National Mortgage Professional Magazine April 2017 by ambizmedia

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NationalMortgageProfessional.com

MLS LinkTM is a "set it and forrget it" feaature

table of N A T I O N A L

34 Visionary Organizations 2017

A P R I L

80 NMP’s Mortgage Professional of the Month: Alex Elezaj, Chief Executive Officer, Class Appraisal Inc. By Phil Hall

2 0 1 7

M O R T G

V O L U M

A SPECIAL FOCUS ON “LEADERSHIP”

Become a More Effective Leader By Ray Brousseau............................ 56

Emerging Leaders and How to Find Them By Chad Gomoll................ 59

The Importance of Self-Awareness and Humility in Leadership By Reza Jahangiri...................................................................................... 61

N S

Making Room for a New Generation of Leaders By Patty Arvielo........ 63 The Lost Leader By Eric Weinstein.......................................................... 65

To Lead or Not to Lead ... By Vincent Spoto.......................................... 66

Leaders Who Influence Are Leaders for Life By Shirleen Von Hoffmann........................................................................ 69

R Y

Making an Impact By Niki DeMarco-Nevarez.......................................... 70 Leadership: Can It be Home Grown? By Beth O’Brien.......................... 72

Shut Up and Follow the Follower: Leadership Communication By Jerome Mayne...................................................................................... 74

86 The Real Impact of Compliance On Industry Costs By Rick Grant

The Key to Effective Leadership: Humility First By David Lazowski & Amy Slotnick............................................................76

Our Future Leaders and Character-Driven Leadership By Rear Admiral Tom Lynch, USN (Ret.)....................................................78

Getting Past Change: Today’s Leaders Coping With Complexity By Laura Burke, MBA, MS, EA, CFE.......................................................... 79

FEATURES Now Is the Time By Tom Hutchens............................................................8

The Elite Performer: March “Madness” By Andy W. Harris, CRMS........ 8 Recruiting, Training and Mentoring Corner: What Is Your Long-Term Leadership Vision? By Dave Hershman.............................. 10

88 NMP’s Legends of Lending: Moneyhouse By Phil Hall

92 Are the Millennials Finally Becoming a Force in Homeownership? By Phil Hall

V I S I T Company

Web Site

O U R

A D Page

Agility Resources Group...................................... www.agilityresourcesgroup.com ......................................75 Angel Oak Mortgage Solutions............................ www.angeloakms.com .............................. 68 & Back Cover Brokers Compliance Group.................................. www.brokerscompliancegroup.com ................................ 104 Caliber Home Loans.............................................. www.caliberwholesale.com .............................................. 25 CallFurst.com...................................................... www.callfurst.com ............................................................62 Carrington Mortgage Services, LLC...................... www.carringtonwholesale.com ................................ 7 & 69 Champions School of Real Estate........................ www.championsschool.com/loan .................................... 64 Citadel Servicing Corporation.............................. www.citadelservicing.com .............................................. 55 Document Systems, Inc./DocMagic...................... www.docmagic.com ...................................................... 11 First Guaranty Mortgage Corp. ............................ www.fgmccorrespondent.com .......... Inside Front Cover & 58 First Tennessee Bank.......................................... www.firsttennessee.com .................................................. 9 Flagstar Bank.................................................... www.flagstar.com/ae .................................................... 17 Franklin Flood.................................................. www.premierflood.com ..................................................72 Freddie Mac...................................................... www.freddiemac.com/loanofficers ....................................5 Freedom Mortgage Corporation.......................... www.freedomwholesale.com .......................................... 27 HomeBridge Wholesale...................................... www.homebridgewholesale.com .................................... 83 Integrity Mortgage Group.................................... www.integritymtgs.com ..................................................67 Lykken On Lending............................................ www.lykkenonlending.com ............................................ 74 MBA of NY ........................................................ www.mbany.org ............................................................ 65

T T

of contents

R T G A G E

L U M E

P R O F E S S I O N A L

N U M B E R

Be a Trend Setter......................................................................................16 Three Elements Required for Organic Recruiting Success By Steve Rennie........................................................................................ 18 NAMB Perspective: April 2017................................................................ 20 Millennials and Homeownership By Jon Tallinger.................................. 22

New York Defines Consummation of a Mortgage Loan, Supports eClosing By Gavin T. Ales........................................................ 24 3 Points With Mat Ishbia.......................................................................... 26 Beware! Wire Fraud Phishing Scams Are on the Rise By Andrew Liput........................................................................................ 28 Ransomware: Donâ&#x20AC;&#x2122;t Let Cyber Extortion Lock the Doors to Your Mortgage Business By Dean L. Milber, JD, MA............................ 30 X Marks the Sale: How Gen X Can Make You Richer This Year By Bubba Mills............................................................................................32 OrigiNation: Technology Trends By Andy W. Harris, CRMS.................. 38 Lykken on Leadership By David Lykken..................................................44 The Mortgage Godfather By Ralph LoVuolo Sr.......................................46 Exploring the World of Audience Modeling By Leah Roling..................48 Five LinkedIn Steps That Will Double Your Business By Kerry Johnson, Ph.D............................................................................. 50 The Long & Short: The Business of Short Sales By Pam Marron........ 54 Why Prospects Shop and How to Make Them Use You By Brian Sacks.......................................................................................... 96 Smaller Lenders Take Note: Streamline Your Vendor Strategy By Bill Sullivan............................................................................................ 98

A D V E R T I S E R S Company

Web Site

Page

MBS Highway.................................................... www.mbshighway.com/MNN .......................................... 94 Mortgage News Network (MNN).......................... www.mortgagenewsnetwork.com ............................ 84 & 85 NAMB+............................................................ www.nambplus.com ...................................................... 23 NAMB Kickstart.................................................. www.nambkickstart.com ................................................19 NAPMW............................................................ www.napmw.org ....................................................47 & 76 NAWRB............................................................ www.nawrb.com ............................................................90 New York Community Bancorp. Inc..................... www.nycbmortgage.com ................................................ 39 NMP U.............................................................. www.nmpucoaching.com .................................. 29, 45 & 91 NRMLA.............................................................. www.nrmlaonline.org .................................................... 66 OSI Express........................................................ www.osiexpress.com/mlslink ............................................ 1 Paramount Residential Mortgage Group, Inc....... www.prmg.net .......................... 13, 71 & Inside Back Cover REMN Wholesale................................................ www.remnwholesale.com .............................................. 15 ResMac, Inc....................................................... www.resmacb2b.com .................................................... 95 Ridgewood Savings Bank.................................... www.ridgewoodbank.com .............................................. 60 Secure Insight.................................................... www.secureinsight.com ..................................................41 TagQuest.......................................................... www.tagquest.com ........................................................ 93 The Bond Exchange............................................ www.thebondexchange.com .......................................... 77 United Wholesale Mortgage................................ www.uwm.com ........................................................ 52-53

APRIL 2017 Volume 9 • Number 4

1220 Wantagh Avenue • Wantagh, NY 11793-2202 Phone: (516) 409-5555 • Fax: (516) 409-4600 Web site: NationalMortgageProfessional.com STAFF Eric C. Peck Editor-in-Chief (516) 409-5555, ext. 312 ericp@mortgagenewsnetwork.com

Joel M. Berman Publisher - CEO (516) 409-5555, ext. 310 joel@mortgagenewsnetwork.com

Joey Arendt Art Director (516) 409-5555, ext. 307 joeya@mortgagenewsnetwork.com

Beverly Bolnick VP-Sales & Marketing (516) 409-5555, ext. 316 beverlyb@mortgagenewsnetwork.com

Scott Koondel VP of Operations (516) 409-5555, ext. 324 scottk@mortgagenewsnetwork.com

Phil Hall Managing Editor (516) 409-5555, ext. 312 philh@mortgagenewsnetwork.com

Richard Zyta Social Media Ambassador (516) 409-5555 richardz@mortgagenewsnetwork.com

Francine Miller Advertising Coordinator (516) 409-5555, ext. 301 francinem@mortgagenewsnetwork.com

Rick Grant Special Reports Editor (570) 497-1026 (direct) (516) 409-555, ext. 311 rickg@mortgagenewsnetwork.com

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ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact VP-Sales & Marketing Beverly Bolnick at (516) 409-5555, ext. 316 or e-mail beverlyb@mortgagenewsnetwork.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@mortgagenewsnetwork.com. The deadline for submissions is the first of the month prior to the target issue.

SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail orders@mortgagenewsnetwork.com or visit www.nationalmortgageprofessional.com. Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600. Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the authors alone and do not imply the opinion or endorsement of Mortgage News Network Inc., or the officers or members of National Association of Mortgage Brokers and its State Affiliates (NAMB), National Association of Professional Mortgage Women (NAPMW), National Consumer Reporting Association (NCRA) and/or other state mortgage trade associations. Participation in NAMB, NAPMW, NCRA, and/or other state mortgage trade associations events, activities and/or publications is available on a non-discriminatory basis and does not reflect the endorsement of the product and/or services by Mortgage News Network Inc., NAMB, NAPMW, NCRA, and other state mortgage trade associations. National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, and/or other state mortgage trade associations do not make any misrepresentations or warranties concerning the regulatory and/or compliance aspects of advertisers, products or services and/or the editorial content contained in Mortgage News Network Inc. publications. National Mortgage Professional Magazine and Mortgage News Network Inc. reserve the right to edit, reject and/or postpone the publication of any articles, information or data.

FROM THE

publisher’s desk

All hail the industry’s leaders! It’s spring. After a long, cold winter, we’re beginning to see color return to communities all across the country. Nature has smoothly shifted into the next phase of the cycle and promises to bring us abundant new growth. Too bad our businesses don’t have the same kind of automation. For us, growth depends upon strong leadership, but that’s something we are finding almost everywhere we look. In this issue, we focus on industry leadership, bringing you the trends that are driving our business, the companies that are capitalizing on new opportunities and, most importantly, the executives that are leading the charge. And just in time as our industry shifts away from refinance business and into the more challenging purchase money market. I’m very proud to bring you the collection of insight and actionable information we’ve bundled into this issue, but the crown jewel is our 2017 Visionary Organizations feature. These are the companies that not only identify the trends, but set them. They stay ahead of the curve by driving the business, letting others follow in their wake. See page 34 of this issue for this year’s Visionary Organizations feature. Naturally, we cannot bring you every great organization in one issue, but this list will get you started on identifying those firms most likely to emerge as the strongest companies in the new mortgage lending business. Start with the Visionary Organizations and then move on to our Legends of Lending and Mortgage Professional of the Month features. This month’s Legend of Lending is Moneyhouse. To find out more about the company and its philosophy, see page 88. We visited with Moneyhouse senior vice president of the U.S. Division and Chief Information Officer Ralph Rosynek. Finally, our Mortgage Professional of the Month for April is Alex Elezaj, Chief Executive Officer of Class Appraisal Inc. Turn to page 80 to learn more about Alex and his work with Class Appraisal. One of the most difficult challenges leaders in our industry face today is the ever-rising cost of mortgage loan origination. Much of these new costs are coming from compliance pressure. We’ve all read the results of surveys from the industry’s top trade organizations and everyone knows that compliance costs are out of control. We wanted to know exactly how this trend was impacting our readers. To find the answers, National Mortgage Professional Magazine teamed up with real estate services provider WFG National Title Company to survey a broader segment of industry players over a two-year period. Our goal was to gain insight into the real impacts of compliance, both on costs and lender processes employed. After reaching out to 10,000 mortgage professionals from all across the industry, the results are in and they may surprise you. Our landmark survey and detailed analysis begins on page 86 of this issue. In addition to all of this, we bring you 13 articles all related to the topic of leadership. You won’t find another resource anywhere offering this much information, all designed specifically to make you more successful. Here is just a glimpse at what you’ll find inside:

l “Making Room for a New Generation of Leaders” by Patty Arvielo, president and co-founder of New American Funding, who discusses the opportunity lenders have to create greater diversity on page 63. l “Become a More Effective Leader” by Ray Brousseau, president of Carrington Mortgage Services LLC, Mortgage Lending, who tells us about six attributes of effective leadership and how to recognize them in others on page 56. l “Getting Past Change: Today’s Leaders Coping With Complexity” by Laura Burke, director of Tax for Global Tax Masters, who shares a timeline of industry change going back to 2013 on page 79. l “Emerging Leaders and How to Find Them” by Chad Gomoll, senior vice president of Business Development at Inlanta Mortgage, who writes about what it really means to be a leader today beginning on page 59. l “The Importance of Self-Awareness and Humility in Leadership” by Reza Jahangiri, founder and chief executive officer of American Advisors Group, who provides his insight into what truly drive today’s industry leaders on page 61. l “The Key to Effective Leadership: Humility First,” co-authored by David Lazowski and Amy Slotnick, branch managers for Fairway Independent Mortgage Corporation, who share their characteristics of great leaders beginning on page 76. l “Our Future Leaders and Character-Driven Leadership,” from Rear Admiral Tom Lynch, USN (Ret.), executive chairman of NewDay USA, who details developing talented, smart and eager men and women to become future leaders of our industry on page 78. And that’s just part of what we have in store for this issue. I’m proud to bring this collection to you this month and hope it makes you all stronger leaders. Our industry needs strong leaders and our readers stand the best chance of filling those roles in the days ahead. One final thing before I sign off … National Mortgage Professional Magazine recently partnered with a new association, to become their Official Publication, the National Association of Minority Mortgage Bankers of America (NAMMBA). NAMMBA, led by Founder and CEO Tony Thompson, is a national trade association dedicated to the enrichment and betterment of minorities and women who work in the mortgage industry. I would like to recognize Tony as a leader who is taking charge in today’s marketplace. Tony recently wrapped NAMMBA’s Connect 2017 Annual Conference in Atlanta. This was NAMMBA’s inaugural conference, and I am happy to report that it was a great success. Driven by Tony’s determination, sacrifice and leadership, NAMMBA is poised for great things down the line. Congratulations to Tony and NAMMBA on a successful event and the best of luck as he takes this new association into the future. Sincerely, Joel M. Berman, Publisher-CEO NMP Media Corp. Joel@NMPMediaCorp.com National Mortgage Professional Magazine is published monthly by Mortgage News Network Inc. • Copyright © 2017 Mortgage News Network Inc.

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Learn more at FreddieMac.com/LoanOfﬁcers

n National Mortgage Professional Magazine n APRIL 2017

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NAMB—The Association of Mortgage Professionals 2701 West 15th Street, Suite 536 l Plano, Texas 75075 l Phone: (972) 758-1151 l Fax: (530) 484-2906 l Web site: NAMB.org

NAMB 2016-2017 BOARD OF DIRECTORS E X E C U T I V E

Fred Kreger, CMC President American Pacific Mortgage 3000 Lava Ridge Court, Suite 200 Roseville, CA 95661 (916) 960-5824 Fred.Kreger@APMortgage.com

John G. Stevens, CRMS President-Elect RPM Mortgage Inc. 6045 West 10050 North Highland, UT 84003 (801) 427-7111 JohnGStevens@gmail.com

Valerie Saunders, CRMS Vice President RE Financial Services Inc. 25 Causeway Boulevard #101 Clearwater Beach, FL 33767 (727) 853-1000 Valerie@REFinServ.com

Olga Kucerak, CRMS Secretary Crown Lending Inc. 10 Broadway, Suite 110 San Antonio, TX 78205 (210) 828-3384 CrownLending@gmail.com

B O A R D

Andy W. Harris, CRMS Treasurer Vantage Mortgage Group Inc. 16325 SW Boones Ferry Road, Suite 100 Lake Oswego, OR 97035 (503) 496-0431, ext. 302 AHarris@VantageMortgageGroup.com

Harry H. Dinham, CMC NAMB COO Dinham Consulting 2701 West 15th Street, Suite 536 Plano, TX 75075 (972) 758-1151 Consulting@DinhamCompanies.com

Rocke Andrews, CMC, CRMS Immediate Past President Fairway Independent Mortgage Inc. 5151 East Broadway, #1700 Tucson, AZ 85711 (520) 886-7283 RAndrews@LendingArizona.net

D I R E C T O R S

Rick Bettencourt, CRMS Mortgage Network Inc. 52 Maple Street Danvers, MA 01923 (978) 304-0818 RBettencourt@MortgageNetwork.com

Chris Bettis Precision Capital 4710 Village Plaza Loop, Suite 140 Eugene, OR 97441 (541) 284-8098 Chris@PrecisionCapital.net

Linda McCoy, CRMS Mortgage Team 1 6336 Piccadilly Square Drive Mobile, AL 36609 (251) 650-0805 Linda@MortgageTeam1.com

Michele Velez, CMC Supreme Lending 1300 San Mateo, CA 94402 (650) 409-5347 Michelle.Velez@SupremeLending.com

Nathan Pierce, CRMS Advanced Funding Home Mortgage Loans 6589 South 1300 East, Suite 200 Salt Lake City, UT 84121 (801) 272-0600 NPierce@AdvFund.com

Robert Sweeney, CRMS Teachers Credit Union 600 East Carmel Drive, Suite 116 Carmel, IN 46032 (317) 625-3287 RSweeney@tcunet.com

Kimber White RE Financial Services Inc. 1620 West Oakland Park Boulevard #201 Oakland Park, FL 33311 (954) 306-3553 Kimber.LMT@gmail.com

National Association of Professional Mortgage Women 345 North Main Street, Suite 313 l West Hartford, CT 06117 l Phone: (860) 719-1991 l E-mail: NAPMW1@NAPMW.org l Web site: NAPMW.org

2016-2017 NAPMW NATIONAL BOARD OF DIRECTORS 6

APRIL 2017 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Kelly Hendricks National President (314) 398-6840 President@NAPMW.org

Cathy Kantrowitz President-Elect (845) 463-3011 PresElect@NAPMW.org

Susan Kerr Vice President (703) 871-1310 NVP1@NAPMW.org

Laurel Knight Vice President (425) 287-5351 NVP2@NAPMW.org

Glenda Mooney Secretary (314) 703-8714 NatSecretary@NAPMW.org

Judy Alderson Treasurer (918) 250-9080, ext. 300 NatTreasurer@NAPMW.org

Frances Reinhardt Parliamentarian (678) 331-1384 FReinhardt@FirstServiceTitle.net

Vincent Valvo Executive Director (860) 922-3441 NAPMW1@NAPMW.org

National Consumer Reporting Association 701 East Irving Park Road, Suite 306 l Roselle, IL 60172 l Phone: (630) 539-1525 l Fax: (630) 539-1526 l Web site: NCRAINC.org

2016-2017 BOARD OF DIRECTORS

Julie Wink President (901) 259-5105 Julie@DataFacts.com

Paul Wohkittel Vice President (410) 644-5020 PWohkittel@CISInfo.net

Gary Glucroft Director (800) 877-3908, ext. 100 GaryG@TheScreeningPros.com

William Bower Ex-Officio (800) 288-4757 WBower@Continfo.com

Scott Ledbetter Director (214) 833-3315 SLedbetter@LCGSolutions.net

Mike Thomas Treasurer (615) 386-2285, ext. 285 MThomas@CICCredit.com

Brian McKinney Director (706) 373-2200 McKinney@MCBUSA.com

Mary Campbell Director (701) 239-9977 Mary@AdvantageCreditBureau.com

Delia Zuniga Director (623) 889-8999 Delia@AdvantagePlusCredit.com

Janet Curtis Director (210) 224-6121 JCurtis@SARMA.com

Terry Clemans Executive Director (630) 539-1525 TClemans@NCRAInc.org

Maureen Devine Director (413) 736-4511 MDevine@StrategicInfo.com

Jan Gerber Office Manager/Member Services (630) 539-1525 JGerber@ NCRAInc.org

Big Things on the Horizon for ARMCP in 2017 This year will bring some great new opportunities to the Association of Residential Mortgage Compliance Professionals™ (ARMCP™), currently consisting of nearly 1,600 members. ARMCP™ will soon be launching its own Web site to fulfill the needs of residential mortgage compliance professionals. ARMCP™ is the first and only independent, national organization in the U.S. devoted exclusively to residential mortgage compliance professionals. Our independence means we are not affiliated with any profit oriented corporation or enterprise. ARMCP™ membership consists solely of those members who have joined it on their own and were not solicited to join it via solicitations from third-party lists or subscriptions. Independence is the key to the value of our advocacy! There are currently two slots remaining for the Steering Committee. The Steering Committee will be drafting new by-laws, determining a nominating process, conference planning, and many other areas of interest relating to ARMCP™’s mission. If you are interested in joining the Steering Committee, email Info@ARMCP.org.

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Now Is the Time By Tom Hutchens

APRIL 2017 n National Mortgage Professional Magazine n

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hen I talk with peers about the future of the mortgage industry, I’ve noticed one theme is consistently mentioned: Urgency. The mortgage lending industry is changing rapidly. Today’s rising rate environment halted the refinance market that so many lenders have relied on to produce origination volume. What’s worse, agency loan volume won’t replace the hole left by dwindling refinances because competition for Agrade paper will be greater than ever. If you’re a mortgage lender, you must act now or risk losing volume. Lenders who realize the urgency of the situation must read, “Now Is The Time,” a recent white paper from Angel Oak Mortgage Solutions. As “Now Is The Time” explains, the non-QM lending market is one of the only opportunities for mortgage lenders to grow their business in the face of declining refinance activity. In fact, the potential for growth in the non-QM market is huge— the current size of the annual non-QM lending market is less than $3 billion but has the potential to reach $100 billion. Quite simply, the non-QM market offers lenders the best opportunity to grow their business. “Now Is The Time” demonstrates how lenders can grow their business with non-QM products. It shows that closing a non-QM loan is just as easy as closing an agency loan. Lenders will also learn how to identify non-QM borrowers and convert prospects into happy clients. As the refinance spigot runs dry, fierce competition for topgrade paper becomes greater every single day. But lenders who have already started developing non-QM referral sources have a significant head start. Simply put, lenders and loan officers failing to take steps toward adopting non-QM loans today are losing revenue to their competition. Don’t kick the can down the road. Instead, take advantage of the new revenue stream non-QM loans offer to grow your business before someone else does. Download your copy of “Now Is The Time” today and learn how to grow your business with non-QM lending from Angel Oak Mortgage Solutions at http://SignUp.NMPMag.com/Now.

Tom Hutchens is senior vice president of sales and marketing at Angel Oak Mortgage Solutions, an Atlanta-based wholesale/correspondent lender licensed in more than 35 states and operating in the non-QM space for over three years. Tom has been in the real estate lending business for nearly 20 years. He may be reached by phone at (855) 539-4910 or e-mail Info@AngelOakMS.com.

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elite performer March “Madness” BY ANDY W. HARRIS, CRMS

t’s that time of year again when people get glued to the television, checking their phones, filling out their brackets, and posting messages about how crazy tonight’s game was. Don’t get me wrong, watching and tracking basketball and other sports is fun and with Oregon in the running this year, I was involved myself. While I don’t personally fill out brackets or even join fantasy football leagues (although I love football), I can’t help but notice how crazy people get around these brackets and selfcreated fantasy teams. Of course there is nothing wrong with any of this as long as it doesn’t interrupt or negatively impact your professional career or production. According to Gray & Christmas Inc., they estimate about 51 million officer workers join office pools during March Madness. Based on the country’s average hourly wage of $25.35, the outplacement consultancy firm estimates employers will lose $1.3 billion in pay to slacking employees per hour of distraction. Between time spent filling out brackets and watching tournament games live, the total loss of productivity could approach $4 billion. This might be far-fetched, but certainly there has to be some negative outcome to businesses for those that have employees deeply involved or distracted this time of year. Imagine if we could have this much fun in business goal-setting and competition? I believe a fun and competitive work environment either between inter-office employees or competitors can in fact be exciting. If we could invest even a fraction of this focus to setting goal-related brackets, building ‘teams,’ and closely tracking our results to win against the opposing team(s) this could certainly spark motivation in the workplace. So if you find yourself wasting any time when you should be working, fill your guilt by investing that much effort into your business and working harder to meet goals and excel past the competition. Bring the March Madness to your daily work life all year long and carry that level of focus and organization in your own bracket that you’ve created to have the best team surrounding you. Don’t be left on the sidelines by taking your focus off the prize and keep that vision alive.

Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and past president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 4960431, e-mail AHarris@VantageMortgageGroup.com or visit VantageMortgageGroup.com.

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Recruiting, Training and Mentoring Corner

What is Your Long-Term Leadership Vision? BY DAVE HERSHMAN

have previously illustrated the differences between managers and leaders, especially as they apply to the mortgage industry. Managers “manage” situations, while leaders change situations through the implementation of positive forces. In doing so, I illustrated the differences between a manager and a leader with the following examples:

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A manager has goals, while a leader also has a long-term vision of where they would like to lead their team. A manager tells people what to do. A leader leads by example. Managers micro-manage, while leaders delegate. A manager quells fires, while a leader prevents them. A manager communicates when necessary. A leader communicates proactively. A good manager implores their loan officers to followup, from the prospect stage to closing their pipeline. Leaders lead by example in this regard as well. Managers hire producers. Leaders retain those producers. Managers are great talkers. Leaders are great listeners. A leader’s integrity can never be in question. Managers are reactionary, but because leaders are proactive, they are likely to be more consistent in their direction of leadership.

A great leader carries a positive message all the time, while the manager is not as consistent in this regard.

Today, we would like to focus upon the first and most important point—a leader has a vision. It is from this vision in which a company’s or branches goals are formulated. More importantly, this vision must be communicated from the start of the hiring process and throughout the organization on a consistent basis. For example, so many managers tell me that it is so hard to recruit. My reply often is—what is the vision that you are communicating to your prospect? And does this vision correspond to their vision. If there is no vision communicated, then you will be recruiting based upon facts such as the commission plan, programs and pricing. And it is tough to compete that way. When speaking to prospects in the past, I have often ask questions such as: If you made 10 basis points more per loan, how would that help you achieve your longterm vision of the future? Many of them were stunned by the question. Not only because they had never heard it before, but because they did not have a vision. And when they did not have this vision, I started probing and helping them formulate the vision. Frankly, without their vision, how would I know I wanted to hire them? Of course, if you don’t have a

vision as a manager, how would the prospect know that this was the right place for them? Not only with regard to alignment of visions, but also to determine how they can help the organization achieve their vision. Thus, I come back to the central question for today … As a leader, what is your vision for the future? Your vision should include the culture you want to create, the goals you want to achieve, and where you want the organization to be in the future–say five years down the road. You would be surprised at how many in the industry are looking as far as their next paycheck, and no further. When I say organization, this could mean a large company, a region, a branch or even a team. I understand how stressful this business is—especially if you are producing and managing. But meandering every day to survive certainly does not reduce that stress. The vision should include what is expected of your team members and how you would like them to progress in the future. For example, what if a loan officer wants to become a manager five years down the

road? How can you help make that happen? So many loan officers are made managers because they are top producers and a position came available. But wouldn’t it make sense to help them gain the skills as they grow. For example, perhaps they could help you conduct sales meetings, interviews or help you mentor someone coming in the industry. This is a prime example of your long-term vision aligning with their vision. If your vision is to grow a branch into a region, you need each member of the team helping you along the way. What I am describing is exactly why the vision is not just communicated up front. It must be communicated on a regular basis. What would you like your team to look like? If you can help each team member reach their goals, how will that help you reach your goals. This is a very simple concept. But then again, it is not easy. When you are trying to get loans closed and are fighting fires, keeping sight of the forest from the trees is very hard–especially if they are burning! Sometimes we just need to slow it down, open our eyes wider and take in the path which will get us to the clearing.

Dave Hershman is a top author in this industry with seven books published, as well as the founder of the OriginationPro Marketing System and the OriginationPro’s online comprehensive mortgage school. Dave is also director of Branch Support for McLean Mortgage. He may be reached by e-mail at Dave@HershmanGroup.com or visit OriginationPro.com.

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newtomarket UWM Launches New ‘BLINK’ Mortgage Portal

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United Wholesale Mortgage (UWM) has announced the release of BLINK, a new alldigital loan portal that modernizes the way mortgage brokers work with consumers and strengthens their ability to compete against mega retail lenders in the market. BLINK–which stands for “Borrower Link”–is a consumerfacing Web application that enables borrowers to combine the simplicity and flexibility of mobile technology with applying for a home loan. “Technology and consumerdriven tools are building momentum within the mortgage industry,” said Mat Ishbia, president and CEO of UWM. “With BLINK, new homebuyers or existing homeowners will be able to initiate the loan process from any mobile device, in the comfort of their home, on their own time. We’re proud to make this great tool available to brokers throughout America, as we believe that brokers are best place for all borrowers to get a loan. It is a focus of ours to give brokers access to the best technology tools to compete with the mega retail lenders.” BLINK is a multi-functional portal that allows consumers and brokers to take an applications no matter where they are. Borrowers are given the capability to start the loan application process, pull their credit, e-sign documents, verify assets, and track the status of their loans–from anywhere. This video demonstrates how easy BLINK makes the mortgage process from beginning to end,

completely online. The technology caters to each consumers individual preferences. Borrowers can complete the mortgage process entirely on their own if they choose, or seek assistance from their mortgage broker at any time. Allowing the capability to co-browse screens with their clients in real-time to guide them through the process. Additionally, if a borrower wants to meet in person, they can still meet in person and complete the application online together. “UWM made it very easy for me to realize the value this tool can bring to my business,” said Jason Davis of Oceans Mortgage. “Offering a smart mortgage application shows UWM’s dedication to advancing technology within the mortgage industry.” Credit Plus Integrates With Ellie Mae’s Encompass Consumer Connect and Adds Public Record Gap Report to FraudPlus

Credit Plus has announced its credit reports are available through Ellie Mae’s point-of-sale solution, Encompass Consumer Connect, an extension of their Encompass all-in-one mortgage management solution. The integration allows Encompass Consumer Connect users to verify and share their credit reports with lenders. Encompass Consumer Connect enables lenders to provide a state-of-the-art, completely branded and unique self-service online loan origination experience to homebuyers.

“We’re excited to be at the forefront of this initiative and one of the first Ellie Mae partners included in this consumerfriendly interface,” said Greg Holmes, national director of sales and marketing at Credit Plus. “Encompass Consumer Connect will make the mortgage process easier to navigate for borrowers.” Credit Plus has also announced that it has added a Public Record Gap Report to its FraudPlus product line. The company is the first in the industry to offer this necessary information and began testing the report on April 1. As part of the National Consumer Assistance Plan that becomes effective July 1, 2017, Equifax, TransUnion and Experian are expected to reduce the amount of tax lien and civil judgment information they report on consumer credit files. They will only report tax lien and civil debt information on consumers when four areas of personally identifiable information (pii) is present including name, Social Security Number, birthdate and address. A preliminary analysis conducted by Experian shows approximately 96 percent of civil judgment public record data will no longer be included on credit reports; and almost 50 percent of tax lien information will not meet the pii criteria. FICO has found that roughly 12 million Americans’ credit scores will increase based upon this change. “Lenders can rest assured that they can still obtain this critical information from Credit Plus and fill in the gap created from

information that will soon be missing from credit reports,” said Holmes, national director of Sales and Marketing at Credit Plus. “At Credit Plus, we are all about helping mortgage professionals make more informed lending decisions and this new tool is another way to accomplish that.” CoesterVMS.com Releases Direct UCDP Integration

CoesterVMS.com (CVMS) has released a direct integration with the UCDP. CVMS worked hand in hand with the GSEs to ensure the integration meets their technical requirements. The connection allows CVMS to send calls directly to the UCDP, as opposed to a thirdparty provider, offering faster summary submission report (SSR) delivery and more robust functionality for CVMS clients and appraiser partners. “This is a great step towards our goal of transitioning CoesterVMS.com from solely an appraisal management company to a comprehensive technology provider,” said Jacob Guertin, VP of Business Development at CVMS. “The direct integration enables us to offer features and increase efficiency in ways others simply can’t.” In addition to the summary submission report workflows, CVMS interfaces also include access to UCDP Appraisal Sharing tools. These functions allow correspondents to share, or “designate,” appraisals with their aggregators, streamlining a previously manual process. The Appraisal Sharing suite offers users the ability to manage their organization’s aggregators and share appraisals individually or in batches.

