National Mortgage Professional Magazine December 2016 by ambizmedia

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table of

N A T I O N A L

MBA’s 2016 Annual Convention Survey: A Report of Findings By Tom LaMalfa

D E C E M B E R

34 Recruiting for the Future By Phil Hall

2 0 1 6

M O R T G

V O L

A SPECIAL FOCUS ON “2016: THE YEAR-END REVIEW & GROWTH STRAGEGIES FOR 2017”

R I

Strategies That Get You to the Goal Post By Alice Alvey......................74

Four Keys to Focus on in the New Year By Chad Gomoll ....................78

DIY Technology: It’s More About Value Than Cost By Carlos Sa ........80 Will History Repeat Itself in 2017? By John Pataky ................................84

Business Plan? I Don’t Need No Stinking Plan By Eric Weinstein ........86

The Fail-Proof Business Plan for 2017 By Bubba Mills..........................87

38 NMP’s Legends of Lending: Quicken Loans Mortgage Services By Phil Hall

Three Factors That Will Drive the Mortgage Industry in 2017 By Steve DiMarco ......................................................................................88

Change Is Certain By Sanjeev Dahiwadakar............................................89

Drafting Your Digital Mortgage Strategy for 2017 By Valentin Saportas ..................................................................................90

Digital Marketing Helps Mortgage Pros React to Changing Conditions By Craig Rowe ........................................................................92

Add Builder Business to 2017 and Take a Walk on the Wild Side! By Shirleen Von Hoffman ..........................................................................94

People, Process, Product and Price Drive Growth in a Changing Market By Jim Clapp ................................................................................96

W W

Staying Flexible in a Rollercoaster Origination Market By Timothy Moreland ................................................................................98

FEATURES

52 NMP’s Mortgage Professional of the Month: Ralph Rosynek, SVP of the U.S. Division and CIO for Moneyhouse Inc. By Phil Hall

56 The 40 Most Influential Mortgage Professionals Under 40

How High Can Non-Agency Lending Fly in 2017 and Beyond? By Tom Hutchens ........................................................................................8 The Elite Performer: Be a Teacher, Not a Salesman By Andy W. Harris, CRMS............................................................................8

V I S I T Company

Web Site

O U R

A D Page

Agility Resources Group ...................................... www.agilityresourcesgroup.com ......................................98 American Advisors Group.................................... www.aagwholesale.com ................................................97 Angel Oak Mortgage Solutions ............................ www.angeloakms.com ..............................75 & Back Cover Brokers Compliance Group.................................. www.brokerscompliancegroup.com ................................112 Caliber Home Loans.............................................. www.caliberwholesale.com ..............................................17 CallFurst.com ...................................................... www.callfurst.com ............................................................85 Carrington Mortgage Services, LLC ...................... www.carringtonwholesale.com ..............................15 & 80 Citadel Servicing Corporation .............................. www.citadelservicing.com ..............................................63 Document Systems, Inc./DocMagic ...................... www.docmagic.com ........................................................7 First Guaranty Mortgage Corp. ............................ www.fgmccorrespondent.com ..........Inside Front Cover & 84 Flagstar Bank .................................................... www.flagstar.com/ae ....................................................49 Freddie Mac ...................................................... www.freddiemac.com/loanofficers ............................5 & 77 Freedom Mortgage Corporation .......................... www.freedomwholesale.com ..........................................51 Geneva Financial, LLC ........................................ www.genevafl.com ........................................................37 HomeBridge Wholesale ...................................... www.homebridgewholesale.com ....................................71 Inlanta Mortgage .............................................. www.inlanta.com ........................................................107 Integrity Mortgage Group.................................... www.integritymtgs.com ..................................................13 Lykken On Lending ............................................ www.lykkenonlending.com ............................................91 MBS Highway .................................................... www.mbshighway.com/MNN ..........................................99

T T T

of contents

R T G A G E

O L U M E

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

N U M B E R

1 2

Recruiting, Training and Mentoring Corner: Recruiting? It’s Your Sphere By Dave Hershman ........................................................10

The Commercial Corner: Planning for Commercial in 2017? By Michael Boggiano..................................................................................16 NAMB Perspective: December 2016 ......................................................20 Compliance Matters: E-sign and Enforcing Electronic Signatures By Jonathan Foxx ......................................................................................26 Attracting New Career Professionals By Michael Dresden ..................28 TRID, the Election and What You Can Do Now: Part I By Richard Horn ........................................................................................32 Ending the Fourth Quarter With a BOOM!..............................................36 Lykken on Leadership: How to be the Kind of Leader People Actually Want to Follow By David Lykken ..............................................46 Systems Will Improve Your Production, Recruiting and Retention By Steve Rennie ........................................................................................48 Sorry to Spoil Your New Year’s Wishes … A Trump Administration Will Not End the CFPB By Andrew Liput..................................................50 Shedding Light on the Invisible Children By Phil Hall............................54 MBA’s Mortgage Action Alliance ............................................................66 Why What You Are Doing Is Actually Hurting Your Production … What to Do Instead By Brian Sacks ........................................................68 The Long & Short: The Business of Short Sales By Pam Marron ........70 The Basics of Commercial Mortgage Underwriting By Stephen A. Sobin ..................................................................................72 Orion Lending Chooses Class Appraisal: A Case Study ....................100 nmpU Campus Talk By Ron Vaimberg ..................................................102 How to Handle Underwriter Shortage By Lisa Binkley ........................104 OrigiNation: Preparing for 2017 By Andy W. Harris, CRMS ................106

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

Web Site

Page

Moneyhouse U.S. .............................................. www.mhodportal.com ....................................................79 Mortgage News Network (MNN) .......................... www.mortgagenewsnetwork.com ............................40 & 41 NAMB+ ............................................................ www.nambplus.com ......................................................25 NAMB PAC ........................................................ www.namb.org ..............................................................27 NAPMW ............................................................ www.napmw.org ....................................................64 & 78 NAWRB ............................................................ www.nawrb.com ............................................................81 New England Mortgage Expo .............................. www.nemortgageexpo.com ............................................74 New York Community Bancorp. Inc. .................... www.nycbmortgage.com ................................................83 NMP U .............................................................. www.nmpucoaching.com ..................................33, 47 & 95 NRMLA.............................................................. www.nrmlaonline.org ....................................................86 Paramount Residential Mortgage Group, Inc. ...... www.prmg.net ..........................18, 19 & Inside Back Cover Primary Residential Mortgage Inc. ...................... www.primaryresidentialmortgage.com ..............................1 REMN Wholesale ................................................ www.remnwholesale.com ................................................9 Secure Insight.................................................... www.secureinsight.com ..................................................43 TagQuest .......................................................... www.tagquest.com ........................................................93 The Bond Exchange............................................ www.thebondexchange.com ..........................................87 The Mortgage Collaborative ................................ www.mortgagecollaborative.com ....................................67 United Wholesale Mortgage ................................ www.uwm.com ..............................................................11

DECEMBER 2016 Volume 8 • Number 12

FROM THE

1220 Wantagh Avenue • Wantagh, NY 11793-2202 Phone: (516) 409-5555 • Fax: (516) 409-4600 Web site: NationalMortgageProfessional.com

publisher’s desk

STAFF Eric C. Peck Editor-in-Chief (516) 409-5555, ext. 312 ericp@nmpmediacorp.com

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ARTICLE SUBMISSIONS/PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck at (516) 409-5555, ext. 312 or e-mail ericp@nmpmediacorp.com. The deadline for submissions is the first of the month prior to the target issue.

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

A year in review … a plan for next year’ growth s 2016 winds down to a close, we are left looking back at a year of change unlike anything we’ve seen thus far this century. We enter 2017 with a new administration in Washington, a recovering industry that is stronger than it has been in a decade and a readership ready to grow in the year ahead. It is my great pleasure to support you in the achievement of that goal with this December issue. First, for inspiration, we bring you our annual list of the 40 Most Influential Mortgage Professionals Under 40 (see page 56). This peer-reviewed and approved list of leaders have persevered in a time of regulatory uncertainty, and are ready to explode into 2017. We can all learn a great deal from their examples. We’ll also shine a light on a company and an executive in this issue that all of our readers can learn from and be inspired by. Our December Legends of Lending focus is on Quicken Loans Mortgage Services (see page 38). If the digital mortgage is really imminent, as many leading experts believe, then Quicken’s Rocket Mortgage is worthy of study. As is month’s NMP Mortgage Professional of the Month, Ralph Rosynek, Senior Vice President of the U.S. Division and Chief Information Officer for Moneyhouse Inc. (see page 52). In addition to the regular columns you have come to expect in National Mortgage

Professional Magazine, we have some great content for you this month to close out 2016. Some of it looks back at the lessons we learned this year, while other experts take a peek into the future to help us see what is coming up next. Eric Weinstein talks about the need for a business plan or not (see page 86), while Shirleen Von Hoffmann talks about making builder business part of your plan for the coming year (see page 94). Are you looking for a fail-proof business plan? Then don’t miss the article by Bubba Mills on page 87. Chad Gomoll of Inlanta Mortgage offers up four things you need to be focusing on in the New Year beginning on page 78. Valentin Saportas of MortgageHippo offers some advice for crafting your digital strategy for next year (see page 90) and Timothy Moreland of ATPR writes about staying flexible in the rollercoaster loan origination business on page 98. When it comes to the technology you use every day, Carlos Sa, head of IT for Mortgage Network, has some recommendations around DIY technology beginning on page 80. When it comes to looking into the future, we have some great articles in this issue. Steve DiMarco, president of Key Mortgage, talks about three factors that will drive the mortgage industry next year on page 88, which John Pataky of EverBank asks whether history will repeat itself in 2017 (see page 84). As to building your own future, Sanjeev Dahiwadkar, president and CEO of IndiSoft, talks about planning for change on page 89, as it’s certainly going to be a factor in the coming year. Jim Clapp, president and CEO of Starkey Mortgage, reminds us that “People, Process, Product and Price Drive Growth in a Changing Market” in his article on page 96. I certainly hope you had the opportunity to come out and spend some time with us at one of our Holiday Networking Parties. If you did, I’m sure I must have mentioned to you that it has been a pleasure to serve you again this year. We wish you and your family the very best of the holiday season and a happy, healthy, prosperous and safe New Year to you all. We will be back here next month to begin coverage of what is likely to be a very interesting year, which under the new Trump Administration, has the potential to be much better for our industry. Stay tuned. Sincerely,

Joel M. Berman, Publisher-CEO Mortgage News Network Inc. Joel@NMPMediaCorp.com

3% Down Mortgages Qualify more ﬁrst-time homebuyers with Freddie Mac Home Possible mortgages

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Learn more at FreddieMac.com/LoanOfﬁcers

n National Mortgage Professional Magazine n DECEMBER 2016

Flexible sources of funds for a down payment, including gifts and grants

NationalMortgageProfessional.com

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

NAMB 2016-2017 BOARD OF DIRECTORS O F F I C E R S

Fred Kreger, CMC President American Family Funding 28368 Constellation Road, Suite 398 Santa Clarita, CA 91350 Phone: (661) 505-4311 E-mail: Fred.Kreger@APMortgage.com

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

Valerie Saunders, CRMS Vice President RE Financial Services 13033 West Lindburgh Avenue Tampa, FL 33626 Phone: (866) 992-0785 E-mail: Valsaun@gmail.com

Olga Kucerak, CRMS Secretary Crown Lending 110 Broadway, Suite 360 San Antonio, TX 78205 Phone: (210) 828-3384 E-mail: Olga@CrownLending.com

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

Donald J. Frommeyer, CRMS NAMB CEO Marine Bank 200 Medical Drive, Suite C-2A Carmel, IN 46032 Phone: (317) 575-4355 E-mail: Donald.Frommeyer@gmail.com

Rocke Andrews, CMC, CRMS Immediate Past President Lending Arizona LLC 3531 North Pantano Road Tucson, AZ 85750 Phone: (520) 886-7283 E-mail: RAndrews@LendingArizona.net

D I R E C T O R S

Mike Anderson, CRMS Mortgage Financial Services 11940 Bricksome Avenue, Suite B Baton Rouge, LA 70816 Phone: (225) 293-6855 E-mail: MAnderson@MFSUS.com

Rick Bettencourt, CRMS Mortgage Network 300 Rosewood Drive Danvers, MA 01923 Phone: (978) 777-7500 E-mail: RBettencourt@MortgageNetwork.com

Robert Sweeney, CRMS 600 East Carmel Drive Carmel, IN 46032 Phone: (317) 625-3287 E-mail: Bob.Sweeney46@yahoo.com

Chris Bettis 4710 Village Plaza LP, Suite 140 Eugene, OR 97401 Phone: (541) 284-8098 E-mail: Chris@PrecisionCapital.net

Michele Velez, CMC Supreme Lending 1300 South El Camino Real, Suite 505 San Mateo, CA 94402 Phone: (925) 348-5086 E-mail: Michelle.Velez@SupremeLending.com

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

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

Kimber White RE Financial Services Inc. 1620 West Oakland Park Boulevard #201 Oakland Park, FL 33311 Phone: (954) 306-3553 E-mail: 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: napmw1napmw.org l Web site: napmw.org

2016-2017 NAPMW NATIONAL BOARD OF DIRECTORS

DECEMBER 2016 n National Mortgage Professional Magazine n

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

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

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

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

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

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

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

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

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

ARMCP Begins Rounding Out Steering Committee he Association of Residential Mortgage Compliance Professionals (ARMCP), a not-for-profit, professional organization devoted to residential mortgage compliance professionals, has added another member to its seven-member Steering Committee. ARMCP is in need of two additional residential mortgage compliance and/or regulatory compliance professionals to join President and Founder Jonathan Foxx on the Steering Committee. “This is a leadership position,” said Foxx. “We ask that you be a member who is actually involved in residential mortgage compliance or provide regulatory compliance guidance to such persons.” The purpose of ARMCP’s Steering Committee is to: Draft and review the association’s by-laws; determine a nominating process for officers; discuss the association’s first conference; decide on subcommittees and the process for appointing committee chairs; set forth a Mission Statement; and other business relating to the association’s mission. Interested parties may contact ARMCP at Info@ARMCP.org.

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n National Mortgage Professional Magazine n DECEMBER 2016

www.DocMagic.com

1.800.649.1362

How High Can Non-Agency Lending Fly in 2017 and Beyond? By Tom Hutchens

ne hundred billion dollars–this is the total loan volume the non-agency mortgage market could reach in the near future, according to many experts in the space. When this will happen is still unclear, but tailwinds driving supply and demand for these products continue to encourage non-agency loan growth. Non-agency loans today are a far cry from the relics that led to the 2008 financial crisis. Today, the average FICO score of a non-agency loan is 680, up from 580 in 2006. Nonagency loans also require a 10 to 20 percent downpayment in 2016, as opposed to the loans provided without any required downpayment a decade ago. For more info on this, check out our recently published White Paper, “A Closer Look at the New World of Non-Prime” at http://SignUp.NMPMag.com/NonPrime. As you can see in the chart below, rising mortgage rates will cause purchases to grow as a portion of total originations. With refinances disappearing, lenders will turn to non-agency loans to replace that volume. The potential for continued non-agency market expansion is sky high. While the $100 billion figure may not be reached next year, we expect 2017 to see significant growth in the non-agency arena as demand for and awareness of these products grows.

DECEMBER 2016 n National Mortgage Professional Magazine n

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Tom Hutchens is senior vice president of sales and marketing at Angel Oak Mortgage Solutions, an Atlanta-based wholesale lender currently licensed in 33 states. 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

the

elite performer Be a Teacher, Not a Salesman BY ANDY W. HARRIS, CRMS

f you haven’t realized it yet, most people don’t like to be sold or “uncomfortably influenced” into making important financial decisions. For those of us in mortgage and real estate, we don’t want to get caught up in selling someone into taking on debt. Instead, we want to educate and “comfortably influence” our clients in making the wisest financial decisions when ready to buy. Understanding this can be a goldmine in marketing as an expert and teacher to others. Your behavior as an educator relays the best intentions to those seeking your services and your motivation for what you do. Most are not aware of how they may come across to potential clients when communicating. It is vitally important that you seek out colleague and client feedback to have perspective on the experience consumer’s face when interacting with you. It is easy to become blind or immune to your own actions over time or if your responses could use some improvement. Spend time listening to others on the phone and in meetings. Do they sound like an Internet call center trying to make a deal, or a legitimate professional seeking to educated and support the best interests of their clients? Make sure not to assume the consumer already knows something that they may not. This is a common mistake by many professionals who are immersed in day-to-day business activities. Be cautious on terms used without explanation, not taking time around details, and listening more than you talk. The more you understand the client’s needs, the better prepared you will be to teach them the best course of action. When you teach them the best course of action, that course usually involves you as the driver. Teaching can be done at or before meeting a potential applicant. You can simply embrace teaching as a primary form of marketing through articles, blogging, in marketing messages, your Web site, etc. Consumers are attracted to professionals who educate them rather than selling them. It’s a feeling of ‘wanting’ the business, versus ‘needing’ the business. I personally believe the lower the production, the higher the emotions and desperation to sell versus educate. Get more production through education and grow your business in 2017 and beyond.

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.

NationalMortgageProfessional.com

n National Mortgage Professional Magazine n DECEMBER 2016

Recruiting, Training and Mentoring Corner

Recruiting? It’s Your Sphere BY DAVE HERSHMAN

ates are up. While loan officers who were totally focused on refinances get out on the street for the first time in years, managers will be contemplating recruiting more loan officers, so that they can keep up the same company or branch volume in what may be a lower volume year. Those managers will hire recruiters, cold call and/or advertise to bring in loan officer candidates. And for 30 years, I have been counseling that there is a better way. But if you don’t believe me, then read this excerpt:

R DECEMBER 2016 n National Mortgage Professional Magazine n

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Per a 2016 Loan Officer Recruitment and Retention Study of high-producing loan officers by Floify LLC, 43 percent found their employers through a colleague who referred them to the company. A quarter of the originators were recruited by their new employers, while 15 percent worked for a company that was involved in a merger. Only eight percent reached out to the new employer on their own initiative. The way I have read the study, which was released as a white paper, is that only 25 percent of loan officers are recruited by the methods that most turn to when looking to expand their staffs. What is the better way? What I teach loan officers and managers is to open their eyes so that they will see the many opportunities around them … and these opportunities are

going to be a part of their sphere. Where in their sphere? Well, the study gives a great lead in that regard. If 43 percent were recommended by a colleague, then the greatest opportunity a manager can take advantage of is their present employees— includes loan officers and operations personnel. Many of your employees have been in the business for years. That means they know a great number of people still employed in this industry, including loan officers. Thus, I would focus upon these relationships. Many also many know those who want to get in the industry. The next question is—how to you take advantage of these relationships? The most traditional method is to offer an incentive for the employee to help recruit. And while this is certainly a great idea, it is not typically enough to get the employees engaged enough in recruiting. To get a higher level of engagement, you need to add additional levels of involvement. Ideas might include: l Bringing up the topic on a regular basis. For example, in your last sales meeting did you bring up the topic of recruiting? Did you ask for your loan officers help and let them know how important their help is in this regard? You need to do this not once—but on a regular basis. l Distribute recruitment materials and give them guidance regarding what to

“What I teach loan officers and managers is to open their eyes so that they will see the many opportunities around them … and these opportunities are going to be a part of their sphere.” say to those they know. l To go even further, meet with your employees and have them list those they know well who of a high quality. Would they be willing to make an e-mail introduction and/or set up a lunch? Promise your employee that you will not be calling to harass their contacts, but just to network—which is another strategy we will cover at another time. There are other ways to get employees involved, from holding contests to having a formal mentor program in which they can participate. But I think you get the idea. I don’t understand why someone would put an

advertisement somewhere before they exhaust all possibilities through there sphere. And don’t get the impression that your employees are the only part of your sphere which can bear fruit. I hope to get to some of these in future columns as well. Yes, I have been training the industry on recruiting and leading for decades, and have written a book for the MBA on the topic. We even have included this topic in our online mortgage school. But if you won’t believe me, hopefully you will believe the hard data which proves the point every time.

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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YOUNITED MEANS WHAT WE CAN SAY, YOU CAN SAY

newtomarket United Wholesale Mortgage Removes Escrow Waiver Fees and Launches New Tech to Enable Automated Income Verification

DECEMBER 2016 n National Mortgage Professional Magazine n

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United Wholesale Mortgage (UWM) has announced that the removal of its 0.25 percent escrow waiver fee nationwide for all conforming conventional loans. The change is designed to give mortgage brokers nationwide a competitive edge over large banks and mega retail lenders that typically charge 0.25 percent of the loan amount to allow a consumer to manage their yearly tax and insurance payments. As a result, borrowers can potentially save thousands of dollars at closing on fees and an initial escrow deposit. UWM is the only lender that has eliminated this fee nationwide. “This change is a major win for our mortgage brokers and their borrowers,” said Mat Ishbia, president and chief executive officer of UWM. “Removing the 0.25 percent adjustment will allow borrowers to keep more money in their pockets and the flexibility to pay their own taxes and insurance yearly.” UWM will allow borrowers to waive escrow on all conventional loans up to 90 percent LTV. For LTVs exceeding 80 percent, borrowers will be required to have a 720-plus FICO score. “Having no charge for an escrow waiver is huge for my borrowers,” said Tim Ayers, a loan officer at Grandview Lending in Indianapolis. “It lowers the amount of cash my borrowers need at closing,

gives them potentially a better interest rate and lets me outshine the big banks that have a 0.25 percent charge for waiving escrows.” UWM has also introduced new technology that enables mortgage brokers to receive automated income verification for borrowers and allows them to avoid the hassle of obtaining hard copies of W-2 forms, 30day paystubs and other documents needed for loan approval. “Our new automated income verification tool makes the loan process easier and faster for borrowers, more efficient for mortgage brokers, and more accurate for our team at UWM,” said Ishbia, president and CEO of UWM. “The verification process will save time and make the loan submission process even smoother.” UWM’s automated income verification tool enables borrowers and brokers to “go doc-less” as they navigate the loan process, allowing brokers to submit applications without waiting for supporting income documents from borrowers. The tool applies to all of UWM’s conventional products and is available for purchases and refinances. Currently applicable solely to W-2 borrowers, future phases of automated income verification will be made available to many self-employed borrowers. “UWM has done a lot to speed up my workflow, but this e-sign and submit process is truly revolutionary,” said Gloria Murillo, a processing manager at Sindeo Inc., a San Franciscobased mortgage broker. “What

used to take days, I can now get done in minutes.” Caliber’s Ultimate Homebuying Experience Targets Less-Than-10 Day Closings

Caliber Home Loans Inc. has announced the launch of the Caliber Ultimate Homebuying Experience, a streamlined application, approval and closing experience for conventional, government and Caliber portfolio loans. Starting immediately, clients and customers can enjoy a more personalized and efficient process for buying a home. Caliber created the Ultimate Homebuying Experience to simplify the mortgage process and to reduce stress for Caliber’s clients and customers by combining technological advancements with personalized assistance from Caliber’s LOs and AEs. The benefits of the Caliber Ultimate Homebuying Experience include: l A full application process that takes only minutes; l An electronic verification for some of the most important parts of a mortgage application, including income, assets and employment, which reduces the need for applicants to bring in physical documents; l An approval and closing that can take less than 10 days on eligible mortgages, which traditionally takes more than 30 days; and l Personalized assistance from

Caliber’s LOs and AEs to guide borrowers through the Ultimate Homebuying Experience process. “We place the consumer experience at the center of all the products and services we offer, and this program underscores that commitment,” said Sanjiv Das, chief executive officer of Caliber Home Loans. “The Caliber Ultimate Homebuying Experience will make mortgage applications, approvals and closings easier and faster and does not impact our robust underwriting guidelines. With our high-touch business model, we think it’s the best of all worlds. We are thrilled to launch this program and look forward to enhancing the homebuying experience for our clients.” New Global DMS Solution Helps Automates Appraisal Compliance

Global DMS has announced that it has launched Global Delivery, an alternative to the traditional way appraisal documents are prepared, packaged and compliantly provided to borrowers by way of printed appraisals sent via U.S. mail. The result is the near removal of human involved tasks, operational disruption, a reduction of costs and a more efficient process for mailing appraisals. “What Global Delivery accomplishes is applying the greatest level of automation possible to alleviate an elderly task of yesteryear,” said Vladimir BienAime, president and chief executive officer of Global DMS. “There is still consumer demand in residential mortgage valuations to receive the fully-packaged appraisal via the U.S. Postal Service, and of course, to receive it in full CFPB compliance. Global Delivery is a

MCT Announces New Enhancements

Mortgage Capital Trading Inc. (MCT), developer of MCTlive!, has announced that it has added a number of new features to its best execution service offering. The enhancements outpace existing competitor offerings and position MCT to capture additional business among lenders. â&#x20AC;&#x153;We already enjoy a great deal

of ongoing success with our existing best execution model, but the new features we developed in collaboration with our new MSR Services business unit significantly widens opportunity for MCT,â&#x20AC;? said Curtis Richins, president of MCT. â&#x20AC;&#x153;Unlike most hedge advisory firms, MCT has always focused on maximizing loan sales value through a robust best execution analysis that considers a wide range of execution options, such as mandatory, AOT, bulk, agency, co-issue, etc. Our deep secondary marketing expertise

and long-standing focus in this area really gives us a strong advantage that outpaces the competition and takes best execution analysis to the next level.â&#x20AC;? The enhanced tool is an extension of MCTâ&#x20AC;&#x2122;s existing best execution methodology, which is traditionally offered with its proprietary hedging services. The option to leverage the new feature set is ideal for lender clients that are interested in deepening their retain/release continued on page 25

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perfect blend of technology and service that automates the manual and cumbersome process of printing, folding and mailing appraisals to borrowers.â&#x20AC;? The Consumer Financial Protection Bureau (CFPB) issued its Disclosure and Delivery Requirements for Copies of Appraisals and Other Written Valuations under the Equal Credit Opportunity Act (Regulation B) rule, sometimes called the ECOA Valuations Rule. The copies of valuations may be delivered to the borrower either on paper or electronically. Many solutions handle electronic delivery of appraisals; however, unlike Global Delivery, they have not sufficiently addressed the hardcopy delivery of appraisals or other valuations to the borrower via mail. Global DMS says that having staff spend time on non-revenue producing activities, like packaging and mailing documents, is expensive and can be extremely disruptive. As an example, a staff member can easily spend more than 22 hours a month just managing a meager 250 plus files per month, equating to about 14 percent of their time manually addressing the ECOA Regulation B requirement. The greater the loan volume, the worse the problem becomes. Global Delivery can process appraisal documents and merge a pre-programmed, lender-branded cover letter that then delivers the hard copy to the borrowerâ&#x20AC;&#x2122;s doorstep. Global Delivery automatically ships appraisals to lendersâ&#x20AC;&#x2122; borrowers with one simple click, with no printing, folding and stamps involved for the lender. Using Global DMSâ&#x20AC;&#x2122; eTrac Enterprise platform, users simply click and are done. The mailing automatically goes out the next business day, with mailing verification permanently logged in eTrac. This ensures compliance with ECOA and provides the detailed logs in the event of an audit. Key features of Global Delivery include: Fully automated appraisal delivery to borrower; customized cover letter with company logo; files are mailed within 24 hours; delivered documents are imaged and permanently stored; API for easy integration with external systems; and predictable costs. In addition to accompanying its eTrac platform, Global Delivery is also available as a stand-alone solution for users that already have an existing platform for appraisal fulfillment.

NEWSFLASH y DECEMBER 2016 y NMP NEWSFLASH y DECEMBER 2016 y NMP NEWSFLASH y DECEM

DocMagic’s Total eClose Enables First Completely Paperless Digital Closing

DECEMBER 2016 n National Mortgage Professional Magazine n

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DocMagic Inc. has announced that it has successfully completed the mortgage industry’s first comprehensive eClosing in Massachusetts, which included both lender and closing/settlement agent documentation, for radius financial group inc. Unlike other eClosing technologies, DocMagic’s Total eClose solution is a single-source platform that contains all of the components needed to facilitate a completely paperless digital closing. Paramount to achieving the end-to-end eClosing was eNotarization services provided by strategic partner World Wide Notary (WWN). Once the eClosing process begins, documents requiring notary acknowledgment are automatically grouped by the system and electronically executed in the presence of the notary. “There are a few mortgage technology vendors that have been working to deliver an eClosing for some time now, but they have all fallen short in various ways,” said Dominic Iannitti, president and chief executive officer of DocMagic. “Most of these solutions are merely hybrids that require certain documents to be executed on paper and often force lenders to maintain numerous complex integrations.

With Total eClose, however, you work with a single vendor, on a single platform, and clients need only access DocMagic or the company’s SmartCLOSE system to seamlessly and compliantly fulfill a paperless closing.” DocMagic’s solution includes all of the critical components required to execute a fully digital eClosing transaction: Its eDocument library that features eSignature, eNotary and MERS eRegistration capabilities, and the system automatically stores all data and documents within a secure eVault designed to make investor eDelivery simple. The platform creates a fullycompliant eClosing process that guides users through every step, logs all activities and creates an irrefutable audit trail. Also key to DocMagic enabling radius’ first eClosing was the participation of Santander Bank, which served as the eWarehouse lender. “In addition to having integrated eNotary capability, one of the last remaining obstacles to adoption has been the reluctance of warehouse players to fund eNotes,” said Tim Anderson, director of eServices at DocMagic. “We helped test and implement an eWarehouse process to eDeliver acceptance of the eNote to Santander Bank within seconds after the eClosing was completed. This is an industryaltering achievement.” DocMagic maintains detailed

evidence of TRID compliance from the original loan application and Loan Estimate (LE), to delivery of the final Closing Disclosure (CD) with data, compliance determinations, calculations and documents, all stored within DocMagic’s eVault for proof of compliance. DocMagic’s integration with WWN is an exclusive partnership for eNotarizations. Founded in 2003 and based in Vernon, Texas, WWN is the developer of DigaSign, a proven solution that enables efficient, electronic notarizations. Trump Officially Taps Carson as HUD Head

After weeks of speculation, President-Elect Donald Trump has chosen retired neurosurgeon Dr. Ben Carson to take over as head of the U.S. Department of Housing & Urban Development (HUD). Dr. Carson, an early campaign rival of Trump, initially stated he was not certain he would fit into a Cabinet position in the Trump Administration and delayed making an official commitment after the president-elect sent out a message via Twitter on Nov. 22 that he wanted Dr. Carson to run HUD. But Dr. Carson was

swayed by the President-Elect after a series of interviews as Trump’s Administration begins to take shape. “Ben Carson has a brilliant mind and is passionate about strengthening communities and families within those communities,” Trump said in a statement. “We have talked at length about my urban renewal agenda and our message of economic revival, very much including our inner cities. Ben shares my optimism about the future of our country and is part of ensuring that this is a presidency representing all Americans. He is a tough competitor and never gives up.” Dr. Carson issued a statement that said, “I feel that I can make a significant contribution particularly by strengthening communities that are most in need. We have much work to do in enhancing every aspect of our nation and ensuring that our nation’s housing needs are met.” Fred Kreger, CMC, president of NAMB-The Association of Mortgage Professionals, said, “We look forward to watching Dr. Carson operate at HUD and look forward to working with him.” During the Republican primaries, Dr. Carson touched upon housing-related matters by calling for the privatization of the government-sponsored enterprises (GSEs) and the elimination of the home mortgage interest deduction. One of the bullet points of Carson’s plan stated: “Eliminate deductions for home mortgage

community development experience that the nation’s many aspiring homeowners and struggling renters desperately need,” said Sarah Edelman, director of housing policy. “Dr. Carson is a nominee whose top aide recently acknowledged that ‘Dr. Carson feels he has no government experience, he’s never run a federal agency. The last thing he would want to do was take a position that could cripple the presidency.’ American communities cannot afford to wait for him to get up to speed. In addition to a lack of knowledge in the areas of housing and

community development, his stated opposition to fully enforcing the Fair Housing Act— landmark civil rights legislation that promotes equality within U.S. communities—is a particularly troubling sign.” And House Minority Leader Rep. Nancy Pelosi (D-CA) issued her own criticism of the choice. “Dr. Ben Carson is a disconcerting and disturbingly unqualified choice to lead a department as complex and consequential as Housing and Urban Development,” she said in a press statement. “Our country deserves a HUD Secretary with

the relevant experience to protect the rights of homeowners and renters, particularly in low income and minority communities, and to ensure that everyone in our country can have access to safe and affordable housing without facing discrimination or homelessness. There is no evidence that Dr. Carson brings the necessary credentials to hold a position with such immense responsibilities and impact on families and communities across America.” continued on page 16

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interest, charitable giving and state and local taxes. The overwhelming majority of Americans do not benefit from these itemized deductions.” He also criticized the Obama Administration’s approach to running HUD as an exercise in “social engineering.” David H. Stevens, CMB, president and CEO of the Mortgage Bankers Association (MBA), greeted the nomination. “On behalf of the MBA, I want to congratulate Dr. Ben Carson on being chosen to be nominated as the Secretary of HUD,” said Stevens in a statement. “Housing is one of the largest contributors to the health and success of the overall economy, and as such we must continue to recognize its significance. MBA looks forward to working with Dr. Carson in helping to build out a well-rounded team of housing experts, with a deep technical understanding of the issues, at HUD, FHA and Ginnie Mae. MBA wishes Dr. Carson and the rest of the administration success as they get ready to embark upon these next four years.” Ed Brady, chairman of the National Association of Home Builders (NAHB), also welcomed the nomination. “NAHB congratulates Dr. Carson on his nomination as HUD secretary. He is a thoughtful leader who is sure to assemble a professional team of policy experts and be a great spokesperson for housing,” he said in a statement. “Upon his confirmation to the Cabinet post, NAHB looks forward to working with Dr. Carson to promote pro-housing policies that support homeownership, provide rental housing opportunities for low- and middle-income households, and remove regulatory barriers that are needlessly raising housing costs for hard-working American families.” National Association of Realtors President William E. Brown commented that Dr. Carson “has a big job ahead,” adding that the trade group congratulated Dr. Carson “on accepting this important challenge and wish him the very best of luck in meeting the task ahead.” However, the left-leaning think tank Center for American Progress issued a blistering denunciation of the nomination of Dr. Carson. “Dr. Ben Carson does not have the necessary and relevant housing or

co ia rn l er

co the m m er c

Three ways to prepare for small-balance success

By Michael Boggiano

1. Educate yourself The small-balance commercial mortgage marketplace features a wide range of lender types, including banks, agencies, SBA options, marketplace lenders, life companies and non-bank lenders. Take the time to learn as much as you can about each type–who they lend to, what kind of rates they offer, how long it takes them to transact, etc. As you look to identify the best lender for your clients’ deals, you can save time by already knowing which options make sense and which aren’t worth pursuing.

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Planning for Commercial in 2017?

fter setting performance records in 2015, the small-balance commercial mortgage market has remained strong throughout this past year. Originators are finding that they can diversify their business and find success with commercial deals that closely resemble residential transactions. As we enter 2017, brokers across the country are developing strategies to incorporate smallbalance commercial into their product offering. The problem? Many don’t know where to start. If you want to grow your business with small-balance commercial mortgages in 2017, take the following three steps now and get a head start on your competition.

nmp news flash

2. Optimize your marketing efforts A few tweaks to your messaging now can make a big difference as you market yourself in 2017. Mention your ability to close small-balance commercial loans in your social media profiles, and add “commercial mortgages” to your e-mail signature. Your next step should be to join commercial mortgage groups on LinkedIn. These groups are a great source of both educational material and potential business opportunities. You can also save time by taking advantage of the marketing tools some lenders provide. These resources can include e-mail and phone scripts, messaging strategies and even unbranded collateral. 3. Start with the opportunities around you Even if you’ve never closed a small-balance commercial loan before, you probably have potential business opportunities within your existing database. Check the real estate-owned (REO) section of your clients’ 1003 residential loan applications to find those who own commercial property. You can also search your database for borrowers who own small businesses and those who fit the entrepreneurial mold. These types of clients are likely candidates for small commercial real estate transactions. With the New Year right around the corner, now is the time to start preparing your business for small-balance commercial mortgages. Take these three steps to position yourself for success in 2017.

PRMI Partners With Feeding America to Stamp Out Hunger

Primary Residential Mortgage Inc. (PRMI) has partnered with Feeding America during its annual Hunger Action Month campaign to raise more than $150,000 in just eight weeks. The donations collected will help provide more than 1.67 million meals to children, families and seniors across the nation. Feeding America’s mission is to feed the hungry through a nationwide network of member food banks and engage the nation in the fight to end hunger. Because of its network and partnerships, Feeding America is able to secure 11 meals for every dollar donated. “I am so grateful to our community and team members who came together to make this campaign a success,” said David Zitting, president and CEO of PRMI. “We wanted a way to bring our company closer to the community and have the chance to make a difference. Feeding America has been the perfect partner for us.” PRMI employees across the country came together and raised a total of $152,052 to support Feeding America, the largest hunger-relief organization in the country serving food-insecure communities in all 50 states. “Primary Residential Mortgage has fully embraced the need for a strong, united hunger-relief effort in order to feed the individuals and families struggling with hunger in the United States,” said Nancy Curby, interim senior vice president of development at Feeding America. “We’re grateful to have their support and know that the meals they’ve raised will provide hope for thousands of people.”

