Issue 051 October 2011 TheNicheReport.com
For Mortgage Origination Professionals
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Plan Your Business or plan to fail.
FEATURE ARTICLE! Industry Trends Expansion in a contracting market.
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Industry Trends Expansion in a contracting market.
NICHE REPORTS prime & FHA Commercial REVERSE MORTGAGE Construction/Rehab HARD MONEY JUMBO Service Providers
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FOUNDER & PRESIDENT Robert Pegg email@example.com CO-FOUNDER & PRESIDENT David Pegg firstname.lastname@example.org
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Plan Your Business Sue Woodard President, Mortgage Success Source Or plan to fail.
Center Stage with a la mode The Niche Report The Niche Report talks with Executive Vice President of Products Jennifer Miller
Networking to the Rescue Gary Opper President approved financial corporation Shake a hand a today.
Online Lead Generation Rebekah Radice loan officer and mortgage industry speaker Seven simple steps to build and promote your Facebook fan page.
What Processors Aren't Telling You Amie Wills Independent Loan Processor An ounce of prevention ...
MANAGING EDITOR Stewart Mednick email@example.com EDITORIAL / CONTENT MANAGER Kristen Moser firstname.lastname@example.org
note from the founder
shh ... frank & brian speak
What's your mortgage IQ?
LENDER & RESOURCE DIRECTORY BRINGING UP THE REAR
ACCOUNTING MANAGER Shawna Ingram email@example.com Advertising Director Jessica Grizzle Jessica@thenichereport.com Advertising sales Heather Bopp Heather@thenichereport.com Production Manager Henry Suchman firstname.lastname@example.org Production Assistant Dawn Exner email@example.com Cartoonist Martin Bradford COLUMNISTS & Contributing Authors Martin Andelman Karen Deis Chris Jones Frank Garay Gary Opper Rebekah Radice Brian Stevens Matt Strickberger Amie Wills Sue Woodard
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ICO is just one of many factors in evaluating & underwriting loans. We, at PaciďŹ c Union Financial Correspondent, oďŹ€er you access to Fannie and Ginnie Mae guides.
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note from the founder
The theme this month is Industry Trends and Chris Jones writes the Feature article titled Industry Trends: Expansion in a Contracting Market. It’s a philosophical piece based on where our industry is headed and how we can take advantage by growing our business while others are leaving due to increased barriers of entry to being a Loan Officer. While our industry has been contracting over the last few years, it’s important to know that the barrier of entry for doing YOUR job is higher than ever and the folks who are left originating are in even greater demand. In fact, according to CareerCast. com, the Loan Officer is ranked the third most “under-rated” job in the country; Shhh … let’s keep that a secret. This issue should also be called “Women Who Kick-Ass.” That’s because a good portion of this magazine is made up of content from four super stars from our industry – Sue Woodard, Rebekah Radice, Amie Wills and Karen Deis (monthly columnist). Sue, who is a sought after speaker, writes on the importance of planning your business. Anyone who knows Sue will realize this article carries wise advice for those looking to dominate in 2012. Rebekah, who is a consummate professional and a social media guru, writes on seven simple steps to build and promote your Facebook page. Karen, a mortgage marketing maven and industry icon, brings us our monthly column titled What’s Your Mortgage IQ, a staple to this magazine. And Amie, an independent contract processor, talks about the importance of a clean loan file. Martin Andelman is in rare form this month. Make sure to check out Bringing up the Rear at the end of this issue. It is heart breaking. Martin wrote this column with a feeling of personal responsibility. Martin – we love you brother, this was not your fault. You can only do what you can do. Keep up the fight!
Plan Your Business ... or plan to fail
by Sue Woodard
ost people spend more time planning a single week of vacation than they spend planning for their entire business year. That staggering fact may also be why there are so few truly successful people in this world. Truly successful people are not fashioned by chance or luck, but by the ability to plan their success. It is that laser focus – that attention to detail, and the unwavering commitment to plan and execute – that ultimately results in measurable success. Unfortunately, many once successful mortgage loan originators were dealt an unfair deck of cards because they did not have a plan. Most are business veterans that came into the business during very different circumstances – but then the economy crashed, the housing market plummeted, regulations became stricter and compensation changed. When times are good and interest rates are low, mortgage loan originators are lulled into a false sense of security that leads them to believe there is no need to have 10
a long-term plan for success - success will come on its own. But over the last few years we all began to understand the magnitude of the adage, “If you fail to plan, you plan to fail.” The days of the easy buck are over. The market has changed. This is the moment of truth where the professionals are separated from the amateurs; where those who have a real game plan will be the ones who succeed.
Why Develop a Business Plan? Author and former CEO of General Electric Jack Welch poses a very important question in his best-selling business book, Winning: “How can you and you and your team get to the finish line, if you don’t know where the finish line is?” The loan originator that has a written business plan as a roadmap to follow is the one who ultimately achieves success in any market. If a mortgage loan originator wants to progress and have an edge over his or her competition, that originator must sit down and create a plan as a guide throughout the next year. Begin with the end in mind, and establish what
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strategies you must execute to get to that finish line and win.
The Three Phases of Planning There are essentially three phases to business planning, and all can be compared to the flight elevations of an airplane. Let’s explore the 50,000-foot level, the 25,000foot level and the runway. The 50,000-foot level is the big picture. The loan officer should have an understanding of the following: • How much money you want to earn in the upcoming year, • What that equates to in terms of units and dollar volume, • How many leads you’ll need to generate, • What your conversion from lead-to-closed loan must be, and • How much money you’ll need to allocate for your own self-growth and marketing endeavors. Many loan originators go through this exercise at the end of every calendar year, and it is certainly the first
step to business planning, as well as a very valuable and important step. Unfortunately this is where a lot of people stop in their planning process, because they misconstrue defining a goal with achieving success. It’s like driving down the highway with blinders on and not being able to see where the end of the road is. You still have to calculate how you’re going to get there. The next move is to drop down to the 25,000 foot level, to the second phase of planning. This is the assessment phase, where you will identify your strengths and weaknesses. • What personal strengths can be leveraged as areas of opportunity? • What specific areas of your business do you know you need to improve? • What macro-disciplines will you need to put in place during the year to ensure that you will actually reach your goals? • What new skills do you need to develop? • What education, training or tools are needed in today’s market?
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During this assessment, you will focus and understand what needs to take place to reach your desired goal. This brings us to the third phase of planning, the runway. This is where the “rubber meets the road,” and the actual execution of the plan takes place. • Practical action steps should be placed within a timeline over the duration of the business plan. At least 50 to 100 action items should be defined, with one to three each items per week scheduled into your calendar over the 12-month period.
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• Develop an accountability partnership with someone. Tell them your goals, and what you are going to do to accomplish them. • If you have a team, meet with them to discuss the plan. All team members should have a clear understanding of how this plan will benefit everyone involved. This creates team buy-in, and from there, you can delegate action items. • A standard weekly review process should be set in place to monitor the plan and stay on course for all objectives. • Measure your results, and adjust course as needed.
Take the Plunge into Planning In today’s challenging market, it is critically important to create a business plan that encompasses all three levels of planning – from 50,000 feet straight down to the runway level – if you intend to be a long-term player in this game. Breaking down broad goals down to finite action items can seem like a daunting task, but it will result in daily, weekly and annual success…that lasts for a lifetime. Create a personalized, hands-on business plan
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Sue Woodard President of Mortgage Success Source, has held many different roles during her nearly twenty years in the mortgage industry. A highly sought-after international speaker, trainer, writer and consultant for the mortgage and real estate industries, Sue and her top-producing team maintain a profitable and thriving origination practice in Minneapolis, Minnesota. Sue had her own successful financial radio show, has been featured on NBC and CBS Live News Radio, and has also been a guest on CNBC's SquawkBox and Jim Cramer's Mad Money. She is a member of her local Mortgage Association and Board of REALTORS® and the Women's Council of REALTORS®. She has a teenage daughter...and firmly believes that sleep is overrated.