“Ultimately, the industry is progressing and becoming increasingly focused on technology,” said Brian Coester, CEO of CVMS. “We want to be the one leading the way for our clients and this is the first of many steps in achieving that objective.” Ridgewood Savings Bank Announces New Flexible Homebuying Option

Guild Mortgage has launched MyMortgage, a digital mortgage portal aimed at combining a paperless loan application with a personalized mortgage experience. MyMortgage allows customers to upload documents and manage their checklists from any mobile device, simplifying the process from application to close. Guild’s experts worked with Roostify, a secure, cloud-based technology platform, to create a more intuitive and streamlined

borrowers to submit income and asset information electronically and eliminating the need to fax, e-mail or deliver hard copies. The platform gives Guild borrowers an easy-to-follow online application with checklists tailored to each borrower. It enables retrieval of needed income and asset documentation directly from the source, while also allowing for the exchange and execution of transaction documents. MyMortgage facilitates communication, continued on page 18

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Guild Mortgage Launches MyMortgage

Ann McGarry, Guild’s president and CEO. “A mortgage is such a personal transaction. Beyond the use of technology to make the loan process more efficient, we will continue to assist our borrowers with real people– experts dedicated to helping borrowers through what is often the biggest transaction of their lives.” Designed with customer convenience in mind, the MyMortgage digital mortgage introduces an easier, more efficient process for completing a loan application, allowing

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Ridgewood Savings Bank has announced a new flexible homebuying option for both firsttime and repeat homebuyers. Ideal for those who cannot afford a large downpayment, this product offers no application fee and features up to 97 percent financing for single-family homes, condos and co-op properties, and up to 95 percent financing for multi-family homes. In addition to these features, non-traditional financing can be applied to the downpayment and to closing costs. “This unique program adds flexibility for young homebuyers where disposable income and limited earning levels may not meet traditional requirements making buying a home more achievable,” said Anthony Simeone, EVP and chief lending officer for Ridgewood Savings Bank. Leonard Stekol, Ridgewood Savings Bank’s president and COO, said, “This new affordable lending program is a great option for many of the communities we serve. It inspires homebuyers to be a part of the community they love and to enjoy the value of homeownership.”

mortgage process for lenders, agents and homebuyers. MyMortgage is fully integrated with the company’s proprietary systems, allowing for faster and more accurate analysis and recommendation of the right loan for the borrower. This advanced technology enhances Guild’s culture of customer service excellence that has distinguished the company for more than 50 years. “MyMortgage is a state-ofthe-art digital mortgage experience for the consumers of 2020 and beyond,” said Mary

NEWSFLASH y APRIL 2017 y NMP NEWSFLASH y APRIL 2017 y NMP NEWSFLASH y APRIL 2017 y NM

Senators Offer Different Strategies on Changing Dodd-Frank

be willing to proceed using reconciliation.” Both senators made their remarks during a conference in Washington sponsored by the U.S. Chamber of Commerce. PRMI Receives Invitation From Costa Rican School

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14 A pair of prominent Republican senators are offering different approaches to changing the Dodd-Frank Act. According to a Reuters report, Sen. Mike Crapo (R-ID), chairman of the Senate Banking Committee, announced that he is seeking new bank reform legislation that can be forged with bipartisan support. Rather than jettison Dodd-Frank, Sen. Crapo advocated a different approach that would advance economic growth and capital formation. As for getting the bill signed into law, the senator said that his timeline was “either late this year or early next year. I’m not looking further than that.” However, Sen. Pat Toomey (R-PA) stated that he saw little chance of bipartisan cooperation on any financial reform legislation. According to a Bloomberg report, Sen. Toomey advocated revising the Dodd-Frank Act through a budgetary process called reconciliation, which can result in passage without relying on Democratic support. “I don’t see much prospect” said Sen. Toomey about bridging partisan differences with Democrats. “We need to

Primary Residential Mortgage Inc. (PRMI) was invited to a Costa Rican elementary school during its 12th annual top producers event, where 35 team members participated in a day of giving back. Teachers and students at the Mercedes Elementary School in Ortega received essential items needed for its daily activities and classrooms. PRMI provided electric fans, new computer desks, new tables and chairs, and delivered a large amount of everyday school supplies. The exterior of the school was also given a facelift by the volunteers, as they painted the exterior and repaired a roof that had been previously damaged. “We are committed to helping children around the world,” said David Zitting, CEO of PRMI. “We believe that every child deserves a chance to learn and a chance at a better future.”

Over the years, PRMI team members across the nation have donated time, money and personal items to numerous charities and schools across America, the Caribbean and Central America. MBA Chairman Challenges Industry on “Transformational Technology”

Mortgage Bankers Association Chairman Rodrigo Lopez challenged his peers to harness technology in a manner that will help enhance the customer experience while solidifying the homeownership environment. In a speech delivered before the trade group’s annual technology conference in Chicago, Lopez stressed that mortgage bankers need to view technology in a proactive manner. “We need to be poised and ready to take the necessary steps in strategic innovation, or transformational technology,” he said. “If we do not adapt to these new technologies and related consumer expectations, we will fail. We will fail consumers; fail our business partners; fail our employees; fail our stakeholders; and, fail our industry.”

Lopez, who is also chairman of Omaha-based Nortmarq Capital, added high-tech answers helped strengthen the industry against the burdens of federal regulations in the postrecession years. “These technologies not only make companies more efficient, but they also make them smarter,” he continued. “In the last decade, residential lenders have been burdened with thousands of pages of new regulations. As a result, many lending operations have been searching for tools to make operations as efficient as possible, at the lowest cost possible … The old way of doing business was not nearly capable of handling the influx of change that come with the short deadlines imposed by the [DoddFrank] legislation. Technology played a very crucial role in helping lenders implement and stay in compliance with these regulations.” But, on the other hand, Lopez expressed concern that an active push to deregulate the financial services world might not be the panacea that many Dodd-Frank critics imagine. “As an industry, we spent hundreds of millions of dollars incorporating new applications and systems to comply with the Dodd-Frank legislation,” he said. “To start unraveling those regulations could mean having to spend extraordinary resources of time and money on whatever the next regulatory regime is, not to mention the confusion and complications for consumers … We want the effective flow of

capital while maintaining the right regulatory balance. All the technology you developed is providing critical services to the lending industry and consumers. Your hard work should not go by the wayside.” Lopez also pointed to the techsavvy Millennials and their increased presence in the homebuying market as proof that mortgage bankers need to stay ahead of the high-tech curve. With technology catering to a consumers’ individual preferences, companies such as United Wholesale Mortgage (UWM) recently launched BLINK, a new all-digital loan portal that modernizes the way mortgage brokers work with consumers and strengthens their ability to compete against mega retail lenders in the market. “As this new generation enters the marketplace, we realize that each consumer has different needs in the home-buying process, depending on their experience and their background,” he stated. “This calls for differentiated, customized approaches to the overall lending process.”

continue to face a number of challenges, including rising material prices, higher mortgage rates, and shortages of lots and labor.” Foreclosure Activity Hits 11-Year Low

February’s foreclosure activity

was the lowest recorded since November 2005, according to ATTOM Data Solutions. Last month also marked the 17th consecutive month when foreclosure activity declined on a year-over-year basis. However, foreclosure starts in February increased seven percent from January to February. And foreclosure starts increased on a year-over-year basis in 15 states and the District of Columbia, with the greatest increased in Alabama (up 40 percent), Texas (up 26 percent) and New Jersey (up 24 percent).

But foreclosure starts were also down 13 percent from a year ago—the 20th consecutive month with a year-over-year decrease in foreclosure starts. Furthermore, bank repossessions (REO) in February decreased seven percent from the previous month and were down 18 percent from a year ago. Yet 15 states and the District of Columbia posted a year-over-year increase in REOs, most notably Massachusetts (up 117 percent) and Delaware (up 90 percent). continued on page 16

Home Builder Confidence Hits 12-Year Peak 15

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Builder confidence in the market for newly-built single-family homes reached its highest reading since June 2005, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) report. The latest HMI data saw a sixpoint jump to a 71 level. All three HMI components posted robust gains this month: the component gauging current sales conditions rose seven points to 78, the index charting sales expectations in the next six months saw a five-point rise to 78 and the component measuring buyer traffic jumped eight points to 54. On a regional level, the Midwest HMI increased three points to 68 and the South HMI inched up by one point to 68. However, the West HMI dropped three points to 76 and the Northeast HMI dipped by one point to 48. “While builders are clearly confident, we expect some moderation in the index moving forward,” said NAHB Chief Economist Robert Dietz. “Builders

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Be a Trend Setter

ates are increasing, which means there is a shift occurring from a refinance market to a purchase market: Every time rates go up, the industry moves to a purchase market. Fact: They are rising again, and it might be a while before the housing market increases enough for another refinance boom. The difficulty is that there is really no way to tell when someone is “interested” in purchasing anything. It’s a thought and it cannot be read … yet. So, the real question is: How do you find people who are genuinely interested in purchasing a home? The simple answer is … online marketing. Search engines use closely guarded algorithms to determine the results that are displayed. With millions of people performing millions of searches each day to find content on the Internet, it makes sense that marketers want their products to be found by potential consumers. What this does for you as a mortgage professional is it helps find people who are genuinely interested in purchasing a home. The solution to this key problem is generating your own exclusive leads. This process produces a lead that’s interested in purchasing a home, and is qualified to buy a house. One of the best parts about this new style of marketing is the versatility that it offers. Depending on how you best close new business, you get a quality lead that closes at higher rate … producing closed loans in your area at profitable acquisition costs.

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TagQuest customer spotlight Each month, we talk with our clients to see how their campaigns are performing. Here’s what we heard from Alfred Valentine, a manager, and Jim Cefaratt, a senior loan officer, with Acre Mortgage. USDA Purchase Leads l First month’s results: 60 leads, 13 applications, with six closed and eight more qualified loans in process. l Response rate: A 23 percent projected closing ratio. Highlights of the campaign “TagQuest has the knowledge and tools to help you grow your business,” said Valentine. “The CRM is the best I’ve ever seen, limiting wasted time and lost leads. TagQuest is not looking out for their own best interest, they focus on our growth and bottom line as well. Others would benefit from their attention to detail and concern for providing the best possible marketing strategies.” “The beauty of this program/campaign is that everything comes directly to you via e-mail,” said Cefaratt. “As soon as a client clicks on to our site and fills out the very brief questionnaire of interest, it gets sent directly to your e-mail so you can access their information wherever you are.”

TagQuest Inc. is a full-service marketing firm specializing in marketing for the mortgage industry. Call (888) 717-8980 or visit www.tagquest.com.

IMAGINE • INNOVATE • SUCCEED SPONSORED EDITORIAL

S&P CoreLogic Case-Shiller National Index at 31-Month Peak

Home prices continue to soar, as the main index within the S&P CoreLogic Case-Shiller Indices has reached a new apex. The S&P CoreLogic CaseShiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.9 percent annual gain in January, up from 5.7 percent in December; January’s marks a 31-month high for this index. The 10-City Composite posted a 5.1 percent annual increase, up from 4.8 percent the previous month, while the 20-City Composite reported a year-over-year gain of 5.7 percent for January, up from 5.5 percent in December. Before factoring in a seasonal adjustment, the National Index posted a month-over-month gain of 0.2 percent in January, while the 10-City Composite posted a 0.3 percent increase and the 20City Composite reported a 0.2 percent uptick. After the seasonal adjustment, the National Index recorded a 0.6 percent monthover-month increase, while both the 10-City and 20-City Composites each reported a 0.9 percent month-over-month increase. Thirteen of the 20 cities tracked in the indices reported increases in January before seasonal adjustment; after seasonal adjustment, 19 cities saw prices rise. “Housing and home prices continue on a generally positive upward trend,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “The recent action by the Federal Reserve raising the target for the Fed funds rate by a quarter percentage point is expected to add less than a quarter percentage point to mortgage rates in the near future. Given the market’s current strength and the economy, the small increase in interest rates isn’t expected to dampen home buying. If we see three or four additional increases this year, rising mortgage rates could become concern.” However, Blitzer

acknowledged that what goes up will eventually have to come down. “While prices vary month-tomonth and across the country, the national price trend has been positive since the first quarter of 2012. In February, the inventory of homes in the market represented 3.7 months of sales, lower than the long-term average of six months,” he continued. “Tight supplies and rising prices may be deterring some people from trading up to a larger house, further aggravating supplies because fewer people are selling their homes. The prices also hurt affordability as higher prices and mortgage rates shrink the number of households that can afford to buy at current price levels. At some point, this process will force prices to level off and decline. However we don’t appear to be there yet.” Is the Housing Market Living Up to Its Potential?

Potential existing-home sales decreased to a 5.7 million seasonally adjusted, annualized rate (SAAR) in February while the market potential for existinghome sales fell by 0.5 percent compared January, a 28,000 (SAAR) sales decline, according to data released by First American Financial Corp. First American noted that the potential existing-home sales level is now 658,000 (SAAR) or 11.5 percent below the prerecession peak of market potential from July 2005. The company also stated that the market for existing-home sales is underperforming its potential by 2.5 percent or an estimated 142,000 (SAAR) of sales; last month’s revised underperformance gap was 4.5 percent or 260,000 (SAAR) sales. “Steady income and job growth combined with increased building permit activity has increased the market potential for home sales on an annual basis,” said Mark Fleming, chief economist at First American. “Demand from Millennials and continued on page 22

•

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Three Elements Required for Organic Recruiting Success By Steve Rennie

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n Q4 of 2016, we at Model Match expanded our offering to include individual and group coaching for users on our platform. Many elements are required for individuals and organizations to have short and long-term success with their production recruiting efforts, but three have created the largest impact. These include individual accountability, leadership involvement and, possibly most important, the competency to communicate effectively about an offering and build relationships on the front end through differentiation. Accountability starts with self-discipline and initiative. We have found that, like anything that requires someone to do hard work, external influence does not always create individual initiative. Accountability should also involve the awareness of goals and the ability to measure activity and efforts over time to achieve that goal. The second element focuses on leadership being involved in the process. Leaders should always be involved in supporting activity and oversight and not simply waiting to meet with recruits that are in process. There is a noticeable difference in overall recruiting success when leaders at the top of the organizational chart are involved in goal-setting, lead sourcing, activity support and consistent pipeline management. Lastly, we have learned that many managers, although extremely proficient with relationship development for referral partners and clients, have two left feet when it comes to the same skill in recruiting production. This recruiting “muscle” is already built, but sometimes needs some fine-tuning to transition to the communication necessary to build trust with recruits versus referral partners and clients. The good news is ALL three of these elements have become easy to address through dedicated training with the outcome of unifying efforts to creating better efficiencies and success. Our experiences have shown us that with clear goalsetting and planning a positive impact can be realized with as little as 30 minutes of effort a few times per week. However, recruiting (relationship development) is certainly an activity that will breed greater success as more time and effort is spent. Hold yourself accountable to what you have control over and push to grow from there. If you are leading local managers, make sure to play your part beyond meeting with recruits and look for opportunities to support lead sourcing and intel opportunities, as well as consistent pipeline reviews. And finally, look for avenues to hone your communication and relationship building skills through coaching to increase your effectiveness on the front end and throughout the process of recruiting. With more than 20 years of working in the trenches and hindsight into the science and art of relationship development for organic growth of production, our process, along with our coaching allows all involved to recruit like a pro.

Steve Rennie is chief sales officer with Model Match Inc., a technology platform and business plan used internally by sales leaders and executives at banks and mortgage companies to grow and retain production organically. He may be reached by e-mail at Steve.Rennie@ModelMatch.com.

SPONSORED EDITORIAL

new to market

continued from page 13

collaboration and more visibility through mobile devices, with real-time status updates. “MyMortgage takes the complexity and stress out of getting a loan by providing a better experience for every borrower,” said Rajesh Bhat, CEO of Roostify. “It goes beyond automation to combine Roostify’s industry-leading technology with the Guild culture of superior customer service to deliver an unequaled personal touch, something not always available with most digital mortgages.” Docu Prep Launches New Site

Docu Prep has announced the launch of its new Web site, the first in a series of technologyrelated products and services to be rolled out to customers in the coming weeks. “The Web site is a key component and the first step that we needed to be operational as we begin releasing system and service enhancements to our clients,” said Ed Wallace, national sales executive for Docu Prep. The new Web site is a responsive site, so mobile users will be able to better access information and functionality when and where they need to. Besides its new design and mobile capability, the new website features document generation samples. “We felt that prospective clients needed to have the ability to test drive pieces of our document technologies, so we included a way for them to enter a few pieces of data and see the results,” said Kortney Harward, Docu Prep’s director of sales and business development. “This way they can see the look and feel of documents as well as system performance.” Black Knight Financial Services Launches LoanSphere Empower Upgrade

Black Knight Financial Services (BKFS) has announced that it is offering LoanSphere Empower Now!, a version of Empower, the company’s comprehensive loan origination system (LOS) that will

enable regional and mid-market lenders, as well as independent mortgage bankers, to reap the benefits of the powerful Empower LOS with a greatly streamlined implementation process, resulting in reduced timelines and cost. Empower Now! enables lenders to implement Empower functionality, which has been configured based on the industry’s most common lending practices. Lenders can then add configurations and additional feature functionality, which will allow them to remain on the same system as their business grows, and to adjust system parameters to meet their specific compliance needs. Additionally, Empower Now! is seamlessly integrated with Black Knight’s LoanSphere MSP servicing platform, which is leveraged directly by approximately 70 servicers that represent hundreds of other lenders and financial institutions throughout the country. Typical implementations for Empower Now!, which include testing and training, can be completed in less than half the time of a standard Empower implementation and at a lower cost. “Historically, regional and midmarket lenders have selected an LOS to meet their immediate needs, knowing that they may eventually need a different solution to accommodate future growth. Then, as they expanded, these lenders had to migrate to a new system to meet the more robust requirements of their growing business and scalability needs,” said Jerry Halbrook, president of Black Knight’s Origination Technologies Division. “With Empower Now!, lenders that are on a growth track can add new features and business channels without having to implement a new system. As a result, regional and mid-market lenders can access the same world-class origination technology capabilities as larger lenders, with an affordable financial investment and a considerably shorter implementation timeline.” Churchill Mortgage Launches Debt-Free Homeownership “Smarter Mortgage” Tool

Churchill Mortgage has introduced its Smarter Mortgage, continued on page 24

READY TO KICKST TA ART YOUR CAREER? GET UP TO $10,000 TO ST TA ART YOUR OWN MORTGAGE BUSINESS. KickStart Independent Mortgage Program provides up to $10,000 of start up funding for mortgage professionals who want to open their own broker shop. All you need to apply is a minimum of 3 years experience, a business plan, two letters of reference and the desire to be the best choice for your borrowers. Apply today at nambkickstart.com

NationalMortgageProfessional.com

K KickStart gave me the opportunity to leave a megabank and be my own boss. As a broker, I now have more control over the experience that I am able to provide to my clients. Applying for the grant was easy and it helped me to get my business up and running within just a few short months. hs.

A NAMB Program Founding Sponsor UWM

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Dan Tr Tran Trranscend Mortgage Inc. T

N A M B

P E R S P E C T I V E

NAMB President’s Message: April 2017 I am writing this article in two parts. This allows me and you to experience NAMB East 2017 and pre and post. I am writing this first part at 30,000 feet as a I fly to Atlanta. The flight in As I anticipate our NAMB East conference in Atlanta, I am struck with so many emotions … excitement, nervousness, elation and pride. Each one of those emotions were built up over the last couple of months as the Convention Committee made preparations, signed contracts (ok, I signed them) and promoted the heck out of this event. This is our second annual NAMB East Conference and there is so much anticipation within all of us in looking forward seeing old friends and makes some new ones. This lineup of speakers and events is bar none, an incredible event not be missed by anyone in the origination business today. I know that sounds cliché, but I have seen our presenters and know what they are capable of in this setting. Just coming off of our NAMB on the Road event in Walnut Creek, Calif., I can tell you that we have dialed in some great speakers and events coming to everyone this year.

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The flight home The fight home from Atlanta is filled with such pride of how your NAMB board and volunteers pulled off a successful conference once again. It did not disappoint and I am so happy for the members and vendors who attended this year’s NAMB East event in Atlanta. Our Industry Council was able to dialog with our board and other industry stakeholders on a number of issues such as keeping the mortgage loan originator compliant; how to hire and train new loan originators; appraisal concerns; etc. A representative from the Consumer Financial Protection Bureau’s (CFPB) Ombudsman Office met with us to review how the Bureau can be more effective in communicating and regulating our industry. Even though we cannot disclose the exact questions that were asked, I can share that we went over items such as the exam process, regulatory compliance, consumer complaints and engaging with the CFPB. We did celebrate and blow off some steam with our St Patrick’s Day celebration with some of us wearing a Celtic Kilt … including yours truly. It was so great to have industry professionals network together and enjoy an evening together. I want to thank all of our vendors, speakers and volunteers for putting on such a successful show. Thank you and Namaste’ Fred Kreger, CMC, 2016-2017 President NAMB—The Association of Mortgage Professionals Fred.Kreger@APMortgage.com • JOINNAMB.com

NAMB Education Corner: NAMB East …WOW! By Bob Sweeney, CRMS

There is an old saying “You can’t teach an old dog new tricks.” As some of you know, I have been in the mortgage industry for almost 30 years, and I can tell you that NAMB East was one of the most informative, exciting and best learning experiences that I have had in a long time. It started with the Industry Advisory Council Meeting on Thursday morning, March 16 when the NAMB Board and the Industry Council got together for industry updates and roundtable discussions. We had some new Industry Council members attend along with most of usual attendees. The interaction between the Industry Council and the NAMB Board was amazing. We spent more than five hours discussing the mortgage industry, from A to Z. The roundtable discussions were especially beneficial to me personally. I learned so much about the advancement of technologies in the areas of marketing, advertising, social media and education. We discussed, at length, the challenges with appraisal delays and complaints. We discussed how the Industry Partners were keeping the originator compliant at the federal and state levels, and the training methods for new originators and non-credit education for established originators. We discussed marketing strategies the Industry Partners were using to help attract the next generation of homeowners. I think you are getting the picture. It was a very comprehensive and exciting meeting and I was fortunate to have this opportunity as a member of the NAMB Board to be part of the discussions. Besides the excitement generated on Friday, March 17 for St. Patrick’s Day, the Trade Show and Breakout Sessions on Friday and Saturday were awesome. I had the privilege of introducing speakers on Friday and Saturday and attended most of the Breakout Sessions. The content and professionalism of the speakers for these sessions just keeps getting better and better. The CFPB sessions and our keynote speaker, CNN’s own John King, was outstanding. I also had the opportunity of visiting every one of our Trade Show partner’s booths on Friday and Saturday. Besides thanking them for supporting NAMB, I spent a great deal of time learning about their products and services. It was time well spent and such a valuable experience for me. Industry Partners … please plan on attending the Industry Council Meeting in October at NAMB National. It is a “must attend” event. NAMB needs and wants your voice to be heard. The results of these meetings help NAMB with goals and direction as we move forward from year to year. If you are going to attend NAMB National anyway, just come one day earlier and attend the Industry Council Meeting. I promise you … you will be as inspired as I was at NAMB East. NAMB members, please join us in October at NAMB National. We will be changing venues this year to the Rio All-Suites Hotel & Casino in Las Vegas. If there is one trade show I would choose to go to each year, it would be NAMB National. You just would not believe the great learning opportunity that awaits you at NAMB National. We welcome any input from all mortgage professionals. If you would be interested in joining the Education Committee and become part of our future success in the education of our independent mortgage companies and mortgage loan originators, please feel free to contact me. If you are not an NAMB member, now is a great time to become a member. Go to your state association Web site or visit NAMB.org and join as a Professional Member. Bob Sweeney, CRMS is the mortgage sales manager for Teachers Credit Union, director for NAMB–The Association of Mortgage Professionals and serves as NAMB Education Committee chairman. He can be reached by phone at (317) 625-3287 or e-mail at RSweeney@tcunet.com.

N A M B

P E R S P E C T I V E

NAMB Chalks Up Another Success With NAMB East 2017 Mortgage professionals converge on Atlanta for annual gathering By Linda McCoy, CRMS

NAMB East 2017 is now over. It was the second conference that NAMB has sponsored in the East coming off last year’s event in Hilton Head, S.C. We had a fantastic time our first evening in Atlanta at the College Football Hall of Fame. The food was great, and so was the networking along with great Fun at Casino Night, while raising money for NAMB Legislative Action Fund (LAF). NAMB has many things they are doing for the benefit of their members. Our Legislative & Regulatory Conference is coming soon in Washington, D.C., Saturday-Tuesday, April 22-25. We fight for what is going to move our association to the next level and protect our members. We will meet in D.C. to talk to our congressman. Back to NAMB East … we had a great Keynote Speaker, John King, CNN’s chief national correspondent, who gave us a lot to think about. He talked about our government from the inside and out. This

was a perfect speaker to address the NAMB East attendees as we prepare to attend Lobby Day and carry our issues to our congressman. The Exhibit Hall was full of great lenders and supporting vendors. I had lenders tell me that they had picked up many new clients and were excited about the opportunity of new business. I always want to see more originators attending our national events. We had members from states who had lost their local associations who want to start new associations affiliated with NAMB. I feel that helping our states get back into NAMB is where our focus should be. Linda McCoy, CRMS of Mortgage Team 1 Inc. in Mobile, Ala. is a member of the NAMB board of directors. She may be reached by phone at (251) 650-0805 or e-mail Linda@MortgageTeam1.com.

Scenes From NAMB East 2017 March 16-18 at the Omni Atlanta Hotel at CNN Center

The wall of helmets at the College Football Hall of Fame in Atlanta

A packed house listens in to Keynote Speaker John King from CNN

Members of NAMB’s Industry Council meet in Atlanta to discuss local and national issues impacting the mortgage industry

NAMB President Fred Kreger, John G. Stevens and UAMP President Trenton Hendry with Keynote Speaker John King, NAMB Kimber White celebrate of St. Patrick’s Day Director Nathan Pierce and President-Elect John G. Stevens

NAMB East Keynote Speaker John King of CNN and NAMB Director Michelle Velez

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NAMB VP Valerie Saunders, Directors Chris Bettis and Kimber White, with Past President Rocke Andrews

Attendees take part in NAMB’s Casino Night to Benefit the Legislative Action Fund

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NAMB Immediate Past President Rocke Andrews gets into the St. Patrick’s Day spirit during NAMB East

By Mat Ishbia

nmp news flash

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first-time homebuyers remains robust despite the strong spring sellers’ market and rising rates, resulting in a shrinking underperformance gap, as the market aligns with its potential.” One-Third of Home Sales Were All-Cash Transactions

VA IRRRLs

here is a lot of chatter in the industry and a lot of people are asking if lenders are doing right by military veterans. The Mortgage Bankers Association (MBA) is pushing Ginnie Mae and saying that lenders shouldn’t refinance veterans or put them in IRRRLs so fast. The organization is saying that veterans should be forced to stay in their mortgages for a minimum of six months. That’s the wrong way to think about it. It seems like the MBA is protecting the mega retail lenders. Putting in a quasi-pre-payment penalty to make it more difficult to refinance is the wrong move. Don’t focus on trying to stop veterans from refinancing. If veterans were given great rates and fees the first time around, there wouldn’t be a need to refinance so quickly. Freddie Mac’s Appraisal Waiver Freddie Mac is coming out with its own version of Fannie Mae’s Property Inspection Waiver (PIW), and it will be released industrywide in the next three to six months. Everyone will have access to getting no appraisal on a conventional loan through LP very soon. It will be for refinances and purchases, on single-family residences and loans that are 80 percent LTV and below. On purchases, brokers can now save the borrower money and speed up the timeline. It will make realtors happy and be a great thing.

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22 Brokers: The Fastest-Growing Mortgage Channel From 2015 to 2016, the wholesale market grew by 22 percent—which is a faster growth rate than both retail and correspondent channels. Why is this happening? First of all, more loan originators are joining broker shops. Secondly, a survey conducted by Freddie Mac highlights what realtors value and brokers dominate in five key categories: Local presence in the marketplace, ease of doing business, mortgage closing speed, fees and costs, and multiple product options. Brokers will continue to grow moving forward.

Cash sales accounted for 33.1 percent of total home sales in December, down 1.3 percent year-over-year, according to new data from CoreLogic. For the fullyear 2016, the cash sales share was 32.1 percent, 2.2 percent below the full-year 2015 share. CoreLogic estimated that cash sales will reach 25 percent of all transactions by mid-2019. Real-estate owned (REO) sales had the largest cash sales share in December, at 61.1 percent, followed by short sales at 34.2 percent, resales at 33 percent and newly constructed homes at 16.7 percent. New York and New Jersey had the largest cash sales share among the states in December, 47.9 percent and 47.6 percent, respectively. CoreLogic also reported the distressed sales share of 7.8 percent in December was the lowest distressed sales share for any month since October 2007. The distressed sales share for the full-year 2016 was 8.9 percent, down 2.1 percent from the fullyear 2015 and the lowest annual distressed sales share since the six percent level recorded in 2007. Q4 2016 Home Equity for Seniors Up by $170.7 Billion

Mat Ishbia is president/CEO of United Wholesale Mortgage (UWM), the nation’s number one wholesale lender. A leading advocate of mortgage brokers, Mat has changed the lending platform, turning UWM into a $23 billion company and a top national workplace.

SPONSORED EDITORIAL

Retirement-aged homeowners saw a combined 2.8 percent increase of $170.7 billion in home equity during the fourth quarter of 2016, which increased their total housing wealth to $6.2 trillion, according to new data from the National Reverse Mortgage Lenders Association (NRMLA).

During the fourth quarter, a 2.4 percent increase in home values for owners 62 and older helped to boost the NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI) to 221.75, hitting a record high for the 17-year-old index. On a year-over-year basis, the RMMI index increased by nine percent in 2016, compared to an increase of 8.6 percent in 2015 and eight percent in 2014. “The strong RMMI in the fourth quarter of last year shows that home equity continues to be a valuable asset for homeowners 62 and older,” said NRMLA President and CEO Peter Bell. “It’s time for consumers to study what it means to have home equity and to learn about its strategic uses, including how it can be used to support retirement goals.” Mortgage Loan Defects on the Rise

The frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications increased 4.1 percent from January to February, according to the latest Loan Application Defect Index data from First American Financial Corporation. On a year-over-year measurement, the Defect Index increased by 1.3 percent from February 2016. The Defect Index for refinance transactions increased 3.4 percent month-over-month from January to February, although it is 6.2 percent lower than a year ago. The Defect Index for purchase transactions increased 2.4 percent from January to February and is 2.4 percent higher on a year-over-year basis. “This month, the Loan Application Defect Index surged higher as rising mortgage rates continue to put downward pressure on lower risk mortgage refinance activity,” said Mark Fleming, chief economist at First American, who warned that the situation can potential grow more problematic. “The increasing continued on page 26

NAMB+ is an independent, wholly-owned, for-profit marketing subsidiary of NAMB, The Association of Mortgage Professionals. Dear Mortgage Professional, We had a fantastic NAMB East conference and trade show in Atlanta last month! I spoke with so many loan originators who have had great experiences working with our NAMB+ Endorsed Providers. If you have not explored everything that is being offered at NAMBPlus.com, you are not maximizing the value of your NAMB Membership. I tell people all the time that the money I save working with just one NAMB+ Endorsed Provider pays my NAMB Membership dues multiple times over. Additionally, these are all companies that specifically want to work with you, the mortgage loan originator, so the personal attention and customer service you receive is exceptional. This month we are gearing-up for NAMB’s annual Legislative & Regulatory Conference in Washington, DC, where NAMB+ will once again be a presenting

sponsor. This is another great opportunity for us to continue to promote our tremendous Endorsed Provider relationships and help NAMB Members realize all the benefits of NAMB Membership. I certainly hope to see you there! As always, if you have questions, would like a personal introduction to one of our Endorsed Providers, or have any suggestions for ways that NAMB+ can continue to increase value for NAMB Members, please do not hesitate to contact me. Sincerely,

Nathan Pierce, CRMS, CMP, President NAMB+, Inc. l npierce@advfund.com

See below for a complete listing of the current NAMB+ Endorsed Providers and visit NAMBPlus.com for more information. Full-service mortgage credit reporting company serving the nation’s financial community. Avantus provides custom mortgage credit reports, fraud and compliance solutions, and innovative lead generation products available exclusively to Avantus customers. Learn more at Avantus.com.

NAMB members receive a discount off Brokers Compliance Group compliance support programs.

eEndorsements promotes your success by making it easy to capture customer reviews, control your content, and publish your testimonials where they matter to drive new business. Automatically share your reviews on Facebook, Twitter and Linkedin. Easily invite your clients to share reviews to sites like Yelp and Zillow. eEndorsements will also hosts a review profile page indexed and found in Google Search. eEndorsements offers a 34% discount to NAMB Members. For more info please visit http://eendorsements.com/namb.

MortgageHippo Swift allows loan originators of all sizes to deliver a modern borrowing experience, significantly improve borrower conversions, reduce origination costs and integrate with other innovative technologies in the mortgage industry. NAMB members will receive a 25% discount. Please visit www.mortgagehippo.com/swift/.

23 The Bond Exchange is a national surety agency specializing in providing mortgage license bonds to thousands of mortgage professionals across the country.

USA Business Lending is the nation’s premier commercial brokerage firm representing over 3500 lenders.

NAMB Members will receive a Twenty-Five Percent (25%) discount off of the regular price with their NAMB Membership.

Simplii VOIP business phone solutions include all the features and functionality of a high end business phone system without the high costs. We offer all NAMB members a 10% discount off their phone services. For more information please e-mail stevew@simplii.net

NAMBPLUS Login Instructions Username = Member Number Password = First initial of your ﬁrst name capitalized and your last name with the ﬁrst letter of the last name capitalized (example = JStevens)

If you are not a NAMB member please visit NAMB.org and join today to gain access to NAMBPLUS.com and the many beneﬁts NAMB members receive!

n National Mortgage Professional Magazine n APRIL 2017

NAMB members receive a 15% discount on all Custom Canvas Prints products and services!

MassMutual Disability Income Through an arrangement with Massachusetts Mutual Life Insurance Company (MassMutual), NAMB members have an opportunity to apply for individual disability income insurance (DI) at discounted rates. Learn more by calling Andrew Berman at 516-652-1819

SYNCRO connects mobile salespeople to their office website leads. NAMB Members receive a 10% discount off regular prices for monthly unlimited SYNCRO Web Chat packages.

NationalMortgageProfessional.com

CalSurance® offers competitively priced Professional Liability Insurance for NAMB members. Multiple coverage options and an easy application process are available. Visit www.calsurance.com/namb for program details and to apply.

