, our service and product popularity grew quickly across the country.

What are you doing today to make a difference in the industry or in your local marketplace?

Today, we constantly monitor the industry volumes, practices, problems and legislation searching for new needs to develop problem-solving products. Credit Plus has evolved into providing thousands of mortgage professionals with more than 160 different products. We are rolling out four new products this year that will dramatically improve total production in all our clients’ offices. We also offer free mortgage educational classes through Credit Plus University and provide first-time homebuyer seminars on a local level.

Where do you see your company in five years?

The past couple years have been very good for Credit Plus as the industry reestablishes its footing. We have doubled our market share for two consecutive years. We feel this will be a continuing trend as more mortgage professionals lean on our vision and foresight for developing problem-solving products. Our nimble structure offers us the luxury to react quickly to solve not only the current, but often unforeseen, mortgage lending hurdles.

DocMagic Inc. Don Ianitti, President and CEO

CBC National Bank Charles Wagner, Executive Vice President What was the original vision of the company?

CBC National Bank was established in 1999 with the formation of our mortgage division in 2007. Our original vision was to be a small boutique wholesale lender in the Southeast but we quickly determined that our mortgage division would not only complement the Bank, but it would add significant value to CBC’s franchise.

What was the original vision of the company?

When DocMagic was founded, 25 years ago, mortgage lenders lived in a paper-based world. They needed a highly reliable service provider to get document packages to the closing table on time. We started our company to provide that, developing same-day turnaround, remote electronic document delivery and data auditing technology as necessary along the way. Our original vision was to create a service that would allow lenders to push a single button and get a fully compliant set of documents delivered. We accomplished that. Over time, our vision expanded as the needs of our customers changed, resulting in the DocMagic of today.

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What are you doing today to make a difference in the industry or in your local marketplace?

DocMagic is known today for compliance, reliability, speed of delivery and a steadfast commitment to paperless lending. We have made the necessary investments in infrastructure and human resources as well as in a multi-million dollar state-ofthe-art facility to ensure that our ability to deliver on these priorities is unmatched in the industry. We now provide every document the lender needs. We are the only company to provide eSign FREE and the only company to achieve 100 percent uptime. Our compliance department is the best in the industry, our technology provides thousands of compliance, data integrity and custom checks throughout the loan origination process and we are integrated with every leading LOS. Where do you see your company in five years?

Lenders doing business five years from now will not use paper in any part of their businesses. To them, the data and the documents will have merged into one easily manageable, totally secure online and mobile environment that allows them to share whatever information they need to with their borrowers precisely when they need to and track everything that happens along the way. DocMagic will continue to lead the industry, providing not only the data and document management that future lenders require, but also meticulous compliance and errorchecking capabilities from the moment of application, through closing all the way to the secondary market and beyond.

Equity Loans Eddy Perez, President

What are you doing today to make a difference in the industry or in your local marketplace?

We have spoken up time and time again for the use of more manual, skilled underwriting and more robust production (quality control, due diligence, compliance)to offset the alarming growth in reliance upon FICO scores and other formulas to determine quickly whether or not a mortgage applicant is qualified. We truly believe there are thousands of qualified and deserving borrowers in America who have been shut out of home ownership for the sake of speed in the loan production process.

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Where do you see your company in five years?

I believe First Guaranty will come to be known not only as a niche lender, but as a national lender dealing in most traditional mortgage products as well. There is a place for a mortgage company that goes about originating loans or working with TPOs without cutting corners in this market. We believe this will lead to our continued growth.

Maximum Acceleration Erik Janeczko, Head Coach/Business Development Strategist /Speaker What was the original vision of the company?

To create not just a best of breed coaching but a completely different kind of coaching system that focused and the critical skills level.

Through an exhaustive 14-month research and development phase we broke down the specific tactical details of how to create radical growth, and built technology to drive the process at that level.

What are you doing today to make a difference in the industry or in your local marketplace?

Refocused on our original mission of striving for aggressive but sustainable growth, and focusing on quickly and strategically adapting both internally and externally to the changing landscape of the market. Leveraging emerging technologies to create faster implementation and further accelerate performance growth for our clients.

Where do you see your company in five years?

As the most valued and respected coaching program in the industry, not because of our marketing and positioning, but because of our performance record.

Continually pushing the envelope leading the charge with effective implementation of technological innovations and enhanced performance growth systems.

Continuing a pattern of exceptional growth.

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Where do you see your company in five years?

Currently, we are 100 percent retail. In the next five years, we’d like to expand our product mix to offer correspondent services to other fellow mortgage bankers to help build our servicing portfolio. We feel very strongly about the servicing side of the business and are slowly starting to enter it with our agency approvals. In 2013, we are also expanding in the Midwest, since 80 percent of our production is currently based on the East Coast. We want to diversify our portfolio not only in revenue channels, but also in strategic locations to avoid the concentration risk that we experienced from Hurricane Sandy in the Northeast, as we have learned this can lead to some challenges.

What was the original vision of the company?

First Guaranty was founded with the idea of serving a broader class of worthy customers. We’ve always believed that the FICO only tells a small part of a customer’s story. From the start, we’ve tried to treat borrowers as people, rather than numbers or variables in a mathematical formula. Even today, we emphasize the use of manual underwriting and quality control as an alternative to leaning only on FICO scores, whether they’re seeking an FHA loan or a traditional, “plain vanilla” mortgage.

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What are you doing today to make a difference in the industry or in your local marketplace?

A family-oriented corporate culture is incredibly important to Equity Loans so we can offer a positive experience for our employees along with our clients. Since no situation is the same, the key to success in the mortgage lending business is flexibility and options, which is why we’re committed to offering one of the most diverse arrays of lending products in the industry. In late 2011, we decided to pursue our government-sponsored enterprise (GSE) approvals and currently, we are approved with Fannie Mae and in the final stages with several other GSEs. We understood early on that these approvals would not only bring more products that would allow our loan originators to help more clients, but set a standard for the company in the marketplace. The approvals will also allow our branch managers help their local markets with faster service, more products and more flexibility to meet their clients’ needs.

Andrew Peters, CEO

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What was the original vision of the company?

The original vision of Equity Loans was to dedicate the first two years to building our platform and infrastructure–including warehouse lines, licensing, recruiting, investors and learning the back end–to help achieve great growth from 2010 onward. After that two-year period, we began to open branch offices nationwide to build our local presence in each marketplace. Five years later, Equity Loans’ operations extend to more than 30 states and we’re consistently increasing our loan production year after year.

First Guaranty Mortgage Corporation

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Real Estate Mortgage Network Inc. (REMN) StreetLinks Lender Solutions Peter Norden, Chief Executive Officer

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Tom Hurst, President

What was the original vision of the company?

The original vision of REMN was to create a national, multi-business channel mortgage banking company. We recognized that the turmoil in our industry that drove so many companies away from residential lending created an opportunity for a well-financed, and strategically-run mortgage company. By aggregating quality loans from diversified business channels and building a solid servicing platform, REMN could become one of the premier privately-held mortgage companies in the country. Mission accomplished.