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Industry trends: Expansion in a Contracting Market By Chris Jones
here did we come from? Why are we here? And where are we going? These questions have haunted mankind from our earliest days. And since this isn’t an article for Christian Business Daily, I’m afraid we’re going to have to remain haunted about the first two questions for a bit longer, because we’re not answering those today. What we are going to talk about, though, is where we’re going. Despite the apparent wishes of the federal government, we are not going to Hell. And we are not going away. So that’s two possibilities down. There can’t be too many more, right? Au contraire. There are literally thousands of possible paths for the industry to go down, and sorting out which ones are likely and which not is not just an esoteric exercise, not a barbershop argument without consequence. If you can see where things are headed, and get there first, when the wave reaches you, you end up riding the crest. That’s a good place to be. Herewith, then, what seem to me to be four likely roads down which the great eighteen-wheeler of mortgagedom is headed: 1. More regulation. Count with me now. HERA, HVCC, Appraiser Independence, HMDA, GFE, TIL, NMLS, UAD modified, CFPB, Fed, HUD, FHA, VA, FNMA, FHLMC, FHFA, OFHEO…and those were only the ones
I could remember off the top of my head that had been instituted or reformed or created or given new regulatory oversight of the mortgage industry in the last 5 years. Around here, we started saying the pendulum had swung too far on regulation… back in 2007. So let’s just realize the string on that pendulum has snapped and we’re headed toward increasing regulation for the remainder of our lives. It will be much simpler. Seriously, there is one thing that makes increasing regulation all but certain, and that’s the creation of the Consumer Financial Protection Bureau. I suppose it could be defunded in the austerity packages that are definitely coming to a government near you, but it seems unlikely. One does not create a huge new federal agency and then give it no work to do. Since the work of these agencies is regulation, expect a blizzard of it. It’s how salaries are justified and budgets procured. 2. Rate volatility. Time was, mortgage rates hung out for months in narrow ranges; now it is not even unheard of for rates to change .25 percent in a day. This isn’t a temporary trend. We have several powerful forces working in various directions on mortgage rates, and they cannot all be reconciled. The tension between massive government printing of money – which means inflation – and extreme economic fragility – which means “flight to quality”, or in other words, “buy bonds”, is increasingly unstable. As I write this, economic fragility is winning, and rates are at ridiculous (and unsustainable) levels. But the minute it looks like there is any sort of economic recovery, anywhere in the world, inflation will be ascendant and rates will explode to the upside, all Fed intervention notwithstanding. Be prepared. 3. Corporate contraction. Over the past few years we’ve seen the exit of more than 75% of the mortgage lenders, wholesale banks, brokers, and loan originators from the market. One of my favorite measurements of the diversity in the industry is the size of mortgage magazines. Using just one that shall
go nameless, in June 2006 it was a small book of 144 pages. The last one I got had 24. Since, in general, ad revenue is what determines magazine length, that tells me there has been a huge disappearance of advertisers, not that I couldn’t tell that just from my own experience. This is linked to #1 above. Regulation is a tax. It is an increase in the cost of doing business. The more taxes rise, the more regulation there is, the more it costs to have the necessary people to perform the paperwork. The more those costs rise, the harder it is for the small player to afford to continue, and the more small players will look for behemoths to ally themselves with. Once I was a single-originator brokerage, with 30 broker channels for my loans. That’s essentially impossible now. So right along with increasing regulation you get increasing contraction in the industry. Innovation is where you get small players taking on the big boys, but since product innovation is difficult in a regulated environment, and since this is a spectacularly regulated environment, expect the Bank of Americas to get bigger, and Joe’s Mortgage to join or die. Of all my forecasts, this one hurts me the most. 4. Service distance/degradation. Increasing costs from regulation, increasing contraction in the industry means decreasing profits and more people doing more work in less time. It means call centers in India. It means a declining level of service and personal attention from originators, processors, servicers, underwriters, correspondents, banks, you name it. Large corporations are famous for their inattention to detail and crappy service, and more large corporations is exactly what we have now, and are getting more of. You can feel it already. It’s going to get worse. The economics demand it. 5. Mounds of spam. This is a connect-the-dots, so stay with me. The latest figures showed home purchases had declined to 15-year lows. We’re talking about loan volume now not seen since the 1990s. As the pie shrinks, the squabbling over the remaining pieces grows. Rates are low and the refinancing cannot
go on forever. Large companies will spend their money going after the shrinking pool of borrowers, and they’ll do it the way they always do it – by spamming everything in creation. More junk mail, more email, more billboards, more TV, more radio. More noise. Hey, it’s what they do. Now, these are fairly pessimistic forecasts, all taken together, and I wouldn’t blame you for thinking that perhaps it might be time to start doing iPhone apps for a living instead. But don’t do that. The Niche Report caters to a particular, entrepreneurial, even edgy segment of the industry, and it would surprise me if this segment would take the above lying down. Fighting the government having proved largely ineffective at this point, and global macroeconomic trends being essentially unaffected by our prayers for relief, it falls to us not to alter the above, but to capitalize on it. How, you ask? Well. Good question. And your answers will be better than mine, but I have some. First, how do you capitalize on an increasingly regulatory environment? You get specialized. Good loan originators do not do well when encompassed about by legions of red-tape spewing bureaucrats, so pull a fast one and have someone else stand there to do battle with the Minions of Evil. Instead of trying to do it all yourself, get someone else to handle the mundanities of
HVCC compliance and NMLS registrations. You go sell loans. Frankly, I’ll be shocked if there aren’t startups already advertising a-la-carte compliance and regulatory monitoring for small broker shops. Seems an idea whose time might have come. What about rate volatility? Dealing with that is actually not that hard. There are even some very interesting marketing opportunities available here. You’re certainly familiar with the companies that make their money transmitting rate forecasts and market statistics to loan officers and originators. Where are the companies that are delivering that content to borrowers? I mean, besides us, doing it onesy-twosy. You know what volatility means to a borrower? Stark, naked terror. They not only can’t do anything about the market as a whole, they don’t even know how to interpret what’s happening. Don’t let your people get that info from MSNBC. Give it to them yourself. Understand it, know it, and deliver it. There are opportunities there. Corporate contraction? Well, there’s power in numbers and great wealth, and those boys have that in abundance. Do your homework and find companies that have the broadest reach but offer the most flexibility to you, giving you the best of both worlds. Contraction, though, also means departing loan officers and diminishing competition. There are millions of people out there – actually millions – whose old loan officer
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is now working at WalMart. When the industry contracts, it leaves huge amounts of market share for the vigilant and the aggressive. Now is the time to gain it, and there will continue to be those opportunities for the foreseeable future. I probably should add a word here about recruiting as well. It isn’t just loan officers that are leaving the industry; mortgage companies are doing that, too, and in some cases they’re leaving their loan officers high and dry, with no place to go. There are significant opportunities out there for companies that are good at attracting quality people. Expansion in a contracting market? Why not? The antidote for crappy service and spam is the most obvious of all. If the industry as a whole is moving to antiseptic, cookie-cutter communication and one-size-fits-all loan programs, there will be great opportunities to stand out from the crowd. If the industry moves away, you close in. Move into closer proximity to your clients and potential borrowers. Don’t chase deals; create them. Instead of shouting marketing slogans at people who search “mortgage rates” on Google, work with people that aren’t even looking for a loan yet. Teach them, educate them, provide them value and information about the process and the market. This seems to me to be perhaps the greatest opportunity, the largest and most underserved market in the mortgage world – the tens of millions
of people that should want to move, to buy, to restructure their finances, but who don’t know it because they don’t have the information to know what they want. McDonalds doesn’t wait for you to decide you’re hungry, they show you the food so that you will be. Go, and do thou likewise. People still love buying houses; they just don’t know how, and they’re scared. This is a problem we can fix. So despite the early tone of this article, despite my pessimistic forecasts for the direction of the industry, I actually think there’s never been a better time to be in the business. I’m feeling more positive about what I can do to create great value for my clients than I ever have. Hey, back when anyone could get a loan any time they wanted, who needed us? But now, now they need a professional. Professional is what we are. We’re good at this. And the time has never been better for us to prove it. Chris Jones, branch manager with City First Mortgage Services, is a nine-year industry professional in brokering and banking, with a background in financial services, national politics and Main Street entrepreneurialism. He is the author of the forthcoming book The Six Channels of Marketing, available in January. Chris lives in Lehi, Utah, with his wife, Jeanette, and their eight children, and can be found at www.lehimortgages.com, email@example.com or (801) 850-3781.
