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MLS LinkTM is a "set it and forrget it" feaature
table of
32
N A T I O N A L
What Chocolate and Peanut Butter Can Teach You About Growing Your Mortgage Business By Bubba Mills
A U G U S T
42 Lykken on Leadership: Seven Ways Business Process Improvement Can Save Time By David Lykken
46 First Lady of Housing By Jill Kravig Burns
2 0 1 7
M O R T G
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V O L U
A SPECIAL FOCUS ON “CERTIFICATION & EDUCATION”
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Why Training Fails and How to Fix It By Nick Mantia...................... 57
M R
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How Using a Learning Management System Aids Compliance Training Efforts By Jeff Kelly ............................................................ 60
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Balancing Conventional Forms of Training with Non-Traditional Methods By Wendy Krieger.................................... 62
D
Getting Staff Up to Speed on Ever-Changing Industry Regulations and Mandates By Brett Shively and David Shoemaker........................................................................ 64
B
Training Is Not One-Size-Fits-All By Jennifer Jensen...................... 66
O
Unlocking Your Business Growth With Women-Owned Business Certification By Desirée Patno.......................................... 68
T
Sustaining Business Growth Through Employee Development By Damian Maldonado........................................................................ 70
T
Don’t Underestimate the Power of a Training Work Culture By Frank St. John.............................................................................. 72
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T
F
Training Tomorrow’s Workforce, Today By Rick Arvielo................ 74
T S
Can’t Think of a Title By Eric Weinstein............................................ 76
B
FEATURES Non-QM Borrowers Are Diverse and Able to Pay By Tom Hutchens................................................................................ 8
H
The Elite Performer: Emotional Selling vs. Confident Telling By Andy W. Harris, CRMS.................................................................... 8
C
N N H O N N
Recruiting, Training and Mentoring Corner: First Education and Then Certification By Dave Hershman...................................... 10 3 Points With Mat Ishbia.................................................................. 16
54 Take-It-or-Leave-It Arbitration: Banning Consumers From the Court By Jonathan Foxx
It’s About Quality, Not Quantity!...................................................... 18
V I S I T Company
Web Site
O U R
A D Page
Angel Oak Mortgage Solutions............................ www.angeloakms.com .............................. 65 & Back Cover Athas Capital Group.......................................... www.athascapital.com .................................................... 7 Brokers Compliance Group.................................. www.brokerscompliancegroup.com .................................. 96 Caliber Home Loans.............................................. www.caliberwholesale.com .............................................. 27 Carrington Mortgage Services, LLC...................... www.carringtonwholesale.com ................................ 9 & 64 Citadel Servicing Corporation.............................. www.citadelservicing.com .............................................. 53 Document Systems, Inc./DocMagic...................... www.docmagic.com ...................................................... 11
80
Franklin Flood.................................................. www.premierflood.com ..................................................58
Will Higher Rates Reduce Loan Volume? By Dan Hultquist, MBA, CRMP
MBS Highway.................................................... www.mbshighway.com/MNN .......................................... 71
T
Mortgage News Network (MNN).......................... www.mortgagenewsnetwork.com ............................ 40 & 41
T
Freddie Mac...................................................... www.freddiemac.com/loanadvisorsuite ............................ 5 Greenbox Loans, Inc........................................... www.greenboxloans.com .............................................. IFC HomeBridge Wholesale...................................... www.homebridgewholesale.com .................................... 29 Lykken On Lending............................................ www.lykkenonlending.com ............................................ 69
NAMB+............................................................ www.nambplus.com ...................................................... 25
of contents
R T G A G E
L U M E
P R O F E S S I O N A L
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N U M B E R
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NAMB Perspective............................................................................ 20 Not All HELOCs Are Created Equal By Rob Walker, CMB, CMT......24 Maryland Eliminates the Duplication of Disclosure Requirements for TRID Loans By Gavin T. Ales.............................. 26 Compliance Matters: Record Retention—Evidence of Compliance Under TILA By Jonathan Foxx.................................. 28 Don’t Let On-the-Job Stress Lead to Burnout By Deanne DeMarco, M.A., RCCI...................................................... 30 Branch Managers Have the Hardest Job in Our Industry By Steve Rennie................................................................................ 34 OrigiNation—Whistleblowing: Part II By Andy W. Harris, CRMS.... 36 The Mortgage Godfather: There Is Nothing to Fear By Ralph LoVuolo Sr...........................................................................44 The Long & Short: The Business of Short Sales By Pam Marron....50 Time to Re-Focus on the Consumer By Andrew Liput.................... 52 MBA’s Mortgage Action Alliance: A Message From MAA Chairman Gene M. Lugat.............................................. 77
The Maladaptive, Irrational Cognitions of the Super Sales Producer By Kerry Johnson, Ph.D........................................... 86 Blockchain Collaboration: The Best of the Deal Room Without Having to be There By Jason Nadeau.............................................. 88
COLUMNS New to Market...................................................................................12 News Flash: August 2017................................................................. 14 Heard on the Street.......................................................................... 38 Outstanding Places to Work............................................................ 92 NMP Calendar of Events.................................................................. 93 NMP Resource Registry................................................................... 94
A D V E R T I S E R S Company
Web Site
Page
NAMB National.................................................. www.namb.org ..............................................................23 NAPMW............................................................ www.napmw.org ....................................................43 & 69 NAWRB............................................................ www.nawrb.com ............................................................79 New York Community Bancorp. Inc..................... www.nycbmortgage.com ................................................ 35 NMP U.............................................................. www.nmpucoaching.com .................................. 19, 59 & 73 NRMLA.............................................................. www.nrmlaonline.org .................................................... 66 OSI Express........................................................ www.osiexpress.com/mlslink ............................................ 1 Paramount Residential Mortgage Group, Inc....... www.prmg.net .......................... 13, 67 & Inside Back Cover REMN................................................................ www.remnwholesale.com .............................................. 15 ResMac, Inc....................................................... www.resmacb2b.com .................................................... 17 Reverse Mortgage Funding LLC............................ www.partners.reversefunding.com/learnmore ..................63 Secure Insight.................................................... www.secureinsight.com ..................................................39 TagQuest.......................................................... www.tagquest.com ........................................................ 37 The Bond Exchange............................................ www.thebondexchange.com .......................................... 61
AUGUST 2017 Volume 9 • Number 8
FROM THE
publisher’s desk
The more the wise man knows It’s been said that only a fool think he knows everything. The more a wise man knows, the more 1220 Wantagh Avenue • Wantagh, NY 11793-2202 he realizes he has to learn. I know this to be true and those of you who have met me know I’ve Phone: (516) 409-5555 • Fax: (516) 409-4600 been around this industry for a very long time. Even so, every year when our Certification & Web site: NationalMortgageProfessional.com Education Special Focus issue comes around, I’m astounded by how much more there is to learn. STAFF Eric C. Peck Joel M. Berman I have yet to come across a reader who didn’t understand the necessity of training. Some Editor-in-Chief Publisher - CEO (516) 409-5555, ext. 312 (516) 409-5555, ext. 310 consider it a necessary evil, but necessary nonetheless. In an industry that is changing as quickly ericp@mortgagenewsnetwork.com joel@mortgagenewsnetwork.com as ours, an industry where the penalties for making a mistake are so high, a company that doesn’t Joey Arendt Beverly Bolnick understand how to integrate training into everything they do simply won’t be here very long. Art Director VP-Sales & Marketing (516) 409-5555, ext. 323 (516) 409-5555, ext. 316 In keeping with our tradition of providing you with the very best information available to aid in joeya@mortgagenewsnetwork.com beverlyb@mortgagenewsnetwork.com your continued success, we bring you our August issue, packed with information that will help you Scott Koondel Phil Hall VP of Operations Managing Editor avoid foolish mistakes and promote wisdom throughout your organization. It’s the perfect time of (516) 409-5555, ext. 324 (516) 409-5555, ext. 312 year for this material, as many of you are getting you families ready to go back to school. For the scottk@mortgagenewsnetwork.com philh@mortgagenewsnetwork.com most successful in our industry, school is never out of session. Richard Zyta Francine Miller Social Media Ambassador Advertising Coordinator In this issue, we offer you a broad range of perspectives on the art and science of training as it (516) 409-5555 (516) 409-5555, ext. 301 richardz@mortgagenewsnetwork.com francinem@mortgagenewsnetwork.com exists in the modern mortgage lending enterprise. Whether you’re going old school, bringing Rick Grant Dylan Pollock speakers in-house or sending your people off-site for education, tech-based and using the latest Special Reports Editor Administrative Assistant online learning platforms or outsourcing the entire function to one of the industry’s excellent (570) 497-1026 (direct) (516) 409-5555, ext. 314 (516) 409-555, ext. 311 dylanp@mortgagenewsnetwork.com training firms, everything starts with your corporate culture. rickg@mortgagenewsnetwork.com That’s why I’m so proud to you bring you this month’s article penned by Frank St. John, ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact Director of Marketing for Jet Direct Mortgage entitled “Don’t Underestimate the Power of a VP-Sales & Marketing Beverly Bolnick at (516) 409-5555, ext. 316 or e-mail beverlyb@mortgageTraining Work Culture” on page 72. It all starts there. The people who foster a training culture newsnetwork.com. understand what Rick Arvielo, Chief Executive Officer of New American Funding is getting to in his ARTICLE SUBMISSIONS/PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck article, “Training Tomorrow’s Workforce, Today” on page 74. New American is making a very at (516) 409-5555, ext. 312 or e-mail ericp@mortgagenewsnetwork.com. The deadline for submissions hearty investment into the education of their employees, having broken ground on a 25,000is the first of the month prior to the target issue. square foot, contemporary training facility. SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail orders@mortgageUltimately, a well-trained workforce is the only path to company growth, as Damian Maldonado, newsnetwork.com or visit www.nationalmortgageprofessional.com. Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600. Co-Founder of American Financing Corporation, points out in his article “Sustaining Business Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the Growth Through Employee Development” beginning on page 70. authors alone and do not imply the opinion or endorsement of Mortgage News Network Inc., or the offiOnce you understand that training isn’t just something your company offers, but something cers 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) that’s a part of the way you do business, you’ll have to decide how your company will go about and/or other state mortgage trade associations. Participation in NAMB, NAPMW, NCRA, and/or other state mortgage trade associations events, activproviding it. We have some great information to help you with that in this issue. ities and/or publications is available on a non-discriminatory basis and does not reflect the endorsement First, “Why Training Fails and How to Fix It” on page 57 by Nick Mantia, Vice President of of the product and/or services by Mortgage News Network Inc., NAMB, NAPMW, NCRA, and other state mortgage trade associations. Training at Angel Oak Companies, details what happens when training just is not working and how National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, and/or other state mortgage to remedy the situation. Jennifer Jensen, National Training Manager for Inlanta Mortgage Inc., 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 echoes some of Nick’s comments and adds some great information of her own in “Training Is Not 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. One-Size-Fits-All” beginning on page 66. For many, technology will be the key to delivering excellent training across decentralized mortgage enterprises. And we have some great technology available to corporate training departments today. Check out “How Using a Learning Management System Aids Compliance Training Efforts,” by Jeff Kelly, Vice President of Governance, Risk and Compliance for OnCourse Learning Financial Services on page 60. Then, turn to page 62 for the article, “Balancing Conventional Forms of Training With Non-Traditional Methods,” by Wendy Krieger, Director of Organizational and Talent Development at Kinecta Federal Credit Union. Much of the training we’re delivering to mortgage professionals today has to do with compliance. It’s a business mandate that our people understand the rules regulators have handed down, but with the rules changing so quickly, how can anyone keep up? For some help on this, read “Getting Staff Up to Speed on Ever-Changing Industry Regulations and Mandates” beginning on page 64, by Brett Shively, Executive Vice President of OnCourse Learning Financial Services & David Shoemaker, Chief Learning Officer at OnCourse Learning, in this issue. Of course, we provide a sharp focus on compliance by providing a forum to industry compliance via Jonathan Foxx of Lenders Compliance Group. This month, he’s delivered a wealth of information in his article, “Take-It-or-Leave-It Arbitration: Banning Consumers From the Court” on page 54. This is a very complex issue and Foxx does not disappoint as he brings key elements into sharp focus. His article is like a training course in and of itself. While no credentials can be earned by reading it, there very well may be a test, so study well! While you’re at it, study your business and see if you are missing out on certifications that could help you grow. Desirée Patno, President and Chief Executive Officer of the National Association of Women in Real Estate Businesses (NAWRB), gives you a perfect example in her article, “Unlocking Your Business Growth With Women-Owned Business Certification,” beginning on page 68. As you have come to expect, we also provide some thought-provoking content that you just can’t find anywhere else. This month, we bring you a history lesson on housing from Jill Kravig Burns, Senior Vice President of Operations for Mountain West Financial. In her article “First Lady of Housing” on page 46, she re-introduces us to Eleanor Roosevelt and reveals the incredible impact she had on housing in the United States. And I wouldn’t send you an issue without a contribution from Eric Weinstein. His article this month on page 76 is entitled simply, “Can’t Think of a Title” (I kid you not!). He may not have thought of anything to put at the top of his submission this month, but wait until you read what he thought to put in it. As always, we hope this issue contributes to your continued success in a meaningful way, so that you can continue to serve borrowers across this great county as the home finance experts you are and that they so desperately need. And do not forget … NMP U President and Head Coach Ron Vaimberg is available to serve mortgage bankers and brokers, managers, account executives and loan officers, providing education, training and coaching. NMP U is an extension of National Mortgage Professional Magazine in that NMP U was created to provide all of the working resources every mortgage professional may need to succeed at the highest level. For more information, call (888) 979-NMPU and press #801 to reach Ron Vaimberg or visit NMPUCampus.com. Sincerely, Joel M. Berman, Publisher-CEO NMP Media Corp. Joel@MortgageNewsNetwork.com National Mortgage Professional Magazine is published monthly by Mortgage News Network Inc. • Copyright © 2017 Mortgage News Network Inc.
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Cutting costs and sa avving time should be automa attic.
Learn more at www.FreddieMac.com m/LoanAdvisorSuite
®
Smart. Simple. T Trrusted.
n National Mortgage Professional Magazine n AUGUST 2017
More automation means a more efficie ent, less costly process for you and your borrowers. Automated collateral evaluations. e Automated assessments for borrowers without credit scores. Au utomated income and asset validation. Expanded homeownership opportunitiies.
NationalMortgageProfessional.com
With Loan Advisor Suite®, it is.
5
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: (800) 827-3034 l E-mail: NAPMW1@NAPMW.org l Web site: NAPMW.org
2017-2018 NAPMW NATIONAL BOARD OF DIRECTORS
AUGUST 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
6
Cathy Kantrowitz National President (845) 463-3011 President@NAPMW.org
Laurel Knight President-Elect (425) 426-2028 PresElect@NAPMW.org
Susan Kerr Vice President (703) 871-1310 NVP1@NAPMW.org
Glenda Mooney Secretary (314) 703-8714 NatSecretary@NAPMW.org
Judy Alderson Treasurer (918) 250-9080, ext. 300 NatTreasurer@NAPMW.org
Lynne Sparks Parliamentarian (678) 872-9000, ext. 10611 LSparks@SKWRLaw.com
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 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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n National Mortgage Professional Magazine n AUGUST 2017
Non-QM Borrowers Are Diverse and Able to Pay By Tom Hutchens
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AUGUST 2017 n National Mortgage Professional Magazine n
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fter the Great Recession, lending rules changed dramatically, mostly for the good. But, as many as 15 million Americans–many of them victims of the market collapse almost 10 years ago– continue to be penalized for being caught up in a tsunami they could not avoid. Fortunately, mortgage industry innovators now offer new products featuring careful underwriting as well as reasonable borrowing terms for individuals who cannot qualify for agency loans. These non-QM loans help people with diverse income and credit histories, while safeguarding against lending to those who are unable to pay. Yet, many mortgage industry professionals continue to think of non-QM as similar to the high-risk sub-prime loans of the prerecession era. That is because the 2014 “Ability-toRepay and Qualified Mortgage Rule” issued by the Consumer Financial Protection Bureau (CFPB) redefined “Qualified” and “Non-Qualified” loans as distinct product lines, leaving the latter with a misleading and unfavorable name. However, nonQM lenders have different but no less careful underwriting procedures. Trevor is an example of a potential borrower who should be a desirable client for most loan officers despite his inability to get an agency loan due to a previous foreclosure. In 2008, he was 30-years-old and on track to become partner at a prominent Tampa law firm. Although he was still paying off student loans, his income was beyond his expectations. Almost everyone he knew was investing in real estate, so he decided to purchase a $500,000 home for no money down on a five-year ARM. The way prices were rising, he planned to either sell it at a profit in two years or refinance. In 2013, he could do neither and suffered a foreclosure. He has been renting ever since. Even though his career and income continue to rise, Trevor remains ineligible for a “Qualified” loan. Is he a high-risk borrower? Hardly. Trevor is an ideal candidate for a loan like Angel Oak Mortgage’s Portfolio Select program. Based on his documented earnings, debt-to-income ratio (DTI), and other favorable factors revealed in Angel Oak’s manual underwriting process, Trevor can be approved for a loan of up to $3 million, with loan to value of as much as 90 percent at rates starting in the low fives. Matching Trevor with Angel Oak’s Portfolio Select program is just one example of how savvy loan officers can rely on non-QM mortgage products to enable people to recapture the American dream after experiencing a financial setback.
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
SPONSORED EDITORIAL
elite performer the
Emotional Selling vs. Confident Telling BY ANDY W. HARRIS, CRMS
ccording to the Merriam-Webster Dictionary, a “want” is defined as having a strong desire for something. The word “need” is defined as lack of the means of subsistence. In every area of life, the two concepts are opposing elements (Merriam-Webster Online). What I find fascinating over the years I’ve spent around sales people is that all seem to be commonly driven by one of these two elements. One might view what they do as a job, while another might view as a career. Either way, the economic position and mindset of the person will determine their actions, and ultimately, their success or failure. I’ve found that most top-producing salespeople, or persistent educators as I call them, are commonly confident people. They have a strong desire to “want” the business and will certainly compete and market for it, but also have no economical or other financial stresses that impact the interaction. If a new client or sale is lost, it will have little to no impact on their present position providing they have an abundant pipeline. On the other hand, the lower-producing salespeople tend to “need” the business in order to survive economically or financially, which can cause an emotionally uncertain interaction with the consumer. This is simply due to confidence being restricted from an insufficient pipeline. I clearly and consistently see those who “confidently tell” versus “emotionally sell” get more business by the want versus the need. Confidence can be defined as a feeling or consciousness of one’s powers or of reliance on one’s circumstances. Emotion can be defined as a natural instinctive state of mind deriving from one’s circumstances. Both of these terms are a state of mind and something that is controllable if the person seeks to acknowledge and be aware of their actions and reactions. Having power and control is what distinctively separates these two mental definitions. If one behaves or comes across uncertain or at times even desperate and defensive, these emotions can make it very hard for a client to commit to your products or services. Confidence, on the other hand, attracts new prospects as the foundation is solid and message is clear. If we can control our behavior through confidence, no matter our economic or financial circumstances, does this mean a lower-producer can become a higher-producer? I certainly believe so if the goal internally is to “want” the business versus “need” the business. Being aware of and controlling your mindset each and every day can be a game-changer. Become a confident teller versus emotional seller.
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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
First Education and Then Certification BY DAVE HERSHMAN
he theme of this month’s issue is “Certification & Education.” First, I would like to address the issue of education. This is an industry that historically does not believe in formal education. Less than a decade ago, many states did not require a license to originate mortgages. That means that painters, bartenders, exotic dancers and more were recruited into the industry. I am not disparaging these professions, by the way, but going from painting houses to originating loans is quite a stretch—especially if not backed up by a strong educational program. And following someone around for two weeks and listening to what they say is certainly not a strong, formal education program. Think about what it takes to procure a position in other industries. A stock broker studies for a Series 7 and then might spend a year in training before they actually advise clients. An appraiser must have a four-year degree, complex training and then intern with for 2,000 hours of experience. Again, I am not putting down these other professions, but we are advising on the most important financial decision most Americans make in a lifetime. Certainly, more important than buying an individual stock. Not to say that we don’t have education within this industry. We certainly do, but most of it is centered upon compliance. As a matter of fact, 90 percent of the licensing course material is centered on compliance. Very little of it will help a loan officer advise clients in the right way, let along help them
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become successful. Like a broken record, I am not disparaging compliance training because the lack of this training may put people in jail and close down companies. On the other hand, if compliance tells us that we have to do what is best for our clients, shouldn’t we be trained on determining what is best for our clients? I should also point out that this is not a recent issue. When I wrote my first books for the Mortgage Bankers Association some (MBA) three decades ago, I asked—what books do you already have on management and giving advice to clients? They had secondary books, compliance guides and more–but little on how to mentor and manage. That is one of the reasons why I wrote the first major textbooks on management and origination for the MBA. What I really find interesting is that the vast majority of mortgage companies like to advertise that their loan officers are experts. Yet, we provide knowledge assessment tests for loan officers, and I can tell you that a good percentage of these loan officer experts who take the test do not pass the advance exam. As a matter of fact, I would like to make you an offer. Purchase our advanced assessment test. If you pass it the first time, we will refund your $25 fee (OriginationPro.com/OriginationProMortgage-School). Just tell our staff that you read my article. That way you can find out for yourself. I think that the money spent on our end would be worth it from a standpoint of the industry finding out what being an expert actually entails.
Thus far I have been speaking about knowledge training, both basic knowledge and advanced knowledge. While the NMLS is not interested in teaching us advanced concepts such as the economic comparison of mortgages, they are even further away from teaching us how to build and manage a pipeline. There is sales and marketing training in the industry, but notice I also mentioned the phrase “managing a pipeline.” I think everyone would agree that sales and marketing efforts will fall flat if you don’t deliver superior service. Yet, we will never deliver superior service without the ability to manage a larger pipeline. If you have never had a large pipeline, you would not know how hard it is to manage that pipeline in a way to give superior service. Many years ago, my pipeline averaged over 100 loans without an assistant. So, I do know what it takes. In reality, this is where many loan officers fail. Between the compliance training we get and the sales training offered, where is this topic covered? This leads us to certification. There are also plenty of certifications in this industry. But often, the certification is sold as a marketing vehicle, rather than an educational vehicle. It is the education that is important, not the certification. The marketing benefit of a certification should be an added benefit of the
program. When loan officers go through our courses, they have a choice whether they want to take the extra steps to get certified. There is no extra cost, but there is extra time and effort. When they ask my advice as to whether they should work towards and Certified Mortgage Advisor or Mortgage Mentor designation, I ask them how important is having a certification in their eyes? Most of the time, they opt for the education. You might ask, why did we pick the term Mortgage Advisor for our certification? This choice does have a significance within the marketing area. Marketing is all about positive differentiation. It is also about delivering value. What do our clients want from us in addition to the great rates and programs everyone else is offering? Great advice for this important decision they are making. True value is defined as what your target is interested in. You never have to explain what a mortgage advisor is because it is exactly what they want. If you have to explain what your certification means, then you have an extra step not needed. As a manager, owner or mentor, I do believe that it is your duty to make sure that the expert loan officers you are marketing are actually experts. And that does not mean that you have to do the training yourself.
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 Veros Launches VeroSELECT Valuation Management System API
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Veros Real Estate Solutions has announced new enhancements to its VeroSELECT API offering. Expanding the platform’s capabilities allows Veros’ clients to integrate valuation services with their back-office systems for seamless and scalable valuation management. This single gateway enables VeroSELECT partners to access open, industry-standard REST Application Programming Interface (API)–allowing them to integrate, customize and extend volume ordering of AVMs, Broker Price Opinions (BPOs), Property Condition Reports (PCRs) quickly and easily. “VeroSELECT, considered one of the most stable and versatile valuation management platforms available in the market, extends this enhanced API capability to our clients–providing the ability to easily integrate and handle highvolume transactions with ease,” said David Rasmussen, Senior Vice President of Operations for Veros. “The API enhancement streamlines both the ordering and processing of AVMs with PCR and BPO valuations for power users to not only save time, but also to strengthen the risk decisions through complex, cascading logic and real-time data access.” LexisNexis RiskView Liens & Judgments Report Now Available as Part of Factual Data’s Credit Verification Services
Factual Data has announced that the LexisNexis RiskView Liens &
Judgments Report is now available as part of its credit and capacity verification services for mortgage lenders. The new report, developed by LexisNexis Risk Solutions, provides lenders with liens and judgments data from the start of the loan process. Factual Data aligned with LexisNexis Risk Solutions to integrate the RiskView Liens & Judgments Report to fill the void and continue customer access to the liens and judgments data from the beginning of the loan process. Using LexisNexis Risk Solutions’ Scalable Automated Linking Technology (SALT), big data processing and extensive public record sources, the solution collects the data and links it to the consumer with greater than 99 percent reliability. LexisNexis Risk Solutions has also revised its public record gathering processes to help ensure that it is providing comprehensive, current and correct data to lenders. “Liens and judgments data are telling of a consumer’s true creditworthiness and level of risk,” said Jay Giesen, Senior Vice President of Factual Data. “Without most of this information in consumer credit reports, lenders may have to wait to discover this data later in the loan process and then switch into a reactive mode to mitigate delays, inefficiencies and negative consumer responses. Integrating the LexisNexis RiskView Liens and Judgments Report into our services ensures that our customers have reliable liens and judgments data available at the front end so they can be proactive and maintain a streamlined loan process–from origination to closing.”
Ellie Mae Launches New Version of Encompass
Ellie Mae has announced that it has launched a new major release of Encompass. Encompass 17.3 includes additional updates for 2018 HMDA collection and reporting adding to the comprehensive functionality already released earlier this year, additional Construction Management capabilities, a streamlined user experience for FHA 203(k) loans, and correspondent and trade management improvements. “We know that HMDA readiness is on everyone’s mind and Ellie Mae is committed to helping our customers prepare with solutions, information and resources well in advance,” said Jonathan Corr, President and Chief Executive Officer of Ellie Mae. “With this major release of Encompass, we’re adding to applicant, property and loan feature data capture in support of HMDA. This comprehensive release offers technology to ensure complete compliance with changing regulation, as well as the innovative capabilities that enable our banks, credit unions and mortgage lenders to originate and fund more loans, lower origination costs and shorten the time to close.” Encompass 17.3 enhancements include: 2018 HMDA Collection and Reporting Updates with Repurchased Loans Support; Demographic Data Updates; FHA 203(k) Updates; Construction Management Enhancements; New Correspondent Updates; and Trade Management Updates.
Reverse Mortgage Funding Debuts Loan Qualification Engine Reverse Mortgage Funding LLC (RMF) is now offering LQ, a loan qualification engine for the Bloomfield, N.J.based company’s approved broker partners and loan officers. According to the company, the new technology is within Tango Reverse, RMF’s proprietary loan origination system, and is designed to loan closings easier by providing originators with an instant preliminary assessment of a customer’s eligibility to qualify for a reverse mortgage. The technology also generates rules and conditions based on the characteristics of each prospective loan scenario. “We are really excited to bring this truly innovative and easy-touse tool to the reverse mortgage industry,” said Mark O’Neil, National Sales Leader for RMF’s Wholesale and Correspondent Channel. “We feel strongly that LQ will dramatically disrupt the entire mortgage industry for the better, as it significantly simplifies and shortens the duration of the loan qualifying process. As such, brokers will have more time to spend on serving potential new customers, while older Americans will be able to more quickly enjoy the benefits of the reverse mortgage they selected.” Liens & Judgments Data From LexisNexis Risk Solutions Now Available Via CBCInnovis
CBCInnovis has announced that the LexisNexis RiskView Liens & Judgments Report is now available
LoanLogics Enhances LoanHD Through New Audit Response Center
defect was addressed, so regulators and investors are able to clearly see what actions were taken. The ARC allows the lender to auto-assign a respondent, or the person in the lender’s organization who will submit rebuttals and clear loan defects, such as a missing LoanLogics has enhanced its document or an incorrect fee. The LoanHD Loan Quality Management system configuration also identifies platform with an Audit Response “responsible parties,” or the people Center (ARC) which enables most responsible for the defect in mortgage lenders to address defects the origination process. and conditions on loans immediately The ARC includes a after each loan has been reviewed. communication module that The ARC also provides lenders with immediately notifies the respondent a compliance trail showing how each and the responsible party of defects
discovered after a loan quality review. These notifications will also display responses from the auditor regarding the curing of conditions. The respondent will be prompted to log into the ARC portal to address all issues. Once resolved, the application automatically updates the LoanHD platform. “With this enhancement to LoanHD, relevant parties in the loan process will find out quickly if there are any defects or conditions in a loan that need to be addressed,” said Dave O’Malley, Director of continued on page 18
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within its portfolio of lending support solutions. Developed by data and analytics company LexisNexis Risk Solutions, the RiskView Liens & Judgments Report enables mortgage lenders to continue to leverage liens and judgments data in credit reporting for a more complete profile of consumer lending risk. As of July 1, the three Nationwide Credit Reporting Agencies (NCRAs)–Equifax, TransUnion and Experian–began removing approximately 50 percent of liens data and 96 percent of judgments data from credit reports. Without the liens and judgments data in their reports, lenders could potentially obtain an incomplete risk profile. Further, without liens and civil judgments data readily available in credit reports from the onset, lenders could identify these items significantly later in the loan process, such as in a title search. If a lien or judgment is found, it can cause a closing delay or complete fallout, which not only disrupts the loan process, but also negatively impacts the consumer experience. To fill this gap, CBCInnovis has aligned with LexisNexis Risk Solutions to ensure its customers can access liens and judgments data from the first step of origination. Already integrated within CBCInnovis’ credit reporting solutions, the RiskView Liens & Judgments Report uses LexisNexis Risk Solutions’ Scalable Automated Linking Technology (SALT), big data processing technology, and extensive and diverse data sources to collect the data and link it to the consumer with greater than 99-percent reliability. LexisNexis Risk Solutions has also revised its public record gathering processes to help ensure that it is providing comprehensive, current and correct data to lenders. “One of our core objectives at CBCInnovis is to help lenders better identify and assess risk,” Ken Viviano, Senior Vice President of CBCInnovis, said, “The RiskView Liens & Judgments Report addresses the recent actions of the NCRAs to remove this data from credit reports and fits seamlessly into our suite of products. It will enable our customers to continue to access vital liens and judgments data and begin to resolve risk issues early in the loan process. They can be confident in their ultimate lending decisions because the data is backed by LexisNexis Risk Solutions’ industry-leading linking technology.”
