National Mortgage Professional Magazine February 2018 by ambizmedia

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1-4 Units

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www.GreenBoxLoans.com (800) 600-9198 Wholesaleinfo@greenboxloans.com

Gbox Licenses: BRE#01300944, DBO# 603L516, AZ#0919899, CA#333659, CO#333659, CT#MCL-333659, DE#29707, FL#MLD886, GA#33937, ID#MBL-7961, IL#MB.6760993, LA#333659, MD#21707, MI#FL0018821, MS#333659, NJ#333659, NC#L-156181, OH#MBMB.850183.000, OK#ML010327, OR#ML-5093, PA#48972, TX#333659, &%$#"! WA#CL-333659 This information is meant for Real Estate and mortgage professionals ONLY and is not to be provided to consumers. All products are not available in all States. % % Rate, terms, and conditions are subject to change without prior notice.

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table of

N A T I O N A L

The Mortgage Godfather: What Am I Supposed to Do? By Ralph LoVuolo Sr.

F E B R U A R Y

40 nmpU Campus Talk: The Myth About Technology and Origination Productivity By Ron Vaimberg

2 0 1 8

M O R T G

V O L

A SPECIAL FOCUS ON “THE PURSUIT OF PAPERLESS”

Where Paper Still Hides in the Mortgage Business By Rick Grant ....................................................................................52

Going 100 Percent Paperless: Where It Is Now and Where It Is Headed ......................................................................................64

M C

Would the Jetsons Get a Loan from You? By Joe Langner ............66

A E

The Mortgage Industry’s Move to Paperless By Peter Pescatore ..68

H a

Where’s My Flying Car? By Eric Weinstein ......................................70 Building a New Mortgage ‘E’cosystem By Stanley Street ..............72

FEATURES

42 Is Your Marketing Plan Giving Video the Real Estate It Deserves? By Ryan Kelly

Brokers Are Bullish on Non-QM Lending By Tom Hutchens ............8

The Elite Performer: Conservative Cloud Growth By Andy W. Harris, CRMS ....................................................................8

Recruiting, Training and Mentoring Corner: Paper–Paper Everywhere By Dave Hershman ..................................10

Leverage Your Voices By Scott Harris ..............................................16

Going Paperless in a Digital World ..................................................18

New FHA and VA Loan Limits for 2018 By Gavin T. Ales ................20 NAMB Perspective ............................................................................22 The NAPMW Report: NAPMW to “Unmask Mortgage” at Its Annual Education Conference By Cathy Kantrowitz ..............26 OrigiNation: Rising Rates By Andy W. Harris, CRMS ......................30 Compliance Matters: Adverse Action Obligations By Jonathan Foxx, Ph.D., MBA ..........................................................34

46 Five Things the Military Can Teach the Mortgage Industry About Leadership By Rear Admiral Tom Lynch, USN (Ret.)

Tony’s Corner: A Message From NAMMBA Founder & CEO J. Tony Thompson III, CMB ..................................................36

V I S I T Company

Web Site

O U R

A D Page

Accio Data ........................................................ www.ezcbsv.com ..........................................................60 Angel Oak Mortgage Solutions ............................ www.angeloakms.com ..............................35 & Back Cover Athas Capital Group .......................................... www.athascapital.com ....................................................5 Boots Across America ........................................ www.bootsacrossamerica.org ..........................................54 Brokers Compliance Group.................................. www.brokerscompliancegroup.com ..................................17 Caliber Home Loans.............................................. www.caliberwholesale.com ..............................................27 Carrington Mortgage Services, LLC ...................... www.carringtonwholesale.com ................................9 & 72 Citadel Servicing Corporation .............................. www.citadelservicing.com ..............................................61 DocMagic .......................................................... www.docmagic.com ........................................................7

48 Some Will, Some Won’t … So What!? Marketing Lesson for Originators By Brian Sacks

FAMP-Broward Chapter ...................................... www.browardfamp.org ..................................................37 Gateway Mortgage Group, LLC ............................ www.gatewayloan.com ..................................................62 Greenbox Loans, Inc........................................... www.greenboxloans.com ..............................................IFC Jet Direct Mortgage ............................................ www.jetdirectmortgage.com ..........................................65 LoanOfficerSchool.com ...................................... www.loanofficerschool.com ............................................56

Lykken On Lending ............................................ www.lykkenonlending.com ............................................70

MBA-NJ/NJAMB .................................................. www.mbanj.com ..........................................................31

MBS Highway .................................................... www.mbshighway.com/MNN ..........................................33

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

1 0

N U M B E R

Drilling Down on Negative Equity Issues By Pam Marron ..............38 Branding Yourself: How to Create a Great Elevator Speech By Kerry Johnson, Ph.D. ....................................................................74

Stop Working By Brian Kent ..............................................................76 MBAâ&#x20AC;&#x2122;s Mortgage Action Alliance: A Message From MAA Chairman Gene M. Lugat..................................................................78 A 2018 Trend You Cannot Afford to Ignore: Customer Experience By Bubba Mills ................................................................80 How Lenders Can Create an Efficient Commissions Calculations and Payments Process That Keeps Loan Officers Happy By Brian D. Lynch ..............................................................................82

COLUMNS New to Market...................................................................................12 News Flash: February 2018...............................................................14 Heard on the Street...........................................................................32 Outstanding Places to Work.............................................................84 NMP Calendar of Events...................................................................85 NMP Resource Registry....................................................................86

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

Web Site

Page

The National Association of Minority Mortgage Bankers Association is seeking the Top 100 Minority or Women Mortgage Loan Originators to be included in the NAMMBA Top 100, based on production by units or total loan volume (dollar amount). Selected Mortgage Loan Originators may be entitled to receive: l Recognition in National Mortgage Professional Magazine l Participation in award ceremony at NAMMBA Connect Conference l Video interview on Mortgage News Network

Mortgage News Network (MNN) .......................... www.mortgagenewsnetwork.com ............................44 & 45 NAMB+ ............................................................ www.nambplus.com ......................................................21 NAMMBA .......................................................... www.nammba.org ........................................................69 NAPMW ............................................................ www.napmw.org ....................................................58 & 73 NAWRB ............................................................ www.nawrb.com ............................................................67 New American Funding ...................................... www.newamericanfunding.com ......................................88 NMP U .............................................................. www.nmpucoaching.com ............................39, 55, 63 & 79 NRMLA.............................................................. www.nrmlaonline.org ....................................................68 OSI Express........................................................ www.osiexpress.com/mlslink ............................................1 Paramount Residential Mortgage Group, Inc. ...... www.prmg.net ..........................13, 57 & Inside Back Cover REMN................................................................ www.remnwholesale.com ..............................................15 ResMac, Inc. ...................................................... www.resmacb2b.com ....................................................11 Silver Hill Funding ............................................ www.silverhillfunding.com ............................................59 TagQuest .......................................................... www.tagquest.com ........................................................79 The Bond Exchange............................................ www.thebondexchange.com ..........................................51 The Money Source, Inc. .................................... www.wholesale.themoneysource.com ............................19

Nominees must represent minorities or be women who originate loans with an active NMLS number. Production by units or total loan volume (dollar amount) must be verified by letter by a sales manager or other responsible party. Submission will be reviewed and due diligence will be conducted on a percentage of all submissions. Inaccurate data provided will result in a company ban.

To submit your nomination, go to

NMPMag.com/NAMMBA100 Any questions? Call Jaclyn Leitermann at (516) 409-5555 x315.

FEBRUARY 2018 Volume 10 • Number 2

FROM THE

publisher’s desk

The Pursuit of Paperless We cannot run our businesses without technology, and despite the promises mortgage technology 1220 Wantagh Avenue • Wantagh, NY 11793-2202 has made over the years, it appears that we cannot run our businesses without paper either. In this Phone: (516) 409-5555 • Fax: (516) 409-4600 issue, we will focus some attention on where we are in the pursuit of paperless lending, what Web site: NationalMortgageProfessional.com benefits we can expect when we get there and what’s holding us back. STAFF Eric C. Peck Joel M. Berman This month’s focus feature was written by Special Reports Editor Rick Grant, one of the Editor-in-Chief Publisher - CEO (516) 409-5555, ext. 312 (516) 409-5555, ext. 310 industry’s most experienced mortgage technology reporters. It’s an industry-spanning analysis ericp@mortgagenewsnetwork.com joel@mortgagenewsnetwork.com designed to show us “Where Paper Still Hides in the Mortgage Business.” He spoke to technology Joey Arendt Beverly Bolnick experts working in virtually every sector of our business to bring you one of the most Art Director VP-Sales & Marketing (516) 409-5555, ext. 323 (516) 409-5555, ext. 316 comprehensive features we’ve ever published. joeya@mortgagenewsnetwork.com beverlyb@mortgagenewsnetwork.com But that’s not all we have to offer you on the topic. Scott Koondel Phil Hall VP of Operations Managing Editor We also spoke to Tim Anderson, DocMagic’s Director of eServices, about where the paperless (516) 409-5555, ext. 324 (516) 409-5555, ext. 312 process is now and where it is headed down the line. Anderson has been a proponent of what he scottk@mortgagenewsnetwork.com philh@mortgagenewsnetwork.com calls the world of “e” for longer than many have been in the industry, and his comments should be Richard Zyta Francine Miller Social Media Ambassador Advertising Coordinator considered essential reading on the topic. (516) 409-5555 (516) 409-5555, ext. 301 richardz@mortgagenewsnetwork.com francinem@mortgagenewsnetwork.com Part of the challenge for originators who want to go paperless is that it is not a decision they can Rick Grant Dylan Pollock make unilaterally. As Stanley Street, Manager of the Strategic Vision for Street Resource Group Inc. Special Reports Editor Administrative Assistant puts it, “We have to build the infrastructure.” He describes it in his article “Building a New Mortgage (570) 497-1026 (direct) (516) 409-5555, ext. 314 (516) 409-555, ext. 311 dylanp@mortgagenewsnetwork.com ‘E’cosystem.” rickg@mortgagenewsnetwork.com Despite the challenges, some lenders are moving headlong into the digital mortgage space and ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact they serve as shining examples for the rest of us. For an excellent case in point, see Peter VP-Sales & Marketing Beverly Bolnick at (516) 409-5555, ext. 316 or e-mail beverlyb@mortgagePescatore’s article “The Mortgage Industry’s Move to Paperless.” Pescatore is Chief Operating newsnetwork.com. Officer for Jet Direct Mortgage. ARTICLE SUBMISSIONS/PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck Rounding out this month’s Special Focus section, we bring you “Would The Jetsons Get a Loan at (516) 409-5555, ext. 312 or e-mail ericp@mortgagenewsnetwork.com. The deadline for submissions From You?” from Joe Langner, Chief Executive Officer of Blue Sage, and “Where’s My Flying Car?” is the first of the month prior to the target issue. from Eric Weinstein, because even a subject as serious as this can be fun to read about. SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail orders@mortgageOf course, your success depends upon more than your ability to remove paper documents from newsnetwork.com or visit www.nationalmortgageprofessional.com. Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600. your process and we wouldn’t be doing our jobs if we didn’t bring you a host of additional content Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the to help you achieve your goals. authors alone and do not imply the opinion or endorsement of Mortgage News Network Inc., or the offiWhen it comes to achieving goals, you just can’t beat the U.S. military. But can we learn from cers or members of National Association of Mortgage Brokers and its State Affiliates (NAMB), National Association of Professional Mortgage Women (NAPMW), National Consumer Reporting Association (NCRA) them? You bet! In this issue, don’t miss “Five Things the Military Can Teach the Mortgage Industry and/or other state mortgage trade associations. Participation in NAMB, NAPMW, NCRA, and/or other state mortgage trade associations events, activAbout Leadership” written by Rear Admiral Tom Lynch, USN (Ret.), Executive Chairman of NewDay ities and/or publications is available on a non-discriminatory basis and does not reflect the endorsement USA. In his excellent article, Lynch sums up the very essence of leadership and then explains how of the product and/or services by Mortgage News Network Inc., NAMB, NAPMW, NCRA, and other state mortgage trade associations. what he learned over the years in the military can be applied to day-to-day operations at a National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, and/or other state mortgage mortgage firm. 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 Of course, people are more likely to follow you if you’ve done a great job of creating a 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. compelling personal brand. To help you, we bring you “Branding Yourself: How to Create a Great Elevator Speech,” by Kerry Johnson, Ph.D. As Johnson puts it: “A good elevator speech will help your prospects and clients define who you are and what you do.” We all need that, so don’t miss Dr. Johnson’s article. We cannot ride the elevator with everyone we want to work with. Many will find us through our Web sites and a host of other marketing channels, but does your site make use of the most powerful marketing tools available today? In his article, “Is Your Marketing Plan Giving Video the Real Estate It Deserves?,” Ryan Kelly, Marketing and Communications Manager at Plaza Home Loans, points out that a third of all the time people spend online is dedicated to watching videos. Join the video revolution! And because we still have to work the numbers to achieve our goals, we bring you “How Lenders Can Create an Efficient Commissions Calculations and Payments Process That Keeps Loan Officers Happy,” from Brian D. Lynch, President and Founder of Advantage Systems. Lynch’s company provides accounting and financial management tools for the mortgage industry and he can help you make those numbers work. As you would expect, we also bring you all of the great departments you see every month in National Mortgage Professional Magazine, including news from the trade associations, compliance support, advice from top originators and much more. We hope you enjoy this issue. We also hope to see you in person at an upcoming industry event. The spring conference season is heating up and we’re going to be on hand for two upcoming shows that I expect to be very good and informative networking opportunities. The first is CONNECT 2018, presented by National Association of Minority Mortgage Bankers of America (NAMMBA). This second annual show will be held at the Westin Buckhead Atlanta on Thursday, April 12 through Sunday, April 15. This was a great show last year and we expect it to be even better this year. For more information, visit CONNECT2018.org. And we’ll have a team at the NAMB Members Only 2018 Legislative & Regulatory Conference, happening May 5-8, 2018 at The Mayflower Hotel in Washington, D.C. This is a great opportunity to join your industry peers to march on Capitol Hill and meet with your elected officials. You’ll also get networking opportunities, top industry speakers and the unique opportunity to walk the hallowed halls of Congress. Note that this event is for members of NAMB only. Visit NAMB.org for more information. Thanks for reading this edition and be sure to send us your feedback about this issue. All of us here at National Mortgage Professional Magazine hope it serves you well. Sincerely, Joel M. Berman, Publisher-CEO NMP Media Corp. Joel@MortgageNewsNetwork.com

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NAMB 601 Pennsylvania Avenue NW, South Building l Washington, D.C. 20004 l Phone: (202) 434-8250 l Fax: (530) 484-2906 l Web site: NAMB.org l E-mail: Membership@NAMB.org

NAMB 2017-2018 BOARD OF DIRECTORS E X E C U T I V E

John G. Stevens, CRMS President JohnGStevens@NAMB.org

Richard Bettencourt, CRMS President-Elect Rick.Bettencourt@NAMB.org

Nathan S. Pierce, CRMS Vice President Nathan.Pierce@NAMB.org

B O A R D

Michelle Velez, CMC Secretary Michelle.Velez@NAMB.org

Rocke Andrews, CMC, CRMS Treasurer Rocke.Andrews@NAMB.org

Fred Kreger, CMC Immediate Past President Fred.Kreger@NAMB.org

D I R E C T O R S

Linda McCoy, CMRS Linda.McCoy@NAMB.org

Chris Bettis, CMC, CRMS Chris.Bettis@NAMB.org

Wayne King, CMC, CRMS Wayne.King@NAMB.org

Michael DeSantis Mike.DeSantis@NAMB.org

George Burkley, CRMS George.Burkley@NAMB.org

Valerie J. Saunders, CRMS Executive Director ValSaun@NAMB.org

Harry H. Dinham, CMC Chief Operating Ofﬁcer HDinham@NAMB.org

Olga Kucerak, CRMS Olga.Kucerak@NAMB.org

National Association of Professional Mortgage Women 345 North Main Street, Suite 313 l West Hartford, CT 06117 l Phone: (800) 827-3034 l E-mail: NAPMW1@NAPMW.org l Web site: NAPMW.org

2017-2018 NAPMW NATIONAL BOARD OF DIRECTORS

FEBRUARY 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

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

Laurel Knight President-Elect (425) 426-2028 PresElect@NAPMW.org

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

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

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

Lynne Sparks Parliamentarian (678) 872-9000, ext. 10611 LSparks@SKWRLaw.com

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

2017-2018 BOARD OF DIRECTORS

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

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

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

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

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

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

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

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

Helen Meyers Director (800) 782-9094 Helen@CreditInfoSystems.com

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

Debbie Ysebeart Director (425) 264-1024 Debbie@Alliance2020.com

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

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

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

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

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Brokers Are Bullish on Non-QM Lending By Tom Hutchens

FEBRUARY 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

peaking with leading Brokers, I can confirm that alternative lending is important to homebuyers and the marketplace. Not all originators understand non-QM products and how they can benefit their overall production. Those who do understand have found a sure-fire way to attract new customers. Most of today’s top producing non-QM Brokers were suspicious and hesitant to offer them. When they decided to learn about these loans—for creditworthy people who did not fit in the agency mortgage box—they discovered safe, credible products that enhanced their ability to compete. “I simply got tired of saying ‘no’ to borrowers,” said Jeff Miller, Broker of Record for California’s Truss Financial Group. Miller explained that, after turning away too many potential customers, he began considering alternative loans. Miller said the biggest challenge was finding lenders with solid processes, those who put energy and effort into customer service. Miller’s enthusiasm, like that of other brokers, was front and center at Angel Oak’s January National Sales Conference in Orlando. Our Account Executives told me Brokers are convinced that non-QM is here to stay. According to Dominic Bologna, Charlotte, N.C., Branch Manager for New Penn Financial, “This (non-QM lending) is a great space to be in right now. As word gets out that you can structure loans that others cannot, you get more opportunities.” He said the business grows without doing too much because many people cannot qualify for conventional loans. “When you offer services that your competitors can’t, you have an advantage,” said Bologna. Brokers tell us they can easily close non-QM loans within 15-30 days when working with credible non-QM lenders. Once you know what kinds of upfront documentation they need, closing non-QM loans is straightforward. “It’s absolutely the same,” said Carolyn Frey of Mortgage Lending Solutions with offices in Florida and Ohio. “We gather the same verifications of income and credit. The sets of information are different, but once you get everything, take the application and find the right loan, non-QM loans work the same as conventional loans.” Top producing non-QM brokers say two approaches are essential. First, make sure you pay attention to detail upfront. Because different non-QM loans require specific documentation, getting the application right is essential. Second, make sure your lender has a top-notch customer service team and a record of closing most loans within 30 days. “Every loan has a story to tell,” said Emilio Soli, a Director at Walton Funding. “The ones by my non-QM loans are overwhelmingly positive.”

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

SPONSORED EDITORIAL

nmp news flash

continued from page 16

Network pillars are to ‘feed’ and ‘serve,’” said Dave Zitting, President and Chief Executive Officer of PRMI. “Because we’re based in Salt Lake City, we want to show our support to these teens on their path of self-sufficiency. We are so grateful to the Youth Resource Center for the opportunity to make a difference and show our support.” Survey: Why Borrowers are Late With Mortgage Payments

When it comes to paying a mortgage, more than half of consumers blame their late payments on a lack of funds, according to a survey conducted by ACI Worldwide and MasterCard Advisors. In a poll of 400 consumers, 57 percent of respondents admitted that they did not have the money to cover their bills, while 34 percent blamed bad billing and payment experiences for their late reimbursements, 23 percent admitted that they forgot to pay, 17 percent prioritized other bills over their mortgage payments and 11 percent found the payment process complicated. Millennials were particularly cranky when it came to mortgage payments. Over half of the Millennials surveyed said they are dissatisfied with current payment methods like ACH, online banking and check, while more than 30 percent said they contacted their mortgage servicer for questions and complaints regarding the payment process But that is not to say that borrowers do not take their payments seriously. Beyond interest rates, 57 percent of respondents said they choose their mortgage lender based on how they accept payments. Steve Kramer, vice president at ACI Worldwide, noted that four of the top 20 mortgage servicers accept card payments for mortgage invoices. “When it comes to mortgage payments, we’ve gone beyond early adopters to the early majority stage, which is further reinforced by this new data,” said Kramer. “Card payments will—and continue to— enhance ease and convenience for mortgage customers.”

HMDA Exemption Bill Passes the House

The House of Representatives voted 243 to 184 to pass the Home Mortgage Disclosure Adjustment Act (HR 2954), which is designed to eliminate compliance regulations imposed on small financial institutions by the Consumer Financial Protection Bureau (CFPB). HR 2954 will exempt from the CFPB’s reporting and disclosure requirements institutions that have originated fewer than 500 closedend mortgage loans and fewer than 500 open-end lines of credit in each of the two preceding calendar years. A companion bill was introduced in the Senate by Idaho Republican Mike Rounds, but it has yet to pass the Senate Banking Committee. “Since the inception of DoddFrank, our local small banks and credit unions have been forced to, quite literally, pay the price for a crisis they didn’t create,” said Rep. Tom Emmer (R-MN), who first introduced the Home Mortgage Disclosure Adjustment Act in 2015. “I consistently hear from Minnesota’s small community banks and credit unions who are struggling to keep up with burdensome compliance costs. Some have significantly reduced the amount of mortgages or loans they originate, or even stopped offering mortgages altogether. Americans want the opportunity to achieve the American dream: to own a home, buy a car, or start a business. I am proud the House passed the Home Mortgage Disclosure Adjustment Act to provide relief for these institutions to help make that happen.” Your turn National Mortgage Professional Magazine invites you to submit any information on regulatory changes, legislative updates, human interest stories or any other newsworthy items pertaining to the mortgage industry to the attention of: NMP News Flash column Phone #: (516) 409-5555 E-mail: Newsroom@MortgageNewsNetwork.com

Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

NAMB+ is an independent, wholly-owned, for-profit marketing subsidiary of NAMB, The Association of Mortgage Professionals. Dear Mortgage Professional, As loan originators, business owners and managers, we all wear a lot of hats and juggle many responsibilities. And, let’s be honest, we’re just plain busy! So, why not capitalize on all the residual benefits that NAMB membership has to offer and let NAMB+ help you solve critical business needs, recapture time and save money. NAMB+ is your hub for products and services that are essential to successful mortgage companies and loan officers. We are loan originators and business owners ourselves and we understand the real day-to-day challenges and obstacles that you face. None of us can afford to waste time or money on products or services that do not deliver immediate value and help us stay connected with our clients and referral sources, be mobile, operate more efficiently, and ultimately originate more loans.

Our mission is to add more tangible value to your NAMB membership and become your go-to resource when searching for reliable and affordable solutions for your business. Contact any one of our NAMB+ Endorsed Providers highlighted below, tell them you are a NAMB Member, and learn more about how their specific products and solutions can help you succeed! Sincerely,

Mike DeSantis President, NAMB+, Inc. mike.desantis@namb.org

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

MassMutual Disability Income Through an arrangement with Massachusetts Mutual Life Insurance Company (MassMutual), NAMB members have an opportunity to apply for individual disability income insurance (DI) at discounted rates. MortgageHippo Swift allows loan originators of all sizes to deliver a modern borrowing experience, significantly improve

PreApp 1003 Founded in 2015, Houstonbased PreApp 1003 was created to fill a growing need for mortgage loan originators to easily and securely prequalify mortgage prospects from the convenience of their mobile devices. Sarma gives you access to their extensive resources including: merged reports from the three top credit bureaus, CreditXpert tools, AVM Reports, SocialValidate, TRV Verification, Interface with over 30 LOS, Fannie and Freddie connection, Verification of employment/deposit and much more.

