National Mortgage Professional Magazine March 2015 by ambizmedia

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Master the Markets with Barry Habib Recap of key economic events that took place over the past week and a look ahead to events that will potentially impact interest rates in the housing market.

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THE

elite performer Inbound vs. Outbound Marketing By Andy W. Harris, CRMS

he best day of your career as a housing professional is the day your business runs on inbound production rather than outbound production. There is nothing more powerful than developing a reputation and marketplace influence that drives prospects directly to you, with minor or limited effort. With the changes in technology, access to data, and expectations of consumers, the housing industry is changing and changing rapidly. If you don’t stay ahead of the curve with your marketing strategy and rely primarily on outbound efforts, you’ll find yourself stuck in an old and ineffective way of generating new clients. You should certainly diversify your sources of production, but understanding how to develop automated content campaigns can drastically improve conversion and decrease costs. Creating strong content and having a positive presence and reviews online and in your community for referrals is vital. Why break the ice when you can hand over that task to perspective clients? Why sell when you can have others sell for you? Essentially, trust and expertise causes your initial interaction to be a two-way educational conversation rather than a one-way sales call. Business grows at a rapid pace when your content drives inbound contact and production. Here are a few statistics found on the web pertaining to inbound vs. outbound marketing: l Thirty-two percent of brands are decreasing spending on outbound marketing to spend more on content marketing. l Because 61 percent of consumers say they feel better about a company that delivers custom content, they are also more likely to buy from that company. l Ninety percent of consumers find custom content useful and 78 percent believe that organizations providing custom content are interested in building good relationships with them. l Eighty percent of business decision-makers prefer to get company information in a series of articles versus an advertisement. l Per dollar, content marketing produces three times more leads. l Companies that spend more than 50 percent of their lead generation budget on inbound marketing report a significantly lower cost-per-lead. l For mid-sized businesses, content marketing costs 31 percent less than paid searches. l Inbound marketing costs 62 percent less per lead than traditional outbound marketing. l According to 37 percent of marketing managers, the most important way to engage customers is content-led Web sites. l Blogs give Web sites 434 percent more indexed pages and 97 percent more indexed links. l Two hundred million Americans have registered their phone numbers on the FTC’s “Do Not Call” List. l Fifty-four percent more leads are generated by inbound marketing than by outbound marketing.

So find new ways to create content, drive interest online and in your community, build strong reviews, and a reputation that attracts followers and triggers contacts. Where possible, automate your service offerings and efforts. Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and 2010-2011 president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431, e-mail aharris@vantagemortgagegroup.com or visit www.vantagemortgagegroup.com.

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n National Mortgage Professional Magazine n MARCH 2015

“We were delighted over the myths we were able to debunk, like it is always best to buy the worst house in the best neighborhood or that every home remodeling for resale should focus on the kitchen.”—Stan Humphries, Zillow Chief Economist

Zillow’s Chief Economist Discusses Best-Selling Book assumptions that many people brought

still recovering quite nicely, but still a

to the subject. “Each chapter of the

long way from normal,” he said. “We’ve

Besides being one of the

book looks at a different real estate

had quite a strong home price

most prominent thought

topic as viewed through hard data.”

appreciation, and its slowdown is a

By Phil Hall

leaders in today’s housing

Humphries notes that the creation of

welcome development. In the past 12

world, Zillow’s Chief Economist Stan

the book was a joyful experience of

months, home prices were up 6.5

Humphries can now pride himself as

sorts, especially in addressing incorrect

percent. We expect an appreciation of

being one of the nation’s best-selling

assumptions that many people

about three percent in the next year.”

writers. Humphries and Zillow CEO

continue to bring to homeownership.

Spencer Rascoff co-authored Zillow

“We were delighted over the myths

Yet Humphries warned there are still hiccups that could create new

Talk: The New Rules of Real Estate,

we were able to debunk, like it is

problems. “There are a lot of markets,

which, in just two weeks, since its

always best to buy the worst house in

especially in California, that look

release has reached the number two

the best neighborhood or that every

overheated,” he said. “And we still have

spot on The New York Times’ Best-

home remodeling for resale should

a very high rate of negative equity, with

Sellers List in the Advice/How-

focus on the kitchen,” Humphries said.

17 percent of homeowners being under

To/Miscellaneous category and the

“Or that the adjustable-rate mortgage

water. And rental affordability never

number one spot in Amazon’s Real

is the instrument of the devil—we think

looked worse in this country—I

Estate Investments category.

that product got tarred in the aftermath

categorize that as a crisis, because

of the housing recession.

one-third of us are renters, and the

If the route to the top of the bestseller charts was unusually rapid, so

Humphries added that the book does

lack of affordable options means there

was the creation of the book. “It took

not exist as a cheerleader for

is less discretionary income for other

us about six to nine months to

homeownership.

things. Because of that, it is hard for

complete the book,” Humphries told

“Renting makes sense for a lot of

National Mortgage Professional

people based on their circumstances,”

Magazine, adding that the book’s

Humphries said.

genesis was based on the increased

On the whole, Humphries views the

renters to save for down payments for homeownership later.” Phil Hall is managing editor of National

attention that housing has received

national housing environment with

Mortgage Professional Magazine. He

within the general economic

cautious optimism.

may be reached by e-mail at

environment—as well as the incorrect

“I characterize our national market as

philh@nmpmediacorp.com.

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n National Mortgage Professional Magazine n MARCH 2015

COMMITTED TO YOU

DocMagic Implements MISMO Version 3.3 to Support the TILA-RESPA Rule Changes

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DocMagic Inc. has announced that its entire solution set now adheres to version 3.3 of the Mortgage Industry Standards Maintenance Organization (MISMO) Reference Model. The Consumer Financial Protection Bureau’s (CFPB) Integrated Disclosure Rule combines the mortgage disclosures required under the Truth-inLending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). It requires lenders to use the new integrated disclosures beginning on Aug. 1, 2015. Successful compliance with this rule depends on use of the latest version of the data standard. Version 3.3 of MISMO establishes a common dataset that is essentially a prerequisite for lenders to use the CFPB’s new integrated disclosures and share the information about the disclosures with their industry partners. The CFPB’s Integrated Disclosures will replace the current Good Faith Estimate (GFE) HUD-1 Settlement Statement, and Truth-in-Lending (TIL) disclosures for most residential mortgage loans as of Aug. 1, 2015. DocMagic is the first document preparation software vendor to implement MISMO Version 3.3. “Our early implementation of MISMO version 3.3 is significant because it is yet another step that we are taking to proactively prepare for the CFPB’s new Integrated Disclosure rule, as well as industry innovation involving the disclosures,” said Dominic Iannitti, president and CEO of DocMagic. “Any software provider that is involved in loan closings or data exchange must update their respective systems to implement the new dataset in order to effectively support their partners and lender clients. Those organizations that wait will likely not be ready to meet the CFPB’s deadline and as a result will encounter serious compliance issues.” In March of 2014, the governmentsponsored enterprises (GSEs) introduced the Uniform Closing Dataset (UCD), based on the MISMO v3.3

Reference Model standard used to support the Closing Disclosure under the CFPB’s new Integrated Disclosure rule. The Closing Disclosure is the form that combines the final TILA and HUD-1 Settlement Statement. As a result, closing documents will change significantly come Aug. 1, 2015. Lenders will be responsible for the Closing Disclosure and will need to automatically and seamlessly exchange the data from this disclosure with its settlement agents and other partners.

UWM Enhances Its UTrack Loan Tracking Technology United Wholesale Mortgage (UWM) has announced that it has significantly enhanced its loan tracking technology called UTrack, which was redesigned specifically to allow borrowers and real estate agents to have real-time access to track their purchase and refinance loans. UTrack provides UWM’s brokers and correspondents with the ability to share a link with their clients to track loans as simply and quickly as tracking packages through the mail. UTrack displays where the loan is throughout the process, from submission to underwriting to closing, in a condensed, easy-to-understand manner. There are often misconceptions about the loan process and UTrack will help bring transparency to all parties involved. UWM says that UTrack is branded with the broker and correspondent partners’ information, so they can be the facilitator of loan status updates, instead of the wholesale lender. “We believe communication is of the utmost importance in this industry and UTrack takes communication to the next level,” said Mat Ishbia, president and CEO of UWM. “When the borrower or real estate agent clicks on the UTrack link to follow their loan’s progress, they don’t see UWM anywhere. This tool was

designed specifically with the broker in mind, so they are the hero and UWM remains invisible to the client. As a wholesale lender, we believe in empowering our brokers with technology enhancements and tools to grow their business.” UTrack helps boost the client experience and build stronger relationships between borrowers, real estate agents and brokers. Its enhancements come on the heels of UWM’s redesigned loan origination system, EASE, which was launched earlier this year as an industry gamechanger for brokers and correspondent partners.

Ginnie Mae Launches New Issuer Report Card

Ginnie Mae has announced the launch of a risk management tool that will allow Issuers to measure their performance not only against program standards, but against their peers. The Issuer Operational Performance Profile (IOPP) tool uses a scorecard approach that allows issuers to gauge their operational and default performance against their peers and Ginnie Mae program expectations. Ginnie Mae President Ted Tozer noted that this initiative lays the groundwork for enhanced knowledge and Issuer-driven performance improvements. “The launch of the IOPP reflects Ginnie Mae’s ongoing commitment to increasing transparency and value for Issuers, investors, and other stakeholders,” said Tozer. “We believe this new tool will help us continue to ensure that a safe, effective, and governmentbacked channel for the flow of capital for U.S. mortgages exists, reducing risk to the taxpayer and providing muchneeded capital for the government.” The IOPP scorecard gives Issuers immediate and transparent feedback on their performance in the Ginnie Mae program in the areas of issuing, pooling, servicing and collateral man-

agement on a month-to-month basis, and calibrates to their peers. Issuers will receive an operational management score based on key metrics such as failure to report unpaid principal balance, timely reporting of UPB corrections, and a compliance review metric based on findings from Ginnie Mae’s most recently-completed compliance review of the Issuers. The metrics behind the delinquency management score will be based on early payment defaults, 60- to 90-plus day roll rates, workout effectiveness, and percentage of loans in foreclosure. The end result will be two scores for each Issuer—one for operational management and one for delinquency management—both of which will be calculated and reported each month. Both Single-Family, Multifamily and Home Equity Conversion MortgageBacked Securities (HMBS) Issuers will have access to the tool. “The IOPP is an Issuer report card, and we believe that once launched, it will help us in our work with our Issuers so we can continue to provide stability to the housing finance industry and continue to meet our mission of bringing global capital into the housing finance market to provide affordable housing opportunities to millions of Americans.” Tozer said.

Ellie Mae Launches AllRegs Market Clarity 3.0

Ellie Mae has announced the release of AllRegs Market Clarity 3.0, a new version of its business information tool featuring new search functions and improved navigation. The new version includes a powerful new user interface that lets users compare and contrast more than 3,000 loan products from 95 different investors, giving them better insight on the differences between products and investors. Market Clarity is a business information tool for the mortgage banking industry that helps lenders and

continued on page 18

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EWSFLASH l MARCH 2015 l NMP NEWSFLASH l MARCH 2015 NMP NEWSFLASH SSI: Most Mortgage Professionals Prepared for CFPB Disclosure Rule Changes

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Secure Settlements Inc. (SSI) has published the results of its latest poll of settlement agents, a poll conducted of 1,743 settlement agents nationwide from Feb. 2024 inquiring about their preparation for the CFPB’s new integrated disclosure rules taking effect on Aug. 1, 2015. The new rules establish new forms which are replacing the standard disclosure forms known as the Good Faith Estimate (GFE), Truth-in-Lending (TIL) and HUD-1. The purpose of the new forms is to bring improved clarity and transparency to consumers regarding the costs associated with their mortgage. The new Closing Disclosure, which replaces the old HUD-1 Settlement Statement, is typically prepared by an attorney, settlement or title professional in collaboration with a mortgage lender. SSI’s poll questioned a sampling of agents around the country to determine their knowledge of the new rule, familiarity with the new closing form, and their preparations for the Aug. 1, 2015 rollout. The polling results reflected that 92 percent of the respondents were familiar with the new rules, however only 36 percent were familiar with the new closing disclosure form, which is available with instructions on the CFPB Web site (www.consumerfinance.gov). A majority, 61 percent said that they had taken steps to prepare for Aug. 1, while 39 percent have not done so yet. Only 33 percent of the respondents had been contacted by their lender clients to review the new form and process and to coordinate preparation and deliver of the disclosure. Asked how the new rules will impact their business, some of the comments included: The new form is “Not necessary,” will “Cause confusion and uncertainty for the borrower,” will “Increase fees and costs to consumers,” will “Delay closings,” and “Seem designed to put small shops out of business.” Many agents were concerned that the new form will complicate not simplify the closing process, resulting in additional

delays, increased costs, and overall consumer dissatisfaction. Less than 40 percent of the respondents thought the new form was a positive thing for consumers, the industry and their practice. “The CFPB is tasked with a difficult job in taking a complicated loan process and making it understandable to the average consumer,” said SSI President Andrew Liput. “Most borrowers have never seen a promissory note before, let alone the mortgage, title insurance report, and dozens of disclosures and other loan documents that are placed before them at the closing table. The new disclosures are an important step in the right direction however without adequate preparedness by settlement agents, who are the professionals who are interacting with consumers at the closing, the effort is likely to result in much confusion for quite some time. Eventually as the industry comes around to understanding their new role in the closing process, the consumer will ultimately benefit. I urge agents to go to the CFPB Web site and immediately start familiarizing themselves with the new forms and guidelines. They should also reach out to their lender clients and work collaboratively with them to assure a smooth process after Aug. 1.”

Zillow Report: Minority Groups Continue to Struggle for Homeownership Black and Hispanic homeowners have a harder time securing a home loan and face a steeper climb to a full housing recovery than white and Asian homeowners, according to Zillow’s latest analysis of race and homeownership data. Zillow’s updated analysis of housing value and federal mortgage denial data by race reveals persistent housing performance and access-to-credit issues for racial and ethnic minorities across the country. For the first time, Zillow studied this impor-

tant data on a metro level. “While many of the disparities between the experiences of white communities and minority communities during the housing boom and bust can be explained by plain differences in finances and geography, it’s clear that the housing playing field remains strikingly unequal in this country,” said Zillow Chief Economist Stan Humphries. “Black and Hispanic applicants for conventional home loans make roughly $20,000 less per year than white applicants, resulting in much higher denial rates. Similarly, black and Hispanic communities are clustered in areas that saw huge run-ups in home values prior to the recession, and even larger drops during the crash. But there are some reasons for optimism. Home values in black and Hispanic communities are expected to rise faster over the coming year, and the data shows that Federal Housing Administration-backed loans have proven to be a viable and critical source of financing in minority communities.” The discrepancy is most intense in some of the nation’s most volatile markets. Home values in both black and Hispanic communities in the Los Angeles area remain more than 20 percent below their pre-recession peaks, while homes in L.A.’s Asian communities have appreciated beyond those peaks and homes in White neighborhoods are almost at peak levels. Some of the patterns revealed in the data can be explained by geography. For example, many Asian neighborhoods are on the West coast, in some of the country’s hottest housing markets, which can help explain why home values in Asian communities have risen faster and further than in other neighborhoods. Similarly, many Hispanic-dominated communities are located in volatile housing markets in the Southwest and Southern California, which can explain their rapid appreciation during the boom and steep fall during the bust. The disparity in loan approvals is likely tied to a number of factors, including income. Applicants who belong to racial minority groups fare better when they

apply for government-backed FHA loans than conventional loans. The homeownership rate in the U.S. is 63.5 percent overall. The rate among whites is 71.1 percent; Asians, 57.8 percent; blacks, 41.9 percent; and Hispanics, 45.2 percent.