Networking to the Rescue Shake a hand today
By Gary Opper
n important part of business has always been the meetand-greet. Introducing yourself and shaking hands was a significant way of obtaining business. This year, mortgage professions will find that this method will become more effective to them than ever before. Due to the current state of the economy, mortgage professionals will find themselves relying on their associations and business contacts to locate qualified clients. This article will explore six tips that can help ensure you are a networking natural.
BE COMMITTED With anything in life, to be a success you must fully commit to the process. Make the decision that you will give your complete effort to becoming a master of networking and successfully build your list of connections. In order to achieve this goal, you should attend at least one event or networking affair weekly. 22
This will optimally ensure you are meeting a number of new contacts that can be added to your database. It is also a good idea to block out some time from your schedule so that you can pursue those networking leads. Also, a very important key to networking is always having your business card handy. Make sure to take plenty with you wherever you go. Additionally, when mailing out a business letter, include two business cards â€“ one for them and one to hand to a friend.
BE CONSISTENT Through consistent attendance of networking events, you will see success. Give the eager impression by showing up early. That way, you are sure to meet everyone that walks through the door. Try to meet as many people as possible by working the room. When speaking, indicate what you do. Be honest in your discussions and offer expectations on which they can rely. MAKE A LASTING IMPRESSION Make a lasting impression by creating a 60 second pitch of yourself. Be sure that your pitch is clear and concise. Highlight the most important information and
Are you sure you’re ready for the GSEs’ appraisal XML mandate?
This year, the GSEs will require full appraisals in MISMO XML 2.6 format. If you’re relying on PDF extraction to get the XML, your process will fail. It’s not a question of “if” PDF data extraction and scanning will fail. It’s how often, and how much it costs you. And the answer isn’t good. Do the math: The URAR form alone has over 1000 fields. Even at 98% fieldlevel accuracy, 20 or more fields will be corrupted. Some of those will be critical, and so your pipeline will stop due to bad data. You might not notice it today, because PDF extracted appraisals aren’t subjected to rigorous data analysis. But they will be, and many won’t pass. The solution? Demand “Native XML” appraisals. No conversion, no extraction, no excuses. Just clean XML straight from the appraiser’s desktop software. Then you get exactly what they typed, even on every kind of odd form or addendum. PDF extraction just can’t do that. We’re certain, because we create, transmit, analyze, store, and manage more appraisal data than anyone on Earth, including the GSEs. So when we tell you there’s a problem with PDF extraction, believe it. Protect yourself by downloading the free “MISMO XML 2.6 Appraisal Checklist” from our website. It’s a vendor questionnaire that helps you set policy now for the coming regulations. Whether you use an AMC or manage appraisals inhouse, it ensures a 100% native XML process free of pipeline problems — without changing vendors, or even paying us a dime.
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don’t offer mixed messages. Having a nickname might set you apart from your colleagues. It will also make it easier for people to remember who you are. By introducing yourself with a catchy name such as (Your Name), “Mr. Mortgage” you have created something memorable that will linger with them throughout and after the event. In addition to your namesake, give consideration to the development of a catchy phrase that you can use to end every meeting you have made with a new contact. Consider closing with a quote like Laertius’, “Time is the most valuable thing a man can spend.” This may not be your style, but find something that suits you. The object is just to leave a lasting impression.
FOLLOW UP WITH YOUR FINDS You may already be familiar with the previous recommendations, but this year it won’t be enough to help you succeed. It is even more important now to follow up with the people you met. When you are at an event, spend some time collecting people’s business cards. To help keep their identities fresh in your mind, find out something of interest about them. In the following days, send a note to the individuals whose cards you have gathered. Reintroduce yourself and provide them with your CV so that they can see your qualifications. If you have a good lead, be sure to phone them within a week of sending out your note. This is the optimal opportunity to make the person aware that you enjoyed meeting them and that you’d like to set up a lunch, breakfast or coffee get together. Setting up a one-on-one meeting is important in order to turn your new contacts into clients. At the meeting, you should express your desire to work together and let them know how it will be mutually beneficial.
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Keep in mind to speak to these individuals as though you are making a new friend and not trying to get a sale. By focusing on a friendship, the sales and the referrals will come.
PERSEVERE It is common knowledge that trust takes time and patience. Those that are new to networking, don’t be quick to get frustrated if you do not immediately receive new business. Often, an individual will prefer to size you up before stepping into business with you. Being consistent and committed while offering a lasting impression will surely spark an interest and send business your way eventually. GET ACTIVE For additional networking opportunities, look into various industry related associations. They host meetings and are often looking for speakers. If you are a comfortable presenter, offer to speak to the association about a related topic. It may even be of benefit to become a member of these organizations. Additional avenues to pursue are chambers of commerce. Their main goal is to foster business growth in their communities and, therefore, will offer a variety of ways to network. Networking opportunities can be found in almost any town or city. Finding the associations nearest to you will be of great benefit. Spend some time organizing your networking plan and make it happen. Shake a hand today!
Gary Opper is President of Approved Financial Corporation, Weston, Florida. Approved Financial Corporation is a licensed mortgage lender. Mr. Opper has been a Mortgage Lender and Note Buyer since 1984. He is the Managing Member of Levie-Opper, LLC, a mortgage fraud litigation support firm. He was named the NAMB’s “Writer of the Year” and “Featured Writer of the Year” and the FAMP’s “Broker of the Year.” Mr. Opper is available to speak to your group. Please contact him to arrange a speech for your event. He may be reached at (954) 384-4557, fax: (954) 384-5483, or e mail: Opper@ApprovedFinancial.com.
W E ’ RE A LL T H E SA M E
As a leader in the Mortgage Insurance industry, we’ve decided it’s better to reinvent than merely recover. So we’re changing the way things are done. Starting with a new approach to risk management that’s fair and responsible, as well as proﬁtable. It’s designed to lead customers like you to a successful future built on solid ground. To ﬁnd out more, visit UGDIFFERENCE.COM or call 800.334.8966.