FHA Raises Loan Limits for 2017

MBA Opens Doors Foundation Reaches $1.5 Million Campaign Goal

Michael Boggiano is national sales manager for Silver Hill Funding, a small-balance commercial mortgage lender offering nationwide financing from $250,000 to $1 million. He may be reached by phone at (888) 988-8843 or e-mail MikeB@SilverHillFunding.com.

SPONSORED EDITORIAL

2016-2017 fundraising campaign goal of $1.5 million during its recent Annual Convention in Boston. MBA Opens Doors is a non-profit organization dedicated to providing assistance to families with a critically-ill or injured child by making their mortgage or rent payments. MBA Opens Doors currently works directly with nine children’s hospitals to identify families in need. MBA also announced that it would be participating in Giving Tuesday, a global day of giving for communities around the world, this Nov. 29. “Providing individuals and families with safe, sound and affordable homes fuels our desire to go to work every day. And we all know a home is so much more than just a place to live. It is a source of emotional comfort; it’s security; it is a place where memories are made; and we’ve all known the joy of coming home,” said Debra W. Still, CMB, Opens Doors Foundation chairman, and CEO of Pulte Mortgage. “Opens Doors has provided critical relief for families who are balancing medical expenses, job loss and other financial demands while sitting beside their child’s hospital bed. We have distributed almost one million dollars in housing payments to more than 660 families in 20 states. None of this would have been possible without the support of MBA members, and in particular those who gave so generously.” MBA Opens Doors donors also fielded 15 runners in the 2016 TCS New York City Marathon, raising more than $63,000 or 126 percent of their original goal.

The Mortgage Bankers Association Opens Doors Foundation (MBA Opens Doors) has announced it reached its

The Federal Housing Administration (FHA) has announced 2017 increases for forward mortgage limits and home equity conversion mortgages (HECMs). “Because of the change to the national median home price this continued on page 24

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N A M B

P E R S P E C T I V E

The next function was our Legislative & Regulatory Conference in Washington, D.C. This event again was very well-attended and the conference was led by great speakers and great sessions. The highlight of this event, besides being able to go to our congressmen and senators was the PAC event on the roof of the hotel. This event was one of the most successful PAC events we have had in years. At NAMB National in Las Vegas, NAMB was again greeted by Defining Gratitude in 2017 3,000 attendees and an exhibit hall that was full to capacity. It is hard Experiencing the holiday season, one ought to to believe that NAMB has continued to grow by leaps and bounds, search for things in their life that shows and gives and its conferences continue to grow with attendees and great Gratitude. That word evokes so many things for information that becomes available to all those who attend the event. me and I hope it does for you. I have used this word over so many The speakers and information that is readily available to everyone years as service to my state and now NAMB, for mortgage loan provides more information on how to do your job better and to make originators. you a better originator. The exhibitors have gone far outside of the norm to make this event spectacular, and a total success for What are you thankful for and how can you show gratitude? everyone. This is a long way ahead of where we were in 2011 when My message of “gratitude” and what it means to be part of something we had 200-plus attendees. In 2017, NAMB moves this conference to greater with the responsibility that all of us have to give back to our The Rio in Vegas where we will have almost twice as much room for industry. I have spoken to about William Buckley’s book Gratitude the exhibitors. You will not want to miss this event. over the last couple years. Buckley suggests that citizens of the NAMB also came forward with a new program to help new brokers United States ought to feel a debt of gratitude toward their country. A get into the business. NAMB KickStart is a program that offers up to debt that can best be repaid by volunteer service of a charitable sort. $10,000 to launch a new broker company and the ability to open up Given this powerful word, I challenge now each one of you to show and get started. It’s a fresh start for all of those who have been gratitude to someone or something that you truly have passion. This thinking about opening up their own company, but need a little help is a perfect time of the year to show this and make some to get started. If you are thinking about starting a broker company introspective thoughts. yourself, you can find all of the information at NAMBKickStart.com Not just a time to show gratitude, but look at how our next year will and complete the application. look though business and our association planning. It’s one thing to The year 2017 looks a lot better for you as members of NAMB. The think about what 2017 will look like, but to actually put pen to paper board continues to push for great changes to make these and establish your vision of how your business will thrive and grow conferences member-friendly and originator-friendly that makes your this next coming year. time attending responsive and informative. Many of these changes For all of you NAMB and State Affiliate members … how will we are attributed to Valerie Saunders, your current vice president and grow membership and provide more services for today’s mortgage Conference Committee chair. Valerie works tirelessly each and every loan originators and industry partners? We all have to look at stake day to make sure that when you attend, your get the most out of your holders in our industry. NAMB has reached out to all industry experience. And she is always thinking of different ways to help you, professionals … loan originators, lenders, appraisers, escrow, legal the member, get the most out of your attendance. and title servicers. If we (NAMB) and state associations are going use So as we look forward to next year, I cannot wait to see what other the word “Mortgage Professionals” in our names and mission, then great things she can come up with. we need to incorporate ALL professionals. I hope you all take out some time now and write out and then take Donald J. Frommeyer, CRMS is chief executive officer for action on how you can show some form of gratitude towards your NAMB—The Association of Mortgage Professional. He family, friends, co-workers and the industry. I am thankful for all of may be reached by e-mail at NAMB.CEO@NAMB.org. you for taking the time to reach out and intentionally show your gratitude. Thank you and Namaste.

NAMB President’s Message: December 2016

DECEMBER 2016 n National Mortgage Professional Magazine n

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Fred Kreger, CMC, 2016-2017 President NAMB—The Association of Mortgage Professionals Fred.Kreger@APMortgage.com • JOINNAMB.com

The CEO Perspective A Message From NAMB CEO Donald J. Frommeyer As we look to the coming year, it is time to reflect on the past 12 months. NAMB has come a long way in the last year and this column will be used to reflect on a few of the great things we have done. The year 2016 for NAMB meant kicking off a new nationwide conference called NAMB East in Hilton Head, S.C. It was the first time we have tried to add a conference in the East in more than a decade, and everything turned out to be very positive. We had a full exhibitor space and the turnout of attendees was fantastic. It was so good that we decided to do another on in 2017, but this time in Atlanta. We are going to the Atlanta Hilton at the CNN Center with great presentations by the CFPB, the Secret Service, speakers and a great exhibit hall along with a great luncheon, and parties to enjoy St. Patrick’s Day.

NAMB’s KickStart Program By Rocke Andrews, CMC, CRMS

NAMB’s KickStart Program was rolled out at NAMB National in Las Vegas this past September. After a couple months getting the committee in place and establishing procedures, the review of applications is at full pace. New applications will be acknowledged and reviewed within seven days. The selection committee will meet at least twice a month to make decisions on complete applications. All of the information can be found at NAMBKickStart.com. NAMB members looking to start a new mortgage broker company can apply for a grant of up to $10,000. The selection criteria consider: l A need for the funds; l A likelihood of success; and l A company that will represent the ideals of NAMB’S Code of Ethics. Qualifications include at least three years in the industry, a comprehensive business plan and at least two professional reference letters. Before funding, you will need to be licensed or approved to

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do business in your state and have set up the articles of organization as required by your state. There is a simple online application where you can input the basic information and upload the required documents. There is a start-up guide to help lead you through the process, as well as a course that will assist you in the writing of a business plan if necessary. NAMB will be adding materials to this area as we determine needs. Calyx has agreed to be our first sponsor of the program and we appreciate their support, as well as the other industry partners that are in progress towards becoming sponsors. If you have been thinking about opening your own business go to NAMB KickStart.com and get some help. If you need some financial assistance, that is there also. Join NAMB and our first Grant Partner, United Wholesale Mortgage (UWM), in growing small business and the third-party origination channel. 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.

Choosing How to Communicate By Nathan S. Pierce, CRMS

5. E-mail prolongs decisions and debate. I have often experienced the decision making process become far too complicated because of back-and-forth e-mail, intentions and interests become misunderstood easily online. E-mail and text are two of the greatest productivity contributors of the past two decades. Yet we have to recognize that these digital channels have limitations and should not be used to replace live conversation. The next time you find yourself needing to discuss and important issue, ask yourself if it is something that would be better served by a real conversation or would electronic communication be appropriate. Nathan S. Pierce, CRMS is the NAMB Communication chairman, a member of the NAMB board of directors, and NAMB+ President. He is a Certified Residential Mortgage Specialist and president of Advanced Funding Home Mortgage Loans in Salt Lake City, Utah. He may be reached by phone at (801) 272-0600 or e-mail NPierce@advfund.com.

The D.C. Forecast Headed Into a New Administration By Michelle Velez, CMC

2. Getting caught up in back-and-forth e-mails or texts can be unproductive and time consuming. We have all been caught up in email or text chains that should have been resolved after one or two rounds, but continue. If you find yourself caught in an endless string of emails or texts pick up the telephone and make a call. 3. It’s hard to communicate emotion in e-mail. The biggest drawback and danger with email is that the tone and context are easy to misread. In a live conversation, how one says something is as important as what they are saying. With e-mail, it is hard to get the feelings behind the words. 4. E-mail and text often promote reactive responses. While reactive responses occur in live discourse, they are usually more productive. E-mail and text are often used as digital shields to respond in ways that would not be used in live conversation.

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1. How does your client prefer to communicate? Don’t assume that everyone prefers receiving a text or email. Oftentimes, the preferred method is obvious and other times it is not, if it is not obvious take a moment to ask what the preferred method of contact is.

Whether you are happy about the outcome of the Presidential election or not, there are many changes in Washington, D.C. However, if you are a glass half-full kind of person, then there are several positive things to focus on under the new administration. Let’s talk about some areas of importance to mortgage originators and specially mortgage brokers. The White House and Treasury Secretary set the tone and agenda of what is important to our industry. This will come as a hard fight for President elect Donald Trump’s selectee, Steve Mnuchin to get past Sen. Liz Warren in the confirmation process. NAMB is looking for good things to come from Ben Carson, who was chosen to be new Secretary of the Department of Housing & Urban Development (HUD). This appears to be a positive move in a continued forward direction for the coming year. If you reflect back on the election, we see benefits for small community banks, regional lenders and mortgage broker companies alike. These financial distribution channels are closest to those voters that switched parties and voted for President-Elect Trump. The new administration will keep focus on what changes actually do benefit these voters. A good portion of mortgage brokers operate where brick and mortar lenders do not. It is more efficient to use independent mortgage originators in these areas. There has been a lot of chatter about the possibility of dismantling the Dodd-Frank Wall Street Reform and Consumer Protection Act. However, while our industry has been reeling from all the regulations that have been implemented, NAMB feels we should be able to enact positive change but we have no plans at this time to dismantle the law. Some of those changes that we would like to see would be the passing of HR 3393. This bill will remove the broker shop compensation from the three percent points and fees cap in a Qualified Mortgage (QM). This was also our focus under the last White House Administration. The changes NAMB will focus on are the parts of the Dodd-Frank Act that has hampered lending and increased the costs to operate and will have a serious cost benefit analysis applied to them. The impact to bank capital and Wall Street will also be pulled back as well. Former SEC Commissioner Paul Atkins was named the head of the transition team to decide what the new Director of the Consumer Finance Protection Bureau (CFPB) will need to focus on. He will

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In an age where communicating has become increasingly electronic it is not uncommon to hear stories of people being misunderstood or being unable to make themselves be understood. Understanding can be difficult when engaging face-to-face and can become even more complicated when using e-mail, text messaging, or various other digital platforms. In a mortgage transaction, the first step to simplifying the loan process is to understand the needs and expectations of the borrower(s) and for them to understand the process that is about to take place. The more that people understand each other, the more likely it is everyone will have a pleasant mortgage experience. The use of electronic communications can be a very useful tool in improving the mortgage loan experience. It is one that I use frequently, however, I am also guilty of using it when a phone call would have been more appropriate or in situations where the person being communicated to prefers a live call. When choosing a method of communication it is important to always remember certain things:

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coordinate with the Treasury Department and House and Senate Chairs to correct the major problems within the CFPB construct. As you may recall from the PHH case, one of the defects with the CFPB is that the Director was the most powerful of any other agency ever created. The court fixed that problem by permitting the President to remove the Director without cause. This is on appeal to the full Appellate court and then perhaps on to the Supreme Court. The appeal is likely to be pulled back by President-Elect Trump. We will see a correction of this flaw through Congress via legislation. Within 12 months, a new Director is likely to be running CFPB. NAMB predicts the new Director will slow all new regulations and start having staff focus on helping industry understand the regulations that are currently on the books. This could be in the form of No-Action letters similar to the IRS and other agencies. During the next two years, look for legislation creating a board configuration with a budget under Congressional control and perhaps placing the CFPB under the Treasury Department. A legislative requirement to have a cost benefit analysis will be required. This will certainly be a huge factor in decreasing the cost of originating a loan that has nearly doubled to more than $7,000. Another area that we may see a big fight is with Fannie Mae and Freddie and GSE reform. There are powerful and competing forces in what to do with these entities; Realtors, Homebuilders, lenders and mortgage brokers, consumer advocates and Wall Street. The big counter balance would be the legislators wanting to reduce risk to taxpayer bailouts. Finding the right balance between these interests will be extremely difficult. We predict the start of a debate but likely not able to complete legislation within the next Administration. Lastly, I would like to touch on Transitional Licensing, which is probably one of the hardest fights in our industry. On one hand, we all would like to on-board new loan originators as fast as possible. On the other, we at NAMB took the position that the consumer and our industry would be better served if all mortgage originators complete all licensing requirements before they operate in any state. This goes for loan originators operating state to state as well. The Transitional Licensing Bill that permitted a bank employee to shift to a lender and originate loans for 120 days stalled in the Senate after passing the House this year. The biggest concern that surfaced with Registered bank employees was the trend for banks to over-Register branch employees just in case they took a mortgage application. Our analysis on just a few banks showed that a large percentage of the Registered loan originators at a bank had never actually closed a loan. NAMB feels it would harm the mortgage broker profession if we did not try and stop this result. Overall, we see good things for mortgage industry in terms of regulatory burden. It is a year to see change. We hope you are all NAMB members and can participate in the upcoming 2017 NAMB Legislative Conference in Washington, D.C., we are going to need your help. The dates for this event are April 23-25, 2017. You should be seeing the link to register for this event shortly. Please plan to attend. There is power in numbers and your voice makes a difference. We need you on Lobby Day to talk to your elected officials. Michelle Velez, CMC of Supreme Lending in San Mateo, Calif. is a member of the NAMB board of directors. She may be reached by phone at (650) 409-5347 or e-mail Michelle.Velez@SupremeLending.com.

2017: A Year for Change By Mike Anderson, CRMS

There is no question that 2017 could be the greatest opportunity in NAMB’s 40-plus year history on getting some regulatory and rule changes to help our industry. We are extremely excited about the possibilities that lie ahead. Your Government Affairs team is working tirelessly on putting together an aggressive agenda for much needed change. That’s where NAMBPAC steps in to make sure we have ample PAC

funds to get our voices heard on the hill. It is so vitally important that we all contribute to the PAC, remember you must be a member of NAMB to do so. By now you should have received a letter outlining the amount of PAC we need to raise to accomplish our goals. Please take two minutes and donate today so that we may move forward and help you in your everyday endeavors on fulfilling the dream of homeownership. Mike Anderson, CRMS is 2016/2017 NAMBPAC/LAF Chair and a member of the NAMB board of directors. He may be reached by phone at (225) 293-6855 or e-mail MAnderson@MFSUS.com.

NAMB East: Atlanta in 2017 By Linda McCoy, CRMS

Now the holidays are almost completely over and we as originators are looking to see how we can increase our business for the coming year. We are trying to see where we need to invest our money to get the most bang for our bucks. I hope you are putting NAMB in your 2017 Budget and Business Plan. Spend your money on something fun and exciting that will help you build your business at the same time. NAMB EAST is set for March 16-18, 2017 in Atlanta at the Omni Atlanta Hotel in the CNN Center in Atlanta. NAMB will play host to one of the largest mortgage industry trade shows in the eastern United States! If you have never been to a trade show, this would be a great place to start. We have so many great lenders and vendors who will be spending their time there to help educate you on their programs and products to help you be more successful. Our Conference gets off to a real exciting opening evening at the College Football Hall of Fame. You will have the opportunity to tour the facility and see all there is to know about your favorite teams. We will have a great time with delicious food, drinks and powerful networking with mortgage professionals from all over the country. You can have fun playing your favorite casino games while helping to raise money for our Legislation Action Fund. This event alone is worth the trip. Friday morning, we will have Delegate Council. If you are from a state that no longer has an association and you would like to get involved, please contact me or any board member. We would love to have you participate. At lunch, we will have John King, CNN’s chief national correspondent and anchor of Inside Politics as our keynote speaker. This reporter has covered the Whitehouse for years and I know he will keep us on the edge of our seats. Our most treasured part of the Conference is when our 2017 NAMB East Exhibit Hall opens from 1:00 p.m.-6:00 p.m. This is where you find who you want to do business with that will help get you to the next level. You will spend your time networking with the professionals of our industry and making friends. As we close the Hall for the evening we open our St Patrick’s Day Party, sponsored by Caliber Home Loans, featuring the Trans Am Euro Mutts Band. You better wear green or will get pinched! This band will keep us going most of the night and I hear there just might be green beer. Saturday will be packed with NAMB committee meetings and originator-focused breakout sessions. In addition, as part of NAMB East, we are excited to have the CFPB Ombudsman’s Office as part of their “Ombudsman Interactive,” a series of three sessions targeted at senior level executives, small business owners and loan originators. You can attend as many as you would like before the Exhibit Hall Opens again at 1:00 p.m. and continues right up to the Trade Show giveaways at 5:00 p.m. Sign up now for NAMB East. It is going to be a blast! Linda McCoy, CRMS of Mortgage Team 1 Inc. in Mobile, Ala. is a member of the NAMB board of directors. She may be reached by phone at (251) 650-0805 or e-mail Linda@MortgageTeam1.com.

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NAMB Education Corner: Realtor Lunch & Learn–Master Endless Referrals By Bob Sweeney, CRMS

I was searching the Internet this past month to get some tips on organizing and conducting a Realtor Lunch & Learn that I will be hosting in the next few months, when I came upon a great article that I would like to share with you. The author is Tim Davis, national sales coach at Movement Mortgage. Tim’s article is as follows; Seven Ways Originators Can Organize a Monthly Lunch and Learn for Real Estate Agents. “Somewhere back many moons ago, I attended a conference where the speaker said one of the best ways to build your origination business was to speak at agents offices. This concept really peaked my interest. I immediately set off on a quest to speak at real estate offices and in turn build relationships with the agents that would lead to more referrals. My first event had three people...and two of them were my assistant and myself. But as John Maxwell says ... “Fail Forward Fast!” Over the years I have learned how to put together successful events since that first experience and I want to share what I have learned with you. 1. Host your event outside of agents offices. If you have a large enough space at your office, you can choose that as your location, but the next best location is your local board of Realtors office. They can usually be rented out for a few hundred dollars and they are also generally easy to access. Along with ample parking, most associations have current AV equipment as well.

4. Engage partners. I like to partner with local vendors to help with recruiting and cost. It becomes a win-win for everyone and lessens the burden on yourself. 5. Have awesome content. Having great content is critical. Listen and talk with local agents about what is of interest to them. I have personally found that video marketing, social media, and business planning are the top three most attended events. 6. Make it fun! If you event is not entertaining and educating then you will find a hard time to continue to get attendance. 7. Improve your presentation skills. One of the best skills I learned was how to be a dynamic presenter. It’s great to have other people speak at your event from time to time, but if you master speaking skills then you will see your personal influence grow. Lastly, follow up! If you host events and do not have a well thought out follow up plan, then you will miss out on the referrals. Getting them to show up is one part, turning them into great business relationships is another.

We welcome any input from all mortgage professionals. If you would be interested in joining the Education Committee and become part of our future success in the education of our independent mortgage companies and mortgage loan originators, please feel free to contact me. If you are not a NAMB member, now is a great time to become a member. Go to your state association website or NAMB.org and join as a professional member. I want to wish everyone a Happy Holiday Season and a Happy New Year Bob Sweeney, CRMS is a financial advisor at Meridian Mortgage Solutions, director for NAMB–The Association of Mortgage Professionals and serves as chairman of the NAMB Education Committee. He can be reached by phone at (317) 625-3287 or e-mail Bob.Sweeney46@yahoo.com.

Why Do I Need NAMB? www.namb.org … JOIN TODAY! l NAMB Testifies Before Congress l NAMB Works With the CFPB 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 www.namb.org.

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3. Create a name for your event. I use Third Thursday Agent Marketing Academy (you can’t use that name, but you can create your own) The reason I give my events a name other than lunch and learn is that a title takes the ordinary and makes it extraordinary. Also when you create a name for your event, you are now the “founder” of the event. You can even up the game by having your own logo designed for the title you create.

“Formal education will make you a living; self-education will make you a fortune,” by Jim Rohn.

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2. Choose a set day and time. I have found that picking the same day and time each month works best for several reasons. One it helps you manage your time. Two it helps people remember and three you can create it as a staple in your community.

Hosting monthly events is just one of many strategies I share with our loan officers during our coaching calls. It takes time and practice, but from personal experience it is still one of the best ways to grow your business. I started with three people and have since had events that had over 200 agents in attendance.” Conducting Realtor Lunch and Learns would be a great way to start off 2017. Let me know how it goes.

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year that increased the Federal Housing Finance Agency [FHFA] limits, FHA’s ‘floor’ and ‘ceiling’ loan limits will increase for calendar year 2017 to $275,665 and $636,1501, respectively, for a one-unit property,” the FHA announced in Mortgagee Letter 2016-20, adding that there are “no jurisdictions with a decrease in loan limits from the 2016 levels. “ In a separate Mortgagee Letter, the agency stated, “Because of the change to the national median home price this year that increased the FHFA limits, the maximum HECM claim amount has increased to $636,150 for calendar year 2017 for all areas.” Study Finds TRID Defects Down Slightly in Q2

ACES Risk Management (ARMCO),

a provider of financial quality control (QC) and compliance software, has released its ARMCO Mortgage QC Industry Trends report, covering the second quarter of 2016. After peaking in Q1 2016, the overall industry critical defect rate dropped to 1.63 percent in Q2, ending an upward trend spanning the previous three quarters. Defects in the Legal/Regulatory/Compliance category also waned in Q2, comprising 34 percent of all defects reported and marking the first decline in nine months. However, this category still represents the largest reported defect category. “While TRID-related defects are still driving the majority of legal/regulatory/compliance defects, we’re seeing a decline in defects in this category as a result of corrective action planning lenders undertook through the first six months of 2016,” said Phil McCall, chief operating officer of ARMCO. “As

lenders determine the most effective strategies for addressing TRID-related defects, we expect to see this category decline further.” Loan Package Documentation defects increased slightly in Q2, accounting for 26.7 percent of reported defects in Q2 versus 26.4 percent in Q1. Also of note is the increase in defects reported in creditdriven categories in Q2. Income/employment leads this group as the third most frequently reported defect category in Q2 at 9.8 percent, followed by borrower and mortgage eligibility at 8.9 percent and assets at 6.8 percent. “Given the magnitude of compliance-related defects lenders were facing in Q1, it’s not surprising to see upticks in other areas,” said Avi Naider, chief executive officer for ARMCO. “Now that lenders have begun to get a handle on their TRID-related defects, they should have more capacity to address those credit-related defects. Thus, we should see those categories normalize in Q3.”

CIS Director of Operations Angie Jenkins Honored by NCRA

Angie Jenkins, director of operations for CIS, has been awarded the prestigious National Consumer Reporting Association (NCRA) President’s Award. Jenkins was selected for her service and contributions to NCRA’s Education Committee, including the Consumer Education Subcommittee. While serving in these roles, she has been instrumental in developing curriculum for Fair Credit Reporting Act (FCRA) certification and training collateral for NCRA member companies. Jenkins recently led a project to produce a Credit 101 curriculum, a significant undertaking that required exceptional commitment to gathering information from various sources, organizing continued on page 36

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Free print subscription ($59 value). Go to Sub.NMPMag.com/nmp0511 The NMP Daily Email Newsletter is your source for breaking news, insights and tips. Get free access to full articles including the hottest industry headlines, featured articles and other mission critical stories isdelivered inbox each day.and tips. Get free Themortgage NMP Daily industry Email Newsletter your sourcetoforyour breaking news, insights access to full articles including the hottest industry headlines, featured articles and other mission critical mortgage industry stories delivered to your inbox each day.

The NMP Mortgage News Ticker is a daily news feed that gives you a snapshot of the hottest

news stories from around Stay most recent headlines and blogs, all Themortgage NMP Mortgage News Ticker is a daily news the feed web. that gives youinformed a snapshotof of the the hottest mortgage news stories fromconvenient around the web. Stayemail. informed of the most recent headlines and blogs, all compiled into one daily compiled into one convenient daily email. Your State Speciﬁc Digital Edition Your State Speciﬁc Digital Edition Want to stay informed on a moreon local contents of ourThe statecontents e-editions include of the content from include all of the content from Want to stay informed a level? moreThelocal level? of ourall state e-editions our national publication plus state-specific mortgage association information, including the President's Message, our highlights nationallocal publication plus state-specific mortgage association including the President's Message, which issues, such as regulatory and legislative matters, along with the state information, calendar of events. which highlights local issues, such as regulatory and legislative matters, along with the state calendar of events. Mortgage News Network (MNN) features regularly scheduled and special event video programming with industry experts sharing insights that impact your business today and in the future. MNN provides Mortgage News (MNN) features and special event video programming market forecasts, proven salesNetwork and marketing strategies, interviewsregularly with industryscheduled leaders and more.

with industry experts sharing insights that impact your business today and in the future. MNN provides market forecasts, proven sales and marketing strategies, interviews with industry leaders and more.

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new to market

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property, including a breakdown of buyer and seller fees. SmartCalc’s personalized Seller Net Sheet shows the title, settlement services, transfer tax, recording fees and commission associated with the closing process. “Title companies, lenders and Realtors are looking for new ways to add transparency to the home buying and selling process. They want to help their clients—both buyers and sellers—understand the costs associated with the

Indecomm Global Services has announced the rebranding of its

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NAMB+ is an independent, wholly-owned, for-proﬁt marketing subsidiary of NAMB, The Association of Mortgage Professionals. Dear Mortgage Professional, Happy Holidays! I hope that each of you has experienced a tremendous 2016, both personally and professionally, and that you are enjoying a wonderful holiday season with family and friends! I want to take this opportunity to extend a heartfelt THANK YOU to our dedicated Endorsed Providers and to the mortgage professionals who have supported these companies, and by extension our Association, over the past 12 months. NAMB+ was created to help NAMB enhance member beneﬁts and serve as a resource for mortgage professionals looking to grow and improve their businesses. As we look ahead to 2017, the NAMB+ Board of Directors is excited about the prospect of introducing new Endorsed Providers and continuing to improve the ways we communicate and connect with all of you. NAMB members receive a discount off Brokers Compliance Group compliance support programs.

ClosingCorp Introduces New Closing Cost Calculator NAMB members receive a 15% discount on all Custom Canvas Prints products and services!

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.

InfoSight, Inc. offers proven and affordable cyber security, risk management, IT Infrastructure and regulatory compliance solutions. Visit www.infosightinc.com or contact us at 305-828-1003 / 877-577-9703.

If you have recommendations for new Endorsed Providers or any questions at all about NAMB+, please take a few minutes and email me, or reach out to NAMB+ via your favorite social media platform. We really do want to hear from you! Have a very safe and happy holiday season, and a terriﬁc start to the New Year! 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.

NAMB members get a $300 discount on coaching. NAMB members receive exclusive discounts training events, including live seminars and internet-based web shops

MBS Highway provides daily guidance and insights from Mortgage Market expert Barry Habib who predicted the bottom of the Housing Market. Exclusive NAMB Members offer to try MBS Highway FREE for 30 days. Visit MBSHighway.com/registration/namb-plusregistration

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

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.

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.

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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ClosingCorp has announced the release of SmartCalc, the company’s next generation online, customizable closing costs calculator designed to help title companies become more efficient and deepen their relationships with lenders and real estate agents. SmartCalc enables title companies to provide, accurate, instant online quotes, including actual title and settlement rates and fees, transfer taxes and recording fees. Using SmartCalc, lenders will be able to access accurate settlement services information 24/7. In addition, real estate agents will now have a new tool to help them provide their sellers with the information they need to understand the potential proceeds from the sale of their

Indecomm Rebrands Income Analyzer as IncomeGenius

Web-based income analysis platform as “IncomeGenius.” The rebranding reflects significant advances in its breakthrough technology for electronically reading and analyzing borrower income documents, and calculating qualifying income associated with the mortgage loan. New features include an automatic income calculation as soon as the user logs into the system, an enhanced interface, and a new streamlined workflow. IncomeGenius provides alerts

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decisioning process and cash management concerns. It offers additional dimensions of time to payback, cash drain, corporate tax structure, subservicing terms and MSR financing possibilities, which are not available in other best execution models. “Lenders, especially non-bank mortgage companies, need to be acutely aware of their cash needs and balance sheet liquidity in addition to getting the best economics out of a loan sale,” said Phillip Laren, director of MSR Services at MCT. “The enhanced best execution tool provides analytics to compute cash loss after adjusting for tax impact, months to breakeven, and any lift through MSR financing. It’s unique in that it analyzes servicing options not just from a secondary marketing perspective, but also from the financial management side of the business by considering cash spent to retain and when it may eventually be recovered.” The model is completely customizable to actual subservicer costs, tax structures, and financing terms. “What if” scenarios can be set to run different scenarios to empower a CFO and secondary trader with data to determine the best decision based on economics, cash, balance sheet and tax optimization concerns.

transactions and do this as quickly as possible to eliminate surprises at the closing table,” said Kerry Stockel, product manager for ClosingCorp. “SmartCalc will be able to significantly boost productivity, increase efficiency and provide a sustainable solution to clients.”

By Jonathan Foxx

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E-sign and Enforcing Electronic Signatures Question: We recognize the requirements of E-Sign. One subject of discussion has been its role in contractually binding our financial institution in mortgage loan originations, especially in the area of consumer disclosures. How valid are electronic signatures? Can electronic signatures be used to enforce contracts? Answer The Electronic Signatures in Global and National Commerce Act (ESign) was designed to allow greater flexibility to implement electronically signed transactions. Its requirements have been used more and more since E-Sign’s inception in 2000. E-Sign specifies that an electronic record or transaction may not be rendered invalid solely on the basis of its electronic or digital nature, but it makes no guarantees about the overall enforceability of such electronic contracts. An electronic record is only enforceable if it meets the criteria specified in relevant contract laws as well as the language of E-Sign. It is worth noting that E-Sign applies to interstate or government interactions. With respect to in-

state transactions, these are bound either by the Uniform Electronic Transactions Act (UETA) or the governing state laws relevant e-Signature laws–which, in some states, are actually more strict than E-Sign or UETA. For an electronically signed document to be enforceable in court, it must meet certain requirements for legal contracts in addition to the electronic signature guidelines specified in the appropriate laws (such as E-Sign and UETA). According to E-Sign, an electronic signature is “an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.” In contract law, signatures serve the following general purposes: 1. Evidence: Authenticates agreement by identifying the signer with a mark attributable to the signer that it is capable of authentication. 2. Ceremony: Act of signing calls attention to the legal significance of the act, preventing inconsiderate engagements. 3. Approval: Express approval or

authorization per terms of agreement. To elucidate on factors involving authentication, broadly, authentication is defined as evidence that a given record, contract, or form is a genuine, unaltered written representation of an agreement approved by two or more parties, whether in paper or electronic form. An authentic document contains no evidence of fraud or tampering, such that it may be reasonably concluded that the parties in agreement did indeed assent to the enclosed terms. Assent is evidenced by an attributable, authenticated signature. To be authenticable, the transaction must contain enough information uniquely attributable to the user that fraud, forgery or validity can be reasonably proven. For an electronic transaction to

withstand scrutiny in court, it must meet the definitions and criteria stated above; that is, it must be capable of authentication and nonrepudiation, call attention to the document’s legal significance (viz., creation of the electronic signature), and demonstrate approval of the terms of the agreement. Some electronic signature technologies sufficiently meet these criteria and some do not. Therefore, it is very important for businesses and government agencies to choose their electronic signature technology carefully or risk making agreements that cannot be enforced. If interested in a review of your electronic signature technology, please contact us. We have subject matter experts who can review the technological and regulatory compliance requirements of E-Sign

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.

Dear Mortgage Professional, The 2016 Election is ﬁnally over! With the new Congress & President your government affairs team at NAMB is going to be very busy in both the House and Senate in the weeks and months ahead. In order for us to get support from the Congressional members we need your gracious donations so your voices will be heard on Hill. Please support your industry by donating today! For more information about NAMBPAC and NAMB’s overall legislative advocacy efforts, please feel free to contact me, or NAMB Government Affairs Chair Michelle Velez, or visit www.namb.org.

As we are now coming to the end of the year, I would like to recognize and thank each of you who have so very generously supported NAMBPAC this year! Your contributions mean so much and your tireless support for our industry is very much appreciated! Sincerely, Mike Anderson, CRMS 2016-2017 NAMBPAC Committee Chair manderson@mfsus.com

Thank You to Our 2016 NAMBPAC Contributors Year-to-Date Diamond-level Contributors ($5,000 maximum annual contribution) Flagstar Bank Federal PAC......................................MI Olga Kucerak, CRMS ..............................................TX Shane Lester, CMC, CRMS ....................................AR Michelle Velez, CMC ..............................................CA Kimber White..........................................................FL

Platinum-level Contributors ($2,500+ annual contribution) Ginny Ferguson, CMC ............................................CA Lisa Lund ..............................................................AZ John Porter ..........................................................WA

Note: Contributions received and pledged between January 1, 2016 and November 30, 2016.

For additional information about NAMBPAC, please feel free to contact me or visit namb.org. Mike Anderson, CRMS • 2016-2017 NAMBPAC Committee Chair • manderson@mfsus.com * Federal Election Law requires NAMBPAC to use its best efforts to collect and report the name, address, occupation and employer of everyone who contributes $200 or more in a single year. If your contribution to NAMBPAC to-date in 2016 is less than $200, your name may not appear on this list, but NAMBPAC is still very grateful for your generous support!

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Sustaining Contributors Richard Abazia ......................................................CA Chuck Anderson......................................................ID Joe Ashton ............................................................AZ Jayne Bail..............................................................CO Allen Beydoun ........................................................MI Audrey Boissonou ..................................................CA Louis Borsellino......................................................NY Jessi Bostic............................................................UT Doug Braden..........................................................CO Teresa Buckman ....................................................CA John Burke ............................................................CT Michael Burroughs ................................................OH Shannon Cagle ......................................................TX Joseph Cannarozzi ................................................SC Dana Chahidi ........................................................CA Thomas Cullen ......................................................SC Harry Dinham, CMC................................................TX Tammy Engel ........................................................CA Don Fader..............................................................NC Don Frommeyer, CRMS ..........................................IN Regina Graham ......................................................FL Melinda Gregory ....................................................TX Kelly Haney ............................................................TX Roger Hope ............................................................PA

Damion Hughes......................................................TX Kevin Kennedy........................................................FL Wayne King ............................................................TX Steven Lang ..........................................................CA Corey Leonard ........................................................IL Kim Lewis ..............................................................TX Anthony Lombardo ................................................CA Heidi Martin ..........................................................OR Tiffany McCoy ........................................................AL Brion McDermott ....................................................FL Ross Miller ............................................................LA Thomas Mizgerd ....................................................PA Marshall Moody......................................................TX Anthony Moore ......................................................FL Nelson Otero ..........................................................CA Terry Pogofsky, CRMS..............................................IL Jeanine A. Robbins ................................................AZ Nancy Romfh..........................................................TX Marlene Rouen ......................................................LA Kathy Rubin............................................................TX Joan Ruth ..............................................................AZ Einat Sadot ............................................................CA Anna Salser............................................................AL Julia Schloss..........................................................CA Guy Schwartz, CMC................................................CA Jeff Shealey, GMA ..................................................TX Shawn Sidhu..........................................................CA Geoff Snyder ..........................................................TX Adam Stein ............................................................ID Donald Thomas ......................................................TX Ramona Thompson ................................................TX Steve Tilkin ............................................................FL Roland Varblow ......................................................VA Christopher Wagner ..............................................OR Brady Webb............................................................KY Cynthia Wingo........................................................CA

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Gold-level Contributors ($1,000+ annual contribution) Joel Berman ..........................................................NY Rick Bettencourt, CRMS ........................................MA Chris Bettis, CRMS ................................................OR Jhonny Bravo ........................................................FL George W. Burkley III ..............................................IN John Councilman, CMC, CRMS ..............................FL Dale Di Gennaro ....................................................CA Andy Harris, CRMS ................................................OR Erik Janeczko ......................................................MO David Kane ............................................................FL Fred Kreger, CMC ..................................................CA Cathy Lee................................................................HI Linda McCoy, CRMS ..............................................AL Jim Nabors, II, CMC, CRMS ....................................OH Nathan Pierce, CRMS ............................................UT Valerie Saunders, CRMS ........................................FL Lisa Severseike ......................................................IA John G. Stevens, CRMS ..........................................UT

Silver-level Contributors ($500+ annual contribution) Mike Anderson, CRMS ............................................LA Rocke Andrews, CMC, CRMS ..................................AZ Joe Archer..............................................................PA Keith Bilodeau ........................................................WI Mike DeSantis ......................................................MA Don Frommeyer, CRMS ..........................................IN Scott Grifﬁn............................................................CA Paul Marsh, CMC, CRMS ........................................TX Michelle Velez ........................................................CA

Attracting New Career By Michael Dresden

ll participants in the mortgage lending industry have an interest in recruiting new talent to our respective professions and specialty areas. While the pace of new entrants to the appraisal profession has slowed in recent years, many observers feel that the availability of quality appraisers for the assignments at hand is now in balance. As a result, our ability to produce a quality work product is in no way threatened. Regardless, from our vantage point as a fully national appraisal management company (AMC), we believe that there is a distinct possibility in the coming decade that we will not have enough experienced appraisers for the anticipated workload. Factors for this assessment

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include a steady rise in the average age of real estate appraisers, natural attrition from the profession and a more difficult path to entering the appraisal profession. It is imperative that the mortgage lending industry, as a whole, studies these trends and finds ways to encourage quality individuals to pursue a career in real estate mortgage lending and, in particular, residential real estate property appraisal. A look at the numbers The Appraisal Subcommittee (ASC) Active Appraiser Credentials Summary Report lists nearly 89,000 Certified General and Certified Residential appraisers and another 8,000 Licensed Appraisers. However, these totals include appraisers licensed in multiple states.