InfoSight, Inc. offers proven and affordable cyber security, risk management, IT Infrastructure and regulatory compliance solutions. Visit www.infosightinc.com or contact us at 305-8281003 / 877-577-9703.

If you want a social and mobile marketing strategy that gets noticed contact Social5 today for a FREE consultation and demo and to receive your NAMB member discount pricing.

Industry Updates: April 2017 New York Defines Consummation of a Mortgage Loan, Supports eClosing By Gavin T. Ales

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he State of New York recently updated their Banking Law to provide for a definition of “consummation of a mortgage loan.”

Consummation is used in various laws and regulations, most notably the Real Estate Settlement Procedures Act (RESPA) and the Truth-in-Lending Act (TILA). For example, under the TILARESPA Integrated Disclosure (TRID) rule, consummation is used for determining certain timing requirements a lender must meet during the loan origination process. The TRID rule requires that the Loan Estimate be provided to the consumer no later than the seventh business day before consummation. The rule also requires a lender to provide a consumer the Closing Disclosure at least three business days before consummation. Despite these specific timing requirements related to “consummation” of the loan transaction, the TRID rule did not define what is meant by consummation. TILA does provide that any defined terms not defined within TILA, such as consummation, have the meaning given to them under state law or by contract. See provision 12 CFR 1026.2(b)(3), which states, “Unless defined in this part, the words used have the meanings given to them by state law or contract.” Until recently, there was no standard definition of consummation provided under New York statutes. It was previously interpreted to have various meanings by New York State courts, such as when the mortgagor and mortgagee executed a loan commitment agreement, which would trigger the TRID timing requirements much earlier in New York as compared to many other states. Thus, to ensure a consistent definition, the New York legislature through Senate Bills 7183 (Assembly Bill 9746) and 982 added a definition for “consummation of a mortgage loan” to New York Banking Law § 2. The new definition provides that when a borrower executes the promissory note and mortgage is consummation of a mortgage loan. While the definition was originally passed under Senate Bill 7183 and effective with approval on Nov. 28, 2016, the definition was again amended by Senate Bill 982, which was approved on March 15, 2017. Despite the later, more recent addition to the definition, the full definition was retroactively effective as of Nov. 28, 2016. Senate Bill 982 added the phrase, “including by electronic signature, in accordance with applicable federal and state laws, rules, and regulations,” to the end of the consummation definition. This additional phrase recognizes not only widespread adoption of electronic signatures, but also reflects the increased interest of the mortgage lending industry in performing electronic closings.

Gavin T. Ales is chief compliance officer with Torrance, Calif.-based DocMagic Inc. He may be reached by phone at (800) 649-1362, ext. 6446 or e-mail Gavin@DocMagic.com.

SPONSORED EDITORIAL

new to market

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a suite of resources that strengthens mortgage professionals’ efforts to engage borrowers across the country and help them achieve debtfree homeownership. The lender is a leader in the mortgage industry providing conventional, FHA, VA and USDA residential mortgages across 40 states. Churchill’s Smarter Mortgage combines technology and educational tools to empower home loan specialists as they identify, communicate and serve borrowers before, during and after the mortgage process. The five dynamic components of the Smarter Mortgage are: l HomeScouting: A free mobile app that allows prospective homeowners and borrowers to conveniently explore and discover the latest MLS listings, save favorited properties and quickly contact a local agent or home loan specialist. Available through Home Buyers Marketing II Inc. in the Apple App Store or Google Play Store, HomeScouting is an efficient and powerful digital platform that connects people, places and processes, while providing a personal path to the perfect home. l Sold Home Alert: Home loan specialists and real estate agents can sign prospective homeowners up for this monthly alert, which informs them of homes sold nearby or in an area they are considering to move. Sold Home Alert also allows existing homeowners to compare their home’s value to those nearby or to ones that have recently sold. l My Nest Mobile App: Also available for free on the Apple App Store or Google Play Store, the My Nest app serves as a digital journal for homebuyers to share their favorite properties with family, friends and mortgage professionals. This allows home loan specialists and real estate agents to identify and engage with the prospective buyer as they narrow their search and prepare to enter the

mortgage process. Total Cost Analysis: This allows home loan specialists to specifically tailor loan options for each borrower and illustrates multiple loan scenarios comparisons, provides clear breakdowns of costs, interest rates, monthly payments, the benefits of every option and the fastest path to becoming a mortgage-free homeowner. Mortgage Coach: Mortgage Coach conducts an in-depth loan analysis and cost evaluation of the most appropriate home financing options and digitally communicates the information and all disclosure requirements to borrowers and real estate agents, ensuring that the right mortgage is paired with the right person at the right time. “The future of the mortgage industry will rely on home loan specialists and real estate agents that can effectively mentor borrowers, helping them make confident, well-informed decisions to build wealth and achieve debt-free homeownership,” said Mike Hardwick, president of Churchill Mortgage. “The Smarter Mortgage is a combination of our lending philosophy, which is to create stronger, long-term relationships, and technologies that have made communication and transparency more possible than ever. Together, this creates an unparalleled, personalized and rewarding experience for every single borrower we serve.”

Your turn National Mortgage Professional Magazine 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 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.

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n National Mortgage Professional Magazine n APRIL 2017

Millennials and Homeownership Raise your hand if you’ve heard this narrative before By Jon Tallinger

ut seriously … where do Millennials fit into the current mortgage landscape? Do they really prefer to rent as opposed to buying? Do they want to purchase a home, but just have too many obstacles in their way?

Let’s start with a few characteristics that remain constant for the Millennial generation in regards to their slow-to-leap path to homeownership: l l l

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They’re encumbered with debt. They’re getting married and having children later. They have less money to spend.

These things are out of the mortgage industry’s control. What is in our control is how well we prepare for one of the largest generations in history to enter prime purchasing years. Which is right about now. Trying to predict when Millennials will ultimately take that leap and purchase their first home is an exercise in futility. But when they do decide to buy, and in turn apply for a mortgage, you can bet they are going to migrate towards technologically-savvy companies. The top lenders and vendors in the mortgage industry are investing heavily in technology, and for good reason. This generation of digital natives are accustomed to having realtime updates at the click of a button or the touch of an app icon. For all the progress that the mortgage industry has made, much of the technology in place is antiquated. The mortgage originators that will succeed in the coming years will be the ones who adapt to the changing landscape. Forward-thinking lenders are building resources for their brokers and originators to allow them to help close loans faster and more efficiently. These top lenders are also aligning themselves with title companies, appraisal management companies, and mortgage insurance providers that are utilizing dashboards, apps and metric-driven solutions to help simplify the loan process. The moral of the story? Choose your mortgage lenders and vendors wisely. Remember, this generation of future homebuyers is living in the digital space … now using it as means to order food, communicate, bank, shop and even date. Why should we expect that they expect the homebuying process to be any different? Grace Hopper, a legendary computer scientist once said, “Humans are allergic to change. They love to say, ‘We’ve always done it this way.’” The mortgage industry is changing. Stay ahead of the curve and don’t be afraid to embrace technology … your next batch of clients already have.

Jon Tallinger is vice president of Sales and Marketing at Class Appraisal, a Michigan-based nationwide appraisal management company (AMC). Jon has been a state licensed appraiser in Michigan since 2002. He may be reached by phone at (866) 333-8311 or e-mail JTallinger@ClassAppraisal.com.

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nmp news flash

continued from page 22

popularity of adjustable rate mortgages is something to keep an eye on as the spring home buying season warms up. As the spring home buying season gets underway in earnest, the volume of higher risk purchase applications will grow and further increase loan application defect and fraud risk. The increased share of higher risk purchase transactions and the potential for more adjustable rate mortgages amid the expected strong spring market means mortgage lenders should remain watchful for defect and fraud risk.” CFPB Proposes Amending Regulation B

The Consumer Financial Protection Bureau (CFPB) has released a proposal to amend Regulation B, stating that it seeks to “provide additional flexibility for mortgage lenders concerning the collection of consumer demographic information.” Regulation B implements the Equal Credit Opportunity Act (ECOA), a federal civil rights law. Under the CFPB’s proposal, existing restrictions on collecting demographic information on mortgage applications would be relaxed to help the CFPB and other regulatory agencies ensure they are following the law. “For the mortgage lending industry, the proposal would provide flexibility for individual lenders while supporting the industry’s ability to use consistent forms and practices,” said James Wylie, counsel in the CFPB’s Office of Regulations. “We believe this will help the mortgage industry as it works to adopt new application forms, including the revised Uniform Residential Loan Application.” $490.6B in Commercial/Multifamily Mortgages During 2016

Last year saw $490.6 billion in commercial and multifamily mortgages, according to new data from the Mortgage Bankers Association (MBA).

Multifamily properties recorded the highest origination volume at $214.1 billion, followed by office buildings, retail properties, hotel/motel, industrial and health care properties. First liens accounted for 97 percent of the total dollar volume closed. Commercial banks were the leading investor group for whom loans were originated, with $157.4 billion of the total, while the government-sponsored enterprises saw the second highest volume at $105.8 billion. “For originations, 2016 was the third highest year on record, after 2007 and 2015,” said Jamie Woodwell, MBA’s vice president for commercial real estate research. “Borrowing and lending backed by multifamily properties made up the largest share of the market, and Fannie Mae and Freddie Mac drove much of that activity.” Zillow: Renters Will Need to Earn More to Cover Housing Costs

Renters will need to raise their incomes by an average of $168 a year to keep up with expected rent increases over the next 12 months, according to a new forecast from Zillow, which added that median rent prices are predicted to be $1,420 at this time next year. In several major metros, the share of income needed to cover the monthly rent exceeds the concept of not spending more than 30 percent of income on housing. In some of the priciest housing markets—including Seattle, Los Angeles, and Boston—renters will need annual income increases of more than $1,000 to avoid allocating more of their paychecks to cover housing costs. However, Zillow noted that rent appreciation has slowed and rents are predicted to inch up by only one percent over the next year. “For a long time now, renters have faced an affordability crisis when it comes to housing, and renters in some hot markets will still need significant raises just to keep up with rising rents,” said continued on page 28

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Beware! Wire Fraud Phishing Scams Are on the Rise By Andrew Liput

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n October and March of 2016, I wrote about the rise of settlement agent wire fraud. The scheme involved criminals hacking lender, attorney and title agent e-mail addresses and changing wire instructions prior to closing. When the new instructions are not validated the criminals made off with the mortgage proceeds. Despite these warnings, this crime scheme continues to spread. As the market moves towards a purchase market and away from refinances, the problems are accelerating causing great harm. The latest incidents that have befallen lenders in 2017 have reflected the same common theme. Hackers accessed a lender’s e-mail, either through a borrower’s address, a loan officer using a personal e-mail domain not protected by a lender’s network, or an attorney’s e-mail. The scammers then sent an e-mail, either to the title agent, attorney or to the closing department of the lender including revised wiring instructions. The wires were then sent to the criminal’s bank and not the intended recipient. In one case, which is now the subject of litigation in Florida, a title company is accused of neglecting to conduct appropriate internal data security measures after it received a bogus wire instruction and sent it off to a consumer who then wired the seller’s proceeds to someone else. With the money long gone, the seller is seeking recovery against the agency and the buyer for their alleged negligence. To combat this crime, many lenders are taking an extra step and checking the ABA routing number and bank account number with the Federal Reserve Web site to verify that the account is actually at the bank indicated. Others are sending a verification of trust account to the settlement agent’s bank to verify that the account is truly a trust account in the name and for the business of the title agent, attorney or other closing professional. Many title agents are sending lenders and attorneys their title reports with cover letters containing language in bold print instructing: We no longer send wiring instruction by email, please call our offices to verify the proper bank information! Phishing is not a new problem. There are industry articles back in 2005 warning lenders about e-mail schemes designed to access and steal NPPI. It is clear that this serious problem is getting more widespread and invasive as technology has advanced and criminals have become more resourceful and bold. At SSI, we maintain a database of more than 50,000 settlement professionals nationwide, with verified trust account data that is verified through electronic authorizations directly at each bank. None of our clients wire to any other account. To date, we have monitored more than three million closing transactions without one loss due to wire fraud.

Andrew Liput is CEO of Secure Insight, a risk analytics firm offering vendor management services addressing settlement agent risk. He can be reached by e-mail at ALiput@SecureSettlements.com.

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nmp news flash

continued from page 26

Zillow Chief Economist Svenja Gudell. “Incomes have a way to go to bring rental affordability closer to historical levels, but recent gains are being met with slowing rent appreciation, a welcome sign for renters.” Closing Times for Millennials’ Mortgages Becomes Faster

Millennials are not known to sit around and wait for things to happen, and that need for speed appears to extend to their home loan originations. The closing time for the mortgages of Millennial borrowers decreased to 44 days, the shortest average time to close since March 2016, according to new data from Ellie Mae. The average time to close a purchase loan for Millennials decreased from 46 days in January to 42 days in February, while time to close a refinance loan also decreased to 52 days in February, down from 58 days the month prior. The average time to close FHA loans decreased from 47 days in January to 43 days in February, while the average time to close VA loans took a steep drop from 57 days to 41 days. Home purchases accounted for 86 percent of all closed loans from Millennials in February, a slight uptick from 84 percent in January, while refinances fell two percentage points to 14 percent of all loans to Millennial borrowers. Share of conventional loans remained unchanged from January to February at 61 percent of loans, while FHA loans increased to 36 percent in February, up from 35 percent the month prior. However, FICO scores across all loan types dipped in February to an average of 723, down from 724 in January and their peak of 726 from August through October 2016. For purchases, the average FICO score was 747

for a conventional loan, 690 for an FHA loan and 745 for a VA loan. “Purchase loans are increasing, indicating that Millennials are continuing to enter the first-time homebuyer market,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “In addition, we saw time to close decrease from 49 days in January to 44 days in February, which indicates that our lenders are seeing more efficiency as they embrace mortgage automation.” Home Sellers Face Challenge in Buying New Residences

Today’s home sellers are facing an interesting dilemma: Where can they buy a new residence? In a survey of 800 real estate agents working with the Redfin brokerage, 65.6 percent of respondents said that low inventory was the greatest challenge facing the sellers in their markets. And the homes that are available become very popular very quickly: 57.2 percent respondents reported being involved in at least one instance of a home receiving 10 or more offers this year; a mere 1.8 percent of agents said they yet to be involved in a bidding war. What can sellers do to ensure they can move from their sold home into a new place? Eileen Lorway, a Redfin real estate agent in the Boston area, insisted that sellers move ahead with their house sale before securing the purchase a new home. “They should consider temporary rental options, or moving in with relatives after they sell,” she said. “Then they will be able to take the time they need to find their dream house, know exactly what they’ll have to work with financially, and won’t end up adding unnecessary contingencies to offers, which will give them a better chance to get the home.”

National Median Rent Price Records Two-Dollar Increase

Rent prices nationwide saw the slightest of upticks, rising by about $2, or 0.2 percent, according to new data from ABODO. The median price for a one-bedroom apartment is now $1,005; as of this month, national rents dropped by 1.08 percent since January. For the second consecutive month, the New Orleans market recorded the greatest increase—this time, with a 12 percent increase in the median one-bedroom rent up to $1,180. San Francisco recorded the most expensive rent—$3,415 on a onebedroom unit—but that price was actually down 1.45 percent from March. Fort Wayne, Ind., saw the greatest rental price decrease: a drop from $595 for a onebedroom unit in March to $537 in April, a 9.8 percent dip. Philadelphia experienced an eight percent decline in onebedroom unit rents, from $1,102 last month to $1,023 today.

payment, with the premium on moving up exceeding $1,600— but in the Midwest, move-up buyers in such metros as Chicago, Cincinnati and St. Louis can expect to spend just $150, while buyers in Cleveland would only pay an extra $74 per month. Of course, an extra bedroom usually requires another bathroom, and Zillow estimates that this additional space can cost buyers between $386 and $838 extra a month. “While deciding whether to move is a personal choice, understanding how certain

characteristics like size, location, or number of beds and baths, can impact a home’s price can be hugely important when determining if a particular home is the right fit for you and your family,” said Svenja Gudell, Zillow chief economist. “Even though many families may be prepared to spend extra for a larger home, just how much more may come as a surprise, especially for those living in coastal markets.” Your turn National Mortgage Professional

Magazine 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 email are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

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Contact Ron Vaimberg, nmpU Executive Director & Head Coach directly at 888-979-6678 Ext. 801 or email at RonV@MortgageNewsNetwork.com for more information and pricing.

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A warning to growing and potentially-growing families: Upgrading from a twobedroom home to a threebedroom residence can, depending on your location, increase your monthly mortgage payment by as much as 50 percent. According to new data from Zillow, families can expect to spend $447 extra on their monthly mortgage payment if they move from a twobedroom home to a threebedroom residence. In pricey housing markets such as San Francisco and San Jose, families can expect to nearly double their monthly mortgage

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Ransomware:

Don’t Let Cyber Extortion Lock the Doors to Your Mortgage Business By Dean L. Milber, JD, MA

It is not surprising that many of the questions raised by your peers about cyber insurance turned to ransomware coverage since Beazley, a leading cyber insurer, reported in its October 2016 Beazley Breach Insights that it responded to more cyber extortion attacks in July and August of 2016 than in all of 2015. When using the term “ransomware,” I am referring to a form of cyber kidnapping where a

computer virus prevents users from accessing files on their computer, and threatens permanent encryption or deletion of that data if a ransom is not paid. The perpetrator typically makes a “nuisance” value demand so the ransomed party concludes the only practical is to pay to get the data restored. The Beazley Breach Insights report cited above references the average demand as $1,000, although Quartz Media reported in a Feb. 11, 2017 online article of higher profile ransoms in 2016 ranging from $17,000 to $73,000. Even a “nuisance” ransom payment could be financially crippling to a mortgage professional, and the availability of extortion insurance is something that should be explored as part of a business’ insurance portfolio. Such extortion coverage, however, comes with its own issues that need to be considered when looking to purchase cyber liability insurance. To begin with, the amount of extortion coverage available is usually a sub-limit of the cyber policy or, in other words, the amount available to respond to a ransomware claim is less than the entire cyber policy limit of liability. Moreover, as mentioned above, the ransom demand is typically an amount designed to lead to a quick payment. This is important for two reasons. First, an insurer could require a mortgage professional to provide notice of an extortion claim within a certain time frame, sometimes as long as 30 days, and more often than not well after the payment is due. Therefore, paying the ransom before notifying the insurance company could jeopardize the availability of insurance coverage. Second, the ransom demand could fall within the policy deductible that a mortgage professional is required to pay before an insurer is obligated to make any payment. Thus, any extortion coverage should have a limit that a professional determines to meet his or her industry needs, and the deductible should be at an amount that a professional insured could afford to pay. Note that I

have seen extortion coverages that have a lower deductible than the regular policy deductible, and this is something that could be explored as well. Finally, many cyber extortion coverages contain additional and unique conditions to coverage and, if not met, could vitiate an insurer’s obligation to pay. For example, a policyholder may need to satisfy the notice requirement discussed above together with a demonstration of an effort not to pay or at least negotiate the demand. In connection with the latter, I would certainly recommend coordinating such efforts with the insurer since such negotiation could lead to other damages under other portions of the cyber policy (i.e., data recovery costs) complying with this “negotiation” insurance condition. Additionally, insurers could require the extortion threat to be “credible,” and finally, insurers often reserve the right to cancel the cyber extortion coverage or deny a claim if the perpetrator learns of the availability of such insurance coverage. The proliferation of ransomware as a relatively simple, quick criminal scheme with difficulty tracking the usual forms of digital payment (i.e., Bitcoin) will likely continue impacting professions that control sensitive client information, including mortgage professionals. The availability of insurance to assist in combating this trend should not be overlooked, and a mortgage professional can evaluate the different policies that are presently available to customize coverage that is most suitable to their business needs. As with other forms of insurance, the issuance and cost of a cyber policy will vary based on the risk involved, and reliance on insurance is only part of the equation. To increase the availability and minimize the cost of cyber insurance, it is certainly recommended that this go hand in hand with other cyber risk management tools such as data backup, authentication safeguards, and employee training.

Dean L. Milber, JD, MA is director of Claims and Business Development for CalSurance/Lancer Claims Services, a Division of Brown & Brown Program Insurance Services Inc. He may be reached by phone at (714) 939-7380 or e-mail DMilber@LancerClaims.com.

n National Mortgage Professional Magazine n APRIL 2017

insurance business, offering different coverages with varying conditions to and exclusions from coverage. Generally speaking, most insurers offer some form of first party coverage (for losses an insured sustains) and third-party liability coverage (for damages that an insured is accused of being responsible for by another). These forms of cyber coverage are broken down even further, depending what is being offered by a particular insurer usually with different limits of liability for specific coverage. These coverages include: l Media liability, such as breach of copyright on a Web site and defamation. This is the type of claim that could be covered under the advertising part of a CGL mentioned above. l Security and privacy liability for damages alleged by thirdparties including employees and customers in the event of a data breach. Third-party claims by employees may be subject to a policy exclusion. l Extortion for incidents such as ransomware attacks and the payment of monies for the return of data. l Crisis management services and costs after an actual or suspected data breach, and could include customer notification costs, computer forensics, credit monitoring expenses and public relations services. l Data recovery to restore or recreate lost or damaged data, as well as business interruption/loss of business income. l Regulatory defense expenses for an investigation by a regulatory agency with many policies covering compliance costs, fines and penalties.

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or those who were fortunate enough to attend NAMB East in Atlanta, I hope you were able to listen to the “Cybersecurity and Your Business” presentation by United States Secret Service Agent Alan Davis. Many who did found their way to me the next day as part of the NAMB+ Endorsed Professional Liability (E&O) Program for NAMB Members asking about cyber liability insurance policies in general and ransomware claims in particular. I thought it would be useful to share with you the issues raised by your fellow mortgage professionals. To begin with, I was asked quite a bit about whether a business or office liability policy will protect a mortgage professional from a cyber liability attack. While I have seen a few court decisions finding that a commercial general liability (CGL) insurance policy provides some coverage in the event of a cyber claim, usually under Liability Part B, Advertising Injury Coverage, this is the exception rather than the rule and the coverage that is found would only cover some of the damage under any circumstance (if at all). That being said, some general liability policies and professional liability policies like the NAMB+ endorsed E&O policy does allow for the purchase of an endorsement adding some form of cyber liability coverage. The question then becomes what type of cyber insurance coverage could be added to an existing general liability or professional liability policy or, for that matter, provided by way of a separate, stand-alone cyber liability insurance policy. If you are involved in the purchase of insurance for your business, you have likely seen cyber insurance evolve 20 years ago or so from being marketed to technology companies that bought errors and omissions insurance and to professionals handling sensitive client information like yourselves. As a relatively new form of insurance, it should not be surprising that there is no standard cyber policy form like is often found with your homeowners and automobile policies. The insurance marketplace is flooded with carriers jumping in and out of the cyber

X Marks the Sale How Gen X Can Make You Richer This Year By Bubba Mills

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ou’d do well this year to remember the forgotten generation … that’s what Generation X has been dubbed. But these folks, ages 37 to 51, are the only generation to buy more homes in 2016 last year than it did in 2015, according to a new National Association of Realtors (NAR) report. NAR adds that more Gen X sellers are expected to enter the real estate market this year. Okay, that sounds pretty good, but why else should you pay attention to Xers:

Y l

l l l

Ninety-six percent of Gen Xers financed a previous home purchase, and they were more likely to finance than older boomers. The median downpayment ranged from seven percent for Millennial buyers to 20 percent for older boomers. They’re making the most money with a median $106,600 annually. Younger boomers (aged 52 to 61) average $93,800 annually, while Millennials (36 and younger) earn $82,000 annually. Gen X sellers have built enough equity to finally sell and trade up to a larger home. The share of Gen X homebuyers grew to 28 percent—the largest percentage since 2014. Gen X homeowners represented the largest share of sellers in the past year (27 percent), followed by older boomers (23 percent) and younger boomers (20 percent).

And perhaps most importantly … they’re all about real estate. Lawrence Yun, NAR’s chief economist, says more than 80 percent of Gen X buyers consider a home purchase a good financial investment. So, what do you do with this promising information? How do you tap Gen Xers? Here are some tips to keep in mind as you market to and work with this age group: l

Continue to cultivate your online presence. Gen Xers are following their younger counterparts when it comes to searching for real estate-related needs–upwards of 88 percent start with the Internet. Online is no longer just a marketing tool, but an essential element of business. So

make sure your Web site is attractive, full of valuable information and easy to navigate. And don’t forget social media. Gen X is using it and you need to be on it. Keep a sense of urgency. The survey found that Gen X sellers were the most likely to have wanted to sell their home earlier, but waited because their home had been worth less than their mortgage. Now that the market is stronger, emphasize the timeliness and that fact that interest rates are on the rise. Strengthen your referral networks. A full 60 percent of responding sellers found a real estate agent through a referral by a friend, relative or neighbor, or used their agent from a previous transaction. If you’re not asking for referrals, you’re asking for trouble.

And let me hear from you: What do you think about Gen Xers. Have you segmented your marketing efforts to better communicate to different demographics in your farm area? Where are groups of Gen Xers meeting in your part of the country? What can you start doing today to improve your chances of reaching this important group of consumers? Please send any comments or questions you have to Article@CorcoranCoaching.com or visit Facebook.com/CorcoranCoaching.

Bubba Mills is CEO of Corcoran Consulting & Coaching Inc. He may be reached by phone at (800) 957-8353 or visit CorcoranCoaching.com.

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visionary organizations 2017 35

organization comes along â&#x20AC;Ś one that sets trends, remains ahead of the curve and sets a bar by which all others strive

a look at a sampling of these organizations, organizations we have deemed â&#x20AC;&#x153;Visionaryâ&#x20AC;? for their inspiration to always strive to improve and go above and beyond to assist their clients, but ones that have successfully navigated an ever-changing mortgage industry marketplace. We present to you the following movers and shakers in the industry and the leaders behind them.

continued on page 37

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to attain. This month, we take

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very once in a while, an

TheMoneySource.com How the company started: The Money Source Inc. was founded by Stavros Papastavrou in December 1997, originally operating as a mortgage broker in Melville, N.Y. By 2005, the company evolved into a mortgage lender, and has continued to transform following the merger with its wholesale division, Endeavor America Loan Services. Since the merger, along with new leadership including CEO Darius Mirshahzadeh, President Ali Vafai and Chief Revenue Officer Mike Mirshahzadeh, The Money Source added new channels and divisions, including their high-touch loan servicing division. The company has expanded its national footprint to encompass seven offices. In June of 2016, they surpassed a milestone of $1 billion in loan fundings in one month, taking the company closer to its 10-year goal to help over one million American families achieve and maintain their dream of home ownership. The Money Source is a Top 15 Correspondent Lender and Top 40 Wholesale Lender in the mortgage industry.

How the company has changed the mortgage industry: The Money Source’s leadership has used organization-wide innovation to continuously challenge the status quo. The company dedicates resources to cultivating leadership and company culture, implementing employee engagement platforms and recognition tools, as well as the quirky and beloved Pink Unicorn Gazette newsletter, setting a standard for practices across the industry. The Money Source has also led in developing technical solutions to problems the mortgage industry has experienced for years, including layers of convoluted back-end coding. The company’s platform solutions, EASY and loan servicing technology, SIME, have enabled a streamlined workflow and complete transparency from loan originations through loan servicing. The leadership at The Money Source has shared insight across industry and business publications, including Forbes.com, Entrepreneur.com and National Mortgage News. The Money Source also supports communities with its Pink Unicorn Foundation, a charitable giving and volunteer arm of The Money Source that was established in 2016.

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AngelOakMS.com

Caliber Home Loans Inc.

How the company started: Founded in 2013, Angel Oak Mortgage Solutions (AOMS) sought to re-connect qualified homebuyers with the investor community. Originally licensed in only seven states, AOMS expanded to 35 states of March 2017. The firm has more than doubled its non-agency production each year since its inception and continues to establish itself as the market leader in the non-prime space. How the company has changed the mortgage industry: AOMS has played a large role in the evolution of the mortgage industry. As one of first lenders to offer non-agency mortgage products, educating the marketplace that today’s new non-prime products are sensible and safe options for borrowers who would not generally qualify for agency programs has been a priority. Lenders now have the ability to capture more loans and market share in a decreasing market. In addition, the Angel Oak family of companies has successfully brought three securitizations covering approximately $450 million of all Angel Oak non-agency production to the marketplace with AOMT 2017-1 being a rated transaction. In 2016, AOMS closed loan volume more than doubled 2015 volume, its network of broker companies has increased to more than 1500 and it’s now licensed in 35 states. AOMS has proven to be the unrivaled expert and market leader in the non-prime market, and will continue to bring much-needed liquidity back to the U.S. mortgage market.

How the company started: Caliber Home Loans Inc. has experienced tremendous growth since 2008. And we’re not stopping now. The company that exists today was created in 2013, when Caliber Funding LLC and Vericrest Financial Inc. merged to create Caliber Home Loans Inc. One of Caliber Home Loans’ predecessors, Caliber Funding, came into existence when Caliber’s parent company acquired legacy Bear Stearns origination assets together with its production platform. The business was rebranded to Caliber Funding LLC. Our parent company also acquired the CIT Group’s home lending and servicing operation unit in 2008, along with $9 billion of mortgage and consumer assets. This entity was rebranded Vericrest Financial. In August 2013, Caliber Funding became Caliber Home Loans. How the company has changed the mortgage industry: Two major factors in Caliber Wholesale’s vision are a sales-centric corporate culture, combined with seeking new ideas from our wholesale account executives and clients to improve our products and services. The recent development and introduction of The Ultimate Home Buying Experience enables Caliber to approve applications with minimal documentation, taking clients from application to closing in as little as 10 business days. Broker associates deliver the Ultimate Home Buying Experience to their clients by accessing a state-of-the-art toolkit that incorporates the best of today’s lending technology.

CitadelServicing.com

ClassAppraisal.com

How the company started: Citadel Servicing Corporation (CSC) is the nation’s premier non-prime/non-QM wholesale and correspondent lender. Established in 2004, CSC has been rebuilding the sector of owner and non-owner-occupied lending to borrowers with impaired credit, down to 500 FICO’s. CSC caters to borrowers with recent short sales, foreclosures, bankruptcies and mortgage delinquencies. With up to 90 percent LTV, CSC is providing liquidity to qualifying borrowers for purchase and refinancing of one- to fourunit residential properties. How the company has changed the mortgage industry: Citadel Servicing Corp (CSC) was the first company to re-enter the segment known as sub-prime. Adhering to the regulations of Dodd-Frank and in the spirit of Ability-To-Repay (ATR), CSC is providing residential lending products to borrowers who’ve had recent life events like foreclosures, bankruptcies, short sales and mortgage lates. CSC continues to increase its footprint with loan amounts up to $3 million and innovative products like ATR in full, foreign national lending and a reimagined Alt-A program called Maggi, which allows savvy borrowers more flexibility with options for interest only payments and a 12-month bank statement income qualification. CSC will continue to lead the charge in the non-prime segment to help shape a stable responsible mortgage product for those who don’t fit the narrow mold of traditional lending products.

How the company started: Class Appraisal (founded in 2009) is a nationwide Appraisal Management Company that specializes in residential appraisals. We take great pride in our world class customer service. We utilize the best Appraisers who prioritize our orders and help us deliver the best available turn times. As one of the fastest growing and respected AMCs in the United States, we work with some of the nation’s leading Lenders and Appraisers to provide exemplary regulatory compliance and operational services. To further ensure this, Class Appraisal has both a Chief Appraiser and a Chief Compliance Attorney on staff who are two of the best at what they do. This allows us to not only provide the best professional services, but also remain completely up-to-date on all compliance and regulatory issues. How the company has changed the mortgage industry: Class Appraisal continues to be at the forefront of technology in the appraisal management industry. Having won numerous awards for our innovation, our projects continue to focus on areas that will help streamline the process to be more effective and efficient. These projects include data/metric tracking through Web-based interactive dashboards, turn time and pricing calculators, and our latest innovation, Fast Track. Fast Track is a comprehensive tool that allows you to check on the status of your appraisal anytime, anywhere on a computer, tablet or mobile device.

How the company started: Paramount Residential Mortgage Group Inc. (PRMG) was founded in the high desert by Paul Rozo, CEO and Robert Holliday, COO more than 15 years ago. Merely starting with a handful of employees, PRMG has quickly grown to over 1,300 employees nationwide. Built by originators for originators is what PRMG has been and continues to be the foundation the organization has been built on. How the company has changed the mortgage industry: Paramount Residential Mortgage Group Inc. (PRMG) has been a leader in mortgage banking for well over a decade. As one of the largest privately held national mortgage bankers and residential home lenders, PRMG has successfully helped homeowners purchase and refinance their homes across the country. PRMG has consistently been recognized within the top 25 largest independently owned mortgage lenders in the nation. PRMG is a technology-based mortgage company that lends nationwide, but still provides personal service to our clients. To help facilitate the first-rate service, PRMG offers in-house processing, underwriting, documents and funding; with an experienced and helpful support staff. Today, PRMG is licensed in 47 states and by the U.S. Department of Housing & Urban Development (HUD) with branches and operation centers strategically located across the country, supported by over 1,300 employees and growing each day.