What was the original vision of the company?

Simple–to operate an AMC the way we believed it should be done … the right way. We believed in revolutionary concepts (remember, this was 2006) like attracting the best appraisers by treating them as partners and letting them set their own fees. We believed in selecting appraisers based on proximity, historical service, and quality–not fee. We believed in using the best technology while maintaining manual quality control, and in having enough associates to respond to messages in minutes, not hours or days. At the onset, we had no idea that our mission would change the way the industry operated.

What are you doing today to make a difference in the industry or in your local marketplace?

We originate loans via our retail, wholesale and correspondent lending business channels. Each channel takes a unique approach to the way their business is run and the way they service their customers. An example being our wholesale focus on the purchase money market. They are committed to offering the fastest turntimes in the industry and they are delivering it. Our retail group prides itself on multiple origination strategies, including traditional real estate agent business, consumer direct and affinity lending. We are very pleased to say that our customers are responding. The fact that we are a Ginnie Mae seller/servicer and direct with the agencies, has been instrumental in our success.

What are you doing today to make a difference in the industry or in your local marketplace?

In 2012, we took our promise to the next level by executing on ideas within an area of the industry we hadn’t yet touched. We saw an opportunity to address an industry-wide lack of confidence in the dependability of automated collateral review options. After years of planning, analysis and testing and over $5 million invested, we launched our Automated Examination & Valuation Division, including the industry’s most powerful collateral underwriting utility, StreetLinks QX. This niche was craving change, so we addressed the longstanding issues and flaws in traditional AVMs. We’re proud to continue to drive positive change to our industry.

Where do you see your company in five years?

We will continue to grow our overall origination business and to continually build our servicing platform. With our management team, financial strength and our ability to adapt to an ever changing industry, we see great opportunity ahead. Some of our biggest challenges will be regulatory and compliance related. By keeping focused on quality and compliance, we will continue to be one of the top mortgage lenders in the country. We are all about quality loans, quality service to our customers, and creating a quality work environment for our many associates.

Where do you see your company in five years?

We see QX and our new division as a major leap in our journey to further identify ourselves as the stand-alone leader in valuation solutions. We’ll continue to combine our expertise with the most advanced technologies available to launch solutions that make lasting, positive impacts on our industry. With our original model, we had no idea if we could make money–but we knew it was the right way to do business. It proved to be profitable, but we continue with the same mindset: A singular focus on profitability stifles innovation and is a road to failure in service-oriented businesses.

Residential Home Funding

TagQuest

Tom Marinaro, President What was the original vision of the company?

The company’s initial vision was to be the largest mortgage banker in the nation.

Since the original vision, we have changed our business philosophy to be the largest East Coast lender. We currently have a geographical footprint that encompasses Connecticut to Florida. Our current goal is to be the largest lender within that footprint.

What are you doing today to make a difference in the industry or in your local marketplace?

We are truly making a difference in the marketplace by hiring the best employees of the industry. We have not only created a product for the “Mortgage For Champions” where we do a “no lender closing costs” product, but also have started a foundation where we have given more than $100,000 to local hospitals in our communities.

Where do you see your company in five years?

I truly see us as being the largest lender on the East Coast.

Caleb Guillory, President What was the original vision of the company?

The vision of TagQuest is to be a leader in providing what we call a “customized customer.” These are the clients that are the easiest to work with, last the longest, and are the most profitable. Our ability to effectively research and target qualified prospects helps our clients acquire more new business and most importantly retain those customers for years to come. TagQuest’s unique approach focuses on the specific needs of each of our clients. We do not offer cookie cutter products or services. Each campaign is researched and designed separately for each of our clients.

What are you doing today to make a difference in the industry or in your local marketplace?

TagQuest has remained ahead of the mortgage industry by using our ability to monitor marketing all over the country and track changes in the market before the market can see the change itself. This very unique insight allows to keep our clients out front of their competition. We are also the most knowledgeable marketing firm in nation when it comes to compliance. While we are not attorneys, knowing the ins and outs of compliance and being able to discuss different options with our clients openly lets them make educated decisions about how best to get in front of their prospects.

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Where do you see your company in five years?

TagQuest will grow to lead the financial service sector in marketing, advertising and branding. Our customers are creating some commotion about the success of their campaigns with us which is leading to more industry awareness about our company. With the compliance crack down coming from government agencies like the CFPB you will see a lot of companies shut their doors. TagQuest may just emerge as the leader, the safe bet, the company you know and trust.

United Wholesale Mortgage Mat Ishbia, President What was the original vision of the company?

The original vision for United Wholesale Mortgage (UWM) was to create a wholesale lender who puts the importance of service and the customer experience ahead of everything else. By delivering consistency, communication and unparalleled customer service, originators know that we are their partner and that we want them to succeed. With this framework, we have become the fourth largest wholesale lender in the nation, known for our commitment to “Lending Made Easy,” and we continuously strive to improve every day.

What are you doing today to make a difference in the industry or in your local marketplace?

We differentiate ourselves by providing an elite level of service and we have consistently delivered on our fast turn times. We listen to our client’s needs and strive to be innovators for our industry. We take pride in what we have built at UWM, from direct access to underwriting, to our expert sales force. The success of our brokers is worth every investment, from our award-winning technology to the unique ways that we train our employees.

Aaron Fowler, President What was the original vision of the company?

We started as a regional staff appraisal company with a focus on providing superior service, rigorous quality assurance and flexibility to the needs of our clients. When the Home Valuation Code of Conduct (HVCC) was introduced, many of our clients shared their concerns with the regulatory environment and the role of an appraisal management company. We launched United States Appraisals in 2008 to meet the needs of those clients. Our vision was to bring our regional focus on service, quality and flexibility to the national landscape. We never wanted to be the biggest–just the best.

Eric Wallberg, Co-Chief Executive Officer What was the original vision of the company?

Our vision remains the same as when we opened the company–to combine technology-driven entrepreneurialism with mortgage banking to create a flexible, growing, profitable platform that is customer-centric. We knew that if the customer remained our primary focus, everything else would fall into place.

What are you doing today to make a difference in the industry or in your local marketplace?

We’re growing and adding opportunities daily. We’ve opened a regional operations center in Concord, Calif. and we are expanding throughout the West and East, as well. We have also spent a great deal of time and resources to further our proficiency in government lending–FHA, VA and USDA, so if you are looking for a lender with true expertise in government products, you’ll find WCS Lending.

Where do you see your company in five years?

We see WCS Lending growing exponentially, offering even better products and services to our customers as we continue to gain efficiencies through state-of-theart technology and training unparalleled in the industry. As a direct lender, we anticipate that WCS Lending will significantly increase its market share, becoming a premier lender in the United States.

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What are you doing today to make a difference in the industry or in your local marketplace?

We have invested significant resources into the development and launch of a proprietary software platform that places us at the forefront of industry technology.

WCS Lending

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United States Appraisals

Where do you see your company in five years?