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NAMB Seeks Industry Input on Ability to Repay and QM Rule Assessment
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NAMB—The Association of Mortgage Professionals has called on its membership to respond to the Consumer Financial Protection Bureau’s (CFPB) Request for Information Regarding Ability-toRepay/Qualified Mortgage Rule Assessment. In an e-mail from Michelle Velez, the 2017 Chairwoman of NAMB’s Government Affairs Committee, the trade group stated that input on this issue would “address the unintended consequences that affect low and moderate income borrowers and small business mortgage brokerage shops.” NAMB pointed to the potential damage that the Dodd-Frank Act’s Qualified Mortgage points and fee cap would have on small business mortgage brokers and low- and moderate-income borrowers, as well as a potential shrinkage in competition that would ultimately hurt consumers. “Since 2011, all compensation paid by creditors to mortgage broker companies is fixed, without any possibility for variation from transaction to transaction, as a result of the Loan Originator Compensation Rules issued by the Federal Reserve Board and the CFPB,” Velez stated. “This is a strong additional layer of consumer protection for borrowers utilizing a mortgage broker company and
another reason why creditor compensation to a broker company should not be doublecounted in the definition of points and fees. These parameters prohibit mortgage brokers from steering consumers to any specific loan or lender.” Flagstar Bank to Become Official Jersey Partner of the Detroit Pistons
The Detroit Pistons of the National Basketball Association (NBA) and Flagstar Bank have announced a multi-year corporate partnership deal that brands Flagstar Bank as the franchise’s first-ever jersey partner. The deal also designates Flagstar as the official banking and mortgage sponsor of the Detroit Pistons. Detroit becomes the tenth NBA team to announce a jersey partner. Additional aspects of the partnership deal include in-arena digital and static signage throughout the venue as well as social, television and radio advertising. “This is a dynamic partnership between two organizations committed to building a better Detroit,” said Pistons Owner Tom Gores. “Beyond putting the Flagstar name on our Pistons
jerseys, we will be partnering on an education initiative that will benefit schoolchildren in Detroit. I’m really proud that this is more than just a business and marketing initiative. It’s about working together to support the revitalization of our city.” Flagstar Bank President and CEO Alessandro DiNello said, “Like the Pistons, Flagstar is a communityfocused Michigan organization committed to instilling pride in our region and contributing to its vitality. At Flagstar, we have a 30-year history of community involvement and investment. We’re pleased to partner with the Pistons to bring good things to the community we share.” Flagstar Bank will have their logo prominently featured on the left front strap of official Detroit Pistons team jerseys at the start of the 2017-18 NBA season. Flagstar Bank will be showcased to a base of more than 3.2 million Detroit Pistons’ social media followers, as well as viewers and listeners throughout the State of Michigan on Fox Sports Detroit, 97.1 FM The Ticket and the Pistons Radio Network. “Thanks to the brand exposure with the Pistons, we will have an unmatched opportunity to tell the story of Flagstar’s transformation to a full-service community bank with a thriving commercial business,” DiNello said. “And the chance to share crafted solutions Flagstar customers love with Pistons fans through co-branded credit and debit cards and checking accounts built just for them, is truly exciting.”
Unique to other jersey partner deals, Flagstar Bank will be designated as the presenting sponsor of the Detroit Pistons Math Hoops community relations platform. As two companies focused on making an impact by serving local youth, the Pistons and Flagstar are reaching out to students throughout metro Detroit and the region with this fast-paced basketball board game, curriculum, and academic program. Math Hoops helps students learn fundamental math skills through direct engagement with the real statistics of their favorite NBA players. The program is currently in place at 40 local schools throughout the region with vast room for growth. In the first year of Flagstar’s sponsorship of Math Hoops, two Detroit-area students were runnersup in the national championship. Commercial and Multifamily Originations Record Q2 Upswing
Commercial and multifamily mortgage originations during the second quarter experienced a 28 percent spike from the first quarter and a 20 percent boost from one year earlier, according to new data from the Mortgage Bankers Association (MBA). The industrial and office sectors fueled the second quarter activity, with a 91 percent year-over-year increase in dollar volume of loans for industrial properties and a 33
percent increase for office properties. Multifamily properties saw a 21 percent annual increase, while hotel properties recorded a 14 percent increase and healthcare properties enjoyed a seven percent upswing. Retail properties, however, recorded a nine percent decline. Among investor types, dollar volume of loans originated for commercial mortgage-backed securities loans increased by 168 percent year-over-year. This was far ahead of the 26 percent year-overyear increase for governmentsponsored enterprises (Fannie Mae and Freddie Mac) loans. Life insurance loans saw a two percent decrease, while a 21 percent drop was seen in the dollar volume of commercial bank portfolio loans. “Borrowing and lending backed by commercial and multifamily properties has been strong the first half of this year,” said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. “Reflecting broad industry trends, borrowing backed by industrial properties increased by two-thirds compared to the first half of 2016, while borrowing backed by retail properties dropped by one-sixth. As was the case during the first quarter, commercial/multifamily mortgage bankers’ originations increased despite a slowdown in the volume of sales transactions.”
members strive to provide.” The MBA added that it would submit its own response to the FHFA, but urged its members to speak up in order to make “our collective voice louder.” Servicing Customers Express Problems in New J.D. Power Study Borrowers dealing with mortgage servicers are having their patience tested,
according to the 2017 J.D. Power U.S. Primary Mortgage Servicer Satisfaction Study. The newly released report found 10 percent of mortgage customers complaining that their time was wasted during their most recent interaction with their mortgage servicer, while 66 percent said they had to wait five minutes or more to speak with a customer service representative. And the digital channels fared no better: mobile usage by mortgage customers dropped to 19 percent in 2017, compared to 22 percent in 2016.
“The past few years have not been easy for mortgage servicers as they’ve struggled with regulatory and market pressures, but still managed to deliver on customer satisfaction,” said Craig Martin, senior director, mortgage practice at J.D. Power. “Now, as that trend starts to shift and customer satisfaction levels off, it is critical that mortgage servicers continue to balance the demands of this tough marketplace with the needs of their customers. Based on our research, mortgage continued on page 16
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The Mortgage Bankers Association (MBA) is calling on industry professionals to voice their concern over a proposal by the Federal Housing Finance Agency (FHFA) to accommodate borrowers with limited English proficiency by putting the borrower’s “preferred language” on the Universal Residential Loan Application. In an e-mail sent by the MBA’s Mortgage Action Alliance to its members, the trade group noted that the FHFA’s decision too risky. “We believe that inclusion of such a question would be premature and potentially harmful to a lender or servicer’s relationship with their customer,” said the trade group in its e-mail. “The borrower might have expectations about service in another language that a lender or servicer cannot provide, or a borrower might erroneously believe the lender intended to discriminate against them or otherwise treat them differently. Neither outcome is consistent with the type of customer service we know MBA
By Mat Ishbia
Remote e-closings are on the way he future is here. Remote e-closings will be the way that all closings are done in the next few years. It’s just the better way to do closings. The process in which closings are done today–with people passing sheets of paper back and forth to wet sign–is antiquated. People have been talking about e-closings for a long time, but remote e-closing is the way to go. The idea of “hybrid e-closings,” where people pass a tablet back and forth for digital signatures, that will be a thing of the past. With remote e-closings, a borrower can be sitting at their house, click a button on an app or computer and they can “FaceTime” with a notary to actually do the closing live, right there. No pieces of paper need to be wet signed at all. Imagine not needing strangers to come to your house. Imagine closing on-demand, whether it’s 6:00 p.m., 9:00 p.m., or whenever the borrower wants. It’s going to be easier and faster. Remote e-closings are on the way.
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No appraisal on purchases We know about Freddie Mac rolling out ACE (Automated Collateral Evaluation) on refinances, and we know Fannie Mae has had the Property Inspection Waiver (PIW) on refinances. But now, Freddie Mac is rolling it out on purchases, as well. Borrowers with loans at an 80 percent LTV or less can run through LP and get no appraisal on a conventional loan. Brokers can save their borrowers up to $500, or even more, and save a lot of time–especially in states that typically take a longer time on appraisals. Fannie Mae will be rolling out the same thing on PIW for purchases very soon, as well. It’s a very positive development for both Fannie Mae and Freddie Mac. This is a great opportunity for brokers to be able to run both models (DU and LP) on refinances and purchases to try for an appraisal waiver. Broker business is growing In the second quarter of 2017, mortgage broker business increased by 4.4 percent while the overall market went down 6.1 percent. That’s a big spread and it shows that the broker market share is growing. Why is it happening? Loan officers are leaving banks and retail branches to join the broker world. They’re seeing the value in having access to a variety of lenders, products, turn times and price options. It’s better to be a broker. Realtors are seeing that brokers always hit their contract date. Consumers are seeing that brokers can shop on their behalf to find the best loan. The broker business is the hot spot to be in, and we’ll continue to see growth throughout the rest of the year.
Mat Ishbia is president and CEO of United Wholesale Mortgage, a Troy, Mich.-based provider of mortgages for independent brokers nationwide. One of the nation’s leading advocates of independent mortgage brokers and wholesale lending, Mat has changed the lending platform, turning UWM into a $20 billion company and a top national workplace.
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servicers have three very clear areas of opportunity to help drive success: effective onboarding, high-functioning self-service tools and call center best practices that optimize customer contact in step with changing customer demographics and needs.” For the fourth consecutive year, Quicken Loans was named the top-ranked mortgage servicer by the J.D. Power report. Regions Bank and Huntington National Bank ranked second and third. J.D. Power polled 7,374 mortgage servicing customers during March and April for its 2017 report. New Data Finds Rents Are Going Down
The nationwide median onebedroom rent price decreased between July and August, from $1,016 to $1,013, according to new data from ABODO. The greatest decline in rents occurred for the second consecutive month in Glendale, Ariz., which saw a 10.7 percent drop in August over July’s onebedroom rents, to $744. New Orleans experienced the greatest rent hike, with an 8.6 percent upswing that resulted in an average of $1,500 for a onebedroom rental unit. San Francisco and New York each saw rent declines, but the resulting prices ensured that they were the nation’s most expensive rental markets: $3,210 for a onebedroom unit in San Francisco, down 0.9 percent from the previous month, and $2,907 in New York, down 0.2 percent. New Survey Reveals Depth of Homeowner Pessimism
A stain of pessimism is polluting how some homeowners perceive the housing market and their homebuying decisions, according to a new poll commissioned by Trulia.
In a survey of 2,264 adults conducted by Harris Poll, 21 percent of respondents said a housing purchase mistake they made in the past is now holding them back from changing their current housing situation. Among the respondents involved in the purchase of their current residence, 33 percent regretted not buying a larger property. Furthermore, 62 percent of respondents believed housing costs have become less affordable since 2012. Among respondents with an annual income of $100,000 or higher, 26 percent stated they could not afford to buy a home in today’s market; among those earning $50,000 per year or less, the regret level was at 40 percent. Twelve percent of high-income homeowners were also more likely to regret not putting more money down on a house, compared to four percent of those with an annual household income of less than $50,000. Guild Mortgage Employees Volunteer Renovating Mexican School
Nearly 300 employees and senior managers from Guild Mortgage recently spent a day renovating a primary school and engaging with local students in Playa Del Carmen, Mexico. Company representatives, including Guild Mortgage Chief Executive Officer Mary Ann McGarry and Chief Operating Officer Terry Schmidt, volunteered their time to paint the school’s classroom walls, doors and perimeter fence, while making numerous other enhancements to the facility. Guild teams planted trees in the garden and assembled a swing set on the playground. In addition, Guild gave each of the 30 children in the school a new backpack. The community outreach effort was part of Guild’s Chairman and President’s Club Award Program, which recognizes the company’s top loan officers. The initiative was spearheaded by Barry Horn, EVP, National Production Manager. Throughout its history, Guild has continued on page 24
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It’s About Quality, Not Quantity!
E
veryone wants their business to thrive, am I right? Although that answer is a no-brainer, getting to the point of having a successful business with repeat clients can be a challenge. Here are some simple strategies to get to that point:
l Believe in what you’re selling. Clients will sense your confidence and belief in your product and there is greater chance that they will potentially purchase from you repeatedly. A good question to ask yourself is, “How will this be of better use for my clients?” Find out the ins and outs of your product. If there are any glitches, be sure to address them before you introduce it to the public. It may have great potential, but discovering even the slightest problems can scare off clients from doing repeat business with you simply because you didn’t do enough investigating. Which brings me to my next point … l Research, research! Know everything about your product. Once you think you know it all, then study it again. It’s amazing what you can pick up researching your product the second, third or even fourth time. Don’t be afraid to add your own personal selling style to it, as long as you are honest with your clients. It is the same in business as it is with life: Honesty goes much further and your clients will respect you for that.
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l Always remember: It’s about quality, not quantity. What is the quality of your product? What is the quality of your selling skills? Of maintaining and keeping your clients? How many clients are you willing to deal with to give them the best customer service possible? Would it best suit you to handle just a few to start off with, then build from there? When will you get to the point where you may need to hire more salesmen to help with your workload? What is your standard of excellence? l Set goals and stick with them. Do you wish to personally sell $100,000 for the month? Yeah, this may seem like a daunting task to any one of us. So start off with daily goals. Perhaps making 100 cold calls per day. This means in a normal eight-hour work day that comes down to only 12.5 calls per hour. Stick with this and you will get to that one client that much sooner who gives you the word you’ve been waiting for: “Yes!” Perhaps there is a grand vacation you want to save up for or a boat, motorcycle, house, etc. So, ask yourself this very important question: “What motivates me to be successful?” And finally … Celebrate Your Achievements!
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
new to market
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passed to investors for pricing and back into MCTlive!, the capital markets software platform used by MCT staff and clients, where the tapes then reside in a centralized repository that can be easily organized and reviewed. The result is a much quicker pricing process for bulk bid tapes, greater data security, KeyStoneB2B Helps better communication between Accelerate Contract to Close counterparties, process consistency With New Title Product for investors within their existing platform, and newfound efficiencies for MCT’s traders. Since correspondent whole loan KeyStoneB2B has announced a new title product that will facilitate the title investors often have unique bulk order, title close, borrower and seller bidding processes, MCT has developed three different ways that closing disclosure during the investors can securely transmit bid mortgage lending process. tape files. Tapes can be uploaded via KeyStoneB2B offers a network of the browser-based user interface title companies that have been within MCTlive!, through SFTP vetted according to lenders’ rules (Secure File Transfer Protocol), or by and guidelines. In addition, banks, way of a Restful API (Application credit unions and other mortgage Programing Interface) that enables lenders can integrate their current MCT to integrate with various loan title companies into the exchange platforms and homegrown KeyStoneB2B lending process investor systems. automation to identify the To ensure data integrity, MCT appropriate financial services accesses lender data via integrations providers that can most efficiently that were developed with their loan support the loan to successful origination systems (LOS), the core completion. system of record for lending entities. “Since the typical mortgage loan Each of the transfer methods are process duration is 40 to 45 days, reducing the search time for the right data encrypted to ensure security at all times. title company that meets lenders’ “MCT has been realizing significant guidelines is significant,” said James year-over-year growth and in talking V. Luisi, Chief Information Officer with our investor community, we and Chief Technology Officer for represent roughly 30 to 40 percent of KeyStoneB2B. “When a bank or the typical aggregator’s client base,” lending institution uses a title said Phil Rasori, Chief Operating company that’s already integrated Officer of MCT. “As a result, we saw into our system, in many cases, the a need to develop a technology title company will pay a portion of the closing disclosure fees. Lenders solution that helps our traders work more easily with our lender clients will defray costs and elevate brand positioning by providing the savings and effortlessly exchange bulk bid tapes with investors. BAM helps back to borrowers or offer other MCT scale as we continue to grow benefits to customers.” and makes things easier on investors by centralizing the acquisition MCT Introduces Bulk process for the bulk bid channel.” Acquisition Manager Secondary Marketing Tape Your turn Transfer Technology National Mortgage Professional Magazine invites you to submit any information promoting new “niche” Mortgage Capital Trading Inc. (MCT) loan programs, new products or any other announcement related to the has released new secondary marketing technology to improve the introduction of a new program, to the attention of: industry’s existing loan sale practices. Dubbed Bulk Acquisition New to Market column Manager (BAM), the solution Phone #: (516) 409-5555 automates the process of packaging E-mail: and transferring bulk loan bids, which benefits investors, lenders and Newsroom@MortgageNewsNetwork.com MCT’s team of mortgage loan traders. Note: Submissions sent via e-mail The solution works by encrypting are preferred. The deadline for lender bid tapes so that they can be submissions is the 1st of the month securely, seamlessly and efficiently prior to the target issue. Loan Quality Solutions with LoanLogics. “In addition, lenders will be able to track the progress of defect resolution and make sure the appropriate person in their organization responds to the issue or issues expeditiously.”
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Call Ron Vaimberg, nmpU President & Head Coach, at 888-979-NMPU (6678), Ext. 801 or E-mail RonV@MortgageNewsNetwork.com for more information on how nmpU can increase Originator, AE and Manager Performance!
N A M B
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NAMB President’s Message: August 2017
appy end of summer and the beginning of the fall and winter. In California, we call this season “NonSummer.” With this, we start seeing our kids go back to school and the start of last quarters of the year. We need ask ourselves, do we need to reset the goals that we set out for at the beginning of the year? I hope we do. The landscape has changed. We are not in the same market as we once were last December and January. Thus, we need to do a strategic planning reset. We all should look at the goals that we set personally, professionally and as an association, and reset them if they are no longer valid. As the new NAMB Board of Directors prepares for their tenure, we are meeting this month in New Orleans to do just that. I am looking forward to sharing my experiences with John Stevens, NAMB President-Elect, and to help John with his vision for NAMB. With our shifting environment, NAMB has begun to initiate a campaign called “All About You.” We are reinforcing the WHY you are a member of NAMB and reinforcing the fact that this association exists for you, the NAMB member. Some of the many items we are working for on your behalf or have accomplished for you as members of NAMB include:
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Protecting small mortgage operators since 1973 Protecting your interests since 1973 Testifying before Congress Working with the CFPB Participating in regulatory panels and having a dialogue with the CFPB Hosting and presenting a variety of industry-specific Webinars Having a full-time lobbyist present on our behalf on Capitol Hill Protecting your business Forming industry coalitions and partnerships Presenting education classes and professional development
Thank you all for your continued support and I am looking forward to seeing you all at NAMB National in Las Vegas this October. Please reach out to me at Fred.Kreger@APMortgage.com to let me know how you can be of service to the industry. Thank you and Namaste’. Fred Kreger, CMC is vice president of Enterprise Retail Production at American Pacific Mortgage. He is currently the president of NAMB— The Association of Mortgage Professionals and past president of the California Association of Mortgage Professionals (CAMP). He can be reached by e-mail at Fred.Kreger@APMortgage.com or call (661) 4008905.
NAMB at the 2017 AARMR Conference By Rocke Andrews, CMC, CRMS
NAMB—The Association of Mortgage Professionals recently represented you and all members of the association at the 2017 American Association of Residential Mortgage Regulators (AARMR) Conference in San Antonio, Texas. AARMR is comprised of your state regulators and NAMB is a part. NAMB is one of 24 Industry Advisor Council members and in that capacity, represents its members to the regulators and acts as a communication conduit for them to you. The day started with a meeting of the NMLS Ombudsman Group, which heard issues from the industry with regard to regulations and licensing. The NMLS is in the midst of a revamp of their Web site, and so this was a continuation of an information exchange to improve that experience. Some welcome news for smaller businesses is that the quarterly MCR Report is going to be changed so that only the information that pertains to your activities will show up and be required to be entered. So if you are a broker that only originates loans, you will no longer have to fill out the portions regarding servicing and funding. Numbers from the previous report that are required on the current report will carry over. Total compilation numbers will autofill so that the reporting will be substantially easier. These NMLS 2.0 changes will not be effective until January of 2019, so do not expect immediate relief, but we are moving in the right direction. With the uncertainty of the future of Dodd-Frank and the CFPB, the concern was brought up of a return to a patchwork quilt of varying state regulations that were prevalent in the era of sub-prime control. Many states have vowed to take over the CFPB’s tasks and those of Dodd-Frank. If these regulations are repealed or altered, much in the same way many states and municipalities have taken up the conservation torch after the dropping of the Paris Accord on a national basis. Many of you will remember the difficulty of doing business in different states and having wholesalers pull out due to local regulations. In light of these concerns, the biggest request was for guidance from CFPB and regulators so that industry knows the right way to adhere to the many regulations. Companies, large and small, want to do the loan origination business the right way, the compliant way, but want some help in doing that. There is more to come, but rest-assured, NAMB is there for you! Rocke Andrews, CMC, CRMS is Immediate Past President of NAMB—The Association of Mortgage Professionals. He may be reached by e-mail at RAndrews@LendingArizona.net.
NAMB Education Corner: It’s That Time of Year … By Bob Sweeney, CRMS
It’s that time of year when we need to start thinking about taking our annual eight hours of continuing education. We only have two or three months left before we start renewing our state license(s). Don’t procrastinate. Schedule your education with your favorite education provider or one of the NAMB endorsed providers: Abacus Mortgage Training and Education, Mortgage Educators and Compliance, and MortgageEducation.com. On July 18, NAMB hosted a Webinar by Ron Hughes, Senior VP of Business Development with PitchPoint Solutions, about the credit bureau’s new public records policies and he shared information on solutions. It was extremely informative and one of our most
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successful Webinars to date, attended by more than 160 members. I want to thank Ben Derouchie, Senior Account Executive at Avantus, for sponsoring this Webinar. We plan on having Webinars on the new HMDA regulations and the New 1003 in September and October. In preparation for these Webinars, you may want to become familiar with the new changes. The following are a few links to Web sites that I thought may be helpful. HMDA l SterlingComplianceLLC.com/wpcontent/uploads/2016/04/HMDAFactSheet.pdf l ConsumerFinance.gov/PolicyCompliance/Guidance/Implementation-Guidance/HMDAImplementation l BallardSpahr.com/AlertsPublications/LegalAlerts/2015-10-21Summary-of-Final-Rule-Amending-HMDA.aspx
join me as a volunteer mentor. So far, the response has been excellent. The following is a list of individuals who have contacted me to volunteer as mentors: Bob Sweeney, CRMS; Ginger Bell; Sonja Grant Wheeler; Andrew Russell; Dana Chadidi and Donald Opeka. I will be presenting the concept of a Mentorship Program to the NAMB Board this month and will be getting back to each volunteer to identify their areas of expertise. If you have an interest in becoming a mentor, please contact me by phone at (317) 6253287 or e-mail RSweeney@tcunet.com. We welcome any input from all mortgage professionals. If you would be interested in joining NAMB’s 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 a NAMB member, now is a great time to become a member. Go to your state association Web site or NAMB.org and join as a Professional Member.
1003 l FannieMae.com/SingleFamily/Uniform-Residential-LoanApplication
Bob Sweeney, CRMS is 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.
In my previous article, I wrote about the lack of mentors in the mortgage industry, and I put out a challenge to our membership to
NAMB National October 14-16, 2017
The Rio All-Suite Las Vegas Hotel & Casino See page 22 for the program of events!
l NAMB Testifies Before Congress l NAMB Works With the CFPB
How to Apply for your National Lending Integrity Seal LendingIntegrity.org Click on EARN the Seal NAMB members ONLY–Log in to the Lending Integrity site with your NAMB User ID and Password (If you do not know your User ID and Password, type in your e-mail and click log-in and the system will send you a password. If you have any issues, please call (972) 758-1151 or e-mail Membership@NAMB.org).
Lending Integrity Requirements
l NAMB Participates in Multiple Regulatory/CFPB Panels l NAMB Webinars l Full-Time NAMB Lobbyist on Capitol Hill l NAMB Protects Your Business l NAMB Forms Industry Coalitions l NAMB Education
For detailed information, visit NAMB.org.
l l l l l l l l l
The Lending Integrity Seal of Approval is awarded only to mortgage originators who meet specific requirements. To earn the privilege to display the Seal, mortgage brokers and loan officers must: Be an NAMB member Meet the requirements of the SAFE Act Pass a national criminal background check Attend eight hours (or equivalent) of professional development education each year Attend two hours (or equivalent) of ethics training every other year or each license renewal cycle Provide professional references Subscribe to NAMB’s Best Business Practices Agree to NAMB’s Code of Ethics Must be renewed annually
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NAMB.org … JOIN TODAY!
(No additional costs to NAMB members)
NationalMortgageProfessional.com
Why Do I Need NAMB?
Are You an NAMB Lending Integrity Seal of Approval Holder?
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NAMB National October 14-16, 2017
The Rio All-Suite Las Vegas Hotel & Casino NAMB National, set for Oct. 14-16, 2017 at The Rio All-Suite Las Vegas Hotel & Casino is the premier mortgage conference in the United States focusing on you, the mortgage professional. This amazing event will provide you with: l l l l
Network opportunities with old friends, while making new ones at the trade show; Fantastic breakout sessions presented by the industry’s leading companies; A great keynote speaker session featuring Ann Coulter and; An out-of-this-world end-of-event party showcasing Lou Gramm of Foreigner!
Program of events (as of 08/03/17) subject to change
Friday, October 13, 2017 9:00 a.m.-4:00 p.m....... 10:00 a.m.-Noon .......... 1:00 p.m.-3:00 p.m....... 2:00 p.m.-5:00 p.m....... 3:30 p.m.-5:00 p.m.......
Exhibitor Load-In (Pavilion 1-6) NAMB Plus Meeting (Janeiro Board Room) NAMB Board Meeting (Flamengo Board Room) Exhibitor Set-Up (Pavilion 1-6) UWM Advisory Council Meeting–Restricted (Conga) 5:00 p.m.-7:00 p.m....... NAMB Legislative Action Fund Miniature Golf Tournament (Kiss by Monster Mini Golf)
Saturday, October, 14, 2017
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8:00 a.m.-11:00 a.m. .... NAMB Delegate Council & Annual Business Meeting (Pavilion 7) 8:00 a.m.-11:00 a.m. .... Exhibitor Set-Up (Pavilion 1-6) 11:15 a.m.-12:45 p.m... Keynote Speaker Luncheon Featuring Ann Coulter (Pavilion 9) 1:00 p.m.-6:00 p.m....... Exhibit Hall Opens (Pavilion 1-6) 1:00 p.m.-1:50 p.m....... Steve Richman, Sponsored by Franklin American Mortgage (Pavilion 9) 2:00 p.m.-2:50 p.m....... Dominate Your Retail Competition, Sponsored by United Wholesale Mortgage (Pavilion 9) 3:00 p.m.-3:50 p.m....... Driving Sales With Renovation and Construction, Sponsored by American Financial Resources (Pavilion 7) 3:00 p.m.-3:50 p.m....... Driving Productivity, Maximizing Profit and Positioning for Growth in a Dynamic Market Environment, Presented by Stuart Donaldson (Pavilion 9) 3:00 p.m.-3:50 p.m....... Breakout Session: Presented by Angel Oak Mortgage Solutions (Pavilion 10) 3:00 p.m.-3:50 p.m....... Breakout Session: Presented by Carrington Mortgage Services (Pavilion 11) 4:00 p.m.-4:50 p.m....... Frank Garay & Brian Stevens of National Real Estate Post (Pavilion 7) 4:00 p.m.-4:50 p.m....... Breakout Session: To be Determined (Pavilion 9) 4:00 p.m.-4:50 p.m....... Building Brand Equity Through Culture, Sponsored by PRMG (Pavilion 10) 4:00 p.m.-4:50 p.m....... Breakout Session, Presented by Quicken Loans (Pavilion 1) 5:00 p.m.-5:50 p.m....... Breakout Session: One Small Step in Reverse, One Giant Leap for Your Company, Sponsored by Finance of America Reverse LLC (Pavilion 7) 5:00 p.m.-5:50 p.m....... Breakout Session, Presented by Lending Home Inc. (Pavilion 10) 5:00 p.m.-5:50 p.m....... Breakout Session: To be Determined (Pavilion 11) 5:00 p.m.-6:00 p.m....... NAMB National Opening Reception, Sponsored by Caliber Home Loans (Pavilion 1-6)
Sunday, October 15, 2017
10:00 a.m.-6:00 p.m...... Trade Show Floor Opens (Pavilion 1-6) 11:00 a.m.-11:50 a.m. .. Breakout Session, Presented by Calyx Software (Pavilion 7) 11:00 a.m.-11:50 a.m. .. Breakout Session: To be Determined (Pavilion 10) 11:00 a.m.-11:50 a.m. .. Breakout Session, Presented by Reverse Funding (Pavilion 11) Noon-12:50 p.m. ........ Boost Your Business With Fix & Flip Loans and Private Lending, Sponsored by RCN Capital (Pavilion 7) Noon-12:50 p.m. .......... The New Reverse: FHA’s Program Sure Has Changed,” Sponsored by Plaza Home Mortgage (Pavilion 10) Noon-12:50 p.m. .......... Breakout Session, Presented by Stearns (Pavilion 11) 1:00 p.m.-1:50 p.m....... Breakout Session, Presented by REMN (Pavilion 7) 1:00 p.m.-1:50 p.m....... Breakout Session, Presented by Velocity Mortgage (Pavilion 10) 1:00 p.m.-1:50 p.m....... An Introduction to Reverse Mortgages for Originators: Prepare Your Business for the Future by Getting Into Reverse, Sponsored by Reverse Mortgage Funding (Pavilion 11) 2:00 p.m.-2:50 p.m....... Breakout Session, Presented by Reverse Vision (Pavilion 7) 2:00 p.m.-2:50 p.m....... Breakout Session, Presented by Freddie Mac (Pavilion 10) 2:00 p.m.-2:50 p.m....... The Secret Weapon All Loan Originators Need to Know, Sponsored by Plaza Home Mortgage (Pavilion 11) 3:00 p.m.-3:50 p.m....... B.Y.O.B. Power Workshop, Presented by FirstFunding Inc. and Finance of America (Pavilion 7) 3:00 p.m.-3:50 p.m....... Breakout Session: To be Determined (Pavilion 10) 3:00 p.m.-3:50 p.m....... Breakout Session: To be Determined (Pavilion 11) 5:30 p.m.-6:00 p.m....... Raffles, Prizes Announced (Pavilion 1-6) 7:00 p.m.-10:00 p.m..... End of Event Party, Featuring Lou Gramm of Foreigner (Pavilion 9)
Monday, October 16, 2017
8:00 a.m.-5:00 p.m....... Eight-Hour NMLS CE Course (Pavilion 10) 9:00 a.m.-Noon ............ Certification Prep Class (Pavilion 11) 9:30 a.m.-10:50 a.m. .... Secondary Marketing for Brokers, Sponsored by Freedom Mortgage Corporation (Pavilion 9) 11:00 a.m.-Noon .......... NAMB Legislative Update, Featuring NAMB Lobbyist Roy DeLoach (Pavilion 9)
For more information on NAMB National, visit NAMB.org.
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Not All HELOCs Are Created Equal By Rob Walker, CMB, CMT
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esidential mortgage markets have been making a shift from refinance to home equity lending. Rising mortgage rates, shrinking inventories, and strong home value appreciation are motivating homeowners to stay put and remodel their homes. The 2017 LightStream Home Improvement survey found that 59 percent of homeowners plan to increase renovation spending this year and will tap varying strategies to pay for the renovations. Of those strategies, nine percent are expecting to use a Home Equity Line of Credit (HELOC). With high appraisal costs and no guarantees that customers will create outstanding balances on HELOCs, many lenders have determined that the “cost” of the valuation isn’t commensurate with the “value” of the information in the underwriting process. In response, lenders are leveraging AVMs for their proven accuracy, quick turn-time, and costs 1/10 of traditional appraisal. The best AVMs deliver estimates with meaningful confidence scores, have remarkably high hit rates, and are rigorously tested. If time and origination costs are critical and revenue streams are uncertain at best, why engage in costly valuations like drive-by appraisals? Therefore, AVMs should be used where it makes the most sense—in equity lending, where time and cost are critical, and a low-cost but accurate solution is needed. Some have argued that AVM accuracy cannot be trusted. Then, the definition of an accurate valuation must first be defined. No matter what your answer is, AVMs can answer it with a great deal of statistical rigor that no appraiser can. If you know your desired valuation “accuracy” level, there is an AVM solution that will get you there. The only variable is that higher levels of valuation accuracy tend to be associated with lower AVM hit rates. In the end, the trade-off between risk and cost is one that can easily be made at the lender level and executed with AVMs and a powerful AVM platform like VeroSELECT. Before firing up the AVM tool, it’s important to recognize that not all HELOCs are created equal. Each borrower has different credit standings which produce different requirements for the lender. Therefore, each lender will deploy varying valuation risk management policies. A riskier applicant may require further valuation rigor, while a great credit standing applicant may be given a wider aperture in terms of property value. Today, lenders require absolute control over their valuation workflow and credit policies. For added confidence, they require transparent risk management that creates audit trails for decision logic changes related to AVM implementation and usage. VeroSELECT lets lenders put all their decision criteria into the system and it will make the right decision that is consistent with the lender’s credit policy every time. No matter what AVM you choose, VeroSELECT is the best option.
