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www.NationalMortgageProfessional.com O
COLORADO MORTGAGE PROFESSIONAL MAGAZINE
O SEPTEMBER 2009
5
PRESORTED STANDARD
U.S. POSTAGE
PAID
NMP MEDIA CORP
11431
46
SEPTEMBER 2009 O
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
O www.NationalMortgageProfessional.com
Mortgage PROFESSIONAL
C O L O R A D O
MAGAZINE
Your source for the latest on originations, settlement, and servicing
Colorado Association of Mortgage Brokers State Office
7010 Broadway, Suite 320 O Denver, CO 80221
Phone: (303) 991-2240 O Fax: (303) 991-2241
E-mail: info@camb.org O Web site: www.camb.org
Rod Cameron, CCMB
Kay Cleland, CMC, CRMS
Tiffany Hughes
Ruth Lee
Douglas L. Braden, CCMB
CAMB 2009 OFFICERS
Phone #
President
(303) 997-7117
Vice President
(720) 670-0124
Treasurer
(720) 873-8848
Secretary
(303) 942-2004
Immediate Past President
(970) 226-2992
E-mail
president09@camb.org
vicepresident09@camb.org
treasurer09@camb.org
secretary09@camb.org
past-president@camb.org
Shelley Ervin
Kate Gardner
Richard Kim
CAMB 2009 DIRECTORS
(303) 722-7345
(720) 565-4065
(720) 748-1518
events@camb.org
kate@kgardnerfinancial.com
richardkcmg1@cs.com
Douglas L. Braden, CCMB
Ronnie Ray
Jenny Gilbreath
William F. Kidwell Jr., GMA
Dale Davis
CAMB 2009 COMMITTEE CHAIRS
Certification/Education
(720) 670-0124
Communications/Public Relations
(970) 226-2992
Education
(303) 733-5950
Events
(303) 801-0530
Government Affairs
(303) 674-1200
Membership
(720) 327-1440
education@camb.org
pr@camb.org
education@camb.org
gr@camb.org
membership@camb.org
CAMB
For information on all CAMB events, call the CAMB state office
at (303) 991-2240 or visit www.camb.org.
• Daily updated mortgage industry news
• Industry blogs
• Write your own blog
• Find loan programs
• Discover local and national events
• Get access to video
O SEPTEMBER 2009
DECEMBER 2009
Thursday, September 10
CAMB Annual Meeting & Year-End Party
The Downtown Aquarium
700 Water Street
Denver
3:00 p.m.-6:00 p.m.
For more information, visit www.mortgagebankers.org.
NOVEMBER 2009
Thursday, November 12
CAMB Breakfast Meeting
Sponsored by HUD, Marc Friedland
Topic: New RESPA rules and the GFE
Garcia’s Mexican Restaurant
Denver
$15 in advance/$20 at the door
9:00 a.m.-Noon
The delinquency rate for mortgage loans on residential properties in Colorado was
at six percent at the end of the second quarter of 2009, an increase of 52 basis
points, according to the Mortgage Bankers Association (MBA). The delinquency
rate excludes loans in the process of foreclosure. The percentage of loans in
Colorado on which foreclosure was started during the quarter rose six basis points
to 0.99 percent, while the percentage of loans in the foreclosure process at the
end of the quarter rose 25 basis points to 2.67 percent.
These rates are not seasonally-adjusted. Mortgage delinquency rates normally
drop in the first quarter of the year and begin to climb again in the second quarter due to a variety of seasonal factors. The delinquency rate for prime adjustablerate mortgage (ARM) loans increased 70 basis points to 6.91 percent and the rate
for prime fixed-rate mortgage loans increased 41 basis points to 2.89 percent. The
delinquency rate for the sub-prime ARM loans increased 74 basis points to 18.59
percent, while the rate for sub-prime fixed-rate loans increased 142 basis points
to 16.71 percent.
The delinquency rates for FHA and VA loans were 11.08 percent and 6.73 percent, respectively—up 58 basis points for FHA loans and up 36 basis points for VA
loans. The foreclosure start rate for prime ARM loans in Colorado increased 11
basis points to 1.47 percent, while the rate for prime fixed-rate loans increased
seven basis points to 0.47 percent. The foreclosure start rate for sub-prime ARM
loans increased 26 basis points to 4.3 percent, while the rate for sub-prime fixedrate loans increased 18 basis points to 2.47 percent.
The percentage of prime ARM loans in foreclosure increased 77 basis points to
4.74 percent and increased 17 basis points to 1.09 percent for prime fixed-rate
loans. The rate for sub-prime ARM loans increased 87 basis points to 12.91 percent, while the rate for sub-prime fixed-rate loans increased 50 basis points to 5.8
percent. The percentage of FHA loans in foreclosure increased 10 basis points to
3.22 percent. The percentage of VA loans in foreclosure remained unchanged at
2.4 percent.
Among the 50 states and the District of Columbia, Colorado ranked 41st in
delinquencies and 22nd in foreclosures started. Mississippi ranked first in delinquencies with a rate of 13.04 percent and Nevada ranked first in foreclosure starts
with a rate of 3.70 percent. Colorado has 21 percent non-prime borrowers (FHA
and sub-prime) versus a national average of 19 percent.
On a national level, the delinquency rate for mortgage loans on one- to fourunit residential properties was 8.86 percent on a non-seasonally-adjusted basis,
up 64 basis points from 8.22 percent in the first quarter of 2009. The seasonallyadjusted delinquency rate on residential properties was 9.24 percent in the first
quarter, up 12 basis points from last quarter’s seasonally-adjusted rate. The nonseasonally-adjusted percentage of loans in which foreclosure was started during
the quarter fell one basis point to 1.36 percent, while the non-seasonally-adjusted percentage of loans in the foreclosure process at the end of the quarter rose 45
basis points to 4.3 percent.
OCTOBER 2009
Thursday, October 8
CAMB Breakfast Meeting
Topic: To be determined
Garcia’s Mexican Restaurant
Denver
$15 in advance/$20 at the door
9:00 a.m.-11:00 p.m.
Mortgage Delinquencies in
Colorado Rise in MBA National
Delinquency Survey
CO 1
Congratulations to
CAMB’s NAMB Designees
CAMB’s
Education Providers
The Colorado Association of Mortgage Brokers is partnering with the following
companies to offer a discount to CAMB members for online and live education.
Make sure you tell them you are a CAMB member when you register.
CAMB Affiliate Member Providers
Congratulations to the following Colorado Association of
Mortgage Brokers members for attaining their National
Association of Mortgage Brokers professional designation.
James Bailey, GMA
Kelley Hamilton, CRMS
Bill Kidwell, GMA
Philip Magistro, GMA
Patricia L. Norton, CMC
Rick Phillips, CMC
Ronnie Ray, CRMS
Gary Salter, CMC
Michael Thomas, CMC
Michelle Tuttle, CRMS
www.americanrealestatecollege.com
www.praedo.com
www.kaplanprofessionalschools.com
www.mortgageknowledge.com
www.trainingpro.com
www.vaned.com
For more information on NAMB’s professional designation program,
visit www.namb.org and click on the “Certification” tab.
State education requirement exemption
SEPTEMBER 2009 O
Please note, that in order to be exempt from the Mortgage 101 and Trade Practices
portion of the coursework and the General Portion of the examination you must
meet all five of the following criteria:
CO 2
2009 Editorial Calendar
For more information on editorial contributions, please call (888) 409-9770 and
press "6" for the Editorial Department or e-mail editorial@nmpmediacorp.com.
Issue
Focus
Special Features
July 2009
Wholesale & Correspondent
Update
Who’s Left in Wholesale?
August 2009
Compliance Technology
Compliance Tools Directory
O Currently maintain a mortgage broker license.
O A member of a mortgage broker association approved for exemption by the
Division of Real Estate.
O Maintain a mortgage broker association designation (CMC, CRMS, CCMB, see
below for info) that is current and in good standing.
O Provide the letter of certification to the education course provider prior to
completing coursework.
O Provide the letter of certification to PSI prior to taking the exam.
Designations
September 2009
The Future of Mortgage
Banking
October 2009
It’s All About the Marketing!
Lead Provider Roundup
November 2009
Growth Strategies for 2010
The 40 Under 40: The 40
Most Influential Mortgage
Professionals Under 40
December 2009
Building Relationships
*Please note that we also distribute as several other Mortgage Banker and Mortgage Broker events throughout the year
For advertising opportunities in these Focus Issues or Special Features, please call
(888) 409-9770 and press "4" for the Advertising Department of
e-mail advertise@nmpmediacorp.com.
CAMB has partnered with the National Association of Mortgage Brokers to bring
quality education to all regions of the state. Currently, there are four different designations available via NAMB and CAMB.
O
O
O
O
General Mortgage Associate (GMA)
Certified Mortgage Consultant (CMC)
Certified Residential Mortgage Specialist (CRMS)
Certified Colorado Mortgage Broker (CCMB): This designation can be supported
by taking eight continuing education credits per year. Credits are accepted from
the following programs: NAMB, CAMB CE Classes, Training Pro, American Real
Estate College, Mortgage Training Institute (MTI), and some other industry association programs (please check with the CAMB office for verification).
Additional training:
For those individuals looking to break into the mortgage industry, several colleges
offer formal education:
O TrainingPro......................................Continuing Education for Mortgage Brokers
O American Real Estate College ........Continuing Education for Real Estate Brokers
O Mortgage Training Institute ............Continuing Education for Mortgage Brokers
For more information, contact the CAMB office at (303) 991-2240, e-mail memberservices@camb.org or visit www.camb.org.
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3033 South Parker Rd.
Ste. 410
Aurora, CO 80014
Phone: 303.209.0310
Fax: 303.632.2695
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Ste. 50
Littleton, CO 80123
Phone: 303.674.7500
Fax: 303.484.6193
CONIFER
26267 Conifer Rd., Ste. 205
Conifer, CO 80433
Phone: 303.816.6464
Fax: 303.484.6193
CASTLE ROCK
7505 Village Square Dr.
Ste. 103
Castle Rock, CO 80108
Phone: 303.209.0312
Fax: 303.648.4238
TRINIDAD
231 E. Main St.
Trinidad, CO 81082
Phone: 719.680.9963
Fax: 719.466.9031
O SEPTEMBER 2009
We look forward to working with you!
Phone: (303) 837-9171 • Fax: (303) 265-9009 • www.fitallc.com
HEADQUARTERS
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• A COMPLETE COMITTMENT TO SERVICE AND YOUR YOUR SATISFACTION
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CO 3
In November 2007, the federal banking agencies, the NCUA, and the FTC issued the final rules and guidelines regarding the
Identity Theft Red Flags Rules and Address Discrepancies, under the Fair and Accurate Credit Transactions Act of 2003
(FACTA), implementing Sections 114 and 315 of FACTA, that amended the Fair Credit Reporting Act (FCRA).
The Red Flags Rules and Guidelines implement Section 114 of FACTA, which applies to “financial institutions” and “creditors” (including
all Mortgage Brokers and Mortgage Bankers), require the implementation of methodologies to detect, prevent and mitigate identity theft
in connection with covered accounts and to establish policies and procedures to assess the validity of a change of address.
The Red Flags Rules became effective January 1, 2008, with full compliance by the enforcement deadline of November 1, 2009. This is
your last chance to comply. There will be no more extensions of the deadline. You must be ready by November 1, 2009.
SEPTEMBER 2009 O
On Thursday, Septmber 24 and again on Thursday, October 15 (both dates at 12:00 p.m. EDT), please be our
guest to hear featured National Mortgage Professional Magazine author, Jonathan Foxx, present a 60 minute
webinar that will give you a comprehensive look at what you need to do to be prepared for Red Flags
enforcement. This is a FREE webinar for National Mortgage Professional Magazine readers.
CO 4
In this 60 minute webinar, you will learn:
Jonathan Foxx
Jonathan Foxx, former
chief compliance officer for
two of the country’s top
publicly-traded residential
mortgage loan originators,
is the President and
Managing Director of
Lenders Compliance
Group, a national and wellrespected mortgage risk
management firm devoted
to providing regulatory
compliance services,
guidance, and counsel to
the mortgage industry.
What are the REAL deadlines that I need to be ready for?
What are the applicable statutes and definitions?
What are the components of an Identity Theft Prevention Program (ITPP)?
How do I assess my risk?
How do I administer the program?
What are the risk factors and the indicators of identity theft?
The 26 Red Flag components and what applies to you!
What is the structure and contents of an Identity Theft Prevention Program?
How to implement your ITPP?
What should be management’s response to suspicious activity and violations?
Why it is important to maintain and update your policy?
What are the penalties for violations of the ITPP?
Jonathan will also be available for a brief question and answer session.
For more information visit NMPMag.com/FREERedFlagsWebinar
The NAMB Perspective
4
FHA Insider: FHA and the New Condo Approval Process:
Will Lenders Take Advantage of This Change? By Jeff Mifsud
6
Partnering and Power Networking: The Double “P” Principle
6
By Laura Lynn Burke
Forward on Reverse: HECM at 20: Leaders and Pioneers
in U.S. Reverse Mortgage Series … A Visionary
Non-Commercial Entrepreneur By Atare E. Agbamu, CRMS
7
Value Nation: Mortgage Professionals Living in Harmony
With the HVCC By Charlie W. Elliott Jr., MAI, SRA
8
COM
MER
CIAL
REVE
R
MOR SE
TGA
GES
RESI
DEN
TIAL
TECH
NOL
OGY
TREN
DS
MAIN STREET
62+
Viva Las Vegas: A Message From NAMB/WEST
2009 Committee Chair Joe Camarena
14
FTC’s New Leadership Making Aggressive Moves in
Consumer Protection By Terry W. Clemans
17
NMP Mortgage Professional of the Month: Thomas R. Sirico,
Executive Business Director of mortgageNOW inc.
18
The Secondary Market Overview: From Bonds to Production
By Dave Hershman
19
MAIN STREET
Regulatory Compliance Outlook: September 2009 … New
Category of Sub-Prime Mortgage Loans By Jonathan Foxx
20
MAIN STREET
The Birth of an Agency By Jonathan Foxx
24
NMP’s Market Barometer By David Beadle
28
Ask Brian: Are You Mentally “Melted Down?” By Brian Sacks
30
Ask Tommy: Your QC Expert By Tommy A. Duncan
32
Trend Spotter: Is This Time Different? By Gibran Nicholas
33
A View From the “C” Suite: What Lies Ahead for Mortgage
Lending? By David Lykken
34
The Future of Mortgage Banking By Tommy A. Duncan
35
Online Lending for the New Decade By J.P. Kelly
36
The Future of the Mortgage Industry: A discussion with the
executive team at Residential Finance Corporation
38
Maximize Your Profits: Adopt Orphan Customers
42
MAIN STREET
MAIN STREET
O SEPTEMBER 2009
MAIN STREET
MAIN STREET
By Gary Opper
MAR
KE
SALE TING/
S
SETT
LE
SERV MENT
ICES
ORIG
INAT
IONS
SECO
NDA
RY
SERV
ICIN
G
COM
PLIA
NCE
PAG
E#
EXPLORER
NMP
1
September 2009
Volume 1 • Number 5
N A T I O N A L
MAGAZINE
1220 Wantagh Avenue • Wantagh, NY 11793-2202
Phone: (516) 409-5555 / (888) 409-9770
Fax: (516) 409-4600
Web site: www.nationalmortgageprofessional.com
STAFF
Eric C. Peck
Editor-in-Chief
(516) 409-5555, ext. 312
ericp@nmpmediacorp.com
Andrew T. Berman
Executive Vice President
(516) 409-5555, ext. 333
andrew@nmpmediacorp.com
Domenica Trafficanda
Art Director
domenicat@nmpmediacorp.com
Karen Krizman
Senior National Account Executive
(516) 409-5555, ext. 326
karenk@nmpmediacorp.com
ARTICLE SUBMISSIONS/
PRESS RELEASES
To submit any material, including articles and press
releases, please contact Editor-in-Chief Eric C. Peck at
(516) 409-5555, ext. 312 or e-mail ericp@nmpmediacorp.com. The deadline for submissions is the first of the
month prior to the target issue.
SUBSCRIPTIONS
To receive subscription information, please contact
Office Manager Beatrice Marcus at (516) 409-5555, ext.
301, e-mail beam@nmpmediacorp.com or visit
www.nationalmortgageprofessionalmagazine.com. Any
subscription changes may be made to the attention of
Beatrice Marcus via fax to (516) 409-4600 or e-mail
beam@nmpmediacorp.com.
Statements of fact and opinion in National Mortgage
Professional Magazine are the responsibility of the
authors alone and do not imply an opinion on the part of
NMP Media Corp. National Mortgage Professional
Magazine reserves the right to edit, reject and/or postpone the publication of any articles, information or data.
MO
RTGAGE PRO
NATIONAL
NMP
SSIONAL
2
ADVERTISING
To receive any information regarding advertising rates,
deadlines and requirements, please contact Senior
National Account Executive Karen Krizman at (516) 4095555, ext. 326 or e-mail karenk@nmpmediacorp.com.
FE
SEPTEMBER 2009 O
Beatrice Marcus
Office Manager
(516) 409-5555, ext. 301
beam@nmpmediacorp.com
MAG
AZIN
A Message From NMP Media Corp.
Executive Vice President Andrew T. Berman
The future of mortgage banking
This month, we take are taking a look at the future of mortgage banking. I really wish I had a crystal ball
to read into the future of the mortgage banking industry; however, there are certain factors you can
almost guarantee will impact this industry. These factors include such things as an increase online lending. J.P. Kelly’s article “Online Lending for the New Decade” reveals some interesting facts on the world
on Internet lending, and J.P. makes a good case for why you should be spending company resources on
building your online presence (and I am not talking about the “virtual brochures” that we all had in
2001). We also hope that the landscape of warehouse lending improves. David Lykken’s latest installment
in this “A View From the C-Suite” series tackles the topic of “What Lies Ahead for Mortgage Lending?”
David also covers whether it’s even a good time to get out of the industry and how the industry is facing
extreme irrational regulation. Tommy A. Duncan also contributed a great piece looking toward the future of the industry with
his article, “The Future of Mortgage Banking.” As someone who works with some of the industry’s top mortgage firms, Tommy
reveals his perspective on how to use technology to enhance customer service and deal with current and future regulations.
Lastly, you will find some interesting point of views from executives of Residential Financial Corporation as they take part in a
roundtable discussion as the dissect many aspects of the future of the mortgage banking industry.
The NAMB Perspective
Be sure to check out this month’s “The NAMB Perspective” feature. In it, you will find informative articles on how certification
can positively impact your business and increase your bottom line, and update on the Red Flags Rules that go into effect on
Nov. 1, and the use of a Twitter power tool that is EASY to use (yes, even for those who hardly know why Twitter even exists).
Viva Las Vegas!
NAMB/WEST 2009 Committee Chair Joe Camarena shares with our readers why this year’s NAMB/WEST at the MGM Grand
could be the most important industry conference you have even been a part of. From powerful sessions on social networking, a full seminar on video marketing, an economic update by Stewart Information Services’ Ted Jones, plus various networking events and an exhibit hall, so you should be sure that you book your room by Tuesday, Nov. 10 to take advantage
of the deeply discounted NAMB group rates. NAMB has added some great content to the event this year, and in the process,
has made the cost to attend much more affordable, that it’s a no-brainer to optimize this quick getaway to Vegas.
Mortgage Professional of the Month
This month, we selected Thomas R. Sirico, Executive Business Director of mortgageNOW inc. as the NMP Mortgage
Professional of the Month. Tom discusses the tools and tactics that keep him in business, from how his firm is dealing
with the Home Valuation Code of Conduct (HVCC), to what it takes to be successful in this marketplace.
And in the world of valuation ...
Charlie W. Elliott shares with our readers how some mortgage professionals having been “Living in Harmony With the
HVCC” in this month’s Value Nation column. While we are on the subject of appraisals, this month’s “Ask Tommy: Your
QC Expert” By Tommy A. Duncan reviews some powerful uses of automated valuation models (AVMs).
Getting more loans!
Be sure to check out Laura Lynn Burke’s “Partnering and Power Networking: The Double ‘P’ Principle.” Laura shares
lots of back-to-basics sales tips, plus some new ideas that can be helpful to any originator. You can find more back-tobasics in Gary Opper’s “Maximize “our Profits: Adopt Orphan Customers.” If you just think it’s too tough out there to
generate loans, then this month’s “Ask Brian” column from Brian Sacks is required reading.
The future of mortgage banking certainly has no shortage of regulation
National Credit Reporting Association (NCRA) Executive Director Terry W. Clemans talks about the Consumer Financial
Protection Agency (CFPA) in his article, “FTC’s New Leadership Making Aggressive Moves in Consumer Protection.”
Jonathan Foxx provides further detailed CFPA coverage with an item-by-item breakdown in his piece, “The Birth of an
Agency.” Mr. Foxx also authored this month’s “Regulatory Compliance Outlook” on “New Category of Sub-Prime
Mortgage Loans” as created by revisions to Regulation Z.
A new series on reverse mortgages
I just recently learned from “Forward on Reverse” author, Atare E. Agbamu, CRMS, that this year, the Home Equity
Conversation Mortgage (HECM) turns 20! As a tribute to HECM, Atare is launching his new “HECM at 20: Leaders and
Pioneers in the U.S. Reverse Mortgage Industry Series.” In his first installment, Atare interviews the father of the HECM
program and reverse mortgages, Ken Scholen.
Using FHA on condos?
In this month’s “FHA Insider,” Jeff Mifsud reviews “FHA and the New Condo Approval Process: Will Lenders Take
Advantage of This Change?” Jeff provides a detailed overview of the 14 things you need to know about these changes
through Mortgagee Letter 09-19.
The future of home pricing to rise?
Gibran Nicholas, in this month’s “Trend Spotter: Is This Time Different?” column, provides you with four powerful arguments why housing prices should be headed up over the next few years. Was is the “Great Housing Bust” or the “Great
Housing Boom?” Gibran dissects the factors that impact the housing market and just where these factors are heading.
I thank you again for taking the time to review the latest copy of National Mortgage Professional Magazine. Our print
publication, in addition to the strength of our Web site, NationalMortgageProfessional.com, strives to bring you, the
mortgage professional, the latest in industry news and trends. The sea known as the mortgage industry has become a
tough one to navigate as of late, as we must sail through an up-and-down market, a struggling economy and a laundry list of regulatory changes and federal proposals designed to “fix” the economy. Let us serve as your guide through
these seas, as we head into the latter part of 2009 and close out the first decade of the 21st Century.
Sincerely,
E
National Mortgage Professional Magazine is
published monthly by NMP Media Corp.
Copyright © 2009 NMP Media Corp.
Andrew T. Berman, Executive Vice President
NMP Media Corp.
The National Association of
Mortgage Brokers
National Association of Professional
Mortgage Women
7900 Westpark Drive, Suite T-309 O McLean, VA 22102
Phone: (703) 342-5900 O Fax: (703) 342-5905
Web site: www.namb.org
P.O. Box 140218 O Irving, TX 75014-0218
Phone: (800) 827-3034 O Fax: (469) 524-5121
Web site: www.napmw.org
NAMB Board of Directors
Officers
President—Jim Pair, CMC
Mortgage Associates Corpus Christi
6262 Weber Road, Suite 208 O Corpus Christi, TX 78413
(361) 853-9987 O jimpair@namb.org
President-Elect—William Howe, CMC, CRMS
Howe Mortgage Corporation
9414 E. San Salvador Drive, #236 O Scottsdale, AZ 85258
(602) 200-8100 O billhowe@namb.org
Vice President—Michael D’Alonzo, CMC
Creative Mortgage Group
1126 Horsham Road, Suite D O Maple Glen, PA 19002
(215) 657-9600 O michaeldalonzo@namb.org
Secretary—Penny Fagan, CRMS
P. Fagan Mortgage Inc.
222 East Moulton Street O Decatur, AL 35601
(256) 355-5505 O pennyfagan@namb.org
Treasurer—Don Frommeyer, CRMS
Amtrust Mortgage Funding Inc.
200 Medical Drive, Suite D O Carmel, IN 46032
(317) 575-4355 O donfrommeyer@namb.org
Immediate Past President—Marc S. Savitt, CRMS
The Mortgage Center
115 Aikens Center, Suite 20-B O Martinsburg, WV25401
(304) 267-9040 O marcsavitt@namb.org
Directors
Donald E. Fader, CRMS
SMC Home Finance
P.O. Box 1376 O Kinston, NC 28503-1376
(252) 523-5800 O donfader@namb.org
Denise Leonard
Massachusetts Mortgage Association
92 High Street, Unit T-41C O Medford, MA 02155
(781) 393-9400 O deniseleonard@namb.org
Walt Scott
Excalibur Financial Inc.
175 Strafford Avenue, Suite 1 O Wayne, Pa. 19087
(215) 669-3273 O waltscott@namb.org
Senior Vice President
Sharon Patrick, MML, CMI
(386) 985-1620
howell@cfl.rr.com
Vice President/Northwestern Region
Jill M. Kinsman
(206) 344-7827
jill.kinsman@usbank.com
Vice President/Western Region
Tim Courtney
(760) 792-5620
desertranchrealty@hotmail.com
Vice President/Southeastern Region
Jessica Edmonston
(919) 414-3028
jedmon3601@yahoo.com
Secretary
Laurie Abisher, GML, CMI
(661) 283-1262
lauriea@gemcorp.com
Treasurer
Kay Talley, MML
(919) 846-4294
kay.talley@genworth.com
Parliamentarian
Hulene Bridgman-Works
(972) 494-2788
hulene137@yahoo.com
Vice President/Central Region
Candace Smith, CMI
(512) 329-9040
csmith@wrstarkey.com
National Credit Reporting Association Inc.
125 East Lake Street, Suite 200 O Bloomingdale, IL 60108
Phone: (630) 539-1525 O Fax: (630) 539-1526
Web site: www.ncrainc.org
Board of Directors
President—Judy Ryan
(800) 929-3400, ext. 201
jryan@kroll.com
Vice President—Marty Flynn
(925) 831-3520, ext. 224
marty@ccireports.com
Treasurer—Daphne Large
(901) 259-5105
daphnel@datafacts.com
Ex-Officio—Nancy Fedich
(908) 813-8555, ext. 3010
nancy@cisinfo.net
Director—Dave Miller
(317) 573-0667
davidmiller@landam.com
Director—Donald J. Unger
(303) 670-7993, ext. 222
don@advcredit.com
Director—Tom Swider
(856) 787-9005, ext. 1201
tswider@creditlenders.com
Director—Donovan Williams
(714) 638-2855
donw@Informativeresearch.com
NCRA Staff
Director—Thomas Conwell
(248) 313-1000
tconwell@credittechnologies.com
Executive Director—Terry Clemans
(630) 539-1525
tclemans@ncrainc.org
Director—Don Goldammer
(661) 398-4700
dgoldammer@cacreditinfo.com
Office Manager/Membership
Services—Jan Gerber
(630) 539-1525
jgerber@ncrainc.org
Director—Sanford (Sandy) Lubin
(805) 481-3155
slubin@cbslo.com
Legal Counsel—James Sutton
(972) 680-2665
james.sutton@prodigy.net
O SEPTEMBER 2009
Don Starks
D.C. Starks Mortgage Associates Inc.
141 South Main Street O Bourbonnais, IL 60914
(815) 935-0710 O donstarks@namb.org
President-Elect
Gary Tumbiolo, CMI
(919) 452-1529
garytumbiolo@aol.com
Vice President/Greater Northeast
Region
Colleen-Therese McKeever, CMI
(646) 584-8332
colleenmckeever@aol.com
Ginny Ferguson, CMC
Heritage Valley Mortgage Inc.
5700 Stoneridge Mall Road, Suite 150 O Pleasanton, CA 94588
(925) 469-0100 O ginnyferguson@namb.org
President
Liz Roberts-Fajardo, GML
(702) 498-8020
lvlizrf@aol.com
Joe Camarena
The Mortgage Source
10120 Southwest Nimbus Avenue, Suite C-7 O Portland, OR 97223
(503) 443-1060 O joecamarena@namb.org
National Board of Directors
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For more information on the National Association of Mortgage Brokers, visit www.namb.org.
A Message From NAMB
President Jim Pair, CMC
Awash in a sea of issues
We are beginning this year by swimming through an ocean of turbulent legislative
and regulatory issues. Some of the issues that will have serious implications for
our industry are:
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SEPTEMBER 2009 O
The Home Valuation Code of Conduct (HVCC);
HR 3126 (the Consumer Financial Protection Agency Act of 2009);
Federal Reserve Board proposed changes to regulation;
RESPA reform;
Healthcare reform efforts and the potential negative impact on small business;
and
O The Senate companion bill to HR 1728 (Mortgage Reform and Anti-Predatory
Lending Act).
4
To learn more about these legislative and regulatory issues, visit the National
Association of Mortgage Brokers Web site (www.namb.org) and watch for e-mail
updates from NAMB and how we are going to bat for you and our industry.
Fortunately, we have a very able and effective Government Affairs Committee,
comprised of volunteers who represent all sections of our nation, a legislative
NAMB staff headed by our Executive Director Roy DeLoach, and a very experienced and capable lobby team.
Our strongest asset to address these issues is our “grassroots” efforts. You have
responded in the past to our calls-to-action and have made a significant impact
with your representatives and senators and various governmental agencies. We
need to keep our grassroots efforts strong and continually engaged for the challenges we will face this year.
Certification? Certainly!
A Message From NAMB Certifications
Committee Chair Pava J. Leyrer, CMC,
CRMS, CMP
Borrowers, money and trust
Are you looking for ways to earn more money in an economy and legislative climate that definitely does favor a mortgage broker and loan originator? I am “old
school” and learned quickly, 32 years ago, that referrals and reputation were the
keys to my success or failure. Moving through various positions and companies in
my background, as with many I think, it became clear that education was and still
is a key component to becoming a true trusted professional.
As I heard about and learned what certification was, I spoke to many people
whether it really made a difference. The answer was always a resounding yes!
Bill Howe, CMC, CRMS, spoke of the many referrals and consumer confidence as
he taught the first workshop I attended several years ago. Ginny Ferguson, CMC,
spoke of specific borrowers who chose her over others in her area because of her
designation.
I made the decision to become certified, but thought one would be enough.
Working up the courage and time at the height of the mortgage boom seemed
crazy, but I was committed to getting it done. I realized in speaking with others
One way to strengthen our grassroots campaign is for every member to visit
with their representative or senator while they are at home in your district.
Since Congress is now on their summer recess, this is the perfect time to take
action. Please call their district office and make an appointment to discuss our
industry and the benefit and services we, as mortgage professionals, provide
the consumer. You will be surprised at how little many of our representatives
know about our industry. This is your opportunity to provide them with a better understanding of the role of the mortgage broker and the benefits provided by us to the economy and the consumer. If you will do this on a consistent
basis, you will have a positive response when you have to contact them on a
specific topic.
As I stressed in my last message to you, we must step up and support those who
have supported us. This means that we need a Political Action Committee (PAC)
fund to help re-elect those who have supported our industry. Please log on to
www.namb.org, click on the “Government Affairs” tab, click on “NAMBPAC” and
click on “Donate to NAMBPAC” and make a donation now.