The AMC marketplace exploded with new players with the advent of HVCC. We have already seen some contraction as some companies not fully committed to the model have exited. A drop in mortgage volume (as projected) coupled with increasing costs associated with multiple state registrations will continue to push financially limited companies out of the space. We also expect some lenders to tire of the “appraisal mill” approach employed by some of the larger players in our industry. We believe our technology platform positions us for growth as our reputation for service, quality and flexibility continues to attract new clients.

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Where do you see your company in five years?

I see United Wholesale Mortgage as the number one lender in the nation in the coming years. We are adding more than 600 employees to our dedicated team in 2013 alone, and we have established a culture that sets us apart from the competition. UWM is going to continue to be an innovative force in our industry and we will continue to grow as we support the growth of our clients. We are going to be a long-term presence, and we are excited for what is in store.

The solution provides our clients with a robust, user-friendly order, communication and delivery platform. We can easily integrate with their LOS systems for a seamless business solution. On our end, it provides visual, point and click appraiser selection based upon proximity and historical quality. The workflow manager provides exception identification and escalation, creating focus on orders at risk of exceeding one of our performance standards. This focus allows us to handle increasing volume without sacrificing service.

The Secrets to More Closings: Meet Your Customers Where They Are (Part I) we’d call a seeker. They’ve made the decision to move forward, and now they’re seeking their best options:

By Jean LeBlanc

Remember the sales funnel? It marks each step that your prospective customer takes, from initial inquiries to signing on the dotted line. Why is the sales funnel so important in mortgage sales? Because your client needs different information and different responses from you at each stage, and if you provide the wrong responses, you may just lose that customer. It’s critically important—and you as a branch manager or broker/owner need to provide your sales team with various marketing tools that are based on each funnel stage.

So let’s take a deeper look at that funnel. This month, we’ll explore the first two stages, and in subsequent months, we’ll move further down that funnel, just as your prospects do.

Entering the funnel: The tire-kickers These people making initial inquiries can be called looky-loos or tire-kickers.

They’re just beginning to explore the idea of buying a home, and wondering if they can afford it. Or they’re beginning to con-

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n What kind of loan do I need? n What’s the best downpayment option for me? n What mortgage companies do I want to contact? sider whether they could save money every month if they refinanced.

You know this group well. At this stage, you spend more time answering their questions and educating them; most likely, any attempts your LO may make at closing them—even using a trial close—will be rebuffed, because they’re just not at that stage in the funnel yet. Your role at this point is to become their trusted authority figure. Gain their confidence. Begin building bridges. Find out their goals, their needs.

Most importantly, prequalify them.

Now, many will fall out at this stage, because they don’t qualify, or they get cold feet and decide to wait awhile. Coach your staff not to automatically write them off; instead put them into a lead nurturing cycle with emails.

Stage 2: The seekers The next stage down the funnel is what

If this is a person who started with you at the top of the funnel, then they want you to guide them along. But what if they started with you as a seeker? You quickly have to ascertain where they are in your first conversation—do they seem to have the basic knowledge that they’ll need?

Have they been prequalified somewhere?

Has their credit been pulled? Has someone walked them through various scenarios yet?

At this stage, your LOs are selling their prospective client on themselves, the company, and your ability to match them with the best loan option for their situation.

They want to know about the solidity of your company. They want to know how qualified your LO is. Testimonials on your Web site and referrals on your social media pages and local directories are a huge help both in this stage and the next, because they want to see your success stories.

They also want your LO to hold their hand and walk them through various scenarios, explaining the different types of loans and their pros and cons. Again, any pages on your website that you can refer them to, that explain, for instance, the difference between a fixed rate loan and a 10/1, 7/1 or 5/1 ARM will be very helpful. If they’re meeting face-to-face, it’s good to have short hand-outs for them. Your hand-outs should explain as concisely as possible (no three-page explanations, please!) and use NO industry jargon.

Recent studies have shown that many people, particularly first-time homebuyers and those buying less expensive homes, may skip both the seeker stage and part of the shopper stage, which is next. They simply find a company that they want to work with, perhaps from a referral from a trusted family member, friend or their real estate agent.

Next month we will explore stages three through five of the sales funnel, and how you can help move your prospects further through the funnel right up to loan closing.

Jean LeBlanc is director of marketing for Guaranteed Home Mortgage Company.

For more marketing tips, download the eBook, 13 Ways to Juice Up Your Marketing in 2013, by going to joinghmc.com and clicking on the eBook offer midway down the page. She may be reached by phone at (914) 696-3400.

Social Media and Becoming Your Local Expert

By Cathy Blaszyk

With the explosion of opportunities for businesses and professionals to market themselves via the Internet, deciding where to spend your time to get the greatest return-oninvestment (ROI) can be a challenge.

How do you prioritize if you only have so much time to devote to marketing?

Here are few tips: 1. Choose things you enjoy doing, because that enthusiasm will show.

2. Choose what you are good at. If you are a good writer, then start a blog. If you have strong social skills, then get involved in your community.

3. If you love to stay connected with people through the Internet, utilize social media sites like Facebook, Twitter and LinkedIn.

Maximize your social media contacts

Commerce, the Rotary Club, a local youth group or religious organization. The more you believe in the cause, the more you will enjoy and become passionate about your involvement. Become active on committees or boards, and work alongside others who may eventually turn to you as their mortgage professional.

Become the local expert People hire people who are good at what they do, and there are ways to position yourself as a mortgage loan expert in your community. Many newspapers, especially online editions and print weeklies, are looking for editorial content. Contact your local newspaper and offer to write a bylined article on a topic related to your field. It should inform and educate the reader, not promote your services. Your byline and bio will be included with the article, which can raise your profile as an expert. You might propose writing a column or Q&A feature to answer readers’ questions about the mortgage process.

You can also connect with people on real estate and consumer Web sites that post consumer questions, such as ActiveRain, YELP, Zillow and Yahoo, among others.

Focus on those pertaining to your area of expertise within your community. Offer your advice as an experienced mortgage lender or broker.

Some real estate Web sites allow people to post reviews about local businesses. Ask your satisfied clients to post a review about you.

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Cathy Blaszyk is vice president of lender services for La Jolla, Calif.-based ClosingCorp Inc., a provider of residential real estate closing cost data and technologies for mortgage lenders, real estate professionals and consumers. She can be reached by e-mail at cblaszyk@closing.com.

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The last decade has been an explosion of Internet marketing opportunities, from social media to blogging, to industry-specific and interactive Web sites. There are many ways to interact personally with people in your community.

Find your comfort zone. If you are marketing yourself on the Internet, build your presence and provide information that is meaningful and relevant to people. If you enjoy being around people, get involved in industry, business and/or charitable organizations to expand your personal relationships.

Above all, offer to help people as opposed to promoting yourself. Times are tough for everyone, so be a positive influence on those around you. People will naturally gravitate to you because they want to associate with a winner!

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Social media is not only an easy way to stay in touch with family and friends, it’s also an effective business networking tool. One can hardly watch TV these days without the host or anchor asking you to check them out on Facebook or Twitter.

Facebook is a good vehicle for mortgage professionals because of the ability to set up a separate business page with links and tabs. It’s also very popular with real estate agents.

