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

Pennsylvania Association of Mortgage Brokers P.O. Box 390 Wilkes Barre, PA 18703-0390 Web site:

Paul Logan Jim Mahler Jr. Wayne Angelo Tom Constan Lou Cesare Rose Stancato John Anthony Michael D’Alonzo, CMC Jami Braafhart James Clarke George Hanzimanolis, CRMS Paul Krause Tony Piestrak Walter Scott Jr. Beth Stephans

STATE OFFICERS Phone # President (800) 295-1020 President-Elect (717) 299-6801, ext. 27 Vice President (717) 397-7500 Secretary (610) 690-7400, ext. 228 Treasurer (570) 824-7811 Immediate Past President (610) 430-6901 Board Member (717) 591-3278 Board Member (215) 657-9600 Board Member (717) 731-9700 Board Member (724) 453-0335 Board Member (570) 620-9561 Board Member (717) 269-4957 Board Member (570) 207-6334 Board Member (215) 669-3273 Board Member (610) 977-0662

Paul Krause Tony Piestrak Wayne Angelo Beth Stephans James Clarke

REGIONAL LEADERSHIP Central Chapter Governor (717) 269-4957 North East Governor (570) 207-6334 South Central Governor (717) 397-7500 South East Governor (610) 977-0662 Western Governor (724) 453-0335

Jim Mahler Jr. Sandy Fisher John Anthony Wayne Angelo Paul Logan Michael D’Alonzo, CMC Paul Krause George Hanzimanolis, CRMS Walter Scott Jr. Jami Braafhart Lou Cesare John Anthony Larry Frank, CRMS

COMMITTEE CHAIRS By-Laws Committee (717) 299-6801, ext. 27 By-Laws/Ethics Committee (215) 852-5978 Communications Committee (717) 591-3278 Community Relations Committee (717) 397-7500 Conference Committee (800) 295-1020 Education Committee (215) 657-9600 Finance Committee (717) 269-4957 Legislative Committee (570) 620-9561 Membership Committee (215) 669-3273 Membership Committee (717) 731-9700 Nominating Committee (570) 824-7811 Past President’s Council (717) 591-3278 Past President’s Council (215) 510-9701

Sarah Schmidt

PAMB OFFICE Administrative Assistant (717) 737-2117



For information on all PAMB events, call (732) 596-1619.

In the proposed settlement, LPS stipulates to important facts uncovered in the investigation, including the practice by DocX of so-called ‘“surrogate signing,” the signing of documents by an unauthorized person in the name of another and notarizing those documents as if they had been signed by the proper person, as well as other improprieties in the document execution and recordation or filing process. Upon court approval of the settlement, LPS will undertake a review of documents executed during the period of Jan. 1, 2008-Dec. 31, 2010 to determine what documents, if any, need to be re-executed or corrected. LPS will make periodic reports to the Attorneys General of the status of its review and/or modification of documents. LPS will make a toll-free number available to consumers, who may call and request review and correction of any documents executed by LPS. Pennsylvania served on the team of investigating states’ Attorneys General, and is joined in the settlement by: Alabama, Alaska, Arizona, Arkansas, California, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and the District of Columbia.

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n Prohibits LPS (including DocX) from engaging in the practice of surrogate signing of documents; n Ensures that LPS has proper authority to sign documents on behalf of a servicer, if in fact it is signing documents; n Requires LPS to accurately identify the authority that the signer has to execute the document and where that signer works; n Prohibits LPS from notarizing documents outside the presence of a notary and ensures that notarizations will comply with applicable laws; n Prohibits LPS from improperly interfering with the attorney-client relationship between attorneys and services; n Prohibits LPS from incentivizing or promoting attorney speed or volume to the detriment of accuracy; n Requires LPS to ensure that foreclosure and bankruptcy counsel or trustees can communicate directly with the servicer; n Requires LPS to have enhanced oversight and review of processes over third parties it manages, including those entities that perform property preservation services; n Prohibits LPS from imposing unreasonable mark-ups or other fees on third party providers? default or foreclosure-related services; n Requires LPS to establish and maintain a toll-free phone number for consumers concerning document execution and property preservation services (including winterization, inspection, preservation, and maintenance); and n Requires LPS to modify mortgage documents that require remediation when LPS has legal authority to do so and when reasonably necessary to assist a consumer or when required by state or local laws.


MARCH 2013 Sunday-Thursday, March 10-14 30th Annual Regional Conference of Mortgage Bankers Trump Taj Mahal Casino Resort Atlantic City, N.J.

Pennsylvania Attorney General Kathleen G. Kane has announced that her office, along with 45 other Attorneys General and the District of Columbia, have reached a $120 million multi-state settlement with Lender Processing Services, Inc. and its subsidiaries, LPS Default Solutions and DocX. The proposed settlement resolves allegations that the Jacksonville-based company, which primarily provides technological support to banks and mortgage loan servicers, robo-signed documents and engaged in other improper practices related to mortgage loan default servicing. When it is approved by the court, the settlement will require LPS and its subsidiaries to reform their business practices and, if necessary, to correct documents they executed to assist the homeowner. Pennsylvania’s share of the settlement is approximately $3.4 million. The lawsuit and the proposed settlement are being filed today in the Commonwealth Court and will require Court approval. “I’m very pleased to join with other Attorneys General in this settlement,” said AG Kane. “We will use this money to protect consumers and prevent them from being ripped off. The settlement holds these companies accountable for the alleged wrongdoings and puts in place reforms of business practices, to ensure proper handling of mortgage-related documents in the future.” The proposed settlement, to be filed separately in each participating state, will also require proper execution of documents and prohibit signatures by unauthorized persons or those without first-hand knowledge of facts attested to in the documents, enhanced oversight of the default services provided, and a review of all third-party fees to ensure that the fees have been earned and are reasonable and accurate. The settlement also accomplishes the following: v


State of Pennsylvania Nets $3.4 Million in LPS Robo-Signing Settlement

30th Annual Regional Conference of Mortgage Bankers Sunday-Thursday, March 10-14 Trump Taj Mahal Casino Resort Atlantic City, N.J. The challenges we will be confronting in 2013 are formidable and we have designed this Regional Conference of MBAs to address them and to get our attendees some meaningful insight as to where the industry is headed in the coming years. Mortgage bankers are facing a new kind of regulation that can be transformative in terms of the impact on loan production types. This year’s conference will cover the current issues and much more. During the two days of residential portion of the conference. In addition to our special General Session, a look at the industry in 2013 and beyond from a variety of perspectives, we will hear from the director of the Consumer Financial Protection Bureau (CFPB) for the northeast region, and David H. Stevens, president of Mortgage Bankers Association (MBA). We will continue our successful format by having the commercial lending segment of the conference on Monday and Tuesday, but the Opening Cocktail Reception on Sunday evening. The Commercial Exhibit Hall with lunch will be open Tuesday and the Opening Residential Cocktail Reception will include commercial attendees and be held in the Exhibit Hall on Tuesday evening. On Wednesday, lunch will be provided in the Residential Exhibit Hall immediately following the General Session. The Regulators Roundtable, where attendees can meet regulators face-to-face and have their questions answered, is a popular offering on Wednesday afternoon, followed by the second Residential Cocktail Reception.

Residential/Commercial Property Program (Subject to change)

Tuesday, March 12

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2:00 p.m.-5:00 p.m. ............Hot Topics Forum for Residential and Commercial Mortgage Lending Conference Speakers are invited to attend and lend their expertise to that of the many experienced lenders and brokers attending the Conference who will participate during this Town Hall style session. Bring issues of concern related to your business and get the views of your colleagues and our speakers to aide in your business decisions. 7:00 p.m.-9:00 p.m. ............Opening Residential Networking Cocktail Reception in the Exhibit Hall (Commercial Attendees Invited)




Wednesday, March 13 7:30 a.m.-9:00 a.m. ............Continental Breakfast 8:00 a.m.-9:00 a.m. ............Barry Habib will help you rock the mortgage world! Renowned industry expert Barry Habib provides housing market insight and guidance. This useful presentation builds on your mortgage expertise with fresh facts that can enrich your customer dealings—and increase your market share. Drawing on what he’s learned in his 30 years in the business, Barry takes an in-depth view of today’s financial environment and breaks it down in an easy-to-understand way. Expect Barry to: n Be able to clearly convey existing opportunities within the housing market n Clarify the implications of the current economy n Provide his housing market forecast n Discuss short and long-term interest rates n Explain how to anticipate and react to market shifts

Government Affairs for Weiner Brodsky Sidman Kider PC; Peter Norden, CEO of Real Estate Mortgage Network Inc. (REMN); and Teresa Bryce Bazemore, President of Radian Guaranty. 11:15 a.m.-11:45 a.m. ........Functioning as a Mortgage Banker in the Current Marketplace Presented by John M. Robbins, CMB, Chief Executive Officer and President of Bexil American Mortgage. 11:45 a.m.-12:15 p.m. ........Keynote Speaker: David H. Stevens, President and Chief Executive Officer of the Mortgage Bankers Association (MBA) 12:30 p.m.-5:00 p.m. ..........Exhibit Hall Open 12:30 p.m.-2:45 p.m. ..........Lunch in the Exhibit Hall 1:30 p.m.-3:30 p.m. ............CFPB Panel Our panel will cover CFPB regulations and enforcement, risk retention and the QRM, QM and the ability to repay requirement, LO compensation and the state regulators guidelines under the Federal Rule, CFPB examinations, investigations and hearings. Moderators and speakers of this session will include: Jack Konyk, Executive Director of Government Affairs for Weiner Brodsky Sidman Kider PC; and Ken Markison, Associate Vice President and Regulatory Counsel of the Mortgage Bankers Association (MBA); and a CFPB speaker to be announced. 3:30 p.m.-5:30 p.m. ............Special State Regulatory Panel and Regulators Roundtable Discussions Hear from your Regulators during a panel presentation and follow-up by meeting directly with them during our Roundtable Discussion portion. E. Robert Levy Esq., Conference Chairman; Executive Director, MBA-NJ, NJAMB and MBA-PA will moderate this session. Representing the state of New Jersey will be Thomas M. Hunt, Assistant Division Director, Office of Consumer Finance, Banking Division, New Jersey Department of Banking and Insurance (Invited); Patrick Mullen, Assistant Division Director, Office of Consumer Finance, Banking Division, New Jersey Department of Banking and Insurance; Susan M. Toth, Administrator, Licensing Services Bureau, New Jersey Department of Banking and Insurance; and Diane Scholl Supervisor of Licensing, New Jersey Department of Banking and Insurance. Representing New York will be Rholda L. Ricketts Deputy, Superintendent of Banks, NY State Banking Department (Invited). Representing Pennsylvania will be Donald DeBastiani, Director of Non-Depository Examination, Pennsylvania Department of Banking, Chairman, Multi State Mortgage Committee. And representing Maryland will be Ann Balcer Norton Deputy Commissioner, Office of the Commissioner of Financial Regulation, Maryland Department of Labor, Licensing and Regulation (Invited); and Keisha Whitehall Wolfe, Assistant Commissioner of Non-Depository Oversight (Invited). 6:00 p.m.-8:00 p.m. ............Networking Cocktail Reception: REMN & The Regional Conference Cocktail Reception at Revel

Thursday, March 14 8:00 a.m.-9:00 a.m. ............Continental Breakfast

9:00 a.m.-9:15 a.m. ............Welcome/Comments E. Robert Levy, Esq. Conference Chairman; Executive Director, MBA-NJ, NJAMB and PAMB) will outline the conference events.

9:00 a.m.-10:30 a.m. ..........Concurrent Breakout Session: How Will the CFPB Regulations Impact Fannie Mae Products? Speaker of this session will be Jennifer Whip, Vice President, Fannie Mae.

9:15 a.m.-11:15 a.m. ..........Panel I: What Will the Industry Look Like in 2013 and Beyond? The Panel will discuss liquidity, risk retention and effects of QRM, ability-to-repay issues, QM, future role of the GSEs (where will they be?) FHA, Ginnie Mae, State Regulation and enforcement, the role of the rating agencies, the role of the MI’s, secondary marketing issues, and the impact of HARP. Q&A will follow. Moderators of Panel I will include Regina M. Lowrie, CMB President and CEO of Vision Mortgage Capital LLC; and Michael L. Vitali Sr., Executive Vice President of TBI Mortgage Company. The speakers and panelists will include Meg Burns, Senior Associate Director for Congressional Affairs and Communications for the Federal Housing Finance Agency (FHFA); Gary Cipponeri SVP & Director of Capital Markets for Chase Home Finance; Jack Konyk, Executive Director of

9:00 a.m.-10:30 a.m. ..........Concurrent Breakout Session: Getting Ready for CFPB Exams The CFPB examination process will be closely examined from the CFPB and industry perspectives. The panel will also discuss how best to prepare for the CFPB exam 10:45 a.m.-1:00 p.m. ..........Fair Lending and Unfair, Deceptive and Abusive Practices Explained Fair Lending and Unfair, Deceptive and Abusive Practices, two key areas of focus for the CFPB during exams, will be explained and compliance methods discussed. 1:00 p.m. ............................Conference Ends

For more information, call (732) 596-1619 or visit






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February 2013




Volume 5, Number 2


Web Site



A Special Look at “It’s All About Marketing!” Lead Generation and Conversion Strategies for Online Mortgage Marketers By Scott Schang ..............42

America’s Choice Home Loans .......................... ............................................25 Brokers Compliance Group................................ ........................41 Calyx Software ................................................ ......................................12 CBC National Bank .......................................... ............................................19

Generating New Leads With Direct Mail: Back to Basics By Molly Greene ........................................43

Cendix ............................................................ ................12

The Customer Experience as a Competitive Advantage By Steven J. Ramirez ..........................................45

Data Facts........................................................ ..............................................49

Top 10 Tips to Grow Your Mortgage Business By Judith Brower Fancher ......................................................46

Equity Loans LLC .............................................. ......................................5

The Four Elements of a Perfect Marketing Plan By Joy Gendusa ..................................................................47

First Guaranty Mortgage Corp. .......................... ......................................39

New Ideas to Make Your Direct Mail Stand Out By Jean LeBlanc ..................................................................48

HomeBridge .................................................... ..........................11

Lead Generation Through Organic Search and SEO By Kat Hollowell & Steven Muldrow ..........................................48

Credit Plus, Inc. .............................................. ....9

Document Systems, Inc./DocMagic .................... ............................................29 .................................... ..........................14 & 44

Guaranteed Home Mortgage Company .............. ............................................37

Hometown Lenders ..................................13 Icon Residential Lenders, LLC ............................ ......................................17 Maximum Acceleration Coaching ...................... ........................................27


MBA-NJ/NJAMB ................................................ ......................51

What to be Aware of When Marketing in Multiple States By Bob Caruso ......................................................................4

Menlo Park Funding ........................................ ................................19

Meadowbrook Financial Mortgage Bankers Corp. .. ..................................31

The Elite Performer By Andy W. Harris, CRMS ........................4

NAPMW .......................................................... ..................................................16

Three Reasons You Should Join the Professionals at Now By Carolyn Warren................................6

PB Financial Group Corp. .................................. ......................................12

Social Media and Networking Compliance

Residential Home Funding Corp. ...................... ..........................................15

By Jonathan Foxx ..................................................................................8

HECM for Purchase Transaction Volume Increases By Ralph E. Rosynek Jr. ..............................................................10 For Managers Only By Dave Hershman ..............................18 NAMB Perspective..........................................................20 HECM to Undergo Major Changes ................................24 Maximize Your Option Options to Minimize Your Surprises By Sharon Bitz ............................................26

Bonded With NAMB By Mason Grashot, CPA ........................30 CFPB Publishes Ability-to-Repay Rule By Laurie Spira ......32 NMP Mortgage Professional of the Month: Don Iannitti, President and CEO of DocMagic Inc.

By David J. Coster ................................................................................34

Why is the Regional Conference of MBAs so Special? By E. Robert Levy Esq. ......................................40 The Last Frontier By Andrew Liput ..............................................50 NMP’s Book Review: “Why Some Firms Thrive While Others Fail” By Tom LaMalfa ....................................53

Columns NMP News Flash: February 2013 ..................................12 New to Market ................................................................36 NMP Calendar of Events ................................................60

TagQuest ........................................................ ..............................................33 The Bond Exchange .......................................... ................................18 Titan List & Mailing Services, Inc. ...................... ................................Inside Back United Wholesale Mortgage .............................. ........................................Back Cover


Heard on the Street ........................................................6

Streetlinks LLC ................................................ ....................Inside Front Cover


Lack of Short Sale Code in Credit Reporting System Creating Hardship for Many Consumers By Terry W. Clemans ............................................................28

REMN (Real Estate Mortgage Network)................ ..............PA3 & 7 v

Lykken on Leadership By David Lykken ..............................14


February 2013 Volume 5 • Number 2 1220 Wantagh Avenue • Wantagh, NY 11793-2202 Phone: (516) 409-5555 • Fax: (516) 409-4600 Web site: STAFF Eric C. Peck Editor-in-Chief (516) 409-5555, ext. 312 Joel M. Berman Publisher - CEO (516) 409-5555, ext. 310 David J. Coster Senior Editor Robert Peter Ottone Assistant Editor (516) 409-5555, ext. 314 Joey Arendt Art Director Jon Blake Advertising Coordinator (516) 409-5555, ext. 301 Beverly Koondel National Account Executive (516) 409-5555, ext. 316 Scott Koondel Billing Coordinator (516) 409-5555, ext. 324 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 ARTICLE SUBMISSIONS/PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck at (516) 409-5555, ext. 312 or e-mail The deadline for submissions is the first of the month prior to the target issue. SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail or visit Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600. Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the authors alone and do not imply the opinion or endorsement of NMP Media Corp., or the officers or members of National Association of Mortgage Brokers and its State Affiliates (NAMB), National Association of Professional Mortgage Women (NAPMW), National Credit Reporting Association (NCRA) and/or other state mortgage trade associations. Participation in NAMB, NAPMW, NCRA, and/or other state mortgage trade associations events, activities and/or publications is available on a non-discriminatory basis and does not reflect the endorsement of the product and/or services by NMP Media Corp., NAMB, NAPMW, NCRA, and other state mortgage trade associations. National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, and/or other state mortgage trade associations do not make any misrepresentations or warranties concerning the regulatory and/or compliance aspects of advertisers, products or services and/or the editorial content contained in NMP Media Corp. publications. National Mortgage Professional Magazine and NMP Media Corp. reserve the right to edit, reject and/or postpone the publication of any articles, information or data. MO


How am I doing? Many of you may not know my early roots before I was a publisher or my previous career as a mortgage broker, but I had the opportunity to work in government. I started in 1971 as a $28 a day administrative aide in the administration of the City of New York under Mayor John V. Lindsay, continued through the administration of Mayor Abraham Beame and left as a Deputy Commissioner in 1978 under the administration of Mayor Ed Koch. I was in my 20s, and those seven years of employment provided me with a major foundation of what I brought with me into the private sector when I exited my government career. I am sharing this retrospective not out of nostalgia, but to pay tribute to the last mayor I worked for who recently passed away at the age of 88, Mayor Ed Koch. Nationally, before, during and after his reign as the mayor of the City of New York, he was known as a character whose persona and energy enveloped every day of his life. What stands out most was his ability to deal with the toughest of financial times for the city of New York with a focused plan to overcome every obstacle with a smile on his face and a tremendous amount of determination. His positive mental attitude until the day he passed carried him through success after success, and the City of New York survived during his terms of office as mayor solely because of that personality trait alone. There wasn’t a day in his life when he didn’t walk into a room and ask, “How am I doing?” He knew that the responses he’d receive would sometimes be complimentary and he invited criticism as well, using both responses to mold his outlook on the future. How many of us would feel comfortable every day waking up and asking our family, friends and fellow workers, “How am I doing?” I don’t think there are many, but think of how refreshing that would be to get that type of honest feedback to carry forth your personal and business agenda. We go through life every day sometimes thinking that what we are doing is right and weigh that solely on what we perceive is both “correct” and “successful.” The mortgage industry, for me, has and continues to be one in which I am both proud to be part of and continues to move up and down with the ever-changing economy. I hope that the chosen few mortgage professionals who survived and thrived through those difficult years of the past stop every so often, if not daily, and take the chance to ask their employees, co-workers and yes, even their clients, and ask “How am I doing?” I assure you, just as the iconic Mayor Ed Koch found out, the revelations of those responses, both positive and negative, will inspire you for the rest of your days. Rest in peace Mayor Koch, and by the way … you did real good!

March on the Hill As we segue into March, NAMB—The Association of Mortgage Professionals is gearing up for its annual pilgrimage to Washington, D.C. at the association’s Annual Legislative & Regulatory Conference. This year, with issues such as the qualified mortgage (QM), the Consumer Financial Protection Bureau (CFPB) and their LO compensation rules, the ability-torepay rule, the qualified residential mortgage (QRM) rule and much more, now is the time to book you plans to be in D.C. from Sunday-Tuesday, March 10-12. Be among your fellow peers and share in this unique opportunity to meet and educate your elected officials on the issues that are of importance to your livelihood. You are, in essence, their lifeblood. You are their constituents. They look to you to stay in office. They look to you for your votes. It only makes sense to let them know your concerns and have your voice be heard. Attendees will be provided with talking points and be guided through how to approach the Lobby Day portion of the event. In addition to the actual Lobby Day, you will also have the opportunity to learn from some of the industry’s top speakers from Lenders Compliance Group, the MBA, NAR, the SBA and the CFPB. See pages 20-23 of this issue for more information.

And just north on the I-95… Washington, D.C. is not too far from another early March destination, the 2013 Regional Conference of Mortgage Bankers Associations 30th Annual Conference in Atlantic City, N.J. For the past 30 years, mortgage professionals from across the nation have attended this event and for good reason. Between its Commercial Property Program and Residential Program, this event has something to offer to all who attend. See the article by E. Robert Levy, executive director of the Mortgage Bankers Association of New Jersey, on page 40 of this issue for all the details on yet another can’t miss March event.

How do you reach your customer base? Marketing. Bottom line … marketing is a necessity in today’s mortgage marketplace, and if you do not market correctly to the correct base, you are wasting both time and money. This month, we focus on marketing and take varied looks at how proper marketing can boost your presence in the industry. From ideas on lead generation and online marketing from Scott Schang of Broadview Mortgage on page 42, to Kat Hollowell & Steven Xavier Muldrow’s piece on lead generation through SEO on page 48, we bring together some marketing ideas that will ideally boost your bottom line. Are you a traditionalist in the sense that technology and marketing is not your cup of tea? If so, the old standby of direct mail is tackled as well, as Molly Greene of Guaranteed Home Mortgage discusses ways in which to generate new leads on page 43, Joy Gendusa of Postcardmania suggests ways in which to dress up your post card mailers on page 47, and on page 48, Jean LeBlanc of Guaranteed Home provides ideas on marking your marketing strategies stand out. Rounding out the section, Judith Brower Fancher of Brower, Miller & Cole provides 10 tips to grow your business through marketing on page 46 and on page 45, Steven J. Ramirez of Beyond the Arc Inc. details how to enhance the customer experience to create not only referrals for the future, but to create a customer for life.

So … how am I doing? As I end this column, I ask our readers to take the time and personally e-mail me at with the answer to the question most frequently asked by Ed Koch, “How am I doing?” I’d love to hear from as many of you out there that can take the time to give me your feedback, both positive and negative, on how National Mortgage Professional Magazine is doing. Let me know what you like, what you don’t like and just exactly what you would like to see. Thank you for giving me this forum for being in the publishing business in the mortgage industry for 20-plus years, and I would only hope that when my run ends, my efforts will likewise be portrayed as “He did good!” Sincerely, RTGAGE PR





Joel M. Berman, Publisher-CEO NMP Media Corp.




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







From The Publisher’s Desk





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:

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

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

President Candace M. Smith, CME (512) 306-6354

Vice President—Northwestern Region Debbie Tofte, GML (425) 483-3359

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

President-Elect Jill Kinsman (206) 344-7827

Vice President—Western Region Lyman King III, CMI, CME (916) 967-4653

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

Senior Vice President Christine Pollard (607) 226-1046

Secretary Sara Vasura (703) 255-7460

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

Vice President—Central Region Kelly Hendricks (314) 398-6840

Treasurer Jeanne Evans, CME (918) 431-0155

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:

Vice President—Eastern Region Katrica J. Driscoll, MML, CME, CMI (919) 877-5683

Parliamentarian Hulene Works (972) 494-2788

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

National Consumer Reporting Association

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

Olga Kucerak, CRMS—Director Crown Lending 328 West Mistletoe v San Antonio, TX 78212 (210) 828-3384 v Linda McCoy—Director Mortgage Team 1 Inc. 6336 Piccadilly Square Drive v Mobile, AL 36609 (251) 650-0805 v Dick Morin—Director Consumers First Mortgage P.O. Box 918 v Kennebunk, ME 04043 207-985-2895 v Valerie Saunders—Director RE Financial Services 13033 West Lindburgh Avenue v Tampa, FL 33626 (866) 992-0785 v

Daphne Large President (901) 259-5105 Maureen Devine Vice President (413) 736-4511 Donald J. Unger Ex-Officio (303) 670-7993, ext. 222 Mike Brown Treasurer (800) 925-6691, ext. 4350 Nancy Fedich Director–Chair Legal Committee (908) 813-8555, ext. 3010 William Bower Director–Chair Tenant Screening Committee (800) 288-4757 Tom Conwell Director–Liaison Legislative Committee (800) 445-4922, ext. 1010

Judy Ryan Director–Chair Strategic Alliance Partnership Committee (800) 929-3400, ext. 201 Renee Erickson Director–Chair New Membership Committee (866) 932-2715 Sharon Bieszk Director (262) 542-1700 Mary Campbell Director (701) 239-9977 Terry Clemans Executive Director (630) 539-1525 Jan Gerber Office Manager/Member Services (630) 539-1525


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

2013 Board of Directors & Staff



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

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

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

What to be Aware of When Marketing in Multiple States By Bob Caruso





It is common practice for banks and lenders to expand into new states with the direct marketing efforts after finding success in their local markets. We commonly encounter clients that learn of a “friend” in another state using an approach with great success and have the desire to do the same in their local market. For these clients, the typical “broad stroke” approach for their data and mail piece design does not apply to all markets. When you are going from state to state, experience and research are paramount to continued success. When building a multi-state marketing campaign, you must recognize that successful campaigns in your current state may not translate into the same results in new markets. What may generate a two percent-plus response in your local market may only produce half of that in a new market with a similar approach. When expanding, multiple aspects of the campaign must come under scrutiny; data selects, mail piece design and product offering are pivotal starting points to maximizing your efforts. Let’s take, for example, a customer who successfully markets FHA streamline loans in California and is looking to expand into the New York market. What changes are necessary to duplicate success in New York? Would the same piece be as effective, or has it been saturated? Are the standard demographics appropriate to the new market, or do they need to be modified in order to accommodate this new potential clientele? Furthermore, is the FHA approach in New York currently profitable, or should it be modified completely to target another program such as HARP 2.0? How do you get around this? By being aware of what your competitors are using, you can exploit the mail pieces they are not, target the demographics they overlook and focus on products that are not as saturated. One of our main focuses when advising clients on multi-state approaches is the saturation rate of their approach and how it relates to their new states. You don’t want to add to the saturation rate by sending a similar mailer to the same prospect pool as your competitors, so we may recommend changing the outer appearance or overall design of the mailer. In addition to the piece, we consider the data selects. Would it benefit them to increase the loan amount or modify the seasoning to capture consumers that their competitors over look? These small tweaks can make or break the success of the campaign. Your current marketing firm should be able to provide their expertise with your newly intended states. Keep in mind that their experience may be the single most important aspect of your multistate marketing efforts. A marketing professional will be able to advise you on the proper steps to take to ensure your efforts aren’t wasted on targeting an already saturated prospect base. While there is not a “crystal ball” for marketing, proper guidance as you expand into new markets will ensure that your efforts are not wasted. Bob Caruso, sales manager and an asset at Titan List and Mailing Services, has specialized in mortgage-specific marketing since 2007. Bob takes a nononsense approach to effective marketing and has demonstrated to his customers the value of effective direct mail marketing. He may be reached by phone at (800) 544-8060, ext. 210 or e-mail

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Get Online! Back in 2009, the National Association of Realtors (NAR) stated that more than 80 percent of homebuyers began their search online. These numbers have significantly increased since then, and I would not be surprised if nearly 100 percent of potential homebuyers, at some point during the homebuying process, at least did some kind of research online. Mobile devices and smartphones are also making these online searches higher than ever. The same is true when consumers are researching mortgage loan programs and interest rates and it’s imperative that you have a local online presence. Reputation and branding is a critical part of marketing. While referrals are the bread and butter of our business, neglecting your online presence can even reduce the number of referral conversions if they cannot find additional information easily accessible online about you or your firm. Online availability should be a requirement for any business, but especially when the business is a local service-oriented establishment relying on new mortgage origination transactions through information, rather than just product sales. There are many benefits associated with having an online exposure and marketing online. Here are just a few:

Customer reviews and testimonials There is no doubt that asking your clients to rate and review you online publicly is the most effective way to close more loans. In my opinion, there is nothing stronger than this by having people call you rather than you calling them. Referred or not, building this positive reputation through the experience of your clients is unmatched. They are your best sales force and best of all they are free. These reviews on popular sites will also help your organic search ratings and search engine optimization (SEO).