Last but just as important, you need to participate in NAMB’s Lobby Day in
Washington, D.C. This is where we hear from some of the major people who are
proposing legislation or new rules and regulations. You have the opportunity to
go to Capitol Hill and visit your congressman and senators about the issues of
most concern to our industry and to the consumer.
Our success this coming year depends upon all these parts working together.
Members working with our Government Affairs Committee, staff and the lobby
team, the support of our PAC, you participation in our calls-to-action for our grassroots efforts, and most importantly, visiting and working with your representative
and senator while they home in district. If we work together on all these fronts,
we will continue to achieve the success we have enjoyed in the past.
Congress may be in recess, but it’s time we got to work!
Jim Pair, CMC is with Mortgage Associates Corpus Christi and is president of
the National Association of Mortgage Brokers. He may be reached by e-mail at
jimpair@namb.org.
that is one of the hardest parts to obtaining a certification … time and procrastination (plus a small amount of fear.) Yes fear. We are a highly competitive breed
and the fear of possibly failing was not something I looked forward to even with
many years experience. Making a public announcement to my office and family
about my goal was the best thing I did. I was constantly asked had I taken the test
yet, when was I going to do it. I ended up taking the Certified Residential
Mortgage Specialist (CRMS) exam, and than less than three weeks later, the
Certified Mortgage Consultant (CMC) exam. Looking back, I would not have done
it any other way.
I have personally had referrals directly from the National Association of
Mortgage Brokers Web site (www.namb.org) where borrowers looked for someone
in Michigan and chose me “Because I had more initials behind my name, I must
have more knowledge.” I have had many other NAMB colleagues refer borrowers
because of my certifications. I very recently sent a referral to someone in San Jose
because he was the only one with a certification. It does make a difference in
how you are perceived, but more importantly, how you feel about yourself. Take
the challenge to obtain more than one.
The next step to more referrals and commitment to yourself and our industry is to
become certified today. Contact any certified mortgage professional and we will gladly
assist you.
Pava J. Leyrer, CMC, CRMS, CMP is president and owner of Heritage National
Mortgage Corporation in Grandville, Mich., and Certifications Committee chair for
the National Association of Mortgage Brokers. She may be reached by phone at (616)
534-4993 or e-mail pava@heritagenational.com.
The Credit Corner
Red Flag Rules Update
By Dave Wheeler
You may have seen the latest press releases indicating that the Federal
Trade Commission’s (FTC) Red Flag Rule enforcement is now set to begin
on Nov. 1, 2009. For those who have been following closely, you are also
probably aware that all brokers were supposed to be compliant with the
rules as of Nov. 1 of last year. While it may seem like this affords you additional time
to get compliant, it was only the enforcement date that was pushed back. That
means that you still need to act quickly if you have yet to get your plan in place.
As a reminder, the Fair and Accurate Credit Transactions Act (FACTA) requires you to
have a written Identity Theft Prevention Program in place in your office. There are no
exceptions to this regulation. The main point is that the FACT Act requires companies to:
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Develop a written plan to detect and respond to potential identity theft.
Train employees on detection and use the proper tools.
Update and review your program annually.
Your plan should outline your company’s potential to have identity theft occur, what
warning signs exist (Red Flags), how you detect those signs, and what responses are appropriate (do you call the FBI if you can’t get a marriage license showing a name change?).
The Communications Corner
A Powerful Mortgage Marketing Web 2.0
Strategy: TweetGrid
By David Orsini
And all of these examples are just from right now as I type this blog. I
may not be a big fan of the concept of Twitter, but as a business owner, I
know that if people want to talk about needing my services then I certainly need to listen.
David Orsini is vice president of Top of Mind Networks and oversees the
CRM division of the company. David specializes in building systems that
help mortgage professionals maximize their relationships with their client
base without having to lift a finger. He may be reached at (404) 943-9910
or e-mail dorsini@topofmind.com.
O SEPTEMBER 2009
1. Someone thinking about buying another house as a
rental … maybe they need financing.
2. Three people house hunting in my home town of Atlanta … maybe they need
financing as well.
3. About 11 days before their scheduled closing, someone is getting some
bad vibes from their mortgage company … maybe they could use a second
opinion, you may not win the business this time since it is so close to closing, but you could use this opportunity to earn their trust, then maybe add
them to your marketing campaign and be there to earn their business next
time.
4. Someone who thinks they are being taken by their broker because they
were quoted a 0.5 higher interest rate because of the county they live in …
come in with an honest quote and educate this prospect and I bet the business is yours.
As you can see; at the time I was writing this blog post,
there was:
Dave Wheeler is a regional account executive with Credit Plus Inc. and a member of
the NAMB Credit Scoring Committee. He may be reached by phone at (610) 462-3763
or e-mail dwheeler@creditplus.com.
How powerful would it be if, as a mortgage professional, you could
tell when someone looking to refinance their home was unsatisfied
with their current mortgage professional? Or, if another person is
questioning something about the rate they got from the broker they
are currently with? Or, what if you could tell when someone was interested in
buying a home in your city? This type of information is invaluable to any mortgage professional. These are extremely hot leads to pursue … people who need
your help right away! Well these same people are putting this information right
out there on the Internet for anyone to see; you just have to know where to look.
I will be the first to admit; at first, I thought Twitter was stupid. In fact, I am
still not 100 percent sold on it. I have found ways to make it work for me for my
business, but why hundreds of thousands of regular people use it every day to
announce to the world what they are doing at that moment in time really does
not make sense to me. That being said, if people want to tell the world they
need the service I provide and I know how to find them telling the world that,
then that is a positive thing for my business. So without
much further adieu; I introduce to you the TweetGrid.
There are multiple social search engines designed to
search your various social networking sites that can, in
some form or another, yield similar results as TweetGrid.
However, TweetGrid does not function like a normal
search engine, other than the fact that you don’t need to
set up any kind of an account to use it and it is completely free. It is (as the name suggests) a grid where you can
type in multiple search phrases and the results are fed in
to the grid in real-time. In other words, you don’t search
for one thing, see your results, and then search for another thing (refreshing the page), see your results, and so on.
With TweetGrid, you can have up to nine searches taking
place simultaneously and in real-time. So as someone
“Tweets” (I really hate saying that word, and hate typing
it even more) the question “Am I being taken by my broker?,” you can be one of the very first people to see it.
Take a look at the included grid image. I have blurred out
the screen names of the “Twits” (users of Twitter?) to protect the innocent; but you can see what they are typing
that match my search criteria.
Examples of red flags include not only obvious signs, like a fraud alert on a credit
report, but also more subtle signs, such as a borrower only wanting to conduct business
via phone, fax and e-mail, refusing to meet with third-party involved in the loan. This
doesn’t mean the borrower is a thief! It means that the potential for identity theft exists,
and you are required to take additional steps to verify identity before proceeding with
the loan. How you choose to verify that identity should be written in your plan.
The National Association of Mortgage Brokers has partnered with Microbilt LLC
(www.microbilt.com) and Majestic Security LLC (www.majesticsecurityidsafe.com) to
offer two different solutions to you. Information on both companies can be found at
www.namb.org. Click on the “Red Flag Compliance” graphic to view their solutions.
These are meant to offer you two different ways to start becoming compliant. Please
read the information carefully and select which option is best suited for your business.
Part of the proceeds will help NAMB continue to fight for you, and bring the latest information as it happens.
Once you have your plan written, you must train your appropriate staff on any
operational changes and tools that you will be using. The additional identity verification tools are usually readily available through our partners, as well as your
current credit report provider. Many lenders require that these be submitted with
each loan. Please check with your lenders for their specific details. And finally,
remember to update your program at least annually.
5
Partnering and Power Networking:
The Double “P” Principle
By Laura Lynn Burke
SEPTEMBER 2009 O
FHA and the New Condo Approval
Process: Will Lenders Take
Advantage of This Change?
6
In the late 1990s, I did a lot of condo
financing. I developed a niche for myself,
and a reputation for being able to successfully get builders’ condominium conversions approved for Federal Housing
Administration (FHA) financing. It was a
mark of separation from the competition, and it paid off well. Previously, only
the FHA could grant approval to condominium projects for FHA financing.
However, with the recent Mortgagee
Letter 09-19, this changes. Now, “… FHA
will allow lenders to determine project
eligibility, review project documentation
… The requirements of this Mortgagee
Letter are effective for all case numbers
assigned on or after Oct. 1, 2009.”
Lenders must have unconditional
Direct Endorsement (DE) authority and
staff with knowledge and expertise in
reviewing and approving condominium
projects. This FHA update is quite lengthy;
I will provide you with the highlights here.
Here are the 14 things you need to
know about these changes:
1.New guides are applicable to
Proposed/Under Construction; Existing
Construction or Conversions.
2. The Spot Loan Approval (SLA) process,
as defined in Mortgage Letter 1996-41,
is eliminated.
3. Project Approval is not required for
FHA-to-FHA streamline refinance transactions or properties being sold by the
U.S Department of Housing & Urban
Development (HUD).
4. If a lender elects to approve the project, then environmental reviews will
not be required, but any known or discovered hazards (such as proximity to a
highway, landfill, railroad or airport)
may make the project ineligible unless
remedied.
5. Association by-laws may now have a
Right of First Refusal clause, unless it
violates discriminatory conduct under
the Fair Housing Act.
6. Property may utilize 25 percent of the
total floor area for commercial purposes.
7. No more than 10 percent of the units
may be owned by one investor.
8. No more than 15 percent of the total
units can be in arrears (more than 30
days past due) of their condominium
association fee payment.
9. At least 50 percent of the total units
must be sold prior to endorsement of
any mortgage on a unit. This means you
won’t be able to close the loan until this
presale requirement has been met.
Valid presales include an executed sales
agreement and evidence that a lender
is willing to make the loan.
10. At least 50 percent of the units of a
project must be owner-occupied or sold
to owners who intend to occupy the
units. On multi-phased projects, the
owner-occupancy percentage is calculated on the first declared phase and cumulatively on subsequent phases if the ownership of the condominium project
remains the same. If multi-phasing
includes separate ownership per phase,
each phase is calculated individually. No
more than 30 percent of the total units
can be encumbered with FHA insurance.
11. Condo conversions no longer
require the homeowners to be in control of the association for one year. This
means condo conversion units will be
eligible once the 50 percent presale
requirement is met.
12. Manufactured housing condominium projects are now eligible for FHA
mortgage insurance.
13. Condominium project approvals will
expire two years from the date they are
placed on the list of approved condominiums. If a project has been previously approved, lenders must certify that
they are not aware of any change in circontinued on page 11
Staying connected and adding services is for life insurance and disability insurthe new way of marketing and staying in ance. My clients were going to call
business. Many mortgage brokers someone, so why not my colleague?
(bankers typically aren’t allowed to) are
I decided to go to school to learn tax
looking for ways to service existing preparation. Why not, I already had a
clients or attract new clients with multi- client base and I have seen and worked
ple crossover products. If you are a mort- with their tax returns already. Tax
gage banker, you too can do this through preparation is a great feature to tell
networking and building a team of other your first-time homebuyers that you
individuals you respect and trust to work offer. When you close, you can tell them
together with your clients.
how to prepare their amended tax
As for the mortgage broker, some return so they can get their tax credit
products you may look into could be tax (up to $8,000) now instead of waiting
preparation or tax negotiating services until next year.
(referred out), mortgage insurance, life
Diversifying myself actually saved me
insurance, disability insurance, legal a client. A past client referred his sister
services, credit repair, loan modifica- to me, she had been calling the wrong
tions, commercial loans, bi-weekly plans number for days leaving messages I
and other financial related services. Offer never got. Finally, one of the realtors I
your customers a center for one-stop work with called and said she had called
shopping of all their finanher and left messages at
cial needs. You will need
her office that she didn’t
to educate yourself in
get either. The realtor who
many of these areas, take
made the initial contact
a few classes, pass a test or
found out that she lost the
two, but you have now credeal and gave me her
ated additional marnumber. She said she was
ketable skills and knowltalking to another loan
edge. Everyone wants to
officer, but I called and
work with knowledgeable
there was a chance that I
people.
could possibly save the
The idea of “one-stop
deal. I called her and told
shopping” is important
her she was calling a
“It has been my
these days since, as a society,
wrong number and I was
experience that if
we have become extremely
sorry she missed me. I
impatient and time-sensi- you offer a service of
told her it didn’t matter to
tive, so the bundling of servme if she was working
true value, your
ices and products is a welwith another loan officer,
clients will tend to
come solution.
but to call me when she
rely on you for your
It has been my expericlosed and I would amend
expertise and
ence that if you offer a
her tax returns and get
service of true value, your
professionalism.”
her money now.
clients will tend to rely on
My point is … what
you for your expertise and professional- ever you do, simply offer it and don’t
ism. Only market what you have the push it. If you feel the extra steps of classexpertise to handle, unless you team up es and tests aren’t for you, then partner
with another individual or group to mar- with others who mirror your ethics.
ket services together.
We cannot do it all by ourselves, and
I have teamed up with many individ- this is where partnering comes into
uals in the past. I had a co-worker who play. Through partnering, we become
marketed legal plans to human resource stronger by offering a greater array of
department heads. They would allow products and services. In today’s valuehim to come into their company and based market, the need to partner has
make a presentation on his products. He become even stronger.
always added that a “mortgage expert”
There is marketing strength in numwould come along with him to answer bers when you create partnerships. The
any questions related to first-time new terminology for partnering is “the
homebuying, purchasing investment packaging of services and affinity
property, refinancing, funding college groups.” The salesperson who utilizes
tuition and adjustable rate mortgages. partnering becomes a more complete
We did presentations with multiple com- resource to their clients. Learn how to
panies and some organizations as well. choose a partner who mirrors your ethics
Through this partnership, I did conduct and maximizes your strengths, by creatbusiness that I normally would not have ing a synergy that increases the produchad. He also brought me into a couple of tivity and profitability of both parties.
churches as well, a great place to meet
A partner is similar to a marriage, so
people looking to buy homes.
choose wisely. They will be speaking to
Another colleague of mine sold
insurance. I referred all clients to him
continued on page 9
HECM at 20: Leaders and Pioneers in the
U.S. Reverse Mortgage Industry Series
A Visionary
Non-Commercial Entrepreneur
type for the U.S. Department of Housing
& Urban Development’s (HUD’s) HECM
counseling protocol. He also collaborated in developing three software programs for analyzing and comparing
reverse mortgages.
After almost two years of trying, I
recently had the opportunity to catch
up with Ken Scholen. The following are
his preliminary reflections on the program and the industry his vision and
work have created.
What attracted you to reverse mortgages, and why did you commit to the
business?
While working for the Wisconsin Board
on Aging in the mid-1970s, I met
homeowners who needed a way to
convert their home equity into cash
How has the industry changed since
you came in?
The reverse mortgage industry did not
exist when I got started, so everything
that’s happened since then has been a
change. Broad major developments
have been the enactment of the HECM
program, the development of a secondary market, the creation of the
National Reverse Mortgage Lenders
Association (NRMLA), improvements in
the
counseling
program,
the
encroachment of financial predators
into this market, the Great Recession’s
credit implosion, which has stalled
product development, and the collapse of house prices, which may lead
to HECM principal limit factor reductions for FY 2010.
What are some lessons you have
learned about seniors, the market,
and the business?
It’s not enough to assert that the predators only operate on the fringes of the
market or that the loan product per se
is not the problem. The reality is that
the predators wield an enormous influence over the public image of the product and the market and, therefore, the
health of the industry. And the existence of the product is, in fact, the necessary precondition for the financial
How many news stories about
such cases would it take for the
public to begin associating reverse
mortgages with “losing your
home?”
—Ken Scholen
abuse that is perpetrated on reverse
mortgage borrowers. So the health of
the industry is directly tied to the safety of the consumer, and halfway measures to restrain the predators will only
result in halfway protection for consumers and the industry.
A strong HECM counseling program
can be a major factor in protecting consumers and the industry. But all the
efforts to strengthen the program will
mean little unless an independent
source of reliable and adequate funding can be created to support it.
Loan costs are a serious barrier to
market growth. Consumers who would
be willing to accept lesser loan benefits
of various types in exchange for much
lower costs are the major untapped segment of the reverse mortgage market.
continued on page 10
O SEPTEMBER 2009
History matters. As HECM (Home Equity
Conversion Mortgage), and the multibillion-dollar* reverse mortgage industry it has spawned, turn 20 this year, it
is fitting that we take a moment to
reflect on the industry’s first two
decades through the eyes and work of
those who were not only present at its
creation, but also made significant contribution to its growth.
Nelson Hayes of Deering Savings &
Loan made the first reverse mortgage in
U. S. history to Nellie Young of Portland,
Maine in 1961 (www.reverse.org/history.htm), but it would be 28 years before
a product and an industry would
emerge.
Substantial and sustained research
and development (R&D) activities
began in the late 1970s due to the work
of a visionary non-commercial entrepreneur: Ken Scholen, the father of the
HECM program and of reverse mortgage industry in the U. S.
Ken Scholen directed the first three
federally-funded reverse mortgage
research and development projects,
organized the first three national conferences on reverse mortgages, and
authored the first three books on
reverse mortgages. Also, Scholen led
efforts to pass the HECM program into
law and developed the TALC (Total
Annual Loan Cost) process in use to this
day. For his pace-setting work in HECM
and reverse mortgages, Scholen received
the Federal Housing Administration
(FHA) Commissioner’s Award in 1995.
As a consultant to AARP in the 1990s
and as director of the AARP
Foundation’s
Reverse
Mortgage
Education Project from 1998 to 2007,
Ken Scholen led more than 200 HECM
counselor training and consumer education sessions in 47 states and coordinated the creation of the national HECM
counselor examination and the proto-
without having to sell or make monthly loan repayments. Some quick
research uncovered a few largely theoretical ways of doing this, but the concept was sufficiently promising that I
left the Board to run a series of government-sponsored R&D efforts over
the next few years. So my initial goal
was to spur the development of programs and products to meet this need.
The most important outcome of the
R&D work was the initial HECM program proposal, but AARP was the only
national organization that actively supported it. HUD issued a report opposing it and it took six years to gain
Congressional approval.
After the HECM legislation was
enacted, my emphasis switched to
helping get the program off the
ground and providing consumer information and education about reverse
mortgages. When the market started
to grow, and it became apparent that
the HECM counseling program was not
ready to meet this need, my focus
changed to expanding and improving
the counseling program. It took a lot
longer than expected, but now there
appears to be broad support for a
more detailed counseling protocol and
individual
counselor
standards,
including an exam and continuing
education requirements, and a strong
program of individual counselor performance evaluation (a.k.a. “secret
shopping”).
7
By Charlie W. Elliott Jr., MAI, SRA
SEPTEMBER 2009 O
Mortgage Professionals Living in
Harmony With the HVCC
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The change that we in the mortgage and loans are very popular right now, and
housing industries have experienced with- they are not affected by the HVCC. This
in the past year is amazing. As a result of is something for those of us consumed
last fall’s elections, we have gone from a by all of the HVCC negativity, to take
relatively conservative government to a heart about.
significantly more liberal one. The economy has tanked in a way that most of us The other half
have never witnessed. Now with the To listen to some loan officers out
Home Valuation Code of Conduct (HVCC) there, one would think the only way
and other regulatory manthey can make a living is
dates, some of us have
to influence appraisers
been less than positive
into appraising property
about our profession and
for more than it is worth.
our jobs.
I have too much confiEven the more sober
dence in the integrity of
among us must acknowlour mortgage professionedge that things in our
als and too much confiindustry going forward
dence in our system to
will be at least different,
believe that. Fannie and
if not more challenging.
Freddie are going to be
Since I am generally an
buying large numbers of
optimistic person, I tell
mortgages. Many if not
myself that there must
most will be approved
“Even the more sober
be a silver lining up there
without having to be
among us must
behind those clouds. For
readdressed in regard to
acknowledge that things the appraisals. At times
every door that closes
in our industry going
another opens. It is just
when the appraisal must
my job to interpret all of forward will be at least be questioned, there is a
this and move in the
proper procedure for
different, if not more
right direction.
challenging. Since I am doing this. If the appraisSince most of us do generally an optimistic al is wrong, it will most
not want to change prolikely get changed. That
person, I tell myself that
fessions, I am going to
leaves a few potential
there must be a silver
take the position that
loans that cannot and
lining up there behind should not be made. Is
someone has to do mortthose clouds.”
gages and that the marthat not what appraisals
ket will take care of any
are suppose to be about
excesses imposed upon us by the gov- and the way it should be?
ernment. Looking at it this way: I have
come to the following conclusions and
In conclusion, the sky is not falling.
encourage you to do likewise.
To the extent that we think we see
pieces of the sky falling, it will not all
Half of the market
be caused by the HVCC. Our worst
The HVCC only applies to mortgages enemy right now is the economy and
sold to Fannie Mae and Freddie Mac. the sluggish housing market. Home valThey only make up part of the market. ues are truly at a critically low level and
That changes on a daily basis, so let’s this is contributing to the fallout of
say they are involved in half of the cur- many of our deals. Until the market starent market. That leaves 50 percent of bilizes the road will be rocky.
the market not affected by HVCC.
Federal Housing Administration (FHA)
NAMB reps meet with
FHA Commissioner
David Stevens
The National Association
of Mortgage Brokers
(NAMB) recently attended a meeting
with newly-appointed Federal Housing
Administration (FHA) Commissioner
David Stevens to discuss mortgage broker participation in the FHA program,
among other important FHA issues.
“NAMB appreciated the opportunity
to meet with Commissioner Stevens to
discuss the mortgage brokerage industry and its involvement with FHA,” said
NAMB President Jim Pair, CMC. “We
believe it was an informative meeting
for both parties.”
During the meeting, Commissioner
Stevens discussed a number of issues
and fielded questions from NAMB officials. Implementation of recent
changes to the Real Estate Settlement
Procedures Act (RESPA), a potential
nationwide FHA loan limit, risk-based
premiums, reverse mortgages (HECM),
and condominium concerns were all
topics of discussion during the meeting.
NAMB officials requested that the FHA
release additional “frequently asked
questions” on the new Good Faith
Estimate (GFE) document to avoid further confusion in the industry.
“Commissioner Stevens clarified several issues and was able to expand
more on FHA policy,” said Pair. “NAMB
looks forward to working with
Commissioner Stevens in the future.”
For more information, visit www.namb.org
or www.fha.gov.
Murin and Montgomery
form advisory firm The
Collingwood Group
Former President and
Chief Executive Officer
of the Ginnie Mae
Joseph Murin, and former Federal Housing Administration
(FHA) Commissioner Brian Montgomery
have announced the formation of The
Collingwood Group LLC. The firm will
provide business advisory services to
boards of directors and senior executives of companies in the financial services industry.
In launching the new company, the
two former government officials also
announced the immediate merger of
the new company with Capital Financial
Solutions LLC (CFS), a consulting firm cofounded by Brian O’Reilly and Tim
Rood. Established in 2007, CFS has provided services to companies in the
financial services industry, including
those requiring strategic business development, business and risk management, and business and technology systems design and development services.
“There has never been a time more
important for the financial services industry to work hand-in-hand with the federal government to help restore stability
and liquidity to the markets,” said Murin.
“We will advise our clients on how they
operate strategically in this environment,
as markets continue to shift and the regulatory landscape inevitably changes.”
O’Reilly and Rood will serve as managing
directors and members of the management committee in The Collingwood Group.
“Our purpose is to help new clients
and existing CFS clients to continue to
grow their business and to effectively
navigate the business and public policy
environment in some of the most challenging economic conditions the nation
has ever known,” said Montgomery.
Murin was appointed CEO of Ginnie
Mae in 2008. Prior to that time, he
served as chief executive officer of
Lender Services Inc. He also served as
chief executive officer of Basis100, a
Toronto-based publicly traded technology company. Earlier, he served as president of Century Mortgage Company.
Montgomery was Assistant Secretary for
Housing-Federal Housing Commissioner
from 2005-2009. He served as Acting U.S.
Department of Housing and Urban
Development (HUD) Secretary earlier this
year. He joined HUD from the Executive
Office of the President, where he served as
Deputy Assistant to the President and
Cabinet Secretary.
According to Murin, the firm will focus
on serving clients’ business development
needs in the federal government arena.
“Americans are looking to Congress and
the Administration to provide strong
leadership and innovative solutions to
the financial crisis,” Murin said. “To be a
successful enterprise in the financial services industry will require the ability to
work collaboratively with policymakers.”
Montgomery said while the financial
the double “p” principle
Send a note or monthly/bi-monthly
newsletter to every past client. Every
time you put your name in front of
them, they will associate your name with
your business. They will perceive you as
an expert in your field. This must be
done regularly; as if it is done sporadically, you will lose your impact. Send to all
of your clients, past, present and future.
It doesn’t matter whether you send
e-mail notes, newsletters or postal mail.
The Internet, however, is cost-effective
and efficient. It will depend on your
Future clients
I bet you’re wondering how future
clients can be a source of referrals? It’s
easy: Give the best potential customer
service and go that one step above what
is expected. They will remember the
effort and time you invested. Many
times, I have received referrals from
future clients. This is the referral you
have the least control of, you never
asked for it, you never expected it, and
you have not cemented a true relationship with the referring source yet.
WELLS FARGO WHOLESALE LENDING
Shared Vision, Shared Success.SM
Make Your Way With A Lender Committed To
Leading Responsible Change
Wells Fargo Wholesale Lending is dedicated to working with mortgage brokers who are committed
to five key principles for long-term industry success:
Responsibility: Ensure fair and responsible lending and borrower education are top priorities.
Quality: Produce high quality loans.
Controls: Better manage our collective risk and eliminate fraud.
Excellence: Create, promote and adhere to industry-leading standards of excellence.
Efficiency: Develop capabilities that drive greater efficiency and ease of use between our
companies.
Together, we will lead the way, helping to establish a foundation for a stronger, healthier and
more responsible industry.
Share in this vision. For more information, tools, ideas and market insights visit our Shared Vision,
Shared Success.SM web site located on www.brokersfirst.com.
RESPONSIBILITY
•
QUALITY
•
CONTROLS
•
EXCELLENCE
•
EFFICIENCY
O SEPTEMBER 2009
This information is for use by mortgage professionals only and should not be distributed to or used by
consumers or other third-parties. Information is accurate as 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. #64153 4/09
1. Past clients
2. Present clients
3. Future clients
4. Your own backyard!
Past clients
“Offer your customers a center for
one-stop shopping of all their
financial needs. You will need to
educate yourself in many of these
areas, take a few classes, pass a
test or two, but you have now
created additional marketable
skills and knowledge.”
your clients and you will be speaking to
theirs. Make it a two-way street. This opens
new doors for both of you … or all three
or four. You determine who will be a party
to your bundling of services network.
Those are new ideas of marketing,
now remember the old ways … .it may
be painful to remember calling on realtors, builders, businesses, past clients,
old clients and yes, the cold call. Today’s
market calls for “Fall Back to Basics”
planning. For those if us who have been
around for a while, we are familiar with
the old ways of marketing, while some
newer loan officers are used to relying
on technology and rates themselves to
bring the clients to our doors. Not in
today’s market, you need to bring the
client to your door.
I have made myself get out and call
on realtors. I started hosting “Realtor’s
Open Houses.” I got two buyers for sitting in a house on a Saturday afternoon
serving cookies. No, it doesn’t always
work that easy, but if you don’t do it at
all, it won’t work at all.
I hosted a “Broker’s Open House” the
following Tuesday. Twenty realtors
came through whom I never met
before. I brought lunch, a nominal cost
to meet 20 new brokers who had time
to talk and listen to me.
For starters, I was invited by one of
their peers, so instant respect was
received. Second, they wanted to eat my
food, so they were nice to me. I showed
off some of the products I thought they
might not have and I did. Sure enough,
most of them didn’t know those programs still existed. I am hoping to get
some business from these new contacts,
and I enjoyed meeting new people.
Sure, you can send e-mail marketing
or purchase lists, but this cost was nominal and gained instant rapport. Don’t get
me wrong, I send postcards out on a regular basis to my past clients and future
clients. I also send cards telling each broker how much I enjoyed meeting them
along with a business card. Staying in
front of new people is key to a strong
marketing plan. They don’t know me, so
I would be easy to forget, but not if I
don’t let them. Don’t be obnoxious, but
subtitle reminders are great.
Stop and talk to builders in open
houses, as many have an inventory they
need help moving. Offer them your
services and marketing plans. You are
the expert in helping to keep the industry moving forward. Stop being a
naysayer, no one needs to hear it any
more. Enough is enough. Moving forward is the key and having additional
sources of income helps.
In marketing to past present and
future clients, there are four key referral
sources:
continued from page 6
market and the availability of Internet
addresses for e-mail contacts in choosing which method to use. Even if you
choose one over the other, I recommend crossing the two. Send thank you
cards, birthday cards and other special
notes in the mail because it is a tangible
reminder of who you are. E-mails are
great, easy and get messages across, but
are usually read one and then deleted.
Some aren’t even read.
9
SEPTEMBER 2009 O
forward on reverse
10
What are the prospects and some stories to select just one, so here’s a tidchallenges for the reverse mortgage bit from the political realm. At the HUD
industry, and why?
press conference announcing the origiThe credit implosion is the most serious nal launch of the HECM demonstration,
immediate problem, and there’s no way of one of the program’s Congressional
knowing how long its effects will be felt. But, sponsors was asked what would hapuntil credit conditions improve, it will be dif- pen at the end of a HECM’s loan term:
ficult to create the much lower-cost products Would the borrower be forced to sell
that have the most potential for meeting a the home to repay the loan, or would
broader array of needs and expanding the the lender take on the risk of extending
market. Other important goals include erad- the term? Apparently unaware that
icating the predators
HECMs would have
who have harmed
an open-ended
“A strong HECM counseling pro- term and the prime
the market’s public
image and fully fund- gram can be a major factor in pro- purpose of the proing the counselors tecting consumers and the indus- gram was to insure
whose work is so vital try. But all the efforts to strength- against the related
to safeguarding conrisk, he answered
en the program will mean little
sumers and the unless an independent source of
that it was a very
industry.
reliable and adequate funding can good question and
The HECM prohe would ask his
be created to support it.”
gram has some
staff to look into it!
—Ken Scholen
long-festering problems that need to be
*According to
resolved. The structure of Ginnie Mae’s HUD data, outstanding value of HECM
securitization program and the re-emer- loans stand at $55.42 billion. Since
gence of other secondary sales venues will 1989, 544,300 HECMs have been origiincrease the likelihood of borrowers los- nated, and 431,025 HECMs were outing their homes via HECM-related proper- standing. Numbers are as of June
ty tax delinquencies. How many news sto- 2009.
ries about such cases would it take for the
public to begin associating reverse mort- Author and columnist, Atare E. Agbamu,
gages with “losing your home?” On anoth- CRMS is director of reverse mortgages at
er front, will more stories about negative Minneapolis-based AdvisorNet Mortgage
creditline growth generate a class action LLC. A member of the BusinessWeek
before this long-term problem is finally Market Advisory Board, Agbamu is
resolved? And thanks to you, Atare, the author of Think Reverse! and more than
problems created by the “clarification” of 100 articles on reverse mortgages.
the non-recourse limit have become more Through his advisory firm, ThinkReverse
widely recognized.
