TNR - January 2011 by The Niche Report (Media Kit)

Issue 042 January 2011 TheNicheReport.com

14 Man on the Hill Protections with consequences.

18 Is It Really an

FEATURE ARTICLE!

Audit? Wall Street Reform & Consumer Protection Act, Title XI.

Bringing Up The Real 50 30 2011, The Rear Tech Crunch Unemployment, mortgage rates and inflation.

Senate Minority Leader Mitch McConnell.

Strength. Service. Relationships. Icon Residential is one of the nation’s leading Conforming, Jumbo and FHA 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.

• DTI Subject to DU Findings • Free DU • Jumbo Loans to 2 Million • Direct Access to Underwriters • FHA/FHA Streamlines • Bank Funding • VA IRRRLs

For additional information regarding Comforming, Jumbo and FHA Lending, Call us at 1-888-647-1967 or visit us online at www.iconwholesale.com

Automatic marketing that turns leads into life-long clients XSellerate • Professionally designed and pre-written ads targeting referrals, refis, investors, first time buyers, and more • Hundreds of customizable print and e-mail ads for dozens of other targets, including your past clients, too • “Set and forget” scheduling so your campaigns automatically span weeks, months, or years • Just one annual fee, no per-use fees

JUST ADDED: NEW ENEWSLETTER SERIES!

• 100 Day money back guarantee so there’s no risk in trying it

Get new clients and a steady stream of referrals In this economy, it’s critical you make a memorable, professional impression and continue to stay on their minds. XSellerate automatic marketing makes it easy. Choose from over 260 mortgage-specific, pre-written, professionally designed marketing pieces that turn prospects into clients and clients into referral machines. Easily customize our ads, or create your own in our word processor style editor. Then choose which contacts you want to send to. XSellerate takes care of the rest, automatically sending your campaigns over days, weeks, months, or years.

XSellerate is just one of our mortgage solutions that will make you more efficient and add more profit to your bottom line. From SureDocs, our eSignature solution, to Mortgage XSites, Mercury Network and more, over 200,000 mortgage professionals have relied on our technology to power over half the nation’s real estate transactions. With that kind of traffic, you can rest assured our products and services are rock solid. They have to be. Call us today to put XSellerate or any of our other services to the test. With our 100 day money back guarantee, you’ve got absolutely nothing to lose.

For Niche Report readers only! Mention the Niche discount and save 50%.

99 $199

per year

Expires December 31st

Unlimited usage, no hidden fees 100 day money back guarantee Free 24 x 7 x 365 live tech support

Call us today at 1-800-ALAMODE or visit www.alamode.com

Visit us online and watch a short video or download the free trial for a first-hand experience at www.alamode.com/MortgageXSellerate. AD CODE: MANRXLMS1210 a la mode and its products are trademarks or registered trademarks of a la mode, inc. Other brand and product names are trademarks or registered trademarks of their respective owners. All prices, terms, policies and other items are subject to change without notice. © 2010 a la mode, inc.

Underwriting live chat support. Now our customers can have quick access to live, web based, underwriting support.

CONTENTS

Issue 042

January 2011

Is It Really an Audit?

30 35

What Processors Aren't Telling You

COMMERCIAL

pg 42

HARD MONEY & NON-PRIME

pg 41

ConStruction

pg 42

Service Providers

pg 43

MANAGING EDITOR Stewart Mednick stewart@thenichereport.com

Man on the Hill Marc Savitt President National Association of Independent Housing Professionals Protections with consquences.

Techspot Rick Roque owner menlo company 2011, the real tech crunch: Unemployment, mortgage rates and inflation.

Center Stage with Streetlinks The Niche Report The Niche Report talks with CEO Steve Haslam.

pg 41

CO-FOUNDER & PRESIDENT David Pegg david@thenichereport.com

Wall Street Reform & Consumer Protection Act, Title XI: Federal Reserve System Provisions.

Amie Wills Independent loan processor

Agency & FHA

FOUNDER & PRESIDENT Robert Pegg robert@thenichereport.com

Peter Hébert

NICHE REPORTS

January 2011

Bringing up the Rear Martin Andelman mandelman matters ml-implode.com Senate Minority Leader Mitch McConnell.

DEPARTMENTS

Note from the founder

Letters to the editor

THE VOICE OF HOUSING

What's your mortgage IQ?

tip of the month

LENDER & RESOURCE DIRECTORY

EDITORIAL / CONTENT MANAGER Kristen Moser kristen@thenichereport.com ACCOUNTING MANAGER Shawna Ingram shawna@thenichereport.com Advertising Director Jessica Grizzle Jessica@thenichereport.com Advertising sales Heather Bopp Heather@thenichereport.com Production Manager Henry Suchman henry@thenichereport.com Production Assistant Dawn Exner dawn@thenichereport.com COLUMNISTS & Contributing Authors Martin Andelman Marc Savitt Peter Hébert Stewart Mednick Jim Russell Rick Roque Amie Wills

Published monthly by BODA Publishing, LLC PO Box 494, Bentonville, AR 72712 Phone: 866.964.2695 Fax: 703.991.2362 Email: info@thenichereport.com www.TheNicheReport.com

Leads

Marketing

Community

SUBSCRIPTIONS This publication is intended for real estate finance professionals. If you are a mortgage broker, lender, loan officer, or real estate professional and you do not currently receive The Niche Report, please go to www.thenichereport.com.

Boost Your Online Reputation!

An annual subscription is $47.95 (twelve months/twelve issues.) For additional copies being mailed to the same address please call 866.964.2695 or email us at subscriptions@thenichereport.com for multi-copy discount. Send address change requests to info@thenichereport.com. Remember to include the old address. To opt-out of receiving The Niche Report, please send your request, including name, company name, and address to opt-out@thenichereport.com.

ADVERTISEMENTS

To inquire about advertising in The Niche Report, please call 866.964.2695, or send an email to ads@thenichereport.com. Visit our website, www.TheNicheReport.com to download a copy of our Media Kit.

EDITORIALS / ARTICLES To submit an article for consideration in The Niche Report, please send an email to stewart@thenichereport.com or call 866.964.2695. We are interested in original writings relevant to mortgage brokers and other real estate finance professionals. If you have a comment or question about an article or editorial published in The Niche Report, or if you have a suggestion for a topic you would like to see featured in a future issue, please send an email to stewart@thenichereport.com.

THE NICHE REPORT POLICY The information and opinions expressed by contributing authors and advertisers within The Niche Report do not necessarily reflect those of BODA Publishing, LLC employees and should not be considered as endorsed or recommended by BODA Publishing, LLC.

Call Today!

(888) 333-6628

NOTE FROM THE FOUNDER

We’ve just returned from attending NAMB West in Las Vegas NV. I met and heard from some true industry professionals; let’s face it, if you’re still originating or participating in our industry, you’ve earned the right to be called a true industry professional. In fact, I met and conversed with a mortgage company owner named Suzy, who innocently enough, has one hell of a story to tell, or rather one story of hell to tell. She comes down from Alaska every year to help support NAMB and has been originating mortgages for nearly twenty years. She has seen ups and she has seen lows, including this time around. But what makes her story even more intriguing is she’s reeling from a failed Federal indictment(s) that has affected her and her children’s health and means of making a living. Her story illustrates two profound points, one, the government doesn’t know Jack. And two, they are out to persecute the Broker, the last man on the totem pole in terms of who doled out mortgages, and perpetrate the myth that the broker is to blame. This lady is a fighter. She didn’t take “the deal” the Fed tried to force on her because she did nothing wrong. She fought her ass off and the “bear” finally gave up, although not without inflicting heavy mental and physical damage. I have invited her to author her story for us to publish. Stay tuned. I also had the pleasure of meeting Doug Chang, owner of a little company called Calyx. Doug is the most unassuming and genuine person you will ever meet, especially when you realize he heads one of the largest and most successful LOS companies in the industry. Our booths were across from each other and towards the end of the event he graciously invited us out to dinner. We spent time with him and his Sales manager Tate, and received insight and knowledge of the goings on within Calyx. I can tell you confidently, Doug has left no stone unturned and knows exactly where Calyx has been and exactly where Calyx is going. It gives me peace of mind knowing our industry continues to foster brilliant and innovative people like the ones at Calyx. This issue marks, for many, their last free issue of TNR. As we work with advertisers and trade associations to bolster our subscriptions via our “gift subscription” program, we will be deleting many aged “free” subscribers from circulation. If you have not already re-subscribed at the highly discounted annual rate of $19.99, please go to www.TheNicheReport.com and subscribe now to continue receiving the only mortgage magazine worth reading – use discount code tnr1999. Keep up the fight,

Robert Pegg

Official

MEMBER

TheNicheReport.com

Letters to the editor I just read Martin Andelman’s “Securitization” article in the November issue of TNR. I haven’t always agreed with Mr. Andelman, but this article was thorough and drew logical conclusions. I think a “Layman” would be able to read and understand the article and angrily come to the same conclusions. It is a shame our “Lay” Congress does not share this capacity. Is there any way to get this article into the Congressional Record? This assumes of course that Congress actually reads (Or reads what it reviews and passes into law)! Bill W. – Mortgage Consultant

9 Marketing Mistakes by Molly Dowdy, November 2010 Issue This article rocks!! Molly’s tips on marketing mistakes were great stuff. I have been amazed at some of the ‘mistakes’ I see loan originators make such as using all lower case letters on loan applications (really high school), silly email addresses and lack of branding. Anne J. - Broker/Owner

MERS: Myths, Misconceptions, and Realities by Joe Murin, September 2010 Issue This article is a myopic explanation of MERS based on a “victims and villains” dichotomy. Murin fails to recognize that an 1872 Supreme Court ruling stated that the Note and Mortgage do not have a separate existence. Through MERS, it appears that they do, which explains the faulty foreclosure actions on the wrong houses and mortgage free properties, moreover, bypassing the county recordation requirements compromises governments of revenue and creditors of security interests. Peter H. – Industry author ***

The MERS article had so many distortions, half-truths, and outright falsehoods that it compels a reply. Unfortunately, a point-by-point refutation would require at least twice as much space as the original article. MERS was designed not for

Letters to the Editor may be e-mailed to info@TheNicheReport.com or faxed to 703-991-2362. Include your full name, email address, and daytime phone number. We are unable to publish all letters and may edit letters for length and clarity. Visit us online at www.TheNicheReport.com to subscribe to our magazine and/ or eNewsletter. Or call toll-free at 866-964-2695 for more information.

January 2011

transparency but to conceal. Bill M., B.S., J.D., LL.M. – Mortgage Broker

Bringing Up the Rear: Tim Geithner by Mandelman, October 2010 Issue Hey Martin, Please keep up the good work! You are nothing short of brilliant in your analysis and dissection of the Tim Geithners of the world. Jerry C. – Managing Director, Dean Consulting ***

Martin - I look forward to your articles each month. I’ve been a loan originator for 16 years – and I have not read too many honest-to-God, pull-no-punches articles like yours! Carry on – and send them to the White House and your Senator and Representative too! Take care and keep spreading the Word! Francine F. - Mortgage Consultant

CONNECT WITH www.TheNicheReport.com www.facebook.com/TheNicheReport http://twitter.com/TNR01

flexibility

is our strength ™ At Linear Title & Closing we provide customized packages of Title Insurance, Appraisal and Settlement services that are beneficial to your bottom line. Our flexible, consultative approach to solving your problems is a breath of fresh air in a world of cookie-cutter “solutions.” It’s why we are one of the fastest growing title agencies in the country.

Settlement Services Default Services Title Insurance Appraisals Bundled Service Packages Guaranteed Fees Integration Solutions

For more information, please contact:

1.877.5. Linear info@lineartitlecom lineartitle.com

What Processors Aren’t Telling You By AMie Wills

ongratulations! If you are reading this article, you have survived the last few years of guideline changes, lending restrictions, and alphabet soup implementation (HVCC, MDIA, NMLS, etc). With good reason, you probably feel like a champion. Think of how many Loan Originators have fallen by the wayside! You should be proud of yourself for hanging in there, even if it still feels like you are barely hanging on. Now that I have said that, I would like to take a moment to bring you back to earth. You have not reached this point alone – no doubt you have had a team helping you navigate through many of these obstacles. I feel it is time to speak up for my people (the lowly processor, of course) and expose what we would really tell you if we thought you’d listen. Today’s lesson: Learn the rules without whining, arguing, or trying to make sense of them. I think it’s safe to assume we are all very frustrated by the industry’s fluidity of change. As one of my Loan Originators often says, “The only rule is that all the old rules are gone.” I recognize that change is difficult, especially if you have been in this business for a substantial amount of time, but at a certain point you have to accept that these are our current working conditions. As a loan officer, you only have so many hours in the week (more perhaps if you were actually in the office 9-5, but that is for another article). If you spend even one hour a day discussing all of the lending guidelines that do not make sense – and yes, by discussing I mean complaining – you have lost

January 2011

6.5 work weeks by the end of the year. You don’t think this is you? Think about how many times you re-tell a lending horror story to anyone and everyone who will listen. Furthermore, clients do not need to hear all things that could go awry during the course of their loan experience. Though they need to be given a healthy dose of realty (“I understand that you’ve agreed to a two week escrow. I will do my best, but it will be very hard to perform in that time frame.”), they do not need to be fed more of the hype that they already hearing on the news, internet, and radio (“I had a borrower with $10 million dollars in the bank whose loan was declined because his FICO score was 1 point too low.”). Does that instill their confidence in you? Does it prove you are professional? Or do they walk away from the conversation wondering if their story will end up being retold in the future? Don’t get me wrong, I sympathize with you because I am right here in the trenches with you. I hate that we can not always fight and win for an exception for a loan that “makes sense” just because it does not fit exactly into a lender’s box. I hate that some lenders take almost a week after submission before we are be able to order the appraisal. I hate that a GFE has to be re-disclosed when a loan is locked even if nothing has changed, and believe me, I probably hate this more than you, since I am the one re-disclosing! My challenge to you is to spend less time trying to understand why the rules are what they are and spend more time simply learning the rules so that you can play within the boundaries and ultimately create more business, because, after all, both of our livelihoods depend on it. Amie is and independent loan processor, working with both wholesale brokers & retail branches

