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NMP MEDIA CORP. 1220 WANTAGH AVENUE WANTAGH, NEW YORK 11793 PRESORTED STANDARD U.S. POSTAGE PAID NMP MEDIA CORP. 9
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PRESORTED STANDARDU.S. POSTAGE PAIDNMP MEDIA CORP.
NMP MEDIA CORP.1220 WANTAGH AVENUEWANTAGH, NEW YORK 11793
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Ours are 35% LESS.
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OUR RATES THEIR RATES
MORTGAGE BANKERS ASSOCIATION OF NEW JERSEYMBA-NJ OFFICERS
Phone # Fax #Joseph Sheridan Jr. President (732) 264-2700 (732) 264-6127Maria G. Chaux, CMB Vice President (201) 861-0531 (201) 861-0754Michael DiSalvio Second Vice President (609) 519-0484 (856) 468-3856W. Thomas Kelly TreasurerGregory S. Tornquist Immediate Past President (609) 883-3900 (609) 538-4006E. Robert Levy Esq. Executive Director (732) 404-1128 (732) 404-1129
MBA-NJ BOARD OF GOVERNORS2010
Maureen A. Erwin, CMBSamuel P. Lamparello, CMB (732) 738-7100 (732) 738-5806 Michael Mahfouz (201) 226-2356 (201) 226-0898Nelson Ramos (609) 518-1421 (609) 518-1423Stanley M. Weeks (973) 624-0865 (973) 624-4369
2011Robert J. Angelucci (215) 293-6800 (215) 293-6807Kenneth Gunther (732) 389-9898 (732) 460-7651Paul T. Logan (856) 685-0096 (856) 428-7213Richard W. Miller, CMB (609) 883-3900 (609) 538-4006Alex Saphos (215) 575-1452 (215) 575-1900Russell J. Tucker (973) 376-8100 (973) 376-0180
2012Robert Baerenbach (732) 499-9007 (732) 875-0456Laura J. Borrelli (973) 890-7440 (973) 890-9206Eugene J. Brown (800) 596-6200 (856) 985-8562Robert E. Knuth (609) 965-6660 (609) 965-1572Lawrence R. Lesiger (856) 663-7800 (856) 663-6565
NEW JERSEY ASSOCIATION OF MORTGAGE BROKERSNJAMB EXECUTIVE COMMITTEE
Joseph Heisler President (800) 832-7334 (732) 797-1685Edward Morba Vice President (973) 283-8111Brian Benjamin Secretary/Treasurer (732) 345-5000 (732) 345-5049Gary Lehnes Immediate Past President (973) 713-5669 (800) 377-0987
NJAMB BOARD OF DIRECTORSAnna Lazar (201) 224-3863 (201) 224-8895Dennis Astrella (973) 882-2919Al Rubin (856) 667-5396 (856) 482-0425
MBA-NJ/NJAMB STAFFE. Robert Levy Executive Director and Counsel (732) 404-1128 (732) 404-1129Jessica Jacobson Assistant Director (973) 379-7447 (973) 379-5152Monica Cedeno Membership/Registrations Coordinator (973) 379-7447 (973) 379-5152Dana Maki Meetings Coordinator (973) 379-7447 (973) 379-5152Leslie Merkelson Financial Coordinator (973) 379-7447 (973) 379-5152Charlene Gilbert Executive Assistant (973) 379-7447 (973) 379-5152Rosa Fernandez Communications Coordinator (973) 379-7447 (973) 379-5152
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Mortgage PROFESSIONALN E W J E R S E Y
M A G A Z I N E
Your source for the latest on originations, settlement, and servicing
MBA-NJ/NJAMB State Office385 Morris Avenue � Springfield, NJ 07081
Phone: (973) 379-7447 � Fax: (973) 379-5152MBA-NJ Web site: www.mbanj.com � NJAMB Web site: www.njamb.org
$39.99 a Month for Unlimited Phone Servicewith a FREE Executive Phone
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home based employees• Easy to Use and Self-install
or use our professional on-site support services
Learn how Packet8 Virtual Office can save your business money. Visit BusinessSurvivalCenter.com/8x8
APRIL 2010Tuesday-Thursday, April 20-22
17-Hour SAFE Comprehensive Class (plus three state-specific courses)Three hours of New York State laws, four hours of New Jersey state laws
and three hours of Pennsylvania state lawsThe Hilton Woodbridge
120 South Wood Avenue • Iselin, N.J.
Tuesday-Thursday, April 27-2917-Hour SAFE Comprehensive Class (plus three state-specific courses)
Three hours of New York State laws, four hours of New Jersey state lawsand three hours of Pennsylvania state laws
The Westchester Marriott670 White Plains Road • Tarrytown, N.Y.
MAY 2010Tuesday-Thursday, May 4-6
17-Hour SAFE Comprehensive Class (plus three state-specific courses)Three hours of New York State laws The Hilton Long Island/Huntington
598 Broadhollow Road • Melville, N.Y.
Monday, May 10Joint MBA-NJ/NJAMB Annual Golf Outing
Beaver Brook Country Club25 Country Club Drive • Annandale, N.J.
JUNE 2010Tuesday, June 8
MBA Greater Philadelphia Annual Golf OutingRiverCrest Golf Club & Preserve
100 Golf Club Drive • Phoenixville, Pa.12:30 Shotgun Start
JULY 2010Wednesday, July 14
“Let’s Make a Deal” Tri-State Wholesale Lending FairTrump Taj Mahal Casino Resort
1000 Boardwalk • Atlantic City, N.J.
SEPTEMBER 2010Monday-Wednesday, September 20-22
Second Annual Northeast Conference of Mortgage BrokersTrump Taj Mahal Casino Resort
1000 Boardwalk • Atlantic City, N.J.
NOVEMBER 2010Monday-Wednesday, November 8-10
Mortgage Bankers Association of Pennsylvania ConferenceWyndham-Conference Center
Gettysburg, Pa.
MBA-NJ/NJAMB
For more information, call (973) 379-7447 or (888) 739-9991, or visitwww.mbanj.com, www.njamb.org or www.mba-pa.org.
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A Message From MBA-NJ/NJAMBExecutive Director and GeneralCounsel E. Robert Levy Esq.
The business of mortgage finance is becoming more diffi-cult and complex with the continuing flow of new laws andregulations, many of which are ambiguous and fraught withthe potential for interpretations by the courts that no oneenvisioned. This, in itself tends to keep some out of thebusiness and others reluctant to lend except to those bor-rowers who, after conservative underwriting, are deter-mined to be the least likely to default. Other consumers arenot able to borrow from such lenders despite their ability to
repay the loan, albeit with less certainty (“certainty” was never required andnot possible to predict) than someone with the higher credit score, lower loan-to-value (LTV), etc.
The plethora of laws and regulations include the new SAFE Act and state lawsimplementing it, as well as the proposed U.S. Department of Housing & UrbanDevelopment (HUD) SAFE regulation. SAFE itself, a law based upon former Sen.Martinez’s bill that languished in the Senate until put into the Housing andEconomic Recovery Act (HERA), was never the subject of Committee hearings.There was no industry input into the legislation, and as a result, it is not surpris-ing that the definition of loan originator required that the individual take anapplication and solicit or negotiate the terms of a mortgage loan. This wasaltered in the Model State Law that most states adopted, in whole or in part,when “and” became “or” with the blessing of HUD (which decided that if you arenegotiating the terms of a mortgage loan, you must have received sufficientinformation from the borrower, and therefore, ipso facto, you took an applica-tion!) The troublesome felony provision and the ambiguity as to whether thosedoing loan modifications for servicers have to be licensed as loan originatorswhere state licensing is required, as well as the extent of HUD’s authority tointerpret SAFE are examples of what the lack of industry input resulted in. Thus,there are many interpretative issues yet to be resolved as to exactly what wasintended when SAFE was enacted.
The terms “ability to repay” and “tangible net benefit” are found in state andfederal laws and regulations, both of which are extremely difficult to define suffi-ciently to give lenders and broker’s confidence that the loans they are dealing withmeet these standards. In fact, experience with “tangible net benefit,” originally inNew Jersey’s Homeownership Security Act (NJHOSA), shut down the market in NewJersey (as we predicted in lobbying the bill) since the rating agencies said theycouldn’t rate loans falling within the law because they couldn’t evaluate thepotential liability under such a vague and subjective provision. Within a year, wehad the provision taken out of the laws! “Ability to repay” raises difficult issueswhen it comes to those in cash businesses, such as waiters, cab drivers and others.What other resources can be utilized in addition to verifiable income has resultedin considerable discussion, for example.
The new Good Faith Estimate (GFE) has caused considerable concern. In fact,at our recent Annual Regional Conference of Mortgage Bankers Associations inAtlantic City, Ivy Jackson was the recipient of many questions notwithstandingthat innumerable Frequently Asked Questions (FAQs) were put out by HUD con-cerning the GFE previously. Where states such as New Jersey have specific allow-able fees, they are lumped into the origination charges in the GFE, yet the stateshave an obligation to see that only those fees allowed under the law are beingcharged. If the state wants these fees to be listed and the borrower to have thelist, the concept of using the new GFE to shop by comparing total originationcharges with other lenders and brokers is undermined. Therefore, state lawsand regulations may have to change in order to be consistent with the GFE andallow for meaningful shopping to take place (assuming it would occur as HUDenvisions it).
Other concerns include the new surety bond requirements under the SAFE Actdue to their cost and the substantial net worth requirement being imposed bysurety bond issuers. Perhaps we should take a fresh look at creating a fund in lieuof surety bonds or net worth requirements under the SAFE Act and the ResidentialMortgage Lending Act (RMLA) in New Jersey and the Mortgage Licensing Act (MLA)in Pennsylvania. If we lose our smaller lenders and brokers, consumers will alsosuffer.
Other issues: The higher net worth requirements being imposed by the FederalHousing Administration (FHA) will also result in reducing the number of lenderswho will qualify. What lenders will require of brokers who will no longer file audit-ed financials with FHA is yet to be determined. Repurchase demands having esca-lated and the denial of claims by the mortgage insurers all add to the difficultiesbeing experienced in the mortgage markets.
These and a myriad of other laws and regulations our industry will be facingthis year will require a good deal of sophisticated analysis and planning forlenders and brokers to survive. We gave a great deal of information to the atten-dees at the Regional Conference in March both at our General Session and duringCritical Issues Day. We will keep our members abreast of the latest information ona state and national level regarding the issues most critical to them and continueto be a good “business partner.”
E. Robert Levy Esq., Executive Director and General CounselMortgage Bankers Association of New Jersey/New Jersey Association ofMortgage Brokers
Trump Taj Mahal Casino Resort1000 Boardwalk • Atlantic City, N.J.
11:30 a.m.-4:30 p.m.
Wholesale exhibit booths, combined with lunch, enables brokers in atten-dance to make their deals during a five-hour period devoted solely to net-working and making deals!
For more information, call (973) 379-7447 or (888) 739-9991, or visitwww.mbanj.com or www.njamb.org.
Price for the day is $165 for all MBA-NJ/NJAMB members or $195 for non-members includes all of the following:
10:30 a.m...................................................................Registration Desk Open 11:00 a.m.-12:15 p.m.........Practice Area, Chipping and Putting Greens Open11:30 a.m.-12:30 p.m. ..................................................................BBQ Lunch1:00 p.m. ..................................................................................Shotgun Start5:30 p.m.-6:30 p.m. ..................Network Cocktail Reception: One Hour Open
Bar/Hors d’Oeuvres6:30 p.m. ..................................................Buffet Dinner & Awards Ceremony
For more information, call (973) 379-7447 or (888) 739-9991, or visitwww.mbanj.com or www.njamb.org.
Save the date … Wednesday, July 14“Let’s Make a Deal”Tri-State Wholesale
Lending Fair
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Thursday, June 24, 2010Friday, June 25, 2010
AAMB welcomes NAMB to beautiful Phoenix! Come see the new NAMB President and the new NAMB Board installation, while
participating in some great networking opportunities. State delegates can also participate in the NAMB Delegate Council Meeting.
Phoenix Airport Marriott®
1101 North 44th Street • Phoenix, Arizona 85008 USARooms are $99 per night, and will be honored at the same rate if you wish to extend your stay.
Hotel Toll-Free: 1-800-228-9290
Visit www.NAMB.org for details.
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W E A R E R E M N W H O L E S A L E
At REMN, we understand that mortgage
companies perform best when they focus on
what’s important: their customers. We are
industry veterans and FHA specialists who
understand that every application is precious.
We treat each file with the respect – and
urgency – it deserves. Even better, at REMN,
same-day approvals are guaranteed.*
Real Estate Mortgage Network, Inc. is located at 499 Thornall Street, Second Floor, Edison, NJ 08837. NMLS #6521. This information is for use by mortgage professionals only and should not be distributed to or used by consumers or third parties. Information is accurate as of date of printing and is subject to change without notice.
* Same-day decisions guaranteed if file is received by 11 a.m. EST.
Learn more at www.remnwholesale.com
It’s about time.
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Value Nation: The Mortgage Meltdown and AppraiserSelection By Charlie W. Elliott Jr., MAI, SRA
Regulatory Compliance Outlook: April 2010—EscrowRequirements for Higher-Priced Mortgage Loans By Jonathan Foxx
SAFE Smart … Testing, Education and Licensing: The Testin the Bar By Paul Donohue, CRMS
The Secondary Market Overview: Predictions By Dave Hershman
The NAMB Perspective
NMP Mortgage Professional of the Month: Steven A.Milner, President and Chief Executive Officer of MortgageConcepts
FDIC Finds Fair Lending Violations Under ECOA for CreditReporting Fees By Terry W. Clemans
Trend Spotter: Why Tax Knowledge Matters By Gibran Nicholas
Half-Empty? Half-Full By Donald E. Fader, CRMS
Ask Tommy: Your QC Expert By Tommy A. Duncan, CMT
Forward on Reverse: Reverse Mortgages for First-TimeHomebuyers By Atare E. Agbamu, CRMS
A View From the C-Suite: Redefining “Going Green” By David Lykken
Will the Mortgage Industry Witness Another Influx of Non-Traditional Lenders By Ed F. Wallace Jr., Ph.D.
Going Green and Stamping Out Fraud By Tommy A. Duncan, CMT
Paperless Lending Offers Fraud Risk Mitigation By Sharon Matthews
Paperless or Just Less Paper? By Erik Wind
Pieces of the P.I.e: Paper, Imaged and e-Documents By Greg Smith
Eight Reasons Why E-mail Marketing Works for MortgageBrokers By Wendy Lowe
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April 2010Volume 2 • Number 4
1220 Wantagh Avenue • Wantagh, NY 11793-2202Phone: (516) 409-5555 / (888) 409-9770
Fax: (516) 409-4600Web site: www.nationalmortgageprofessional.com
Mortgage PROFESSIONALN A T I O N A L
M A G A Z I N E
Your source for the latest on originations, settlement, and servicing
STAFFEric C. Peck
Editor-in-Chief(516) 409-5555, ext. 312
Andrew T. BermanExecutive Vice President(516) 409-5555, ext. 333
Domenica TrafficandaArt Director
Karen KrizmanSenior National Account Executive
(516) 409-5555, ext. [email protected]
Jennifer MoellerBilling Coordinator
(516) 409-5555, ext. [email protected]
ADVERTISINGTo receive any information regarding advertising rates,deadlines and requirements, please contact SeniorNational Account Executive Karen Krizman at (516) 409-5555, ext. 326 or e-mail [email protected].
ARTICLE SUBMISSIONS/PRESS RELEASESTo submit any material, including articles and pressreleases, please contact Editor-in-Chief Eric C. Peck at(516) 409-5555, ext. 312 or e-mail [email protected]. The deadline for submissions is the first of themonth prior to the target issue.
SUBSCRIPTIONSTo receive subscription information, please call (516)409-5555, ext. 301; e-mail [email protected] visit www.nationalmortgageprofessional.com. Anysubscription changes may be made to the attention of“Circulation” via fax to (516) 409-4600.
Statements of fact and opinion in National MortgageProfessional Magazine are the responsibility of theauthors alone and do not imply an opinion on thepart of NMP Media Corp. National MortgageProfessional Magazine reserves the right to edit, rejectand/or postpone the publication of any articles, infor-mation or data.
National Mortgage Professional Magazine is published monthly by NMP Media Corp.
Copyright © 2010 NMP Media Corp.
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A Message From NMP Media Corp. Executive Vice President Andrew T. Berman
Going green? Paperless?So when we thought of doing a special section on “Going Green/Paperless,” I assumedwe’d be reporting on some great companies that have gone green and have experi-enced great savings and an increase in productivity. Instead, I have been hearing night-marish scenarios about $50 million-per-month mortgage operations spending inupwards of five figures on paper and related dead-tree technology expenses. I am evenhearing stories about so-called “paperless” offices, where specific employees insist onprinting out PDFs so they can view their documents “offline.” However, most compa-nies are trying to make the push towards paperless. It seems that the benefits, such as
savings, the ability to market yourself as a “green company,” increased productivity, better control overyour processes and document management, far outweigh the negatives.
In our “Going Green/Paperless” section, you will learn from Tommy Duncan, CMT that going paperlessis of great concern when it comes to fraud detection. The loss of “wet signatures” leaves room for would-be fraudsters to take advantage of the system. Sharon Matthews shows how lenders are using technolo-gy to analyze the data behind what you and I see on the screen to mitigate fraud. In the contribution byErik Wind, he shares with us how many are finding that while “paperless” might not be possible, thereare a great many benefits of “just less paper.” The section wraps up with a piece from Greg Smith of Xeroxwhere he shares information on his company’s P.I.e (Paper, imaged documents and electronic documents)program.
What business does a “print publication” like National MortgageProfessional Magazine have featuring a section on going green? Arewe hypocritical?Let’s face the facts, while we are all getting more and more news from the Internet, the magazine formatstill provides a medium that educates us about areas that we didn’t know we should be “in the know”about. This is evident by our increasing paid subscriber base (that’s you and thank you!). Furthermore,more than 70 percent of our readers choose to read our publication online (yes, even though 25 percentof those choose to print it out).
On the road again …My first conference of this year was the recent Regional Conference of Mortgage Bankers Associations inAtlantic City, N.J. and all I can say is, “Wow!” What a turnout! More than 1,400 attendees were on hand toshare in this magical experience. I am not talking about the plastic-fabricated magic that we were sur-rounded by at The Trump Taj Mahal, but an organic magic created from the collaboration and networkinggoing on with the industry’s best. The mortgage industry has filtered out the garbage and is left with theproverbial cream of the industry’s crop. And they were all there at The Trump Taj. Here’s a shocker … newwholesale lenders! Overall, it was a great event that gave the feeling of a renewed sense of pride aboutbeing a mortgage professional in 2010.
I hope you enjoy yet another edition of National Mortgage Professional Magazine. We are on the vergeof the one-year anniversary of this undertaking, and so far, have received nothing short of rave reviews.The proof is in you, our readership, who turns to us for the latest in industry news, through both ourmonthly print edition and our daily updated Web site, NationalMortgageProfessional.com. I’m happy toreport that our blogger community is growing, as is the number of registered users on our site each day.
Again, I thank you for your support of our publication over the past year, and I raise my glass to toastmany more years to come.
Sincerely,
Andrew T. Berman, Executive Vice PresidentNMP Media Corp.
National Credit Reporting Association Inc.125 East Lake Street, Suite 200 � Bloomingdale, IL 60108
Phone #: (630) 539-1525 � Fax #: (630) 539-1526Web site: www.ncrainc.org
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The National Association of Mortgage Brokers
7900 Westpark Drive, Suite T-309 � McLean, VA 22102Phone: (703) 342-5900 � Fax: (703) 342-5905
Web site: www.namb.org
President—Jim Pair, CMCMortgage Associates Corpus Christi6262 Weber Road, Suite 208Corpus Christi, TX 78413(361) [email protected]
President-Elect—William Howe, CMC, CRMSHowe Mortgage Corporation9414 E. San Salvador Drive, #236Scottsdale, AZ 85258(602) [email protected]
Vice President—Michael D’Alonzo, CMCCreative Mortgage Group1126 Horsham Road, Suite DMaple Glen, PA 19002(215) [email protected]
Secretary—Ginny Ferguson, CMCHeritage Valley Mortgage Inc.5700 Stoneridge Mall Road, Suite 150Pleasanton, CA 94588(925) [email protected]
Treasurer—Don Frommeyer, CRMSAmtrust Mortgage Funding Inc.200 Medical Drive, Suite DCarmel, IN 46032(317) [email protected]
Joe CamarenaThe Mortgage Source10120 Southwest Nimbus Avenue, Suite C-7Portland, OR 97223(503) 443-1060 � [email protected]
John Councilman, CMC, CRMSAMC Mortgage Corporation2613 Fallston Road � Fallston, MD 21047(410) 557-6400 � [email protected]
Olga KucerakCrown Lending8700 Crown Hill Boulevard, Suite 804 � San Antonio, TX 78209(210) 828-3384 � [email protected]
Walt ScottExcalibur Financial Inc.175 Strafford Avenue, Suite 1 � Wayne, PA 19087(215) 669-3273 � [email protected]
Don StarksD.C. Starks Mortgage Associates Inc.141 South Main Street � Bourbonnais, IL 60914(815) 935-0710 � [email protected]
Marty Flynn—President(925) 831-3520, ext. [email protected]
Tom Conwell—Vice President(248) [email protected]
Daphne Large—Treasurer(901) [email protected]
William Bower—Director(800) [email protected]
Mike Brown—Director(800) [email protected]
Susan Cataldo—Director(404) 303-8656, ext. [email protected]
Nancy Fedich—Director(908) 813-8555, ext. [email protected]
Sanford (Sandy) Lubin—Director(805) [email protected]
Judy Ryan—Director(800) 929-3400, ext. [email protected]
Tom Swider—Director(856) 787-9005, ext. [email protected]
Donald J. Unger—Director(303) 670-7993, ext. [email protected]
NCRA StaffTerry Clemans—Executive Director(630) [email protected]
Jan Gerber—OfficeManager/Membership Services(630) [email protected]
PresidentLiz Roberts-Fajardo, GML(702) [email protected]
President-ElectGary Tumbiolo, CMI(919) [email protected]
Senior Vice PresidentSharon Patrick, MML, CMI(386) [email protected]
Vice President/Northwestern RegionJill M. Kinsman(206) [email protected]
Vice President/Western RegionTim Courtney(760) [email protected]
Vice President/Central RegionCandace Smith, CMI(512) [email protected]
Vice President/Greater NortheastRegionColleen-Therese McKeever, CMI(646) [email protected]
Vice President/Southeastern RegionJessica Edmonston(919) [email protected]
SecretaryLaurie Abisher, GML, CMI(661) [email protected]
TreasurerKay Talley, MML(919) [email protected]
ParliamentarianHulene Bridgman-Works(972) [email protected]
NAMB Board of Directors
National Association of ProfessionalMortgage Women
P.O. Box 140218 � Irving, TX 75014-0218Phone: (800) 827-3034 � Fax: (469) 524-5121
Web site: www.napmw.org
Officers
Directors 2010 Board of Directors
National Board of Directors
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The Mortgage Meltdown andAppraiser Selection
Within the past couple of years, we haveexperienced a complete meltdown ofour economy, the mortgage industryand our banking system. As a result, wehave witnessed wholesale changes in theway appraisals are purchased. Mortgagebrokers, loan officers and anyone elsewith a financial interest in a transactionare unable to purchase appraisals.
This requirement hasbeen imposed by FannieMae, Freddie Mac andthe Federal HousingAdministration (FHA) onall loans, either pur-chased or made by them.In today’s market, thatrepresents most, if notall, of the mortgage loanmarket. In the past, WallStreet was buying loans,but that practice hasground to a halt due toall of the bad loans. As aresult, federally-backedmortgages are practicallythe only game in town.
There has been muchcomplaining by mortgagebrokers, loan officers and even Realtors andappraisers over this newpractice. Unfortunately, the changecomes at a time when loan volumes arein the gutter, property values are in thetank, home foreclosures are at an all-time high, and the overall economy ison the ropes. When we combine all ofthese factors, it makes the origination ofa marginal loan difficult, to say theleast. Some say that these marginalloans should not be made; others saythat these circumstances make apprais-ers less accountable.
Many have complained about thisnew process and the new rules. Is itlikely to change, or are we stuck with asystem where lenders and Realtors arenot going to be able to select and orcommunicate with appraisers in thefuture?
Before determining the answer, wemust consider the fact that our entirefinancial system was in danger of goingdown the tubes as a result of the mort-gage meltdown. Practically everyone inour society was damaged in one way oranother by the collapse of the system,and, like it or not, most of the problemstemmed from toxic mortgages. Due to
this catastrophic failureof the system, our politi-cal leadership cannot andwill not take this problemlightly. While there is suf-ficient blame to goaround, the consensus ofopinion is that inflatedappraisals were largely toblame for the crack in themonetary system. It willnot be easy going forwardfor regulators and politi-cians to relax appraisalprocurement rules set inplace by Fannie, Freddieand the FHA. Specifically,what may we expect inthis regard?
For starters, there islikely to be a tighteningof the mortgage system inmonths to come like we
have never seen. Interest rates aregoing to increase, mortgage qualifica-tion requirements will continue to berigid for many would-be borrowers,and appraisal scrutiny will be tougher,not lighter.
The powers that be are currently say-ing that the root of the problem isappraiser pressure being imposed bythose selecting appraisers, purchasingappraisals and reviewing appraisalsand that these are the very peoplestanding to gain by collecting fees fromthe closing of the loan transaction.Further, appraisers, in some cases, areaccused of collecting fees on appraisals,which they inflate just to insure that
continued on page 7continued on page 6
“While there is sufficient blame to goaround, the consensus
of opinion is thatinflated appraisals
were largely to blamefor the crack in themonetary system.”
By Charlie W. Elliott Jr., MAI, SRAColumbia Law Schoolstudy finds: Federal actionresulted in more defaultsand riskier lending
Federal action to exempt nationalbanks from state anti-predatory lend-ing laws resulted in more defaults andriskier lending compared to otherbanks, found a study funded by theNational State Attorneys GeneralProgram at Columbia Law School. Atthe same time, the study found anti-predatory lending laws enacted bysome to protect consumers from abu-sive and unfair mortgage practicessaved many people from losing theirhomes to foreclosure.
“The implications of these results areextraordinarily important,” said JamesTierney, director of the National StateAttorneys General Program. “Thisreport proves that that vigorous stateconsumer protection laws make a posi-tive difference for consumers through-out the country. The federal govern-ment must respect that clear fact.”
The study, titled “The PreemptionEffect: The Impact of FederalPreemption of State Anti-PredatoryLending Laws on the Foreclosure Crisis,”was conducted by researchers at theUNC Center for Community Capital. Itfound foreclosures and risky lendingincreased as a direct result of the pre-emption order enacted by the Office ofthe Comptroller of the Currency (OCC)in 2004.
“Our research confirms that stateconsumer protection laws worked, butthat when one group of lenders ishanded a regulatory free pass, they aregoing to take advantage of it,” saidCenter for Community Capital DirectorRoberto G. Quercia. “In this scenario,unfortunately, we see preemption shift-ing the activities of federally insuredbanks to riskier activities than theywould otherwise have pursued.”
The research findings are the resultof two companion reports that offer thefirst comprehensive look at loan quali-ty and performance following the fed-eral preemption of state laws in stateswith and without strong anti-predatorylending laws.
“This research shows the need for
strong, consistent mortgage laws inNorth Carolina and across the country,”said North Carolina Attorney GeneralRoy Cooper, who wrote the nation’s firstcomprehensive state law combatingpredatory lending as a state senator.“While our laws kept more homeownersfrom risky loans than other states’, ourcommunities are still suffering from toomany foreclosures. Washington needs tolet states set high standards and holdunfair lenders accountable.”
The order exempted nationally char-tered banks and their subsidiaries frommost state laws regulating mortgagelending, including stricter laws that hadbeen passed by some states to curbabusive, “predatory” mortgage lending.
The center analyzed data from 2.5million mortgages before and after fed-eral preemption in states with andwithout anti-predatory lending laws.The mortgages examined were issuedfrom 2002-2006, and represent about30 percent of U.S. mortgages rated sub-prime or Alt-A and about five percent ofall U.S. mortgages during the period.
“We believe these results providestrong support for policy proposals thatwill prevent regulatory loopholes, sothat borrowers can rely on the full pro-tection that state laws afford them,”said Quercia.For more information, visitwww.ccc.unc.edu/preemptioneffect.
California tops Interthinxmortgage fraud riskindex for Q4 of 2009
Interthinx has released its quarterlyMortgage Fraud Risk Report, coveringdata collected during the fourth quar-ter of 2009. The report includes ananalysis of national mortgage fraudand indices for the four most commontypes of mortgage fraud. It indicatesthat most fraud types are on the rise,with increases in the risk index foroccupancy fraud, employment/incomefraud, and property valuation. The lat-ter is up more than 100 percent fromtwo years ago.
The study finds that California nowhas the highest mortgage fraud risk,
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In July 2008, the Federal Reserve Board approved a final rule, which amendsRegulation Z (the Truth-in-Lending Act) and was adopted under theHomeownership and Equity Protection Act (HOEPA). The new rule addressed anddefined “higher-priced mortgage loans” (HPML), a new category of mortgageloans, while also providing additional protection to consumers.1 Most require-ments of the rule were to be implemented on Oct. 1, 2009.
Four key protections were provided to consumers:
� Borrower Ability: Lenders must take a borrower’s ability to repay the loan fromincome and assets other than the home’s value into account when making the loan.
� Verification of Income/Assets: Lenders must verify the income and assetsthey rely upon to determine repayment ability.
� Prepayment Penalty: Prepayment penalties are prohibited if the mortgagepayments can change in the first four years; and, for other higher-priced loans,a prepayment penalty period cannot last for more than two years.
