MORTGAGE NEWS NETWORK INC. 1220 WANTAGH AVENUE WANTAGH, NEW YORK 11793
PRESORTED STANDARD U.S. POSTAGE PAID MORTGAGE NEWS NETWORK INC.
12 MONTHS BANK STATEMENTS TO $2,500,000 • 5000-12BS PLUS - 680 Min FICO – Personal / Business Statements up to 80% LTV – Starting at 5.25%*
24 MONTHS BANK STATEMENTS TO $2,500,000 • 5000-24BS - 680 Min FICO – Personal / Business Statements up to 85% LTV – Starting at 4.875%* • 5000-24BS - 660 Min FICO – Personal / Business Statements up to 90% LTV – Starting at 5.875%* • 5000-24BS-NP - 580 Min FICO – Personal / Business Statements up to 90% LTV – Starting at 6.625%*
NON-PRIME FULL DOC TO $2,500,000 • 5000-NP PLUS - 660 Min FICO – 2 Yrs BK, 4 Yrs Short Sale /Foreclosure up to 90% LTV– Starting at 4.875%* • 5000-RH - 500 Min FICO – 1 Yr BK, 1 DAY Short Sale /Foreclosure up to 80% LTV – Starting at 6.625%* • 5000-NP - 500 Min FICO – 1 Yr BK, 1 Yr Short Sale /Foreclosure up to 90% LTV– Starting at 6.125%*
INVESTOR - NO INCOME LOANS TO $2,000,000 • 5000-INV-PP - 640 Min FICO – No Income/No Employment/No Reserves Up to 75% LTV – Starting at 7.375%* • 5000-INV-DTI-PP - 620 Min FICO – No Income/No Employment/No Reserves Up to 80% LTV – Starting at 6.75%* • 5000-INV-FN-PP - Foreign National Borrower – No FICO/No Income/No Employment/No Reserves Up to 70% LTV – Starting at 7.75%*
NEAR PRIME FULL DOC TO $2,500,000 • 5000-JUMBO ELITE - 700 Min FICO – 7 Yrs BK, 7 Yrs Short Sale /Foreclosure up to 80% LTV – Starting at 4.25%* • 5000-1YR TAX - 660 Min FICO – 7 Yrs BK, 7 Yrs Short Sale /Foreclosure up to 80% LTV – Starting at 6.00%*
FOREIGN NATIONAL FULL DOC TO $2,000,000 • 5000-FN - No FICO – Income Docs up to 70% LTV – Starting at 6.75%*
ITIN FULL DOC TO $600,000 • 5000-ITIN - No FICO – Full Doc up to 90% LTV - Starting at 7.5%*
Interest Only Option
Exceptions
Non-Warrantable Condos
1-4 Units
Wholesale-Correspondent
www.GreenBoxLoans.com (800) 600-9198 Wholesaleinfo@greenboxloans.com
Gbox Licenses: BRE#01300944, DBO# 603L516, AZ#0919899, CA#333659, CO#333659, CT#MCL-333659, DE#29707, FL#MLD886, GA#33937, ID#MBL-7961, IL#MB.6760993, LA#333659, MD#21707, MI#FL0018821, MS#333659, NJ#333659, NC#L-156181, OH#MBMB.850183.000, OK#ML010327, OR#ML-5093, PA#48972, TX#333659, WA#CL-333659 This information is meant for Real Estate and mortgage professionals ONLY and is not to be provided to consumers. All products are not available in all States. Rate, terms, and conditions are subject to change without prior notice.
1)# / . 1). - .* */. */. 1 )*.1/. 0+0"1/
L I NK powered by OSI Exp press
1
=<;:987654382190/.90<..-0,932+97*):-((92<'&/:-9,<9,%-$:9#529"/,/9,<9/;,<!/ 0/ 90:-/,-9%<;(-9 -:(
&1 0"+. 1" +0"1/(95</.9< 0-:(9/:-9.< -"9< 9 ,%-$:98765438219.-&9 $( . ( 9<)-.9%<;(-9"/,-(9/."9 (/ -(9):$0-90%/. -( 98765438219/:-9.< -"9&%-.9 -:(9/:-9/;,<!/ 0/ 90:-/,-"9 <:9,%-$:9 $( . (
210/.-,+*)(.'1/&)1%.$0)#*"/ Save preferences useed <:9/;,<!/ 09 -:( 92-,9,%-9 << 9/."9 -- 9 90%<<($. 99 9%<;(-9)%<,<( 9876543819):< -9) /0-!-., 999999999 /0 :<;."90< <:( 9$!/ -(9<:9 <:"-:( 2 - . *&. * ).- /.21 /. . 0(( 1) .,<9!/ -9 0%/. -(9,%/,9/)) 9,<9,%-!9(;0%9/(9:- /::/. $. 9%<;(-9 )%<,<( 96559%<;(-9)%<,<(9/:-9/;,<!/ 0/ 9;) </"-" 1.'1 *"/ .210/.-,+*)(. ( %0 * .0< :/."-"9&$,%9 <;9/."9 <;:9REALTORSÂŽ
$($,9<;:9&- ($,-9 <:9 $"-<(9 9%<&9$,9&<: (
1( * )*(( +1 $2 2 /# 0;(,<!-:0/:- <($-*):-(( 0<!
n National Mortgage Professional Magazine n JUNE 2017
210/.-,+*)(.'1/&)1%.210/.'0%+ %0"1/(92/ -9 </.9 0<!)/:$(<.(9 9(/ -(9):$0-9:/. - 96. 9 </.9, )-( 99999 ." ( 9 6 9 6 9 6 9 2 6 9 -."-:90:-"$,(9 9!<:- 99999999999 #529 /,/9$(9 /,%-:-"9 (/ -(9):$0- 9,/*-( 9 36 9
6 69 $!$,( 9-,0 9=<;:9 </.(9/:-9/;,<!/ 0/ 9 0/ 0; /,-" 9 ;( 9:/,-(9/:-9;)"/,-"9"/$
NationalMortgageProfessional.com
MLS LinkTM is a "set it and forrget it" feaature
table of N A T I O N A L
30 NMP’s 2017 Mortgage Technology Providers Directory
J U N E
32 The Non-QM Market Is About to Heat Up By Raymond Eshaghian
2 0 1 7
l
M O R T G
V O L U M
A SPECIAL FOCUS ON “MORTGAGE TECHNOLOGY”
C
The Technology Behind Bitcoin Is Coming to Mortgage Lending By Al Stanley.............................................................................................. 60
T
Going Mobile and Overcoming Hurdles to a Smooth Transition By Chris Knowlton & Joe Wilson................................................................64
R
S
E-Loans and Apps By Rich Kuegler........................................................ 66
3
Mining QC Data By Phil McCall................................................................ 68
N
Timeless Mortgages By Eric Weinstein.................................................. 69
C
Beyond Self-Service and Data-Gathering Efficiency By Mary Ann McGarry................................................................................ 70
P
D
CRM the Right Way By Jordan Douglas.................................................. 72
No One Believes You … But Here’s What They Do Believe
38
Building a Tech-Savvy Mortgage Company By Rick Arvielo................ 74
No One Believes You … But Here’s What They Do Believe By Brian Sacks
Get–and Keep–More Business By Josh Friend...................................... 82
N
Technology: The Importance of Continuous Transformation By Michael Josephs.................................................................................. 77
S
Mortgages in the “E” Era: The Electronic Mortgage By Bill Packer.... 78
O
Technology for Real Estate Tax Servicing By Tim Moreland................ 80
A
L
Financial Accounting Systems in the Age of Agility By Martin Kerr.... 84
T
Blockchain: Mortgage and Settlement Industry Stands on the Edge of Tomorrow By Derrick Jones................................................ 86
H T
How Millennials Are Shaping the Homebuying Process By Desirée Patno........................................................................................88
T
E
Navigating the Blockchain Landscape: Which Systems Work Best for Document Management? By Jason Nadeau............................ 90
58 House Passes Dodd-Frank Reform Act
92 NMP Mortgage Professional of the Month: Gary Malis, Chief Strategy & Capital Markets Officer, PRMG By Phil Hall
V I S I T Company
Web Site
O U R
A D Page
Agility Resources Group...................................... www.agilityresourcesgroup.com ......................................87 Angel Oak Mortgage Solutions............................ www.angeloakms.com .............................. 65 & Back Cover Athas Capital Group.......................................... www.athascapital.com .................................................... 7 Brokers Compliance Group.................................. www.brokerscompliancegroup.com ................................ 104 Caliber Home Loans.............................................. www.caliberwholesale.com .............................................. 25 Carrington Mortgage Services, LLC...................... www.carringtonwholesale.com ................................ 9 & 71 Champions School of Real Estate........................ www.championsschool.com/loan .................................... 81 Citadel Servicing Corporation.............................. www.citadelservicing.com .............................................. 57 Comergence Compliance Monitoring LLC.............. www.comergencecompliance.com .................................. 67 Document Systems, Inc./DocMagic...................... www.docmagic.com ...................................................... 11 FAMP................................................................ www.myfamp.org .......................................................... 74 Franklin Flood.................................................. www.premierflood.com ..................................................62 Freddie Mac...................................................... www.freddiemac.com/loanadvisorsuite ............................ 5 Greenbox Loans, Inc........................................... www.greenboxloans.com .............................................. IFC HomeBridge Wholesale...................................... www.homebridgewholesale.com .................................... 29 Lykken On Lending............................................ www.lykkenonlending.com ............................................ 84 MBS Highway.................................................... www.mbshighway.com/MNN .......................................... 79 Mortgage News Network (MNN).......................... www.mortgagenewsnetwork.com ............................ 36 & 37 NAMB+............................................................ www.nambplus.com ...................................................... 23
T T T
of contents
R T G A G E
U M E
P R O F E S S I O N A L
9
l
N U M B E R
6
FEATURES
Consider Non-QM Loans as a Linchpin for Leadership and Success By Tom Hutchens........................................................................................ 8 The Elite Performer: Financial Freedom By Andy W. Harris, CRMS...... 8 Recruiting, Training and Mentoring Corner By Dave Hershman.......... 10 Streamline Your Marketing......................................................................16 3 Points With Mat Ishbia.......................................................................... 18 NAMB Perspective....................................................................................20 California DBO Provides Additional Guidance for California Per Diem Interest Compliance By Gavin T. Ales.................................... 22 Does Mass Marketing Work to Attract Proven Producers? By Steve Rennie........................................................................................ 24 New York Adopts New Cyber Security Regulations for Lenders By Andrew Liput........................................................................................ 26 Spring Training for Mortgage Pros By Bubba Mills.............................. 34 OrigiNation By Andy W. Harris, CRMS.................................................... 40 A Few Thoughts on the Secondary Market By Phil Hall........................44 Lykken on Leadership By David Lykken..................................................46 The Mortgage Godfather By Ralph LoVuolo Sr.......................................48 How Using a Learning Management System Aids Compliance Training Efforts By Jeff Kelly.................................................................... 50 The Long & Short: The Business of Short Sales By Pam Marron........ 54 Empower Your Employees to Make Smart Decisions By Anne Houlihan...................................................................................... 94
A D V E R T I S E R S Company
Web Site
Page
NAMB Kickstart.................................................. www.nambkickstart.com ................................................19 NAPMW............................................................ www.napmw.org ....................................................47 & 83 NAWRB............................................................ www.nawrb.com ............................................................75 New York Community Bancorp. Inc..................... www.nycbmortgage.com ................................................ 27 NMP U.............................................................. www.nmpucoaching.com .................................. 28, 73 & 97 NRMLA.............................................................. www.nrmlaonline.org .................................................... 85 OSI Express........................................................ www.osiexpress.com/mlslink ............................................ 1 Paramount Residential Mortgage Group, Inc....... www.prmg.net .......................... 13, 63 & Inside Back Cover RealtyShares...................................................... www.realtyshares.com/broker ........................................ 55 REMN................................................................ www.remnwholesale.com .............................................. 15 ResMac, Inc....................................................... www.resmacb2b.com .................................................... 17 Ridgewood Savings Bank.................................... www.ridgewoodbank.com .............................................. 89 Secure Insight.................................................... www.secureinsight.com ..................................................43 TagQuest.......................................................... www.tagquest.com ........................................................ 41 The Bond Exchange............................................ www.thebondexchange.com .......................................... 69 The Mortgage Collaborative................................ www.mortgagecollaborative.com .................................... 76 UAMP................................................................ www.uampexpo.eventbrite.com ......................................82 United Wholesale Mortgage................................ www.uwm.com ........................................................ 52-53
JUNE 2017 Volume 9 • Number 6
FROM THE
publisher’s desk
Focusing on the machinery In the Wizard of Oz, the man behind the curtain tells Dorothy to pay no attention to the man 1220 Wantagh Avenue • Wantagh, NY 11793-2202 behind the curtain. If she ignores all the machinery behind that curtain, perhaps she’ll still Phone: (516) 409-5555 • Fax: (516) 409-4600 believe in the magic. For much of our history as the mortgage industry, we’ve treated Web site: NationalMortgageProfessional.com technology the same way, hiding it behind a curtain of paper documents. But today’s home STAFF Eric C. Peck Joel M. Berman loan borrowers aren’t falling for it. They want to peek behind the curtain. They want to tear Editor-in-Chief Publisher - CEO (516) 409-5555, ext. 312 (516) 409-5555, ext. 310 the curtain down. ericp@mortgagenewsnetwork.com joel@mortgagenewsnetwork.com We only have to look as far as Quicken’s Rocket Mortgage to know that today’s Joey Arendt Beverly Bolnick mortgage borrower is ready to embrace technology. Now, we just have to work on the Art Director VP-Sales & Marketing (516) 409-5555, ext. 307 (516) 409-5555, ext. 316 people inside the industry. The June 2017 issue of National Mortgage Professional joeya@mortgagenewsnetwork.com beverlyb@mortgagenewsnetwork.com Magazine will focus on the systems and platforms used to keep the home finance industry Scott Koondel Phil Hall VP of Operations Managing Editor moving. If you’ve ever wondered if you’d ever truly harness technology for the benefit of (516) 409-5555, ext. 324 (516) 409-5555, ext. 312 your business, this issue is for you. scottk@mortgagenewsnetwork.com philh@mortgagenewsnetwork.com Let’s start at the beginning with sales and marketing. How can technology get you more Richard Zyta Francine Miller Social Media Ambassador Advertising Coordinator business? Jordan Douglas, marketing manager for Whiteboard Mortgage Software, offers (516) 409-5555 (516) 409-5555, ext. 301 richardz@mortgagenewsnetwork.com francinem@mortgagenewsnetwork.com you “CRM the Right Way” on page 72, and Josh Friend, founder and chief executive officer Rick Grant Dylan Pollock of InSellerate, serves up “Get–and Keep–More Business: Cut Your Closing Times” on page Special Reports Editor Administrative Assistant 82. (570) 497-1026 (direct) (516) 409-5555, ext. 314 (516) 409-555, ext. 311 dylanp@mortgagenewsnetwork.com Increasingly, we’ll selling to the next generation of homebuyers. Desirée Patno, president rickg@mortgagenewsnetwork.com and CEO of the National Association of Women in Real Estate Businesses (NAWRB), writes ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact about that in “How Millennials Are Shaping the Homebuying Process” beginning on page VP-Sales & Marketing Beverly Bolnick at (516) 409-5555, ext. 316 or e-mail beverlyb@mortgage88. These borrowers are expecting to do more on mobile phones, so be sure to read newsnetwork.com. “Going Mobile and Overcoming Hurdles to a Smooth Transition” by Chris Knowlton, chief ARTICLE SUBMISSIONS/PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck information officer of Inlanta Mortgage & Joe Wilson, chief marketing officer at at (516) 409-5555, ext. 312 or e-mail ericp@mortgagenewsnetwork.com. The deadline for submissions SimpleNexus on page 64. is the first of the month prior to the target issue. And in the future, expect to do more with less paper. We bring you three great features SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail orders@mortgagealong those lines with “E-Loans and Apps: How Technology Is Changing Lending” by newsnetwork.com or visit www.nationalmortgageprofessional.com. Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600. Stewart Title’s Rich Kuegler on page 66; “Mortgages in the ‘E’ Era: The Electronic Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the Mortgage” by Bill Packer, chief information officer at American Financial Resources (AFR) authors alone and do not imply the opinion or endorsement of Mortgage News Network Inc., or the offion page 78; and “Beyond Self-Service and Data-Gathering Efficiency” by Mary Ann cers or members of National Association of Mortgage Brokers and its State Affiliates (NAMB), National Association of Professional Mortgage Women (NAPMW), National Consumer Reporting Association (NCRA) McGarry, president and chief executive officer of Guild Mortgage, on page 70. and/or other state mortgage trade associations. Participation in NAMB, NAPMW, NCRA, and/or other state mortgage trade associations events, activMortgage technology has always been about giving management actionable information ities and/or publications is available on a non-discriminatory basis and does not reflect the endorsement they can act on to build their businesses, and we bring you three great stories that of the product and/or services by Mortgage News Network Inc., NAMB, NAPMW, NCRA, and other state mortgage trade associations. demonstrate it still is. “Financial Accounting Systems in the Age of Agility” by Martin Kerr, National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, and/or other state mortgage co-founder and president of Bestborn Business Solutions, on page 84; “Mining QC Data: 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 The Financial Benefit of Proactive Mortgage QC” by Phil McCall, chief operating officer of 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. ARMCO, on page 68; and “Technology for Real Estate Tax Servicing” by Tim Moreland, senior vice president of SLK Global Solutions, beginning on page 80. This wouldn’t be National Mortgage Professional Magazine if we didn’t help you see around the corner to what’s coming next. There are some exciting technologies on the horizon and you’ll read about them in this issue. Look for “Blockchain: Mortgage and Settlement Industry Stands on the Edge of Tomorrow” by Derrick Jones, vice president at SLK Global Solutions America, on page 86; “Navigating the Blockchain Landscape: Which Systems Work Best for Document Management?” by Jason Nadeau, executive vice president at Factom, on page 90; and “The Technology Behind Bitcoin Is Coming to Mortgage Lending” by Al Stanley, chief information officer and chief technology officer for Angel Oak Companies, beginning on page 60. If you get anything out of this issue, let it be that we need to be building companies that are as tech-savvy as the borrowers we hope to serve. Read “Building a Tech-Savvy Mortgage Company” by Rick Arvielo, chief executive officer of New American Funding, on page 74 and “Technology: The Importance of Continuous Transformation” by Michael Josephs, chief information officer/chief transformation officer for American Advisors Group (AAG), on page 77, to see what we mean. And expect to find the great features and columns that this publication always brings to you in this issue, including our compliance feature, news from industry trade groups and a new article on page 69 by Eric Weinstein entitled, “Timeless Mortgages.” I’m particularly proud to bring you our 2017 Mortgage Technology Providers Directory in this issue. We’ve always worked to be a great resource to help you build more successful businesses and this directory is another great step in that direction. Please see pages 30-31 for more on these companies at the forefront of the technological curve. And read all about our Mortgage Professional of the Month for June, Gary Malis, chief strategy and capital markets officer for Paramount Residential Mortgage Group Inc. (PRMG) beginning on page 92. May this issue sweep the curtain out of your way and give you a better understanding of the platforms and systems that are driving our industry’s top players. May you find plenty that benefits you and your company. Regardless of the technology you employ, we wish you great success in the second half of 2017 and beyond! Sincerely,
Joel M. Berman, Publisher-CEO NMP Media Corp. Joel@MortgageNewsNetwork.com
National Mortgage Professional Magazine is published monthly by Mortgage News Network Inc. • Copyright © 2017 Mortgage News Network Inc.
R
E
L
I
E
F
enter
Minimizing repurchase risk should be automa attic.
5
With Loan Product Advisor, it is.
Learn more at www.FreddieMac.com/LoanAdvisorSuite
n National Mortgage Professional Magazine n JUNE 2017
®
Smart. Simple. T Trrusted.
NationalMortgageProfessional.com
Have you checked out Loan Produ uct Advisor® lately? Navigation is simplerr.. Data visualization is more intuitive. And A now benefits like collateral rep and warranty relief can be automatic.
NAMB—The Association of Mortgage Professionals 2701 West 15th Street, Suite 536 l Plano, Texas 75075 l Phone: (972) 758-1151 l Fax: (530) 484-2906 l Web site: NAMB.org
NAMB 2016-2017 BOARD OF DIRECTORS E X E C U T I V E
Fred Kreger, CMC President American Pacific Mortgage 3000 Lava Ridge Court, Suite 200 Roseville, CA 95661 (916) 960-5824 Fred.Kreger@APMortgage.com
John G. Stevens, CRMS President-Elect RPM Mortgage Inc. 6045 West 10050 North Highland, UT 84003 (801) 427-7111 JohnGStevens@gmail.com
Valerie Saunders, CRMS Vice President RE Financial Services Inc. 25 Causeway Boulevard #101 Clearwater Beach, FL 33767 (727) 853-1000 Valerie@REFinServ.com
Olga Kucerak, CRMS Secretary Crown Lending Inc. 10 Broadway, Suite 110 San Antonio, TX 78205 (210) 828-3384 CrownLending@gmail.com
B O A R D
Andy W. Harris, CRMS Treasurer Vantage Mortgage Group Inc. 16325 SW Boones Ferry Road, Suite 100 Lake Oswego, OR 97035 (503) 496-0431, ext. 302 AHarris@VantageMortgageGroup.com
Harry H. Dinham, CMC NAMB COO Dinham Consulting 2701 West 15th Street, Suite 536 Plano, TX 75075 (972) 758-1151 Consulting@DinhamCompanies.com
Rocke Andrews, CMC, CRMS Immediate Past President Fairway Independent Mortgage Inc. 5151 East Broadway, #1700 Tucson, AZ 85711 (520) 886-7283 RAndrews@LendingArizona.net
D I R E C T O R S
Rick Bettencourt, CRMS Mortgage Network Inc. 52 Maple Street Danvers, MA 01923 (978) 304-0818 RBettencourt@MortgageNetwork.com
Chris Bettis Precision Capital 4710 Village Plaza Loop, Suite 140 Eugene, OR 97441 (541) 284-8098 Chris@PrecisionCapital.net
Linda McCoy, CRMS Mortgage Team 1 6336 Piccadilly Square Drive Mobile, AL 36609 (251) 650-0805 Linda@MortgageTeam1.com
Michele Velez, CMC Supreme Lending 1300 San Mateo, CA 94402 (650) 409-5347 Michelle.Velez@SupremeLending.com
Nathan Pierce, CRMS Advanced Funding Home Mortgage Loans 6589 South 1300 East, Suite 200 Salt Lake City, UT 84121 (801) 272-0600 NPierce@AdvFund.com
Robert Sweeney, CRMS Teachers Credit Union 600 East Carmel Drive, Suite 116 Carmel, IN 46032 (317) 625-3287 RSweeney@tcunet.com
Kimber White RE Financial Services Inc. 1620 West Oakland Park Boulevard #201 Oakland Park, FL 33311 (954) 306-3553 Kimber.LMT@gmail.com
National Association of Professional Mortgage Women 345 North Main Street, Suite 313 l West Hartford, CT 06117 l Phone: (800) 827-3034 l E-mail: NAPMW1@NAPMW.org l Web site: NAPMW.org
2017-2018 NAPMW NATIONAL BOARD OF DIRECTORS 6
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
Cathy Kantrowitz National President (845) 463-3011 President@NAPMW.org
Laurel Knight President-Elect (425) 426-2028 PresElect@NAPMW.org
Susan Kerr Vice President (703) 871-1310 NVP1@NAPMW.org
Glenda Mooney Secretary (314) 703-8714 NatSecretary@NAPMW.org
Judy Alderson Treasurer (918) 250-9080, ext. 300 NatTreasurer@NAPMW.org
Lynne Sparks Parliamentarian (678) 872-9000, ext. 10611 LSparks@SKWRLaw.com
Vincent Valvo Executive Director (860) 922-3441 NAPMW1@NAPMW.org
National Consumer Reporting Association 701 East Irving Park Road, Suite 306 l Roselle, IL 60172 l Phone: (630) 539-1525 l Fax: (630) 539-1526 l Web site: NCRAINC.org
2016-2017 BOARD OF DIRECTORS
Julie Wink President (901) 259-5105 Julie@DataFacts.com
Paul Wohkittel Vice President (410) 644-5020 PWohkittel@CISInfo.net
Gary Glucroft Director (800) 877-3908, ext. 100 GaryG@TheScreeningPros.com
William Bower Ex-Officio (800) 288-4757 WBower@Continfo.com
Scott Ledbetter Director (214) 833-3315 SLedbetter@LCGSolutions.net
Mike Thomas Treasurer (615) 386-2285, ext. 285 MThomas@CICCredit.com
Brian McKinney Director (706) 373-2200 McKinney@MCBUSA.com
Mary Campbell Director (701) 239-9977 Mary@AdvantageCreditBureau.com
Delia Zuniga Director (623) 889-8999 Delia@AdvantagePlusCredit.com
Janet Curtis Director (210) 224-6121 JCurtis@SARMA.com
Terry Clemans Executive Director (630) 539-1525 TClemans@NCRAInc.org
Maureen Devine Director (413) 736-4511 MDevine@StrategicInfo.com
Jan Gerber Office Manager/Member Services (630) 539-1525 JGerber@ NCRAInc.org
Big Things on the Horizon for ARMCP in 2017 This year will bring some great new opportunities to the Association of Residential Mortgage Compliance Professionals™ (ARMCP™), currently consisting of nearly 1,600 members. ARMCP™ will soon be launching its own Web site to fulfill the needs of residential mortgage compliance professionals. ARMCP™ is the first and only independent, national organization in the U.S. devoted exclusively to residential mortgage compliance professionals. Our independence means we are not affiliated with any profit oriented corporation or enterprise. ARMCP™ membership consists solely of those members who have joined it on their own and were not solicited to join it via solicitations from third-party lists or subscriptions. Independence is the key to the value of our advocacy! There are currently two slots remaining for the Steering Committee. The Steering Committee will be drafting new by-laws, determining a nominating process, conference planning, and many other areas of interest relating to ARMCP™’s mission. If you are interested in joining the Steering Committee, email Info@ARMCP.org.
7
NationalMortgageProfessional.com
n National Mortgage Professional Magazine n JUNE 2017
Consider Non-QM Loans as Linchpin for Leadership and Success By Tom Hutchens
L
eadership qualities are critical for success as a mortgage originator. But, to be a leader, you do not have to be a boss or always top the sales charts.
You demonstrate true leadership by how you serve your customers. If you can find a good loan for every viable prospect, then you have what it takes to be a leader. Leadership is especially crucial for placing non-QM loans. My colleague, Matt Henson, gave me this idea in his article on page 50 in the May issue of National Mortgage Professional Magazine, “Leadership vs. Management” (http://bit.ly/2roK7bO). He talks about how those responsible for the performance of others should guide and inspire rather than boss people around. But, what about loan officers who focus mainly on getting results for borrowers? What do we need to know about leadership? Great leadership is less about telling people what to do than devising solutions for their concerns. Here’s how a single loan officer can master the skills of leadership every day.
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
8
l Resourcefulness: Do you solve your customers’ problems or do you move on when a potential customer does not qualify for a standard loan? You need to know more to get a non-QM loan for a family with a selfemployed head of household. A resourceful originator will find that perfect loan. That is leadership. l Enthusiasm: True leaders are enthusiastic because they believe in their customers and products. Do you service non-QM customers and pursue non-agency loans as enthusiastically as other types of business? Enthusiasm demonstrates that you are knowledgeable and prepared, the traits of a leader. l Influence: Do people know who you are? Leaders build their reputation by getting things done that others cannot or will not do. That is how the strongest referral pipelines are built. Today, the best way to gain influence–to prove that you are a notch above–is by seeking and closing nonQM loans. If you can get results for high-quality borrowers who have been ignored by other lenders, word will spread and your business (agency and non-agency) will be bolstered by the strength of your reputation. Leaders do not wait to see what kind of customers walk in the door. Leaders are originators who identify growth opportunities, no matter what their colleagues or competitors do. Today, the best way to grow and take on the mantle of leadership is by helping the millions of creditworthy borrowers who don’t fit into the tight underwriting standards of agency loans.
elite performer the
Financial Freedom BY ANDY W. HARRIS, CRMS
hose of us in the real estate and mortgage industry are career entrepreneurs with self-determined income and self-directed retirement plans. You may own and operate your own business, or you might work for someone else as an employee or contractor. Either way, your success is determined by your level of determination and hard work. More importantly, it’s determined by your ability to control and monitor your own personal balance sheet. The most common business-failure mode, hands down, is running out of cash. With my humble beginnings, I consider my successes a blessing. I’ve seen enough during my lifetime to know the importance of planning for the worst, but working and pressing for the best. Sometimes life can throw nice easy pitches where you’re knocking it out of the park, but it can also throw some nasty curveballs that you need to be prepared for. While we cannot all see into the future, there are steps we can take to be as prepared as possible financially for most anything thrown at us. Unfortunately, we cannot individually control our national debt crisis, but we can control our own personal debts and finances. The first step is to tackle two primary issues:
T
1. Not enough cash reserves 2. Too much debt I personally believe that if you cannot pay cash for something, you cannot afford it (with the exception of real estate which I do believe in strategic financing and collateralized debt). I believe in being fully liquid otherwise both personally and professionally in business, and I find this produces the freedom to accelerate emergency fund reserves as well as future retirement planning. Here are a few goalsetting steps that I believe can help achieve financial freedom and the ability to eliminate stress in this area: l
l Tom Hutchens is senior vice president of sales and marketing at Angel Oak Mortgage Solutions, an Atlanta-based wholesale/correspondent lender licensed in more than 35 states and operating in the non-QM space for over three years. Tom has been in the real estate lending business for nearly 20 years. He may be reached by phone at (855) 539-4910 or e-mail Info@AngelOakMS.com.
l
l
After your business is established, work to pay off all business and personal debt. Use the snowball theory and start with the lowest balance up to the highest to motivate and set the final liquidity target date as a goal. Reduce personal and business overhead and invest only in the most financially productive ways. Determine what six to 12 months operational or living expenses would be and keep that amount maintained at all times in liquid reserves. Maximize your retirement every year and project what this will look like in the future, depending on your quality of life goals after you exit the workforce. Put your ego aside and be humble financially. Don’t try to impress others by falling into debt. Only buy what you can afford and spend money you actually have wisely. Wealth is built by those that sacrifice and set goals. Anyone can “appear” to be continued on page 56
SPONSORED EDITORIAL
iew g Rev n i t i r rw Unde eview w Q/C R Revie l a s i a Appr
A
D E V O PPR
9
Closing the tough loans GOVERNMENT LOAN A PROGR AMS
Our ded diicated tteeam mo off hig gh hllyy -exxp perriienced loan o ssp pecialiissts iiss your secret w weeapon ffo or closing loans tth hat otth herrss canâ&#x20AC;&#x2122; tt..
LOW DOW N PAY MEN T PROGR A MS M A NUFAC T URED PROPER T Y PROGR A MS DOW N PAY MEN T A S SIS T TA A N C E PR O G R A M S E X PA NDED GUIDELINE S
Unconventional loans for conventional clients FANNIE / FREDDIE *** SELF - EMPLOY ED WI T H DOW N PAY MEN T
Your tou ugh loans lender
866 - 453 -2400
W-2 CLIEN T WI T H BORDERLINE CREDI T A ND LOW DOW N PAY MEN T IN V E S T MEN T / MULT I - UNI T PROPER T IE S
A SMARTER WAY TO CLOSE
NO - OCCUPA N T CO - BORROWER
9 2..//1)-64/9.// 414,/94349,..//'629 (1-6 6 664*9 .3 3* *..1 1)9./ (6./59192. 2.6 )/..* */9,./'629..// 3.29.// /,264 4* *934-- 927/9 "95,3..//914'919 )34279)3.22* *1 1* */97665523.. # #9 -3564*9,3522559)1 1 94329 /9 414,/'964223 39194349,..//'629 (1-6 6 664*9.// 414,/#9 //. 1-9
//.66 ,1263493 3 964,3)/953(..,,/9659./ (6..//'# **Restrictions apply; contact your Account Executive for details. © Copyriig ght 20 07-2017 Carring ton Mor ttg gage Ser vices , LLC headquar tered at 160 0 South Dou ug gla s s R o a d d,, Suites 110 & 20 0A , Anaheim, C CA A 92806 . 80 0 -561- 4567 7.. NMLS ID #260 0. Nationwide Mor ttg ga ag ge Licensing S Syy s tem ((N NML S S)) Consumer Access website: w w w w.. nmllssconsumeraccess .orrg g. A Z: Mor ttg ga ag ge Banker BK- 09107 74 45. CA: Licensed by the Depar tment o off Business O ver siig ght under t he C Ca aliffo ornia Residential Mor ttg ga ag ge Lending Ac t, t FFiile 413 090 4 . CO: Check license status of of your mor ttg ga ag ge loan oriig ginator at w w w.dora.state. co.us //rreal- es tate //iinde x.htm. GA: Georrg gia Residential Mor ttg ga ag g e L i c e n s e e 2 27 72 21. IL: Illinois Residential Mor ttg ga ag ge Licensee. MN:9887 7659659432914930 0//.9239/42/.964239149642/./529.12/9-3,+91 1* *.//)/429(4'/.9&644/53219%1$#9MO M : Missouri Company Reeg gis tration 14 -17 74 4 6 . In -State " !,/:9&6553(.69 /56'/4261-9&3. 22* "! *1 1* */9%3149 .3+/.9%6,/45/9 #9 9 9 3/-- 9%//59 ())622 9&"9 #9NV: Mor ttg gag age Broker License 4 068 (Residential Mor ttg ga ag ge Oriig gination//LLending g)). NJ: Licensed by the N..JJ. Depar tment o off Bankin ng g and Insurance. NY Y:: Licensed Mor ttg ga ag ge Bankerrâ&#x20AC;&#x201D; â&#x20AC;&#x201D;NY YS S Depar tment of FFiinancial Ser vices . New Yo York Mort r tg ga ag ge Banker License B50 0980/10766 4 . OH:9"7639&3. 22* *1 1* */9%3149 , 29 /. 266 ,12/93 3 9 //* *652.126349 &# ## #9RI: Rhode Island Licensed Lenderr,, Lender License 20112809LL. VA: NML S ID 260 0 (w w w.nmlsconsumeraccess .org (w g)). WA: Co Consumer Loan License CL 260 0. Als lso licensed in AL , AR , CT T,, DE, E, DC C,, FL , HI, ID D,, IN N,, IA , KS S,, KY Y,, LA , ME E,, MD D,, MI, MS, MT T,, NE E,, NH H,, NM M, NC M, C,, OK K,, OR , PA , SC C,, SD, TN, N, TX X,, UT T,, WV V,, WI and WY Y. NOT TIICE: All loans are sub bjjec t to creditt,, (4'/. $.6264*914'9 .3 /. 2 2 91 1
.3
1 1-9*(6'/-64/5 #9"0 0//./'9-3149 .3'(, 2 59)1 )1 9 1.. 9 95212/#9887 7/./9659439*(1.142//9271291--9 3..3$/. 59$6--9 (1-6 6 ##9 /5 2.6, 263459)1 1 91
- - #9887 7659659432919,3))62)/429239-/4'#988//.)5 9,34'626345914'9 .3 3* *.1)591./95( /, 29239,714*/9 without notice. Th This inffo ormation is ffo or indus trryy proffeessionallss onllyy and iiss not intended ffo or distribution to consumerrss . Carring ton Mor ttg ga ag ge Ser vices , LLC is not ac ting on behalf o off or at the direc tion o off HUD/FFH H A o r a n y go ve r n m e n t a ag gencyy.. All riig ght s reser vveed.
n National Mortgage Professional Magazine n JUNE 2017
Ca C arrriing ton iiss your go-to lender fo for closing low FI F ICO goverrn nment loans ffo or the undesser ved markkeet and under w wrrittiing complex ,34 /426341-9-3145 #9 //971 /9'/ /-3 /'9'660 0/./429 .3,/55/59 3 0/ 3 .9 under wrriittiing g go overrn nment and conventtiional loans that make tth he process easier and ffa asterr..
GOV ERNMEN T PROGR A MS DOW N TO 550 FICO
NationalMortgageProfessional.com
Close loa ans that oth hers canâ&#x20AC;&#x2122;t
NO FICO* SCORE REQUIR ED ON GOV ERNMEN T S T RE A MLINE S (FH A , VA , USDA)
Recruiting, Training and Mentoring Corner
Technology and Hiring BY DAVE HERSHMAN
he theme for this month’s issue focuses on technology. Last month, when we focused on trends within the industry, technology was certainly one of the trends we singled out. For the technology trend, we concentrated upon using technology as a tool to aid in our recruiting efforts. However, technology actually affects the entire hiring process. For example, let’s take the issue of technology and the assessment of potential hires. Technology can affect the assessment of candidates in several ways. It is well-known that presently, the average age of loan officers within this industry is well over 50 years. That means that there are many loan officers out there who are not tech-savvy. Being technologically-savvy becomes more and more important every year. Yet, we have loan officers who still are taking loan applications by hand and handing them off to others in the office to input into a computer. There is nothing wrong with face-to-face interaction and the fact that technology can suppress this interaction is actually a shortcoming. But today, Millennials want to make applications on mobile devices. Likewise, their definition of faceto-face may be by video chat. The question is whether this type of candidate is willing and able to evolve with the technology the industry will be adopting, or are
T JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
10
they going to become as extinct as the dinosaurs? On the other side of the equation, technology can help us assess candidates in different ways: l
Checking reputation: Reviews on Google, Yelp, LinkedIn and more, can give a good picture of what type of reputation that a loan officer has developed. Of course, if they are not technologically-savvy, they are less likely to have a plethora of reviews on online. On the other hand, if they are doing a poor job, those reviews will be there regardless.
l
Knowledge assessment: How many times have you hired a loan officer who was supposedly experienced and it turned out they did not know what they were doing? This is not surprising since training in the industry, aside from licensing training, is typically lacking, to say the least. What if you had access to an online test you could give them to measure the current state of their knowledge? At the very least, you could find out what type of training they would require or perhaps you don’t want to take on the project of hiring them at all. If you are interested in knowing more about knowledge assessments for your present staff or
candidates, feel free to e-mail me at Dave@HershmanGroup.com. l
Trait assessment: A trait assessment is certainly more complicated than a knowledge assessment. You can easily measure knowledge, but knowing whether they will work hard or be a team player is a bit more difficult to assess. There is no substitute for a thorough check of references, including vendors and previous employers. However, there are also trait assessment tools which can be utilized, though many of them are not specific for the mortgage industry. One such assessment which is specific for the industry can be found through QFS sales solutions.