Protections with consequences by Marc Savitt

uring the past three years, housing industry professionals, especially mortgage brokers, loan originators and appraisers, have experienced an onslaught of new rules, regulations and legislation. These so-called safeguards were designed to protect consumers. This article will take a closer look at some of these “protections,” to determine the true consequences for consumers and the housing industry. In addition, we’ll examine what the outcome of the November elections means to the housing industry. On May 1, 2009, the Home Valuation Code of Conduct (HVCC) went into effect. Born from an agreement between former New York Attorney General Andrew Cuomo, the GSE’s and their regulator (FHFA), this new set of appraisal guidelines was established to eliminate conflicts of interest and prevent appraisers from being influenced to over value properties. Almost immediately, the unintended consequences we all warned about began to materialize. Consumer costs skyrocketed by almost 2.8 Billion dollars a year. Thousands of appraisers were forced out of their profession by the loss of established business relationships with mortgage professionals and the redistribution of their 14

January 2011

fees to unregulated appraisal management companies. The valuation system in our country was now being controlled by the very organizations, who were the subject of Cuomo’s widespread investigation into appraisal fraud and subsequent litigation. Respected firms like Mortgage Asset Research Institute (MARI) and Interthinx revealed that valuation fraud increased significantly since May of 2009, despite the implementation of HVCC. Moreover, appraisal quality decreased significantly. Conclusion, HVCC was a complete failure. On October 18, 2010, the Federal Reserve Board released their interim rule on appraiser independence, as required under Dodd-Frank. Although brokers and loan originators were specifically eliminated from the appraisal ordering process in HVCC, the interim rule has no such prohibition. I personally confirmed this with two different sources at the Fed. The current problem is still the GSE’s, who have renewed their HVCC guidelines and refuse to acknowledge the harm created by the code. NAIHP is determined to restore appraiser independence, where licensed independent professionals control the valuation system and receive “custom and reasonable” fees for their services. This restoration will also reduce costs for consumers. On August 16, 2010, the Federal Reserve Board announced “final rules to protect mortgage borrowers from unfair, abusive, or deceptive lending practices that

can arise from loan originator compensation practices.” The new rules, which restrict originator compensation, were intended to include “mortgage brokers and the companies that employ them, as well as mortgage loan officers employed by depository institutions and other lenders.” The Fed is trying to create an illusion that banks are included in this rule. While bank loan originators are included, the banks themselves are exempt, because they’re considered “creditors.” Although mortgage brokers are considered creditors in all other areas of TILA, this rule, which amends TILA, limits that title to those providing funding at the closing table. The FRB cites “unfair, abusive, or deceptive lending practices,” was the basis for proposing this rule in August of 2009. However, no such practices were ever substantiated. In fact, during one of my meetings with them over this issue, I asked a specific question to their legal staff, “Do you consider broker, or originator compensation to be unfair and/or deceptive?” They all responded, “NO.” The Fed attempts to justify this rule, because they conducted consumer testing. Ok, here comes the part where you’re allowed to scream in frustration. The

consumer testing associated with this rule involved disclosures, not compensation. In addition, a total of only 35 people were tested in 4 cities. How does this justify a rule on restricting compensation? The main question is does the FRB have the authority to restrict originator compensation? Our research clearly indicates, NO. This rule must be stopped at all costs. NAIHP has hired legal counsel and will do whatever it takes to prevent this rule from being implemented, including legal action. On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law. While originally intended to regulate certain practices on Wall Street, mortgage brokers and loan originators were once again a target. Specifically, an amendment offered by Senator Jeff Merkley of Oregon and now part of the Act, restricted originator compensation and strangely tied it to a borrower’s ability to repay a loan. Although referred to as a safe harbor, originators may not exceed 3 percent in compensation, unless they can document a borrower’s ability to repay. According to the “Act,” third party fees are excluded. However, lender charges would not be considered third party fees. Moreover, I seriously doubt

appraisal management any way you like it Meet The New StreetLinks

StreetLinks Lender Solutions now offers nationwide appraisal management services, self-managed appraisal software and everything in between. No matter how you like to manage your appraisal process, StreetLinks can help you find the perfect solution for your business. Call 1.877.715.8082 to talk to a solution consultant today.

STREETLINKS L

www.streetlinks.com sales@streetlinks.com | 1.877.715.8082

DirECt PrivatE LEnDEr Creative Financings of $250K to $15M

• • • •

1st Trust Deeds up to 65% LTV Syndications for larger loans West Coast focused Super fast closings

• • • •

Commercial office, retail, industrial Multi-family & Non O/O residential Construction completion & rehab Portfolio & note financing

asset types

Call or email Kamau Coleman Email: kcoleman@greenlakefund.com Mobile: 310-462-4637

levels. On the House side, Rep. Barney Frank will lose his Chairmanship of the powerful House Financial Services Committee, when the new Congress is sworn in. The new Chairman of the HFSC, will likely be Congressman Spencer Baucus of Alabama. Since Election Day rumors have been flying that Rep. Frank will retire shortly after the new Congress is sworn in. I guess we will know in early January. Since most of the onerous legislation our industry has faced in recent years originated from these two committees, the changes in leadership are viewed as positive. The new majority in the House has indicated they intend to either repeal Dodd-Frank, or make substantial changes to it. Moreover, they intend to introduce long overdue GSE reform. Mortgage brokers and originators have endured 4 years as the scapegoat for the housing crisis. We have suffered economic hardships, additional costly licensing regulations and unjustified rules and regulations promulgated in the name of consumer protection, but designed to eliminate competition. Legislatively, we will be in a better position with the new Congress, because they appear to understand small business housing professionals are vital to the recovery of the housing industry. Until the marketplace is returned to Main Street, the housing industry will remain weak and unable to make a full recovery. Marc is the President of the National Association of Independent Housing Professionals. Previously, he served as the 2008-2009 President of the National Association of Mortgage Brokers. He also held the positions of NAMB's Presidentelect, Vice President, Director, Chairman and Founder of the Consumer Protection Committee and was awarded NAMB's highest honor, Broker of the Year.

Hey !! Not so fast...

re you sure your Quality Control Program is up to speed on changes effective New Year’s Day related to originating FHA loans? Don’t allow your production to slow down to a crawl–call AQC for details!

lenders will exceed the 3 percent safe harbor, even if ability to repay is proven. Lenders are going to avoid liability issues and stay within the safe harbor. Although, this section of Dodd-Frank is not seen as bad as the FRB’s compensation rule, NAIHP is currently working with Congress to make changes. At the current time, I consider the above three issues the most important to the housing industry. Several others issues exist, but time precludes me from discussing them in this article. On November 2, 2010, we witnessed sweeping changes to the make up of Congress. For the last four years, both the House and Senate were controlled by one party. In January of 2011, Republicans will gain control of the House, while the Senate, with a smaller majority, will remain under Democratic leadership. Current Senate Banking Chair, Senator Chris Dodd of Connecticut, will be retiring at the end of this session. I think it is fair to say, Senator Dodd was not a friend to our industry. Dodd’s likely replacement will be Senator Tim Johnson of South Dakota. Our experience with Senator Johnson has been positive, both on the state and federal

Give us a try and get 2 Free Quality Control Reviews–easy as turtle pie.

CCURATE

Quality Control .

We Do the Right Thing Right!

*2 Free QC Reviews limited to new AQC clients only.

770.931.5999 . www.aCCurateQC.Com Quality Control Services . Training . Consulting

Appraisal compliance and quality concerns? Mercury Network is the premiere online Vendor Management Platform, or VMP, allowing lenders and AMCs to manage their entire appraisal workflow while being compliant with all appraisal independence standards and banking security regulations. Mercury combines a cloud-based SaaS core with a robust appraiser desktop plugin architecture that automates the appraiser’s data flow to and from clients.

It’s been used by more than 200,000 mortgage professionals since 2002 to completely automate the full “round trip” of tens of millions of appraisals. Now, it’s handling 10,000 transactions every day, dwarfing other systems. So call us to see how we can ease your compliance concerns, eliminate delays, keep everyone in the loop, and help you close more deals, faster. You’ve got nothing to lose.

Simplify appraisal management, control quality and compliance — from order to closing.

Close without concerns or delays Reduced risk, controlled compliance, hassle-free processing, and thrilled borrowers and LOs. Make this your next closing.

Order the appraisal through Mercury Network

The best appraiser for the job is instantly alerted

Nothing to install, with easy online ordering and real-time status updates.

The best appraiser from your panel or ours, based on criteria you set, is selected by our customizable Intelligent Selection System. They receive a mobile alert and can respond instantly.

Report is checked against thousands of rules before delivery The customizable pre-delivery rules eliminate phone tag and underwriting delays. Only Mercury can give you this pre-delivery QC because it’s on the desktop of over half the nation’s appraisers.

Appraiser gets data on site with mobile tools that eliminate errors A full fee, experienced appraiser gathers data based on checklists — eliminating errors, and the resulting delays. Data is sent back to the appraiser’s desktop in MISMO XML format, compatible with Fannie’s UCDP.

Call us for a no-pressure walkthrough 1-800-434-7260 • www.MercuryVMP.com

ADCODE: MANRMERC1210 a la mode and its products are trademarks or registered trademarks of a la mode, inc. Other brand and product names are trademarks or registered trademarks of their respective owners. All prices, terms, policies, and other items are subject to change without notice. Copyright ©2010 a la mode, inc.

Is it really an Audit? Wall Street Reform & Consumer Protection Act Title XI: Federal Reserve System Provisions by peter hébert

Those who cannot learn from history are doomed to repeat it.

— George Santayana

he Federal Reserve System is the central nervous system to the financial sector. It is also the single greatest cause of civil unrest in the United States. After the Federal Reserve came into being, corporations moved the nation from monopoly capitalism to financial capitalism. The real economy based on tangible goods and services competed with and was usurped by a synthetic economy based on financial products, credit terms, and interest rates. This transformation contributed to economic destabilization. The secondary market for Alt-A, subprime, and jumbo mortgages collapsed when Countrywide’s Angelo Mozilo used the phrase “Great Depression” in a July 24, 2007 investor conference call. That triggered the subprime meltdown and global panic. On July 30, 2008, President George Bush signed The Housing and Economic Recovery Act into law. The law authorized the Federal Housing Administration to offer jumbo sized mortgages. The Federal Reserve then became the secondary market for the nation’s mortgage market under the guise of quantitative easing. The public backlash followed with 95,000 signers of the Audit the Federal Reserve petition. Many argued that the Federal Reserve was unconstitutional. The backlash was the result of a widespread awareness of the economic risks posed by a central business model that rested on fractional reserve lending, fiat currency, exclusive control of the money supply, control over monetary policy, relationships with foreign central banks, and secrecy. President George Bush signed into law the Emergency Economic

Stabilization Act on October 3, 2008. This law authorized the $700 billion Wall Street bailout through the Troubled Asset Relief Program (TARP). The Panic of 2008 resulted, which was the marketplace’s rejection of government intervention in the free market as investors again dumped their shares of overvalued financial sector stocks. Charges of crony capitalism and widespread social and political dissent with groups calling for an audit or an end to the Federal Reserve followed. Congressman Ron Paul (R-Texas) tapped into the public’s pulse beat with his 2008 book Deception and Abuse at the Fed and his 2009 book End the Fed. On February 17, 2009, President Barack Obama signed the American Recovery and Reinvestment Act of 2009 into law. This law authorized over $800 billion in deficit spending, which is borrowing from abroad through the Federal Reserve’s sale of U.S. Treasury bills, notes, and bonds. President Barack Obama signed the Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) into law on June 21, 2010. Within the Dodd-Frank Act is Title XI, which is Federal Reserve System Provisions. This can be found between pages 750 and 766, which covers nine sections. Lawmakers went so far as to say that the Dodd-Frank Act was the most significant financial reform legislation since President Franklin Delano Roosevelt’s New Deal. Yet, so little of the Dodd-Frank Act is understood and even less is understood about central banking and the Federal Reserve.

U.S. Central Banking History Through the Federalist Papers, Alexander Hamilton proposed that the nation have a single currency and a central bank. Thomas Jefferson objected to the creation of a central bank, because the Constitution never authorized one, and that such a bank would result in widespread speculation at the risk of economic stability. Jefferson also reflected the fears of others in the agrarian south that financial power would move and concentrate in the commercial north. President George Washington disagreed as did the majority within the Congress. They pointed to Article I, Clause 18, the “necessary and proper” clause, of the Constitution. Hamilton became the nation’s first U.S. Department of the Treasury Secretary. On April 25, 1791, Congress granted a 20 year charter to the First Bank of the United States. The federal government became a 20 percent shareholder, and private interests owned 80 percent. The Bank of England and other private shareholders were the owners of that central bank, which was located in Philadelphia while the city was the seat of the federal government. A 72 percent inflation rate followed within five years of its charter. The First Bank of

the United States lasted until 1811 when President James Madison refused to renew its charter. After the dust settled from the War of 1812, Congress granted another 20 year charter on April 10, 1816 for the Second Bank of the United States. Like the first central bank, the federal government owned 20 percent of the shares, and private interests owned 80 percent. During his second term in 1833, President Andrew Jackson bypassed the need for a central bank with concentrated power by using state banks, and then opposed renewal of the bank’s charter in 1836. The assassination attempt against Jackson failed. During the 77 years between the end of the nation’s second central bank and the beginning of the Federal Reserve, a nationwide interest in banking, economic stability, and monetary policy in the form of a debate between the gold standard versus an asset-backed standard based on both gold and silver took hold. The issue climaxed under Congressman William Jennings Bryan (D-Nebraska). Though the presidential hopeful lost the election, his memorable Cross of Gold speech on July 6, 1896 called attention to the fact that the gold standard would benefit the affluent, not the average person. His closing line in that speech was, “…You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold….” This was a class warfare issue since, as Congressman Bryan had argued, only the affluent with fixed investments throughout history have sought a gold standard. L Frank Baum’s 1899 book The Wonderful Wizard of Oz appeared, and through metaphor according to Ben Still, the director of the 2010 documentary film The Secret of Oz, laid out the means by which the American people could establish economic stability without a central bank. After the Panic of 1907, New York City financiers called for another central bank. Congress consulted with European central bankers to provide the guidance and the business model. Congressman Carter Glass (D-Virginia) introduced House Resolution 7837, which called for a central bank. The U.S. Congress established the nation’s third central bank on December 23, 1913 through the Federal Reserve Act. The new law established that participating national banks within each of the 12 districts would become shareholdermember banks of that district’s Federal Reserve bank. President Woodrow Wilson was a progressive, and like other progressives of the era, believed that scientific management of various aspects of life including the economy was possible. In a dissenting comment, Congressman Charles A. Lindbergh Sr. (R-Minnesota) said, “From now on, depressions will be scientifically created.”