“Every year, the marketing landscape changes, every year the customers become more demanding, every year they’re wanting more things. You have to always be sprinting to stay ahead of the competition.” —Jacob Hawkins,

Low cost In comparison to other forms of advertising, online marketing can be much more affordable on conversion comparison and many of the tools are free. If money is budgeted for marketing campaigns online such pay-per-click or other advertising in addition to free tools, it is easy to make the adjustments necessary to obtain the highest return on investment (ROI) possible.

Build your brand With all the competition in the market, you want to stand out and be different. The Internet is the best method to create new content, unique information, blogs and videos that will separate you from the pack. Be creative and stand out to effectively attract new clients.

Targeting and immediate results People who are looking online are interested in information now. They call or e-mail quickly and you can expect real-time results. In addition, you can target specific areas such as the state(s) in which you are licensed. The goal is to attract the clients you are seeking which are those likely to qualify for the products you offer, along with being local in your immediate area.

It is easy to track success Free products such as Google Analytics have the ability to track all site visits, unique visits, time spent on each page, continued on page 54

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Three Reasons You Should Join the Professionals at Now By Carolyn Warren is the new online community where borrowers can meet mortgage professionals as they receive answers to their questions. Savvy originators are joining early to build their reputations and earn rewards. I’ll show you how to do this in a moment; but first, I’ll explain why I think communities like Directly are important and three reasons you should consider becoming a part of it. Five years into the crash, borrowers are still reeling. Homebuyers are frustrated with the mound of paperwork, and they’re baffled by underwriting conditions. Homeowners looking to refinance are being blocked by poor appraisals and stiffer credit requirements. People seeking loan mods complain of being stonewalled or misled with double-talk. All of these folks need answers—and that presents an opportunity. Institutions and regulations are ever-changing—purportedly in an effort to help borrowers—but the reality has been higher costs, slower processing, and continued confusion. Surprisingly, while the Internet is revolutionizing industry after industry, its impact on any aspect of mortgage outside of origination has been minimal. But things are changing. Online real estate communities are springing up around popular real estate websites like Trulia and Zillow, allowing consumers to speak quickly and openly with a broad set of professionals. Many of the extraordinary dynamics of these sites, and social networks like Facebook and LinkedIn, promise to bring a new level of trust and transparency to the area of mortgages. Consumers are sick and tired of feeling like they are in the dark. is the first community designed to help borrowers with specific questions about their mortgages via answers that come from a narrow set of experienced mortgage professionals that provides rewards to the professionals. Here are three specific reasons I think you’ll want to join the site:


1. Reputation. Online reputation has become critical to success. As a Directly professional, you receive a profile page that showcases how you’ve helped consumers. Your reputation helps you and the institution you’re affiliated with.




2. Rewards. On Directly, you earn cash rewards from customers who offer remuneration for help. You can cash these rewards out via PayPal, or double your impact by donating them to the non-profit of your choice. 3. Reach. On Directly, in addition to reaching tens of thousands of borrowers, you can build and cultivate a following (like Twitter) of people you’ve helped in the past, and use this network to drive referrals and a bigger audience. One silver lining to the crash is that many of the unskilled and less scrupulous originators have been flushed out. There’s a chapter in my book called, “Mortgage Stars Who Rock” that refers to the honorable loan officers who work hard to be available to consumers anytime and anywhere they’re needed. Today, consumers are benefiting from online communities that are powered by the true professionals who are focusing their careers on helping people. If this sounds like you, then you will not want to be left behind. I invite you to join me in helping good folks while you earn rewards and build a strong reputation. It only takes a few minutes to submit your application for acceptance at Carolyn Warren is the best-selling author of Mortgage Ripoffs and Money Savers: An Industry Insider Explains How to Save Thousands on Your Mortgage or Refinance. She is the owner of She may be reached at


New DocMagic Facility Wins Prestigious Architecture Award DocMagic Inc. has announced that its new multi-million dollar facility has been recognized by the American Institute of Architects (AIA) with a 2013 AIA Institute Honor Award for Interior Architecture. The 25,000 square foot, state-of-the-art technology center was designed by Rania Alomar Design & Architecture in West Hollywood, Calif. This is the profession’s highest recognition of works that exemplify excellence in architecture, interior architecture and urban design. Selected from over 700 total submissions, DocMagic and 27 other recipients located throughout the world will be honored at the AIA 2013 National Convention and Design Exposition in Denver. “This is a great honor and we are very proud of the new facility,” said Dominic Iannitti, CEO of DocMagic. “We didn’t set out to win an award. We simply wanted the very best facility in the world from which to deliver our equally stellar service. This award is evidence that we have achieved that goal.” DocMagic and its architects wanted to create a space that played to both the virtual aspects of a company that securely transmits highly sensitive information over global networks and the physical aspects of a firm built on a foundation of professional customer service. The AIA’s jury said, “This objective was achieved, in short, with the unique play of light and careful sculpting of passageways that connect the open work spaces,” and called the new DocMagic facility a “beautiful design (that) creates a powerful and fluid space where light dominates.”

the Brooklyn real estate market and are committed to helping borrowers find the right mortgage solution by combining the lowest rates on the majority of products in the industry and best in class service. “With a wave of economic development spurred by zoning changes, tax breaks and other incentives, Brooklyn has become an important real estate market, which increasingly includes new condos. Mortgage Master’s offerings are ideal for this market, and opening an office in Williamsburg is simply a win-win for us and Brooklyn borrowers looking to refinance or purchase a home,” said Paul Anastos, president of Mortgage Master. “From DUMBO to East Brooklyn, the need for personalized mortgage lending has increased in order to help move the economic revitalization of the borough forward and enhance its powerful culture.” “Mortgage Master has been assisting borrowers in Brooklyn for nearly a decade,” said Costakos. “We know these markets inside and out, particularly the condos and co-ops markets. Mortgage Master is privately-owned with a history of exceptional volume and quality over the past 25 years, which allows us to provide a full-suite of lending solutions where other small and large lenders fall short. We are here to help borrowers, and fill the void that was once dominated by mortgage brokers who have left this market.” “The arrival of the Brooklyn Nets is just one of the many changes we have seen in various neighborhoods over the past decade. We are proud to be part of history, providing the fundamental foundation of sustainable homeownership for families throughout Brooklyn,” said Lucia.

Nationstar to Acquire Approximately $215 Billion in Bank of America Assets

Mortgage Master Opens New Location in Brooklyn, N.Y.

Mortgage Master has announced that it has opened a new branch in New York, the Brooklyn neighborhood of Williamsburg. Mortgage Master’s new Brooklyn will be led by Co-Branch Managers Peter Costakos and Peter Lucia. Costakos and Lucia bring 27 years of combined residential lending experience to

Nationstar Mortgage Holdings Inc. has announced that Nationstar Mortgage LLC, a wholly-owned subsidiary, has signed a definitive agreement to acquire nearly $215 billion in residential mortgage servicing rights (MSRs), as measured by unpaid principal balance (UPB) as of Nov. 30, 2012, and certain other assets from Bank of America (BofA). Approximately 47 percent of the servicing portfolio, as measured by UPB, consists of loans that are owned,

tutional investors. This new seamless interface establishes system-to-system transaction processing that dramatically speeds up the ordering and appraisal management process for lenders by eliminating duplicate data entry, providing real-time appraisal process status updates and robust communication functionality between lenders and their valuation vendors. “Our interface to Global DMS’ eTrac system utilizes a three-point integration to allow our clients to easily order and manage appraisals; check realtime order status; and receive completed appraisal files back into the LendingQB LOS E-Docs Platform,� said Binh Dang, president of LendingQB. “Most LOS platforms and valuation soft-

ware systems don’t integrate seamlessly with one another, which makes it difficult for lenders and their appraisal management companies (AMCs) to share crucial data and communicate effectively.� LendingQB has also announced that its Web-based loan origination system (LOS) has been integrated with Mortgage Capital Trading’s (MCT) proprietary HALO (Hedging And Loan sales Optimization) platform. The interface, dubbed HALO-Link, allows for pipeline and trade data to automatically be exchanged from LendingQB’s LOS to the HALO platform. “Lenders are increasing turning to the utilization of a hedging strategy in secondary marketing to achieve greater

profitability,� said David Colwell, vice president of corporate strategy at LendingQB. “The integration between our LOS and MCT’s HALO-Link enables the timely delivery of data so that loans can be hedged more frequently and accurately. Eliminating manual steps in the data exchange process reduces errors, mitigates risk, saves money and ultimately drives profitable loan sales to investors. It’s a win-win for our mutual customers.� MCT’s bi-directional HALO-Link interface enables for consistent time or change-based delivery of loan pricing, trade and pipeline data from the product and pricing engine (PPE) within







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Global DMS has announced that it has integrated its valuation management software with LendingQB’s end-to-end, browser-based loan origination system (LOS). This integration is part of a major initiative to advance valuation compliance by tightly integrating the company’s eTrac platform with LOS vendors. As a result, the entire appraisal ordering and management process becomes seamless, efficient, cost effective and fully compliant with state and federal regulations. Without having to leave LendingQB’s LOS, lenders are now able to access Global DMS’ eTrac platform to handle all of their valuation needs, including automated valuations, ordering full appraisals, automated appraisal reviews, and delivery to the Uniform Collateral Data Portal (UCDP) and insti-

continued on page 10 v

insured or guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae, with approximately 53 percent of the portfolio consisting of loans in private-label securitizations. With this transaction, Nationstar anticipates adding more than 1.3 million customers to an existing customer base of 1.2 million. Nationstar’s total servicing portfolio is approximately $425 billion, pro-forma for this transaction plus an additional $13 billion Bank of America government servicing portfolio acquisition that closed in Q4 2012 and Nationstar’s UPB as of Sept. 30, 2012. The purchase price for the mortgage servicing rights is approximately $1.3 billion. The MSR portfolio purchases will close as investor and other thirdparty approvals are received, which Nationstar expects the majority to occur in Q1 2013. In addition to the MSRs, Nationstar will also be acquiring approximately $5.8 billion in related servicing advance receivables as the associated portfolios are boarded during 2013. Nationstar expects to enter into third-party financing agreements to fund the servicing advances. “This landmark transaction is a testament to our employees and their record of servicing performance and the support of our business partners,� said Nationstar CEO Jay Bray. “This transaction builds upon our strong track record of portfolio acquisitions and is further validation of our strategy to drive profitability over the entire economic cycle through our servicing, solutions, and origination businesses.� Nationstar will fund approximately $680 million of the MSR purchase price with the proceeds of a co-investment by Newcastle Investment Corporation and Fortress-managed funds, similar in structure to previous transactions. Nationstar will fund its $665 million portion of the MSR acquisition price with investable cash.

Social Media and Networking Compliance By Jonathan Foxx





When you think of advertising, do you include social media? These days, most of you do! However, social media compliance … which I shall call “SMC” … is a considerable undertaking, far more involved than just issuing a policy and procedure. Often, implementing SMC includes working with internet technology and information security professionals, collaborating with sales, compliance, legal, marketing, and human resources personnel, and ensuring that virtually all employees understand their own obligations with respect to using internet communications. We have drafted SMC policy statements that call for constant vigilance by management and appointed staff to monitor for and find the appropriate remedies to transgressions relating to use of a company’s name, logo, products, and services, in casual and even formal social media interactions. Recently, Federal Financial Institutions Examination Council (FFIEC) issued a request for comments, entitled Social Media: Consumer Compliance Risk Management Guidance (Notice)1. FFIEC issued this notice on behalf of its six members, Office of the Comptroller of the Currency (OCC); the Board of Governors of the Federal Reserve System (FRB); the Federal Deposit Insurance Corporation (FDIC); the National Credit Union Administration (NCUA); the CFPB (collectively, the Agencies); and the State Liaison Committee (SLC). Succinctly put, whatever the federal agencies eventually adopt, the states will issue the final guidance as a supervisory guidance not only to the institutions that are, by extension, under its supervision but also through the State Liaison Committee, thereby encouraging state regulators to adopt the guidance. This means that institutions will be expected to use the forthcoming guidance in their efforts to ensure that their policies and procedures provide oversight and controls commensurate with the risks posed by their social media activities. State agencies that adopt the guidance will expect the entities that they regulate to use the guidance in their efforts to ensure that their risk management and consumer protection practices adequately address the compliance and reputation risks raised by

activities conducted via social media. In this article, I will consider certain features of FFIEC’s social media Notice, as well as some important subjects to be addressed in constructing an SMC policy and procedure.

Defining social media Social media has been defined in a number of ways. For purposes of the proposed guidance, the Agencies consider social media to be a form of interactive online communication in which users can generate and share content through text, images, audio, and/or video. Social media can take many forms, including, but not limited to, microblogging sites (i.e., Facebook, Google Plus, MySpace, and Twitter); forums, blogs, customer review Web sites and bulletin boards (i.e., Yelp); photo and video sites (i.e., Flickr and YouTube); sites that enable professional networking (i.e., LinkedIn); virtual worlds (i.e., Second Life); and social games (i.e., FarmVille and CityVille). A simple test to distinguish social media from other online media is that the social media communication tends to be more interactive.

Use of social media Financial institutions use social media in a variety of ways, including marketing, providing incentives, facilitating applications for new accounts, inviting feedback from the public, and engaging with existing and potential customers. For instance, social media has been used to receive and respond to complaints. They have been used to provide loan pricing. Since this form of customer interaction tends to be informal and occurs in a less secure environment, it presents some unique challenges to financial institutions. To manage potential risks to financial institutions and consumers, however, financial institutions should ensure their risk management programs provide oversight and controls commensurate with the risks presented by the types of social media in which the financial institution is engaged.

Risks of social media The use of social media by a financial institution to attract and interact with customers can impact a financial institution’s risk profile. The increased risks can include the risk of harm to consumers, compliance and legal risk, operational risk, and reputation risk.

Increased risk can arise from a variety of directions, including poor due diligence, oversight, or control on the part of the financial institution. Obviously, procedures must be implemented that help financial institutions to identify potential risk areas and appropriately address as well as ensure that they are aware of their responsibilities to oversee and control these risks within their overall risk management program. Therefore, financial institutions should address the applicability of existing federal consumer protection and compliance laws, regulations, and policies to activities conducted via social media by banks, savings associations, and credit unions, as well as by non-bank entities supervised by the CFPB.




Risk management A financial institution should have a risk management program that allows it to identify, measure, monitor, and control the risks related to social media. The size and complexity of the risk management program should be commensurate with the breadth of the financial institution’s involvement in this medium. FFIEC gives this rule of thumb: a financial institution that relies heavily on social media to attract and acquire new customers should have a more detailed program than one using social media only to a very limited extent. The risk management program should be designed with participation from specialists in compliance, technology, information security, legal, human resources, and marketing. FFIEC makes it clear that a financial institution that has chosen not to use social media should still be prepared to address the potential for negative comments or complaints that may arise within the many social media platforms and provide guidance for employee use of social media. In FFIEC’s view, there are seven components of a risk management program: 1. A governance structure with clear roles and responsibilities whereby the board of directors or senior management direct how using social media contributes to the strategic goals of the institution (for example, through increasing brand awareness, product advertising, or researching new customer bases) and establishes controls and ongo-




ing assessment of risk in social media activities; Policies and procedures (either stand-alone or incorporated into other policies and procedures) regarding the use and monitoring of social media and compliance with all applicable consumer protection laws, regulations, and guidance. Policies and procedures should incorporate methodologies to address risks from online postings, edits, replies, and retention; A due diligence process for selecting and managing third-party service provider relationships in connection with social media; An employee training program that incorporates the institution’s policies and procedures for official, work-related use of social media, and potentially for other uses of social media, including defining impermissible activities; An oversight process for monitoring information posted to proprietary social media sites administered by the financial institution or a contracted third party; Audit and compliance functions to ensure ongoing compliance with internal policies and all applicable laws, regulations, and guidance; and, Parameters for providing appropriate reporting to the financial institution’s board of directors or senior management that enable periodic evaluation of the effectiveness of the social media program and whether the program is achieving its stated objectives.

Risk areas The use of social media to attract and interact with customers can impact a financial institution’s risk profile, including risk of harm to consumers, compliance and legal risks, operational risks, and reputation risks. Compliance and legal risk arise from the potential for violations of, or nonconformance with, laws, rules, regulations, prescribed practices, internal policies and procedures, or ethical standards. These risks also arise in situations in which the financial institution’s policies and procedures governing certain products or activities may not have kept pace with changes in the marketplace. Furthermore, the potential for defamation or libel risk exists where continued on page 26



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HECM for Purchase Transaction Volume Increases By Ralph E. Rosynek Jr.





Recent media and reverse mortgage industry sources continue to report increased loan volume transactions for senior Americans utilizing the HECM for Purchase Program. This volume is largely fueled by continuing efforts and resources by the reverse mortgage industry to educate realtors and consumers regarding the features and benefits of the HECM for Purchase program. Additionally, housing reports of property values appreciating are also adding new loan opportunities for seniors looking to downsize and relocate. HECM guidelines permit a real estate purchase for eligible senior borrowers. Similar to borrower and property eligibility under the standard HECM refinance program, there are some additional requirements which loan originators should be aware of when presenting this option to potential borrowers or providing program information to real estate agents. Consult the lenders guidelines for more detailed explanation of the following: n Eligible borrowers must be 62 years of age at the time of application and must occupy the property as their primary residence within 60 days of closing. Borrowers retaining their prior residence or owning other real estate may be subject to additional underwriting requirements. n Borrowers are responsible for the payment of property taxes, insurance and other fees and assessments. n FHA prohibits seller contributions (also known as “seller concessions”), including the use of loan discount points, interest rate buy downs, closing cost downpayment assistance, builder incentives, gifts or personal property given by the seller or any other party involved in the transaction. Also prohibited are customary charges that are normally paid on behalf of the borrower by the seller. n Lenders will require the verification and source of earnest money and all other funds prior to closing. HECM mortgagors must use cash on hand or cash from the sale or liquidation of the mortgagor’s assets for the required monetary investment. The monetary investment requirement can also be met by the use of approved funding sources as defined in HUD Handbook 4155.1 REV-5, section 2-10, with the exception of credit card advances, sweat equity, trade equity and rent credit. n The seller or any other person or entity that financially benefits from the transaction or any third-party that is reimbursed directly or indirectly is prohibited. n HECM borrowers may not obtain a bridge loan (“gap financing”) or engage in other interim financing methods to meet the monetary investment requirement. n The loan principal limit will be calculated based upon the lesser of the final appraised value, the contract sales price or the national maximum claim amount. Loan proceeds will be applied to satisfy the difference between the HECM principal limit and the final sales price for the property plus any HECM loan related fees that are not financed into the loan minus the amount of the earnest deposit. n Only FHA HECM property types are eligible for FHA insurance under the HECM for Purchase Program. New property construction must be completed and evidenced by issuance of a Certificate of Occupancy (CO) or its equivalent by the appropriate local authority. n Repairs as indicated in the appraisal report must be completed by the seller prior to loan closing and may not be charged or transferred to the borrower. n Sales contracts must be complete and include required addendums and exhibits. n Real estate must be held fee simple only. RMS provides complete HECM for Purchase training, product availability and resource access through wholesale and correspondent relationships with mortgage professionals. For more information on the HECM for Purchase Pprogram contact RMS at Ralph E. Rosynek Jr. is senior vice president, national production manager for RMS, Reverse Mortgage Solutions Inc. He may be reached by phone at (281) 404-7970 or e-mail

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LendingQB’s LOS directly to and from MCT’s clients-specific HALO database. As a result, data the consistency from LendingQB’s LOS to MCT ensures that mutual clients’ pipelines of locked loans are accurately priced and optimally hedged. The new interface helps lenders realize higher profit gains from MCT’s mandatory trade executions to investors.

Quicken Loans Sets Record and Closes $70 Billion-Plus in Volume in 2012

Detroit-based Quicken Loans Inc. has announced it closed more than $70 billion in home loan volume in 2012, a 133 percent increase over its $30 billion previous record set in 2011. In addition, Quicken Loans became the third largest retail lender in America, as well as solidifying its position as the largest online lender in the country. The company nearly doubled its number of full-time team members over the past year and now employs more than 8,000 in offices in Detroit, Cleveland and Scottsdale, Ariz., including almost 900 technology related positions. “Our success and accomplishments over the past year can once again be attributed to our unique culture and 50state centralized mortgage processing and closing platform, built and managed by our incredible, dedicated, and innovative brain-force of passionate team members,” said Dan Gilbert, Quicken Loans founder and chairman. In 2012, Quicken Loans was ranked highest in customer satisfaction for the third consecutive year among all home loan lenders in America by J.D. Power and Associates. Quicken Loans also became the exclusive home loan provider of Charles Schwab Bank, and licensed its proprietary loan origination technology to JP Morgan Chase. The organization also significantly entered the mortgage servicing business, announcing it had built an $80 billion-plus servicing portfolio as of the end of calendar year 2012. “We handled our explosive growth quite well over the past year,” said Bill Emerson, CEO of Quicken Loans. “In addition to record revenue and volume, we positioned ourselves for 2013 and beyond by developing key partnerships that will serve as a foundation for the continued future growth of our business and market share.”

McLean Mortgage Corporation Breaks Production Records in 2012 McLean Mortgage Corporation has announced that the company closed more than

$1.5 billion in mortgage volume in 2012, an increase of over 140 percent compared to the production levels achieved in 2011. This improvement in production performance far exceeded the industry average increase of 40 percent during the past year. Nathan Burch, president of McLean Mortgage Corporation, remarked that the company was able to outperform the industry average by expanding the McLean’s sales force and by providing superior service levels throughout the refinance boom of 2012—especially with regard to purchase loans. “While much of the industry focused upon refinances which ran at over 70 percent of total industry volume for the year, McLean Mortgage Corporation was able to average more than 40 percent purchase volume in 2012,” said Burch. “Our ability to hold underwriting turnaround times for purchase transactions to an average of 48 hours throughout 2012 was a key contributor to this success.” Pat Peavley, CEO of McLean Mortgage Corporation, noted that McLean continued to add staff as the company’s sales force expanded by 25 percent from 2011. That expansion will continue in 2013 as McLean is slated to open their first office in Maryland during the first quarter of the year. “We already have demand coming from the State of Maryland as our reputation for delivering great service has spread throughout the entire Washington Region,” said Peavley.

Solidifi and Kirchmeyer Form Appraisal Partnership

Solidifi and Kirchmeyer & Associates have joined forces in a deal that will see Solidifi become the third largest independent provider of residential real estate appraisals in the country. The combined entity will operate under the Solidifi name. “Following a $22 million financing in 2012, Solidifi is in growth mode and Kirchmeyer is an important part of our overall growth strategy. It is the ideal fit for Solidifi,” said Jason Smith, Solidifi’s president and CEO. Solidifi looks to evolve the appraisal management business through its technology and analytics platform. In effect, it is using technology to build efficiency throughout the appraisal process, increase quality, drive costs out and improve the client experience. Solidifi’s technology identifies the right appraiser for each assignment who will deliver high-quality comprehensive appraisals to the lender. “Solidifi’s technology and broad continued on page 24


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FEBRUARY 2013 DOJ Sues S&P Over MBS Misrepresentations





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U.S. Attorney General Eric Holder has announced that the U.S. Department of Justice (DOJ) has filed a civil lawsuit against the credit rating agency Standard & Poor’s Ratings Services alleging that S&P engaged in a scheme to defraud investors in structured financial products known as Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDOs). The lawsuit alleges that investors, many of them federally insured financial institutions, lost billions of dollars on CDOs for which S&P issued inflated ratings that misrepresented the securities’ true credit risks. The complaint also alleges that S&P falsely represented that its ratings were objective, independent, and uninfluenced by S&P’s relationships with investment banks when, in actuality, S&P’s desire for increased revenue and market share led it to favor the interests of these banks over investors. “Put simply, this alleged conduct is egregious–and it goes to the very heart of the recent financial crisis,” said AG Holder. “Today’s action is an important step forward in our ongoing efforts to investigate and punish the conduct that is believed to have contributed to the worst economic crisis in recent history. It is just the latest example of the critical work that the President’s Financial Fraud Enforcement Task Force is making possible.” Attorney General Eric Holder was joined in announcing the filing of the civil complaint by Acting Associate Attorney General Tony West, Principal Deputy Assistant Attorney General for the Civil Division Stuart F. Delery, and U.S. Attorney for the Central District of California André Birotte Jr. Also joining the Department of Justice in making this announcement were the attorneys general from California, Connecticut, Delaware, the District of Columbia, Illinois, Iowa and Mississippi, who have filed or will file civil fraud lawsuits against S&P alleging similar misconduct in the rating of structured financial products. The action was filed in the Central District of California, home to the now defunct Western Federal Corporate Credit Union (WesCorp), which was the largest corporate credit union in the

country. Following the 2008 financial crisis, WesCorp collapsed after suffering massive losses on RMBS and CDOs rated by S&P. The complaint, which names McGraw-Hill Companies Inc. and its subsidiary, Standard & Poor’s Financial Services LLC (collectively S&P) as defendants, seeks civil penalties under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) based on three forms of alleged fraud by S&P: (1) mail fraud affecting federally insured financial institutions in violation of 18 U.S.C. § 1341; (2) wire fraud affecting federally insured financial institutions in violation of 18 U.S.C. § 1343; and (3) financial institution fraud in violation of 18 U.S.C. § 1344. FIRREA authorizes the Attorney General to seek civil penalties up to the amount of the losses suffered as a result of the alleged violations. To date, the government has identified more than $5 billion in losses suffered by federally insured financial institutions in connection with the failure of CDOs rated by S&P from March to October 2007. “It’s unfortunate that there wasn’t more transparency into the underlying collateral backing up the loans in these pools or the credit due diligence that went into the underwriting,” said Guy Taylor, CEO of Santa Barbara-based Equi-Trax Asset Solutions, a firm that provides collateral valuation products and services for lenders across the country. “But was this a failing on the part of one or more of the ratings agencies or of the industry overall? I think we have to conclude that it was both.” According to the complaint, S&P publicly represented that its ratings of RMBS and CDOs were objective, independent and uninfluenced by the potential conflict of interest posed by S&P being selected to rate securities by the investment banks that sold those securities. “Clearly, we must all do a better job identifying economic trends that could lead to future crises,” said S&P in a publicly released statement. “For their part, governments have established new institutions to identify risks to financial stability, such as the Financial Stability Oversight Council in the U.S. At S&P we have taken to heart lessons learned from the financial crisis and made extensive changes that reinforce the integrity, independence and performcontinued on page 16

