Mortgage Banker Magazine January 2022

RATE TRENDS

NON-QM’S TOP PLAYERS

CFPB CONCERNS January 2022

KEEPING AN EYE ON CREDIT REGULATORS LOCK ON LICENSING ISSUES

Black Loans Matter

WHY BEN SLAYTON IS ON A MISSION TO BUILD THE BIGGEST BLACK-LED MORTGAGE LENDER IN THE U.S. A P U B LI C ATI O N O F A M E R IC A N B U S IN ES S M ED IA

BEN SLAYTON, CEO OF LEGACY HOME LOANS

INSIDE: PROGRAM GUIDE:

NEW ENGLAND MORTGAGE EXPO PROGRAM GUIDE

NATION’S LARGEST REGIONAL MORTGAGE CONFERENCE

NO RISK, ALL REWARD, SELECT A LOAN PROGRAM

NEW CONSTRUCTION

FIX & FLIP

12 to 24-Months Rates Starting at 7.99%

12 & 18-Months Rates Starting at 7.49%

SHORT-TERM RENTAL

LONG-TERM RENTAL

30-Years Rates Starting at 3.75%

30-Years Rates Starting at 3.75%

DON’T TAKE A GAMBLE WITH OTHER LENDERS, BET ON RCN CAPITAL

Visit RCNCapital.com \ Email Info@RCNCapital.com \ Call 860.432.5858 RCN Capital, LLC is licensed as a California Finance Lender under Department of Business Oversight license number 60DBO-46258.

Arizona Mortgage Banker License BK-0932325. Oregon Mortgage Lending License: ML-5571; NMLS Company ID: 1045656.

RATE TRENDS

NON-QM’S TOP PLAYERS

CFPB CONCERNS January 2022

KEEPING AN EYE ON CREDIT REGULATORS LOCK ON LICENSING ISSUES

Black Loans Matter

WHY BEN SLAYTON IS ON A MISSION TO BUILD THE BIGGEST BLACK-LED MORTGAGE LENDER IN THE U.S. A P U B LI C ATI O N O F A M E R IC A N B U S IN ES S M ED IA

BEN SLAYTON, CEO OF LEGACY HOME LOANS

INSIDE: PROGRAM GUIDE:

NEW ENGLAND MORTGAGE EXPO PROGRAM GUIDE

NATION’S LARGEST REGIONAL MORTGAGE CONFERENCE

SERVING THE MORTGAGE BANKING COMMUNITY FOR MORE THAN THREE DECADES 202.628.2000

PROVIDING COUNSEL TO THE FINANCIAL SERVICES INDUSTRY FOR MORE THAN THIRTY YEARS SERVING THE REVERSE MORTGAGE INDUSTRY SINCE ITS INCEPTION

202.628.2000 WASHINGTON DC | DALLAS TX | IRVINE CA

202.628.2000

CO M PL I A N C E OUR MISSION Mortgage Banker magazine is dedicated to providing quality informational/educational content that betters the mortgage process at every step. The content is oriented to help professionals progress their understanding of the residential mortgage banking business and develop their skills at improving the efficiency and profitability at all levels.

PUBLISHER & EDITOR-IN-CHIEF Vincent Valvo, CEO, vvalvo@ambizmedia.com ASSOCIATE PUBLISHER Beverly Bolnick bbolnick@ambizmedia.com FOUNDING PUBLISHER Ben Slayton BSlayton@ambizmedia.com EDITOR David Krechevsky davek@ambizmedia.com STAFF WRITER Katie Jensen kjensen@ambizmedia.com ADVERTISING David Hoierman David@ambizmedia.com GRAPHIC DESIGN MANAGER Christopher Wallace cwallace@ambizmedia.com MARKETING MANAGER Michael Castro mcastro@ambizmedia.com GRAPHIC DESIGN Stacy Murray smurray@ambizmedia.com HEAD OF ENGAGEMENT AND OUTREACH Andrew Berman andrew@ambizmedia.com DIRECTOR OF STRATEGIC GROWTH Alison Valvo avalvo@ambizmedia.com ONLINE CONTENT DIRECTOR Navindra Persaud npersaud@ambizmedia.com USER EXPERIENCE DESIGNER Billy Valvo bvalvo@ambizmedia.com

REGULATORY CORNER FEDERAL COMPLIANCE FHFA ISSUES REPORT ON ENTERPRISE SINGLE-FAMILY GUARANTEE FEES

The Federal Housing Finance Agency (FHFA) issued its annual report on singlefamily guarantee fees charged by Fannie Mae and Freddie Mac (the Enterprises).

Guarantee fees are intended to cover the credit risk and other costs that the Enterprises incur when they acquire single-family loans from lenders. These costs include projected credit losses from borrower defaults over the life of the loans, administrative costs, and a return on capital.

The Housing and Economic Recovery Act of 2008 requires FHFA to conduct ongoing studies of the guarantee fees charged by the Enterprises and to submit a report to Congress each year.

FANNIE, FREDDIE CAPITAL PLAN SOUGHT

The Federal Housing Finance Agency (FHFA) issued a proposed rule that would require Fannie Mae and Freddie Mac (the Enterprises) to develop, maintain, and submit annual capital plans to FHFA. This requirement helps protect taxpayers by ensuring that the Enterprises properly assess their risks and maintain the appropriate level of capital.

“Today’s action is part of FHFA’s commitment to safety and soundness and protecting the housing finance system throughout the economic cycle,” said Acting Director Sandra Thompson. “The proposed rule will help ensure that the Enterprises have robust systems and processes in place to monitor and maintain proper levels of capital. Adhering to a framework similar to other regulatory capital planning frameworks will better position the Enterprises, and the mortgage market, to withstand stressful economic environments.”

The proposed rule also incorporates the determination of the stress capital buffer into the capital planning process, and builds upon the existing supervisory expectation that the Enterprises incorporate forward-looking projections of revenue and losses to monitor and maintain their internal capital adequacy.