The stock market crash of October 29, 1929, the banking panic of 1933, and the Great Depression followed. Economist Milton Friedman would later conclude that the Federal Reserve caused the Great Depression by contracting the money supply by one third. As important, the Federal Reserve had no concern for nonmember banks. The nation’s central bank did nothing as non member banks failed as a result of the foreclosure crisis that resulted in repossessions and an angry public that got even with penny auctions. President Franklin Delano Roosevelt’s New Deal was not a banker bailout. It was true financial reform and financial regulation that worked until 2000 when concerted efforts were made to dismantle the GlassSteagall Act. President John F. Kennedy issued Executive Order 11110 on Jun 4, 1963. This authorized the U.S. Treasury to issue U.S. Treasury Notes that competed with Federal Reserve Notes. Some conspiracy theorists believe that Kennedy’s drive to usurp the role of the Federal Reserve led to his assassination. Between January 1963 and October 1964, only $768 million of the 1957B Series silver certificate was issued, with the the signatures of Kathryn O’Hay Granahan and C. Douglas Dillon. Over the years a series of books appeared to fill the vacuum left by academic textbooks. These investigative and alternative narratives describe how the Federal Reserve runs more than just monetary policy in the United States. Some of these books include: Eustace Mullins’ 1952 book Secrets of the Federal Reserve; Gary Allen’s 1972 book None Dare Call it a Conspiracy; William Greider’s 1987 book Secrets of the Temple: How the Federal Reserve Runs the Country; and G. Edward Griffin’s 1994 book The Creature from Jekyll Island: A Second Look at the Federal Reserve.

These researchers and authors were trailblazers, because they wrote about central banking, monetary policy, and economics when the public schools system was failing due to the introduction of new math and home economics not designed to promote financial literacy and functional competence. After the subprime meltdown, Alan Greenspan told Jim Lehrer in a PBS NewsHour interview: “…The Federal Reserve is an independent agency, and that means, basically, that there is no other agency of government which can overrule actions that we take….” Comments like that went against the grain of the right to know and accountability in government. While Ron Paul supporters demanded an audit, activists across the nation launched the End the Fed! campaign, those in financial media used the the Freedom of Information Act (FOIA). FOIA requires federal government agencies to make their documents available to the press and public when requested.

The FOIA Requests and Lawsuits On October 25, 2008, Bloomberg News filed a FOIA request with the Federal Reserve Board in connection with $2 trillion in loans made to troubled banks. On November 7, 2008, Bloomberg News bumped it up a notch and filed a lawsuit against the Federal Reserve Board. At issue was the quality of the collateral the troubled banks like Citigroup Inc., JPMorgan Chase & Co., and Goldman Sachs Group Inc. posted in exchange for the significant line of credit. The relevance of a financial news agency’s FOIA request through Bloomberg LP v. Board of Governors of the Federal Reserve System was in connection with its readership, which has an interest in fully understanding the viability of financial sector firms. The Federal Reserve denied the FOIA requests made by Bloomberg News. On August 24 , 2009, District Judge Loretta Preska of the Southern District of New York ruled in favor of Bloomberg News. On March 23, 2009, The New York Times sued the Federal Reserve Board and the Treasury Department under the FOIA. The paper wanted: The calendars of Federal Reserve Board chairman Ben Bernanke and U.S. Treasury secretary Henry Paulson; Information about the Federal Reserve’s new lending programs; Communications among Paulson, Timothy

“ENTITLE DIRECT has received regulatory approval to sell title insurance... with a simple pricing strategy: Charge a ﬂat 35% less than the going rate in the local market.” Forbes

People are talking about title insurance. Weird, huh?

“The biggest cost that’s almost always negotiable are the charges for title insurance and related title services... ENTITLE DIRECT... charged $857.50 for that entire package — a savings of $787.” CBS Moneywatch

“[ENTITLE DIRECT] aims to undercut other insurers by at least 35%.” Wall Street Journal

But true. And maybe it's time you did too. Before your client reads about ENTITLE DIRECT1 or hears about it from a friend or an advisor or worse — your competition. ENTITLE DIRECT can save your borrower hundreds, even thousands of dollars on a jumbo closing. Being the first to tell your client and offering to request our title insurance on their behalf (it's easy with our dedicated call center) can help build a relationship and position you as a trusted advisor. It's also a great way to re-engage with refi prospects. There’s nothing to lose, except high-priced retail title costs. ENTITLE DIRECT has instant online quotes. If you like our rates — and what's not to like with savings of 35% or more — we'll guarantee them for your GFE in minutes. Use our closers or your own.2 So repeat after me: "I can save my borrowers hundreds, even thousands off closing costs with ENTITLE DIRECT." That wasn't too weird, right?

Call us at 1.877.936.8485 All title insurance policies are underwritten and issued and all licenses to issue policies and regulatory approvals received are held by EnTitle Insurance Company, 4600 Rockside Road, Independence, OH 44131. EnTitle Insurance Company is regulated by the Ohio Department of Insurance. * Except in NM where rates are set by statute. Subject to state laws and approval by EnTitle Insurance Company. Certain title and escrow services are not available in all states. CBS Moneywatch, Wall Street Journal and Forbes are copyrights owned by their owners.

Giethner, and those working with the Troubled Asset Relief Program; and Federal Reserve memos that would reveal the central bank’s position on the Wall Street bailout. The U.S. Treasury handed over 10,096 pages, but redacted important information from the documents. On January 12, 2009 the parent company of FOX Business News filed Fox News Network, LLC v. Board of Governors of the Federal Reserve System. The lawsuit stemmed from two prior FOIA requests made on November 10 and 18, 2008 that went unaddressed within the time required by law, and that were denied on January 9, 2009. On July 30, 2009, however, the U.S. District Court in Manhattan ruled against FOX News and stated that the Federal Reserve Board was within its rights to withhold more than 6,000 pages of documents. The court upheld its decision on March 19, 2010 when FOX News failed in its appeal. The calendar records obtained through The New York Times FOIA request revealed that the Federal Reserve Bank of New York awarded BlackRock Financial Management Inc. three no-bid contracts valued at $71.3 million to manage and liquidate that central bank’s

you’ve decided to look at branching opportunities! With all the neW players entering the market, it’s not an easy decision. There are several options, but are they experienced at branching?

$20.8 billion worth of troubled securities acquired from American International Group, Inc. (AIG). The true cost of the $700 billion Wall Street bailout, depending on the sources, ranges between a low of $2 trillion and a high of $23.7 trillion. A third source estimated that the true cost of the bailout would be 20 times higher than the $700 billion—or $14.4 trillion. Congress has no idea where the bailout money went, because the Federal Reserve refused to completely disclose the details. The high end figures exceed the actual losses in the real economy due to the speculative derivatives market, which was $600 trillion in 2008 according to the U.S. Government Accountability Office (GAO). The complex nature of finance, currency exchanges, and derivatives frustrates law makers due to the lack of transparency and true accountability by the Federal Reserve. This is perhaps best illustrated in Congressman Alan Grayson (D-Florida) and Federal Reserve Chairman Ben Bernanke’s cat and mouse dialogue at the July 21, 2009 Capitol Hill hearing concerning a $553 billion money trail on central bank liquidity swaps. Grayson: “So who got the money?” Bernanke: “Financial institutions in Europe and other countries.” Grayson: “Which ones?” Bernanke: “I don’t know.” Grayson: “Half a trillion dollars, and you don’t know who got the money?” Grayson: “Is it safe to say that nobody in 1913 [when the Federal Reserve was established] contemplated that your small little group of people would decide to hand out a half trillion dollars to foreigners?” Grayson’s inquiry and Bernanke’s responses fed into the public demands for an audit.

Rhetoric and Reality The Federal Reserve System, in its own words, has responsibilities that fall into four categories, which are: Who Would you trust With your life? branch program for professionals

it’s all We do.

ExEcutivE OfficEs: 108 corporate Park Drive, suite 301 White Plains, NY 10604 cALL: Louis tesoriero at (888) 329-GHMc ltesoriero@ghmc.com www.joinguaranteed.com Licensed in AL, AR, cA, ct, DE, fL, GA, iL, iN, LA, MA, ME, MD, Mi, MO, Nc, NH, NJ, NM, NY, OH, PA, sc, tx, vA, Wv and growing

Conducting the nation’s monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices; Supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers; Maintaining the stability of the financial system and

containing systemic risk that may arise in financial markets; and Providing certain financial services to the U.S. government, to the public, to financial institutions, and to foreign official institutions, including playing a major role in operating the nation's payments systems. The public perception and criticism of the Federal Reserve’s responsibilities may be summarized as the following: Expanding and contracting credit produces the boom and bust cycles; Tightening credit during a bust cycle followed by widespread unemployment; Transferring wealth from the many to the few takes place during the bust cycles through widespread discounted shopping opportunities across many asset classes; Deflating the currency by monetizing the federal government’s obligations and deficit has led to a 95 percent decline in the value of the U.S. dollar and an increase in price levels; Regulating the capital assets of member banks, but not zealously enforcing consumer protections through existing regulations, results in a corporation oriented focus; and Promoting economic destabilization through regulation that turns on the flow of global capital and floods the American economy with excess credit that results in widespread losses with little legal recourse. The disconnect between theory and practice, the widespread recognition that “we’ve been here before” as history repeats itself, and comments on the floor of Congress that the Federal Reserve covertly provided $5.5 billion to Saddam Hussein were behind the calls to audit the Federal Reserve.

H.R. 1207: Federal Reserve Transparency Act of 2009 Most Americans, who understand the role of the nation’s central bank, believe that the Federal Reserve was culpable in creating the housing bubble, the subprime meltdown, the Panic of 2008, and the post meltdown national malaise. The Federal Reserve System is made up of 12 privately owned and closely held central banks. It is also a federal government agency and a banking regulator. As a private central bank, it has primary obligations to its shareholders. As a regulator, its primary concerns have addressed capital reserves not regulatory enforcements that

would protect the customers doing business with member banks. The concerns about the Federal Reserve, however, transcend the nation’s mortgage finance market. At the macro level, the issues go to the heart of the history of central bankers financing both sides of a conflict in order to benefit from sovereign debt payable to them. At the micro level, the issues go to the Federal Reserve allegedly destroying meeting minutes in connection with misleading reporters in connection to stolen Federal Reserve notes tied to the Watergate burglary. Congressman Ron Paul (R-Texas) was the nation’s leading voice in calling for a true audit of the Federal Reserve. H.R. 1207: Federal Reserve Transparency Act of 2009 that Congressman Paul presented to be part of the Wall Street reform bill had one serious problem. HR: 1207 had no constraints on scope, time period, or areas under the control of the Federal Reserve. If it had been included and passed, the door would have been opened for the GAO to do an unconstrained audit and to then recommend to Congress to shut the Federal Reserve down through a phase out and to restore the U.S. Treasury to resume its earlier functions. H.R. 1207 was not watered down. H.R. 1207 suffered from legislative bait and switch. It was killed. The media reported that Congressman Mel Watt (D-North Carolina) “amended” the original proposal in committee in a complete redo without a bill number. In fact, Senator Bernie Sanders (I-Vermont) proposed Senate amendment 3728, and it served as the substitute. The end result was a Federal Reserve friendly disclosure not much different from the disclosures already taking place with the Maiden Lane LLC transactions that are connected with TARP, which are posted to the Federal Reserve Bank of New York’s website.