How the company started: Founded in 1986, United Wholesale Mortgage (UWM) is a family-owned and operated company based in Troy, Mich. and operating nationwide. As the nation’s number one wholesale lender, UWM has an impressive history of growth, innovation and excellent client service. In its early stages, UWM started out as a bricks and mortar retail loan shop and then made the strategic decision to focus on the wholesale side of the business. How the company has changed the mortgage industry: UWM has revolutionized wholesale lending, transforming a historically commodity-driven industry into a client-service model that is focused on championing the success of its independent broker clients. From creating an inside sales model to developing game-changing technology, UWM prides itself on helping its clients grow their business. Team members are trained across the life of a loan in order to make their processes as fast as possible. UWM’s technology offerings are second to none in the industry. Its new product launch, Blink, is a borrower mortgage portal that allows brokers to take applications no matter where they are. Blink enables borrowers to start their applications, pull their credit, e-sign documents, verify assets, and track the status of their loans— all from a mobile device. Brokers have the ability to share screens in real-time to guide their clients through the process.

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UWM.com

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PRMG.net

Technology Trends

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By Andy W. Harris, CRMS

he year 2017 appears to be the year for technology breakthroughs in mortgage origination. With the “Know Before You Owe” changes and investment in compliance technology behind us (or many still catching up), emortgages and e-closings are now in our near future. Many lenders have also invested very large sums of money to ensure consumer and industry professional demands are met, especially when integrating with Fannie Mae’s recent “Day 1 Certainty” introduction to streamline income and asset verification. The trends are clear. Most consumers, especially the Millennial generation, now demand speed and ease with every stage of the mortgage and homebuying process from application to closing. The more lenders that adapt and provide a better process through technology, the more the consumer will expect it from everyone. For the lenders that are not closely monitoring their

competition and meeting these demands, they might just be left in the dust. The year 2017 is not the year to ignore trends and all must embrace change and adapt to the changing market. I believe the trends to streamline the process through technology will of course continue beyond 2017. This year is getting quite competitive in all areas with the slight increase to rates. Future mergers and acquisitions may be inevitable as demands rise for those that cannot meet them alone by lack of resources or financial investment required. The lenders with the vision to see ahead and for those that have invested to stay ahead of these changes, these are the companies that are thriving. Whether you’re a small business or a large business, you must invest in improving the process the consumers or business partners you work with. So what are you seeing in technological advancements? What are you excited about in the future? I’m personally

excited about being an independent and watching the investment wholesale lenders and other software vendors are making. Having the best partners to offer this technology to my clients is very exciting to say the least. Change is part of our industry and vital we embrace it and find the best systems for our clients through trial. The future looks bright for mortgage origination and continue to build value in your

services that should never be replaced by a robot! Are you an originator? Send your stories! To have topics considered in future editions, please e-mail me with “OrigiNation” in the Subject Line at AHarris@VantageMortgageGroup.com. These can be confidential or your name and company can be referenced if you wish. You can also join the Facebook Group by searching for “OrigiNation.”

A division of New York Community Bank A National Leader in Wholesale and Correspondent Solutions

Take Control and Unleash Your Potential. At NYCB, we create empowering technology that puts you in control

Ready to take control? Visit us at www.nycbmortgage.com or Email potentialclient@mynycb.com to learn more. This information is for use by current and prospective Clients of New York Community Bank, doing business as NYCB Mortgage Banking, and should not be distributed to or used by consumers or other third parties. ÂŠ2017 New York Community Bank â&#x20AC;&#x201C; Member FDIC. All Rights Reserved.

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NYCB serves correspondent lenders, brokers, community banks and credit unions throughout the nation with a team of highly experienced sales and service professionals, superior underwriting and a comprehensive product menu.

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and convenient service experience that your borrowers and referral sources will love. All this, while transacting with more simplicity, speed and risk mitigation.

heard street on the

Our Heard on the Street column is a chronicle of events, changes and passages in the lives of the people and companies shaping the mortgage industry.

Angel Oak Capital Announces $146 MillionPlus Securitization

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Angel Oak Capital Advisors LLC has announced that it has completed AOMT 2017-1, a $146.4 million securitization rated by both the Fitch and DBRS rating agencies. This transaction, backed by non-qualified mortgages (nonQM), marks Angel Oak’s third securitization since 2015, accounting for more than $430 million in total securitized assets. All three securitizations are backed by mortgages originated through the firm’s two affiliated residential mortgage lenders– Angel Oak Mortgage Solutions LLC (wholesale) and Angel Oak Home Loans LLC (retail). “This securitization is a true cross-section representation of the Angel Oak mortgage company’s production,” said Mike Fierman, co-CEO of Angel Oak Capital Advisors. “We are able to show that we can finance and securitize our production through the coordinated efforts of our affiliated companies. Having the capability to securitize our originated mortgages shows that the broad market has accepted what we do.” Angel Oak’s loan production reached an all-time high in 2016 of more than $1 billion from loans originating in 33 states. “Angel Oak will continue to be a leader in non-QM space because of our highly selective securitization parameters,” Fierman said. “Thanks to new regulations that have strengthened this market, the quality of collateral today is very

different than in previous years. We’re committed to the continued revitalization of this market by providing high quality securitizations to meet investor demand.” Lenders Compliance Group Launches New Mortgage Servicer-Focused Group

Lenders Compliance Group (LCG), a nationwide risk management and compliance support firm, has announced the establishment of Servicers Compliance Group, a new practice area devoted to mortgage servicing compliance. The unique feature of the new practice area is its concentration on interacting with clients on a monthly basis, continual compliance maintenance, and fulfillment of compliance management system requirements. Additionally, this practice area offers a full range of project initiatives involving audits, due diligence, risk assessments, subject matter expertise, “mock” regulatory examinations, assistance as “first responders” for those institutions that may be experiencing negative actions from regulators, and support with business start-up for servicing. Servicers Compliance Group has appointed Michelle Leigh, CRCM, MBA, as executive director and Michael Pfeifer Esq. as director. Together, they will offer regulatory compliance

support for providers of residential mortgage servicing, subservicing and masterservicing. Both Leigh and Pfeifer will also continue to hold their current positions at Lenders Compliance Group, respectively, as director of Internal Audits and Controls, and director of Legal & Regulatory Compliance. “We provide guidance, audits, due diligence reviews, and examination preparation for transactional matters involving residential mortgage servicing,” said Leigh. “In addition, we also assist clients with proactive and remedial efforts to enhance servicing compliance policies, procedures, practices and internal controls, including risk assessments and preparation and review of policies and procedures.” Jonathan Foxx, Ph.D., MBA, president and managing director of Lenders Compliance Group and Servicers Compliance Group, said, “Michelle is a uniquely informed professional, with a wide range of knowledge, experience, and expertise in virtually all areas of mortgage banking compliance. Throughout her career, Michelle has supported leading banks and non-banks in the industry at executive levels. She has worked with every regulator within the mortgage industry, both state and federal. In the majority of her appointments, she has managed the exam management areas of such institutions and has one of the highest track rates in volume, having worked with the CFPB in an exam management role to

date and, specifically, within the mortgage servicing compliance area. Her career and credentialed background provide exceptional perspective on how to establish and maintain the most effective compliance mandates in mortgage servicing. Michelle is a true leader in our profession and will be an invaluable asset to the clients of Servicers Compliance Group.” Pfeifer is currently counsel to the California Mortgage Bankers Association, having served on its board of Directors for nine years, and has nearly 40 years of experience in representing both bank and non-bank lenders, mortgage servicers, investors and industry service providers. He will support the firm’s clients, consulting on their regulatory compliance needs. “With all the changes that have occurred in the mortgage industry in recent years, I am excited to join this new practice area,” said Pfeifer. “We understand that mortgage servicers must have access to experienced, but also independent expert guidance. Servicers Compliance Group offers compliance solutions for those who seek value, but refuse to compromise on the quality of their compliance programs.” According to Foxx, the decision to team up Leigh with Pfeifer was based on an enduring commitment to offer the very best compliance support in the country to mortgage servicers. “Michael is a highly experienced legal professional within the mortgage industry, having distinguished himself as a stalwart representative of his clients facing government scrutiny,” said Foxx. “His career involves nearly all aspects of the

mortgage industry, giving him an exceptional perspective on how to establish and maintain the most effective servicing compliance programs. He is a well-known authority on mortgage banking and mortgage servicing compliance, a frequent speaker at numerous industry conferences, and the author of numerous articles, including articles involving servicing management.” NAMB+ Announces Avantus as Newest Endorsed Provider

Flagstar Signs Agreement to Acquire Opes Advisors

Flagstar Bancorp Inc. has announced the signing of a

definitive agreement under which it will acquire certain assets of Opes Advisors Inc. Opes Advisors’ mortgage banking business generates retail originations from 39 retail locations in California, Oregon and Washington. The footprint is focused in markets with strong demographics, resulting in high credit quality originations. In 2016, its 160 mortgage advisors produced approximately $3 billion in mostly purchase originations. The company also has a wealth advisory arm that currently has approximately $325 million in assets under management.

“We’re excited about teaming up with a first-class retail originator like Opes Advisors,” said Alessandro P. DiNello, Flagstar’s president and CEO. “They’re a strong fit with our strategic goal of growing our retail mortgage business and a good fit culturally. We like the deep mortgage experience of their management team; we like their strong purchase mortgage origination focus; and we like their long track record of success. We look forward to working with the entire Opes continued on page 82

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NAMB+ Inc., the for-profit marketing and communications subsidiary of NAMB—The Association of Mortgage Professionals, has announced its latest Endorsed Provider, mortgage credit reporting firm Avantus. As a full-service mortgage credit reporting company, Avantus has been serving the nation’s financial community for 75-plus years. Avantus provides custom mortgage credit reports, fraud and compliance solutions, and lead generation products. “As a provider of credit reporting services for many of the largest lenders in the country, Avantus serves in excess of 50,000 users on a daily basis,” said Nathan S. Pierce, president of NAMB+. “Our membership will truly benefit from the rich experience of Avantus, a firm that has successfully been providing credit reporting solutions for nearly a century.” NAMB+ connects NAMB members with an array of Endorsed Providers aimed at helping mortgage professionals gain a competitive advantage in today’s marketplace with discounts and special programs only available to NAMB members. NAMB+ brings everything from compliance, digital mortgage platforms, lead generation, phone services, social media, custom canvas prints and much more to NAMB members as part of the NAMB+ program. NAMB members who utilize the offerings of Avantus will benefit via free on-site inspections; free setup of a personalized StartMyApplication Web site for all loan officers; unlimited use of CreditXpert’s Credit Score Improvement tools; and a free cost analysis. “Avantus has had a long relationship with NAMB and its members,” said Louis

Capobianco, president of Avantus. “Being selected as a NAMB+ Endorsed Provider will allow us to introduce all NAMB members to the unique level of service that we can provide. We appreciate this opportunity and look forward to serving the NAMB membership.”

nmp The future of corporate storytelling Angel Oak Mortgage Solutions LLC

DocMagic

3060 Peachtree Rd NW, Suite 500B Atlanta, GA 30305 855-539-4910 www.angeloakms.com

1800 West 213th Street Torrance, CA 90501 800-649-1362 www.docmagic.com

Angel Oak Mortgage Solutions is leading the way in the alternative lending space. Offering wholesale subprime and alt-doc options, Angel Oak brings safety and reliability back to the non-prime market.

Caliber Home Loans Inc.

Ernst Publishing Co., LLC

3701 Regent Blvd Irving, TX 75063 800-754-8955 CaliberWholesale.com

One Commerce Plaza 99 Washington Avenue, Suite 309, Albany, NY 12210 800-345-3822 x 0 www.ernstpublishing.com

Caliber Wholesale’s success is built on a full array of conventional, government and Portfolio loans, combined with our reputation of providing our business partners with the highest level of service.

DECEMBER 2016 n National Mortgage Professional Magazine n

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DocMagic delivers the best end-to-end Document Preparation, eDelivery and Compliance Solutions in the industry. Over 10,000 customers in fifty states rely on us for innovation, quality, and service.

Celebrating over 1 billion transactions, Ernst Cost2Close solutions process guaranteed fees with unparalleled speed and accuracy, alerting the lender and the settlement agent of fee changes in real time.

Citadel Servicing Corporation

First Guaranty Mortgage Corporation

15707 Rockfield Blvd, Ste 320 Irvine, CA 92618 949-900-6630 www.citadelservicing.com

1900 Gallows Road, Suite 800 Tysons Corner, VA 22182 800-296-2275 fgmcorrespondent.com

Citadel Servicing is committed to the emergence of Non-QM/Non-Prime lending. Pioneering the most innovative lending programs which include Alt Doc, life events (FC, BK, and SS), $3mil loan amounts and low fico scores.

FGMC: Correspondent, Wholesale & Retail + Warehouse Lending. Full spectrum of lending products and services nationwide.

Class Appraisal

Freedom Mortgage Wholesale Division

770 S. Adams, Suite 300 Birmingham, MI 48009 866-333-8311 www.classappraisal.com

10500 Kincaid Drive Fishers, IN 46037 844-668-3830 www.freedomwholesale.com

We’re an award winning Appraisal Management Company focused on building positive relationships with our business partners. We are revolutionizing the way business is done with our new and exciting technology.

#1 FHA/VA Lender (IMF, 2Q16) – offering competitive products and pricing (Conventional, FHA, VA, USDA, Jumbo & more), best-in-class service & relevant industry training. Choose Freedom to Grow.

the source for top orig

nmp The future of corporate storytelling Paramount Residential Mortgage Group, Inc.

United Wholesale Mortgage

1265 Corona Pointe Court Corona, CA 92879 855-PRMG-FAN! (855-7764-326) www.prmg.net

1414 E. Maple Rd. Troy, MI 48083 800-981-8898 www.uwm.com

Paramount Residential Mortgage Group, Inc. (PRMG) is one of the largest privately held national mortgage bankers and residential home lenders, helping homeowners purchase homes across the U.S.!

UWM is a forward-thinking, fast-moving and innovatively inspired lender that is always working to champion mortgage brokers and change the game with the latest and greatest technology and services.

REMN Wholesale 194 Wood Ave. S. 9th Floor 732-738-7100 www.remnwholesale.com Iselin NJ, 08830 REMN Wholesale provides same day turn times every day on new file submissions. With a commitment to the broker experience, REMN is leading the way as a preferred partner in the mortgage industry.

Secure Insight 100 Lanidex Plaza, Suite 1201 Parsippany NJ 07054 877-758-TRUST (7878) www.secureinsight.com

A vendor management solution. The first settlement agent vetting firm in the industry today offers a host of reliable and affordable risk tools for banks, mortgage lenders and credit unions.

711 Medford Center # 240 Medford, OR 97504 888-717-8980 www.tagquest.com

ginators!

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TagQuest Inc. is a full service marketing firm offering the most up-to-date, cutting edge marketing solutions for the ever changing Mortgage Industry. Proudly serving our clients for over a decade.

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TagQuest Inc.

Lykken on Leadership

Developing Your People: How to Turn Your Employees Into Leaders BY DAVID LYKKEN

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n the mortgage industry, very few people start out as seasoned professionals. There’s a learning process—a journey of growth that starts with little knowledge of the industry and even less skill in operating within it. Think back on your own career and consider how far you’ve come. I’d be willing to be bet that you are much further along now than you were when you began. Even though we understand that people develop over time, we often do our recruiting as if we expect people to come into the industry with all the skill and expertise that only experience can give. As leaders in the industry, we all need to take a more active role in developing our people into better professionals. If our people don’t move beyond their initial capabilities, the responsibility is ours just as much as it is theirs. In my consulting business, I spend a great deal of time and energy training organizations how to develop their employees. Leadership expert John Maxwell has an excellent model for helping employees grow, and I adapt this scheme as a framework for mortgage companies. There is a process that all employees go through in moving from good to great, and I would like to briefly go over that process here.

“As leaders in the industry, we all need to take a more active role in developing our people into better professionals. If our people don’t move beyond their initial capabilities, the responsibility is ours just as much as it is theirs.”

When an employee first starts off within an organization, and especially if they are just getting started in the industry, they enter into what Maxwell calls the “Directing” stage. Basically, employees at this stage need constant supervision. They need to be told what to do and when to do it. Otherwise, they will be lost. Now, don’t misunderstand me. When I’m explaining this process, leaders in many organizations I train often jump to the conclusion that such employees are bad employees. However, employees at this stage are not bad employees any more than infants that can’t feed themselves are bad human beings. It’s perfectly natural for new employees to start off needing help to get their bearings. In fact, if a new employee comes in and thinks they know everything, that could present even more problems. Don’t think of employees at this level as know-nothings. Rather, think of them as empty vessels waiting to be filled. Anyone who is willing to learn is able to be taught. Employees at the “Directing” level may fall into

this category. As leaders in the industry, we need to pay extra attention to them and play much more of a hands-on role in their development. They are going to need all the help they can get. After they’ve spent a little time in your organization, employees will enter into the “Coaching” stage of their development. At this stage, they’ve learned a little about the job and—just as importantly— they’ve gained the respect of other employees. As employees develop within your organization, they’ll build relationships that give them social equity in decision-making. Employees at this stage will just start to form those relationships that give them the power to influence others in your organization. At this point, they will need encouragement and guidance from leaders more so than they need instruction. In my experience, employees at this level will be much like children entering into adolescence. They’ll starting finding themselves in the awkward space between maturity and inexperience.

They’ll need to take more initiative but, at the same time, recognize their limits. This stage, for many employees, is the turning point; it’s the hump that all employees must get over to succeed. Your employees will need you at this point to help them become the leaders you know they can become. The third stage of employee development is what Maxwell calls the “Supporting” stage. At this point, employees have grown into reliable individuals who can be trusted to make important decisions within your organization. They no longer need supervision, and they rarely even need guidance. They can do it all on their own. At this point, employees will be getting good results for your organization. Employees at this stage will often be your best, most profitable producers. The more employees you can get to this level, the better off you will be. If you can get fifty percent of the employees in your organization to this stage, you will be a cut above the competition for sure. Not only

“People Developers.” They are the future and, depending on how far along they are in this stage, perhaps the current leaders in your organization. Many of the people on your executive team may have risen to this stage over the years. The most important thing about developing employees to this level is that it ensures the sustainability of your organization. When you are gone, employees that have entered into this stage will take up the mantle. The best leaders in the mortgage industry are those who leave leaders behind when they make their exit. Employees that you’ve brought to this stage will be your legacy. One thing I find interesting about this four stage model of employee development is that the stages are named not for the role the employees play but rather for the roles that the leaders play. “Directing, “Coaching,” “Supporting” and “Delegating” are all verbs referring to actions taken by the leader; not the employee. I think this is key, because it reinforces the fact that the responsibility falls on us to develop our employees. Just like in sports, raw talent is great, but without the right coach, even the best players cannot learn how to play well enough as a team to become champions. As leaders in the mortgage industry, the quality of our employees is a direct reflection of leadership. If something is off in our team, the responsibility always falls on us as leaders to make it right. Taking responsibility: That’s what leadership is really all about.

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David Lykken, a 43-year veteran of the mortgage industry, is president of Transformational Mortgage Solutions (TMS), a management consulting firm that provides transformative business strategies to owners and “C-Level” executives via consulting, executive coaching and various communications strategies. He is a frequent guest on FOX Business News and hosts his own weekly podcast called “Lykken on Lending” heard Monday’s at 1:00 p.m. ET at LykkenOnLending.com. David’s phone number is (512) 759-0999 and his e-mail is David@TMS-Advisors.com.

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are employees at this stage the most productive in their work, but they are often also the most well-liked. They’ve built solid relationships and other people in the organization tend to look to them for inspiration in their own work. In addition to being valuable assets because of their productivity, employees at this stage will be great for your organizational culture. Employees at this stage are effective in their work and inspiring for your team. They’ll only need assistance with the most complex transactions and situations. As leaders, we should strive to get as many employees as possible to this level. The fourth and final stage of employee development is the “Delegating” stage. Not all employees will end up at this stage—this is the cream of the crop, the best of the best. At this point, employees become leaders. These are the folks to which you will be passing on the baton in your organization. Employees at this stage will enter into supervisory roles, and you’ll be delegating responsibility to them. They’ll have their own employees to train, develop, and inspire. At this stage, employees aren’t just producing; they’re reproducing. The same work you’re doing in developing employees through the “Directing,” “Coaching” and “Supporting” stages, your employees are doing for others in your organization. At this point, you can trust your employees not only to get their jobs done but also to help others get their jobs done. Maxwell calls these employees

How Far S Travel to S Referral S f the business model of your company is to visit referral sources, you need to think and act on a number of action items as follows. In most cases people are going to refer clients to you who live in the area where their office is located. If it happens that you get a client who lives more than 50 miles from your office, which will be a rarity. If the above is true, we need to explore the question of where you physically should work. Combine the above with my concept of seeing approximately 25 serious referral sources a week, five a day, the same five on Monday, Tuesday, etc. etc., plus three on Saturday and two on Sunday, which then means that you see five accounts twice a week. When I started on “The Street” during the Medieval Times, I was told by my boss and mentor Bill Schor, the president of our very small mortgage company, that if I wanted my $200 draw check on Friday, I had to physically visit 100 accounts a week. It was uncommon to work weekends and Bill didn’t make that a requirement. I so much wanted to please him and become as successful as he was that I jumped at the challenge. But imagine that. Imagine that I visited, in person, 20 real estate offices every day. It didn’t take very long, maybe a month or so, to discover that doing what he wanted was crazily impossible. Not only did I have to make all of those stops, but in the off chance that someone would actually talk to me, he required that there be a written record on a form he supplied. I had to write down who I spoke to and what we talked about. My God … it was so hard. I promise you, I was scared to death to admit to Bill that I couldn’t continue to do what he demanded. The reason I used was factual: I stopped in an office, walked the aisle of desks and dropped a business card on every desk. I did this to prove that I had been there. I stuck my

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The

Mortgage

Godfather

r Should You o See a Source?

BY RALPH LOVUOLO SR.

Ralph LoVuolo Sr. has more than 50 years in the mortgage Industry, with the last 30 as a coach. He is past president and founder of the New York Association of Mortgage Brokers, and long-time member of NAMB—The Association of Mortgage Professionals. He can be reached by phone at (917) 576-1230 or e-mail Ralph@MortgageMotivator.com.

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you and speak to you “in person.” The hard-rock reason for my statements are that the mortgage business is very emotional, fraught with all sorts of concerns, both real and imagined. Part of your job is to be the psychologist for all the parties involved. Long distance therapy doesn’t work, as well as face to face. With all this said, look carefully at your list of referral sources. Of course you do have such a list, right? Of course their addresses are listed on either your new accounts form or your existing accounts form (which if you request, I will send to you). Is one of the reasons you are not getting business because of their proximity to you? Is it difficult for them to relate to you geographically? Is it difficult for you? Are you trying too hard to reach out to areas that you cannot possibly service with the attention they need? This has always been a common problem for newer loan officers. They often say that they know someone, located 50 miles away, sometimes a relative, who promised them business when they start their new job. It has always seems like such a letdown for them, when confronted with the real world of financing to find that referrals probably won’t happen. I’m sure that there are areas of the country that need to reach out beyond their village in order to do business. I firmly believe, however, that the reason, most of the time, is because competition forces loan officers to stray from their own area. Loan officers need to meet competition head on, and not shy away from it. The main reason most salespeople fail is because they give up too easily. They don’t go back to the referral source enough times to prove they can be trusted. Do it! Don’t just think about it!

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face in the brokers’ office and asked if they needed me for anything. Most of the time they said “No!” Most of the time they could not wait for me to leave. It was a very depressing time of my life. It didn’t take me long to hate getting up in the morning. Only because I was able to muster the guts to speak to Bill, and tell him about my daily experiences, the number of 20 a day dwindled. I had explained to him that I needed more time to actually engage in a conversation with the “decision-maker” of the office and most of the time, that was the broker/owner. He gave me some slack. Told me it would be ok to see 50 a week. That also lasted a short time. I was less intimidated by then and we agreed that the right number, the number that allowed me to review my files first thing every day, was 25. Now I had a workable business plan. The requirement to continue to write and report about my conversations remained. The amazing part that I haven’t yet mentioned is that he wrote on my reports, in red pencil and returned them to me with comments. He was an excellent teacher. One of the things I had discussed at this particular conference about was where, physically and geographically, should loan officers travel. How far can loan officers go away from their home and still adequately service clients? If we use the generic “client” to mean both referral sources, such as real estate offices, attorneys, accountants, contractors and financial advisors, and in addition, people who we take applications from, then you can understand my concept. For the most part, clients need to be seen. Applications, although I encourage the use of online systems, are best when done face to face. Referral sources want to see

Exploring the World of Audience Modeling

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By Leah Roling

here will you get your next customer? The idea of using data to create audience profiles to become more customer-centric in marketing campaigns should be at the forefront of answering this very question. We need to change the way we think about targeting our customers from a farming mentality to a hunting mentality. This paradigm shift is real, not just suggested anymore. Foot traffic is minimal, refis are slowing down and mortgage purchases are increasing so there is a demand for better intelligence.

How well do you know your current customers? For mortgage lenders to better understand their customers, they should consider the use of data and predictive analysis to identify needs, and lifestyle trends that will help them promote not only the right product but at the right time. The use of data in this industry is behind the times, and in order to keep up we need to reconsider marketing campaigns of past and look to new ways to better micro target our customer. Avande announced the results of a survey of more than 500 business executives and IT leaders, which revealed that â&#x20AC;&#x153;the investments companies are making to manage big data are paying off.

Eighty-four percent of respondents believe big data helps them make better business decisions. Seventythree percent of companies have already used data to increase revenue by growing existing revenue streams (57 percent) or creating entirely new sources of revenue (43 percent). Evidence shows that big data has become pervasive-more employees in businesses have greater access to increased technology options for managing and analyzing data.â&#x20AC;? Using data has less obvious benefits In a highly competitive market where retaining and recruiting great loan officers has become more

challenging, what are you doing to differentiate yourself from other financial institutions? Using data and providing audience profiling to your loan officers allows higher conversions, better income potential and higher retention. When looking to expand branches, or position yourself in different geographic markets â&#x20AC;Ś how are you determining what city, area, and/or state makes the most financial sense? What if you used demographic, residential and financial data to determine similar customers to that of your successful branches? If you could identify the number of eligible refinances in a given zip code area, would this change the way you market to that area?

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refer their client to you or to another bank. If anything goes wrong in the loan process, it’s the financial institution’s fault and that jeopardizes future referrals. This scenario quickly changes when you have the Millennial profile. The financial institution has the leverage. The financial institution decides which Real estate agent to use, not the other way around. What if you could use lifestyle data to network in the community to increase relationships and retention of your current bank customers? If you knew which consumers golfed, worked out, traveled, or were looking to fix up their house,

you could use these profiles to build rapport and industry relationships to better cross serve your customers and gain new customers. Are you ensuring that you are CRA compliant in your marketing efforts? Are you doing your due diligence to make sure that marketing

campaigns are fair and appropriate? Are you blindly sending out mass marketing collateral pieces? Maybe now is the time to consider the use of audience modeling and data to increase profitability, gain trust, build relationships, ensure better marketing efforts and grow your customer base.

Leah Roling is director of product development for Morelity. Leah is an accomplished sales/product executive with 20-plus years of experience driving profitability and market share for the largest collegiate publishers. Leah is excited to get started in her new role at GOOI Global as director of Product Development.

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How are you currently marketing to specific demographics? Do you market to Millennials in the same way that you do 35- to 50year-olds? If so–you most likely are not seeing the results you would hope for! Millennials consume information in a much different way, shouldn’t your campaigns reflect this? What if you could leverage data to provide audience profiles of Millennials that are ready and qualified to buy? How would that change the relationship dynamic between your financial institution and the real estate agents you work with? From conversations I have had, the real estate agents run the show. They determine whether to

ou are working hard to originate new business. But the rejection is intense. Cold calls have a four percent closing rate in booking appointments, not on dials, but those you speak to. Mailings have half of one percent success rate in getting borrowers to call you. Maybe you will be lucky enough to catch them in the middle of a refi or purchase decision. Originating mortgages is hard work, unless you know a few secrets. We know that borrowers will refi or purchase every seven years. We also know they tend to use a different mortgage originator on every transaction. Why? Because you never kept in contact. Borrowers want an

ongoing relationship. They want to talk to their mortgage advisor every three to six months. They didnâ&#x20AC;&#x2122;t sign up to be made a transaction. So if you can keep in contact every three months, you will get their next loan. You will have no competition. But if you are really good, you will also get referrals. Referrals are 35 percent more likely to do business with you, unlikely to make you compete for their business and will earn 25 percent more revenue per loan than any other origination source. But you probably have asked for referrals without result. It has been frustrating, hasnâ&#x20AC;&#x2122;t it? Now we have LinkedIn More than 50 percent of LinkedIn users, unlike Facebook, are affluent. They

also average 930 connections. LinkedIn has 53 percent more engagement efficacy than any other social media channel. The best part is, you can view all of the contacts of every Linked-In relationship you have. But unfortunately, many of the connection requests you get are those just clicking without knowing who they are.

Script Method: Catch up, Update, Referral. Before you call your clients, connect on LinkedIn. 2. When your client accepts the connection, filter their connections. You can filter for location, years of work experience and title or position. In other words, you can filter for the affluent.

[INSERT:

Here are a few steps you can use to turn those connections into originations. 1. Start calling your clients every three to six months. Use the Three Month Call

3. When you phone your clients every three months, identify four of their connections and ask how well they know their LinkedIn buddies. Chances are they know only 50 percent, the rest are blind connections.

Five LinkedIn Steps That W

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By Kerry Johns

4. Connect with the referrals using a personal message referencing your mutual friend. This will drive your connection rate from 35 percent to 85 percent. 5. Once the referral connection is accepted, send a message asking to talk on the phone to find out more about them using a Referred Lead script. How my client doubled originations One of my one on one coaching clients, Matt, spent $10,000 in

mailings trying to originate new business. Of his 400 clients, he segmented them into 15 percent A’s, 35 percent B’s and 50 percent C’s. He personally called the A’s every three months using the Catch Up, Update, Referral strategy and gave the C’s to his other LO’s. Before the calls, he would connect with his clients using LinkedIn. Seventy percent were already LinkedIn members, so that was easy. But on the call, he would let the client know where rates were headed and the approximate value of their home from Zillow. Thirty-eight percent wanted to start a refi or purchase. For those not yet ready, he asked about the four LinkedIn contacts they had. He asked how well the client knew

them and would they send a note of introduction. All agreed. After connecting with the referral on LinkedIn, he asked to chat on the phone for 10 minutes to get to know them

better. Few refused. Matt then put each referral into the three month call rotation and doubled his business without spending a dime on advertising.

Dr. Kerry Johnson is a frequent speaker at mortgage industry conferences. He is the author of six books, including Mastering the Game: The Human Edge in Sales and Marketing, WILLPOWER: The Secrets of Self-Discipline and his newest book, Why Smart People Make Dumb Mistakes With Their Money. He may be reached by phone at (714) 368-3650 or e-mail Kerry@KerryJohnson.com.

Will Double Your Business

Johnson, Ph.D.

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WE ALWAYS PUT YOU FIRST. THANKS FOR RETURNING THE FAVOR... TWO YEARS IN A ROW. YOUNITED IS TAKING PRIDE IN OUR SUCCESS. WITHOUT TAKING IT FOR GRANTED. We know who makes us #1. It’s partners like you who are out there every day chasing down leads and submitting applications. We also know that you bring your loans to UWM because we put that same passion into helping you succeed. In the past year alone, we developed technology that let your borrowers “go doc-less,” made our exclusive Elite rates available to more of your borrowers, gave you the power to manage your pipeline like a playlist with Loan Swap, created complete Ad Kits to help you market your business and more. We’re the #1 wholesale lender in the nation thanks to you. And we look forward to earning it every day.

YOU + UWM = YOUNITED | 800.981.8898 | UWM.COM United Wholesale Mortgage (UWM) ranked #1 wholesale mortgage lender in the nation for 2015 and 2016 by Inside Mortgage Finance. This information is provided to mortgage and real estate professionals only and is not intended nor is it authorized for consumer distribution. NMLS #3038.

The Long & Short The Business of Short Sales

Drill Down on Short Sale and Modification Credit BY PAM MARRON

ecently, a joint effort of the mortgage and the housing counseling industries to remedy continued credit problems of past short sellers who continue to receive a foreclosure credit code on their past short sale credit was investigated. While reviewing data, it was learned that this same credit code problem also affects consumers who have had a modification. The foreclosure code problem seems to be present when mortgage lates go past 120 days, a trait present in many short sales and modifications. But we were stunned when the foreclosure credit code also showed up on a consumer who had excessive mortgage lates … but no short sale, foreclosure or modification. To prove the data found, nine cases including short sales, a modification, a Deed in Lieu and one where none of these existed were set up in the same format. A tri-merged credit report was pulled for each and a visual of the problem credit trade line was provided, as well as a snapshot of the individual bureau repositories of Experian, TransUnion and Equifax.