Rob Walker CMB, CMT, is Vice President of Analytics at Veros, an award-winning mortgage technology company. Rob is a 20-plus year veteran of the real estate data and analytics field. He may be reached by phone at (866) 458-3767 or e-mail Communications@Veros.com.
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had a company-wide commitment to charitable efforts and volunteer work. Its Guild Giving Program encourages employees to donate time and money to charitable causes in their own communities.
recent memory compounds the risk of an error on a loan application.” Homeowners’ Expenses Average More Than $9K Annually
Loan Defects on the Rise
The frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications increased by 1.2 percent from May to June, according to the latest First American Loan Application Defect Index report. On a yearover-year basis, the Defect Index shot up by 16.7 percent last month. The Defect Index for refinance transactions in June increased 2.9 percent month-over-month, and was 16.7 percent higher than a year ago. The Defect Index for purchase transactions was 1.1 percent higher when compared to May and 13.8 percent higher compared to a year ago. The five states with the greatest year-over-year increase in defect frequency in June were South Dakota (66.7 percent), North Dakota (52.2 percent), Wyoming (46.3 percent), West Virginia (37.9 percent) and North Carolina (35.3 percent). No state recorded a yearover-year decrease in defect frequency. Among the major metro areas, the five markets with the greatest year-over-year increase in defect frequency last month were Raleigh, N.C. (49.2 percent), Charlotte, N.C. (26.8 percent), New Orleans (25.6 percent), Tampa (23.4 percent) and San Jose (23.3 percent). No major metro saw a year-over-year decrease in defect frequency. “Following seven straight months of increases, the Loan Application Defect Index is now at the same level as almost two years ago in July 2015,” said Mark Fleming, Chief Economist at First American. “The market shift toward more purchase mortgages, coupled with rising rates and tight inventory, is generating the consistent upward trend in defect risk. Purchase transactions are inherently more at risk of defects, fraud and misrepresentation, and the pressures resulting from one of the strongest sellers’ markets in
The American Dream comes with the reality of pricey expenses related to property ownership and maintenance, according to new data from Zillow and Thumbtack. On a national average, an average $6,059 per year is spent to cover the costs of homeowners’ insurance, property taxes and utilities. Home improvement projects that are outsourced to a vendor can cost more than $3,021 a year on average. In some of the more expensive housing markets, these costs are considerably steeper. “Determining how much a home will ultimately cost you each year and what you can afford is one of the most challenging aspects of homebuying, especially for first-time buyers,” said Svenja Gudell, Zillow’s Chief Economist. “Before starting a home search, take a good look at your finances to determine a monthly payment range you can comfortably afford. While that big back yard or larger home may be appealing, it is important to consider how much maintaining those spaces could cost you.” Hensarling Seeks Hatch Act Probe of Cordray
The Chairman of the House Financial Services Committee is seeking a federal investigation into whether Consumer Financial Protection Bureau (CFPB) Director Richard Cordray is violating the Hatch Act in connection with his potential run for Ohio Governor. Cleveland.com reported that Rep. Jeb Hensarling (R-TX) has asked U.S. Acting Special Counsel Adam Miles on Friday to review whether Cordray ran afoul of the Hatch Act, which prohibits employees within the federal government’s executive branch from engaging in political continued on page 26
NAMB+ is an independent, wholly-owned, for-profit marketing subsidiary of NAMB, The Association of Mortgage Professionals. Dear Mortgage Professional, As summer draws to its end, our collective attention shifts and we begin focusing on back-to-school, Friday night football games, the return of crisp autumn air, and of course, NAMB National! NAMB National is the premiere national event for mortgage professionals annually, and this year is going to be the biggest and best convention yet! We will be at the exciting Rio, All-Suite Hotel & Casino in Las Vegas, October 14-16, and this year NAMB+ will have its own double exhibition booth where we will be showcasing all our tremendous NAMB+ Endorsed Providers. If you haven’t done so already, I urge you to register and make your hotel reservations today, as space is definitely filling-up. Many of our NAMB+ Endorsed Providers will be at NAMB National, which
will make it the perfect opportunity to enhance your conference experience by connecting directly with these companies and taking advantage of the deep discounts and special programs offered exclusively to NAMB Members. If you can’t wait until October to start saving, visit NAMBPlus.com to unlock all the details about our Endorsed Providers and the special offers and deals that are available to you as a NAMB Member. 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.
NAMB members receive a 15% discount on all Custom Canvas Prints products and services!
InfoSight, Inc. offers proven and affordable cyber security, risk management, IT Infrastructure and regulatory
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/.
Sarma gives you access to their extensive resources including: merged reports from the three top credit bureaus, CreditXpert tools, AVM Reports, SocialValidate, TRV Verification, Interface with over 30 LOS, Fannie and Freddie connection, Verification of employment/deposit and much more. Please visit http://www.sarma.com/quickqual/ 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
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.
25 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.
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!
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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.
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
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.
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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.
compliance solutions. Visit www.infosightinc.com or contact us at 305-828-1003 / 877-577-9703.
Maryland Eliminates the Duplication of Disclosure Requirements for TRID Loans By Gavin T. Ales
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n May 4, 2017, the state of Maryland enacted Senate Bill 392 (SB 392), which became effective on July 1, 2017. The Bill’s purpose was to eliminate duplicative disclosures as required by both Maryland and federal laws for closed-end loans secured by a first-lien deed of trust or first-lien mortgage on a one- to four-family home occupied by the borrower as the borrower’s primary residence. Prior to the enactment of SB 392 into law, for first-lien loans secured by a borrower’s primary residence, a Loan Estimate (LE) had to be provided to the borrower, as well as a Maryland Financing Agreement. In the case of the LE, the LE must be provided within three business days of receiving a loan application. The Financing Agreement must be provided within 10 business days after a loan application is completed. And, prior to closing of the loan, a Closing Disclosure (CD) would have to be provided (at least three business days prior to consummation of the loan), and if the provisions of the Financing Agreement were subject to change or determination after its execution, a Maryland Commitment also would have to be provided to the borrower at least 72 hours before consummation. With the passage of SB 392 into law, only the LE and CD need to be provided to the borrower at the appropriate time during the loan origination process. The Maryland Commissioner of Financial Regulation noted in the Fiscal and Policy Note for SB 392 that the federal LE and CD under the TILA-RESPA Integration Disclosure (TRID) rule provide the same information contained in the Maryland Financing Agreement and Commitment. Accordingly, lenders may want to consider not providing the Financing Agreement and Commitment to the borrower when the TRID rule applies to first-lien, closed-end loans secured by a borrower’s primary residence in Maryland. Note that the Financing Agreement and Commitment shall continue to apply to all non-TRID loans, including, but not limited to, home equity lines of credit (HELOCs), reverse mortgages and mortgages secured by a mobile home or by a dwelling that is not attached to real property. Note further that the Financing Agreement and Commitment must be provided by lenders who make five or fewer loans per year. Maryland’s elimination of duplicate borrower disclosures under prescribed circumstances is a welcome change, reducing the possibility of borrower confusion and facilitating a more efficient origination process for the lender involved.
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.
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nmp news flash
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activity. Hensarling highlighted media reports involving comments by Ohio Supreme Court Justice Bill O’Neill that insisted Cordray is planning to run for governor. O’Neill stated that he was contacted by a mutual friend of Cordray’s regarding the CFPB director’s plans and, as a result, opted not to pursue the office next year. Although Cordray has not announced any plans to seek state office in Ohio, Hensarling wrote to Miles noting that “if this occurred, it appears that Director Cordray indirectly contacted a potential primary rival to secure the rival’s commitment not to run for office.” Hensarling added that if this action occurred, it “may reasonably be construed” as a Hatch Act violation. Cordray did not publicly comment on Hensarling’s concerns.
cautioned that the issue should be the basis of a conversation and not a Washington-rooted monologue. “The government works for the people, the people don’t work for the government,” he said. “We need to listen carefully to what people are saying, and react in a way that increases everyone’s freedom. Through good health practices, good financial health [and] creative leveraging of finances, we’ll meet the needs of seniors and maintain their independence.”
HUD’s Carson Warns of Senior Housing Crisis
The Federal Housing Finance Agency (FHFA) has reached a $5.5 billion agreement with Royal Bank of Scotland Group (RBS) that settles charges that the financial institution allegedly violated federal and state securities laws in connection with its private-label residential mortgagebacked securities trusts that were purchased by Fannie Mae and Freddie Mac between 2005 and 2007. Under the terms of the agreement, RBS will pay approximately $4.525 billion to Freddie Mac and approximately $975 million to Fannie Mae, while certain claims against Royal Bank of Scotland related to the securities involved will be released. The bank is not required to offer an admission of guilt as part of this settlement. The FHFA added that this case represents its 17th settlement against financial services companies in connection to alleged violations of various statutory provisions governing the mortgage finance industry.
The continued rise in home prices could have a deleterious impact on the state of senior housing, according to Dr. Ben Carson, the secretary of Housing and Urban Development (HUD). According to an Orlando Sentinel report, Dr. Carson raised the issue yesterday during his keynote speech at the LeadingAge Florida annual convention. Citing a proverb that “you can gauge a society by the way they treat their elderly,” he noted that market forces are not working in favor of older Americans on fixed incomes. “I’m very concerned about seniors who become destitute, who are forced into low-income housing,” Dr. Carson said. “Many look to HUD for affordable housing or assisted housing, but they confront a brutal reality: The market is becoming more expensive. Inner cities have become high-end markets, pricing low- and middleclass Americans out.” Dr. Carson pointed to HUD’s policies on reverse mortgages, including proposals that limit the initial amount of equity seniors can draw on while requiring a financial assessment to ensure seniors can to continue to pay property taxes and healthcare costs. He also stated his commitment to require lenders fully disclose all conditions of the reverse mortgage. Ultimately, the HUD Secretary
FHFA in $5.5B Settlement With RBS
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@MortgageNewsNetwork.com
Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.
Don’t take our word for it … here’s what brokers are saying about Caliber Wholesale
Wholesale Lending
Here at Caliber Home Loans, Inc., we make time to spend more time assisting our wholesale business partners, no matter how busy the markets may be. If you ever wished it was all about you, relax … at Caliber Wholesale, it is all about you. (And your clients, of course.)
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If you still haven’t discovered why we’re the nation’s #2 Wholesale Lender, contact us today at nmp@caliberhomeloans.com or visit us at www.caliberwholesale.com
Caliber Home Loans, Inc.,3701 Regent Boulevard, Irving, TX 75063. (NMLS #15622). 1-800-401-6587. Copyright©2017. All Rights Reserved. Equal Housing Lender. For real estate and lending professionals only and not for distribution to consumers. This communication may contain information that is privileged, confidential, legally privileged, and/or exempt from disclosure under applicable law. Distribution to the general public is prohibited.
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Coming soon … more of what you’re asking for. Earlier this year we introduced The Ultimate Home Buyer Experience. This high-tech digital mortgage toolkit enabled our business partners to fast-track homebuyers to closing with a lot less paperwork. Now we’re working on a mobile app that will help ensure loan pipelines are always flowing - even when you’re attending an Open House, closing or client meeting.
By Jonathan Foxx
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Record Retention: Evidence of Compliance Under TILA ompliance Matters, presented by Lenders Compliance Group, airs every Friday at 7:00 a.m. Eastern on MortgageNewsNetwork.com. Compliance Matters is brought to you by Mortgage News Network, and the program provides practical advice regarding current mortgage compliance topics. If you would like to contribute a question, please submit it to Compliance@LendersCompliance Group.com.
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Question We are going paperless, but we are unsure about retaining documents under the Truth-inLending Act (TILA), since we know that regulatory enforcement requirements may cause us to hold on to evidence. That goes along with our concerns about retaining paper copies, too. You may have answered a question like this one before, but we are still unsure of what evidence we need to retain to show compliance. So, we want to know what is the timeline for retaining documents beyond the required time required in case of
regulatory enforcement against us? Also, must we keep paper copies as evidence of compliance? Answer This is a complicated question about regulatory enforcement parameters, with respect to record retention. Because you have framed your question in the context of TILA, this response will be narrowed to Regulation Z, the implementing regulation of TILA. Except with respect to advertising, creditors must retain evidence of compliance with Regulation Z for a period of two years after the date the disclosures are required to be made or action is required to be taken. Enforcement of TILA, however, may require the creditor to retain records for longer periods necessary to carry out enforcement responsibilities and administrative actions. In effect, this means that administrative agencies responsible for enforcing a subject regulation may require creditors under their jurisdictions to retain records for a longer period, if necessary to perform their enforcement responsibilities.
[12 CFR § 226.25(a)] As to paper retention, in terms of adequate evidence of compliance, actual paper copies of disclosures or other business records are not absolutely necessary to be retained. Evidence may be retained on microfilm, microfiche, computer programs, or by any other method that reproduces records accurately. As a matter of fact, the creditor needs to retain only enough information to reconstruct the required disclosures or other records. By way of example, the creditor
does not need to retain each open-end, periodic statement for purposes of complying with record retention of a homeequity planâ&#x20AC;&#x2122;s periodic statement, as long as the specific information on each statement can be retrieved. In other words, written procedures for compliance with the disclosure requirements and a sample periodic statement represent adequate evidence of compliance. [12 CFR Supplement I to 226, Official Staff Interpretations, § 226.25(a)-2]
Jonathan Foxx, Ph.D., MBA, is the Managing Director of Lenders Compliance Group, the first and only full-service, mortgage risk management firm in the United States, specializing exclusively in outsourced mortgage compliance and offering a suite of services in residential mortgage banking for banks and non-banks. Information contained in this article is not intended to be and is not a source of legal advice. If you would like to contribute a question, please submit it to Compliance@LendersComplianceGroup.com.
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Don’t Let On-the-Job Stress Lead to Burnout By Deanne DeMarco, M.A., RCCI
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The first step in preventing burnout Learn to relax and let go of the stress in your life. The type of stress in your life is not nearly as important as your ability to control it. It is critical to admit when the stress in your life is beginning to reach critical levels. When stress starts to builddon’t wait- start burnout and stress reduction strategies immediately. Stress reduction strategies 1. Use humor: Change your perspective on your situation. Learn to smile, look for the humor in the workplace. Sometimes looking at a situation or a problem in a different light can help you to feel differently about the event. A recent UCLA Medical Center study suggests that laughter and humor can help to reduce stress. Laugh: it’s good for you! 2. Pace yourself: Maintain a practical schedule with your expectations. Identify job activities that could be simplified, and plan thoroughly to prevent last minute problems. Use good time management strategies to help pace the workload. 3. Reinforcement: Value yourself and your contribution to the company. Do the best work you can, even if you feel no one is noticing. Keep reinforcing positive thoughts in your mind. 4. Release stressful emotion: Being frequently angry, filled with rage or anxiety, is not healthy. Taking a brisk walk or some other physical activity using the large muscles, will help release pent up emotions and aid the body to eliminate harmful chemical responses. 5. Practice good nutrition: Stress robs your body of needed vitamins and minerals such as vitamin B and vitamin C, potassium, calcium, and zinc. A number of research studies have concluded that stress increases susceptibility to illness. Eating fresh fruits and vegetables, maintaining a balanced continued on page 34
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Who gets burnout? Burnout can happen to anyone; it can affect everyone in any profession and at every level in the organization. When a team member is continually pushed to the limit and doesn’t have the time to relax or unwind, stress can build.
The impact of stress overload and burnout The impact of unmanaged stress can result in low morale, increased absenteeism, lost productivity, declined performance, increased mistakes, and increased workplace accidents. Stress overload costs the company money in higher turnover, absenteeism, and lost productivity.
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or the past eight years, Joel was one of the best employees on the team. He always came to work on time, seldom took sick days, produced top quality work and got the project completed even if he had to stay late. Joel often assisted team members if they ran into problems on their projects. Lately, Joel has been calling in sick, coming in late, and complaining of stomach cramps. At work Joel is irritable; both customers and co-workers complain about Joel’s behavior. Additionally, when at work Joel complains of headaches, the quality of his work has decreased, and it takes him longer to get a project completed. What happened to him? Joel is most likely suffering from the $300 billion profit killer: Job burnout and stress. We all experience a certain level of stress in our daily lives. A certain amount of good stress called eustress provides stimulation, excitement, and provides a competitive edge. However, continual job deadlines, personal demands, personal finances, difficult relationships, and demanding bosses can all make you feel off balance and give you the sense that you are spinning out of control. Even the most confident overachiever can be nudged off-balance. Stress hurts your productivity and takes a serious toll on your mind and body. Dr. Hans Selye, the stress research pioneer, describes stress as the physiological reaction to external and internal events. Burnout is the physical, emotional and mental response to constant high levels of stress. When stress remains unmanaged, burnout can occur. The inability for the mind and body to relax after continued stressful events can cause the person to become obsessed over personal problems, which can lead to burnout. Burnout usually occurs when stress builds and a person feels they are no longer able to control their world, and lack motivation to proceed. Sometimes the physical and psychological problems can become severe enough to cause illness and the inability to function on the job. The worker feels overwhelmed and his or her career is actually threatened.
What Chocolat C “Growth is never by mere chance; it is the result of forces working together.” —James Cash Penney
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emember those commercials for Reese’s Peanut Butter Cups where a person would scream, “Hey, you got your chocolate in my peanut butter!”? At the instant the accident happened, both people were flustered. But then the magic. They tasted the result and bam … it was a marriage made in Heaven. One of the all-time great ad campaigns. Some of the best things in life come when two seemingly unrelated items come together. True in life and absolutely true in business. It goes by many names:
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Partnering, co-branding or co-ops. No matter what you call it, it can be a life-saver and a smart way for both businesses to get ahead and support each other in the process. There are just so many benefits … it can save money, improve perceptions about your brand, and of course, grow your business. If you’re thinking of diving into co-branding waters, here are some things to keep in mind:
good feel for this, begin exploring other local businesses that can complement your efforts to reach and serve that customer.
1. Understand your market Who is it that you want to reach with your mortgage business? Dig deep to develop a perfectly clear picture of your exact, ideal customer. Once you have a really
3. Develop a plan Draw up specific goals and actions, and assign responsibilities with deadlines. Share expectations. Identify strengths and identify how best to
2. Research potential partners thoroughly Evaluate carefully and understand a potential partner’s vision and mission to unearth the win-wins. Identify all that both businesses will get from their return on their investments.
ate and Peanut Butter Can Teach You About Growing Your Mortgage Business By Bubba Mills
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5. Review results regularly Take the time to assess if the partnership is meeting–or at least moving toward–your goals. Results and achievements rarely occur immediately. If your expectations aren’t being met after a reasonable time, then
maybe it’s time to explore alternatives. 6. Resolve disagreements early Yes, disagreements will happen, but handling them early and quickly will help keep the boat afloat. Never let bad feelings fester by making it clear that either partner can approach the other anytime. You should consider scheduling regular sit downs to clear the air. Once a week is a good place to start.
Bubba Mills is Chief Executive Officer and Owner of Corcoran Consulting & Coaching Inc. He may be reached by phone at (800) 957-8353 or visit CorcoranCoaching.com.
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4. Reduce risks Sure, any time you partner, there are risks. To reduce them, choose partners with deep synergy, who have similar values, and who best complement your efforts. Also,
pick partners who are already leaders in their niche. And keep full approval and refusal rights, and protect brand logo and trademark integrity.
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apply them to the business. Put metrics in place to measure progress. Create a mutually agreed-upon exit strategy. Keep the lines of communicate open and flowing constantly.
Branch Managers Have the Hardest Job in Our Industry By Steve Rennie
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e have heard branch leadership say it many times over the last 20 years. “How do I recruit when I’m producing and managing my team of producers?” You currently juggle managing relationships with your trusted referral partners and clients, local operations staff, as well as your sales team and all the “issues” that come up on a daily basis. How do you create an executable recruiting plan that doesn’t spin you out of control? The “usual and customary” answer is to time block, but that is sometimes easier said than done. We have said for years that recruiting is a process and not an event, and this simple statement has been proven as a fact. Having a relationship established is required if or when someone you are recruiting begins to seriously evaluate their options for a change. That is a process that takes time and patience. The most successful managers balance their current business with growing (and protecting from normal attrition) their branch production over time by adding to their team. We have seen this work with consistent and predictable systems and processes. But it doesn’t stop there. Managers that have success over time adding and retaining people to their team form habits and behaviors to support this part of their job and responsibility. Here are five things you can do to replicate what the pros do. l
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Target list: Create a target list for your market. Be prepared to add and remove (scrub) leads from this list based upon your Model Match and specific branch/company value proposition. Schedule time each week to recruit: Begin with two 30 min. time slots and make sure it is visible on your calendar. Focus specifically on connecting with new relationships. Know your USPs and value prop: Communication around your company value proposition should be consistent with how your leadership and team tells the story and describes the Six Core Components of your organization: Business Model, Leadership, Culture, Operations, Technology and Geography. Messages and opener: Have your “new relationship,” aka, cold call message, opener and follow-up message, scripts down. Have an accountability partner: Leverage your leadership to tag team and hold you accountable to the tasks needed to achieve your goal.
Applying these five aspects into your weekly plan will help you form habits and behaviors to support the future growth of your production team–even if you are busy producing and managing a team. This will only happen when you invest time and do the work. As always, feel free to contact us with questions or other tips and techniques on how you can build relationships with relevant producers in your market ultimately leading to hires
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
on-the-job stress
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diet and limiting the amount of caffeine, nicotine, and sugar promotes health and improves your ability to handle difficult situations.
efficiency or productivity l Self-medication: increased use of alcohol, tranquilizers, or other mood altering drugs l Skipping rest and food breaks
6. Talk to someone: Share your burden; discuss stressful events with another person. Often an associate, friend or Employee Assistance Program (EAP) counselor can help you see the lighter side or offer a fresh approach to the problem.
Management strategies Burnout consumes enthusiasm and cannot be ignored. Here are some tips for mangers to help employee stress and burnout. First, make sure your employees schedule their vacation time and actually take the time off. Don’t call them when they are on scheduled vacation time! Second, help employees plan periodic breaks—maybe walk around to all your employees with a bottle of water or an ice cream bar or a piece candy. It’s a great way to give everyone a quick mental break and put a smile on your employees’ faces too. Third, plan a brown bag lunch. Have everyone bring their lunch to a workroom or sectioned off part of the cafeteria. Lead the conversation around vacations, hobbies or light hearted topics. This is a great way to help your employees release a little stress, and keep employees motivated too. Fourth, help employees with good time management skills. Help them to set realistic project goals and milestone markers. Fifth, keep employees in the loop. Employees like to be informed with company changes and progress. Lastly, rewards. Rewards include praise, and anything else that is positive. Employees need to feel that they are recognized and valued for their good work. Personal demands in addition to on-the-job demands can make you feel off-balance overly stressed. By following these tips, you’ll be better equipped to recognize the symptoms of stress and avoid job burnout in the future.
7. Take time for yourself: Take stress breaks during the day. Stretch at your desk. Take short vacations at least twice a year. It is important to take time off for yourself especially during stressful periods. Symptoms of stress Are you one of the many suffering from stress? Below are some signs to watch for. Physical symptoms: l Feeling fatigued, exhausted or drained l Irritability or lower tolerance levels l Muscle tension, joint aches, headaches l Upset stomach or loss of appetite l Susceptibility to illness Emotional symptoms: l Depression l Frustration l Loss of self-esteem l Feeling “powerless” or “trapped” l Anxiety l Nervousness Behavioral symptoms: l Inability to laugh at daily situations l Social withdrawal: pulling away from co-workers, peers, and family members l Job performance change: Increased tardiness, absenteeism, or increased use of sick leave, and decreased
Deanne DeMarco, M.A., RCCI is an award-winning speaker and consultant, specializing in improving teambuilding, decision-making, stress reduction and communication skills. Deanne is the author of four books, and her articles have been published in more than 300 trade magazines and professional journals. Her coaching program won national recognition from “Training Magazine’s Top 100.” She may be reached by phone at (708) 836-0118 or e-mail Deanne@DeanneDeMarco.com.
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. Š2017 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.
Whistleblowing: Part II By Andy W. Harris, CRMS
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36 few months ago, we discussed whistleblowing with the Consumer Financial Protection Bureau (CFPB) and the pros and cons that can arise if the industry gets proactive about reporting bad or consumer-harming behavior to regulators. We all have stories and know of the greedy issues our industry is faced with when it comes to illegal and unethical relationships, kick-backs, steering, etc. After the last article, I was contacted by a fellow colleague and thought I would share the stories they offered as it relates to this subject. This person investigated filing a complaint on a local competitor relating to Section 8 of the Real Estate Settlement and Procedures Act (RESPA) and the violations we all commonly see. These range from paying marketing and advertising expenses of the referral partner hidden as a Marketing Service Agreement (MSA), desk rentals four times the market rent, Web site design, and actual cash among other creative methods to steer business. Their market, as
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many are, are getting even more aggressive with a purchasedriven, higher-rate climate to try to buy business with refinances drying up. He was told by the CFPB that if the allegations were eventually proven, his name would be released during the investigation. I found that concerning as I’ve heard directly from the Bureau that you can certainly provide anonymous tips in many meetings and they have encouraged it. Upon hearing this news, I tried to reach out to the CFPB for comment and feedback, but I was unable to get a live person on the phone through their Whistleblower Hotline at (855) 695-7974. From listening to the message, they also commented that an anonymous tip is possible, but highly encouraged that you leave your contact information as it helps in the investigation. The concern here is that it is challenging to report valid issues without feeling at-risk for potential involvement, litigation or questioning yourself. This is a problem. Sending an e-mail to Whistleblower@CFPB.gov certainly would not be anonymous unless you were
creative from the I.P. Address and e-mail used for sending, but that seems ridiculous that you cannot potentially keep your information confidential and private for reporting activity that may clearly harm the consumer. You can possibly block your number and leave a message on the hotline, but is this really necessary and would it hold less weight to the allegation for them to research without validating the source? The same colleague mentioned a recent story where he and one of his LOs met with the owner and manager of a newer real estate office in their market. At the end of the meeting, the LO asked how they could develop a better relationship and suggested training, education, etc. The manager looked right at them and said, “We are a ‘pay to play’ office. The mortgage companies we refer either pay for our advertising or buy the leads for our agents.” Listen, this needs to
stop and we need these people accountable for their actions and words that harm the clients they are meant to serve and protect. Enough is enough, we all have way too many stories, and while the CFPB may not have the manpower, anonymous tips should be open and available without recourse to at least investigate or confirm if a valid concern. Have any of you ever filed a complaint or blown the whistle? Was it truly anonymous? Was it investigated? What was the outcome? Please, let us know! 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.”
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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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 Completes $210.45 Million Securitization of NonPrime Residential Mortgages
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Angel Oak Capital Advisors has announced the completion of AOMT 2017-2, a $210.45 million securitization of non-prime residential mortgages. The securitization is backed by nonQualified Mortgages (non-QM) which were fully sourced through the firm’s three affiliated mortgage lenders–Angel Oak Mortgage Solutions, Angel Oak Home Loans and Angel Oak Prime Bridge. The senior tranche of AOMT 2017-2 received a AAA-rating from both S&P and DBRS and represents Angel Oak’s success in helping to revitalize the non-QM marketplace. “We had solid execution due to the large securitized investor following that we have developed over the last two years. In fact, this was the tightest execution in the non-QM market to date, furthering our brand recognition and leadership in the non-QM securitization space,” said Sreeni Prabhu, Angel Oak’s Co-Chief Executive Officer and Chief Information Officer. This transaction marks Angel Oak’s fourth securitization since 2015, accounting for more than $630 million in total securitized residential mortgage loans. All four securitizations have been backed by mortgages originated through Angel Oak’s affiliated lenders. “We believe investors like Angel Oak’s vertically integrated issuer model,” said Prabhu. “This is unique in the marketplace and offers them a “pure play” exposure to Angel Oak’s origination and underwriting capabilities.”