Technology affects more than the recruiting and assessment processes. It also affects the onboarding process. For one, there are a host of technological tools that loan officers will need to be trained on. We typically start with the LOS system used by the company, but today there are many other technologies which are being utilized, including appraisal management systems, rate-locking systems, CRMs and more. If the
company is utilizing mobile technology, then training would have to occur there as well. Some training would occur face-to-face, but often times, training would also utilize technologies. There may be recorded Webinar trainings for certain tools or more formal Learning Management Systems (LMS) for required topics such as compliance training. As a matter of fact, this brings us back to the assessment issue. What if our assessment highlighted areas in which the hire needed to increase their competency? LMS systems can deliver training for specific competency levels online instantaneously. For example, basic training for novices, advanced topics for growing loan officers, or sales and marketing training for experienced producers who need to step up their production. Thus, technology can uncover the problem and provide a solution. Integrating technology into the entire recruiting, assessment and hiring process is as important as integrating technology within the application and complete loan processes. If these tools are not utilized by your company—they are on their way.
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.
11
NationalMortgageProfessional.com
n National Mortgage Professional Magazine n JUNE 2017
newtomarket Lenders Compliance Group Launches CMS Tune-up! Due Diligence Service
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
12
Lenders Compliance Group (LCG) has announced its new due diligence service, the CMS Tuneup!, a hands-on due diligence review of a financial institution’s Compliance Management System (CMS) conducted by the firm’s directors and subject matter experts. A one-time fee covers the following: Full Review; Subject Matter Experts; Executive Summary; Recommendations; and Risk Rating. CMS Tune-up! reflects the size, complexity, and risk profile of the financial institution. “Lenders Compliance Group is the only risk management firm offering this unique service,” said Jonathan Foxx, Managing Director of LCG. “There is no other firm like us that has the range of knowledge and depth of experience to provide such an extensive overview of a Compliance Management System.” An effective CMS is comprised of three interdependent elements: Board and/or Management Oversight; Compliance Program; and Compliance Audit. When all elements are strong and working together, a financial institution is successful at managing its compliance responsibilities and risks. “An institution should not need to spend a huge amount of money to find out if its Compliance Management System adequately reflects regulatory compliance expectations,” said Foxx. “Our review is designed to provide a risk evaluation that is immediately useful to our clients. It is conducted by directors and
subject matter experts who have rigorously trained on the specific review requirements of the CMS Tune-up!”
warehouse, self-storage, automotive, light industrial and daycare centers. The maximum LTV is 75 percent.
Silver Hill Announces New Stated-Income Program
Indecomm Integrates IncomeGenius With Advanced Data
Silver Hill Funding LLC has introduced its new Stated Owner-Occupied Program for small-balance commercial loans from $250,000 to $2,000,000. The Stated Owner-Occupied Program utilizes a proprietary algorithm that enables Silver Hill to pull data from various sources, meaning borrowers can get approved for a loan without having to provide business financial statements or personal/business tax returns. The only documents required at the beginning of a transaction are a loan application and credit report. “Prospective borrowers with owner-occupied financing requests have historically been underserved by traditional lenders,” said Silver Hill Managing Director Leslie Smith. “Mortgage originators can take advantage of our new program and help their clients secure funding without having to provide the extensive documentation other lenders require.” Financing is available for borrowers who have a FICO credit score of 700-plus and whose business has been in existence for at least five years. Eligible property types include mixed-use, retail, office,
Indecomm Global Services and Advanced Data have announced a technology integration alliance, enabling mutual clients to digitally use tax return transcripts through IncomeGenius, Indecomm’s Web-based income analysis platform using Advanced Data’s Income Tax Verification (ITV) service. That data is then combined with other borrower income data from the OCR capabilities in IncomeGenius to create a complete income analysis. “At its core, Indecomm is working to apply advanced technologies and data from sources of truth in the most critical phases of the mortgage business, especially underwriting,” said Rajan Nair, CEO of Financial Services for Indecomm Global Services. “These are bottlenecks in the mortgage origination process and overcoming these constraints can enhance the efficiency of the entire system.” IncomeGenius enhances the loan origination process, reducing tax return review time by as much as 50 percent. It simplifies the task of calculating income by using OCR-enabled technology, and now offers digital transcripts to provide a complete picture of a borrower’s
income. The system can read and analyze borrower income documents and calculate qualifying income associated with the mortgage loan in a consistent manner. IncomeGenius alerts users of possible red flags to allow preemptive intervention. “We highly value partnerships with companies like Indecomm Global Services and recognize that providing lenders a costeffective, automated product that verifies a borrower’s ability to afford a mortgage is critical, or lenders might be exposed to unnecessary risks and compliance headaches,” said Allen Johnson, CEO of Advanced Data Corporation. “Proprietary technology and our unparalleled level of customer service in our ITV division makes this integration with IncomeGenius one that eliminates a pain point that has undermined productivity and is an important advancement for our industry.” Stearns Lending Launches New Mortgage Payment Reduction Program
Stearns Lending LLC has announced the launch of Stearns Smart Start, a new product that reduces monthly mortgage payments during the first 24 months of a customer’s home loan without any additional upfront costs to the buyer. “In a rising rate environment, consumers often become more interest-rate sensitive. We want to make sure that higher rates do not deter well qualified individuals and families from reaching their homeownership goals,” said David Schneider, CEO at Stearns Lending. “Our
talented team members are eager to sit down with customers, clients or business partners to review this program and identify whether it is a ‘best fit’ on a case by case basis.” The program is available on the majority of 30-year fixedrate loans on the Stearns product menu. “Temporarily buying down the interest rate and lowering monthly mortgage payments for a two-year period can be a good strategy for many homebuyers, especially those who expect their income to increase in the relatively near future,” Schneider said.
Fidelity National Integrates Pricing Services Within LendingQB’s LOS
Fidelity National Title has announced it has completed a cooperative integration with LendingQB to offer seamless title services built within the company’s loan origination software (LOS). Fidelity’s partnership with LendingQB centralizes title quoting and ordering within one user interface
in the LendingQB LOS. By keeping the user inside the LOS environment, the time and cost to close the origination is reduced in an effort to meet the closing deadline. “We are excited to bring this new efficiency to our busy lenders who have selected us for our premier service,” said Fawn Downing, vice president of the Lender Division for Fidelity National Title. “Lenders can now obtain up-front pricing, as well as click-to-order, without ever leaving the LendingQB LOS. Streamlining processes for our
customers is very important to us.” LendingQB’s open-architecture application program interface (API) provides mortgage service vendors such as Fidelity National Title with unique and powerful access to customers by embedding seamless functionality directly within a lender’s workflow. “LendingQB is successful because of the partnerships we have with companies like Fidelity National Title,” said Tim Nguyen, continued on page 18
Built Announces Integration With Encompass
13
NationalMortgageProfessional.com
n National Mortgage Professional Magazine n JUNE 2017
Built has announced that its collaboration and draw management platform will be available through Ellie Mae’s Encompass all-in-one mortgage management solution. The integration allows Encompass users to efficiently manage construction loans from pre-closing through postclosing via Built’s construction lending automation software. Built’s collaboration platform enables lenders to connect with borrowers, builders, and draw inspectors, bringing transparency and efficiency to the entire draw process for everyone involved. The Built platform empowers lenders to manage these loans with less risk and greater operational efficiencies while also delivering their clients a best-in-class digital experience. The integration will be available to all Encompass customers in summer 2017 and Built has already begun reserving implementation slots. “We are thrilled to partner with Ellie Mae and move this underserved area of the industry forward,” said Chase Gilbert, president and CEO of Built. “Our seamless integration with Encompass enables mutual clients to simplify the painful process of managing construction loans by taking them off spreadsheets and paper files, and bringing them online. We support what Ellie Mae continues to do for the industry and look forward to building a long-term relationship helping our mutual clients succeed.”
WSFLASH y JUNE 2017 y NMP NEWSFLASH y JUNE 2017 y NMP NEWSFLASH y JUNE 2017 y NMP NEW
UWM Survey: Millennials Eager to Become Homebuyers
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
14
According to a 2017 online survey from Michigan State University and United Wholesale Mortgage (UWM), Millennials are eager to put down roots and enjoy the “freedom” that comes from homeownership—with 95 percent of those surveyed saying they are actively saving for a purchase, and 90 percent planning to buy within two years. The survey—which included 412 people nationwide (210 homeowners and 202 potential homeowners) ages 25 to 34— found that a vast majority of would-be buyers are dissuaded from purchasing because they think they don’t have enough for a downpayment. Of those who took the survey, 70 percent said that saving for a downpayment is the biggest obstacle to achieving their goal of homeownership; and 67 percent believed they needed to save up the full 20-percent down. According to the survey, 25 percent of homeowners have average household income under $50,000 per year, and 40 percent of homeowners had student debt when they closed on their home. When it comes to saving for
a downpayment, even small changes in spending habits— brown bagging lunch instead of buying out, or skipping Starbucks for a year—can bring would-be buyers over the finish line. What’s more, the ability to close on a home for less cash upfront can help borrowers pay for critical expenses associated with homeownership such as remodeling and renovations. As one of the primary hallmarks of “adulthood,” homeowners are more likely than their counterparts to have completed major rites of passage, including obtaining credit cards, taking out an auto loan, having a 401(k) and purchasing a new car. Other notable findings of the survey are: l Ninety-one percent of respondents view homeownership as a financial investment, but not an easy one to make l Sixty-seven percent worry about being approved for a mortgage l Fifty-three percent are afraid they won’t be able to make payments on a mortgage l Thirty-six percent of homeowners were not married when they bought their first home l Forty-two percent of homeowners used gifted money towards a downpayment
Franklin American Mortgage Named NAMB Double Diamond Industry Partner
Franklin American Mortgage Company (FAMC) has announced that it has become a Double Diamond Industry Partner with NAMB—The Association of Mortgage Professionals. This exclusive status is given to NAMB’s top contributors each year. “NAMB is the mortgage industry’s premier membership organization, and Franklin American Mortgage’s Double Diamond Industry Partnership clearly shows our ongoing commitment to the broker channel and the continued growth of FAMC Wholesale Lending,” said Andrew Taylor, FAMC’s executive vice president, director of National Sales. “Franklin American Mortgage is a long-time supporter of NAMB and we have always been pleased with the results this partnership produces.” Franklin American Mortgage first began sponsoring national and regional NAMB shows in 2008, and became an industry partner in 2012. Recognition form this partnership has helped FAMC grow to become one of the top 12 wholesale lenders in the nation. “NAMB is excited to welcome Franklin American Mortgage
Company as a Double Diamond Industry Partner,” said Fred Kreger, president of NAMB. “We applaud their commitment to dedication to the mortgage lending arena and furthering the dream of homeownership for America’s consumers. NAMB looks forward to a successful collaboration between the association and FAMC.” Trump Administration Releases 2018 HUD Budget Proposal
The Trump Administration has announced its proposed 2018 budget for the U.S. Department of Housing and Urban Development (HUD), which includes up to $400 billion in new loan guarantee authority and making changes to strengthen Federal Housing Adminsitration’s (FHA) Home Equity Conversion Mortgage (HECM) and $500 billion in new guarantee authority for Ginnie Mae. The budget also seeks $65.3 million to support HUD’s fair housing mission, which the department noted was the same funding level provided in the last three years, and it provides $2.25 billion to help local communities meet the housing needs of homeless individuals and families. However, the administration has proposed eliminating Community
Q1 Profits Down for Independent Mortgage Banks
“The drop in overall production volume in the first quarter of 2017 resulted in the highest perloan production expenses reported since inception of our study in the third quarter of 2008,” said Marina Walsh, MBA’s vice president of industry analysis. “While higher production revenues mitigated a portion of the cost increase, production profitability nonetheless declined by more than half the previous quarter. For those mortgage bankers holding mortgage servicing rights (MSR), an increase in mortgage
interest rates resulted in MSR valuation gains and helped overall profitability.” Homeowner Equity Continues to Rise Homeowners with mortgages enjoyed a year-overyear equity increase totaling $766.4 billion in the first quarter, according to new data continued on page 16
15
n National Mortgage Professional Magazine n JUNE 2017
Independent mortgage banks and the mortgage subsidiaries of chartered banks brought in a net gain of $224 on each loan they originated in the first quarter, a significant drop from the reported gain of $575 per loan in the fourth quarter of 2016, according to the Mortgage Bankers Association’s (MBA) Quarterly Mortgage Bankers Performance Report. Average production volume was $455 million per company in the first quarter, down from $690 million per company in the fourth quarter of 2016. The volume by count per company averaged 1,944 loans in the first quarter, below the 2,811 loans from the previous quarter. The average pre-tax production profit was 10
basis points (bps) in the first quarter—it was 24 bps in the fourth quarter. But there were increases in the first quarter: Total loan production expenses hit a study-high of $8,887 per loan in the first quarter, considerably higher than the $7,562 in the fourth. Personnel expenses averaged $5,802 per loan in the first quarter, compared to $5,001 per loan in the fourth quarter. But productivity dropped to 1.7 loans originated per production employee per month in the first quarter, below the 2.7 level in the previous quarter.
NationalMortgageProfessional.com
Development Block Grant Program, claiming that it “has not demonstrated a measurable impact on communities.” Also facing the chopping block are HUD’s Choice Neighborhoods Initiative, HOME Investment Partnerships Program, and the Self-Help Homeownership Opportunity Program—the administration argued that state and local governments are “better-positioned to serve their communities’ needs.” The budget sets aside $1.32 billion for HUD’s internal operations, which includes $250 million for the department’s Information Technology Fund, including $10 million for cybersecurity and modernization investments to help local public housing authorities and managing risks in the FHA mortgage insurance programs. Another $30 million is targeted at an administrative fee to support the modernization of FHA’s aging systems—including those based on the now-outdated COBOL programming language. “This Budget reflects this administration’s commitment to fiscal responsibility while continuing HUD’s core support of our most vulnerable households,” said HUD Secretary Ben Carson. “We will work very closely with Congress to support the critical work of our agency as we vigorously pursue new approaches to help work-eligible households achieve selfsufficiency.”
Streamline Your Marketing
N
owadays, the mortgage industry is fiercely competitive. Marketing your business doesn’t have to be difficult. Look back at the lessons you learned last year and make the necessary changes to simplify your marketing.
Here are some tips to keep in mind when you are marketing that are simple, clear and easy to execute.
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
16
1. Create a marketing plan: Set aside time to work on growing your business. The most profitable lenders are not always those who have the greatest ROI per customer, they are the ones with a marketing plan. 2. Find your audience: Create your own personal market by selecting the customers you want to work with. You can prescreen your customer list in many different ways. Find the customer that is easy to work with and is the longest lasting. By targeting a specific audience, you simplify your message. 3. Diversify your marketing channels (multi-channel marketing): You have to target the same customer several different ways in order to build credibility and attract them to your business. Create a multi-channel marketing campaign that incorporates both an online and offline direct marketing approach and you’ll increase your results. 4. Content: You need content that is going to get your prospect to pick up their phone and call you. Personalize the message you send to your customers. 5. Track, track and track: There is nothing worse than spending money on a marketing campaign and not knowing if it worked or not. What is worse than continuing to spend money on campaigns that did not yield any results? NOTHING! Commit to a few minutes each day to educate yourself on the BEST performing campaigns. The mortgage industry is back and growing stronger each day. If you are not having a strong start to 2017, you have to take a look at your own marketing efforts and how you can make your campaigns perform better. TagQuest client spotlight Each month, we like to talk with our clients and find out how their campaigns are going. Here’s what we heard from one of our mortgage brokers, John F. in Ohio. Product used: Direct mail l Five-thousand direct mail pieces l Forty-five inbound calls to date l Ten applications to date
nmp news flash
continued from page 15
from CoreLogic. On average, homeowners gained approximately $13,400 in equity between from the first quarter of last year to the first quarter of this year. Simultaneously, the total number of mortgaged residential properties with negative equity dropped by three percent from 3.1 million homes in the fourth quarter of 2016 (6.1 percent of all mortgaged properties). On a year-over-year measurement, negative equity decreased 24 percent from 4.1 million homes (8.1 percent of all mortgaged properties). Texas had the highest percentage of homes with positive equity at 98.4 percent, followed by Utah (98.2 percent), Washington (98.2 percent), Hawaii (98.1 percent) and Colorado (98 percent). Nevada had the highest percentage of homes with negative equity at 12.4 percent, followed by Florida (11.1 percent), Illinois (10.5 percent), New Jersey (10.2 percent) and Connecticut (9.9 percent). The San Francisco metro area had the highest percentage of mortgaged properties in a positive equity position at 99.4 percent. “Homeowner equity increased by over $750 billion during the last year, the largest increase since mid-2014,” said Frank Martell, president and CEO of CoreLogic. “The rising cushion of home equity is one of the main drivers of improved mortgage performance. It also supports consumer balance sheets, spending and the broader economy.”
TagQuest Inc. is a full-service marketing firm specializing in marketing for the mortgage industry. Call (888) 717-8980 or visit www.tagquest.com.
IMAGINE • INNOVATE • SUCCEED SPONSORED EDITORIAL
New Study Tracks the Hidden Costs in Home Selling
Suburban Rental Prices Higher Than Urban Markets
Highlights of the campaign that work well for John “Being able to customize the filters to fit my programs worked better than the live transfers I have tried in the past where filters are set kind of low and cannot be changed.” Highlights that could appeal to other loan officers or offices “Calls are more qualified by targeting a specific demographic and more of the prospects seem like they are ready to move quicker.”
percent year-over-year while median suburban rental prices were up three percent. And this goes beyond the multifamily environment—Zillow noted that 19 percent of all single-family homes in the U.S. are rentals, up from 13 percent in 2005. “Because walkable urban centers close to amenities are typically a big draw for renters, you’d expect rents to rise faster in the city than in the suburbs— which is exactly what we’ve been seeing until very recently,” said Zillow Chief Economist Svenja Gudell. “But a handful of factors are helping turn the tables and beginning to push suburban rents up at a higher clip. These include deteriorating rental affordability in expensive urban cores; new apartments, albeit high-end ones, opening downtown compared to relatively few in outlying areas; and preferences among some renters toward the space offered by single-family homes in the suburbs. Rents themselves are still lower in the suburbs, but if demand keeps growing for suburban rentals and supply continues to lag, that will also start to change. As more formerly urban renters move to the suburbs in coming years, we’ll likely start seeing more apartment buildings and walkable amenities popping up in those communities.”
The grass may be greener in suburbia, but the rents are also much higher. According to new data from Zillow, the median monthly cost of a suburban rental rose by 2.5 percent on a year-over-year basis, compared to the 2.3 percent uptick on the median cost of an urban rental. This is a significant difference from last year, when the median urban rental price increased by five
The notion of a home as a money pit was reaffirmed in a new analysis from Zillow and Thumbtack, which found homeowners spend $15,190 on average in extra or hidden costs associated with selling their property. According to the companies, more than eight out of 10 home sellers make improvements before listing. Sellers who outsource these projects can spend more than $2,650 to cover the five most ubiquitous seller home prep projects: staging, carpet cleaning, interior painting, continued on page 24
mart
.2,$ * -+*/$2.*$#21+,-* +$#.-+#1$- # -13-
17
877-855-7493
+2,+ #0#$+ -0 *3 " 32.
Retail
|
Wholesale
|
Correspondent
NMLS 153098. - This information is provided to assist business professionals. This is not an advertisement extended to the 3210/.-,+*0+)-(1-)+'&+%-3$#21+""! " +2 + - / *$#21+ + ,2)/3$+ /#)- #1-0+*,-+ 20$-)+$2+2/,+ -'0#$- + -0 *3 " 32.+ +
+ ,2 -1+%2/1)+ ) + +%/#$-+!
+ 23*+ *$21 + + + +
n National Mortgage Professional Magazine n JUNE 2017
For more information, call
NationalMortgageProfessional.com
Ta aking Mortgage eT Te echnology to the Next N Level
By Mat Ishbia
Big Credit Report Change ositive change for everyone in the industry, eight to 10 percent of all borrowers, are going to have a higher credit score starting July 1. How is this happening? Tax liens and judgments will no longer be reported on a borrower’s credit report, unless Experian, TransUnion or Equifax can verify three of the four main data points (Name, Date of Birth, Address and Social Security Number) for that specific borrower. Moving forward, these things will need to be verified at a higher standard than before. This means that a good percentage of borrowers will have higher credit scores.
P
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
18
Borrowers are paying $13 billion too much The CFPB came out with a report saying that borrowers are paying $13 billion too much because they didn’t shop for their mortgage. It’s a red alert that people should be using mortgage brokers instead of going to mega retail lenders and big banks. Borrowers can get a better deal by going to a mortgage broker. People are settling for the first offer they get, rather than letting a broker shop on their behalf. A similar story was out last year that said that borrowers, on average, are paying five bps more in rate on retail loans (as opposed to wholesale loans) when comparing loans that have the same LTV, FICO score, geographic area and loan amount. That doesn’t sound like much at first, but five bps in rate equals 30 bps in pricing. On a $300,000 loan, borrowers are paying $900 more on a loan by going to a big bank or mega lender. Fannie Mae enhancements Fannie Mae updated their guidelines to make things better for the wholesale mortgage industry, with enhancements going into effect beginning July 29. Here are the details: l Disputed accounts: Fannie Mae will consider the delinquent account in the DU results and will only require it to be addressed if it has a negative impact on the findings. l DTI of 50 percent: No longer looking for specific compensating factors and they will just use the DU risk scoring to determine the max DTI. l Self-employment documentation: Opening up the model to allow for more responses of only needing one year of 1040s when the borrower is self-employed. l Employment offers: Will allow borrowers to begin employment within 90 days after closing without delivering the paystub, as long as they meet all contingencies on their contract and meet a reserve requirement.
Mat Ishbia is president and CEO of United Wholesale Mortgage, a Troy, Mich.-based provider of mortgages for independent brokers nationwide. One of the nation’s leading advocates of independent mortgage brokers and wholesale lending, Mat has changed the lending platform, turning UWM into a $20 billion company and a top national workplace
SPONSORED EDITORIAL
new to market
continued from page 13
president of LendingQB. “We have had a culture of openness and access with our vendor partners since day one. While our API is easy to understand and program to, it is our Integration Team members that really make the difference. We provide our vendor partners with dedicated personnel who have the expertise necessary to make integration projects smooth and less resource intensive. Our goal is to be truly synergistic and deliver maximum value to our mutual clients.”
said Bob Jennings, chief executive officer of ClosingCorp. “SmartEngine provides title companies and lenders of all sizes a streamlined solution that can optimize the closing cost quoting process and effectively leverage rate/fee information—ultimately improving productivity, profitability and customer service.” Guild Mortgage Launches New One Percent Down Program
ClosingCorp Launches New Rate Management Solution
ClosingCorp has announced the release of SmartEngine, an advanced rate management solution that enables title organizations to collect and manage their specific rate and fee data. With this solution, title companies can centralize data processing and connect their rate and fee data to any thirdparty system, including title production systems, Web sites and ClosingCorp’s SmartFees and SmartCalc products to exchange information to produce estimates. SmartEngine, which is based on ClosingCorp’s proprietary rates management solution, enables companies to centralize disparate, often outdated rate management tasks, including the administration of tables, templates or other systems, and optimize the overall closing process. The software as a service (SAAS) solution was designed specifically for underwriters and title companies seeking to create and manage special lender pricing, as well as standard rates for lender use nationwide. This advanced rate and fee management solution also enables lenders to connect to their service providers and reliably exchange information real-time—improving speed, accuracy and compliance with regulations, as well as their own internal processes. “We are committed to investing in and developing a best-in-class suite of products and services for our clients,”
Guild Mortgage has launched a new conventional loan program that requires only a one percent downpayment from the homebuyer. Combined with a two percent grant from Guild, the three percent equity results in a loan with a 97 percent loan-to-value (LTV) ratio. The grant does not need to be repaid. “We were able to create this breakthrough national program because we are a direct lender with many decades of strong investor relationships and firsttime homebuyer expertise,” said Mary Ann McGarry, president and CEO of Guild Mortgage. “We wanted to make homebuying more attainable for more people, including Millennials who are entering the housing market in increasing numbers.” A recent study from the National Association of Realtors (NAR) estimates that Millennials represent 32 percent of all homebuyers and 68 percent of first-time homebuyers. However, Millennials can have trouble saving for a downpayment because of student loans, credit card debt and high rent costs, according to NAR. “With the gift of a two percent grant, Guild is helping solve financing challenges for first-time and move-up buyers with low-to-moderate income,” said David Battany, executive vice president of Capital Markets at Guild. “Because this is a downpayment continued on page 22
READY TO KICKST TA ART YOUR CAREER?
GET UP TO $10,000 TO ST TA ART YOUR OWN MORTGAGE BUSINESS. KickStart Independent Mortgage Program provides up to $10,000 of start up funding for mortgage professionals who want to open their own broker shop. All you need to apply is a minimum of 3 years experience, a business plan, two letters of reference and the desire to be the best choice for your borrowers.
I have been in the industry for almost 20 years, in all areas of the business, and have vast knowledge of our business as a whole. I think that my decision to be "on my own" put me in the best position I could be in for not only my prrofessional visions and goals, but most of all for my customers. I am able to ďŹ nd the best lending product and lending institution that ďŹ ts the need of the borrower with the most favorable terms with complete transparency of the fees charged and income made to produce that loan. n.
A NAMB Program Founding Sponsor UWM
n National Mortgage Professional Magazine n JUNE 2017
Lisa Wa Warren President LW L W Financial Services
NationalMortgageProfessional.com
Apply today at nambkickstart.com
19
N A M B
P E R S P E C T I V E
NAMB President’s Message: June 2017
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
20
Industry stakeholders to pave the way for our future I wanted to lend an article to our industry stakeholders and identify who they are and their responsibilities. You have heard me and many others within NAMB talk about the term “Stakeholders.” This is everyone who has a hand in mortgage loan origination for the consumer. It starts with the originator then to the lender (banker or wholesaler) and all other ancillary services. So why am I dedicating an article to this subject? Because coming off of the NAMB Legislative & Regulatory Conference and some key discussions with leaders from mortgage banks and wholesalers, I thought I would engage with everyone about your stake in OUR industry. This message did begin with our Wholesale Lenders Summit at our NAMB Conferences, and has spawned into a much bigger conduit for affecting change in our industry. Each of us stakeholders, and this includes everyone reading this message, has a responsibility to give back to our industry that supports our families. How do you do this? Participate, Educate and Reach Out. This is our common message about what NAMB is and what we represent. We are not silos, nor should we think we are an island to ourselves. We are the mortgage industry and need to enable ourselves to affect change. Each stakeholder in the mortgage industry needs to do one more thing. YOU need to determine what that is. This is a common message of mine and needs repeating. If you are NOT a member of NAMB or an NAMB state affiliate, sign up NOW. If you are a member, then volunteer on a committee that strikes your passion. If you have served on a committee, then become a member of the board. This is not asking too much. Can you imagine how we (NAMB or your state associations) would look if we just did that two percent more than we did last year. Just think about the possibilities and growth as an industry and a champion for your clients. Because ultimately this is where we all need to go with respect to service. This point is so key: Service. I want to encourage, if not implore, all of you to reach out today and make a commitment to NAMB and your local association. We need you! Thank you and Namaste. Fred Kreger, CMC is vice president of Enterprise Retail Production at American Pacific Mortgage. He is currently the president of NAMB— The Association of Mortgage Professionals and past president of the California Association of Mortgage Professionals (CAMP). He can be reached by e-mail at Fred.Kreger@APMortgage.com or call (661) 4008905.
NAMB Government Affairs Update Keeping PACE With the Environment By Michelle Velez, CMC
There is a lot of talk about green energy or clean energy. As Americans strive for more clean energy, they look to programs that offer or enhance clean energy. Generating electricity from renewable energy rather than fossil fuels offers significant public health benefits. The air and water pollution emitted by coal and natural gas plants is linked to breathing problems, neurological damage, heart attacks and cancer.
A way to utilize clean energy is through Property Assessed Clean Energy (PACE) which is a way to finance energy efficiency upgrades or renewable energy installations for buildings. Some examples include adding more attic installation to installing rooftop solar panels. In some areas of the U.S. with PACE legislation in place, municipal governments offer a specific bond to investors and then loan the money to consumers and businesses to put towards an energy retrofit. The loans could have a term somewhere between five and 25 years through an annual assessment on their property tax bill. The loans are typically attached to the property and not to the individual. Homeowners can agree to a voluntary contractual assessment to pay back a loan that funds the improvement. The assessment becomes a part of the tax bill. Because repayment is treated as a tax assessment, any delinquency in the lien associated with the improvement is granted a super-priority status. That means it must be paid back before any other mortgage, including first mortgages, when the property is sold. The Federal Housing Finance Agency (FHFA), the regulator of Fannie Mae and Freddie Mac, has made it clear that properties with these loans attached are not eligible for financing. This makes home purchasing and/or refinancing very difficult if not impossible. Fannie Mae and Freddie Mac’s inability to purchase mortgages with PACElike financing have two serious implications for borrowers: l l
First, a homeowner with a PACE loan cannot refinance their existing mortgage with a Fannie Mae or Freddie Mac mortgage. Second, anyone wanting to buy a home that already has a PACE loan cannot use a Fannie Mae or Freddie Mac loan for the purchase.
These consequences are substantial and may preclude a homeowner from completing the transaction. Ultimately, a homeowner wanting to refinance or sell their property will be forced to pay off the entire PACE loan balance. PACE financing reduces the marketability of houses with such financing. Purchasers are reluctant to enter transactions where PACE loans exist. Many times homeowners are surprised when PACE liens must be paid off before they can sell dramatically reducing the equity they anticipated. If you are buying a home with PACE financing, you would most likely receive less favorable loan terms. Even if a buyer is willing to take responsibility for continuing to pay the outstanding PACE loan, they won’t be able to get a loan Fannie Mae or Freddie Mac loan and will be forced to acquire more expensive financing. Homeowners cannot sell without writing a check. If the cost of repaying the PACE loan and any mortgages on the property exceed the purchase price of the home, the seller will be forced to make up the difference. This will prevent some homeowners from selling when they want to. The biggest problem is that there are no adequate disclosures. Current disclosures given to homebuyers do not explain the potential consequences of using PACE loans. Homeowners are often surprised to find that refinancing and selling the property have become difficult or even impossible. Recently, Rep. Brad Sherman (D-CA), introduced HR 1958–The PACE Act of 2017, “Protecting Americans from Credit Entanglements Act of 2017.” The purpose of HR 1958 is to amend the Truth-inLending Act to include retrofit loans, such as property-assessed clean energy loan. This would require PACE lenders to provide consumers with the same TRID-like disclosures required on conventional residential lending. HR 1958 would create a new disclosure that would be required to be provided at the time of application for a real property retrofit loan. 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.
N A M B
P E R S P E C T I V E
NAMB Education Corner: Attend Your State Mortgage Broker Conference By Bob Sweeney, CRMS
I was searching the Internet recently in an attempt to determine how many individual state mortgage broker conferences are planned or have already been conducted this year. Unfortunately, there is no comprehensive list, but I did find that 26 states have education/marketing/regulatory conferences. In this digital world, having the opportunity to connect face-to-face with likeminded individuals can be a rarity. But let’s face it, many business deals aren’t made at the office, so attending educational/marketing/regulatory conferences can be crucial to the success of a company’s strategy or individual’s growth strategy. The following is a list of key benefits and reasons why you should consider attending your state mortgage broker conference this year. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.
If you have read any of my previous articles, you know I am big advocate of non-credit education for continued success. Here is yet another example non-credit education and individual professional development for sales success. Start your journey to success today and attend your next state mortgage broker conference.
We welcome any input from all mortgage professionals. If you would be interested in joining the Education Committee and become part of our future success in the education of our independent mortgage companies and mortgage loan originators, please feel free to contact me. If you are not an NAMB member, now is a great time to become a member. Go to your state association Web site or NAMB.org and join as a Professional Member. Bob Sweeney, CRMS is the mortgage sales manager for Teachers Credit Union, director for NAMB–The Association of Mortgage Professionals and serves as NAMB Education Committee chairman. He can be reached by phone at (317) 625-3287 or e-mail at RSweeney@TCUnet.com.
The NAMB Experience By Linda McCoy, CRMS
What are you doing this summer to increase your business or keep up with the business you have? I can see the value of NAMB in my business. NAMB is the trade group
Linda McCoy, CRMS of Mortgage Team 1 Inc. in Mobile, Ala. is a member of the NAMB board of directors and Membership Committee co-chair. She may be reached by phone at (251) 650-0805 or e-mail Linda@MortgageTeam1.com.
Join NAMB KickStart on Social Media By Rocke Andrews, CMC, CRMS NAMB KickStart has been promoting itself via social media. On Facebook and Google+, you can keep up with the latest winners of NAMB KickStart grants and learn about new business ideas. We are setting up these community pages for the sharing of ideas to serve as sources for small businesses across the country. As a new small business loan originator, whether a beneficiary of an NAMB KickStart award or not, you can ask questions and share your thoughts on different tools and sources for information needed to run a small business in these times. You can compare software, technology or other items needed to run your own business in today’s marketplace. Keep in mind that these are just recommendations from other people like you, and you will still need to check your state’s requirements and regulations as these can vary greatly from state to state, as well as misinterpretation from person to person. But in any manner, it can be helpful in instilling new ideas for marketing and running your business in an efficient and price-effective manner. So go to Facebook, Google+ and LinkedIn and search for NAMB KickStart to ask questions or see what is happening as a result of this exciting program. Search “NAMB KickStart” on Facebook or visit https://goo.gl/hG2JuD. Search “NAMB KickStart” on Google+ or visit https://goo.gl/3l3630. 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.
n National Mortgage Professional Magazine n JUNE 2017
“Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful.”—Albert Schweitzer
21
NationalMortgageProfessional.com
14.
Educational course offerings Build meaningful relationships Stay informed on the most current industry related news. Network with new people within your field or reacquaint with old friends. The ability to share your ideas and get immediate feedback from credible individuals. Enables you to evaluate the latest technologies that can potentially help grow your business. Get answers to your questions relative to your business from knowledgeable individuals. Buy new products or services that are usually discounted for the conference. Connect with possible new investors. Learn about the latest products and services from wholesale exhibitors. Collect presentations and resources for later reference and study. Learn about facts and statistics that will help you to better understand the market and our industry. Increase your contact base and build on your referral system by collecting and passing out business cards. Legislative updates.
that gives originators the most value for their dues. NAMB is trying to “Train the Best” originators by going around the country training originators in regional settings, as well as at national conventions. Relationships are a big part of the NAMB experience. Lenders each have their own support teams within their corporations, and NAMB brings them together at these events to network with its members. NAMB’s primary focus is its members. NAMB has spent many years branding the association for the originator and trying to help them grow their businesses by education, bringing them new and exciting technology, along with training them and making sure they stay in compliance. NAMB is like a family to it members. They take care of each other. I am always looking for a way to help my team at Mortgage Team 1 Inc. work faster, move through the loan process as smoothly and efficiently as possible, and get the loans to the closing table so that everybody is happy. I always bring back great ideas from NAMB events that are used to improve my business. Some ideas work well and I always love the energy I feel at these conventions with the meeting of the minds. I have learned so much from other originators. I seem to always ask the same questions at these events. My favorite question is: Who is your favorite lender and why? I never get the same answer, but I always leave with a lot of great ideas to implement when I enter my office. This summer, I am revamping my business plan and stepping out of my comfort zone and am trying some great ideas I learned from one of the top lenders in the U.S. made possible because I am an NAMB member. We hired someone fresh out of college last year and have trained them on how to process and originate. They passed their NMLS test and will have a great future. I just hired another individual fresh out of college and she is being trained by last year’s college graduate! Each one must train their replacement as a processor while studying to take their NMLS test. I am building my business this summer, and I thank NAMB for that! I feel like the things I have learned from my fellow NAMB members and at NAMBsponsored conferences are going to take my business to a new level this year.
California DBO Provides Additional Guidance for California Per Diem Interest Compliance By Gavin T. Ales
A
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
22
fter numerous requests from California residential mortgage lenders regarding the types of documents, records, information, data or other forms of verification that would evidence compliance with California’s per diem statute, the Commissioner of Business Oversight has issued revised Release No. 58-FS to describe acceptable forms of evidence. The California Department of Business Oversight (DBO) provided this additional guidance to licensees under the California Residential Mortgage Lending Act (CRMLA) for documenting compliance with Financial Code § 50204(o) and the per diem statute, Civil Code § 2948.5. Except for limited circumstances, California’s per diem statute prohibits a lender from requiring a borrower to pay interest for more than one day prior to the disbursement of loan proceeds from an escrow for a loan evidenced by a promissory note and secured by a mortgage or deed of trust on real property with up to four residential dwelling units. Section 50204(o) prohibits CRMLA licensees from violating the per diem statute and provides that per diem statute compliance may be demonstrated by either a licensee’s certification that is not paid for by the borrower under Code of Civil Procedure § 2015.5 or by other evidence in the loan file that is acceptable to the Commissioner. What constituted “other evidence in the loan file that is acceptable to the Commissioner” caused ambiguity in the minds of many CRMLA licensees. Accordingly, the Commissioner published revised Release No. 58-FS as guidance, particularly following the adoption of the TILA-RESPA Integrated Disclosure rule and licensees’ ongoing efforts to show compliance with the per diem statute given these changes to federal law. The DBO’s revised Release is intended to help licensees identify other evidence in loan files that establishes compliance with the California per diem statute during routine regulatory examinations by the DBO. To that end, the Commissioner has advised that acceptable evidence for compliance may consist of the following: l Electronic or written records of communications between the licensee and the settlement agent that verify the loan disbursement date, identify the settlement agent’s name, and provide the settlement agent’s contact information in the form of an electronic or business address; or l Contemporaneous electronic or written records that memorialize verbal communications between the licensee and the settlement agent which verify the loan disbursement date and identify the settlement agent’s name and telephone number. Note that if the evidence provided to demonstrate compliance with the per diem statute appears to be uncertain or unclear from a review of the information disclosed, the Commissioner may request additional information to demonstrate per diem statute compliance. Further information concerning acceptable evidence may be found under the “Frequently Asked Questions” at the end of the revised Release. Gavin T. Ales is chief compliance officer with Torrance, Calif.-based DocMagic Inc. He may be reached by phone at (800) 649-1362, ext. 6446 or e-mail Gavin@DocMagic.com.
