National Mortgage Professional Magazine January 2017 by ambizmedia

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table of

N A T I O N A L

National Mortgage Professional Magazine Presents ... 2017 State of the Industry Roundtable Discussion

J A N U A R Y

51 National Mortgage Professional Magazine Presents Top Mortgage Employers

2 0 1 7

M O R T G

V O L

A SPECIAL FOCUS ON “MORTGAGE INDUSTRY EMPLOYMENT”

I E

A Strong Culture Breeds Success By Chad Gomoll........................ 67

T G

How to Foster Diverse Talent Acquisition By L. Maria Zywiciel...... 69 Giving Back, to Ourselves and Others By Kerry Wekelo Elam........ 70

Employees Are Such Children By Eric Weinstein............................ 72

O t

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

The Elite Performer: New Year’s Revolution By Andy W. Harris, CRMS.................................................................... 8

N N

Recruiting, Training and Mentoring Corner: Want to be

64 NMP’s Mortgage Professional of the Month: Adam Thorpe, President and COO, Castle & Cooke Mortgage LLC By Phil Hall

U M

America’s Top Mortgage Employer? By Dave Hershman................ 10 3 Points With Mat Ishbia.................................................................. 16

NAMB in “The Big Peach!” By Valerie Saunders.............................. 18

NAMB Perspective: January 2017.................................................... 20

S o

How to Guarantee Your Success for the Year!.............................. 24 Production Incentives: Protecting the Consumer By Jonathan Foxx.............................................................................. 26

Compliance Checklist for Production Incentives............................32

N N H O N N

Lykken on Leadership: Eight Rules for Hiring and Developing Your People By David Lykken.......................................................... 46 TRID, the Election and What You Can Do Now: Part II By Richard Horn................................................................................ 48 Growth Comes After You Backfill Attrition By Steve Rennie.......... 50

82 Title Agent 2017: The Industry Continues to Change By Timothy Moreland

96 How Every Originator Can Have a Terrible 2017 By Brian Sacks

V I S I T Company

Web Site

O U R

A D Page

Agility Resources Group...................................... www.agilityresourcesgroup.com ......................................95 Angel Oak Mortgage Solutions............................ www.angeloakms.com .............................. 68 & Back Cover Brokers Compliance Group.................................. www.brokerscompliancegroup.com ................................ 104 Caliber Home Loans.............................................. www.caliberwholesale.com .............................................. 31 CallFurst.com...................................................... www.callfurst.com ............................................................84 CAMP.................................................................. www.thecampsite.org ...................................................... 34 Carrington Mortgage Services, LLC...................... www.carringtonwholesale.com ................................ 7 & 30 Citadel Servicing Corporation.............................. www.citadelservicing.com .............................................. 49 Document Systems, Inc./DocMagic...................... www.docmagic.com ...................................................... 11 First Guaranty Mortgage Corp. ............................ www.fgmccorrespondent.com .......... Inside Front Cover & 28 Flagstar Bank.................................................... www.flagstar.com/ae .................................................... 41 Freddie Mac...................................................... www.freddiemac.com/loanofficers ....................................5 Freedom Mortgage Corporation.......................... www.freedomwholesale.com .......................................... 35 Geneva Financial, LLC........................................ www.genevafl.com ........................................................ 57 HomeBridge Wholesale...................................... www.homebridgewholesale.com .................................... 55 Integrity Mortgage Group.................................... www.integritymtgs.com ..................................................43 Lykken On Lending............................................ www.lykkenonlending.com ............................................ 30 MBA-NJ/NJAMB.................................................. www.mbanj.com .......................................................... 87 MBS Highway.................................................... www.mbshighway.com/MNN .......................................... 99 Moneyhouse U.S............................................... www.mhodportal.com ....................................................72

T T T

of contents

R T G A G E

O L U M E

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

N U M B E R

Industry Poll Reflects Hope for a Strong Economy and Real Estate Market Under a Trump Administration By Andrew Liput.... 56

Compliance Matters: Multiple Advertisements By Jonathan Foxx..58 The Mortgage Godfather: Nine Specific Steps of the Ultimate Guide for Success in Sales and in Life By Ralph LoVuolo Sr......... 60 The Long & Short: The Business of Short Sales By Pam Marron....62 Operation VA SITREP: Your VA Situation Report ... VA Continues to Hit Home Runs! By Richard M. Bettencourt Jr., CRMS, CMHS.... 74 The Effect of Credit Bids on Repurchase Demands By David E. Harris.............................................................................. 80 Partnering With Top Producing Realtors By Bubba Mills................ 86 NMP Rings in the Holiday Season With Its Annual Holiday Networking Parties.......................................................................... 88 Upfront Fee Disclosures: Still a Major Pain Point in the Mortgage Process By Jim Paolino.................................................... 90 NCRAâ&#x20AC;&#x2122;s 24th Annual Conference Review By Terry W. Clemans...... 92 OrigiNation: Predictions for 2017 By Andy W. Harris, CRMS.......... 94 Secure Insight Surveys Settlement Agents and Lenders on the Trump Administration.......................................................... 98

COLUMNS New to Market..........................................................................................12 News Flash: January 2017 .................................................................... 14 Heard on the Street................................................................................ 42 Outstanding Places to Work................................................................ 100 NMP Calendar of Events...................................................................... 101 NMP Resource Registry........................................................................ 102

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

Web Site

Page

Mortgage News Network (MNN).......................... www.mortgagenewsnetwork.com ............................ 78 & 79 NAMB+............................................................ www.nambplus.com ...................................................... 25 NAMB Delegate Council...................................... www.namb.org ..............................................................21 NAMB East........................................................ www.nambeast.com ...................................................... 19 NAMB PAC........................................................ www.namb.org ..............................................................23 NAPMW............................................................ www.napmw.org ....................................................28 & 76 NAWRB............................................................ www.nawrb.com ............................................................97 New York Community Bancorp. Inc..................... www.nycbmortgage.com ................................................ 17 NMP U.............................................................. www.nmpucoaching.com .................................. 29, 47 & 75 NRMLA.............................................................. www.nrmlaonline.org .................................................... 70 OSI Express........................................................ www.osiexpress.com/mlsconnect ...................................... 9 Paramount Residential Mortgage Group, Inc....... www.prmg.net .......................... 15, 77 & Inside Back Cover Primary Residential Mortgage Inc....................... www.primaryresidentialmortgage.com ..............................1 REMN Wholesale................................................ www.remnwholesale.com .............................................. 13 Ridgewood Savings Bank.................................... www.ridgewoodbank.com .............................................. 71 Secure Insight.................................................... www.secureinsight.com ..................................................85 TagQuest.......................................................... www.tagquest.com ........................................................ 63 The Bond Exchange............................................ www.thebondexchange.com .......................................... 73 The Mortgage Collaborative................................ www.mortgagecollaborative.com .................................... 59

JANUARY 2017 Volume 9 • Number 1

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

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

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

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

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ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact VP-Sales & Marketing Beverly Bolnick at (516) 409-5555, ext. 316 or e-mail beverlyb@mortgagenewsnetwork.com.

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

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

FROM THE

publisher’s desk

The state of mortgage industry employment want to start this first issue of 2017 by wishing each and every one of your a very happy and healthy New Year. All of us here at National Mortgage Professional Magazine and Mortgage News Network send our very best wishes for your success in the year ahead. If our conversations at last month’s three Holiday Networking Parties are any indication, we’re going to see a lot of growth and success in 2017. If you missed our Holiday Networking Parties in December, you should definitely plan on attending one next year. Last month, we hosted parties in Irvine, Calif.; Ft. Lauderdale, Fla.; and Long Island, N.Y. What a wonderful time and a great opportunity to network and build new business! See the companies that participated inside this issue on page 88 As for growing your company, that’s our special focus for this month’s edition. We’re going to cover this important topic from a number of angles. First, we’ll look at the current state of our industry in the feature “2017 State of the Industry Roundtable Discussion” on page 36. To get a good picture of what we should expect in the year ahead, we assembled a group of the industry’s forward-thinking C-level executives, heads of trade associations and those on the frontlines for a roundtable discussion on how they plan to face 2017 and beyond. Great insight! The companies that grow next year will be the firms best able to compete for top talent. Being the kind of company top performers want to be associated with will be so important in 2017. To find out more about what these kinds of companies look like, check out our Special Feature, “America’s Top Mortgage Employers” on page 51. These are the leaders to watch in the coming year. As younger professionals enter the market, companies here are going to have to pay more attention to the way they give back to the communities that host them. In study after study, we have seen that younger Americans want to be part of companies that are good corporate neighbors. To find out what that looks like in the real world, we called upon Kerry Wekelo Elam, managing director of operations and human resources for Actualize Consulting. In her article, “Giving Back, to Ourselves and Others” on page 70, she writes about an innovative program her company launched last year to focus on giving back. Chad Gomoll, senior vice president of Business Development at Inlanta Mortgage, writes about the importance of company culture when it comes to growing your business beginning on page 67. As Chad puts it, “When it comes to recruiting, your company culture is your brand. It is a representation of who you are, why you’re in business, the kind of people who work for you, and why they love to work for you.” Well said! Finally, to help you set your sights on the type of talent you’ll need to be recruiting this

year, we bring you our Mortgage Professional of the Month, Adam Thorpe, president and chief operating officer for Castle & Cooke Mortgage LLC. Find out about Adam and what makes him a model for the kind of professional we all want to have more of in this month’s feature beginning on page 64. But that’s just the beginning of what we have for you this month. As always, you’ll find all of the columns you count on every month to help you build your businesses. We have brought you a great lineup of experts in this issue to help you get your year started off on the right track. Trade association news and stories that broke over the past 30 days are also inside as well. We hope you find this first issue of 2017 as exciting to read as it was to put together. We know it will give you some tools that will contribute to your growth this year. To your success! Sincerely,

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

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n National Mortgage Professional Magazine n JANUARY 2017

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

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

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

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

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

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

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

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

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

D I R E C T O R S

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

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

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

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

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

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

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

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

National Association of Professional Mortgage Women 345 North Main Street, Suite 313 l West Hartford, CT 06117 l Phone: (860) 719-1991 l E-mail: napmw1napmw.org l Web site: napmw.org

2016-2017 NAPMW NATIONAL BOARD OF DIRECTORS

JANUARY 2017 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

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

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

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

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

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

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

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

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

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

2016-2017 BOARD OF DIRECTORS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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866 - 453-2400 © Cop o yright i 20077-2017 Carringt a oon Mor tgagge Ser vices, LLC headdquar tereed at 1600 South Douglasss Road, Suites 110 & 200A, Anaheim, CA 92806. 800 -561-4567. NMLS N ID #2600. Nationwide Mor tgage Licensing Sy Syst s em (NMLS) Coonsumer Access website: www. nmlsconsumerac a cess.org. AZ:: Mortgage Banker BK-0910745. CA: Licensed by the Depar tment of Business Oversight undder the Califor a o nnia Residential Mor tgage Lending Act, Fiile 413 0904. CO: Chheck license status of your morrtgage loan origina i tor at www.dor . a.sta a te.co.us/ reale estate/indexx.htm. GA: Georggia Residential Mor tgage Licensee 222721. IL: Illinois Residential Mor tgage Licensee. MN N: This h is not an offeer to enter into an interest e rate lockk agreeement under Minnesota Law. MO: Missourii Compan o y Registration 14 -1746-A. In-State Office: Mi Missour i Resident id tial tit l Mort M gage Loan BBrok oker Li License 14 14-1746-A1. 1746 A1 2511 SW Noell, Lees Summitit, MO 64063. 64063 NV: NV: M Mortgage Brok B okeer Li License 4068 (Residential id ti l M Mor tgage Lending di g).) NJ: Licensed Li d by the th N. N J.J Depar tment t t off Bankking i and a d IInsuranc a e. NY: Li Licensedd M Mor tgage Bankker— NYS Depar tment of o Financial Services. New Yor o k Mor tgage Banker Liccense B500980/107664. OH: Ohio Mor tgage Brok o er e Act Cer e tificate of Registration MB.804213.000; Ohio h Mortgage Loan Act Cer e tificate of Registration SM M.501517.000. RI: Rhode Issland Licensed Lender, Lender License 20112809LL. VA: NMLS ID 2600 (www.nmlsc . onsumerrac a cess.org). g WA: Coonsumer Loan License CL2600. Also A licensed in AL, AR, CT, DE,, DC, FL, ID, IN, IA, KSS, KY, LA, ME, MD, MI, MS, MT,, NH, NM, NC, OK, OR O , PA, SC,, TN, TX, UT, WV, WI and WY. NOTICE: All loans subject to credit e , underwriting i and prop o er ty approvaal guideelines. Offered e e loan products may vary a by state. Ther h re is no guarant a ee that all borrrowers will qualify. Restr e icitions may apply.. Thhis is not a commitment to leend.. Terms e m , conditions and programs a are subject to change withouut notice. This h infor o ma m tion is foor mor tgage prof o essio e onals only and is not intended for o distriibution to consumers. o Carr a ringt i on Mor tgage Services, LLC is nott acting on behalf of or at the direc e tion of HUD/FHAA or any gover e nnment agency.. All rights i reser e ved e.

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A F U L L R A N G E O F LOA N S O LU T I O N S

Now Is the Time Skyrocketing interest rates fuel the fire for non-QM loans By Tom Hutchens

JANUARY 2017 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

he day we’ve been waiting for has finally arrived.

Almost immediately following the election of Donald Trump as the next President of the United States, the 10-year treasury yield shot up nearly 20 basis points and has continued to chart a steep trajectory throughout the following weeks. As expected, this movement slashed mortgage refinancing activity nearly in half. Considering the swift disappearance of refinances from the market, lenders that heavily relied on refinances to create volume are now scrambling to generate new business. The recent interest rate hike announced by the Federal Reserve on Dec. 14, 2016, will only accelerate this trend. With PresidentElect Trump set to take office in January, it’s no longer a question of “if” the Fed will continue to raise rates, it’s a matter of “how fast.” Players that leaned on refinances in the past must now seek out other areas of the mortgage market to replace the lost volume. A natural place to look next is in non-QM products. These loans should benefit immensely considering their ability to provide lenders with product diversity and a new demographic of customers. As the industry leader in the non-QM space, our advice to these players is simple: Do not delay. Begin adjusting your business models now to offer non-QM products. It will take some time to develop the relationships, new clientele and proper know-how to offer and actively market these products to your customers, so get started immediately. Acting quickly will minimize your lost business as refinances continue to disappear. Also, the market for these products could further benefit from a softer regulatory tone from the Trump Administration. Regulatory relief could expand the credit box for non-QM products and increase lending opportunities to a wider range of individuals currently without access to financing. But don’t fret, non-QM mortgages look nothing like they did in the pre-crisis era. Non-QM loans are made with tight ability-to-repay requirements and 10 to 20 percent downpayments. Not to mention, the average FICO score of a non-agency loan today is 680, up from 580 in 2006. Now is the time. As interest rates continue to rise, partner with experts who can help you find success with non-QM products today.

Tom Hutchens is senior vice president of sales and marketing at Angel Oak Mortgage Solutions, an Atlanta-based wholesale lender currently licensed in 33 states. Tom has been in the real estate lending business for nearly 20 years. He may be reached by phone at (855) 539-4910 or e-mail Info@AngelOakMS.com.

SPONSORED EDITORIAL

elite performer the

New Year’s Revolution BY ANDY W. HARRIS, CRMS

t’s amazing how one day on the calendar can cause so much commotion when faced with a new year when in reality, it’s just another day. The good news with these celebratory holidays is that they help us reflect, set goals and look forward to the future. Each year seems to feel like a reset button where you learn from your mistakes and also celebrate your successes. Either way, it’s a chance to enter the year with a new perspective and determination. You cannot start the year without hearing about all the resolutions people make. A resolution is defined as a firm decision to do or not do something. The term “firm” in the case of most resolutions I believe is a little optimistic. As we know, most people who set new resolutions and goals have a hard time sticking with them, forget the objective, or get in the same patterns they were in previous years. I think something more drastic and impactful is needed to set and meet bigger goals. Instead of a resolution, we need a revolution. A revolution can be defined as a fundamental change in organizational structures (which could be you or your employer) that takes place in a relatively short period of time when the population (you) rises up in revolt against the current authorities (your actions or those of your employer). So the question to ask yourself is … where do you need to make a change in your behavior or in your career? What are you doing that is hurting your productivity? Is it time to consider another employer, environment or start your own business? To start a revolution, you need to be a leader and you need to have guts. It doesn’t take people, you can do this independently. You need to set strong goals and objectives, make no excuses, work on your weaknesses and build on your strengths. Reject your own behavior that limits productivity and embrace changes that will maximize it. Recruit positive influences and people in your life and deny the negative. Be bold, clear and never give up. The time for a significant change is now and 2017 is your year … time to take it!

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

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Recruiting, Training and Mentoring Corner

Want to be America’s Top Mortgage Employer? BY DAVE HERSHMAN

ho doesn’t want to be the best at whatever they do? So, if you own or help run a mortgage company, then the special focus of this month’s National Mortgage Professional Magazine should ring true with you. You don’t just want to read about mortgage employment, but to use that material to help you reach the goal of being the best employer you can be. But the next question is: How to you get there? First, let me point out that we are not talking about America’s biggest mortgage employer. We are talking about the best employer. This is not a question about quantity, it is a question about quality. Thus, this worthy goal can be achieved by anyone, no matter how many resources you have at your disposal. What I am going to do is present rules which come from my books on mortgage management, the first of which was managing a branch office, published by the Mortgage Bankers Association (MBA) nearly three decades ago. I am so old, I have books that are out of print! Over the years, I have delivered National Mortgage Management Conferences, as well as publishing The Complete Mortgage Management Kit, and more recently, the online course, Building and Leading a Great Mortgage Team. The basis for all of these courses, events and publications is that the rules for being a great manager are very simple—or not rocket science. Note that I did not say they were

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easy to implement, as you should not confuse “simple” with “easy.” With the average sales manager in our industry producing, recruiting and mentoring, it is quite hard to follow the simplest rules when you simply do not have enough time. That would also go for owners and executives of companies who are concerned with technology, compliance and a host of additional concerns related to leading a mortgage team. With this lack of time, it is even more important that the rules are kept very simple so that there is a greater chance of achieving these goals. 1. Hire the best people: This is the most important rule. If you hire people who are not suited for the roles they play in the industry, there is no chance that you will be a “best” employer. There is no way around this rule and it certainly is the hardest to achieve because our recruitment time is limited and our training and tools related to management, recruiting and assessment are typically insufficient as well. For example, note that we did not say the most experienced people. We said the best people. Sometimes we are so fixated on experience, we will hire someone who is barely competent with one year of experience which also included no training—over someone who is much more qualified because of their lack of experience. Someone who could be a future CEO. Furthermore, we don’t have the tools to assess whether someone with no experience is likely to be successful. We just

know that we don’t have the time to train them. 2. Fire the wrong people: One of the reasons we don’t have the time to recruit, assess and train the best people, is that we are dealing every day with problems created by the wrong people. For various reasons, we cannot let go of the wrong people and frankly, firing someone is not something we look forward to. But the wrong employees prevent you from being a great mortgage employer. And you are doing them no favors by employing them in the wrong position. Either find them the right seat on the bus or move on without them. 3. Let the right people know what their job is: Starting with the recruitment process, we need to let our prospective employees know what is expected of them. Too many times, we hire people who are expecting the wrong role or have unrealistic expectations of that role. For example, during the past 30plus years, I have been hearing loan officers say, “That is the processor’s job.” And processors say, “That the loan officers are not doing their own job.” So often, I have hear this that I think they should just switch jobs with each other. On the other hand, you would think we would clearly communicate the aspects of the job requirements upfront and regularly during employment.

4. Give the right people the tools they need to do their job: Once you have hired the best people for the right jobs which are clearly delineated, then your job as an employer is to put the right tools in their hands. These would include tools in the areas of technology, marketing and training. Again, achieving this goal is not necessarily easy with technology and compliance rules changing constantly. We dedicate so much time and money to keeping up, that there is little time for employee support and development beyond staying current. 5. Support your employees, but get out of their way: Being a great employer is not about micromanaging. It is about delegation and empowerment. It is about enriching your employees’ lives with rewards. These rewards could range from praise to bonuses to career advancement. Do you have a mentor program which serves to help your employees advance into management? Five simple rules. I doubt anyone would argue with the validity of any of these. On the other hand, I doubt anyone would argue with the fact that simple does not mean they are easy to implement. But if you have a goal to be a great mortgage employer, certainly the rewards would be worth the effort. Imagine if the best prospects approached and chose you because you were the best employer. Now, that is a worthy goal.

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

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newtomarket New UWM Offering Allows Originators to Prioritize Their Pipeline

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United Wholesale Mortgage (UWM) has announced Loan Swap, a pipeline management tool enabling originators to manage the order of their loans in UWMs underwriting queue. Loan Swap gives UWMs network of brokers a greater level of control over their entire pipeline, managing their loans to meet their borrowers’ timelines. “Loan Swap puts originators in the driver’s seat of their pipeline by creating greater transparency and giving them the power and flexibility to move loans within their pipeline, ultimately delivering better and faster service to their clients and Real Estate agents,” said Mat Ishbia, president and chief executive officer at UWM. The new accessibility is a big perk for loan officers, as they were previously unable to view the order of the underwriting queue. “Having this much control over my pipeline is unprecedented,” said Amit Parikh, president of Mortgage 360 Inc. “Not only can I see where my loans are in line, I can reorder my queue when needed to keep my borrowers happy and my business moving.” Loan Swap is the most recent of a slew of innovative tools UWM has brought to market to equip brokers with greater speed, control and efficiency in the production of their loans, joining the UClose platform and doc-less technology. UClose allows

brokers to take loans from clearto-close to closing in just minutes by creating their own documents and scheduling the closing. The revolutionary docless platform combines e-sign technology with automated systems so that brokers no longer need to acquire hard copies of pay stubs, tax returns or bank statements. Freedom Mortgage Wholesale Division Utilizing Simplifile’s Collaboration Services

Simplifile has announced that Freedom Mortgage has begun using the Simplifile Collaboration service in its Wholesale Division to quickly and easily exchange data with its settlement partners. “Freedom’s network of settlement partners plays a significant role in our ability to deliver superior service and ontime closings to our mortgage customers,” said Mike Graham, vice president of national TPO Operations at Freedom Mortgage. “Through the Simplifile Collaboration service, we are able to work with our settlement partners in real-time, which creates a more streamlined closing process and ultimately leads to a better borrowing experience for the customer.” Simplifile Collaboration enables lenders to share, receive, and validate documents and data with their settlement partners via a secure platform and provides visibility into

settlement partner processes, resulting in faster, transparent and more compliant mortgage closings. The system also automatically notes file changes, updates, deficiencies and statuses to craft an auditready compliance trail. “The importance of true collaboration between lenders and settlement providers in the post-TRID era cannot be overstated,” said Simplifile President Paul Clifford. “By facilitating direct, real-time interaction, Simplifile Collaboration provides a consistent, secure, auditable means of completing key mortgage loan documents in accordance with TRID.” Silver Hill Funding Expands Loan Limit for SmallBalance Commercial Mortgages Silver Hill Funding, a division of Bayview Loan Servicing LLC, has announced that they have expanded their lending limit to $2 million on commercial properties. “Increasing the amount Silver Hill Funding lends on is an example of our commitment to help brokers meet their clients’ needs and generate additional income for their business,” said Silver Hill Senior Vice President and National Sales Manager Michael Boggiano. The program expansion will help to create more opportunities for residential and commercial mortgage brokers as they provide alternative lending solutions for small

business owners and investors who struggle to work with traditional banks. In addition to the higher loan limit, Silver Hill’s nationwide programs feature financing for a variety of property types, including multifamily, mixed-use, office, self-storage, warehouse, light industrial, mobile home parks, automotive and retail properties. Other Silver Hill Funding program highlights include reduced documentation solutions for investors and business owners; terms of five-, seven- and 10-years; loan-tovalue (LTV) ratios of up to 75 percent; no seasoning requirements; and cash-outs. Credit Plus Launches Lost Sales Analysis Tool

Credit Plus has announced the availability of its Lost Sales Analysis by Equifax, a new product that helps lenders gain a better understanding of the applicants they’ve lost, who they lost them to, and why. It provides loan-level competitive intelligence that can help them maximize their marketing ROI, while improving closing rates and customer retention. Lost Sales Analysis is a product of Equifax Inc., and Credit Plus is a certified reseller. With the detailed data contained in the Lost Sales Analysis, lenders can determine if their applicants closed their loans with a competitor, monitor portfolio run-off trends, and assess pipeline fallout. The specific output contained in the Lost Sales Analysis includes: Name of the lender associated with the lost sale; characteristics associated with the consumer’s new loan, such as the origination date and amount, loan type, estimated balance, purchase

price, sale amount, and more; and purchase/refinance flag. “Our Lost Sales Analysis helps marketing and sales teams determine where leads went and why. And, those with roles in origination and production will be able to clearly see what happened in the pipeline to cause the lost sale,” said Greg Holmes, national director of sales and marketing at Credit Plus. “At the same time, those responsible for portfolio retention will be able to learn why existing customers left. In the end, loan operations will gain the intelligence they need to find out where their lost sales went so they can try to retain them going forward.”

Ellie Mae Launches Encompass Loan Officer Connect

`Ellie Mae has announced the launch of Encompass Loan Officer Connect, designed specifically to enable loan officers to be more effective and efficient when serving their borrowers, through a robust, scalable mobile extension of Ellie Mae’s Encompass mortgage management solution built on

Ellie Mae’s Encompass Lending Platform. Encompass Loan Officer Connect offers: l Increased Productivity and Efficiency: Loan officers can originate loans through a streamlined process, update loan files with a touch, view contacts associated with the loan with a simple swipe and keep the loan moving through the process no matter where they are. The solution is a direct extension of Encompass and can be accessed from iPhones, iPads and Android

devices, letting users stay connected to their borrowers through easy access to loan pipelines, alerts, lock expiration dates and loan amounts. l Real-Time Results and Superior Borrower Satisfaction: Loan officers can instantly qualify borrowers, run real-time product searches through Encompass Product & Pricing Service, access borrower liabilities and FICO scores quickly from credit continued on page 50

Quality Mortgage Services Launches New Income and Employment Verification Tool

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Quality Mortgage Services (QMS) has announced the release of QC Verify, a revolutionary breakthrough in automating verification processes for mortgages and other loan products. QC Verify will replace historically manual approaches to verify income, employment and assets with a user friendly, fully automated alternative that reduces cost and shaves days off existing practices. Leveraging QMS’s Mortgage Analysis Review Software (MARS) platform, QMS is planning to have QC Verify also available as a stand-alone solution in the near future. Through QC Verify, lenders gain the ability to reinvent verification methods gaining multiple advantages over the competition, including: Elimination of costs tied to mail and supply charges, as well as manual packaging and tracking; securing access to privacy data, including borrower income, assets and employment information; and decreased turn time for verification process, which can take place immediately online, as opposed to by snail mail or encrypted email. “QMS has dedicated 25 years to delivering superior audit services for QC,” said Tommy Duncan, QMS CEO. “We are excited to introduce QC Verify, which solves a long-time industry issue and ensures processes are more secure for the consumer, as well as the financial institution.”