Caliber Home Loans Receives Military Friendly Designation
Caliber Home Loans has announced its new “Military Friendly” brand designation by Victory Media, publisher of G.I. Jobs and Military Friendly ratings. Introduced this year, the inaugural list of 54 Military Friendly brands provide servicemembers, veterans and military families with a trusted source to discover the best companies and consumer products. Caliber received this designation due to its company-wide investment in supporting America’s military and their families. In addition to its Military and Veteran Lending Professionals (CMVLPs), Caliber has met or exceeded the required Military Friendly benchmark standards in other areas, including: Policies and governance; Transparency; Consumer indicators; and Community indicators. Castle & Cooke Mortgage Exceeding Branch Growth Goal
Castle & Cooke Mortgage LLC has added 14 branches across the nation in 2017, marking a 33 percent growth rate from the end of 2016. The company not only exceeded its original expectation of opening 12 branches this year with plans to open several more offices in the coming months. “The level of growth Castle &
Cooke Mortgage has experienced this year is a true testament not only to the hard work and dedication of our staff, but also to the commitment we have to creating the kind of company people want to work for,” said Adam Thorpe, President and Chief Operating Officer of Castle & Cooke Mortgage. “As our company expands, my goal is to maintain a workplace model where our employees feel heard, valued and supported. Some of our best ideas come from those who have their ears closest to the ground, and as long as we keep listening to our employees and providing them with the tools they need to be successful, I am confident we will continue to grow.” While Castle & Cooke Mortgage is licensed in 32 states, much of the 2017 growth has happened in the Mid-South region, particularly in Tennessee, which experienced the highest number of new branch openings this year. The state now boasts locations in Brentwood, Chattanooga, Clarksville, Hendersonville, Indian Lake, Memphis, Murfreesboro and Nashville. New branches have also been added in Mississippi and Missouri, as well as in California, Hawaii and Nevada. The company’s recent surge is reflective of Castle & Cooke Mortgage’s emphasis on recruiting. “A company can only be as good as the people who work for it, and I couldn’t be happier with the caliber of employees we’ve hired this year,” said Mike Querrey, National Sales Manager for Castle & Cooke Mortgage. “Our standard of excellence is continually raised as
we focus on recruiting talented, experienced and motivated staff, both for our corporate office as well as our branch locations throughout the nation. Our most valuable assets are the members of our Castle & Cooke Mortgage family.” Flagstar Closes Inaugural RMBS Securitization
Flagstar Bancorp has announced it has closed its securitization of $444 million of residential mortgagebacked certificates (RMBS) issued by Flagstar Mortgage Trust 2017-1 (FSMT 2017-1). The certificates are supported by 668 jumbo prime (75 percent) and high-balance conforming (25 percent) loans. The pool comprises loans Flagstar originated through its retail, broker and correspondent channels. “We believe that the RMBS program offers a more efficient way of selling jumbo mortgages into the market, which should help us competitively,” said Alessandro P. DiNello, Flagstar’s President and Chief Executive Officer. “This competitive advantage should help us, especially with the recent acquisition of Opes Advisors and our continued efforts to recruit toptier mortgage loan producers. I expect that over time, and if we’re successful, we could expect to expand the RMBS program to other residential mortgage loan products.” The collateral pool consists of high-quality 30- and 15-year, fully amortizing high balance conforming and jumbo fixed-rate Safe Harbor Qualified Mortgage loans to borrowers with strong credit profiles and low leverage. The pool has a weighted average FICO score
of 771 and an original combined loan-to-value ratio of 63.5 percent. The collateral attributes of the pool are generally consistent with recent prime transactions. OnCourse Learning Partners With Strategic Compliance Partners
Third-Party Origination (TPO) channel following the acquisition of Stonegate Mortgage Corporation. This new structure will allow Home
(Southwest). Inside Sales will be led by Managing Director Eddie Brown and Renovation Lending by Brad Smith. loanDepot to Establish mello Innovation Lab loanDepot has announced details of its new standalone tech campus, the mello Innovation Lab. At this unique facility, the loanDepot tech team will continue to innovate and expand mello, the continued on page 90
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Home Point Financial Expands TPO Channel Home Point Financial Corporation has announced the expansion of its
nationwide, while providing enhanced levels of service, a full product suite and competitive pricing,” said Patterson. “With several new technology improvements designed to simplify the process for our clients on the horizon, there’s never been a better time to partner with Home Point.” The TPO channel will be expanded into five geographical regions reporting to Patterson. Regional Managing Directors include: Paul Wyner (Northeast), Jeff Lochmandy (Southeast), John Pantalone (Midwest), Patrick McGrath (Northwest), Mary Shaver
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OnCourse Learning has announced a partnership with Strategic Compliance Partners (SCP). The OnCourse Learning-SCP alliance will make available the following services: Mortgage and compliance education; cloud-based vendor management solutions; attorneydriven, fixed price compliance programs; mortgage compliancefocused consulting services; and collaboration benefits. “At OnCourse Learning, we are committed to providing our clients top-notch products and services,” said Brett Shively, Executive Vice President of OnCourse Learning Financial Services. “Partnering with Strategic Compliance Partners provides OnCourse Learning with the ability to help financial institutions efficiently and effectively manage their compliance programs, save time and money, all while providing professional resources to their compliance departments.” OnCourse Learning Financial Services is a provider of governance, risk, compliance and professional development and compliance training for the mortgage, bank, credit union, gaming and non-bank financial services industries via a comprehensive course catalog and a sophisticated learning management system. SCP provides innovative compliance management and consulting services for lenders of all sizes. With a team that includes accomplished attorneys and experienced compliance practitioners, SCP provides innovative technologies and legal insight to deliver outstanding compliance consulting management and services to mortgage banks, warehouse banks, mortgage brokers and other financial institutions.
Point to increase its wholesale client base by expanding the geographic reach and number of third-party originators the channel will serve. With the implementation of new regional divisions, Home Point is extending its senior management structure to drive its strategic growth. Lisa Patterson, Executive Managing Director of TPO Production, will continue to lead Home Point’s TPO channel and report to Chief Production Officer Brian Brizard. “This expansion will allow Home Point to more effectively serve our wholesale clients
MONDAY
Master the Markets with Barry Habib
Recap of key economic events that took place over the past week and a look ahead to events that will potentially impact interest rates in the housing market. Brought to you by Airs every Monday at 7 a.m. For more information on Planet Home Lending, please visit www.PHLTPO.com
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Centurion Roundtable Interviews
Learn the secrets of success from this elite group of high volume originators. Brought to you by Airs every Monday at 11 a.m. For more information on PRMG, visit prmg.net/wholesale
TUESDAY
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The 60 Second Originator
Over 80% of home buyers and refinance consumers start their searches online. If you don’t possess the knowledge and practices required to convert loans from the internet then you need the 60 Second Originator to grow your origination. Brought to you by Airs every Tuesday at 7 a.m. For more information on LoanTek visit loantek.com
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WEDNESDAY Top Originator Secrets with Brian Sacks Closing more, making more and still enjoying life! Brought to you by Airs every Wednesday at 11 a.m. For more information on HomeBridge Financial, visit HomeBridge.com
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Lykken on Leadership
Seven Ways Business Process Improvement Can Save Time BY DAVID LYKKEN
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’ve spent decades in the mortgage industry, and I’ve seen quite a bit. I’ve seen people achieve a great amount of success in their organizations, lose almost everything in a time of economic distress, adapt to the changes, and then get it all back. It’s difficult, but it’s perfectly reasonable that someone could lose all of their money and somehow manage to get it all back. But you know what I’ve never seen during my time in the mortgage industry? No matter how clever, cunning and creative they were, I’ve never known a leader in the mortgage industry to recover lost time. Time is the one resource that you just can’t get back—no matter how hard you try. And that’s why it’s so important that we learn how to use it effectively ... Whenever you seek to learn about business, time management is going to enter the discussion at some point. If you pick up a book at the bookstore, you’ll find a chapter on time management. If you follow a popular business blog, you’ll find an article on time management. If you go to a conference, there will be a workshop or seminar on time management. It’s a topic that we’ve been trying to get right in every industry since the Industrial Revolution. And, in
I
“If there is one time-killer that I what say gets overlooked more than any other … it’s confusion. Oftentimes, employees spend a great deal of time working on tasks without even really knowing what they’re doing or why they’re doing it.” the mortgage industry, it’s just as important as any other. So, what specifically can leaders in the mortgage industry to do manage their time more effectively? Like many others in the industry, I’ve been thinking about this question for a long time. Of course, there is no single answer. But, the more I’ve observed and worked with leaders in the mortgage industry, the more I’ve been convinced that there is one thing more important than anything else when it comes to effective time management: Business process improvement. When I see organizations invest in tightening up their business processes, it’s almost always the case that they manage their time more effectively. In this article, I want to show you a few different reasons why I think that happens... 1. Establishing priorities When you go through the hard work of refining your business processes, the first thing you must to is determine what’s
really important to you. What absolutely has to get done in order for you to run a successful business, and what really just gets in the way of that? You must always ask this question before anything else. Spelling out your priorities reveals what your fundamental purpose is to you and to your team. What is your “why?” Why are you doing what you’re doing—and is that evident in your everyday work? When you refine your business processes, establishing those priorities is the first thing you’ll do. That way, you’ll make sure the things you are getting done within the time you have are the most important things to fulfilling your purpose. 2. Eliminating redundancies If there is one thing that sucks more time out of your workday than anything else, it’s the countless repetitive tasks that exist in a haphazard business process. By default, you’ll notice that different people on your team end up completing the same tasks. When there isn’t clarity on what needs to be done when and by who, the same
thing tends to get done over and over again by different people. When you refine your business process, though, the tasks are assigned to specific people at specific times—so they are much less likely to be repeated. The time you save by eliminating those repetitive tasks will then free you up to accomplish other things. 3. Creating smoother transitions You may not think about it, but there can be a great deal of time lost in transitions during the business process. When a loan is moving from one employee to another, there can be a lag in the communication. Hours, days and sometimes even weeks can go by before a person realizes that a loan has been handed off to them. All of the time that the loan is spent sitting in limbo is time that could and should be used for working on getting it processed. When a business process is restructured and simplified, the transitions will become more straightforward and manageable. Therefore,
breakdowns in communications like these will be come much less frequent and loans will spend much less time just sitting around. Want to get all of that wasted time back during your transitions; look into refining your business process! 4. Clarifying responsibilities If there is one time-killer that I what say gets overlooked more than any other … it’s confusion. Oftentimes, employees spend a great deal of time working on tasks without even really knowing what they’re doing or why they’re doing it. They’re not completely sure what they’re supposed to do, because it was never really explained to them. So, they just give it their best guess and push forward. The problem, of course, is that they often end up doing the wrong things, or doing the right things the wrong way. As a result, they have to start over and try again when the results are insufficient. In refining business processes, you specify who is responsible for each task and how exactly they go about completing it. When that happens, people don’t waste time having to re-do the tasks because they will have known how to do them correctly in the first place.
6. Reducing stress When you work on your business process, it takes a great burden off of your employees. I’ve spoken with a lot of employees in the mortgage industry, and the one thing that troubles most of them is the uncertainty involved with working in any given position. People like to know what’s expected of them. When they don’t, it stresses them out. The stress then causes them to move slower, trying to be overly cautious and deliberate with their work. It also causes more mistakes that have to later be corrected. When you lift this burden by clarifying their roles in the business process, the stress is removed, the speed is improved, and time that you had been losing is redeemed.
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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7. Creating more time for high-level, strategic thinking The last and perhaps most consequential way that strengthening business processes improves time management is that it frees up leadership to do more strategic thinking and planning. All too often, leaders in the mortgage industry spend much of their time putting out fires. The result is that the organization never really moves forward, because the leadership isn’t focused on higher-level, long-term strategy. When you revamp your business process, it will free you up as a leader to do the kind of work that your organization really needs you to be doing. In the end, if you want to save time for your organization, you’ve got to protect your time too. A better business process can help you do that more than just about anything else you can imagine.
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5. Reducing idle time One thing that a business process does is give each employee direction on how they’re supposed to be spending their time. In organizations that don’t have a clear business process, employees just do what they’re responsible for doing and then tend to just wait around until something else comes up. The problem, of course, is that these employees spend a great deal of time waiting. They don’t know what they’re supposed to do in their down time, so they do nothing. The more employees you have on your time, the more this idle time adds up—and the greater the opportunity you are
missing to be more efficient. Refining your business processes can solve this problems by telling people what they’re supposed to be doing while waiting for the next thing.
There Is here is one thing I’ve learned more since I’ve moved here to Florida that affects my life more than anything else. This “thing” was not taught to me by all the books I read, all the papers I write, the TED videos I watch, or any the daily videos from Darren Hardy that cross my computer screen daily. It was taught to me by deepthinking, constant discussion and encouragement from some of the best people I’ve ever met. When Bill Schor first gave me the chance to earn more money by venturing into the sales arena, it seemed like an opportunity to go way beyond the piece of cake. This wasn’t a piece, this was the entire cake, in fact a cake filled with every sweet candy I loved. I viewed the sales world as a place where everyone was having fun all the time: As the way to become free, become part of the elites of the mortgage industry. I was being given the keys to a new Cadillac, Pontiac, Ford convertible and Aston Martin. Wow! How … I could I resist the opportunity to name my own hours, own my own actions and control my own fate, and therefore, my own income. Oh God was I wrong. Bill sent me out to visit the office of Sterling Real Estate on the White Horse Pike (WHP) in Stratford, N.J. Sterling was a house account that was being turned over to me as a reward and incentive. My memory is fogged as to what day, time or season it was that I drove my sixcylinder blue Ford down the WHP to visit these people. They were obviously friends, obviously good people who did almost all of their business with Bill directly. How easy this was going to be. This office alone was going to triple my income. So, as I drove closer and
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The
Mortgage
Godfather
Is Nothing to Fear
I’ve written before about fear. I wrote that Dr. Phil is convinced that fear of rejection is what motivates us. He could be right. Maybe that’s what it is. Maybe it’s fear of success, maybe emotional insecurity, failure, punishment, staring, not-belonging, cats, dogs, cars, elevators, planes … Who really knows? So many studies, so many answers. The one answer that seems to be so elusive is how do we overcome that fear. Most of the time for me, it’s pretty simple. It’s loss of control. We always want to be in control. We always want to determine what to establish as the outcome. We just won’t accept that we have no control other than our own actions and thoughts. We want everyone and everything to happen just the way we want it to. And that is just not up to us. What is going to happen in the next
second is just way beyond our control. Yes, we can control what we do, but what happens next is up is just not up to us. Here is my advice today. Do the right thing all the time. Do what is best based on all the circumstances you are aware of. Be the best person you can be. Give up control to a power higher than all of us put together. I call my higher power God. So when I run into such a set of circumstances that require me to make a decision, overcome a fear, I just give it away. It might not happen immediately. It might take time for us to accept the circumstances as it did when I rode back and forth by the red door. You’ll never know what’s behind the red door until you open it. The opening is in your control. What happens next is not. Go open a lot of doors.
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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@MortgageGodfather.com.
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When I was driving my Ford on the WHP, it wasn’t just once I passed the Sterling Real Estate Office. I did it about five times. Back and forth I drove, every time seeing those red doors as if they were the gates of hell. I was so afraid of what would happen when I opened that door, I became frozen. Fearful of being asked a question I didn’t know the answer to. Fearful that they wouldn’t like me. Fearful that they would have a question I couldn’t answer. Please understand, I had already been an underwriter, a decisionmaker, having made judgments on more files than almost 90 percent of the employees in my previous company. Sterling Real Estate had 125 people working there. I knew I knew what to do about almost anything that had to do with getting someone approved. I was sure of myself. Hell, I knew so much, I was a genius. Then fear overtook me even more. Fear that Bill would want to know what I said to the Realtor. What he said to me and what I said in response. So, I had to decide which fear was going to win. Having spent the first 25 years of my life in fear of retaliation and punishment of a father who scared me to death, I decided that fear of Bill was going to make me go through that red door. I parked the car, went in the office went straight up to the receptionist and asked to see the broker. “Who are you,” she asked. “I’m Ralph Lovuolo from Bond and Mortgage, Bill Schor sent me to see Sid Mark,” I replied. “He’s busy right now, but he was expecting you, so let me ask you a question,” the receptionist replied. She went on with the most bizarre set of circumstances that ever could be imagined. I don’t know how, but I said to let me call Bill and I was sure he would know what to do. And that’s just what happened. One fear overcame another that overcame another. Sex had nothing to do with it.
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closer to the office, sitting there on the corner just like a lollipop my parents had so often given to me so easily and happily to suck on, I found my feelings first confused, then more and more fearful. So, fearful that I could not stop and pull into the parking spot. So, on I drove, at least another mile past the office. The building was so innocuous. It was so unobtrusive: a simple one story three-bedroom house with a bright red door, not more than 1,000-square feet, converted to a real estate office. How could I fear that? What was there to fear? What follows is going to be a stretch for many of you. But for the mind of someone who stretches to help you, it seems to make perfect sense. Freud, in almost all his analysis, thought that what motivated the actions of almost every one of us was the desire for a sexual encounter of some sort. I disagree and I’m not going to allow any dissent. I’m the one writing this, so if you want to disagree, you’re going to have to put your fingers on your keyboard and come up with an argument that makes my assertion moot. As I’ve discovered over the many years I’ve been writing, you just won’t take the time or make the effort to let me know what you think. What motivates most people and everything they do is not sex but fear. It could be positioned that fear of sex could be the most powerful connection of action and emotion, but I’m not going there. If Freud had just seen that he would have made a much more cogent argument to the world and been able to help so many more people. The challenge is that it’s so easy to get people’s attention by mentioning sex and having people see that as a solution to so many of their issues. Let’s make the connection a little more well-defined. If fear, as I allege is the overriding emotion of our time, then how do we confront it and overcome it?
BY RALPH LOVUOLO SR.
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By Jill Kravig Burns
We had no right In the early years of American history, married women could not own property, and had no legal claim to any money they might earn. Women were expected to focus on housework and motherhood. No female had the right to vote. But in 1920, American women were granted the right to vote with the 19th Amendment to the Constitution. The 19th Amendment prohibited any United States citizen from being denied the right to vote on the basis of sex. In that same decade, Eleanor Roosevelt, who would later be the First Lady of the United States, was just coming into her
The National
presidency, Eleanor traveled thousands of miles, researching and learning about the effects of the Great Depression on minorities, women, their homes and their families. Eleanor was known to have observed that “Bad housing begins to tell first on women. They
“We need to Housing Act step up and use our of 1934 In 1934, the federal influence and power to banking system was drive an improved housing restructured, and the Federal Housing and mortgage market. Administration (FHA) This can be our shared was born out of the National Housing Act. legacy to future The basis of the National generations.” Housing Act was to create regulation of interest rates and
are the first to become old before their time … most homes cost too much for people with average incomes.”
terms of the mortgages that the FHA would insure. This increased the number of people who could afford downpayments,
own. She was raising five children, and
make monthly payments and consequently
became actively involved in social and
increased the size of the market for single
political organizations and initiatives. She was passionate about people and their
Born into wealth and position
family homes. The FHA also set standards for
problems, tirelessly promoting minority and
Eleanor Roosevelt could easily have been
construction, known as Minimum Property
women’s causes. She spoke to women of
out of touch and not concerned with the
Standards. This created much needed
their rights, encouraging them to take the
plight of the everyday people of the
health and safety standards in the
next step after being granted the right to
Nation. She was the niece of President
construction and lending industries.
vote, and run for office.
Theodore Roosevelt, born into a wealthy
Once in the White House, she was one of
New York family. In 1905, she married her
the most active First Ladies in the history of
fifth cousin, Franklin Delano Roosevelt
our nation.
No ordinary time
who would later become the 32nd
In the preface of her Pulitzer Prize winning
President of the United States and serve
was a controversial figure. She instituted
book, No Ordinary Time: Franklin and
three consecutive terms spanning the
White House press conferences for women
Eleanor Roosevelt: The Home Front in
years of 1933 until his death in 1945. He
correspondents. This forced the Wire
World War II, Doris Kearns Goodwin writes:
would direct the U.S. government during
Agencies to hire women in order to be
“At a time when her husband was
most of the Great Depression and World
present for these sessions. If she were alive
preoccupied with winning the war, Eleanor
War II. In his first 100 days from
today, I wonder what she would think about
Roosevelt insisted that the struggle would
inauguration, he would implement the New
our current state of affairs in this country.
not be worth winning if the old order of
Deal.
things prevailed. Unless democracy were
During her 12 years as First Lady, Eleanor
renewed at home, she repeatedly said, there was little merit in fighting for
A decade of loss and depression
The New Deal
During the 1930s, the Great Depression
including Social Security that were
the number of women appointments in the
devastated the country. Many banks failed.
enacted in the United States between
Roosevelt Administration. She fought for
The subsequent and drastic decrease in
1933 and 1938. These programs were in
better housing. She championed worker’s
availability of credit and lack of liquidity
response to the devastation of the Great
rights and lobbied for the National Labor
drove massive losses of homeownership. It
Depression and they focused on the “3
Relation Act demanding workers receive a
had an impact on the quality of health,
Rs,” Relief, Recovery and Reform. The
living wage.
happiness and the wealth of the nation as
final major items of the New Deal were the
nothing had before.
creation of the United States Housing
The banking crisis forced banks to
The New Deal was a series of programs,
Authority, the Farm Security
democracy abroad.” It was Eleanor who successfully increased
foreclose on mortgages. At that time, most
Administration (FSA), and the Fair Labor
home mortgages were short term (three to
Standards Act of 1938 which set maximum
five years) and required loan to values
hours and minimum wages for most
Time for a New Deal, driven by women in housing
below 60 percent. Refinancing was not
workers.
As we currently observe a Congress that
available. Most borrowers were unemployed
Many other New Deal programs remain
seemingly does not truly represent the will
and unable to pay. The value of properties
active today, including the Federal Deposit
of the people, women in housing should
plummeted. Bank-owned collateral became
Insurance Corporation (FDIC), the Federal
take a cue from Eleanor. We need to step
almost worthless.
Housing Administration (FHA), the
up and use our influence and power to drive
Securities and Exchange Commission
an improved housing and mortgage market.
Franklin Roosevelt took the presidency in 1932, during the Great Depression. At that
(SEC), and of course the Social Security
time, in the first year of her husband’s
System.
continued on page 52
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The Long & Short The Business of Short Sales
Housing Counselors Continue to Assist Housing counselors continue to assist negative equity homeowners who need help staying put in homes while working on initiative to assist those having trouble reentering the housing market because of foreclosure code wrongly applied to past mortgage credit BY PAM MARRON
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UD-approved housing counselors can still assist homeowners struggling to stay put in negative equity homes. But a new effort will check credit of those who have had a past short sale, modification, deed in lieu or excessive mortgage lates where foreclosure code is applied and causes a mortgage denial for past homeowners eligible for a new mortgage. Current funding still exists to help homeowners with negative equity who are struggling to stay in their home, but not for long. National Foreclosure Mitigation Counseling funding will expire on Sept. 30, 2017, so here’s a shout out to Loan Originators and Realtors: Refer clients that you know are in need to HUDapproved housing counselors that can be located in each state at HUD.gov. As we turn the corner from the housing recession, problems continue to linger. In 2011, it was found that short sale credit was often coded as a foreclosure and is easily spotted where mortgage delinquency over 120 days occurs. In 2013, Sen. Bill Nelson of Florida demanded that this problem be corrected and a workaround was done in the Fannie Mae automated system. But there was never a workaround done in the Freddie Mac system and due
H
to the popularity of the Freddie Mac Home Possible program, past short-sellers with the foreclosure code issue are now being denied through the Freddie Mac Loan Product Advisor automated system. Further, all were stunned when an initiative started by the housing counseling industry for affected past short-sellers resulted in finding that the foreclosure code was also being applied to those with a modification and often a deed in lieu. The root cause of this problem is not the Fannie Mae or Freddie Mac automated underwriting systems. Recently, a past homeowner who did not have a short sale, modification or deed in lieu but did have excessive mortgage lates before she sold her home applied for a car loan at a credit union. She was denied the loan because her past mortgage credit showed up as a foreclosure and the loan was never run through the Fannie Mae or Freddie Mac automated systems. The root of this problem appears to be that foreclosure code is applied to a mortgage when delinquency over 120 days occurs. The verbiage “settled for less than full balance” or that a loan is classified as a modification or deed in lieu does not appear to be superior to a payment history that is 120 days or more delinquent.
There is no specific credit code for a short sale or modification and there needs to be. And we need specific clarification to use Credit Code “89” for a completed deed in lieu. We need this now so that past homeowners who did the right thing and worked with their lender or a housing counselor to stay in their homes for as long as they could do not have their credit wrongly coded, causing future turmoil when they try to purchase a home again. We haven’t even scratched what this problem is doing to their other consumer credit. Credit … having good credit … is what every American is taught about at an early age and what they strive for. Credit is what makes the economy run and better credit leads to better reward. It is frustrating that we are still dealing with a problem that the masses have known about for years, but that is adversely affecting the credit for
millions and stalling many from reentering the housing market. Last week, the offices of two senators and three congressman who get this problem were visited. The problem and a way that the housing counseling industry can help were shown to mortgage industry stakeholders at the HOPE NOW Fly-In. Presently, the housing counseling industry is fine tuning a process that will provide affected consumers with a correction to this problem … before they purchase a home again. Our hope is to promote this service to Loan Originators and Realtors and to have them refer potentially affected consumers to housing counselors who will take care of this problem before consumers purchase again. All of this is being done while we work on a bi-partisan effort with legislators to get a specific credit code for both short sales and modifications. 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 PMarron@InnovativeMortgage.onmicrosoft.com or visit HousingCrisisStories.com, CloseWithPam.com or 8Problems.com.
Time to Re-Focus on the Consumer By Andrew Liput
T
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here is a memorable scene in the old holiday movie, “It’s A Wonderful Life,” when Jimmy Stewart as George Bailey, president of the Bailey Savings and Loan, welcomes the Martini family to their new home which he just presumably funded for them. He makes a speech on the front steps offers gifts of salt and wine to welcome them. This is what consumers expect from our industry: Personal and caring service at an exciting yet stressful time in their lives. Somehow, I would add, our industry has forgotten to care about the consumer in the quest to sell loans at any cost. The implementation of Dodd-Frank and the birth of the Consumer Financial Protection Bureau (CFPB) were, in part, a legislative effort to make sure we never forget that the consumer is the heart of our business. This is the heart of QM (qualified mortgage) and the ATR (ability-to-repay rule), and the vendor management rules our company helps lenders implement and manage. Today, lenders need to make sure that they develop and implement policies and procedures to ensure that they are consumer-centric. From better quality origination and abilityto-repay safeguards, to vendor management and data privacy and security, lenders are on the hot seat more than ever over how they treat consumers. Some of the key areas which face scrutiny include: l Third-party vendor management, specifically closing agents; l Affiliated business relationships: The affinity relationship between lenders and title agents, lenders and appraisers and lenders and real estate agents is constantly being examined; l Minority inclusiveness: Consumers get the best deal when there is fair competition, free choice, and more choices for services and as HMDA seeks to gather data and explore how lenders make loans to all consumers, there is a movement to ensure that lenders are doing business with vendors owned by men and women of all races and ethnicities; and l Title insurance costs and fees. There have been claims by consumer groups that there is not enough competition and that costs are much higher than the risks being insured, especially in the digital and computer age where property ownership, tax and lien information is readily available and losses from title claims nationwide are relatively small. The key takeaway for lenders is that anyone not making an effort to design their business around the consumer, rather than viewing the consumer as a means to an end, may very well be paying a price for it sometime this year. As George Bailey reminded Old Man Potter, “Borrowers are human beings, not just cattle … they deserve better!”
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.
SPONSORED EDITORIAL
first lady of housing This can be our shared legacy to future generations. During such confusing, chaotic times as we live in now, it is good to remember Eleanor’s words, “One’s philosophy is not best expressed in words; it is expressed in the choices one makes and the choices we make are ultimately our responsibility.” In the 2016 Special Edition of the MReport, Women in Housing, Rachel Williams, Editor-in Chief writes: “The role of women in housing has evolved over time. Whereas the mortgage industry was once dominated by men, over the last several years women have become active decisionmakers who are shaping the future of housing in the United States.” You have rights What can we do as women in housing today, to exercise our rights as citizens? We can play an active role in how laws and regulations that affect our industry and our families are created. We can build relationships with the policymakers that take our voices to Congress. Participation in nonpartisan industry groups such as the Mortgage Bankers Association’s Mortgage Action Alliance (MAA) provides us the opportunity as individuals to team up with our industry counterparts. It provides opportunities for us to easily and quickly share our passion and priorities with our representatives, working to engage their help in driving sustainable housing and lending initiatives. It lets us all have a voice, which is something Eleanor Roosevelt always had, and about which she was never apologetic. Over 50 years ago, Eleanor wrote: “Our trouble is that we do not demand enough of the people who represent us. We are responsible for their activities, and we must spur then to move imagination and enterprise in making a push into the unknown; we must make clear that we intend to have responsible and courageous leadership. It is not
continued from page 47
so much the powerful leaders that determine our destiny as the much more powerful influence of the combined voices of people themselves.” Well said. What can you do? In her book, It’s Up to the Women, published at the height of the Great Depression, Eleanor Roosevelt writes that “Women, whether subtly or vociferously have always been a tremendous power in the destiny of the world.” In the introduction to that same book, Jill LePore writes, “Eleanor Roosevelt never wanted her husband to run for President. When he won, she … went on a national tour to crusade on behalf of women. She wrote a regular newspaper column. She became a champion of women’s rights and of civil rights. And she decided to write a book.” It is critical that women in our industry are educated in what is being considered at the state and federal levels. We need to get involved in our industry’s advocacy efforts. The most important thing is to realize that we, collectively DO have power. “Among Eleanor Roosevelt’s many public service passions, housing reform was of special concern. She worked with the Public Works Administration and the Washington Housing Authority to support planned communities and clear slum neighborhoods. She was a role model for women serving in public life and paved the way for many that came after her,” said Susan Milazzon, Executive Director of the California MBA. We can band together, to help build a better future. We can educate ourselves on the mistakes of the past. We can apply what we learn to prevent repetition of the same mistakes. We CAN be active. We CAN participate. But … it’s up to us. Together, we can write the next chapter.
Jill Kravig Burns has been in the mortgage business for more than 30 years, with a proven record in senior operational roles. She first joined the Mountain West Financial (MWF) team in 2012 as Senior Vice President of Operations, and now holds the role of Executive Vice President of Operations. In addition to oversight of all back office operational functions, she is a contributing party to the company’s guidelines, policies and procedures. She may be reached by phone at (909) 557-2271.
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Recently, there has been quite a lot of weeping and gnashing of teeth against the big, bad Bureau, the dragon with the scary name, Consumer Financial Protection Bureau (CFPB). The dragon slayers, such as banks and non-banks, are fighting the dragon on its most recent fiery huffing and conflagrant puffing on a new rule involving arbitration clauses. The ire of the dragon slayers is limitless due to the fact that the dragon has issued a “disgraceful,” “egregious,” “outrageous,” and “shameful,” final rule that bans companies from using arbitration clauses to bar consumers from filing class action lawsuits. The dragon slayers have formed a conclave consisting of banks, nonbanks, credit card companies, and sundry
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other companies to fight the good fight. They are even threatening to storm the dragon’s redoubt by pitching
administration, mustering up in their cause a bevy of like-minded acolytes, disciples, groupies, hangers-on, oodles of assorted politicians and other baby-kissers. On July 10, 2017, the Bureau announced the release
door for more consumer class actions against financial institutions concerning financial products and services.1 Many consumer contracts, such as credit card and bank agreements, contain mandatory arbitration clauses. These clauses typically require consumer disputes to be arbitrated rather than litigated in court, with the goal to prevent class action lawsuits from being filed. But consumer advocacy groups have long complained about such clauses, continued on page 77
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of its anticipated Arbitration Rule, which opens the
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at it the magical incantations of the Trump
A SPECIAL FOCUS ON
Certification & Education Why Training Fails and How to Fix It By Nick Mantia ne of the phrases that boils the blood of a learning leader is when a manager nonchalantly states the reason for failure is that “it’s a training issue.” When probing further, discussion proves that the root cause is many factors which may include ineffective training, but most commonly they include not setting clear objections and expectations, struggles with tools and technology, and lack of ability to demonstrate job fit. At the end of the day, declaring that it’s a “training issue” is an attempt by many managers to have training “fix it.” In 20 years as a training leader, I have counseled leaders on how to create an effective training program. Training has a big role in executing the plan, but it takes all involved to ensure the process is sound. I use the ADDIE Model (Analysis, Design and Develop, Implementation, Evaluation) to create training, focusing on more than just the training event.