If you are currently on Facebook and do not have a separate business page, this is a good place to start. A Facebook business page can be used effectively with your personal profile to grow your sphere of influence and position you as an expert on mortgage matters. To set up a business page, go to your Facebook Home Page and type “Facebook Pages” in the search field.

There you will find a tutorial including how to set up a business page, build a presence, engage your audience and spread your message.

After creating your business page, post news that people will find of interest, such as housing information, interest rate projections, what’s selling and for how much, or the popularity of certain loan products.

Invite your Facebook “Friends” (who are or could be customers) to become “Fans” of your business page. Ask them to “Like” and “Share” your page with others. There are some useful tips for building your fan base in the Facebook tutorial. Use this tool to its fullest by

more clients and establish yourself as an expert. Participants attend your Webinar via their computers, and are able to see you and hear your presentation live. Webinars are great because attendees can participate from their If you like to write, blog! homes or offices and they can click in If you enjoy writing, have interesting and out whenever they want, which things to write about pertaining to your means they do not have to worry about business and have the time, you defi- a pressured sales pitch.

Evaluate different Webinar platforms nitely should be blogging. In a recent survey touted by Hubspot, an online to meet your needs, such as marketing company for small business- GoToWebinar, GoToMeeting, Adobees, 97 percent of the respondents said Connect, WebEx and ConferencePlus. that blogging drives more traffic to their Research what tools you will need and Web sites, which can generate more practice using them. Determine if you leads. Sign up with a free blog hosting want participants to be able to ask site such as WordPress, Blogger or questions so you can set that up with Blog.com. Most have the ability to your conference company. Your presentation should be informative and design a custom blog page that compelling, with a title that includes your photo and generates interest and other materials.

“A Facebook entices people to sign Blogs should be up. It should be no informal, as if you business page can be longer than 10-15 are having a conminutes, longer if used effectively with your versation with you are taking someone. If you personal profile to grow questions. are already blogOnce you have your sphere of influence ging, ask people a platform and a you trust to give and position you as presentation, you feedback on content and style. an expert on mortgage select the date and time and get the word Give your readers matters.” out to everyone you something of value so have contact with, includthat they look to you as ing your customers, social media an expert and read your blogs regularly. Write about housing trends contacts, personal mailing lists, and so on. and statistics, provide local market Blog about the Webinar and post it on information, new loan products and your Web site. Ask people to register in services. People really want to know advance so you know who is attending. what is selling in their community, and Add the names of new prospects to your for how much. Share your opinions personal contacts list.

Finally, get the most mileage for your about news articles you’ve read. Offer your insights. Educate your audience; Webinar by uploading it on You Tube, and help readers understand the process of posting a link from your blog and Web site. buying or selling a home in your area.

Get them engaged. Ask for their ques- Become active in your community tions and comments.

Blog consistently, at least once a Perhaps you prefer to get out and meet week, preferably several times a week. people face to face. If so, and you aren’t Keep it brief—200-300 words. It’s better already doing it, get involved in your to post shorter blogs more frequently community by joining groups and organthan longer blogs less often. The more izations that will put you in front of your you post, the more you will be seen and customers.

Join your local real estate agent organthe greater chance you will have of ization as an affiliate or associate memacquiring a customer.

Be sure to link your blogs to your ber and attend events and functions.

Facebook page and your Web site (plus Volunteer to serve on committees that additional social media or other sites are allowed for your membership level. you use such as Twitter). Include your e- Get to know people by attending real mail address and invite people to ask estate caravans and open houses. questions. Publish questions and Establish your credibility by becoming familiar with your local market, such as answers in future blogs. inventory, trends, what’s selling and for how much.

Host a Webinar Join other groups that you may have an Web-based seminars—or Webinars— interest in such as the Chamber of are a cost-effective way to get in front of

posting regular market updates and insightful, topical content. Posts that get “Liked” and “Shared” end up in more feeds, which means greater exposure for you.

NAMB Sales & Marketing Tips for Today’s Mortgage Professional Keeping in Contact Phone calls and e-mails designed to maintain rapport with clients and partners

By Fred Arnold, CMC

In a previous article in National Mortgage Professional Magazine, we discussed five disciplines to incorporate into each work day to keep your pipeline full. In addition to meeting strategic partners daily, the importance of daily communication with at least 10 clients or strategic partners is a must.

The only catch in writing these emails or making these calls is that none of them should be designed to directly solicit new business; however, the outcome will definitely send you new business. These personal calls and e-mails are designed to acknowledge important dates or simply thank people for their business.

Here is a detailed look at how you can maintain continuous communication with clients and strategic partners and help you get new introductions to potential clients.

1. Birthday e-mails Everyone gets lots of calls, voicemails, text messages and birthday wishes on social networking sites on their actual birthday. In order to stand out from the pack, try e-mailing or texting contacts on Monday or Tuesday of the week of their birthday.

For example, each Monday I look up clients having a birthday that week. I also check social networking accounts for important partners’ birthdays (real estate agents, title reps, escrow officers, etc). Even if clients or strategic partners don’t have their birthday

until later in the week, send the message on Monday or Tuesday so you have it done and it will be received before all the other birthday messages and noticed by your client.

Having an e-mail template will save time so that you don’t have to write a new message to each person but always make sure that it is personalized so it doesn’t appear generic. That is, the template should only be used as a crutch.

To achieve this, draft a basic birthday e-mail wish and a custom birthday signature and save it. When it’s time to send each e-mail, you merely need to plug in the name of the client or strategic partner and the entire process takes just a few moments. These e-mails can be as simple as: “Happy Birthday, Joe. You’ve been a good friend and I hope you have a terrific birthday week. I know your birthday isn’t until Thursday, but things have been busy with clients investing in real estate and those taking advantage of refinancing opportunities and I didn’t want to forget your special day. If you have any questions or need any help with anything, don’t hesitate to ask. I wish you a terrific birthday week and look forward to speaking with you soon.”

It really is that simple. The entire process takes just seconds and shows your clients and partners that you took the time to recognize them as a friend.

For additional bonus points, I have even found that calling husbands to lightheartedly remind them of their wives’ upcoming birthdays to often be a welcomed reminder, wherein we both have a good laugh.

2. Anniversary of new home e-mails When clients close a loan on their

home, I automatically set a reminder in my calendar to mark the occasion annually. Like the birthday e-mails, having a new home anniversary e-mail template drafted will save time, but again, it’s important to leave room for customization.

These e-mails generally read like this: “Congratulations on being in your home for two years, Joe. I hope that you’re continuing to enjoy the rewards of being a homeowner. You’ve been a good friend over the years, and if there is any way I can help in investing in a new property or buying a second home, please let me know.” Again, this e-mail will have a customized signature specific to the anniversary.

3. Random thank you e-mails and calls The importance of thanking people cannot be underestimated. From friends to clients, strategic partners to colleagues, it is important to thank at least five people each day and that doesn’t include your coffee barista on the way to work (On second thought maybe they own a home and need your help). Make it a point to randomly select five people from your database each day to call or e-mail to say thank you.

