National Mortgage Professional Magazine June 2019 by ambizmedia

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01$ 21 451451/+31(/1+ 7)13+17/37)14/3+1(/14/37)7531)(371-+,"1(')77.7/31*/ 7)1$4//75+3(1 (801$ 21$455+*)41 +. (/ 1 7'453)(34+/1 01 / 53(371+ ,721$455+*)41 754 7/34(-1$+)3'('71 +(/1#)+"7)1 4,7/571 01 1 SW Noel, #108, Lees Summit, MO 64063. NV: Mortgage Broker License 4068 (Residential Mortgage Lending). NJ: Licensed by the N.J. Department of Banking and Insurance. NY: Licensed Mortgage Bankerâ&#x20AC;&#x201D;NYS Department of Financial Services. New York Mortgage Banker License B500980/107664. RI: Rhode Island Licensed Lender, Lender License 20112809LL. VA: NMLS ID 2600 (www.nmlsconsumeraccess.org). WA: Consumer Loan License CL-2600. Also licensed in AL, AK, AR, CO, CT, DE, DC, FL, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MI, MS, MT, NE, NH, NM, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VT, WV, WI and WY. All rights reserved.

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The

th i w eck

table of

N A T I O N A L

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The Beckwith Blog: Accelerating: How Sales Pros Get an Edge By Christine Beckwith

J U N E

Appraisal Management Companies

GUIDE

36 National Mortgage Professional Magazine’s AMC Guide 2019

2 0 1 9

M O R T G

V O L U M

A SPECIAL FOCUS ON “THE STATE OF APPRAISALS AND VALUATIONS”

Streamlining the Appraisal Process for an Enhanced Borrower Experience By Samir Agarwal ..........................................60

C t

Disagreeing With the Appraiser: Tips for Staying Compliant While Making Your Case By Adam Johnston, SRA, AI-RRS ............64

What Technology Cannot Capture By Danielle Chavez....................66

T a

There’s More Than One Type of Value in Appraising By Clint Reinhardt ..............................................................................68

Best Practices for Modernizing Appraisal Management and Empowering Borrowers By Paul Doman ..................................70

H L

The Three T’s of a Strong Appraisal Process By Dennis Creegan ..72

T A

What to Consider When Rebutting an Appraisal By Rick Garrie ....74

46 NMP’s Legends of Lending: Calyx Software By Phil Hall

FEATURES ARMCP Set to Launch New Site ........................................................6 Are You Fully Prepared for Peak Buying Season? By Tom Hutchens ................................................................................8

The Elite Performer: Delegate Responsibly By Andy W. Harris, CRMS ....................................................................8

Recruiting, Training and Mentoring Corner: The Appraisal Opportunity By Dave Hershman ........................................................10

Purchase Pipeline Fuel Part 1: First-Time Homebuyers By K. Justin Restaino..........................................................................16

52 NMP Mortgage Professional of the Month: NAMB President Richard Bettencourt, CRMS, National VA Sales Leader & Branch Manager, Mortgage Network Inc. By Phil Hall

MBA’s Mortgage Action Alliance: A Message From MAA Chairman Jeffrey C. Taylor ..............................................................18

V I S I T Company

Web Site

O U R

A D Page

ACC Mortgage .................................................. weapproveloans.com ....................................................27 Angel Oak Mortgage Solutions ............................ angeloakms.com ..............................................Back Cover ARMCO.............................................................. armco.us ......................................................................48 Brokers Compliance Group.................................. brokerscompliancegroup.com ..........................................88 CAMP .................................................................. thecampsite.org ..............................................................67 Capital One ........................................................capitalone/financialinstitutions ............................................7 Carrington Mortgage Services, LLC ...................... carringtonally.com ..................................................1 & 62 Citadel Servicing Corporation .............................. citadelservicing.com ......................................................17 Concord Church Finance .................................... concordchurchfinance.com ............................................54

58 MBA’s 2019 Secondary Market Conference Survey Scorecard: A Report of Findings By Tom LaMalfa

DocMagic .......................................................... docmagic.com ................................................................9 FAMP .............................................................. ourfamp.org ..................................................................73 First National Bank of America............................ fnba.com/mortgagebrokers ..............................................5 Genworth Mortgage Insurance Corporation .......... pages.genworth.com/you ................................................11 Greenbox Loans, Inc........................................... greenboxloans.com ................................Inside Front Cover IMPAC Mortgage Corp......................................... impaccorrespondent.com ..............................................63 Locke Law US, LLC ............................................ lockelaw.us ..................................................................48 Lykken On Lending ............................................ lykkenonlending.com ....................................................77

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

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NAMB Perspective ............................................................................20 The Four Biggest Flaws in Mortgage Sales and How to Fix Them By Ken Bartz ......................................................................................24

Connecting Mortgage Pros With HUD-Approved Counselors to Get Clients â&#x20AC;&#x153;Mortgage Readyâ&#x20AC;? By Pam Marron ..........................26 The Mortgage Godfather: Staying Focused By Ralph LoVuolo Sr. ..28 Transition From LIBOR to SOFR By Gavin T. Ales ..........................32 Technology Lends a Helping Hand By Gregg Lehman and Kim Weaver ................................................................................50 BrokerNATION: Phoenix Mortgage Brokers/Nick Heth By Andy W. Harris, CRMS ..................................................................56 How Community Lenders Can Recruit the Best Mortgage Loan Officers By Tracy Marks ..........................................................80

We are once again looking for the Most Connected Mortgage Professionals. These are individuals who have a large number of followers on Twitter or likes on Facebook or maybe have a very popular blog or video show. These individuals will be featured in our July 2019 edition, which has a special focus on Social Media.

Transparency Illuminates the Path Towards Customer Acquisition By Frans van Hulle ..........................................................82 Is Good Pricing, Good Programs and Good Service Enough? By Brian Sacks ..................................................................................86

COLUMNS New to Market ..................................................................................12 News Flash: June 2019......................................................................14 Heard on the Street ..........................................................................30 NMP Calendar of Events ..................................................................85

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

Web Site

Page

MBS Highway .................................................... mbshighway.com/MNN ..................................................31 Mortgage News Network (MNN) .......................... mortgagenewsnetwork.com ....................................78 & 79 NAMB+ ............................................................ nambplus.com ..............................................................19 NAPMW ............................................................ napmw.org ............................................................29 & 76 NAWRB ............................................................ nawrb.com ....................................................................15 NRMLA.............................................................. nrmlaonline.org ............................................................57 Origination Pro.................................................. originationpro.com ........................................................65 Paramount Residential Mortgage Group, Inc. ...... prmg.net ................................................Inside Back Cover PB Financial Group Corp. .................................. calhardmoney.com ........................................................57 RCN Capital ...................................................... rcncapital.com ..............................................................54 Redstone Print & Mail Inc. ................................ redstoneprintmail.com ..................................................69 REMN................................................................ remnwholesale.com ......................................................13 Residential Home Funding Corp. ........................ rhfbranch.com ..............................................................33 Ridgewood ........................................................ ridgewoodbank.com ......................................................75 TCF Financial Corporation .................................. tcfbank.com/brokerloans/compensation ..................55 & 77 United Wholesale Mortgage ................................ uwm.com ................................................................44-45

Go to http://nmpmag.com/mostconnected

JUNE 2019 Volume 11 • Number 6

FROM THE

publisher’s desk

Putting a value on the collateral Because we spend the vast majority of our time dealing with mortgage borrowers, we don’t spend 1220 Wantagh Avenue • Wantagh, NY 11793-2202 much time thinking about the other half of the mortgage loan underwriting equation … the collateral. Phone: (516) 409-5555 • Fax: (516) 409-4600 Many lenders have outsourced that entire process to appraisal management companies (AMCs) and Web site: NationalMortgageProfessional.com we don’t know of any banks still using on-staff appraisers to provide collateral reports. STAFF Eric C. Peck Joel M. Berman With so much of the process outsourced, it’s easy to ignore. Editor-in-Chief Publisher - CEO (516) 409-5555, ext. 312 (516) 409-5555, ext. 310 But with so much innovation going on today in the collateral valuation space, that would be a ericp@mortgagenewsnetwork.com joel@mortgagenewsnetwork.com mistake. So, in this month’s issue we’ll focus on “The State of Appraisals and Valuations,” and Joey Arendt Beverly Bolnick bring you stories from the companies making it happen, as well as those making it better. Art Director VP-Sales & Marketing (516) 409-5555, ext. 323 (516) 409-5555, ext. 316 Because lenders aren’t completing their own appraisal reports, much of what we’re bringing joeya@mortgagenewsnetwork.com beverlyb@mortgagenewsnetwork.com you is strategic. How should you be thinking about this process? Scott Koondel Phil Hall VP of Operations Managing Editor Start with “Streamlining the Appraisal Process for an Enhanced Borrower Experience” by Samir (516) 409-5555, ext. 324 (516) 409-5555, ext. 312 Agarwal, vice president of the community bank and credit union segment in the Compliance scottk@mortgagenewsnetwork.com philh@mortgagenewsnetwork.com Solutions Business Unit at Wolters Kluwer. This is important because we can forget how much of Richard Zyta Francine Miller Social Media Ambassador Advertising Coordinator an impact this process has on our borrowers. (516) 409-5555 (516) 409-5555, ext. 301 richardz@mortgagenewsnetwork.com francinem@mortgagenewsnetwork.com Continue your research into creating a better process by reading “The Three T’s of a Strong Rick Grant Dylan Pollock Appraisal Process” by Dennis Creegan, director of mortgage banking finance for Waterstone Special Reports Editor Administrative Assistant Bank, manager of the Appraisal Department for Waterstone Mortgage Corporation, and then take (570) 497-1026 (direct) (516) 409-5555, ext. 314 (516) 409-555, ext. 311 dylanp@mortgagenewsnetwork.com a look at “Best Practices for Modernizing Appraisal Management and Empowering Borrowers” by rickg@mortgagenewsnetwork.com Paul Doman, president and CEO of Accurate Group. ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact Because technology is such an important part of this process—as it is for most of the work we VP-Sales & Marketing Beverly Bolnick at (516) 409-5555, ext. 316 or e-mail beverlyb@mortgagedo in the mortgage lending shop—we offer you, “What Technology Cannot Capture” by Danielle newsnetwork.com. Chavez, staff review appraiser with Mortgage Works LLC, the in-house appraisal management ARTICLE SUBMISSIONS/PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck company for Mountain West Financial Inc. at (516) 409-5555, ext. 312 or e-mail ericp@mortgagenewsnetwork.com. The deadline for submissions We want to offer you some tactical information relevant to this process, so check out “What to is the first of the month prior to the target issue. Consider When Rebutting an Appraisal” by Rick Garrie, chief valuations officer with United States SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail orders@mortgageAppraisals, and “Disagreeing With the Appraiser: Tips for Staying Compliant While Making Your newsnetwork.com or visit www.nationalmortgageprofessional.com. Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600. Case” by Adam Johnston, SRA, AI-RRS, director, operations and chief appraiser for Genworth Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the Financial’s U.S. mortgage insurance business. authors alone and do not imply the opinion or endorsement of Mortgage News Network Inc., or the offiOf course, the partners you choose to work with will have a huge impact on your process, so 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) don’t miss “There’s More Than One Type of Value in Appraising” by Clint Reinhardt, senior vice and/or other state mortgage trade associations. Participation in NAMB, NAPMW, NCRA, ARMCP and/or other state mortgage trade associations president and national sales and marketing manager for Valuation Partners. events, activities and/or publications is available on a non-discriminatory basis and does not reflect the And for even more guidance on choosing the right partner for your institution, we offer you in endorsement of the product and/or services by Mortgage News Network Inc., NAMB, NAPMW, NCRA, and other state mortgage trade associations. this issue, “National Mortgage Professional Magazine’s AMC Guide 2019.” This listing of the National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, ARMCP and/or other state industry’s top appraisal management companies will give you the information you need to start mortgage trade associations do not make any misrepresentations or warranties concerning the regulatory and/or compliance aspects of advertisers, products or services and/or the editorial content conthose important conversations. tained in Mortgage News Network Inc. publications. National Mortgage Professional Magazine and Mortgage News Network Inc. reserve the right to edit, reject and/or postpone the publication of any artiWe also bring you some great conference information in this issue. Our own Andrew Berman was cles, information or data. down in Washington, D.C. last month for the NAMB’s 2019 Legislative & Regulatory Conference. This is one of the most critical weekends of the year for mortgage originators and it was great to see so many professionals turn out for the event. Attendees heard from elected officials in Congress, regulators, department chairs and industry leaders on the state and future of our industry. And then they got to go to Capitol Hill to take their concerns directly to their elected representatives. Don’t miss the photos in this issue. You’ll also find a report from the Mortgage Bankers Association’s Secondary Marketing Conference, held last month in New York City. Our Secondary Marketing Conference coverage wouldn’t be complete without Tom LaMalfa’s annual report. Every year, Tom provides his insight after both the MBA Secondary and MBA Annual Conferences. And it’s not just about what he thinks. He conducts an extensive survey of C-Suite executives to capture production data and gather the opinions, ideas, values and expectations of senior mortgage banking executives on many of the business and industry’s key issues, topics and concerns. A secondary purpose of this survey is to bring these executives further into a public discussion of key issues and topics without drama and despite the sometimes controversial nature of the underlying issues. It’s great information you won’t find anywhere else. As in almost every issue we bring you, we highlight some of the best companies and highest performers in the industry. This issue is no exception. We have both a Legend of Lending and a Mortgage Professional of the Month in this issue. For this month’s Legend of Lending, we focus your attention on Calyx Software. For decades, Calyx Point has been the first tool most new brokers pick up. Many will use no other loan origination tool for the duration of their career. In this issue, Phil Hall visits with Calyx’s Executive Director of Technology Ben Wu, Executive Vice President of Business Development Bob Dougherty and Director of Marketing Patrice Power to break down what has made the company such a success in the mortgage space, what differentiates the company from the competition and the company’s partnership with NAMB on the Calyx Wholesaler MarketPlace, NAMB All-In. This month’s Mortgage Professional of the Month offers you a profile of NAMB President Rick Bettencourt. In addition to leading NAMB, Rick is national VA sales leader and branch manager with Mortgage Network Inc. in Danvers, Mass. Many of our readers see him every week on Mortgage News Network’s special Homeownership Heroes series, sponsored by Caliber. It’s a great show for any mortgage professional interested in learning more about helping service members and veterans. And, of course, you’ll find all of the trade group, compliance and motivational features you find every month in our publication, including features from Christine Beckwith, Brian Sacks, Ralph LoVuolo and Dave Hershman. It really is about bringing the value this month. We hope you get some great ideas out of this issue and wish you much success in your growing businesses. Sincerely, Joel M. Berman, Publisher-CEO Mortgage News Network Joel@MortgageNewsNetwork.com

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

NAMB 2018-2019 BOARD OF OFFICERS & DIRECTORS E X E C U T I V E

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

Rocke Andrews, CMC, CRMS President-Elect Rocke.Andrews@NAMB.org

Michelle Velez, CMC Vice President Michelle.Velez@NAMB.org

B O A R D

George Burkely, CRMS Treasurer George.Burkley@NAMB.org

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

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

D I R E C T O R S

Michael DeSantis Mike.DeSantis@NAMB.org

Wayne King, CRMS Wayne.King@NAMB.org

Linda McCoy, CMRS Linda.McCoy@NAMB.org

Matt Oliver Matt.Oliver@NAMB.org

Marty Pfeiffenberger MartyP@NAMB.org

Kimber White, CRMS Kimber.White@NAMB.org

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

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

National Association of Professional Mortgage Women 6000 Gisholt Drive, Suite 200 l Madison, WI 53713 l Phone: (608) 886-9817 l E-mail: Admin@NAPMW.org l Web site: NAPMW.org

2018-2019 NAPMW NATIONAL BOARD OF DIRECTORS

Laurel Knight-Keane National President President@NAPMW.org

Glenda Mooney President-Elect PresElect@NAPMW.org

Tobi Libbra Vice President NVP1@NAPMW.org

Rolanda Legg Vice President NVP2@NAPMW.org

Jaclyn Weedin Secretary NatSecretary@NAPMW.org

Nicole Shea Treasurer NatTreasurer@NAPMW.org

Robin Hart Parliamentarian Parliamentarian@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

JUNE 2019 n National Mortgage Professional Magazine n

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2019-2020 BOARD OF DIRECTORS

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

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

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

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

Debbie Loyning Treasurer (425) 264-1024 Debbie@Alliance2020.com

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

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

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

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

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

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

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

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

Roy Goodwin Compliance Services Director (630) 539-1525 RGoodwin@NCRAInc.org

ARMCP Set to Launch New Site To all 1,600 members of the Association of Residential Mortgage Compliance Professionals (ARMCP), the new ARMCP.org Web site is nearing its official launch, a state-of-the-art platform designed specifically to fulfill the needs of residential mortgage compliance professionals. The design and development have taken several years to bring to the point of launch. “This is just what our organization needs,” said Jonathan Foxx, Ph.D., MBA, Founder and President of ARMCP. “Our current digital abode is on LinkedIn, and we will keep the LinkedIn group, though most of us will move to the new Web site home. We’ll be sending announcements your way soon, via LinkedIn and other media resources! If you have not yet joined ARMCP, please contact me at Info@ARMCP.org and I will send you an invitation.” ARMCP is the first and only independent, national organization in the United States devoted exclusively to residential mortgage compliance professionals. ARMCP’s independence means it is a non-profit association, owned and managed by its members, and not dependent on any profitbased enterprises. If you would like to join the association’s Steering Committee, create a forum to discuss news and views, or help in any way to build our organization, e-mail Info@ARMCP.org. For more information, visit ARMCP.org.

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Are You Fully Prepared for Peak Buying Season? By Tom Hutchens

s the peak summer homebuying season approaches, all of us in the mortgage business look forward to working countless hours to assure our success and the satisfaction of our customers. In my experience, preparation is just as important as dedication, especially in our industry where change is a constant. To help our loan officer colleagues do a bang-up job, we have developed the Angel Oak Summer Success Checklist, including more than 20 important pre-season tasks that will get you fully primed for tremendous results. You can get the entire list at http://bit.ly/SummerChecklist2019. Here are a few of the top suggestions:

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l Optimize your digital presence: Are all of your online profiles (company Web site, LinkedIn, Facebook, etc.) up to date? Make sure you play up your unique strengths. Online application/prequal forms must be front and center. Detail your products and their benefits. l Reach out to all important contacts: Send a valuepacked message to every previous customer, real estate agent and other referral source in your database. Tell them why “this summer” you are the originator best suited to get the job done for them. Avoid clichés. Deliver custom messages to specific groups of contacts. For the most valuable connections, write personal notes and follow up with phone calls. l Co-sponsor open houses: Loan officers are permitted by RESPA to offer refreshments and their own marketing materials at home sale open houses (conditions do apply). Now is the time to let your real estate agent partners know that they can count on you to help them show their listings. l Expand your product knowledge and offers: Fill out your product portfolio, so that you can benefit from every potential opportunity. Don’t rely solely on previous years’ go-to products. Non-QM mortgages, one of the fastest growing categories, are still offered by relatively few lenders and loan officers. Now is the time to learn about them, get approved by a leading non-QM lender and add them to your marketing portfolio. l Stay visible in your community: Now is the best time to compile a list of summer events close to home that you can either sponsor or attend. Plan in advance for the youth baseball/soccer games, church bazaars, concerts and festivals where you can meet people. Again, for a free copy of the complete Angel Oak Summer Success Checklist, go to http://bit.ly/SummerChecklist2019 or contact the Angel Oak account executive for your area at AngelOakMS.com/map/ or by calling (866) 837-6312.

Tom Hutchens is EVP, production at Angel Oak Mortgage Solutions, an Atlanta-based wholesale and correspondent lender licensed in more than 40 states and operating in the non-QM space for over five years. Tom has been in the real estate lending business for nearly 20 years. He may be reached by phone at (855) 539-4910 or e-mail Info@AngelOakMS.com.