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Fannie Mae All cases were run through the Fannie Mae Desktop Originator (DO) automated underwriting system (AUS) with the tri-merged credit report. A visual of the findings for an approval or declination and what the blended tri-merged credit in Fannie Mae

looks like was provided. The Fannie Mae workaround was used for loans that received a Desktop Originator Refer with Caution and it worked … even on the modification. There is no workaround for Freddie Mac. Freddie Mac For Freddie Mac, cases were run through the Loan Prospector Advisor (LPA) first with the lender tri-merged credit report. Then, the case was run again using the credit in-file option allowed internally through Freddie Mac’s LPA. A snapshot of Freddie Mac’s tri-merged credit and the separate credit in-files was included. Here is what was found in Freddie Mac: l There is no variation for foreclosure verbiage. Either “13. Recent foreclosure/signif derog appears on credit report” appears in findings, or it does not. Other remarks are often included: l “64. Crdt rpt w/recent mtg delinq or review mtg credit history” l “YW. The borrower has had a foreclosure within the last seven years. The mortgage file must also contain evidence of the completion of the foreclosure.” Number of consumers at risk Thanks to RealtyTrac (now ATTOM Data Solutions), it was learned that there were 1,978,754 short sales and deeds in lieu

completed from Jan. 1, 2010 through Dec. 31, 2016. The wait timeframe after a short sale or deed-in-lieu is four years, rather than the seven-year wait timeframe after a foreclosure. Thus, as of Dec. 31, 2016, 1,032,211 of those with a past short sale or deed-in-lieu are past the four-year wait timeframe and are now eligible to re-enter the housing market. Any of these clients and additionally those who had a modification or who had mortgage lates past 120 days will most likely encounter a new mortgage denial for a Fannie Mae or Freddie Mac conventional mortgage. We haven’t even looked at the number of modifications affected yet. How problems continue A conventional mortgage denial occurs when the automated underwriting system reads credit code of a past short sale as a foreclosure. When the lender calls Freddie Mac or Fannie Mae, support tells the lender that the information is coming from one or more of the bureaus (TransUnion, Experian or Equifax). Ultimately, the consumer is told they must get the credit fixed with the bureau(s) where the foreclosure code is

coming from, though Fannie Mae has a workaround for this problem. The borrower tries to get this fixed by placing a “dispute” on the account. The “dispute” hides the actual credit from Fannie Mae and Freddie Mac automated systems and must be lifted from the credit when the consumer applies for a new mortgage. When the dispute is lifted, the problem credit comes back and most often credit scores plummet. This results in a higher rate for the consumer and the lender must pay for a Rapid Rescore, the quickest way for consumers to get a credit score change. This is a big problem when found during a contract with a deadline. Lenders that end up paying for the Rapid Rescore often do not want to assist consumers where this problem is anticipated due to the cost the lender must incur. Another problem is the “Date Reported,” or a more recent change to an account than the initial occurrence date. The more recent date often exempts a past short seller from a new conventional mortgage when it falls within the minimum required wait timeframe. This date cannot be changed per credit reporting agencies. Stay tuned.

Pam Marron (NMLS#: 246438) is senior loan originator with Innovative Mortgage Services Inc. (NMLS#: 250769) in Tampa Bay, Fla. She may be reached by phone at (727) 375-8986, e-mail Pam.M.Marron@gmail.com or visit HousingCrisisStories.com, CloseWithPam.com or 8Problems.com.

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S P E C I A L

F O C U S

O N

Leadership Become a More Effective Leader Six attributes of effective leadership and recognizing it in others By Ray Brousseau

2. Set the pace It’s been said many times before and still rings true: Leaders lead by example. In the mortgage industry, one of the most important things a leader must do is set the pace. The speed of the leader dictates the speed of the team. When defining expectations, it’s important your team knows that you hold yourself to the same standards. They also must know you can do what you’re asking them to do. This earns credibility, demonstrates solidarity and inspires your team to work hard— together. Setting the pace doesn’t just mean the speed at which your team works and accomplishes goals, however. It applies to a host of qualities that should be evident in your leading

by example: Ethics, accountability, discipline, attitude, recognizing and rewarding accomplishments and communication. A team adopts the characteristics of its leader. It’s incumbent upon you to put forth your best effort on every front. To get everyone to buy in and live the big things—such as values and culture—you must ensure your team is aligned from top to bottom and working together as a cohesive unit. 3. Serve your team Make time for your team. Above all, leadership is a people job, and strong and effective leaders serve their teams—not the other way around. The person in charge should work with and for the team; meeting the goals and being successful is the bullseye, not the hierarchy of the organization. A true leader recognizes this can hinder success and morale and works to remove any obstacles that could keep the team from accomplishing organizational goals. This means you, as the leader, must be attentive to what’s happening within the organization. Listen to your team. This will help you best serve them and lead them to success. Some may question what value a manager or team leader brings because often they’re not the continued on page 58

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1. Be passionate True leaders set the tone for their organization. If the person at the top is passionate and enthusiastic about the business or project at hand, it will filter throughout the team. As the leader, people look to you for

vision and direction. They notice how you handle challenges and your approach to daily work. Successful leaders make their organizations fun places to work. Your level of energy and attitude will dictate your team’s own approach to their work. A strong leader is committed to helping the team meet its goals and cares about their work. Successful teams often have one thing in common: they work hard and play hard together. When you are passionate about what you’re doing, it shows in your work product and success of your team.

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n an industry as dynamic as the mortgage business, strong, consistent leadership is critical to success. Whether working with a team of 10 or 1,000, the same key principles of management apply. Learning and applying these principles not only helps mortgage professionals become better leaders, but also helps them identify and develop leaders within their companies— and recognize strong management in their business partners, as well. The question has often been posited: Are leaders born or made? In truth, it’s probably a little bit of both. Innate leadership qualities should be cultivated and developed; however, learning the tenets of directing a successful team is valuable leaders and team members alike. Whether or not you currently manage people, developing your ability to recognize effective leadership will help you in selecting prospective business partners—and potential employers. Following are six attributes I believe are the hallmarks of strong leaders.

a special focus on LEADERSHIP

become a more effective leader

ones doing the daily work. The answer is simple: A valuable leader makes sure everyone on the team can be their most productive, and does whatever is necessary to achieve that. A leader is there for the team, no matter what. 4. Communicate Far too often, bosses communicate too little. An effective leader is a communicative one. Every member of your team should feel connected to the larger group and know the overarching goals and action plans of the team and organization. It’s a leader’s job to get team members the information they need to do their jobs quickly and efficiently. This requires frequent communication that is clear and easily understood. Messages and expectations should be reiterated regularly to be

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effective. Likewise, effective communication is two-way. As important as it is to deliver information, it’s equally important to receive information from your team. Effective leaders must be approachable so communication flows freely in both directions. When an employee needs to talk with you—whatever the reason— make sure you set aside the time to do so, as they would for you. 5. Be accountable Effective leadership requires real accountability. And accountable leaders assume ownership for the performance of their teams. A true leader knows this is core to the success of any endeavor and that it is critical from start to finish. They communicate, set clear expectations and hold their team accountable for what is expected of them—for the team and organization. When things go awry, leaders take responsibility and take the steps to make it

6. Attract and retain other leaders An often overlooked element to effective leadership is the ability to attract other leaders, because a truly strong leader is not threatened by that quality in others. Effective leaders know to succeed and grow. Employers not only need the best employees they can find, they also need those individuals to stay engaged, fulfilled and committed to the organization’s long-term goals. Core to this is to create an environment that breeds success. A work environment that combines hard work and fun leads to increased creativity, more imaginative problem-solving and unique approaches to achieving goals.

The organization should be inclusive and allow its people to play a role in the overall process. Keeping those leaders once you’ve earned their interest is a simple matter of keeping them engaged and allowing them to grow. Recognition, rewards and continued professional growth opportunities will sustain loyalty and commitment to their work and your organization. The mortgage industry is continually changing, which makes steady and robust leadership especially important. Regardless of the industry, however, the tenets of effective leadership remain the same. Leaders must lead by example, with passion and enthusiasm for their work. By communicating and being approachable, managers make sure their team is connected, informed and prepared to succeed. This creates an environment of inclusivity and engagement that encourages and attracts leaders. Practicing these principles of effective leadership, today’s mortgage professionals can become better leaders and better recognize strong leadership and leadership potential.

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® First Guaranty a Mortgage Corporation a

right. Without accountability, even the best, hard-working, well-intentioned leaders fail. Accountability drives meeting their performance goals, developing teams, hiring top talent and optimizing performance, all of which are core to a business’s success.

a special focus on

“Leaders must lead by example, with passion and enthusiasm for their work. By communicating and being approachable, managers make sure their team is connected, informed and prepared to succeed.”

CORRESPONDENT LENDING fgmccorrespondent.com

WHOLESALE LENDING fgmcwholesale.com

This information is solely for mor tgage professionals and should not be provided to consumers or thi rd par ties. Information is subject to change without notice. This is not a commitment to lend and there is no guarantee that all bor rowers will qualif y. All loans are subject to credit, under wr iting, and proper t y approval. Other restr ictions may apply. FGMC is not acting on behalf of HUD, VA, FHA or any other agency of the federal government. Fi rst Guarant y Mor tgage Corporation (Company NMLS ID 2917) is licensed by the Depar tment of Business Oversight under the California Residential Mor tgage Lending Act; Regulated by the Division of Real Estate in the Sttate of Colorado; Licensed by the Delaware State Bank Commissioner to engage in business in this State under License No. 24 03 (renewed through 2015); Georgia Residential Mor tgage Licensee; Illinois Residential Mor tgage Licensee; Kansas- Licensed Mor tgage Company; Licensed by the Mississippi Depar tment of Banking and Consumer Finance; Licensed by the Nevada Division of Mor tgage Lending to make loans secured by liens on real proper t y; Licensed by the New Jersey Depar tment of Banking and Insurance; Licensed Mor tgage Banker – NYS Depar tment of Financial Ser vices, Licensee No. B50 0 8 0 0 (d/b/a FGMC In Lieu of Tr ue Corporate Name Fi rst Guarant y Mor tgage Corporation); Rhode Island Licensed Lender. For complete corporate and branch licensing information, visit w w w.fgmc.com or w w w.nmlsconsumeraccess.org.

Ray Brousseau is president of Carrington Mortgage Services LLC, Mortgage Lending Division, responsible for all day-to-day operations and P&L management. Prior to joining Carrington in 2011, he spent 23 years leading various segments of Citi’s consumer finance business, CitiFinancial.

a spe

a special focus on LEADERSHIP

Emerging Leaders and How to Find Them By Chad Gomoll

knowledge, and experiences to bring to the table. As long as they have the technical aptitude—an understanding of all areas of the business and their craft—to help the team navigate difficult situations and leverage positive ones, leaders can hold any position in the company, not just positions of authority. Having leaders at every level is actually beneficial, as these

“Having leaders at every level is actually beneficial, of their team members to step up their game to achieve the common goals of the organization.”

people are usually the ones inspiring the rest of their team members to step up their game to achieve the common goals of the organization. Leaders tend to have an innate desire to lead. They are self-starters who volunteer to spearhead the next group project, take on a new task or responsibility that doesn’t fall inside their usual scope of duties, and want to be more

organization as a whole. They motivate others, enable them to do their jobs, and put in just as much effort as (if not more than) the rest of the team. When you show others that you are invested in their success and are willing to get your hands dirty right along with them, others will start to follow your example. Leaders must also be approachable and have

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as these people are usually the ones inspiring the rest

excellent communication skills. Regardless of the person’s role within the company or what the topic of conversation is about, that person should feel comfortable coming to talk to any of their leaders. In quality organizations, leaders maintain an “open door” policy, meaning that employees are able to walk into a leader’s office to discuss an issue without having to go through another person or needing an appointment. By allowing people to come to you with a problem without having to go through a chain of command, everyone feels like they are a part of the same team and that they are just as valuable as someone else in a different role. This also goes the other way around—you must be willing to share your knowledge and expertise when appropriate. Keep the lines of communication open, share your knowledge, mentor those around you, and watch new leaders emerge. Along the same lines, leaders must also show empathy and actively listen to employees. There may be times when your employee comes to you to discuss an issue they are having, whether it is on a file, a dispute with a coworker, or perhaps something that’s happening in their personal life that is affecting their work. Active listening helps you understand the situation in order to figure out a resolution, and empathy helps you better relate to the person you’re speaking with and treat them with understanding and compassion. When people know that you are listening and care about their issue and well-being, it builds trust and helps them feel comfortable coming to you in the future. When they feel heard, they will respect your leadership when it comes time for them to rally around you and your vision. Typically, these leadership traits are inherently bred into someone, but if a person has the desire and drive to learn how to become a leader, they can do so by being mentored by a strong leader in their life.

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Leadership … t’s a term we hear all the time, but what does it actually mean to be a leader, and how does having strong, quality leaders within a company benefit a business? Leaders are the people who are driving change and inspiring the workforce towards a common goal. Whether it’s achieving this year’s profit goals or putting together a team for a 5k to benefit cancer research, there has to be someone who is rallying the troops to achieve the team’s objective. Without them, businesses may not even exist, and if they do, their employees are merely coming to work every day, completing the same tasks to get the job done, and never growing personally or professionally. If we want our businesses to grow and thrive, we need quality leaders at the helm to foster that growth. In my personal experience, I made up my mind a long time ago that I wanted to be a leader. I decided that whatever role I took, I would inherently take the lead on different projects and tasks. I consistently sought out new responsibilities and stepped up when something needed to get done, even though that task may not have been assigned to me. I found leaders that I wanted to emulate and asked them to be my mentors. I also found biographies and other books written by or about famous leaders to learn from their experiences. As a result, I can recognize leadership traits in others, and I am now in a position where I have the privilege of cultivating others who want to grow as leaders. Leaders come from a variety of backgrounds and can lead at any age or stage in their career. Whether they are a young Millennial only a couple of years into their career or an industry veteran who has 30-plus years under their belt, each person has their own unique perspective,

involved in the organization. They take initiative to get the job done and encourage others to follow their example. They also are quick-thinkers who recognize when decisions need to be made quickly and are unafraid of making executive decisions. But most importantly, they have the ability to help their team navigate through any situation that may arise. Leaders are altruistic and have a servant’s heart. They put the needs of their colleagues first. They recognize that it’s not just about them, but the team and

a special focus on LEADE

a special focus on LEADERSHIP

emerging leaders and how to find them

This gives true leaders the opportunity to become a positive role model, promote their actions and key influence, and encourage passion and creativity to their mentee. Fortunately, sharing resources, skills, and knowledge with a potential leader can mean big potential for future business and the success of your employees. Unfortunately, however, you cannot simply point to someone and tell them they are going to be a leader and expect them to rise to the occasion if itâ&#x20AC;&#x2122;s not what they desire. Ninety percent of people donâ&#x20AC;&#x2122;t want to be the leader, they want to be told what they need to get done and theyâ&#x20AC;&#x2122;ll get it done. This is not a bad thing, though; we need both leaders and followers in order to succeed. So, how do you find the quality leaders and keep

them around? First, start with the leaders you already have. Look for the people within your organization who exhibit these traits and then encourage them to grow on the leadership path they are already forging for themselves. Build them up by recognizing when they have good ideas and encourage others to look to them for guidance and follow their lead. Give the potential leader the ability to make decisions and give them the tools they need to succeed as a leader. Once youâ&#x20AC;&#x2122;ve built up the leaders you have and have established a culture that cultivates leadership, seek out other leaders who match that drive. Good leaders typically want to be around other strong, independent leaders, so you have to demonstrate that you already have that culture. Lead by example and demonstrate in your daily

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actions how the business should be run. Then, when new people come to the

organization, itâ&#x20AC;&#x2122;s much easier for them to picture where they fit in.

Chad Gomoll is senior vice president of Business Development at Inlanta Mortgage. Headquartered in Wisconsin, Inlanta Mortgage has been in business since 1993. Inlantaâ&#x20AC;&#x2122;s mission is to be the home financing partner that you trust to serve your family, friends and community.

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The Importance of Self-Awareness and Humility in Leadership By Reza Jahangiri

leadership positions, they have to work to take away their natural biases, their desire to gravitate to their functional expertise, in order to be the most effective leader. For me, it is avoiding the temptation to solve every problem. Stepping back and acting more broadly

things to the table, and both are important to the growth of an organization. At times, younger leaders have a tenacity and courage about them. They can have no fear, be very smart, and look at problems differently because they have not been in the system for a long time. But, younger leaders can also be missing a lot of the wisdom that comes with experience. I have learned that there are formulas in management, in leading people, that are known by more seasoned leaders. When managing 1,000-plus people, it is nice to have that framework. Along those lines, experience goes a long way and is correlated with age obviously. You can be a very bright and

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can be hard. In that respect, people have to be retrained to lead, because like anything else leadership is muscle. Whether you are a natural leader or not, there is a lot you can learn through experience. You still need to grow, to stretch, to learn how to be more effective, and to keep pace with your organization’s growth. Some of that is through trial and error. Some of it is from learning from people around you. For me, as I brought in senior leaders, I learned from them. I learned from our board. I learned from Fred Thompson. Frankly, I never stop learning. As our company has grown, I have had to stretch as the CEO, like being hired and rehired at each stage in our evolution.

natural leader, someone who spots opportunities, but when it comes to actually going through a longer cycle of leadership and being part of something that is growing, experience matters. If you do not have it, then you have to draw on other people’s experience. Younger leaders should be aware of that. Younger or older, humility is important. You can be humble and still be hungry and driven, they are not mutually exclusive. Humility helps with motivating leaders in your organization. I have found that it is better to pull than to push people. I don’t believe in managing with a whip or sword. Instead, I like to attract people with a similar mindset. People who want to be part of a movement, to build something, and to better society. When I say similar mindset, I mean in terms of what drives them, their values. Do they put money first? Or, do they put helping others first? That is why a huge part of a leader’s job is to give that sense of purpose. The people in your organization need to know the mission, why they are doing what they are doing. They have to be drawn towards that, as well as the fabric of the people on the journey with them. You are not going to attract everyone with the exact same values, but it does help when there is a common thread. When you have that common thread–like-minded people who are mission-visiondriven who really want to build something over the long term— then they tend to do the right thing, make better decisions, build momentum, feel empowered and get results. Attracting good leaders to an organization takes effort though. What has worked for me recently is focusing on attracting impressive people. Put simply, impressive people attract impressive people. Secondly, since we are still considered a frontiering business, it is important for me to be candid about what stage we are in as a business and as an industry. We need people that can work in both entrepreneurial and enterprise worlds. People who do not fit in one box but can play in both arenas. And, for us personally, people who want to work in a non-political, flat, mission-based meritocracy.

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rom my experience, most leaders do not walk into situations expecting or wanting to lead. That is not what drives them. If they are like me, they are driven to solve problems or get results. Those that take leadership positions for attention or control rarely last or even make good leaders. Personally, I have held leadership positions my whole life, but ironically I do not identify day in and day out with being a leader. That is not necessarily who I am. What I am is a problem solver. I am highly motivated to solve complex problems. And when I am put in a situation where challenges or problems are being discussed, I cannot help myself, I start working the problem and the next thing I know I am leading again. In this context, it is not that someone is born to lead. It is that some people are driven to get results or are passionate about solving problems or great at execution. Others may be great motivators or consensus builders. Because of these special characteristics or skill sets, they are naturally tapped to lead. It is really not enough to be “born to lead.” Even natural leaders need training and development. And, people who may not have the innate qualities of natural leaders, whose personalities may be at odds with what is typically expected of leaders–for instance, they don’t sell themselves well, are quiet, or are not particularly motivating– should not be dismissed. Not every leader has a Type A, extraverted, magnetic personality. Other traits are equally important, such as humility, ability to listen, profound self-awareness, and deep subject matter expertise, to name a few. Many of these individuals can be groomed and taught to lead. Working against your own nature, however, is always a challenge. As people grow into

My role as CEO has changed as we have evolved too. I have had to learn how to lead at each stage in different ways. In the beginning, I was leading as we built the business. Now, my job is to set the vision of the business, turn that into a strategy, and make sure it is communicated crystal clearly to the organization. In fact, the more experience I have, the more I appreciate experience. In that respect age is a factor. But, age factors into leadership in different ways. In other words, younger leaders and older leaders bring different

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the importance of self-awareness and humility in leadership

Once you have found your leaders, the next challenge is keeping them. Retaining good leaders really comes down to three things. First, empowering them. Second, knowing them. And, third, allowing them to fail. Empowering them In my experience, good leaders are attracted to an organization where they can feel empowered. Leaders want to lead. They are not focused on the risks or downsides that come with having the full authority to execute. Good leaders will run and execute against their authority and take ownership of their mistakes. Knowing them It is important to get to know your leaders, where their head is, their strengths and weaknesses, then at times work on complementing strategies; find someone with a complementary skill set and

make a partnership. Match one person’s strengths against another’s weaknesses. Allowing them to fail Encouraging leaders to take risks and allowing them to fail without fear of retribution is important. This concept works best in a collaborative environment, where you sink or swim together—make sure everyone knows they do not have to work in a silo, create more of a spider web of accountability, and set up incentives to succeed together as a team. By empowering them, knowing them, and allowing them to fail, I have found that leaders will naturally decide to care and stretch elsewhere, and be willing to help in other areas that could be holding back the business. In this way, leaders are not just focused on delivering in their own area, but

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in ways that help move the business forward. In fact, what I admire most in leaders–the two most important traits–are profound selfawareness and humility. This is especially important in a fastgrowing company. Leaders have to be able to keep pace and to grow with the company and the only way to do that is through humility and self-awareness. Other important traits include having the courage to make the right decisions, to be honest, and to make unpopular decisions. Also, people who know how to cut through the noise and get to the most critical aspects, who

know how to prioritize, always make very good leaders. These are the people who do not overly complicate things, who simplify, and communicate with crystal clarity. Being fearless is also important. At a minimum, leaders cannot fear change. Beyond that, another important trait is the ability to look beyond yourself – where money is not always the primary driver. At AAG, I look for people who want to build a long-lasting business or legacy; who want to make a dent in this world; who are motivated to solve a big social issue. To me, that’s true leadership.

Reza Jahangiri is the founder and chief executive officer of American Advisors Group (AAG), serving as CEO since July 2005. He also works as co-chairman on the National Reverse Mortgage Lenders Association’s (NRMLA) board of directors and is co-chairman of the association’s policy committee, dedicated to the efficient implementation of critical industry reforms.

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Making Room for a New Generation of Leaders By Patty Arvielo

Will over skill When you have the will to

succeed, you will always find the way to make it happen. Possessing the right skills will move you forward in the industry, but having strong determination will take you farther than any skill set. That’s why drive, hunger, and motivation are so essential to leadership. The person who is highly motivated will outpace the person who simply has the experience and knowledge. When someone is motivated, they will find the way to develop the skills that they lack. However, just because someone has the skills, it doesn’t mean they will be motivated to use them. Nothing will stop the determined person from getting ahead, but lacking zeal and passion will always hinder the skilled person from overcoming challenges.

Let your voice be heard There’s a lot of value in having diverse perspectives in one room. Yet, studies have shown that women speak up about 75 percent less than men in group environments where they feel outnumbered. If you’re going to lead, you have to be willing to let your voice be heard. At times, people sit back without saying

anything due to the fear of being wrong or at the risk of someone disagreeing. Yet, every time you have a seat the table, you have to learn to speak up. You won’t ever step into a leadership role by playing it safe and sitting quietly on the sidelines. You have to step up to the table and not be afraid to voice your opinion. Leadership requires the willingness to take risks and get out of your comfort zone. People may not recognize your ability to lead until they start observing your worthwhile input. If someone invited you to be a part of a group meeting, it’s because they deemed your presence was necessary. So, it’s up to you to take advantage of that opportunity and prove them right.

Be proactive, not reactive Since change is inevitable, it’s vital that leaders have good foresight and have the ability to see the big picture. You must be able to look five years down the road and anticipate what’s coming as the industry transitions through various cycles. A leader must know the challenges and opportunities that are ahead. Having your pulse on the market and taking proactive measures, as opposed to reacting to changes, will mean the difference between being successful as a mortgage leader and being unsuccessful. When you’re in tune with the trends, you understand how current issues affect the housing marketplace, which enables you to effectively navigate a business through transitional periods. Good leaders know the direction the market is headed in and they have a clear vision for the future. Reactive leaders wait for challenges to arise before taking action. That’s why a huge part of proactive leadership is not only thinking strategically but also thinking long term. If you want to succeed as a leader in mortgage banking, you have to constantly evaluate what you’re doing to continued on page 64

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Cultivate character Leading within the mortgage arena, or any field, starts with character. Good character goes hand-in-hand with true leadership. For mortgage banking to progress, there has to be ongoing trust built within the community and new levels of respect established for the industry. One way to do this is by promoting leaders who lead with integrity. In an industry where there is the potential to impact the livelihood of countless people, characterbased leadership is essential. Making money can never become a higher priority than doing what is right by the people you serve. Good leaders know that good results follow good ethics; and not the other way around. Granting loans to

borrowers that could prove detrimental in the long run is never wise and good leaders understand that. A leader has to be more concerned about a borrower’s livelihood than making a profit at the borrower’s expense.

Practice good listening In order to lead, you also have to know when it’s time to talk less and listen more. That’s because good leaders are good listeners. They understand that they gain knowledge by listening not talking. So, they’ve learned the art of listening. It’s just as important to learn how to actively listen as it is to learn how to listen to what’s not actively communicated. You can collect valuable data on how to lead and what changes to implement simply by listening. You have to listen to your customers. You have to know what they want. Why do they do business with you? What do they tell others about their experience with you? You also have to listen to your employees, business partners, and other industry professionals in order to not only understand the environment within your company’s culture but the industry as a whole. If you don’t listen and remain connected, you won’t have the necessary knowledge to lead an organization.

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ow more than ever is a prime opportunity for mortgage companies to create greater diversity amongst industry leaders. As a new generation of homebuyers emerges, one in which Millennials, Hispanics and single women will be key players, it’s vital that the leadership within the industry become more reflective of the population that it’s serving. Becoming more diverse is not only the right thing to do, but it makes good business sense. It’s more difficult to reach and impact consumers when they have a limited voice represented in decision-making roles. And while there has been progress, there’s always room for growth. For mortgage banking to maximize its reach, diversified leadership has to become a higher priority; so, whether you want to incorporate diversity within your leadership or become a leader yourself, you have to know what you’re looking for and what it takes to succeed. From solid character to being an innovator, there are key attributes all leaders in mortgage banking need if they want to be part of framing the future of the industry.

When you identify someone who has the will to succeed, invest time in training them on the necessary skills. You can teach skills, but leaders have to have the motivation to win.

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making room for a new generation of leaders

prepare your business for market changes and how you’re going to stay ahead of the curve. Otherwise, you won’t be able to keep pace in a competitive arena. Use innovative measures As a tech-savvy, Millennial generation becomes more of a key player in the housing market, it’s more important than ever that mortgage companies have innovative leaders. It’s a huge asset. While innovation is about technology, that is only one component. Being innovative is all about having an ability to think outside of the box and find better ways of doing business. It begins with an innate curiosity and a refusal to become stagnant. It’s means being a forward-thinker and constantly looking for ways to improve. Over the past few decades, a lot has evolved within mortgage banking and in order for it to keep moving forward, you have to keep fresh ideas. Whether it’s developing an innovative

approach to your operational platform, streamlining the way you process loans, or how you connect with consumers, as a leader you have to discover ways to help your business run more efficiently. You have to be aware that old marketing methods will likely not be effective with a new housing consumer. You have to devise a cutting-edge business approach in order to remain relevant and to thrive. Work together Being competitive is often encouraged in our society, especially amongst women. However, a good leader understands the power that’s created when there’s unity amongst mortgage professionals. A leader sees value in collaborating, so they’re willing to work together for the good of the industry. That’s why leaders must be willing to set the example of what collaboration and teamwork look like. In order for women to

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become key players in leadership roles, they have to build bridges with one another, instead of opposing each other. Women accomplish more when they work together and support one another. When one woman reaches out to help another woman, they both win. As you celebrate another woman’s accomplishments, you not only empower her, but you uplift women everywhere. It’s when women work together that they have the greatest impact. One woman can make a difference but together, women can rock the world. Be a mentor Ultimately, being an example of

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the leadership you want to cultivate is the best way to ensure it happens. It’s not enough to simply recognize that we need more diversity in mortgage banking, we each have to do our part to open up opportunities. As you assume a greater leadership role, reinvest what you’ve learned in grooming a new generation. If strong character, integrity, and assertiveness are what you aim to cultivate, then you must first demonstrate these traits. If you value innovation and cohesiveness, then show your team by being receptive to new ideas and creating an environment that facilitates working together. Building diverse leadership begins with mentorship. Creating the right leadership begins with being the kind of leader you want to see developed.

With more than 35 years of experience in mortgage, Patty Arvielo has risen to the top executive ranks and become a source of lending expertise for the industry. She is cofounder of New American Funding, and in addition to her role as company president, she continues to originate loans while managing all sales and operations.

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The Lost Leader By Eric Weinstein

enough or smart enough or were attentive enough to their needs. The truth hurts, but there you are. The true secret to getting referral business is to just be a good person. Take care of your clients, donâ&#x20AC;&#x2122;t rip them off, listen to their needs and do the very best you can for them, every time. That, more than anything will get you more business. If you canâ&#x20AC;&#x2122;t do that, then I donâ&#x20AC;&#x2122;t like you either.