� Escrow Accounts: Lenders must establish escrow accounts for property taxesand homeowner’s insurance for all first-lien mortgage loans.
HPML calculationDetermining if a loan is an HPML origination requires a calculation using a spe-cific “survey-based index,” as follows:
The rule’s definition of an HPML origination captures virtually all loans in thesub-prime market, but generally excludes loans in the prime market.
Effective date: April 1, 2010The escrow account requirement must be implemented on April 1, 2010. Thisdeferral of the requirement until April 1, 2010 was given in order to provide orig-inators sufficient time to set up escrow account procedures. Lenders must becomefamiliar with federal and state escrow account requirements.
Implementation dates� Effective April 1, 2010, the lender will be required to set up an escrow account
for residential real estate-secured HPMLs.
� Effective Oct. 1, 2010, the lender will be required to set up an escrow account fornon-real estate-secured (principal dwelling) HPMLs (i.e., manufactured homes).
Escrow requirementsEffective with the dates indicated above for the respective types of HPMLs, the
Escrow Requirements forHigher-Priced Mortgage Loans
lender must set up an escrow account for loans subject to the HPML escrowrequirements. Escrow mandates only affect first lien transactions. (Exception:Escrow is not required for a condominium, if the condominium association main-tains a master policy that covers the individual condominium units for items suchas homeowner’s insurance and property taxes.)
The HPML origination’s escrow account must be set up to pay items such asproperty taxes and premiums for mortgage-related insurance (such as homeown-er’s insurance) that the lender has required.
RESPA requirementsEscrow requirements under federal law, such as under the Real Estate SettlementProcedures Act (RESPA), must be implemented. RESPA provides detailed escrow require-ments, escrow account calculation methodologies, and also some model forms.2
Some salient RESPA requirements for escrow accounts� Disclosure of the initial escrow account statement at the time an escrow
account is established.� Annual escrow account disclosure.� Certain limitations on how the escrow account is funded, ensuring that the
account is not “overfunded” with the borrower’s money.
State requirementsState law places further requirements on escrow accounts. Some states exceedRESPA’s mandates in limiting the amount of the “escrow cushion.” Additionally, statelaw might require the lender to pay interest on the amount in the escrow account.
Submit your questions …Do you have a regulatory compliance issue that you’d like to see addressed in theRegulatory Compliance Outlook Column? If so, e-mail your issue or concern toJonathan Foxx at [email protected].
Jonathan Foxx, former chief compliance officer for two of the country’s top publicly-traded residential mortgage loan originators, is the president and managing directorof Lenders Compliance Group, a mortgage risk management firm devoted to provid-ing regulatory compliance advice and counsel to the mortgage industry. He may becontacted at (516) 442-3456 or by e-mail at [email protected].
Footnotes1—Compliance with the new rules, other than the escrow requirement, is manda-tory for all applications received on or after Oct. 1, 2009. The escrow requirementhas an effective date of April 1, 2010 for site-built homes, and Oct. 1, 2010 formanufactured homes2—See 24 CFR 3500.17, RESPA’s Escrow Requirements section, for further informa-tion on RESPA escrow requirements. The U.S. Department of Housing & UrbanDevelopment (HUD) publishes a number of Public Guidance Documents that illus-trate the proper way to fund and manage an escrow account.
Survey-Based IndexThe rule establishes a category of “higher-priced mortgage loans” secured by aconsumer’s principal dwelling, defined as a first lien mortgage that has anannual percentage rate (APR) that is 1.5 percentage points or more above the“average prime offer rate,” or, if the loan is a subordinate lien loan, 3.5 per-centage points above this Survey-Based Index.
The average prime offer rate index is based on a survey published byFreddie Mac, and can be found on Freddie Mac’s website at the following tab:Weekly Primary Mortgage Market Survey.
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CSBS and AARMR reachsettlement agreementwith CitiFinancial
The Conferenceof State BankSupervisors (CSBS)and the AmericanAssociation ofR e s i d e n t i a l
Mortgage Regulators (AARMR) haveannounced a 35-state settlement, in whichCitiFinancial agreed to remit a $1.25 millionpenalty. The agreement between statemortgage regulators and CitiFinancialwas executed following an examinationconducted by the Massachusetts Divisionof Banks to determine compliance withstate and federal consumer protectionlaws. The examination found thatCitiFinancial had failed to report 91,127residential mortgage loans to the federalgovernment as required by the HomeMortgage Disclosure Act (HMDA). The res-idential mortgage loans that were omit-ted from CitiFinancial’s HMDA LoanApplication Register were originatedbetween 2004 and 2007. The failure toreport the loans was apparently causedby an internal systems error atCitiFinancial that went undetected untilthe Massachusetts Division of Banksexamination.
“HMDA remains the primary tool weutilize to ensure compliance with fairlending laws and regulations,” saidSteven L. Antonakes, MassachusettsCommissioner of Banks. “By failing toaccurately report all required transac-tions, CitiFinancial hampered our abilityto complete that assessment. Therefore,this agreement will ensure that the sys-tems, training, and appropriate over-sight and controls are in place to avoid asimilar occurrence in the future.”
Major terms of the agreementinclude:
� CitiFinancial already resubmittingcorrected and complete HMDAreports to the Federal ReserveSystem for the years 2004-2007;
� CitiFinancial engaging an independ-ent consultant to conduct a thor-ough fair lending review to ensurethe data from the previously unre-ported 91,127 mortgage transac-tions does not in any way demon-strate a pattern or practice of dis-criminatory lending practices;
� CitiFinancial will thoroughly reviewand substantially modify its internalcontrol procedures to ensure allreportable HMDA transactions areaccurately compiled and reported; and
� CitiFinancial will remit a penaltytotaling $1.25 million to the 35 statesthat are party to this agreement.
“This settlement highlights the valueof state enforcement of federal con-sumer protection laws,” said Mark
with an index value of 222. Nevada,which had the highest index for theprevious five consecutive quarters,drops to second place with an index of220, and is closely followed by Arizonawith an index of 211. Florida remainsin fourth place with an index of 179,while Colorado is in fifth place at 153.
The occupancy fraud risk indexrose 16 percent since last quarter—the first significant increase in theindex since the fourth quarter of2006. The magnitude of the quarter-on-quarter increase suggests thatoccupancy fraud risk will be a seri-ous issue going forward, as continu-ing price declines and get-rich-quickschemes lure investors back into themarket and as builders face continu-ing difficulty in moving unsoldinventory.
Despite a slight (four percent) quar-ter-on-quarter decrease, the propertyvaluation fraud risk index is up 40 per-cent over last year and up more than100 percent from two years ago.Schemes involving short sales, realestate-owned (REO) inventories, whole-sale flipping, and refinancing by bor-rowers whose equity has beenimpaired by falling real estate valuescontinue to drive this index.
Interthinx analysts expect lendersto focus more closely on fraud risk mit-igation as they work to emerge fromthe downturn. This will help guardagainst the potential for fraud as alarge number of adjustable rate mort-gage loans—especially “option” ARMswith negative amortization features—reset between now and the first quar-ter of 2012.
“Lenders have expressed theirappreciation for our investment to pro-vide a more detailed analysis of thedata we’ve been collecting,” said KevinCoop, president of Interthinx. “Ourmost recent report provides data thatlenders can use to anticipate and pre-pare for trends that will impact theirrisk mitigation strategies. The reportcan ultimately make them more suc-cessful at identifying fraud before loansare funded.”
“The Interthinx Mortgage Fraud RiskReport is fast becoming the primarysource of information about fraud riskin the mortgage industry, and withgood reason,” added Mike Zwerner,senior vice president for Interthinx.“Interthinx has the depth of data toidentify, categorize, and help lenderseffectively mitigate mortgage fraudrisk. Using our own proprietary dataalong with outside public dataresources, the quarterly report revealswhere mortgage fraud risk is occurring,where it is migrating, and howschemes are changing. We’re pleasedthat more institutions are relying onour reports.”For more information, visitwww.interthinx.com.
news flash continued from page 4
The Test is the BarIt made no sense to me. When I heard you could take the national test before sit-
ting for the 20 hours of pre-license education (PE), I’m thinking what a regulatoryboondoggle. How could they draft up something this illogical? Then I learned it was-n’t a mistake; this disconnect was quite purposeful.
Rich Madison, the NMLS Director of Education Programs explained to our educa-tion working group that, “it is not pre-testing education, it is pre-licensing education.”He added, “there is no connection between the education requirements of the SAFEAct and the national test.” This seemed curious to me. I knew it needed further ex-ploration. What were they up to?
Education Minimized, the Test Emphasized The twenty hours of required PE is designed to satisfy a bare minimum of MLO
competency requirements. The twenty hours only requires 8 hours of core education;the remaining twelve hours is elective. Each state is allowed to use as many of theseelective hours for any state education it deems appropriate. It began to dawn on methat education, though important, was not the focus of MLO competency validation.
Clearly, the bar of entry is the national test. It supplies the true “capability meas-urement” for MLO’s. The national test is designed to be both broad and deep. The testcovers 146 different areas of study. The test questions are interpretive in nature, re-quiring a firm conceptual understanding of these subjects in order to score well. Thetest is the bar and it is set quite high.
Test Break DownThe national test component entails 100 questions that include 10 un-scored questions
used for developmental purposes. The questions are all multiple choice and you will have150 minutes for completion. The test is broken down into the following four categories.
� Federal mortgage related laws (35%)� General mortgage knowledge (25%)� Mortgage loan origination activities (25%)� Ethics (15%)
My concern for brand new students of the mortgage industry is the MLO activitiessection, which covers more that 62 separate subjects. A new person with no contex-tual understanding of the business will naturally struggle in this area.
My concern for an experienced mortgage veteran is the federal law and the ethics sec-tions, which explore 14 different federal laws and consumer protections. How long hasit been since you studied the HOEPA prohibitions? Do you understand the difference be-tween providing ECOA based adverse action vs. FCRA based adverse action notices?
A “SAFE Smart” ApproachDon’t think you are going to waltz into this test and ace it. The questions are filled
with double negatives and trip words designed to throw you off. This is first a read-ing test and second, a knowledge bar.
The industry’s new bar of entry is the 100-question national test. My SAFE Smartadvice to you is take a test specific 20-hour PE course first, then get a good exam preptool and buckle down to study.
Paul Donohue, CRMS is a 23-year industry professional and founder of Abacus MortgageTraining and Education. Paul served on two NMLS working groups, establishing the newnational education protocols. Go to AbacusMortgageTraining.com to find out more aboutyour obligations for testing, education and licensure, or call (888) 341-7767.
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“By using PCS’s VOE service, I was able to move thecost onto the HUD1 and virtually get the VOE’s done atno cost to my company”
“PCS’s high level of customer service ensures that myloans close on TIME!”
the loan closes and of continuing to getbusiness from the people who hiredthem. Even when it is not true, the per-ception is there, and, because of this, itwill be hard for regulators and legisla-tors to allow business as usual.
In conclusion, it is not fair to any ofthe self-respecting professionals con-cerned, including lenders, appraisersand Realtors, to be subjected to thetemptation to commit fraud or to bepositioned where the perception wouldbe that they are acting in a less-than-pro-fessional manner. Neither is it fair to thetaxpayer for there to be a door for indus-try participants to practice business insuch a way that the taxpayer is on thehook to cover the cost of avoidable badloans. Nor is it fair to the borrower to payfor an appraisal and a loan whereby heor she is exposed to foreclosure due tounscrupulous business practices.
Finally, it is not fair to the regulators,who must enforce rules, to be put in aposition where there is opportunity forfraud on their watch. Given all of the rea-sons above, stricter rules are not only like-ly to be implemented, but they are alsonecessary to protect a system from whichwe all benefit from as professionals.
value nation continued from page 4
If these rules eliminate a few badapples, so be it. In the past, the badapples had the advantage of siphoningoff business from those who follow therules. Under today’s new system, theplaying field is level and the ethical pro-fessionals will enjoy the business pro-vided by our industry, without beingput in a position of their having to sub-scribe to the same underhanded tacticsof the less-than-ethical practitioners inorder to earn a living.
Yes, stricter rules will come at aprice, but it is worth the investment. Itis a necessary cost of doing businessand it will serve to protect all of societyfrom the type of catastrophic eventsthat we have experienced and are expe-riencing. Going forward, appraisersmust continue to be insulated from thepressure of those having a financialinterest in loan transactions.
Charlie W. Elliott Jr., MAI, SRA, is presi-dent of Elliott & Company Appraisers, anational real estate appraisal company.He can be reached at (800) 854-5889, e-mail [email protected] or visit hiscompany’s Web site, www.appraisalsany-where.com.
So … what’s the answer? Be knowl-edgeable. That is why we teach the sec-ondary markets as part of the CertifiedMortgage Advisor Program. Hedge yourbets. Make sure your business model isdiversified. Putting all your eggs in onebasket is never a good idea.
I asked Eric Holloman, our secondaryexpert and the chief executive officer ofRateLink, about his view of the future.He says that it is important to watch thenational news. For example, many loanofficers are trying to figure out whytheir loans are getting underwritten todeath right now when the crisis shouldbe easing. Yet, if you read about FannieMae repurchases and what lenders aregoing through in this regard, it makesperfect sense. If the loan is not perfect,
when something goes wrong, it is beingthrown back in their face. It is not onlyabout rates, it is about how someonewill have to navigate the process toachieve the American dream of home-ownership.
Dave Hershman is a leading author forthe mortgage industry with eight booksand several hundred articles to his credit.He is also head of OriginationProMortgage School and a top industryspeaker. Dave’s Certified Mortgage AdvisorProgram can be found at www.webina-rs.originationpro.com. If you would liketo stay ahead of what is happening in themarkets, visit ratelink.originationpro.comfor a free trial or e-mail [email protected].
One word … that says it all. We are con-stantly trying to “predict” the future.When you go on the street and meetwith real estate agents, they ask you,“What do you think will happen withrates?” When you set up your businessplan, it is all about know what will hap-pen within several areas of the mar-kets, such as refinances versus purchas-es. Consider this prediction releasedrecently:
“Refinances in 2010 will be down 52percent and purchase mortgage vol-ume will be down five percent from2009, according to the latest projec-tions from iEmergent, a Des Moines,Iowa-based market research firm.”
Others have predicted rising ratesthis year and cite the following factors:
� The Federal Reserve Board with-drawing from the mortgage-backedsecurities (MBS) markets
� The Fed also starting to tightenmonetary policy as the economyrecovers. The Fed has alreadyincreased the Discount Rate as a“symbolic” gesture.
� The markets getting spooked bylarge government deficits which willfuel the threat of inflation. As thegovernment borrows more, thisforces rates up because of increasedsupply in the bond markets.
Here is the problem. We cannot pre-dict the future. One event tomorrowcould change everything. That is why Ihave never been a believer in technicalcharts. It is the fundamentals which areimportant. Fundamentally, we areheading into an economic recovery,and if all goes well, rates will rise, butnot drastically. If the economy gets toostrong too quickly or steps back into arecession, all bets are off. These factorsare so entwined that we never knowhow they will come out. For example, ifthe recovery is stronger, that meanshigher rates because of the risk of infla-tion. But a stronger recovery alsomeans that the deficit will start todiminish more quickly and that couldtranslate into lower rates. Finally, if the
recovery is stronger, people will havemore jobs and buy more houses, whichmakes it more likely that housing pricesare not falling and mortgages become afavored investment again. Confusedyet?
Your job as an originator is to stay ontop of what is happening. Today, thatmeans every hour. You need not beable to predict the future. However, youshould know what factors are in playand what events are on the horizon thatcould impact the markets. For example,if you don’t know that the employmentreport is being released the first Fridayof every month, you cannot stay ontop of the markets. I get a text mes-sage on my phone from RateLink(www.RateLink.com) that providesupcoming events, as well as changesin the markets.
Once again, predictions are not onlyabout rates. The economy itself pro-vides much suspense for us. For exam-ple, I am surprised at how many origi-nators are starting loan modificationefforts now. I have often said that loanmods might be a great service from oneto four years. It is now almost two yearsafter I started saying that. Some see pre-dictions of five million foreclosures tocome on a market and predict that loanmods will be going strong five yearsfrom now. But the fact is that a strongereconomy, along with low rates and a taxcredit, could shorten this period to 18months. And that would be good for allof us. Do I know the answer? No.
However, I do know the factors in playthat could change the time frame sig-nificantly. Even the value of the dollarbecomes important because if the dol-lar stays weak, this increases demandfrom foreign investors. Basically,American real estate is on sale. And thesale is really great if you are from acountry with a strong currency.
Predictions
“Refinances in 2010 will be down52 percent and purchase mortgagevolume will be down five percentfrom 2009, according to the latestprojections from iEmergent, a Des
Moines, Iowa-based marketresearch firm.”
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NAMB Setting the Bar onProfessionalism in theMortgage IndustryA Message From NAMB President Jim Pair, CMC
If you did not attend the 2010 National Association of MortgageBrokers Legislative & Regulatory Conference in February, you missedone of the very best conferences NAMB has sponsored that I haveever attended. Every panel covered a topic that was crucial to ourindustry, and the panelists were experts on the topics presented.There was plenty of time for the attendees to address the panelists
with questions that were answered in a straightforward manner. The highlight ofthe event was the luncheon where FederalHousing Administration (FHA) CommissionerDavid H. Stevens spoke to us. He provided us withsome important information, including discussingthe important role the mortgage broker plays inthe mortgage distribution channel.
Many of the attendees came up to me orexpressed in e-mails, the same impressions I hadof the conference. Much of the credit for such asuccessful conference must be given to Jon Otto,NAMB’s director of government affairs. Jon andthe staff of NAMB were responsible for the organ-ization of the conference, selecting the topics forthe various panels, arranging for the panelists tospeak and locking up Commissioner Stevens as our luncheon speaker. Manythanks to Jon and his team for a conference that was well-planned, well-coordi-nated, and as I said previously, one that was very informational on all the currentissues impacting our industry.
The Legislative & Regulatory Conference is just one of the many benefits for NAMBmembers. It is the only conference NAMB holds that is restricted to NAMB membersonly. As a member attending the conference, you are receiving information beforeanyone else, as evidenced by Commissioner Stevens’ announcement at our luncheon.
In the current market environment, there are two more very important bene-fits for NAMB members.
The Lending Integrity Seal of Approval sets you apartfrom all the other loan originators. As a NAMB memberlicensed under the SAFE Act and certified by your state asso-ciation, you are qualified to use the Seal. By using the Seal,you have pledged to abide by a strict Code of Ethics,Professional Standards and Best Lending Practices, and aNAMB grievance review process.
The Seal should be used in all in your advertising, busi-ness cards, stationery, etc. You can go to www.lendingin-
tegrity.org and learn how to download the Seal for use in radio ads, print ads,press releases and letters to your customers and prospects. There is even a videothat you can use in presentations to Realtors, business groups or other groups thattells the story of the Lending Integrity Seal of Approval. The Seal will truly set youapart from loan originators who do not qualify.
Besides qualifying for the Lending Integrity Seal of Approval, a NAMB membermay go one step further and obtain a designation. NAMB offers the CertifiedMortgage Consultant (CMC), the Certified Residential Mortgage Specialist (CRMS)and the General Mortgage Associate (GMA) designations. Anyone receiving their
designation has distinguished themselves from other originators, even thosequalified to use the Lending Integrity Seal of Approval. Obtaining a NAMB-certi-fied designation means you have passed a rigorous test, have experience in theindustry and met the necessary qualifying points to earn the designation. Go towww.namb.org and click on the “Certification” tab and learn more about how youcan achieve the highest level of professionalism and really set yourself apart fromall other loan originators.
These are only a few of the benefits available to you when you become a NAMBmember. To learn more on how to become a member, go to www.namb.org andclick on the “Membership” button, scroll down to “Join Now” and click to join. Youwill find all the information needed to join the only association working to pro-tect our industry and the consumer.
Jim Pair, CMC is with Mortgage Associates Corpus Christi and is president of the NationalAssociation of Mortgage Brokers. He may be reached by e-mail at [email protected].
Certification? Certainly!How Do You Know?A Message From NAMB CertificationsCommittee Chair Pava J. Leyrer, CMC, CRMS
I am sure everyone is buzzing with licensing requirements that allloan originators for non-depositories have to complete in the nexttwo to four months. Whether we agree or not, it is the law and wemust comply with it to be licensed. The reason I bring this up isbecause of standards and a basic thought process.
Do you know just the basics to do your job, or are you above thecurve and make it part of your profession to excel? To be licensed, you have therequired minimum in each state and must follow those. To receive a certification,it is now your choice and opportunity to excel above the basics to a higher leveland set yourself apart from everyone else.
How do you know though which to choose? I have personally seen differentofferings for distinction and there are even more coming out now for varioustopics. When I was reviewing those options and trying to decide, I looked at whatcredentials and knowledge was needed. As I reviewed the NAMB certificationsand the goals set for them, I realized that this was more than just a “pay forpaper” certification. I was not buying the right to have the CMC (CertifiedMortgage Consultant) or CRMS (Certified Residential Mortgage Specialist) titles. Ihad to work for them and know my profession and then prove it through a testto gain those honors.
I have always been passionate about my industry and profession. It has beenan area that the experienced train and share with those wanting to break into ourindustry. I believe that those of us still fighting for what we believe in and whatwe have to offer our valued customers and communities, can also recognize theimportance of defining our knowledge and taking the next step to becoming cer-tified and maintaining these certifications.
Take time today to know where you want to stand in this industry and howbecoming NAMB-certified can benefit you and your business.
Pava J. Leyrer, CMC, CRMS, is president and owner of Heritage National MortgageCorporation in Grandville, Mich., and Certifications Committee chair for theNational Association of Mortgage Brokers. She may be reached by phone at (616)534-4993 or e-mail [email protected].
For more information on the National Association of Mortgage Brokers, visit www.namb.org.
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Here’s what our customers are saying:
“PCS appraisal management services allowedme to create a virtual firewall between the loanofficers and the appraisers, yet still maintain a high level of quality, fast, and accurate appraisals”
“Bank of America is a strong propo-nent of the home retention goals of theMaking Home Affordable program, andwe have placed HAMP at the center ofour broad-based mortgage modifica-tion efforts,” said Schakett. “Recently,we became the first servicer to formal-ly agree to participate in the HAMP sec-ond-lien modification program, furtherdemonstrating our commitment toputting as many financially strugglinghomeowners as possible into a moreaffordable and sustainable situation.”
Bank of America is also a leadinglender-participant in the HomeAffordable Refinance Program (HARP).Nearly 152,000 Bank of America cus-tomers have benefitted through theenhanced loan-to-value and stream-lined provisions of that prong of theMaking Home Affordable initiative. Intotal, Bank of America helped morethan 1.1 million customers refinancetheir home in 2009.For more information, visit www.banko-famerica.com.
NAHB poll showsAmericans firmly support governmenthousing initiatives
Americans remain strong-ly committed to federalsupport for homebuyers,according to a recentsurvey of U.S. house-holds conducted by the
National Association of Home Builders(NAHB) by RT Strategies. Roughly 68 per-cent of those polled said the governmentshould continue to support housing,and 65 percent believe the govern-ment should be doing more to keepfamilies from losing their homes toforeclosure.
RT Strategies, is a non-partisan pub-lic opinion polling firm based inWashington, D.C. RT Strategies inter-viewed a representative sample of1,000 adults nationwide by telephoneusing live interviewers on Jan. 29-31,2010. The sample included 170 inter-views with respondents from cell-phone-only households.
Among those polled, some keygroups said the government shouldcontinue to play a vital role in main-taining a healthy housing market. Forexample, 78 percent of all potentialhomebuyers, including 81 percent ofrenters intending to buy a home in thenear future, said the governmentshould continue to support housing.
Roughly 65 percent of homeownerssaid the government also needs to domore to keep families from losing theirhomes. Support for more foreclosureprotection was not confined merely tocurrent homeowners. Among renters,84 percent said the government needsto do more to helped strapped borrow-ers. This issue is particularly importantto women, with 71 percent supporting
Pearce, president of AARMR and ChiefDeputy Commissioner of the NorthCarolina Office of Commissioner ofBanks. “State regulators supplementexisting federal efforts and help ensureconsumer protections are rigorouslyenforced. This settlement demon-strates the ability of state regulators towork together effectively to addressour systemic compliance concerns witha large national lender.”
State regulators have significantlyenhanced multistate cooperation inrecent years through projects such asthe development and launch of theCSBS/AARMR Nationwide MortgageLicensing System (NMLS) and the cre-ation of the Multi-State MortgageCommittee to provide seamless super-vision of mortgage companies operat-ing in more than one state.For more information, visitwww.csbs.org or www.aarmr.org.
Bank of America com-pletes 12,700 permanentHAMP modifications
Bank of Americahas realized sig-nificant gainsmodifying mort-
gages through the government’s HomeAffordable Modification Program(HAMP). At the reporting deadline for theU.S. Department of Treasury’s February2009 monthly servicer progress report,Bank of America had quadrupled thenumber of completed modifications forits customers since the previous month’sreport.
More than 12,700 Bank of Americacustomers now have a permanentHome Affordable modification, upfrom nearly 3,200 a month earlier.Another 13,700 permanent modifica-tions are pending, meaning finalmodified loan terms have beenapproved and documents have beensent for the customers’ signatures,which will be their final step to acompleted modification.
“In the past month, our concertedcustomer outreach initiative has drivena substantial increase in the rate ofconversions from trial to permanentmodifications, as we anticipated in ourrecent reports of HAMP progress,” saidJack Schakett, credit loss mitigationstrategies executive for Bank ofAmerica Home Loans. “These resultsare attributable to the resources—including expansion of our defaultmanagement staffing to more than15,000—and focus we have placed insupport of this and other homeowner-ship retention programs.”
Since January 2008, Bank ofAmerica has helped 700,000 customerswith a loan modification through ourown programs and with trial and com-pleted modifications through theAdministration’s Home AffordableModification Program (HAMP).
news flash continued from page 6
greater foreclosure protection, com-pared to 58 percent of men.
Keeping families in their homes isalso particularly important to first-timehomebuyers, as 78 percent of youngadults under age 30 support greaterforeclosure protection. And 69 percentof adults who are 30-44, the prime agerange for move-up buyers, said theysupport more foreclosure protection.
Overall, roughly two-in-three respon-dents said they own their home. Amongrenters, about two-in-three intend tobuy a home in the near future. In addi-tion, 15 percent of current home own-ers intend to buy a home in the nearfuture.
The poll asked respondents for their viewsregarding the Worker, Homeownership, andBusiness Assistance Act of 2009 thatextended a tax credit of up to $8,000 forqualified first-time homebuyers purchas-ing a principal residence. The legislation,which was signed into law by PresidentObama in November 2009, also author-ized a tax credit of up to $6,500 for quali-fied repeat homebuyers.
Overall, eight percent of those sur-veyed said they intend to take advan-tage of that credit, while another 24percent who might have been interest-ed in using the tax credit said they can-not afford to purchase a home at thistime. Of the 33 percent of respondentswho said they are planning to buy ahome (both renters and current homeowners), roughly 17 percent said theyintend to use the tax credit.
Financial concerns continue to bethe greatest barrier to growth in thehousing market. Among renters nation-wide who aspire to own their ownhome, 39 percent simply don’t have themoney to buy a home at this time, andanother 20 percent said the primaryobstacle is that they feel they cannotqualify for a loan. Larger economicissues also play a role, as 18 percentsaid that job security is the greatestobstacle they face in trying to buy ahome.
Weakness in the housing marketitself may be blocking some home own-ers who would like to buy a new home,as 29 percent of current homeownerssaid their greatest obstacle to purchas-ing another home is their inability tosell their current home. Beyond that,
among current home owners whoaspire to buy a new home, seven per-cent feel trapped by a mortgage thatexceeds the value of their currenthome, 14 percent fear that the value ofa new home might fall after they makethe investment, and 13 percent sayhome prices are just too high to allowthem to buy a new home at this time.
Forty percent of respondents saidtheir home is their most valuableinvestment, twice the number who citeany other single investment—401kaccounts, savings accounts and CDs,stocks and bonds, or mutual funds—astheir leading family investment.For more information, visit www.nahb.com.
FICO finds disturbingtrends in consumer credit behavior
FICO, a provider ofanalytics and deci-sion management
technology, has announced new find-ings uncovered in the latest analysisoffered by its subscription service forbusinesses, FICO Score Trends.Reversing a long historic trend, mort-gage default risk for consumers withhigh FICO scores now exceeds theircredit card default risk, even thoughmost credit cards are unsecured creditand mortgages are secured by realestate. The company observed a paral-lel rise in mortgage delinquencies forhigher-scoring U.S. consumers.
According to the analysis in FICOScore Trends, recent repayment behav-ior across the financial services industryhas shifted significantly from historicaltrends. In 2008-2009, bankcardaccounts were just 1.6 times more like-ly to become 90 days delinquent thanwere mortgage loans. By comparison,in 2005 bankcard accounts were morethan three times more likely to become90 days delinquent. And for borrowersscoring high on the FICO score’s 300-850score range, the level of repayment riskactually has become greater for realestate loans than for bankcards. In2009, 0.3 percent of consumers withFICO scores between 760-789 defaultedon real estate loans, compared to 0.1percent who defaulted on bankcards.
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Each month, National MortgageProfessional Magazine will focus on oneof the industry’s top players in our“Mortgage Professional of the Month”feature. Our readers are encouraged tocontact us by e-mail at [email protected] for consideration in beingfeatured in a future “MortgageProfessional of the Month” column.
This month, we had a chance to chatwith Steven A. Milner, president andchief executive officer of US MortgageCorporation d/b/a Mortgage Concepts, acompany he founded in 1994. Milnerhas been a retail loan officer since 1981.