NAHB Study Finds More Than 50 Percent of Millennials Move Back in With Parents A recent study of “Boomerang Millennials” who move out of their parents’ home only to move back in may have important implications for this key demographic and what it means for the housing market. The National Association of Home Builders (NAHB) examined recent research conducted by Judith Dey and Charles Pierret using data from the National Longitudinal Study of Youth 1997. The examination found higher incidence of “re-launch” for Millennials with a bachelor’s degree compared to those with a lower education attainment and higher incidence of “re-launch” for Millennials from higher parental income household compared to lower parental income households. A “re-launch” occurs when a young adult moves out, returns to the parental household, and then leaves again. “Understanding the makeup of those who return home could shed light on the timing of the release of what we know is quite a bit of pent-up demand,” said NAHB Chief Economist David Crowe. “The data may indicate that while this age group is delaying what we think of as typical milestones, the combination of resources and education and what we have found about their preferences suggest growing housing demand in the years ahead.” Ninety percent of those born between 1980 and 1984 left home before the age of 27 - but then more than half returned to their parents’ homes. Of that group, those with a Bachelor’s degree or higher had the highest share of returning to the parental home at 55.5 percent. Meanwhile, those born between 1980 and 1984 with a high school degree had

the lowest share returning to the parental home at 42.1 percent. When looking at parental income, the research reveals that parents in the top half of the income distribution experienced a higher occurrence of boomerang children than those in the bottom half. Another important difference is gender: Twelve percent of men in this age group never left the parental home, whereas 7.6 percent of women stayed. And although women are more likely to boomerang, they are also more likely to leave again. Studies continue to show that the desire to own a home remains strong for these Millennials. Despite data showing that the age group is delaying household formation, they remain a key demographic in the housing market, and the pent-up demand is expected to translate into housing growth in the coming years.

has been delivered, and where relief has been distributed.” The 2014 settlement agreement, totaling nearly $17 billion, settled claims that Bank of America and affiliates had violated federal and state laws in connection with their activities involving residential mortgage-backed securities and collateralized debt obligations. Bank of America’s is the largest of a number of settlements stemming from federal and state investigations into the causes of the mortgage crisis of the last decade. Bank of America’s $7 billion consumer-relief obligations are nationwide, but the bank is required to direct at least $1.25 billion of relief collectively to the six states—California, Delaware, Illinois, Kentucky, Maryland and New York—that participated with

the U.S. Department of Justice in the legal action that led to the settlement. “For many, if not most, Americans, family and the family home are core values, at the center of the lives they hope to live. Owning a family home is the dream. Losing that home is the nightmare,” Professor Green said. “This settlement agreement acknowledges that the bank has committed to do its part to help repair the dream and avert the nightmare for those still in their homes but struggling with their mortgage payments.” A unique aspect of the Bank of America agreement is that the bank deposited $490 million into a tax relief fund, from which the Monitor is empowered to make payments of up to $25,000 apiece to assist homeowners who incur

federal income tax liability as a result of receiving mortgage modifications. If Congress decides to extend a tax exemption to such homeowners, the money in the fund will go instead to community outreach and legal aid groups identified in the agreement.

Collingwood Survey: Will Private Mortgage Capital Dry Up? Can’t live with them, can’t live without them. That sums up the sentiment of continued on page 16

Independent Monitor Reports: BofA Begins Loan Mod Settlement Repayment

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Bank of America has begun to deliver its $7 billion consumer-relief obligations under its Aug. 20, 2014, settlement agreement with the U.S. Department of Justice and six states, Eric D. Green, independent monitor of the agreement, reported. In the first of his required reports on the bank’s consumer relief activities, Professor Green said that he and his team of legal and auditing professionals found that Bank of America had correctly claimed credit of $8,948,684 for an initial batch of 100 first-lien mortgage modifications and that the bank was employing a logical and appropriate approach to seeking credit for its consumer relief efforts. Under the agreement, Bank of America is required to provide consumer relief valued at $7 billion by a deadline of Aug. 31, 2018. The categories of relief include not only loan modifications but new loans to low- and moderate-income borrowers, donations toward community reinvestment and neighborhood stabilization, and support for affordable lowincome rental housing. Professor Green noted that the first 100 loan modifications are being used mostly to test monitoring standards and procedures, but are too small a sample from which to draw conclusions about the consumer relief Bank of America will deliver in the future. “Examination of the first batch of 100 loans amounts to a test drive, assessing Bank of America’s plan for delivering much-needed assistance to homeowners and its methodology for calculating how the assistance qualifies for credit under the settlement agreement,” Professor Green said. “The bank is extending relief to tens of thousands of homeowners, and in coming months we should get a clearer picture of how quickly the bank has delivered on its consumer relief obligations, how much of what kind of relief

Proven Growth Strategies in Today’s Refi-Boom The FHA-MIP Removal program is in full swing and your network is your biggest profit center to. Even if you use direct marketing to generate new business, you could be earning more referrals from your network of current and past clients, prospects, and leads. Are you doing everything you can to get as many loans as possible from your network? First: Think outside the box Your competitors are trying to grow their network too. In many cases these are the same people. How many realtors do you know? They all know other lenders besides you. It’s the classic industry conundrum. Who are you going to refer your clients to? Who’s referring clients to you? What separates you from your competitors? Next: Turn your efforts away from industry partners and towards your clients Your realtor knows a dozen other lenders. Your clients may not know any other lenders. Your competitors aren’t inviting their clients to meet in person. They are sending mail, and making phone calls. An offer to meet for coffee or go golfing will separate you from your competitors and keep you at the top of mind of your clients. It will also give you a chance to talk with them about their current mortgage situation and let them know any new programs available today that could benefit them.

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Finally: Grow personal relationships with your clients It’s not just about saving them money on their mortgage. It’s also about getting to know them. They know as many people or more than you do. You will successfully grow your network exponentially. Who’s your favorite doctor? Have they ever asked you out for coffee? Even if you declined, wouldn’t you be more inclined to go back to them if they put the offer out there? We live in a world with less and less interpersonal relationships. Ask your clients out for some fun and you will not only close more business, you will grow your network. In a refinance boom like we have today we must utilize all our resources. This means quickly contacting everyone in your network and letting them know what’s available to them. It also means building and maintaining relationships in your network. Finally, if you are not already marketing to new prospective clients, start a campaign NOW. The goal is to increase your market share while maintaining growth within your network. The byproduct of this effective strategy is a win-win for you, your clients, and your business. TagQuest customer spotlight: Jason Ponder (NMLS#162105) of Mortgage Solutions Network in Lawrenceville, Ga. Each month, we like to talk with our clients and find out how their campaigns are going. Here’s what we heard from one of our Georgia mortgage professionals Jason Ponder. Marketing campaign used: Direct Mail–FHA Refinance l Five thousand pieces sent per month l Response rate: Above one percent l Final results: A 20 percent conversion rate into working loans that will close Highlights of the campaign that worked well for Jason “Easy! It’s really turn-key with tried and true results.” Highlights that could appeal to other loan officers or offices “Even with the Internet and all the technology today, direct mail still has its place, and it can offer a better return-on-investment (ROI) than most other forms of marketing/advertising.” Based in Medford, Ore., TagQuest Inc. is a full-service marketing firm developed throughout the ever-changing mortgage industry. Utilizing industry knowledge, marketing expertise, and technology we implement any or all aspects of your marketing and/or advertising campaigns. With a proven track record, more than 10 years in business, and decades of experience TagQuest knows what it takes to produce unprecedented results in today’s fast-paced mortgage environment. For more information, call (888) 717-8980 or visit www.tagquest.com.

SPONSORED EDITORIAL

nmp news flash continued from page 15

leading mortgage and housing industry professionals when it comes to Fannie Mae and Freddie Mac, in the latest “Collingwood Group Mortgage Industry Outlook Report.” Each month, The Collingwood Group, a Washington, D.C.-based business advisory firm, in partnership with The Five Star Institute, surveys top mortgage industry leaders in an effort to assess the state of their businesses, current events in the industry, and what it all means for home buyers and sellers. In the March survey, mortgage industry professionals say Fannie Mae and Freddie Mac should be initiating more risk sharing transactions to spur the private securitization market, and they are worried that keeping Fannie and Freddie in conservatorship is causing private capital to abandon the mortgage lending space. But, they say it is highly unlikely that GSE reform will occur during the Obama Administration. Ninety-four percent of survey respondents indicate that housing finance reform is not a priority for the White House and as long as Fannie Mae and Freddie Mac are returning steady profits to the Treasury, there will be no incentive to reform them. As a result, Collingwood does not expect GSE reform to occur until well after 2017. The biggest risk associated with keeping Fannie Mae and Freddie Mac as-is, according to survey respondents, is private capital abandoning the space. In contrast, others indicated that the biggest risk is the government using the GSEs as a political instrument or as a piggy bank used to fund budget shortfalls. Respondents say it is important to have sufficient reserve capital and/or private mortgage insurance in place to protect taxpayers from the next business cycle downturn. Some suggested combining Fannie Mae and Freddie Mac into a single entity or moving to a single security. The vast majority (85 percent) of survey respondents agree that Fannie Mae and Freddie Mac should be doing more risk sharing transactions. These transactions allow private market participants to invest in the credit performance of Fannie Mae and Freddie Mac’s single-family book of business. Most survey respondents indicated that they support these transactions because they help fuel the private securitization market and limit taxpayer risk while the GSEs are in conservatorship. As for what Congress can do to improve the housing market, fewer than 50 percent of respondents selected “Repeal Dodd-Frank” or “Abolish the CFPB.” Instead, the comments submitted clearly indicate that these industry insiders prefer a tempered approach with reasonable modifica-

tions to these two reactionary reform measures stemming from the financial crisis. Many respondents stated that the Dodd-Frank Act should be revised to remove barriers to innovation and to reduce the cost of manufacturing a mortgage. Similarly, respondents were pragmatic about the unlikely prospect of shuttering the CFPB and instead suggested that Congress consider amending the structure of the CFPB so that there is more oversight and accountability. Respondents also stated that at a minimum, the CFPB should provide greater transparency in the exam process and in the results of an exam. Data for the survey was gathered from Feb. 10-19, 2015. Online questionnaires were distributed via e-mail to approximately 46,400 mortgage industry professionals; including lenders, originators and servicers. Questionnaires were also shared via real estate groups on social media. As of Feb. 19, 2015, 132 people responded.

Study Concludes That Household Formations on the Rebound A new study from the University of Southern California Lusk Center for Real Estate concludes that new household formation, a key driver of housing demand, has recovered after the job losses that accompanied the recession. While it was known that negative economic shocks such as major drops in employment reduce household formations, little was known about how long these declines would persist. The study, which is authored by Lusk Center Director of Research Gary Painter and Doctoral Candidate Jung Hyun Choi, finds that household formations consistently fall in the first quarter after an increase in unemployment, but return to their previous levels within about three years. This is true regardless of whether jobs have returned. “This shows us that even a permanent increase in the unemployment rate will not have a permanent impact on housing formation,” Painter said. “As a result, policymakers and industry practitioners have a new level of predictability when it comes to how economic crises impact the rate of new households.” According to the researchers, household formations fell to nearly zero from 2008-2010. The formation rate then played catch up for about three years and, even though jobs have not fully returned, household forcontinued on page 33

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Direct Mail for Mortgage Professionals in 2015 By K. Justin Restaino Direct mail can be a critically important component of an all-encompassing strategy, giving professionals a cost effective way to send action-oriented, personalized messages to key market segments and to continually improve that messaging based on results. The reports of direct mail's death have been greatly exaggerated. In fact, direct mail is alive and well, but it's changing. If you've tried direct mail and not achieved the results you hoped for, it's not because direct mail doesn't work. Maybe you expected instant results from the single piece you mailed out. Or perhaps you failed to personalize your messaging. Whatever the reason, you probably failed to employ best practice strategies that fully leverage direct mail's advantages over other forms of advertising.

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Target only the customers you want Working with a mailing list provider, you can select the precise criteria that match your target audience. Mailing list providers, for example, can help you build lists based on location, mortgage amount and credit score data, among others. Selecting specific parameters, you can be confident that you're reaching only the clients you want and not wasting money on those you don't. In 2015, it's more important than ever to analyze the effectiveness of your marketing campaigns. Direct mail makes it easy to see what's working and what isn't. You can track how many calls you receive from your efforts as well as identify which loans close from it. You can also include separate codes for each market segment to monitor how well each responds to your mailing. And you can use these results to enhance messaging and improve future response rates from segments that under perform. Your message needs to grab your readers' attention and move them to take action. Make sure they are clear, compelling and original. Avoid trite expressions and exaggerated language that come across as hype and turn off your prospects. To build credibility and trust, give readers specific and realistic benefits rather than generic claims. Be sure to correct any spelling or grammatical errors before you print. Finally, thoroughly vet each piece with trusted colleagues who can help maximize its effectiveness. Make a long-term commitment to create campaigns, not individual pieces Some prospects will respond to your first mailing. Others need more time and more mailings. For this reason, think of the pieces you create as parts of a comprehensive, long-term campaign, in the same way as the chapters of a book hold together and relate to one another to tell the entire story. Create all the pieces that constitute your campaign before you send out the first to ensure they are well integrated and your messages flow naturally, from the first to the last. K. Justin Restaino is vice president of Titan List & Mailing Services Inc. For more than 15 years, he has led Titan’s Mortgage Division, helping lenders of all capacities grow their businesses utilizing targeted direct mail. With a specialized focus in refinance and purchase markets, Restaino has the insight for proper data and mail application for success. He may be reached by phone at (800) 544-8060, ext. 204 or e-mail justin@titanlists.com.

SPONSORED EDITORIAL

new to market continued from page 12

investors manage risk, identify market opportunities and maintain a competitive edge. The tool is Web-based and features product templates and detailed investor guidelines. It is part of the AllRegs by Ellie Mae product line, created following Ellie Mae’s acquisition of AllRegs in October 2014. “Market Clarity’s expanded search capabilities and its improved navigation make it an indispensable tool for lenders and investors alike,” said Jeff Hoerster, vice president and general manager for AllRegs by Ellie Mae solutions. “Our new loan product overlay search makes it easier than ever for users to truly analyze loan programs side by side and see exactly how they differ. Users of Market Clarity have the ability to review the full set of product guidelines for each investor with whom they are an approved Seller/Servicer. Additionally, users may also review a redacted set of guidelines for those investors participating in the market with whom they do not yet have a business relationship, making the tool especially useful in keeping an eye on what competitors are offering.” In addition to a more streamlined, intuitive user interface and the new loan product overlay search tool, Market Clarity 3.0 now lets users track changes to loan product guidelines over time. This allows lenders in particular to stay up to date with ever-changing requirements and underwrite loans correctly based on real-time information.

Accurate Group Speeds Up Title Decisions With EquityClear Solution

Accurate Group has introduced EquityClear, designed to help lenders streamline and accelerate title and lien clearance to produce more accurate, actionable title data for home equity loans. With EquityClear, Accurate Group facilitates the title search, automates the review of lien and vesting history using both public and non-public data sources, and provides a more accurate and useful title report to the lender. Benefits to lenders include greater efficiency, reduced expense and burden on loan officers and underwriting teams and better decisions on borrower qualification. EquityClear also enables lenders to reduce overall risk by ensuring a standardized process is applied to every loan and that liens are reviewed and cleared by a fully qualified, neutral third-party. As a complement to its traditional appraisal and title solutions, Accurate Group offers a specialty suite of products that enables lenders to close home equity loans faster and with less overhead, while remaining compliant with industry regulations. EquityClear is the

latest addition to this unique product suite. EquityClear leverages Accurate Group’s proprietary process automation technology to streamline the title and lien review process, accessing information from multiple data sources. The technology is complemented by an inhouse team of certified, U.S.-based title experts who evaluate each report before delivery to the lender without impacting total turnaround time. “As the economy strengthens and home values continue to increase, lenders have the opportunity to significantly increase revenues from home equity loans and home equity lines of credit,” said Paul Doman, president and CEO of Accurate Group. “EquityClear transitions the burden of title and lien clearance from the lender to Accurate, freeing lenders up to spend more time on new business development and client service, while also accelerating the loan closing process. As the leading home equity appraisal, title and compliance company nationwide, lenders can be confident in the thoroughness and accuracy of the title information we provide. We are offering them a way to benefit from the latest technology and repeatable consistent review processes without taking on additional internal infrastructure.”