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By David Lykken






Leading Your Customers: Marketing for Mortgage Bankers

hen we think about leadership in the context of business, marketing isn’t usually the first thing that comes to mind. Usually, when we think about leadership in business, we think about motivating our employees. Leadership is the softer side of management. Management is about controlling the behavior of employees, and leadership is about inspiring the behav-

ior of employees. But, for business executives, both management and leadership center around relationships with employees. In this article, I want to take leadership in a different direction. I want to discuss, not leading your employees, but rather leading your customers. In an increasingly transparent marketplace, where the dialogue between customers and business

leaders is becoming more direct, playing a leadership role for your customers is more important than ever. Marketing is no longer an ancillary function of leadership—they are now amazingly intertwined. Marketing, in today’s day and age, can simply be defined as leading your customers. Let’s talk a little bit about what this looks like in the real world … In 2008, marketing expert Seth Godin wrote a leadership book called Tribes. The subtitle: “We Need You to Lead Us.” That’s exactly what customers are telling business leaders. Customers in a variety of industries share interests with other customers. Those with shared interests, either consciously or subconsciously, form a tribe. And they are looking for a leader— looking for someone in business to provide them with the marketplace solutions that they need and can rally behind. “A tribe,” Godin tells us, “is a group of people connected to one another, connected to a leader, and connected to an idea. For millions of years, human beings have been part of one tribe or another.” Perhaps you haven’t thought much about connecting to your customers as their tribal leader. Perhaps you have separated yourself from your marketing efforts … for a long time, such a separation made sense. Before the Internet, communication with customers was less direct and business leaders could be somewhat detached from marketing efforts. Now, in an age where consumers can speak directly to business leaders, it is imperative that business leaders be willing to respond. “Leaders lead,” Godin says, “when they take positions, when they connect with their tribes, and when they help the tribe connect to itself.” Isn’t it time that you connected with your tribe? So, what is your tribe and how do you connect with it? Well, another way of asking this question is, “Who are your customers and how do you connect with them?” In the new economy—the age of

free flowing information and communication—marketing is no longer about advertising to customers. Marketing is now about connecting with customers. In other words, it is more important than ever that you the business leader play an active role in communicating directly with your customers. The time of leading your customers has come. Does this mean that traditional advertising is dead? Have television commercials, print ads in trade magazines, billboards, radio spots, and other forms of one-way communication become ineffective in this brave new world? No, of course not … traditional advertising still serves a purpose. It isn’t dead. On the contrary, the problem is that it is far too alive. Consumers have been bombarded with advertisements for decades and, consequently, have trained their minds to filter out most of them. Investing in your marketing efforts in new media (such as e-mail marketing, social networking, Webinars, etc.) isn’t about replacing traditional advertising. Rather, it is about rendering traditional advertising more effective. Consumers still watch TV, listen to the radio (even Internet radio has ads), and drive along the street passing billboards. Consumers are still exposed to traditional, one-way media. So, if they do run all of the media they encounter through a mental filter, what media really sticks? I believe that it’s all about trust. Leading your customers in the new economy is all about building trust. When customers connect with you through a social network or sign up for your e-mail newsletter, they are extending their trust … they are joining your tribe. They may not ever buy anything from a link on Facebook or in your e-mail newsletter. But when they are flipping through a magazine and they see your ad, they will take notice of it even if no other ad in the magazine sticks out. If they are in the market, you can be sure that you are the one they will call. Why? Because they

them what you do for a living. You can also use your Facebook page to interact with people you don’t know. Facebook is the world’s largest social networking platform and it isn’t going away anytime soon. Twitter is an “open” social network. That means that you can interact with anyone on Twitter, whether they “follow” you or not. Use Twitter as a way to connect and discuss issues with potential home buyers. Obviously, you eventually want to get as many “followers” as possible on Twitter. Those are the people who will see the messages that you send out. But I would suggest starting off by interacting with people. Once you show interest in them, people will follow you. LinkedIn, like Facebook, is a “closed” social network. You can only interact

with people to whom you are connected. But, unlike Facebook, LinkedIn is more professional in nature. As someone in the mortgage banking industry, you probably have a large amount of professional connections. Use LinkedIn to solidify those relationships and position yourself as a thought leader in the mortgage banking industry. Again, I want to reiterate that traditional advertising isn’t a thing of the past. It’s still important for building brand recognition. But, as far as building brand loyalty, you’ll want to focus on new media. In the end, people are going to do business—especially when that business is as costly as buying a home—with people and entities that they trust. Now more than ever, marketing is about building

trust with your customers. Marketing is about positioning yourself as the leader of your customer’s tribe. Marketing is about leading your customers. 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 or

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trust you and they are a part of your tribe. Because you are leading them. So, let’s delve a little further into how you can use new, interactive media to lead your customers and build trust in your tribe. For the rest of the article, I want to talk about two essential components of new media, content marketing and social networking, and how they play into one another to help you be a more effective leader for your customers. First, let’s discuss content marketing … Content marketing is all about being seen as a trusted resource for information. It isn’t a platform for talking about your products or services. Rather, it is a platform for giving advice to your current and potential customers. Who are those customers? As mortgage bankers, they are potential homebuyers. So, what kind of advice should you be sharing? Advice about purchasing homes or even ancillary advice about home improvement, increasing the value of homes, or even lifestyle commentary about creative uses for rooms in homes. Basically, you will want to provide useful information centered on customers and their homes. That’s it. Content marketing can take many forms. Probably the oldest and still arguably the most effective is the e-mail newsletter. Create a monthly or weekly email that you send to subscribers that contains homebuying tips. But make sure they opt-in to the list—that they willingly sign up. Then, you know you are providing information to potential customers who actually want it. So, how do you get people to sign up for your newsletter? That’s where a blog comes in. A blog is part of your Web site that consists of entries (or blog posts) displayed in reverse chronological order. The purpose of the blog is much like that of the newsletter, but for a more general audience. You are providing information that anyone can get access to. Give general advice on your blog and save the best stuff for readers who sign up for your newsletter after reading your blog. The best thing to do for your blog is to take frequently asked questions and write out the answers as blog posts. When you provide useful information to potential customers, you build trust. That’s what content marketing is all about. The second key component of new media is social networking. Whereas content marketing deals more with trying to get customers onto your website, social networking is about meeting customers where they already are. The big three social networks at this time are Facebook, Twitter and LinkedIn. As a mortgage banker, you can leverage each of these platforms to build relationships with potential buyers and position yourself as a leader in their “homebuying” tribe. Facebook is a “closed” social network. That means that you can only communicate with the people who have “Liked” your Facebook business page or have become “Friends” with you as an individual on Facebook. Also, Facebook tends to be more personal. I would recommend Facebook for building relationships with family and friends, making it clear to

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continued from page 12

ance of our ratings, including compliance with today’s enhanced regulatory oversight.” Contrary to these representations, from 2004 to 2007, the government alleges, S&P was so concerned with the possibility of losing market share and profits that it limited, adjusted and delayed updates to the ratings criteria and analytical models it used to assess the credit risks posed by RMBS and CDOs. According to the complaint, S&P weakened those criteria and models from what S&P’s own analysts believed was necessary to make them more accurate. “Our industry has never been stronger but I fear this latest lawsuit from the DOJ may re-open a Pandora’s box of guidelines which were expelled several years ago,” said Andrew WeissMalik, chief operating officer at 360 Mortgage Group. The complaint also alleges that, from at least March to October 2007, and because of this same desire to increase market share and profits, S&P issued inflated ratings on hundreds of billions of dollars’ worth of CDOs. At the time, according to the allegations in the complaint, S&P knew that the quality of nonprime RMBS was severely impaired, and that the ratings on those mortgage bonds would not hold. The government alleges that S&P failed to account for this impairment in the CDO ratings it was assigning on a daily basis. As a result, nearly every CDO rated by S&P during this time period failed, causing investors to lose billions of dollars.

CFPB Seeks to Better Equip Protections for High-Cost Mortgages

The Consumer Financial Protection Bureau (CFPB) has issued final rules to strengthen consumer protections for high-cost mortgages and to provide consumers with information about homeownership counseling. The Bureau also finalized a rule that requires escrow accounts be established for a minimum of five years for certain higher-priced mortgage loans. “Addressing problems in the mortgage market is critical to helping our economy recover,” said CFPB Director Richard Cordray. “Today’s changes will better help consumers to understand the real costs of owning a home while protecting them from harmful practices that can trap them into high-cost mortgages.” For loans that are high-cost mortgages, the final rule: n Bans potentially risky features: For mortgages that qualify as high-cost, the rule generally bans balloon payments (a large, lump sum payment usually due at the end of the loan) with some exceptions, such as for certain types of loans made by creditors serving rural or underserved areas, and bans penal-

ties for paying the loan early. n Bans and limits certain fees and practices: The CFPB’s rule bans fees for modifying loans, caps late fees at four percent of the payment that is past due, generally prohibits closing costs from being rolled into the loan amount, and restricts the charging of fees when consumers ask for a payoff statement (a document that tells borrowers how much they need to pay off the loan). The rule also prohibits certain bad practices, such as encouraging a consumer to default on an existing loan to be refinanced by a highcost mortgage. n Requires housing counseling: The rule requires consumers to receive housing counseling before taking out a highcost mortgage. In addition to strengthening the protections for high-cost mortgages, the Bureau today is implementing a requirement of the Dodd-Frank Act that lenders provide a list of homeownership counseling organizations to consumers shortly after they apply for a mortgage so consumers know where to get help when deciding what loan is best for them. The CFPB is also implementing other changes made by the Dodd-Frank Act concerning escrow accounts. An escrow account is an account that a lender may set up to pay certain recurring property-related expenses on a consumer’s behalf, such as property taxes and homeowner’s insurance. Escrow accounts help to ensure that consumers have enough money to pay those bills when they come because the lender breaks the expenses down into monthly installments and adds them to the monthly mortgage payment. Through an escrow account, consumers can better see the true cost of owning a home with insurance and tax costs laid out with each mortgage payment and are better assured that those costs are paid in a timely manner. Under current regulations, creditors are required to establish escrow accounts for certain higher-priced mortgage loans for a minimum of one year. The final rule implements changes from the DoddFrank Act that generally extend the required duration of an escrow account on such mortgage loans from a minimum of one year to a minimum of five years. To preserve access to credit, the rule exempts loans made by certain creditors that operate predominantly in rural or underserved areas, as long as certain other criteria are met.

Ten Servicers to Shell Out $8.5 Billion-Plus for Deficient Practices Ten mortgage servicing companies subject to enforcement actions for deficient practices in mortgage loan servicing and continued on page 19


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to invest the time, money and energy into their career and this includes a veracious appetite for learning! How many of your loan officers have read a book about mortgages?

Why Are Your Loan Officers Not Asking for the Business? By Dave Hershman





So many times, managers ask me why their loan officers don’t ask for the business enough, or are the loan officers asking for business but asking the wrong way or asking the wrong question. In this case, I believe that the real problem is not what your loan officers are saying, but where they say it. And by location, I am not saying indoors versus outdoors or any other geographical reference. I am actually referring to where in the marketing process they are asking it. Note that I consider “asking” part of the marketing process, not the sales process. It is the marketing process that helps us develop leads and the sales process that helps us convert the leads. Too many confuse marketing with advertising. Advertising is a form of marketing. It is expensive and not as effective as garnering personal referrals. In other words,

the term marketing is much broader than advertising. Regarding asking for referrals, here are some important points to consider regarding your loan officers: n The inability to ask is typically a result of call reluctance. Everyone has call reluctance—or in this case I will call the affliction, marketing reluctance. n Your loan officers can ease this reluctance by getting in a more “comfortable” position to ask. Not by forcing them to do something which is uncomfortable. This is not like working out—no pain, no gain. That is why you so many in sales fail. I believe in finding a better way. n For example, if your loan officers are not experts and are unsure regarding their ability to help people, then they need to become an expert. That means reading, taking classes and practicing or role-playing. They need

n Another example of not being in the right position is loan officers not feeling they have delivered enough value to the client. This is why loan officers often wait until the loan closes to ask. Waiting ignores the law of selective perception, which indicates that the best time to ask is actually the earliest possible time in the process because the client is more aware of others who are doing same thing as them (purchasing, refinancing). n The key to moving up the asking process is delivering value more quickly during the process. This includes not only helping them obtain a loan, but with their overall financial condition. It also includes giving them educational materials to read so they better understand their choices and the process. n Delivering more value also puts them in position to ask for referrals in a stronger way. Instead of saying, “I make my living off of referrals, do you have someone you know who needs to refinance or purchase?” They can say, “I am glad you felt this was helpful, do you know anyone else who I could help or would find this valuable?” n With regarding to business-to-business sales, including relationships with real estate agents, delivering value means offering referrals or the ability to help them. This means your loan officers have to be a giver, as well as a taker. Their personal network/sphere is imperative in this regard. They need to build their sphere and not be afraid to leverage it! They need to be always on the lookout within their sphere for

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“Too many confuse marketing with advertising. Advertising is a form of marketing.”

referrals to give to others. For example, when they take a loan application, do they ask about the insurance needs of the applicant? From the book, Money on the Table by the founder of BNI, Dr. Ivan Misner and Lee Abraham—What other challenges are you facing in your life right now? This question opens up a whole new world of possible referrals for their networking partners. n Their close personal network is important because they have delivered value to many in their life in the past—and not necessarily with regard to mortgages. Your loan officers have built up green stamps or an emotional bank account, as described by Stephen Covey. For example, in a previous job, did they help someone with their career? They are always in a position to ask, but many do not. Or if they do, they don’t do so effectively. n What is effective? Telling people how to help them … do not assume they know. And it is not always about badgering them about referring business. Perhaps they can refer a real estate agent, financial planner, CPA or insurance agent. Perhaps their brother or sister is one. It is not only about knocking on your neighbor’s door and seeing if they want to refinance. Everyone is not refinancing today. But everyone has relationships you can leverage. Again, it is not just about asking the right question. It is about being in position more quickly and being comfortable. Asking is a skill, but the delivery must be personalized for each individual. Your job as a manager is to help everyone get in a comfortable position so they can find their groove. 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 or visit

nmp news flash

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to the agreement announced today, but that are also subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing. OCC and Federal Reserve examiners are continuing to closely monitor the servicers’ implementation of plans required by the enforcement actions issued in April 2011 to correct the unsafe and unsound mortgage servicing and foreclosure practices.

Final Rule on Appraisals Issued by Agencies for Higher-Priced Mortgages


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Six federal financial regulatory agencies have issued the final rule that establishes new appraisal requirements for “higher-priced mortgage loans.” The rule implements amendments to the Truth in Lending Act made by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). Under the DoddFrank Act, mortgage loans are higherpriced if they are secured by a consumer’s home and have interest rates above certain thresholds. For higher-priced mortgage loans, the rule requires creditors to use a licensed or certified appraiser who prepares a written appraisal report based on a physical visit of the interior of the property. The rule also requires creditors to disclose to applicants information about the purpose of the appraisal and provide consumers with a free copy of any appraisal report. If the seller acquired the property for a lower price during the prior six months and the price difference exceeds certain thresholds, creditors will have to obtain a second appraisal at no cost to the consumer. This requirement for higher-priced homepurchase mortgage loans is intended to address fraudulent property flipping by seeking to ensure that the value of the property legitimately increased. “A fair and accurate appraisal is a critical tool for lenders and borrowers alike. The appraisal rules announced today, under both ECOA and TILA, appear to be reasonable, commonsense solutions,” said Debra W. Still, CMB, Chairman of the Mortgage Bankers Association (MBA). “These standards will increase transparency for borrowers and give lenders a uniform set of guidelines under which to operate, hopefully without unnecessarily increasing costs or reducing access for borrowers.” The rule exempts several types of loans, such as qualified mortgages, temporary bridge loans and construction loans, loans for new manufactured homes, and loans for mobile homes, trailers and boats that are dwellings. v

foreclosure processing have reached an agreement in principle with the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board to pay more than $8.5 billion in cash payments and other assistance to help borrowers. The sum includes $3.3 billion in direct payments to eligible borrowers and $5.2 billion in other assistance, such as loan modifications and forgiveness of deficiency judgments. The payments involve mortgage servicers operating under enforcement actions issued in April 2011 by the OCC, the Federal Reserve, and the Office of Thrift Supervision. The agreement ensures that more than 3.8 million borrowers whose homes were in foreclosure in 2009 and 2010 with the participating servicers will receive cash compensation in a timely manner. Eligible borrowers are expected to receive compensation ranging from hundreds of dollars up to $125,000, depending on the type of possible servicer error. This agreement includes Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. For these participating servicers, fulfillment of the agreement would meet the requirements of the enforcement actions that mandated that the servicers retain independent consultants to conduct an Independent Foreclosure Review. As a result of this agreement, the participating servicers would cease the Independent Foreclosure Review, which involved case-by-case reviews, and replace it with a broader framework allowing eligible borrowers to receive compensation significantly more quickly. The OCC and the Federal Reserve accepted this agreement because it provides the greatest benefit to consumers subject to unsafe and unsound mortgage servicing and foreclosure practices during the relevant period in a more timely manner than would have occurred under the review process. Eligible borrowers will receive compensation whether or not they filed a request for review form, and borrowers do not need to take further action to be eligible for compensation. “The lesson is clear: Moving forward we must do all we can to prevent such foreclosures from happening in the first place,” said Julia Gordon, Director of Housing Finance and Policy at the Center for American Progress. “That means enacting strong standards for mortgage servicers, especially on foreclosure prevention activities, and making sure that consumers, as well as public enforcement bodies, have the power to hold banks accountable for violations of predatory lending laws.” The agencies continue to work to reach similar agreements in principle with other servicers that are not parties

The President’s Corner: February 2013





As I look ahead to getting ready for the NAMB 2013 Legislative & Regulatory Conference, I am drawn back to my first experience in Washington. I traveled to D.C. with a delegation of about 20 from my home state of Indiana. In those days, everyone went to the Legislative Conference. This is where we got to go and talk with our legislators about the mortgage business and what was going on. Many times, we were meeting with staffers and trying to explain to them what we were doing and how we were doing it. Most of us were followers, with some designated people doing most of the talking and the others listening and lending support. It opened my eyes to see that almost all of the aides were very young, younger than I both myself and the other attendees. I remember asking myself, “Are these young people actually running the country?” I was shocked at the presence and understanding that most of them had. Now, we look forward to 2013 and we are again mounting a charge to D.C. to discuss several items that can make a difference in what we do in our everyday life. We are at a crossroads that makes it again an important reason that you need to attend this conference. Our Government Affairs Committee Chair John Hudson has an article here in this month’s NAMB Perspective that will discuss exactly what we are doing and what we need to say when in D.C., but we need people to show up and help us on our

quest. There are 435 Congressmen and Congresswomen and 100 Senators that we need to reach. What better way to help than to be that constituent who lives in the district to go and visit their elected official. You can go into their offices and talk with them about how these rules will impact you in your job and how it will affect your friends and neighbors in your district. What better way than to talk with those who represent you. NAMB will have packets for you to go and distribute, but you have to get there and register for the event. Go to and register today. You can make your hotel reservations there as well. So get on board and help us help you by coming to Washington on March 10-12. Make sure that you arrive on Sunday to attend the compliance portion of the conference from 2:00 p.m.6:00 p.m., presented by Jonathan Foxx from Lenders Compliance Group. This is a very important session that you need to attend, and it is free with your Conference registration of $99. It is that time of year again that we start to look for new board members to serve NAMB. We are in need of people who want to get involved, but there are a few things that you must first need to know. To start, you have to be a member of NAMB. We are now a fully volunteerrun organization that requires you to be a little more involved than before. We have two meeting per year that require you to be in attendance, the Legislative & Regulatory Conference in Washington, D.C. in March, and the NAMB National that will take place in September or October. Your room is covered at these

events, but not your flight and travel. All other board meetings and conference calls are done at your office for convenience. Depending on the committee that you are on, the amount of time you need to devote to doing things to make the association run will vary. I hope that if you know of someone that you feel would do a great job or even if you feel like this is a task you would like to take on, please feel free to contact Jim Pair at to get an application. We are still in the fight of our life in the government affairs arena. Items of the qualified mortgage (QM) and the loan originator (LO) compensation rules are still being reviewed as I write this. Watch the NAMB Web site ( and the NAMB Government Affairs e-mails for updates and potential “Calls to Action” on certain things we need your help on. I know we are always saying this, but YOU are what makes NAMB so successful in the grassroots campaigns and getting information out there to members and nonmembers. You do make a difference each and every day, and I thank all of the members for helping us do our jobs … thank you for being a member. Our current Government Affairs Committee Chair John Hudson will be handing over the Government Affairs Committee to Rick Bettencourt at this year’s Legislative Conference. John has done an excellent job for us and has given up countless hours for our association, most of which he will never get back. As president of NAMB, I want to publicly thank John for all of the time and effort he has devoted to the Government Affairs team. As he prepares for the birth of his

first child, he really is not going away. He will still be a member of the GA team, just stepping back to help his wife in this great experience that he is about to encounter. Those of us who have grown children can think back to what it was like when we were just beginning our families. We wish John the very best. Rick Bettencourt, our new Government Affairs Committee Chair, hails from the great state of Massachusetts. For those of you who remember Denise Leonard, Rick follows in these footsteps of those people who love government affairs. Rick has worked closely with Denise over the years in the Massachusetts Mortgage Association (MMA) and shares her passion for the GA Committee. I know he will do an excellent job as he has worked very intensively with John over the past to prepare for this job. I look forward to working with Rick over the next several months. As I conclude this February edition, I am invigorated to go to Washington, D.C. again. It seems that every time we go there, we get a great response to our issues and our needs. Please make sure that you join us and help us make a difference. We can only do it with your help. And remember, if you are not a member of NAMB, now is the time to make a difference and join today. Go to and become a member today! Sincerely,

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

NAMB National to Roll Into Vegas This Fall By John G. Stevens

The NAMB National Conference just a few short months ago was a terrific success. We ended the event with nearly 1,500 registrants, and with a waiting list for booths and sponsorships. We are already preparing for NAMB National 2013. Our goal is to move the event out of early December, an are currently exploring various options in September and October, but are looking forward to returning to Las Vegas for another exhilarating expo. We were honored to have hosted such luminaries as Spencer Rascoff, chief executive officer of Zillow;

Theodore Tozer, president of Ginnie Mae; and Ed Pinto of the American Enterprise Institute, on hand for our 2012 NAMB National event. The Nationwide Mortgage Licensing System (NMLS) presented a compelling picture of what is happening with mortgage origination licensing throughout the U.S., and Greg Frost kicked off NAMB National in 2012 with his usual energy, positive attitude and inspirational messaging. Mortgage originators across the nation are seeing their business surge once again. But as that happens, it’s important that we all maintain the highest levels of professionalism. We need to seek out the best education, the best products and the best partners to insure that consumers continue to hold

us in the highest regard—so that we can be sure we are offering borrowers the best service possible. That’s why NAMB National is so important. Attendees had the chance this year to hear about best practices in reverse mortgages. They learned new social media skills, and got the inside story on compliance training. We offered nearly two dozen workshops, seminars and keynote sessions over the course of two days. We mixed those formal educational opportunities with informal ones as well. Networking was terrific, from the opening evening cocktail reception in the exhibit hall, to fun games being offered by a number of the vendors. From the hospitality suites to business lounges, attendees had ample opportu-

nity mix and mingle, and to learn oneon-one how to build their business. NAMB came roaring back this year with the new NAMB National. Now we’re looking to make it even bigger and better for everyone. Keep watching future installments of “The NAMB Perspective” column and your inbox for news as it develops. We’ll be settling on our dates soon. Remember: book early before all of the hotel rooms are taken. We’ll be in Vegas, waiting for you! John G. Stevens is Utah manager for ENG Lending. He is a board member of NAMB, and chairman of the NAMB National Committee. He may be reached by phone at (801) 432-0660, ext. 101 or e-mail

Daily Disciplines to Ensure Success in Your Business Keep your focus and your pipeline full by adhering to five proven practices By Fred Arnold

There are a whole lot of things that we need to keep track of these days. From e-mails to text messages, networking groups to affiliations, sometimes it seems impossible to get everything done that needs to get done, let alone find time to generate new business. How many times have you started a day with a to-do list that you’re bound and determined to accomplish, only to find the day is over and you haven’t done anything to earn referrals or generate repeat or new business? You’re not alone. The reality is … things have heated up in the mortgage industry over the past two years. That doesn’t mean, though, that any of us can afford to rest on the loans we currently have in the works. We need to always remain consistent in our efforts to secure future opportunities. Fortunately, by dedicating just an hour and an half in the morning to practicing simple disciplines, we can rest comfortably knowing that we’re always working towards earning new business. Here are five disciplines to incorporate in your morning routine to keep your business flourishing.

mails to clients wishing them a happy birthday or to acknowledge an anniversary, such as the one, two, three year anniversary of moving into their new home. People will be pleasantly surprised that you have remembered and you may be shocked at how quickly these e-mails turn into opportunities for new business. Clients may remember that they have a family member who wants to refinance or you may jog a referral partners’ mind who had been meaning to call you. This quick, easy and thoughtful action on your part is a 2. Call five clients to say “thank you” surefire way to keep yourself positioned Last year was a very good year for most favorably in your clients’ minds. mortgage professionals. As such, we owe it to our clients and/or our referral 4. Spend 20 minutes sharpening your partners to say thank you. Let them skills know how much you sincerely appreci- After completing your daily disciplines as ate their business or referral. This isn’t a outlined above in steps one through three, call to solicit new business, but instead, but before diving into your daily tasks, is a show of genuine gratitude. You are remember that you have a responsibility likely to be surprised by how happy to your clients and referral partners to be people are to hear from you and, often, at the top of your game. Taking 20 minhow many may know someone who utes each morning to read educational could also use your expertise. But don’t articles (such as NAMB’s Daily make that the goal of the call. Your goal Information Update or NatonalMortgageshould be simply to let them know that will help you to stay you appreciate their past business and ahead of notable industry events and will you’re available to serve them, their remind you of valuable business practices family and their friends in the future. that may have slipped by the wayside. Articles written by colleagues can illumi3. Send five e-mails recognizing a nate areas where you can improve as well special date as introduce you to new strategies and E-mails recognizing special days show business growth tactics. that you care about your client or referral partner’s well-being and not just the 5. Get moving business they can send you. Send five e- Before doing anything in the morning,

get your endorphins going. The importance of clearing the clutter from your mind cannot be underscored and exercise is a surefire way to do it. Take time every morning before sitting down at your desk to get a bit of exercise. You will energize both your body and your mind, so that when you sit down to work, you have the momentum you will need to make the necessary phone calls, send the necessary e-mails and have a productive day. By refusing to allow yourself to be distracted by the items that come up day-to-day and, instead, adhering to simple disciplines, you’ll ensure that you’re always working to grow your business. Implementing these five disciplines into your daily routine will immediately pay off in terms of helping you to stay focused, all the while, keeping you in touch with clients and partners, which will pay off for the future. Fred Arnold is a Certified Mortgage Consultant (CMC), past president of the California Association of Mortgage Brokers, current treasurer of NAMB, and mortgage professional at American Family Funding, a branch of American Pacific Mortgage in Southern California. 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, Channel 20. He can be reached by phone at (661) 284-1150, ext. 109 or e-mail

By Kay A. Cleland, CMC, CRMS

Are you a member of NAMB—The Association of Mortgage Professionals? Are you a member of your local state association? There is no time like the present to get involved and support the industry that is supporting you … your voice does matter. Here are the top 10 reasons to become a member of NAMB:

Log on to and click on the “Membership” tab to join today. Kay A. Cleland, CMC, CRMS of KC Mortgage LLC in Castle Rock, Colo. is secretary of NAMB—The Association of Mortgage Professionals. She may be reached by phone at (720) 810-4917 or e-mail


1. Take control … get involved: If you don’t get involved, you will not have a job. 2. Legislative updates and activities. 3. Best business insurance 4. Professional mortgage industry designations: The General Mortgage Associate (GMA), Certified Mortgage Consultant (CMC), Certified Residential Mortgage Specialist (CRMS) and the NAMB Lending Integrity Seal of Approval.

5. Become recognized as a professional … join a trade association just like the nation’s doctors, real estate agents and builders do. 6. You will have power and strength in numbers. 7. Receive NAMB Members Only discounts. 8. Credibility and notoriety. 9. Education and career growth. 10. Networking among peers.


NAMB Membership ... Benefiting the Entire Industry

21 v

1. Schedule a lunch or coffee meeting with a referral partner every day Before you even open your e-mail in the morning, get on the phone. Call an

existing referral partner or a potential referral partner and ask for a quick coffee or lunch meeting. Make it a point to let them know that you’re interested in helping them to grow their business. It should only take a few phone calls in order to secure a meeting for later in the week as long as you make the focus about them. Avoid asking for referrals, instead focusing on their growth and nurturing the rapport between the two of you. This needs to be a daily discipline. Meet with a referral partner every day.

A Message From the NAMB Communications Committee By Valerie Saunders

As Communications Committee Chair of NAMB, I want to take this opportunity to stress the importance of staying in touch with your clientele. Whether you are a small business or a trade organization and your clientele is

a past customer or a past member, the art of communication is a skill worth honing and keeping sharp. In this age of social networking, the Internet makes reaching out to your client database easier than ever before. Between Facebook, Twitter, LinkedIn and e-mail blasts, there is no reason why information cannot be quickly shared and at minimal expense. However, remember when using e-

mails for promotion that you abide by all federal laws such as the CAN-SPAM Act. If e-mail is your tool of choice, please make sure that it is clear that the message you are sending is a solicitation for marketing purposes. In addition, it is important to provide recipients with the ability to “Unsubscribe” from receiving further e-mail correspondence, if they so choose.

Thank you for the opportunity to stress the importance of communication and shine a light on some important items to keep in mind when reaching out to your target audience through the worldwide Web. Valerie Saunders is NAMB Communications Committee Chair. She may be reached by phone at (904) 992-0785 or email

Now More Than Ever, Your Participation Is Needed By John H.P. Hudson





Last year, NAMB mortgage professionals from across the country convened in Washington, D.C. to participate in NAMB’s Annual Legislative & Regulatory Conference. Not only did the attendees learn the latest news on issues affecting their business, they passionately advocated on behalf of all mortgage professionals, small business, and the preservation of consumer choice on Capitol Hill. On March 10, 11, and 12, NAMB will rally the troops once again and your presence is imperative! The year 2013 is already proving to be a significant year for mortgage professionals, consumers and small business. Mortgage professionals must be ready, willing and able to get involved in the legislative process along with NAMB to ensure that our industry and consumers are protected from the unintended consequences of illadvised regulation and legislation.

The biggest issue mortgage professionals face at this time revolves around the Qualified Mortgage (QM) rule released in January and the impact it will have on consumers applying for home loans in the future.