LLC, Agbamu advises financial profesWe also need to learn why borrowers sionals, institutions and regulators
have been voluntarily ending their across the country. In a 2007 national
HECM loans so much sooner than any- report on reverse mortgages, the AARP
one had expected and to seriously con- cited Agbamu’s work. He can be reached
sider adjusting reverse mortgage bene- by phone at (612) 436-3711 or (612) 203fit structures and risk premiums accord- 9434, and e-mail at aagbamu@advisoringly. Skewing any such changes toward net.com or atare@thinkreverse.com.
lower loan costs would be one way to
address the cost barrier.
Visit author Atare E.
Agbamu’s
blog
at
What is your favorite reverse morthttp://thinkreverse.com for
gage story?
his thoughts and insights on
There are too many unique borrower the reverse mortgage marketplace.
Q
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Loan Imaging Storage
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800-939-5383
news flash
services industry faces complex challenges, the new firm’s approach will be
simple. “We call it The Collingwood
Model and it boils down to three
things: Bring integrity and talent to the
table; find opportunities for clients to
grow and become more competitive;
create value for clients and the people
they serve. That’s how we look at our
mission,” said Montgomery.
For more information, visit www.collingwoodllc.com.
New FHA-Making Home
Affordable loan mod
guidelines announced
U.S. Department of Housing
and Urban Development
Secretary Shaun Donovan
has announced that
the Federal Housing
Administration (FHA) has implemented
changes to its loan modification program
to ensure consistency with the Obama
Administration’s Home Affordable
Modification Program. Beginning Aug.15,
FHA borrowers are able to significantly
reduce their monthly mortgage payments
by seeking a loan modification through
their current mortgage company or loan
servicer under the new FHA-Home
Affordable Modification Program (FHAHAMP).
The Helping Families Save Their
Homes Act of 2009, signed into law on
May 20, allows the FHA to give qualified
FHA-insured borrowers the opportunity to
reduce their monthly mortgage payment
by modifying the mortgage through FHAHAMP. The FHA expected all servicers to
implement the changes by Aug.15. The
program permanently reduces a family’s
monthly mortgage payment through the
use of a partial claim, which defers the
repayment of mortgage principal through
an interest-free subordinate mortgage
that is not due until the first mortgage is
paid off. FHA has used the partial claim
option in the past, which allows a lender
to advance funds on behalf of a borrower,
to reinstate a delinquent loan that was up
to 12 months delinquent. Now, this program will allow HUD to bring the borrower’s payment down to an affordable level.
This will be accomplished by bringing the
mortgage current, buying down the loan
by up to 30 percent of the unpaid principal balance and deferring these amounts
in a partial claim.
FHA will pay an incentive to loan servicers for each FHA loan modified under this
program. Mortgagee Letter 2009-23, along
with detailed requirements for the FHAHome Affordable Modification Program,
was distributed to all FHA lenders as well.
The implementation of this program will
further the Obama Administration’s efforts
to stabilize the housing market by helping
homeowners stay current on their mortgages and stay in their homes, therefore preventing the impact of foreclosures on families and communities.
For more information, visit www.fha.gov.
Federal Reserve Board
approves TALF extension
The Federal Reserve Board
and the Treasury Department
have announced the
approval of an extension to the Term
Asset-Backed Securities Loan Facility (TALF)
and that, at this time, they do not anticipate any further additions to the types of
collateral that are eligible for the facility.
Conditions in financial markets have
improved considerably in recent
months. Nonetheless, as deemed by the
Fed and Treasury Department, the markets for asset-backed securities (ABS)
backed by consumer and business
loans and for commercial mortgagebacked securities (CMBS) are still
impaired and seem likely to remain so
for some time. To promote the flow of
credit to businesses and households
and to facilitate the financing of commercial properties, the Federal Reserve
and Treasury approved extending TALF
loans against newly issued ABS and
legacy CMBS through March 31, 2010.
Because new CMBS deals can take a significant amount of time to arrange, the
Federal Reserve and Treasury approved
TALF lending against newly issued CMBS
through June 30, 2010. The Board will
continue to monitor financial conditions and will consider whether unusual and exigent circumstances warrant a
further extension of the TALF to help
promote financial stability and economic growth in the future. The
Federal Reserve and Treasury had previously authorized TALF loans through
Dec. 31, 2009.
After having conducted a thorough analysis of a number of potential candidates, the Federal Reserve
and Treasury announced that they
are holding in abeyance any further
expansion in the types of collateral
eligible for the TALF. The securities
already eligible for collateralizing
TALF loans include the major types of
newly issued, triple-A-rated ABS
backed by loans to consumers and
businesses, and newly-issued and
legacy triple-A-rated CMBS. The
Federal Reserve and Treasury are
prepared to reconsider their decision
if financial or economic developments indicate that providing TALF
financing for investors’ acquisitions
of additional types of securities is
warranted.
For more information, visit www.federalreserve.gov.
CMAC details the five
most common mortgage
violations
Approximately 98 percent of all mortgages
are potentially eligible
to be renegotiated due to Truth-inLending Act (TILA) violations, according
manufactured housing condo projects.
This is a huge marketing opportunity,
since this is now a wide open market
and controlled by the banks … but not
for long. Just make sure you have a
cumstances since initial approval of the overcome for me to overcome when funding source for the types of units the
project which would result in the proj- educating developers on the benefits of developer will be offering.
ect no longer complying with FHA getting their condo approved with FHA.
requirements.
Condo financing is a great niche to
2. No longer requiring that owners be have, and I had a lot of fun when I did
14. Whoever knowingly and willfully in control of the association for one it. A word caution … if you develop a
makes or uses a document containing year on condo conversions.
good reputation for getting condos
any false, fictitious or fraudulent state- This change makes it a lot easier to get approved, make sure you have a true
ment or entry, in any matter in the juris- in with a developer that is converting relationship with the developer that
diction of any department or agency of apartments to condos. I chose this as will bring you in to get their project
the United States, shall be fined not my niche because it lacks the time to approved, and that the developer isn’t
more than $1 million or imprisoned for close on new construction.
just using you for the approval with the
not more than 30 years, or both.
intention of then using their long3. The allowance of FHA financing on standing lender (i.e., that does FHA
Some perspectives on the new process:
O Although the FHA has now given
lenders the ability to process their own
condo approvals, it’s not a carte blanche
to go out there and start financing condos. The lender must have staff knowledgeable about the process and very few
DE lenders have staff familiar with the
condo approval guides. In addition,
what lenders are going to want the extra
liability in processing and certifying
their own condo approvals? The last
thing lenders are looking for is more liability. Given this reality, I foresee very
few lenders participating in this offer.
Lenders like Countrywide and Flagstar
may utilize this guide, since for years,
they have had their own internal condo
approval departments apart from FHA. I
can see lenders involved in the re-certification, since the lender will only be
certifying that they know of no changes
to the project that would disqualify it. It
will be interesting to see how the
lenders actually react to this guide.
fha insider
loans but lacks the know-how to get
condos approved). As you might guess,
this once happened to me, and I don’t
want it to happen to you.
Go FHA!
Jeff Mifsud founded Southfield, Mich.based Mortgage Seminars LLC in 2004, has
been an FHA originator for 12 years, is a
contributor to LoanToolbox.com and is a
former FHA underwriter. Jeff may be
reached at (877) 342-9100 or e-mail
jeff@mseminars.com.
Visit author Jeff Mifsud’s Web
site at http://mseminars.com
for tips and information on
FHA loans and details from
some of the nation’s top FHA specialists.
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www.presidentsfirst.com O SEPTEMBER 2009
1. The elimination of the environmental review.
This was a huge deterrent for builders
due to the expense involved, and one of
the main objections that was difficult to
Presidents f irst
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O If you do work for a lender that is willing
to take the risk in this program, the great
advantages I see with these changes are:
O The decision to eliminate Spot Loan
Approvals (SLAs), in my opinion, will deny
ownership to thousands of potential
condo purchasers and will negatively
impact condo sales across the country. I
think this was a poor decision and the SLA
should be reinstated. SLAs allowed people
to purchase a condo in a project without
having to go through the project approval
process. To have to approve an entire project for one buyer is not practical. I actually
did this once for a buyer and it was a lot of
effort for just one loan. In addition, there’s
inherently less risk to HUD, since SLAs are
typically done in already-established condominium projects. It doesn’t make sense
that HUD would insure a higher risk unit in
a new project (that has only a 50 percent
presale requirement) and yet and not
insure a unit in a well-established project
with an SLA, which is clearly a lower risk. If
HUD truly wants Hope for Homeowners,
then they should bring back the SLA.
11
the double “p” principle
Three important rules
Rule #1
If a past, present, or future client refers
you, take action now while the lead is
hot. Remember, it is always easier to
talk to someone expecting your call,
warmed up for you by someone they
know, like and trust than someone who
has not been referred to you.
You come highly recommended—don’t
let your referral source down. This is critical
for future business. Make sure you take the
time to either personally call or handwrite
a special thank you note for the referral.
Treat them like gold and with the utmost
respect because they thought enough of
you in their busy day to refer you!
Rule #2
Present clients are hot! Ask for referrals
now! Right now, they think you are wonderful and want the world to know they
made the best choice by choosing you.
They will toot your horn. They have a
high level of trust in you at this point. No
matter what the product or service might
be, they made a choice to buy from you.
This is the best time to ask for a referral!
Residential Mortgage Banking
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common-sense underwriting and timely closings. We are actively seeking relationships
SEPTEMBER 2009 O
with productive mortgage teams and entrepreneurial mortgage professionals.
12
Rule #3
Be prepared to network with future
clients. Always give two business cards
to everyone you meet! I always found it
amazing that other people will pass out
your business cards for you.
A personal thank you
It is very important to remember to thank
the referring party. Keep them in the loop.
Remember this person thought enough of
you to refer you. This automatically qualifies them for a personal thank you.
The first choice is always by phone. A
simple: “Thank you for the referral, I
spoke with Mr. Smith today. I think I can
help him. I just wanted you to know
how much I appreciated your referral.
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CALL: Kelley Berkheiser at (443) 418-7213 or
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Let’s get together for coffee or lunch.”
Don’t leave them hanging as to whether
or not you ever contacted or spoke to
their referral.
Sometimes, it is difficult to reach someone. You can leave a brief message on
voicemail if available. “Hi, Joe, I received a
call from Mr. Smith. He said you referred
me to him. I just wanted to say thank you
for the referral and for thinking of me. I
hope you are doing well. Let’s get together
soon.” End of conversation.
You made the referring person aware
that you spoke to Mr. Smith and that
you appreciated the referral. I also follow up with a written thank you as well.
These are basic skills that have
worked and I believe will continue to
work, so won’t you try partnering and
falling back to basics?
Laura Lynn Burke has been selected from a
nationwide search to be featured in
Stepping Stones to Success, a highly successful book series. The book features bestselling authors Deepak Chopra (The Power
of Purpose), Jack Canfield (Chicken Soup
for the Soul), Dr. Denis Waitley (featured in
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(Networkolog) who are joined by other
well-known authors each offering time-tested strategies for success in frank and intimate interviews. Laura is also the CEO and
founder of Footprints International d/b/a
The Mortgage Institute, a training and consulting company designed with you in
mind. For more information, call (708)
692-6199 or e-mail llynn145@aol.com.
Visit author Laura Lynn
Burke’s
Web
site
at
www.lauralynnburke.com
where she arms readers with
the information to “Prepare today for
tomorrow’s changes to stay one step
ahead of the competition.”
The new administration, whether
you support it or not, is pumping a
record-shattering amount of money
into system to stimulate the economy.
Much of this will help the housing market. This will occur in the form of tax
incentives and more jobs available to
would-be homeowners.
So it is about time that we all quit
complaining and go to work doing what
we do best, serving our customers.
Appraisers too have been dealt a financial blow within the past few months, so
we are in the same boat. Most appraisers are more than willing to take a second look at an appraisal that has come
under question. We are not talking
merely about the appraisal validating
each and every loan application, but
also flawed appraisals. There is a proper way to challenge appraisers who do
sub-par work, and it is our responsibility to do it. For those properties that do
not qualify as collateral for a given loan,
then is it not proper to find another
deal and move on?
My glass is half full and not half
empty. I hope that yours is also.
Charlie W. Elliott Jr., MAI, SRA, is president of Elliott & Company Appraisers, a
national real estate appraisal company.
He can be reached at (800) 854-5889, email charlie@elliottco.com or visit his
company’s Web site, www.appraisalsanywhere.com.
news flash
to a review of thousands of mortgage
documents undertaken by the
Consumer Mortgage Audit Center
(CMAC). According to CMAC, a majority
of the violations tend to take the form
of missing paperwork, bad Good Faith
Estimates (GFEs), hidden and misrepresented payments, double-dipping brokers, and the lack of documentation of
income for borrowers.
“Every day, the Consumer Mortgage
Audit Center conducts comprehensive
audits of mortgage documentation,
and every day we find egregious and
occasionally intentional mortgage violations,” said Sylvia Alayon, vice president of operations for CMAC. “While not
all mortgage violations are necessarily
malicious acts on the part of financial
institutions, there are some basic areas
every consumer should look at before
signing a mortgage.”
CMAC is a due diligence and consulting company specializing in the field of
mortgage forensic research and analysis. CMAC boasts a highly specialized
team of mortgage experts who are also
members of the American College of
Forensic Examiners Institute and represent a combined experience of over 80
years in mortgage finance and law.
“Paperwork is never fun to deal
with, but there are ways homeowners
can tell if they’ve been victim to a
mortgage violation,” said Alayon.
“Comparing the HUD-1 document,
which buyers get at settlement to outline most costs, with the same lender’s
good faith estimate is a great first step.
If the figures on your HUD-1 and your
GFE look different, it may be time to
call an attorney.”
For more information, visit www.truthinaudits.com.
HOPE NOW reports
25 percent surge in
workouts in June
HOPE NOW, the private
sector alliance of mortgage servicers, investors,
mortgage insurers and non-profit counselors, announced that in June, the
mortgage lending industry helped
310,000 homeowners complete workout solutions to stay in their homes—a
25 percent increase over May.
In June, HOPE NOW members and
the mortgage lending industry modified
96,000 mortgages compared to 101,000
in May, a 5.1 percent drop and initiated
214,000 repayment plans up from
148,000 in May, a 44.9 percent increase.
Since January 2009, more than 1.5 million homeowners have been helped
through mortgage workout plans.
For a second straight month, HOPE
NOW’s participating servicers in June
reported a slight drop in modifications
and a significant increase (more than
40 percent) in repayment plans. This
increase is primarily attributed to servicer participation in the Obama
Administration’s Home Affordable
Modification program (HAMP).
“I am proud of the continued progress
made by HOPE NOW servicers and am
confident that they are aggressively and
proactively using HAMP, as well as other
successful foreclosure prevention programs, to help as many homeowners as
possible,” said Faith Schwartz, executive
director of the HOPE NOW Alliance. “We
continue to work with the Administration
on the successful implementation and
outcome of HAMP for at-risk homeowners. These efforts are in the best interest of
consumers as well as the U.S. economy
overall.”
There were 93,924 foreclosure sales
in June, an increase of more than 13
percent from the prior month. For the
first time since HOPE NOW began collecting data, prime foreclosure sales in
June outpaced subprime sales by a twoto-one margin. HOPE NOW survey data
suggests a peak in subprime foreclosure
sales occurred a year ago during the
second quarter of 2008. The largest
gain in reported prime loan foreclosure
sales occurred in the recently ended
second quarter of 2009 at 154,108.
For
more
information,
visit
www.hopenow.com.
Administration and
servicers commit to faster
relief via loan mods
Senior Obama Administration
officials recently met with top
executives from servicers participating in the Making
Home Affordable (MHA) loan modification program to discuss ways to improve
effectiveness and efficiency of the program. The meeting—led by Treasury
Assistant Secretary for Financial
Institutions Michael S. Barr, Treasury
Assistant Secretary for Financial Stability
Herb
Allison,
Federal
Housing
Administration (FHA) Commissioner
David Stevens and U.S. Department of
Housing & Urban Development (HUD)
Senior Advisor to the Secretary William
Apgar—addressed challenges to modifications, strategies for improvement,
and collective goals that the servicers
and Administration are committed to
reaching.
“With over 200,000 trial loan modifications already under way, we are on
track to meet our goals,” said Treasury
Secretary Tim Geithner. “Still, too many
homeowners are at risk of foreclosure
right now. This meeting was an opportunity to identify ways to accelerate the
program and bring relief faster.”
Servicers in attendance committed
to significantly increasing the rate at
which they are performing loan modifications. The Administration has estab-
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A Message From NAMB/WEST
2009 Committee Chair Joe Camarena
Saturday-Tuesday, December 5-8 • MGM Grand Hotel
NAMB/WEST will hold its third annual conference at the MGM Grand Hotel in Las
Vegas, Saturday-Tuesday, Dec. 5-8. As in the past, we anticipate a large turnout with
a slate of exciting speakers and programs. This year’s theme is “Today’s Changes for
Tomorrow’s Opportunities.”
There has never been a better opportunity in our mortgage industry to build
up the tool chest to secure our future businesses and further ensure the protection of consumers. Some of key highlights of the conference include:
SEPTEMBER 2009 O
O Face-to-face communication with hundreds of high quality brokers
O Lower registration fees
O Great low hotel rates
O Exhibit booth prices at $500 less than last year’s rate
O The best speakers in the mortgage market
O Lots of social networking
O And a fun, fun, fun conference!!!
14
sion to find out critical updates to NAMB’s lawsuits and other regulatory updates.
Join the panel of experts as they share updates on NAMB lawsuits, including
NAMB President Jim Pair, Past President and Government Affairs Committee Chair
Harry Dinham, Chief Executive Officer Roy DeLoach, and other key NAMB
Government Affairs team members.
11:00 a.m.-11:45 a.m.
The SAFE ACT, MDIA, HVCC, Red Flags and Other
Regulatory Updates
RESPA: New GFE and HUD-1, MDIA, HVCC, SAFE Act,
Red Flags...Now What?
This year, with all of the legislative and regulatory changes, an hour hardly seems like
enough time to cover all of the updates the rules governing the industry, but it will provide an opportunity to give an overview of what has happened and what you need to do
to make certain you understand the new regulations and how they affect
your business. This will be one of the most important and informationalpacked sessions of the NAMB/WEST! You will want to attend this session!
This year’s will be as exciting as it gets. We have a full list of nationJoin expert panelists including: Theresa C. Ballard, president of
ally-recognized speakers that will keep every one on top of their proBFO Solutions; Ken Perry, president of Broker Knowledge and Ginger
fession! This year’s speakers program will be different than in the past.
Bell, CEO of Go2Training for this session.
We have decided not to provide the continuing education (CE) curricuTheresa C. Ballard’s BFO Solutions Inc. is a compliance compalum since the Secure and Fair Enforcement for Mortgage Licensing Act
ny
offering compliance audits, post secondary closing audits, and
(SAFE Act) will be coming down the pipeline and will facilitate the
loan
delivery and loan guarantee services. Her professional experinational requirements. Our goal this year is to break down the mortence
spans 30-plus years in the mortgage banking industry, primagage industry training and development into three segments:
rily in operations, underwriting and secondary marketing.
Ballard’s experience includes quality control trainer for various
1. Mortgage Industry Regulatory Update Sessions
industry organizations, including AllRegs, the National Association
2. Sales and Marketing
“There has never
of Mortgage Brokers and the California Association of Mortgage
3. Social Media
been a better oppor- Brokers. Theresa works closely with state and federal auditing
tunity in our mortagencies and has acted as an advisor to several state and federal
gage industry to build agencies, including the Conference of State Banking Supervisors
(CSBS), the American Association of Residential Mortgage
up the tool chest to
Regulators (AARMR) and the Nationwide Mortgage Lending System
secure our future
& Registry (NMLS&R). Theresa’s most recent focus has been on the
Sunday, December 6
businesses and furdevelopment and implementation of quality control policies and
Regulatory update sessions
ther ensure the proprocedures for mortgage brokers, retail and wholesale lending
The year 2009 has been one of change and regulation and keeping up
with all of it is all quite confusing. That is why we have scheduled a full tection of consumers.” operations and several community banks, as well as the actual execution of quality control audits.
session to cover the topics that are affecting you most in your business.
Ken Perry is president/CEO of Broker Knowledge Group, a training and consulting
firm that specializes in all matters related to real estate and finance. Ken believes
9:00 a.m.-9:45 a.m.
education should be fun and has successfully taught thousands of people nationEconomic Update
wide, speaking to all facets of the real estate industry including real estate agents,
Dr. Ted Jones, Chief Economist, Stewart Title
Join Dr. Ted C. Jones Ph.D., senior vice president and chief economist for Stewart Title mortgage brokers, bankers, title and escrow agents, as well as lenders. He is viewed
Guaranty Company, as he addresses the state of our industry and the economy. Dr. as an expert on the national real estate market and current credit crisis, having been
Jones will provide information regarding his ongoing research and support of the eco- one of the few experts to accurately forecast this current real estate market, and
nomic and financial analysis of what is affecting the economy today. Jones earned a being one of the few who can deliver the information in a way most can understand.
Ginger Bell is CEO of Go2Training, a Web-based solution to locate, track and manPhD in finance with a minor in statistics and a master’s degree in land economics and
age
continuing education and training. Ginger has more than 20 years of experience
real estate from Texas A&M University. He holds a bachelor of science degree from
writing
and leading workshops in public speaking, leadership, customer service,
Colorado State University. You will want to be sure to attend this information session.
He is also the director of investor relations for Stewart Information Services Corporation. sales and continuing education. Ginger works with industry professionals, such as
Barry Habib, Todd Duncan, Edward Jamison Esq., Sue Woodard and wholesalers to
write and obtain state approval for continuing education courses.
10:00 a.m.-10:45 a.m.
NAMB WEST agenda at-a-glance
NAMB’s Regulatory & Legislative Panel
On Monday, Feb. 23, the National Association of Mortgage Brokers, with the support of Baker & Hostetler LLP, filed a lawsuit with the United States District Court
for the District of Columbia against the Federal Housing Finance Agency (FHFA)
Director James B. Lockhart over the controversial Home Valuation Code of Conduct
(HVCC) included in the appraisal agreements between the FHFA, Fannie Mae and
Freddie Mac (GSEs), and New York Attorney General Andrew Cuomo. Attend this ses-
1:00 p.m.-2:00 p.m.
HUD/RESPA Rollout
We have scheduled one of the key HUD representatives to present the HUD/RESPA
Rollout that will take place on Jan. 1, 2010. This is a must-attend event for all
mortgage professionals, and the session will detail how the new HUD RESPA form
will be used and processed.
2:15 p.m.-4:00 p.m.
Speed Dating Mortgage Style: Learn Who/What is
Available
Speed dating is a formalized matchmaking process whose purpose is to encourage
people to meet a large number of new people. Its origins are credited to Rabbi Yaacov
Deyo of Aish HaTorah, originally as a way to help Jewish singles meet and marry. The
first speed dating event took place at Pete’s Café in Beverly Hills in late 1998.
Supporters argue that speed dating saves time, as most people quickly decide if they
are romantically compatible and first impressions are often permanent. Join NAMB as
speed dating is matched with mortgage lending, providing a platform for you to meet
a wide selection of vendors who are “available” to help you in your business.
It’s really simple … 10 tables, 10 chairs, 10 min., 10 chances to meet the vendor
of your dreams … or at least one who may be able to help you with your business!
Move quickly from one table to the next to find out who will best fit what you are
looking for. Matches may include: Lenders, technology companies, or providers of
marketing or compliance tools. It’s a fun way to find out what is new out there.
Lenders will be available to discuss files too so bring your questions.
Fun, games and prizes will be included in this action-packed section. Be sure
to join in the fun and excitement and who knows … maybe you will find that
“perfect match.”
was created to perfect and refine business tools and practices that take a minimum
of effort or training, but that deliver significant, predictable results.
During a four-month study of nearly 1,000 industry professionals in 2008, the users
of TBWS’s Video Marketing Engine 2.0 showed a 67 percent increase in production over
a control group during the same period. One small change in how they stayed in contact with their databases, through video, made all the difference for these real estate
and mortgage professionals.
With version 3.0 due on the market in the fall of 2009 and TBWS’s newest product, Rate Alert, quickly becoming one of the most utilized and trusted rate monitoring services in the world, TBWS has moved from an interesting concept to a
proven success story in less than two years.
Exhibits and trade show
This year’s trade show is geared to drive in the affiliates and mortgage industry
partners. We have discounted the exhibit booths to make sure businesses across
the country can afford and come to the conference. Booth prices are $500 less
than last year and include a hotel room for two nights, advertisement in National
Mortgage Professional Magazine and special recognition at the reception at the
conclusion of the trade show.
Conference standards
Sunday, December 6
2:15 p.m.-4:00 p.m.
Double Your Profits Without Doubling Your Workload
Join Fred Arnold, president of American Family Funding and immediate past president of the California Association of Mortgage Brokers, as he leads this powerful
session on breakthrough business-building action steps and superior selling techniques that will position you to:
O Boost your business sales to the next level;
O Create sustainable business profits;
O Build your referral base;
O Create a sales machine and close sale after the sale;
O Put more money in your Pocket, and
O Much, much more!
It’s worth an hour of your time to find out what the top loan originators are
doing to create their success in this market.
Fred Arnold, throughout his 15 years in the mortgage industry, has held many
roles. His top producing team maintains a profitable and thriving loan origination
business, based 100 percent on referrals. While managing his mortgage team in
Southern California, Fred is also a highly sought-after speaker, trainer, writer and
consultant for the mortgage industry. Fred has his own financial radio show.
Monday, December 7
Everyone is a-twitter about Twitter, Facebook, Blogging and video. Questions run
the gamut from “What is it all about?” to “How do I use it for business?” Well, Mark
Madsen is the expert when it comes to social media! In this jam-packed session,
you will learn how to use these social media applications to:
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Be sure to attend this session and join Mark and his panel of experts who will
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11:00 a.m.-Noon
Using Video to Build your Business
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www.allREsolutions.com
It’s time to consider if you’re getting the service you need…
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O SEPTEMBER 2009
Join Frank Garay, co-creator of Think Big Work Small, as he shares the secrets to successfully utilizing video and the Internet to grow your business.
Thinkbigworksmall.com (TBWS) was founded in 2007 by a group of successful real
estate and mortgage industry entrepreneurs. Born in the most battered market in the
real estate and mortgage industry’s history, Thinkbigworksmall.com was conceived
after decades of observing how the most successful professionals always seem to work
smarter not harder. It was the little things they did that made all the difference. TBWS
World Headquarters
781 Beta Dr. Suite I • Mayfield Village, OH 44143
Office: 440-484-2290 • Toll Free: 800-398-6163
Fax: 440-605-0210 • Toll Free Fax: 866-567-4545
O Network with others in your industry or community
O Stay connected to customers and prospects
O Monitor what is being said about your company, products, services, industry
and competition
O Gather valuable feedback about products or services
O Raise awareness about the company, product or service
O Find answers and get advice
O Offer proactive customer service
O Promote events, products and services
O Drive traffic to your Web site or blog
O Share helpful content such as articles or blog posts
O Generate leads
Joe Camarena is a member of the NAMB Board of Directors and chairman of the
NAMB/WEST 2009 Committee. Joe is president of The Mortgage Source in Portland,
Ore. and can be reached by phone at (503) 443-1060 or e-mail jcamarena2k@cs.com.
9:00 a.m.-10:50 a.m.
Social Media: How to use Facebook, Twitter and
Blogging to Build Your Business
We are going to continue to have the standard activities at the conference as in
the past. However, we will bring back the national committee meetings during
the first two days of the conference. In addition, we are going to have an Opening
Reception on Saturday, Dec. 5 to bring our fellow mortgage friends together and
provide some social entertainment before we start the training and development.
We will have the NAMB Delegate Council Meeting and Board Meeting towards the
end of the conference so everyone can concentrate on the rest of the conference!
As in the past, our goal is to bring you a mortgage industry conference that will
give you the tools to keep you updated in our ever-changing industry and allowing the networking opportunities we welcome to stay in touch with our fellow
friends. We are offering lower registration fees, great hotel rates and a slate of
speakers and learning opportunities for everyone who attends. Oh, and do not
forget about those “after hours” parties that will be lining up by the time you
unload your suitcases! We hope to see you in Vegas this December!
15
Saturday-Tuesday, December 5-8, 2009
MGM Grand Hotel • Las Vegas
Don’t miss out
on a great lineup
of education and
networking
events.
Scheduled Sessions
SEPTEMBER 2009 O
Overview of
schedule of events
16
• Economic Update by Dr. Ted Jones, Director of
Investor Relations, Stewart Information Services
Corporation
• Update from NAMB’s Government Affairs Team
• SAFE Act, MDIA, HVCC, Red Flags and Other
Regulatory Updates Panel
Saturday, December 5
NAMB/WEST Opening Reception
• FHA the Best and Fastest Mortgage Finance Option for
Your Clients Today, presented by Nancy West of FHA
Sunday, December 6
Speakers, Education and Committee Meetings
• Speed Dating Mortgage Style – Learn who/what is
available
Monday, December 7
Speakers in the Morning/Exhibit Hall in the
Afternoon
Tuesday, December 8
Delegate Council Meeting in the Morning/NAMB
Board Meeting in the Afternoon
• Double Your Profits Without Doubling Your Workload,
presented by Fred Arnold
• Social Media: How to Use Facebook, Twitter &
Blogging to Build Your Business, presented
by Mark Madsen
Exhibitors: Enjoy face-to-face
communication with hundreds of
high quality brokers
New bonuses for NAMB/WEST exhbitors:
• Free hotel room at the MGM Grand for two nights
• Free ad in National Mortgage Professional Magazine
• Free Monday Exhibitor Recognition Reception
• Opportunity to participate in “Speed Dating Mortgage
Style” roundtables for all exhibiting companies
• Booth prices $500 less than last year
• Using Video to Build Your Business, presented by
Frank Garay, Co-Creator of Think Big Work Small
Visit NAMBWEST.com for more details.
Make sure you book your hotel before
November 10th to take advantage of the fabulous
group rates offered at MGM Grand Hotel.
FTC’s New Leadership Making
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O SEPTEMBER 2009
While Congress is debating the future of of dollars by scammers who are exploitthe proposed centralized federal ing the economic downturn.” The FTC
enforcement agency for the financial also recently announced two major conservices sector, one thing regarding sumer protection enforcement actions:
enforcement has already been estab- One involving a nationwide crackdown
lished: With or without the proposed against scammers and the other resultConsumer Financial Protection Agency ing in a $3.7 million penalty.