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 21 is a national surety agency specializing in providing mortgage license bonds to thousands of mortgage professionals across the country. USA Business Lending, Inc. USA Business Lending is your complete resource for everything commercial lending. With our extensive network of funding sources and specialized loan programs, you can be sure that your clients have access to the most competitive rates and terms available on the market.

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.

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

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

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eEndorsements promotes your success by making it easy to capture customer reviews, control your content, and publish your testimonials where they matter to drive new business. Automatically share your reviews on Facebook, Twitter and Linkedin. Easily invite your clients to share reviews to sites like Yelp and Zillow. eEndorsements offers a 34% discount to NAMB Members.

MySMARTblog.com The way your prospects think has changed and that is where the massive shift occurred. At MySMARTblog.com we build a complete, dynamic and Profitable Online Presence™ in order to protect you and your valuable repeat and referral business from your competition.

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

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borrower conversions, reduce origination costs and integrate with other innovative technologies in the mortgage industry. NAMB members will receive a 25% discount.

Message From NAMB 2017-2018 President John G. Stevens, CRMS Where do you hitch your wagon? Throughout one’s life, there are many opportunities given that will allow you to make money. These opportunities become reality through hard work and diligence. But where do you hitch your wagon when it comes to making meaningful, long-term effects on humanity? What is it that you do with your free time that helps you rest happy once your day is done. Do you volunteer your time for a local or national cause? Do you embrace the hard work and labor that a Habitat for Humanity project requires of its participants? Are you involved with your industry association? Are you active in your state association? President Barack Obama once stated: “Focusing your life solely on making a buck shows a certain poverty of ambition. It asks too little of yourself. Because it’s only when you hitch your wagon to something larger than yourself that you realize your true potential.” By working with your association, NAMB, you are able to realize your potential. Working with NAMB’s Membership, Government Affairs, Certification or one of its many other Committees is a way for you to stretch yourself beyond your comfort zone and achieve something great! I am asking each and every one of you to do a little more. It is hard to change overnight, and I am not asking everyone to change everything they are doing. What I am asking is for you to take a look at what you are doing in your industry. Are you willing to be part of something that is larger than yourself? Together, we will make a difference in our industry.

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John G. Stevens, CRMS President of NAMB

“Unless someone like you cares a whole awful lot, nothing is going to get better. It’s not.” —Dr. Seuss

John G. Stevens, CRMS is President of NAMB and Vice President of National Business Development for Paramount Residential Mortgage Group Inc. (PRMG). John has been actively involved in NAMB and mortgage industry thought leadership since 2010. Feel free to reach John by phone at (801) 427-7111 or e-mail JohnGStevens@gmail.com.

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Christopher J. Bettis, CMC, CRMS of Eugene, Ore.based Precision Capital is a member of the NAMB Board of Directors and Chairman of the Government Affairs Committee. He may be reached by e-mail at Chris.Bettis@NAMB.org.

NAMB’s Membership Minute: February 2018

l They are students of the mortgage industry and become experts on all mortgage programs and put their client’s in the mortgage program that is most suitable for their wants and needs. l They shop many wholesale lenders to find the best deal for their client on mortgage rates and fees. They give the consumer options and find them the best deal. They don’t steer their clients. l They are relationship builders who leverage relationships with Realtors, CPAs, Attorneys, business contacts, personal contacts and are involved in community organizations like The Rotary Club, Kiwanis, BNI and Fraternal Order groups. They are involved in the PTA, Little League and other organizations that give back to the community. l They have a sales system in process that does not shortcut or deviate from the process starting with the initial contact to building a client relationship to closing the mortgage. l They build relationships with their clients and make the sales/mortgage process a pleasant experience which generates client referrals which are easier to close. l They have a quality Client Retention Management (CRM) System in place to keep in contact with prospects and clients. They send out handwritten notes and thank you cards. l They personalize the client’s experience and put the client and client’s needs ahead of their commission. l They believe in doing the job right and complete the first time. l They use technology such as CRM, Web sites, cellphone apps, digital docs and digital signatures to close their mortgage deals sooner. l They keep in contact with mortgage clients and referral partners and never over promise and under deliver. l They have a “Big Picture” goal of being a mortgage company Owner/Mortgage Broker and building a business legacy for the future. l They join and get involved in professional trade associations like NAMB and give back through their volunteer service to the association where they can network with many of the best mortgage industry professionals in the United States. l They improve their knowledge and get certified as Certified Mortgage Residential Specialist (CRMS), Certified Mortgage Consultant (CMC) or General Mortgage Associate (GMA). l They don’t worry about losing their past clients to other mortgage lenders because they follow up and keep in contact. If you want to build relationships with 20 Percenters, membership in NAMB is a great place to start. We have the connections, vendors and lenders that can help take your mortgage business and career to the next level. My NAMB membership has helped me to be a 20 Percenter and has created great industry relationships and close friends it has created. It is all about building the relationship. It all starts with going to NAMB.org.

The 80/20 Rule in Business By George W. Burkley III, CRMS

Over the last 33 years of my professional business life, I have been involved in a vocation that depends 100 percent on sales and marketing to earn a living. The first 11 years in the retail auto sales industry and the

George W. Burkley III, CRMS is Owner and Founder of Goshen, Ind.-based American Mortgage & Financial Services, and NAMB Director, as well as Chairman of the Membership Committee. He may be reached by e-mail at George.Burkley@NAMB.org.

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Tax Reform, the Government Shutdown and Mulvaney’s CFPB … What a year end and beginning to 2018 … oh my! Tax reform dominated the headlines and rightfully so. We now have a few provisions that are impacting consumers and reducing our ability to provide financing. That being said, it could and would have been way worse. Thanks to the tireless efforts from multiple associations, such as NAMB, the Mortgage Bankers Association (MBA) and the National Association of Realtors (NAR) to name a few–the impact was significantly reduced. One such example was the proposed change to the capital gains exemption from gain on a primary residence that was owner occupied from two out of the last five years, to five of the last eight. The final version went back to two out of the last five years. That would have been bad and was a close call. Even still, there is always opportunity. I challenge you to look through the new rules and find the gems, the gold, the opportunities. Thus far, I have already found a provision that is a blessing and I, for one, will leverage it to the benefit of the consumers I serve. Pretty sure most knew, we had a shutdown of the federal government for a couple of days. Had it continued, it could have harmed lending. However, we’ve been here before and NAMB identified procedural recommendations to help alleviate the pain. Just know that NAMB is working proactively and tirelessly behind the scenes to protect your livelihood. The good news … the measure finally got bi-partisan support and we are open for business as a nation once again. At least until Feb. 8th … then, it’s anyone’s guess. And Mulvaney’s CFPB? While some have complaints, I’ve personally had great interactions with the agency. I’ve called with questions regarding rule-making. They answered their phones or called me back within a day. They knew what they were talking about and could immediate cite where in the regulation we needed to look for the answer. That’s old news and not the WOW factor that made me list it in this article. The “wow” is twofold. First, specific to the budget. No dollars were requested this quarter. The agency already has sufficient funds to cover its expenses with surplus. Send those funds to help reduce the deficit. Second, no more regulation through enforcement action. That’s a real “WOW!” Want to make a difference? Unhappy with a bill/act? Get involved with NAMB’s Government Affairs Committee … we are stronger together. Let your voice be heard!

last 21-plus years as a Mortgage Broker/Owner and Founder of American Mortgage and Financial Services in Goshen, Ind. Early in my sales career, my first mentor in business told me business and success is based on the 80/20 rule in business, which means 80 percent of sales production is done by 20 percent of the industry sales force. Are you in the 20 percent who do 80 percent of the business, or are you in the 80 percent who do 20 percent of the business? Your sales volume and paycheck should tell you where you stand. Your sales, income and career goals should be based on being a “20 Percenter” who does most of business in the mortgage industry. I have followed this guideline for the last 32 years and still have the Mortgage Broker company I started in October of 1996. What sets the 20 Percenters apart from the rest of the mortgage industry? Twenty Percenters do the following:

NationalMortgageProfessional.com

A Message From NAMB Government Affairs Committee Chair Christopher J. Bettis, CMC, CRMS

N A M B

P E R S P E C T I V E

Why Do I Need NAMB? NAMB.org … JOIN TODAY! l l l l l l l l

NAMB Testifies Before Congress NAMB Works With the CFPB NAMB Participates in Multiple Regulatory/CFPB Panels NAMB Webinars Full-Time NAMB Lobbyist on Capitol Hill NAMB Protects Your Business NAMB Forms Industry Coalitions NAMB Education

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For detailed information, visit NAMB.org.

Are You an NAMB Lending Integrity Seal of Approval Holder?

NAMB Certification Committee Update By Linda McCoy, CMRS

United we stand, divided we fall … together, we can achieve anything. These are phrases that inspire me when I think about a group of like-minded individuals joining together to get something done. Have you made the decision to jump on the NAMB Wagon and go to Washington, D.C. to walk the halls of Congress where our forefathers walked hundreds of years ago? They are the same halls filled with the many memories of dedicated Americans who had their own issues to be resolved. The dream of the passage of a bill that you spent years trying to get through the system would have given them a sense of great satisfaction. If you are a member of NAMB, you should know that we have been fighting for you every year in D.C. since we became an organization in 1973. We all come from many different walks of life, but have a common goal of helping people achieve “The American Dream of Homeownership.” If you have never had the experience of meeting your congressmen at their offices in D.C. and talking one-on-one about the issues facing us in our day to day lives, then you need to make this the year that you will make a difference. The best place to start is to go to NAMB.org and check out what NAMB is all about. NAMB has Committee Calls every month. You may be interested in learning more about what NAMB does for its members. Why not find out when the next meeting is and call the Chair of that Committee and attend the meeting. Get involved. We need your help to stand with us as a united team. Join NAMB for the Members Only 2018 Legislative & Regulatory Conference in Washington, D.C., Saturday-Tuesday, May 5-8 at the Mayflower Hotel. Sign up today! Linda McCoy, CMRS of Mobile, Ala.-based Mortgage Team 1 Inc. is a member of the NAMB Board of Directors, as well as NAMB Certification Committee Chair. She may be reached by e-mail at Linda.McCoy@NAMB.org.

(No additional costs to NAMB members)

How to Apply for your National Lending Integrity Seal LendingIntegrity.org Click on EARN the Seal NAMB members ONLY–Log in to the Lending Integrity site with your NAMB User ID and Password (If you do not know your User ID and Password, type in your e-mail and click log-in and the system will send you a password. If you have any issues, please call (202) 434-8250 or e-mail Membership@NAMB.org). Lending Integrity Requirements The Lending Integrity Seal of Approval is awarded only to mortgage originators who meet specific requirements. To earn the privilege to display the Seal, mortgage brokers and loan officers must: l Be an NAMB member l Meet the requirements of the SAFE Act l Pass a national criminal background check l Attend eight hours (or equivalent) of professional development education each year l Attend two hours (or equivalent) of ethics training every other year or each license renewal cycle l Provide professional references l Subscribe to NAMB’s Best Business Practices l Agree to NAMB’s Code of Ethics l Must be renewed annually

Business Partnerships By Rocke Andrews, CMC, CRMS

With all the discussion recently about wholesale partners, I am reminded of several occurrences in my early days in the mortgage industry. In the early 1990s, I was originating loans for one of the first mortgage brokers in Tucson, Ariz., Ray Desmond. Ray made a name for himself packaging hard to approve loan files and shopping them to various institutions around town. Many of these loans were large amounts. After seeing his value in bringing them new customers and business, they would agree to waive the one percent to 1.5 percent origination fee that most institutions charged back then. Ray was able to provide financing to his borrowers at no additional fee over going there direct. These institutions eventually treated Ray as a partner, but there was never any agreement that the customers were Ray’s or that Ray would bring them back to that institution when they had another borrowing need. The customers trusted Ray to find them what was needed and he saved them a lot of time and trouble. One of these institutions was Northern Trust, which did portfolio-type lending if you had a customer that fit their desired profile. I had a borrower seeking a high LTV in a loan, which at

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Rocke Andrews, CMC, CRMS is Treasurer of NAMB. He may be reached by e-mail at Rocke.Andrews@NAMB.org.

CAMP President-Elect Dawn Cychner Named Covina Chamber of Commerce “Citizen of the Year” Dawn E. Cychner, Sales Manager/Mortgage Loan Originator for C&S California Capital in Covina, Calif. and President-Elect, Membership Committee Chair for the California Association of Mortgage Professionals, has been named Commerce Citizen of the Year by the Covina Chamber of Commerce. “Each of us is remarkable. Each of us full of unique qualities and capabilities. Each of us has the opportunity to make a difference in someone’s life,” said Cychner. Nothing I have done is extraordinary. Look around us, the opportunity for greatness, the opportunity to touch someone’s life is there. Thank you to my family and friends. You have all inspired me, and I pray that perhaps I may have inspired some of you to make a difference in someone’s life.” Dawn has been involved with the mortgage industry for more than 25 years and is licensed in the State of California by the Bureau of Real Estate as a Mortgage Banker and Mortgage Broker. She is an active member of NAMB, and serves on both the Board of Directors for the Covina Chamber of Commerce and the San Gabriel Valley Chapter CAMP. “Thank you to the Covina Chamber,” said Cychner. “You have offered the opportunity to make great friends and networking partners. I truly appreciate the opportunities to learn from some wonderful people.”

Saturday-Tuesday, May 5-8, 2018 The Mayflower Hotel • 1127 Connecticut Ave NW • Washington, D.C. Join NAMB for the Members Only 2018 Legislative & Regulatory Conference in Washington, D.C., Saturday-Tuesday, May 5-8 at the Mayflower Hotel. Join your mortgage industry peers to march on Capitol Hill and meet with your elected officials. Featuring networking opportunities, top industry speakers and the unique opportunity to walk the hallowed halls of Congress.

For more information, visit NAMB.org.

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NAMB Members Only 2018 Legislative & Regulatory Conference

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that time, was considered a super jumbo, around $800,000. My borrower was the Chief Executive Officer of a NYSE-listed company, buying a second home in Tucson, Ariz., and no conventional lender could provide what he needed. His bank in New York didn’t lend in Arizona, and he was looking for financing similar to what he could get there. I took his loan to Northern Trust and they liked his overall profile. They did the loan at the terms requested at a very attractive rate. They offered us a par rate, so it did not cost the borrower any more. He was happy, the Realtor was happy, and I was happy with a big commission at that time. One thing we learned over time was Northern Trust would never lose a loan to someone else for one of their customers. In other words, once they went there, you would never do another loan for that customer due to their high level of customer service. The relationship worked because everyone benefitted … the customer, Northern Trust and the broker. Even though we lost the customer to future loans, we closed a loan that we would never had closed without them. Our Realtor referral partners were happy as well. A few years back, I visited Dubai to lead a Mortgage Broker class there. The Mortgage Broker business in Dubai was in its infancy, very similar to when Ray Desmond brokered loans. Brokers there were paid directly by the customer in return for their expertise in getting loans approved on time. There were about eight primary lending institutions and the real estate market was so active that deals falling through would potentially lose the buyers earnest money. Buyers often paid a higher fee than going to the bank direct, but were happy because they knew they were going to get approved at the institution that best fit their needs. The value of the broker was evident to them. All of these examples cement the fact that the broker keeps their relationship with the customer if they provide value. Many lenders would approach our customers over the years, but they would usually call us to compare offers. As a Mortgage Broker in pre-LO comp days, we could usually keep the deal. If the wholesaler provided value to us, we would use them, even if it meant they would solicit our customers. It just meant we would have to maintain our value to the customer by providing competition, education and a value relationship. No one owns their customer, they have to earn it every day.

The NAPMW Report BY CATHY KANTROWITZ

NAPMW to “Unmask Mortgage” at Its Annual Education Conference he National Association of Professional Mortgage Women (NAPMW) is getting set for its 2018 Annual Education Conference “Unmasking Mortgage,” Thursday-Friday, April 5-6 at Harrah’s Casino in Las Vegas. This year, the NAPMW has brought together an inspirational lineup of top women—leaders in business, thought leaders, and women who lead the scoreboard of achievement. You’ll want to be part of this extraordinary event, where education meets networking, where personal growth accompanies professional development, and where fun will meet awesome. NAPMW has assembled a top educational agenda, impressive speakers at a location that can’t be beat. Join us at Las Vegas’s Harrah’s Hotel and Casino, where you’ll find yourself at the pinnacle of this impressive conference. The Annual Education Conference will also feature a packed exhibit area, where attendees will have a chance to meet with some of the industry’s leading companies. In the education sessions, over a meal at the Gala Dinner, or among the many sponsors, you’ll build new relationships, connections and ideas that will help you move your career to the next level. Some of the amazing speakers NAPMW has lined up include Valerie Gordon, our Keynote Speaker; Ken Perry, President and Founder of The Knowledge Coop; K. Gus Demitrelos, Senior Digital Forensics Consulting Expert with Cyber Forensics; Steve Richman, Genworth’s “That

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MI Guy;” and Tina Asher, President of Asher Career Coaching. Keynote Speaker Valerie Gordon oversees feature stories for ESPN, HBO Sports and CBS News among other networks. Now the Founder of Commanderin- She LLC, a communications and career strategy firm, Valerie combines her background in storytelling with her passion for the important conversations and skills women need to harness the power in their stories and create meaningful next chapters. Valerie will present her Keynote “What Is the Next Chapter for Your Story?” Thursday, April 5 at 9:45 a.m. Steve Richman will present “Death By Cliché & Other Business Buzzwords,” Thursday, April 5 at 11:30 a.m. Steve is a national speaker who has energized, taught and motivated more than 120,000 professionals in every state in the U.S. After years of success as a litigation attorney, Steve entered the mortgage and real estate profession and has become an expert in the high LTV borrower market. He has been a Loan Officer, Account Executive and Manager of a mortgage operation. K. Gus Demitrelos, will deliver his session “Anti-Theme: Cyber Security in the Finance Industry— Anti-Malware, Anti-Hacker, AntiForensic,” Thursday, April 5 at 1:30 p.m. Gus is a retired U.S. Secret Service Special Agent and is currently the President of Cyber Forensics. Gus has been certified as a computer expert since 1996 and is currently certified in numerous Federal and State courts as a computer and

cellular expert. During his session, Gus will detail the five most important steps to protect data. He will discuss recent attacks on financial institutions and various data breaches siting specific case studies in recent news. Friday morning, April 6 at 10:30 a.m. Ken Perry, President & Founder The Knowledge Coop, delivers his presentation on mortgage industry education. Ken’s company, The Knowledge Coop, was one of the nation’s first training facilities to be approved by the Nationwide Mortgage Licensing System (NMLS) to provide pre-licensing and continuing education for originators. Ken has spoken to hundreds of thousands of professionals throughout the country on topics including mortgage and real estate compliance, title and escrow laws, economic and industry updates and forecasts, business development and strategy, and social networking and media. Also on Friday at 12:30 p.m., Tina Asher, President of Asher Career Coaching, will present “Building & Communicating with

Your Team,” looking at team dynamics to appreciate the differences to achieve results. Tina will discuss the 12 driving forces are that impel people into decision-making and the history behind it. During her session, attendees will learn how to approach individuals with different styles in order to become more effective in communicating, selling and managing. In addition to these very informative sessions, NAPMW has a number of Breakout Sessions spanning a host of industry topics, including loan risk, VA loans, underwriting, credit reporting and compliance. The event will also feature a number of networking opportunities, both in the Exhibit Hall and cocktail receptions. Don’t miss out! Join us in Vegas this April for an event you are sure to walk away from armed with the latest industry knowledge. For more information on the 2018 Annual Education Conference, visit NAPMW.org, email NAPMW1@NAPMW.org or call (860) 719-1991. See you in Vegas!

Cathy Kantrowitz is President of the National Association of Professional Mortgage Women (NAPMW) and Mortgage Operations Manager at Quorum Federal Credit Union. She may be reached by phone at (914) 641-3842 or e-mail President@NAPMW.org.

CALIBER RECONNECT PROGRAM

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Connecting with your borrowers at exactly the right time can sometimes be challenging. How will you know when they’re ready to reﬁnance or buy a home without them telling you ﬁrst? At Caliber Home Loans, Inc. we care about what happens to YOUR customer well after closing. In fact, Caliber retains the servicing for 96% of our loans. Most wholesale lenders don’t do this. This gives us a unique advantage to partner with you and create a customer for life through repeat business Let us help you reconnect with your past borrowers. Contact your Account Executive at Caliber or visit us at www.caliberwholesale.com.

Wholesale Lending

Caliber Home Loans, Inc., 1525 S. Beltline Rd Coppell, TX 75019 NMLS ID #15622. 1-800-401-6587. Copyright©2017. All Rights Reserved. Equal Housing Lender. For real estate and lending professionals only and not for distribution to consumers. This communication may contain information that is privileged, conﬁdential, legally privileged, and/or exempt from disclosure under applicable law. Distribution to the general public is prohibited. (DEC2017_NMP)

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What A

No … what a ou have a dilemma and I know it. Your dilemma is very much a part of what I do every day and if I admit it, and you’re going to force me, I too have a dilemma. My dilemma is similar to yours. Should I quit doing what I’m doing and do something else, or should I keep trying to do what I love to do? Should you give up what you’re doing, or should you keep trying to do what you’re doing? For me, I expect some of you are going to say, I quit. This is too hard, and everything I’ve tried doesn’t work. I’m trying to write business, but all I’m getting are terrible buyers, dilapidated houses, deals that are impossible to close, referrals from real estate agents who hate my rates, and competitors who are lying to people about rates, programs and their service, and all the while, I know they suck. The MLOs I compete against are not as good as me, but they seem to be writing business, and the salespeople I’m seeing won’t even let me in the door. Those damn door sergeants ask me if I have an appointment and if I say “No,” they lie to me and tell me that the real estate agent I want to see only sees those with appointments. An assistant carpenter, plumber, electrician, sheet rocker or roofer is probably what you should do. And the good part for the rest of those who won’t quit means there will be less competition, so you’ll actually be helping the economy. I’m right … right? I was watching a video this morning that said I’m right, and I guess it must be true. Hold on a second … I want to look at it again. We’re going to sell 10 percent fewer homes than we did last year. There isn’t enough housing to satisfy the

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The

Mortgage

Godfather

Am I Supposed to Do?

at are YOU supposed to do?

There are helpful things every salesperson must do in order to be productive. If you don’t do them, like the guy out West or the guy in Jersey, the competition will beat you to the deal. You cannot compete with them, so you might as well go and become a plumber or some other tradesman, not that there is anything wrong with that. My father started out as a paperhanger, became a plasterer, home improvement guy, builder, real estate agent and eventually, a mortgage broker. I can still hang wallpaper today and know how to use a hawk and trowel. There are enough deals if you will fight for them. Do three things: Give value

to your prospective referral sources, ask them for business and explain the law of reciprocity (I’ll help you and you’ll help me) and then most of all, you cannot give up. You need to figure out how to do something that is different than what your manager taught you to do, because those things will force you to have to make a decision to stay or leave. Follow my plan, call me and ask me to help you. Watch my videos. Tell your boss about my direct approach to making money because making money is fun and easy … you just have to go to work. Learn how to be a professional and professionals never give up! Ever!