SPONSORED EDITORIAL
new to market
continued from page 18
assistance program, there are income limits, required homebuyer classes and additional parameters. Income limits do not apply for properties in low-income census tracts.” MGIC to Integrate MI Rates Within Optimal Blue
Mortgage Guaranty Insurance Corporation (MGIC) has announced the availability of affordable lending mortgage insurance rates through Optimal Blue’s Product and Pricing Engine. With this enhancement, when customers choose affordable product coverage, the interface displays HomeReady, Home Possible and HFA mortgage insurance rates. “The enhancement provides a market advantage to Optimal Blue and MGIC customers,” said Harper Wong, director of Community Lending Solutions at MGIC. “Loan officers can now target borrowers who qualify for affordable products by providing accurate MI quotes in real-time.” Bob Brandt, vice president of Marketing and Alliances for Optimal Blue, said, “As the industry’s leading secondary market automation platform, Optimal Blue’s mission is to provide the most accurate product eligibility and pricing content to our lenders— wherever and whenever it matters most. In partnership with MGIC, we are proud to take another step forward with that mission by incorporating more precise mortgage insurance rates for affordable housing.” New FloodzoneData.us Tool Tracks Floodplain Housing
and housing located in the nation’s floodplains. FloodZoneData.us offers an interactive map and data downloads covering the state, county, and Census tract levels. According to the Furman Center, this new tool combines housing and population data with FEMA maps of the 100-year floodplain (the term for areas with a one percent probability of flooding each year) and the 500-year floodplain (areas with a 0.2 percent probability of flooding each year). In the first public data analysis released by using FloodzoneData.us, it was determined that Florida, Texas, and California have the largest numbers of housing units in the 100-year floodplain, while the majority of the housing units in the combined 100- and 500-year U.S. floodplains are single-family homes (64 percent) and owneroccupied (62 percent). Nine percent of all public housing units and eight percent of all privately-owned subsidized rental housing units are located in the combined 100- and 500year floodplains. “Severe climate events are becoming more common, and policymakers in areas across the country are grappling with how to address the risks to residents and communities from flooding,” said Jessica Yager, executive director of the Furman Center. “Having access to data is crucial for effective disaster response and resilience planning. By providing detailed information about the population and housing stock in the floodplains, we hope this tool will help policymakers and communities plan for a more resilient future.” 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@MortgageNewsNetwork.com
New York University’s Furman Center has debuted FloodzoneData.us, an online data tool describing the people
Note: Submissions sent via email are preferred. The deadline for submissions is the 1st of the month prior to the target issue.
NAMB+ is an independent, wholly-owned, for-profit marketing subsidiary of NAMB, The Association of Mortgage Professionals. Dear Mortgage Professional, This is the Technology Issue of NMP Magazine and NAMB+ has several Endorsed Providers that can help you improve the efficiency, connectivity, security and profitability of your business through innovative technology solutions. Technology is no longer just a nice-to-have tool that makes our operations more efficient. Technology is integral to our business operations and our customers’ experience. MortgageHippo is the most borrower-centric digital mortgage platform in the industry, and MortgageHippo was designed with one purpose in mind: to “wow” consumers every step of the way. NAMB members receive a 25% discount by simply mentioning their membership in NAMB. SYNCRO connects mobile loan originators to live website leads via a real-time chat technology that works with the SMS on our mobile phones. NAMB members
have instant access to a FREE account and receive a 10% discount off regular prices for monthly unlimited SYNCRO Web Chat packages. Finally, with enhanced reliance on technology solutions comes increased risks. InfoSight offers proven and affordable cyber security, risk management, IT infrastructure and compliance solutions to protect our businesses and our customers from both cybercrime and fraud. Visit NAMBPlus.com for more details about these great offers and all our other tremendous NAMB+ Endorsed Providers. Sincerely,
Nathan Pierce, CRMS, CMP, President NAMB+, Inc. l npierce@advfund.com
See below for a complete listing of the current NAMB+ Endorsed Providers and visit NAMBPlus.com for more information. Full-service mortgage credit reporting company serving the nation’s financial community. Avantus provides custom mortgage credit reports, fraud and compliance solutions, and innovative lead generation products available exclusively to Avantus customers. Learn more at Avantus.com. NAMB members receive a discount off Brokers Compliance Group compliance support programs.
NAMB members receive a 15% discount on all Custom Canvas Prints products and services!
InfoSight, Inc. offers proven and affordable cyber security, risk management, IT Infrastructure and regulatory
MortgageHippo Swift allows loan originators of all sizes to deliver a modern borrowing experience, significantly improve borrower conversions, reduce origination costs and integrate with other innovative technologies in the mortgage industry. NAMB members will receive a 25% discount. Please visit www.mortgagehippo.com/swift/.
Sarma gives you access to their extensive resources including: merged reports from the three top credit bureaus, CreditXpert tools, AVM Reports, SocialValidate, TRV Verification, Interface with over 30 LOS, Fannie and Freddie connection, Verification of employment/deposit and much more. Please visit http://www.sarma.com/quickqual/ NAMB Members will receive a Twenty-Five Percent (25%) discount off of the regular price with their NAMB Membership. Simplii VOIP business phone solutions include all the features and functionality of a high end business phone system without the high costs. We offer all NAMB members a 10% discount off their phone services. For more information please e-mail stevew@simplii.net
SYNCRO connects mobile salespeople to their office website leads. NAMB Members receive a 10% discount off regular prices for monthly unlimited SYNCRO Web Chat packages.
23 The Bond Exchange is a national surety agency specializing in providing mortgage license bonds to thousands of mortgage professionals across the country.
USA Business Lending is the nation’s premier commercial brokerage firm representing over 3500 lenders.
NAMBPLUS Login Instructions Username = Member Number Password = First initial of your first name capitalized and your last name with the first letter of the last name capitalized (example = JStevens)
If you are not a NAMB member please visit NAMB.org and join today to gain access to NAMBPLUS.com and the many benefits NAMB members receive!
n National Mortgage Professional Magazine n JUNE 2017
eEndorsements promotes your success by making it easy to capture customer reviews, control your content, and publish your testimonials where they matter to drive new business. Automatically share your reviews on Facebook, Twitter and Linkedin. Easily invite your clients to share reviews to sites like Yelp and Zillow. eEndorsements will also hosts a review profile page indexed and found in Google Search. eEndorsements offers a 34% discount to NAMB Members. For more info please visit http://eendorsements.com/namb.
MassMutual Disability Income Through an arrangement with Massachusetts Mutual Life Insurance Company (MassMutual), NAMB members have an opportunity to apply for individual disability income insurance (DI) at discounted rates. Learn more by calling Andrew Berman at 516-652-1819
If you want a social and mobile marketing strategy that gets noticed contact Social5 today for a FREE consultation and demo and to receive your NAMB member discount pricing.
NationalMortgageProfessional.com
CalSurance® offers competitively priced Professional Liability Insurance for NAMB members. Multiple coverage options and an easy application process are available. Visit www.calsurance.com/namb for program details and to apply.
compliance solutions. Visit www.infosightinc.com or contact us at 305-828-1003 / 877-577-9703.
Does Mass Marketing Work to Attract Proven Producers? By Steve Rennie
T
he more appropriate question may be, “Have you actually hired a strong producer with a transferable book of business using mass marketing?” If so, are they successful or even still with you? There are always exceptions to the rule, but in our opinion (with hindsight going back 20-plus years), the simple answer is “NO.” The common strategy is to get a list of hundreds or thousands of loan officer contacts and e-mail them regularly for the purpose of having them evaluate an opportunity. Why doesn’t this work? The strong producers are “relationship-oriented” and don’t respond to unsolicited e-mails, when they are open to evaluating change, they tap into their network of peers and trusted relationships to engage. While mass marketing may not always be the right way to get on someone’s radar, marketing does play a part in branding and awareness. Like other aspects of your business, it is one part of a multi-prong strategy that collectively keeps you in front of and top-of-mind with Model Match producers. Here are three proven ways you can improve your success:
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
24
1. Target list: Have a target list. Target companies “like” or “less than like” you. Don’t target big banks if you are not one. You will be fishing in the wrong pond. Most managers have between 25-50 contacts they specifically target. This is manageable. 2. Phone calls and meetings: Without a true relationship, you will fall further down the list of contacts they would reach out to. Differentiate yourself with a voice over the phone and face to face meetings. 3. Marketing: Marketing is a BIG subject. Through a combination of value-based drip e-mails and being visible on the inter-Web and in social media (Facebook and LinkedIn), you will have a multi-pronged strategy for creating top-of-mind awareness. We still believe that monthly drips work best. The subject matter should be relevant to the industry, not “Come Work for Us.” Why? Because “Come Work for Us” only captures those actively looking. Your best future hires might not be looking for months or even years. Valuable content keeps you top-ofmind. Marketing plays a part in the relationship development and trust-building process. On its own, marketing is not a plan for growing and retaining proven producers. We continue to see validation of this and results with our successful clients on the Model Match platform. Only through targeting the right people and intentionally developing a relationship over time will you put yourself in a position to be on the short list when these Model Match producers are intending to make a change.
Steve Rennie is chief sales officer with Model Match Inc., a technology platform and business plan used internally by sales leaders and executives at banks and mortgage companies to grow and retain production organically. He may be reached by e-mail at Steve.Rennie@ModelMatch.com.
SPONSORED EDITORIAL
nmp news flash
continued from page 16
lawn care and house cleaning. Labor costs vary significantly by region, with Los Angeles sellers spending an average of $4,000 for the same projects that cost $1,500 in Columbus, Ohio. The two largest closing costs are agent commissions and in most states, sales or transfer taxes. Nationally, sellers spend $12,532 for both closing costs on the median home, although costs are much higher in the more expensive markets: for example, sellers in San Francisco pay $51,520 on the median home. In comparison, sellers in Indianapolis only pay $8,238—plus, Indiana does not have a transfer tax. “One of the biggest regrets sellers have is not starting the process early enough,” says Jeremy Wacksman, Zillow Group chief marketing officer. “For those planning to sell this year, take your time to research all the costs you could be responsible for and how they may affect your profit, or even budget for your next home. Partner with a great agent who can help you understand the nuances in your market – from what taxes or closing costs you should expect, to which home renovation projects can help attract the right buyer.” Phishing Attack Targets DocuSign
San Francisco-based DocuSign has alerted its customers that it has been the target of a phishing attack. “We confirmed that a malicious third-party had gained temporary access to a separate, non-core system that allows us to communicate service-related announcements to users via email,” said the company in a message on its corporate blog. “A complete forensic analysis has confirmed that only e-mail addresses were accessed; no names, physical addresses, passwords, Social Security Numbers, credit card data or other information was accessed. No content or any customer documents sent through DocuSign’s eSignature system was accessed; and DocuSign’s core eSignature service, envelopes and customer documents and data remain secure.” DocuSign stated that the
phishing e-mails attempted to “trick recipients into opening an attached Word document that, when clicked, installs malicious software.” However, the company insisted that its eSignature service, envelopes and customer documents remained secure, although it is not clear what level of damage occurred as a result of this incident. Study: City Dwellers Have More Financial Angst
When it comes to financial confidence, urban residents are much more jittery about their monetary health than their suburban or rural counterparts, according to NeighborWorks America’s fourth annual consumer finance survey. In a recent poll of 1,000 adults, NeighborWorks America found 31 percent of American adults living in urban areas were either “not too confident” or “not confident at all” of their ability to withstand a sudden financial emergency. In comparison, 28 percent of rural adults and 25 percent of suburban residents reported a similar agitation. Furthermore, 15 percent of urban residents said their savings would last less than one week in the event of a financial crisis, whereas only eight percent of rural and suburban adults expressed the same thoughts. Thirty percent of suburban adults and 22 percent of those living in rural areas reported their savings would last more than one year, but only 18 percent of urban residents could make that claim. Nationally, 30 percent of adults, or as many as 70 million people, said they have no emergency savings; 32 percent of city dwellers reported a lack of emergency savings, compared to 24 percent of suburban residents and 33 percent of rural adults. Within racial demographics, 29 percent of white respondents reported no money saved in case of emergency, while 41 percent of Africa-Americans and 26 percent of Hispanics had the same state of affairs. On the housing front, 22 percent continued on page 26
25
NationalMortgageProfessional.com
n National Mortgage Professional Magazine n JUNE 2017
New York Adopts New Cyber Security Regulations for Lenders By Andrew Liput
E
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
26
ffective March 1, 2017, all lenders operating in New York State were notified that they have 180 days to ensure compliance with 23 NYRCC 500, “Cybersecurity Requirements for Financial Services Companies.” These new regulations establish specific safeguards that lenders are expected to adopt, as well as audit, risk assessment, third party service provider oversight, annual reporting and incident reporting rules. Generally speaking, the regulations establish that all lenders need to have policies, procedures and monitoring tools to safely collect, manage, transmit and use Non-Public Private Information of Consumers (NPPI). Testing of systems and controls are a critical part of the new rules and incorporate periodic penetration testing and vulnerability assessments. Lenders are expected to effectively manage anyone with access to NPPI, including employees and thirdparty service providers. With respect to third parties, a lender must establish a separate written policy for managing cybersecurity risk with respect to vendors. This includes identifying those who are a potential risk, establishing minimum cybersecurity practices required to be met by the vendor, monitoring and periodic assessments of vendor compliance, and immediate reporting of a vendor’s violation of its rules and/or in the case of a cybersecurity incident. Vendors should have internal policies managing this risk, train and monitor their own employees, adopt encryption and other tools to mask and protect the transfer and collection of NPPI to and from consumers and lenders, and also have a proper incident reporting process. While cyber liability insurance is not a requirement either for banks or vendors, in this era of technology breaches, identity theft and phishing, it is highly recommended as a backstop against potential incidents. All lenders are required to file a certification signed by authorized owners or corporate officers attesting to full compliance with this new regulation. The transition period ends Aug. 31, 2017, so that effective Sept. 1, all lenders operating in New York State must have filed a certification of compliance. Lenders operating in New York are strongly urged to immediately become familiar with this new rule, retain appropriate internal (and if necessary external) assets to develop appropriate policies and procedures. Lenders must also begin the process of notifying their vendors who have access to NPPI that they too will be obligated to meet these new regulations for managing data security and privacy to avoid cybersecurity incidents.
Andrew Liput is CEO of Secure Insight, a risk analytics firm offering vendor management services addressing settlement agent risk. He can be reached by e-mail at ALiput@SecureSettlements.com.
SPONSORED EDITORIAL
nmp news flash
continued from page 24
of respondents living in a city said they needed help with buying or renting a home, compared to 12 percent of rural and suburban adults, respectively. More AsianAmerican residents (25 percent) reported needing help when purchasing a home, twice the rate for whites (12 percent) and higher than the 22 percent and 17 percent, respectively, of AfricanAmericans and Hispanics. Fewer But More Expensive Homes Are Being Flipped
compared to a year ago and average home flipping returns decreased for the second consecutive quarter,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Home flippers financed an estimated $3.5 billion in purchases for homes flipped during the quarter, up from $3.3 billion in the previous quarter and up from $2.4 billion a year ago to the highest level since the fourth quarter of 2007—a more than nineyear high.” Survey Finds Policy Changes Could Benefit Lending Environment
There was much less bounce in the home flipping market during the first quarter, according to the latest numbers released by ATTOM Data Solutions. In the first three months of this year, 43,615 single family homes and condos were flipped with a 12month period, down eight percent from the previous quarter and down six percent from a year ago. The first quarter marked lowest number of homes flipped since the first quarter of 2015. However, flipped homes represented 6.7 percent of all single-family home and condo sales during the quarter, up from 5.8 percent in the previous quarter and unchanged from a year ago. Homes flipped in the first quarter were sold for a median price of $200,000, a gross flipping profit of $64,284 above the median purchase price of $135,716, up from a gross flipping profit of $63,500 in the previous quarter and a gross flipping profit of $59,100 in one year earlier. The first quarter’s median price is an all-time high. But the $64,284 average gross flipping profit translated into an average 47.4 percent gross return on investment (ROI) for homes flipped in first quarter, down from an average 49 percent average gross flipping ROI in the previous quarter and an average 48.5 percent average gross flipping ROI one year earlier. This was the second straight quarter where the average gross flipping ROI decreased on a year-over-year basis following six consecutive quarters of year-over-year increases. “The business of financing for home flippers continued to grow in the first quarter of 2017 even as the home flipping rate plateaued
A large majority of lenders surveyed (73 percent) believe the Trump Administration’s policies will have a positive impact on the lending environment, according to the 2017 Lenders One Mortgage Barometer, a survey of 200 mortgage lending professionals. “Despite some industry concerns over rising interest rates, lenders are optimistic about the potential for a more flexible regulatory environment in 2017 and beyond,” said Bryan Binder, chief executive officer of Lenders One. Lenders are also ready to make investments in their organizations’ business operations. In fact, 42 percent of lenders indicate their biggest investment is in operational changes (hiring new staff, compliance support and software support), and 25 percent of lenders surveyed say they are currently making the greatest investment in marketing. While these investments are necessary for the industry to keep pace with consumer demand, they may also be driving up the cost per loan, with 65 percent of respondents indicating that the cost per loan will continue to increase. Lenders are ready for new regulatory requirements, such as updates to the Home Mortgage Disclosure Act (HMDA), with twothirds (65 percent) indicating they are very prepared for HMDA changes. Yet, the biggest HMDA compliance challenge for lenders is around additional resources needed to report transactional data, such as home equity lines of credit (HELOC) and dwelling continued on page 28
A division of New York Community Bank A National Leader in Wholesale and Correspondent Solutions
Take Control and Unleash Your Potential. At NYCB, we create empowering technology that puts you in control
Ready to take control? Visit us at www.nycbmortgage.com or Email potentialclient@mynycb.com to learn more. This information is for use by current and prospective Clients of New York Community Bank, doing business as NYCB Mortgage Banking, and should not be distributed to or used by consumers or other third parties. Š2017 New York Community Bank â&#x20AC;&#x201C; Member FDIC. All Rights Reserved.
n National Mortgage Professional Magazine n JUNE 2017
NYCB serves correspondent lenders, brokers, community banks and credit unions throughout the nation with a team of highly experienced sales and service professionals, superior underwriting and a comprehensive product menu.
27
NationalMortgageProfessional.com
and convenient service experience that your borrowers and referral sources will love. All this, while transacting with more simplicity, speed and risk mitigation.
nmp news flash
continued from page 26
secured loans for apartments. While lenders are investing in staff and technology, about one-third (32 percent) of them cite challenges with securing additional resources to report, connect and analyze transactional data. Though 39 percent of lenders report they are not using electronic closings (e-closings) on mortgage loans, a third of those respondents expect their organizations to implement e-closings in one to two years, on average. The majority (61 percent), however, say their organization has implemented eclosings while seasoned lenders— those in the business for 10 or more years—are the predominant category of lenders utilizing them (67 percent). The Lenders One Mortgage Barometer was conducted online among a random sample of 200 mortgage lenders. Fieldwork was conducted by independent research firm Ebiquity between Jan. 4 and 14, 2017. The margin of error associated with the sample of n=200 is +/- 6.9 percent at a 95 percent confidence level. CoreLogic: Hurricane Season Can Impact 6.9M Homes
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
28
Nearly 6.9 million homes along the Atlantic and Gulf Coasts are at potential risk of damage from hurricane storm surge inundation this year, according to CoreLogic’s 2017 Storm Surge Report, which placed the total reconstruction cost value (RCV) at more than $1.5 trillion for a worst-case scenario at 100-percent destruction. This year, the National Oceanic and Atmospheric Administration is forecasting 12 total storms, with six possibly developing into hurricanes and three at a Category 3 level or higher. At a regional level, the Atlantic Coast could face the greatest threat, with 3.9 million homes at risk of storm surge with an RCV of $970 billion, while the Gulf Coast has just under three million homes at risk with $593 billion in potential exposure to total destruction damage. Texas and Florida have the greatest state-level threat, due to their long coastal areas, while the Miami-Fort Lauderdale-West Palm Beach corridor has the greatest metrolevel threat. “Despite the fact that this year’s
hurricane season is predicted to have fewer storms than last year, it doesn’t mitigate the risk of storm surge damage,” said Tom Jeffery, senior hazard scientist at CoreLogic. “As we’ve seen with past storms, even one single hurricane at a lowerlevel category can cause significant damage if it makes landfall in a highly populated area.” More Defects Found in Mortgage Applications
The frequency of defects, fraudulence and misrepresentation in mortgage applications during April increased 2.5 percent from March and spiked by eight percent from April 2016, according to the First American Loan Application Defect Index. The Defect Index for purchase transactions in April was up 2.3 percent compared to March and rose by 7.2 percent compared to a year earlier. The Defect Index for refinance transactions increased by 4.8 percent month-over-month and was 3.1 percent higher year-overyear. “The Loan Application Defect Index continued its strong upward increase for the fifth consecutive month,” said Mark Fleming, chief economist at First American. “The pace of defect risk growth is as strong as we have seen since the index began in 2011, adding to the concern over the five-month trend. While we have recently noted that part of the rise in overall risk is due to the market’s shift toward riskier purchase transactions, the fact that risk in refinance transactions is also on the rise underscores the need for caution.” Your turn National Mortgage Professional Magazine invites you to submit any information on regulatory changes, legislative updates, human interest stories or any other newsworthy items pertaining to the mortgage industry to the attention of: NMP News Flash column Phone #: (516) 409-5555 E-mail: Newsroom@MortgageNewsNetwork.com
Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.
29
NationalMortgageProfessional.com
n National Mortgage Professional Magazine n JUNE 2017
NMP’s 2017 MORTGAGE TECHNOLOGY PROVIDERS DIRECTORY
Best Rate Referrals (800) 811-1402 BestRateReferrals.com Why techies love the company: Best Rate Referrals is a leader in mortgage marketing and customer acquisition. Why clients love the company: Best Rate’s sophisticated programs help clients achieve sustainable cost per funded loan. Description of products offered: Custom marketing solutions reaching millions of consumers; strong organic traffic; direct mail; live transfers from an experienced in-house call center.
BNTouch (888) 971-1117 BNTouch.com Why techies love the company: BNTouch pioneers features that utilize the latest in mortgage marketing and technology. Why clients love the company: Easy-to-start marketing CRM with great room for corporate in-depth customization. Description of products offered: BNTouch is a combination of a mortgage CRM, marketing automation and communication platform. BNTouch is a necessary foundation for building and managing relationship with your prospects, borrowers and partners. Its system allows mortgage companies to automate and organize virtually every aspect of process communication, marketing and sales. Individual users and teams enjoy an easy-to-setup set of tools with pre-built content library and for BNTouch’s corporate clients, top of the industry processes and marketing centralization is offered, along with in-depth customization and integrations options.
JUNE 2017 n National Mortgage Professional
30 Class Appraisal (866) 333-8311 ClassAppraisal.com Why techies love the company: Class Appraisal has brought smart solutions to an industry that is technologically archaic. Why clients love the company: Class Appraisal supplies customized performance dashboards and turn-time/fee quote tools. Description of products offered: Class Appraisal is a top-rated nationwide appraisal management company (AMC) working with some of the nation’s top lenders. Class Appraisal takes great pride in its world-class customer service. By building relationships with the best appraisers, they prioritize orders and help deliver the best available industry turn-times. In the end, Class Appraisal provides excellent professional appraisal management services.
D+H (800) 815-5592 DH.com Why techies love the company: SaaS efficiency … D+H does the regulatory updates and software enhancements for you! Why clients love the company: Streamlined implementations, responsive service with zero hardware costs. Description of products offered: D+H’s end-to-end Mortgagebot online and mobile lending and origination solution helps sharpen your competitive edge to attract borrowers, simplify compliance to minimize risk, and optimize back-office processing through post-closing to boost profitability. D+H works to configure a solution to your lending footprint and will help you achieve quick success through a proven implementation process.
DocMagic Inc. (800) 649-1362 DocMagic.com Why techies love the company: DocMagic offers integrated security infrastructure, processing power, scalability and storage. Why clients love the company: Compliant software, secondto-none technical support, educational resources. Description of products offered: DocMagic is the industryleading provider of document production, automated compliance and comprehensive eMortgage services for the mortgage industry. Dedicated to providing the tools and technology for survival in today’s complex regulatory environment, DocMagic continues to advance innovative products and eService solutions for over 10,000 customers nationwide. With the development of an automated collaborative closing portal and TRID-compliant solutions and digital mortgage solution, DocMagic continues to build a reputation for innovation, quality and customer service.
NMP’s 2017 MORTGAGE TECHNOLOGY PROVIDERS DIRECTORY
LoanTek LLC (800) 562-6835 LoanTek.com Why techies love the company: Best consumer direct pricing engine, period. Best-in-class for all consumer apps. Why clients love the company: Fin-Tech founded by mortgage originators, LoanTek works the way you need it to. Description of products offered: LoanTek’s mortgage pricing engine integrates seamlessly with lead management and CRM. LoanTek specializes in online consumer engagement, allowing clients to transact on your Web site, bridging the gap between mortgage leads and mortgage loans by allowing customers to shop interactively and request their loan’s fulfillment directly. Find out why LoanTek delivers more than two million offers to consumers every day—offers specific to the consumer’s qualifications and mortgage requests. Let LoanTek provide the digital makeover your company needs.
Nexsys (888) 411-7219 NexsysDataSolutions.com Why techies love the company: Nexsys offers innovative, realtime platform for mortgage transaction and provider management. Why clients love the company: Industry-leading customer service and deep insights on provider performance. Description of products offered: Nexsys Clear Path is the evolution of provider management. The platform operates through a suite of interactive tools that include: Mission Control, which manages order allocations in real-time; Fee Point, to dynamically calculate settlement services and governmental fees; and Metrix, for visibility into order and provider performance. This flexible platform is accessible through a simple system-to-system integration or secure Web portal. The system is fully customizable and reporting is made easy by automatically formatting for your desktop, e-mail or mobile.
31 RealtyShares (855) 880-6050 RealtyShares.com Why techies love the company: RealtyShares connects investors with vetted real estate deals. Why clients love the company: RealtyShares has 100-plus experienced staff on hand to communicate with its clients. Description of products offered: RealtyShares funds residential and commercial hard money loans through its platform. RealtyShares has funded $400million-plus in deals across over 600 properties across the United States. Dedicated capital means deals fund and close in as little as seven days. Rates start at 7.99 percent. High leverage and amazing versatility.
Secure Insight (877) 758-7878 SecureInsight.com Why techies love the company: SecureInsight offers an accurate, reliable and user-friendly technology platform for vendor management. Why clients love the company: SecureInsight has monitored more than million closing transactions without one reported loss. Description of products offered: Access to a nationwide database of more than 50,000 live closing agent risk rated and monitored professional profiles to assist lenders in meeting regulatory and compliance expectations of the CFPB, HUD and others, while offering to investors and warehouse banks assurances of strong loan quality and fraud deterrence tools, and to borrowers dedication to fraud prevention, data privacy and overall consumer protection.
TagQuest Inc. (866) 376-5540 TagQuest.com Why techies love the company: TagQuest offers automated and dynamic CRMs, with a quick adaption of the ever-changing marketplace. Why clients love the company: The highest levels of customer service and cutting-edge marketing campaigns. Description of products offered: TagQuest Inc. is a fullservice marketing firm offering the most up-to-date, cutting-edge marketing solutions for the ever-changing mortgage industry. Tag Quest offers services like direct marketing, online marketing (social media, PPC and SEO), direct mail, data list acquisition and hygiene, live transfer leads, Internet leads, e-mail marketing, printing services, client tracking-follow up-retention, demographic analysis, telemarketing and much more.
The Non-QM Market Is About Heat Up
Borrower demand is growing, but partnerships hold th
Borrower demand is growing, but partners hold the key to success By Raymond Eshaghian
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
32
t’s been three-anda-half years since the qualified mortgage definition was put into place in January 2014. Since then, some lenders, banks and Wall Street investors have stepped up to the plate with new non-QM and non-prime offerings, but activity in this segment of the market has been modest at best. With rates on the rise, lenders are looking for new avenues of growth, and many see the non-QM/non-prime market as the perfect opportunity. Is 2017 the year the non- QM market will finally take off? Research from Inside Mortgage Finance (IMF) shows that demand for programs that don’t fit the agency credit box
I
could increase to $100 billion annually in the coming years, with continued growth in the future. At Greenbox Loans, we estimate the current market for non-QM/non-prime loans to be approximately $20 billion within the next year. Assuming the non-QM market is poised for action, the question then becomes: What does it take to succeed? Challenges and opportunities in non-QM lending The primary upside to originating loans that most lenders don’t make is that a lender has an opportunity to carve out a niche. At the same time, loan originators are often unaware of the host of available loan options from non-agency wholesale and correspondent lenders, so their borrowers end up being turned away. In fact, a
growing number of wholesalers have emerged that focus solely on the non-QM market. They are eager to buy those loans, but originators just don’t know about them. Of course, there are also downsides to originating nonQM loans. In addition to the lack of liability protection afforded to QM loans, there is not yet a very robust, liquid secondary market for them. However there is growing interest from Wall Street investors who see the potential for big growth in the market and are drawn to the higher margins seen on many non-QM loan programs. Savvy originators and correspondents should take note of these challenges and know that with the right approach and a good wholesale partner, they can expand their business by working with more
challenging borrowers. It’s also an opportunity to do some genuine good by serving a segment of potential mortgage consumers who are often left behind. Demographics suggest growing non-prime demand Demographics point to the need for more loan options for borrowers that don’t fit squarely into the agency box. The Millennial generation is now starting to reach the age at which most Americans begin marrying, settling down and buying homes. Studies show that Millennials already account for over 33 percent of today’s homebuyers, making them the largest segment of the market. However, many Millennials don’t have the credit scores or the employment history needed to qualify for conventional loans.
ld the out tokey to success
By Raymond Eshaghian
nerships
33
credit history. It’s important to note that many consumers have good income and pose a low credit risk, yet they don’t qualify for a conventional mortgage due to the rather strict definition of what a QM loan is. In other words, non-QM doesn’t necessarily mean high risk. Why your partner is the key to success Obviously, the market for nonQM loans holds a good deal of potential—that is, with a strong and able partner. There are several ways to find the wholesale partner that’s right for you. Originators should look for the following: l
Non-QM expertise. Many lenders are dabbling in non-agency lending to replace refinance business, but their performances
have been spotty. Successful non-prime transactions take extra knowledge and experience. It’s not something a prime lender can pick up in just a few days. Look for a wholesale lender with years of solid experience that is dedicated to nonprime loans. Many FHA and agency lenders have recently entered the NonQM market in an effort to offset the production losses on the prime loans. As such, they do not have the knowledge base and true understanding of the new world of non-QM/nonprime loans. Underwriting these loans requires a different skill set and philosophy relative to prime loans. Most agency continued on page 56
n National Mortgage Professional Magazine n JUNE 2017
better lifestyle. Even though many Baby Boomers have healthy finances, quite a few are either self-employed, perform contract work, or have credit issues from the past and may not qualify for agency loans. However, they would be great candidates for non-prime products. Together, Baby Boomers and Millennials accounted for over 60 percent of U.S. home purchases in 2016, according to the National Association of Realtors 2017 Home Buyer and Seller Generational Trends study. But another group also represents an excellent opportunity for non-QM lenders: foreign nationals. An often underserved segment, many foreign nationals earn good livings but may face unique obstacles to getting a mortgage due to their length of employment or a lack of a
NationalMortgageProfessional.com
While many earn enough money to afford a mortgage payment for a home in their area, they also face hefty student loan debt, which makes it difficult to save up for a down payment. According to data from FICO, a third of Millennials don’t meet minimum credit score of 620. Many others struggle to meet debt-to-income (DTI) and loanto-value (LTV) requirements for a prime or FHA loan. This situation is creating increased demand for a wider selection of loan options for younger buyers who may have a strong but less-than-perfect credit profile and solid earning potential. But non-prime demand will also come from another, less obvious group: Baby Boomers. Many Americans approaching retirement are looking to downsize or move to achieve a
JUNE 2017 n National Mortgage Professional Magazine n NationalMortgageProfessional.com
The fight is won … long before I dance under those lights.
“
” —Muhammad Ali
34
Spring Training for Mortgage Pros The top ways to prep for the selling season By Bubba Mills
I
tips that will have you raising your arms in victory– before you ever step foot in the ring: Stay educated Today, more than ever, you have to be the expert. Your prospects have access to information so you have to prepare by digging deeper than you’ve ever dug before to learn everything there is to know about the mortgage business. You have to bring something new, fresh and more importantly, unknown to clients. You never want to hear this: “Tell me something I don’t know.” Practice Then practice some more. Practice your scripts, practice role playing sales situations, practice prospecting. Practice negotiating. And then, when you think you’ve practiced enough, realize you’re only 40 percent done. Why 40 percent? Have you ever heard of the Navy Seals’ 40 percent rule? It goes like this: Seals say when your mind is telling you you’re done, you’re really only 40 percent done.
Bubba Mills is CEO and owner of Corcoran Consulting & Coaching Inc. He may be reached by phone at (800) 957-8353 or visit CorcoranCoaching.com.
n National Mortgage Professional Magazine n JUNE 2017
Don’t go it alone Sure, when the fight is on, the boxer is alone in the ring. But remember this–that’s the only time he’s alone. After the fight he’s celebrating with his team. Before the fight, he’s training with his team. And write this down: Winners always have someone in their corner. Let me hear from you: How much do you think about preparation in your career? How much time do you set aside each week to improve specific skills that will produce more business for you? Are you willing to put in the hard yards to be better at your job? Why or why not? What can you start doing today to improve yourself? Please send any comments or questions you have to Article@CorcoranCoaching.com or Facebook.com/CorcoranCoaching.
35
NationalMortgageProfessional.com
don’t know all the reasons why Muhammad Ali earned the nickname, “The Greatest,” but I know one of them for sure. And his quote above says it all: He had the fight won before he even fought. All because of one simple word: Preparation. Whatever you’ve heard or read about success and those who achieve it can be boiled down to being prepared to meet the challenges that await you on your career path. Period. Ali knew that in order to win, he had to be prepared. And when he prepared well, he knew more than he knew anything in the world that when he bent over to enter the ring through those ropes, victory was inevitable. Can you imagine having that kind of confidence? Knowing, I mean truly knowing, you were going to win the fight no matter what? Knowing that the upcoming selling season was going to be your best ever? The good news is you can create that confidence. You just have to put in the hard yards with preparation. Some boxers train five hours a day five times a week for 12 weeks to prepare for a five round, 15minute fight (three minutes per round)—sweating their brains out with road work, bag work, drills, sparring, strength and cardio. The math works out to something like this: 18,000 minutes of training for 15 minutes of work. How long is your average listing presentation? I’m not suggesting you spend 18,000 minutes, but you get the idea. Are you preparing enough to be as good as you want (or need) to be in the competitive world of mortgage lending in 2017 and beyond? If you want a record season, keep reading for
MONDAY
Master the Markets with Barry Habib
Recap of key economic events that took place over the past week and a look ahead to events that will potentially impact interest rates in the housing market. Brought to you by Airs every Monday at 7 a.m. For more information on Planet Home Lending, please visit www.PHLTPO.com
MONDAY
Centurion Roundtable Interviews
Learn the secrets of success from this elite group of high volume originators. Brought to you by Airs every Monday at 11 a.m. For more information on PRMG, visit prmg.net/wholesale
TUESDAY
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
36
The 60 Second Originator
Over 80% of home buyers and refinance consumers start their searches online. If you don’t possess the knowledge and practices required to convert loans from the internet then you need the 60 Second Originator to grow your origination. Brought to you by
expandi
cont ric
program
every
Airs every Tuesday at 7 a.m. For more information on LoanTek visit loantek.com
TUESDAY The Mortgage Godfather The
Mortgage
Godfather
Ralph LoVuolo Sr., “The Mortgage Godfather” shares his unique and innovative approach to mortgage origination. You better become a follower or else. It’s an offer you can’t refuse!
Brought to you by Airs every Tuesday at 11 a.m. For more information on Planet Home Lending, please visit www.PHLTPO.com
Visit MortgageNew for the industry's on-demand, 24/ for your com Daily MNN S
If you have a product or
For more information ab
productions please send
VP-Sales & Marketing, a
Airs every Wednesday at 11 a.m. For more information on HomeBridge Financial, visit HomeBridge.com
AG
C MOST ONN
ALS ON
THURSDAY
ED ECT
y day
Brought to you by
G
amming
Closing more, making more and still enjoying life!
M O RT
ntent ch
Top Originator Secrets with Brian Sacks
FIFT Y
ding our
WEDNESDAY
E PROFESS
I
50 Most Connected Mortgage Professionals Leaders who share their knowledge for the betterment of the industry. The most n,followed and retweeted Mortgage Professionals.
Brought to you by Airs every Thursday at 7 a.m. For more information on REMN Wholesale visit REMNWholesale.com
THURSDAY
40 Under 40 ProďŹ les of pioneers taking the mortgage business to the next level. An inside look at the future leaders of the mortgage industry.