When you remove duplicates, we believe there are about 75,000 active individual appraisers. Additionally, many of these licensed appraisers are not active in the field completing core assignments. Instead, many of them hold administrative and supervisory positions with AMCs, banks and other lending industry institutions. A good-sized AMC may have 10 or more licensed appraisers in the database who are not out in the field. At the same time, less than 200 individuals passed appraisal exams last year and not all of them moved into field appraisal. In addition, similar to mortgage loan officers, the average age of appraisers is mid-to-late 50s, advancing on â&#x20AC;&#x153;reduce my practiceâ&#x20AC;? age or full retirement. Overall, origination volume has

continued to grow through the years, while the number of credentialed, licensed appraisers is actually down from the last decade. In our view, we believe that the appraisal is the best way to put a valuation on a home and, thus, technology can never replace the inspection and market comparison performed by a trained and experienced professional. However, technology can help appraisers research and compile comparables and meet ever more stringent documentation and quality assurance requirements. Furthermore, working with an AMC allows appraisers to secure assignments more readily and access, without additional investment, the latest information and communication technologies, including

er Professionals

While individual states license and supervise appraisers, the education requirements for the profession are set by the Appraisal Qualifications Board (AQB) of The Appraisal Foundation, which is authorized by Congress as the source of appraisal standards and appraiser qualifications.

continued on page 32

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Barriers to entry There are four categories of appraisers: l Trainee Appraiser l Licensed Appraiser, who is limited to the size, number and value of homes that can be appraised l Certified Residential Appraiser l Certified General Appraiser, who can also appraise commercial properties.

Effective Jan. 1, 2015, Certified Residential and Certified General appraisers are required to have a bachelorâ&#x20AC;&#x2122;s degree or higher from an accredited college or university. While the education requirement for Licensed Appraisers is lower, at 30 semester credit hours of college education, a number of states have eliminated or are likely to eliminate this category of licensure. Combined with the lack of advocacy at the university level for valuation curriculum, this is slowing entry to the field. The experience requirements for accreditation range from 2,000 hours for Licensed Appraiser to 3,000 hours for Certified General Appraiser, at a time when there are constraints on the available apprenticeship opportunities. The factors involved include the reluctance â&#x20AC;?

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integration with lender-specific origination software. In these ways, AMCs foster appraiser productivity.

MBA’s 2016 Annual Convention

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his is the 17th time since 2008 that this survey of senior mortgage banking executives has been conducted and distributed. It is completed twice annually, at the Mortgage Bankers Association (MBA) Annual Convention in October and at the MBA’s National Secondary Market Conference each May. My conference experience this year consisted of attending the Capital and Secondary Market Committee Meeting, lunching with a Fannie Mae executive, meeting for an hour with the president of Ginnie Mae, breakfasting with two new potential clients and completing 29 surveys over three days. I’ve been a full-time observer and student of the mortgage banking industry since 1977 when I worked for MGIC and wrote a weekly newsletter on the secondary market for a decade plus. The Boston convention was my 35th in 39 years in the industry. As there are many new recipients of this report, it is worth mentioning that in 1996, I became the first public major critic of the GSEs within the ranks of MBA’s membership. Note that the referenced speech from the October 1996 Annual Convention is available to curious readers upon request.

The purpose of this survey is to capture some basic production data and gather the opinions, ideas, values and expectations of senior mortgage banking executives on many of the business and industry’s key issues, topics and concerns. A second purpose of this series is to bring senior executives further into a public discussion of key industry issues and topics without drama and despite the sometimes controversial nature of the underlying issues. For this year’s convention, 29 meetings were arranged and an equal number of surveys were completed. The surveyed group consisted of 13 CEOs/presidents, eight EVPs, five SVPs and three VPs. Excluding the CEOs/presidents, all of those surveyed this year work in capital markets, production or operations. Of the firms represented in the survey, nine will produce more than $10 billion in 2016, another 10 originated $2-$9.9 billion, and 10 produced less than $2 billion. The smallest firm, a brokerage, did $75 million, and the largest was the largest … you know who! The executives surveyed represent 15 banks and 14 nonbanks. Included were two homebuilder-owned firms, one mortgage brokerage, a realtorowned firm, five private equity-fund owned companies and another owned by a hedge fund. One of the

firms runs an Internet-based call center. Twelve of the firms originate through one channel, 10 produce loans in two channels, and seven of the 29 originate in retail, correspondent and broker wholesale. Several others run ancillary call center operations. The surveyed group is carefully structured to be representative of the lending industry in terms of the size of firms, their reach and scope, physical location, product menu and operating channels. All efforts are made to mimic the membership profile of the MBA. The 70-question survey was drafted in the weeks before the conference, tested, and run past several industry folks for completeness and clarity. Input into the questions was sought and received from past and present members of RESBOG and MBA officers, and from several past chairmen of the Capital and Secondary Market Committee. Except for the advance test group, all the surveys were completed face to face during meetings at the convention held Oct. 23-26, 2016. About 40 minutes was required to complete each survey. I had scheduled a meeting virtually every hour from breakfast to dinner on Sunday, Monday and Tuesday. My survey process starts with recording the responses to the questions, then compiling the information in a spreadsheet,

preparing a report of findings, and distributing it to those surveyed and other interested parties. Information extracted from the questionnaires has been used for a years-old serial–“The Corner Office Outlook”–which was published periodically in Mortgage Banking. The August 2016 issue contained the 10th article in a series I coauthor with Tom Millon, CMB/CFA and CEO of the Capital Markets Cooperative, sponsor of this year’s survey. It was based around issues and topics contained in the survey from last May. As for the survey group, it consists almost exclusively of longstanding industry associates, clients and friends. The common denominator is that all are industry veterans. Many of those surveyed have participated in this bi-annual survey since its inception. Most are close industry contacts who have helped me stay abreast of intraindustry issues, trends and developments over the course of decades. Only one of the 29 executives was surveyed for the first time and no new firms were included in the survey group this time around. Note that more than a half-dozen changes in the surveyed parties were made over the past two years to adjust for the major secular shift to independent mortgage banks (IMBs). Although some of the questions are time specific and appear on

on Survey: A Report of Findings

By Tom LaMalfa

about the subjects herein than any real major surprises in the survey findings. Nonetheless, there are some of the latter buried in the information. For me personally, the almost 2:1 belief that the Republicans would hold the Senate post Nov. 8 was a surprise. More important, the findings show where consensus exists and where little resides. From my perch, the mood of this year’s convention was quite positive. As suggested, the industry is experiencing strong production and nice returns for its effort and ability to keep up with a fast pace. This optimism among market participants was my key takeaway from this convention. Meanwhile, Fannie Mae’s announcement of its Day 1 Certainty initiative had lenders buzzing and stole the show. It promises rep and warrant relief. The convention’s downer was the announcement that MBA’s leader, CEO David Stevens, was suffering from prostate cancer. Thus prefaced, it’s on to the questions. Note that what follows is not an analysis; rather, it’s a straight forward iteration of the collected responses. No attempt is made to provide any color on the issues or topics included in the questionnaire. None of the complexity of so many of these issues, or of the various nuances in topics or responses, is dealt with in this report. These are surface findings only.

Finally, readers are advised to use the Scorecard to follow along as a guide in reading the text as I often group questions along the same topic and thus omit a direct link to each and every query. Responses not adding to 29 acknowledge that not all the executives could answer every question or that the question wasn’t applicable. Question 1 inquired if production was up, down or flat this year compared to 2015. Twenty-three of the 29 executives surveyed report production dollar volumes were up. This compared to five who reported flat year-over-year volume and only one who indicated that volume declined. Questions 2 to 7 asked about origination volume, specifically what portions represented each of six categories of production. Purchase business accounted for an average (unweighted by volume in this or any of the questions) of 62.8 percent of the entire group’s origination activity. The range of responses was wide: from 20-99 percent. Agency, defined as Fannie Mae and Freddie Mac, conventional volume accounted for 62.3 percent of production, with a range of 40-95 percent; government-insured volume, which ranged from two to 80 percent, averaged 29.7 percent continued on page 33

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the GSEs is now 98 months old and Congress has accomplished precious little that addresses the two insolvencies and prepares for the future. It would be my hope—as an objective, independent researcher, analyst and observer of the mortgage banking industry— that policymakers in the Congress and Administration and at the Federal Reserve, the CFPB, the FHFA, Ginnie Mae, HUD, FHA, Fannie and Freddie think about, discuss and evaluate the surveys’ findings and how they affect—to the extent they do—borrowers, lenders, transitional third parties and, importantly, the health of the mortgage market. It need be said that given who is being polled, it is understood that the findings reflect only the responses within the mortgage banking industry, not a broader cross-section of the U.S. population. Not a random survey, there is nothing in these results that would necessarily apply outside the mortgage finance industry. It also deserves mention that survey results are only valid as of a specific point in time. Things can change, sometimes quickly. That said, I believe as a longstanding industry observer, the findings well represent the facts, expectations and thinking of the full mortgage industry. Indeed, most readers of this report will find many, many more confirmations to their own thinking

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these surveys only once or twice, others are included in every survey. Data-driven questions like Questions 1-10 and 38-40 are static inclusions in the survey. Other questions may be asked several times and then abandoned, while still others are asked but once. Frequency depends on the importance and sustainability of the topic or issue. Collected surveys provide a dataset of queries and responses over time. Analysis of the resulting longitudinal data shows patterns and trends, and may signal new developments in the business and industry. For example, the heavy cost of regulation has become increasingly apparent in the data, as is concern over the risk characteristics of FHA loans. This particular survey evidences an industry having undergone substantial growth in production volume this year, ostensibly the best annual performance since the first half of 2007. Despite the many regulatory hurdles, it has been a very strong year for mortgage banking. It is the 50th month of a nationwide sellers’ market, with significant effect on house prices, as ICHR’s data indicates. Personally, I find the information collected to be relevant, interesting, insightful, informative, useful, and instructive, especially so for policymakers. It is not lost on anyone that the conservatorship of

TRID, the Election and What You Can Do Now: Part I By Richard Horn

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he recent election has created a lot of questions about what will happen to the Consumer Financial Protection Bureau (CFPB). The CFPB could be completely “abolished,” as described in the GOP platform, or the structure of the CFPB could be changed to a commission, and its budget moved under the Congressional appropriations process. Under either of these scenarios, it is quite possible that the TILA-RESPA Integrated Disclosure rule, otherwise known as “TRID,” will remain on the books. Implementation is largely complete and there have been quite a few industry studies that support the benefits of the rule. Further, a full repeal of the TRID rule would likely require the industry to “reimplement” RESPA 2010 and the TIL. As much as everyone loved the revised Good Faith Estimate (GFE), it may be better to continue with TRID and seek improvements to the rule under the Trump Administration and Congress. Considering this, it is prudent for lenders to continue improving their compliance with TRID. Lenders are currently still subject to enforcement by both federal and state regulatory agencies and private lawsuits by borrowers. Also, the CFPB’s recent proposal to amend the TRID rule did not address liability or the rule’s cure provisions, which means the current legal risk for violations of the rule will remain for some time. One area for improvement is a lender’s relationship with settlement agents. The lender is responsible for all of the information on the TRID disclosures, including the itemized list of closing costs and the prorated taxes and utilities. The rule expressly requires lenders to disclose the “actual terms of the transaction,” which means lenders must get it right. But the rule does give lenders a break for the CDs provided before closing. The commentary allows lenders to use the “best information reasonably available when the actual term is unknown to the creditor at the time disclosures are made.” This standard requires the lender to “exercise due diligence in obtaining the information.” The commentary provides as an example of “due diligence,” a creditor requesting information from a “settlement agent for homeowner’s association dues or other information in connection with a real estate settlement.” In addition, the commentary states that if a lender does not request the actual cost of title insurance from the title insurance company and instead discloses an estimate based on a different transaction, the lender has not conducted “due diligence.” To satisfy the “best information reasonably available” standard, lenders should ensure they have processes in place to conduct “due diligence.” Lenders may want to consider alternatives to manual processes to request this information from settlement agents, such as technology solutions.

Richard Horn of Richard Legal PLLC, was formerly with the CFPB, where he served as senior counsel and special adviser and led the final TRID rule and the design and consumer testing of the TRID disclosures. He may be reached by e-mail at Rich@RichHornLegal.com.

SPONSORED EDITORIAL

attracting new career pros continued from page 29

of both lenders and AMCs, which may have requirements in addition to that of lenders and investors, to use apprentices for appraisal assignments. Also, even when a candidate for accreditation can find a supervisory appraiser to work under, many states have rules that limit the ability of trainees to work independently, which negates the value of taking on a trainee. Specified education, including appraisal curriculum, and experience for any level must be completed prior to taking the National Uniform Licensing and Certification Examinations. If these trends continue, they may eventually impact the origination process, producing longer waits to complete residential appraisals, pricing pressures on appraisals and the temptation for lenders to outsource appraisals to less verifiable thirdparty aggregators. Where do we go from here? Before a lack of experienced appraisers becomes an issue, we should work together as an industry to find reasonable ways to accelerate the accreditation of appraisers and, also, encourage more people to consider a mortgage industry career. Some workable approaches might include: l Allowing hours of complementary fieldwork to be accepted toward the total hours of experience required for accreditation. Examples might include working within the review department of a lender, at a title company or with a real estate agency. l Streamlining career entry by reducing, within reasonable numbers, the apprentice hours required for any level of accreditation. l Removing the time barrier required for achieving these experience hours. Currently, hours must be completed in no fewer than 12 months for licensed appraiser, 24 months for certified residential appraiser and 30 months for certified general appraiser. Why delay a motivated and disciplined appraiser candidate who can complete the required hours sooner? l Devising incentives to encourage experienced appraisers to mentor trainee appraisers, as was common when appraisal was more of a

“legacy” or family-related profession. l Encouraging more universities to offer or expand appraiser and real estate-related curriculum so that a bachelor’s degree would include some or all the required appraisal specific education. l Greater participation by the industry in real estate career days and other modes of recruiting. AQB responds Fortunately, there has already been significant movement this summer and fall (2016) within the Appraisal Qualifications Board to amend real property appraiser criteria. The AQB has now issued two drafts, May 18, 2016 and Sept. 15, 2016, of Proposed Changes to the Real Property Appraiser Qualification Criteria. Provisional concepts include: l Eliminating the college-level education requirement for the Licensed Residential credential in its entirety and, also, changing the bachelor’s degree requirement for the Certified Residential credential to an associate’s degree. l Allowing practicum experience, where trainees do course work and “practice” appraisals under the supervision of a licensed appraiser, be eligible for no more than 50 percent of the experience requirements. l In respect of the core curriculum, the National Uniform Licensing and Certification examinations and Uniform Standards of Professional Appraisal Practice (USPAP) instruction required of all appraisers, reducing required experience hours to 1,000 hours for Licensed Residential, to 1,500 hours for Certified Residential and to 2,000 hours for Certified General accreditation. The AQB rejected allowing experience in other professions to satisfy any Qualification Criteria. Additionally, a main thrust of these proposals, as suggested above, is to have university courses fulfill more of the core curriculum required of becoming an appraiser, as well as accepting College-Level Examination Program (CLEP) exams in partial fulfillment of professional education requirements, both of which continued on page 107

a report of findings

The highest score was an 8.5 for conventional servicing, but was a 10 for Ginnie MSRs. Question 19 wanted to know if the GSEs’ exception from the 43 percent DTI cap in the QRM rule put their firm at a competitive disadvantage vis-à-vis Fannie and Freddie. Only two of the executives, both portfolio lenders, felt they were disadvantaged by the exemption. Freddie’s Loan Quality Advisor Suite was the subject of Question 20. On the 10-point scale, the group

assessed the Freddie suite as a 6.5. The response range was from one through nine. Questions 21 and 23 asked if their firms were respectively selling more or fewer loans to Freddie and Fannie. Fifteen executives reported selling more to Freddie year-overyear, five fewer and four reported no change. For Fannie Mae, 17 executives indicated more sales, nine fewer and three unchanged sales. Question 22 asked who was providing a better service level and price, and the collected responses couldn’t have been closer: 13 said Fannie, while 12 said Freddie.

Question 24 wanted to know if Fannie Mae’s Collateral Underwriter was working well at their firms. Yes, said 19 executives versus two that said no. The remaining eight said they weren’t sure and deferred an answer. Question 25 wondered if the GSEs’ new loan dispute appeals process was viewed positively. Yes, responded 17 compared to three who weren’t pleased. Another nine indicated uncertainty and passed on offering a response. Question 26 inquired whether the constraints to extending more continued on page 64

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n National Mortgage Professional Magazine n DECEMBER 2016

for the group as a whole. FHA volume for the year was reported up at 12 firms, down at eight and unchanged at nine others. Question 6 asked about the percentage of their firm’s conventional business that was over 80 percent LTV. The average was 32.7 percent amid a five to 70 percent range. Question 7 asked about their call center, consumer direct business. The group average was 10.8 percent with a range of zero to 100 percent. Eight of the 29 firms surveyed operate call centers, which account for at least 10 percent of their business. Questions 8 to 10 wanted to know respectively if they were originating more high LTVs, high DTIs and low FICO this year than last. Of the 29 firms, 12 were doing more high LTVs, six less and 11 the same amount; seven were writing more high DTIs, nine fewer and 13 unchanged; nine were originating more low FICOs, 11 fewer and nine reported no change year over year. Question 11 asked if there was a recent wave of cash out refis occurring. They are back in a big way said 11 executives, while 17 others reported no acceleration in cash outs. Question 12 wanted to know about their firms’ profits. Higher said 23 compared to five who reported essentially the same profit level or lower in 2015. Are you adding employees, asked Question 13? Twenty-five firms are adding compared to only two that have not added or cut back employment levels. Question 14 inquired about any shortage of appraisers. Here 26 of 29 said there was a shortage in at least one of the markets their firm served. Many added that the appraiser shortage is nationwide. Questions 15 and 16 dealt with the firms’ MSR posture this year and their attitude toward originating FHA loans. Nineteen of the 29 are retaining servicing, 14 are sellers, and six others are buying bulk. As for FHA lending, 15 executives were less upbeat about originating FHA loans, while nine were more upbeat. Questions 17 and 18 wondered if the executives were concerned about the liquidity and value of conventional servicing and of Ginnie Mae servicing. To answer, I asked each executive to respond on a one through 10 scale, with the higher number being very, very concerned. Conventional servicing scored a 5.3 on the 10 point scale, while FHA/VA/Rural servicing scored 7.6.

continued from page 31

Recruiting for the F Freedom Mortgage’s First Flyer training program educating the next generation of mortgage professional By Phil Hall

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enjamin Franklin once wrote, “An investment in knowledge pays the best interest.” If the Founding Father was around in today’s mortgage industry, he would have to acknowledge that Freedom Mortgage Corporation is reaping a diverse return on investment for its First Flyer training program that educates the next generation of industry professionals, while ensuring a new infusion of talent to keep the company operating for years to come. Michael Middleman, the program’s founder and Freedom Mortgage vice president, recalled that the program was first contemplated during 2014, when the post-recession housing market was gaining stability but not gaining a new influx of professionals. “A lot of people were flushed out,” he said, adding that many

“We were able to create a program that encouraged participants to learn and want to do something new—if they were willing to put in all of the effort that was required.” —Michael Middleman Freedom Mortgage Vice President and Founder of the First Flyer Program

of the mortgage professionals who rode out the storm were industry veterans with a penchant of hanging tough

during difficult periods. However, this created a demographic imbalance with many loan officers in the late 40s and early

50s but relatively few in their 20s or 30s. “The average age of a loan officer today is 53 or 54, so we thought it would be a great opportunity to be more than a thought leader by introducing more youth and life into the business,” Middleman added. “We wanted to take advantage of our niche in the market and grow to meet that opportunity by bringing in a lot of loan originators and sales folks.” Katherine Rugge, the First Flyer program’s senior project manager, sought to design the structure of the curriculum to accommodate Millennials that would be approaching the mortgage world for the first time. “We were going to work with individuals who were completely green and had no knowledge of the mortgage industry,” she said. “Our goal was to model them into ideal Freedom Mortgage employees, while building future leaders who understand our business model.”

Future

environment like this. It is very fast-paced and exciting—it’s like drinking from the fire hose for them—and we ultimately want to programmatically bring people on and get them into a position where they can earn and succeed.” In creating the First Flyer course, the company recognized that not everyone who signed up would be able to make it through the entire endeavor—especially in regards to the requirement in passing the SAFE Act test, where participants are given three chances to make the grade or be dropped from both the program and the company payroll. “If you don’t pass, you can’t sell,” warned Middleman. Classes are now averaging between 40 and 50 participants,

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

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with colleges and students at career fairs,” Middleman continued. “At first, we had a somewhat limited pool, so we extended the targeted candidate reach to include those with just a few years out of college. We also relied on the CareerBuilder Web site for recruiting.” Participants in the First Flyer program become salaried members of Freedom Mortgage and are expected to go through a series of learning tracks, including sales, underwriting, IT, loan analysis and servicing. The coursework is taught by Freedom Mortgage employees, with the goal of helping program participants pass the various tests required for full-time employment in the mortgage progression. “We ask a lot of them,” said Middleman of the program’s participants. “They are put in a new position with new rules. Many are just out of school and do not know how to work in an

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For her part, Rugge had a sense of been-there/done-that in dealing with young people that sort of fell into mortgage jobs rather than actively pursued them. “I graduated from Eastern University with degree in anthropology,” Rugge said. “I opted to be a loan advisor, and spent time in processing and as customer service advisor.” “We were able to create a program that encouraged participants to learn and want to do something new—if they were willing to put in all of the effort that was required,” Middleman stated. The premiere of the First Flyer program occurred on Jan. 26, 2015, with a focus on upcoming and recent college graduates from schools located near the company’s headquarters in Mount Laurel, N.J., and its office in Columbia, Md. “We had a recruiting group that started building relations

and the company has been pleasantly surprised that the dropout rate is below its initial expectations. “We created the program with a 75 percent retention goal,” said Rugge. “We are above that—we have about a 20 percent dropout rate.” A typical First Flyer program participant is Allison Riss, who arrived at Freedom Mortgage in pursuit of her first post-college job. “I came to this from my college, Rutgers, through its career center,” Riss said. “I had seen a couple of posts and Freedom Mortgage representatives visited my campus. I knew nothing of the mortgage industry, but I knew I was good at numbers. So I said to myself, ‘Let me give it a try.’” To Riss’ happy surprise, the First Flyer program was far removed from the academic environment that stressed individual studies. Instead, she thrived in a team culture that offered encouragement at every level. “The community support they have is incredible,” Riss continued. “I’ve never felt so involved. I started in June, and in the first month we had three different teachers that helped us go through our books. Once we passed our first test, we went into operations. Two to three months later, we took the state license exam. In preparing for that, the instructors] held our hands throughout whole process.” In January, Riss will graduate from the program and become part of the Freedom Mortgage operations. “I hope to be a team leader, and then a sales manager,” Riss said. “It’s great working at Freedom.” Looking ahead into 2017 and beyond, Middleman is not eager to rush the First Flyer program too quickly, if only not to create a new disruption within the company. “As you grow, it can be difficult to maintain the core competencies that got you to where you are today,” Middleman explained. “We want a thoughtful and programmatic growth that will enable us to maintain the basic culture of the company.”

Ending the Fourth Quarter With a BOOM!

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s we enter the last stretch of 2016, companies look back at the year’s marketing campaigns to evaluate results and start planning for 2017. While most companies slow their marketing efforts as the end of the year approaches, you can have a competitive edge over your competition. Choosing to market through the holidays is just as important to look ahead, it is equally as important not to lose focus on the present day. That’s what makes marketing through the holidays so interesting. If you choose to market, understand that your expected response rates should be less than usual. You should also expect to close at a much higher rate. People who are purchasing and refinancing their homes during the holidays are MOTIVATED. That’s why close ratios go up. For each person who decides not to market during the holidays, there is another who decides to stick with it. For this reason, results can vary through the holidays. To overcome this, maintain consistency. Whatever sort of marketing campaign you do, keep it going! Failure to maintain consistency is the biggest holiday campaign killer of them all. You’ve got to get in front of those who want to move and entice them to do so with you. What’s hot? What’s going to consistently bring you the highest volume of calls while keeping the return-oninvestment (ROI) you need to be profitable? A campaign you can track? One that provides reports that will keep you ahead of industry trends? Lead management tools that will allow you to work five to ten times more loans at once? Direct mail incorporates all of this. This is why it has risen back to the most frequently used marketing method for today’s top mortgage brokers. For mail to work effectively, it needs to be dropped consistently. Companies that only drop mail three to four times per year (or less) usually see varied results, while those who drop mail weekly or bi-weekly all year long seem to have much more consistent, scalable and profitable results. Plan your growth and marketing efforts accordingly and keep it consistent throughout the year. Starting and stopping will decrease the effectiveness of your campaigns. You need consistent results so you can effectively follow trends in the market. Just sending out mailers is not doing the trick anymore. You need to get a hold of your customers in multichannels. Multi-channel marketing is what several marketing platforms use to interact with potential customers in several ways within the same marketing campaign. For example: Direct Mail + Direct Mail Voice + PURL would be a multichannel marketing campaign.

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

nmp news flash

continued from page 24

content, ensuring accuracy with industry requirements and writing. The result was a comprehensive, updated program that gives member agencies an advantage when educating clients on consumer credit reports and scores. “Angie is an integral part of the CIS team and we are thrilled to see her efforts recognized by her peers,” said Mike Brown, CIS president and chief executive officer. “Angie’s outstanding commitment to service is seen every day as she leads our East and West Coast operation centers. Her in-depth credit and industry knowledge, as well her expertise on FCRA, compliance and credit reporting platforms is unparalleled. Angie’s contributions to NCRA have benefitted the entire industry.’’ NMLS Renewals Pouring In

The 2017 renewal period for the Nationwide Multistate Licensing System (NMLS) is “off to a strong start,” according to the State Regulatory Registry LLC (SRR), the Conference of State Bank Supervisors subsidiary that owns and operates the NMLS. As of Nov. 30, nearly 63 percent of the 581,000 licenses managed within NMLS were submitted for renewal and more than half (230,000) were approved for 2017. The SRR said this was an increase from the approximately 33,500 license approvals during the same period in 2015. More than 16,000 companies, 24,500 branches, and 189,000 individual licenses received renewals. The number of individuals to request renewal is one percent higher than in 2015. “Throughout November, the renewals process has been very robust, and state regulators continue to encourage nondepository entities to submit annual renewal requests as soon as possible to increase the likelihood of having licenses approved by Dec. 31,” said Sue Clark, chairwoman of the NMLS Policy Committee.

Trade Groups Push Senate on CFPB Restructuring

A quartet of leading financial services industry trade groups is urging U.S. Senate leaders to pass legislation that would restructure the Consumer Financial Protection Bureau (CFPB) away from its current setup with a powerful director to a five-person bipartisan board during the new Congress that will begin in January. “The current single director structure leads to regulatory uncertainty for consumers, industry, and the economy,” said the groups said in a letter sent to Senate Majority Leader Mitch McConnell (R-KY) and Senate Minority Leader-Elect Chuck Schumer (D-NY). “In contrast, a Senate-confirmed, bipartisan board or commission will provide a balanced and deliberative approach to supervision, regulation, and enforcement over financial institutions that is more in keeping with other financial regulators.” The trade groups also cited sense of uncertainty stemming from an ongoing court case that has raised legal questions on whether the current CFPB leadership structure is constitutional—the CFPB is appealing the decision, but there remains the possibility that President-Elect Trump could attempt to remove CFPB Director Richard Cordray from office before the appeal decision is announced. “The 2016 presidential election and the recent D.C. Circuit Court Case, PHH Corp. v. CFPB have clearly demonstrated a sole director leadership model is fragile, uncertain, and leads to instability at the Bureau,” the trade groups wrote. “In PHH, the appellate court found the CFPB is ‘unconstitutionally structured’ due to the fact the sole director can be removed only for cause by the president, stating this is a ‘gross departure from settled historical practice.’ Put simply, the D.C. Circuit Court held the president may remove the director at will. This result makes it even more apparent what a whipsaw effect the single director model presents, inhibiting the ability for financial institutions to plan for the future, which, in turn, limits

economic growth and hurts consumers.” The trade groups that created the letter to the Senate leaders are the Consumer Bankers Association, the Credit Union National Associations, the Independent Bankers Association of America and the National Association of Federal Credit Unions. Independent Mortgage Banks Report Net Gains

Non-Profits Fault FHFA on Housing Goals

A coalition of 21 consumer advocacy groups and civil rights organizations sent a letter to Mel Watt, director of the Federal Housing Finance Agency (FHFA), and Treasury Secretary Jacob Lew regarding the governmentsponsored enterprises’ (GSEs) Single Family Housing Goals

performance and whether this creates new limits on low- and moderate-income individuals seeking homeownership. “FHFA’s upcoming 2017 Scorecard must target a greater level of average-cost pricing and lower the rate of return on capital being reflected in the pricing at both Enterprises,” the letter stated. “Quite simply, the Enterprises’ average guarantee fees are too high. The differences between capital and fees on the Enterprises’ loans across the credit score spectrum and for various continued on page 67

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n National Mortgage Professional Magazine n DECEMBER 2016

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Independent mortgage banks and mortgage subsidiaries of chartered banks reported a net gain of $1,773 on each loan they originated in Q3 of 2016, up from a reported gain of $1,686 per loan in Q2 of 2016, the Mortgage Bankers Association (MBA) reported in its Quarterly Mortgage Bankers Performance Report. “Including all business lines, 94 percent of mortgage lenders in our study reported pre-tax net financial profits in the third quarter of 2016, compared to 90 percent in the second quarter of 2016,” said Marina Walsh, MBA’s vice president of Industry Analysis. An increase in production volume and slight decrease in expenses in the third quarter kept production profits relatively stable. These profits would have been even higher were it not for a decline in net secondary marketing income, primarily income related to mortgage servicing rights.” Average production volume was $764 million per company in the third quarter of 2016, up from $654 million per company in the second quarter of 2016. The volume by count per company averaged 3,072 loans in the third quarter of 2016, up from 2,721 loans in the second quarter of 2016. The average pre-tax production profit was 74 basis points (bps) in the third quarter of 2016, compared to an average net production profit of 73 bps in the second quarter of 2016. Production profits for the third quarter of 2016 are also up from production profits of 55 bps in the third quarter of 2015. Since the inception of the Performance Report in the third quarter of 2008, net production income has averaged 53 bps. “For the first time since the second quarter of 2015,

production expenses were below $7,000 per loan, at $6,969 per loan,” said Walsh. “However, these expenses remain elevated by historical standards. Given the increase in loan count and the higher pull-through rate compared to the second quarter, we would have expected an even larger reduction in production expenses. Loan balances continued their upward march and reached another study-high of $247,563, which helped keep production revenue per loan relatively flat despite a revenue drop in basis points from the previous quarter.”

NMP’s

uicken Loans began operations in 1985 under the name Rock Financial. Over the years, it has challenged preconceived notions governing business operations–most notably in 2010 when it moved its corporate headquarters to downtown Detroit, a location that few companies considered to be viable. The company also took a trailblazing leadership role in digital mortgage transactions, culminating with the successful launch of its Rocket Mortgage product, which became the center of industry and media attention with an audacious television commercial broadcast during 2016’s Super Bowl 50. The company has also raised customer service to new levels, as witnessed in multiple J.D. Power Awards for customer satisfaction in both its origination and servicing endeavors. National Mortgage Professional Magazine spoke with David Schroeder, vice president and the Charlotte, N.C. site leader for Quicken Loans Mortgage Services, about the company’s approach to business.

What makes Quicken Loans different from its retail competitors? David Schroeder: Our obsession with making financial services radically simple. As someone who has been with Quicken Loans for five years, what I find refreshing and energizing is the all-important focus on doing right by the client. If there is a social media complaint, it is everybody’s responsibility to do something—from the top echelon on down. Everything matters when it comes to the client experience in doing the right thing. What makes Quicken Loans different from its wholesale competitors? David Schroeder: It starts with the people. We’re in Charlotte, and for the second year in a row, we won the award for Charlotte’s “Best Place to Work” in a large company. A passionate purpose to serve our partners–not just slushy machines and bright colors in the office–is what makes us stand out. What does the company look for in potential employees? David Schroeder: It always starts

with passion–an inner fire and a pronounced enthusiasm for what we’re doing. We also look for integrity–people who are dedicated to doing the right thing. There are hundreds of things going on with any given loan. Doing the right thing when nobody is looking is what builds a business that stands the test of time–and Quicken will be here for the long-term. In our account executives, we also look for people with experience in the industry. This can be experience in related fields, such as people who were formerly brokers and underwriters. Their experiences are unique and valuable, and we appreciate the value they provide in helping to build our partner’s business every day. What is it like to have a company with headquarters in Detroit, a city with more than a few challenges going on? David Schroeder: As I stated, I am based in Charlotte, but I go to Detroit two times a month. I think it is very exciting to see the revitalization and greatness of the Motor City. We had a partner event there recently, and when you invite

people to Detroit, some may have a feeling of, “Gosh, I wish we went to Malibu or some exotic place.” But in going to this event, people were amazed by the energy level and beauty of the city and enthusiasm of city residents and our team members. Quicken Loans recruits people who move from outside of Michigan to work and live in Detroit to be part of something bigger than themselves. What is your forecast for the industry now that interest rates are poised to rise with more regularity? David Schroeder: If you look at the Mortgage Bankers Association forecast, you see that refinancing is projected to be down 40 percent for year. Thus, in that part of the business every deal become more important. Partnering with the right wholesale lender becomes more and more important. On the purchase side, during the last spike in 2013, a lot of people were caught flat-footed. We see the purchase market consistently growing over time. This is a relationship-based business development, so we need to help our partners build better Realtor relations through resources and confidence in execution–they remain

Legends of Lending By Phil Hall

the primary driving factor for borrowers making mortgage selections.

expanding the market and not taking business away and that has been proven over the last year.

There has been data from around the country suggesting that affordable housing is becoming more elusive to locate. In your opinion, what can be done to ensure greater housing affordability? David Schroeder: That is a question of supply and demand. Hopefully, if the economy continues to evolve, we can get more entry-level housing available. The industry also needs to do a better job in educating people about opportunities that exist for them. Many people in the marketplace are intimidated by the market or unsure of what they could afford. Our job is to get out into the community and let people know there are products that require less than 20 percent down. We can play a role in driving that education. That is one reason why we launched Rocket Mortgage–the majority of people who came to Rocket Mortgage were first-time homebuyers. We believed we were

How has TRID impacted Quicken Loans’ operations? David Schroeder: TRID achieved its objective of improving transparency, which is best for the customer. We conducted TRIDrelated training for more than a year in advance of the rule going into effect and we were better positioned than most in the industry. Over time, we will continue to fine-tune based on our learning. How is the company approaching marketing strategies, particularly on social media? David Schroeder: We believe there is a real partner connectivity element to this that has yet to be realized. We continue to reinforce the fact that we’re in people’s markets with our partners. We hold “In Your Market” events, where we sit down and talk about our business. On social media, we have a private Facebook Page where our partners get together

“Doing the right thing when nobody is looking is what builds a business that stands the test of time–and Quicken will be here for the long-term.” David Schroeder, Vice President and Charlotte, N.C. Site Leader for Quicken Loans Mortgage Services

and talk candidly about where the market is today. We believe this enables everyone to spread ideas more efficiently. What do you see as the company’s greatest challenges for 2017? David Schroeder: We believe there will be a contraction on the refinance side. This will challenge us to continue to be an effective partner with banks, brokers and credit unions in helping them react to that change. Whether it involves adding new technology or extending our

marketing, we are here to help our partners continue to grow and gain market share. The market is always evolving and shifting … I love that about our industry and the amazing brokers we support who meet that challenge every day. If Quicken Loans could be described in a single word, what would that word be? David Schroeder: “Evolution.” We are constantly evolving with the market. We are looking at what happens and are reacting proactively to build our partners’ business.