Ralph LoVuolo Sr. has nearly 60 years history in the mortgage business. He was a Co-Founder/President of the NYAMB and a long-term member of the Board of Directors of NAMB. Presently, Ralph is Director of Sales Coaching for Lenders Compliance Group. He may be reached by phone at (917) 576-1230 or e-mail RLoVuolo@gmail.com.

n National Mortgage Professional Magazine n FEBRUARY 2018

him high and dry, but now is doing business, ensconced in a real estate office two days a week who helps the brokers in that office figure out how to do better and they give him business. When he joined the community group, there were eight other mortgage people in the room. When they were asked to tell everyone what they did, they got up and said they are in the mortgage business and give great service. They said their rates are terrific and they can get deals done in a hurry. But what my guy did was say, “I’m in the mortgage business, but I’m not like anyone you ever met who does what I do.” He went on and said, “What I believe is that I have great ideas that will help you grow your business. If you are an accountant, real estate agent, lawyer or financial advisor, please come talk to me after the meeting because you’ve never met anyone like me.” And after the meeting, an accountant came up to him and asked him what he meant. My guy shared with the accountant an idea that could help him grow his business and they set up a meeting for the following week to discuss other ideas. Then, there’s my client out West who called me today because every time he gets a deal, he’s calling the listing agent to tell them what’s going on, and they love it because none of the other LOs they do business with are doing that. And today, we were working on an e-mail he’s sending … a set of four questions to every listing agent on the other side of the deal and then calling them after the closing to ask if he could meet with them. What we emphasized during our five minute chat was that he would continue to send out a helpful e-mail to the listing agent until they told him that they would either meet with him or conversely, they threaten to call the police to make him stop!

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need of the population. We’ve got immigrants who cannot buy because they cannot get a mortgage because they don’t have a green card. We’ve got Millennials living in the basements of their parents’ house who think they are entitled because they got trophies when they came in last, just for participating. Their parents told them they could be anything they wanted and when they got out of school, they found out the world doesn’t work that way. You actually don’t get paid unless you do some work. And they don’t want to work, it’s too hard and the people they met on the job they got don’t like them as much as their parents told them they would. Rates are going up. Just ask Barry Habib. I watch him every week and he said so. The Fed just raised rates. Geez … maybe we’ll have a market like 1980 again. Rates were 17 percent and 18 percent and nobody could buy and we we’re all going to go out of business, starve to death, but there won’t be any business anyway, so we might as well just quit! But wait, what about the guy in Jersey who I just started to coach who told me that he’s having the best January he’s ever had. His pipeline is bigger than it’s ever been. He has been doing mortgages for seven years and is having the best January ever? I wonder why? It’s so simple. And what about the guy who told me he was watching Frank Garay and Brian Stevens who were giving all those statistics I showed above? He thinks the best thing to do is start to do reverse mortgages because there is an overwhelming need for that particular product. But what about the guy I coach who tells me he joined a community business group, and after 10 years of working at a company that was buying leads and doing streamlines, went out of business and left

BY RALPH LOVUOLO SR.

Rising Rates!

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By Andy W. Harris, CRMS

ast month, I talked about the acquisition and mergers I anticipate we’ll see somewhat heavily as we move further into 2018. I also believe we’ll see some retraction and layoffs with rates rising and also some regrets with recent new branches added to certain markets that cannot sustain the lack of demand during a saturated market. The market will balance out now that rates are rising, but to use 2016 and 2017 projection into 2018 planning, I believe is a poor decision specifically when it comes to adding overhead. Optimism and hustling is always a good thing and growth possible, but not “added” fixed overhead in a volatile industry. The cloud offers production without overhead. So, with that said, we’ll see what happens. According to Freddie Mac mortgage rate data, as of Feb. 1, 2018 we’re at the highest rate levels we’ve seen in the last four years. If you all recall, this was January of 2014 and through the entire first quarter and into second quarter where rates held around these levels. The first quarter of 2014 came off the tail of 2013, which was a pretty good year for mortgage rates. Many companies expanded as a result and then retracted in 2014 due to the losses they were faced with. At that time, I recall interviewing several mortgage companies and the majority reflected a loss that first quarter and most the first half of the year. This certainly seems to show that history can repeat itself. Of course, many still will show profits, gains and grow market share strategically. However, I do believe the margin restrictions and technology will continue to demand less margin in the rate sheet. Consumers have too much access to data and the new buyers are smarter than those of the past. Fixed overhead must be controlled in a rising rate environment, with purchase transactions primarily at play. We may see some cash-out refinance transactions to pay off the now non-deductible second mortgages, but should be an interesting purchase year and

competitive! Never a dull moment in the mortgage industry. Are you an originator? Send your stories! To have your 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.”

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n National Mortgage Professional Magazine n FEBRUARY 2018

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.

New American Funding Expands in Texas, Adds Leaman Team

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New American Funding has expanded its Central Texas territory with the award-winning Leaman Team. Ranked by the Austin Business Journal as the Number One Lender in Austin for six consecutive years, Max Leaman will spearhead the market expansion as Branch Manager and Senior Loan Officer. “The home loan industry is changing rapidly; customers and Real Estate Agents want fast closings, low rates and state-ofthe-art technology to save time and simplify the loan process,” said Leaman. “Powered by New American Funding, we deliver what the market wants from application to closing.” In 2017, Leaman closed more than 1,000 home loans and will be joined by his production team of Jori Stern, Amanda Stewart, Adam Biehler and Tiffany Wilbrett Garcia, as well as his talented operations, processing and closing teams. New American has also continued its expansion across Central Texas with the addition of Team Candy Buzan in Austin, Texas. Buzan, who has been ranked by the Austin Business Journal as a Top Producer since 2012, will serve as Branch Manager and Senior Loan Officer. Buzan will be joined at New American Funding by longtime business partner and CoBranch Manager, Max Leaman. “We’re excited about this new partnership and the ability to deliver an elevated level of service through state-of-the-art

technology,” said Buzan. “The future of residential lending is about innovation and providing a customized loan process. Powered by New American Funding, we’re able to create this type of tailored homebuying experience.” For more than 30 years, Buzan has been assisting housing customers throughout greater Austin. In 2017, she closed more than 300 loans. Buzan, along with her team: Trudy Savage, Kim Nielsen and Daniel Hyzak, specialize in all loan types. “We believe in helping consumers achieve homeownership,” said Buzan. “And we’re committed to accomplishing this goal in a way that borrowers are prepared for long-term financial success.” DocMagic Opens Print Fulfillment Supercenter

DocMagic has opened a 12,000square foot print fulfillment center, minutes from its Torrance, Calif. headquarters. DocMagic added the high tech “supercenter” to support lenders’ growing need for secure, compliant paper documents as the mortgage industry transitions to a 100 percent digital mortgage process. “Ironically, DocMagic’s increasing need to produce paper documents results from the growing number of lenders using our technologies to transact

paperless mortgages,” said Dominic Iannitti, President and Chief Executive Officer of DocMagic. Paper fallout, which is normal and can be expected with any digital process, is usually caused when borrowers do not respond to e-mail requests for eSigning within required timeframes or because they specifically ask their lenders to revert to paper documents. When this happens, lenders’ risk of compliance violations increases. The process of printing, preparing and delivering paper documents is traditionally an intensely manual and time-consuming process, which increases lenders’ risk of missed disclosure deadlines, errors and compromised data. “Simply creating a print fulfillment center wouldn’t have been an adequate solution because high risk is inherent in handling paper fallout,” said Iannitti. “We needed a fulfillment center based on technology that eclipses any process—manual or automated—currently being used to process paper documents. Fortunately, this is where DocMagic excels. We created a fulfillment supercenter that operates at the height of automation in the mortgage equivalent of a sterile environment. We’re very proud of what we’ve built.” The new fulfillment center uses biometric authentication and video monitoring to provide auditable assurance that only authorized individuals access the building and specific areas within the structure. Inside, advanced

technology automates nearly every step of the paper process. Once the documents are ordered, a printer automatically feeds the paper documents directly into an automated system that scans and reads the barcodes to assure that all documents are present. The documents are then inserted into envelopes, sealed and stamped— all without human intervention. The system logs and stores all actions, so lenders can review them and produce detailed information about any document’s activity, at any time. The result of this high-tech process for handling paper is a drastic reduction in the risk of errors, omissions and compromised data. “UETA [Uniform Electronic Transactions Act] requires that consumers be allowed to opt out of electronic processes at any time, but that’s just one compliance issue lenders need to address,” said Iannitti. “The key difference between DocMagic and a basic software provider is DocMagic’s core focus on providing a legal and compliant process. Unlike other providers, we’ve automated and integrated that opt out option within our workflow so lenders can avert risks that arise when transitioning to another system or vendor.” DocMagic plans to open additional regional print centers across the nation over the next several years to support its expansion into other types of consumer loan programs. While there will always be some degree of fallout, as borrowers embrace the eSigning of all documents as the new norm, opting out to a paper process will become less common as well as the need to support additional fulfillment centers.

Flagstar Adds Consumer Direct Mortgage Team From Capital One

Flagstar has announced an expansion of its direct-toconsumer mortgage lending platform with the addition of a team from Capital One Financial Corp. Rocky Stubbs, former head of Consumer Direct and Digital Mortgage for Capital One, has joined Flagstar as Senior Vice President and Director of Consumer Direct Lending. Stubbs will lead Flagstar’s Michigan-based Direct-to-Consumer Group, along with a team of 20 professionals from Capital One who will operate from Dallas, Texas. “Capital One built a best-inclass digital platform, so we are excited about attracting this proven, high-caliber team in the direct-to-consumer space to Flagstar,” said Kristy Fercho, President of Mortgage for Flagstar. “Our Michigan team did a great job last year shifting to a purchase market, and the Capital One team will provide additional capacity to strengthen and scale our platform and take advantage of market opportunities. The combined team will enhance our capabilities in servicing recapture, digital acquisition, and home equity.”

have the support of Castle & Cooke Mortgage behind me as my team and I begin this new chapter.” NerdWallet Recognizes New American Funding With Two Awards

NerdWallet has named New American Funding a two-time winner in its annual “Best-Of

Awards Program,” which highlights the top financial companies and products nationwide for 2018. NerdWallet selected New American Funding as a Best Mortgage Lender for First-Time Home Buyers with Low Credit Scores and a Best FHA Lender for Borrowers With Non-traditional Credit Histories. “It’s an honor to receive this outstanding recognition,” said New American Funding Chief Operating Officer Christy Bunce. “There’s an array of mortgage options on the market and we’re continued on page 35

Why choose MBS Highway? BARRY HABIB— THE ORIGINATOR OF THE MARKET ADVISORY SERVICE Daily guidance and insights from Mortgage Market expert Barry Habib. He closed over $2 Billion in production as a Loan Originator, called the bottom of the Housing Market and currently provides sales and market training to thousands of Loan Originators across the country. STATE OF THE ART, USER FRIENDLY WEBSITE We've taken great pride in building a website that uses new technology, and enhances the user experience. No matter where you are on our site, you'll always have market data in sight. Never miss a lock alert with our real time market news and alert system.

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Castle & Cooke Mortgage has continued its nationwide expansion with the opening of two new branches, its first office in Georgia, and in Spanish Fork, Utah. The new Georgia branch will be led by mortgage industry veteran and Branch Manager, Russell Elam (pictured right). Prior to joining Castle & Cooke Mortgage, Elam was a Senior Loan Officer for Ace Mortgage Funding and a Sales Manager for MainStreet Home Loans. “I have lived and worked in the metro Atlanta area for 13 years, and in that time, I have come to know the needs of this region well,” said Elam. “Being able to align my values with Castle & Cooke Mortgage’s commitment to excellence will allow me to continue doing the work I love by helping people in my community achieve their goals of homeownership.”

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Castle & Cooke Mortgage Opens Two New Branches

Castle & Cooke’s Spanish Fork branch will be led by Branch Manager Julie Crow (pictured left), who has 23 years of experience. Prior to joining Castle & Cooke, Crow was a Branch Manager for Primary Residential Mortgage. “South Utah County is such an incredible place to live and work, and I couldn’t be happier about having an office close to home and to so many of my clients,” said Crow. “Helping my neighbors and members of my community achieve their goals of home ownership is what I love to do, and I am thrilled to

By Jonathan Foxx, Ph.D., MBA

Adverse Action Obligations Question

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e were cited for not fulfilling the requirement s for adverse action. This came as a real shock to us because we relied on our LOS for the information from the credit bureau and our own compliance attorney to provide the procedures. This is really unusual for us, as we are a bank and have never previously been cited for this infraction. We conferenced about it and decided to ask for your guidance. We want to know what are our obligations in adverse action circumstances?

Answer When a creditor takes any adverse action with respect to a consumer in connection with a credit transaction that is based, in whole or in part, on any information contained in a consumer report from a consumer reporting agency, it is incumbent on the creditor to implement certain procedures. Below, I set forth the three primary obligations: 1. Provide the consumer oral, written or electronic notice of the adverse action;

2. Provide the consumer, orally, in writing or electronically, with: a. The name, address and telephone number of the consumer reporting agency that furnished the report. If the agency compiles and maintains files on consumers on a nationwide basis, a tollfree number established by the agency must be provided and b. A statement that the consumer reporting agency did not make the decision to take the adverse action and is unable to comment on the specific reasons why the creditor took the adverse action; and 3. Provide the consumer, orally, in writing, or electronically, with a notice of the consumerâ&#x20AC;&#x2122;s right to: a. Obtain a free copy of his or her consumer report from the consumer reporting agency that furnished the report, and the notice must indicate the 60-day period under the Fair Credit Reporting Act (FCRA) within which the consumer may obtain the free consumer report as a result of the

adverse action; and b. Dispute with the consumer reporting agency the accuracy or completeness of any information in a consumer report furnished by the agency. [15 USC Â§ 1681m(a)] Please note that the disclosure requirement addressed in the response to this question applies to an adverse action taken, in whole

or in part, based on consumer report information obtained from a consumer reporting agency. But there are many variations, such as where there is a denial or increase in the cost of credit that is not based on a consumer reporting agency, or where the adverse action is based on an affiliated party that is not a consumer reporting agency. Procedures for properly implementing adverse action should take into consideration the full range of possibilities and variations.

Jonathan Foxx, Ph.D., MBA, is the Managing Director of Lenders Compliance Group, the first and only full-service, mortgage risk management firm in the United States, specializing exclusively in outsourced mortgage compliance and offering a suite of services in residential mortgage banking for banks and non-banks. Information contained in this article is not intended to be and is not a source of legal advice. If you would like to contribute a question, please submit it to Compliance@LendersComplianceGroup.com.

heard on the street

proud that NerdWallet has named New American Funding among the best. We work hard to provide our consumers with industry-leading service and to close our loans on time.” This is the third year NerdWallet has researched dozens of financial products across multiple verticals in order to help consumers make confident financial decisions. “Consumers have more choice than ever when it comes to personal finance products, and our Best-of Awards highlight those that truly rise to the top,” said Tim Chen, NerdWallet CoFounder and Chief Executive Officer. Ellie Mae Partners With COCC

Ellie Mae has announced that COCC, a client-owned financial technology company servicing financial institutions throughout the Northeastern U.S., has entered into a partner agreement

continued from page 33

with Ellie Mae. Through this partnership COCC will offer the Encompass all-in-one mortgage management solution to members of the COCC cooperative. Ellie Mae’s Encompass all-inone mortgage management solution offers a digital mortgage experience covering the entire loan lifecycle so lenders can originate more loans, lower origination costs and reduce time to close. Ellie Mae’s connected community includes 230,000 users and thousands of service providers, and the Ellie Mae Network processes millions of transactions every month, touching approximately 30 percent of the residential loans originated in the United States. “Our mission is to be a trusted partner, delivering secure, quality solutions that drive the success of financial institutions,” said Matt L’Heureux, Senior Vice President and Chief Product Officer for COCC. “Through this partnership, COCC will provide Ellie Mae’s Encompass solution

to our clients to help give them more control with functions and applications that improve efficiency, enhance quality and ensure compliance.” Launched in 1967, COCC was founded by its clients. This unique cooperative structure has set COCC apart from the competition and is one of the driving forces behind their success. COCC is the fastestgrowing financial data processing company in the United States and is recognized as a leader in delivering innovation and the quality service financial institutions demand and deserve. “We are delighted that COCC has chosen to partner with Ellie Mae to offer our Encompass loan origination solution to the banks and credit unions in its cooperative,” said Cathleen Schreiner Gates, Executive Vice President of Sales and Marketing at Ellie Mae. “By providing these financial institutions with Ellie Mae’s Encompass, they can leverage our technology to originate more loans, lower the cost to originate and reduce their time to close, all with the quality and compliance needed to meet the changing industry requirements.”

LendingQB Partners With USRES, CondoTek

US Real Estate Services (USRES) has announced it is now integrated to LendingQB’s cloud-based loan origination solution (LOS) to further expand its reach and enhance the customer experience for the appraisal management service line. “LendingQB is a prominent player in the LOS space, and therefore, made our decision to partner with them an easy one,” said Keith Guenther, Chief Executive Officer of USRES. “Their continued focus on integrating with the industry’s most innovative and proven providers has resulted in a platform that is comprehensive, yet intuitive. These tools and services will be instrumental as we continue to expand our presence and maintain efficient, streamlined operations.” With this integration, USRES can now more effectively engage Lending QB’s customers in a single, centralized environment. continued on page 50

Hiring Account Executives Nationwide! • Plan, develop, and execute sales strategy to meet established goals in assigned territory • Secure new and maintain current relationships with originators, through both a wholesale and correspondent channel • Market Angel Oak products and programs to the mortgage and real estate community • Serve as liaison between brokers and operations team With an industry leading reputation for delivering an extraordinary mortgage experience, we are also looking for underwriters and other operations positions to support this growth in our Atlanta headquarters. Regardless of where you are located, if you are interested in joining this fast-growing company in the new, dynamic Non-QM space, please contact John Wise at john.wise@angeloakms.com or 818-391-4131.

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We’re looking to more than double our sales force this year to take advantage of the fastest growing segment of the mortgage industry. If you’re an experienced Wholesale Account Executive or have ever considered becoming one, come talk to us today.

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Tony’s Corner

A Message From NAMMBA Founder & CEO J. Tony Thompson III, CMB

NAMMBA: Building Bridges, Connecting Women and Minorities in the Mortgage Space

Five Ways to Keep Your Team Motivated

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career in mortgage lending is not for the faint of heart.

Each day, scores of Loan Officers across the country go to work with the grit, determination and drive to be the best salesperson they can be, outpace the competition and broker deals so they can pay their bills and feed their families. They are doing this at a time the mortgage industry is contracting—historically-low interest rates have yet to offset a perpetually dwindling housing inventory, rising home prices and sluggish wage growth. As a result, lenders are looking for innovative ways to reduce operating costs without endangering their sales teams. A few years ago, lenders spent $5,000 to generate a single mortgage, according to National Mortgage News. Yet, in the third quarter last year, personnel accounted for nearly $5,300 of the more than $8,000 in lender’s per-loan production expenses, the Mortgage Bankers Association (MBA) reported. Loan Officers must also deal with the fallout when deals fall apart, when leads lead to nowhere and when pressure mounts as deadlines approach as borrowers get squeamish. That stress added to the demands of working at all times of day and night, on

“

“… what’s the secret sauce to keeping your team motivated and retaining your top talent?”

weekends and over holidays can really put a damper on a profession that once upon a time seemed stable and lucrative. With so many hurdles stacked against them, it’s not difficult to imagine why Loan Officers tend to jump from company to company, drawn to what they consider better opportunities at lenders luring them with the promise of a bigger paycheck. If you’re a leader at a lender, this scenario likely gives you all manner of anxiety. So what’s the secret sauce to keeping your team motivated and retaining your top talent? Keep reading for five ways you can inspire loyalty among your employees and build an unstoppable team. Build a strong company culture Money isn’t the only reason people will come work for your company. Corporate culture and work environment are becoming increasingly important factors job candidates consider before making their next workplace decision. A Columbia University study

”

cited by Entrepreneur.com shows that companies with a rich company culture experience just a 13.9 percent turnover rate. Compare that with the 48.4 percent turnover rate at companies without one. Low morale and negativity can impinge your bottom line. A 2013 Gallup study found that America’s disengaged employees cost the economy $450 billion to $550 billion in lost productivity each year. Meanwhile, companies with a high level of engagement reported 22 percent higher productivity. Employees want to work for an organization with values that align with theirs and where they feel they can thrive, forward their career goals and leave each day feeling valued and fulfilled. Loan Officers are no different. Develop leaders Don’t forget that the members of your team are individuals with career goals and aspirations who want to grow in their chosen craft. That’s why lenders have to invest in strategies and programs that create pathways to groom leaders.

A 2016 study from Deloitte shows that 71 percent of Millennials are likely to leave their companies within the next two years because they’re unhappy with how their leadership skills are being developed. That number is staggering and may be why 49 percent of CEOs are changing their strategy to focus on the leadership pipeline, according to a 2016 PricewaterhouseCoopers survey. Investing time to help your employees grow as leaders will ultimately lead to them making a long-term investment in the organization. Work towards a common goal The last thing you want are people within your company pushing their own agenda. That’s why it’s critical you motivate your team by identifying a common goal everyone can share. That goal should not just be focused on inflating your company’s bottom line or boosting its brand but should speak to the values and beliefs your employees cherish. For example, Quicken Loans is committed to finding a better way for its clients, communities and team members; Movement Mortgage blends its innovative loan approval process with a mission to love and value people; and

loanDepot has built its brand on ethics, transparency, excellence and taking care of its employees. To varying degrees, all three lenders seek to transform their communities and change lives, whether that’s through nonprofit foundations or investment funds. Undoubtedly, those activities have drawn recruits with similar value systems. Sharing a common goal creates a culture of trust and teamwork that betters a company, improves morale and enhances productivity. Reward success, don’t punish failure It’s easy to pinpoint someone else’s flaws or shortcomings, especially if they affect business. But an important part of keeping your team motivated is to celebrate their individual and collective successes while encouraging improvement and corrective action when they make mistakes or fall short of expectations. First, understand this: People are people. They’re human, not machines, and

can’t perform at their optimum at all times. There will be illnesses, family emergencies, the loss of loved ones, personal issues, etc. The mark of a good leader is knowing how to help his or her team members cope with life’s difficulties so they can return to work refreshed and ready to give their best. Second, understand this: People are people. That means they’re going to make mistakes. Accidents happen. Instead of harping on their failures, good leaders help their team learn lessons and move forward. Trust your team I know very few people who openly admit to a hiring manager that they want to be micromanaged in their new job. Yet, it’s often the default reflex of managers who have trouble with trust or grapple with insecurities and inferiority complexes. ERE Media, an online resource for human resources and talent development professionals, reports that 38 percent of people would rather do something unpleasant,

such as take on more work or sit next to a noisy eater, rather than sit next to a micromanaging boss. In his book My Way or the Highway: The Micromanagement Survival Guide, author Harry E. Chambers writes that 85 percent of survey respondents said being micromanaged negatively

affected their morale. How can you avoid this statistic? Trust your team members to do what you’re paying them to do. Don’t second-guess everything they do. Empower them to make their own decisions and trust them to get the job done. And done well.