National MI Announces Integration With Mortgage Builder’s Architect and Blueprint

National Mortgage Insurance Corporation (National MI) has announced its mortgage insurance products are now available through the Architect loan origination system, an award-winning component of the Mortgage Builder platform. National MI is also integrated with Blueprint technology, the Mortgage Builder platform’s electronic document management (EDM) solution. Blueprint software enables lenders to receive, share, store, retrieve and deliver loan files in a completely paperless environment Mortgage Builder software delivers industry-leading loan origination software (LOS) to mortgage banks, community banks, credit unions and other financial institutions. “Lenders are now able to access and order National MI’s insurance products directly through Architect,” said Michael Dirrane, senior managing director and chief sales officer for National MI. “This streamlines the process, allowing our mutual clients to obtain a rate quote or commitment from National MI, all without ever having to leave Architect.” The integration with Blueprint software gives lenders improved efficiency in working with National MI and Mortgage continued on page 31

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NAMB PERSPECTIVE The President’s Corner: March 2015 What a month! February has been an incredible month of planning at NAMB—The Association of Mortgage Professionals. To begin the month, I visited United Wholesale Mortgage’s huge facility in Troy, Mich. The group included brokers from around the United States. It was cold with about 15 inches of snow on the ground, so those of us from sunny south Florida were shivering a bit. UWM is an amazing company. Depending on what month, UWM is

the top wholesaler in the United States. When I visited, I could see why. Later in the month, I attended a meeting of the Southwest Chapter of the Florida Association of Mortgage Professionals (FAMP) where Valerie Saunders was teaching about the new Florida regulations and what to expect in a state audit. If you have not heard this session, you are going to be totally unprepared and better break out your wallet or, should I say, consult your bankruptcy lawyer. The rest of the month has been devoted to writing articles, doing numerous

The CEO Perspective A Message From NAMB CEO Donald J. Frommeyer

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Have you ever wondered about changes that could be made to make your life easier? NAMB is currently working very hard on our new Mortgage Summit involving wholesale lenders. This is to take place on March 21 in Orlando, Fla. There are going to be 15 companies that will be attending and there are a number of items that are going to be discussed and commented on. NAMB’s goal is to open a dialogue with these companies and attempt to get these companies to discuss items from appraisals to disclosures to lender agreements.

This Summit is not just a one-time shot. My goal with this is to continue to meet and continue throughout the year to have open dialogue and gather everyone again in Las Vegas at NAMB National. If you know of some potential companies that might be interested, let me know. As I write the Monday Morning Messenger each week, I find myself usually having a lot to write and trying to only to leave some things out because it could be too long. But earlier this month, I wrote about the Congress and Senate. My problem is that it continues to be a fighting and bickering contest amongst those who represent us. Some of them are worse than

Leadership Versus Management By Fred Kreger, CMC I was attending a credit union meeting last month when the topic of leadership versus management was presented. What does it mean to lead and not just manage? Leaders need to establish a clear vision and share that vision with others so that they will follow willingly. They will also provide the information, knowledge and methods to realize that vision by coordinating and balancing the conflicting interests

of all members and stakeholders. A leader steps up in times of crisis, and is able to think and act creatively in difficult situations. Remember, a key difference between managers and leaders is that managers have subordinates, while leaders have followers. Just because you have a title of “Manager” does not necessarily make you a good and effective leaders. Management is doing things right! Leadership is doing the right things! You, as a leader, must model the way and inspire others to follow the vision. And above all, encourage the heart. Pay

interviews with national media outlets and event planning. I am very excited about NAMB’s first Wholesale Summit. If you have ever wished you could talk to the people who run the wholesale lender instead of, at best, a manager, this is what will be happening. The people who run at least 15 of the major wholesale lenders will be meeting with the NAMB board to improve this industry. If you have suggestions, please e-mail them to me at president@namb.org. Please make certain you attend NAMB’s 2015 Legislative & Regulatory Conference in Washington, D.C., set for SaturdayTuesday, April 11-14. This may be the most important single thing you do this year. The opportunities for change are incredible, but will not happen without your involvement. We’re the little guys

without millions to spend, but we have you. A voter in the office goes a long way. I was also at the South Florida Regional Compliance Symposium in Fort Lauderdale on March 4 and will be speaking at the South West Florida Association of Mortgage Professionals Chapter Meeting in Fort Myers, Fla. on March 19. On April 9, I will be at the Maryland Association of Mortgage Professionals’ Annual Conference at Turf City Resort in Ellicott City, Md. Hope to see you at one of these events!

others. So here is my plea to all of you … GET INVOLVED IN THE NAMB GRASSROOTS EFFORT. This is going to be the only way we are going to be able to react to some of the stuff that is going on in D.C. Membership is the answer to all of this. We need each and every one of you to join the ranks of NAMB so that when we go to our representatives, we have strength in numbers. I know that I have been preaching this for over three years now, but the time is now. I was talking to someone just last week and they were talking about how much money it cost to join NAMB. They said that $50 was too much, and to join at the Platinum Level at $120 was ludicrous. I asked her what did she expect the dues to be and she said $25 or $30. We began to talk about loan closings and she told me that business was better than last year and last year she closed a little more than 100 loans last year. So I asked, “Did you make over $100,000 last year?” She answered, “Yes.” I then asked if she stopped every morning for Starbucks and

she told me probably twice a day. I advised her that that is about $4.00 per day, times five days a week. It equates to $20 per week or about $85 per month. I told her, “For the cost of one day of coffee or lattes, you could help protect your industry by being a member of NAMB. Can you give up two coffees per month?” She joined online that day. So, as you see … it is not that expensive. When you join NAMB, you become a member of an association that keeps you informed of what is going on in Washington, D.C., you also get important notifications of things that will affect you in your livelihood. We need MEMBERS, and we need 10,000 of them. Go to www.joinnamb.com today and get on the bandwagon. Become a member today!

attention to what is happening in the hearts of others (what are others passionate about and what do they care about?). Show people you care and they will follow. Rosalynn Carter, former First Lady of the United States, once said, “A leader takes people where they want to go. A great leader takes people where they do not necessarily want to go, but ought to be.” Now that have you all are enthralled in the word “Leader,” how does this relate to NAMB and you. Our advocacy for our clients and fellow originators must not wane. We need to continue our efforts in order for NAMB to be the thought leader that is expected by you, legislators and our regulators. That last sentence may have confused you, but

indeed our members of congress look to NAMB members as thought leaders in housing and lending. When I was in Washington, D.C. this past year with more than 100 of your fellow NAMB members, the message that resonated with each meeting was, tell us what we can do to help our constituents. These are your clients. Members of Congress are reaching out to us this year. We have been given a great opportunity to shape OUR lending environment by rebuilding it with our input. When was the last time you heard that from D.C.?

John Councilman, CMC, CRMS NAMB President president@namb.org www.joinnamb.com

Donald J. Frommeyer, CRMS is chief executive officer for NAMB—The Association of Mortgage Professional. He may be reached by e-mail at namb.ceo@namb.org.

Vision without action is a daydream. Action without vision is a nightmare. I am asking for each one of you today to

NAMB PERSPECTIVE be leaders with vision. Volunteer on something that you are passionate about within government advocacy: VA, FHA, USDA, downpayment assistance, loan limits, etc. You all continue to stay in the business. You all have passion for this industry. If you didn’t, you would have left years ago. Ask yourself that question. What are you passionate about? And then act upon it and volunteer some time to move YOUR organization further forward than it has before. Now I’m not asking for you to take 20 hours a week and work on NAMB’s

behalf. No, I want you to do one thing not 100. If we all just volunteer and help each one of our state organizations and NAMB do one thing to move us forward, can you imagine what we will look like? Pretty great vision I think. Your NAMB Government Affairs team is developing strategies that will help you determine your passionate objective. Remember, the word “Strategy” means “To move one’s army.” We have a great army to do such great things. I hope I have inspired you to do great things within your business, your state

Time to Prep for D.C. By Linda McCoy, CRMS It is time to get ready for the 2015 NAMB Legislative & Regulatory Conference in Washington, D.C. I get so excited thinking about meeting our congressman and spending time with them explaining why we are there. The first time I made the trip to D.C., I had no idea what to expect. For those who keep coming to Washington every year

to fight for the industry, I thank you as an originator because I know I would not still be in business if you had not given your time and lobbied for the things that have made a difference. I had my first experience in government when I was in the eighth grade and was selected to go to Girls State in Jackson, Miss., our state capital, for a week. We were taught the fundamentals of how our government works. We learned first-hand how the Senate, the House of Representatives, and the

By John Councilman, CMC, CRMS

Governor all work together to keep our state running smoothly. I got a real sense of how important government is to our society as a whole. Then, when I was in 11th grade, I was selected to go to Washington, D.C. for Good Citizenship with 187 other people from all over the country. We visited our congressmen’s offices, the Capitol, and many other important landmarks in D.C. We went through training on our government and how it works on the federal level. I had no idea at the time that I would one day be there lobbying for a cause that was very important to me. Washington, D.C. is a fantastic place to visit, and you can have NAMB help

open doors for you so you can experience D.C. from the inside. NAMB will also teach you how the government works and what a difference you can make. I felt a real connection when I was introduced to politics more than 50 years ago. I am never disappointed when I go to D.C. There is always something new and exciting happening.

expert in TILA calculation cases where lenders and borrowers spent tens of thousands of dollars pursuing something even the lawyers on both sides didn’t understand, much less the judge or the jury. I remember one case where the loan in question was a payment option ARM. The lawyers had a hard time finding anyone who could calculate a Truth-in-Lending disclosure, much less explain how they came to their result. Yet, the whole case hinged on whether that disclosure was accurate. I believe the judge eventually ruled in the bank’s favor because they had no one to challenge my calculations. Then, there are the arguments about what goes in the APR. While lenders have been much more careful, there is still disagreement in this area. With all of the conflict about affiliate fees being in the finance charge and APR, a loan with lower closing costs can actually be required to have a higher APR than a loan with higher closing costs but no affiliate involved. The CFPB says they have clarified whether broker loans may have a higher APR than lender loans. Personally, I don’t think they have done so adequately. They have given verbal interpretation but not a

detailed rationale on how lender compensation to brokers affects APR and triggers for higher-cost loans and high-cost loans. Lenders still disagree on what title fees should be included in the APR. It is the old argument about what service is required to obtain the loan. The Consumer Financial Protection Bureau (CFPB) toyed with the idea of an all-in APR a little while back. This would put all closing costs into the APR. The problem here is that all of the triggers would need to be reevaluated which not as simple as just moving them up. Different states handle closing costs very differently. The CFPB simply avoids APR on the Rate Checker, but don’t get me started on that. Let’s talk a little more about the ability to manipulate the APR as I mentioned above. Let’s take two lenders who are both advertising … people don’t keep the loans samelower rate, lower the APR if full term. I have come to the conclusion that APRs are nearly worthless for anything other than a fixed-rate mortgage. Let’s look at ARMs more closely. One uses the one-year Treasury as an example, while the other uses the Cost of Funds Index. Just because the Treasury is

Fred Kreger, CMC is the branch manager at American Family Funding, a Division of American Pacific Mortgage. He is also a past statewide president of the California Association of Mortgage Professionals (CAMP) and currently is the vice president and Government Affairs vice chairman for NAMB—The Association of Mortgage Professionals. He may be reached by phone at (661) 505-4311 or e-mail fred.kreger@affloans.com.

Linda McCoy, CRMS is broker/owner of Mortgage Team 1 Inc. in Mobile, Ala., a member of the NAMB Board of Directors and serves as NAMB Industry Partners Committee co-chair. She may be reached by phone at (251) 650-0805 or e-mail linda@mortgageteam1.com.

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I really don’t have anything against the annual percentage rate (APR) as a mathematical tool for identical loans, but how many loans are identical? I do think it is not appropriate as a general shopping tool, which is how it is primarily used by the Truth-in-Lending Act (TILA). I hear a lot of argument against the APR based on the fact that consumers simply don’t understand it. That is an excellent reason not to use it as a general shopping tool. I have had borrowers tell me that they were expecting a four percent interest rate, and here I am giving them a 4.9 percent interest rate. They had no clue that on an FHA loan, the mere fact that they had mortgage insurance drives up the APR to quite a bit higher than the Note rate. It really is easy to mislead consumers using APR as the only shopping tool. By carefully selecting the

LTV, loan amount or loan program, many tricks can be played with APR. I know that you should not compare APRs on adjustable-rate mortgages (ARMs) to fixed or different loan terms, but borrowers don’t know that. It would be very easy for even a sophisticated borrower to think that ARMs, at the moment, offer a better deal. They may, but I wouldn’t trust the APR to reveal that. Another problem with the APR is that most loan originators and other mortgage professionals really don’t understand it. They are relying totally on a computer algorithm to compute the APR correctly. That can be a recipe for disaster, since the penalties for incorrectly calculating the APR or other important TILA terms are severe. It may even cause the loan to be rescinded or possibly set aside by a court. There could be significant fines for miscalculating an APR. Should we really have a calculation that honest people are unable to truly know absolutely whether the result is true or not? Should the penalties be so great for mistakes? I have served as an

This is what we do on a daily basis to lead others and tell our great stories.

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NAMB’s Delegate Council: Goals for 2015

organization, your family, and yes, within NAMB. Leadership involves a goal and not just influence with no intend outcome. As leaders of your organizations, companies and yourself, what goals must be in place in order to maintain your leadership title. Los Angeles Dodger great Steve Sax wrote in his book Shift: “Great leaders are great storytellers. When you can tell someone a story that relates to his or her own situation, then you can change the way they feel about themselves.”

NAMB PERSPECTIVE lower now does not mean the Treasury will be lower in the future. In fact, the Index for Treasuries is artificially low right now and probably is highly misleading to use as an index to derive an APR for disclosure purposes. Borrowers would be far better served by being given a chart of historical values rather than an APR. Construction loan APRs are absurd. You have no idea how much a borrower is going to draw and when. There is no way to calculate an accu-

rate APR on these loans. Rather than creating several disclosures and seeing how the public receives them, it would seem to be far better to find out what consumers don’t understand or don’t read. The next step should be looking at ways to make certain what consumers need to know and possibly, more important, what they want to know. There should be disclosures that inform the least sophisticated borrowers and perhaps totally separate disclosures that allow knowledgeable

borrowers to dig deeper. I appreciate HUD and the CFPB’s attempts to create better disclosures, but there has been no revolutionary thought in disclosures since RESPA and TILA were enacted. They were truly revolutionary in their day. Unfortunately, everything we see today is more or less a variation of 40year old disclosures. With the advent of laser printers and computerization, we can do far better. I do congratulate the CFPB for moving the APR out of

the most prominent position. Perhaps it is time to retire it altogether since it is not a good shopping tool and provides no useful purpose at closing, there is no comparisons being made then. Let’s see if anyone is listening. John Councilman, CMC, CRMS of AMC Mortgage Corporation in Ft. Myers, Fla. is president of NAMB—The Association of Mortgage Professionals. He may be reached by phone at (239) 267-2400 or email jlc@amcmortgage.com.

The NAMB Certification Program Terry Pogofsky, CRMS Judith Santefort-Frey, CRMS Shelly Straim, CMC Tory Tarsitano, CRMS Prince Williams, Jr., CRMS

General Mortgage Associate

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The Certification Committee of NAMB— The Association of Mortgage Profes-sionals has been very productive to date in 2014, obtaining many new loan officers who have received the Certified Mortgage Consultant (CMC), Certified Residential Mortgage Specialist (CRMS) and/or General Mortgage Associate (GMA) designations. NAMB will continue to grow its Certification Program, to enhance its value to our designees, and fine-tune its structure and procedures. The goal of the NAMB Certification Committee is to raise the number of certified mortgage professionals to 1,000 by July 2015, and to launch a marketing campaign to both industry members and the public at-large about the need to utilize a nationally designated mortgage professional. For more information on NAMB’s Certification Program, contact NAMB Certification Committee member John Stearns, CMC, CRMS by e-mail at jstearns@afmsi.com or call (262) 478-1154. Alabama Linda McCoy, CRMS Penny H. Phillips, CRMS Arizona Rocke Andrews, CMC, CRMS Cal Carlson, CMC, CRMS Bert Carpenter, CMC, CRMS, GMA Randall E. Hotchkiss, CMC William R. Howe, CMC, CRMS Brian Jacenko, CMC Ross Jameson, CMC Gilda Kemp, CRMS Gary G. Kiehlbaugh, CRMS Hratch K. Panosian, CMC Joseph P. Paonessa, CMC Mark L. Ross, CMC, CRMS Gary N. Smith, CMC

Certified Residential Mortgage Specialist Stanley Y. Wang, CMC, CRMS Linda M. Wright, CMC Arkansas Shane Lester, CMC, CRMS California Fred Arnold, CMC Michael Dorr, CRMS George L. Duarte, CMC Jane Durant-Jones, CMC Virginia Ferguson, CMC Linda Fleischmann, CMC Dean Henderson, CRMS Al Hensling, CMC Peaches Jensen, CMC Fred Kreger, CMC Jessica Lanning, CMC, CRMS Joshua Lewis, CMC C. Kent Miller, CMC James O’Dea, CMC Peter Ogilvie, CMC Nancy Osborne, CMC, CRMS Donald Petty, CMC Robert S. Schwab, CMC Guy Schwartz, CMC Christopher Taylor, CMC Richard Vujovich, CMC Susan Wingate, CMC Colorado Kay A. Cleland, CMC, CRMS Tarius L. Derritt, CRMS Gary Salter, CMC Michael Thomas, CMC Connecticut Debra Killian, CRMS Lisa Moriello, CMC, CRMS Hector Rodriguez, CMC Lou-Ann Smith, CRMS District of Columbia Diane B. Cook, CRMS