O
The ADDIE Model The ADDIE Model breaks out each step of creating training. By following this model, you will create a program that is focused on the needs of the business, designed for adult learners with metrics in place to achieve success with your training. If any part of the process is broken, your training initiative will most likely fail. Conducting a Needs Analysis is the beginning of the process. In this stage, the learning leader/trainer meets with the business owner to determine what needs to be trained. They discuss current state and expected future state. They are very focused on the specific behaviors when creating objectives. Speaking of creating objectives, make sure they are clear and actionable. For example, “the salesperson will understand product guidelines” is not actionable … how do you prove whether they “understand?” A better objective might be “the salesperson will analyze a case study to identify whether or not it meets the product guidelines.” If you need help creating solid objectives, research “Bloom’s Taxonomy.” continued on page 58
a special focus on CERTIFICATION & EDUCATION a special focus on CERTIFICATION & EDU
why training fails and how to fix it
Design and Develop are the next two steps. These are critical to planning the session and regularly tying the learning objectives back to the activities. There are a number of critical issues that should be addressed here, including not only the overall flow of the program (including activities), as well as all supporting documentation (PowerPoint deck, Job Aids, Quick Reference Guides, etc.). Instructional Design is a special skill that coordinates the objectives into action. Implementation is the next step. This is the actual training delivery. The effectiveness of your training rises and falls on the facilitator’s shoulders. For too many years, people have been “promoted” to trainer because they wanted a change, it seemed like less work and the company didn’t know what else to do with them! If this is your approach, please reconsider. If
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the trainer is not seen as the expert, they have the same effect of a substitute teacher in a bad high school. One of the most common mistakes I see in training delivery is the trainer’s need to be the “Sage on the Stage.” Because the trainer is usually a subject matter expert they tend to lead a one-way dialogue as if they were giving a college lecture. They share their knowledge and expect that through some miracle the knowledge will be transferred. They read slides, manuals and whatever else they have in front of them. A better approach is to treat the participants as adult learners, those that you share the training experience. This is sometimes called “the Guide on the Side.” The focus is to show we are all in this together. Students have the opportunity to learn in a safe environment, by
observing, discussing, and demonstrating desired skills and behaviors. The mood is more conversational, asking questions and identifying roadblocks (kind of sounds like sales, doesn’t it?!?). Even if you have taken these four steps, you still have another one. A big one. The one that the CEO wants to know … Evaluation of results. Did this training increase sales calls? Did this training reduce processing time? Does this training keep the company compliant, lowering the cost of fees or fines? Because measuring is hard to do in some cases, many training organizations simply don’t do it. When training isn’t effectively measured, it’s just an event. Most companies use the results of a survey when looking at the effectiveness of a training event. “The participants liked the class,” they exclaim, adding “and they thought the trainer was good!” And that tells me almost nothing as a learning leader about the effectiveness of the program. Kirkpatrick’s Model of Training Evaluation demonstrates deeper results, those which should be used to make business decisions. Level One is what I described above: commonly known in the industry as a “Smile Sheet.” This helps identify things that might get in the way of optimal learning (room too cold, instructor not prepared), but in and of itself, usually doesn’t help measure effectiveness. Level Two is demonstrating how training drove behavior changes/process knowledge/technical proficiency and helped the learner meet the training objectives. You can demonstrate knowledge transfer by testing. This can be a written test (product or process
knowledge) or observed behavior (teach-back or role play). Testing is most effective when it demonstrates how the learner will use their knowledge to do what they are trained to do. The best measurement of training effectiveness: demonstration of the training on the job (Level III). Unfortunately, this takes time and history, and without focusing on the output, the business priorities can change and we forget to measure effectiveness. For many years, I was the Chief Learning Officer at a large, well-respected mortgage company. Through regular testing and measurement, we identified that those at the “top of the class” in a new hire program were more likely to outperform their peers. And those whose scores put them at the back were not going to produce and were not going to stay. So what makes sense from a business standpoint? Hire more people who can score at the top of the class (or above a set number) and you will achieve more success. We actually updated the hiring and training expectations, identified more ideal candidates and celebrated more production and less turnover due to how well we measured the program. And through regular review of the training results, we had one of the industry’s most successful sales teams. And due to the partnership with sales and the executives, we received many awards for achieving impact. So, is it a “training issue” that you have? Or have you built a training team that has the ability to produce results? Whichever your situation, investing in a strong partnership with training will give you the lift that your business might need … and training will work.
Nick Mantia is Vice President of Training at Angel Oak Companies, the management company for Angel Oak Mortgage Solutions. In his 25-plus year career, he has contributed as a top retail Loan Officer and has personally trained many of the country’s top mortgage sales performers. He has been recognized by numerous publications as an expert training executive, a passionate leader, a learning professional that “gets it” and is a published author. Nick can be reached by phone at (855) 539-4910 or e-mail Nick.Mantia@AngelOakCapital.com.
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How Using a Learning Management System Aids Compliance Training Efforts Determining employee commitment, identifying training needs builds a better workforce By Jeff Kelly inancial institutions can easily realize the many benefits of using a learning management system (LMS). Nowhere is a robust LMS more important than in compliance training, when non-compliance with regulations can result in litigation, financial penalties and a loss of public trust. An LMS provides a consistent, interactive and engaging learning environment for staff, as well as an opportunity for successful learning outcomes for employees. For financial institutions, using an LMS is more cost-effective when compared with in-person training expenses. Workers in the U.S. are primed to learn too, according to a 2016 Pew Research Center study, “Lifelong Learning and Technology.” The study’s results show:
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compliance and other staff training are detailed below. Lifecycle management An LMS can serve as an employee lifecycle management tool by monitoring the career progress of all staff—from day one to retirement. Here are ways an LMS can be
l Store important details about an employee’s daily work life, such as holidays, birthdays and upcoming events. Comprehensive communication Streamlining the communication process up and down the chain of command is another way to
the LMS, the compliance, training and other designated departments can use this tool to communicate, track and retain information and data. Three examples of this applications of the LMS are: l The training department can distribute training programs specific to each role within the organization. With a few clicks of a mouse, online programs, including topics and due dates, are assigned and communicated to designated team members. l Department-specific or company-wide communication and policies, such as employee handbooks or internal surveys, risk assessments and policy acknowledgements can be distributed for action and tracked. l Training taking place outside of an e-learning environment can also be scheduled, facilitated and tracked. Finally, a capable LMS allows organizations to customize training courses, make updates to out-of-the-box training modules or courses, as well as to update or enhance custom-made courses. Not only does this provide flexibility in the content to meet specific employer needs, but it also allows employers to alter the format in which content is provided and consumed by employees. Having the ability to tailor training to the specific needs of an organization, its departments and individual employees is extremely valuable.
l Sixty-three percent of those who are working have taken a course or have received additional training in the past 12 months to improve their job skills or expertise connected to career advancement. l Fifty-five percent of full- or part-time workers say they participated in work or career learning to maintain or improve their job skills. l Thirty-six percent of all workers say they completed job- or career-related learning in order to get a license or certification needed for their job.
used by financial institutions to effectively manage employees:
According to the 2015 Training Industry Report by Training Magazine, 73 percent of U.S. companies surveyed do at least some of their compliance and mandatory training online. An LMS was the most common form of learning technology used for that training, according to the report. Additional reasons financial institutions find it beneficial to incorporate an LMS for their
l Communicate with employees on a wide range of topics, including availability of classes, training sessions and company news. l Provide updates on employee benefits such as 401(k) plans. l House pertinent documents, including staff certifications and licenses. l Facilitate classroom training. l Document and retain policy acknowledgement.
“According to the 2015 Training Industry Report by Training Magazine, 73 percent of U.S. companies surveyed do at least some of their compliance and mandatory training online.” use an LMS. Automatic reminders can be sent to staff on a variety of subjects, such as notices to complete a particular class, provide company updates or request team members complete a survey. With a userfriendly LMS, employers also can monitor which employees have successfully finished assigned courses, read required company updates and other work-related materials as well as participated in staff surveys. Once the communication and reporting lines are established in
Statement of commitment Companies can view employee use of an LMS as a reflection of each employee’s commitment, not only to compliance and regulatory training, but also to their own career. Using an LMS can provide employees with opportunities for career advancement through comprehensive training plans assigned as mandatory training or via elective courses in areas of personal interest. Employees who seek out and take advantage of personal development opportunities, as a rule, will perform better over the long term. Dedication and motivation associated with taking these extra steps and applying additional effort to build personal knowledge and skill also translate to daily on-the-job performance. This information can be valuable
& EDUCATION a special focus on CERTIFICATION & EDUCATION a special focus on CERTIFI
during an employee review or consideration for advancement. Furthermore, employees who actively engage in training and development opportunities tend to be more valuable long-term employees. According to a report on employee engagement by the Society for Human Resource Management Foundation, sponsored by Randstad: “Employees who enhance their skills through training are more likely to engage fully in their work because they derive satisfaction as they master new tasks and increase future employability.”
institution, it can be extremely challenging to track the assignment and successful completion of all employeerequired training. An LMS is valuable for the ease of basic reporting capabilities, allowing training administrators to track successful completion of required training and other tasks. There is significant peace of mind that comes with knowing all employee training and education has been accounted for and that a report can easily be obtained for auditors, examiners and management.
Auditing capabilities A properly utilized LMS provides protection during regulatory audits and demonstrates employee compliance to auditors through a simple report. It also allows companies to track and report their employees’ education and training results to ensure they are meeting the minimum standards established by the compliance and/or training department. Even for a small financial
Identifying potential weaknesses Identifying compliance weaknesses and areas where employees may need improvement is another benefit. The LMS can be programmed to gather information about which staff members have completed required courses, training sessions and certifications. This helps ensure employees are adequately prepared to do their jobs, staff is appropriately trained
for required duties and the goals of management are clearly defined and implemented. A Jan. 14 online Economist article, “Equipping People to Stay Ahead of Change” eloquently states the need for on-the-job learning: “Working lives are so lengthy and so fast-changing that simply cramming more schooling in at the start is not enough. People must also be able to acquire new skills throughout their careers.” The Economist article offers this statistic: Routine office jobs in the U.S. declined from 25.5 percent to 21 percent between 1996 and 2015. Ensuring employees have the skills required to effectively do the job is key to customer satisfaction and risk mitigation too. An LMS provides management the ability to track
the number of attempts it takes each employee to complete an assessment and access to evaluation scores. Knowing which training questions are most often incorrectly answered by team members enables managers to provide targeted learning opportunities to remediate areas of weakness that otherwise may go undetected. Final takeaways Today’s environment is full of heavy regulation, geographically diverse workforces and rapidly evolving risks. In order to address these challenges head on, employing a strong and capable LMS and maintaining strong documentation of training and compliance initiatives empowers financial institution management to focus on leading the organization.
Jeff Kelly is Vice President of Governance, Risk and Compliance for OnCourse Learning Financial Services, a provider of governance, risk and compliance training for the bank, mortgage, credit union, gaming and non-bank financial services industries. Kelly has more than 10 years of experience in the banking sector. 61
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Balancing Conventional Forms of Training with Non-Traditional Methods By Wendy Krieger ducation, training and continued development are necessary components for the success of an organization. Given the numerous methods and forms that training and education can take (especially in today’s world of technology and innovative training platforms) strong, effective organizations depend on advanced, thoughtprovoking practices as the fundamental tools in the recruitment and retention of top talent. As such, a successful organization builds from within. The resources spent onboarding team members and engaging them in the organizational culture serve as natural stepping stones for continued growth. Just as it is most effective to nurture a tree to thrive in the same soil rather than replanting every year, so too is it preferred to nurture internal talent within the same environment in which it has developed. And, effective, memorable training plays a key role in this growth process. Today, common forms of educational programs can be found in traditional, in-class instruction and online courses. Each provides its own benefits and setbacks, depending on the type of curriculum being taught and the business unit being trained. But, in the volatile market that is real estate lending, providing a competitive, strategic training advantage to Mortgage Loan Consultants (MLCs) for example, is crucial to developing and retaining the MLCs. And in this case, blended and alternative, nontraditional forms of training come into play.
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What might constitute effective training? Choosing an effective training method is based on a variety of variables. Training designers and facilitators must evaluate the type of curriculum, as well as the target participants, in order to develop the most
effective training. The decision about whether or not a specific business unit would benefit from instructorled training, e-learning, or hands-on, interactive methods is based primarily on the content of the lesson being prepared. Consequently, we find that most often, a blended approach offers the best of all worlds.
l Systems training is best offered through the instructor-led training route. This skill requires practice and feedback. During sessions, individuals receive one-on-one coaching on specific processing systems and the steps for inputting a loan application. Practicing and discussing process and procedure results in a higher
“The decision about whether or not a specific business unit would benefit from instructor-led training, e-learning, or hands-on, interactive methods is based primarily on the content of the lesson being prepared.”
For MLC development, the process for determining training methods is a perfect example of the importance of blending the approach. l Regulatory training is delivered predominantly via online programming which is conducted at hire and then annually. This creates easily accessible and consistent dissemination of critical information.
level of retention of the subject matter. l For sales and service training, similar in-class instruction allows for faceto-face simulations, allowing the MLCs to perfect interactions with these others can be rehearsed, practiced, critiqued, and tweaked. When blended with video-taped presentations that are also critiqued, this type of in-
person training is crucial to development. l Additionally, follow-up webinars and touch points with the program facilitator continue to reinforce what is learned in these traditional classroom settings. This brings us to a less traditional technique in MLC training: interdepartmental job shadowing. Job shadowing Job shadowing is not a new concept by any means. Retail stores and supermarkets and other types of businesses have used it for decades. It is its most basic iteration, and shadowing simply entails a new team member watching and observing a more experienced team member. This practice allows the new team member to see the job in action and to learn some of the expectations during a daily routine. Job shadowing also allows the trainee to see firsthand the culture and environment of a company and how it functions. This is important. MLCs and job shadowing Job shadowing for a new MLC certainly begins with the observation of a more experienced MLC. However, this opportunity can and should be expanded outside of watching the MLC role. This means that MLCs can and should shadow subject matter experts on the operations side of the business as well. Why does this benefit the organization and ultimately the members? Easy! Shadowing in areas connected to their jobs enables the MLCs to build relationships with operational teams and support staff and to see the “big picture” for the entire loan process from origination to funding. How to make job shadowing successful Each of the operational teams must first be identified and subject matter experts selected. It is important to note that subject matter experts are not always the manager or most senior person in a role. Rather, the subject matter expert is one who can clearly and concisely explain what he
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or she is doing and why. The departments included in this part of the program include loan set-up, processing, appraisal and underwriting. A key to success in this program is that the departmental representatives who will be shadowed meet with talent development team members to prepare and create a logical flow for how the shadowing will occur, including talking points to address the MLCs. These talking points include the following: l An overview of the role being shadowed and the step-bystep process that occurs once the loan is handed off to him or her. l Common “pain points” in both loan submissions and general communication with MLCs. These pain points are the kinds of things that interfere with the smooth, timely processing of the application. Examples of pain points in submissions might
include a misspelled name; communication pain points might include little or no follow up with the operations team during the process. This process enables the operations team members to have good notes to follow when meeting with the MLCs; additionally, the notes ensure consistency such that every time a new MLC meets with the operations team member, he or she hears and sees the same information in a standardized format. Blended and nontraditional training for MLCs is an effective way to on-board and develop new MLC team members, and this methodology engages them from the very beginning. By focusing the training type on the skills being trained, the overall result is memorable and sustainable. Through the addition of the interdepartmental shadowing experience, the training comes
from the subject matter experts themselves—those who understand the ins and outs of what is being taught. They provide technical training as well as essential, industryrelated advice on handing challenges that arise in
everyday situations. Attracting and retaining talent can be tough; the more we can do to engage and develop that talent, the better we are able to serve our members’ needs with the right kind of experience.
Wendy Krieger is Director of Organizational and Talent Development at Kinecta Federal Credit Union, based in Manhattan Beach, Calif. With more than 20 years of experience in organizational leadership, employee and training development, group facilitation, and performance management, Wendy plays a key role in the development, coordination and presentation of training and organizational development programs at Kinecta. She can be reached by e-mail at Wendy.Krieger@Kinecta.org or visit Kinecta.org. 63
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This material has not been reviewed, approved or issued by HUD, FHA or any government agency. The company is not affiliated with or acting on behalf off or at the direction of HUD/FHA or any other governm ment agency. NOT FOR USE WITH CONSUMERS. ©2017 Reverse Mortgage Funding F LLC, 1455 Broad Street, 2nd Floor, Bloomfieldd, NJ 07003, 1-888-494-0882. Company NMLS ID: #1019941 (www.nmlsconsumeraccess.org). Arizona Mortgage Banker License #0927682; Licensed by the Department of Business Oversight undeer the California Residential Mortgage Lending Act; Loaans made or arranged pursuant to a California Finance LLenders Law; Georgia Mortgage Lender Licensee #36793; Illinois Residential Lender; Te Texas Mortgage Banker Registration inn-state branch address 6044 Gateway East, Suite 236, El Paso, TX 79905. Not L Mortgage Licensee; Massachusetts Mortgage Lender License #ML1019941; Licensed by the New Jerssey Department of Banking & Insurance; Rhode Island Licensed intended for Hawaii and New Yo York consumers. Not all products and options are available in all states. Te Teerms subject to change without notice. Certain conditions and fees apply. This is not a loan commitment. All loaans subject to approval. L1148-Exp062018
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Getting Staff Up to Speed on Ever-Changing Industry Regulations and Mandates By Brett Shively and David Shoemaker
nsuring all staff members are up to date on CFPB and other industry mandates is a daunting task for many mortgage companies, especially those who try to keep up with it on their own. The issues mortgage compliance officers deal with on a daily basis are formidable. Consider some of the regulations making headlines today:
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l Complying with the complexities of the TRID Rule. l Ensuring originations of qualified mortgages do not have points and fees or debtto-income ratios that exceed thresholds for qualified mortgages. l Avoiding lending policies that
may trigger disparate impact claims under fair lending laws. l Meeting the new data collection requirements under the Home Mortgage Disclosure Act (HMDA). Mortgage compliance issues Regulations and changes are not brought forward to hinder any particular company or consumer. They’re brought out to protect both. It’s how financial institutions apply them and how much time they have to spend understanding them that causes issues. A mortgage company shouldn’t be spending its time trying to interpret what the regulation is saying and what the intent is as opposed to the letter. With any regulation change, organizations ranging from small
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to very large feel the weight of the change. Any time a regulation change comes up, there are various stages to that change: It’s proposed, it’s accepted, it’s announced, it’s applied, and it’s enforced. Even with multiple compliance departments overseeing different areas, many large organizations don’t have the bandwidth to create the number or the types of courses they need in order to educate their employees about regulatory changes. Smaller companies face challenges, too, many of which involve balancing workload for employees while maintaining compliance with ever-changing mandates. Challenges for smaller organizations Whether a company is located in Peoria or Miami and whether it has 20 or 2,000 employees, everyone should have access to the same level and quality of training. Smaller organizations, however, may find it more difficult to accomplish the training within the constraints of their resources. For them, time away from task is more critical than in a larger organization, where the duties of employees taking part in training can be filled by other team members. Smaller companies may not have a vice president of training or a director of compliance. Those roles may be filled, in some instances, by an employee who works in legal or someone who manages the sales team. Working in an environment where employees wear many hats often means smaller companies face bigger challenges in developing their own compliance and training programs. Having a robust content library with a variety of courses available through an online training provider can answer those concerns and ensure training is not an afterthought. Focus on what a company does best Let’s consider the latest NMLS requirements that include a move toward online student ID authentication, allowing students to write their name with a mouse or a touch screen. Mortgage companies are not
going to be able to keep up with these constantly evolving regulations and adapt their training accordingly. It’s not possible. They’re in business to generate mortgages. That’s what they’re good at, and that’s where their employees’ time should be focused. Companies that focus on delivering online education and training stay in constant touch with regulators. That’s what they’re good at. Online education and training companies address both the letter and the intent of regulatory changes, and provide a level of clarity on issues of concern to their customers. They accept responsibility for the quality of the training content so their customers don’t have to. The job of online educators and trainers is to ensure customers have up-to-date compliance information, know the current regulations and provide customers with training courses reflecting that knowledge. That’s what education and training companies do well and how they can help mortgage companies do what they do well. Quality content is king When seeking out training solutions, companies often begin by evaluating the size of a content library. While it’s certainly important to have a large number of courses for mortgage professionals to choose from, the quality of that content should be king for decision-makers. The best ways to determine content quality are with these four Cs: l Credibility: Is the source of the content credible? Does the subject matter expert have the right experience to be considered an authority in the field? The reputation of a content’s source is critical. l Currency: Is the content provider regularly updating courses? This will ensure that training is current with evolving and emerging regulations and mandates. l Context: Is the educational content being presented in a context that is relevant to your company and the responsibilities and job
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descriptions of those who will consume it? l Convenience: How accessible is training to employees? Can they access it online wherever they are? Can they take a portion of a course during down time and pick up later where they left off? This portability increases the likelihood of mortgage professionals fitting education into their schedules while also meeting workplace responsibilities. The benefits of online training The benefits of online training are many, but none is as important as the ability to focus learning on those elements of the coursework that are most important, including those that are most relevant to job function and that require the most time to digest. Online learning puts learners in control of their learning experience in a way that classroom training does not. In
a face-to-face class, the pace is dictated by the instructor. In the online environment, if you need to review something again, you can do it right then and there. Learners proceed more effectively because they’re able to spend more time on the content that is most challenging to them. There are benefits to online training with regard to efficiency, as well. Time is not wasted on commuting and waiting for classes to begin, and money is not spent on travel to and from a classroom. The opportunity for earned revenue is not lost by having employees out of the office to attend face-to-face training.
office or during a commute. l The opportunity to budget time and structure the study plan so it suits individual schedules. Even in as little as 15 minutes during a lunch or break, a portion of required training can be consumed. That makes it much easier to fit into a busy schedule and align with an employee’s work-life balance. l The ability to proceed through training at an individual’s preferred pace, filling
downtime with coursework instead of having to schedule work around training. Partnering with a proven provider of online compliance training enables a mortgage company to devote its time and resources to what it does best. This partnership also ensures mortgage companies stay up to date on evolving and emerging rules and regulations and mitigate compliance risk for employees.
Additional benefits of online training include: l The availability of the training — anytime, anywhere there’s an Internet connection. It gives individuals the ability to study in the environment and location that is most comfortable and convenient. That could be at home, in the
Brett Shively is Executive Vice President of OnCourse Learning Financial Services. He has more than 30 years of experience in the education and financial services industries. David Shoemaker is Chief Learning Officer at OnCourse Learning. He has more than 20 years of experience in developing cutting-edge online and blended learning solutions for higher education and corporate learning. 65
Account Executive New Orleans, Northern CA, Phoenix, Pittsburgh, Portland, Raleigh, Southern CA, and Washington DC area
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Training Is Not One-Size-Fits-All hen it comes to having a strong company, one of the best things you can do is build your training program. From creating and retaining a referral base to outperforming your competitors to building a strong company culture, employee training has a huge, direct impact on your bottom line. Let’s explore the benefits of having a strong training platform more in-depth, followed by how to create your own training program. When seeking potential customers, building new relationships with real estate agents, and even recruiting employees to join the company, it’s important to position yourself as the best in the
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By Jennifer Jensen
industry. No matter who it is, people want to work with companies and individuals who are experts in their field, who have the ability to close files on time with a simple and efficient process. Imagine your customer’s loan closing has been delayed because you missed a program requirement and it wasn’t caught until underwriting. Or, someone on your support staff hasn’t been trained on how to use your LOS system, so their productivity is slowed because they are trying to figure it out on their own. All of these leave a bad impression. Customers and real estate agents won’t want to work with you again because they can’t trust you to get the job done in an accurate and timely manner. Some real estate agencies will even black loan officers after having a bad experience, and their agents will not work with
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them again. Further, if you have poorly trained and underperforming operations staff, recruits will take their business elsewhere because they do not want to work for a company that is unreliable and would damage their personal reputation. On the flip side, when you have a fully trained staff who excels at what they do, you will continue to attract others to the company. Customers will tell their family and friends, real estate agents will tell other agents, and you will attract the talent you want on your team. If you want these positive referrals instead of being blacklisted by agents and clients, you absolutely have to be able to outperform your competitors. Not only that, but potential new employees want to know that they have a future with the company and that you care about their personal success. That’s where training comes into play. It doesn’t matter if you are a seasoned professional or just starting out as a college intern, there is always room for improvement and growth. Employee training is like running a marathon—just because you have crossed the finish line doesn’t mean you are done with the race. After the race, you receive the time it took you to finish. Dedicated runners will take their personal record (PR) and do what it takes to beat that time. To beat their PR, they must continue training, whether that’s with a coach or reading articles in runner magazines. They will never get better if they keep doing the same thing over and over again. The same thing goes for mortgage professionals. If you are not continually keeping up on the latest products, technology, and industry news or trends, you are going to get lost. If you want to become a better originator and increase the number of loans in your pipeline, you must always be learning. So how can a company help set up their employees for success? Most importantly, you need to understand that a cookie cutter, one-size-fits-all training program is not going to work. That kind of training program does not take into account the various ways people learn and retain information. Everyone has different strengths and weaknesses, and it’s important
to tailor your training to the individual employee. Start out by having managers assess the needs of their employees and then have them discuss those needs with your training manager (or whoever is putting the training program together). Then, the training manager should have one-on-ones with each employee to determine their career goals, assess their skills, and create a training plan that tailors to their learning styles. Everybody is different, everyone will have a different way of learning or problem solving. Be flexible and adapt your training methods to meet those unique needs. Layered training is the best approach because it takes multiple methods, such as online courses, in-person classroom training, and personal one-onone training, which allows you to stimulate them mentally, physically, and intellectually. There are also pros and cons of each method, so using a mix of training methods allows you to balance those out. Online training is a very common method to get the same information to a lot of people simultaneously. It is more costeffective, as it saves money on travel, overnight cost, and time away from family and personal lives. Online training is also more flexible for employees. Producing employees especially appreciate the flexibility because it gives them the ability to work around their daily commitments and they can still manage their pipelines. While longer Webinars or video training modules can be beneficial in some cases, they can also lead to the student becoming disengaged and their minds wander to other things like their pipelines. You also run the risk of people dropping off the call or only half-listening because they are working on something else. It is also difficult to gauge if the person taking the training is retaining the information. I find it most helpful to break some of these longer modules down to 15-minute segments. This helps employees focus on the materials, keep them engaged, and promote better retention of the information provided. If that’s not possible, sprinkle in some polls or quizzes during your long presentations to keep it interactive and engaging. It will also show you who is paying attention, what
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possible for the trainer or the employee to travel for a face-toface training. In these cases, having a conferencing platform where you both can share your screens allows the trainer to actually see where they are stuck and then be able to walk them through it step-by-step. Since students don’t know the system yet, it can be difficult for them to explain what they are trying to do or understand the trainer’s answer, having a visual can
alleviate the communication barrier that having just a phone call often times creates. Again, using a mix of these methods will help you create a program that addresses the
needs of your employees. Be flexible and tailor your approach for each employee. When you do that, you will have a thriving organization that competitors will be striving to beat.
Jennifer Jensen has more than 23 years of experience in the mortgage and finance industry. She is currently National Training Manager for Inlanta Mortgage Inc. Jennifer also served as a Lance Corporal in the United States Marine Corps stationed in Camp Pendleton, Calif. during Desert Storm.
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information you may need to go over again, and who may need additional help. Having recordings of online training will also benefit students as it will be a resource for them long after the training is finished. If they need to review something multiple times to fully understand and retain the information, they have the ability to re-watch the videos on their own without feeling like a burden to you with their questions. In-person classroom training provides a human connection that online training lacks. When you bring a group of people into the same classroom, like for annual licensing continuing education sessions, employees get to meet people from other locations and share scenarios or helpful hints. They’re not just learning from the trainer, the book, or the computer; they’re also learning from each other and real life situations. One-on-one training allows you to directly assess the employee’s needs and be able to teach them based on their learning style. If they have a question, they usually feel more comfortable asking in a one-onone setting as they may be too embarrassed to ask in a group setting. This one-on-one training can be done one of two ways - in person or online using a conferencing platform like Go-To Meeting or Join.me. One-on-one training is especially beneficial when trying to teach someone about a new system or resolve an issue. Let’s take LOS training as an example, which is arguably the most important training your employee will need to succeed. A great way to help a new employee learn the system is by asking them to give you a real loan file that they are trying to enter into the system and walk them through the process. It’s common to use test files when training, but this can be difficult if the test file being used is from a different state or on a program they are not familiar with. By using one of their actual client files, they will be more engaged, have a better comprehension of the process, and leave feeling more confident that they can do this on their own. If the employee works in a branch that’s several hours away, or even across the country, it may not be convenient or
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Unlocking Your Business Growth With Women-Owned Business Certification By Desirée Patno
eing a business owner means constantly being on the edge of change and innovation; evolving with the times in order to increase profitability and grow your bottom line. Business certification is a tool that can be worth its weight in gold; not leveraging this advantage is an oversight and crucial opportunity cost. For female entrepreneurs, who usually endure disadvantages from the inception of their businesses— women start companies with half as much capital as men ($75,000 vs. $135,000) and 91 percent of women-owned businesses employ no one other than the owner, according to the National Women’s Business Council (NWBC)—women-owned business certification can make all the difference. This article will address two aspects of women-owned business certification: Its perception and role in government contracting.
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Perception Knowing that you’re a womenowned business can represent significant appeal to buyers wanting to work with women. According to Bloomberg, women make 85 percent of all purchasing decisions—and 91 percent of new home
“Despite earning less, women are becoming homeowners in rising numbers and increasing their purchasing power through tools like education.”
purchasing decisions—in the U.S. This purchasing power represents millions of clients potentially looking to work with women; if you leverage your women-owned business certification, you are giving yourself a leg up on the
competition before even shaking hands with your client. How can you further capitalize on women’s purchasing decisions? Market to women. If you’re company is perceived as one that considers women capable consumers, it will be more appealing to women buyers. Remember to represent today’s women in your marketing, and portray them accurately. Marketing content depicting women as merely mothers or wives is a thing of the past. The times are constantly changing and your business must recognize this. Target market knowledge will influence your advertising, but your advertising can benefit from inclusivity. Diversify your representation of women and maximize your engagement.
Government contracting The opportunity cost of not leveraging your women-owned business certification can mean the difference between operating a successful business and becoming a former business owner. Business certifications have the power to raise your business performance and bottom-line profits. By certifying your business, you can give yourself an advantage in the contracting arena and solidify your presence in the diversity and inclusion space. From public utility companies to Federal agencies, the entities searching for diverse firms are extensive, and business certification can help bring you to the forefront. Although the Small Business Administration’s (SBA) Women-Owned Small Business (WOSB) Program did not meet its women-owned small business contracting goal of 5 percent in fiscal year 2016, it presently awards 4.79 percent of small business contracts to WOSBs. This comes just a year after the government exceeded its WOSB goal for the first time in history, awarding 5.05 percent or $17.8 billion of federal small business contracts in fiscal year 2015 to WOSBs. Despite the government coming in under its WOSB contracting goal, womenowned small businesses received more contracting and subcontracting dollars ($19.67 billion) in fiscal year 2016 than in 2015. As with the SBA, there are government contracting opportunities for women entrepreneurs with diverse agencies: l In FY 2016, the Federal Housing Finance Agency (FHFA) “obligated” $12.7 million of its total contracting dollars to minority- and women-owned businesses, a $1.8 million increase from FY 2015. l The Federal Deposit Insurance Corporation (FDIC) awarded $508.8 million in contracts in 2016, of which $47.4 million went to women-owned businesses (WOB) and $93.9 million to minority
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women-owned businesses (MWOB). l In FY 2016, the Consumer Financial Protection Bureau’s (CFPB) total spend was $259,132,970, of which $38,386,242 (14.8 percent) was spent with minorityowned and women-owned businesses. From providing maintenance to federal buildings to relocation services for government employees, the contracting opportunities for women-owned companies are various and available. Obtaining women-owned business certification cannot guarantee government contracts, but not leveraging your existence as a women-owned business effectively can limit your opportunities in the government contracting space.