MARKETING & EVENTS ASSOCIATE Melissa Pianin mpianin@ambizmedia.com www.ambizmedia.com

© 2022 American Business Media LLC All rights reserved. Mortgage Banker magazine is a trademark of American Business Media LLC. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher. Advertising, editorial and production inquiries should be directed to: American Business Media LLC 345 North Main St., Suite 313, West Hartford, CT 06117 Phone: (860) 719-1991 | info@ambizmedia.com

MORTGAGE BANKER | JANUARY 2022 3

T HE M O RTG AG E A DV I S O R

Navigating The Five C’s

T

NEW YEAR IS A GOOD TIME TO REVIEW WHAT MAKES UP A GOOD CREDIT PROFILE

By R O B CHR IS M A N, MORTGAGE BANKER MAGAZINE CON TRIB U TIN G WRITER

he five C’s of credit (character, capacity, capital, collateral, and conditions) is a system used by lenders to gauge borrowers’ creditworthiness. But when most people, including those employed in residential lending and the general public, think of “credit” they think of the cards in their purse and a numerical score. It is good to know the basics, regardless of where you work, since so much reliance is placed in credit when making the lending decision.

Did you know that Americans collectively owe more than $9 trillion in home loans?

That is more than any other kind of consumer debt. People in our industry know that before applying for a mortgage, it’s crucial

4 MORTGAGE BANKER | JANUARY 2022

for prospective borrowers to get borrowers for lower down paytheir finances in order. ment options and lower interCredit is one of the main comest rates for home mortgages, ponents lenders will utilize to whereas for lower credit scores, qualify borrowers for most types the opposite is true. of financing such as mortgages, Typically, lenders prefer to see cars, or credit cards. Once a bor12 to 24 months of payments to rower has enough credit estabone or more major credit providlished, numerical credit scores ers such as a mortgage, car loan/ are generated based on payment ROB CHRISMAN lease, Visa, American Express, history. Higher scores are a result or MasterCard. Store credit cards of timely payments, and lower scores result will carry less weight. If a potential borrowfrom late or missed payments (among other er is new to establishing a credit rating, the things). The basics are straightforward: The originator they’re working with will tell them higher one’s credit score, the more likely it to start applying for credit with a major credis to be approved for a loan with more favor- it provider such as a Visa or Discover Card. able terms. Higher credit scores can qualify Initially, credit limits may be lower, but they

will gradually increase over time with a good payment history.

UNDER DOGS

Underwriters who look at credit, and credit reporting agencies, are quick to tell you that there are additional components that are reviewed and can have an adverse effect on credit so it is very important that a borrower makes sure a credit report is accurate. Public records will report public items such as bankruptcies, foreclosures, or tax liens. Collection accounts, such as medical bills or other bills, that a bill collector or creditor can place on your record for past due payments will appear on reports issued by Equifax, Experian, and TransUnion.

Underwriters also look for charge offs occurring for credit cards that have fallen beyond the window of repayment. The remaining balance will show as an arrearage which will adversely affect anyone’s credit and credit scores. And credit inquiries pulled in a certain timeframe usually won’t hurt credit scores but multiple inquires over longer periods of time could affect credit: Excessive inquiries can cause a red flag for lender.

Many years ago the Fair Isaac Company created an easy-to-use FICO score as a single number for comparison purposes. The score is comprised of a borrower’s payment history (35%), amount owed (30%), length of credit history (15%), new credit (10%), and credit mix (10%). Scores range from 300 to 850.

Many lenders have a minimum FICO score you need to meet before you’re eligible for a loan, and the higher the score, the more likely a borrower will qualify for the types of mortgages at the best price.

One of the most important qualifiers (though not the only one) for a mortgage, and for getting the best program options and terms, is having a good credit score. The average national FICO credit score is actually over 700. But how good of a credit score does one need to buy a house?

Generally, credit scores above 800 are considered exceptional, those between 740 and 799 are very good, and those between 670 and 739 are good. Anything below 669 is seen as either “fair” or “very poor.”

The credit score needed to qualify for a mortgage can vary depending on the loan program, lender, and other criteria. The higher the credit score, the more choices borrowers have when it comes to loan programs and qualifying. For a standard FHA loan using traditional credit, a credit score of at least 500 with a minimum of 10% down, or at least 580 for the minimum down payment of 3.5 percent. Some lenders may impose “credit overlays” and that require a higher credit score such as 620 for FHA loan eligibility. A borrower’s credit profile plays a big role in determining what type of house they can own.

FACTORING FIXES

But what about the other factors in evaluating a borrower? The score is comprised of a borrower’s payment history, amount owed, length of credit history, new credit, and credit mix. “Character” helps lenders determine a client’s ability to repay a loan, usually determined from the credit report. Payment history is improved when a borrower pays bills

on time, often through setting up automatic online payments for debts. They can also pay down existing debt or use a co-signer with good credit when applying for a loan.

Capacity measures the ability to repay new debt based on current obligations. Here, cash flow is paramount, along with debt-to-income ratio. Lenders want to know how much is owed versus how much the client owns. The lower the debt-to-income ratio, the more favorably a bank will look at the request for credit. Other considerations include length of time at your current job and income stability.

Typically, banks look for a debt-to-income ratio of less than 36% as an indicator that a borrower is responsible with credit. If a client has low capacity due to a high debt-to-income ratio, paying down debt is a good strategy.

Capital in an indication of seriousness and commitment in the form of a down payment when applying for a loan or mortgage.

Collateral provides assurance to the lender in the event the borrower defaults. If a potential borrower doesn’t have collateral, MLOs will often encourage the introduction of a co-signer.

This is a person who has collateral to back the loan. Conditions refer to the current economic health of the market and the industry that the borrower is in.

To wrap up, homeownership may be something a client has dreamed of for much of their adult life. An originator can add real value by making sure your borrowers have a good credit score can help them afford the house you want.

Bottom line for someone financing a home?

Establishing a credit history is not hard, but it takes a little time to build.

Start with one or two credit cards, make timely payments, and build from there.

MORTGAGE BANKER | JANUARY 2022 5

WAREHOUSE LENDERS SHOWCASE

SPECIAL ADVERTISING SECTION

FirstFunding, Inc.

Midwest Loan Solutions, Inc.