SPONSORED EDITORIAL

NEW TO MARKET continued from page 13

receive, and in turn, disclose accurate appraisal fees on the LE at first issuance will be a step ahead of competitors that haven’t reconciled their workflows in this unforgiving zero-tolerance environment. SnapVal is a piece of technology that lenders currently lack from their digital mortgage strategies. By leveraging SnapVal, they will save time and money, as well as increase their pull-through rates while elevating the borrower experience.” SnapVal integrates seamlessly with loan origination systems (LOS), digital mortgage point-ofsale (POS) systems, borrowerfacing Web portals and propriety lending or servicing platforms. Global DMS provides a configurable RESTful API Web service that facilitates swift and cost-effective integrations. SnapVal allows lenders to easily automate the insertion of the appraisal fee into the LE, expedite payment, and enable real-time ordering of appraisals from directly from within their software system of choice. Lenders have several options to configure appraisal pricing including the lowest price provider, percentage allocation, or round-robin distribution. This helps hone pricing accuracy by taking into account key factors including region, appraiser availability, experience, and more. As a result, appraisal pricing guesswork is removed and replaced with automation accuracy. MGIC’s MI Now Available Through Blue Sage’s Digital Platform

Blue Sage and Mortgage Guaranty Insurance Corporation (MGIC) have jointly announced the availability of MGIC’s mortgage insurance rate quotes and delegated MI service ordering through the Blue Sage Digital Lending Platform. Through this technology integration, loan originators can select MI products and order MGIC rate quotes or delegated MI without leaving the platform, improving the speed and accuracy of ordering MGIC MI. “We’re proud to partner with MGIC, which shares our vision to streamline the mortgage insurance process for lenders and

consumers,” said Joe Langner, chief executive officer of Blue Sage. “Our automated integration with MGIC significantly reduces time and effort involved in ordering insurance, regardless of a lender’s channel of business. Through partnerships such as these, Blue Sage continues to modernize mortgage lending in the cloud in ways that other platforms simply cannot match.” Margaret Crowley, vice president of marketing and customer experience at MGIC, said, “We are excited to be working with Blue Sage to bring the newest MGIC offerings to our mutual customers. As we continue to define new ways of supporting the private mortgage insurance needs of our customers, partners like Blue Sage are creating platforms that support continuous innovation.” Plaza Home Mortgage Debuts High Balance Access Loan Program

Plaza Home Mortgage Inc. is now offering its new High Balance Access loan program, designed for borrowers to qualify for highcost area loan amounts from $484,351 to $726,525, regardless of where the property is located. According to the San Diegobased company, the new program is offered through its wholesale, mini-correspondent and national correspondent channels. The program features include loan-to-value ratios up to 90 percent for purchase and 80 percent for refinance, with a minimum FICO score of 680 and a debt-to-income ratio up to 43 percent. The loans are eligible for primary and second home residences. “Plaza’s new High Balance Access loan program lets originators qualify customers for affordable, non-Jumbo loans using loan limits that historically have only been available in GSEdesignated high cost areas,” said Michael Fontaine, chief operating officer and chief financial officer at Plaza Home Mortgage. “This new finance option opens up a whole new market segment for originators to grow their business.” continued on page 57

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T H E

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Accelerating: How Sal h t i w

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ast month, I wrote an article on the art of execution and action titled, “The Missing Piece! Why people and companies fail to succeed.” The response to that article was overwhelming and is still getting commentary and feedback, and if you didn’t read it you should. It’s truly the difference between those simply showing up and those showing up with results. This month, I am focusing on those I see accelerating at speeds that are defying industry trends. As a coach and a former mortgage professional, I spent decades competing as a loan originator and as manager at all ranks. I worked amongst the most elite sales professionals and competed and won frequently as well. If you find it offensive that I

h t i w

make these statements, then you will want to stay tuned, because this article dives into the positioning of yourself as an expert fad that is leaving the world confused. I’ve got courtside seats! I found my way to that upper echelon status through many of the tactics I am about to outline. Today is different though. Today, we have scars and are bound by rules and regulations that slow us down, albeit necessary. It’s easy to get discouraged in this field of mortgage and real estate finance because it’s like running a relay race with a weight tied to our leg. Someone else in line is waiting anxiously for us to show up with that baton and we are waiting for someone behind us to do the same. A big long line that we orchestrate all the way to a glorious finish line,

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B L O G

ales Pros Get an Edge By Christine Beckwith

often in the most dysfunctional way. That finish line, at times over the past decade, has been so far out that we’ve needed binoculars to see it. It was easy for many to give up, grow discouraged and leave the race. But for the valiant ones who weathered that storm, today they are getting in the race, and better yet, are winning races. Yes, this market, as compared to many, is a great one. For the hardworking guy or gal, there are buckets of fish to be filled. Yet, I still see some struggling. I still see some losing competitively. I still see some distracted, worried about what cannot be changed. Some still are failing all together. So I gear my monthly blog on the following basis, not focused on those who are losing, but rather yet, on those who are winning! You see a lot from the inside I have had the great

pleasure of finding myself at the center of the mortgage media circulating throughout our industry. I am one inch to the right or left of many of the magazines, writing as a columnist, as I am here, also showing up as a guest speaker on industry podcasts. I am also out there myself covering events with the likes of Josh Pitts, Jason Frazier, Phil Treadwell, Dustin Brohm and others from the Industry Syndicate and Shred Media fame. These individuals are covering the events, interviewing the pros and grabbing the industry icons for vital interviews, and I am listening, tuning in, taking a seat and taking notes. But are you? I ask rhetorically of course, because I believe that what lies within these medias is truly the answers and the actions necessary to grab market share. It’s not a secret how it’s getting done. I see Mat Ishbia’s United Wholesale Mortgage (UWM) grabbing recordbreaking market share and I see groups on the Internet and in

real life like Anthony Casa’s AIME, the Association of Independent Mortgage Experts, all over the airwaves grabbing market share. Finally, I have sat on the convention stages and in the audiences of the conventions all year and again, I see the trend, the movers and shakers and I know now why there is such a divide between success and failure. So, let me break down to you, the reader of National Mortgage Professional Magazine, what I am seeing with the likes of hundreds of warriors who are literally mopping up this year. Not for the thin-skinned! I’ve been in competitive markets before and I know when that happens, it is calling upon your ability to fight for market share. What does that word mean … fight? It means your willingness to get in there to shove and push to grab the apples that lay in front of you that others are going to take if you don’t. So, I ask you, before I go any further … are you willing to fight

for market share? Yes, I know, I have seen the Internet banter, I will choose to bypass my personal commentary although I will say I believe we need to act professional and as leaders. I still respect those who are choosing to battle with words because in a weird, maybe primitive way, I’m watching the results more than the words and the results are there. So while I like the nice guy and I respect the nice guy, I know every moment, that guy is losing ground. So now it becomes an art of the aggressor. How polished can you be while grabbing market share? How far are you willing to wade into the pool with your slacks pulled up to your knees? Are you willing to even get in the pond or are you going to sit on the sidelines while others duke it out? Market share is going to the true hardcore competitors. Now, all metaphoric examples set aside, there are many weapons being used in this war. There are the sales guys who have value-added continued on page 49

n a t i o n a l m o r t g a g e p ro f e s s i o n a l m a g a z i n e â&#x20AC;&#x2122;s

Appraisal Management Companies

GUIDE

2019

Lenders need appraisal management companies (AMCs) that are in-sync with their borrowersâ&#x20AC;&#x2122; overall customer experience. When doing that, each lender finds different needs, such as technology integration, the quality of reporting, size of appraiser network, ease of ordering, and so on. This month, we present our first-ever AMC Guide 2019 to allow select AMCs share their story about why their lender clients love to work with them.

national mortgage professional magazine’s

Appraisal Management Companies

GUIDE

Accurate Group LLC

ACT Appraisal Inc.

(216) 672-3620

(888) 377-8901

AccurateGroup.com

ACTAppraisal.com

Established in 2003, Accurate Group is a real estate

Founded in 2001, ACT Appraisal Inc. is a full-service

technology and services leader, delivering technology-

appraisal management company, handling everything from

driven property appraisal, title data, analytics and digital

beginning to end with the appraisal process. From the

closing solutions to banks, credit unions, servicers, non-

appraisal ordering and tracking to QCs and the delivery

banks and capital market firms.

process (i.e. integration with LOS systems and software, UCDP, etc.) ACT offers a centralized appraisal solution. Our

What sets your Accurate Group apart from the

staff manages a network of certified appraisers nationwide

competition?

to fulfill real estate appraisal assignments on behalf of

Accurate Group leads AMCs on three fronts–technology

mortgage lending institutions. ACT Appraisal was founded

innovation, strategic partnership and borrower experience.

almost two decades ago and has a proven track record of

By combining modern process automation, accurate data

reducing lender’s time, efforts and costs in managing the

and innovative SaaS and mobile technologies, Accurate

appraisal process. The evolution of appraisal process

Group delivers the best combination of speed, quality,

through regulation and technology is what makes ACT

compliance and price. With more than 10,000 appraisers,

Appraisal a leader in the industry today, remaining at the

the most complete valuation product set (including

forefront of information, technology and industry trends.

ValueNet) and $450 billion in appraisals completed, Accurate Group knows how to meet market demands. With

What sets ACT Appraisal Inc. apart from the competition?

Accurate Group, you benefit from market-leading appraisal

All AMC’s are priced very closely. We all deal with the

solutions that enable modern digital frameworks, improve

same appraisers. ACT Appraisal Inc. offers the best service

accuracy and lower costs, as well as a strategic partner to

for your dollar, and is available 24/7, including ops and

help you grow your business.

QC.

What are lenders saying about Accurate Group?

“I wanted to thank you for finding an appraiser and

“I want to recommend the best AMC that I have ever

having the report completed and returned so timely. You

worked with … it’s ACT Appraisal. The quality of their

did a fantastic job! This type of service is why I love

reports and the support offered is second to none. I had an

working with Accurate Group.”—Eddie B., Director of

opportunity to meet not just Ron Waite, national sales

Valuations

manager, but also the owner and their Quality Control team. Without equivocation, ACT Appraisal was one of the primary factors for my rise in the TPO industry in recent years.”—Michael Collantes, LD Wholesale

national mortgage professional magazine’s

Appraisal Management Companies

GUIDE

JUNE 2019 n National Mortgage Professional Magazine n

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AMC Links

Appraisal Nation

(866) 439-9546

(866) 735-0901

AMCLinks.com

AppraisalNation.com

At AMC Links, we know what it takes for you to have

Lenders from all different size organizations benefit from

successful closings. As one of the nation’s first registered

using Appraisal Nation. The company was established to

and legally-operating AMC, AMC Links understands your

give small companies the same customer service and

concerns with appraisals. The company’s streamlined

experience that only the large companies were getting from

process eliminates those concerns in a cost-effective and

other companies. Appraisal Nation also started catering to

timely way. AMC Links values: Fast turn times; low,

private lenders when AMCs were not yet in that space

steady fees; 100 percent compliance; open communication;

which has made the company number one AMC in private

and personalized service.

lending.

What sets AMC Links apart from the competition?

What sets Appraisal Nation apart from the competition?

AMC Links’ communication and customer service is a step

Appraisal Nation was founded for small- to mid-size

above, in this line of work communication is key in all

companies. Its personal touch model is designed to give

aspects and they understand that they represent you to

brokers and private lenders a quality of care and level of

the borrower and that is important. You will have a

experience they’ve never received before.

dedicated account manager to help with any issues or questions. AMC Links is large enough to cover 49 states,

What are lenders saying about Appraisal Nation?

including Hawaii and Alaska, but understands that

“By far the best AMC I have ever used.”—Lisa Aparis, U.S.

hometown feel is important as well and that when you call

Bank

or e-mail with a question or issue, you will get the attention needed and have the issue handled quickly.

“It makes life much easier when you have a business partner like Appraisal Nation.”—Scott, Aspire Financial

What are lenders saying about AMC Links? “I highly recommend using AMC Links for appraisal orders. Their communication is excellent and they are always available if an escalation is needed. I work very closely with their National Business Development Manager Brent Arveseth, and he is always willing to help us out if we have issues or need a rush appraisal. They are timely and effective with their appraisal orders. The collaboration with this company is outstanding and I would recommend them to anyone.”—Home Mortgage Alliance

national mortgage professional magazine’s

Appraisal Management Companies

GUIDE

Arivs

Class Valuation

(480) 478-0025

(866) 333-8311

Arivs.com

ClassValuation.com

Founded in 2009, Class Valuation is a top nationwide real

appraisal management company that combines the

estate collateral valuation and appraisal management

strengths and resources of a national presence with the

company to the residential mortgage industry, delivering

expertise and personal touch of local management. Like

outstanding quality and service to every client. The

your local bank, Arivs believes that its clients get the best

company is committed to combining the best people,

quality and service when they work with people who are

products, processes, and technology available to help

part of the community. While other national appraisal

lenders make more homeownership dreams come true.

management companies focus on profits, Arivs is

Class Valuation has consistently been ranked highly in

committed to being its clients’ best partners for the long-

client service by several of the nation’s top ten mortgage

term, and believes its unique, local office framework helps

lenders and has been recognized as a top place to work,

it achieve this.

along with receiving many other industry awards.

What sets Arivs apart from the competition?

What sets Class Valuation apart from the competition?

Arivs’ unique model consists of 20 local offices around the

Change is knocking at the door. Class Valuation’s goal is to

country. Each office is headed by area directors who are

lead and define the change that will ensure its lender

also certified appraisers with at least 20 years of

partners’ long-term success. Modernization, when done

experience managing the appraisal process, completing

right, brings together all stakeholders to test, report and

appraisals, and training new appraisers in the areas they

refine before rolling out changes. That’s why Class

manage. In Arivs’ developed appraiser relationships and

Valuation lives and breathes Thoughtful Change. The

geographical competency lies its competitive advantage.

concept–as it relates to the appraisal industry–requires coordination and buy-in from lenders, appraisers, service providers like Class, and the GSEs. A unified front from all

“It is with great pleasure that I write this letter of

parties can result in truly sustainable change.

recommendation for Arvis. For over three years, I have been using Arvis for my appraisal needs. In this time, I

What are lenders saying about Class Valuation?

have never had anything but positive experiences. In the

“Class Valuation has been revolutionizing the way I can

world of real estate transactions, appraisal services are

service my clients and real estate agents and has been a

key in the success of any business. Not only does Arvis

great experience as a loan officer. Class Valuation has

provide timely service, they have always gone above and

been phenomenal, and I would highly endorse them to

beyond to make sure all my needs are met. The Web site is

make your dreams come true.”

simple to use, and the communication is excellent.”—Polly Adams, Branch Manager, Security National Mortgage Company

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What are lenders saying about Arvis?

NationalMortgageProfessional.com

Established in 2008, Arivs is the industry’s first and only

national mortgage professional magazine’s

Appraisal Management Companies

GUIDE

Clear Capital (530) 550-2500

Independent Settlement Services LLC, a Radian Company

ClearCapital.com

(412) 788-1740 ISSPGH.net

Clear Capital was founded by Duane Andrews, CEO, and Kevin Marshall, president. Their partnership was formed

The clients that best benefit from Independent Settlement

during the successful launch of REONetwork.com in 2000,

Services LLC, a Radian Company’s AMC services are

which remains a premier site for finding qualified REO

lenders, banks and credit unions that originate first and

brokers. Bringing together their technology and real estate

second mortgages. Additionally outsourcing quality control

backgrounds, Duane and Kevin quickly realized the

and due diligence companies greatly benefit from

opportunity in the property valuation industry to provide

Independent Settlement’s services as well.

innovative technology, attentive customer service and a vibrant community for real estate professionals to connect.

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What sets Independent Settlement Services apart from the competition?

What sets Clear Capital apart from the competition?

Backed by Radian, Independent Settlement Services sets

Clear Capital operates in all 50 states, and its Panel

itself apart from other AMCs by offering high-quality

Management Specialists, a dedicated team for managing its

appraisals and best-in-class customer service. The result is

network, constantly monitors and recruits as needed to

that clients are able to make quick lending decisions, close

ensure the company has strong nationwide coverage. Clear

loans faster, and operate much more efficiently.

Capital has more than 6,000 appraisers nationwide,

Independent Settlement Services has an industry leading

including in tough rural markets, ensuring they are ready

97 percent addendum free rate, meaning that only three

for volume spikes on short notice. Clear Capital is proud

percent of reports come back to Independent with

that they have never turned down an order—”Wherever it

questions.

leads, whatever it takes” isn’t just the company motto, it’s a promise that they will get the job done. Clear Capital has maintained an industry-leading 100 percent completion rate for client orders since 2001. What are lenders saying about Clear Capital? “Our customers often comment on how different it is working with Clear Capital, and their happiness shows in the scorecards many of them use to rank their vendors. Being consistently ranked number one on those scorecards shows us we’re making their businesses and their lives better. And this is what inspires us. It’s our people, and their passion for what they do that truly sets us apart from other vendors. Because it’s more than a relationship—to us, it’s personal. From 2014-2018, Morningstar Credit Ratings awarded their highest residential vendor ranking, ‘MOR RV1,’ and ‘Stable Forecast’ to Clear Capital.”

What are lenders saying about Independent Settlement Services? “It seems Independent Settlement Services is able to obtain much better pricing (and timing) on the more rural properties, which is great, and I really I appreciate how user-friendly their order screen is. The Web site is, hands down, 10 times better than others I’ve ordered from.”

national mortgage professional magazine’s

Appraisal Management Companies

GUIDE

Integrity Appraisal Management LLC

SingleSource Property Solutions LLC

(713) 772-1141

(866) 620-7577

IntegrityAS.net

SingleSourceProperty.com

Established in 2009, Integrity Appraisal Management LLC

SingleSource Property Solutions is a nationwide service

services regional mortgage lenders and banks in the states

provider to many of the largest loan origination, servicing

of Alabama, Arkansas, Colorado, Florida, Georgia, Indiana,

and secondary entities. SingleSource provides a

Kansas, Kentucky, Louisiana, Mississippi, New Mexico,

comprehensive range of services expanding across multiple

Oklahoma, Tennessee and Texas.

facets of the industry, including valuations, REO asset management, property preservation, title and document

What sets Integrity Appraisal Management apart from the

management. SingleSource provides national appraisal

competition?

services utilizing industry-leading tools that include: A

Integrity Appraisal Management values relationships with

proprietary scoring model that grades every valuation

its clients and appraiser partners, and strives to make the

report, MLS tools that verify data points in delivered

appraisal and compliance process seamless and stress-free.

products, use of Robotic Process Automation and staff field

The company’s commitment to its appraiser partners

appraisers in key markets.

allows it to retain the best and brightest local appraisers, What sets SingleSource Property Solutions apart from the

quality reports. All of this culminates in a team effort

competition?

driving towards the goal of providing the best possible

SingleSource’s experienced team provides a wealth of

service to its clients. Online order tracking, LOS

mortgage origination, servicing and property management

integration, automated quality control reviews, staff review

experience. SingleSource knows how to craft unique, highly

appraisers and quick turnarounds make your appraisal

valuable solutions that work across disciplines so its clients

process simple and straightforward.

can confidently work with one vendor. SingleSource has adapted to the ever-changing technology of the industry. Its software solution provides partners access to a variety of

Management?

easy-to-use tools that can be efficiently integrated with their

“A customer, Mr. Williams, stopped by my office and told

existing IT structure to meet their needs. Company expertise

me he called Integrity about getting his appraisal scheduled

lies in exceptional management by creating customizable

quickly. He is a truck driver and was leaving town. He was

workflows. It is committed to providing the best service with

very impressed that the appraiser actually called him that

high performance standards for every customer.

same day to schedule an appointment. He said the appraiser told him he moved him up to the front of the

What are lenders saying about SingleSource?

line because we called and asked. It isn’t like that with

“SingleSource is one of the most service-focused

most AMC’s I have dealt with in my 15 years in this

organizations I have encountered. Our relationship with

industry. Thank you for all you do for us and our

SingleSource has been expanded numerous times over the

borrowers!”

past few years, due in large part to our comfort and trust in dealing with them. Our inquiries and requests are always promptly resolved and in a professional and friendly manner.”