37
Brought to you by Airs every Thursday at 11 a.m. For more information on Angel Oak Mortgage Solutions visit angeloakms.com.
FRIDAY
Inside the MBA Your bi-weekly window into whatâ&#x20AC;&#x2122;s happening at the MBA.
ct or service for mortgage professionals you can be a sponsor for these videos.
n about these sponsorships or Mortgage News Network custom video send an email to Info@MortgageNewsNetwork.com or call Beverly Bolnick,
ng, at 516-409-5555 ext. 4 and she'll tell you how you can be part of the action!
n National Mortgage Professional Magazine n JUNE 2017
Airs bi-weekly on Friday at 11 a.m.
NationalMortgageProfessional.com
NewsNetwork.com ry's latest topics... 24/7 and sign up omplimentary N Show Alerts.
No On Believes But He What T Do Beli
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
38
hen I first started in the mortgage business way back in the 1980s, the advice I got was to “Get out there and get your name out.” I would bet you probably have heard the exact same advice haven’t you? There are many ways to “get your name out there,” but I would like to just focus on one of them right now which is using media.
W
Media includes radio, TV, print and social media There are numerous avenues, most of which were not available when I was starting out. Heck … fax machines, cellphones and even the Internet had not yet been invented. Certainly there was no Facebook, LinkedIn or Instagram. The media doesn’t really matter, it’s the content that does First, you must understand that Facebook, LinkedIn, magazines,
radio and TV are all forms of media. You should never think of the social media sites or Google as anything other than a media source. I laugh when I hear people saying the only way to get business is Facebook, Google or any type of media. That is very dangerous thinking If you are dependent on any one form of media and it goes away or suddenly changes, you are doomed. Think about all of the changes that have already taken place on LinkedIn, Google and Facebook. Many have had their ads banned or blocked, while others have been forced to pay increasing fees. You should never ever rely on only one way to market yourself. Think about all those who, years ago, were coldcalling and doing blast faxes. Both methods are now against the law! But it’s your message that we need to focus on I recently opened up a local magazine and saw four different
ads from loan officers in my area. They were large full page ads which are very expensive. One proclaimed the loan officer to be the “Local Loyal Lender.” The other proclaimed that “No One Has Closed More Loans THAN Him.” The others made no proclamations and were only oversized business cards with graphics of homes and people. What did my ad say … and why? First, let’s start with the why: People do not believe anything you say about yourself, but they do believe what others like them say about you! I would strongly encourage you to re-read that sentence. Write it down. Burn it into your memory for the future. I am sure it’s not a news flash that the general public does not trust us. They have seen movies like “The Big Short” and have heard all of the horror stories about originators ripping off consumers. Many either suffered
through the crash or had friends or family who lost their homes or were forced into bankruptcy. Public perception of industry not too high A recent study I read showed that we are trusted less than used car salespeople, attorneys and real estate agents. So us shouting about how great we are will always unfortunately fall on deaf ears. If you are using ads that proclaim your greatness, you no longer have to wonder why your ads are not producing results. For that matter, unless you are a multimillionaire, you should be tracking your ads to make sure they are working. It always amazes me that people advertise, but have no idea where there business and calls are actually coming from. At a minimum, use a service like Call Fire and put a different tracking phone number on each ad so at least you will know what is working and what is not. Why spend money on ads that are not producing results?
One es You … Here’s They elieve By Brian Sacks
39
your buyers concerns and objections.
l l l
Let’s get back to the second point As I mentioned in the beginning of this article: No one believes anything we say about ourselves, but they do believe what others like them say about you. You want every marketing piece you create and ad to have a testimonial about you in them. But you don’t want it to say you did a good job or were nice to deal with. You need concrete evidence that answers
l
l
l l l
Concerned they will not close on time. Concerned that they are getting a good rate. Concerned about fees they are paying. Concerned that you truly can help them get to closing. Concerned that you will guide them thru the process. Concerned that you will be available for questions. Concerned about income issues. Concerned about credit issues (this is a big one for
Boomerang Buyers). Concerned about having enough cash for downpayment and settlement.
testimonials, but instead call them “Client Success Stories:” l l
The key to your testimonials As you can see, the key to your testimonials is addressing all of your buyers’ fears. The best way to do that is to have your prospects “see what others like them are saying about you” instead of what you say about yourself. There are a few other important components to getting testimonials to be believed and acted upon. In fact, here’s a little secret … I don’t ever call these
l
l
Try to always include a photo. Try to always include the person’s name and city/state. Try to have them state what their situation was before meeting you–what their fears were and what the positive outcome was. It’s best to actually have them tell it as a story.
Now go ahead and make sure you are getting your client success stories out there and making your marketing trackable and accountable.
Brian Sacks is a nationally-renowned mortgage expert who has career closing of more than 5,924 transactions for more than $1 billion. He has trained, consulted and coached tens of thousands of loan officers and company owners over the past 31 years on how to close more loans, make more money, and still have a life. Brian is the host of “Top Originator Secrets,” which can be seen weekly on Mortgage News Network and on his blog. You can get more information and grab your free report on “How to Get Agents Chasing You” at TopOriginatorSecrets.com.
n National Mortgage Professional Magazine n JUNE 2017
Here is an exercise for you to complete Take out a sheet of paper and draw a column down the middle. Now on the left side, write out what you believe to be your buyers’ concerns and objections. Let me give you a few examples:
l
NationalMortgageProfessional.com
What does work? The ad I have in this publication is called an advertorial. It looks just like an article and so it draws the reader in to read it. Yes, I have still paid for an ad. Each article starts with a question, almost like a “Dear Brian” article. It’s modeled after a “Dear Abby” column and it has a common question and my answer below it. Under that is what is called a “Resource Box” with three sentences about me and how they get to download a FREE report. Of course, it also lists my phone number and e-mail address.
Madoff: The Dark Side of Working by Referral
40
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
By Andy W. Harris, CRMS
ost of us have built our careers by word-of-mouth advertising which simply is working by referral. Being referred by past clients among other colleagues and professionals is critical for longterm success in our industry, but have you ever noticed there is also a ‘dark’ side to referrals? What if the person referring another person is doing so for the wrong reason, such as self-gain or hidden special interests? Or, what if they are ignorant or misinformed about who or what exactly they are referring? Many of us know the story of Bernard (Bernie) Madoff. He was an investment advisor turned American fraudster and operator of the biggest Ponzi Scheme and largest financial fraud in U.S. history. He had around 4,800 clients (victims) that were defrauded out of nearly $65 billion dollars. That seems unbelievable, but it happened. What makes this story amazing is that no one caught onto it, as everyone trusted him and continued to refer
M
him to their colleagues and friends in these affluent groups. This went on for many, many years. Bernie Madoff worked exclusively by referral. Think about that. This is certainly a glimpse into the dark side wordof-mouth advertising can produce. Those who referred others to Madoff likely had the best of intentions and actually thought that they were doing something wise or helping someone else financially. Not only were they walking into a fire, but with others gladly following them, were truly unaware of what was going on. Deception causes someone to accept truth or validity when it does not exist. Working by referral can, at times, allow someone to more easily deceive a person through gaining immediate trust. So how does that relate to our industry? I believe it does, at a much smaller scale, when people press and refer one “preferred” lender to their clients who do not have additional resources or doing their own independent analysis by comparing other options. We see this deception
through Marketing Service Agreements (MSAs) and Section 8 of the Real Estate Settlement and Procedures Act’s (RESPA) anti kick-back provision violations, but also from those following the rules and just not realizing the unintended consequences in steering or referring one person or company versus a variety. As we know, this happens between real estate and mortgage companies as well as builders and others. I’ve personally seen how special interests and ‘cliques’ can prey on unsuspecting consumers when seeking a referral from what they had believed to be a trusted source. This is why consumer education is so vital when buying a home and making sure comparison and research is done on those they are being referred to. Many times, the negative financial outcome remains obtuse otherwise when it comes to
securing a new mortgage. Ethically working by referral is great, but directly marketing to consumers using un-bias online past client reviews and providing rates and terms upfront should be a favorable practice. Reputation and terms matter. So when someone says they work 100 percent “only” by referral, that is not necessarily a good thing. Always give it the “Madoff” test first through analyzing and comparing all the details before trusting the source. Are you an originator? Send your stories! To have topics considered in future editions, please e-mail me with “OrigiNation” in the Subject Line at AHarris@VantageMortgageGroup. com. These can be confidential or your name and company can be referenced if you wish. You can also join the Facebook group by searching for “OrigiNation.”
Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and past president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 4960431, e-mail AHarris@VantageMortgageGroup.com or visit VantageMortgageGroup.com.
Make Yo our Marketing e E Easy “The accu uracy of the data and the near n e clusiv contact wit w as they ar ae a mortga age moment, a much softe from a bor tradition nal
“Being able to
e
really with trried resultss.”
“Every time my p rang, at the oth o was an interest e e qualified persso
41
“We we increa e from mt marke 50 per
Sch hedule a Free e Consu ultatio on Now 888 8-717-8980 | info@tagq quest.com | www.TagQ a Quest.com
In America i 2 015 In A 2015
2016
SEER VICE PROVIDERS ERVICE
4
FOR TY
Inc. 5000
Y RT
TOOP 500
MORTGAGE M MOR TTGAGE
FLUENT ST IN IAL MO
AGE PRO RTG FE S MO
–––––––
S UNDER NAL FO SIO
You ounng Gun ns 2014
n National Mortgage Professional Magazine n JUNE 2017
voicemails e added the extra magic g to increase my resp e onse rates.”
“Technolo e gy, integration and leadership.”
NationalMortgageProfessional.com
t year rcent us year.” .
heard street on the
Our Heard on the Street column is a chronicle of events, changes and passages in the lives of the people and companies shaping the mortgage industry.
Flagstar Closes on Opes Advisors Acquisition
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
42
Flagstar Bancorp has reported it has closed its previously announced transaction to acquire certain assets of Opes Advisors, a retail mortgage originator and wealth advisory firm headquartered in Cupertino, Calif. “On behalf of all Flagstar associates, I’m pleased to welcome the talented team of Opes Mortgage and Wealth Advisors to the Flagstar family,” said Alessandro P. DiNello, Flagstar’s president and CEO. “This transaction is good news for both companies. Opes Advisors now has the backing of a well-capitalized bank that can help expand its successful business model to the entire country. And Flagstar now has a national retail origination platform and wealth management business that will provide bestin-class service to our customers.” This is the second acquisition Flagstar has completed this year, having acquired the delegated lending business of Stearns Lending LLC in late February to expand its market share in the correspondent channel. With the acquisition of Opes Advisors, Flagstar expands its retail mortgage origination business and increases its access to highquality purchase mortgage originations. “We see this transaction as amazing in its opportunity for mutual growth, collaboration, and benefits,” said Susan McHan, CEO, co-founder, and president of Mortgage Banking at Opes
Advisors. “The added product capabilities will be a win for our clients, and the expanded opportunities for growth will be a win for our mortgage advisors and wealth advisors. We feel fortunate to have found in Flagstar the perfect partner—a long-time leader in the mortgage industry with a strategy and interest in growing its retail mortgage business.” NAMB+ Names Sarma Mortgage Credit Services Its Newest Endorsed Provider
NAMB+ Inc., the for-profit marketing and communications subsidiary of NAMB—The Association of Mortgage Professionals, has announced its latest Endorsed Provider, Sarma Mortgage Credit Services. “NAMB+ is pleased to have chosen a firm such as Sarma Mortgage Credit Services as its newest Endorsed Provider,” said Nathan S. Pierce, president of NAMB+. “By utilizing Sarma, our members have access to an extensive portfolio of resources, including merged reports, CreditXpert tools, AVM reports, SocialValidate, TRV verification, the ability to interface with more than 30 LOS, Fannie Mae and Freddie Mac connections, verification of employment/deposit, and much more.” NAMB+ connects NAMB members with an array of Endorsed Providers, aimed at
helping mortgage professionals gain a competitive advantage in today’s marketplace with discounts and special programs only available to NAMB members. NAMB+ brings everything from compliance, digital mortgage platforms, lead generation, phone services, social media, custom canvas prints and much more to NAMB members as part of the NAMB+ program. “Our array of product offerings are geared to assist all loan originators in getting to the closing table in an expeditious manner,” said Sarma President and CEO Bob Benavides. “We know the industry is fast-paced, so we have extended hours to provide our clients more support. When NAMB members partner with Sarma, they can be assured they have the full resources and capabilities of a trusted industry leader.” Churchill Mortgage Adopts Secure Insight’s Consumer Protection Tool
Churchill Mortgage has announced that it has enhanced its risk management policies and procedures governing its retail mortgage lending business by requiring independent screening and risk monitoring for all settlement agents having access
to a borrower’s loan documents and mortgage proceeds. The process will be managed for Churchill by Secure Settlements Inc. t/a Secure Insight. The company chose the Closing Guard tool to evaluate the backgrounds, licensing, insurance and trust accounts of agents as a method to identify potential threats before a closing takes place. “We are pleased and honored to have been chosen by Churchill for these critical risk management services,” said Secure Insight Chief Operating Officer Wayne Doctor. “In our extensive dealings with their leadership team we saw firsthand their serious commitment to quality control, consumer protection and overall loan quality assurance. We are proud to be their partner in this important endeavor.” Closing Guard evaluates, rates, monitors and reports settlement gent risk in real-time through a nationwide database of mortgage closing professionals. The Secure Insight proprietary evaluation process combines automated data analysis with live reviews by trained analysts. “We recognize our responsibility to protect consumers from harm caused by theft of funds, identity and mortgage fraud, and our company continually seeks to not just meet but to exceed regulatory expectations for quality control and loan quality assurance,” said Laura Fellman, SVP of Operations at Churchill. “We take the management of third party service providers seriously, both for operational risk but also for investor confidence and consumer protection. We spent several
months evaluating various providers to help us address settlement agent risk, and were impressed with what Secure Insight has to offer in its Closing Guard product.” GTCR Expands Optimal Blue Network Through the Acquisition of Comergence
The level of consolidation within the mortgage space continued as CoreLogic has announced its acquisition of the valuation technology and appraisal management platform provider Mercury Network from Serent Capital. In a statement issued by the Irvine, Calif.-based company,
CoreLogic stated that it “acquired a 45 percent passive minority stake in Mercury Network,” with the purchase of the remaining portion expected to close later in the year. CoreLogic added that it plans to continue offering Mercury Network’s technology platforms and related services to emerging lenders and AMCs while focusing its own FNC technology offering on larger lenders. Mercury Network will continue to be headquartered in Oklahoma City. “Mercury Network’s platforms complement the CoreLogic
appraisal technology platforms and analytics business acquired from FNC in 2016,” said Frank Martell, CoreLogic president and CEO. “They will broaden the reach of CoreLogic’s valuation technology products and services to smaller and medium-sized lenders and AMCs. Through this acquisition, CoreLogic will improve its value proposition and go to market strategy for its broad range of valuation-related data and analytics to this important and growing segment of the industry.” continued on page 56
43
NationalMortgageProfessional.com
n National Mortgage Professional Magazine n JUNE 2017
GTCR has announced the acquisition of Comergence Compliance Monitoring by Optimal Blue. Comergence is an SaaS mortgage technology business, and its network-based solutions allow mortgage investors to perform due diligence and ongoing monitoring of their thirdparty originators (TPOs). Comergence’s software enables mortgage investors to review and monitor the licensing, compliance and risk profile of virtually all 18,500 TPOs operating in the market today. These capabilities enhance Optimal Blue’s network for both investors and originators, as originators can more easily connect to investors, and investors can more efficiently and accurately monitor the compliance status of their TPO networks. “We are excited about enhancing the capabilities we offer both sides of our network by adding Comergence’s TPO onboarding and automated compliance monitoring to Optimal Blue’s solutions,” said Michael Hollander, GTCR principal and Optimal Blue board member. The purchase of Comergence represents Optimal Blue’s first acquisition since GTCR partnered with CEO Scott Happ in June 2016. The acquisition is consistent with the company’s strategy to expand its network software services by deepening functionality for originators and investors and improving information flow, compliance functionality and transactional capabilities. The founders of Comergence, Greg Schroeder and Michael Stallings, will be joining Optimal Blue, along with the entire Comergence team. “Optimal Blue and Comergence are well-aligned around our principal mission of facilitating transactions between buyers and seller of loans,” said Happ. “We are very pleased that Greg, Michael, and the entire Comergence team will be joining Optimal Blue to help us execute our shared growth plans.”
CoreLogic Acquires Mercury Network
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
44
A Few Thoughts on th MBA’s Secondary Market Confe
BY PHIL H everal leading industry leaders offered different observational perspectives on the securitization market during the recent Mortgage Bankers Association’s National Secondary Market Conference and Expo in New York City. Jay Plum, executive vice president of home lending at Columbus, Ohio-based Huntington National Bank, noted that the current state of the secondary market is still shaped by the tumult of the previous decade. “I think, as we take a look at the mortgage industry, we understand that families view their house as their most important asset,” Plum said.
S
“When we think back to the financial crisis, many of us forgot what the true mission was. Most of the folks in this room never forgot what it was, but we all realized that putting a family in a home is one of the most noble things that you can do. When you’re a bank, a mortgage broker or a mortgage bank, making sure that you’re establishing that trust for that family and helping them through what is a very complicated journey is a worthwhile activity.” Plum pointed to high-tech breakthroughs as having a potentially powerful impact on how the secondary market operates. “Getting a mortgage is one of the most awful financial experiences you can have, but with some of the things that are
coming and changing, technology-wise, it’s quite a fundamentally different experience,” Plum said. “A quicker experience and hopefully an easier experience for all of its clients. That should be a big deal.” Furthermore, Plum was ecstatic over the current state of originations. “The purchase market that we’ve been waiting for since 2014 is finally here, and I think the adjustments that the industry will have to go through to get from here to there on a cost basis will not be fun,” Plum added. “But for those loan officers who have never really forgotten the fundamentals of taking care of the client, they’ll be fine. It’s just that now we’ve got to actually do it.”
Byron Boston, president, CEO and co-chief information officer at Glen Allen, Va.-based Dynex Capital Inc., noted that his company was involved the housing finance system since 1988, which he dubbed “The best in the world,” Boston continued, “There may have been some issues in 2008,” he preferred to plumb the positive rather than rehash the negative. “We view it in a much more positive sense when we look to the future,” he said. “From a regulatory perspective, we say don’t throw the baby out with the bathwater. We’ve got a great system, so we’re excited about our potential for having future investments.” Boston added his wish-list for the secondary market was the
45
nference wraps in the Big Apple HIL HALL cash, but there’s no yield anywhere and you still can’t light the match … I am dealing with the huge demand globally for yield and cash yield.” Cosgrove also expressed concern on the Trump Administration’s approach to housing finance policy—or, perhaps, the lack thereof. “The Trump Administration comes in unexpectedly [with] the election, and now we pivot and it’s all about regulatory relief,” Cosgrove stated. “You’ve got all the executive orders signed, which at the end of the day I don’t know what the hell that does or changes anything.” Nonetheless, Cosgrove was excited about the impact of technology on secondary marketing. “I think the technology
advances in the mortgage business are set to explode,” Cosgrove said. “You have new companies coming into the space that have no mortgage background whatsoever. It’s almost like 15 years ago when technologists looked at the medical field and then they came in and just made it a game changer—and I think the mortgage is next.” Also offering insight was Fowler Williams, CEO of Atlantabased Crescent Mortgage, who predicted a new era in
secondary marketing. “I think that everything sort of has a beginning, a middle and an end, and I think we’re at the end of what the mortgage market has been for decades,” Williams said. “I think we’re at the beginning, the precipice, of what the mortgage market’s going to be like for the next 20 or 30 years. We’re in a very exciting time, but it does create challenges when you don’t know exactly what the landscape is going to look like 20 years from now?”
Phil Hall is managing editor of National Mortgage Professional Magazine. He may be reached by e-mail at PhilH@MortgageNewsNetwork.com.
n National Mortgage Professional Magazine n JUNE 2017
return of a private-label market to complement the governmentsponsored enterprises and the continued progress on the common securitization platform, which he dubbed “a great concept because [we can] evolve that to where we’re going to be setting best practices for structuring the private-label security market, because ultimately you will need a TripleA security in the private label security market.” Yet Bill Cosgrove, CEO at Union Home Mortgage Corporation in Strongsville, Ohio, complained that the return of a private-label market was long overdue. “Eight years later, there is no private-label market whatsoever,” Cosgrove observed. “You have parts of the world flush with
NationalMortgageProfessional.com
the Secondary Market
Lykken on Leadership
Technology in the Mortgage Industry: Opportunities and Challenges BY DAVID LYKKEN
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
46
here has been much talk over the last few decades regarding the boom in technology across all industries. The mortgage industry is certainly no exception. The pool of software supplies in our industry has exploded, and we now have more options than we ever have before. The boundaries are constantly being pushed, and we are continually exposed to new possibilities regarding how we can more effectively run our organizations. There is, however, a darker side to technology. There are a great number of people in the popular press that have written in general terms about the possible harmful effects of technology. While I won’t talk about those larger societal concerns here, I do think it’s a good idea to pause and think about how technology could pose new challenges for our industry. It’s not all sunshine and rainbows, as technology could also have some downsides. In this article, I would like to suggest some pros and cons regarding the rapid growth of technology in the mortgage industry. Taking advantage of the opportunities regarding technology is essential, but it’s also important to build in
T
“Taking advantage of the opportunities regarding technology is essential, but it’s also important to build in safeguards so that we can avoid the pitfalls.” safeguards so that we can avoid the pitfalls. Just like anything else, embracing new technologies can come at a cost. As leaders in the mortgage industry, we’ve got to be aware of those costs so that we are more fully equipped to manage them. Opportunity: Greater efficiency The first and most obvious benefit of technology in our industry is the increased efficiency. Almost every new technology that arises in our industry is in some way meant to make our organizations more efficient. We improve our document management, our internal communications, our recruiting, our customer service, and so on. The more activities we can do with greater speed and proficiency, the more we’ll be able to clean our processes up, increase our profits, and serve our customers. One way or another, this is the goal of nearly all technological pursuits in the industry: making our businesses run better.
Challenge: A steeper learning curve The challenge can come when employees must learn how to use new systems. Traditions run deep in the industry, and it can be difficult to get buy-in from employees on using new technologies. People are naturally resistant to change and, regardless of how great the benefit may be, we are unlikely to get cooperation unless we can create a smooth and relatively easy transition. When looking for new technologies to adopt, then, we can’t just think about the benefits the technology will bring. We also have to consider the costs of implementing it. The best technology providers will be those who offer quality training for employees who may struggle with making the transition. Opportunity: More data In conjunction with the rapid growth of information technology has been the trend toward “big data.” In our society, we are able to capture, store and manage more information than ever before. As any statistician will
tell you, a larger sample size means more confident explanations and more accurate predictions. Because we have larger data sets, we’re able to uncover problems we never knew we had and solve problems that have been plaguing us for years. We are able to streamline our processes, because we have greater information on what works and what doesn’t. We’re able to better target customers, because we know who are the best prospects and who aren’t. The cost of retrieving, storing, and managing data has gotten so low that there is virtually no limit to how much we are able to process. We’re limited only by our imaginations. If there is something we want to do, chances are we have the data that can tell us how to do it best. Challenge: Greater security risks With great data, however, comes great responsibility. One issue that has arisen in society in terms of technology and data management is the
Challenge: Greater scrutiny The downside to this sort of open environment between brands and consumers is that businesses are under greater scrutiny. Before the social Web, a mistake could quickly be resolved before anyone in the public knew what was going on. Now, the most minor of slip-ups can very easily spiral into a public relations fiasco. Particularly in the mortgage industry, with the legal restrictions and abundance of regulations regarding disclosures and communications, we’ve got to be careful with how we talk to consumers. We walk a fine line. On the one hand, we want to foster authenticity in our relationships. On the other hand, if a loan originator says one thing that strikes someone in a negative way, it could spell a major headache for the entire organization. The solution, of course, is to always provide training for our communications with the public. By all means, we should use the tools available to us, but we’ve got to make sure our people are equipped to use them appropriately. We should always proceed, but we should never fail to do so without caution.
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.
47
n National Mortgage Professional Magazine n JUNE 2017
Opportunity: Better communication One way we can think of technology is in terms of how it helps improve operations. Technology can help us improve our procedural tasks, our business systems and our product offerings. However, technology can also help us improve how we talk about our business with the public. Technology can bolster our capabilities in areas such as marketing, public relations, and customer service. In the last several years, improvements in
customer relationship management systems have helped us keep better track of our prospects and customers, following up in a timely manner and staying on the radar of those in our database. Tools such as email marketing, live chatting, and social media have also provided great channels for staying in front of people. Because of platforms such as Facebook, Twitter, YouTube and Instagram, consumers are interacting with brands more frequently and on a deeper level than ever before. In the mortgage industry, that means we have opportunities to start conversations, answer questions, and resolve issues— if we’re proactive and we’re using the technologies available to us.
NationalMortgageProfessional.com
problem of hacking. Governments have been hacked to retrieve military and political intelligence, and this seems to be a big issue in the United States right now: The management of confidential data. Private companies have been hacked too, and consumers have had their information leaked. When the security of consumer information becomes compromised, the legal fallout can be catastrophic. The settlements alone can deplete organizations of all their resources. But then there’s the negative process that continues to haunt the organization in the aftermath. In the mortgage industry, information security must be taken extremely seriously. Sometimes, I think we can to exceed and just rush ahead without thinking of the risks. This is one area that we can’t afford to do that. We can’t just collect all the data we can, thinking only of how the increased information can help us improve our businesses. We also have to think of what we stand to lose if we let confidential information get out. Therefore, when considering technology providers, we must never fail to ask, “What’s your security like?” We can afford to have a little less data; what we can’t afford is the risk of losing trust. By all means, we should continue to use more data to make our decisions, but we’ve got to make sure we’re able to manage it securely.
Rates M
The sky is fallin n a recent training session, mixed with salespeople at all levels of proficiency and years of experience, a question was raised by one of the more seasoned veterans: “What should we do now that rates are increasing? How is our competition doing?” Note, I categorized that person as seasoned, not successful. Big difference. That is important in the context of this article. “The market is irrelevant,” I responded. “Because if you accept and internalize that the market is either slow or busy, rates are going up or down, you therefore and unconsciously allow yourself to fall directly into the trap that most salespeople want to be in and have never been trained to avoid. Yes, I said ‘WANT TO BE.’” Sure, if the market is slow for your competition, if you want to be told that this is a slow month, if your boss will validate the concept that you may not be as active as you want to be, then you’re happy and you can sleep tonight knowing that no-one is doing well. However, there are a couple of ideas I want to emphasize early … I don’t believe in competition. I don’t believe in believing in competition. I hate using the word “competition.” When I write, more often than not, I don’t use the word competition. Stop! As soon as you believe that there are others who are better than you, you are doomed. No one is better than you. Maybe as good or as unique as you, but not “better.” Most people, when using the “word,” want to know what those who are making more money than them are doing. That’s what they mean when the use the “word.” What is the relevance of the market or rates to a salesperson who has successful months, one after the other? Do you worry about
I
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
48
The
Mortgage
Godfather
Might Rise ... Oh My!
alling, at least for most of you
“I don’t believe in competition. I don’t believe in believing in competition. I hate using the word ‘competition.’” contact with. You can help others feel better, and act more kindly toward each other. Let’s start today! What do you want to hear? Do you want me to encourage you to fail? Well you are asking
the wrong guy! Get organized. Set goals, write daily and weekly reports of the people you call on, and follow-up with them. Send Thank You Notes and stay in control.
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.
49
n National Mortgage Professional Magazine n JUNE 2017
I started to ask my real estate agent contacts if I could go do an inspection of a new listing to see if there were any hidden flaws that might now allow a property to pass an inspection. I figured out that if I did things that other MLO’s didn’t do, didn’t have the skills for or were just too lazy, then I could stand out as someone who helped my brokers become more successful. I gave seminars in offices that were captured by my competition. I visited offices more than once a week when others like me had been told not to bother. So often I heard the word “no” and at first it affected me as being personal. I figured out with the help of Bill that they were not saying “no” to me, but that I had not yet given them enough ammunition, I hadn’t yet given then a reason why they should use my services above the others who were trying to break them down. You and I must not accept that people, events or circumstances can affect our performance. “We are in control, and we will succeed!” Of course, it is only human that we don’t write 10 deals every day, or maybe even five. But, are we capable of that type of production? You bet we are! I’ve heard and seen the reports of the following success stories: “Annual Volumes of $568,000,000; $400,000,000; and $68,000,000.” What does that mean to you? Mortgage Rep does $653,000,000 of volume in California. Impossible?? Not to those who believe that the market is irrelevant. Your attitude is infectious. You should realize that by acting enthusiastic, being positive and innovative … you have an effect on all those you meet. Put aside your worries. You are a salesperson, a motivator, an achiever. Your enthusiasm can impact all of those with whom you come in
NationalMortgageProfessional.com
them, think about them, wonder what they do? I think the first paragraph above answers all those questions. The only thing you can control, the only person that you can control is YOU, and therefore, the competition means nothing and the market means nothing. All that should matter is that you have established proper contacts who, whenever they know someone who needs a mortgage, calls you! You have the answers, the products, the knowledge that is necessary to get your clients a mortgage. You give the best service of any mortgage loan officer … ever! My first sales manager, Bill Schor, refused to allow his sales staff to use any kind of excuse at our sales meetings. We were never allowed to say, “Well, when I asked for business, the broker told me they didn’t sell any houses this week. The broker said that listings are down, that it was a rainy weekend … that rates are up.” “Sure, and they pay their rent with their good looks,” was his response. I learned pretty quickly, just from these inferences of not taking excuses that there was a lot more to learn than just visiting real estate agents and asking for business. Very early on in my sales career, I understood concepts that were being used by my successful colleagues had nothing to do with the excuses that were being bantered about by newbies. I saw what my earning peers did, every day, and started doing those things. Bill went on to explain that if we established a working relationship with real estate agents who could count on us to help them do their job better and easier, I could stand out in the crowd. I had experience as a contractor. My dad, a contractor and builder, had taken me on jobs with him for most of my teenage years.
BY RALPH LOVUOLO SR.
JUNE 2017 n National Mortgage Professional Magazine n NationalMortgageProfessional.com
How Using a L Aid
50
Learning Management System ids Compliance Training Efforts Determining employee commitment, identifying training needs builds a better workforce By Jeff Kelly
some of their compliance and mandatory training online. An LMS was the most common form of learning technology used for that training, according to the report. Additional reasons financial institutions find it beneficial to incorporate an LMS for their compliance and other staff training are detailed below.
l
l
F
l
According to the 2015 Training Industry Report by Training Magazine, 73 percent of U.S. companies surveyed do at least
l
l
l l l
Communicate with employees on a wide range of topics, including availability of classes, training sessions and company news. Provide updates on employee benefits such as 401(k) plans. House pertinent documents, including staff certifications and licenses. Facilitate classroom training. Document and retain policy acknowledgement. Store important details about an employee’s daily work life, such as holidays, birthdays and upcoming events.
Comprehensive communication Streamlining the communication process up and down the chain of command is another way to use an LMS. Automatic reminders can be sent to staff on a variety of subjects, such as notices to complete a particular class, provide company updates or request team members complete a survey. With a userfriendly LMS, employers also can
l
l
l
The training department can distribute training programs specific to each role within the organization. With a few clicks of a mouse, online programs, including topics and due dates, are assigned and communicated to designated team members. Department-specific or company-wide communication and policies, such as employee handbooks or internal surveys, risk assessments and policy acknowledgements can be distributed for action and tracked. Training taking place outside of an e-learning environment can also be scheduled, facilitated and tracked.
Finally, a capable LMS allows organizations to customize training courses, make updates to out-of-the-box training modules or courses as well as to update or enhance custom-made courses. Not only does this provide flexibility in the content to meet specific employer needs, but it also allows employers to alter the format in which content is provided and consumed by employees. Having the ability to tailor training to the specific
needs of an organization, its departments and individual employees is extremely valuable. Statement of commitment Companies can view employee use of an LMS as a reflection of each employee’s commitment, not only to compliance and regulatory training, but also to their own career. Using an LMS can provide employees with opportunities for career advancement through comprehensive training plans assigned as mandatory training or via elective courses in areas of personal interest. Employees who seek out and take advantage of personal development opportunities, as a rule, will perform better over the long term. Dedication and motivation associated with taking these extra steps and applying additional effort to build personal knowledge and skill also translate to daily on-the-job performance. This information can be valuable during an employee review or consideration for advancement. Furthermore, employees who actively engage in training and development opportunities tend to be more valuable long-term employees. According to a report on employee engagement by the Society for Human Resource Management Foundation, sponsored by Randstad: “Employees who enhance their skills through training are more likely to engage fully in their work because they derive satisfaction as they master new tasks and increase future employability.” Auditing capabilities A properly utilized LMS provides protection during regulatory continued on page 99
51
n National Mortgage Professional Magazine n JUNE 2017
l
Sixty-three percent of those who are working have taken a course or received additional training in the past 12 months to improve their job skills or expertise connected to career advancement. Fifty-five percent of full- or part-time workers say they participated in work or career learning to maintain or improve their job skills. Thirty-six percent of all workers say they completed job- or career-related learning in order to get a license or certification needed for their job.
Life cycle management An LMS can serve as an employee life-cycle management tool by monitoring the career progress of all staff—from day one to retirement. Here are ways an LMS can be used by financial institutions to effectively manage employees:
monitor which employees have successfully finished assigned courses, read required company updates and other work-related materials as well as participated in staff surveys. Once the communication and reporting lines are established in the LMS, the compliance, training and other designated departments can use this tool to communicate, track and retain information and data. Three examples of this applications of the LMS are:
NationalMortgageProfessional.com
inancial institutions easily can realize the many benefits of using a learning management system (LMS). Nowhere is a robust LMS more important than in compliance training, when non-compliance with regulations can result in litigation, financial penalties and a loss of public trust. An LMS provides a consistent, interactive and engaging learning environment for staff, as well as an opportunity for successful learning outcomes for employees. For financial institutions, using an LMS is more cost-effective when compared with in-person training expenses. Workers in the U.S. are primed to learn too, according to a 2016 Pew Research Center study “Lifelong learning and technology.” The study’s results show:
JUNE 2017 n National Mortgage Professional Magazine n NationalMortgageProfessional.com
NOW YOU CAN COMPETE WITH THE BIG GUYS IN A BLINK.
52
53
Introducing Blink â&#x20AC;&#x201D; a free new tool that allows you to offer borrowers a secure, hassle-free way to apply for a home loan completely online. With Blink, you and your borrowers can chat, upload documents, pull doing business. Simply tell borrowers about the link, email it and add it to your website. Blink is available
YOU + UWM = YOUNITED | 800.981.8898 | UWM.COM This information is provided to mortgage and real estate professionals only and is not intended nor is it authorized for consumer distribution. NMLS #3038.
n National Mortgage Professional Magazine n JUNE 2017
YOUNITED with UWM. Enroll in Blink today at uwm.com.
NationalMortgageProfessional.com
YOUNITED MEANS TAKING APPLICATIONS ONLINE. AND PUTTING CONVENIENCE IN YOUR BORROWERâ&#x20AC;&#x2122;S CORNER.
The Long & Short The Business of Short Sales
HUD-Approved Housing Counselors Prepare to Assist Consumers BY PAM MARRON
ore than one million past short-sellers have exceeded the four-year wait timeframe required to obtain a new conventional mortgage. Another 950,000 will be eligible to come back into the housing market within the next three years. Five million homeowners have been able to stay put in their homes with a mortgage modification. What do all of these past and current homeowners have in common? If they had a mortgage delinquency that went past 120 days late, there is a good chance that their mortgage credit may be coded as a foreclosure. At the May 15th HUD Housing Counseling Federal Advisory Committee (HCFAC) in Washington, D.C., five panelists that included a credit specialist, lender, mortgage professional and two housing counselors explained a collaborative initiative during a presentation entitled “Challenges in Credit Reporting Post-Crisis: An Opportunity for Housing Counseling Agencies.” The purpose of the presentation was to show why a pre-purchase service is needed to correct foreclosure credit for consumers who have had a past short sale or modification and to make sure that they are “mortgage ready” when eligible to enter the housing market again. Affected consumers usually learn of this problem during a contract if their conventional loan cannot be approved using the Fannie Mae workaround (there is
M
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
54
no workaround in Freddie Mac). The result is: 1. A costly fix called a Rapid Rescore that must be paid for by the lender. 2. A change to a more expensive portfolio conventional loan. 3. A change to an FHA mortgage that requires a mortgage insurance premium. Many lenders are still not aware of the Fannie Mae workaround and tell the past short seller to “get credit fixed and come back.” Or, consumers are not provided the full story and are often unaware of which of the three credit bureaus (Experian, Equifax, TransUnion) is producing the foreclosure credit code. Consumers attempt to get this credit fixed using a “Dispute” that triggers a new “Date Reported” that falls within the wait timeframe required for a short sale or modification. If the “Dispute” shows up on the credit report, it must be deleted for a new conventional mortgage (though this appears to be changing with DU 10.1). The need to assist eligible past short-sellers before they sign a contract prompted an initiative that connects affected consumers with trained housing counselors who provide a correction rather than a temporary fix. And during training, it was discovered that this same foreclosure credit code is often applied to mortgage credit of those with a modification where prior delinquency exceeded 120 days.