He was born in Los Angeles, and atthe age of 12, moved to the East Coastand his family settled in New York. Theymoved around the state a bit, movingfrom the Bronx, and then on to Baysideand eventually, out to Long Island, set-tling in Brentwood.
He graduated from Brentwood HighSchool in 1967 and went to college atFarmingdale State College, where hefocused on engineering. Steven eventual-ly switched over to the field of educa-tion, where he became a school teacherin the Brentwood School District on LongIsland.
In 1986, he formedMortgages Unlimited Inc., aNew York State-registered mort-gage broker. In September1994, Mortgage Conceptsbecame operational, and in1997, became a New YorkState-licensed mortgage banker.Steven is actively involved withthe day-to-day operations ofeach department in the compa-ny, and is in constant commu-nication with each departmentmanager who represents ateam of dedicated, highly-skilled mortgage banking pro-fessionals. Currently, MortgageConcepts is a licensed mort-gage banker and is an FHA/VA
Direct Lender, in 18 states and growing,providing retail mortgage lending andreverse mortgage lending.
How did you first get startedin the mortgage industry?As the Vietnam War began to escalate,the federal government was givingdeferments to school teachers, so in1969, I changed my major from engi-neering to education. I enrolled in theteaching program at Stony BrookUniversity and finished my degreethere. Ironically enough, I did my stu-dent teaching at the elementary schooloriginally attended in Brentwood, N.Y.
I was in the education field for about18 years, provisionally certified toteach kindergarten through sixthgrade. In 1973, I got married, and atthe time, I was making $25,000 as aschool teacher and my wife was alsomaking around $25,000 annually as ateacher. In 1978, my son, Scott, wasborn and we immediately went frommaking $50,000 a year to $25,000 ayear, as my wife became a stay-at-homemom. The single income stream neces-sitated that I start hustling around, con-tinuing to go to school at night and
work part-time jobs, including a bas-ketball coach, intramural coach, foot-ball coach and student council advisor.By 1981, I had tried every part-time jobjust to make a few extra bucks, includ-ing selling Amway products, while con-tinuing my education at CW Post, study-ing school supervision, as my goal wasto become a principal.
That same year, I went to refinancemy home. When we went for the refi,the salesperson who took the applica-tion also happened to be a teacher inthe Huntington School District on LongIsland. I said, “Gee … if you can do this,I can do this too!” I thought it was agood idea to do loans part-time, givingup all my other part-time jobs to focuson just one thing. I asked if I could setup an interview, and the followingweek, came back and sat down to learnwhat it was all about. I was told thatthey did not do any training, and that Iwould have to teach myself the busi-ness. I was given a copy of the FannieMae/Freddie Mac Seller/Servicer Guide,which was about four inches thick, andwas told to go home and read it.
I came back the following week,after reading the guide, and askedexactly what the position entailed. Atthat time, the 1003 was a one-pagedocument, front and back, not fourpages. I figured it seemed pretty easy,as you had to be detail-oriented, whichI was already as a teacher. I said, “Showme the money! So, he offered me 125percent commission. I could notbelieve that I was going to be paid $125for originating a $100,000 loan.
What people forget is that the 1003was never designed for a loan officer tocomplete … it was designed for theborrower to complete. It’s not rocketscience. Unfortunately, we have madeit into rocket science, but it was alwaysdesigned for a borrower to completewith respect to their income, assets,credit, liabilities and so on. To me, it
was just a matter of establishing a rela-tionship with a borrower, interviewingthem and collecting the information.
I decided to give up all of my part-time jobs in 1981-1982 to just focus onmortgages in a part-time capacity. Inlife, we often come to a fork in the roadand must choose which side to take.Sometimes, it’s the right fork andsometimes it’s the wrong fork, and inmy case, I know I made the right deci-sion. In deciding to give up all of mypart-time jobs, it created a great finan-cial strain on my family income.
How did you find your new-found interest in the mort-gage arena in the beginning?Being that I didn’t recieve any train-ing, I had to approach Realtors, attor-neys, financial planners and account-ants the old-fashioned way and hit thestreets. I did this from 2:30 p.m.-5:00p.m. each day, after I left teaching. Ididn’t give up teaching because I hadto still make a living. So I started totake applications and go to school atnight because my objective was still tobecome a principal.
The first 24 applications that I tooknever closed in my first six months. Itwas getting brutal, as I had lost mypart-time income and now was mak-ing nothing in the mortgage field. Iwas actually losing money because Iwas incurring expenses bringing incoffee, bagels and donuts and all thatstuff … trying to establish relation-ships with my contacts through net-working.
Steven A. Milner, President and Chief Executive Officer of Mortgage Concepts
“To me, it’s not about makingmillions, it’s about getting loans
closed the right way, assuringto the best of our ability that
the loan is going to get repaid.”
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At PCS you will receive, knowledge-able, courteous service from our staffof skilled credit professionals. Ourcombined management experienceis greater than 30 years of expertisein the mortgage servicing industry. Inaddition, PCS offers competitive pric-ing and believes in providing theclient personal attention, in all as-pects of service.
Learn more about our services by calling, Lorenzo Pugliano, President and CEO at 631-299-2084.www.platinumcreditservices.com
What was it that kept you in afield where you were losingmoney in?I’ve always believed that persistenceovercomes resistance, and I knew thatmoney was to be made in the mortgage
marketplace. I just lacked the properdirection due to the absence of train-ing. I vowed, at that point, that if I wereto ever have my own mortgage compa-ny, I would train my salespeople andprovide them some direction. I had atremendous desire to succeed in thisbusiness.
One day in school, I was giving atest and took out some of my mort-gage paperwork. One of the studentsasked if I was into real estate, and hesuggested I meet his father who wasalso in the real estate industry. Mystudent’s father had an office inQueens, so we set up a meeting anddiscussed some opportunities. Hewas a real estate broker in Floridaand what he wanted to do was sellme properties in Florida. I wasn’tinterested in that, but he did intro-duce me to his sales manager whowas running the mortgage brokeragedivision. She offered me a 50 percentcommission. I signed on and was
finally starting to close loans. I wouldsolicit real estate agents, attorneysand financial planners, primarily todo purchase money business in theBrentwood, Long Island, N.Y. area Itaught in. I would take applicationsin local libraries, diners or wherever Icould meet clients.
In 1986, I received my doctorate inmathematics and supervision, and wasready to move on to the next step inmy career as a school principal. I wasmaking $45,000 as a teacher and$115,000 selling mortgages.
In those days,we didn’t have cellphones, and faxmachines were anovelty. The onlyreal form ofadvanced commu-nication that I hadwas a pager. In myrecorded pagermessage, I saidthat I would return their call in fiveminutes. That became my trademark,to call back within five minutes … nomatter where I was. That’s how I endedup developing my business, going fromfive loans per month, to 10 loans, to 15with nothing more than a stack of busi-ness cards and the reputation of work-ing hard, being responsive and deliver-ing on my word.
Did your success in the mort-gage field and the opportuni-
ty you saw to make money inthis field lead you to quitteaching? Yes, I came to yet another fork in theroad, and in 1986, I had the opportuni-ty to open up a mortgage company withtwo other partners in Bayside, N.Y.When I left teaching, I gave up 60 per-cent of my pension. If I had taughtanother two years, I would havereceived my full pension, but I had toevaluate what was right at the time andmade my decision to go full-time intothe mortgage industry.
My two partnersworked the the FiveBoroughs, and Iworked Nassau andSuffolk Counties onLong Island. At anygiven time, I wouldhave $30-$50 inquarters in theglove compartmentof my car and I
knew the location of every pay phoneon Long Island! Cell phones did notexist.
Our primary business was purchasemoney, all Realtor-based. I wouldhand-deliver the commitments to theattorneys, the selling agent, the listingagent, and market myself to everyoneinvolved in the transaction. It became astrictly referral-based business. I didnot know how to do consumer-directtelemarketing or how to buy leads.
We eventually opened up a satellite
office on Long Island in Hauppauge,N.Y. in 1991 and another larger office inBohemia, N.Y. in 1992.
We dissolved that corporation in1994, due to a difference in opinion. Iwanted to become a mortgage bankerand my partners wanted to remainmortgage brokers. We weren’t process-ing our loans the way mortgage brokersprocessed their loans, as we were usingthe Citibank Mortgage Power Program,the Williamsburg Power Program andGreenPoint. Basically, we’d fax the infoover to them and they would do theloan. We were doing 125 loans permonth with one or two employees,making a lot of money with very littleoverhead, but I felt the industry waschanging and that we should becomemortgage bankers.
I formed US Mortgage Corporation in1994, with the intent of opening upand getting my mortgage broker regis-tration approved by Oct. 1, 1994, whichI ultimately did, and during that timeperiod, I developed the logo for USMortgage Corporation or USMC. TheUSMC name looked too much like theUnited States Marine Corps, and I didn’tthink I was getting the right messageacross, so we made it d/b/a MortgageConcepts. We developed a unique sell-ing proposition, which was “HelpingYou Make It Home,” the slogan we usedon all of our business cards, Web site,literature, etc.
continued on page 12
“Mortgage Concepts is doing inthe neighborhood of $30-$35
million per month consistently.”
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Why did you want to makethat change from mortgagebroker to mortgage banker?I felt that I needed to control more ofthe process, specifically, the underwrit-ing of the loans. Additionally, I felt thatthe future was in mortgage bankingand not mortgage brokering. We stayeda broker until 1997, and then receivedour banker license in 1988.
I developed a nice tight knit group ofretail referral-based loan officers, dongbusiness exclusively in Nassau andSuffolk Counties, primarily receivingbusiness from the Realtor community.Our business was consistently 90 per-cent purchase money transactions.
I have always worked very hard atthis business, working 16-18 hoursevery day. I have always told my staffthat I am like a Motel 6 … ”I will alwaysleave the light on for you.”
I started to see a change around thelast quarter of 2004, a very unusualdrop in originations that had pro-gressed into 2005 that got much worsein 2006. I eat, sleep and breathe thisbusiness.
In 2004, there were no FHA [FederalHousing Administration] loans on LongIsland to speak of because of the highloan amounts, and the loan limits werevery low on FHA loans I had my Mini-Eagle, but did not use it very often.
The one decision I made that savedthe company was that I never put onesub-prime loan on my warehouse line.I could have made a lot more moneylike many other people did, but Iwould rather make less and stay inbusiness.
I’ve always had the philosophy thatbigger is not better … better is better.I think that philosophy has transcend-ed through everything I do withMortgage Concepts. To me, it’s notabout making millions, it’s about get-ting loans closed the right way, assur-ing, to the best of our ability, that theloan is going to get repaid. We’vealways consistently done 80-120 loansper month, with an average size of$400,000 per loan, and keeping theeconomies of scale in place. MortgageConcepts is closing approximately$30-$35 million per month consis-tently.
In 2006, I felt that I had to changemy business model because I saw atremendous decrease in values in theLong Island, N.Y. market, which iswhere we are focused. Values weredecreasing, and it was affecting thepurchase money business. I love what Ido and I felt like I really needed to re-invent Mortgage Concepts, whichrequired that I change from having aone-dimensional business model,which was primarily purchase moneyout of Nassau and Suffolk Counties, to amulti-dimensional mortgage companydoing business in other states.
In changing your model, howdid you attract new salespeople?I changed and expanded my businessmodel and basically applied the J. PaulGetty theory where I’d rather have onepercent of 100, than 100 percent of one.To do that, I decided to become licensedin as many states as I possibly could, start-ing in 2007. This way, I could attract sales-people from all of the states we werebecoming licensed in. I felt that I wasstrong on the operational side, from orig-ination through closing. In terms of sales,I had to create an opportunity in differentstates by opening up corporate branches.Many states still allow loan officers towork out of their home, while othersrequire brick and mortarlocations. We are currentlylicensed in 18 states, andhave our FHA and USDA[United States Departmentof Agriculture] approval.
We allow our loan offi-cers to originate fromtheir homes or from theirbrick and mortar offices,but we process andunderwrite all of theloans in our Bohemia,N.Y. headquarters. I can-not allow off-site process-ing and underwriting.Everything has to flowthrough here, and nowwith technology, that goalis much simpler to accom-plish. Currently, we haveapproximately 140 sales-people licensed in 18states, but within just afew weeks from now, we will be licensedin 20 states. My goal by the end of theyear is to be licensed in 35-30 states andnot to expand without control. You haveto be able to control the quality of theorigination and maintain integrity ofthe files which is challenging with a 10percent unemployment rate.
Our loan officers do a compilation ofeverything, including purchase moneyand refinances on a referral basis, orthey do lead-based where they pur-chase their own leads, but we do not doany direct response marketing. Directresponse marketing can create anunderlying pressure from the loan offi-cer through the underwriter to closeloans, to meet the economies of scaleand to meet the budgetary require-ments of running a mortgage company.Let’s face it, if you are spending$300,000-$500,000 per month onadvertising, you have to close a lot ofloans. That means you are going to beputting a lot of pressure on salespeopleand on management to essentiallyclose loans without any regard for thewillingness of the borrower to repay,and I think that philosophy has causedthe demise of many of the larger mort-gage companies.
What is Mortgage Concepts’current minimum FICO score?It’s 620 across the board, but it’s proba-bly going to go to 640. I think that youare going to see that scores under 640will have some very serious perform-ance issues. There is a higher degree ofa borrower’s unwillingness to pay, so weare probably going to have to migrateand have our own credit overlays andtransition to scores of 640.
One of my objectives is to obtainGinnie Mae approval by the end of theyear. I’ve seen companies get GinnieMae approval and use it to their disad-vantage. They adapted a sort of “kid inthe candy store” type mentality. Certaincompanies take their Ginnie Maeapproval and use it to do loans theyknow are not going to perform. Itinevitably catches up with you whenyou approve loans that should not beapproved.
Do you have anyparticular businessphilosophy you liketo impart uponyour salespeople?I’ve always felt that theneeds of the corporationexceed the needs of theindividual. The needsand longevity of the cor-poration are more impor-tant than what a Realtorneeds, a loan officerneeds and what a bor-rower needs, becausewithout the corporation,none of those aforemen-tioned entities have any-thing. We do not need tosit here and talk about allthe mortgage companiesthat are left with nothingbut some desks and
paperclips in their drawers. My objec-tive has always been to stay in business,and that means that if we are going tostick around in the mortgage bankingbusiness, we have to make good loans.That is what we offer salespeople allover the country the fact that we will bein business. They have a future with usat Mortgage Concepts. We are not goingto say “yes” to every loan, but you willmake a good living.
What do you consider thenext big thing for the mortgage industry as a wholethat mortgage professionalswill need to embrace?Being an ex-educator, I have alwaysbeen a proponent of education. I thinkit is imperative that any loan officerwho speaks to a borrower must complywith state-specific registration, educa-tion and testing requirements. I thinkthat is huge, and it says a lot to anyfuture employer. When we get out ofhigh school and we go to college, wepay to go to college and generally workharder while at college. There shouldbe no difference when it comes to themortgage business. If you are going toenter this profession, then you should
know the profession. You have to beable to look somebody in the eye anddeliver what you say you are going todeliver. I think this requires a change inattitude, and a change in behavior withrespect to where business is comingfrom.
Over the last four or five years, I wasnever, quite frankly, a proponent of theconsumer-direct model, because I feltthere was a level of integrity missing.Loan officers have to get that back andhave to re-establish that. I still feel thatas values begin to stabilize, there willbe tremendous opportunity for loanofficers to obtain business the old-fash-ioned way of walking into the offices ofRealtors, attorneys, financial plannersand accountants, and be their purchasemoney source for their borrowers.
I think that the loan officer who istechnologically advanced and educa-tionally advanced will capture morebusiness going forward and that goeswith the infrastructure of mortgagecompanies as well.
On the origination side, MortgageConcepts is 100 percent paperless. I thinkit really enhances our ability to be moreefficient. I think loan officers need to dothat. With education comes knowledgeand confidence, and I think that is theprimary focus I would like to see loanofficers take. LOs cannot have thisdumping ground mentality that theyhad years ago. If the borrower fogged amirror, they got a mortgage. That nolonger works and it is going to take somebehavior modification over the next fewyears to change that mentality.
How do you use technologyto make sure that process ofvetting a loan does not slowdown the process? What kindof technology does MortgageConcepts have in place tomake sure the process runssmoothly?Your first step is to communicate andeducate your loan officers on your phi-losophy of doing business, and that iswhere behavior modification comes intoplay. They have to understand that weare partners, and are all in this together.As a loan officer, you have a responsibili-ty to listen and provide a service for yourborrowers to the best of your ability.
Step two is from an internal infrastruc-ture standpoint. We use many differentlayers of services that are provided to uson a technological basis regarding theintegrity of the file … from evaluating
continued on page 15
“The needs and longevity of thecorporation are more impor-
tant than what a Realtor needs,a loan officer needs and what aborrower needs because with-out the corporation, none of
those aforementioned entitieshave anything.”
nmp mortgage professional continued from page 11
“I eat, sleep andbreathe this busi-
ness … working 16-18 hours each day.I’m like the Motel
6, I will alwaysleave the light on
for you.”
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one case created a $32 difference whenthe fees are passed along to the con-sumer, as a settlement services charge atclosing. That fee difference discriminatesagainst the unmarried co-applicantsbased on marital status and is a violationof the ECOA sections cited above.
From a processes perspective,unmarried co-applicants were alsofound by the FDIC examiners to havesome discriminatory issues. One of the
banks the FDIC noted onthe violations was due tothe requirement thatunmarried co-applicantscomplete separate appli-cations, while marriedco-applicants completeda single application. Thisrequirement is a violationof the “same standards”regardless of marital sta-tus provisions of theabove sections.
While correcting thepricing issue for ECOA compliance is fair-ly simple: Make sure that whatever theprice a “joint” credit report is, the cost oftwo individual credit reports equals thatsame amount. Correcting the applicationprocesses issue is something more com-plex. The National Credit ReportingAgency Inc. (NCRA) has discovered thatsome loan origination systems (LOS) haverequirements that split unmarried co-applicants into two separate applicationsfor processing. This varies from system tosystem, and can even also vary pendingthe current address status of the co-applicants. On some systems, if the co-applicants are currently residing at thesame address, they can be entered on asingle application. However, this is moreof a problem when the co-applicants areresiding at different locations at the timeof the loan application. Some LOS do nothave the ability to enter differentaddresses for co-applicants on a singleapplication, regardless of marital status.This can also be problematic with thetransfer of that data from the workflowof the LOS, to the mortgage credit report-ing agency, to the national credit reposi-tories and back with the credit report. Ofcourse, with several different systems
In March, some New England areabanks received notice from the FederalDeposit Insurance Corporation (FDIC)New York Division of Supervision andConsumer Protection that a recentexamination found potential violationsof the Equal Credit Opportunity Act(ECOA) for Fair Lending violations per-taining to the fees and processesimposed upon consumers for the creditreports related to their mortgage loans.
The credit reportingpractices in question havebeen found to violateECOA Section 202.4 (a) ofRegulation B which pro-hibits a creditor from dis-criminating against anapplicant in any aspect ofthe credit transaction onthe basis of marital sta-tus. Further, Section202.2(m) of Regulation Bdefines a credit transac-tion broadly to include“every aspect of an applicant’s dealingswith a creditor regarding an applicationfor credit or an existing extension ofcredit (including, but not limited to,information requirements; investiga-tion procedures; standards of credit-worthiness; terms of credit; furnishingof credit information; revocation; alter-ation or termination of credit; and col-lection procedures).” The preliminaryfindings continue with citations fromSection 202.6(b)(8) of Regulation Bwhich requires that “a creditor shallevaluate married and unmarried appli-cants by the same standards; and inevaluating joint applicants, a creditorshall not treat applicants differentlybased on the existence, absences orlikelihood of a marital relationshipbetween the parties.”
So, why are these credit reportingpractices setting off so many alarms?
From the fee structure perspective, itis the difference in the price of the cred-it reports that some banks have negoti-ated with their credit reporting agenciesthat give a price reduction to co-appli-cants that are traditional “joint” creditfiles (typically a husband and wife)which is not available to non-traditionalco-applicants that are unmarried. Thisdiscounted credit report fee, which in
FDIC Finds Fair LendingViolations Under ECOA for Credit Report Fees
By Terry W. Clemans
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At United Northern, we give you the freedom to originate and succeed with our winning team.
About working with United Northern Mortgage Bankers• Ongoing training and consultation with top industry executives
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• Multiple valuation tools to research value
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United Northern Mortgage Bankers, Ltd. Corporate NMLS ID# 7230 New York State Banking Dept. - Licensed Mortgage Banker – License #100724 New Jersey Dept. of Banking and Insurance – Mortgage Lender – License #L0046623 Penn-sylvania Dept. of Banking – Mortgage Lender – License #20887 Connecticut Dept. of Banking - Mortgage Lender - License #20372 Massachusetts Div. of Banks and Loan Agencies - Mortgage Lender & Mortgage Broker – License #MC5070North Carolina Commissioner of Banks – Mortgage Lender – License #L140365 South Carolina State Board of Financial Institutions – Supervised Lender – License #S7,461 Florida Dept. of Financial Institutions - Mortgage Lender - License#ML0700679 Senior Security Home Advantage is a lending area of United Northern Mortgage Bankers, Ltd. Direct FHA Endorsed Lender
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different mortgage applications that aborrower has to avoid potential for simul-taneous applications for evaluating if theborrower is paying their rent on time.. Ifthe borrower goes from paying $1,000per month in rent to $3,000 per monthfor a mortgage with almost an identical
income, they experience sort of a pay-ment shock, and this is the type of thingwe train our salespeople to look for. Wehave always verified the authenticity ofincome through a 4506-T Form, evenwhen it was not “trendy” to do so.
There is a lot of technology avail-able, and you must be willing to spendthe time, money and energy to imple-ment these technologies into your sys-tems so that you can ascertain anyinconsistent information in the file.Very often, we find some inconsisten-cies perpetuated not by the loan officer,but by the borrower. Borrowers arebecoming more sophisticated thesedays with technology in regards to bankstatements, pay stubs and appraisals.
What is your opinion of theHome Valuation Code ofConduct (HVCC)?We have never let our loan officers orderappraisals. We have to ensure that thereis no contact between the borrower andthe appraiser, and the loan officer andthe appraiser. When we open the loan inaccordance with the MDIA [MortgageDisclosure Improvement Act] and HVCC,we order the appraisal ourselves fromour approved appraiser list internally oran appraisal management company.
When the appraisal comes in, it isimmediately underwritten, but we viewan automated valuation model [AVM]and we use what is called a LARA Report[LandSafe Appraisal Risk Analyzer] anduse a company out of Pittsburg thatdoes a reconciliation of values. We useall three on every single appraisal toascertain not only the authenticity andthe accuracy of the value, but the accu-racy of the comparable sales as well.
By having these measures in place inour post-appraisal process, loan officerswho work for Mortgage Concepts knowwe are going to use accurate appraisals.
How are you adapting tochanges with the Secure andFair Enforcement for MortgageLicensing Act (SAFE Act) andlicensing requirements? Howdo you feel about the fact thatdepositories do not have toconform to SAFE Act require-
ments the way non-depositorylenders have to?I am in total disagreement with that. Ithink that loan officers, whether theywork for depository lenders or non-depository lenders, should have thesame responsibilities. They have tomeet with the borrower, they have toconduct an interview with the borrowerand they have to qualify the borrowerthe proper way. Whether you are inMississippi, North Dakota or New York,they should be required to take the 20-hour SAFE Act course and the test.Additionally, they should meet all regis-tration, testing, education and financialresponsibilities that are state-specific… no different than any loan officer ina non-depository bank. They are per-forming the same tasks and responsibil-ities in originating loans.
I have taken the 20-hour SAFE Actcourse, and I work 18 hours a day. Ihave taken the test and got a 97 on thetest, and I have taken every state edu-cation requirement for every state thatMortgage Concepts is licensed in. It isan arduous and long process, but youneed to do it. I try to set the examplefor my employees, along with LennyRamirez, my vice president.
How have you managed withthe lack of warehouse linesthat exist right now?My warehouse lines have a goodunderstanding of how I operate, fromthe origination of the loan to the clos-ing of the loan. I think the longest peri-od of time I had a loan on the line was32 days. I personally monitor my ware-house aging report every night. I gohome with the report under my pillow
basically and when it hits 12 days, it’ssymptomatic of a problem in the backoffice. I question why a particular loanis on the line for 12, 14 or even 16days. I think it is our whole operationthat has created a comfort level for ourwarehouse lines. Not only did I obtaina new warehouse in 2009, but my exist-ing line was increased. MortgageConcepts is currently using approxi-mately 70 percent of our warehousecapacity, so we are well positioned forgrowth.
“My goal by the end of the yearis to be licensed in 35-30 statesand not to expand without con-trol. You have to be able to con-trol the quality of the origina-tion and maintain integrity ofthe files which is challenging
with a 10 percent unemployment rate.”
“I’ve always believed that per-sistence overcomes resistance,and I knew that money was to
be made in the mortgage marketplace.”
nmp mortgage professional continued from page 12
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1. Go to www.ruralhomeloan.com2. Pick a low fixed rate for your borrower3. Enjoy an easy closing, and then relax!
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What lies ahead for the inde-pendent mortgage banker?I think that there are some challengesand hurdles that the independent mort-gage banker will face in the future.Liquidity is a big issue with mortgagebankers. I think the independent mort-
gage bankers are going to potentiallyhave a liquidity issue because investorsare going to look for reimbursementfrom the independent mortgagebanker. I think that’s a serious problem,and I think we are just starting to seethe beginning of that now.
Mortgage insurance companies havesent out investigative teams in anattempt to avoid paying claims to aninvestor that an independent mortgagebanker sold the loan to, and they aredenying these claims. That is one issuewith regard to push-backs.
Another issue regarding push-backs iswith Fannie Mae and Freddie Mac. Theyare going to be pushing back over $21million this year in buybacks for loansthat closed three or four years ago due totheir investigative reports. Many of thoseare being pushed back because borrowershave filed for bankruptcy and their taxreturns are inaccurate. Yet, at the time,the loans were originated and closed, taxreturns were not needed. If they werefraudulent acts, that’s one thing, butthese push-backs are not due to fraud.
A majority of mortgage bankers have atremendous amount of investment intheir business … emotionally, financially… from an infrastructure standpoint,from a responsibility standpoint and theytake that very seriously. A good, responsi-ble mortgage banker does not think justabout closing the loan. They think aboutwhat happens before the loan is closedand what happens after the loan is closed.I think those challenges and hurdlesbecome more and more difficult to main-tain because it is becoming increasinglycostly to run a successful independentmortgage banking operation. I think thatsometimes, in their zest and zeal to meetthose requirements, they ultimately closeloans with some disregard for the abilityand willingness of the borrower to repaybecause it becomes a financial issue.
I am always looking to do things theright way, and sometimes, it’s at theexpense of developing sales. There isalways that balance of sales and opera-tions, sales and operations … that con-
stant balance that you look for and that’sthe challenge a good independent mort-gage banker has.
Any closing comments?I think that there is still tremendouspotential for independent mortgagebankers to stay in business and to dogood business. I think that, with respectto Mortgage Concepts, we offer the abilityto become valuable partners with us. Wehave a department that recruits teams ofhighly-qualified loan officers and mort-gage brokers who are interested in part-nering with us. We are very detailed-ori-ented about the entire hiring flow andeducational flow that these partnerbranches or teams will have to follow inorder to integrate into our system. Weoffer tremendous support. Our rates areextremely competitive, so we give themthe tools and support to succeed.
We have zero tolerance for fraud …zero, and I stick to that like glue. That’svery important to us and they mustunderstand that. One quote I often use,is “The future ain’t what it used to be.”I think Yogi Berra said that and peoplehave to get out of that mentality. Theyhave to know that we do things theright way and if they are willing to dothat, then there is an opportunity forthem at Mortgage Concepts.
From a partner branch standpoint, theindustry needs to know that we have avery expeditious opening, underwritingand processing loan flow process. The loanis opened within 24 hours and is under-written within 72 hours. Commitments goout immediately. Some lenders open theloan, the processor works on the file for 30days and then the file is given to theunderwriter for approval. We do it theother way around. We open, underwrite,give it back to the processor and they gath-
er the conditions and then we clear theloan for closing. My staff at MortgageConcepts is second to none. Most of myemployees have been with me over 15years, and they are very important to me.We are a growing company, but we oper-ate as a family unit.
I look forward to the challenges andhurdles that lie ahead for MortgageConcepts and the industry as a whole. Thisis a wonderful business and as I always say“Life is not about having what you want… it is about wanting what you have got.”
nmp mortgage professional continued from page 15
“LOs cannot have this dumpingground mentality that they had
years ago. If the borrowerfogged a mirror, they got amortgage. That no longer
works and it is going to takesome behavior modification
over the next few years tochange that mentality.”
“The one decision I made thatsaved the company was that I
never decided to bank sub-prime loans … I never put one
sub-prime loan on my ware-house line. I could have a lotmore money like many other
people did, but I would rathermake less and stay in business.”
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homes while they seek new employ-ment. According to the proposed pro-gram, loan servicers would reduce theborrower’s mortgage payment to anaffordable amount for up to nine monthswhile the homeowner looked foremployment.
“The vast majority of new distressedborrowers we are seeing involve theloss of income,” said John A. Courson,MBA president and chief executive offi-cer. “This program is designed to buythose borrowers time to find a new job,after which they could hopefully quali-fy for a loan modification.”
Under the MBA’s proposal, loan ser-vicers that participate in this programwould reduce monthly payments to anaffordable level based on householdincome. Borrowers would be initially eval-uated for the forbearance program using amodel that assumes the borrower will bere-employed within nine months of losinghis or her job at 75 percent of the borrow-er’s previous salary. The borrower wouldbe reevaluated as to employment andincome status every three months for atotal forbearance of nine months. Oncereemployed, the borrower would be eval-uated for a modification under the ObamaAdministration’s Home AffordableModification Program (HAMP).