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Desirée Patno is President and Chief Executive Officer of the National Association of Women in Real Estate Businesses (NAWRB). With more than 25 years in real estate and championing gender equality, Patno brings insider knowledge to NAWRB’s mission of advocating on behalf of women and women-owned and small businesses in the housing ecosystem. She may be reached by phone at (949) 559-9800 or e-mail Info@NAWRB.com.
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Educating yourself on women homebuyers One of the fastest-growing segments in the housing ecosystem is the market of women homebuyers. As a housing ecosystem professional, you cannot afford to not be educated on this growing demographic. With increasing wages supported by higher educational attainment and strong desire for homeownership, women are positioned to revive the housing ecosystem. In 2015, the homeownership rate of women living alone was 25 percent
higher than that of men in the same category, according to U.S. Census Bureau data; and in higher-paying fields like civil engineering, women grew 977 percent from 1970 to 2010. Furthermore, the Bureau of Labor Statistics (BLS) reports that in 2014, female full-time wage and salary workers ages 25 and older with only a high school diploma had median weekly earnings of $578; women with a bachelor’s degree or higher had a median weekly income of $1,049. U.S. Census Bureau data from 2014 reveals that 30.2 percent of women had a bachelor’s degree or higher, compared to 29.9 percent of men. Despite earning less, women are becoming homeowners in rising numbers and increasing their purchasing power through tools like education. The stability owning a home provides for a family carries through generations, contributing to healthier, more successful children who transport its impact into the future. Homeownership is an invaluable contributor to generational growth, and as women homebuyers grow in numbers, they are paving the path for future generations of women to do the same. What are the brass tacks of this emerging market, and how can you capitalize on their buying activity? The mortgage industry needs to focus on and prepare for the market of women homebuyers.
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Sustaining Business Growth Through Employee Development By Damian Maldonado key 2017 business trend, as reported by Forbes late last year, is that organizations restructure to focus on team over individual performance— something my company did around the same timeframe. While individuals have their own career agenda, companies are now structured with teams because high-performing teams will enable them to compete for the future. Let’s consider a mortgage industry example. The leadership team at American Financing saw an opportunity to create a more streamlined mortgage experience with direct communications from one primary contact. So, we capitalized on it. We identified the importance of communication styles between teammates and chose to play matchmaker. Rather than expect each mortgage consultant to get to know 45 processors, we paired it back. Aligning smaller teams of mortgage consultants with small teams of processors really created team unity and understanding. It eliminated unnecessary internal follow ups and phone calls, providing a more enjoyable and accountable employee experience. A change this simple has a lot more to it—of course, starting with knowledgeable
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employees. Consider these key industry stages as a checklist for successful employee development: Pre-licensing education The NMLS is programmed with federal pre-licensing education (PE) and continuing education (CE) requirements as required by the SAFE Act. Ultimately, completion of these general mortgage, ethics, and law courses will prepare the individual for the federal exam. But keep in mind—these courses are specific to new loan originators, so an understanding of the presented materials may be lacking. To address this: Consider on-site testing where students are near subject matter experts in the event they feel overwhelmed, yet are separated enough there are no distractions. Tailored trainings We’re in an industry that takes education seriously. And as a national mortgage banker with more than 300 employees, my company delivers information in multiple ways. Our approach is to provide a blend of classroom (onboarding, mandatory continuing education) and online (compliance, optional continuing education) trainings—delivering material in the most understandable and well-received way we can. Of course, there’s no right answer in the discussion of online vs. classroom training. You do what you need to adapt. Adapt to
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“… there’s no right answer in the discussion of online vs. classroom training. You do what you need to adapt. Adapt to the content, adapt to the student.”
the content, adapt to the student. For some employees, self-paced learning can be challenging. It’s an attractive benefit to be able to learn on your own time. Yet, it can be harder for the student to pay attention, specifically if the content is new information. Webinars—often middle ground— provide the same flexibility, but include the added benefit of interaction. Classroom training has proven most engaging to our team. The ability to ask questions continues to be crucial to student’s success. It’s most beneficial when the trainer has experience in originating and underwriting loans. This allows for some of the most relatable examples and makes the limited time for our business to commit to the classroom well spent.
more specifically, “learning through reflection on doing.” The individual is encouraged to directly involve themselves in the experience and reflect on it using analytical skills. This way, they gain a better understanding of the new information and retain it longer. My recommendation: Hiring industry experienced employees allows less time spent on a computer. Complete systems training and a quick debrief with the trainer, so you can move on to job shadowing. This last stage is particularly important for us as our mortgage consultants are tasked with customizing a loan program for each customer. It’s a key learning experience for new hires that really forces analytical skills to kick in. Plus, it’s the best way to prepare them to take calls.
Experiential learning Wikipedia defines experiential learning as: “the process of learning through experience” and,
Better technology As technology advances, operational efficiency can increase. Utilizing an industry
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leading CRM, auto dialer, a robust LOS, and automation have boosted employee productivity. And, by giving clients access to our Customer Portal we allow client documents to be added straight into our LOS. It’s a customer benefit that has also eliminated busy work from employees’ already full plates. Job aids The TILA-RESPA Rule, Loan Estimate Disclosures, Closing Disclosures … the training process can be daunting having so many important guidelines to understand. No matter your experience or education, there’s often a limit to how much information a person can obtain. Providing easily accessible job aids and compliance guides can make retaining education so much easier. Not to mention they help bridge the gap when process change is needed to meet industry mandates. Pair job aids with a brief in-person training session— to address the upcoming change—and you can get back to business as usual in little time. Even going so far as including Webinars or how-to-videos on intranets or even Wiki’s—it’s a great way to deliver pertinent information that’s easily available.
deliver happiness by fostering it internally. No matter what your approach to business, the best way to sustain growth is through a strong foundation, strategic leadership and experienced employees. I believe in this model because I’ve
followed it. Our company doubled in size in 2015 and are up another 50 percent over the past year. In that time, we’ve set company financial records and watched our people achieve their own personal milestones—the latter being what’s most important.
Damian Maldonado is an American entrepreneur and businessman of Puerto Rican descent, and Co-Founder of American Financing Corporation, one of the most successful privately held national mortgage companies in the U.S.
Why choose MBS Highway? BARRY HABIB— THE ORIGINATOR OF THE MARKET ADVISORY SERVICE Daily guidance and insights from Mortgage Market expert Barry Habib. He closed over $2 Billion in production as a Loan Originator, called the bottom of the Housing Market and currently provides sales and market training to thousands of Loan Originators across the country. STATE OF THE ART, USER FRIENDLY WEBSITE We've taken great pride in building a website that uses new technology, and enhances the user experience. No matter where you are on our site, you'll always have market data in sight. Never miss a lock alert with our real time market news and alert system.
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Always stay in touch with the market when on the go with our Mobile Web App. It's fast and easy to use. Whether you have an iPhone, Android, Blackberry, Windows Phone, you'll always have access to MBS Highway. No downloads, no annoying updates, just visit m.mbshighway.com in your phone or tablet's browser.
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Coaching and feedback Once it’s time to work alone, weekly check-ins are important (until no longer needed), along with a performance evaluation 90 days out. You have to keep new hires engaged, informed, and appreciated—regardless of how much experience they bring to the table. No two loans are alike, and there’s always room for improvement. Incentivizing is also key. Bonuses are expected in sales. So, it’s more important to verbally acknowledge and reward key players. Spend additional time with them to ensure you understand their career path and can work with them to help them advance. To illustrate … in the past year alone, my firm has promoted 28 employees—half of these people had been working as a mortgage consultant, processor, or underwriter prior to the promotion. They have proven to be key contributors to our business success and now make a difference in the mentoring of new hires.
Customer focus As training and continuing education go on in the background, the customer remains top of mind. We all have the same strategy: do what’s best for the customer. Most all of us have a tried and true approach to how we deliver the best possible customer experience. We expect our mortgage consultants to forge deep, personal bonds with the customers they serve and deliver a memorable experience. We
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Don’t Underestimate the Power of a Training Work Culture What trainers want managers to know odays’ training environment is a challenging one for mortgage professionals. With changes to federal regulations, mandates from the Consumer Financial Protection Bureau (CFPB), investor overlays, software updates, innovation in technology, and maintaining internal policy and procedures, the amount of knowledge a trainer needs absorb and communicate can be extremely overwhelming. If you are working for a small- to medium-sized company as a trainer, you probably have a very limited budget for developing training materials. It can be a real challenge to produce effective training that is “engaging” with limited resources. The number one thing business can do to enhance their training departments is to create a culture of learning, where all employees are accountable for learning, teaching, training and developing other employees from the top down. The employee must be accountable for their own learning and development and that is taught to them through leadership and work culture. As a trainer, there is a running joke that only 30 percent of what is trained is retained, but there is a lot of truth to that concept. Real learning doesn’t happen overnight, it takes place over time with repetition and support. That said, an employee will only get out of training what they put into training themselves. How do you motivate and inspire employees to take responsibility for their own training? A little bit of encouragement can go a surprisingly long way. The State of the American workforce Report presented by Gallup this year stated that only 33 percent of employees in 2016 described themselves as engaged, involved in, and enthusiastic about their workplace. That means that 67 percent of your
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employees are content to do the minimum or are looking for other opportunities. From 2012 to 2016, Gallup tracked 12 individual elements for employee engagement and saw improvements in companies where employees received recognition or praise for doing good work, where the employees opinions felt heard and the employee had
By Frank St. John
essence, inspire others around them. Company culture of training, good solid leaders, treating employees well … it’s a wellknown story, It’s not a new or revolutionary concept. However, you would be surprised by how many companies overlook these concepts because there is no immediate way to measure its success. History teaches us that
“As a trainer, there is a running joke that only 30 percent of what is trained is retained, but there is a lot of truth to that concept. Real learning doesn’t happen overnight, it takes place over time with repetition and support.”
growth opportunities. A solid training department or trainer is a great vehicle for providing these elements to employees, but if training is the vehicle then the mechanic is the manager. Great vehicles don’t go far without the support and constant maintenance by strong managers. Great managers and trainers are individuals who intrinsically aspire toward personal growth and, in
businesses who focus solely on bottom line figures will not be successful long-term. So how can you instill a company culture of training and build leaders? Rule #1: Never accept “I wasn’t trained” as an excuse for poor work performance The second you accept this excuse you have placed the
burden of responsibility on the trainer or training department (and by extension, the company) instead of allowing the employee to take accountability for their training. A good manager will respond with something along the lines of, “I can accept that you were unaware, but I’m concerned because I didn’t see that you had any questions. Did you ask your manager or trainer for additional help?” Then follow up with, “How do you think we can improve training so we can prevent this from happing with other employees.” Employees should be encouraged to ask questions. Actively engage employees to aid the training department. When I first started training, I had an employee who kept making the same mistake repeatedly. The employee was exceptional at their job, but there was this one area that they just couldn’t grasp. I spent more than 10 individual training hours with the individual. I directly connected to their computer. I wrote emails. I sat and watched them preform the task, but every time I thought, “Okay, we got it,” within a week, I would receive a report that the employee made the same mistake. As a trainer, I felt like I failed. I was frustrated and so was the employee. So, I did what everyone does … I went home, grabbed some chocolate from the fridge and called my mentor. In the middle of listening to me whine and complain, my mentor told me something that changed my life as a trainer. He said, “Your employee clearly doesn’t learn the way you are teaching. Be more creative.” The next day at work, I walked into the employee’s office and said, “How do we improve this training?” I sat and listened for 30 minutes while the employee told me about their training struggles and how improvements could be made. I responded with “Great, I want you to write the new procedures out and I’ll review, then I want you to lead a training session for the rest of our staff.” And you guessed it, that worked for that employee and they never made that same mistake and they went on to
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became a subject matter expect in that training area.
the pursuit of business expansion. Keep it simple, keep it realistic, keep it in line with your company values and be mindful of what your training department needs from management in order to create an effective training work culture.
Frank St. John is Director of Marketing for Bay Shore, N.Y.-based Jet Direct Mortgage. For more information, visit JetDirectMortgage.com.
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Rule #3: Be mindful of an employee’s learning curve, and expect new hires to make mistakes Do not set unrealistic expectations for an employee’s learning. Everyone learns at their own pace, and although there should be standards. One of the leading reasons an employee will quit within their first three months of employment is due to the stress of learning the job. If an employee does not feel they can be successful or is overwhelmed by their learning
Technology is changing, laws are changing, but we are mortgage professionals and if we are experts at anything, it’s change! Training is an integral part of your organization—it’s important not to lose sight of human side of your company in
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Rule #2: Reward feedback Your training cannot improve and your employees will not learn without positive feedback. Make giving feedback a daily habit. Always give training surveys and reward employees who complete them. Set follow up remembers to review employee training areas and always approach reviews from a place of positivity. Employees can tell a difference between a manager who is engaged in their success and it makes a difference in how they receive the information. No one likes to be wrong, and no one likes to feel singled out for making mistakes. Feedback must come from a place of empowerment and not negativity. Do not forget to give feedback on what the employee is doing right. In my experience, companies either: (A) Only give the employee feedback where they need to improve; or (B) Give employee feedback on what they are doing correct followed by but … you need to make improvement in this area. Our brains are wired to remember the negative information. It doesn’t matter if you tell an employee how amazing they are if you follow it up with something negative. The employee will just remember the negative and it will affect how they feel about the job. To keep a positive work environment, you have to give both positive and negative feedback at separate times. Remember your attitude in the delivery makes the difference in how the information is received by the employee.
curve they will seek other opportunities. There must be a balance between the employer and employee expectations. It’s okay for an employee to be challenged if they are also being supported. Employer’s need to be mindful of the employees’ learning curve, but also hold them accountable for their own personal development. Mortgage professionals and trainers face many obstacles in today’s training environment.
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Training Tomorrow’s Workforce, Today By Rick Arvielo
t’s no secret that the mortgage industry workforce is aging. The average Loan Originator has been in the business for a few decades now and is approaching their mid50s. As a result, a large segment of our industry will be nearing retirement in the coming years. Since this older generation has been the bedrock of our workforce for so long, there will be a significant void left in the marketplace if lenders don’t begin planning for the future now. The industry is at a pivotal point where now more than ever lenders need to begin training tomorrow’s workforce today. And who is the future workforce? Millennials. They’re a key part of the industry’s continued success. They’re the largest living generation and they make up the largest share of American workers. Educating this massive age group is vital. Not only do they have attributes that make them ideal for a career in mortgage banking but since this generation ranges from 20 to 36, a good portion of them are entering their homebuying years. In fact, 42 percent of current homebuyers are Millennials, which is more than any other generation. If lenders want to attract this key consumer group, one of the best ways to engage them is by employing other Millennials because you have to have mirrors in the market; people who reflect the demographic you’re seeking to serve. But how do we begin educating Millennials to be our future mortgage professionals? It starts with not simply seeking to train them for a position that meets a momentary need, but rather identifying ways to attract them to the industry for the long haul.
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On-the job training Even though a college education isn’t needed to make it in mortgage banking, companies have to have a solid process for educating Millennials, if they’re going to be viable part of this workforce. Lenders cannot expect them to
come equipped with prior training because many of them have never had a background in mortgage banking. That’s why if you want to ensure that your company has a quality team tomorrow, you have to take the initiative today to start building your own workforce. Establishing a robust system to train beginners requires more than just giving them a
in dealing with customer objections. One approach for providing this type of well-rounded education that has been highly effective for New American Funding has been to create an entry-level position that serves like a boot camp, giving employees intense on-the-job training. It’s tailored to equip them with real-world mortgage
“One of the top three factors in retaining Millennials is providing them with the opportunity to continue learning and growing. Since Millennials care about ongoing professional development so must mortgage lenders if they want to keep them on their team.” casual introduction to the industry. It’s important that new recruits have the best chance for long-term success, which means you’ll have to equip them with the right combination of hands-on learning and classroom-style instruction. This next generation will need to have a solid understanding of industry guidelines just as much as they’ll need experience with preparing loan files and skills
experience like handling customer calls and following up on leads. Once new employees successfully complete an introductory phase, they have the opportunity to enroll in our company’s Launch Lab, which is a newly built educational facility that grooms employees for a specific career path in the industry. The goal? When they’re finished, they should have acquired practical
experience, become fully licensed, and be ready to assume a bigger role on our team. Mentor young employees Although attracting Millennials to your company begins the process of building your workforce, understanding how to retain them is key. That’s where mentorship plays a big role. One of the top three factors in retaining Millennials is providing them with the opportunity to continue learning and growing. Since Millennials care about ongoing professional development so must mortgage lenders if they want to keep them on their team. Many companies offer initial training, which is essential, but it’s the ongoing education that’s the difference maker for most Millennials. One way to provide that progressive education is through effective mentorship opportunities. As employees begin a new position, initially placing them in a supportive role is a good avenue to initiate the mentorship process. It allows them to assist senior staff members with the workflow, which gives new talent the opportunity to take on a measure of responsibility, but it also creates an educational environment where they can still learn from more experienced employees. Additionally, when veteran mortgage professionals serve as mentors, it gives them a hardworking assistant, which frees up some of their time to focus on other top priorities. Ultimately, this learning dynamic creates a win-win scenario for both mentor and mentee. Millennials want ongoing professional development because they want the opportunity to advance their career; therefore, establishing a continuous learning environment lets Millennials know that if they grow, they can move on from an entry level position to more senior level roles. When Millennials don’t see a clear path to move up in your company, they eventually move on to a different opportunity. That’s why it’s important to create a culture where mentorship is
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commonplace and easily accessible because it not only helps develop future leaders, but it ensures your ongoing success.
work-life balance and they want to enjoy coming to work every day. That means lenders have to find ways to cultivate an environment that’s conducive to Millennials, even when it comes to learning. When my company started developing the concept for its Lab, we designed it with the Millennial in mind. Rather than building traditional classrooms with confined work stations, we converted the 25,000-square foot training facility into a contemporary learning space with polished concrete floors, open ceilings, and mobile work stations that could be easily arranged for team building exercises. It’s configured with screens that descend from the ceiling and podiums that
disappear once students finish training. By giving the center a state-of-the-art layout, it creates an environment where Millennials would be excited about learning and growing. Many of them will be drawn to this industry because they have the ability to earn a good living and it’s a profession that provides other rewarding benefits, but what will determine whether they work at your
company as opposed to the competition will largely depend on the culture you create. Looking ahead Educating future mortgage professionals is a very involved process, but it’s a worthwhile commitment. Not only does it provide a gateway for newcomers to enter the industry, but it builds a foundation to continue moving the industry forward.
Rick Arvielo is Chief Executive Officer of New American Funding. In 2003, Rick and his wife Patty began doing business as New American Funding, a 40-employee, refinance call-center. In 2011, Rick introduced purchase transactions to the company’s operations, and in 2012, New American Funding opened their first branch. Their retail division has since exploded, adding 130-plus retail branches and more than 750 loan officers focused on purchase transactions in only four years.
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Create the right culture As you create the right work culture, it leads to greater success with retaining Millennials. This new generation is looking for work environments that give them a certain lifestyle. Whether that means having special onsite benefits like car washing and dry cleaning services or simply creating a fun work atmosphere, they want a good
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Understand Millennial mindset When you understand the Millennial mindset, then you understand what it takes to keep them on your team. This new generation has grown up in a digital age so they’re nimble with technology; consequently, they welcome work environments where technology is fundamental and it enables them to be more effective in their daily role. That means mortgage banking has to continue evolving. Even though Loan Originators started out using basic tools like a paper application, the industry cannot become stagnant. Companies have to provide intuitive resources in order to attract Millennial workers, who want mobile tools and other advanced technology that make their job easier because they’re expecting a different work experience. Furthermore, this new generation is unique in that they give added consideration to a job’s purpose over certain traditional factors. They don’t simply want to work but they want to do work that matters. That’s why lenders have to educate Millennials about what it means to work in mortgage banking. It’s more than simply approving a loan; it’s about helping people buy a home, which for many Americans has been a longtime dream. When your company knows your purpose and gets actively involved in making a difference both inside and outside of the industry, it becomes even more appealing to Millennials because they want to be part of a noble cause.
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Can’t Think of a Title By Eric Weinstein
f you are a regular reader of my articles, you know I can get kind of silly and very grumpy taking the opposite viewpoint of the industry norm. Sometimes, it’s a joke, but other times, I unleash my politically incorrect inner beast and let it ravish your toy poodle. This issue is all about a Special Focus on “Education and Certification.” I have racked my brain trying to formulate a theme AGAINST continuing education in the mortgage industry. It turns out to be quite a Herculean task. How can someone be against education, unless you are a leader of ISIS or Betsy DeVos? Okay, yes, it is a pain in the butt, assuming you are sitting on a hard chair in a classroom, but with new online classes, I can literally learn as I sit in my underwear in my bed weighing 400 pounds and hacking the DNC server. Stupid technology
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has taken away one of the best arguments I had. When asked if he knew the Earth was round, Sherlock Holmes once answered, he tried not to fill his head with useless knowledge. His theory was that your brain can hold only so much information and once at capacity, you have to forget something to be able to add something new. Of course, Sherlock Holmes was written in the late 1800s so the general knowledge of neuroscience was not as developed as today. We can give Sir Arthur Conan Doyle a pass on that one. Today, we know that a human brain is more powerful than 1,000 super computers. It is akin to saying you don’t want to spill a bucket of water in the ocean because you are afraid you are going to fill it up. Okay, so that excuse it out. In previous articles, I have droned on and on about the inequity of banks being exempt
from required continuing education and how it is a conspiracy (much like the UFO cover-up) to drive brokers out of business. Mortgage brokers used to own 80 percent of the mortgage industry and banks only 20 percent. Since the new legislation, it is now reversed with banks glomming 80 percent and brokers with only the remaining 20 percent of crumbs. Do you believe in little green men now? (Actually, they are grey with four fingers). That being the case, it is hardly an argument not to want to learn more. Scratch that one. I have been in the industry 25 years, and I think I know everything I have to know. Anything I don’t know is not worth knowing. I was toying with the concept that “Ignorance is Bliss” as an argument. I used to believe that,
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?
are you
nominated We are seeking nominations from our readers for National Mortgage Professional Magazine's "40 Under 40" feature, slated to appear in our December 2017 edition. Anyone who is under the age of 40 and has had a major impact on the industry can qualify for this feature. This could be through innovation, association participation, sales force automation, community activism, management techniques, technology or any other significant method that has influenced our industry. We would need a short, three-line bio on the nominee, along with a color photo and company contact info to complete the profile. To nominate yourself or someone else, visit NMPMag.com/nominate40under40.
until I started getting the Twitter feed of Presidential tweets. How can someone be so dumb and be so angry at the same time? Ignorance is not bliss, ignorance is just being stupid. Exhausting all of my potential arguments, I have to admit that learning more cannot actually hurt me or cause me physical pain. Just the opposite. Potentially, I can make more money and get that lounge chair I want. I guess, I am pro “Education and Certification” as much as it pains me to admit it. So later, when you are lying in bed in your underwear about to take a class, I will give you some advice my wife gave me on our honeymoon on the first night we were married. “Just lie down and shut up, Poindexter. You might just learn something.”
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 semi-retired, doing mortgages by referral only. He may be reached by phone at (703) 505-8692 or e-mail EWeinstein4U@gmail.com.
take-it-or-leave-it arbitration
Notice I did not indicate that arbitration clauses are themselves banned. That is because the rule does not ban arbitration clauses! Companies can still work out binding legal settlements with consumers by means of arbitrators paid for by the company. A new arbitration rule This new Arbitration Rule (Rule) prohibits the use of mandatory
“We agree that neither we nor anyone else will rely on this agreement to stop you from being part of a class action case in court. You may file a class action in court or you may be a member of a class action filed by someone else.”3 If an arbitration clause applies to several products or services, only some of which are covered by the Arbitration Rule, then the language must specify that the same language applies to conduct covered by the Rule.4 The Rule also requires companies that include arbitration clauses in consumer financial products and services contracts to produce certain records to the Bureau.5 These records include (1) claims, counterclaims, answers, arbitration agreements, judgments or awards, and dismissals concerning arbitration claims filed; (2) communications with arbitrators concerning a determination that an arbitration agreement “does not comply with the administrator’s fairness principles [or] rules;” and (3) court filings that rely on arbitration agreements in support of a company’s request for dismissal, deferral or stay, and the arbitration agreement relied upon.6 In its announcement of the release of the final Rule, the CFPB stated that “gathering these materials will enable the CFPB to better understand and monitor arbitration, including whether the process itself is fair.”7 The Rule makes changes to the arbitration process by forcing companies to submit information about individual cases to the Bureau that would be published on the Bureau’s Web site. I have a hunch that this is the point where the seething fire in the dragon slayer’s belly rises brazenly, frantically, commencing with the ruminations of thought-distracting continued on page 78
A Message From MAA Chairman Gene M. Lugat ith the August recess looming, members of Congress are preparing to head home to their states and districts. It’s a perfect time for members of the Mortgage Action Alliance (MAA) to engage with your elected representatives. The MAA is a non-partisan and free nationwide grassroots lobbying network of real estate finance industry professionals, affiliated with the Mortgage Bankers Association (MBA) that allows our industry to speak with elected officials with one voice. If you aren’t an MAA member, you can join for free at MBA.org/JoinMAA. This summer, the Mortgage Bankers Association (MBA) capped off another successful National Advocacy Conference (NAC), with more than 365 attendees from 43 states. NAC is an annual opportunity for mortgage professionals from across the country to engage their elected officials face to face, and this year, industry advocates were able to attend 225 meetings on Capitol Hill. Couldn’t make it to Washington? At NAC, MBA announced the launch of the MAA App. The MAA App is designed to make standing up for the real estate finance industry easier than ever. On the App, you can:
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l Receive updates on bills affecting the real estate finance industry l Let your elected officials know how those bills will impact you directly l Research bills that MBA is watching l Find contact information for your members of Congress l Join MAA l Learn about MORPAC, MBA’s political action committee To download the app, visit MBA.org/MAAApp or search for “Mortgage Action Alliance” in the App Store or Google Play. With members of Congress returning to their states and districts, August is a perfect time to reach out to your elected officials. Visit Action.MBA.org to look up your elected officials and view a list of current calls to action. Current Calls to Action include a Call to Action in support of HR 2948, the SAFE Transitional Licensing Act, which would provide a temporary license for loan originators transitioning between federallyinsured depositories and non-depositories, as well as across state lines. Whether you come to Washington for the NAC, talk to your members of Congress in your home district, or take action using the App, your voice matters. MAA is working hard to make it easy to take action—and your elected officials need to hear from you.
Gene M. Lugat is chairman of the Mortgage Bankers Association’s Mortgage Action Alliance. Gene is executive vice president, national industry and political relations for PrimeLending Inc.
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“Arbitration clauses in contracts for products like bank accounts and credit cards make it nearly impossible for people to take companies to court when things go wrong. These clauses allow companies to avoid accountability by blocking group lawsuits and forcing people to go it alone or give up.”2
arbitration clauses in consumer financial products and services contracts to prohibit class action lawsuits. However, financial institutions can still include arbitration clauses, but these clauses cannot be used to stop consumers from filing class actions. So, if companies want to include an arbitration clause in a consumer contract, the Rule requires that the clause incorporate the following language:
MBA’s Mortgage Action Alliance
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pointing out that individuals are unlikely to be able to handle the costs of arbitration to resolve what are typically low dollar value cases. Their position is that if consumers were able to band together and file class action lawsuits, consumers would be more apt to challenge allegedly unlawful conduct against financial institutions, and companies would be held accountable. The Bureau’s position is really rather simple: It notes the incontrovertible fact that mandatory arbitration clauses that ban class action litigation happen to stop consumers from seeking judicial remedies in disputes over small fines and other charges. Let’s call this kind of arbitration clause the “Take-It-or-Leave-It” clause. Put another way, many consumers are unable to pursue small dollar settlements disputes, given the not erroneous belief that the payout would not be worth the trouble. So, the Bureau contends, not incorrectly, that allowing companies to use the Take-It-orLeave-It clause enables them to wrong consumers, but face no consequences for doing so. Under the final rule, the companies would no longer be allowed to put the Take-It-orLeave-It clause in their arbitration provisions. The result of this rule, then, would be to put consumers into the position of banding together in group lawsuits, consisting of fellow sufferers with similar legal concerns. To quote the Bureau’s Director Richard Cordray, the fire-breathing top dragon mounty himself:
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take-it-or-leave-it arbitration speculation, inwardly crushing through the spleen into poisoned reflections of petty mortifications, and compulsorily culminating in pulverizing, fuliginous vexations!