Even more alarming, a recent consumer that did not have a past short sale, modification or foreclosure, but did have excessive mortgage late payments and finally sold her home with a small profit, was turned down for a car loan because her past mortgage credit showed up as a foreclosure. The foreclosure showed up on the consumer’s credit report, not through the Fannie Mae or Freddie Mac mortgage automated underwriting system. Not yet investigated is what impact the foreclosure code may have on obtaining new credit for those affected. While preparing for the HUD HCFAC presentation in D.C., we discovered that the mix of specialists from the credit, lending, mortgage and housing counseling sectors is what is allowing progress to be made on this problem. Discussions with the Consumer Financial Protection Bureau (CFPB) resulted in an “Ask for a solution” that is currently being examined. Another door was opened to HOPE NOW that is already connecting housing counselors, community development agencies, realtors and lenders. Two instructional Webinars have already occurred for housing
counselors thanks to the National Housing Resource Center (NHRC) and a pilot training program is underway at the National Foundation for Credit Counseling (NFCC.org). On May 16, the HCFAC panelists along with the HUD Deputy Assistant Secretary for Housing Counseling and additional housing counseling professionals, met with the Federal Housing Finance Agency (FHFA) to discuss how the foreclosure credit code problem is affecting government-sponsored enterprise (GSE) market share and solutions that could help. The group recently spoke with U.S. Sen. Bill Nelson’s office who made a connection with the Consumer Data Industry Association (CDIA) to discuss how the foreclosure code applied to past short sale and modification credit negatively impacts affected consumers. The group will also speak with the National Association of Realtors (NAR) to explain how this pre-purchase help can assist Realtors and their clients. We are close to finally offering relief to a problem that has negatively affected the ability for so many to come back into the housing market. 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.
the non-qm market
continued from page 33
quite often needed with NonQM/non-prime loans. Many lenders not specializing in this area are “pass-through” correspondents with limited ability to truly restructure the loans to be able to achieve the results needed for closing.
and government underwriters cannot make the switch without extensive training. l
l
NationalMortgageProfessional.com
l
Personal attention. No originator wants a wholesale lender that doesn’t get back to them for days or weeks. Originators should look for wholesalers that provide great service and personal attention to the originators and borrowers they work with.
As for the future of non-QM loans, the question is no longer if they will take off, but when. All the signs point toward strong growth in loans that don’t fit in the traditional credit box. For lenders, taking advantage of this opportunity will require a wholesale partner or partners with the nonQM skills, knowledge and expertise to ensure your borrowers get the loans they need and you get the results you want.
In-house underwriting. Wholesale lenders with inhouse underwriters generally provide a smoother, more efficient process and are able to avoid closing delays. It is critical for the wholesale lender to make internal underwriting decisions and the ability to make exceptions, which are
Raymond Eshaghian is the president and founder of Greenbox Loans Inc., a wholesale lender specializing in non-QM/non-prime loans. Eshaghian has more than 28 years of experience in mortgage lending in executive or principal roles. He has vast experience and expertise in the non-QM market.
56
JUNE 2017 n National Mortgage Professional Magazine n
Healthy product range. To accommodate difficult borrowing situations—and there are many—search for a wholesaler with a wide array of loan products and programs. The best non-QM wholesalers will work hard to come up with a loan for just about any borrower, including those who are just a day out of foreclosure. Such wholesalers will not only offer loan programs other lenders don’t, they will also come up with innovative approaches to help your underserved customers.
the elite performer
l
continued from page 8
rich, but only your balance sheet can confirm wealth. Set all business and personal goals around the financial impact and include financial details within those goals. If you find yourself coming short in meeting these goals, consider professional changes and opportunities that can improve your situation.
In order to be productive at work, you need 100% focus. If you’re stressed financially or motivated by money for the wrong reasons, this can negatively impact your production. If you have
freedom financially, you will see an abundance of success based off your ability to focus more clearly and have vision. Financial freedom provides the ability to look ahead and work on your business versus only working in your business each day with your debt or lack of cash reserves causing emotional turmoil. Set a budget and determine your plan to becoming debt free. Make money work for you versus working only for the money and build reserves. This shift in motivation produces a freedom and clarity you cannot achieve otherwise.
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.
heard on the street
New American Funding Aligns With NAHREP to Support Hispanic Wealth Project
New American Funding has joined the National Association of Hispanic Real Estate Professionals (NAHREP) in their commitment to increase Hispanic sustainable homeownership, and triple Hispanic household wealth in the next decade. The new partnership between NAHREP and New American Funding will establish an actionable plan in support of NAHREP’s Hispanic Wealth Project goal of achieving a 50 percent rate of U.S. Hispanic homeownership. “We’re a community-driven lender and we believe this alignment is a way to enrich lives and make a positive impact on Hispanic communities,” said Rick Arvielo, CEO of New American Funding. “This commitment is vital in attending to the needs of the future homebuyer and part of our personal mission to empower the Hispanic community. We are very proud to join the efforts of NAHREP,” said Patty Arvielo, president and co-founder of New American Funding. Home Point Closes on Acquisition of Stonegate Mortgage
Home Point Financial Corporation has announced that it has completed its acquisition of Stonegate Mortgage Corporation. “The successful completion of this acquisition is an important milestone for us,” said Willie Newman, Home Point’s chief executive officer. “Home Point will now have full coverage in all channels of origination, as well as warehouse lending offerings. In addition, the acquisition brings an in-house servicing platform to Home Point, giving us the ability to directly manage relationships with our customers. The most exciting part is combining the experience and talent of these two great companies in the service of our customers.” As previously disclosed, Stonegate Mortgage’s board of directors unanimously approved the transaction following a comprehensive review of the
continued from page 43
transaction and strategic alternatives. Stonegate Mortgage’s stockholders overwhelmingly approved all proposals relating to the transaction at a special meeting of stockholders. “Stonegate Mortgage always has been focused on delivering a superior customer experience,” said former Stonegate Mortgage Chief Executive Officer Jim Smith, who will serve as the combined organization’s Chief Operating Officer. “We are delighted to join the Home Point team to help customers achieve the American dream of homeownership.” The Mortgage Collaborative Partners With LendingQB
The Mortgage Collaborative and LendingQB have announced a partnership to provide network members with access to LendingQB’s suite of services. The Mortgage Collaborative selected LendingQB as the exclusive Loan Origination Software (LOS) partner of network due to the technology and operational expertise the company can provide its members. Network members who decide to work with LendingQB will find a 100 percent Web browser-based system that manages the entire mortgage lending process intuitively and efficiently. “Lenders require technology that can efficiently support their unique business objectives,” said Rich Swerbinsky, EVP, national sales and strategic alliances for The Mortgage Collaborative. “Partnering with LendingQB allows The Collaborative to offer our members a proven and innovative LOS platform that provides the technological backbone for a nimble and efficient mortgage process.” LendingQB provides mortgage lenders with a holistic model for optimizing business performance with powerful best practices that enable rapid user adoption and software effectiveness. LendingQB’s open API enables integrations with more than 200 continued on page 98
Wh here P Prime Lending End ds Citadel a Ser S vici iciing Be egins AFTER PRIME MAGGI Plu us / The new Alt-A A
650 0
24 mo. from o life event Up to $3 m million loan amount 90% LTTV available Bank statemen e ts for income Interest-on nly available
57
TM
Foreclosurre, short sale & BK O OK No reserves e 90% LTTV available Bank statemen e ts for income Down to 5 500 Fico, O/O & N/O
www.citadelsservicing.com
Call Citadel Servicing v Now!
949-900--6630 sales@citadelservicing.c vicing com
BEFORE HARD M MONEY 15707 Rockfield B Blvd, 3rd Floor, Irvine, CA 92 2618 N NMLS ID 144549 For mortgage g professionals only. This information n is intended fo or the exclusive use of licensed e real estate and mortgage lending professionals in accordance with local laaws and regulations. Disstribution to the general public is prohib bited. Rates and programs are subject to change without notice. Citadel Servicin ng Corporation is an Equal Opportunity Emplo E yer and d does not discriminate against individualls on the basis of race, gender, color, relig gion, national origin, age, disability, veter e an status, or other classification proteccted by law.
EQUAL HOUSING OPPORTUNITY
n National Mortgage Professional Magazine n JUNE 2017
Wholessale Non-Prime Lending
ODF / Outsside Dodd Frank Stated income - DSCR Business p purpose Interest- o only available
NationalMortgageProfessional.com
NON PRIME / 1st & 2nd mortggage
House Passes Dodd-
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
58
he U.S. House of Representatives has announced the passage of the Financial CHOICE Act (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs), legislation that is being promoted to overhaul and replace the Dodd-Frank Act. “Every promise of Dodd-Frank has been broken,” said House Financial Services Committee Chairman Jeb Hensarling (R-TX), the bill’s author. “Fortunately there is a better, smarter way. It’s called the Financial CHOICE Act. It stands for economic growth for all, but bank bailouts
T
for none. We will end bank bailouts once and for all. We will replace bailouts with bankruptcy. We will replace economic stagnation with a growing, healthy economy.” After clearing the House Financial Services Committee last month in a vote along party lines, the bill passed the full House by 233-186, with no Democrats supporting the measure. It would need to clear the Senate floor before reaching the desk of President Donald Trump. The President Tweeted his satisfaction with the House vote, saying: “Congratulations to Jeb Hensarling & Republicans on
successful House vote to repeal major parts of the 2010 DoddFrank financial law. GROWTH!” During his presidential campaign, Trump used an interview with Reuters in May 2016 to blame the 2010 legislation for having a deleterious impact on the financial services industry and the wider economy. Since coming to the White House, he kept up his criticism. “We expect to be cutting a lot out of Dodd-Frank because frankly, I have so many people, friends of mine that had nice businesses, they can’t borrow money,” President Trump said after a White House meeting
with executives from Wall Street. “They just can’t get any money because the banks just won’t let them borrow it because of the rules and regulations in Dodd-Frank.”
What could be expected
The Congressional Budget Office (CBO) estimated the Financial CHOICE Act would reduce the deficit by $33.6 billion over 10 years and that the bill’s regulatory relief would benefit community banks and
d-Frank Reform Act
59
NationalMortgageProfessional.com
in trouble. They are being crushed by the costly rules imposed on them by the DoddFrank Act. This law may have had good intentions, but its consequences have been dire for Main Street. Let me put it this way: It is more than a thousand pages long and has more rules and regulations than any other Obama-era law. The burdens created are real.” According to Rep. Ryan, the CHOICE Act aims to: l Rein in Dodd-Frank l Deliver relief to Main Street l End taxpayer bailouts l Cut the deficit by $24 billion l Rein in unchecked Washington bureaucrats
Financial industry thumbs up Reaction to the bill’s passage from financial service trade association leaders was swift and positive. “The House has taken the lead in efforts to modernize the financial regulatory system to advance the goal of boosting the economy without sacrificing important consumer and taxpayer protections,” said Tim Pawlenty, chief executive officer of the Financial Services Roundtable. “We look forward
to working with Congress to get many of the provisions in the CHOICE Act to the President’s desk.” Dan Berger, president and CEO of the National Association of FederallyInsured Credit Unions (NAFCU), also voiced praise. “NAFCU praises the passage of this important bill that, if enacted, would help provide the credit union industry with muchneeded regulatory relief,” said Berger. “We appreciate members of the House and bill author Chairman Jeb Hensarling for recognizing the continued on page 96
n National Mortgage Professional Magazine n JUNE 2017
credit unions. However, the nation’s largest banks would be unlikely to raise enough capital to meet the bill’s requirement for substantial regulatory relief, the CBO added. Speaker of the House Paul Ryan (R-WI) praised the concept of the Hensarling bill while claiming the Dodd-Frank Act was having an onerous effect on the economy. “Small businesses are struggling,” he said. “They have been unable to hire, invest or get the loans they need to get off the ground. Families looking to keep their money safe are hit with fees they can’t afford. And why? Our community banks are
JUNE 2017 n National Mortgage Professional Magazine n NationalMortgageProfessional.com
60
A
S P E C I A L
F O C U S
O N
Mortgage Technology The Technology Behind Bitcoin Is Coming to Mortgage Lending By Al Stanley
B
continued on page 62
n National Mortgage Professional Magazine n JUNE 2017
Blockchain security Blockchain allows financial services companies to exchange sensitive information securely and efficiently because each “block” of information is encrypted and time-stamped. While the chains of data can be limitless, rules can be written so that recipients only see individual secure and accurate blocks of information that the sender wishes them to see. Instead of writing rules and appointing a regulator to monitor for breaches, which is how the current financial system works, the blockchain sets the rules and the network checks for compliance. If a transaction breaks the rules (for example, if the digital signatures don’t reconcile), it is rejected by the network. This facilitates the ability for lenders to securely exchange data while realizing many efficiencies on behalf of its consumers. In addition to Bitcoin and similar cryptocurrencies (BlackCoin, Dash, Nxt), blockchain is now being used and tested for a variety of applications. Bitcoin, the most well-known blockchain application, has suffered bad press due to security issues (such as the 2014 failure of one bitcoin exchange and the more recent hacks of others) that gave pause to some early-adopter lenders considering leveraging blockchain technology. It’s important to note that the infamous hacks that hit bitcoin exchanges exposed weaknesses in Bitcoin and not necessarily problems in the blockchain itself.
61
NationalMortgageProfessional.com
lockchain or distributed ledger technology—the software behind Bitcoin and other cryptocurrencies—is one of the most important emerging technology innovations to hit financial services and mortgage lending in decades. Within five to 10 years, it is likely that major lending organizations will process all customer information in these super secure databases. Professionals in mortgage and other financial services sectors should gain an understanding about how blockchain works. For certain, they will soon face numerous industry and internal discussions. They should not wait before getting a grasp of the key considerations needed to form an opinion on the impact to their organizations. A February 2017 Harvard Business Review article defines blockchain as “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.” Virtual currencies, starting in 2008 with Bitcoin, were the first applications to use blockchain.
a special focus on MORTGAGE TECHNOLOGY
a special focus on MORTGAGE TECHNOLOG
the technology behind bitcoin is coming to mortgage lending
Blockchain in mortgage lending: impacts and opportunities Until recently, only a small number of financial institutions and technology startups were focused on making incremental technology improvements using blockchains. However, the technology continues to attract interest from the banking community and mortgage lenders alike. As a result, more and more lenders are now investigating or testing how blockchain can be leveraged as a key differentiator for their businesses. For example, the Big Four accounting firms (EY, PwC, KPMG and Deloitte) are all testing blockchain applications. A January 2017 World Economic Forum report predicted that by 2025, 10 percent of global GDP will be stored on blockchains or blockchain-related technology. In mortgage banking, blockchain technology could
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
62
continued from page 61
have a significant impact and deliver additional value in several areas: l Document management and tracking: By sending required mortgage disclosures, and other documentation via blockchains, lenders can more effectively prove compliance. l Cost reduction: Recent estimates show that it costs approximately $7,500 to originate a single loan, three times the cost in 2006. Blockchain technology can securely speed up and automate the increasingly complex mortgage process. l Lending turn times: The Financial Times recently published an article on a joint testing of blockchain technology by the Bank of China and HSBC for property valuation system of home loans in Hong Kong. One goal
“Blockchain technology has the potential to transform mortgage lending by replacing processes governed by easy-to-change and easy-to-lose record keeping with single source, automatically verified, accurate, unchangeable shared databases.” of this project is drastically lowering the turn times inherent in completing appraisals, thereby saving time and money. This product will be released soon. l Workflow improvement: Blockchains innovations that will enhance mortgage processing include smart contracts and asset registries. Other new types of transactions will go beyond financial, legal and regulatory uses. In a piece published earlier this year at CoinDesk.com, Leo Loomie, senior vice president of client services at Digital Risk LLC, a mortgage processing provider, noted that: “A mortgage application requires hundreds of documents and very sensitive data.” He added “W-2s, income statements, asset statements, bank statements, Social Security Numbers–and all of that has to
change hands numerous times over a variety of channels: Fax, e-mail, mobile phone.” To process a mortgage today documents are handled by numerous parties across the loan workflow spectrum. The difficulty of managing so many touch points and document revisions has spurred interest in finding out whether blockchain can substantially improve data integrity and workflow problems in the mortgage lending process. Where to start? Blockchain startups in the mortgage industry, such as Factom, have launched integrated applications or turnkey solutions for lenders. These products use blockchain technology to reduce documentation, compliance and litigation expenses by digitally and securely locking a lender’s closing documents, while providing a complete and immutable history on every file,
LOGY
a special focus on MORTGAGE TECHNOLOGY
from origination to closing. The blockchain technology applied to loan documents and data provides the transparency and permanence needed to ensure document integrity. Much of the initial private blockchain-centric development is taking place in financial services, insurance, retail, and energy sectors, often within small networks of firms to limit coordination overhead. The February Harvard Business Review article suggests “for most lenders, the easiest place to start are with existing single-purpose applications, which minimize risk because they aren’t new and involve little coordination with third parties.” It also suggests that “One strategy is to add bitcoin as a payment mechanism. The infrastructure and market for bitcoin are already well developed, and adopting the virtual currency will force a variety of functions, including IT, finance, accounting, sales, and marketing, to build blockchain capabilities.” Experimenting with single-purpose applications as a starting point will make things easier and help organizations develop the skills they need for more advanced applications.
financial system. Lenders who invest in some level of human and financial resources to develop and test blockchain
solutions within their business segments will reap the benefits, and those who don’t, risk being left behind.
Al Stanley is chief information officer and chief technology officer for Angel Oak Companies, the management company for the nation’s top non-QM lender, Angel Oak Mortgage Solutions. Al is responsible for the technology direction and investments across all Angel Oak companies inclusive of IT infrastructure and operations, information security, corporate systems, software and applications, enterprise architecture, and technology governance. He may be reached by e-mail at Al.Stanley@AngelOakCapital.com or call (855) 539-4910.
63
NationalMortgageProfessional.com
n National Mortgage Professional Magazine n JUNE 2017
Charting a course Blockchain technology has the potential to transform mortgage lending by replacing processes governed by easy-to-change and easy-to-lose record keeping with single source, automatically verified, accurate, unchangeable shared databases. It can ultimately become the tool that enables wider adoption of digital mortgages. While its current capabilities are still limited— transaction volume is low compared to traditional systems and large-scale adoption of the technology is many years away—blockchain allows industry leaders to create a compelling vision of our industry’s future. No other applications can address both regulatory and economic issues to systematize efficiencies and cost savings. Blockchain will allow lenders of any size to achieve cost reduction and operational efficiencies in specific existing business segments or across the entire enterprise. For example, lenders leveraging
blockchain will be able to interact with various constituents to reliably send and receive payments at lower rates, as well as process documents and data at lower transaction costs compared to those in traditional legacy mortgage lending systems. Preparing for these changes means investing in research and experimentation and those who do so will be well placed to thrive in the new, emerging
a special focus on MORTGAGE TECH
a special focus on MORTGAGE TECHNOLOGY
a special focus on MORTGAGE TECHNOLOG
Going Mobile and Overcoming Hurdles to a Smooth Transition By Chris Knowlton & Joe Wilson s we (Chris Knowlton of Inlanta Mortgage Inc. and Joe Wilson of SimpleNexus) started writing this article together, Chris reflected on when he purchased his first home and how the process has changed since then. “When I bought my first home back in 1998, I remember driving around with a newspaper and a map, looking for properties in the neighborhoods we liked best. I thought I was so efficient, plotting our course each weekend with my dry-erase map and the open house schedule from the newspaper,” Knowlton said. “Fast-forward to today, and the process remains basically the same with the two most important tools for most buyers still including a car and a map.” Today, the map is much more high-tech in the form of an app on your phone, with an interactive map automatically populated with a customized list of houses for sale based on your location using a satellite. Unfortunately, the car still works pretty much the same way it did in 1998, and really 1908, but that’s a subject for a different article. Mobile technology and the constant use of mobile devices among the population is nothing new in the year 2017, especially when it comes to purchasing decisions including purchasing a new home. In fact, according to the Zillow Group Report for Consumer Housing Trends in 2016, buyers currently use multiple devices during their home search process with 56 percent of buyers using mobile Web sites and 48 percent of buyers using mobile apps. With these home search apps increasing in usage to homebuyers of all ages, having the appropriate mobile mortgage solution is essential. As all business professionals know, you need to meet your customers where they are, and in today’s world, they are on their phone. “Going mobile” has become an important change for lenders to adapt to in order to continue to grow their business and thrive
A
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
64
with tech-savvy home shoppers. It is no longer a bonus feature for a mortgage company to have a mobile strategy, it is a must. The biggest part of your mobile strategy is having your very own mobile app. Many lenders have already embraced this transition and are jumping on board with new and better technology with one goal in mind: Improving customer satisfaction and the
login credentials that come with each of those tools. Suddenly this era of technological advancement presents us with an overload of apps and tools that require too much attention. This separation of functionality also presents itself to the customer and can lead to fallout due to impatience and confusion. Despite being designed to empower and aid the people
“It is no longer a bonus feature for a mortgage company to have a mobile strategy, it is a must.”
overall experience of loan officers and their customers. While many strides have been made in developing tools that satisfy a variety of needs and demands, a new problem has come with the technological answers adopted by our mortgage professionals: how do we consolidate what has now become a slew of disparate tools that function independently of each other? Consider the number of tools, apps, software, Web sites, and more that are part of a loan officer’s arsenal. And beyond that, think of all the
using them, they can be overwhelming. A well-developed app, designed specifically for mortgage professionals, seeks to carefully consider the problem of having scattered applications that are still important to the work of loan officers. The mobile platform provides a single space where loan officers can easily engage their customers. With the right app and through custom branding, customers know exactly who they are working with and have easy access to their loan officer and all their tools without having to jump
from mobile to desktop or app to Web. For local homebuyers, having a mobile app that offers information and education on the mortgage process, updates on current rates and loan options, and ways they can contact you all at their fingertips helps increase your credibility as a loan officer and helps build and maintain that relationship with your borrower. The same is true for long-distance buyers, though the app may prove to be even more valuable as it allows your buyers to stay informed with their loan process without needing to step foot into your office. This is especially true in markets with a low inventory environment, making these readily-available tools even more helpful to homebuyers. In addition to providing customers with a convenient mobile platform that engages them and keeps them connected to their loan officer, an efficient mobile platform unites the tools that loan officers have come to rely on. With tools centralized in one place, the hassle of having to remember a variety of login credentials can be eliminated. Customers end up with a smooth and easy experience, while loan officers are able to limit or eliminate the need for customers to venture outside of their custom-branded platform. With all of the tools a borrower needs in one place, loan officers don’t have to risk sending customers to third party sites where they can be exposed to competitors, ultimately helping loan officers stay front and center throughout the home buying experience. By now, it should be clear why a mobile strategy is necessary. In order to begin diving into a mobile strategy, there are three vital steps to take to ensure success for you and your team of loan officers. First, create a welldefined plan and timeline for implementation. Second, find a vendor that integrates smoothly with your loan origination system (LOS). Third, have a secure document uploading feature for your customers. Just as you would outline the mortgage process for your customer, having a well-defined plan and timeline for implementation, which includes research, training, and timing, is the first step for a successful app launch. Determine what key
LOGY
a special focus on MORTGAGE TECHNOLOGY
features are most important to you in an app, then do your research on the various mortgage app vendors on the market. Once you research vendors and select the one that meets all of your requirements, set up a team of project leaders who will learn the ins and outs of the app first. This team will be the ones who help with setting up the app to meet your needs, and then help train loan officers to properly use the app themselves. They can also train loan officers on how they can help their customers use the app. Once the app is setup to your specifications and there is a strong understanding of the benefits of the app, how it works, and how it can help customers go through the mortgage process more efficiently, the app may then be launched and marketed. Ensuring that the vendor you chose can provide you with an efficient mobile app that integrates smoothly with your LOS is a must. This is one of, if not the key feature, of providing customers with a mobile platform
where they are able to directly apply for a mortgage. In the midst of our technological tools, mortgage professionals, of course, depend on their LOS. Having a mobile platform that strongly integrates with your specific LOS allows for a secure time-saver that is critical to the endeavor of consolidating various software applications. Because the LOS and mobile platform are directly integrated, there are no issues of having to duplicate information or having records that are logged in one system that you have to arduously move to an LOS. Part of this process also includes having a feature in the app that will allow your customers to securely upload documents to your LOS to help speed the process along. LOS integration also provides an unprecedented capacity to keep everyone updated on the whole process. Transparency is provided for all parties. Loan officers can keep track of their borrower’s needs and easily take a loan application directly from
a special focus on MORTGAGE TECH
the mobile platform to create a loan file. And from there, as loan officers work on the loan, everyone involved receives instant updates of where the loan is at and where the borrower is at in the process. With the integration with your LOS and other tools in your mobile platform, a sense of involvement, speed, and ease is built right into the experience for your customers. Ultimately, between having a set of centralized tools, and a transparent loan process thanks to a tight LOS integration, having
a strong mobile platform can help shorten the time frame required to close on a loan. A SimpleNexus study found a 20 percent reduction in time required to get to closing, mostly attributed to easy document collection facilitated by having a mobile platform that can move information and documents straight to the LOS. And because the platform is mobile, loan officers can do their job from anywhere, allowing them to get out of the office and do what they do best–sell!
Chris Knowlton is the chief information officer of Inlanta Mortgage. He has more than 20 years of experience in the field of information technology, with a unique shared knowledge base and expertise in business marketing and communication. Joe Wilson is chief marketing officer at SimpleNexus. In his current role, Joe oversees marketing and sales at SimpleNexus, which provides a white-labeled mobile platform to connect loan originators with their borrowers and Realtors to create a single location to complete a mortgage and create a Mobile Originator. 65
FEATURED MONTHLY EMPLOYMENT OPPORTUNITIES
Atlanta, DC/Northern VA, New Orleans, Pittsburgh, Portland and Northern CA
• Plan, develop, and execute sales strategy to meet established goals in assigned territory • Secure new and maintain current relationships with originators, through both a wholesale and correspondent channel • Market Angel Oak products and programs to the mortgage and real estate community • Serve as liaison between brokers and operations team With an industry leading reputation for delivering an extraordinary mortgage experience, we are also looking for underwriters and other operations positions to support this growth in our Atlanta headquarters. Don’t sit around while others take advantage of this growing market. Come join the nation’s top Non-QM lender by emailing careers@angeloakms.com for additional information and consideration.
www.angeloakms.com
n National Mortgage Professional Magazine n JUNE 2017
We’re looking to more than double our sales force this year to take advantage of the fastest growing segment of the mortgage industry. If you’re an experienced Wholesale Account Executive or have ever considered becoming one, come talk to us today.
NationalMortgageProfessional.com
Account Executive
a special focus on MORTGAGE TECHNOLOGY
a special focus on MORTGAGE TECHNOLOG
E-Loans and Apps: How Technology Is Changing Lending By Rich Kuegler obile devices have changed the way we interact, the way we drive, the way we read, and increasingly, they’re also changing the way we buy a home. The next wave of homebuyers is shaking up the mortgage market and is impacting the way mortgage lenders function. Millennials are changing consumer habits and encouraging many industries, including the mortgage and lending industry, to embrace technology and re-engineer its processes to keep up with the demands of a new generation of homebuyers. That’s not to say that technology and automation will completely take over the mortgage industry–the regulations that govern lenders would make that difficult–but it certainly has the potential to cause serious disruptions and efficiencies for the industry. It’s no secret that both homebuyers and lenders are increasingly relying on technology to do business.
M
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
66
Who is leading the pack and how are they doing it? Many companies recognized the enhancements that technology offers and several are embracing the changes. Ellie Mae has evolved its Encompass platform, enabling new integrations and workflow that help lenders move the loan application process forward. Other companies have leveraged digital mortgage capabilities to allow borrowers to more easily apply for mortgages and to allow all parties involved to seamlessly share and track information, documents and transactions. These technologies save time by allowing applicants to fill out the information once and apply it as needed throughout the application. The efficiencies don’t stop at the borrower level, though. When applications become digitized, every part of the mortgage process becomes streamlined, all the way to the fulfillment process. Loan
originators benefit through shorter loan application cycle times. Lenders can leverage the automation to review information more timely and to decision loans more quickly. Integrating other components, such as product and pricing engines, also provides benefit to underwriters and investors looking through increased transparency and efficiency.
New mobile apps like Rocket Mortgage Launchpad allow loan applicants to start filling out a loan application on their cell phone in a more simplified way. Sofi has built on success in the student lending space, deploying an app to support their version of a mobile mortgage experience. The importance of delivering a superior customer experience in the origination process has had a
“Integrated automation truly makes for a better, more efficient experience for both the lender and borrower, as well as for the all parties involved in the transaction.”
Integrated automation truly makes for a better, more efficient experience for both the lender and borrower, as well as for the all parties involved in the transaction. From the loan application to close Similar to the advances in mortgage platforms and origination workflow, mobile loan applications have begun to emerge to create disruption in the lending industry.
significant effect across the mortgage market already. Fulfillment is one of the many areas where mobile technology can have a positive effect on the customer experience. Introducing some other technological capabilities–like using mobile devices to maximize document collaboration and potentially fulfill e-signing needs–provides advantage for borrowers. The labor intensive appraisal process is also ripe for change and
improvement. Traditionally, lenders must find an appraiser, who contacts the customer, prepares and submits the appraisal, then waits for quality control to review and check it before moving forward. In addition to already overworked market conditions, the manual nature of the process could further delay delivery for weeks. However, mobile apps are active in the market to make it easier to find and select the best qualified appraiser and move forward with this important part of the fulfillment process. Much like using ride-sharing apps, these apps offer greater flexibility and more control, allowing for real-time feedback and offer better transparency throughout the process. Order fulfillment is also completed directly on the mobile device, thanks to mobile camera technology, GPS location services and easy to complete drop-downs. Thanks to technology, the loan officer is suddenly no longer the middleman, but more an efficient hub of information, sharing access to information with all those involved in the transaction at the same time. Loan status updates can be shared, documents can be reviewed and delivered, and collaboration can happen in real-time. Even during closings, technology has the ability to facilitate and enhance the process. While large scale adoption is still seemingly several years away, the industry is pivoting toward support of e-signing, e-closing and e-notarization. The E-Sign Act and adoption of UETA (Uniform Electronic Transactions Act) by 47 of the 50 states paved the way for the acceptance of electronic signatures. Many document providers and fulfillment platforms have begun planning their roadmap to support this shift from brick-and-mortar locations closings to a secure electronic transaction room where both buyers and sellers can log on without having to drive into a physical location. At Stewart, we are keen on eenabling the closing experience, giving access to all the parties in the transaction and enabling them to gather in
LOGY
a special focus on MORTGAGE TECHNOLOGY
an electronic room. This is a way to leverage technology as part of the process, along with cost savings and in support of regulatory compliance, with the main objective being delivery of an exceptional customer experience. What does this mean for ensuring a secure lending process? As technology becomes more engrained in the lending process, the security of data and non-public information is a concern that dominates discussion. Transparency and process speed are important factors in delivering a great customer experience, but these cannot take a back seat to security and compliance. Lenders are used to sharing private information, but as more and more of that information begins to be shared and stored on the cloud and emerging platforms and devices, itâ&#x20AC;&#x2122;s critical that issues of security are addressed and resolved. Just as all people/parties involved in the
transaction must be vetted, mobile apps and technology used throughout the lending process must go through necessary security protocols to ensure full regulatory compliance and optimal security. Another large hurdle that must be tackled by the industry is the acceptance of e-mortgages and e-notes, which is an emerging trend. Major investors like Freddie Mac and Fanny Mae have led the way in eMortgages and many warehouse lenders have made public their support of eMortgage adoption. Itâ&#x20AC;&#x2122;s easy to see the appeal. The validity of the data can be verified easily and fraud becomes less of a concern because information is coming from the same source data. In addition, digital files are easier to share than shipping paper files through the mail. This results in more transparency and increased cost efficiency. So now what? As paperintensive processes becomes
a special focus on MORTGAGE TECH
more infrequent in our increasingly digital world, the lending industry will follow suit, albeit a bit more cautiously and deliberately. In fact, thereâ&#x20AC;&#x2122;s already evidence to suggest that change is on the way. If an app or a device helps keep borrower and lender data safe, keeps the process transparent, and eases
communication for both the lender and the borrower, then itâ&#x20AC;&#x2122;s likely to become the new way lenders conduct business. Ultimately we must adjust to do what our customers, the new generation of homebuyers, are looking for in the home buying and real estate lending process.
Rich Kuegler serves as senior vice president of Enterprise Lender Sales for Stewart Title, responsible for business development and strategic relationships with real estate lenders. In his 19 years in the real estate lending marketplace, he has held executive-level positions with Clear Capital, DataQuick and TransUnion Settlement Solutions in sales, strategic accounts and product development. 67
Au
dit
SEAMLESS, AFFORDABLE SYSTEM MANAGEMENT &%$#"! $ $ $# $ # ! ! # $$ # %$# $ # $$ #! # ! $#! ! # # # ! $# ! # # $#! ! # % # $ # %$# $ !
!# $ #"!
% # $ ! # $ ! # $ $ $
!#"! # $ $ $
!# ! $# !# ! ! # %$ ! $ # ! ! # $# # $ $
Visit us at ComergenceCompliance.com/SMC to learn more.
on
ito
rin
g
n National Mortgage Professional Magazine n JUNE 2017
COMPLIANCE
M
NationalMortgageProfessional.com
SOCIAL MEDIA
s&
a special focus on MORTGAGE TECHNOLOGY
Mining QC Data: The Financial Benefit of Proactive Mortgage QC By Phil McCall
hen Albert Einstein said, “Information is not knowledge,” he could have been talking about the mortgage quality control (QC) process. As the COO of a leading QC technology provider, I absolutely applaud the industry for its increased use of QC technology. That said, there are still a lot of lenders and servicers who have access to a huge amount of valuable information, but aren’t turning it into knowledge and leveraging it to its full capacity. I’m not criticizing. Sometimes when you’re working with a great technology, it’s easy to get caught up in all the things that the software does and I’ll tell you—particularly because our system is so configurable and flexible—that can be an awful lot of power. While it’s great to have a technology this powerful, the QC leaders need to maintain a proactive stance on how they are mining their QC data to efficiently and methodically identify valuable defect data. With the right technology and a little bit of analytics, you can attain the knowledge to make proactive choices that can lead to some very cost-saving measures. Chances are, assuming you have a formal QC process, you have a lot of information you’ve gathered in the pre-funding QC process that can be leveraged in the postclosing world and vice versa. Let me explain how. As basic as this may sound, the first step to creating a proactive QC program is simply making the decision to establish a program. Meaning, don’t start evaluating data haphazardly. To reap the maximum benefit, you need to make a decision to collect and analyze specific data on an ongoing basis. You need to make a commitment to a continued effort. Once you’ve made that decision and passed the word to your staff, you need to start collecting and reviewing your
W
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
68
mortgage QC data. If you’re using a manual process, for example, one that uses an Excel spreadsheet, this is going to be a bit more difficult than if you’re using a QC technology solution. But whatever the case, you need to understand the types of defects that are occurring in your manufacturing process. If you haven’t started tracking that information, start tracking it now. Once you’re successfully tracking these defects you will quickly begin to see patterns emerging that will help guide you down a critical path. As an example, you will begin to see the frequency with which certain defects are occurring, and with each of these defects, an assigned severity. It’s important to have a clear understanding of this part to create the most efficient plan for prioritization and corrective action. If a defect with a minor severity occurred just once in the last few months, you probably won’t need to impose immediate corrective action. This would not appear to be a problem area of your manufacturing process. The ifthen of identifying defects and imposing correcting action is a critical area of the process. Often, when defects are identified, the line of business will correct the noted defect at a loan level, but fail to address the defect at the process level. The immediate goal is to catch the mistake, fix the mistake, then move on. Ideally, what you want to do is keep these mistakes from occurring in the first place. For example, if the Final Loan Estimate and/or Closing Disclosure was not in the file— which is likely, as this was the number one TRID-related defect in 2016, according to research released in ARMCO’s most recent QC Trends Report—you need to make sure that you put controls in place that assure that someone double checks that these documents are in the file prior to funding. When you start this process, you’re looking for the defects that occur with frequency and that have the
a special focus on MORTGAGE TECHNOLOG
highest severity levels. If you’re like most lenders, there will be several that rise to the top of the pile. Once you have identified patterns in your defect data, you need to begin the process of creating corrective action plans. Hopefully you’re using a QC technology that includes a corrective action planning module. A corrective action planning module will allow the QC team to identify the root cause of your defects, provide seamless interaction with the business units, track the multiple associated tasks that are required of the business units, produce custom reports and include re-testing to assure the corrective action has in fact fixed the problem. Your action plan should identify key issues and their solutions. You’ll need to make sure that reports are generated on a regular basis. Here’s a tip: if you can make those reports easy to read and easily digestible, it’s more likely that your action plan will succeed. Make it easy and intuitive for the business team to keep the program going. The more time and effort it takes to identify areas of weakness, the less likely the program will be successful. Again, it’s great if your technology does this for you. Also, make sure you determine the specific person or department that will take the corrective action, monitor their progress and be sure to set a specific date as to when you expect to start seeing improvements. My recommendation is to include a firm due date and use this date as your starting point for rechecking corrected items, and make it a ritual. Once you start putting your program together, you may feel a bit overwhelmed with information, especially if you’ve never initiated a program like this before. One of the tricks to organizing your data is to quantify the cost of your
defects. That will help you prioritize. Our industry has always been laden with rules ranging from best practice internal guidelines to federal regulations. That means we need to follow a protocol or there could be consequences. Financial ones, and dire ones at that. It seems that every week we hear about organizations fined by the Consumer Financial Protection Bureau (CFPB) for a wide range of violations. Just this year, we’ve heard of fines against mortgage companies ranging from the low millions ($1 million to $4 million) to nearly $30 million. That’s just this year. No one seems to be exempt. Small lenders, large lenders, servicers, even the credit bureaus. If you are one of the lucky ones that have not yet been through a CFPB audit, I’d suggest implementing a process to monitor the CFPB’s Web site to identify the defects that have led to enforcement actions and warning letters. Armed with this information, start crunching the numbers. Know how much those types of defects can—or have— cost your organization. If you’ve had any defaults, buybacks, foreclosures, non-salable loans or pricing hits from the secondary market, it’s imperative that you understand the root cause of each defect. This too will be a key driver of your top priorities for corrective action. It’s easy to feel like you’re already doing enough. If you have a solid QC program, you are definitely doing your share to protect your business, the industry, and your borrowers. However, I urge you to keep in mind that while reactive QC is a fantastic use of powerful information, proactive QC transitions information into the next-level knowledge that reduces risk, lower costs, and builds long-standing mortgage powerhouses.