NEWSFLASH y JANUARY 2017 y NMP NEWSFLASH y JANUARY 2017 y NMP NEWSFLASH y JANUARY

FHA Drops New Mortgage Premiums

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In one of his final acts as the head of the Department of Housing and Urban Development (HUD), Secretary Julián Castro announced the Federal Housing Administration (FHA) will reduce the annual premiums by 25 basis points for most new mortgages with a closing or disbursement date on or after Jan. 27. In a statement issued by HUD, the decision to lower premium rates “reflects the fourth straight year of improved economic health of FHA’s Mutual Mortgage Insurance Fund (MMIF), which gained $44 billion in value since 2012.” The adjusted premium rates are projected to save new FHA-insured homeowners an average of $500 this year. “After four straight years of growth and with sufficient reserves on hand to meet future claims, it’s time for FHA to pass along some modest savings to working families,” said Castro. “This is a fiscally responsible measure to price our mortgage insurance in a way that protects our insurance fund while preserving the dream of homeownership for credit-qualified borrowers.” David H. Stevens, president and CEO of the Mortgage Bankers Association (MBA), welcomed the announcement. “The reduction in the premium is a result of our industry’s and FHA’s

shared commitment to quality underwriting, and consumers will benefit as result,” said Stevens, who served as FHA Commissioner in the first term of the Obama Administration. “Reducing the cost of FHA loans benefits borrowers, but other changes to reduce uncertainty for lenders would be required to truly invigorate the FHA program. MBA looks forward to continuing to work with all stakeholders, including the new Administration, to ensure the safety and soundness of the FHA program.” “FHA mortgage products exist to serve an important mission: providing homeownership opportunities to creditworthy borrowers who are overlooked by conventional lenders,” said National Association of Realtors (NAR) President William E. Brown, a Realtor from Alamo, Calif. and founder of Investment Properties. “The high cost of mortgage insurance has unfortunately put those opportunities out of reach for many young, first-time- and lowerincome borrowers. Now, we have a real opportunity to get back on track.” Percentage of Home Purchases Increases in December

Home loan purchase percentages

closed 2016 on the rise while refinancing began to slightly soften, according to the latest Ellie Mae Origination Insight Report. Last month, home purchases accounted for 54 percent of all closed loans, up from 53 percent in November, while December’s refinances represented 46 percent of closed loans, down from 47 percent the month prior. Ellie Mae attributed this seesaw effect to rising rates: The 30-year note rate in December was 4.05, up from 3.81 in November. Closing rates for all loans increased to 73.2 percent in December, the highest rate of 2016. Refinance closing rates increased to 69.6 percent, up from 68.7 percent, while purchase closing rates increased to 77 percent, up from 76.1 percent in November. The average time to close all loans in December was 50 days, up from 49 days in November. The time to close a refinance increased to 52 days and time to close a purchase increased to 48 days, both up one day from November. On the decline however, were average FICO scores: 726 in December, slightly under the 728 level from the month prior. Conventional purchase FICO scores stayed steady at 753 for the third month while conventional refinance FICO scores dropped from 743 in November to 739 last month. “As rates began to increase we

saw purchases tick back up in December, signaling the start of a trend we expect to continue into 2017,” said Jonathan Corr, president and CEO of Ellie Mae. “We also saw closing rates rise to the highest percentage in 2016 as homebuyers locked in rates and lenders closed loans before the conclusion of the year.” NRMLA Names Members of Its 2017 Board

The National Reverse Mortgage Lenders Association (NRMLA) has formally announced the members of its 2017 board of directors. The association’s directors were elected unanimously en bloc during a NRMLA business meeting held in November during the 2016 Annual Meeting in Chicago. The 2017 Board elected the following slate of officers who will serve for the next year: CoChairs Joe DeMarkey of Reverse Mortgage Funding and Reza Jahangiri of American Advisors Group; Vice Chair Sherry Apanay of Finance of America Reverse; Vice Chair Mark Browning of HomeChex; Secretary Mike Kent of Liberty Home Equity Solutions; and Treasurer Jason McNamara of Celink. “The 2017 Board of Directors is composed of skilled industry leaders from all facets of the

reverse mortgage industry who will work together to govern the association with an appreciation for our diverse business needs," said NRMLA President and CEO Peter Bell. NRMLA welcomes four new Directors to the 2017 board: John Button, president and CEO of ReverseVision; Leslie Flynne, senior vice president of Loan Servicing for Reverse Mortgage Solutions; Michael Gruley, executive vice president of Reverse Mortgage Lending at 1st National Reverse Mortgage; and Michael McCully, partner at New View Advisors.

experience we will not forget and we look forward to continuing our relationship with more SOS affiliates in other countries.” Foreclosure Inventory Shrinks by 30 Percent

The national foreclosure inventory plummeted by 30 percent on a year-over-year basis in November 2016, while the level of

completed foreclosures fell by 25.9 percent, according to new data from CoreLogic. On a month-over-month basis, the November 2016 foreclosure inventory fell 2.4 percent compared with October 2016 while completed foreclosures declined by 14.1 percent to 26,000 in November 2016 from the 30,000 reported for October 2016. As of November 2016, the national foreclosure inventory included approximately 325,000, or 0.8 percent of all homes with a mortgage. One year earlier, the inventory consisted of 465,000

homes, or 1.2 percent of all mortgaged residences. Furthermore, the number of mortgages in serious delinquency took a 22.1 percent slide from November 2015 to November 2016, with 1 million mortgages, or 2.5 percent, in serious delinquency, the lowest level since August 2007. The five states with the highest number of completed foreclosures in the 12 months ending in November 2016— Florida (48,000), Michigan (31,000), Texas (25,000), Ohio continued on page 16

PRMI Lends a Helping Hand to Children in Jamaica

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More than 30 employees from Salt Lake City, Utah-based Primary Residential Mortgage (PRMI) flew to Montego Bay, Jamaica to aid 79 children living at the SOS Children’s Village. The international organization was established to protect vulnerable children and ensure that every child grows with love, security, education and respect. The group from PRMI was headed by Chief Executive Officer David Zitting. PRMI employees planted fruit trees, shrubs and a garden, painted homes, served food and provided early Christmas gifts to the children and caretakers. The children reciprocated their thanks by hosting a tennis tournament and gifting Jamaica pins to all PRMI employees who helped that day. ”It was a beehive of activity with our teams vigorously unloading fruit trees and shrubs, digging holes for plants, applying fertilizer and painting buildings,” said Steve Chapman, PRMI’s chief financial officer. The group also gave a fresh makeover of paint to the tennis court and playground area. The SOS Children’s Villages are a non-governmental and nondenominational organization that respects all religions and cultures and works with trusted partners in needed places where they can contribute to social development and prepare the children for an independent life. “We are honored that SOS Children’s Village hosted PRMI this Christmas season,” said Zitting. “The ability to help these children and their caretakers has been an

By Mat Ishbia Will FHA lower MI premiums? lot of mortgage professionals are wondering if the Federal Housing Administration (FHA) is going to lower mortgage insurance (MI) premiums or not. The FHA has reached its two percent capital reserve requirement for the first time since 2009, so it is definitely a possibility. Some are speculating that there is a 60 or 70 percent chance that the FHA will lower premiums even before the Obama Administration leaves office. While it is uncertain if it will unfold that way, it would be great for FHA borrowers. Rates have obviously gone up, but borrowers can still take advantage of lower MI premiums. The FHA’s target is to lower monthly premiums by 30 bps– going from 0.85 to 0.55 percent–which, on a $200,000 loan amount, could save borrowers $50 each month. That would be beneficial for both purchases and refinances. Whether it happens or not, FHA will be a great program for purchases in 2017.

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Home values and sales on the rise The year 2016 was great for the housing market, as home values and sales grew significantly. Appreciation of home values went up by 6.8 percent compared to the previous year. That’s a jump from $220,000 in November 2016 compared to $234,900 in November 2015–which marked 57 consecutive months of yearover-year gains. Forecasts for 2017 are indicating that appreciation will continue to go up, but at a smaller clip, around four percent. This is still good for mortgage brokers looking to do more refinance and cash-out business, and with home values still trending upward, adjustable rate mortgages will be a good option for borrowers. Likewise, home sales were up 15 percent over last year, which is the highest it has been since February 2007. Roughly 40 percent of homes sold this past November were on the market for less than one month. As 2017 progresses, it is expected to be another good year for purchases, with Millennials expected to make up nearly one-third of the buyer pool. There is a big opportunity for mortgage brokers to capitalize on that growing segment of the market this year. HomeReady enhancements HomeReady made some great changes late last year that flew a little under the radar because they came out around the same time as other noteworthy DU changes, such as property inspection waivers. HomeReady now allows borrowers to go up to 50 percent debt-to-income ratio if they complete homeownership counseling. It also provides more flexibility, as maximum LTV ratios for refinances was increased from 95 to 97 percent. HomeReady presents brokers with a tremendous opportunity as 2017 will be a solid purchase year. It is a big program that can get more borrowers mortgages for three percent down and save them money on a monthly basis. Mat Ishbia is president/CEO of United Wholesale Mortgage (UWM), the nation’s number one wholesale lender. A leading advocate of mortgage brokers, Mat has changed the lending platform, turning UWM into a $23 billion company and a top national workplace.

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(22,000) and Georgia (20,000)— accounted for 36 percent of completed foreclosures. "The seven percent appreciation in home prices through November 2016 has added an average of $12,500 in home-equity wealth per homeowner across the U.S. during the last year," said Anand Nallathambi, president and chief executive officer of CoreLogic. "Sustained growth in home prices is clearly bolstering homeowners' spending power and balance sheets and, as a result, spurring a continued drop in defaults." Ocwen Helps 75,000 Homeowners Avoid Foreclosure in 2016

Ocwen Financial Corporation has announced that the company helped approximately 75,000 homeowners avoid foreclosure through responsible loan modification programs in 2016. These modification programs include both the U.S. Department of the Treasury Home Affordable Modification Program (HAMP), as well as proprietary modifications for those homeowners who did not qualify for a HAMP modification. Ocwen leads all other servicers in HAMP modification activity, and in 2016 granted approximately 42,000 loan modifications through the HAMP program, many which included a reduction in principal. Ocwen has also outperformed the industry under the new HAMP Streamline Modification Program. In 2016, Ocwen completed over 14,500 streamlined modifications and expects that number to increase as additional homeowners convert their trial plans into permanent modifications. Despite the expiration of HAMP at the end of 2016, Ocwen remains committed to a business model that will continue to offer loan modifications to its customers who are struggling to meet their mortgage payment obligations. Ocwen will continue to work with families impacted by financial hardship through community engagement and innovative loan modification solutions.

“Ocwen is recognized as the industry leader in responsible home retention through foreclosure prevention,” commented Ron Faris, president and CEO of Ocwen. “There is no doubt that a homeowner whose loan is serviced by Ocwen has a much better chance of avoiding foreclosure than if their loan is serviced by any other large mortgage servicer. This has been confirmed by independent thirdparty studies, which consistently illustrate that Ocwen has a superior record helping borrowers bring their payments current, stay current, and repay their mortgage.” Homeownership Less Costly Than Renting in Two-Thirds of Housing Markets

Buying a home is more costeffective than renting in twothirds of the nation’s housing market, according to the 2017 Rental Affordability Report issued by ATTOM Data Solutions. In a data study of 500 U.S. counties, the report concluded that it is more cost-effective to making monthly house payments on a median-priced home— including mortgage, property taxes and insurance—compared to the fair market rent on a threebedroom property in 354 counties, or 66 percent of the total markets analyzed in the report. The least affordable rental markets requiring the highest percentage of average wages to pay fair market rent in 2017 are Marin County, Calif., in the San Francisco metro area (77.3 percent); Spotsylvania County, Va. in the Washington, D.C. metro area (73.7 percent); Monroe County (Key West), Fla. (72.2 percent); and Hawaii’s Honolulu County (70.7 percent) and Maui County (70.6 percent). On the flip side, the most affordable rental markets requiring the lowest percentage of average wages to pay fair market rent in 2017 are Madison County (Huntsville), Ala. (23.9 percent); Allegheny County (Pittsburgh), Pa. (24.4 percent); Fulton County (Atlanta), Ga. (24.8 continued on page 18

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NAMB in “The Big Peach!” By Valerie Saunders, CRMS

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oin NAMB from Thursday-Saturday, March 16-18, 2017 in Atlanta for NAMB East! The NAMB East Conference Committee has worked diligently to put together a schedule of events that would appeal to both loan originators and business owners. This premiere event is proud to feature one of the largest mortgage industry trade shows in the eastern United States. In addition, as part of NAMB East, we are excited to have the CFPB Ombudsman's office as part of their "Ombudsman Interactive," a series of three sessions targeted at senior level executives, small business owners and loan originators. Three CFPB Ombudsman Interactive Sessions will be presented during the course of the event, focused on senior executives, small business owners and loan originators, and all require pre-registration. Discussion topics will be tailored toward the interests of the intended audience, so please register for the session corresponding to your role. Sessions are interactive discussions rather than question-and-answer sessions, so attendance for each is capped at 75 participants. In addition, Thursday and Friday Breakout Sessions and special events include:

l Keynote Speaker Luncheon featuring John King, CNN’s chief national correspondent and anchor of “Inside Politics” l Dan Ellis, marketing and outreach specialist at the HUD Atlanta Homeownership Center l Ricardo Holloway, loan production officer from the VA Atlanta Regional Office l Rod Carnes, Deputy Commissioner for Non-Depository Financial Institutions for the Georgia Department of Banking and Finance l Alan Davis from the United States Secret Service l NAMB Certification Test Prep Class, presented by Rocke Andrews, CMC, CRMS l Certified Military Home Specialist Workshop, presented by Beverly Frase of Boots Across America l Plus, a variety of informative sessions presented by NAMB’s Platinum Sponsors We also have several fun-filled events planned, including our Casino Night on Thursday, March 16 at the College Football Hall of Fame, and our St. Patrick’s Day Party featuring the Trans Am Euro Mutts on Friday, March 17!

Valerie Saunders, CRMS is vice president of RE Financial Services Inc., a Florida mortgage broker business. She has more than 20 years of experience in the mortgage industry, currently serving as vice president of NAMB and chair of NAMB's Conference Committee. She may be reached by phone at (866) 992-0785 or e-mail Valerie@Refinserv.com. SPONSORED EDITORIAL

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percent); Anderson County (Knoxville), Tenn. (25.1 percent); and Rock Island County, Ill. (25.3 percent). “While buying continues to be more affordable than renting in the majority of U.S. markets, that equation could change quickly if mortgage rates keep rising in 2017,” said Daren Blomquist, senior vice president with ATTOM Data Solutions, the new parent company of RealtyTrac. “In that scenario, renters who have not yet made the leap to homeownership will find it even more difficult to make that leap this year. Additionally, renting may end up being the lesser of two housing affordability evils in a growing number of high-priced markets.” Home-Related Delinquencies Are Mostly Down

Delinquencies in closed-end loans increased in last year’s third quarter, according to results from the American Bankers Association’s (ABA) Consumer Credit Delinquency Bulletin, but three of the four housing-related loan categories saw declines. The ABA found home equity loan delinquencies fell from 2.70 percent in the second quarter of 2016 to 2.59 percent in the third quarter, while mobile home delinquencies fell from 3.17 percent to 3.11 percent and home equity lines of credit delinquencies fell from 1.21 percent to 1.16 percent. However, property improvement loan delinquencies had a slight uptick from 0.91 percent to 0.94 percent. “The three-year trend of declining home equity delinquencies reflects a healthier housing market and rising home values,” said James Chessen, ABA’s chief economist. “Borrowers are on much firmer financial footing than they were just a few years ago, and greater equity gives them additional motivation to stay current on their obligations.” The composite ratio, which

tracks delinquencies in eight closed-end installment loan categories, rose six basis points to 1.41 percent of all accounts. But despite this increase, the ABA was confident on the financial viability of American consumers. “Delinquency rates have held near historical lows for an unusually long period due in large part to consumers’ skillful financial management, but it was inevitable that they would edge up eventually as part of the natural credit cycle,” said Chessen. “It’s important for consumers to remain cautious and maintain their discipline in keeping debt at levels they can comfortably manage.” Gap Between Appraiser and Homeowner Expectations Widens

For the first time in six months, the gap between homeowner estimates and appraiser opinions expanded, according to the latest National Home Price Perception Index (HPPI) released by Quicken Loans. The new HPPI data found the average appraisal value dropped 1.33 percent below owner expectations in December, a turnaround from the trend during the second half of last year that found a narrowing of valuation opinions between homeowners and appraisers. Last month also saw a decline in appraisal values, with Quicken Loans’ Home Value Index determining that average home value was 1.19 percent lower in December than in November. On a year-over-year basis, appraised values rose by 3.85 percent. “Home value growth has been mostly driven by enthusiastic buyers vying for a smaller than usual inventory of properties,” said Quicken Loans Chief Economist Bob Walters. “Appraised values have dipped along with the seasonal decline in sales around the winter months. It’s yet to be seen if value growth will build as sales rise in the spring, or as construction increases.” continued on page 24

March 16-18, 2017 Omni Atlanta Hotel at CNN Center y Atlanta, GA Join NAMB—The Association of Mortgage Professionals and the country's top mortgage professionals for NAMB East! This premiere event is proud to feature one of the largest mortgage industry trade shows in the Eastern United States! In addition, as part of NAMB East, we are excited to have the CFPB Ombudsman's office as part of their "Ombudsman Interactive", a series of 3 sessions targeted at senior level executives, small business owners and loan originators.

Agenda for this event is as follows: Thursday, March 16, 2017 10:00am - 3:00pm: Lenders/Affiliates Council (includes lunch) 12:00pm - 3:00pm: Exhibitor Setup 3:30pm - 5:00pm: CFPB Ombudsman Interactive focused on Senior Level Executives (separately ticketed event) 6:30pm - 9:30pm: Casino Night to Benefit NAMB's Legislative Action Fund at the College Football Hall of Fame (separately ticketed event) Friday, March 17, 2017 8:00am - 11:00am: NAMB's Delegate Council Meeting 8:00am - 11:00am: Exhibitor Setup 11:30am - 1:00pm: Keynote Speaker Luncheon featuring John King, CNN's chief national correspondent and anchor of Inside Politics (separately ticketed event)

1:00pm - 6:00pm: Exhibit Hall Open! 1:00pm - 5:00pm: Originator Focused Breakout Sessions including CFPB Ombudsman Interactive for the Small Business Owner and the Loan Originator (Ombudsman sessions are separately ticketed events) 6:00pm - 8:00pm: St. Patrick's Day Evening Reception sponsored by Caliber Home Loans featuring the Trans Am Euro Mutts Saturday, March 18, 2017 8:00am - 10:00am: NAMB Committee Meetings 10:00am - 1:00pm: Originator Focused Breakout Sessions 1:00pm - 5:00pm: Exhibit Hall Open! 4:30pm - 5:00pm: Trade Show Giveaways!

Separate tickets may be purchased for the Ombudsman Interactive sessions, Casino Night and Keynote Luncheon.

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To attend the trade show and originator-focused breakout sessions FREE OF CHARGE, please register by entering the promotional code

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To register today visit nambeast.eventbrite.com

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NAMB President’s Message: January 2017

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Business Planning and the Association: Get and be Involved The New Year brings thoughts of planning and mapping out the next 12 months. Every business owner takes this opportunity to think about more than just survival, but how they can thrive … and so should you. A fundamental concept of business and association planning is to put the plan down on paper. It is amazing how much more successful a plan will be if it is actually written down and memorialized for you and your stakeholders to see. The same goes with association planning. NAMB met last summer to plan the rest of the year. We developed Goals, Intentions and Action items, and we figured out how to get from X to Y and by when. This is the foundation of a successful plan. How did you start your plan? Did you start with a Number goal (Funding or Income)? Or maybe it was to penetrate a market niche by gaining market share. No matter your goal, everyone needs to write it down, and meet again for a reset at least once a quarter. Plans are never a set it and forget it type of exercise. Our world changes too often and too quickly. We (NAMB) need to meet with you at least once per quarter to make sure your plan is on track and check to see if the landscape has changed, and thus, so too must your plan. Meet with your stakeholders and adjust the plan if needed. We (NAMB) must always be looking at the landscape. We look at the political, legislative, regulatory and industry environment. We must, or we will most certainly miss out on opportunities, or even worse, look back at our year and realize we missed both the mark and our goals. Most of you have already made your plan. It’s not too late if you haven’t. Take the time now to write out your three main goals. Then, make intentional statements based on those goals. Once you have that in place, you can create your action items that lead up ultimately to your goals. My friend and colleague, Scott St John, just finished an eight city tour on business planning for our mortgage loan originators and branch managers. Many of our originators go through this process every year and it never gets stale. We keep it fresh by adapting to the current environment and each individual’s business and personal goals as well. So don’t think you will have the same plan and goals year after year. You won’t or I should say … you shouldn’t. If you need help in developing goals, intentions and action items for your business and/or state association, please call or e-mail me and I will send you my workbook that I use every year. May your 2017 be great and may your thrive. Thank you and Namaste. Fred Kreger, CMC, 2016-2017 President NAMB—The Association of Mortgage Professionals Fred.Kreger@APMortgage.com • JOINNAMB.com

NAMB Government Affairs Update By Michelle Velez, CMC With the holidays over, the focus is now on Washington, D.C. and the new Administration. January is a slow start, but once President-Elect Donald Trump is sworn in, there will be some changes. Although, there is a lot of talk about dismantling Dodd-Frank, that is not likely to happen. The mortgage industry should be on the watch for some positive changes during this administration.

One change that we believe is coming may not be as positive we would like. President-Elect Trump has his sights set on mortgage interest deduction. It appears that the Trump Administration would like to cut the cap on mortgage interest deduction. The word from Washington is they would like to phase out mortgage interest deduction or remove it from being able to use it for a second home. This is an area of concern that NAMB will be watching in the future. NAMB’s 2017 Legislative Conference will be held SaturdayTuesday, April 22-25 at The JW Marriott on Pennsylvania Avenue and the early registration cutoff date is Friday, Feb. 24, 2017. This event sold out last year, so NAMB moved it to a larger location. The agenda is just about done. There are some amazing speakers and presenters to make this an extremely worthwhile event. As a reminder, this is an NAMB Member’s Only conference. If you are not a member, you can join now to attend at NAMB.org/NAMB/How_to_Join. The link to the hotel will be sent once you register. I have been fielding a lot of questions regarding HR 3393–The Mortgage Fairness Act of 2015. NAMB realizes the importance of having the mortgage broker company compensation removed from the three percent points and fees cap in the ability to repay rule. This bill is important to all loan originators and consumers. NAMB is working on getting it reintroduced into new legislation this year. The Government Affairs Committee has had several conversations with several legislators. You should see some movement on this bill. As you know, NAMB supported the Biggert-Waters Flood Insurance Reform Act of 2012 which reauthorized the National Flood Insurance Program (NFIP) through Sept. 30, 2017. This program is set to expire this year, and NAMB will be working hard to make sure it gets reauthorized. This issue will be coming up for a vote later this year and will most likely become a talking point for our visit to the Hill in April. While there are many issues that NAMB is currently following now, there is one issue that many company owners are watching. That is the Department of Labor’s Wage and Hour Overtime Rule. Most of you know that last November, U.S. District Court Judge Amos Mazzant granted an Emergency Motion for Preliminary Injunction. This enjoined the Department of Labor from implementing and enforcing the Overtime Final Rule on Dec. 1, 2016. The case was heard in the United States District Court, Eastern District of Texas, Sherman Division (State of Nevada ET AL v. United States Department of Labor ET AL). The rule updated the standard salary level and provided a method to keep the salary level current to better effectuate Congress’s intent to exempt bona-fide white collar workers from overtime protections. This is one issue NAMB is watching closely. As NAMB’s Government Affairs Committee Chair, I would like to hear from you. It would help me do my job if I know what is most important to you. Please reach out to me at Michelle.Velez@SupremeLending.com. I would appreciate hearing from you and knowing what is important to you! Michelle Velez, CMC of Supreme Lending in San Mateo, Calif. is a member of the NAMB board of directors and Government Affairs Committee Chair. She may be reached by phone at (650) 409-5347 or e-mail Michelle.Velez@SupremeLending.com.

NAMB Education Corner: Continuing Professional Development … By Bob Sweeney, CRMS As I was researching topics for my Education Corner column, I came across an excellent article authored by Vivian Kloosterman on continuing professional development titled “The Importance of Continuing Professional Development.” I would like to share her

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article with you, as it certainly applies to our mortgage industry. The importance of continuing professional development “We are often asked to describe the importance of Continuing Professional Development (CPD). Why is CPD important and why does it matter? l You’ve finished your degree. Check. l You’ve completed all your practical experience requirements so that you can graduate. Check. l Your new job is all lined up and ready to go. Mission accomplished. It’s fair to say the first part of your mission is well and truly accomplished. Sit back and give yourself a pat on the back. But don’t take too long about it or you’ll be lagging behind your colleagues. The same is true for professionals with many years of experience in the workplace. Continuing professional development is important because it ensures you continue to be competent in your profession. It is an ongoing process and continues throughout a professional’s career. The ultimate outcome of well-planned continuing professional development is that it safeguards the public, the employer, the professional and the professional’s career. Well-crafted and delivered continuing professional development is important because it delivers benefits to the individual, their profession and the public.

Bob Sweeney, CRMS is a financial advisor at Meridian Mortgage Solutions, director for NAMB–The Association of Mortgage Professionals and serves as chairman of the NAMB Education Committee. He can be reached by phone at (317) 625-3287 or e-mail Bob.Sweeney46@yahoo.com.

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

NAMB Kickstart is up and going. Since the roll out at NAMB National in September, we have received more than 30 NAMB KickStart Program applications and will have funded at least 15 by the time this is published. The extensive PR campaign will begin in February 21

Urgent Call to Action for NAMB Delegate Council Members NAMB is requesting ALL States to please forward to NAMB President-Elect, John G. Stevens, their list of delegates for 2017 for the NAMB Delegate Council. Please forward name, company name, email address and telephone number of designated NAMB Delegate Council Members for your state to JohnGStevens@Gmail.com. NAMB will be holding the first NAMB Delegate Council conference call on Wednesday, January 25th, 2017. Designated NAMB Delegate Council Members are also asked to attend NAMB East, NAMB Legislative Conference, and NAMB National and to attend the NAMB Delegate Council Meetings to be held at each event. For any questions please contact John G. Stevens at JohnGStevens@Gmail.com or call 801.427.7111 Sincerely,

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The importance of continuing professional development should not be underestimated–it is a career-long obligation for practicing professionals. Sometimes it is mandated by professional organizations or required by codes of conduct or codes of ethics. But at its core it is a personal responsibility of professionals to keep their knowledge and skills current so that they can deliver the high quality of service that safeguards the public and meets the

We welcome any input from all mortgage professionals. If you would be interested in joining NAMB’s Education Committee and become part of our future success in the education of our independent mortgage companies and mortgage loan originators, please feel free to contact me. If you are not an NAMB member, now is a great time to become a member. Go to your state association Web site or visit NAMB.org and join as a Professional Member.

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l CPD ensures your capabilities keep pace with the current standards of others in the same field. l CPD ensures that you maintain and enhance the knowledge and skills you need to deliver a professional service to your customers, clients and the community. l CPD ensures that you and your knowledge stay relevant and up to date. You are more aware of the changing trends and directions in your profession. The pace of change is probably faster than it’s ever been–and this is a feature of the new normal that we live and work in. If you stand still you will get left behind, as the currency of your knowledge and skills becomes outdated. l CPD helps you continue to make a meaningful contribution to your team. You become more effective in the workplace. This assists you to advance in your career and move into new positions where you can lead, manage, influence, coach and mentor others. l CPD helps you to stay interested and interesting. Experience is a great teacher, but it does mean that we tend to do what we have done before. Focused CPD opens you up to new possibilities, new knowledge and new skill areas. l CPD can deliver a deeper understanding of what it means to be a professional, along with a greater appreciation of the implications and impacts of your work. l CPD helps advance the body of knowledge and technology within your profession l CPD can lead to increased public confidence in individual professionals and their profession as a whole l Depending on the profession, CPD contributes to improved protection and quality of life, the environment, sustainability, property and the economy. This particularly applies to high risk areas, or specialized practice areas which often prove impractical to monitor on a case by case basis.

expectations of customers and the requirements of their profession.” “Formal education will make you a living; self-education will make you a fortune,” by Jim Rohn.

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courtesy of our media partner, National Mortgage Professional Magazine. There are plans on a video series to include how to get started and what problems our new small businesses ran into. Hopefully, this will encourage new applicants and possibly help others avoid some of the issues. NAMB will try to roll these into a best practices volume for our members to utilize. To restate the program, it is for new broker shop formations across the United States. Up to $10,000 can be requested to help with startup costs. We will want to see the name and company owners. A tax ID number and business formation will be required before funding. This is an NAMB benefit, and if the applicant is not already a member, they can join NAMB at the time of the award. Concerns are whether you have a book of business. What are your current volumes? What will be your company focus? What is your organizational structure and pay plans? Who will manage the business on a day-to-day basis? And finally how much money are you asking for and how do you plan to use the funds? So far our program partners are United Wholesale, Calyx and National Mortgage Professional Magazine. NAMB is anxious to get new partners to support the growth of the third-party origination (TPO) channel. So if you have thought about opening your own company, now may be the right time to do it. Visit NAMBKickstart.com for information or to apply. Rocke Andrews, CMC, CRMS is immediate past president of NAMB—The Association of Mortgage Professionals. He may be reached by e-mail at RAndrews@LendingArizona.net.

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Why Do I Need NAMB? www.namb.org … JOIN TODAY! l NAMB Testifies Before Congress l NAMB Works With the CFPB l NAMB Participates in Multiple Regulatory/CFPB Panels l NAMB Webinars l Full-Time NAMB Lobbyist on Capitol Hill l NAMB Protects Your Business l NAMB Forms Industry Coalitions l NAMB Education

For detailed information, visit www.namb.org.

NAMB EAST’s Spring Break By Linda McCoy, CRMS

Atlanta is getting ready to roll out the red carpet for mortgage originators, Thursday-Saturday, March 16-18 at the Omni CNN Center. The Omni Atlanta Hotel is our location to experience real Southern Hospitality for this NAMB Conference. NAMB East is your “Spring Break for Mortgage Originators.” Most of us have made our New Year’s Business Plans and the bottom line is we want to increase business, make more money and spend more quality time with our families. You are going to really like our agenda this spring. NAMB has the perfect plan for it all. We are bringing you something new and different. We have the CFPB Ombudsman’s office to present a series of three sessions: One for Senior Level Executives, Small Business Owners and Loan Originators. These sessions are designed to be interactive sessions, so bring your thinking caps and be ready to help us improve our origination and lending process. The CFPB wants to hear our thoughts, and we are ready to open the communication so we can work together for the improvement of our lending industry. These sessions are the first of its kind for the CFPB, so we want it to be a great success. Seating is limited to only 75 in each session. Check to see if there is still a spot left for you to participate in molding your future!! The first evening will be spent in the College Football Hall of Fame, right next to the Omni Hotel. Do not miss seeing that beautiful Championship Crystal Football, “The Coaches Trophy.” It is spectacular! Once you sign up for the Casino Night to Benefit NAMB’s Legislative Action Fund (LAF) event, we will have you fill out information about you and your favorite team. When you arrive, you will have a small device to wear that is programmed just for you. As you walk through the Hall of Fame, your favorite teams pops up everywhere with important plays and players you love. Upstairs will be our Casino Night with $200 worth of Funny Money. This is going to be one great evening with drinks, food, fun and excitement. Friday, we have our Keynote Speaker John King, CNN’s chief national correspondent and anchor of Inside Politics We are going to have a packed room. John has stories to tell and we want to hear them. The largest trade show for the mortgage industry in the eastern United States opens at 1:00 p.m. Mortgage professionals from all over come just to see who is new, if their favorite lenders are there and what they offer to help them build their businesses. This is the number one networking event where you can talk one on one with the lenders and supporting businesses for the mortgage industry. They are eager to answer all of your questions and support you as a mortgage professional. Plan to spend as much time as possible visiting every booth. These guys are there for you! Plan on attending the St Patrick’s Day Event on Friday evening. We have a great variety of different and interesting breakout sessions for you to pick from. You will find that we are having Delegate Council, a CRMS and CMC Certification Class for those who want to take their professional status to the next level. The VA will present a class on loan processing and underwriting. You will have the opportunity to get your VA certification while you are there. Many of our vendors are sponsoring classes to get you excited about being in business. NAMB East is a work in progress, it is ever-changing, so please keep up with the changes by going to NAMB.org, click the “Meeting” Tab, then click the “National” Tab on the NAMB East Attendee Page and look at the agenda for our NAMB Spring Break. Please register, make your hotel reservations and travel arrangements so you can join us at NAMB East 2017. Linda McCoy, CRMS of Mortgage Team 1 Inc. in Mobile, Ala. is a member of the NAMB board of directors. She may be reached by phone at (251) 650-0805 or e-mail Linda@MortgageTeam1.com.

Dear NAMBPAC Contributors, I want to thank each and every one of you for your very generous support in 2016! Without you, NAMB would not have such a strong and inﬂuential voice in the Mortgage Industry. We rely heavily on you to step up to the plate year after year and make a difference in our Industry! On behalf of NAMB, and the tens of thousands of mortgage professionals nationwide who NAMB represent, I want to extend a heartfelt THANK YOU! Here is looking forward to a wonderful and prosperous 2017!