Whether your call is to thank someone for a great meeting earlier in the week, to thank a client for a referral, or to thank a referral partner for introducing you to a new client, showing gratitude will only serve to help you to continue to build relationships. In these calls and e-mails,. be sure to let the person you’re communicating with know that you stand at the ready to help with anything they need. Let them know that you’d welcome the opportu-

nity to be introduced to any of their family, friends or neighbors who need your help and leave it at that. These aren’t calls to pitch the current interest rate. The objective is to offer gratitude and help.

If you’ll be e-mailing, again I suggest using a template as a “crutch,” but the importance of personalizing the message is important. We are bombarded with e-mails every day and you don’t want to run the risk of being viewed as someone who only puts forth minimal effort in saying thank you. Draft a template, but make sure to put personal touches on each email to show your sincerity.

By creating a daily discipline of emailing and/or calling at least 10 people each day, you ensure that your clients, friends, strategic partners and colleagues know that they are important to you. The entire process takes less than 45 minutes if you are calling and e-mailing. You’ve shown that you do care, that you have taken the time to recognize important events and that you appreciate all that your clients, strategic partners and friends do for you.

Fred Arnold, CMC is past president of the California Association of Mortgage Professionals , current Treasurer of NAMB—The Association of Mortgage Professionals, and a mortgage professional at American Family Funding, a division of American Pacific Mortgage.

Fred hosts the radio show SCV Chamber and Business Spotlight on AM 1220 KHTS, as well as the televised program “Out of The Rough” on SCVTV.com, channel 20. He may be reached by phone at (661) 505-4300 or e-mail fred@fredarnold.com.

You Are a Prime Target … But Are They a Prime Destination?

By Steve Rennie

Being the subject of recruitment by a competing firm is a sign of respect. It means that you have earned their awareness and that they covet your proven capabilities and results. In the mortgage origination industry, it likely means that you have a sizable and sustainable book of business. And as the subject of desire, you have earned the right to encourage the advances of your admirers or to shut down their pursuit.

There is power in being the object of desire—use it!

As the target of a competing firm in your chosen line of work, you are in the enviable position of being able to evaluate both your existing situation and the opportunity that potentially awaits you with the pursuing organization. It is appropriate to provide some insight and suggestions for how to evaluate the managers and leaders of the firms that are seeking for you to leave, an apparently successful situation, to join them on their journey and team.

When evaluating a mortgage firm’s managers and leaders consider the following questions:

Where do they come from?

There is no better way to evaluate managers and leaders of a mortgage firm that is recruiting you then to get the personal thoughts regarding their capabilities from current and former colleagues and employees. The people that know them best are the folks that currently or have previously worked with them, and you need to hear from. If they include numerous employees including other originators of varying tenures, as well as, sales, marketing, operations and executive management in the recruitment process, it is a great sign that they want you to get a complete picture of their culture. If not, be skeptical, and do your own investigation. Fortunately, with the dawn of social media and other Web resources, it is relatively easy to track down folks who have worked for the key managers and leaders of almost any firm.

Due diligence is the name of the game when you are being recruited by a firm promising a better career opportunity. Part of this process of discovery is about determining whether or not you and the managers and leaders of the interested firm are a good match for you and your unique business. You have earned the right with your past performance to be very demanding. Use the leverage you have, and remember that you are a prime target. Make sure they are a prime destination.

Steve Rennie is a managing partner at Hammerhouse LLC, an expanding national recruiting and strategic growth firm for the financial services industry with mortgage sales and leadership placement at its core. He may be reached by phone at (949) 525-9407 or e-mail steve.rennie@teamhammerhouse.com.

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If the managers and leaders of a pursuing organization are serious about the dual goals of improving your career and growing their firm, they will be very intentional about the evaluation process. We have pioneered an assessment approach that helps companies and candidates determine whether or not they are a “ModelMatch” for one another. This assessment identifies six components of the mortgage business in which it is critical to achieve a positive model-match for maximum mutual return. These six components are: Leadership, Culture, Business, Operations, Technology and Geography. Unless the

What do their colleagues and employees say?

OHIO MORTGAGE PROFESSIONAL MAGAZINE

What process are they putting you through?

What else do they do?

The best managers and leaders are team builders. They are likely to be enthusiastic participants in other activities away from work. What do they like to do when they are not at the office? How are they involved … managing and leading or participating and producing? What do these activities, whether they be artistic, outdoor, religious or volunteer, say about them? We have found through thousands of interviews and relationships that managers and leaders with passionate extracurricular pursuits tend to bring a similar passion and an appreciation for teambuilding to their daily work.

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Understanding the history of the managers and leaders of a firm in their current positions, as well as their history in previous positions, and with previous organizations, is vital to evaluating their capabilities as well as style. Of course, people can change and their views and behaviors can evolve, yet contrary to the disclaimer that those selling investment products are forced to provide, “Past performance is an indicator of future results.” Never make a move based on promises of future performance.

Demand the same level of proven capability that they seek from you. A wise man in our industry once said, “The numbers don’t lie” and they don’t. It is completely appropriate to ask for facts to back up expectations being set.

evaluation process is designed to uncover how well you, and they, match across these components, then the risks of making the move unsuccessful are greatly increased. In that situation, its not just you who suffers, it is your family and business.

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An Interview with Clint Cornett,

lint Cornett is chief executive officer and founder of Texas-based ValuTrac Software, Inc., a software solutions provider to the appraisal management and mortgage lending industries. ValuTrac allows appraisal management companies, banks, credit unions, and mortgage lenders to operate more efficiently, enhance customer service, mitigate risk and ensure industry regulatory compliance with the Dodd-Frank Act, Interagency Guidelines, Fannie Mae Appraiser Independence Requirements and FHA Appraisal Requirements. For more information, visit www.valutracsoftware.com.

National Mortgage Professional Magazine recently sat down with Clint Cornett to get a progress briefing on ValuTrac.

NMP: Clint, thank you for taking the time today to visit National Mortgage Professional offices. Why don’t you start by giving our readers some background on how ValuTrac was founded?

Cornett: ValuTrac’s initial product originated as a proprietary appraisal management system utilized by an appraisal firm I founded in Texas in 1999. At that time, we serviced the state of Texas and needed an efficient and compliant way to manage our appraisal workflow. We searched, but could not find a product on the market that met our requirements, so we developed our own proprietary appraisal management system. After years of research and development, primarily conducted through real-time business experiences, we enhanced the system until it was able to meet our everyday appraisal management needs.

In late 2008, one of the appraisal firm’s customers approached us about implementing our appraisal management system nationwide to be used by all their branch offices. We packaged the system and customized a version to meet their specific business requirements. Upon completion of the implementation we recognized that a meaningful opportunity existed–the market desperately needed a fully customizable appraisal management system.

NMP: Was your core product developed in-house?

Cornett: All of our products are developed

tomer base, over 3,000 businesses are relying on ValuTrac for appraisal management. In 2013, we are on track to double our customer base again.

NMP: What exactly is driving your growth?