Certified Mortgage Consultant Jan Hix, CMC Florida Tillis Churchill, CRMS Frank Cicione, CMC, CRMS John L. Councilman, CMC, CRMS Matthew Daly, CRMS Joseph L. Falk, CMC, CRMS Dan C. Longman, CRMS Julie Wheeler, CRMS Kenneth Zorovich, CRMS Georgia Michael Sean Collett, CRMS Deborah L. Switts, CMC Frank P Torch, CRMS Hawaii Donna Dodd, CRMS Patricia K. Morimoto, CMC Glenn Takasato, CMC Barbara Welsh, CMC Illinois Kenneth J. Amstutz, CMC, CRMS Gilbert M. Antokal, CRMS Brian Augustine, CRMS Leticia Avina, CRMS Jackie Bulava, CRMS Angelo Cusinato, CMC, CRMS Tony Davis, CMC, CRMS John Dedes, CRMS Dorothy P. Desmond, CMC, CRMS Brian Dixon, CRMS Charles E. Eck, CMC Adenike Fasanya, CMC Carol Gardner, CMC, CRMS Jorge G. Gomez, CRMS Scott T. Guzik, CMC Robert J. Kenney, CRMS Steven M. Levitt, CRMS Robert C. Moos, CMC, CRMS Andrew G. Palomo, CMC, CRMS

Indiana Frank Andriole, CRMS Donald J. Frommeyer, CRMS Robert E. Sweeney, CRMS Iowa Charles D. Chedester, CRMS Kevin Kirsch, CRMS Brian E. Lampe, CMC, CRMS Kansas A.W. Pickel, III, CMC Lynn Smith, CMC Kentucky Nicolas M. Ellis, CMC, CRMS Louisiana Michael Anderson, CRMS Tracy Lynn West, GMA Maine Elizabeth Monaghan, CMC Maryland Theresa Amos, CRMS Adrian F. Citroni, CRMS Jason Fox, CRMS Eric D. Gates, CRMS Patricia McGill, CMC Rick Rall, CMC Craig Strent, CRMS Ken Venick, CMC Massachusetts Richard M. Bettencourt, CRMS George F. McLaughlin,III, CMC, CRMS Michigan Timothy Baise, CMC Chip Cummings, CMC Eric Kistka, CMC, CRMS Pava J. Leyrer, CMC, CRMS Minnesota Jason Decker, CRMS Christopher Dueffert, CRMS

NAMB PERSPECTIVE Shannon Roepke, CRMS Jayne B. Sims, CRMS J.J. Sims, CRMS

Tennessee Sheila Lipman, CRMS Brian C. Short, CMC, CRMS, GMA

Mississippi Robert D. Capps, CRMS Daniel J. D’Amico, CRMS Vickie S. Graves, CRMS Kenneth A. McNeal, CRMS

Texas Harry H. Dinham, CMC John H. Hudson, CRMS Jolene Jaehne, GMA Olga Kucerak, CRMS Karl LeBlanc, CRMS Henry Lesmeister, CRMS Stacy London, CMC Terry J. Morrow, CMC

Missouri Andrew Conner, CRMS

Robin C. Morton, CRMS Jim Pair, CMC William Parker, CMC, CRMS Jerry Rutledge, CMC April Schummer, CRMS Jeffrey Shealey, GMA

New Mexico Ginger Bell, CRMS Wes Moore, CRMS New York Jim Barry, CMC Donald Henig, CMC Seth Rapport, CRMS Jessica Schoen, CRMS

NAMB+ is an independent, wholly-owned, for-proﬁt marketing subsidiary of NAMB, The Association of Mortgage Professionals.

Oregon Andy Harris, CRMS Matt Jolivette, CMC Tami Konkel, CRMS Stephen C. Salveson, CRMS Kerry L. Vasquez, CMC Pennsylvania Wayne Angelo, CRMS Michael J. D’Alonzo, CMC George Hanzimanolis, CRMS James E. Martin, CMC, CRMS Stephen M. Matthews, CRMS Mark Mazzenga, CMC Kevin McElwain, CMC Daniel Thierry, CRMS Deborah A. Webb, CMC South Carolina James Taylor, CMC

Dear Mortgage Professional, I have some exciting news! You can now connect directly with NAMB+ on social media! As you know, part of what NAMB+ does is connect mortgage professionals with special offers, discounts, promotions and pricing on products and services that will help you every day. Social media is going to help NAMB+ bring you these deals and introduce you to our growing list of Endorsed Providers in a whole new way. We need to build our audience and make sure we are communicating and delivering the content that all of you want. So, right now, please take a few minutes and connect with us on any or all of your favorite social networks. Links to our pages are below. Finally, please do not hesitate to give us some feedback on how we’re doing. We really do want to hear from you, after all, it is social media!

BetterLoanOfﬁcers.com is free to get started with the option to upgrade if you’d like. As an NAMB member optional upgrades are discounted by 10%.

As an NAMB member, Birchwood Credit Services will waive the sign up fees! It’s a “NO RISK” way to experience the Birchwood difference ﬁrsthand!

Twitter: @NAMBPlus Facebook: https://www.facebook.com/NAMBPlus Google+: NAMB+ Instagram: https://instagram.com/nambplus/ Pinterest: https://www.pinterest.com/nambplus/

John G. Stevens, CRMS, President NAMB+, Inc. John@JohnGStevens.com • NAMBPlus.com • @JohnGlennStevens https://www.facebook.om/JohnGStevensUtah https://plus.google.com/114643023635445909618/posts See below for a complete listing of the current NAMB+ Endorsed Providers and visit NAMBPlus.com for more information.

NAMB members receive a 15% discount on all Custom Canvas Prints products and services!

LoanSquatch allows NAMB members to reduce their monthly pricing from $19.99 per month to $9.99 per month and the ﬁrst month is just 99 cents!

LoanTek’s platform is designed to save time, create better leads, and convert leads into new business. NAMB members receive a discount off Brokers Compliance Group compliance support programs.

BusinessETouchCRM provides a Cloud based CRM for only $29.95 a month for NAMB members.

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

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

SYNCRO connects mobile salespeople to their ofﬁce website leads. NAMB Members receive a 10% discount off regular prices for monthly unlimited SYNCRO Web Chat packages.

NAMB members get special pricing plus 1 month FREE.

The Bond Exchange is a national surety agency specializing in providing mortgage license bonds to thousands of mortgage professionals across the country.

NAMB members receive a 10% discount on Path2Buy’s one-on-one coaching service. USA Business Lending is the nation’s premier brokerage ﬁrm representing over 3500 lenders.

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n National Mortgage Professional Magazine n MARCH 2015

Ohio Kevin Ary, CRMS Dennis Fisher, CMC, CRMS Robert Mahaffey, CRMS Jim Nabors, II, CMC, CRMS Erick A. Parker, CMC, CRMS Duy Vu, CRMS Phenon Walker, CRMS

Wisconsin John L. Stearns, CMC, CRMS

NationalMortgageProfessional.com

North Carolina Donald E. Fader, CRMS Neill E. Fendly, CMC David M. Overcast, CRMS Jeffrey Trout. CRMS

West Virginia Marc Savitt, CRMS

Virginia Bernice Brown, CRMS

Nebraska Brent Rasmussen, CRMS

New Jersey Richard L. Jarocki, CMC

Washington Stephen Bozick, CMC Edward Irwin, CMC Patricia L. Naselow, CMC

Utah David Luna, CRMS Nathan Pirerce, CRMS John Stevens, CRMS

Montana Rni Arnett, CRMS, GMA Tavell Peete, CMC, CRMS

New Hampshire Michael Loffredo, CMC Paul R. Sliker, CMC

Jason Crigler, CRMS Richard L. Gilbert, CRMS David E. Shelor, CRMS

NMP M O R T G A G E

Donna DelMonte

NationalMortgageProfessional.com

MARCH 2015 n National Mortgage Professional Magazine n

P R O F E S

Senior Vice President of Product Development StreetLinks Lender Solutions BY PHIL HALL

onna DelMonte has

more than 20 years

Magazine spoke with DelMonte

“OUR GOAL AS STREETLINKS IS TO OFFER

experience in the

from her office in Orange County, Calif., on her work with StreetLinks

mortgage industry.

ONE-STOP SHOPPING FOR LENDERS THAT

In the course of her

RELY ON AND TRUST OUR DATA.”

and her views on the state of the industry.

career, she has

managed wholesale and retail

NMP: What makes StreetLinks

lending operations for major

vice president of wholesale lending

introduced its StreetLinks QX

stand out from its competitors?

lenders, with responsibilities that

at NovaStar Mortgage Bank and

product, a highly regarded

Donna DelMonte: To me, it is the

spanned across the entire

vice president of sales at OneWest

automated appraisal review tool. In

StreetLinks team—the people, the

residential home loan process,

Bank.

a corporate release, StreetLinks

leadership and the core values

singled out DelMonte for praise,

that define us and the Assurant

from origination and underwriting

In July 2010, DelMonte joined

through risk management and

StreetLinks Lender Solutions, an

noting “StreetLinks QX has since

organization. Our leadership team

secondary marketing. She has

appraisal management company

improved our own collateral

is comprised of experienced

gained prominence over the years

and mortgage solutions provider of

underwriting efficiency by 40

appraisal management experts

with high-profile positions

Assurant Inc. She currently holds

percent and is utilized by top

and lending professionals from

including senior vice president of

the position of senior vice president

lending institutions nationwide, with

diverse backgrounds, creating a

operations at United Lending

of product development.

1190.91 percent growth in number

unique balance that allows us to

of customers in 2013.”

challenge ourselves and to keep

Group, senior vice president of operations at GMAC-RFC, senior

Under DelMonte’s team leadership, StreetLinks successfully

National Mortgage Professional

our vision in line with the lenders

S I O N A L

O F

T H E

M O N T H

and appraisal professionals

determine their likes and dislikes

research quality tools and need

all time to do an internship and

across our industry.

of the products that are

to understand how the use of

use that experience to learn

currently out in the marketplace.

these tools can impact their

what she wants to do.

You have been in the mortgage

We use that information as a

business. I believe the release of

industry for more than two

sounding board for what to

CU, along with recent and

What projects are you

decades. How has the industry

develop or refine next.

upcoming regulatory changes,

currently working on?

will leave lenders heavily focused

We are continuing to focus on

changed, for better and for worse?

As a team leader, what do you

on further standardizing

our AppraiserPlus program,

It has changed a lot! I started

look for when seeking out

procedures, ensuring compliance

which generates ACH payment

back when we had to type out

individuals to be part of your

and attempting to lower costs

within one business day of an

loan documents. It was time-

team?

across the board.

appraiser completing an

consuming and paper-intensive.

There are certain things that I

We even had to glue

always look for: Leadership

Do you see mortgage banking,

results with this program. We

photographs to the documents.

quality and an individual who

as a whole, and the valuation

are also continuing to improve

There was not a lot of security

understands the goals of the

sector, in particular, as a

on the technology behind

and control over the process.

organization. It is very important

strong career environment for

StreetLinks QX and our suite of

Things would become lost on

to have a team member who

young people coming out of

products. Our goal at

cabinets and left on someone’s

has a positive attitude and is

college and into the workforce?

StreetLinks is to offer one-stop

desk.

able to contribute their ideas to

Now that is a question that has

shopping for lenders that rely on

us. They also need to display

not been asked in a long time!

and trust our data.

overall, it was a good learning

honesty and integrity, and know

Both of those career paths offer

experience. Today, many of the

the importance of doing the

great opportunities for young

Outside of work, how do you

tasks you used to do manually

right thing.

professionals. They have certainly

spend your leisure time?

In retrospect, I can say that,

inspection. We’ve had fantastic

Another important factor is

been very good for me and my

I am a huge boater and am a

technology, such as automated

flexibility. Things change and we

peers. We all experienced the

fisherwoman. We’ve had a boat

underwriting utilities and

want employees who can

ebb and flow of the industry

for more than 15 years, and I

appraisal review tools. That

successfully adapt to change

throughout the years, but overall

love to go out to Catalina and

clearly makes things much

and are able to contribute new

it continues to grow and can

go fishing in the local waters.

easier. But at the same time,

ideas to the success of the

always use new minds to offer

There is great weather there all

there have been many new

company.

fresh ideas and perspectives.

year round!

regulatory guidelines that lenders

And finally, interpersonal skills

I strongly believe in offering

are crucial. A successful team

internships so that college

Phil Hall is managing editor of

and adherence can create more

member is one who is

students can understand what

National Mortgage Professional

opportunities for potential

comfortable communicating with

the pros and cons are for this

Magazine. He may be reached by

problems, delays and expenses

people.

type of industry. I have a

e-mail at

daughter in college and I tell her

philh@nmpmediacorp.com.

for lenders, which can trickle down to the consumer.

What is your opinion of Fannie Mae’s Collateral Underwriter,

What are the primary

and how will it impact the

considerations that go into the

appraisal process?

development of StreetLinks’

It is a new process for everyone

automated valuation tools?

and has certainly brought the

First and foremost, we design

industry’s attention to how

products that challenge the

lenders handle their quality

status quo. If we cannot create

control procedures.

something better than the

As with anything new, people

products that are already

need to be aware of what is

available, we are not going to do

required and be properly

it. At StreetLinks, we listen very

prepared before using it. Then

closely to our customers to

again, lenders always need to

www.nationalmortgageprofessionalmagazine.com

n National Mortgage Professional Magazine n MARCH 2015

need to comply with. Oversight

NationalMortgageProfessional.com

are now done instantly with new

Improved Mortgage Origination Volume Hi

By Nicolle Nelson hen it comes to mortgage origination volume, the news lately has been good. The Mortgage Bankers Association (MBA) forecasts that the industry will originate $1.22 trillion in mortgage loans in 2015, which would be a significant climb from 2014’s total ($1.12 trillion). While many predicted the return to prominence of the purchase transaction (MBA forecasts $731 billion in purchase transactions in 2015, up from $638 billion in 2014), the Federal Reserve Board’s proclamation that the interest rate will remain low has kept the refinance market alive and well (although a modest $7 billion gain is forecast by MBA in 2015, many had earlier predicted a decline in refinance originations for this year). The bottom line is that the market

“The traditional cycle of increasing fixed costs (including staffing) during times of increased demand, only to cut capacity when the market decreases, is expensive, time-consuming and painful.” for home loans is finally improving. Although the regulatory environment has been turbulent for some time, a combination of dramatically lower gas prices, a consistently miniscule interest rate and an improving national employment number indicate that Americans will be seeking more mortgages this year than last. If the MBA forecast is to be accepted, however, total mortgage origination volume will again decline in 2016 (to $1.17 trillion). Although it is far too early to have a good perspective on where the mortgage industry

will be in 2016, the number explains why so many lenders and originators remain uneasy. Origination volume is improving, but we are not in a “hockey stick” style recovery. There will be starts, stops and bumps in the road. The impact of fluctuating demand for mortgages can be significant for lenders and originators of all sizes. The traditional cycle of increasing fixed costs (including staffing) during times of increased demand, only to cut capacity when the market decreases, is expensive, time-consuming and painful. The firm that pares

its expenses to run lean then risks being unprepared or unable to react the next time a market opportunity arises. On the other hand, no originator or lender can afford to carry through a market slump the same fixed costs needed to capture business during upcycles. The cost to originate a mortgage loan is already increasing because of regulatory and compliance demands. With the likelihood that the market will continue to fluctuate, how does a mortgage business find the flexibility to adapt?

Start by assessing your operation … are there still areas where costs can be contained or cut? Most agree that mortgage processes typically become inefficient during high volume periods, such as the recent refinance boom. These inefficiencies are generally not obvious until the market declines, at which point they become glaringly appar-

ighlights the Need for Flexibility

A critical review of your operation and processes is often very difficult to do objectively. The people managing and executing at ground level are rarely able to step back and view the process objectively. Oftentimes, the managers or executives charged with the review are familiar with few, if any, operational optimization tools. They are also frequently unable to spare adequate time for such review because of the demands of their dayto-day work. As a result, using a

underwriting cycle. Can it be shortened without sacrificing quality control? The answer, most often, is “yes.” The third is the workflow of the origination process itself. Numerous inefficiencies frequently arise over time when it comes to origination, and it often takes an outside and objective expert to root these out.