For more information about NAMBPAC or NAMB’s legislative advocacy efforts, please feel free to contact me, or NAMB Government Affairs Chair Michelle Velez, or visit www.namb.org. Sincerely,

John G. Stevens, CRMS 2016-2017 President-Elect JohnGStevens@gmail.com

Thank You to Our 2016 NAMBPAC Contributors! Diamond-level Contributors ($5,000 maximum annual contribution) Flagstar Bank Federal PAC.............. MI Olga Kucerak, CRMS *......................TX Shane Lester, CMC, CRMS *............ AR * denotes prior annual NAMBPAC Diamond-level contribution

Sustaining Contributors Richard Abazia................................ CA Chuck Anderson................................ID Stewart Anderson............................ TX Warren Anderson............................ CA Joe Ashton...................................... AZ Jayne Bail...................................... CO Michael Banes................................ TX James Beaman................................ TX Allen Beydoun.................................. MI Audrey Boissonou............................ CA Louis Borsellino.............................. NY Jessi Bostic.................................... UT Doug Braden.................................. CO Teresa Buckman..............................CA

Marshall Moody.............................. TX Anthony Moore................................ FL Michael Noschese............................AZ Monique Peace................................ CA Terry Pogofsky, CRMS........................IL Brent Rasmussen, CMC, CRMS........ NE Jeanine A. Robbins.......................... AZ Nancy Romfh.................................. TX Marlene Rouen................................ LA Kathy Rubin.................................... TX Joan Ruth........................................ AZ Einat Sadot...................................... CA Anna Salser.................................... AL Julia Schloss.................................. CA Guy Schwartz, CMC........................ CA Jeff Shealey, GMA............................ TX Shawn Sidhu.................................. CA Timothy Simko................................ TX Paul Skeens....................................MD Geoff Snyder.................................... TX Adam Stein...................................... ID Wendi Stein......................................LA Donald Thomas................................ TX Ramona Thompson.......................... TX Steve Tilkin...................................... FL Regina Uhl...................................... TX Forrest Van Benthuysen....................FL Roland Varblow................................ VA Christopher Wagner........................ OR Brady Webb.................................... KY Cynthia Wingo..................................CA

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

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

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

John Burke...................................... CT Michael Burroughs ........................ OH Shannon Cagle................................ TX Joseph Cannarozzi.......................... SC Dana Chahidi.................................. CA Arturo Chavez..................................OR Ruben Concepcion.......................... FL Thomas Cullen................................ SC Ray DeMar...................................... NE Harry Dinham, CMC..........................TX James Dorney................................ CO Tammy Engel.................................. CA Don Fader........................................NC Lorenzo Flores................................ CA Don Frommeyer, CRMS.................... IN Regina Graham................................ FL Melinda Gregory.............................. TX Kelly Haney......................................TX Roger Hope......................................PA Damion Hughes.............................. TX Kevin Kennedy................................ FL Wayne King......................................TX Steven Lang.................................... CA Desmond Lenz................................ CA Corey Leonard.................................. IL Kim Lewis........................................TX Anthony Lombardo.......................... CA Heidi Martin.................................... OR Tiffany McCoy.................................. AL Brion McDermott..............................FL Ross Miller...................................... LA Thomas Mizgerd.............................. PA

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

Valerie Saunders, CRMS.................. FL Lisa Severseike................................ IA John G. Stevens, CRMS....................UT

How to Guarantee Your Success for the Year!

ith the recent rise in the interest rates, now is the perfect time to assess the latest marketing trends and to look at a company's sales process.

The companies with salespeople who go through the sales process described herein are closing at higher rates and holding more value. They are making more per loan because they are building relationships with their customers, getting more referrals and customers are coming back to their original loan officers. Here are the top selling techniques (in order) to keep your pipeline full: 1. Approach-Introduction: This is the opening step where you introduce yourself, explain what you do and how it could benefit your prospect. You will also make sure they are in need of the products and services you offer. Start building a relationship with the prospect and the information gathering stage begins. First impressions are essential to sales success. It sets the tone for the conversation and begins the relationship. 2. Qualification-Investigation-Discovery: This is an extremely important step of the sales process that cannot be skipped. This step allows you to hear the prospects needs and wants. It will also let you know if anyone else needs to be present for the sale to take place.

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3. Agreement on the Need–Follow Up on Step Two: In this step, you first repeat back to them what you heard in Step Two (their wants and needs). Then you present to them your product, or the best product for their situation and how it accomplishes their goals, fulfills their wants/needs and why (or how). And lastly, find out if there is anyone else needed to move forward with the sale. 4. Sell the Company: Often forgotten about, this step is crucial in overcoming objections later. This is where you build confidence in the company. People don’t buy from people or companies they don’t trust. So don’t skip it! You’ve been building trust in yourself up to this point. Now it’s time build trust in your company. 5. Fill the Need-The Presentation-The Pitch: Focus on the benefits rather than the features (also referred to as featurebenefit selling). Give them a feature of the product and then give them the benefit based on what you discovered in Step Two (their needs, not yours). 6. Close the Sale-Follow Up-Ask for Referrals: One of the main reasons sales fail is because the sales person doesn’t ask for the sale.

nmp news flash

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Zillow: White House Valuation Up During Obama Era

While President Barack Obama’s political legacy is open to debate, it appears that his real estate legacy is solid. A new data analysis by Zillow determined that the value of the White House has appreciated 15 percent since Obama's inauguration in 2009. Now valued at $397.9 million, the 55,000 square-foot presidential residence was part of the rising tide in home values over the past eight years, when valuations increased by nine percent. Zillow also estimated that if a standard 30-year fixed mortgage were taken out on the White House today, the monthly payment would be about $1.6 million—though it might make more sense to convert it into a rental property, as Zillow stated the monthly rental payment would be just over $2 million per month. “President Obama's term coincided with a massive recovery of the U.S. housing market, and that's reflected in the updated value of the White House,” said Zillow Chief Marketing Officer Jeremy Wacksman. “Home values across the country are growing at their fastest pace since 2006, with many markets setting new records—one of the reasons why the White House is worth more now than it has ever been.”

securities (RMBS) between 2006 and 2007. Deutsche Bank will resolve the DOJ charges for $7.2 billion, which is the largest RMBS resolution for the conduct of a single entity. Deutsche Bank will divide the $7.2 billion restitution between a $3.1 billion civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and $4.1 billion relief package to underwater homeowners, distressed borrowers and affected communities. “This resolution holds Deutsche Bank accountable for its illegal conduct and irresponsible lending practices, which caused serious and lasting damage to investors and the American public,” said Attorney General Loretta E. Lynch. “Deutsche Bank did not merely mislead investors: it contributed directly to an international financial crisis. Our settlement today makes clear that institutions like Deutsche Bank cannot evade responsibility for the great cost exacted by their conduct.” The record-breaking settlement is considerably higher than a $2.4 billion figure quoted last September when a German magazine claimed Deutsche Bank was negotiation an agreement to cover both the RMBS problems as well as other charges involving allegations of manipulating foreign exchange rates, money laundering and dubious equity trades in Russia. The DOJ announcement only covers the RMBS aspect of Deustche Bank’s operations, with no mention of the other issues that were allegedly being negotiated.

Deustche Bank in RecordBreaking $7.2B RMBS Settlement

Wells Fargo to Close 400 Branches

After prolonged negotiations punctuated by news leaks, the U.S. Department of Justice (DOJ) has announced a settlement with Deutsche Bank regarding charges that the German financial institution misled investors in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed

Wells Fargo, the nation’s largest mortgage lender, is planning to close more than 400 bank branches by the end of next year. According to a CNN report, the new wave of closures will follow the shuttering of 84 branches in 2016. The San Francisco-based bank did not offer a list of which branches it plans to shut down.

In short, go back to traditional sales practices and you will have higher close rates and get higher response rates from your marketing campaigns because the campaigns won’t need to be so specifically targeted for just one loan product anymore. TagQuest Inc. is a full-service marketing firm specializing in marketing for the mortgage industry. Call (888) 717-8980 or visit www.tagquest.com.

IMAGINE • INNOVATE • SUCCEED SPONSORED EDITORIAL

Wells Fargo’s reputation hit a significant pothole last year over a scandal involving fake bank accounts. However, the company insisted that the branch closings have no connection to that controversy, but instead reflect consumer preferences to online and mobile banking rather than traditional branch banking. New Data Reaffirms Home Price Appreciation

percent upswing. Seven of the nation’s 40 largest metro areas also recorded house price peaks, with Florida accounting for eight of the top 10 markets for home appreciation, most notably in Daytona Beach and Punta Gorda (both at a 1.2 percent increase). And some of the nation’s priciest markets became even more expensive: Portland, Seattle and Denver each recorded annual home price appreciation rates of 10 percent or higher. Separately, First American Financial Corporation’s Real House Price Index (RPHI) for October recorded a 0.7 percent

increase from September to October, and a projected 5.3 percent year-over-year increase for unadjusted house prices. On an unadjusted measurement, First American stated that the national price level is 0.01 percent below the housingboom peak in 2007. The five states with the highest year-over-year increase in the RHPI in October were Wyoming (6.2 percent), Nevada (5.3 percent), Maine (4.7 percent), Colorado (4.4 percent) and Michigan (4.3 percent). continued on page 48

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Three newly issued data reports have come to the same conclusion: Home prices were up at the end of 2016. The S&P CoreLogic CaseShiller U.S. National Home Price NSA Index reached a new peak when it reported a 5.6 percent annual gain in October, up from 5.4 percent last month. The 10City Composite posted a 4.3 percent annual increase, up from 4.2 percent the previous month, and the 20-City Composite reported a year-over-year gain of 5.1 percent, up from five percent in September. Before the seasonal adjustment, the National Index posted a month-over-month gain of 0.2 percent in October while the 10-City Composite was unchanged and the 20-City Composite saw a 0.1 percent increase in October. After seasonal adjustment, the National Index recorded a 0.9 percent month-over-month increase, while both the 10-City and 20-City Composites each reported a 0.6 percent monthover-month increase. “Home prices and the economy are both enjoying robust numbers,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “However, mortgage interest rates rose in November and are expected to rise further as home prices continue to out-pace gains in wages and personal income. Affordability measures based on median incomes, home prices and mortgage rates show declines of 20 to 30 percent since home prices bottomed in 2012. With the current high consumer confidence numbers and low unemployment rate, affordability trends do not suggest an immediate reversal in home price trends. Nevertheless, home prices cannot rise faster

than incomes and inflation indefinitely.” In another study, Black Knight Financial Services (BKFS) found home prices in October were up 5.6 percent on a year-over-year basis and up 0.2 percent from the previous month. October marked the 54th consecutive month of annual national home price appreciation, according to the company’s data reporting. Among the nation’s largest states, six hit new home price peaks—including New York ($363,000), which also saw the greatest month-over-month increase in October with a 0.7

JANUARY 2017 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

Production Incentives: Protecting the Consumer By Jonathan Foxx 27

guidance on production incentives. I am going to provide my reading of the Bureau’s most recent bulletin on this topic, entitled “Detecting and Preventing Consumer Harm from Production Incentives” (Bulletin 2016-03, November 28, 2016, hereinafter “Bulletin”). It is an interesting read, because it endeavors not only to compile guidance that the Bureau had provided in other contexts but also draws on the Bureau’s supervisory and enforcement experience in which incentives contributed to substantial consumer harm. Importantly, the Bulletin offers some actions that supervised entities should take to mitigate risks posed by incentives. In this article, I will explore the various kinds of risks associated with production incentives and offer an action plan to assist with identifying and mitigating such risks. Importantly, I conclude the article with a checklist, entitled Compliance Checklist for

Production Incentives, which provides some helpful guidelines to creating production incentive plans. Risks The most obvious risk of incentives to the consumer is a sales program that includes an enhanced economic motivation for employees or service providers to pursue overly aggressive marketing, sales, servicing, or collections tactics. These kinds of incentives are and always have been features of sales tactics that do not meet regulatory scrutiny. Consequently, it is the case that the Bureau has taken enforcement action against financial institutions that have expected or required employees to open accounts or enroll consumers in services without consent or where employees or service providers have misled consumers into purchasing continued on page 28

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at higher prices where pricing discretion exists; quotas for customer calls completed; and collections benchmarks. Some of these incentives are very complex in the way they are achieved and applied, whether optionally or required. The incentive challenge is one of the usual conundrums arising when money and capital formation meet: the opportunity for harm to the consumer. Obviously, incentives offer a way to further enhance revenue for the seller of services and products. Indeed, in our market economy, an incentive can reveal the economic interest of market participants in a particular service or product, which is extrapolated from consumers’ responses to the offerings. Like so much in finance, incentives are not inherently good or bad, but how they are applied makes them so! The Consumer Financial Protection Bureau (Bureau) has decided to weigh in with

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roduction incentives have been around since the dawn of modern capitalism. They are not going anywhere. Incentives have been called sales incentives, sales bonuses, compensation bonuses, and take into account any additional remuneration that tends to be transactionally based. All such incentives can be grouped into business objectives where a transaction may be tied to certain benchmarks, met by employees or service providers, the achievement of which leads to an increase in wage or reward for the party achieving the stated goal. For the sake of discussion, let’s call forms of such economic inducement, collectively, as “incentives.” Typical incentives include cross-selling, where sales or referrals of new products or services are pitched to existing consumers; sales of products or services to new customers; sales

production incentives

JANUARY 2017 n National Mortgage Professional Magazine n

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products the consumers did not want, were unaware would harm them financially, or came with an unexpected ongoing periodic fee. One or more regulatory violations may be triggered as a result of such incentives. To name but a few of the more salient regulatory frameworks that can be violated, impermissible incentives can cause violations of unfair, deceptive, and/or abusive acts or practices (UDAAP) (DoddFrank Act, §§ 1031 & 1036(a), codified at 12 USC §§ 5531 & 5536(a), the Electronic Fund Transfer Act (EFTA), as implemented by Regulation E (15 USC § 1693 et seq.; 12 CFR Part 1005); the Fair Credit Reporting Act, as implemented by Regulation V (15 USC § 1681-1681x; 12 CFR Part 1022); the Truth in Lending Act (TILA), as implemented by Regulation Z (15 USC § 1601 et seq.; 12 CFR Part 1026); and the Fair Debt Collection Practices Act (15 USC § 1692-1692p). And to this the Bureau itself notes that violations can stir up public enforcement, supervisory actions, private litigation, reputational harm, and potential alienation of existing and future customers. Although not meant to be comprehensive, here are some impermissible incentives that surely trigger regulatory violations: l Opening accounts: Sales goals that encourage employees, either directly or indirectly, to open accounts or enroll consumers in services without their knowledge or consent, which may result in improperly incurred fees, improper collections activities, and/or negative effects on consumer credit scores; l Benchmarks: Sales benchmarks that encourage employees or service providers to market a product deceptively to consumers who may not benefit from or even qualify for it; l Terms or conditions: Paying compensation based on the terms or conditions of transactions (such as interest rate) that encourages employees or service providers to overcharge

continued from page 27

consumers, to place them in less favorable products than they qualify for, or to sell them more credit or services than they had requested or needed; l Tiered compensation: Paying more compensation for some types of transactions than for others that were or could have been offered to meet consumer needs, which could lead employees or service providers to steer consumers to transactions not in their interests; and l Quotas: Unrealistic quotas to sign consumers up for financial services may incentivize employees to achieve this result without actual consent or by means of deception. Action Plan As I have often said, the evaluation of risk is just the first step to mitigating it. Sometimes, it is the easiest step! When dealing with incentives, the risk to the consumer–and mutatis mutandis to the financial institution–is mitigated through effective controls. Some people seem to balk at internal controls, as if their implementation is reflective of a personal bias. It is not. It is just the way to establish a means by which to regulate behavior that is lawful and acceptably fair to all market participants. Too many regulations can stifle financial opportunities; but too few regulations can cause the market to explode. From what we have been able to determine, both from its supervisory issuances and its enforcement actions, the Bureau certainly wants to provide a means whereby a financial institution can gauge its compliance with consumer financial protection laws as it relates to incentives. This is why it has often stated–such as in issuing its “Supervision and Examination Manual: Compliance Management Review”—the importance of implementing a Compliance Management System, otherwise known by its acronym, “CMS.” Indeed, because my firm believes so strongly in ensuring that our monthly clients are fully prepared with their CMS, we developed our annual CMS

Tune-up!™, which is an evaluation of a financial institution’s compliance management system. We provide an executive report and a risk rating to these clients at no additional charge. It is a critical responsibility of management to set up and implement a CMS, the review of which will certainly be undertaken by both federal and state regulators. If our CMS Tune-up!™ shows the presence of production incentives, we are going to rate the risk based on where those incentives concern products or services less likely to benefit consumers, or have a higher potential to lead to consumer harm, or reward outcomes that do not necessarily align with consumer interests, or implicate a significant proportion of employee compensation. Thus, instituting a compliance management system, a CMS, is at the core of effective compliance with the Bureau’s expectations in its supervision and enforcement of permissible incentives. Essentially, there are four components to the Bureau’s conception of a viable CMS:

Board of directors and management oversight Foster a culture of strong customer service related to incentives. In product sales, for instance, ensure that consumers are only offered products likely to benefit their interests. Policies and procedures Ensure that the policies and procedures for incentives contain: l Employee sales/collections quotas that, if a part of an entity’s incentive program, are transparent to employees and reasonably attainable;

Training Implement comprehensive training that addresses: l Expectations for incentives, including standards of ethical behavior; l Common risky behaviors for employees and service providers to foster greater awareness of primary risk areas; l Terms and conditions of the institution’s products and services so that they can be effectively described to

consumers; and l Regulatory and business requirements for obtaining and maintaining evidence of consumer consent. Monitoring Design overall compliance monitoring programs that track key metrics that may indicate incentives are leading to improper behavior by employees or service providers. Examples of possible monitoring metrics include, but are not limited to: l Overall product penetration continued on page 30

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Let’s apply the CMS framework to a few ways and means for limiting violations arising from incentives that may trigger violations of law.

reported issues of suspected improper behavior.

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1. The oversight by the Board of Directors or management; 2. Ratified and comprehensive compliance program, consisting of policies and procedures, training, monitoring, and corrective action; 3. A consumer complaint management program; and 4. An independent compliance audit.

l Clear controls for managing the risk inherent in each stage of the product life cycle (as applicable): marketing, sales (including account opening), servicing, and collections; l Mechanisms to identify potential conflicts of interest posed for supervisory personnel who are covered by incentives but also are responsible for monitoring the quality of customer treatment and customer satisfaction; and l Fair and independent processes for investigating

production incentives

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rates by consumer and household; Specific penetration rates for products and services (such as overdraft, add-on products, and online banking), as well as penetration rates by consumer segment; Employee turnover and employee satisfaction or complaint rates; Spikes and trends in sales (both completed and failed sales) by specific individuals and by units; Financial incentive payouts; and Account opening/product enrollment and account closure/product cancellation statistics, including by specific individuals and by units, taking into account the terms of the incentive programs (i.e., requirements that accounts be open for a period of time or funded in order for employees to obtain credit under the program).

Corrective action Promptly implement corrective actions to address any incentive issues identified by monitoring reviews as areas of weakness: l Corrective actions should include the termination of employees, service providers, and managers, as necessary, and these termination statistics should be analyzed for trends and root cause(s); l Corrective actions should include changes to the structure of incentives, training on these programs, and return of funds to all affected consumers as appropriate in light of failed sales or heightened levels of customer dissatisfaction; l All corrective actions should ensure that the root causes of deficiencies are identified and resolved; and l Findings should be escalated to management and the board, particularly where they

continued from page 29

appear to pose significant risks to consumers. Consumer complaint management program Collect and analyze consumer complaints for indications that incentives are leading to violations of law or harm to consumers in order to identify and resolve the root causes of any such issues. Independent compliance audit Schedule audits to address incentives and consumer outcomes across all products or services to which they apply, ensuring audits are conducted independently of both the compliance program and the business functions, and ensuring that all necessary corrective actions are promptly implemented. Whether a financial institution uses our CMS Tune-up!™ or has the resources to objectively evaluate the foregoing elements of a compliance management system on its own, the CMS approach to internal control is a necessity. There must be a careful, ongoing, systemic, procedural, testable, traceable, and evaluative means by which to ensure that incentives are rigorously supervised throughout the service and product delivery process. Information contained in this article is not intended to be and is not a source of legal advice. The views expressed are those of the author and do not necessarily reflect the views or policies of Lenders Compliance Group Inc., any governmental agency, business entity, organization, or financial institution. No representation is made and no guarantee is given with respect to the source, originality, accuracy, completeness, or reliability of any statement, information, data, finding, interpretation, advice, opinion or view presented herein.

Jonathan Foxx is managing director of Lenders Compliance Group, the first and only full-service, mortgage risk management firm in the United States, specializing exclusively in outsourced mortgage compliance and offering a suite of services in residential mortgage banking for banks and non-banks. If you would like to contact him, please e-mail Compliance@LendersComplianceGroup.com.

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n National Mortgage Professional Magazine n JANUARY 2017

Compliance Checklist for Production Incentives Category

Action Items

Systems

l System solution is capable of collecting the right kind of information to allow proper risk management l Audit procedures are established to review effectiveness and appropriateness of system solution l System solution allows identification of the following (where relevant) m The types of products and services m Individual high risk staff members (i.e., sales pattern, fear of disciplinary action) m Sales staff who are achieving high sales volumes and the products they are selling m Patterns in individual sales activity (i.e., spikes before any target cut-off dates) m Effects of product promotions and sales campaign m Claim repudiation of rates and/or cancellation rates m If claw-backs are permitted by law, the levels of claw backs for individual sales staff

Monitoring

l In addition to routine monitoring and checking that sales are carried out according to the firm’s sales guidelines, risk-based monitoring processes are also in place: u Where there is an indication of impermissible selling or higher risk of impermissible selling, additional monitoring is put in place u Additional scrutiny of high-performing sales staff l Monitoring is consistent with sales and bonus strategy (i.e., loan products with highest sales and loan products which attract large commissions as opposed to monitoring riskier products only) l During the monitoring process, more weight is given to mistakes in the sales process than to administrative errors u Root causes of issues are analyzed (i.e., cancellations) l Where relevant, monitoring also includes areas such as complaints handling, claims processing, mortgage arrears and customer retention (viz., risks to consumers from incentive schemes may also arise in these areas)

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Conflicts of Interest

l Clear strategy to manage and mitigate conflicts risks if firm answers Yes to any of the following questions: u Does the supervisor of sales staff also receive incentive payments based on the volume of sales made by those staff? m If so, does the supervisor of sales staff also carry out business quality monitoring of his/her own sales staff? m Any other conflicts risks? l Independent quality checking of supervision assessments

Inappropriate Behavior

l Institution has considered the types of inappropriate behaviors that might occur as a result of the firm’s incentive plans, taking into account the types of loan products being sold and the methods of distribution l Suitable training is in place, among other things, to ensure that staff, supervisors and management understanding the meaning and practice of “impermissible sales” and “failure to deliver fair outcomes for consumers” l Organization actively assesses what is being said to customers, for example, by using the following controls: u Mystery shopping u Contact sample consumers after sales (testing outcomes [i.e., correct information was given] and not simply customer satisfaction) u Record telephone calls u Monitor telephone calls u Record face-to-face sales conversation for later review l Past business sampling to identify if any systemically impermissible sales have occurred because of higher risk features in incentive schemes l Output of controls: u Management reviews output of controls u Results are placed into individual training and competency monitoring u Indications of non-compliance are escalated and acted upon on a timely basis l Emphasis on poor quality performance: Action is taken u Staff is aware of and reminded of consequences of compliance failures u Individual performance assessments based on both quantitative (financial) and qualitative (non-financial) factors (i.e., qualitative factors include compliance with regulation, internal procedures, market conduct standards, business retention rates, and number of complaints upheld)

l Qualitative factors affect remuneration of sales manager and advisers m Staff removed from bonus scheme or bonus significantly reduced if quality standards are not met m Incentive payments already received are clawed-back or off-set against future incentives (i.e., for poor outcomes or if consumers cancel) l Disciplinary measures l Additional training given to staff with persistent compliance failures Culture of Compliance

l Management has clear answers to the following: u In what way does the institution have a culture of putting customers first? u Are incentive plans aligned to the goals of the organization?

Risk Calibration

l Institution identifies, assesses, and documents specific features of its incentive plans that might increase the risk of impermissible selling (see below, Risk Accelerators).

Incentive Policy & Implementation

l Management has clear understanding of how incentive plans operate and how they meet regulatory requirements, with outline of same approved and in a written outline l Criteria used by institution to assess performance of relevant staff are accessible, understandable, and in writing l Relevant staff are clearly informed at the outset of: u The criteria used to determine their remuneration u Steps and timing of their performance reviews

Incentive Plan Outlines

l Plans are not overly complex l Institution considers all relevant factors when designing am incentive plan: u Role performed by relevant person u Type of loan products offered u Methods of distribution

Approvals

l Management approves incentive plans with input from risk management and compliance functions m Drafts such approvals guidelines into the plan design and incentive policies reviews

l Compliance personnel have access to all relevant documentation Reviews

l Frequent and effective department and function reviews of written remuneration policies and incentive plans and related controls l Internal and/or external testing and audit to determine compliance with policies and procedures, with results of same given to management

Reporting Lines

l Appropriate and transparent reporting and chain of command lines to assist in timely escalation of problems

Controls

l Controls are established to identify and mitigate increased risks

Outsourced Entities

l Ensure that outsourced entities apply controls and arrangements to mitigate risks that, at minimum, are at the same level as the institutionâ&#x20AC;&#x2122;s own risk tolerance

Governance Group

Where appropriate, institution has a formal governance group (reporting to the remuneration committee or senior management) that ensures incentive plans are consistent with the firmâ&#x20AC;&#x2122;s remuneration policies

continued on page 34

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l Compliance function verifies that institutionâ&#x20AC;&#x2122;s remuneration practices comply with federal and/or state regulatory guidelines, including applicable employment law

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l Institution uses features in its incentives plans that reduce the risk of impermissible selling, for instance: u Emphasis on sales quality: qualitative criteria included in calculation of remuneration u Claw backs u Variable remuneration: m References used in calculation of variable remuneration of staff are common across loan products sold m Ratio between variable and fixed income reflects desired conduct of employees to act in the best interests of clients (i.e., bonus is limited to a lower proportion of basic salary) m Variable remuneration is paid out in several payments over a period, in order to take into account long-term results m Capped or decreasing incentives (i.e., bonuses are capped or reduced when sales volume approaches a certain level or bonus is limited to a lower proportion of basic salary) m Policy on payment is flexible and, where appropriate, includes possibility of not paying any variable remuneration

l Appropriate remuneration policies are not circumvented at individual or group-wide level (i.e., use of off-shore or outsourced entities)

Groups

l Affiliates to have the group remuneration policy applied and the requirement of subsidiaries to take into account local responsibilities (viz., based on risk profile and regulatory environment) Risk Accelerators

Examples of Significant Increase of Impermissiable Risk

Disproportionate Rewards For Marginal Sales

l Retrospective accelerator: Level of incentives earned for all sales in a period, rather than just the sales above target, increases once a target is reached

(Target/goal triggers an increase in earnings which is much higher than the normal rate at which incentives accrue)

l ”First past the post” competition bonus (i.e., first 25 sales people to reach the target earn a “super bonus”) l Locked-in enhanced commission: once a target is met, sales people are locked in to an enhanced commission for the next year

Stepped Payments

l Higher rate of incentive applies to sales over a target

Inappropriate Incentive Bias Between Products

l Salespeople are biased towards loan products with higher commissions attached

(Even higher risk where incentives are different for substitutable products)

Variable Salaries

l Staff moves between salary bands or tiers depending on their performance against sales targets

Inappropriate Requirements for Determining Staff Eligibility for Incentives

l Incentive payments are accrued but not paid unless a minimum target is met for each of several types of loan products (i.e., bonus paid only if a percentage of the sales person’s clients have purchased certain services or products, such as an insurance product)

Bonus Above Thresholds

l Once a target is met, staff receive bonuses on each sale above the target

Campaigns or Competitions

l Product-specific or volume-based competitions designed to increase sales

Compliance Checklist for Production Incentives is meant to be suggestive, rather than comprehensive. Each financial institution should evaluate its incentive plans in accordance with federal and state guidelines, and applicable employment law, as well as ensure these are reflective of its size, complexity, and risk profile. Information contained herein is not intended to be and is not a source of legal advice. © 2016 Lenders Compliance Group, Inc. All Rights Reserved.

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JANUARY 2017 n National Mortgage Professional

As we turn the page of the calendar and begin a new year, we enter the next 12 months with new hopes and expectations of how to grow business in the new Trump Administration. National Mortgage Professional Magazine gathered some of the industryâ&#x20AC;&#x2122;s forward-thinkers for a roundtable discussion on how they plan to face the year 2017 and beyond. What follows is a lively dialogue between C-level executives, heads of trade associations and those on the frontlines, all sharing their goals for 2017 and the future of the mortgage marketplace.