(CFPA), the Federal Trade Commission
In one of the actions, the FTC and
(FTC) is aggressively pursuing violations. Equifax subsidiary TALX Corporation,
The FTC’s new Director for the Bureau has agreed to settle charges that it vioof Consumer Protection is David lated federal law by failing to provide
Vladeck, and in a little more than one certain disclosures to users of their conmonth on the job, Vladeck’s actions have sumer reports and to entities that promade some strong statevide information for conments about consumer
sumer reports. The proprotection. In his first 45
posed settlement requires
days, there has been the
TALX to pay the governcreation of a task force to
ment a $350,000 civil
help repair consumer
penalty and bars future
credit and prevent quesviolations.
tionable lending practices,
TALX sells income and
as well as multiple settleemployment
history
ments and litigations filed,
information about conmany in the financial servsumers to lenders, preices sector. This confirms
employment screeners,
his claim that the first priand others for use in
ority at the agency will be
determining their eligibil“If these early
dealing with the rise of
ity for credit, employannouncements are
consumer financial fraud
ment or other purposes,
any
indication,
the
as a result of the economwhich makes it a conFTC’s new Director
ic downturn.
sumer reporting agency
of Consumer
On July 1, Director
subject to the Fair Credit
Protection Vladeck
Vladeck used his first
Reporting Act (FCRA),
press conference as head may be just what the
according to the FTC. The
of
the
Bureau
of consumer watchdogs
company allegedly violatwere looking for.”
Consumer Protection to
ed the FCRA by not proannounce a nationwide,
viding the “Notice to
joint federal/state law enforcement ini- Users of Consumer Reports: Obligations
tiative against scammers attempting to of Users Under the FCRA,” which notitake advantage of consumers made vul- fies users of consumer reports of their
nerable by the poor economy. Thus far, statutory obligations, including notify“Operation Short Change” includes 15 ing individuals if the user takes adverse
FTC cases, 44 law enforcement actions action against them based on their conby the Department of Justice, and sumer report. The company also failed
actions by at least 13 states and the to provide the “Notice to Furnishers of
District of Columbia. In its cases, the Information: Obligations of Furnishers
FTC alleged that defendants made false Under the FCRA,” which notifies furnishand unsubstantiated claims via the ers—entities that furnish information
Internet, infomercials, telemarketing, for consumer reports—of their obligarobocalls or print advertisements to tions to provide accurate information,
market get-rich-quick and other similar correct and update inaccurate informaschemes. Several of these schemes tar- tion, and reinvestigate consumer disgeted consumers with mortgage- and putes.
credit-related problems.
Also in July, the FTC and California
At the press conference, Director Attorney
General
Jerry
Brown,
Vladeck noted that “thousands of peocontinued on page 20
ple have been swindled out of millions
17
SEPTEMBER 2009 O
Thomas R. Sirico, Executive Business Director
of mortgageNOW inc.
18
Each month, National Mortgage
Professional Magazine will focus on one
of the industry’s top players in our
“Mortgage Professional of the Month”
feature. Our readers are encouraged to
contact us by e-mail at newsroom@nmpmediacorp.com for consideration in
being featured in a future “Mortgage
Professional of the Month” column.
This month, we had a chance to chat
with Thomas R. Sirico, executive business
director of mortgageNOW inc., Red Bank,
N.J. Born in Brooklyn, N.Y., Tom established
Lindenhurst, N.Y.-based Mortgageline
Financial Corporation in 1989, quickly
becoming one of the New York area’s top
lenders. In 2000, he opened Amerihome
Mortgage Corporation. Amerihome became
a top lender for new construction sites in the
New York area. Sirico’s experience and contacts helped him develop a vast branch network for HCI Mortgage Corporation, producing more than $500 million in sales.
Currently with mortgageNOW, Tom is part
of an executive team overseeing the expansion of sales. As a seasoned mortgage industry veteran with 20-plus years invested in
the industry, he has been responsible for
more than $1 billion in sales over his career.
He currently resides in Holmdel, N.J. with
his wife, Linda, and son, Thomas Michael.
What attracted you to the mortgage
industry?
Back in the late 1980s, right after the crash
of ‘87, I was introduced to the mortgage
industry by an attorney friend of mine. At
the time, I was operating a men’s and
women’s clothing store in Bensonhurst,
Brooklyn, a borough of New York. Owning
a women’s store during the disco era as a
20-year-old had its perks. One day, I will
put it all down on paper, and I do believe
it will make a great sitcom. Anyway,
through the years, I had made quite a
name for myself dressing the ladies and
the men. The many contacts I made
served me well as I transitioned into the
business. It was pretty surprising to everyone when I started writing mortgages as
my clothing business was doing quite well.
Then came October of 1987.
I had speculated in real estate, so I was
familiar with the mortgage process. I
started working at a Long Island company called Mortgage Plus Bankers. Within
in the first year, I was closing 20 loans
each month with an assistant. I was
hooked. In Staten Island, I worked primarily with builders. I would sit on new construction sites on the weekends and qualify people as they walked through the
model. I loved the interaction with help-
ing people buy a home. I would make
appointments on the spot to do applications at their homes, sometimes I’d get
three applications done per night. One
night, I took my wife with me on an
evening of applications because she didn’t
believe I was at people’s houses until midnight. When I came down to the car after
the third appointment at 12:30 a.m., with
tears in her eyes, she said, “I will never
doubt you again.” Having her support
over the years has been invaluable.
Most of my business was comprised of
purchase transactions. I always went to
my closings. I thought, what better place
to network than at your own closings?
You have the buyer and seller, two attorneys, a title closer, and a selling and listing real estate agent all at the same
table! I quickly earned a reputation as a
reliable and trustworthy loan officer. As
my business grew, so did my enthusiasm.
So, I opened Mortgageline Financial
Corporation with a co-worker. We knew
what it took to be successful, and I had a
book of business ready to go. We got off
to a great start and never looked back.
Mortgageline became one of the premier
mortgage bankers in New York.
What keeps you in the business
through decades of good and bad
markets?
Answering that question at this moment
in time makes one pause before they
answer. I like searching out opportunities and building relationships. I believe
the challenges in our lives make us the
people we are today. The decisions we
make influence the quality of the lives
we lead. That being said, I enjoy the
relationships I have established and
issues I learn about and deal with on a
daily basis. Like every industry today,
we need to adapt, improvise and overcome. Personally, I have benefited in
helping people through these challenging times. In this industry, when business is good, it’s great! When it’s bad,
let’s just say it’s challenging.
We know there are a lot of independent mortgage brokers considering joining a larger firm like
mortgageNOW inc. What are some
of the factors that should go into
making that decision?
Mortgage brokers face a lot of challenges now and in the future.
Regulation will continue to direct them
on how to conduct business, restrict
access to capital and ultimately affect
profit margins. Aligning themselves
with a fully-certified direct lender, it my
opinion, is the best way proceed. For
instance, we are a Federal Housing
Administration (FHA) Direct Endorsed
Lender, which allows us to underwrite
all files in-house and has enabled us to
have some of the fastest turn times in
the industry. We at mortgageNOW
know that in this market, the speed
associated with closing is essential. We
are confident that we will increase
one’s business by at least 50 percent
based on our model. That is evidenced
that most managers earn well over six
figures at mortgageNOW. As a mortgage
banker, we are well-versed on all of the
new regulations being presented to the
industry. Compliance, cutting-edge
technology, and access to investors are
all elements that are in place to support the transition from broker to
banker.
“We at mortgageNOW know
that, in this market, the speed
associated with closing
is essential.”
How has the recent Home Valuation
Code of Conduct (HVCC) regulations
impacted business at mortgage NOW?
This regulation has certainly caused
some controversy, but adapt we must.
We have currently adopted the changes
in a compliant and seamless manner.
Our COO has implemented innovative
policies to minimize the delays due to
the disclosure rules, along with each
investor requirement, it has been challenging. But we feel our procedures
have met all regulatory requirements
and without interrupting our course of
daily operations to close loans.
How has mortgageNOW addressed the
decline in warehouse line providers?
I believe this has been a challenge for
everyone in the industry … some more
than others. We fortunately have always
maintained an excellent track record and
have maintained compliance with our
providers. So much so, mortgageNOW
has added capacity which, in turn, has
increased our volume on average of 75
percent month-over-month.
How does mortgageNOW view the
future of mortgage banking?
We believe that some changes were needed for the most part. We have to remember that there were some excesses that the
market took advantage of. The corrections
have been made and all signs point that
the worst is behind us. FHA will continue
to provide the financing the country
needs as exampled by the government’s
commitment of $350 billion to the program over the next five years. As a direct
lender of these funds and one of the top
closing FHA lenders in the country, we are
moving forward with some exciting additions that will increase our business and
make us an attractive option for any mortgage professional who wishes to attain
success in the industry.
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First, I would like to welcome you to The
Secondary Market Overview, designed
not only to keep you informed with
regard to what is happening in the markets, but more importantly, how it
relates to loan officer production within
our industry. What good is being knowledgeable about what is happening if you
don’t know how it will affect your business? To that end, we will try to make
this message as non-technical as possible. My good friend, Eric Holloman, a
secondary expert and chief executive
officer of RateLink, will advise me on the
technical aspects where necessary.
I have been writing about the mortgage industry consistently for more than
five years now and have been teaching
loan officers how to become an expert
in all areas, including the secondary
markets for 30-plus years. The secondary market led the real estate boom earlier this decade. It also led the collapse
of real estate. And that is the message I
want to give you in this opening column—what caused the issues we faced
and where might these issues lead us in
the future?
With regard to the future, I asked Eric
Holloman what are the most pressing
issues that could have a major impact
upon the secondary market in the coming months. Eric, pointed out three such
issues that we will be following closely—
O The fate of Fannie Mae and Freddie
Mac. First, Moody’s Investors Service
predicted the “winding down” of the
agencies. Then, the Mortgage Bankers
Association (MBA) called for the agencies to be replaced by private “cooperatives.” Of course, the major members of the MBA have always competed with the agencies.
O Will the industry be able to replace
the warehouse capacity it has lost?
The credit and banking crises has
crippled the industry in this regard.
Will the government provide a solution through Ginnie Mae or another
entity?
O As the real estate market begins its
recovery, will the secondary market,
and thus lenders, be able to loosen
credit standards somewhat. We
know we are not going back to the
“fog the mirror” days, but it would
be good for lenders not to require
pristine credit in order to purchase a
home for anything but FHA.
What happened to cause these
things? Many trace the rise and fall of
the real estate debacle to the subprime industry. Actually, it goes back
further than that—much further. I
could trace it back to the Great
Depression, but I will start with a more
contemporary event. The Savings &
Loan (S&L) Crisis of the late 1980s set
the stage for what happened 20 years
later. How? Before the mid-1980s, the
S&L industry was the major player in
real estate lending. In the mid-1980s,
we had a real estate boom and a refinance boom driven by low rates. Sound
familiar? Of course, back then, low
rates were defined as eight percent! A
little perspective … earlier that
decade, rates rose to above 15 percent.
The bond market collapsed in March of
1987 and rates went back to double
digits overnight. After overbuilding, we
had a collapse in the real estate market. To exacerbate the problem, most
S&L institutions held loans in their
portfolio. There was little guidance
from the feds on how to value these
mortgages. Back then, we charged
points on all mortgages, and it was not
unusual for the S&L to book the points
as income and put these loans, many
of which were adjustable, on the
“books” at 100 percent of the value of
the mortgage.
We now know what happens to the
value of mortgages that are held by an
investor when rates go up. The values
go down. Defaults increased and that
also lowered the value of the holdings
of the S&Ls. Many of the buildings
defaulting were commercial. Perhaps
an S&L had a $10 million loss on a
large building. When that S&L needed
to raise assets, they turned to sell
mortgages in the portfolio, but when
these were assessed, it turned out that
they were tens of millions of dollars
lower than their “booked” value. So, a
$10 million loss all of a sudden turned
O SEPTEMBER 2009
$27*
Where we have been and where are we heading
What tools must a mortgage originator have to compete in today’s competitive marketplace?
First and foremost, one must have a rich
knowledge of the business. Understanding
what service you provide is paramount.
Respecting your position as either a mortgage broker or mortgage banker dictates
that you know what you are talking about.
As you can see, you have struck a nerve
with me. As an originator, you are responsible for the largest investment in one’s
life, a house. Giving our branches the support they need is a top priority for us. For
instance, our LoanX system helps our orig-
“As an originator, you are
responsible for the largest
investment in one’s life, a house.
Representing and explaining the
process properly is an obligation
not to be taken lightly.”
Secondary Leads the Trends (Part I)
As someone who manages a large network of branches, where do you see
your branch managers and their loan
officers getting their business from?
Originations vary on a number of conditions, location, the economy, and of
course, rates. Currently, we are happy
to see the media has noticed the bottoming out of home prices and low
interests rates. This has sprung a resurgence in purchase business that is primarily directed toward mortgageNOW’s
branches through our vast real estate
network. With the many short sales
occurring, it is not unusual that we can
close that transaction, as it is time-sensitive, generally within a week, much to
the delight of our real estate agents. We
have increased our referral purchase
business 85 percent, we believe by our
“speed to close” process.
Our business model also provides our
branches with some of the best leads in
the business, as we were recognized by
LendingTree and previewed in National
Mortgage Professional Magazine. We utilize a direct dialing service allowing live
transfer contact to magnify the volume of
calls that the branches can make. All
leads are entered in our LoanX engine,
which allows easy access to track leads
and manage their pipelines in an efficient and organized manner. It’s all part
of our state-of-the-art technology that
has set’s us apart from our competition.
inators provide service and information to
the consumer in a quick and concise manner. It will price, pre-approve, track and
upload conditions on each loan supplying
unsurpassed customer service. These systems allow us to close our loans, on average, of five to seven days, making our customers happy and increasing the referral
business of our branches. I am proud to
say that our loan officers are some of the
highest paid originators in the industry. We
are also very cognizant of the fact that presenting and explaining the process properly is an obligation not to be taken lightly. I
am proud to say that mortgageNOW’s
interview and training process has helped
us become successful in this aspect.
19
2. Income tax returns
3. Payroll receipts
4. Records from banks and financial
institutions
5. Other supporting, verifiable documentation
C. Assure that prepayment penalties,
where permitted by law, meet all
these criteria:
1. The amount of the periodic payment
of principal or interest (or both) does not
change during the loan’s first four years
2. The penalty does not apply after the
loan’s first two years
3. The prepayment penalty does not
result from a refinancing by the same
creditor (or an affiliate of the creditor)
issue that you’d like to see addressed in
the Regulatory Compliance Outlook
Column? If so, e-mail your issue or concern to Jonathan Foxx at jfoxx@lenderscompliancegroup.com.
Jonathan Foxx, former chief compliance
officer for two of the country’s top publicly-traded residential mortgage loan
originators, is the president and managing director of Lenders Compliance
Group, a mortgage risk management
firm devoted to providing regulatory
compliance advice and counsel to the
mortgage industry. He may be contacted
at (516) 442-3456 or by e-mail at
jfoxx@lenderscompliancegroup.com.
Footnotes
New Category of Sub-Prime
Mortgage Loans
Effective: October 1, 2009
O On and after Thursday, Oct. 1, 2009,
creditors will be required to implement new rules, pursuant to revisions to Regulation Z issued by the
Federal Reserve Board (FRB) on July
14, 2008.1
O Regulation Z (12 CFR 226.35) defines
a higher-priced mortgage loan as a
consumer credit transaction secured
by the consumer’s principal dwelling
with an annual percentage rate (APR)
exceeding a certain percentage.2
SEPTEMBER 2009 O
O Higher-priced mortgage loans
include closed-end purchase money,
refinancing and home equity loans.
20
O Exclusions: Home equity lines of
credit (HELOCs), reverse mortgages,
construction-only loans and bridge
loans with a term of no more than
12 months.
Average prime offer rate
O The classification as a higher-priced
mortgage loan is based on the following:
O First liens: The APR exceeds the average prime offer rate for a comparable transaction as of the rate-lock
date by 1.5 percent or more.
O Subordinate liens: The APR exceeds
the average prime offer rate for a
comparable transaction as of the
rate-lock date by 3.5 percent or
more.
O On a weekly basis, the FRB will publish
the average prime offer rate for a wide
range of transaction types on its
Website (www.federalreserve.gov).
Initially, the FRB will base these rates on
Freddie Mac’s Primary Mortgage Market
Survey (PMMS), which contains weekly
average rates and points offered by a
representative sample of creditors to
prime borrowers seeking first-lien, conventional, conforming mortgages who
D. Establish escrow accounts:
1. Prior to loan consummation (to collect for property taxes and property
insurance)
2. With a provision to allow the borrower to opt out after the first year by giving written notice to the creditor, if the
creditor is offering an opt out provision
(although the creditor is not actually
required to offer an opt out provision)
would have at least 20 percent equity.
You can view the PMMS at: www.fred- Submit your questions …
diemac.com/dlink/html/PMMS/dis- Do you have a regulatory compliance
play/PMMSOutputYr.jsp.
Four key consumer
protections
O Borrower ability: Lenders must take a
borrower’s ability to repay the loan
from income and assets other than the
home’s value into account when making the loan. A lender complies, in part,
by assessing repayment ability based
on the highest scheduled payment in
the first seven years of the loan. A borrower does not need to demonstrate a
“pattern or practice,” in order to show
that a lender violated this prohibition.
O Verification of income and assets:
Lenders must verify the income and
assets they rely upon to determine
repayment ability.
O Prepayment penalty: Prepayment
penalties are prohibited if the mortgage payments can change in the first
four years; and, for other higher-priced
loans, a prepayment penalty period
cannot last for more than two years.
O Escrow accounts: Lenders must establish escrow accounts for property taxes
and homeowner’s insurance for all
first-lien mortgage loans.
Action steps
Develop policies and procedures to:
A. Determine a borrower’s:
1. Current and expected income
2. Employment
3. Assets (other than the collateral)
4. Current obligations (i.e., credit, mortgage related payments)
B. Determine a borrower’s income by
utilizing:
1. IRS Form W-2 and other income
reporting forms
ftc’s new leadership
1—The FRB has delayed the mandatory
compliance date for escrows for covered
loans secured by site-built homes until
April 1, 2010 and until Oct. 1, 2010 for
covered loans secured by manufactured
housing.
2—I have written extensively on this in
several Advisory Bulletins for our
clients. These can be found in the
Archive of Lenders Compliance Group at
www.lenderscompliancegroup.com.
See, inter alia, “FRB Finalizes Revision
to Regulation Z (TILA),” 07/28/08.
announced “Operation Loan Lies,” a
coordinated national law enforcement
effort to crack down on mortgage modification scams. The operation involves
189 actions by 25 federal and state
agencies against defendants who
deceptively marketed foreclosure rescue and mortgage modification services. The FTC actions, which affect consumers throughout the nation, were
announced in southern California,
where the scams originated.
“These con artists see the high foreclosure rates as an opportunity to prey
on people in distress,” FTC Chairman
Jon Leibowitz stated in the release.
“They promise to rescue homeowners in
troubled financial waters, but after they
take their money, they throw them an
anchor instead of a lifeline. People facing foreclosure should avoid any company or individual that requires a fee in
advance, guarantees to stop a foreclosure or modify a loan, or advises the
homeowner to stop paying the mortgage company.”
The FTC announced four other lawsuits, bringing the number of mortgage
foreclosure rescue and loan modification scam cases the Commission has
brought to 14 since April. Twenty-three
state attorneys general and other agencies are participating in the operation,
taking action against 178 companies
engaged in these types of deception.
To say Director Vladeck has hit the
ground running is putting it lightly! The
new director was named to the position
after a handful of consumer watchdog
groups called for FTC Chairman Leibowitz
to appoint someone with “a track record
as a genuine champion of consumer
rights.” Prior to being named to the FTC
post Vladeck was co-director of
Georgetown Law Center’s Institute for
Public Representation, a program for civil
liberties, open government and regulatory
litigation. Prior to his time at Georgetown
Law, he spent nearly 30 years with the
Public Citizen Litigation Group, a national,
non-profit consumer advocacy organization that represents consumer interests in
Congress, the executive branch and the
courts. Vladeck has argued a number of
First Amendment and civil rights cases
before the Supreme Court, and more than
60 cases before the Federal Courts of
Appeal and State Courts of Last Resort.
Let these actions serve as notice to
mortgage originators about being in
compliance with Federal laws. If these
early announcements are any indication, the FTC’s new Director of Consumer
Protection Vladeck may be just what the
consumer watchdogs were looking for.
Terry W. Clemans is the executive director
of the National Credit Reporting
Association Inc. (NCRA). He may be
reached at (630) 539-1525 or e-mail tclemans@ncrainc.org.
Visit the National Credit
Reporting Association Inc.
(NCRA) on the Web at
www.ncrainc.org.
news flash
The Mortgage Bankers
Association (MBA) has
released its mid-year ranking of commercial and multifamily mortcontinued on page 22
Why some Mortgage Professionals fail
in Credit Repair while others
Make Serious Money
Mortgage Professionals make money in credit repair while getting borrowers Mortgage Ready!
You don’t need to be a credit expert to they couldn’t close before due to bad credit! It
means more loans and more revenue for my loan
start your own Credit Repair business
Fortunately, with HTDI Financial’s Credit Services Organization (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 monitor their progress.
You don’t have to spend tens of thousands of
dollars for start-up costs for your own Credit
Repair Company
Once you are set up in our system, you will get access
to software and tools that HTDI has spent over $1 million 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 company 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 position 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 refinanced 8 of them and helped 6 buy houses that
would have never qualified with the new guidelines. 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 deals
CLOSED!
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
officers. Even better than that, it is very rewarding 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 booming
and shows no signs of slowing
The credit industry, as a whole, is one of the most powerful and profitable industries in existence. With
loans, insurance and even employment taken into consideration individuals’ credit picture, the credit industry is getting bigger every day.
Inside the credit industry, Credit Services is helping by
assisting consumers with getting back on track by removing 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 experience, I can honestly say the success rate is
100% and client satisfaction is through the roof.
All of my clients have seen significant improvements, and some have experienced breathtaking
jumps in their credit scores, even on the first
round!
From Day One you can be sure your “back office” (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, collect 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 investment of money. How many opportunities like this
exist these days? What you must invest is your time
– SELL, SELL, SELL & SELL some more! Ultimately, what you are selling is the professionalism
of HTDI, which is why this really rocks as a business opportunity.”
Industry Leading Results
46.95%
20.44%
17.32%
14.21%
Round 1 Round 2 Round 3 Round 4
We average one of the highest fix/deletion rates in the industry 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 Credit
Repair, be VERY CAREFUL
First you have “Fair Credit Reporting Act” (FCRA). The
FCRA holds credit bureaus and creditors to their reporting 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 ensure 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 comply 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.
FREE
demo available
www.startacreditrepaircompany.com
There is only one step you need to take;
visit www.startacreditrepaircompany.com or
call us at 877-877-4834 option 5.
O SEPTEMBER 2009
The Commercial Mortgage
Securities Association
(CMSA) has issued a
white paper on the White House’s overall
regulatory reform proposals, emphasizing that the government’s financial
recovery and reform efforts should
maintain a consistent view towards
addressing the unique challenges facing the $3.5 trillion commercial mortgage market.
“CMSA continues to fully support
policymaker efforts to help restore liquidity in the CMBS [commercial mortgage-backed securities] and broader
commercial real estate market and, at
the same time, hopes that any financial
reform efforts put forth do not distract
from getting credit flowing again for
MBA report: Wells
Fargo/Wachovia tops
commercial/multifamily
servicers
CMSA issues white
paper on Obama
Administration’s
regulatory reform plan
the broader market economy,” said
Patrick Sargent, president of CMSA.
The trade group’s white paper underscores several distinctions between
CMBS and other asset-backed securities
markets, both relative to the structure
of the securities and the underlying collateral, as well as the type and sophistication of the borrowers themselves. The
white paper also recommends that any
Administration financial reform proposals should be customized to reflect
some of these distinctions.
“The new and unprecedented finan-
originators and sponsors, the elimination
of the immediate recognition of “Gain on
Sale” by originators for a securitization,
ratings differentiation, ABS issuers to disclose loan level data, and a prohibition on
the hedging of the retained risk portion.
For more information, visit www.cmsaglobal.org.
lished a goal of reaching 500,000 trial
modifications begun by Nov. 1, 2009.
“I am confident that the best practices shared today, combined with
more transparent reporting methods,
better communication among all parties, and a strong commitment from
servicers, will ensure that we can ramp
up the MHA program’s pace to meet
these ambitious goals,” said HUD
Secretary Shaun Donovan.
Administration officials detailed
their plans to take three important
steps to improve the program’s performance. First, to begin publicly
reporting results under the program
based on servicer-specific performance.
This will include the number of trial
modification offers each servicer has
extended to eligible borrowers, the
number of trial plans that are underway, the number of final modifications,
and eventually, the long term success of
those modifications.
Second, to work with servicers to set
more exacting operational metrics to
measure the performance of the program, such as average borrower wait
time for inbound borrower inquiries,
the completeness and accuracy of
information provided applicants, document handling, and response time for
completed applications.
Third, in order to minimize the likelihood that borrower applications are
overlooked or that applicants are inadvertently denied a modification, the
Administration has also asked Freddie
Mac, in its role as compliance agent, to
develop a “second look” process pursuant to which Freddie Mac will audit a
sample of MHA modification applications that have been declined. Freddie
Mac will coordinate with servicers to
address specific cases that arise and to
address general operational weaknesses where errors prove more systematic.
For more information, visit www.makinghomeaffordable.gov.
cial regulatory reform proposal would
undoubtedly change the nature of all
securitized credit markets at the heart
of the Financial Stability Plan,” CMSA’s
paper stated. “At a time when policymakers hope to restart the CMBS market, certain aspects of such proposal
could have the opposite and unintended result of stalling recovery efforts by
making lenders less willing or able to
extend loans and investors less willing
or able to buy CMBS bonds—two critical components to the flow of credit in
the commercial market.”
In the white paper, CMSA describes the
five specific issues it believes the Obama
Administration should customize to reflect
the unique nature of the commercial market, including: a five percent retention by
21
SEPTEMBER 2009 O
news flash
22
gage servicers as of June 30, 2009.
Topping the list of firms is Wells
Fargo/Wachovia Bank with $476.2 billion
in U.S. master and primary servicing, followed by PNC Real Estate/Midland Loan
Services with $308.5 billion, Capmark
Finance Inc. with $248.7 billion,
KeyBank Real Estate Capital with $133.1
billion, Bank of America with $132.2 billion, and GEMSA Loan Services LP with
$104.8 billion.
A primary servicer is generally
responsible for collecting loan payments from borrowers, performing
property inspections and other property-related activities. A master servicer
typically serves in a fiduciary capacity
and is generally responsible for collecting cash and data from primary servicers and then providing that cash and
data, through trustees, to investors.
Unless otherwise noted, MBA tabulations that combine different roles do
not double-count loans for which a single servicer performs multiple roles.
Wells
Fargo/Wachovia
Bank,
PNC/Midland, Capmark, and Bank of
America are the largest master and primary servicers of commercial/multifamily loans in the U.S. CMBS, CDO and other
ABS; GEMSA Loan Services, Prudential
Asset Resources, PNC/Midland, and
Northwestern Mutual are the largest servicers for life companies; PNC/Midland,
Wells Fargo/Wachovia Bank, Deutsche
Bank, and Capmark are the largest
Fannie Mae/Freddie Mac servicers.
JPMorgan Chase Bank ranks as the
top master and primary servicer of
commercial bank and savings institution loans; GEMSA the top credit company, pension funds, REITs and investment funds servicer; PNC/Midland the
top Federal Housing Administration
(FHA) and Ginnie Mae servicer; Wells
Fargo/Wachovia the top for mortgages
in warehouse facilities; and Capmark
the top for other investor type loans.
The MBA survey also collected
servicing volumes for loans on commercial/multifamily properties located outside the United States. Hatfield
Philips International ranks as the
largest master and primary servicer
of non-U.S. commercial/multifamily
mortgages, followed by Deutsche
Bank and Capmark.
Obama Administration
releases first loan mod
progress report
The Obama Administration
has released its first monthly
Servicer Performance Report
detailing the progress to
date of the Making Home
Affordable (MHA) loan modification
program. The purpose of the report is
to document the number of struggling
homeowners already helped under the
program, provide information on ser-
vicer performance and expand transparency around the initiative.
On Feb.18, the Obama Administration
announced its comprehensive plan to
stabilize the U.S. housing market. Two
weeks later, the Administration published detailed program guidelines and
authorized servicers to begin modifications immediately. MHA provides $75 billion for sustainable mortgage modifications through the Home Affordable
Modification Program (HAMP).
MHA has made rapid progress in a
few short months. Servicers covering
more than 85 percent of loans in the
country are already modifying loans
under the program. More than 400,000
modification offers have been extended
and more than 230,000 trial modifications have begun. This pace of modifications puts the program on track to
offer assistance to up to three to four
million homeowners over the next
three years.
The report discloses performance
on a servicer-by-servicer basis in order
to increase transparency for participating institutions. The data show
that servicer performance has been
uneven. The Administration has asked
servicers to ramp up implementation
to a cumulative 500,000 trial modifications started by Nov. 1, 2009. This
would more than double in three
months the number of trial modifications started in the first five months of
the program.
The Administration is taking additional steps to improve performance.
On July 9, Treasury Secretary Tim
Geithner and U.S. Housing and Urban
Development (HUD) Secretary Shaun
Donovan wrote the CEOs of participating servicers calling upon them to
redouble their efforts to increase
staffing, improve borrower response
times and streamline the application
process. Senior Administration officials discussed the importance of
these steps in a face-to-face meeting
with servicer executives on July 28.
The Administration will develop
more exacting metrics to measure the
quality of borrower experience, such
as average borrower wait time for
inbound inquiries, completeness and
accuracy of information provided
applicants, and response time for
completed applications. As an additional protection for borrowers, the
Administration has asked the program compliance agent, Freddie Mac,
to develop a “second look” process to
audit MHA modification applications
that have been declined on an ongoing basis.
The Servicer Performance Report is available online at www.treas.gov/press/releases/docs/MHA_public_report.pdf.
For
more
information,
visit
www.treas.gov.
O SEPTEMBER 2009
23
SEPTEMBER 2009 O
24
We are about to get a new federal
agency. Historically speaking, federal
agencies come into existence infrequently. A recent agency, the Financial
Crimes Enforcement Network (FinCEN),
was founded in 1990. Yet, the Federal
Aviation Administration (FAA) was
founded in 1958, the Food and Drug
Administration (FDA) came into existence in 1937, and the Federal Reserve
in 1913. The Federal Deposit Insurance
Corporation (FDIC) was founded 76
years ago. Often, federal agencies are
founded as a reaction to, rather than
in anticipation of, a crisis. Regulation
follows where the supposedly unpredictable has happened. But there is a
kind of arrogance about our ability to
predict, given our proclivity to believe
narratives, basing our actions on retrospective considerations, or relying
solely on precedent to foresee the
future. Regulation follows where the
dangerously obvious has been
obscured by the opacity of politics and
power. We seek the comfort of a government protector, a means to be kept
safe (or safer) when we take an airline
flight, eat our food, ingest our medicine, bank our money or borrow
money to buy a home. And when the
protector fails to protect, as when the
Securities and Exchange Commission
(SEC), founded in 1934, fails to enforce
existing regulations, resulting in the
loss of billions of investors’ dollars in a
Ponzi Scheme, the government’s
response is still reactive—still not
anticipatory—and thus likely to result
in many more regulations.