Dallas, TX

Southfield, MI

firstfundingusa.com

mls.capital

customerservice@

warehouse@mls.capital

PlainsCapital Bank — National Warehouse Lending Dallas, Texas

firstfundingusa.com

industry-solutions/

(833) 721-0355

(214) 821-7800 Minimum Line size $1,000,000 Minimum Line size $1,000,000.00

Maximum Line size $10,000,000

Maximum Line size $100,000,000.00

Net worth requirement Minimum TNW

Net worth requirement $75,000

plainscapital.com/business/

$100,000

national-warehouse-lending deric.barnett@plainscapital.com (469) 718-4670 Minimum Line size $5,000,000 Maximum Line size $50,000,000

Company Bio/ Overview

Company Bio/ Overview

FirstFunding, Inc. offers warehouse lines

MLS’s Warehouse Program provides capital

to correspondent lenders, community

for growth oriented independent mortgage

Company Bio/ Overview

banks, credit unions, and secondary-

bankers by developing collaborative

PlainsCapital Bank is a strong & stable

market investors.

relationships. Broker to Banker, Emerging

relationship-driven lender with a long-

Bankers and Independent Mortgage

term perspective. Since 1992, our team

Bankers seeking growth capital.

of industry professionals have been

FirstFunding is a Top Ten Warehouse Lender dedicated to the growth of the

Net worth requirement $750,000

offering warehouse facilities thoughtfully

correspondent channel leveraging

No application fee or Non-Use Fee’s. Develop

innovative technology and strategic

a relationship with a Capital Partner focused

partnerships to the benefit of our clients.

on your growth.

FlexClose Funding! Fund outside the Fed

Products Allowed

count on PlainsCapital for “Service

wire restrictions.

Agency Conventional, FHA, VA, USDA, Non-

Beyond Expectations.”

Products Allowed

QM, Jumbo, Seconds

structured to meet the needs of our mortgage banking clients nationwide.

Through the market ebbs and flows,

Products Allowed

Conventional Conforming, Jumbo, FHA,

Fees

PlainsCapital Bank accepts traditional

VA, USDA, Non-QM

Funding option of 98% of Investor Take Out

1-4 SFR mortgage products including

or 100% of Note.

government, conventional, jumbo, 203k

Rates and Fees vary by TNW

and 2nd mortgages and will tailor sub

Fees Competitive Ease of use FirstFunding’s FlexClose Funding program allows our clients to fund outside the Fed wire restrictions. Same day and after-hours funding. Browser-

Ease of use Experienced Mortgage Banking professionals. Minimum documentation for funding.

limits as needed to meet additional product offerings. Our platform is e-note ready.

Fees Competitive no matter their size.

based proprietary platform, customized

Ease of use

reporting tools, and a dedicated

PlainsCapital Bank operates a no-

customer service team.

document funding platform and offersexpress funding in order to reduce operational burden and accelerate turn times.

6 MORTGAGE BANKER | JANUARY 2022

COVER STORY

Housing Inequity, In Black And White

B

WHY BEN SLAYTON IS DETERMINED TO BUILD THE NATION’S LARGEST BLACK-LED MORTGAGE LENDER SPECIAL TO M ORTGAGE BAN KE R M AGAZ IN E

en Slayton has put in more than 56 years in the real estate and mortgage industry.

He was the first Black member of the National Association of Realtors, the first Black Century 21 Real Estate franchisee broker-owner, and he developed and built the first condominium project located in an area of the San Fernando (Calif.) Valley, overlooking the Hansen Dam, that was located in a predominantly Black community. He was the first person — of any race — approved by Freddie Mac as a Multifamily Program Plus Seller/Servicer.

He is the only person who was appointed and served on both Freddie Mac’s and Fannie’s inaugural Affordable Housing Advisory Councils during the same period.

Now, at a time when many would be winding down their careers, Slayton is pursuing what he characterizes as a calling — building the largest Black-led mortgage lender in the U.S. Slayton is CEO of Legacy Home Loans, based in Las Vegas.

MBM: WE won’t ask you how you became the first of all your firsts, but one does seem intriguing. Can you tell us how you became the first Black Realtor in America?

SLAYTON: Well, that’s an easy one. In 1964, I could not go to the San Fernando Valley Board of Realtors, or any other Board of Realtors, in the country and obtain an application to become a member. In 1964, to become a Realtor, one had to be sponsored by another Realtor member — similar to the “Good Old Boys” country clubs. There wasn’t a white Realtor who was willing to sponsor me — in part for being touted as being a “n-word” lover and afraid of being ostracized by their fellow Realtors.

CONTINUED ON PAGE 8

MORTGAGE BANKER | JANUARY 2022 7

CONTINUED FROM PAGE 7

Fortunately, a Jewish family had adopted me and taught me the real estate and mortgage business and wanted me to become successful, so they found a guy who would sponsor me.

However, for him to sponsor me, he charged my family $5,000 to do so. In 1964, for $5,000 you could purchase a 2-bedroom, 1-bath, 800-square-foot home. He was paid the $5,000 and he sponsored me, and that’s how I became the first Black Realtor in America. Oh yes, he became the “n-word” lover, and he was also ostracized by his fellow Realtors.

MBM: TELL us about Legacy Home Loans and why you started it.

SLAYTON: I started Legacy Home Loans in July 2018 because I did not see anyone addressing the 30% homeownership gap between Black Americans and white Americans.

Meaning only 4 out of every 10 Black families own the homes they live in. In contrast, 7 out of every 10 white families owns the homes they live in. Therefore, we as Black people have a 30% homeownership gap. I wanted to make a difference for my people, so I crafted the company’s mission: “To empower the African American community throughout the United States with a focus on building sustainable wealth through homeownership and leaving family legacies.” Our goal is to lend $1 billion in mortgage loans to African Americans by 2023 and to continue to lend $1 billion and more to African Americans each and every year thereafter.

MBM: HAVE you received any push-back from white mortgage bankers thinking that your company’s mission is discriminatory or reverse discrimination?

SLAYTON: Yes, we have had a few comments about that. But, after I explain that we didn’t say we would only lend to African Americans, I said our focus is on African Americans.

Today our borrowers’ racial mix is 77% African American and 23% non-African Americans. I don’t see our focus any different than a mortgage company that has a focus on originating only jumbo loans, VA loans, renovation loans, etc., etc., etc. One must have a focus for their business whereby they can focus their

marketing dollars and capitalize on the company’s strengths and expertise. I think we have a “niche market” — no mortgage company knows our market, and our people, like we do.

MBM: YOU mentioned that there is a 30% homeownership gap between Blacks and whites, how did this happen and how did we get here?

SLAYTON: Well, that’s a long story, because it all started from slavery. But I will not take you back that far, I will give you two more recent events that helped to create the homeownership gap and the wealth gap. I am 77 years old, and I am talking about a situation that took place 17 days after I was born.