National Mortgage Professional Magazine Presents

ry Roundtable Discussion About the panelists Gary Acosta Co-Founder & CEO National Association of Hispanic Real Estate Professionals (NAHREP) Gary Acosta is the co-founder and CEO of the National Association of Hispanic Real Estate Professionals (NAHREP) and a 25-year veteran of the housing industry. NAHREP is the nation’s largest minority real estate trade association with over 26,000 members and 50 local chapters. In his capacity as CEO of NAHREP, he created the Hispanic Wealth Project, a new 501©3 non-profit organization with a strategic plan to triple Hispanic household wealth by 2024. In 2013, Acosta co-founded The Mortgage Collaborative, a cooperative of mortgage companies who work together to increase profitability and market share. He is a former appointee of the consumer advisory board (CAB) of the Consumer Financial Protection Bureau (CFPB), the powerful federal agency responsible for regulating consumer protection in the financial services industry. He served as 2014 chairman of the CAB mortgage committee. He is a former member of the board of directors of the Mortgage Bankers Association (MBA) and has served on advisory boards for several Fortune 500 companies, including Fannie Mae and Freddie Mac. Terry W. Clemans Executive Director National Consumer Reporting Association Inc. (NCRA) Since 2001, Terry W. Clemans has served as executive director of the National Consumer Reporting Association Inc. (NCRA), a Chicago-based national trade association representing the housing credit reporting industry. NCRA members account for more than 70 percent of the companies in the U.S. that produce credit reports required by HUD, Fannie Mae and Freddie Mac for mortgage lending and many of the nation’s leading resident screening firms. NCRA members are the elite providers of crucial consumer data to the top housing decision makers in the United States. As executive director for NCRA Terry is an active advocate on consumer reporting issues in Washington, D.C., and is frequently quoted in the media on industry issues. He has testified before Congress, consulted numerous federal agencies on credit reporting issues and has served as an expert witness in several litigations on credit reporting. Terry has been involved in consumer reporting industry since 1986. Jonathan Foxx Founder, President & Managing Director Lenders Compliance Group Jonathan Foxx is founder, president and managing director of Lenders Compliance Group, Brokers Compliance Group, Servicers Compliance Group and Vendors Compliance Group, the country’s first full-service, mortgage risk management firms in the United States devoted to offering a full suite of services in residential mortgage banking to banks, non-banks, independent mortgage professionals, mortgage servicers and service providers. Jonathan is also the founder and president of the Association of Residential Mortgage Compliance Professionals (ARMCP), consisting of nearly 1,600 professionals. ARMCP is the first and only independent, national organization in the United States

devoted exclusively to residential mortgage compliance professionals. Jonathan holds a Ph.D. from Columbia University and an MBA from the Wharton School. Kelly Hendricks President of National Association of Professional Mortgage Women (NAPMW) Vice President Delmar Financial Company Kelly Hendricks is president of the National Association of Professional Mortgage Women. As head of the nation’s only association for women in mortgage lending, Hendricks is responsible for promoting new opportunities for the advancement of women, and for advocating for equal treatment of women in the industry. In addition to creating new communication and public relations initiatives, under her leadership NAPMW has seen significant revenue growth, an increase in membership, new corporate benefactors, and an annual conference where attendance and sponsorship have risen by 60 percent. In addition to her role with NAPMW, Hendricks is also vice president of St. Louis-based Delmar Financial Company. Tom Hutchens SVP, Sales & Marketing Angel Oak Mortgage Solutions Tom Hutchens is senior vice president of sales and marketing at Angel Oak Mortgage Solutions, an Atlantabased wholesale lender currently licensed in 33 states. Tom has been in the real estate lending business for nearly 20 years. Rodrigo Lopez, CMB Chairman Mortgage Bankers Association (MBA) Executive Chairman Northmarq Capital Rodrigo Lopez, CMB has been actively involved with the Mortgage Bankers Association (MBA) for almost three decades. He is a former chairman of MBA’s Commercial/Multifamily Board of Governors. He has served on the association’s Board of Directors since 2009, along with a previous stint on the board in 2003 and 2004. Rodrigo was the recipient of MBA’s Distinguished Member Award in 2010, MBA’s Burton C. Wood Legislative Service Award in 2002, and MBA’s Master Faculty Award in 2000. He also received MBA’s Certified Mortgage Banker (CMB) designation. Rodrigo is also executive chairman of Northmarq Capital.

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2017 State of the Industry The discussion What impact do you think the Trump Administration will have on housing overall and compliance? Gary Acosta: After years of steady recovery, the housing market is finally back to its pre-recession levels. The Fed is beginning to raise interest rates, home prices have rebounded almost entirely in most markets and the FHA has cut its mortgage insurance premiums for a second time in two years. For those of us in the housing industry, these are all positive signs that a healthy and robust market will only continue. The Trump Administration will have the opportunity to enhance this growth if they focus their energy on productive policies to support affordable homeownership gains. A couple opportunities for the Trump administration to do just that would be in aiding the increase of housing supply and responsible adjustments to certain financial regulations that put undue pressure on mortgage originators. While most real estate professionals would agree that resolving excessive regulations and lack of access to affordable inventory is a solid recipe for building up the housing market, the Trump Administration would be wise to consider supplementing these initiatives with comprehensive immigration reform. This measure would not only alleviate pressures on families of undocumented individuals but would serve as an avenue to increase the pool of potential homeowners and protect a segment of labor supply crucial to the industry’s success. Jonathan Foxx: There is a tendency to believe that a new sheriff in town means big and quick changes to regulatory rules. Actually, this tends not to be the case. Most regulatory change is gradual. The Consumer Financial Protection Bureau has stated its supervisory plans for 2017, which include, among other things, regulating the use of arbitration clauses; addressing issues within consumer reporting, such as accuracy; enforcing fair and accurate debt collection; reviewing demand-side consumer behavior and improving financial literacy; studying and understanding household balance sheets; ensuring fair and equal access to mortgages and effective servicing; better regulating open-use credit; examining small business lending and ensuring fair lending compliance; and better regulating student lending and servicing. Some of these plans will run right into the buzz saw of litigation. Some will result in enforcement activities that lead to administrative penalties. Other items will become the rules of the road. Kelly Hendricks: I am optimistic that President-Elect Trump and his Administration will have an overall positive effect on the industry as a whole, as well as stabilizing the over regulation we currently are facing. I don’t necessarily think we will have a repeal of legislation, as some speculate. However , I do look for compliance regulations to stabilize a bit. Hopefully President-Elect Trump’s business sector background will translate to more common sense initiatives for the mortgage industry. Tom Hutchens: President-Elect Trump will have a positive effect on the housing market as his policies will likely be beneficial for business, employment and economic growth. In an inflationary environment conducive to growth, we will likely see increased household wealth, an increase in housing prices and rapidly rising

rates. We have already seen rates rise 50 basis points since the election. All of these factors should support a strong housing market in the New Year. To the extent that the Trump Administration is successful in reforming the CFPB, it would lessen the compliance burden associated with making loans, further benefiting the mortgage business.

If you had the ability to make one recommendation to the new Administration on how to ensure a healthy housing market, what would it be? Terry Clemans: The recommendation is to encourage FHFA to explore ways to ensure the safe expansion of sustainable homeownership, starting with the proper documentation of consumer credit risk. While there have been huge strides made regarding ensuring the ability to repay, in many ways, the credit reporting process has changed very little and there are key issues that need correction. First, let’s start with making sure that if someone lost a home during the financial crisis, we completely understand the cause before these consumers re-enter the housing market. We should have very clear specific credit codes to document the exact status of all foreclosures and short sales, including any remaining debt associated with the transaction. There should be no room for speculation when reviewing the credit report and there remains room for improvement in this area, more than eight years after the housing crisis. Second, we need a better mortgage credit report and score. The current mortgage credit reporting process consisting of the “Trimerge” credit report, in which lenders focus on the middle of the three credit scores, is not sufficient for marginal borrowers. For consumers with excellent credit or very poor credit this works fine. However, it has never worked well for consumers with certain credit problems who are on the fringe of approval. The Residential Mortgage Credit Report (RMCR), the vehicle that the Tri-merge replaced in the early 1990s, was a much better product and provided a more thorough evaluation of those fringe consumers. NCRA started raising concerns about this report from the inception of the Tri-merge in the 1990s and pointed out more issues in 2003, referring to it as an “enabling” factor, allowing some lenders to steer borrowers into unsustainable subprime loan products. Hindsight has proven that this process is not a cheaper and faster system, as it was promised to be when it was sold to the lending industry. When you consider the cost of ancillary products and services that were formerly required features of the RMCR’s, the Trimerge is much higher priced and a slower process in the long run. The worst aspect of the Tri-merge is that these reports are often missing data that we now refer to as “alternative” or “non-traditional.” To include this missing data now, which means under the current system it is not included in the credit score, is problematic as manual underwriting in this area is common and the decision to investigate the “alternative” data is done quite subjectively. Whether or not your full credit history is reported, verified by a disinterested third party, scored and made part of the lending decision, should not be subjectively decided as it has a huge impact on the accuracy of decision making in borderline loans.

ry Roundtable Discussion The discussion Do you feel that technology will Can you think of any ideas on completely alter the way we do how to clean up the growing business in the next 24 months? appraisal mess and backlog Rodrigo Lopez: Technology presents a new frontier of due to decreased turn times? opportunity for real estate finance. This is the era when people expect information instantly, in the palm of their hand, whether we are talking about outreach to homebuyers, business intelligence solutions for commercial lenders, or attracting new employees. Clara Shih, the founder and CEO of Hearsay Social, who spoke to MBA’s convention in October, says that “companies, especially those that have traditionally lacked digital touch points or have low interaction frequency with their customers, need to rethink their business practices and even their business models to adapt to the age of constant digital connectivity and influence.” By embracing new technologies, we have opportunity for tremendous growth. We can achieve greater efficiency in operations and regulatory compliance, but there is an even greater opportunity in terms of growing our business. Terry Clemans: No, I see very few changes on a technology front for the primary credit reporting product line. The credit reporting industry was one of the earliest industry segments to embrace automation. From the dawning of the computer age, computer punch cards to acoustic couplers and dot matrix printers with built in modems for remote report delivery, the credit reporting industry has led the way in utilizing advantages through technology. I believe we may have actually hit a period of diminishing technological returns in this industry segment. An over reliance on technology has caused a reduction in overall accuracy that, when combined with the added costs of a potential data breech (new minimum requirements from the national credit repositories require mortgage credit reporting agencies to incorporate a 1,000-1,200 percent increase in the data security insurance they carry beginning in 2017 due to the level of computer technology currently in place), create for the first time in about 30 years a situation in which some of the best advancement options may come from using less technology to gain efficiency. Sometimes a pencil and a sheet of paper are more effective than a computer.

Do you feel there’s a resurgence in the mortgage broker model? If so, what had led to this resurgence? Tom Hutchens: Following the financial crisis, the industry saw a flight to safety as regulations were forcing industry participants to consider how well they worked. At that point in time, we saw the shift of mortgage professionals becoming mortgage bankers accelerate as a trend. However, now that we’ve lived in this environment for some time, mortgage professionals are returning to dip their toes in the water as independent mortgage brokers. As new products and correspondent lending allows for originators to expand their business, it might be time for new entrants and others in the industry to consider coming back to the mortgage broker model.

Kelly Hendricks: We have been faced with increased turn times on appraisals due to volume surges in 2016 which should come back to normal turn times in the near future. However, this does not solve the long-term effects the industry faces with an aging appraiser panel. The average appraisers today are nearing retirement age and the requirements to enter into this field, both financially and level of experience, are not attractive. In order to solve the longterm challenges with obtaining quality appraisals in a reasonable turn time it is going to require an overhaul on the requirements necessary to enter the field and time it takes to obtain certifications to work independently. Furthermore, the supervisory appraisers need to have some incentive to mentor and train new appraisers as they work to obtain necessary certification. This is not a problem that can be solved overnight and collectively as an industry we need to work with the Appraisal Foundation to examine qualifications to become a certified residential appraiser in today’s market.

Do you feel there’s great opportunity for newcomers into the business? What are you and your company doing to attract young prospective mortgage professionals to the business? Gary Acosta: Opportunities for newcomers in the real estate industry are substantial. Many fields that were once some of the most successful in generating employment opportunities eventually die out or are replaced as the market’s needs shift and change over time. Manufacturing, as an example, was once one of the hottest industries to work in, and today, is almost non-existent. The beauty of our industry is that while it is dynamic and evolves over time, there will always been a need for the seasoned and well trained professional. This is particularly true for the Hispanic professional. As demographics in our nation are shifting, there is a growing need for culturally competent real estate professionals to represent the Hispanic community. This may mean having documents available to be read and explained in Spanish, an underwriting team that understands nuances in credit profiles of the Hispanic borrower and marketing material and outreach that effectively cater to the Hispanic consumer. With only four percent of the real estate professionals being of Hispanic dissent, our organization is dedicated to not only increasing Hispanic participation in the industry but also educating the industry at large on how to best represent the needs of our unique community.

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2017 State of the Industry Roundtable Discussion The discussion Tom Hutchens: The average age of mortgage professionals is currently 53-years-old. Therefore, there’s a need for the industry to attract younger talent, and thus there’s an opportunity for young entrants to make a splash in the industry. While regulation in the mortgage industry in recent years has been a barrier to entry, there’s plenty of space for younger individuals without experience in the mortgage business to gain employment as mortgage professionals and grow toward becoming seasoned professionals. And, as the industry’s reputation continues to recover following the crisis, opportunities are abound for professionals of all ages to have an impact. Along those lines, the biggest opportunity for younger mortgage professionals is in the non-conforming space. Currently, every originator is offering agency loans, but that leaves out a huge pool of borrowers who cannot access these agency loans for various reasons. Offering a range of non-agency products gives young, hungry professionals a way to build a client base, helps differentiate them from other mortgage originators and helps them drive referrals. Young mortgage professionals can get ahead of the curve by beginning to access a wider range of home buyers from the get-go and really elevate their career rapidly.

What areas of growth do you see for 2017? What are your goals for the coming year? Gary Acosta: At the National Association of Hispanic Real Estate Professionals, we are ecstatic to hit the ground running in 2017. Since our founding in 1999, we have prided ourselves in not only being the go-to resource for the Hispanic professional for educational resources and networking opportunities, but also to be an organization that will advocate for our community at the highest level and with the upmost integrity. As we transition into a new political era, NAHREP will be engaged with the new administration and industry stakeholders to advance our goals of increasing sustainable homeownership for Hispanic families and American communities at large. In the last year, our organization has grown substantially and we are looking forward to further upward trajectory in the year ahead.

Currently, NAHREP is home to 26,000 active members, 50 local affiliate chapters and several partner organizations, such as the Hispanic Wealth Project and NAHREP Consulting Services. We have expanded our footprint to new markets such as Nashville and Oklahoma City, where some of the fastest growing Hispanic populations are emerging. We are thrilled to capitalize on this growth, continue expanding into new markets and increasing our reach to more and more professionals, families and communities in the year ahead. The Harvard Joint Center for Housing Studies expects that 50 percent of homeownership growth will come from the Hispanic market and NAHREP will be there to help guide our members and the industry to serve this opportunity both professionally and profitably. Terry Clemans: For the mortgage reporting industry, I see a potential growth area in the Fannie Mae trended data segment. Experian will be finishing their version of trended data to be added to Fannie Mae’s DU10.0 version whenever they are ready for implementing it into the underwriting process. My goal for the year is managing the changes to our legislative and regulatory environment in Washington, D.C. With the new Trump Administration coming into power and all of the changes in perspective that brings, we have the opportunity to correct problems from the past and improve our highly regulated industry for the future. Kelly Hendricks: As president of NAPMW, we are looking forward to providing quality educational opportunities for our members and increased membership in 2017 as some of our new initiatives are rolled out. On the business side of things at Delmar Financial Company, we are encouraged by new market opportunities in 2017 and look to have increased production in 2017 as compared to 2016. With mortgage rates starting to increase, it is going to take expansion in new markets or business channels to maintain or increase production in coming years and companies need to be agile and take advantage of technology to stay competitive in a rising rate environment. Rodrigo Lopez: We have the means and opportunity to advance real estate finance in America to the benefit of our industry, the economy and consumers. One of our main areas for growth will be the purchase mortgage market, as the continuing economic recovery allows more Americans to take advantage of the American Dream. In order to best take advantage of this opportunity, our industry needs to focus on three key goals: First, we have an opportunity to improve access to credit, while still being mindful of the need to balance new regulations with innovation and responsible adjustments to the housing finance system, including secondary market reform; second, transformational technology; and, third, achieving meaningful diversity in our industry. The face of America is evolving. Over the next decade, there will be 16 million new households in the United States. Today’s minorities will become the majority. The Millennial generation proportionally has the largest share of immigrants. It is essential that we view these demographic changes as positive opportunities. To benefit from this evolution and take advantage of these opportunities, we must be inclusive in every aspect of our businesses. We need to move beyond standard business practices and develop diversity management strategies with dedicated recruiting, mentoring and leadership programs.

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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.

Quicken Loans Parent Company Acquires Two Fintech Firms

JANUARY 2017 n National Mortgage Professional Magazine n

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Detroit-based Rock Holdings Inc., parent company of Quicken Loans, has signed an agreement to acquire LowerMyBills and ClassesUSA from their parent, Core Digital Media. Terms of the acquisition were not made public. However, the LowerMyBills and ClassesUSA executive leadership will remain in place and the companies will continue to operate from their Los Angeles headquarters. “We are passionate about online technology, and its importance in the finance and education spaces,” said Graham Skidmore, vice president of Rock Holdings. “LowerMyBills and ClassesUSA play a meaningful role in helping consumers find the best online solutions for their goals. Through these acquisitions, and the planned capital investments, we are confident these businesses will continue to grow and meet the evolving needs of their customers.” These acquisitions mark the second and third acquisitions in the last two weeks for Rock Holdings: On Dec. 27, 2016, its In-House Realty subsidiary announced it had agreed to purchase the technology assets of Toronto-based OpenHouse Realty.

Castle & Cooke Mortgage Welcomes New Nashville Team

Castle & Cooke Mortgage has added a new team of loan originators and processors to its Nashville area branch, located in Brentwood, Tenn. The seasoned team of mortgage professionals, all of whom are respected industry veterans in the greater Nashville market, will be led by Denise Haraseviat and Rodney Jones. “I’m excited to bring on a proven team I’ve worked with over the years that will benefit from the tools, services and industryleading customer service track record Castle & Cooke Mortgage provides,” said Glenn Hodge, regional manager for Castle & Cooke Mortgage. “Denise, Rodney and the entire team are great additions as we grow in the Nashville area and continue our Midwestern expansion.” Haraseviat said, “I have a deep level of respect for Glenn Hodge and we are honored to be working with him again. Our team has been looking for its ‘forever home’ and now we’ve found it.” Homeside Named to Glassdoor’s “Best Places to Work” List

Columbia, Md.-based Homeside Financial has been recognized by Glassdoor as a 2017 “Best Place

to Work,” ranking above nearly 500,000 other companies nationwide. The Glassdoor Best Place to Work Award is based entirely on employee feedback, honoring various companies and leaders throughout the world. Companies such as Airbnb, Google and Zillow join Homeside on the list. “Every day at Homeside, we ask ourselves how can we deliver on our of promise of being a modern mortgage company,” said Dan Snyder, cofounder and managing partner at Homeside Financial. “For us ‘modern’ doesn’t just mean technology, it means building things that positively affect the way people experience financing a home.” Since opening in late 2013, Homeside has grown from 10 people in a temporary space, to more than 450 people across 20 major cities in just under three years. “Our plan was simple, invest in people the rest will follow,” said Snyder. “This Glassdoor award is a 100 percent driven off of employee reviews–that’s what makes me so proud.” Robert Hohman, Glassdoor CEO and co-founder, said, “Company culture and the employee experience are critical considerations for job seekers everywhere when deciding where to work. To help, the Glassdoor Employees’ Choice Awards recognize companies that truly stand out as Best Places to Work because they’re purely determined by the authentic voice of those who

really know a company best—the employees.” HomeBridge Financial Relocates New Jersey Branch to Accommodate Growth

The Shrewsbury, N.J. branch of HomeBridge Financial Services Inc. has relocated from its original site in order to accommodate the rapid growth experienced during its first three years in operation. HomeBridge’s Shrewsbury retail branch was first licensed in 2013, and quickly rose to prominence in the company under the leadership of its branch manager and 30-year lending industry veteran, Rene Stone. The office has grown to become HomeBridge’s leading branch in the Northeast for the last two years, and one of the company’s top three branches nationally for the past three years. “HomeBridge’s success in Shrewsbury is rooted in our ability to offer mortgage loans customized to the unique needs of each customer,” said Stone. “Whether someone is a longtime resident looking to refinance, a millennial buying their first home, or a developer trying to secure funding for a new project, the HomeBridge team in Shrewsbury has access to the right mortgage products for each borrower’s individual needs. HomeBridge’s national-level resources, combined with the Shrewsbury office’s personal approach with each customer, has made for a truly winning combination here in

Monmouth County.” HomeBridge’s Shrewsbury branch is now less than two miles from the original location it occupied when the office first opened for business. One of HomeBridge’s faster growing retail locations, the Shrewsbury office has expanded more than 200 percent since becoming operational in 2013. The new 4,400-square-foot office location will be home for more than 20 HomeBridge associates, and allow room for additional mortgage professionals to join the branch as it continues to grow in 2017. “HomeBridge historically has had had a very strong presence in the Northeast, but the growth our Shrewsbury location as seen under Rene’s leadership has been nothing short of exceptional,” said Douglas Tarta, Northeast Regional Manager for HomeBridge. “Her team’s combined commitment to quality and customer service, along with their sense of urgency, sets an example for how all mortgage providers should work with their customers.”

mortgage loans that best fit their individual needs. Motto Mortgage inspires new specialists to join the profession by offering them tools, resources and proximity to a real estate brokerage and its agents. Homebuyers can work with a real estate agent to find a home, and with a Motto Mortgage loan originator to secure financing in offices at one location. Motto Mortgage loan originators will not be bound to the products of one specific lender, but will have access to competitive loan options from various sources.

Mortgage Peer Network Partners With LendingQB

Mortgage Peer Network has announced the completion of an integration that adds peer-based analytics to LendingQB’s cloudbased mortgage loan origination system (LOS). The two companies have joined forces to help lenders generate more business and provide them with peer-based performance metrics that enable a more efficient and intelligent lending operation. Increased regulation and compliance have dramatically

increased the costs of origination and hampered the efficiency of mortgage lenders, according to studies released by the Mortgage Bankers Association (MBA). Mortgage Peer Network is an innovative tool that helps lenders provide an enhanced consumer experience using milestonebased consumer survey feedback and leverages consumers’ existing social networks to gain additional repeat, cross-sell and referral business. Mortgage Peer Network provides lenders with peer-based performance continued on page 58

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Motto Mortgage, a mortgage brokerage franchise and the second member of the RE/MAX Holdings family of brands, has announced that its offering of mortgage brokerage franchise opportunities is now effective in Indiana, North Dakota, Rhode Island, South Dakota and Wisconsin. The addition of the five states brings the number of states in which Motto Mortgage franchises are actively being sold to more than 39. “Entering these five markets is an exceptional milestone for the Motto Mortgage team,” said Motto Mortgage President Ward Morrison. “We have the resources to educate, train and support our franchisees so that they can provide an outstanding mortgage lending experience for consumers. We’re thrilled to continue the expansion of Motto Mortgage throughout the country.” Motto Mortgage officially launched on Oct. 25 and its loan originators work with real estate agents to help homebuyers obtain the

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Lykken on Leadership

Eight Rules for Hiring and Developing Your People BY DAVID LYKKEN

JANUARY 2017 n National Mortgage Professional Magazine n

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s any leader in the mortgage industry (as well as in any other industry) will tell you, the quality of the people you have on your team will make or break your organization. In some cases, we see leaders of organizations blaming their employees for their failures. The mark of a great leader, however, is the extent to which he or she takes responsibility for the failures of the team. For better or for worse, we as leaders must own the work of our employees— it all comes back on us. As leaders, then, we cannot simply expect the people on our team to naturally achieve a high level of excellence. We’ve got to take the initiative in helping them attain it. First, we must make sure we’re bringing the right people onto our team in the first place. We cannot hire people who won’t work for our organization and then blame the people we hired for our bad decision to hire them! Then, after we’ve hired the right people, we’ve got to work on training them and developing them to reach their full potential. In this article, I would like to share a few basic rules for hiring and developing our people to achieve the best possible outcome for our organizations.

1. Hire people with potential Depending on the position for which you are hiring, you’ll need

“The best workers, the kind you want to have working for you, are never content to stay where they are in their careers. They want to develop and grow and reach new heights.” to seek out people with certain skill levels. I would caution against, however, only looking at the level of skill, education, or expertise. Instead, consider how the candidate has grown in skill, education, and expertise in the last year or two. You don’t just want people who are smart. You want people who are constantly improving. Looking at how the candidate has demonstrated progress in the past can give you an indication of how he or she will do so in the future. There will be more to learn in your organizations, so you don’t want a candidate who thinks they know everything! Don’t look for the highest skill level … look for the greatest potential. 2. Hire people with positive attitudes One of my favorite phrases is the maxim: “Hire for attitude, train for skill.” Of course, up to a certain level, you need to hire for skill. Your candidate is going to need to know how to do certain things in order to get the job done. However, once a minimum threshold of skill level is reached,

attitude becomes infinitely more important. When someone has a high level of skill coupled with a bad attitude, they quickly become a Prima Donna—making everything about them and placing unwarranted demands on everyone else. Instead of going exclusively for skill, look for someone who has a modest level of skill and is willing to grow. If this person has a positive attitude with a decent skill level, they will have a much greater effect on the team. 3. Hire people with integrity If there’s one thing that I think you should primarily base your hiring decision on, it’s this. A lowskilled person can be trained into a higher level of skill. However, you should never bring a person with low integrity onto your team. When you’re hiring new employees, make sure you screen for character defects. You always want to be sure you are bringing people onto your team who have good moral compasses. Unethical employees can wreak all sorts of havoc on your organization—from theft to fraud to harassment. A

person with integrity, though, is someone you can trust. And nothing is more important than trust. Make sure you hire for integrity. 4. Hire people who fit your culture One last thing to consider when bringing someone new onto the team is how well they will mesh with existing employees. It doesn’t mean that they have to have the same personality as your existing employees. Diversity can be a great asset. However, they have to be able to work well with the team you already have in place. I’ve seen some organizations have employees interview candidates along with their managers to get a grasp on how well they will fit in with the culture. A great company culture goes a long way. Make sure you’re bringing people in who will enhance it rather than people who will diminish it. 5. Develop a strong training system When you bring new employees onto your team, you’ve got to

have a solid system of training in place already. I’ve seen so many organizations hire employees with a “sink or swim” mentality. They start not knowing what they’re doing and just sort of have to figure it out for themselves. If we want our organizations to have any level of consistency and cohesiveness, we’ve got to do better than that. The best leaders will have a training plan, helping employees along through their first few months of work at the very least. Whether you outsource the training of your employees or you build your own internal program, you’ve got to have something in place that sets people up for success from the very start.

have to wonder why they’re leaving you behind. 8. Reward your people for their efforts Everyone likes to feel appreciated. The best leaders recognize this need in their employees. All too often, leaders focus only on incentives. They compensate workers based on results. That’s certainly not a bad thing. Good intentions, after all, don’t pay the bills. However, if people fail to reach their goals despite having worked extremely hard to do so, we’ve got to cut them some slack. Otherwise, they

might just give up. You don’t have to give them an “A for effort,” but you could give them a “B.” The point is this: Let your people know that you appreciate the fact that they’re trying. Sometimes, economic, legislative,

and technological issues arise that make goals literally unattainable. It is in situations like these that your people need to know that are aware of their hard work. Reward their efforts— and eventually the results will

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

6. Provide opportunities for career advancement You can hire the best possible candidates and give them the best orientation imaginable, but the trick will end up figuring out how to get them to stay. The best workers, the kind you want to have working for you, are never content to stay where they are in their careers. They want to develop and grow and reach new heights. If they can’t find a path to career advancement in your organization, they will be forced to look elsewhere. A core part of developing employees is giving the opportunity to better themselves through hire positions in your company. If you want your best people to stay on your team, you’ve got to provide a place for them as they grow.

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7. Keep lines of communication open The biggest reason for problems in any organization is a lack of communication. This is especially true when it comes to employees dissatisfied in their work. I’ve consulted with many organizations in the mortgage industry on employee turnover, and leaders in most organizations seem to have no idea why people leave. Do you know why? I think it’s because their employees don’t tell them; they simply leave. If you want to get useful feedback from your employees, you’ve got to make them feel like they can come to you with their problems. There has to be a path for employees to express concerns to management without fear of repercussions. Families whose members don’t talk to each other can quickly become dysfunctional; the same thing happens in organizations. Make it easy to have real conversations with employees, and you’ll never

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

JANUARY 2017 n National Mortgage Professional Magazine n

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n last month’s article, I discussed the potential effects of the recent election on the Consumer Financial Protection Bureau (CFPB) and its mortgage rules, including the TILA-RESPA Integrated Disclosure rule (also known as TRID). I described why I believe it is more likely that Congress will amend the CFPB’s structure and its mortgage rules rather than eliminate them. That being said, it is likely that the next administration or Congress will effectively stop the CFPB’s rule-making agenda. The CFPB’s planned TRID 2.0 amendment rule will likely proceed unscathed, because it is intended to streamline compliance. But the next Administration and Congress, using tools such as executive orders and the Congressional Review Act, will likely prevent the CFPB’s planned major rules from going forward, such as its proposed payday lending and arbitration rules. This could mean that, until the Congress changes the CFPB’s structure or the courts determine that it is no longer an independent agency, the CFPB will focus on enforcement. The CFPB’s mission to protect consumers will remain, and it will likely ensure its resources are deployed effectively to fulfill its mission. The CFPB has many rules and tools to enforce against the mortgage industry, such as TRID, ATR/QM, fair lending, and UDAAP. Also, remember that in the fall, the CFPB launched a warning shot to dozens of mortgage lenders based on supposed non-compliance with HMDA. For these reasons, it would be prudent for mortgage lenders and brokers to prepare for more CFPB enforcement in the next couple of years. They should review compliance management systems to ensure they include all of the requisite functions, such as a process to track and resolve consumer complaints. They should update policies and procedures for the CFPB’s mortgage rules. In addition, as TRID may be an area of focus, they should conduct thorough file reviews. The resolution of compliance issues may also necessitate the implementation of new technology solutions to ensure the accuracy of disclosures, such as a collaborative closing portal. In addition, lenders should complete HMDA implementation in 2017 with enough time for testing. Lenders and brokers should also conduct a fair lending analysis that includes the new HMDA data points, to see how the data for their loans will appear to the CFPB. In addition, other fair lending issues warrant attention, such as the treatment of limited English proficiency borrowers. We may see many changes to the CFPB in the next couple years, but until those changes take effect, we may see more enforcement. It would be prudent for the industry to prepare and shore up their compliance programs.