We are about to get a new agency,
called the Consumer Financial
Protection Agency (CFPA),1 yet another
reactive response to the dangerously
obvious. There will be turf wars between
the federal agencies to keep their complex financial institution could
respective, existing authorities away have on the economy;
from the CFPA; there will be debates 3. Supervisory authority of large firms
about what and who will be regulated; was granted among many agencies and
and politics and power will work very amongst a number of bank charter
hard to obscure the facts and muddle types, causing industry fragmentation
the solutions. Though Congress will now and uncoordinated oversight between
debate when it will become law and the regulators; and,
how much authority it
4. Insufficient or no spewill have, the CFPA is on
cific oversight of signifithe way. As it makes its
cant non-bank financial
ascent on the regulatoenterprises, such as
ry horizon, let’s take a
investment banks, money
close look at what we
market funds, hedge
have been told about it.
funds, lenders, mortgage
The Treasury released a
originators, and other
white paper, on June 17,
private pools of capital.
2009, in tandem with
President Barack Obama’s
It is this fourth regulaannouncement of a compretory deficiency that meets
hensive plan for regulatory
the mortgage industry
reform. Entitled “Financial “Often, federal agen- directly and unequivocalRegulatory Reform—A New cies are founded as a
ly through the creation of
Foundation: Rebuilding
the CFPA.4
reaction to, rather
Financial Supervision and
than in anticipation
Regulation”2, the proposal
A new
of, a crisis.
outlines the Administration’s
framework
Regulation follows
The fourth aspect of the
requirements to reform
where the supposedly
plan, indicated above,
the U.S. financial regulaunpredictable has
centers on building a contory system. If adopted
happened.”
sumer protection agency
in its entirety, this robust
to oversee the kinds of
and complicated document will become the blueprint for financial products heretofore outside of
significant changes to the financial the purview of banking regulations.
world.3 The goal of the plan is to Such products as non-traditional and
remediate the following four per- sub-prime mortgages, it is alleged,
ceived, regulatory deficiencies that were often unsuited for consumers’
purportedly caused the recent finan- needs. Banks and thrifts offered these
products, leading to widespread abuse.
cial crisis:
The plan, in effect, asserts that the mis1. Regulators imposed insufficient cap- sion of federal and state bank regulaital and liquidity requirements (off-bal- tors to promote safety and soundness
potentially conflicts with consumer
ance sheet and trading assets);
2. Regulators did not take into account protection goals. Thus, the remedy prothe harm that the failure of a large, posed is a new framework, consisting of
regulatory, legislative, and administrative reforms. Its goal will be to “reduce
gaps in federal supervision and
enforcement; improve coordination
with the states; set higher standards
for financial intermediaries; and promote consistent regulation of similar
products.” 5 This single, regulatory
agency, to be known as the Consumer
Financial Protection Agency, will be a
federal consumer advocacy agency,
focused on consumer protection with
respect to financial products and
services. By becoming the primary
federal financial consumer protection supervisor, the new agency is
expected to provide accountability.
The plan seeks for the agency broad
authorities to enable the fulfillment
of its mission, such as by expanding
jurisdictions and implementing new
regulatory guidelines to eliminate
abuse, extending even to providing
new authorities to the Federal Trade
Commission (FTC) and the Securities
and Exchange Commission (SEC).
The CFPA structure
The plan’s recommendations to
implement the CFPA are premised
on granting “consolidated authority
over the closely related functions of
writing rules, supervising and examining institutions’ compliance, and
administratively enforcing violations,” with the goal being to
“reduce gaps in federal supervision;
improve coordination among the
states; set higher standards for
financial intermediaries; and promote consistent regulation of similar products.” 6
There are eleven (11) features of the
plan, which can be summarized in the
following table.7
Proposal
Purpose
Authorities and Benefits
2. Broad jurisdiction to protect consumers in consumer
financial products and services such as credit, savings and
payment products.
Consumers have the information they need to make responsible financial decisions, and be protected from abuse, unfairness, deception or discrimination. Markets operate fairly and
efficiently with room for sustainable growth and innovation,
and traditionally underserved consumers have access to lending, investment and financial services.
Jurisdiction covers consumer financial services and products (i.e., credit, savings and payment products), as well as
institutions that issue, provide, or service these products
and provide services to the entities providing the financial
products.
3. An independent agency with stable and robust funding.
Director and a board, with the board representing a diverse
set of viewpoints and experiences. At least one seat on the
board reserved for the head of a prudential regulator.8 A
stable funding stream could come in part from fees assessed
on entities and transactions.
Appointments and compensation of officers and professional, financial, and technical staff on terms commensurate with those currently used by other independent financial regulatory agencies.
4. Sole rule-making authority for consumer financial protection statutes, as well as the ability to fill gaps through
rule-making.
Sole authority extends to promulgating and interpreting regulations under existing consumer financial services and fair
lending statutes (i.e., Truth-in-Lending Act [TILA], Home
Ownership and Equity Protection Act [HOEPA], Real Estate
Settlement and Procedures Act [RESPA], Community
Reinvestment Act [CRA], Equal Credit Opportunity Act
[ECOA], and Home Mortgage Disclosure Act [HMDA] and the
Fair Debt Collection Practices Act [FDCPA]).
Rule-making authority under any future consumer protection laws addressing the consumer credit, savings, collection or payment markets. Broad authority to adopt tailored
protections—such as disclosures or restrictions on contract
terms or sales practices—against unfairness, abuse or
deception, subject to the notice and comment procedures
of the Administrative Procedure Act.
5. Supervisory and enforcement authority and jurisdiction
over all persons covered by the statutes that it implements, including both insured depositories and the range
of other firms not previously subject to comprehensive
federal supervision. Work with the Department of Justice
to enforce the statutes under its jurisdiction in federal
court.
O Supervisory, examination and enforcement authority
over all entities subject to its regulations, including regulations implementing consumer protection, fair lending,
and community reinvestment laws (i.e., Community
Reinvestment Act [CRA]), as well as entities subject to
selected statutes for which existing rule-writing authority
does not exist or is limited (i.e., Fair Housing Act to the
extent it covers mortgages, the Credit Repair
Organization Act, the Fair Debt Collection Practices Act,
and provisions of the Fair Credit Reporting Act).
O Promote compliance by publishing supervisory guidance
indicating how it intends to administer the laws it implements.
O Able to use other tools to promote compliance, such as
publishing best and worst practices based on surveys,
mystery shopping, and information collected from supervision and investigations.
O Assumes all responsibilities from the federal prudential
regulators for supervising banking institutions for compliance with consumer regulations (federal- or statechartered). Jurisdiction extends to bank affiliates that
are not currently supervised by a federal regulator.9
O Interaction between itself and all prudential regulators
of major matters and share confidential examination
reports with them, with action taken by the CFPA or regulators.
O Supervisory and enforcement authority over non-banking institutions, including enforcement powers (with
subpoena authority), over non-banking institutions
within its jurisdiction.
O Able to request that the U.S. Attorney General bring any
action necessary to enforce its subpoena authority or to
bring any other enforcement action on its behalf in the
appropriate court.
6. Regulatory reviews:
O Pursue measures to promote effective regulation,
including conducting periodic reviews of regulations,
an outside advisory council, and in coordination with
the Council.10
O Establish an outside advisory panel, akin to the Federal
Reserve’s Consumer Advisory Council, to promote the
CFPA’s accountability and provide useful information on
emerging industry practices.
Required to complete a regulatory study of each newly
enacted and existing regulation at least every three years
after the effective date, to assess the effectiveness of
enacted regulation, and allowing public comment on recommendations for expanding, modifying or eliminating a
regulation.
Interact with other agencies through the Council to promote consistent treatment of similar products and to
assure no product goes unregulated merely because of
uncertainty over jurisdiction. Through the Council, coordinate efforts with the SEC, the CFTC, and other state and
federal regulators to promote consistent, gap-free coverage
of consumer and investor products and services. Agencies
required to report their work to Congress.
7. Strong rules promulgated to serve as a floor, not a ceiling. States have the ability to adopt and enforce stricter
laws.
Federally-chartered institutions to be subject to non-discriminatory state consumer protection and civil rights laws to the
same extent as other financial institutions. States to be able
to enforce these laws, as well as regulations of the CFPA,
with respect to federally-chartered institutions, subject to
appropriate arrangements with prudential supervisors.
States to have concurrent authority enforce regulations of
the CFPA. CFPA promulgated federal rules under a preexisting statute or its own organic rulemaking authority
should override weaker state laws, but states should be
free to adopt stricter laws. With respect to state banks
supervised by a federal prudential regulator, the CFPA to
be the primary consumer compliance supervisor at the
federal level.
8. Coordination of enforcement efforts with the states.
Maintain consistency among the 50 states’ supervisory and
enforcement efforts. The CFPA assumes responsibility for
federal efforts to help the states unify and strengthen standards for registering and improving the quality of providers
and intermediaries.
Authorized to establish or facilitate registration and licensing regimes for other financial service providers and intermediaries (i.e., debt collectors, debt counselors or mortgage modification companies). The CFPA and state
enforcement agencies to use registration
systems to help weed out bad actors.
O SEPTEMBER 2009
Supervisory, examination and enforcement authority.
Should have the ability to act comprehensively to address
emerging consumer protection concerns.
Better promote accountability and help prevent regulatory
arbitrage. Federally-supervised institution no longer able to
choose its supervisor based on any consideration of real or
perceived differences in agencies’ approaches to consumer
protection supervision and enforcement.
1. A single primary federal consumer protection supervisor
to protect consumers of credit, savings, payment and
other consumer financial products and services, and to
regulate providers of such products and services.
25
the birth of a new agency
Proposal
O Research and data: Information used to improve regulations, promote compliance and encourage community
development.
O Complaints: Responsible for collecting and tracking complaints about consumer financial services and facilitating
complaint resolution with respect to federally-supervised
institutions. States retain primary responsibility for tracking and facilitating resolution of complaints against
other institutions.
O Financial education: Streamline existing financial literacy, educate consumers about financial matters, improve
their ability to manage their own financial affairs and
make their own judgments about the appropriateness of
certain financial products.
O Community affairs: Promote community development
investment, fair and impartial access to credit.
Engage in a wide variety of activities to help financial institutions, community-based organizations, government entities and the public understand and address financial services issues that affect low- and middle-income people
across various geographic regions.
10. Improve incentives for compliance by restricting or
banning mandatory arbitration clauses.
Gather information and study mandatory arbitration clauses
in consumer financial services and products contracts to
determine to what extent, and in what contexts, they promote fair adjudication and effective redress. If CFPA determines that mandatory arbitration fails to achieve these
goals, establish conditions for fair arbitration, or, if necessary, ban mandatory arbitration clauses in particular contexts, such as mortgage loans.
Authority to restrict or ban mandatory arbitration clauses,
since consumers often waive their rights to trial when signing form contracts in taking out a loan, and that a private
party dependent on large firms for their business will
decide the case without offering the right to appeal or a
public review of decisions.
11. The Federal Trade Commission (FTC) given better tools
to protect consumers.
FTC retains authority for dealing with fraud and sale of services like advance fee loans, credit repair, debt negotiation
and foreclosure rescue/loan modification fraud.
CFPA authority is in coordination with FTC, with FTC
remaining the lead federal consumer protection agency on
matters of data security. Front-end privacy protection on
financial issues moved to the CFPA.11
The Plan suggests a “proactive” approach
to consumer disclosures, with an emphasis on transparency, consisting of three
dimensions:
SEPTEMBER 2009 O
Authorities and Benefits
9. A wide variety of tools to enable it to perform its functions effectively:
O Research and data
O Complaints
O Financial education
O Community affairs
Disclosures
26
Purpose
1. Make mandatory disclosure forms
clear, simple and concise, and test
them regularly.
2. Require that disclosures and other
communications with consumers be
reasonable.
3. Use technology to make disclosures
dynamic and relevant to the individual
consumer.
The CFPA would be authorized to
require that all disclosures and other
communications with consumers be
reasonable, balanced in their presentation of benefits and clear and conspicuous in their identification of costs,
penalties and risks. Consequently, the
plan calls for all mandatory disclosure
forms to be clear, simple and concise.
(The CFPA would determine which risks
and costs should be highlighted.) The
plan also recommends that the CFPA
establish standards and procedures for
testing disclosures (including immunity
from liability) for providers of consumer financial products and services.
A reasonable communication would
balance the presentation of risks and
benefits and have a clear and conspicuous description of significant product
costs and risks. This standard would
apply to communications with cus-
tomers, marketing materials, and all
mandatory disclosures.
The CFPA would be authorized to
implement a process under which a
provider, “acting reasonably and in good
faith,” could obtain the equivalent of a
“no-action” letter for disclosures and other
communications for new products. For
example, the CFPA could adopt a procedure under which a
provider petitions the
CFPA for a determination
that its product’s risks
were adequately disclosed
by the mandatory model
disclosure or marketing
materials. The CFPA could
approve use of the
mandatory model or marketing materials, or provide a waiver,
admissible in court to defend against a
claim, for varying the model disclosure.
Violations would be subject only to administrative action, rather than civil liability.
Finally, the plan recommends utilizing technology to improve disclosures,
such as requiring Internet (online) calculators to compare the overall cost of
a mortgage. The CFPA is expected also
to promote adoption of innovations in
point-of-sale technology (i.e., allowing
consumers who use a credit card to
choose a payment plan for the purchase).
The CFPA would assume
responsibility for the
Federal Reserve Board
regulations that impose extra protections and higher penalties on alternative or higher cost loans. For instance,
the CFPA could be authorized to add
other mortgage types to the class of
products that receive additional scrutiny, leaving only products which meet
the “plain vanilla” standards in the less
scrutinized class. And the CFPA would
be empowered to impose a strong
warning label on alternative products,
require applicants to fill out a financial
experience questionnaire, or mandate
that providers obtain a written opt-out
to “plain vanilla” products.
Simplicity
A new fairness doctrine
The proposal recommends that the
CFPA be authorized to define standards
The CFPA would have the authority to
regulate unfair and deceptive acts or
for “plain vanilla” products, such as
“standardized” fixed term mortgages
without prepayment penalties and
require financial institutions to offer
such “plain vanilla” products alongside
the institution’s other products. Such
standards are to be “simpler and have
straightforward pricing,” and these
products are to be disclosed “prominently, alongside whatever other lawful products” a provider chooses
to offer.
Higher cost
loans
practices for all credit, savings and
payment products. The proposal also
calls for the CFPA to have the authority to address overly complex financial contracts. Perhaps this should be
called the “New Fairness Doctrine.” It
consists of the following three
authorities, in which the CFPA is
authorized to:
1. Regulate unfair, deceptive or abusive
acts or practices.
2. Impose empirically justified and
appropriately tailored duties of care on
financial intermediaries.
3. Apply consistent regulation to similar
products.
The CFPA could ban certain practices,
such as prepayment penalties, for certain types of contracts or payments to
mortgage originators, including yield
spread premiums, if disclosures were
found to be an inadequate protection.
The CFPA could also adopt a “life of
loan” approach to mandate consumer
protections through the servicing and
loss mitigation stages of the loan.
Indeed, the plan even suggests that the
CFPA could consider requiring mortgage
originators to receive a portion of their
compensation over time, contingent on
loan performance, rather than in a lump
sum at the time of origination.
There are recommendations in the
plan to grant CFPA the authority to
impose “duties of care” on financial
intermediaries (i.e., a duty of ‘best exe-
cution’ on mortgage brokers with
respect to available mortgage loan
types and pricing). The proposal also
calls for CFPA to apply consistent regulation to similar products, taking into
consideration “consumer perceptions”
of such products.
Community Reinvestment
Act (CRA) and access
Reinforcing consumer
protection
For more information on
author Jonathan Foxx, visit
Lenders Compliance Group
on the Web at www.lenderscompliancegroup.com.
Footnotes
the secondary market overview
into a $40 or a $100 million loss. From
a bank’s perspective, if an asset is
lower in value than previously indicated, this turns into a loss when the valuation changes. This played out all
over the country, and basically, the
whole industry collapsed.
Many changes came as a result of the
S&L crisis. For one thing, appraisers were
now required to be licensed for the first
time. Also, the Financial Accounting
Standards Board (FASB) adopted “Mark-toMarket” rules. Without going into the technical aspects, these rules basically discouraged financial institutions from putting
mortgages in their portfolio. The way to
avoid future risk in valuation was to sell
the loans. And that is where it started. Stay
tuned for the conclusion as to what happened and some clues as to what will happen in the future and how it may affect
your business.
In the meantime, let’s address more
current events. We have several factors
still impacting the markets and they are
conflicting. For one thing, the recovery
is starting to take shape, and as long as
there is positive economic news, this
will put upward pressure on rates. Also
exerting upward pressure on rates is the
tremendous amount of money the government is borrowing. On the other
side of the coin, the credit markets have
not recovered. Though the feds are
slowing their purchases of Treasuries,
they will continue to purchase mortgages. This will continue to keep the
spread between Treasuries and mortgages more narrow than they should be
considering the credit crisis. With
unemployment hovering close to 10
percent and tons of foreclosures still
hitting the real estate markets, the government cannot afford for rates to
increase too fast and thereby jeopardizing any recovery on the horizon. These
conflicting forces are expected to keep
volatility in the markets high for the
foreseeable future, with more risk to
the upside than down. That risk
changes only if we get significant poor
economic news in the next 30 days …
Dave Hershman is an author for the mortgage industry with eight books and several hundred articles to his credit. He is also
head of OriginationPro Mortgage School
and a top industry speaker. He may be
reached by phone at (800) 581-5678 or email success@hershmangroup.com.
Web: www.appraisalsanywhere.com
O SEPTEMBER 2009
1—Consumer Financial Protection
Agency Act of 2009, House Bill 3126.
2—U.S. Department of Treasury, June
17, 2009, TG-175: President Obama to
Announce Comprehensive Plan for
Regulatory Reform.
3—Examples of substantial revisions, to
name but two, include altering or eliminating the so-called “functional regulation” regime of the Gramm-Leach-Bliley
Act (1999) and the interstate branching
approval process of the Riegle-Neal
Interstate Banking and Branching
Efficiency Act (1994).
4—The discussion provided herein is
based on a review of the Financial
Regulatory Reform: A New Foundation:
Rebuilding Financial Supervision and
Regulation, issued by the U.S.
Department of Treasury on June 17,
2009, and updated on August 11, 2009.
5—Ibid. Pg. 55.
6—Ibid. Pg. 56.
7—Ibid. Pp. 57-63.
8—Prudential regulation is regulation
of deposit-taking institutions and supervision of the conduct of these institutions and set-down requirements that
limit their risk-taking. The aim of prudential regulation is to ensure the safety of depositors’ funds and keep the stability of the financial system.
9—In a departure from the current
framework of federal bank charter preemption of state laws, the plan recommends that federally-chartered institutions be subject to nondiscriminatory
state consumer protection and civil
eral banking and consumer protection
agencies proposed in the plan itself.
11—It is asserted that the FTC has a
clear mission to protect consumers, but
generally lacks jurisdiction over the
banking sector and has limited tools
and resources to promote robust compliance of nonbank institutions. To
quote the plan itself, “mortgage companies not owned by banks fall into a regulatory ‘no man’s land’ where no regulator exercises leadership and state
attorneys general are left to try to fill
the gap.” Op. Cit. Note 3, Pg. 56.
12—“Strengthening Consumer Protection,”
a synopsis of the five principles, is available
on the FinancialStability.gov Web site. It is
one of several additional resources to the
plan.
By creating the CFPA, the Obama
Administration hopes to bring new
means to bear on consumer protection, allowing it broad authority to
implement its initiatives through various enforcement mechanisms. There
are five principles that guide its formation: transparency, simplicity, fairness,
accountability and access.12 To accomplish these principles, consumer protection mandates will be transferred to
the CFPA from the Comptroller of the
Currency (OCC), Federal Deposit
Insurance Corporation (FDIC), Board of
Governors of the Federal Reserve
System (FRB), Office of Thrift
Supervision (OTS), Federal Trade
Commission (FTC), and the National
Credit Union Administration (NCUA).
The regulations impacted by the CFPA’s
new authorities will include the Equal
Credit Opportunity Act (ECOA), Fair
Credit Reporting Act (FCRA) (except sections 615(e), 624, and 628), Alternative
Mortgage Transaction Parity Act
Jonathan Foxx, former chief compliance
officer for two of the country’s top publicly-traded residential mortgage loan
originators, is the president and managing director of Lenders Compliance
Group, a mortgage risk management
firm devoted to providing regulatory
compliance advice and counsel to the
mortgage industry. He may be contacted
at (516) 442-3456 or by e-mail at
jfoxx@lenderscompliancegroup.com.
rights laws to the same extent as other
financial institutions. States would have
the ability to enforce these state laws
against federally-chartered institutions
as well as state-chartered institutions
and the ability to enforce the regulations of the CFPA against federally-chartered institutions.
10—To address the need for coordinated agency oversight and identification
of emerging risks, the Plan would create
a Financial Services Oversight Council
(Council). The Secretary of Treasury
would serve as the Council’s Chairman,
and membership would include representatives of a many agencies, including
the SEC, the Commodity Futures Trading
Commission (CFTC), the Federal Housing
Finance Agency (FHFA), and the new fed-
As described in the above-outlined table,
a key feature of the CFPA would be the
administration of the CRA, and the plan
recommends that the CFPA should have
sole authority to evaluate financial institutions for CRA compliance. This is in
keeping with the claim that a critical
part of the CFPA’s mission is to promote
access to financial services, especially
households and communities that traditionally have had limited access.
The CFPA, therefore, would now
determine if a financial institution had
a record of meeting the lending, investment and services needs of its community under the CRA, and in connection
with the approval of a merger application by the institution’s prudential
supervisor. Additionally, the plan calls
for the CFPA to maintain a fair lending
unit with attorneys, compliance specialists, economists and statisticians;
and, importantly, it is to have primary
fair lending jurisdiction over federallysupervised institutions and concurrent
authority with the states over other
institutions. To promote fair lending,
the CFPA would have the authority to
collect data on mortgage and small
business lending, including expanding
the required data to be reported under
HMDA. Critical new fields would be
added to HMDA data, such as a universal loan identifier that permits tying
HMDA data to property databases and
proprietary loan performance databases, or a flag for loans originated by
mortgage brokers, or information
about the type of interest rate (i.e.,
fixed vs. variable).
(AMTPA), Electronic Funds Transfer Act
(EFTA), Fair Debt Collection Practices
Act (FDCPA), Federal Deposit Insurance
Act (FDIA) (subsections 43[c] through
[f]), the Gramm-Leach-Bliley Act (GLBA)
(sections 502 through 509), Home
Mortgage Disclosure Act (HMDA),
Community Reinvestment Act (CRA),
Real Estate Settlement Procedures Act
(RESPA), Secure and Fair Enforcement
for Mortgage Licensing Act (SAFE Act),
Truth-in-Lending Act (TILA), and the
Truth-in-Savings Act (TISA). Given such
broad and sweeping responsibilities
and authorities, the new Consumer
Financial Protection Agency will bring
about new modalities of regulatory
guidance and enforcement methodologies, fundamentally altering the financial products and services industries.
27
news flash
NAHB report: Remodeling
market activity builds
momentum
market conditions improved across all
regions: 36.9 in the Northeast (from 35.7
in the first quarter), 38.3 in the Midwest
(from 36.1), 39.7 in the South (from 34.3),
and 40.5 in the West (from 32.8). A significant portion of the market improvement
came from the measure for major additions and alterations (jobs worth $25,000
or more) with a leap to 38.2 (from 32.7).
Smaller growth was observed in the indicators for minor additions and alternations (less than $25,000) at 41.5 (up from
39.1), and maintenance and repair at
33.6 (grew from 30.4).
All measures for future expectations
in the remodeling market increased
significantly. Remodelers reported
growth in calls for bids at 38.8 (from
34.2 in the first quarter). The backlog
of remodeling jobs jumped to 34.4
(from 28.5). And appointments for proposals climbed to 40.3 (from 35.3).
“While remodelers remain cautious,
they report business is looking a little
better after several challenging quarters,” said NAHB Chief Economist David
Crowe. “Conditions for this quarter have
returned to nearly the levels of this time
last year. The uptick in the expectations
component suggests this trend will continue as the entire housing market
begins its recovery.”
For
more
information,
visit
www.nahb.org/remodel.
Date
A reading of “1” has the lowest
impact on rates, while “10” has the
highest. Although carefully verified,
data are not guaranteed as to accuracy or completeness. BestInfo Inc.
cannot be held responsible for any
direct or incidental loss or liability
incurred by applying any of the information or opinions in this feature.
Provided exclusively to National
Mortgage Professional Magazine by
David Beadle, president of BestInfo
Inc., the BestRates cell, pager and e
mail rate alert service for mortgage
industry subscribers. Send your inquiry
to bestrates@nmpmediacorp.com for
full details on a free two-week trial
subscription.
MO
RTGAGE PRO
SSIONAL
NATIONAL
NMP
MAG
AZIN
E
August
Consumer Prices
Rate Impact
September 24
August Existing
Home Sales
Rate Impact
September 24
Weekly
Jobless Claims
Rate Impact
September 29
September Consumer
Confidence
Rate Impact
Second quarter 2009
commercial and multifamily mortgage loan
originations were 50
percent higher than during the first
quarter of 2009, a quarter with very
little activity, but remained 54 percent
lower than during the same period last
year, according to the Mortgage
Bankers Association’s (MBA) Quarterly
Survey of Commercial/Multifamily
Mortgage Bankers Originations.
“Commercial and multifamily
mortgage originations continue to
feel the effects of the recession and
the credit crunch, with volumes 54
percent below last year’s second quarter, and 83 percent below the peak
seen in the second quarter of 2007,”
said Jamie Woodwell, MBA’s vice president of commercial real estate
research. “A 50 percent increase in
volumes between the first and second
quarter of this year follows a traditional seasonal increase in the second
quarter. It also likely signals that commercial and multifamily mortgage
originations bottomed in the first
quarter of 2009.”
The 54 percent overall decrease in
commercial/multifamily lending activity during the second quarter was driven
by decreases in originations for all property types. When compared to the second quarter of 2008, the decrease
included an 81 percent decrease in
loans for office properties, a 77 percent
decrease in loans for hotel properties, a
70 percent decrease in loans for healthcare properties, a 65 percent decrease
in loans for industrial properties, a 51
percent decrease in retail property
loans and a 21 percent decrease in multifamily property loans.
Among investor types, commercial
bank portfolios saw a decrease of 83
percent compared to last year’s second
quarter. There was also a 57 percent
decrease in loans for conduits for commercial mortgage-backed securities
(CMBS), a 54 percent decrease in loans
for life insurance companies, and the
dollar volume of loans for governmentsponsored enterprises (or GSEs—Fannie
Mae and Freddie Mac) saw a slight
increase of two percent.
Second quarter 2009 mortgage
originations were 50 percent higher
than originations in the first quarter.
Due to the low base of originations in
the first quarter, the percentage
increases seen in the second quarter
are quite dramatic.
Among investor types, loans for conduits for CMBS saw an increase in loan
volume of 471 percent compared to the
first quarter, loans for life insurance
companies saw an increase in loan volume of 46 percent compared to first
quarter 2009, GSEs’ volume increased
by 39 percent during the same time
span, and originations for commercial
bank portfolios increased six percent
from the first quarter to second quarter
2009.
Indicator Summary
September 16
FE
SEPTEMBER 2009 O
Residential remodeling
showed modest gains
during the second quarter of 2009 with increases in all indicators, according to the
recently released National Association of
Home Builders (NAHB) Remodeling
Market Index (RMI). The current market
conditions measure grew to 38.1 from
34.5 in the first quarter. Future expectations rose to 34.2 from 30 in the previous quarter. The RMI measures remodeler perceptions of market demand for
current and future residential remodeling projects. Any number over 50 indicates that the majority of remodelers
view market conditions as improving.
The RMI has been running below 50
since the final quarter of 2005, following
decreasing remodeling expenditures
since that time.
“With more calls from home owners
and more projects under way, remodelers are seeing better activity in their
businesses,” said NAHB Remodelers
Chairman Greg Miedema, a remodeler
from Tucson, Ariz. “Although remodeling jobs are still harder to find, homeowners are showing more interest in
remodeling spending.”
Indicators for current remodeling
28
MBA survey: Q2 2009
commercial/multifamily
originations up from Q1
7
8
6
5
The argument has been that “inflation is not a problem” at the present time. This is because the Federal Reserve historically has focused upon the Consumer Price Index (CPI) or the Personal Consumption Expenditures (PCE) index as
the “gold standard” for determining the level of price inflation. But, the true “early warning” system of what lies ahead
may be found in commodity prices. When they move into a bubble phase, there is likely to be trouble ahead. Currently,
many economists are very worried about the stubbornly high level of oil prices in relationship to weakness in
demand. And they are also concerned about the fact gold has remained in the area above $900 for a considerable
period of time. While these commodities may be reacting to weakness in the dollar, that is also a major risk factor to
a continuation of lower inflation levels.
The real estate sector has been on the rebound in recent months, with one-third of transactions related to the $8,000
federal tax incentive to first-time buyers. It is set to expire on Nov. 30, which is creating a powerful impetus to having a signed contract in hand by the end of this month. In fact, this could turn into a “Cash for Clunkers-style” frenzy as the deadline approaches. It has also been noted that the main sales push is at home prices below $250,000.
The “move-up” market is reportedly very weak and jumbo loans remain hard to find at attractive rates. Therefore,
when one looks at the home sales statistics, they have to be viewed in terms of this bifurcated marketplace. In other
words, considerable additional progress will be required before the housing market can be declared to have recovered from its deep slump. New home sales will be released on Friday, Sept. 25.
The trend in new claims for state unemployment benefits has been relatively steady in the area near 566,000 for the
past month. This is still well above the peak level of 400,000 seen in the previous recession of 2001. As for continuing claims, they have now declined to six million from what had been just shy of seven million earlier in the summer. While some optimists have said this shows the employment situation is improving, the skeptics say it is merely evidence that many folks have been losing their benefits without finding a new job. The continuing claims figure
followed by most economists is the one which tracks payments for the standard 26-week period. Congress has
extended benefits due to the length of the recession. But even those receiving the extra money are seeing their payments run out, which could lead to more hardship as the current year comes to an end.
A key barometer of attitudes about employment is found in the monthly consumer confidence data, because the surveys ask questions about whether jobs are hard to find or easy to obtain. While there was a small improvement in
the August data, employers are remaining cautious. For one thing, some employers sought to avoid outright layoffs
by cutting back on hours for existing workers. So, the first order of business in a recovery phase will be to restore
those workers to true “full time” status. This may delay the hiring of new employees beyond what was seen in past
recessions. Furthermore, there has been a strong trend toward engaging the services of temporary workers, just in
case a double-dip recession takes place. These trends may further delay a drop in the national unemployment rate
until any recovery has developed a full head of steam.
Compared to the first quarter of
2009, second quarter originations for
healthcare properties saw a 173 percent increase. There was a 129 percent increase for hotel properties, a
93 percent increase for retail properties, a 73 percent increase for multifamily properties, a 28 percent
decrease for office properties and a
46 percent decrease for industrial
properties.