Cornett: As I mentioned earlier, the mortgage lending industry desperately needed a fully customizable appraisal management system. Our targeted customer base is adopting our solutions due to the continued investments we are making into the functionality and features of ValuTracPro and ValuTracPro Plus, as well as our fullycustomizable residential and commercial appraisal management platforms.

NMP: Can you walk us through your business model?

Cornett: Our model provides its customers the ability to implement a custom appraisal management software solution across their organization with minimal upfront investment, thus minimizing risk.

This is a result of low setup costs, no longterm contracts, no maintenance or renewal fees, and a pay-as-you-go pricing model. Our pricing model is transactionbased. The customer pays for only the service they use, with no burden of a monthly minimum cost, and no annual maintenance fees.

in-house and our development team has extensive experience in designing technology for the appraisal and mortgage lending industry. I originally provided the vision and leadership for the company’s products, along with our chief technology officer, who plays an integral role in the architecture of the platform.

NMP: What is your company’s current client makeup?

Cornett: We have a very diverse client base from nationwide to regional appraisal management companies, community banks, and large nationwide mortgage lenders. Our products appeal to all market segments within the mortgage lending industry.

NMP: What is the breadth of ValuTrac’s product offerings?

Cornett: Our software serves as a service (SaaS) appraisal management solution and provides our customers a compliant, easy-to-use appraisal management platform. ValuTrac Software has two primary appraisal management products, and two ancillary products, including ValuTracPro, ValuTracPro Plus and SnapShot.

NMP: How many clients are you working with today and what type of growth are you experiencing?

Cornett: In the past year, we have begun to establish a leadership position in the appraisal management technology space, doubling our customer base (appraisal management companies [AMCs], banks, credit unions, and mortgage lenders) to well over 100 and increased transactions by 200 percent. Today, through our cus-

NMP: What differentiates ValuTrac from the competition?

Cornett: We offer a unique consultant approach and the ability to help with overall process design and implementation, system applications and integration. Our solutions help to mitigate risk and enhance the cost structure related to the appraisal process and significantly improve accounting processes, appraiser vendor management, regulatory guidance, and sales support for all of our clients. We also offer both residential and commercial appraisal management.

ValuTrac was built by former lending and AMC executives, experienced in the demands required to efficiently manage the entire appraisal workflow–not just a piece of it.

NMP: How does the company invest in R&D? Cornett: Through extensive R&D, we evaluate the existing functionality of the tech-

ons for the Appraisal nt Industry CEO of ValuTrac Software Inc. nology, and collaborate in-house on the functionality and features that would enhance the user experience. To prioritize system enhancements for all of our customers, a dedicated team of software engineers are regularly collaborating with the sales team, account managers and executives.

In addition, ValuTrac is always listening to customer feedback to enhance the software system and will continue to make system-wide enhancements to further simplify the appraisal management process for its customers, while promoting responsible lending and adhering to compliance regulation.

NMP: What is the future of the appraisal management industry?

Cornett: Regulated appraisal management is here to stay. Companies will continue to need and have to implement compliant appraisal management solutions to minimize risk, while at the same time have a solution in place to simplify business processes, reduce operational expenses, and improve customer service levels.

NMP: What are the top challenges facing the appraisal management industry in 2013 and beyond?

Cornett: The top challenge will continue to be regulatory compliance. Lenders will not only have to manage their technology service providers (TSPs), but will need to be more accountable for their TSPs and their business processes. Just because a lender is outsourcing, it does not minimize their responsibility. One of the biggest challenges for the appraisal management industry going forward will be establishing reasonable and customary fees paid to appraisers. The appraisers have been fighting this for years. At some point soon, both lenders and AMCs will have to adopt what is reasonable and customary for every market across the nation. This could be a daunting task.

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NMP: What do you like to do in your free time?

Cornett: When I do have free time from work, I enjoy working with the athletic booster club at my son’s school, working out, spending time at the lake, attending local sporting events, and just hanging out with my wife of 21 years and my two children.

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NMP: What do you see on the technology forefront that could positively impact your business and the industry?

Cornett: Continued industry regulation and the need for a scalable solution that provides the latest in security and data integrity. In the new mortgage lending environment, companies need a compli-

NMP: How is ValuTrac delivering the highest standards of compliance services in the appraisal management industry?

Cornett: Our systems are designed to provide the specific structure around the regulatory requirements set forth in Dodd-Frank, the Interagency Guidelines, along with Appraiser Independence requirements, while allowing the customer to adjust their appraisal workflow and processes as required for their specific business. Our experience in both appraisal management and mortgage lending, coupled with our deep understanding of the regulatory requirements for appraiser independence, gives us a very unique perspective of the appraisal management process. We uniquely understand what banks, credit unions, and mortgage lenders need to operate more efficiently, enhance customer service, mitigate risk and ensure industry regulatory compliance.

NMP: What is the state of regulation today and what can lenders anticipate coming in the future?

Cornett: Today, lenders continue to face extensive regulation as a result of the mortgage lending crisis. Going forward, lenders will be more scrutinized than ever before for their business processes to meet all of the new regulatory requirements that have been implemented across the industry. Not only are lenders regulated, appraisal management companies working with lenders have to be compliant in their business processes as well and are being regulated by each state–each with their own appraisal management company regulations.

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NMP: Has the company added any new product enhancements/features?

Cornett: We continue to enhance the functionality and features of our products. We just finalized a partnership with Platinum Data Solutions, a provider of appraisal verification tools and are now able to offer all customers, RealView, a component-based business rules engine that automates and simplifies the appraisal verification process. In addition, key interfaces have been completed with CoreLogic, Lender Processing Services, RealEC, and currently a la mode inc.’s Mercury Network.

ValuTrac is also built to be 100 percent compatible with mobile devices, including iPhones, iPads, etc. The ability for ValuTrac to be accessible via any mobile device allows appraisers to provide a higher level of service with quicker responsiveness to their customers’ needs, significantly enhancing communication between ValuTrac customers and their appraiser vendors. We are set to launch a new and improved mobile Web site this year which will optimize usability and allow our customers and appraisers to easily and efficiently access their site on the go.

ant appraisal management solution to minimize business risk. These factors will continue to be the driving forces behind our growth and product development.

transferring appraisals loan using an appraisal transferred

by Lender A. Lender B determines with written assurances that the appraisal was obtained in a manner consistent with AIR. This conforms to Lender B’s requirements for appraisals and is otherwise acceptable. Will Freddie Mac hold Lender B liable for remedies if it is discovered after the transfer that Lender A did not obtain the appraisal in a manner consistent with AIR? n Yes. As with all other representation and warranties under the Guide, Freddie Mac will hold Lender B, the lender who sold the loan to Freddie Mac, fully responsible for any violations of AIR and the Guide’s requirements.

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Appraisers and lenders have the opportunity to collaborate on a regular basis, and with a greater degree of appreciation for the standards and rules that govern appraisers’ actions, these working relationships will only be enhanced to the benefit of both parties.