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

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Among the major metro areas, Charlotte, N.C., and Jacksonville, Fla., were the leading markets, tied with a 9.8 percent increase. “While we have yet to see the impact of the ‘Trump Bump’ and Yellen’s increase in mortgage rates on unadjusted house prices, I expect there to be an impact early next year,” said Mark Fleming, chief economist at First American. “In 2013, we saw the significant slowing effect the ‘taper-tantrum’ had on unadjusted house prices. We expect unadjusted prices to respond similarly to the recent increases in mortgage rates, though to a lesser degree this time. While mortgage rates above four percent reduce affordability, accelerating wage growth and the expected slowdown in unadjusted price appreciation are both beneficial for affordability. I expect the net effect on consumer house-buying power to remain modest.” Builder Confidence Hits 11-Year High

There is no shortage of optimism in the home building industry: The latest the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) jumped seven points to 70, its highest level since July 2005. All three HMI components increased this month—the component gauging current sales conditions rose by seven points

to 76, the index charting sales expectations in the next six months increased nine points to 78, and the component measuring buyer traffic took a six-point flight to 53, marking the first time this gauge has topped 50 since October 2005. All four regional HMIs also took an upswing. NAHB Chairman Ed Brady gave credit to the incoming presidential administration for the new degree of can-do spirit. “This notable rise in builder sentiment is largely attributable to a post-election bounce, as builders are hopeful that President-elect Trump will follow through on his pledge to cut burdensome regulations that are harming small businesses and housing affordability,” said Brady, a home builder and developer from Bloomington, Ill. “This is particularly important, given that a recent NAHB study shows that regulatory costs for home building have increased 29 percent in the past five years.” Your turn National Mortgage Professional Magazine invites you to submit any information on regulatory changes, legislative updates, human interest stories or any other newsworthy items pertaining to the mortgage industry to the attention of: NMP News Flash column Phone #: (516) 409-5555 E-mail: newsroom@nmpmediacorp.com Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

Correction … In the December 2016 issue of National Mortgage Professional Magazine, the incorrect photo of author Sanjeev Dahiwadkar appeared on page 89 in the article “Change is Certain.” Sanjeev’s correct photo appears here. Sanjeev Dahiwadkar is president and CEO of IndiSoft LLC, a Columbia, Md.based global technology development firm that provides collaborative, realtime workflow solutions, customized for the entire financial services industry. Sanjeev has 20 years of experience in the financial industry.

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Growth Comes After You Backfill Attrition By Steve Rennie

f you are a production manager, leader, or executive, you likely see a bright future and plan your production growth by helping your current team be more productive and add new members to the team.

Growth is this easy, right? No … it’s not. There are many risks to growth, but the biggest is called attrition. In fact, attrition is a massive risk for growth. Some of the producers working for you today will wash out, get recruited away or have their production drop off. Because of this, “growth” has to start with backfilling what drops off or goes away before any real growth can happen. That said, most often this attrition comes from mid-level and lower-level producers. Industry insiders I often speak with reference that 80 percent of the production in most companies comes from the top 20 percent of their producers … is this true for you? While companies have always been better at retaining their top producers, we are in a different time that makes everyone with an NMLS number a “recruiting” target and “evaluating options,” something everyone does ... including your top producers. Here are a few items to consider in your growth plans: l

l 50

JANUARY 2017 n National Mortgage Professional Magazine n

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Know your attrition rate and be honest with yourself: Hint … in 2015, a prominent survey revealed a range of 24-44 percent turnover in a single year among close to 100 companies in the survey). Define growth: By knowing a few variables, you can assess the actual impact of infilling and expansion (contact us about our Growth IMPACT Calculator if you want help). Have a retention strategy: The best strategy is to help your team accomplish their goals. That means knowing what their goals are and meeting monthly to discuss how they are performing.

With your attrition rate defined, you can build a plan to address the backfilling that needs to happen before you can “grow” to the new volume targets desired. Ultimately, the amount of recruiting and hiring that needs to be done will increase. Model Match launched in 2014 as an innovative platform supporting individual (infilling) and team (expansion) hiring goals for mortgage origination companies. The solution incorporates processes, best practices, and proven methodologies to source, attract, hire, on board and retain production talent. In addition, the platform is coupled with live one-on-one coaching to train and facilitate recruiting best practices in an effort to strengthen an organization's overall recruiting “muscle.” This helps our clients better achieve strategic growth goals. Contact us to learn more at ModelMatch.com/See-It.

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

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vendors, and create and display the best-possible loan scenario for the borrower right on the spot. Loan applications are created as Encompass loan files, therefore once the borrower is satisfied, loan officers can lock in the loan and the application flows through Encompass so data is always accurate and compliant within the single system of record. Loan officers can stay in lockstep with the borrower’s loan process by checking status and alerts. l Security and Compliance: Encompass Loan Officer Connect includes built-in application security. Because Encompass Loan Officer Connect is not a separate system, but rather an extension of our lender’s system of record, data access is controlled by settings within Encompass, including client ID, user name, and password for authentication and access can be granted or revoked instantly by the Encompass system administrator. Two-factor authentication provides additional security and all data displayed to the user is stored directly in Encompass, with no data stored on a separate system or device. “Encompass Loan Officer Connect extends the value and power of the Encompass Lending Platform,” said Jonathan Corr, president and CEO of Ellie Mae. “Encompass Loan Officer Connect gives loan officers a fully customizable and scalable solution that lets them originate and access loan files anywhere, from any device, to increase productivity and efficiency while offering superior customer service and support to meet the unique needs of their customers.” First American Mortgage Solutions Integrates FraudGuard With LoanLogics’ LoanHD

First American Mortgage Solutions LLC, a subsidiary of First American Financial Corporation, has announced the completion of its integration with LoanLogics, a recognized technology leader in loan quality management and performance analytics. The integration provides users of

LoanLogics’ LoanHD platform with streamlined access to FraudGuard, First American’s data-driven decision-support tool that helps lenders comply with regulations, improve the speed and efficiency of application reviews, and increase loan quality. The LoanHD platform, LoanLogics’ flagship loan quality management technology, offers real-time loan quality reporting and best practice audit workflows. From within the LoanHD platform, users can now order FraudGuard services directly from the AppQ Network vendor management portal, which provides lenders with easy access to an entire ecosystem of third-party services that create efficiency and reduce errors in the audit lifecycle. “LoanLogics is committed to ensuring our clients have the tools they need, when they need them,” said Craig Riddell, senior vice president and chief business officer for LoanLogics. “By continually expanding our LoanHD network with the addition of best-of-breed solutions like FraudGuard, we’re helping our clients drive toward zero defects, improve their loan manufacturing process and reduce cost, while increasing the efficiency of audit reviews through technology and automation.” Kevin Wall, president of First American Mortgage Solutions, said, “FraudGuard’s unparalleled data assets make it a stand-out among loan quality management tools. We’re pleased to bring LoanLogics users on-demand access to the critical data insights and automated decision-support services they need to originate high-quality loans with confidence.” Zillow Adds iMessage Functionality

Zillow has launched an iOS 10centric update to its flagship app, now featuring iMessage App Store support. This new iMessage app allows users to quickly access and share photos and information about a home’s key features through text messages with friends–all without leaving the messaging screen. According to the Zillow Group Report on Consumer Housing Trends, home shopping is a shared activity, with 86 percent of people co-shopping with a spouse or continued on page 56

National Mortgage Professional Magazine

Presents

Top Mortgage Employers

National Mortgage Professional Magazine is proud to announce its annual list of Top Mortgage Employers. We polled our readers about their employers based on the following criteria: Compensation Speed Marketing support 51

Technology Corporate culture

Day-to-day management Internal communications

Industry participation Innovation

Based on the above criteria, we weighted factors that are more important to our readers (i.e. our readers told us that factors like corporate culture was considerably more important to them than speed of company). The resulting responses created the Mortgage Employer Company Score (MECS). We have broken down the results into national and regional categories.

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Encompass Lending Group

Pacific Rim Mortgage

Global International Group

Primary Residential Mortgage Inc.

Kings Mortgage Services Inc.

Wallick & Volk Mortgage

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

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Industry Poll Reflects Hope for a Strong Economy and Real Estate Market Under a Trump Administration By Andrew Liput

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hat will a Trump Administration mean for the mortgage industry? Since November, we have read numerous opinion articles written by knowledgeable industry pundits trying to predict what the new President has in store for taxes, small businesses, jobs growth and the Consumer Financial Protection Bureau (CFPB). Most people I speak with seem bullish about the economy and expect significant tax and regulatory relief. The feeling among many is that policies to encourage business growth will create a booming economy and help spur homebuying, thereby fueling a strong mortgage market. Some, however, have fears that there will be an effort to limit or reign-in Federal Reserve influence over the money supply, resulting in significantly higher interest rates that will wipe out a strong refinance market and make homebuying more expensive. Secure Insight recently conducted a national survey of settlement professionals and mortgage industry executives nationwide regarding their expectations for a Trump Administration. A summary of the results follows (complete details are contained in the SSI press release reported on page 98). In response to the question “Whom did you support for President in the 2016 election?” the responses favored candidate Trump: Slightly less than 50 percent of respondents reported voted for him, while just under 40 percent reported voting for Hillary Clinton. When asked “In your opinion, will a Trump Administration improve the overall economic outlook in 2017,” more than 50 percent of settlement professionals answered “Yes,” while 43 percent of mortgage industry executives answered agreed. Asked whether a Trump Administration will improve the business climate in 2017, the majority of all respondents responded favorably. In response to the question “In your opinion will a Trump Administration eliminate or drastically reduce the authority of the CFPB in 2017,” nearly 50 percent of settlement professionals answered “Yes,” but the figure dropped to 26 percent when mortgage industry executives responded. Perhaps most telling were the responses when queried about their business outlook for the New Year. In response to the question “How do you describe your business outlook for 2017,” 73 percent of settlement professionals and 52 percent of mortgage industry executives answered “Positive.” While we do not have a crystal ball, and events sometimes get in the way of planned policies and programs, it does seem that most of us have a good feeling about the next 12 months. Open another bottle of champagne and join me in a toast to a happy, healthy and prosperous New Year for all!

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

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partner, and 13 percent with a friend or other family member. Zillow for iMessage is designed to fit into the browsing behavior of today’s shoppers, who are increasingly searching for homes on their smartphone with the help of their family and friends. In November alone, home shoppers clicked to share homes via text over 1.68 million times in the Zillow iOS app. “Millennials, the largest segment of home shoppers today, bring a deeply social approach to finding a new home unlike anything we’ve seen with the other generations,” said Jeremy Wacksman, Zillow’s chief marketing officer. “They bring all the available tools into the process, including their smartphones, social media and their personal network. This new iMessage feature brings Zillow’s visual search experience alive in a text, giving home shoppers a faster, more delightful way to share the homes they love with family and friends.” Fannie Mae to Launch New Foreclosure Prevention Program

Fannie Mae has announced its new Flex Modification foreclosure prevention program, designed to help families by offering reductions to their monthly mortgage payments. The Flex Modification leverages components of Fannie Mae’s Home Affordable Modification Program (HAMP), which is set to expire at the end of 2016, and the Fannie Mae Standard and Streamlined Modifications, which will be replaced by the Flex Modification in late 2017. The new program was developed in alignment with Freddie Mac at the direction of the Federal Housing Finance Agency (FHFA). The Flex Modification incorporates input from a wide range of industry participants, as well as lessons learned from earlier programs. It is expected to provide a 20 percent payment reduction for eligible borrowers. A high percentage of those who are at least 60 days delinquent would be eligible; the modification could also be an option for those who are current or less than 60 days delinquent in certain situations. The program was shaped by a White Paper published in July 2016

by the U.S. Department of the Treasury in conjunction with the U.S. Department of Housing & Urban Development (HUD) and FHFA titled Guiding Principles for the Future of Loss Mitigation. It laid out five factors–Accessibility, Affordability, Accountability, Sustainability and Transparency–that should form the foundation of future loss mitigation programs. “The Flex Modification is an adaptive program that will allow us to continue to assist struggling homeowners in a changing housing environment and simplify the process for servicers to deliver those solutions,” said Bill Cleary, vice president of Single-Family Servicing Policy for Fannie Mae. “We believe the program is flexible to adjust for regional and even local differences in housing. It provides the greatest amount of assistance to those areas in need.” This new modification will replace the current Fannie Mae Standard and Streamlined Modification offerings on and after Oct. 1, 2017. In the interim, servicers must continue to evaluate borrowers for Standard and Streamlined Modifications following the evaluation hierarchy. Fairway Independent Mortgage Corporation to Launch New Mobile App

Fairway Independent Mortgage Corporation has announced that it will release the FairwayNOW mobile app in January, giving consumers more control of their home loan process, enabling customers to close their loan at their own speed and convenience in as little as 10 days. Through FairwayNOW users can apply for a loan in under 10 minutes, securely scan documents with their phone’s camera, review loan status with real-time push notifications, and calculate loan scenarios with full monthly payments. The app’s cutting-edge technology also facilitates constant communication with the borrower and real estate professional with one-click call or text capabilities. “Fairway is dedicated to providing speed of service with consistent communication to our clients,” said Steve Jacobson, founder and chief executive officer of Fairway Independent Mortgage Corporation. “We want customers to be able to close when they want, so why not offer a solution that allows them flexibility in closing.”

Equifax Offers Employment and Asset Verification Services With Fannie Mae DU Service

The Appraisal Institute has introduced a course to help appraisers work through all seven steps of the appraisal review process and apply them within a simulated, real-to-life assignment. Attendees of the “Review Case Studies–Residential” course will apply the review process learned in “Review Theory–Residential” by walking through a case study that focuses on a two-stage review assignment. The Appraisal Institute created the review designation program in response to the important role that appraisal review plays in risk management and mitigation for

Your turn National Mortgage Professional Magazine invites you to submit any information promoting new “niche” loan programs, new products or any other announcement related to the introduction of a new program, to the attention of: New to Market column Phone #: (516) 409-5555 E-mail: newsroom@nmpmediacorp.com Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

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n National Mortgage Professional Magazine n JANUARY 2017

New Appraisal Institute Course Covers the Review Process

residential appraisal report review assignment; l Evaluate and analyze key sections of the Uniform Residential Appraisal Report through an in-depth case study and work-life review applications l Effectively develop and communicate opinions of completeness, accuracy, adequacy, relevance, reasonableness, appropriateness, credibility and reasons for disagreement; and l Evaluate appraisal errors to distinguish whether they are trivial or material from a review perspective.

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Equifax Inc. has announced that its employment verification services, provided by Equifax Workforce Solutions (a business unit of Equifax Inc.) is now available as part of the Fannie Mae DU validation service. Equifax will now also offer asset verification services, available through its alliance with asset technology service provider, AccountChek Company LLC. The integration of these verification services comes at a time when mortgage lenders are increasingly looking at ways to improve the customer experience, while limiting their risk. The automation of income and employment verification can help to reduce underwriting cycle times by lessening lenders’ reliance on applicant provided W-2s, pay stubs and other documentation. The IRS tax transcript fulfillment services aids lenders in retrieving tax transcripts directly from the IRS and can provide added data around a consumer’s additional sources of income. “The mortgage lending industry has never seen employment and income verification services backed by an unparalleled database and packaged together with asset verification services to support their underwriting need—there is no doubt this is the new standard,” said Craig Crabtree, general manager of Equifax Mortgage Services. “Inclusion of this data in support of the verifications process within Fannie’s DU validation service will offer the mortgage industry a way to improve its process and help to mitigate risk.

many clients and users of appraisal services. “This course provides an excellent opportunity for appraisers, reviewers and other real estate professionals to gain hands-on knowledge that can be applied in day-to-day appraisal review situations,” said Appraisal Institute President Scott Robinson, MAI, SRA, AI-GRS. “The Appraisal Institute is proud to offer this latest addition to its review designation education lineup.” Upon completion, participants should be able to: l Apply the steps of the review process to a two-stage

heard on the street

By Jonathan Foxx

Multiple Advertisements Question: We have an advertisement on our Web site and we also send out an e-mail advertisement that is the same as the Web site ad. Are these considered a single advertisement? If so, what are the obligations for each advertisement?

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Answer Multiple advertisements in any media, such as Web page advertisements on a Web site corresponding to a newsletter blast or in a catalog, are 58 considered a single advertisement if the following criteria apply: l A trigger term is used; l Such term requires a table or schedule in order to provide information regarding a finance charge associated with the trigger term, or any other term is used that appears in the opening disclosures; l The advertisement clearly and conspicuously sets forth or is required to set forth the foregoing table or schedule; and l These advertisements are required to refer and/or provide access to such table or schedule. Put otherwise, single advertisement guidelines apply for any advertisement where a statement of finance charge is required for a trigger term, or disclosure is required in opening disclosures for any other term, where the trigger term or other term appear in a catalog or advertisement, thereby requiring clear and conspicuous reference to the page or location where the mandated table or schedule begins. [12 CFR § 226.16(c)(1), 2010] For instance, in any advertisement where a trigger term necessitates a statement of finance charge—indeed, any other term that appears in opening disclosures pursuant to Regulation Z § 226.6—the advertisement must clearly refer to the page, Web page, or any media location where a table or schedule is found and begins. Therefore, in each online Web site ad and its corresponding newsletter ad, a hyperlink to the table or schedule containing required additional information should be provided for a trigger term requiring a statement of finance charge and/or any other term that appears in opening disclosures. [12 CFR Supplement I to Part 226 – Official Staff Commentary 12 CFR § 226.16(c)(1)-2, 2010] Jonathan Foxx is managing director of Lenders Compliance Group, the first and only full-service, mortgage risk management firm in the United States, specializing exclusively in outsourced mortgage compliance and offering a suite of services in residential mortgage banking for banks and nonbanks. 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 continued on page 107 Compliance@LendersComplianceGroup.com.

dashboards and reporting to help identify areas in the production process that can be streamlined, resulting in lower origination costs. “Through this partnership, LendingQB customers can join Mortgage Peer Network without the challenge of creating data extracts or interfaces. It is a hands-free setup process for the lender,” said Dave Demster, managing partner of Mortgage Peer Network. “Mortgage Peer Network effectively becomes an extension of LendingQB’s overall LOS value proposition and helps lenders of all sizes drive new business.” By integrating Mortgage Peer Network with the LendingQB LOS, lenders gain a method for monitoring their performance and measuring the effectiveness of their operations in comparison to similar lenders. Mortgage Peer Network analyzes performance data generated by LendingQB and enables lenders to select specific peer criteria to provide insight into the true cost and efficiency of their services. “Aligning with Mortgage Peer Network delivers a truly unique value proposition for our customers,” said Tim Nguyen, president of LendingQB. “In the past, only larger lenders could afford to go through the process of integration, implementation and customization that is typical of a solution like this, and even then, it was typically many months before the system was usable. Through this relationship, LendingQB clients will be integrated on the very first day they sign up and will begin to receive Mortgage Peer Network benefits shortly thereafter. Mortgage Peer Network is a solution that will help all our customers.” Buffett Affiliate Acquires Luxury Real Estate Firm

HomeServices of America Inc., an affiliate of Warren Buffett’s Berkshire Hathaway business empire, has acquired Houlihan Lawrence, one of the oldest and largest luxury real estate brokerage firms serving New York City’s affluent northern suburbs. Established in 1888 and based

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in Rye Brooke, N.Y. Houlihan Lawrence operates 30 sales offices in Connecticut’s Fairfield County and in New York’s Westchester, Fairfield, Putnam, Dutchess, Orange and Ulster Counties. Last year, the company reported $6.7 billion of sales volume. The financial terms of the acquisition were not disclosed. The brothers Stephen Meyers and Chris Meyers will continue to serve as president/CEO and managing principal, respectively, while their sister Nancy Seaman will step down from her role as company chairwoman. “Nancy, Stephen and Chris, together with their team of sales managers and agents, have built an extraordinary organization and exemplify a level of expertise and leadership that is second-to-none in the real estate business today,” said Ron Peltier, chairman and CEO of Minneapolis-based HomeServices. “Their culture of integrity and innovation closely aligns with our corporate vision and our emphasis on customer value and results.” With this transaction, HomeServices has nearly 29,500 real estate professionals operating in nearly 570 offices across 28 states. In 2016, the company’s associates facilitated more than $93 billion in residential real estate sales. Ally Returns to Home Loan Market Ally Financial Inc. is returning to the residential mortgage market with the launch of Ally Home, which will offer a suite of fixed-rate and adjustable-rate loans for the purchase and refinance markets. “At Ally, our goal is to ‘Do It Right’ for our customers, many of who have expressed a desire to deepen their relationships with us through additional products to meet their personal finance needs,” said Diane Morais, president and CEO of Ally Bank, the company’s banking subsidiary. “Because a home loan is a cornerstone financial product and the largest market within the consumer lending space, this is a natural next step for Ally.” Ally’s return to the home loan market comes two years after the Treasury Department sold its final

stake in the company, which received a $17.2 billion bailout following the 2008 economic crash. At one point, the federal government owned nearly threequarters of the company, which had put its subprime mortgage business into bankruptcy while refocusing on auto lending. As of Sept. 30, the company had approximately $157.4 billion in assets. Homeward Residential Forms New TPO Division

1st Advantage Mortgage Changes Name to Draper and Kramer Mortgage

continued on page 76

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1st Advantage Mortgage LLC has announced that it has changed its name to Draper and Kramer Mortgage Corp. The name change, which reflects the mortgage company’s role since 2008 as the residential mortgage division of national full-service real estate firm Draper and Kramer, Incorporated, coincides with a recent overarching corporate rebranding at Draper and Kramer. “The 1st Advantage Mortgage name has served us well, but it’s time for a change to reflect how far we’ve come since our start nearly 20 years ago, as well as the history, organization and resources that are behind everything we do as part of Draper and Kramer,” said Paul Lueken, chief executive officer of Lombard, Ill.-based Draper and Kramer Mortgage. “We’ve grown our market share, and we’re a part of something much bigger now. We’re currently licensed in 38 states and growing rapidly, as we’ve recently opened offices in Texas, Massachusetts and Indiana. I’m looking forward to our next chapter and taking the Draper and Kramer name to new parts of the country.” 1st Advantage Mortgage was founded by Lueken in 1997. The Chicago-area company distinguished itself in the mortgage industry with its competitive products, efficient inhouse processing and strong customer service, becoming one of the largest mortgage providers in Illinois. In 2008, 1st Advantage Mortgage joined Chicago-based Draper and Kramer, a privately

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Homeward Residential Inc., a subsidiary of Ocwen Financial Corporation, has announced that it has consolidated its wholesale and correspondent sales divisions under one business unit and leadership structure. The new Third-Party Origination (TPO) Division was designed to provide an improved and streamlined service experience for Homeward’s business partners, while supporting the company’s overall growth plans. Homeward has named industry veteran Michael Moorhouse as senior vice president of the TPO Division. In his new role, Moorhouse will be responsible for both wholesale and correspondent sales operations with a mandate to drive responsible growth. “By combining our wholesale and correspondent teams, we will make it easier for Homeward to meet the needs of our partners across all of our business channels, including broker, emerging banker, non-delegated and correspondent,” said Greg O’Connor, president of Homeward. “Additionally, coverage and service levels will improve with each partner having a dedicated support team, including a field representative, an internal sales support representative and a customer service representative, available at all times.” Moorhouse has 30-plus years of strategic leadership experience in mortgage banking, including production, operations management, marketing, product development and technology development. Prior to joining Homeward, Moorhouse was vice president of Business Development at Icon Advisory Group, where he was responsible for its first mortgage pricing and performance analytics group. During his career, he has also

held leadership roles at many leading mortgage companies. Jason Dumke and John Douglas, both experienced Homeward sales executives, will work closely with Moorhouse on strengthening and expanding relationships with Homeward’s business partners. “Under the leadership of Mike, Jason and John, our TPO Division is committed to improving and building new relationships with our business partners and delivering best in class solutions to enhance our long-term growth,” said O’Connor.

Nine Specifi in Sales and inding the right words to keep your interest to the end of an article is the task every writer accepts when they first touch the keyboard. This article might just be the best idea I’ve ever had to help you become more focused on your success, regardless of what you do for a living. It has been germinating in my brain for years, but only recently become fleshed out well enough to put the words on the virtual paper of my computer screen. You want to be successful, right? You want to achieve a certain level of comfort in your life so that you can feel good about yourself and what you do, right? You’re thinking about when you’re retired and want to travel, buy presents for your kids and grandkids and be able to go out to dinner once in a while, right? Geez, if not, maybe I’m writing this for no one. But assuming you’re going to want to have a nice life, you’ll be reading on. Let me address something here that needs to be understood. I’ve written literally hundreds and hundreds of papers on sales and marketing in just the last year. When I look back at the sheer volume of words that I’ve put into some file, onto some paper and into some publication, it amounts to hundreds of thousands. I love to write. I love to help people. I love to give advice that I think works for you. I’ve been doing this all my life. I don’t tell you that my way is the only way, but I know it is a way. And what you need is a way. Most of what I write is about sales and marketing. You’ll also find videos of many of my ideas that are in so many places on the Web. Find my Mortgage Godfather videos and you’ll see a volume that will take you a

The

Mortgage

Godfather

cific Steps of the Ultimate Guide for Success nd in Life BY RALPH LOVUOLO SR.

great deal of concentration and time to absorb my concepts and philosophy. I’m about sales and marketing, but last night as I was talking to an accountant who has become a friend in the last couple of years, we were discussing sales. He was very specific in telling me that he never thinks about sales. My retort to him was that every single conversation between any two people is about sales. One person is saying something that they want the other person to buy—something as simple as a thought, an idea, concept or memory. We are always selling to someone, every time we open our mouth to speak. Here are the nine ultimate steps to success. They are arranged in specific order with some of the important highlights. I promise you that if you follow them, especially if you engage with a coach who understands and encourages you to actually do them, you must achieve success. 1. Be healthy It is beyond any question you could raise, that your health is the first thing you need to pay attention to. Without good health, it is not possible to focus on the things that follow. You will not be able to proceed to the next step. So, now the questions: Do you take proper care of both your mind and your body? Do you exercise your mind and body? Do you read things that can help you be well-rounded and also help you expend the basics of the tools of your business and future goals? Is your weight under control? Do you eat healthy? Do you think about these things all the time? 2. A positive attitude You need to believe you can. You need to believe in your SELF. You must have a positive attitude before you can achieve what you want. If you need to correct your thinking you might even need to talk to a professional who can help you put your mind in the right place.

You need to have balance in your life. You need to be able to focus. You need to believe that there is nothing in your field of vision, meaning what you see your SELF as becoming, because you are always “becoming” more or less than what you are. It is a fact that if you believe you can or don’t believe you can, you’re right. Here is where I recommend that you listen to the CD by Earl Nightengale called “The Strangest Secret.” My suggestion is that you listen to it as often as three times a week. I promise that you’ll hear different things that will help you with your positive attitude, every single time you listen. I have seen this recording change lives. It changes mine every time I hear it. 3. Goals You must have goals. Without goals, you’re much like Earl Nightengale describes as a ship with no crew, no one to steer it. You need to have a place you want to be. There are four parts to goals: l Specificity: There needs to be absolute and exact numbers of things you want to achieve. If you’re a salesperson, you need to have a specific number of sales you target. You cannot say you want three or four. By doing that, you automatically give yourself permission to fail. You need to pick an exact number … you need to have the number and be specific about your goals(s). l Timely: There must be a time limit that you impose on yourself to accomplish your goal. The time limit can be for a minute, hour, day month, year, decade or more. But there needs to be an end of time that you are pointing to. Time limits, selfimposed and focused must be a determination in your goal(s). l Written: Without writing a goal is just a wish. Otherwise, they are just wishes and thoughts …

nothing but ideas imagined. When a goal becomes real, it is seen, it is in writing and is observable. When not written, it can be changed as often as you think about it. l Realistic and attainable: Not so far out of reach that it is impossible. You’re not going to set yourself up to fail, so the goal needs to be achievable. You might extend the goal as you review it, but when you set up your initial plan, you need to be able to see the probability of getting there. 4. Plan Next is the plan needed to accomplish the goal. The plan should have many heads. An example is that you cannot have just one set of tasks that will accomplish the goal. A clear example of this is that when you are trying to reach out with a sales program to a potential buyer, only visiting and calling that person is no longer the most effective plan. You could be sending e-mails, texts, snail mail and more. All of these touches are effective when crowded into your plan. Your plan must include the component of bringing value. 5. Action Now we have the issue that stops so many people it is just astounding. Fear is the emotion that stops everyone. Fear is the effective emotion that needs to be overcome. Facing the fear and defeating it is a must. Fear is what stops an overwhelming number of people that profess the desire to succeed. Fears such as fear of success fear of rejection (the highest sense of all fears), fear of failure, of defeat, of mistakes, of lack of knowledge. Action includes

persistence, repetition and well thought out understanding that rejection needs to be overcome with innovation. Trying over and over. Never giving up … never. 6. Review Periodically, all goals, plans and actions must be reviewed. When something is not working and you’ve really given the old college try, you need to dispassionately look at what you wanted and did. You’ve pushed yourself to the limit. You’ve consulted with a coach who has helped hold you accountable, and helped you set up the goals and plan in the first place. 7. Reset A new goal, plan, actions? What needs to be reset, retooled, reviewed repeated and no longer used? What is working and needs to be emphasized or refined? 8. Start anew The entire program! Build on the successes and throw away those things that don’t work. Remember that every single marking plan works, but there are some that work better than others. 9. Get a coach You’re way past due to consult with someone who knows what you want to know and will hold you accountable. This is not only comprehensive, it is accurate and workable. Sure, there are so many things that cannot be included in an article of this length. There are so many subtle, inspirational and important details that would be covered by further study, reading and explanation.