FDIC advances in
Legacy Loans
Program testing
The Federal Deposit
Insurance Corporation
(FDIC) is taking the
next step in the
development of the Legacy Loans
Program (LLP). The LLP is part of the
Public-Private Investment Program
announced in March by the Secretary of
the Treasury, the Federal Reserve, and
the FDIC, and was designed to help
banks remove troubled loans and
other assets from their balance sheets
so that banks could raise new capital
and be better-positioned to provide
lending to further the recovery of the
U.S. economy.
In June, the FDIC indicated that it
would continue to develop this program by testing the LLP’s funding
mechanism through the sale of
receivership assets. This step will allow
the FDIC to be ready to offer the LLP to
open banks as needed. The first test
using the LLP funding mechanism commenced in late July. In the transaction
to be offered, the receivership will
transfer a portfolio of residential mortgage loans on a servicing released basis
to a limited liability company (LLC) in
exchange for an ownership interest in
the LLC. The LLC also will sell an equity
interest to an accredited investor, who
will be responsible for managing the
portfolio of mortgage loans. Loan servicing must conform to either the Home
Affordable Modification Program
(HAMP) guidelines or FDIC’s loan modification program.
Accredited investors will be offered
an equity interest in the LLC under two
different options. The first option is on
an all cash basis, which is how the FDIC
has recently sold receivership assets,
with an equity split of 80 percent (FDIC)
and 20 percent (accredited investor).
The second option is a sale with leverage, under which the equity split will be
50 percent (FDIC) and 50 percent
(accredited investor).
The funding mechanism is financing
offered by the receivership to the LLC
using an amortizing note that is guaranteed by the FDIC. Financing will be
offered with leverage of either four to
one or six to one, depending upon certain elections made in the bid submitted by the private investor. If the bid
incorporates the six to one leverage
alternative, then performance of the
underlying assets will be subject to certain performance thresholds including
delinquency status, loss severities, and
principal repayments. If any one of the
performance thresholds is triggered
over the life of the note, then all of the
principal cash flows that would have
been distributed to the equity investors
would be applied instead to the reduction of the note until the balance is
zero. The performance thresholds will
not apply if the bid is based on the
lower leverage option.
The FDIC will be protected against
losses on the note guarantee by the limits on the amount of leverage (both in
terms of a maximum ratio and dollar
amount), the mortgage loans collateralizing the guarantee, and the guarantee
fee. The FDIC will analyze the results of
this sale to see how the LLP can best further the removal of troubled assets
from bank balance sheets, and in turn
spur lending to further support the
credit needs of the economy.
For more information, visit www.fdic.gov.
Home prices climb with
1.2 percent rise
Integrated Asset Services LLC (IAS), a
default management and residential
collateral valuations company, has
released its IAS360 House Price Index
(HPI). Based upon the timeliest and
most granular data available in the
industry, the index for national house
By other Hard Money Lenders?
ACC Mortgage can help. We are the bank. We are the decision maker.
We will even process your loan.
Submit your scenarios at WeApproveLoans.com
or call 877-353-2233.
ACC Mortgage can help you and your company close more loans.
FRUSTRATED
prices moved ahead another 1.2 percent in June.
The IAS360 House Price Index is a
comprehensive housing index tracking
monthly change in the median sales
price of detached single-family residences across the U.S. The index, based
on all arms-length transactions, tracks
data of 15,000 neighborhoods, that roll
up to report on the changes in 360
counties, nine census divisions, four
regions and the nation overall. The
IAS360 House Price Index is delivered
on a monthly basis.
With June’s gains—the fourth consecutive positive month—the U.S. housing benchmark advanced 2.7 percent
for full second quarter 2009, virtually
offsetting the 2.6 percent decline across
the first three months of the year. The
IAS360 HPI is still down 16.7 percent
from its high in June 2007.
Like May, all four U.S. census regions
reported positive numbers for the
month and in like order. For June, the
northeast was up 1.9 percent, the midwest 1.8 percent, the south 1.2 percent,
and the west 0.4 percent. While values
showed improvement in neighborhoods across the country, most upper
end counties remained mired in a deep
slump. In June, price declines continued to accelerate for Putnam County,
N.Y.; Morris County, N.J. and Howard
County, Md.
“I think that a lot of this valuation
O SEPTEMBER 2009
29
Are You Now Mentally
“Melted Down?”
SEPTEMBER 2009 O
Dear Brian:
I don’t mean to sound too sad here, but
I am struggling. For years, I did really
well, and then, like everyone else, my
business just sort of disappeared. It has
taken me many months just to try keeping my head above water.
But I have to confess … my heart and
mind are really off somewhere else most
of the time. I am not sure if this is the
right place to ask you, but how do you
stay positive even during a meltdown?
Thanks.
Anonymous, Maine
30
Dear Anonymous:
I would suggest carefully reading this
article. In fact, you probably should
read it several times and maybe share
it with your office and staff. The big
difference between a successful person and an unsuccessful one is how
they deal with failure and defeat. I
have told you many times that one of
my strongest attributes is that I am
persistent. See, I don’t ever feel
defeated. Sure, I fail and not every-
thing goes as planned all the time.
Sure, I will work hours, days and
weeks, on a campaign and not get the
results I expected. That’s a terrible
feeling. By the way, Thomas Edison
tried hundreds of experiments and he
said the only reason he succeeded was
because he ran out of things that didn’t work!
But, what you do next is the critical
thing! Do you say, “Boy, that was a lot of
work and I spent a lot of money with
no result. Let’s never try that again.” Or,
do you say, “That didn’t work, but yet I
know others succeed with that strategy,
so let me go back and dissect this to see
what went wrong and try again.” The
questions you ask yourself and the
responses you give back are critically
important.
I personally have spent 15 years
doing poorly to average and only the
last eight years earning high six to
seven figures each year. Sure, it is much
easier to give up, but that is not where
the money is. The real money and success can be found by going deeper and
National Mortgage Professional Magazine
Presents ... The 40 Under 40
The 40 Most Influential Mortgage
Professionals Under 40
We are seeking nominations from our readers for the National Mortgage
Professional Magazine’s “40 Under 40” feature, slated to appear in our
November 2009 edition.
Who qualifies: Anyone who is under the age of 40 and has had a major
impact on the industry. This could be through innovation, association participation, sales force automation, community activism, management techniques, technology or any other significant method that has influenced our
industry. We would need a short, three-line bio on you, along with a color
photo and company contact info to complete the profile.
To be considered for the 40 Under 40 feature, visit
NMPMag.com/submit40under40 to submit your nominations.
realizing that every failure, when properly reviewed, is just another bump on
the road to success and what you want
to accomplish.
Let me make it even more basic.
Have you ever gone for a bike ride? Well
that is a prime example of what I am
trying to tell you here! If everyone who
fell off their bike when they first started
riding quit riding bikes, then we would
have zero bike riders!
But, there is one more big lesson
here … It is the idea of limited thinking
… the idea of focusing on all of the
negative aspects of this meltdown
…the idea of thinking too much about
your competition. Of dwelling on all of
the unethical things they may be doing
to take away “your business,” as if there
is such a thing as “your business.”
It reminds me of the Insiders
Seminar II we hosted a few years ago in
Chicago. One of my fellow “gurus” who
is a great marketer decided to come to
my seminar to learn. Again … another
lesson. Although he is a very successful
marketing guru, he is still learning and
from a competitor for that matter.
Or, am I really a “competitor?” I don’t
see us as “competitors” and there is certainly more than one way to succeed in
any field. But the feedback I got when he
left hurt and depressed me. It seemed
that everyone in attendance, almost
without exception, were upset that he
showed up.
The problem … limited thinking.
I was personally thrilled that he came
and wanted to learn, as it seemed like a
great compliment to me. But, everyone
in the audience felt that it was a threat.
Here is what I was thinking, and he
probably was too.
I am not right for everyone … there
are 150,000-plus originators out there
and I can only handle 5,000 of them
successfully.
news flash
That is considered “abundant thinking.” It’s the mentality when one
thinks: “I have no competition.” It
reminds me of the question I am continually asked by originators who are
looking into becoming a member of
our systems at www.loanofficerformula.com/join. Their question is usually,
“How many others in my area have
your system?” My answer is always:
“Who cares?”
Let’s suppose there are 500 transactions that occur in your market each
month. How many could you possibly
handle? Maybe 10, maybe 20, maybe
even 30? That leaves more than 470 for
your competition.
So stop the idea of “limited thinking” and never give up!
Newsflash … There is business being
done right now in your town … now go
ahead and get your share of it!
Dedicated to having buyers chasing you …
If you have a question you would like
Brian to answer in this column,
please send an e-mail with “Ask
Brian Question” in the subject line to
askbrian@loanofficerformula.com.
Brian Sacks is CEO of www.loanofficerformula.com. He has been an industry expert
for more than 25 years, closing 6,000-plus
loans totaling $1 billion. You can read
Brian’s 32-page special report entitled
“The Death of Mortgage Origination as We
Know It” and “The 10 Things You Must Do
Now to Survive and Thrive” at
www.loanofficerformula.com/mp. This
report sells for $97 and has been downloaded by more than 9,200 originators
and company owners, but is free for a
limited time for readers of National
Mortgage Professional Magazine. He
may be reached by e-mail at
brian.sacks@gmail.com.
disparity reflects the immediate
effects of Washington‘s housing rescue
plan,” said Dave McCarthy, president
and CEO of Integrated Asset Services.
“Everything so far has helped spur
sales of lower-priced homes, which, at
least in the short run, is producing
winners and losers.”
Among the nation’s 10 largest metropolitan statistical areas (MSAs)
reported, only the Las Vegas housing
market continued to slide with a drop
of another 1.8 percent for the month.
Boston and Chicago followed solid May
numbers with increases of 2.9 percent
and 1.3 percent, respectively, as did
the big California MSAs, with Los
Angeles gaining 2.2 percent, San
Francisco up 1.7 percent and San Diego
at 1.4 percent.
“The improvement in the more traditional neighborhoods is encouraging,
but it’s easy to think there may be trouble lurking further up the food chain,”
said McCarthy.
For more information, visit www.iasreo.com.
Your turn
invites you to submit any information on
regulatory changes, legislative updates,
human interest stories or any other
newsworthy items pertaining to the
mortgage industry to the attention of:
NMP News Flash column
Phone #: (516) 409-5555
E-mail:
newsroom@nmpmediacorp.com
Note: Submissions sent via e-mail are
preferred. The deadline for submissions
is the 1st of the month prior to the target issue.
BB&T assumes all
deposits of Colonial Bank
5LLKOLSW
JSVZPUN
TVYLSVHUZ&
Kroll Factual Data forms
partnership with Prime
Alliance Solutions
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Z[PSS°YLTHPU°\UZ\JJLZZM\S&7*:JHU/LSW
Platinum Credit Services, Inc. will train and educate your staff
of mortgage professionals on how to use and maximize our
score enhancing software.
PCS will guide them through our re-score process and get the
scores increased at the bureau level in as little as 2 – 5 business
days with or without documents. Call us today!
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O SEPTEMBER 2009
+V°`V\°OH]L°HWWSPJHU[Z°[OH[°ULLK°
HKKP[PVUHS°WVPU[Z°VU°[OLPYJYLKP[°ZJVYL°
[V°X\HSPM`°[OLT°MVY°-/(&°
Kroll Factual Data, a
provider of business
information solutions to financial organizations,
announced that it has partnered with
Tukwila, Wash.-based, Prime Alliance
Solutions Inc., a provider of iMortgage
solutions for credit unions, to bring an
integrated offering of Kroll Factual
Data’s credit and flood technology services through Prime Alliance Solutions’
loan origination software (LOS) platform.
The official launch is slated for
September and will be available
through Prime Alliance Solutions’ Retail
Lending Center and Loan Fulfillment
Center platforms to the 1,600 credit
unions it serves nationwide. Utilizing
Kroll Factual Data’s flood and credit
technology, credit unions will experience a seamless process with reduced
costs, while benefiting from a more
user-friendly credit report format.
“Kroll Factual Data’s stability and
longevity in the industry made them a
perfect preferred partner for us,” said
Joe Brancucci, chairman and CEO of
Prime Alliance Solutions Inc. “Creating
relationships such as this one with Kroll
Factual Data provides our credit unions
with additional mortgage fraud protection without the need to manage additional vendor relationships.”
Credit unions can directly order
flood and credit reports from Kroll
Factual Data through Prime Alliance
Solutions LOS. The convenience of not
having to leave their system saves both
time and money.
“The partnership with Prime
Colonial Bank of
Montgomery, Ala.,
has been closed by
the Alabama State
Banking Department, which appointed
the Federal Deposit Insurance
Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered
into a purchase and assumption agreement with Branch Banking and Trust
(BB&T) of Winston-Salem, N.C., to
assume all of the deposits of Colonial
Bank.
Colonial Bank’s 346 branches in
Alabama, Florida, Georgia, Nevada and
Texas have reopened and are operating
as branches of BB&T. Depositors of
Colonial Bank will automatically
become depositors of BB&T. Deposits
will continue to be insured by the FDIC.
Customers should continue to use their
existing branches until BB&T can fully
integrate the deposit records of
Colonial Bank.
As of June 30, 2009, Colonial Bank
had total assets of $25 billion and total
deposits of approximately $20 billion.
BB&T will purchase approximately $22
billion in assets of Colonial Bank. The
FDIC will retain the remaining assets for
later disposition.
The FDIC and BB&T entered into a
loss-share transaction on approximately $15 billion of Colonial Bank’s assets.
BB&T will share in the losses on the
asset pools covered under the lossshare agreement. The loss-sharing
arrangement is projected to maximize
returns on the assets covered by keeping them in the private sector. The
agreement is also expected to minimize
the disruptions for loan customers.
The FDIC estimates that the cost to
the Deposit Insurance Fund (DIF) will be
$2.8 billion. BB&T’s acquisition of all
the deposits was the “least costly” resolution for the FDIC’s DIF compared to
alternatives. Colonial Bank is the 74th
FDIC-insured institution to fail in the
nation in 2009.
“The past 18 months have been a
very trying period in the financial services arena, but the FDIC and its staff
have performed as Congress envisioned
when it created the corporation more
than 75 years ago,” said FDIC Chairman
Sheila C. Bair. “After protecting almost
$300 billion in deposits since the current financial crisis began, the FDIC’s
guarantee is as certain as ever. Our
industry funded reserves have covered
all losses to date. In fact, losses from
today’s failures are lower than had
been projected. I commend our staff
for their excellent work in assuring
once again a smooth transition for
bank customers with these resolutions.
The FDIC continues to stand by the
nation’s insured deposits with the full
faith and credit of the U.S. government.
No depositor has ever lost a penny of
their insured deposits.”
For more information, visit www.bbt.com.
31
heard on the street
By Tommy A. Duncan
SEPTEMBER 2009 O
Tommy: When performing reviews on appraisals, do you recommend an automated
valuation model (AVM)?
32
Lately, there is a lot of press about large mortgage banks that used AVMs to determine property values for reducing Home Equity Lines of Credit (HELOCs)
and now these financial institutions are faced with class-action lawsuits based on
incorrect values as part of the allegations. One such suit, Michell Kimball v. Washington Mutual Bank alleges that the bank used faulty AVMs to create a pretext
for its credit limit reduction and account suspension. After Ms. Kimball learned
that her HELOC was frozen, she called customer service and was informed an
AVM showed the property value had significantly declined. In disbelief, she challenged the bank. She was required to use the bank’s “preferred” appraiser and a full
residential appraisal was performed and the results of the appraisal valued the
property was worth 1.5 times the AVM’s estimate. Mark one up for the appraiser
and the consumer.
There are several other lawsuits in the works with similar type of claims where
faulty AVMs were used. The adverse affects of the AVM product and the impact
it is having on the consumer is beginning to surface, and I expect there will be
more outcry from industry leaders as consumer complaints surface.
The Home Valuation Code of Conduct (HVCC) lists the AVM as a form of
quality control on appraisals during the 10 percent sampling of Section VI.
The AVM is much more affordable than a Field Review Appraisal however, I
learned during my year deployment in the Global War on Terrorism that modeled data used in intelligence was often skewed and incorrect. We found ourselves having to use human intelligence to validate information that later
discredited the data models. I see the AVM having the same type of effect as I
saw during the war. One must know its limitation and for the best results, have
a human to verify the information. Yes … an appraiser. Use an appraiser to validate collateral. A Field Review Appraisal or a drive-by is what we use, and yes
it costs more than an AVM, but it puts an eye on the target and fills the gaps
in performing appraisal audits.
I believe there should be a balance in technology and the way it is applied in
the mortgage industry. However, the AVM product has its place, but shortcuts
may end up being the long way. In the mortgage fraud cases Quality Mortgage
Services have performed, AVMs were never used. An appraisal, whether a full
appraisal or a field review, was used because the appraiser is the subject matter
expert and places more credibility on a licensed professional. An AVM cannot
testify in a court of law and will not hold up in court because of problematic
flawed information.
I believe the AVM is probably a good product during pre-funding and underwriting as something to support a desk review. However, a Field Review
Appraisal is my product of choice during post-closing quality control. But, I
have also seen where a Field Review Appraisal or another appraisal was ordered during underwriting. It is difficult to say which method, desk review or
AVM, was used to provoke the underwriter to order another appraisal or Field
Review Appraisal. What I do know if you want stronger supporting evidence,
an appraiser is required.
Tommy A. Duncan is executive vice president of Quality Mortgage Services LLC.
For answers to your QC and FHA questions, please contact Tommy at (615) 5912528, ext. 124 or e-mail taduncan@qcmortgage.com. You may also visit Quality
Mortgage Services LLC on the Web at www.qualitymortgageservices.com.
Sponsored by
Alliance Solutions Inc. allows credit
unions to transfer risk and increase
profitability, while offering products
that are known for their safety and
soundness,” said Jeff Gentry, vice president of Kroll Factual Data. “Kroll
Factual Data has been in the business
for 25 years and continues to forge synergistic partnerships demonstrating our
stability in this volatile market.”
For more information, visit www.krollfactualdata.com or www.primealliancesolutions.com.
Lenders One sets
production record for
first half of 2009
Lenders One Mortgage
Cooperative, a national alliance of more
than 135 independent mortgage bankers,
announced that it has experienced a record
level of originations during the first half of
2009. Lenders One member companies
originated $21.2 billion in loans during the
second quarter, which surpassed first quarter volume of $17.3 billion. Broken down
regionally, new and existing members in
the western states originated $7.9 billion of
the recent quarter’s total volume. Midwest
lenders followed with $7.6 billion, and east
coast member companies recorded $5.7
billion in production.
“Heavy refinance volumes, coupled
with low interest rates and the dedication of our members have all contributed to this continued success,” said
Scott Stern, chief executive officer of
Lenders One. “These factors were complimented by our collective buying
power that creates revenue-enhancing,
cost-saving and market-share expanding opportunities for all members.”
As the secondary market progresses
toward recovery and investors begin to
revisit mortgages as viable investments,
the Federal Housing Administration (FHA)
remains a strong part of the industry,
accounting for 43 percent, or $9 billion,
of Lenders One’s second quarter originations. Conventional products made up 52
percent, or $11 billion, with jumbo loans
rounding out the remaining five percent.
Stern also attributes some of the
production volume to the similar
increase seen in Lenders One membership. At mid-year, the cooperative had
already attracted 21 new members
from all across the country, which is in
line to compete with the record 42 total
members it on-boarded in 2008.
“By staying committed to consumers
with products to refinance and purchase homes, our members continue to
be leaders in their market,” Stern said.
For more information, visit www.lendersone.com.
Two firms join NRMLA’s
Wholesale Lender Program
The National Reverse
Mortgage Lenders
Association (NRMLA) has
announced that Live Well Financial Inc. of
Richmond, Va., and Generation Mortgage
Company of Atlanta as charter members of
the association’s new Wholesale Lenders
Program. Launched in July, the Wholesale
Lenders Program provides information to
lenders and brokers on delivering reverse
mortgages to reputable investors. Other
Wholesale Lender Program participants
include Senior Lending Network, Bank of
America Home Loans, Metlife Home Loans
and Genworth Financial Home Equity
Access Inc.
“Live Well Financial is pleased to join
NRMLA’s Wholesale Lender Program as
a charter member,” said Chris Palumbo,
senior vice president and COO of Live
Well Financial. “We look forward to
partnering with NRMLA and all of its
members to help the reverse mortgage
industry continue its impressive
growth.”
Sherry Apanay, senior vice president
of wholesale lending at Generation
Mortgage Company, said, “Generation
Mortgage is pleased to support NRMLA
and our industry in this new endeavor.
Wholesale lenders working together for
the good of the reverse mortgage
industry should make us all stronger.”
For more information, visit www.nrmlaonline.org.
NexBank and The
Funding Source create
NexBank Mortgage
Dallas-based NexBank,
a banking and financial services company and commercial
mortgage lender, has announced the
establishment of NexBank Mortgage
through a partnership with The Funding
Source, a residential mortgage operation based in Dallas, Texas. NexBank
Mortgage, which offers several residential
loan programs, from traditional mortgages and Veterans Affairs (VA) loans to
reverse mortgages, operates several field
offices with seasoned loan counselors.
The Funding Source also has a mortgage
technology platform that allows consumers to simplify the mortgage application process online, while still receiving
service from local experts. This partnership allows NexBank greater gains of
scale in originating loans as it joins its
current commercial and wholesale mortgage lending activity with the residential
mortgage operation.
“NexBank is honored to have the
opportunity to build a single operating
alliance with The Funding Source and
the company’s founder, Tish Ashley,”
said NexBank President and Chief
Executive Officer Davis Deadman.
“Together, we have the capability to
offer consumers outstanding knowledge of the local market, expertise in
crafting custom loan decisions and
assurance to provide mortgages of
nearly any amount.”
BY GIBRAN NICHOLAS
Is This Time Different?
According to the US Census Bureau, the
population of the United States has
grown by an average of 1.27 percent
every single year since 1900. At current
population levels, this means that we
are adding about three million people
to our population annually. As our population grows, we have about 1.3 to 1.5
million new households that are
formed each year. Over the last 30
years, the average growth in new households has been about 1.4 million each
year. These can include people who
graduate from college and enter the
workforce, and adults who are currently
living with their parents who decide to
move out on their own. Of course, these
people will need a place to live.
The growth in population isn’t the
only thing that will increase the
demand for new housing. In fact,
approximately 300,000 housing units
are demolished each year. This is primarily due to functional obsolescence
because houses become old and outdated. This means that the demand for
new housing is about 1.7 million new
units each year in order to replace the
demolished homes and accommodate
the new households being formed each
year.
Number four: Less homes
are being built
It’s no secret that many home builders
are going out of business and building
less homes. In fact, the number of new
housing units being built went from a
peak of 2.1 million in 2005 to less than
one million in 2008. New housing starts
for 2009 are also scheduled to come in
below one million as the market contincontinued on page 40
1. Go to www.ruralhomeloan.com
2. Pick a low fixed rate for your borrower
3. Set closing date then schedule dinner and drinks!
Lending in TX, NM, and OK
O SEPTEMBER 2009
“Innovative Rural Financing since 1993”
Once upon a time, the housing market to some charts that contain the results
and economy at large was full of of Professor Mayer’s research.
euphoria and excitement. The Great
During the real estate boom years of
Housing Boom (GHB) of 2003-2006 was 2003-2006, the index values went way
rumored to be different than any other above the historical average in markets
boom in the entire history of the world. like San Diego, Los Angeles, Phoenix and
House prices were never expected to Miami. During those boom years, it was
come down from their lofty levels. “This much more affordable to rent a home
time is different,” said all wise people versus owning a home. Now that house
in Everyoneisaguruland. Well, we’ve all prices and mortgage rates have declined
seen how THAT turned out …
so much, the index values have broken
So, let’s try it again …
far below the historical
Once upon a time, the
average. This means that
housing market and econit is now much more
omy at large was full of
affordable to own a home
distress and depression.
versus renting a home in
The Great Housing Bust
those markets.
(GHB) of 2007-2009 was
rumored to be different
Number two:
than any other downturn
Housing is more
in entire history of the uniaffordable now
verse. House prices were
than at any
never expected to go up
point in recent
from their modest levels.
memory
“The
great
investor
“This time is different,”
The National Association of
Sir John Templeton
said all the wise people in
Realtors (NAR) has a nifty
Everyoneisaguruland. I
statistic they publish called
once remarked: The
wonder how THAT will
the Housing Affordability
four most expensive
turn out?
Index (HAI). The HAI measwords in the English
The great investor Sir
ures whether or not a typilanguage are ‘this
John Templeton once
cal family could qualify for
time is different.’ I
remarked:
a mortgage loan on a typiThe four most expen- agree; and hopefully
cal home. A typical home
sive words in the English
is defined as the national
you will too …”
language are “this time is
median-priced, existing
different.”
single-family home as calI agree; and hopefully you will too culated by NAR. The typical family is
when you look at these four reasons defined as one earning the median famwhy house prices are poised to (gasp) go ily income as reported by the U.S. Bureau
up at some point over the next few of the Census. The prevailing mortgage
years.
interest rate is the effective rate on loans
closed on existing homes.
Number one: It costs less
An affordability index value of 100
to own a house than it
means that a family making the median
does to rent one
income has exactly enough to qualify for
One way to figure out whether housing an 80 percent mortgage on a medianis over or undervalued, is to compare priced home. For example, the index
what it costs to buy a home versus what value of 107.6 in the year 2006 meant that
it costs to rent a home. In fact, Professor a median-income family had 107.6 perChris Mayer, a world-renowned econo- cent of the income necessary to qualify for
mist from Columbia University, has cre- a conventional loan covering 80 percent
ated a very simple method of doing just of the home values at that time. So far in
that. His method, called STATA, uses a 2009, the index value has averaged
series of calculations to compare the around 171.6. This means that a mediancost of renting a home versus owning a income family has 171.6 percent of the
home in a certain marketplace given income needed to qualify for a mediancurrent house prices and mortgage priced home. In other words, owning a
rates. Visit my blog at www.gibranni- home today is a whopping 59.48 percent
cholas.com or “Facebook me” for a link more affordable than it was in 2006!
Number three: The U.S.
has a growing population
33
cycle. Again, all of this is the result of an
industry that has been largely unregulated. Gone are the “fog-the-mirror-and-signhere” easy-qual loan programs. The
Obama Administration has already set
forth “new and improved” Regulation Z
rules. If these proposed rules go unchalan abundance of “low hanging fruit” lenged and unchanged, they will be effecfound it relatively easy to make an tive Nov. 23, 2009. One of the provisions of
amazing amount of money. Our industry the new Regulation Z rules will allow the
was overrun in the last business cycle by federal government to regulate what loan
what I refer to as “white collar migrant originators can make. This is both a threat
workers” … those who saw an opportu- and an opportunity. This is the result of
nity and “made hay while the sun what many outside observers viewed as
shined.” For that migrant group, their loan originators steering consumers into
mortgage “career” was more of a career loan programs/products that were riskier
of convenience than a career of choice and resulted in an epidemic of defaults
and foreclosures. Whether
rooted in commitment.
or not you agree or disBack then, it was easy and
agree with this assessment,
convenient to have so
the argument for or against
many calling you to refithis issue is moot at this
nance that you couldn’t
point. The new rules and
get to all the calls. It was
regulations have been
at a time when you had so
already written and are quimany “easy-qual” loan
etly going through the U.S.
programs that you could
Department of Housing &
get almost anyone a mortUrban Development’s 120gage. It was when the
day comment period. Loan
commission splits were at
originator compensation
historical highs and you
will be regulated within
were making a fortune
“We are going from
Regulation Z. What is a bit
and thought you deserved being a non-regulatsurprising to me is how few
every dollar of it because
ed industry to
know about the new
of what a genius you
potentially being a
Regulation Z rules and that
were. It was a time when
grossly over-regulateven fewer are making any
you would go to a party
ed industry.”
protest. It makes me wonand your friends envied
der if our industry is fightyou pulling up in an
expensive car and “living large.” Only ing so many battles on so many fronts that
later did we discover that the car, house they are distracted or maybe have simply
and lifestyle were financed to the max. resigned themselves to the fact that all of
But all of that was a mirage … it wasn’t this is happening with the mistaken
real and our economy is suffering from thought that “there’s nothing they can do
the consequences of that season of about it.”
We are talking about topics such as
excess. Not surprising, regulators are
showing up like firemen to a five alarm these every week on my weekly Internet
fire that has long since burned itself out. radio program called “Lykken on Lending.”
Nonetheless, they are determined “to do To listen, go to www.blogtalkradio.com and
something” to make sure this never hap- type in “Lykken on Lending” in the “Search”
pens again. Hmmm … what are the box. You will be able to listen to each “live”
broadcast, as well as all the archived prochances of them getting it right?
grams. I welcome you to tune in and listen
to us discuss the new HUD Regulation Z
Rules and regulations
The pendulum is swinging back from the rule and what you can do about it. We also
extreme of “irrational exuberance” to an talk about all the other pending rules and
extreme of “irrational regulation.” New regulations that are coming down the road.
obstacles, the likes of which this industry We are going from being a non-regulated
has never before seen, are coming in the industry to potentially being a grossly overform of new rules and regulations that we regulated industry. Most of us recognize
will have to deal with in this next business that regulation is not the answer. It will ulti-
A View From the “C” Suite: What
Lies Ahead for Mortgage Lending?
SEPTEMBER 2009 O
By David Lykken
34
Many today are asking themselves: “What
is the future of mortgage lending?” Given
the onslaught of new rules and regulations, and a seemingly endless number of
stories chronicling the closures and/or failures of banks, warehouse lenders and
mortgage companies, it is easy to understand why almost every C-level executive is
wondering what the future holds for the
industry. In a time when the obstacles
seem to be multiplying and opportunities
fading, it is important that the C-level
maintains an intense focus on the course
they chart for their company. But be
encouraged C-level executive, as there are
unprecedented opportunities such as
haven’t been seen in four decades. In fact,
I will make this bold statement at the front
end of this article … “More wealth will be
created in the next five years in mortgage
banking than in the past 25 years!”
“How can this be?” you may ask. The
answer is this threefold:
1. The need for a viable mortgage
industry has never been stronger for
the health and healing of our economy.
2. The industry has been decimated
over the past couple of years and many
companies, even some of the biggest,
have closed their doors.
3. The barriers of entry to our industry
have increased as a result of obstacles
facing our industry, the two biggest of
which I have outlined below.
The foundation for my bullish view for
our industry is based upon the fact that (1)
homeownership/housing is the foundation and fabric of the United States economy and that (2) this requires a vibrant and
healthy mortgage industry. This article is
dedicated to those of you who have made
the mortgage industry a “career of choice”
as apposed to a “career of convenience.”
The mortgage industry …
a career of choice or
convenience?
Those who entered the mortgage industry in the “good times” when there was
mately result in increased costs and delays
to consumers. We only have to look to the
Home Valuation Code of Conduct (HVCC)
fiasco to know this to be a fact. HVCC was
rushed into law. Then, in less than a year,
there were significant efforts to put a moratorium on it or rescind it altogether; at least
that is what appears to be happening at the
time this article was written.