Title XI - Federal Reserve System Provisions Between 1913 and 2010, the Federal Reserve Act has been amended over 200 times. With many of the amendments, the Federal Reserve has acquired more responsibilities while also becoming more accountable to Congress. As of October 21, 2010, the Federal Reserve was responsible for overseeing 33 regulation categories. In spite of the added amendments and greater regulatory oversight, the United States has continued to suffer from economic instability. Section 1101 of Title XI of the Dodd-Frank Act again amends the Federal Reserve Act to recognize the broadened lending authorities that the Federal Reserve may exercise as well as the disclosure requirements to Congress for emergency lending actions. TheNicheReport.com

Standing strong Grow with an established branching company

Join American Pacific Mortgage—the retail branching company whose strength is rooted in 20 years of experience serving branch managers and originators. • APM is a Direct Endorsed FHA • • • • • • •

• In branching Mortgage Bank—No YSP disclosure since 1990 At APM you can use your • More than established brand name 130 branches • Licensed in APM gives you a choice—Bank your 19 states loans or Broker your loans • Headquartered in APM offers Weekly Production Sacramento, CA Training APM provides Database Marketing Fulfillment APM has Multiple Established Warehouse Lines APM engages a Custom AMC Solution APM employees have access to Full Benefits

American Pacific Mortgage is currently growing throughout the Western U.S. For complete details call (866) 625-9352 or visit www.apmortgage.com

3000 Lava Ridge Court , Suite 200, Roseville, CA 95661 (866) 625-9352 info@apmortgage.com apmortgage.com

Section 1102 defines the terms under which the Comptroller General of the United states may audit or carry out an examination of a covered transaction involving an institution's access to the Federal Reserves credit facilities. Any audit of a covered transaction may not disclose the details of the parties or the amounts borrowed in a covered transaction. The Maiden Lane, Maiden Lane II, and Maiden Lane III transactions associated with the Wall Street bailout are not subject to the nondisclosure provision as the details of these transactions were posted to the website of the Federal Reserve Bank of New York. Section 1103 states the Federal Reserve will publish on its website the report from the Comptroller General, annual financial statements, the regular report to Congress pursuant to emergency lending, and other information to help the public better understand the operations of the Federal Reserve. This section defines a covered transaction as “any open market transaction with a nongovernmental third party” or advance made after the enactment of the Dodd-Frank Act. The Federal Reserve's Inspector General shall conduct a study to be published the the Federal Reserve's website on the central bank’s exemption from Freedom of Information Requests and the public's ability to access information about the bank's administration of emergency credit facility lending, discount window lending, and open market operations. Section 1104 defines the two-thirds vote procedure for the Board of Governors with two-thirds of the members of the Federal Deposit Insurance Corporation (FDIC) to determine a liquidity event, or an emergency, that requires the guarantee program. Section 1105 defines the roles of the Federal Reserve and the FDIC in guaranteeing obligations during “times of severe economic distress.” This section also states that FDIC shall define the terms and conditions with the approval of the Secretary of the U.S. Department of the Treasury under which financial guarantees will me made to distressed institutions. Additional debt guarantees will require the President’s request and a joint resolution of Congress with a 10 hour cap on debate equally divided between the majority and minority leaders. The FDIC shall charge member institutions fees and charges for administration and to cover anticipated losses. Section 1106 amends the Federal Deposit Insurance Act to clarify the role of the agency as a receiver of failed institutions. Section 1107 amends the Federal Reserve Act regarding a Federal Reserve bank’s governance by the chief executive officer, who is appointed by Class B and Class C bank

directors with the approval of the Board of Governors of the Federal Reserve System. Section 1108 amends the Federal Reserve Act pursuant to Vice Chairman’s supervision and development of policies and regulations for depository institution holding companies and financial firms under the supervision of the Board of Governors of the Federal Reserve System. The Vice Chairman will have the semi-annual reporting responsibilities to Congress. Section 1109 is the audit of the Federal Reserve, and in part states that the Comptroller General of the GAO “shall conduct a one-time audit of all loans and other financial assistance provided during the period” between December 1, 2007 and June 21, 2010. This one time, limited inquiry will delve into the: Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Term Asset-Backed Securities Loan Facility, the Primary Dealer Credit Facility, the Commercial Paper Funding Facility, the Term Securities Lending Facility, the Term Auction Facility, Maiden Lane, Maiden Lane II, Maiden Lane III, the agency Mortgage-Backed Securities program, foreign currency liquidity swap lines, and any other program created as a result of ... the Federal Reserve Act.

The scope of the GAO’s examination is further limited

to five areas, which in the words of the Dodd-Frank Act are: The operational integrity, accounting, financial reporting, and internal controls of the credit facility; The effectiveness of the security and collateral policies established for the facility in mitigating risk to the relevant Federal reserve bank and taxpayers; Whether the credit facility inappropriately favors one or more specific participants over other institutions eligible to utilize the facility; The policies governing the use, selection, or payment of third-party contractors by or for any credit facility; and Whether there were conflicts of interest with respect to the manner in which such facility was established or operated. Moreover, the GAO has one year to audit the Federal Reserve to make sure that the central bank did not violate hiring laws with regard to race and creed in selecting its governors. More importantly, the GAO will determine if there are any conflicts of interest when member banks elect

board governors. Congress recognized the inbuilt conflicts of interest in its August 1976 study “Federal Reserve Directors: A Study of Corporate and Banking Influence.” The Congressional study uncovered that many of those who sat on the boards of the 12 Federal Reserve banks also sat on the boards of corporations within the military and industrial complex. The GAO’s examination will result in a report to Congress with recommendations that will include ways in which the Federal Reserve can better represent the public through changes to the selection process for Federal Reserve bank directors. The Federal Reserve will publish on its website by December 1, 2010 some of the transaction details that came under question between December 1, 2007 and June 21, 2010. This limited disclosure will restate the FOIA reportage made by Bloomberg News, The New York Times, and FOX News.

Quantitative Easing Printing money, deflating the currency, is what central banks do when there are no outside customers due to prior policies. Quantitative easing (QE) is an academic euphemism for economic malfeasance. The targets of quantitative easing policies are to prop up three

asset classes: the equities market (stock prices), the real estate market, and the bond market for mortgages and government debt. There are two advantages of devaluing the dollar. First, the government’s debt is repudiated through repayment of debt owed to foreigners with currency that is worth less. Second, American exports will rise since their costs will be lower against other currencies. Foreign governments view currency manipulations as trade wars. Economic history, however, teaches that currency manipulations in the1930s led to World War II. The Federal Reserve became the secondary market for mortgages after the subprime meltdown. The quantitative easing summary, known as QE1, is as follows: November 25, 2008: Purchase of $100 billion of Government Sponsored Enterprise’s direct obligations and $500 billion in mortgage backed securities (MBS); December 16, 2008: Federal Open Market Committee (FOMC) Statement evaluates benefits of purchasing longer-term U.S. Treasury securities; January 28, 2009: FOMC Statement stands ready to expand QE program; • A well-established Direct Lender with the ability to broker loans.

A World of Opportunity Awaits You at Land/ Home, a Proven Direct Lender.

• Licensed in 42 States. • Wide array of loan products – Conventional, VA, FHA, CalSTRS 80/17, CalPERS, Home Path, and USDA. • Competitive compensation plans. • Comprehensive medical, dental, and optical benefits (based on eligibility). • Fannie/Freddie seller servicer. • Our rates beat most of our competitors’. • Personalized marketing support.

Call Land/ Home Today and Start the New Year off Right – 800-241-5263!

• In-house underwriting, doc drawing, and funding departments. • Technologically advanced Web-based loan origination and customer management tools. • On site appraisal department (HVCC).

www.lhfinancial.com

Land/Home Financial Services, Inc. is an Equal Opportunity Employer.

• Underwriters that employ “common sense” and open lines of communication to ensure fast turn around times.

March 18, 2009: FOMC Statement expands MBS program to $1.25 trillion, purchases up to $300 billion of longer-term U.S. Treasury securities; and August 27, 2010: Fed Chairman Ben Bernanke hints at QE2. In November 2010, the Federal Reserve launched QE2 and committed to purchase $600 billion in U.S. Treasuries at the pace of about $75 billion per month through June 2011. This was in response to Japan and China’s reduced investment in government debt issued by the United States. In the post-meltdown era, the Federal Reserve’s monetary policies are attacked from all sides, and even from within, for different reasons. Trade associations and beneficiaries of the FIRE economy—finance, insurance, and real estate—have their fortunes pegged to low interest rates. Low rate policies, however, are disincentives for prudence and saving and target the lower 80 percent of the economy. Reduced savings results in an over reliance on credit, which is what produced the nation’s economic challenges. For corporations, low rates encourages risk taking that would not be as prevalent in a higher interest rate environment. Depreciating the dollar means that the United States will repudiate some of its debt and repay its bond holders in currency worth less than what was borrowed. Corporations are hoarding $943 billion in cash, which signals a lack of confidence in the economy’s direction and results in halted hiring and production. Another bubble created by financial central planning in defiance of the dictates of the free market is a set up for economic collapse and what could follow. The Federal Reserve’s actions as the backstop to the American government and the financial system has drawn almost universal criticism, because artificially keeping interest rates low distorts the real economy, creates bubbles, and leads to busts. The magnitude and ramifications of the Federal Reserve’s policies have produced a historic move by some investors—they have placed $10 billion into Treasury Inflation Protected Securities (TIPS) that have a negative yield when adjusted for inflation. Japan’s lost decade was the result of a commercial real estate bubble followed by its central bankers engaged in Keynesian policies and near zero interest rates. Fiscal spending policies designed to jump start the economy at a rate fast enough in order to generate tax revenues to offset the newly acquired government debt rarely works. Economic history shows that Max Warburg, the brother of Paul Warburg—the founder of the Federal Reserve— managed the Reichsbank under Adolph Hitler. Quantitative easing is what brought the Weimar Republic to an end and enabled political extremism to take hold of Germany. Under Warburg’s management, the Weimar Republic’s economy

collapsed, because the central bank interfered with the free market, and printed more money than the tangible assets that were in the real economy. When Hitler consolidated his power over Nazi Germany, he repudiated the national debt owed to foreigners collected by the Bank for International Settlements and ousted the Warburgs. Then, all hell broke loose as Hitler attempted to impose on the world his vision for a New World Order.

Concluding Thoughts Central banking is a perennial topic and part of the great conversation of the ages. The founding father’s grappled with the issue. The following generation’s debated and issued heated words over central banking. And, it is no different today. In the past, it could be said that banking and farming didn’t mix. The business models, variables, and lender and borrower expectations were so different. In the present, many might argue that central banking and economic stability don’t mix. And, some might argue that central banking and global peace don’t mix since there is an economic driver that sees war production and the nation’s required deficit spending enabled by borrowing through the Federal Reserve to wage war as a positive contributor to the nation’s Gross Domestic Product. Gene L. Dodaro, an interim replacement, took the helm of GAO when David M. Walker resigned as Comptroller General. Walker’s message to the United States when he left the GAO was that the nation was at the precipice of financial disaster and had refused to attest to the accuracy of the nation’s true debt position due to accounting problems with the Department of Defense, federal agencies, and the government’s inability to consolidate financial statements. Walker went to work with the Peter G. Peterson Foundation, which in 2008, distributed the disturbing national debt-focused documentary film I.O.U.S.A. The Federal Reserve was tasked to manage the currency and to keep the nation’s employment levels sufficiently high. Since the Federal Reserve came into being in 1913, the U.S. dollar has lost over 95 percent of its value, which is due to excessive credit, fiat currency, and legislation that permit the federal government to not have a budget or deficit constrained by the value of assets like gold and silver. This has resulted in price increases that have nothing to do with supply and demand factors that are typically used to describe the causes of inflation. Moreover, the nation’s economy has suffered from boom and bust cycles as a result of the financial sector’s manipulation of the markets at the expense of ordinary households and investors. Finally, the Federal Reserve has enabled deficit spending that has placed the United States into the position that it will never be able TheNicheReport.com

to pay off the national debt or meet the nation’s entitlement obligations like Social Security. The overall impact of the Federal Reserve’s management of the money supply on most Americans has been devastating. Many recognize that the appearance of prosperity of the American middle class was an illusion propped up by mortgage and consumer debt. Congress, instead of placing blame on the Federal Reserve for the nation’s economic instability, placed blame onto the U.S. Department of Housing and Urban Development, which is accountable to Congress. The Dodd-Franck Act held the nation’s central bank harmless, and instead granted it more responsibilities. Better disclosure and transparency with confidentiality of transaction details were maintained. These are good investigative steps, but do not constitute an unconstrained audit with complete transparency. Moreover, the audit provision of the Federal Reserve is limited to Wall Street’s collapse, but does not take up the concerns that prompted Congressman Ron Paul to propose the audit. Peter Hébert is a mortgage finance and real estate industry subject-matter expert and CEC trainer with a master of business administration degree in finance and marketing from Mount St. Mary's University in Emmitsburg, Maryland. Hébert is the

author of Mortgaged and Armed (Freedom House Press, July 2010), which is available on Amazon.com. His upcoming books The Collapse of Home Prices and the Foreclosure Crisis and Predator Nation will be available in 2011. He can be reached at PeterHebert@verizon.net.

Reference End Notes Stephen Gandel, “Will the Federal Reserve Cause a Civil War?,” The Curious Capitalist: Commentary on the economy, the markets, and business, Time.com October 19, 2010. The author sat in on this historic conference call, and believes that this date will become universally recognized as the final trigger that released the panicked sell off across the global financial markets. Ron Paul, Deception and Abuse at the Fed, University of Texas Press, 2008. Ron Paul, End the Fed, Grand Central Publishing; 1st edition, September 16, 2009. “A History of Central Banking In the United States,” The Federal Reserve Bank of Minneapolis, 2010; Online at www.minneapolisfed.org/community_education/student/ - continued on page 40

THE VOICE OF HOUSING

MBSWARROOM.COM Brought to you by:

Capital Connection The Shifting Model of Mortgage Banking by Jim Russell

he capitalization of our non-depository mortgage banking firms is a real issue. Today, Ginnie Mae issuers are required to have a significantly increased unimpaired capital account over what was required only six months ago. We must now move from a strictly entrepreneurial model with short term gains based on origination volume and an exit strategy based on the sale of some residual servicing rights, to a model based on returns on investment (initially be pegged in the midteens without some sort of credit enhancement) demands from investors who may or may not be fully cognizant of the risks involved in the mortgage banking practice. The first question we must ask is: Are we prepared to accept outside investors into our business? We have traditionally built our firms based on our own abilities to source the product acquire the right people to take care of all the processing, underwriting, closing, warehouse administration, shipping and servicing. Most of our companies have been founded by great originators who had good business acumen and developed a strong business with little capital. There will be continued pressure to step up our game and have a business/investor centric model rather than the entrepreneurial model we are so familiar with today. Over the next six to eight months we are going to see rules promulgated for risk retention (a direct driver

of capital need), threshold capital requirements for agency and GSE approval and as the warehouse market returns threshold requirements for capital as well as increased levels of interim retention prior to final investor/security delivery. Delaying the preparation of our companies and ourselves for the inevitable need for capital is only going to foreshadow failure. Preparing for the future and meeting the challenges based on proper preparation is the key to our future success as an industry. Each of us as business leaders must be equally prepared to meet the financial challenges now being formed. We must examine our processâ&#x20AC;&#x2122;, question our use and choice of QA/QC tools, understand whether we have an enterprise system nimble enough to place us at a competitive advantage for the future and finally how does all of that translate into attracting capital so we can make the next step. Mortgage Banking is an honorable profession and although young is one that can be one of the key facilitators for the future of housing in America. Letâ&#x20AC;&#x2122;s grasp the opportunity to move forward and deal with the challenges. Jim Russell is a Managing Director of the Collingwood Group. In his 37 years of experience in the financial services industry, Jim has led project teams for the USDA, HUD, ICE, CUNA and SBA.