“Recent statistics show that the aver-age unemployed U.S. worker staysunemployed for between six and sevenmonths,” added Courson. “That is a longtime for a borrower with a dramaticdrop in income to stay current on theirmortgage. Further, borrowers with sucha precipitous drop in income can’t qual-ify for most loan modification pro-grams, so we are looking for ways toallow those borrowers to keep theirhomes while they look for another job.”
MBA suggests that some participat-ing servicers would need access to spe-cial loans through the U.S. Treasury tosupply funds to servicers so they couldcontinue to advance payments toinvestors during the extended forbear-ance period. The program would needto be voluntary and flexible due tofinancial accounting considerations.
MBA created this program through a spe-cial task force of its members. MBA also con-sulted with Fannie Mae and Freddie Mac.Recently, MBA representatives met with offi-cials from the White House, the Departmentof Treasury and the Department of Housing& Urban Development (HUD) to present theproposal.For more information, visit www.mort-gagebankers.org.
CMSA changes name toCRE Finance Council
The Board of Governors ofthe Commercial MortgageSecurities Association (CMSA),a trade organization dedicat-ed to the commercial real
“We’re identifying lending industrysituations in FICO Score Trends that toour knowledge have never been seenbefore,” said Dr. Mark Greene, chiefexecutive officer of FICO. “Economicinstability is creating unknown risk inlenders’ credit portfolios as well ascounter-intuitive trends in consumerbehavior. While the FICO 8 score contin-ues to prove its unprecedented power inrank-ordering consumers for risk, evenlow-risk consumers are changing thevalue they give different credit lines. Asthe CARD Act goes into effect next week,it likely will create additional, unhelpfulpressures on the banking business.”
In FICO Score Trends, companyexperts found new evidence thatlenders tightened their criteria for newloans in 2008-2009 and began “cherrypicking” the kinds of borrowers towhom they would extend credit.Mortgage loans opened last yearbetween April and October reflectedsignificantly tighter standards than inprior years. In 2005, nearly 46 percentof consumers who opened a new mort-gage had a FICO score less than 700. In2008 this percentage had dropped tojust 25 percent of the newly bookedmortgage population. Other industrysectors experienced similar shifts. Inthe bankcard sector in 2005, 51 per-cent of consumers with a new creditcard had FICO scores less than 700.That percentage dropped to just 38percent in 2008. As lenders tightenedtheir credit standards, it became corre-spondingly more difficult for con-sumers with delinquencies in theircredit histories and lower FICO scoresto qualify for additional credit.
FICO also examined FICO Score Trendsto learn how credit risk of real estateloans and bankcards varied across U.S.regions. The company found the mostdramatic shift in the Pacific region. In2005, bankcards were 6.4 times morelikely to default than were mortgageloans. That percentage dropped to only1.3 times riskier in 2009.
Consumers in the midwest regiondemonstrated the smallest relativechange. Bankcards were 2.5 timesmore risky of default than were mort-gages in 2005, but bankcards were just1.5 times more risky of default by2009. Borrowers in the Northeast con-tinue to present the least amount ofdefault risk nationally for real estateloans.For more information, visit www.fico.com.
MBA proposes forbearanceprogram to help unemployed borrowers
The Mortgage BankersAssociation (MBA) hasannounced that it hasdeveloped a concept
for a new forbearance program thatwould allow qualified borrowers whohad lost their jobs to remain in their
news flash continued from page 9
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indebtedness rules is also helpful inthese situations:
� Determining whether the mortgageon a borrower’s primary residence isrecourse or non-recourse in statesthat have anti-deficiency statutes,such as California and Arizona.
� Determining whether ashort sale or loan bal-ance reduction throughrefinance or modifica-tion would be taxableby the IRS as income tothe borrower.
� Determining whetherprivate mortgage insur-ance (PMI), FederalHousing Administration’smortgage insurance pre-mium (FHA MIP) or theDepartment of VeteransAffairs (VA) funding feeis tax deductible to theborrower.
While I am not suggest-ing that you give tax or legaladvice, I am suggesting thata working knowledge ofacquisition indebtednessand other tax rules can helpyou avoid placing borrowersin loans that are not suitableor otherwise defined aspredatory lending.
Example #2:Downpayment funds fora first-time homebuyer� A husband and wife are gifting
$25,000 to their first-time homebuy-er daughter for use as a downpay-ment on her new home.
� A daughter can qualify for a better rateon her mortgage if one or more of herparents co-sign on her mortgage.
� The daughter is willing to purchase ahome after the expiration of the$8,000 first-time homebuyer creditbecause she doesn’t think she will beable to qualify for it if one or both ofher parents co-sign.
� A husband and wife are also in theprocess of purchasing their ownhome. They are willing to purchaseafter the expiration of the $6,500
Many loan originators take the viewpointthat knowledge of the federal mortgageand housing tax laws is not necessary tosuccessfully originate loans. I completelydisagree. In fact, there are specific oppor-tunities for you to generate more busi-ness by understanding various mortgageand housing tax concepts.
After all, the mortgage is inherentlya financial transaction. While mortgageoriginators should not act as tax advi-sors, they should structure loans thatare suitable for the borrower by under-standing the tax consequences of vari-ous mortgage and housing strategies.At the very least, borrowers should notbe placed in a worse tax or financial sit-uation after dealing with an originatorthan they were prior to dealing with theoriginator. This is consistent with thegoal of long-term, sustainable home-ownership, is it not?
Consider these two examples wherea working knowledge of federal mort-gage and housing tax laws would benecessary for you to avoid committingloan origination “malpractice:”
Example #1: Financingthe purchase of a second home� The consumer currently owns a pri-
mary home worth $500,000 with a$100,000 mortgage.
� The consumer wants to purchase asecond home for $200,000.
� Many, if not most, loan originatorswould structure the transaction in away that involves pulling equity outof the borrower’s primary home foruse as either a large downpayment orto purchase the second home forcash ($100,000-$200,000 of cash out).
The problem:In this example, there would be threemain problems if a borrower pulls$200,000 of equity out of their primaryhome and refinances the mortgage tosay, $300,000:
� The borrower would not be able todeduct the interest on any portionof the $200,000 of cash-out asacquisition indebtedness.
� If the borrower is not one of the sixmillion-plus Americans subject to theAlternative Minimum Tax (AMT), they
would only be able to deduct theinterest on up to $100,000 of thecash-out as home equity indebted-ness, and would not be able to deductthe interest on the remaining$100,000 of cash-outproceeds.
� If the borrower is oneof the six-plus millionAmericans subject tothe AMT, they wouldnot be able to deductthe interest on any ofthe $200,000 of thecash-out.
Assume the mortgagecarries a six percent inter-est rate, and the borroweris in a 25 percent federalincome tax bracket. Theinability to deduct themortgage interest wouldcost the borrower $3,000per year or $250 permonth. Put differently,this would be equivalentto putting the borrower ina “high-cost loan”—defined by the FederalReserve Board as 1.5 per-cent higher than theFreddie Mac average rateson first lien mortgages.Putting the borrower in ahigh-cost loan when lower cost alterna-tives are readily available is traditionallydefined as predatory lending.
The solution:Don’t pull equity out of the primaryhome, and instead, place the mortgageon the second home that is being pur-chased. In that case, 100 percent of themortgage interest would be deductibleto the borrower as acquisition indebt-edness. In this example, the borrowerwould save $3,000 per year or $250 permonth.
Loan originators who are familiarwith the acquisition and home equityindebtedness rules can avoid commit-ting “malpractice” and predatory lend-ing as outlined above. This is a primeexample of why it is important for orig-inators to understand certain federalmortgage tax laws.
Knowledge of the acquisition
BY GIBRAN NICHOLAS
Why Tax Knowledge Matters long-time residence homebuyer taxcredit because they think they won’tbe able to qualify for it because theyare co-signing for their daughter’smortgage.
� Parents are unsure of where to getthe money for the $25,000 in giftfunds because they don’t want to liq-uidate their own cash reserves due totheir own homebuying situation.
The problem:Many, if not most, loan originators areunfamiliar with gift tax and homebuyertax credit rules and are likely to leadthe borrowers down a path of misinfor-mation or making mistakes in structur-ing either one or both of the transac-tions in this example.
The solution:By simply giving the borrower informa-tion relating to the gift tax and home-buyer tax credit, the loan originator canliterally save the borrowers more than$20,000.
� The daughter can qualify for the$8,000 first-time homebuyer taxcredit even if there are co-signors.
� The parents can qualify for the $6,500long-time resident homebuyer taxcredit on the purchase of their homeeven if they co-sign for their daughteron the purchase of her home.
� The parents can save $5,400 in gifttaxes by writing two separate checksfor the $25,000 in gift funds to theirdaughter.
� The parents can preserve their cashreserves by pulling funds out of theirIRA without penalties to help theirdaughter buy her first home (tax rulesallow you to pull $10,000 per accountholder out of an IRA, prior to age 59-and-a-half, without penalty, to buyyour first home or help an immediatefamily member purchase their firsthome).
Again, I am not suggesting that yougive tax or legal advice. I am simplysuggesting that you help borrowersavoid loan situations that are morecostly or otherwise not suitable fortheir situation by having a working
“At the very least,borrowers should notbe placed in a worsetax or financial situ-ation after dealingwith an originator
than they were priorto dealing with theoriginator. This isconsistent with thegoal of long-term,sustainable home-
ownership, is it not?”
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cial services industry, has announcedits collaboration with a local Haitian-born doctor to support the families ofCroix-des-Bouquets, Haiti, a town of8,600 on the Northern outskirts of Port-au-Prince, and the rebuilding of itsPetit Chaperon Rouge School.
Dr. Fred Guerrier, a physician nowresiding in the Tampa Bay area, hasreturned there twice each year for the pastdecade to provide free medical treatmentto individuals in Croix-des-Bouquets.Severely damaged in the January earth-
estate capital markets finance industrysince 1994, has transformed CMSA into anew organization that will serve all con-stituencies within commercial real estatefinance. CMSA is now the CRE FinanceCouncil.
The creation of the Commercial RealEstate (CRE) Finance Council reflects thegrowing changes in global commercialreal estate finance, and the importanceits participants play in furthering the mis-sion of this market. CRE Finance Council,created by and for its members, will helpdrive a vibrant, transparent and accessi-ble commercial finance market, an inte-gral part of the commercial real estateindustry that serves a central role withinthe U.S. and global economies.
“Our intention always is to beresponsive to our members and to themarket’s changing course, and the CREFinance Council is a natural and logicalextension of this new course,” saidDottie Cunningham, chief executiveofficer of the CRE Finance Council.
The CRE Finance Council initially willinclude five ‘Forums’—CRE market partic-ipants that drive the global commercialreal estate industry: investment-gradebondholders, multifamily lenders, portfo-lio lenders, servicers, and securities andloan investors. Each of the Forums willinteract and address issues critical to itsbusiness sector and work to achieve solu-tions that serve a common purpose.
As these specialized Forums collabo-rate, the CRE Finance Council’s objectiveswill be to represent all Forum partici-pants, manage disparate and convergingviews, advocate the consensus of posi-tions to policy and lawmakers on behalfof the industry, educate members, con-tinue developing best practices, andwork toward the betterment of the entirecommercial real estate finance market.
“We will always attempt to foster aconsensus on issues that are importantto our various stakeholders,” saidPatrick C. Sargent, president of the CREFinance Council and partner withAndrews Kurth LLP. “Where the CREFinance Council finds consensus, it willadvocate; where it finds differences ofopinion, the Council will educate. Ourmembers want an adaptive, expandedorganization, forged by the successesof its predecessor, but one that servesall constituencies for our changingindustry. And we are very excited toaddress the industry’s challenges andto advance our members’ objectives.”For more information, visit www.crefc.org.
Mortgage ContractingServices contributes toHaitian relief
M o r t g a g eContractingS e r v i c e s
(MCS), a national field service companyproviding property preservation,inspections and real estate-owned(REO) asset maintenance to the finan-
news flash continued from page 17
quake, the Petit Chaperon Rouge Schoolserves this community to educate its 475elementary students and to additionallysupply them with a daily lunch. Americanphysicians and nurses also use the school’sclinic to give medical care to these families.
In a joint effort between MCS andThe Steans Family Foundation, an affil-iate of MCS Holdings LLC, more than$35,000 has been raised to assist Dr.Guerrier in his actions to restore theschool’s functionality. All donations aredirected at specific, local needs.
“Our goal is to not make a single gift,but rather to foster an ongoing relationshipwith the people of Croix-des-Bouquets,”said Mike Carroll, chief financial officer ofMortgage Contracting Services. “MCS has
protected and preserved communities allacross the U.S. for 25 years, and is gratefulfor the opportunity to assist this communi-ty in need as well.”For more information, visit www.mcs360.com.
Study finds Latino families deeply impactedby foreclosures
The National Councilof La Raza (NCLR),one of the largestnational Hispaniccivil rights and advo-
cacy organizations in the United States,and the University of North Carolina at
continued on page 24
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we’re committedto brokers!
IN:Call Bijan Farassat at 917-731-4870or email [email protected]
IN:
Call Lisa Constant at 516-640-8375or email [email protected]
Member FDIC A Member of the New York Association of Mortgage Brokers
Markets may be volatile, but there’s one thing you can always count on, the total commitment of our Mortgage Team. Loyalty, continuity of service and our dedication to protecting the integrity of our relationships are just a few of the things that set us apart.
Ridgewood understands the needs of its communities and develops specifi c product benefi ts to meet those needs.
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Abacus Accountingmerges with MortgageBanking Solutions
Mortgage Banking Solutions (MBS) hasannounced their union with San Diego-based Abacus Accounting Services.Abacus offers comprehensive book-keeping services to mortgage banks inthe western United States. Warehouselenders have increased their require-ment for all mortgage banks to quicklyproduce financial statements.
“Most owners of mortgage banks arenot great accountants and need help,”said David Lykken, managing partnerfor strategic services at MBS. “This willbe a tremendous service for mortgagebanks that are under increasing pres-
sure from warehouse lenders as well asinvestors to get their numbers right.”
“I am delighted to join forces withMBS,” said Shelly Rogers, president ofAbacus Accounting Services. “They arethe top mortgage banking advisory firmin the country.”
Rogers has extensive experience inaccounting. She holds a bachelor’sdegree in accounting and was an audi-tor with a CPA firm. She is an expert inaccounting systems, as well as a veteranin the mortgage business. She was anowner of a mortgage lender, a seniorexecutive of a national mortgage bank,and a consultant supporting the book-keeping, accounting and audit needs ofmortgage banks.
“Shelly has done an amazing job cre-ating a ‘best practices’ bookkeepingplatform for mortgage banks,” saidAndy Schell, CPA, CMB, managing part-
ner for accounting services with MBS.“She has truly ‘cracked the code’ tooffer outsourced bookkeeping. MBS isthe only firm that offers both expertmortgage consulting and hands-onbookkeeping. I am confident that theintegration of Abacus into MBS will giveus the ability to better serve our mort-gage lending customers and expandour outsourced bookkeeping servicenationally.”For more information, visit www.mort-gagebankingsolutions.com.
PriceMyLoan (PML) andLeads360 partner for leadmanagement solution
PriceMyLoan (PML) and Leads360 haveannounced the completion of a bi-directional integration between theirrespective solutions. The integrationcombines PriceMyLoan’s automatedunderwriting and loan pricing enginewith Leads360’s lead management soft-ware to provide mortgage lenders witha powerful platform for tracking, man-aging and qualifying mortgage leads.
“Lenders are looking for more effec-tive ways of generating business, andlead management is a crucial part oftheir growth strategy,” said GigiCampbell, national sales director forPriceMyLoan. “But lead management ismore complex than most lenders real-
ize. Given the increasing role of theinternet in mortgage lending, lendersneed to provide consumers with a salesexperience that is dynamic and meetstheir heightened expectations.”
The combined capabilities ofLeads360 and PriceMyLoan allowslenders to drive their sales process moreeffectively by receiving and distributingleads in real-time, instantly checkingevery lead for loan eligibility and pric-ing, and providing an optimized cus-tomer service experience. Lenders canthen provide an instant and targetedsales offer, one that closely matcheswhat the consumer is looking for.
“We want to streamline the salesprocess and increase the number ofsales leads that become funded loans,”said Jeff Solomon, founder and seniorvice president of Leads360. “The robustintegration that we created withPriceMyLoan works towards this goal byseamlessly embedding a powerful auto-mated underwriting and pricing engineinto the front end of the sales processto enable our mutual clients.”For more information, visit www.price-myloan.com or www.leads360.com.
Mortgage ContractingServices partners withHomeTelos
M o r t g a g eContract ingServices (MCS),
a nationwide property preservation andinspection services provider, announcedthat it has partnered with Dallas-based
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including providing its clients with ahomeowner-friendly searchable networkof certified short sale agents,” said SonNguyen, chief operating officer withPartnerFirst. “This partnership is truly afirst of its kind. We are setting the stan-dard within the real estate industry inhow mortgage servicers and default serv-ice providers connect with defaultinghomeowners through a nationwideagent based solution.”
“The key to streamlining a short saleis to have an educated and well-trainedagent network. Teaming up withPartnerFirst allows ServiceLink to lever-age PartnerFirst’s extensive knowledgeof the real estate community and thor-ough understanding of the short saleprocess,” said Scott Thompson, vice pres-
ident of realtor services for ServiceLink.“ServiceLink is excited about headingdown this path with PartnerFirst anddelivering meaningful advantages to allof our mortgage servicer and mortgageinvestor clients and to struggling home-owners all across the country.”
Embrace Home Loansexpands to accommodategrowth
Embrace HomeLoans, a directlender for Fannie
Mae and Freddie Mac, approved by theFederal Housing Administration (FHA)and U.S. Department of Veterans Affairs
HomeTelos to streamline communica-tion between servicer clients and theirinvestors. The relationship involves MCS’integration with HomeTelos’ PropertyPreservation/Field Services Web-basedplatform for managing assets in pre-fore-closure through real estate-owned (REO)that automates workflow resulting inreal-time communication. This platformincludes an electronic bid submissionsystem that houses mission criticalpreservation data for investors, such asphoto documentation, damages andapprovals.
“The default servicing sector is verytime sensitive, so any opportunity toshorten the time frame in the preserva-tion approval process—while not alsojeopardizing accuracy—is paramount,”said Caroline Reaves, chief executiveofficer of Mortgage Contracting Services.
Previously, MCS would send contrac-tors to a property for obtaining a bid tomake repairs, which then involved man-ual entry into MCS360, the company’sautomated workflow application. Aprocessor would next review the infor-mation for accuracy and, once validat-ed, enter the data—line by line—intothe HomeTelos system to be approvedor denied by an investor. The enhancedsolution eliminates the duplicity ofentering information into two distinctplatforms. Once obtained and reviewedfor accuracy, the bid automatically flowsfrom MCS360 to the HomeTelos systemfor the processor to validate and thentransmit to the investor for approval.
“HomeTelos is proud to team with MCSon this strategic project so that togetherwe deliver more value to our sharedclients,” said president of HomeTelos,Stephen Polley. “This economy is present-ing new challenges to our industry daily,and the open design of our platformenables us to respond quickly to integra-tion opportunities that improve transac-tion quality, transparency and accuracy,while enabling a more efficient and scal-able workflow solution.”
The integration enables MCS to nowsubmit bids to investors in real-time, asopposed to the previous 24-hour delayin processing. In eliminating manualentry, accuracy of the information pro-vided is improved, as are overall work-flow efficiencies and associated costs.And just as MCS maintains a scalableinfrastructure to support the needs ofany client, the HomeTelos platform hasthe flexibility to respond to varyingdemands in volume.For more information, visitwww.mcs360.com or www.hometelos.com.
ServiceLink andPartnerFirst join forcesfor short sale solution
ServiceLink andPartnerFirst LLChave announced
an agreement where both companieshave combined resources to provide a“one-stop shop” solution to nationalmortgage servicers and homeownersthrough the ServiceLink Short SaleAgent Network. ServiceLink’s clients canconfidently refer defaulting homeown-
ers to select a certified real estate agentfrom the Short Sale Agent Network tohelp them streamline the short saleprocess.
PartnerFirst provides national mort-gage servicers and default serviceproviders an outsourcing solution calledthe Agent Management Services (AMS)Platform. The AMS platform providesagent training and Pre-ForeclosureSpecialist Certification (PSC), customclient education modules, short sale leaddistribution management, a brand neu-tral agent database, a “Find an Agent”homeowner referral database, a MinorityOutreach Initiative (MOI), and a multi-tude of homeowner contact solutions.
“We are pleased to be handling agentfulfillment services for ServiceLink continued on page 26
certification equips you with uniqueknowledge about these and other feder-al tax rules that can help you stand-outfrom your competition, avoid predatorylending situations, and generate morebusiness from clients, prospects andreferral partners.
Gibran Nicholas is the founder andchairman of the CMPS Institute, whichadministers the Certified MortgagePlanning Specialist (CMPS) designation.The CMPS Institute has enrolled morethan 5,500 members since its foundingin 2005. Gibran is also the chairman ofPublished Daily, a customizable onlinemagazine, newsletter and marketingservice that helps professionals trans-form their clients and prospects into areferral-generating sales force. He maybe reached at (888) 608-9800, ext. 101 ore-mail [email protected].
Visit author Gibran Nicholas’sblog at http://gibranni-cholas.com where he shares
his insights on economics, realestate and financial issues, including thecurrent mortgage and credit crises.
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Thursday, June 24, 2010Friday, June 25, 2010
AAMB welcomes NAMB to beautiful Phoenix! Come see the new NAMB President and the new
NAMB Board installation, while participating in somegreat networking opportunities. State delegates can
also participate in the NAMB Delegate Council Meeting.
Phoenix Airport Marriott®
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Rooms are $99 per night, and will be honored at thesame rate if you wish to extend your stay.
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trend spotter continued from page 18
knowledge of the gift and homebuyertax credit rules.
By understanding the federal mort-gage and housing tax rules, you couldshare generic information with borrow-ers that is helpful to their situation. Afterall, in the first example above, whywould originating a loan that costs theborrower an extra $250 per month notbe considered predatory lending, whileother origination practices that haveexactly the same high cost to the bor-rower would be considered predatory?
My personal opinion is that loanoriginators have a moral and ethicalobligation to spot these issues, sharethis information with their borrowers,and then refer the borrowers to a taxand/or legal advisor for specific advicepertaining to their situation. As a con-sumer, wouldn’t you much rather dealwith an originator who is properly edu-cated in this area than one who is not?As a CPA, financial advisor or Realtor,wouldn’t you feel more comfortablereferring your clients to a loan origina-tor who is familiar with these rules asopposed to one who is not? CertifiedMortgage Planning Specialist (CMPS)
fair lending violations continued from page 13
involved, this is not as simple of a fix asjust making sure married couples nolonger receive a few dollars discount ontheir credit report verses unmarried co-applicants.
Mortgage originators should takenotice of this action and review theircredit report fee structures for thisissue, as well as their applicationprocesses. While the spirit of the lawhas not been violated, no one is beingdenied credit based on marital status,the law is clear and the FDIC seemsintent on pushing it to the letter withregards to the equal treatment for
“any” aspect of the loan transactionsince they have referred some banks tothe U.S. Department of Justice for a“Significant Violation” of the ECOA.
Terry W. Clemans is the executive direc-tor of the National Credit ReportingAssociation Inc. (NCRA). He may bereached at (630) 539-1525 or e-mail [email protected].
Visit the National CreditReporting Association Inc.(NCRA) on the Web at
www.ncrainc.org.
We are now accepting nominations for our upcoming feature,
The 25 Most "Connected" Mortgage Professionals ...
If you or someone you know has a high number of relevant Twitter followers, seems to be connected to everyone in the mortgage
business (with lots of recommendations) on LinkedIn or is extremelyactive networking through Facebook, log on to
NMPMag.com/mostconnected and send in your nomination today.
Are you connected?
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We are the lender, and final decision maker, not a broker.
WE ARE NOT CREDIT SCORE DRIVEN,
We look for loans that improve a client’s situation, in fact we recently increased our fundingcapacity.
• No Credit Score Minimum -- NO DOC and STATED Welcome In Certain Situations!• Residential & Commercial• Loan Amounts $50,000 to $2,000,000• Debt Consolidation, Foreclosure and Bankruptcy Buy-Out• First and Second Trust Mortgages
Never A Pre-Payment Penalty
Our 3 Point Lending Philosophy:
1.Loan must show tangible net benefit to borrower2.Borrower must demonstrate some capacity to repay3.Is the appraisal accurate? We are going to verify, not low ball your appraisal.
It's Just That Simple...
Visit our website or Call 877.353.2233 or For Faster Service Please Fax Your Scenarios To 240.241.5160
www.WeApproveLoans.com
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Wells FargoWholesale Lending
There is a reasonWells FargoHomeMortgageis one of the nation’s leadingwholesale lenders
Wells FargoWholesale Lending is well positioned to help you and your borrowers takeadvantage of today’smarket opportunities with a suite of products and programs, including:
• FHA loans• VAfinancing—larger loan amounts and assumable loans• Reversemortgages—Wells Fargo handles your processing1
• HomeOpportunitiesSM program• Guaranteed Rural Housing program (brokers do not need to be FHA-approved)• High Balance Conforming loans andHigh Balance FHA/VA loans• Our PerformanceWorksSM plan helps put you in control of your continued business success
And at our Broker’s First® website, you can register loans, price/lock, obtain credit, submit forDirect ExpressSM feedback – nowupload imaged documents – all in one convenient online location.
1. Borrowers must be at least 62 years or older. Prior Wells Fargo Home Mortgagereview and broker approval are required to originate FHA loans. Additionalapproval requirements apply to originate reverse mortgages. Please contactWells Fargo Wholesale Lending for details.This information is for use by mortgage professionals only and should not bedistributed to or used by consumers or other third parties. Information is accurateas of date of printing and is subject to change without notice.Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A.© 2009 Wells Fargo Bank, N.A. All rights reserved. #68212 12/09-3/10
Contact us today to learnmore.
www.brokersfirst.com
“The Foreclosure Generation” docu-ments the experiences of families whoare forced to leave their homes due toa foreclosure. Families interviewedgenerally had exhausted all availableresources in an effort to keep theirhomes, were unable to secure assis-tance from their mortgage servicer, andoften relied on relatives and friends forshelter and assistance. Marital discord,anxiety, depression, children’s poorperformance in school, financial loss,and strained relationships betweenparents and children were among theconsequences reported.
“Our findings on the impact of homeforeclosures on families are disturbing,”said Roberto Quercia, director, Center forCommunity Capital, University of North
Carolina at Chapel Hill. “Children in par-ticular experience problems in schooland are deeply affected by instability inthe home. More research is needed tobetter understand the long-term impactof foreclosures on our communities andto find the best interventions to meetthose needs.”
“The Foreclosure Generation” offerspolicy recommendations to stabilizethe housing and financial situations offamilies affected by foreclosure andreestablish homeownership as awealth-building tool for Americans ofmodest means. In particular, the reportpoints to the shortcomings of currentfederal efforts and calls on federal pol-icymakers to take bold steps to stop theloss of wealth through home loss.
Interviews for this study were conduct-ed by five non-profit community organi-zations that belong to the NCLRHomeownership Network and providehousing counseling to Latinos: SouthwestHousing Solutions in Detroit; VisionaryHomebuilders in Stockton, Calif.; TejanoCenter for Community Concerns inHouston, Texas; the Housing EducationAlliance in Tampa, Fla.; and the Dalton-Whitfield Community DevelopmentCorporation in Dalton, Ga.For more information, visit www.nclr.org.
Your turnNational Mortgage Professional Magazineinvites you to submit any information onregulatory changes, legislative updates,human interest stories or any othernewsworthy items pertaining to themortgage industry to the attention of:
NMP News Flash columnPhone #: (516) 409-5555
E-mail:[email protected]
Note: Submissions sent via e-mail are pre-ferred. The deadline for submissions is the1st of the month prior to the target issue.
their home in the coming years, and itcalls for a bold response from federalpolicymakers.
“An estimated 1.3 million Latino fami-lies will lose their homes to foreclosurebetween 2009 and 2012,” said JanetMurguía, NCLR president and chief execu-tive officer. “This represents a shockingloss of wealth and a major blow to com-munity stability. This study brings to lightthe human and social costs of foreclosureand the urgent need for stronger govern-ment intervention to help homeowners,including those who are unemployed.”
Chapel Hill’s Center for Community Capitalhave released a report titled “TheForeclosure Generation: The Long-TermImpact of the Housing Crisis on LatinoChildren and Families,” which uses inter-views with Latino families who have suf-fered a foreclosure to shed light on thedamage inflicted by the loss of theirhome.
The report is the first to provide aglimpse into the far-reaching impactthat record-high foreclosures are likelyto have on the millions of Americanfamilies and children expected to lose
news flash continued from page 19
• Daily updated mortgage industry news
• Industry blogs• Write your own blog• Find loan programs• Discover local and
national events• Get access to video
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A PRMI Company
If you would like to learn more about our BranchPartner business model, please inquire:
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"I looked and looked. The numbers were better thanany I could find. The transition was professionallyhandled. We are in business, funding loans and havealready added another Branch.”
- Chuck Walden, Dacula, GA
"We felt that the Frost/PRMI business model was themost competitive out there, as we planned to transitionfrom brokering to banking. So far, everything has been,as advertised. Very strong training and branch support.”
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I've never worked for a lender with such a hard work-ing closing department. I really appreciate all they doto help keep my business running smoothly.
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"I was ready to ink a deal with a commercial bank. Iheard about the Frost/PRMI business model, ran thenumbers and signed up. Greg has been out here help-ing me recruit, just as he promised. We have alreadyadded 2 Branches and have 2 more in the hopper.”