Phil McCall is chief operating officer of ARMCO, a provider of mortgage QC technology. Phil has more than 20 years of industry experience that spans executive roles in mortgage lending and mortgage technology. Phil is a licensed real estate broker in California, is a direct endorsed underwriter for the Federal Housing Administration (FHA), and has held real estate and broker licenses in more than 20 other states.
LOGY
a special focus on MORTGAGE TECHNOLOGY
Timeless Mortgages
I
By Eric Weinstein
kid at the mall or Amazon Prime, I want it and I want it now. Mortgages are a different animal. I only get a mortgage like once every 10 years. And things change. I don’t know what I want, what the rules are or even what questions to ask. And it is a lot of money, too. The last thing I want is a salesman like at the Tire and Auto place who sells me a Johnson rod whenever I come in for an oil change. Is there even something called a Johnson rod in my car? I don’t have a clue. I need someone I can trust. A regular Joe I can talk to and not some stupid Rocket Ship guy just out of college with a Liberal Arts Degree and a nose piercing. Being old as the hills, you learn something about people and their shopping habits. I have seen it all, been there, done that and got the mortgage. My advice … if you are looking at what the future holds for the mortgage industry to get out of that tiny computer box, go out and make an effort to meet people in the flesh. Yes, the iPhone mortgage app sounds glamorous until you actually try typing all of your personal information into a tiny handheld device with calloused hands and sausage-like fingers.
It’s all a hype trick to convince you that social media is the end all, be all, cat’s pajamas of the mortgage industry. Well it ain’t! People are! The sooner you learn that, the
sooner you will be moving out of your mom’s basement and making a real living like a man (or woman, or whatever the case may be.) Now go fetch me my pipe …
Eric Weinstein worked in banking, on the commercial real estate side until 1991, when he fell in love with residential lending. In 1995, he started a small mortgage company in his basement called Carteret Mortgage Corporation, which in 2003, grew to one of the largest mortgage broker companies in the United States. Eric is semi-retired, doing mortgages by referral only. He may be reached by phone at (703) 505-8692 or e-mail EWeinstein4U@gmail.com.
Less than a minute online could auto-under write you for our ½% premium rate on your mortgage license bond ds.
www w..TheBondExchange.co om
n National Mortgage Professional Magazine n JUNE 2017
Get your mortgage bonds the easy way at TheBondEx xchange.com. Most quotes deliver e ed in under a minute. Then take a break. e Yo ou earned it.
69
NationalMortgageProfessional.com
can remember growing up in the Wild West in the late 1800s. Back then, if you wanted anything, up to and including an actual house, you could buy it in the Montgomery Ward & Co. Catalogues (No. 13 [1875].) or the Sears, Roebuck & Co. Consumer’s Guide for 1894. A.W. Campbell and Sons’ General Store just could not compete with the variety and quality of products of the industrialized East available by stagecoach (next month delivery guaranteed)! Sure, you could by a shovel from A.W., but good luck finding a cast iron soaking tub or a cotton gin. Of course, if you needed a mortgage on your old homestead, you called on Wyatt down at the Tombstone Savings and Loan. He would set you up good. Two papers to sign and you spit in your hand for the handshake. It was located just down the dusty main street road right past the saloon and livery. Watch out for the horses, they spook easy. Now fast-forward about 60 years and in the 1960s, it was all about the big malls down every block and the bank was just an 800 number away. Shopping was easy if you had a car and getting a mortgage was not the personal thing I remembered back in Tombstone. You never actually spoke to the same fella every time you called the bank and the candle shop in the mall smelled like a Sultan’s pajamas. Both gave me a massive headache. Ain’t it funny how Father Time plays tricks on your noggin? First, you shopped locally for mortgages and mail order for goods. Then, you bought your goods locally and used mail order for your mortgages. Well, get ready for another switcheroo. Here we are in the modern age and Amazon is slowing giving a death blow to the malls. People like to shop from their electronic catalogues now, but want to buy their mortgages locally from the fella down the block, working out of his home, coincidentally named Wyatt. Why do you think that is? When it comes down to it, stuff is pretty much just stuff. You want the best price and the best quality you can get. Whether it is by stagecoach, that pimply faced
a special focus on MORTGAGE TECH
a special focus on MORTGAGE TECHNOLOGY
a special focus on MORTGAGE TECHNOLOG
Beyond Self-Service and Data-Gathering Efficiency Adding the human touch to the digital mortgage ompanies of all sizes are using technology to make the lending process easier, faster and more efficient. But as the move toward adopting the digital mortgage accelerates, potential homebuyers sometimes struggle with how technology might work for them. In some applications, the self-service process can be difficult and confusing. Other portals deliver a loan from a limited array of products that may not be the best for the homebuyer. Recognizing and responding to individual consumers in the lending process must be embodied in what goes beyond applications, platforms and systems. How can technology be aligned to best suit your processes and systems to deliver a digital mortgage with distinction and meet customer needs and expectations? The challenge is designing integrated systems that can be incorporated into your existing work flow for an easier and less disruptive evolution to deliver a high-tech solution with a human touch.
C
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
70
Understanding the customer A recent phase in Guild Mortgage’s approach to enhance customer experience through technology began in late 2015 by making improvements to our current online application process. It evolved to creating a new digital mortgage option to meet the customer where they want to be–online with instant access–and to remove the frustrations and pain of the older, more traditional process. We surveyed more than 1,000 loan officers on desired features. These three ranked as most important: 1. Upload documents securely, with a mobile app 2. Instantaneous status
By Mary Ann McGarry
updates at a glance 3. Verification of assets and employment; integrate with banks and payroll companies
have access to their data whenever they want, as evidenced by the growth of online banking.
Extensive research shows the demand for this type of option is strongest with Millennials, the most tech savvy generation to date and the largest potential market for mortgages. They use
Beyond self-service technology Beyond expecting technology to deliver, online customers need to be able to trust you. This means aligning systems and
“Beyond expecting technology to deliver, online customers need to be able to trust you. This means aligning systems and communications platforms to deliver securely and reliably.”
smartphones as their primary communications, news, social, research and purchasing platform. with Gen-Xers (born between 1965 and 1980, with some now in their 50s) close behind. Millennials conduct extensive online research before contacting a lender or making most purchases. They compare options, brand quality and rankings by various consumer sites. They expect to handle most transactions online and
communications platforms to deliver securely and reliably, and having levels of customer service that build confidence every step of the way, from the first inquiry, through closing to servicing. As our teams researched existing applications and portals and emerging needs for the digital mortgage option, it became clear that the online model wouldn’t work well without human involvement in the process. First-time
homebuyers and many purchase buyers need human expertise to streamline and guide the process. Since most lenders have or will have the technology in one form or another, we saw human touch as our major differentiator. To build trust, we need to better communicate with our customer, have the expertise to help them select the right product and use technology to make it faster and more userfriendly, including through a customized mobile application. We designed MyMortgage and its systems for the 90 percent of customers who need help and guidance to get the right product. Typically, self-service digital applications offer limited choices. Beyond the asset, income and other personal data, loan professionals take individual financial goals into consideration to sort through more complex options to find what’s right for each customer. Customer need to be aligned with our internal operations, where the efficiency of collecting borrower documentation was the major motivating factor. With a centralized place for secure document access– online and paper-free–and the ability to move files along quickly, we would enhance the mortgage lending experience with our customers and improve internal productivity and efficiencies. Determining major objectives for the evolution Our major objectives were to have the flexibility to integrate into our systems, have a vendor with programming staff to modify and customize their offering, have one portal in a streamlined, consumer-friendly process and make it easy to access from anywhere with a mobile application. To get there, our teams analyzed several options. We have extensive internal programming expertise and considered developing the digital option in house, but the time to market made this the less desirable approach. We wanted simplicity, transparency and speed, with immediate access to skilled loan professionals. We looked
LOGY
a special focus on MORTGAGE TECHNOLOGY
at several providers, and ultimately chose Roostify because they had the best functionality and long-term vision. Since homebuying is an emotional process, we set up training to be both high tech and high touch as we moved to the new digital mortgage option. We aimed to build trust into the relationship, not just during the loan process but into servicing, as well. We started by testing ideas to get it right internally and see how technology and people working together could assure an excellent customer experience. To review our demos, we assembled an ad hoc technology advisory panel of high-volume producers who had an interest in technology. Their input helped determine the right path for envisioning how our portal could work.
l Market needs and expectations
We completed our nationwide roll out to 250 branches in 25
states in April 2017. Early trends on adoption are positive. We are already seeing improved productivity and anticipate reducing the days to close a loan on a consistent basis. We will be analyzing more extensive data over the next six months, and surveying our loan professionals and consumers to see what might be improved, including other ways to use technology to continue enhancing the customer experience.
Mary Ann McGarry is president and chief executive officer of Guild Mortgage and has been a member of Guild’s board of directors since 1988. She was named president in 2005 and CEO in 2007, when she led a management buyout of the company from its founder. She leads the development and execution of the company’s strategic plans and objectives, and has been one of the driving forces in formulating and executing Guild’s financial, operational and technology strategies. 71
TO OVE ! E M I IT’S T UR M
E MAK
YO
JOIN A
Loan Officers, Branch Managers and Teams
GROWING TEAM
Inside & Outside Sales positions available Carrington is expanding nationwide. We are looking for experienced managers and teams to join our organization.
Contact us to learn more about Carrington and make the move to expand your business and career.
WE OFFER:
John Cervantes |
Great compensation and benefits Operations focused on quality & speed of closing Marketing support and lead generation Licensing and compliance support Agent co-marketing programs VOTED
RECRUITER
John.Cervantes@CarringtonMH.com
949-517-7127 Carlos Fernandez |
RECRUITER
Carlos.Fernandez@CarringtonMH.com
949-517-7204 TOP 50 BEST PLACES TO WORK
6 FHA LENDER IN THE NATION
WE ARE THE #
EQUAL OPPORTUNITY EMPLOYER
© Copyright 2007-2017 Carrington Mortgage Services, LLC headquartered at 1600 South Douglass Road, Suites110 & 200A, Anaheim, CA 92806. 800-561-4567. NMLS ID #2600. Nationwide Mortgage Licensing System (NMLS) Consumer Access website: www.nmlsconsumeraccess.org. All rights reserved.
n National Mortgage Professional Magazine n JUNE 2017
Process of continuous improvement We are getting positive feedback on how we are working to include collaboration with real estate agents or third parties. After qualifying with the loan officer, the agent can track progress on loan approval, but
l Internal review, analysis l Technology review l Positioning, differentiation, creative l Strategic planning l Budgeting l Project management l Realistic expectations, milestones l Measurement, ongoing research l Continuous improvements
NationalMortgageProfessional.com
Testing processes and systems Our internal business analysts and integration team then tested the technological aspect of the platform as it evolved. We wanted a friendly look and feel, with ease of use for customers. This process took several months. We tested with a group of loan officers in California, rolled out to our California Coastal Region in February and were nationwide by April 2017. Our loan officers were open to this new process and moved quickly to embrace it. We have seen increased engagement daily from loan officers and customers. Overall, our customers feel MyMortgage is user-friendly and straightforward, which has been positive and encouraging to our loan officers. MyMortgage has been embraced by operations. The integration with verification vendors gives us verified assets, employment, salaries and tax returns. This cuts down on the amount of paper and wasted time, and reduces risk from bad data.
without access to private financial information. Compliance with privacy guidelines is essential. That’s why we are fine-tuning MyMortgage to include a chat functionality, so we have a trail of communication from anyone who has access to that transaction. For any independent mortgage lender considering moving to a digital option, the roll out can be relatively straightforward. Get daily feedback from the field and have a philosophy of continuous improvement. Sales teams constantly want new features to better communicate with their customers. Loan officers want the ability to start the transaction on their end and engage with the customer in the portal–not just respond when the customer applies online–so flexibility is important. Our internal teams analyze and prioritize from daily lists of what we need to do to improve, with more customization, integration and ongoing education. We are currently working with Roostify on better features for loan officers managing high-volume pipelines. There are few technical issues. The challenge is ongoing education about the benefits to consumers and loan professionals. We have a few loan officers who prefer to handle loans in person with pen and paper. We remind them about the importance of making things more convenient, transparent and smooth for the customer, so they don’t have to dig out their tax returns and go to an office store to scan, versus approving online access for easy uploading, which helps achieve one of our goals of eliminating the use of paper. When people see the successes, with their counterparts managing larger pipelines and receiving better customer survey results, we anticipate that almost everyone will come around. The move to the digital mortgage option has been smooth, using the following 10point action plan over some 14 months, which may be helpful to others considering the move:
a special focus on MORTGAGE TECH
a special focus on MORTGAGE TECHNOLOGY
a special focus on MORTGAGE TECHNOLOG
CRM the Right Way Providing great customer service from contact to close (and beyond) By Jordan Douglas
ou’ve heard that establishing solid relationships with your clients and referral partners is essential to your success, but have you taken the actions necessary to make it so? Sure, providing an elite level of service is the first step in crafting a business with a strong reputation, but that’s not all there is to it. We live in the age of technology. The sheer number of tools at our fingertips is unprecedented. And while there are multiple ways to market your business and improve your relationships with customers, there’s a tool specifically designed to do just that–the CRM (Customer Relationship Management system). Oftentimes, lenders (and even experienced marketers) make the mistake of using their CRM merely as a contact database. And while housing important information is a major part of any good CRM, unleashing the full capabilities of this powerful tool is only going to make a positive impact on your revenue. Correct usage of a CRM is made up of two parts. First is crafting and automating a solid email communication plan within the platform itself that will allow you to save time and energy normally spent manually emailing back-and-forth with your clients. By doing so, you can run a more efficient office while keeping in contact with your customers and partners who expect to hear from you. Second is developing a plan for timely touch points and phone calls. While you’re hopefully doing this already, using your CRM to set reminders and schedule these tasks for you will allow you to free up space in your calendar (and your brain) so you can focus on the big picture items without worrying about forgetting to contact a client. Another benefit of an optimized CRM is empowering more business opportunities. From purchased leads to past customers (who may be coming
Y
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
72
due for a refinance), your CRM should be putting in work behind the scenes so that you can spend time doing what you do best–providing personal service, maintaining relationships with referral partners, and closing loans. In order to truly take advantage of the capabilities within your system, you must first understand the messages being sent to all involved parties. Let’s take a closer look at each stage of the pipeline and what messages the clients in them should receive. Lead A lead, in this context, is a potential client with whom you have not yet had any direct interaction. Think of purchased contacts here. Your goal at this stage of the process is to capture the attention of a potential client. To do so, you’ll need to begin putting your name and your business’s name in front of them. Making them aware of the services you provide is an important part of this step, but you’ll also want to be sure to provide enough value they’ll be interested in speaking with you. Start creating value by introducing yourself and explaining why you are contacting them. This can be done with a combination of calls and emails and can be as simple as stating you’re reaching out regarding their interest in finding a home loan. Offering a free loan consultation, for example, is a great way to begin a fruitful conversation with someone who is showing interest in a mortgage. After that, your aim is to keep reminding them about you until they are at the point in the decision-making process to choose a lender. Because you’ve been in front of them during the entire process thus far, and you’re demonstrating your ability to provide personal service of value, you’ll be fresh on their minds and an easy
“And while housing important information is a major part of any good CRM, unleashing the full capabilities of this powerful tool is only going to make a positive impact on your revenue.”
first pick for the lender they work with.
and e-mails are valid options for reminders at this stage.
Prospect A prospect is a potential borrower who reaches out to you directly for financing, someone a referral partner refers directly to you for financing, or someone who was previously a lead and now wants to proceed with a loan application. Your goal is to get a completed 1003. This stage is simple–just keep asking. At this point, the prospect should be interested enough to complete the application without much convincing–they just might need some reminding. Your continued persistence (at reasonable intervals), as well as the fact you’re even remembering to contact them, showcases your commitment to your clients and your business. Set a cadence that will reach out to your prospects every few days until they’ve completed the application. While the exact timing between reminders is up to you, the idea is simply nudging them in the right direction without coming across as overbearing. Both phone calls
Pre-qual The pre-qualification stage is, ideally, a short one. But there are multiple valuable touch points you can have with your client that will keep them engaged and happy they chose you as a lender. This is your chance to educate your clients on what’s coming next in the loan process and what to expect as they move forward. You can provide them with tips on maintaining their current credit score, inform them of the documentation they’ll need for the next steps, educate them on the variety of different loan type options to choose from, and more. You have some wiggle room here, as well as a great opportunity to continue the conversation while they wait to hear about their approval. Set up reminders every few weeks to make a basic touch point phone call and schedule your emails to send about once a week until their loan request is approved or denied. Then sit back and relax as your CRM takes care of the rest.
LOGY
a special focus on MORTGAGE TECHNOLOGY
Application The application stage is the time when you have the most opportunity to showcase your professionalism and dedication. Maintaining contact with your clients throughout the process after they’ve applied is critical, and having an automated campaign set up within your CRM makes it easy. Essentially what you’ll need to do here is keep in touch with them as they hit specific loan “milestones,” such as their appraisal being received, documents being sent, when they are clear to close, etc. Depending on your CRM, the content and timing for these campaigns can be very easy to set up. A mortgage-specific CRM will have milestone campaigns out-of-the-box, allowing you to skip this otherwise laborintensive step. Many systems will even be able to auto-fill clientspecific information into your content templates. If your CRM of choice doesn’t have these pre-loaded options, setting up your campaigns can be fairly time consuming. Once done, however, you’ll end up saving a tremendous amount of time and energy in the long run.
you to take vast amounts of work off your plate from day one. It’s just about finding the option that works best for you. Remember, a CRM doesn’t only exist to house all of your contacts’ names and e-mail
addresses. It’s a Customer Relationship Management system, so use it with that in mind. You can be the lender that never leaves a customer in the dark. All it takes is a little dedication, a little work, and a great CRM.
Jordan Douglas is the marketing manager for Whiteboard Mortgage Software, the CRM and day-to-day workflow assistant that allows you to relive your most successful day—everyday. She can be reached by e-mail at Jordan.Douglas@Whiteboard.Software.
73
NationalMortgageProfessional.com
The Same as Being There in Person: Complete Interactive Sales & Marketing Training Delivered Live Anywhere Your Sales People Are Your sales team will learn and master: How to Target the Right Referral Partner Relationships l Deliver the Ultimate Agent Presentation l Easily Overcome the Fear of Rejection or Objections l
Increase Your Productivity and Effectiveness in the Field l Win the Business Over Your Competition l And so much more… l
Contact Ron Vaimberg, nmpU Executive Director & Head Coach directly at 888-979-6678 Ext. 801 or email at RonV@MortgageNewsNetwork.com for more information and pricing.
n National Mortgage Professional Magazine n JUNE 2017
Funded The funded stage exists for the sole purpose of maintaining a relationship with your past clients so you can increase the number of referrals you receive from them, as well as giving you the opportunity to offer them refinancing. Begin this part of the conversation by first asking for feedback about your performance. Being open to comments and criticism about your service is an extremely important part of improving and continuing to receive business in the future. Moving forward, it’s about showing you care. Check in after a month or so to see how everything is going. After a year has gone by, drop a line to request they allow you to update their loan file so you can be ready to assist them in the future with a new purchase, refinance opportunities, a second home, investment properties, etc. You should also be sure to set up holiday/birthday/important date campaigns to go out to each of your contacts throughout the year. It’s a small gesture that
speaks volumes about your personal service and attention to detail. This is an opportunity to show customers you care about them as a person, not just a commission check. All-in-all, a CRM is a tool that, when used correctly, can improve your customer service and overall business by leaps and bounds. Yes, it can be a lot of effort, at first, but, there are options with pre-written content and prescheduled tasks that will allow
a special focus on MORTGAGE TECH
a special focus on MORTGAGE TECHNOLOGY
a special focus on MORTGAGE TECHNOLOG
Building a Tech-Savvy Mortgage Company By Rick Arvielo echnology has influenced the way every industry does business, and mortgage banking is no different. An industry that started out with basic tools like a paper 1003 application and ink pen has now evolved into a digital environment where customers can access a mortgage application with the click of a button. As the housing industry continues rapidly moving forward, it’s necessary for lenders to constantly develop their technology so that it keeps pace with the times. That’s what the modern-day homebuyer wants. Today’s housing consumer is the most digitally advanced generation and they’re looking to engage with businesses on a high-tech level, which means lenders have to stay on the cutting-edge if they want to remain competitive. Building a tech-savvy mortgage company
T
begins with developing proprietary technology and it leads into being able to provide instant information on-the-go. When a company has this level of innovation it not only makes it easier for mortgage professionals to do their job but it ultimately gives the consumer what they’re looking for—a fast, efficient experience. Creating in-house technology Developing proprietary technology is vital when a company wants to stand out in a progressive marketplace. Custom-built technology gives lenders a greater level of flexibility that an off-theshelf product doesn’t provide. Since each company handles its loan process differently, it’s important to have customizable technology that accommodates your specific needs. When you rely solely on cookiecutter technology, it restricts your ability to maximize your company’s operating potential.
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
74
FAMP FA through the
SAAVVE THE DAATTE
AUGUST 9-12 Omni Orlando Resort att ChampionsGate a 1500 Masters Boulevard, ChampionsGate, FL 33896
REGISTTER TODAAYY! visit: www.myfamp.org
“Today’s housing consumer is the most digitally advanced generation and they’re looking to engage with businesses on a high-tech level, which means lenders have to stay on the cutting-edge if they want to remain competitive.”
When New American Funding began developing its CRM software, Bankerview in 2001, it started out as a POS system that enabled loan originators to manage their pipeline, control leads, and interact with borrowers. It has since evolved into a system with limitless options, where originators can manage e-mail campaigns, compile customer notes, monitor loan closings and commissions. Since this technology has been completely built in-house, it gives us the ability to modify it, whenever we want, as needs arise; thus we’re able to rapidly evolve and remain relevant with the current demand of our sales force; as opposed to utilizing an off-theshelf technology that doesn’t afford that same level of agility. By utilizing original technology, it also creates an increased level of efficiency for originators. That’s because when you use a multifunctional platform it can communicate with other technology, which means loan originators can perform all of their essential job responsibilities from one centralized location. Whether they’re running a property profile or
pulling credit, they don’t have to go into and out of multiple programs to perform each task, which can become time consuming. Instead, with customized technology, it gives them ease-of-use to seamlessly do their job because everything is cohesive, which in turn makes the process more fluid for everyone involved, all the way to the consumer. Going paperless Going paperless and building a 21st Century mortgage company go hand-in-hand. Since most loan originators are used to working with paper files, it can be difficult for them to make the switch because it changes the way they’ve done business for the past 20 years. Yet, in order for lenders to continue accelerating and to provide a customer-centric experience, it’s necessary to have a paperless process in place. It not only shortens the loan processing time, but it gives remote mortgage professionals the ability to do their job just as effectively as an in-house team. Since the average loan file is
LOGY
a special focus on MORTGAGE TECHNOLOGY
handled by eight to 10 people, processing the loan is slowed down when someone has to come into the office to work on a paper file or when the file has to be shipped between locations. When New American Funding noticed that paperless technology would enable our company to operate more efficiently, we made the transition in 2011 by using the LOS software, Encompass, which is ready-made technology that provides the sort of robust performance a mortgage company needs by offering key features such as compliance checks, documents, and disclosures. Utilizing a third-party vendor’s software, can at times prove to be the most effective approach. Therefore, when incorporating an off-the-shelf product, it should seamlessly interface with your custom-built technology so it maintains a smooth workflow. In utilizing Encompass, we’ve customized it to accommodate our loan process by designing it to auto-populate title fees and other loan data; and we’ve enabled it to communicate with our in-house software, Bankerview and GoGo LO. That means when a loan originator is working in Bankerview, loan information is automatically transferred to Encompass when it’s time to create a customer’s loan file.
Automated technology Keeping up with the demands of the modern-day consumer who has grown accustomed to instant responses, means that automated
technology is a must-have. Today’s borrower is looking for the sort of transparency throughout the lending process that constantly keeps them updated with the progress of their loan. From the time it goes into underwriting until the loan funds, consumers want to know their status in real-time. That means mortgage lenders have to develop their technology so that it triggers automatic e-mail updates at each important milestone. Implementing this proactive
measure not only keeps consumers from having to call in for loan updates, but it also keeps everyone informed including the real estate agent. When lenders use automated technology, they should have the ability to personalize their communication. If a CRM sends out automated generic content, it doesn’t generate a high response rate nor does it lead to a good continued on page 76
75
NationalMortgageProfessional.com
n National Mortgage Professional Magazine n JUNE 2017
Responsive technology Since today’s housing consumer uses the Internet as a primary way of engaging with businesses, it’s vital that lenders have responsive technology that adequately handles the demand. It has become increasingly more common for consumers to use their tablet or mobile device when researching businesses, than it is for them to get online via their personal computer. In fact, according to StatCounter, for the first time ever mobile Internet usage has surpassed desktop usage. With more than 50 percent of Web traffic coming from mobile devices, mortgage lenders have to make sure that they have a consumer-facing website that’s responsive to this type of technology. Creating a mobile-friendly website not only leads to a better user experience, but it also increases a company’s Web site performance on search engine results. Since search engines give a higher priority to Web sites that function better on mobile devices,
lenders have to develop technology that keeps them up-todate on every platform. Whether housing consumers are accessing your website from a tablet, phone or laptop, you should have a userfriendly design that properly accommodates their device.
a special focus on MORTGAGE TECH
a special focus on MORTGAGE TECHNOLOGY
building a tech-savvy mortgage company
consumer experience. However, when lenders have custom-built technology, it affords the added benefit of providing clients with the best customer experience because they receive tailored messages. Whether a loan originator is sending follow-up communication after an initial conversation or a drip campaign once a loan funds, personalized content creates an authentic experience that builds good customer relationships. Mobile apps Since today’s primary homebuyer is quickly emerging as the techsavvy Millennial, lenders must develop on-the-go technology that enables them to best serve this consumer. Eight of 10 Millennials turn to mobile devices or apps during the home buying process, so mobile technology is no longer an optional luxury for lenders but a must-have necessity. When developing mobile
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
76
technology, it has to be intuitively designed, easy to use, and come equipped with necessary functionality. It should always keep the end user in mind. In 2013, when New American Funding started developing its suite of apps–GoGo LO, GoGo Partner, and GoGo Home–the goal was to provide loan originators, real estate partners, and housing consumers with access to instant information in the palm of their hands. By arming mortgage professionals with real-time information on their hand-held device, it gives them the ability to do their job wherever they go. Whether it’s sending a prequalification letter, pulling credit, or managing their pipeline, mobile technology should equip loan originators with everything they need even when they’re not in the office. Since they’re working closely with real estate agents and borrowers, originators should also
a special focus on MORTGAGE TECHNOLOG
continued from page 75
be able to constantly keep both parties updated with the push of a button. E-Consent When lenders begin sending out communication in this highly automated manner, it requires consumer consent. Whether the lender is delivering a text message, e-mail or using an autodialer, they need permission to engage with borrowers through these channels. That means
mortgage companies have to first develop a strategy that enables them to efficiently obtain consumer consent, so that they can promptly move forward with using every modern mode of communication. Remaining innovative Innovative technology will continue playing a significant role in shaping the mortgage industry. In order to lead, companies will have to constantly look for ways to stay ahead of the curve. Finding future success will depend on thinking outside of the box in a way that always thinks of the customer first.
Rick Arvielo is chief executive officer of New American Funding. In 2003, Rick and his wife Patty began doing business as New American Funding, a 40-employee, refinance call-center. In 2011, Rick introduced purchase transactions to the company’s operations, and in 2012, New American Funding opened their first branch. Their retail division has since exploded, adding 130-plus retail branches and more than 750 loan officers focused on purchase transactions in only four years.
LOGY
a special focus on MORTGAGE TECHNOLOGY
Technology: The Importance of Continuous Transformation By Michael Josephs
C
indemnification related to these areas will be the key enablers to public cloud services becoming as routine as public utilities. Regardless, cloud technology has created a forced reevaluation of all services with respect to on-premise/offpremise and in-source/outsource. While off-premise solutions reduce the in-house technology footprint and can accelerate solution availability, there is a maturity curve and alignment with business continuity essentials (such as information security and privacy) to be considered. As it relates to outsourced services, where it is truly a commodity, and not something within direct view of customers, it is a valid consideration. Because of these transformative, emerging technologies, the balanced IT function has been shifting from a cost center to a revenue driver, depending on how it is managed. If IT is managed purely as infrastructure, then it is either a traditional cost center or an allocated P&L cost for lines of business. On the other hand, if IT is delivering transformative solutions that drive the creation of new revenue channels, optimizing the way human assets are leveraged, and changing the foundation of customer engagement and retention, then it is viewed as a revenue driver. Importantly, today’s leading IT professionals and business professionals, do not just talk about emerging technology, they engage with colleagues and share their observations about what can make business lines more successful or efficient. They focus on balancing fundamentals with impactful innovation.
Michael Josephs is chief information officer/chief transformation officer for American Advisors Group (AAG). As CIO/CTO, Michael is responsible for the mission-critical technology platforms that support AAG’s business and ensure the safety and security of the systems and data that run on them. His career spans more than 25 years in the technology space, with software development start-ups as well as various CIO roles with Fortune 500 companies.
77
n National Mortgage Professional Magazine n JUNE 2017
approaches and the optimization of their time and efforts. Providing a continuously improving customer experience and loan affordability are two paramount objectives for all service providers. Often the seeds of those capabilities are nestled securely within data assets, which is why more and more companies are leveraging “Big Data” exploitation strategies. Emerging “Big Data”-related technologies, techniques, and standards are providing avenues for maximizing the utility of a company’s people and simplifying channels of interaction with their clients. A key avenue for transformation is the efficiency of the people working toward completing the origination of loans for customers. In fact, one of the most compelling results of applying the new generation of analytical capabilities to large, dynamic data sets is the transformative potential for leveraging employees and improving customer engagement. IoT is also key to improving customer services. While the necessary standards for real IoT ubiquity are still emerging, services like Amazon’s Alexa create opportunities for simplified and timely engagement with customers, all worthy of exploring. By adding an IoT layer, a broad suite of possibilities can be realized for transformation within business operations and customer engagement. “Digital Engagement,” as it is now being popularly called, is providing more than just a means for customers to interact via a prebuilt channel. IoT enables customers to engage on their own terms. In order to most efficiently utilize IoT, it will likely be necessary for the enterprise to adopt what is called a Micro Service architecture. Instead of the traditional means of interaction via a single platform, be it a Web portal or origination system, the platform is broken down into small, consumable parts. These parts (or services) can then be consumed by the
user application in a way that makes sense for them. “Hey Siri, turn on the lights and play some music.” The consumer is not concerned with opening a smart home app or interacting with a sound system. The enterprise is not concerned with the necessary integration with every possible combination of smart home product. The micro service is simply developed and the creative minds of the end users engage with it in a manner that benefits them. The smart home example is a very easy-to-understand model for IoT. Applying this model to a business takes a bit of ingenuity. For example, take a very traditional notification system. Something happens in the Loan Origination Platform (LOS) and a notification to impacted stakeholders (maybe perspective borrowers) who subscribe to it goes out. These stakeholders can only “know” what has been programmed for them to be alerted about, restricting flexibility. Take this process and turn it into an IoT micro service that provides hundreds of key data points, and the stakeholders are now free to consume a broad range of events as they see fit. The ever expanding use of the cloud is also enabling transformative technology. The public cloud is on a trajectory to be as routine as any public utility or service—water, heat, gas or telephone. Already cloud services meet many of society’s needs in small computing footprints, elastic utilization pricing, accelerated new computing resource availability, and in some cases cost minimization. But information security and privacy standards are lagging, particularly in the domains of high sensitivity and regulation. Certification and
NationalMortgageProfessional.com
ontemporary CIOs need to balance the essential elements of fundamental business continuity and regulatory compliance with impactful innovation. Information security, systems availability and accuracy, and service redundancy, are just a few examples of fundamentals. A business or organization that merely focuses on availability and compliance is not sustainable. Constant adaptation to the changing environment and continuous transformation are as critical to business and organizational viability as the stability and resiliency of systems infrastructure. For mortgage lenders (reverse or forward), a culture of continuous improvement coupled with transformative technology can be a significant strategic differentiator. Technology can enhance borrower interactions and accelerate outcomes for customers. In these cases, technology and transformation play a prominent role in the identification and delivery of disruptive solutions. Leading IT groups recognize that they need to deploy Business Process Management (BPM) technology and practices to enable process improvement. They recognize that enabling their business teams with BPM will give their company a competitive advantage in driving process improvement. This competitive advantage is realized through self-sufficiency in process discovery, better prioritization and requirements of requests to technical teams, and a more efficient environment for collaboration. Many of these innovations are derived from Enterprise Data Management (EDM) opportunities, sometimes paired with emerging Internet of Things (IoT) protocols and services. EDM initiatives relate to the transformation of how people work through progressively sophisticated analytical
a special focus on MORTGAGE TECH
a special focus on MORTGAGE TECHNOLOGY
a special focus on MORTGAGE TECHNOLOG
Mortgages in the “E” Era: The Electronic Mortgage Welcome to the Era of the Digital Mortgage
echnology has transformed the lives of everyday Americans in recent years and, now more than ever, they require tools that simplify and streamline seemingly complex tasks such as applying for a mortgage. We live in a digital-based, online-focused world where most transactions and communication are conducted electronically. It only makes sense that mortgages also become an e-transaction from start to finish. The digital mortgage has been evolving for several years now, and the mortgage industry is very close to achieving a true, end-to-end, fully digital mortgage loan process. A true digital mortgage is a financial instrument that is originated electronically, sold into the secondary market electronically, and then serviced in a completely electronic fashion. The signatures are all electronic, the note is electronic, the notarization is electronic, and all of the key documents are recorded into the public record electronically, and ultimately stored electronically. If every aspect of the process is not electronically conducted, then the process is simply “paperless,” but that’s been around for more than a decade. Not only are brokers ready to go completely electronic, borrowers have also indicated that they feel the same way. A study, conducted by Accenture Research, of more than 1,500 borrowers, revealed that borrowers want to communicate with lenders in a variety of modes: On the Web site (via chat), on their smartphone or tablet, on their landline phone, via e-mail, in person, or a mix thereof. The idea of adopting an electronic process makes sense on so many levels, as there are multiple benefits to a
T
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
78
wholly digital process. l It will save time and money. Paper takes a lot of time, whether you’re buying it, stuffing it into printers, collating it into files, making corrections on the documents, storing them, or trying to find them once you
By Bill Packer
new industry regulations easier by eliminating the usual wait times for traditional mail. l Improves risk management and process efficiency. Transparency and accessibility of electronic data is crucial. By providing lenders with an efficient and paperless process, the
“While the mortgage industry has been somewhat slow to get to fully embrace this technology milestone, it is coming.”
do. Paper is also incredibly expensive, which is why so many companies are paperless l It greatly improves the “Borrower Experience.” By providing a more transparent, seamless and digitally enhanced consumer experience, the entire mortgage loan process becomes more satisfying for all parties. l Enables better management of compliance and timelines. It will make compliance with
resulting optimization of funding capabilities will improve execution and will allow lenders to do more work with fewer full-time employees. The e-Mortgage process is broken into four components; eApplication, e-Verification, the eNote and finally the e-Closing. E-Application Today’s borrower is interested in a seamless, transparent process for mortgage loan application.
The easier and more effective the application process, the more likely they are to apply. With an e-Application, the borrower can do everything needed to apply for mortgage from any place at any time, on nearly any type of device that has a browser and is internet connected. E-Verification Once an application has been submitted, a streamlined verification process will not only accelerate the entire mortgage process, it will eliminate needless interaction with unqualified applicants. With e-Verification, all validation and verification is done electronically and in real time. Appraisal and income verification and asset/collateral validation can all be done online and in near-immediate time. This makes the experience simpler and faster, easier for the borrower. It also severely reduces possibility of fraud because documentation comes directly from primary sources without passing through secondary hands. The E-Note and E-Mortgage/Deed-of-Trust and related security instruments Once a loan closes and the note is ready to be delivered, comes the advent of the eNote. It benefits by simplifying and streamlining the closing day, and delivering an immediate sign able closing document that results in nextday funding. It is also more profitable for the broker, as it cuts down on attorney fees and broker time. This is the area that also is creating the most barriers in the industry moving to a pure digital mortgage process. EMortgage, and in particular the e-notary, raises concerns of compliance or regulatory hurdles, especially among county clerk’s resistant to change, are a prime example of preferred process preventing progress. As a result, while most of the mortgage process has been paperless for years, an “eClosing” produces an “eMortgage” only if the promissory note is signed electronically, an “e-Note” And the Mortgage or Deed-of-Trust
LOGY
a special focus on MORTGAGE TECHNOLOGY
can be perfected (recorded) electronically. Apart from the legal and jurisdictional issues are the reluctance by some investors to accept these documents, even though the ESign ACT and related laws have been on the books for almost a decade.
this year. Within five years, all lenders will be originating true emortgages, end to end, and paper will be nowhere in sight.
Bill Packer is the chief information officer at American Financial Resources (AFR), an originator of FHA 203k loans and one of the nation’s leading independent mortgage originators. Packer is the driving force behind numerous B2B and B2C technology solutions that streamline and improve the way mortgage lenders communicate with their customers.
Why choose MBS Highway? BARRY HABIB— THE ORIGINATOR OF THE MARKET ADVISORY SERVICE Daily guidance and insights from Mortgage Market expert Barry Habib. He closed over $2 Billion in production as a Loan Originator, called the bottom of the Housing Market and currently provides sales and market training to thousands of Loan Originators across the country. STATE OF THE ART, USER FRIENDLY WEBSITE We've taken great pride in building a website that uses new technology, and enhances the user experience. No matter where you are on our site, you'll always have market data in sight. Never miss a lock alert with our real time market news and alert system.