TheNicheReport.com

Techspot

2011 The Real Tech Crunch Unemployment, Mortgage Rates and Inflation by Rick Roque

nother NAMB West conference has come and gone. Feelings are mixed here in Las Vegas where I write this article. We are a tale of two markets. On one hand, there are struggling (to suffering) brokers and small mortgage banks who lack capital, technology and resources to remain competitive. Then there are well capitalized mortgage lenders who are rapidly growing their footprint. With the largest secondary gains in more than 10 years, margins are significant; it’s a good time to be a stable mortgage banker. But is this a good thing and what does 2011 look like? As Dave Savage, CEO of Mortgage Coach said it to me in a recent interview, there is the loss of the middle class mortgage operation. There is a ballooning affect occurring amidst our surviving mortgage banks where the larger organizations are getting significantly larger – both in volume and overall headcount, while there is a significant reduction in the small to mid-sized mortgage lending operations; through industry consolidation driven by a number of economic trends, the number of mortgage banks should drop another 20-25 percent. We know what has happened to the mortgage broker – and in 2011, we expect another 20-25 percent reduction in this dwindling segment – somewhere 30

January 2011

to fall at or below 10,000 mortgage brokerage firms in the United States.

It’s a Land Grab before the land falls out from underneath us But the pressure points in the industry are significant across the board. Mortgage operations are being squeezed by their wholesalers for volume commitments but are suffering due to poor turn times – which often amounts to 70-90 days in underwriting. Banks are increasingly burdened with the costs of technology, compliance and the pressures of buy backs. There is a scramble for mortgage companies to both increase volume and yet minimize their risk. The larger mortgage operation is pushing outward to expand their foot print, because once rates continue to increase, mortgage demand will drop 30-40 percent; the MBA forecasts a drop in total mortgage origination in 2011 to $1.0T, (from $1.4T) with other economists forecasting as low as $0.7T. “It’s a land Grab,” said one mortgage banker, who asked not to be named for the article. “Before the land falls out from underneath us, we need to get the feet on the street as broadly and quickly as we can. When demand declines, the mortgage operation who grows in this market is the one with the physical presence on the ground, talking with realtors and getting the available deals.” I believe this is the right business approach. You have to build a highly

Techspot credible brand and leverage technology to increase your levels of service – both in turn time and communications. Without this, you will lose deals and in a declining market, that will kill your company. As of the writing of this article, the yield on the benchmark 10-year Treasury broke above 3 percent briefly which is a bad sign for mortgage rates – or rather, rates are inevitably going to get higher. This may be good for the economy as a whole because as the economy improves, unemployment rates decrease, that mortgage rates will increase as inflationary pressures are worked out of the economy. With a pre-Christmas release of unemployment numbers at or above 9.8%, the trend for unemployment is getting worse not better. There is even speculation as to whether or not a 3rd round of ‘Quantitative Easing’ may be necessary in Q3 of 2011 to “support” the economy. You have to wonder if it would be better to invest these dollars in food kitchens and nonprofit support groups and allow the economy to contract with the goals that it will expand on its own. With more and more Federal involvement in Housing, we are experiencing ‘mini bubbles’ which is making it difficult for mortgage companies to plan for the future. A strong 4th quarter 2010 will quickly be followed by 1 or 2 quarters of significant decline. I know of one mortgage banking operation in the Mountain States who experienced their highest monthly production levels in the history of the company – over $500M in November. With the highest margins ever, they are sitting on a lot of capital. But with this increase in net profit, they are reducing their numbers, increasing their investments in technology and preparing for $200-$250M/month in the first 2 Quarters of 2011. I spoke to another mortgage operation whose secondary manager wanted to stave off some production to ease their operational pipeline and achieve larger gains that he arbitrarily built in a full point in their bank pricing. This staved off some of the banking production – it drove their volume toward the wholesale channels and it had 2

effects on the operation: the bank products they did close, they made significantly higher margins and they frustrated their client service levels by pushing the rest wholesale. I say this because the mortgage operation could not be more volatile due to the market. It is a game of mitigating risk, making up for previous losses and building reserves for future market declines. This unpredictable behavior by mortgage operations hit a climax in the powerful industry trade association, The National Association of Realtors. 2011 NAR President, Ron Phipps has recently called upon Mortgage Lenders to end their overlays –“the underwriting restrictions lenders are placing on top of the government’s requirements are choking off any chance of a housing recovery.” Aren’t comments like this helpful? I’d like to see a realtor be responsible for repurchases and the significant operational burdens that are both costly and cumbersome to the mortgage company. I am surprised actually that realtors and their persuasive selling techniques haven’t been scrutinized but instead, they can sell borrowers into homes based upon bigger dreams than what their wallets can feasibly afford, and then hold it over our heads if

TECHSPOT we can’t find a loan product that can get the deal done; and I ca not forget to mention that we need to do this by minimizing our profitability, increasing our service and reducing our turn times- if we don’t, we lose the relationship to another mortgage company. Don’t you love having all of the responsibility, liability and all the blame in today’s housing market? This is an area that is well worth focusing on in a future article.

The impact on mortgage tech What does all of this mean for mortgage technology? Mortgage tech firms, who fail to understand these trends, will not survive the market. 2011 will experience rapid consolidation. You will see the following from mortgage technology firms: 1. Change in Business Models: traditional software licensing models that are ‘per seat’ pricing will (or have already) moved to per user per month (Software as a Service modeling) or per closed loan pricing. 2. Push to the Cloud: For mortgage technology companies to leverage and reduce costs, decrease software release turn times and more easily maintain the client user experience. 3. Focus on Marketing Execution: Integrated marketing to retain the clients that you have and reach out to new clients will be increasingly important in 2011. With a drop in mortgage demand, competition will be fierce between loan officers. Strong Automation on Marketing tools is important for loan officers to ‘scale’ their marketing efforts to a larger audience. 4. Technology Contraction: Small Companies (fewer than 300 clients) with a sole reliance on per closed loan models will either go out of business or be acquired. Unless they are extremely operationally efficient and they are highly capitalized to weather weak 2011 and 2012 origination volumes of around $1T, then they will go out of business. 5. Technology Consolidation: The niche product in the mortgage industry is dead; it is all about consolidation and streamlining one’s technology platform. You’ll see Product & Pricing, Docs, Trades and Marketing Execution built in or upon existing mortgage technology platforms.

Rick Roque, former Management Team member at Calyx Software & non-operating owner of Menlo Company. If you have any comments on this article, feel free to call Rick at 408.914.5895 or by email: rick@menlocompany.com

WHAT IS YOUR MORTGAGE IQ?

What's your mortgage IQ? BY MortgageCurrentcy

aybe you know the answer—or maybe not! Some of the answers may even help you put together deals that you never thought had a snowball’s chance… (The answers are extracted from the guidelines and do not cover lender overlays. ) FHA: Does FHA require 30 percent equity like FNMA to count 75 percent of the rental income received when a current residence is converted to a rental property? FHA does have a 25 percent equity rule (instead of 30 percent) but they also have the following exception to that rule: The borrower is relocating with a new employer, or being transferred by the current employer to an area not within reasonable and locally-recognized commuting distance. A properly executed lease agreement (that is, a lease signed by the borrower and the lessee) of at least one year's duration after the loan is closed is required. Note: FHA recommends that underwriters also obtain evidence of the security deposit and/or evidence the first month's rent was paid to the homeowner. Some investors do not embrace this exception, so double check before you make a commitment to your borrower. Marketing Tip: Let your agents know that FHA waives the 25 percent equity requirement when employer relocates borrowers to an area outside reasonable commuting distance and they want to use rental income from their current house to qualify for new FHA financing.

FHA: What are FHA’s Rules for a borrower to qualify on a “rent-to-own” option agreement? Rent-to-own agreements and / or sales transactions between tenant and landlord are affected if any family or business relationship exists between the two. There are also specific restrictions on allowable ‘rent credit’ that a landlord can apply towards down payment on the property. On a side note: VA has absolutely no rules or guidance on the subject of rent-to-own or identity of interest issues. Those situations are up to investor and underwriter interpretation. Marketing Tip: Rent-to-own is a big deal these days—so why not hold a sales meeting using these two Mortgage Talking Points™ as your guide: “Getting it Right The First Time: FHA Rent-To-Own Underwriting Rules” “Offering Rent-to-Own Option? The Road to a Conventional Mortgage Loan!” VA I have a client who is moving 100 miles away and has a VA loan on his current home. They want to use FHA financing and qualify for both payments. The underwriter says that we cannot do ANY loan for them as VA requires the current home to be owner occupied at all times? Is this true? Absolutely not!!! (Okay...I will admit that there could be ONE instance where this could be true and that is when a State Housing Agency First Time Homebuyer Program was used in conjunction with the VA guaranteed loan. Those programs have mandatory occupancy rules TheNicheReport.com

WHAT IS YOUR MORTGAGE IQ? and can call the loan due if they find out the owner is renting the home out.) VA does require, on a purchase transaction, that the home be occupied by the Veteran or spouse in order for the transaction to be eligible. (In other words, a single Veteran could not be deployed overseas and purchase a home without being able to occupy it for the next year.) Once a Veteran buys a home and has used it for his/her primary residence he/she is free to retain that home WITH VA financing, even if they turn the home into a rental. Fannie : What is the max LTV for cash out Refi--on a 1-4 family investment property and how many properties will Fannie allow? Fannie will purchase loans for borrowers with up to 10 financed properties. Cash out for investment is 75 percent and is limited to 4 properties. Properties 5-10 are not allowed to be cash-out transactions. Marketing Tip: Let your agents know that working with investors can recession-proof your business because these are the people who are buying properties these days. Mortgage Talking Points™ “Working with Investors? Know the Rules!” Compliance: I am trying to find out how to comply with LQI if new inquiry? Is the borrower’s statement enough? Or do you have to check with Creditor or credit bureau? Fannie is allowing each lender to set its own policy, but here is an example: • MERS check • Inquiry Status update – borrower explanation for all inquiries • New Report – soft report, full report, or other monitoring service • State new inquiries or none • State new trade lines or none • Update existing balances for consideration • Update MERS • Update original inquiries • New Inquiry Status update – for borrower explanation • Underwriter is responsible to reconcile with original report. Fannie requires this reconciliation to be complete – all trades and inquiries fully updated and a determination made as to how they affect qualifying. Yes, this may 34

January 2011

cause a number of delays and/or issues that can lead to the declination of the loan. The set up is for an endless loop for inquiries – if any borrower just doesn’t get the message to stop opening credit during the process…but the reality is for only one shot – if underwriter is not comfortable with the reconciliation, the loan will be denied. Freddie: Thanks for the clarification on Short Sales and Deed-in-Lieu for Fannie. I would like to know if Freddie’s rules are different? Freddie's approach is a bit different... Foreclosure, bankruptcy, short payoff, or deed-in-lieu within past seven years is considered significant adverse or derogatory info. Two categories -- Extenuating Circumstance or Financial Mismanagement • Extenuating Circumstance o Written explanation o Third-party documentation o No prior credit issues o 3yrs from foreclosure or multiple bankruptcy o 2yrs from deed-in-lieu, short payoff, significant credit lates or single bankruptcy • Financial Mismanagement o 680 credit score o 5yrs from foreclosure, multiple bankruptcy o 4yrs for bankruptcy, deed-in-lieu, or significant credit lates o 2yrs for Ch 13 bankruptcy o Must re-establish credit 24 months – must have housing payment history o Must be current on all credit (12 months) • No new derogatory public record • No 60 day lates • No more than 2 30 day lates • No housing lates • Limited revolving debt utilization o Borrower Explanation leading to reasonable conclusion that borrower has re-established an acceptable credit reputation We have created a comparison chart: “Fannie Vs Freddie: Waiting Periods for Derogatory Credit” for loan officers, processors & real estate agents. Provided monthly by www.MortgageCurrentcy.com - Interpreting the Rules and Regulation Changes for loan officers, processors, underwriters and owners/managers. Mortgage Talking Points ™, charts and checklists included.

Center sTage

Center stage with streetlinks The Niche Report talks with StreetLinks about their recent acquisition of Corvisa, CEO Steve Haslam by the niche report

What exactly does StreetLinks do? StreetLinks began as an appraisal management company; however, we’ve been expanding our business to include a differentiated suite of valuation services and lending technology solutions including BPO, intelligent automated valuation and review products, quality control solutions and Steve Haslam more. Our products and services help banks, lenders and other mortgage professionals simplify and improve their everyday business operations.

With HVCC going away, do lenders still need an appraisal solution? Absolutely. The new regulations place broader emphasis, accompanied by stiffer penalties, on appraisal independence compliance. It’s now more important than ever for lenders to take measures to ensure a non-influence environment. A proactive approach to compliance is the best way for lenders to protect their business and to create an environment that is positive for both consumers and the industry as a whole. The key for lenders is deciding what appraisal fulfillment process will work best for their organization and to choose a valuation partner that will evolve with their organizational needs.

We heard you recently acquired mortgage software provider, Corvisa. What prompted that acquisition and how will the companies be working together? Both companies were leaders in appraisal fulfillment, serving different market niches. By joining forces, we’re able to offer lenders a ‘one stop shop’ for appraisal fulfillment services. Now, we can work with any lender to evaluate their processes and resources to tailor an appraisal solution that specifically addresses their needs, whether that’s a full-service solution, a selfmanaged solution or a hybrid of both. As a result of the acquisition, we’ve changed our name to StreetLinks Lender Solutions which better exemplifies the breadth of what we can offer lenders. What is most exciting about the acquisition is the added mortgage, appraisal and technical expertise our combined team now possesses. In addition to appraisal solutions, we are now positioned to accelerate the launch of new and improved valuation and lending management products that will further improve the efficiency of our lending partners.