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

MONDAY

Master the Markets with Barry Habib

WEDNESDAY

Ryan’s Rants

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 CALIBER HOME LOANS Wholesale Lending

Airs every Monday at 7 a.m. Gain access to an exclusive FREE TRIAL OFFER from MBS Highway for Mortgage News Network viewers, visit MBSHighway.com/mnn

MONDAY

Centurion Roundtable Interviews

What you should be telling your borrowers ... uncensored. Brought to you by Airs every Wednesday at 7 a.m. For more information on Hancock Mortgage Partners, visit HancockMTG.com

WEDNESDAY

Top Originator Secrets with Brian Sacks Closing more, making more and still enjoying life! Brought to you by

Learn the secrets of success from this elite group of high volume originators. Brought to you by

Airs every Wednesday at 11 a.m. For more information on HomeBridge Financial, visit HomeBridge.com

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TUESDAY

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

THURSDAY

50 Most Connected Mortgage Professionals Leaders who share their knowledge for the betterment of the industry. The most ,followed and retweeted Mortgage Professionals.

Brought to you by Airs every Thursday at 7 a.m. For more information on REMN Wholesale visit REMNWholesale.com

THURSDAY

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Ralph LoVuolo Sr., “The Mortgage Godfather” shares his unique and innovative approach to mortgage origination. You better become a follower or else. It’s an offer you can’t refuse!

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WEDNESDAY

FRIDAY

Tired of turning down deals that don’t ﬁt traditional guidelines? Learn how to supplement your business with your most commonly overlooked leads. Brought to you by

Lenders Compliance Group provides practical advice regarding current mortgage compliance topics. Brought to you by

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Compliance Matters

Airs every Friday at 7 a.m. For more information on Lenders Compliance Group, visit LendersComplianceGroup.com

expanding our

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every day

FRIDAY

Inside the MBA

Airs bi-weekly on Friday at 11 a.m.

FRIDAY

Inside the NAMB Your bi-weekly window into whatâ&#x20AC;&#x2122;s happening at NAMB.

e Airs bi-weekly on Friday at 11 a.m.

n National Mortgage Professional Magazine n DECEMBER 2016

Your bi-weekly window into whatâ&#x20AC;&#x2122;s happening at the MBA.

If you have a product or service for mortgage professionals you can be a sponsor for these videos. For more information about these sponsorships or Mortgage News Network custom video productions please send an email to Info@MortgageNewsNetwork.com or call Beverly Bolnick, VP-Sales & Marketing, at 516-409-5555 ext. 4 and she'll tell you how you can be part of the action!

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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.

NAMB+ Endorses MassMutual on Discounted Disability Income Insurance

DECEMBER 2016 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

NAMB+ Inc., the for-profit marketing and communications subsidiary of NAMB—The Association of Mortgage Professionals, has teamed up with Massachusetts Mutual Life Insurance Company (MassMutual), the latest NAMB+ Endorsed Provider, on individual disability income insurance (DI) at discounted rates for NAMB members. “Proper planning and consideration should be considered should unfortunate events occur that could render you unable to work,” said Nathan S. Pierce, president of NAMB+. “Properly planning for such events can help protect you and your assets and our arrangement with MassMutual was developed and negotiated to put our members’ minds at ease if such events occur.” MassMutual is the latest addition to NAMB+’s growing list of Endorsed Providers. NAMB+ connects NAMB members with an array of Endorsed Providers aimed at helping mortgage professionals gain a competitive advantage in today’s marketplace with discounts and special programs only available to NAMB members. NAMB+ brings everything from compliance, credit reports, lead generation, phone services, social media, custom canvas prints and much more to NAMB members as part of the NAMB+ program. “We all understand the unpredictability of life and disability income insurance (DI) is an important product that can

help protect your income should you become too sick or hurt to work,” said Andrew T. Berman, an agent for MassMutual. “MassMutual’s offerings go a long way to bringing peace of mind to NAMB members in the event of such a life-altering event should occur. Our group works mostly with mortgage professionals and their families protecting against the worst case scenario so they can prepare for the best case scenario.” Meridian Bank Adopts Secure Insight’s Closing Guard Consumer Protection Tool

Meridian Bank has announced that it has enhanced its risk management policies and procedures governing its retail mortgage lending business by requiring independent screening and risk monitoring for all settlement agents having access to a borrower’s loan documents and mortgage proceeds. The process will be managed for Meridian by Secure Settlements Inc. t/a Secure Insight, the first vendor management firm to specialize in closing table risk. The company chose the Closing Guard tool to evaluate the backgrounds, licensing, insurance, and trust accounts of agents as a method to identify potential threats before a closing takes place.

“We are pleased and honored to have been chosen by Meridian for these critical risk management services,” said Secure Insight Chief Operating Officer Wayne Doctor. “In our extensive dealings with their leadership team, we saw first-hand their serious commitment to quality control, consumer protection and overall loan quality assurance. We are proud to be their partner in this important endeavor.” Closing Guard evaluates, rates, monitors and reports settlement agent risk in realtime through a nationwide database of mortgage closing professionals. The Secure Insight proprietary evaluation process combines automated data analysis with live reviews by trained analysts for the most accurate and informative risk analytics in the industry. “We recognize our responsibility to protect consumers from harm caused by theft of funds, identity and mortgage fraud, and our company continually seeks to not just meet but to exceed regulatory expectations for quality control and loan quality assurance,” said Thomas Campbell, SVP at Meridian. “We take the management of third-party service providers seriously, both for operational risk but also for investor confidence and consumer protection. We spent quite some time evaluating various providers to help us address settlement agent risk, and were

impressed with what Secure Insight has to offer in its Closing Guard product.” Data Facts EVP Julie Wink Elected NCRA President

Data Facts Inc. has announced that their Executive Vice President Julie Wink has been elected to serve the National Consumer Reporting Association (NCRA) as president for the 2017 term. Julie has played vital leadership roles within the NCRA, as part of the Legislative, Strategic, and Education & Compliance Committees, serving as a co-chair, a member of the NCRA board of directors, and vice president and treasurer. “The NCRA is an essential source for distribution of vital industry information,” said Wink. “The upcoming year is sure to bring new challenges within the industry. Data Facts’ involvement with the NCRA will ensure that our team and clients are mindful of and prepared for all changes and updates. As NCRA president, I will make sure Data Facts continues to be a leader in our quest to aid our client partners in continued awareness.” Wink began her career with Data Facts in 1995, as an account executive. She was promoted to sales director in 2001, and to executive vice president and partner of Data Facts in 2005. “Each person at Data Facts is committed to serving our clients and community in a trusted advisory capacity,” said Daphne Large, Data Facts’ CEO and a past NCRA president. “We want to be instrumental in helping their

businesses be as successful as possible. Julie serving as the NCRA president will empower us to be informed and equipped to rise to the challenging demands our industry makes on us all.” loanDepot Acquires Title and Settlement Service Providers

American Pacific Mortgage Celebrates Its 20th Anniversary American Pacific Mortgage Corporation (APM) has announced its 20th

year as a mortgage banking company in the Western United States. APM has achieved two decades of innovation and steady growth and now ranks as the 15th largest mortgage company in the country, employing more than 2,300. “Since 1996, the mortgage industry and our company have gone through a lot of regulatory changes, and certainly some highs and lows,” said Bill Lowman, CEO and president of APM. “One thing that has never changed is our unwavering commitment

to support our branch managers and loan officers.” APM is a purchase-focused retail mortgage lender with a strong record of achievements, including ending 2015 with $8.1 billion in loan production, an increase of $3 billion from 2014. “We’re profoundly excited that the culture we built gives us the opportunity to continue to serve our customers while making a statement about how companies in America can be run,” said Kurt Reisig, chairman of APM. continued on page 48

NationalMortgageProfessional.com

n National Mortgage Professional Magazine n DECEMBER 2016

loanDepot has announced that it has completed the acquisition of Closing USA (CUSA), a national title, escrow and settlement company and it has entered into a definitive agreement to acquire its affiliate, American Coast Title (ACT). Upon closing of both companies, loanDepot’s national licensing footprint for title, escrow and settlement services will expand to more than 30 states and Washington, D.C., while driving increased revenues through both loanDepot and business partner channels. The ACT transaction is expected to close in the second quarter of 2017, pending regulatory approval. The terms of the transactions were not disclosed. “This move is part of loanDepot’s long-term growth strategy, which includes strategic acquisitions intended to expand our portfolio with like-minded companies that share our culture and allow us to leverage existing operations, our proprietary technology, and our capabilities to their fullest,” said loanDepot Chairman and CEO Anthony Hsieh. “This team of 120-plus professionals is a natural fit for loanDepot, positioning us to drive increased business and strengthen our existing capabilities through state-of- the-art technology, bundled services and increase capacity.” Together, the CUSA and ACT team provide real estate transaction services for lenders across the nation, including escrow closings, title insurance, and searches for title, tax, liens and encumbrances for new and refinanced loans along with default services for foreclosed properties and commercial title insurance. With offices in Rochester, New York and Orange County, California, they will continue to operate as stand-alone entities. Closing USA President Elliot Foo and Chief Operating Officer Tom Vento will continue leading their teams. “We’ve worked closely with loanDepot’s management for years, which has created highly complementary cultures and tech-

enabled processes,” said Foo. “We’re very excited to join the loanDepot team, and look forward to being at the forefront of modern lending as a member of a category-leading team committed to helping responsible borrowers achieve their dreams.”

nmp The future of corporate storytelling Angel Oak Mortgage Solutions LLC

DocMagic

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

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

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

Caliber Home Loans Inc.

Ernst Publishing Co., LLC

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

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

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

DECEMBER 2016 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

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

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

Citadel Servicing Corporation

First Guaranty Mortgage Corporation

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

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

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

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

Class Appraisal

Freedom Mortgage Wholesale Division

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

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

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

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

happy new year!

from national m

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

United Wholesale Mortgage

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

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

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

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

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

coming in january 2017

nmp is proud to announce its annual list of Top Mortgage Employers

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

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

• Compensation • Speed • Marketing Support • Technology • Corporate Culture • Long-Term Strategy • Day-To-Day Management • Internal Communications • Training Resources • Industry Participation • Innovation

al mortgage professional magazine

n National Mortgage Professional Magazine n DECEMBER 2016

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

We polled our readers about their employers based on the following criteria:

NationalMortgageProfessional.com

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

Lykken on Leadership

How to be the Kind of Leader People Actually Want to Follow BY DAVID LYKKEN

DECEMBER 2016 n National Mortgage Professional Magazine n

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e admire leaders for all kinds of reasons in our culture. We look up to professional athletes who demonstrate great sportsmanship and hard work. We look up to political figures who use their platform to promote peace and prosperity. We look up to executives of major corporations who use the money they’ve gotten from their business ventures to fund philanthropic initiatives. In whatever area we can imagine, we find people who we believe to be great leaders. In each of these scenarios, however, we’re viewing leadership from the outside. A teammate of that professional athlete may have a different set of criteria for what makes a great leader. A staff member for the political figure may look for something different in leadership. And, finally, leaders in business may be judged best not by broader society, but rather, by the people who are working under them. I spend a great deal of time writing, speaking and consulting on how to build better leaders in the mortgage industry. What I’ve found is this: you might have respect from investors, your community, and even your customers—but all of this is unattainable if you don’t also have the respect of your employees. Great parents are

“Do you value the opinions of your people— and have you shown them that you do by listening to them?” judged not by the amount of respect they have for people outside of the home but, rather, by the amount of respect they’ve garnered from their own children. In the same way, leaders ought to seek first the respect of the people on their team. So, how do you become the kind of leader people actually want to follow? Here are a few tips … First, work on becoming a better listener. No employee can feel like they are valued until they feel like they are heard. One of my favorite pierces of advice comes from Stephen Covey: Seek first to understand, then to be understood. The problem we often encounter as leaders is that we already think we know what’s best for our people. All too often, we find ourselves not really listening and instead merely formulating our response. We think we already know the right answers, so we only let our people speak so that we can overrule them when they’re finished talking. We have to do better than that—we have to really listen. That means allowing the possibility that what our

people are saying to us may actually change our minds and get us thinking a different way. People want to follow someone who values their opinions. Do you value the opinions of your people—and have you shown them that you do by listening to them? There are essentially two views of human nature when it comes to work. One is that people are naturally lazy and that they will only work if they have to or if they feel they can get something out of it. The other is that people are naturally hard-working and that they find fulfillment in the work itself. Regardless of which one of these is most true, the second is definitely the most inspiring position to take with your people. No one likes to be micromanaged. People like to have a certain amount of control over their work. The best leaders give their people autonomy. They provide freedom to allow their people to express themselves creatively in their work. Is their risk involved in this? Absolutely. You will

likely have employees to who take advantage of the long leash by slacking off. But that’s a risk you’ve got to be willing to take if you want people working on your team who actually want to be there. Another thing that employees crave in their leadership is transparency. They want to know that you are who you say you are. It’s difficult for people to trust you when they feel like you’re keeping secrets that may work against their best interests. Whenever you can, share information openly and honestly with your people. If you are moving the organization in a different direction, let your people know why. Explain to them the challenges you are facing that impact the decisions you are making. Be a straight shooter. The more honest you are, the more trust you can expect from your people. Certainly, people are motivated by financial incentives. The more money they have, the better lives they can provide for the families. People like to have jobs where

Here’s one final tip for being the kind of leader your people want to follow … treat everyone equally. The worst thing you can do for morale in your organization is show preferential treatment to one group over another. Maybe it’s your executive team. Maybe it’s a family member you have working in your organization. Maybe it’s a group of people that shares your faith. Whatever it is, you can’t make other people on your team feel like they’ve been excluded from your inner circle. Be willing to open the door for

everyone, whether it’s your chief financial officer or your janitor. Be willing to say hello to everyone, whether it’s your vice president of marketing or a data entry clerk. If you treat your people well, they’ll

certainly want to stay with you. When your people see that you have the kind of character that extends the same courtesy to everyone, they will want to follow you all the more.

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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they feel like they’re taken care of financially. They do care about money ... but money isn’t all they care about. Money isn’t everything. All things being equal, people would prefer to work for an organization that they feel serves a larger purpose. As leaders, they look to us to tell them whether or not our organizations do just that. Do you clearly communicate on a consistent basis the larger mission of your organization? If not, your people may being to feel unfilled in their work. If you want your people to love what they do, you’ve got to show them that they’re doing something work loving. Provide a larger purpose for your people to serve. One of the most common reasons people leave a company is because they feel like they can no longer move up in the organization. “Opportunities for advancement” is the number one reason why people start looking elsewhere. As leaders, our people look to use to communicate to them the pathways that are available for them to grow in the organization. If we’re not showing people how they can become successful with us, they will start looking for someone who will. So, what about you? Do you offer training and professional development opportunities for your people? Do you discuss with your employees their career goals and objectives? If so, do you try to make accommodations so that your people can reach those goals in your organization? If you can show your people a path to success, they will be more willing to walk it in your organization. One other thing people expect from their leaders is the willingness to handle difficult problems. As leaders in our organizations, we’ve got to be the ones to have the tough conversations and make the tough decisions. Is someone on the team dragging everyone else down? We’ve got to be willing to confront them. Is there something unethical going on in the organization? We’ve got to have the courage to call it out and put a stop to it. If we demonstrate to our people that we’ve got the courage and strength to handle those difficult situations, we’ll gain their respect and they won’t want to work for anyone else.

Systems Will Improve Your Production, Recruiting and Retention By Steve Rennie

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echnology has come a long way in recent years. Nobody can argue that a tremendous impact has been made to our business and personal lives via Web products and apps on mobile devices. That push has also brought strong business applications, including recruiting and relationship management tools, to sales leadership in the mortgage industry. Applicant Tracking Systems (ATS) are common in most large organizations. ATS’s are great for active/non-sales candidates and when posting jobs in which candidates apply. Forwardthinking organizations are incorporating robust CRMs, most commonly used for managing relationships with referral partners and past customers. However, the most prevalent platforms being used for recruiting production talent are still Excel spreadsheets (you know who you are), LinkedIn, and the good old fashioned contact list on your phone. While each of these provides a solution to certain parts of the process, none of them individually provide a single end-to-end solution for sourcing, attracting, onboarding and retaining production talent. Attracting proven producers with transferable books of business and leaders who have a “rolodex” of those originators is no small task. These people are heavily recruited by your peers and competitors and they aren’t looking for a job. Everyone knows where to find them, not everyone knows how to approach or engage them. Recruiting this group of talent successfully requires a proactive process and many organizations fall short due to some key challenges/problems. These challenges include: 1. Difficulty finding time 2. Lack of organization 3. Lack of accountability As much as these are THE challenges, they are also THE opportunities. So, how can you create opportunity to train and position those in your organization that desire to grow their team, offset dips in production, or fight natural attrition by growing their team in the branch or area managed? Here is where systems create solutions to the problems: 1. Time blocking: Critical discipline for long-term success. 2. Organization: Just like MLOs, clients and referral partners, a database to track a relationship over time. 3. Pipelines/key metrics: Defining your goal, and measuring your activity to your goal will help you accomplish your goal. Model Match launched in 2014 as an innovative platform supporting individual and team hiring goals for mortgage origination companies. The solution incorporates processes, best practices, and proven methodologies for sourcing, attracting, hiring, onboarding and retaining production talent. In addition, the platform is coupled with live coaching to facilitate recruiting best practices in an effort to strengthen an organization’s overall recruiting “muscle.” This helps our clients better achieve strategic growth goals. Contact us to learn more at ModelMatch.com/See-It/. 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

heard on the street

continued from page 43

Churchill Mortgage Continues officer, will manage the new branch. Expansion With Third “We are pleased to welcome California Branch this new branch led by Gary and Brody,” said Larry Sutton, division president of Element Funding. Churchill Mortgage has expanded “Our goal at Element Funding is to stay true to the culture of each into Northern California with the community as we continue to opening of its third branch in the expand in the state, and to help state in Yuba City, Calif. families achieve their goal of In September, Yuba City was homeownership through a positive recognized among Realtor.com’s and personal experience.” “20 Hottest Markets” in the U.S., Wiseman was previously a loan based on the number of days a home spent on the market and the officer with Regions Bank before joining the Element Funding team. number of views each listing He is joined by Schultz, who has received on Realtor.com. The 16 years of experience in both the lender’s newest branch ensures that its services will be available to wholesale and retail mortgage industries. borrowers in the greater “We are proud to be part of a Sacramento area. Nick Williams, area manager for team of professionals who truly care about hard work, the Churchill Mortgage in California, customer experience, and being a will leverage more than two decades of industry experience to leader in the industry,” said lead the branch. In addition, Home Wiseman. Loan Specialist Willie Willis and QuestSoft Partners Client Experience Manager Janell With The HMDA Academy Willis will work with local homebuyers and borrowers to advise them on the best mortgage product for their needs. The lender established its presence in California with the opening of its first branch in the state in Orange, QuestSoft has partnered with Key Compliance Services, creators of Calif. in January 2014, which The HMDA Academy, to provide Williams also manages. In June 2015, Churchill opened its second their Compliance RELIEF customers with a complete suite branch in San Diego. of informational and multimedia “Northern California boasts tools that complement their robust beautiful landscapes and climate, and industry leading platform. making it a very attractive place The addition of The HMDA for prospective homebuyers,” said Academy knowledge base Mike Hardwick, president of provides QuestSoft’s Compliance Churchill Mortgage. “The state is RELIEF HMDA customers access also the largest in the country in to up to the minute training and terms of population and thirdconsulting on the new CFPB largest in size. Establishing a HMDA rules which will begin to be branch in Yuba City provides us implemented in 2017, culminating with a local presence, which is in 2018. These changes represent critical to our ability to serve the most sweeping revisions to the borrowers and make the real Home Mortgage Disclosure Act American dream of (HMDA) since its inception in homeownership available to a 1975. Training is provided to users larger set of families and via webinars, all of which are individuals.” recorded and available for unlimited viewing. In addition, Element Funding Opens New Compliance RELIEF HMDA Florida Branch in Sarasota customers will gain access to a Element Funding, a wide variety of job aids, charts, division of and other tools to tackle the complexities of the HMDA Primary Residential modifications. “The CFPB HMDA rules dictate Mortgage that data integrity, staff training Inc. (PRMI), has opened its first branch and accountability, as well as detailed procedures, be at the office in Sarasota, Fla. Gary Tuorto, area sales manager; Brody forefront as we approach 2018,” Wiseman, sales manager; and continued on page 50 Christopher Schultz, senior loan

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Sorry To Spoil Your New Year’s Wishes … A Trump Administration will not end the CFPB By Andrew Liput

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e now know that our next President will be New York real estate mogul Donald J. Trump. Immediately after the election, the industry was buzzing with articles predicting that a Trump Presidency would mean the death knell for the Consumer Financial Protection Bureau (CFPB). It will never happen for several reasons. First, Mr. Trump did not campaign on a platform to decrease consumer protections in financial transactions. His support for business growth might be a signal to reduce some of the industry’s regulatory morass to help reduce costs and increase lending opportunities. However Mr. Trump did not run a typical Republican campaign—he was more of a nationalist/populist candidate. His appeal went beyond typical business interests to working and middle-class Americans concerned about the economy, government expansion, and “ruling elites,” among other issues. Eliminating an agency whose stated purpose is to protect consumers from unfair, unethical and self-serving finance industry practices is not a populist position. Second, the jury is out whether President Trump can legally remove CFPB Director Cordray and exert influence over how the CFPB will operate. While the recent PHH decision signaled that at least one court considered the independent management structure of the CFPB unconstitutional, in that it concentrated too much power into the hands of one person, unelected and without executive branch supervision, that decision is presently being appealed and an affirmation of the lower court ruling is not guaranteed. Third, the CFPB does some really good work. While we may not want thousands of pages of new regulations, and occasionally the Bureau has acted as if it has little practical understanding of how the mortgage industry operates, the truth is that consumers have been better off with the Bureau in place. The CFPB has addressed real issues regarding the need for transparency, accountability and quality lending practices; in a moment of honest reflection, seasoned industry professionals must agree that regardless of their concerns these initiatives made sense. From where we sit in the ivory tower of Secure Insight, this also means that vendor management rules are unlikely to change. Even the most recent “clarifications” regarding thirdparty servicer provider risk management have not changed the basic premise that lenders who expose their funds and a consumer’s non-public personal information (NPPI) to strangers must be accountable for doing so. This means knowing who your vendors are, monitoring them for risk and cutting off harmful relationships before a consumer suffers injury or loss. While a Trump Presidency will undoubtedly bring us many interesting moments, the elimination of the CFPB and its focus on consumer protection will not be one of them. You heard it here first.

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

heard on the street said Leonard Ryan, president of QuestSoft. “Through the combination of Compliance RELIEF’s automated error correction routines and QuestSoft’s robust industry integrations, The HMDA Academy adds critical informational infrastructure as our customers prepare for their HMDA challenges. The HMDA Academy enriches the customer experience by emphasizing an ardent understanding of the new regulation, while focusing on best practices for maintaining a solid data testing and submission process moving forward.” The agreement will provide eligible QuestSoft customers with complimentary access to these resources through March, 2019 to help ensure that their initial submission under the new rules is completely compliant with the CFPB intent and ruling. “We designed The HMDA Academy as a port in the storm of ever expanding changes to HMDA,” said Kathleen Blanchard, president of Key Compliance Services. “The synergies of The HMDA Academy and Compliance RELIEF allow for a full functioning automated compliance system, the likes of which our industry has never seen.” LendingQB Unveils New Brand

LendingQB is launching a new brand as part of a strategic initiative to focus on “adoptimization,” a process that helps lenders streamline their processes and continuously improve their lending practices by optimizing the use of technology. LendingQB’s goal is to move beyond just providing innovative products to create strategies that enable lenders to capitalize on their technology. Unlike many one-size-fits all mortgage LOS systems, LendingQB helps lenders get the most of their solution by partnering with multiple best-ofbreed partners. The strong integrations built into the industry’s leading third-party software providers enables lenders to build the LOS that best suits their needs. “We created this idea of “adoptimization”–a portmanteau of “adopt and optimization”–so

continued from page 48

our users could not only have access to best lending technology, but so they can also use that technology to its fullest capabilities to strategically improve their processes,” said Tim Nguyen, co-founder of LendingQB. “We share the same goals are our customers. We want to help them create better lending practices and better serve our nation’s housing market.” LendingQB is launching a complete revamp of their branding and Web site. The new site provides visitors with a streamlined layout to provide regularly updated content for both prospects and customers. The company is also rolling out a new logo, which reflects the lean lending approach to building a best-of-breed technology LendingQB aims to reduce lenders’ loan origination costs, while taking the necessary precautions to ensure the loans are compliant. LendingQB also helps lenders implement an efficient and effective LOS solution within six months, rather than spending several years trying to fine-tune a solution. “Our team strives to provide the best service and counsel to lenders. We give them the ability to use the technology that brings the most value to their company,” said Nguyen. “Our new Web site and public-facing brand materials will only support our focus on providing valuable information and innovation to lenders.” New American Funding Opens New Arizona Branch

New American Funding has announced that it has expanded its Western territory with a new Arizona location in Oro Valley. Spearheading this new venture is seasoned mortgage professional, Roy Franco, who will serve as branch manager. A Tucson native and U.S. Navy veteran, Franco looks forward to providing excellent customer service to his hometown and fellow military community. He plans to leverage his mortgage expertise to guide consumers through the complexities of the loan process. “Your home is your biggest investment,” said Franco. “It’s important to work with the right continued on page 65

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NMP Mortgage Professiona Ralph Rosynek Senior Vice President of the U.S. Division and Chief Information Officer

Moneyhouse Inc. BY PHIL HALL

alph Rosynek is senior vice president of the U.S. division and chief information officer for Moneyhouse Inc. He is also considered to be one of the most prominent figures in the reverse mortgage industry. National Mortgage Professional Magazine spoke with him regarding his career and his view on the evolving state of the reverse mortgage market.

How did you get into the mortgage profession? Was this your original career choice? I started in mortgage banking in the mid-1980s. In early 2002, I switched from traditional mortgage banking to exclusively reverse mortgage banking. My family background is in banking, as my dad was in consumer banking for more than 50 years. How did you get involved with Moneyhouse? I had a forced retirement from Reverse Mortgage Solutions Inc. when Walter Investment Management Corp. acquired the company and brought in a new management team. I then went into consulting work in the reverse mortgage field. Moneyhouse is headquartered in Puerto Rico. It is a wellestablished, 20-year-old, privately-owned mortgage banking business, and David Levis is the principal. I had known David and learned that he was interested in expanding his company stateside. We talked, put together a plan, and I decided

to go back into employment. It has been a great opportunity. Moneyhouse is in the forward and reverse mortgage business and operates as a direct lender in addition to being a Ginnie Mae issuer for both loan product types and offers retail, wholesale and correspondent opportunities for consumers and business partners. Unique to Puerto Rico is the fact that all transactions are done in Spanish. Many aspects of the Puerto Rican business side have been able to assist our U.S. expansion and create an important niche for usâ&#x20AC;&#x201C;we have a fully bilingual staff with Spanish documentation options and support. There is a large percentage of Hispanic potential borrowers and homeowners in the U.S. that are underserved, largely because of language. We can work with Hispanic borrowers and help make mortgage transactions much more comfortable for them in addressing their needs. Where is the reverse mortgage market today? Less than two percent of eligible

borrowers for this product have accessed a reverse mortgageâ&#x20AC;&#x201C; availability and product knowledge/education are key issues. Due to industry efforts, reverse mortgages are moving from a niche to a more formal product in the market. It is an untapped opportunity for mortgage lenders, but reverse mortgages are not a new product. Reverse mortgages have been around since the late 1980s, however, there has been more interest in the product over the last three years, thanks in large part to an influx of Baby Boomers looking at a reverse mortgage as retirement planning component. How do you respond to negative media coverage of reverse mortgages? Unlike a forward mortgage, a reverse mortgage borrower needs to be educated, rather than being sold on the product. Product access is limited in many areas of the country and many homeowners and their trusted advisors do not have the

product knowledge or assistance available to right fit their needs for a reverse mortgage without the assistance of an experienced lender and origination staff. Some media negativity insists that the product needs to be very carefully regulated. Like any mortgage product, product knowledge, protections and suitability to needs must be researched and understood by potential borrowers and many times, their trusted advisors, in order to make an informed choice. Education, resources and product assistance decision components are becoming much more readily available. The reverse mortgage is not always the right choice or decision for some borrowers. In the past to a larger degree, there were various misconceptions surrounding the reverse mortgage product that have and continue to be dispelled by reverse mortgage providers through education, media coverage and growing product embrace by financial services providers.

onal of the Month

Last year, television evangelist Pat Robertson (of all people) spoke about how taxpayers foot the bill on reverse mortgages. How do you react to that? The product has been evangelized! Seriously, as with anything, you can take a particular aspect, either negative or positive, and lay claim that it is impacting the consumer, borrower, lender, the originator or the taxpayers. Yes, there was impact to everyone from the past mortgage crisis. But in today’s market, the reverse mortgage ultimately benefits neighborhoods and the overall housing market by keeping borrowers in their homes, allowing for the purchase of a new home and many times not requiring them to access other taxpayer funded programs for housing assistance. Having just turned 62 this past March–I don’t use the term “old,” I used “seasoned”–and I can attest that this product is a solution for many Baby Boomers seeking retirement planning

alternatives. It is not appropriate for all eligible borrowers, but an option for many to consider and evaluate. What do you see as the nearterm challenges facing the reverse mortgage industry? There will be pressure on originators to pursue other products as the fixed rate and forward mortgage market bends and turns. We will see quite an influx of reverse mortgage new players, especially as financial planners and real estate agents gain more confidence in the reverse mortgage space and understand how the product works–and becomes a useful tool for their business strategy. Looking back on your career, what do you see as your greatest challenges and greatest accomplishments? The biggest challenge comes in the role that we play as mortgage bankers and loan originators. This involves the constant change in consumer needs and philosophies, which creates the

need for us to be flexible and welleducated. But as more consumers demand diversity in products, there are more regulatory demands put upon us. And sometimes, those regulatory demands do not work for the benefit of consumers. As for accomplishments, I have never been as satisfied with a product response as I am with the reverse mortgage. I have received more hugs, kisses and warm embraces from seniors because of their satisfaction and the relief the reverse mortgage provides! What do you believe 2017 will hold in store for the mortgage industry? We are now facing another set of challenges, greater efficiencies and access to product. Today’s

digital movement requires us to be much more resourceful in how we market and make products available. The greatest future impact could be the paperless environment combined with new product and methodology innovation. For some companies, this will be their greatest hurdle. I would not be surprised if we see an increase in the workforce needed to make a digital product successful. Outside of your work, how do you spend your leisure hours? When I’m not traveling and working, I spend a lot of time at my lake house enjoying family. I enjoy water sports and gardening, and I’m fortunate to have grown children producing grandchildren–which is adding new pages to my book of life!

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

t is not unusual for mortgage professionals to be actively involved in non-profit organizations and charitable campaigns, but few have gone as far as Robert Scheer in running a non-profit full-time while maintaining a parallel full-time position within the mortgage industry. To his mortgage world peers, Robert Scheer is known as the chief strategy officer for Landmark Network Inc. To a wider public, he is the founder and head of Comfort Cases, which provides children in foster care with a backpack or suitcase filled with personal care items including toiletries, underwear, socks, pajamas and toys. “We are one of the few 100 percent nonprofit charities left in Maryland,” said Scheer, who puts 25 to 30 hours per week into Comfort Cases. “Every penny that comes into our charity goes to our charity. We have 19 people who volunteer to work with us—we have no paid staff … even our board is all volunteer.” Scheer has firsthand knowledge of the foster care system, having spent his childhood therein. In his adulthood, he adopted four children from foster care. In focusing on this subject and the youngsters within the system, Scheer acknowledged that he is breaking a taboo by giving attention to a subject that is aggressively ignored by the mainstream media and the parenting-focused media. “I feel that foster care and ‘The Invisible Children’ have been rejected because if we talk about it, then we will realize we have a problem,” he said, adding that he was uncertain how his colleagues in the mortgage field would react to this endeavor. “I never wanted to bring attention to myself—and I was worried by

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what people in the industry might think about me. But I was amazed by the overwhelming support that people in the industry gave me.” Comfort Cases began operations in 2003 by distributing 300 kits to children in foster care in the Maryland market. As of this year, it has distributed approximately 23,000 cases in seven states and the District of Columbia. And while he was not looking for any special recognition for his work, within two years of beginning operations Scheer received the Dunkin’ Donuts Community Hero Award while he and his daughter Amaya were profiled in a cover story for American Girl Magazine. However, the latter honor created an unexpected backlash: The magazine also profiled the full family, including Scheer’s husband Reece. An advocacy group called One Million Moms objected to the presence of a same-sex couple as parents and called for a boycott of the American Girl company— which, of course, focused even more attention on Comfort Cases and Scheer. Looking back on the controversy, Scheer saw the silver lining to the negativity directed at him and his family. “It truly has made our family stronger and more out spoken,” Scheer commented. “And we realized it is not okay to stand on the sidelines and complain, but to get into the game!” The outpouring of support for Scheer, his family and Comfort Cases culminated this year another magazine profile, this time in celebrityfocused weekly People. As someone who was initially uncomfortable about being in the spotlight, Scheer was happily surprised at the support he received.

Shedding Ligh

Robert Scheer of Landmark Ne By By Phil Phil Hall Hall

“It is very humbling when I have people stop my family and say thank you,” he said. “It makes it worth all of the backlash. But, you see, this is not about pounding your chest, but about doing what is our responsibility–and that is giving back.” Scheer’s goal for Comfort

Cases is to bring its distribution network nationwide. He added that Landmark Network had graciously offered financial support for Comfort Cases, it was not looking for publicity mileage from its association with Scheer’s prominent non-profit work.

“I personally believe that in order to communicate something effectively, nothing beats the phone or even an in-person meeting.” But Scheer insisted that he was hardly alone within the mortgage industry when it comes to going the proverbial extra mile to give something back to the wider society. “We’re seeing the industry start to do it more,” he said of the mortgage profession’s

sense of altruism. “The mortgage industry was built because of its sense of community, but somewhere along the way, we forgot that we are about more than selling homes and rates and refinancing. This is my 28th year in the industry and

I’ve never seen industry give back as it has in the last 24 months.”

Comfort Cases can be found online at ComfortCases.org.

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

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National Mortgage Professional Magazine’s 40 Under 40 The 40 Most Influential Mortgage Professionals Under 40

n our seventh annual “40 Under 40” feature, you will find a list of the top mortgage professionals under the age of 40, as voted on by their peers, who exemplify professionalism and top production in today’s housing market. Despite the rough waters of the U.S. economy and the ever-shifting landscape known as the mortgage industry, these 40 professionals have persevered in a time of regulatory uncertainty. In assembling this list, we at National Mortgage Professional Magazine took some criticism when we began this endeavor. Many felt a list of this nature ignored many, and others felt that a list of this type is a “thing of the past,” while some even cited age discrimination, but we firmly stood by our decision to assemble this group. Like their industry pioneers before them, these individuals are the ones who carried the torch of professionalism in the year 2016 and beyond. We’d like to congratulate all of the following individuals named to our “40 Under 40” list for 2016—in no particular order but alphabetical—and thank all the nominees for their participation in our “40 Under 40: The 40 Most Influential Mortgage Professionals Under 40” feature.

Tony Ameti

Chris Anderson

Founder/SVP of Mortgage Partnerships Best Rate Referrals • Clearwater, Fla. & Las Vegas BestRateReferrals.com Raymond Bartreau founded Best Rate Referrals (BRR) in 2005 and has grown the company into one of the leading marketing agencies for the mortgage industry. Best Rate Referrals has provided profitable marketing campaigns for thousands of mortgage brokers and banks, large and small, such as live transfers, Internet leads, direct mail and targeted list services. Raymond and BRR have been honored multiple times by Inc. Magazine, including the magazine’s 2010 list of the nation’s 500 fastest-growing companies. Raymond has also been honored multiple times by National Mortgage Professional Magazine for his contributions, and is the “go to” premier marketing mind in the mortgage industry.

Jenay Bowen Sales Manager/Senior Loan Officer Summit Funding • Plano, Texas TheJBowenTeam.com Jenay Bowen graduated with a BBA in both finance and real estate and has been in the industry since 2003. Before entering into the mortgage business, she spent several years in the banking industry. Therefore, crossing over from banking to loan origination was an easy task and helped build a solid foundation in permanent lending. Jenay has extensive underwriting experience with all types of mortgages. This experience allows the opportunity to help determine which loan is the most beneficial in meeting individual needs. Her commitment, knowledge, and expertise will help make the loan process as simple and stress-free as possible.

Andy Brikho President/CEO BRIK Home Loans • San Diego, Calif. BRIKLoans.com Starting as a loan officer at the age of 19, Andy Brikho has had more years of experience than much of his competition. This wealth of experience and his strong relationships opened the door to make his dream of founding his own mortgage bank, BRIK Home Loans, a reality. As a first generation American, he is proof that hard work, dedication and integrity allow anyone to achieve the “American Dream.” BRIK Home Loans strives to provide the best home loan experience for its clients and partners. The continuous referrals and repeat clients are proof that BRIK is the local lender that people trust.

Chris Brower Mortgage Banker Jersey Mortgage Company • Parsippany, N.J. ChrisBrower.JerseyMortgage.com Chris Brower began his career five years ago during one of the worst recessions we have seen. He credits Jersey Mortgage for grooming him to double his business every year since he started. Chris is a member of the Passaic County Board of Realtors and a member of the Young Professionals Network for New Jersey. These organizations have increased his business tremendously. Chris feels that, by far, the greatest reward of this business is the look on his clients’ faces when they reach the closing table.