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

The Long & Short The Business of Short Sales

Loan Originators: Be Aware of “Disputes” on Credit Reports BY PAM MARRON rustrated consumers looking for solutions to correct erroneous information on their credit report often turn to credit repair companies or their mortgage lender for help. A dispute is the first method tried, but this “fix” is temporary. A requirement to delete the dispute and rerun the automated submission is usually brought to the attention of loan originators who are unaware of the existence of the dispute or where to find it … often weeks before a closing date. When an account is put into a dispute, that credit is temporarily hidden from Fannie Mae, Freddie Mac and USDA automated underwriting systems (AUS), allowing a false AUS approval. But direction from AUS findings or a mortgage underwriter alerts us that the dispute needs to be deleted from the credit report and that the AUS must be run again. If the credit in dispute is adverse credit, the credit score goes down when the dispute is lifted and an AUS approval commonly changes to a “Refer” or “Caution,” or a loan denial. Deleting a dispute is not a one-step solution. The borrower can do the “fix” if they have 45 to 60 days to do so. But often, due to impending contract deadlines, the only option is a Rapid Rescore which can delete the dispute within two to five days. However, this is a costly remedy. Further, under FCRA guidelines, the borrower cannot pay for this Rapid Rescore cost

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and the loan originator or lender must pay. There are four things a loan originator can do upfront. 1. Disputes: Check the entire credit report whether a mortgage, credit card or loan, for any dispute verbiage. Common dispute statements: l Dispute Resolved–Consumer Disagrees (disputes the dispute!) l Consumer Disputes This Account Information l Account Information Disputed by Consumer Go into each of the three repositories (Experian, Equifax, Trans Union) on the borrower’s credit and check which ones have dispute verbiage. These are the disputes that must be deleted. Zero balance accounts normally do not apply, but check with your lender. If you have at least 45 days, retrieve the generic dispute form from your credit reporting agency and have your borrower follow explicit direction from your credit reporting agency on how the dispute can be deleted. If you don’t have this time, retrieve the Rapid Rescore form from your lender and find out what is needed to delete the dispute. 2. Run automated Fannie Mae Desktop Originator(DO)/Underwriter(DU ) or Freddie Mac Loan Prospector Advisor(LPA) and USDA Government Underwriting System (GUS) upfront: Usually dispute

messages are within the findings stating “There appears to be a dispute on the credit report” and direction appears for what needs to be done. 3. Submit a complaint to the CFPB for Short Sale Credit Code Correction: What has worked is to “Submit a Complaint” for a mortgage at the Consumer Financial Protection Bureau (CFPB) Web site (ConsumerFinance.gov/Complai nt). Visual instruction and what to attach is located at HousingCrisisStories.com/Submi t-a-Complaint-CFPB. This is not a dispute, but a request for correction to the credit. Short sale credit is often coded as a foreclosure when the late payments (still) required to get a short sale approved exceeds 120 days. Often, past short sellers have already had an experience where it was learned that their short sale was coded as a foreclosure. Many have gone to a credit repair company or have attempted a correction themselves to get the erroneous credit code changed. A placed dispute temporarily hides the

credit, but does not correct the code. 4. Check “Date Reported” on Credit Report: Make sure the date is the same as the short sale closing date on the HUD-1 closing statement. If the borrower has previously contacted the short sale lender upon learning that their short sale was coded as a foreclosure, that new date which may also include a dispute of the account becomes the “Date Reported,” or a more recent date then the short sale closing date. If the new “Date Reported” is within four years, the wait timeframe required for a new conventional Fannie Mae or Freddie Mac mortgage, this will result in a loan denial in both Fannie Mae and Freddie Mac AUS’s. If this occurs, you will need to find a conventional lender that will do a manual underwrite. Hunting for solutions on this now. “The valuable role that housing counselors can play in helping consumers with credit” is coming soon … stay tuned.

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

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NMP Mortgage Professiona Adam Thorpe President and Chief Operating Officer

Castle & Cooke Mortgage LLC BY PHIL HALL

dam Thorpe is president and chief operating officer at Salt Lake City-based Castle & Cooke Mortgage LLC. National Mortgage Professional Magazine recently spoke with him regarding his career in the mortgage profession..

How did you first get into the mortgage profession? Was this your original career choice? I started my professional career as an attorney in Los Angeles. As an attorney, I was fortunate to work with several independent mortgage companies on transactional projects and compliance matters. I enjoyed the mortgage-related work and the diverse issues I encountered while working with mortgage companies. One of my favorite clients eventually convinced me to come in-house as general counsel. I eventually worked my way up to chief legal officer. It was a great position at a fast-paced and rapidly growing company. I had the opportunity to work with many smart industry professionals on a variety of business and legal issues. These experiences solidified my love for the mortgage banking industry. How did you first become involved with Castle & Cooke Mortgage? As many in the industry are aware, Castle & Cooke Mortgage encountered some challenges with the CFPB in July 2013. The owner

of Castle & Cooke Mortgage, David H. Murdock, is a well-known businessman and billionaire. Mr. Murdock asked me to join the company to help resolve the issues with the CFPB. I first joined Castle & Cooke as chief risk officer with the focus of resolving the CFPB matter and rebuilding the companyâ&#x20AC;&#x2122;s compliance management system. In October of 2014, I was made president of the company. As president, I led the restructuring of the operational side of the business and the development of our current platform. Throughout my employment at Castle & Cooke Mortgage, we have been able to drive remarkable changes at the company and position the company for incredible growth and success. How has your company been able to handle all of the regulatory burdens placed on the industry in the past few years? Like all companies in the mortgage industry, compliance is a major focus at Castle & Cooke Mortgage. My legal background has certainly been a tremendous asset, as the industry has evolved over the past

several years. Castle & Cooke is fortunate to have a robust compliance management system and a fantastic compliance team administering that system. As with other companies, the cost of compliance has increased and we have added a variety of employees to address specific compliance needs. Despite these resources, we are certainly not complacent. We are always striving to be better and continually upgrade our systems and processes. If interest rates continue to increase in 2017, how will that impact the housing world? With the sharp rise in rates, we have seen since early November, refinance volume will be adversely impacted. I expect that the industry will experience declines in refinance transactions, like the ones seen when rates spiked in mid-2013, but on a more pronounced scale. Consumer-direct and refinancefocused originators will certainly suffer. On the upside, the housing market is much stronger today than it was in 2013, so purchase

volume should remain strong. Castle & Cooke Mortgage is a retail originator primarily oriented on purchase transactions, so we are looking forward to a very strong 2017. What do you see in 2017 for the mortgage profession? I believe that technology will continue to become more relevant. Technologies that expand loan originator capabilities, improve customer experience and allow borrowers to self-service will become more prevalent. True emortgages are coming, and technological developments will provide many new opportunities to become more operationally efficient. On the legal and regulatory side, the Trump Administration will likely drive changes at the CFPB and at HUD. I donâ&#x20AC;&#x2122;t believe that the CFPB is going away, nor should it. However, I do think that 2017 will bring a more reasonable approach to working with the industry and that the pace of CFPB-led enforcement actions will slow down. Notwithstanding the changes at the federal level, state regulators will continue to be very active.

onal of the Month

What can the industry do to attract more young people into mortgage careers? The industry needs to do a better job of communicating the tremendous benefits of working in the industry. I also believe that promoting the development and use of technology will attract more young people into the industry. What is the housing market like in your state of Utah? The housing market in Utah remains very strong. Utah’s economy is strong and unemployment is low, and many companies are moving into the state. These factors are driving a housing shortage in many areas of the state. What are some of the challenges facing Castle & Cooke in today’s market? We have built an exceptional company and culture. Our employees are committed to maintaining “excellence” as the standard for everything they do. As Castle & Cooke is now focused on growth and expansion, finding likeminded individuals that embrace our high standards is going to be a

challenge. We have been fortunate to bring many outstanding employees into our ranks in 2016, including 15 new branches across the U.S. We are committed to continuing this trend going forward. Looking back on your career, what do you see as your greatest accomplishments? Transforming Castle & Cooke Mortgage is one of my greatest professional accomplishments. I joined Castle & Cooke Mortgage shortly after the CFPB filed suit against the company in 2013. The CFPB lawsuit presented many unique challenges for the company, spanning all parts of the business (compliance, production, operations, reputational issues, etc.). Overcoming those challenges and resetting the company culture required tremendous sacrifice, resolution and hard work, both by me and a team of dedicated employees. The positive results we generated through these sacrifices and hard work are extremely gratifying. It was very exciting to watch the way we were able to completely transform the way the

company does business in a very short period through the various compliance and operational changes we implemented. It was incredibly rewarding to see our employees embrace these changes, and how the changes resulted in improved employee performance and growth at all levels of the business. It was also gratifying to see many of our producers reach new heights of professional success through the changes we made to the business, and how their families were positively impacted in the process. I truly enjoyed watching the various new members of our team grow together while working toward common goals and objectives. As if to give perfect exclamation points on our efforts to transform the company, Castle & Cooke Mortgage was recognized this year by the Deseret News as number 12 on its list of the Top 57 Companies in Utah (the highest-

ranking Utah mortgage company) and by Utah Business as a Top Company to Work for in Utah. I am extremely proud of these accomplishments and of the many people that I was fortunate to lead as we made it happen. What goals do you have for 2017? Growth and expansion! Our goal in 2017 is to add 15 new branches and more than 150 new loan originators to both our existing and new branches. We are targeting a nationwide footprint by the close of 2018. Outside of work, how do you spend your leisure time? I have three very energetic young boys who keep me on my toes (and also very tired). I enjoy spending time with my family doing many of the outdoor activities that are readily available in Utah. I also enjoy cycling, and we have a great group of people at the company who cycle together.

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

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F O C U S

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Mortgage Industry Employment A Strong Culture Breeds Success By Chad Gomoll

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work every day. You want to make sure that the people who are in your company feel the same amount of passion as everyone else so you don’t lose that sense of camaraderie and the feeling that everyone is pulling for each other. When your employees feel supported and like they are all working towards a common goal, nothing will get dropped along the way. Whether they are an intern, mid-level operations staff, loan originator, or senior leadership, having a strong company culture means there is always someone your employees can relate to and depend on to help them out when the work seems overwhelming. When employees thrive in their environment, they feed off of each other’s energy, are more motivated to succeed, and feel a bigger sense of pride in the accomplishments of the company as a whole. On the contrary, if someone is brought into a culture they don’t feel they belong in, their attitude drags down the excitement and passion of everyone else, they won’t feel like they fit in, and they’ll feel worse than if they had found the right culture fit from the start. Ultimately, that person who

communicate with them. In addition, prove to your employees that they matter by investing in their success and recognizing their value. Sometimes, it’s a matter of finding the right person and then finding their best fit within the company. One person may start in processing in a more datacentric role and they realize their creative talents and skills are better in marketing. Or, maybe they are a member of your funding team that has been cross-trained in other areas and now their interest lies in one of the other departments they’ve helped. Listen to them and help them make the transition. Give them opportunities to develop the skills they are interested in and ones they feel will help them achieve their career goals. Invest in training opportunities, such as in-person seminars or an online training library. The more opportunities you give them to help them develop the career of their dreams, the more likely they are to stay engaged and stay in your company for years to come. Speaking of years to come, remember to create a succession plan for your company. All companies, especially ones that are growing, need to have a plan for that company to go on into perpetuity. If you have spent years building a strong culture

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hen it comes to recruiting, your company culture is your brand. It is a representation of who you are, why you’re in business, the kind of people who work for you, and why they love to work for you. When someone is looking to make a career change, it’s usually not because of the products or services their current company offers. More often than not, it’s because they no longer feel like they are a good fit with the company’s culture and do not see opportunity for career growth. Therefore, it’s essential that your brand, your culture, best represents your company as a whole to attract individuals who will fit in and help progress your company’s growth. A strong culture breeds success, which starts with finding the right people for your culture and keeping them happy. Since we spend an average of one-third of our lives at work, most people want to know that they are spending their time well and doing something meaningful. Most importantly, they want to have fun and enjoy coming to

was the wrong fit from the beginning will leave soon after. When they leave, you have then lost the time and money you invested in recruiting, training, and onboarding, and you now have to invest even more time and money to hire a new employee to fill the vacancy that is available. Not only that, but the vacancy creates more work for the employees you currently have, which can build resentment and disengagement in your remaining employees if filling the vacancy takes a long time. As such, take the time to find the right fit upfront so that you make the best possible investment in your employees. It is not enough to find quality people, though. It is also your responsibility to keep them happy and engaged. Keep your employees involved by communicating the latest company news. Whether it is through monthly phone calls to your branches, an internal eNewsletter that goes to all employees, or face-to-face meetings and events, find a way that works for your company to communicate the most important updates. Consider having an intranet (internal Web site) where you can post daily updates and internal resources. This will help your field staff feel connected to your corporate operations and all employees feel valued because you took the time to

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a strong culture breeds success

and great company, you want to make sure that continues or else the company will slowly fade and drop out of existence at some point in the future. Start with ensuring you have specific career paths in place so that if someone starts working for you, there are opportunities for them to grow and advance within the company. Then, you need to build a bench of people that can step into different roles and backfill roles as needed. By creating specific opportunities for your employees, identifying the employees you believe can grow and move into new roles, and then letting them know they’ve been identified as an employee with potential, that sense of growth and drive breed itself into the culture. Your employees will be able to see that upward momentum in their career and feel more passion for what they do, knowing that there is something

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beyond their current role waiting for them in the future. While you are in the process of building your culture and succession plan, don’t forget about the Millennials. According to the Pew Research Center, Millennials accounted for more than one-in-three workers in the American workforce in 2015. This means they have surpassed Generation X and are now the largest portion of the workforce, and this amount is only going to increase. Millennials are the future, so it is vital that you have the right culture in place to attract them. Millennials need diverse and inclusive cultures that encourage creativity and innovation. Millennials also care about corporate social responsibility, meaning the company takes responsibility for the impact it has on environmental and social wellbeing. They want to know that the company is making efforts to benefit society and not

just its customers and stakeholders. So, in other words, Millennials want their work to make a difference, both for the company and for the greater good of society, and they want to work in an environment where employees are welcome to share their varied experiences and opinions. Further, as stated before, providing training and career growth opportunities are crucial to keeping employees happy, but this is especially true for Millennials. They want to know that you are just as invested in them as they are in you. So what does this mean for those of us looking to attract this generation? In the mortgage

industry, we do a great thing by helping people achieve the dream of homeownership, but what are we doing for our communities beyond that? Are we environmentally conscious? Do we contribute to charitable organizations? Do we encourage our employees to participate in volunteer activities together? Do we encourage innovation? Do we create and encourage a diverse and inclusive culture? Do we provide the training and career opportunities they are seeking? If you’ve answered no to any of these questions, start looking at ways you can make changes. It doesn’t have to be a large overhaul in how you do business, but making small changes over time can make a big difference for this incoming generation.

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

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How to Foster Diverse Talent Acquisition By L. Maria Zywiciel or most of us, a new year means embarking on journey of selfimprovement and dedicating sincere effort to becoming better versions of ourselves. For some, that means making a concerted effort to improve our professional lives by switching employers, jobs or careers. Traditionally, we think of individuals as those who commit to these fresh challenges but employees are not the only ones making and keeping New Year’s Resolutions. Today, many forward-thinking companies are designing strategies to hire and grow in today’s diverse marketplace, with recruiting a more diverse workforce landing a secure spot at the top of the priority list.

do more individual units than our non-Hispanic counterparts. In order to appropriately foster this talent, it will be important to implement a strong compensation

organization makes to connect on a personal level. Take care to train management and employees in cultural competence, participate in community events and make a sincere effort to practice leadership styles that encourage open communication among your team members. 5. Mentorship and professional development Opportunities for professional growth and development will be highly attractive to the Hispanic workforce. Many are first or second generation and likely the first in their families to finish high school, go to college or start a career path very different from their parents/grandparents. As pioneers, we will actively seek out companies that will provide networking and mentorship programs and prioritize our growth within the organization.

plan that rewards good sales behavior as well as high dollar amounts.

1. We are younger The average loan officer is 54years-old, while the average Latino loan officer is between the age of 33-35. This means the traditional ways of advertising a job opening may not work as well as it has in the past. Because of the high percentage of Millennials in this segment, social media is a big driver to how we find out about you, your company and values.

3. We are mostly bilingual Tools to help attract Latino homebuyers and marketing materials in Spanish will make the bilingual professional’s job much easier and enhance a company’s ability to penetrate the Latino market to its fullest potential. As you foster a diverse workplace, it will be critical to diversify the resources available for the consumer as well.

2. We do more units If you are solely looking for the big producers, you will miss out on good, diverse talent. Generally speaking, Hispanic professionals

4. Personal connections matter Regardless of awards or accolades the organization has received, your new hire will care most about the effort the

7. Balance of security and risk Minority populations are known to start small businesses at higher rates than the general population and often won’t shy away from the risks of building a business. The opportunity to create your own destiny is a compelling aspect of careers in the real estate industry. When hiring new candidates, be sure to educate your recruits on how the compensation and work continued on page 70

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you should know (and why it matters) when recruiting Latino talent.

6. No man (or woman) is an island Career decisions are often made at the family level, not the individual. The decision to enter into a career in mortgages, or even to switch companies, is often a family affair. Companies who get to know the important people in the lives of their recruits and invite participation from the larger unit will gain more loyalty and support overall.

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There are many reasons a diverse candidate pool leads to a more creative, productive and engaged workforce but one is that our nation’s demographics are shifting at relatively rapid rates. The Hispanic population, in particular, has seen the most significant growth since 2000. According to the most recent census report, the Hispanic population grew from 12.5 percent to over 16 percent of the overall population in 2010, while the White Non-Hispanic population actually decreased. As those in the real estate industry have experienced, the changing landscape has impacted the consumer demand for housing, but naturally is also impacting the work force. More companies are looking to hire

people who appropriately reflect the communities we serve. (See chart to the right) Some states and cities are seeing significantly larger demographic shifts which leads prudent companies to closely examine how their hiring policies will affect their market share, their level of customer service and ultimately their bottom line in 2017. Here are some things

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how to foster diverse talent acquisition continued from page 69

structure in the industry allows for powerful career autonomy. 8. We value community Show your potential Hispanic recruits how your organization is involved in our or the broader community. We want to know we are part of something bigger. 9. Show us we aren’t the only one Let us meet or speak to others in the company who have a

similar background to us. We want to know that we can make it with you and that the company cares about fostering diversity on multiple levels. 10. Let us be your biggest advocate Once we are hired and succeed, we will tell all our friends and colleagues. As many companies know, networks of employees are the one of the strongest places to find solid talent. One good hire is like a hire of 10!

L. Maria Zywiciel is president of NAHREP Consulting Services, a marketing consulting firm specializing in the Hispanic segment and housing industry. For more information, visit NAHREPConsulting.com.

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Giving Back, to Ourselves and Others By Kerry Wekelo Elam t Actualize Consulting, “giving back” is one of the foundational principles of our corporate culture, starting with ourselves and our employees, then spreading out to our clients. It doesn’t stop there, though. We believe in also sharing our success by “giving back” in ways that are truly helpful to our local community. We did something different in 2016 to focus on giving back for the “thanks and giving” season. Throughout the month of November, I sent a daily e-mail to our employees (including executives and all levels), to remind us of different ways to make a positive impact. These e-mails were also one way that I was able to give back to our employees and we all received joy and positive energy in return! Following is a sampling of what the e-mails contained and this could be done anytime of the year.

Giving back to ourselves When we treat ourselves with kindness and generosity, we learn how to get even better at doing the same for others. As a bonus, happy employees also provide a wonderful customer experience. It was important to provide a few “giving back” messages that helped us focus on our own wellbeing. Many of our themes are focused on nourishing and moving our bodies; therefore, I wanted to change the focus to play and the emotional spectrum. Being playful is critical to recharging from our work and caring for those in our lives. During the month, I sprinkled in some funny cartoons and a reminder that playing is contagious. If we choose to be playful, it is hard for those around us not to engage—as shown by the polar bear and dog in Stuart Brown’s Ted Talk “Play Is More Than Fun” (http://bit.ly/1HA9tqY). We see a wild polar bear ready to fight, facing a tethered dog. But instead of having the dog as a

meal, the polar bear begins to play with her. Why? Because the dog was in a play stance, and the polar bear simply joined in. To counter the playful side, I also wanted to address the opposite as we have had numerous employees suffer loss in the recent months. In his book Joy on Demand, ChadeMeng Tan discusses “The Art of Suffering,” saying “The Art of Suffering Is Love–What if your suffering is so intense that it completely overwhelms your ability to work with it? In that case, you need to learn the Art of Suffering.” During those intense times, Tan went back to his teacher, Thich Nhat Hanh’s teachings, in suffering, which instruct us to completely feel how we feel, be gentle with ourselves and allow all our feelings, and then have compassion. Giving back to our clients Our clients sustain us, motivate us, push us to succeed, and provide so many reasons for us to enjoy our work. For all they give to us, we definitely want to give back to them and make sure they know we don’t take them for granted. Our communications as a firm focus not only on our people, but also our clients. We like to go out of our way to ensure client satisfaction. Instead of waiting for the December holidays, we offered to send company swag and personalized thank you notes when clients are not expecting them. We also sent employees simple reminders of relationship building ideas, such as sending relevant industry articles, going above and beyond on a simple task. We want our clients to know we handle each task with the highest level of importance. Giving back to our community As Daniel Goleman, author of Focus and Emotional Intelligence said, “One aspect of wisdom is having a very wide horizon which doesn’t center on ourselves,” or even on our own group or organization. Actualize

AGE INSDUSTRY EMPLOYMENT

puts that theory into action by encouraging participation in activities that support social causes and help us extend our horizon of awareness. Throughout the year, we give back to the community in creative ways. In the summer, we donated shoes to the Doe Fund so the graduates of the program could go on job interviews. For this â&#x20AC;&#x153;giving backâ&#x20AC;? theme, we encouraged our team to donate gently used coats. For any pictures shared, we put their name in a drawing to win prizes. One of our employees sent in a picture of a suede jacket with fringes she had bought abroad over 20 years ago. Keeping the fire going So the idea of giving back isnâ&#x20AC;&#x2122;t just a â&#x20AC;&#x153;one and doneâ&#x20AC;? activity, we need to keep finding ways to fuel the â&#x20AC;&#x153;giving backâ&#x20AC;? fire. At Actualize, gratitude is a fuel for that fire, and itâ&#x20AC;&#x2122;s endlessly renewable. For the final week of these emails, I asked that employees

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send why they are grateful to compile for social mediaâ&#x20AC;&#x201D;and included mine, which was gratitude for our performance bonus structure. Other employee responses included: l â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;m grateful that I have the resolution to be grateful. Being grateful motivates me and keeps me focused on whatâ&#x20AC;&#x2122;s good in the world.â&#x20AC;? l â&#x20AC;&#x153;Today, I am definitely grateful to have a career that makes me proud; the kindness of strangers during the holidays; the many sites I see daily for donations; health and happiness surrounding my friends and family â&#x20AC;Śâ&#x20AC;? l â&#x20AC;&#x153;â&#x20AC;Ś for working with this great group of professionals that make up the Actualize family. By far the best company Iâ&#x20AC;&#x2122;ve ever worked for â&#x20AC;Ś Thanks everybody for all your help and the positive attitude that you bring on a daily basis â&#x20AC;Śâ&#x20AC;?

â&#x20AC;&#x153;Cultivate the habit of being grateful for every good thing that comes to you, and to give thanks continuously. And because all things have contributed to your advancement, you should include all things in your gratitude.â&#x20AC;? â&#x20AC;&#x201D;Ralph Waldo Emerson

impact when all levels of leadership and employees truly care about making a positive difference. I encourage you to try with your own company something

We have found that even a small company can have a huge

like this month of giving back, as it brings employees together, provides inspiration, and makes a positive difference for employees, your company, and your community.

Kerry Wekelo Elam is managing director of operations and human resources with Actualize Consulting. She may be reached by phone at (703) 868-1506, e-mail kelam@actualizeconsulting.com or visit ActualizeConsulting.com. 71

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Employees Are Such Children By Eric Weinstein

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“The sad truth is that you cannot employ everyone. Some employees will do well, some will not. I liken it to being a driver on a bus. There are some employees you want on the bus,

t its height, Carteret Mortgage, my former company, had more than 4,000 employees. Imagine running a business with so many different types of people with various wants, needs and goals. Simple, imagine you have 4,000 children and it is pretty much the same thing, except without the stretch marks. Nothing prepared me better for running a large company than having four kids. All you want is the best for them, but sometimes, they can be so annoying. One may be great at selling, another, more introverted, loves accounting. One has a wonderful home life, another falls victim to cocaine abuse. Some are mean, some are wonderful. Here are some tips on how I coped:

Matching employees with your company’s corporate culture: Seats on the bus The sad truth is that you cannot employ everyone. Some employees will do well, some will not. I liken it to being a driver on a bus. There are some employees you want on the bus, and some you want off the bus. And some employees, you just have to change their seat on the bus. I have found most people do well when they are doing what they like. If you can get the right person for the right job, things go swimmingly. Maybe you hire someone for one job, but they would really do better in another job. Some are just very disruptive and you need to get them off the bus. Oh, and do not feel all sad when you have to fire an employee. You are just helping them get on the right bus where they will do better and

and some you want off the bus.”

be happier. I once had to fire a licensing employee for doing just a horrible job. He later went back to school as a chef and is very happy now. He told me years later, it was the best thing that ever happened to him. He needed that kick in the pants to motivate him to pursue his true calling. How to keep employees happy: Production contest, suggestion box There gets to a point where some loan officers start doing very well financially and money is no longer the motivating factor it used to be. In times like that, their next goal is notoriety. It is the fame part of “Fame and

Fortune” everybody wants. That is why we had a “Winner List” of top producers for the month. It got to the point where it became very competitive to get on this list. Everyone wants their 15 minutes of fame and to see their name up in lights. People will work hard if you can find the right way to motivate them. Of course, this will not work for your clerical employees. They are more interested in getting their voices heard. That is why I started a “Suggestion Box.” For excellent ideas, I awarded a cash prize and made a big deal about the announcement. Plus, there

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origination and processing. If a loan does more of the cycle that is less that I have to pay someone else to do it. For example, a loan officer should make more if they bring in a loan versus a lead for which I paid. A loan officer who is willing to process his own loan should get more than one where I have to hire a processor. You get the idea. The more they do, the more they are paid. Some mortgage companies are not set up this way. They have a large budget for TV advertising and a corporate jet, but don’t think to compensate their employees a competitive wage. If your company is like that, don’t be surprised when your kids run away from home. Just like my kids, I was very proud of some of my employees and just wanted to strangle others. But they are all your children and the best boss (and father) is one who wants the best for them, takes care of them and loves them.

were some pretty great, money saving ideas there. Remember, always praise in public and criticize in private.

the more you make.” Every loan has a cost component for marketing,

73 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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Formulating a creative compensation programs: Low overhead, high compensation If you are honest with yourself, your employees, like you, are in this for the money. You may say you do this for the love of helping people with their housing needs, but let’s get real for a moment. Don’t believe me, ask any of your employees if they would like a raise. Okay, let’s talk economics for a minute. The amount of compensation available to your people is a function of your particular business model. A certain amount of work must be done and a finite amount of income is generated from it. How is the best way to distribute that money knowing that some particular employees are more skilled, more knowledgeable

or just plain work harder that other employees? Being a capitalist and not a communist, I am inclined to reward more productive (not necessarily the hardest working) employees. Not everyone is the same. Some are willing to work more to get more. Some are happy with what they are doing or don’t want to learn any more. A good system take that into account. That’s is why I developed a system where “the more you work,

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Finding branch managers who produce loans, not problems: Some of the best loan officers do not make the best managers Somewhere along the line, most loan officers get the impression that being a “Branch Manager” is the next step in the evolution of their career. Don’t be a boss that buys into that falsehood. There are certain skills to being a top producing loan officer that do not necessarily translate into being a great manager. Some loan officers keep their knowledge tight to their vest. A good manager freely shares their knowledge and enjoys teaching others. Plus, do you really want to turn your Arabian stallion into a plow horse? You want to analyze your employee’s strength and weaknesses. Support their strengths and staff their weaknesses. If they are great at selling and horrible at clerical why would you want to force them to do more clerical work as some sort of promotion? Find other ways for them to fulfill their dreams. DO NOT raise them to their highest level of incompetency. It helps neither them nor you.

Operation VA SITREP “Your VA Situation Report”

VA Continues to Hit Home Runs! BY RICHARD M. BETTENCOURT JR., CRMS, CMHS hope everyone had a wonderful holiday season and a Happy New Year! I would also like to wish each and every one of my readers a very PROSPEROUS 2017. The other day, I was working on my goals for 2017 and one of the things I wanted to focus on in 2017 was education. A lot of what I do here in Massachusetts is educationbased for my real estate referral partners. As you may or may not know, I’ve written about it before, Massachusetts has the lowest VA Utilization Ratio in the United States. Only 5.8 percent of Massachusetts veterans are using their VA Home Loan Benefit and only 12 percent nationally. Why? Well, there’s many reasons, but I think primarily it deals with a lack of education. It’s not the real estate industry’s fault they’re not kept up to speed with the recent and incredibly beneficial changes in the VA Home Loan Benefit. The National Association of Realtors (NAR) and their state associations rely on us, the mortgage experts, to help them grow their knowledge base! I have a ton of real estate agents I work with on a consistent basis who absolutely and 100 percent embrace the VA Home Loan. Still, there are many out there who are just not aware of the benefits of the VA home loan. So, let me ask a question … if you were asked to stand up in front of a class and educate them on the benefit of a particular service or product, what might be one tool you would use to help convey your knowledge? What could be used so those students could leave your class without a doubt? Give up? FACTS! Mathematical statistics … when they originate from a reputable source, are some of the

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most convincing educational tools one can use when trying to educate a specific group of people on a particular topic. As my dear friend and fellow NAMB Board Member Andy W. Harris is often heard saying, “Math is facts.” He’s right, math are facts and if your math is done properly and those doing the computing are renown industry experts, then it is hard to win any sort of an argument with those professionals. Well, I was able to get some amazing facts recently that, in my opinion, should really be the nail in the coffin of the proverbial statements, “VA home loans don’t close as often as conventional loans,” “VA home loans take longer to close,” or “Don’t accept that VA purchase offer because of 100 percent financing.” I am sure your brain is just racing and you are asking yourself out loud in your office, “Rick … what are these facts and we know you are going to share them.” Of course I am!!! I went to a little-known report called the Ellie Mae Origination Insight Report! We’ve all heard of Ellie Mae. Ellie Mae has been around since 1997 and their monthly Insight Report provides monthly data from an incredible sampling of closed loan applications that run through their loan origination software and their Ellie Mae Network. Now, considering they are the two primary loan origination software platforms used on a regular basis and those two systems are responsible for more than a fair share of the $1.75 trillion in mortgage origination, I’d say they have an outstanding pool which to sample from! I spent a good two hours combing through the data and it was absolutely incredible. Here’s what the report showed us regarding VA loan

originations compared to conventional and FHA. What you and your referral partners need to know: Time to Close Loans On average, VA loans only took an extra three days to close! I think we can all agree on why! VA appraisals! There aren’t enough VA appraisers to turn the reports around. In Massachusetts, it’s taking two to three days for the appraiser to contact the listing agent, another two or three days to inspect the property, and then the VA provides the appraiser up to 10 business days to complete the report. If you had sufficient VA appraisers, I’d be willing to be a lot of money, the amount of time it would take to close a VA loan would be less than conventional and the FHA! Percentage of Loan Applications in Previous 90 Cycle that Close (Purchase Only) This is what I found most spectacular! Starting in July of 2015 through July of 2016, VA home loans closed more frequently than conventional loans! Now, math is facts … right? So, you can actually say to your sellers and listing agents, that you have as good if not a better chance of closing if you accept a VA offer. Profiles of Closed Loans ((Purchase Only) Conventional Loans Average FICO—753 Average LTV—80 percent

VA Home Loans Average FICO—710 Average LTV—98 percent I get incredibly excited about statistics! I never went to college to be a loan originator, I mean, who looks their parents in the eyes in their junior year of high school and says, “Mom and dad, I want to be a loan officer!” I graduated from the University of New Hampshire with a bachelor of science in Water Resource Management, a minor in Earth Science, and a focus in Hydrology! Looking at statistics, disputing a null hypothesis, or proving your research was what I did, so I love numbers! And you know what these numbers tell me? You want to know what my conclusion is based on the data from one of the most reputable companies in our mortgage industry? Here’s my conclusion … even though a veteran is making an offer on a house with no downpayment and has an average credit score 43 points less than a conventional borrower, you have a better if not equal chance of closing that VA loan in the same time frame as a conventional loan. In addition, there is no statistical difference or correlation to the probability of closing a loan based on the size of the downpayment. If that veteran’s offer is the best, there’s no reason not to take it! Please, take the time to check out the data, examine it yourself, and educate those in your community about the benefits of America’s greatest loan option for some of America’s greatest heroes.