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What are lenders saying about Integrity Appraisal

NationalMortgageProfessional.com

which leads to professionalism, timeliness and the highest

national mortgage professional magazine’s

Appraisal Management Companies

GUIDE

Valligent Technologies

Valuation Partners

(877) 490-0390

(281) 313-1571

Valligent.com

ValuationPartners.com

Established in 2002, Valligent Technologies provides

As a vendor partner, Valuation Partners serves a wide

particular benefit to banks, credit unions and financial

spectrum of lenders, from local to mid-sized direct lenders,

institutions looking for proven ways to secure compliant

to credit unions, independent mortgage bankers and

valuations faster, so they can exponentially improve their

commercial banks. Valuation Partners helps clients lower

funding times. Valligent is also ideal for lenders that value

costs and address business concerns imperative to their

transparency, regulatory compliance and high team-centric

success. Lenders choose them for their strong experience,

service standards. Whether a small community bank, credit

deep history, legendary quality, best-of-class customer

union or large nationwide enterprise company, Valligent’s

service, timely execution and its carefully selected panels of

patent-pending proprietary technology expedites appraisal

geographically-competent appraisers in every U.S. market.

turn times so drastically that lenders can cut funding times to just a few days. Valligent’s clients include hundreds of

What sets Valuation Partners apart from the competition?

lenders of all sizes, in every state in the country.

Valuation Partners is one of the five largest privately held

JUNE 2019 n National Mortgage Professional Magazine n

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U.S. valuation firms, providing personal, white-glove service What sets Valligent Technologies apart from the competition?

to every client, large or small. Valuation Partners’ owners

Valligent Technologies’ proprietary patent pending

are veteran appraisers with long histories in all aspects of

technology is the key differentiator in the company’s fast

commercial and residential valuation. In addition to having

turn times. Valligent works with a select group of

7,000 independent fee appraisers in all 50 states, Valuation

appraisers, whom it trains on its proprietary technology,

Partners has access to 100-plus staff appraisers at WFG, its

enabling each appraiser to complete compliant appraisals

parent company’s staff appraiser division. Valuation Partners

within a matter of hours, start to finish, at half the cost of

has reengineered the process of ordering purchase appraisals

traditional appraisals. Valligent’s unique appraisal

to deliver speed, quality and service—including reviewing

inspection technology provides a convenient and extremely

purchase agreements, ongoing appraiser oversight, and

positive borrower experience. For nearly two decades,

dedicated account teams, available Monday-Saturday.

hundreds of loyal lender and investor clients have chosen Valligent, year after year, for its fast turn times, appraisal

What are lenders saying about Valuation Partners?

quality, accuracy and compliance.

“The appraisal process can be challenging. However, the experiences that I have had with Valuation Partners have

What are lenders saying about Valligent Technologies?

been phenomenal. A company is only as good as its staff

“We’ve been working with Valligent for several years, and

allows, and let me tell you, I have been working with (Client

we couldn’t be happier with their products and service!

Relations Supervisor) Aisha Boodram and (Client Services

Their appraisal review products assist us with meeting

Rep) Vanessa Olguin, for several years and they are true

regulatory requirements for multi-unit residential

professionals. They make it happen every single day. They

dwellings. Everyone there is friendly, knowledgeable and

are always looking to see how they can assist us and the

always quick to answer any questions that we may

client to get the loan closed. I would highly recommend this

have.”—Cara Sacre, Lake Area Mortgage, a Division of

company to anyone.”—Peter N., Branch Manager, Sierra

Lake Area Bank

Pacific

HEARD ON THE STREET continued from page 31

whose objectives are to provide the best possible solution to lenders, and ultimately consumers, when applying and completing a mortgage. We are thrilled to be partnering with one of the industry leaders to bring a world-class experience to borrowers.” Promontory Fulfillment Partners With ComplianceEase

Promontory Fulfillment Services (PFS) has announced that its white-label mortgage origination platform has integrated with ComplianceEase’s automated compliance solution, ComplianceAnalyzer. The integration with ComplianceAnalyzer will allow PFS to automatically audit mortgage loans for regulatory compliance with all federal, state and

municipal regulations, including TRID and QM, as well as federal and state high-cost and antipredatory lending violations. The solution also audits for compliance guidelines set by the secondary market and government-sponsored enterprises. PFS enables banks and credit unions to offer a full range of mortgage products—conventional, jumbo, non-agency and HELOCs— without the need to build and maintain a mortgage operation. The company underwrites loans using client-provided overlays and then processes and closes the loans in the bank’s name—with ongoing compliance reviews throughout. PFS then delivers the loans to the client or sub-servicer. PFS also offers clients a digital point-of-sale solution—Borrower Wallet—allowing consumers to apply, upload documents and eSign on any device. The process enables borrowers to manage their application, while relying on the loan officer as their trusted guide and advisor. The PFS solution

empowers lenders to deliver an optimal customer experience while remaining competitive and profitable. Blend Receives Strategic Investment by Salesforce Ventures

Blend, a provider of digital lending software, announced that it has received a strategic investment by Salesforce Ventures, a San Francisco-based investment firm targeting enterprise technology. The sum of the investment was not disclosed, nor is it clear if the investment will require personnel changes at the San Franciscobased Blend. On its Web site, Blend stated that the “partnership with Salesforce is an integral part of the ecosystem we’re building to drive simplicity and transparency in consumer lending. Salesforce is among the most respected technology companies in the world, and we are proud to work with them so closely.” Spencer Chavez, a principal at Salesforce Ventures, used his blog post on Medium to explain the investment it being aimed at

expanding the company’s presence in the mortgage industry. “The movement of the entire mortgage workflow process to the cloud has been a key driver and tailwind for Salesforce’s Financial Services Cloud strategy for quite some time,” Chavez wrote. “CRM is only one key piece of a loan officer’s workflow to originate a loan and build relationships with their end customers—the loan origination system (LOS) which acts as the system of record to price a loan, and the digital lending platform which acts as the glue between both the LOS and CRM to provide a seamless and transparent application experience for the end customer, are also needed.” Planet Home Lending Opens New Virginia Beach Branch

Planet Home Lending LLC has opened a new branch in Virginia Beach, Va., offering home loans for military servicemembers, firsttime homebuyers and move-up buyers. Leading the new Virginia continued on page 48

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national mortgage professional magazine’s

Legends of Lending Calyx Software By Phil Hall

he great British writer and philosopher Aldous Huxley once opined, “Consistency is contrary to nature, contrary to life. The only completely consistent people are the dead.”

What makes Calyx Software different from its competitors? Ben Wu: Calyx has been serving the mortgage industry for 28 years and has remained privately-owned the entire time, which is unusual. Our founder and CEO is still very much engaged with the day-to-day business operations. We can walk into his office without setting up a meeting. It feels more like a family than a typical company—and I’ve been with Calyx for more than 25 years. Bob Dougherty: Our founder is so humble and focused that if you met him at a trade show, you would not even realize he’s the CEO of a leading LOS provider. The reason Calyx is so successful is because of his vision and dedication to always put customers first.

JUNE 2019 n National Mortgage Professional Magazine n

Of course, Huxley never worked in the mortgage technology space, or he would have been aware of the consistency that Calyx Software has brought to the industry. Since its founding in 1991, this privately-held, San Jose, Calif.-headquartered company has been a consistent, award-winning leader in creating innovative products for various sectors of the mortgage industry. To understand what makes Calyx stand out, National Mortgage Professional Magazine spoke with Executive Director of Technology Ben Wu, Executive Vice President of Business Development Bob Dougherty and Director of Marketing Patrice Power.

NationalMortgageProfessional.com

Calyx is well-regarded in the industry for its customer service. What is the company’s secret to this aspect of its operations? Ben Wu: Many companies claim to put their customers first, but, at Calyx, that core value truly is at the heart of our business. Our customers trust us to deliver easy-to-use and reliable loan origination software, and we want to do right by them. That’s why we encourage every level of our organization to spend time with our customers: By phone and, if possible, on-site to listen to them and learn not only how they use the software, but also how we can enhance it to benefit their businesses. Bob Dougherty: We frequently travel to meet our customers in their offices. I think it is important. Giving clients our undivided attention lets them know how important they are, and at the same time, allows us to learn how they use the software, what features they value and ways to streamline their user experience. Customer feedback is key in our product development efforts. Would it be safe to assume that your company also puts a higher standard in its hiring? Ben Wu: Definitely. We start by looking at the values of potential employees and what motivates them to determine if they align with ours. Key attributes include intelligence, energetic, creative and collaborative–people who take pride in what they do and look for opportunities to add value for customers, partners and the company. We want to build a

“Many companies claim to put their customers first, but, at Calyx, that core value truly is at the heart of our business. Our customers trust us to deliver easy-touse and reliable loan origination software and we want to do right by them.” —Ben Wu, Executive Director of Technology Calyx Software

“Giving clients our undivided attention lets them know how important they are, and at the same time, allows us to learn how they use the software, what features they value and ways to streamline their user experience. Customer feedback is key in our product development efforts.”

“Calyx has faithfully and successfully served our customers and the mortgage industry for more than 28 years.” —Patrice Power Director of Marketing Calyx Software

—Bob Dougherty EVP of Business Development Calyx Software

team that is knowledgeable, yet still has a thirst to grow. If you think you know it all or have done it all, then Calyx probably isn’t the best fit for you.

employees and, based on their insights, create a new brand identity with messaging and tools that bring our name and values to life in a current, engaging and interactive way.

the capital markets space with third-party originators to help automate lending decisions and provide the best set of eligible options for underserved borrowers.

Calyx recently announced that it was rebranding itself, including the creation of a new logo. Why did you opt to update a winning formula? Patrice Power: We were looking to build an even stronger story around our corporate identity and bring a much more unified brand to the market. Calyx has faithfully and successfully served our customers and the mortgage industry for more than 28 years. As part of the rebranding, we launched an impactful new visual identity and market messaging, Web site and customer portal that provides free resources and training for all our users. The new branding is vibrant and sophisticated to reflect who Calyx is today and into the future. The comprehensive rebrand demonstrates our dedication to the future of our customers, our company and the mortgage industry. Bob Dougherty: After nearly 30 years, we felt it was time to refresh our brand to reflect our continued relevance in today’s market. The prior branding and Web site did not communicate our innovation. The rebrand and Web site are much more modern, colorful and dynamic. Because we are deeply committed to customer service and providing free training options, we also launched an on-demand portal platform where our customers can access training tools, register for Webinars, download product resources and more.

How does Calyx approach marketing, including social media? Patrice Power: We have a pretty traditional mix of marketing channels, including mortgage industry publication advertising, trade shows and conferences, thought-leadership articles, speaking opportunities, as well as customer and prospect engagement events. We also communicate directly with our customers via informative direct e-mails, newsletters and social media outlets, where we share upcoming events, blogs and industry insights.

How do you see the state of the mortgage technology world, both in terms of the companies in the space and how mortgage professionals are using the new technologies? Bob Dougherty: The state of the mortgage technology world is in flux. There are a lot of companies claiming to be the next great LOS, but the burnout rate of these companies is more than 50 percent and they often wind up either not being profitable or being sold. We have all heard the recent news of two LOSs that are now under one venture capital firm and another LOS that was sold to a large real estate group. All of this demonstrates instability in the industry. I think we will continue to see more consolidation and see some companies simply go away. Improvements in mortgage technology are helping mortgage professionals gain speed and meet borrowers’ digital mortgage expectations. For example, years ago, a borrower would have thought their broker or lender was a rock star for closing their loan in 30 to 40 days. Today, that is considered at least two weeks too late. Mobile borrower loan apps are becoming more commonly demanded by borrowers of all ages. Convenience, anytime, anywhere, on any device is the standard in many industries and the mortgage space is catching up to fulfilling that consumer requirement.

How long was the process to determine the direction and execution of the rebranding? Patrice Power: It took approximately 10 months. It was an exciting experience to interview our customers, partners and

Calyx’s customer base is very broad, with different sectors within the overall financial services world. How do you manage to have such a steady balance with so many different players? Ben Wu: We work with a variety of banks, credit unions, mortgage brokers, lenders and investors. While we have regular contact with each segment, we also continually examine the ways those different segments interact. For example, the interaction between mortgage brokers and wholesalers led to our collaboration with the National Association of Mortgage Brokers (NAMB) to jointly launch the cloud-based, broker loan origination system with online borrower app and Calyx Wholesaler MarketPlace named NAMB All-In. All parties are working together positively, and this enabled us to jointly develop more seamless integrations by improving processes and outcomes for everyone. Another area where we are active is the nonQM space, where there are investors and capital market players with funding sources ready to deploy. Our technology helps connect the dots between lenders and aggregators in

And speaking of consolidation and venture capital firms, does Calyx Software ever get cruised for potential acquisition? Bob Dougherty: Our owner is asked all of the continued on page 55

HEARD ON THE STREET continued from page 43

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Beach location will be Branch Manager Jennifer Franklin, who will be joined in the branch by Mortgage Loan Originator Robin Kader. “Planet Home Lending is a great fit for Virginia Beach because of their versatile product mix and their commitment to military servicemembers and veterans,” said Franklin. Franklin became a mortgage banker in 1999 while serving as a Navy reservist and ultimately retiring from the Navy Reserves after 24 years. “As a national top one percent VA lender, Planet Home Lending has helped many military servicemembers use their welldeserved home loan benefits to purchase or refinance homes with no money down and less hassle,” Franklin said. “Planet doesn’t put any extra requirements on its VA customers. Sometimes lenders will add rules, like having a particular credit score or a large amount of cash on hand. We don’t put extra burdens on people, we give VA home loan benefits to people exactly as Congress intended.” Mortgage professionals to watch l Paramount Residential Mortgage Group (PRMG) has announced the expansion of its retail leadership team with the addition of Stan M. Bergum as southwest regional manager. l Flagstar Bank has hired Jason Lee to lead Flagstar’s Secondary Marketing and Capital Markets operations. Lee brings to Flagstar more than 20 years of experience in the mortgage industry. l Mortgage Capital Trading Inc. (MCT) has announced that Leslie Winick has joined the company as chief strategy officer, where she will play an integral role in helping MCT hone its strategic direction, further increase market share, manage rapid growth and delight clients. l Guaranteed Rate has named John Stewart as western divisional manager, bringing nearly 30 years of mortgage and finance industry experience to the company and will be based out of Beverly Hills, Calif. l ACES Risk Management (ARMCO) has announced the

hiring of Kyle Kehoe as chief revenue officer. Mortgage Quality Management and Research LLC (MQMR) has announced that it has hired Jeff Christensen as vice president of sales, where he will be responsible for leading sales, driving new business opportunities and expanding awareness of the MQMR brand in the market. OpenClose has announced that Tom Buenz has joined the company in the position of vice president, enterprise sales, where he will help satisfy an increasing demand for OpenClose’s LOS, digital mortgage point-of-sale (POS) solution and ancillary software products. The American Land Title Association (ALTA) has announced that Diane Tomb will take over as its new CEO on July 1. Simplifile has promoted Mark Moats to the role of vice president of national accounts. Moats previously served as a regional sales director for Simplifile, and has been with the company for nearly 13 years. RED Mortgage Capital, a division of ORIX Real Estate Capital LLC, has hired D. Edward Greene as chief underwriter for affordable housing. Get Credit Healthy Inc. has announced that Mitch Kider, chairman and managing partner of Weiner Brodsky Kider PC, has accepted an advisory board position. United Wholesale Mortgage (UWM) has announced the hiring of Blake Kolo as chief business officer and Lee Jelenic as chief innovation officer. Both new to the mortgage industry, Kolo most recently served as a managing director and leadership advisor for the Wilmington, Del.-based The Siegfried Group, a national CPA firm, and Jelenic was most recently chief executive officer of Dearborn, Mich.based Ford Commercial Solutions, a division of Ford Motor Company. New American Funding has announced the hiring of continued on page 54

THE BECKWITH BLOG continued from page 35

“So now it becomes an art of the aggressor. How polished can you be while grabbing market share? How far are you willing to wade into the pool with your slacks pulled up to your knees? Are you willing to even get in the pond or are you going to sit on the sidelines while others duke it out?”

continued on page 55

Tuesday-Thursday, November 5-7 The DeSoto Hotel 15 East Liberty • Savannah, Ga.

Preliminary Schedule of Events Subject to change

Monday. November 4 NCRA Board of Directors Meeting (all day)

Tuesday, November 5 8:00 a.m.-4:00 p.m. User and Sales Meetings 6:00 p.m.-7:30 p.m. Welcome Reception and Marketplace

Wednesday, November 6 8:00 a.m. Breakfast 9:00 a.m.-5:00 p.m. Conference Open 6:00 p.m.-9:30 p.m. Feature Event

Thursday, November 7 8:00 a.m. Committee Sign-Up & Breakfast 9:00 a.m.-4:00 p.m. General Sessions For more information and details, visit NCRAInc.org, call (630) 539-1525, or e-mail NCRA Executive Director Terry Clemans at TClemans@NCRAInc.org or NCRA Office & Members Services Manager Jan Gerber at JGerber@NCRAInc.org.

n National Mortgage Professional Magazine n JUNE 2019

Expertise You can state that you “are an expert,” but that doesn’t mean you are one! I recently wrote that saying you are authentic didn’t mean you were. I will be nice here and not use the F (-ake) word here, but you know who you are. By “fake,” I mean not willing or confident enough to let it

all hang out socially. Gary Vaynerchuk says when you let your authentic self be seen, you find your people. I think the banking industry of course has regulations in the ranks of our compliance that would prohibit ultimate authenticity on business pages of social media out of fear of increasing sales. I kid. Out of fear of liability if lines of known prohibited language. That said, how do you connect within the lines of your compliant ability? I had the good fortune of serving last year as a panelist on for Housing Wire on the Social Media Content & Compliance Panel and guess what? I was the “worse-case scenario.” I was not labeled as such, but my two peers were compliance officers, so I looked around and said, “Yup, it’s me … I’m the example to be set” and so being true to myself, I answered the questions honestly. The truth was I was connecting and then some. Not only was I connecting, but I was converting sales. I also held a senior management seat as national VP of sales at AnnieMac Home Mortgage, and as a result of my social media work in the prior two years, I had amassed more than 40K in followers from a mere 1,000, making me a prime example of an average age mortgage professional making progress in the area of evolution in social media. This brings us back to the point of this section, Are you an expert? I knew when I sat on that panel, I was an expert at social media growth. I have since been the moderator for Gary Vaynerchuk’s Agent 2021 event and have served as keynote speaker for three big conventions this year on the topic of “Social Media Content Building” amongst other social topics. But, does me getting gigs make me an expert, or is it the work behind the scenes? Is it the actual amassing of followers, converting them into sales for my

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products, technology, education, etc. that are coming out swinging those clubs. There are the guys who are shooting fish in a barrel with low rates and low costs. Some guys are waving the “Niche” signs, which is attracting a certain clientele with immediate needs. My question here is: Do you even have a weapon because good rates and great service isn’t going to reel the fish in this year? No, that is the status quo now, that’s the boat and the pole. Basically, if you have bad rates and bad service, you might as well not go fishing. So, let’s start there. In the end, I don’t think it’s the guy or gal who are gimmicking an act or waving neon signs while standing on their heads that is grabbing market share … I think that worked in a lesser market. Those who could talk well and smile nice, show up with a good video on the Internet like a shiny object … those are the ones getting the attention, but I would argue likely not the business. That is not to naysay a person with keen social media skills, because I would be putting my own self in this category. You must execute and you must convert. So, smile and video aside, how are you converting with your act, tools, weapons? Are you? If you’re not, it’s time to look around and assess your fishing hole, your equipment and your bait. The lake is being fished by your peers. Who knows when the lake will dry up again? Time is of the essence.

SAVE THE DATE!