William J. Chudy, CFA EVP, Portfolio, Pricing & Products Parkside Lending • Buffalo, N.Y. ParksideLending.com William J. Chudy, CFA joined Parkside Lending LLC in February 2013 as an executive vice president. He has more than 15 years of industry experience managing credit, liquidity, interest rate risk, capital markets, pricing, and loan production. Prior to joining Parkside, William was the asset liability manager at M&T Bank in Buffalo, N.Y., with responsibility for managing interest rate risk and the mortgage portfolio. Originally from Buffalo, William graduated from the University of Buffalo. He is a chartered financial analyst (CFA) and member of the CFA Society of Buffalo. He lives in Western New York with his wife and four children.

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Senior Software Architect Quandis Inc. • Rancho Santa Margarita, Calif. Quandis.com Mona Bowerbank has been in the industry for more than 16 years. As senior mortgage software architect at default management technology provider Quandis Inc., Mona has developed enterprise-class software solutions with a focus on the servicing side of the mortgage business. Mona has helped automate complex workflows for business functions such as foreclosures, valuations, short sales, default technology and more for servicers, lenders, banks, GSEs, foreclosure attorneys, and third-party providers. She also worked on LenStar’s Web-based attorney referral system, which is still widely used today. Previously, Mona worked for London Bridge Group, later acquired by Fair Isaac (FICO).

MORTGAGE

Chief Administrative Officer Mortgage Capital Trading • Santa Rosa, Calif. MCT-Trading.com Chris Anderson is an experienced public and private sector executive with expertise in regulatory compliance, organizational development, project management and technology integrations. Chris joined MCT in 2012 to organize and grow MCT’s Outsourced Lock Desk Division. After successfully establishing the Division as the industry standard for outsourced lock desk services, his responsibilities grew to include overseeing all technology integrations and administrative operations. Chris is a member of the MBA’s Residential Mortgagee Curriculum Advisory Committee, the CMBA’s Technology & Marketing Committee and holds a BA in public policy from the University of California, San Diego.

Mona Bowerbank

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Vice President Neighborhood Loans • Lombard, Ill. NeighborhoodLoans.com Tony Ameti serves as Neighborhood Loan’s vice president. His industry expertise, coupled with his keen ability to translate market expansion strategies into an aggressive yet feasible fiscal plan, is evident in the immense success Neighborhood Loans has experienced since its inception. Providing true leadership is contingent on continuous evaluation of short and long term strategic financial objectives; it is this very leadership embraced by Tony that has ensured Neighborhood Loans’ exponential growth. Tony oversees the company’s financial operations, including timely financial planning and analysis, financial reporting, financial forecasting, banking and warehouse lines, funding/sale of mortgage notes, internal audit, tax and treasury.

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James Cullens

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Sales Manager TagQuest • Seattle, Wash. TagQuest.com James Cullens joined TagQuest in 2012 as marketing director, leading the industry in direct marketing trends. James is a key player in the mortgage marketing world and is instrumental in the success of TagQuest and their clients, while keeping to the top performing marketing trends of the time. He is passionate to help others grow their business and stay at the head of the mortgage industry. He has more than 15 years of experience in sales, marketing and finance. TagQuest is a full-service marketing firm dedicated to mortgage companies reaching their goals. James lives in Seattle with his wife, Sarah and daughter, Clara.

Jason Dickinson Senior Account Executive CIC Credit Reports • Palm City, Fla. CICCredit.com Jason Dickinson has been an account executive at CIC Credit for close to 12 years in the Florida, Georgia and Carolina markets. Previously, he worked at Equifax for five years. He is proud to be a board member of the Florida Association of Mortgage Professionals Broward Chapter. Also, he is a member, and past board member of the Mortgage Bankers Association of South Florida. Jason graduated from the University of Florida, with a masters in international business and a bachelor’s of science degree in business, focusing on marketing. Jason loves spending his free time with his wife and two young daughters.

William Fisher Senior Vice President, Loan Origination & Marketing Citadel Servicing Corporation • Irvine, Calif. CitadelServicing.com William Fisher leads all loan origination (wholesale, retail, correspondent) and marketing operations at Citadel Servicing Corporation (CSC) with 13-plus years in the mortgage finance industry. Armed with a background in marketing and track record of introducing new products to market with quantifiable success, William possesses a comprehensive foundation of building sales teams with winning cultures critical to success. Before joining CSC, he led business development at Poptent, an online crowd-sourced video marketing content start up. Prior to the deep dive back into marketing, William developed his loan craft and team management skills at First Street Financial, Equifirst and LendingTree Loans.

AJ Franchi Chief Operating Officer Gold Star Mortgage Financial Group Ann Arbor, Mich. GoldStarFinancial.com AJ Franchi, chief operating officer for Gold Star Mortgage Financial Group defines meteoric rise. From intern to director of retail operations, then CIO, and now COO at the age of 30, AJ has oversight over all business efficiency, ensuring Gold Star’s continued sustainable growth. A pioneer in automating workflows resulting in off-the-charts improvement in loan process, secondary, marketing and communications, AJ is considered a thought leader in innovation technology-now consulting nationally on behalf of Ellie Mae.

Kevin R. Dolan Branch Manager AnnieMac Home Mortgage • Flanders, N.J. Annie-Mac.com Kevin R. Dolan is a 13-year veteran of the mortgage industry and currently co-manages one of AnnieMac’s top branches in the country. Kevin’s leadership and high level of performance is backed by experience with a mentality that you must be all in to be at the top. Having been in many seats in his career, Kevin is able to offer a well-rounded and knowledgeable approach to his clients, referral partners and team. Kevin believes in being consistent and providing an experience you can rely on. Personally, Kevin enjoys spending time with family, cooking, fishing, boating and traveling.

Matt Dorsey Senior Loan Officer Starkey Mortgage • Charleston, S.C. StarkeyMTG.com Matt Dorsey has a strong commitment to the community he serves. With 13 years of lending experience and an MBA from the Citadel, Matt has helped thousands of clients realize the goal of homeownership and is a top performer at Starkey Mortgage. Additionally, he heads up an annual toy drive benefiting Toys for Tots, was named 2015 Man of the Year for the Charleston Leukemia and Lymphoma Society, volunteers with Cystic Fibrosis Foundation and the South Carolina Aquarium Ocean Alliance and partners with MARSOC Foundation. Matt and his family live, work and serve in Charleston, S.C.

Andrea Frank Vice President United Shore • Troy, Mich. UnitedShore.com Andrea Frank’s drive fueled her early journey into the industry to now leading one of UWM’s largest operational teams. “Everything can be done faster, better, more efficiently … everything in the world,” Andrea said. Under Andrea’s leadership this year, her teams have increased output by more than 25 percent, due to enhanced tools, resources, and training, ultimately benefiting mortgage brokers immensely by cutting turn times by hours and increasing service levels to all-time highs. “In this industry, the one thing that’s constant is change,” said Andrea. “I view change as growth, a necessity to always getting better, learning and being the industry leader.”

Vanessa Frisch Senior Mortgage Banking Consultant Wintrust Mortgage • Eagan, Minn. HomeLoansByVanessa.com Vanessa Frisch has been a mortgage professional for 10-plus years, and is a top-15 female mortgage originator for units at Wintrust Mortgage, one of the largest mortgage firms in the United States. She is a senior mortgage banking consultant for Wintrust Mortgage, owned by Wintrust Financial, headquartered in Rosemont, Ill. Vanessa is also a member of Cindy Ertman’s Mortgage Mastermind, an exclusive team of next generation mortgage professionals, and one of the top mortgage originators in the United States who is 30 years of age and under.

Kelly D. Haney

Justin Hill

Daniel L’Altrella

PROFESSIONAL

First-Time Homebuyer Specialist L’Altrella Lending Group • Shelton, Conn. LLGSite.com Daniel L’Altrella is a hard-working and very driven loan officer who has been in the mortgage business for 12 years. He treats every client like they are family and meets 95 percent of all his clients, striving to give each client the Disney World experience. He is always a phone call away, and prides himself on honesty and hard-work. “I am a 100 percent referral company who does not pay for leads or use billboards for business,” said Daniel. “All of my business comes from past and present clients and word of mouth. That is why I am so successful.”

MORTGAGE

Founder & Managing Partner 314 Capital • Washington, D.C. 314CapitalPartners.com Justin Hill is an entrepreneur and started in residential mortgage lending at the age of 19. He launched the private finance firm, 314 Capital, in 2015 to address the lack of financing available to residential real estate investors and developers for acquisition, renovation and construction, which has grown from three (Maryland, Virginia and the District of Columbia) to now 16 states across the nation. Later in 2015, they added financing for small balance commercial properties up to $5 million to their product line. For 2017, they will be launching a new product line for commercial properties up to $30 million.

Regional Sales Manager REMN Wholesale • Newport Beach, Calif. REMNWholesale.com Noshin Khoja is currently regional sales manager for REMN Wholesale. She also has her real estate and NMLS licenses. She has years of experience in the mortgage industry in senior leadership, including RSM for Maverick Funding (currently Home Point Financial), Pacific Mercantile and Pacific Banc. She has served as chairman of the western region for the Aga Khan Foundation USA since 2015. She was vice chairman since 2012. Noshin has a bachelor’s of economics degree from the University of California, Irvine. NATIONAL

Branch Manager Mortgage Financial Services Flower Mound, Texas KellyDHaney.com With a focus on increasing sales volume and improving business processes, Kelly D. Haney is currently a branch manager and RMLO with Mortgage Financial Services LLC. His responsibilities include supporting the sales and operations teams, managing the client database, and training mortgage loan originators on products and processes. Additionally, he provides first-rate mortgage products and complete support to customers before, during, and after their closings. Kelly is 2016 president of the North Texas Association of Mortgage Professionals and an active member in the Bankers Association and other trade organizations. Kelly enjoys providing up to date education to agents/clients on current trends.

Noshin Khoja

Ashley Hutto-Schultz

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Team Lead, Senior Account Executive United Wholesale Mortgage • Troy, Mich. UWM.com A relationship-driven mortgage professional with a proven track record of helping mortgage brokers elevate their business, Danny Marogy has become United Wholesale Mortgage’s All-Time Top Sales Producer. While he may be young, Danny runs his business like a seasoned veteran. He is valued by clients and UWM team members for his extensive industry knowledge, candor, mutual respect, and time he invests in them. Danny was recently recognized internally as a UWM Pillar Award winner for being “Relationship Driven, Not Transition Driven” because of his elite client service.

2016 2015 n National Mortgage Professional Magazine n DECEMBER 2014

Danny Marogy

President GSF Mortgage Corporation • Brookfield, Wis. GoGSF.com As president, Chad Jampedro oversees the operations, direct marketing, production and secondary marketing departments of GSF Mortgage Corporation. His exposure to the multiple aspects of the lending industry at a high level has contributed to his unique perspective and the ability to associate the duties and objectives of each department into a service level design and operational plan. Chad is interested in the exchange of ideas that develop insight and transparency in relation to the mortgage finance industry’s products, policies and projections. Chad’s specialties include direct personnel management, service level design and results tracking, secondary marketing management, pipeline hedging, consumer-direct marketing, along with technology training and implementation.

President Neighborhood Loans • Lombard, Ill. NeighborhoodLoans.com Reno Manuele serves as president of Neighborhood Loans, an FHA-direct endorsed residential mortgage lender headquartered in Chicago. Since Neighborhood Loans’ inception, Reno and his partner, Tony Ameti, have incorporated an intuitive marketing approach by implementing industry leading technologies. Having realized the effectiveness of targeted marketing campaigns, Reno has since built out an in-house marketing department. This team enables loan officers and real estate agents to become top producers, while always keeping the consumer’s best interests in mind. This initiative has resulted in higher customer satisfaction rates, more educated clients and a foundation for inevitable growth.

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Chad Jampedro

Reno Manuele

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Director of Compliance Castle & Cooke Mortgage • Salt Lake City, Utah CastleCookeMortgage.com Ashley Hutto-Schultz’s consumer financial services career began in the aftermath of the recession at the Federal Reserve Board of Governors, where she worked on matters related to people facing lifechanging financial crises. Later, she worked as a law firm attorney helping consumer financial services companies navigate regulatory compliance matters in the wake of Dodd-Frank. These roles provided her with a sense of understanding and responsibility regarding parties on each side of the mortgage transaction; today, that perspective drives her work to develop and implement comprehensive and practical compliance solutions as director of compliance at Castle & Cooke Mortgage.

Ly Kao Nhiayi

Katy Parsons Mortgage Advisor Finance of America Mortgage • Portland, Ore. FinanceOfAmerica.com/macadam Katy Parsons not only is one of the most brilliant minds the industry has ever seen, but she instantly can bring levity to any situation while representing a level of professionalism the industry has so desperately needed. Katy was instrumental in reviving the Mortgage Revolution conference, which has raised more than $50,000 for charity, while showcasing some of the industry’s leading edge technology and best practices. You can expect to see a lot more of this industry dynamo in the years to come!

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CTA LenderPrice • Pasadena, Calif. LenderPrice.com Ly Kao Nhiayi moved to the U.S. from France in 2004, where he graduated with a degree in computer science. He has worked in consumer electronics and transitioned to mobile and cloud development before joining forces with his two partners, David Alimi and Ly Kou Nhiayi and founding Cre8tech Labs, an umbrella company to LenderPrice (a Pricing and Product Eligibility and analytic platform for the mortgage industry). As a chief architect, he helped develop a platform to provide loan officers, brokers, lenders, retail/wholesale to compete not only in terms of technology, but also in terms of market intelligence.

Patrick O’Brien Chief Executive Officer LenderLogix • Buffalo, N.Y. LenderLogix.com A graduate of the University at Buffalo, Patrick O’Brien spent 15 successful years as a mortgage lender with M&T Bank. Always passionate about bringing innovative solutions to the mortgage business, in 2016 Patrick and his partners founded LenderLogix, a software company which uses data and analytics to help mortgage lenders more efficiently engage with their real estate partners. LenderLogix automates relationship management tasks and provides constant actionable business intelligence, allowing loan officers to cultivate their most high value relationships. Leveraging LOS integrations and mobile apps, LenderLogix brings best in class technology into the hands of the modern loan officer.

Christopher R. Picone President/Owner PRS Capital Group LLC • Bohemia, N.Y. Christopher R. Picone started as a telemarketer in college, was promoted to manager at 19, learned the business and has been running his own successful brokerage for close to 10 years. He believes the key to longevity in the mortgage industry is personal service. Processing all his loans from start to finish, he still finds the time to meet, sit down and discuss all documentation face-to-face with his clients. Chris was a member of 2012’s Top 40 Under 40 edition, and 2014 and 2015 Next 40 Under 40 Mortgage Professionals to Watch list.

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Jeremy Page Branch Manager/MLO Inlanta Mortgage • Greenfield, Wis. Inlanta.com & LoansByJeremy.com Jeremy Page started as an assistant at 18-yearsold, and he has held just about every position in the industry, working his way up to where he is today. He currently runs Inlanta Mortgage’s Greenfield, Wis. office with nine employees and they are the fourth highest volume branch for Inlanta year-todate. He has been awarded MPA’s Young Guns award consecutive years and he’s also received Milwaukee Magazine Five-Star Mortgage Professional Award and was been nominated again this year. “I love what I do and being able to help people achieve the American dream or accomplish their financial goals,” said Jeremy.

Jim Paolino Chief Executive Officer/Founder LodeStar Software Solutions • Hoboken, N.J. LodeStarSS.com After growing up around the mortgage and title industries, Jim Paolino founded LodeStar Software Solutions in 2013 at 27-years-old. Since that time, Jim has grown the company into a national provider of innovative compliance technology for the mortgage industry. Hundreds of banks, credit unions and mortgage companies utilize LodeStar on a daily basis to accurately disclose closing costs to their consumers. LodeStar has recently become part of Lenders Integrated Solutions, a provider of title and technology services. Through this affiliation, Jim hopes to provide an even wider range of services to lenders anywhere in the country.

Heather Harlan Price Owner Operator/Managing Partner Modern Mortgage • Austin, Texas ModernMortgage.com Heather Harlan Price, managing partner of Modern Mortgage, has helped put thousands of people into homes and considers it one of the greatest joys in her life. She served for three consecutive years as vice president of education for the National Association of Professional Mortgage Women (NAPMW) where her talents were used in the mortgage community in Austin from 2012-2015. Heather was also nationally recognized and awarded as an Education Innovator in Mortgage in 2012-2013. She also founded the Modern Mortgage “Flintstone Loan,” where a portion of the proceeds from every loan send hundreds of thousands of Flintstone Vitamins to Honduras.

Rob Purvis Senior Mortgage Banker/Partner VIP Mortgage • Tucson, Ariz. RobPurvis.VIPMTGInc.com Rob Purvis’s mortgage banking career began in 2007 after seven years pitching for the Chicago White Sox. His love and passion for helping others catapulted him very quickly to the top as one of the country’s top mortgage originators. Centered on Rob’s small-town, Midwest upbringing and philosophy, Rob repeatedly asks, “How can I help you?” Not, “How can you help me?” Applying this philosophy to the entire MVP Team has enabled them to earn and grow relationships with realtors, business owners and customers because of the level of trust they each put into the team’s beliefs.

Joe Puthur

Rajin Ramdeholl

Licensed Mortgage Advisor Angel Oak Home Loans LLC • Atlanta WesWoodruff.AngelOakHomeLoans.com Wes Woodruff joined Angel Oak Home Loans LLC in December 2011. He is an Atlanta native and graduated from the University of Alabama with a degree in finance and real estate. He has received numerous awards as the monthly, quarterly and annual top producer. He has also been a member of the 2013-2016 Leadership Council. Wes is a current member of the Mortgage Bankers Association of Georgia (MBAG). Wes lives in East Cobb, Ga. with his wife Lindsey and daughters, three-year-old Ella Reese and one-year-old Annie. He attends Johnson Ferry Baptist Church and enjoys playing tennis, golf and basketball, as well as working on projects around the house.

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Branch Manager Loan Simple Inc. • Las Vegas ArianaMortgageLoans.com Ariana Kay Veloz has been in the real estate and mortgage industry just over 20 years. As a branch manager and professional mortgage advisor, she focuses on client satisfaction. Her business is about service and she is not happy until her clients are happy; the service that she and her team provide is second to none. Ariana has experience in both the sales and operations sides of the industry. This knowledge enables her to provide her clients with a great understanding of what’s needed to create smooth efficient flow and quicker closing on their purchase or refinance home loans. “I truly love what I do,” said Ariana.

CEO Get A Rate • Elmwood Park, N.J. GetARate.com Michael I. Sema is an industry visionary and trailblazer, who started his career in 2004. In 2012, Michael’s fundamental belief in living a better life gave him purpose to transform and innovate the banking industry. By eliminating extrinsic motivating factors and providing honest, un-incentivized advice, he figured out a way to empower clients to make the right decision. Michael’s transparent Web site offers robust tools that finally reveal how much home to buy, not can buy. His vision to elevate the banking industry benchmark by servicing, supporting and protecting clients with a new standard of ethical lending has started a movement.

Ariana Kay Veloz

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Michael I. Sema

Vice President of Sales & Marketing Class Appraisal • Birmingham, Mich. ClassAppraisal.com Since helping to launch Class Appraisal as its first employee in 2009, Jon Tallinger has played several key roles throughout the company. His primary focus now is planning and leading the company’s growth initiatives. In 2016, Class Appraisal has already doubled their 2015 volume. By building seamless integrations and creating advanced solutions, Class Appraisal has built a reputation for offering the industry’s fastest turn times and highest service levels. Jon and his team have recently added several of the top lenders in the country as business partners, and are now working with 12 of the nation’s top 25 non-bank lenders.

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Owner Mortgage Geek LLC • Los Angeles MortgageGeek.Technology Jason R. Richardson specializes in referral partner marketing strategies and founded marketing technology vendor Mortgage Geek in 2011. Mortgage Geek has quickly become a preferred marketing provider for real estate companies and nationwide mortgage lenders including Mid America Mortgage, where Jason currently serves as the national marketing director. Jason recently became a founding member of the eCorrespondent Division at Mid America Mortgage. The Division is pioneering a complete digital mortgage process for independent mortgage bankers that includes eClosings with electronic promissory notes. Jason is actively seeking independent mortgage bankers looking to increase their efficiencies with a complete eMortgage process.

Jon Tallinger

PROFESSIONAL

Jason R. Richardson

Mortgage Loan Originator United Northern Mortgage Bankers Long Island, N.Y. UnitedNorthern.com Empowering those around her to achieve their dreams and goals of homeownership, Jacqueline Sendra is passionate about her career as a mortgage loan originator. With more than a decade of experience, Jacqueline is working to develop other top producing loan originators with the understanding that success has everything to do with helping others. Believing the future holds only the best of what’s to come for the mortgage industry Jacqueline is excited to see what the next generations of originators will bring into the profession.

MORTGAGE

Vice President, Private Client Division Meadowbrook Financial Mortgage Bankers Garden City, N.Y. MFMBankers.com Rajin Ramdeholl is vice president of the Private Client Division of Meadowbrook Financial Mortgage Bankers. Rajin oversees the daily operations of a thriving team and has to his credit, a series of successes in building dynamic mortgage lending teams throughout his career. He formulates and implements new marketing strategies and meets with brokers real estate agents and other prospective new clients on a regular basis. He specializes in working with major real estate agents builders and investors who are seeking expert help, but he also enjoys originating mortgage loans as well. With his educational, professional and financial background, Rajin is respected and trusted by his clients.

Jacqueline Sendra

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President Mortgage Coach • Irvine, Calif. Mortgagecoach.com Joe Puthur, president of Mortgage Coach, has more than 16 years of experience as a proven mortgage technology pioneer. Led by his philosophy that everyone deserves the insight and transparency to make a confident mortgage decision, Mortgage Coach was recently ranked first of the five musthave real estate apps by USA TODAY. Every day, 34 percent of the nation’s top one percent of producers deliver clear advice with Joe’s help. Ensuring access to affordable homeownership remains obtainable, Joe’s mobile innovations help lenders and real estate agents nationwide modernize their mortgage experience to educate millions of families about the benefits and total cost of every home loan option.

The Next 40 Mortgage Professionals to Watch …

Title

Katrina Cole

Business Development

Joel Davis

Senior Vice President

Brian Dietderich

Marketing Director

Scott Dubnoff

Vice President

Eric Egenhoefer

CEO

AJ George

SVP of Correspondent Lending

Amy Goldstein

Senior Loan Officer

Caleb Guillory

President/CEO

Andy Harris

President

Kelly Hendricks

Vice President

Jason Holter

Producing Branch Manager

Matt Humphrey

Co-Founder & CEO

LendingHome

Vincent Ingui

SVP of Retail Sales

AnnieMac Home Mortgage

Erik Janeczko

Head Coach/Business Development Strategist/Speaker

Shane Johnson

Owner

Matthew Jolivette

Owner/President

Associated Mortgage Brokers

Tim Kelly

Branch Manager

Highlands Residential Mortgage

Scott D. Kriss Esq.

President/CEO

Erica LaCentra

Marketing Manager

RCN Capital

Laura Lawson

Chief People Officer

United Shore

Erika Macias-White

Co-Founder and SVP of Operations

James MacPherson

President

Casey McGovern

President & Chief Production Officer

Bryan Miller

AVP, National Accounts

James Morin

Senior Vice President of Retail Lending

Matthew Moubray

National Sales Leader

Tim Nguyen

Co-Founder & CEO

Joshua Nieves

Senior Mortgage Loan Officer

Tom Pasckvale

Managing Partner

Erik Richard

CEO

Joy Sinegar

Mortgage Loan Officer

Ed Stojancevich

Residential Mortgage Loan Originator

Shaun Talbot

Branch Manager

Ali Vafai

President

The Money Source

Trishul Vaghani

President

Bluestar Mortgage Inc.

Chris Wash

Senior Loan Officer

Kimberly Weintraub

Executive Mortgage Banker

Serena Yang

Director of Marketing

Ron Zach

President

Ori Zohar

Co-Founder

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Due to the numerous submissions we received for the “40 Under 40” list, there are those who are making serious waves in the industry who could not be overlooked. They, like those on the “40 Under 40” list, will be leaders in the industry for years to come, so keep an eye out for the following mortgage professionals as they continue to shape the industry:

Company Inlanta Mortgage Inc. Freedom Mortgage Class Appraisal American Financial Resources Inc. Waterstone Mortgage CMG Financial BMIC Mortgage TagQuest Vantage Mortgage Group Inc. Delmar Financial Company Premier Nationwide Lending

Maximum Acceleration Booyah Mortgage

Kriss Law/Atlantic Closing & Escrow

HighTechLending Inc. Academy Mortgage Bay Equity LLC United Wholesale Mortgage Norcom Mortgage Polaris Home Funding BeSmartee Residential Mortgage Services Top Vine Mortgage Services LLC Landmark Network Inc. US Bank A&M Mortgage Group Finance of America

Guild Mortgage Atlantic Residential Mortgage Civic Financial Services NRL Mortgage Sindeo

Where Prime Lending Ends Citadel Servicing Begins AFTER PRIME MAGGI / The new Alt-A

650

24 mo. from life event Up to $3 million loan amount 90% LTV available Bank statements for income Interest-only available

NationalMortgageProfessional.com

NON PRIME / 1st & 2nd mortgage

www.citadelservicing.com

Wholesale Non-Prime Lending

ODF / Outside Dodd Frank

500

Stated income - DSCR Business purpose Interest- only available

Call Citadel Servicing Now!

949-900-6630 sales@citadelservicing.com

BEFORE HARD MONEY 15707 Rockfield Blvd, 3rd Floor, Irvine, CA 92618 NMLS ID 144549 For mortgage professionals only. This information is intended for the exclusive use of licensed real estate and mortgage lending professionals in accordance with local laws and regulations. Distribution to the general public is prohibited. Rates and programs are subject to change without notice. Citadel Servicing Corporation is an Equal Opportunity Employer and does not discriminate against individuals on the basis of race, gender, color, religion, national origin, age, disability, veteran status, or other classification protected by law.

EQUAL HOUSING OPPORTUNITY

n National Mortgage Professional Magazine n DECEMBER 2016

Foreclosure, short sale & BK OK No reserves 90% LTV available Bank statements for income Down to 500 Fico, O/O & N/O

a report of findings

DECEMBER 2016 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

credit to low- and moderate-income borrowers were on the supply side or on the demand side. As fate would have it, a dead heat, with 13 indicating a supply-side (inventory) limitation and another 13 indicating a demand side (credit) deficiency. Are the GSEs requiring your firm to use trended credit data, asked Question 27. Fourteen executives reported either Fannie Mae or Freddie Mac was mandating use of trended data compared to 12 others who were not (yet) so required. As for benefits from the use of trended credit data, not much reported 10 executives, twice the number of affirmatives, with another 14 respondents saying it was too early to determine benefit. All or mostly electronic, asked Question 29 about the mortgage processes at their firms. Mostly, said 20 executives, while another six reported all their processes were done electronically and without paper. Question 30 wondered if the executives thought borrower counseling was proving valuable to first-time homebuyers (as mandated by some affordable products). Scaled one through 10, the group average was 5.4 amidst a range of two through 10. How about industry profits in 2016, do you expect them to be higher than last year, asked Question 31. Higher, said 25 compared to four executives who thought otherwise. Question 32 wanted to know if those surveyed were seeing or hearing about a measurable pickup in home equity lending. We are experiencing a pickup, reported 15, but another 12 saw no evidence of accelerating home equity lending. Questions 33 to 36 sought letter grades A to F for four agencies based on the executive’s evaluation of their overall performance over the past year. Fannie received a B, Freddie a B+, HUD/FHA a C+, and the CFPB a D+. Do you deal with one or more of the mortgage cooperatives, inquired Question 37? We do, said 16 of 28 executives responding. Questions 38 to 41 focused on compliance/regulatory costs in the post-Dodd Frank mortgage market. For the group of 29 firms, the average multiple for which compliance costs have increased was 4.1 times, within a range of a two to 15 multiple; the average percentage of their firm’s total operating expense driven by compliance was 24.8 percent in a seven to 50 percent range; the average cost added to a single

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mortgage loan due to regulations was estimated at $1,788 per loan inside a range of $250-$4,500; and 16 of 28 indicated that they expect loan production expenses will stabilize in 2017, but 12 other executives think expenses will rise modestly higher next year. Questions 42 to 44 dealt with offshoring, CFPB audits and servicing compensation, respectively. Only six of 29 firms offshore at least some mortgage services, 12 of 29 have been through a CFPB audit, and 12 executives think traditional servicing compensation levels should change versus 14 who prefer it remains at current levels (25 and 44 basis points). TRID was the topic of Questions 45 to 47. We wanted to know if the executives’ firms were completely, 100 percent through the transition to TRID rules, if they found the requisite disclosures a significant improvement for consumers, and if the proposed changes added greater clarity to the rule. Seventeen of 29 respondents indicated they were completely TRID compliant and not experiencing any hiccups, 21 of 29 reported no improvement in the disclosures given consumers, and 18 said no greater clarity resulted from the CFPB’s proposed TRID changes released last August. Questions 48 to 51 all involved the CFPB. Question 48 focused on the recent changes to the consumer complaint database; Question 49 wondered if lenders viewed TRID as another long-term liability for the industry; Question 50 wondered if mortgage executives felt Realtors operate with little liability concerning CFPB rules and regulations; and Question 51 asked if all the new rules made the mortgage finance process safer for consumers. Among those surveyed, 18 thought the proposed changes added little clarity to the rule; 19 weren’t particularly pleased with the consumer complaint database changes; 23 of 28 thought the TRID rules created a (legal) liability for mortgage banking. And yes, Realtors are viewed as largely operating with impunity, said 25 of 28 executives answering that question. As for consumer protection, a mixed bag of responses: 14 thought the process was made safer for consumers, while 15 others saw no safer process (but a far more expensive one). Is California’s housing boom coming to an end, Question 52 wanted to know? Again, a standoff response, with 14 executives saying it’s ending and 13 others not so inclined. Questions 53 to 54 focused on Wells Fargo’s cross-sell scandal.

Tom LaMalfa is a 35-plus-year veteran mortgage-market analyst and researcher. He has done pioneering work in the areas of secondary markets, wholesale mortgage banking, mortgage brokerages, financial benchmarking and GSE reform. He may be reached by e-mail at Tom.LaMalfa@gmail.com.

mortgage company to protect that investment.” Franco will be joined by a team including Loan Consultants Ben Walker, Sadot Negrete and Maritza Negrete. New American Funding plans to provide the Oro Valley community with the same industry-leading closing times, award-winning services, and high-level customer support that has become a hallmark at its other national locations.

Midwest Agency Group. WFG has also named Sharon Grannis as state manager for its retail title operations in Arizona, and has appointed Al Willey as its vice president of Escrow Operations in Arizona.

l The Mortgage Collaborative, an independent mortgage lending cooperative, has announced the appointment of David G. Kittle, CMB as president.

l HomeBridge Financial Services Inc. continues its expansion in the Northeast and Mid-Atlantic with the addition of highly-skilled and locally-respected mortgage loan originators in key locations in Rhode Island, Maryland and New Jersey. Associates who have recently joined HomeBridge include: Anthony DePietro (Shrewsbury, N.J.); Iryna Gilbert (Rockville, Md.); David Sampson (Warwick, R.I.); and Peter Scott (Hackensack, N.J.). l WFG National Title Insurance Company has named Stanley Czaja Esq. as underwriting counsel for the states of Illinois and Indiana in its

AVERS

l National Mortgage Insurance Corporation (National MI), a subsidiary of NMI Holdings Inc., has announced that Michael J. Dirrane, senior managing director and chief sales officer of National MI, has been appointed chairman of MassHousing, a Bostonbased affordable housing agency.

MANSHUM

SCOTT

SAMPSON

GILBERT

DIRRANE

DEPIETRO

Mortgage Professionals to Watch

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KITTLE

heard on the street

l Dart Appraisal has announced that Nikole Avers, former executive director of the Tennessee Real Estate Appraiser Commission, has joined the company as a review appraiser. Dart Appraisal has also announced the addition of Tina Manshum as an account executive covering the state of Michigan. l VIP Mortgage has announced its expansion into the continued on page 66

n National Mortgage Professional Magazine n DECEMBER 2016

eight who thought it chiefly as an expense. Question 64 wondered if the respondents wanted Fannie and Freddie merged, or if they felt the mortgage market was better served by multiple guarantors. Multiple guarantors are the route to go said 18 executives compared to another 10 who said merge them. With the market share of independent mortgage banks climbing sharply in recent years, Question 65 inquired whether this upward trend would continue. It will reported 19 executives, twice the number who thought IMB share wouldn’t reach or exceed 60 percent in the next couple of years. Question 66 inquired: Will the traditional loan officer model fade away in coming years? Yes said 17 executives versus 11 who weren’t so sure of a much diminished role for LOs. Question 67 wondered if survey respondents favored ditching the Common Securitization Platform (CSP) and replacing it with a Ginnie Mae platform for conventional loans. No go, said 24 of 28 executives, believing the CSP to be the better alternative. Question 68 asked if the Republicans would hold the Senate following next month’s elections. By nearly 2:1, those surveyed felt the GOP would maintain a Senate majority. Question 69 inquired as to the executives’ firms’ total originations in 2016. The mean for the group was $10.8 billion, with a range of $71 million to $200-plus billion. The last question, Question 70, wondered how those surveyed thought their firms would respond to a sharp (20 percent or greater) contraction in origination volume in 2017: Would they cut overhead, merge their companies, make an acquisition, sell the firm, or staff up and grow through the downturn. Seventeen executives said cut back overhead expenses, five felt acquisitions would be the strategy, and seven said we’ll hire and grow the company through the downturn. There were no merger strategies or sellers of firms. There you have it, a brief summary of what was learned from the survey research project at last week’s MBA convention. My thanks to Tom Millon at CMC for sponsoring this year’s lender survey of industry issues and topic. TSL Consulting focuses on survey research projects that benefit mortgage finance.

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As for how bad for the bank, the group average was a 7.5 of a maximum of 10. The range was three to 10. Concerning negative fallout from the scandal on the industry, 16 said yes, there will be negative spillover effects, but 11 felt not inevitable. Question 55 wondered if the executives expected a spike in mortgage rates in 2017. Here, 27 of 29 reported that mortgage rates were unlikely to jump by more than 50 or 75 basis points next year. Does the country need a National Housing Policy director, questioned Question 56? Indeed it does responded 23 of 29 executives. Question 57 asked if consumers benefited from the CFPB’s new servicing rules. Another dead heat, with 12 seeing the rules as a plus for consumers and 12 seeing no real benefit. Question 58 wanted to know if TRID problems were (still) delaying loan closings. Sure are said 22 executives, compared to six who reported no delays. Question 59 asked if their firms were adding IT staff to deal with all the new systems integrations taking place. Indeed they are, with only one of 29 indicating that IT employees weren’t being hired to accommodate the myriad integrations of systems. Question 60 wondered if all the new rules were requiring more time to clear their firm’s warehouse lines. No, reported 16 executives (who mostly depend on in-house funding), but 10 others said yes, more time was required to clear lines. Question 61 asked if the recent ruling in the PHH case would cause the CFPB to both make clearer rules and simultaneously end its perceived policy of “rules by enforcement.” All 28 who answered hoped this would happen, but only 16 responded yes, while 12 others thought the ruling would not have much effect on Director Richard Cordray’s CFPB. Question 62 wondered if the widespread availability and understanding of FHA loans was slowing the adoption and use of the GSEs’ affordable products, specifically HomeReady and HomePossible. The response drew a near tie with 15 reporting the availability of FHA loans has curbed use of the 97 percent products, but 14 others saying FHA loans weren’t slowing other affordable housing products. Is technology mainly an expense or an investment, asked Question 63? It’s an investment (in the future), reported 20 of those surveyed versus

MBA’s Mortgage Action Alliance

heard on the street

y name is Fowler Williams and I am president and chief executive officer of Crescent Mortgage Company. For the past two years, it’s been my honor to chair the Mortgage Action Alliance (MAA), a voluntary, nonpartisan and free nationwide grassroots lobbying network of real estate finance industry professionals, affiliated with the Mortgage Bankers Association (MBA). In January, my friend Gene M. Lugat, executive vice president at PrimeLending, will take over. As this is my last column as MAA chairman, I am particularly proud to report that the Mortgage Action Alliance has reached 15,000 members! A special thanks to the 58 companies that participated in MAA’s 2016 Action Week. Over the last month, we welcomed more than 2,400 new MAA members, with plans to grow even larger to align with the size of our industry nationwide. The following companies signed up the most new MAA Members during Action Week: l New American Funding: 580 l Primary Residential Mortgage Inc. (PRMI): 301 l Eagle Home Mortgage: 261 l Sierra Pacific Mortgage: 132 l Universal American Mortgage Company: 112 l Envoy Mortgage: 94 l Brand Mortgage: 78 l Crescent Mortgage Company: 74 l First Choice Loan Services: 52 l USAA Federal Savings Bank: 35 l GBC Funding: 34

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Advocacy efforts on behalf of the industry have been an important part to the development of our neighborhoods. The industry’s strengthened ability to navigate and manage policy challenges is critical to efforts in serving consumers around the nation. For those who haven’t yet, please consider joining MAA and helping us leverage your personal relationships to advocate on behalf of our industry. Visit our Web site to learn more. The results are in, and as you all know, Donald Trump will be the next President of the United States. Republicans held onto the Senate, securing 51 seats—with the outcome of the election in Louisiana headed to a runoff—and the Republicans also maintained control of the House. MAA Advocacy continues to help push forward the necessary reforms of the health of the mortgage industry and make sure policymakers in D.C. understand what’s going on in the real estate finance in your community. During the transition to a new presidential administration and a new Congress, being politically active is more important than ever. Also this past month, MBA launched a new networking platform for women in the real estate-finance industry: mPower– MBA Promoting Opportunities for Women to Extend their Reach– to provide an opportunity for women to strengthen their networks, achieve professional growth, and exchange ideas and information about the industry. continued on page 107

l Waterstone Mortgage Corporation has announced the promotion of Lisa Fenske to senior vice president of Marketing & Communications. Fenske has been with Waterstone Mortgage for five years and has been instrumental in initiatives that have contributed to the growth of the company.