President Franklin D. Roosevelt signed a new law on June 22, 1944, called The Servicemen’s Readjustment Act of 1944, more commonly known as the G.I. Bill of Rights or the G.I. Bill. This bill provided veterans coming home from World War II the ability to obtain: • A college education; • Technical and vocational training; • Loan guaranty for homes; • Loan guaranty for farms; • Loan guaranty for businesses, and • Unemployment payments Prior to World War II, a college education and homeownership were, for the most part, an unreachable dream for the average white American, not to mention Black Americans.

Home ownership was mainly reserved for the rich.

However, the G.I Bill changed all of that.

By the time the G.I. Bill ended on July 25, 1956, 7.8 million of the World War II veterans had participated in a college education or technical or vocational training program. Millions of veterans took advantage of the G.I. Bill’s Home Loan Guaranty Program. From 1944 to 1952, the VA guaranteed 2.4 million home

WE AS BLACK PEOPLE HAVE A 30% HOMEOWNERSHIP GAP. I WANT TO MAKE A DIFFERENCE FOR MY PEOPLE.

8 MORTGAGE BANKER | JANUARY 2022

loans for World War II veterans.

The VA did not administer the program itself; it only guaranteed the loans to banks. If a veteran failed to pay their mortgage payments, then the VA guaranteed the banks 100 percent against any losses, which gave the white-owned banks free reign to deny mortgages to Black people. Blacks were redlined into poorer neighborhoods, ensuring that loans would be denied. In addition, builders that built homes in the suburbs built into the new home documents a deed covenant restriction that prohibited Blacks from buying homes.

In 1995, I personally purchased a home in Westchester, Calif., where the deed still has a deed covenant restriction that stated, because I was not of the white race, I could not purchase that home. In 1948, the U.S. Supreme Court ruled that states could not enforce the racial restrictions. However, it wasn’t until 1968, (20 years later) when Congress outlawed them altogether. But the language cannot be removed, therefore, the deed restriction language is still in the deed today.

“Said Land shall never be sold, divided, or leased to any person not of the Caucasian race, nor shall the title to said land ever become vested in whole or in part or remain in any person not of said race nor any corporation or association operated or controlled by persons not of said race.”

Let’s take one of the worst cases as an example of the segregation and bigotry that took place with the G.I. Bill by bankers. In 1947, 13 Mississippi cities made more than 3,200 VA-guaranteed home loans and only two of the 3,200 loans were made to Blacks.

This practice was not confined to the South. Historian Ira Katznelson said that in New York and New Jersey suburbs, fewer than 100 out of the 67,000 mortgages insured by the VA-G.I.

the homeownership gap.

MBM: WHAT do you mean by a partnership of government and banks and mortgage lenders?

BEN SLAYTON AND NATALIE CARPENTER

Bill, were made to non-white homebuyers.

In addition, at most of the schools that provided technical and vocational training, African Americans were unable to participate in vocational training that related to plumbing, electrical, printing, etc., because those types of jobs and equipment and materials were reserved for the white students in white communities only; therefore, African Americans were not given an opportunity to be trained as one of the high-level paying technical jobs.

The high-level paying technical skilled jobs were reserved for white people only.

The white colleges would not accept African Americans, and most Blacks had to take menial jobs to support their families.

Those that were able to attend a college were relegated to the small historical Black colleges that were mostly underfunded, unaccredited, and overwhelmed by the massive influx of African American veteran students and most of them had to be turned away.

White Veterans were able to obtain unemployment insurance that paid $20 per week, but most African Americans were not approved by the state employment services to be eligible to receive these benefits.

As I mentioned, the G.I. Bill ended in July 1956. According to Mr. Katznelson, nearly 8 million World War II Veterans had received a college education, technical or vocational training, and 4.3 million home loans amounting to $33 billion had been disbursed. But most Black veterans had been left behind and were unable to take full advantage of the GI Bill.

As employment, college attendance, and wealth surged for whites, the wealth gap and homeownership gap just continued to widen.

Mr. Katznelson continues to state that there was no greater instrument for widening an already huge homeownership and wealth gap than the G.I. Bill.

MBM: SO how are you planning to accomplish your goal to lend $1 billion to African Americans by 2023 and $1 billion each and every year thereafter?

SLAYTON: We are opening branch locations in every U.S. city that has 25% or more African American population, a median annual family income of $50,000, and that has an average home price of approximately $200,000. We are presently licensed in 38 states with multiple brick-and-mortar branch locations in California, Georgia, Illinois, Maryland, Missouri, Nevada, North Carolina, and South Carolina.

MBM: EVEN if Legacy lends $1 billion a year to African Americans, that by itself will not close the 30% homeownership gap we have been talking about. So how do you see that gap closing?

SLAYTON: Now that’s a good question, but I have an answer for you. It’s going to take a “village” of banks and mortgage lenders throughout the United States to partner with the U.S. government to help to close

SLAYTON: Well, Fannie Mae and Freddie Mac and HUD all have an annual affordable housing goals that are designed to ensure the enterprises responsibly promote equitable access to affordable housing that reaches low- and moderate-income families, minority communities, rural areas, and other underserved populations.

Every bank and mortgage lender (seller/ servicer) must have a certain level of audited financial statements, loan quality policies and procedures set up, and the seller/servicers must follow their written underwriting guidelines, which must be in place prior to being approved, and the seller/servicers are audited annually to ensure that they can continue to be approved do business with the Enterprises.

However, Fannie, Freddie, and HUD do not require their seller/servicers and approved mortgagees to have an annual affordable housing goal or anything similar, to be approved to do business with them.

What if Fannie and Freddie — the Government Sponsored Enterprises (GSEs) — and HUD required each seller/servicer and Approved Mortgagees to have a written affordable housing goal, whereby the seller/servicers and approved mortgagees were required to have an outreach program to low- and moderate-income families, minority communities, rural areas, and other underserved populations (just like the GSE’s and HUD). Let’s say that each seller/servicer and approved mortgagees were required to increase their lending volumes to low- and moderate-income families, minority communities, rural areas, and other underserved populations by 10% each year, compounded for 10 years. And the GSEs and HUD audited the seller/servicers and approved mortgagees annually as a requirement to be recertified and reapproved to do business with the GSEs and HUD? The GSEs and HUD have affordable housing goals, but they do not place the same responsibility on to the seller/servicers and approved mortgagees. If the GSEs and HUD would implement such a program for its seller/servicers and approved mortgagees, the housing gap would be closed for all minorities in 10 years, and we would have a completely different mortgage world and society.