United Guaranty is a marketing term for United Guaranty Corporation and its subsidiaries.
online lead generation
Seven Simple Steps to Build and Promote Your Facebook Fan Page
ith over 500 million users, Facebook is now used by 1 in every 13 people on earth and of those people; the majority are now spending more time on Facebook than watching TV. With statistics like that, is it any wonder that more than 3 million businesses have moved their marketing dollars to Facebook. If you haven’t created a Facebook Page for your business yet, chances are your competitors have. However, the thought of creating a Facebook page can leave you paralyzed with fear. Where do you start, what do you say and how do you promote your page and find friends or fans? Things You Need to Know Before Getting Started Your Facebook business page will be attached to your personal page. In other words, you cannot create a page until you have set up a personal Facebook account. Once you’ve done that you are able to create an unlimited number of Facebook pages. Your Facebook page is also public which means fans can easily find your business and so can Google. Your page and posts are indexed giving it the beloved “Google Juice” we’re all looking for. 26
Facebook in 7 Easy Steps Let’s begin with a brief summary of what Facebook is all about. Facebook is designed to get you and your brand in front of as many eyeballs as possible. The problem with most businesses is that they jump in without a plan. As Realtors, it may be exciting to hop on the Facebook bandwagon but without clearly defined goals and a system to track your progress; your enthusiasm may quickly fizzle. Your goal should be to create an engaging page that gives your fans a reason to seek you out on a daily basis. Create a Page Your first step is to generate your new page. To begin the design of your new Facebook Page, you will need to add a business page to your current profile. I’m not going to dive into the step by step instructions, but you can find them under Facebook Page guidelines. Create a Custom Welcome Page Facebook gives you the ability to create a custom page or mini website within your Facebook Page. You are then able to direct all new fans to this page where you can promote your business, give away a freebie, host a contest
online lead generation
or request that they sign up for your free newsletter. This is one area you need to get your creative juices flowing and determine what “item of value” will draw fans in and get them to click the LIKE button. Video is always a BIG draw. Check out the great job my friends Frank and Brian at Think Big Work Small have done with their Facebook Welcome Tab. Important Side Note: Since Facebook discontinued their support of fbml (Facebook’s answer to html), building an iframe site can be a little tricky. But don’t worry; there are simple ways to get your page up and running in a jiffy.
Design a FREE Facebook Landing Page • If you have admin rights to your Wordpress blog, you can add the Facebook Tab Manager plugin which allows you to edit and customize your page within your Wordpress blog. • Wix Facebook Page • Pagemodo • Wildfire Facebook IFrame App Add Content Before You Promote Your Page This idea is based on the theory that it is better to offer an enormous amount of value and build loyalty within your fans long before you ask for their business. Make sure you have several posts up before making your page public. Not sure where to find content? Here are a few ideas to get you started: • Blogs/Articles You Have Written (you probably have hundreds to rotate through) • News Resources (local and national newspapers with tips, tools and how-to’s for buyers and sellers) • Announce a Sales Event or Promotion • Give Away a FREE E-Book or other item of value • Offer how-to advice that save buyers and sellers time and money • Talk about local events • Spotlight a local vendor and offer a coupon that they must opt in for on your website • Create Top 10 Lists and break them out into daily posts • Pick an obvious local location to film a video from and invite fans to find you. The first person to comment with your correct location wins a prize. Add Consistent Content Just like your blog, your Facebook fan page will quickly become obsolete if you’re not constantly offering fresh content. I suggest posting at least once per day and at the high traffic times when your information is most likely to
online lead generation come up on your fans wall. According to a recent study by Buddy Media, there are not only certain days that are optimal but times of the day as well. Interestingly enough, their findings concluded that 60% of businesses were posting during normal business hours but those that posted outside of those hours had a 20% higher engagement rate.
Add the LIKE Button and Box to Your Website and Blog Allow blog followers and website visitors to find your page by adding the Like button or box to your site. Begin by creating your Like Box by adding your Facebook page URL to the plugin. Example: http://www.facebook.com/ FreeHelpRealEstate Find Fans A big misconception is that once you’ve set up your Facebook business page you should immediately start inviting all of your family and friends. This is a no-no and I’ll tell you why. First of all, why invite a large group of people that have no true interest in your page? Generating business is what your page is all about and involving a static group of people brings no intrinsic value. Secondly, how many invites do you have waiting for you right now that you have yet to read? We’ve all become accustomed to the invite “noise,” but spamming your friends is intrusive and just poor manners. Here are a few creative ways to find new fans: • Visit Facebook pages where homebuyers hang out. Spend time engaging with that community and bring awareness to your page. • Add your Facebook page to all of your direct marketing along with an incentive to LIKE your page. • Add to your Email Signature
• Create Facebook Ads – Ads allow you to go hyper local giving you the most targeted bang for your marketing buck. For a very small budget, you can use ads to get your message in front of the exact person you want fanning your page. Start creating your Facebook ad and have it up and running in no time. • Host an Event online or offline and drive fans back to your Facebook fan page. Once you’ve hosted the event, make sure there are pictures that can be uploaded and tagged. Encourage your fans to tag themselves in the photos. • Invite fans to join through an SMS Text Message. Your fans will simply send a text message to 32665 (FBOOK) with the words “fan yourusername” in the message. Your page will need a unique username before you can use this feature. You must have 25 fans before you are able to choose a username.
Send a Thank You Message A "Thank You" message might be the most unappreciated, but powerful business tool ever created. Just as we send a quick handwritten note to thank someone for their kindness, doing the same on Facebook extends that level of gratitude. Your message is short and sweet with two purposes. You are thanking them for becoming a fan of your page and pointing out a specific item of value or important information you want them to be aware of. Rebekah Radice is an active loan officer and mortgage industry speaker lauded for her Social Media and Marketing workshops. A self-proclaimed social media junkie and avid blogger, Rebekah has trained thousands of industry professionals on how to build, maintain and grow their online and social media presence. Contact Rebekah online at www.rebekahradice.com or via phone 719-387-1368.
What Processors aren't telling you An ounce of prevention ... by Amie Wills
like to say that I am a rare breed since there are not a lot of independent loan processors (though it does seem to be gaining popularity) and even fewer of us who process for both wholesale and retail. While both groups have unique benefits and detriments, there is one commonality amongst these two lending platforms – the loan process. As we enter another flu season, it seems there is no more apt observation than Benjamin Franklin’s: An ounce of prevention is worth a pound of the cure. The same is true for that which is plaguing our lending methods. Our goal is the perfect file (yes, I said perfect). If you expect anything less, that is what you’ll get. I know it is very easy to blame the loan processor for how the loan process goes, and I am not in any way trying to shuck responsibility for my files. However, I do know that by the time a file has gotten to my desk it has already developed its personality which starts from the very beginning. As a processor I will make your file neat and orderly, but I can only work with what you’ve given
me. Taking a thorough loan application and requesting all applicable documentation is more important than ever. Since it seems more people have lending obstacles, you need to discover that obstacle before I do. We all know that a recent hot button has been undocumented deposits in bank statements. I’ve had several files recently where, before submission, I was able to take these bank statements out of the file and rerun DU without using that particular bank account. However, this would not have been possible if the loan originator hadn’t provided me with all of the borrower’s assets. In another file, the borrower had many large nonpayroll deposits. Because the loan originator reviewed assets before giving me the file, she was able to turn it over to me with copies of cancelled checks and deposit receipts to show their sources. Sometimes I wish I could give those kinds of loan originators a gold star. When a file is given to me, I translate it from the language spoken by loan originators to language spoken by underwriters, keeping in mind that every lender speaks a different language. If you want a file to be submitted as quickly as possible after reaching my desk, you must also know your lender. How do they want their GFE completed? Do TheNicheReport.com
they have specific or unusual forms that the borrower must sign before submission? What about income – do the require tax returns on all files even if the borrower is your basic W2 employee? How is rental income calculated – do they require leases even if the income is on your taxes? Do they want to see mortgage coupons to verify the net tangible benefit? Especially for wholesale brokers this means really knowing the lenders – and I do mean all the lenders – that you brag to your clients about. It sounds great to be able to say, “I have two dozen lenders that I will shop your file with,” but if the lender with the lowest rates is one that you haven’t used in a year then you’re almost guaranteed a painful process. I applaud many of the loan originators I’ve been working with lately for catching these items up front and, more impressively, providing me written documentation for why something unusual should be acceptable. Things like copies of emails between you and an underwriting manager can be invaluable. We forget sometimes that underwriters, just like us, are limited to the file experiences they’ve had. Simply put, they might not know that they can do it until you prove it to them! A hard lesson I’ve recently learned is that communication is the most important component of any file. This is true amongst all parties of a transaction (escrow, real estate agents, appraisers… oh wait, we’re not allowed to talk to them, I meant appraisal management companies) but especially between the loan officer and loan processor. If we are not able to function as a close knit team we risk falling into an “us versus them” situation. One slightly odd thing that I have done for many years is search every client on the internet. Whether it be to get a clearer work history, find a phone number that was incomplete on the 1003, or just to get a feeling for what kind of person the borrower is (you’d be surprised how this can help you build rapport, but that’s for another day), if you as a loan officer found me doing this
and didn’t ask me why, you might think it was nothing more than surfing the internet. So getting back to that crazy suggestion I made in the first paragraph, how do we develop a perfect file? We need to be tangibly aware of our weaknesses, and we need to find a way to over come them. Do you have a competitive office? Make a game of it. I know this seems silly, but people are pretty easily motivated – we like to see our names at the top of the list. At one a time, an office I worked for had problems getting in on time – and I mean the whole office. So, we all started dropping money in a bucket every time we were late ($2 for support staff and $10 for originators), and who ever was the first to be on time 10 days in a row, got the whole pot. The culture in our office changed very quickly. Maybe you start tracking which loan originator can submit a full file to the processor. Maybe you track which processors can receive a clear to close approval. Give it a try, you may find an ounce of prevention is worth a ton of the cure. Amie Wills is a fully licensed independent loan processor in Torrance, CA, who works with both wholesale brokers & retail branches. To contact Amie, email her at firstname.lastname@example.org.