So what are you going to do about it? Your elected members of Congress and the Senate were chosen to represent you. Now is your opportunity to work with NAMB to get valuable “face time” with influential legislators and decision-makers to not only let them know how their decisions have impacted small business and consumers, but to educate them in order to improve and help save the housing industry and the overall economy of this country. Special thanks to Provident Funding for sponsoring the NAMB 2013 Legislative & Regulatory Conference. Provident Funding has once again demonstrated their commitment and loyalty to mortgage brokers and all mortgage professionals in the housing industry.

Support your industry and let your voice be heard NAMB has organized a tremendous program for the 2013 Legislative & Regulatory Conference: For more information, please visit and click on the “Conference” tab or e-mail us at Also, be sure to visit us on Facebook for regular updates as our conference gets closer. Here is the bottom line … NAMB’s advocacy has been effective over the years because our members get involved. NAMB members are leaders within the mortgage business because of their experience and expertise. They are widely regarded as leaders within their communities because they recognize the importance of getting involved and making a difference. In order for NAMB to continue to be an effective advocate for mortgage brokers and mortgage professionals, you must participate in the political process. Your involvement ensures that members of Congress hear a perspective that they care most about—a constituent who can communicate the impact of potential legislation on the market-

place, homebuyers and the general public. We must continue to look out for the interests of the customers we serve and for the general good of the American people. We continue to face enormous change. You need to know the issues, learn about what’s on the horizon and what you can do to protect your interest through political action. The number one reason you should attend this event is the satisfaction of knowing you are doing your part to ensure that mortgage professional issues are heard on Capitol Hill. You are the best spokesperson for our issues. Your participation benefits you, mortgage professionals and our clients as a whole by strengthening our presence in the halls of Congress. See you in March … John H. P. Hudson of Premier Nationwide Lending in San Antonio, Texas is Government Affairs Committee Chair of NAMB—The Association of Mortgage Professionals. He may be reached by phone at (817) 247-4766 or email

Mark Your Calendar 2013 NAMB Annual Legislative & Regulatory Conference Sunday-Tuesday, March 10-12 Hilton Garden Inn-Capitol • Washington, D.C. The 2013 NAMB Legislative and Regulatory Conference will be held Saturday-Tuesday, March 10-12 in Washington, D.C. This is a “must attend” event for all mortgage professionals. Last year, more than 10,000 Realtors attended NAR’s Lobby Day. This year, NAMB would love to get 1,000 mortgage professionals to D.C. to help NAMB lobby on Capital Hill. Join NAMB as the association rallies to fight for consumers, small business and mortgage professionals everywhere.

For more information, visit

2013 NAMB Legislative & Regulatory Conference Sunday-Tuesday, March 10-12 Hilton Garden Inn-Capitol • Washington, D.C.

Program of events (Subject to change)

Sunday March 10

1:30 p.m.-2:30 p.m. ....Keynote Address

Noon- 6:00 p.m. ..........Registration

2:45 p.m.-3:45 p.m. ....Consumer Financial Protection Bureau (CFPB)

2:00 p.m.-6:00 p.m. ....Compliance Sessions n Jonathan Foxx, Lender Compliance Group n Alan Cicchetti, Brokers Compliance Group n Michael Barone, Lender Compliance Group

4:00 p.m.-5:00 p.m. ....Advocacy Day Preparation n John Hudson, Government Affairs Chair, NAMB n Rick Bettencourt, CRMS, Government Affairs Vice Chair n Roy DeLoach, D.C. Strategies

2:00 p.m. ....................Compliance Symposium: Policies and Procedures n What policies are required for your office? n The challenge of implementation n Regular reviews and updates n Q&A Session

6:30 p.m.-8:00 p.m. ....PAC Fundraising Reception

3:15 p.m. ....................Compliance Symposium: Regulator’s Examination n Compliance examinations, scope and purpose n How to prepare for a visit from your regulator? n Q&A Session

Tuesday, March 12 7:00 a.m.-Noon............Lobby Day Registration 23

9:30 a.m.-5:30 p.m. ....Lobby Day Hill Visits 6:00 p.m. ....................Open Discussion on Your Capitol Hill Visits Meet with the NAMB Board of Directors and review your visits with your legislators.

6:30 p.m.-8:30 p.m. ....Opening Reception/Registration

Monday, March 11 7:30 a.m.-8:30 a.m. ....Breakfast 8:30 a.m.-8:45 a.m. ....Opening Remarks n Donald J. Frommeyer, CRMS, NAMB President n Herman Churchwell, Provident Funding, Provident Funding is the Exclusive Sponsor of the NAMB Legislative Conference 8:45 a.m.-10:15 a.m. ..The Industry United: NAMB, MBA, NAR & NAHB Fighting for Small Business and Consumer Choice 10:30 a.m.-11:45 a.m. SBA: Discussion on SBA’s Protection of Small Business

For more information, visit


Noon-1:00 p.m. ..........Break for Lunch


7:00 a.m.-6:00 p.m. ....Registration v

4:30 p.m. ....................Compliance Symposium: Making Compliance Part of Your Business Model n Managing the daily compliance needs of your office n On-site or off-site compliance? n Third-party compliance services n Q&A Session

8:30 p.m.-10:00 p.m. ..PAC Function: Dinner With The President

Big changes to reverse mortgages this month. What will HUD impose? Will they combine the Standard and Saver loans? If so, what will that mean? Are you waiting to see? HECM, HUD, Congress, Senate Banking Committee, and big-named senators are being thrown around the water cooler the last few months. There are hundreds of questions being asked. People are gathering to talk about what they plan on doing when the changes hit. Are you prepared? The truth is no one knows what changes are coming or if we will even be writing reverse mortgages much longer. During times like this a lot of people hold off on marketing not wanting to waste good money. Then there is always that select group of people that are closing a lot of loans while everyone else waits to see what happens. These people choose to roll the dice and end up making a lot of money. This is for a variety of reasons. The biggest reason is that there is less marketing going out which increases response rates for everyone. So while some people wait, closing no new business, others spend extra money on marketing and get three or four times the return they normally would. Here’s what we know about the reverse mortgage business: n n n n


appraiser network will complement our own network and I and my team are excited to continue to service our current and future customers with these extended capabilities,” said James Kirchmeyer, CEO of Kirchmeyer & Associates. Solidifi’s network of appraisers in every county nationwide will complement the Kirchmeyer panel. Solidifi has invested more than $25 million to date in its technology platform which will further enhance appraisal performance for Kirchmeyer customers. The Solidifi cloud-based technology provides customers with a flexible and scalable appraisal management solution high standards in data security and reliability which includes providing redundant servers in SAE 16 certified data centers in Dallas, Texas and Washington, D.C.

Mortgage Professionals to Watch n Mat Ishbia has been named president of United Shore Financial Services LLC (USFS). Ishbia had previously served as president of United Wholesale Mortgage (UWM), USFS’s largest division.

that is has recruited Anthony Ianni as vice president of lender services. n ICON Residential Lenders has announced that Matt Modugno will join the company as area sales manager of the San Diego, Imperial, Riverside and San Bernardino, Calif. regions. ICON has also announced that Dennis Kuncas has joined the company as senior vice president of mortgage operations.

n Rouvaun Walker has been named vice president of the California Wholesale Division at WCS Lending LLC.

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n Titan Capital Solutions (TCS), a wholly-owned correspondent lending subsidiary of mortgage outsource services provider Titan Lenders Corporation, has hired Joel Veenstra to lead its sales team as national sales director. n Scott Kepler has been named branch head of AnnieMac Home Mortgage’s Tampa, Fla. location. n Residential Finance Corporation (RFC) has named senior industry executive Nick Hahn to the position of chief financial officer. n W.J. Bradley Mortgage Capital LLC has appointed industry veteran Steve Majerus as retail sales regional manager. n MCT Trading Inc. (MCT) has announced that Kevin Miller has joined the company as a trading analyst. MCT has also announced


n FirstClose has announced that it has added Dave Widmoyer to manage and grow its Midwest territory.


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n Real Estate Mortgage Network Inc. (REMN) has expanded its South Atlantic presence with a new office in Richmond, Va., which will be managed Lindy Pond.


In today’s mortgage business there’s no time to shop around for marketing products and services. Your time needs to be spent with prospects and customers. Finding a marketing company that can handle all of your marketing needs and not just one aspect is more important than ever. A company that will also track all of your marketing and send you reports that will keep you ahead of the trend. Use CRM tools to track five to 10 times the prospects allowing you to work more customers in the same amount of time. There are hundreds of online tools available to help increase your ROI. Find a company that already understands how they work and will help you decide which ones are a fit for you.


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n Norcom Mortgage has announced the promotions of Ryan Kelly and Josh Gillooly to the positions of marketing manager and corporate recruitment officer, respectively. Norcom has also announced the addition of Jeremy Potter as chief compliance attorney.





There are thousands of people that NEED help Reverse mortgages are often their only hope Marketing is working very well right now There are changes coming that may change the way reverse mortgages are written

continued from page 10


Some things to keep in mind when the future is … UNKNOWN?

heard on the street


HECM to Undergo Major Changes

n Elliott Eisenberg, former senior economist for the National Association of Home Builders (NAHB), has joined the panel of advisors of Mortgage Success Source (MSS). continued on page 38

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Brian Slodki 14 years in business Bartlett, Illinois v

Dante Miller 13 years in business Corpus Christi, Texas

social media

continued from page 8

there is broad distribution of information exchanges. Failure to adequately address these risks can expose an institution to enforcement actions and/or civil lawsuits. To the extent that a bank or nonbank uses social media to engage in lending, it must comply with applicable laws and regulations as when it engages in these activities through other media.

Laws and regulations The following laws and regulations may be relevant to a financial institution’s social media activities. This list is not all-inclusive. Each financial institution should ensure that it periodically evaluates and controls its use of social media to ensure compliance with all applicable federal, state, and local laws, regulations, and guidance. Social media may be used to market products and originate new accounts. When used to do either, a financial institution must take steps to ensure that advertising, account origination, and document retention are performed in compliance with applicable consumer protection and compliance laws and regulations. These include, but are not limited to:





Fair Lending Laws, Equal Credit Opportunity Act (Regulation B), Fair Housing Act A financial institution should ensure that its use of social media does not violate fair lending laws. n Equal Credit Opportunity Act2, as implemented by Regulation B, prohibits creditors from making any oral or written statement, in advertising or other marketing techniques, to applicants or prospective applicants that would discourage on a prohibited basis a reasonable person from making or pursuing an application. However, a creditor may affirmatively solicit or encourage members of traditionally disadvantaged groups to apply for credit, especially groups that might not normally seek credit from that creditor.3 n Creditors must also observe the time frames outlined under Regulation B for notifying applicants of the outcome of their applications or requesting additional information for incomplete applications, whether those applications are received via social media or through other channels. n As with all prescreened solicitations, a creditor must preserve prescreened solicitations disseminated through social media, as well as the prescreening criteria, in accordance with Regulation B.4 n When denying credit, a creditor must provide an adverse action notice detailing the specific reasons for the decision or notifying the applicant of

his or her right to request the specific reasons for the decision.5 This requirement applies whether the information used to deny credit comes from social media or other sources. n It is also important to note that creditors may not, with limited exceptions, request certain information, such as information about an applicant’s race, color, religion, national origin, or sex. Since social media platforms may collect such information about participants in various ways, a creditor should ensure that it is not requesting, collecting, or otherwise using such information in violation of applicable fair lending laws. n Particularly if the social media platform is maintained by a third party that may request or require users to provide personal information such as age and/or sex or use data mining technology to obtain such information from social media sites, the creditor should ensure that it does not itself improperly request, collect, or use such information or give the appearance of doing so. The Fair Housing Act (FHA)6 prohibits discrimination based on race, color, national origin, religion, sex, familial status, or handicap in the sale and rental of housing, in mortgage lending, and in appraisals of residential real property. In addition, the FHA makes it unlawful to advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition applies to all advertising media, including social media sites. For example, if a financial institution engages in residential mortgage lending and maintains a presence on Facebook, the Equal Housing Opportunity logo must be displayed on its Facebook page, as applicable.7 Truth-in-Lending Act (Regulation Z) Any social media communication in which a creditor advertises credit products must comply with Regulation Z’s advertising provisions. Regulation Z,8 the implementing regulation of the Truth in Lending Act (TILA), broadly defines advertisements as any commercial messages that promote consumer credit, and the official commentary to Regulation Z states that the regulation’s advertising rules apply to advertisements delivered electronically. In addition, Regulation Z is designed to promote the informed use of consumer credit by requiring disclosures about loan terms and costs. The disclosure requirements vary based on whether the credit is open-end or closed-end. Further, within those two broad categories, additional specific requirements apply to certain types of

loans such as private education loans, home secured loans, and credit card accounts. n Regulation Z requires that advertisements relating to credit present certain information in a clear and conspicuous manner. It includes requirements regarding the proper disclosure of the annual percentage rate and other loan features. If an advertisement for credit states specific credit terms, it must state only those terms that actually are or will be arranged or offered by the creditor. n For electronic advertisements, such as those delivered via social media, Regulation Z permits providing the required information on a table or schedule that is located on a different page from the main advertisement if that table or schedule is clear and conspicuous and the advertisement clearly refers to the page or location. n Regulation Z requires that, for consumer loan applications taken electronically, including via social media, the financial institution must provide the consumer with all Regulation Z disclosures within the required time frames. Real Estate Settlement Procedures Act (RESPA) RESPA9, through its implementing Regulation X, prohibits certain activities in connection with federally related mortgage loans. These prohibitions include fee splitting, as well as giving or accepting a fee, kickback, or thing of value in exchange for referrals of settlement service business. RESPA also has specific timing requirements for certain disclosures. These requirements apply to applications taken electronically, including via social media.

The Electronic Fund Transfer Act and its implementing (EFTA)14 Regulation E provide consumers with, among other things, protections regarding “electronic fund transfers” (EFT), defined broadly to include any transfer of funds initiated through an electronic terminal, telephone, computer, or magnetic tape for the purpose of debiting or crediting a consumer’s account at a financial institution. These protections include required disclosures and error resolution procedures. (Note: when a payment occurs via a check-based transaction rather than an EFT, the transaction will be governed by applicable industry rules15 and/or continued on page 30

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Unfair, Deceptive or Abusive Acts or Practices (UDAAP) Section 5 of the Federal Trade Commission Act prohibits “unfair or deceptive acts or practices in or affecting commerce.”11 Sections 1031 and 1036 of the Dodd-

Payment Systems If social media is used to facilitate a

consumer’s use of payment systems, a financial institution should keep in mind the laws, regulations, and industry rules regarding payments that may apply, including those providing disclosure and other rights to consumers. Under existing law, no additional disclosure requirements apply simply because social media is involved (for instance, providing a portal through which consumers access their accounts at a financial institution). Rather, the financial institution should continue to be aware of the existing laws, regulations, guidance, and industry rules that apply to payment systems and evaluate which will apply. These may include the Electronic Fund Transfer Act (Regulation E). v

Fair Debt Collection Practices Act The Fair Debt Collection Practices Act (FDCPA)10 restricts how debt collectors (generally defined as third parties collecting others’ debts and entities collecting debts on their own behalf if they use a different name) may collect debts. The FDCPA generally prohibits debt collectors from publicly disclosing that a consumer owes a debt. Using social media to inappropriately contact consumers, or their families and friends, may violate the restrictions on contacting consumers imposed by the FDCPA. Communicating via social media in a manner that discloses the existence of a debt or to harass or embarrass consumers about their debts (i.e., a debt collector writing about a debt on a Facebook wall) or making false or misleading representations may violate the FDCPA.

Frank Wall Street Reform and Consumer Protection Act12 prohibit unfair, deceptive, or abusive acts or practices. An act or practice can be unfair, deceptive, or abusive despite technical compliance with other laws. A financial institution should not engage in any advertising or other practice via social media that could be deemed “unfair,” “deceptive,” or “abusive.” As with other forms of communication, a financial institution should ensure that information it communicates on social media sites is accurate, consistent with other information delivered through electronic media, and not misleading.13





Lack of Short Sale Code in Credit Reporting System Creating Hardship for Many Consumers By Terry W. Clemans

The system used by the American credit reporting industry to report the history of consumer payments to creditors to the national credit repositories has a serious flaw, according to some members of the mortgage industry. This flaw is the lack of a specific code for short sale mortgage transactions. With the current mortgage cli-

mate of millions of short sale consumers needing properly documented accounts of their previous mortgage problem so they can re-enter the housing market, this problem is reaching epidemic proportions in some of the hardest hit regions of the country. There is speculation that this flaw could be holding back the recovery of the housing market, as many short sellers are prohibited from re-entering the housing market for a longer period of time than required by lenders.

Metro2 is the coding format used by the national credit repositories and the creditors to set the operating procedures for the data in the credit reporting system. It was created by the Consumer Data Industry Association (CDIA), a trade association dominated by the three credit repositories: TransUnion, Experian and Equifax. Anyone working with credit reports much will quickly identify most of the Metro2 codes. In looking at a tradeline for a consumers payment history shown

as an “R-1” for example; the “R” stands for Revolving Accounts like credit cards, “I” for Installment, etc., and the number portion representing the last payment status. As in the “R-1” example, the “1” represents the account being paid as agreed, a “2” represents paid 30 days late and higher numbers steadily indicate later payments on up to the dreaded “9” rating, which indicates the account is in collection. While this is continued on page 52

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social media

Bonded With NAMB

continued from page 27

Article 416 of the Uniform Commercial Code of the relevant state, as well as the Expedited Funds Availability Act, as implemented by Regulation CC.17)

Surety Simplified With Bond Basics By Mason Grashot, CPA

Why do I need to have a surety bond? The short answer is “because THEY said so!” It’s the law.

What does a bond do, anyway?


Surety bonds are similar to insurance in that they offer protection from defined risks. One primary difference is whom they protect. Bonds provide NO protection for the licensee (principal) who is required to purchase them. Instead, bonds protect the state regulating department (obligee) who requires them to be purchased. The “defined risks” they protect against can be found in the bond form, state legislation or rules and regulations prescribed by the state regulator responsible for overseeing the licensees. These typically include fines and fees levied by the regulator as a result of actions (or inactions) of the licensee. Another primary difference is that, unlike insurance where risk is completely transferred to the insurance carrier via the insurance policy, the indemnity (or hold-harmless) agreement between the principal and the surety allows the surety carrier to be reimbursed by the principal for any claims it has to pay to the obligee under the surety bond provided on the principal’s behalf.




What value do surety bonds provide to the industry? Because the underwriting of surety bonds evaluates the character, capital and capacity of the principal, they are often relied upon as part of the overall qualification process to obtain (or maintain) a license with the state regulator. Aside from the consideration that the regulator provides to the license application, that regulator gets a second opinion since the licensee has also met the independent qualifications of the surety industry who has agreed to provide a bond on the licensee’s behalf. Indirectly, the surety underwriting process functions as an additional filter to help ensure that only those individuals of a certain caliber are able to operate as a licensed professional. This certainly assists those high-quality professionals to maintain the reputation of their industry by helping guard against less scrupulous or more risky individuals and the wrong kind of attention that they inevitably attract. 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

Bank Secrecy Act & Anti-Money Laundering Programs (BSA & AML) As required by the Bank Secrecy Act (BSA)18 and applicable regulations,19 financial institutions and certain other entities must have a compliance program that incorporates training from operational staff to the board of directors. Among other elements, the compliance program must include appropriate internal controls to ensure effective risk management and compliance with recordkeeping and reporting requirements under the BSA. Internal controls are the financial institution’s policies, procedures, and processes designed to limit and control risks and to achieve compliance with the BSA. The level of sophistication of the internal controls should be commensurate with the size, structure, risks, and complexity of the financial institution. At a minimum, internal controls include but are not limited to: Implementing an effective customer identification program; implementing risk-based customer due diligence policies, procedures, and processes; understanding expected customer activity; monitoring for unusual or suspicious transactions; and maintaining records of electronic funds transfers. An institution’s BSA/AML program must provide for the following minimum components: a system of internal controls to ensure ongoing compliance; independent testing of BSA/AML compliance, a designated BSA compliance officer responsible for managing compliance, and training for appropriate personnel. These controls should apply to all customers, products and services, including customers engaging in electronic banking (so-called “e-banking”) through the use of social media, and e-banking products and services offered in the context of social media. Financial institutions should also be aware of emerging areas of BSA/AML risk in the virtual world. For example, illicit actors are increasingly using Internet games involving virtual economies, allowing gamers to cash out, as a way to launder money. Virtual world Internet games and digital currencies present a higher risk for money laundering and terrorist financing and should be monitored accordingly.

Major risks Privacy, GLBA, and Data Security Privacy rules have particular relevance to social media when, for instance, a bank or non-bank collects, or otherwise has access to, information from or about consumers.

Sponsored Editorial

Gramm-Leach-Bliley Act Privacy Rules and Data Security Guidelines20 Title V of the Gramm-Leach-Bliley Act

(GLBA) establishes requirements relating to the privacy and security of consumer information. Whenever a financial institution collects, or otherwise has access to, information from or about consumers, it should evaluate whether these rules will apply. The rules have particular relevance to social media when, for instance, a financial institution integrates social media components into customers’ online account experience or takes applications via social media portals. A financial institution using social media should clearly disclose its privacy policies as required under GLBA. Even when there is no “consumer” or “customer” relationship triggering GLBA requirements, a financial institution will likely face reputation risk if it appears to be treating any consumer information carelessly or if it appears to be less than transparent regarding the privacy policies that apply on one or more social media sites that the financial institution uses. CAN-SPAM Act and Telephone Consumer Protection The Controlling the Assault of NonSolicited Pornography and Marketing Act of 2003 (CAN-SPAM Act)21 and Telephone Consumer Protection Act (TCPA)22 may be relevant if a financial institution sends unsolicited communications to consumers via social media. The CAN-SPAM Act and TCPA, and their implementing rules,23 establish requirements for sending unsolicited commercial messages (“spam”) and unsolicited communications by telephone or short message service (SMS) text message, respectively. These restrictions could apply to communications via a social media platform’s messaging feature. Fair Credit Reporting Act The Fair Credit Reporting Act (FCRA)24 contains restrictions and requirements concerning making solicitations using eligibility information, responding to direct disputes, and collecting medical information in connection with loan eligibility. The FCRA applies when social media is used for these activities. Reputation Risk Reputation risk is the risk arising from negative public opinion. Activities that result in dissatisfied consumers and/or negative publicity could harm the reputation and standing of the financial institution, even if the financial institution has not violated any law. Privacy and transparency issues, as well as other consumer protection concerns, arise in social media environments. Therefore, a financial institution engaged in social media activities must be sensitive to, and properly manage, the reputation risks that arise from those activities. continued on page 32

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CFPB Publishes Ability-to-Repay Rule By Laurie Spira

On Jan. 10, 2013, the Consumer Financial Protection Bureau (CFPB) published its long-anticipated Ability-to-Repay Final Rule. Under the provisions of the rule, effective Jan. 10, 2014, creditors will be required to make a reasonable, good faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling (excluding an open-end credit plan, timeshare plan, reverse mortgage, or temporary loan). The rule provides four methods of complying with the ability-to-repay requirement: n Making a general determination of ability to repay by evaluating eight underwriting factors. n Originating a Qualified Mortgage (QM), which creates a “safe harbor” for QMs that are not Higher-Priced Mortgage Loans (HPML) and a rebuttable presumption of compliance for QMs that exceed the HPML thresholds. n Originating a Rural Balloon Payment Qualified Mortgage, if the lender is a small creditor operating predominantly in rural or underserved areas, and if the loan is held in portfolio. n Refinancing a “non-standard mortgage” into a “standard mortgage.” Because of the protections provided by the safe harbor, it is expected that many lenders will decide to offer only loans that meet the definition of a QM. A QM may not have the product features listed below: n Negative amortization, interest-only payments, balloon payments. n Loan term greater than 30 years. n “No documentation” feature, where the creditor does not verify income, assets, or current debt obligations, including alimony and child support. n Points and fees exceeding three percent of the total loan amount, with certain exclusions.





QMs must also meet certain underwriting criteria, as described below: n The monthly payment used to qualify the borrower must be calculated based on the highest payment that will apply in the first five years of the loan. n The consumer must have a “back-end” debt ratio that is less than or equal to 43 percent. Alternatively, under temporary “special rules,” the loan may be treated as a QM if it satisfies the criteria for regular periodic payments, has a maximum 30-year term, maximum points and fees do not exceed three percent of the total loan amount, and is eligible for purchase or guarantee by Fannie Mae or Freddie Mac under conservatorship or a limited-life regulatory entity successor to either; insurance by HUD/FHA or the RHS, or a guarantee by VA or the U.S. Department of Agriculture. These rules expire on the effective date of a QM rule issued by these agencies, or Jan. 10, 2021, whichever comes first. In addition, the final rule also implements the Dodd-Frank Act provisions limiting prepayment penalties and establishes a requirement that creditors retain evidence of compliance with the rule for three years after a loan covered by the rule is consummated. Immediately following the publication of the Ability-to-Repay rule, the CFPB published two additional rules, and within 10 days, had published four more. The final rules total over 3,000 pages with effective dates ranging from June 1, 2013-Jan. 18, 2014. It’s been noted that the pages are double spaced, but even so, that’s a staggering amount of regulation for any financial institution to read, digest and comply with. The beginning of this so-called “Year of Implementation” is the time to identify the basic issues associated with compliance—ensuring a full understanding of the rules and how they interrelate, and identifying any changes that might be needed to product offerings, pricing and fees. Careful analysis now will allow your business to maintain … or perhaps even gain … momentum in 2014. Laurie Spira is chief compliance officer with Torrance, Calif.-based DocMagic Inc. She may be reached by phone at (800) 649-1362, ext. 6446 or e-mail

Sponsored Editorial

social media

continued from page 30

Fraud and Brand Identity Financial institutions should be aware that protecting their brand identity in a social media context can be challenging. Risk may arise in many ways, such as through comments made by social media users, spoofs of institution communications, and activities in which fraudsters masquerade as the institution. Financial institutions should consider the use of social media monitoring tools and techniques to identify heightened risk and respond appropriately. Financial institutions should have appropriate policies in place to monitor and address in a timely manner the fraudulent use of the financial institution’s brand, such as through phishing or spoofing attacks. Third-Party Concerns25 Working with third parties to provide social media services can expose financial institutions to substantial reputation risk. A bank or non-bank should regularly monitor the information it places on social media sites. This monitoring is the direct responsibility of the financial institution, even when such functions may be delegated to third parties. Even if a social media site is owned and maintained by a third party, consumers using the financial institution’s part of that site may blame the financial institution for problems that occur on that site, such as uses of their personal information they did not expect or changes to policies that are unclear. The financial institution’s ability to control content on a site owned or administered by a third party and to change policies regarding information provided through the site may vary depending on the particular site and the contractual arrangement with the third party. A financial institution should thus weigh these issues against the benefits of using a third party to conduct social media activities. Privacy Concerns Even when a financial institution complies with applicable privacy laws in its social media activities, it should consider the potential reaction by the public to any use of consumer information via social media. The financial institution should have procedures to address risks from occurrences such as members of the public posting confidential or sensitive information-for example, account numbers-on the financial institution’s social media page or site. Consumer Complaints and Inquiries Although a financial institution can take advantage of the public nature of social media to address customer complaints and questions, reputation risks exist when the financial institution does not address consumer questions or complaints in a timely or appropriate manner. Further, the participatory nature of social media can expose a financial institution to reputation risks that may occur when users post critical or inaccurate statements. Compliance risk can also arise

when a customer uses social media in an effort to initiate a dispute, such as an error dispute under Regulation E, a billing error under Regulation Z, or a direct dispute about information furnished to a consumer institution should have monitoring procedures in place to address the potential for these statements or complaints to require further investigation. Some institutions have employed monitoring software to identify any active discussion of the institution on the Internet. The bank or non-bank should also consider whether, and how, to respond to communications disparaging the financial institution on other parties’ social media sites. To properly control these risks, financial institutions should consider the feasibility of monitoring question and complaint forums on social media sites to ensure that such inquiries, complaints, or comments are addressed in a timely and appropriate manner. Employee Use of Social Media Sites Financial institutions should be aware that employees’ communications via social media-even through employees’ own personal social media accounts-may be viewed by the public as reflecting the financial institution’s official policies or may otherwise reflect poorly on the financial institution, depending on the form and content of the communications. Employee communications can also subject the financial institution to compliance risk as well as reputation risk. Therefore, financial institutions should establish appropriate policies to address employee participation in social media that implicates the financial institution. The Agencies do not intend this guidance to address any employment law principles that may be relevant to employee use of social media. Each financial institution should evaluate the risks for itself and determine appropriate policies to adopt in light of those risks. Operational Risk Operational risk is the risk of loss resulting from inadequate or failed processes, people, or systems. The root cause can be either internal or external events.26 Operational risk includes the risks posed by a financial institution’s use of information technology (IT), which encompasses social media. In order to identify, monitor, and manage of IT-related risks, I would recommend FFIEC’s Information Technology Examination Handbook,27 and also its booklets Outsourcing Technology Services28 and Information Security29 when using social media, and include social media in existing risk assessment and management programs. Social media is one of several platforms vulnerable to account takeover and the distribution of malware. A financial institution should ensure that the controls it implements to protect its systems and continued on page 40

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mortgageprofessional N M P




Don Iannitti, President and CEO DocMagic Inc. BY DAVID J. COSTER



n this month’s issue of National Mortgage Professional Magazine, we had a chance to speak with Don Iannitti, president and chief executive officer of DocMagic Inc. Don is an original. His company, Document Systems Inc., is a reflection of his unique abilities, drives and outlook on life. Whether it’s his stateof-the art, architectural award-winning headquarters, or his unique magic-themed marketing campaigns, Don, the company he created and the products he has developed over the span of 25 years, stand out in a crowd of mortgage technology providers. The following is a reflection on the history, accomplishments and future goals of this pioneering mortgage industry icon. Tell me how Document Systems Inc. came to be. I was actually in college at the time I started the company. That was back in 1987. I was a finance and computer methods in business major. I was working for a company that processed documentation at the time. They were mainframe-based so it was very difficult to make any changes. I had been reading a book, In Search of Excellence, I think it was. It talked about neat emerging technologies and what effects those might have in the future. I recall there being one particular emerging potential business, which was the repackaging of data—the repackaging of information. I remember thinking to

“Every company should be very clearly devoted to something that they think sets them apart, and they should be committed to it and never stop being concerned about it.” myself, “What a neat concept that would be. I wonder how that will look when it finally materializes.” I realized that I was actually working for a company that was really doing that—but ineffectively. I worked on a business plan, and devised a company and what it would do, and went out and found investors that would believe in me and provide me with the money. We would create a document package in house, and we would buy forms, speedtype them and build a package. We had a network of couriers that worked for the company that would then deliver those packages. It was very southern California based. Normally, if you dealt with a company like ours, you would get your documents in a day, possibly two. We introduced the concept of doing it same-day. We would get orders in the morning, and we would then turn around and have those orders delivered in the afternoon. That allowed us to really take control of the business, at least in California. You pioneered the concept of remote electronic document delivery. How did that come about? We had about a 1,000-square-foot

office—very small. We didn’t have any place to put the laser printer. So we bought a laser printer, and we’re all, “Where are we going to put this thing?” So we put it in the front room, which was a ways away. But the funny thing was— when we sent a form to it and it printed, and we’re all looking at each other like, “Wow, we could put this printer in someone else’s office. It doesn’t have to be here anymore.” I honestly think that was the day that the concept of remote electronic delivery actually came to our minds. You also developed one of the first mortgage data auditing systems. Share with us its history. I think with almost our first or second set of documents, we developed the initial phase of the audit system. This is the basis and core of how we maintain integrity in the data that we take from our clients and the documents that we provide them. We were never a garbage-in, garbageout type of company. That was never something that we accepted as being a given in our line of business. We always made a point to say, “No!” If a client tried to give us garbage. We would detect it and not allow them to draw documents.