EASILY SHAREABLE CONTENT With a touch of a button members are able to share charts showing the latest economic and housing data.
REAL ESTATE DATA & INSIDER CONTENT Show the housing opportunity in your local market to customers and real estate agents. We will provide you with affordability levels, appreciation, resale volume, new construction, and job growth…updated monthly and easily shared. There is also additional content from Art Cashin, Kiplinger letters, and much more.
MOBILE WEB APP Always stay in touch with the market when on the go with our Mobile Web App. It's fast and easy to use. Whether you have an iPhone, Android, Blackberry, Windows Phone, you'll always have access to MBS Highway. No downloads, no annoying updates, just visit m.mbshighway.com in your phone or tablet's browser. CALCULATORS AND TOOLS Powerful and unique calculators to help you when presenting to customers. Buy vs. Rent, ARM vs. Fixed, Paying Points, and Amortization calculator are a few examples. You can save and share the results to beat your competition.
What you're getting with your MBS Highway trial l Bond Quotes l Daily Video and Transcript l Interactive Charts l Lock/Float Advice l SMS Updates l Real Time Market News l Cashin's Corner l The Kiplinger Letters l Real Estate Market Data l By The Number$ l MBS TrendTRAKR l Social Share
Try it FREE for 14 days at MBSHighway.com/MNN
79
n National Mortgage Professional Magazine n JUNE 2017
E-now or E-later It is obvious that the era of the e-Mortgage is now here, but lenders won’t get to it by holding
e-mortgages and e-notes, there are enough reasons for any lender to want it, and so we expect to see more achieving it
NationalMortgageProfessional.com
E-Closing The final piece of the mortgage process, the closing, benefits perhaps the most from being conducted electronically. An e-Closing allows the closing of a mortgage loan electronically. This occurs through a secure electronic environment where all closing documents are executed and accessed online (also known as the “execution” phase of creating an electronic mortgage loan). The borrower can receive all documentation ahead of time to review, then e-Sign. It is convenient, and without the formal gathering at a lawyer or brokerage office, the closing becomes less of a hassle. Instead of having to make an appointment to appear in someone’s office to wet-sign a stack of mortgage documents in front of a notary and then wait around for the key documents to be couriered down to the Courthouse and entered into the public record, consumers can wake up; walk to their computer; connect to a notary, closing agent, loan officer, real estate agent and anyone else who needs to be in on the transaction; and digitally sign the required documents in an electronic closing room. Another benefit of e-Closings is a smaller ecological and carbon footprint, by eliminating the need to use paper, toner, couriers and overnight shipping. An individual mortgage generates on average about 6,000 pieces of paper across all stakeholders from start to finish. The paper and storage costs for title companies amounts to $20 to 30 million annually. Approximately 30 percent of the loan cost comes from closing and post-closing activities, which could be eliminated through an e-Closing.
on to outdated technology or using “bridging” technology. While the mortgage industry has been somewhat slow to get to fully embrace this technology milestone, it is coming. They must not be distracted by the lure of “paperless,” when the advantages come from the true digital mortgage. Although some roadblocks remain, particularly with regard to the acceptance of e-notarization,
a special focus on MORTGAGE TECH
a special focus on MORTGAGE TECHNOLOGY
Technology for Real Estate Tax Servicing By Tim Moreland roperty tax tracking has become one of the most complicated functions today’s mortgage loan servicers must master if they hope to remain profitable in a business where margins have never been thinner and the costs of compliance have never been higher. With thousands of overlapping taxing jurisdictions spread across the country, servicers are spending an inordinate amount of time tracking tax bills, ensuring that they are paid and settling with municipalities when they are not. Property tax assessment protocols and tax collection procedures are complex as they vary significantly by county, region and jurisdiction. Moreover, it is very important for lenders to stay up to date on the latest tax changes. A slight miscalculation can have a considerable financial impact. As mortgage servicers become submerged in managing all of this, they are diluting their core focus of helping customers and delivering superior customer service. Consequently, the rely on good technology to manage this task. Unfortunately, only specialized technology is capable of unraveling what has become a tangle of property tax liabilities, any one of which if unpaid can result in a property lien that assumes first lien position and that can result in the sale of the property. The task is even more complicated for commercial mortgagors and the servicers who control the servicing rights to their loans. These firms may have loans that finance multiple properties in numerous taxing jurisdictions. In this short article, we’ll leverage our company’s 100plus years of combined experience to explore some of the requirements for a platform that can reliably aid mortgage
P
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
80
loan servicers remain fully compliant with all property tax jurisdiction requirements. A list of requirements for a suitable tax platform Modern mortgage servicing technology does not currently include tax modules that can meet the needs of most residential mortgage servicers, to
a special focus on MORTGAGE TECHNOLOG
The platform must make it simple for users to board the correct tax line information along with each new loan that hits the servicer’s system. This requires the technology to include a database that includes all of the required tax authority data for every jurisdiction in which loans are serviced. For nationwide servicers, this requires frequent updates to the platform’s database, which the technology should make easy to accomplish. The technology should interface seamlessly with the servicing system so that servicing personnel will know well in
“Modern mortgage servicing technology does not currently include tax modules that can meet the needs of most residential mortgage servicers, to say nothing of commercial servicers, who face an even more daunting task.”
say nothing of commercial servicers, who face an even more daunting task. The technology that can get the job done today are proprietary systems that were specially designed for this process. Not all of these systems are built the same way nor do they all have the same functionality. A suitable technology will take into account the following, at a minimum.
advance of tax bill deadlines. Paying taxes sooner allows the servicer to avoid penalties and increases bottom line profits and customer satisfaction as escrow accounts won’t increase unnecessarily. The technology should allow the servicer to make the payments and update the servicing system easily. The platform should make it easy for a servicer to submit an inquiry to a taxing authority,
track that item and allow the firm’s personnel to follow up in a timely manner without losing track of the request for information. Communication between the servicer and municipalities happens often and the technology must make that as easy as possible. The software should be built on a Services Oriented Architecture (SOA) to make required changes faster and easier. This allows the servicer’s IT department—or more likely the servicers tax partner—to adjust the platform to meet the specific needs of the servicing firm. Finally, if the servicer partners with an outside firm to provide this platform, which is likely given its development and maintenance falls well outside the scope of the servicer’s core competence, it should be SSAE16 certified and subjected to regular audits performed by independent third parties. This may not be as expensive as it sounds. For example, our firm offers flexible pricing based on the client’s portfolio attributes. The problem with most commercial tax technology Even with all of these elements in place, most technology available and in use in the marketplace today does not do a good enough job of helping servicers manage property taxes for commercial real estate. The reason for this is that most software provides data down to the loan level, whereas servicing commercial loans requires software that can access data down to the property level. Unlike residential mortgage loans, where one or more taxing authorities will assess taxes against a single property, commercial loans can be written on many properties spread out across the country. Hotel chains, for instance, may take out large commercial mortgage loans on properties in many different states. This requires the servicer to track taxes in multiple jurisdictions and apply them to a single loan in their portfolio. Most real estate property tax tracking in use today cannot do this effectively. A platform that can must be developed
LOGY
a special focus on MORTGAGE TECHNOLOGY
from the ground up to view the data this way and commercial loan servicers are urged to seek out such software in order to make it easier to perform this function for loans in their portfolio. To give the reader an idea of the complexity of this part of the business, consider a benchmarking study performed by the Council on State Taxes (COST), a non-profit trade organization that represents nearly 600 multistate corporations engaged in interstate and international businesses. In an effort to determine the complexities of property tax compliance for large firms, the organization polled its members. In all, 32 COST members participated in the study, and reported paying property taxes in 38 states, with the smallest respondent having a filing responsibility in seven (though 45 percent said they filed in over 45 states). Together, these companies reported paying over $3.5 billion in property taxes annually, split roughly 50/50
between real and personal property tax. Perhaps most troubling, 28 percent of the study’s respondents said they processed over 10,000 property tax bills per year in order to remain in compliance. Servicing commercial mortgage loans taken out by these types of companies requires exactly the right kind of software. The ability to provide accurate reporting For most executives, the ultimate test of a technology platform can be found in the reports it generates. When it comes to property taxes, the right platform will deliver comprehensive real estate property tax reports as well as certificates with full supporting documentation. Tax vendors that have such technology will find it easy to offer general liability coverage for each parcel—both residential and commercial. Most management teams will require customized reports that meet their specific needs and
a special focus on MORTGAGE TECH
the platform should be capable of providing this. This allows the tax partner to provide reports tailored to the servicer, but also ensures that the most relevant information is delivered as quickly as possible, allowing executives to make better informed business decisions. The platform should also be capable of providing proof of payment directly from the municipality. This provides the evidence that payment has been made, permitting the servicer’s management team to make more informed and effective decisions when dealing with delinquent property tax issues. With a consistent reporting format, no matter where the servicer does business, there
should never be any confusion regarding who to pay, how to pay, when to pay, and how much to pay with respect to the borrower’s real estate property taxes. But when problems do occur and liens are placed on the property, the right technology should be capable of determining this quickly and reporting it back to the servicer quickly as well. This is just an overview of the requirements for a suitable technology platform for managing property taxes for residential and commercial real estate. For a more in-depth discussion, please reach out to us at any time through either our full time chat or call functionality.
Timothy Moreland is senior vice president of SLK Global Solutions, a firm that provides technology-based solutions for the real estate lending and settlement services industry. Tim can be reached by e-mail at Timothy.Moreland@SLKGroup.com. 81
NationalMortgageProfessional.com
WE ARE YOUR KEY TO MORTGAGE LOAN ORIGINAT ATOR R EDUCAT ATION NMLS APPROVED QUALIFYING AND CONTINUING EDUCAT ATION COURSES CHAMPIONS SCHOOL OF REAL ESTA TATE DELIVERY RY METHODS Classroom
Online
CALL 800-284-1525 AND GET STA TARTED TODAY AY! | Dallas | Fort Worth Austin | ChampionsLive! C Houston n | National | Online | San Antonio
www.Champions S ch c ool .com / Loan
Real E state
Designations
Lo an Origination
Home Inspec tion
Appraisal
Business Etiquet te
n National Mortgage Professional Magazine n JUNE 2017
ChampionsLive!
a special focus on MORTGAGE TECHNOLOGY
a special focus on MORTGAGE TECHNOLOG
Get–and Keep–More Business: Cut Your Closing Times By Josh Friend ears ago, mortgage loans could take months and months to close. Luckily, that’s generally no longer the case. Loan originators know all too well that if a loan takes too long to close, eventually the customer will walk away and go somewhere else. But there are things you can do to move a loan to closing more quickly. Even a little improvement can have a big impact. For every day that you reduce the time it takes to close a mortgage, you can increase your pull-through rate accordingly. For example, there are companies that have reduced their days to close by 10 percent, which have subsequently increased their pull-through rate by 10
Y
percent. By closing loans faster, you can also shorten your ratelock periods, which will save you money on extension costs and improve your bottom line. There are lots of ways to increase your application-toclosing ratios using today’s technology. But in figuring out how to reduce app-to-closing times, it helps to identify the different stages of a mortgage, what each step consists of and how it’s currently managed. There are a lot of time savings that can be made at each step along the way, which can add up to meaningful improvement at the end. Let’s look at each one. Begin at the beginning: Borrower contact The first step in reducing closing times begins immediately after a prospective
“Borrowers today want an easier, more transparent and faster transaction–they will walk away and find another lender if they don’t get it.”
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
82
UAMP Expo By Utah Association of Mortgage Professionals
Thursday, August 31, 2017 8:00 AM – 7:00 PM MDT
Salt Lake Marriott Downtown at City Creek 75 South West Temple I Salt Lake City, UT 84101 Join us for this opportunity to network with the area's top mortgage professionals. This 1 day event has consistently drawn over 600 attendees! For information call us at (904) 651-3143 or email us at valsaun@gmail.com
uampexpo.eventbrite.com
borrower contacts you. Responding to their call or click as quickly as possible can make or break the whole deal. Based on our internal data, the average customer expects a call within 30 minutes of an online inquiry, yet the average response time is more than 12 hours, or half a day. About a quarter of prospective customers will wait a full day before hearing back from the lender, while more than 40 percent never get a response. That’s clearly not acceptable. How quickly you respond to an inquiry, how often you follow up with the customer to complete an application, and what you use to manage this process are all questions you need to be asking. And technology has the answers to all of them. Step two: The application Once contact has been made, the next area where you can speed up the process is by having a great online loan application that allows the borrower to complete it easily. Speeding up the application and getting more verified information from the borrower upfront can greatly improve
closing times. It is an area where many lenders can improve. Most loan origination systems were not designed for a loan officer to take an application easily; they were built to process loans and do other back-office functions. But this can be fixed fairly easily by using a technology platform that enables you to build your own application and put the questions in the order the application is actually taken. With the right platform, applying for a loan becomes a relatively simple process for both the loan officer as well as the customer. The application should ask intelligent questions based on the information the borrower provides. It then captures only the information you need to collect. This allows for an easier process for the customer and the LO to follow, ensures it’s done completely and correctly each time, and helps speed the overall process. There are many technology vendors in the industry today that can help you build an online application that is both engaging and that can handle
LOGY
a special focus on MORTGAGE TECHNOLOGY
the more advanced parts of the application, such as product and pricing and verification of borrower data. A major issue many lenders face is incomplete loan applications, so having a system that can ask the correct questions when needed enables the LO to get a complete application, greatly expediting the process.
Final step: Processing and underwriting The final step in getting a loan to close is processing and underwriting. If you have been using the right technology, the rest of the process should go quickly and smoothly. The loan application will be complete, and all of the customer’s information will have been automatically obtained and verified, all without requiring any additional borrower interaction. A complete application that is structured
readily available, easy to use and cost effective. No longer is it just accessible to the biggest players with large technology budgets or the ability to build proprietary systems. There are now multiple technology providers in each area that can enable you to have the same advantages as your largest competitors. If you are looking to speed up your app-to-close times and close more loans, there’s no time like the present.
Josh Friend is founder and chief executive officer of InSellerate, a specialized customer relationship management system that enables lenders to instantly connect to leads, manage their sales team in real-time and build strong long-term customer relationships through automated marketing campaigns. Josh can be reached via e-mail at Josh@InSellerate.com. 83
n National Mortgage Professional Magazine n JUNE 2017
Step four: Disclosures Consider this … the average mortgage transaction requires at least four different disclosures that require 34 separate signatures and the borrower needs to provide 29 pages of documentation. That’s a lot of work for both the borrower and the lender. Surprisingly, it’s still a manual process for many lenders and takes too much time to complete. The solution is to automate the disclosure process. There are several technology providers that offer an online push-button system that sends out correct disclosures to the customer in real-time, which allows the LO to complete the application and get
Step five: Documentation Once you have all the signed disclosures, the lender can start gathering the borrower’s financial documents. This is yet another area where loans can get delayed. If the borrower doesn’t have last year’s W-2s or can’t find their tax returns, it can add days to the loan process. But there’s an easy solution: Online document gathering and asset verification can leave the borrower almost completely out of the process. That means there’s no time wasted waiting for the client to get their papers together. After logging into the secured system once, the borrower can grant the lender approval to instantly access their bank account, payroll and tax return information, saving the customer the hassle of getting that information themselves. The great news is that most vendors of these systems claim that they can obtain documentation for over 70 percent of consumers. Another benefit is that if any of this information needs to be updated, the lender can easily download the updated documents without ever involving the borrower.
correctly and has all the necessary documentation should fly through your operations department. Borrowers today want an easier, more transparent and faster transaction–they will walk away and find another lender if they don’t get it. The lenders that can provide a smooth and quick mortgage transaction will thrive in the years to come. The most exciting part about it is that the technology to do so is
NationalMortgageProfessional.com
Step three: Qualification and pricing Quite a few lenders struggle with the next step: Qualifying the customer and pricing the loan, which delays the process further. Eventually, the lender loses customers. The process of taking an application and then finding out which loans the borrower qualifies for can be very tedious—it takes a good deal of knowledge to do it correctly. Many lenders leave it up to the loan officer to do the research by reading underwriting guidelines and matrixes. Unfortunately, these are not always up-to-date or easy to understand. Some lenders have a pricing and qualification desk, but all too often they make errors and the loan is delayed as it gets restructured and worked on. Technology can make a big difference in how long this process takes and how accurate it is. Lenders using the most upto-date technology are able to do it instantaneously, while those sticking to a manual process often take up to three days to make the customer an offer. By that time, many customers will have walked away.
the loan into processing faster. This also expedites the appraisal process, as you can’t order an appraisal until the borrower has received their disclosures. There are many electronic disclosure systems lenders can choose from. When selecting one, consider how easy is it for the borrower to use, whether the loan officer can still walk the customer through the disclosure process online if necessary, and how easy it is to reset the borrower’s password.
a special focus on MORTGAGE TECH
a special focus on MORTGAGE TECHNOLOGY
a special focus on MORTGAGE TECHNOLOG
Financial Accounting Systems in the Age of Agility By Martin Kerr n an age of skyrocketing technological capabilities and ever-increasing software functionality enhancements, the mortgage banking industry is now in the age of agility, making it more vital than ever to have a financial system rooted in cutting edge technology that has been built on a solid foundation. While routine updates and improvements are crucial, the only way to guarantee the longevity of your financial system is to choose a responsive accounting system engineered to accommodate this industry and the company’s ever-increasing business demands.
I
How the financial software industry has changed Since the dawn of the personal computing age back in the late 1970s and early 1980s, company upon company have emerged to
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
84
market accounting software solutions. As time passed, these companies struggled to accommodate years of increasing technological innovations and maintain up-to-date solutions. Within the past decade, many of these companies have consolidated, and now only a small number of those original brand names remain in public memory. One of the largest factors in their consolidation was the cost of keeping up with the pace of change, and the rigidity of the code bases on which these solutions were built. Software companies were being forced to spend huge sums of capital for complete technological overhauls and renovations of their systems to accommodate new industry needs, user demands and ever evolving deployment strategies. In the mortgage banking industry, we know that trends
can change just as often as the weather and as such, a similar theme has played out amongst the industry’s software providers. Many smaller firms were consumed as they became vulnerable by the industry’s bigger, resource rich players. To stand a chance in today’s ever evolving marketplace, a solution must be built on a solid technical footing, have the backing of a balance sheet that can afford to the cost of constant evolution and be ready to embrace change, or it runs the risk of being left behind. Understanding the code base In the early days of software development, applications were built from the ground up by teams of highly skilled developers, who were responsible for designing every aspect of the solution and overcoming every challenge independently. Very few platforms existed in the general population of software tools that could provide a solid foundation, that could be molded to meet specific needs; the ones that did exist, were certainly not industry leaders. Today, there are a number of existing platforms and tools that can be extended to create industry specific software applications. These solutions provide a solid code base of functionality and allow software companies to build solutions with smaller teams on shorter timelines. Tools such as Intacct, Microsoft Dynamics, Netsuite and Peoplesoft and the like, are all names that dominate this landscape. Of the tools mentioned above, by far one of the most successful code bases for business software, and the one that our solution Loan Vision leverages, is Microsoft Dynamics NAV. An easily adaptable enterprise resource planning (ERP) solution, NAV has the functionality to help small and medium sized business automate and connect their sales, purchasing, operations, accounting and
inventory management functions. There are many reasons why software developers would choose to build applications on top of a code bases like Microsoft Dynamics NAV. Understanding these reasons will make it easier to make informed decisions about your next software purchase. The power that comes with the balance sheet One of the most compelling reasons that software developers will choose to build software on existing code bases has to do with the financial strength of the company that wrote the original code. The strength of the company will provide a great many benefits, but the financial—the balance sheet—is arguably the most significant benefit. In the case of Microsoft, we’re talking about a market capitalization of $500.74 billion, as of March 13, 2017. We know this is important because companies in the next tier down, big accounting software manufacturers worth $300-$400 million, have had to merge because separately they did not have the resources to keep their software packages viable. Software maintenance is incredibly time-consuming and expensive, which is why smaller companies struggle to put out updates on a regular basis. When they do provide updates, they are little more than fixes to existing code bases because they don’t have the resources to do more than that. The old phrase “putting lipstick on a pig” springs to mind. Lenders who are still working with smaller firms have to be cognizant of the fact that if there is not a bigger firm standing behind their vendor, if the vendor succumbs to the pressures inherent in the industry, the software buyer could be left with no support and a crumbling application. On the other hand, if your software is based on an existing code base that is maintained by a very large company with a vested interest in keeping that software up-todate and in use across a number of industries, it becomes much easier for software manufacturers that use
LOGY
a special focus on MORTGAGE TECHNOLOGY
that base to support industry verticals. To refer to our case in point in this article, Microsoft Dynamics NAV, a global solution from a global organization, is in use across every imaginable industry, but is being customized, deployed and supported by more agile companies who have created solutions to serve the very specific needs of businesses within those industry verticals.
In conclusion Enterprises like Microsoft are driving the technology curve as leading innovators, spending
billions of dollars in research and development on their products each year. Without leveraging a top technology provider, independent software vendors will likely struggle to afford the cost of change, and fall behind as the pace of technology evolution continues to increase. Regardless of how long an accounting software provider has been in the industry, producing a solution responsive to technological innovation is a must. Constructing a solution on a trusted name is the true foundation for designing such a product. Implementing one for your particular business will continue to be an efficient investment into the future.
Martin Kerr is co-founder and president of Bestborn Business Solutions, creator of the mortgage accounting solution, Loan Vision. Kerr has overseen the rapid growth of the organization into one of the fastest-growing accounting software vendors. He can be reached by email at Martin.Kerr@Bestborn.com. 85
NATIONAL REVERSE MORTGAGE LENDERS ASSOCIATION
Save the Date
NRMLA Annual Meeting & Expo
November 13-15, 2017 The Palace Hotel San Francisco, CA
Learn more at nrmlaonline.org
n National Mortgage Professional Magazine n JUNE 2017
Personalization and differentiation In a competitive industry such as mortgage banking, company differentiation makes all the difference. Individuality is key to setting businesses apart and the most successful lenders are always looking to get an edge over their competition. Helping provide lenders the edge can sometimes require system personalization. This is a real challenge for smaller software firms that restrict all of their customers to one code base. They very often don’t have the manpower to upgrade many different customized versions of their application and will likely steer customers away from making system personalizations. Failing that, they may simply provide the same “unique” functionality to every customer. If an accounting software firm is telling you, “This is the way it needs to be done,” or “Do that in Excel instead,” the solution isn’t competent enough to embrace your needs and doesn’t deserve the investment. However, developers that work with an existing code base maintained by a much larger firm don’t worry about upgrading the basic
functionality made available by the software. That’s handled for them by huge teams of professional software engineers working for a firm that must keep its software relevant and useful in a changing world. This frees up development partners to be agile, making the changes customers require without the fear of multiplying their work in the future. Even with a smaller team, these software developers can keep up with customer demands and deliver a more agile product.
NationalMortgageProfessional.com
The power that comes with a strong base Building a financial solution like Loan Vision, on a platform like Microsoft Dynamics NAV means that the foundation for a modern, routinely updated system is already there. This allows the vertical solution provider to focus all of their attention on industry-specific coding and updates on top of an already stable, trusted base. To use an analogy, they can spend their time putting the snow on the mountaintop and not trying to create the mountain itself. In reality, imagine a team of 1,000 people continuously enhancing the foundation of your product, attentive to every error, adjustment, and constantly increasing efficiency of the system and all your trusted industry partner needs to do is focus on your and your peers’ industry needs. The largest software provider in the world, Microsoft, is continuously testing its systems for performance, efficiency, and load-handling by thousands of experienced team members responsible for extensively managing every detail. These teams routinely test the compatibility of the coding of the software to the database, in NAV’s case SQL, as well as the other components of the platform. Without utilizing a firmly established base solution, accounting software companies simply do not possess the time or money to build and maintain a solution from scratch, flexible enough to handle constant industry change. Solution providers working with Microsoft have continuous access to the company’s technology specialists, business managers, advisory councils, and security teams. Changes in regulation are abundant and can create gaps within the
accounting processes. The global Microsoft team is equipped with experts that build system improvements and adjustments to bridge these gaps while in turn continuously checking the system’s compliance to the requirements laid out by regulatory bodies. Solutions capable of handling such changes should be undergoing monthly cumulative updates and periodic major releases. In just four years, the Microsoft Dynamics NAV solution has undergone three major version releases, which have all included major functionality and performance enhancements. While a company may advertise or create buzz around a new edition of its software, it’s important to see the difference between a software “face lift” and a truly improved product. Without an intelligent and responsive base, these accounting solutions are no more than the same product inside a different colored wrapper.
a special focus on MORTGAGE TECH
a special focus on MORTGAGE TECHNOLOGY
a special focus on MORTGAGE TECHNOLOG
Blockchain: Mortgage and Settlement Industry Stands on the Edge of Tomorrow By Derrick Jones
ou’ve probably heard the term “blockchain” mentioned in the past year or so. You may know that it’s related to (actually, at the foundation of) bitcoin technology. And you’ve probably heard, to some degree, that blockchain technology could be a “game changer” throughout the mortgage industry. But unless you’re a student of the topic, you may be wondering why we’re not hearing more about this. Most agree that the introduction of blockchain technology would, indeed, bring a change more dramatic than any we’ve seen in the mortgage industry for decades. However, concerns about potential security flaws (ironic, since one of the potential benefits of the technology would be the inability to alter or tamper with its data) and the fact that blockchain, as it is today, cannot facilitate massive amounts of transactions faster have derailed the possibility of it impacting the industry soon. Thus, the same things that make blockchain so appealing—its decentralized nature and the trust garnered by the difficulty of altering blockchain data—are also what are holding it back from being used for new purposes. But that doesn’t mean blockchain can’t or won’t make its mark on the mortgage world eventually. Setting aside the premise that blockchain applications may not be imminent for our industry just yet, let’s have a look at what this “white whale” might mean for the mortgage and settlement services industry, and how it could revolutionize the way we do business down the road.
Y
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
86
How it works Mortgage Finance Gazette, in an article posted May 1, 2017, defined blockchain technology as follows: “Blockchain is a new computing architecture that was initially created to power the cryptocurrency application
Bitcoin. The architecture is both a network and a database, optimized for real-time, global synchronization of transactions and related data. Much like the Internet, blockchain technology can be used to build many different applications utilizing its underlying secure, flexible, and auditable transaction and ‘settlement’ infrastructure, not just to power virtual currency.” Mike Sorohan of MBA NewsLink describe the process in this way in his article, “Mortgage Industry Eyes ‘Blockchain’ Technology,” from MBA NewsLink, Feb. 2, 2017: “How does blockchain work? It starts when someone requests a transaction. The request is broadcast to a P2P network, consisting of computers. The network validates the transaction and the user’s status using known algorithms (the verified transaction can involve cryptocurrency such as Bitcoin, contracts, records or other information. “Once verified, the transaction is combined with other transactions to create a new block of data for the ledger. The new block is then added to the existing blockchain in a way that is permanent and unalterable, completing the transaction.” In the same article, Sorohan quoted BlockGeek to describe the unique value of the technology: “The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value,” wrote Don and Alex Tapscott in their book Blockchain Revolution. “And BlockGeek says by allowing digital information to be distributed but not copied, “blockchain technology created the backbone of a new type of Internet. Originally devised for the digital currency, Bitcoin, the tech community is now finding other potential uses for the technology.” The potential uses for blockchain, once it has evolved to
“It seems likely that those service providers which are already outsourcing or relying on trusted partners or technology will have a leg up when block chain engulfs the settlement side of the transaction.” a point at which it can facilitate large numbers of transactions securely, are powerful … How would it improve the industry? At the heart of the blockchain value proposition is the accuracy and security of the data entered into the system. This from a PwC white paper, “What Might Blockchain Mean for the Mortgage Industry?” from June 2016: “Blockchain technology may radically alter the process through which consumers buy a home, as well as the way financial institutions handle mortgages. Specifically, the technology could remove cost and friction from the process, create transaction records that are infallible and incorruptible, and facilitate near instantaneous settlement. It could also dramatically change the way mortgages are serviced and sold on the secondary market. “At origination, blockchain might help establish more accurate record-keeping. At fulfillment, it could provide immutable proof that loan estimates were sent within three
business days. Smart contracts would speed up settlement flows. In the mortgage servicing process, blockchain could track the movement of payments. And in the secondary markets, it might provide transparency about the ownership of underlying assets. We think blockchain could be relevant at every stage. “In the secondary market, smart contracts could help the securitization process. They could streamline how master services agreements, investor contracts, and pooling and service agreements inform these securities, too. And when mortgage-backed securities are created more efficiently, or when MSRs are traded more quickly, this adds liquidity back into the market. That’s good for everyone.” In terms of practical applications, we could see any number of practical benefits from a blockchain solution upgraded for security: l Reduced counterparty risks because transactions are settled near instantly. l Better transparency and more
LOGY
a special focus on MORTGAGE TECHNOLOGY
trustworthy documentation, leading to improved compliance through better reporting and monitoring. l Dramatic acceleration of the settlement process, allowing transactions to complete in minutes or perhaps even seconds. l Significant reduction in the need for and speed of error handling and reconciliation due to real time tracking.
of the transaction. It has been shown again and again that most providers using proprietary solutions or “do it yourself” methods are the latest adopters and the last to adapt when industry disruptions occur. In short, the potential of blockchain technology is enormous. Even if we disregard the clear benefits it could bring to securitization and origination, its likely impact on one of the
a special focus on MORTGAGE TECH
most convoluted stages of the transaction (the settlement) cannot be ignored. Although the technology is not yet there to implement to our system, it will be eventually. The benefit to the consumer and the originator alike
will likely steamroll any objections based upon anything other than data security. Thus, it may be time for all participants in the mortgage process to consider where this evolution will take them, and how to adapt.
Derrick Jones is vice president at SLK Global Solutions America Inc., which provides technology based solutions for the real estate lending and settlement services industry. He can be reached by e-mail at Derrick.Jones@SLKGroup.com.
Let’s have a better look at the final two benefits, especially. Most would agree that, today, one of the most dramatic bottlenecks to the mortgage process—especially from a consumer standpoint—is the segment of the transaction that transpires between the conclusion of the sales agreement between buyer and seller, and the closing. It’s during that time that two distinctive processes take center stage: The lender’s underwriting approval and the settlement process— comprised primarily of appraisal and title insurance (but including other functions as well). 87
NationalMortgageProfessional.com
n National Mortgage Professional Magazine n JUNE 2017
In many ways, underwriting remains an internal process for lenders. But settlement services are much different—a fine mosaic (or chaotic cacophony) of multiple firms using multiple technologies to come to one result. There’s obviously a great deal of rekeying, ineffective communication and problem solving (usually “work arounds” for disparate systems) that seem inherent to the process. In all likelihood, blockchain could eliminate that. The average time to close today is in the mid40s (days). Imagine how much faster the transaction could be where most of the inefficiencies in production and auditing could be eliminated! Similarly, a good deal of the settlement process involves record keeping, documentation and quality control. With a trustworthy single source of the relevant data, provided by blockchain systems, even more time, inefficiency and inaccuracy could be stripped from the process. It seems likely that those service providers which are already outsourcing or relying on trusted partners or technology will have a leg up when block chain engulfs the settlement side
a special focus on MORTGAGE TECHNOLOGY
How Millennials Are Shaping the Homebuying Process By Desirée Patno oday’s Millennials, between the ages of 18 and 34, are the largest generation in the United States, and they are coming into the age of homeownership. Even more, they are taking the housing market by storm, accounting for a large portion of current homebuyers. Zillow reports that half of all homebuyers are under the age of 36, based on a survey of 13,000 respondents, and firsttime buyers comprise 47 percent of home purchases. Moreover, a majority of prospective homebuyers are planning to buy their first homes. A survey by Realtor.com indicates that 52 percent of prospective buyers in 2017 are first-timers, an increase from 33 percent last year. As they continue to drive the housing market, Millennials are influencing the increased utilization of technology in the homebuying process. Millennials experience and communicate with the world through their devices and are inundated with information every day. This ever-growing supply of data is a common starting point for looking into the possibility of homeownership. This is not surprising as the Internet has become pervasive, and to some extent instrumental, in our daily lives, especially when it comes to purchases. Customers want, and expect, the option to interact with businesses, and review their products and services, online. A survey from Microsoft reveals that 50 percent of consumers prefer interacting with businesses digitally versus in person. Before purchasing a product, 50 percent of adults under 50 years old “routinely check online reviews” according to a study by the Pew Research Center. Just as young consumers depend on technology in everyday
T
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
88
purchases, they seek a similar fast and efficient process when finding and financing their first home. Searching for homes The 2015 National Association of Realtors (NAR) Profile of Home Buyers and Sellers shows that 94 percent of Millennials use online websites in their home searches,
a special focus on MORTGAGE TECHNOLOG
l Thirteen percent start on their smartphones; and l Eleven percent look at newspaper listings. Millennials are more likely to be in the group that reaches for their smartphones first. Data from NAR reveals that more than 50 percent use their phones; moreover, 26 percent of Millennials end up buying homes that they found this way. These online searches are not one-and-done either; prospective homebuyers conduct relatively thorough
“Millennials experience and communicate with the world through their devices and are inundated with information every day. This ever-growing supply of data is a common starting point for looking into the possibility of homeownership.”
compared to 84 percent of Baby Boomers and 65 percent of the Silent Generation, ages 69- to 89-years-old. The devices that future homebuyers are using vary, but a majority are using their computers or laptops. A recent national survey by Chase notes that: l Forty-five percent begin their search on a computer;
research from the resources available to them. A 2012 survey by Google and Complete New Home Shopper shows that consumers “perform an average of 11 searches prior to taking action on a real estate site.” The Internet is becoming an important tool for future homebuyers that allows them to be involved in the home searching process, and not merely rely on their real estate
agents to do the hard work for them. Millennials want to be engaged in the process and they want valid information made available to them when they want it, and the housing market must continue to meet this demand through technology. The benefit of this change, David Leighton, FSN real estate investment journalist, explains, is that “the apps and online space are there to make the process run smoother than ever.” Social media joins the ranks of desktop Web sites and mobile apps as prospective homebuyers’ go-to sources. One can use social media for buying tips from peers and family members; receiving information on neighborhoods; and viewing agents’ Facebook pages. Financial Safety Net reports that 75 percent of buyers used social media in the homebuying process in 2014, which is expected to reach 90 percent or more in upcoming years. Home financing process Prospective homebuyers are using online technology to also help them in the home financing process. It has been helpful in communicating with lenders and sharing important financial documents. In a poll commissioned by Discover Home Loans, nine out of 10 of survey respondents used some form of technology in the home financing process. Of these, 81 percent said technology allowed them to easily share financial information with their lender, and 69 percent noted that it helped them keep track of these important documents. In addition, more than half of respondents had filled out their mortgage applications online. Although some might be wary of sharing sensitive documents electronically, 86 percent of homebuyers felt comfortable sharing information with their lenders this way. The benefits of submitting their financial documents electronically outweighed the potential risks. Respondents reported the following benefits: l Ninety-two percent said it saved time; l Eighty-three percent said it
LOGY
a special focus on MORTGAGE TECHNOLOGY
helped them stay organized; and l Sixty-eight percent said it cut down on paperwork. While most respondents spoke to their lenders over the phone, at 94 percent, those who used electronic communications, 88 percent via e-mail, found it easier to work with their lenders. In fact, 36 percent said that being able to complete the entire financing process online, without phone calls or in-person meetings, would make it easier for them. Overall, homebuyers believe that technology could help the home financing process in a number of ways, including: l Secure ways to submit documents, at 77 percent; l Easy-to-use online applications, at 72 percent; and l Twenty-four-hour support, at 52 percent. Trust in real estate agents While technology has benefits for Millennials searching for and
financing their first homes, they still count on real estate agents to guide them along the way. Most Millennials prefer to communicate with their agents the old-fashioned way, over the phone and in-person, according to Zillow. Also, they trust that their agent has in-depth knowledge that they cannot easily find through their search engine. At the same time, real estate agents are expected to mirror the benefits of the internet. An article by Inman on how agents can cater to Millennials explains that agents need to be experts, educators, and connectors for their clients. They should also be able to fulfill these roles whenever their clients need it. In practice, this means being able to answer any question first-time buyers have; be a one-stop resource center of lenders, inspectors, contractors, and more; and meet Millennials’ informational needs in an efficient and transparent manner. Of course, this is nothing that experienced agents cannot handle.
a special focus on MORTGAGE TECH
Millennials are proving an influential force in the housing market, and are driving the use of technology in the homebuying process. The benefits of this change are numerous, but the need for inperson communication and help from professionals in the industry will not disappear just yet. The personal relationships built between prospective
homebuyers and their lenders and agents is an invaluable part of the journey of buying one’s first, or even third, home. Technology faces difficulty in creating these connections: Inperson communication allows us to truly know and understand others, by being able to observe their body language, facial expressions and emotions, all of which are missed in electronic communication.
Desirée Patno is president and CEO of the National Association of Women in Real Estate Businesses (NAWRB). With more than 25 years in real estate and championing gender equality, Patno brings insider knowledge to NAWRB’s mission of advocating on behalf of women and women-owned and small businesses in the housing ecosystem. She may be reached by phone at (949) 559-9800 or e-mail Info@NAWRB.com. 89
NationalMortgageProfessional.com
n National Mortgage Professional Magazine n JUNE 2017
a special focus on MORTGAGE TECHNOLOGY
a special focus on MORTGAGE TECHNOLOG
Navigating the Blockchain Landscape: Which Systems Work Best for Document Management? By Jason Nadeau nterested in tapping into the mortgage documentmanagement benefits that blockchain technology offers, including advanced security and data integrity? Then I’m guessing you may be looking for a solution that allows you to work most effectively with documents on the blockchain. There is often confusion around the capabilities of blockchain technology, but there are many different ways to approach blockchain utilization depending on your ultimate goals. Since there are so many methods by which data is secured through blockchain technology and each blockchain has its own way of structuring data, figuring out all of the possible use cases for these types of solutions is inherently tricky. Yet to avoid pounding in nails with a screwdriver, so to speak, it’s important to understand the lay of the land in the blockchain universe. Before you can figure out the right document management system for your company, it’s important to first be able to distinguish between the types of blockchain and the best use for each one. Some blockchain solutions focus on currency rather than document management, for example. Understandably, currencyfocused blockchain platforms are not the best ones to use for document management functions and vice-versa. There’s a lot to consider when figuring out which blockchain systems do work best for document management, so let’s get started.