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EDMs Free Users to Judge Success in Efficiencies Gained by Matt Strickberger
aper is the residue of success in the mortgage business, to paraphrase Branch Rickey, the former president of the Brooklyn Dodgers. Succeeding in the mortgage business, especially on the origination side, means that piles of paper will be collected, sifted through, reviewed, checked, and rechecked. Every borrower knows that to receive a mortgage, he must gather his tax forms, his bank and investment statements, fill out several forms and hand them over to a loan officer or a mortgage broker to begin the origination process. For many lenders, vendors, and servicers, their offices are littered with boxes, filled with manila folders that will eventually be picked up and stored. It's an archaic process, one that wastes time because handling paper is inherently slow, expensive, and documents can be misplaced or lost. I’d like to believe that only a small number think this is the way to run a business, and most stick with paper
processes because they think, erroneously, that it’s more flexible. To be sure, paper has been the mother's milk of the mortgage business, accepted as a fact of life, virtually since its inception. But increasingly, I've come to realize, the industry can live without it, can thrive without it. Deploying automation and paperless processes are faster, less expensive than manual, error-prone paper processes, and they are a key to generating profits and staying a step ahead of the competition. As a result of technology, lenders close more loans with fewer people, suffer fewer mistakes, and spend fewer dollars to do it. Consider the following: • $122: The cost of paper from point-of-sale to closed loan. • 870: Number of sheets of paper that the average loan requires. • $38.92: The average per loan cost of the paper alone. That's why some mortgage companies have begun to invest in technology with the aim to eliminate paper, reduce overhead, speed the process and ensure adherence to investors' guidelines and compliance with regulations
techspot that have emerged following the real estate bubble. Unfortunately, too often efforts to go paperless focus on creating a rigid “Image Repository,” one that offers no benefits other than as a mere electronic archive. However, even that is an encouraging sign because it means that lenders are are open to the possibility of going paperless. Already, several high-profile lenders have migrated thousands of paper documents and created digital versions. The electronic archive, by anyone's estimation, represents a significant improvement for borrowers, lenders, servicers, and investors, but clearly there are further steps that can be taken. Archives play a significant role in creating easier, faster access to documents than hard copies of documents. Also, an archive neither addresses the issue of workflow, nor does it streamline the origination process; it simply does not remove enough of the costs from the business. Lenders are beginning to understand that to generate greater efficiencies, to deepen cost savings, and to ensure that mortgage operations always comply with regulations, requires an electronic document management (EDM)
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platform. It eliminates paper and supports the lender from the point-of-sale, through servicing and the secondary market, creating a straight-through-process. A well-designed EDM, delivers the flexibility of paper, and several other benefits as well. For instance, several people can view the documents through the Internet at the same time. Documents can be located with a click of a mouse, they can never be misplaced or lost, and a natural or man-made disaster will not destroy them. Moreover, these platforms provide a tracking tool that monitors each change to a document, such as user views, mark-ups, print-outs, e-mails, as well as the user's name and the date and time he made the changes. Employees who make additions or modify annotations, including text boxes, highlights of sections, redacts of sensitive information, or creates a check mark or a “sign here” box, can decide who else in his shop can view his work, and can decide who can view the changes. I am just touching the surface of what these systems can do, but this level of control cannot be attained with an archaic paper-based system or an over-the-hill “image repository.” During the Internet bubble years, many firms thought that licensing “technology for technology's sake” was reason enough to sink money, sometimes lots of it, into a technology that offered little chance of a return on investment. Those days are over. Today, buyers need a solid ROI that they can believe in before they make a buy decision. Rest assured, EDMs pay for themselves several times over, and quickly. Lenders and others that perform their due-diligence can realize the benefits of EDM and achieve an ROI in about six months. That's pretty fast. And it liberates users to judge the residue of their success in efficiencies gained, not boxes of loan files.
Matt Strickberger is media counsel and the chief Internet officer for RGA PR. He was the editor of Mortgage technology magazine and the editor of several Wall Street-related publications. To ask a question or to forward a comment, email him at firstname.lastname@example.org.