Tell us about your commitment to customer service. The most important thing that you can do as a service business is to listen to your clients. Then take it a step further. It’s one thing to listen … it’s another thing to be able to effectively respond. We try to always anticipate needs before our clients know that they have them. Every one of our products offers the ability for a client to tell us what they want. Every one of our modules has an option on the help menu that says, “Send us feedback.” We get constant feedback. That feedback goes directly to the director of product development and to me. We’ll immediately assign a representative in the support department. At that point, we’ll assess—is there an option to solve the problem today that the client’s just not aware of? Or do we need to build something? We don’t come out of the experience thinking, “Okay, that’s another nice feature to have,” and put it down to build later. We have no queue of those types of features. It immediately goes into the development queue. How can lenders learn from your customer service example? Clients respond very well to technology. I think a lot of times borrowers are not as aware of the current status of the loan as they should be. One of the products that we’re working on now is a smartphone or electronic pad-based system that enables lenders to provide documents for signing, for capture. It creates a conduit—a very tight conduit, between the borrower and the lender. It provides a very simple running workflow of where we’re at relative to the timeline that this loan is going to ultimately take. And it interfaces and leverages the data we know about in Doc Magic to accomplish this. You are a leading proponent of e-signatures. How are you leveraging that technology? All of our document packages now are esignable in the sense that a client can produce any type of package or document and transmit it for electronic signature to the borrower. You can have a pile of documents, some can be e-signed, some require a notary, and some legitimately have to have a wet signature. If you just

load them into the eSign system, it knows automatically which are which, and immediately facilitates the process. We also released what we call the FreeSign system. That’s where our clients and anyone else can come to the Webpage and upload any PDF document that they want, and tell us where they want it signed. No matter how many people need to sign it, they hit a button and instantly everyone gets electronic invitations, and we’re signing documents. We’re doing that for schools, hospitals, just every type of company you can imagine. We’re getting a lot of traction with that. Our goal is to continue to build tools and enhance that product so that we can really help companies go paperless completely—not just with a mortgage transaction, but with everything.

What do you want to make sure folks in the industry know about Document Systems Inc.? First, we consider ourselves to be a solution provider. What we enjoy most is when our partners and our clients come to us and say, “We’ve got a problem. Here’s what we need to do. Is there anything you guys can do to help us out?” That makes our day. Second, there’s a wealth of data in this business, and there’s so much that we can do with it. We can ultimately make our clients more efficient at what they do. We’ve tried to demonstrate that anything that relates to the data or documents in any way, shape, or form—we take responsibility for that. We can provide a validation to anyone that holds a DocMagic document. We can absolutely tell you precisely what the data set was. We can tell you when that document was created. We can tell you who did it, where it went, where it’s been. That’s essential in the current and future mortgage industry. David J. Coster is senior editor of National Mortgage Professional Magazine. He may be reached by phone at (919) 559-2171 or e-mail



You have many employees that have been with the firm for a long time. How do you accomplish that? What’s been important to me is making sure that our number one asset, our employees—that they are always being taken care of. It’s the highest possible priority for us to treat this group like a fami-

What emerging trends or technological needs are you excited about in the industry? I think that what it’s about now is data integrity. It’s about auditing. It’s about QC. We need to make sure these files are solid. We need to make sure that the information that’s in them is confirmed and validated. Re-keying of data—that’s going to go away. It’s not okay to re-enter data. The data degradation from moving from one system to the other is not acceptable anymore. I think that at every step along that path, there needs to be an auditing engine of record that’s making sure that everything is perfect. Our engine can be used and leveraged by our partners in that way. v

Are you obsessed with speed? Our processing speeds are absolutely dramatic. We can produce a 60-document package in probably 1.7 seconds now, which is extremely fast. Our closest competitors produce a package like that in a minute. There’s just no comparison. We’ll stop worrying about speed when we get that 60-document package produced in less than a second. However, getting from 1.7 seconds to 0.7 seconds is a multimillion dollar endeavor. Every company should be very clearly devoted to something that they think sets them apart, and they should be committed to it and never stop being concerned about it. To me, it’s always been speed, because that speed finds its way into every aspect of what we do. What has been your greatest accomplishment in business? I think our greatest accomplishment has been DocMagic. The product itself—I am always and continually amazed at how fast it is. What it’s doing in 1.7 seconds is absolutely a marvel. The eSign system— that’s our new focal point. It’s everything to us at this point, and we are making sure that it’s capable of accommodating everything it needs to.

ly. Having high customer satisfaction is the number one priority. It’s a very simple concept. It makes it really easy for you to make sure that your employees are in alignment with that by the way that they handle certain things, and the way that they handle clients. It makes it real simple for us to make sure we have the right people.


United Wholesale Mortgage Launches New Tool to Aid Brokers





United Wholesale Mortgage (UWM) announced that it designed and launched a unique dashboard-level reporting system for brokers. Dubbed Account Success Report (ASR), the proprietary system tracks and analyzes brokers’ loan quality, efficiency and production. A monthly report is produced containing key information that gives brokers visibility into their performance and how they can improve their status with UWM. ASR’s functionality resides within UWM’s broker portal, EASE (Easiest Application System Ever), where it can be accessed 24/7 by brokers and is updated with new statistics on the first of each month. ASR’s dashboard offers an easy-to-view snapshot of key performance indicators (KPIs) such as submission to close percentage, volume closed in dollars, approved loan percentage, average touches by underwriters, FICO score average, LTV average and more. Brokers are scored and assigned status beginning with Diamond being the top level followed by Platinum, Gold, Silver and Bronze. Each status accompanies different benefits to doing business with UWM. “The idea behind the launch of ASR is simple: we want to provide our customer base with detailed information on their success with UWM and the type of business they are sending,” said Mat Ishbia, president of UWM. “We are providing transparency into how UWM measures each account, enabling them to work on improving these metrics. Our ASR is more focused on their loan quality and efficiency with UWM, rather than production or other aspects.”

Mercury Network and Class Appraisal Partner on New Appraisal Offering

Class Appraisal and a la mode have announced the launch of a customized MercuryDirect plugin that further enhances Class Appraisal’s connection to a la mode’s Mercury Network to reduce appraisal turn times and ensure the highest appraisal quality for Class’

lender clients. Class Appraisal’s new MercuryDirect plug-in will leverage Mercury Network’s direct connection to the desktop of the nation’s appraisers to streamline compliant appraisal ordering and delivery, automate order status updates, and to run Class’ customized review rules on reports predelivery. The comprehensive appraisal review takes place on the appraiser’s desktop, before the appraiser ever delivers the report to Class for the first time. Thousands of proprietary rules, based on Class expertise, applied business rules, investor requirements, current compliance guidelines, and more, provide the most effective quality screen and also cut down on the rework rate which in turn speeds up final delivery of a higher quality report to Class clients. “This innovative plugin with Mercury Network, combined with our 91-hoursa-week accessibility for client support, translates to the industry’s best appraisal management experience,” said Mark Backonen, CEO of Class Appraisals. “In 2013, we will be launching even more tools based on our extensive experience that provide our clients the industry’s best workflow tools for underwriters.” “With this plug-in, Class Appraisal has gone the extra mile in providing the highest quality appraisals in the fastest time to their clients”, said Jennifer Miller, president of a la mode’s Mortgage Solutions Division. “The plugin gives Class distinct advantages, both in streamlining their own operations, and in providing the highest quality collateral value review and due diligence documentation for their clients.”

360 Mortgage Group Unveils New FHA and VA Offerings 360 Mortgage Group has announced that it has expanded its product portfolio by offering two new refinance products– Veterans Affairs (VA) Interest Rate Reduction Refinance Loan Program and the Federal Housing Administration (FHA) Non-Credit Qualifying Streamline Product. The VA Interest Rate Reduction Refinance Loan Program is designed to help qualified veterans, reservists, active duty personnel, or eligible family members with VA home loans benefit from current historically low interest

rates with minimum requirements, while the FHA Non-Credit Qualifying Streamline Product will help individuals with FHA home loans take advantage of low interest rates without an appraisal or income documentation. “360 Mortgage is committed to partnering with high quality mortgage brokers to help their clients refinance their homes on the most affordable terms available in the marketplace,” said Mark Greco, president and founder of 360 Mortgage. “Our two new product offerings will allow even more homeowners to take advantage of current low interest rates and offer real solutions to borrowers, especially those that have been restricted from refinancing due to various eligibility requirements.” The VA Interest Rate Reduction Refinance Loan Program (also known as VA IRRRL) will offer individuals with VA home loans the opportunity to lower their interest rates and decrease their monthly mortgage payment. The FHA Non-Credit Qualifying Streamline Product will offer individuals with FHA home loans the opportunity to secure government insured loans at a lower interest rate without a costly appraisal and with less paperwork. “We strongly believe both these programs will contribute to overall recovery of the real estate market, as well as local and national economies,” said Greco.

New PATHWAY Technology From Veros to Provide Fannie Mae Appraisal Messages Veros Real Estate Solutions has announced its PATHWAY solution is ready to deliver Fannie Mae’s proprietary appraisal messages when the GSE activates them on Jan. 28th. The messages are part of Fannie Mae’s program to provide specific feedback on appraisals submitted to the Uniform Collateral Data Portal (UCDP), a GSE requirement prior to loan submission that allows data checking on valuations before full loan files are received. Messages are sent from Fannie Mae on data inconsistencies and other appraisal quality issues on the system, intended to improve overall valuation reasonableness and quality of data for Fannie Mae loans. Fannie Mae has encouraged lenders to begin preparing for the new messages by reviewing the Appraisal Findings Reports and ensuring their technology vendor has plans to support the new messaging. Veros’ PATHWAY technology is ready now and available to industry users in plenty of time to meet the Jan. 28, 2013 activation date. Veros designed PATHWAY as an ideal solution for entities with volumes too large for manual upload to UCDP’s web interface, but too small to require an enterprise platform solution. PATHWAY assists correspondent lenders, AMCs and other technology providers in connecting to the portal with minimal technology integration. The solution allows for

seamless submission to UCDP, PDF conversion to the required XML format, submission of Uniform Appraisal Dataset (UAD) and non-UAD reports, a UAD compliance quality check, and the ability to preview and resolve potential errors prior to submission. “Fannie Mae is to be commended for taking yet another step toward data transparency throughout the mortgage transaction,” said David Rasmussen, senior vice president of operations for Veros. “Providing the lender with the information necessary to identify significant data, policy or property issues truly helps get down to the core concerns around data quality. We are pleased to announce PATHWAY is fully equipped to allow the transmission of this information.”

CoreLogic Launches New RMBS Bond Assessment Service

CoreLogic has announced the availability of CoreLogic Bond Tracker, an innovative bond assessment service for nonagency residential mortgage-backed securities (RMBS). The service offers granular, dynamic, and automated analyses of security holdings and underlying collateral. CoreLogic Bond Tracker will provide life-of-bond surveillance and aid investors, banks and other institutions in valuing and assessing the credit risk of mortgage securities. CoreLogic Bond Tracker will incorporate a wide range of risk factors including property value changes and other market-impacting events. Specifically, CoreLogic Bond Tracker: n Provides credit assessments of nonagency RMBS across product type, vintage and tranche position, with credit grades ranging in descending order from AAA through D. CoreLogic Bond Tracker can incorporate the position at which the bond or tranche was purchased or marked when evaluating the likelihood of investment loss. n Includes a sensitivity score ranging from 1-5, assessing the likelihood of credit grade migration due to deviation of future performance from projected bond cash flows. n Publishes cohort-level assessments on approximately 23,000 nonagency bonds. n Refreshes dynamically to reflect, as appropriate, factors affecting credit performance, incorporating impacts based on the CoreLogic HPI suite of real estate analytics. n Employs the premier analytic engines of CoreLogic, including its loan-level evaluation tool (RiskModel) and its structuredfinance Bond Analytics platform to derive a probability-weighted outcome that the investment in a bond or tranche will incur a loss. “Today, investors are looking for greater transparency into the quality and risks of the collateral backing non-

agency bonds, and issuers are looking for new ways to rebuild investor confidence. We believe CoreLogic Bond Tracker will appeal to both groups,” said Ben Graboske, senior vice president, Real Estate and Financial Services for CoreLogic. “We’ve designed CoreLogic Bond Tracker to utilize our data and risk tools to provide information and surveillance that is objective and data based to augment what is currently available.”

CoesterVMS Introduces New Flat-Fee Appraisals

LenderLive and Mortgage Harmony Partner on “HarmonyLoan” Product Mortgage Harmony Corporation has announced an alliance with LenderLive Network in an effort to enhance market awareness of the HarmonyLoan to financial institutions and mortgage finance professionals. The HarmonyLoan is a consumer-initiated, interest rate-resetting mortgage continued on page 38



Carrington Mortgage Services LLC has announced that it will offer the Streamline FHA 203K loan program, which allows for up to $35,000 in property repairs to be financed into the loan, through its retail and wholesale businesses. Carrington’s retail lending division will now control the complete operation cycle and related servicing for all of its 203K loans, which were previously offered as a brokered product. Carrington’s wholesale lending division will also add the 203K loan program to its portfolio of governmentinsured products as of April 1. Intended for the purchase or refi-

markets and approach their local businesses with added confidence in what they have to offer.”


Carrington Adds Streamline FHA 203K Loans to Its Offerings

presents opportunities for purchasefocused brokers to work directly with real estate agents, consumers and investors throughout the front-end lifecycle of these loans, thereby maintaining involvement and increasing the potential for repeat or referral business. “We are pleased to offer FHA 203K loans through our retail and wholesale businesses, and to bring all aspects of these transactions including underwriting and closing timelines under our control,” said Carrington Mortgage Services LLC’s Mortgage Lending Division Executive Vice President Ray Brousseau. “This initiative enables us to more effectively serve our customers as well as the brokers and realtors we partner with, allowing them to widen their v

CoesterVMS has implemented its flat fee model for residential appraisals. Under the flat fee model, all conventional appraisals are priced at $450 while FHA appraisals are $475. Appraisal management companies (AMCs) generally utilize a tiered fee structure, whereby prices are determined based on the property type or the state in which the property is located. In addition to providing the convenience of a consistent, reliable pricing structure, the company’s flat fee model enables lenders to better comply with guidelines under the Real Estate Settlement Procedures Act (RESPA) concerning how loan costs are disclosed to borrowers. “RESPA guidelines mandate new disclosures to be sent to borrowers when the difference between quoted fees and actual fees is 10 percent or more,” said Brian Coester, CEO of CoesterVMS. “With tiered appraisal fee structures, there tends to be a lot of add-on fees, which can easily put the lender at risk of a RESPA violation. On the other hand, there’s nothing safer than a fixed fee.” CoesterVMS implemented its flat fee structure after several months of successful testing. Previously, clients would be required to submit a certain number of orders to qualify for the flat fee. As of Jan. 1, the flat fee became available to all CoesterVMS clients regardless of order volume. The change does not affect current CoesterVMS clients with negotiated contractual arrangements.

nance of properties that require minor repairs and upgrades, 203K loans are attractive to consumers as well as real estate agents who can benefit from extending their reach into untapped markets of prospective buyers. Borrowers interested in purchasing distressed properties, which accounted for between 20-25 percent of all home sales in 2012, may find the 203K loan an ideal solution for these types of properties that are often in less than move-in condition. For real estate professionals, having a single interface for getting these loans approved and funded can expedite closings–creating an added incentive to partner with a Carrington loan officer in their market. From a wholesale perspective, this initiative

new to market

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with a patented recurring compensation structure for loan officers. Through its five divisions, LenderLive seeks to offer origination, conduit, document and settlement services and loan servicing to more than 400 clients nationwide. “We continually look for opportunities to bring value to our customers,” said Rick Seehausen, CEO of LenderLive Network. “We are very excited about this opportunity.” Borrowers who secure a HarmonyLoan will be able to take advantage of lower interest rates or extend the loan term without the hassles and costs of refinancing. They can reset their rate as often as every 120 days with a click of a button, assuming their payment history is solid.

Radian Introduces New MI App for Android Devices





Radian Guaranty Inc. has announced the availability of its mortgage insurance (MI) rate finder app, Radian Rates, for Android devices on Google Play. The first of its kind in the MI industry, Radian Rates is a mobile version of the company’s existing online rate finder and offers lenders on-the-go access for a quick and reliable Radian MI rate. Just like the iPhone and iPad version launched this past September, app users can simply input loan criteria and the app automatically calculates the MI rate for a variety of Radian products. Backed by the company’s published rates and guidelines, Radian Rates was designed for users to check eligibility and compare options to find the product that best fits their needs. “We developed Radian Rates as another way to make it quicker and easier for our lending partners to do business with us,” said Brien McMahon, Radian’s chief franchise officer and head of sales. “Based on the positive feedback from our App Store release, we wanted to expedite a version for Android to ensure we were providing all of our customers with the ability to access our rates in seconds on their smartphone, wherever they are, to better accommodate their busy schedules.”

Clayton Holdings Expands Its MSR Offerings

Clayton Holdings LLC has announced that it is now offering a broad array of services designed to support the growing volume of mortgage servicing rights (MSRs) transactions. Clayton is excited to be able to assist the market in identifying and understanding the risk in MSR trades that have become more frequent as a result of new regulations and capital requirements. Clayton’s

MSR Transaction Services is already working with a number of banks and investors, including private equity and hedge fund buyers, as well as special servicers to identify risks inherent in acquiring MSRs. Specifically, the group will: Confirm that originators, servicers and their third-party vendors are in compliance with stated policies, guidelines, regulations, industry standards and best practices; identify underlying collateral and borrower risk via lien searches, pay history and collection comment reviews; perform escrow and advance fee reconciliation, compensatory fee exposure assessments, and ARM audits to limit liability from previous servicer errors; ensure a seamless MSR transfer by helping to evaluate and select an appropriate sub-servicer while validating critical data points during the transfer; and perform more extensive assessments upon request, including a full review of credit, compliance and valuations. “Clayton has been providing consulting, loan review and surveillance services to banks and investors for more than 20 years,” said Tom Donatacci, executive vice president of Clayton Holdings. “Our new MSR Transaction Service builds on this experience and our deep bench strength in loan file reviewers to deliver a full array of offerings that will help both buyers and sellers efficiently identify the value and risks in the MSR deals that are coming to market.”

Mortgage Returns Unveils New Customer Retention Analysis to Aid Lenders

Mortgage Returns has announced the launch of a new retention analysis tool for lenders who need to understand and improve their customer retention rates. Mortgage Returns can now analyze and report on historical customer retention rates for mortgage originators. This allows the company to compare retention rates to industry averages and develop comprehensive marketing plans specifically designed to achieve goals. “Many lenders have no way to measure their customer retention rates,” said Jim Blatt, CEO of Mortgage Returns. “I’m a believer in Peter Drucker’s philosophy, ‘If you can’t measure it, you can’t manage it.’ Our new retention analysis tool will help lenders to first understand what their customer retention is and then give them the marketing strategies to improve it.”

Envoy Mortgage Expands Its FHA 203(k) Product Envoy Mortgage has expanded its FHA 203(k) loan product offerings to include a full 203(k) loan option,

which gives borrowers an unrestricted window to cover the costs of renovation and repair on a home purchase— limited only by area FHA loan limits that vary from market to market. The renovation and repair costs are rolled into one FHA 203(k) mortgage. Envoy already currently offers a streamlined 203(k) product, in which borrowers can combine the purchase price of a home, plus up to $35,000 for renovation and repair costs, into a single mortgage transaction. The new full 203(k) product gives borrowers the option to devote more funds for repair and renovations, which are rolled into the mortgage amount. “The U.S. real estate market continues to have a high inventory of distressed properties, which include foreclosures and REOs that are a result of the economic downturn,” said Suzanne Schakett, senior vice president of builder products in Envoy Mortgage’s National Builder Division. “The full 203(k) loan is a constructionrelated product that essentially benefits everyone involved in real estate today.” The full 203(k) FHA loan augments Envoy Mortgage’s suite of products that fall under its National Builder Division umbrella. Through either the streamline or full 203(k) loan product,

heard on the street

a borrower can purchase an existing property, roll in costs of renovation and repair into the final loan amount, close on the property “as is,” and then begin the repairs. The 203(k) products are FHAinsured loans and borrowers can purchase properties under essentially similar guidelines as the FHA 203(b), which allow most to qualify with a 3.5 percent down payment, regardless of the costs for renovation and repair. FHA loan limits vary from market to market, reflecting the cost of housing in each market.

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

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n Global DMS has announced that it has recruited Jody Collup as vice president of marketing. n Stonegate Mortgage Corporation has announced the hiring of Eric Scholtz as executive vice president of structured finance. n The Federal Deposit Insurance Corporation (FDIC) has announced that Sandra L. Thompson, Director of the Division of Risk Management Supervision (RMS), has accepted the position of Deputy Director of Housing Mission and Goals at the Federal Housing Finance Agency (FHFA). n Impac Mortgage has announced that Mike Casey and Matthew Dismore have joined the company’s Correspondent Lending Division. n Affiliated Mortgage Company has named Jason Beene as president of its correspondent lending division. n Genworth Financial Inc. has announced that Michael Derstine joined the company as chief risk officer (CRO) for its Genworth U.S. Mortgage Insurance (USMI) unit. n Dan Carbeck has joined ValueXPress, where he will be responsible for commercial loan originations in the mid-western portion of the United States. n LRES Corporation has named Paul

n n

n n

Abbamonto as chief operations officer (COO). Robert D. Broeksmit has been named managing director of Treliant Risk Advisors. Blueberry Systems LLC has announced Sharon Kenney as its director of IT Governance and Richard Jones as its director of IT Infrastructure. Potomac Mortgage Group Inc. (PMG), has announced the hiring of Sarah Pichardo as vice president. Ben Purser has joined Vericrest Financial as chief risk officer.

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

When did we forget that mortgage brokers are the face of each home loan?

39 v v FEBRUARY 2013 (800) 296-2275


In our crazy world of mortgage securitization and lender portfolios, it’s sometimes easy to forget that most homebuyers buy homes from people, not logos. For decades, the mortgage broker has been the trusted advisor to millions seeking the American Dream. FGMC hasn’t forgotten that, and we’re providing our brokers the widest range of loan products and the most efficient lending processes possible to ensure your clients are getting into new homes ... and that you’ll be the one handing them the keys.

Why is the Regional Conference of Mortgage Bankers Association so Special? What has made it as one of the best conferences in the U.S. for 30 years? By E. Robert Levy Esq.


social media

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safeguard customer information from malicious software adequately address social media usage. Financial institutions’ incident response protocol regarding a security event, such as a data breach or account takeover, should include social media, as appropriate.

Policy and Procedures

Each year, we host the Regional Conference of Mortgage Bankers Associations in Atlantic City, N.J., and each year, it is met with a great turnout and is a rousing success. First and foremost., I must give credit to the Planning Committee members for their dedication and perseverance, some of these members have been with us the entire 30-years we have been presenting this event and others for many years. Some of our members, who we miss greatly including Jim Risko, Henry Senenfelder and Jim Leister have passed on, and some, including Pat Aritz and Sam Morelli, have moved away. Many of our long-term members on the residential segment of the Conference are still with us, including Regina Lowrie, the first female president of the MBA; Marilyn Brown Iannone, liaison for the MBA of NY and past president; Bill Raftery, past president of the MBANJ; Ron Agasar, past president of the MBANJ; Bonnie Nachamie, treasurer of the New York Association of Mortgage Brokers; and Jonathan Pinard, past president of the Empire State Mortgage Bankers Association; as well as Marilyn Brown, Charlie Kauffman, Ron Shapiro and Larry Longua who have been with us for many years on the Commercial Committee. What these individuals created leaves us with a multitude of memories of great conferences over the years and the excitement of more yet to come. Each year, we focus on giving our attendees the kind of experience that they will find extremely valuable for the operation of their businesses and their profitability. We provide general sessions and breakout sessions that hone in on the key issues of the day and show attendees how they can deal with them effectively. These issues include regulatory and legislative activities on both a state and national level. To accomplish this, we bring in top quality speakers for our general sessions and breakouts, as well as provide valuable networking time for attendees in our exhibit halls, cocktail receptions, at breakfast and during breaks in our sessions. We are one of the only conferences that provide both a commercial and residential segment, each of which is a major conference in itself so that one can attend either one or both, and at a reasonable price. Our special room rates at the Taj Mahal (this year only $75 to be in the relatively new and high quality Chairman Tower) together with what registrants get for only one fee makes this conference a truly great deal and a very affordable event. With breakfasts each day, lunches (two during the commercial session, one at the residential session), great food at our four cocktail receptions (you don’t need dinner after one of these!) all for a single fee (and a terrific program as noted). Is there a better conference deal anywhere? We don’t think so and either do the many registrants who return each year … a conference they won’t miss! This year, we are devoting our residential program to getting our registrants ready for a new world of regulation for mortgage lenders and brokers. The rules on QM (Ability-to-Repay), LO compensation, appraisals, etc. coming from the Consumer Financial Protection Bureau (CFPB) will change the landscape of the industry to a significant degree. These rules consume thousands of pages in total (over 800 for QM, over 400 for LO compensation and so on). There is still much to be desired in terms of a lack of clarity in the rules, and in some cases, comments from the industry are still being elicited such as those dealing with the compensation of loan originators. The week of March 11th will be very timely for our Conference in terms of an understanding of these new rules which, for the most part (a few exceptions) will become effective in January of 2014, giving implementation time for the industry. By the time of the Conference, there should be enough information about the rules to provide attendees with an understanding and clarification of what they need to do in order to comply and how they can get ready for exams with the CFPB as well as state examiners. All of this will be dealt with by our expert panelists and speakers, thus once again making our conference a don’t miss event! Another great conference is coming … I look forward to seeing you there! E. Robert Levy Esq. is executive director of the Mortgage Bankers Association of New Jersey. He may be reached by phone at (732) 596-1619 or e-mail Sponsored Editorial

The guidance offered by FFIEC is intended to help financial institutions understand potential consumer compliance and legal risks, as well as related risks, such as reputation and operational risks associated with the use of social media, along with expectations for managing those risks. Although this guidance does not impose additional obligations on banks and nonbanks, as with any new process or product channel, financial institutions must manage potential risks associated with social media usage and access. With this in mind, we recommend the following outline as the de minimis sections for an Social Media and Social Networking Policy and Procedures, conceived as a Employee Manual to be provided to and receipt thereof attested to by all affected employees: n Overview: Preamble and Purpose n Your Identity Online: Inside and Outside Workplace n Creating Social Media Content: Directives n Managing Social Media Content: Permissions and Prohibitions n Fact Checking Your Posts: Accuracy n Correcting Errors Promptly: Timing and Responses n Leaving Comments: Permissions, Proprietary Information n Confidential and Privacy: Disclosure Limitations n Potential Conflicts and Red Flags: Responsibilities n Responding to a Negative Post: Prior Approvals n Posting Recommendations for Colleagues: Prior Approvals n Responding Directly to a Journalist: Prior Approvals n Building Your Virtual Footprint and Network: Restrictions Each section of this manual, where appropriate, must provide clear and unambiguous statements relating to directives, company procedures, permissions, prohibitions, employee responsibilities, prior approval processes, restrictions, and informative examples. As noted previously, banks and nonbanks are using social media as a tool to generate new business and provide a dynamic environment to interact with consumers. As with any product channel, financial institutions must manage potential risks to the financial institution and consumers by ensuring that their risk management programs provide appropriate oversight and control to address the risks associated with social media.