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Deciphering the CFPB The unseemly disclosure of such sordid, humiliating, and wretched details to consumers include having to disclose initial claims and counterclaims, answers to these claims and counterclaims, and awards issued in arbitration. The Bureau also wants court records pertaining to arbitration requests to be included in motions to compel arbitration filed in individual cases. Personal information involving private arbitration hearings will be scrubbed. Let us pause for a moment to consider two points of interest: (1) The implications of the Bureau’s name, and (2) what it is about regulations that seems to drive people crazy. The dragon’s name starts with the word “Consumer,” as in buyer, customer, purchaser, shopper, user, enjoyer, applicant, and borrower. The idea here is to proclaim as clearly, notoriously, unambiguously, and unconditionally as possible that the Bureau’s mission is to prevent the consumer from being turned into a chump, dupe, easy mark, fool, patsy, target, sucker, or, if you prefer fowl play … a pigeon, turkey, or sitting duck. The goal is to ensure that purveyors of marketed goods and services, sought by the consumer through an orderly market, are prohibited from subverting a legitimate transaction through illegitimate intentions. Of course, we all know that all merchants are not hucksters as much as we know that all consumers are not pushovers. But we also know that some hucksters are merchants and some consumers are an easy touch. Then we get to the next word in the dragon’s name: “Financial.” Not complicated, really. Particular kinds of consumers are involved in economic transactions. We are obviously not talking about consuming food and drink, space on a cruise ship, the volume of air intake, the carbon dioxide absorbed by plants, or the amount of energy or power utilized to generate some device. The word “financial” modifies the word “consumer,” and so, taken together, the notion is that a consumer financial transaction
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must be economic, commercial, monetary, and in some way or other mercantile, as in financial services. Now let’s get to that contentious word in the Bureau’s title, “Protection.” Essentially, it is just another way to say “regulation.” There’s something about that word “regulation” that really seems to annoy people. I deal with this reaction all the time from people who have caught the “free market” bug and refuse to believe that a true free market has never existed since the advent of recorded human history. I have expressed this irrefutable fact on occasion, only to be told that “it’s never too late to start!” When I speak about a regulation at a conference, inevitably somebody asks why “yet another,” such and such regulation must be clamped onto their way of doing business. All markets are regulated. All of them, without exception! Even crooks have a modus operandi. All nature conforms to regulatory constraints, such as those imposed by earth’s seasonal demands. All bodies in the universe conform to regulatory accommodations. No exceptions whatsoever! But when it comes to humanmade regulations, there are three arguments for every two people! Riddle wrapped in a mystery inside an enigma Recently, President Trump signed an Executive Order, titled “Reducing Regulation and Controlling Regulatory Costs.” To quote the Order, “for every one new regulation issued, at least two prior regulations [must] be identified for elimination.”8 Thus, issue a regulation; but, if you do so, find two regulations to kill. Yeah! That’s it! That’s the way to curb regulatory growth! Actually, this method of handling regulations is “not only not right, it is not even wrong,” as the theoretical physicist Wolfgang Pauli once intoned about a concept he deemed incorrect, produced by sloppy thinking. Further warping this weird demand is the Order’s requirement to ensure that “the total incremental cost of all new regulations, including repealed regulations, to be finalized this year shall be no greater than zero.”9 Or, to put it more succinctly, any increase in cost for a new regulation must be offset by a decrease or elimination of the cost pertaining to another regulation, such that the net
resulting cost is equal to no increase in cost at all. This way is no way at all, since it eviscerates the very purpose of providing protection, which is the basis of the regulation in the first place. Protection always comes at a cost, since implementation requires market interaction. This shallow contrivance of “Reducing Regulation and Controlling Regulatory Costs,” devised to prune regulations, seems almost metaphysical in nature. Look at it this way … in order to give up two things to get one new thing, in an uncoerced transaction, we would ordinarily exchange the two for the one on the basis of equality of value between them. For instance, if I were to give up two widgets that I currently possess for the sake of getting one new widget, I would expect a fair trade, where the value of two widgets are equal to the value of one new widget. Or, for another example, I might accept trading two $1 dollar bills for one $2 dollar bill, but I would not trade two $1 dollar bills for one $1 dollar bill. (Yes, $2 dollar bills are a current denomination, worth only face value. Excluding rare, numismatic exceptions, $2 bills are not worth anything more than face value on the collectors’ market.) If the foregoing proposition of market action between two parties in an uncoerced transaction is deemed to be an unacceptable description of economic theory, read no further, as I base my observations on long-settled, economic theory and normative human interaction consummated on the basis of two parties’ affirmation of agreed-to values. Value of regulation The value of a regulation is measured in its degree of protection to a class of people, which, in the case of consumer financial interactions, would be the class known as consumers. The notion is that protecting the consumer financially requires regulations, generally irrespective of the economic effect such regulation may have on the mercantile class. Protecting the consumer financially is actually more important than protecting the merchant, because without the consumer there is no market. No market; no merchant. Whereas all merchants could be consumers, not all consumers can be merchants. A consumer can work for a merchant and even consume the merchant’s products and services, but in our economic system the consumer does not usually participate in the
merchant’s profits. This configuration has been a settled feature of classical economics for centuries. A regulation that only protects the merchant, but does not protect the consumer, is socially and economically repugnant. Simply put, there can never be a naturally occurring, intrinsically stable, “level playing field” between consumers and merchants. Implementing regulations costs money and expenses eat into profits. Merchants may be far sighted when it comes to how best to accommodate a consumer’s financial needs, but they certainly are near sighted when it comes to eyeing the bottom line. Hence, many merchants have two customary default, adversarial positions: (1) Fight for no regulations, and, if that fails, (2) fight all new regulations! Merchants do not demand increasing consumer financial regulations; consumers rarely call for decreasing such regulations. Since regulations are for the ultimate protection of the consumer, and protection of solely the merchant is an obnoxious abomination, the merchant’s pushback gambit is to encase its objections into a pretentious artifice that infers the consumer will somehow suffer if the regulations are implemented. Such suffering would come in the form of increased prices for financial products and services, merchants will argue, because the costs to implement regulations will be passed on to consumers. Market altruism Here’s the general stratagem behind the merchant’s magnanimous view: 1. Increased prices of financial services would lead to reduced prices in various asset classes, such as real estate, because the more a consumer pays for credit the less money it has available to spend on real estate. 2. The reduction in the consumer’s ability to purchase would force the consumer to forego purchases, leading to a slow or no growth economy, because foregoing purchases ripples into the entire economy in the form of reduced employment, reduction in common services, lower taxes, and so forth. According to this rationale, merchants are heroes, champions of consumer interests, conquistadors bravely fighting regulations on behalf of
said that those words which were formerly hard are softened by use.”11 It should come as no surprise that virtually all Republicans in Congress, as well as mortgage industry associations, have been pushing the Bureau to hold off on issuing Protection with respect to the Take-It-or-Leave-It arbitration clause. In point of fact, this Protection could be voided through a vote under the Congressional Review Act.12 Director Richard Cordray has said he is aware that Congress could move to nullify the Protection, a move which would
block the Bureau from issuing “substantially similar” Protection in the future, and he acknowledged there were risks associated with promulgating more Protection, given a Republican Congress and Administration in power. To that observation, it is worth noting that there is legislation currently pending in Congress that would remove the Bureau’s ability to go after arbitration clauses. Arbitration study Director Cordray has said that the Dodd-Frank Act mandates that he, continued on page 82
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Defeating consumer financial protection If the Bureau’s promulgated regulation is not understood to be a proxy for protecting the
consumer in financial transactions, then the concept of regulation itself has no practical, socially viable meaning in the context of a market economy. It becomes no more than a vacuous ruse camouflaging empty rhetoric for the sake of mollifying the masses. Given the purpose served by consumer financial regulation, for the rest of this article I will use the word “Protection” instead of the word “regulation.” As the educator Aeneas Sylvius Piccolomini wrote, nearly six hundred years ago, “ordinary words are those which are worn out by common use, and we can use these safely. Cicero
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consumers. There is no real need for a government agency to watch out for consumer financial protection–the merchants will do it! Fighting regulations is what the merchants willingly do on behalf of the consumer. By the logistics of this conjecture, good regulations are those that benefit the consumer by maintaining or increasing the merchant’s profits, thereby ensuring that it does not have to pass on to the consumer the increased cost of implementing the regulations; bad regulations are those that cause the merchant to pass on the cost of the regulations, and, of course, thereby potentially reducing the merchant’s profits. Banking departments, federal and state government authorities, agencies that enforce consumer financial protection statutes, regulators that promulgate rules to prevent financial abuse of consumers– these entities are thought to be parasitic pests, leeching the lifeblood out of the market by condemning the consumer to increased costs and economic uncertainty. But if the consumers are the essence of market activity and merchants are, at best, reactionaries, then this chivalrous, perplexing notion of how the market works quickly evaporates into a fugacious mist! Perhaps merchants need protection from one another to prevent unfair competition. Maybe they need protection from one another to avoid the formation of monopolies. But Adam Smith’s “invisible hand” is the one belonging to the consumer, not the merchant. The metaphor “invisible hand” was first coined by Adam Smith in 1759. It is supposed to mean that self-interested behavior of people in a marketplace leads to the greater good for all. So, according to this interpretation of Smith’s work, Wealth of Nations, there is no need to rely on government regulations to direct commercial activity. If the proper economic and legal institutions are set up, we can all expect to benefit economically if simply left to our own devices. However, most contemporary economists acknowledge that the “invisible hand” does not exist! As Nobel Laureate, Joseph Stiglitz states: “The reason that the invisible hand often seems invisible is that it is often not there.”10
Will Higher Rates Reduce Depends on if you have HECMs in your product mix By Dan Hultquist, MBA, CRMP
avvy mortgage lenders have always kept tabs on interest rates, but their attention has been especially rapt since financial markets rallied in the wake of November’s election. Even small rate spikes are enough to make lenders wonder how loan volume will be affected. Of course, the Federal Reserve does not directly impact mortgage interest rates. But raising short-term interest rates for the three times in six months has lenders and brokers keeping an eye on the outcomes of future Fed meetings this year. Understandably, there is concern that rising interest rates will reduce lending activity. And their apprehensions are somewhat valid with traditional “forward” loans, especially refinances, which have been the majority of originations volume in recent years. However, there are other market factors that contribute to loan volume and other mortgage products where rate increases have a reduced impact. Consider the Home Equity Conversion Mortgage (HECM), the leading reverse mortgage product. The relationship between loan volume and interest rates is not as clear-cut when it comes to this FHA-insured product. That’s because rising interest rates affect these loans in ways that can benefit lenders and borrowers alike.
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How do HECM interest rates work? While the dominant “Forward” product is the 30-year fixed-rate mortgage (FRM), almost all HECMs are adjustable-rate mortgages (ARM). This is because HECM ARMs allow “open-end credit” where the borrower can draw what they need, when they need it. For HECM ARMs, initial interest rates are calculated in the same manner as traditional ARM products. Simply add the lenders margin and a market index, and reverse mortgages traditionally use the London Interbank Offered Rate (LIBOR) index. For example, with a 2.75 percent lender margin, interest rates on July 31, 2017 would look like this: Product
Margin
Index
Interest Rate
One-Year LIBOR ARM
2.75%
+1.736%
= 4.486%
One-Month LIBOR ARM
2.75%
+1.232%
= 3.982%
When it’s time to make periodic adjustments to the interest rate, only the margin portion remains fixed. It is the index portion that causes the effective interest rate to rise or fall. However, there is one additional critical rate—the expected rate. This is an estimate of the average interest rate for the life of the loan. This is a key component in determining how much initial equity may be accessed with a HECM. The 10-year LIBOR swap rate is viewed as the market’s best guess at long-term index rates. For example: Margin
10-year SWAP
Expected Rate
2.75%
+2.23%
= 4.98%
When expected rates (at application) round to five percent or less, the initial principal limit is maximized for that borrower. When expected rates round to 5.125 percent or higher, principal limits are reduced according to FHA tables. For this reason, 5.06 percent is considered a “Floor” rate that lenders try not to exceed. As rates go up, lenders and brokers will adjust their margins to keep the expected rate at, or below, the floor. If SWAP rates get too high, borrowers will qualify for less. But that’s not necessarily a bad thing. Using less loan proceeds leaves more equity in the house protecting both the lender and the borrower.
Four ways that traditional lending and HECM lending differ in a rising interest rate environment 1. Primary motive With traditional home financing, the primary motive for refinancing is to gain a lower interest rate. By contrast, with reverse mortgages the primary motive for refinancing is access to additional home equity. HECM borrowers could be looking to satisfy an immediate need, increase retirement cash flow, or establish a secure and growing line-of-credit for future needs. Consequently, interest rates are not as critical a concern. 2. Affordability On the forward side, higher interest rates may impact the borrower’s ability to afford the home. Higher HECM interest rates generally have little impact on the affordability because monthly principal and interest mortgage payments aren’t required. Higher interest rates may eventually reduce principal limits for new HECM loans, but today’s typical HECM borrower doesn’t need all their available funds. 3. Creditworthiness Interest rates are often further impacted by a borrower’s credit score on traditional loans. On the other hand, credit scores are not considered on HECMs and therefore do not impact the rate offering. Financial assessment of the HECM borrower is primarily used to determine if funds should be set-aside to pay for annual property charges. 4. Rate adjustments Lastly, you’ll find that rising rates after closing hurt traditional ARM borrowers with higher monthly payments, and as a result, the dominant forward product is a fixed-rate mortgage. By contrast, rising interest rates after closing often help some HECM ARM borrowers who see their available line-of-credit (LOC) grow at the same compounding rate as their loan balance. As a result, the dominant reverse product is an ARM. Ultimately, on the forward side, even small interest rates increases are bad for the borrower because they increase monthly payment obligations for new applicants, as well as existing ARM borrowers. They are bad for loan originators because refinances simply stop. On the reverse side, monthly principal and interest payments are not required. Higher interest rates may eventually reduce principal limits for new HECM loans, but today’s typical HECM borrower doesn’t need all their funds upfront. And while higher interest rates do cause higher interest accruals, the same compounding rates are applied to the line-ofcredit growth. When the primary motive is access to a portion of home equity, rates are simply not as important. With rates expected to rise and traditional HELOCs maturing, the HECM is more attractive than ever for homeowners age 62 and older. Of course, there are many other demographic and strategic reasons banks, mortgage lenders, and brokers should enter the reverse market right now, but the potential for rising interest rates may be high on the list. Rising interest rates necessitate a more balanced product mix, and now is the time to diversify lending product offerings. Dan Hultquist, MBA, CRMP is Director of Learning and Development for ReverseVision. His training sessions have exceeded 21,000 in attendance over the last six years. He is a Certified Reverse Mortgage Professional (CRMP) and CoChairs the Education Committee for the National Reverse Mortgage Lenders Association (NRMLA). Dan also teaches continuing education courses that serve as annual requirements for CRMPs. Dan is author of the book, Understanding Reverse, which answers the top questions he has received as a national reverse mortgage trainer.
ce Loan Volume?
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as Director of the Bureau, must take action that is in the best interest of the public and that he was acting to do so based on an Arbitration Study the Bureau published that showed how consumers lost out in arbitration hearings.13 In the Arbitration Study, issued in March 2015, which included and evaluated statistics from the American Arbitration Association, it was found that only around two percent of credit card customers said they would consult an attorney or take legal action if they find themselves in a dispute with their credit card company or bank. The Arbitration Study also showed that around 34 million consumers received payments, over $1 billion being paid out, as a result of consumer class actions over a five-year period. Comparatively, over that same period, the 78 consumers who went to arbitration recovered only a total of $360,000–a mere pittance. What is to be feared by giving consumers their day in court? By shutting the court house doors on consumers, according to the Bureau, companies would be able to avoid being held responsible for improper fees and other misdeeds. Consumers are aware of this purported imbalance in the scales of justice! Wells Fargo’s initial push to force arbitration on the consumers harmed in its fake account scandal was stopped after significant public outcry. Ultimately, Wells Fargo agreed to a $142 million class action settlement in that litigation. The Arbitration Study itself formed the basis of deliberations in promulgating the Protection, which, by the way, has some differences from the Bureau’s May 2015 proposal with regard to exemptions for cards and other products issued by federal, state, local and Native American tribal governments to employees and other areas. Ramona L. Lampley, Professor of Law at St. Mary’s School of Law in San Antonio, Texas, in a published review by the American Bar Association, provides a brief synopsis of highlights involving the Arbitration Study: l Over the three-year period of 2010-2012, consumers filed an average of 411 claims for arbitration in consumer financial services products. This is abysmally low. l Of the 1,060 arbitration filings
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studied, about 60 percent settled or ended in a manner consistent with settlement. Only 32 percent were resolved on the merits. This settlement figure suggests that some sort of resolution is being achieved prior to a merits decision in consumer arbitration. l Consumers had access to attorneys. Counsel represented consumers in nearly 60 percent of the cases. Companies, of course, nearly always had counsel. l It appears that attorneys with arbitration experience are representing these consumers. Repeat player attorneys represented consumers in 50 percent of filings across all consumer financial services product markets. Forty-five percent of those filings were by “heavy” consumer repeat players, meaning the attorney appeared in four of more arbitration disputes in the threeyear study period. For student loan disputes, heavy repeat player law firms represented 93 percent of consumers. l Dispute resolution is not a primary concern for consumer choice. When asked about factors that are important in selecting a credit card, no consumer raised dispute resolution. When asked, in a telephone survey, what one would do if a credit card company charged an improper fee, most respondents commonsensically answered he or she would cancel the credit card. Less than two percent mentioned seeking legal advice or suing, but 10 percent said they would refer the issue to a governmental agency.14 Professor Lampley reached several conclusions. But, having weighed the Pros and Cons, her overall view is that the image which the “Arbitration Study paints of class actions shows that this vehicle is not providing satisfactory recovery to the individual class members.”15 I am sure the Arbitration Study will be used in lawsuits, because the mortgage industry has ferociously opposed the Bureau’s rulemaking process as well as the validity of the Arbitration Study itself. Push-back gambit Now, however, comes the industry’s magnanimous and accustomed push-back gambit!
The consumer needs to be protected and the merchant is willingly going to safeguard the consumer’s interests. Let’s take a look at the merchant’s push-back gambit in action. Here is but one example, this from the U.S. Chamber of Commerce: “The CFPB’s rulemaking is based on a highly controversial and flawed study that ignored the practical benefits of arbitration, as compared to the court system, for addressing the types of injuries that consumers most often suffer. While arbitration is faster and cheaper for consumers, the Bureau chose to release this rule, which will eliminate the option of arbitration for most consumers.”16 Yet another fine specimen of the push-back gambit, the American Bankers Association (ABA) issued this announcement: “The ABA and the state bankers associations have been vocal in their opposition to the rule, and ABA President and CEO Rob Nichols applauded lawmakers for taking the next step to block it from taking effect. He noted that in moving forward with the ‘misguided’ rule, the CFPB undermined its own data, which showed that customers fare far better in arbitration than in class action lawsuits.”17 The action to block the rule would be made possible through the Congressional Review Act, which gives Congress the ability to reject new federal rules within 60 legislative days of publication in the Federal Register. Merchants have enlisted Senate Banking Committee Chairman Mike Crapo (R-ID) and House Financial Services Committee Chairman Jeb Hensarling (R-TX), who are nobly taking up the worthy cause of protecting consumers. The process has already begun: on July 25, 2017, the House of Representatives passed a “Resolution of Disapproval” by a vote of 231-190 to revoke the Protection under the authority of the Congressional Review Act. We know the Protection is a huge burden on consumers because, as the ABA opines, “with such restrictions in place, arbitration is likely to disappear from financial services contracts, and could result in burdens on customers whose claims cannot be resolved through class actions, instead requiring them to go to court for minor, non-systemic
disputes.” Tom Cotton (R-AR), who is on the U.S. Senate Banking Committee, issued a statement promising to move forward with rescinding the Protection under the Congressional Review Act. And, prior to the Protection being unveiled by the Bureau, acting Comptroller of the Currency, Keith Noreika, is reported to have denounced it, citing the DoddFrank Act as his office’s authority to strike it down. The Heritage Foundation’s policy wonk, Diane Katz, has exuberantly stated: “Three cheers for Keith Noreika, the acting comptroller of the currency, for having the chutzpah to challenge the regulatory deceit of the Consumer Financial Protection Bureau and its director, Richard Cordray.” Not settling for just cheering, Ms. Katz charged that Director Cordray himself is involved in a “cover-up” that is “undoubtedly driven by the methodological defects that render the data – and the bureau’s use of it – shady.” Of course, she would just like to eliminate the Bureau altogether, to wit, “Lawmakers should then move to dismantle the Consumer Financial Protection Bureau and send Cordray and his crew packing.”18 Obviously, the financial services industry is thankfully going to come to the defense of the consumer. ABA’s Nichols provides the rationale in no uncertain terms for why this Protection must be canned: “In reality, the vast majority of disputes get resolved quickly and amicably without the need for arbitration or legal action. If arbitration disappears, the bureau will force consumers to navigate an already overcrowded legal system where the only winners will be trial lawyers. We think our customers deserve better, and we urge lawmakers in both chambers of Congress to overturn this anticonsumer rule as soon as possible.”19 The effective date is 60 days after the final rule was published in the Federal Register on July 19, 2017; therefore, Sept. 18, 2017. Mandatory compliance applies to pre-dispute arbitration agreements entered into on or after March 19, 2018 (viz., only to contracts entered into by consumers 180 days after the effective date). Those politicians better get cracking and get that “anticonsumer rule” overturned already! Countering the push-back gambit Nevertheless, many consumer
advocacy groups are supporting the Protection. For some reason, they are not graciously willing to accept the merchant’s magnanimity nor are they particularly impressed with a policy wonk’s exasperated indignation. In their view, eliminating the Take-It-or-LeaveIt arbitration clause, which gives consumers their day in court, is precisely what they would like to see implemented. According to Rohit Chopra, a senior fellow at the Consumer Federation of America—an umbrella group for dozens of consumer advocacy organizations—the Protection will help to “combat the culture of companies profiting from charging illegal fees and committing other crimes against their customers. This is an important step of restoring law and order to the financial marketplace.”20 Representative Maxine Waters (D-CA), the Ranking Member of the Financial Services Committee, declared that “it is outrageous that Republicans are trying to nullify the rule to the detriment of consumers. Republicans should think twice before taking away consumers’ rights to be heard in a court of law.”21 So, the gloves are off! Why this umbrage at denying consumers access to the court?
realistic opportunities to negotiate terms that would benefit their interests, consumers cannot obtain the desired product or service unless they acquiesce to this provision. There are arbitration agreements that include due process protections, but there are others that shorten statutes of limitations. Arbitration clauses may alter the burdens of proof, limit the amount of time a consumer has available to present a case, or otherwise impose constrictive procedural rules. In fact, most of the time it is the corporation, not continued on page 84
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“A second factor is the increased expense, apart from legal fees, that a litigant must pay to pursue a lawsuit to conclusion. A third factor is increased unwillingness of lawyers to take a case on a contingent-fee basis when the anticipated monetary award is modest. A fourth factor is the decline of unions and other institutions that provide their members with free legal representation. A fifth factor is the imposition of mandatory arbitration. A sixth factor is judicial hostility to class action suits. A seventh factor is the increasing diversion of legal disputes to regulatory agencies. An eighth factor, in criminal
Mandatory arbitration obviously restricts a consumer from having a judicial hearing. This provision is called a “contract of adhesion,” which is a contract between two parties, where the terms and conditions of the contract are set by one of the parties, and “the other party has little or no ability to negotiate more favorable terms and is thus placed in a ‘take it or leave it’ position.”23 It is a contract between a party with stronger bargaining power and signed by
another party with weaker bargaining power.24 Indeed, a few centuries ago, this type of provision was considered “unconscionable” because it was thought that these contracts were such “as no man in his senses and not under delusion would make on the one hand and as no honest and fair man would accept on the other.”25 Importantly, the second party typically does not have the power to negotiate or modify the terms of the contract. To put it clearly, this type of contract is fraught with peril for consumers, because without giving the consumers
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Constitutional right to a jury The esteemed jurist, Jed S. Rakoff, who is the Senior U.S. District Judge of the United States District Court for the Southern District of New York, wrote there are many reasons why access to the court has been increasingly denied. According to Judge Rakoff, “one is the ever greater cost of hiring a lawyer.” He then enumerates up to eight other reasons:
cases, is the vastly increased risk of a heavy penalty in going to trial.”22
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the consumer, that gets to decide whether to include fairness protections in the arbitration procedure. Some arbitration agreements require that the losing party pay all the arbitration fees, including the other side’s attorney fees. This is called a “loser-pays clause” and it provides a powerful deterrent to consumers asserting any claims.26 Nevertheless, federal courts have enforced these conditions in certain cases, especially in light of the U. S. Supreme Court’s 5-4 ruling in AT&T Mobility LLC v. Concepcion (2011),27 where, in overruling the California Supreme Court, it was held that the California court’s decision–which viewed such contracts as “unconscionable”28 and “unenforceable”–is surpassed by a supposed “federal policy” that favored the “speed and efficiency” of arbitration.29 It would appear that the U. S. Supreme Court also wants to protect the consumer, because speed and efficiency must be far more important and constitutionally defensible than a consumer being able to permit a court and jury to become involved. But, then, there is the Bill of Rights, specifically the Seventh Amendment to the U. S. Constitution, that makes no precondition that speed and efficiency should outweigh the right to a jury. It’s worth reading the crisp text of the Seventh Amendment: “In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any court of the United States, than according to the rules of the common law.”30 While the Seventh Amendment’s provision for jury trials in civil cases has never applied to the states, almost every state voluntarily complies with this requirement. Because there is a constitutional right to a jury, it seems constitutionally objectionable to impose mandatory arbitration on a consumer or prevent a consumer from bringing class action claims. The only legally viable way that the Seventh Amendment can be superseded is by a consumer intentionally or voluntarily giving up his or her recognized, constitutional right, such as would be the case if the consumer accepts the Take-It-or-Leave-It arbitration clause.
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Ditching arbitration Arbitration presents certain unique challenges to the consumer. Arbitrators are not required to have any legal training. They do not need to follow judicial rules of evidence and procedure, designed to create some balance between the parties in court. There is limited discovery, which makes it much more difficult for individuals to have access to important documents that may help support a claim. In addition, arbitration proceedings are private hearings, not open to the public. Whether arbitrators write or publish detailed written opinions, no legal precedent or rules for future conduct are established. Yet, the arbitrator’s decision is still enforceable with the full weight of the law. Generally, the right to appeal an arbitrator’s ruling is severely limited. With respect to notions of speed and efficiency, it is indisputable that arbitration cases can take years. Arbitration clauses often require that hearings be held in a location inconvenient to the claimant. Whereas class action plaintiffs who go to court largely pay little or nothing up front, arbitration costs are generally split between the consumer and the merchant–and those costs include the arbitrator’s fees, which can range between $200 and thousands of dollars per hour. The consumer watchdog group, Public Citizen, has actually listed high profile companies that have terms of service containing a “forced arbitration” provision and banning class actions. Financial institutions offering consumer banking and credit services, the list includes Wells Fargo, US Bank, Regions Banks, BB&T, Discover, PNC Bank, Chase, TD Bank, Charles Schwab Bank, American Express, Sallie Mae, Citibank, Sovereign Bank, and Discover (with 30-day opt-out provision on card).31 There is far less likelihood that corporations use arbitration clauses with one another than they use in contracts with consumers. Cornell Law Professors Theodore Eisenberg and Emily Sherwin and Professor Geoffrey P. Miller of NYU Law School found this to be the case. They examined contracts from 21 financial and telecommunications companies. The data showed mandatory arbitration clauses in over 75 percent of consumer agreements
but in less than 10 percent of their negotiated non-consumer, nonemployment contracts.32 They concluded that “the absence of arbitration provisions in the great majority of negotiated business contracts suggests that companies value, even prefer, litigation as the means for resolving disputes with peers.” Indeed, a systematic eschewing of arbitration clauses “also casts doubt on the corporations’ asserted beliefs in the superior fairness and efficiency of arbitration clauses.” Based on the data, the authors state that large corporations’ assertions that “mandatory consumer arbitration is justified because it provides consumers with a superior form of dispute resolution thus appear to be disingenuous.”33 Thought experiment A final thought experiment in the form of three questions!34 1. Do you think a consumer should have his or her day in court? Before you answer, consider that the Bureau’s rule will allow groups of consumers to obtain relief when companies skirt the law. According to the Bureau, most consumers do not even realize when their rights have been violated. Often the harm may be too small to make it practical for a single consumer to pursue an individual dispute, even when the cumulative harm to all affected consumers is significant. The pilloried Arbitration Study found that only around two percent of consumers with credit cards who were surveyed would consult an attorney or otherwise pursue legal action as a means of resolving a small-dollar dispute. With class action lawsuits, consumers will have opportunities to obtain relief from the legal system that, in practice, they otherwise would not receive. 2. Do you think that prohibiting a “Take-It-or Leave-It” arbitration clause would provide an incentive to companies to comply with the law to avoid group lawsuits? Before you answer, keep in mind that mandatory arbitration clauses may enable companies to avoid being held accountable for their conduct. When companies know they can be called to account for their misconduct, they may be less likely to engage in unlawful practices that can harm consumers. Further, public attention on the practices of one company can affect or influence their business practices and the business practices of other companies more broadly.35
3. Do you think that increased transparency is a valuable service to consumers and merchants alike? Before you answer, it is worth noting that the Bureau’s Protection would make the individual arbitration process more transparent by requiring companies that use arbitration clauses to submit any claims filed and awards issued in arbitration to the Bureau. The Bureau would collect correspondence from arbitration administrators regarding a company’s non-payment of arbitration fees and its failure to adhere to the arbitration forum’s standards of conduct. The collection of these materials would enable the Bureau to better understand and monitor arbitration. It would also presumably provide insight into whether companies are abusing arbitration or whether the process itself is fair.36 Information contained in this article is not intended to be and is not a source of legal advice. The views expressed are those of the author and do not necessarily reflect the views or policies of Lenders Compliance Group, any governmental agency, business entity, organization, or institution. No representation is given and no guaranty is offered with respect to the source, originality, accuracy, completeness, or reliability of any statement, information, data, finding, interpretation, advice, opinion, or view presented herein. Footnotes 1—Arbitration Agreements, Final Rule, Official Interpretations, 12 CFR Part 1040, Bureau of Consumer Financial Protection, Federal Register, Vol.82, No. 137, July 19, 2017, Rules and Regulations. 2—CFPB Issues Rule to Ban Companies from Using Arbitration Clauses to Deny Groups of People Their Day in Court, Financial Companies Can No Longer Block Consumers from Joining Together to Sue Over Wrongdoing, Consumer Financial Protection Bureau, Press Release, July 10, 2017. 3—12 CFR § 1040.4(a)(2)(i). 4—12 CFR § 1040.4(a)(2)(ii). 5—12 CFR § 1040.4(b). 6—12 CFR § 1040.4(b)(1)(i)-(iii). 7—Op. cit. 1. 8—Reducing Regulation and Controlling Regulatory Costs, Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs, Executive Order, White House, Jan. 30, 2017. 9—Idem. 10—Questions and Answers, Joseph Stiglitz, Economist’s View, Oct. 22, 2006, interview conducted by Daniel Altman. 11—“Usitata sunt verba, quae communi teruntur usu et his tutius uti possumus. Cicero dicit, quae primo dura fuerunt, usu molliri.” de Puerorum Educatione, Aeneas Sylvius Piccolomini, my translation. 12—Indeed, several Protections from the Obama Administration were voided by
motion was denied by the district court, and the decision was affirmed by the Ninth Circuit Court of Appeals. AT&T appealed to the Supreme Court. 30—Seventh Amendment, U. S. Constitution, Bill of Rights. 31—Forced Arbitration Rogues Gallery, Expose Corporations That Are Rigging the Justice System Against Consumers, Public Citizen Web site. 32—Arbitration’s Summer Soldiers: An Empirical Study of Arbitration Clauses in Consumer and Nonconsumer Contracts, Cornell Law School Legal Studies, Theodore Eisenberg, Cornell University, Law School, Geoffrey P. Miller, New York University School of Law, Emily L. Sherwin, Cornell University-Law School Research Paper No. 08-017, NYU Law and Economics Research Paper No. 08-28, Dec. 18, 2007.
33—Idem. 34—Salient points made in CFPB Proposes Prohibiting Mandatory Arbitration Clauses that Deny Groups of Consumers their Day in Court, Bureau Seeks Comment on Proposal to Ban a Contract Gotcha that
Prevents Groups of Consumers from Suing Consumer Financial Companies, Press Release, Consumer Financial Protection Bureau, May 5, 2016. 35—Idem. 36—Idem.
Jonathan Foxx is managing director of Lenders Compliance Group, the first and only full-service, mortgage risk management firm in the United States, specializing exclusively in outsourced mortgage compliance and offering a suite of services in residential mortgage banking for banks and non-banks. If you would like to contact him, please e-mail Compliance@LendersComplianceGroup.com.