Outsourcing … a whole new ballgame “Outsourcing” any number of func-

continued on page 32

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© Copyright 2007-2015 Carrington Mortgage Services, LLC headquartered at 1610 E. Saint Andrew Place, Suite B150, Santa Ana, CA 92705. Toll Free 800-561-4567. NMLS ID 2600. Nationwide Mortgage Licensing System (NMLS) Consumer Access website: www.nmlsconsumeraccess.org. AZ: Mortgage Banker BK-0910745; 2159 McCulloch Blvd 4, Lake Havasu City, AZ 86403. CA: Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, File 413 0904. CO: Check license status of your mortgage loan originator at http://www.dora.state.co.us/real-estate/index.htm. GA: Georgia Residential Mortgage Licensee 22721. IL: Illinois Residential Mortgage Licensee. KS: Supervised Loan License SL.0000313. KY: Mortgage Loan Company License MC21112. MN: This is not an offer to enter into an interest rate lock agreement under Minnesota Law. MO: Residential Mortgage Broker License 09-1746-S. NH: Licensed by the New Hampshire Banking Department. NJ: Licensed by the N.J. Department of Banking and Insurance. NY: Licensed Mortgage Banker—NYS Department of Financial Services. New York Mortgage Banker License B500980/107664. OH: Ohio Mortgage Broker Act Mortgage Banker Exemption MBMB.850208.000 (FHA, DE & VA automatic loans only) OR: Mortgage Lender License ML4886. PA: Licensed by the Department of Banking. RI: Rhode Island Licensed Lender, Lender License 20112809LL. VA: Licensed by the Virginia State Corporation Commission MC5382. WA: Consumer Loan License CL2600. Also licensed in AL, AR, CT, DE, DC, FL, ID, IN, ME, MD, MI, MT, NM, NC, OK, SC, TN, TX, UT, WV and WI. NOTICE: All loans subject to credit, underwriting and property approval guidelines. Offered loan products may vary by state. There is no guarantee that all borrowers will qualify. Restrictions may apply. This is not a commitment to lend. Terms, conditions and programs are subject to change without notice. This information is for mortgage professionals only and is not intended for distribution to consumers. Carrington Mortgage Services is not acting on behalf of or at the direction of HUD/FHA or any office of the federal government. All rights reserved.

n National Mortgage Professional Magazine n MARCH 2015

Review your costs objectively … or get someone to do it objectively for you

third-party service provider can bring an unbiased perspective as firms reexamine their processes. Some can even provide the same services at a lower cost while also helping to improve quality and turn time. We frequently see three specific processes which can be improved, no matter how big or small the firm. The first is loan registration (or loan boarding). There is usually much room to improve turn time in this process. Second, unsurprisingly, is the

NationalMortgageProfessional.com

ent. Somewhat surprisingly, the strategy for managing costs in a tough environment shouldn’t really change from cycle to cycle. There are a number of typical places to look at to find these opportunities. The areas that tend to have the greatest influence on costs include things like breadth of products supported, infrastructure (IT, technology) or channels and geographic markets being served. Streamlining/eliminating/modifying these generally brings the quickest impact, but these areas are often the hardest to optimize as well. The next area to scrutinize is the structure of the origination business. Is it centralized? Does the scale allow the firm to operate in certain geographic markets or offer certain products? Then come the systems, workflow tools, resources and their capacity, followed by staffing levels and productivity. As you assess your operation, consider the following questions as well. Are there unnecessary redundancies in your origination or production process (such as systemic re-keying of data)? Do those involved in producing the loan (including vendors, partners and staff) have access to effective, efficient communication systems? (Have we moved past the era of phone tag and the fax to a new era of systemic communication and 24/7 availability for status updates?). Does the technology you use allow you to do business in a flexible and efficient fashion … or is the firm being forced into less efficient processes simply to accommodate its technology (or that of vendors)? All too often in the past, mortgage businesses have selected their technology platforms without considering ease of use, how those systems fit their workflows or ability to integrate with other systems. That is changing, and will allow mortgage businesses to get more production from their resources instead of simply bringing in additional resources each time demand improves.

tions in the loan origination process is nothing new to the mortgage industry. Lenders and originators have outsourced numerous “back office” operations for decades to successfully and significantly contain or cut their expenses. But the way it is being done today is different, making it a viable (and preferable) option for more functions than ever. Although some of the largest lenders are increasingly bringing formerly outsourced or managed functions “in house” to manage risk, small- or even mid-sized mortgage businesses simply do not have the resources to do so.

The CFPB’s Future and the Bureau’s Impact on the Credit Reporting Industry By Terry W. Clemans

MARCH 2015 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

The battle over the structure of the Consumer Financial Protection Bureaus’ (CFPB) leadership and funding is now raging. Recently, as CFPB Director Richard Cordray was providing the latest semiannual reports to Congress, six bills, HR1261-HR1266, introducing legislation that if signed into law, would bring a massive overhaul to the Bureau. In the hearing’s opening statement, House Financial Services Committee Chairman Jeb Hensarling (R-TX) a conservative and outspoken advocate for limited government, set the table for the bills being dropped into the legislative hopper with the following statement: “The CFPB is perhaps the single most powerful and least accountable federal agency in all of Washington and demands rigorous oversight.” He went on to expand about the CFPB’s power, “When it comes to the credit cards, auto loans and mortgages of hardworking taxpayers, the CFPB has unbridled, discretionary power not only to make them less available and more expensive, but to absolutely take them away. This is not the rule of law, it is the rule of rulers and the rulers are unaccountable. The Bureau is fundamentally unaccountable to the president since the director can only be removed for cause. Fundamentally unaccountable to Congress because the Bureau’s funding is not subject to appropriations. Fundamentally unaccountable to the courts because Dodd-Frank requires courts to grant the CFPB deference regarding its interpretation of Federal consumer financial law. Thus, the Bureau regrettably remains unaccountable to

“The CFPB is perhaps the single most powerful and least accountable federal agency in all of Washington and demands rigorous oversight.” —Rep. Jeb Hensarling, House Financial Services Committee Chairman the American people.” Of course Director Cordray’s statement countered Chairman Hensarling’s with his account of the CFPB’s actions to positively change the various sectors of the financial services landscape over the last six months, and sometime referencing back to the young agencies creation as part of the Dodd-Frank Financial Reform of just a few years ago. He has used this vast power swiftly in many ways, bringing about many changes at warp speed, compared to the regulatory process pre-CFPB. While the perspective of the Bureau’s actions are very much open to debate with very strong opinions on both sides, the position of Chairman Hensarling is undeniable. The bills introduced are focused on his statement, and will attempt to bring some balance and accountability to the current power structure. The most obvious changes being sought revolve around the CFPB’s leadership, bringing in a commission (like most other government agencies) and the funding, moving it to the normal appropriations process regulated by Congress. While only Republican bills, with a veto waiting at the White Housing door unless some Democrats join in, hardball politics on this issue will be entertaining to watch in the months ahead. Regardless of the outcome of that battle, we are going to focus on the some of the changes the CFPB has brought

about with that unprecedented in the credit reporting industry. Director Cordray’s statements delivered in two recent important statements that featured the credit reporting industry as the only topic, or a major portion of the address. The first was on Feb. 19 when the CFPB’s Consumer Advisory Board met where credit reporting, credit scoring and collections comprised the entire agenda. Then, less than a week later, Cordray addressed the National Association of State Attorney Generals, and in this speech, while covering many topics, featured credit reporting prominently in his target issues. In addressing the state attorney generals, Cordray stated, “Robert F. Kennedy once said something that is apt for the work we all do: The challenge of politics and public service is to discover what is interfering with justice and dignity for the individual here and now, and then to decide swiftly upon the appropriate remedies.” I have spoken with you before about some of these obstacles that interfere with justice and dignity for consumers—which we regularly refer to as ‘The Four Ds.’ We see them much too often: Deceptive Marketing, Debt Traps, Dead Ends and Discrimination. Today, I would like to revisit these obstacles and describe some of the progress we are making to combat them.” When expanding on “The Four Ds,”

credit reporting and collections were his examples of consumer “Dead Ends,” recalling his days as the Ohio Attorney General as his first experiences with consumer dissatisfaction with credit reporting and how it continues today at a national level. A commonality to both his addresses and a driving force for his desire to change the credit reporting industry is the “profound influence on their lives” and that consumers have “limited clout because they cannot choose the businesses they are dealing with” in credit reporting which he referred to as an industry that has been a “mystery for decades.” He clearly believes that “mystery” is going to be solved, as he told the attorney generals about the “things we are doing to pry it open, to help ensure that people are being treated fairly, and to make sure that consumers are not encountering dead end after dead end when they run into trouble.” Examples he cited as changes to the industry that will provide immediate improvement to the consumer experience is the “securing of important upgrades to e-Oscar.” E-Oscar is the system used to process consumer disputes between the credit bureaus and creditors. The big improvement the CFPB brought here was the inclusion of consumer documents (when provided by the consumer) to the creditor to support the dispute, instead of just a generic code for the base reason of the dispute. Another of his recent initiatives has been the pursuit of creditors to provide consumers their credit score, for free, as part of their monthly billing statement. Since many creditors often access the consumer’s credit report and score for the accounts they service, many times even monitor the credit report and score monthly, they have the data in their file. Director Cordray

forward in their financial lives.” In addition to the changes to e-Oscar, the CFPB is requiring a new report from the national credit bureaus about the quality of the data being provided by the credit furnishers. This is going to be done by looking at the amount of disputes filed vs. the creditors, and shows the CFPB understands that the credit bureaus are only as accurate as the data they are sent. Another issue addressed in the Advisory Board Meeting was that of medical collection accounts which I have written about many times previously. Cordray clearly believes that these accounts are not reliable to use for evaluating a consumer’s credit worthiness, due to so many of the

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•••••••••••

Note, I referred to the consumer’s data in the credit file, not the credit reporting agencies’ data. Director Cordray stated, “The information on our credit reports is, after all, our information, not theirs” this is position about the data is another example of power the CFPB is showing that previous federal agencies did not have. Now we will have to watch as the Red and Blue powers in Congress and the White House flex their muscles over the future structure of this agency.” Terry W. Clemans is executive director of the National Consumer Reporting Association (NCRA). He may be reached by phone at (630) 539-1525 or e-mail tclemans@ncrainc.org.

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H S E FR R T

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issues NCRA and NAMB—The Association of Mortgage Professionals have repeatedly cited while supporting the Medical Debt Responsibility Act. While Director Cordray acknowledges the newest score models have lowered the importance of medical debts, hopefully he realizes that the limited use of the newest scores for some of the most important lending decisions, like mortgage loans, is not yet a reality. Since Fannie Mae, Freddie Mac, and HUD continue to use FICO score models that are almost 10years-old, medical accounts will remain part of the lending decision as long as the account itself remains part of the consumer’s data in the credit reporting file.

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A M G R O P R

MORE CHOICES FOR YOUR BORROWERS

WITH OUR

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PROGRAM

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Contact us today to learn more about Fresh Start and other innovative ﬁnancing options that may be available to your borrowers.

Caliber Home Loans, Inc., 33701 701 R Regent egent Boul Boulevard, evard, Ir Irving, ving, TX 7506 750633 (NMLS # #15622). 15622). 1-800-40 1-800-401-6587. 1-6587. Copyright©2015. Copyright©2015. All Rights R Reserved. eserved. Equal Housing Lender. Lenderr. For For real real estat estate e and llending ending pr professionals ofessionals only and not ffor or distribution tto o cconsumers. onsumers. This ccommunication ommunication may may contain contain information information that is privileged, privileged, confidential, confidential, legally legally privileged, privileged, and/ and/or or e exempt xempt fr from om discl disclosure osure und under er applicabl applicable e la law. w. Distribution tto o the g general eneral public is pr prohibited. ohibited. Caliber Home Loans, Inc. is required required to to disclose disclose the following following license license information: information: Alask Alaska aM Mortgage ortgage Lend Lender er Lic License ense No No.. AK AK15622; 15622; Arizona M Mortgage ortgage Bank Banker er License License No. No. 0923637; 0923637; Licensed Licensed b byy The Depar Department tment of Corporations Corporations under under the California California Residential Residential M Mortgage ortgage Lending A Act, ct, FFinance inance Lend Lender er Lic Licensee; ensee; C CO: O: R Regulated egulated b byy the Division of R Real eal Estat Estate; e; DE: Lic Licensed ensed b byy the Dela Delaware ware State State Bank Commissioner, Commissioner, License License 5202 e expires xpires 12/ 31; Georgia R esidential Mortgage Mortgag g e Lend er Lic ense No Residential Mortgage Mortgage Lic ensee No 3, b est W 12/31; Residential Lender License No.. 7330; Illinois Residential Licensee No.. MB.000404 MB.0004043, byy the Illinois Division of Banking, 320 W West Washington ashing ton St., Spring Springfield, field, IL 62 62786, 786, (217) 7782-3000; 82-3000; K Kansas-licensed ansas-licensed mor mortgage tgage ccompany, ompany, Lic License ense Number SL SL.0000796; .0000796; Minnesota: MN-M M MN-MOO- 40 40149066, 149066, This is not an off offer er tto o ent enter er int into o an agr agreement. eement. An Anyy such off offer er ma mayy only be mad made e in ac accordance cordance with the rrequirements equirements of Minn. Stat. Section 4 47.206 7.206 (3) and (4); Lic Licensed ensed b byy the Mississippi Department Department of Banking and C Consumer onsumer Finance; Finance; Montana Montana M Mortgage ortgage Lend Lender er Lic License ense No No.. 15622; Lic Licensed ensed b byy the New Hampshir Hampshire e Banking Depar Department; tment; NV NV:: 33753 753 Ho Howard ward Hughes P Parkway, arkway, Suit Suite e 25 257, 7, Las V Vegas, egas, NV 89169 89169,, (702) 7784-5975; 84-5975; Lic Licensed ensed mor mortgage tgage bank banker er n.s.--N.J. Depar Department tment of Banking; g; Lic Licensed ensed M Mortgage ortgag g e Bank Banker-NYS er-NYS Depar Department tment of Financial F inancial Ser Services; vices; Ohio MB MBMB.850184.000; MB.850184.000; Or Oregon egon M Mortgage ortgage Lend Lender er Lic License ense ML ML-324; -324; Rhod Rhode e Island Lic Licensed ensed Lend Lender; er; V VA: A A: NMLS ID # 15622 (www (www.nmlsconsumeraccess.org); .nmlsconsumeraccess.org); W Washington ashing ton C Consumer onsumer Loan C Company ompany Lic License ense No No.. CL CL-15622. -15622.

n National Mortgage Professional Magazine n MARCH 2015

Features Included in our Fresh Start Program

FRESH START

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claimed this initiative has grown from just three companies, (with Discover being one of the first big providers of this service) to now include more than a dozen financial intuitions affecting 50 million consumers. In the CFPB Consumer Advisory Board meeting, Cordray’s opening statement to the group provides a more in-depth look into the path and future objectives of the agency regarding credit reporting. An observation from both opening statements is that this agency understands the credit reporting industry far better than previous regulators, and is using the “first-time ever” powers he has been granted by Congress to continue an aggressive approach changing the way the industry operates that will benefit consumers and leave a lasting legacy if the CFPB goes through a major structural overhaul in this Congressional session. As examples of this understanding, in the early portion of his statement he reiterates the great importance the industry has on consumers’ lives and that unlike most businesses consumers cannot “vote with their feet” when it comes to credit reporting. This appears to be one of the driving forces the Director has in bring change to the credit reporting industry. The combination of inescapable importance on the consumers’ financial existence, combined with millions of consumer complaints about the “mystery” in which the industry operates. This has driven the CFPB use their examination ability to look at the inner workings of the systems in place, the long-time practices, and is turning up the pressure on the industry to perform better. Cordray stated, “Because of the importance that credit reports have in consumers’ lives, we all need this industry to operate at the highest levels of quality and performance. As consumers develop greater awareness of these issues and intersect more routinely with the credit reporting companies, we need those companies to become more responsive to the very people whose information, after all, is the core element of their business.” The Director makes the connection between handling consumer disputes and report accuracy when he states, “We want to see how disputes get resolved as part of our work to ensure that millions of consumers are not being wrongly denied access to credit or charged more than they should be for taking out a loan. Moreover, we are seeking to ensure that the credit reporting companies are taking all reasonable measures to assure maximum possible accuracy as required by the Fair Credit Reporting Act. After all, even an accuracy rate that seems high taken in the aggregate—say, 95 percent, for example—would mean that more than 10 million consumers could have problems in their credit reports that can impede their path

How Brokers Can Earn More by Lending to Landlords By Ryan Dunphey

MBA’s Mortgage Action Alliance

There are four compelling reasons that mortgage brokers should take the buy-to-rent investor seriously as a great source of new business in 2015 and a very good way to build their businesses during a time when other lines of business are not performing well. A viable focus When a mortgage broker differentiates themselves from their competition, they have a distinctive competence that qualifies them to do work better than others—or work that others don’t even do—they prove themselves to be a valuable resource. Very few mortgage brokers are catering to this particular real estate investor at this time, making it an excellent opportunity for a broker that wants to specialize in a defensible niche. Depending upon your location, this could be an auxiliary product, allowing you to say “yes” to prospective customers more often. For others, it could become a large part of your business. Even better, it’s a product offering that blends the best of residential mortgage lending with aspects of commercial mortgage lending. This has the effect of making the broker who understands it very attractive to real estate agents, accountants, commercial brokers and other referral partners who have clients seeking hybrid financing options.