MAHDAVIAN

A Message From MAA Chairman Fowler Williams

FENSKE

Colorado market by hiring industry veterans Jennifer Tulcan and John Suggs to lead their efforts. Tulcan joined VIP as executive vice president of National Sales and Suggs joined the company as VP of Process Management.

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l ComplianceEase has announced the appointment of Sharif Mahdavian as vice president of National Sales, where he will oversee the company’s interactions with federal and state regulator clients, the governmentsponsored enterprises (GSEs), and capital market participants. l Joseph A. Iacovino Jr. has joined Mortgage Network Inc. as a loan officer in the company’s Conshohocken, Penn. branch office, where he will be responsible for serving buyers and homeowners throughout the Philadelphia area. l Inlanta Mortgage Inc. has announced the addition of Chad Gomoll as senior vice president of business development where he will drive and oversee the new growth for the company. While directing this effort, Gomoll will be personally responsible for identifying new branch partners, as well as assisting in the growth and development of Inlanta’s current branch network. l west, a wholly-owned subsidiary of Williston

Financial Group (WFG), has appointed Lance Melber as president and Gorkem Kuterdem as chief technology officer. MetaSource has announced that it has promoted John Nixon to the role of chief revenue officer, where he will be responsible for the alignment of all resources dedicated to demand creation for business development, strategic account management and marketing to foster growth to continue MetaSource’s success. Alterra Home Loans has hired Alex Urmersbach and promoted Yvonne Yacono to bolster its finance department as the company continues on a steady growth path. Urmersbach has joined the team as chief financial officer (CFO), and Yacono will now serve as chief business officer. Embrace Home Loans has announced that financial services industry veteran Anthony Branda has joined the company as chief data officer. In his new role, Branda will build an integrated omnichannel platform to strengthen Embrace’s data intelligence to not only support continued growth, but also enhance the customer experience. GSF Mortgage Corp. has added both Coby Matush and Brian Salak as mortgage loan originators in GSF’s Brookfield, Wis. location. Both Matush and Salak are new to the industry and have recently completed the Xinnix Training for Loan Officers course as part of GSF Mortgage’s initiative to welcome Millennials into the mortgage business.

Your turn National Mortgage Professional Magazine invites its readers to submit any information, events, passages, promotions, personal or professional occurrences that seem appropriate and/or other pertinent data to the attention of: Heard on the Street/Mortgage Professionals to Watch column Phone #: (516) 409-5555 E-mail: newsroom@nmpmediacorp.com Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

nmp news flash

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LTV ranges have undermined their ability to average pricing effectively, and to ensure that the broadest range of underserved borrowers have access to the wealth-building opportunity of homeownership. “The [GSEs’] current average guarantee fees are far higher than is required to cover the expected losses on their current book of pristine business,” the letter continued. “Defaults on the most recent originations are tracking well below 2001-2004 mortgages at the same age, when average guarantee fees were far lower and there were no loan-level price adjustments (LLPAs). We believe that FHFA has considerable latitude to allow both Enterprises to reduce their average guarantee fees as well as their pricing on lower credit score and higher LTV loans without significantly affecting the Enterprises’ overall economic results.” The organizations also requested to meet with the FHFA and the Treasury Department to discuss the matter further. Among the organizations that signed the letter were the California Reinvestment Coalition, the NAACP, the National Community Reinvestment Coalition and the Woodstock Institute.

When it comes to housing, the U.S. is very much a suburban-focused nation, according to a new publication from the Urban Land Institute (ULI) titled “Housing in the Evolving American Suburb.” The ULI report determined that in the nation’s 50 largest and most urbanized metropolitan areas, suburbs account for 79 percent of the population, 78 percent of the households, 32 percent of the land area and—in a shout out to those ubiquitous Millennials—75 percent of the young adults aged 25 to 35. Suburban areas made up 91 percent of population growth and 84 percent of household growth between 2000 and 2015—the median household income in the suburbs is $71,000, compared to $49,200 for urban areas. And the suburbs are slowly becoming an employment magnet: jobs increased by nine percent in suburbs between 2010 and 2014, compared to six percent in urban areas. In terms of housing, the median home value in urban areas is $365,000 compared to $305,000 in suburban areas. However, there are regional anomalies: the New York metro area, for example, offers median home values that are 28 percent higher in urban areas than in the suburbs. Your turn National Mortgage Professional Magazine invites you to submit any information on regulatory changes, legislative updates, human interest stories or any other newsworthy items pertaining to the mortgage industry to the attention of: NMP News Flash column Phone #: (516) 409-5555 E-mail: newsroom@nmpmediacorp.com Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

n National Mortgage Professional Magazine n DECEMBER 2016

Construction employment reached its level since November 2008, according to an analysis by the Associated General Contractors of America. Last month saw 6.7 million people employed in construction, an increase of 19,000 from October and an increase of 155,000 from a year ago. Residential construction added 19,600 jobs in November from one month earlier and 120,400, or 4.8 percent, compared to a year ago. Nonresidential building construction employment rose by 300 employees in November and 6,600 (0.9 percent) over the year. But heavy and civil engineering construction firms dropped 2,100 jobs for the month and 4,400 (-0.5 percent) since November 2015. “This report shows the construction industry has the capacity to handle additional infrastructure work even as private

Report Finds Suburbs Outpacing Urban Areas

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Construction Employment at Eight-Year High

nonresidential projects, apartments and homebuilding continue to go up,” said Ken Simonson, the association’s chief economist. “The industry would be adding more highpaid jobs if local, state and federal officials were investing more to build new and repair aging infrastructure.”

Why What You Are Doing Is Actually Hurting Your Produc What to Do Instead By Brian Sacks

hat I am about to share with you will not only help your business, but it actually affects every aspect of your life. Every once in a while we all have that big ‘a ha’ moment that truly transforms our business, our income and our lives. When I first started out in the mortgage business, I did what many others do. Probably the exact same thing you are doing or have done … I looked around at what everyone else was doing and did exactly the same thing.

Yes, I was young and naive At 21-years-old, I was certainly young and not very well-educated in the areas of marketing and finance, but I did know that I could sell. So, I grabbed a bunch of rate sheets and business cards and went out to about 20 offices. I stuffed rate sheets in boxes and brought in food and even met with some of the agents. But I was not really getting very much

business from my efforts. The good news is that I had a crazy work ethic, and worked seven days a week for many years, stuffing those boxes and meeting those agents. Can you relate? See the truth is that I knew I could simply out work my competition, and I was truly a great schmoozer … I still am. But these days, you cannot even get into these offices, and even if you can, there are few agents who come in to their offices daily. But wait … you have great rates and great service right? Yes, I do too and so does every other originator. So the days of having the best rates and doing a good job are gone. Every one pretty much has competitive pricing and most provide good service. You can bring in food or sponsor parties or give away pens and toys, but that will still not help you get your business to the next level.

What should you do? These days, it’s all about social media and other tools. But let me guess, those aren’t working too well for you either right? Ever wonder why what you are doing simply isn’t working? Let me let you in on a big secret that will totally change how you do business. It’s not that these tools don’t work. It’s not that you aren’t working hard enough. It’s not that the business has changed. All of these are excuses that don’t pinpoint the true issue of whether an originator will succeed or fail in this business. Stop for a minute here and write these next two sentences down. Whoever is chasing is at a disadvantage. Whoever is being chased is in control. Take a minute and digest that one thought because once you truly understand it your business and your personal life will change for the better. This was the big ‘a ha’ that changed the

game for me and hundreds of originators and company owners I have coached. Take a look at Facebook or LinkedIn, and you will see that everyone is simply screaming louder. Go online and visit sites or look at ads in papers and everyone is simply trying to scream louder than their competitors. Think about all of the programs you are considering to generate new business. Which ones have you doing the chasing and which ones have you set up so buyers and agents are chasing you? I’m sure by now you are wondering how to get customers and agents chasing you. There are a number of ways to do this, and I have spent my entire career perfecting them and teaching them to others. I couldn’t possibly list them all here, so let me share some of the top ones with you. Want to get real estate agents chasing you? Here are a few methods, but of

s uction …

course, you must provide great service and have competitive rates. 1. Teach classes at your local board of Realtors and let them see you as an expert. 2. Provide them with pre-approved buyers. 3. Provide them with pre-approved buyers. This is not a typo, because nothing is more powerful than this. 4. Help them with their marketing. Perhaps you can do some joint mailings to apartment complexes or other targeted prospects. They must see you as a true partner. 5. Help them with buyers other lenders cannot help them with 203k, boomerang buyers or buyers who are self-employed, but don’t qualify. Yes, there are programs out there for buyers who are self-employed and don’t show all of their income or have high expenses. There are also investors out there who will assist buyers one day after a bankruptcy, foreclosure or short sale.

How do you get buyers chasing you? Buyers need to see you as the obvious expert and go to resource. 1. Be a guest on a radio show or have your own radio show. I have personally helped more than 50 originators with their own radio shows, and of course, have had my own shows. 2. Be a resource for your local newspaper and TV stations when they want stories on the local real estate market. You can even suggest stories to them when there is news in the industry, which is every few months. 3. Don’t just advertise telling everyone how wonderful you are and all of the great programs you have. “EDUSELL” them, meaning that you should be providing free reports and good education that allows them to see you as the expert and builds rapport with them. Then

it should encourage them to contact you for a consultation. 4. Don’t forget to make your past clients and referral sources your biggest advocates. Make yourself easy to refer and make sure they are constantly referring you. You must, of course, stay in touch with them in order for them to refer you. 5. Market to people you know you can help based on the programs you have. I suggest picking a niche and marketing to those who fit the profile of that niche and would qualify for the programs you can offer. As an example, one of the largest niches right now are boomerang buyers who have had a bankruptcy, foreclosure or short sale. Few, if any, loan

officers are marketing to them, yet they are eager to buy again. If you have skimmed this article, I would strongly suggest you go back and read it in-depth and think of the tactics you are now using versus what I have just shared with you. Your job as an originator is all about creating more demand for your services than you have time for. This allows you to be selective and in control. But just in case you want the Readers Digest version, here you go: Your success generating new business and referral relationships is all determined by who is chasing who. Your goal is to get real estate agents and buyers chasing you!

Brian Sacks is a nationally-renowned mortgage expert who has career closing of more than 5,924 transactions for more than $1 billion. Brian is the host of “Top Originator Secrets,” which can be seen weekly on Mortgage News Network and on his blog. You can get more information and grab your free report on “How to Get Agents Chasing You” at TopOriginatorSecrets.com.

The Long & Short The Business of Short Sales

When Unpopular Policy Works BY PAM MARRON

ur current Administration inherited a financial crisis that this country has not experienced anything close to since the Great Depression. When the collapse occurred, it was visible by the number of unoccupied homes, and many of us knew of friends, relatives and colleagues who were impacted by this. Initially, the problems were blamed on the unscrupulous mortgage broker industry until it was learned that the banking industry had an equal amount of blame. Almost every loan originator I know was negatively impacted by the housing crisis. They were either losing their homes or income, and in many cases, both. All of us saw the housing bubble, but complacency set in after it continued for years, not months. When the crash happened, it was fast and mammoth. It had to be dealt with and the depth of problems that housing faced during the last eight years was unprecedented. Drastic measures were necessary to be put in place immediately to stop the bleeding. Many say that the measures put in place went too far and stalled the progress of the housing market, and ultimately, added more cost to the entire mortgage process. Others say it could have been much worse if these safeguards were not in place, and that the inconveniences placed upon our

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industry need to be adapted to. But a few changes occurred that have provided end results that could be argued as good. The role of AMCs and home prices Many of us have concerns when we see housing prices increase quickly. How do we safeguard against the alarmingly fast increase in home values that was the norm prior to the crash? The answer appears to be the appraisal management companies (AMCs) where all (or at least) qualified mortgage (QM) appraisals must go through. Appraisals are now done by third-party AMCs who lenders and realtors have no communication with until after the appraisal is completed. Even though the process can be frustrating, the value cannot be blamed on the buyers’ lender. A dispute in value can be done, but it is with the appraiser through the AMC rather than the lender. Qualified mortgages (QMs) Due to requirements put in place by the Consumer Financial Protection Bureau (CFPB), almost all secondary market sellable mortgage products no longer have prepayment penalties, negative amortization, balloons and interest-only options. Prior to the housing crash, these negative options were mostly explained to consumers as “rare to happen,” but ultimately, became a main reason so many homeowners were negatively

“Please don’t say the past housing crash won’t happen again with policy changes in the new administration.”

affected by the housing crash. Consequently, a new industry of non-QM mortgage products is out there. Though a rare few have limited “skin in the game,” most of these products require 20 percent equity to close the deal. I know that many in my industry have opposite views of the above. And, yes, policies can be streamlined. Frustrating to all of us is that dealing with housing issues seem to come to a standstill six to 12 months before every election cycle,

seeming to be a topic that no political candidate wants to touch. Please don’t say the past housing crash won’t happen again with policy changes in the new administration. Instead, those of us in the mortgage and real estate industries need to ensure that this doesn’t happen again by looking at what policies have and have not worked. More effort needs to be placed in fine-tuning policy that does work.

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

n National Mortgage Professional Magazine n DECEMBER 2016

See product guideliness for program restrictions. This is a business-to-b business communication provided for use by mo ortgage professionals only and is not intended fo or distribution to consumers or other third parties s. It is not an advertisement; as such term is +*)(*+'&('%*$#&"('!'! ! '" ' * #&"(' ' "+ $#'&( " #&"('& ' *$#'#"'$ ( *' &# " #'("#&$* ' " * &+ *' " * *'& ' '+& & &"('" ' " * &+ *' &( ($& '%* &$* ' ($ ' %' ! ' ' " * &+ *' &( ($& '%* &$* ' ($ 'All rights reserved.

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The Basics of Mortgage Un s a commercial mortgage underwriter, broker and lender with more than 30 years of experience, I am constantly asked by residential lenders and brokers to explain the mechanics of commercial mortgage underwriting. Residential lenders are accustomed to asking about a borrower’s income, credit, net worth, liquidity and debt-toincome ratio. Commercial lenders ask those same questions, but also need to understand the cash flow of the underlying commercial property. There are various mathematical calculations that are employed in this cash flow analysis. I will define and attempt to explain these calculations in a logical sequence, as follows: l Potential gross income: This represents the maximum income to be realized from the property. For example, let’s say that a borrower owns a 10-unit apartment building with average rents of $1,000/month. The potential gross income would be $120,000/year (10 apartments x $1,000 x 12 months). This $120,000 doesn’t tell us enough yet, but it is our starting point. l Operating expenses: Every building has expenses, including real estate taxes, insurance, utilities, maintenance and repairs, garbage, landscaping, etc. These operating expenses need to be reviewed carefully as many sellers, owners and real estate agents often understate actual expenses when selling a property. l Underwritten expenses: There are certain expenses that are always overlooked by sellers and brokers, but assumed by underwriters. These include vacancy factor, management fees, repair allowances, tenant

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improvements and leasing commissions. Underwriters will assign a vacancy factor (say five percent) to allow for lost rents during tenant moveouts and tenant move-ins. Management fees are required (again, say five percent) to pay for management duties even if performed by the owner. Repair allowances cover unforeseen expenses and building repair for non-regular events such as a new roof or new boiler. These events do not occur annually, but must be budgeted. Commercial properties, such as retail and office buildings, might also require tenant improvements to lure a new tenant and leasing commissions to a real estate broker. All of these expenses will be estimated by the underwriter. l Net operating income: The operating expenses and underwritten expenses will be subtracted from the potential gross income to generate what is known as the net operating income. This is the building’s net profit before debt service, or mortgage payments. l Annual debt service: This represents the total annual payments for the existing or proposed mortgage. For example, if the monthly mortgage payment is $2,000, we say that the annual debt service is $24,000. The debt service needs to be adequately covered by the net operating income. This concept is explained next. l Debt service coverage ratio: This is the first of two main ratios considered by a commercial mortgage underwriter. The debt service coverage ratio (DSCR) is calculated by dividing the net operating income by the annual debt service. As an example, say a building has a net operating income of $125,000 and proposed

of Commercial Underwriting By Stephen A. Sobin

As you can see, there is a fair amount of basic arithmetic employed when analyzing a commercial mortgage loan request. A borrower should familiarize himself with these calculations prior to submitting a loan application to a lender, or submitting a purchase offer to a seller or broker.

Stephen A. Sobin is president and founder of Select Commercial Funding LLC, a nationwide commercial mortgage brokerage company. He is an industry veteran with more than 30 years of mortgage lending experience, and is also a founding member of the InterCapital Group, a nationwide alliance of commercial mortgage professionals. Stephen may be reached by e-mail at SAS@SelectCommercial.com.

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can see, the higher the cap rate used, the lower the value. The lower the cap rate, the higher the value. A professional appraiser will know the appropriate cap rate in the given market for the given property type. To recap, the value of the building will be determined by the net operating income and the cap rate used. l Loan-to-value ratio (LTV): The second main ratio used by a commercial mortgage underwriter is the loan-tovalue ratio. This is much simpler to calculate and is similar to a residential loan. Once the value is determined (usually by the income capitalization method), the lender multiplies by the LTV to determine the maximum loan. As an example, if a lender has a maximum LTV of 75 percent, and the property is worth $2 million, the maximum loan (based on the LTV method) would be $1.5 million. The maximum loan using the LTV method might be higher or lower than the maximum loan available using the DSCR method explained above. The underwriter will calculate both and usually cap the loan amount at the lower of the two ratios.

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annual debt service is $100,000. In this example, the DSCR is 1.25 ($125,000 divided by $100,000). A number above 1.00 means that the property operates in the black. A number equal to 1.00 means the property breaks even. A number below 1.00 means that a property operates in the red. Most underwriters look for a DSCR of 1.25 or better. If the number is lower, a reduction in the loan amount would be necessary. l Capitalization rate (Cap Rate): The cap rate is the rate of return that an investor expects to realize on his cash. If you deposit money in a bank CD paying one percent interest, you can say that the cap rate is one. A real estate investor typically seeks a return of five to eight percent. The cap rate helps an underwriter determine the value of a commercial property. This concept is explained next. l Property value (Income Capitalization Method): Above we discussed a building with a net operating income of $125,000. That means that the building generates $125,000 of cash flow (before the mortgage). If an investor wanted a cap rate of eight percent, that building would be valued at $1,562,000 ($125,000 divided by 0.08 equals $1,562,000). If a different investor was willing to accept a cap rate of five percent, the same building would be worth $2,500,000 ($125,000 divided by 0.05 equals $2,500,000). As you

Strategies That Get You to the Goal Post By Alice Alvey

Growing in a down market o lenders really factor in the economic predictions for 2017 and 2018 when determining their growth strategies for 2017 and 2018? Economists have adjusted their volume predictions for 2017 and 2018 several times since mid-year to reflect lower refinance volume. They made final adjustments by adding that purchase transactions will be up. The Mortgage Bankers Association (MBA) is forecasting 1.63 trillion in mortgage originations for 2017 with approximately 68 percent of this volume from purchase

transactions. The MBA is also predicting $145 billion of refinance production in Q1 2017 on the heels of $263 billion in Q4 of 2016. Of course, all predictions are based on many assumptions including that interest rate increases won’t push us over the five percent mark and, as Chair Janet Yellen and the Fed have indicated, that “rate increases through 2017 and 2018 will likely be gradual … The Fed] is going to be cautious going forward.” Granted, by the time this article is published anything may have caused even these predictions to change. But two factors are very clear—the opportunities will shift from the 2015-2016 plans lenders

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had in place. Lenders will need growth strategies targeting purchase buyers in order to compete. Top growth strategy areas So what are the top three areas of focus mentioned in almost every 2017 strategic plan across the mortgage industry? If you guessed that implementing new technology is on everyone’s list, then you guessed the easy one. It’s like the game Family Feud— the top answer is usually the easiest one to shout at the buzzer. Did you guess customer service initiatives as also being in the top? The third one is the wild card. Believe it or not, many lenders are looking to expand their product offerings. This includes energizing FHA/VA/RD programs, adding portfolio QM, and reaching more nontraditional and first time buyers. There is a case to be made that adding efficiency to reduce costs is also at the top and it tied for third place. These top points represent investment strategies of varying degrees and tactics. But that all starts with the condition of the company’s balance sheet. It is all about money “Developing sound growth strategies for 2017 is a balancing act. Lenders and vendors in the industry are forced to balance the customer, financial viability, and compliance,” said Rajan Nair, CEO of Financial Services at Indecomm Global Services. Nair describes this as a three-legged stool and each one has contradictions with the others. Customers have come to expect their experience with a lender to have the same userfriendly interface as buying from Amazon Prime—seamless, easy to understand, fully disclosed and transparent from the time the order is placed until the package is delivered. Growth strategies in 2017 for lenders are very focused on improving the customer experience and competing with the expectations set by retail

shopping. This puts a lot of pressure on making the right choices for website design and software partner coordination with sales and operations systems. Growth strategies for 2017 include leveraging the many cloud-based platforms that support CRM, tax return calculations, agent and lender coordination and accountability, as well as verification ordering. These platforms can jump start the application process, saving valuable time. In planning for a growth strategy that seeks to escalate the customer experience, it is critical to calculate the value to the bottom line. In each case there are clear ways to measure the ROI. For example, the return-oninvestment (ROI) in a Software as a Service (SaaS) model platform is a variable cost. By implementing a platform that will read the tax returns, calculate income and prepare the necessary underwriting conditions, the loan level cost is easy to compare with the time saved in underwriting a selfemployed borrower’s loan. RegTech Strategies RegTech companies have evolved in the mortgage space and their numbers are growing. RegTech is a new concept derived from the definition of FinTech, primarily signifying the technology applied to resolve issues regarding regulation within the financial industry. Just like the customer service options, RegTech firms often go after a unique problem in regulatory compliance and offer a specific solution that is not readily available in the Loan Origination System (LOS) or servicing system. When establishing tactics to manage regulatory compliance, lenders are placing significant weight on the vendor and vendor management risks. The benefits the vendor brings to the table are weighed just as heavily as the value of the software platform itself. Business partnerships are going deep to manage regulatory risks. Lenders are seeking partners that can provide support in everything from software services to business process

services across the mortgage life cycle. Lenders are expecting business partners to easily adapt to their internal dynamics and adjust quickly when market conditions change. Selecting business partners with deep domain knowledge and agile, forward thinking technology development is a key strategy in keeping compliance costs under control in the year ahead. Ahead of the curve Lenders of all sizes are dedicating resources to watch the latest technology trends. Only a few are comfortable being early adopters. However, this group has the advantage when they choose the right technology ahead of their competitors. Many new products need testing in the market while others have been tested well internally by the vendor and hit the ground ready

to go. Staying ahead of the technology curve is a growth strategy that can increase sales and reduce expenses by adding efficiency. Optical Character Recognition (OCR)-enabled technology is a vital component in the solutions that lenders are implementing to meet key compliance management and efficiency strategies in 2017. Verification of document accuracy cannot be overlooked when determining the best strategy. The data does not always match the documents, contrary to all the carefully laid procedures and duplication of effort placed throughout the loan process. OCR-enabled platforms automate the loan document review process by extracting what really occurred on the form and comparing this to the system data, and then automatically certifying the document as accurate. Efficiency

“Growth strategies for 2017 include leveraging the many cloud-based platforms that support CRM, tax return calculations, agent and lender coordination and accountability, as well as verification ordering.”

is gained in multiple use cases across the manufacturing process to improve closing and funding times. As the market shifts to lower volume and fewer refinance transactions, companies are planning to realign their team’s roles and responsibilities with the new technology. The plan is designed to manage through the

changing market by implementing cloud-based platforms with automated form certification and workflows. In addition to the efficiency gains, a well-designed rules based system can teach the associate along the way and shorten the ramp up time. An added bonus to investigate is the continued on page 76

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strategies that get you to the goal post

business partner’s commitment to updated rules and product roadmap that continue to stay ahead of the curve. Talent management Business Process as a Service (BPaaS) is taking a front seat in many growth strategy plans. In order to grow you need more talent integration. Switching products and expanding a geographic footprint require qualified associates. To manage costs you need a balanced and variable cost model. This all points to identifying the right services to have handled by a vendor partner. The right BPaaS partner will have growth strategies that are a step ahead of yours. The technology serving as the foundation for the service is a key component in identifying

expense of a full design and development team.

continued from page 75

whether the vendor has a vision that will align with and support your strategy. Talent management is not only growing the team from within, but establishing a partnership to support the perimeter. The foundation of a successful growth strategy involving expansion requires a readily trained team and systems capable of handling the change. Lenders who plan to build a team internally are investigating the right size learning management systems and developing customized learning programs. Recordings from on line meeting applications make up almost 75 percent of training development today because they’re easy to use. However, as the volume of content grows, lenders are finding this is not a

sustainable plan to properly manage content that can measure results. Recordings quickly become outdated and are time consuming to update. In addition, they are very limited in their ability to validate the learner’s retention and proficiency. Instead companies are embracing the value of developing customized eLearning in “nuggets,” through a third-party provider with variable costs that are lower than the

Achieving balance The capital expenditures can be significant in order to remain competitive. The consumer is driving the need for continuous improvement and the agencies want it all documented. A healthy balance sheet from the 2016 rush to refinance should include enough reserves to weather the expected market changes in Q1 2017 and invest in a growth strategy that takes advantage of the digital mortgage world that is here today.

Alice Alvey is senior vice president at Indecomm, leading the Indecomm-Mortgage U division, Internal QA, Compliance and the Software as a Service (SaaS)division. Prior to joining Indecomm-Mortgage U, Alice was president and co-founder of Mortgage U Inc., a mortgage training and consulting firm. Alice can be reached by email at Alice.Alvey@Indecomm.net.

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Four Keys to Focus on in the New Year By Chad Gomoll

s we start the new year, we are all reflecting on the year we’ve had in 2016 and how we can improve for 2017. What did we do well? What were our pain points? How can we grow our business in the year ahead? At my own company, we have identified four main components to focus on in the year to come: Investing in Talent, Purpose, Marketing and Service. Many companies think that the first step in growing your business is to expand your sales team. While this is certainly an important part in growth, you need to remember to start by investing in the employees you already have.

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Providing your existing talent with opportunities to learn and grow in their careers has a multitude of benefits. First, Investing in your employees creates an energized work culture that people want to come back to day after day, year after year. Sometimes the best ideas for growth come from within. Go through your departments, find out what makes them tick, why their work is important to them, and how they think their work impacts the company as a whole. By learning about the people who work for your company, you build their confidence, their trust in the organization, and their relationship with you and the organization at

large. Talk to your top producing branches and find out their secrets for success. Each branch has its own process, but the most successful ones know how to utilize the systems your company already has in place. They know where the pain points are and how to solve the problem. They are able to navigate your internal process efficiently – how file flow works, who to contact when they need help, etc. When people enjoy what they do and feel valued by their company, they work harder and more efficiently. Investing in your employees makes your business more efficient. When you take already successful individuals and expand their knowledge base, their line of thinking, and their product offerings, you are able to streamline efficiencies as well as empower your employees to take on new challenges that will advance the company forward. On an operations level, cross-training your staff on multiple product offerings or in other roles can help keep business moving if there is a vacation or an unexpected illness. It also increases efficiencies because you have multiple people who can handle certain projects instead of just one or two people. Same thing goes for your sales team—by helping them improve their marketing and sales ability, as well as increasing their product knowledge, you are providing them with the necessary skills and tools to bring in new leads and close more deals, ultimately boosting the bottom line. In addition to investing in your employees careers, having a strong sense of purpose helps create employee engagement. In the United States, there has been more giving towards humanitarian efforts, both locally and internationally, than any other country in the world because of our capitalistic society. The way our system is set up, there are incentives and benefits for profitable companies to contribute to philanthropy efforts. A vast majority of companies have some

kind of philanthropy program in place, and while the incentives and benefits are helpful, the reason they contribute to philanthropy efforts is because people inherently want to give back, to be connected with each other, and to feel that they are helping others in need. By creating that kind of mentality from the top down in the organization, by proving to your employees that turning a profit isn’t just for the sake of making money but rather to give back to the community, you are giving them an even stronger reason to work harder to achieve your mission. In 2017, Inlanta Mortgage will be expanding our own philanthropy efforts. After witnessing the struggle of several friends and colleagues who have been affected by cancer or have had loved ones who have battled cancer, we were inspired to do more to battle this disease. We currently fundraise for the Cancer Research Institute and participate in events such as the Vince Lombardi Run/Walk to Tackle Cancer. Around the holidays, we have food drives and toy drives to help local families in need. We will be expanding to include more volunteer days with local organizations and looking into other causes that align with our mission. If you are not heavily involved in philanthropy efforts, or if you’re looking to expand your own, start by surveying your employees to find out what causes matter to them. Then, take these results and do your research to find causes/charities that align with your company’s mission. Remember to keep the local communities in each of your markets in mind so that your branches stay involved, too. Marketing is a critical tool for all companies to utilize regardless of the industry. The marketing process starts with market research. Focus on target marketing by identifying your product offerings, researching each of your markets to find out which products do better in those areas, and understanding the customer that would be looking for that particular product. Once you start focusing on the specific customer and the product that would best fit their needs, you increase the number of qualified leads that ultimately end in a closed loan.

Focusing on each individual market also allows the loan officer to work more closely with realtor partners to help the realtor boost their own sales. This builds a relationship that encourages the realtor to come back to your loan officer for future deals. Competitive analysis is also an important part of market research. Pricing, service levels, technology, and marketing at other companies provides a picture of how others are doing in comparison to what you’re doing, how you can improve, and where you have a competitive advantage. Once you’ve completed your research, work with your marketing team to create a plan for each of your markets. They will then execute it through branding, advertising, and inbound marketing. Service is a key differentiation in the marketplace today. Many companies strive to provide a service level that outperforms

their peers, but few can cause separation. Considerable changes in customer expectations in recent years has placed significant challenges on lenders to build and advance a better mortgage lending experience for consumers. Service is more than just delivering on time closings; it’s now about the entire experience. Every touch and interaction with clients must be positive and trusted. At my company, we have spent the last year building an infrastructure that streamlines our process to be able to deliver a service level that outpaces the market by a full two weeks. Everyone at our company takes ownership of their function. We have made, and continue to make, significant investments in building a powerful service platform to create a best in class experience for all our customers. With proper tools and process in place, our highly motivated employees have

found ways to simplify the mortgage process, reduce the number of handoffs, to deliver a better on-time experience that customers truly value. We have developed and moved our company to the next-generation of service and it’s our key strategic differentiator. Further, our firm will be expanding its footprint in areas aligned with our business model. We will work on establishing a brand presence in new markets to attract great people with an entrepreneurial spirit who fit with our culture. With the help of a new Third-Party Origination (TPO) Manager, we will also be expanding our TPO platform.

Through our TPO program, local banks and credit unions are able to outsource their loans for disclosures, processing, underwriting and funding, while they originate the loan and keep the relationship with their customers by acting as the point of contact and advisor through the entire transaction. This process reduces compliance risk and costs for the bank or credit union. By focusing on expanding market footprints, bringing in quality originators, and growing our TPO platform, we are able to live our mission of helping more people achieve their dream of homeownership while providing an exceptional experience.

Senior Vice President Chad Gomoll comes to Inlanta Mortgage with more than 20 years of experience in the area of mortgage lending and financial services, driving and overseeing new growth for the company. Chad maintains active involvement in several community service organizations.

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DIY Technology: It’s More About Value Than Cost By Carlos Sa hen you need a new car, it’s a near certainty someone will build it for you. And unless you’re interested in certain custom features—like chrome rims or a purple paint job—it’s likely that the next vehicle you buy will be already built before you decide you want it. Of course, there are a small number of Americans who build their own cars, some using recent environmentally friendly innovations such as lightweight frames and electric technology. For most of us, however, getting a new set of wheels

involves a teeth-gritting trip to the local dealership. How mortgage companies choose the technology systems that “drive” business is not much different. In fact, the choices are far more limited. While there are hundreds of different automobile brands and models, lenders must pick from only about half a dozen or so loan origination systems. And yet it is still possible for a lender to create their own system, one that’s actually better than anything on the market, and the benefits for loan officers are significant. A better customer experience Practically everyone has heard of

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TurboTax. Over the past two decades, the off-the-shelf software revolutionized how Americans prepare their taxes. The key to TurboTax’s success is how it breaks down an extremely complex process such as tax preparation into a series of very simple questions. How users respond to these questions dictates which question they get next, until TurboTax has all the information it needs to prepare the user’s tax forms. This sort of electronic interview takes an enormous amount of pain out of the tax filing process, and now the mortgage industry is beginning to do the same for mortgages. In the past, lenders invested in technology to streamline how they process loans. The new wave is to leverage technology to allow borrowers to do more of the work online. Lenders are increasingly implementing tools that allow borrowers to enter and verify their own income, assets and other data online, at their convenience. These sorts of self-driven technologies work as virtual loan assistants that, when combined with a lender’s loan origination system, can be triggered to send borrowers an email informing them of next steps in the process. Our company has a new tool under development that lets borrowers see their loan choices based on the information they provided and basically approve their own loan. As we’re learning, a growing number of borrowers prefer it this way. Rather than driving to a lender’s office or even having a loan officer explain everything on the phone, most borrowers find it much more enjoyable to sit down on a Saturday, open their iPad and review their options for buying a house or refinancing their existing mortgage. The best thing about enabling borrowers to do the work is that they already own the data—Social Security Numbers, assets, debts,

employment history and everything else a lender will ask about. Of course, this data must be verified, but borrowers have proven themselves able to do a great job at getting this information to the lender. In addition, Fannie Mae recently decided to back the income and asset data that borrowers enter electronically against fraud and inaccuracies, giving the borrower-driven mortgage process a major boost. Lenders that build their own systems are usually better suited to offer borrowers this sort of self-driven mortgage process. Most third-party LOS providers do not include options for a self-driven borrower to upload and verify their own data. On the other hand, even lenders that do not have the ability to build a borrower-driven process through a homebuilt system can easily integrate one of a growing number of third-party software modules that provide this capability. Letting borrowers steer the mortgage process has cost benefits, too. Lenders with these tools generally require fewer inhouse processors, whose traditional task was collecting information from the borrower manually. Of course, even when borrowers want to do it themselves, they are still making a huge financial decision, so they will want someone to talk to when they have a question or a concern. This is one drawback to some of the new lending models that advertise the ability to get a mortgage with a mouse click. It’s just never going to be quite that simple. Yet giving borrowers the tools that they want and that they are comfortable using creates a much better borrower experience—which tends to generate more business through referrals from delighted customers. Better control over the process Most lenders have at least one horror story—and often more— about trying to implement a

make it easier for lenders to adapt their workflows in order to ensure strong compliance. Traditionally, most lenders manufactured loans like cars on an assembly line. I believe this needs to change, however. A better mortgage process would be built on a system

that reacts based on the actions or events that the borrower or lender takes. For example, suppose the borrower is approved for a loan, but in the middle of the process, the borrower’s mother decides to provide a gift of $10,000 toward downpayment. This changes the

loan characteristics. If your system is not designed to handle these sorts of dynamic changes, you could be in big trouble. You’ll have to take the loan off the assembly line, change it, and put it back in the proper stage or continued on page 82

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new mortgage platform or navigating a major upgrade with their current system. Once they build their own systems, the DIY lender is not at the mercy of a vendor that may change its technology or how its delivered, or force its customers to do business differently. In my opinion, a lender should never want to leave the business of creating mortgages entirely up to a third-party. Creating its own system can help a lender strengthen its hold on the marketplace, since they know more about the business than anyone else. When the owner of a lender’s core technology is a third party, the lender never really has that control. LOS providers like to say is that their systems can also be integrated with other software modules. For this reason, many lenders choose an LOS and then add on different solutions to suit their needs. This can be extremely cumbersome, however. Often a lender ends up with a patchwork of modules that seldom work perfectly together. This “pollution of solutions” can require lenders to spend more money than expected and hire additional IT personnel just to keep all these pieces running smoothly. Building it yourself, and putting as much of what you need as possible in one system, can lead to a much healthier IT environment overall. Quality is probably the biggest benefit to building one’s own system. Adapting to regulatory changes in 2017 and beyond, in addition to meeting the requirements of one’s own investors, can be arduous for the DIY lender. Lenders can and probably should integrate third-party compliance check modules with their systems to show investors and regulatory agencies that they take risk seriously. Several third-party compliance providers have created modules that can be easily integrated into a lender’s own system. When regulations change, having your own system can

diy technology: it’s more about value than cost

else you may risk a violation or a certain requirement not being met. Creating greater value When I tell people that our company built its own technology, they are often amazed. Many think it’s impossible unless you’re a major bank. However, I truly feel it’s easier than ever for lenders to build their own systems—and it’s getting easier. For example, today’s thirdparty technology vendors are starting to offer their products in a very modular format. Pricing engines, for example, are available that can run behind the scenes of a lender’s core system without the borrower ever

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knowing the lender is using it. Improving data standards and data exchanges are also making it much more efficient to exchange data between pricing engines, document preparation providers and investors. This makes it possible for a lender to have a homegrown core system that connects and uses different modules, so they can have the best of the best -best pricing engine, the best compliance check software, the best doc prep provider and more. From where I sit, a homebuilt system makes everyone in the company better, including the loan officer. It forces everyone to understand the rules and requirements necessary to build good loans. When you buy a

continued from page 81

“Adapting to regulatory changes in 2017 and beyond, in addition to meeting the requirements of one’s own investors, can be arduous for the DIY lender.”