Richard L. Borges II, MAI, SRA, is the 2013 president of the Appraisal Institute, the nation’s largest professional association of real estate appraisers. Based in Chicago, the Appraisal Institute has nearly 23,000 professionals in almost 60 countries. He may be reached by phone at (888) 756-4624 or e-mail aiservice@appraisalinstitute.org.

mortgage lead buying guide Closing the sale to your Internet leads

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Again, this is a simple concept. The quicker you contact the lead, the better the chance of closing the sale. The first thing you should do is make contact. Once you have made contact with the lead ask questions and find out what they are looking for. After this initial contact you can follow up with a quote and answers to their questions. Quick response, quick response, quick response!

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Questions to ask your lead generation company These are the not so obvious, but very important questions to ask: n What is your lead return policy? It is vital that you find this out before purchasing Internet mortgage leads.

Bad leads are worthless to you, and at approximately $40 each, this can get expensive really quick. No batch of leads will be completely accurate, but you want to make sure that the percentage that is bad is not greater than 15 percent. Tip … ask the company what makes a lead returnable.

What makes the lead invalid?

Different companies will have different policies on what constitutes a bad lead. n How many times are your leads sold?

When purchasing leads, you must make sure those companies are not overselling the leads they generate.

The best lead is an exclusive mortgage lead, meaning you are the only person the lead was sold to. Exclusive mortgage leads are more expensive, but you are ensured that you should be the only person receiving the lead. If the lead isn’t exclusive find out how many other times the lead has been sold. The more mortgage brokers that receive the same lead the less chance you have of closing the sale. n What filters are available for your leads? Filters allow you to set criteria

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for the mortgage leads you receive.

Example: You could specify that you only want leads for mortgage seekers that have an ‘Excellent’ credit rating or you could specify that you only want leads from California. Also, there are several mortgage programs available so try to find a lead provider that is able to generate leads for the hot lead products; like VA loans or HARP refinance for example. n How are the leads delivered? Find out what format the leads are delivered.

Leads may be delivered in text format, Microsoft Excel, e-mail, etc. Make sure it is a format you are able to work with.

You will get the best conversion if you work with a lead management system also known as a CRM. If you have your own CRM, you can have the lead provider “post” the leads live into your account where you can manage your leads. This will help improve contact and conversion ratios. n How do you generate your leads? Find out what method the company uses to generate Internet mortgage leads.

Make absolutely sure there is no incentivizing. Incentive-driven traffic are prospects that are filling out the form to get something for free … be it a free credit report or a free loan calculator.

This may determine that they are in the market, but it doesn’t mean they filled out the form to speak with you.

The best traffic is search traffic. This means the borrower is online right now keyword searching for assistance with their home loan.

Joshua Conklin is director of business development at MortgageLeads.org and is an authority in the lead generation space.

Joshua has more than 14 years of experience at developing strategic marketing platforms for the nation’s tops lenders and brokers nationwide. He may be reached by phone at (800) 848-7086, ext. 201 or e-mail josh@mortgageleads.org.

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United States Appraisals combines nationwide coverage with personalized, world-class service. From fast turn-times to rigorous quality assurance and delivery guarantees, we bring much needed confidence to the valuation process.

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Meadowbrook loan originators make 33% more money with Meadowbrook than with any other company they worked for.

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StreetLinks Lender Solutions provides an innovative and comprehensive suite of valuation and service solutions used by lenders, servicers and appraisers nationwide to improve everyday business operations.

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Our commitment to quality and service, embodied by our partnership approach to clients and appraisers, continues to set us apart as the nation’s premier lending solutions partner.

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VANGUARD FUNDING LLC www.unleashVpower.com (516) 824-3233 srand@vanguardfunding.net

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NEW LOOK NEXT MONTH! Mortgage Professional Resource Registry will have a new look starting in the May 2013 edition!

Credit Reporting

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

Document Preparation

Loan Origination Systems

Robertson | Anschutz 800-343-7160 sbertrand@radocs.com www.radocs.com/info.html

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

Mortgage Loan Closing Document Preparation & Compliance Services Fulfillment Services Including Pre-Funding Review & Post-Closing Interfaces with Leading Loan Origination Software Systems Foreclosure – Loss Mitigation Services

Document Preparation (SaaS)

Direct Mail

Docs on Demand 800-343-7160 stephen.bertrand@docsondemand.net www.docsondemand.info

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

Marketing Services

Mortgage Loan Closing Document Preparation & Compliance Software Loan Documents and Compliance – Web-based/SaaS – Easy to Use Intuitive – Secure and Reliable – Integrates with Leading LOS Free Setup and Support – Extensive Compliance Audits

Employment Services TagQuest www.myharpleads.com TagQuest.com 888-717-8980

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8520 Macon Rd. Ste 2 Cordova, TN 38018 info@mcmf.net | 615-477-7118

TagQuest is a full service marketing firm created specifically for the ever changing mortgage business. We have tested and proven campaigns for FHA -VA - HARP - CONVENTIONAL loan types.

TagQuest knows what it takes to generate quality leads whether through direct mail marketing, telemarketing, internet leads, data lists, tracking systems, or any combination thereof. TagQuest will brand your company, prepare targeted marketing campaigns that generate interest in your company, and most importantly, show you how to turn sales leads into repeat customers.

This 16 page, full color, quarterly publication, provides financial literacy tools in a concise, unbiased, easy to understand format.

My Guide is offered in traditional magazine print, as well as our newest electronic flipbook version, bringing “flipping through a magazine” experience right to your desktop Contact me today to learn more about this one of a kind opportunity!

Leads TagQuest ................................................................888-817-8980 CUSTOMIZE YOUR CAMPAIGNS! FHA - HARP - VA Leads, Loan Modification, Debt Consolidation, Direct Mail, Data List, Live Transfers, Internet Leads – tagquest.com

If your ad was here, you would be seen by 191,181 Mortgage Professionals looking for resources to help them in their business.

The Resource Registry is a directory of lenders (wholesaler or retail that are recruiting), affiliated services and resources that is seen by more than 191,181 active Professionals.

Call 516-409-5555 ext. 4 to register your company.

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Titan List and Mailing Services, Inc. is a direct marketing agency that offers a complete range of advertising and design services.

The firm specializes in data lists (mail/phone), printing, direct mail, graphic and website design as well as internet and SEO marketing. Starting in 1998, the company has, since then employed highly skilled individuals who have considerable experience regarding marketing trends. The company manages the complete in-house campaign themselves including Design, Data Lists, Printing, Postage, and Mailing.

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE

Titan List & Mailing Services, Inc. 1020 NW 6th St Suite D, Deerfield Beach, FL. 33442 (800) 544-8060 www.TitanLists.com

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MCMF developed My Guide, a Premier Credit & Financial Education Magazine that you can customize with your LOGO and Ad Pages to feature your organization as well as provide your borrowers a go-to-guide for credit and financial resources, empowering them to make the most informed financial decisions.