MORTGAGE BANKER | JANUARY 2022 9

THE ‘OM-BOBS-MAN’

AARMR No Protection For Savanah Scares

R

By B O B NIEM I, M ORTG AG E BAN KE R M AGAZ IN E CON TRIB U TIN G WRITER

egulator conferences have been on hold for almost two years. But in late November, the American Association of Residential Mortgage Regulators (“AARMR”) held their Annual Conference in Savannah Georgia. The city is called the most haunted city in the United States.

While Savannah proved to be a pleasant host, but evening walks were not the only source of scary stories.

The AARMR Conference provided an opportunity for regulators from more than thirty states to interact with their industry associates with a cumulative number of in-person attendees in the mid-180s. The conference kicked off with a welcome reception on the evening of November 30th and the first full day of sessions was held on December 1st.

The full day of events was highlighted by three state hot topic sessions.

Common topics of note were unlicensed activity as well as use of unlicensed independent contractors for processing support.

Advertising issues including missing state BOB NIEMI required notices and missing NMLS numbers were also mentioned. Several mentions of recent examination trends for failure to comply with state specific requirements including record keeping, state specific disclosures and the degrading quality of financial reporting. Several examiners agreed about the concern to increasing errors in Mortgage Call Reports. Common to all sessions were brief discussions about the dramatic increase in number of licenses on the NMLS and system issues delaying renewal work.

The highlight of the hot topic sessions were announcements from

10 MORTGAGE BANKER | JANUARY 2022

Maryland and Kansas that their departments would be introducing legislation to eliminate branch licensing. Regulators reinforced that companies still need to know where their originators are conducting business and will notify the regulator where their branches are located. However, the full details of the bills and how each state would handle the offset of the loss of branch licensing revenue was not fully discussed.

EXAMINING EXAMS

Examinations were a featured theme beyond the hot topic sessions with several states discussing the use of the State Examination System (“SES”) during hot topics as well as specific session on lessons learned from the One Company, One Exam (“OCOE”) pilot that was ongoing. States shared that they were still testing the SES or just onboarding to the system. This fact was evident in the discussion of the challenges learned from the use of the SES and the OCOE process. Several states were onboarded to the SES just before the OCOE and that weekly training events were still being held for examiners during the examination.

Clearly the discussion showed that the regulators understood that the OCOE pilot was putting tremendous pressures on to the company being examined, though the company name was never mentioned. New examiners and recently onboarded states provided many challenges to the company and process. The lessons learned would be brought back and the process evaluated before the next OCOE was attempted.

Industry panel sessions and the attendee round table finished out the conference. Topics discussed were NMLS system delays, branch licensing flexibility, state CRA requirements and more. AARMR has announced plans for a full conference in August of 2022 in Indianapolis.

E X P O E X P E CTATI O N S

CMBA CORPORATE ADVISORY PLATINUM American Business Media LLC Data Facts First County Bank Liberty Bank Norcom Mortgage Robinson + Cole SimpleNexus Thomaston Savings Bank Union Savings Bank Webster Bank

CMBA CORPORATE ADVISORY GOLD Bendett & McHugh Birchwood Credit Services CATIC Connecticut Housing Finance Authority (CHFA) Fairfield County Bank First American Title Insurance First World Mortgage Genworth Mortgage Insurance Guilford Savings Bank McCalla Raymer Leibert Pierce LLC RES/TITLE People’s United Bank Washington Trust Mortgage Company

On behalf of the American Business Media and the Originator Connect Network, working in conjunction with the Connecticut Mortgage Bankers Association, I am pleased to welcome you to the 2022 New England Mortgage Expo.

Really, those are words that are incredibly satisfying to write, after the past year we’ve all been through.

VINCENT VALVO

It is great to be able to meet in person after so many months apart. The Expo presents a world of opportunity for the entire mortgage community, both residential and commercial. We have the largest attendee roster, the largest exhibitor lineup, top industry speakers and industry-leading event partners all coming together for a spectacular day at Mohegan Sun. We have created a strong agenda with ample networking opportunities.

The past year and half has been a challenging time for everyone personally and professionally. As we recover from the pandemic, I am convinced more than ever about the importance of mortgage lending and the resiliency of our industry. Home ownership has meant more this past year than ever before.

Please make sure to also enjoy all the wonderful dining and entertainment options available at Mohegan Sun. I want to thank the CMBA, the staff of the AmBiz, and all the volunteers for making this the premier event of its kind in our region.

Vincent Valvo

CEO, American Business Media

PRODUCED BY

AND

MORTGAGE BANKER | JANUARY 2022 11

Agenda THURSDAY, JAN. 13

3:00 pm

12:00 pm

Rocket Pro TPO Main Stage; Presented By: Norm Roos, Robinson & Cole

Legislative Panel

Please note, exhibit hall will not be open on this day.

Registration Opens 1:00 pm — 4:30 pm

Non-QM Summit Non QM loans are a critical tool for mortgage originators, but this year there have been significant shifts in the industry caused by the ripple effects of the pandemic. Many companies are now re-starting or entering the Non QM space.

But the rules for borrowers and brokers are changing. That’s why the New England Mortgage Expo is pleased to present The Non QM Summit, a specialized half-day program that takes attendees inside the thinking, planning and programs of the nation’s leading Non QM providers.

Register for the Non-QM Summit when you register to attend the New England Mortgage Expo.

Find the Non-QM Summit agenda available here.

2:00 pm

Diversity and Inclusion Roundtable Hear from a panel of experts about latest initiatives in the mortgage industry to broaden access to diverse populations.

Damon Carter, CATIC

Terence Floyd, Wells Fargo

12 MORTGAGE BANKER | JANUARY 2022

What is in store for the mortgage industry in 2022? How will you need to change the way you do business going forward? Will a metamorphosis of laws, regulations, and enforcement activity have a large or little impact? What should you focus on at the federal and state level? This session will give you the information you need to know and will cover CT, MA and RI. Panelists include Lawrence Garfinkel, Greene Law P.C.; Deborah Sousa, Mass. Mortgage Bankers Association; David Pellegrino, Navigant Credit Union; and Robert Wichowski, Bendett & McHugh LLC. Moderated by Norm Roos, Robinson & Cole.