LOS, you’re essentially buying a black box, and the loan officer rarely knows or understands what’s inside of it. A LOS vendor may say, “Don’t worry, it will do what you need it to—as long as you enter everything correctly.” But it’s a real problem if you don’t understand how it works, especially when something goes wrong. If you build it, you will have a much better understanding of what you are working with as well as the process itself. Every lender that uses technology does so to increase business and drive the bottom line. While it is possible to build a system that is less costly than a third-party solution, I don’t believe cost is the most

important factor. The ultimate prize is value, and building your own system can bring much more value than buying one. You will need a strong IT infrastructure, to be sure and that costs money. You’ll need good people, and they cost money, too. Any lender can buy a system and maintain a smaller, less expensive IT staff, if cost is what they are concerned about. But a lender that builds its own system can build a system the right way. And the value they create—by developing the best possible mortgage process, by ensuring high quality and compliant loans, and by creating a more satisfying experience for the borrower—is what we really should be after.

Carlos Sa is the head of information technology for Danvers, Mass.-based Mortgage Network Inc., one of the largest independent mortgage lenders in the eastern United States. He can be reached by e-mail at CSa@MortgageNetwork.com.

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Will History Repeat Itself in 2017? s this year comes to a close, we reflect on market-moving events in the housing industry and offer some forwardlooking insights as we approach the new year. One unknown is the impact the newly elected administration may have on monetary policy, the housing market and the mortgage marketplace. However, we anticipate that many of the trends we’re seeing at the end of this year will continue to affect home lending in 2017. First, let’s take a look at the landscape of the mortgage sector over the past year. 2016 kicked off with the Federal

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Reserve’s first rate increase in nearly 10 years—a quarter of a percentage point—in December of 2015 and a projection of four additional increases on a quarterly basis over the course of the year. The Fed quickly dialed back the four projected rate increases to two by March of 2016, and continued to hold rates at a low level due to jobs and inflationary data that did not indicate a strong enough economic recovery. It’s important to note that since the housing crisis, these rates have been held at historic lows. In turn, homeowners in 2016 have shifted from adjustable to fixed rates to take advantage of the opportunity to guarantee their mortgage terms while rates are still low.

By John Pataky

All eyes on the Federal Funds Rate Since last December, the economy has been gradually recovering. As short-term movements in the federal funds rate typically affect the long-term interest rates that mortgage lenders charge borrowers, current and prospective homeowners should keep an eye on the federal funds rate going into 2017. Recently, the combination of historically low fixed rates with rising home values has encouraged homeowners to leverage the equity they’ve gained in their homes through cash-out refinances. While the volume of cash-out refinancing is nowhere near the levels we observed prior to the housing crisis, homeowners are refinancing and taking cash out of their homes to pay off second mortgages and consolidate or pay off debt. According to a recent report by CoreLogic, home prices have increased 6.3 percent over the past year. Hypothetically speaking, a home valued at $200,000 one year ago has risen to a current value of $212,600. Overall, the average American has doubled their home equity in the past year, gaining more than $11,000 in home value. Millennials enter the market With the appreciation in home prices, how did potential homebuyers view the rent versus buy environment in 2016? According to real estate site Trulia, homebuying continued to be the more economical choice this year, and is anticipated to remain that way in the foreseeable future. Based on a typical monthly mortgage payment versus median monthly rent, Trulia found it was 37 percent cheaper to buy than rent on average this year for homeowners who plan to stay in their household for at least seven years. This was particularly true in urban areas, as buying was cheaper than renting in each of

the United States’ 100 largest metro areas. Though this may appear surprising considering appreciating home prices, rent prices have also spiked—as much as 20 percent in the last six years—according to research firm Reis. The generation still making its way into the homebuying movement is Millennial generation, many of whom have opted out of homeownership due to a variety of factors, including student debt and higher credit score requirements. However, analysts encourage the housing industry to be prepared as this generation, which is both the largest demographic and the most educated according to HousingWire, moves towards homebuying in the coming years. According to a recent Zillow report, there is already evidence of this phenomenon, as Millennials are playing an increasingly large role in the housing market, making up more than half of today’s homebuyers. Therefore, we predict an increase in housing demand from this generation is on the horizon, and mortgage professionals should make sure their offerings align with this demographic’s needs going into 2017. In addition to Millennial homebuying, another key factor that could play into the rent/buy decision next year will be mortgage rates, as they may become less attractive, particularly in comparison to today’s record-lows. However, according to Trulia’s report, interest rates would have to increase to more than double that of current rates to wipe out the financial advantage of buying, which is unlikely to happen anytime soon. As such, mortgage professionals should focus more on the impact of rising housing prices than that of rising interest rates. Though it is unlikely that housing prices will continue to rise at their current growth rate for much longer, a significant upward trajectory could shift dwellers towards renting in the coming months. Projected slowdown in refinancing So if they aren’t projected to

double, what are we anticipating in the short- and long-term for interest rates in 2017? Despite mortgage interest rates remaining unchanged for the majority of 2016, recent jobs data supports steady hiring and a slight decline in jobless claims. As far as long-term movements, rates have been held at historic lows since the downturn in 2007-2009, which is unsustainable. What does this mean for current and potential homeowners? Given the recent trend among homeowners taking advantage of low rates and appreciating housing values, we can anticipate a slowdown on the refinancing front. Houses cannot continue to appreciate at the current pace without becoming overvalued, and rates are expected to increase. Rates have been held low for so long that many borrowers who

wanted to refinance have done so already. Additionally, some prospective buyers have taken advantage of the low-rate environment by purchasing new homes. However, some are struggling with affordability given high home prices and low inventory in certain markets. Evaluating the full picture The bottom line is that mortgage professionals should be mindful that homeowners will have to consider several factors when making decisions regarding their mortgage. We can use the last cycle correction as a barometer to learn from. While interest rates are favorable for obtaining a mortgage, they aren’t expected to shoot up dramatically next year. If there’s anything we’ve learned from the crisis during which many Americans became financially overextended, such decisions should fit into a

homeowner’s personal financial plan. It’s important for mortgage professionals to offer insight on obtaining a home loan in the client’s specific housing market so homeowners can consider affordability and whether home prices are valued appropriately.

Houses in some regions are showing signs of overappreciation, which points to a pullback in value and should be watched closely. Looking at the full picture and speaking with your clients about their options is a smart first step to ensure their mortgages are in check.

John Pataky is executive vice president of the Consumer Division for EverBank. He joined EverBank in 2010 to lead the newly formed Retail Sales/Service and Delivery Organization. In November 2011, Pataky was named chief operating officer for EverBank Direct, and was appointed executive vice president of Banking in January 2015. 85

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www.callfurst.com

Business Plan? I Don’t Need No Stinking Plan! By Eric Weinstein I hate myself. I was having lunch with a bunch of mortgage broker friends and they asked me about my “Business Plan” for 2017. I stuttered like a virgin asked about his sex life. OMG … I don’t have a “Business Plan.” Please take me into the woods and shoot me. Am I supposed to have a “Business Plan?” It sounds like it is something important I should have, but I do not have a clue where to start, what to write or even who am I supposed to show it to for it to be graded. I am a loan officer working from his home getting business from referrals, my real estate agents and past customers. Every day, I wonder if this will be my last loan, but every day, a new

loan seems to fall out of the sky like manna from heaven. I have no idea where they come from except people I know or with which I have done business. I do not advertise. I am not a spammer, blogger, Facebook fanatic or advertise during the Super Bowl. I simply try to do the best job I can do for my borrowers and cross my fingers they like me enough to tell their friends. Pretty crappy business plan, if I say so myself, but it seems to be working. To me, a business plan sounds like those bogus New Year’s resolution people make. “I am going to quit smoking.” “I am going to exercise more.” Yeah, right … I quit smoking for 15 minutes, that’s how long that resolution lasted. It is November and I am still putting

DECEMBER 2016 n National Mortgage Professional Magazine n

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Give your customers assurance of your professionalism and integrity. Become a Certified Reverse Mortgage Professional The National Reverse Mortgage Lenders Association developed this rigorous certification for industry professionals who want to give customers the confidence to know they are working with thoroughly knowledgeable and devoted individuals. Earning the CRMP* designation requires validating your experience, continuing your education annually, participating in our ethics workshop and passing an exam.

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“Am I supposed to have a ‘Business Plan?’ It sounds like it is something important I should have, but I do not have a clue where to start, what to write or even who am I supposed to show it to for it to be graded.” off exercising. If I could change, I would have changed by now. No yellow sticky on my computer screen is going to transform my life. I really do not understand people who do that. I do not need a reminder to walk the dog, shave or take out the trash. I just do it when it needs to be done. I do not think a personal missive saying to “See more real estate agents” is going to help me. I see real estate agents as much as I can see them. I drip on my past clients as much as I drip on my past clients. If I have a new idea to help my business, I do it right then and there. When I had my business, my CPA wanted me to do a “budget.” That is the stupidest exercise ever! If you budget so much money for coffee in the office, does that mean you stop buying coffee when the budgeted money runs out? Or better yet, buy more coffee when you don’t need it? Why not just be careful what you spend money on to begin with? The same with my business at home. If I need something, I buy it. If I don’t need it, I don’t buy it. Who needs a budget to tell me that? I have a friend who bought a “coach” for his business. The way I understand it, this outsider calls him and tells/reminds/nudges/nags him

to do the things he knows he needs to do to be successful. If I ever get that way, please come to my home while I am sleeping and suffocate me with a pillow. You should NOT need someone to remind you to be successful. If you do, maybe this was not the right career choice. Being a mortgage broker means being a selfstarter, “you eat what you kill,” type. If that is not you, maybe you need a salary job in a cubicle with a mean boss. Sure, I can always use more business. I just don’t see how thinking up new ideas once a year is the smartest way to go. Why not think up good ideas all year round? And, if you think having a “budget” is a brilliant plan, I submit to you the words of German military strategist Helmuth von Moltke who sagely pointed out, “No battle plan survives contact with the enemy.” The danger is that you are more likely to spend based on your arbitrary written budget than what is actually required. The same goes with your precious “Business Plan.” So, my “Business Pan” for this year is to stay EXACTLY the way I am. Except, maybe, I will start locking my doors at night, just in case someone takes my pillow advice literally.

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.

The Fail-Proof Business Plan for 2017

reach your goal? Fill in the blank: If “XYZ” happened, I would feel much more satisfied and fulfilled in my job. This may be one item or 10 items. Think about it for a few minutes and write what comes to mind. Don’t edit yourself. Just write. Now let’s take a look at the marketplace. Who is your primary target? Who truly needs your services? What are their characteristics? Where do they live now? How will these customers learn about your services? How will they evaluate your services compared to your competition? What will make them want to choose you over anyone else? And finally, let’s talk about execution. Who’s going to do what and by when? Who will help you–who will be on your team? Who’s going to hold you and your team accountable? A coach? A mentor? How do you see the business progressing with dates set as benchmarks?

“How would you define where you are today? What’s the rock in your shoe? What’s bugging you about your job?”

Write as many reasons as you can about why you will succeed in 2017. Now all that’s left is to prepare. But not just any kind of preparation. The kind of preparation that makes you realize you’ve already won–

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

Get auto-underwritten in less than a minute online at www.TheBondExchange.com.

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Who couldn’t use a little more cash this time of year? You could be among the thousands of mortgage professionals who pay just 1/2% premium for their state mortgage license bonds.

you’ve already achieved your 2017 goals. Muhammad Ali once said, “The fight is won or lost far away from witnesses— behind the lines, in the gym, and out there on the road, long before I dance under those lights.”

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sst … don’t tell anyone. I’m not sure if this is against the rules or not, but this isn’t your average article on how to write a business plan. Instead, it’s an actual business plan worksheet. So yeah, from a distance, it sort of looks like an average article. But I’ve disguised it. Let’s keep it our secret, so I’d like you to treat it as such–a planning document. Take it into a quiet room without Internet access, a computer and turn off your phone–okay, put it on silence. Let’s get to it. First, let’s start at the end. Pretend it’s Jan. 1, 2018. You’re celebrating the New Year of course. But what is it about 2017 that you’re also celebrating? Did you break your sales record? Let’s say you did. How many loans did you make? What’s your life like now after having reached that amazing new goal? How do you feel? What does your family and coworkers think about you? Take some time and jot down answers to these questions. Be specific. Take this seriously because this will be your 2017 finish line–your goal. Picture yourself running through that finish line–the crowd’s cheering. You’re smiling a huge smile. Birds are singing–you get the picture. Now let’s time travel back through 2016 by looking in the rearview mirror. Take some time to write down what went well in 2016. Again, be specific. What makes you most proud of this year? What did you do right? And on the other side of the coin, what didn’t go so well? Where can you improve? Next, let’s look at where you are now. How would you define where you are today? What’s the rock in your shoe? What’s bugging you about your job? What’s your current financial status or need? What hurdles appear to be in your way to reaching what you wrote about 2017? What’s necessary to

By Bubba Mills

Three Factors That Will Drive the Mortgage Industry in 2017 By Steve DiMarco n 2016, the nation saw market conditions that were ripe for a strong housing market, with record-low mortgage rates, low unemployment and rising property values. But, of course, not all of the news was good. Tight inventory and slow wage growth restricted opportunities for first-time buyers, and despite a robust luxury market, according to a recent Trulia report, 11.99 percent of luxury listings experienced a price reduction in 2016, up from 11.01 percent last year. While these factors still bode well for a strong housing market in the coming year, they are not the primary concerns for mortgage companies looking ahead. Instead, regulation, technology and consolidation are the three main factors driving the mortgage industry in 2017.

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1. The impact of federal regulation: Past, present and future This time last year, mortgage companies were in the throes of navigating new regulations as a result of the Consumer Financial Protection Bureau’s (CFPB) enactment of the TILA-RESPA Integrated Disclosure rule, commonly referred to as “TRID.” The purpose of this regulation, also known as the “Know Before You Owe” rule, was to help borrowers better understand the terms of their loans. While the original intent has been achieved, it was a significant undertaking for lenders as the requirements were extensive, including implementation of new online systems. These new procedures were further complicated by a lack of clarity in some of the rule’s requirements. This past summer, the CFPB presented “TRID 2.0,” which sought to address some of the concerns shared by the industry after what proved to be a bumpy

start for several providers. In the midst of ongoing concerns, partnering with advisors and peers is an effective approach toward better understanding of the requirements, building the best systems and maintaining compliance. Being proactive in addressing these matters will make the continued evolution of the CFPB’s actions more manageable, particularly with the bureau’s future uncertain under a new administration. Preparing for changes in the pipeline, such as some of the new Home Mortgage Disclosure Act (HMDA) amendments to Regulation C, which won’t take effect until 2018, is one example of considerations for 2017. When it comes to any federal regulation, when the intent is positive for all affected parties, it is not something that professional operators fear or contest. However, entrapmentfocused enforcement is always a concern for mortgage industry professionals, and should be examined closely. 2. Technology’s evolving role Just as TRID has radically changed the lending and closing processes with its use of new online forms and reporting systems, technology has also greatly impacted every aspect of the mortgage industry. A recent HousingWire article estimated that 90 percent of homebuyers search for a home online, while only 10 percent of lenders deliver a digital mortgage experience from the time of application through to the closing. Although it seems inevitable that the mortgage industry will become increasingly digitized, getting there will take time. Leveraging technology effectively in the mortgage process extends far beyond the introduction of yet another app that allows borrowers to estimate their costs. For example, in many cases,

borrowers are unable to access the lender’s systems directly, putting an extra layer in the application process where loan officers are transferring information via e-mail and phone. Better integration of systems will streamline the process for borrowers and lenders alike. The vendor space for technology tools is vast, from the likes of Ellie Mae, to Black Knight and myriad start-ups large and small, making it challenging to distinguish the winners from the losers. It can at times payoff to be a fast follower, rather than the first to partner with a yet-to-beproven provider. But the onus rests on each mortgage company to determine what tools will have the most positive impact on its business. Finding the right technology will be a neverending, evolving process, which in 2017, will be the highest priority it’s ever been. 3. Growth strategies: Organic versus consolidation So what do all of these issues of regulation and technology mean for the industry in 2017? Considering that non-bank lenders accounted for more than 50 percent of the mortgages loaned to borrowers in the third quarter of this year, according to a recent report by Inside Mortgage Finance, it’s clear that the industry is changing in significant ways. That point is put into sharper focus when noting that this statistic marks the first quarter that banks fell below 50

percent in more than 30 years. The shift toward non-bank lenders can largely be attributed to post-recession conditions, where restrictions and penalties levied on banks forced the organizations to adopt more conservative lending parameters. But non-bank lenders are not immune to regulation, and must also adjust their strategies accordingly. One strategy adopted by both banks and nonbank lenders, although more significantly among the large banks, is consolidation. While mergers and acquisitions are often a sound strategy for growth, it has also been executed as a means of survival, particularly in the post-recession market. At my company, the goal for 2017 is to grow closed-loan volume by 25 percent. This estimate is based primarily off of traditional means, such as this year’s loan officer recruits hitting production strides, creation of a new affiliated venture, and further retail branch development within the company’s core market. Building upon the fundamentals has sustained the company’s growth for more than 25 years. While 2017 will see its own unique challenges amidst significant regulatory, technological and strategic shifts, it will also serve as a year of transition for a storied industry that is on the cusp of change. However, as each mortgage industry provider positions itself for these changes, adhering to the fundamentals of client service, market differentiation and strategic investment will provide a solid foundation to weather whatever the new year brings.

Steve DiMarco is president of Chicago-based Key Mortgage. He has more than 20 years of experience in the mortgage and financial services industry and is highly skilled in sales leadership, operations management and team building. Steve was past president of the Illinois Mortgage Bankers Association.

Change Is Certain

people he has delivered on his promise. One proposed regulation to keep an eye on is the Mortgage Choice Act of 2015 that failed to reach the Senate after passing the House. Whether the bill becomes a law all depends on how past objections to such measures as consumer protections get addressed this time around. When the bill was introduced last year, it was supported by several industry organizations, including the Mortgage Bankers Association (MBA).It would have amended and clarified the qualified mortgage definition in Dodd-Frank, thereby improving access to credit and qualified mortgages for low- and moderate-income borrowers while protecting consumers from bad loans. The measure would also adjust the Truth-in-Lending Act (TILA) definition of fees and points by exempting points and them on any affiliated title charges and escrow charges for taxes and insurance from the qualified mortgage cap on points and fees.

What does this all mean? Of course these changes will also mean an uptick on mortgage rates. While we talked about increased rates before the elections, it is almost a sure thing with the new administration. In fact, we could easily see mortgage rates rising up to 6 percent within first year of the Trump administration. We know there are changes on the horizon because nothing in this industry stays the same for long. However, with the administrative change, we will have to be patient and wait and see the magnitude of the change and then, as we always do, adjust so we can continue the business of lending and servicing.

Sanjeev Dahiwadkar is president and CEO of IndiSoft LLC, a Columbia, Md.-based global technology development firm that provides collaborative, real-time workflow solutions, customized for the entire financial services industry. Sanjeev has 20 years of experience in the financial industry.

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All about the economy Another area we should watch closely as we move into a new year with a new administration is the economy. Before the election, the MBA projected a decrease in unemployment and an uptick in the purchase market for next year. If the economy manages to grow (either on its own or due to policy changes from the new administration), we could begin to see more relaxed regulations even faster because the mostly Republican House and Senate will see fewer regulations as a catalyst for additional economic growth. We know the increase demand in housing market, like in past, will be directly proportioned to the growth in the economy. And if the promised tax cuts for individuals and corporations become a reality that would put more money in consumers’ hands, which directly feeds into the confidence in home buying. In fact, with the recent Carrier

deal (which saved 1,000 jobs from being relocated to Mexico and promised the company a tax rebate of up to $7 million in the next 10 years), we are seeing strong desire to cut corporate tax from 35 percent to 15 percent. Additionally, at first glance, some people may not see the link between Obamacare and the housing industry; however, the ever-increasing premiums in health care have made consumers more worried and less confident about making big purchases, especially buying homes. If the Trump administration does in fact provide a practical alternative to Obamacare that will help consumers feel more in control of their healthcare premiums, we could also see the purchase market grow. If initial changes by the new administration head in positive directions (meaning people see that they have more money in their pockets and businesses have more alternatives in getting consumers qualified for mortgages), then I would not be surprised to see discussions about amending the qualified mortgage definition; especially a demand of exemption of points, title charges, taxes and insurance, etc. The biggest wild card under the new administration is Trumps’ insistence on pulling out of the Trans-Pacific Partnership, which was a secretive, multinational trade agreement that threatened to extend restrictive intellectual property (IP) laws across the globe and rewrite international rules on its enforcement. If this becomes a reality, it may have an unpredictable effect, mostly negative, on short-term economic growth. This single action has the power to nullify all other positive changes in the financial sector. This could be the reason growth

and innovation could stall again like they did in 2011 and 2012. Do not be surprised if riskier loan products make a comeback in the market. Governmentsponsored enterprises (GSEs) are getting back in the arena and taking more risk because of the rebound of the housing market. However, with Trump nominee for Treasury Secretary Steven Mnuchin calling for the government to sever ties with the GSEs, there is no telling what that will do for their appetite for risk. Congress ultimately has the last say in any reforms to the secondary market giants. And finally, another area that we will need to keep an eye on in 2017 is the discussion around large investments, which is an offshoot of quantitative easing (QE) that we have been living with since 2009. While the government’s investment to keep the economy moving may sound like a good thing for the financial market, it is actually an artificial life line that puts all of us at the mercy of central banks, and it really will not fix the cracks in economy. To make a true progress, the economy has to “breathe” on its own without the QE ventilator.

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here is a time-tested proverb that states, “Nothing but change is certain!” It could not be more true than it is now. This whole year has been full of noise from historic dirt-throwing, to shallow plans to scant policy details in a monumental presidential campaign that is finally behind us. Among the many promises repeated by President-Elect Donald Trump have been the repeal of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) and the agency created by it, the Consumer Financial Protection Bureau (CFPB). Could he actually pull it off? I doubt if there will be a complete repeal of Dodd-Frank. But, we can certainly expect to see some parts of the law challenged or even recalled, replaced or simplified; primarily around disclosures and compliance. Get ready for a year of change. Along those same lines, can the CFPB actually be demolished? Not likely, but we can count on some type of reporting oversight on the agency and a limit being placed on its powers. Plus, any changes to the agency will be used as bargaining chips to get other reforms pushed such as immigration. I am sure Trump’s team is well aware, or will become so shortly, that getting rid of the CFPB is just as hard as getting rid of Obamacare. While there will be tweaking and alterations to Dodd-Frank for which they will claim the victory, dismantling the CFPB cannot be completed easily or much less quickly. The question however remains around how immediate some of these projected and actual changes will happen. At minimum, we can expect at least one announcement during the first 100 days of the new administration. This will likely happen during the first week of March, which will be symbolic because it will show American

By Sanjeev Dahiwadkar

Crafting Your Digital Mortgage Strategy for 2017 By Valentin Saportas nyone who attended this year’s Mortgage Bankers Association Annual Conference got a completely different vibe than that of the 2015 conference. While the dominant topic in 2015 was regulation—TRID to be precise—the indisputable focus of the 2016 conference was digital mortgages, and in particular, delivering a consumer-friendly digital mortgage experience. Perhaps the biggest news of the event came from one of the industry’s most visible leaders, Fannie Mae, who announced its Day 1 Certainty initiative. Among other things, Day 1 Certainty gives lenders freedom from representations and warranties with respect to important parts of the mortgage origination process that have traditionally been paper-based, such as asset, income and employment validation. The technologies behind Day 1 Certainty make it possible for lenders to gather borrower data

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in digital format and submit it to Fannie Mae digitally for an easier, quicker and more accurate review and verification. This digital process not only benefits lenders by making the process more efficient and less costly, but it also benefits borrowers in many ways, primarily by making the mortgage experience less document intensive. For example, instead of asking borrowers to provide PDF bank statements multiple times throughout the process to verify assets, borrowers can now link their bank accounts to the lender for the duration of the mortgage process and avoid what usually becomes a prolonged back-and-forth with the lender for just one of several documents that must be submitted for underwriting. Why your growth strategy for 2017 should include digital mortgages If process efficiency and a more seamless consumer experience is not compelling enough for you to consider going digital in 2017, consider this then: More

and more borrowers are demanding a better, digital mortgage experience and you will miss out on their business if you cannot effectively deliver it. Companies like Quicken Loans’ Rocket Mortgage and many other technology-enabled mortgage lenders are spending millions of dollars every month to raise consumer awareness about a better home loan experience powered by technology. Even if you pride yourself with providing the best customer service, your customers too are hearing this message. And it’s not just your customers, it is also your referral partners and employees who are hearing it loudly and clearly. Therefore, a comprehensive digital mortgage strategy includes all stakeholders in the mortgage process and addresses the needs of both external and internal participants. In addition to making your mortgage process more efficient, helping you recruit loan officers, reducing costs, increasing online conversions and helping your organization

Facebook for OrigiNators Join the new Facebook group by searching for “OrigiNation.” This public and open group features information that will be featured in the “OrigiNation” column in National Mortgage Professional Magazine, with your consent of course, by Andy W. Harris. People want to hear from you, the mortgage originator, from the good stories to the bad, from the funny to the serious … take this opportunity to connect and share. Search today on Facebook and join the group! 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.

deliver a seamless experience through multiple channels, other benefits of going digital are related to compliance and data analytics. Modern mortgage platforms—oftentimes in conjunction with your loan origination system—allow you to design workflows around important compliance events, such as making sure you provide disclosures to a borrower within the established regulatory timeframe. Modern mortgage platforms also make it easy to track and log any changes made to a loan file, so there is never any doubt as to who did what and when. For example, your platform can log the exact time the borrower submitted the 1003 or if and when the borrower made changes to the 1003 after submitting it and exactly what changes were made. If the loan officer makes changes, it can also log that with precise timestamps and allow the loan officer to add notes relating to that change. Finally, today’s digital mortgage platforms are built with data analytics and reporting in mind. They can either allow you to easily access and view the data collected through the platform or integrate with your preferred data analytics and business intelligence dashboard to seamlessly and securely transfer the data from one system to the other. As the business teaching goes, “you can’t improve or manage what you don’t measure”, and it has never been easier to collect and analyze business data with new and affordable solutions in the market. One quick piece of advice: If you don’t yet have a data analytics or business intelligence solution, don’t go overboard with it. Start by identifying three or four actionable key performance indicators (KPIs) and, if necessary, grow from there once you have a good handle on those. Crafting your digital mortgage strategy Although it may seem like a daunting task, putting together a digital mortgage strategy does

not have to be difficult or even prohibitively expensive. Here are some tips for putting together a digital mortgage strategy tailored to the needs of your organization: 1. Don’t try to do everything at once. Even if budget is not a significant constraint, the best results usually come from putting together a good plan upfront and executing it in phases. This way you can go live sooner, collect feedback from multiple users—and different types of users (not just consumers but loan officers, processors, etc.)—and then iterate your plan based on that feedback.

There is, of course, overlap between different channels and your digital mortgage solution must adapt to whatever the situation may be. But regardless of the channel, the consumer experience must leave a great impression on your borrowers and referral partners alike to

ensure they will continue referring their friends, family and customers to you. After all, there is no marketing like word-of-mouth marketing and that applies as much in today’s digital world as it did decades ago—perhaps even more now because reviews, good or bad, are easily accessible and significantly impact your ability to acquire customers.

Valentin Saportas is co-founder and chief executive officer of MortgageHippo, a mortgage platform provider that works with lenders to devise and implement their digital mortgage strategies. Before starting MortgageHippo, Valentin was a finance attorney at the bank lending group of a large Chicago-based law firm. He may be reached by e-mail at Valentin@MortgageHippo.com. 91

www.LykkenOnLending.com

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3. Put together a crossfunctional team to work on the project. In addition to any tech employees, you should consider having a project manager to be the main point person with the platform provider and make sure things are getting done (the platform provider will have their hands tied with respect to many tasks that only an insider can do, like requesting an integration with a third party with whom they have not yet integrated). Furthermore, depending on your digital mortgage strategy, you should also ask

4. Different loan origination channels must be addressed differently. A direct-to-consumer division operates very differently from a branch or a loan officer. As a result, the user flow and experience of your platform should adjust to the channel, not the other way around. Let’s take a look at two common origination channels for many lenders: l Direct-to-consumer: In a direct-to-consumer channel, a borrower is more likely to come directly from an online source to a lender landing page or Web site. The main focus of your digital mortgage strategy for such a borrower is to capture and convert him into a qualified lead, without forcing him to speak with a person right away (online consumers are more likely to bounce if they don’t get what they’re looking for on your Web site). The new borrower onboarding experience is very important, making sure, among other things, that there is a smooth handoff from your lead source— whether a search engine like Google or a lead generator like Bankrate or LendingTree—into your digital platform. l Loan officer: A loan officer will probably have a conversation with the borrower first (whether over the phone or in person) and therefore that borrower is much more likely to stick with you than an online consumer who doesn’t have any loyalty towards your company. The focus of your digital mortgage strategy for LOinitiated borrowers should be to help the LO complete the 1003 application as seamlessly and accurately as possible and facilitate the interaction between the

LO, the borrower and other parties involved throughout the process.

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2. Work with a technology provider that will take the time to understand your needs. Presumably you will be working with an outside technology company that will provide a solid foundation for your platform—as opposed to building a platform yourself (a feat not every lender will be able to successfully achieve). Make sure that this company’s platform can be customized and configured to your needs and is not a one-sizefits-all solution. Take the time to discuss your current workflows and processes with your provider and understand how the platform fits into the current flow and/or what adjustments will be necessary.

a loan officer and a loan processor to provide feedback to the team at various points in the process.

Digital Marketing Helps Mortgage Pros React to Changing Conditions By Craig Rowe nline advertising that leverages remarketing technology allows mortgage professionals to react to changing market conditions and inspire confidence in new customers. Bankrate.com reported recently that the 30-year fixedrate mortgage climbed slightly for the first time in months, landing at 3.64 percent. That’s pretty important news for mortgage shoppers. Actually, these days, interest rate news is important for everyone. It’s also the type of news that mortgage professionals should share as soon as possible with customers, prospects and real estate colleagues. Traditional marketing methods like direct mail and print should be part of every well-rounded marketing plan. Each method of outreach has its place, but some are more nimble than others. Digital advertising gives mortgage professionals the ability to build effective, reactive advertising campaigns—so you can share the news before your competitors do. Today’s Internet display ad tactics employ simple, affordable technologies that

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allow local, independent mortgage professionals to match marketing wits with the biggest of the big. The most savvy approach to online advertising is to employ a marketing technology called “Retargeting,” which uses stashed browser data (cookies) to track online consumers, and it’s an ideal solution for the browsing habits of home shoppers. This novel approach to marketing keeps a mortgage brand in front of online shoppers after they leave your site. A loan officer’s ads can be displayed on the some of the most trafficked, consumerdriven online destinations, such as Trulia, YouTube, and USA Today.com. Beyond such compelling reach, digital display advertising for mortgage professionals is a proven way to encourage viewers to react, especially when used to promote events or major market news. Bold, expressive CTA (calls to action) shine through online advertising and help drive measurable clicks to a website, article, or event sign-up form. Once set-up with an account on a mortgage advertising platform like Adwerx, ad content can be

“Digital advertising gives mortgage professionals the ability to build effective, reactive advertising campaigns—so you can share the news before your competitors do.” changed quickly so users are never beholden to the same message for weeks on end. When interest rates change, an ad can quickly be altered to reflect the news and encourage readers to click through for more information, sign-up for a newsletter or provide pre-qualification data. Mortgage pros using digital advertising can quickly amplify other online outreach efforts, such as a white paper or online first-time buyer seminar. The ability to edit digital ads quickly and link them to an array of landing destinations opens a new world of marketing flexibility. Retargeted display ads can be quickly measured so messages can be tested and refined, especially as they relate to website traffic and converting prospects to customers. Additionally, online ads create a level of brand consistency, as consumers are repeatedly presented with your message within the context of a trusted web presence. Naturally, this establishes familiarity and instills confidence in the minds of prospects. Print advertising, direct mail and local event sponsorship are proven ways to reach your audience. And their impact can

also be augmented considerably when tied directly to an online campaign. At every chance, mortgage professionals should be including their Web sites and online profiles on tangible marketing assets, especially direct mail. When an interested party lands on your site, the power of retargeting can be leveraged, creating a memorable, wellbalanced marketing presence in the mind of potential customers. It’s not just about news, sports and other popular consumer sites because digital ad campaigns can also filter into the Facebook feeds of pending homebuyers. Plus, the powerful targeting capabilities of online advertising enables mortgage professionals to target directly real estate agents within a specific zip code. As a result, you can get in front of the people and professionals that already do business in your community, strengthening your local presence. Online advertising shouldn’t be a scary notion for mortgage professionals. It’s not expensive, either. What it is though, is critical. The center of media attention for consumers has shifted to the Web, and it’s not altering course any time soon.

Craig Rowe is a contract copywriter and 15-plus-year veteran of real estate marketing and communication strategies. He is Inman’s real estate technology columnist, writes about the outdoors, and works as a seasonal wilderness guide in northern California.

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Add Builder Business to 2017 and Take a Walk on the Wild Side! By Shirleen Von Hoffmann t’s that time of year where we are preparing for the holidays and year end, and thinking about the New Year to come. So, what will your business look like in 2017? Here’s something to think about … rates are low and have been low for some time now and everyone who wanted to refinance has probably done so. With pressure for rates to rise, then your plan should be entirely a purchase business plan for 2017 and 2018 and always. With purchase business representing real estate agents and builders, I want to speak to builders because that’s my specialty. I find that people who do builder business can be wildly successful or not. It depends on the skill, preparation and support.

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For owners and managers Builders and the mortgage divisions that support them took a back seat during recession. Building a team and support on that team to do builder business takes time, it’s not something you do overnight. You want to be prepared for builder business, be imbedded in the builder industry and known as a capable, dependable builder lending provider. You want to have your sales team in play and trained, as well as your support team. Your support team should be in house and really have builder business

nuances down to a science. My message to you is you need to prepare for builder business now … don’t wait for when rates drop. Now is the time because it takes time to brand your company as a builder’s lender, find and train your sales team, onboard a division, as well as your support staff, and get your team builder certified. Waiting and scrambling around at the last minute won’t work because others will be well ahead of you. It can take months or even years to brand, market, obtain and close builder business … so, what are you waiting for? For loan officers My message to you is, you also need to prepare and plan, and I promise your business will change. I tell my students that if they called consistently on 10 builders for a period of two months, they would get business. Assuming of course you have some of these essential elements in place. Plan and prospect When planning your new year, why wouldn’t you want to do builder business? Would you rather get 15 loans a year from a real estate agent or 150 loans a year from a builder? However, nothing in this world, worth anything, ever comes easy. You must plan every step.

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You would never land in a new city without a map. Come up with a vision of what you want to achieve. Put it in writing and set goals to each vision you have. Then, come up with a plan to make it happen. An example is to figure out what builders you want to call on, and then your plan will include a route to visit builders weekly. Dedicate two days out of your week solely to builder prospecting calls. Go where your builders are Join the local building industry associations and become involved. Make sure your team is trained to do builder business. One mistake can ruin all of your efforts, but most importantly, your brand. Get your loan officers and operations teams certified to do builder business. Speak builder language There is a builder language your team must understand, so make sure they know their stuff. Knowing the nuances of builder business can me be one thing that gets you the job. Finding builders There is some amazing reporting out there that can tell you where to find your local builders who are building homes in your area and the lenders working with them. Have a dedicated builder division You need a team that can execute high volume builder production. Processes, training and building a team like a machine will be the most important part of your success. Focus on processing, underwriting, reporting and a fastpaced execution where builders and buyers have five-star service. The volume makes it worth the effort.

Fast growth One of the most common mistakes made with builder business is growth. It comes very fast and you have to be ready for it with support, process and a plan. There is no room for firefighting. You will have to be ahead of the fire at all times by creating systems that can accommodate high volume growth. Honor your promises … always If you give great service, have a great team, under promise and over deliver, close on time every time, you will be ahead of 90 percent of your competition when it comes to builders. There is no compromise on this, if you don’t follow through with what you say, you will not be around. Credibility is everything. Maintain-retainrefine-reinvent As time goes on and as you get busier each month, in order to maintain and retain, you must refine and reinvent your systems, constantly. Define your processes, make them better and reinvent your team to be better with each closing keeps you at the top. The goal is to have a well-oiled machine. If you stay on top of all of your business and ahead of the game, you will always remain at the top. Never become complacent, as you can always improve. Always learn from your mistakes, they are your blessings. Get a coach A coach can be the one thing that will keep you in check and keep you from becoming complacent and help with growth. There are all kinds of coaches for all kinds of personalities. You definitely need to find someone who will hold you accountable, that you align with and that you honor and respect. All superstars have coaches and you are no different. Hopefully, your new coach knows about builders, like myself.