Eric Weinstein worked in banking, on the commercial real estate side until 1991, when he fell in love with residential lending. In 1995, he started a small mortgage company in his basement called Carteret Mortgage Corporation, which in 2003, grew to one of the largest mortgage broker companies in the United States. Eric is semiretired, doing mortgages by referral only. He may be reached by phone at (703) 505-8692 or e-mail EWeinstein4U@gmail.com. 65

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with a drug would sway an entire group of skeptics,â&#x20AC;? said Silverman. â&#x20AC;&#x153;They would even sway a dissatisfied group of ex-prescribers who had had negative experiences!â&#x20AC;? I know, you are all thinking that this is ridiculous as you market on the â&#x20AC;&#x153;Book of Faceâ&#x20AC;? and â&#x20AC;&#x153;The Gooooooogle.â&#x20AC;? But how is that working out for you? Not such a great return on your money, is it? Donâ&#x20AC;&#x2122;t forget to factor in your â&#x20AC;&#x153;opportunity costâ&#x20AC;? of doing all this, also. Wouldnâ&#x20AC;&#x2122;t it be a better investment of your time treating your customer right to begin with? I have tried all the search engine optimizations, direct mail campaigns, lead buying and even a series of stupid, awkward YouTube videos. Once I tried advertising on grocery carts and the prescription bags you get at your local supermarket (if it had worked, you would be seeing it now in YOUR local supermarket). None of them were cost-effective for me. Maybe they will be for you, since you are a marketing genius (can you hear my sarcasm, or am I being too subtle). Do the math, properly utilizing your referral base is so good, itâ&#x20AC;&#x2122;s literally an undefined return on your investment. Say you make $5,000 on a loan and it costs you zero to get it. The number $5,000 divided by zero is literally â&#x20AC;&#x153;undefined.â&#x20AC;? Try it on your calculator if you did not take elementary school mathematics. Take that Stephen Hawking! Okay, here is a step by step plan on how to do it â&#x20AC;Ś First, be in the mortgage industry for 25-plus years. Then, do a good job while you are doing loans by learning everything you can and being really, really smart to help your customers. Then, ask for them to refer business to you because they are so happy with your service. Itâ&#x20AC;&#x2122;s that simple. What? You have not been in the business for more than 25

years? Then consider this your end goal. Advertise as best you can until you develop a word of mouth following by doing a good job. What? You HAVE been in the business 25-plus years and you still donâ&#x20AC;&#x2122;t have a strong following. Then let me tell you something your mother will never tell you. You are really, really bad at your job. No one likes you. No one is referring business to you because you were not nice

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ere is something this magazineâ&#x20AC;&#x2122;s sponsors wonâ&#x20AC;&#x2122;t tell you â&#x20AC;Ś not all marketing costs you money. Sure, if you are huge national mortgage company that must feed the beast with tons of fresh meat, then you are going to have to spend huge bucks advertising rocket ships on TV. But what about us little guys? We donâ&#x20AC;&#x2122;t have the budget, capacity or inclination to spend the big bucks that it takes to get a conveyor belt of new clients. Here are the economics of the situation. If you are a big box mortgage company with a large overhead, including a mega advertising budget, you are going to need lots of new borrowers under which to spread that cost. If you are small guy (say 5â&#x20AC;&#x2122;6â&#x20AC;?) and you have a low overhead (mobile home ceiling), you can get by with just a few borrowers every month. My father used to say in the 1960s, â&#x20AC;&#x153;There are three major forms of communication in the world: Telegraph, telephone and tell a woman.â&#x20AC;? Of course he was highly misogynistic, a racist and very anti-sematic â&#x20AC;Ś and we were Jewish! This is my long and complex business strategy for getting more business: â&#x20AC;&#x153;I do a good job.â&#x20AC;? All of my business comes from â&#x20AC;&#x153;word of mouth.â&#x20AC;? If you are a Millennial, donâ&#x20AC;&#x2122;t LOL or give me a frowny face emoticon. This is a real and valid marketing strategy. George Silverman, a psychologist, pioneered wordof-mouth marketing (en.wikipedia.org/wiki/Word-ofMouth_Marketing) when he created what he called â&#x20AC;&#x153;teleconferenced peer influence groupsâ&#x20AC;? in order to engage physicians in dialogue about new pharmaceutical products. Silverman noticed an interesting phenomenon, while conducting focus groups with physicians in the early 1970s. â&#x20AC;&#x153;One or two physicians who were having good experiences

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To Lead or Not to Lead ... Personality traits and qualities of a successful loan servicing manager and leader in the mortgage marketplace By Vincent Spoto

uccessful organizations have one thing in common: High caliber professionals capable of leading and managing human capital toward the achievement of stated goals and objectives. While not necessarily unique to the mortgage industry, today’s challenges faced by senior loan servicing managers are indeed daunting and require only the strongest managers to face them “head-on.” “Truly good managers are hard to find,” says the senior chief operating officer of a residential mortgage loan servicing organization associated with a large West

Coast-based commercial bank. He goes on to say that: “Given the increased regulatory maze that mortgage loan servicers are faced with today, only the strongest managers are able to attract, motivate and inspire the very best people to navigate the rough terrain. Ever increasing regulations often times result in increased frustrations for many servicing professionals—so much so that ‘throwing-in the towel’ is often seen by many as the alternative of choice. Motivating and inspiring staff at all levels to collaborate with borrowers on developing creative ways of staying in their homes by avoiding foreclosure is a ‘win-win’ for everyone.” Having very strong and capable leaders is one of the

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only real ways to ensure servicers can attract and retain good staff, forge operational consistency and plow ahead to be successful and separate themselves from the pack. Servicing managers today must direct an organization that provides “high-touch” servicing and collaborates with borrowers to retain homeownership. Faced with an ever-changing landscape highlighted by new rules and regulations (whether those espoused by rating agencies, auditors, the Consumer Finance Protection Bureau, or other consumer protection agencies), ever increasing demands placed by senior management to control costs and do more with less, demands associated with managing a diverse group of staff, and the ongoing theme of driving continuous process improvement, today’s servicing managers face a myriad of challenges they must tackle in order to be successful. Clearly, a key ingredient for success lies with people. Having the best managers who can attract (and retain) only the best staff is an obvious and seemingly simple solution. Sounds simple, right? Well for starters, senior leaders of any organization must hire only top managers that are capable of: l Recruiting only the best staff; l Fostering a culture of strong leadership; l Cultivating a disciplined set of standards; l Training and motivating staff to excel; and l Recognizing and rewarding top performing staff, while concurrently being able to deal directly with substandard performers (and make “tough” decisions accordingly). But hiring the very best requires investment; it necessitates spending money that many organizations are unwilling (or unable) to do. For this reason, failure rates for some organizations today continues to increase. As leaders, after recruiting the very best people, successful servicing managers must delegate tasks to the appropriate members of their respective teams, as well as place reliance on key cross-

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functional constituencies. The ability to delegate and depend on others is essential to building trust. However, successful servicing managers must always keep in mind that “responsibility is assumed and not assigned;” as such, managers must be cognizant to provide staff with a clear roadmap of stated objectives, but not a step-by-step list of ‘how-to’ tasks by which to achieve them. If managers find it necessary to ‘micro-manage’ their staff and lay-out every detail, they most likely have not hired the right people for their servicing organization. Yes, strong leaders must hire the right professional staff … but after hiring them and laying out objectives, it is critical to empower staff to take whatever actions are necessary to get to the “finish-line.” Strong leaders must build a high level of rapport and trust that will quickly permeate the organization. On the back-end, strong leaders must develop a robust system of metrics and Key Performance Indicators (KPIs) to ensure that performance of professional staff is in line with stated goals, objectives and expectations. In this regard, “inspect” (primarily through via the use of KPIs) vs. “expect” is critical. There are five core competencies that successful servicing managers must have. In addition to hiring the right people, they must have proven abilities to: l Foster a strong leadership culture; l Develop a set of disciplined standards and create a robust set of metrics to continuously monitor performance; l Delegate tasks and empower staff to build trust and inspire motivation; l Provide staff with the tools and training necessary to do the job; and l Recognize and reward superior performance, while simultaneously dealing directly sub-standard performers (as applicable). Delegating key tasks and establishing disciplined standards fosters a strong leadership culture within the organization. Additionally,

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done most optimally, but it also tends to discourage good people from joining (and staying with) the team. In addition, a clear and consistently administered reward and recognition system must be created along with defined protocols and standards for dealing directly with sub-standard performers (as applicable). Strong performers warrant recognition and rewards, while sub-

standard employees should be given direct (and sometimes harsh) feedback, as warranted— up to and including termination). By doing so, senior leaders quickly develop a reputation (both within the organization and across the marketplace) that makes others want to become part of and join their team. A reputation is quickly created that strong performers get rewarded and that “slackers” are given honest and direct feedback (and

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if necessary, removed from the team so as not to hinder overall performance). In addition to the above, other considerations for key leaders to have include being: l Confident in their abilities, with humble intentions; l Energetic and enthusiastic, as excitement is contagious; highly motivated and excited continued on page 68

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superior leaders must also be strong communicators; oral, aural and written communication skills are essential. Leaders must be able to clearly and succinctly describe what needs to be done and expected completion timelines. At the same time, strong leaders must be able to listen to others around them and process relevant marketplace inputs to adjust their plans accordingly. Communication of a common vision helps to ensure that everyone on the team is working toward the same goals. Strong leaders must also instill a sense of confidence and control. Remaining calm and confident permeates throughout the organization; staff take cues from their leaders, so it is critical therefore for leaders not to panic in times of crisis and be decisive. In addition, maintaining a sense of humor is a key attribute of any leader that is often sidestepped; by encouraging team members to laugh at their mistakes (while taking the matter seriously) instead of crying, a happier and healthier atmosphere is likely to exist where employees look forward to coming into work rather than dreading it. Commitment (getting down in the trenches and working alongside staff) is also critical in that it demonstrates a leader’s willingness to “get their hands dirty,” and shows that hard work is being done at every level. It fosters a reputation that leaders know the details of what the staff are up against, and that superiors are willing to work hard. By “walking the talk,” leaders are more apt to acquire the respect of their employees. Trusting and empowering others creates a true environment of mutual respect, thereby making it easier to talk openly and honestly with staff and gain the unsolicited support of key cross-functional constituencies (i.e. finance, legal, risk management, compliance, etc.). Finally, strong leaders must continuously provide staff with the tools and training necessary to do the job. Failure to do so not only inhibits the staff’s ability to get the job

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“Having very strong and capable leaders is one of the only real ways to ensure servicers can attract and retain

leaders electrify others— making top talent from other groups within the organization more inclined to join their team; Open-minded/open to change by soliciting and considering inputs and suggestions from others; Resourceful … i.e. leaders who do not know the answer to something should openly ask questions and create access to information; Driven to seek new knowledge and strive to become well educated on pertinent procedures, organizational norms, etc.—as furtherance of one’s knowledge will only enhance success in leading others; Knowledge of issues and information to increase success; Evaluative and remain open to continuously improving (i.e. constantly re-evaluating and changing approaches to

l l l

address programs and policies that are not working); Consistent, to command confidence and respect; Well-organized, on-time and prepared for meetings; Always positive, while maintaining an optimistic attitude and a high-energy level (i.e. sustain an office mood where there is a fine balance between productivity and “playfulness”); and Ethical and honest, always.

Finally, strong leaders should support prudent risk-taking and encourage staff to “think out-ofthe box.” Creativity should be embraced while never compromising quality. Trusting oneself and going with your “gut instinct” and intuition is often the best course of action. In doing so, managers should always be willing to seek input and guidance from team members, and continuously solicit constructive feedback to

good staff, forge operational consistency and plow ahead to be successful and separate themselves from the pack.”

continuously improve. The qualities and personality traits outlined above are important for leaders across any organization to have so they can successfully manage and direct

professionals toward the achievement of stated goals and objectives. In today’s everchanging and highly regulated mortgage finance area, this is especially important.

Vincent Spoto is founding partner and managing director of RRMS Advisors. He has more than 25 years of experience in the financial services sector. As founding partner and managing director, he provides advisory and consulting services relating to servicer surveillance, risk management, compliance monitoring, default management and asset disposition. Vincent can be reached by phone at (212) 843-9159 or e-mail VSpoto@rrmsco.com.

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Leaders Who Influence Are Leaders for Life By Shirleen Von Hoffmann

set them lose on the world to make your first priority, which is sales results, happen. If they are the ones making it rain, then its left to you to help manage the rain and their future growth. There’s a maturity to good leaders who are able to step aside and let others shine … all ego aside and full support of the team. But there are many traits it takes to be a great leader and I want to go over a few of those. It all comes down to a balance of how to influence others to be their best, work together for a common goal where everyone wins.

Shirleen Von Hoffmann is sales coach, mentor and owner of Home Builders Edge. She may be reached by phone at (866) 600-EDGE or e-mail Shirleen@HomeBuildersEdge.com. 69

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Leaders who influence others … l Care about the well-being and future of others. Their team is their work family member and when this care is shown, a team loyalty is returned that is rare to find in the workplace. l Create a culture, processes and systems that manage workflow and emanate a team, work family, fun, solid working environment. l Be dependable with your word and your support. Employees need to be able to depend on their Leader for many different things. They need to know you that support them and can be there for them. Especially in a crisis, when they come running, you need to be the one who has the power to alleviate the issues to make the service levels hit their targets. l Empower employees to fulfill their duties and their potential. This also means trusting they will do what they are meant to do at their full capacity. l Give that extra effort, even when no one is looking, when no one cares and when no one notices. You give because they know it will benefit your tribe. l Grow continuously to be better themselves, while seeking new thought, new directions and alignment in how they grow the team, the business and the office. l Learn from mistakes and align processes to perfection from learned errors.

feel safe and cared for. It’s makes the best employees. See the Future and be able to plan and prepare a path to lead to it, yet stay present and in the moment as well. Solutions based thought-no blame just provide the tricks to the fix and the systems correction later, so it doesn’t happen again. Service to others with humility, grace and honor. Setting your own ego aside and serving your team. There is higher honor than to lead, change and provide a safe fun environment for your team to thrive. Trust means having faith in the team and trusting them to do their job to the best of their ability. Everyone has every back in a solid team.

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became a licensed real estate broker in 1981. During my time in the mortgage industry, I have had very few leaders who I felt helped me grow, made me better or really took an interest in my future and my direction. It’s a problem in the mortgage industry and many others industries. It’s a rare thing to find because leaders have to wear a ton of hats and have to be good at many things. When I became a manager and then a national leader, I realized that to be very good and wellrounded I would need to either practice and get better at skillsets I didn’t have and be able to split myself in many different directions. Some days even with the best intentions, emergencies and problems arising would throw off any calendar or schedule I had intended in the beginning of the day. As a leader, I was expected to produce great results first and foremost. I needed to be a rainmaker, all while leading and managing a large national team. Being a rainmaker is a full-time job. It requires marketing, branding, meetings, proposals, travel, planning, selling, execution and management of the business you are developing. While trying to do that which is a huge job requiring a ton of time, in the background you are putting out day-to-day fires, creating systems, reporting, meetings, phone calls, marketing, e-mails, managing office and operation details, dealing with growth inside your team … I could go on. It’s hard to fit in growth for your team and a mentoring program with all of the other things that go on day in and day out. The real truth is most managers never get to this part because all of the other duties seem to come first. But the real truth is, when you commit to being a mentor and coach to your team first and foremost, your goals become easier. Your team ROI return on investment increases dramatically because you are training your army of business warriors. You mentor them, coach them, train them and

l Live authentically and in gratitude that you get to change lives for the better every day and get paid for it. l Manage with love, support and direction and in exchange you will have amazing loyalty from your team. l Mentor you can walk the talk, you can lead because you have walked in their shoes. You mentor and coach so others may follow in your stead l Recover quickly rebounding and recovery from error is everything and can be one of the most important things you do for your team. l Safety means having the ability to make workers feel safe. As though they are part of special family and you are the parent. Everyone wants to

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submission. They can help identify common pitfalls and how to avoid them. l Loan officers: Underwriters know the right questions to ask when reviewing a loan application. They know the industry’s borrower information requirements inside and out, and they also know what will be needed based on those answers. A loan officer can take the advice of what to collect up front for a smoother transaction. l Support staff: An underwriter knows what creates challenges and what solves them. With

wants to know, or hasn’t seen before. Teammates that turn to each other for support are stronger together. Consider creating a buddy system; pairing team members with varying experience levels. This can be a built-in education and support resource.

Making an Impact A company’s greatest resource is its people By Niki DeMarco-Nevarez

uilding a team, while keeping them challenged and engaged, can sometimes seem like a tough task to master. Keeping a team focused on the same goal is a target achieved only by a very few. The thought of taking success to the next level; incorporating the extended team of a broker’s office, real estate agent, and even a borrower may seem harder still. The good news is one party can make a difference that spans all the way from one end of the transaction to the other. Underwriters use their skillset to make loan decisions. Given their considerable experience, from ten to more than 20 years on average, they can also impact our industry in a myriad of other ways: they can share their insight with junior teammates; they can build confidence with outside partners through their ability to thoughtfully explain what it is that makes a loan whole; they can help be a communications hub with anyone who has less experience and needs more.

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Helping build a new workforce Basic training will never take the place of the case by case experiences that knit the fiber of our industry. It would be to any company’s advantage to have underwriters take some time to mentor the up-and-coming. We might agree that only experiences grow experienced individuals, and that can take a lot longer than we like. With the help of viewpoints that have often seen every circumstance you can imagine, we can create a next generation that will learn from their senior teammates and shorten this ramp-up time. Many organizations take advantage of this opportunity and turn to these experienced teammates to help educate clients and teammates alike; taking them out of their cubicle-centered focus and temporarily turning them into makeshift leaders. As our industry turns its attention to the Millennial generation, I think we have to step back a bit and take a look at how we are contributing to who

and what is next for our industry. It has been discussed at length by sources from every corner of the globe that these very bright and capable individuals have unique requirements to be successful, not least of which is a desire to make a difference. Experienced personnel, like underwriters, can offer the deep understanding that helps convey why our business has such a large and positive

“As our industry turns its attention to the Millennial generation, I think we have to step back a bit and take a look at how we are contributing to who and what is next for our industry.” impact on our world, and in return, Millennials can offer some fresh and unique perspectives, opening up new ways to do things. Connecting them with an underwriter early on is a great way to help put them on a successful career path. On whom can an underwriter make an impact? l Processors: Underwriters can help teachable and willing processors what to look for on documentation prior to

their help, one can learn how to catch red flags that would help the underwriter render a faster and cleaner decision. l Managers: Underwriters are a great resource to spot documentation trends early. These are good to share with the whole team. It can be a case study in who, what, where, why, and howwhenever a new challenge comes up. l Other underwriters: There is always something that a peer

Helping encourage new business through sales-confidence Operations teams had once been viewed as the antithesis of a sales force. Under current thinking, the opposite is true. Consider also how your current underwriter can serve as a major selling point. Underwriters who take phone calls, for instance, are highly valued for this additional service, over and above what their formidable decision skills provide. As part of the natural fluctuation of our industry, underwriters toggle between having long conversations with clients working step-by-step through every condition, and being sequestered behind Do Not Disturb barriers, cranking out decisions as fast as they can in an effort to keep up with demand. However, there is a middle ground. Successful lenders often still have a requirement that underwriters discuss every decision with clients, whether they be loan officers, processors or even a teammate. These discussions often create new opportunities to serve the lending community as a whole. Underwriting guidelines are not a secret, but the act of tying together chains of information and determining if it all “makes sense” is still as much an art form as ever. Online and easily accessible guides, along with plain language verbiage has made access to guidelines much more userfriendly. Determining how things will work and where guidelines can be less than clear takes a special skillset mastered by underwriters with extensive experience. Consider just how these actions can help build better teams and foster better relationships: l Thanking customers for timesaving packaging and clear and complete documentation: Everyone likes to hear that they are on the right track. A reminder that your clean loan will close faster is always a welcome one. Not having to make a call to the person who knows the story, but might have forgotten

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takes center stage. This is compounded with underwriters reaching the height of their careers and eyeing retirement. The fact remains that underwriters

are expected to continue to be a necessity, and the strongest will survive the longest. Those mentored and honed by them will ring in a stronger future still.

Niki DeMarco-Nevarez is regional VP of Operations for Mountain West Financial Inc. Niki is an industry veteran with more than 20 years of experience in the leadership and development of both retail and wholesale teams. Her previous roles included various senior management roles, as well as every operations role in the industry.

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Some folks think that underwriters are soon to be replaced by some relative of today’s automated underwriting systems which read credit tendencies, property databases, and online income and asset verifications. There is even advanced software that can read tax documents and calculate income for self-employed borrowers. It’s not a stretch to think that anything online can be automatically evaluated eventually. It’s true that these methods prevent much of the previous fraud we had seen, are faster, and are much more

objective, but these alone will not replace the underwriters of today. Underwriters are still vital to reviewing many facets of document evaluation. There are many nuances that simply cannot be fed into an algorithm. Some examples include checking for occupancy fraud, reviewing divorce papers, looking at photos, reviewing gift funds, and more. It is true that the evolution of our industry is marked with shrinking personnel as automation

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to share or document, is something for which every underwriter is thankful. l Giving constructive feedback and making suggestions on less than properly packaged loans: Basic human nature supports that if you ask a person for help you are more likely to get it than if you don’t. Underwriters might ask a processor for help on the next deal by possibly providing a detailed cover letter, or some documentation that the processor might know they were already going to need. l Sharing learning opportunities with the team as a whole, both internal and external: Maybe a less commonly used guideline changed, and it came up on your current loan. A quick reminder to the team as a whole might keep another teammate from overlooking it. Think of how many other ways one teammate might help another simply based on their day-to-day experiences. l Working through challenging files with an open mind, and an open phone line: When all else fails, pick up the phone! We are all interested in saving time, but suspending a file for a wish list is not going to do it. The phone is usually faster: Often saving valuable days. An underwriter can help less experienced submitters improve by getting on the phone and asking the necessary questions. This can prepare submitters for the next similar circumstance and give them experiences to build on. Finally, this can make a sound statement of the underwriter’s willingness to help everyone involved!

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Leadership: Can It be Home Grown? By Beth O’Brien s CEO of a $1 billion company, I have many constituents–from equity and bond investors to customers and employees. Yet, despite their many demands, the management issue that consumes most of my thought capital is not fundraising or client management but leadership. Specifically, how as an organization can we grow effective leaders of the business? Training managers is relatively easy. There is usually a welldefined process and a set of specific skills. You can usually distill most of it to a process flow diagram. Developing leaders is more complex. Why do I care so much about leadership? Because it is the key to scale. Without it, the organization can never grow beyond what one person can

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comfortably manage. Another way to think about it is: If management is the necessary blocking and tackling, leadership is the innovation and idea generation. You can never break through the spot you are in without the vision that leaders bring. I believe organizational growth is dependent on the organization’s ability to attract and grow leaders, not just managers. This is especially true in a newer company or with a new product like Single Family Rental (SFR) finance. If you are the CEO of a Fortune 500 company and you need a new leader for a business line or you want to launch a new product, you can retain a recruiter to specifically look for the leadership qualities you want. Maybe you can find the exact blueprint with someone who has done it before. Maybe you run a great selection process and the person you drop

“The other important opportunity to grow leadership in this business is to make sure your leaders present at conferences, are the stars of the Webinars and become known as the industry experts.” in from the outside is effective from day one and the product gets launched on time and under budget … or maybe not. Most of us don’t have the luxury of an expensive search and I would suggest it’s not always the best approach for the organization. Although a lot of literature on the subject says leadership is hard to teach, if you change your mindset, I think it can be done. Rather than trying to teach leadership, learn to coach for leadership and I think the results will astound you. Identify the leadership qualities your business needs and learn to allow your employees to develop into great leaders by emphasizing growth in those characteristics. To me, these are the five most important leadership qualities for my business and ideas to grow them: 1. Appropriate risk engagement To coach these skills out of employees, first focus on whether the organization is blocking any of these attributes. The path to take risk and own the outcome is not always available to the employee. Even if you think it is, they may not know it. The culture needs to

support it. You can support a culture of appropriate risk by giving people transparency on the numbers, allowing for mid-stream changes to a roll out and by allowing parallel projects and testing. Encourage dialog. Make sure it is two-way. Challenge yourself to support innovation by not being afraid of being wrong. Then measure the outcome quickly so that if you need to change course you can. A great example of this process are some of the social media ideas we have had. Every once in a while, one of us has a great idea and we follow up on it right away. However, sometimes we are wrong and the lead data or click through numbers just don’t show improvement. The key is to keep generating new ideas and then run with the ones that work. Don’t let the flops stop the ideas from coming. And parallel test. A Facebook flop could be LinkedIn gold. 2. Complete ownership Complete ownership is sometimes the most difficult for some managers but they can’t lead without it. An effective leader has a holistic view of her business or business line and never hides behind the answer that some

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things are beyond her control. None of us control everything that affects our businesses but we need to adjust to them anyway. True leaders control what they can but mostly manage through the things they can’t. If you run operations, you may not control production but you do have the ability to impact the customer experience; you are probably the best situated to help marketing understand the client’s needs because you know what problems you are solving and you control efficiency of all the product processes. If you are in capital markets, you don’t control interest rates, but you own the capital formation process and adjust pricing and structure to adapt to market conditions. 3. Vision Vision is what comes from total ownership and then taking a step back. If you are allowed truly to own your business, taking risks and making mistakes, you will come up with some great ideas. Then you will see things in a whole new light. Then you will begin to expand your vision. You will see

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the trends and you will focus on not just where the business is going but where it can go. You will learn from your mistakes. We could look at single family rental loans as a one-off response to institutions entering the housing market in the downturn or we could take a step back and see rental housing as a structural part of the U.S. housing stock without a bespoke financial product. You might have a different vision of what you are building if you are thinking more broadly and see the market as not just owner occupants and apartment dwellers, but a whole continuum of affordable housing around the country. 4. Clear communication skills You can have a great vision and be willing to take risks and own outcomes but if you don’t communicate it clearly, no one will follow. The greatest leaders are great communicators. This is perhaps the most straightforward area for coaching. Make sure your next round of leaders is constantly challenged on clear

written communication, using data to communicate ideas and presenting internally and externally. We make sure our business leaders drive our due diligence sessions when third parties come to the office. It’s a process to make sure people know they can drive and that we trust them to drive. I have even taken to stepping out casually when a business line is presenting to make sure the leader has the complete floor and that no one is deferring to me. Showing the depth of the bench is the strongest sign of leadership you can give. To scale, leadership needs to flow through the organization, not just sit at the top. The other important opportunity to grow leadership in this business is to make sure your leaders present at conferences, are the stars of the Webinars and become known as the industry experts. The person touching the

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client can often be the clearest voice on the problem your product is solving. If an organization has only one face, it is not developing any leaders. 5. Personal brand awareness The combination of these attributes will contribute to the individual developing his own personal brand. Your team members are empowered to take risk and so they bring their ideas to work on a regular basis. They own the outcome so you are willing to let them try new things. They develop a vision for the market and the products that don’t stop at the status quo. They articulate that vision in a way that we understand and we come on board with them. Then they start to think of themselves as the industry expert you helped them become. Now you have homegrown leaders and your business can scale.

Beth O’Brien is president and chief executive officer of Colony American Finance.

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Shut Up and Follow the Follower: Leadership Communication By Jerome Mayne e’ve all sat through presentations where the speaker is extremely qualified to speak on their topic. You know it’s true because it says so right there in the program. Their impeccable credentials are listed after their name: Professor, Expert, Ph.D., MBA, ABCDEFG, Grandpoo-bah … but they might as well be speaking “Wah-Wah.” You walk out of the presentation learning absolutely nothing. You are no better—in fact you’re worse than you were before you went in. Your IQ dropped a bit in those past 45 minutes and you walk around bumping into stuff. Are you this speaker or this presenter? Have you ever given a talk or led a meeting and watched your group leave covered with

stupid and confusion? If you have, it’s okay … there’s hope. Connecting with your group is a skill that can be learned. To set up the concept I am discussing, the speaker is ultimately supposed to be leading the audience while the audience follows along. You follow? Years ago, before I was a professional public speaker, I got involved in stand-up comedy. I started by going to open stage nights (where new comedians go to try out their stuff). Some comedians were very concerned about the exact wording of their material (also called “bits,” comedians don’t call them “jokes” any more). Over the course of several open stages, over several weeks, they would deliver their material every which way— sometimes just changing two words from one night to the next.

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Good comedians eventually learn that it isn’t their material that needs adjusting. It is their delivery and their ability to read the audience. They come to realize that, regardless of how good their material is, they were able to connect better when they listened, watched, and adjusted to the feedback from their followers—the audience. They learned to lead by following. On the other end of the spectrum, some comedians take the stage and spew out their brilliant material without paying attention to how the audience is receiving them. They get frustrated from night to night because, even though their material is solid, they don’t get laughs. They don’t lead well, because they don’t follow. Much of leadership communication is about following—or at least paying attention. Any audience, large or small, is living and breathing, and they will move and change right in front of you. You need to follow their ebb and flow, and have the humility to accept the fact that they are being honest. They are giving you feedback in real-time. In comedy, the feedback is obvious, the sound of laughter or the sound of crickets. Keep in mind … most members of an audience are not forced to be there. Even if they were, they’d prefer to get something out of it. The people in your group want you to succeed. They want to connect and follow, but it’s not their job to do that. It’s yours. More than 70 percent of my speaking business involves telling my story about getting involved in a white-collar mortgage fraud conspiracy in the 1990s, and the consequences that followed (just in case you’re wondering … it didn’t end well). Specifically, I am hired to speak because I have a story that my clients feel will have a profound impact on their employees or association members. My goal is make sure the audience feels what I felt when critical, life-changing decisions needed to be made in impossible situations. My job is to bring them with me. So, I listen and watch the whole time to make sure they are coming along on my journey. If I am not doing this, I am not following them at their pace. I know it’s not their job to keep up. So I do my job, I lead—by following.

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It might sound that slowing down is the key to making sure the follower is following. This however, is not the exclusive method. When I speak in front of a real estate or mortgage industry group I often have to speed up, because they usually understand the mechanics of purchase agreements and loan programs. But if I’m speaking at an insurance conference, they don’t deal with Fannie Mae guidelines, so I’ve learned to follow and lead at a different pace. These principles don’t just apply to professional public speakers in front of large audiences. They also apply when you are in front of a small group running a meeting or giving a presentation or sales pitch. The focus is on them, not on their brilliant PowerPoint. I am not there to simply talk through a list of experiences in chronological order. If that were the case, my client could just buy the book. It would save them a lot of money (not that writing isn’t a skill on its own). The story only has impact if I get the audience to see the world through my eyes by watching, listening and adjusting. When I owned my mortgage broker company back in the 1990s, I would invite wholesale reps to my weekly meetings. The purpose was twofold. The first reason was that I got free training for my employees. By having the rep talk about their loan programs, my people were exposed to the mechanics of guidelines and qualifying criteria—and new loan programs. This gave them a wider breadth of knowledge, which would allow them to prospect to a larger group of consumers, and therefore, more closings The second reason I had the reps come to my meetings was the free doughnuts. It always amazed me how some of the reps would present their loan programs. They simply handed out sheets that listed their current rates and terms. And then read them! It was the rep’s job to lead … to make that connection, not my employees’. Think this through. These meetings took place on Monday mornings. Loan officers came in groggy from the weekend. This wasn’t too difficult to observe. However, 90 percent of these wholesale reps simply read their awesome programs, as if it was my employees’ job to comprehend and be interested in what they had to say. The reps didn’t listen to their

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I know this stuff works. Over 15 years ago, stand-up comedy and improv were both my training grounds, and I’ve also seen the success of speakers and business professionals that I’ve mentored who have used the principle of follow the follower. In the meantime, I encourage you to pay attention to your audience and accept their feedback. But be careful, this feedback can be addicting. Before you know it you might be

headlining at comedy clubs across the country or you might be the next main stage performer on Saturday Night Live. Whether you are delivering a sober message,

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leading a team, or lighting up the room with laughter, your leadership communication will improve if you shut up and follow the follower.

Since 2001, Jerome Mayne has been an international public speaker on fraud and ethics in the finance industry. He is the author of the book, Diary of a White Collar Criminal and co-author of the real estate continuing education program titled, Mortgage Fraud and Predatory Lending–What Every Agent Should Know (Kaplan). Jerome may be reached by phone at (612) 919-3007, e-mail Jerome@JeromeMayne.com or visit JeromeMayne.com.

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followers. Meaning, they didn’t pay attention to the living, breathing people in front of them. They did not adjust their delivery, not in the slightest little bit, to communicate effectively or connect with their audience. I gave them the floor, the microphone so to speak, and they blew it. Then, I had to spend the time afterwards, explaining their new loan programs to my employees. Can you imagine this at a comedy club? If the club owner had to explain the jokes to the audience after the comic left the stage, the comic would be blacklisted and worse, the audience would never come back. When I coach a speaker or an executive who wants to improve their ability to connect with their groups, the first thing they usually ask is how they can add jokes, or comedy into their presentations. I don’t start with the words they need to say. I start with them. I help them discover who they are, their presence and how their audience will receive them. To practice this, I have them present in front of a group of children. The goal is to keep the focus of the kids as they glance around the room or tickle the fidgeting little rug-rat sitting next to them. The challenge is not change their material, but to adjust to the group you are trying to lead. It’s probably unlikely that your employees, co-workers or conference attendees are going to poke, prod or tickle the person sitting next to them. Well, I suppose I shouldn’t assume. Here is another way to practice following the follower. There are open stage comedy nights in just about every city in the country. Go to a few and watch for what I have been describing above. Instead of sitting back and enjoying the show, watch for the adept comedians—the good leaders—to see how they follow their followers. Additionally, many cities have improv classes. Improv, short for improvisation, is quite different from stand-up, but improv classes can be another great way to build communication skills. Improv is often better suited to the needs of working professionals because it is a more structured approach than the random sink-or-swim atmosphere of a stand-up comedy open stage. And an improv classroom can be a much safer place to learn because everyone starts out at roughly the same skill level.

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The Key to Effective Leadership: Humility First By David Lazowski & Amy Slotnick

f we were to highlight the characteristics of most great leaders, we would see that while they each have many unique traits, they all embody the ability to listen, to reason, to say no and to act with passion and compassion. As leaders ourselves, we believe leadership at its core requires selflessness and the desire to elevate those around you, along with a clear roadmap for success. At Fairway Independent Mortgage Corporation, we are continually reminded that in business we should operate by an idea suggested in a book called The Ideal Team Player. The author, Patrick Lencioni, suggested that one should be hungry, humble and smart. We govern our leadership daily on that principle. Being hungry in our business is crucial. A leader

must always be looking for ways to improve their business or team by utilizing company resources, exploring new industry tools and by consistently surrounding themselves with successful people they can learn from, and sharing that knowledge with their teams. Humble leadership means more than just being modest about one’s own success or importance. Humble leadership means you are continually showing that you are grateful for your team and, most importantly, that each team member is an integral part of your success. Lastly, smart leadership is not about being a subject matter expert. Being a smart leader means recognizing talent that already exists on your team, providing the support needed to allow people to step-up, and by delegating effectively.

“A leader must always be looking for ways to improve their business or team by utilizing company resources, exploring new industry tools and by consistently surrounding themselves with successful people they can learn from, and sharing that knowledge

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with their teams.” —David Lazowski, Branch Manager and Loan Originator, Fairway Independent Mortgage Corporation

As managers in the New England region, we are continually searching for talent to add to our ever-growing teams. We do feel it is important to note that not every person we hire or that succeeds in our organization must embody leadership potential, but instead every person must embody the desire to succeed both for themselves and for the team. Eric Brown, Fairway’s executive vice president of Business Development, has 30 years of experience in the mortgage industry and has worked closely with several CEOs over the years. He has helped us to understand and appreciate that there are no two years in the mortgage industry that are alike. As such, we are challenged with developing and maintaining a leadership philosophy that can survive the years of abundance, as well as the years that are lean. The only constant in this industry

continues to be change and therefore a unique or special talent is required to successfully lead. When looking for people who are “unique” or “special” to lead within our teams, we feel it is imperative to recognize those people who are consistently striving to better themselves and those they work with, and have the ability to meet any challenge. These people may have joined the organization five years ago or five months ago, and may be 25- or 65-years-old. We believe age and tenure do not give people leadership ability, but rather, experience and maturity do. Some are born with these traits while others develop them through strong mentorship and life-experience. Truly knowing the members of your team also gives you the ability to recognize leadership potential in those who may not see it in themselves. You may have to raise their hand for

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need to know that if they are wrong, it is ok and that their team will work to help them correct the mistake and learn so it does not happen again. Leadership is not synonymous with perfection and to expect as much will lead to burnout and an early exit. “I am a believer that good leadership is underrated,” Brown notes. “You see, you can have quality teammates and excellent systems but if you have poor leadership you will not survive, you may have a good year or two, but your long term prognosis will be suspect. At the end of every day, we as leaders must think about how we could have been a better teammate and how we could have made someone feel better about their efforts.” Leadership is not a popularity contest. When necessary, leaders must be prepared to make difficult decisions and be comfortable saying no. As Brown says, “Genuine leaders know when to show grace, and when they have to say ‘no,’ realizing that they will lose popularity, but gain respect.” As managers we are tasked with looking at things from a team perspective first. There are often times where we are approached with ideas from individuals that may benefit them but would be harmful for the team. In situations like these, we must explain why we

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“By demonstrating our trust and belief in the leaders we bring in to our teams, we help them gain the trust and support of those they are tasked with leading.” —Amy Slotnick, branch manager, Fairway Independent Mortgage Corporation

are saying no to hopefully help the individual understand even if they do not agree. We have found that the most obvious person in the room, the loudest, most daring, talkative, or popular does not always make the best leader. Rather, it is often the most humble, patient and thoughtful person. We’ve been fortunate enough

to work with and for incredible leaders throughout our careers. It is our belief that the best of the best understand the servant mentality. They are humble in spite of their success. If you have had the good fortune to work for a great leader, you can feel the impact they have in their speech and see it in their eyes.