4:00 pm

Interactive Leadership Workshop: Hybrid of Resiliency, Support, Stress Management and Balance.

Presented By: Bill Florin, Learning Dynamics Join the CMBA’s YMP committee to hear Bill Florin with Learning Dynamics discuss resiliency, supporting others, stress management and problem solving in an interactive leadership workshop.

Evelyn Sanchez, CHFA

Maria Rivera, Neighborhood Housing Services of Waterbury

8:00 pm – 10:00 pm

Networking After Dark Networking After Dark with RCN Capital, hosted in the Vista Lounge at Wombi Rock

FRIDAY, JAN. 14 7:00 am

Registration Opens 8:15 am – 9:00 am

Concurrent Sessions SESSION A

Inspiring Women In Mortgage Presented By; Kelly Hendricks, Mortgage Women Magazine Join moderator Kelly Hendricks, managing editor of Mortgage Women Magazine, and our all-star lineup of accomplished women as we explore what obstacles women, especially, have to overcome to excel in the mortgage industry. We’ll look, for example, a developing a more competitive mindset, or whether women have to work much harder to balance family and work duties, or simply why old-school ideas of what’s right for women still persist.

Lawrence Garfinkel, Greene Law P.C

Deborah Sousa, Mass. Mortgage Bankers Association

David Pellegrino, Navigant Credit Union

TITLE SPONSOR

SESSION B

Rethinking Business As Usual — Investing in Your Process & People with Technology Presented By: Bob Voll, BeSmartee Start your day with a conversation around focusing on profit by challenging businessas-usual during slow periods, and using downtime as an opportunity to retool.

• Assess your competition • Invest in your process with technology • Protect and nurture employee growth • Presented by Bob Voll, BeSmartee

diversify your business by adding reverse mortgages to your lineup of products.

Reverse mortgages are no longer a niche market. With a broad selection of proprietary, non-QM loans, and traditional HECMs, you’ll be surprised how flexible these products can be for your customers and your business. And as the demand for reverse mortgages continues to soar, you, too, can tap into this burgeoning market and offer an array of reverse mortgage products that your older customers want and need while guaranteeing your revenue stream.

SESSION B

Finding Your Top Team

SESSION C

Selling Philosophies, Thoughts, and Ideas

Presented By: Michael Whitbeck Managing Director, BluePrint

Presented By: Peter Kulis, Reverse Mortgage Funding

Avoid the hiring issues with processing / underwriting. How to hire, train, and develop your own team! After decades of experience in mortgage operations management, many have found a constant challenge trying to hire team members to fill key roles such as loan officer assistant, processor, underwriters, and auditors. Since there is no college degree or tech schools that formally train these team members it creates quite the challenge to fill these roles with competent team members. Choose the wrong candidate and it can cost you thousands in origination errors, rate locks “busts”, underwriting errors, and reputation risk in approving borrowers that cannot meet underwriting guidelines.

Your business likely flourished over the past couple of years from record high equity, low interest rates, and motivated customers. But with the refi and purchase boom already declining and interest rates now on the rise, it is the ideal time to

In this session you will be provided with the four key elements to solve this problem and how to properly execute it. With these principals you be provided with the framework to build your own “production assembly line” for these operations

Presented By: Jamie Gueltzow, LendSure This presentation will go over target marketing, multidimentional selling, nontraditional avenues, effective use of social media, and more.

9:00 am – 9:45 am

Concurrent Sessions SESSION A

Take Control of Your Future Business by Adding Reverse Mortgages to Your Playbook Today

Robert Wichowski, Bendett & McHugh LLC

Norm Roos, Robinson & Cole

Bill Florin, Learning Dynamics

Bob Voll, BeSmartee

members and also consider our “turn key system”. This session will benefit the loan officer hiring their first processor, the small team looking grow with scale, or the corporate trainer that need a time tested training system to decrease turn times while increasing the level of quality.

SESSION C

Access Soft Inquiry Credit Reports for Mortgage Pre-Qualifications!

Presented by: Bill Merryman, President of National Accounts, UniversalCIS | Credit Plus; Rosa Mumm, Vice President Score Optimization, UniversalCIS | Credit Plus Learn how Loan Officers can take advantage of “Soft Inquiry Credit Report & Score Technology”. Lower your companies initial credit report transaction cost, reduce “Trigger Leads from being generated”, and increase your “Online Exposure” while growing new purchase business! We will educate the audience on Soft Inquiry credit reports and how best to utilize them with your business going forward.

• Benefits of utilizing Soft Inquiry Credit Reports!

• Review the compliance behind these credit reports and show attendees how they can Maximize their return online and with Realtors this Spring!

• Attendees will learn how they can easily setup and take advantage of a Personalized “Qualify-Me-Now” Mortgage Prequalification site. (Site is Free to setup) • Plus, we will have a special guest, Rosa Mumm, Vice President of Score Optimization who will review our CreditXpert — “concierge service”offered

by UnivesalCIS |Credit Plus that gives Loan Officers access to experienced Credit Experts who will review and help

Jamie Gueltzow, LendSure

Peter Kulis, Reverse Mortgage Funding

Michael Whitbeck, BluePrint

MORTGAGE BANKER | JANUARY 2022 13

Agenda with a plan that can be shared with prospects to assist as they prepare for a successful mortgage loan experience!

SESSION D

The Future Of The Real Estate Transaction Presented By: James O’Donnell, Equity National Title Forces of change are acting on the real estate industry. New technologies, new players, market consolidation and more.

From closings to financing to purchases, everything is in flux. We’re convening a panel of inside experts for this insightful session.

9:45 am – 10:30 am

Concurrent Sessions SESSION A

Transitioning from the Refi Boom to Untapped Opportunities: Leveraging Commercial Mortgages for Residential Properties Presented By: Jeffrey Tesch, RCN Capital While the pandemic has affected many aspects of the real estate industry and the refi boom is showing signs of slowing down, real estate investor activity and demand for single-family homes remains stronger than ever. Now is the time to expand your product offerings to cater to this segment of the market. Private lending continues to offer flexible, lucrative options for fix and flip, long-term rental and other real estate investing scenarios that don’t fit traditional guidelines.