Technology Lends a Helping Hand By Gregg Lehman and Kim Weaver

sk a lender how they got into the industry, and they often say they started in lending as a temporary stop to support themselves on their way toward another career path–but then stayed because of the rewards of helping people. Rewards like: Helping a borrower into their first home and realizing the American dream of homeownership; guiding a homeowner through a refinance to prepare for changes in their overall finances, like sending their kids to college or age-in-place retirement; or assisting an investor as they begin or expand their rental property portfolio. Lenders don’t lend because they love managing paperwork; they lend because they love helping borrowers. Lending professionals stay in the business because they find it fulfilling to help people finance their goals and dreams. Homeownership remains a foundation of American wealth building, with most Americans, 65 percent, who believe it a good idea to invest in a home, according to the latest survey of consumer expectations of housing by the Federal Reserve Bank of New York. Yet it is increasingly difficult to sustain or grow a lending business, even in a positivelytrending economy, because of the trifecta demands of regulatory compliance, borrower expectations, and investor delivery requirements. While the industry has made significant

leaps forward—adopting MISMO uniform data exchange standards, embracing electronic exchange of information, using eSignatures— lending still requires a lot of data to be collected, validated and delivered under tight deadlines. Making a loan requires many sources of information—data files, paper documents, images or natively electronic documents that are eSigned. Automation in fulfillment services ordering, disclosure or other document delivery, electronic document upload by borrowers and servicing data exchange help lenders obtain what they need faster from customers and partners. Regulatory compliance and investor requirements have increased the amount of information needed to create or service a loan. Data standards and electronic exchange of documents have accelerated the exchange of it through electronic channels. So, lenders have more information coming into their offices, and at a faster rate. But the lender’s ability to analyze, validate and reconcile all this information has not been able to keep the same pace. The clock is constantly ticking for lenders—whether for borrower, regulatory or investor timelines: Disclosure deliveries, closing dates, investor delivery dates, servicing transfer dates, loan payoff processing. Response times to customers can mean the difference between an application and a locked in rate or a locked in rate and a closed loan. Missed investor deliveries generate costly penalties, and loan defects can erase profitability if the loan

cannot be sold into the secondary market or insured. To compete effectively, lenders must be able to support constant information exchange with borrowers and investors amid constant deadlines. Managing the flow of incoming data in all of its varied formats, and being able to assess and act upon it quickly without compromising quality, requires automation in lending. The technology to support this change is available now and wellproven. The result means lending professionals can change from spending the majority of their time on administrative and clerical tasks, managing all of the incoming information, to instead, focus on exception-based decision-making and customer communication. Automation can be implemented in many ways. As an example, document exchange has been dramatically accelerated, through both electronic delivery functionality and the automation to create that delivery. Loan origination systems can be configured to automatically send data to a document provider to request borrower documents, and then use additional programmed steps to make those documents available in an online portal and notify the borrowers they are available. In the loan origination system, the lending professional can do the same steps by clicking the right sequence of buttons to do these tasks, or program the system to do it based on predefined triggers with workflow automation tools. These are all examples of robotic process

automation, where a sequence of steps is programmed and then triggered-based on events as they occur. With business rules, robotic process automation can automate tasks such as work queuing, prioritizing task assignments, comparison of information, and populating loan origination systems with missing or corrected loan data; and can trigger or manage an overall sequence of work. Artificial intelligence (AI) adds another layer for supporting lending process automation and it is taking the industry by storm. A recent survey shows that over the next two years, the use of these technologies in the mortgage industry is going to skyrocket with 58 percent of lenders expecting to be using AI in their mortgage business. AI is different from robotic process automation because instead of repeating pre-defined steps, the system applies its knowledge to the task it is given; and is always increasing that body of knowledge. AI provides the flexibility needed to support the complexity of reviewing lending data, documents, and operational processes quickly and thoroughly. There are different types of AI. With one kind of AI, supervised machine learning, a system is taught how to evaluate data. An example of machine learning is text analysis—using optical character recognition to read the document just like a human; and then uses word pattern recognition to evaluate all documents as unstructured documents. If the system

encounters a document it cannot fully evaluate, it logs it for a human to review and confirm or correct its initial analysis. Then the system can use that feedback loop, based on lender confirmation, to add that data to its stored knowledge so it can be automatically applied the next time it encounters that information. When robotic process automation is combined with machine learning, a system can make more complex decisions. For example, using a business rules engine with robotic process automation, a system can apply the data it learns from reading a document using machine learning, to determine other things about the document in the context of the loan overall, and act accordingly. This can include evaluating extracted text, such as dates or data, or the presence of signatures, to determine the most current version of a document when there are multiple copies of the same document in a loan file, extract data from the multiple copies of the same document type, comparing them, and then identifying issues (or certifying the information reconciles just fine!) based on those comparisons. Doing so requires breaking down the lending process into sub-processes of data, documents, business rules, and workflow; and choosing the best fit automation technology for the process. Sometimes, this may also mean combining multiple automation technologies including overall workflow management. Let’s look at three home

lending examples of this in action where machine learning and robotic process automation can support a better borrower experience and accelerate loan processes while improving quality … Example #1: Assessing information As borrowers upload documents, closing companies exchange information, correspondents or brokers deliver packages, servicers exchange documents with other servicers or service providers—AI and Robotic Process Automation (RPA) can determine what the received documents are, how many versions have been received, and what data is useful from those documents. Example #2: Making decisions Home lending is a series of data validation tasks comparing many data sources and reconciling them to use in a final credit and collateral evaluation. With AI and RPA, you can automate much of the data to data, data to document, and document to document comparisons; and evaluate those results with decision logic against different requirements—whether you are an originator, evaluator, buyer or seller of mortgage loans. Example #3: Driving actions As AI is making decisions for you and RPA is executing the results of those decisions, keep in mind where these results can be used

to trigger other processes with customers and business partners. This may include sending borrowers updated documents, re-underwriting the loan based on updated information, logging final approval for closing based on a reconciled Closing Disclosure or funding request, returning feedback to a broker or correspondent, or finalizing loan data delivery to secondary market partners. Automation will take the noise out of the lending process by streamlining processes. Creating these digitally-repeatable processes will eliminate manual errors and provide auditable, transparent workflows, making compliance elements more transparent and easier to examine. Leveraging AI automation tools, lenders can handle increasing amounts of data, under tight deadlines, faster and with higher quality results. Using automation technologies designed for lending, lenders can handle increasing amounts of data, under tight deadlines, faster and with higher quality results.

Takeaway tips 1. Pick the right technology for your needs. There are many Optical Character Recognition (OCR) options available to assist in the automation of mortgage loan processing; to quickly understand an OCR technology and its capabilities, do a blind test with numerous sample files. 2. Similarly, plan for how you are going to make that data actionable by considering your business rules engine needs and how you will manage robotic process automation configurations. There are many ways to use supervised machine learning in lending, and the value increases in how you use it with robotic process automation to support a full multi-step process flow. 3. Select technology that can be easily implemented and modified to add other workflows, because when you begin to automate, the number of possibilities rapidly expands.

Gregg Lehman is a senior product manager with Fiserv who has designed and managed the development of a variety of enterprise content management (ECM) and business process automation solutions for financial institutions over the past 17 years. Gregg works in the Financial Risk & Management Division within Fiserv. He may be reached by phone at (407) 514-3742 or e-mail Gregg.Lehman@Fiserv.com. Kim Weaver works in the Financial Risk & Management Division within Fiserv, where she is director of product strategy and client delivery. She has been in the lending industry for more than 20 years. She may be reached by phone at (703) 298-2169 or e-mail Kim.Weaver@Fiserv.com.

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

M A G A Z I N E â&#x20AC;&#x2122; S

Mortgage Professional of the Month

NAMB President Richard Bettencourt, CRMS National VA Sales Leader & Branch Manager, Mortgage Network Inc. By Phil Hall

ichard Bettencourt, CRMS is national VA sales leader and branch manager with Mortgage Network Inc. in Danvers, Mass., and is the current president of national trade association, NAMB. In this edition of NMP’s Mortgage Professional of the Month, we spend time with Rick to learn about his career in the industry and his work at the helm of the leading trade association for mortgage professionals. In addition to Rick’s extensive work on behalf of mortgage professionals at the helm of NAMB, his passion for serving our military servicemembers and veterans shines through as national VA sales leader with Mortgage Network Inc. As an advocate for our veterans, Rick is featured in the weekly Mortgage News Network (MNN) “Homeownership Heroes” series, sponsored by Caliber Home Loans. “Homeownership Heroes” was created to help the mortgage profession learn more about helping servicemembers and veterans achieve the American dream of homeownership.

How did you first get involved in the mortgage profession? Was this your original career choice? No, I was in the environmental remediation business and have a Bachelor’s of Science in Water Research Management from the University of New Hampshire. I was introduced to the mortgage business by my wife, as her sister was married to a mortgage broker in Connecticut. In 2002, I decided to make a career switch and went into business with my brother-inlaw. Your career switch seemed dramatic. How did you make the leap? I had a lot of help. My brother-inlaw had his own shop in Connecticut, and I became the managing partner up here (in Massachusetts). It takes time and I needed to pay very close attention to guidelines and compliance, and I learned to work with the Massachusetts Division of Banks. I got involved with NAMB in 2008, and that helped a lot to educate

“NAMB is in an incredible state right now, with an unbelievable growth in membership: Up 24 percent over the last six months, and the number of Industry Partners exceeds our budgetary projections.”

me on the multifaceted nature of our industry. How did you wind up at Mortgage Network Inc.? My brother-in-law and I ran our business, Mortgage Assistance Company, through June 2012. It was just time to give something else a try. The owner of Mortgage Network, Bob McGuinness, is one of the most passionate people I’ve had the honor of meeting, and his corporate philosophy appealed to me. Mortgage Network is a nondepository that operates in about 25 states, with locations up and down the East Coast. We originate between $2.2 billion and $2.6 billion each year. I get recruited all of the time, but I love it here! You hold NAMB’s Certified Veteran Loan Specialist (CVLS) certification and have become nationally-known as an expert in VA lending and working with military personnel and veterans. What attracted you to that particular market? When I was growing up, all I wanted to do was become a soldier. I got recruited to play football and baseball at the U.S. Air Force Academy, but I couldn’t get in because I had asthma. I tried to enlist into the Army in May of 1998, but my again, my asthma kept me out. My family has a military lineage going back to World War II, when my grandfather was part of the battalion that liberated Rome. When I got into the mortgage business, I wanted to help serve veterans, who were an

underserved demographic in the home loan world. Before 2007, the origination levels for VA loans were really low, but since 2007, VA loan origination has increased by 545 percent. I have built my business to a point where 84 percent is focused on helping military veterans. You mentioned NAMB earlier. You are now the president of that organization. What was the route that led you to your role as president of the association? Denise Leonard, my mentor, was the executive director of the Massachusetts Mortgage Association (MMA), which used to be the NAMB affiliate in the state, but has since disbanded. She was the Government Affairs Chair for NAMB. I was on the Board of Directors for MMA, and she thought that I should get involved with NAMB and lobby for the industry because of how much I love the business. I attended a Legislative & Regulatory Conference in Washington, D.C. and got the bug. I loved listening to people and understanding how the legislative and regulatory complexities impacted our business. I attended my second Legislative & Regulatory Conference the following year. I was nominated for a position on the NAMB Board of Directors in 2009. Can you tell us about your work as NAMB president? I took office on Oct. 1, 2018, and my term runs through Sept. 30, 2019. On a slow day, I spend two hours working as NAMB president,

going through e-mails, follow-up conversations with the directors. On a busy day, I put in between three to six hours per day on top of my regular day. The work is not office-related, and many of our directors are on the West Coast. I’ll make phone calls at 9:00 p.m. my time, which would be 6:00 p.m. Pacific Time. It is a big commitment of time. During April, I spent approximately 15 days out of 30 on the road for NAMB. Now, I am planning one trip per month that lasts between two and five days. I recently traveled to the Legislative & Regulatory Conference in D.C., the VA Lenders Conference in San Antonio, the Iowa NAMB show, and two events in Dallas and Arizona. I am scheduling trips to California, Alabama, Philadelphia, Connecticut and maybe Tennessee. During these trips, I focus on membership development, regulatory updates and chapter growth. What is the state of NAMB today? NAMB is in an incredible state right now, with an unbelievable growth in membership: Up 24 percent over the last six months, and the number of Industry Partners exceeds our budgetary projections. And the big news for us was having NAMB at the White House to meet with Health and Human Services officials about our association’s health plan. That was the first time NAMB was invited to the White House, and we were the only national mortgage association at that meeting. Moving forward, what do you hope to accomplish during the remainder of your term as president of NAMB? There are a couple of things … First is the development of the NAMB New England Chapter. We just announced its creation. Mortgage brokers do not have a lot of state-level support in Maine, New Hampshire, Rhode Island and Massachusetts–Connecticut has its own association and we didn’t want to be in the business of taking away business. I am looking continued on page 77

HEARD ON THE STREET continued from page 48

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Scott Frommert as chief financial officer. Frommert, who has 12 years of mortgage banking experience, will be working in several key areas with the company. Secure Insight has announced the expansion of its sales force, with the hiring of Jim Reynolds, former senior managing director at RiskSpan and former SVP at CoreLogic as national sales director, and Bill Young, former strategic account executive at CoreLogic, as East Coast regional sales manager. Visionet Systems Inc. has announced the addition of Martin Foster, a mortgage servicing leader with 35 years of industry experience, as senior vice president, consumer lending. Equity Prime Mortgage has announced the addition of Ed Jeffry as the Legacy Division’s newest regional vice president of sales. Jeffry will draw on his 20-plus years of lending experience to serve the Northern California market. Gateway Mortgage Group has announced that Gerald Buckley has been named digital marketing executive, where he will be responsible for driving implementation, operationalization and ongoing delivery of Gateway’s digital channel strategy. The Federal Housing Finance Agency (FHFA) has announced that Clinton Jones, Lynn Fisher and Matt Grinney will join the Agency, as Jones has been named Senior Advisor for Legal Affairs and Policy, Fisher will serve as Senior Advisor for Economics, and Grinney will be a Senior Communications and Policy Advisor. BSI Financial Services has added three new members to its management team to fill roles that are key to its growth strategy, including Jean-Marc Eichner as senior vice president of loan services, Adam Rider as vice president of accounting, while Natalie Owens as has been promoted to director of business development. Costa Mesa, Calif.-based Royal Pacific Funding has named Dina Barreras as

regional sales manager. Barreras has joined the team to lead the company’s growth in new markets nationwide. Gateway First Bank has named Bruce Schultz as its vice president and Community Reinvestment Act (CRA) officer, a new position at Gateway First Bank. New York City-based SLK Global Solutions, a business process transformation enterprise provider, has named Nate Johnson as its new senior vice presidentmortgage business leader. Blue Water Financial Technologies has announced that it has added Joseph A. Grimes III to its Advisory Board as a senior advisor. WFG National Title Insurance Company (WFG) has announced that Brandon Baker has been named new president of the company’s Dallas-Fort Worth division, where he will manage the day-to-day administrative operations for the DFW market, including working with the WFG team to establish short and long-term goals, plans and strategies. The Mortgage Bankers Association (MBA) has announced that Ernie Jolly has joined the association as associate vice president of legislative affairs. In this role, he will be responsible for advocating on behalf of MBA’s legislative and policy priorities on Capitol Hill, with a primary focus on Democratic members of the U.S. House of Representatives.

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.

LEGENDS OF LENDING continued from page 47

time if he will sell the company and his answer is always a firm: “No.” If you could sum up Calyx Software in one word, what would that be? Bob Dougherty: “Credible.” We’ve been around almost 30 years. You don’t stay in the mortgage business and retain a substantial market share without being credible. As we tell our customers, “Your success is our success.” Ben Wu: “Reliable.” Our customers and vendor partners, and even our competitors, acknowledge this. We have a consistency in how we value and

serve our customers–we are available to any user for software support. Individual users can call us at any time and talk to a live person. Patrice Power: I would mirror “reliable” as a key descriptor. We talked to many of our customers in the rebranding effort and reliability and customer satisfaction were common responses. Our customers rely on our businesscritical software to run their businesses, rely on our free user support, and rely on our company to continue to be here for them as we have been for almost 30 years as they grow and evolve.

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

THE BECKWITH BLOG continued from page 49

The lesson here is in not holding back, and no, I am not trying to throw any fuel onto a bad fire. But make no mistake, I am lighting fires … in folks! And I will continue to ignite people into lean mean expert fighting machines. The question is … will you?

Christine Beckwith is a 30-year mortgage industry veteran who has broken many glass ceilings and has blazed a trail for many female professionals to come. Christine is currently president and chief operating officer of 20/20 Vision for Success Coaching and Consulting, a decorated, sought after and award-winning leader. Christine may be reached by e-mail at Christine@VisionYourSuccess.net.

n National Mortgage Professional Magazine n JUNE 2019

be afraid to shine. Yes, I said “shine.” If you are afraid to selfpromote your business, you might as well not enter the race because everyone else is going to take your prize and market share while you sit and worry about the locker room banter and the guy who you know is going to give you a hard time for doing so. I would ask you, are you trying to pay his or her mortgage or yours? Let’s go! In summary, ask yourself two questions: l Are you willing to fight for market share? l Are you an expert in our field, and if you are, then why aren’t you waving your flag authentically and waving it proudly?

NationalMortgageProfessional.com

company from social? I would say yes! Consumers have a big job to do in finding experts in our mortgage loan origination and real estate world, because everyone is an expert today according to their resumes and profiles. Exactly HOW do you show up as an expert and then back it up and prove it? The pros know, and they are converting that into business and THAT is where they are accelerating. Here’s the thing about saying you’re something you aren’t: You can’t quite get there. Can’t quite get to that ultimate authentic marketing or advertisement. We see the words coming out of your mouths, but is it believable? I say it’s not if you are not what you say, and I feel like I am an “expert” (pun intended) on telling the difference between the two. As an expert in anything in our field, you MUST truly shine as one, be believable and strut your stuff. Market the hell out of what you’re an expert at and USE a technique a FAKE can’t … testimonials! Bring the good word forward. You can’t

Independent Mortgage Originators By Andy W. Harris, CRMS

Phoenix Mortgage Brokers/ Nick Heth Company NMLS#: 222465 Personal NMLS#: 1800544 PMBLoan.com

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his month, we had a chance to chat with Nick Heth, broker/owner of Phoenix Mortgage Brokers in Phoenix, Ariz. A graduate of the University of Minnesota with a BA in Communications Studies, Nick began his career in the financial services industry in 2003 as an account manager at CitiBank. Nick has served a number of roles in his journey to broker/owner at Phoenix Mortgage Brokers, including time with Guaranteed Rate, People’s Mortgage Company and EverBank, among others.

broker, I don’t have to use a processor, so I save time and money. Access to underwriters is as available as when I was “in house.” How would you compare pricing when compared to the mortgage banker world? Wholesale pricing is very competitive. I’m confident that when the local mortgage banker and I are competing, it won’t be on price, because I’m going to win that battle every time. Pricing is very important to me. What are you seeing in your local market on trends, inventory and consumer/real estate agent mortgage education? A week doesn’t go by where a past co-worker of mine reaches out and asks about brokering, or switching to the mortgage broker world. I’ve been letting all my title companies and real estate agents know that they are going to start seeing a lot of companies they have never heard of and it’s going to be okay. When I’m drawing docs with United Wholesale Mortgage (UWM) for example, I try to be proactive with the escrow agent in preparing them for this change.

Nick, tell us a little about yourself and your career. I graduated in 2003 from the University of Minnesota and moved to Phoenix, Ariz. shortly afterwards. I started my career with a broker, as a loan officer in 2004. Like many others, the office I worked for joined a correspondent lender in 2006. Over the years, I’ve worked for a number of different lenders and I’ve even tried working for a true bank with a focus on jumbo loans. Throughout my career, my goal has been to provide the best service and to be relevant to the most borrowers. My focus is on overall value, so it has never been important to me to do the most loans or make the most money per file.

We know the myth as you mentioned of losing control as a mortgage broker is finally being exposed to the market and quite the opposite. What are your experiences on controlling the process? Everyone thinks that you lose control and access with underwriters when becoming a mortgage broker. It is a common misconception that correspondent lenders are able to get agency conditions waived but that was never my experience. The broker world offers more product options—it is easier to match the guidelines to the borrower than trying to match the borrower to the guidelines. The switch can be made extremely quick and your borrower is the one that wins.

We understand you are a broker now after previously working as a banker. What else motivated you to make this change? My business has always been self-generated, and I focused on doing the best I could for my client. Two years ago, I started to wonder whether I should become a mortgage broker. After conversations with my peers and research, I saw that the broker channel was going to offer my clients better rates, quicker turn times and a higher overall quality of service.

What would you say are your best forms of marketing today to generate new business? Right now I’m not having to market very much because my product is superior. Offering below market rates makes client referrals my most effective sales force. Rates get them in the door and quick turn times with early closing makes them raving fans. My best marketing tool is the phone—making calls to past clients or real estate agents to remind them I offer the lowest rates and best overall value.

What would you say so far are the biggest differences you’ve experienced coming from the retail side since you were a broker before? Before making the move, I was concerned that the systems and process would be daunting and the technology would be behind. I couldn’t have been more wrong. I’ve been very impressed with what the wholesale channel has to offer. The over-the-counter, out-of-thebox solutions allow me to be so much faster and provide more value to my clients. Processing causes the most delay. As a mortgage

Are you an Independent Mortgage Broker? Do you have something you’d like to share? Reach out to me at AHarris@VantageMortgageGroup.com for future article considerations. 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.