frank & brian speak
Enthusiasm Breeds Success by frank garay & brian stevens
t's easy to let the market get you down. I just looked at the news today after being on the road for the past week and I've got to tell you, it was a little disheartening. Jobless claims are “surprisingly” up, foreclosure notice of defaults are spiking, housing starts, new home sales, and existing home sales have all hit the skids. As a result, rates hit levels not seen since women wore flappers doing the “cancan” while sipping martini's at speakeasies. Really, roundly crappy news no matter how you smear it against the wall. So what do you do? We'll, the good news is “this ain't our first rodeo.” All in the business have been in the business for quite some time. So we know something about suffering a bad market. We know folks have been in the market for quite some time because you'd be a fool to take up a job as an originator right about now. So for most of you, this is just more of the same. The problem is most can only take so much bad news for so long before sheer exposure will even make the strongest wilt. For some this may be the case. It got me thinking though - all the trends we read about, talk about, and often live, is collective news on a national level. Trends talk about the whole but for the originator it's a market of one. Point is, even our current state of disrepair has created
opportunities and success. I'm coming off a pretty extensive travel schedule where I met with the folks at South East Mortgage in Atlanta, GA. Frank and I were greeted and shown the office which included all the marketing that they're excited about. Imagine that, actually being excited about marketing in the middle of our mess. Get this, they had a Contact Management Relationships division. The division existed for any and all of their Loan Officers and Realtor partners to use at any time and as often as desired. Now, I'm not doing a commercial for these guys, and I'm not telling you anything that could very well exist at your shop. The thing is, these guys, from management to the receptionist, were truly excited about what they've created. That type of enthusiasm breeds success. It's contagious. Let's face it, Loan Officer's are sales people and they all sell the same product. So when a potential buyer considers his lender they will consciously, or otherwise, choose the LO that exudes enthusiasm for their job. Further, if you believe in the efforts of yourself or your team, you're going to have more conviction in your efforts. Again, none of this is new or even newsworthy but does bear repeating on occasion. Because as I said earlier, the news we read, the conversations we have, are wrought with TheNicheReport.com
frank & brian speak selling points that would allow our collective sales force to find excuses that fit their situation all too easy. So my point is - bring enthusiasm to your job. Find marketing that you can be excited about. In the face of obvious and overwhelming adversity, make a conscious decision to put your nose down and fight harder. Success exists, some have it in spades and it’s all born from a good attitude and hard work. Like Vince Lombardi said “It's easy to have faith in yourself and have discipline when you're a winner, when you're number one. What you got to have is faith and discipline when you're not a winner.” So Packer up and kick ass today... and tomorrow... and the next day. You get it. Thinkbigworksmall.com (TBWS) was founded in 2007 by a group of highly successful real estate and mortgage industry entrepreneurs. Born in the most battered market in the real estate and mortgage industrys history, Thinkbigworksmall.com was conceived after decades of observing how the most successful professionals always seem to work smarter not harder. Frank & Brian can be reached at email@example.com
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Center stage with a la mode The Niche Report talks with Executive Vice President of Products Jennifer Miller
by the niche report
Celebrating 26 years as a technology leader, a la mode develops desktop, mobile, and Web tools for the real estate and mortgage industries. a la mode’s mission-critical products are used by hundreds of thousands of appraisers, agents, inspectors, and lending professionals to complete the nation’s real estate transactions. In September, they released “UAD Reader” and The Niche Report interviewed Jennifer Miller, EVP of Products for a la mode’s Mortgage Solutions Division. Jennifer, we’ve all heard about the GSEs’ new “UAD” appraisal requirements. Can you give us some background on what it means? The GSEs’ Uniform Mortgage Data Program, or UMDP, was designed as a way to standardize the common requirements for appraisal and loan data across the industry. Part of that program is the Uniform Appraisal Dataset, or UAD. The implementation deadline for UAD was September 1st, so going forward, all appraisals destined for the GSEs should be in the newly required UAD format. FHA will implement the same requirement starting on December 1st. The UAD format specifies both the technical MISMO 2.6 .XML file structure, as well as the particular words, number formats, and abbreviations that appraisers are allowed to use in the report. If this sounds complex,
just wait until you actually receive one of these new UAD appraisals in the required MISMO 2.6 XML format. What do the new UAD appraisal reports look like? Appraisals will be delivered as “.XML” files, and not as the “.PDF” files we’re all used to receiving. Anyone involved with appraisals, whether you’re a lender, an appraiser, a real estate agent, a borrower, a seller, or a title company, will start receiving these .XML files. They either won’t be able to open them, or when they do open them, they’ll just look like gibberish on the screen. Here’s an example of what it will look like when you open it.
Center sTage So how in the world are we going to make sense of that? Our new free desktop application, UAD Reader, solves that problem and a lot more. Go to www.alamode. com/UADReader and install the app. Then, when you open that .XML appraisal file with UAD Reader, you’ll actually see the embedded PDF on screen just as you’re used to seeing, along with several appraisal review and management tools.
UAD Reader is essential for anyone who deals with appraisals, just so they can actually open and read the appraisal report. But we’ve added some extra tools that will make the new GSE programs much easier on everyone involved. What else does UAD Reader do? It also verifies that the appraisal will pass the GSE’s new, very stringent rules. That’s a huge timesaver for lenders and processors because you’ll catch the errors before you submit the file to the GSEs, and UAD Reader shows exactly how the report needs to be corrected in order to sail through the GSEs service. You’ll be able to clearly communicate any revisions you might need to your appraiser, so you both save a lot of time. As a matter of fact, appraisers use UAD Reader to verify their reports before they send them to their clients. By having UAD Reader at both ends, the appraiser and the lender can quickly discuss any issues while seeing the same data on screen. It’s a fast, reliable, and free quality control check that saves everyone a lot of time. UAD Reader also includes a tool for delivering the appraisal report to your borrowers, along with a link to download UAD Reader so they can understand the appraisal. The “Send to Borrower” function gives you proof of receipt so you’re in compliance with Dodd-Frank timely disclosure rules, and it includes a “How to Read This Appraisal” guide that explains the abbreviations and conventions of these new UAD appraisal reports. Sending the appraisal to your borrower through UAD Reader also ensures GLBA compliance because you’re not attaching the appraisal directly to unencrypted e-mail. Borrowers follow 36
a coded link, giving them security and giving you an audit trail. Finally, because a la mode has a direct integration with the GSEs’ Uniform Collateral Data Portal, or UCDP, lenders can submit the UAD appraisal report to UCDP from within the UAD Reader – at no charge. That’s a huge benefit for lenders because they won’t pay submission charges. Since UAD Reader is necessary to open and understand the new appraisal files, why are you giving it away rather than charging for it? That’s a good question and there are several reasons we aren’t charging anyone for it. UAD Reader is a winwin. First, there are several features in UAD Reader that lenders and appraisal management companies will rely upon. And those features are really only a small sampling of what they could have in terms of compliance and management ease, if they used our Mercury Network vendor management platform. So UAD Reader is a great way to let all the lenders and AMCs in the country get firsthand experience with our expertise in appraisal quality and management. Then, they can migrate from UAD Reader to a full Mercury Network configuration in just a few clicks, with no loss of data and no account fees. Second, more of the nation’s appraisers use our formfilling software than all other brands out there combined. We knew our appraiser customers, well over half the appraisers in the country, would soon be faced with floods of calls from their clients, unable to open and read their appraisal reports in this newly required format. So UAD Reader is also a service to our appraiser customers and it’s a result of our unique focus on making sure their businesses are successful. Thank you for taking the time to speak with us today. Please keep us posted on future developments so we can keep our readers informed. I would also recommend that mortgage professionals visit www.alamode.com/UADReader to learn more and download the free app.
New Jersey Association of Mortgage Brokers & Pennsylvania Association of Mortgage Brokers are pleased to announce the addition of the Maryland Association of Mortgage Professionals to the
Third Annual Northeast Conference of Mortgage Brokers November 1 - 3, 2011, Trump Taj Mahal Casino Resort, Atlantic City, NJ
Tuesday, November 1, 2011 NMLS Continuing Education (Separate Registration Required) 7 p.m. – 9 p.m. Welcome Reception in the Exhibit Hall - Exhibit Hall Open Wednesday, November 2, 2011 9 a.m. - 12:00 p.m. General Session CFPB Panel 12:00 p.m. - 1:30 p.m. Exhibit Hall Open, with Lunch 1:30 p.m. – 5:00 p.m. Exhibit Hall Open To All Attendees
6 p.m. - 8 p.m. Cocktail Reception, hors d’oeuvres & cash bar Thursday, November 3, 2011 9 a.m. – 10 a.m. Why the Broker Will Survive: Opportunities for the Mortgage Broker 10:00 a.m. - 12:00 p.m. In Depth View of Key Issues Impacting the Industry (QRM, QM, LO Comp), New Disclosure Requirements • Ken Markison - Associate Vice President and Regulatory Counsel, Mortgage Bankers Association Other speakers and Breakouts will be added and listed at www.njamb.org.
1:30 p.m. - 3:15 p.m. State Regulators Forum: MD, NJ, NY and PA Regulators 3:30 p.m. - 5:00 p.m. Social Media
Visit www.njamb.org for more information and to register.
WHAT IS YOUR MORTGAGE IQ?