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You don’t need to be a credit expert tostart your own Credit Repair businessFortunately, with HTDI Financial’s Credit Services Or-
ganization (CSO) program, you will be able to handle
ALL aspects of your business except having to do the
actual repairs; we do that for you! We will train you on
how to handle these customers and you will have the
support you need every step of the way. We will make
you look like a Fortune 500 company even if you work
from home! YOU control how much money you make.
In fact, through our CRM, we give you the tools and
resources to harvest leads, manage prospects and mon-
itor their progress.
You don’t have to spend tens of thousands ofdollars for start-up costs for your own CreditRepair CompanyOnce you are set up in our system, you will get access
to software and tools that HTDI has spent over $1 mil-
lion on research and development. You don’t need to
spend an arm and a leg to start building your own
credit repair business. Here is a quote from a mortgage
company located in upstate New York who spent
months of research before choosing HTDI:
“Until last year, I owned a large mortgage com-
pany in upstate NY with over 125 employees. We
got hit hard during the mortgage industry crash
and had to close our doors. I was stuck in a posi-
tion with thousands of leads and customers that
couldn’t get qualified for anything. I decided to
start looking for a way to capitalize on my left
over resources and help people in the process. I
called many other credit repair companies and
was very unimpressed. One west coast based
company was charging $15,000 and had nothing
but negatives written about them on the Internet.
Then I found HTDI. They helped me to get
started at the beginning of this year and it has
been great. I have not only made great money
helping people to repair their credit, but I have re-
financed 8 of them and helped 6 buy houses that
would have never qualified with the new guide-
lines. The software is very user friendly and all of
my clients, affiliates and Brokers have increased
business because of it.”
Get those impossible to close dealsCLOSED!As the number of loan programs are shrinking, the bar
on credit scores keep rising. This program will allow
your borrowers to become “Mortgage Ready” as soon
as 45 days. As one of our CSO stated:
“I have many loan officers that are now able to
send their clients through the credit repair, raise
their scores, and then close the client’s loan that
they couldn’t close before due to bad credit! It
means more loans and more revenue for my loan
officers. Even better than that, it is very reward-
ing to be able to help a client regain their credit
and be able to get the loan they need.”
Get started in a business that is boomingand shows no signs of slowingThe credit industry, as a whole, is one of the most pow-
erful and profitable industries in existence. With
loans, insurance and even employment taken into con-
sideration individuals’ credit picture, the credit indus-
try is getting bigger every day.
Inside the credit industry, Credit Services is helping by
assisting consumers with getting back on track by re-
moving unverifiable and inaccurate negative items
from their credit reports. As a CSO, you can benefit in
being in a profitable industry and helping clients with
their futures.
“I’ve been in the mortgage business over 22 years.
A year ago, as the mortgage crisis worsened, I
began trying to find a way to help clients who
needed a better credit profile in order to get a
mortgage. Fortunately for both me and my
clients, I stumbled on HTDI. After a year of ex-
perience, I can honestly say the success rate is
100% and client satisfaction is through the roof.
All of my clients have seen significant improve-
ments, and some have experienced breathtaking
jumps in their credit scores, even on the first
round!
From Day One you can be sure your “back of-
fice” (HTDI) has you covered. They will execute
their part of the job seamlessly, with precision,
on time, and with total consistency. All you have
to do is SELL the service! Just sign people up, col-
lect the money, and send HTDI the paperwork
they need to get started. If you simply focus on
selling the service, you will make lots of money,
the work will get done, and you will never have
to worry about unhappy customers.
Although I got into it as a part timer, I now realize
this is an excellent full time business opportunity.
(Frankly, these days it’s probably a better business
than the mortgage business!) You could easily make
six figures in the first year with a minimal invest-
ment of money. How many opportunities like this
exist these days? What you must invest is your time
– SELL, SELL, SELL & SELL some more! Ulti-
mately, what you are selling is the professionalism
of HTDI, which is why this really rocks as a busi-
ness opportunity.”
We average one of the highest fix/deletion rates in the indus-try for the first 45 days of service. Shown below, in real-time,is the average percentage of fix/deletes per round.
If you are going to get involved in CreditRepair, be VERY CAREFULFirst you have “Fair Credit Reporting Act” (FCRA). The
FCRA holds credit bureaus and creditors to their report-
ing methods and has guidelines they must comply with.
There are numerous techniques that are used along with
similar laws to maximize results for each client. You must
know these laws inside out.
You can’t forget “Credit Repair Organizations Act.”
(CROA). Just like the FCRA, the CROA hold credit repair
companies to specific guidelines as well. If you choose
HTDI Financial for your backend processing, we will en-
sure you maintain compliance.
Lastly, you have applicable State Laws. Depending on
the state you wish to conduct business in, you may
have a state Credit Services Organizations act to com-
ply with.
As an active member in good standing of the National
Association of Credit Services Organizations, you can
be sure that we take our job very seriously, making sure
you stay compliant and your clients.
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We are proud of the work we’ve accom-plished and are pleased to be able toadd additional office space right herein our local economy. The addition of anew building in Providence not onlyprovides a space for our growingInternet origination division, but alsoprovides the ability for our company toadd more local jobs in the future.”
Currently, the company employsmore than 500 employees and hasbeen recognized for its excellence inthe workplace and devotion to commu-nity service through numerous localand national awards, reflecting the
lender’s commitment to its strong val-ues and to provide outstanding service.For more information, visitwww.embracehomeloans.com.
LPS opens office inWashington, D.C.
Lender ProcessingServices Inc. (LPS),a provider of inte-grated technolo-gy and services to
the mortgage and real estate industries,has announced the opening of itsnewest office in Washington, D.C. Theoffice’s location is in the heart of thenation’s capital, which gives LPS the abil-ity to quickly respond to the needs of itsgovernment clients and to increase its
presence by pursuing opportunities withnew government partners. LPS currentlyhas significant contractual relationshipswith a number of federal agencies.
“In today’s challenging economicenvironment, government agenciesneed expert support and data to makethe most informed decisions, mitigaterisks and operate at peak efficiency,”said LPS Co-Chief Operating Officer EricSwenson. “LPS’ proven, robust technol-ogy solutions and extensive govern-mental expertise can help agenciesquickly adapt to changing market con-ditions and regulatory requirementsfor optimal performance.”
LPS’ services for the Washington,D.C. market include mortgage consult-ing, technology, data analytics and riskmanagement for portfolios, bench-marking, due diligence and valuation.For more information, visit www.lpsvcs.com.
Byte Software announcesStreetLinks integration inBytePro AppraisalCategory
Byte Software hasannounced a partner-ship with StreetLinks
National Appraisal Services to offer afull suite of compliant and warranted val-uation products to their customers.StreetLinks is a national appraisal man-agement company (AMC), meeting allHome Valuation Code of Conduct (HVCC)and Federal Housing Administration(FHA) compliance requirements and allstate and federal appraiser independenceregulations. The integration in ByteProsoftware speeds the process of orderingan appraisal by connecting directly withStreetLinks and eliminating duplicateentry. StreetLinks is the only national AMCthat offers a 100% Loss Warranty ofAppraisal Quality and a PerformanceGuarantee that actually pays if serviceand quality levels fail.
StreetLinks offers industry-first Certificateof Compliance and TILA-Trigger technology,and performs a manual quality controlreview of every appraisal to ensure under-writer-ready reports. When Byte Softwarecustomers order an appraisal reportthrough StreetLinks, they will find a newprepayment processing system allowingupfront payment for appraisals withinBytePro.
“This integration is fully operationaltoday in BytePro and ready for ByteSoftware’s customers to order appraisals,”stated Tony Ebeyer, StreetLinks chief oper-ating officer. “We look forward to provid-ing Byte users with easy access to ourindustry-leading, fully compliant apprais-al solution.”For more information, visit www.byte-software.com or www.StreetLinks.com.
Verisk Analytics acquiresStrategic Analytics
Verisk Analytics Inc.has announced theacquisition of StrategicAnalytics, a providerof credit risk and
(VA), and an issuer for Ginnie Mae, hasannounced it is expanding to accommo-date current and future growth. Thecompany is moving its Internet origina-tion division, which is currently com-prised of 50 employees, to an 18,000-sq.ft. building in Providence, R.I.
“As a company, Embrace HomeLoans has experienced significantgrowth,” said Kurt Noyce, president ofEmbrace Home Loans. “Most recently,we’ve added several new retail branch-es along the eastern seaboard and com-pleted a substantial acquisition to fur-ther increase our geographic footprint.
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Will the borrower’s credit score and ratios make any difference in myoverall quality control performance?The credit score and ratio may affect the risk you or the lender takes when fundingthe loan, but as long as you stay within the underwriting requirements, you will befine. However, your quality control may be graded on how well the loan is packaged.
Let’s compare non-bank lenders (non-supervised mortgagee) and bank lenders(a supervised mortgagee).
As of the writing of this article, non-banks’ average credit score was 731 for2009 and 732 for 2008, with ratios 23/33 percent for 2009 and 24/38 percent for2008. Non-banks improved their “Excellent” risk ranking from 12.06 percent in2008, to 24.48 percent in 2009, an improvement of 94.69 percent. Non-banklenders were able to decrease their credit score average by one point and continueto improve significantly in an “Excellent” risk ranking. The only noticeable changewas lowering the back-end ratio from 38 percent to 33 percent. The front-end ratioonly decrease by one percent from 2008 to 2009.
Banks, on the other hand, had an average credit score of 764 in 2009 and 748in 2008, with a ratio of 24/33 percent in 2009 and 28/40 percent in 2008. Banks re-quired an average 16-point increase in their average credit score. This resulted insignificant improvements in loans meeting the “Excellent” risk ranking that wentfrom 29.81 percent in 2008, to 41.76 percent, an increase of 40.09 percent. Granted,the non-banks had a larger increase; however, they had fewer loans at 23.48 per-cent where banks had 41.76 percent of loans meeting the “Excellent” risk rank-ing. Banks significantly decrease their front-end and back-end ratios to obtainsuch high numbers. Banks had ratios at 28/40 percent in 2008 and 24/33 percentin 2009. As the numbers show, banks reduced their risks by requiring higher creditscores and lower front- and back-end ratios which resulted in higher percentages(41.76 percent) of their loans ranking “Excellent” in risk.
Let’s compare non-bank brokers (non-supervised loan correspondents) and bankbrokers (supervised correspondents) in the same area of risk. A broker’s average creditscore for 2008 was 725 and 721 for 2009, with ratios of 27/38 percent in 2008 and25/36 percent in 2009, improving their “Excellent” risk ranking from 15.18 percentin 2008 to 26.31 percent in 2009. This is a 73.32 percent improvement in “Excellent”rankings. Brokers were able to achieve this by reducing their credit requirements,rather increasing the credit score and decreasing the front-end ratio to from 27 per-cent to 25 percent, and reducing the back-end ratio from 38 percent to 36 percent.Brokers performed exceptionally well as compared to other mortgage entities.
The bank broker average credit score increased from 749 in 2008 to 761 in 2009,a 12 point rise for getting a loan. The average qualifying ratio went from 24/36percent in 2008 to 22/33 percent in 2009, and saw very low improvement in thenumber of loans qualifying for the “Excellent” ranking. Bank brokers had 27.62percent in 2008 and 28.85 percent in 2009 of their loan ranking “Excellent,” onlya 4.45 percent improvement.
Therefore, brokers prove that a higher credit score does not necessarily mean thatthe risk is reduced. However, ratios appear to be where your loan will fall as it comesto risk. This data is available to the mortgage industry to study. You may compare theperformance of different mortgage banking operations and compare overall indus-try reviews by going to www.qcmortgage.com. The data may change as QualityMortgage Services continues to close out 2009 quality control reviews and audits.
By Tommy A. Duncan, CMT
Sponsored by
Tommy A. Duncan, CMT is executive vice president of Quality Mort-gage Services LLC. For answers to your QC and FHA questions, pleasecontact Tommy at (615) 591-2528 or e-mail [email protected] may also visit Quality Mortgage Services LLC on the Web atwww.qualitymortgageservices.com.
We have all heard that a quick and easytest to determine a person’s generaloutlook is to show them a glass halffilled with water and ask them todescribe whether the glass is halfempty or half full. It seems that thosewith an upbeat and optimistic outlookgenerally tend to describe the glass ashalf full, and those with a darker andmore pessimistic view tend to describethe glass as half empty.
Just how accurate thistest is remains to be seen,but perhaps it is time forus in the mortgage indus-try to assess our presentsituation with a hopefuleye to the future. Thismay be difficult, giventhe surge of proposedlegislation and expansionof regulations on boththe state and nationallevel, but the fundamen-tals of the industry havenot changed.
When I began mycareer in the mortgageindustry, rates were in thedouble digits and thenation was in the grips ofa recession fueled byrampant inflation in thelate 1970s compoundedby high unemployment.However, in the midst ofthese market conditions,people were still buying homes. It wasalso during this period that the mort-gage broker channel began to developin earnest, ultimately becoming theprimary channel of originationthroughout the country.
Today, the industry is facing differ-ent challenges. While the country isexperiencing high unemployment,both inflation and the rate environ-ment remain low. We have a presi-dent who is calling on banks to lend,while his regulators are applying thebrakes. No responsible originatorwants to see a return to the lendingpolicies that precipitated the housingand economic crisis, but there is abalance that needs to be achievedbetween the mortgage industry andits regulators.
The housing industry has led theUnited States out of more than onerecession and our industry is well-posi-tioned to assist now in that regard.Unfortunately, originators are facing an
unrestrained and enthusiastic legisla-tive and regulatory atmosphere whichis robbing the system of badly neededcapacity. Let’s face it, regulators needto regulate and they have not escapedthe crisis unscathed. Products and pro-grams came into the marketplace thatshould have never seen the light of daybecause some regulators failed to iden-tify the market risk associated with the
“originate to distribute”model adopted by largefinancial institutions andWall Street. They havebeen called to testifyabout their shortcomingson this issue and theresponse has been to sup-port a complex system ofoverregulation.
Now the pendulumhas swung too far in theother direction, leaving“Joe Six Pack” and otherAmericans like him withlittle or no access to cred-it, further exacerbatingthe problem. Regulatorscontinue to demonizeoriginators for deliveringproducts that we hadevery reason to believehad been vetted by indus-try watchdogs. While it isapparent that a smallcontingent of bad actorsoriginated inappropriate
products, by and large, the crisis wasprecipitated by faulty programs. Thiswas a crisis of product, not producers.
The real question is when will aresponsible regulator or legislatorstand up and say, “Clearly we haveovercompensated and our con-stituents are suffering because ofthis?” While we have never beenunregulated, there is such a thing astoo much regulation and it appearsthat we are well past the tipping pointin that regard. The rise of the non-depository origination channel wasbased on service and choice. There islittle evidence that banks and non-profits are ramping up productioncapacity to serve the mortgage needsof Americans. Instead, service hasdeclined and depository lenders areeager to serve the top of the mortgagechain with little concern for the falter-ing middle class.
By Donald E. Fader, CRMS
“No responsible orig-inator wants to see areturn to the lendingpolicies that precipi-
tated the housingand economic crisis,
but there is a balancethat needs to be
achieved between themortgage industryand its regulators.”
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uidity, stability and affordability to theU.S. housing and mortgage markets.
Fannie Mae is ready to accept loanswith notes dated on or after Feb. 18,2010 with mortgage insurance fromEssent. Freddie Mac anticipates beingready to accept business from Essent byApril 1, 2010. Both GSEs will be com-municating directly to lenders regard-ing the timing and process.
“The GSEs’ approvals officiallylaunch our entry into the mortgageinsurance business and enable us tobegin supporting qualified borrowers,”said Mark Casale, president and chiefexecutive officer of Essent. “We’veheard from lenders, borrowers andstate regulators that there is a realneed for a strong, new mortgage insur-ance company, and we’re pleased tosupport this critical segment of thehousing finance market.”
“We appreciate the efforts thatEssent has made during the past yearto meet our eligibility requirementsand obtain their qualified mortgageinsurer approval to serve Fannie Mae’sseller/servicer network,” said CarlosPerez, Fannie Mae vice president of riskmanagement. “We are pleased to havea new mortgage insurance partner tooffer much needed capacity to ourmarket.”
“Freddie Mac is pleased to haveapproved Essent as a new qualifiedmortgage insurer,” said Daniel Kelly,director of mortgage insurer relationsfor Freddie Mac. “Essent’s entry comesat a time of real need in the market formortgage insurance capacity.”
The charter of the GSEs requires thatloans with a loan to value ratio inexcess of 80 percent have additionalcredit support to protect the GSEsagainst losses. The most common formof this credit support is private mort-gage insurance, which pays an insur-ance benefit to the lender, or investorin a mortgage loan, in the event of aforeclosure or certain other circum-stances arising from a default andresulting in loss to the insured.Mortgage insurance is backed by pri-vate capital, and is subject to strictstate regulation. By providing mort-gage investors with protection fromcredit losses, mortgage insurance fromEssent helps families purchase or refi-nance a home when they cannot afforda large downpayment.For more information, visit www.essent.us.
StreetLinks QC teambecomes fully USPAP certified
StreetLinks National Appraisal Serviceshas announced that its entire qualitycontrol team, consisting of more than100 staff members, has successfully
capital management solutions to con-sumer and mortgage lenders. As part ofthe Interthinx business unit of VeriskAnalytics, Strategic Analytics will pro-vide customers advanced solutions andprofessional services critical to lossforecasting and the stability of the U.S.residential mortgage market.
“The Strategic Analytics solution andapplication set will allow our customersto take advantage of state-of-the-artloss forecasting, stress testing, and eco-nomic capital requirement tools to bet-ter understand and forecast the risk intheir credit portfolios,” said Kevin Coop,president of Interthinx. “These tools areapplicable and are currently deployedin all verticals of consumer lending,including automotive, credit card, andstudent loans, and mortgages.”
Through Strategic Analytics,Interthinx will offer various mortgagerisk analytics products. The MortgageRisk Model (MRM) gives retail lendersaccess to a comprehensive mortgageloan-level database—incorporating thevast majority of non-agency loans forthe residential mortgage-backed securi-ties (MBS) market. Forecasting technol-ogy is available to incorporate signifi-cant measures of origination quality,maturation effects, and environmentalfactors into analytics tests that tradi-tional roll-rate modeling methodolo-gies cannot effectively capture.
The acquisition will also provideInterthinx customers access to themortgage-backed securities/asset-backed securities (MBS/ABS) SecuritiesForecasting Service (SFS), as well asaccurate cash flow, conditional pay-ment rate, conditional default rate, andloss severity projections for lenders andinvestors to price and trade mortgageassets with high efficiency.
“Strategic Analytics advanced model-ing software uniquely transforms datafrom one of the largest repositories ofloan-level mortgage data into usablebusiness intelligence,” said Joe Breeden,president of Strategic Analytics. “We areexcited to become part of the VeriskAnalytics and Interthinx team. This affil-iation will significantly boost our objec-tive of providing mission-critical creditrisk management solutions to our cus-tomers worldwide.”For more information, visit www.strate-gicanalytics.com, www.interthinx.com orwww.verisk.com.
Essent Guarantyapproved by GSEs asqualified MI provider
Essent Guaranty Inc., a mortgage insur-er, has announced that it has beenapproved as a qualified mortgageinsurer by Fannie Mae and FreddieMac. The two government-sponsoredenterprises (GSEs) are chartered byCongress with a mission to provide liq-
heard on the street continued from page 26
Taiwan has seen the future of retire-ment security: There are reverse mort-gages in it. And it plans to help itsfirst-time homebuyers think reverseearly, a notion I have been pushinghere for years. Addressing a nationalconference on reverse mortgages inDecember 2009, Chang Chin-oh, a pro-fessor of land economics at NationalChengchi University in Taipei City,Taiwan, mentioned an intriguingaspect of an evolving Taiwanesereverse-mortgage model:
“The program will also encourageyoung people to start planning a homepurchase early for retirement [myemphasis].”* Let me repeat: Plan ahome purchase early for retirement!
In Think Reverse! (2008) and in sever-al articles I wrote before the book waspublished, I argued that, in an era ofuncertain retirement cash flow sources,our home equity, thanks to reversemortgages and other equity take-outproducts, has become a new pillar ofretirement security.
The long-term solvency of SocialSecurity is in doubt as is Medicare.Companies are bailing out of theirpension obligations and pushingemployees to take responsibility fortheir own retirement finance through401(k)s and other vehicles. And 401(k)sare tied to the vagaries of financialmarkets. From 1998-2008, we experi-enced at least four significant financialcrises, with the mother of all financialcrises in 2008.
As we slowly dig ourselves out ofthe rubble of the 2008 financial earth-quake, fresh thinking in retirementfinance is needed. Reverse capacity,through reverse mortgages, has to be apart of a new retirement finance cal-culus. A recent fact sheet from theCenter for Retirement Research atBoston College left no doubt about theemerging role of reverse capacity inretirement:
“Given the bursting of the housing bub-ble, it is tempting to forget how impor-
tant housing is to the portfolios of olderAmericans. Indeed, housing prices didcollapse. …. However, even after thedecline, housing equity remains a cru-cial component of the assets of mosthouseholds.” **
For decades, the retirement planningindustry and policy leaders have beenurging Americans to save for retirement.That is sound traditional advice. And tothat, I add a complementary new call:Build reverse capacity!
So, what is “reverse capacity” in thecontext of retirement cash flow plan-ning and management? I propose threerelated definitions:
� First, it is the net home equity that isconvertible into cash via reversemortgages.
� Second, it is the cash and non-cashvalue inherent in a reverse mort-gage loan.
� And third, reverse capacity is thelife-planning and estate manage-ment value peculiar to reverse mort-gage loans.
A full study of reverse capacity andits implication for retirement finance inthe 21st century will be the subject ofmy next book. For now, to build reversecapacity, young families should plantheir home purchase early and not usetheir home as a “piggy bank” to pay fornon-emergency pre-retirement con-sumption. Using the tax code, Congressshould create incentives to supportreverse capacity building. It is goodpublic policy.
As a nation, the earlier we embracethis idea (that is, reverse mortgages forfirst-time homebuyers and intentionalreverse capacity building), the moresecured retirement cash flow will be formost homeowners who may not haveenough disposable cash for direct tradi-tional savings.
Knowing that there is a reversemortgage in their future, first-timehomebuyers can plan to aggressively
Reverse Mortgages for First-Time Homebuyers
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W E A R E R E M N W H O L E S A L E
At REMN, we understand that mortgage
companies perform best when they focus on
what’s important: their customers. We are
industry veterans and FHA specialists who
understand that every application is precious.
We treat each file with the respect – and
urgency – it deserves. Even better, at REMN,
same-day approvals are guaranteed.*
Real Estate Mortgage Network, Inc. is located at 499 Thornall Street, Second Floor, Edison, NJ 08837. NMLS #6521. This information is for use by mortgage professionals only and should not be distributed to or used by consumers or third parties. Information is accurate as of date of printing and is subject to change without notice.
* Same-day decisions guaranteed if file is received by 11 a.m. EST.
Learn more at www.remnwholesale.com
It’s about time.
completed the 15-hour 2010 UniformStandards of Professional AppraisalPractices (USPAP) training course.
“StreetLinks has 10 times the num-ber of QC staff as I had when I managedone of the country’s largest captiveappraisal management companies,”said StreetLinks Chief Executive OfficerSteve Haslam. “We focus on deliveringthe highest quality ‘underwriter-readyappraisals’ that shorten our clients’application to funding time. This sim-ply cannot be achieved by using auto-mated QC scrubbers deployed by tradi-tional AMCs.”
USPAP is the generally accepted per-formance and ethical standards for theappraisal profession. It is administeredby the Appraisal Foundation, aCongressionally-authorized non-profitorganization that fosters professional-ism among appraisers by setting quali-fications and standards.
“Manual QC review of each appraisalis unique in our industry,” said MikeFloyd, StreetLinks chief corporateappraiser. “Most of our competitionrelies on automated scrubbers whichare incapable of assessing the apprais-er’s commentary and logic. StreetLinksperforms an intensive line by lineexamination of each report for con-formity with Freddie, Fannie, FHA,USPAP and lender specific underwritingguidelines. Our goal is to deliver under-writer-ready reports to our clients thefirst time, resulting in more efficientoperations, faster loan approvals andsuperior loan performance.”
StreetLinks provides appraisalsnationwide that are fully compliantwith Federal Housing Administration(FHA), Home Valuation Code of Conduct(HVCC) and all other current and pend-ing regulations. An innovator in theappraisal management marketplacewith its industry-first Certificate ofCompliance and TILA-Trigger technolo-gy, StreetLinks performs manual qualitycontrol review of every appraisal.For more information, visitwww.streetlinks.com.
Specialized AssetManagement partnerswith RealtyTrac on foreclosure listings line
Specialized AssetM a n a g e m e n tLLC ( SAM) , aprovider of assetmarketing anddisposition serv-
ices to mortgage lenders, servicers andinvestors, has announced that it haspartnered with RealtyTrac, an onlineforeclosure marketplace for default,auction and bank-owned properties.The partnership gives additional mar-ket exposure for foreclosed propertylistings provided by Specialized AssetManagement, displaying them promi-nently to RealtyTrac’s three millionunique monthly visitors.
“Marketing our REO assets toRealtyTrac’s three million uniquemonthly visitors provides us with addi-tional marketing visibility to help liqui-
date our REO assets,” said Rudy Krupka,vice president of real estate-owned(REO) at Specialized Asset Management.“Our strategic partnership withRealtyTrac will assist our agents in pro-moting the properties to interestedbuyers across the country.”
Homebuyers and investors usingRealtyTrac can easily make onlineoffers or inquiries on the SAM-providedREO properties. Users can click on the“Bank-Owned” tab on any RealtyTracsearch results page and look for proper-ties with the “Request Info” button.
“Many of our users are specificallyinterested in purchasing bank-ownedproperties, and we want to give thoseusers every opportunity to find andpurchase those properties,” said Rick
Sharga, senior vice president ofRealtyTrac. “This exciting new partner-ship with Specialized AssetManagement does just that by deliver-ing a new pool of REO properties thatour users can more easily purchase.”
In 2009, a record 2.8 million homesreceived a foreclosure filing. This repre-sents a 21 percent increase in total fil-ings from 2008. The number of foreclo-sures is expected to increase significant-ly in 2010 as millions of optionadjustable-rate mortgages (ARMs) andAlt-A mortgages reset in the next 12 to18 months and double-digit unemploy-ment plagues the national economythis year.For more information, visit www.sam-reo.net or www.realtytrac.com.
Catalizador finalizesacquisition ofMortgageDashboard
Catalizador Private Equity Fund, a teamof venture capitalists that includes JimMcMahan, Stewart Hunter and BryanHarlan of Benchmark Mortgage, hasannounced the completed acquisitionof MortgageDashboard, an on-demandloan origination software systemenabling paperless mortgage process-ing for lenders, credit unions andbanks. Catalizador took control of
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Thursday, June 24, 2010Friday, June 25, 2010
AAMB welcomes NAMB to beautiful Phoenix! Come see the new NAMB President and thenew NAMB Board installation, while participating in some great networking opportunities.
State delegates can also participate in the NAMB Delegate Council Meeting.
Phoenix Airport Marriott®
Rooms are $99 per night, and will be honored at the same rate if you wish to extend your stay.
Hotel toll-free: 1-800-228-9290
Visit www.NAMB.orgfor details.
Qualified Candidates with a proven track record will get:• Guaranteed Salary• Full Benefits Package• Bonus based on profitability of branch office.• Assistance with recruiting and training team.
Call Dane Basham today 888-544-0034
Gateway Mortgage Group is seeking more leaders to run a retail branch office.
“If I was in the market to become a branch manager or work as a loan officer, Dane would be on the shortlist of friends I would contact. His positive attitude is infectious. You cannot have a conversation with Daneand NOT be motivated.” November 28, 2006
Andrew Berman, Executive Vice President, The Mortgage Presswas a consultant or contractor to Dane at Gateway Mortgage Group LLC
At one time, seven out of every 10loans was originated by an independentoriginator. That number is closer to twoout of 10 loans today. Is there a contin-uing role for the non-depository mort-gage loan originator? To quote SarahPalin, “You betcha.” The quality of thecurrent product will hasten the daywhen mortgage-backed securities (MBS)will not be considered toxic assets andthe depository lenders will once againrecognize the value that independentoriginators can and do provide.Effective and efficient service is prizedby every industry, and that is what wedo by giving our customers what theyexpect and deserve. Our size makes usnimble in the marketplace, allowing usto react more rapidly to changes andour knowledge base creates value fordepositories looking to grow a produc-tion and servicing platform.
I heard an airline pilot give a talkto a civic group years ago, and heended by taking questions from thegroup. One member asked him aboutflying in bad weather that dictatedinstrument flight rules. His responsewas this, “It may sound strange, but Iam more comfortable in those condi-tions than a clear sunny day wheneveryone is out flying. When theweather turns bad, you know that you
are up there with professionals …seasoned men and women with theskill it takes to fly and land a plane inall kinds of conditions.”
The weather has turned bad in themortgage arena and many have turnedback, but today, I am proud to be fly-ing with professionals … men andwomen who give their best to servetheir customers. These professionalsshare a commitment to the industrywho serve their customers with integri-ty. We are not asking for a pass. Wedon’t want an atmosphere of zero reg-ulation. We just want the opportunityto help our borrowers, neighbors andfriends make the right choice when itcomes to the largest financial decisionthey are likely to make in their lives.
Is the glass half full? Is the glass halfempty? You have to decide, but Iencourage you to drink deeply fromthe well of optimism and confidence.