There are lots of companies that offer appraisal services. What sets StreetLinks apart? First, the fact that we offer the complete range of appraisal management options from self-managed software to fullymanaged nationwide services and anything in between. If a lender can imagine it, we can customize a solution that works for them. It’s something that no one else in our sector is doing. Specific to our appraisal management solutions, we do not dictate appraiser fees in our full service model. This allows us to attract appraisers that simply won’t work for other AMCs. Our IQ-Select™ assignment methodology is focused on proximity, quality, service and capacity – not fee. In addition, our manual QC review process ensures that appraisals are complete, accurate and that they meet industry/lender specific guidelines the first time they are delivered backed by the most comprehensive warranty of quality and compliance in the industry. Our self managed software is an end-to-end solution that allows lenders to self-manage every aspect of the appraisal process including integrated credit card processing, configurable TheNicheReport.com

Center Stage appraiser selection, client defined user access, management and communication hierarchies, and appraiser payables. Do you see the changes in the industry/compliance rules affecting your business? The recent regulations continue to focus on appraiser independence and fair compensation to appraisers. StreetLinks was first to market with our Certificate of Non-Influence, long before HVCC. In addition, our full service model has always allowed appraisers to set their own fees. Creating a positive, professional environment for appraisers allows us to attract the highest quality appraisers in the industry enabling us to provide the best service to our lenders. Our self-managed technology suite offers lenders a great deal more than just compliance such as improved accounts receivable and payable functionality, communication features and reporting. It’s always been about helping lenders improve and simplify processes. You mentioned that StreetLinks is planning to expand their product offerings. Can you elaborate? Lenders can already take advantage of several additional products. Our SCORe product is a comparable opinion report that gives lenders an affordable and more reliable alternative to AVM’s. We also have products that help lenders better manage their business and streamline daily processes. Our powerful business Analytics module and online Closing Calendar are stand-alone products that can also be integrated into our selfmanaged appraisal platform. In early 2011 we’re planning on launching several new products beginning with a robust, configurable BPO product line and a Quality Control module that will allow lenders to quickly build and customize automated appraisal QC processing inclusive of proprietary and lender-specific underwriting guidelines. We’ll also be launching a series of Intelligent Valuation Model (IVM) products differentiated by added data sources and improved data distillation and appraiser-based regression modeling. So what should lenders look for in a solution vendor? Lenders need to look for providers that will be partners -

not just vendors. Few lenders have the resources or IT knowledge to effectively manage a multitude of technology products and service vendors – especially ones that may not work together. It’s not efficient or cost-effective, plus it creates a change management nightmare as you grow. Ideally, lenders should look to minimize “vendors” and maximize the solutions that they get from each provider. Key things to consider are: Breadth & Depth of Service - The best solution providers can offer more than just one piece of the puzzle - whether that’s a wide range of options in their services, extra education or training, or a suite of useful lending products. Those types of value-adds will get you the most bang for your buck. Flexibility - Providers should be willing to work with you to get the right fit for your organization and not push you into a service just because they’re selling it. You should also know that their service or software can expand quickly should your staff grow. You don’t want to go through the hassle of switching providers at a time when you’ve got bigger things to focus on. Integration - Look for providers that are tightly integrated with the key platforms you already have in place, like your LOS system. This will reduce the amount of work and process change on your staff. Industry Involvement - Your providers should be invested and active in the industry. They should be up on compliance and committed to continually improving their products or services to ensure innovation and high quality.

With your focus on expansion, where do you see StreetLinks in 2-5 years? StreetLinks will continue to grow as a leading product and service provider to the mortgage community. Our reputation in the appraisal management space is and will continue to open doors for our new product channels. While many of the products that we will introduce are in the market today, we will continue to innovate and provide tangible differentiation and value to our client partners – just as we have done over the last few years. StreetLinks provides a suite of lending services and technology solutions for mortgage lenders, servicers, appraisers and other mortgage professionals. Contact StreetLinks by email at sales@ streetlinks.com or by phone at 1.877.715.8082 to speak with a solution consultant.

TIP OF THE MONTH

TIP OF THE MONTH Are the New Regulations a Form of Capital Punishment? By Stewart Mednick

commentary on how the punishment should reflective of the crime. I have been in the mortgage industry long enough to see the pendulous changes that every industry experience over time. The cycles vary in length, but every industry has them. When the cycle swings to a less favorable period in time, we, as the silly humans we are, try to alter the natural balance and change the rules and regulations to fix it, and fix it now! In the case of the mortgage industry over the last five years or so, the fix almost seems like a judges ruling in a felony crime… actually it is. The government is the judge and the mortgage originators are the felons. The mortgage banks and brokerages around the country committed heinous acts of following regulations that never existed to regulate product, protect the consumer, and minimize any Huey, Louie and Dewey from originating loans from their circular throne or the refurbished ‘man-cave.’ I hope you caught the sarcasm. I believe that the hard working, honest professional originators have been tried, convicted and sentenced to cell block A with Bubba as a cell-mate. Back in my days of active duty service in the Navy, we had an acronym for this situation: BOHICA = bend over, here it comes again! Hello Bubba! So, are the new restrictions and guidelines equal to

the crime and fair to the industry? I will exercise my right to abstain from comment but instead, provide some insight from the corrections community. A doctrine of sorts was written in January of 2006 called, “Ten Science-Based Principles of Changing Behavior Through the Use of Reinforcement and Punishment” presented by William Meyer, Sr. Judicial Fellow of the National Drug Court Institute. This is a very well researched white paper that is also very detailed. I want to touch on a couple of the ten principles. Now remember, this is science, not religious based, politically based or lobbied by interest groups funding. Sorry if that offends all the ‘rightto-lifers,’ MADD members and the Tea Party.

1. SANCTIONS SHOULD NOT BE PAINFUL, HUMILIATING OR INJURIOUS Wow, right out of the gate I see an issue with the new Dodd-Frank Act. But, let’s unveil a bit more detail first: • Certainty of sanctions does exert a specific deterrent effect on future behavior. • Perceived severity, if certainty is present, does not exert a deterrent effect on future behavior. • Exploratory studies report that … participants who perceived a more certain and meaningful connection between their own conduct and the imposition of sanctions and rewards tended to have better outcomes than individuals who did not perceive such a connection. TheNicheReport.com

TIP OF THE MONTH So, let me get this straight; if I know for a fact I will be punished for originating poorly executed loans to marginally qualified customers and they all go belly-up in three years, then that will deter me from originating. But, if I know that my actions will be punished and, moreover, basically create a living hell on earth for the rest of the hard working, honest professional originators to make a living ever again, that don’t mean nuthin to me. Hmmmm. In fact, if I do not see the immediate connection between my actions and the punishment, I may repeat the crime? So, who IS being regulated (punished) with the restrictions of the Dodd-Frank Act?

2. UNDESIRABLE BEHAVIOR MUST BE RELIABLY DETECTED • Early studies … demonstrated in a contingency management situation, abstinence must be reliably detected. • Failure to reliably detect drug use (or predatory lending) in effect puts a person on an intermittent schedule of rewards and sanctions which is ineffectual in changing behavior Can this fall under the heading of, ‘Duuuuuh!’ ‘Reliably detected’ was not preformed for over three

Take Control of Your Destiny in 2011 and Join a Winning Team – Land/Home Branch Opportunities Are Just Across the Finish Line!

Built on Knowledge, Commitment, and Trust Since 1988

years of interest only, 103 percent loan to value, pay-option ARM loans. Now comes the tsunami of regulation to change everyone’s behavior. Where was government then? Ten principles were developed in regard to crime and repeat offenders, I have quoted just two. In some way, they seem appropriate to the mortgage industry. Seems that we may all be coined as ‘offenders.’ We will be monitored. We will be accountable to law. We will be punished if we repeat offend, just like those who are in the justice system and following the laws enforced by the corrections department of your local county. The people for whom these new laws are targeted probably do not even work in the industry anymore. But for those of us with fortitude, ethics and a strong desire to clean up the business, we shrug the burden like Atlas shrugged with the world on his shoulders. Stewart Mednick is a seasoned mortgage banker and published author. His writing focuses on relationship development, personal empowerment, customer satisfaction, marketing and sales techniques. Stewart is available for marketing consulting, personal coaching and training sessions. If you have a comment or a question for Stewart, contact him at 651-895-5122 or smednick1@netzero.net.

A Team with Experience You Can Count On:

Land/Home’s Executive Management Team has a strong background and a deep understanding of the Mortgage Banking industry. They remain current and create solutions for the problems that today’s branches, and their originators, face everyday.

A Team Offering Opportunities for Growth:

Land/Home has been in business since 1988 and continues to grow through multiple origination channels by adapting to the needs of an ever changing industry. We are a Full Service Fannie/Freddie, Full FHA Eagle, and Authorized VA Lender, which enables us to customize unique programs based on location.

A Team Offering Profits for You and Your Originators:

Land/Home’s proven Branch Associate Program empowers the branch manager by eliminating excessive overhead while taking advantage of numerous Mortgage Banking Services, and gaining the advantages of being a Direct Lender.

Call today or go to www.lhbranch.com to find out how Land/Home can help you take Control of your Destiny with Our Branch Associate Program.

800.241.5263 • www.lhbranch.com branchsales@lhfinancial.com

- continued from page 28 centralbankhistory/bank.cfm. Thomas J. DiLorenzo, “What Hamilton Has Wrought,” LewRockwell. com, October 6, 2008; Online at www.lewrockwell.com/dilorenzo/ dilorenzo151.html. Gareth Davis and Senior Sophister, “The Destruction of the Second Bank of the United States Rationale and Effects,” The Student Economic Review, Trinity College Dublin, School of Mathematics, December 1994; Online at www.maths.tcd.ie/local/JUNK/econrev/ser/html/destruction. html. Ben Still, “The Secret of Oz,” 2010; Online at www.secretofoz.com. “Frequently Asked Questions, Federal Reserve System,” The Federal Reserve Board, March 7, 2007; Online at www.federalreserve.gov/ generalinfo/faq/faqfrs.htm. Milton Friedman interview with National Public Radio, January 1996. John F. Kennedy, Executive Order 11110 - Amendment of Executive Order No. 10289 as Amended, Relating to the Performance of Certain Functions Affecting the Department of the Treasury, June 4, 1963 inside John T. Woolley and Gerhard Peters, The American Presidency Project [online]. Santa Barbara, CA. Available from World Wide Web: http:// www.presidency.ucsb.edu/ws/?pid=59049; Online at www.presidency.ucsb. edu/ws/index.php?pid=59049. G. Edward Griffin, “The JFK Myth: Was he assassinated because he opposed the Fed?,” Freedom Force International, December 13, 2006; Online at www.freedomforceinternational.org/freedomcontent. cfm?fuseaction=jfkmyth Jim Lehrer, “Greenspan Examines Federal Reserve, Mortgage Crunch,”

PBS NewsHour, September 18, 2007; Online at http://www.pbs.org/ newshour/bb/business/july-dec07/greenspan_09-18.html. Mark Pittman, “Bloomberg Sues Fed to Force Disclosure of Collateral (Update1),” Bloomberg, November 7, 2008; Online at www.bloomberg. com/apps/news?pid=newsarchive&sid=aKr.oY2YKc2g. Mark Pittman, “Fed Refuses to Disclose Recipients of $2 Trillion (Correct),” Bloomberg, December 12, 2008; Online at www.bloomberg. com/apps/news?pid=newsarchive&sid=apx7XNLnZZlc. Bloomberg LP v. Board of Governors of the Federal Reserve System, Southern District of New York, August 24, 2009; Online at www.zerohedge. com/sites/default/files/Bloomberg%20lawsuit%20judgment.pdf. Hannah Bergman, “FOIA suits over bailout documents mount up,” The Reports Committee for Freedom of the Press, March 30, 2009; www. rcfp.org/newsitems/index.php?i=10677. Hannah Bergman, “FOIA suits over bailout documents mount up,” The Reports Committee for Freedom of the Press, March 30, 2009; www. rcfp.org/newsitems/index.php?i=10677. Opinion and Order Substantially Granting Defendant's Motion for Summary Judgment and Denying Plaintiff's Motion for Summary Judgment in Fox News Network, LLC v. Board of Governors of the Federal Reserve System, United States District Court Southern District of New York, June 30, 2009; Online at www.nylj.com/nylawyer/adgifs/ decisions/073109hellerstein.pdf. Hannah Bergman, “Fox loses FOIA suit against Federal Reserve,” The Reports Committee for Freedom of the Press, July 31, 2009; www.rcfp. org/newsitems/index.php?i=10939.

FOX NEWS NETWORK v. BOARD OF GOVS. OF FED. RES. 601 F.3d 158 (2010) FOX NEWS NETWORK, LLC, PlaintiffAppellant, v. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, Defendant-Appellee. Docket No. 09-3795-cv. United States Court of Appeals, Second Circuit. Argued: January 11, 2010. Decided: March 19, 2010; Online at www.leagle.com/xmlResult. aspx?xmldoc=in%20fco%2020100319065.xml&docbase=cslwar32007-curr “AIG RMBS LLC Facility: Terms and Conditions, Federal Reserve Bank of New York,” December 16, 2008; www.newyorkfed.org/markets/ rmbs_terms.html; and Jo Becker and Gretchen Morgenson, “Geithner, Member and Overseer of Finance Club,” The New York Times, April 26, 2009; www.nytimes.com/2009/04/27/business/27geithner.html?_ r=1&pagewanted=all. “Frequently Asked Questions, Federal Reserve System,” The Federal Reserve Board, March 7, 2007; Online at www.federalreserve.gov/ generalinfo/faq/faqfrs.htm. Congressman Ron Paul’s testimony inside Ron Paul, “Ron Paul vs. Bizarre Ben Bernanke,” LewRockwell.com, February 27, 2010; Online at www.lewrockwell.com/paul/paul644.html. Ron Paul, “Ron Paul vs. Bizarre Ben Bernanke,” LewRockwell.com, February 27, 2010; Online at www.lewrockwell.com/paul/paul644.html. “Regulations,” Board of Governors of the Federal Reserve System, October 21, 2010: Online at www.federalreserve.gov/bankinforeg/ reglisting.htm This is a public relations damage control measure.