What's your mortgage IQ? BY MortgageCurrentcy
I’ve recently seen ads on TV where mortgage companies have NOT been following the REG Z advertising rules. Now, Dodd Frank has tacked on the “Mortgage Acts & Practices” rules, that in addition to Reg Z, has defined who it applies to, recording keeping, what you can and cannot say, write about, advertise or mention when offering any type of mortgage “terms” to consumers. You can download the Reg Z Talking Points free www.MortgageCurrentcy.com and email me Karen@mortgagecurrentcy.com if you’d like a low down on the MAP rules. FHA 2 HUD Loans: Can a borrower have 2 FHA loans at one time? The following situations allow your buyer to have more than one FHA mortgage • Relocation - Must document unreasonable commute distance from current home. • Increase in Family Size - Must have current mortgage balance at or below 75% LTV. • Vacating a Jointly Owned Property - Example: divorce. • Non-Occupying Co-Borrower - Co-signed with family on their home. 38
But wouldn’t they have to qualify with two mortgages? Not in most cases! • Relocation: The “relocation” exception allows the current home to be rented and typically (depending on area) 85% of the monthly rent can be used to offset the current payment. One-year lease and proof of security deposit or first month’s rent will be required. • Increase in Family Size: Allows the home to be rented with the same rules as Relocation (there MUST be an appraisal on current home and 25% equity). • Vacating a Jointly Owned Property: This exception may allow the borrower an exemption from including the monthly debt at all, but only if a) There is a final divorce decree that awards the home and the debt to the ex-spouse; or b) The borrower can prove the remaining occupant co-borrower has been making payments on their own and has an on-time 12-month payment history.
WHAT IS YOUR MORTGAGE IQ? • Non-Occupying Co-Borrower: This exemption may allow the borrower exemption from inclusion of the monthly debt as stated above in b). Marketing Tip: There is a Mortgage Talking Points that we created for you to distribute to your Realtors that discusses all the allowable circumstances for multiple FHA loans. FHA Minimum Sq. Footage: What is the minimum sq. footage allowed for single family dwelling? FHA does not have a minimum square footage requirement for a home to be eligible for FHA financing (except that a manufactured home must have a minimum size of 400 square feet to qualify for FHA financing). FHA only requires that a home be marketable in the area and have adequate space necessary to assure suitable living, sleeping, cooking and dining accommodations and sanitary facilities. Find more info in Handbook 4905.1 REV1, Section 2-9 USDA Condo Approvals. Can I do a USDA loan on a condo if it is NOT FHA approved? Condominiums are eligible for financing under the USDA Rural Development Guaranteed Rural Housing Loan Program if they meet the following requirements: • The complex must be served by a homeowners association. • A condominium must be approved or accepted by HUD, VA, Fannie Mae, or Freddie Mac. (The lender's underwriter is responsible documenting the acceptability of the condo based on secondary market criteria. Unwarrantable condos cannot be accepted.) Participating lenders may certify to Rural Development that they have reviewed the condominium documentation, and that the condominium is in compliance with HUD, VA, Fannie Mae or Freddie Mac guidelines. Rural Development's optional Condominium Certification Form may be utilized to make this certification. Aside from the lender certification to Rural Development, all condominium documentation should remain in the lender's file and should be available upon request. The documentation must be provided if no certification is submitted.
When there is an indication that a condominium unit or project does not meet the requirements of HUD, the VA, Fannie Mae or Freddie Mac, the agency will request additional documentation from the lender. If the condominium unit or project does not meet the stated requirements as certified or warranty by the lender, Rural Development may refuse to issue a Conditional Commitment or Loan Note Guarantee. Marketing Tip: If your real estate agents have condos listed for sale that are located in USDA lending areas, ask them for the info to see if they qualify for USDA financing. VA Counting Rental Income: I have a veteran and spouse purchasing an owner occupied 2-family. Do they have to have landlord experience to qualify? This is verbal information from the Denver Regional Office--you can circumvent this requirement by having the Veteran hire a management company to handle the rental unit. The expense would have to be included in the debt ratio, but at least your borrower could move forward. Fannie/Freddie Source of Funds: My customer wants to take a $200,000 loan from his business for his down payment. Would this be an acceptable form of down payment? No -- an unsecured loan is not allowed. Any loan for funds to close or down payment must be secured with an asset the borrower owns (401k, car, home, etc.) -- a valuation of the asset may be needed with full documentation of the terms of the loan and the borrower must qualify with the loan payment. The borrower may use business assets toward a down
WHAT IS YOUR MORTGAGE IQ? payment, but will need to fully document with account statements (explaining and sourcing all large deposits) and a letter from the CPA that the use of the funds will not be a detriment to the business -- Underwriters are typically hard on this funding source. Fannie DU Refi Plus Ineligible: I am working with a past client on a DU Refi Plus loan. I was told that she didn't qualify because of the risk pool it is packaged in. Can this be true? Yes it is possible for a loan to show-up on the list as Fannie owned but not be eligible. You would not know this until you run the loan through DU and get an ineligible finding. Loans sometimes will lose eligibility due to a repurchase or indemnification by the lender or due to the loan having utilized a variance from the standard guide when it was originally closed. These loans are just not eligible for the program -- I have had a loan that was eligible at application, but by the time we were finalizing underwriting, the loan had been repurchased by the original lender due to a documentation problem in the original loan. We were not able to close the loan under the DU Refi Plus program. Compliance 3rd Party Collecting Docs: Can a lawyer collect application documents (paystubs, w-2, 1040\'s, bank accounts) and legally pay them a referral fee or commission? This is tricky -- some processors and underwriters are required to register and/or be licensed depending on their duties. Customer contact could make them subject to the SAFE Act as they may be considered to be "in the business of a loan originator". As for paying the attorney -- this is allowable for
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services actually rendered. Be careful paying a "referral fee" or a “commission” -- that is a kickback and is illegal. Fannie Cash-Out - Properties Owned Less Than 6 Months: Could you explain Fannie’s Delayed Financing Rules? After a borrower purchases a home, they must wait 6 months before doing cash out refinance per Fannie’s current rules. Fannie is now offering a Delayed Financing Exception assuming the borrower meets all of the following: No financing was obtained for the purchase of the home (that was secured by the subject property). The new loan is no more than the borrowers documented cash investment in purchasing the property, plus closing cost & prepaid fees. The purchase was an arm’s length transaction HUD from the original purchase must show no mortgage was taken and title work must show that no mortgage exist on the property The source of funds to purchase the property must be verified (if the borrower took an unsecured loan or a loan on another property or asset to facilitate the purchase of the property, it must be paid off on the HUD). All standard cash out rules apply as do standard cash out LLPA’s. Cash out now allowed for borrowers who have up to 10 properties financed. This rule does apply to borrowers who own multiple properties. With DU update 8.3 feedback messages will be updated to reflect these changes. Manually underwritten loans can apply these rules immediately. Marketing Tip: Ask your real estate agents for a list of people who have paid cash for homes and see if they would like to refinance to get more cash to buy more homes (of course, thru the real estate agent who sold them the property in the first place).
Written and contributed by Karen Deis of Mortgagecurrentcy.com. Provided monthly by www. mortgagecurrentcy.com- interpreting the Rules and Regulation Changes for loan officers, processors, underwriters, and owners/ managers. Mortgage Talking Points TM, charts and checklists included.