Donald E. Fader, CRMS of Kinston, N.C.-based SMC Home Finance. He has servedon the board of directors of theNational Association of MortgageBrokers, and has served the NorthCarolina Association of MortgageProfessionals as president. He may bereached by phone at (252) 523-5800 ore-mail [email protected].
half empty? half full? continued from page 27
build reverse capacity by attackingmortgage principal balance everymonth with little extra payments.Some would argue that keeping princi-pal robust to generate interest deduc-tions to reduce income and taxes is agood thing in a person’s high-earningyears. It is a very persuasive argumentand it has merits. But tell your first-time homebuyers to attack principalrelentlessly with small extra paymentsand build reverse capacity becausetheir retirement security some daymight depend on it.
As intentional reverse capacity build-ing becomes widespread, it may alsoencourage non-homeowners to viewhomeownership differently and morefavorably because it can be shown thathomeowners can amass a six-figurenest egg via home equity faster thanthrough traditional savings methods.
The circumstances of two couples Iserved in August 2003 convinced me ofthe power of this idea. In an October2003 article I wrote, “The Fate of theGlenns: Your Equity or Your Freedom”in The Mortgage Press, I told their sto-ries. Here is the gist:
Paul and Paula Glenn*** were at a verylow point physically and financially. Tosave their home, their loan officer sentthem to me for a reverse mortgagesolution. Because of their large forwardlien and the lower county-by-countyFHA (Federal Housing Administration)loan limits at that time, I couldn’t helpthem. They probably lost their home.
By contrast, John and AbbieStevens***, also weighed down by finan-cial and health problems, had sufficienthome equity. We were able to pay offtheir creditors and leave them with$20,000 in a growing HECM (home equi-ty conversion mortgage) line of credit.They had sufficient cash for groceriesand for their medications in the comfortof their home.
My experience with the Glenn and theStevens families persuaded me thathome equity, tapped judiciouslythrough reverse mortgages and otherequity take-out products, will play a crit-ical role in retirement cash flow man-agement in this century and beyond.
If you can buy a home with theunderstanding that it is also a pillar ofyour retirement security and you planto hold on and build home equity onemortgage payment at a time, you willbe fine, even if Wall Street goes off thecliff again. The Taiwanese seem to have
grasped this idea from the get-go, andthey plan to put it into their reversemortgage model, slated for rollout laterthis year.
On Dec. 16, 2009, Taiwan held amajor reverse mortgage conference inTaipei City. Invited were many reverse-thinking folks from government, busi-ness and academia. One of the design-ers of our 20-year-old HECM programwas invited to share the Americanexperience.
The Taiwanese are thinking moreholistically about reverse mortgages.To encourage Taiwan’s growing elderpopulation to use reverse mortgages,they may be subsidizing their programmore generously than we have everdone here in the U.S. They believe itssocial and economic benefits willmore than pay for the subsidy theirgovernment will provide. Again,Professor Chang:
“If the policy [reverse mortgage] is car-ried out successfully, it will ease thegovernment’s financial burden andhave a positive impact on the local realestate industry.”*
Taiwan’s approach contrasts withour government’s tepid support for ourHECM program, as shown by Congress’srefusal to give the FHA $800 millionsubsidy it asked for in June 2009 toshore up the HECM insurance fundbecause of falling home prices.
For 20 years, the HECM program hasbeen a success, without a need for pub-lic subsidy, thanks to hefty mortgageinsurance premiums, conservative actu-arial assumptions and robust houseprices for much of that period. Whenour financial system broke down in2008 and property values crumbled,HECM insurance risk managers figuredan $800 million subsidy will help main-tain the program.
Congress’s knee-jerk turn-downforced FHA to slash HECM cash advancesby 10 percent in October 2009, as wellas recent principal limit cuts and aninsurance premium increase. Thesecash advance cuts and insurance premi-um increases are sapping demand forHECMs and depressing origination activ-ities in an industry that could supplycash to help Congress deal with escalat-ing entitlements and mounting nationaldebt. It is penny smart, dollar dumb.
You do not have to be a rocket scien-tist to understand that if we encouragemore seniors to use their reversecapacity through reverse mortgages,just as Taiwan plans to do, they will beusing their own assets. If we discouragethem, as Congress seems to have doneby refusing a small subsidy relative tothe multi-trillion-dollar bailout of WallStreet, they will turn to far moreexpensive public sources for supple-
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“…young families should plantheir home purchase early and notuse their home as a “piggy bank”
to pay for non-emergency pre-retirement consumption.”
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leader of its New York Metro salesteam.
� Sarah Hulbert has been appointedsenior vice president, reverse mort-gages for Seattle Mortgage Company.
� Doug Criscitello has been sworn inas chief financial officer for the U.S.Department of Housing & UrbanDevelopment (HUD).
� Ted Tozer has been sworn in as thenewest president of the GovernmentNational Mortgage Association(Ginnie Mae).
� Primary Capital has hired Jan
Davidson as branch manager of thecompany’s Cornelius, N.C. branch.
� Stephen Staid has been namedexecutive vice president of customerrelationship management for SaxonMortgage Services Inc.
� Robert Griffith has been appointedchief operating officer for mortgageinsurance business for RadianGuaranty Inc.
� First American CoreLogic hasannounced the hiring of SusanAllen as vice president of strategicrelationships, responsible for AVMdevelopment, cascades and valua-tion strategies.
� Robert J. Voll has been named
MortgageDashboard last fall when thetechnology firm lost an important lineof credit and was on the brink ofinsolvency.
MortgageDashboard was as a Web-based mortgage banking software solu-tion for loan originators by Jorge Saurialmost a decade ago. At one point, thecompany was serving a user base ofover 3,000 customers nationwide.
“We were attracted toMortgageDashboard when a group ofprivate investors with significant mort-gage industry backgrounds introducedus to the technology and called it thebest completely online, Web-basedloan origination software on the mar-ket,” said Jim McMahan, managingpartner of Catalizador. “Our fund looksto the future of the housing financeindustry and this web based loan soft-ware is the way loans will be originat-ed going forward.”
Catalizador Private Equity Fund steppedin to recapitalize MortgageDashboard toallow it to continue operations and beganthe acquisition process. Now that it hasbeen completed, MortgageDashboard hasbecome one of the few mortgage technol-ogy firms operating today that has its flag-ship product in use as a mission criticalapplication at the institution run by its pri-mary investors.
Sauri has remained with the compa-ny he founded and is now the compa-ny’s chief developer and chief informa-tion officer, where he continues to pro-vide breakthroughs in innovation andworks to simplify the technologyrequired by mortgage brokers andbankers alike.
David Childers has been tapped as aprimary strategist and the company’svice president of sales. He has 10-plusyears of experience working with mort-gage brokers and bankers, assistingthem with developing their businesses,creating winning strategies, and execut-ing their visions to become successfulorganizations.
“We’re seeing tremendous adoption inthis market for three primary reasons,”Childers said. “First, lenders appreciate thecomprehensive audit trails we provide ourcustomers, which allows them to remain infull compliance with all FDIC, GLB andSarbanes Oxley requirements for data secu-rity and borrower privacy. Secondly, wemaintain a SAS-70 secured environmentmonitored and controlled by an independ-ent third party for the industry’s best disas-ter recovery solution. Finally, our SaaSmortgage banking software puts our cus-tomer’s data in a secure online environ-ment that they can access anytime fromanywhere. MortgageDashboard is the solu-tion our customers are looking for now.”For more information, visitwww.MortgageDashboard.com.
Mortgage Professionalsto Watch� Advanced Data has announced the
addition of Carleen Swanson as
heard on the street continued from page 29
Carleen Swanson
Sarah Hulbert
continued on page 32
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heard on the street continued from page 31
national director of sales and mar-keting for The StoneHill Group.
� Taylor Capital Group Inc. hasannounced several new hires for itsnew Cole Taylor Mortgage division,including Phillip M. Miller, groupsenior vice president, secondarymarketing; Daniel J. Ervin, seniorvice president, national sales man-ager; Rebecca J. Bussineau, seniorvice president, director of credit;and Alan Holsztynski, senior vicepresident, information technologydirector.
� The National Groups, parent com-pany of National Default ServicingLLC, has announced the addition ofMitchell Oringer as senior manag-ing director of real estate-ownedand loss mitigation operations, andRichard T. Fikani as managingdirector of default services.
� CCG Catalyst has named Thomas D.Switzer as a partner and senior con-sultant.
� Berkadia Commercial Mortgagehas hired Matthew Case as an assis-tant vice president for the compa-ny’s Los Angeles office.
Your turnNational Mortgage Professional Magazineinvites its readers to submit any informa-tion, events, passages, promotions, per-sonal or professional occurrences thatseem appropriate and/or other pertinentdata to the attention of:
Heard on theStreet/Mortgage
Professionals to Watchcolumn
Phone #: (516) 409-5555E-mail:
Note: Submissions sent via e-mail arepreferred. The deadline for submissionsis the 1st of the month prior to the tar-get issue.
Web: www.appraisalsanywhere.com
Copyright © 2010 Emigrant Mortgage Company, Incorporated (Emigrant). All rights reserved. Emigrant is a subsidiary of Emigrant Bank, Member FDIC and is an Equal Opportunity Lender. All product names, company names and logotypes are servicemarks or trademarks of Emigrant in the United States and other countries. The information, products and services contained in this advertisement are believed to be correct but may include inaccuracies, typographical errors and/or omissions. Emigrant does not guarantee the accuracy of the data contained herein. This information is intended for mortgage and/or real estate professional use only and should not be distributed or presented to consumers or any other third parties. This is not an offer or guarantee to extend consumer credit. Program guidelines, terms and/or conditions are subject to change by Emigrant without notice. All loans are subject to submission of a complete application, underwriting review and credit and property approval by Emigrant. Not all products and/or programs are available in all states and/or localities and/or for all loan amounts. Certain products / program are offered through third parties. Other restrictions and limitations may apply. New York Licensed Residential Mortgage Lender: Exempt. Emigrant is registered or licensed with the Banking Departments or Divisions in CT, DE, FL, MA, NH, NJ, NY and PA.
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mentary income. At a time of rampantnational, state and local governments’debts, approving FHA’s HECM subsidyrequest was the rational option, butCongress blew it.
We may have the most advancedreverse mortgage program in theworld, but we have something to learnfrom Taiwan.
Notes*“Cabinet will finish reverse mortgagestudy next year” by Ted Yang, TaipeiTimes (Dec. 17, 2009, page 12 orwww.taipeitimes.com/News/biz/archives/2009/12/17/2003461169).** NRRI Fact Sheet No. 1, March 2010(http://crr.bc.edu/images/stories/Just%20the%20Facts/nrri_fact_sheet.pdf).***Names made up to conceal identities.
Author and columnist, Atare E. Agbamu,CRMS is director of reverse mortgages atMinneapolis-based AdvisorNet MortgageLLC. A member of the BusinessWeek MarketAdvisory Board, Agbamu is author of ThinkReverse! and more than 130 articles onreverse mortgages. Through his advisoryfirm, ThinkReverse LLC, Agbamu advisesfinancial professionals, institutions and reg-ulators across the country. In a 2007 nation-al report on reverse mortgages, the AARPcited Agbamu’s work. He can be reached byphone at (612) 203-9434 and e-mail [email protected].
Visit author Atare E.Agbamu’s blog at thinkre-verse.com for his thoughts
and insights on the reversemortgage marketplace.
forward on reverse continued from page 30
Who's Left in Wholesale? We are constantly getting requests from our readers asking "Who's Leftin Wholesale?" In response to this question, we are proud to announce
our second annual "Who's Left in Wholesale" Lender Directory.
To get listed in our "Who's Left in Wholesale" Lender Directory today,
visit NMPMag.com/whosleftinwholesale or call (516) 409-5555, ext. 4.
Become a NationalMortgageProfessional.com Blogger! It's free and easy. Just head on over to NMPMag.com, register and
follow the link in the upper right hand side of the page to become a blogger on our site today!
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There’s more than one way for a compa-ny to “go green.” In this month’s article, Iwould like to redefine what “going green”should mean to every C-Level executive.
To set the stage for what I am talkingabout, ask yourself the following questions:
� Beyond having a profitable business,what else is important to you?
� How would you define the ideal envi-ronment for your business (and I amspeaking of an internalbusiness environment)?
� Do you enjoy what youare doing and the wayyou’re doing it?
When we work withour clients, we stress theimportance of not onlybeing profitable, but alsoenjoying the journey.When there is profitabili-ty, plus a sense of pur-pose and enjoyment inour business, we createan environment wheremost of our employeeswill love coming to work.For me, that is what“going green” is all about.
Before I get too farinto this article, I need toestablish a basis of under-standing related to the“psychology of color” forthose who may not beaware of this. Considerthe following:
� Red is the most emotionally intensecolor, red stimulates a faster heartbeatand breathing. One thing that is sureto get any C-Level executive’s heartbeating fast is to see their company’sprofit and loss statement that depictsthe business losing money or operat-ing “in the red.” It is an attention-get-ting color which is why the color “red”is used for depicting losses.
� Black is the color of authority andpower. It is popular in fashion becauseit makes people appear thinner andtherefore more attractive. It is stylishand timeless. Likewise, operating abusiness “in the black” is considered“stylish” by any standard.
� Green is the easiest color on the eyeand reportedly can improve vision.
It is a calming and refreshing color.Isn’t it interesting that our U.S. cur-rency is shades of green. Green sym-bolizes nature, and studies showthat it is the most conservative colorand one that implies wealth.
While there are numerous other col-ors included in the “psychology of col-ors,” these are the only ones of impor-tance as it relates to this article.
We all know what itmeans when a company is“in the red” and when acompany is “in the black.”But what I want to intro-duce to you as you read thisarticle is another dimen-sion of how to think aboutyour business in the finan-cial sense of the word. It is adimension beyond just“operating in the black.” Itis the concept of operatingyour business in the “green”… beyond just being prof-itable each month.
As a leading nationalbusiness management con-sulting firm with a promi-nent mergers and acquisi-tion (M&A) division, we reg-ularly receive calls frombusiness owners wanting tosell their businesses. Whenwe probe the reasons whythey want to sell, we com-monly hear things like:
� “I have been struggling with my busi-ness, and I am tired and want out.”
� “I don’t own this business, this businessowns me, and I want my life back!”
� “This has ceased to be fun … I wantto do something different.”
On a side note … would you agree withme if I said any company like that wouldnot be considered “green?” They usuallyare marginally profitable or not profitableat all. They are not fun to go into every dayof each week and none of the employeesare relaxed, calm or feeling refreshed. It ismore like the life is being drained out ofthem. Heck, most of us have worked at aplace like that and never would go back tothat kind of existence because that is all itis … a bare bones existence.
When I get a call from a businessowner like this telling me they want tosell their business for one of the above
reasons, I always recommend that wefirst start working on the business to getthe business turned around at leastenough so the business is attractive tosomeone looking to purchase a company.This is classic “turnaround management”stuff that we do, day-in and day-out withour consulting business. What is amazingis that as soon as we get the businessturned around and operating in theblack, and even “operating in the green,”the business owner who retained us is nolonger interested in selling the company.Hey, who can blame them! Anyone thathas owned and operated a business thatis operating beyond just being “in theblack,” but is now operating “in thegreen” can tell you that it is fun to cometo work each and every day and it issomething you want to keep. Few thingsare as rewarding as owning and operatinga business at which you are makingmoney, living life to the fullest and creat-ing an environment where there is great“quality of life” for yourself, and hopeful-ly, for your employees.
For many in the mortgage industry, lastyear was a very good year financially, butnot many operated “in the green” … itwas not an enjoyable journey. And, as welook into what the rest of 2010 has in storefor us, we know the business environmentis growing increasingly challenging. We aredealing with higher capital requirements,higher interest rates, decreasing homesales, fewer refinances and a tsunami ofnew regulations coming at us … and now,an increase in healthcare costs! Yet, withall of that (and I am going to suggestbecause of all that), I see more opportuni-ty than ever to be outrageously successfulin the months and years ahead.
Keep in mind what I have been say-ing for the past six months … “moremoney will be made in the next fiveyears (by the few that survive) than wasmade by all the companies that haveoperated in the previous 25 years.” And,I will add to this bold statement, thatthe vast majority of those companies
By David Lykken
“When there is prof-itability, plus a senseof purpose and enjoy-ment in our business,we create an environ-ment where most ofour employees will
love coming to work.For me, that is what
‘going green’ is allabout.”
Redefining “Going Green”
continued on page 36
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And these were just two of thenotable events. All in all, in 1995, themortgage industry witnessed either theentrance or newly-initiated majorgrowth plans of a large national retailer,two large automakers, a huge part of thelife insurance industry, the two largestcontainer manufacturers, and the two
largest independent con-sumer finance companies.
At the time, this was aninvasion to beat any otherswe had ever seen in anyindustry. Never, to ourknowledge, had companiesof such differing base indus-tries or companies of suchhuge combined size goneafter a single industry seg-ment in so short a time. It isastonishing, and should beso recorded in business his-tory books, that the mort-gage business in one yeardrew in K-Mart, GM, Ford,Prudential, Metropolitan,American Can, Owens-Illinois, Household Financeand Beneficial.
At the time, AmericanCan’s mortgage chief KenBerg said, “The industry isjust now being recognized.When we first went to Wall
Street, people said, ‘What’s a mortgagebanker?’ I think today they’ve found out.”
Indeed, as they find out most things,Wall Street discovered mortgage bank-ing most pleasantly by collecting feesand most recently by the collapse of themortgage industry.
In many areas reviewing the pastmay give us a light on the future. As wasthe case in 1995, non-traditionallenders entered a fragmented market.Likewise, could a new group of non-tra-ditional lenders be in the stages of cap-turing market share and taking overwhere banks, savings and loans, andcredit unions have either exited thebusiness, purposely reduced their mar-ket share, or tightened credit require-ments, thus limiting the borrower’sability to obtain a mortgage?
In a recent Wall Street Journal arti-cle, Karen Tally identified one suchnon-traditional banking company thatis filling the void left by these financialinstitutions. Walmart expects a 50 per-cent increase this year in the number ofthe company’s stores offering bank-likeservices. This increase would give theretailer 1,500 “money centers” which isa little less than one for every twoWalmarts in the country.
The mortgage business has undergonesome odd changes. For a long time, itwas viewed as the irrevocable turf ofthe thrifts. That is no longer true.
Mortgage lending has also usuallybeen profitable, but never a perfect busi-ness. Portfolio lenders had a fairly highprofit potential, but also fairly high risk.Mortgage bankers had lessrisk, but also less potentialto build gross dollars ofprofit, and therefore, lesspotential to grow. Today,these fundamentals havechanged, partly because ofan active secondary mar-ket and the array of highyield, high-risk loan pro-grams placed into the mar-ket over the past few years.
Finally, the mortgagebusiness was seldom oneto attract “outsiders.” Itwas regulated and frag-mented. Government con-trolled who could create amortgage loan and where,and who could own alending institution. Everytown and village usuallyhad an ample supply oflenders. In the heyday ofU.S. business expansion,the allure was in manufac-turing and selling the products thatwould fill a home, not supplying thefunds to buy the empty shell. Now thesefundamentals have changed most of all.
Changes in the mortgage businesshave been part of the overall change inthe financial services industry. In fact,the mortgage business has been affectedmore than any other financial industrysegment by the half-steps that deregula-tion took, as well as laws and guidelineswhich seemed at times to change withthe wind. Because of those changes,financial service companies have scram-bled to use every available loophole inthe law that would allow them to put inplace a nationwide delivery system, toget a jump on the competition. Mortgagebanking, unregulated by the federal gov-ernment as banks and thrifts were,became one of the most popular loop-holes for traditional lenders in the earlyand mid-1980s. In 2010, loopholes maybe becoming most popular among non-traditional players.
Abruptly, the action among the non-traditional players heated up in 1995. K-Mart made clear some of its intentions tobecome a very big mortgage company.General Motors Acceptance Corporationmade two acquisitions which, by year-end, made its servicing portfolio thelargest in the United States.
Will the Mortgage IndustryWitness Another Influx
of Non-Traditional Lenders?
“In the heyday of U.S.business expansion,
the allure was in man-ufacturing and selling
the products thatwould fill a home, notsupplying the funds tobuy the empty shell.
Now these fundamen-tals have changed
most of all.”
By Ed F. Wallace Jr., Ph.D.
continued on page 37
MIAC’s new site offerseasier access to asset valuation info
Mortgage IndustryAdvisory Corporation(MIAC), a provider ofFAS 157 fair marketvaluations, mort-
gage risk hedging and accounting solu-tions, has announced the rollout of thefirst phase of its new corporate Web site,www.MIACanalytics.com, a tool the com-pany says will make it much easier formortgage market participants to findinformation critical to their success.Valuation experts at MIAC have beenpublishing a wealth of information andposting it online for over a decade. Thenew site will make this material moreaccessible to the industry.
“We are making it easier for peopleto find the information they need to besuccessful,” said Younes Aouad, a sen-ior vice president in MIAC’s technologystrategies group, who is heading up theWeb effort. “The new site brings mort-gage industry news and information tothem rather than making them go insearch of it, and puts forward our bestcontent.”
The new site separates content areasby business channel, making it easierfor customers to navigate directly to thenews or commentary they are interest-ed in. For example, MIAC’s GenericServicing Assets (GSAs) are available fordownload into MIAC Analytics andviewable on the Web site. Industrynews is also provided in real-time fromthe industry’s largest publications,making the site a clearinghouse for up-to-date information. In particular,MIAC’s solutions are focused onaddressing and managing interest raterisk identified in the recent InteragencyAdvisory on Interest Rate RiskManagement press release. Forinstance, professional commentaryfrom industry experts on industry top-ics can now find this information on theMIAC Web site. MIAC brings more than20 years of experience as the industry’sleading independent pricing specialistand software solution to bear on theissues that are of critical importance tobanks and other holders of illiquidassets.
“For those working in the mortgagespace, the MIAC Web site allows you tofollow one link and find everything youneed,” said MIAC Principal Paul VanValkenburg. “Our site is now one of the
industry’s leading resources for CFOsfacing challenges with asset valuationand risk management.”For more information, visitwww.MIACanalytics.com.
LoyaltyPrint 2.0 adds premier closing gifts tosite enhancement
LoyaltyExpress has announced itsLoyaltyPrint Version 2.0 site release,dramatically empowering loan officersand real estate professionals with anenhanced collection of high-qualityclosing gifts. Now when users cus-tomize greeting cards and postcards fordirect mailings to customers, prospectsand partners—closing gifts can beselected to powerfully convey distin-guishable appreciation.
LoyaltyPrint site enhancementsinclude: Personalized address stampswith attractive and practical homeown-er’s address stamp packaged in a wood-en box with engraved logo; magazinesubscriptions with personalized 4” x 4”mailing labels (on cover of each issue);gift card sets of either 24 postcards or15 premium cards (birthday, thank you,holiday, moving, and other events);brownies, cookies and a mix of eachfrom market-leading confectioner; can-dles; household items and tools,including gardening, barbecue andhighway kits; and calendars (hanging,desk, and journal formats).
“LoyaltyExpress has distinguisheditself on high-quality standards andmethodologies in the one-to-one mort-gage-marketing industry,” said ChiefExecutive Officer Jeffrey Doyle. “Ourmarket-leading programs and servicesallow our clients to cost-effectivelyincorporate world-class communica-tions. I’m especially delighted to roll-out the magazine subscription gift. It’sa great product to generate long-lastingappreciation—and referrals—withevery edition.”
LoyaltyPrint users can select frompopular magazine titles in the homeand personal finance categories. Onevery magazine cover, a four-by-four-inch mailing label features the loanofficer’s/agent’s photo, company logo,contact information and a shortgreeting.For more information, visit www.loyalty-express.com and www.loyaltyprint.com.
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Visionary Apps launchesnew lead generationtools for iPhone, iPadand iTouch
With the new leadgeneration fea-ture of VisionaryApps’ CompleteForeclosures and
Complete Homes apps for the iPhone,iPad, and iPod touch, real estate profes-sionals can obtain featured advertise-ments targeting potential homebuyers,sellers and those searching for foreclo-sures. This new targeted lead generationprogram puts qualified real estate profes-sionals into the direct referral database ofboth the Complete Homes and CompleteForeclosures apps, which have beenranked in the top 10 most downloadedFree Business Apps in the iTunes AppStore.
By purchasing zip codes for regionsof interest, real estate professionalsimmediately receive exclusive adver-tisement space on the CompleteForeclosures and Complete Homesapps. When the app users search forforeclosures and homes in a certain zipcode or by GPS location, they will alsosee an advertisement from the realestate agent who purchased that zipcode, positioning the agent as the localexpert and giving them qualified leads.According to Daniel Burrus, founder ofVisionary Apps, the Complete RealtySuite will “drive a revolution in howpeople shop for, buy, and sell realestate using the ever-evolving featuresof their smart phones.”
Only one agent is displayed per zipcode for each app, creating exclusivereferral territories that enable realestate agents to effectively “lock out”the competition. Complete Realty appusers see full details on the participat-ing agents, including their picture, pro-file, e-mail address, phone number andWeb site address.For more information, visit CompleteRealtySuite.comor www.VisionaryApps.com.
AllRegs announces newNMLS-approved coursesto fulfill SAFE Actrequirements
AllRegs has announcedthe approval of four con-tinuing education cours-es by the Nationwide
Mortgage Licensing System & Registry(NMLS). These new NMLS course approvalsfollow the approval of AllRegs’ Pre-Licensing course, the 20-Hour MortgageOriginator SAFE Comprehensive (CourseNumber 1013). AllRegs became anApproved Education Provider (#1400024)by the NMLS on July 7, 2009.
The following AllRegs courses havebeen approved for continuing education:One-Hour SAFE Elective: Fair Lending—The Essentials (ID#: 1255); Two-HourSAFE Ethics: Fraud and Fair Lending—Consumer Protection (ID#: 1256); Two-Hour SAFE Non-Traditional Mortgages:FHA and Guaranteed Rural Housing (ID#:1257); and Three-Hour Safe Federal Law:ECOA, HMDA, TILA (ID#: 1258).
The Secure and Fair Enforcement forMortgage Licensing Act (SAFE Act) man-dates a minimum of 20-hour pre-licens-ing (PE) and eight-hour continuing edu-cation (CE) courses in every state. Inorder to satisfy these requirements,courses offered to state-licensed mort-gage loan originators must beapproved by the NMLS. Continuingeducation courses must include atleast: Three hours of federal law andregulations; two hours of ethics, toinclude instruction on fraud, consumerprotection and fair lending issues; twohours of training related to lendingstandards for the non-traditional mort-gage product marketplace; and onehour of elective credits.
“We are happy to announce thatAllRegs has received NMLS Approval foreight hours of SAFE Act continuing edu-cation courses,” said Dan Thoms, seniorvice president for AllRegs. “These cours-es have been added and made avail-able to all AllRegs Education Packagesubscribers. Now organizations havemore reason to invest in educationthrough AllRegs.”
The NMLS has established six criteriathat a course must satisfy to gainapproval. These criteria dictate that acourse must possess learning objec-tives, have sufficient material, be ofsufficient difficulty and length, bedelivered in an environment conduciveto learning and have a defines start andend time. AllRegs’ arsenal of NMLSapproved courses has successfully metall criteria.For more information, visit www.allregs.com.
Citi to pilot ForeclosureAlternatives Program toassist distressed borrowers
CitiMortgage has announced the CitiForeclosure Alternatives Program, anew pilot initiative that will allow dis-tressed CitiMortgage borrowers to avoidforeclosure and remain in their homesfor six months by agreeing to sign overtheir property deeds to CitiMortgage atthe end of that period. In addition, Citiwill provide relocation assistance to aidthe borrowers’ transition to anotherresidence at the end of the program.This expanded deed-in-lieu-of-foreclo-sure program, the latest inCitiMortgage’s series of initiatives tohelp distressed borrowers, is beingpiloted in Texas, Florida, Illinois,Michigan, New Jersey and Ohio.
“At CitiMortgage, we’re committed tofinding every solution possible to helpfamilies facing foreclosure. However, thereality is that not every homeowner hasthe financial ability to remain in theirhome,” said Sanjiv Das, chief executiveofficer of CitiMortgage. “The goal of theprogram is to help homeowners make asmooth transition into the next chapterof their lives. The ForeclosureAlternatives Program is another tool inour ongoing efforts to find creative, inno-
continued on page 36
4. Stick with your strengthsA wise person knows their strengths andan even wiser person knows their weak-nesses. Unless you are an accountant,you probably didn’t start your businessbecause your strength was bookkeepingand accounting. You most likely startedyour business because you enjoyed orig-inating loans, helping people get intohomes and, yes, making money.
5. Manage to your strength,hire to your weaknessFocus on that which you do well. If yourstrength is originating loans, why nothire someone to do your bookkeep-ing/accounting? Hire someone to han-dle that which you either don’t enjoydoing or you are not good at … usuallythey are one and the same. However,doing so will not abdicate your respon-sibility for you to “manage by the num-bers (see number two above).
6. Make sure your businessis on a secure foundationThere are stormy days ahead for ourindustry, and for our economy. Investthe time now to make sure your busi-ness is on a solid foundation, so whenthe climate turns ugly, you and yourcompany will be “operating green” …safe, calm, relaxed and secure.
David Lykken is president, mortgage strategiesand managing partner with MortgageBanking Solutions. David has more than 35years of industry experience and has garnereda national reputation. David has become afrequent guest on FOX Business News with NeilCavuto, Stuart Varney, Liz Claman and DaveAsman with additional guest appearances onthe CBS Evening News, Bloomberg TV andradio. He may be reached by phone at (512)977-9900, ext. 101 or e-mail [email protected].
To listen to author DavidLykken’s online radio show,log on to www.blogtalkra-
dio.com and type in “Lykkenon Lending” in the “Search” box on theright-hand side of the page.