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Congress in the early days of the Trump administration. 13—Arbitration Study, Report to Congress, pursuant to Dodd–Frank Wall Street Reform and Consumer Protection Act § 1028(a), Consumer Financial Protection Bureau, March 2015. 14—The CFPB Proposed Arbitration Ban, the Rule, the Data, and Some Considerations for Change, Ramona L. Lampley, Business Law Today, American Bar Association, May 7, 2017. 15—Idem. 16—U.S. Chamber: CFPB Arbitration Rule is Prime Example of Agency Gone Rogue, U. S. Chamber of Commerce, July 10, 2017. 17—Lawmakers Introduce ABA-Backed Legislation to Undo Arbitration Rule, ABA Banking Journal, July 20, 2017. 18—This Official Had the Spine to Stand Up to the Powerful CFPB. Congress Should Follow His Lead, Diane Katz, The Daily Signal (The Heritage Foundation), July 18, 2017. 19—Op. cit. 15. 20—Federal Regulator Moves to Mostly Ban Arbitration Clauses, Rohit Chopra, The New York Times via The Associated Press, July 10, 2017. 21—Waters Blasts Republican Effort to Use Congressional Review Act to Repeal Forced Arbitration Rule, Press Release, July 20, 2017. 22—Why You Won’t Get Your Day in Court, Jed S. Rakoff, The New York Review of Books, Nov. 24, 2016. 23—Contract of Adhesion, Wikipedia. 24—Adhesion Contract (Contract of Adhesion), Wex Law, Cornell Law School. 25—Earl of Chesterfield v. Janssen, 28 Eng. Rep. 82, 100 (Ch. 1750), referenced in Contractual Unconscionability: Identifying and Understanding Its Potential Elements, Paul Bennett Marrow, Columbia Law Journal, February 2000. 26—For a general description of Arbitration procedures and challenges, see Mandatory Arbitration deprives Workers and Consumers of their Rights, Report, Katherine V.W. Stone and Alexander J.S. Colvin, Dec. 7, 2015. 27—See, for instance, AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, April 27, 2011. 28—“Unconscionable” is actually a doctrine in contract law that describes terms that are so extremely unjust, or overwhelmingly one-sided in favor of the party who has the superior bargaining power, that they are contrary to good conscience. Typically, an unconscionable contract is held to be unenforceable because no reasonable or informed person would otherwise agree to it. The perpetrator of the conduct is not allowed to benefit, because the consideration offered is lacking, or is so obviously inadequate, that to enforce the contract would be unfair to the party seeking to escape the contract. See “Unconscionability,” Wikipedia. 29—The issue addressed was to determine if the Federal Arbitration Act (FAA) preempts state law that does not allow contracts which prohibit class action arbitration. The rule of law to be deliberated was that the FAA displaces state law which prevents the making of contracts which disallow class action. Vincent and Liza Concepcion and members of a class filed suit against AT&T for deceptive advertising. They had contracted with AT&T for the sale and servicing of cellular phones. The contract provided for arbitration and AT&T moved the court to compel arbitration. The
The Maladaptive, Irrational Cognitions of the Super Sales Producer By By Kerry Kerry Johnson, Johnson, Ph.D. Ph.D.
att is a $1.5 million producer. He has a new Porsche 911, Maserati, and a 5,000-square foot house overlooking a valley. He has two beautiful kids, a gorgeous wife and no debt. He has it made, except for the happiness part. He is frustrated about paperwork, staff, compliance regulations and parent company edicts. But many top producers are frustrated. The difference is that Matt isn’t happy. But he likes his career and his freedom. He loves his income. Why can’t he just count his blessings? Thirty-five percent of the U.S. population have mental problems. Some are more severe than others. In graduate school, a professor jokingly told me the difference between Neurotics and Psychotics. Neurotics build sand castles in the sky, Psychotics move into them, and Psychologists collect the rent. I have always thought about the differences more concretely. If you
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ask a Psychotic what two plus two equals, they will say 36,981, 012, with no sense of reality. But if you ask a Neurotic the same question, they will always say four. But follow up with, “Why does it always have to be 4? It makes me nuts it can’t be five every once in a while.” The drive that causes one to be super successful can also cause the psychological disease that causes dissatisfaction. A U.S. postal worker does an 8:00 a.m.-5:00 p.m. day with no pressure. They know their job, show up for work and get paid. They rarely get fired, sometimes get promoted, but have no motivation to work hard and make more money. The super sales producer is unemployed until his next sale, and is always under stress. When I was 26 and a new stock broker, my manager encouraged me to buy a new BMW 535. His attitude was a producer with financial stress was a harder worker than a financially comfortable one. But the stress super producers feel is self-inflicted. Why? There is a hole in their ego
constantly in need of being filling. They are super competitive and struggle to reach the next level. Managers love these producers, but also find them challenging. These super producers complain constantly, sometimes think things are unfair, and are generally headaches to those who work with or supervise them. John had a good year. He grew his business to $2 million in income and is really irritated it wasn’t more. His goal was to increase income by 25 percent. It only rose 10 percent and he isn’t happy. The average household income in the U.S. is $54,000. Only one percent of Americans earn more than $500,000, and have a net worth of more than $1 million. But that doesn’t matter to maladaptive irrational super producers. Why aren’t they happy? It could be a non-approving father or a critical mother. It could be a povertystricken upbringing. But these folks are constantly trying to fill the void, struggling to be good enough. I renewed my driver’s license at
the DMV a while ago. The last step was a photo. Third in line, the photographer told each before me to put their feet in the yellow outline, look at the camera, wait for the flash and walk to checkout counter. When it was my turn, I handed him my paperwork and said, “Won’t you be glad when you can rotate out of this job to another DMV station.” He said, “I have been here doing the same job taking driver’s license photos for 25 years. He then said, “Put your feet in the outline, look at the camera.” This is not a super sales producer. They get easily bored, need to be challenged constantly, and most importantly, feel valued. In my coaching practice, we guarantee clients will increase their business by 80 percent in eight weeks. Actually, because we first commit our clients to a business plan, it’s hard not to get on an 80 percent in eight weeks track. They only need someone to hold them accountable. But the super sales producers are different. They need more praise than the rest. It was
my mistaken belief that the biggest producers were psychological emotional giants. I thought they were more emotionally insulated than lesser producers. The opposite is true. They need more stroking, praise, and self-worth injections than others. It is a counter-intuitive concept for most colleagues and managers. These super producers sometimes diminish praise by saying things like, “It’s not enough” or “Let’s see what happens next month.” Managers or colleagues think they don’t want praise. But these super producers need praise even more than the less gifted sort. A rule of thumb is to catch super producers in the act of being successful. When they complain about paperwork, tell them how well they are managing their time. When they whine about a slow Internet connection, tell them you will work on it, but at their lofty level, it’s only a speed bump. Remind them of how well they have done before or a hurdle they overcame earlier. “Hey Jim, remember the case
you sold that produced $50,000 last month. Boy, you worked hard on that. You are absolutely gifted. You are the best I have ever seen.” It is hard to be gratuitous with a super producer. They are looking for any reason to build their selfesteem. Since they find it hard to self-praise, it needs to come from you. Obviously, you want the praise to be sincere. But a rule of thumb is to praise them three times a day and rationalize training as way to be even more successful than they already are. Remember, you are trying to fill an emotional hole. Don’t worry about sterilizing your super producer. They will just produce more and be happier in the process. I have three daughters. I have always told each they were my favorite. It’s now a family joke. But there’s a reason to my madness. One of my heroes was Congressman Jack Kemp. He was an NCAA All-Pro Quarterback at Occidental College, won the NCAA Championship and later played QB for the Buffalo Bills. He went on to
be a U.S. congressman and even the running mate of Sen. Bob Dole in the 1996 U.S. Presidential Election against Bill Clinton. Just before the National Championship, Kemp’s college coach called him into his office. “Jack, you are a natural born leader,” said his coach. “You are the most gifted and hardworking player I have ever coached. I need you lead this team to a National Championship. Motivate the rest of the players to give all they can in the game and we will walk away with the championship. But don’t tell any of the players we had this conversation.” Kemp said, “Okay coach. Thanks for believing in me. I will bring back the trophy.” They went on to win the
championship and Kemp went on to a great career. At a reunion decades later, one player walked up to Kemp and said, “Coach liked me best.” Kemp laughed at such a random statement and asked why he thought that. The lineman said, “Coach called me into his office before the National Championship and told me I was the most gifted and hardworking player he had ever coached. He told me to lead the team and motivate the other players.” The coach told every player the same thing. The Occidental College football coach won a National Championship by motivating the maladaptive irrational super producers to even greater things.
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.
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Blockchain Collaboration: The Best of the Deal Room Without Having to be There By Jason Nadeau
s someone who works for a software company, you’re probably not surprised to hear that I’m an early adopter of technology. I believe in the power of tech companies to devise innovative solutions to solve the world’s most complex problems. That said, I can still appreciate a few things that worked well—and perhaps even better than most of today’s digital solutions—back in the “old world,” which was preInternet. One such area is with document review and collaboration. Remember back in the day before virtual data rooms and other types of electronic and cloud-based systems existed—and even before e-mail existed—to allow distributed groups to share and review files electronically? In that era, when you were involved in a significant deal everyone got together and were available together with the documents and files in a single room. It was only by huddling together in the same physical space that all stakeholders could be ensured that they were looking at the most current, accurate files. We called it the “deal room.”
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On the same page This “deal room” approach gave everyone involved the confidence that they were all on the same page—quite literally. In the deal room, since the group had only a single set of printed papers in front of them, there was no chance that one person was reviewing outdated information that someone else had changed the day before. You knew you were all looking at the same current data, and for this reason alone, the deal room was truly reliable as the go-to collaboration strategy when any type of formal agreement or documentation needed to be reviewed and signed. The deal room, of course, wasn’t always quick, convenient, or inexpensive. Obviously this involved significant travel and often times a significant lag in communication between the team members “in the room” and those back at the office. Teams flew in from distant locales to gather shoulder-to-shoulder in the deal room to negotiate and execute a wide range of business and legal dealings. This could be anything from mortgage paperwork and property sales to audits, mergers and acquisitions, litigation, share sales, IPOs, and more. It may have been a pain to travel to where the definitive documentation was, but at least no one had to worry about anyone wasting time reviewing stale data or documents.
New conveniences, new costs Fast-forward to the Internet age. With electronic capabilities came the option to “just send it”—with the click of the mouse, teams now had the ability to e-mail files to each other rather than having to get on a train or plane and transport themselves into the deal room. This “New World” of electronic document collaboration was definitely convenient. It was certainly easier to deliver a file electronically to each person’s inbox then move one or more people physically to meet in the deal room. Theoretically—on the front end, anyway—the new world offered the potential of significant
company’s server after the file was sent. Yes, the file was accurate in terms of matching what the accountant sent out, but was it still current? No one really knew. To try to avoid this versioning problem, another electronic solution was devised that involved sending a link to the most current file rather than the file itself. This offered participants the advantage of knowing that once they clicked on the link, they would see the most current file, since everyone making changes would be working off of the same document internally. But this system wasn’t foolproof either. If the recipient opened the file using the link they were sent today and started working on that file as a new
cost savings as well. Travel costs related to document collaboration and review were essentially eliminated, and people didn’t lose work time on other projects getting back and forth to look at one set of papers. There was a problem, though, with these “improvements” in reviewing documentation virtually. If the reviewers sent the files back and forth to each other via email or transferred them via a secure server or cloud solution, once one player took the file out of his or her system and clicked “send” or uploaded the file to a different location, they lost control over knowing whether the information was current. For example, if an accountant involved in a business’s tax audit sent her most current spreadsheet to her colleague via email, neither the sender nor the recipient knew for sure from that moment on whether someone else at the accounting firm updated the information on the
document that was no longer linked, suddenly the versioning issue reared its ugly head again. When people use a link between their systems instead of the actual documents, they have no way to see when another person involved in the transaction changes the file, rendering the linked version instantly obsolete. Even when sophisticated deal or transaction management technology is used to keep everyone on the same page, the issue of permanence becomes critical. Deal management technology is designed to get you through the transaction efficiently, not to ensure you have permanent,
court-worthy documentation of the deal. Getting back to basics As you can see, neither of these commonly used technology solutions for document collaboration—sending the actual documents themselves or a link to the documents—is as reliable as the good old-fashioned physical deal room. The new technology got us about halfway back to the paper, but not all the way. It solved some problems and saved some costs, but created new challenges and generated new expenses when people wasted time reviewing outdated files. Fortunately, there is a truly revolutionary document collaboration technology that gets us all the way back to the benefits of that deal room—without anyone having to go there in person. While raising the bar on the limitations of the deal room, blockchain technology gets us symbolically back to the effectiveness of the paper collaboration model. It ensures that all reviewers regain 100 percent certainty that they’re looking at an unchanged document, just like when they were standing side by side in a room together. It’s a simple process, too. Once a party registers with a blockchain company, they can feed a document into the company’s system, and a cryptographic proof of the document goes onto the blockchain. Then if anyone in the collaborative ecosystem edits or changes the file, the team will be informed that a change has occurred. This means that just like in the deal room, the document is always guaranteed to be current. Once more, everyone involved in the collaboration has assurance that the information won’t change out from under them. They will instantly know if any changes have occurred. It’s a disruptive collaboration model that keeps what worked about a brick-and-mortar system— and eliminates its inefficiencies— while integrating the highest-end technology possible to improve upon what was already a good thing. The result is that blockchain gives collaboration teams the opportunity to, in essence, stand side by side together as document reviewers without ever leaving their own offices.
Jason Nadeau is Executive Vice President at Factom Inc., working to lead the strategy for the mortgage industry including revenue growth, strategic partnerships and business development strategy. Nadeau also served as Founder, President and CTO of RealEC Technologies (now a Black Knight company) where he and the RealEC leadership team developed the largest Electronic Partner Network for the mortgage industry.
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company’s proprietary digitallending technology. loanDepot’s mello technology includes an intuitive Web-based consumer portal, a state-of-the-art, mobile point-of-sale system, and a fully-digital mortgage loan application experience. The company has invested $80 million to date on its digital-first technology strategy. “Our lending professionals and LD tech team have combined strengths to create an unstoppable force in next-gen lending,” said loanDepot Chief Executive Officer and Chairman Anthony Hsieh. “Our never-ending, iterative innovation process is the basis of our business strategy and our true competitive advantage.” Dominick Marchetti, Chief Technology Officer at loanDepot, said, “Our new Innovation Lab is the physical incarnation of mello. The combination of collaborative spaces and dedicated quiet rooms will let employees work in the environment they are most comfortable and allows for a quick ignition of ideas and engaging work flow.” In designing the new space, Hsieh and Marchetti focused on defying convention to create an open-air, collaborative work environment to connect 400-plus technologists with not only each other but with the beautiful Southern California weather as well. The space incorporates the spirit of fun, including a slide for when stairs are just too slow; open stadium seating for skunkworks-inspired sessions; and areas to relax with a game of ping-pong or rest in quiet areas. The mello Innovation Lab is currently under construction and has a goal of opening at the end of 2017 or the beginning of 2018. Valuation Partners Joins With LendingQB to Streamline Appraisals
Valuation Partners has announced that its services have been integrated into LendingQB, a Webbased loan origination system (LOS) for mortgage lenders. The bidirectional integration enables lenders to order, track and receive appraisal reports and communicate in real time with Valuation Partners all from within the LendingQB platform, saving time and creating greater efficiency.
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“LendingQB shares our view that the appraisal process needs to be simpler and more efficient, so this integration was a perfect fit,” said Bill Fall, President and Chief Executive Officer of Valuation Partners. “We are delighted to be the first AMC with these additional capabilities on the LendingQB platform, which has earned high marks among lenders for its effectiveness and positive user experiences.” LendingQB users will be able to communicate directly with Valuation Partners’ account representatives without having to leave the LendingQB platform. This capability provides lenders with greater control over the appraisal process and enables LendingQB users to request and receive immediate updates on the status of their appraisal orders, which minimizes potential delays. “Integrating Valuation Partners’ products and services into our platform while enabling bidirectional communication will generate enormous value for our clients,” LendingQB President Tim Nguyen said. “We are particularly impressed by the company’s proprietary purchase appraisal process, which ensures every appraisal is tracked to avoid delays and undergoes an accelerated quality review. This integration will make it much easier for our clients to manage the appraisal process.” LenderLive Launches Compliance Solutions Division
LenderLive Services LLC has announced that it will now provide expanded compliance services through a new line of business, LenderLive Compliance Solutions. The new entity will offer both bundled and a la carte services to banks, non-bank mortgage servicers, credit unions, and other financial institutions. Maria Moskver, General Counsel and Enterprise Compliance Officer for LenderLive, will lead LenderLive Compliance Solutions. Over the past two decades, LenderLive Services has developed significant in-house expertise in regulatory compliance, operational controls, systems and industry best practices. The company maintains one of the most extensive template libraries, including origination documents for all 50 states, as well as borrower communications for
loss mitigation, preforeclosure/default and general servicing. LenderLive will continue to offer its Compliance Solutions bundled with best-in-class fulfillment and document services, to enterprise clients. In addition, LenderLive Compliance Solutions will now give smaller companies the option to access its compliance solutions on an a-la-carte basis. This flexible approach will allow community banks, credit unions and regional banks to supplement their internal compliance resources with LenderLive’s proven expertise Mortgage Professionals to Watch l New American Funding has announced that its Co-Founder and President Patty Arvielo has been named to the Consumer Advisory Board of the Consumer Financial Protection Bureau (CFPB). Arvielo was appointed to a three-year term as one of its new board members. The CFPB’s Consumer Advisory Board is comprised of consumer experts outside of the federal government. New American Funding has also named Zeeda Daniele to oversee its Community Lending Division, serving as Community Lending and Strategic Partnerships National Manager. In this role, she will establish nationwide partnerships with non-profits and community banks in order to provide affordable loan programs and homebuyer education to housing consumers. New American Funding continues its Midwest expansion with the grand opening of another Missouri location in Clayton, Mo. Brandon and Megan Smith will serve as Co-Branch Managers for the new Clayton branch, collectively bringing 20 years of experience in the mortgage industry to the new location. l ACES Risk Management (ARMCO), a Pompano Beach, Fla.-based provider of financial quality control and compliance software, has announced that Chief Operating Officer Phil McCall has been promoted to company President. l Castle & Cooke Mortgage has announced its expansion into the state of Mississippi with the opening of its Southaven branch, to be managed by 16year industry veteran Tammy D. Kennedy. Castle & Cooke has also announced its expansion in Southern California with the
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opening of its Glendora, Calif. branch. The new Glendora branch will be led by industry veteran and local Louie Rutnam, who has more than 15 years of experience in the mortgage industry. HomeBridge Financial Services has announced that Bill Roberts, a 25-year mortgage industry veteran, has joined the company’s Wilmington, Del. office in the role of Branch Manager and Mortgage Loan Originator. NewLeaf Wholesale’s National Sales Manager Tom Conklin has announced the promotion of Jeff Garrison from Regional Sales Manager to Western Divisional Sales Manager. Primary Residential Mortgage Inc. (PRMI) has added mortgage industry veteran Branch Manager Lori Marrow to its newest brick-and-mortar office in Newport News, Va. Mortgage Capital Trading Inc. (MCT) has appointed Bill Berliner to the newly created position of Director of Analytics, where he will take the lead in developing new products and services, enhancing existing solutions, and helping expand MCT’s footprint. Mortgage Network Inc. has hired Laurie Souza as a National Business Development Manager, responsible for building the company’s business partnerships, growing its renovation and portfolio loan businesses, and acting as a resource for loan officers regarding products and scenarios. Waterstone Mortgage Corporation has announced that Eric Putt has joined the company as a Producing Manager in the company’s Orlando, Fla. office where he will be responsible for recruiting and training loan originators and helping borrowers throughout central Florida with their home purchase and refinancing needs. Pete Salamone, a mortgage industry veteran with more than 20 years serving borrowers, has joined Waterstone Mortgage as a Regional Manager, overseeing the company’s growth and recruiting efforts in the Southeastern Wisconsin region. Angel Oak Mortgage Solutions has announced the addition of five Account Executives to help originators grow their business across the country: David Hill joined in Atlanta; Gerica Coad in Sacramento, Calif., along with Sal Perez (Inside Sales); and coming on board in Florida,
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l Home Point Financial Corporation has announced that Chad Patton has been named Executive Managing Director-Chief Strategy Officer, where he will focus on funding and capital planning, business intelligence and strategic initiatives. l Orange Coast Title Company has announced that Kent Schmeeckle has joined their management team as Vice President and Senior Underwriter. 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@MortgageNewsNetwork.com
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We are seeking nominations from our readers for National Mortgage Professional Magazine's "40 Under 40" feature, slated to appear in our December 2017 edition. Anyone who is under the age of 40 and has had a major impact on the industry can qualify for this feature. This could be through innovation, association participation, sales force automation, community activism, management techniques, technology or any other significant method that has influenced our industry. We would need a short, three-line bio on the nominee, along with a color photo and company contact info to complete the profile. To nominate yourself or someone else, visit NMPMag.com/nominate40under40.
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has also announced the addition of its newest branch in Palm Harbor, Fla., to be led by Branch Manager Anthony Johncola. Joining Johncola’s team as Mortgage Loan Originators are Walter Parker and Dan Clancy. GSF Mortgage has named Jaime Delvalle as a Loan Originator in the company’s Mandeville, La. branch. GSF has also named Laura Navarro as Branch Manager for the company’s newest branch located in Crown Point, Ind. Joining Laura as a Mortgage Loan Originator is Teri Parsons.
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Stacy Flanigan in Tampa and Denise Perez in Ft. Lauderdale. Churchill Mortgage has announced that Tom Gillen has been named Senior Vice President of Capital Markets, where he will oversee the ongoing development of its business strategies to drive growth and strengthen the lender’s commitment to borrowers across the country. Bay Equity Home Loans has named industry veteran Chris Carbonaro as an Area Sales Manager for the company’s Danville, Calif. branch office. First California Mortgage Company (First Cal) has announced the hiring of several new regional managers, including: Bruce Lazarus, Branch Manager in Davie, Fla.; John Warnock, Regional Production Manager for Southeast Markets (Florida, Georgia, South Carolina, North Carolina), based in Palm Harbor, Fla.; Steve Samuelson, Regional Production Manager for the Pacific Northwest and Northern California, based in Bothell, Wash.; Budd Malchus, Area Sales Manager for Southern California–North County, based in Valencia, Calif.; Joe Kolesar, Regional Production Manager for the South Central Region (Texas, Oklahoma, Kansas), based in Dallas, Texas; Chris Martin, Regional Production Manager for Southern California–South County, based in San Diego; and Peter G. Butler, Regional Production Manager for the Mountain West Region, based in Greenwood Village, Colo. Don Fragoso has been named National Sales Manager of MN Capital Home Mortgage. loanDepot has named Brian Decker as Retail Lending Manager for the company’s new Temecula, Calif. retail lending location. The Mortgage Collaborative (TMC) has named Arthur Prieston, CMB as Chair of its newly formed Capital Markets Committee, where he will lead capital market engagements for the group’s lender members. Prieston is the Chairman of The Prieston Group, which includes TPG subsidiary PBIS and affiliate American Mortgage Law Group. GSF Mortgage Corp. has added a second office in Columbus, Ohio, to be led by Branch Manager Anthony Lavalle. Accompanying Lavalle is Mortgage Loan Originator Brandon Lay. GSF Mortgage
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Attention Recruiters, Business Development Managers and HR Professionals PRMG 1-855-PRMG-FAN! (855-7764-326) www.PRMG.net 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.
REMN Wholesale 732-738-7100 www.remnwholesale.com 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.
United Wholesale Mortgage 800-981-8898 www.uwm.com/careers 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@MortgageNewsNetwork.com
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NATIONAL MORTGAGE PROFESSIONAL MAGAZINE’S
calendar of events
AUGUST 2017 Thursday-Friday, August 24-25 LMLA 2017 Education Conference New Orleans Hilton Riverside Hotel 2 Poydras Street New Orleans For more information, call (225) 590-5722 or visit LMLA.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.
Thursday, September 14 HAMB: The Next Generation 26th Annual Conference & CE Class JCCH-Manoa Ballroom 2454 South Beretania Street Honolulu, Hawaii For more information, visit HAMB.org.
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. 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. Sunday-Tuesday, September 24-26 Mortgage Bankers Association 2017 Risk Management, QA & Fraud Prevention Forum Intercontinental Miami 100 Chopin Plaza • Miami For more information, visit MBA.org. Wednesday, September 27 NYAMB’s 29th Annual Convention & Trade Show The Melville Marriott 1350 Walt Whitman Road Melville, N.Y. For more information, call (914) 315-6644 or visit NYAMB.org.
Saturday-Monday, October 14-16 NAMB National 2017 Rio All-Suite Las Vegas Hotel and Casino 3700 West Flamingo Road Las Vegas For more information, visit NAMB.org. Saturday, October 21 MPowering You: MBA’s Summit For Women in Real Estate Finance Mile High Ballroom Colorado Convention Center 700 14th Street Denver For more information, visit MBA.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.
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@mortgagenewsnetwork.com. *Looking for additional exposure at key industry events? Call 516.409.5555, ext. 4 to discover how to maximize your event coverage.
Monday-Wednesday, November 13-15 Mortgage Bankers Association 2017 Accounting and Financial Management Conference Grand Hyatt San Antonio 600 East Market Street San Antonio, Texas For more information, visit MBA.org. DECEMBER 2017 Monday-Tuesday, December 4-5 Mortgage Bankers Association Summit On Diversity and Inclusion 2017 Capital Hilton 1001 16th Street NW Washington, D.C. For more information, visit MBA.org.
Tuesday, December 5 2017 California Holiday Networking Party The Atrium Hotel 18700 Macarthur Boulevard Irvine, Calif. For more information, call (516) 409-5555. JANUARY 2018 Monday-Thursday, January 22-25 Mortgage Bankers Association Independent Mortgage Bankers Conference 2018 The Ritz Carlton, Amelia Island 4750 Amelia Island Parkway Fernandina Beach, Fla. For more information, visit MBA.org. FEBRUARY 2018 Tuesday-Friday, February 6-9 Mortgage Bankers Association National Mortgage Servicing Conference & Expo 2018 Gaylord Texan 1501 Gaylord Trail Grapevine, Texas For more information, visit MBA.org. Sunday-Wednesday, February 11-14 Mortgage Bankers Association CREF/Multifamily Housing Convention & Expo Marriott Marquis San Diego Marina 333 West Harbor Drive San Diego For more information, visit MBA.org.
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Wednesday-Thursday, September 13-14 Mortgage Professionals of Iowa 2017 Convention/Education Echo Valley Country Club 3150 Echo Valley Drive Norwalk, Iowa For more information, call (515) 669-5571 or visit Impoi.wildapricot.org.
Sunday-Tuesday, September 17-19 Mortgage Bankers Association’s Regulatory Compliance Conference 2017 Grand Hyatt Washington 1000 H Street Washington, D.C. For more information, visit MBA.org.
OCTOBER 2017 Monday-Thursday, October 9-12 Northeast Conference of Mortgage Brokers & Professionals 2017 Harrah’s Resort & Convention Center 777 Harrah’s Boulevard Atlantic City, N.J. For more information, call (732) 596-7642 or visit MBANJ.com.
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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.
Thursday-Friday, September 14-15 Mortgage Bankers Association Human Resources Symposium Residence Inn Arlington Capital View 2850 South Potomac Avenue Arlington, Va. For more information, visit MBA.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
MORTGAGE BROKER AND LENDER COMPLIANCE
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AUDIT, MLO POLICIES and UPDATES Our fees are less than the big national firms
Concord Church Lenders www.concordchurchfinance.com 800-926-0399
that don’t call you back. Program includes all Manuals including QC, MLO Policies and Comp Plans, AML, GLB,
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Social Media and Web audits, on-line training sessions, governance documents, and our audit protection plan. Available in all 50 states. We have hands-on experience with regulators and audits. No theories here; we were Bankers. If you find yourself in federal court, we can handle that as well. Contact Nelson Locke at (800) 656-4584. Or you may e-mail us at nl@lockelaw.us All inquiries will be kept strictly confidential. This is not an offer for legal services, but rather for his expert review and opinion about your particular compliance situation. All fact patterns are different so the results will vary. No guarantees are expressed or implied. Licensed by California and Federal Bar. NMLS 149450.
AUDIT TECHNOLOGY
ACES Risk Management (ARMCO) 1000 West McNab Rd. Pompano Beach, FL 33069 (800) 858-1598 www.armco.us
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Visit our website to pre-qualify and request a FREE QUOTE
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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
ACES Risk Management delivers web-based audit technology solutions, as well as powerful data and analytics, to the nation’s top mortgage lenders, servicers, investors and outsourcing professionals. A trusted partner devoted to client relationships, ARMCO offers best-in-class quality control and compliance software that provides U.S. banks, mortgage companies and service providers the technology and data needed to support loan integrity, meet regulatory requirements, reduce risk and drive positive business decisions.
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
BOOTS ACROSS AMERICA TOUR 2016-2017 Beverly@BootsAcrossAmerica.org Certified Military Home Specialist Beverly Ray Frase "Training Boots on the Ground" Since 2009 • Trained 3,000 CMHS course grads • Trained for Depts of HUD, Treasury & more • 20+ years' experience in real estate & finance, military life COMING TO YOUR CITY!
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Direct Private Money and Bridge Lender specializing in Stated Loans in CA 866-668-2663 Send Scenarios to info@CalHardMoney.com 5 Park Plaza, 10th Floor Irvine, CA 92614 www..HomeBridgeWholesale.com m
LENDING CRITERIA · Collateral: Stated 1st and 2nd position loans on N/O/O invest. properties (SFR, Condo, 1-4 units), Mixed-use, 5+ units, Retail, Industrial, Warehouse and Etc. · Fix & Flip program up to 70%-80% of the Purchase price on all types of properties · Loan amounts/Terms: $50,000 up to $5,000,000 and loans from 6 months to 10 years. · LTV: Purchases up to 70%-80% LTV; Refinances up to 60-65% LTV; 2nd Position up to 65% CLTV · BROKERS ALWAYS PROTECTED AND RATES STARTING AS LOW AS 8.50%
MARKETING
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.
REVERSE MORTGAGES
WHOLESALE LENDERS
866-318-2981 Partners.ReverseFunding.com/LearnMore
REMN Wholesale www.remnwholesale.com 866-933-6342
Reverse Mortgage Funding LLC (RMF), one of the 5 Park Plaza, 10th Floor nation's top Home Equity Conversion Mortgage (HECM) Irvine, CA 92614 lenders, delivers industry-leading products, top-quality www..HomeBridgeWholesale.com m service, and advanced technology platforms to help originators grow their business by adding reverse mortHomeBridge Wholesale iis a national wholesale lender offeering Conventional, gages to their mix. G J b product dR i Loans. L W are comm mitted to providing Government, Jumbo, and Renovation We ng, unique product the highest value to our clients through competitive pricin Weofferings, offer line-of-credit, and home purchase art technology. superior customer refinancing service, and state-of-the-
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
options with flexible repayment for homeowners and buyers age 62+, plus service and support to help faciliNow Wholesale Sales Managers/Account Executives Nationwide tateHiring the transaction. send resumes to Marketing@HomeBrridge.com (NMLSPlease ID: #1019941)
WHOLESALE/CORRESPONDENT LENDERS
Greenbox Loans, Inc 3250 Wilshire Blvd., Suite 1900 Los Angeles, CA, 90010 (800) 600-9198 www.greenboxloans.com Greenbox Loans, Inc. is a proven leader in the Non-QM & Non-Prime lending environment offering bank statement programs, foreign national lending solutions, along with programs allowing for recent short sale, foreclosure, bankruptcy for borrowers as low as 500 Fico Score. Greenbox Loans, Inc. is a national lender offering its programs through a multiple of channels including Retail, Wholesale, and Investor Specialty division.
WHOLESALE LENDERS
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PRIVATE FINANCING
Now Hiring Wholesale Sales Managers/Account Executives Nationwide Please send resumes to Marketing@HomeBrridge.com
NationalMortgageProfessional.com
TagQuest www.tagquest.com 888-717-8980
HomeBridge Wholesale iis a national wholesale lender offeering Conventional, Government, Jumbo, Renovation We G J b and dR i Loans. L W are comm mitted to providing the highest value to our clients through competitive pricin ng, unique product offerings, superior customer service, and state-of-the-art technology.
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Š 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.