NEW TO MARKET continued from page 32

MCT Launches Its Trade Auction Manager

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Mortgage Capital Trading Inc. (MCT) has officially launched Trade Auction Manager (TAM) to enable more efficient bidding of TBA mortgage-backed securities used by lenders to hedge their open mortgage pipelines. The browser-based software module is accessible via MCTlive!, the company’s comprehensive capital markets platform. TAM completely digitizes a formerly manual communication process to confirm timesensitive TBA trades that were once largely phone-based. TBA trading, particularly with regional broker-dealers, is the last remaining secondary marketing function that relies on telephone communications, which TAM now successfully automates. MCT developed TAM in collaboration with multiple lender clients and brokerdealers who participated in the testing and successful soft launch in early 2019. With the introduction of TAM, the mortgage industry now has a TBA trading platform that allows broker-dealers to compete for a higher volume of trade requests, while lenders gain thanks to expansion and automation of the competitive bidding process. “TAM is a seismic shift for the mid-sized lender–increasing execution, liquidity and transparency, while connecting them digitally with their regional dealers for the first time,” said Phil Rasori, chief operating officer at MCT. “The initial experience is showing that TAM will deliver a significant enhancement in execution for MCT clients.”

mortgages, home equity loans and home equity lines of credit or HELOCs. The enhanced digital experiences will include simplified applications that can be self-guided or completed in consultation with a U.S. Bank professional, and capable of generating loan approval recommendations within minutes. “Buying and maintaining a home is stressful enough as it is. U.S. Bank saw an opportunity to provide enhanced customer experience by streamlining digital applications for mortgages, home equity loans and HELOCs,” said Lynn Heitman, executive vice president, consumer product and physical asset optimization for U.S. Bank. Any of the applications can be completed on a mobile device, tablet or desktop computer. It takes about 15 minutes to complete a home equity application and 30 minutes for a mortgage application. The simplified applications allow borrowers to upload any required documents, track application status and electronically sign disclosures through a single, secure digital hub. “U.S. Bank is committed to delivering a simpler banking experience, eliminating unnecessary steps and helping customers pursue their financial goals,” said Tom Wind, executive vice president, consumer lending, U.S. Bank. “We want current and prospective homeowners to spend more time enjoying their home with family and friends, and less time on applications and paperwork with their bank.”

MBA’s 2019 Secondary Market

A Report o o those of you reading this Report for the first time … greetings. My name is Tom LaMalfa, and I’ve been doing research in the mortgage banking sector since the late 1970s. The following report was written from 26 interviews I conducted face-to-face with senior mortgage company executives from an equal number of companies in New York City at the MBA National Secondary Market Conference, held May 1922, 2019. The surveys, which are conducted twice annually and have been for over a decade, are designed to capture the facts, thoughts, opinions, attitudes and expectations of two dozen-plus mortgage executives in the hope of capturing the thinking of an industry on a battery of questions concerning their firms and the broader lending community. That’s the goal anyway. Responses to the survey are from a panel of experts assembled over the decades. All are veteran executives at major mortgage companies. Many are former clients, while others are business associates connected through the MBA. This report shares what was learned when 63 questions are put to 26 execs. This survey’s history, purpose, methodology, survey group, questionnaire and sponsor will follow the report of findings. Also included is a brief overview of what I picked up on talking with folks apart from the surveys.

Survey responses Question 1 asked if the executives expect mortgage interest rates to be higher, lower or unchanged at the end of 2019. A large majority, 16, expect no change compared with six who expect higher rates and four expecting rates to decline. Question 2 wanted to know if 2019 will be a better year in terms of aggregate volume compared to last year. A modest majority of four expect a better year this year than in 2018.

Questions 3-7 asked what percentage of their YTD volume was: Purchase, conventional, government-insured, non-agency jumbo and non-QM. The respective shares were 77 percent purchase, 65 percent conventional, 25 percent government-insured, 13 percent non-agency jumbo, and three percent non-QM. The ranges were 60-100 percent, 20-100 percent, 1-80 percent, 0-75 percent, and 0-35 percent, respectively. The modes were 65, 70, 30, five and zero. Question 8 asked if 2019’s production volume was up, down or flat versus 2018’s first four months. Nearly twice as many executives reported higher, rather than lower, volume during this period, while eight others reported unchanged volume. Questions 9-10 wanted to know if FHA and non-QM volumes were expected to grow this year. Only six of 22 expect stronger FHA lending, while nine of 25 expect higher (very modestly higher from a low base) non-QM originations. As for doing more high-LTV and high DTI lending this year than last, Question 11 reported 14 executives responded yes, nine noted no change, and three were doing less. Question 12 wanted to know what percent of their conventional business was more than 80 LTV. The average percentage among the firms was 43 percent, the range was from 15-80 percent. The modes were 20 for banks and 70 for independent mortgage banks (IMBs). Given the responses to Questions 8-12, Question 13 wondered if underwriting standards had drifted lower in recent years. No doubt they have said 21 executives, compared to four who saw no such drift. Question 14 sought each of the 26 firm’s origination volumes for last year. The mean among the 26 firms was $18.4 billion in originations in 2018. The group’s median was $4.8 billion. The median for banks was $3.1 billion and $7.0 billion for IMBs. In how many channels does

your firm produce mortgages, asked Question 15? The average was 2.4. Three of the banks and three of the IMBs were retail-only shops, but four of the IMBs produce in all four channels versus no banks. Question 16 wanted to know if their firms owned and operated a warehouse bank. Of the 26 firms, eight have warehouse operations, while more than twice as many don’t. Questions 17-18 inquired about operating expenses and revenues year over year to date. Were they up or down? Eleven firms reported being up in both expenses and revenues, 10 reported lower expenses, 12 reported higher revenues, and five and three respectively reported no change in expenses or revenues. Question 19 asked if industry profitability would be better in 2019 than it was last year. Here it was a perfect standoff: 13/13. As for overcapacity in the industry, meaning too much supply versus demand, the average for the 26 firms in Question 20 was 16 percent, in a range of zero to 30 percent. The modes were 20 percent for banks and 10 percent for IMBs. Questions 21 and 22 asked about Mortgage Servicing Rights (MSRs)—first whether they are being retained or sold, then what percentage are being sold. Twenty-one of the firms retained some or all of what they produced and/or acquired. Another five of the 26 sold all their servicing. Whether retained or sold, the range was from zero to 100 percent. On average, 42 percent of the MSRs produced or acquired were sold (in one form or another). Interestingly, both banks and independents sold near identical portions, 42 percent and 41 percent, respectively. Questions 23 and 24 asked about Loan Advisor and Day One Certainty. The executives were asked to assess each technology initiative using a scale of 1-10, the higher the number the better. Freddie Mac and Fannie Mae

were nearly identical, 0.1 percent on either side of 7.5. (How surprising is that?) Question 25 inquired about picking priorities—namely which has higher priority at their firms— cost reduction or improving the borrower’s experience. After being told numerous times that the two choices were tough to separate, the breakdown of choices was dead even, with 13 saying cost reduction was paramount and 13 choosing improving the borrower’s experience. Most of the next eight questions dealt directly or indirectly with either Freddie Mac or Fannie Mae. Question 26 asked how the introduction of the Single Security would affect their secondary marketing decisions. It won’t change anything, said 22 execs, with the remaining four indicating its introduction would send more business to Freddie. Questions 27 and 28 wondered which GSE offered better support for third-party originators (TPOs) and then technology innovations. Fannie Mae and Freddie Mac came in nearly even in terms of their support of TPOs, with 12 executives reporting that both GSEs provided them with good support. As for technology innovations, Freddie got three times more nods than Fannie, with eight others suggesting no difference

et Conference Survey Scorecard

of Findings between them. Question 29 asked where most of their firm’s technology budget would go over the next year, among three choices: Loan manufacturing, secondary market or servicing. Loan manufacturing stole the show, capturing 24 of the 26 responses. Question 30 wanted to know if the executives thought the “Black Boxes” of LP and DU should be revealed. Nearly twice as many said don’t open the underwriting systems to public review and scrutiny, than those who favored disclosure. Question 31 asked whether the executives favored further alignment of GSE programs, policies and practices. Here nearly twice as many favored better aligning the GSEs. (The Single Security should assist in this.) Question 32 asked if phone apps were changing the way their firms’ employees interface with Fannie Mae and Freddie Mac. Compared to the number saying yes, more than three times that said no they are not changing the way people connect. Should Fannie and Freddie be consolidated and merged into one firm, asked Question 33. No, said more than five times the number favoring consolidation. Questions 34-35 asked if the executives concurred with FHFA Director Calabria’s desire to privatize Fannie and Freddie. In concurrence they are, with more than twice the number agreeing

than disagreeing with the director on the goal of privatization. Question 35 inquired whether the very, very new FHFA Director was a good choice. He is a good choice said 16 of the 18 responding to the question, while the balance said they weren’t close enough to render an opinion. Question 36 asked if they favored privatization, but leaving the two GSEs separate and independent. Independence is favored by a majority of four, with 15 favoring privatization and independence, and 11 disagreeing with one or both privatization or independence. Question 37 inquired whether the executives favored GSE involvement in the financing of MSRs. No we don’t, said 21 of 25 respondents. Question 38 asked if a new credit scoring model was needed. Not needed, said about twice as many as those favoring a new model. Questions 39 and 40 dealt with the Single Security, specifically if they were looking forward to its debut (in June) and if they thought it would increase the mortgage market’s liquidity. By wide margins, the executives are both looking forward to its advent and think it will further improve liquidity. Questions 41-45 sought grades for each of five

By Tom LaMalfa

agencies based on the executive’s view of the overall performance of each in the past year. Freddie Mac, Fannie Mae, Ginnie Mae and FHFA received grades of B and the FHA received a C grade. As for grades of A, the executives handed out precious few, four to Freddie Mac and three to Fannie Mae. (Tough graders.) Question 46 wondered if their firms’ LOSs were flexible enough to integrate innovations. To determine this, the 1-10 scale was employed. The average response was 5.3, within a range of 1-9 and a mode of seven. Question 47 asked about e-Notes and their use in closings. Not yet was the answer, in which the mode was zero and an average of only 1.6 percent of the group’s business used e-Notes at their closings. Question 48 asked about staff reductions this year. There were cuts in personnel this year at 15 firms, while the other 11 made their reductions in 2018. Question 49 asked the execs if they were surprised that mortgage activity wasn’t even stronger given current (high) employment levels and a still growing economy. Surprised we are said 14 compared to 12 who saw less

inconsistency in the correlation between housing and the economy and therefore were less surprised. Question 50 wanted to know which of three factors was curbing house sales the most: Interest rates, (low) inventories, or affordability. Supply and affordability are clearly the key inhibitors, accounting for all the responses. Interest rates apparently are not the culprit slowing house sales. Market demand is there (thanks in no small part to leverage). Question 51 asked how serious a problem high house prices is on a scale of 1-10. The response garnered an average of 7.5 inside a range of 5-10. The mode was eight for both banks and IMBs. Question 52 asked if house price increases would (again) exceed inflation. Indeed they will, responded nearly three times as many with ayes as nays. And is continued on page 76

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The State of Appraisals and Valuations Streamlining the Appraisal Process for an Enhanced Borrower Experience By Samir Agarwal

uying a new home is a major milestone in a person’s life, but it can also be a highly stressful and emotional time. Because it is often considered such an intimidating process, every step along the way is critically important to the borrower’s overall experience. While timely and compliant loan closings are the goal of any successful lender, sometimes a roadblock or two appears along the mortgage origination journey. When one of these roadblocks does occur in the mortgage process, it’s typically during the appraisal stage. In 2017, the National Association of Realtors (NAR) reported that the appraisal process was responsible for approximately 21 percent of closing delays. But, providing the customer experience that consumers today demand is challenging given the current state of the appraisal industry, which finds itself struggling with manual, duplicative processes and a shortage of appraisers. The question, therefore, is how do mortgage lenders and appraisers come together to improve the quality and speed of the appraisal process for a better customer experience? The answer is to implement technology that streamlines workflow and catalyzes appraiser operations.

You never get a second chance to make a first impression In J.D. Power’s 2016 Primary Mortgage Servicer Satisfaction Study, 63 percent of customers say they would leave their mortgage servicer for a better customer experience. With fewer opportunities for lenders to differentiate themselves based on product and pricing,

mortgage lenders must focus on delivering a better customer experience through improved loan origination turn times to stay competitive. Under traditional methods, the appraisal process can be a long, drawn-out affair. In a typical scenario, the mortgage lender orders a property appraisal after the borrower applies for a loan. From there, the order goes to an individual appraiser or more likely, an appraisal management company (AMC). The AMC finds an individual appraiser to do the work and deliver the appraisal report back to them. The AMC then sends the report to the lender, who shares it with the borrower. In fact, the average appraisal order has between eight and 12 manual touch points, including contacting multiple appraisers to find someone to take the job, following up with status checks, and verifying that the appraisal will be completed on time. While banks typically set the due date for the appraisal, this step doesn’t guarantee that the deadline will be met. Because of the sheer number of appraisals being ordered as well as the shortage of qualified, licensed appraisers, it is becoming increasingly difficult to obtain an appraisal in a timely manner. And, when coupled with today’s complex regulatory rules and frequent requests for additional information, appraisal wait times can go from days to weeks. As a result, the original date must be modified which, in turn, creates a delay with the closing. In response to these delays, Fannie Mae and Freddie Mac in 2018 began accepting home purchase loans that carry no formal property appraisal. However, these loans are only for highly select properties with previous appraisals on file, and for deals where homebuyers continued on page 62

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streamlining the appraisal process

were making a sizable downpayment of 20 percent or more. Although this option is popular with some lenders because it not only saves time and moneyâ&#x20AC;&#x201D;but leads to shorter interest-rate locks and quicker closingsâ&#x20AC;&#x201D;appraisers contend that it places undue risk on the housing market. All of these challenges put lenders in a difficult position. Their desire to shorten turn times and decrease operational costs directly conflicts with the importance of providing accurate collateral valuation. Long appraisal wait times also negatively impact the customer experience, resulting in lost referral business and lower loan pull-through rates.

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regulatory change, technical development, or the evolving preferences of customers. The appraisal industry is no different. It has experienced significant change in recent years and appraisers continue to face demands to perform more appraisals, faster. Since cutting corners on collateral valuation isnâ&#x20AC;&#x2122;t an option, the best place to save time in the appraisal process is by revolutionizing the workflow using technology. The bottom line is that appraisers canâ&#x20AC;&#x2122;t keep doing what theyâ&#x20AC;&#x2122;ve always done and expect to stay relevant. Delivering timely and accurate appraisal services to lenders and borrowers today requires automation. The end results are greater efficiency and transparency throughout the appraisal process, leading to increased confidence that a mortgage loan will be funded on time. Appraisers who embrace modernization are able to use

The move toward automation Every industry goes through a transformational period at some point, whether itâ&#x20AC;&#x2122;s incited by 62

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their time more effectively and bring their customers more accurate valuation reports, faster turnaround times, and a better experience overall. While some worry that technology might replace appraisers, thatâ&#x20AC;&#x2122;s not the case. The value of having a qualified appraiser actually walk the property cannot be ignored given that accurate valuations depend on current physical state attributes, which may significantly differ from stale data repositories. To quote from an appraiser mentioned in the Washington Post in May 2018, â&#x20AC;&#x153;Computer programs cannot smell 20 cats living at the property or spot other valuedepressing conditions or severe, deferred maintenance.â&#x20AC;? Instead, utilizing modern communication and tracking methods to complete appraisals faster and more accurately will benefit all parties and suppliers in the lending process in several ways. First, technology provides lenders with an avenue to offer more competitively priced products to consumers and create adjacent business relationships with them. In addition, appraisers will find themselves with less re-work to do, giving them the opportunity to complete more appraisals and grow their businesses. And, most importantly, consumers benefit from a transparent lending process that enables them to walk away from the experience feeling positive and gratified. The next generation of appraisers As previously mentioned, there

is currently a shortage of qualified, licensed appraisers. With the average age of appraisers in their late 50â&#x20AC;&#x2122;s and getting older, the Appraisals Qualifications Board of the Appraisal Foundation recently reduced the requirements necessary for certification. Some of the reductions include lowering the amount of college hours from 30 to zero, as well as the amount of time needed for field training. These changes were the result of a three-year process and became effective in May 2018, with the goal of making the industry more attractive to a younger generation of appraisers. Conclusion Customer experience is the greatest differentiator in an increasingly competitive mortgage market. The modernization of the appraisal fulfillment process creates a lasting benefit for borrowers, lenders and appraisers. Lenders have the opportunity to offer more competitive products and shape the mortgage origination journey into one that enables borrowers to feel more empowered through all stages of the lending process. And, appraisers are able to maximize their capacity while increasing the volume and quality of their work. Technology plays such a major role in almost every transaction in consumersâ&#x20AC;&#x2122; lives. It should be no different when it comes to more complex transactions, such as buying a home. The marriage of technical capability and human expertise is the best recipe for lenders to provide the highest levels of customer experience.

O focused on quality & closing speed Operations Marketing support and lead generation M Liicensing and compliance support Agent co-marketing programs Contact me to learn more m about b t exp xpanding di g you urr b business i and career with Carrington.

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ÂŠ 2007-2019 Carrington Mortg t gage Servvices, LLC C headquartered at 1600 S. Doug uglass R Rd., Suites 110 & 200A, Anaheim, CA C A 92806. 888-267-0584. NMLS ID #2 #2600. Nationwide Mortg t gag age Licensing ng Sy System t (NMLS) S) Consumer Access website: www.nmlsconsumera access.org r g. All rig i g hts reserved. EQUAL OPPO ORTUNITY EMPLOYER

Samir Agarwal is vice president of the community bank and credit union segment in the Compliance Solutions Business Unit at Wolters Kluwer. He is focused on helping banking institutions with less than $10 billion in assets navigate risk management and compliance decisions to grow their business using Wolters Kluwer solutions. Prior to joining Wolters Kluwer, Agarwal was an executive director at JPMorgan Chase He can be reached by e-mail at Samir.Agarwal@WoltersKluwer.com.

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Disagreeing With the Appraiser: Tips for Staying Compliant While Making Your Case By Adam Johnston, SRA, AI-RRS he home appraisal has been requested … the waiting begins. As a lender, many questions race through your mind: “Will the property condition be acceptable? Will repairs be needed? Will the appraiser give credit for all the upgrades in the home? Is the appraiser familiar with the neighborhood? Will the appraiser use good comparables? Will the appraised value be sufficient for the loan?” It is not difficult to guess what you are thinking. If I have questions, what am I allowed to ask? Will I be seen as overstepping the law? Mortgage lenders often struggle with confidence in knowing where their boundaries are when communicating with their appraiser. This leaves the ultimate question lingering in your mind: “When does communication go too far and when does it not go far enough?” Let’s walk through tips and pointers to help guide you through the do’s and don’ts of communicating with an appraiser, along with tips on how to support your argument when appealing an appraisal.

l Provide further detail, substantiation or explanation for the appraiser’s value conclusion. l Correct errors in the appraisal report.

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Communicating with the appraiser: Do’s and don’ts While in most cases, real estate appraisers know what qualities to look for in their business relationships, they occasionally can experience situations where they are unfairly and perhaps unexpectedly pressured by those involved in a mortgage transaction. This can include improper influence to inflate the appraised value, overlook repair items, misstate facts, ignore or conceal external influences, and misrepresent market conditions. Because of this reality, many laws and regulations have been enacted over the past 10 years to discourage improper communication with the appraiser. The Truth-in-Lending Act (TILA) contains rules addressing appraiser independence. Similar rules, laws and regulations have been issued by state legislatures, secondary market entities and banking regulators. The broad

Since appraisers are imperfect and operating in markets with imperfections, it is appropriate for mortgage lenders to ask legitimate questions of the appraiser and present additional appropriate information for the appraiser’s consideration, when needed. As a side note, appraisers remain responsible for complying with the confidentiality requirements of the Uniform Standards of Professional Appraisal Practice (USPAP). For this reason, if you are not the client, or employed by the client of the appraisal report, the appraiser will politely decline to discuss the appraisal with you.