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a view from the “c” suite continued from page 33
will not just be operating “in the black,”but will be operating “in the green.”
So, how does a business owner startoperating in the green? Here are sixbasic essentials necessary to do so.
1. Get a plan for what iscomingI am sure that you’ve heard the expres-sion, “A failure to plan is a plan to fail.”What is coming at our industry is goingto require diligent planning. My recom-mendation is for you to not do this in avacuum, but rather, hire industryexperts that have a good understandingof the “lay of the land” to help youchart your course. While there are plansthat everyone should adopt, each planis unique to each company based upontheir business model.
2. Manage by the numbersWhether a business is expanding orcontracting, any successful businessowner will tell you that it is essentialthat you know your numbers, yourincome and expense numbers, on amonth-to-month basis. Borrowing froma religious bumper sticker I saw, consid-er this: “Know (your) numbers, know(your) business” and conversely “Nonumbers, no business.” You would besurprised how few business ownerstruly know their numbers, much lessmanage by their numbers. Don’t makethat mistake with your business. Don’tbe afraid to get consulting firms likeours involved with you to help youfocus on the right numbers.
3. Keep your costs vari-able as much as possibleFixed costs can kill your business in acontracting or volatile market. The moreelastic you can make your expenses, theeasier it will be to manage your prof-itability. Remember your income hasalways been the variable number. Makesure your expense numbers are as well.Outsourcing aspects of your operationslike bookkeeping/accounting or evenback office fulfillment can make such adifference in bottom line.
vative ways to help our customers acrossa variety of difficult financial situations.”
In exchange for the deed on theirproperty, CitiMortgage will allow borrow-ers to stay in their homes for a period ofup to six months. At the end of the sixmonths, the borrower will turn over theproperty deed to CitiMortgage, andCitiMortgage will provide a minimum of$1,000 in relocation assistance to theborrowers. Citi will also provide reloca-tion counseling by trained professionalsand will cover certain monthly propertyexpenses if Citi determines that the bor-rower can no longer afford them.Payment of utilities costs will be theresponsibility of the borrower. Othercosts incurred by the borrower, such ashomeowner’s association and escrowfees, will be determined on a case-by-case basis considering the borrower’sspecific financial circumstances. As partof the agreement, borrowers must main-tain the property in its current conditionand agree to bi-monthly meetings dur-ing which trained relocation profession-als will help the borrower prepare forthe next chapter of their lives.
Before a borrower enters theForeclosure Alternatives Program, theymust first be evaluated for a permanentmortgage modification. For those whodo not qualify for a modification oranother solution, CitiMortgage willexplore the possibility of a short sale inwhich the company might accept abuyer’s offer for less than the outstand-ing amount of the mortgage. If a shortsale is not feasible, then the borrowermay be considered for the deed-in-lieuprogram. In addition, in order to be eli-gible, homeowners must hold firstmortgages with a clear title owned byCitiMortgage, occupy the property, andbe at least 90 days delinquent on theirmortgage payments.
As it evaluates the progress of the pilotprogram, CitiMortgage will assess whetheror not to expand the program to other partsof the United States. The initial pilot isexpected to help as many as 1,000 families.
“We hope others in our industry willjoin us in helping distressed borrowersacross the country,” said Das. “By helpingavoid the foreclosure process, which canbe very stressful and distracting, andkeeping people in their homes longenough to make an orderly transition tothe next stage of their lives, we are alsosupporting neighborhood revitalizationand stabilization efforts, which are cru-cial to the nation’s economic recovery.”For more information, visit www.citi.com.
Interthinx unveils itsConditioned ValuationModel product
Interthinx, a provider of risk mitigation,fraud detection and regulatory compli-ance tools for the residential mortgage
industry, has announced the launch ofits Interthinx Conditioned ValuationModel (CVM) product, automated valu-ation technology and analytics tem-pered by a professional propertyinspection. This new approach to prop-erty valuation will provide lenders andservicers with a powerful choice that ismore accurate than an AVM (automat-ed valuation model) and less expensivethan BPOs (broker price opinions).
“AVMs have become an industrystandard and a valuation tool manyrely on without question.Unfortunately, excessive AVM usagemay have contributed to an epidemicof overvaluation fraud,” said KevinCoop, president of Interthinx. “And val-uation fraud is not diminishing. OurMortgage Fraud Risk Report from thethird quarter of 2009 confirmed prop-erty valuation fraud risk is up 46 per-cent from a year ago. With the newCVM, Interthinx can deliver affordable,real-time condition-based property val-ues to the lending and servicing com-munities.”
The Interthinx CVM is strategicallypositioned along the continuum ofexisting property valuation productsbetween AVMs and BPOs. At a costlower than a standard BPO, theInterthinx CVM allows for more reason-ably priced and comprehensive duediligence for businesses requiring moreinformation than a conventional AVMcan offer.
The CVM starts with an AVM thatuses MLS (Multiple Listing Service) andpublic data to factor current marketconditions for the greatest accuracy.Then, the CVM applies an adjustmentbased upon an exterior inspection ofthe property and neighborhood by aprofessional third-party inspector. TheCVM report includes photos of the sub-ject property, neighborhood condition,a condition-adjusted value, and marketprice trends.
“The CVM promises to advancemortgage due diligence to a new level,”said Mark Chapin, chief valuation offi-cer for Interthinx. “The CVM combinespowerful valuation analytics that fac-tors property condition by an objectivethird-party to produce an accurate,transparent property valuation at acost-effective price.”For more information, visitwww.interthinx.com.
FNC releases new apprais-al review technology
FNC Inc. has released a new productdesigned to make appraisal reviewmore efficient. The Web-based work-flow software, GAAR Viewer, workshand-in-hand with one of FNC’s flag-ship products, the Generally AcceptedAppraisal Rules (GAAR)—software that
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The primary focus of these moneycenters is to attract the lower-incomecustomers who do not have a signifi-cant banking relationship, which thefederal government estimates to be onein four U.S. households.
In Talley’s article, she quotes JaneThompson, president of WalmartFinancial Services in saying, “We thinkbanks are not as interested in this cus-tomer and have a lot of other things ontheir plates, so we see a lot of space toservice customers’ basic financial needs.”
At the present time, the Walmartmoney centers generate three million tofive million transactions per week.Although Walmart has tried and failed toobtain a bank charter in the past, fearingthe company could force the bank it con-trols to lend to preferred parties and notto its competitors, who is to say thattimes will not evolve to let Walmart, aswell as other non-traditional powerhous-es, into the mortgage arena if for nothingmore, but to try and serve a segment ofthe population which otherwise is start-ing to be culled out of the mix despitesuperior credit scores and the ability torepay a mortgage.
As we all know, financial institutionsmust comply with federal, state andlocal requirements for lending, as well asbanking services. However, many areas
of the country are underserved in theseareas which could open the door fornon-traditional companies to enter amarket.
It will be interesting to see who mayor may not enter the mortgage indus-try over the next few years. I wouldestimate the character of any entrantwill be that of bigness. This, in part, isdue to the capital it takes not only tostart an operation, but to also main-tain it until production levels can bereached, which sets the company intoa self-sufficient mode.
With all that has happened in thefinancial sector and the new proposedregulations, it could possibly be anoth-er cycle that will place non-traditionalcompanies at the forefront of theindustry as it did in the 1990s.
Ed F. Wallace Jr., Ph.D. is the chief inte-gration officer for Docu Prep Inc., anationwide provider of closing docu-ments and initial disclosure services,including secure electronic deliverytools, loan analysis testing, and dynam-ic selection of documents, bar coding,secured and certified eSignatures andeMortgages via LOS interfaces, Web serv-ices and standalone systems. He may bereached by phone at (801) 574-2919 ore-mail [email protected].
influx of non-traditional lenders? continued from page 34
scours appraisal reports for any regula-tory compliance violations, as well asinconsistencies and excessive adjust-ments—possible indicators of unsup-ported values and/or fraud.
“This thorough, automated reviewtool serves as an assistant to the under-writer or reviewer, providing instantresults of potential issues,” said GwenMagrisso, GAAR project manager.
Designed to save time for reviewersand cut costs for banks, GAAR Viewerpresents an on-screen view of theappraisal report with any rule firingsand related fields on the appraisalreport form highlighted in red.Reviewers, underwriters, QA profes-sionals—any users of GAAR Viewer—can hover their cursor over the high-lights to reveal the rule reference num-ber and description of the potentialviolation.
“The result of using GAAR Viewer is amore accurate appraisal review andultimately a more reliable appraisalreport,” said Karen Mogridge, FNC’sproduct manager for collateral dataand analytics. “For lenders, that meansgreater confidence in the property val-uation on which their loans are sup-ported.”
FNC’s GAAR is a first-level, total col-lateral review system that can enableusers to review all appraisals pre-clos-ing to help ensure well-documentedvaluations.
“Where QC once stopped at minimalcompliance guidelines, reviewers cannow use this state-of-the-art technologyto automate a much deeper reviewfaster than ever before,” said KathyCoon, FNC’s chief appraiser. “GAAR iscritical because its risk rules allow QC togo far beyond the minimal complianceand risk guidelines of years past.”For more information, visit www.fncinc.com.
The Accurate Title Groupreleases GFE Calculator
The Accurate Title Group LLC hasannounced the release of its TAG GoodFaith Estimate Calculator (TAG GFE).This exciting new product comes inresponse to the Real Estate SettlementProcedures Act (RESPA) and its revisionsto the Good Faith Estimate (GFE) andHUD-1 Settlement Statement. The TAGGFE provides instant, accurate calcula-tions for purchase, refinance and homeequity transactions in all 50 states andall counties for title insurance premi-um, endorsements, CPL fees, search,closing fees, recording costs and trans-fer taxes.
“We quickly assessed the availablemarket and saw an opportunity todivert our IT priorities to leap frog thecompetition on fee disclosure,” saidATG’s Chief Information Officer MikeCullen. “It is exciting to streamline thedevelopment of technology to providemore accurate, detailed and compre-hensive fees faster than any other prod-
uct available today. We see this as astep towards a fully automated, instantHUD-1.”
The TAG GFE is a user-friendly toolthat is helping ATG quickly grow itsnational market share by simplifyingGFE and HUD-1 preparation for highvolume mortgage and home equityprocessors. It also ensures GFE compli-ance and advises lenders of how feesare customarily split between sellersand buyers throughout the country,enabling lenders to confidently quoteand close purchase transactions nation-ally. When ATG provides the settlementservices in combination with the TAGGFE, a lender is assured of accurate dis-closures.For more information, visit www.accurate-group.com.
a la mode releasesNational Appraisal FeeReference to meet compliance needs
a la mode inc. has released the firstpublic edition of The Appraisal FeeReference (AFR). The AFR is the author-itative national analysis of independ-ent appraisal fees, and is just one of themonthly data sets published as part ofa la mode’s Appraisal Industry Analyticspractice. Using the data from hundredsof thousands of verified and validatedappraisals, the AFR reports the medianappraisal fees for each of the 3,221counties and districts in the 50 states,the District of Columbia, Puerto Ricoand Guam.
For compliance with the U.S.Department of Housing & UrbanDevelopment’s (HUD’s) new 2010RESPA rules and the revised GoodFaith Estimate (GFE), the AFR gives alender a defensible basis for estimat-ing closing costs on a GFE for loansusing independent fee appraisers.Lenders utilizing the Mercury Networkalso receive additional data sets forGFE compliance.
“Knowing what’s customary or com-monly expected is only the first step. Asin any business, only the person per-forming the actual work would be ableto say what is reasonable or requiredfor a specific request,” said DaveBiggers, a la mode’s chairman. “In realestate that’s especially true since everyproperty is different. The key is that theAFR provides lenders and appraisersalike a logical, legally defensible start-ing point for that fee discussion and forGFE estimation.”
As for the actual report, theFebruary 2010 edition of the AFRreveals several interesting fee statistics.For example, the most expensive coun-ties to get an appraisal were not in themajor cities. Instead, the 50 mostexpensive locations were dominated bycounties in Alaska, Hawaii, andWyoming. Of the locations with the
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Going Green and Stamping Out Fraud
The quality control and fraud detectionarena is excited about the “going green”concept for the mortgage industry becauseit is leading the way for a decrease in mort-gage fraud, such as identity theft and for-gery. The problem with going paperless isthe fact that so many documents requiresignatures known as “wet ink.” There aretwo types of signatures other than wet ink:Electronic signatures and digital signatures.
An electronic signatureis merely signing a digitalpad or screen that cap-tures an electronic signa-ture, trying to replicate awet ink signature andplace it on a document.We have all done this atthe store when we makepurchases with bankcards and credit cards.The advantage is that it isconvenient and easy touse. The disadvantage isthat the signature padhas a low pixel ratio anddoes not provide asmooth read/write as wetink, the electronic signa-ture can be stored in adatabase and can be cap-tured or stolen, the elec-tronic signature rarelymatches a wet signature,and a person’s identity israrely validated prior to signing and sig-natures are not compared.
Because of the primitive technologyof the electronic signature, it is difficultfor the forensic auditor when lookingfor forgery or identity theft. Electronicsignatures, however, will be short-lived,because of other technologies on thehorizon that are more secure and lessprone to identity theft.
A digital signature is different from anelectronic signature because there is nosignature. A digital signature is issuedfrom a secure platform involving othertechnologies that produces an individualnumber for a person that represents thatperson’s legal signature and identity.
Think of it like a social security number,account number or a bar code that iden-tifies you. The digital signature is moresecure than an electronic signaturebecause the identity is already validatedand verified through the vetting processof issuing the security certificate for thedigital signature. Also, to use a digital sig-nature requires other passageways,including log in accounts to networks and
software, in order to sign adocument digitally, thusadding more layers of secu-rity and identity verifica-tions. The digital signatureis usually installed on anelectronic tape on a cardlike a hotel key or creditcard. When the digital sig-nature is used, it usuallyrequires a PIN (personalidentification number) inorder for it to activate as alegal signature, yet anotherlayer of security that elec-tronic signatures do notrequire. Therefore, everypage of a document leavesa digital thumbprint asdocuments are accessed.This is a fraud investigator’sdream.
The disadvantages aremany because of the hostof technology support
and technology staff to make it work.Digital signatures requires the produc-tion of card keys and the hardware toburn the binary code to the electronictape. If you lose the card, you cannotsign digitally until a new card is issued.The advantages are that it is the mostsecure identity protection available. Athief will have to utilize a host of tech-nologies and electronic intrusion hard-ware and systems in order to commitfraud using a digital signature.
I know of one incident of fraud thatinvolved a digital signature.
Someone with similar access wasable to access documents already digi-tally signed via a network and software
access. The individual copied and past-ed a different digital signature andplaced it on other documents. Thismeans that the digital signature can belifted, however, the date could not bechanged. If a document required dualdigital signatures, the dates would haveto match or be within tolerance for theexecution of the document. Also, thedocuments left a digital thumbprintand were traced back to the theft. Eventhough, the digital signature was lifted,the electronic trail was made.
The future of signatures could possiblycome in the form of fingerprints or retinascans. In Iraq, pictures of one’s ears anddigital voice capturing were used as ameans of identity verification for verify-ing individuals. Technology will make the
wet signature obsolete at this point, thedemand for signatures other than wet sig-nature will only come as demand is madeand as technology becomes less expen-sive and more available.
Tommy A. Duncan, CMT is executive vicepresident of Quality Mortgage ServicesLLC. He may be reached by phone at(615) 591-2528, ext. 124 or e-mail [email protected].
Visit co-author Tommy A.Duncan, CMT’s QualityMortgage Services LLC Web
site at www.qualitymort-gageservices.com for more informa-tion on quality control programs andcompliance solutions.
By Tommy A. Duncan, CMT
Paperless Lending Offers Fraud Risk Mitigation
The mortgage industry has embracedpaperless lending, bringing a some-what unexpected, but critical benefit tothe market—another line of defenseagainst mortgage fraud.
The benefits of going electronic, sav-ing time, reducing costs and improvingaccuracy are being realized by lendersacross the industry. This is evidenced bytheir increased reliance on electronicdocuments. Today, more than 80 per-cent of the loan documents volumeflowing through the pipelines of thelargest lenders is electronically enabled,meaning that if the borrower chooses tokeep it electronic, the documents willnever paper out. That compares toabout 40 percent just a few years ago.
Those benefits are what drewlenders to the technology, undoubted-ly, but they are not the only catalysts forthe hefty adoption rates. Lenders havelearned to manage and track their per-formance based on the critical metrics-based data from their electronic datastreams and the associated transactiondata. Banks are sending more dataelectronically, and that makes the datamuch more accessible to applicationstheir service providers offer to protectagainst fraud.
An increased focus onfraud risk mitigationFraud risk mitigation-related due dili-gence is no longer considered overkill,especially in the wake of the mortgagefallout of the past few years. It is amatter of business self-preservation, adefense against losses. In addition, itis not just a single department thathas embraced electronic documents,but several departments, all acrossbanks.
Mortgage executives now realizethat paperless lending makes fraudharder to commit, and easier forlenders to identify. There can be nodoubt that mortgage fraud is on theminds of executives and about theimportant role e-documents play infraud risk mitigation. Many lendersacknowledge that they are taking stepsto mitigate fraud risk.
To that end, several companies havereleased products designed to helplenders mitigate risk without hamper-ing loan origination volumes at a timewhen every loan is valued at a premi-um by the institution. These productsare working. However, until recently,there has not been a solution toaddress settlement agent fraud.
By Sharon Matthews
“The digital signatureis more secure thanan electronic signa-
ture because the iden-tity is already validat-
ed and verifiedthrough the vetting
process of issuing thesecurity certificate forthe digital signature.”
As the owner of a software company,I’ve created systems for a variety ofclients designed to automate their dailyoperations. Prior to moving into the21st century (or 20th, for some), I’veseen organizations try to solve prob-lems with rooms of filingcabinets, or having a “logbook” for just about everyscenario you can think of.
For most, building acase for computerizing apaper system is prettyeasy, since those mired inpiles of paper realize, “thisisn’t going to work muchlonger.” When I start talk-ing to a new client aboutnew technologies avail-able to them, I never men-tion the word “paperless,”I’m a bigger fan of thewords “automation” and“efficiency,” but goingpaperless is often morehype than anything else.
“This is great, we’re going paperless!”I’ll often hear. These are the ones soexcited because they’re moving into ascience fiction environment whereeverything is brought “on-screen.” Theyoften just returned from a conferencewhere some self-proclaimed expert dis-cussed the benefits of a futuristic,green, utopian society. They’re lookingto run before they crawl.
On the other hand, there are thosewho get nervous when hearing theword “paperless.” Ironically, they’renervous because they picture the sameenvironment as the excited ones. Butthey don’t see themselves being able tofit into an environment with no paper.
The reality is, automation and bettertechnology are not synonymous withpaperless. Online storage of documentsand data is a great idea for various rea-sons: It creates a central unit of storageso that no one is searching for a lostdocument or updated log book.Duplication of documents and doubleentry is eliminated. It also guardsagainst physical disaster. If a system is 39
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ment agent partners, it is possible toautomate due diligence on every docu-ment that flows into the loan file fromthird parties, as long as those docu-ments are electronic.
The move to paperless has made it pos-sible to access the data beneath the docu-ments and use it to perform diligencechecks that absolutely reveal fraudulentactivity related to third party partners.Vendors are realizing this, and I expect theindustry to see more collaborative solu-tions in the future. These new process
workflows, like eLynx’sElectronic Closing Network(eCN) offering, address theneed by providing trans-parency between a lenderand every approved vendorthey work with. This makesit easy to see exactly whothe lender partners withand what is happening tothe HUD-1 as the processprogresses, aiding in regula-tory compliance.
Electronic mortgagelending has led to the cre-ation of an industry-wideinfrastructure that enablesclosing documents to beexchanged among the bor-rower, lender, title under-writer, settlement agentand other business part-ners, flawlessly, seamlesslyand transparently. Thatmakes it very hard forfraud to hide.
It’s also making it pos-sible for lenders to takeback control of the clos-
ing process in a way that centralizes allof the information and connects thepartners with an online hub.
As more lenders utilize such systems,they’ll find it easier to run automatedanalytics prior to a loan closing. Theywill know who is responsible for closingeach loan and connect with closing part-ners in a secure fashion. Internal sys-tems will connect, sharing data seam-lessly and collaborating to reconcile theHUD-1 and re-disclose as necessary asthe loan moves through the pipeline.
Over time, settlement agents will buildreputations that are backed by perform-ance data and lender partner grading sys-tems that will allow originators who usethese systems to benefit from each other’sexperience. Fraudsters would be markedonce and blocked by all, at the sametime, the best agents would get effortlesspromotion across the industry.
Few would question that technologyplatforms that are intuitive, help lend-ing institutions remain vigilant in thefight against fraud, and are transpar-ent, have a place in the mortgage busi-ness. But with the regulatory scheme
Where fraud still hides inthe mortgage transactionStatistics indicate that fraud is almostalways perpetrated with collusion fromparties inside the institution, eitheremployees of the bank or other partieswho work with the bank. With dozensof participants involved and virtuallyunlimited opportunities for ill-gottengains, mortgage lending is particularlyvulnerable to scams.
I have been impressed with the technol-ogy that has begun to reach the market—several are adept at sniffingout fraud related incidentsto third-party originators orby collateral valuationproviders. Missing in theprocess, however, were theclosing agents, the peoplelenders trust to bring thetransaction to fruition.
Having consulted withmany of our clients, itappears that lendersassumed that becausethey maintained controlof the closing documents,the risk from fraud waslow. That perception hasproven to be wrong. Ouranalysis shows that therisk is high, even very latein the loan originationprocess, right up to theclosing table. That’sbecause once loans go tothe closing agent, lendersyield control and subjectthemselves to risk fromseveral sources. Forinstance, mistakes indata entry or unconventional businesspractices often undermine the closingprocess, jeopardizing lenders.
Too often, the lender finds out aboutthe fraud after the deal has closed and,occasionally, after it is funded. The clos-ing process, most of us would agree,lacks transparency.
Recognizing the vulnerability oflenders, the U.S. Department ofHousing & Urban Development (HUD)has handed down rules governing set-tlement services agents. Lenders havebeen tasked with scrutinizing theseplayers. This will uncover some badplayers, but identifying a source offraud that late in the process is, by nomeans, a best practice.
How electronic documents have made it easier to spot fraudTo prevent settlement agent fraud, thelender has to monitor the whole processin the overall loan origination workflow.To do that effectively requires automa-tion. While it’s not possible to task a sys-tem with 24-7 surveillance of settle- continued on page 40
that lenders and their business partnersare charged with adhering to, the stakesare higher and the need for a solution ismore pressing.
Technology solutions are now avail-able to help lenders deal with this envi-ronment and succeed. They wereenabled by the hard work of mortgagetechnology professionals, but also bythe lenders who had the courage to
begin sending those first documentsout electronically instead of on paper.
Sharon Matthews is president and chiefexecutive officer of eLynx in Cincinnati,Ohio. She has more than 20 years ofexecutive experience running profitablelarge technology and software compa-nies. She may be reached by e-mail [email protected].
“Today, more than 80percent of the loandocuments volumeflowing through the
pipelines of the largestlenders is electronical-ly enabled, meaningthat if the borrower
chooses to keep it elec-tronic, the documentswill never paper out.
That compares toabout 40 percent just
a few years ago.”
Paperless or Just Less Paper?backed up off-site (a very easy thing todo these days), it is completely protect-ed in the event of a fire, flood or otherdamaging events.
Even if an organization succeeds ingoing completely paperless (a rarity indeed),
they cannot control vari-ables outside of their ownorganizational unit. Hereare some examples:
� A real estate companythat negotiates short salesuses a system I designed toproduce all of the paper-work needed for a shortsale proposal that gets sub-mitted to the lenders. If alender also uses a paper-less system, documentscan be sent electronicallyfrom their office directly tothe lender. What if a lenderrequests the documents tobe mailed with an originalhandwritten signature?
How about the buyer or seller whodoesn’t have Internet access and needsto receive the documents in a moretraditional format?
� Another system I designed is used byfirms who try to reduce propertytaxes on behalf of the homeownersthey represent. The system producesall the necessary documents elec-tronically. However, most taxingauthorities (school districts, towns,counties, etc.) are far away fromsuch automation. One appealprocess requires the tax reductionfirm to produce five copies of thesame document to be distributed tovarious different taxing authorities.In an effort to improve this, an “e-fil-ing” system was created. This systemmade a number of programmershappy by giving them work to do(for the tax reduction firms and tax-ing authorities), but only resulted inthe elimination of one set of the
By Erik Wind
“The reality is,automation and
better technology arenot synonymous with
paperless.”
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fire, flood or gross inefficiency to motivateyou to make the move. But if you alreadyare at that point, and you want to gopaperless because that’s the buzzword ata recent conference, think again. In fact,think three or four times and make sureit’s going to benefit you in the end.
Erik Wind is the president of EWDC, a soft-ware company based in Farmingdale, N.Y.Erik has created various software applica-tions for the real estate industry for the pur-pose of short sales, property tax reduction,and is one of the developers of GeoDataPlus, a leading real estate data company inNew York State. He may be reached byphone at (516) 882-6930, [email protected] or visit www.ewdc.net.
documents. Case in point, the firmsare still required to print the samedocuments, but now have an addi-tional requirement with the e-filing.
If your office’s system is not computer-ized to the extent where all documentsand data are centrally stored and secure-ly backed up, find a way to do so soonerthan later. “Off the shelf software” maysuit your needs for surprisingly less thanwhat you’d expect. If you need somethingdeveloped specifically for your organiza-tion, software developers (like any otherbusiness) are likely to charge less nowthan what they’d charge in previous yearssimply because their business is slow too.Don’t wait for disaster in the form of a
tions can image or scan the files into anelectronic loan folder, or they can out-source this step to a third-party vendorthat can also extract relevant, necessarydata from the files. Once the data isextracted, lenders can manage the imagedfiles in a more organized fashion furtherincreasing efficiency. In addition, onlineimaging capabilities enable a collabora-tive, all-access view of the loan files whereother mortgage loan constituents canquickly review and accept documents,thereby improving turnaround.
A recent imaging technology being usedby the mortgage industry is the DataGlyph,which is very similar to a barcode tag. Byusing a sophisticated tag, placed on the firstpage of the paper stack that is scanned intoan electronic loan folder, files can beindexed quickly and automatically. Forexample, Wisconsin Mortgage Corporationis using this new technology as a way toreduce labor and paper costs. The tags canstore important data and offer redundancywhen damaged or tampered. They alsoensure the document is stored in the prop-er location within the electronic folders soWisconsin Mortgage can upload documentswithout the use of a scan cover sheet.
Electronic documentsAs the final piece of the P.I.e, a true elec-tronic mortgage (or e-mortgage) wouldrequire that the loan files are neversigned on paper. From the outset of theloan process, with the initial application,to the final step of sending the loan fold-er for archiving, files are living documentswithin the electronic loan folder. With atrue e-mortgage solution, files within aloan document can be tagged with metadata, which enables system comparisonsand greatly reduces costly processes ofcomparing image docs to data systems.
E-mortgages more securely completeloan transactions, thereby protecting con-sumers’ personal financial information, inaccordance to federal regulations. Withtoday’s collaborative loan processing tech-nologies, security measures have been putin place to guarantee financial dataremains confidential and safe. For exam-ple, some e-mortgage technology providersoffer a secure, personal electronic signingroom for loan documents to be signed.Rather than a typical disclosure or closingprocess where borrowers sign a significantamount of paperwork to finalize the loan,an electronic signing room enables them toview the files electronically in the closingroom and sign with an electronic signature.
By providing each individual partywith unique authentication credentials,these e-mortgage technologies can lockdown documents and track changeswhile ensuring only designated partiesare able to view and sign the documents.
Get your piece of the P.I.eAccording to a recent survey of mortgage
lenders conducted by Xerox MortgageServices, 31 percent of survey partici-pants believe it will take less than fiveyears for the mortgage industry toprocess more than 50 percent of all loansas an e-mortgage. Another 44 percentbelieve it will take five to seven years.These survey results confirm that themarket is striving for a paperless solutionto improve efficiencies and reduce costs.
Until the mortgage industry is readyto go completely paper free, which, dueto regulations, may not be for sometime, “paper light” loan processing canbe achieved by using various compo-nents of the P.I.e. Imaging and scanningtechnology that transforms hard copyfiles into electronic documents allowsdocuments to be instantly circulated tonecessary parties to streamline process-es and turn loans faster.
Guild Mortgage Company, headquar-tered in San Diego, Calif., is one organi-zation that has already taken the e-mortgage leap, beginning the processof a secure, convenient way to deliver,sign, store, access and manage the life-cycle of its loan documents. The solu-tion is targeted at helping Guilddecrease costs associated with storing,printing and mailing hard copy loandocuments and has increased pull-through rates. The e-mortgage processalso allows Guild to comply with theReal Estate Settlement Producers Act(RESPA) that mandates the tracking andmanagement of disclosure documentswithin 72 hours.
Make your checklistLenders already working with the P.I.e, orthose considering advancing their organ-ization through new technology purchas-es, need to consider their technologyroadmap when selecting a vendor.Companies can easily create a checklistof requirements that should include sup-port for future paperless strategies, suchas e-mortgages, e-signature and e-vaults.Solutions must be flexible to incorporateother pieces of the P.I.e, such as imagingand DataGlyphs. With these require-ments in hand, an organization can beprepared to make a long-term decisionon its vendor partners.
By understanding the components ofthe P.I.e, an organization can focus on itsnext steps for going paperless—withoutbeing overwhelmed with the need tomove straight from traditional loan pro-cessing to pure electronic loan process-ing. As they say, “the pie is ready.”
Greg Smith is vice president and generalmanager for Xerox Mortgage Services, for-merly Advectis Inc., provider of BlitzDocs,a widely-used solution for electronic mort-gage document collaboration. He can bereached at [email protected] orvisit www.xerox-xms.com.