J. Tony Thompson III, CMB is the Founder and Chief Executive Officer of the National Association of Minority Mortgage Bankers of America (NAMMBA), an organization dedicated to increasing the engagement of women and minorities with the Mortgage Bankers Association at the local, state and national level. As the Founder/CEO of NAMMBA, Tony’s vision is to create a platform where women and minorities can connect, grow and become leaders in the mortgage industry while providing a platform to recruit and train the next generation of mortgage professionals. He may be reached by e-mail at Tony.Thompson@NAMMBA.org. 37

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Drilling Down on Negative Equity Issues

A Little-Known Benefit of HUD-Approved Housing Counseling: Assisting Consumers With Credit Issues BY PAM MARRON

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great deal of what is involved in a mortgage centers around credit. Help that can fix credit issues long-term is available at little or no cost within the HUD-approved housing counseling industry. In June 2016, I was appointed to the HUD Housing Counseling Federal Advisory Committee (HCFAC). This is a 12-person Committee comprised of three members each from the real estate community, the mortgage industry, the housing counseling agency (HCA) industry and three consumers. Since joining HCFAC, I have learned a great deal about education and services that HUD-approved HCA’s can offer consumers. Most services are free, on a sliding scale basis or are a fee for service. Looking at credit and getting consumers “mortgage ready” is a big part of HUD-approved housing counseling. And if in-depth credit counseling is needed, housing counselors can refer consumers to agencies with credit counselors trained specifically to help with credit. The National Foundation for Credit Counselors (NFCC.org) is a main organization that certifies and then recommends credit counselors that empower consumers to take charge of their finances through one-on-one financial reviews that address credit card debt, student loans, housing decisions and overall money management. In 2017, an effort was started with the help of the NFCC.org to assist

past short-sellers who continue to have a foreclosure code applied to past short sale credit. This problem is often learned of mid-contract and results in the loss of a new home contract, changing to an FHA mortgage, or changing to a portfolio conventional loan with both a higher interest rate and downpayment … instead of the Fannie or Mae Freddie Mac conventional loan applied for. There is a workaround in Fannie Mae, but none exists for Freddie Mac. This effort was started as a pre-purchase measure to ensure that past short-sellers had this erroneous credit issue cleared up before they attempted a new purchase when eligible to purchase again. The fix is available at ForeclosureCreditFix.com. Because of my interaction with this effort, I learned of how much credit help is provided with HUDapproved housing counselors and of more in-depth help that can be provided by certified credit counselors. And counselors can help those who need to establish credit … a common need among Millennials. Mortgage professionals specifically trained to originate loans could certainly use the services of HUD-approved housing counselors and certified credit counselors for clients with credit needs. Often, consumers come to us with credit issues that can affect their ability to get a mortgage or the best interest rate. Many of these consumers have been to credit repair companies that apply methods that temporarily hide credit, and mortgage professionals

must often undo these measures (such as a dispute) to get the consumer a mortgage. What the credit repair industry has made clear is that there are many clients in need of repairing their credit! Housing counselors can assist consumers to correct their credit and at a far lower cost (if any). A new effort has started to show Realtors and loan originators how to refer credit challenged clients to HUD-approved housing counseling agencies for assistance. The HUDapproved housing counselor will make an assessment on whether the client needs more in-depth credit counseling and provide this service in-house or refer to a certified credit counseling agency. There has been an increase in the number of consumers preparing for a new home mortgage and making an easy referral process available for mortgage professionals is needed. The plan is to set up a referral system where the loan originator is inserted into the HCA database as the referring partner and the consumer will sign an agency permission document to allow the loan originator to check on the referred clients’ progress. HCA’s are required to provide three sources available for a loan when the client is “mortgage ready.” But loan originators who keep in touch

with the client and the HCA will know when these clients are ready to purchase and can keep the realtor apprised of the clients “mortgage readiness.” If a fee for service cost is incurred by the client at the HCA, the loan originator could provide a credit towards closing costs to compensate for these costs. This effort will start with a limited number of HUD-approved housing counseling agencies and certified credit counselors. An outline of steps on how a loan originator can be inputted into the referral data base for a client and a letter of permission signed by the client for each HCA that allows the loan originator to check on the client status is being tested now. I will be at the Tampa Bay Homeownership Fair on Saturday, March 3 where HCA’s will meet consumers preparing for homeownership first. After it is determined that the client is ready to talk with a mortgage lender, they will be sent to us, the mortgage professionals. Isn’t this the way it should be … that consumers are prepared for homeownership first? Isn’t that what ForeclosureCreditFix.com is doing— fixing a problem ahead of signing a contract? Will keep you updated on how it goes … stay tuned!

Pam Marron (NMLS#: 246438) is Senior Loan Originator with Innovative Mortgage Services Inc. (NMLS#: 250769) in Tampa Bay, Fla. She may be reached by phone at (727) 375-8986, e-mail PMarron@InnovativeMortgage.onmicrosoft.com or visit HousingCrisisStories.com, CloseWithPam.com or 8Problems.com.

Novelty of program: A program like this has never been offered in the mortgage industry

Topics for the program: l How to build a high performance sales origination team l How to recruit top LO talent l The most powerful interview questions that uncover LO success DNA l How to leverage LOA’s and Junior LO’s l Build a new loan ofﬁcer training program for your company l How to coach your LO’s to high performance l Build and implement a success plan that works l Create accountability standards for performance that raise company production

l How to benchmark sales growth on a predictable path l How to consistently keep your team motivated for excellence and high performance l How to achieve personal production, leadership, recruiting, managerial and life balance (I will dig deep to answer this one, but it looks real good) l How to get the most out of your support team l How move towards leadership and away from task management l How to run highly effective sales meetings

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Goal of the program: To provide step-by-step training and resources for any leader to recruit, manage and lead a high performance production originator team

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Who the program is for: Company owners, branch managers, sales managers, anyone managing an origination team or looking to build one

CampusT

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The Myth About Technology and Origination Productivity here is not a day that goes by in which I don’t see a product or service that is marketed to Loan Originators that promises to make them more productive and work less. From claims that an Originator never has to leave their home, to the promise that borrowers or referral partners will be banging down the doors to do business with them. I have been in this business for more than 30 years. Never, and I mean never, have I ever witnessed a borrower or referral partner begging to do business with a mortgage professional. The unfortunate part of all of this is that the people who promote these instant solutions, are banking on the mentality of the

same people who will purchase a diet pill, and believe that they can eat whatever they want, never exercise, and the weight will just fall off. We all know that these instant solutions don’t produce the promised results, but yet these marketers would not be doing this type of promotion if it didn’t work. They are the ones getting rich, while the people investing in these programs are simply getting separated from their money. I am not suggesting that technology does not play an important role in the success of mortgage origination and sales. The reality is though that technology is a support tool for selling and marketing, it is not the answer by itself. It cannot replace hard work or knowing how to be

a professional salesperson who can influence, overcome objections, and get prospects to say “Yes!” The proof in what I’m saying resides in these facts. In 1984 when I entered the mortgage business, this was the first official refinance boom ever in lending. Phones were ringing off the hook, and borrowers were lowering their mortgage rates from the high teens down to the high single digits. What many originators today, who were not in the business back then don’t know, is that the average Loan Officer was originating and closing approximately 2.4 loans per month. Here we are now in 2018, and we have cellphones, mobile apps, online applications, automated dialers, CRM’s, and

so many other technological advancements for mortgage originators to use. However, even with average loan officer all of these tools and resources, the is closing less than 2.5 loans per month. So this begs the question, how come average LO production has not increased despite all of these improvements and efficiencies that are supposed to help an originator produce more? The answer couldn’t be clearer. Technology is not the answer. Technology assists a mortgage professional to do more business as long as they are strong in the key elements of selling and marketing. No matter what anyone tells you, technology does not replace an individual’s ability to develop referral partner relationships and

them more money, you must be able to properly message that to them. I was present at a conference not too long ago. A very wellknown mortgage company owner was speaking before making talking about all of this incredible technology that his company was providing to mortgage originators. The system basically put all the information an originator could ever need in front of them from loan technology, to access to every piece of news and information that could possibly exist relating to mortgage financing. As I watched this presentation, all I could think of is now the mortgage professional has even more things in front of them that will distract them from doing what needs to be done, which is going out and developing relationships that will result in leads and loans. Now it was my turn to get up and present, and as much as I

sales and marketing skills will not solve a lack of production problem. The bottom line is that technology can absolutely increase your originations when you know how to use the technology within the framework of a clearly defined marketing and selling system. Haphazardly adding technology without knowing how to encompass it into your sales presentations, will only lead to frustration and virtually no change in performance. The great news is that learning how to do this is not nearly as hard as one may think. You have a choice, you can either believe technology is the solution, or embrace the fact that technology will support your efforts as long as the foundation of success in marketing and sales, as well as your work ethic are at a level that would enable you to succeed even without technology.

Ron Vaimberg is President 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.

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convert leads into loans. It only enhances someone who possesses the foundational skills. If you take a look at top originators in the mortgage industry, or any top sales professional in almost any industry, you will see that they perform at that level not because of technology. The secret to their success is the combination of work ethic, persuasion skills, time management, and the ability to overcome objections and get prospects to say yes. It amazes me how many loan officers have all of this cutting edge technology at their fingertips, but because they are unable to convey in an effective way to their target audience the benefits that this technology provides to their prospects, essentially this renders the technology ineffective. In order for someone to embrace the technology that you have that will make their life easier or make

By Ron Vaimberg

was in awe of how advanced this technology was, and I complemented the technology. I knew that this prior presentation was going to hurt the ability for a Loan Officer to increase their production because this was just more informational source that would detract from marketing and selling. I brought up to the audience the statistic I provided earlier in regard to 1984 production versus present day, and how it has not changed. I can tell you most originators in the audience were not happy to hear what I was saying, but yet in their hearts they knew it to be true that the numbers relating to loan officer performance have not grown. The owner of the mortgage company who presented the technology before my presentation, even came up to me and told me he agreed completely with what I said, and that technology without essential

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Is Your Marketing Plan Giving Video the Real Estate It Deserves? By Ryan Kelly o you want to increase sales for yourself or your company? Are you ready to take your marketing to the next level and reach more people with your services? If you answered “yes” to those questions, consider adding video to your marketing strategy. According to Forbes, a third of all the time people spend online is dedicated to watching videos. That’s a lot of time, and it’s a number that’s grown significantly over the years! So instead of reading an article, the majority of people would rather watch a video to consume the same information (props to you for reading this article)! If you’re still on the fence about the importance of video, here are a few more interesting facts:

l Mobile video consumption grows by 100 percent every year (Forbes) l Fifty-five percent of people watch videos online every day (Forbes) l Eighty-seven percent of online marketers are currently using video content in their digital marketing strategies (Forbes) l Globally, people watch one billion hours of YouTube content every day (Mashable) As marketers, it’s our goal to influence an audience. How do we influence an audience with our brand? We go where they’re going. We communicate like they are communicating. As marketers, we cannot ignore the fact that video is projected to claim more than 80 percent of all Web traffic by 2019 (Inc.). Video, whether it’s live action or animation, is absolutely essential to your marketing strategy. How do I get started in video marketing? Now that you know video is important, what can you do to get started and integrate it into your marketing mix? Some businesses

take the DIY (Do It Yourself) approach, while others outsource it to professionals. Here are some pros and cons for you to consider when it comes to creating videos. DIY Video–Pros: l Cost-effective, depending on your knowledge of video and editing basics. l You won’t have to spend time training a professional about the ins and outs of your business. DIY Video–Cons: l Training yourself to do video takes TIME (time=money). l Acquiring equipment can be extremely confusing, timeconsuming and expensive. l Video production can distract you from your primary job, and that may not be the best for your business. l Your video could not turn out the way you envisioned and negatively impact your brand perception. Professional Video–Pros: l Professional production companies know the best practices for making successful videos. l Having a professional brings a fresh perspective, and may provide a better way to view things from a customer’s eyes. l They will handle the full project, from start to finish–you keep working your business. Professional Video–Con: l Cost Ultimately, the decision to create your own videos or have a professional do it is up to you. If you already have knowledge on creating videos and have access to equipment, then more power to you! If you aren’t as confident and don’t have equipment, it may be best to just leave it to the professionals. If you hire a production company, what should you look for? When discussing your project with

a professional, they should prioritize understanding what your objectives are, and be willing and eager to learn as much about your company and the industry as possible. Look for a professional with a proven track record creating quality work. Most professionals will have samples of past work on their Web site, or will provide them upon your request. If their samples match your vision, then that’s a good sign that they may be the right fit. If you want to be thorough in your search, ask for reference contact information, and see how others’ experiences were in working with the professional. If they cannot provide any contacts, that may be a red flag. If the professional seems passionate and interested in learning about your company and industry, provides quality past samples that match your vision, and shares reference contact information with you, then you’re on the right track to getting started. What are some topics I can cover in my videos? When brainstorming topic ideas, keep your audience in mind. What is something that your audience will want to know or learn about? The last thing you want to do is invest time and money in creating a video that your target audience won’t watch. We’ve got some suggestions! l Why should a borrower use a broker? l Why should a borrower choose

to work with your company in particular? l New product and/or technology offerings. l Helpful tips for buying a home. What best practices should I follow when it comes to distributing my video? The first thing you want to do with your nifty new video is make sure it’s uploaded to your own company website. This will increase SEO (Search Engine Optimization), which basically means it will improve your company’s rank in Google’s search algorithm. When posting it to Facebook and Twitter, don’t simply drop the video link into the post box. Both platforms allow you to upload the video file directly. The benefit of sharing it this way is that as people are scrolling through their timelines, the video will automatically start playing, which will quickly grab their attention. This keeps them from having to be redirected to a different site, like YouTube, to see the video. Lastly, send the video out in an e-mail blast to your clients and prospects, and direct them back to your Web site. We wish you the best of luck in your video marketing efforts. Video has established itself as a communication method of choice for today, so be sure to give it the place it deserves in your marketing plan. Feel free to reach out directly if you have any questions or comments about video marketing, as we’d love to hear how it’s working for you.

Ryan Kelly, an award-winning marketing, branding and communications professional, is Marketing & Communications Manager at Plaza Home Loans. Over the past eight years in the mortgage industry, he has managed marketing and creative teams at both Norcom Mortgage and now Plaza Home Mortgage. He may be reached by phone at (858) 346-1208, ext. 1317 or e-mail Ryan.Kelly@PlazaHomeMortgage.com.

MONDAY Brought to you by

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Godfather The Mortgage Godfather 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! Airs every Monday at 11 a.m. COMING IN MARCH!

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mortgage professionals you can be a sponsor for these shows. 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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Five Things the Military Can Teach the Mortgage Industry About Leadership By Rear Admiral Tom Lynch, USN (Ret.) resident Dwight D. Eisenhower once said that leadership is “The art of getting someone else to do something you want done because he wants to do it.” Those words sum up the very essence of great leadership. Companies looking to help shape future leaders in the mortgage business are wise to pay close attention to Eisenhower’s words. In fact, they are the personification of “character-driven leadership,” which is something we’ve been hearing a lot about lately. Many mortgage companies now have their own leadership training programs for new and current employees, and many emphasize the important role that character plays in leadership. But what exactly does character-driven leadership mean? And is it really something that can be taught? During my 31-year career in the U.S. Navy, I learned important lessons on leadership that can easily be applied to the mortgage industry. Here are just a few:

Self.” This means that before taking any action, a sailor must first ask what impact it will have on the ship, then on his shipmates, and lastly, on his own personal needs. When applied to a mortgage company or any business, the ship, or the overall organization and its customers, come first. The shipmates, or your fellow employees, come next. Only after the organization and your customer and colleagues’ needs have been addressed do you consider what is best for you. In the Navy, “Ship, Shipmate, Self” helps sailors set the order of their priorities and loyalties. In the same way, the mantra can be the blueprint for a successful lending company. Prioritizing the needs of the organization, colleagues and customers above your own ensures that employees are looking out for each other and for customers. The result is a culture of giving, not taking, and an environment where characterdriven leaders can grow and stand out.

Whatever happens, stay calm In the military, a leader’s attitude and emotions can be a matter of life or death. Their actions set the tone for an entire squadron, so they have been trained to keep calm in the face of a stressful or life-threatening situation. When a leader is not calm, no one is, and that’s when bad decisions can ensue. While the stakes aren’t quite as high in the mortgage business, remaining “cool, calm and collected” when faced with a crisis, is just as important. When a company is accused of wrongdoing, some leaders panic and let their emotions get the best of them. If a CEO allows panic to set in, the entire team follows suit, more mistakes are made, and customers are lost.

Have a clear vision There’s a reason why strong and effective leaders are found in our Armed Forces. Our military services have spent years refining their leadership processes, as well as the training that we invest into each of our servicemen and women. Part of that training is learning that leaders must have a clear-cut vision and specific goals. Having a clear vision means knowing what they are trying to accomplish. In the same way, leaders of a mortgage company won’t be very successful if they don’t have a strong vision and well-defined goals for their company and their employees. The most effective CEOs and presidents have well thought-out objectives for their organization. By clearly and consistently communicating these objectives, they inspire employees to work towards those goals.

Put others before yourself In the Navy, sailors are instilled with the philosophy of three powerful words: “Ship, Shipmate,

Leaders are made, not born We all know someone who might

be called a “natural born leader.” These people are usually smart, bold and likeable. However, the right training, education and mentoring are just as important as these traits, if not more so. Consider the military’s approach to creating great leaders: There’s a strong emphasis on discipline, training and education. This is the model we follow at my organization, NewDay USA. All newly-hired team members complete a comprehensive, formal leadership training program. During a 12-month period, in addition to the mortgage training we give them, each new teammate participates in 60 hours of classroom instruction that focuses on core values and ethics-based leadership concepts. Because active servicemen, servicewomen and veterans are our primary customers, our leadership training program helps team members gain a strong understanding of the unique needs of the veteran community. We combine leadership training with equally comprehensive mortgage banking-related educational sessions. And through this training, we have found that leadership skills can, indeed, be taught. Integrity is non-negotiable The military emphasizes that integrity is an essential piece of strong leadership. As the late General Norman Schwarzkopf put it: “Leadership is a potent combination of strategy and character. But if you must be without one, be without the strategy.” In other words, a leader may be brilliant and very knowledgeable about their

business, but if people sense a lack of character, the leader won’t be nearly as effective. Some of the attributes associated with good character are integrity, honesty, responsibility and compassion. That means being truthful both to oneself and to others, and not being afraid to stand up for what is right. It also means knowing when to admit mistakes and not shifting blame to others. The best leaders understand these principles very well. In the mortgage business, organizations that are honest, transparent and take responsibility for their actions are those that build trust with their customers and with the public. They enjoy a far better reputation than companies that are not forthcoming with their customers or that attempt to cover up problems. I see a very bright future for today’s emerging leaders in the mortgage business. With the right coaching, education and mentoring, the industry’s best and brightest will be well on their way to be tomorrow’s leaders. I was fortunate to learn important lessons on leadership early on and throughout the course of my Navy career, and feel fortunate that I can pass those lessons on to the mortgage industry’s future leaders. Eisenhower was an American hero and one of our nation’s greatest success stories, but he didn’t achieve the highest rank in the military or serve two terms in the White House on his own. He did it because he was a man of strong character who inspired others to follow his lead. That is the essence of leadership.

Rear Admiral Tom Lynch, USN (Ret.) is the Executive Chairman of NewDay USA. Admiral Lynch retired from the Navy in 1995, following which he held senior executive leadership positions at Safeguard Scientifics, CompuCom Systems and The Staubach Company. He has served as a Director of multiple private and publicly-held companies. The Admiral graduated from the US Naval Academy with a BS Degree in 1964 and earned an MS from George Washington University in 1971. He was recognized as a U.S. Naval Academy Distinguished Graduate in 2010.

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Some Will, Some Won’t … So What!? Marketing Lesson for Originators By Brian Sacks

making my business grow, and grow it did. For the next two decades, I dominated my area, and consistently generated 15-20 loans per month, regardless of what was happening in the economy. The key words here are “consistently” and “for decades.” I was so successful that I decided to share my secrets with other originators During this time, I built a training company into a multi-million dollar business, and also had built a huge mortgage business. Life was so good that I decided to kick back, and for the first time in my life, just enjoy! As luck would have, my timing was a bit off. I sold my entities and held financing right before the big crash. I am sure by now you can figure out the rest of the story right? My return (again) Then, I came back for the second time in 2013, and have been back ever since, this time with no plans to leave until they carry me away from my desk. I’m only 53-yearsold, so hopefully that won’t happen for many years.

Some will, some won’t … so what!? Some of the businesses I went to saw the immediate benefit of a fax

Some agents will be r eceptive to you and will want to work with you There is no way that you will match up personality-wise with every agent you meet with. Heck, you are not likely to even get to meet with every agent you want to. But if you don’t let this feel like personal rejection, you will meet enough agents to build a great business and have great relationships. Some will, some won’t … so what!? Some buyers will work with you and some won’t! You will prequalify many buyers, and not all of them will want to work with you. Truthfully, you may not want to work with every buyer you meet with. Some will qualify, some won’t … so what. Some buyers will shop you, some won’t Some buyers will shop you and some will simply move forward without shopping you with 30 other lenders. This has more to do with your positioning as an expert instead of a head of lettuce. But some are just wired for getting a

low price, and some are just wired to make sure they are working with a PRO. Some will, some won’t … so what!? Some agents will be loyal, some won’t I realize that nothing is more aggravating than doing a great job and not getting more business from that agent. So you can let that get you down or eat you up with anger, or you can simply say: “Some will, some won’t … so what!?” The bottom line is that your job—our job—is to always be out there creating more demand for our services than we have time for. Yes, please go back and re-read that. 49 Your attitude actually comes through in your body language and tone We are all just flesh and blood, and you know the old saying, “You win some, you lose some.” But the truth is that no matter how hard you may try to hide your frustration and even bitterness and anger, it comes through. Your voice changes and others can hear it in your voice. Your actual body physiology changes and you stand and move your body differently. These are all signs the people you are interacting with will pick up on quickly on a subconscious level. Let’s face it … no one wants to be around or work with a grumpy Originator. So please try, on a very deep level, to go through this business by continuing to say yourself and developing the attitude of “some will, some won’t … so what!?”

Brian Sacks is a nationally-renowned mortgage expert who has career closing of more than 5,924 transactions for more than $1 billion. He has trained, consulted and coached tens of thousands of loan officers and company owners over the past 32 years on how to close more loans, make more money, and still have a life. Brian is the host of “Top Originator Secrets,” which can be seen weekly on Mortgage News Network and on his blog. You can get more information and grab your free report on “How to Get Agents Chasing You” at TopOriginatorSecrets.com.