“While in most cases, real estate appraisers know what qualities to look for in their business relationships, they occasionally can experience situations where they are unfairly and perhaps unexpectedly pressured by those involved in a mortgage transaction.” theme to these laws, rules and regulations is an expectation that the appraiser is protected from improper influence and can conduct the appraisal as an independent, objective third party. Actions that are commonly listed as violations of appraiser independence include: l Causing or attempting to cause the value assigned to the property to be based on a factor other than the independent judgment of that appraiser. l Pressuring the appraiser to mischaracterize the property or appraised value. l Seeking to influence an appraiser or otherwise encourage a targeted value in order to facilitate the making or pricing of the transaction. l Withholding or threatening to withhold timely payment for an appraisal report or appraisal

A few basics Before we dive into tips and tricks for disputing an appraisal, let’s level-set with a few foundational concepts and terms.

l Market value: In a mortgage appraisal, the appraiser is most likely estimating the market value of the property. Market value has some key elements services rendered when the that we must understand. appraisal report or services are Market value is the most provided in accordance with probable price a property the contract between the should bring in a competitive, parties. open market. Buyer and seller are typically motivated. Both For most, the bulleted points parties are well-informed or are seen as common sense, well-advised and each acting in however, violations of appraiser their own best interest. The independence still occur with property is exposed to the open disturbing regularity. market for a reasonable time. On the flip side, mortgage Payment is made in terms of lenders must be allowed to have cash; and the price represents healthy, productive and open lines normal consideration for the of communication with their property sold unaffected by appraiser. Serving as a nod to this special or creative financing or reality, appraiser independence sales concessions. rules give mortgage lenders the l Appraisal inspection: A typical ability to request that an on-site inspection of the subject appraiser: involves the appraiser walking through the dwelling, examining l Consider additional, the site improvements, and appropriate property walking a representative portion information, including of the land. An appraiser’s information regarding additional inspection is comparable to the comparable properties to make level of observation conducted or support an appraisal. by a typical buyer. For example,

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a typical buyer spends less than 30 minutes in the house and less than 60 minutes at the property. The appraiser is looking at the physical characteristics of the property, including: Gross living area (heated/cooled above grade size of the home), quality of construction, condition of improvements, layout, features/amenities, design/appeal, landscape, view, site characteristics (e.g. topography, access, improvements), and external characteristics (land uses, neighborhood, street, traffic, etc.). Now that we have addressed some basics, let’s examine the process for disputing an appraisal.

Finding your own comps The following list is a general guide for a lender to use when searching for, or considering, the suitability of additional sales to send to the appraiser for consideration. Although this list is not all-inclusive or applicable to every property/market, it may serve as a useful guide for you and your borrowers and help avoid the risks of sending appraisers irrelevant or inappropriate information: l Location: Sales located in the same subdivision and having similar influence (view, traffic level, etc.). If not a subdivision, sales should be in the same market area. l Age of sale date: Sales within 12 months. l Lot size: Sales within 30 percent of the lot size, or if acreage, sales with similar size appeal/usefulness. l Design style: Sales with similar overall design and appeal. l Age: Sales within five years for homes less than 15-years-old and sales within 15 years for

homes greater than 15 years. l Condition and quality: Sales with similar overall condition, features and quality. l Room count: Sales with similar bedroom and bath count. l Gross living area (size of heated/cooled area): Sales within 20 percent of the above grade gross living area. l Other items: Sales with similar foundation types (basement, crawl, slab), garage storage, topography, etc. In sum, the appraiser and lender or appraisal management company (AMC) should have healthy, open, and compliant conversations, as these are vital to building trust, quality and executing excellent customer service. If we operate with courtesy and mutual respect for each other’s roles, dynamics and challenges, we’ll be able to develop stronger working relationships and serve borrowers more efficiently and accurately. The statements in this article are solely the opinions of Adam Johnston and do not necessarily reflect the views of Genworth or its management.

Adam Johnston, SRA, AI-RRS, is director, operations and chief appraiser for Genworth Financial’s U.S. mortgage insurance business. In addition to his 25 years of appraisal experience, Johnston is a former police officer and served in the United States Marine Corps. A Certified Residential Appraiser in several states, Adam is a designated member of the Appraisal Institute, with the SRA and AI-RRS designations.

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What you should do … l Prepare a list of material discrepancies between your information and the information in the appraisal report pertaining to your property characteristics. l Point out any material concerns with the comparable sales used by the appraiser (e.g. sales were outside the neighborhood; sales were all much older; sales are on a busy street, etc.). l Look up the appraiser’s comparable sales in tax records and online real estate portals (e.g. Realtor.com; redfin.com), look at pictures and physical characteristics, note any

Be sure to avoid … l Assuming the appraiser is wrong simply because someone else has a different opinion. l Telling the appraiser you think something is incorrect, instead ask the appraiser a question. l Forwarding additional sales to the appraiser without first checking the sales for relevancy. l Providing additional sales to the appraiser and demanding that they be included in the report. l Demanding or suggesting that the appraised value is wrong, instead focus your questions on the characteristics that lead to the appraised value. l Using free automated valuations to dispute the appraisal. l Exaggerating or sensationalizing the property or focusing on immaterial items.

l Conjecture, assumptions or unsupported conclusions.

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Tips for appealing an appraisal When appealing an appraisal report, it’s important that you remain continually vigilant about appraiser independence. Pay close attention to your words and phrasing. If your communication sounds accusatory, demanding, instructive or presumptive, you may be placing yourself and your employer at risk of violating appraiser independence. It is generally safe to ask questions or submit legitimate information for the appraiser to consider. It’s important that you read the entire appraisal report before contacting the appraiser. In many cases, the answer to your question has likely already been addressed. The following are a few do’s and don’ts to help you stay compliant while increasing the effectiveness of your appeal:

material discrepancies, then point them out. l Be factual and use data/information that the appraiser would likely have or can verify. l Ask questions if you need the appraiser to provide additional explanation or support (the appraiser is obligated to be able to support their opinions and conclusions). l Prepare a list of your comparable sales if they are a market alternative to the subject and explain how these comps compare to the subject property.

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What Technology Cannot Capture By Danielle Chavez

echnology should not be feared by appraisers … it should be embraced. As with all areas of expertise, those who adapt to change and new technology are the ones who survive and thrive. Although over the past couple of decades, experts have predicted the appraiser’s extinction, we aren’t any closer to seeing that occur as we are to seeing President Trump lose his #winning comb over. Technological innovations are meant to enhance appraisal products and help streamline the process. These innovations are not all-knowing, they still require human intervention. This is where the appraiser reveals and displays their true worth. There is an abundance of technology specifically designed to assist real estate appraisers. All of these innovations are designed for a specific function, to meet a specific need: namely, to make the appraiser’s job more efficient and accurate. As it relates to residential appraising, the primary purpose of technology is to expedite the appraisal process, provide consistency, limit errors, promote public trust, track industry trends and track appraiser performance. These technological tools available at our fingertips range from the basic smartphones we use to take photos and use for GPS, to Web sites such as “Google” for aerial maps and neighborhood photos, to appraisal software that automatically populates data into the appraisal report, to appraisal related databases from which we use to pull property information, and so on. Ultimately, all of these tools allow the appraiser to provide a higher quality product in a timely manner, resulting in better customer service and increased credibility. Lenders welcome advances in technology as a means of improving their bottom line. More efficient technology results in closing more loans faster. Also, fewer mistakes, faster turn times, and increased accuracy will result in a positive

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customer experience, which then increases the potential for additional customer referrals, which equals more money for the lender. Appraisers and lenders alike reap the benefits of technology that allows workflow efficiencies by being able to quickly identify some absolute errors, by flagging potential errors, streamlining the review process and promoting reporting consistency. Although technology is beneficial, it will never fully replace the need for human intervention. What technology cannot do is identify recent unpermitted structural changes, such as room additions, garage conversion or modifications. It also cannot determine or identify deferred maintenance, health and safety issues, pest infestation, occupancy, and the presence of smoke and carbon monoxide detectors. It also cannot collect verbal data obtained at the time of inspection, data provided by the property owner, a property management company, neighbors or realtors. Such as with Collateral Underwriter, the technology is only as good as the data provided as of the effective date of the most recent appraisal report. Immediately following the effective date, the data is no longer considered reliable and must still be verified by an individual. As Patrick Walsh stated in his article, “How Technology is Shaping the Appraisal Process and Profession,” on BBG.com, “Automated valuation technologies aren’t meant to replace an appraiser’s experience and judgment, as they in no way reduce the process to a few keystrokes. It’s up to the appraiser to interpret the data and determine which are relevant to a property’s value, and to what extent. Technology enables appraisers to write wellsupported reports faster, with fewer errors and greater confidence. When applied correctly, advanced appraisal technologies can enhance appraisers’ livelihoods and lead to stronger work/life balance.” Here is an example of what technology cannot capture, that

only human invention by an appraiser can effectively and most accurately handle: An appraiser is preparing to drive to their list of potential comparable properties to photograph for an appraisal assignment. According to the technology available to the appraiser, public record databases, MLS, Google, etc., there are very few viable comparable sales in the area. There appears to only be one comparable property that is basically a perfect match, all others are either much smaller or larger in gross living area. So, needless to say, the appraiser is really counting on this one perfect match comparable property. Upon arrival at this potential comparable, the twocar garage that public record and MLS shows should be there, is no longer there. What is the appraiser supposed to do, ignore the lack of garage and simply trust the data provided and state in the appraisal report that, “The computer said it has a garage so it must.” Or would the appraiser research the prior transaction to see if the two-car garage was present at that time? We all know the appraiser must verify the unknown data and find out what the status of the garage was as of the last transaction. So, for argument’s sake, let’s say the garage wasn’t there, but all data providers are still showing that it was, so the appraiser reported it as such. Would an automated program call the prior listing agent or the city, to verify the presence of the garage? No, it would not. Collateral Underwriter would flag the comparable property as being materially different than what the appraiser’s peers have reported in other reports. Depending on any other misreported data, the risk score and quality score could also be negatively impacted, causing required corrections be made to

the appraisal report and unnecessary delays on the appraisal and possibly even the complete loan process. In addition to the appraiser’s physical inspection and data collection, the appraiser brings so much more to the appraisal process. There are limits to the knowledge and experience an appraiser can be taught. A person can read a textbook, memorize definitions, understand how to complete a form, but what one learns while out in the field, actually doing the step-by-step work that an appraiser does, is something that can only be learned by personally experiencing it. There are multitudes of situations that arise while completing an appraisal and/or inspection which leave the appraiser scratching their head. However, as these situations occur, the appraiser becomes more and more familiar with how to handle them. Just consider the scenario above, with the two-car garage. The appraiser is taught that all data must be verifiable and if any data is uncertain that the appraiser needs to take appropriate steps to verify the uncertain data. Knowledge and experience is what tells the appraiser what those appropriate steps are. As the appraisal and lending industry continues to evolve, we appraisers need to grow as well or we will be left in the dust. No one knows for certain how long any industry or profession truly has until they are considered obsolete. But until then, if we want to continue doing this job with pride, we must embrace the technology created for better or worse. It’s just like when we were kids, and our parents told us to eat our vegetables. You may not like them, but they’re good for you, they’ll help you grow healthy and strong. Try looking at technology like vegetables … using technology will help us develop healthy and strong appraisal reports, and as long as our reports are healthy and strong, we’ll continue to get work and have fewer opportunities for complaints or negative repercussions.

Danielle Chavez is a staff review appraiser with Mortgage Works LLC, the in-house appraisal management company for Mountain West Financial Inc. She oversees the AMC’s appraiser panel and quality assurance, and has been appraising for more than 15 years in Southern California.

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There’s More Than One Type of Value in Appraising In challenging markets, look for valuation companies that go above and beyond

lbert Einstein once said, “Strive not to be a success, but rather to be of value.” It certainly sounds like great advice to me. Personally and professionally—and whether we realize it or not—we are all measured by the value we bring to a relationship. But what does “value” really mean? In the appraisal industry, we’re used to dealing with a more clinical definition of “value.” Being “of value” is different. In my opinion, being of value involves determining what other people need and finding a way to fill those needs in a unique and compelling way. In today’s challenging housing market, there are plenty of opportunities for appraisal companies to provide more value to the lenders and mortgage professionals they serve. This article highlights several new ways in which today’s appraisal companies are going the extra mile “Appraisals will always be a key step in the mortgage process. Yet for their clients. They include new technologies or new procedures they have a track record of being the one step where things are most designed to eliminate delays, achieve likely to go awry, which frequently results in frustrating delays and greater efficiency or simply provide missed expectations.” lenders and mortgage professionals with greater peace of mind. And each of them, I feel, exemplifies Einstein’s appointment is just one aspect of platforms that bring together all of definition of value. the entire valuation process. the details of the assignment and Because every appraisal involves the different parties in one place. Getting appointments right multiple moving parts and Appraisals will always be a key step These tools enable appraisal deadlines, there are many other companies to share details about in the mortgage process. Yet they have a track record of being the one the appraiser too, so that the home aspects to ordering and securing appraisals that can be improved. seller knows that the person step where things are most likely to Another way some appraisal showing up to inspect their home go awry, which frequently results in companies add value is by truly belongs there. frustrating delays and missed continuously improving the appraisal Such platforms make it infinitely expectations. And scheduling the process—in some cases completely easier to remove obstacles to a appraisal appointment is often the reengineering appraisals from start successful appointment and give biggest source of trouble. to finish. every party a single point of Setting appraisal appointments Many of the current problems contact to verify appointment typically involves coordination with securing appraisals can be details, as well as what to expect between multiple parties, including traced to traditional ways of doing when the appraiser visits the buyers, sellers, real estate agents things that were once considered property. Say, for instance, the and, of course, the appraiser. In normal, but have since become appraiser has trouble gaining most cases, there are a lot of outdated. For example, it used to be access to a subject property. The questions and communications to common for appraisal management appraiser can easily look up and juggle, involving access to the companies to assign work manually, property, the timing of the inspection contact the listing agent to solve which frequently created delays this problem. By putting all of the and making sure the appointment between the time an appraisal order appointment details in one place, goes smoothly. is received and the appraisal appraisal companies are able to Thankfully, new technologies appointment is made. This method reduce miscommunications that make it possible to make the is no longer sufficient nor practical. appointment-setting process more too frequently end in delays and Today, forward-thinking appraisal transparent and efficient than in the missed appointments. management companies are past. Today, it’s possible for contacting listing agents mortgage loan officers to track the New ways to keep immediately after receiving an things moving status of their client’s appraisal appraisal order to set up an Of course, setting the appraisal appointment through online

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By Clint Reinhardt

inspection appointment. That seems like a no-brainer, but not every AMC has built-in, proactive communication protocols to ensure that every appraisal, once ordered, is less likely to experience unexpected surprises that can result in costly delays. Another way to add value, as simple as it may seem, is to make sure that when someone calls to inquire about the status of an appraisal report, that person is able to speak to someone who can give them a direct answer. In fact, one of the biggest complaints we’ve heard from mortgage professionals is that there was no one to talk to when they had questions about a particular report. Too often, mortgage professionals and their borrowers are left wondering why an appraisal report did not line up with a free property value estimate that they found online. When they call the appraisal company to find out why, they are sent to an automated phone tree that ultimately leaves them without an answer to their question. Call me old-fashioned, but I believe anyone who orders an appraisal has a right to ask questions about it—not to influence the opinion of value, but to simply understand how the value was produced. To be sure, some appraisal delays are nobody’s fault. There could be an unseen issue with the property that no one knew about, which can affect the availability of financing, the closing date, or both. Even if a report’s timing is uncertain, an AMC should at least be able to explain what’s going on with the appraisal and the steps they are taking to keep the process on track. Some companies don’t do this very well, but the ones that do are obviously keepers. Giving lenders more control Another way some appraisal management companies are providing more value is by leveraging technology to give mortgage lenders greater control over the appraisal process. In a highly competitive purchase market like the one we are experiencing today, we’ve found lenders have a huge need for a faster, more convenient and more cost-effective means of securing both traditional appraisals and other valuation

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products and services as well. The more innovative AMC’s out there have created new appraisalordering technologies that give lenders a single point of contact for ordering and receiving a wide range of valuation products and services. For example, our own appraisal ordering technology, PropertyRx, handles all types of valuation orders, from property condition assessments (PCAs), to automated valuation models (AVMs), desktop appraisals and traditional appraisals. Certain products can be completed in as little as 24 hours. The beauty of these platforms is that they enable mortgage companies to build a cascade of valuation solutions that meet their specific business rules and requirements. Such platforms can be accessed in a variety of ways, either through a client-facing website or through a direct, system-to-system integration with the lender. In our own experience, we’ve found that lenders that choose to go this route have realized significant gains in productivity without having to sacrifice appraisal quality or compliance.

Easing compliance concerns Speaking of compliance, today’s lenders must deal with an increasing number of appraisalrelated requirements, from appraiser independence under Dodd-Frank to new rules that make them responsible for the activities of their third-party vendors. Because of these challenges, lenders could use extra confidence that their appraisal partners will keep them compliant. In response, more appraisal companies have built new guidelines and firewalls into their processes that ensure the assigned appraiser is qualified and that the information in the appraiser’s report was collected objectively and not misrepresented in any way. At a minimum, these processes should include validating an appraiser’s qualifications before and after every assignment, which includes ensuring the appraiser’s license is up-to-date and the appraiser has the appropriate insurance coverage. Another way appraisers can help relieve some of the compliance burdens lenders face is by making sure that every assigned appraiser is

knowledgeable about the market where a subject property is located. This is a very real concern in areas that are experiencing a shortage of available appraisers. Appraisal companies can go a long way toward relieving this concern by simply documenting where an appraiser’s office is located and noting its proximity to the subject property. I’ve detailed a number of ways that some appraisal companies, but not all, are providing additional value to lenders and mortgage professionals in today’s market. One common thread among them is innovation—taking old ways of doing things and finding a new, better way to do them. Indeed, in a world where technology is quickly transforming the way people live, work and play, constant innovation is a requirement no matter what

line of business you’re in. Unfortunately, not every appraisal company is capable of evolving with the times. To be fair, change has never come easy in an industry as unique and specialized as ours. Many, if not most, appraisal companies simply lack the people, the resources or the courage and conviction to say, “What worked yesterday no longer works today.” But innovative appraisal companies do exist, and they are just as committed to providing value to their customers as they are to delivering accurate opinions of value. Whoever you choose for your appraisal partner, you deserve to ask what they are doing to bring you more value and make your jobs easier. The answers they give you will let you know whether you’re on the right track.

Clint Reinhardt is senior vice president and national sales and marketing manager for Valuation Partners, a national appraisal management company. Clint has more than 25 years of appraisal, mortgage banking and settlement services experience and possesses a thorough knowledge of credit, flood and automated valuation products and services. He can be reached by e-mail at CReinhardt@WilliamFallGroup.com. 69

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Best Practices for Modernizing Appraisal Management and Empowering Borrowers By Paul Doman nnovation is a hot topic among lenders these days. The growing market share of non-bank lenders is putting even more pressure on traditional banks and credit unions to get the digital loan process right, both for their customers and for their own competitive futures. But for the lending industry as a whole, the issue goes beyond a technology fix or pushing the loan process online. It’s about looking at lending with fresh eyes to seek innovations that will transform both the way consumers get loans and the way lenders process loans. In this article, we’ll spotlight three key areas lenders can tap as part of their innovation strategy: Strategic Modernization, Data Security and Borrower Experience.