It’s no question that the mortgage industryis in a state of transition. To overcome theobstacles and survive market turmoil,lenders must face the realities of the marketand evolve their processes to become as effi-cient and cost-effective as possible. In recentyears, an increasing numberof mortgage companieshave committed to going“paperless.” Companies aremoving toward paperlessoffices at different speedsand are often working witha combination of paper,imaged and electronic docu-ments—or “P.I.e.”
By having a holistic viewof the entire mortgage loanprocess and a better under-standing of each componentof the P.I.e, organizationscan streamline processesand ensure their outsourcedpartners will meet thedemanding needs of the cur-rent market environmentand make their operationsas efficient as possible.
PaperThe mortgage industryhas long recognized thatmounds of paper filloffices and overflowdesks. These paper files are, at times,necessitated by government regula-tions, such as the Electronic Signaturesin Global and National Commerce (E-SIGN) Act. At other times, they arerequired by lenders who have not yetevolved to paperless processes and relyon hard copy files to get work done. In
any case, it is no mystery what makespaper so difficult to manage.
Loans consist of multi-page documentsand forms—such as applications, earningsverifications, statements, tax forms, creditreports, appraisals and contracts—that
need to be prepared,accepted and processed. Asthis process occurs, paperpiles up—filling cabinetspace, requiring additionalpostage fees and taking atoll on the environment. Inthe end, traditional paperloan folders can generatean excess of $100 each tomaintain for just two years.Even worse, as the loanmatures, even more costscan mount with archivingand retention fees.
As lenders continue tobecome aware of theincreased costs associatedwith paper, they realize theneed to reduce the paperportion of the P.I.e. In aneffort to do so, organiza-tions are leveraging onlinecollaborative technologiesto share loan information.
ImagingOn-demand imaging serv-
ices and capabilities can be used in avariety of ways to evolve organizationsto a “paper-free” office environment.From origination to post-closing, filescan be quickly and easily shared onlineto drive efficiency, increase productivityand reduce costs.
Once paper files are received, organiza-
Pieces of the P.I.e: Paper, Imaged and e-Documents
By Greg Smith
“According to a recentsurvey of mortgage
lenders conducted byXerox Mortgage
Services, 31 percent ofsurvey participants
believe it will take lessthan five years for themortgage industry toprocess more than 50percent of all loans as
an e-mortgage.”
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Can't Miss Event For Anyone Involved In Credit!Don't miss this HIGH OCTANE training conference cov-ering crucial topics such as Advanced Sales, Marketing,Client Support, Qualifying Prospects, FICO Scoring,Time Management, Compliance...and MORE!
Did you know? Majority of businesses that we consultwith are out of compliance.
Network with other credit professionals at the Welcome Reception on Fridaynight and the NACSO Banquet lunch on Saturday.
Make sure to stay for our bonus business coaching session for a "Question &Detailed Answer Panel." This session will last as long as it takes!
Space is limited at the resortDo not delay registration!
www.NACSO.org/conference
• Avoid big mistakes most companies make.
• Maximize client satisfaction.• Qualify prospects efficiently.
• Understand scoring cards.• Be profitable and be compliant!• AND MUCH MORE!
Learn How To:
lowest fees, appraisers in Ohio wererepresented disproportionately, with 18of the bottom 50 slots being taken bycounties in the state. Four nearbystates—Pennsylvania, Kentucky,Illinois, and Wisconsin—also had threeto four counties each in the bottom 50.
The East North Central census divi-sion, comprising Illinois, Indiana,Michigan, Ohio, and Wisconsin, rankedat the very bottom of the nine divisionsnationally, with a median fee of $300.The Pacific division was most healthyoverall for appraisers, with a median of$400. When looking at the larger censusregions, the West and South fared bestfor appraisers with median fees of $375and $350, respectively. The Midwestand Northeast did more poorly, withboth showing medians of $325.
Nationwide, the median observedappraisal fee was $350, with an averageof $351.For more information, visitwww.alamode.com.
Stewart Lender Servicesnow offering short saleand deed-in-lieu services
Stewart LenderServices (SLS), awholly-owned sub-sidiary of StewartTitle Company, has
announced a comprehensive solutionto help mortgage servicers meet therequirements of the Home AffordableForeclosure Alternatives (HAFA) pro-gram. HAFA provides additional optionsand incentives to borrowers, servicersand investors who utilize a short sale ordeed-in-lieu to avoid costly foreclosures.
“SLS is an industry leader—offeringmortgage servicers an effective alter-native to costly in-house processing,”said Jason Nadeau, SLS president andchief executive officer. “Our HomeRetention Services group has nowdeveloped a solution for mortgage ser-vicers seeking an efficient means forcomplying with HAFA requirements.Using an experienced and provenFDCPA-compliant Borrower ContactCenter and fully integrated workflows,we can handle properties throughoutthe distressed asset continuum—loanmodification, short sale, deed-in-lieu,foreclosure, asset management anddisposition—improving communica-tion among all parties and acceleratingtransaction completion.”
Borrowers can transition from thefailed loan modification to a short saleoption, and further on to a deed-in-lieuof foreclosure in the event the shortsale is unsuccessful.
To compress the time for completinga short sale, or implementing a deed-in-lieu, SLS title and settlement teamswork up front to identify any potentialtitle issues and necessary third-partypayoffs to immediately begin curativetitle work. This assists in investor and
mortgage insurance negotiations andensures that hurdles in the transactionare cleared prior to the receipt of anoffer to purchase the property or trans-fer of deed.
The SLS Short Sale Management Centercombines experienced professionals andproven technology to improve the speedand effectiveness of short sale transac-tions. The Center relieves servicers of thetime-consuming, labor-intensive shortsale process, moving it into the hands ofan experienced real estate transactionmanagement company.For more information, visit www.stew-artlenderservices.com.
DocuSign launchesVersion 10.1 SaaSeSignature Service withiPhone functionality
DocuSign hasannounced therelease of the
DocuSign version 10.1, the latest releaseof the company’s e-signature service. Thisversion offers unique features and func-tionality designed to support workflowand productivity including automation ofform fields and other workflow enhance-ments to simplify the user experience.This feature set is further extendedthrough the release of ESIGNControl, acustom DocuSign application specificallydesigned for Apple iPhone users by SmartMobile Solutions. DocuSign, combinedwith ESIGNControl, supercharges salesteams, real estate professionals, mortgagebrokers, and business development andoperational professionals who rely on theDocuSign e-signature service to close dealsonline in minutes.
Gartner predicts that worldwideSoftware-as-a-Service (SaaS) revenue willexceed $14 billion for the enterprise appli-cation markets by 2013, up from $7.5 bil-lion in 2009. Organizations of all sizes aredeploying affordable, on-demand solu-tions like DocuSign to automate core busi-ness functions, reduce costs and increaseemployee productivity. Whether it’s a sim-ple NDA or a complex global sales agree-ment requiring multi-party signatures,DocuSign helps companies operate green-er, faster and more profitably by removingthe hurdles associated with the signingprocess and by offering more ways forusers to access and complete their trans-actions online.
“This release of DocuSign version10.1 adds more sophisticated capabili-ties that make it faster and easier thanever to get documents signed online,and to share data with other core busi-ness applications,” said Tom Gonser,founder and vice president of productstrategy at DocuSign. “DocuSign is cre-ating an e-signature ecosystem thatmakes it possible for organizationsacross all industries to close deals in thecloud and operate more efficiently.”
“The iPhone is quickly becoming amust-have business productivity tool and
ESIGNControl makes it easy for DocuSignclients to maximize efficiencies whenaway from the office,” said Tony Tonchev,founder of Smart Mobile Computing andcreator of the ESIGNControl application.“ESIGNControl was developed for theiPhone and thoroughly tested for per-formance. This new application offers afast, convenient and mobile method touse DocuSign from any iPhone.”
ESIGNControl is a DocuSign transac-tion remote control that lets users man-age documents sent for e-signature fromany iPhone. ESIGNControl offers a richfeature set that makes it fast and easy forDocuSign users to: Send a document forsignature straight from your iPhone;view, track and access sent documents;send, revise and resend documents foreSignature; access document signing sta-tus, envelope details, archived docu-ments and history; share graphicalreports that even shows transactiontimes; electronically sign a documentfrom anywhere, anytime; and remotelylog in to the DocuSign Console.For more information, visit www.docusign.comor www.esigncontrol.com.
New income verificationservices from LPS AppliedAnalytics added to theRealEC Exchange
RealEC TechnologiesInc., a provider ofcollaborative net-work solutions to the
mortgage industry, has announced theaddition of new income verificationservices to its RealEC CollaborativePartner Network (CPN), the RealECExchange.
The income verification suite, pro-vided by Lender Processing Services’(LPS) Applied Analytics group, enableslenders to validate a borrower’s identi-ty and verify the accuracy of incomeinformation provided during the appli-cation process. The borrower’s incomeis confirmed directly with the InternalRevenue Service (IRS) by uploading thesigned IRS 4506T form (Request forTranscript of Tax Return) electronicallythrough the RealEC interface. LPSApplied Analytics then securely deliversa report from the IRS. The integrationinto RealEC will continue to advanceefficiencies and delivery timelines with-in the income and identity verificationprocess.
“Lenders are facing all sorts of chal-lenges today with increased regula-tions, growing fraud and changing bestpractices,” said Ted Jadlos, senior man-aging director of LPS Applied Analytics.“We make it easy to verify identity andincome—a necessity before funding aloan. Now, it’s even easier to accessthese solutions via the RealEC platform,the leading collaborative vendor plat-form to access origination services.”
“Income verification services have
new to market continued from page 37
continued on page 42
This is not just for credit services organizations. Anyone whois involved with credit can profit from attending this event.
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E-mail marketing is targeted.Most forms of advertising are based uponthe concept that, if you hit thousands ofpeople with your message, even though itmeans nothing to most of them, a few arelikely to respond. E-mail marketing,though, is based on the idea of sendingthe right message directly to the right peo-
ple based on their prefer-ences, local market condi-tions and other factors. Youcan build one master list,and then segment it by geo-graphic location, maritalstatus, gender, age, income,seasonality, etc. It elimi-nates a lot of the guessworkthat makes other forms ofmarketing so inefficientand ineffective.
E-mail marketing pro-vides data.If you’re using an e-mailmarketing application orservice designed for smallbusiness, you can runreports that show which e-mails or messages worked,as well as which didn’t, soyou can improve uponyour next campaign. You
can even run split tests, sending one offeror message to half your list and a differ-ent one to the other half, so you can get abetter feel for exactly what makes cus-tomers and prospects buy from you.
E-mail marketing allows you to engage.It’s nice to get the immediate reactionfrom a buyer who sees your e-mail justas he or she decides to make an offer ona property. But, your real goal is to builda relationship with a broader base ofprospects so they think of you wheneverit’s time for them to refinance or consid-er mortgage services. E-mail marketingallows you to do that by bringing themcommunity and market news, currentrates, timely tips (such as how to com-pare debt instruments), and more on aregular basis. It’s a great way to engagethem and keep them engaged.
E-mail marketing has a low cost of entry.Most forms of advertising or marketingrequire a big upfront investment beforeyou see any results. That can get expen-sive for a mortgage broker trying tokeep expenses down. E-mail marketinghas very little upfront cost, allowingyou to market effectively without hav-ing to stop your core business work forlong periods to get it done.
E-mail marketing is less intrusive.Unlike a lot of advertising, such as tele-marketing calls, e-mail marketing doesn’tinterrupt a prior activity to deliver a mes-
Mention e-mail marketing to fellowmortgage brokers and you may findthat many are still hesitant to moveaway from their tried and true snailmail methods. Others, however, arerapidly discovering that e-mail market-ing is just about one of the most effec-tive means of generating business.
Want proof? WhenShop.org surveyed retailersfor their “State of RetailingOnline 2009” report, theyfound that e-mail was themost-mentioned successfultactic overall. The AdEffectiveness Survey, com-missioned by Forbes Mediain February/March 2009,placed e-mail marketingsecond only to SEO (searchengine optimization) forgenerating conversions.And, research conducted in2009 by the DirectMarketing Association (DMA)demonstrated that e-mailoutperforms all other formsof direct marketing.
The bigger question, ofcourse, is why? Out of allthe hundreds or eventhousands, of messagesconsumers are exposed to each day,why is e-mail marketing so effective?
There are several reasons, and mort-gage businesses who embrace theseprinciples will quickly find themselveswith more customer relationships.Those buyers are likely to rememberyou as they narrow the field of choicesfor mortgage origination.
E-mail marketing has a broad reach.It’s tough to find anyone who doesn’thave at least one e-mail address thesedays, which means you can reach out toyour entire customer and/or prospectbase. Just be sure to get their permis-sion first by asking if you can add themto your mailing list.
E-mail marketing is proactive.Many mortgage professionals—espe-cially those running a small business—start promoting their services by takingout ads in a phone directory, a realestate guide, a local community news-paper, a billboard or by sending directmail and placing door hangers. Theproblem is your customers andprospects have to stumble across theads in order to see them. E-mail mar-keting goes directly to a place they arealready looking—their e-mail inbox.And unlike paper-based mail or doorhangers, e-mail gives them the oppor-tunity to contact you directly to get aquote or more information by simplyclicking a mouse.
Eight Reasons Why E-mail MarketingWorks for Mortgage Brokers
“And unlike paper-based mail or door
hangers, e-mail givesthem the opportunityto contact you direct-
ly to get a quote ormore information by
simply clicking amouse.”
By Wendy Lowe
sage. Opening e-mail is the activity yourcustomers and prospects are engaged inwhen they see your message. If you’vedone a good job of building that relation-ship, they’ll actually look forward to seeingwhat you have to say.
E-mail marketing works.According to the DMA’s research, e-mailmarketing generated a return on invest-ment of $43.62 for every dollar spent onit in 2009. You’re unlikely to find that kindof ROI (return on investment) out of anyother form of marketing or advertising.That, of course, is the best reason of all tolaunch an e-mail marketing campaign.
Done correctly, e-mail marketingallows you to become (and remain) visi-
ble to your customers and prospectswith highly-targeted messages at aminimal cost … all while deliveringoutstanding, measurable results.
Wendy Lowe is director of product mar-keting for Campaigner, an e-mail market-ing solution that enables organizations tohave personalized one-to-one e-mail dia-logues with their customers, measure howthey respond, and analyze those respons-es. Campaigner is provided by Protus,provider of Software-as-a-Service (SaaS)communication tools for small-to-medi-um businesses (SMB) and enterpriseorganizations, including my1voice virtualphone service and MyFax. She may bereached by e-mail at [email protected] visit www.campaigner.com.
become critical to lenders’ operationsto enable effective underwriting, and toensure that loan quality standards aremet,” said Dan Sogorka, president ofRealEC Technologies. “The addition ofthe LPS suite of income verificationservices to the RealEC platform andbusiness model offers our clients themost efficient method of accessingthese services available in the market-place today.”For more information, visit www.lpsvcs.comor www.realec.com.
New book from NAHBoffers social media tips
Builder Books, the pub-lishing arm of theNational Association ofHome Builders (NAHB)has released a new
resource for builders and residentialconstruction professionals that willteach them how to use social mediatools such as Facebook, Twitter andYouTube, to increase their visibility andimprove their sales results.
Social Media for Home Builders: It’sEasier Than You Think, a new book byCarol M. Flammer, CAPS, CSP, MIRM,demonstrates how builders and devel-opers are effectively using two-waycommunication via the Internet andsocial media outlets to attract con-sumers, follow up on leads and improvecustomer service. This is the only bookthat speaks specifically to the needs ofthe real estate industry, and teacheshome builders how to build a socialmedia presence. The book is now in itssecond print-run and will also be avail-able in electronic format on Kindle.
In the book, Flammer outlines thepower of social media through casestudies and online outlets createdspecifically for the home buildingindustry. The book is designed to helpreaders understand social media andconstruct a strategic plan for using it toattract new homebuyers. Readers learnhow to use social media sites to: Build
a brand, engage new and existing con-sumers, manage online reputation andhow to sell more homes.
“With the recent explosion of socialmedia on the scene, this new book byCarol Flammer is a timely resource,offering those in the building industryan excellent introduction into theworld of social media,” said NAHBChairman Bob Jones. “This guide walksreaders through the different onlineresources, teaching them how to usethese tools to increase the visibility oftheir own businesses.”
Flammer is a public relations andsocial media marketing expert, strate-gist and consultant. With 20 years ofexperience, Carol has established her-self as an expert on real estate and con-struction products public relations andsocial media. Carol is the founder of theonline Atlanta Real Estate Forum, pres-ident of Flammer Relations Inc., andmanaging partner of mRELEVANCE LLC,an Internet marketing, social mediaand public relations firm with offices inAtlanta and Chicago.For more information, visit www.nahb.org.
Equator launches PRO REO
Equator, a providerof software to thedefault servicing
industry has announced the launch ofits new professional real estate-owned(REO) solution. PRO REO encompassesall the power and best practices ofEquator’s enterprise REO application inan affordable, quick and easy to adoptsolution. Equator has long been thestandard for many of the nation’slargest lenders and servicers.
“Now Outsourcers and Servicers canbe up and running in less than a day,”said Chris Saitta, chief executive officerof Equator. “They receive all the bene-fits of our best-practices along with theability to immediately transact withover 665,000 agents and 18,000 ven-dors electronically.”
new to market continued from page 41
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“Atare Agbamu is one of only a handful of people in the reverse mortgage arena
who possesses a commanding understanding of the reverse mortgage industry.
As an originator, he has hands-on experience educating seniors and their advi-
sors. As author of the “Forward on Reverse” column in The Mortgage Press since
2002, Atare Agbamu communicates nationally with the housing finance commu-
nity, bringing the unique insights and experience of an ardent reverse mortgage
expert into a wider business context.
“This book combines Atare’s keen insights and know-how with extensive re-
search to create a first of its kind resource for the reverse mortgage industry. It offers a comprehen-
sive overview of the industry plus detailed information on marketing and originating reverse mortgages.
“Present and future reverse mortgage professionals and senior advisors will profit from
decades of experience skillfully woven into this book. If you plan to succeed in this industry, this
book is the place to start.”
—Sarah F. Hulbert, President, Senior Financial Corporation and former four-term Co-Chairof NRMLA’s Board of Directors
“When I first began reviewing the contents of this book, I became quite jealous ... Atare Agbamu
has set down an impressive amount of information ... And he delivers it in an easy-to-read,
simple-to-understand style that will make this book essential reading for all reverse mortgage
professionals.”
—from the Foreword by Jim Mahoney, Co-Founder and Former Chairman, Financial FreedomSenior Funding Corporation, and former four-term Co-Chair of NRMLA’s Board of Directors
“The stories [Chapter 15: Profiles in Satisfaction] are the best vehicle to increase understanding and
acceptance of reverse mortgages among us laypeople. They are very compelling ...”
—Therese Cain, Executive Director, Minneapolis/St. Paul Chapter of Little Brothers—Friendsof the Elderly
“This book should be required reading for all new loan consultants originating reverse mortgages
and is recommended for experienced ones as well. This book provides excellent insight and infor-
mation on preparing ahead to provide the service our seniors deserve, to ensure a smooth loan
process and shorten the time to closing. Most of the problems caused in the processing and clos-
ing of reverse mortgages come from inadequate preparation.”
—Deanne Opstad, AVP, Senior Underwriter, Generation Mortgage Company
Think Reverse!Table of Contents
Part I:
The new pillar of retirement security
Part II:
Marketing reverse mortgages: It’s all about education
Part III:
Originating reverse mortgages
Part IV:
Enhancing freedom: The essence of reverse mortgages
Part V:
A new frontier in mortgage lending
Foreclosure moratoriums have liftedand the REO industry is preparing forincreased volumes. “Many of the Sellersadopting PRO REO are converting fromexisting systems to gain the efficiency andscalability they’ll need to handle postmoratorium REO volumes,” said Saitta.Sellers also gain the potential to establishMidsourcer relationships with the largelenders and servicers using Equator.
More than 58 servicers nationwide,including seven of the top 10, rely dailyon Equator’s platform to automate theirvarious loss mitigation strategies. Bylaunching REO PRO, Equator has madedefinite in roads into the middle market. For more information, visit www.equator.com.
BrokerPriceOpinion.comlaunches next generationplatform
BrokerPriceOpinion.comhas announced thelaunch of their “NextGeneration BPO (V3)”
platform, capable of evaluating dataquickly through the use of progressivetechnology and current local marketinformation.
For nearly two decades,BrokerPriceOpinion.com has deliveredcritical valuation data with industry-leading broker price opinions (BPOs) andappraisals. BrokerPriceOpinion.com isfocused on supporting client decisionsby providing accurate and reliable infor-mation. The (V3) platform represents ashift in philosophy behind informationsystems of its type, focusing on dataanalysis, rather than data capture anddelivery.
“At BrokerPriceOpinion.com, using thelatest technology means designing, build-ing, growing, and maintaining a state ofthe art valuation platform,” said Walt Coats,president of BrokerPriceOpinion.com. “Oursoftware automatically evaluates andscores all comp sale and listing data provid-ed by the broker. It was designed to analyzethe data for accuracy and/or fraud, and toprovide immediate feedback for brokersand analysts.”
Phase II (V3) is expected to launch inthe second quarter of 2010. Scheduledenhancements developed in house byBrokerPriceOpinion.com will accesslocal market data and incorporate itinto both new and existing products.Clients will be able to gain valuableinsight into local markets and makebetter, more informed business deci-sions, adding to increased profitability.For more information, visitwww.BrokerPriceOpinion.com.
Your turnNational Mortgage Professional Magazineinvites you to submit any informationpromoting new “niche” loan programs,new products or any other announce-ment related to the introduction of anew program, to the attention of:
New to Market columnPhone #: (516) 409-5555
E-mail:[email protected]
Note: Submissions sent via e-mail arepreferred. The deadline for submissionsis the 1st of the month prior to the tar-get issue.
Would you like to lend a hand to the Revolution? If so, please email us at [email protected] or volunteer online.
Just The Facts:Where: Hyatt Regency SFO – San Franciso, CA
When: May 6-7, 2010
Price: $199 (special 10% discount for National Mortgage Professional Magazine readers using code NMP)
Learn more and register at MRev.org (remember, save 10% with discount code NMP)
Come network and learn at Mortgage Revolution in San Franciscoon Thursday, May 6 and Friday, May 7, 2010.
We're featuring a first rate education from over 20 speakers on a variety of hot topics - all in a "spam-free" environment.
The kicker - we're donating all profits to charity. Our goal for Mortgage Revolution San Francisco... $70,000.
This is an event being hosted for mortgage professionals by mortgage professionals. We feel that now, more than ever, we need to come together as an industry.
Thursday-Sunday, May 13-16National Association of Professional
Mortgage Women’s 46th NationalEducation Conference & Annual Meeting
Marriott South Austin4415 South IH-35
Austin, TexasFor more information, call (800) 827-
3034 or visit www.napmw.org.
Sunday-Wednesday, May 23-26Mortgage Bankers Association
Commercial/Multifamily Servicing andTechnology Conference 2010
Sheraton New York Hotel & Towers811 7th AvenueNew York, N.Y.
For more information, call (202) 557-2790 or visit
www.mortgagebankers.org.
Sunday-Wednesday, May 23-26Mortgage Bankers Association National
Secondary Market Conference & Expo 2010
Hilton New York1335 Avenue of the Americas
New York, N.Y.For more information, call
(202) 557-2790 or visit www.mortgagebankers.org.
JUNE 2010Monday-Wednesday, June 14-16CRE Finance Council 2010 Annual
ConventionThe Waldorf-Astoria
301 Park Avenue (50th Street)New York, N.Y.
For more information, call (212) 509-1844 or visit
www.cmsaglobal.org.
Thursday-Friday, June 24-25National Association of MortgageBrokers 2010 Mid-Year Meeting
Phoenix Airport Marriott1101 North 44th Street
Phoenix, Ariz.For more information,
call (703) 342-5900 or visitwww.namb.org.
JULY 2010Wednesday-Saturday, July 7-10Florida Association of MortgageProfessionals 50th Anniversary
Annual Convention & Trade Show“From FAMB to FAMP …
50 Golden Years”Rosen Shingle Creek
9939 Universal BoulevardOrlando
For more information, call (850) 942-6411 or visit www.famb.org.
AUGUST 2010Wednesday-Friday, August 18-20California Association of MortgageBrokers 2010 Annual Convention &
Grand ExpositionHyatt Regency Long Beach
200 South Pine AvenueLong Beach Convention Center
300 East Ocean BoulevardLong Beach, Calif.
For more information, call (916) 448-8236 or visit www.cambweb.org.
SEPTEMBER 2010Thursday, September 16
Iowa Association of Mortgage Brokers2010 Annual Convention
White Oak Vineyards15065 Northeast White Oak
DriveCambridge, IowaFor more information, call
(515) 210-4675 or visit www.iowamortgagebrokers.org.
Monday-Tuesday, September 21-22Illinois Association of Mortgage
Professionals 21st Annual Fall Conference
Location to be determinedFor more information,
call (630) 916-7720 or visitwww.iamp.biz.
OCTOBER 2010Thursday-Friday, October 14-15Kentucky Association of Mortgage
Professionals 2010 Annual ConventionLocation to be determined
For more information, call (270) 929-2836 or visit
www.kyamp.net.
Tuesday-Wednesday, October 19-20
Utah Association of Mortgage Brokers2010 Annual Expo
Location to be determinedFor more information,
call (801) 787-6611 or visitwww.uamb.org.
Sunday-Wednesday, October 24-27
Mortgage Bankers Association 97thAnnual Convention & Expo
Atlanta Georgia Congress Center285 Andrew Young International
Boulevard NWAtlanta
For more information, call (800) 793-6222 or
visit www.mortgagebankers.org.
APRIL 2011Sunday-Wednesday, April 3-62011 National Association of
Mortgage Brokers 2011 Legislative &Regulatory Conference
Hyatt Regency Washington on Capitol Hill
400 New Jersey Avenue NWWashington, D.C.
For more information, call (703) 342-5900 or visit
www.namb.org.
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APRIL 2010Sunday-Monday, April 18-19
North Carolina Association of MortgageProfessionals 2010 Annual Conference
The Pinehurst Resort & Spa80 Carolina Vista Drive
Village of Pinehurst, N.C.For more information, call
(919) 783-0767 or visit www.ncmortgageprofessionals.org.
Sunday-Wednesday, April 25-28Mortgage Bankers Association National
Technology in Mortgage BankingConference & Expo
Hyatt Regency Chicago151 East Wackler Drive • Chicago
For more information, call (800) 793-6222 or visit
www.mortgagebankers.org.
MAY 2010Monday-Thursday, May 3-6
Tennessee Association of MortgageProfessionals 2010 Convention & Trade
Show, “Tried, Tested & True”The Hotel Preston733 Briley Parkway
NashvilleFor more information, call (615) 302-
0001 or visit www.tnamp.com.
Wednesday, May 12Florida Association of Mortgage
Professionals 25th Annual Trade Show“Turning Up the Heat”
Don Shula’s Hotel & Golf Club6842 Main StreetMiami Lakes, Fla.
For more information, call (305) 392-5414 or visit www.fambmiami.com.
To submit your entry for inclusion in the National Mortgage ProfessionalCalendar of Events, please e-mail the details of your event, along with
contact information, to [email protected].
COMPANY WEB SITE PAGEAbacus Mortgage Training and Education .......... www.acethesafe.com ......................................6 & 17ACC Mortgage .................................................. www.weapproveloans.com ....................................23Calyx Software ................................................ www.calyxsoftware.com ........................................16Comergence Compliance Monitoring, LLC .......... www.comergencetrustedmember.com ....................19Elliott and Company Appraisers, Inc................... www.elliottco.com ..............................................32Emigrant Mortgage Company ............................ www.emigrantmortgage.com ................................32Entitle Direct Group.......................................... www.entitledirect.com ..................Inside Front CoverFirst Source Capital Mortgage, Inc. .................... www.fscmortgage.com ..........................................16Flagstar Wholesale Lending .............................. www.paperless.flagstar.com ......................Back CoverFranklin First Financial .................................... www.franklinfirstfinancial.com ............................33Freedom Mortgage .......................................... www.fmbranch.com ......................Inside Back CoverFrost Mortgage Banking Group .......................... [email protected] ..............................................25Gateway Mortgage Group, LLC .......................... www.gatewayloan.com ........................................30Guaranteed Home Mortgage.............................. www.joinguaranteed.com ....................................31HTDI Financial ................................................ www.htdifinancial.com ........................................26Mortgage Concepts .......................................... www.mortgageconceptsonline.com ........................13Mortgage Revolution ........................................ www.mrev.org ....................................................43MortgageProShop.com...................................... www.mortgageproshop.com ..................................43NAMB.............................................................. www.namb.org ......................................NJ3, 22 & 30NAPMW .......................................................... www.napmw.org ..................................................35Packet8 .......................................................... www.businesssurvivalcenter.com/8x8 ..................NJ1Platinum Credit Services, Inc............................. www.platinumcreditservices.com ............5, 7, 9 & 11Presidents First Mortgage Bankers .................... www.presidentsfirst.com ......................................21Quality Mortgage Services ................................ www.qcmortgage.com ..................................27 & 32REMN (Real Estate Mortgage Network)................ www.remnwholesale.com ............................NJ4 & 29Ridgewood Savings Bank .................................. www.ridgewoodbank.com ....................................20Titan Lists ....................................................................................................................................15United Northern Mortgage Bankers Ltd. ............ www.unitednorthern.jobs ............................ 14 & 37Wells Fargo Home Mortgage.............................. www.brokerfirst.com ............................................24Xetus Mortgage Corporation.............................. www.xetus.com ....................................................13
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