MARCH 2015 n National Mortgage Professional Magazine n

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An empty niche This market is just heating up, fueled by a new class of mortgage bonds backed by loans made to this community. That means that more lenders may be looking at this market in the future. Now is the time for brokers to establish their leadership in the buy-to-rent market, before other brokers move into the space. This is great news for real estate brokers, who know who the investors are in their geographies but have had limited access to good financing options to offer them. Those who form relationships with these referral partners first will have the best chance of earning money from those relationships for years to come. The deals are easier today than in the past Experienced loan originators will tell you that writing loans for investment properties, especially when the investor already owns four single-family homes, is a laborious process that takes a great deal of time and rarely results in affordable financing. In the past, this was true. But today’s market is different. Today’s buy-to-rent investors have access to the same capital that financed the big Wall Street players. It’s available through a streamlined application process with underwriting that takes into account the property’s anticipated cash flow. Mortgage brokers can now help these investors increase the size of their portfolios and even pull cash out by refinancing them, singly or in a group. These investors are highly motivated to transact This may be the biggest reason for mortgage loan brokers to investigate this opportunity now: these investors have very few options available to them today. That may not always be the case, but for the foreseeable future, the brokers who reach out to them today will be able to provide the financial solutions they have been looking for. Ryan Dunphey works with B2R’s wholesale lending platform, advising third parties and facilitating access to B2R’s financing options for their clients. For more information, call (888) 495-7731 or visit http://info.b2rfinance.com/NMP.

SPONSORED EDITORIAL

A Message From MAA Chairman Fowler Williams

s the 2015-2016 Mortgage Action Alliance (MAA) chairman, I want to share with you some of the reasons active engagement and advocacy are essential to the future of our industry. MAA is a unique program that harbors the strengths of every segment of real estate finance. We are a free, voluntary and non-partisan nationwide grassroots lobbying network dedicated to strengthening the industry’s voice and lobbying power in Washington, D.C. and state capitals across America. The policies and legislation the industry faces impact our day-to-day jobs in tangible ways. We have a right and duty to join that conversation. We have a right to speak freely. We have a duty to speak up. As a representative of an industry that employs hundreds of thousands of Americans, you cannot sit idly by while decisions are made that affect us all. You have a choice—watch it happen and accept what may come, or be an active participant. Our next “must-attend” event is the MBA’s National Advocacy Conference 2015, set for Tuesday-Wednesday, April 14-15 at the Capital Hilton in Washington, D.C. Whether you are brand new to our industry advocacy efforts or have been active for years, the MBA’s National Advocacy Conference 2015 will help you find out what the issues are, learn how they affect your business, and get tips and talking points for discussions with lawmakers. And that’s just Day One. You’ll also get the chance to put the skills you learn in our seminars into practice. On Day Two, you will join your colleagues on Capitol Hill for a day of democracy in action. We will line up face-to-face meetings with lawmakers and key policy staff that represent you in Washington, D.C., and give you the chance to tell them how their actions affect your business. You have the right to be heard. Make your plans to attend the National Advocacy Conference 2015 today. Together, we CAN make a difference. Getting involved with MAA allows industry professionals to play an active role in how laws and regulations that affect the industry and consumers are created and carried out by lobbying and building relationships with policymakers. It only takes a moment to get started, and you do not have to be a member of MBA to enroll. The larger the group, the louder the voice! If you would like to run a MAA campaign, please contact Stephanie Graham at (202) 557-2818 or e-mail sgraham@mba.org to receive an enrollment campaign kit and learn more about how you can engage your colleagues and employees in MBA’s advocacy programs. Real estate finance industry professionals who wish to join or learn more about MAA can do so at www.mortgageactionalliance.org. If you have any questions regarding MBA’s advocacy programs, please contact MBA’s Assistant Director of Political Affairs Annie Gawkowski by phone at (202) 5572816 or e-mail agawkowski@mba.org. Fowler Williams is chairman of the Mortgage Bankers Association’s Mortgage Action Alliance. He is also president of Atlanta, Ga.-based Crescent Mortgage. Williams speaks regularly to financial institutions and their respective organizations on compliance, regulatory changes in mortgage lending, and assessing their overall mortgage operations to maximize income, while minimizing the risks associated in today’s mortgage lending environment. He may be reached by phone at (800) 851-0263 or e-mail fwilliams@crescentmortgage.net.

new to market continued from page 18

Builder through a secure, paperless exchange of documents, Dirrane said. “Our lender customers who use Blueprint are now able to transmit their documents seamlessly,” he said. “It’s another option we offer our customers to transmit loan documents electronically and securely.”

ISGN Partners With Fiserv on Default Servicing Platform and Launches LoanDynamix Loan Servicing System

are looking to replace their core platforms.”

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

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

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Always stay in touch with the market when on the go with our Mobile Web App. It's fast and easy to use. Whether you have an iPhone, Android, Blackberry, Windows Phone, you'll always have access to MBS Highway. No downloads, no annoying updates, just visit m.mbshighway.com in your phone or tablet's browser.

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ISGN Corporation has announced that longtime strategic partner Fiserv Inc. has fully integrated ISGN’s Tempo default servicing platform within its LoanServ loan servicing platform. Tempo is now the preferred default platform for mortgages supported on LoanServ from Fiserv. ISGN’s Tempo is an end-to-end, Software-as-aService (SaaS)-based default management platform and system of record that helps servicers, attorneys and vendors manage and track the default lifecycle from the collection/early intervention stage all the way through to liquidation, including bankruptcy and foreclosure attorney processes. The integration of Tempo will enhance the LoanServ platform’s loss mitigation capabilities to meet the needs of today’s servicers, as well as position servicers for the emerging market. “Our goal was to expand the capabilities of LoanServ to specifically help clients manage portfolios of defaulted real estate loans, and Tempo is the most sophisticated default servicing platform available in the marketplace today,” said Joe Dombrowski, director of product management, Lending Solutions at Fiserv. “With this integration, Fiserv clients can continue to improve efficiencies and mitigate compliance risks surrounding the complex default management process, enabling them to stay focused on their institutions’ future growth.” “This partnership reflects our insight into the needs of mortgage servicers and our expertise in delivering solutions to meet those requirements,” said Anne Politis, EVP at ISGN. “ISGN and Fiserv have enjoyed a close, strategic alliance for several years, so this is a natural extension of that relationship.” “ISGN’s expanded partnership with Fiserv enables customers who use both Tempo and LoanServ to achieve unprecedented levels of efficiency and compliance while managing their defaulted loan portfolio,” said Erik Anderson, president of Sales for ISGN. “We frequently hear from servicers who are hungry for a new technology solution that is scalable, predicable, cost-effective and easy to use. We believe this is a big step in that direction.” ISGN Corporation has also announced the release of its latest loan servicing system, LoanDynamix. Built on more than three decades of technology expertise of LSAMS, ISGN delivers its next generation

loan servicing system, LoanDynamix, to meet the new demands of servicing by fusing proven servicing utility with stateof-the-art technology. Delivered through a secure Softwareas-a-Service (SaaS) model, LoanDynamix offers a smooth migration from existing solutions. It is easily accessible from any browser, anytime and anywhere so servicers can work where and how they are most comfortable. Supporting the entire servicing lifecycle, LoanDynamix can scale from a few thousand to more than six million loans while substantially improving operational performance,

supercharging productivity and abbreviating turnaround times. By improving and automating loan boarding, transaction processing and banking, investor accounting, collections and payoffs, LoanDynamix can help servicers increase staff productivity, manage higher loan volumes with existing staff, and increase business profitability. “Mortgage servicing comes with a myriad of challenges,” said Paul Imura, CMO and senior executive of ISGN. “In fact, the majority of mortgage-related complaints received by the CFPB stem from servicing and defaults, and, more than a third are due to routine servicing functions like management of payments, escrow and transfers. Our industry is ready for change. We believe one in three servicers

The Long & Short: The Business of Short Sales

unless the homeowner goes delinquent, and many will be negatively affected when interest only payments at existing higher rates become fully amortized. Pam Marron (NMLS#246438) is senior loan officer with Innovative Mortgage Services Inc. (NMLS#250769). She may be reached by phone at (727) 375-8986 or e-mail pmarron@tampabay.rr.com. Go to www.8Problems.com for Video 4 and Video 5 to show problems of no refinance availability and how shorter term, lower rate escalates home equity.

Footnotes

An Open Letter to President Obama and Federal Housing Finance Agency Director Mel Watt By Pam Marron 1. President Obama: A HARP-like program needs to be available for underwater homeowners who do not have a Fannie Mae or Freddie Mac mortgage. 2. Mr. Watt: HARP needs to be available with unlimited loan to value, the way the guidelines state. And for both programs, stress the idea of a shorter term at the lower refinanced rate, the quickest way to re-gain equity.

Dear President Obama and FHFA Director Mel Watt: I am a mortgage broker of 30 years in Tampa Bay, Fla., one of the hardest hit areas with negative equity properties in the United States. As of December 2014, there were still 7.1 million underwater homeowners, or 13 percent of all mortgaged properties, with negative equity of 125 percent or greater across the U.S.1 First on the Home Affordable Refinance Program (HARP), a refinance program that is supposed to be available for those who own a home that is:

MARCH 2015 n National Mortgage Professional Magazine n

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l Backed by Fannie Mae or Freddie Mac; l Has negative equity; and l The homeowner is current on their mortgage. This program was supposed to offer a refinance with an unlimited loanto-value (LTV), where the amount of negative equity is not capped. Instead, since the program came out, lenders have applied overlays en-masse, limiting maximum LTV, commonly capping the total at 105 percent to 150 percent LTV. You would think that these lenders would apply written guidelines to insure that these homeowners continue to stay current. No options are given to these homeowners who must go out on their own and research for the handful of lenders that offer HARP at the uncapped LTV. And other than improving customer loyalty, there does not appear to be any incentive for current lenders to assist underwater homeowners. Why? If the homeowner refinances their loan with another HARP lender, that is one less negative equity loan on the books of that initial lender. In February of 2012 during the State of the Union Address2, there was a call on Congress to provide a refinance mortgage for responsible underwater homeowners who do not have a Fannie Mae or Freddie Mac mortgage. No programs were ever put in place. HARP is the only refinance option for underwater homeowners current on their mortgage with a Fannie Mae or Freddie Mac loan. There is no refinance option for underwater homeowners current on their mortgage that do not have a Fannie Mae- or Freddie Mac-backed loan. It seems incredible that we cannot provide a refinance program for mortgage holders who are current on mortgage payments, whether the loan is a Fannie Mae or Freddie Mac loan, or not. This refinance is for performing mortgages and could better the financial picture for 7.1 million homeowners in the U.S. that still have negative equity in excess of 125 percent LTV. And here is the incentive: Show how reducing the loan term3 to 10, 15 or 20 years at a lower interest rate accelerates equity substantially. Show the break-even month and year when the homeowner will no longer have a negative equity mortgage. And, while we are on refinances, could you please find out why mortgage lenders cannot proactively reset performing HELOCs4 and second mortgages to lower, current rates when they are due to be fully amortized for homeowners that are paying on time? There is no refinance option available for these loans

1—Jan. 21, 2015: RealtyTrac: Seriously Underwater Properties Decrease by 2.2 Million in

2014, Down 5.8 Million From Peak Negative Equity in Q2 2012/ Daren Blomquist. 2—Jan. 24, 2012: Blueprint for an America to Last/ President Barack Obama/ http://www.whitehouse.gov/sites/default/files/blueprint_for_an_am erica_built_to_last.p, page 8, “Call on Congress to give every responsible homeowner the opportunity to refinance: Millions of Americans who try to refinance are given the runaround from the bank even though they are current on their payments.” 3—8Problems.com: Problem #4: HARP 2.0 Being Capped By Lenders (http://8problems.com/problem4.html). 4—“56 Percent of 3.3 Million HELOCs Scheduled to Reset With Higher Rates in Next Four Years Are on Underwater Homes,” RealtyTrac Staff: March 4, 2015 (www.realtytrac.com/news/mortgageand-finance/heloc-resets-report).

mortgage origination volume continued from page 27

Fortunately, outsourcing no longer requires originators and lenders to choose either “fast and cheap” or “quality.” Today, the lender demands that such solutions be fast, cheap and done well (as well as compliant). Outsource solutions providers are no longer detached from the mortgage origination process. They are much more knowledgeable and better trained in regard to the entire mortgage transaction. They provide better metrics and better quality control. They are no longer simply data entry specialists. Outsourcing an origination process no longer equates to sacrificing on quality of product. Outsourcing is a time-tested way to cut fixed expenses without sacrificing capability, which is the formula for success in a relatively volatile market. Some outsourcing providers now offer flexible pricing on a pay-as-yougo basis or even based upon transaction volume, which is ideal for fluctuating origination volumes. Outsourcing also offers a far easier ramp-up and ramp-down than maintaining and cutting staffing does. Today, with the regulatory environment bringing heightened scrutiny, some outsource providers even offer additional resources in compliance (auditing, knowledge base and resources, etc.). Finally, the fact that some outsource providers are multinational often means they offer 24/7 operations, making it easier to scale and, quite simply, achieve more in less time.

Choosing your partner carefully Because lenders are now explicitly responsible for the actions of their service providers, it is more important than ever to choose any outsource provider carefully. Does the potential partner have the ability to objectively analyze business operations and advise on the optimal path to meet business goals? Does the

potential partner have clearly defined processes and tools to review key business metrics, technology, platforms and infrastructure? Have they demonstrated the ability to conduct a detailed operational analysis, including organizational structure, functions, processes and regulatory requirements? An effective outsource provider will perform a review of process performance, and use industry benchmarking to help identify the gaps that need to be managed. The partner should be able to define current process challenges and identify existing initiatives in place to address them. Once an outsource provider has been selected, it is critical to maintain strong oversight and communication, including the use of metrics and clearly defined accountability. The partner management team needs to be accessible and visibly active during the course of the implementation—a key component to ensuring the success of the initiative. Although all indicators are pointing to a positive 2015 for the mortgage industry, the big picture suggests what many economists have been saying since 2008: The recovery will have many dips, starts and stops. With origination costs going up, lenders and originators will need to maintain a philosophy of flexibility and adaptation in order to stay successful. We truly are entering a new era in mortgage lending. It is now clear that those willing to rethink the way they did business five years ago and able to innovate in the way they produce loans will lead the way. Nicolle Nelson is vice president of business development at SLK Global, a business process management (BPM) firm that performs operational risk audits to improve processes while reducing costly mistakes. She may be reached by phone at (480) 395-8253.

nmp news flash continued from page 16

mations have now recovered to their pre-recession levels of one million per year. â&#x20AC;&#x153;The freeze in formations is over and people are again moving out and forming households. This means that real estate professionals and policy makers should not keep waiting for pent-up demandâ&#x20AC;? Painter said. â&#x20AC;&#x153;So while a number of factors will continue to influence the housing recovery, household formation is no longer one of them.â&#x20AC;? The study reviewed quarterly data from 1975-2011 and found that threeyear recoveries in household formation were typical for all major employment shocks to the economy in the last 30 years.