Richard M. Bettencourt Jr., CRMS, CMHS of Danvers, Mass.-based Mortgage Network is secretary of NAMB— The Association of Mortgage Professionals. He may be reached by phone at (978) 304-0818 or e-mail RBettencourt@MortgageNetwork.com.

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held company that has been a leader in property and financial services since 1893. While keeping the 1st Advantage Mortgage name, the firm assumed the role of Draper and Kramer’s residential mortgage division and incorporated Draper and Kramer’s existing mortgage operations. Today, the mortgage company has grown its nationwide presence and retail business substantially and is set to fund approximately $2 billion in loans in 2016. Draper and Kramer Mortgage Corp. will retain its corporate headquarters in Lombard, Ill., a suburb of Chicago. Draper and Kramer is headquartered in a new 39,000-square-foot, state-of-the-art office space in Chicago’s downtown Loop district. Alterra Home Loans Expands Footprint With Open of New HQ

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Las-Vegas based mortgage bank Alterra Home Loans is moving toward major growth, with a significant expansion in its office headquarters and expansion into several new states, with the recent grand opening of its new Las Vegas headquarters in Tivoli Village, Nev. In recent months, Alterra has expanded into several new states, bringing its mission of “building wealth through homeownership” into Virginia, Maryland, Pennsylvania and other states. The expansion in office space is one of several strategic growth moves Alterra has made in recent months. “Expanding our foot print in current and target rich markets is one of our primary goals next year and the development of our new headquarters is a key step in reaching our growth goals in the coming years, both in service to our sales force and production quality,” said Alterra Home Loans President and CEO Jason Madiedo. “Growth for Alterra means growth in underserved homeownership, which has been our goal since the very beginning.” Alterra’s new headquarters was consciously designed to be a comfortable place for employees. The space includes ping-pong tables for breaks, an outdoor patio, bean bags throughout an open, loftstyle space and two zen relaxation

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rooms with warm lighting and massage chairs. “It’s all a part of showing that at Alterra, people come first.” Madiedo continued. “Promoting a great culture is a top priority.” National MI Expands Millennial and Multicultural Market Outreach

National Mortgage Insurance Corporation (National MI), a subsidiary of NMI Holdings Inc., is helping to educate mortgage lenders on how to best reach out to multicultural borrowers. The company is educating lenders through speaking engagements, Webinars and social media. For the second year, National MI has joined forces with Kristin Messerli, founder of Cultural Outreach Solutions, which specializes in helping companies reach and serve Millennial and multicultural market segments. Changing demographics in the U.S. are leading to an increase in the number of Millennials, as well as a more ethnically diverse population, according to Messerli. One in three home purchases today are made by Millennials, who comprise the most ethnically and racially diverse generation in the U.S. Hispanics are the fastest-growing group in the U.S. homebuying market, according to a Freddie Mac report. And by 2024, there will be 33 percent more new minority homebuyers, a study by the Mortgage Bankers Association (MBA) showed. Multicultural homebuyers represent an important market for mortgage lenders as they look to grow their purchase loan originations business, notes Christina Bartning, vice president of marketing and product development with National MI. “It’s also critical that private mortgage insurance companies work to help address the multicultural segment, as some of those borrowers may not have a 20 percent downpayment to purchase a home,” said Bartning. Guild Mortgage Recognized as a Top Workplace Guild Mortgage Company has been recog-

along with the development of new strategic alliances and recruitment of top industry professionals to join HomeBridge throughout Northeast Florida. l ComplianceEase has announced the promotion of Dan Smith, CMT from the role of vice president of national sales to senior vice president of sales. l The Mortgage Bankers Association (MBA) has announced that Gene Lugat, PrimeLending Inc.’s executive vice president of Eastern Division, national industry and political relations, has been appointed chairman of the Mortgage

Action Alliance (MAA) for the 2017-2018 election cycle. The MBA has also announced that Rick Arvielo, chief executive officer of New American Funding, has been appointed chairman of the Mortgage Bankers Association Political Action Committee (MORPAC) for the 2017-2018 election cycle. l Alterra Home Loans has added a key strategic growth member to its senior management team, as Rene Rodriguez will join the company as its new chief learning officer. Rodriguez will continued on page 99

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Mortgage Professionals to Watch l Paul Cary has joined Mortgage Network Inc. as a loan officer in the company’s Bangor, Maine branch office, where he will be responsible for assisting buyers and homeowners throughout the eastern Maine region with their mortgage and refinancing needs. l HomeBridge Financial Services has announced the expansion of its retail presence in California,

with a new office in the historic district in the City of Folsom, Sacramento County. Bruce Van Patten, well known in the Sacramento area for his work in the mortgage industry with some of the city’s largest and most respected lenders, has been chosen to lead the new HomeBridge office in the role of branch manager. HomeBridge Financial Services Inc. has also announced the promotion of Jamie Zeitz to the position of branch manager. Zeitz will be responsible for the continued success of HomeBridge’s Jacksonville branch location,

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nized as one of San Diego’s Top Workplaces in 2016 by The San Diego Union-Tribune for the fourth consecutive year. The Top Workplaces Program honors companies that have outstanding culture and business environments highly valued and appreciated by employees. The U-T and WorkplaceDynamics survey went to employers and staff of public, private, non-profit and governmental organizations with 50 or more employees. Rankings are based on anonymous employee responses to an online survey and require a minimum 35 percent response rate to qualify. The online survey ranks employee levels of satisfaction with their jobs, confidence in the future prospects of the company, feelings of appreciation, manager effectiveness and trust in the company. The survey also includes open-ended questions about topics such as their view of company culture and outlook on the company’s future. Companies with the most points receive the top rankings in one of three categories based on the size of the organization: 500 or more employees, 100-499 employees and 50-99 employees. This year, 1,153 San Diego County employers were invited to participate, with 69 companies completing the survey. Guild Mortgage, which employs more than 600 people at its San Diego headquarters, was ranked fifth in the large company category. “I’m pleased to learn that our employees are satisfied with the entrepreneurial culture they’ve worked so hard to maintain,” said Mary Ann McGarry, president and CEO of Guild Mortgage. “Being recognized for our spirit during an era of rapid growth is most rewarding.” Over the last five years, Guild has grown from 75 branches in 16 states to more than 3,300 employees operating from 250 branch and satellite offices in 25 states today. The company generated loan volume of $13.8 billion in 2015, up 86.1 percent from a volume of $7.4 billion in 2014.

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The Effect of Credit Bids on Repurchase Demands

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By David E. Harris

epurchase demands are like rodent infestations. Just when you think you’ve paid enough money to make them finally go away, they pop up out of nowhere to bite you. Echoes from the real estate crash of 2007 are still being felt throughout the mortgage industry, as investors seek reimbursement from mortgage originators as to loans that failed nearly a decade ago. While parties argue about issues such as statutes of

limitation, warranties and representations, the full-credit bid rule is a lesser-known defense that can dramatically affect damages in jurisdictions in which the secured property is auctioned in a nonjudicial foreclosure. What is the Full Credit Bid Rule? In many jurisdictions, when a borrower defaults, the most common means by which the lender acquires the secured property is through a non-judicial foreclosure. No court process is

involved. The lender will first record a “Notice of Default” followed by a “Notice of Sale” setting the date of the auction. The lender generally opens the bidding with a credit bid, and the property sells to the highest bidder. The proceeds are distributed first to the lender (up to the amount of the debt) and any senior liens, such as tax liens. Any overage is paid to the borrower. At the auction, all of the bidders except the lender must proffer cash or its equivalent. The lender is allowed to “bid” up to the

amount of the debt in order to avoid the absurdity of having the lender hand money to the auctioneer which the auctioneer would then hand back to the lender. Otherwise, the lender is treated the same as any other bidder. Some jurisdictions follow the “Full Credit Bid Rule,” meaning that a lender who bids the entire amount of its debt to acquire the secured property is deemed to have been repaid for all purposes. One who acquires property with a Full Credit Bid and later sells the

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In the seminal California case, Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, the California Supreme Court announced a bright line exception to the rule–a lender may pursue a claim against any party which caused the lender to overbid at the auction, such as an appraiser. The primary rationale for the Full Credit Bid Rule is the need for a fair, open, and honest auction process. As one court held: “The purpose of the trustee’s sale is to resolve the question of value

... through competitive bidding … These procedures guarantee that foreclosure auctions are conducted in a fair and open manner, with the property going to the party placing the highest value on it, and that any interested member of the public has the opportunity to participate in setting the price for the property. A lender who intends to later claim that the value of the property was impaired due to waste, fraud or insured damage, but nonetheless makes a Full Credit Bid, interferes with that process by impeding bids from

third parties willing to pay some amount between the value the lender places on the property and the amount of its Full Credit Bid. The beneficiary controls the sale, and the Full Credit Bid by the beneficiary discourages other bidders who may be willing to pay a substantial sum, although less than the beneficiary’s bid. The Full Credit Bid Rule may act to limit recovery by a foreclosing lender who hopes to pursue a legal claim for injury to the property. But if continued on page 85

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property at a loss cannot collect a deficiency, including, for example, from an insurance company owing benefits relating to the property. If the lender makes a “Partial Credit Bid” (i.e., something less than the full amount of the debt), then the deficiency is measured between the amount of the debt and the amount of the bid, not the amount for which the property is resold. The Full Credit Bid Tule has been developed in California more than any other jurisdiction.

Title Agent 2017: The Industry Co any see the New Year as an opportunity. For some, it’s a new Fiscal Year. A chance, in some ways, to start over or wash away the mistakes or challenges of the previous year. For others, it’s a chance to pause and review what went right (and what didn’t quite go right) during the past 12 months and adjust accordingly. As we enter 2017, three industry leaders weighed in with their thoughts on the upcoming year. All agreed that 2016 was a year of change: TRID, Brexit, the

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surprising resilience of the refinance market and, of course, the mortgage industry’s reaction to all of it. The year 2016 could be characterized as a year of mobilization for the entire mortgage industry, as businesses of all sizes adapted to regulations, changing market conditions and a constantly changing (and surprising) forecast for the future. Toss in one of the most hotly contested and surprising presidential elections in decades, and the formula for 2017 is anything but settled. So what do the industry’s best and brightest foresee in 2017?

New headlines in the crystal ball? Not surprisingly, even the election of an administration openly promising to rein in federal regulators hasn’t convinced our panel that somehow the CFPB, TRID, ability-to-repay/QM and similar topics will simply fall out of the headlines in the coming year. Yet, there is a feeling of guarded optimism that we will see positive headlines

in the mix in 2017 as well. “The future looks promising,” said Kandi Jablonski, EVP, national director of title origination/originations, retail title for Chronos Solutions. “We should be seeing headlines such as ‘Homeownership Increasing,’ ‘Purchase Mortgage Applications on the Rise,’ and even ‘Stronger Demand for New Home Construction.’” Jablonski believes 2017 will be, in many ways, a continuation of several positive trends as the industry continues to adapt to not only regulatory pressure but the market itself. “Technology-driven

Continues to Change automation and reduced error rates will be embedded into workflows with best practices,” she observed. “Think FinCen. We will see a continued increase in the continuity of state-to-state laws, as well as a rising trend of title agents investing in digital solutions for closing and recording. There will be an increase in both passive and digital marketing to producers and consumers. Footholds in brick and mortar operations will continue in areas where the demographics reveal joint consumer and producer demand for traditional closings.” Others believe that the tone for

2017 will be set inside The Beltway beginning in late January. “With the presidential race behind us, eyes will be on Washington D.C. to see what changes are in store for the regulatory environment,” said Liz Ray, senior vice presidentregional manager at Title Resources. “It should however be noted that this last refi burst was a surprise, so time will tell if the regulatory environment will have any impact on the refinance and purchase markets. The purchase market has the potential to ebb and flow in pockets depending on inventory

By Timothy Moreland

levels which has been the story for years since the downturn.” It seems clear that, just as it was in 2016, the anticipated increase in the purchase market, as well as the anticipated decline of the refinance market will be an ongoing story. We could consider the perennial possibility of the Federal Reserve raising key interest rates to be interrelated in many ways. Even in November, it was clear that this storyline will continue to lead the headlines for months (if not years) to come. Erika Meinhardt, president of national agency operations at Fidelity National

Title Group, sees this as a key headline in 2017. “Everyone should know the key headline will be: Interest rates will continue to rise, what we don’t know is the Millennials’ response to these rate hikes,” Meinhardt predicted. “The Federal Open Market Committee boosted the Fed’s benchmark rate at its December meeting, and Fed Chairman Janet Yellen made it clear that the Fed is eyeing two or more increases next year. The near-term, predictable result: Refinancing activity has plummeted and will continued on page 84

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title agent 2017

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likely return to its historic levels, representing about one-third of title premium totals, at worst.” Meinhardt believes 2017 will be a busy year for the headlines (and the industry), although much of it will be a continuation of storylines begun in 2016. “We’ll still be talking about regulations in 2017. Even if President Trump attacks regulations as aggressively as he’s promised, federal laws (RESPA, Fair Lending, TRID, UDAP and the like, state regulations and consumerfriendly court decisions aren’t going to disappear,” said Meinhardt. “We will probably see some scaling back of the CFPB’s over-reaching, which would certainly be a relief. But we should also hope the response won’t be a return to the irresponsible lending practices that sank the economy and the housing market in 2006 and could do so again. A healthy balance between reasonable regulations and reasonable consumer protection would be nice–whether it will be a reality remains to be seen.”

Meinhardt also suggests we will see other trends evolve which we’ve either been discussing or experiencing in 2016: l The housing market may slow?: “Rising interest rates are one concern. Mortgage rates are still low by historical standards and the Fed’s anticipated rate increases aren’t likely to change that. But for younger buyers without historical perspective, rates look high in comparison to where they have been, and that perception may continue to be a drag on sales. It is scarce supply, not booming demand, that has been fueling the steady appreciation in home prices. Single-family starts reached their highest level in nine years in October, but they are still running 15 percent below the long-term averages, according to Fannie Mae. ‘People have said … housing is back to normal. But it is definitely not normal from a supply perspective,’ Doug Duncan, Fannie’s chief economist, told

The Wall Street Journal recently. Low mortgage rates and strong employment growth could provide essential support for home sales next year, but it will take a significant increase in home construction to keep this housing recovery going.” l Reverse mortgages will replace refis as a growth sector for mortgage lenders: Stricter regulations have eased consumer protection concerns, so these loans are getting more attention and more respect as a retirement funding source for baby boomers, who won’t have many other alternatives. l More financial institutions will be victims of cyber theft: Cyber insurance is the fastest growing insurance line in the country and with good reason. The thieves are getting smarter, the losses are getting larger and the liability risks for financial institutions are mounting. Wire transfer fraud is a particular concern for title agents, several of whom have been tricked into sending their clients’ funds to someone other than their clients.

So what will the industry look like for service providers such as title businesses in 2017? l Technology. Collaboration. Strategic alignment and alliances. Consolidation. Increased efficiency. None of these are new words or ideas for the mortgage industry. The year 2016 saw a lot of discussion about ways and strategies to transform our businesses to be leaner and meaner as a direct reaction to increased costs resulting from both investor/lender demand, as well as regulatory concerns. Our panel sees more of the same in 2017— with one exception. If 2016 was about talking and planning, 2017 will be more about “doing.” “We expect that shared compliance systems will be offered to those who are able to meet the required standards, said Jablonski. “There are already groups of (title) agencies that are combining efforts to ensure compliance and share costs. I believe we will see solutions provided through ALTA and

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the effects of credit bids

there were no repercussions for making a Full Credit Bid, lenders could manipulate the sale and discourage prospective purchasers who might have been willing to pay just under the value of the lien.” (Najah v. Scottsdale Ins. Co. (2014) 230 Cal. App. 4th 125, 136137, emphasis added) Any other bidder who acquired a property through an unreasonably high bid would suffer the consequences of doing so, and courts have recognized that there is no reason to provide a lender with greater protection than any other bidder. Lenders have thus long been aware of the necessity of making an appropriate bid at auction for fear of losing deficiency claims to which they might otherwise have been entitled.

investor’s acquisition of the property through Full Credit Bids. The court held that the plaintiff’s damages in having to repay its investor were proximately caused by the inaccuracies contained in the loan applications provided by the mortgage originator. However, the court noted that there was no evidence that the plaintiff was not obligated to repay the investor, and thus no evidence that the plaintiff acted as a “volunteer” in repaying the investor. Presumably, a trial

would involve evidence that there was no obligation to repay the investor because the investor would be barred by the Full Credit Bid Rule. The court in Kolodge v. Boyd (2001) 88 Cal.App.4th 349 expressed its opinion that the Full Credit Bid Rule applied only to borrowers or their successors. However, a later California decision held that First Commercial and Kolodge stand for “nothing more than that the Full Credit Bid Rule is inapplicable where the lender is fraudulently or negligently induced to make the bid.” (Track Mortgage Grp., Inc. v. Crusader Ins. Co. (2002) 98 Cal. App. 4th 857, 866.) It

is thus questionable whether First Commercial or Kolodge impact a mortgage originator’s ability to assert the full-credit bid rule as a defense. Federal courts have also taken mixed approaches. A Federal District Court, relying on First Commercial, held that the fullcredit bid rule had no application in the secondary mortgage market realm, reasoning that the full-credit bid rule was designed to protect borrowers, not third parties. (Lehman Bros. Holdings, Inc. v. PMC Bancorp, No. LA CV10continued on page 95

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Full credit bids in the context of repurchase claims The picture becomes a bit murkier in the realm of repurchase demands. Typically, a mortgage company will originate a loan, sell it to an investor, who then resells the loan to another investor. Each of the sales are usually governed by an agreement which provides that the seller will repurchase the loan, or indemnify the purchaser, in the event of any inaccuracies in the loan application. Often the “inaccuracies” are not discovered until well after the default, because the ultimate purchaser then has motivation to find them. The ultimate purchaser will generally demand repurchase or damages from the prior purchaser, and the prior purchaser will then make the same demand to the mortgage originator. If the demand is a true “repurchase” in which no foreclosure, deed-lieu, or short sale has occurred (and there is thus still a loan to repurchase), the Full Credit Bid Rule has no application. If, however, the property was foreclosed upon prior to the demand to the originator, either with a Full Credit Bid or a Partial Bid, the amount of the bid may reduce or eliminate damages. In First Commercial Mortgage Company v. Reece (2001) 89 Cal.App.4th 731, the California Court of Appeal denied the originator’s motion for summary judgment, holding that a plaintiff who had been forced to pay its investor was not barred by

continued from page 81

Partnering With Top Producing Realtors How you can become a better lender by teaming with the best

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By Bubba Mills “If you want to go fast … go alone. If you want to go far … go together.”—African proverb love this topic of collaboration, especially at the beginning of a New Year. It’s the perfect time to take stock of how you do your job. So let’s get started. Ask yourself this question: Are you collaborating enough in your role as a mortgage lender? Think of the instances where you worked with Realtors. Now think about particular Realtors you work with and rate them on a scale from one to 10 (10 being the best) on the quality of your relationship with each one. Then, next to the number, write whatever comes to mind when you think what it is that you truly appreciate about that Realtor. And now the biggie: How much more successful would your 2016 have been if you could have written 10 beside each name? This is critical–surrounding yourself with the right Realtors– the ones who know their stuff inside and out, who understand

you and how you work. Every industry has duds … avoid them like the plague. Now, to attract and keep top producers by your side, consider these five items: 1. Realtors want to partner with you, too. The real estate news outlet, Inman, says in a study that real estate pros prefer working with mortgage brokers over banks and nonbank lenders. Plus, Realtors are leery of big banks’ mobile apps like Chase’s MyNewHome or NationStar Mortgage’s HomeSearch.com. A full 68 percent were either “very uncomfortable” or “somewhat uncomfortable” with them. 2. Think speed and responsiveness. Inman also found the two factors that cause agents to recommend lenders the most were speed and responsiveness. And the two items that make them want to partner with lenders: cultural fit and breadth of products. 3. Give leads. And final bit of data from the Inman study: A whopping 79 percent of Realtors aren’t getting leads from their

lenders, but 74 percent would like them—from lenders they know and trust. 4. Be a full-fledged resource. When I ran my mortgage company in California, I quickly understood I could stand out from the competition by becoming a trusted resource for Realtors. So once a month, I’d take a competitor to lunch (and I picked up the bill) to get a look at their product guidelines and rate sheet. It was research. If I got a call from a Realtor with a request I couldn’t fill, I knew who to send them to. I’d say, “You know, I can’t do that but John over at ABC Lending can do that. I met him a few weeks ago and he told me he does that.” And guess who they were going to come back to next time? You betcha … me. I took the chance out of the

equation by becoming a resource. 5. Get out of your box and help get buyers approved. When I worked in California, I analyzed the market and I found a problem: lenders were leaving it up to Realtors to get buyers approved. I simply asked myself, “Why can’t I provide that service for my Realtors?” Every Thursday at 3:00 p.m. I’d send a status report on where each buyer stood, if they were still in credit repair, waiting for a purchase contract, appraisal situations, etc. Thanks for sticking with me on this article. I hope you take time to consider these ideas and improve your collaboration with Realtors in 2017. I wish you a heartfelt Happy New Year!

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

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HOLIDAY NETWORKING PARTY 2016

Joel Berman from Mortgage News Network and Rey Maninang from Carrington raffle off an XBOX One prize in Irvine

Beverly Frase delivers the Cer Specialist Workshop session

NMP Rings in the Holiday Season With Its

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Annual Holiday Networking Parties National Mortgage Professional Magazine rang in the 2016 holiday season nationwide, as it brought together the industry’s top lenders, wholesalers, technology providers and mortgage professionals at three stops, Irvine, Calif.; Ft. Lauderdale, Fla.; and Long Island, N.Y. at their Annual Holiday Networking Parties. Bringing mortgage professionals under one roof and ringing in the holiday season was the goal of these events, as informative educational sessions kicked each day off, capped off by a trade show. Many thanks to the following sponsors for their generous participation in NMP’s 2016 Holiday Networking Parties: Angel Oak Mortgage Solutions

MBS Highway

CAMP’s Orange County Chapter

The Mortgage Godfather

Carrington Mortgage Services

NAHREP

FAMP’s Broward Chapter

nmpU

Flagstar Bank

Paramount Residential Mortgage Group (PRMG)

HomeBridge Wholesale

Quicken Loans Mortgage Services

Indeed Abstract

REMN Wholesale

LenderHomePage

U.S. Marines/Toys for Tots

Carrington Mortgage Services XBOX One system at the Holid Party in Uniondale, N.Y.

The crew from Angel Oak Mor Irvine to detail their product o

rs the Certified Military Home session in Irvine, Calif.

Reps from the FAMP’s Broward Chapter along with members of the U.S. Marine Corps were on hand in Ft. Lauderdale to collect for the Toys for Tots program

The crew from Quicken Home Loans gather for a photo at the DoubleTree by Hilton in Ft. Lauderdale

REMN was well represented in Irvine at the California Holiday Networking Party

Frank Garay of National Real Estate Post presents “Surprise! You May Not be as Good as You Thought You Were”

Carrington Mortgage Services’ Matt Evans, Patty Cochran, Rey Maninang, Mike Donaldson, Rob Parsley, Shawn Yard and Bill Lendin pause for a photo in Irvine, Calif.

n National Mortgage Professional Magazine n JANUARY 2017

Oak Mortgage Services were on hand in product offerings

Ron Vaimberg of nmpU in Irvine at the Atrium Hotel during the California Holiday Networking Party

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Services raffled off an the Holiday Networking N.Y.

Reps from PRMG pause for a photo during the Holiday Networking Party

Upfront Fee Disclosures: Still a Major Pain Point in the Mortgage Process By Jim Paolino

t’s been over a year since the “Know Before You Owe” regulations have gone into effect, marking the largest change to the mortgage and closing process in more than 30 years. Many reports have indicated stabilization across the industry with the average closing time returning to 46 days. However, major pain points in the new TILA-RESPA Integrated Disclosure (TRID) process remain. The cost to originate loans is at an all-time high and there remains a larger than normal percentage of defects preventing loans from being resold on the secondary market. Many of these problems are caused in the very beginning of the process by companies failing to accurately quote closing costs to the consumer.

Inaccurate manual processes are still used After a loan application is received, lenders have three days to provide the borrower with a Loan Estimate form that includes closing costs and total costs paid during the life span of the loan. Because lenders do not control many of the costs on this form, they need to accurately disclosure costs across the various service providers they work with throughout the closing process. Many lenders still rely on manual processes to obtain closing costs including phone calls, unanswered emails, and in some cases, even fax requests. Some continue to grossly over-estimate the closing costs, hurting the ability for consumers to shop for the best provider.

Risks of inaccurate fee disclosure Fees disclosed on the Loan Estimate form must be within a certain tolerance of the final fees given to the consumer on the Closing Disclosure (CD). Many fees, such as title insurance premiums and origination costs, need to be within 10 percent of the value originally disclosed. Some fees, such as the transfer taxes charged by state and local governments, need to match exactly what is disclosed. Incorrect fee disclosures can lead to closing delays, cost of missed tolerances and inability to resell mortgages. In many cases, lenders push this risk to

their settlement agents for an accurate disclosure of these fees. “Many of our lender clients utilize our online rate calculator for all loan applications they receive, regardless of which company eventually closes the loan,” said Regina Braga, chief operating officer of Res/Title, a national title agent based in Rhode Island. “Having a settlement agent that stands behind a quote provides peace of mind when providing the Loan Estimate to the consumer.”

Consequences for the borrower and lenders If a fee falls out of tolerance, several things can happen, hurting all parties involved. In some cases, lenders must redisclose fees to the consumer in a new Closing Disclosure form, restarting the seven-day waiting process and further delaying the closing. In some cases, lenders or settlement agents must reimburse the consumer if the actual costs are above those originally quoted. These costs of missed tolerances, sometimes in the thousands of dollars, eat into increasingly thin profits across the industry and can become very costly if repeated for multiple files. Fees falling out of tolerance between the Loan Estimate and Closing Disclosure forms can also be flagged as TRID errors and make loans unable to be resold on the secondary market.

Fixing the issue upfront Despite all the issues surrounding upfront fee disclosure, lenders are not taking advantage of the tools readily available to accurately quote closing costs. It is an easy problem to solve using data aggregators and closing cost calculators. These solutions allow lenders to quote accurate, guaranteed fees as soon as a loan application is received. Lenders can set up their settlement service providers proactively, eliminating the need for phone calls and fee requests via e-mail. By integrating these tools in their Loan Origination Systems (LOS), lenders can minimize both the time needed by their staff to process loans and minimize the risk of manual errors. Like most things, it pays to get it right the first time.

Jim Paolino is CEO and founder of LodeStar Software Solutions, a national provider of innovative compliance technology for the mortgage industry. LodeStar has recently become part of Lenders Integrated Solutions, a provider of title and technology services. He may be reached by phone at (201) 683-7277 or e-mail JPaolino@LSSoftwareSolutions.com.