Recruitment

Wholesale/Correspondent Lenders

Wholesale Lenders

American Financial Resources, Inc. Jim Melchior, National Sales Director 502-882-0529 www.AFRWholesale.com

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

American Financial Resources’ Wholesale Division is one of the country’s leading wholesale lenders. Recently ranked #2 in total sponsored FHA loans closed, AFR officers a wide variety of products including: • Conventional • Freddie Mac Open Access and Fannie Mae DU Refi Plus • USDA • Manufactured Housing • VA • One-Time Close Construction • FHA 203k full and streamline rehabilitation loans

HomeBridge is a national wholesale lender offering both conventional and government products. We are committed to providing the highest value to our clients through competitive pricing, unique product offerings, superior customer service, and state-of-the-art technology.

Currently expanding and hiring experienced Wholesale Account Executives nationwide.

Please send your resume to marketing@homebridge.com.

Building bridges to success, one loan at a time.

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

Valuation Services 62 Close Jumbo Loans Others Cannot

Veros Real Estate Solutions 2333 North Broadway, Suite 350 • Santa Ana, CA 92706 (866) 458-3767 www.veros.com • @verosres (Twitter)

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Veros Real Estate Solutions is a premier technology leader in the mortgage industry and proven leader in enterprise risk management and collateral valuation services. Veros combines the power of predictive technology and data analytics for advanced automated solutions.

Service more jumbo borrowers with New Penn’s Jumbo Advantage portfolio product 877-930-PENN www.GoNewPenn.com Jumbo Advantage Highlights: • Market leading jumbo rates • Loan amounts up to $2 million • Cash out up to $400,000 • FICO down to 680 • Expanded loan-to-value (LTV) up to 85% (no MI) • Expanded debt-to-income ratio (DTI) up to 50%

Real Estate Mortgage Network, Inc. www.remnwholesale.com 866-933-6342 REMN has FHA, USDA, 203k, VA and Conventional solutions to fit the needs of your customers. But, at REMN, our most valuable product is our people. The REMN Sales and Operations Teams give you - and your loans - the time and attention that you deserve. Even better, at REMN, same-day approvals are guaranteed.* You can rely on us to get the little, yet vital, things taken care of on time.

Interested in joining our Wholesale Division?

Send your resume to aerecruiting@remn.com

The Direct Path into the Reverse Mortgage Market.

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

The Lykken on Lending RADIO PROGRAM

Sign-on weekly at

nmpmag.com/lykkenonlending

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

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

Wholesale/Residential

CBC National Bank 3010 Royal Boulevard South, Ste. 230 Alpharetta, GA 30022 888-486-4304

MORTGAGE PROFESSIONAL

RESOURCE REGISTRY

CBC National Bank is one of the nation’s fastest growing wholesale lenders offering Conventional, FHA, VA, and USDA. The most important aspect of being a leader in today’s market is the ability to build and maintain a meaningful relationship with each customer. We understand that these meaningful relationships coupled with competitive pricing and efficient technology are the pillars of today’s lending environment.

We are hiring Loan officers in the Southeast. GA, FL, AL, TN, NC,SC. Contact Gabe Santiago our Corporate Recruiter at gsantiago@cbcnationalbank.com for further details.

Big Enough to MATTER…Small Enough to CARE

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The Resource Registry is a directory of lenders (wholesaler or retail that are recruiting), affiliated services and resources that is seen by more than 191,181 active Professionals.

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Mortgage Professional Resource Registry

calendar

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OF EVENTS

To submit your entry for inclusion in the National Mortgage Professional contact information, to newsroom@nmpmediacorp.com.

Sunday-Wednesday, April 14-17 Mortgage Bankers Association (MBA) 2013 National Fraud Issues Conference Westin Diplomat 3555 South Ocean Drive Hollywood, Fla. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.

Thursday, May 9 Maryland Mortgage Bankers Association (MMBA) 2013 Annual Conference “Surviving & Thriving in Today’s Mortgage Industry” Doubletree by Hilton Hotel Columbia 5485 Twin Knolls Road Columbia, Md. For more information, call (443) 989-8534 or visit www.mdmba.org.

Thursday, April 18 Florida Association of Mortgage Professionals (FAMP) Palm Beaches Chapter 2013 Annual Trade Show Embassy Suites 1601 Belvedere Road West Palm Beach, Fla. For more information, call (561) 320-3267 or e-mail fambpb@bellsouth.net.

Wednesday-Thursday, April 24-25 Mortgage Bankers Association (MBA) 2013 National Advocacy Conference Hyatt Regency Washington on Capitol Hill 400 New Jersey Ave NW Washington, D.C. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.

Tuesday, May 14 Illinois Association of Mortgage Professionals (IAMP) 2013 Spring Conference & Trade Show Location to be determined For more information, call (630) 916-7720 or visit www.iamp.biz.

Tuesday-Wednesday, May 14-15 National Reverse Mortgage Lenders Association (NRMLA) 2013 Western Regional Meeting Hyatt Regency Irvine 17900 Jamboree Road Irvine, Calif.

For more information, visit www.nrmlaonline.org.

Sunday-Tuesday, May 19-21 Mortgage Bankers Association of Georgia (MBAG) 42nd Annual Convention Hilton Sandestin Beach Golf Resort & Spa 4000 S. Sandestin Boulevard Destin, Fla. For more information, call (478) 743-8612 or visit www.mbag.org.

Sunday-Wednesday, May 19-22 Mortgage Bankers Association (MBA) 2013 Legal Issues/Regulatory Compliance Conference Boca Raton Hotel 501 East Camino Real Boca Raton, Fla. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.

Sunday-Wednesday, October 27-30 Mortgage Bankers Association (MBA) 100th Annual Convention & Expo Walter E. Washington Convention Center 801 Mt. Vernon Place Washington, D.C. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.

JUNE 2013 Sunday-Tuesday, June 9-11 2013 Ultimate Mortgage Expo Tropicana Resort & Casino 2831 Boardwalk Atlantic City, N.J. For more information, call (860) 922-3441 or e-mail info@agilityresourcesgroup.com.

JULY 2013 Wednesday-Saturday, July 31-August 1 Florida Association of Mortgage Professionals (FAMP 2013) Annual Convention “Here We Grow Again” Rosen’s Shingle Creek 9939 Universal Boulevard Orlando, Fla. For more information, e-mail convention@myfamp.org or visit www.famb.org.

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

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MAY 2013 Sunday-Wednesday, May 5-8 Mortgage Bankers Association (MBA) 2013 National Secondary Market Conference & Expo New York Marriott Marquis 1535 Broadway New York, N.Y. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.

OCTOBER 2013 Friday-Tuesday, October 18-22 NAMB National 2013 Harrah’s Las Vegas 3475 Las Vegas Boulevard South Las Vegas, Nev. For more information, call (972) 758-1151 or visit www.namb.org.

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APRIL 2013 Sunday-Wednesday, April 14-17 2013 National Technology in Mortgage Banking Conference & Expo Westin Diplomat 3555 South Ocean Drive Hollywood, Fla. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.

Sunday-Wednesday, May 19-22 Mortgage Bankers Association (MBA) 2013 Commercial/Multifamily Servicing & Technology Conference Arizona Biltmore 2400 East Missouri Avenue Phoenix, Ariz.

For more information, call (800) 793-6222 or visit www.mortgagebankers.org.

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Calendar of Events, please e-mail the details of your event, along with

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