Cumberland, Md.-W.Va. topped the affordability chart among smaller markets in the final quarter of 2014. There, 96.2 percent of homes sold during the fourth quarter were affordable to families earning the areaâ&#x20AC;&#x2122;s median income of $54,100. Other smaller housing markets at the top of the index include Kokomo, Ind.; Wheeling, W.Va.-Ohio; Binghamton, N.Y.; and Salisbury, Md. For a ninth consecutive quarter, San Francisco-San Mateo-Redwood City, Calif. was the nationâ&#x20AC;&#x2122;s least affordable major

housing market. There, just 11.1 percent of homes sold in the fourth quarter were affordable to families earning the areaâ&#x20AC;&#x2122;s median income of $100,400. Other major metros at the bottom of the affordability chart were Los AngelesLong Beach-Glendale, Calif.; Santa AnaAnaheim-Irvine, Calif.; San JoseSunnyvale-Santa Clara, Calif.; and New York-White Plains-Wayne, N.Y. All five least affordable small housing markets were in California. At the very bottom was Napa, where 12 percent of all new and existing homes sold were affordable to families earning the areaâ&#x20AC;&#x2122;s median income of $70,300. Other small markets included Santa Cruz-Watsonville, Salinas, Santa Rosa-Petaluma, and San

Your turn National Mortgage Professional Magazine invites you to submit any information on regulatory changes, legislative updates, human interest stories or any other newsworthy items pertaining to the mortgage industry to the attention of: NMP News Flash column Phone #: (516) 409-5555 E-mail: newsroom@nmpmediacorp.com Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

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Slightly lower interest rates and home prices in markets across the country contributed to a slight increase in nationwide housing affordability in the fourth quarter of 2014, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI). In all, 62.8 percent of new and existing homes sold between the beginning of October and end of December were affordable to families earning the U.S. median income of $63,900. This is up from the 61.8 percent of homes sold that were affordable to median-income earners in the third quarter. The national median home price declined from $220,800 in the third quarter to $215,000 in the fourth quarter. Meanwhile, average mortgage interest rates decreased from 4.35 percent to 4.29 percent in the same period. â&#x20AC;&#x153;This upturn in affordability for the final quarter of 2014 is a positive development and is in line with what we are hearing from builders in the field that more prospective buyers are starting to move forward in the marketplace,â&#x20AC;? said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo. â&#x20AC;&#x153;Affordable home prices, historically low mortgage rates and an improving job market will release pent-up demand and help keep the housing market moving forward in the year ahead,â&#x20AC;? said NAHB Chief Economist David Crowe. Syracuse, N.Y. claimed the title of the nationâ&#x20AC;&#x2122;s most affordable major housing market, as 92.8 percent of all new and existing homes sold in the fourth quarter of 2014 were affordable to families earning the areaâ&#x20AC;&#x2122;s median income of $67,700. Also ranking among the most affordable major housing markets in respective order were Akron, Ohio; Dayton, Ohio; Harrisburg-Carlisle, Pa.; and ScrantonWilkes-Barre, Pa; the latter two of which tied for fourth place.

Luis Obispo-Paso Robles; in descending order.

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 ’ S

economic commentary

HAVE By Dave Hershman sually, when we hear that someone or something has “hit bottom”—that is a good thing, because the only direction that person or thing can go from there is up. On the other hand, if we are talking about oil prices and interest rates, hitting a bottom might not be considered a good thing. For example, if you were looking for gas prices to hit $2.50 per gallon, they are not going near that price if we have indeed already hit bottom.

HIT

Indeed, there is some evidence that oil prices bottomed around $45 per barrel. We are not surprised by the fact that oil prices rebounded above the $50 per barrel range because they had fallen so far and so fast. Often markets overshoot the fundamentals and come back to be in balance. Are oil prices going back to $100 per barrel? We have no idea because we cannot predict the future. However, most likely the price will settle somewhere in between $45 and $100 without some major intervening economic or political variable. Of course, in today’s world of

THE

BOTTOM?

uncertainty, such variables are not only possible, they are quite likely. The fact that we don’t know where oil is going is reflected in the very “wide” range we have presented. Interest rates too had been falling for the past few months. Not as precipitously as oil, but one must remember that rates were already very low. The fact that rates went back to the record low levels hit two years ago, was quite extraordinary and certainly not predicted. Like oil, we are not surprised that rates have rebounded somewhat. If last month was the bottom for interest rates, there will likely be a rush

of those who waited too long. When homeowners and buyers realize that, we expect there to be lines forming to refinance or purchase a home. The question: Is there still time to get in front of the line? Dave Hershman is a top author in the mortgage industry with seven books published. He is also the founder of the OriginationPro Marketing System, and currently the director of branch support for McLean Mortgage. He may be reached by e-mail at dave@hershmangroup.com or visit www.originationpro.com.

NMP Daily is the mortgage industry's source for news, insights, trends and tips. It keeps subscribers informed of the regulatory and legislative updates, latest industry happenings and breaking news about the mortgage technologies and services.

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Has Affordability Left the Housing Market ? O BY

PHIL

n Feb. 24, Dr. Anthony B. Sanders, Distinguished Professor of Real Estate Finance at George Mason University in Fairfax, Va., used his Confounded Interest blog to point out a disturbing data trend that clouded the economic numbers at the tail-end of 2014. “The good news ... if you already own a home ... is that the Case-Shiller home price index for December grew at a rate of 4.46 percent year-over-year,” Dr. Sanders wrote. “That is awesome, considering the inflation rate in the U.S. is only 0.8 percent. And wage growth is around two percent. So if you already own your home, you are on easy street. If not, you are on rental street.” Earlier in the month of February, Dr. Sanders focused on affordability in regard to central bank policies. “Housing is getting unaffordable again, in part thanks to the Federal Reserve’s quantitative easing programs,” he stated in a Feb. 9th blog. “House prices are rising, while real median

HALL

household income fell/stagnated. Homeownership and mortgage purchase applications keep falling despite low mortgage rates and massive Fed intervention. Even the 64 percent homeownership [rate] is misleading. Rentership is on the rise in big cities, even in cities where homeowners are the majority.” At first, this might seem confusing. On the surface, it seems that the economic picture is encouraging a greater degree of housing affordability. “Home values are up, interest rates are still down and employment is getting back,” observed Mat Ishbia, president and chief executive officer of Troy, Mich.based United Wholesale Mortgage (UWM). “I don’t think it is relatively harder [to find an affordable house] in today’s market than it was three years ago or it was seven years ago.” But while the bigger picture may seem serene, the situation becomes more complicated when one goes into specific markets—even the supposedly healthier ones. “Our market is one of the better markets in the nation,” said Fred Law, bro-

ker/owner at Law Real Estate, based in the Salt Lake City suburb of Draper, Utah. “We didn’t have the major downturn here. We have an excellent workforce and good economy.” Yet Law pointed out that while his market looks solid on the surface, there are fissures within that create grief. “Our average home price has been around $235,000 to $240,000,” Law continued. “But many buyers cannot afford to pay that anymore. And rental values are rising here because a lot of people cannot qualify or get a loan.” Rising rents are the proverbial fuel to the flames, according to Stan Humphries, chief economist at Zillow. “Rental affordability never looked worse in this country,” Humphries said. “I categorize it as a crisis in housing—probably because more than one-third of us are renters. The lack of affordable options means less discretionary income for other things. It becomes hard for renters to save for a downpayment for homeownership later.” And that brings about another problem: Saving for a downpayment. From

initial appearances, this should not seem to be a problem. In fact, U.S. Department of Commerce data showed that the total amount of bank account-based consumer saving equaled the total amount of consumer spending in 2014, at $11.9 trillion each. “As far as the convergence in the amount of bank savings with consumer savings—this is a first time event,” said Dr. Dan Geller, developer of the Money Anxiety Index. “It never happened before. This shows a proportional decline in spending and the proportional increase in savings.” But Dr. Geller quickly pointed out that the seemingly simple act of saving money is complicated by several factors. “The jobs coming online right now are paying less than the jobs we lost during the recession,” Dr. Geller continued. “That’s an issue. These new employees have low earnings, and that affects mortgages. And the cost of education translates into young people starting their financial life with a burden that would have otherwise been directed to mortgages.” Phil Bracken, chairman and founder

of America’s Homeowner Alliance and a former executive vice president at Wells Fargo, agreed that the challenge for savings is acute when it comes to homeownership. “The average firefighter with average debts who wants to buy an average house would have to save 22 years for a 10 percent downpayment,” Bracken said. “A middle school teacher would have to save 18 years, and a nurse 15 years.” But Bracken also stressed that the question of affordability in housing points to an even bigger problem. “The economy is leading housing out of the recession, as opposed to the other way around,” Bracken said, adding that the current situation will create more problems in the near future unless there is a significant change. “Between 2012 and 2015, there will be approximately 17 million new households founded, and about 74 percent of those will consist of people of color. But they have no generational wealth, no large holdings of stocks and bonds or savings. The group is most in need of accessible and affordable policies.”

Even the financial institutions that are celebrated for going the extra mile on customer service are hampered when it comes to offering residential mortgages. Bob Dorsa, president of the American Credit Union Mortgage Association (ACUMA), pointed out that while credit unions are eager to work with borrowers seeking an affordable home, the two segments that are most at risk of being shut out of the housing affordability equation—Millennials and the nation’s immigrant population—are the two groups that are not active within the credit union movement. “The credit unions have to reach out to both of these demographic groups,” Dorsa complained. “The average age of credit union member is mid-50s. It is a matter of repositioning and restructuring the credit union membership base. But the question is how do we go out and reach those groups?” But more pressing to the wider financial services world is the question of the regulatory burden placed on lenders in the aftermath of the 2008 crash. “It is more difficult to qualify borrow-

ers,” said Ron Haynie, executive vice president of mortgage services at the Independent Community Bankers Association (ICBA). “Many of our bankers said there are loans they made years ago that they are not comfortable making now. They are concerned they could end up with a problem down the road. The business is so regulated that there seems to be zero tolerance for any kind of error on a mortgage. There is no way they’re making those loans—or, if they do, they’ll be very, very selective.” And this raises a crucial point regarding affordability—lenders that are eager to work with borrowers, but are apprehensive to move forward aggressively due to established and perceived repercussions from regulators. John Councilman, CMC, CRMS, president of NAMB—The Association of Mortgage Professionals and president of Fort Myers, Fla.-based AMC Mortgage Corporation, stated that regulations that were designed to protect consumers had an unintended effect of keeping them out of the home loan process. “We’ve restricted the people who can

actually get a loan, and that has a dampening effect,” Councilman said. “We don’t have any flexibility in the loans being offered. This makes it difficult for people have who attempt to qualify. And borrowers are afraid to go into the process because it is not a pleasant process to be in.” In fairness, the federal government has not been completely indifferent to the situation. The government-sponsored enterprises are now enabling a 97 percent loan-to-value (LTV) threshold while the Federal Housing Administration (FHA) has lowered its mortgage insurance premium. But Matthew Ostrander, chairman and CEO of Parkside Lending LLC in San Francisco and a director of the California Mortgage Bankers Association (CMBA), observed that Washington has muscled out the private sector when it comes to offering new solutions to expand affordability in housing. “It stymies innovation,” Ostrander said. “We’re at an innovation standstill to have new products to help the buyer continued on page 38

has affordability left the housing market? continued from page 37

“Home values are up, interest rates are still down and employment is getting back.” —Mat Ishbia, President and CEO of United Wholesale Mortgage

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when Fannie, Freddie and the FHA control 95 percent of the market.” But is there a total absence of solutions to the affordability puzzle? Brian Koss, executive vice president at Danvers, Mass.-based Mortgage Network, believed one possible approach involves microhousing, both in the so-called “tiny house” movement of smaller private homes as well as the more compact apartments that becoming more common in urban settings. “People are okay with less now,” Koss said. “They are willing to deal with 600to 800-square-feet. Instead of trying to build big penthouse units for Euromoney, [builders] should build something smaller for people that can use them—after all, in view of the amount of time spent living outside of the house, many people just want a place to lay their head at night. That would give folks a better foot in the door.” Jason Madiedo, president and chief executive officer of Las Vegas-based Venta Financial Group and president of the National Association of Hispanic Real Estate Professionals (NAHREP), suggested taking the current 97 percent LTV and pushing it even further. “I think a 100 percent LTV mortgage would be helpful, if it is underwritten and documented properly and if it ensures that sustainable and responsible

“We’ve restricted the people who can actually get a loan, and that has a dampening effect.” —John Councilman, CMC, CRMS, President of NAMB—The Association of Mortgage Professionals

lending decisions are being made,” Madiedo said. But Chris Sorensen, director of mergers and acquisitions at Corona, Calif.based Paramount Residential Mortgage Group Inc. (PRMG), expressed concern that the mortgage industry is being forced to fix a problem that goes deeper than the origination process. “It seems to me that we don’t have an affordability issue due to the mortgage industry,” Sorensen explained. “The mortgage industry should not seek to find a lower common denominator via less restrictive standards or more creative loan programs as this simply masks the underlying challenge we face today. The true challenge is getting a president and a pro-capitalist Congress to release the power of the American economic juggernaut, which has been stymied due to the social experimentation currently occurring. If we were to leave this to the mortgage industry, all it can do is work with Wall Street in an effort to come up with new and creative means to entice institutional investors and rating agencies to inhale ether and express how safe a mortgage-backed security is, based on borrowers who cannot afford their mortgage. And that is what ushered in the last economic crisis!” But on the other hand, there is the point of view that affordability is not a

“The lack of affordable options means less discretionary income for other things. It becomes hard for renters to save for a downpayment for homeownership later.” —Stan Humphries, Chief Economist of Zillow

national issue, but rather, one that is distinctive to individual markets. “I don’t know if the industry can do anything to make it easier to get into homes,” said Peter Doiron, senior vice president of residential lending at Thomaston Savings Bank in Thomaston, Conn. “Affordability issue varies by sections of the country. Our average loan size is about $170,000, and that’s pretty much affordable when you are looking at 20 percent down. We are not into real high-ticket areas, but we are trying to do deals in a variety of price ranges. We’re putting together a $70,000 loan on a HUD property that was foreclosed on— it’s not that bad of a piece of property.” “You have some markets that are unchanged,” said Jeff Del Rey, director of strategic partnerships at Mission Viejo, Calif.-based PCV Murcor. “Pennsylvania, Boston, Cleveland—they are no better or worse than they were a couple of years ago. Even Michigan is still affordable, but it is seeing an uptick in value. And in Phoenix, people are going away from single-family house to condo and townhouses—that is roughly a $100,000 difference.” Still, not everyone in the industry believed that affordability in housing is at or approaching a crisis level. “Interest rates are as low as I’ve seen in my life,” said Paul Abbamonto, chief

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operating officer at Orange, Calif.-based LRES. “We can all guess that rates are going to increase, and that will change the formula of what’s affordable and what’s not. But for the last four to five years, there’s been the opportunity for people to get property at absolute bargain prices … I doubt we’ll see that kind of price drop ever again.” Abbamonto added that he has brought his observations home to his family. “We have four girls, and I tell them the same thing: Buy what you can today, because five years from now it will potentially be more difficult,” he said. And taking optimism even further is the National Association of Home Builders (NAHB), which issued data on Feb. 19 that claimed 62.8 percent of new and existing homes sold in the fourth quarter of 2014 were affordable to families earning the U.S. median income of $63,900, up from 61.8 percent in the third quarter. The NAHB also stated that the national median home price declined from $220,800 in the third quarter to $215,000 in the fourth quarter while average mortgage interest rates decreased from 4.35 percent to 4.29 percent in the same period. “This upturn in affordability for the final quarter of 2014 is a positive development and is in line with what we are hearing from builders in the field that more prospective buyers are starting to move forward in the marketplace,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo. However, one prominent industry leader is not convinced that with the NAHB view that happy days are here again for affordability in housing. “When anyone tells us housing is affordable, I say: If that’s the case, how come we have the worst mortgage demand ever with the lowest interest rates ever?” said Logan Mohtashami, an Irvine, Calif.-based senior loan manager at AMC Lending and a financial blogger at LoganMohtashami.com. “In 2014, inventory was up and rates were down and we had negative demand. And if cash buyers weren’t 20 percent above their normal levels, 2013 and 2014 would have seen the lowest numbers after the Great Recession.” Phil Hall is managing editor of National Mortgage Professional Magazine. He may be reached by e-mail at philh@nmpmediacorp.com.

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heard street ON THE

Our Heard on the Street column is a chronicle of events, changes and passages in the lives of the people and companies shaping the mortgage industry.

DocMagic Integrates With MERS eRegistry

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DocMagic Inc., a provider of fullycompliant loan document preparation, compliance, eSign and eDelivery solutions for the mortgage industry, has announced that the firm has now completed its integration with the MERS eRegistry, making it one of only a few industry vendors to integrate with the widely used system. Launched in 2004, the MERS eRegistry is the legal system of record that identifies the owner or holder (controller) and custodian (location) for registered eNotes and provides greater liquidity, transferability and security for lenders, according to MERSCORP Holdings Inc. It was created in response to demand by the mortgage industry for a system to satisfy certain safe harbor requirements under the Uniform Electronic Transactions Act (UETA) from 1999, and the Electronic Signatures in Global and National Commerce Act (ESIGN) from 2000. “The MERS eRegistry system excels at effectively handling a vital service for eMortgage originations,” said Dominic Iannitti, president and CEO of DocMagic. “Fannie Mae and Freddie Mac both require use of the MERS eRegistry for all eNotes they purchase. DocMagic’s integration with MERS’ system fulfills the GSEs’ requirement and thus allows us to pass the benefits that the service offers along to our customers.”