Warehouse liquidity
If the reports of new rules and regulations weren’t enough, our industry is
experiencing one of the worst warehouse
lending liquidity droughts on record. In
August, the takeover of Colonial Bank by
the feds sent shockwaves across an industry already traumatized and fragile by a
litany of failures and closures. Colonial
Bank had quietly and steadily grown to
become the largest warehouse lender in
the country, providing $4 billion in warehouse financing to a large number of
independent mortgage bankers. Think
what could have happened if Colonial’s
warehouse lending facility had suddenly
been shut down when the feds took over
the bank. The thought of that possibility
raised the anxiety levels to an all-time
high for those independent mortgage
bankers who had a Colonial warehouse
line. And if Colonial’s warehouse unit had
been shut down, the consequences could
have impacted almost everyone in the
industry.
The significance of the Colonial Bank
failure more vividly comes into focus
when doing the following math … If
Colonial’s $4 billion in warehouse
financing were to have suddenly gone
away, and if the average loan amount
on the line was $175,000, it would have
immediately resulted in 22,857 loans
not funding. And it is possible that this
number (22,875 loans) would go up by
the same multiple as the rate at which
the mortgage banker was “turning”
their warehouse line in a month.
Please note that a fair number of
mortgage bankers successfully ‘turn’
their warehouse line anywhere from
one and a half to two or even three
times a month. The expression “the
number of times a mortgage banker can
‘turn’ their warehouse line” means the
number of times they can use the same
warehouse line dollars to: (1) Fund a
loan, (2) Sell that loan and then (3) Fund
another loan. For example, if a mortgage banker turns their $10 million line
industry need to return to putting
ethics over earnings, principles over
profits and re-centering the American
Dream of Homeownership on the age
old firm foundation of “secure at
home” ownership, rather than “size of
home” ownership.
Where obstacles abound, opportunities much more abound. In the next five
years, we are going to have an abundance of both. Remember, the greater
the obstacles, the greater the opportunities … and the greater reward!
David Lykken is president, mortgage
strategies and managing partner with
Mortgage Banking Solutions. David has
more than 34 years of industry experience
and has garnered a national reputation.
David has become a frequent guest on FOX
Business News with Neil Cavuto, Stuart
Varney, Liz Claman and Dave Asman with
additional guest appearances on the CBS
Evening News, Bloomberg TV and radio.
He may be reached by phone at (512) 9779900, ext. 101 or e-mail dlykken@mortgagebankingsolutions.com.
To listen to author David
Lykken’s online radio show,
log on to www.blogtalkradio.com and type in “Lykken
on Lending” in the “Search” box on
the right-hand side of the page.
The Future of Mortgage Banking
By Tommy A. Duncan
My company, like so many others, is
changing the way we conduct business to
keep up with the ever-changing market
and environment. We are focusing on
several tenants in our business: Customer
service, technology and quality.
Customer
service/phones
mation is secure and protected, which is
why every data center should make an
SAS-70 Type II Certificate available.
Customers want seamless integration
and processes, and providing this
through a variety of technologies in
order to reduce work load efforts for
efficiency is what today’s customers
expect.
Quality
O SEPTEMBER 2009
Make it a point that all
The end result or the final
phone calls are answered,
product must be of great
even if someone dials a
quality from the perspecdirect line. After four rings,
tive of the customer. If
the lines hunt and the
you have the best cusphone dials the all lines that
tomer service and have
are available or forwards
integrated the best techthe call on to an on-call repnology, it will not matter
resentative. Customers want
if the final product has
to speak to a person regardnot met the customer’s
less if they are helped or
expectations. Two years
“Yes, we are all impactnot. When customers call, it
ago, my company (Quality
ed by regulatory and
is usually a sense of urgency
Mortgage Services), rebecause they are trying to legislative changes, but evaluated these three tenthere will continue to
get approved with Federal
ants of customer service,
Housing Administration be a demand for home technology and quality,
(FHA) loans, a line of credit and property financing. and set goals to strive to
with an investor or they are
The professionals who make this our core combeing audited. These things
petency. The results have
plan and prepare for
are important to the cusenabled us to gain more
these regulatory
tomer, and because they
business and grow as a
are routine in daily opera- changes will be the ones respectable business in
tions, every customer who will be able to per- the industry.
form the financing.”
must be treated as if they
are the company’s sense of
On the horizon
urgency to support them
The change that we see on
in resolving their problems or concerns.
the horizon that may be necessary to
keep up with an ever-changing market is
Technology
change itself. Everything is changing in
Customers want to feel that they are the industry. Those who do not change
getting the best when they ask for serv- with the industry will surely fail. In order
ices. Show them the additional value of to stay current with the changes, one
technology in providing their results.
Customers want to feel that their inforcontinued on page 36
two times in a month, then, in effect, score this point, consider the closure of
they could fund $20 million of mort- TB&W in August. The takeover of Colonial
gage loans in a month and if they could Bank was the catalyst of this very large
turn is three times a month, they could independent mortgage banker to close its
doors. TB&W’s closure had a huge impact
fund $30 million dollars a month.
If Colonial’s warehouse banking cus- on many smaller independent mortgage
tomers turned their warehouse lines companies who were selling them loans,
two times a month, then more than $8 the impact of which is still having an effect.
Again, this is a serious crisis that not
billion dollars of funding would have
been immediately removed from the only threatens the survival of many indemarket. Without this happening, the pendent mortgage bankers today, but also
mortgage lending industry is already a significant percentage of the funding
experiencing a capacity issue because capacity that is badly needed to fuel and
of so many lenders going out of busi- facilitate the economic recovery this
ness, or if still in business, they are nation so desperately needs. It has been
already operating at maximum funding suggested that the lack of warehouse line
capacity. Is it any wonder when the liquidity in the residential financial marFederal Deposit Insurance Corporation kets could be the Achilles tendon of an
(FDIC) negotiated BB&T taking over economic recovery. As a result, the U.S.
Colonial’s branches that FDIC required Treasury has been meeting with mortgage
as a part of the deal that BB&T keep bankers and warehouse lenders. There
Colonial’s warehouse banking unit has been talk of letting Fannie Mae,
operational for a minimum of one Freddie Mac and Ginnie Mae get involved
year? If they hadn’t, it would have ugly. with warehouse lending for a season, but
that now has lost
Taylor Bean &
momentum with the
Whitaker (TB&W)
“In fact, I will make this bold
departure of Joe
had to close its
statement at the front end of this Murin as president
doors as a result of
article … “More wealth will be
of Ginnie Mae. The
the Colonial Bank
created
in the next five years in
Treasury could do
failure. Many mortgage companies mortgage banking than in the past much to alleviate
this crisis without
25 years!”
would have either
spending one dollar
been forced out of
business or forced to significantly of tax payer money in the form of another bailout. One such possibility is to get
reduce their funding capacity.
Because of a serious warehouse funding the Federal Home Loan Bank involved.
shortage in our country, it can take three to Bottom line is that we need leadership
six months at a minimum to obtain a new and action from the number one “C-Level
warehouse line. Not only that, every ware- Suite” in the country, the White House …
house lender still in business has “raised specifically, President Barack Obama and
the bar” of minimum requirements. Sadly, his administration.
many independent mortgage bankers
would not qualify today for a new ware- The opportunity and the
challenge
house line if they lost their existing line.
For the most part, most warehouse At the beginning of this article, I made
this bold statement: “More wealth will
lenders require the following:
be created in the next five years in
1. Higher “tangible” net worth levels. mortgage banking then in the previous
Tangible is synonymous with cash or a 25 years.” As outlined above, the road
very liquid asset. With the exception of to these potential treasures may be
a few remaining “capture” warehouse treacherous and tumultuous, but it will
line providers, it is difficult to get a come to pass … mark my word. My
warehouse line with less than $1 mil- hope is that for those of you who have
lion tangible net worth. Most won’t talk made mortgage banking your career of
unless there is a minimum tangible net choice, will see these “obstacles” as
“opportunities” to be overcome knowworth of $3 million, preferably more.
ing that doing so will position you to be
2. Almost without fail, every warehouse one of the few that make so much. The
lender requires a company be prof- good times typically don’t bring about
itable for the past two years. Many com- enduring riches. Hardships, while never
panies have struggled with profitability pleasant for the season, cause our roots
over the past two years. As a result, to grow down deep, positioning us for
many otherwise good companies are that which endures … something that
being turned down even if they have involves much more than just riches.
Above all else, and even more
turned the corner and are profitable
important than any riches that could be
today.
earned, I challenge each of you to leave
The warehouse liquidity crisis isn’t limit- a legacy of excellence for the next gened to just smaller companies. To under- eration of mortgage bankers. We as an
35
must stay informed. Stay active with
local, regional and national mortgage
professional trade organizations, and
receive industry updates. Attend trade
shows and luncheons. Read, read and
read some more because different trade
publications may take certain points of
view and you need to balance it all out.
Be flexible and have the ability to look
ahead to see how change will impact
your operations.
SEPTEMBER 2009 O
The changing regulatory
landscape
36
New laws and policies are shaping the
industry. Whether you agree or disagree
with these changes, we all must adjust
and adapt. All of the new policies and
laws will impact us all. Look at what
occurred in 2008 and 2009: Red Flag
Rules, the Home Valuation Code of
Conduct (HVCC), the Consumer Protection
Financial Agency (CPFA), Truth-in-Lending
and loan modifications are just a few.
There are more changes that will require
more flexibility and adjustment such as:
How will the CPFA affect bank mortgage
originators versus mortgage broker originators? Will the new proposed changes to
HVCC affect the larger lenders who control appraisal management companies
(AMCs) or who dictate to brokers which
AMC to use?
In 2010, I personally think the banks
and large lenders will be mostly affected
by the proposed policies and laws that
went into effect in 2009. I also feel that
with Fannie Mae and Freddie Mac coming
out of conservatorship, making loans will
become easier. We have yet to see the
impact on the industry and the consumer
as a result of the new Truth-in-Lending
laws, CPFA, the Troubled Asset Relief
Program (TARP) and the Term AssetBacked Securities Loan Facility (TALF).
Technology leading the
charge
There are many new technologies available that will take the mortgage banking market to the next level. A few of
these technologies lie in pre-funding
and post-closing quality control and
quality assurance. Some lenders have
started passing some pre-funding costs
and responsibilities to the broker, such
as ordering tax transcript and verifying
Social Security numbers. The Mortgage
Bankers Association, in conjunction
with Mortgage Industry Standards
Maintenance Organization (MISMO), is
making benchmark progress with document standardization and data transfer
consistency. An example is Freddie Mac
Announcement 09-14, which requires
the appraisal to be uploaded in XML
(Extensible Markup Language). As
MISMO continues to maintain technology standards within the industry, the
closer we get to the seamless networking of data in business transactions
between entities. The majority of vendors who support the industry seek
MISMO approval. Those vendors who
are not MISMO-friendly will not be able
to perform services in the future.
With the industry so focused on
compliance and fraud prevention,
more technology will fall in line to support those who are most at-risk, such as
investors and lenders. With the CPFA
coming online, the broker will have
more skin in the game, and many of
these technologies will be pushed down
at the origination level in order to prevent fraud and maintain compliance.
An example of this is the Financial
Crimes Enforcement Network (FinCEN),
who recently announced that it is looking for an advance notice of proposed
rule-making (ANPRM). FinCEN is looking
to solicit public comment on a wide
range of questions pertaining to the
possible application of anti-money
laundering (AML) program and suspicious activity report (SAR) regulations to
non-bank residential mortgage lenders
and originators. This new initiative was
brought about to target foreclosure rescue scams and loan modification fraud.
These initiatives are helping in the
coordination of information and
resources across agencies to maximize
targeting and efficiency in fraud investigations, alert financial institutions on
emerging schemes, step up enforcement actions, and educate consumers
to help those in financial trouble avoid
becoming the victims of a loan modification or foreclosure rescue scam.
FinCEN has never included the originator in their efforts because it was
focused on banks or larger financial institutions. Because of the sheer number of
loan officer and brokers, FinCEN just
increased its capability. Every mortgage
professional has a responsibility to report
fraud. I believe that trade organizations
will fully support FinCEN’s efforts. Having
the brokers participate in this type of
technology will lend greater credibility to
the retail side of the mortgage industry.
To view the ANPRM, log on to
http://edocket.access.gpo.gov/2009/pdf/
E9-17117.pdf. To comment, log on to
www.regulations.gov, select “Submit a
Comment” and type “RIN 1506” in the
keyword search box.
In order to survive, adaptation to the
endless stream of regulatory and legislative changes that are impacting the
industry is a must. The old saying “the
strong will survive and the weak will be
devoured by the strong” applies to the
mortgage industry. As a leader in your
operation, you must write out your core
competency and revaluate them often.
Analyze what technologies work and
which do not work. Evaluate what can be
more efficient in workflow process and
other processes, and find or develop the
technology to support it. Do not become
complacent in anything, and always treat
the customer as if they are your sense of
urgency. Know the law … policies and
changes that are taking place around
you. Be involved in the industry and support the trade organizations. Work
toward credentials and require the same
of your staff. Read, read and read some
more … stay informed so that you can
plan and prepare for the future. Keep the
vision of the industry, regardless if you
embrace this vision or not.
Yes, we are all impacted by regulatory
and legislative changes, but there will
continue to be a demand for home and
property financing. The professionals
who plan and prepare for these regulatory changes will be the ones who will be
able to perform the financing. The race
has already begun, and some have
already quit or lost. Some have restarted
with a new team. I am encouraged that
we will continue forging onward by
adapting and adjusting because business
is going to get better. This is an exciting
time in the mortgage industry and a very
interesting time to be part of it.
Tommy A. Duncan is executive vice president of Quality Mortgage Services LLC.
He may be reached by phone at (615)
591-2528, ext. 124 or e-mail taduncan@qcmortgage.com.
Visit author Tommy A. Duncan’s
Quality Mortgage Services LLC
Web site at www.qualitymortgageservices.com for more information on quality control programs and
compliance solutions.
Online Lending for the New Decade
By J.P. Kelly
to provide a phone number and physical address. But when it has come to
Our cell phones, our cars, our games, using a Web site to solicit and foster
our stores, our homes, and of course, loan applications, most lenders have
our computers … we don’t just use the missed the gravy train. Estimates on the
Web, we are the Web. The Internet is so numbers of loans originated online vary
pervasive, so much an
between seven and 12
integral part of our daily
percent. Instead of initiatlives, it’s hard to believe
ing the transaction online,
that just eight years ago,
these lenders are missing
half of the families in the
out on the opportunity to
United States did not
close loans.
have Internet connecThis is not to say lenders
tions. Now, according to
are completely at fault.
Nielson NetRatings, more
Early on, security concerns
than 72 percent of houseabout private data required
holds have Internet conwhen applying for a loan
nections. No wonder the
made consumers skittish.
Web has become the
However, as technology
dominant source of
security has grown, the
“What was once a
research, social interacvirtual brochure and convenience of initiating
tion and commerce for channel for just deliv- transactions from the combusiness.
ering information has puter, and the lower cost of
And consumers have
managing accounts online,
become an online
adopted the Internet as
many lenders see this chanplayground where
more than just an infornel growing as more
users interact with
mation source. According
lenders offer online mortfriends, family and
to the United States
gage capabilities.
Census Bureau, electronic
However, the days of
places of business.”
commerce
generated
simply slapping an Adobe
more than $3.3 trillion in
PDF version of a 1003 or a
sales in 2007, the most recent data short form to be followed by a series of
available. Don’t believe me? Google it. follow-up calls by a loan officer are long
See what I mean? It has worked its way gone. People want answers, including
into our language as well.
rates, payments and whether they are
Like many businesses, mortgage approved, now.
lenders have traditionally used the
There are two primary keys to makInternet only as a way to provide basic ing a lender’s Web site a growth channel
company contact information content for online mortgages. The first is creating
a site that is useful, informative and easy
for potential borrowers to find. The second is creating a work-flow to your backoffice that removes obstacles and
enables interested borrowers to begin
the loan process immediately and prevents rekeying or a laundry list of follow
up questions from your originators.
Where are you on the Web?
Today’s market is about making money,
and that begins on the Web with a wellbuilt consumer-facing Web site. But what
then? Lenders have several choices when
it comes to lending platforms. The overwhelming favorite choice? You guessed
it—the one they have in place now.
No one likes change, and most
lenders tend to use software they know,
warts and all. But the constant flow of
costs on developing, implementing and
maintaining the software have prompted even the most change-averse
lenders to consider changing to a Webbased lending platform that saves them
time and makes them money. Only
online loan origination software (LOS)
systems can offer all that.
When selecting a mortgage software
partner, verify that the system will truly
make the loan application process
more efficient. Many online lending
programs only provide nice-looking
Web sites. When a customer needs to
contact the lender, the forms generate
e-mails, which then must be processed
by a loan originator before the customer can move to the next step in the
loan process.
At best, this means time-consuming and error-prone data re-entry
J.P. Kelly is president of operations for
OpenClose, a developer of Web-based
mortgage lending software. For more information, e-mail jpkelly@openclose.com or
visit www.openclose.com.
O SEPTEMBER 2009
The biggest challenge in turning the
online mortgage portal into an origination channel is converting Web site visitors to borrowers. Visitors to a lending
Choosing an online
lending system
into the LOS. At worst, this can mean
a delay in contacting the customer,
enabling them to originate the loan
with a more responsive competitor.
These days, all online lending systems should tie directly into the LOS,
eliminating the data re-entry and
pushing the loan directly into the
workflow. The best systems also support eMortgages, providing paperless
options for disclosures, closing documents or even the signing.
Lenders should also seek an online
partner who will provide the tools
needed improve SEO. These tools
include keyword testing and Web pages
enhanced to promote relevant search
terms. Lenders should also expect their
online lending system to provide the
tools needed to build relationships with
the customers. Tools to manage e-mail
newsletter systems, online referral programs and consumer-focused articles
are all available in today’s online lending programs.
The World Wide Web has evolved significantly over the past two years—and
it has changed us all. What was once a
virtual brochure and channel for just
delivering information has become an
online playground where users interact
with friends, family and places of business. Build an online lending channel
that truly saves time and money while
simultaneously building relationships
with borrowers.
Converting window
shoppers to buyers
loan is immediately entered into the
underwriting workflow.
Though you can’t generalize about
age, in general, the older the borrower,
the less likely they are to apply or do
any transaction online. Going after firsttime homeowners or reverse mortgages? Build your Web site accordingly.
The number one method borrowers use
to locate information online is the search
engine. While Google is the current market leader, Microsoft’s Bing, Yahoo! and
other sites also provide search results to
millions of Web surfers each day.
When you are sitting at your computer, do a search for “Mortgage Lenders,”
followed by your state and/or city. If
you’re not on that first page, you will
not be found by potential borrowers.
So how can you ensure that your Web
site appears high on the results list of
your potential customers? By utilizing
simple techniques, referred to by online
marketers as Search Engine Optimization
(SEO), that makes your site search engine
friendly. These are not tricks or
unscrupulous methods but focused marketing. It’s like a tall man wearing a red
cap in a crowd. Easy to find.
A lot has been made of those “red
hats” that Web site developers who create your Web site put in the code. But
that’s just a small part of it in today’s
search engine-crazed world. Relevant
content is more crucial, which means
placing articles, information and tools
that are useful for a potential homebuyer on your site. This can include
items such as mortgage preparation
checklists, daily interest rates, advice
on the mortgage process and a selection of calculators.
It is not difficult to create this kind of
content … it’s just time consuming.
Lenders can partner with online content
providers to assist with developing a site
that is search engine friendly and contains
content relevant to borrowers. These partners can provide articles, calculators, daily
rate updates and other tools that help
borrowers quickly find the information
they need. This content must be kept
fresh with updates as often as possible.
But like most things in technology,
the devil is in the details. Two sites
might look identical with the same
images, colors and content. Build it
right and you’ll rise to the top of the
searches. Build it wrong, and you’ll
never be found. Scary but true.
Web site ultimately seek one of three
things from the Web site: Research,
contact information for initiating a loan
in person or an online loan application.
Most visitors to the Web site are
merely seeking research. They may be
comparing rates, learning about the
lending process or vetting local lenders
to see whom they wish to contact. The
best way to keep these borrowers tied
to your lender is to encourage them to
take action. Offer an informational email newsletter with tips on buying a
home or regular rate updates. Invite
them to subscribe to an educational
blog or social networking page, such as
Facebook or LinkedIn.
The next level of loan shopper is
uncomfortable completing a transaction online, but they are interested in
using your loan office to originate the
loan. There are two things that this
shopper needs. The first is simple
instructions on how to call or visit the
office to being the loan application. The
second is an online pre-qualification
form, which also requests that the loan
officer to contact the borrower. Online
lending software should be able to provide a form that links this form directly
into the sales channel, so that originators can follow-up on a qualified lead.
The final level is the online buyer.
This borrower demands an online
system that lets them search for the
loan they want, provides a full mortgage application online, supports the
uploading of financial documentation and initiates the underwriting
process. The online lending system
should be able to confirm receipt of
the application and ensure that the
37
The Future of the Mortgage Industry
A discussion with the executive team at Residential Finance Corporation
Michael Isaacs
President of Residential
Finance Corporation
David Stein
Vice President of Residential
Finance Corporation
SEPTEMBER 2009 O
In the past 18 months, the mortgage
industry has undergone the greatest
changes and challenges since the Great
Depression. With the industry poised at
the crossroads of financial services and
housing—the nation’s two most challenged sectors of the economy—mortgage professionals everywhere are concerned about the future. In the following feature, the executive team at
Residential Finance Corporation discusses the current state of affairs and where
the mortgage industry may be headed
in the coming months and years.
38
Regulatory issues
Michael Isaacs: We are very optimistic
about the industry’s future. Offsetting
every challenge are tremendous opportunities for the companies that are both
well-prepared and flexible enough to
weather unforeseen obstacles that will
continue to crop up. Challenges such as
the rapid influx of new legislation
require lenders to keep up with all regulatory and legislative changes—
including those looming on the horizon. Regulatory compliance with these
new laws can impact your business on a
daily basis. Some of the recent laws
affecting our operations leave gray
areas and inconsistencies that need further clarification and simplification.
Until the stream of new laws and regulations stabilizes, it will be difficult for
us to deliver the range of services that
we want to provide, lower pricing and
shorten time-to-close. We need to see
stabilization on both the legislative and
regulatory fronts.
David Stein: Regulatory challenges are
creating so many new hurdles for mortgage bankers and brokers that compliance is almost out of reach. Each arm of
Congress, each regulatory body of the
federal government, and each state has
Darren Fleishman
CFO of Residential Finance
Corporation
their own agendas. Unfortunately, these
regulatory bodies sometimes work at
cross purposes. As regulatory requirements become more onerous, many good
companies won’t be able to comply and
will disappear. Rates go up when competition goes down. As fewer lenders are left
standing, consumers will suffer.
Government regulators need to partner
with the industry to avoid a credit crunch.
Large industry investors need to buy and
sell mortgages so bankers and brokers
have a market to sell to investors and
consumers. Once regulators can learn to
create better opportunities for the industry, consumers will win.
Darren Fleishman: We are all struggling with the increasing difficulty of
understanding and complying with
the rapid evolution of state and federal regulations. Most agree that some
level of regulation is necessary, but
the current combination of state and
federal statutes makes compliance
much more difficult than it needs to
be. Due to heavy compliance burdens,
marginal lenders will continue to drop
out of states that are no longer economically viable for them. Over the
next year, statutes and processes
should firm up and we can better
understand the cost of doing business
in this evolving market. However, it
still remains to be seen how this component of the mortgage arena will
play out. If done correctly, consumers
will be protected by regulations ensuring mortgage professionals are qualified to serve them. But, if done incorrectly, onerous fees and regulations
will push out quality companies from
competing in multiple markets,
regionally limiting choices for current
and potential homeowners. It seems
like we are headed towards “incorrectness,” but we will see.
Obi Egbuna
Vice President, Sales of
Residential Finance
Corporation
Obi Egbuna: Rapidly changing state
and federal regulations require loan
officers to be more diligent than ever.
Special training and regular refreshers
have long been a primary focus of our
sales department. Now it’s even more
important. Regulators need to realize
that some of their well-intentioned legislation designed to help consumers
could actually be hurting them. If more
companies are choked out by unrealistic legislation, the consumer is the ultimate loser.
Licensing
Isaacs: With licensing and compliance
undergoing such drastic changes, we’ve
invested a lot of time and money strengthening our compliance department, adding
staff and increasing our budget.
Egbuna: Licensing is another serious
issue facing our industry that can
potentially constrain sales. We do business in 27 states and must stay on top
of each state’s licensing changes. Lack
of standardization means requirements
vary widely. Managing so many disparate compliance obligations adds to
our cost of business.
Doug Harris: From an operations standpoint, shifting investor and secondary
market requirements creates additional
complications. As a private mortgage
banker, we sell our loans into the secondary market. We balance a group of
investors and have to meet their multiple, frequently-changing requirements.
And when the ultimate secondary
investors, Fannie Mae, Freddie Mac and
Ginnie Mae each change their requirements, we face even further operational
changes. We’re constantly juggling to
maintain the highest levels of efficiency
and quality amidst managing ongoing
changes.
Doug Harris, COO of
Residential Finance
Corporation
Stein: Lack of securitization and a smaller pool of institutional investors means
mortgage bankers and brokers must sell
their paper to a less competitive market.
This small group of institutions has the
ability to manipulate or restrict the market, which again can hurt consumers.
Warehouse lines of credit
Fleishman: Availability of warehouse
capacity is a serious industry-wide concern. The recent exit of major players has
only exacerbated the issue. While credit
availability is likely to expand slowly,
industry players will still face restrictions
in their ability to fund loans amid an
environment of increasing fees and more
restrictive covenants. It’s no longer a
question of having the capability to fund
additional growth, but rather of maintaining the same-sized pipeline at a significantly reduced capacity. Lenders
must take a very hard look at how they
operate to maximize what capacity they
do have in this area. This step enabled us
to do significantly more business under
our own set of warehouse limitations.
Isaacs: Warehouse lines have been our
top issue over the past two years. There
needs to be more liquidity in this area
of our business. Although obtaining
warehouse lines has eased somewhat,
the leverage banks are providing is
much different now. Lenders left standing in the future will be the responsible
ones that built balance sheets, focused
on profitability and increased net worth
to maintain the necessary warehouse
lines to keep their funding at capacity
to meet their demand.
Harris: Lack of investor confidence is
one of the reasons we don’t have adequate warehouse lending capacity and
that the securitization of secondary
markets is so disrupted. As the economy
begins to rebound and investor confidence returns, these troubles will subside. I’m always looking for efficiency.
Warehouse capacity challenges require
me to be hyper-efficient. When production outpaces my ability to fund, I have
to turn the warehouse line faster to support that funding capability. I’m always
working to increase our quality and
ensure that we have the right investors
to purchase those loans quickly. Looking
forward, I expect warehouse capacity to
shrink in the short term. This situation
will be exacerbated by Colonial Bank’s
recent issues, since they represented
approximately 20 percent of existing
warehouse capacity in the industry.
Egbuna: From a sales standpoint,
being a correspondent lender is one of
our competitive advantages, so having
warehouse capacity and rapid turnaround directly impacts our sales
force. Fortunately we’ve extended our
current line and added another line to
strengthen our competitive advantage.
Compliance
Egbuna: Some compliance guidelines
will have to loosen for the benefit of
borrowers. For example, if a borrower
with a lower credit score has historically made timely payments, they should
not be shut out of a loan today.
Fleishman: The competitive landscape
continues to change, with the shakeout of
weaker players of all sizes. Overwhelming
industry challenges will perpetuate this
trend over the short term and unprepared lenders will fold very quickly. But
the future is bright for those that prepare
for sudden and unforeseen business
interruptions as partners change credit
criteria, underwriting standards, and the
ability to write loans—coupled with the
availability of warehouse capacity and
other essential elements of operating a
successful franchise.
Conclusion
Stein: Successful companies will compete using advanced marketing techniques to ensure new prospects daily.
The real estate market
Fleishman: While the recession may
cause fewer people to move or restrict
the ability for potential borrowers to
refinance or purchase a home, mortgages remain an essential part of the
mobility of American society. People
will always continue to move, so the
companies left standing in a less competitive environment will do very well.
Stein: Our nation lives and dies by its real
estate markets as we’ve seen in the past
couple of years. That will always continue
because real estate is so important. To
own real estate, people will always need
mortgages, so the future is very bright. In
the near term, the government needs to
Harris: Mortgage professionals must
maintain operational agility, especially
in this environment. You’ve got to be
able to change on the fly, operate with
plug-and-play components, cross-train
your people, and have the ability to linebalance your operations. In today’s marketplace, operational agility is critical.
Isaacs: Looking ahead as the economy
turns around, there will be fewer, albeit
more heavily-regulated, players serving
a growing pool of home buyers. For
organizations that have taken steps to
manage the impact of the critical issues
facing our industry today, I believe that
the future looks bright.
For
more
information
on Residential Finance
Corporation, visit www.residentialfinance.com.
Harris: I expect continued consolidation,
with the industry bifurcating into large
and small factions. The survivors will be
those who are nimble enough to quickly
respond to the next challenge and the
very large institutions that can absorb
changes and consolidate mid-tier lenders.
Egbuna: Under-capitalized lenders will
struggle with the additional expense of
compliance. Those that fail will leave a
less competitive marketplace behind,
to the detriment of the consumer left
facing a smaller set of mortgage product options.
Isaacs: The competitive landscape of
today’s mortgage industry looks very
different than it did two years ago. And
three to five years from now, it will look
very different than today, with less competition from fewer lenders and brokers. There will be a lot of consolidation
because many lenders and brokers cannot profitably operate with the additional overhead to support compliance,
licensing and staff to deal with regulatory and legislative issues. Surviving companies will be larger and better regulated. Companies that have survived the
past couple of years and are well-prepared for today’s more challenging business environment will find lighter competition and a more stable business climate in the long run. In some ways, this
cleansing process has been healthy for
the industry, eliminating many bad and
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O SEPTEMBER 2009
Stein: Companies must devote significant resources to compliance and
licensing over the coming years to stay
ahead of regulations and remain completely compliant with state and federal laws. Companies that don’t make
this commitment will likely be shuttered. Anyone planning to work in this
industry over the coming years should
Sizing up the competition
artificially keep interest rates low to stimulate real estate markets. Over the next
year, I expect the industry will continue to
enjoy historically low rates which can
help strengthen business.
Isaacs: Staying abreast of all current
and pending regulatory and legislative
changes on the horizon requires daily
dedication.
Fleishman: For lenders that not nationally chartered, dealing with state-by-state
regulations has become an excessive and
expensive proposition posing unique
and difficult compliance challenges.
Consistency needs to be developed in a
reasonable manner to effectively protect
consumers without creating a businessending burden for lenders.
unscrupulous brokers and lenders.
Looking forward, the industry will consist of responsible companies that have
proven their ability to survive through
the worst of times, and they’ll capitalize
on less competition.
Harris: Compliance issues always present an operational challenge. Every
new directive requires changes to
workflow, embedding new procedures
into our operations—changing forms,
processes, checklists and everything,
including controls. The new MDIA
[Mortgage Disclosure Improvement
Act] regulations on disclosing information to borrowers really impacted our
operations. A healthy future must
include the national standardization
of regulatory compliance and technology standards to allow the streamlining of operations. With the help of the
Mortgage Industry Standards Maintenance
Organization (MISMO), I believe that esign technology will be standardized and
our future will be paperless.
thoroughly investigate their (perspective) employers to ensure they are
committed enough to remain compliant. Otherwise, the company may not
provide them with a secure future.