Become An Power Partner. Success In Today’s Market Starts With The Power Of A Direct Lender & The Flexibility Of A Broker: Banker:

No YSP Disclosure Up To 4% SRP No Appraisal Delay 203K Specialist Reverse Mtg Specialist

This section serve to remove the Chairman of the Federal Reserve System’s Board of Governors from the Congressional inquisitions that can become adversarial and hostile, and which are aired live on C-Span. “The Wall Street Reform and Consumer Protection Act, Title XI Federal Reserve System Provisions,” U.S. Congress, June 21, 2010, Page 764. “The Wall Street Reform and Consumer Protection Act, Title XI Federal Reserve System Provisions,” U.S. Congress, June 21, 2010, Page 764 and 765. “Federal Reserve Directors: A Study of Corporate and Banking Influence,” Staff Report for the Committee on Banking, Currency and Housing, House of Representatives, August 1976. Bill McBride, “A QE1 Timeline,” CalculatedRisk, October 3, 2010; Online at www.calculatedriskblog.com/2010/10/qe1-timeline.html. Tom Hoenig, the president of the Federal Reserve Bank of Kansas City, is among them. Karen Brettell, “U.S. companies hoarding almost $1 trillion cash: Moody’s,” Reuters, October 27, 2010: Online at http://news.yahoo. com/s/nm/20101027/bs_nm/us_corporates_cash_moodys. Daniel Kruger, “Treasury Draws Lowest Yield on Record at 10-Year TIPS Auction,” Bloomberg Businessweek, November 4, 2010; Online at www.businessweek.com/news/2010-11-04/treasury-draws-lowest-yieldon-record-at-10-year-tips-auction.html. Adolph Hitler, The New World Order, 1928. This is the sequel to Mein Kampf; Online at http://hitlersdiaries.com/HitlersDiariesPhilosophy2. html and http://www.scribd.com/doc/9169285/Hitler-New-WorldOrder-1928

Buy Now! The Premiere Book On Social Media For Mortgage Finance Professionals!

Broker: Extensive Lender List Excellent Rapport With Lenders Lender Incentives Preferred Broker Service

Licensed In: CA, AZ, WA, CO, FL, HI, TX Paid Weekly Web-Based Origination Technology Professional Personalized Marketing Preferred Lender For Various RE Offices Access to Luxury Executive Suites

$19.

Get Started On The Path To Success!

888.229.4773 | www.axiscapitalgroupinc.com

For more information, go to http://MortgageSocialMediaMarketing.com/ebook

NICHE REPORTS

Agency & FHA NEW

360 Mortgage Group

NEW

Axis Capital Group Inc.

866-418-2997

Specializing in FHA,203k, Reverse. AZ,CA,CO,FL,HI,TX,WA

888-229-4773

Flagstar Wholesale Lending (866) 945-9872

NEW

Conv, FHA, VA and portfolio products. To become an approved broker or to view a rate sheet, visit our website www.360mortgagegroup.com

Icon Residential www.iconwholesale.com

United Wholesale Mortgage (800) 981-8898 ext. 5515

Offer a full array of FHA and Agency products, coupled with industryleading underwriting turn times and technology

National Wholesale Lender offering a full line of Conforming and FHA products. We offer personalized customer service where our client is our primary focus. Home of the 7 Day Paycheck. FHA & Conventional Underwriting in 24-48 Hours. Doublewide Manufactured now Available!

HARD MONEY & NON-PRIME ACC Mortgage, Inc. 240-314-0399 X 19

GreenLake Real Estate Fund, LLC 310-462-4637

NEW

Windvest Corporation 877-285-0777

B & C LENDING IS BACK. If your client has equity, we have a loan. Loan amounts 100K to 2MM. We are the final decision makers, all decisions made at our location. Private direct commercial loans in CA and NV. All property types except raw land. Our latest fund was raised specifically for loans in this tough economy. We're eager to lend, so please call today! REHAB LOANS for property investors. Direct lender on properties in So. California. 24 to 48 hour approvals. Rapid closing. Non-owner occupied. Up to 1-year term. Call for details to get your next deal approved! www. windvestcorp.com

ADVERTISE YOUR NICHES HERE WITHIN Financing may not be available in all states. The above summaries are intended for Mortgage Professionals only, and not intended for distribution to consumers, as defined by Section 226.2 of Regulation Z, which implements the Truth-In-Lending Act. Information is subject to change without notice. Refer to each lenderâ&#x20AC;&#x2122;s information on products, program, procedures, representations, and warranties for details.

TheNicheReport.com

NICHE REPORTS

COMMERCIAL GreenLake Real Estate Fund, LLC 310-462-4637

Private direct commercial loans in CA and NV. All property types except raw land. Our latest fund was raised specifically for loans in this tough economy. We're eager to lend, so please call today!

CONSTRUCTION Bismark Mortgage Company 800-350-7199 x106

Owner Builder and Spec Construction for residential AL, AK, AZ, CA, CO, GA, HI, ID, IL, IN, KY, ME, MD, MA, MI, MN, MO, NY, NV, NJ, NC, OH, OR, PA, TN, TX, UT, VA and WA.

Financing may not be available in all states. The above summaries are intended for Mortgage Professionals only, and not intended for distribution to consumers, as defined by Section 226.2 of Regulation Z, which implements the Truth-In-Lending Act. Information is subject to change without notice. Refer to each lender’s information on products, program, procedures, representations, and warranties for details.

SubScribe Today

for $19.99* (reg. $47.95) per year! ThiS could be your laST iSSue!

Go to www.Thenichereport.com to subscribe and keep The Niche Report magazine through all of 2011 *Make sure you use discount code tnr1999.

• The Niche Report Magazine

Receive each month thru 2010 & all of 2011! This is up to over12 issues!

• A Facebook Business Page by Blitzlocal ($199 value) Attract Realtor partners or potential local borrowers to fan your page. We’ll be providing Facebook ad dollars later in the year! First 5,000 subscribers only.

• The Super Star Audio Interviews ($47 per month value) ALL subscribers get access to interviews of high performing loan officers by Mortgage Marketing Animals marketing guru Carl White.

Service provider classifieds

Service Provider Classifieds Compliance & Audit NEW

Accurate Quality Control, Inc. 770-931-5999

Quality Control, Training, Consulting. Post Closing, Suspected Fraud, Early Default & Repurchase Reviews, Pre-Funding, Test Cases. 49 Combined Years Working for HUD. We do the right thing right! GIVE US A TRY: 2 FREE QC REVIEWS (new clients only)!

NEW

Adfitech Inc. 800-880-0456

ADFITECH, has served the Residential Mortgage Industry since 1983, providing Post Closing QC Audits, Due Diligence Reviews, Pre-Funding QC, Default Reviews, Fraud Investigations, Post Closing Fulfillment, and LOANVAULTÂŽ Imaging, of Conventional & FHA products. Clients include Community Banks, Credit Unions, Mortgage Bankers, MI Companies, and Wall Street Investors.

Quality Mortgage Services 615-591-2528

Mortgage Compliance Solutions, Post Closing & Default Audits, HVCC Reporting, QC Software, Federal Regulatory Audits

Waquis 310-696-9515

We provide HUD Auditing and QC on every loan type

Credit Repair & Restoration HTDI Financial 877-877-4834 opt 5

Start your own credit repair company with our state of the art tracking software and dispute outsourcing options. Top notch support by a dedicated Account Expert.

Credit-Aid Software 800-257-1192

Credit Repair Software. Credit repair business opportunity.

title work & insurance Entitle Direct 877-936-8485 or 877-9ENTITLE

NEW

Hundreds of mortgage professionals have saved their borrowers up to 35% or more on their title insurance by recommending Entitle Direct.

Linear Title & Closing 401-841-9991

Linear Title & Closing, Ltd., is a recognized leader and national provider of Closing, REO, Title Insurance and Settlement Services. Our streamlined RESPA compliant process utilizes flexible software tools that are easily integrated with your system.

Mortgage Insurance Agency 866-355-9944

State Licensed Surety Bonds, Errors & Omissions and Fidelity Bond coverageâ&#x20AC;&#x2122;s for Mortgage Bankers and Mortgage Brokers nationally.

TheNicheReport.com

Service provider classifieds

technology a la mode 1-800-252-6633 ext 309 AllRegs (800) 848-4904

NEW

Websites and marketing tools for real estate professionals

Products include single and multifamily underwriting & insuring guidelines, federal & state compliance laws and regulations, contract publishing services, policy and procedure manual templates, AllRegs Academy training programs and more

Applied Business Software 800-833-3343

Origination and Servicing software for hard money lenders.

StreetLinks Lender Solutions 800-778-4788

Providing lenders with a suite of valuation services and robust lending technology solutions, including full-service & self-managed appraisal products

DocMagic 800-649-1362

The largest dedicated loan document production company in the country, delivers a fusion of solutions guaranteed to meet today's complex loan document challenges.

marketing & lead Gen Lender 411 888-333-6628

NEW

Mailer Leads 866-783-4053 ext 14

Mortgage Leads & Internet Marketing. Sign up FREE on www.lender411.com. Check out testimonials of our existing members about the quality of our leads and the level of our service for web marketing. We are fast becoming the Gorilla in the market. Imagine having 50 prospects per loan officer that are already pre-approved calling you within 10 days from today! Our mailers are FICO and AVM based and are pre-qualified based on credit data. Prospects will be ready to finance when they call you!

Appraisal & AMC National Valuation Service 786-581-9171

NEW

StreetLinks Lender Solutions 800-778-4788

Januray 2011

Comprised of thousands of fully vetted Independent Business Owners who as Appraisers, provide valuation and consulting services in 50 States.

Providing lenders with a suite of valuation services and robust lending technology solutions, including full-service & self-managed appraisal products

Service provider classifieds

Training & education AllRegs 800-848-4904

Kaplan Real Estate Education 877-792-4523

MortgageCurrentcy.com 800-231-4787

AllRegs Academy offers online, audio and classroom training, continuing education, certifications, study guides, practical guides and customized training at your site on compliance, underwriting, servicing, FHA, VA, SAFE and more.

Kaplan is the nationâ&#x20AC;&#x2122;s leading provider of licensing and exam prep courses. We offer the SAFE Licensing Course in the classroom and live online. To help you pass the SAFE Exam, we also offer exam prep courses in the classroom and OnDemand online. Interpreting the complicated mortgage rules in plain language (Fannie, Freddie, FHA, VA, Compliance, Credit) that ONLY affect the loan origination side of the business. Help Desk. Rule Change Calendar. Automatic Face Book posts & Mortgage Talking Pointsâ&#x201E;˘ for your real estate agents. Online e-zine published 2X month. Try for $1.

Branch Opportunities

NEW

American Pacific Mortgage 866-625-9352

Join American Pacific Mortgage and become a direct lender with the option of brokering

GSF Mortgage Corporation 877-494-4448

Be in business for yourself, but not by yourself. Join GSF Mortgage's Professional Branch Network! Enjoy freedom and stability and reap the rewards

Guaranteed Home Mortgage Company, Inc. 888-572-3602

Specialized Retail Platform for Experienced Loan Officers

Land Home Financial branchsales@lhfinancial.com

Direct Lender that has been in business for over 22 years. We have prospered and grown in a climate of turbulence and change. We have adapted and helped our branches adjust to the new rules and regulations that have occurred over the last few years and helped them take control of their future in today's mortgage industry.

Sierra Pacific Mortgage 800-447-3386

Retail Branches and Wholesale Lending Nationwide. Privately owned specializing in residential conforming, FHA, VA and Jumbo. Wholesale: www.spm1.com Retail: www.spmloans.com

TheNicheReport.com

LENDER & RESOURCE DIRECTORY

360 Mortgage Group National Wholesale Mortgage Lender 360mortgagegroup.com 866-418-2997

Accurate Quality Control www.AccurateQC.com Genny Kelly or Judy Nash-Ellis 770-931-5999 GennyK@AccurateQC.net or JudyN@AccurateQC.net

Adfitech Provides Residential Mortgage Post Closing QC, Due Diligence Reviews, PreFunding QC, Default Reviews, Fraud Investigations, Post Closing Fulfillment, and LOANVAULT Imaging of Conventional & FHA Products. www.adfitech.com John Rosenhamer 800-880-0456 sales@adfitech.com

All Credit Considered Mortgage B&C LENDING IS BACK. www.weapproveloans.com National Sales Manager 240-314-0399 X 19 newloans@accmortgage.com

Januray 2011

a la mode, inc. Websites and marketing tools for real estate professionals. www.alamode.com 1-800-ALAMODE info@alamode.com

ATTENTION LENDERS!! Buyers of Distressed Debt. NicheBuyers@gmail.com

AllRegs Leading information provider for the mortgage industry. www.allregs.com 800-848-4904 help@allregs.com

Axis Capital Group Inc. Specializing in FHA,203k, Reverse. AZ,CA,CO,FL,HI,TX,WA. AxisCapitalGroupInc.Com Sergio Gonzalez 888-229-4773 sergio@axiscapitalgroupinc.com

American Pacific Mortgage Corporation One of the largest independent retail banking and branching companies in the country. www.apmortgage.com Melissa Arntzen 866-625-9352 info@apmortgage.com

Bismark Mortgage Company Residential Construction Loans. www.bismarkmortgage.com James Minarsich 800-350-7199 x106 loans@bismarkmortgage.com

Applied Business Software Origination and Servicing software for hard money lenders. www.TheMortgageOffice.com 800-833-3343 leadsmanagement@absnetwork.com

BlitzLocal Provides our clients with every tool necessary to run a profitable internet marketing campaign. www.blitzlocal.com 888-811-2448