I
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
90
Bitcoin transaction-based Blockchain “Bitcoin” is the first term that comes to many people’s minds when they think of blockchain. I work with many customers in the mortgage industry and they often start out with plans to work with the Bitcoin Network in an attempt to solve their mortgagerelated document management challenges. Yet just because
Bitcoin transaction-based blockchain is the type that you hear the most about and it’s the simplest one to understand doesn’t mean it’s right to solve every type of problem. Bitcoin is currency focused and relates to how data that is tied to the Bitcoin blockchain is secured through transactions. So while you technically can make it work for document management, it’s not really designed to do so. In the broadest sense, this blockchain solution consists of using the Bitcoin transaction— defined as when Bitcoins move from one address to another—to store data. It is possible to add a little metadata to a transaction within Bitcoin. But while each Bitcoin transaction has the ability to store 80 bytes of extra data in the OP_RETURN part of the transaction (a script opcode that indicates invalid transaction outputs), using this functionality for data storage is controversial. Since Bitcoin was not intended to provide a record for random data, many in the Bitcoin community feel that using it for this purpose is unethical. It’s more expensive and less efficient to use this type of data storage via the Bitcoin transaction-based blockchain, but nevertheless, users, systems, and applications can use these 80 bytes to store a variety of constructs: l The data itself, if it is less than 80 bytes l A “fingerprint” of the data if the data is more than 80 bytes l A reference to a transaction made elsewhere (think of this as a receipt) l Many other things, for better or for worse There are additional ways in which this method can store data in transactions, including the fact that applications can leverage this functionality to secure themselves with tiny anchors that are published within transactions and secured in “blocks.” But all of these methods run up against certain built-in limits in the Bitcoin blockchain—around
seven transactions per second, and ten minutes to “cement” a transaction. In addition, the cost associated with storing the data is based on the current price of Bitcoin, which can fluctuate. These limitations related to volume, velocity, latency, stability, longevity, and the everchanging cost of the cryptocurrency of that blockchain may or may not be factors for you as an end user—as they say, YMMV (your mileage, or experience, may vary). But these are certainly points you should consider before assuming that the Bitcoin Network is a panacea for all of your data management and storage problems. Dynamic movement systems Another interesting new evolution in data integrity and security is the dynamic movement and distribution of data. The anonymous nature of the data in transaction-based storage can actually be used as a feature. For example, companies like CryptoMove are using the blockchain to constantly shuffle encrypted versions of a user’s data through the blockchain, making it that much harder for hostile parties to gain data intelligence. In essence, hackers would have to chase data as it dynamically moves around to unknown locations. This technique is called “active defense,” and it will have an impressive impact on how institutions secure sensitive information. However, it’s still not ultimately designed to facilitate document management on the blockchain. Off-chain systems In off-chain systems, the actual transactions happen away from the Bitcoin blockchain. At the simplest level, you can think of this as initiating a “master transaction” in the Bitcoin blockchain, and then conducting all subsequent transactions somewhere else, such as exchanges, proprietary systems, etc. The security profiles in these
“somewhere elses” can vary— from exchanges where you have to trust that the right thing will happen, to systems like the Lightning Network, in which there are assurances in the protocol to prevent theft. The Lightning Network is one of many applications that has sprung up to answer some of the innate scalability issues of Bitcoin. It works by creating relationships between two parties that conduct frequent business. These relationships are called channels and allow the two parties to defer broadcasting their history to the network. As with theme-based systems, performance can be excellent and costs low. Keep in mind, however, that like Bitcoin transaction-based blockchain, most of the practical systems in this space tend to be focused around financial transactions, not document management. Theme-based Blockchain As we move into commercial applications of blockchain and the need to chain together like information, organizations across diverse industries need other solutions that are better suited to document management. It no longer makes sense to randomly secure data anchors, and then later have to dig through a sea of transactions to find them. The cost and speed prohibit scalability, and the instability is too risky for critical infrastructure. This is where theme-based blockchain comes in. With Bitcoin transaction-based blockchain systems, the stored data is completely unstructured. This means it is up to the users, systems, or applications to know where the data is stored, how it is structured, etc. In contrast, theme-based systems like the Factom Network provide a baseline structure to the data. This open-source project leverages the Bitcoin blockchain in a way that minimizes how much data is actually inserted in the blockchain. The result is that it becomes possible to structure applications and documents using a container-like structure that takes advantage of what is known as “theme tracking,”
LOGY
a special focus on MORTGAGE TECHNOLOGY
party reviews, litigation, and due diligence. So when it comes to document management, while the other types of blockchain
solutions have their strengths in different areas, theme-based blockchain emerges as the clear winner.
Jason Nadeau is executive vice president at Factom Inc., leading the strategy for the mortgage industry, including revenue growth, strategic partnerships and business development strategy. Nadeau comes to Factom from Corsair Associates. Before Corsair Associates, he served as group president at Stewart Title and CEO of Stewart Lender Services. Nadeau also served as founder, president, and CTO of RealEC Technologies (now a Black Knight company).
91
n National Mortgage Professional Magazine n JUNE 2017
All Blockchains are not created equal While you may have started reading this article thinking “blockchain is blockchain is blockchain,” I hope you can see now that all blockchains are not created equal, and that it’s critical to differentiate among these various systems depending on your company’s needs and goals. While Bitcoin transaction-based blockchain was built as a solution designed to track and manage cryptocurrency, a theme-based blockchain is designed with a focus on preserving documents and data. To take the mortgage industry as an example, theme-based blockchain technology is currently being leveraged in combination with digital signature technology to create a solution where all documents involved in a mortgage can incorporate the benefits of esignatures and electronic vaulting—without needing
eMortgage or eClosing technology. By creating a digital footprint for each document, lenders gain a secure way to store loan files, creating, in essence, a unique “blockchain vault” for loan documentation—a permanent record and index of the final files. This leads to a dramatically improved approach regarding performance and efficiency while significantly reducing costs for audits, third-
NationalMortgageProfessional.com
allowing you to link like a transaction on a chain, and in effect package together the data you care about while discarding the rest. These are blockchains in which users can create distinct individual chains associated with, frankly, anything. For example, every Internet of Things (IoT) device in the world could have its own chain, and each piece of data generated by that device could be stored as a distinct entry in its chain. This allows applications to pay attention only to the data that they care about (my temperature sensor), and ignore all the other data (every other temperature sensor). The advantage of a themebased blockchain system is that it allows for the improved workflow and optimization of file sharing and transfer. Performance in this theme-based world can offer significant improvement over transactionbased systems—typically to the tune of hundreds of transactions per second, sub-second latencies, and minimal costs. Anchoring can be used to provide even more assurance. For example, every 10 minutes, the state of all the data in the Factom blockchains is anchored into the Bitcoin blockchain. (This is one way that transactionbased storage can be useful!)
a special focus on MORTGAGE TECH
NMP Mortgage Professiona Gary Malis Chief Strategy & Capital Markets Officer Paramount Residential Mortgage Group, Inc. (PRMG) BY PHIL HALL
ary Malis is chief strategy and capital markets officer at Paramount Residential Mortgage Group Inc. (PRMG), headquartered in Ontario, Calif. National Mortgage Professional Magazine recently spoke with him regarding his career as a mortgage professional and how PRMG remains at the forefront of the industry.
G
How did you first get involved with mortgage banking? Was this your original career path? Definitely not! I finished graduate school in 1993 at the University of Arizona in Tucson and planned to go back to Chicago, where I grew up. But a friend of mine who I went to graduate school with said his brother-in-law had started in mortgage banking, and the gentleman he was working for was looking for people with MBA’s to run the organization. He had bought a mortgage broker and was turning it into a mortgage banking company. It seemed interesting, the other MBA from the University of Texas he had hired was incredibly bright. We had an immediate connection and since I was already in Tucson, I said, “What the heck?” The company was Mitchell Financial—it is no longer in existence—and while I was
there, we had to learn everything about the mortgage process immediately and mostly on our own. As a result, I learned a lot faster than if I went up a more traditional path in a more formal fashion. How did you first become associated with PRMG? Through a mutual business associate who was good friends with both PRMG partners and myself. I only took clients on a referral basis during my consulting career, as I always felt that was the best testament to my work product and impact. A business colleague very familiar with PRMG knew they were trying to grow their business and felt they could use someone as an advisor. At the time, I had my own consulting business and I met Paul Rozo, PRMG CEO, in Ontario, Calif. We had a two-
day interview and audit, and I was hired as a part-time consultant moving forward on a monthly retainer. That lasted almost five years going into last year, where I was asked if I would consider moving out of the consulting role and take on a full-time role as a partner. I became a full-time partner on March 1 and took the two wonderful people from my consulting firm with me to help round out the executive team. In your opinion, what makes PRMG stand out from the competition? Every company thinks they stand out, and after 25 years in the business I’ve learned there are a lot of good companies. What I like about PRMG is that CEO Paul Rozo and COO Robert Holliday came up through the ranks, as originators and chose to become owners. They
understand the entrepreneurial spirit and how to give proper support to everyone on their team and establish the proper balance of support, guidance, freedom and control. They have established long-standing business partnerships that go far beyond price and product and the usual demands of a good partner. Most importantly, they find the right balance between proper expense management with aggressive infrastructure investment to ensure long-term success in any environment or market. PRMG has a vision for growth—but is not locked into an IPO vision or some unreasonable profit target or volume drive. Instead, it about creating a healthy and successful environment that helps people grow and advance their career path. There is opportunity for everyone at different income and educational levels and more than
onal of the Month
93
just income, there is opportunity for education or being involved in a philanthropic endeavor. How do you see the current state of the mortgage banking market? It is a complicated market. In my opinion, the biggest challenge comes down to determining how much of the business is technology-driven versus relationship-driven. A lot of people are still oldfashioned at heart—and would prefer to use pencil and paper to make their way through the world, while others say we must take advantage of technology and will not succeed in any way without it. As a result, the market is fragmented: Repeat buyers, first-time buyers, Baby Boomers, and Millennials, and each has a different affinity and comfort level for their tech
“What I like about PRMG is that CEO Paul Rozo and COO Robert Holliday came up through the ranks, as originators and chose to become owners. They understand the entrepreneurial spirit and how to give proper support to everyone on their team and establish the proper balance of support, guidance, freedom and control.”
needs. The question is, what’s the best way to reach them and how to intelligently manage your technological changes and your vendors to help facilitate. Additionally, housing affordability is a big issue in terms of continuing appreciation, with little wage pressure and how to handle homeownership in an intelligent and responsible way to foster growth and the ability for people to handle their housing obligation. How has PRMG been able to keep on top of the many
regulatory changes that have taken place in recent years? I imagine the same way that most companies have. You deal with regulatory change by having competent inside counsel—not just a good attorney, but someone who understands the mortgage space and the spirit of the regulations. You also maintain outside counsel who has a good relationship with the CFPB and people in Washington, D.C. and works with other banking clients to ensure you don’t live in a vacuum. You also need to have a good relationship with your lobbyists, at the local and
national level to be sure you both have input and receive the most current hot buttons. It is also important to have a tech partner who understands compliance and is able to make sure your systems are manageable and will allow you to implement what you have on paper into an action plan that is both efficient and effective. At PRMG, we have informal calls with a few companies that we don’t truly compete with. We use these calls to talk things through [about compliance and regulatory issues] and affirm continued on page 96
Empower Your Employees ost company leaders say they want an organization filled with great decisionmakers; however, the reality is that the majority of employees are not empowered to make decisions. Instead, the company policy and/or culture make decision making a multi-layer process that requires forms, documentation and numerous signatures. As a result, few decisions get made, and those decisions that do get made are typically slow to transpire. Realize, though, that when you empower your employees to make decisions on the spot, not only do decisions get made quicker, but you also improve overall organizational productivity and customer satisfaction. That, in turn, leads to a more positive work environment and increased revenue. So why aren’t more employees empowered to make decisions? Often, the company executives don’t trust lower level employees to make decisions. Other times
M
managers are afraid to empower employees to make decisions. They think, “What if the employee makes a wrong decision? What will that do to our bottom line?” Or even worse, “What if the employee makes a really good decision? What will happen to my job then?” In reality, once you trust employees, empower them, and train them to be in alignment with the company’s values and mission, they rarely make a wrong decision. Additionally, when employees are empowered to make decisions, managers can then focus on longterm goals and strategic planning rather than day-to-day operations. Use the following guidelines to foster a culture of empowerment in your organization. 1. Establish decision making parameters for various levels of employees Even though you want a company of empowered decision makers, not all employees should have equal authority for every single decision. For example, you may establish that front line employees can make a decision up to a
certain dollar amount, say $500, and any decision that would exceed that amount needs to go to a manager. Then the manager may have authority to make a decision up to $2,000, and anything more than that needs to go to an executive team member. Such a structure empowers people, because they know their boundaries and what guidelines to follow when the decision is too big for them to handle. Now there’s no guessing or confusion about whether they are allowed to make a certain decision. When people know what they can and cannot do, they feel freer in their decision making capabilities. 2. Conduct weekly training sessions with your employees Your employees can’t be empowered if they’re not properly trained on all aspects of the business. Therefore, have weekly training sessions with front line employees and managers to allow for role playing and discussion. During these sessions review such things as the company’s goals, mission, vision, and culture. Role
play possible decision making scenarios so employees get a sense of what may transpire and how their decisions impact the company. Be sure not to berate or embarrass anyone for making a bad decision during these role play exercises. Remember, this is a time for learning. Also realize that just because the decision the employee made isn’t the one you would make doesn’t make the decision wrong. Often, more than one solution exists for a problem. 3. Teach your employees the lifetime value of a customer A big part of the training involves educating your employees on the lifetime value of a customer. That is, explain to them that part of their decision making process should involve looking at how much business that customer has given or could give the company in the future. For example, if a customer is unhappy because something didn’t ship on time, and the employee learns that it will cost the company $100 to overnight the product to the customer, the employee needs to determine if
s to Make Smart Decisions By Anne Houlihan
that $100 shipping fee is warranted. If it’s a big customer who gives the company thousands of dollars of business each year, then the $100 shipping fee is definitely warranted to keep the customer happy. For other scenarios, the $100 shipping fee may not be warranted, especially if you know this is a one-time sale of an inexpensive item. The key is for employees to give this factor thought as they decide what to do. 4. Acknowledge the special skills and talents your employees possess Everyone has special skills and talents that they bring to the table. Know what those are for each member of your team. For example, one company wanted to do a mailer to customers, so they assembled their employees together to brainstorm ideas. As they talked, they learned that their customer service manager liked to draw. They let him run with an idea he had and sketch out a flyer. The company agreed that his flyer was creative, and they sent it out to their customers. Turns out it was
one of the best mailers the company ever did, bringing in lots of new business. The point is that when you allow your employees to use their strengths and creativity, they will often amaze you. The key is uncovering what those strengths are. Therefore, make it a point to meet with employees as people, and not as employees, from time to time. Use those informal gettogethers as a time to find out more about them. By doing so, you’re empowering your people to take an interest in the company and feel more confident with their decisions. And confidence is essential to making good decisions. 5. Consistently express appreciation and give rewards to people The greatest human desire is the need to feel appreciated. When people feel truly appreciated, they are eager to take on responsibilities and they want the company to succeed. Therefore, make it a habit to thank people, even for small milestones. The thank you could be a simple handwritten note or a big
party for a job well done. Also, recognize special events, such as birthdays and anniversaries, and give rewards when appropriate. Some companies give monthly or quarterly bonuses based on company performance, while others give time off or tangible gifts. Find out what types of appreciation and rewards will motivate your staff, and dole them out freely. This shows employees that you value them, which will make them eager to go the extra mile and make smart decision. Decide on a more profitable future The more decisions your employees make, the more productive everyone will be. As the leader, you’ll have more time
to work on the business rather than in it, and your managers will be able to focus on their long-term initiatives rather than the day-to-day minutia. Additionally, empowered employees demonstrate a stronger work ethic, and they hold themselves accountable. They treat the company as if it were their own, and they make smart decisions that advance the company’s goals and mission. But perhaps the biggest benefit of having empowered employees is the loyalty they’ll show the company. When they feel respected and valued, they’ll be eager team members, dedicated to making a positive difference on the company’s bottom line.
Anne Houlihan is president of Satori Seal and founder of Golden Key Leadership. Anne combines more than 25 years of hands-on corporate experience and coaching to help companies improve management techniques, empower employees to be decision-makers, bridge the generational gap and overcome adversity. She may be reached by phone at (951) 235-5405 or e-mail Anne@ElevatedLeadership.com.
nmp mortgage professional
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
96
continued from page 93
that we fall on the right side of the issues. As more laws are implemented, people have slightly different interpretations of what they mean. Sometimes it is hard to say if we are being too conservative and losing business opportunities. We need to read deeper than the headlines and truly study [enforcement] cases to see specifically what infractions the CFPB and others have sighted. By digging deeper, it is a bit easier to know if we are taking the right stance, but we always believe it starts with trying to follow the spirit of the regulation.
a healthy respect for all disciplines in this industry and that comes from trying to learn enough about each one to know their complexities and demands. It is a constant goal that I continue to chase after 25 years. For my accomplishments, I would say that I have actually been able to work in almost every facet of the business and I am familiar with all the different silos and how they relate to each other and that makes me an effective leader that can make quick decisions realizing the many possible impacts it can have to any part of the company.
In your opinion, what can the industry do to encourage young people to pursue careers in mortgage banking? We have to bring in young people early on in detailed training/teaching sessions and show them how wonderfully complex this business can be. At our company, we bring young people into a room and show them the entire loan process—from production, to functional and strategic operations, finance, legal and technology—pointing out that they can achieve a future at various executive levels if they want to learn the full business. This is a career opportunity, not just a job and we have an obligation to show the many exciting career paths that are available and the overall importance of this industry to the overall economy and the value it brings to so many.
Outside of work, how do you spend your leisure time? I can’t say that I have a lot of leisure time given my work demands. However, long ago, I had a mentor who told me that if I all did was work, I would eventually regret my time in the office. So, I decided to pursue a basketball coaching life outside of work. I’ve been a head coach at the high school level, reaching States multiple times, leading an AAU team to multiple state championships and Final Four National Championship, given private training to kids who went on to play professional basketball and am executive director of the Lute Olson Basketball Academy. Additionally, my wife runs the private client division of a travel company, and she’s pushed me out of my comfort zone when it comes to travel. I’ve been fortunate to travel the world with her and my children. We’ve been to the Amazon, South Africa, Fiji, Japan, Marrakesh, India and other wonderful places. Lastly, I truly do believe that if you find the right company and work with great people, work is much more than just work, it becomes a team and family, with a bit of fun, and can actually prove to be quality leisure time as a bonus.
Looking back on your work in the industry, what do you see as your greatest challenges and your greatest accomplishments? The greatest challenge was trying to learn to the entire mortgage ecosystem. I have a constant desire to learn new things, keep up with all the changes and how they interrelate to each other. I have
Phil Hall is managing editor of National Mortgage Professional Magazine. He may be reached by e-mail at PhilH@MortgageNewsNetwork.com.
dodd-frank reform act
current regulatory burden facing credit unions, and look forward to working with the Senate to enact meaningful relief for our members.” “Today’s House vote is an important step toward making much-needed regulatory reforms that will allow banks to better serve their customers and communities,” said Rob Nichols, president and CEO of the American Bankers Association (ABA). “We applaud Chairman Hensarling and members of the House Financial Services Committee for their continuing efforts to fix financial rules that are holding back the U.S. economy, and doing little to enhance safety and soundness. We look forward to working with lawmakers in the House and Senate as this process moves forward.” “We applaud the House of Representatives for passing the Financial CHOICE Act, and we appreciate Chairman Hensarling’s leadership on this issue,” said Jim Nussle, president and CEO of the Credit Union National Association (CUNA). “This bill represents a big win for credit unions and their members. And, as the debate moves to the Senate, we will continue to play offense to ensure Congress enacts commonsense legislation that improves the operating environment for credit unions to more fully serve their members.”
Unhappy Democrats The House vote was strictly a partisan split, with only one Republican in opposition. Not surprisingly, Democrats were immediately angry with the results of the vote. Sen. Elizabeth Warren (DMA) Tweeted, “I’m going to fight my heart out to protect Wall Street reform & the @CFPB. I urge the Senate: Enough with the Wall Street handouts.” California Rep. Maxine Waters, the ranking member of the House Financial Services Committee, called the legislation the “Wrong Choice Act” since it was introduced and continued that moniker after the vote. “We have come
continued from page 59
so far since the financial crisis–but the Republicans’ #WrongChoiceAct threatens to put Americans at risk once again,” Tweeted Rep. Waters. Sen. Sherrod Brown (DOH), the ranking member of the Senate Banking Committee, took to Twitter to complain the bill “is a massive giveaway to megabanks and payday lenders. It would undo the progress we’ve made.” Last month, Sen. Brown claimed the bill would “help a rogue’s gallery of special interests.” Rep. Keith Ellison (D-MI) Tweeted that the bill “lets scammers skim from your wallet, bank account and retirement plan.” And outside of Washington, New York State Comptroller Tom DiNapoli weighed in on Twitter, calling the bill “a bad choice” and adding, “It risks pushing American families to shady financial lenders and schemes.”
The next step?
After the House vote, the bill will now go to the Senate. But the fate of the bill is not clear. In an interview last month with Bloomberg News, Senate Majority Leader Mitch McConnell played down the chances that any changes to the Dodd-Frank Act would gain bipartisan support in that chamber. “I’d love to do something about Dodd-Frank, particularly with regard to community banks, but that would require Democratic involvement,” said Sen. McConnell. “I’m not optimistic.” Sen. McConnell added that he discussed potential changes to the 2010 legislation with Sen. Mike Crapo (R-ID), the chairman of the Senate Banking Committee, who stated that Democrats were not interested in doing any legislative rewrites. “So far, my impression is the Democrats on the banking committee believe that DoddFrank is something akin to the Ten Commandments,” Sen. McConnell added.
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE PRESENTS
Your Complete Success Resource for Mortgage Professional Top Performance
Need More Purchase Business? FREE 45 Minute Complimentary PURCHASE GROWTH Strategic Coaching Session with nmpU Head Coach Ron Vaimberg Go to nmpUCoaching.com TODAY to request your free session
Strategic Success Coaching • Loan Officers • Account Executives • Managers/Owners
97
On-Site Success Workshops
Wholesale/Correspondent AE "Win Series"
NMLS Courses POWERED BY
• Pre-Licensing • Test Prep • Continuing Education
Call Ron Vaimberg, nmpU Executive Director & Head Coach, at 888-979-NMPU (6678), Ext. 801 or E-mail RonV@MortgageNewsNetwork.com for more information on how nmpU can increase Originator, AE and Manager Performance!
Learn more at nmpUcampus.com
n National Mortgage Professional Magazine n JUNE 2017
• Win More Business From Existing Clients • Win More New Relationships • Win More Business With The Ultimate AE Presentation
NationalMortgageProfessional.com
• For MLO's Low Cost / No Cost Lead Generation Strategies • Cover More Leads To Loans • 100% Referral Based Business
partner integrations, providing lenders with a flexible solution that can best serve its organizational needs. “The Mortgage Collaborative’s network brings together lenders and select vendors for the purpose of sharing resources, industry knowledge and expertise,” said Tim Nguyen, president of LendingQB. “We decided to partner with The Mortgage Collaborative because of the values and leadership the organization brings to the industry. Our partnership with The Mortgage Collaborative underscores the commitment we have to delivering meaningful and practical solutions that improve the mortgage lending experience for lenders and their customers. We look forward to building a deep and meaningful relationship with The Mortgage Collaborative and their members.” Mortgage Professionals to Watch
WILSON EADS FARRUGGIO JAMES
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
LEE
98
l Following a first quarter in which Angel Oak Mortgage Solutions added 12 new account executives, the
continued from page 56
company is continuing its aggressive growth by becoming licensed in Rhode Island, launching a Correspondent Channel and adding five new AEs to help brokers grow their business. Lisa Lee joined Angel Oak in Salt Lake City; along with Mike Wilson in San Diego; Stacy Eads in Birmingham, Ala.; Chris Farruggio in Phoenix, Ariz.; and Tricia James in Orange County, Calif.
l
l
HOOPER
heard on the street
l James Hooper has been named national strategic sales manager at Paramount Residential Mortgage Group (PRMG), with the responsibility of helping grow market share through PRMG’s various channels. Hooper will lead a team of managers and sales staff to increase market share, and will aid PRMG in their continual expansion within the non-delegated correspondent channel. l Castle & Cooke Mortgage has opened its first Missouri branch in St. Louis, to be led by industry veteran and St. Louis native Jeff Mikel, who has 26 years of experience in the mortgage industry. Castle & Cooke has also announced the opening of its Danielson, Conn. branch. The new location expands the company’s footprint in the state and will complement the company’s sister branch in Columbia, and be led by industry veteran Todd A. Cooke who has 15 years of experience in mortgage lending and real estate brokerage. l HomeBridge Financial Services has announced that Julie Gill has joined its growing office in Shrewsbury, N.J. Gill’s 30-year career in mortgage lending encompasses a diverse range of professional roles, including time spent as a loan processor, underwriter, and a private client banker. l Supreme Lending has expanded its Southwest territory with an additional
l
l
l
l
l
branch in the Denver market, to be led by industry veteran Carlos Ruiz who has been selected to manage the branch. Supreme Lending has also expanded its Midwest territory with a new branch in Kansas City, to be led by industry veteran Scott Somerville. Parkside Lending has announced its expansion into New York with the addition of Rich Bloom as North Eastern regional manager, and Katie Plezia and Elizabeth Squillante Nichols as senior account executives. LBA Ware has announced the hiring of Finn Klemann as director of business development. In this role, Klemann will bring his more than 20 years of business development and sales experience in forging new relationships for LBA Ware in the financial services industry, with a specific focus on targeting growth in the mortgage industry. RE/MAX Holdings Inc. has announced the appointment of Chief Operating Officer Adam Contos to the role of RE/MAX co-chief executive officer, sharing responsibilities with CoFounder and current Co-CEO Dave Liniger. FormFree has announced that it has hired mortgage loan quality subject matter expert and analyst Ann Fulmer as its chief strategy and industry relations officer. Envoy Mortgage’s Correspondent Lending Division has announced the hiring of three new regional account managers, including Nicolle Nelson (Arizona, New Mexico, Colorado and Utah ), Steve Williams (California and Nevada), and Joe Collins (Texas and Oklahoma). Embrace Home Loans has expanded its presence in Washington, D.C., adding a new branch to accommodate and connect with new buyers, to be led by Mortgage Professional and Branch Manager Margie Hennessey. WFG National Title Insurance has added Susan Silverstein as senior vice president for its agency group, where she will focus on the Florida region. In her new position, Silverstein will work to further grow WFG’s
l
l
l
l
l
base of independent title agents and support the underwriter’s existing agency relationships. Docutech has named Amy Brandt as its new president and chief operating officer where she will be responsible for leading all aspects of daily operations, including sales, customer support, marketing and product development. Norcom Mortgage has added Pete Mendenhall as vice president of Reverse Lending. GSF Mortgage Corp. has added Loan Officer Scott Melaragno to its Columbus, Ohio office. GSF Mortgage has also named LeMar Welch as branch manager of the company’s new Madison, Wis. office. A native of Gary, Indiana, Welch is a graduate of Concordia University in Milwaukee, and has been in the mortgage business since he was 19-years-old. GSF has also announced the addition of two new loan originators in its Akron, Ohio branch, James Terrill and Noelle Morovich, who will both be working under Branch Manager Tim Krichbaum. Accurate Group has announced the expansion of its sales team with two new additions as Matthew Lichtner, a mortgage and settlement services industry veteran joining the company as senior vice president, national accounts manager; and Richard L. Heltzel III, who will be moving from his current position as director of ValueNet, a division of Accurate Group, to join the sales team as VP, national accounts manager. The Mortgage Collaborative has announced the hiring of LaNette Holley as director of Strategic Initiatives.
Your turn National Mortgage Professional Magazine invites its readers to submit any information, events, passages, promotions, personal or professional occurrences that seem appropriate and/or other pertinent data to the attention of: Heard on the Street/Mortgage Professionals to Watch column Phone #: (516) 409-5555 E-mail: Newsroom@MortgageNewsNetwork.com
Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.
learning management system
audits and demonstrates employee compliance to auditors through a simple report. It also allows companies to track and report their employees’ education and training results to ensure they are meeting the minimum standards established by the compliance and/or training department. Even for a small financial institution, it can be extremely challenging to track the assignment and successful completion of all employeerequired training. An LMS is valuable for the ease of basic reporting capabilities, allowing training administrators to track successful completion of required training and other tasks. There is significant peace of mind that comes with knowing all employee training and education has been accounted for and that a report can easily be obtained for auditors, examiners and management.
management the ability to track the number of attempts it takes each employee to complete an assessment and access to evaluation scores. Knowing which training questions are most often incorrectly answered by team members enables managers to provide targeted learning opportunities to remediate areas of weakness that otherwise may go undetected.
Final takeaways Today’s environment is full of heavy regulation, geographically diverse workforces and rapidly evolving risks. In order to address these challenges head on,
employing a strong and capable LMS and maintaining strong documentation of training and compliance initiatives empowers financial institution management to focus on leading the organization.
Jeff Kelly is vice president of Governance, Risk and Compliance for OnCourse Learning Financial Services, a provider of governance, risk and compliance training for the bank, mortgage, credit union, gaming and non-bank financial services industries. Kelly has more than 10 years of experience in the banking sector.
99
NationalMortgageProfessional.com
n National Mortgage Professional Magazine n JUNE 2017
Identifying potential weaknesses Identifying compliance weaknesses and areas where employees may need improvement is another benefit. The LMS can be programmed to gather information about which staff members have completed required courses, training sessions and certifications. This helps ensure employees are adequately prepared to do their jobs, staff is appropriately trained for required duties and the goals of management are clearly defined and implemented. A Jan. 14 online Economist article, “Equipping People to Stay Ahead of Change” eloquently states the need for on-the-job learning: “Working lives are so lengthy and so fast-changing that simply cramming more schooling in at the start is not enough. People must also be able to acquire new skills throughout their careers.” The Economist article offers this statistic: Routine office jobs in the U.S. declined from 25.5 percent to 21 percent between 1996 and 2015. Ensuring employees have the skills required to effectively do the job is key to customer satisfaction and risk mitigation too. An LMS provides
continued from page 51
outstanding
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.
PRMG
United Wholesale Mortgage
1-855-PRMG-FAN! (855-7764-326) www.PRMG.net
800-981-8898 www.uwm.com/careers
Built by originators for originators, PRMG was born from a vision of creating a company with a unique culture focused on the successes of the producer. We understand what it takes to be a successful originator and cultivate new business every day.
Voted the #1 place to work in Metro Detroit, UWM is looking for A players to join our talented team. Our business is driven by our culture, and our people are our greatest asset. If you’re looking for the opportunity of a lifetime, apply to UWM today!
Attention Recruiters, Business Development Managers and HR Professionals national mortgage professional’s
outstanding places to work
We are pleased to announce a new package that will give your firm the recruiting tools to instantly shift your recruiting efforts into high gear using a multimedia, market-saturating approach. We will utilize the most successful methods that our clients have been using to find, identify and place top talents for your company. We have designed these packages with the concept of making it less expensive to give you the ability to reach more people. NATIONAL MORTGAGE PROFESSIONAL MAGAZINE 1220 Wantagh Avenue • Wantagh, New York 11793-2202 516-409-5555 • Fax: 516-409-4600 • E-mail: advertise@MortgageNewsNetwork.com
NationalMortgageProfessional.com
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE’S
calendar of events
JULY 2017 Monday-Tuesday, July 10-11 Ultimate Mortgage Expo Hotel Monteleone 214 Royal Street New Orleans For more information, call (860) 922-3441 or visit UltimateMortgageExpo.com.
Thursday, August 31 UAMP Expo 2017 Salt Lake Marriott Downtown at City Creek 75 South West Temple Salt Lake City For more information, call (904) 651-3143 or e-mail valsaun@gmail.com.
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.
SEPTEMBER 2017 Wednesday, September 6 Texas Mortgage Roundup–Dallas DoubleTree by Hilton Dallas Near the Galleria 4099 Valley View Lane Dallas For more information, call (860) 922-3441 or visit TXMortgageRoundup.com.
Thursday-Friday, August 24-25 LMLA 2017 Education Conference New Orleans Hilton Riverside Hotel 2 Poydras Street New Orleans For more information, call (225) 590-5722 or visit LMLA.com.
Friday, September 22 2017 NW Mortgage Expo & Real Estate Summit MOTIF Seattle Hotel 1415 5th Avenue Seattle For more information, call (206) 484-6442 or visit MyWAMP.org. OCTOBER 2017 Monday-Thursday, October 9-12 Northeast Conference of Mortgage Brokers & Professionals 2017 Harrah’s Resort & Convention Center 777 Harrah’s Boulevard Atlantic City, N.J. For more information, call (732) 596-7642 or visit MBANJ.com.
NOVEMBER 2017 Monday-Wednesday, November 13-15 2017 NRMLA Annual Meeting & Expo The Palace Hotel 2 New Montgomery Street San Francisco, Calif. For more information, call (202) 939-1783 or visit NRMLAOnline.org. DECEMBER 2017
Tuesday, December 5 2017 California Holiday Networking Party The Atrium Hotel 18700 Macarthur Boulevard Irvine, Calif. For more information, call (516) 409-5555.
To submit your entry for inclusion in the National Mortgage Professional Calendar of Events, please e-mail the details of your event, along with contact information, to newsroom@mortgagenewsnetwork.com. *Looking for additional exposure at key industry events? Call 516.409.5555, ext. 4 to discover how to maximize your event coverage.
101
n National Mortgage Professional Magazine n JUNE 2017
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.
Tuesday, September 19 Colorado Mortgage Summit Denver Marriott Tech Center 4900 South Syracuse Street Denver For more information, call (860) 719-1991 or visit COMortgageSummit.com.
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.
NationalMortgageProfessional.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-Monday, October 13-16 NAMB National 2017 Rio Las Vegas 3700 West Flamingo Road Las Vegas For more information, visit NAMB.org.
APPRAISAL MANAGEMENT COMPANY
BONDS & LICENSING
COMPLIANCE CONSULTANTS
CLASS APPRAISAL A Nationwide Appraisal Management Company
#1 RATED AMC BY NATION’S TOP LENDERS FOR PERFORMANCE
& CLIENT SATISFACTION Contact Us: nmp@classappraisal.com (866) 333-8311
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!
www.classappraisal.com
APPRAISAL MANAGEMENT COMPANY
CHURCH FINANCING
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
102
JUNE 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
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
HARD MONEY/PRIVATE LENDING
Direct Private Money and Bridge Lender specializing in Stated Loans in CA 866-668-2663 Send Scenarios to info@CalHardMoney.com
WHOLESALE/CORRESPONDENT LENDERS
WHOLESALE LENDERS
Greenbox Loans, Inc 3250 Wilshire Blvd., Suite 1900 Los Angeles, CA, 90010 (800) 600-9198 www.greenboxloans.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%
Greenbox Loans, Inc. is a proven leader in the Non-QM & Non-Prime lending environment offering bank statement programs, foreign national lending solutions, along with programs allowing for recent short sale, foreclosure, bankruptcy for borrowers as low as 500 Fico Score. Greenbox Loans, Inc. is a national lender offering its programs through a multiple of channels including Retail, Wholesale, and Investor Specialty division.
MARKETING
WHOLESALE LENDERS
103
TagQuest www.tagquest.com 888-717-8980
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
n National Mortgage Professional Magazine n JUNE 2017
PRIVATE FINANCING
HomeBridge Wholesale iis a national wholesale lender offeering Conventional, G J b and dR i Loans. L W are comm mitted to providing Government, Jumbo, Renovation We ng, unique product the highest value to our clients through competitive pricin offerings, superior customer service, and state-of-the-art technology.
NationalMortgageProfessional.com
TagQuest is a full service marketing firm created specifically for the ever changing mortgage business. We have tested and proven campaigns for FHA -VA - HARP - CONVENTIONAL loan types. TagQuest knows what it takes to generate quality leads whether through direct mail marketing, telemarketing, internet leads, data lists, tracking systems, or any combination thereof. TagQuest will brand your company, prepare targeted marketing campaigns that generate interest in your company, and most importantly, show you how to turn sales leads into repeat customers.
5 Park Plaza, 10th Floor Irvine, CA 92614 www..HomeBridgeWholesale.com m
JUNE 2017 n National Mortgage Professional Magazine n NationalMortgageProfessional.com
104
WE Vis â&#x20AC;&#x2122;RE G it J oin RO Ang WI N elO ak. G! co m
Looking g for more?
En njoy more loans, fo for more people with non-QM M opportunities. B Benefit from the fastest growing segment in the mortgage industry by vvisiting www.AngelOakMS.com or calling 855-539-4910.
Get MORE with Angel Oak Mortgage Solutions.
Š Angel Oak Mortgage Solutions LLC NMLS #1160240, Corporate office, 980 Hammond Drive, Suite 850, Atlanta, GA, 30328. This communication is sent only by Angel Oak Mortgage Solutions LLC and is not intended to imply that any of our loan products will be offered by or in conjunction with HUD, FHA, VA, the U.S. government or any federal , state or local governmental body. This is a business-to-business communication n and is intended for licensed mortgage professionals only and is not intended to be distributed to the consumer or the general public. Angel Oak Mortgage Solutions LLC is an Equal Opportunity Employer and does d not discriminate against individuals on the basis of race, gender, color, religion, national origin, age, disability, veteran status or other classifications protected by law. 1-11-17 HPG.