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Let’s pause and recap for a minute and please write this down … “How you handle your failures will determine your success.” Let’s break down all of the things that used to upset me before this epiphany and my guess is that they upset you too. I discovered this during my time selling fax machines. Here I was with the most up-todate technology and at an affordable price that would literally save my clients hours of wasted time and make their entire business or practice more efficient and profitable.

machine and bought one on the spot. Some businesses had to think it over and some wanted to price shop. Others simply would not even meet with me. But at the end of nine months, I had doubled my income from the previous year in a completely new business. My attitude was “So what,” and this attitude switch helped me explode my production once I returned to the mortgage business.

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e are in what can be a very frustrating business and it’s very normal to get down and maybe even discouraged. Our highs are really high, but unfortunately, our lows can also be very low. The advice I am going to give you comes from 32 years of ups and downs in the industry. Before we go any further, I have a confession to make. Ready? I have been in the business, left twice and came back twice. The first time was back in 1988 after having been in the business just three years and never earning more than $40,000 a year. I was burned out, working 70 hours a week begging for the few deals I could get. Working evenings and weekends, when one day, I met the woman of my dreams and we decided to get married at the ripe age of 23. I was not sure that I could keep these crazy hours working seven days a week, with high stress, but still not making a great living. Actually, when I totaled my hours and my income at the end of the year, working at McDonald’s would have beaten what I earned. No way to start a marriage right? But one day, one of my clients told me about a new machine. It’s hard to believe I am even saying this, but the new machine was a “fax machine,” and it was the new technology of that time. This was a client I had just closed a loan for, and he was so impressed with my sales skills that he hired me to sell them. This was like shooting fish in a barrel. I worked from 10:00 a.m.3:00 p.m. most days, and took off early on Fridays. No evenings, no weekends, no screaming clients or deadlines. Best of all, I earned $80,000 in just nine months. But … I was truly bored out of my mind! Call me strange, but I was bored and quit this job and went right back to the mortgage business. But this time, I committed to

heard on the street

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In addition to originating mortgages, the platform seamlessly integrates with hundreds of leading industry applications, including document preparation, compliance, mortgage insurance and title services. This addition to USRES’ set of tools and offerings further cements their commitment to providing the best, most transparent experience in the AMC space. LendingQB has also announced a partnership with CondoTek, provider of CondoPak, a solution for lenders underwriting condominium loans. CondoPak includes the necessary condominium documents for lenders to review to be able to warrant and approve condominiums. CondoPak is offered at a flatrate fee that lenders can elect to pass-through to the borrower creating transparency and consistency when underwriting a condominium loan. The lender opens CondoPak within the Lending QB platform and all documents are uploaded directly, completely streamlining the work flow. Mortgage lending organizations of all types and sizes benefit from this efficiency. Integrating CondoPak to LendingQB brings lenders a seamless experience that makes the loan process fast and efficient. David Colwell, Vice President of LendingQB Strategy, said, “Integrating with CondoTek is an example of how LendingQB provides lenders with specialized solutions. Our clients have told us that gathering condominium documents is a significant drain on their resources. Having a solution like CondoPak available through our API’s makes it easy for us to offer our clients access to this service and streamline the Condominium underwriting process. We’re pleased to partner with CondoTek.” Element Funding Opens New Two New Branches Element Funding, a division of Primary Residential Mortgage Inc. (PRMI), has expanded its footprint in Tennessee with the addition of a new brick-andmortar branch in Hixson. This branch will be under the

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management of long-time resident and mortgage professional, Kevin Blair. Originally from Dallas, Blair is a long-time resident of Chattanooga, Tenn. and has been in the mortgage industry for more than 17 years. Before opening the Hixson, Tenn. branch, he was a Branch Manager at Brand Mortgage for six years. Kevin is a member of the Chattanooga Chamber of Commerce, the Chattanooga Association of Realtors and the Scenic City BNI Chapter. “One of my greatest joys in this industry is to help homeowners successfully fund their home mortgage goals all while being able to exceed expectations and build lifelong relationships,” said Blair. “Element Funding gives me the resources and support to provide our community members with the help and tools they need as they make one of the biggest financial decisions in their lifetime.” Kevin will be joined by Sales Manager Stacie Miles, Loan Officer Mike Congdon, Loan Officer Beth Mansell, Loan Processor Kristy Hickman, Loan Processor Melanie Carter, and Administrative Assistant Kelsey Harrod. Element Funding has also expanded in Georgia by announcing the opening of a new brick-and-mortar branch located in Decatur, Ga. to be managed by Ashley Rustom. Ashley’s team has a combined 29 years of experience in the mortgage industry and is ready and focused to assist community members with their dreams of homeownership. Before opening the Decatur branch, she was a Loan Officer at Element Funding’s Atlanta branch for five years. She is also a member of the Dekalb County Chamber of Commerce. “Our community seems to be on a steady rise for home buying and we are here to help,” said Rustom. “My team wants to give people in our community the tools and resources they need to help them with making one of the biggest financial decisions in their lifetime.” FFC Mortgage Opens New Location in Rutherford, N.J. FFC Mortgage Corporation has announced

the addition of its newest branch in Rutherford, N.J., to be led by Branch Manager Norberto Maldonado. A top producer at FFC, Maldonado brings an experienced staff with him and will supervise all aspects at this new location. “This latest expansion follows the vision and business development strategy of FFC and we are very happy to have Norberto directing our growth in New Jersey,” said Doug Reilly, President of FFC Mortgage. “His team fits our culture and business model, and his promotion within FFC is an exciting step forward for us.” Maldonado said, “I am thrilled with the opportunity to open and manage the Rutherford branch of FFC Mortgage. My team and I view it as a privilege to help families attain their goal of homeownership. I believe we have the perfect foundation for the Rutherford branch to be able to offer the best experience possible for each and every client.” Motto Mortgage Opens Second Ohio Branch

Motto Mortgage, a member of the RE/MAX Holdings Inc. family of brands, is expanding in Ohio. Mark Snyder, Broker/Owner of RE/MAX Beyond 2000 in Middleburg Heights, recently opened Motto Mortgage Above and Beyond in Westlake, Ohio. The mortgage brokerage is the second Motto Mortgage franchise in the state of Ohio. “The Motto Mortgage concept is streamlined for new broker/owners and truly complements my real estate brokerage,” said Snyder. “Our goal is to provide consumers with a one-stop-option for their real estate needs. Many of our local banks don’t understand the current expectations of consumers. Borrowers are looking for competitive mortgage products and quality service. We intend to fulfill those needs.” Motto Franchising President Ward Morrison said, “I’m pleased to welcome Motto Mortgage Above and Beyond to the Motto Mortgage Network. Mark’s an exceptionally successful RE/MAX broker and we’re

eager to see him grow his Motto Mortgage franchise.” First Community Mortgage Expands Its Consumer Direct Division

First Community Mortgage has announced the expansion of its Consumer Direct Division in the Cleveland, Ohio market. The company has added 25 employees to its team since February of 2017. The new Consumer Direct Division will be led by Jay Slone, who brings 15-plus years of mortgage lending experience to the team. Slone, a Cleveland-area native, will serve as Vice President of First Community Mortgage’s Consumer Direct Division. “With the ongoing revitalization and rebirth of Cleveland, investing in the Northeast Ohio market was an easy decision for us,” said Andy Voyles, Executive Vice President and Director of Lending for First Community Mortgage. “There are great people here, combined with an unmatched work ethic and determination for success. We are confident our Cleveland based employees will flourish in our business model.” Also leading the sales teams are industry veterans Mike Mastrangelo, Larry Weir and Matthew Sheffey. Garett Boham oversees the local operations team. “To us, a mortgage loan is more than a financial transaction. Its personal. We were all born and raised in the Cleveland area and are very passionate about helping our fellow Clevelanders make great financial choices,” said Sheffey. Roostify Integrates Its Online Platform With LendingTree

Roostify has announced the integration of its online mortgage platform with LendingTree. “There is a digital gap in the mortgage industry: consumers mostly research and shop for loans online, but once they choose a loan the actual origination process is often still offline,” said Nikul Patel,

Chief Strategy Officer for LendingTree. â&#x20AC;&#x153;Our integration with Roostify brings the industry one step closer to the all-digital vision for a seamless consumer journey.â&#x20AC;? Lenders can utilize the new integration to create a seamless path for consumers to search, select, apply for and close a loan online. Consumers selecting an offer on LendingTree from a lender using Roostify will be able to authenticate into the lenderâ&#x20AC;&#x2122;s Roostify-powered online experience, with all information securely pre-populated. The consumer can move from shopping around to getting their loan in just a few clicks, streamlining the experience and improving lead quality for lenders. â&#x20AC;&#x153;Roostify is dedicated to improving the lending experience for both consumers and lenders,â&#x20AC;? said Rajesh Bhat, Chief Executive Officer of Roostify. â&#x20AC;&#x153;Partnering with LendingTree, whose mission is to help consumers find the best home loan, helps us achieve both those goals, increasing efficiency and lead quality for lenders while offering consumers a faster,

stress-free path to apply for and close a competitively priced home loan.â&#x20AC;? Mortgage Professionals to Watch l Transformational Mortgage Solutions (TMS) has announced that it has named Beth Ozenghar its new President and Chief Operating Officer. Ozenghar, whose mortgage career spans three decades, had been in the role of Senior Executive Advisor with TMS since 2016. l Total Expert has named Sue Woodard as its first Chief Customer Officer. Woodard comes to Total Expert from Vantage Production, where she served as President and Chief Executive Officer. l Waterstone Mortgage Corporation has named David Holbrook, Dustin Owen and Michael Smalley as Regional Vice Presidents for the southeastern area of the nation. l Mortgage Capital Trading Inc. (MCT) has named Ian Miller as Chief Marketing Officer, responsible for ensuring that MCTâ&#x20AC;&#x2122;s

marketing strategy effectively supports the companyâ&#x20AC;&#x2122;s business plan and helps drive growth. l LoanLogics, a loan quality management and performance analytics provider based in Trevose, Pa., has named Bill Neville as its President and Chief Operating Officer. He will also serve as a member of the companyâ&#x20AC;&#x2122;s Board of Directors. l Informative Research has named Tim Cox as their new Senior Vice President of Operations. Utilizing his 19 years of mortgage experience, Cox will be responsible for conceptualizing and implementing new methodologies, processes, and systems set to improve Informative Researchâ&#x20AC;&#x2122;s service across all products. l LoanLogics has announced the promotion of Craig Riddell to Executive Vice President, Chief Business Officer. Riddell, who formerly served as Senior Vice President and Chief Business Development Officer, will be responsible for establishing and

developing ongoing relationships with LoanLogicsâ&#x20AC;&#x2122; largest enterprise clientele, growing the companyâ&#x20AC;&#x2122;s LoanHD AppQ Network of data services and integration partners, as well as overseeing the LoanLogicsâ&#x20AC;&#x2122; account management and consulting services teams. l Proper Title LLC has announced the addition of Neil F. Narut Esq. as Senior Underwriting Counsel. l Cloudvirga has appointed Sean McEvoy as its Chief Customer Officer. As a member of the senior leadership team, McEvoy will be responsible for the firmâ&#x20AC;&#x2122;s customer leadership, implementation and support functions. l SoFi has announced that its Board of Directors has named Twitter Chief Operating Officer Anthony Noto as Chief Executive Officer and a Director, effective March 1. Interim SoFi CEO Tom Hutton, who also has been serving as Executive Chairman, will become Non-Executive continued on page 79

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CENSE SURETY BONDS STA TA AT TE LIC

Where Paper Still Hides in the Mortgage Business By Rick Grant

e hate paper. We would be happy if we never saw another paper document for as long as we lived. Well, at least that’s what we say. In the mortgage business, we’ve been saying that for about 20 years now, some of the older guys have been chanting it (with pitchfork in hand) for longer than that. And still, paper persists. We find it hiding in nearly every part of our business, from the documents we leave with our Realtor partners at an open house to the government-mandated disclosures we send via snail mail to our borrowers to the collateral files that travel with our loans to investors to back up their securitized bonds. Even when we clean out our offices and install very expensive high-tech systems to capture all of the data we could ever need to do our work, still we find paper. Millions of years of human evolution passed without a single mark ever hitting a scrap of the stuff and now, just a few thousand years after the first paper was created with a repeatable process, and we cannot get rid of it. It’s like that old Chinese proverb won’t stop ringing in our ears: “The weakest ink is stronger than the strongest memory.” It’s enough to make a person who has dedicated his life to taking the mortgage lending process paperless start drinking (again). I’m not talking about myself, of course, I work for the publication you’re reading … I’m talking about highly creative mortgage technologists working all over this industry who are dedicated to taking our business fully electronic—and trying not to lose their minds in the process. I reached out to some of them to find out where they thought paper was hiding in the mortgage business today and why it was so difficult to get rid of it. Starting where our process starts, here is what they told me.

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The point of sale A number of executives I visited with talked to me about the point of sale, not because that’s where their particular technologies were deployed, but because the POS has become the poster child for the digital mortgage. It’s true, if you ask the average television watching American how to get a digital mortgage, they will describe a red button, somewhat smaller than the old Staples “Easy Button” that when pressed, will magically produce a mortgage loan. But does it, really? You know those wild animals that fill the stage during a performance of The Lion King? Same thing. They look like

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animals, sort of, but there is really a person inside doing the work. The buttons that many people think create a digital mortgage are, in my mind, more like doorbells that alert companies that know a great deal about good customer service that they have a customer that is ready for service. And that’s not a bad thing, unless you’re a technologist actually working on making a paperless mortgage a reality. Then it tends to look more like a distraction. When everyone is out shopping for doorbells, who is focusing on the customer or a paperless process that actually serves them? I get it. Consumers want convenience and a great customer experience. Government regulators want them to have it and believe that technology is the answer. It turns out that technology is “an”

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answer, but not the only one. And then only if it is adopted. And it must be adopted not just by the lender, but also by the consumer. As Jorge Sauri, Founder and CEO of Finkube points out, there are two primary places that paper loves to hide and they both lie in the shadow of the borrower. He’s talking about disclosures and verifications. “We have to verify the borrower’s income and assets and that’s not all electronic yet,” Sauri said. “There are some good technologies out there, but so much is still being done on the phone by a person with a pad and pen. Explanation letters and anything else that drops the loan out of automation ends up on a piece of paper as one more document in the file. When it comes to disclosures, borrowers

still have to opt in.” The workaround for most borrowers is to track the paper until it comes back with the correct information and signatures and then simply scan it into the system, using optical character recognition software to capture any data that must be pulled into the LOS. “From the lender’s perspective, it’s still paperless lending,” Sauri points out, it just doesn’t provide all of the benefits lenders have been told for 20 years that electronic lending will bring. Sauri says this will always be the result when we drop technology onto an existing process that is already broken. “From the mortgage manufacturing point of view, you can’t go truly paperless until you fix those two processes,” Sauri said. “You cannot be paperless with manual process … it takes robotic processes.” Sauri, who played a key role in the development of the industry’s first sub-prime LOS back in the 1990s and then

developed MortgageDashboard, one of the first Web-based LOSs, is working on a system he says will allow a lender to prequalify a person for a mortgage without any paper or even any human beings involved. He says it will be a step toward automating the disclosure and verification processes as well. “Otherwise,” Sauri said, “you’re going to have to pay someone $60,000 per year to sit around and push a button to generate a disclosure or verification form, which they will hand to a borrower to get a signature and then scan back in again.” George Jetson, it’s the mortgage industry on Line 1. Whether it takes robots or not is still to be determined, but having the right technology in place to solve a problem before it becomes a problem has already been tested, with disastrous results. “TRID proved to be very challenging for lenders that had continued on page 56

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not fully integrated an automated closing cost and fee engine into their systems,” said Gregory E. Teal, President and Chief Executive Officer for Ernst Information Services. “Because they could not afford errors, it caused many lenders to move back to paper. We saw lenders that were calculating fees based on a printed spreadsheet they kept on their desks. TRID led many to realize that if they could electronically integrate the fees along with any updates, they could get rid of the paper. That made what we offer, which had previously been a ‘like to have’ technology, into a ‘gotta have.’” Ernst started out providing closing cost data to the industry back when lenders used telephone-book-sized books to calculate their Good Faith

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Estimates (GFEs) and Closing Costs. Today, all of that work is done electronically, with Ernst’s systems integrating to every jurisdiction in the country and feeding accurate data into lender systems either through an online interface or directly, utilizing Ernst’s custom fee engines within the lenders’ shops. The bigger challenge, Teal said, was getting the title agency on board with providing fees with lenders in a fully online environment. “TRID drove lenders to work with title agents who could provide certified accurate costs to them at the Point of Sale. This gave larger title companies at a distinct advantage,” Teal said. In response, Ernst created its Settlement Agent Gateway to help even the smallest title companies negotiate fees in advance and get a shot at the lender’s business. “Taking the paper out of that

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part of the business was an essential move, both for compliance—because it’s just not possible to be guaranteed accurate with paper price sheets floating around,” Teal said. “In a paper-based world without these tools, a lot of those smaller companies wouldn’t exist today.” The loan origination system If you really wanted to pick a poster child for the digital mortgage, it should be the technology that originates the loan. Today, we have a number of LOS platforms that are capable of originating a loan without any paper whatsoever (not available for all loan products, subject to restrictions based on credit score and downpayment; requires buyer opt in for all electronic documents). If that sounds a bit like the fine print in an auto dealers radio ad, well that’s because you have to have the right deal to fly through these systems, though some technologies are better than others. According to Dan Green, Executive Vice President of Operations for Mortgage Cadence, an Accenture Company, it often comes down to the way the technology is used. When I asked him where the paper was hiding, he replied, “Hiding?” “It’s hiding under the bright cover of daylight,” Green told me. “In other words, it’s not hiding at all, it’s in plain sight throughout the process. And exactly where paper remains is or can be different lender to lender based on their manufacturing and QA processes.” Green says he finds two principal reasons why lenders are finding it hard to get rid of paper documents. They don’t trust their technology and they aren’t ready to reengineer their processes to allow them to trust it, on the one hand, and compliance requirements on the other. “Paper is tangible and traceable and auditable using traditional, tangible, wellunderstood processes,” he said. “Eliminating paper, in other words, in addition to causing discomfort, requires re-

engineering processes and educating teams how to not only work effectively with it, but to get comfortable with it as well.” As for compliance, Green says, “Having paper and tracking paper may give the perception that compliance with regulation is easier. Regulations themselves don’t require physical paper though physical paper may be perceived as making compliance easier.” Anything that makes compliance easier for the lender is bound to be attractive, even if it’s only wishful thinking. But what impact is this having on the enterprise? “It’s an industry challenge, certainly, for a couple of reasons,” Green said. “The first is obvious: clinging to paper makes a fully digital, completely electronic mortgage difficult to achieve. Second, paper is expensive and inefficient. Mortgage team productivity is down about 42 percent over the last eight years, with no signs of improving. Moving toward fully electronic, paperless mortgage lending yields greater efficiency, and therefore, lower cost to close, another serious, long-term issue the industry faces.” When does Green think we’ll get there? “Not soon enough!” But he says it’s not really a technology problem. “The environment (technology, legal) is and has been in place for some time. The work before us is process, and the faster the industry moves in that direction, the quicker borrower satisfaction improves and profitability increases.” LendingQB’s Director of Sales and Marketing Linn Cook also told me that paper carried with it a comfort level that made it hard to pry out of the hands of company personnel. “It is definitely on the decline, thanks to all of the technological advancements that have been made, but many Loan Officers still give paper 1003s to borrowers,” Cook said. “This speaks to the reliance and comfort that people still have with paper. But the area that has not progressed as much as we would like to see is the submission of documents from borrowers. Borrowers either do not have the tools or the comfort

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have to call in the government to “help,” I shivered like that snowman when he saw Bumble the Abominable Snow Monster. Time to move on to ... Loan processing If you’re on a paper hunt through the modern mortgage enterprise, your best chance of bagging a big file is in the loan processing department. This is where our best systems bleed out documents and where all of

the borrower’s little snippets of paper come home to roost. But even here, we’re making progress. Eric Wilson has spent 25 years in the mortgage business. Currently, he serves as Senior Vice President and Business Leader for Mortgage at SLK Global Solutions. He says this

industry has made significant advancements in just the last five to seven years. “We went from an industry that had paper everywhere, files literally stacked up and auditors always asking for the paper file, to our systems today where virtually all of our documents are stored electronically,” Wilson said. Wilson leads a team that continued on page 58

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with providing their supplemental documents in an electronic manner, and this is an area that creates a lot of inefficiencies and errors in the mortgage lending process. Borrowers are not comfortable using automated verification tools that require them to enter login and password credentials. The privacy arguments aside, it’s just plain inconvenient having to even look up those credentials. So complete automation of verification data is still a ways away both in terms of technology and user adoption.” But Cook said this isn’t always a problem for his company’s clients. “The mortgage process is certainly much more paperless than it used to be. Our system has the ability to enable an underwriter to fully approve a loan without ever touching a single piece of paper. But that doesn’t mean underwriters are comfortable doing so. I would guess that the majority of underwriters still print out at least skinny files and reference the paper documents while they are verifying information electronically in our system.” But he says this doesn’t necessarily mean that underwriters are “stubborn and old school.” “We know there is a lot that we can do from an innovation standpoint to make it easier for operations staff to transition away from paper,” Cook said. “It’s a two-way street and even that probably won’t make paper completely disappear.” But, what will that take? “The technology for a completely paperless mortgage process has existed for at least 20 years,” said Cook. “The fact that paper is still used speaks more to the depth and breadth of the mortgage lending process itself. There are so many different parties that are involved with the process—originators, title companies, insurance companies, warehouse banks, investors, servicers, etc.—that getting everyone to agree to go paperless and adopt a pure digital format is extremely difficult. Unless a major player, like the GSEs or the actual federal government, mandate an all-electronic process, I believe paper will always maintain a ‘thread’ in the industry.” When he suggested we might

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handles back office loan processing work for some of the nation’s largest originators. “To perform our work, we’re actually inside our customer’s LOS and its completely paperless,” said Wilson. “Nothing is done on paper.” But Wilson admits that his team still sees paper tax returns and other borrower-supplied documents. He marks it down to old habits that underwriters use to do their day-to-day work, like making notes and performing calculations on paper docs and then scanning them into the computer for safe-keeping. OCR and ICR are making strides here as well, he says, and as technologies mature, he expects to see less paper. But new state laws are likely to help as well, he pointed out. “Some states still demand that paper be used when real estate changes hands,” Wilson said. “While 80 percent of our work