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, or visit or

Footnotes 1-Federal Financial Institutions Examination Council (FFIEC). Social Media: Consumer Compliance Risk Management Guidance, Notice - Request for Comment, FR 78/15 (1/23/13) 2-15 U.S.C. 1601 et seq., 12 CFR pts. 202 and 1002 3-12 CFR pt. 1002, Comment 4(b)-2 4-12 CFR 1002.12(b)(7) 5-12 CFR 1002.9(a)(2) 6-42 U.S.C. 3601 et seq., 24 CFR pt. 100 (HUD) 7-12 CFR 128.4, 338.3, 390.145 8-15 U.S.C. 1601 et seq.; 12 CFR pts. 226 and 1026 9-12 U.S.C. 2607. See Interagency Guidance, Weblinking: Identifying Risks and Risk Management Techniques, (2003)–15a.pdf 10-15 U.S.C. 1692-1692 11-15 U.S.C. 45 12-12 U.S.C. 5531, 5536 13-See FTC Guidance, including Guides Concerning the Use of Endorsements and Testimonials in Advertising, at 14-15 U.S.C. 1693 et seq., 12 CFR pts 205 and 1005 15-See Operating Rules of the National Automated Clearing House Association (NACHA), available at; Rules of the Electronic Check Clearinghouse Organization (ECCHO), available at cc/rules/Rules%20Summary-Mar%202012.pdf 16-UCC Art. 4 17-12 CFR pt. 229 18-“Bank Secrecy Act” is the name that has come to be applied to the Currency and Foreign Transactions Reporting Act (Titles I and II of Public Law 91–508), its amendments, and the other statutes referring to the subject matter of that Act. These statutes are codified at 12 U.S.C. 1829b, 1951–1959; 31 U.S.C. 5311–5314, 5316–5332; and notes thereto 19-Bank Secrecy Act regulations are found throughout 31 CFR Chapter X. Also, the federal banking agencies require institutions under their supervision to establish and maintain a BSA compliance program. See 12 CFR 21.21, 163.177 (OCC); 12 CFR 208.63, 211.5(m), 211.24(j) (FRB); 12 CFR 326.8, 390.354 (FDIC); 12 CFR 748.2 (NCUA). See also Treas. Dep’t Order 180–01 (Sept. 26, 2002) 20-15 U.S.C. 6801 et seq., 12 CFR pt. 1016 (CFPB) and 16 CFR pt. 313 (FTC); Interagency Guidelines Establishing Information Security Standards, 12 CFR pt. 30, app B (OCC); 12 CFR pt. 208, app. D-2 and pt. 225, app. F (FRB); 12 CFR pt. 364, app. B (FDIC); Safeguards Rule, 16 CFR pt. 314 (FTC) 21-15 U.S.C. 7701 et seq 22-47 U.S.C. 227 23-16 CFR pt. 316 (FTC); 47 CFR pts. 64 and 68 (FCC) 24-15 U.S.C. 1681–1681u 25-12 U.S.C. 1813(u). Guidance from the Agencies addressing third-party relationships is generally available on their respective Web sites. See, e.g., CFPB Bulletin 2012–03, Service Providers (Apr. 13, 2012), available at; FDIC FIL 44–2208, Managing Third-Party Risk (June 6, 2008), available at; NCUA Letter 07-CU-13, Evaluating Third Party Relationships (Dec. 2007), available at Documents/LCU2007-13.pdf; OCC Bulletin OCC 2001-47, ThirdParty Relationships (Nov. 1, 2001), available at 26-FFIEC IT Examination Handbook: Management booklet, 2–3 (June 2004), available at 27-Available at 28-Available at 29-Available at

nmp news flash

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The rule also has exemptions from the second appraisal requirement to facilitate loans in rural areas and other transactions. The rule is being issued by the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the National Credit Union Administration, and the Office of the Comptroller of the Currency. The Federal Register notice is attached. The rule will become effective on Jan. 18, 2014. In response to public comments, the agencies intend to publish a supplemental proposal to request additional comment on possible exemptions for “streamlined” refinance programs and small dollar loans, as well as to seek clarification on whether the rule should apply to loans secured by existing manufactured homes and certain other property types.

ulations, and policies when using social media of which the Agencies should be aware?

Harvard Study Finds State of Mortgage Marketplace Today Will Impact the Future of Housing A new report from the Harvard Joint Center for Housing Studies examines lending patterns during the housing boom and current efforts to create a

new mortgage market, in the wake of the housing bust. The report, “Getting On the Right Track: Improving LowIncome and Minority Access to Mortgage Credit after the Housing Bust,” explores how changes to the housing finance system will affect future lending to lower-income and minority borrowers and communities, and what policies and programs will be needed to promote sustainable homeownership opportunities in these areas over time. “Accomplishing these goals will not be easy or quick,” says William Apgar, senior scholar at the Harvard Joint Center for Housing Studies, former FHA Commissioner, and a primary author of the report. “Low-income and minority

communities were among the hardest hit by the mortgage market meltdown. Since policymakers have failed to address longstanding issues — including persistent racial and ethnic discrimination and growing inequality in the distribution of income and wealth— these same households and neighborhoods may not fully benefit from the emerging housing recovery.“ Creating a responsible mortgage market, the report concludes, must start by developing liquidity that provides broad access to mortgage credit that borrowers understand and have the ability to repay. This means reducing the government’s outsized presence continued on page 55

FFIEC to Scrutinize Social Media Policies of Banks and Lenders

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The Federal Financial Institutions Examination Council (FFIEC) has released proposed guidance on the applicability of consumer protection and compliance laws, regulations and policies to activities conducted via social media by banks, savings associations, and credit unions, as well as non-bank entities supervised by the Consumer Financial Protection Bureau (CFPB) and state regulators. The FFIEC is responding to requests for guidance in this area from various industry and consumer interests. The guidance is intended to help financial institutions understand potential consumer compliance, legal, reputation, and operational risks associated with the use of social media, along with expectations for managing those risks. Although the guidance does not impose additional obligations on financial institutions, the FFIEC expects financial institutions to take steps to manage potential risks associated with social media, as they would with any new process or product channel. The FFIEC invites comments on any aspect of the proposed guidance. It is specifically seeking comments on the following questions: n Are there other types of social media, or ways in which financial institutions are using social media, that are not included in the proposed guidance but that should be included? n Are there other consumer protection laws, regulations, policies or concerns that may be implicated by financial institutions’ use of social media that are not discussed in the proposed guidance but that should be discussed? n Are there any technological or other impediments to financial institutions’ compliance with applicable laws, reg-

Lead Generation and Conversion Strategies for Online Mortgage Marketers By Scott Schang Unlocking the secrets of online marketing can either be a challenging and exciting journey, or the most frustrating experience of your marketing life. If you’re new to online mortgage marketing, my goal here is to share my own mistakes and learning curve to hopefully make your path to online lead generation a little less bumpy. If you’re a seasoned online mortgage marketer and you get just one good idea to build on your current success, we’ll call that a win.





Web sites do not generate leads Web site vendors do not want to you to know the truth about the actual role this tool plays in your online marketing strategy. Simply having a Web site will not generate leads. An effectively designed Web site organizes information so that it is easily consumed by your visitor. The opportunity for lead generation occurs when the information on your site earns the trust of the visitor. Lead generation is then accomplished, after trust is earned, and when you ask the visitor to either contact you directly for more information, or you ask the visitor for permission to contact them. It all starts with empowering the consumer.

Empowering consumers The very first thing that has to happen before you will ever convert your first online lead is to drive traffic to your site. There are many ways to drive traffic to your site that range from free, to paid services like pay-per-click. Once the consumer reaches your site, that’s where your conversion strategy begins. Understanding the motivation and mindset of an online consumer is the very first step to designing conversion points on your website that will result in your opportunity to close loans. When it comes to making decisions about homebuying or refinancing, you must take into consideration that consumer trust has been shaped by the years our industry was vilified by the mainstream media as the cause of housing crisis that many are still struggling to recover from. Mortgage lenders have been accused of misinforming consumers at the very least, straight up lying and purposely misleading homeowners at the very worst. Needless to say, the collapse of the real estate and mortgage markets have put consumers on high alert and has forever shaped the landscape of how we need to communicate with online consumers to earn their trust and their business. Empathy is the greatest tool you have when designing your lead generation

is posted on your site three machine. The ability to put different ways. yourself in the consumer’s shoes is your key to success. n In post updates: Think about your own Include an e-mail update online habits. Take a option at the bottom of moment to examine how every post or page on your you yourself use the site. Internet. How often do you n Sidebar updates: Intype questions into Google? clude a newsletter/update If you are like most online sign up from in your site’s consumers, you’re doing sidebar. research and trying to edun Pop-up updates: Stracate yourself so you don’t “The ability to put tegically timed pop-up asks make a bad decision. Now yourself in the conamplify that motivation by sumer’s shoes is your reader if they would like updates. While this about a hundred and key to success.” method makes many maryou’re on your way to keters coil in disgust (I know I don’t like standing in an online mortgage conpop-ups), it is by far the most effective sumer’s shoes. of all lead capture mechanisms if Delivering relevant, accurate and easy times properly. to read answers to the questions that consumers are asking online will empower them to make more informed decisions. 2. Get more information When you empower a consumer, they There are a number of different stratetrust the source, which in turn gives you gies for offering to provide the reader the opportunity to earn their business—If with more information about the topic you ask for it, and make it easy and safe of interest that led them to your site. This visitor may or may not be ready to for them to engage with you. buy or refinance right now, all we know at this point is that they trust you Lead capture strategies You’ve heard the saying that there’s more enough to ask for more information than one way to skin a cat? While maybe before making a decision. Here are just a few ideas for encouragnot as politically correct as some may like, ing the visitor to get more information it is an accurate description of the numerous ways and opportunities you have to about a specific topic. capture the attention and information of Offering in-depth your site’s visitors for the eventual conver- n Downloads: research, statistics, education, bluesion into a commission check. prints, tips and tricks available by The first step to maximizing conversion download is an effective strategy for from your lead capture efforts is to undercapturing contact information. The stand that there is an opportunity to earn amount of information you ask for a visitor’s trust even if they are not ready must be relative to the value of the to buy or refinance right now. download you are offering. If you find There are three levels of commitment that you have no takers, it could be that any site visitor is prepared to make if that your offer is not valuable enough, they feel they have received value, or have or you are asking for too much inforbeen empowered by the information on mation in exchange for the download. your site: n Live chat: This is an advanced strategy that requires that someone is available 1. Get notified of new updates to respond quickly to the visitor’s quesAsking a Web site visitor if they would like tions or comments. There are many to be notified of updates or breaking news free and paid methods for installing a as it occurs is a low commitment, longchat client on your Web site. term strategy for lead conversion. Sometimes this visitor will make a more n Contact me: The easier you make it for your website visitors to contact you, motivated commitment, but for the most the greater chance you’ll have of part, this is your long-term list building engaging in a conversation with the strategy that will pay off for months and visitor. Your phone number and email years to come. You will need a strategy for address should be highly visible anydelivering these updates to this lead where the visitor is on your site. The You can ask a visitor if they would like best placement for your phone numto be notified every time new information

ber is in the upper right corner of your header or sidebar. I put my email address and cell/text number in the author box on every blog post. n Leave a comment–or ask a public comment: The comments section on your blog posts is a great opportunity for the visitor to semi-anonymously ask for more information in a safe environment without having to speak to a salesperson. n Ask a private question: Giving the reader the ability to ask a private question on your site that is e-mailed directly to you is a very effective strategy for starting a conversation with your readers. 3. Apply now/pre-qualification This is your highly-motivated, empowered consumer that is ready to acquire financing to purchase or refinance a home right now. There are also multiple opportunities for asking your visitor if they are ready to buy now:

Generating New Leads With Direct Mail: Back to the Basics

Optimizing your lead conversion strategy

The benefits of direct mail n Enhanced potential response: With mass advertising channels such as TV, print and radio, your message is wasted on consumers either not qualified or not in the market for a mortgage—yet you’re paying for it. Direct mail recipients are targeted and more likely to respond to your offer. There is no wasted coverage. n Super-targeted: Using credit-scored data, you select recipients, such as homeowners in a specific geographic area. With additional filters, you can determine their credit score range and current rate, weed out late or non-payments, send to specific groups such as borrowers with adjustable-rate mortgage (ARM), Veteran’s Affairs (VA) or Federal Housing Administration (FHA) loans, or filter for eligibility for a specific loan type, such as reverse mortgages.

Targeting your direct mail campaign Past clients are the absolute first priority and a must as far as consistent contact. You’re losing money if you’re not keeping in touch and asking for referrals. Kick off your direct mail campaign with this group, and consider mailing to them a couple of times a year, complementing your email campaigns. If you’re new to the business and you don’t have a significant closed client database, consider mailing a drip campaign targeting potential business partners such as real estate agents, financial planners and attorneys. Keep RESPA requirements top of mind, and don’t forget your own neighborhood and/or sphere of interest.

Using a mortgage-specific mailing house If you have help or use a mailing house, continued on page 44



Scott Schang is a branch manager at Broadview Mortgage’s Katella team in Orange, Calif. His approach to marketing has been to develop niche opportunities within specific demographics of online homebuyers. Schang’s expertise includes WordPress, content marketing and online lead generation and conversion. He may be reached by phone at (714) 336-8286, e-mail or visit

It’s a new year, you have a new budget, n A more personal message: Direct mail you’re ready to try new lead generation pieces and processes allow you to techniques, and you’ve decided on direct address prospects by name and offer a mail. Well, okay, so the concept of direct message designed to impact your localmail as a lead generation ity and the needs of hometool has been around forevowners and homebuyers in er, but maybe you tried one your market. You also have mailer in the past and got the ability to include a freezip. Or maybe you paid your bie or giveaway directly in daughter to stuff envelopes your piece. and she tried to help by n Flexible and “test-able:” writing, “I can get you a You can change the mesgreat loan!” on the outside sage and test which headof the envelope, and guess line, artwork and promowhat? Dismal results. tional offer pulls the best Countless mortgage comresults, and you can try a panies have attempted and variety of formats, from failed at direct mail cam“The primary objec- postcards to letters to paigns because they didn’t tive of direct mail is to brochures. know a few basic insider generate phone calls n Measurable response: secrets, or they didn’t create and e-mails. A clear, With a little pre-planning, professional-looking mail you have the ability to vericoncise message can pieces, or they give gave up fy the success of every camproduce profitable too soon. The good news is paign and can more easily responses.” that just as many have had ascertain your return-ongreat success, and you can too. Sometimes investment (ROI) based on calls to a the simplest details will help you gain the toll-free tracking number, returned best results from any marketing effort, and postcards, or specific views of a webdirect mail is no exception. This article will page URL included in your offer. walk you through the basics.


The design and user experience on your site will ultimately be unique to you, your company and the depth of your experience. Different loan originators and companies specialize in different products, niches and approaches to your mortgage business. Fine-tuning your online lead generation system requires a lot of testing, experimenting, tweaking and time. While you can purchase pre-designed sites, the user experience must be carefully considered and crafted to deliver the highest value to your visitor. If you are not getting the results you desire, carefully examine where your system is failing. If you are getting traffic to your site and you are not capturing leads, there is a disconnect between your content and your calls to action. You are either not asking for the sale in a way that is convenient to the reader, or you are unable to earn the visitor’s trust once they are on your site. If you are not happy with the quality of the leads your are generating, you might want to more closely examine the message you are relaying, or the information you are capturing on the lead form. Mastering online lead generation is a journey, not a goal. It is a constant process of analysis and adjustment. Once you have the ability to put yourself in your Web site visitor’s shoes, and learn to ask the right questions at the right time, you will enjoy a lead generation machine that requires little maintenance and produces unique, exclusive leads for years to come. Hope this helps! Good luck on your journey.

By Molly Greene v

n Product/services pages and post: Any mortgage focused site should have pages and posts dedicated to the loan products, downpayment assistance and special refinance programs offered by your company. Inserting links into these pages can be effective, even better is to place a lead capture form directly on the post or page. n Custom sidebar calls to action: If you have the ability to create different sidebars for different pages and post types, you can modify the call to action to be specifically relevant to the content the visitor is currently reading. n Generic sidebar calls to action: If you have only one sidebar that never changes, creating multiple calls to action that lead to one lead capture form is a great strategy. For instance, I use “Buyer Assistance” and “Closing Cost Assistance” as two separate calls to action in my sidebar. Both buttons lead to the same lead capture page. I am basically asking the consumer the same question, two different ways— the program they may qualify for can be used for both downpayment or closing cost assistance. n Navigation bar calls to action: While less convenient and less effective, giving the reader the ability to navigate to your lead capture pages to get more information or apply is always a good idea. n Home page calls to action: The home page of your site is a great place to put

bold, easy to see and use calls to action as part of your graphic navigation launch pad. A clean and easy to navigate home page is a very effective lead capture strategy.

generating new leads with direct mail you won’t have to stuff envelopes, and your volume can be larger. A number of printers/mail houses cater to the mortgage industry. These vendors will help you select credit-scored data from the three credit agencies, which can be sorted to create the right list for your offer. They will also help you create an impactful design that is customized to your company, your area, the format you choose, and the type of loan or borrower you want to attract. (Be sure to include all the required disclaimers in your mail piece that must accompany the use of credit-scored data.) Mailing frequency will depend on your budget. Whatever your schedule may be, if you’re considering a direct mail campaign, research your options, project and budget your costs, implement the program and





continued from page 43

stick to a regular mailing schedule.

The content of your direct mail campaign The primary objective of direct mail is to generate phone calls and e-mails. A clear, concise message can produce profitable responses. Remember to use a consistent theme, signature line and photo on all your marketing to build recognition. This applies equally to your Web site, direct mail, print advertising, billboards and email campaigns. Choice of content is individual and can run the gamut from holiday greetings, closing anniversary congratulatory letters, current rate information, localized market info, financial tips, home loan process tutorials and new loan products. Whatever

you choose, your content must be of high value and appropriate to the targeted audience. Remember that the goal of each direct mail piece you distribute is also to inform or remind folks that you’re in the home loan business, and pique recipients’ interest so they contact you. Always encourage responses by including a “call to action,” such as “Call or e-mail me today for more information!” Remember to print your phone number in a large font and prominent position it so it’s easy to locate. Consider including include a “P.S.” at the bottom of the page with a call to action as an insurance policy to reinforce your message in case the reader skims to the end of the mailer. And don’t forget to include your Web site and e-mail address on all direct mail pieces.

Seven valuable direct mail tips 1. Have a plan. Direct mail marketing is a commitment that will pay off over time, and it works best to create a 12month strategy before you send the first piece. Once you launch your program, consistency is everything. Keep in mind that one single mailer will probably not get results, and don’t falter in your commitment. 2. Craft your image carefully. Decide on a message and image you want to project long before your mail is distributed. Your direct mail piece will represent you, so make a great first impression and be sure every piece reflects your established company brand. 3. Mix it up. Try different ideas in design, content, packaging, offers, and calls to action. Your mail house or printer may be able to show you what has and has not worked for others. You can experiment with various approaches until you get the desired response. Keep in mind that offering to mail respondents free pertinent information and literature can encourage responses, so try it. 4. Don’t distribute generic letters. Make it personal by including the name of the occupant in the piece. Addressing a letter to “Resident” or “Homeowner” will probably earn your message a trip to the trash can. Use quality paper. Studies indicate that you’ll get the best response if envelopes are handaddressed and stamped with a firstclass stamp rather than metered mail or the bulk mail indicia. 5. Include a call to action. For your mail-

er to be most effective, you must provide the recipient with specific instructions about what you want them to do after they read your message. Examples: “Call me today!” “Visit my website and fill out an application!” or, “Return this completed postage-paid card and I will contact you.” Don’t forget to direct people to a website, blog, Facebook page, Twitter, or other social media platform. 6. Use the headline to get the reader’s attention. There’s a fine line between generating excitement and using too much hype, so avoid scammy, junk mail-type copy and over-worked phrases that might put off the reader. 7. Say NO! to bad copywriting, poor grammar and shoddy proofing. Don’t allow your direct mail marketing to go out without a thorough review to catch any errors. This is without a doubt one of the most important elements of your entire campaign. Keep in mind that your name is on every piece that goes out and people will create a perception of you and your company when they see them, so present yourself as a professional with every mailer. They don’t need to be the slickest marketing collateral ever created, but they must look professional and reflect and enhance your company’s branding. Every piece you send must be grammatically correct and free of errors and typos–no exceptions! The National Do-Not-Call Registry and stringent anti-spam legislation have had a significant impact on our industry’s opportunity to freely promote our services. The core methods available to cultivate new business have been reduced to a basic few. Fortunately, direct mail is still a viable lead-generation approach that provides access to a large number of contacts in a short amount of time, and can also be a cost-effective way to reach past, current and potential customers. If you thought direct mail went out of favor, think again! Molly Greene is a marketing specialist at Guaranteed Home Mortgage Company Inc. Founded in 1992, Guaranteed is a licensed mortgage investment and banking firm comprised of more than 300 mortgage professionals lending in 23 states. She may be reached by e-mail at or follow her blog at

The Customer Experience as a Competitive Advantage Many firms pay lip service to pleasing customers, but now it’s the law By Steven J. Ramirez

Building consumer trust: The process


A professional psychologist will likely say that consumers do not really recommend brands to each other, but rather experiences. It is akin to the truism that consumers are not actually swayed by the facts at issue, but rather the story that brings those facts to light. By improving the process so that it enhances the borrower’s experience, lenders can provide customers with a higher level of service they will be eager to share with others. This truly makes customer experience a marketing issue, as well as a compliance concern. This is great news because federal regulators are already pushing the industry in the direction of improving the borrower’s experience. Unfortunately, most lenders will make one or more of these critical errors when they attempt to get this done.



Chasing the new referral In the mortgage industry, referrals have traditionally been associated with business that comes in from a partner, such as a real estate agent or financial advisor. Consumer referrals have never accounted for a large percentage of the typical lender’s business. The reason most commonly heard for this is there simply is no customer loyalty in this business. It is closer to the truth to say consumers traditionally have not understood the mortgage industry well enough to know who to be loyal to. What is clear is that lenders have not earned the trust that brings repeat busi-

ness or referral business from consumers. Who do consumers trust? Each other. Ron Schott, an SEO expert for Search Engine Watch, pointed to a recent Social Impact Consumer Study from Sociable Labs that found that 57 percent of shoppers are more likely to buy after receiving opinions from friends. The same study pointed to Facebook as an increasingly trusted source of consumer information, with 62 percent of online shoppers reading product-related comments from and 75 percent of these shoppers continuing on to click through the retailer’s site. New York public relations firm Edelman found that, in the online world, 76 percent of consumers will recommend companies they trust to a friend or colleague. For the first time in history, the business world has a network of nationwide social channels that allow consumers to come together and recommend companies they trust to their network connections. And their connections are actually taking their advice. Just as consumers look to online outlets for recommendations on what TV to buy or which cell phone has the best rating, home loan borrowers shop online for rates before setting foot in the physical branch. All lenders have to do now is get someone to trust them. v

Managing the customer experience means something quite different today, in the age of Dodd-Frank, than it did even a few years ago. For some lenders, the customer experience was a by-product of their normal banking business. It never appeared on a balance sheet or a profit and loss statement and so it wasn’t something many financial institutions tried very hard to manage. The results, in hindsight, were predictable. Mortgage lenders today are among the professionals who consistently score at the very bottom of the customer satisfaction scale, at least as measured by J.D. Power & Associates. Of course, that’s going to change. Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB), has, on numerous occasions, pointed out that his agency will be concerned with more than just the safety and soundness of the institutions it oversees. Now, mortgage lenders will be held accountable for the experiences consumers walk away with after interacting with them, regardless of whether they received their loans or not. In a post Dodd-Frank world, the customer experience has become a compliance issue, and that’s exactly how most mortgage lenders will treat it. In the process, they’ll miss an incredible opportunity. By doing only what they must to remain in compliance, the standard modus operandi of the compliant financial institution, lenders will lose out on the opportunity to turn the customer experience into a powerful new marketing advantage.

borrowers are likely to be Mistake No. 1: Failing to the most profitable. see the end-to-end Lenders already have experience for your cusaccess to this information tomers. and it will provide a handy Most organizations tend to starting point for their cuscreate silos, which force tomer experience improveexecutives to view processes ments. without the benefit of inforLenders should take mation relating to how care not to make the misthose actions are interrelattake that the larger loan ed across lines of business. amount leads to the more That means their view of the profitable customer. Even customer is fragmented. “In a post-Dodda first time homebuyer can It is important to take a Frank world, the holistic view, evaluating the customer experience make a significant impact on the company’s bottom customer experience across has become a all channels and touch- compliance issue, and line if they begin to refer the company to other borpoints to ensure a true that’s exactly how understanding of how cus- most mortgage lenders rowers through social media channels. By monitomers view your business. will treat it.” toring social media, Because there are so many parties involved in the production of a lenders can engage dissatisfied customers mortgage asset, the mortgage industry is to help transform negative sentiment into notorious for having a fragmented view of a positive customer experience. the customer’s overall experience. A mistake made by one party can sour the Mistake No. 3: Failing to invest enough in employee training. entire process for the borrower. Having someone involved in the trans- In building a customer-centric company action that focuses on the borrower as the culture, employee training brings to life transaction moves toward the closing the values of the brand and the tactical table is a great way to keep control of the customer experience that reflects the overall experience and build trust. With a brand. As opposed to differentiating designated person available to call, a mis- solely on price or features, forwardtake or misstep won’t be the cataclysmic thinking companies help employees— event it could be if the borrower had no call center staff, sales and marketing teams, and senior executives—internalone to reach out to for help. ize corporate initiatives to improve the Mistake No. 2: Treating all customers customer experience. To increase the likelihood of success as equals. Many large organizations undertake cus- through a merger or simply launching a tomer research and collect mountains of new product, employee training is vital data, but relatively few know who their to ensuring that everyone is on board most profitable (not largest) customers with a consistent vision for the cusare. When this data is used, it is often used tomer experience. to segment consumers into fairly homogeThe bottom line … improving customer nous groups, which are then targeted for experience is good for business. In today’s marketing messages. Like most things in life, the smaller por- mortgage industry, customer experience is tion of the lender’s customers will be a compliance imperative, but it can also be responsible for the more significant pro- the key to a much stronger brand and a portion of its profit, which means these are powerful marketing tool. the individuals the originator should target first when focusing on improvements. In Steven J. Ramirez is CEO of Beyond the Arc the past, most lenders have segmented Inc., a customer experience and advanced their pipelines by product type, leading to analytics firm that helps financial services organizations that are heavy in refinance clients identify opportunities to differentiexpertise and under-developed for pur- ate themselves in the marketplace. The chase money lending. This could be a sig- company’s social media data mining helps nificant problem for lenders in the future. clients improve their customer experience As lenders shift to take advantage of across products, channels, and touch the trend toward purchase money lend- points. He may be reached by e-mail at ing, it will be important to know which

Top 10 Tips to Grow Your Mortgage Business When your prospects are savvy businesspeople By Judith Brower Fancher


Growing your business in the mortgage and investment banking industry will mean that you are reaching out to a predominantly well-educated and sophisticated prospect. That means that your marketing must also be sophisticated. It doesn’t mean it can’t be creative or surprising, it just has to be smart. Here are 10 ways you can grow your business, either by accomplishing these tasks yourself, or by calling on a marketing firm to assist you in implementing them.