NCRA’s 24th Annual By Terry W. Clemans

02 01

CAPTIONS 01-NCRA Incoming President Julie Wink, Past President Bill Bower and Executive Director Terry Clemans 02-CoreLogic’s VP Deputy Chief Litigation Counsel Thomas Garber with Michael Saltz of Jacobsen, Russell, Saltz, Nassim & De La Torre 03-Bryan Greene, HUD’s Deputy Assistant Secretary of Fair Housing, addresses attendees 04-The packed crowd during the General Session during NCRA’s Annual Conference 05-Steve Hamby of TransUnion keeps attendees up to date on the latest at the credit reporting agencies 06-The informative HUD Panel Discussion during NCRA’s Annual Conference

CRA’s 24th Annual Conference is now in the history books, leaving Texas-sized memories from our visit to San Antonio. This year garnered more than 130 credit reporting professionals representing more than half of the mortgage credit reporting industry and the nation’s leading resident screening companies. The conference kickoff featured a welcome reception on the 22nd floor of the Hilton Palacio del Rio, the same night as the World Series Game 7 in which the Chicago Cubs ended their 108-year championship drought. As a 21year Cubs season ticket holder, I still have a hard time believing it finally happened and can’t write about it enough! After the party, the next day we opened the Conference with the annual changing of the association’s

officers. Thank you to 2016 President Bill Bower of Contemporary Information Corporation in California for a great year of leadership! Incoming NCRA President Julie Wink of DataFacts in Tennessee and Vice President Paul Wohkittle of CIS in Maryland, will provide a smooth transition of NCRA’s leadership. A full list of NCRA’s board of directors is listed each month on page 6 of National Mortgage Professional Magazine. Master of Ceremonies Sonny Melendez made sure the highlights of the agenda were kept on track starting with the keynote address by Davy Tyurski, author of Profit InnerCircle, sponsored by TransUnion. Davy is America’s CPO, chief profit officer, and delivered an informational motivational address that was wellfocused on the service industry. Speaking of TransUnion, Steve Hamby and his team, along with David Proctor and the Experian

team, delivered information packed sessions about developments at each of their respective national credit reporting agencies. As usual, the federal government was well-represented again this year at NCRA. Five agencies (HUD, CFPB, FTC, IRS and the SSA) provided eight speakers this year. The CFPB’s Jonah Kaplan and FTC’s Robert Schoshinski spoke to the group on a variety of issues as the primary regulators for our industry. The IRS’s David Tyree and the SSA’s Curtis Miller (via Webinar with several other SSA employees) each discussed access to critical data from their respective agencies that the mortgage industry needs to close loans. NAMB’s Olga Kucerak, a San Antonio native and nationally recognized lender, provided lender insights into that session, along with NCRA Legal Counsel Christi Lawson. The final and most talked about

session with the federal government was led by Bryan Greene, HUD’s Deputy Assistant Secretary of Fair Housing, regarding the changes to HUD’s perspective on using criminal records in rental housing decisions. HUD requires background checks with criminal records for access to housing authority leases, while the fair housing side of HUD also looks at the use of background checks as potentially discriminatory when considering the Supreme Court decision on disparate impact. After opening comments from Bryan, a panel of industry and consumer advocates spoke passionately about the conflict created by trying to find the critical balance in serving the conflicting needs of safe housing and fair access to housing when looking at criminal records. The panel included Marie Clair Tran-Leung from the Shriver Center for Economic Justice, Tracy

al Conference Review

07-Olga Kucerak, secretary of NAMB—The Association of Mortgage Professionals, was on hand for the armadillo races 08-NCRA Legal Counsel Christi Lawson provides a legal update to Conference attendees 09-Gwen Volk of INFOCUS Inc. during the panel discussion 10-The FTC’s Robert Schoshinski spoke to the group on a variety of issues 11-NCRA Executive Director Terry Clemans with Attorney Michael Saltz 12-A great time was had by all, as attendees pause for a photo with a Texas Longhorn 13-Jonah Kaplan of the CFPB shed some light on the inner workings of the Bureau 14-Chris Story Band entertained throughout the evening at the Rio Cibolo Ranch at the NCRA’s Texas BBQ 15-Sonny Melendrez served as emcee for the NCRA’s Annual Conference

McCracken from the National Community Reinvestment Coalition, Bill Bower from Contemporary Information Corporation, Michael Saltz of Jacobsen, Russell, Saltz, Nassim & De La Torre, and Gwen Volk of INFOCUS Inc. The session was so passionate and intriguing, we shortened lunch to allow it to continue as no one wanted the debate to conclude. And of course we cannot forget our attorneys, in addition to Mr. Saltz from the HUD session, NCRA’s Legal Committee Chairperson Christi Lawson of Foley & Lardner spoke to the group about the various federal and state law changes that impact credit reporting. NCRA was thrilled to also have CoreLogic’s VP Deputy Chief Litigation Counsel Thomas Garber participating in the sessions. These experienced litigators provided incredible

insight into the troubled litigation waters we currently navigate. Robert Tennessen provided insights into the activities of the Uniform Law Commission, who are working on standardizing the criminal records variations across the states to assure a more consistent records evaluation. With the election looming just days away, Maureen Thompson of the Hastings Group in Arlington Va., and NCRA lobbyist, provided thoughts about the election and either White House; Clinton II or Trump. We all now know how that turned out … NCRA introduced new strategic alliance partners and our consumer education video series in San Antonio. The education and compliance committee went to Times Square this summer and started recording a “Man on the Street” format credit education video series. These videos being produced by the Mortgage News

Network will be free from any sales hooks, providing basic consumer credit information. Dan Lier, a very popular keynote speaker from NCRA’s 22nd Annual Conference in Palm Springs introduced his Sales Mastery and Peak Performance program that NCRA members can use to train their staffs. For fun, the feature event for networking and entertainment had to involve BBQ in Texas! Mesquite smoke, the Chris Story Band, armadillo races, and photos atop a 2,000 lb. live Texas longhorn were just part of the evening events at the Rio Cibolo Ranch sponsored Meridian Link. You need a little

R&R to break up two long days of educational sessions and a little Texas hospitality was the perfect way to mix it up. Friday’s fun continued with the annual awards lunch which featured CreditXpert’s Peter Fitton receiving the Directors’ Award and CIS’s Angie Jenkins receiving the President Award. Both of these NCRA members served their company, the association, and the credit reporting industry with distinction and outstanding service in 2016. Next year will be a milestone event, NCRA’s 25th Anniversary Conference the first week of November in Baltimore’s Inner Harbor. Stay tuned for details …

Terry W. Clemans is executive director of the National Consumer Reporting Association (NCRA). He may be reached by phone at (630) 539-1525 or e-mail TClemans@NCRAInc.org.

title agent 2017

Predictions for 2017 By Andy W. Harris, CRMS

believe many of us would agree that this year will be a transition year for the mortgage industry at many different levels. We just came off a historically successful origination year with interest rates at historic lows and technology advancing at a rapid pace. We have started to move beyond an extremely conservative lending climate and common sense is beginning to re-enter the mortgage market. The Trump Administration has its sights on regulators as does the media with uncovering new lawsuits, issues and inside secrets. Moving into 2017, let’s gather some predictions from you for next month’s edition of OrigiNation. Let’s be interactive and please search for and join the OrigiNation Group on Facebook and send your predictions to AHarris@VantageMortgageGroup.com. The topics can cover any area of our industry, from technology, lender and agency guidelines, politics, regulation, origination channels, etc. Let me know what you think the biggest changes will be in 2017 and look out for your prediction in next month’s edition!

Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and past president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431, e-mail AHarris@VantageMortgageGroup.com or visit VantageMortgageGroup.com.

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other associations that will offer compliance and reduced cost alternatives in order to maintain industry continuity.” Meinhardt agrees that using technology to meet compliance requirements is not optional. “The question is not how title agents will manage their compliance costs, but how they will manage their compliance requirements, and how they will survive in this industry if they don’t. Lenders are insisting on the timely, accurate delivery of data in a secure fashion, and they are rapidly culling agents who aren’t able to meet that requirement,” Meinhardt said. “Compliance requires technology.” Another issue which may emerge in 2017 might be the decline of qualified title abstractors and examiners. Ray notes that some in the industry are already planning for this. “It takes a trained skill such as abstracting to compile any and all legal documents that affect the property,” said Ray. “We partner with our title agents and offer succession planning development to help them hire and train for this specific trait. We have also witnessed some agents approach community colleges to attract a new generation of talent to our industry.” Others foresee a dramatic transformation in the way we perform title searches. Not surprisingly, it involves technology and a revision of the way in which the typical abstractor works. “Digital closings are the future for real estate and will end up reducing the costs of title agents and underwriters,” said Jablonski. “Technology and automation will be pushed down to the counties and municipalities, enabling time and cost efficiencies at the municipal level and for the producing agent. With automation and electronic data capabilities the agents will be able to employ remote abstractors that will be extremely productive. I also believe implementation of OCR technology at the agent level will reduce the cost per transaction, which mitigates the error rate and increases internal processing metrics.” Meinhardt agrees with

Jablonski, and goes one step further, suggesting the foundation is already in place for this transformation. “Many title agents already rely on their underwriters or other third parties by outsourcing production or finding back titles where allowed,” Meinhardt observed. “In areas where abstractors’ fees are high and where demand outstrips supply, lenders have factored the higher costs into their pricing. Long-term technology pressures will lower these costs and have already begun to do so in many areas.” If 2016 was about preparing for consolidation, automation and improved process, our panel agrees that 2017 will begin to see the results of these preparations and their impact on the market. “I anticipate title agents will continue to hunt for new and improved technology to keep up with changing regulations as well as changing lender and consumer’s needs,” said Ray. “Things are changing fast in the world we live in and agents should rely on their underwriter partners to enhance growth, stay competitive and understand what options exist in the marketplace to them.” “The title industry will be smaller,” said Meinhardt. “Consolidation is unavoidable. Some title agents will acquire less profitable ones, to achieve the scale and efficiencies they need; some smaller, less successful agencies will no doubt disappear. But there will be exit strategies for the successful ones.” Meinhardt also dismisses the prediction that title agents will somehow soon be obsolete, noting that her own title underwriting business relies heavily on independent agents, and that title underwriters in general would be foolish to overlook the value those agents bring to the table. “I’ve been hearing about the demise of agents for the last 25 years,” said Meinhardt. “That is not going to happen. Title agents as we know them aren’t going to disappear. Survival of the fittest doesn’t mean survival of the biggest or the strongest; it means survival of those who are best able to adapt to a changing environment.”

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

the effects of credit bids

07207 JAK, 2013 WL 1095458, at *13–14 (C.D. Cal. Mar. 8, 2013).) However, on appeal, the Ninth Circuit, while affirming the ultimate disposition of the case, did so for expressly different reasons, emphasizing that Lehman was not the entity that made the Full Credit Bid. (Lehman Bros. Holdings v. PMC Bancorp (2015) 612 F. App’x 885, 886-888.) It seems evident that the Ninth Circuit would not have made these findings had it agreed with the District Court that the Full Credit Bid Rule does not apply in the secondary mortgage market. In addition, the Ninth Circuit seemed to be following First Commercial and Kolodge, both of which were essentially criticized by subsequent California authority.

actually made the Full Credit Bid, or stands in the shoes of the bidding party (i.e., if the plaintiff is proceeding on an assignment of claims from the foreclosing party), the Ninth Circuit’s decision in Lehman indicates that the rule should apply. In either case, however, the mortgage originator would seem to have a strong public policy argument that the rule must apply–namely, that no one should be allowed to undermine the nonjudicial foreclosure process by

placing a credit-bid and later claiming that its own bid was wildly inflated, because the inevitable result of such a bid would chill other bidders and thus disable the fair and open aspect of the auction process. In other words, if a foreclosing party is given a “safety net” (the option to collect additional funds after a full-credit bid), that party will not have the same motivation to bid fair market value

as will other bidders, all of whom would bear the brunt of any overbid. Clearly, an opening bid wildly in excess of fair market value will render the “auction” meaningless. It would thus seem to make sense both equitably and logically to hold a party placing a credit bid to the same standard as every other bidder–to determine the value of the foreclosed property and bid accordingly.

David E. Harris is a litigation shareholder at Miller Starr Regalia, where he focuses on complex multi-party litigation that flows from a broad range of real estate and commercial disputes. He may be reached by e-mail at David.Harris@MSRLegal.com.

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So does it apply? The notion that the Full Credit Bid Rule is designed to protect only borrowers is simply incorrect. Alliance Mortgage was a nonborrower case, and had the California Supreme Court wanted to rule on the basis that the rule protects only borrowers, it presumably would have said so. In Bank of America v. Quackenbush (1997) 56 Cal.App.4th 1167, the California Court of Appeal squarely held that the Full Credit Bid Rule applies with equal force in disputes between a lender and a third party. There are a multitude of other cases affirming that a Full Credit Bid precludes liability against nonborrowers (absent the exception stated in Alliance). These include not only Track Mortgage, Altus, Michelson and Naja, discussed above, but also Universal Mortgage Co., Inc. v. Prudential Ins. Co., 799 F.2d 458, 460 (9th Cir. 1986) Rosenbaum v. Funcannon, 308 F.2d 680, 684 (9th Cir. 1962); Sumitomo Bank v. Taurus Developers, Inc. (1986) 185 Cal.App.3d 211, 219- 220; and Pacific Inland Bank v. Ainsworth (1995) 41 Cal.App.4th 277.) The answer to whether the rule applies in a repurchase case may depend on context and jurisdiction. If the plaintiff is a middle man who was forced to indemnify an investor who foreclosed, the plaintiff will argue that First Commercial and Lehman Bros. compel a finding that the rule does not apply on the grounds that the plaintiff did not make the bid (though the originator could still argue that the plaintiff could have asserted the rule as a defense against the foreclosing party, and thus was not compelled to pay anything). If the plaintiff

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How Every Originator Can Have a Terrible 2017 By Brian Sacks

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lease take a minute to just re-read the title to this article. I am betting that it made you stop didn’t it? In fact , I know it did since you are actually reading this. This is a very important lesson. In order to stand out and get noticed, you must be different. Not just different in your approach, but different in your messaging. The truth is that we all look alike, sound alike and act alike. Much of this has to do with Dodd-Frank and the CFPB’s rules, but this has been going on for the past 31 years that I have been in the industry. It is so prevalent that I actually created a name for it.

West Virginia marketing I hope no one from West Virginia takes offense because none is intended. But think about it for a minute … when you started in this

business, you probably looked around at what everyone else was doing and started doing the same things, saying the same things and then it becomes a matter of who can spend the most or scream the loudest. l We have great rates. l We can close your loan in three seconds. l We provide great service. l We have great programs. Does any of this sound familiar? Now take a minute and think about why a client should use you? If the answers you have are the only ones in your arsenal, you will not be having a great 2017? Why? This year will likely prove to be a bit more challenging than 2016 was. The day of refis being plentiful and rates cooperating are pretty much over.

2017 will be a purchase year This will the transition year back to a regular business based on purchases instead of refinances. That means if you were doing a great job in 2016 and were 70 percent purchase and only 30 percent refinances, your income will drop by 30 percent if you are not able to replace it. How do you replace it? Going back to the title of this article, you need to stop sounding, looking and acting like everyone else. Stop telling people how great your rates are and what a good job you do. I am going to share a real plan with you, so grab a highlighter. The step by step process for a great 2017 1. You must create a plan As I travel around the country, I hear loan officers telling me how they want to be successful. But success differs for each of us and

only you can define what success means for you. Now let’s pick a figure and figure out how to get there. Suppose you want make $100,000 and you earn 50 basis points on a loan and your average loan is $250,000. The simple math is that you need to close 80 loans in 2017 or about seven loans per month. How are you going to do that? Here’s how my very own plan looks: l Three loans from direct marketing to renters l Seven loans from real estate agents/builders l Two loans from past clients/referral sources (CPA/attorney/planner) l Three loans from direct marketing to Boomerang Buyers Now, you have a plan and a firm idea on the income you want and how it will happen. But wait … we’re not done just yet. Each and

every month, you need to look at this list and see if it all turned out the way you planned? Was it better or worse? Why and what do you need to work on this coming month? 2. You must control the buyers If you have read any of my articles, you realize how these five words are. If you are going out begging real estate agents and others for business and telling them how great your service and rates are, you simply will not succeed. The truth is that whoever controls the buyer controls the transaction and the income of everyone in the transaction. Think about that and let it sink in. Why do you chase real estate agents and others? Because they have buyers and you want business. But what if you flip that on its head and you (the originator) controlled the buyer. You would now have real estate agents, insurance agents and title companies chasing you. This is exactly what I do every month and show my members how to use this exact system in the RentersIntoLoans.com system. Life becomes fun again when you have a predictable system for generating new business and have others soliciting you. Sure as heck beats begging … doesn’t it?

One of the biggest niches in 2017 will be Boomerang Buyers, who had a credit challenge during the “meltdown.” There are now 7.3 million of them ready and able to buy again.

monitoring your progress on the way. Never let any minor setback throw you off. Just stick to your plan and adjust as is needed. Now stop reading and get to work and my best wishes for a prosperous 2017.

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

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Here’s my success recipe l Pick a niche l Become the expert l Let everyone know about it

4. You must execute This should go without saying, but all the plans in the world are worthless if you don’t execute. It all starts with the plan so you know where you are headed, and then

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3. You must be an expert in a niche that is in demand We are truly one of the few industries that doesn’t grasp this concept. Therefore, we all look, sound and act alike. Do you hate rate shoppers? We all do, but the only reason a client asks your rate is because they have no other way to distinguish us from the others. But when you are an expert, that whole situation changes. Think about what happens when you go to a doctor because you have a problem that needs a specialist. You don’t question their advice. You don’t question their prices, you don’t ask them to meet you in the evening or on a weekend. Best of all, once you have seen a medical specialist for your problem, you generally do exactly what they say. It’s no different in our industry.

Best of all, there are very few originators going after them so very little competition. In fact, I created the whole BoomerangExpert.com system to show my members the step-bystep way to do this as well. Then, you can take these buyers and give them to real estate agents as you see in the plan above. You could also go to builders, realty companies, credit unions and other loan officers to generate new deals. Most of these companies will not deal with Boomerang Buyers, but they are an excellent source for you to establish yourself as the local Boomerang Expert.

Secure Insight Surveys Settlement Agents and Lenders on the Trump Administration

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ecure Insight has announced the results of their latest mortgage industry survey conducted of settlement professionals and mortgage industry executives nationwide regarding their expectations of a Trump Administration’s impact on the economy and the real estate market. In response to the question “Whom did you support for President in the 2016 election?” the following results can be reported:

l 49 percent of settlement professionals voted for Donald Trump, while 35 percent voted for Hillary Clinton, while the remaining responses split between other candidates. l 48 percent of mortgage industry executives voted for Donald Trump, while 31 percent voted for Hillary Clinton, while the remaining responses split between other candidates. In response to the question “In your opinion, will a Trump Administration improve the overall economic outlook in 2017,” the following results can

be reported: l 53 percent of settlement professionals answered “Yes,” while 27 percent answered “No” and 18 percent responded “I Don’t Know.” l 43 percent of mortgage industry executives answered “Yes,” while 26 percent answered “No” and 30 percent responded “I Don’t Know.” In response to the question “In your opinion, will a Trump Administration improve the business climate in 2017,” the following results can be reported: l 58 percent of settlement professionals answered “Yes,” while 22 percent answered “No” and 18 percent responded “I Don’t Know.” l 48 percent of mortgage industry executives answered “Yes,” while 29 percent answered “No” and 18 percent responded “I Don’t Know.” In response to the question “In your opinion, will a Trump Administration eliminate or drastically reduce the authority of the CFPB in 2017,” the following results can be reported: l 47 percent of settlement professionals answered “Yes,” while 11 percent answered “No” and 40 percent

responded “I Don’t Know.” l 26 percent of mortgage industry executives answered “Yes,” while 17 percent answered “No” and 52 percent responded “I Don’t Know.”

“More Robust,” while 31 percent answered “Less Robust” and 39 percent responded “I Don’t Know.” Finally, in response to the question, “How do you describe your business outlook for 2017,” the following results can be reported: l 73 percent of settlement professionals answered “Positive,” while 21 percent answered “Negative” and six percent had no opinion. l 52 percent of mortgage industry executives answered “Positive,” while 26 percent answered “No” and 22 percent had no opinion.

In response to the question “In your opinion, will a Trump Administration’s policies cause an increase in interest rates in 2017,” the following results can be reported: l 52 percent of settlement professionals answered “Yes,” while 18 percent answered “No” and 29 percent responded “I Don’t Know.” l 39 percent of mortgage industry executives answered “Yes,” while 13 percent The survey was conducted Jan. answered “No” and 48 percent 1-9, 2017 and sent to 9,456 responded “I Don’t Know.” settlement professionals and In response to the question “In 1,137 mortgage industry executives and a total of 1,283 your opinion, will a Trump responses were calculated on Administration’s policies mean a Jan. 10, 2017. Percentages were more or less robust real estate rounded to the nearest whole market in 2017,” the following number for reporting results can be reported: convenience. This survey is one l 48 percent of settlement professionals answered “More of a continuing series of industry polls conducted by Secure Insight Robust,” while 24 percent over the past few years to gain answered “Less Robust” and 28 percent responded “I Don’t the pulse of the industry on issues important to the settlement Know.” profession and mortgage industry l 26 percent of mortgage generally. industry executives answered

heard on the street

Your turn National Mortgage Professional

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

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move to the role of chairman and CEO, elevating Comosa to president. l LRES has announced that David Sober has been appointed as its new vice president of national sales. l Primary Residential Mortgage Inc. (PRMI) has announced the opening of a new branch in Vancouver, Wash. This new branch brings in industry veteran Deanna McClelland and her team, including Andrea Estrada

and Jordan Lipinski. l VIP Mortgage has announced the opening of its newest Tucson branch, to be led by Branch Manager Letty Huffman, who brings more than 20 years of experience to the new branch, along with a wealth of knowledge about the Southern Arizona real estate and mortgage market. l ClosingCorp has announced that Gerardo Caceres has joined the company as senior vice president of Data Operations & Product Management.

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take responsibility for growing the company’s sales leadership, as well as implementing a highperformance sales culture to help front-line managers and loan officers grow their businesses. Digital Risk’s Co-Founder and Managing Director Jeffrey C. Taylor was among those sworn in to the Mortgage Bankers Association’s (MBA) 2017 Board of Directors. AmCap Mortgage, a Houstonbased privately held national mortgage banker with 75 branches and licensed in 32 states, has named Michael Goldman chief operating officer (COO). PCLender has announced that Joseph Langner has been named president of the company. Langner, who was previously the chief sales officer and COO of Ellie Mae, brings more than 12 years of loan origination system expertise to his new role. First Guaranty Mortgage Corporation (FGMC) has appointed Brian Daily as managing director for its Distributed Retail Lending Division. New American Funding has named Kelly Allison as its Southeast Divisional vice president, where she will be responsible for expanding New American Funding across seven states by building teams of leaders and increasing new home loan sales. Connecticut-based VA mortgage lender Military Direct Mortgage has announced its expansion into Texas and has appointed Alex Halisky as branch manager of the new Dallas office. The Agency Group for WFG National Title Insurance Company (WFG) has named Ned Livornese as assistant vice president, underwriter/account manager for the company’s Chesapeake Region. WFG National Title Insurance Company has added Tamara Brooks as assistant manager/Georgia underwriting counsel. Brooks comes to WFG having practiced real estate law in Georgia for more than 12 years. Mortgage Network Inc. has announced that James Comosa has been named company president. Robert McInnes, owner, co-founder and former president of Mortgage Network, announced internally his intent to

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n a t i o n a l

m o r t g a g e

p r o f e s s i o n a l ’ s

o u t s t a n d i n g

p l a c e s

t o

w o r k

places to work

Freedom Mortgage Wholesale Division

REMN Wholesale

856-626-2595 www.freedommortgage.com

732-738-7100 www.remnwholesale.com

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

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

Geneva Financial, LLC.

United Wholesale Mortgage

480-368-2000 www.genevafi.com

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

Geneva Financial, LLC. views our employees as our most valuable clients; and treats them as such. We pay nearly twice the national average (2.5% comp plan average), with lower rates to the borrower and great service.

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

Attention Recruiters, Business Development Managers and HR Professionals national mortgage professional’s

PRMG 1-855-PRMG-FAN! (855-7764-326) www.PRMG.net Built by originators for originators, PRMG was born from a vision of creating a company with a unique culture focused on the successes of the producer. We understand what it takes to be a successful originator and cultivate new business every day.

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

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NATIONAL MORTGAGE PROFESSIONAL MAGAZINE’S

calendar of events FEBRUARY 2017 Thursday, February 2 NAMB: On the Road Series Walnut Creek Marriott 2355 North Main Street Walnut Creek, Calif. For more information, call (972) 758-1151 or visit NAMB.org. Friday, February 3 California Association of Mortgage Professionals Sales and Marketing 2017: North Walnut Creek Marriott 2355 North Main Street Walnut Creek, Calif. For more information, call (916) 448-8236 or visit TheCAMPSite.org.

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

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

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

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

APRIL 2017 Thursday, April 6 NAMB on the Road Series Location to be determined Houston, Texas For more information, call (972) 758-1151 or visit NAMB.org.

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

Thursday-Sunday, April 6-9 National Association of Minority Mortgage Bankers of America (NAMMBA) Inaugural National Conference Atlanta Marriott Buckhead 3405 Lenox Road Northeast Atlanta, Ga. For more information, visit NAMMBA.org.

MAY 2017 Tuesday-Thursday, May 9-11 2017 Great River MBA Conference The Peabody Hotel 149 Union Avenue • Memphis, Tenn. For more information, call (901) 321-6702 or visit GreatRiverMBA.com. Thursday, May 11 New York Mortgage Expo Hilton Long Island/Huntington 598 NY-110 • Melville, N.Y. For more information, call (860) 922-3441 or visit NYMortgageExpo.com. JUNE 2017 Thursday, June 1 California Mortgage Expo Crowne Plaza Hotel & Commerce Casino 6121 Telegraph Road Commerce, Calif. For more information, call (860) 922-3441 or visit CAMortgageExpo.com.

Thursday-Friday, August 17-18 Mortgage Star Conference for Women Planet Hollywood Las Vegas Resort & Casino 3667 Las Vegas Boulevard South Las Vegas For more information, call (860) 922-3441 or visit MortgageStar.biz. Friday-Sunday, August 18-20 Originator Connect Planet Hollywood Las Vegas Resort & Casino 3667 Las Vegas Boulevard South Las Vegas For more information, call (860) 922-3441 or visit OriginatorConnect.com. SEPTEMBER 2017 Wednesday, September 6 Texas Mortgage Roundup–Dallas DoubleTree by Hilton Dallas Near the Galleria 4099 Valley View Lane Dallas For more information, call (860) 922-3441 or visit TXMortgageRoundup.com.

Tuesday, June 13 The Great Northwest Mortgage Expo Embassy Suites Washington Square 9000 SW Washington Square Road Tigard, Ore. For more information, call (860) 9223441 or visit GreatNorthwestExpo.com.

OCTOBER 2017 Friday-Monday, October 13-16 NAMB National 2017 Rio Las Vegas 3700 West Flamingo Road Las Vegas For more information, visit NAMB.org.

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

Sunday-Wednesday, October 22-25 Mortgage Bankers Association 2017 Annual Conference & Trade Show Colorado Convention Center 700 14th Street Denver For more information, visit MBA.org.

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

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

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

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

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Tuesday, February 7 2017 California Mortgage Lenders Expo The Quiet Cannon 901 Via San Clemente Montebello, Calif. For more information, call (321) 123-4567 or visit CATExpoEvents.com.

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

APPRAISAL MANAGEMENT COMPANY

BONDS & LICENSING

The Bond Exchange www.bondedwithnamb.org (501) 224-8895 LOWEST-COST STATE MORTGAGE LICENSE BONDS Support NAMB in supporting you! Online surety bond applications, instant underwriting approval, and credit card payments administered through The Bond Exchange NAMB's exclusive partner provider for state license surety bonds. The Bond Exchange is a national surety agency specializing in servicing mortgage license bonds for thousands of mortgage professionals across the country. Low prices and fantastic service. You really can have them both at the same time!

APPRAISAL MANAGEMENT COMPANY

CHURCH FINANCING

COMPLIANCE CONSULTANTS

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

EDUCATION

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Concord Church Finance www.concordchurchfinance.com 800-926-0399

A loan to a Church can result in an "open door" opportunity for Residential loans to Church members.

BOOTS ACROSS AMERICA TOUR 2016-2017 Beverly@BootsAcrossAmerica.org Certified Military Home Specialist Beverly Ray Frase "Training Boots on the Ground" Since 2009 • Trained 3,000 CMHS course grads • Trained for Depts of HUD, Treasury & more • 20+ years' experience in real estate & finance, military life COMING TO YOUR CITY!

AUDIT DEFENSE AND RESPONSE

MORTGAGE BROKER AND LENDER COMPLIANCE AUDIT, MLO POLICIES and UPDATES Our fees are less than the big national firms that don’t call you back. Program includes all Manuals including QC, MLO Policies and Comp Plans, AML, GLB, Social Media and Web audits, on-line training sessions, governance documents, and our audit protection plan. Available in all 50 states. We have hands-on experience with regulators and audits. No theories here; we were Bankers. If you find yourself in federal court, we can handle that as well. Contact Nelson Locke at (800) 656-4584. Or you may e-mail us at nl@lockelaw.us All inquiries will be kept strictly confidential. This is not an offer for legal services, but rather for his expert review and opinion about your particular compliance situation. All fact patterns are different so the results will vary. No guarantees are expressed or implied. Licensed by California and Federal Bar. NMLS 149450.

COMPLIANCE CONSULTANTS

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

EDUCATION

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PUBLICATIONS

WHOLESALE LENDERS

Direct Private Money and Bridge Lender specializing in Stated Loans in CA 866-668-2663 Send Scenarios to info@CalHardMoney.com LENDING CRITERIA · Collateral: Stated 1st and 2nd position loans on N/O/O invest. properties (SFR, Condo, 1-4 units), Mixed-use, 5+ units, Retail, Industrial, Warehouse and Etc. · Fix & Flip program up to 70%-80% of the Purchase price on all types of properties · Loan amounts/Terms: $50,000 up to $5,000,000 and loans from 6 months to 10 years. · LTV: Purchases up to 70%-80% LTV; Refinances up to 60-65% LTV; 2nd Position up to 65% CLTV · BROKERS ALWAYS PROTECTED AND RATES STARTING AS LOW AS 8.50%

MARKETING

WHOLESALE LENDERS

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

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

Now Hiring Wholesale Sales Managers/Account Executives Nationwide Please send resumes to Marketing@HomeBrridge.com

WHOLESALE LENDERS

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

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PRIVATE FINANCING

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

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TagQuest www.tagquest.com 888-717-8980

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www.BrokersComplianceGroup.com

Looking for more? More Options? More Service? More Loans?

Get more from Angel Oak Mortgage Solutions - the experts in the non-prime mortgage space. Visit angeloakms.com or call 855-539-4910.

ÂŠ Angel Oak Mortgage Solutions LLC NMLS #1160240, Corporate office, 980 Hammond Drive, Suite 850, Atlanta, GA, 30328. Loans in Texas offered through Angel Oak Home Loans LLC, NMLS #685842.This communication is sent only by Angel Oak Mortgage Solutions LLC and is not intended to imply that any of our loan products will be offered by or in conjunction with HUD, FHA, VA, the U.S. government or any federal, state or local governmental body. This is a business-to-business communication and is intended for licensed mortgage professionals only and is not intended to be distributed to the consumer or the general public. Angel Oak Mortgage Solutions LLC is an Equal Opportunity Employer and does not discriminate against individuals on the basis of race, gender, color, religion, national origin, age, disability, veteran status or other classification protected by law. 2-18-16 ANR