Shirleen Von Hoffmann is national director of the Builder Group and vice president of Summit Funding. She may be reached by phone at (866) 600-3343 or e-mail SVonHoffmann@SummitFunding.net.

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People, Process, Product and Price Drive Growth in a Changing Market By Jim Clapp

his year, successful mortgage lenders have adapted to compliance regulation changes, online applications and appraisal delays. In 2017 and the coming years, the changing environment will require mortgage lenders to focus on purchase mortgage originations, a significant drop in refinances, as well as changes in technology and customer’s expectations. If we look at the landscape of the industry, the Mortgage Bankers Association (MBA) is forecasting an 11 percent increase in purchase mortgage originations and a 46 percent drop in refinances due to rising interest rates in 2017, according to the Nov. 17, 2016’s MBA Economic and Mortgage Finance Commentary. Although higher interest rates will decrease refinance activity, it should not negatively impact the demand for purchase loans. The projected purchase growth is based on the projections of a stronger domestic economy, increased household formation, continued job growth, rising wages, strong retail sales and further home price appreciation. Additionally, the Joint Center for Housing Studies of Harvard University is projecting that housing construction should significantly increase with an average of at least 1.6 million units a year over the next decade. Residential fixed investment (including homeowner improvements) has accounted for just 2.8 percent of the annual GDP in this decade compared to the 4.3 percent share averaged in the 1980s and 1990s. This leaves plenty of room for growth over the next decade. In 2017, Starkey Mortgage is continuing on a growth initiative with the goal of being a top 30 residential lender in the country.

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Our business is 90 percent purchase lending and like other purchase mortgage lenders, we depend on the relationships that we cultivate for the business referral. Our referral relationships, some of which have been cultivated over the course of a decade, are with real estate agents, builders, financial advisors and satisfied customers who continue to refer us to their friends and relatives. To thrive in this changing market, lenders must focus on the Four P’s: People, Process, Products and Pricing. Our firm started this new chapter of growth with a focus on People and Process. As compliance demands, customer expectations, and technology innovation have changed in the industry we made a major investment in our Loan Origination Software (LOS) and in the last six months, have hired new team members with a wealth of experience to improve our mortgage processes and marketing campaigns. People l Training: As the market changes, team members need continuous training and coaching to help a company meet their growth goals. A strong training department is a necessity and if a company needs help in this area, training companies such as Xinnix Academy can help fill the void. We have successfully created Starkey University for training our team members, onboarding new team members and developing the next generation of loan officers. The median age of a loan officer in the mortgage industry today is in the 50s and Starkey has a boot camp program to identify, cultivate, and mentor young talent and develop the next generation of successful mortgage loan

officers. For new loan officers, we have developed a 60-90 day plan to help them acclimate to the new systems and meet the people they need to know to get their job done with the least amount of frustration. For example, assigning a dedicated operations team to a new loan officer as well as someone to oversee their pipeline helps a loan officer transition to a new company in the shortest amount of time. l Community involvement: To make an impact on a community, companies need to invest in the community with volunteer hours and financial donations. Starkey’s Community Connection program provides a way for the company to contribute to charitable organizations in the communities it serves throughout the year. Our team members also volunteer in their communities as part of the Starkey Charity Challenge program, logging more than 3,000 hours with 175 community organizations this year. Process l Loan Origination Software (LOS): Changes in customer’s expectations and compliance regulations require a sophisticated LOS system. While it is a significant investment for any lender along with its people, the LOS is the bedrock on which a company is built and the upfront investment is small compared to the reputation and financial cost of a compliance infraction or platform inefficiencies. We invested in Black Knight Financial Services’ Empower LOS to provide additional value to our sales and operations staff through a single source automated

system from origination to post-closing. Additionally, the system provides the most effective compliance, improves the connection and efficiency between departments, streamlines data and document input, improves data tracking and pipeline management. This investment brings a better customer experience, meets compliance regulations, allows the sales force to focus on growing their business and helps build a deeper trust with referral partners. l Marketing: A strong marketing department drives business to the sales team generating marketing qualified leads (MQL) and supports them with the tools they need to grow their business relationships. In today’s fastpaced technology-driven world, a strong marketing team is not a “nice to have” but a “must have” for success. A vital part of marketing is understanding how the demographic trends continue to evolve in the United States. According to Joint Center for Housing Studies of Harvard University, The State of the Nation’s Housing 2016 report, Millennials are finally entering the housing market in earnest. As Millennials enter their 30s, they are expected to form well over two million new households each year on average, raising their numbers from 16 million in 2015 to a projected 40 million in 2025. Additionally, the Harvard study shows that Hispanic immigrant Millennials will increase the need for housing as they age, adding to the strong demand expected from what is already the largest, most diverse generation in history. When you combine these demographic trends with our growing reliance on technology, the marketing mix must include social media. According to Pew Research Center, 72 percent of Americans use Facebook followed by Pinterest (31 percent), Instagram (28 percent), LinkedIn (25 percent)

People and Process, we look forward to significant growth in 2017 and in the coming decade

to help thousands of more Americans experience the dream of homeownership.

Jim Clapp is president and chief financial officer of Starkey Mortgage, where he oversees the management of all financial and accounting functions for the company. Jim has more than 28 years of experience in commercial banking with a focus on mortgage financing.

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Are you positioned for growth in 2017? As mentioned earlier, to thrive in

2017, companies must focus on the Four P’s: People, Process, Products and Price. The first step is to determine your strengths and weaknesses and build your 2017 plan around maximizing your strengths and filling in the gaps where weakness exists. Focused on

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and Twitter (23 percent). As mortgage lenders engage in social media, there are creative ways to create social media content that resonate with homebuyers and loan officers, while meeting compliance requirements. l Customer satisfaction: Each loan depends on a referral or previous customer review. A good review cultivates numerous additional loans, a few bad reviews can kill a business. Starkey Mortgage is now working with MortgageSAT which provides direct borrower feedback 24/7 to receive live updates on customer reviews. Of course, the good reviews we all love to share, but from time to time most companies get a bad review due to outside circumstances. MortgageSAT alerts companies, which enables top management to contact an unhappy (dissatisfied) customer very quickly. As perverse as it sounds, we recognize that a bad review provides significantly more value to the organization than a good review as it draws our focus to areas that need improvement and will make us a better company. l Communication: As companies continue to grow, it’s important to share information so all team members have an understanding of the company’s goals and reasons for changes that affect the company and its team members. We recently revived the monthly company newsletter, hiring an outside source to interview selected team members and create a new edition each month. The newsletter shares the company’s leadership message, features team member and branch office profiles, business tips, community involvement, new hires and anything else of interest that brings the team together.

Staying Flexible in a Rollercoaster Origination Market By Timothy Moreland orecasting mortgage origination volume today is about as easy as forecasting the weather at the beach. In late 2015, most major economists were forecasting a slight downturn in origination volume for the New Year, based upon the belief that the primary interest rates would rise, albeit marginally, through 2016. Many of the forecasters also felt fairly strongly that 2016 would be the year of the return of the purchase market, as higher interest rates drove refinance applications down. The Federal Reserve Board helped set the tone with a modest increase to key interest rates in the first quarter of the year.

Since then, however, the weather has changed. By February, the Mortgage Bankers Association (MBA) had already revised its 2016 forecast to $1.48 trillion (up from a January forecast of $1.38 trillion). Of note was the fact that, of that new $1.48 trillion in origination volume, MBA’s revised forecast for refinance volume would jump from its original estimate of $454 billion to $520 billion. It appears, as we near the fourth quarter of what has been, for many, a surprisingly successful year, the reported demise of the refinance market was premature. For the most diligent of mortgage lenders and real estaterelated businesses, this was the

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year to buckle down and prepare for a more competitive, purchase market. The “fish” would not be “jumping into the boat” as they had during the reign of re-fi. The most obvious play in the playbook during times like this: Cut staffing, reduce expenses, maintain profitability. Then came the decision of the United Kingdom electorate to leave the European Union and the subsequently roiling of global markets. Those world markets continued to bubble and investors sought increasingly safe investment opportunities, likely resulting in a surprisingly increased yield on 10-year Treasury notes in spite of the Fed’s first interest hike in years. Many now believe that, should the 10-year Treasuries continue on this path—and many believe they will for at least the foreseeable future—mortgage origination volume will remain high. Then again, many were confident at this time last year that the refi boom would soon sputter to a close. For the mortgage-related business, staffed and equipped for a market showing decreased volume, a timeless conundrum has arisen again: Do I remain “rampeddown” in anticipation of a market dip in the near future (thereby leaving money on the proverbial table during the current spike), or do I ramp up in the hopes that this spike continues for a significant period of time, raising my costs, but increasing my ability to capture as much business as possible? The wrong answer, of course, could lead to more than a few pitfalls. And the fact is that any number of disruptive events could foreseeably alter, yet again, the current course of the market. Scalability has long been a challenge on a grand scale for our industry. Complex, multi-tiered and ever-changing regulation in almost every aspect of the business have harnessed a businesses’ ability to adjust almost any element of its operation without first running a thorough compliance evaluation. The market itself—especially over

the past 10 years—has been historically volatile. Firms that once forecasted one to five years ahead have been reduced to forecasting one to five months ahead. And the fact that ours is now almost entirely investor-driven means that the decisions and needs of the government-sponsored enterprises (GSEs) and Wall Street can change the market at a moment’s notice as well. So how does a firm of any size stay “right-sized” in the face of this volatility? Unfortunately, there is no silver bullet solution. But there a number of operations-focused and common sense tactics that can allow a business of any size to capture its fair share of business without overcapitalizing. Outsource, but do your homework Although some still view “outsourcing” businesses with skepticism, today there are a number of reputable firms able to provide outsourced services with quality, accuracy and an eye to compliance (both to investor requirements and regulatory mandates). For many, the mortgage process has too many moving parts; too many interested parties and too many opportunities to add cost, delay and error to manage each and every function in-house. This is not to say all outsourcing firms can bring cost efficiency and optimize your process. In fact, a failure to thoroughly vet potential partners in the selection process can now bring about regulatory enforcement action. But the choices available to lenders and other real estate businesses are far more appealing. Don’t forget that data, reporting and other services traditionally within the realm of some service providers (e.g. abstracts coming through a title agency) can also be directly outsourced without the cost markup of “the middle man.” Again, however, quality and accuracy rule the day when it comes to using such outsourced products. The outsourcing market segment has, indeed, come a long way. Use versatile, adaptive service providers It’s simply not enough for you to be flexible in your strategic approach. Your service providers—whether title and settlement firms,

valuation/appraisal, technology or servicing—must be resilient and flexible as well. It’s likely that the origination market will change again … and again. If your service providers specialize in refinance, a true purchase market could lead to significant delays and errors in your process. Make sure that flexibility is organization-wide. We’re seeing many different kinds of “partnerships” today among service providers, but not all are marriages made in heaven. When vetting your service providers, and managing, make sure that all elements of the operation are scalable and able to adapt to a rapid market change. Also, be aware that there are two sides to technology. Be sure your service providers are making use of technology that fits their services, and that they have adequate personnel and training as well. After all, the old axiom “garbage in, garbage out” remains true— especially when it comes to mortgage data.

successfully adaptive business to be in tune with all of its partners as though they were internal

departments themselves. To ignore this reality is to leave your future to chance.

Timothy Moreland is senior vice president at ATPR Inc., a provider of technology-based solutions for the real estate lending and settlement services industry and a whollyowned subsidiary of SLK Global. He may be reached by e-mail at Timothy.Moreland@ATPRInc.com.

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. MOBILE WEB APP

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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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Make sure not only that your workflow and operations are efficient, but that your partners’ are as well You’ve installed the latest and greatest loan origination system (LOS) for your enterprise. You’ve visited and revisited your workflow and operational processes to eliminate chokepoints and opportunities for delay, waste and even fraud. Your staffing is flexible. You’ve outsourced non-core functions. But have you looked closely at your partners’ operations? If not, you may be leaving yourself exposed to higherthan-necessary costs; potential delays or errors (especially during market shifts) and even regulatory/enforcement risk, especially where the actions of the service provider impact the consumer. Successfully flexible firms want to see embedded technology within their partners and the elimination of as many manual processes (especially data entry, etc.) as possible. Such firms measure the quality of the personnel and training of their partners. If their partners use vendor networks of their own, how seamlessly do they interact and collaborate? What’s the quality of data, services or products provided by those fourth party

partners? The reality today is that bringing everything “in house” is rarely the optimal strategy for addressing sudden market dips and spikes. This means that your networks and partnerships are more critical than ever. It also means that not just any service provider will do. It’s up to the

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Orion Lending Chooses A Case St hen Orion Lending, a nationwide mortgage banker, launched in 2014, management went in search of appraisal management company (AMC) partners. Company President Jeremy Stewart, an experienced industry executive, knew that he wanted his company to work with a respected AMC. He started looking by reaching out to industry contacts, a number of whom gave positive references for Class Appraisal. He then

researched the company online by following executives on LinkedIn before making contact with the team at Class Appraisal. “We knew that, as a wholesale lender working with a network of third-party loan originators, we needed to have a good relationship with one or more appraisal management companies,” Stewart said. “My goal was to find and partner with very solid, trustworthy and reputable AMCs. We reached out to our peers and Class Appraisal came back highly recommended.” Stewart and his vendor management team met with a

number of AMCs as part of the process of vetting a new partner. They were looking for the right fit and a partner that matched our fundamental standard of excellence. At the core of the firm’s business philosophy is a commitment to extraordinary service, honesty, and clear communication. The company uses innovative technology, a wide array of products and competitive pricing to assist its network of originators in growing and developing their referral business and clientele. Stewart wanted to make sure that any AMC he chose to work with

shared the same values. “By and large, Class’s platform was something that aligned with our philosophies and vision,” Stewart said. “Class has become one of our premier AMCs.” Getting started with Class Appraisal Still very much in the process of building its successful mortgage banking platform, Stewart admits that the great people at Orion have plenty of work on their desks. A lengthy implementation process for a new AMC partner was not something he had time to pursue. Fortunately, Class

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Appraisal made setup easy. “Class Appraisal’s process is very smooth,” Stewart said. “They employ pure professionals for their compliance and attorney teams, which are very involved in the setup, especially in regard to how the systems integrate with one another. Their team truly made that process for us very simple.” While the process was simplified, there were still quite a few implementation logs to lift. Agreements were created, systems integrated and a smooth process for operating was developed by a team made up of

Orion and Class professionals. Compliance was carefully considered, as was the flow of work from the time the valuation was requested until it was ultimately delivered to the underwriting team. Results: A strong and valuable partnership The lender-AMC relationship is very important, because while they are separate firms and the AMC is a vendor to the lender, from the outside perspective it can be hard to distinguish between the two. “When we’re working on transactions for our broker

partners and their borrowers, they don’t often see us as two separate entities, although we are,” Stewart pointed out. “The AMC’s performance is a reflection on our company and poor performance can cost a lender business.” From his own perspective, having transparency and exceptional visibility into vendor performance is critical. He is well aware of Class Appraisal’s performance because the company’s custom reports, statistics and performance metrics are made available to him on a regular basis. But perhaps

most important to the success of this new partnership is the fact the Stewart knows Class Appraisal shares his company’s values. “Success in this business requires a lot of discipline and a specific vision,” he said. “You must have excellent peripheral vision and be able to look past the hood ornament and down the highway while maintaining a finger securely pressed on the market and its pulse. Class Appraisal understands this because they also have a long term vision for their business. I like that and it’s been a good partnership.”

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es Class Appraisal: Study

CampusT s we wrap up 2016, we look forward to 2017, making resolutions and ideally, following through on them. How many of your 2016 resolutions were kicked to the curb just a few weeks into January? In the year 2017, I urge you to re-dedicate yourself to education and training on both regulatory issues, and mastering the skills

necessary to ensure your ability to always have leads and clients in abundance. In an industry like ours, where rules and regulations are constantly changing, and marketing strategies need to be tweaked, it is your responsibility as a mortgage professional to remain ahead of the curve. Some originators rely on their company to provide all that is needed to know what is happening. I believe that, as a mortgage professional, it is in your own best interest to

seek out as many resources as possible to become the professional mortgage originator that your clients and referral partners want you to be. nmpU will remain ahead of the curve in 2017. As the constant of change happens, we will remain on top of these changes, guiding you along the way as you seek to enhance your professionalism as you look to create or maintain a competitive advantage in the market.

One method we are upping the educational ante is through our nmpU Livestream events. These interactive events are taking off, as we are presenting nmpU Livestream events to companies around the country, through private training events on developing purchase business. The format of the program is a live and interactive video (not Webinars), giving companies access to high-level success training without the travel

sTalk expenses and lost time in the field that comes with gathering a team in one centralized location. We are making the most of the latest in video conferencing technology to bring education directly to your desktop. nmpU’s Group Coaching will be coming in early 2017. This will allow originators to partner up with other originators to learn in a group environment via live video conferencing. This creates a more interactive approach to

By Ron Vaimberg

success coaching than typical conference calls. Originators receive success training and assignments, and accountability is a key component to moving originators forward in accomplishing their goals and raising the standards for how they perform in the field. Group Coaching will reduce the barriers to obtaining coaching services, due to reduced pricing for participation over traditional oneon-one coaching programs. Stay

tuned to this column for more as we move forward. With the anticipated surge in purchase business in the first quarter of 2017, according to the Mortgage Bankers Association (MBA), knowing how to develop a purchasebased business is more crucial than ever. nmpU will be announcing a national tour of “The Ultimate Purchase Originator Bootcamps,”

scheduled throughout the U.S. in 2017. The full tour schedule will be available online shortly. As we turn the page on another year, a dedication to education should be at the forefront. nmpU will help lead that charge, so stay tuned and get ready because a simple investment in time towards education can lead to a significant increase in your bottom line in 2017.

Ron Vaimberg is executive director and head coach for nmpU, a division of National Mortgage Professional Magazine. Ron is a leading trainer and coach to wholesale and retail mortgage professionals and the creator of ForAEsOnly.com. Ron can be reached by phone at (888) 979-6678 (nmpu), ext. 801 or by e-mail at RonV@NMPMediaCorp.com.

DECEMBER 2016 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

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How to Handle the

Underwriter Shortage killed underwriters are a pretty hot commodity right now. While this is great for that handful of skilled, experienced professionals, it’s causing some difficult challenges for hiring companies—namely, mortgage lenders. As a former underwriter, I cannot help but feel happy for my tribe—a hardworking group that, let’s face it, has taken the brunt of the blame for a lot of issues in this industry. Fortunately for them, the tides have started turning. First came recognition, courtesy of the foreclosure crisis, which took us out of the background and into the spotlight. More recently, it’s the tech industry that’s making waves, as its constituents scramble to disrupt the mortgage industry, with the fury of a nine-year-old chasing Pokémon. Ours used to be the broker vs. banker battle. Now it’s start-up vs. experienced, tech vs. tried-and-true. We don’t know who’s winning the war, but I will tell you who’s coming out on top: Underwriters. And who’s getting the short end of the stick? Lenders.

The underwriter shortage and how to handle it Why is this happening? Aside from normal attrition and increased demand created by on-again/offagain refi booms, we now have wellfunded startups infiltrating our industry. They’ve got their eyes on the industry’s skilled employee base and they’re dangling some pretty attractive perks in front of them. In addition to higher salaries, these companies offer Silicon Valleyesque benefits that range from extra cash each month for paying student loans to dog-friendly offices. And it’s working. Employees—including some of the more skilled positions, like underwriters—are flocking to these companies, leaving traditional lenders in the lurch, and in the middle of a precarious refi boom, no less. So what’s a lender to do? One of the solutions I see lenders moving toward is outsourcing the underwriting function. It makes a lot of sense, particularly in unpredictable markets like the one we’re in. The primary benefit of

outsourcing is that scaling is oh so easy. But don’t think you can just put on your blinker and take a right on to Easy Street. There are a lot of things lenders need to know before they employ this remedy. Do your homework before taking the plunge. The most inexpensive outsourcer could end up costing you more than you planned to save, and viceversa: the seemingly most expensive could end up saving you thousands. Underwriting is detailed, and the mortgage industry is subject to a lot of regulations. One false move could cost a lender dearly, and when I say “dearly,” I mean fees and fines so high they could trigger a major downsize or even closure. So how do you protect yourself? You’ve got to ask the right questions and know the right answers. Qualify outsourcers in three categories First, take a good look at the outsourcer’s technology. An uncountable number of details are involved in every transaction, and all of those little pieces need to be cross-referenced, verified and made consistent with every system involved in the transaction. Find out which technology systems the outsourcer uses. Make sure you can integrate your LOS, system-tosystem, with theirs. Both companies’ data and processes must be synced and updated in real-time. Details matter. Little mistakes can extend transaction times by days, a week or sometimes more. If, for example, your system indicates the subject property as condo number 12, but in reality, that condo is number 15, all files should reflect that. That correction should not be limited to the underwriter’s file. The same goes for other decision data points. If, for instance, the borrower listed $50,000 in assets but only has $48,000, that discrepancy needs to be adjusted across the board. DU approvals can be tricky. In my experience, it’s best to err on the side of caution. You don’t want any discrepancies in decision data points, however minor. The second point you should evaluate and understand is the outsourcer’s audit practices and

policies. You cannot take promises at face value. You need to know that the outsourcer does what it says it does, not just in workflow, but with training and hiring as well. Evaluating audit programs isn’t an open and shut activity. It can be time consuming. But do yourself a favor and take the time to be thorough. Don’t cut corners. Your goal is to only use competent and qualified underwriters. In addition to being trained and educated properly, every underwriter must be thoroughly background checked. Without exception, outsourcers should have a formal written program for hiring and training. Ask to see those guidelines. How, specifically, does the outsourcer conduct background checks on employees? How do they ensure that all references have been checked and that staff members meet their hiring guidelines? Employee screening is any company’s first line of defense. Make sure you can audit your outsourcer’s hiring processes. Underwriting is a skilled profession. Training and education is paramount. All outsourcers should have a program for testing underwriter competency, determining areas of weakness, providing training to develop and correct those areas, then re-testing once more for competency. They should also have a formal audit program in place. Know how often staff members are audited, and what that audit entails. If you’re dealing with a high quality outsourcer, you shouldn’t have an issue getting a copy of the documentation that outlines the company’s processes. Compare them to your company’s standards and tolerance levels. Your outsourcer’s processes should always meet or exceed your own. Make sure you can verify that they do what they say they do. The last factor major you need to evaluate is communication. This is

By Lisa Binkley

fairly simple to assess, but the details can be tricky because communication is very easy to take for granted. No one bats an eyelash when everything goes as it should. But when communication breaks down, mistakes get expensive. Losses can take the form of time, revenue and customer relationships. Find out your outsourcer’s communication protocol. Know who is allowed to communicate with whom, and by which media. Do they use a certain vehicle that automatically creates an auditable paper trail, or is that something you’ll have to manage internally, on your side? How are teams notified once the loan has funded? Make sure they have an automatic process in place for taking a final snapshot of the loan at funding. On a similar note, you’ll want to know how the outsourcer handles changes and updates. Know your outsourcer’s deadlines. Find out the point at which no more changes are allowed. You don’t want your team thinking it has one more day to make adjustments when the outsourcer has already passed its cutoff time. These types of mistakes can get expensive for everyone, including the borrower. These three areas cover the majority of issues that lenders encounter with outsourcers. Outsourcing can be a quickly implemented, cost-effective choice, but lenders need to be careful. They are responsible for all work contracted to any third parties. Outsourcers may say what they think you want to hear. Take the time to look beneath the surface. By the time you’re in the market for an underwriting outsourcer, it’s going to be tempting to rush to implementation. Resist that urge. Invest a few extra days. Evaluate each outsourcer thoroughly. The days you spend can save you weeks each year, while protecting your warehouse line and customer base.

Lisa Binkley is senior vice president with Platinum Data Solutions. Lisa has more than 15 years of underwriting experience that includes creating and managing quality control and fraud investigation divisions. Lisa has been chair of the MBA Quality Assurance Leadership Council, vice chair of the MBA Fraud and Ethics Working Group, and chair of the 2006 Quality Assurance Conference Committee.

new to market

Preparing for 2017 By Andy W. Harris, CRMS

Many of us just experienced the most successful year of our career in 2016. Not only were new homebuyers active, but interest rates were at some of the lowest levels in history following Brexit mid-year, and local market share opportunities were favorable. The only time Freddie Mac recorded lower mortgage rates in recent history was near the end of 2012 which many of us remember. As we know, the day following the Presidential Election, the markets reacted with a bond selloff that seems to have resumed for many days increasing interest rates considerably. While refinance booms are unstable and certainly not normal every year, it’s wise to take advantage while the window is open and conservatively budget as if a traditional year. With interest rates up, plan to be proactive for 2017 versus simply being reactive as many of us were due to the demands of 2016. Don’t get caught up in a low rate environment mentality. Expect to put in a different kind of effort in 2017 and sharpen your sales and education ability to focus on market share and your brand. Opportunities will be there for those with a business and marketing plan, and your volume and revenue can grow each year despite if rates are higher or not. The year 2017 already has some exciting news and things to look forward to: l More automation to streamline the process with automated income and asset calculation, less paperwork, etc. l Eliminating the requirement for 4506-T processing and tax transcripts. l The Federal Housing Finance Agency (FHFA) just announced new higher conforming loan limits for 2017 on loans backed by Fannie Mae and Freddie Mac. l More Property Inspection Waivers (PIWs) are expected from the agencies. Fannie Mae even announced that they are waiving the $75 fee also effective Jan. 1, 2017. l Originator independence growing and new opportunities in wholesale lending, including NAMB’s new KickStart Program. l New innovative technology entering the mortgage space to grow your business. This list seems to grow almost daily near the tail-end of 2016 and it will only get better. The more we streamline and simplify the process, the more volume staff can handle. The consumer (your clients) will also have a better experience. You will definitely need to have an organized system moving forward with controlled overhead and competitive pricing. Excellent service and execution is a requirement, but pricing and overhead must be monitored by every originator. This means even watching what your company is doing or not doing if you are currently working for a company versus being independent. Technology and consumer demands will continue to shape the future of our industry. Embrace the changes and don’t deny them. You’ll be happy that you did. 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) 496-0431, e-mail AHarris@VantageMortgageGroup.com or visit VantageMortgageGroup.com.

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and feedback based on current agency rules and best practices. “IncomeGenius establishes a new standard for lending efficiency,” said Rajan Nair, CEO of Financial Services, Indecomm Global Services. “It offers an enhanced level of digitized income analysis, especially for self-employed borrower loans. It generates consistent and accurate results in a standardized and compliant fashion, allowing the user to immediately identify the probability of a successful loan application.” IncomeGenius generates a comprehensive analysis of selfemployed income applications and is robust in identifying risks to the loan. IncomeGenius is integrated with selfemployment training through Indecomm-Mortgage U. Together, they represent a total self-employed borrower income calculation solution. IncomeGenius is available as a SaaS solution. OpenClose Releases Enhanced ConsumerAssist Solution OpenClose has announced that it has redesigned and added new features to its borrowerfacing ConsumerAssist solution. The enhancements to ConsumerAssist create a highly attractive, straightforward and interactive experience for consumers. ConsumerAssist can be accessed via the Web or any mobile device, providing portability and accessibility at any time and from anywhere, resulting in an increase in leads and a decrease in production costs. As a borrower completes an application from any device, alerts are triggered in real-time that are sent to the lender for quick follow up by a loan officer or customer service representative. Lenders can then immediately engage the borrower, quickly answer questions and start the sales process. This significantly improves lead capture and conversion rates, resulting in more closed loans and greater profits. The features of ConsumerAssist can be customized to a lender’s

unique specifications along with branding for both branch and loan officer Web pages, as well as mobile applications to create a more personalized experience. “In today’s competitive mortgage marketplace, customers are seeking new ways to attract borrowers and to do more with less while maintaining high service levels,” said Jason Regalbuto, CEO and CTO of OpenClose. “ConsumerAssist is ideal for lenders looking to add a high impact Web and mobile presence that provides an outstanding consumer experience. The solution allows visitors to start the lending process themselves without having to first speak to a loan officer. At the end of the day, ConsumerAssist is about increasing leads and decreasing origination costs for lenders.” Lenders also have the flexibility to offer on-demand program eligibility and pricing for borrowers by leveraging OpenClose’s DecisionAssist product and pricing engine (PPE), which instantly returns decisioning at the point-ofsale. OpenClose’s team of mortgage specialists maintain an extensive library of up-todate investor programs, guidelines and pricing for its customers. ConsumerAssist can easily be added to a lender’s existing website and is integrated with OpenClose’s LOS, LenderAssist. It also has the capability to integrate with customer relationship management (CRM) software and other third-party applications. Your turn National Mortgage Professional Magazine invites you to submit any information promoting new “niche” loan programs, new products or any other announcement related to the introduction of a new program, to the attention of: New to Market column Phone #: (516) 409-5555 E-mail: newsroom@nmpmediacorp.com Note: Submissions sent via email are preferred. The deadline for submissions is the 1st of the month prior to the

attracting new career pros continued from page 32 should accelerate career development. Also, reducing the required experience hours for accreditation, as just noted, would make eliminating the time barriers for each grade of licensure even more relevant. While we await further developments within the Appraisal Qualification Board, we should be proactive on these issues. An inefficient loan origination marketplace with respect to appraisals threatens

appraisal independence and the many gains we have made in recent years in gaining back trust with investors, regulators, borrowers, homeowners and consumers. As noted earlier, a professional appraisal, as currently proscribed, is the best way to put a valuation on a home. Working together, we can ensure that mortgage lending has a sufficient number of quality professionals to complete these appraisals for the foreseeable future.

Michael Dresden is the president of Dart Appraisal, an independently owned, nationwide appraisal management company (AMC) founded in 1993. As the chief integrator for all branches of Dart Appraisal, Dresden works closely with the company’s leadership team to create and fulfill a comprehensive strategic plan that delivers consistent, reliable and customized service to a broad range of clients throughout the U.S.

mba’s mortgage action alliance

Fowler Williams is chairman of the Mortgage Bankers Association’s Mortgage Action Alliance. He is also president of Atlanta, Ga.-based Crescent Mortgage. He may be reached by phone at (800) 851-0263 or e-mail FWilliams@CrescentMortgage.net.

WE INVEST IN YOU BY PROVIDING: • • • • • • • • • •

Sales training Personal coaching Peer support Operational support Advisory Board Marketing Fully delegated underwriting In-house funding Compliance Stress-free onboarding

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professionals who wish to join or learn more about MAA can do so at MBA.org/MAA. If you have any questions regarding MBA’s advocacy programs, or if you would like to run an MAA campaign, please contact Peter Shapiro at (202) 557-2933 or email PShapiro@MBA.org to receive an enrollment campaign kit and learn more. The final word: I want to thank the Mortgage Bankers Association for allowing me to serve my industry in the capacity of MAA Steering Committee Chairman. It has been a joy to work under MBA Chairmen Bill Cosgrove, Bill Emerson and for a short time, Rodrigo Lopez. Thank you to the MBA staff and Peter Shapiro for all the change they have supported and the assistance and guidance they have provided me over the past two years. I thank the 15,000 members of the Mortgage Action Alliance for their dedication to the real estate finance industry and for allowing me to serve as your chairman. I look forward to the continued growth of MAA and working with its incoming chairman, Gene Lugat for the next two years! MAA truly does make a difference in our industry. The larger the group … the louder the voice.

Partners@Inlanta.com

NationalMortgageProfessional.com

In other news, the Court of Appeals for the District of Columbia overturned the CFPB’s $109 million fine against PHH Corp. This decision underscores a number of key, long-standing MBA positions, and is certain to have far-reaching policy, compliance, and political implications. Also, the published revamp of the Uniform Residential Loan Application (URLA) gives the mortgage industry time to implement the necessary systems changes by the Jan. 18 effective date. Mortgagerelated regulatory developments continue, including the implementation of the Telephone Consumer Protection Act and HUD actions related to downpayment assistance and HECM loans. And in an announcement sent to lenders, the USDA announced a reduction in both its upfront and annual guarantee fees for the Rural Housing Service’s Section 502 Single Family guaranteed loan program. Stay updated on current events in Washington, D.C. and your state capital by connecting with MAA on social media. You can join our group on LinkedIn and on Facebook to connect with fellow advocates and expand your network! Real estate finance industry

continued from page 66

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NATIONAL MORTGAGE PROFESSIONAL MAGAZINE’S

calendar of events

JANUARY 2017 Monday-Thursday, January 23-26 Mortgage Bankers Association Presents: Independent Mortgage Bankers Conference La Quinta Palm Springs 49499 Eisenhower Drive La Quinta, Calif. For more information, visit MBA.org. FEBRUARY 2017 Friday, February 3 California Association of Mortgage Professionals Sales and Marketing 2017: North Walnut Creek Marriott 2355 North Main Street Walnut Creek, Calif. For more information, call (916) 448-8236 or visit TheCAMPSite.org.

Sunday-Wednesday, February 19-22 Mortgage Bankers Association’s CREF/Multifamily Housing Convention & Expo 2017 Manchester Grand Hyatt 1 Market Place San Diego, Calif. For more information, visit MBA.org. MARCH 2017 Thursday, March 2 FAMP Broward Chapter’s 2017 Annual Trade Show and Masquerade Ball Bonaventure Hotel & Conference Center 250 Racquet Club Road Weston, Fla. For more information, call (954) 986-0808 or visit BrowardFAMP.com.

Monday, February 13 California Association of Mortgage Professionals Sales and Marketing 2017: South Hyatt Regency Orange County 11999 Harbor Boulevard Garden Grove, Calif. For more information, call (916) 448-8236 or visit TheCAMPSite.org.

Sunday-Thursday, March 19-23 Regional Conference of Mortgage Bankers Associations 2017 Harrah’s Resort and Convention Center 777 Harrah’s Boulevard Atlantic City, N.J. For more information, call (732) 596-1619 or visit MBANJ.com.

Tuesday-Friday, February 14-17 Mortgage Bankers Association’s National Mortgage Servicing Conference & Expo 2017 Gaylord Texan 1501 Gaylord Trail Grapevine, Texas For more information, visit MBA.org.

APRIL 2017 Monday-Tuesday, April 10-11 NAPMW Annual–The National Association of Professional Mortgage Women Luxor Casino 3900 South Las Vegas Boulevard Las Vegas, Nev. For more information, call (860) 719-1991 or visit NAPMWAnnual.com.

Thursday, May 11 New York Mortgage Expo Hilton Long Island/Huntington 598 NY-110 • Melville, N.Y. For more information, call (860) 922-3441 or visit NYMortgageExpo.com. JUNE 2017 Thursday, June 1 California Mortgage Expo Crowne Plaza Hotel & Commerce Casino 6121 Telegraph Road Commerce, Calif. For more information, call (860) 922-3441 or visit CAMortgageExpo.com. Tuesday, June 13 The Great Northwest Mortgage Expo Embassy Suites Washington Square 9000 SW Washington Square Road Tigard, Ore. For more information, call (860) 922-3441 or visit GreatNorthwestExpo.com. JULY 2017 Monday-Tuesday, July 10-11 Ultimate Mortgage Expo Hotel Monteleone 214 Royal Street • New Orleans For more information, call (860) 922-3441 or visit UltimateMortgageExpo.com.

Thursday-Friday, August 17-18 Mortgage Star Conference for Women Planet Hollywood Las Vegas Resort & Casino 3667 Las Vegas Boulevard South Las Vegas For more information, call (860) 922-3441 or visit MortgageStar.biz. Friday-Sunday, August 18-20 Originator Connect Planet Hollywood Las Vegas Resort & Casino 3667 Las Vegas Boulevard South Las Vegas For more information, call (860) 922-3441 or visit OriginatorConnect.com. 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. OCTOBER 2017 Friday-Monday, October 13-16 NAMB National 2017 Rio Las Vegas 3700 West Flamingo Road • Las Vegas For more information, visit NAMB.org. Sunday-Wednesday, October 22-25 Mortgage Bankers Association 2017 Annual Conference & Trade Show Colorado Convention Center 700 14th Street • Denver For more information, visit MBA.org.

To submit your entry for inclusion in the National Mortgage Professional Calendar of Events, please e-mail the details of your event, along with contact information, to newsroom@nmpmediacorp.com. *Looking for additional exposure at key industry events? Call 516.409.5555, ext. 4 to discover how to maximize your event coverage.

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Thursday-Saturday, March 16-18 NAMB East 2017 Omni Atlanta Hotel at CNN Center 100 CNN Center NW Atlanta, Ga. For more information, visit NAMB.org.

MAY 2017 Tuesday-Thursday, May 2-4 2017 Great River MBA Conference The Peabody 149 Union Avenue Memphis, Tenn. For more information, call (901) 321-6702 or visit GreatRiverMBA.com.

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

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Wednesday, February 8 Texas Mortgage Roundup 2017 The Hyatt Regency on the Riverwalk 123 Losoya Street San Antonio, Texas For more information, call (860) 922-3441 or visit TXMortgageRoundup.com.

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

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ÂŠ Angel Oak Mortgage Solutions LLC NMLS #1160240, Corporate office, 980 Hammond Drive, Suite 850, Atlanta, GA, 30328. Loans in Texas offered through Angel Oak Home Loans LLC, NMLS #685842.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 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 not discriminate against individuals on the basis of race, gender, color, religion, national origin, age, disability, veteran status or other classification protected by law. 2-18-16 ANR