1. Direct marketing Create an e-mail list that makes sense for your prospects, and update it on a regular basis. Contacting prospects on a regular basis translates into them thinking of you when they have a requirement. Consistency is a key to this process, and while you certainly don’t want to overwhelm people with e-mails, you do need to contact them more than once or twice a year. The content for these e-mails is in the second tip. You will need to make a decision if you are going to send straight e-mails, or if you are going to send HTML messages with graphics. We recommend graphics, and most likely through Constant Contact which tracks how many are opened, allows people to unsubscribe and that you can tie in with other programs in order to automatically add people to the list.

2. White papers

that you value them. There are a huge number of topics you can choose from based on your geography, product types, and most importantly changes in the capital markets.

3. Case studies Much like the white papers, case studies make excellent content for your current clients and prospects. In fact, in cases where you can explain something you did that created an easier process, better pricing, or overcoming challenges will highlight why your prospects would be well-advised to work with you. This type of content is again exactly what smart people may enjoy receiving in their emails. If nothing else, they will find this information interesting to see what types of deals are indeed getting financed and what their competitors are doing.

4. Publicity The same contact you are preparing for your direct marketing can be the basis of publicity articles or vice-versa. If you are already doing publicity, you can link to articles achieved in your direct mail. If you are not currently doing publicity because you are not certain what content to use there, you can utilize your content and target media who would be interested in telling their readers about these subjects. You can offer to be interviewed about the same topics, or to prepare a specific version of the information based on your already devised content topics. In addition, you can develop content knowing that it will be useful in more than one channel. When you are developing a topic for direct mail content, be certain you consider how to publicize that information. When you are developing content for publicity, think about whether the topic can be broadened into a publicity pitch or an article for the online or offline media.

As a mortgage broker or investment banker, the fact is that you do know a lot of information that your prospects would be interested to know, as well. Preparing a white paper on a timely topic will show your expertise and will make you a valuable resource to your current clients, as well as to your prospects. Sending such a paper to your clients and prospects will be seen as a very positive item in their Inbox. Far from 5. Speaking engagements annoying them, it will make them feel Some opportunities to speak at con-

unless this is a specialty ferences require a sponof yours, you hire a sorship investment and professional firm to some do not, but in assist you with this poreither case, you are tion of your marketing. more likely to be conIn a rapidly-changing firmed as a speaker if technological climate, you can bring a smart this is not a tactic you topic to the event organare likely able to do inizers. Those publications house. and associations who put on conferences and 7. Paid search seminars are busy with If you are inclined to every part of the event, “Gaining attention invest additional dollars and are only too pleased will enhance your in your marketing proto have someone reputation through approach them with a the use of your smart gram, you can always use paid search, which pre-conceived idea content, and will is predominantly done about a topic they can build awareness for these days through speak on that matches you and your firm.” Google Adwords. The the target audience for sky is pretty much the limit on how the event. If you are speaking at an event, in much you can spend, but it is not addition to bringing business cards, terribly expensive to conduct a probe certain that you have your public gram that will help increase your relations person with you to schedule ability to come up higher on specifinterviews for you with any journal- ic keywords. ists who are attending. Further, you can promote your 8. Social media upcoming speaking engagements in It is true that everyone is on social your direct marketing, both to attract media, but you will be wise to deterprospects, but more importantly to mine exactly where your clients are, show that you are indeed a recognized and what their mindset is when they are seeking information. expert in the field. For a business-to-business marketing program, it may be much wiser to 6. SEO and Web site If your Web site has become an ignored spend your time and budget on a online brochure, you can revive it by LinkedIn program than on Facebook adding the ability to sign up to or Pinterest. The reason you won’t want to use receive your white papers, by adding links to publicity achieved into your every social media tool available is news section, and/or by promoting that each of them requires content, an understanding of the best way to your speaking engagements. Adding new content to your Web use that particular tool, and a way to site keeps the search engines interest- promote those sites you do choose to ed in your site and increasing the be involved in so that you can attract ability for people to find you based attention. If you are not already involved in upon the fact that you are adding new content. This method increases social media, you are best to select what is known as your “organic” one of the tools and build a platform for participating in a very concensearch. You can also increase your organic trated effort. Begin by “listening” on search rankings through conducting the site, which means monitoring an SEO program. This is a complex and reading the site, to learn what activity requiring back linking to your targets and your competitors other sites, honing in on keywords are saying. Once you have a feel for that tool, and utilizing them correctly, as well as having the updated analytics to you can devise a participation strateknow how the search parameters gy that will make you a “popular” have changed and how your target voice on the site, and will attract the audience is reacting to specific key- attention of those you are targeting. Gaining attention will enhance your words. We definitely recommend that reputation through the use of your

ally clicks on your ad. sation with these newly interested ahead of the curve with your marketing efforts. prospects. Your postcards WILL gen4. Use response erate leads for your com9. Response mechanisms 10. Tying it all together tracking to conHow do you turn all this activity into The greatest impact you can achieve is pany, so you want to tinually new clients? That must be part of to determine your brand message and make sure you are preimprove your your strategy. Certainly, some people ensure that it goes out in all your com- pared to handle them. results will see your direct marketing and munications. By committing to a mar- Mail tracking gives you The last element—call contact you, and certainly others keting program to grow your business the opportunity to know tracking—is a tool that may see a publicity article or hear for the future, you can anticipate that exactly when your postempowers you, the busiwill be in you speaking, and ask you for more the same people who are reading your cards ness owner, to be in full information. e-mails will be attending your speak- prospects’ mailboxes, so control of your marketHowever, in order to make this pro- ing engagements, seeing your publici- you can prepare for the “Postcard marketing ing. It gives you the gram most effective, you may want to ty, and looking at your Web site, which influx of new leads. is a time-tested way to response data you need consider adding landing pages to your they may have found through keyword Timing is important to continually improve generate leads and here, because not Web site (specific pages that link to your searching. expand a company’s your marketing results direct marketing or online publicity). The old rule of total of the parts preparing and preparing with each campaign. This clientele.” The landing pages should have a call to being greater than the sum of each too early can both be data is gathered through drags on your marketing return on the phone responses your postcards action, or an offer for more information very much holds true in marketing. investment. in order to do an email capture on generate. A routing phone number is those who contact you so that you can Judith Brower is chief executive officer used on your postcard, which forcontinue marketing to them. of Brower, Miller & Cole, a full-service 3. Use online wards calls to your office phone. This Indeed, you will find the marketing marketing, public relations and adver- follow-up tools to routing number acts as a filter, trackmost effective if you have automated, tising firm in Orange County, Calif. She convert more leads ing your phone responses for each or at least pre-planned methods can be reached by phone at (949) 955- So your postcards have been campaign. This lets you see how difdesigned, sent out, and tracked right ferent design or copywriting tweaks through which to continue the conver- 7940 or e-mail into your prospects’ mailboxes. That affect your response. It also records means you’re done, right? Not quite. your phone calls, so you can quality In fact, it’s only just beginning. One of check the reception and sales processthe most important elements of sales es your prospects encounter upon is follow-up. Your postcard marketing calling your company. will generate leads, but in order to keep from slipping through your fin- Key points: gers you have to follow-up with them. n Postcard marketing is a time-tested By Joy Gendusa There are many online resources for method for generating leads. prospect follow-up, but the best one in n Mail tracking helps you prepare for the influx of new clients in a costEvery business needs marketing in tested way to generate leads and my experience is Google Remarketing. Google Remarketing is an online efficient manner. order to grow, and mortgage profes- expand a company’s clientele. This is sionals are no exception. Investing in done through the use of targeted mail- tool that allows you to implement n Google Remarketing follows up with online prospects that don’t respond effective marketing strategies grows ing lists. For example, only sending automatic follow-up that is targeted right away. your business by attracting more your postcards to homeowners who directly for your online prospects. clients, building the loyalty of your have a total household income of less Google Remarketing tags any visitor to n Phone response tracking empowers you to continually improve your current clients, and building your than $50,000. Targeting specific your Web site, and can tell if they did marketing results. company’s brand in general. Looking groups of prospects will generate the or did not take the action step you into marketing can be daunting for quality leads you can turn into loyal desired. You can choose to have it check if your prospects fill out your This advice is based on 15 years of some business owners, so let me show clients. you the four elements you should defYou can also use postcards to keep contact form, make an appointment, trial and error with my own postcard initely be implementing in order to your current clients choosing your download a free report, or anything marketing company. That is how I know put together the most complete mar- company for their mortgage service else that you want them to do. If they it is proven to work. Good luck! keting plan possible. Combining these needs. Marketing is about bolstering leave your site without fulfilling the four elements will bring your compa- every aspect of your client base—both requirement, Google will show them Joy Gendusa is chief executive officer and ny the best marketing results. prospective and current. In order to targeted ads based on that desired founder of PostcardMania. She began Let’s look at each of these ele- steadily grow your business you need action step. It will do so until they PostcardMania in 1998 with nothing but ments … to use postcard marketing to achieve return to your site and take the step a phone and a computer and zero investyou designated. These ads are dis- ment capital. By 2008, revenues reached both these goals. played on any site the prospect visits nearly $19 million and the company 1. Use postcard within the Google Display Network. now employs more than 150 people, marketing as your 2. Use mail tracking to go-to marketing avenue stay ahead of the results This network includes high traffic sites prints four million and mails two million like,, and postcards each week representing more First and foremost, you have to get your marketing brings your marketing message out to your Some postcard marketing companies All of this happens auto- than 40,000 customers in over 350 prospects using an effective marketing offer a tracking service for their post- matically after you set it up, and you industries. For more information, call method. Postcard marketing is a time- card mailings. This allows you to stay don’t pay a cent until a prospect actu- (800) 628-1804, ext. 342. smart content, and will build awareness for you and your firm. v

The Four Elements of a Perfect Marketing Plan



New Ideas to Make Your Direct Mail Stand Out By Jean LeBlanc Are you looking to add more features to your direct marketing, to stand out in the mailbox, increase your conversions, or make tracking ROI easier? Here are a few ideas:






loan, the LO simply asks for their PIN Number. The LO is able to pull up all the info you have to-date on this prospect, so that they don’t have to repeat steps getting their address, loan amount, type of loan, etc. It saves time and makes your LO look more professional.

PURLs are “Personal URLs” or landing pages Toll-free built uniquely for each of tracking number your mail recipients. All Many printers will add a of your PURLs in one toll-free tracking number mailer will probably have on your mail piece. Data the same offer, but when gathered from your trackrecipients open their own ing number will capture PURL, it’s unique for their phone number, day them. and time of day they Let’s say you incorpocalled, and other addirate PURLs into your VA “Instead of having a tional data you want IRRRLs mailer. Sgt. Jones Web address to type tracked. Often it will also receives your mailer and is intrigued by his PURL. in, it uses a QR Code record the call for you, so created uniquely for that you and your staff So he visits his PURL, where he’s greeted by each mail recipient.” can go back and listen to calls for training refinename and with personalment purposes. These are particularly ized information on the new loan that he’s seeking. It offers options such as useful if you are testing a couple of “Call Now” or “Fill out the form at right offers before you commit to mailing to for a more accurate rate quote.” You’re your entire list. Let’s say you plan to capturing additional data which can mail an FHA streamline offer to a list of then be fed to your salespeople to help 10,000, but you can’t decide whether to offer a free appraisal or $500 off closing you close more deals. costs (in your market, the cost is about the same). Your printer can create two Personalized QR Codes Personalized QR Codes take PURLs one versions of your mailer, each with a step further: Instead of having a Web unique offer and a toll-free number, address to type in, it uses a QR Code cre- and mail 1,000 to one group and 1,000 ated uniquely for each mail recipient. to a second group of 1,000, and then They simply scan the code and are check your results. Which offer worked taken straight to their unique landing better? page. For your prospects who have Consider these added features, as smartphones, this is infinitely easier. Just remember, though, that not all they not only make your offer more your recipients will have a smartphone, attractive, but tracking results is easier, too! even today.

PIN Numbers You can also incorporate a unique PIN Number in your mailer for each recipient. It’s done automatically during the printing process, in conjunction with your log-in to your leads database. When the mailer recipient calls in to pursue the option of a new or refinance

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 and clicking on the eBook offer midway down the page. She may be reached by phone at (914) 696-3400.

Lead Generation Through Organic Search and Search Engine Optimization By Kat Hollowell & Steven Xavier Muldrow wanted to use, we worked As the cost of leads in the with them to create the mortgage space continues “Cost of Not Ranking” which to rise as well as the numshowed a ballpark of the ber of times the leads are leads that we could be genbeing sold, it quickly erating with SEO and what became obvious that the that would look like for our best and most effective way profitability. This document to generate leads would be was provided to us from our through organic search and SEO firm, and I would search engine optimization request the same thing from (SEO). After all, each day, yours. You can also get a few three billion searches occur on Google alone, a 25 per- “As business continues different sample excels when you search “The Cost cent increase over 2010 to move forward on of Not Ranking” on Google. and a 250 percent increase a mobile platform, We used this document to from 2006. We are still social media spending a chunk of our continues to become get the project signed off on as a company objective, it budget on traditional lead a larger part of sources however we have everyday business and was an easy sell. You should understand shifted our focus so that lead generation.” that even when contracting those leads can fill our this project out there is still pipeline “right now” and work to be done within organic search can be built your company to get up out and eventually bring in and running. For example, the majority of our leads. you need to decide on the We have found that the keywords that you want to leads generated through be ranked for, in other our Web site have had a words, what are your conhigher conversion rate sumers searching for? You because those leads are not may also need to do some being contacted by multiwork to update the content ple lenders and are truly on your Web pages so that interested in talking to our you can be found for those company. “To fully benefit keywords. The firm you As we began down the from the use of choose should be able to path of SEO, the first thing to decide on was a budget. Twitter and Facebook, put all these action items companies must together for you and help This has to be thought of concentrate on three you along the way but like any other marketing spend. There is a branding stages: Grow, Engage know you will need to carve and Monetize.” out some time to work element to it, however, you through it. are really engaging in this We have been working with our SEO because you want to convert leads so you are spending money on lead acquisition. company for three months now and we You have to decide if you are going to hire are starting to see the results. We have someone to join your team in-house or go moved from not ranking in most cases for with an outside firm. We knew we would our keywords, to ranking in the top 20 for contract this project out, so we met with a some of them. We aren’t going after easy few firms specializing in SEO. We wanted a terms like “Petaluma Mortgage” either, we company with a proven track record and a are going after strong keywords like large team devoted to different areas of “California Mortgages” or “First-Time the project because there are a lot of mov- Homebuyer” and other competitive keywords so we are extremely excited about ing pieces to SEO. Once we had decided on the firm we the results.

Social networking can create leads as well as further your relationships with your consumers As business continues to move forward on a mobile platform, social media continues to become a larger part of everyday business and lead generation. However, social media platforms will only produce leads when they are used correctly. LinkedIn seems to be the best platform for businesses to produce leads, simply because it’s dedicated strictly to professional networking. A study by Hubspot showed that LinkedIn’s visitor-to-lead conversion was 2.74 percent, nearly three times higher than Facebook and Twitter. However, multiple platforms can play essential roles in a company’s marketing strategy. LinkedIn Complete Profile and Groups: It is important

to fill out your profile completely, making sure that you are placing keywords throughout so that people searching your business or industry will be able to find you quickly; be sure to include your Web sites so that potential leads can jump to your site effortlessly. The biggest tip I can give you is to join groups within your industry. This is where networking will occur and where many of your leads will come from. Groups provide an opportunity for discussion between people within your industry and people looking for reputable companies in your industry. These discussions allow for you to show your expertise and the opportunity to connect with people and grow your network. The larger your network is on LinkedIn, the larger the opportunity for more leads.

companies must concentrate on three stages: Grow, Engage and Monetize. In order to create leads, you must first inform the public who you are and what you do; this is a part of the growth stage and is where your concentration should be focused on growing your following. The next stage is to engage these new followers so that they want to interact with the brand. Examples of this are the use pictures, questions, apps, games, giveaways, etc. Once the follower becomes engaged and a relationship starts to form between the company and the follower, you should push users towards buying and becoming advocates for the company. Getting followers to advertise for you is what makes social media such a powerful Facebook and Twitter tool. And the amazing thing is that all Grow, Engage, Monetize: To fully benefit three stages are continuously working from the use of Twitter and Facebook, together with no limit in sight.

No matter the platform you choose, it’s important to remember that these sites are not magic; it takes time and effort to gain the benefits these sites possess. You need to monitor and evaluate your strategy daily and most importantly stay consistent with the timing of your posts/updates and the image of your brand. Like anything in business, it’s not easy, but when used correctly, social media can assist your company by leaps and bounds ahead of the competition. Kat Hollowell is director of marketing at First California Mortgage Company. She may be reached by phone at (707) 796-7512 or e-mail Steven Xavier Muldrow is the social media coordinator at First Cal, and has an MBA in Global Management. He may be reached by e-mail 49 v


The Last Frontier

Addressing Closing Table Risk for Warehouse Banks, Mortgage Lenders and Consumers By Andrew Liput

Risk management is not a new concept





Today, more than ever, mortgage lenders and their warehouse bank and investor partners are focused on compliance, quality control (QC) and risk management. The reasons are very plain, losses from defective loans, caused by poor underwriting, fraud or negligence in origination, and fraud and negligence at the closing table, have caused unacceptable losses. These losses not only impact their businesses, but the consumers they serve. As a result, federal and state regulators and GSEs, including the OCC, NCUA, FDIC, HUD-OIG, FHA, FNMA and the recently formed Consumer Financial Protection Bureau (CFPB) have begun implementing stringent consumer protection measures addressing not only loan quality, sales tactics and compensation issues, but risks connected to third party service providers. Closing professionals, including attorneys, escrow agents, title agents and notaries, handle mortgage proceeds and critical collateral security documents, giving them significant authority and power over the loan process. It also provides them with ample opportunities to exploit their position in the loan closing transaction to commit fraud and otherwise serve their self-interests. In the past decade, significant progress has been made within the mortgage industry to address some, but not all, of the pressure points that can cause fraud and hurt consumers. Great strides in technology and risk management tools have, for example, given lenders the ability to verity borrower identities, confirm property values, and evaluate credit risk. Lenders have focused on quality control, and are now expanding the focus to “quality assurance.” These initiates are being touted by the GSEs and regulators as the industry seeks to create a loan process that is quality conscious before a product is

sold in the secondary market. The one area of the loan process that has seen little or no progress in risk management, quality control and quality assurance has been the closing process.

Why closing table risk management has been overlooked In the past, lenders have assumed the risk associated with the unregulated and unsupervised nature of the closing process because losses from fraud at the closing had historically been a small percentage of overall mortgage fraud damages. That is why most lenders focused whatever spending they could allocate to fraud deterrence on front end fraud detection software, such as social security number verification, automated appraisal reviews and similar products. According to the Mortgage Bankers Association (MBA), lenders spent approximately $1 billion on fraud deterrent software to use in the origination and underwriting process in 2011. The amount of money spent to address fraud and negligence at closing was not in the calculus. The numbers can no longer be ignored. The FBI has allocated more agents nationwide to investigating escrow fraud than any other white collar crime. In 2011 the FBI reported $11 billion in mortgage fraud losses from Suspicious Activity Reports (SARs) filings, and for 2012, the number is estimated to come in at $13 billion. The FBI estimates that 15 percent of those losses are directly attributable to escrow and closing fraud. These figures appear to be supported by the Financial Crimes Enforcement Network (FINCen) July 2012 study of SARS reports between 2003-2011 which indicated that there has been unacceptable growth in fraud losses in the escrow and closing area, with a 20 percent increase in the most recent period. This means that there will be at least $2 billion in reported fraud losses from escrow and closing agents this year. While fraud can take place in any part of the loan process, lenders are

most at risk at the closing. Closing agents, who are responsible to disburse the lender’s money, to supervise the execution and delivery of the deed, note and mortgage instruments, are traditionally subject to little or no scrutiny. Professional licensing, while important as a barrier to entry into the profession, is not risk management. There is not one license that covers all of the various actors who handle funds and documents during a closing which, depending upon the state or region, includes lawyers, escrow agents, title agents, lenders, closers and realtors. Furthermore the licensing process is not uniform, comprehensive and ongoing, nor is there a mechanism to combine and share data nationally for all mortgage industry participants. The current vetting by title underwriters and some banks is primarily static. It is not ongoing, it is not uniform, it is generally focused on entities, and does not involve the sharing of data nor is that data maintained in a user accessible database. That leaves the closing protection letter or insured closing letter as it is sometimes called, which is a warranty letter and not insurance, issued by title underwriters in some but not all states (New York being a glaring example). The letter is issued with very little risk management mainly because title underwriters have little or no relationship beyond the contract title producer who writes their policies (and may work for more than one issuer). These producers typically delegate closing functions to third parties, independent contractors or non-employee agents who are so far removed from the underwriter that it is impossible for them to evaluate the risk associated with that person’s grant of authority at the closing table. There is also the conflict of interest associated with underwriters who must consider all operational decisions in the context of a sales driven environment. Lastly, underwriters have built an unfortunate reputation among lenders and other claimants who have sought to recover under a letter, finding the well-funded insurers ready, willing and able to liti-

gate rather than pay claims. Consequently lenders and warehouse banks universally deride the CPL as generally “worthless.” This volatile environment, faced with regulatory pressures never seen before, have called out for a new solution to an age old problem: How to identify and manage the risk of closing agents in a manner that is independent from conflicts, comprehensive, uniform, ongoing and offering shared data?

Other models have already succeeded The mortgage industry has been favorable to innovation addressing thirdparty service provider risk in the past, and have readily embraced risk management providers offering outsource solutions. These solutions demonstrate that when lenders are faced with regulatory and loss pressures they will seek out and adopt third party solutions as an alternative to the cost and expense of building internal processes on their own. For example, pressures to create greater risk management surrounding appraisals resulted in the proliferation of appraisal management companies (AMCs). These entities manage appraisal relationships, being responsible to verify appraiser credentials and skills and oversee an independent property evaluation process helping lenders meet their regulatory obligations in this area. When lenders began to experience unacceptable losses from poor quality broker originations (TPOs), private companies emerged charging brokers a fee to conduct an independent risk assessment and then providing this data to lenders as a pre-contract screening tool. Perhaps the most successful example of an industry developed response to a glaring risk management issue has been the establishment of the National Mortgage Licensing System (NMLS). Recognizing the deficiencies in a nonuniform approach to qualifying and licensing mortgage originators, and the continued on page 54

51 v



lack of short sale code


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 56-59

just a portion of the many codes in the system designed to handle all of the various scenarios possible in every aspect of lending covered by the American credit reporting system, as of today there is no specific code for a mortgage transaction via short sale. Short sales are difficult to deal with due to the complexity of the transaction, and are reported with a foreclosure status. Historically this worked, as a short sale transaction was traditionally in conjunction with foreclosure activities. In today’s mortgage marketplace, especially in light of the Federal Housing Finance Agency’s (FHFA—the government agency regulating Fannie Mae and Freddie Mac) short sale policy statement of Nov. 1, 2012, that allows homeowners to short sale without ever being late on their mortgage, the old system of reporting short sales needs updating. Some in the industry believe this is a problem and are working on it; others seem to believe that the status quo is the best route and reporting short sales with a tie to a foreclosure is accurate. Considering the mortgage crisis we are struggling to overcome, and the numbers of consumers who were put into extraordinary circumstances, I believe that the system needs to be carefully reviewed and altered as many consumers who short sell today are much better credit risks that the pre housing crisis foreclosure consumers. It seems that others in the industry have similar beliefs. In a May 2011 report by Steven Chaouki, a group vice president at TransUnion, titled “Life After Foreclosure and Hidden Opportunities,” he presents a hypothesis that would indicate:

continued from page 28

ers from re-entering the housing market, even after the required timeframes for reentry after the short sale have passed. 2. Many lenders are still telling underwater homeowners that they must be delinquent on the mortgage to get short sale approval, contrary to the new FHFA short sale policy. This enables the continuation of the current system of reporting short sales as a foreclosure.

Another person who is very critical of the current system is Pam Marron of Bankers Mortgage who has spent the past 24 years originating mortgages in the Tampa, Fla. market. This is one of the regions devastated by the housing crisis and she sees this issue as “one of the greatest problems facing the housing market in its struggle to rebound.” In working with Tampa area homeowners who have been plagued with this reporting problem over the past couple years she has documented two major problems for homeowners:

Since over the past couple years Pam has had to deal with more short sales in the Tampa market than mortgage originators in most other parts of the country, she has identified two solutions to the problem. One a quick term band aide type approach to help consumers right now, then the long term fix that may require government assistance to ultimately provide the correction needed on a systemwide basis. The quick fix is to get the short sale lender to provide a letter at closing to the underwater homeowner that simply states “this mortgage closed as a short sale, not as a foreclosure. Any credit markings reflective of a foreclosure should be deleted.” This letter can be used by the mortgage credit reporting agency to correct the repository data to more accurately reflect the short sale status. The long term fix, and the one that brings much greater challenges, is the creation of a specific short sale code added the Metro2 system so that this manual step is no longer needed. This would allow the lenders to properly track the short sellers in the automated underwriting systems. It would also set up the proper tracking to determine if the short sellers created from the housing crisis are a different credit risk than traditional foreclosures so that this category of transactions can be properly evaluated for their true credit risks. That will require system changes, analysis and those take time when talking about systems as large as those that operate the United States credit reporting industry. One closing thought that has been provided by many mortgage originators recently on how to help the mortgage market improve, for lenders that do not follow the FHFA Short Sale policy effective Nov. 1, 2012 be held accountable for their disregard of the policy. They report to many consumers still being told that they must be delinquent on their loan to short sale. With the CFPB and Congress looking at the credit reporting industry and the mortgage market closely, it’s possible that the forces to create these changes are in place and help may soon be on the way for the estimated 16 million still underwater American homeowners.

1. With no short sale specific code the reporting of a foreclosure status results in a denial of a mortgage in both Fannie Mae and Freddie Mac automated underwriting systems. This stalls past short sell-

Terry W. Clemans is executive director of the National Consumer Reporting Association (NCRA). He may be reached at (630) 539-1525 or e-mail

1. Defaulting on a mortgage causes temporary excess liquidity. This excess liquidity masks the true risk of the consumer as he goes through the foreclosure process, and 2. Certain consumers who defaulted on a mortgage in the recent recession only did so because of the recession—they are otherwise good credit risks.