39
heard on the street
The new partnership provides The
Funding Source with the resources of a
strong local lender and the stability of
being part of a large and dynamic
financial company.
All employees formerly with The
Funding Source will transition to
NexBank Mortgage; 14 jobs in total.
This brings NexBank’s employee total in
its mortgage business lines to almost
40, up from zero at this time last year.
For
more
information,
visit
www.nexbank.com.
SEPTEMBER 2009 O
LPS Real Estate Group
signs agreement with
eight HomeServices of
America companies
40
counsel to the U.S. Department of
Housing & Urban Development,
has joined the banking and financial services practices group of the
law firm, Arant Boult Cummings.
Lender Processing
Services Inc. (LPS), a
provider of integrated
technology and services to the mortgage and real estate
industries, has announced that it has
signed a multi-year agreement to provide its rDesk Broker Suite of products,
offered by its LPS Real Estate Group
division, to eight operating companies
that are part of the HomeServices of
America Inc. (HSoA) network.
These eight companies have signed
contracts for a variety of rDesk Broker
Suite products, including broker and
agent Web sites, lead and contact management, comparative market analysis
(CMA) and document management.
The HSoA companies currently leveraging rDesk are: Edina Realty (which services North Dakota, Minnesota and
Wisconsin); Kansas City-based Reece &
Nichols; Prudential California Realty;
Long Realty Company in Arizona;
CBSHome Real Estate in Omaha, Neb.;
Champion Realty Inc. in Maryland; and
Home Real Estate and Woods Bros
Realty, both in Nebraska.
“Over the years, the rDesk Broker
Suite’s depth and breadth of content
and functionality have evolved, in great
part, from input offered by innovative,
market-leading brokers and thought
leaders like the HSoA companies,” said
John Hensley, chief product and technology officer with LPS Real Estate
Group. “Since its inception, the rDesk
platform has leveraged new technology
and standards to deliver brokers and
agents a Web-based integrated solution
that meets their growing business
needs and keeps them ahead of their
competition.”
An affiliate of Berkshire Hathaway
Inc., Minneapolis-based HSoA is a
provider of homeownership services
and has a nationwide network of companies in 19 states that offers integrated real estate services, including brokerage services, mortgage originations,
title and closing services, property and
casualty insurance, home warranties
and other homeownership services.
“These companies are leaders in
their respective markets,” said Ron
Peltier, HomeServices chairman and
CEO. “To further that leadership position, they must offer products and services that set them apart from the competition. rDesk is a product that both
strengthens market presence and
enhances the customer experience.”
For more information, visit www.lpsreg.com
or www.homeservices.com.
Your turn
invites its readers to submit any information, events, passages, promotions, personal or professional occurrences that
seem appropriate and/or other pertinent data to the attention of:
Mortgage Professionals
to Watch
O President Barack Obama has appointed Ben Bernanke to a second term as
Federal Reserve chairman.
O The Appraisal Institute has hired
William T. Zimmerman as chief
financial officer.
O USA Funding Corporation of
Brookfield, Wis. has added Mark
Swan and William Diehl as mortgage advisors.
Robert Couch
O Universal Mortgage Inc. has added
commercial loan expert Howard
Abrams to its team.
O Resource Title Agency Inc. has
appointed Linda M. Short and David
J. Kozicki senior vice presidents.
O Realty Capital Securities LLC has
announced the appointment of Jeff
Kinney and Steve Williams as sales
managers.
Heard on the
Street/Mortgage
Professionals to Watch
column
Phone #: (516) 409-5555
E-mail: newsroom@nmpmediacorp.com
Note: Submissions sent via e-mail are
preferred. The deadline for submissions
is the 1st of the month prior to the target issue.
Ben Bernanke
O LoanModDVD has signed John
Ulzheimer of Credit.com as an advisor.
trend spotter
ues to work off the excess supply of the
boom years. Here’s an interesting
breakdown of new housing starts since
the year 2000:
John Ulzheimer
O The U.S. Department of Housing &
Urban Development has appointed
Shelley Poticha to the position of
senior advisor for sustainable housing and communities.
Shelley Poticha
O Freddie Mac has named Bruce M.
Witherell chief operating officer.
O Karen Binder has been named assistant vice president of marketing and
special projects for Integrated
Mortgage Solutions.
O Willie Bren has joined Chicago
Bancorp as senior mortgage banker
in the firm’s Naperville, Ill. branch.
O Stuart M. Dorf has been named senior vice president of XSite Validation.
O Dan Nissenbaum has been elected
chairman of the National Housing
Conference (NHC).
O Robert M. Couch, former general
O
O
O
O
O
O
O
O
O
2000 = 1.6 million new units
2004 = two million new units
2008 = less than one million new
units
O 2009 forecast = less than one million
units
As you can see, from 2000-2002, the
supply of new housing units each year
was just about right in order to meet
the demand of 1.7 million as outlined
above. However, things started to get a
bit out of whack with some oversupply
in the market between 2003 and 2006.
Home values went into decline from
2007-2009 as the market started working through this oversupply.
However, sometime during the next
12-24 months, the oversupply of housing units will be completely absorbed
due to the demand issues that we outlined above. In fact, if the trend continues, there could even be a housing
shortage at some point in the future
unless home builders start building new
units at a much quicker pace! Do the
math yourself:
O Annual demand for new housing
units: Approximately 1.7 million new
units
O Annual supply of new housing units:
Less than one million
O Bottom line: Demand will become
greater than the supply at some
point in the future, and house prices
will rise.
Remember, there is no “national
housing market.” All real estate markets
are local. Therefore, a state like
Michigan that is losing population may
take longer to see house prices recover
and increase, while a state that is gaining population, like Texas, may see
house prices go up much sooner.
So there you have it! This time is not
different, house prices will recover, and
you should be the one to gain more
business by communicating this to
everyone you know.
Gibran Nicholas is the founder and chairman of the CMPS Institute, which administers the Certified Mortgage Planning
Specialist (CMPS) designation. The CMPS
Institute has enrolled more than 5,500
members since its founding in 2005.
Gibran is also the chairman of Published
Daily, a customizable online magazine,
newsletter and marketing service that
helps professionals transform their
clients and prospects into a referral-generating sales force. He may be reached at
(888) 608-9800, ext. 101 or e-mail
gibran@cmpsinstitute.org.
Visit author Gibran Nicholas’s
blog at http://gibrannicholas.com where he shares
his insights on economics, real
estate and financial issues, including the
current mortgage and credit crises.
Informative Research
enhances its Red Flags
Toolkit
Informative Research has
added a sample “Policies
and Procedures” to its
Broker Red Flags Toolkit
to facilitate compliance with Red Flags
Rules. Also included in the Toolkit are summaries of the Red Flags regulations, background information from the Federal Trade
Commission (FTC), and a step-by-step checklist, specific to brokers, for getting through
the process with a comprehensive detection,
prevention and mitigation program.
For brokers who do not service loans,
the scope of identity theft procedures is
more narrow than for that of a traditional lender. However, all brokers large and
small must create and document their
own program and the sample policies
and procedures will get them started.
As part of its suite of fraud and compliance solutions, Information Research
also offers mortgage-specific identity
theft solutions including fraud alerts,
direct to the SSA social security verification, as well as its own Red Flags Risk
Addendum to the credit report.
For more information, visit www.informativeresearch.com.
ity assurance (QA) and quality control (QC)
user roles; enhanced integrations for
pricing adjustments from product eligibility and pricing engine (PPE) partners;
and improvements to better support
commission calculations in a manual
fashion or with Microsoft Excel, either
of which can be time consuming and
often, lead to inaccurate payments.
CommissionTrac automates every
aspect of the variable compensation
workload so that salespeople stay motivated and focused on originating and
accounting staff can both save time and
be more accurate with commission calculations. CommissionTrac 2.0 enables
lenders to deliver a 24/7 Web-based
commission pipeline, where sales
agents can continuously monitor estimates and time disbursements.
“Nothing de-motivates a sales rep
faster than messing up their commissions,” said Rob Katz, president of DMD.
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O SEPTEMBER 2009
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DMD releases DataTrac
Version 9.0 and
CommissionTrac 2.0
Del Mar DataTrac Inc. (DMD), a
provider of loan automation
solutions for mortgage lenders,
banks and credit unions, has
released version 9.0 of its workflow
automation platform. The 9.0 release
encompasses the core products within the
suite, including new versions of DataTrac,
WebTrac, DocumentTrac, InTrac, TracTools,
AutoPrice and the Vendor Services Platform
(VSP). This release addresses 246 product
requests. Version 9.0 is designed to facilitate
faster loan processing and underwriting,
while reducing lenders’ risk in the face of
regulatory uncertainty. It features streamlined user screens, new user roles and builtin compliance features.
Enhancements in Version 9.0 include:
Updated underwriting worksheets with
reorganized decisioning, credit and property information fields; improved new
fields for appraisal, property and flood
certification information; revised county
management with new Fannie Mae loan
limits, county specific fields and a built-in
administrative utility to mass update
county-level data; refined underwriting,
condition sign off (prior to funding), qual-
underwriting functionality, specifically
Federal Housing Administration (FHA)
underwriting.
Version 9.0 also includes enhancements to DMD’s other software solutions,
including DocumentTrac, an electronic
document management solution for
mortgage bankers; InTrac, a point-ofsales solution and WebTrac, a Web-based
originator portal.
DMD has also announced the release
of CommissionTrac 2.0, the company’s
next generation commission solution.
CommissionTrac 2.0 automates the calculation, timing, communication and
reconciliation of commissions. The
solution is a flexible and configurable
application that eliminates costly and
time-consuming commission calculations. Lenders traditionally complete
41
SEPTEMBER 2009 O
Maximize Your Profits:
Adopt Orphan Customers
42
new to market
“Accurately and quickly calculating, com- address changing market conditions.”
municating and paying sales commis- For more information, visit www.zootweb.com.
By Gary Opper
sions is important for lenders who want
to keep good loan officers focused on Lender Processing Services
“You shall not ill-treat any … orphan.”
need of a mortgage. Encourage them to selling. This next generation of launches RediRefi suite and
—Exodus 22:21-23
share your business cards with those in CommissionTrac will enable managers to deploys HMP functionality
resolve problems before the checks get
need of your services.
Lender Processing Services
Orphan mortgages and customers are
written, ensuring that no trust or producInc. (LPS), a provider of
previously closed and unclosed loans of Wine and dine
tivity is lost over sales commissions.”
integrated technology
mortgage brokers that are no longer Have a barbecue, dinner party or a For more information, visit www.dmdinc.com.
and services to the mortemployed by your company. When these social event for these abandoned indigage and real estate industries, has
brokers leave, they usually do not take viduals. Use holidays to your advan- Zoot launches credit risk
announced its RediRefi suite of solutions is
their loans or customers with them. tage. Welcome these people to your management solution
now available to help lenders manage capacTake advantage of these leftovers and office or a local establishment. Be
Zoot, a provider of ity challenges associated with loan refinancturn them into a gourmet feast for you! sure to bring plenty of information on
instant credit-decisioning. LPS’ RediRefi program is a customizable,
Systematically review each unclosed your company to hand out. Make sure ing and loan origination solutions, has full-service solution that can help lenders
loan in your office. Think of creative to mark on the invitation to bring a unveiled the company’s newest solution, improve the success rate of their refinance
ways to close these orphans in a way in friend.
Zoot’s Credit Risk Lab. The solution was campaigns. RediRefi includes tools that autowhich your former colleague did not
designed to give credit risk managers the matically identify the loans that are eligible
think. Review each unclosed loan to Design a flyer
ability to rapidly respond to changing for and likely to refinance, pre-qualify those
establish a new relationship with them. Create a flyer that is specifically market and consumer behavior. In a non- loans for a refinance offer, and execute a tarDo not underestimate the potential designed to target your orphans. Make production environment, managers are geted marketing campaign. LPS then couples
of these orphans. Frequently, these your flyers are fun, creative and inform- now able to experiment with new credit those tools with fulfillment services to provide
orphans may find themselves in need ative. Holidays are good themes to use risk policy strategies to make better credit a complete streamlined refinance solution.
of refinancing or may
when creating flyers. decisions, faster.
“RediRefi has the flexibility to support a
have relatives and friends
“The concept of the Credit Risk Lab orig- wide range of lenders’ needs, and is
These flyers can be
with
similar
needs.
mailed, faxed or even e- inated when Zoot was approached by a designed based on industry best practices,”
Nurture these orphans so
top-five financial institution that had been said Grace Brasington, executive vice presimailed to your orphans.
they will be apt to close
looking for several years, without success, dent of LPS’ strategic consulting services.
with you and recommend
for a way to deliver the most accurate, pre- “Regardless of whether you implement the
Free souvenirs
you to those in need of
Take some time to pro- dictive scorecards to the marketplace end-to-end solution or specific compoyour services.
duce magnets, pencils, quickly and more efficiently,” said Tom nents of RediRefi, lenders can expect to see
Reestablish a relapens, notepads, etc. with Johnson, vice president of product develop- dramatic improvements when they reengitionship with these indiyour company name, logo, ment at Zoot. “The financial institution neer their processes by leveraging LPS’
viduals. Before adopting
contact information and wanted to be able to create a new set of technology and consulting services.”
this project, check with
other important company unique, predictive credit characteristics
RediRefi has been developed in a modyour office manager for
facts. These items can be without the significant time and cost delays ular fashion, allowing lenders to select the
approval. Once you have “Do not underestimate displayed in your office of its current process. The Credit Risk Lab specific services they need to improve their
the potential of these
their permission, here
and/or handed out at the allows institutions to quickly evaluate concurrent refinance process. RediRefi includes
orphans. Frequently,
are a few suggestions as
functions earlier suggest- sumer behavior against new ideas, using data and analytics models to identify loans
these orphans may
to how to adopt these
ed. The souvenirs will serve their own performance data, and deter- at risk of prepayment; LPS’ powerful
find themselves in
strays:
as take home “gifts” so that mine whether or not the proposed policy eSignature platform, ClosingStream; and
need of refinancing or your orphans have a will be effective. This helps financial institu- tools to optimize the refinance offer that
O Send holiday and
may have relatives
reminder of your services. tions learn from experience, rather than can increase capture rates, manage the
birthday cards to your
simply react to their environment.”
and friends with
solicitation process and streamline the loan
orphans
Zoot’s Credit Risk Lab provides lenders fulfillment. Through strategic partnerships,
Conclusion
similar needs.”
O Set a date each month
These marketing strate- the ability to shorten the cycle of making LPS provides customer follow-up to ensure
to phone these individuals
gies will efficiently target these orphans changes to attributes and scorecards to that refinances are successfully completed.
O Arrange a dinner party or event for and could greatly increase your determine what is most predictive in the
LPS has also announced the release of
these orphans
income. Your profits could increase sig- current environment. Business users have Home Affordable Modification Program
O Design a flyer, brochure or card to nificantly if you implement these tac- complete control over the entire cycle of (HMP) functionality for its LPS Desktop
prompt your potential customers
tics. These are only a few suggestions developing an idea, coding attributes in Loss Mitigation application. LPS Desktop
O Produce magnets, pens, pencils, etc. as to how you may successfully market the tool, running the attribute tests and Loss Mitigation is a component of the
as a reminder of your company
to orphans. If you are the mortgage evaluating the results. The solution has an Web-based LPS Desktop enterprise workcompany owner, have a meeting with intuitive interface allowing users to experi- flow solution that enables servicers to
Holidays and birthdays
your employees and see if they can ment with unlimited variations of attribute streamline business processes and manHave a special calendar specifically come up with other effective market- definitions to evaluate which will be the age documents and invoices online. LPS
designed to keep you aware of cus- ing strategies. Help your company most effective (this can all be accom- incorporated the HMP functionality in
tomers’ birthdays and holidays. On become the Daddy Warbucks of the plished without IT/programmer involve- response to the Homeowner Affordability
these occasions, send a card wishing mortgage industry by adopting these ment). Using the data from that analysis, and Stability Plan (HASP) introduced by
them well. Be sure to include two busi- orphaned mortgages.
credit risk managers can then identify a President Barack Obama in February
ness cards (one for them and one for a
new strategy in less than 48 hours.
2009. HMP is the loan modification initiafriend). Delegate someone in your Gary Opper is president of Weston, Fla.“The first financial institution to imple- tive of HASP, the government-sponsored
office to be in charge of this calendar so based Approved Financial Corporation. ment Zoot’s Credit Risk Lab projects savings effort to stabilize the housing market by
that you don’t forget these important Gary has been a mortgage lender and of more than $2 million in the first 12 aiding at-risk homeowners in danger of
dates.
note buyer since 1984, in addition to months following deployment,” said James losing their homes to foreclosure. As a
mortgage consulting. He has a CPA and a A. Franklin, chief sales officer for Zoot. result of HMP, it is expected that servicers
Pick up the phone
CFP license. Opper is past president of the “There is a high demand within our prospect will process approximately three to four
Each month, set aside a day to tele- Florida Association of Mortgage Brokers and client base for a solution that addresses million home loan modifications.
phone your orphans. Be sure to rein- Miami Chapter and the Florida Institute market volatility in a timely way. This soluLPS Desktop Loss Mitigation is a Webtroduce yourself, your company and of CPAs Gold Coast Chapter. He may be tion brings increased operational efficiency, based tool that can be deployed and scaled
remind them of your services. Ask these reached by phone at (954) 384-4557 or e- consistency in credit risk policy across all to manage any loss mitigation activity volindividuals if they know of anyone in mail opper@approvedfinancial.com.
lines of business and the ability to quickly ume. It also provides servicers an afford-
able, permanent solution that integrates
with major servicing platforms. LPS
Desktop Loss Mitigation enables a servicer
to automate its loan modification process,
including loan assignment, queuing and
delivery of optimized workout options,
loan modification document generation
and online document execution.
LPS Desktop Loss Mitigation incorporates a comprehensive rules engine that
allows servicers to automate the entire
loss mitigation process according to their
specific business requirements. Loan files
are automatically assigned and sent to
servicer work queues, where net-presentvalue (NPV)-based decisioning tools help
the servicer’s home retention specialists
to provide the best workout options for
borrowers. Workout agreements flow
through an automated, rules-based
approval process, again based on servicer-specified requirements, that ends
with automated document creation and
online document execution. The application is configurable by client, investor,
portfolio and loan type.
For more information, visit www.lpsvcs.com.
LenderLive Network
develops contract underwriting system for Radian
MRG’s eConsent streamlines
Regulation Z compliance
Your turn
invites you to submit any information
promoting new “niche” loan programs,
new products or any other announcement related to the introduction of a
new program, to the attention of:
New to Market column
Note: Submissions sent via e-mail are preferred. The deadline for submissions is the
1st of the month prior to the target issue.
$
49
.95
Plus Postage
& Handling
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
“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 advisors. As author of the “Forward on Reverse” column in The Mortgage Press since
2002, Atare Agbamu communicates nationally with the housing finance community, 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 research to create a first of its kind resource for the reverse mortgage industry. It offers a comprehensive 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-Chair
of 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 Freedom
Senior 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—Friends
of 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 information 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 closing of reverse mortgages come from inadequate preparation.”
—Deanne Opstad, AVP, Senior Underwriter, Generation Mortgage Company
O SEPTEMBER 2009
Phone #: (516) 409-5555
E-mail: newsroom@nmpmediacorp.com
Only
MRG Document Technologies
(MRG), a provider of mortgage technologies to banks,
credit unions and other lenders, announced
that its eConsent electronic disclosure delivery system is now available to help lenders
comply with changes to Regulation Z that
took effect July 30th to implement the
Mortgage Disclosure Improvement Act of
2008 (MDIA) resulting in an expansion of the
Truth-in-Lending (TIL) disclosures.
The new changes expand the scope of
TIL disclosures for mortgage transactions
to include the need for disclosures for refinances and for mortgage loans on
dwellings other than borrower’s primary
residence, in addition to the disclosures
already required for purchase and initial
construction loans. Revised disclosures are
required if the annual percentage rate
(APR) changes to outside of the tolerance
during the loan process. As a result of redisclosure, lenders must delay closings for
three additional days, for a total of six
days, while they wait for borrowers to
receive the revised disclosures.
MRG’s eConsent allow lenders to
have verifiable proof that borrowers
received re-disclosures on the day they
were delivered if the borrowers consent
to the re-disclosure. MRG supplies the
lenders with verifiable reports of when
the borrower actually consented; this
can shorten the disclosure delivery
time, with closings occurring three days
after delivery date instead of six.
“Speeding up the closing process is a
benefit to both lenders and borrowers,”
said Marsha Williams, an attorney at
MRG. “For lenders, it locks in interest
rates, prevents borrowers from switching to another lender and generates
interest sooner. By delivering the
revised disclosures electronically, borrowers close their loans sooner.”
MRG offers a browser-based system for
the preparation and delivery of compliant
document packages, electronic disclosures,
loan modifications and other services for
mortgage lenders, banks and credit unions
nationwide. MRG guarantees that its products are in compliance with the most
recent legislative and regulatory changes.
For more information, visit www.mrgdocs.com.
LenderLive Network
Inc., a provider of
business
process
outsourcing and technology to the financial industry, announced that it has
deployed a comprehensive system for
Radian Guaranty Inc.’s nationwide network of contract underwriters.
“With such an extensive group of
underwriters that span the entire country,
Radian needed a single system in place to
manage data and better distribute information to lenders,” said Rick Seehausen,
president and CEO of LenderLive.
LenderLive has developed an enterprise class system to serve as a workflow
tool that will help Radian consolidate and
streamline its underwriting and cost-effectively meet fluctuating market demands.
The end product is an enhancement of
LenderLive’s existing contract underwriting platform and will be private-labeled
with the Radian brand.
“By automating our contract underwriting processes within a single system, we
enable Radian’s contract underwriters to
input and manage loans faster and more
accurately,” said John Brady, vice president
of business solutions at Radian. “In addition, LenderLive provides Radian with the
ability to add additional services and
processes as needed in the future.”
LenderLive’s contract underwriting services provide clients the ability to engage the
company to perform either pre-purchase
loan underwriting to determine eligibility
and adherence with underwriting guidelines, or to manage loan underwriting from
conditional approval through final
approval. Contract underwriting is one of
the component services available through
LenderLive’s contract services division,
which offers a variety of outsourced services, such as quality control, closing coordination and contract processing. The company has several other channels of business that provide comprehensive mort-
gage-related outsourcing services, including retail, wholesale, specialty origination
and settlement services.
For more information, visit www.lenderlive.com or www.radian.biz.
43
SEPTEMBER 2009 O
To submit your entry for inclusion in the National Mortgage Professional
Calendar of Events, please e-mail the details of your event, along with
contact information, to newsroom@nmpmediacorp.com.
44
SEPTEMBER 2009
Tuesday, September 15
2009 Kansas Association of Mortgage
Professionals Trade Show
Harrah’s North Kansas City Hotel
& Casino
1 Riverboat Drive
North Kansas City, Mo.
For more information, call (913) 7645600 or visit www.ksamp.org.
Monday-Tuesday, September 21-22
20th Annual Illinois Association of
Mortgage Professionals Fall Conference
“Raise standards. Be accountable.
Increase your knowledge.”
The Sheraton Hotel
3400 Euclid Avenue
Arlington Heights, Ill.
For more information, call (630) 9167720 or visit www.iamp.biz.
Thursday-Friday, September 17-18
Mortgage Bankers Association Human
Capital Management Symposium
MBA Headquarters
1331 L Street NW
Washington, D.C.
For more information, call
(800) 793-6222 or visit
www.mortgagebankers.org.
Tuesday, September 22
New York Association of Mortgage
Brokers 21st Annual Convention
“It’s Not Just Business as Usual!”
Melville Marriott
1350 Old Walt Whitman Road
Melville, N.Y.
For more information, call (914) 3326233 or visit www.nyamb.org.
COMPANY
WEB SITE
PAGE
ACC Mortgage .................................................. weapproveloans.com ............................................29
All Real Estate Solutions LLC.............................. allREsolutions.com ................................................15
BestRates ....................................................................................................................................37
Elliott and Company Appraisers Inc. .................. www.appraisalsanywhere.com ................................27
Emigrant Mortgage Company ............................ www.emigrantmortgage.com ..................................13
Entitle Direct Group.......................................... www.entitledirect.com/mortgage ......Inside Front Cover
First Integrity Title Agency LLC .......................... www.fitallc.com ................................................CO 3
First Source Capital Mortgage Inc. .................... www.ruralhomeloan.com ......................................33
Flagstar Bank .................................................. www.wholesale.flagstar.com ......................Back Cover
Franklin First Financial .................................... www.franklinfirstfinancial.com ................................39
Frost Mortgage Banking Group ................................................................................Inside Back Cover
Guaranteed Home Mortgage.............................. www.joinguaranteed.com ......................................12
HTDI Financial ................................................ www.startacreditrepaircompany.com ........................21
Informative Research........................................ www.informativeresearch.com ..................................7
Mortgage Now Inc. .......................................... www.mtgnow.com ................................................23
NAMB/West ...................................................... www.namb.org ....................................................16
Wednesday-Friday, Sept. 30-Oct. 2
22nd Annual New England Mortgage
Banking Conference
Rhode Island Convention Center
1 Sabin Street • Providence, R.I.
For more information, call (617) 5709114 or visit www.massmba.com.
Friday, October 30
Oregon Association of Mortgage
Professionals 2009 Annual Convention
“The Best of the Best”
Location to be determined
For more information, call (503) 6708586 or visit www.oamponline.com.
OCTOBER 2009
Friday-Saturday, October 2-3
Kentucky Association of Mortgage
Professionals 2009 Annual Convention
Belterra Casino & Golf Resort
777 Belterra Drive
Belterra, Ind.
For more information, call (270) 9292836 or visit www.kyamp.net.
NOVEMBER 2009
Monday-Tuesday, November 2-3
Virginia Association of Mortgage
Brokers 21st Annual Convention
Williamsburg Lodge
310 South England Street
Colonial Williamsburg, Va.
For more information, call (804) 2857557 or visit www.vamb.org.
Monday-Tuesday, October 5-6
Washington Association of Mortgage
Professionals 2009 Real Estate
Lenders Conference
Meydenbauer Center
11100 NE 6th Street
Bellevue, Wash.
For more information, call (866) 4257250 or visit www.wamb.org.
Tuesday, November 17
2009 Missouri Association of Mortgage
Brokers Trade Show & Convention
St. Charles Convention Center and
Embassy Suites Hotel
2 Convention Center Plaza
St. Charles, Mo.
For more information, call (314) 9099747 or visit www.mamb.net.
Sunday-Wednesday, October 11-14
Mortgage Bankers Association 96th
Annual Convention & Expo
San Diego Convention Center
111 West Harbor Drive
San Diego
(800) 793-6222 or visit
www.mortgagebankers.org.
DECEMBER 2009
Saturday-Tuesday, December 5-8
NAMB/WEST
MGM Grand Hotel & Casino
3799 Las Vegas Boulevard South
Las Vegas
For more information, call (703) 3425900 or visit www.namb.org.
Thursday, October 15
Florida Association of Mortgage Brokers
Jacksonville Chapter
2009 Annual Trade Show
Hyatt Regency Riverfront
225 Coastline Drive
Jacksonville, Fla.
For more information, call (800) 2899983 or visit www.famb.org.
Tuesday-Wednesday, October 20-21
Arizona Association of Mortgage
Brokers 2010 Outlook & Expo
“Expand Your Mind &
Expand Your Business”
100 North Third Avenue
Phoenix, Ariz.
(480) 423-7334 or visit
www.mortgagemarketplacehome.com.
Wednesday-Thursday, October 21-22
Indiana Association of Mortgage
Brokers 2009 Annual Expo &
Educational Conference
Sheraton Indianapolis Hotel & Suites
8787 Keystone Crossing
Indianapolis
For more information, call (317) 9641225 or visit www.inamb.com.
NAPMW .......................................................... www.napmw.org ..................................................22
New York Appraisal Management Services Inc..... www.nyams.com ..................................................41
Platinum Credit Services Inc. ............................ www.platinumcreditservices.com ............................31
Presidents First Mortgage Bankers .................... www.presidentsfirst.com ........................................11
Quality Mortgage Services ................................ www.qcmortgage.com ....................................10 & 32
Think Reverse .................................................. www.mortgageproshop.com ....................................43
United Wholesale Mortgage .............................. www.uwmco.com ..................................................17
Wells Fargo Home Mortgage.............................. www.brokersfirst.com ..............................................9
Wednesday-Friday, October 21-23
Pennsylvania Association of Mortgage
Brokers and New Jersey Association of
Mortgage Brokers Regional Conference
Trump Taj Mahal Casino Resort
1000 Boardwalk at Virginia Avenue
Atlantic City
For more information, call (973) 3797447 or visit www.njamb.org.
FEBRUARY 2010
Monday-Thursday, February 1-4
Mortgage Bankers Association
CREF/Multifamily Housing
Convention & Expo
Mandalay Bay Resort & Casino
3950 Las Vegas Boulevard South
Las Vegas
For more information, call (800) 7936222 or visit www.mortgagebankers.org.
Tuesday-Friday, February 23-26
Mortgage Bankers Association National
Mortgage Servicing Conference & Expo
Manchester Grand Hyatt
1 Market Place • San Diego
APRIL 2010
Sunday-Wednesday, April 25-28
Mortgage Bankers Association National
Technology in Mortgage Banking
Conference & Expo
Hyatt Regency Chicago
151 East Wackler Drive • Chicago
AUGUST 2010
Wednesday-Friday, August 18-20
California Association of Mortgage
Brokers 2010 Annual Convention &
Grand Exposition
Hyatt Regency Long Beach
200 South Pine Avenue
Long Beach Convention Center
300 East Ocean Boulevard
Long Beach, Calif.
For more information, call (916) 4488236 or visit www.cambweb.org.
“I joined Frost Mortgage and immediately saw my revenue get back to what it used to be. I now have the
tools I need to be successful in today’s market place.”
- Bill Morris
Lancaster, OH
I’ve known about Greg Frost for 20 years. I trusted
him, joined his division and he has delivered on his
promise. His model works great!
- Jerry Cox
Tallahassee, FL
Greg is doing what he promised. Great pricing, fast
underwriting, on time closings! That’s all I needed and
that’s what Greg has delivered.
- David Hoffman
Westlake Village, CA
Very competitive rates, common sense underwriting in
48 hours, wet funding with docs...what more can I say?
- Jason Roberts
St. Louis, MO
Our semi-annual BranchPartner Master Mind Meetings are what really motivate me. Great mentoring
and loads of business building ideas coupled with the
hands on “How to.”
- Momi Pointer
Tustin, CA
Is there another company that has as many Underwriters has Loan Processors? Greg has turned that
proverbial bottleneck into a slick funnel. Two days
for a decision. Great!
- Kevin Hodge
Hunt Valley, MD
A division of Primary Residential Mortgage, Inc.
If you would like to learn more about our BranchPartner business model, please inquire:
info@gregfrost.com
Regulation and Licensing Department, Financial Institutions Division #621 • Branch License #00621

flashcontinued from page 8 - National Mortgage Professional

Transcription

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