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70 Strategic modernization In today’s market environment, mortgage lenders must seek out innovative ways to reduce costs, accelerate loan cycle times and provide a best-inclass consumer experience. And they can’t wait for a complete re-design of the loan system. Successful lenders will look for ways to make incremental process and technology changes along the way in support of a broader vision of change. For example, Fannie Mae is piloting an effort to allow waivers on the full appraisal process for some new mortgage loans, a laudable effort that will create expanded demand for bifurcated/desktop appraisals. As part of its appraisal modernization initiative, Fannie Mae has been testing a variety of technologies and methodologies that will both manage collateral risk and make the appraisal component of the process more efficient for lenders, borrowers, appraisers and investors. Bifurcated appraisals go beyond a basic valuation. They deliver a true technology-driven appraisal that incorporates an interior

inspection option, is certified to be compliant for all loan sizes and can fully replace a traditional appraisal for home equity and portfolio mortgage loans. It combines the best of both worlds–technology-driven efficiency with a licensed or certified appraiser quality review. In addition, new mobile technologies leverage crowdsourcing to find the most qualified property inspectors for each local area and then enable the inspector to create a full property inspection report from a mobile device while on site at the property location–greatly improving both turnaround times and accuracy. The business benefits of moving to technology-enabled appraisals are significant– including a better borrower experience, reduced costs, greater efficiency, improved productivity and greater transparency. For lenders, implementing a solution that can both improve efficiency (including lowering loan costs) and make the closing process easier for borrowers seems to be a logical next step for banks and credit unions looking to improve the profitability of mortgage lending operations. Engaging in strategic modernization initiatives across the loan process can help banks, credit union and nonbank lenders better position themselves for growth and success. Data security Digitizing the loan process creates data security risks, though, as the new class of lenders is using third parties to transfer data between frontand back-end systems. Lenders must ensure their systems and vendors, as well as those of their partners, are equally committed to protecting lender and consumer data. The costs and risk associated with compliance can be reduced by automating processes, capturing and

storing data online and implementing strong reporting and e-audit technology. For areas of the mortgage process that are reliant on thirdparty vendors, such as appraisals, lenders should proactively contact vendors to evaluate each vendor’s approach to compliance, their level of commitment to providing audit support and what electronic data they can provide in the event of an audit. Since many audits are unexpected, lenders can lower risk and save a significant amount of time and money by going digital with compliance data and automating internal workflows associated with the audit response process. It’s just one step to consider when choosing a digitization partner, but a critical one. Borrower experience While consumers are using digital channels more and more, according to a J.D. Power Survey just three percent of mortgage customers rely exclusively on digital selfservice channels in the origination process. Though not all customers use digital channels, those who do value speed of contact. Satisfaction

levels decline sharply for each day spent waiting after inquiry for contact from a lender. The services lenders provide in support of a better borrower experience will be a key differentiator in who leads the market in both growth and customer satisfaction. Borrower service needs to be elevated from general support to a more holistic, educational approach that empowers the borrower to make the right loan choices and stay actively engaged throughout the loan lifecycle. Borrowers who feel empowered and engaged are more likely to remain long-term customers. Technology is critical to borrower empowerment. Technologies designed to give the borrower more control throughout the loan process include digital application apps, appraisal scheduling portals, video e-closings and remote notarization. Lenders who make these tools available to borrowers will benefit from greater differentiation in a crowded market. Conclusion Traditional lenders can’t expect to transform their mortgage or home equity line of credit processes overnight. By focusing on near-term technology objectives that fit seamlessly and securely into a long-term vision that respects consumers and their data, they will speed loan originations, save money and satisfy customers.

Paul Doman is president and CEO of Accurate Group (AccurateGroup.com), a nationwide provider of technology-driven appraisal management, title data, compliance and closing solutions whose mission is to help real estate finance professionals deliver business growth.

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The Three T’s of a Strong Appraisal Process By Dennis Creegan s a loan originator, what characteristics do you look for when considering which mortgage lender is the best fit for you and your team? Many would say that innovative technology, the ability to close loans on time, an impressive product variety, and a forward-thinking leadership team are all important traits for a mortgage lending company to have. But many might not consider the importance of the appraisal department–and the appraisal process that the lender has in place. Yet, appraisals play a pivotal role in the home loan process– and can make or break a homebuyer’s ability to secure the mortgage of their choice. While each mortgage lender has slightly different methods when it comes to handling the appraisal process, the exceptional ones always have the three “T’s” in common: Timeliness, Talent and Transparency.

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Timeliness During the loan approval process, timing is everything. A delayed appraisal can be detrimental to the entire process, especially when clients are eager to get into their new home as quickly as possible. To get the process off the ground, the appraisal should be ordered in a timely manner. This is where a qualified, experienced appraisal department comes into play. Quick turnaround times should be essential to your company’s appraisal team. It’s also important for any mortgage lender to work with appraisers who can consistently meet its designated timelines. If, for instance, seven days is set as the deadline for an appraisal–only a few cases of exceeding this timeline should be allowed before the lender might consider removing that appraiser from the roster. It all comes down to this: It’s essential for every mortgage

lender to have a well-defined timeline for the appraisal process. As a loan originator, this is something that can be very helpful to inquire about if and when you decide to make the move to a new company. Talent Understanding the ins and outs of the appraisal process is a “must” for the appraisers your company works with and the appraisal department within your organization. If your company works with an Appraisal Management Company (AMC), there’s little to no contact with the appraisers handling the appraisals for the files you’re working on. If your organization has a roster of appraisers, this presents the opportunity for your appraisal department to work closely with these individuals to ensure that expectations are met. As of the end of 2018, there were slightly more than 78,000 real estate appraisers in the nation, which was a five percent decrease from exactly one year prior–according to the Appraisal Institute. While many appraisers are nearing retirement, the field has many openings for new appraisers to fill. Yet, finding talent in the appraisal industry is not as hard as it may initially seem. Referrals are certainly a good tactic for connecting with reputable appraisers, and your appraisal department should have plenty of experience finding and working with the best appraisers in your area. At Waterstone Mortgage, we have our own panel of approved appraisers. This helps us create a better customer service experience with each appraiser, because we are able to communicate with them on a regular basis. Before adding an appraiser to our roster, we review their work thoroughly. This helps us to build relationships with people who we can trust to complete their work in a thorough and timely manner. Because the appraisal

process is federally regulated, it’s also crucial to have knowledgeable, skilled professionals within your company’s appraisal department. These employees should know how to appropriately handle the appraisal appeal process and should be well-versed in the many details that go into an appraisal decision. The appraisal team should also operate independently from the operations departments to prevent undue influence over appraisal reports. With the right people in place, a mortgage lender is setting itself up for success in terms of creating a streamlined and efficient appraisal process. Transparency Perhaps most importantly, every mortgage lender should have a clearly-defined and transparent process that allows everyone involved in the transaction–the appraiser, client, appraisal department and loan originator–to understand, in real-time, the current status of the appraisal. Of course, technology plays an important role in this transparency. Mortgage lenders can benefit from implementing a technology solution that coordinates the ordering of the appraisal–by putting out the order to a selected list of appraisers. After the first appraiser on the roster receives notice, they should be able to accept or decline the

assignment within the next 24 hours. This is where a proactive appraisal department also comes into play. While the chosen appraiser has 24 business hours to respond, it can be helpful for the appraisal department to follow up with that individual after 12 hours, if the appraiser has yet to accept or decline the assignment. Loan originators should be immediately notified, via technology, when the appraisal has been ordered and when it’s ready. This ensures that everyone stays on the same page and allows the loan process to move forward efficiently. In the situation that the appraisal comes back, and the value isn’t what was expected, every mortgage lender should also have a well-defined process for reconsiderations of value. For instance, the appraisal department may have an outline or overview of additional information that may not have been included in the original appraisal report that could potentially impact the property valuation. Bringing it all together The appraisal is a key component of a real estate transaction … the sooner it’s ordered and received, the sooner the client can move forward with their mortgage loan and homebuying process. With clearly defined timelines, knowledgeable staff, and transparent processes in place, a mortgage lender will be better-equipped to create a positive appraisal experience– and overall loan experience– for their valued clients.

Dennis Creegan is director of mortgage banking finance for WaterStone Bank and manages the Appraisal Department for Waterstone Mortgage Corporation, based in Pewaukee, Wisc. He can be reached by e-mail at DCreegan@WaterstoneMortgage.com.

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What to Consider When Rebutting an Appraisal By Rick Garrie veryone’s been there. The perfect buyer, excellent credit score, low debt, everything is lining up to be a smooth closing. Then the appraisal comes in, and of course, it is lower than expected. The knee-jerk reaction is to find a few sales that sold for more and send them to the appraiser, almost begging for an increase in value. Unfortunately, this is probably the least productive way of rebutting an appraisal. This method gives the appraiser ample opportunity to rebut the sales in very short order, with no change in value. Also, each successive reconsideration provides the chance that the value will change and become less and less. So … how do we combat this? There are several methods that we will discuss shortly, but one of the most important things to remember is to take the time to present relevant, meaningful data for the appraiser to consider. Provide reasoning behind why the information presented is appropriate and make sure the information is accurate. Rebutting an appraisal based on price per square foot is one of the least successful options. This is a method used by real estate agents, lenders and other industry participants, but is not a recognized appraisal method. The reasoning behind this is the inherent flaws that are associated with the price per square foot method. There are two distinct issues found with this method. The first being a Mathematic Principle. The underlying items that contribute value to a property that has no relation to the square footage of the home. For example, a house that is 2,000-square feet with an underlying lot is 10,000-square foot and is worth $100,000. Now take the property next door that is a 1,000-square

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“Often, the appraiser observes the upgrades in a home and has them noted in their work file, but they don’t go into detail in the report outlining all of the upgrades present.”

foot house with a 10,000-square foot lot, and the lot is worth $100,000. When you divide the sales price by the square footage of the property on a 1,000-square foot home, you will have a higher price per square foot because of the additional contributory value of the lot. In the 2,000-square foot example, the price per square foot attributed to the lot would be $50 per square foot. In the 1,000-square foot example, the price per square foot attributed to the lot would be $100 a square foot. Therefore, when you add all the other factors that contribute value, the result will be that the 1,000-square foot property will have a higher price per square foot than the 2,000-square foot property. The other principle is an Economic Principle. The principle of diminishing returns is the Business Principle behind the large box stores like Costco and Sam’s Club. You also see this principle at work in your

everyday life. For example, your favorite local coffee shop where you can buy a small 16ounce coffee at about a dime per ounce for a total of $1.60, but if you buy the large coffee at 32 ounces, the total cost of the coffee will be $3. At this rate, you were paying just more than nine cents per ounce for the same coffee. The same principle holds true for real estate. In a smaller house, more of the area is dedicated to the kitchen, bathrooms, etc. that cost more to build than standard living space. For example, a 2,000-square foot home you have built … now add three feet of width to the home right down the middle, and the house is now 2,400square feet. The additional 400-square feet is strictly living space. The only materials required are a foundation, frame roof, drywall, floor coverings, etc. The square footage that is only living space is the least

expensive to build. In larger homes, more of the area is dedicated to just the living area, resulting in a lower price per square foot. Let’s look at some of the more effective ways to rebut an appraisal. First, physical characteristics Often, when you get the appraisal back, the physical characteristics are something different than what you expected. The living area is different, the number of bedrooms, number of bathrooms, or any other number of items may be different than what you were expecting. When rebutting these characteristics, you need to do a little research. If the living area is not what you expected, take the time to look at the sketch and see if the measurements might be wrong by the appraiser. Appraisers are not infallible, and if there is a mistake, they want to have the opportunity to correct it. If you can point out where the issue may be, the appraiser is much more apt to take a more in-depth look and rectify the problem. It’s just human nature. If you tell someone they are wrong with no basis behind it, their initial reaction is to become defensive. If you note that they may be wrong and show them where the mistake occurred, it is much easier to correct the issue. Similar with the number of bedrooms and bathrooms, if you can look at the sketch and point out where the missing bedroom or bathroom might be, it is much easier for the appraiser to make necessary corrections. Upgrades to the home Often after the submission of the appraisal, a list of upgrades are provided asking for consideration. The only time this is truly relevant is when those upgrades are significantly different from the comparables being utilized. Often, the appraiser observes the upgrades in a home and has them noted in their work file, but they don’t go into detail in the report outlining all of the upgrades present. This is often due to the comparables being used having similar features. If you

on THE STATE OF APPRAISALS AND VALUATIONS a special focus on THE STATE OF

are providing upgrades as a reason to ask the appraiser to reconsider the value, take the time to review the comparables. Note the significant differences. What does the subject have that the comparables do not? What makes the subject better than the comparables used? By taking the time to research and note differences, it may bring the appraiser to a different conclusion than originally stated. Comparables The last item to discuss is the choice of comparables themselves. This is the most relevant and successful way to reconsider value. More so in todayâ&#x20AC;&#x2122;s environment than any other time in the history of appraising, there is more data availableâ&#x20AC;&#x201D;the number of sales, the amount of data concerning those sales, and the availability to the general public is more prevalent than ever before. Even with all of this data, the structure of appraising hasnâ&#x20AC;&#x2122;t significantly changed. Three

comparable sales are still required. In a market where there may be 10 or 20 relevant sales, is it possible that one or two others than the ones chosen may be relevant? The answer is an emphatic, â&#x20AC;&#x153;Yes!â&#x20AC;? How to analyze and present them to the appraiser is key. The biggest mistake made is choosing the three or four highest valued with no context of why they are selected. The appraiser chose the ones they did for a reason, and if you donâ&#x20AC;&#x2122;t give them alternative reasons for using other comparables, there is no reason presented for the appraiser to change their mind. Look at the additional sales and offer why they may be better than the ones used. Maybe the appraiser concentrated on some of the physical aspects of the property, such as trying to stay close to the living area and the number of bedrooms and bathrooms. There may be sales that are slightly more different in some of these

characteristics, but are more proximate sales with more similar locational characteristics and more recent sales. Maybe the appraiser used very recent sales, but the market has been stable, and there are more proximate sales that have more similar physical characteristics to the subject property. That might be an important reason for the

appraiser to consider these additional sales. Whatever the reasons you are submitting the reconsideration, make sure to take the time to make them relevant to the appraiser. Keep it short and to the point. State the material facts of why you disagree. Also, understand that in some instances, the appraiser just may be right.

Rick Garrie, chief valuations officer with United States Appraisals, has more than 20 years of residential valuation experience. His primary role is leading the quality assurance team, assisting appraisers with completing complex assignments, supervises the internal review staff, working with clients and appraisers to mediate appraisal disputes and provides training and guidance on compliance. Before entering the appraisal industry, he spent four years in the United States Air Force. 75

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MBA’S 2019 SCORECARD continued from page 59

now a good time for average (income) consumers to buy a house, Question 53 inquired. It is a good time to buy—unless you’re located on the coast—said more than four times as many as those who disagreed. Question 54 wondered if a mortgage meltdown was expected in the next several years. Nearly three times as many executives said no than yes. Question 55 asked whether the so-called “DTI patch” that expires at year end 2020 should be extended. Yes, it should be said about twice the number thinking it should not be extended. Question 56 wondered if the executives considered that U.S. housing policy has been a success for all Americans the past several decades. More than three times as many thought housing policy has failed at least some Americans. Question 57 inquired if the executives saw banks giving up on mortgage banking. They are not said 16 of 26, compared to nine who thought it looked like banks were quitting or seriously

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downsizing the business. Question 58 asked if more growth was seen for mortgage brokering and wholesale. A super strong majority saw growth ahead versus four doubting Thomases. Question 59 asked if Zillow was expected to “crash and burn” in the next several years. Unlikely, with more than three times as many executives thinking Zillow was on safe ground, not accident prone. Was FHA’s decision to tighten underwriting standards on 18 March a correct and wise decision, asked Question 60? Indeed it was, said 24 executives, with only two dissenters. Question 61 asked if the regulatory environment was largely safe ahead. Five times more executives suggested that the weight of new regulation was past. Was Quicken’s non-investment grade rating (from Moody’s and Standard & Poor’s) on its latest debt issue a surprise, Question 62 asked. It was said 14, while 9 others weren’t especially surprised by the rating. Question 63 sought input on the question of the new

pricing tools the major private mortgage insurance companies were now offering. The new service received an average grade of C+ from the 21 executives who felt they could offer an assessment. Some factors the assessment was based upon were graded higher than others. So there you have it, what I learned from interviewing 26 executives from my panel of experts at last week’s Secondary Market Conference. In the next section, the focus will turn to the purpose, history, methodology, panelists, questions and sponsor of this Survey Report. Finally, a few words about the mood and tone of those I met with, other non-survey conversations, a committee meeting, and two (partial) sessions attended between survey meetings. Survey background This is the 22nd time since 2008 that this survey has been conducted, distributed and published. It is conducted at the MBA National Secondary Market Conference and again each October at the MBA Annual Convention. The survey’s purpose is to ascertain the answers to a broad

array of diverse queries. Questions are largely gathered over the six months preceding the conference. Several others are solicited. Many are always asked. Topics range from production data to business expectations, the GSEs, market issues, risk and more. My meetings were arranged in the weeks before the conference. The individuals interviewed included five presidents, six EVPs, six SVPs and nine VPs. A majority represented capital markets, but others surveyed worked in operations, finance and, of course, production. The survey group consisted of 13 mortgage companies owned by depositories—11 banks and two savings banks—and 13 independently-owned companies. Firm sizes ranged from small (under $1 billion) to gigantic. The IMBs included various forms of ownership: Homebuilder, private, hedge fund, private equity and real estate-owned companies. There are retail-only shops and others operating in two, three or four production channels. Conference takeaways Although doing the surveys took almost every hour of the conference, I attended the Secondary and Capital Markets Committee for the umpteenth time, heard much of Dr.

Mohamed El-Erian’s presentation, and listened to FHFA Director Mark Calabria’s talk. The Committee’s agenda was on priorities at the GSE and Ginnie Mae. MBA President Robert Broeksmit provided an update on the upcoming conference, discussed the arrival of the Uniform Mortgage Backed Securities (UMBS), and talked about what’s on MBA’s plate, especially GSE reform. An update on MSRs was also provided. Dr. El-Erian was brilliant in providing a global perspective on world affairs from a world traveler and renowned economist. He discussed two major turnarounds, one about the change in Fed policy since late 2018 and the other the turn in global growth expectations. Five reasons for the shifts were offered and discussed.

Dr. Calabria outlined his goals at the helm of the agency that oversees the GSEs. He appears to believe that change will come to Fannie and Freddie through a combination of administrative and legislative actions. Unlike the more somber mood at last October’s convention, the spirit at the conference was quite upbeat. After a weak Q4 and first two-and-a-half months in 1Q19, the spring purchase market started popping, encouraged by lower interest rates and modestly larger inventories of houses for sale. Softer mortgage rates also brought back some refinance activity. So, full speed ahead and damn the torpedoes. Hope to see you in Austin for the MBA’s Annual Convention, and thank you Fannie Mae for your sponsorship of this survey.

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

MORTGAGE PROFESSIONAL 77

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that if you have not recovered by now, you are probably not going to recover.

What do you think the future holds for the mortgage broker profession? As someone based in Massachusetts, how do you view I think the future is awesome. The future is great. The future is bright. your regional housing market? How does it compare to the rest I see increased growth in the mortgage broker world, and I hope of the country? that mortgage brokers realize that We could use more inventory. We at the end of the day, as new have a lot of buyers, but not a lot of sellers. Still, rates are good and I shops continue to pop up, we haven’t heard any issues regarding continue to see increased profitability and a sustainable access to credit. Around the U.S., areas experience appreciation and business for a lot of people who are ready to do this work. depreciation differently. I can say Phil Hall is managing editor of National Mortgage Professional Magazine. He may be reached by e-mail at PhilH@MortgageNewsNetwork.com.

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How do you spend your leisure hours? I haven’t had a lot of that since I’ve been NAMB president! I’m a family guy, and I spend time with my wife and daughter at our happy place, a cottage in Maine. I like to go boating and relax on the beach. I also do a lot of fundraising and try to help the veterans in our area.

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forward to developing a great chapter association with NAMB New England. Next is the continuation of our amazing growth in membership and the continued development of our great relationships with our new Industry Partners and technologies. I am also looking forward to the creation of more veteran lending classes. We just had our third one, which I taught in Boston, and I will be teaching another one in Colorado. These help not only our loan officers, but also our veterans.

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How Community Lenders Can Recruit the Best Mortgage Loan Officers By Tracy Marks

s the homebuying season ramps up, now is the time to ensure your financial institution is fully staffed with motivated, successful mortgage loan officers who will take your business to the next level. There are a number of considerations to make when it comes to recruiting the best “fit” people for your work environment, so you’ll need to think in strategic steps as you approach the process and always take your time when it comes to finding the right talent.

Determine what you’re looking for There are two distinct types of loan officers–those who are internally-focused, and those who are externally-focused. Both have their advantages, and you should probably have a mix of both on your team. An internallyfocused loan officer may rely on referrals generated within the branches and not be overly interested in getting out and about generating mortgage production. This type of loan officer will be more likely to seek a base salary with a small (bonus) commission structure. While they may be nervous to dip their toes into a performancebased compensation plan, they have great skills and could become a shining star with a bit of finessing. An externallyfocused loan officer is one who is always on the go, building relationships with agents, builders, insurance agents, CPAs, financial advisors, etc.–they are hungry to thrive and are driven by a commission-based role. Keep in mind that externallyfocused loan officers are vital to your organization as they will help scale your business beyond your four walls and grow market share within the community. Being self-generating and not reliant upon the institution providing referrals, these loan officers may command a higher compensation, and they’re worth it!