Book Review National Mortgage Professional Magazine’s

“Why Some Firms Thrive While Others Fail: Governance and Management Lessons From the Crisis” By Thomas H. Stanton (Oxford University Press 2012) BY TOM LAMALFA right on digging, never finding a mortgage product that was too risky to avoid. As a result, and as we all know, it collapsed, nearly bringing down Bank of America in the process and inflicting billions of dollars of losses on investors. To be successful, constructive dialogue must be employed in the firm both vertically and across business lines. Stanton writes, “Successful firms created organizations and processes that fostered a constructive dialogue between managers of revenue producing units and risk officers, to help ensure that short-term returns did not result in decisions that increased the firm’s vulnerability to potential failure.” This dialogue is said to foster a constructive discussion between business unit managers and risk managers that is encouraged and joined by the CEO and promulgated by the board of directors. Constructive dialogue may be best seen as the continuous solicitation of feedback throughout the enterprise. It creates and promotes a “constructive tension” between profit centers and risk officers, between the CEO and the board, and between the CEO and senior managers. At successful firms problems are uncovered because management wants bad news so it can be addressed and eliminated. By contrast, unsuccessful firms failed to recognize the errors of its way. A pronounced example of this tension was the “system of comptrollers” that Goldman employed to check its traders risk appetites. Risk was quantified and hedged to insulate the firm from harm. According to Stanton, constructive dialogue was also the single most important improver of decision making for the firm. “Feedback is the gift that keeps on giving”, he wrote. Stanton says, “A distinguishing characteristic of unsuccessful firms was their pursuit of short-term growth and profits without appropriate regard for the risks neither involved nor constructive dialogue with those concerned about risk.” Examples of firms and CEOs who avoided this necessary dialogue and pursued rapid growth in size and profitability were Angelo Mozilo at Countrywide and Leland Brendsel at continued on page 54



tal weaknesses. For Fannie Mae it was the pursuit of short term growth and profits, razor thin capital and high leverage and neglect of substantial investment in its information systems. For WaMu it was a compensation program for the chief risk officer that connected it to production growth. As suggested, a common operating platform that connected the entire enterprise was essential for the successful. According to Stanton, a firm’s capacity to manage its operations was impaired without such a system since management couldn’t have a wide-angle lens from which to view and assess the firm’s aggregate risk. JPMorgan Chase and Goldman had such systems and used them; AIG, Citi, Fannie and WaMu didn’t have a common platform, and they paid the price for not having them. Countrywide had such a platform, but its other weaknesses left it blind to what the data was signaling. What none of the failed firms had is the paramount ingredient that Stanton found in all of the successful firms, namely “constructive dialogue.” This is a combination of human and systemwide communications inside the firm. With a constructive dialogue everything is essentially linked together internally—people and systems. This is simple and direct and it allows forewarnings to be sounded in the day to day operation of the firm. It’s an environment where close and continuous communication between systems and managers can offer a “head’s up” to potential problems, then address them head on, before a black swan event surfaces to shipwreck the firm. This capacity and foresight put the successful firms on the defensive long before the others saw the approaching storm. They saw the trouble first, not last. Wells Fargo was cited as a firm that originated mortgages across the product spectrum but carefully avoided the riskiest mortgage products, such as option ARMs. Its managers’ aversion to risk saved the firm, Stanton observed. Countrywide, on the other hand, kept


Chase, TD Bank and Wells Fargo—and eight firms that failed, including AIG, Bank of America, Citigroup, Countrywide, Fannie Mae, Freddie Mac, Lehman Brothers and Washington Mutual. Stanton then proceeds to examine how each firm sealed its fate, for better or worse. What are the characteristics of successful firms that made it through the crisis and the unsuccessful firms that failed or were rescued out of necessity by the federal government? This is the core focus of Stanton’s research at the FCIC and later for the book. What we learn from the research— and not surprisingly, it’s quite scholarly—is that successful firms have much in common, while unsuccessful firms fail in a wide variety of ways. The commonalities among the successful firms included: discipline, a long term perspective on their businesses, strong communication and information systems, and maybe most importantly, a culture that extolled these attributes. For example, JPMorgan Chase had all of these attributes and combined them with what Stanton described as a “fortress balance sheet.” This combination saved the day for the bank. However, for Goldman, it was its elaborate and sophisticated system of checks and balances between risk taking and risk management along with the aforementioned attributes that made the firm a survivor. Firms that failed—or were rescued but caused great losses to the financial system—each had one or more major weakness, often many, and few if any of the four basic attributes. For example, for Countrywide it was its rapid growth and hunger for profits that did in the company despite its fabled state of the art technology. For WaMu, failure was largely due to its series of fastpaced acquisitions and its failure to put the entire company on a common platform, or operating system, along with few of the four core virtues. All the failed companies also had, to one degree or another, managements that exhibited common but fundamen- v

The name Tom Stanton first came to my attention in the summer of 1996. I was preparing a talk for the Mortgage Bankers Association’s Annual Convention in San Francisco that coming October. The assigned topic was mortgage banking industry profitability. Five years earlier, Stanton had written a controversial book about the risks Fannie Mae, Freddie Mac and the other 12 government-sponsored enterprises (GSEs) were (potentially) creating for taxpayers. In the book, State of Risk: Will Government-Sponsored Enterprises be the Next Financial Crisis?, Stanton examined the structure of the GSEs and how they distorted the mortgage finance market and created risk. Needless to say, State of Risk very much colored the presentation I made that year. Other than knowing that Stanton had a connection to Johns Hopkins University, where he remains a Fellow at the Center for Advanced Governmental Studies, I’d lost track of him for years. He reappeared in 2009 as a senior staffer to the Financial Crisis Inquiry Commission (FCIC). His focus at the FCIC was on governance, organization, management and risk analysis. In the course of his work there, Stanton interviewed dozens of CEOs, traders, government officials and others about the causes of the financial crisis, and more specifically the roles of management and governance in the crisis. The crisis provided testing-grounds for such an analysis because it revealed the winning and losing firms. In the aftermath of the Commission, which sadly missed a concise conclusion of the chief cause of the crisis, Stanton assembled his notes and further explored the role of governance, management, organization, risk and their bearing on the crisis. The product of his examination of the wreckage is, Why Some Firms Thrive While Others Fail: Governance and Management Lessons From the Crisis. The book’s thesis is that there was a significant difference in the quality of governance, organization and management between firms that survived the financial crisis and those that didn’t. To support and prove the point, Stanton focuses on four firms that survived—Goldman Sachs, JPMorgan

the last frontier

continued from page 50

failure to share data on bad MLOs, a non-profit created by an industry association established a national database for the registration, evaluation and credentialing of mortgage loan originators. Initially offered in a handful of states in 2008, today every state participates in the NMLS program.

Thousands of lenders pay for risk tools today





In order to assure the quality of their loans, for themselves and for investor representation and warranty agreements, lenders today universally utilize third-party fraud tools for which they pay-per-click fees during the loan manufacturing process for every single loan. Some of these tools include borrower identity checks through Social Security Number verification, automated property valuation verifications, bank deposit verifications, credit checks, tax return verifications, flood zone verifications, automated underwriting for credit risk, and others. Each of these tools have become universally adopted and utilized as critical loan process resources, and each involves a separate fee (between $7-$25) charged to the lender. To date, despite regulatory requirements that lenders have something in place to identify, manage and report closing agent risk, there is no nationally accepted service and source of data addressing closing agent risk available to lenders beyond what is offered by a few new closing agent risk management specialty firms. Each of these firms approach the problem from the same perspective but with different models. However what the industry needs is a uniform approach, which is comprehensive and independent so as to be respected by banks and consumers, and which can offer appropriate tools at an affordable cost.

The market is very large and ripe for innovation The MBA’s data reflects that the target market is vast with nearly 8.5 million residential mortgage closings in 2012 on $1.4 trillion in mortgage funding (down from a height of 12 million in 2007), including those resulting from new and existing home purchases, second mortgages, refinances, home equity loans, foreclosure sales and reverse mortgages. This large market can be divided into four distinct groups of potential customers: n Those who want closing agent verification for financial transaction security (i.e. warehouse banks, mortgage lenders, community banks, credit unions and possible GSEs like FHA, FHLMC, FNMA and HUD ); n Those who want the benefit of clos-

ing agent verification to enhance their credentials and attract business (i.e. real estate lawyers, notaries public, realtors and real estate settlement companies), n Those who want access to closing agent information to assist them in making decisions about whom to hire when they need representation at a real estate closing transaction (i.e., consumers), and n Those who want a better insurance product and relief from risk and losses (title insurers) The U.S. Census Bureau reports that there are 74 million homeowners in the country, of whom 34 million have at least one mortgage, and 12 million have two or more mortgages. According to the MBA, homeowners typically refinance their existing mortgages at least once every five years. Based on available data from the MBA, NCUA, ALTA, NNA, ABA, the U.S. Census Bureau and other industry sources, there are approximately 18,000 mortgage lending entities (banks and non-bank lenders); 7,700 credit unions, and 250,000 settlement agents (escrow and title agents, real estate attorneys and real estate notaries) in the United States, as well as a half dozen major underwriters that dominate the title insurance industry. Warehouse banks and lenders represent the key segment of the industry to drive a new risk management program. They need a compliance tool to meet regulatory pressure, they are facing an aggressive audit environment from state regulators and also investors that now re-underwrite each loan before it is sold and they are expected to protect consumers from harm from third parties who may act as agents in the mortgage process. As the regulatory environment has solidified, and the agencies and supervisory bodies have begun pressing lenders to demonstrate their commitment to meet risk management expectations, we have seen a growth in communications from banks seeking the programs and services to assist them in this regard.

Policymakers want change and consumers want protection The author has had numerous meetings in Washington, D.C. with the CFPB, FDIC, OCC, NCUA and other policy makers to introduce the author’s vetting program and insurance concept, answer questions about industry risk issues and consumer loss data, and establish personal relationships with key government figures. During those meetings, the overall response was very positive and supportive of industry-led initiatives to address reg-

ulatory concerns about quality assurance and consumer protections. Consequently it is very likely that in 2013 we will see broader acceptance of escrow and closing fraud deterrence tools in the marketplace. Since the CFPB’s third-party service provider management announcement (which simply extended to non-bank entities rules in place for years applicable to supervised banks) was made rather recently in April 2012 and only began to be widely circulated in summer 2012, the full impact of this new compliance requirement among mortgage lenders has yet to be felt. The next 12 months in the industry will see incredible growth in the area of closing agent risk management. It is likely to become an integral part of mortgage lender quality assurance

the elite performer

programs as it move towards an industry utility, much like appraisal management, broker management, and other mortgage quality and compliance tools. Andrew Liput is president and CEO of Secure Settlements Inc., a company he founded after nearly 10 years studying the problem of escrow and closing fraud and the uninsured risks associated with mortgage closing professionals. In July 2012 he was invited by the MBA to address the CFPB and Closing Agent Risk at the Fraud and Risk Management Forum in Dallas. In December 2012 he provided a formal opinion to the National Association of Insurance Commissioners Title Insurance Task Force for its White Paper on Escrow and Title Reform. He is the author of numer-

continued from page 4

traffic sources, referring pages, keywords, etc. This allows you to confirm how well you might be doing with organic hits and SEO, marketing campaigns with partner sites or referral partners, etc. You can make adjustments based off these detailed statistics to improve traffic and new customers. These are just a few of the unlimited benefits in the power of online marketing, branding and exposure. The growth rate of online searches and traffic in our industry makes it clear what the future of mortgage shopping and homebuying looks like. Don’t get lost in “cold” calls

and make people call you. Always focus on referrals, but set up an online marketing plan and presence to let your brand and reputation automatically result in daily calls from new potential clients without lifting a finger. 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 or visit

nmp magazine’s book review Freddie Mac. Mozilo apparently never found a mortgage product he couldn’t embrace, whereas Brendsel fired his chief credit officer, ostensibly preferring to surround himself with yes men and women. Sadly, Stanton avoids any broad discussion of hubris though its undercurrent permeates the entire book. Frequently, it’s the dominant but unspoken weight on the firms. The absence of this finding of overbearingness on the part of CEOs, combined with some minor but annoying repetitiveness is the book’s own very minor shortcoming. Why Some Firms Thrive While Others Fail is a book that CEOs and risk managers should read and study to know what to do and what not to do. However, it’s no fast, easy read. The book is quite technical, demanding much concentration from the reader. Reflecting its academic bent, it includes an extensive 26-page roster of notes, hundreds of footnotes and 16 pages of reference materials, many

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from the FCIC’s investigation and heretofore unpublished. Stanton’s access through the FCIC to people and documents provides much new primary source materials for researchers to draw upon. For all these reasons, it may be the bible of books on governance. Too bad it wasn’t written six years earlier and made mandatory reading for CEOs. Tom LaMalfa is a 34-year veteran mortgage-market analyst and researcher. He has done pioneering work in the areas of secondary markets, wholesale mortgage banking, mortgage brokerages, financial benchmarking and GSE reform. Tom continues since 1977 to coauthor an old-fashioned mail newsletter, The Holm Mortgage Finance Report. In the aftermath of the financial crisis, his focus is on Washington, D.C. and the regulatory burden it is imposing on consumers and lenders. His 21-year old research firm, TSl Consulting, does survey research. He may be reached by email at

nmp news flash

continued from page 41

and encouraging the return of private mortgage capital. To ensure access to mortgage capital for low-wealth and low-income borrowers and communities, however, efforts must be made to ensure that private capital attends to these markets and to eliminate any vestiges of the discriminatory lending practices that played such a prominent role in the buildup to the recent crisis. “The pendulum on access to credit has swung too far in the direction of hindering it,” says Eric S. Belsky, managing director of the Joint Center. “While it will take time–perhaps years– to reform all aspects of the housing finance system that are in need of it, the path forward is coming into view. This report points the way toward an improved system that provides broad access, assures liquidity even in times of crisis, reengages private capital, and strengthens the federal role in anchoring the market while better protecting taxpayers and serving American homebuyers and homeowners.”

Goldman Sachs and Morgan Stanley Reach Agreement With Federal Reserve on Servicing Practices

Hammerhouse Hiring Survey Finds Industry Consolidation Will Accelerate

Nearly One-Third of All Americans Are Mortgage-Free

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


Nearly 21 million Americans (29.3 percent of homeowners nationwide) own their homes outright, unencumbered by a

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:



Hammerhouse LLC has released its annual outlook on the key hiring trends that will impact the mortgage industry in 2013. “2013 will see the mortgage industry continue to evolve and the job of originators continue to become more professional,” said Drew Waterhouse, managing director of Hammerhouse. “The industry will continue to stabilize and the companies that are properly structured, with strong leaders, qualityfocused, balanced production, technologically advanced, geographically oriented and financially strong, will find 2013 to be the year they excel versus their peers.” While the advent of higher rates has been forecasted for some time, along with the corresponding move away from a refinance-transaction orientation to a purchase-transaction orientation, 2013 is the year for it to occur. While the Federal Reserve has pledged to keep its Fed Funds rates low into 2015 or until certain economic targets are reached, they cannot control market rates. Based on an improving economy, rates will rise meaningfully by the end of the year, and may keep an upward trajectory for years to come. Even if rates do not rise, the pool of

mortgage, according to a recent Zillow analysis of mortgage data. Analyzing data through the third quarter of 2012, Zillow found that 20.6 million homeowners nationwide own their homes free and clear of mortgage debt. Among the nation’s 30 largest metro areas included in the study, Pittsburgh (38.6 percent), Tampa (33.2 percent), New York (29.7 percent), Cleveland (29.4 percent) and Miami (28.9 percent) had the highest percentage of free-and-clear homeowners. Washington, D.C. (15.5 percent), Atlanta (17.7 percent), Las Vegas (18.3 percent), Denver (18.5 percent) and Charlotte (20 percent) had the lowest percentage. A number of elements influence the percentage of free-and-clear homeowners in a given area, including median home values. Zillow found that areas with lower home values generally have higher outright homeownership rates, as smaller loan amounts are easier to pay back more quickly. Demographic factors including the age and credit rating of primary borrowers also influence free-and-clear homeownership rates. Zillow found that 65- to 74year-olds are most likely to be free-andclear (20.5 percent), followed by 74- to 84year-olds (17.9 percent). This is attributed to the fact that the longer someone owns a home, the longer they have to pay off their mortgage. Interestingly, when examining free-and-clear ownership rates as a percentage of homeowners in various age groups, Zillow found 34.5 percent of 20- to 24-year-old homeowners are free of mortgages. Among homeowners who own their homes outright, 44 percent have a high VantageScore—representing their credit rating—between 800 and 900. Only 15.5 percent of homeowners with the highest credit rating of 900-990 are free-and-clear. “So far we have used our unique data on how much homeowners owe on their homes primarily to identify underwater and delinquent groups of homeowners,” said Zillow Chief Economist Dr. Stan Humphries. “But looking at those homeowners who are free-and-clear is important, too. Homeowners unencumbered by a mortgage may be more flexible than indebted homeowners, and therefore more apt or willing to list their homes or enter the market for a new property. By determining where these homeowners are located, we can also gain insight into potential inventory and demand in those areas, as well.” v

Goldman Sachs and Morgan Stanley have reached agreements in principle with the Federal Reserve Board to pay $557 million in cash payments and other assistance to help mortgage borrowers. These agreements are similar to those announced on Jan. 7, 2013, between 10 mortgage servicing companies and the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board. Like the other institutions, Goldman Sachs and Morgan Stanley were subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing. The sum paid by Goldman Sachs and Morgan Stanley includes $232 million in direct payments to eligible borrowers and $325 million in other assistance, such as loan modifications and forgiveness of deficiency judgments. More than 220,000 borrowers whose homes were in foreclosure in 2009 and 2010 with the former subsidiaries of Goldman Sachs (Litton Loan Servicing LP) and Morgan Stanley (Saxon Mortgage Services Inc.) will receive cash compensation under the agreements in principle. Eligible borrowers are expected to receive compensation ranging from hundreds of dollars up to $125,000, depending on the type of possible servicer error. Previously, the OCC and the Federal Reserve reached agreements with Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and

Wells Fargo. With the addition of Goldman Sachs and Morgan Stanley, more than 4 million borrowers will receive a total of $3.5 billion in cash compensation while an additional $5.5 billion will be provided by the servicers for mortgage assistance. A payment agent will be appointed to administer payments to borrowers on behalf of the servicers. Eligible borrowers are expected to be contacted by the payment agent by the end of March with payment details. Borrowers will not be required to execute a waiver of any legal claims they may have against their servicer as a condition for receiving payment. In addition, the servicers’ internal complaint process will remain available to borrowers. The Federal Reserve continues to work to reach similar agreements in principle with other servicers that are not yet parties to the agreements, but that are also subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing. Federal Reserve examiners are continuing to closely monitor the servicers’ implementation of plans required by the enforcement actions previously issued against the servicers to correct the unsafe and unsound mortgage servicing and foreclosure practices.

those willing and able to refinance will continue to grow smaller. The impact of that change will be industry-altering. Not only does the source of business change but the business development strategy necessary to attract the new business must change. There will be fewer people and companies needed in such an environment. With less volume comes the need for less and more efficient resources to generate production. There will be a consolidation among independent mortgage producers. Some will simply find it too difficult to maintain their independence in the new market environment. Those that were too dependent on refinances will either merge or disappear. In addition to growth among independent retail mortgage bankers will be continued growth in brokerage ranks. The flexibility, freedom and financial benefits available for top producers will continue the move away from big bank mortgage operations. Originators with transferrable, balanced, referral-based books of business will be in high demand. There is simply no better type of originator for a mortgage company than one who has consistently produced at high levels; both purchase and refinance business, sourced from past-customers, real estate agents, builders and financial advisors. Originators meeting this standard will find that they have significant leverage with employers. One related trend that will continue into 2013 is that these highly-valued originators will find their employers willing and even eager to provide value-added benefits. Some of these benefits include work-life balance flexibility, administrative and marketing support including people and technology and professional development and training. While older, more experienced and proven originators are the hottest commodity in the industry; a move to recruit and develop younger talent is underway and will grow in 2013. One of the consequences of the housing sector collapse was a loss of younger and midcareer originators. Now, with the market preparing to move to a purchaseorientation, the need for younger originators to provide the hustle needed to succeed with real estate agents and to target younger, first-time buyers is readily apparent. A related emerging trend is the beginning of “transition planning” for older originators hoping to chart a path to retirement. Look for lenders to support the natural transition of older, successful originators that also preserves the valuable books of business they have developed over the years.

Accounting and Audit

Mark Wilson Certified Public Accountants 9455 Ridgehaven Ct, Suite 101 • San Diego, CA 92123 619-649-0712 A full service CPA firm specializing in the needs of the mortgage industry. Providing monthly bookkeeping services,FHA and financial statement audits , corporate tax preparation and contract CFO services. Contact us today to learn more.

Bonds & Licensing

Branch Manager

The Bond Exchange (501) 224-8895

Hometown Lenders (888) 606-8066



Online surety bond applications, instant underwriting approval, and credit card payments administered through The Bond Exchange NAMB's exclusive partner provider for state license surety bonds.

Appraisal Management Company

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

• • • • • • • • • •

StreetLinks Lender Solutions (800) 778-4920


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.

Branch Manager

America’s Choice Home Loans 713-821-9750

Meadowbrook is an FHA, Fannie Mae, Freddie Mac, and VA endorsed lender.

Finally - the freedom to originate! America's Choice gives you the tools you need so you can Originate, Close and Get Paid!

United States Appraisals World-Class Service. Nationwide Coverage. Discover Confidence in Your Appraisal Partner! | (866) 562-0123

We work as hard as you to be America’s Choice for consumers needing a home loan, and we work just as hard to be America’s Choice for top branch managers, loan originators and mortgage professionals.

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

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

Are you a mortgage origination professional? Are you exceptional? Is your company? MO




• • • • •

Branch Opportunities

Call Jonathan Fowler, Director of National Production at 713-821-9750 to learn how you can have a better, more rewarding career.



Meadowbrook is hiring Branch Managers and Loan Originators. We are licensed in NY, CT, PA, NJ, MD, FL, MA, NC, pending in SC, NH, and RI.



Meadowbrook Financial Mortgage Bankers 1-888-MEADOW8 (632-3698) Meadowbrook loan originators make 33% more money with Meadowbrook than with any other company they worked for. Enjoy the benefits of a low compare ratio, a lead management system with an endless supply of leads, A tier investors, and much more.

StreetLinks industry-leading products include LenderPlus™ full-service appraisal management, LenderX™ lender-executed appraisal management software and SCORe™ appraisal reviews and a series of valuation analysis tools for services. Our commitment to quality and service, embodied by our partnership approach to clients and appraisers, continues to set us apart as the nation’s premier lending solutions partner. For more information, visit


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




If your ad was here, you would be seen by 191,181 Mortgage Professionals looking for resources to help them in their business.

Gateway Mortgage Group has immediate opportunities in 16 states. Our origination teams enjoy: • A local branch- and origination-centric model • The perfect balance of corporate support • Competitive compensation plans And best of all, our entire platform is built with one thing in mind— helping local originators take their success to the next level. Visit our careers page on LinkedIn. Follow us. Or call us at 888.360.3773. And we will show you YOUR Gateway to a Great Way of Life™! Gateway Mortgage Group, LLC is an equal opportunity employer. NMLS 7233 HQ: 6910 E. 14th Street, Tulsa, OK 74112

Branch Opportunities (Cont’d.)

It’s Time‌to join one of the Top Mortgage Bankers as Branch Managers or Loan Officer NOW! Why? You Have Our Guarantee! Our Guarantee We will not leave you stranded and alone on an island. Our seasoned operational rollout team will ensure you a smooth transition to our branch platform. Our RHF University will train everyone on your staff. We stand by our reputation of providing ongoing support and communication to every branch , every day. You’re our #1 Priority! We are a Full-Service Banker, a Direct Endorsed FHA and Fannie Lender.  We are a TRUE 48 hours in Underwriting and Closing. We will close your loans on time.  We will give the best service to you and your clients We will give you full access to all marketing and development services from loan origination to hiring to specialty products. We are the Leader in marketing, technology and strategic business partnerships. We assist our Branch Managers in hiring, training and motivating their staff. We will help you build your team. CALL NOW 866-319-4442 or EMAIL or VISIT

Compliance Consultants

Continuing Education (Cont’d.)

BROKERS COMPLIANCE GROUP 167 West Hudson Street – Suite 200 Long Beach | NY | 11561

Mortgage Seminars 248-403-8181

Division of Lenders Compliance Group, BCG is the first and only mortgage risk management firm in the U.S. devoted to supporting the unique compliance needs of residential mortgage brokers. Leveling the Playing Field for Mortgage Brokers Low Cost Monthly Membership Includes: • Free Weekly Hotline • Access to Subject Matter Experts • Policies and Procedures • Webinars *Special Pricing* • Quality Control • Exam Readiness • Licensing • Legal Reviews

Jeff Mifsud, a former FHA Direct Endorsed Underwriter trained by HUD and an FHA Originator for over 15 years, is publisher of The FHA Originator, a monthly marketing newsletter which gives you‌ • • • •

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

No contracts so sign up today and give yourself the tools to brand yourself as The FHA Expert in your marketplace. Cost: Only $19.95 per month per physical office location. Watch for our 8 Hour NMLS Continuing Education Course

Credit Reporting

Branch Recruitment LENDERS COMPLIANCE GROUP 167 West Hudson Street - Suite 200 Long Beach | NY | 11561 | (516) 442-3456 Guaranteed Home Mortgage Company, Inc. Headquarters: 108 Corporate Park Drive Ste. 301 White Plains, NY 10604 (888) 329-GHMC |

The first full-service, mortgage risk management firm in the country, specializing exclusively in mortgage compliance. Pioneers in outsourcing solutions for mortgage compliance. Our Compliance Team Will: Leverage your existing employees. Improve your productivity. Collaborate on projects. Make the most of your current technology. Bring innovation to your company. Be a strong cultural fit. Free you to focus on your core competencies. Give you access to world-class expertise. Lower your total operational costs.


Credit Plus, Inc. 31550 Winterplace Parkway, Salisbury, MD 21804 800-258-3488 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.Â

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NMLS approved 20 hour Prelicensing Education NMLS approved Continuing Education Live Classroom Instruction, Web Delivery and Private Events The SAFE-Smart ExamCram, Powerfully Innovative Test Prep

“A Full Service Lending Information Companyâ€? A/E: Jeremy “Judgeâ€? Honor 877-MFI- DATA Jeremy@MďŹ www.MďŹ Credit reports • Rapid rescore • Reissue • Supplements IRS & Social verification • VOE / VOI • Title • Flood Appraisals / BPO / AVM • Fraud alerts • Red Flag • LQI MOST AGGRESSIVE PRICING!

The Lykken on Lending Radio Program Sign-on weekly at


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Abacus Mortgage Training and Education PO Box 780 Summerfield, NC 27358 888-341-7767 •


Continuing Education v

Immediate investment in your business. We pay licensing, initial marketing, more. Next Day Pay™. Total support. Easy transition. Full suite in-house products. Mortgage banker & top-level broker 28 states|20+ years|On Inc.500 list of fastest-growing companies


Direct Mail

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

Document Preparation

Loan Origination Systems

Robertson | Anschutz 800-343-7160

Calyx Software 800-362-2599

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)

Docs on Demand 800-343-7160 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





Titan List & Mailing Services, Inc. 1020 NW 6th St Suite D, Deerfield Beach, FL. 33442 (800) 544-8060

Employment Services

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.

Calyx Software, the #1 provider of mortgage solutions is dedicated to offering reliable and affordable software that streamlines, integrates and optimizes the loan process. Find out how PointCentral can streamline your business and create compliant processes today.

Marketing Services

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


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.

Leads TagQuest ................................................................888-817-8980 CUSTOMIZE YOUR CAMPAIGNS! FHA - HARP - VA Leads, Loan Modification, Debt Consolidation, Direct Mail, Data List, Live Transfers, Internet Leads –

Valuation Services

Veros Real Estate Solutions 2333 North Broadway, Suite 350 • Santa Ana, CA 92706 (866) 458-3767 • @verosres (Twitter) 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.

Wholesale/Correspondent Lenders

Wholesale Lenders

HomeBridge 5 Park Plaza, 10th Floor Irvine, CA 92614 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

Building bridges to success, one loan at a time.


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

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

59 Real Estate Mortgage Network, Inc. 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.


Icon Residential, a wholly owned subsidiary of Grand Bank N.A., is one of the nation’s leading Conforming, FHA and VA wholesale lenders. Our strength, success and longevity is derived from delivering customers service that exceeds our valued business partners expectations. With deep industry knowledge, financial stability and innovative technology we provide the solutions for our business partners to fund loans while avoiding risk. Direct Access to Underwriters Competitive Pricing Innovative Technology Paperless Solution Bank Funding

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!

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


• • • • •

United Wholesale Mortgage 800-981-8898

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.


Icon Residential Lenders (888) 247-4207

Mortgage Professional Resource Registry v

Interested in joining our Wholesale Division? Send your resume to




To submit your entry for inclusion in the National Mortgage Professional contact information, to FEBRUARY 2013 Tuesday-Friday, February 19-22 Mortgage Bankers Association (MBA) 2013 National Mortgage Servicing Conference & Expo Gaylord Texan Hotel & Convention Center 1501 Gaylord Trail Grapevine, Texas For more information, call (800) 793-6222 or visit

MARCH 2013 Tuesday, March 5 Florida Association of Mortgage Professionals (FAMP) Central Florida 2013 Annual Chapter Trade Show Altamonte Hilton 350 South Northlake Boulevard Altamonte Springs, Fla. For more information, e-mail

Sunday-Thursday, March 10-14 2013 Regional Conference of Mortgage Bankers Associations 30th Anniversary Trump Taj Mahal Casino Resort 1000 Boardwalk • Atlantic City, N.J. For more information, call (732) 596-1619 or visit Wednesday, March 13 Florida Association of Mortgage Professionals Broward Chapter 2013 Annual Trade Show “It’s Mardi Gras Time” Broward County Convention Center 1950 Eisenhower Boulevard Fort Lauderdale, Fla. For more information, call (954) 205-0022 or visit Wednesday, March 13 2013 Maryland Association of Mortgage Professionals Annual Conference Maritime Institute 692 Maritime Boulevard Linthicum Heights, Md. For more information, call (410) 752-6262 or visit

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

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

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

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

Thursday, April 18 Illinois Association of Mortgage Professionals (IAMP) 2013 Spring Conference & Trade Show Location to be determined For more information, call (630) 916-7720 or visit 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





Tuesday-Friday, February 26-March 1 Property Records Industry Association (PRIA) 2013 Winter Symposium Washington Marriott 1221 22nd Street NW Washington, D.C. For more information, call (919) 459-2081 or visit

Sunday-Tuesday, March 10-12 2013 NAMB Legislative & Regulatory Conference Hilton Garden Inn-Capitol 1225 First Street NE Washington, D.C. For more information, call (972) 758-1151 or visit

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





Thursday-Saturday, February 21-23 Mortgage Bankers Association (MBA) National Short Sale and REO Summit 2013 Gaylord Texan Hotel & Convention Center 1501 Gaylord Trail Grapevine, Texas For more information, call (800) 793-6222 or visit

Wednesday-Saturday, March 6-9 Mortgage Bankers Association (MBA) 2013 Mid-Winter Housing Finance Conference The Ritz-Carlton Bachelor Gulch 130 Daybreak Ridge • Avon, Colo. For more information, call (800) 793-6222 or visit

Monday-Wednesday, March 25-27 National Association of Hispanic Real Estate Professionals (NAHREP) 2013 Housing Policy & Hispanic Lending Conference Four Seasons Hotel 2800 Pennsylvania Avenue NW Washington, D.C. For more information, call (858) 622-9046 or visit


Calendar of Events, please e-mail the details of your event, along with