77 David Lazowski entered the mortgage industry in 2005 after spending 12 years working on Wall Street. In 2008, he joined Fairway Independent Mortgage Corporation as a branch manager and loan originator. In 2007, Amy Slotnick joined Fairway Independent Mortgage Corporation as a loan originator. In 2014, she became the company’s Newton Mass. branch manager and has since grown the branch exponentially.

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them and encourage them to step forward. For example, a few years ago when we were going through reorganization and our region was growing, there was an opportunity for the development of a regional marketing manager position. We had an individual filling the role of marketing director on a branch level and when the regional position presented itself it was clear to us that she should fill the role. In this instance we recognized that this person had the skillset necessary to develop this role and excel in the position and saw the characteristics necessary to get the region behind her. By us raising her hand for this position, her job responsibilities were greatly enhanced and her impact on the entire region and company was significantly increased. As she celebrates her fifth year with Fairway it is shown daily how much she adds to our region. When hiring leaders from outside of the organization the process is similar. To put it simply, leaders attract leaders. You must first define the parameters of the job and identify what skillset is necessary to make the person successful in their day-to-day role. From there you must show that anybody joining the organization will continuously have support, a trusted sounding board when they need it, a platform for their strengths to shine and opportunities to elevate their skillsets. As managers we have to make sure whoever is joining the organization fits into our company culture, has a strong track record and most importantly will take the time to ensure every person they are leading, trusts them to do so. By demonstrating our trust and belief in the leaders we bring in to our teams, we help them gain the trust and support of those they are tasked with leading. Retention depends on two things; existing leadership and culture. Management needs to be collaborative, provide a strong example and work to make everyone in the organization better. Additionally, the environment must be one that makes a leader feel safe to lead. They

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Our Future Leaders and Character-Driven Leadership By Rear Admiral Tom Lynch, USN (Ret.) he mortgage industry–past and present–has its share of great leaders. Some have changed and even revolutionized the home financing business. Others, though perhaps less well known, lead teams and propel their organizations to success. These individuals deserve our recognition and appreciation. Yet, when mortgage industry leadership is the topic, I immediately think about the future and the next generation of mortgage professionals. Helping to develop talented, smart and eager men and women to become future leaders of our industry is truly a passion for me. This passion, combined with my enduring belief in the American Dream of homeownership, is what led me to take on a senior executive leadership role in the mortgage industry. I was eager to share my perspective on leadership, which is based on my 31-year career in the United States Navy, as well as more than a decade as an advisor in private-equity, venture capital and commercial real estate.

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Developing character-driven leaders through training and education Our future leaders are those who will keep the ship afloat, no matter what the ever-changing business environment sends our way. That is why I believe that education and training is imperative. We have an obligation to make sure the next generation of mortgage professionals has the requisite mortgage skills and knowledge. More important, we must ensure that future leaders do the right thing, at the right time, and in the right way–and inspire others to follow the same course. This is the essence of character-driven leadership. We often hear the phrase, “natural born leader.” It has a nice ring. But character-driven leaders are not born; they are developed. And developing character-driven leaders entails a

comprehensive effort and a formal program that prepares team members to reach their full potential as mortgage professionals and as leaders. For example, at NewDay USA we have devoted a great deal of energy and resources to create our character-driven leadership training program. All newly-hired team members complete a comprehensive formal leadership training program. During a 12month period, each new teammate participates in 60 hours of classroom instruction that focuses on core values, ethics-based leadership concepts and understanding of the uniqueness of the veteran community. This training is in addition to equally comprehensive mortgage banking-related educational sessions. In addition to classroom training, successful leadership development programs ideally consist of mentoring, coaching and exposure to accomplished senior leaders who share their experiences during forums, conferences or other speaking engagements. A well-designed program also features independent study, including a list of outside reading that complements and augments concepts covered during formal training sessions. Continuing education and advanced training Need I mention that leadership training and career development resources should also extend beyond the newly hired? Continuing education, advanced training and access to resources such as toolkits for managers are also hallmarks of a well-designed program. With all of these leadership training elements in place, you are far more likely to retain valuable men and women of character who live by your company’s core values. Even those team members who move on to other professions or other mortgage banking organizations become ambassadors for your company. The concern you have demonstrated for their

professional and personal development creates lasting respect for your organization. There are also very practical business reasons for developing leadership capabilities in the next generation of mortgage banking. The future leaders you have trained this year are prime candidates for promotion to supervisory and management roles next year and beyond. A pool of talented individuals who have been prepared for increased responsibilities will be ready, willing and able to meet new responsibilities and new challenges. Plus, in a meritocracy that promotes from within, you also reduce the energy and expense of recruiting for management positions. Preparing the leaders of the future requires an investment in time and resources. Done correctly, it is an investment that helps to ensure that your mortgage company succeeds and fulfills its mission. Ship, shipmate, self At the more philosophical level, developing leaders and creating opportunities are simply the right things to do. Allow me to illustrate how this works in practice. At my company, we primarily provide financial solutions for men and women who have served as members of our military. We consider it an honor to help service members and veterans realize the American dream. Our culture’s overarching philosophy is what we call

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Ship. Shipmate. Self. This philosophy evolved during my first command at sea of a naval warship, the USS Truett. We pursue our noble purpose much the same as a sailor at sea, who in every thought, word and deed must first think of their ship, their shipmates, and only then of themselves. With this philosophy, our customers– service members, veterans and their families–are our raison d’etre and always our top priority. Teammates are our second priority. Only when these have been addressed do we worry about our individual concerns. The result is: a culture of giving, not taking–and a company where character-driven leaders develop and excel. Hard-working, energetic and enthusiastic team members thrive when character-driven leaders are on deck. In a workplace culture where character-driven leadership is the norm, it becomes second nature for individual team members to commit themselves to making a positive impact, helping one another, and improving the lives of our military veteran customers. That’s truly a noble purpose. Leaders throughout today’s mortgage industry are passionate about helping homebuyers and homeowners realize the American Dream. Most consider this to be an honor and a privilege. By investing in the development of the next generation of mortgage professionals and leaders, that passion will continue to burn brightly.

“Our future leaders are those who will keep the ship afloat, no matter what the ever-changing business environment sends our way.”

Rear Admiral Tom Lynch, USN (Ret.) is executive chairman of NewDay USA, a nationwide VA mortgage lender focused on helping active military personnel, veterans and their families achieve their financial and housing goals. Admiral Lynch retired from the Navy in 1995. He was recognized as a U.S. Naval Academy Distinguished Graduate in 2010.

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Getting Past Change: Today’s Leaders Coping With Complexity By Laura Burke, MBA, MS, EA, CFE

hange is a dirty six-letter word. Many fear change, some will hide from it, others avoid change like the plague, but a true leader will accept it, adopt it and lead change? Who are you? Are you an agent of change or a caterpillar that sleeps through the change process? The mortgage industry is no stranger to change–the industry owns it! For the past nine-and-ahalf years, the industry has seen nothing but change since the 2008 financial crisis hit, which is nearly a decade ago! Here are a few highlights of changes in the industry currently through 2013 I found in the media over a five-year time span:

How did the industry survive all of these changes and more? With resilient leaders. What defines a leader’s character? A leader communicates effectively and directly, knows the importance of listening, has empathy to see the other person’s side, lives by their ethics, and moral compass. Co-authors of the book Resonant Leadership, Annie McKee and Richard E. Boyatzis found that Emotional Intelligence, aka “EI,” accounts for 85 to 90 percent of the difference between outstanding leaders and their average peers. They also found that the fact that EI is a determining factor in excellent leadership does not mean intellect is unimportant; leaders need to be smart in order to deal with the complexities and challenges organizations face currently.

“True leaders can establish and create an urgency to acknowledge the necessary changes, and demonstrate the ease of acceptance.”

Laura Burke, MBA, MS, EA, CFE is director of Tax, Global Tax Masters. Laura was one of six members nationally chosen for the IRS IRPAC committee. Burke is an enrolled agent, “permitted to practice” before the IRS. Laura has 20-plus years of experience in the mortgage arena. Her expertise is in federal tax law and corporate security policy. She may be contacted for more information on taxes, training, corporate security policies and fraud investigation, as she is also a certified fraud investigator. She may be reached by e-mail at LauraLynnBurke@gmail.com.

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2016 Even an instrument as venerable and seemingly stable as the 30year, fixed-rate mortgage can evolve in the face of changing market forces, demographics and demand–particularly when those changes are as rapid and transformational as those experienced over the past decade or so. The oversight required to quickly adapt to an increasingly complex regulatory environment

2013 New mortgage rules will influence qualification requirements and the types of mortgages that borrowers get. The regulations, drawn up in 2013 by the Consumer Financial Protection Bureau (CFPB) are now in effect. The gist of one of the main rules is simple: Lenders will be required to ensure that borrowers have the ability to repay their mortgages. In return, lenders will be protected from borrower lawsuits so long as they issue “safe” mortgages that follow guidelines.

top salesperson, the vice president? Leaders come in different shapes, and sizes, while wearing different hats in organizations. Change brings with it pain. Knowing this will help ease the tension the pain may cause initially, but with the initial pain of change will come growth. Boyatzis’s research indicates that change is not easy, and it does not happen by chance. Change is implemented. Harvard Business Press, in an article titled “Leading Through a Crisis,” recognizes the difference between managing and leading— managing involves coping with complexity and leading is coping with change. Managing requires leadership skills, and leading requires managing skills. Often times, a company will hire a change agent. A change agent is someone who promotes change, and guides. This can be someone within an organization or an outside person who can lead the changes required. Understanding the catalyst for change is a change agent’s responsibility. The use of a change agent can be useful, as they are not biased to old ways, and can see new methods being successful. The downside of using a change agent is they have no rapport or relationship ties with the workers going through the change process. Empathy is more difficult when the parties are not connected. Whatever capacity you are working in a loan broker, banker, manager, or leader accepting change is your first step in becoming the change agent for your team.

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2017 Recent reports from Freddie Mac show, mortgage interest rates rose sharply after the election, climbing above four percent for the first time since 2015. While still low by historic standards, interest rates are still about 50-basis points higher now than they were before Donald Trump won the election. According to Black Knight’s report, housing is less affordable right now than it was before the election. In fact, home affordability is now at its lowest point since June 2010. Per Black Knight’s report, the post-election interest rate bump means that the average home price is $16,400 more expensive for the buyer than it was before the election.

has many lenders challenged to profitably offer mortgages. The Mortgage Bankers Association (MBA) estimates that in excess of 50 percent of the cost to originate is compliance, production support staff, and technology infrastructure. The growing classes of digitally-enabled home loan borrowers, along with commodity loan products, pricing and lackluster customer loyalty are putting pressure on lenders to make the move to a more digital mortgage experience.

In today’s fast-paced environment, finding a leader who can adapt their style of leadership to the situation used to be called a situational leadership style. Only now, we are looking for the leader who can be situational, charismatic, pragmatic, transformational and more when required. We are looking for a chameleon leader, one that can change with a crisis, a strategy or required changes, in order to be an effective leader. True leaders can establish and create an urgency to acknowledge the necessary changes, and demonstrate the ease of acceptance. I like to call it the triple AAA; acknowledge the need for change, accept the change, and adapt the change to your business plan. Accept, Acknowledge and Adapt! The rate of change isn’t going to slow down anytime soon, having the right leadership aboard your team will help your company achieve the success it is reaching for. The right leadership will require creating a vision; building a team; preparing a plan; implementing the plan; reviewing the strategy; making necessary changes; empowering key individuals; managing the plan, and setting goals that are short-, mid- and long-term. The leader that knows what to do and how to do it … simply does it, by acting upon their skills and knowledge. In the mortgage industry, who are the leaders of your company … the managers, the

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NMP Mortgage Professiona CLASS APPRAISAL A Nationwide Appraisal Management Company

Alex Elezaj Chief Executive Officer

Class Appraisal Inc. BY PHIL HALL

n March 30, 2015, Troy, Mich.-based Class Appraisal Inc. announced the appointment of Alex Elezaj as its chief executive officer. What was somewhat unusual about this appointment was the absence of Elezaj’s previous involvement in the appraisal sector or any other aspect of the mortgage world. Elezaj was previously chief operating officer of Whitlam Group, a company in the printing and packaging industry. Before that, he was senior manager of Takata Corporation, a Japan-based global automotive supplier, where he played a key role in the development of its North American business growth. National Mortgage Professional Magazine recently spoke with Elezaj regarding his migration into the mortgage space and his views on the state of the industry.

What initially brought you into the mortgage industry? I’ve been in the industry for two years. Prior to this, I spent 15plus years in various sales, operations and leadership positions with a couple great organizations. The opportunity to be part of the Class Appraisal team came through some business connections via the Young Presidents Organization (YPO). When I learned about the business, I found it very interesting, and jumped right in– and it was the best professional decision that I have made. On the surface, manufacturing and mortgage appraisals have little in common. Is there common ground? It’s great fit. In the manufacturing process, you focus heavily on the overall quality and efficiency of the operations. I am a firm believer that great operations really drive the sales and growth process. The most critical part of the process is getting your team

onboard with the mindset to identify and implement organizational improvements. Being in the weeds of your business and constantly changing to get better is fundamentally necessary to be successful. How do you like the mortgage industry in general and Class Appraisals in particular? I absolutely love it. This is a great industry. I have met so many hard-working and incredible people, many whom have also helped coach me along the way. It’s amazing what you can learn about your business when you just listen to what your clients need are, and act quickly on implementing improvements. At Class, we focus on our people, which drives the entire process. I am a firm believer that happy team members equal happy clients, so we have a major focus on creating an awesome work environment and overall culture for our team.

What are some of the challenges you face in running this business? Our biggest challenge is to ensure that we have a continued team focus and strong attention to detail. Our clients want and deserve exceptional service throughout the entire appraisal process. Brokers, loan officers, and every person through the mortgage process has a lot riding on our ability to manage the appraisal process in the most effective and efficient manner. We do thousands of appraisals per month in all 50 states, but our team understands that our next order is never guaranteed. Whether it is a smaller broker that we are helping grow, or a top 10 lender that relies on us to manage a large amount of business, we treat every single order with a high degree of care and urgency. What is your view of today’s mortgage market? The mortgage market is very strong, despite the expected

volume declines in 2017. Although the refinance business is down, purchase business is strong, and should remain strong for the next few years. However, for us, our focus is on market share growth. There will be more than 10 million appraisals required this year, so there is a tremendous opportunity for growth. Our business was up over 90 percent in 2016, and we are up over 35 percent in 2017. Our continued growth will allow us to attract and retain great talent, invest in technology, and continue to build a platform of providing exceptional service levels. Is the appraisal business a career that is attracting a lot of new college graduates? Generally, it has not been an attractive career for new graduates. To be an appraiser, you need to have a couple of thousand hours of training, which has limited or no pay, so it presents many challenges. For us, we are

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currently working with several high-performing appraisers to identify a training and development program where we can help bring new talent into the industry via working for us as an AMC, then ultimately becoming an appraiser in the market. How does your company attract new young employees? For our company, we’re hiring about 10 to 20 Millennials a year. We attract people by having a great culture, and big growth. It is amazing to see how people react when they walk in our door, see all the great people, the cool office space, and see all the growth results. They are immediately bought into the company. Culture and big growth are the biggest drivers to getting great talent. For example, we have a culture where everyone has a seat at the table. There are no titles internally—titles are only used for communicating externally. Internally, they mean nothing to us.

That is not very common in any industry, is it? Not really, you must see it to feel it. We are very proud of our culture—it is our main driver of success. What is the housing market like in Michigan, particularly the Detroit market? In Detroit, we’re seeing a great resurgence. The entire metro Detroit is a wonderful place for the mortgage market … UWM, Quicken, Flagstar and several other great companies are headquartered here. We are all working with colleges and other educational institutions to get young people in the business, which will drive continued advancements and success. As for Michigan in general, housing values continue to rise. Michigan median home values are up over seven percent in the past year, and should continue to increase about three percent on average over the next few years.

What do you see as the nearterm future for your company? Continued focus on our people, client service levels, and technology advancements. Last year now, we were working with three of the top 10 wholesale lenders in the country—today we work with 15 of the top 20. Beyond wholesale, we are working with many retail lenders, including several banks and credit unions. Our future is extremely bright, as we continue to be rated the number one performing AMC by

many clients—the business flow has been excellent. With all of this work going on, how do you spend your leisure time? My leisure time is all about family and friends. I am very blessed to have a wonderful wife and four healthy kids, ages 16, 14, 12 and 10. Let’s just say there is a never a dull moment in our house. I love all sports, and really enjoy being part of my son’s travel baseball team.

Phil Hall is managing editor of National Mortgage Professional Magazine. He may be reached by e-mail at PhilH@NMPMediaCorp.com.

heard on the street

Advisors team to share best practices and create a first-class borrowing experience for our customers.” Flagstar will operate Opes Advisors as a separate division with its own brand, providing a strategic expansion to Flagstar’s retail home lending franchise. “When we were presented with this opportunity, we saw the added strength for both organizations and were amazed to find a like-minded company to preserve and enhance everything we at Opes Advisors had worked so hard to build,” said Susan McHan, CEO, co-founder and president of Opes Advisors’ Mortgage Bank. “For today’s market, Flagstar has the industry knowledge and resources to invest in and grow our people and the business. We’re confident our team, our mortgage advisors and our wealth advisors will not only find Flagstar culturally compatible, but also the team is genuinely committed to our continued success.”

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of the communities family,” said Mirkovic. Motto Mortgage Franchises Now Available in Five Additional States

Motto Mortgage, a member of the RE/MAX Holdings Inc. family of brands, has now included mortgage brokerage franchise opportunities in Georgia, Illinois, Louisiana, Nebraska and New Hampshire. “Motto Mortgage is an innovative concept that connects a real estate brokerage to a separate, franchised mortgage brokerage,” said Motto Mortgage President Ward Morrison. “Our goal is to streamline the barriers of entry to the mortgage lending industry for real estate brokers. I’m very encouraged by the steady expansion of Motto Mortgage and we’re pleased to bring franchise opportunities to these additional five states.” Mortgage Unlimited Opens Motto Mortgage officially New Branch in New Jersey launched in October 2016 and is expected to bring more choice and a better experience for consumers. The Motto Mortgage concept delivers a better consumer experience, as Mortgage Unlimited has opened a homebuyers can work with a real new branch in Paramus, N.J. estate agent to find a home and Under the lead of branch with a Motto Mortgage loan manager Steven Mirkovic, this originator to secure financing. will mark Mortgage Unlimited’s fourth major branch and third in Pavaso and MRG Partner the New Jersey region. Mortgage on Doc Prep and Unlimited has witnessed a Closing Solutions growing increase of demand in the Bergen County, N.J. area, and is excited to be joining this growing and thriving community. “The opening of the new Pavaso Inc. has partnered with branch signifies Mortgage Mortgage Resources Group Unlimited’s unique commitment (MRG), an attorney-owned to community, and is our reach at document preparation provider. bringing a better and more The partnership will integrate the simplified Mortgage experience to technologies of both companies, a larger number of people,” said allowing for a seamless transfer Justin Tagliareni, president and of prepared closing documents COO of Mortgage Unlimited. into the Digital Close platform Mirkovic has extensive electronically. experience in the mortgage Pavaso’s Digital Close is a industry, going back 10 years, closing solution that allows all formerly having worked at parties to the mortgage industry-leading mortgage banks. transaction to communicate and “At Mortgage Unlimited, we work in one central location. The take pride in offering our clients a platform also provides built-in uniquely personalized mortgage eSign and eNotarization experience, and with that we look capabilities that allow borrowers forward to embarking on this new to sign and notaries to verify and journey in Bergen County—where stamp documents digitally. The we hope to become a unique part Digital Close platform

accommodates paper, hybrid and fully digital closings. “MRG was looking for the best eClosing solution in the industry,” said MRG Managing Director Michael Riddle. “After evaluating several providers we selected Pavaso as our partner to provide a world-class Digital Close platform to our clients.” The Pavaso Digital Close platform facilitates electronic communication and collaboration between the real estate agent, lender, title/settlement agent and borrower, making the entire closing process easier by providing one digital location to deliver any document, especially the Loan Estimate and Closing Disclosure, along with educational materials. Mark McElroy, president and CEO of Pavaso, said, “MRG delivers a world-class electronic document preparation solution, which makes this integration an easy decision. We look forward to offering the collective benefit of our systems to mortgage providers seeking to move forward into the digital transformation.” NAHREP Announces New Board of Directors

The National Association of Hispanic Real Estate Professionals (NAHREP) has announced the installation of Leo Pareja as its 2017 national president and Daisy Lopez-Cid as president-elect. Prior to their new leadership roles, Pareja served as 2016 president-elect and Lopez-Cid was a two-term member of the national board. Pareja has been in the real estate industry since 2002, and has been recognized as one of the top producing agents in the world. Pareja’s company was ranked as the number five team in the country by the Wall Street Journal in 2011, and he was the “#1 Agent” among NAHREP’s Top 250 Latino Agents in 2013. Pareja is currently CEO of the software company, Remine. “Leo Pareja is a world-class talent and one of the best young leaders in the entire industry,” said NAHREP 2016 President Joseph Nery. “I am confident that under Leo’s leadership,

2017 will be a transformational year for NAHREP.” Gary Acosta, co-founder and CEO of NAHREP, said, “Daisy Lopez-Cid is one of the most loyal and hardworking leaders anywhere in the country. She has been instrumental in the creation and development of the NAHREP Coaches Program and her leadership helped forge the path for a successful chapter expansion in 2016.” ATTOM to Offer Clear Capital’s MLS Analytics

ATTOM Data Solutions and Clear Capital have that nationwide Multiple Listing Service (MLS) analytics powered by Clear Capital will now be available for licensing to ATTOM Data Solutions clients. According to the companies, the MLS solution will complement current real estate data available for licensing through the ATTOM Data Warehouse, a national property database covering more than 150 million residential and commercial properties. The companies also stated that the MLS reports from Clear Capital are “fresh within 15 minutes to an hour and cover 85 percent of the nation, growing weekly,” while each record includes “the unique ATTOM ID, which allows bulk licensing customers to conveniently link the listing information to the myriad public record data and other real estate data available at the property level in the ATTOM Data Warehouse.” “This partnership forms a perfect union between two organizations focused on providing data and analytics solutions to inform decision making,” said Kevin Marshall, president and co-founder of Clear Capital. “By adding Clear Capital’s MLS solution, ATTOM can now provide its customers with the most comprehensive and compliant coverage available in the marketplace,” said Rob Barber, CEO at ATTOM Data Solutions. continued on page 90

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sk any mortgage industry participant to guess why the cost to originate a mortgage loan grew to in excess of $8,000 per loan in the post Dodd-Frank era and you’ll get a single answer. Everyone knows that complying with the many new regulatory and investor requirements has sent costs through the roof. But quantifying the real impact of compliance on the lending industry has been more difficult. Trade organizations, like the Mortgage Bankers Association (MBA), routinely survey their members to arrive at benchmark operating costs. It was the MBA that first revealed overall costs to originate in excess of $8,000, though now that number has fallen to just below $7,000 per loan. Even so, with MBA membership skewed toward the larger institutions, there were many questions about the impact for compliance on other firms. To find the answers, National Mortgage Professional Magazine teamed up with real estate services provider WFG National Title Company to survey a broader segment of industry players over a two-year period. Our goal was to gain insight into the real impacts of compliance, both on costs and lender processes employed. In all, we asked more than 10,000 mortgage professionals to take part in an online survey produced and distributed by ColemanWick, an independent marketing research firm based in Cleveland, Ohio. Only lenders and originators were eligible to participate—vendors, service providers and consultants were not provided access to the survey if they identified themselves as such. Of the qualified respondents, 58 percent identified themselves as “lenders” (whether bank or non-bank) with the remainder identifying themselves as “originators” or with brokerages. As expected given the general size distribution of firms in the industry, the survey population leaned to the smaller to mid-sized lending segment with 62 percent of respondents reporting less than $100 million in 2014 loan originations. Only one percent originated more than $100 billion, while 26 percent did less than $25 million in business in 2014. All lending channels (warehouse, correspondent, wholesale, retail and other) were represented in the survey as were lending institutions of all types (credit union, bank, non-bank lender).

impact on their businesses [see Figure 01]. Nearly 70 percent responded with a “4” or “5,” the two strongest responses indicating substantial increase to the cost of origination. Nearly 90 percent chose “3” or above. As we said, everybody knows compliance is driving costs, but by how much? So we asked our respondents to estimate the percentage by which their costs have risen as a result of compliance requirements, comparing costs post 2013 to those before.

Figure 02

Nearly half (45 percent) estimated cost increases of 11 to 30 percent as a result of new regulatory and compliance requirements, although many respondents skewed closer to an increase ranging from 11 to 20 percent [see Figure 02]. Seven percent of those responding felt their costs had increased between 71 and 100 percent due to compliance demands. Seeing costs double is a definite warning flag, but we wanted to find out if these costs might be offset by other revenue. We needed to understand what the overall impact was on their revenue. To find out we asked respondents to estimate, as a percentage of their company’s annual gross revenue, the approximate annual costs expended for the company’s combined efforts for compliance, internal audit and quality control. Figure 03

The increasing cost of compliance We wanted to know much regulatory changes and new compliance requirements had impacted our respondents’ cost to originate a mortgage, focusing primarily on changes made since 2013. We asked respondents to rate the impact on a scale of “1” to “5” with “1” representing no increase to the cost of origination from regulatory changes and “5” representing substantial increase to the cost of origination because of regulatory changes. Figure 01

Nearly a quarter (23 percent) of the companies we surveyed estimated that over four percent of their firm’s gross revenues were put toward the costs of compliance, internal auditing and quality control [see Figure 03]. Another 30 percent of respondents believed those costs to fall between two and four percent of their annual gross revenues.

Only 2 percent of respondents felt that, in general, regulatory changes and requirements to lenders and originators had little to no

The reason everything takes longer At least some of the increase in compliance-related costs that lenders are seeing has to do with increasing cycle times. Compliance slows down the process.

of ndustry Costs The vast majority of originators and lenders we polled [see Figure 04] felt that increased regulation and compliance requirements have had some impact on the time it takes to originate and close a loan, although 21 percent of those polled questioned whether or not those same requirements have increased the time required to fund. Most said the increase was a matter of days but nearly 20 percent suggested that compliance concerns had added weeks to the overall process. Figure 04

The baseline for the time estimates was a 15-31 day timeline that the majority of lenders said was the norm prior to 2013. It’s interesting to note that when asked for specifics about the cause of these delays, while the majority of lenders focused on the CFPB and other government bureaus, a not insignificant portion of respondents focused on increased investor requirements, citing stricter standards, QM rules and tighter underwriting.

whether they used in-house or independent contractor resources to assist with compliance, most indicated they were using a mixture (about 43 percent). Only six percent said they only used contractors or external resources. More and better technology With 13 percent of survey respondents reporting that mid-level managers (directors, managers, team leaders, etc.) were spending at least half of every day dealing with compliance-related activities, the need for better technology was abundantly clear. We wanted to know whether lenders had added compliance automation or revised existing systems after 2013. We also wanted to know what this had cost them. Most lenders and originators were compelled to make some level of investment in technology to become or remain compliant. Nearly 85 percent said they had added new technology of some kind, with costs ranging from $5,000 to $100,000 for 54 percent of them. About one-third of respondents reported spending more than that, ranging up to $2 million. Most lenders, 73 percent according to the survey, required help from third-party technology partners to bring their new systems online, further increasing their costs. The complete survey report is available and tells the story of increasing costs to originate mortgage loans tied directly to increasing compliance demands for lenders of all sizes, selling all products through any channel. It’s a new world lenders are working in and there is no sign that compliance will become less burdensome in the future. While the current administration has promised to reduce federal regulation, it’s first attempts to do so with the Affordable Care Act have been ineffective. At the time this survey was conducted, the CFPB has not yet implemented it’s TRID rule. We did go back to our respondents with questions about TRID’s impact on their operations. For those answers and more from this groundbreaking report, get a copy of the full report by logging on to NMPMag.com/WFGSurvey.

The answer for three-quarters of respondents was a simple “yes.” Almost 75 percent of respondents reported adding 20 or fewer contractors or employees to meet new compliance needs. Over 71 percent of respondents said they increased their in-house compliance staff by 50 percent or less. However, when asked

Rick Grant is NMP special reports editor-producer for Mortgage News Network. He may be reached by e-mail at RickG@MortgageNewsNetwork.com.

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Figure 05

NationalMortgageProfessional.com

More hands on deck We wanted to find out what impact compliance was having on the way lenders staff their enterprise, both with internal FTEs and external partners [see Figure 05]. We asked whether they had added employees since 2013, including outsource vendors, temporary workers and contractors, who were dedicated to the interpretation and implementation of new mortgage lending rules and regulations. To get to the heart of regulatory compliance impact, we asked lenders to focus on those additions who were intended to deal specifically with requirements handed down by the CFPB, FDIC, FHFA or other federal enforcement agencies and state regulators affecting their businesses.

By Rick Grant

NMP’s

oneyhouse is a family-owned company that traces its roots to a single mortgage bank founded in 1997 in Cayey, Puerto Rico. Today, it is Puerto Rico’s most prominent mortgage banking entity, and it is seeking to expand its operations across the mainland U.S. National Mortgage Professional Magazine spoke with Ralph Rosynek, senior vice president of the company’s U.S. division and chief information officer, about this company’s role in the reverse mortgage market.

What makes your company different from its competitors? The background of Moneyhouse. The company is based in Puerto Rico, and that cultural background has migrated to the U.S. The company is a well-established, 20-year-old, privately-owned mortgage banking business that is in the forward and reverse mortgage business and operates as a direct lender in addition to being a Ginnie Mae issuer for both loan product types. It also offers retail, wholesale and correspondent opportunities for consumers and

business partners. Unique to Puerto Rico is the fact that all transactions are done in Spanish. Many aspects of the Puerto Rican business side have been able to assist our U.S. expansion and create an important niche for us—we have a fully bilingual staff with Spanish documentation options and support. There is a large percentage of Hispanic potential borrowers and homeowners in the U.S. that are underserved, largely because of language. We can work with Hispanic borrowers and help make mortgage transactions much more comfortable for them in addressing their needs. How many people work with Moneyhouse U.S. and what does the company look for in potential employees? We have approximately 12 people working at Moneyhouse U.S., and it is a growing staff—we are looking to expand immediately, especially in our Orlando office. We have a great interest in individuals with reverse mortgage experience and because of our forward and reverse capabilities are also looking for MLO’s who would like to be able to originate both products. Being bilingual is something that is very attractive to us

but not a requirement due to the other markets we serve. What impact will the rise in interest rates have on the reverse mortgage industry? On the reverse mortgage product, it will largely have no impact. The real impact that is more important will be the shift from the number of potential loan officers who become interested in the product to support their business and volume replacement as refinance volumes decline. The overall benefit to the consumer is a widening of the talent pool to help educate seniors about the product and provide access. What do you see as the near-term state of the reverse mortgage market? In today’s market, the reverse mortgage ultimately benefits neighborhoods and the overall housing market by allowing for borrowers to remain in their homes, allowing for the purchase of a new home and many times not requiring them to access other taxpayer funded programs for housing assistance. For today’s Baby Boomers, there is also an opportunity to add value to their

retirement strategy by utilizing a reverse mortgage as a component of financial planning. We are looking at approximately 8,000 to 10,000 people becoming eligible for reverse mortgages every day. We recently celebrated the one millionth reverse mortgage originated in the U.S. since the program’s inception. However, the market share for this product is maybe two percent to three percent of eligible senior’s at best. What can be done to grow the market share for reverse mortgages? Our company and other industry participants are out there continuing to educate older homeowners on the misconceptions surrounding the product and show how it really works as a benefit to a number of senior needs. A lot of lingering fears have been instilled by incorrect reporting and distorted facts over the life of the product to date. As lenders, we are constantly working to reinforce positive values. Yes, this is not a program designed for every senior, but for many it should be seriously looked at as a component of an overall financial strategy for seniors.

Legends of Lending By Phil Hall

What is your company’s current marketing strategies? On the U.S. side, our Orlando, Fla., group works with central Florida homeowners offering forward and reverse mortgage products seniors on a retail basis. Nationally, our marketing strategy as we expand is on a wholesale and correspondent business-tobusiness basis. In Puerto Rico, our staff of 100-plus includes 40-plus loan officers working on a face-toface retail basis with borrowers across the island in addition to a wholesale and correspondent business-to-business team assisting other lenders on the island. Some reverse mortgage companies in the U.S. have television advertising featuring well-known celebrities. Are you planning to follow that approach? Probably not in the U.S. In Puerto Rico, we have a well-known celebrity associated with the company who is recognized throughout the island: Gilberto Santa Rosa, affectionately known as the “Salsa King,” who has represented Moneyhouse for many years.