Start your search from within Once you’ve determined exactly who it is you’re looking for, it’s time to begin your search. If you’re seeking an internallyfocused loan officer, don’t hesitate to first look within your own office–these are individuals who are already familiar with your business, your clients and have the ability and resources available to become a great loan officer. If you are seeking a “go-getter” in the mortgage industry, don’t hesitate to ask for recommendations from your peers, which we’ll dive into below. Expanding the search outside of your organization Sometimes, finding a diamond in the rough is as simple as asking others in the industry for recommendations. Consider the different individuals and companies you work with on a regular basis to close a mortgage: l Title insurance companies: They work with loan officers from many financial institutions, and therefore, will have a current pulse on the industry and who may be looking for a new opportunity. l Mortgage insurance representatives: They were once considered the human resources recruiters of the mortgage industry. Local mortgage insurance reps may be helpful for introducing you to potential loan officer candidates. l Real estate agents: Identify the agents you enjoy doing business with or those you’d like to do business with and take some time to find out who their favorite loan officers are and then bring that person on board! l Current employees: Don’t be afraid to ask your current team members if they know of anyone in the industry who may be interested in joining your team. If your internal staff is happy with their jobs, they’d

surely recommend your financial institution to their friends or acquaintances. Though starting the search with your inner circle can be a good strategy, sometimes it isn’t enough to find exactly what you’re looking for in a loan officer. In these instances, consider hiring a recruiter to help you find the best talent for your team. No matter which method you use to identify a potential loan officer candidate, be sure to ask the hard-hitting questions to ensure they’re a good fit for your team, including how they intend to generate business and discussing their ethical viewpoints. If you’re hiring an external loan officer, don’t hesitate to ask what their previous closed volume was and have them back it up with their W-2. Realistically, there are plenty of fish in the sea, but you want to make sure whomever you bring on your team has the ethics and mentality that align with the goals of your financial institution since they will be the face of your business. Competitive advantages of your institution Identifying potential candidates is just the beginning–next, you’ll need to really sell your financial institution to the loan officers you would like to have on your team. Keep in mind that what you’re selling to your potential

employees is a subset of the things you’re selling to customers–stability of the institution, access to loan programs you offer, dedication to your community and providing superior service above all other lenders in your area. Not to mention, as a community lender, your new loan officers will gain access to a list of members or customers who you already do business with and to whom they can actively market mortgage offerings. Finally, be sure to paint a picture highlighting the success a new loan officer can achieve by joining your team and give them every reason to accept the role! Always approach your search for new team members with care–especially when it comes to loan officers, as they’ll need to build trust and camaraderie with clients in order to successfully navigate the mortgage origination process and grow your business. Information is for educational purposes only and should not be relied upon by you. Information deemed reliable but not guaranteed. All loans subject to income verification, credit approval and property appraisal. Not a commitment to lend. LenderSelect Mortgage Group is a registered trade name (DBA) of Atlantic Bay Mortgage Group, L.L.C. NMLS #72043 (nmlscosnumeraccess.org) is an Equal Opportunity Lender. Located at 804 Moorefield Park Drive Suite 102, Richmond, VA 23236.

Tracy Marks is president of LenderSelect Mortgage Group. An executive with more than 35 years of diverse sales experience, Marks is experienced in business development, systems and operations, and managing sales acquisition and production. As the President of LenderSelect Mortgage Group, he built and strengthened the Third-Party Origination Division of Atlantic Bay Mortgage Group.

Transparency Illuminates the Path Towards Customer Acquisition By Frans van Hulle

“To really move the needle and maximize every dollar spent toward increasing their number of loans, lenders can now adopt new tools that are available to them.”

n the 1987 movie “Wall Street,” Gordon Gekko, played by Michael Douglas, famously said, “The most valuable commodity I know of is information.” Even though that quote specifically pertains to the financial industry where traders leverage information to take company stock positions, the same can and should apply to mortgage lenders when developing customer acquisition or lead generation campaigns. Imagine a scenario of Gordon Gekko building an entire stock portfolio based not on any fundamental company information, but rather pure guesses—random plays into companies with the hope that it will work. For years, that is essentially what mortgage lenders have done in their lead generation programs. Too often, mortgage marketers take a financial position on a collection of leads they just purchased—based on projections—and hope that some are good and will result in new customers. As a result, the whole process has been labor

intensive with little insight into what’s working, what’s not, and why. One reason for the inefficient practices has been a lack of technology that offers a genuine advantage. However, there is a disruption going on that has the potential to fundamentally change the mortgage industry’s customer acquisition model, and it is being fostered through transparency. Catching up in the race towards transparency Much ink has been spilled describing how many industries are moving towards greater transparency. In retail, Wal-Mart insists that its vendors have complete transparency throughout their entire supply chain. They want to know where their products are coming from to ensure that all suppliers adhere to their sustainability goals. Sadly, mortgage companies are not afforded the same level of insight into their own supply of leads. For years, they’ve been forced to operate in a black box, not knowing the true source of their leads, how each lead performs within

a lower cost per funded loan? First, they should only purchase leads from sources who are committed to providing What’s holding them complete transparency back … technology into where each lead Much the way digital comes from. Only then advertising and Wall can they begin to assess Street trading have been performance. revolutionized through Second, there are technology, the mortgage platforms that track the industry is now following performance of every lead suit and moving beyond the transactional nature of as it progresses through lead generation marketing. the lender’s sales funnel. What does this mean? In These platforms seamlessly incorporate a short, leveraging new lender’s customer sales technology to gain a data to the process and deeper understanding of provide end-to-end customer acquisition visibility—from the point efforts and to know what really drives performance. of acquisition through the To really move the needle point of closing (should it and maximize every dollar progress that far). The time has come for spent toward increasing the mortgage industry to their number of loans, embrace more technology lenders can now adopt and move their customer new tools that are acquisition process away available to them. from the transactional approach it is today. Hold vendors to a Opening the door to higher standard transparency is a key to How can lenders adopt driving success by driving technology and start down the cost per funded running campaigns that bring new customers with loan. the sales funnel, and how to adjust their efforts midstream.

Frans van Hulle, chief executive officer of PX, is a serial entrepreneur with more than 20 years of experience in the online marketing world. In 2010, Frans co-founded PX together with Bas Offers, with the idea to develop a revolutionary customer acquisition platform that automates and optimizes performance-based marketing processes, creates overall higher lead quality, and improves efficiency in the online customer acquisition space.

THE FOUR BIGGEST FLAWS continued from page 25

it repeatedly. This is simply because companies have relied on rate dropping as a de facto sales process. That is a race to the bottom. When market shifted to an equity rich, cash out market, the sales floor was told to sell cash out instead of rate. But they were never taught a singular sales process that would generate results in up and down markets. How to fix this flaw … If your sales process changes with the market, it’s not a process. By arming your reps with a sales process that is centered around assuaging the consumer’s feelings (relief from high interest rates and payments), empathizing with their emotions (stress and fear), and fulfilling their real desires (more disposable income, freedom), you create more consistent, repeatable and predictable sales outcomes.

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3. The third biggest flaw: Not creating an action anchor and leveraging the “Law of Consistency” The incentive for a buyer to continue a conversation must be perceived as being in their best interest. When salespeople aren’t in the habit of asking the right questions as described in the above conversations, they will almost always miss the opportunity to change a “No” to a “Yes” by making it seem like the buyer’s idea. Most sales reps are unaware of this simple but powerful technique they can use to help create that perception ... How to fix this flaw … The psychological idea of the Law of Consistency states that “public declarations dictate future actions.” Put a different way, people will make choices consistent with their previously declared statements, attitudes or beliefs. When those decisions are out of balance, it creates cognitive dissonance uncomfortable feelings which we naturally look to rebalance. How does that help us in mortgage sales? Well, it can help anchor consumers to an action

consistent with the solution you might propose. For example, if you can get your prospect to declare that credit cards are the worst kind of debt, and getting rid of this debt is a primary concern, it would be very difficult for them to tell you they don’t see the point of consolidating that debt as a good solution. Additionally, if a consumer agreed when asked if they were either somewhat or very concerned about their short or long term finances, it would then be very difficult for them to turn down a free analysis to see if there were any financial vehicles that could help them, either in the short or long term. Anchoring someone’s declarations of self to the goal of the call is simple to learn and paramount to replicable success. 4. The fourth biggest flaw: The organizational mindset, patients running the asylum While I think “patients running the asylum” should be expressed in the mortgage world as “the attitude at the top is driven by the attitude at the bottom,” they both illustrate a problem. Organizational beliefs emanate from the top down. If the top of an organization believes that only leads, rates or market dictate sales success, they have already lost because they assume the role of victim by something completely out of their control. If leads controlled outcome, then statistically all loan officers, over time, would have the same output. That clearly isn’t true. If it were the market, then why do some companies thrive in down markets while others tread water and even others go out of business? The answer is simple … it is the decisions that organizations make that are within their control which actually dictate outcome. Therefore, if things are going the wrong direction, look at the decisions that are being made and ... Ask yourself these questions as an organization: 1. What is your sales process? I don’t mean how do the leads get to the loan officer and what does he or she do

when it’s time to disposition. I mean, what are your organization’s turn-by-turn directions that should be followed by EVERY sales rep on EVERY call that will give them the highest likelihood of success?* 2. How do you measure whether your process is followed? In sales, what gets measured gets done! For example: If a child’s report card reflects grades so that improvement or decline may be measured, so should a sales process include a mechanism for identifying the successful adherence to a process.* 3. What do you do when the process is not being followed? 4. Do you believe it is your job as an organization to make the sales reps job as easy as possible? *The measurement of success should include the process of consistently diagnosing, solving and coming to a conclusion, rather than just getting a prospect to say “yes.” I’ve heard this sentiment said in many different ways, but it all means the same to me, “We owe our sales rep easy work.” For example, if I asked an organization whether they prefer each loan officer takes 100 calls per day and gets one loan or takes 10 calls per day and gets one loan, everyone to a man would say the latter. That’s interesting, because it’s the exact same outcome. What if I said the 100 calls cost $2 each, and the 10 calls cost $200 each? Then the loan resulting from the 100 calls costs $200 and the latter costs $2,000. I know, I know, I know about the scale argument, but put that aside for a moment. On pure cost alone, it’s obvious that the first choice is far superior, yet, in organizations I’ll hear that they still prefer to serve up the easier, more expensive calls to their reps. I’m not suggesting you burn out your reps, but a little bit of perspective would be nice. In many industries, reps are expected to make hundreds of

outbound cold calls; others might have to go door to door and knock on a hundred doors per day; even others drive from business to business hoping to get one opportunity in a day. If I suggested to a loan officer that they had to answer 100 calls a day to get one loan a day and they could do that every day, most would say “not interested, sounds like bad leads.” If I then asked them who wants to close 20 plus loans per month, all would raise their hand. These are contradictory because they could do 20 loans a month by answering 100 calls per day, every day, in my previous example. I am not suggesting we make things unduly difficult on the reps but let’s stop the dialogue that fuels this broken perspective. As a sales job, being a loan officer in a consumer direct environment is pretty cushy. The company drives in-bound leads to them or gives them expensive leads from online consumers who have raised their hand. In the sales world, this is pretty easy work and it can be even more profitable with a process designed around providing solutions instead of selling mortgages, rates, cash out, etc. How to fix this flaw … 1. Recreate your sales process from the ground up, building it with each component of a GREAT process, so it’s like having turn-by- turn directions to a conclusion. 2. Commit as an organization to follow that process. 3. Create systems of measurement and accountability around the process to ensure it is followed. 4. Reward reps based on adherence to process and emotional commitment to do their best on every lead every time regardless. 5. Seek and destroy excuses for poor performance related to external factors (bad leads, negative market conditions, competition has lower rates ...).

Ken Bartz is the chief visionary officer and founder of Monster Lead Group LLC, a direct marketing company for the mortgage industry located in Owings Mills, Md. For more information, visit MonsterLeadGroup.com or e-mail Hello@MonsterLG.com.

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE’S

calendar of events JUNE 2019 Thursday, June 20 MBA’s Document Custody Workshop Ritz-Carlton, Tysons Corner Tysons Galleria 1700 Tysons Boulevard McLean, Va. For more information, visit MBA.org.

AUGUST 2019 Wednesday-Friday, August 14-16 MMLA 2019 Annual Lending Conference Crystal Mountain Resort & Spa 12500 Crystal Mountain Drive Thompsonville, Mich. For more information, visit MMLA.net.

JULY 2019 Wednesday-Thursday, July 10-11 MBA’s CREF Market Intelligence Symposium 2019 NYU Global Center 238 Thompson Street New York, N.Y. For more information, visit MBA.org.

Monday-Tuesday, August 26-27 NEXTSummer19 The Gwen Hotel 521 North Rush Street Chicago For more information, visit NEXTMortgageConference.com.

Thursday, July 18 MBA’s 2019 Condominium Lending Workshop Marriott Marquis 901 Massachusetts Avenue NW Washington, D.C. For more information, visit MBA.org.

Wednesday-Saturday, July 31-August 3 FAMP 60th Annual Convention & Trade Show Walt Disney World Swan and Dolphin 1500 Epcot Resorts Boulevard Lake Buena Vista, Fla. For more information, visit OurFAMP.org.

Sunday-Tuesday, September 15-17 MBA’s Risk Management, QA & Fraud Prevention Forum 2019 Sheraton Grand Chicago 301 East North Water Street Chicago For more information, visit MBA.org. Thursday-Friday, September 19-20 2019 VMLA Annual Convention Richmond Downtown Marriott 500 East Broad Street Richmond, Va. For more information, visit VirginiaMLA.org.

Sunday-Thursday, September 22-26 2019 Northeast Conference of Mortgage Brokers and Professionals Hard Rock Hotel & Casino 1000 Boardwalk Atlantic City, N.J. For more information, visit MBANJ.com. OCTOBER 2019 Thursday, October 24 AZAMP Annual Expo 2019 JW Marriott Phoenix Desert Ridge Resort & Spa 5350 East Marriott Drive Phoenix, Ariz. For more information, visit AzAMP.org. Saturday, October 26 mPowering You: MBA’s Summit For Women in Real Estate Finance Austin Convention Center 500 East Cesar Chavez Street Austin, Texas For more information, visit MBA.org.

Thursday, November 14 FAMP’s 2019 Miami Mortgage Convention Trade Show DoubleTree by Hilton Hotel Miami Airport & Convention Center 711 NW 72nd Avenue Miami For more information, visit MiamiFAMP.org.

85 Monday-Wednesday, November 18-20 2019 NRMLA Annual Meeting & Expo Nashville Omni 250 5th Avenue South Nashville, Tenn. For more information, visit NRMLAOnline.org/event/2019-annualmeeting-expo. Tuesday-Thursday, November 19-21 MBA’s Accounting and Financial Management Conference 2019 Marriott Marquis San Diego Marina 333 West Harbor Drive San Diego For more information, visit MBA.org.

Sunday-Wednesday, October 27-30 MBA’s 2019 Annual Convention & Expo Austin Convention Center 500 East Cesar Chavez Street Austin, Texas For more information, visit MBA.org.

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

n National Mortgage Professional Magazine n JUNE 2019

Monday-Wednesday, July 22-24 The Appraisal Institute 2019 Annual Conference Hyatt Regency Denver at Colorado Convention Center 650 15th Street • Denver For more information, visit Appraisalinstitute.org.

Saturday-Monday, September 14-16 NAMB National 2019 Conference & Trade Show Caesar’s Palace 3570 South Las Vegas Boulevard Las Vegas For more information, visit NAMB.org.

Sunday-Tuesday, September 22-24 MBA’s 2019 Regulatory Compliance Conference Grand Hyatt Washington 1000 H Street Washington, D.C. For more information, visit MBA.org.

NOVEMBER 2019 Tuesday-Thursday, November 5-7 NCRA 27th Annual Conference The DeSoto Hotel 15 East Liberty Savannah, Ga. For more information, visit NCRAInc.org.

NationalMortgageProfessional.com

Sunday-Tuesday, July 14-16 Summer CAMP 2019 San Jose Marriott 301 South Market Street San Jose For more information, visit TheCAMPSite.org.

September 2019 Wednesday-Thursday, September 11-12 MBA’s 2019 Human Resources Symposium The Hyatt Regency, Crystal City 2799 Jefferson Davis Highway Arlington, Va. For more information, visit MBA.org.

Friday, September 20 2019 UAMP Mortgage Expo Marriott at City Creek 75 South West Temple Salt Lake City, Utah For more information, visit UAMP.net.

Is Good Pricing, G and Good Service E

Good Programs Enough? By Brian Sacks

ou see this scene repeated day after day … an originator works hard and finally gets a meeting with an agent or a referral partner. During the meeting, the originator tries to convince the agent or other referral partner about how wonderful their service is and how many great programs they have along with great pricing. The originator leaves the meeting feeling good, but never gets a call to work together. There are three things that make this age old scenario problematic and having you leave without the business relationship you want. Unfortunately, no script will fix these issues until you understand fully what you may doing wrong.

1. You don’t really understand the relationship Take a step back for a second and think about what happens when an agent gives you a buyer to work with … In reality, they are actually entrusting you with their commission and their reputation. If they refer you and the deal doesn’t close, they don’t get paid. In addition, if they referred you and you did a terrible job, then it reflects on them as well. I actually mention this to agents and referral partners when I am first meeting with them so that they realize I understand the relationship. Try this because agents love to know you “get it” and will become a valuable partner. 2. You are talking without listening As salespeople, we all like to tell everyone why they should be using us versus the competition, but you must resist this urge when first meeting an agent. I once heard a rule that said you should listen 80 percent of the

time and speak just 20 percent. But the bigger issue is that by not listening, you really have no idea of whether you could or should be working together. Just because someone is an agent or referral partner, doesn’t necessarily mean that you would be a good fit to work together. Start by asking some questions about their business and goals. Learn about their backgrounds … how do they market themselves? Who do they currently work with as an originator? What do they like or dislike about working with that person? What programs are they missing from their current lenders that you might have access to? You have to always remember that this is not an originator/agent relationship or a company-to-company relationship. It is a person-toperson one. Not every person is a good fit for you and you are not always a good fit for them either. Some of the best conversations I have with agents are ones where we left friends, but decided that doing business was not in our best interest. That may sound strange to you, but trust me when I tell you that it will save tons of time and frustration in the future. 3. You are coming from a position of weakness Go back and re- read that section above: “You are not a fit for every agent and not every

agent is a good fit for you.” So instead of trying to convince them to use you, treat the meeting like an interview. You are interviewing them. This will not only take the pressure off you, but also make the whole process easier. We all want what we can’t have right? But you must also keep in mind that you cannot just show up and say you provide good service and have great programs and prices. Honestly, if you cannot provide good service or have competitive programs and pricing, then you should not even be having a meeting in the first place. Real estate agents are meeting with you because they want to sell more homes and most of those buyers will need a mortgage. You are meeting with them because they generally control the buyers and you want them to refer those buyers to you. But what if you were able to flip that scenario where you controlled the buyers and you could then interview the agents to see if they could be a potential partner you refer them to? Always be thinking about how you can assist them with selling more homes. What can you do together to help them grow their business and thereby grow yours! When you keep these mistakes in mind, you will get more referrals from agents you actually want to do business with.

Brian Sacks is a branch manager with Homebridge Financial in Owings Mills, Md. He has been originating for 35 years, with career closings of $1.5 billion-plus and 5,833 transactions. Brian is also the creator of the Top Originator Secrets Blog and has recently published an originator success manual on the 48 Proven Ways to Immediately Grow Your Production. You can learn more at https://48WaysBook.com.

JUNE 2019 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

Visit www.AngelOakMS.com or call 855.631.9943 Simply The Best Solution in Non-QM Wholesale and Correspondent Lending g. ÂŠ 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 off ffeered by or in conjunction with HUD, FHA, VA, the U.S. government or any ffeederal, state or local governmental body. This is a business-to-business communication and is intended ffo or licensed mortgage proffeessionals only and is not intended to be distributed to the consumer or the general public. Each application is reviewed independently ffo or approval an nd not all applicants will qualify fy ffo or the program. Angel Oak Mortgage Solutions LLC is an Equal Opportunity Lender and does not discriminate against individuals on the basis of race, gender, color, religion, national origin, age, disability, other classifications protected under Fair Housing Act of 1968. MS675_0419