• Identify profitable solutions for some of your most commonly overlooked leads

Bill Merryman, President of National Accounts, UniversalCIS | Credit Plus

Rosa Mumm, Vice President Score Optimization, UniversalCIS | Credit Plus

14 MORTGAGE BANKER | JANUARY 2022

• Leverage fix & flip loans, long-term rental loans, and other private lending products to make more money now • Guide investors through the origination process so that you can develop and retain more business • Strengthen your business and set yourself up for long-term success. Don’t miss this session.

SESSION B

The New Non-QM: How It Works For You Presented By: Jamie Bellingham, Angel Oak Mortgage Solutions Alternative lending is the fastest growing segment of the mortgage industry — come learn why. With a growth potential of upwards of $200 billion, it’s imperative to get involved today. By offering non-agency/ non-QM products, lenders can break into an untapped market, increase their reach and help millions of underserved American homebuyers find a mortgage that fits their needs – ultimately growing their business.

Presented by Jamie Bellingham, Angel Oak Mortgage Solutions.

Learning Objectives include understanding: • What exactly is non-QM • Common misconceptions regarding non-QM • What programs are available to help challenging borrowers • How technology is helping make nonQM even easier to close • How to identify and reach potential non-QM borrowers • How to qualify and actively market to add volume • What to look for in a non-QM investor

Jeffrey Tesch, RCN Capital

Jamie Bellingham, Angel Oak Mortgage Solutions

SESSION C

Greatness Talks: Best-Of-Breed Tips From Top Brokers Presented by: Bruce Goldberg, First Vice President, Broker Direct Sales, PennyMac Broker Direct; Terry Casey, Market Sales Manager, PennyMac Broker Direct Some originators make a living, and some make a killing. What is it that sets top originators apart from everyone else? Top personnel from PennyMac will be joined by several of the best brokers in the region to share the secrets for overwhelming success.

10:30 am – 11:15 am

Harnessing Your Superpower

Presented By: Paul Yatooma, Rocket Pro TPO Discover how a 3-person brokerage firm grew, re-invented and went headto-head with big banks to become America’s largest mortgage lender. Paul Yatooma, Vice President at Rocket Pro TPO, shares philosophies that you can use to shape innovation, client service, marketing, technology and partnerships.

Learn what top brokers are doing to grow their business and how you can leverage your superpower. Bring your questions, because this is an interactive presentation.

11:15 am

Exhibit Hall Opens Exhibit hall opens, luncheon and refreshments are served in the exhibit hall

1:30 pm

Expo Adjourns Exhibit hall closes, raffle prizes announced, conference adjourns.

Bruce Goldberg, First Vice President, Broker Direct Sales, PennyMac Broker Direct

Terry Casey, Market Sales Manager, PennyMac Broker Direct

Paul Yatooma, Rocket Pro TPO

MortgageBanker MAGAZINE

DATABANK

MORTGAGE BANKER | JANUARY 2022 15

L EGAL

MORTGAGE BANKING LAWYERS These attorneys are universally recognized by their peers as setting the highest standard for the legal profession, excelling in all fields — knowledge, analytical ability, judgment, communication, and ethics.

Thomas King Attorney

Mitchel H. Kider Managing Partner

Gregory S. Graham Co-Managing Partner

tking@ravdocs.com 713-980-9521

kider@thewbkfirm.com 202-557-3511

ggraham@bmandg.com 972-353-4174

Thomas (Tom) King’s practice is focused on federal financial services-related regulatory and compliance-related issues.

He advises small and medium-sized mortgage and consumer lenders and servicers on a broad variety of topics including, among others, implementation of Dodd-Frank Act requirements, compliance program development and management, examination preparation, employee regulatory compliance training, general counseling, transactional work and loan level advice. King has a juris doctorate, cum laude, from The Thomas M. Cooley Law School where he was notes editor of the school’s law review. He has a bachelor of science from Michigan State University with majors in Psychology, Sociology and Political Science. Licensed to practice in Michigan; not licensed in Texas; practice limited to federal regulatory law.

In his 35 years as a practicing attorney, Mitch has represented banks, mortgage companies, residential homebuilders, real estate settlement service providers, credit card issuers, and other financial service companies in a broad range of matters. Mitch represents clients in investigations and enforcement actions before the Consumer Financial Protection Bureau, Department of Housing and Urban Development, Department of Veterans Affairs, Department of Justice, Federal Trade Commission, Ginnie Mae, Fannie Mae, Freddie Mac, and various state and local regulatory authorities and Attorneys General offices. In addition, Mitch acts as outside general counsel to smaller companies and special regulatory and litigation counsel to Fortune 500 companies.

Black, Mann & Graham Co-Managing Partner Gregory S. Graham has practiced in the areas of real estate, litigation, and bankruptcy law since 1989, and is currently licensed in Texas and admitted to practice before the United States District Courts for the Northern and Eastern Districts of Texas.

Mr. Graham is also currently licensed to practice law in Georgia and has been since 2017. He received his Juris Doctor degree from Southern Methodist University School of Law in 1989 after receiving a Bachelor of Arts cum laude from UT Dallas.

16 MORTGAGE BANKER | JANUARY 2022

Mr. Graham’s affiliations include the Dallas MBA, where he previously served as a Director & Chairperson of the Legislative Committee; DFW Mortgage Brokers Association, where he previously served as Legal Counsel; MBA; NAMB; Texas AMB prior to its closure; and Texas MBA.

Hey, Irvine!

The California Mortgage Expo is one of California’s largest mortgage events for loan origination professionals, bringing together hundreds of mortgage brokers, loan originators and bank and credit union lending officers from throughout the region for an event full of education, networking and fun. You’ll be growing your business and your contacts in a setting packed with passion,

James W. Brody, Esq. Mortgage Banking Practice Group Chair jbrody@johnstonthomas.com 415-246-3995 James Brody actively manages all the complex mortgage banking litigation, mitigation, and compliance matters for Johnston Thomas. Mr. Brody’s experience centers on those legal issues that arise during loan originations, loan purchase sales, loan securitizations, foreclosures, bankruptcy, and repurchase & indemnification claims. He received his B.A. in International Relations from Drake University and received his J.D., with a certified concentration in Advocacy, from the University of the Pacific, McGeorge School of Law. He was a recipient of the American Jurisprudence Bancroft-Whitney Award. He is licensed to practice law in California and has been admitted to practice in front of the United States District Courts for the Central, Eastern, Northern, and Southern Districts of California. In addition, Mr. Brody has served as lead litigation counsel for numerous mortgage banking and commercial related disputes venued in both state and federal courts, in a direct capacity or on a pro hac vice basis, in AZ, CA, FL, MD, MI, MN, MO, OR, NJ, NY, PA, TN, and TX.