Well, that sounds a lot more interesting than Tom Selleck, no? (Laughing) I think he is more interesting than Tom Selleck, but I am not certain if he would play as well as Tom in Des Moines! How does your company approach social media? We just started looking at that on the U.S. side, as a means of prospecting for new consumer and business clients. It used to be that companies heavily relied on lead generation, but we’re not sure that methodology works today as a long-term solution and continue to explore alternatives to reaching borrowers. Also, social media is being used more and more by the younger tier of reverse mortgage borrowers. I am not certain that anyone is tapping into social media to its fullest advantage in the reverse mortgage market. What is your company’s growth strategy for the next 12 months? I think that we will have a year of growth ahead of us in the reverse product. The financial planning community and the real estate community recognized the results of

“Today’s digital age movement requires us to be much more resourceful in how we market and make products available. The greatest future impact could be the paperless environment combined with new product and methodology innovation.” Ralph Rosynek, Senior Vice President of the U.S. Division and Chief Information Officer, Moneyhouse marketing education for consumers. These groups are asking a lot more questions about the reverse product. Also, we are now facing another set of challenges, greater efficiencies and access to product. Today’s digital age movement requires us to be much more resourceful in how we market and make products available. The greatest future impact could be the paperless environment combined with new product and methodology innovation. For some companies, this will be their greatest hurdle. I would not be surprised if we see an increase in

the workforce needed to make a digital product successful as the reach across geographical markets also requires a greater talent pool to provide an exceptional level of customer experience. If your company could be described in a single word, what would that word be? “Innovative.” We celebrate our 20th year in business this year, and our goal is to look at things differently and provide a different perspective with more options and choices to our potential customer market. That will keep us fresh for the next 20 years.

Phil Hall is managing editor of National Mortgage Professional Magazine. He may be reached by e-mail at PhilH@NMPMediaCorp.com.

heard on the street

Mortgage Professionals to Watch l Paramount Residential Mortgage Group (PRMG) has announced two new hires, Emily Vondrak as director of strategic operations and collateral management, and Valerie Chopra as director of capital markets. l Comergence has added Don Scales as manager of its Business Development team, bringing more than 11 years of

customer acquisition strategies, and building and maintaining relationships with leading loan origination systems and industry settlement service portals. mortgage industry experience and l National Credit-reporting 25 years as a sales professional. System Inc. (NCS) has l Castle & Cooke Mortgage has announced that Lisa Binkley has announced that Adam Thorpe, the joined the company as senior vice company’s president and chief president of business operating officer, has been development. appointed to Fannie Mae’s Singlel Former 26-year LPGA great Family Risk Advisory Board. Patricia Hurst has joined Bay l ClosingCorp has announced that Equity Home Loans as a loan Craig Austin has been named officer in the company’s Danville, senior vice president of Sales and Calif. office. Business Development where he l Silver Hill Funding, a division of will be responsible for leading the Bayview Loan Servicing LLC, sales organization, developing

continued from page 82

l 90

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has announced the addition of Art “Ski” Swiatkowski as vice president of Business Development. In his new role, Swiatkowski will create new opportunities for growth and strengthen relationships among residential originators across the country. Secure Insight (SSI) has announced that it has hired mortgage industry veteran Carolyn Covington as its new regional sales director based in California, focused on expanding SSI lender clients throughout the Western United States. The StoneHill Group has announced the hiring of T. Gail Callueng as the company’s new quality control manager, where she will be responsible for directing quality control services for The StoneHill Group, as well as overseeing QC reviews on behalf of clients. Essent Guaranty Inc. has announced that Emil Emanuel has been named vice president and national accounts manager where he will be responsible for driving business development and delivering private mortgage insurance solutions for clients across the mortgage lending industry. Inlanta Mortgage Inc. has named David Williams as regional vice president of Business Development. He comes to Inlanta Mortgage with more than 30 years in the mortgage business. Movement Mortgage has hired Michelle Donnelly as its first chief commercial officer. LoanLogics has announced that veteran mortgage credit executive Elliot Salzman has joined the company in the role of chief credit officer, where he will be responsible for enhancing and overseeing the credit policy functions of the LoanLogics LoanHD platform to deliver a more comprehensive approach to ensuring loan quality.

Your turn National Mortgage Professional Magazine 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: 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.

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Are the Millennials Finally Becoming a Force in Homeownership? By Phil Hall

or what seemed like the longest time, the housing industry has pegged Millennials as the next great force of purchasing power. Andy W. Harris, president of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and treasurer of NAMB—The Association of Mortgage Professionals, identifies this youthful demographic as his largest customer base—as well as being, ready, willing and able to take advantage of the Portlandarea’s market. “They are better prepared than most would think,” said Harris. “They have set conservative budgets, have downpayments, are financially responsible, have access to more data and are more tech-savvy. They are much more educated when they arrive for the initial meeting. They are the driving force for us.” But is Harris experiencing the exception rather than the rule? In June 2016, a survey conducted the National Association of Realtors (NAR) found 52 percent of respondents lamenting that their student debt levels will prevent them from homeownership for more than five years. Broken down by demographic and debt amount, the greatest level of pessimism on potential ownership involved older Millennials between the ages of 26 to 35 (79 percent) and those with $70,000 to $100,000 in total debt. Over 80 percent of Millennials also said their delay in pursuing homeownership was caused by an inability to save for a downpayment. “A majority of non-homeowners in the survey earning over $50,000 a year—which is above the median U.S. qualifying income needed to buy a single-family home— reported that student debt is hurting their ability to save for a down payment,” said NAR Chief Economist Lawrence Yun. “Along with rent, a car payment and other large monthly expenses that can squeeze a household’s budget, paying a few hundred dollars every

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month on a student loan equates to thousands of dollars over several years that could otherwise go towards saving for a home purchase.” What’s going on here? Are the Millennials finally making it into the housing market? Or are they still being held back by financial considerations, most notably, the burden of student loan debt? The answer, it appears, is that both questions can be answered affirmatively. Yes, the Millennials are buying homes. But, at the same time, this is not happening on a broad national scope. According to Zillow, Millennials made up 42 percent of homebuyers last year, more than any other generation, But some markets seem to have better luck with Millennial homebuyers than others. A recent study from earlier this year by LendingTree found Pittsburgh at the top of the list of major markets where Millennials are looking to buy a home, with 48.4 percent of all purchase mortgage requests coming this demographic. Washington, D.C. was the second most popular market, with 46.8 percent of all purchase mortgage requests generated by Millennials, and Des Moines, Iowa, was in third place at 46.4 percent. The average home loan amounts sought by Millennials in those markets were $201,921; $381,110 and $173,439; respectively. “Thanks to a stronger jobs market and overall economy, the 35-and-under crowd is growing up,” said Doug Lebda, CEO of LendingTree. “Although Millennials have been slow to the real estate market, the appeal of homeownership remains strong, and we’re beginning to see more activity with this generation. Rising home prices and high student loan debt are still affecting the purchase power of Millennials, but as more student debt is repaid and the job market improves, we’re likely going to see more young buyers in this spring homebuying season than in previous years.”

In some pricey markets, aggressive Millennials are on the house hunt. LendingTree also found that 44.3 percent of home loan requests in San Francisco came from Millennials, with the mortgage requests averaging $528,761. But not every Millennial can carry a mortgage for more than a half-million dollars. A separate study released in April, the Bay Area Council found 46 percent of Millennial respondents were considering an exodus from this metro area, citing the very high cost of living and housing. This was the largest age-based demographic to acknowledge a possibility of leaving based on financial pressures. “I would say the thinking amongst younger folks that the Bay Area doesn’t hold their future is really settling in and that’s concerning,” said Bay Area Council President Jim Wunderman. Not surprisingly, many Millennials are flocking to areas where housing is more affordable. A pair of upstate New York markets, Albany and Buffalo, turned up in a recent Realtor.com survey of the markets with the highest levels of Millennial homeownership, due primarily to their affordability level. Realtor.com noted that Buffalo was the nation’s top metro area with the most affordable home prices relative to salary, at 22.7 percent, followed by Albany where people only use 27.3 percent of their income on a home. By comparison, buyers use 30 percent of their income for housing-related expenses In Salt Lake City, which ranked at the top of Realtor.com’s list for Millennial housing presence, where buyers use 30 percent. “High job growth in markets such as Orlando, Seattle, and Miami, and the power of affordability in places like Albany and Buffalo are making these markets magnets for Millennials.” said Javier Vivas, manager of economic research for Realtor.com. “But what really stands out is that all these markets

already have large numbers of Millennials, which translates into strong populations of Millennial homebuyers.” Nonetheless, the concept of Millennials as being automatically attracted to the big cities is not correct—at least according to Zillow, which determined that almost 50 percent of Millennial homeowners live in the suburbs, while 33 percent live in an urban neighborhood and 20 percent live in a rural area. Of the Millennial buyers who moved in the past year, 64 percent stayed in the same city, while only seven percent moved to a different state. As for the concept of new homebuyers aiming for the traditional starter home, Zillow found that Millennials are spending $217,000 for a home that is about 1,800-square-feet, which similar in size to the homes being sought by older generations. “Millennials have delayed homebuying more than earlier generations, but don’t underestimate their impact on the housing market now that they’re buying,” said Jeremy Wacksman, Zillow Group’s chief marketing officer. But how they’re buying deserves attention: Roughly onethird of mortgages used by Millennial homebuyers originate with the Federal Housing Administration (FHA). “As the purchase market heats up, we will continue to watch the FHA purchase trend amongst Millennials,” said Joe Tyrrell, Ellie Mae’s executive vice president of corporate strategy. “It is not surprising to see Millennial borrowers leverage FHA loans because they typically offer lower downpayments and lower average FICO score requirements than conventional loans. As more Millennials enter the market, we expect to see the popularity of FHA loans continue to increase.” But what about that student debt problem? Even the Federal continued on page 94

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continued from page 92

Reserve noticed this was a problem—William C. Dudley, president and CEO of the Federal Reserve Bank of New York, told a conference in early April that student debt “has increased more than fivefold over the past 14 years” and continued to put undue pressure on the housing plans of Millennials. “Our analysis reveals that those with significant student debt are much less likely to own a home at any given age than those who

completed their education with little or no student debt,” he said. “This finding is consistent with other past and ongoing research here at the New York Fed that points to the potential longer-term negative implications of student debt on homeownership and other types of consumer spending. Of course, homeownership is more than just consumption—it has historically been an important form of wealth accumulation. For a large share of households, housing

equity is the principal form of wealth. Thus, changes in the way we finance post-secondary education could also have important implications for the distribution of wealth.” Dave Gillihan, a Portland branch manager for Churchill Mortgage, has witnessed young doctors and attorneys who have been prevented from obtaining a home loan due to their student loan debt. “It is the desire of the Millennials to push ahead and follow the trend of generation after generation,” Gillihan said. “People out here want to achieve, but many simply don’t qualify.”

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And with home prices in a seemingly endless ascension, many Millennials feel that they need to be part of a two-person team in order to access homeownership—and being married to each other does not necessarily factor into the equation. A recent study from Zillow has found almost 15 percent of all homebuyers between the ages of 24 and 35 during 2015 were unmarried couples, up from 11 percent in 2005. In some markets, there is a greater prominence of unmarried couples buying residential property: In Washington, D.C., for example, almost 16 percent of all young homebuyers in 2015 were unmarried couples, up from 7.5 percent 10 years earlier. But while more unmarried couples are buying houses, fewer singles are entering into homeownership, as roughly 25 percent of all 2015 homebuyers ages 24-35 were single, down from 28 percent in 2005. “Buying a home is a big part of The American Dream—equally shared by Millennials and Baby Boomers alike—but it’s becoming extremely difficult to make it work on a single income,” said Zillow Chief Economist Svenja Gudell. “Many singles looking to purchase a home on their own may not make enough money to afford or qualify for a mortgage on their dream home. That makes buying a home with a significant other even more appealing, even if marriage isn’t quite part of the picture. Simply put, buying a home is much easier with two incomes. Assuming home value growth continues to outpace income growth, I imagine this trend will continue.” But whether they are coming in tandem, through the FHA or in unlikely metro markets, the Millennials are coming. Vantage Mortgage Group’s Harris believed the Millennials, who are looking at the big picture and their own situations and are recognizing that time right to lay claim to the American Dream. “Some speculate the Federal Reserve’s raising rates is causing this, and maybe some have secure jobs now as the economy improves,” Harris said. “And the cost of rent is a big part. Our market’s rent is not cheap and affordability is very challenging. They may be thinking: Why pay someone else’s mortgage when I can pay for my own?” Phil Hall is managing editor of National Mortgage Professional Magazine. He may be reached by e-mail at PhilH@NMPMediaCorp.com.

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APRIL 2017 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

Why Prospects Shop and Ho

How to Make Them Use You By Brian Sacks

had a very interesting phone call the other day from a client who was referred to me by his accountant. He owned a home with his girlfriend and they had just broken up. He need to refinance and told me who had referred him. The conversation went much like all conversations go with me asking him the value of the home, the amount of the mortgage(s), the current rates. I also asked him about his income, credit, debts and goals.

I then “Eduscared” him … What the heck is “Eduscaring?” I

Why shop rates and points? The truth is that we all look alike. We all have pretty much the same programs, and generally, we all have rates that are within 0.125 percent of each other. I actually created a term for this: “The Head of Lettuce Syndrome.” If there are two heads of lettuce and they are exactly the same, most people will choose the cheapest one. To consumers, we all look alike, we all sound alike, and truthfully, we all act alike and our ads are all alike. But there are several ways to stand out and some tactics of persuasion you can use to stop those rate shoppers dead in their tracks. So grab your highlighter right now and let’s go through a few of them. Expertise As I mentioned, one of the biggest challenges we have is that we all look alike to consumers. The only question they know to ask to compare us is “What is your rate?” When you are an expert in a niche,

Time investment This is a sneaky little persuasion tactic, so keep this one to yourself okay? I always prefer to meet with my clients in person, either at my office or at the office of a real estate agent. Many of the loan officers in my office and many of my Top Originator Secrets members just chalk it up to me being “Old School,” but nothing could be further from the truth. I like to make my clients invest their time into the pre-approval process. I want them to provide me with their bank statements, income information and have their credit run. I want to meet them and have them provide this information to me personally. This investment of time and effort on their part makes them much less likely to shop and compare rates. Most people will take the easiest path, and since they have now met me and given me their information, they are 100 times more likely not to shop. Celebrity and social proof What I am about to share with you is probably not something you will easily admit to, but that doesn’t make it any less true. People like to

work with celebrities. Your job is to make yourself a celebrity in your area. How do you become a local celebrity? l Write articles for your local publications l Have a podcast and promote it on LinkedIn and Facebook l Be a guest on local radio shows l Host your own radio show l Go on local TV or be interviewed as a resource on the mortgage and real estate market People love to work with celebrities and they love to brag to all of their friends and celebrities about working with one. It makes them feel special. When they feel special, they almost never ask about rates and points. The best script of all … This is a big idea that I use daily with my prospects and is easy to implement if these other suggestions scare you. When a client calls me to ask for rates and points as a pre-qualification before they have found a home, I never quote rates. The conversation generally goes this way, so you might want to copy this down right now. This generally happens after we have gone through the prequalifying conversation about income, assets and credit. Prospect: “What are your rates?” Me: “Rates on this program have been running between 3.75 and 4.0 over the past 60 days. The market has been a bit volatile and bouncing around. When you find a home and the seller has signed your contract, we can lock in your rates. Rates change daily, so hopefully we will be on the lower end when you are ready and we can discuss it then.” The power of this statement is that it makes the person feel like you have, in fact, given them the information they requested, but in fact you really have not told them.

Brian Sacks is a nationally-renowned mortgage expert who has career closing of more than 5,924 transactions for more than $1 billion. He has trained, consulted and coached tens of thousands of loan officers and company owners over the past 31 years on how to close more loans, make more money, and still have a life. Brian is the host of “Top Originator Secrets,” which can be seen weekly on Mortgage News Network and on his blog. You can get more information and grab your free report on “How to Get Agents Chasing You” at TopOriginatorSecrets.com.

n National Mortgage Professional Magazine n APRIL 2017

I gave him our rates and a long answer … So I gave him our rates, and he proceeded to tell me he had gotten a better price from another lender. Now I hope you realize that on any given day, you will never consistently have the best price in the market. I asked him if rate was his only concern when choosing who to proceed with. He said yes. So I immediately told him not to use me or the other lender. Instead, I told him to go online and search for the cheapest rate. He would then be able to complete the application himself and pray that he truly would close on time if at all.

But then I added one additional powerful thought … Ready? You might want to even write this one down … it’s that good! During our discussion, he told me he owned an engineering firm locally. So I asked him how his clients decided? Was his firm the cheapest in town? If I was going to build a building, I would want competitive pricing, but more importantly, I would want a firm that was competent and would do a good job. This truly startled him and he said, “Yeah … I guess you are right. Let’s make application.” Sometimes it’s important for your buyers to “hear” it themselves in a way that makes sense to them. You have my full permission to try this and send me an e-mail at Brian@TopOriginatorSecrets.com to let me know how it worked.

this question totally disappears. The key is having expertise in programs that most other lenders are not offering. You could also have expertise in working with a certain group that few others can help with. Our company is one of the top lenders in the nation for 203k loans. This loan is very involved and one that buyers rarely shop. Another niche is that of Boomerang Buyers who have had a bankruptcy or foreclosure. There are programs from several sources that offer buyers loans one day after a bankruptcy or foreclosure. These buyers just want to make sure you are for real and that they can come up with the money down and have comfortable payment. Your mission right now is to pick a niche, become the expert in that niche and let everyone know about your expertise.

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Then he asked the dreaded question … I will share a great script with you soon in this article, but I answered his question with a few additional questions. When are you looking to settle? Do you both have an agreement in place for the buyout? Has she agreed to it? One important way to divert attention away from the rate question is to continue to ask good, solid, probing, questions. Towards the end of our conversation, he finally came back around to what my rate was, so I had no choice but to answer it. Before I gave him the rates though, I asked him if he was ready to move forward today since rates and points change daily. He said yes.

actually love this term I created so much I may have it trademarked. “Eduscaring” is providing a borrower with all of the education they need to make a proper decision on who to work with. It involves explaining points and APRs. It involves discussing fees. It involves discussing business and MSA relationships. It basically provides the buyer with all of the information they need to make a proper decision and not get taken advantage of by the tactics of some lenders.

Smaller Lenders T Streamline Your V

APRIL 2017 n National Mortgage Professional Magazine n

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t has been said, “The price of doing the same old thing is far higher than the price of change.” Similar thinking was likely behind the passing of the Dodd-Frank Bill of 2010, which was intended to make lending, including mortgages, fairer and more transparent for consumers. Unfortunately, the “invisible hand” of law of unintended consequences proved true. Despite what may have been the best of intentions, the actual impact of the new regulations has made the mortgage process more complicated and challenging, particularly for lenders. Regulations created by the newly formed regulator, the Consumer Financial Protection Bureau (CFPB), spawned by DoddFrank caused lenders to reassess how they acquire third-party services. The responsibilities placed on a lender by these new regulations have resulted in significant costs to the lender associated with maintaining relationships with third-party suppliers. Many have concluded that they need to reduce their

number of vendors as a practical consideration. In doing this, lenders have partnered more closely with their suppliers–improving transparency, leveraging spend and cutting compliance costs. l In efforts to improve transparency in the process, the lender must now understand the third-party costs at a level they did not need to in the past and often disclose that information available to the borrower. The appraisal process is a prime example. Lenders must now understand what third-party appraisal management companies (AMCs) pay their appraisers, because the lender is responsible that fees are Customary and Reasonable per Dodd-Frank and many other state regulations. l Much of the money spent on mortgage originations was historically narrowly focused and did not provide much ongoing value. To better leverage spend, lenders are finding new ways to partner with their supply chain to get more out of the money

they are spending to originate loans. l As the costs of regular due diligence on third-parties are often so high for the lender, it makes more sense for the lender to partner with service providers that can offer several different solutions to meet their needs. It comes as no surprise that it is more efficient to perform diligence on a single provider of five services than on five single service providers. Post Dodd-Frank, with new and more stringent audits, regulators came to the conclusion that lenders were outsourcing critical functions without adequate oversight to ensure work was done to comply with regulations and at reasonable costs, which are often passed on to consumers. This resulted in additional regulations requiring lenders to institute more extensive third-party oversight and procurement programs. Larger lenders were the first to react, consolidating vendors by function. These lenders primarily looked to work with vendors with

multiple product offerings to support various touch points in the origination and servicing process. As a result, these lenders are reducing the amount of firms they manage, thereby minimizing the cost of diligence oversight and reducing compliance risk. So, what is the impact on the marketplace today, and what effect does it have on small- to mediumsized lenders? The movement toward “less is more” when it comes to vendors is extending beyond large banks and mortgage companies, making it imperative now more than ever for vendors to provide a wider breadth of services. For lenders, beginning to take a closer look at partners, consider this: 1. Choose players that can support multiple products or services in both the manufacturing and servicing process. Often larger vendors have business lines and solutions that support all stages of the lending process. 2. Rethink your approach. Don’t buy services from vendors; develop solutions with key supplier partners. Consider the

Take Note: Vendor Strategy By Bill Sullivan

dialogue, and listens to its partners. Your supply chain can and should be your eyes and ears in the market place to help you keep pace with the latest trends and best practices in the marketplace.

1. Leverage technology platforms at your disposal. With the rising generation of first-time Millennial homebuyers, it’s critical to take note of the role technology plays in the homebuying experience from discovery to close. 2. Look for ways to expand your partnership through integrations and workflow collaboration. Often vendors can provide best practices from other lenders they may work with. Consider the resources that a vendor can provide to you as well. 3. Choose vendors and utilize

their supply chain primarily or exclusively in a rigid procurement process focused on minimizing price. By not engaging suppliers to fully understand the business problem lenders often deprive themselves of tremendous subject matter expertise and industry experience that could yield an even better solution than the best price model. The best way to work with vendors is to utilize them as partners. Not only will this help to reduce costs, it also provides a better and more transparent experience for customers. The strength of a long-term partnership helps lenders deliver the best results for their customers.

Bill Sullivan is Stewart’s executive vice president of the Enterprise Revenue Group–Lender Sales. Connect with him on LinkedIn.

n National Mortgage Professional Magazine n APRIL 2017

Just as critical as choosing the right business partner for your company is how you work with them. It’s up to you to get the most out of these relationships:

them as partners for a mutually successful relationship. Often vendors are selected based on a single need or single price. Look at your vendors holistically and as enterprise partners, not simply for one immediate need. 4. Rather than asking “what does it cost?” consider asking “how can we solve for this business need?” Often a good supplier has encountered the same critical business issue that you are trying to solve. Your business partners will be grateful for this approach too. By engaging them collaboratively you help them “up their game” and improve their understanding of current business issues. Unfortunately lenders too often engage with

NationalMortgageProfessional.com

experience of the partner and expect more from them. What approach do they take to solving issues? The first answer should never be “no.” Partners should be open-minded and willing to invest time and energy to explore remedies and options. 3. Work with vendors that have scale and breadth and can execute at a local level. As the market gets more competitive, the borrower experience becomes a critical competitive issue. Finding the right mix of cost-efficient and customercentric can be a challenge. Suppliers with large scale and robust compliance discipline can seem attractive from a price perspective, but often the borrower experience suffers at the hands of such large companies. 4. Relationships are key. Partner with a vendor, leverage that vendor’s knowledge, expertise and market reach to help grow your business and make connections for you. Choose partners that allow for access to leadership and responsive, open

outstanding

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m o r t g a g e

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Freedom Mortgage Wholesale Division

REMN Wholesale

856-626-2595 www.freedommortgage.com

732-738-7100 www.remnwholesale.com

Freedom Mortgage, proud that its Fishers, IN facility was awarded a 2016 Top Workplace honor by The Indianapolis Star, is recruiting experienced top-producing Wholesale Account Executives nationwide. Interested in growing with us? Apply today!

Although REMN Wholesale is part of a large corporation, it feels like a “Mom and Pop”-style company. We encourage our team members to grow and we train and promote each individual to their full potential. As a national company, REMN provides many opportunities for employment from coast to coast.

PRMG

United Wholesale Mortgage

1-855-PRMG-FAN! (855-7764-326) www.PRMG.net

800-981-8898 www.uwm.com/careers

Built by originators for originators, PRMG was born from a vision of creating a company with a unique culture focused on the successes of the producer. We understand what it takes to be a successful originator and cultivate new business every day.

Voted the #1 place to work in Metro Detroit, UWM is looking for A players to join our talented team. Our business is driven by our culture, and our people are our greatest asset. If you’re looking for the opportunity of a lifetime, apply to UWM today!

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We are pleased to announce a new package that will give your firm the recruiting tools to instantly shift your recruiting efforts into high gear using a multimedia, market-saturating approach. We will utilize the most successful methods that our clients have been using to find, identify and place top talents for your company. We have designed these packages with the concept of making it less expensive to give you the ability to reach more people. NATIONAL MORTGAGE PROFESSIONAL MAGAZINE 1220 Wantagh Avenue • Wantagh, New York 11793-2202 516-409-5555 • Fax: 516-409-4600 • E-mail: advertise@NMPMediaCorp.com

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NATIONAL MORTGAGE PROFESSIONAL MAGAZINE’S

calendar of events

APRIL 2017 Thursday, April 20 26th Annual Rocky Mountain Mortgage Lenders Expo Sports Authority Field at Mile High 1701 Bryant Street Denver, Colo. For more information, call (303) 773-9565 or visit CMLA.com.

Wednesday-Friday, May 17-19 American Mortgage Conference 2017 Raleigh Marriott City Center 500 Fayetteville Street Raleigh, N.C. For more information, call (800) 662-7044 or visit NCBankers.org.

Friday-Wednesday, April 21-26 NAMB 2017 Legislative & Regulatory Conference JW Marriott Washington, D.C. 1331 Pennsylvania Avenue NW Washington, D.C. For more information, visit NAMB.org.

JUNE 2017 Thursday, June 1 California Mortgage Expo Crowne Plaza Hotel & Commerce Casino 6121 Telegraph Road Commerce, Calif. For more information, call (860) 922-3441 or visit CAMortgageExpo.com.

MAY 2017 Tuesday-Thursday, May 9-11 2017 Great River MBA Conference The Peabody Hotel 149 Union Avenue Memphis, Tenn. For more information, call (901) 321-6702 or visit GreatRiverMBA.com.

Tuesday-Wednesday, May 16-17 2017 NRMLA Western Regional Meeting & Expo Hyatt Regency Huntington Beach Resort & Spa 21500 Pacific Coast Highway Huntington Beach, Calif. For more information, call (202) 939-1783 or visit NRMLAOnline.org.

JULY 2017 Monday-Tuesday, July 10-11 Ultimate Mortgage Expo Hotel Monteleone 214 Royal Street New Orleans For more information, call (860) 922-3441 or visit UltimateMortgageExpo.com.

Friday-Sunday, August 18-20 Originator Connect Planet Hollywood Las Vegas Resort & Casino 3667 Las Vegas Boulevard South Las Vegas For more information, call (860) 922-3441 or visit OriginatorConnect.com. Thursday, August 31 UAMP Expo 2017 Salt Lake Marriott Downtown at City Creek 75 South West Temple Salt Lake City For more information, call (904) 651-3143 or e-mail valsaun@gmail.com. SEPTEMBER 2017 Wednesday, September 6 Texas Mortgage Roundup–Dallas DoubleTree by Hilton Dallas Near the Galleria 4099 Valley View Lane Dallas For more information, call (860) 922-3441 or visit TXMortgageRoundup.com.

Friday, September 22 2017 NW Mortgage Expo & Real Estate Summit MOTIF Seattle Hotel 1415 5th Avenue Seattle For more information, call (206) 484-6442 or visit MyWAMP.org. OCTOBER 2017 Friday-Monday, October 13-16 NAMB National 2017 Rio Las Vegas 3700 West Flamingo Road Las Vegas For more information, visit NAMB.org. Sunday-Wednesday, October 22-25 Mortgage Bankers Association 2017 Annual Conference & Trade Show Colorado Convention Center 700 14th Street Denver For more information, visit MBA.org. NOVEMBER 2017 Monday-Wednesday, November 13-15 2017 NRMLA Annual Meeting & Expo The Palace Hotel 2 New Montgomery Street San Francisco, Calif. For more information, call (202) 939-1783 or visit NRMLAOnline.org. DECEMBER 2017 Tuesday, December 5 2017 California Holiday Networking Party The Atrium Hotel 18700 Macarthur Boulevard Irvine, Calif. For more information, call (516) 409-5555.

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. *Looking for additional exposure at key industry events? Call 516.409.5555, ext. 4 to discover how to maximize your event coverage.

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Tuesday, May 16 NYAMB’s 29th Annual Wholesale Conference & Trade Show The Woman’s Club of White Plains 305 Ridgeway White Plains, N.Y. For more information, call (914) 315-6644 or visit NYAMB.org.

Thursday, June 15 Mortgage Bankers Association of New York’s 2017 Annual Strategic Real Estate & Lending Summit The Stewart Hotel 371 7th Avenue New York, N.Y. For more information, call (516) 997.3707 or visit MBANY.org.

Thursday-Friday, August 17-18 Mortgage Star Conference for Women Planet Hollywood Las Vegas Resort & Casino 3667 Las Vegas Boulevard South Las Vegas For more information, call (860) 922-3441 or visit MortgageStar.biz.

Tuesday, September 19 Colorado Mortgage Summit Denver Marriott Tech Center 4900 South Syracuse Street Denver For more information, call (860) 719-1991 or visit COMortgageSummit.com.

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Thursday, May 11 New York Mortgage Expo Hilton Long Island/Huntington 598 NY-110 Melville, N.Y. For more information, call (860) 922-3441 or visit NYMortgageExpo.com.

Tuesday, June 13 The Great Northwest Mortgage Expo Embassy Suites Washington Square 9000 SW Washington Square Road Tigard, Ore. For more information, call (860) 922-3441 or visit GreatNorthwestExpo.com.

AUGUST 2017 Monday-Tuesday, August 7-8 California Association of Mortgage Professionals Presents Summer CAMP 2017 Coronado Island Marriott 2000 2nd Street Coronado, Calif. For more information, call (916) 448-8236 or visit TheCAMPSite.org.

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LENDERS COMPLIANCE GROUP 167 West Hudson Street - Suite 200 Long Beach | NY | 11561 | (516) 442-3456 www.LendersComplianceGroup.com The first full-service, mortgage risk management firm in the country, specializing exclusively in mortgage compliance. Pioneers in outsourcing solutions for mortgage compliance. Our Compliance Team Will: Leverage your existing employees. Improve your productivity. Collaborate on projects. Make the most of your current technology. Bring innovation to your company. Be a strong cultural fit. Free you to focus on your core competencies. Give you access to world-class expertise. Lower your total operational costs.

EDUCATION

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BROKERS COMPLIANCE GROUP 167 West Hudson Street – Suite 200 Long Beach | NY | 11561 members@brokerscompliancegroup.com www.BrokersComplianceGroup.com Division of Lenders Compliance Group, BCG is the first and only mortgage risk management firm in the U.S. devoted to supporting the unique compliance needs of residential mortgage brokers. Leveling the Playing Field for Mortgage Brokers Low Cost Monthly Membership Includes: • Free Weekly Hotline • Access to Subject Matter Experts • Policies and Procedures • Webinars *Special Pricing* • Quality Control • Exam Readiness • Licensing • Legal Reviews

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TagQuest www.tagquest.com 888-717-8980

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REMN Wholesale www.remnwholesale.com 866-933-6342 REMN has FHA, USDA, 203k, VA and Conventional solutions to fit the needs of your customers. But, at REMN, our most valuable product is our people. The REMN Sales and Operations Teams give you - and your loans - the time and attention that you deserve. Even better, at REMN, same-day approvals are guaranteed.* You can rely on us to get the little, yet vital, things taken care of on time. Interested in joining our Wholesale Division? Send your resume to aerecruiting@remn.com

n National Mortgage Professional Magazine n APRIL 2017

PRIVATE FINANCING

HomeBridge Wholesale iis a national wholesale lender offeering Conventional, G J b and dR i Loans. L W are comm mitted to providing Government, Jumbo, Renovation We ng, unique product the highest value to our clients through competitive pricin offerings, superior customer service, and state-of-the-art technology.

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TagQuest is a full service marketing firm created specifically for the ever changing mortgage business. We have tested and proven campaigns for FHA -VA - HARP - CONVENTIONAL loan types. TagQuest knows what it takes to generate quality leads whether through direct mail marketing, telemarketing, internet leads, data lists, tracking systems, or any combination thereof. TagQuest will brand your company, prepare targeted marketing campaigns that generate interest in your company, and most importantly, show you how to turn sales leads into repeat customers.

5 Park Plaza, 10th Floor Irvine, CA 92614 www..HomeBridgeWholesale.com m

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WE Vis â&#x20AC;&#x2122;RE G it J oin RO Ang WI N elO ak. G! co m

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ÂŠ Angel Oak Mortgage Solutions LLC NMLS #1160240, Corporate office, 980 Hammond Drive, Suite 850, Atlanta, GA, 30328. This communication is sent only by Angel Oak Mortgage Solutions LLC and is not intended to imply that any of our loan products will be offered by or in conjunction with HUD, FHA, VA, the U.S. government or any federal , state or local governmental body. This is a business-to-business communication n and is intended for licensed mortgage professionals only and is not intended to be distributed to the consumer or the general public. Angel Oak Mortgage Solutions LLC is an Equal Opportunity Employer and does d not discriminate against individuals on the basis of race, gender, color, religion, national origin, age, disability, veteran status or other classifications protected by law. 1-11-17 HPG.