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can be done electronically with electronically signed documents, a handful of documents must still be wet signed to satisfy the regulators in certain states. How soon we get to completely paperless will depend in part upon them.” Lenders are likely to have some unlikely allies in any fight for government change. “Millennials will be the first ones on it,” Wilson said, “but the Baby Boomers will be holding onto paper for some time.” As a boomer myself, I cannot argue with that logic. Harry Gardner, former Vice President of Industry Technology for the Mortgage Bankers Association and current Executive Vice President of eStrategies for Docutech, also had something to say about

state governments that are holding our industry back. Docutech is a leader in electronic documents and has helped many lenders provide electronic disclosures and closing packages to consumers. But Gardner says that more is possible, with the right government support. “I would like to think that over the next three to five years, we’ll see a tremendous amount of activity in state governments who are now coming to a new level of awareness on how electronic transactions are being held up by state laws not recognizing the current state of eNotarization,” Gardner said. “The current trend seems to revolve around states choosing to recognize traditional eNotarization, meaning that they don’t have to put out a specific law, but can state that they do recognize the legality of electronic signatures under ESIGN and UETA, the standing laws that have been in place since 2000. With the new remote online eNotarization trend (doing it through an AV link on the computer) there is growing state awareness as well, and a lot of states are looking to support that in order to avoid being left behind.” This is important, Gardner said, because the closing process is where a lot of paper is still hiding. “Paper is still involved in almost every eClosing,” said Gadrner. “Today, nearly every single eClose relies on a hybrid method and requires paper at some point alongside the electronic approach, whether that’s the note having to be paper due to investor requirements or simply because of state acceptance of eNotarization and challenges with the county recorder accepting that.” Part of the problem, Gardner says, is that the industry still faces a challenge when trying to easily add external documents for a loan closed electronically. “For instance, the ideal eClosing would seamlessly integrate the title and settlement documents as well as any special lender documents (say, a termite inspection form),” Gardner explained. “Since those docs come in externally (rather than from the lender’s doc provider), they need to be added

to the eClosing package and accurately tagged for eSignatures. Some eClosing providers in the industry have solutions for taking in those special docs and tagging them, while others simply keep them on paper for hybrid eClosings. The Holy Grail, of course, is for the entire closing package to be eSigned—a truly ‘digital mortgage.’” The reason it may take longer to solve this problem is that it’s not that big a problem for the lender. “For most lenders, it’s not a problem and doesn’t prevent them from moving closer toward the digital eClosing process by leveraging a hybrid eClosing where, for instance, the notarized docs may end up on paper,” Gardner said. “The lender can still generate their loan package to be as digital as it possibly can be. If there are paper docs involved and the signing agent performs the role of a paper notary, those docs can still in most cases be scanned in and submitted for electronic recording.” In fact today, Simplifile reports that eRecording-enabled counties cover more than 80 percent of the U.S. While Gardner admits that a few docs may still drop to paper on the closing table, he says they can be scanned in electronically afterward, eRecorded, and delivered back to the lender electronically. According to Gardner, just about everyone is chomping at the bit to move towards eClosing. But when will it happen? “At Docutech, we’re excited about the idea that within the next few years the industry is finally reaching the point of closing the paper gap that occurs at closing,” added Gardner. “Electronic methods are there, but there are still areas paper is being used, however we see a great deal of interest from the industry as a whole, which is a fantastic sign.” One place we might look for that interest is to the title industry, where most of the nation’s closing agents live. Title and closing From the borrower’s perspective, lenders throw a lot of paper (in the form of loan application and closing docs) and require a lot of paper (in the form of bank statements and tax returns). But

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by the time a firm comes to us to partner, that client is already aware of the value of going ‘paperless.’” Stone says his team refers to this as “integrated transparency” and says it’s the starting point for an industry digital transformation that has already begun. “It’s one thing to throw money at a shiny new tech platform, but that doesn’t, in and of itself, guarantee an efficient process,” Stone said. “Right now, too many

of the technologies used to process an entire mortgage—that of the title underwriter; that of the lender; perhaps the vendor management platform—don’t integrate seamlessly. As a result, we still have quite a bit of the confusion, redundancy and delay that comes when the various parties to the deal aren’t truly in sync as to what’s happening and when.” While Stone admits that there is still “a lot to unwind and

rebuild in the way of process in our industry” he says that he is seeing progress and companies making “real strides in the right direction.” Servicing Meanwhile, on the servicing side of the business, the nation’s servicers are still responding to regulatory changes that have turned their business upside continued on page 60

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the paper they remember the longest is the giant stack of paper documents they are presented with at the closing table. “The settlement services space has definitely come a long way,” said industry veteran Patrick Stone, Chairman and CEO of Williston Financial Group, parent company for WEST and WFG National Title Insurance Company. “However, I’d say when it comes to meaningful integration, we’re still in the early stages for perhaps half of the industry or more. We still have a lot of hybrid processes that require paper in places. Or, we often find ‘bolted on’ tech that’s not integrated or imbedded. As a result, there’s still a lot of wasted time and redundancy.” Stone says there are many reasons for this, including industry inertia, state regulations or laws that don’t lend themselves to digitization. proprietary systems that don’t easily integrate with other systems. “And there’s always cost and the pain of implementation,” Stone said. “Above all, we still desperately need more meaningful integration between all of the participants in the mortgage process before we see a truly ‘paperless’ process,” Stone said. “The good news is that it’s getting exponentially easier to overcome these challenges. We spend a lot of time educating people about those improvements. But not everyone is aware of that or open to it.” While getting every shred of paper out of the process may not be important to lenders who know they can just scan in the odd document when necessary, it will become more of a priority to those lenders who want to compete for a more particular mortgage customer. “This is a problem for anyone seeking to compete in a market where the client and consumer increasingly demand speed, efficiency and convenience,” Stone said and suggested that he knows where to find the companies that get it. “One of our primary purposes at WEST is, of course, rebuilding the mortgage process, which includes digitization. Accordingly,

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down. What was initially a simple business of collecting payments has grown into the primary and longest living mortgage industry relationship that the typical consumer will ever have. What takes 30 days to originate (in a perfect world, subject to restrictions … yada, yada) could take 30 years to pay off. That’s a long-term commitment—and not just for the borrower. And while the servicer may be the single point of contact for the mortgage borrower until rates fall and they refinance, the loan itself may be sold any number of times. When it does, the paper follows it, mostly hiding in the collateral files. John Hillman is Chief Executive Officer of Nationwide Title Clearing Inc. (NTC). His firm made a name for itself in, well, title clearing, but

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over the past 25 years, has become one of the foremost experts in research and document services in the residential mortgage industry. NTC offers a range of document related services, including collateral file remediation and that’s where he says a lot of paper is hiding. “Our industry’s collateral files are filled with paper documents,” Hillman said. “They have to be because no one in our industry has adopted a life of loan electronic process. That means that someone is electing paper over electronic documents and we have to make sure those documents actually travel with the loan.” Hillman’s team digs through the public record and document custody shops in search of the documents required to perfect collateral files for NTC clients. They don’t often like what they find.

“We’ve been in document custody shops that won’t adopt an electronic process, even if it is faster for them and their clients,” Hillman said. “They won’t do it because of the initial expense of digitizing all of their existing documents and setting up technology to ingest documents electronically. That initial expense would negatively impact their bottom lines.” In this respect, Hillman says our customers are actually ahead of the industry. “Borrowers like paper, but they are willing to accept and even signing documents electronically as long as they know they can be securely stored after the fact,” said Hillman. So how long does Hillman think it will take to get the paper documents out of the collateral files? “All of the paper could be completely gone in 15 years,” Hillman said. “I don’t think many would disagree with that. Unless someone solves the Life of Loan electronic process problem, we’re not going to see widespread adoption anytime soon. Now adoption of blockchain could speed up this process, if it’s adopted on the document management side. But we’ll still have legacy docs that have to be scanned—millions and millions at the cost of millions—and some banks and country recorders are never going to want to do that.” So why does Hillman thinks it’s even possible to get our industry into the electronic realm? Because his company is already doing it on the eRecording side of the business. NTC sends millions of documents to county recorders around the country each year. Of those that they send for recording into the public record, currently 70 percent are recorded electronically. Hillman says his firm will increase that percentage in the future. In terms of paperless processing, that is a real success story, but it’s not the only one. Another niche has seen similar success. Denis Brosnan is President and Chief Executive Officer of DIMONT, a provider of technology-enabled solutions in

specialty insurance claims processing and collateral loss mitigation management for mortgage and auto lenders, servicers and investors in the United States. “Our business wouldn’t even exist if we weren’t capable of automating paper intensive processes,” Brosnan said. “We’ve been here for over 20 years and founded hazard claims adjustment for servicers on delinquent and vacant properties.” Brosnan says that changing a business like the mortgage industry is akin to changing the direction of a battleship. It takes a lot of time to steer. Even so, he said he sees servicers changing course. But they can only do it if industry vendors offer them solutions. “I’ve been a service provider over 20 years,” Brosnan said. “We are the ones in our community who have to bring the new ideas and technologies.” His firm is doing that today with two products he was promoting at a national servicing conference as this article went to press. The first is a service that helps homeowners process hazard claims via a portal that connects them to their insurance provider and to their servicer, who has a vested interest in seeing any damage to the collateral repaired. Brosnan says this service is getting more attention in the wake of all of the natural disasters we’ve seen over the past 18 months. The other offering is an investor claims service that helps servicers navigate the process of filing claims with investors that offer loan guarantees, such as the FHA. It’s a paper intensive process that can only truly be managed electronically, Brosnan says. “It’s kind of ironic that we’re hyping a portal product that we actually believe will be revolutionary,” Brosnan said. “It really shows the state of the industry. The average person interacts with many portals each day, but it’s taken many years for our complex industry to get these technologies to penetrate all the dark corners of our business. But, bit by bit, we’re automating and I think there is a significant interest on the part of everyone in the community to see paper-based processes digitized. It’s just going to take a while.” continued on page 62

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where paper still hides

And everywhere else In this article, we took you on a whirlwind tour through the mortgage process, but despite the length of this piece, we could only touch the high points. We didn’t talk about default servicing, foreclosure and REO disposition, the auction process or even property valuations, but each one of these areas—and all of the others—has its technologists who are intent on digitizing or otherwise de-papering their part of the process. But remember, we’re still only operating in the primary mortgage market. There is an entire level above this one that must also somehow get on the same page. As JP Kelly, President of OpenClose, puts it: “If all documents can be handled electronically starting at the point-of-sale and then sail

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effortlessly through underwriting, processing, closing and funding, then as a mortgage lender you’re well on your way to being a successful paperless shop. Now, on the secondary market, ‘digital loan trading’ is starting to gain momentum, which is removing the need to use spreadsheets, phone calls and printing. As it relates to servicing, the technology exists to have the loan reside securely in an eVault, as opposed to being printed, imaged and filed somewhere, but there is a ways to go with adoption.” Kelly added, “In addition, although the GSEs accept eNotes, there has still been a reluctance among the investor community to do the same. When it comes to warehouse lending and funding, the collateral package traditionally needs to be physically mailed to the warehouse lender and then sent to the investor/GSE. Some warehouse lenders are starting to implement technology to accept

eNotes, which enables lenders to instantly deliver the package to the ‘eWarehouse’ lender, where it is then registered with MERS, stored securely in an eVault, and then the eNote/collateral is electronically transferred in minutes, rather than days. This not only eliminates paper but also saves in overnight shipping costs, which quickly adds up.” In the end, Kelly agreed with most of the experts I visited with for this article. Getting rid of the paper depends upon two factors: Technology capability and lender adoption. “There are lots of pieces of technology to assist in facilitating a paperless lending process and true digital mortgage, but many are lacking key components, or they are siloed where systems often do not talk well with one another and exchange clean data,” Kelly said. “What’s more, as an industry we’re still facing an adoption curve,

although that is quickly changing. Those lenders that implement the right end-to-end digital mortgage technology now will have a significant competitive advantage over those lenders that wait, which has a direct impact on the borrower experience and a reduction in the cost to originate and close loans.” Finally, we must not forget that going paperless isn’t just about all of the money we’ll save and the time we won’t lose hunting for lost documents. It’s really about making a better process for our borrowers. As Brosnan put it: “It’s not just about saving money, but our clients are the banks and here we have an opportunity to help them improve their customer experience drastically. And that’s what we should be talking about. We’re cutting out paper to cut out weeks of frustration for our borrowers and that makes it all the more important.”

Rick Grant is Special Reports Editor for National Mortgage Professional Magazine and Mortgage News Network. He may be reached by phone at (570) 497-1026 or e-mail RickG@MortgageNewsNetwork.com.

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Going 100 Percent Paperless: Where It Is Now and Where It Is Headed ational Mortgage Professional Magazine recently sat down with Tim Anderson, Director of eServices at DocMagic, to gain insight and trending into the mortgage industry’s current progress and needs to achieve a completely paperless lending transaction. Tim is a subject matter expert in end-toend digital mortgage processes, electronic compliance and supporting eServices, among an array of other mortgage technologies. He has more than 30 years of industry experience working on both the lender and vendor side of the business.

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NMP: Lots of attention has been placed on the importance of digital mortgages as of late, in particular in the last 18 months. Why the sudden rush? Tim Anderson: The advent of fintechs to focus and improve on the consumer experience in order to capture more business has been significant. Couple that with the government-sponsored enterprises (GSEs) moving their traditional post-closing pre-funding review process to a more automated preclosing quality control (QC) process, along with Day One Certainty and Loan Quality Advisor, and these have become major factors and drivers of change.

“Delivering a system that does not include an automated way to “e” enable the documents is not a solution.” —Tim Anderson, Director of eServices at DocMagic

eClose SaaS version in the spring of last year. The mistake that many people make, however, is that they think eMortgage services that facilitate eSign equates to eMortgages and a paperless lending process have that couldn’t be further from the been available for quite some truth. It is so much more involved time, but industry-wide adoption than licensing an eSign tool. There has been slow up until lately. is a dominant eSign player out there However, you are with an today that focuses on serving organization that is currently at multiple industries, but the ability to the right place at the right time. auto-enable all the legal documents Can you elaborate as to how you required to facilitate a legal and got here? compliant closing, including the The mortgage industry, as a whole, GSEs’ requirements to deliver a takes quite a long time to flex with category one SMARTDoc eNote significant changes, especially from takes a level of sophistication and its entrenched paper-based industry knowledge that no eSign processes, which is a long-term tool or dumb PDF-based doc commitment. At DocMagic, we provide can deliver. That is why developed our own eSign DocMagic is in a unique position to technology back in 2011. We later deliver a “total” solution, (eSign, acquired eSignSystems from WAVE eClosing, eVault, eDocuments, in 2014 to add a total enterprise eNotary) than most vendors that are on-premise eSign, eClosing and just hocking a technology that eVaulting solution for lenders and lenders still must figure out on how vendors to implement within their to implement on their own. own firewalls. With great fanfare, Believe me, when you are a we launched our hosted Total national player and you start looking

at the magnitude of creating and supporting thousands of mortgage templates for closing documents that are dynamic and variable, those types of broad, non-industry focused systems are not sustainable and just won’t scale with industry complexities and constant regulatory changes. DocMagic’s technology facilitated most of the nation’s first successfully completed eClosings. What can the industry learn from those eClosings? This is a very insightful question. We knew early on that as eMortgages became mainstream many “JohnnyCome-Lately” companies would eventually jump into this space and offer hybrid solutions. Depending upon your lending footprint, at the local jurisdiction level there are still a lot of variables in what they accept as legal and compliant from an eSign, eNotary and eRecording perspective and because of this many of the major players are hesitant to jump in. Again, this is a

key differentiator for us as we make our documents “intelligent” to provide visual cues and automated compliance rules so we know down to document and county level which documents can be eSigned, eNotarized or need to be papered out and “wet” inked signed so the lender does not have to manage all of this. The other key piece of the equation is that you cannot just automate the lender side of the transaction and ignore the title aspect. So we auto “e” enable those documents for automated eSign and eNotary to deliver a full paperless closing and better consumer experience for all parties involved. eClose adoption is well on its way. Can you tell us a little bit about how eClosings are most effectively addresses with technology, and how it will help the industry advance digital mortgage adoption? This also ties into the previous question of us having been out there longer than most to develop a more total, feature rich and robust solution than just a basic, simple eSigning tool. Delivering a system that does not include an automated way to “e” enable the documents is not a solution. Although we offer our system with or without embedded documents, in most installs where it was left to the lender to enable their documents, it never seemed to get off the ground. It’s one thing to enable a few static documents that incorporate a couple pages like the 1003 loan app, but it’s a totally different level of scale and complexity to attempt to do this with thousands of closings documents that must be dynamic and variable in nature. Both Fannie Mae and Freddie Mac maintain a list of approved vendors that support eNote, eClosing and eVaulting, but for many on that list they are dependent upon other vendors to provide the key pieces needed to deliver a complete process and solution. That means that lenders have to separately vet out and sign multiple agreements to get and do what we do as a single provider. This introduces additional third party processes and risk into an already fairly complex process and service. At the end of the day, who is that one throat to choke that is going to stand behind and rep and warrant the process? People forget this is more than buying shoes online via Amazon. This is one of the most important legal transactions that a

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majority of consumers will make in their lifetime. I would go with a vendor that has a sole purpose of ensuring legal compliance. Are there any pitfalls that lenders should look out for when selecting a vendor and implementing a digital mortgage process? Yes. One key pitfall is what I mentioned above: Go with a vendor that can automate and support the entire process. Also, make sure they have been thoroughly vetted and approved by MERS, Fannie and Freddie and are currently on their vendors list. And finally, to ensure success, go with someone that actually has some experience and has been doing this for a while. Trust me, I’ve seen many initial failed “pilots” take place that have consumed a lot of time and resources, basically learning as they go along. This is not the best path or process you want to take.

But what good is verifying data if the originator cannot ensure the data that was last verified is in the documents they are purchasing? The only way to do that is to create an intelligent document and then eClose it to provide a tamper evident seal to ensure that. That is why most doc systems can only support a “hybrid” eClosing because they cannot produce a SMARTDoc eNote or any other intelligent document that can be systematically verified and

boarded. That is also why they do not have good solutions to auto tag eSignatures and eNotary just like the embedded data tags on those documents. SMART Documents is what allows lenders to create more automated processes and auto boarding and verification of the data without having to OCR dumb PDF’s to extract the data to verify data after the fact. That is what intelligent processes and documents is all about and where the industry is moving.

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There still seems to still be quite a bit confusion in the marketplace as to what actually comprises a digital mortgage. We’ve heard about hybrid solutions making some headway, but what about a completely paperless, comprehensive digital mortgage? Can you break it down for us? Yes, and some of it is in terms of how we define a “Digital Mortgage” versus an “eMortgage.” We really don’t even talk about eMortgages anymore, as the industry coined the new term digital mortgages as if this is something totally new and different. When I talk about digital mortgages it’s more about providing additional automated data validation around systemically verifying the compliance of the data before you include it a document. eMortgages are really about making the process of generating, executing, storing and delivering the documents in a totally paperless and legal process. To ensure compliance, you need a solution that does both. That is the entire reason and need for an intelligent or SMART Document process. To fully break that critical component down, however, it would take another article to describe the importance of why. But it is also a reason why many doc companies still can’t support a full eClosing process because their systems are based upon and can only produce dumb PDF documents as standard output. DocMagic’s docs, on the other hand, are native XML so we can embed the original source data to be electronically

boarded and re-verified for any system to not only ensure the integrity of the document but the compliance of the data securely embedded within it. This is a revolutionary concept that many still do not understand today but if you look at where the Consumer Financial Protection Bureau (CFPB), Fannie Mae and Freddie Mac are going, all the new CFPB and GSE’s documents are moving to support MISMO 3.3 data format to verify the data before documents are drawn.

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Would The Jetsons Get a Loan From You? By Joe Langner

n 1962, Hanna-Barbera delivered its animated vision of utopia to Americans via primetime television. In the 56 years since The Jetsons came to TV, several of the innovations George Jetson and his family used in their daily lives—or some version of them—have become a reality. Today, drones, smart watches, jetpacks, robots and flying cars are no longer the stuff of cartoon fantasies, but are real and some are even present in our everyday lives. In a Jetsons’ universe, a paperless mortgage really doesn’t seem all that impressive. In fact, it seems almost ludicrous that today mortgages still require wet signatures, when electronic signatures have been in use for the better part of two decades. In truth, however, we are closer to paperless mortgages than ever before, and the reasons why have as much to do with consumer demands, as they do with emerging technology.

requires a wet signature, while the rest of the closing documents can be signed electronically. Advances in notary technology, such as virtual notarizations, allow signatures to be notarized remotely through a shared streamed environment, such as a WebEx or GoTo Meeting-like conference call. The technology is here today, and the process is gaining traction in several states that have approved the use of remote notaries. It’s now a matter of more investors, lenders and governments accepting it.

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Paperless and digital: The difference matters A paperless mortgage sounds like a great idea, but a digital mortgage is even better. Paperless doesn’t mean “no paper,” it means “less physical paper handling.” Paper loan documents still exist, but they are sent, viewed and processed electronically in a virtual environment. Unfortunately, the system or technology used to manage the work dictates the order in which documents are reviewed by the user. As a result, many lenders must use multiple applications and screens to see multiple documents, forms or other data elements at one time–when comparing actual verification data and making on-screen notations, for example. Digital mortgages follow the same idea, but with a couple of major differences. First, digital mortgages take advantage of process automation, server-less technology and other tools to perform the same work as paperless system, but without human intervention. With these tools, lenders can create a consumer direct platform that lets the borrower apply for a mortgage. Then the platform automatically performs, for example, the credit

“The way mortgage lenders engage consumers is changing, big time. Borrowers want a lot more than simply getting a lender to call them back. They want answers, and they want them now. They want control over the process.” check, calculates conditions, runs compliance, and sends the data to Fannie Mae or Freddie Mac, for approval. Second, with digital mortgages, information is collected and organized, well, digitally. In paperless systems, a great deal of information needed for each loan file—particularly information about the borrower—is based on forms and paper documents; these are often handwritten, scanned or printed, and then sent to the lender as PDFs. Depending on the type of technology being used, it’s not always easy to “scrape” information from a PDF, or any other file type for that matter. With a digital process, capturing information is easy—information is stored digitally as it is being entered. In other words, we’re talking about a process that creates and transfers data digitally without the need for paper at all. For the borrower, this means a more intuitive and responsive experience with faster turnaround times and immediate results.

What’s holding things back? The technology that enables paperless and digital mortgages already exists. Borrowers can fill out a full mortgage application, esign it and submit it online. More documents are being delivered electronically to consumers, including loan estimates and closing documents, and many are even automated. But there are a few cases creating obstacles. l Signature requirements: Regulations demand a wet signature for certain documents. For example, the Patriot Act form is the only initial disclosure form that still needs a wet signature. Because it can’t be e-signed, it still needs to be hand signed, then scanned and sent back to the lender. The lender incurs costs and added consumer workflow complexities for a single document that is no more complex than any other document the borrower signs. There’s a similar issue with the closing package. The note still

l Stuck in the past: Another obstacle is our industry’s decades-long reliance on standardized forms. In the earlier days of automation, tech companies would upload forms put store them in a computer, so the forms would be easier to replicate and reuse. Many lenders are still scanning documents and faxing or emailing them back and forth with no straightforward way to “scrape” the data from the document into a system’s fields. This process is inefficient and prone to error. Many lenders are also burdened with old, legacy loan origination systems that don’t have digital capabilities. Some have managed to build workarounds to leverage a bit of automation. However, this is often costly, adds complexity to their technology environment, and often introduces new processing gaps or compliance risks. l It takes a village: The single biggest roadblock, however, is the number of people and organizations it takes to process a loan. Lenders, their software vendors, credit agencies, flood and title companies, and the GSEs and secondary market must all work together to complete a single loan. Getting these different systems and vendor partners to really work together and communicate in a mutual environment is a huge

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challenge. The good news is there are newer technologies now available that enable lenders to communicate between different software systems in a much more eloquent way. It’s just a matter of getting our industry to rethink the way mortgages are created and to let go of increasingly antiquated ways of doing business.

digital mortgage providers to give borrowers the kind of home buying experience they deserve.

In other words, they’re ready to help The Jetsons buy or refinance their home. Are you?