LENDER & RESOURCE DIRECTORY

Credit-Aid Software Credit Repair Software. Credit repair business opportunity. www.credit-aid.com Barbara Starr 800-257-1192 sales@credit-aid.com

GSF Mortgage Corp Pro Branch, correspondent and wholesale opportunities. www.gsfsales.com Debbie Beier 877-494-4448 dbeier@gsf-mortgage.com

DocMagic The largest dedicated loan document production company in the country, delivers a fusion of solutions guaranteed to meet today's complex loan document challenges. www.docmagic.com 800-649-1362

Guaranteed Home Mortgage Company, Inc. Established and well-funded Mortgage Banker since 1992. www.ghmc.com and www.joinguaranteed.com Kelley Berkheiser or Louis Tesoriero 888-329-GHMC ltesoriero@ghmc.com

ENTITLE DIRECT Savings up to 35% or more on title insurance in 30 states. www.EntitleDirect.com/mortgage 877-936-8485 or 877-9ENTITLE SpecialistCenter@EntitleDirect.com

HTDI Financial Provides credit repair business options to increase revenue. www.outsourcedisputes.com 877-877-4834 opt 6 sales@htdifinancial.com

GreenLake Real Estate Fund Private Commercial Lender in CA & NV. Kamau Coleman 310-462-4637 kcoleman@greenlakefund.com

Icon Residential National Wholesale Lender offering a full line of Conforming and FHA products. We offer personalized customer service where our client is our primary focus. www.iconwholesale.com

Kaplan Professional Kaplan helps busy professionals obtain in-demand certifications and designations that enable them to advance and succeed in their careers. Through live and online instruction, we help our customers gain an edge in the mortgage industry. www.kapmortgage.com Stacey Reinhardt 877-792-4523 sreinhardt@kaplan.com

Land Home Financial Services, Inc. Our branches enjoy the satisfaction of being entrepreneurs while reaping the benefits of a wide array of services and support. www.lhbranch.com branchsales@lhfinancial.com

Lender411.com Mortgage Leads and free Internet Marketing. Sign up FREE. www.lender411.com Rocky Foroutan 888-333-6628 x11 info@lender411.com

Linear Title & Closing Title Insurance & Settlement Services lineartitle.com Nick Liuzza 401-841-9991 nliuzza@lineartitle.com

Mailer Leads Lenders and Brokers who use our mailers are not only surviving -- they are thriving. www.MailerLeads.com 866-783-4053 ext 14

TheNicheReport.com

LENDER & RESOURCE DIRECTORY

MortgageCurrentcy.com Interpreting the complicated mortgage rules in plain language. 800-231-4787

The Mod Post www.TheModPost.com 877-812-4327

The Mortgage Lender Implode-O-Meter Tracking the Housing Finance Breakdown... the WHOLE truth. www.ml-implode.com

Mortgage Insurance Agency, Ltd. State Licensed Surety Bonds, Errors & Omissions, and Fidelity Bond coverages for Mortgage Bankers and Mortgage Brokers nationally. www.mtgins.com David Jackson, President 866-355-9944 info@mtgins.com

Januray 2011

Mortgage Marketing Animals Coaching and Mentoring Group for Mortgage and Real Estate Professionals. www.MortgageMarketingAnimals.com Carl White 727-787-2275 Carl@themarketinganimals.com

National Valuation Service, Inc Comprised of thousands of fully vetted Independent Business Owners who as Appraisers, provide valuation and consulting services in 50 states. 786-581-9171 info@nvs.coop

Quality Mortgage Services, LLC Full Service Mortgage Compliance Solutions. www.qcmortgage.com Chip Langley 615-591-2528 info@qcmortgage.com

RateLink Providing mortgage professionals with timely and accurate data as a means to a competitive advantage. www.ratelink.com 800-938-5193

Sierra Pacific Mortgage Retail Branches and Wholesale Lending Nationwide. 800-447-3386 info@spm1.com

StreetLinks Lender Solutions Providing lenders with a suite of valuation services and robust lending technology solutions, including full-service & selfmanaged appraisal products www.streetlinks.com 800-778-4788 sales@streetlinks.com

Waquis We provide HUD Auditing and QC on every loan type. www.waquis.com/qc Joe O'Neill 310-696-9515 joe@waquis.com

Windvest Corporation Hard money lender, specializing in Rehab Loans. www.windvestcorp.com Andre Jimenez John Ermin 877-285-0777 andre@windvestcorp.com john@windvestcorp.com

BRINGING UP THE REAR - continued from page 50

true. Like when they go into that incessant drumbeat about reducing the deficit being the country’s number one priority, even though you’d be hard pressed to find a hundred people in the streets of any major U.S. city that would pick that for our top priority off a list of alternatives. So, here we go… Mitch McConnell and his GOP pals proceed to block anything that might make our lives better for the next 18 months, after which time we’re not going to do anything but return to the moronic mudslinging on Fox News, which will be in its fear-mongering glory by that point as they point out all the ways Americans are either circling the drain or have already gone down it. Because by that time we will be two years worse off than we are now, unemployment benefits, assuming they are extended for 13 months this time, will have provided recipients with enough money for bread and water, we will have lost another five million homes to foreclosure and even the reported unemployment rate will be solidly in double digits. Now, close your eyes and picture what you know it’s like today all over America and imagine that everything that’s keeping you up at night now, at least on occasion, is two years WORSE than it is now. Your house that had already lost much of its value, has dropped another fifty grand, not that it matters because there aren’t anymore people left in this country who have 860 FICO scores, 30% down payments saved up, who don’t already have the homes they want and aren’t worried about losing their jobs. So… whose running for President in 2012… or, the better question might be… who isn’t running, because economic times as I’ve just described lead to things like the Tea Party… Ron Paul… Ralph Nader… can you say “H. Ross Perot in 1992?” The Republican primaries stage a debate with 12 hopefuls on stage… everyone from Sarah Palin to Mitt Romney… to Bobby Jindal… to God only knows. The Christian Right doesn’t like one side, and the Tea Party can’t stand the other. For a single candidate to emerge victorious, he or she would need to be a conservative-populist-Christian-WallStreeter-Deficithawk-Pro-Military individual who claims to be committed to stopping the wars still raging in Afghanistan and Iraq, while preventing Iran from building nukes, that is friendly to the global concerns of China and the G20, and has a vision for lowering taxes without increasing the deficit. If you thought McCain had problems last time getting the support of his party, this next time out is going to be indescribable. Of course, Obama is running for reelection in 2012, and he’s out on the campaign trail touting accomplishments like health care and financial reform, trade deals with South Korea and the like, and sniping at Republicans for standing in the way of change. Want to know what happens? The election is a three or maybe even a four-way race, a’la 1992. The Tea Party candidate actually manages to win 10 percent of the Republican vote, and Ron Paul or at least a reasonable

facsimile wins another 12 percent. The main stream Republican, who has had to try to please so many masters that he’s got enough holes in him to do a pretty good Swiss cheese imitation, has become the party’s choice because he or she is the banking industry’s favorite. There’s an Independent candidate as well, siphoning votes from the middle that is so totally disenchanted with Obama that’s they’d rather vote for Dubya again. And as the dust settles, Obama wins his second term with 34 percent of the vote, as the Republicans keep control of the House, and the Senate officially becomes the political equivalent of the 1960s children’s television program, Romper Room. Oh sure, Obama’s approval rating is 28 percent, and no president has ever been reelected with unemployment over 10 percent, but it doesn’t matter because the alternative candidates have either destroyed each other during the campaign, or were just plain too nutty to begin with to win a national election. And unless Obama is caught having sex with Bill Clinton under the desk in the Oval Office, and then lies about it on national television, he’ll get 35 percent of the vote from the youth, inner city, college, and dyed-in-the-wool Democrat crowds, and that’s all he’ll need in the sort of open field race that will result from our economy being that much worse 18 months from now. Mitch McConnell, who doesn’t come up for reelection until 2016, will be sporting one of his stupid deer-in-headlights looks as he tells the cameras that the Republicans are prepared to work towards bipartisan solutions to the nations problems and that what we need are further tax cuts. But Obama, now safely in his second terms can’t stop picturing McConnell in a clown suit as he watches him bemoan the election’s outcome. Yes, it’s 2012… roughly five years into our Great Recession, if we’re still calling it that positive a euphemism. Obama is back for another four years, absent any real mandate, and with a completely dysfunctional legislature, as he stares at the worst U.S. and global economy ever. At the end of his second term we will be wrapping up our first “lost decade,” and hoping for the sort of recovery we had back in 1936. Obama’s first priorities will be to stabilize our nation’s financial institutions, who by then with every third or fourth house in or near foreclosure, will need to be bailed out once again… and the passage of an economic stimulus bill that will put Americans back to work. Oh yeah, and something about reducing our dependence on foreign oil with green jobs, education, and infrastructure… and bridges… I’m thinking we’ll need to fix lots more bridges. It’s a fate accompli, I’m afraid, because Mitch’s plan is already set in stone and underway. And, since I will likely be drinking heavily most days when all this happens, I’d better congratulate him now… Nicely done, Mitch! Crackerjack work, as a matter of fact. Laissez les bon temps roulez! TheNicheReport.com

BRINGING UP THE REAR

Senate Minority Leader Mitch Mcconnell BY MARTIN ANDELMAN

lmost as soon as the polls had closed this past November and the midterm elections were behind us, Senate Minority Leader Mitch McConnell (R-KY) stated that making sure that Obama is a one-term president was the GOP’s most important priority. Well, first let me state the obvious… McConnell is a knows nothing. If the United States Senate has a Human Resources department, someone needs to get this guy a copy of his job description because he’s completely lost touch with what he and all of our other elected officials are sent to Washington D.C. to do. I know that a politician’s job is to win elections, but no one elected Mitch or anyone else to work in opposition to the best interests of the American people. And don’t start accusing me of being a member of the “Obama Fan Club,” because I’m not. Obama has proven himself to be a terrible crisis president. He has single-handedly managed to take what was unquestionably an inherited economic disaster on the scale of The Great Depression, and make it, not only his problem, but also his fault. He went from being a man of the people, to being the best friend Wall Street could ever have hoped for, and for that the Republicans accuse him of being a socialist, while the left accuses him of being too much the centrist who has turned his back on their progressive agenda. He makes seeking bipartisan consensus look like a pathetic need to be liked by everyone at school. It’s flat-out dizzying to watch, and makes John Stewart’s job on The Daily Show far to easy. But McConnell and the GOP have made it clear that they

will spend the next two years blocking anything that has even the slightest potential to make Obama look good in 2012, regardless of the impact to the American people. It would seem that the brain trust over at the GOP actually believes that even if Americans are starving in the streets come 2012, it’s a good thing for them. Obviously, what we have here are some low three-digit SAT scores at work. Let’s play it out and see where the GOP’s strategy is headed. As I write this, the Obama Administration has all but finalized a so-called compromise that will extend the Bush tax cuts for Warren Buffet and Bill Gates in exchange for extending unemployment benefits for another 13 months. It’s either that, or something like six or seven million people in this country will soon have no income as they struggle to survive in our depressed economy that hasn’t even begun to replace the tens of millions of jobs lost over the last few years. I don’t want to play economist here, but that doesn’t sound like it will lead to an increase in consumer spending does it? Or am I missing something here? At the same time, extending the Bush tax cuts for those with annual incomes over $250,000… which is about one percent of the population, by the way… besides increasing the deficit, will do what exactly? The Republicans want me to believe that we need to keep the tax cuts in place because of something about small business owners creating jobs and rich people trickling down their good fortune on the rest of us, but that hasn’t happened for the last ten years, so what the heck are they talking about? It’s as if they think that by repeating something they heard Art Laffer say during the Reagan years over and over again, it makes it - continued on page 49

Januray 2011

e h t ke Become part of GSF Mortgage’s Professional Branch Network

Becoming a GSF Pro-Branch grants you access to many of the services that may not be obtainable in your current environment. GSF offers total support: Payroll Accounting Compliance Marketing Processing Lead Generation State of the Art Technology Free Education & Licensing Live Securities Pricing On Staff Legal Counsel GSF Mortgage approved for: FHA VA USDA Freddie Mac Fannie Mae Seller Servicer Jumbo Non-Conforming Reverse Mortgages 203k

Be in business for yourself, but not by yourself. Join GSF Mortgage’s Professional Branch Network! Enjoy freedom and stability… and reap the rewards!

Contact our Client Relations Manager 1-877-494-4448 www.gsfprobranch.com • Signing Bonus for Branch Managers • Retain 100% of Your Commissions (Absolutely NO file fees, NO splits)

GSF is licensed in CO, DE, DC, IA, IL, IN, KS, KY, MA, MD, MN, MO, NC, ND, NE, NH, PA, SD, TX, VA, WI, WV Adding more state licensing monthly.

BODA Publishing, LLC, PO Box 494,Bentonville, AR 72712

PRSRT STD U.S. POSTAGE

PAID

PERMIT #379 BOLINGBROOK, IL

"TheNicheReport is a national trade publication dedicated to wholesale and correspondent lending."

Increase your Pipeline with Advanced Lead Generation…

Integrate the power of FICO based Direct Mail with Personal Websites (PURLs) According to a recent DMA study, more than 42% of interested direct mail recipients prefer to respond online. Most direct mail campaigns neglect the large percentage of recipients who prefer to respond other ways. Not only will you get our industry leading call-in response rates — you’ll also generate a new and more responsive internet lead by presenting a customized offer on a secure website. Since this internet lead goes directly to you, there’s no competing with 5 lenders.

Introducing… Our web based Marketing Campaign and Lead Management System allows you to focus on your strength — closing loans. Our system is simple to use and gives you real time tracking on every part of your direct mail campaign — from USPS mail delivery to lead call-in to closing.

Lead Dashboard

Call Tracking Dashboard

ClientClickingTM Dashboard

Mail Tracking Dashboard

For a quote go online: www.MailerLeads.com/quote or for a demo call 1.866.783.4053