Marty Green Attorney marty.green@mortgagelaw.com 214-691-4488 ext 203 Marty Green leads the Dallas office of Polunsky Beitel Green, one of the country's top residential mortgage law firms. Mr. Green is an accomplished attorney with more than 20 years of experience in the legal, banking and financial services industries. He is the former Executive Vice President and General Counsel for Dallas’ CTX Mortgage Co. and previously worked with the Baker Botts law firm in Dallas as Special Counsel. In his role as leader of the firm’s Dallas office, Mr. Green advises clients on the latest rules and regulations covering residential lending, in addition to building on Polunsky Beitel Green’s long tradition of delivering loan closing documents with speed and accuracy. Mr. Green is admitted to practice before all Texas state and federal district courts in addition to the U.S. Court of Appeals for the Fifth Circuit. An honors graduate of the University of Texas School of Law, he earned his undergraduate degree at Southern Utah University. Texas Monthly has selected him as a Super Lawyer multiple years.

MORTGAGE BANKER | JANUARY 2022 17

professionalism and fun.

Wednesday, May 4th, 2022 Irvine, CA + Free NMLS Renewal Class May 5th

www.camortgageexpo.com Enjoy free registration using our code: OCNFREE

PRESENTING SPONSOR

NON-QM SPONSOR

REVERSE MTG SPONSOR

SHOW PRODUCER

Safety is our top priority. Learn about the safety precautions we take at each of our events to earn us 100% safety satisfaction from our attendees at originatorconnectnetwork.com/covid19.

Complimentary registration available to NMLS-licensed active LOs and their support staff. Show producers reserve the right to determine final eligibility.

NON QM Directory

Angel Oak Atlanta, GA

www.angeloakms.com What Non-QM programs does your company offer?

Angel Oak Mortgage Solutions is the leader in the non-QM mortgage space.

We offer alternative specialized mortgage solutions for brokers throughout the country helping borrowers who don’t fit conventional guidelines. Our innovative non-QM products include:

Bank Statement, Platinum Jumbo, No Income Investor Cash Flow, Portfolio Select and Asset Qualifier. We are pioneering a fresh approach to today’s mortgage lending challenges helping partners to grow their business.

Which states are you licensed in?

NATIONWIDE except: AK HI ID MA MO NY VT

Arc Home LLC

Mount Laurel, NJ business.archomellc.com/ What Non-QM programs does your company offer?

When it comes to choosing your Wholesale lending partner, we know there are many things to consider. Our products set the standard in the industry for innovation. And because that innovation is in our DNA, we will always be on the cutting edge of what matters most to you and your borrowers.

We offer a plethora of Non-QM programs, such as Alternative IncomeBank Statement, Asset Utilization Qualification, DSCR, Agency Plus, Clean Slate, Foreign National, and ITIN. Which states are you licensed in?

Arc Home LLC is licensed in all states except MO HI and NV

Carrington Wholesale Anaheim, California www.CarringtonWholesale.com

What Non-QM programs does your company offer?

The Carrington Advantage Series is a full suite of Non-QM Loan solutions that “Delivers More” for you and your borrowers.

Ideal for borrowers, like the self-employed, that don’t fit Agency or Government Qualified Mortgage standards based on credit quality, property type, documentation type, income documentation, or other borrower situations.

• FICOs 550+ • Primary wage earners FICO

• Bank Statements (personal or business) accepted • DTIs up to 50% • We don’t require disputed tradelines to be removed With the Carrington Investor Advantage (DCR) • DCR down to .75 • First-time investors are ok • Only 48 months seasoning for major credit events • 1x30x12 mortgage history ok Which states are you licensed in?

47 States (excluding NH MA and ND)

18 MORTGAGE BANKER | JANUARY 2022

Oaktree Funding Corp.

Chandler, AZ www.oaktreewholesale.com

What Non-QM programs does your company offer?

Oaktree’s NonQM products include a multitude of flexible guidelines that give brokers an advantage in the current market. Our most recent addition to these programs is the Titanium Advantage. It allows for a single year of tax returns with a P&L, the lowest rates available, and 3 months of bank

statements. Our Investor Advantage program doesn’t require reserves! Plus, you’ll get up to $3M in loan amount on all fixed-rate products or do a Non-Agency Advantage for 90% LTV up to $2M! Which states are you licensed in?

AZ CA CO CT DC FL GA ID IL IN MA MD MI MN MO NC NJ NM NV OH OR PA SC TN TX UT VA WA WI

Howdy, Austin!

Get excited about live events! Join your community of mortgage professionals at the Lone Star State’s largest mortgage event, The Texas Mortgage Roundup. Don’t miss out on our lineup of engaging events centered around networking, skill-building, and kick off your year having a great time with your peers at our edition in Austin.

Tuesday, February 8th, 2022

Austin, TX

+ Free NMLS Renewal Class February 9th

www.txmortgageroundup.com Enjoy free registration using our code OCNFREE

PRESENTING SPONSOR

NON-QM SPONSOR

REVERSE MTG SPONSOR

SHOW PRODUCER

TEXAS

MORTGAGE ROUNDUP

Safety is our top priority. Learn about the safety precautions we take at each of our events to earn us 100% safety satisfaction from our attendees at originatorconnectnetwork.com/covid19.

Complimentary registration available to NMLS-licensed active LOs and their support staff. Show producers reserve the right to determine final eligibility.

NO RISK, ALL REWARD, SELECT A LOAN PROGRAM

NEW CONSTRUCTION

FIX & FLIP

12 to 24-Months Rates Starting at 7.99%

12 & 18-Months Rates Starting at 7.49%

SHORT-TERM RENTAL

LONG-TERM RENTAL

30-Years Rates Starting at 3.75%

30-Years Rates Starting at 3.75%

DON’T TAKE A GAMBLE WITH OTHER LENDERS, BET ON RCN CAPITAL

Visit RCNCapital.com \ Email Info@RCNCapital.com \ Call 860.432.5858 RCN Capital, LLC is licensed as a California Finance Lender under Department of Business Oversight license number 60DBO-46258.

Arizona Mortgage Banker License BK-0932325. Oregon Mortgage Lending License: ML-5571; NMLS Company ID: 1045656.