Joe Langner is Chief Executive Officer of Blue Sage, developers of the mortgage industry’s first browser-based, end-to-end digital lending platform. He is responsible for establishing the Blue Sage platform as the technology choice for direct lenders, retail lenders, wholesale lenders and correspondent lenders. Joe is a mortgage technology veteran with more than 25 years of executive experience in the financial services and software industries, and former chief operations officer at Ellie Mae. He can be reached by e-mail at Joe@BlueSageUSA.com.

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Making the sales connection Many sales professionals look at the advancement of paperless and digital technologies and wonder, “What’s in it for me?” In a word: Everything. The way mortgage lenders engage consumers is changing, big time. Borrowers want a lot more than simply getting a lender to call them back. They want answers, and they want them now. They want control over the process. They want to do everything online—apply for a loan, sign documents, and see and understand what they need to do to complete their file and get approved fast. If you can offer borrowers these things, you’re a huge step ahead of your competition. Because a home is such a large purchase, borrowers today turn to the Internet to not only understand what they can afford and what it will cost them, but to get their loan. A digital mortgage is an opportunity for you to separate yourself from the competition by giving consumers what they truly want–an easier process they can control with faster results. Simply look at the rise of lenders that have already adopted digital capabilities: their success, growth and revenues speak for themselves. It’s important to remember that providing a digital mortgage is not a strategy to replace the loan officer. Borrowers not only still need professional advice to complete the biggest purchase of their lives, they expect it. Digital mortgages merely augment the ability to communicate to the consumer and acquire business at a lower cost and more transparent manner. Today, it’s not enough for Loan Officers to just have their own Web site. They need much more, including the latest mobile and Web technology as consumers increasingly use a phone or tablet as their primary shopping device. Just like flying automobiles ruled

the Jetsons’ universe, the ability to do commerce with borrowers via mobile devices and the web is now a requirement for Loan Officers. If you think about it, The Jetsons even foretold the elimination of paper. The teenage daughter kept a digital diary, the son studied astrophysics by video, and George Jetson read the newspaper on a flat screen TV. Indeed, the technology to enable digital mortgages is already here, and more lenders are collaborating with

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The Mortgage Industry’s Move to Paperless By Peter Pescatore cross many aspects of today’s life, the push to paperless is evident and largely unavoidable, and the mortgage industry is no exception. The process of filling out applications and signing contracts not only causes a ruthless wastage of paper, but also is a challenging ordeal for both the applicants who need to undergo tedious cycles of documentation and for the lenders who need to maintain duly updated records of their customers in the form of heaps of files in their offices. As such, eliminating the use of paper can be a true blessing for the mortgage industry. Going paperless will not only simplify and quicken the related processes, but also

help in conserving the environment on the whole. Paperless mortgage: The statistics With the advent of advanced digital technologies, there has been a phenomenal shift from traditional processes to all things digital. We have seen how digitalization has simplified a variety of our everyday tasks and now is the time to witness the transformations in the way we get our mortgages as well. While the technology might be relatively new for the industry, there are several lending institutions that have already digitalized their operations and adopted paperless loan processing for convenient and fast processing and disbursal of loans. And that’s not all! Going digital has also helped

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countless lending institutions to enhance their mobility and accessibility and boost their revenues in an exceedingly competitive market. Back in 2016, the leading document technology provider Xerox had carried out a survey called the “Xerox Path to Paperless Survey” in which it was found out that both the lenders, as well as borrowers, were more than willing to embrace the complete digitalization of the mortgage industry. The survey also established that in the wake of the major regulatory changes namely the TRID rule or the TILA-RESPA Integrated Disclosure Rule, approximately 92 percent of the experts in the mortgage industry anticipated a rise in the automation of the loan processing in the country. According to the survey, while 66 percent of individuals stated that the digitalization will help in speeding up the closing disclosure process, a total of 63 percent believed that it would be of great help in making the document delivery process quicker and more simplified. In addition, nearly 59 percent of the individuals pointed out that by going paperless, the mortgage industry will be able to achieve not only lower cost-per-loan, but also reduced processing times. eMortgages In a bid to go paperless, the mortgage industry has switched to the digitalization format of loan processing called eMortgage. In essence, an eMortgage may be defined as an electronic mortgage wherein the entire documentation associated with the loan processing including its creation, execution, transfer and storage is carried out electronically. The eMortgage may be rightly deemed as a quicker and more simplified version of the traditional mortgage processes. The United States of America has certain legislations including the Uniform Electronics

Transactions Act and the Electronic Signatures in Global and National Commerce Act that makes eMortgage legally enforceable within the country. In addition to this, the U.S. government is also geared towards standardizing the eMortgage with the help of the MISMO or the Mortgage Industry Standards Maintenance organization. The MISMO workgroup closely associated with the standardization of the eMortgage is currently involved with updating the MISMO data and integrating electronic signature capabilities and other data elements in a bid to create an entirely paperless infrastructure. The aforementioned infrastructure for the eMortgage has been formulated on the lines of the SMART DOC and the SMART Document implementation guide. Paperless transactions Paperless mortgages indeed have the potential of becoming a revolutionary game-changer in the industry. As such, the one most important component of digital or paperless mortgages is the technology called eSignature that allows the signatory to put his signatures on the document electronically without actually using a pen and paper. If the e-signature conforms to the guidelines stipulated under the National Institute of Standards and Technology-Digital Signature Standard (NIST-DSS) of the United States, it holds the same legal relevance as an actual handwritten signature. Given the highly confidential nature of a signature, the esignatures used in the paperless mortgage transactions incorporate a cryptographic mechanism that keeps them safe and secure against unauthorized access or usage. What are the benefits of paperless mortgage? While still in a comparatively nascent stage, the concept of paperless mortgage has significant upsides that have already been duly established. Here are a few of them … l Saves time: One of the most obvious and

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for the perseveration of the environment by doing away with the use of paper. Countless trees are slaughtered every year in manufacturing paper and going paperless is an environment friendly way of processing loans while conserving the Earth’s natural green cover. Given the fact that the technology has yet a long way to

go before it fully matures, experts have major security concerns associated with digitalization of mortgage processing. However, given its immense benefits

associated with greater efficiency, reduced costs and more, the eMortgage is a technology that is worth looking forward to.

Peter Pescatore is Chief Operating Officer of Jet Direct Mortgage and has seen speed, efficiency, and loan closing volume skyrocket at Jet Direct over the past number of years. In addition to key procedure, operations, and personnel improvements; Pescatore attributes a significant reason for this additional uptick in productivity to Jet Direct’s commitment to going paperless.

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compelling advantages of the paperless mortgage is that it can effectively reduce the time taken across all the various steps right from the filling out of the application to the approval, processing and the disbursal of the loan. In a trial run of the eMortgage that was carried out back in 2016 in Massachusetts, it was found that going paperless helped speed up the entire mortgage process by more than 10 days as opposed to the standard mortgage processing that may take up to 16 days. The paperless mortgages or eMortgage processing can be completed within an impressive three days! Needless to say, this would save a lot of time for all the parties involved and make taking out a mortgage a lesser cumbersome process. l Attract the Millennial generation: With a majority of the Millennial generation already reaching a mature working age, it is not a wonder that it represents the largest group of homebuyers that regularly invest in the real estate market. That being said, the lending institutions are required to adopt efficient technologies in order to appeal to this generation of the digital age. As such, the eMortgage or paperless mortgage is one of the best technologies in the industry that have the power to attract more homebuyers towards lenders that have such solutions integrated within their loan processing systems. Having spent a majority of their adulthood ordering food online and making payments through Internet banking, Millennials are bound to find the traditional mortgages both tedious and unnecessarily time taking. As such, by promising great customer service, secure processing and lightning-fast approvals, the eMortgage is more than likely to lure them into the real estate market and help proliferate the housing industry. l Going green: Another great advantage of eMortgage is the fact that it duly accounts

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Where’s My Flying Car?

t is the year 2058 and against all my advice, my son became a Mortgage Broker.

All W-2s, paystubs, bank statements and automated real estate valuation systems were long since been placed on the inter-global Web, or the “Big Yahoo” as it has been come to be known. DU automatically “touches” these systems, and when given permission by your virtual spouse, “SIRI” records your mortgage and sets up automatic payments from your “cloud wallet.” Human interaction in the mortgage industry is as quaint as the checkout girl at the grocery store before the RF system just let you walk out of the store with the items and charged your Amazon account.

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By Eric Weinstein

In the future, the Mortgage Broker is automated out of existence. In 2018, we had an inkling when the “Work Number,” IRS, Zillow, DU and the myriad of other systems worked independently. Now, with artificial intelligence, imagine them all working together in one seamless system. What a waste it was getting his Lunar, Martian and Inner Asteroid Mortgage Broker’s License! Robots the size of a toaster now can do everything faster, cheaper and better. PLUS, they make toast! But it is not just the mortgage industry that witnessed an extinction level event when the computers took over. Realtors were easily replaced with 3-D virtual tours, title companies were automated out of the search

and recording business and surveyors, don’t make me laugh. They were GPS’ed off the planet long ago after a simple Google Maps upgrade. Even the friendly Home Inspector was eventually replaced with the Honeywell home self-diagnostic unit each home now has. The ONLY business still thriving is the Pest Inspector, now with that invasive Martian wood eating microbe ravishing the planet, lately. In the old days, at least, you got to speak to your Mortgage Broker on a video chat for 15 minutes, exchanging pleasantries, knowing he was only dressed from the waist up since that was as far as the camera reached. Now, your virtual spouse does all that with other computers. It is a good thing they legalized human/computer marriage back in the’30’s. You’d be lost without her/him/it, but, don’t get me started on the old pronoun debate, again! It has been many decades since I retired and uploaded my consciousness into a sweet new PS3600 Pentium chip, but

my son is still a “Meatbag,” and I feel sorry for him. His job is now to go around oiling all the robots that do the mortgages for him. Not that they need it, I think they just want to make the remaining humans feel useful. Sure, I have everything I want in my virtual reality with my array orbiting the Sun in a geosynchronous orbit feeding the solar panels of my mainframe for eternity, but it is only natural for a father to want his son to be happy. In 2018, when I was a Mortgage Broker, I had the great pleasure of helping people buy homes and refinance. It was a good existence and served me and my family well. But even then, I could see where decades later, it was a job destine for oblivion in the not too distant future. That’s why they never featured mortgage brokers on “Star Trek,” I guess. Enjoy it while you can, but don’t try to foist your kids into the industry. Forty years goes by like the snap of a finger, assuming you still have fingers. Tell your children NOT to become Mortgage Brokers, if you love them. Oh, and don’t wait for them to invent flying cars. It never happens.

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

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Building a New Mortgage â&#x20AC;&#x2DC;Eâ&#x20AC;&#x2122;cosystem By Stanley Street

n nature, an ecosystem is a community of living organisms and their environment interacting which each other. In the world of computers, an ecosystem refers to the â&#x20AC;&#x153;communityâ&#x20AC;? of hardware, software and data that make up the collective IT environments of all the companies which communicate and share data. In either context, a healthy ecosystem is one that is stable, secure and balanced. Everything works together in a sort of harmony. You could say the mortgage industry itself is its own ecosystem, with different parties and inanimate components interacting with each other. Yet the mortgage ecosystem has been through a lot of change over the past 20 to 30 years. Modern technologies and the accelerating

pace of innovation have transformed an industry that once relied on fax machines and rooms of people to one that is now dependent on automation, cloud computing and the Internet of Thingsâ&#x20AC;&#x201D;a trend that is changing how entire civilizations live, work, shop and play. While no one can be sure exactly how these changes will play out for the mortgage industry, one thing is certain: the future is going to involve a lot less paper. But for that to happen, there needs to be a healthy industry ecosystem in place that can assure digital mortgages can survive. That ecosystem is being built right now and is very close to becoming realityâ&#x20AC;&#x201D;so close that if youâ&#x20AC;&#x2122;re not getting ready, you should consider this in your 2018 strategy planning. An ecosystem in progress What we know about digital

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mortgages is that they must work across every facet of the mortgage process, from the application stage to borrower verifications, underwriting, conditions, closing, warehouse and secondary market delivery. A mortgage isnâ&#x20AC;&#x2122;t truly digital unless all of these aspects are also â&#x20AC;&#x153;e-enabled.â&#x20AC;? That includes electronic signatures, disclosures, notarizations, closings, recordings and investor deliveries, and most importantly, eNotes. All of these â&#x20AC;&#x153;eâ&#x20AC;&#x2122;sâ&#x20AC;? are part of the eMortgage ecosystem. The problem is, they do not yet fit together in a way that enables digital mortgages on a wide scale. Like any well-balanced habitat, a few things need to happen to ensure the eMortgage ecosystem has the resilience to last. One of those things is significant technical interoperability between disparate digital systems. In other words, systems must be able to talk to each other. Unfortunately, this doesnâ&#x20AC;&#x2122;t always happen, even with technology thatâ&#x20AC;&#x2122;s been around for years. Today, the different components of the mortgage process remain largely separated. For example, the eClosing process currently stands alone. Borrowers must log in to a secure environment to sign their documents electronically. There are tools that send a secure email to verify the borrowerâ&#x20AC;&#x2122;s credentials and give them permission to perform the transaction, but there is no integration with a lenderâ&#x20AC;&#x2122;s LOS. The CEO of a large lender may look at this issue and think, â&#x20AC;&#x153;no big dealâ&#x20AC;&#x201D;weâ&#x20AC;&#x2122;ll just connect everything,â&#x20AC;? but the operations team knows itâ&#x20AC;&#x2122;s not that easy. Why vendors matter Of course, there are vendors in the digital mortgage landscape that can help with this interoperability issue. However, the industry needs scalable solutions that can support the large-scale production volumes we currently see in paper mortgage transactions. To understand why, it helps to understand eNotes and eNote

vendors, which are a critical piece to creating actual eMortgages. To conduct an electronic closing, or eClosing, lenders need a document vendor that leverages either SMARTDoc v.1 or v.3 standards to create eNotes. These standards leverage tamperproof seals and enable eNotes to be registered on the MERS eRegistry and stored securely in an eVault. The benefits of eNotes are pretty evidentâ&#x20AC;&#x201C;they eliminate the chance of paper documents getting lost, misplaced or destroyed, and are much faster to create and deliver. Because they are in a digital format, eNotes also help all counterparties achieve better data integrity and lower risk. Mortgage bankers can also turn warehouse lines faster with lending partners that purchase eNotes, which results in lower costs and higher margins. But finding an eNote vendor and training your staff to use eNotes isnâ&#x20AC;&#x2122;t that easy, at least not yet. Not all document providers support a SMARTDoc eNote in their library. Many lenders who want to switch to eNotes have trouble leaving their costly yet comfortable paperbased processes behind. Another problem is that there are more than a dozen companies that have the ability to execute and deliver an eNote with the GSEs, but they have only conducted eNote deliveries on a small scale. Lenders need a scalable solution they can trust with higher volumes of loans. Another barrier: many originators donâ&#x20AC;&#x2122;t understand how to handle eNotes. Some think they must be notarized and recorded, but thatâ&#x20AC;&#x2122;s not needed. For those of us working to create the eMortgage ecosystem, there is an effort to make the process feel as close to the paper process as possible. The more similar the steps appear, the easier eNotes will be adopted. The time to prepare is now Barriers have limited the digital mortgage experience for the consumer to primarily the signing of the application and initial disclosures. To facilitate a scalable digital mortgage, lenders, settlement agents, warehouse, investors and servicers must integrate with new technology solution providers that support eNote, eClose and eWarehouse. They will need to work together to transition current

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“Modern technologies and the accelerating pace of innovation have transformed an industry that once relied on fax machines and rooms of people to one that is now dependent on automation, cloud computing and the Internet of Things—a trend that is changing how entire civilizations live, work, shop and play.”

Stanley Street is a leader in the mortgage warehouse lending industry and a frequently cited expert on mortgage banking finance. He currently manages the strategic vision of Street Resource Group Inc., a provider of information systems and business process consulting to the financial services industry. The company’s flagship technology product, the SRG Warehouse Loan System (WLS), completely automates the entire mortgage warehousing process and improves efficiency and profits for both warehouse lenders and mortgage originators. He may be reached by e-mail at SStreet@StreetreSource.com.

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transaction provides direct benefits by reducing operational risk, improving data quality and elimination of lost notes. Similar benefits await those who make the commitment to integrate with eNote solution providers and collaborate with each other to forge this new ecosystem, which will ultimately make mortgage lending safer and more convenient for borrowers. In nature, ecosystems evolve and change when new events or factors are introduced, but one law of nature never changes– survival of the fittest. No matter what your role in the mortgage ecosystem is, your future will depend on your ability to adapt to this unique environment. What better time to start than now?

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clients, partners and vendors through a consistent fulfillment model for all mortgage transactions. Things have not yet evolved that far. As of this writing, however, there have been 343,316 eNote registrations on the MERS Registry. A total of 68 companies have access to the MERS Registry and 23 have registered at least one eNote. Also, there are eight warehouse lenders that have funded at least one eNote, which is roughly 10 percent of all warehouse lenders in the industry. That’s not a bad start. Technology provides tangible benefits to improve operational costs. For the warehouse lender, shifting from paper to a digital

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Branding Yourself:

How to Create a Great Elevator Speech

By Kerry Johnson, Ph.D.

you are successful at that answer, you may also gain a client. Here are five steps to successfully tell others what you do and generate interest: 1. Label yourself in three sentences or less. 2. Produce three benefits you deliver to your clients. 3. Tell a story using those three benefits. 4. Probe for needs. 5. Trial close. Here is a possible elevator speech using all five steps. What do you do? 1. Label yourself I am a Mortgage Broker specializing in helping my clients refinance or get a new loan in only a few days. (One of my coaching clients calls himself a “Disaster Recovery Specialist.” He helps people recover their mortgages from high interest rates and pay their loans down quicker. 2. Produce three benefits I do three things for my clients. First, I help my clients qualify for a loan in only a few days. Secondly, we get the best rates available. And finally, we make sure the loans we originate also help them build wealth.

4. Look for needs Tell me, when is the last time you took a look at your mortgage? Is the rate competitive? Does it

5. Trial close Assuming that you have uncovered some needs … if we could help you lower your interest rate and build equity faster, would that be a benefit? If they say “yes,” book an appointment. My elevator speech I am a best-selling author and speaker. I have written nine books, including three bestsellers entitled Mastering the Game, Peak Performance: How to Increase Your Business by 80 Percent in Eight Weeks and my newest book, New Mindset, New Results. I also have an executive coaching company that guarantees an 80 percent increase in business in eight weeks through one on one coaching. In fact one of my clients, a Mortgage Broker from Omaha, Neb. recently increased his business from $200,000 to $1.2 million in just one year. We put together a business plan, helped him increase his ability to gain referrals and dramatically increased his closing rate. Tell me, how much has your business increased over the last 12 months? If we could get an 80 percent increase this year, would that help? Can we meet next week for an hour and talk about how you can increase your business this year? An elevator speech will build confidence and book appointments from networking, and drive more referrals to you. If your elevator speech doesn’t cause people to say “Wow, I need that,” you’re not doing it right.

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

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3. Tell a story One of my recent clients came to me bleeding money fast. She was a new grandmother and terrified at the prospect of being unable to travel and see her kids and grandkids at least every three months. She was in a high interest loan that she was struggling with. We got her a new loan with lower payments that she can afford. She now is traveling and sees her grandkids whenever she wants.

allow you to build equity as fast as you want? Research has shown if you can uncover one need, there is a 35 percent chance of booking an appointment. Two needs, 56 percent and three or more needs, you have more than a 90 percent chance of booking an appointment from an elevator speech.

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an you tell a stranger what you do within 30 seconds in a concise, succinct and interesting way? Are you able to differentiate yourself from all of your competitors in only a few sentences? When you meet someone new, do they hear what you do and say “Wow!” Does your Web site, brochures and business cards draw interest and attention to you? If not, you need a great elevator speech. An elevator speech is a verbal and possibly a written calling card lasting only the length of time it takes to ride an elevator to the top of an average building. Usually about 30 seconds. A good elevator speech will help your prospects and clients define who you are and what you do. It will help develop referrals because your clients will tell their friends exactly why you are better than anyone else. If you don’t first define yourself, they will do it for you. It is tempting to be a generalist and be everything to everybody. But the result usually is appearing inadequate to them all. It is the job of your prospect to make you into a commodity. That way, they can cheapen and drive down your value and price. For example, “You should go see my Mortgage Broker. He is really good. Why? I don’t know, I just like him.” That doesn’t give them any reason to change from their provider to yours. But if you say, “My broker is the best in the city. He can work to get you prequalified in only 1 day.” Now that is a reason to book an appointment. It’s your job to appear as an expert and first gain their interest and later their wallet. A good elevator speech explains what you do in the time it takes an elevator to reach the 10th floor. Someone asks what you do for a living. You have 30 seconds to not only grab their attention, but also gain their interest. This isn’t easy. But it is de-rigueur if you want to become even more successful. You must be able to tell others what you do in a way that makes them want to do it with you. Recently after a tennis match, one of my buddies, “Hollywood,” was asked by a club member what he did for a living. Hollywood said he was a Mortgage Broker and went back to his beer. He completely lost any opportunity to gain a client. Anyone who asks what you do or asks you to explain something related is asking your advice. If

Stop

p Working BY BRIAN KENT

hen I’m out of town, or better yet, out of the country, I come up with my best ideas. I’m away from my computer, away from my phone, away from people (no offense to people), but when it is just me and my thoughts, I come back with perspective on the business. I come back refreshed and ready to work. We all need to get away and get our minds OFF the business so when we’re back, we can be fully ON and engaged. I know it’s easier said than done to break away for a week or two. Only originators with a big staff to handle things in our absence can do this. The oneman or one-woman shop cannot do this as they need to be around to handle fires that may crop up. So … the cycle continues. The originators with a staff that can afford to break away, get refreshed, get re-motivated and their business get stronger. The originators without a staff cannot afford to take a vacation. They do not get refreshed, they get worn down and their business gets weaker. This is a similar concept as to why the rich get richer. Which is why the first order of business for 2018 is to find a competent, organized, proactive, smart individual who is your right hand-person. Don’t get me wrong. I’m not saying it’s easy to find the right person, but it is possible. Only then will your life change and will your business get better. If you do just one thing in 2018, it should be to find the best possible assistant available—someone who can help with paperwork, marketing and the other day-to-day stuff

that eats up the minutes and hours of your day. Most ignore this advice, not because they don’t want to do it. Most would love to, but most do NOT for the following five reasons. 1. They don’t know where to look for an assistant like this. 2. They don’t know how to interview to find the right person. 3. They don’t think they can afford an assistant. 4. They don’t know how to train an assistant. 5. They only have a home office and some assistants may not be comfortable with that. So let’s look at each of those issues and try to deal with them. Where to look? There are tons of places to look. Here are a few strategies to try: Start by asking others in the industry, including escrow agents, lenders, account executives, vendors, processors, etc. if they know anyone who is excellent who may have simply found themselves out of a job after their company closed or had a big layoff. Or someone who simply may have taken a few years off after taking a sabbatical or having kids, but are now interested in getting active again in the business, perhaps just on a part-time basis. E-mail clients if they are aware of anyone who might be a good fit. You can give it a positive spin and get some PR out of it: “Our office is expanding and we’re looking to bring on an assistant. We are looking for someone ultraorganized. OCD is ok! Must type

40 words per minute. Familiarity with Calyx a plus, but not required.” Post the position … l On a military base (if you live near one). There are many great spouses of our soldiers who look for part or full-time work and they understand order, chain of command, etc. l In your company’s monthly newsletter. l In your local mortgage broker/bank association Web site (if they have a job board). l On your Facebook Page or any other social media outlet you use. l In your local newspaper. l On job recruiting sites. You might consider some more out-of-the-box ideas listed below. l Approach a community college professor in your area and ask they have any “all-star” students who may simply be looking for some part-time work or full-time work. l Ask if others in your neighborhood who may be looking for work. This can be done easily using sites like NextDoor.com (assuming you have that set up in your neighborhood). l Consider a ‘remote’ type assistants that can be found through sites like UpWork.com. Of course, using a remote assistant is specialized only for certain tasks, but can work extremely well for things like layout/design, article writing, hand-written thank you notes, etc. Interview You can try using the DISC profile screening or other screening methods. If you’re not great at figuring out if someone

is actually good or not, you can look around for someone with HR experience–there are a lot of HR consultants who will take on this type of work or UpWork.com might be good for finding an HR person to handle everything (search the keywords: HR consultant, recruiting consultant, talent acquisition). Then, they give you a scrubbed list of the final candidates. Or, you can try a temp agency. Sure, it’s going to be a bit more expensive, but if the temp agency is good, they handle all the initial screening for you and find someone worthy. You say I want someone who is a problem-solver, pro-active, can type 40 words per minute, are good with computers, and can work 20 hours per week, and that’s what they’ll send your way. You’ll know within a few days if it’s going to work out. They say “Hire slow and fire quick.” There is a lot of truth to that. Do not keep a subpar person around for more than a week. It will backfire and drag down your entire business. Affordability We all know that initially, yes, it will be a hit to the pocketbook, but over the long term, as the person gets trained up and understands their duties and systems, it will of course free you up to do other things like prospecting, meeting real estate agents, attending caravans, working on marketing campaigns, etc. But keep in mind, it may take two or three shots to find the right person. Stay the course. In terms of compensation, most will pay an assistant an hourly rate, plus some sort of performance bonus or a bonus based on the number of closings. An unlicensed assistant cannot continued on page 78

MBA’s Mortgage Action Alliance A Message From MAA Chairman Gene M. Lugat his April, hundreds of members from the Mortgage Bankers Association from across the country will come to Washington, D.C. for the MBA’s National Advocacy Conference (NAC). It’s an annual tradition that enables MBA members to speak directly to their elected officials as advocates for our industry–and their own businesses and customers. With midterm elections approaching, there is no better time to come to NAC and make your voice heard. MBA effectively represents the housing finance industry, but nobody can illustrate how policy changes can impact local businesses across the country–for better or worse–like actual practitioners. NAC attendees add a name, face and personal story to the challenges we often face in best serving our customers, which helps make these complex and highly technical issues relatable for policymakers.