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title work & insurance Entitle Direct 877-936-8485 or 877-9ENTITLE
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Branch Opportunities Benchmark 972-398-7676
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Compliance & Audit Accurate Quality Control, Inc. 770-931-5999 Adfitech Inc. 800-880-0456
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Delivering complete marketing education, valuable products to grow your business and exceptional service to make marketing an easy, enjoyable, and profitable experience. We provide full service automated marketing plans to fit your budget and business goals incorporating postcards, newsletters, greeting cards, brochures, presentations and more! Marketing consultations are available to help strategize the best marketing plan for your individual needs, whether just starting a marketing campaign, or enhancing your current plan. Lead Gen Concepts is different from our competition because we do not sell leads. We work with our customers to generate their own exclusive leads in their market using our proprietary direct-to-consumer lead generation websites and pre-build platforms. Our markets are exclusive so our customers will be on the only company in their market using our concepts to generate leads. Please visit our website at www. leadgenconcepts.com to learn more or sign up to use one of our concepts in your market today at www.leadgenconcepts.com/signup! The ultimate contact management system for LOs. Increase your performance with automated marketing and alerts. Sync correspondence from Outlook and mobile devices to one centralized location to track contacts, leads, loan activity and referrals. Over 12 years of experience catering exclusively for the mortgage industry delivers consistent results from our turn-key campaigns. Our Pre-screened data, 24 hour turn around and custom pieces design continue to lead the industry for mortgage marketing efforts.
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360 Mortgage Group National Wholesale Mortgage Lender. www.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, Pre-Funding QC, Default Reviews, Fraud Investigations, Post Closing Fulfillment, and LOANVAULT Imaging of Conventional & FHA Products. www.adfitech.com John Rosenhamer 800-880-0456 firstname.lastname@example.org
a la mode, inc. Websites and marketing tools for real estate professionals. www.alamode.com 800-ALAMODE email@example.com
Applied Business Software Origination and Servicing software for hard money lenders. www.TheMortgageOffice.com 800-833-3343 firstname.lastname@example.org
Byte Software End-to-end Mortgage Loan Origination Software. www.bytesoftware.com 800-695-1008 email@example.com
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Calyx Software Affordable software that streamlines and optimizes all phases of the loan processâ€” from loan marketing through closing. www.calyxsoftware.com 800-362-2599 firstname.lastname@example.org
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Benchmark A community of mortgage professionals united by Benchmark core values Relationships, Success, Dynamic, Excellence, and a Positive Attitude specializing in retail branching throughout the United States. www.iambenchmark.info Karri Vaught 972-398-7635 email@example.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
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MortgageCurrentcy.com Interpreting the complicated mortgage rules in plain language. 800-231-4787
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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 firstname.lastname@example.org
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BRINGING UP THE REAR - continued from page 50
against the bankers and the foreclosure crisis that is quietly tearing about our country and destroying our middle class and our economy. I found out today that a few days ago she took her own life. The bank had allowed the eviction to proceed; they refused to do anything else. Maybe they wouldn’t have changed their mind had I found the time to publicize the couple’s plight… maybe not. But, we’ll never know… I’ll never know. The couple called me, their daughter called me… many times during the month of August, but I was away in Arizona, I needed the rest… my own health was in question and I felt I needed to rest and recuperate before I‘d be able to continue the fight effectively. I spoke with the husband… and the wife… they sent me their story written out on many pages. It all started when Wells Fargo said they had made a trial payment a couple of days late. The couple said they had made it on time. How petty a thing that could lead to such a tragic end… I tried to calm them down… told them I would try to help them. But, I never got back to them… never wrote their story. And now it’s too late. The last phone message I received was from their daughter. I played it today when I got the news. She was literally begging for my help. But I didn’t hear it in time. And now a disabled American veteran is gone. I don’t know what to say except that I am so very sorry that I let them down. So deeply sorry… and I’ll never forget them… I’ll try never to let something like that happen again. But the other truth is that I’m angry. I’m angry that I even have such responsibility… such power that my writing about someone’s situation has the potential to save their home from foreclosure. It shouldn’t be the case. The banks should not be allowed to lie to people, the process should be transparent… none of it should be done in secret. God damn the bankers that continue to treat American homeowners struggling financially as a result of the global financial crisis and our country’s deepening recession that they caused as if they are meaningless souls… as if they are to be disposed of like diseased cattle. And God damn those who have no compassion for the millions of Americans who continue to receive foreclosure notices every day… their lack of compassion comes from their ignorance of the facts involved, and at
this point there is no excuse for that ignorance. And God damn the Obama Administration for ignoring and abandoning the American middle class in favor of the banking billionaires to whom he has given a blank check as reward for their crimes. But, again… I’m just so sorry that I let them down. Please join in this prayer for a fallen soldier… its author is unknown…
I saw a soldier kneeling down, for this was the first quiet place he had found. He had traveled through jungles, rivers and mud. His hands were scarred and toil-warned. He folded his hands and looked to the sky... I saw his tears, as they welled in his eyes. He spoke to God, and this is what he said. God Bless my men, who now lie dead; I know not what You have in mind, but when You judge, please be kind.... when they come before You, they will be poorly dressed but will walk proudly, for they have done their best. Their boots will be muddy and their clothes all torn... but these clothes they have so proudly worn. Their hearts will be still and cold inside, for they have fought their best and did so with pride. So please take care of them as they pass Your way... the price of freedom they've already paid. AMEN.
Martin Andelman is a staff writer for The Niche Report, and a feature writer for ML-Implode.com, where you’ll find his almost daily column, Mandelman Matters. Questions or comments? Send them to: firstname.lastname@example.org.
BRINGING UP THE REAR
Bringing Up the rear BY MARTIN ANDELMAN
oday, another victim of the foreclosure crisis took her own life. She was a disabled American veteran and her family was counting on me to help. And I let them down. You see, when I returned from a trip to Hawaii earlier this summer to meet with members of the state’s legislature on how the state might better deal with the foreclosure crisis, I received a call and a letter from a couple who’s home was about to be sold by Ocwen. The husband, afflicted by multiple sclerosis, could not be moved from their handicapped home and I couldn’t stand watching what was about to happen… so I wrote about it… attacking Ocwen for allowing such an injustice to take place. And Ocwen responded. Within days the trustee sale was cancelled and Ocwen agreed to modify the loan so the family could remain in their home of so many years. It should go without saying that the couple was joyous and thankful, although I couldn’t help but wonder
about all the families about whom I would never be able to write about… and perhaps save from the pain of foreclosure. Soon after that I received another letter and call from a couple’s daughter who lived in Hawaii… her parents were facing foreclosure in California and their lawyer who had been hired to help them had dropped the ball… they were on their way to being evicted. They’re older… in their 70s, and they were caring for a disabled American veteran… a member of the family. I tried to help… called an attorney friend of mine who stepped in and filed what could be filed, but acknowledged openly that it was a long shot. Maybe some media attention would help, as it had previously, and I said that I would write about their situation. But, the truth is that I never got around to it. I had other pressing concerns. And I’m only one person fighting a much larger fight. I spent several weeks in Arizona, meeting with lawyers and homeowners… and filming a documentary that I’d come to believe is the most important contribution I can make to the war - continued on page 49
Big changes are coming in how the GSEs will accept your loan files.
Are you ready for UMDP? The GSEs’ Uniform Mortgage Data Program, or UMDP is coming very soon and it will radically change how you submit loan data to the GSEs. They will require that you deliver appraisal data in MISMO XML 2.6 format. If you can’t get the XML, they’ll also accept a first-generation PDF but it’s not preferred and you’ll quickly see why. If your appraisal vendors are still only giving you PDFs or converting PDFs into the preferred XML for submission to the GSEs, you’ve probably already seen the extra expenses and pipeline delays as a result.
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Free tools and training available now at www.MercuryVMP.com/UMDP All the info you need Find all the program details, a deadline calendar, links to other resources, and much more
UMDP Readiness Checklist An .xls tool to help you prepare your organization for a smooth transition
UAD Appraisals Reference Poster We’ll mail you a poster so your underwriters can decipher the new appraisal reports
UMDP Roadmap webinars Register for free half-hour webinars for operations staff and underwriters on a variety of UMDP topics
Mercury Network 1-800-434-7260 • www.MercuryVMP.com AD CODE: MANRMN1011 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 ©2011 a la mode, inc.
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