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MBA is pleased to announce that Senate Banking Committee Chairman Mike Crapo (R-ID) will be addressing NAC attendees this year. Chairman Crapo will discuss the Senate Banking Committee’s 2018 legislative priorities such as housing finance reform and regulatory relief. Additional details regarding other speakers will be announced as they are confirmed. To register for the NAC, please visit MBA.org/NAC18. Even if you cannot make it to NAC, there are easy ways for you and your company to get involved with the Mortgage Action Alliance (MAA) and advocate for our industry year round. Last year, we launched our MAA mobile app. You can download the app at MBA.org/MAAapp, or search the App Store or Google Play for “Mortgage Action Alliance.” The app allows users to join MAA, take action, contact their elected officials, learn about MORPAC (MBA’s Political Action Committee), and track bills that MBA’s legislative staff are monitoring, offering a one-stop-shop for all of MBA’s advocacy programs on your Apple or Android devices. MBA staff has also produced a MAA campaign toolkit, which has all the tools that you need to run a free MAA enrollment campaign at your company or within your professional network. We have also produced an animated advocacy video, which outlines MBA’s advocacy programs and the importance of getting involved that you can share with your colleagues in your promotional efforts internally or on social media. I hope to see many of you here in Washington, D.C. at NAC, Tuesday-Wednesday, April 24-25. The larger the group, the louder the voice and greater the impact we can have for our industry and on behalf of our customers. Gene M. Lugat is chairman of the Mortgage Bankers Association’s Mortgage Action Alliance. Gene is executive vice president, national industry and political relations for PrimeLending Inc.

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receive a portion of the loan commissions, of course, but you could develop a bonus system that is based on profitability of your office, which is not directly related to commissions. Additionally, at the beginning, you might consider sharing an assistant with another originator. They work for you in the morning, and the other originator in the afternoon perhaps. Training Training an assistant is harder than it looks. They key, of course, is they need to have a very clear list of duties, deadlines, job aides (a job aid is basically a video on the computer showing them how to do a certain task). Hiring an assistant without those things in place is futile. The assistant will get frustrated and leave. Even worse, they’ll become frustrated and stay, and create a toxic environment in your office complaining about how things are disorganized. The majority of your time preparing to hire an assistant should be spent putting together job duties and job-aides. Dealing with employees and payroll First, it must be determined if the assistant should be paid 1099 or W-2. If you ‘misclassify’ an employee as 1099 when they should have been W-2, it can cause a lot of issues, fines, etc. If the person is in your office, under your direction, only works for you, etc., it’s definitely W-2 status. If the person woks remotely, works when they want, uses their own equipment and has clients other than you, they are probably classified as a 1099. Ultimately, check with a labor law attorney if there are any doubts. You can Google “IRS Test W-2 vs. 1099” and read some articles to get some more sense of this topic. Clearly, 1099 is easier from an administrative standpoint. They invoice you for the work they have done and you basically just cut a check from your business checking account to them. But even if it is a W-2 situation, setting up payroll isn’t too hard. You can easily set up payroll for

an employee using online systems with ADP, PAYCHEX, etc. They can help with all the withholding issues and generate the W-4 at the end of the year. They can also help you with a contract that can be used with the employee. Most employee contracts are pretty standard. You could also purchase one from a service like LegalZoom.com. There are lots of laws and regulations that surround W-2 employees. They must have 10minute breaks every few hours, and a required 30-minute lunch, etc. Before they are fired, they generally should be given two written warnings. As long as you follow the basics, you should be fine. Home office If you have a home office, it definitely makes hiring an assistant harder. It’s not impossible, but it can be a little bit awkward or uncomfortable for someone to show up at your home to be your assistant. If that is the case, consider looking into inexpensive office space as sub-lease somewhere. Some real estate offices might consider leasing an office and a cubicle to you on a temporary basis, just so you can take a “test drive.” It is completely legal to rent office space from a Realtor, but you’ll need to pay “market rent” and register that location as a branch. What you cannot do, of course, is pay a referral fee to the Realtor for sending you business. Ask around your company to see if any other branches have commercial space that you may be able to sub-lease or share with you.. Or you can look into an executive suite, but that can be pricier. Another idea is to simply drive around a commercial office area in which you’re interested in renting a small office, get the landlord’s contact information and reach out directly to the landlord. Warning: If you’re not accustomed to reviewing commercial leases, ask your company if they will review the lease for you. We do that for our originators.

Brian Kent is General Manager of C2 Financial Corporation, an award-winning Mortgage Broker/Banker with 400 originators strong, based in in San Diego.

heard on the street

delivery team and responsible for continuous improvement to the company’s digital lending platform. l Movement Mortgage has hired former KPMG executive Stephen Polacek as its new Chief Credit Officer. Polacek joins Movement to lead the financial services firm’s credit risk management strategy and operations.

l Mortgage Network Inc. has announced that its Waltham, Mass. branch has hired Loan Officers Jay Hughes, Ron Gardiner, Steve Mix and Erin Sadlier—bringing the office’s total staff to 13. l Fairway Wholesale Lending, a division of Fairway Independent Mortgage Corporation, has named Kelly Scovanner as Regional Vice President of Sales for the Northeast Region. Your turn National Mortgage Professional

Magazine invites its readers to submit any information, events, passages, promotions, personal or professional occurrences that seem appropriate and/or other pertinent data to the attention of: Heard on the Street/Mortgage Professionals to Watch column Phone #: (516) 409-5555 E-mail: Newsroom@MortgageNewsNetwork.com

Note: Submissions sent via email are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

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Chairman of the Board. l IndiSoft has appointed Frank Pallotta to its Advisory Board. Pallotta brings a wealth of experience in capital markets and is an established leader in the mortgage industry. IndiSoft has also appointed Kenneth M. Goins Jr. as the company’s Chief Financial Officer. Goins, working closely with IndiSoft’s CEO Sanjeev Dahiwadkar, will focus on accelerating growth, operational excellence and financial performance based on defined business goals and metrics to measure success. l GSF Mortgage Corporation has announced the addition of Jennifer Pate as a Loan Officer in the company’s Louisville, Ky. branch. l Home Point Financial Corporation has announced that it has named Richard Bradfield Enterprise Chief Financial Officer (ECFO) and Bill Shuler as Chief Information Officer (CIO). Both will report directly to Willie Newman, Home Point Financial President and CEO. l Embrace Home Loans has announced that Kurt Noyce would head the company’s expanded Financial Institution Services Division. Noyce has served as President of Embrace Home Loans for the last 18 years. l WFG National Title Insurance Company, a Williston Financial Group company, has expanded its national commercial division, and has appointed industry veteran Erin Sheckler to drive the effort as Senior Vice President of the National Commercial Services Division. l Derek DeLange has joined Grand Rapids, Mich.-based Northpointe Bank’s growing team as Vice President of Loan Systems. l LenderSelect Mortgage Group has announced that Kaci Freeman has joined the company as an Account Executive for the Carolinas and surrounding markets. l Roostify has announced that Adnan Habib has joined the company as Vice President of Engineering, leading Roostify’s growing product

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The Insight and Knowledge Mortgage Professionals Need to Succeed in 2018 By Greg Holmes

A 2018 Trend You Cannot Afford to Ignore:

Customer Experience BY BUBBA MILLS

Think of the old saying “under promise and over deliver” and then stir in lots of steroids. The

l Over the past 18 months, 64 percent of marketing execs said their company had sharpened their focus on customer experiences because of changing customer expectations. l About 65 percent of consumers said they’d switch vendors if a seller didn’t personalize customer experiences. l A whopping 89 percent of consumers say they want companies to better understand their needs and expectations. What these statistics say to me is this: Mortgage brokers need to get serious about making their customers’

experiences more than memorable–they need to make their experiences astounding. So, how do you make their experiences astounding? Here are some tips: Be proactive, not reactive Up until now, the world of customer satisfaction has been about reacting to problems customers had. But today, in the new “customer experience” economy, it’s about preventing problems by ensuring the experience is not only problemfree, but also, as I mentioned earlier, astounding. To do that, carefully map out the journey customers have with you, from the first time you meet them and then at every contact point afterwards. This will help you think ahead to prevent problems. Keep the focus on the customer at all times I know, the mortgage industry is crazy and things pop up all the time and it’s easy to get distracted and lose focus on the customer. But remember, it’s ultimately the customer who pays the bills. Keep a reminder

on your desk, on your phone, in your car—something as simple as a post-it note with “The customer is always number one.” Or, before you do anything, ask yourself this question: “How will this help my customer?” When you take care of the customer, other problems take care of themselves. Do a weekly research on “above and beyond” service The beauty of living in the information age is, well, there’s a lot of information out there. So take a little time each week to find some examples of how other Mortgage Brokers (and other businesses) are taking customer experiences to the next level and then up your game with what you find. Let me hear from you. How are you creating great experiences for your customers? Is there room for improvement? Do you think your business would improve if you were able to make the experiences better for your customers? E-mail me at Article@CorcoranCoaching.com to discuss further.

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

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l Customers are the absolute number one priority at every turn. l The company consistently delivers above-and-beyond all customer expectations—even if it takes more time or money to do it. l Customers have an amazing experience when they engage with the company.

end goal is this: Make the customer experience so good that they will stick with the company until they die. Businesses–the good ones at least–know it’s much smarter to do what’s necessary to keep a customer than to attempt to win back a customer who’s left. This customer experience trend is real–backed by research. Salesforce.com, a sales software company, surveyed 3,500 companies for its recent fourth annual state of marketing report and says nearly two-thirds are adopting customer experience efforts. Other revelations from Salesforce’s research:

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etting a customer in the mortgage industry today can be as tough as a $3 steak. But keeping the customer can be tougher than a $1 steak. Competition has crept in from every corner and the market grows more and more crowded every day. What’s more, customer expectations are always on the rise. They want more, better, faster–all the time. It’s a fact not lost on businesses of all types. And some forward-thinking and super innovative companies (Zipcar, Dun & Bradstreet, and Visa are among them) are already ahead of the curve by going beyond customer service and creating “customer success” departments. In essence, the job of these departments is to ensure:

How Lenders Can Create an Efficient Commissions Calculations and Payments Process That Keeps Loan Officers Happy BY BRIAN D. LYNCH

any lenders lack an efficient way to calculate and deliver commissions to their Loan Officers and this issue has the potential to disrupt lender profitability. Loan Officers’ success or failure can make or break a lender’s branch. These people are the stars of the mortgage industry and they know it. Good Loan Officers can go to another lender if they are dissatisfied. To the Loan Officer, lenders and the jobs they offer are commodities and the compensation process is one of the few ways lenders differentiate themselves. Knowing the specifics of what matters most to Loan Officers in regards to compensation is the first step in providing them with the motivation to be productive, happy and successful at a particular branch. The most common complaints from Loan Officers deal with the speed and accuracy of commissions payments. The most common cause of these issues is that the tools being used to calculate those commissions were not designed to do this. In fact, these tools often only perform a portion of the task leaving much of the work to be done manually. The people doing that work are often under stressful deadlines, which only add to the problem. All too often, we see spreadsheets being used to perform these calculations. One major issue here is that many Loan Officers have customized compensation agreements with their employers. Using a spreadsheet to calculate these commissions often involves manual entry that makes the task tedious and time consuming. Even worse, any increase in the number of loans funded or Loan Officers only serves to

complicate the process thereby jeopardizing the very accuracy and speed needed. Spreadsheets are a fantastic tool, but they do not provide the systematic approach needed within a large or growing organization to keep Loan Officers happy. If the calculation of commission on each loan by a Loan Officer were not enough, it is only one part of the commission calculation process. Payroll draws, split commissions and overrides add to the complexity and further invalid the efficacy of using spreadsheets. To many lenders the task of calculating commissions is so time consuming that they only do it once a month. This can put the lenders relationship with the Loan Officer in jeopardy especially when other lenders with the proper systems can offer more frequent pay periods. Most Loan Officers expect to be paid the correct payment in approximately a week or less, but most lenders often take several weeks to do so. This erodes the relationship between lenders and Loan Officers, especially if payments need to be reissued to fix mistakes. Loan Officers do not consider these errors to be an acceptable cost of doing business. Instead they see them as warning signs a lender is actively choosing to tolerate mistakes and long delays despite the fact there are other options. The speed of the calculation is not enough. It has to be correct as well. Incorrect commission checks burn a lender’s reputation, encourages Loan Officers to doubt their employer and forces them to devote even more time to double-checking their commissions. These internal headaches waste Loan Officers’ time and distract them from the core business of serving customers and closing more loans. Lenders can fix these problems

by focusing on cost-effectively enhancing the speed, accuracy and reporting of commission amounts earned. This can be done by automating the calculation and distribution of commission data to Loan Officers. Automating the commission process makes it possible for a lender to calculate commissions in minutes rather than weeks. Providing accurate and timely commission data to loan officers helps build the bond between the lender and the Loan Officer. Moving from a spreadsheetdriven system to an automated approach is often met with some concern about the effort needed to implement such a system. This is mainly due to the fact the people being asked to implement the new system are already working overtime with the existing system. Usually, the system that best addresses a lender’s compensation plans will be the easiest to implement and because it addresses a particular lender’s compensation plans, the calculations will be more thoroughly tested and as a result should be quicker and more accurate than other systems that might be available. After implementing the proper system, things like calculating payroll draws and split commissions, normally errorprone, manual processes should no longer be an issue. The same goes for lenders dealing with suddenly higher loan volumes that put pressure on accounting departments. With the automated approach, the level of performance is maintained and the lender is not forced to add

new staff. One of the more practical ways automation can reduce the workload on lenders’ staffs is that they often have specialized reporting tools that spell out how commissions were calculated so Loan Officers and even auditors can easily understand at a glance. Often in these cases if a loan officer has an issue with a calculation, he or she can easily figure what the issue is on their own. In many cases the issues turn out to be a miscalculation on the loan officer’s part that does not in any way damage the lender’s reputation for making inaccurate payments. As an added benefit, having a systematic approach to calculating commissions can have a dramatic effect on the time needed to audit those calculations and the lender’s compliance with Dodd-Frank. The savings in audit fees can be significant. Under the old spreadsheet approach, audit satisfaction was only gained after analyzing large numbers of spreadsheets. Loan Officers judge their employers by how fast and accurately commissions are paid to them. When there are issues with the accuracy, speed of payments and the clarity of the calculation, loan officers can judge very harshly and seek out other opportunities. The commission calculation and payment process can be dramatically and cost-effectively transformed through automated solutions that not only speed up the calculation but also provide a much higher degree of accuracy and happier Loan Officers!

Brian D. Lynch is President and Founder of Irvine, Calif.based Advantage Systems, a provider of accounting and financial management tools for the mortgage industry, responsible for managing the company’s day-to-day operations, and guiding the company’s strategic direction. For more information, visit MortgageAccounting.com.

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NATIONAL MORTGAGE PROFESSIONAL MAGAZINE’S

calendar of events

MARCH 2018 Sunday-Wednesday, March 4-7 Mortgage Bankers Association 2018 Mid-Winter Housing Finance Conference The Ritz-Carlton, Bachelor Gulch 130 Daybreak Ridge Road Avon, Colo. For more information, visit MBA.org. Thursday, March 8 FAMP Broward Chapter 2018 Trade Show Bonaventure Hotel & Conference Center 250 Racquet Club Road Weston, Fla. For more information, visit BrowardFAMP.org.

Thursday-Sunday, April 12-15 CONNECT 2018 Westin Buckhead Atlanta 3391 Peachtree Road Atlanta For more information, Visit CONNECT2018.org.

Monday-Tuesday, April 23-24 Mortgage Bankers Association 2018 State and Local Workshop Capital Hilton 1001 16th Street NW Washington, D.C. For more information, visit MBA.org. Tuesday-Wednesday, April 24-25 Mortgage Bankers Association National Advocacy Conference 2018 Capital Hilton 1001 16th Street NW Washington, D.C. For more information, visit MBA.org.

April 29-May 2 Mortgage Bankers Association Legal APRIL 2018 Issues & Regulatory Compliance Wednesday-Friday, April 4-6 Conference 2018 NAPMW 2018 Annual Conference JW Marriott Los Angeles L.A. Live Harrah’s Las Vegas 900 West Olympic Boulevard 3475 South Las Vegas Boulevard Los Angeles Las Vegas For more information, For more information, visit NAPMW.org. visit MBA.org.

Monday-Tuesday, May 21-22 NRMLA 2018 Eastern Regional Meeting Intercontinental New York Times Square 300 West 44th Street New York City, N.Y. For more information, visit nrmlaonline.org.

MAY 2018 Thursday-Sunday, May 3-6 MBAG’s 2018 Annual Convention Hilton Sandestin Beach Golf Resort & Spa 4000 South Sandestin Boulevard Destin, Fla. For more information, visit MBAG.org.

JULY 2018 Monday-Tuesday, July 30-31 Summer CAMP 2018: Destination Coronado! Coronado Island Marriott Resort & Spa 2000 Second Street Coronado, Calif. For more information, visit TheCAMPSite.org.

Thursday, May 10 Maryland Mortgage Bankers and Brokers Association Annual Conference 2018 Loews Annapolis Hotel 126 West Street Annapolis, Md. For more information, visit MMBBA.org. Thursday, May 17 NYAMB’s 30th Annual Wholesale Conference & Trade Show The Woman’s Club of White Plains 305 Ridgeway White Plains, N.Y. For more information, visit NYAMB.org. Sunday-Wednesday, May 20-23 Mortgage Bankers Association Commercial/Multifamily Servicing & Technology Conference 2018 InterContinental Miami 100 Chopin Plaza Miami For more information, visit MBA.org. Mortgage Bankers Association National Secondary Market Conference & Expo 2018 New York Marriott Marquis 1535 Broadway New York, N.Y. For more information, visit MBA.org.

AUGUST 2018 Wednesday-Saturday, August 15-18 Florida Association of Mortgage Professionals 2018 Annual Convention & Trade Show Walt Disney World Dolphin 1500 Epcot Resorts Boulevard Lake Buena Vista, Fla. For more information, visit MyFAMP.org. OCTOBER 2018 Sunday-Wednesday, October 14-17 Mortgage Bankers Association 2018 Annual Conference & Trade Show Walter E. Washington Convention Center 801 Mt. Vernon Place NW Washington, D.C. For more information, visit MBA.org. DECEMBER 2018 Saturday-Monday, December 8-10 NAMB National 2018 Caesars Palace 3570 South Las Vegas Boulevard Las Vegas For more information, visit NAMB.org.

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

n National Mortgage Professional Magazine n FEBRUARY 2018

Sunday-Thursday, March 25-29 35th Annual Regional Conference of Mortgage Bankers Associations Harrah’s Resort & Convention Center 777 Harrah’s Boulevard Atlantic City, N.J. For more information, visit MBANJ.com.

Monday-Wednesday, April 30-May 2 American Mortgage Conference 2018 Pinehurst Resort 80 Carolina Vista Drive Pinehurst, N.C. For more information, visit NCBankers.org.

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Sunday-Wednesday, April 15-18 Mortgage Bankers Association 2018 National Technology Conference in Mortgage Banking Conference & Expo Detroit Marriott at the Renaissance Center 400 Renaissance Drive, Renaissance Center Detroit For more information, visit MBA.org.

Monday-Tuesday, March 19-20 NRMLA 2018 Western Regional Meeting Paséa Hotel & Spa 21080 Pacific Coast Highway Huntington Beach, Calif. For more information, visit NRMLAOnline.org.

Tuesday, March 27 2018 Iowa Mortgage Association Spring Conference Cedar Rapids Marriott Hotel 1200 Collins Road NE Cedar Rapids, Iowa For more information, visit IowaMA.org.

Thursday, April 12 27th Annual Rocky Mountain Mortgage Lenders Expo Sports Authority Field at Mile High 1701 Bryant Street Denver For more information, visit CMLA.com.

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

Selected Mortgage Loan Originators may be entitled to receive: l Recognition in National Mortgage Professional Magazine l Participation in award ceremony at NAMMBA Connect Conference l Video interview on Mortgage News Network Nominees must represent minorities or be women who originate loans with an active NMLS number. Production by units or total loan volume (dollar amount) must be verified by letter by a sales manager or other responsible party. Submission will be reviewed and due diligence will be conducted on a percentage of all submissions. Inaccurate data provided will result in a company ban.

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