Parkside Lending Announces New Brand

Parkside Lending, a national wholesale and correspondent lender, has launched its new corporate brand, which is epitomized by a new tagline: Experience the power of caring. The company, known for providing a more thoughtful borrowing experience, has been experiencing substantial growth and wanted to

ensure all aspects of its brand were consistent across the country. “We launched our new brand at an employee conference because it is our employees who have internalized and instituted the principles that are fundamental to our brand. They are the face of Parkside Lending,” said Matthew Ostrander, chief executive officer of Parkside Lending. “From start to finish, the key to our unique approach is caring.” In conjunction with its new brand, the company is also launching a new public website that will help familiarize visitors with Parkside Lending, as well as present information about partnering with the organization and opportunities for doing business together. “After launching a new, easy-to-use, intuitive broker and correspondent Web site last year, we wanted to ensure that anyone who visited our public Web site would quickly see that we are a growing organization with much to offer—and that the basis for every transaction involves a genuine concern for our clients and their customers,” Ostrander said. Ostrander co-founded Parkside Lending in 2004. He and his management team successfully navigated the mortgage deterioration of 2007-2008, and have steered the company onto a strong national path. His history of building companies from start-up to success includes experience across an array of industries, from music and interactive media, to medical software and entertainment production.

estate professionals, has been named one of the nation’s Top 50 mortgage service providers for 2014 and one of the Utah Valley’s Top 100 “Most Buzzed About” companies across all industries. SimpleNexus received the back-to-back recognitions as the Utah-based company celebrates four years of providing customized mobile technologies to mortgage professionals, real estate agents and clients nationwide. The company already counts more than 60 mortgage companies and 2,500 loan officers among its customers. “We are particularly honored by these dual recognitions because they reflect SimpleNexus’ entrepreneurial leadership within the business community, as well as our company’s rapid ascent on the national mortgage scene,” said SimpleNexus Chief Executive Officer Matt Hansen, the company’s founder. “We look forward to continuing to grow our customer base and reputation for excellence as the mortgage industry increasingly turns to mobile technologies to conduct business.” SimpleNexus also has been recognized as one of Utah Valley’s Top 100 “Most Buzzed About” businesses by the Utah Valley Entrepreneur’s Forum, a non-profit business association that selects its honorees through a combination of public voting and intern UVEF voting. The UVEF Top 100 list, made up of businesses under fiveyears-old, features a wide range of industries, from marketing companies to online clothing retailers, that reflects the diversity of the Utah Valley business community.

SimpleNexus Honored for Entrepreneurship and Leadership

RGS, Sage Title and Settlement Pros Contract SSI for Independent Evaluation of Operational Risks

SimpleNexus, a provider of mobile appbased solutions for mortgage and real

As part of it ongoing commitment to compliance and consumer protections, RGS Title LLC has initiated an independent evaluation of its operational

risks with Secure Settlements Inc. (SSI). RGS voluntarily approached SSI, a New Jersey-based firm that created the first independent risk analytic process to screen title and settlement professionals, for the risk analysis without a lender requirement. Over the coming weeks, SSI will vet RGS’ ownership and key escrow and closing staff, ensuring that they meet all federal, state and local regulatory requirements. It is expected that all RGS agents will be fully vetted by March 1 and will achieve the highest reliability rating possible. Going forward, SSI will continue to monitor RGS’ performance, ensuring the title company’s continued compliance and consumer protections. “In today’s market, it is essential consumers have confidence that their settlement partner will work to ensure their mortgage closing process is not only seamless, but also secure,” said Gina Parello Esq., regional manager for RGS. Bethesda, Md.-based Sage Title Group LLC has also contracted SSI for an independent evaluation of its operational risks. SSI will vet Sage’s ownership, and escrow and closing staff, making sure they meet federal, state and local regulatory requirements. “We realize that the lenders we serve are expected to evaluate and monitor their business partners, and by initiating this assessment process on our own, we demonstrate to our clients that they’ve made a good business decision to work with us,” said Bobby Lee Esq., regional manager of Sage. Also working with SSI on an independent firm evaluation is Washington, D.C.-based Settlement Professionals LLC (Settlement Pros). “Having an independent organization like SSI successfully vet our credentials for consumer protection is one way that we can establish greater confidence in our company and our processes,” said Carol Calomiris Esq. “When RGS, Sage Title and Settlement Pros approached us, we knew immediately that they were serious about embracing independent vali-

dation and risk analysis for consumer protection and vendor management compliance,” said SSI President Andrew Liput. “Lenders and borrowers are demanding transparency and accountability; they want to do business with trustworthy, professional firms. RGS clearly meets those expectations.”

Zillow Closes $2.5 Billion Trulia Deal, Cuts Staff

Comergence has announced that it is now providing its originator screening and due diligence services to Excelerate Capital, a mortgage lender based in Irvine, Calif. Comergence offers a full suite of hands-on and automated services for mortgage originator and appraiser due diligence and profile surveillance. Comergence has also announced that it is now providing its originator screening and due diligence services to Verus, a residential mortgage

investor based in Washington, D.C. Both Excelerate Capital and Verus began using Comergence’s REALM for Third-Party Originators. REALM is a proprietary platform with a comprehensive database of over 400,000 records on every licensed mortgage originator in the country. REALM aggregates critical data such as: Licensing, criminal and civil records, financial sanctions, as well as bankruptcies and foreclosures. “We’re delighted that Verus chose REALM for Third-Party Originators to screen its correspondents,” said Greg Schroeder, president of Comergence. “By using our due diligence and monitoring services, Verus is simplifying its originator approval process.”

“REALM for Third-Party Originators has streamlined our mortgage originator approval process, saving us time and money,” said Mike Thompson, CEO of Excelerate Capital. “The ongoing alerts provided by Comergence enable us to monitor the activities of our brokers and correspondents, which helps ensure we’re not missing anything in terms of due diligence.” Comergence has announced that it has formed a relationship with the National Association of Appraisers (NAA), an association representing professional appraisers in multiple disciplines in all parts of the United States. continued on page 48

NationalMortgageProfessional.com

n National Mortgage Professional Magazine n MARCH 2015

Zillow has announced the completion of its previously announced acquisition of Trulia Inc. for $2.5 billion in a stock-forstock transaction, and formed Zillow Group Inc., which houses a portfolio of the largest and most vibrant U.S. real estate and home-related brands on mobile and the Web. In addition to Zillow and Trulia, Zillow Group’s consumer brand portfolio includes StreetEasy, New York City’s leading real estate marketplace, and rental search brand HotPads. “This is a pivotal day in online real estate and we couldn’t be more excited to welcome Trulia to Zillow Group,” said Spencer Rascoff, CEO of Zillow Group. “Each of our brands share a consumer-first philosophy, and our powerful combination of insights and expertise will drive even greater innovation for consumers, empowering them with essential information they need to make critical financial decisions. Our combination will also enable real estate professionals to more efficiently and easily reach the nation’s largest audience of engaged buyers, sellers and homeowners, and extract even more value from their advertising.” Paul Levine, previously Trulia’s chief operating officer, has been named president of Trulia, reporting to Rascoff. Pete Flint, co-founder and former CEO of Trulia, has joined the Zillow Group board of directors, as has former Trulia board member Greg Waldorf. Zillow Group is expected to begin trading on Nasdaq on Feb. 18, 2015, under the ticker symbol “Z” and will inherit the trading history of Zillow Inc., which also traded under the ticker symbol “Z”. Later this year, Zillow Group expects to begin to offer shared services and marketing platforms for advertisers and industry partners that will enhance efficiency and deliver greater return on investment. Information about any changes will be communicated promptly to advertisers and partners. In connection with the close of the acquisition, the companies eliminated approximately 280 positions, primarily in San Francisco and Bellevue, Wash., due primarily to redundancy in the combined company’s sales and administrative organizations. Another 70 positions will be eliminated as of the end of the second quarter, at which time Zillow Group will have approximately 2,000 employees. The approximately 350 affected employees have already been notified.

Comergence Adds Partners and Forges Alliance With NAA

LYKKEN ON

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Six Great Ways to Educate the Public About the Mortgage Industry By David Lykken ’ve been thinking a lot lately about education in the mortgage industry. I have a daughter who is entering her adult life, and I

cannot say that I would mind if she followed in my footsteps and pursued a career in the mortgage banking industry. And it isn’t just my daughter. More people are graduating our universities than ever before, and many of them are completely unaware of the opportuni-

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This information is solely for mortgage professionals and should not be provided to consumers or third parties. Information is subject to change without notice. This is not a commitment to lend and there is no guarantee that all borrowers will qualify. All loans are subject to credit, underwriting, and property approval. Other restrictions may apply. FGMC is not acting on behalf of HUD, VA, FHA or any other agency of the federal government. First Guaranty Mortgage Corporation (Company NMLS ID 2917) is licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act; Regulated by the Division of Real Estate in the State of Colorado; Licensed by the Delaware State Bank Commissioner to engage in business in this State under License No. 2403 (renewed through 2015); Georgia Residential Mortgage Licensee; Illinois Residential Mortgage Licensee; KansasLicensed Mortgage Company; Licensed by the Mississippi Department of Banking and Consumer Finance; Licensed by the Nevada Division of Mortgage Lending to make loans secured by liens on real property; Licensed by the New Jersey Department of Banking and Insurance; Licensed Mortgage Banker – NYS Department of Financial Services, Licensee No. B500800 (d/b/a FGMC In Lieu of True Corporate Name First Guaranty Follow us on: Mortgage Corporation); Rhode Island Licensed Lender. For complete corporate and branch licensing information, visit www.fgmc.com or www.nmlsconsumeraccess.org.

ties that lie in our industry. The MBA has just launched a program called “Mortgage Banking Bound,” with the express purpose of preparing people who are new to the mortgage industry, and people who would like to enter it, for the exciting career that awaits them in the field. Needless to say, I’m a huge fan of this program and what it represents. We need to be concerned with how the next generation is going to take up the mantle and propel the field forward in the right direction. But there is another element of education that I think has become increasingly more important—the education of the public. The recent financial crisis has, whether we consider it fair or not, shed somewhat of a negative light on our industry. The general public is more or less unaware of how the mortgage industry works, and people often assume the worst about what they don’t understand. The less informed the public is, the more likely it is to demonize the industry. If we want to get people to see the value of the mortgage industry for the economy and society in general, we’ve got to be willing to open up and teach them what we know. We’ve got to come clean about how the industry works. As vulnerable as it may make us feel, we’ve got to strive for transparency. I believe we need to make a concerted effort to education the general public about the ins and outs of the mortgage industry. Here are some ways that we may go about doing just that … The first and most obvious way to educate the public is by proxy— through the education of employees. The more educated employees are, the more educated the public with whom they interact will be as well. We’ve all, I’m sure, been in a situation in which

we were dealing with a salesperson who didn’t really know all that much. When pressed, these salespeople will often make something up to avoid the shame of not knowing. In the mortgage industry, we don’t want to put our salespeople in that kind of situation. We want our loan officers to be experts and take pride in sharing their information with buyers. By training our people well and empowering them to teach what they know, we will take away the reasons people have to be skeptical about the industry. Maybe you’ve heard the expression: “How you treat your employees will be how they treat your customers.” This also is true: “How you train your employees will be how they train your customers.” Beyond training your employees, you may want to go the extra mile and educate the public by interacting with them outside of the context of the workplace. For example, you may want to try teaching a course at the local college or university. Many academic institutions are hiring adjunct faculty to teach various electives on both the undergraduate and graduate level. As a leader in the mortgage industry, you could teach a special course related to the industry in the finance department of the business school. Many students will be attending such classes to get a degree, but some have already earned their degrees and are simply there to better themselves personally or further their career professionally. Interacting with these students will help spread the word around your local community about how the industry works and why it’s important for the local economy. In addition to teaching a college course, you may want to consider getting involved in the research of that institution as well. Particularly if you live near a large- to mid-sized universi-

people get out of debt, you could sponsor a trade school that teaches programs on home maintenance. The list of opportunities for which there can be mortgage-related tie-ins are endless. Partnering with such groups for an event can get you in touch with aspects of the public who will likely be more receptive because are already interested in something related to the industry. When looking for information about the mortgage industry, many people will seek out sources that are critical of the industry. They’ll read consumer watchdog magazines and watch exposés on the news about how harmful some individuals and organizations in the industry can be to society. How about

giving them the other side? How about taking the initiative to educate the public ourselves? How about setting the record straight and answering the questions people are asking? The general public stands ready and willing to learn. Will we be there to teach them? David Lykken is 40-year mortgage industry veteran who has been an owner operator in three mortgage banking companies and a software company. As a former business owner/operator, today David loves helping C-Level executives and business owners achieve extraordinary results via consulting, coaching and communications, with the objective of eliminat-

ing corporate dysfunction, establishing and communicating a clear corporate strategy while focusing on process improvement and operational efficiencies resulting in increased profitability. David has been a regular contributor on CNBC and Fox Business News and currently hosts a successful weekly radio program, “Lykken on Lending,” that is heard each Monday at noon (Central Standard Time) by thousands of mortgage professionals. He produces a daily one-minute video called “Today’s Mortgage Minute” that appears on hundreds of television, radio and newspaper Web sites across America. He may be reached by phone at (512) 501-2810 or by e-mail at dlykken@mbs-team.com.

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ty, there may be opportunities for you to collaborate with professors on scholarly articles for academic journals. Researchers are interested in questions about how things work or why they happen. There are many departments— from sociology to business to statistics—that may be interested in understanding a particular question about the mortgage industry. If you collaborate with them on the project, you could provide the public meaningful information about the industry. Granted, this may seem to be a little farfetched, but the opportunities for educating the public are great here. First, popular journalists from newspapers and magazines often read these academic journals to find stories. Secondly, the peer-reviewed, scientific nature of the academic journalists will provide additional credibility to any claims that are made. There is real opportunity here—I’m just surprised more leaders in our industry aren’t jumping on it! So, I understand not everyone reading this will have a strong college or university close by. But almost everyone will be in close proximity to a library. Another way to educate the public about the industry is to teach a seminar at your community library. Most libraries invite local business people in to offer free educational sessions on various subjects. Many people want to know more about the financial aspect of owning a home. Offering a workshop at your local library can be the perfect platform for setting the record straight about what the industry means for your community. Another area in which educating the public has becoming increasingly easier is through that of owned media. When I say “Owned Media,” I mean any content that you produce and publish on your own. This could be the blog on your company Web site, a podcast like the “Lykken on Lending” show that I host, or a simple newsletter you send out in the mail. Any material that you produce and distribute to an audience can be educational and informative for the public. I am quite surprised that, given the increasingly lower cost and greater accessibility, more organizations aren’t taking advantage of these opportunities. Could you imagine how much more informed the public would be if we focused more of our messaging on teaching rather than selling? After all, people will more likely buy from those they trust. So, in the end, teaching is selling. One final idea for engaging a wider audience as an opportunity to inform more people about the nature and role of the mortgage industry is to sponsor an event of another organization. Obviously, you’ll want to partner with an organization that has some relevance to the industry, because such a partnership will give you an open opportunity to talk about the mortgage business. You could sponsor a nonprofit organization that builds homes for disadvantaged people, you could sponsor a civic organization that helps

Compliance Updates: March 2015 By Matt Drottz FHA Reduces Annual Mortgage Insurance Premiums Rates On Jan. 9, 2015, the U.S. Department of Housing & Urban Development (HUD) has issued Mortgagee Letter 2015-01 to communicate a reduction to the annual Mortgage Insurance Premium (MIP) rates for FHA Title II forward mortgages with terms greater than 15 years. The MIP rate reduction is effective for FHA case numbers assigned on or after January 26, 2015, with the exception of Section 247 mortgages (Hawaiian Homelands) and single family forward streamline refinance transactions that are refinancing existing FHA loans that were endorsed on or before May, 31, 2009. The following table provides a breakdown of the existing and new annual MIP rates by amortization term, base loan amount and LTV ratio:

[INSERT: DocMagic_Chart_03_15] Note that the annual MIP rates specified in ML 2015-01 supersede the rates established in ML 2013-4. All other sections of ML 2013-4 remain in effect.

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Massachusetts Amends Truth-In-Lending Requirements The Massachusetts Division of Banks filed final amendments to 209 CMR 32.00: Disclosure of Consumer Costs and Terms. The amendments became effective on Jan. 2, 2015. The amendments are intended to streamline the regulation for easier compliance by providing that compliance with cited provisions of the regulations of the federal Consumer Financial Protection Bureau (CFPB) constitutes compliance with the cited provisions of 209 CMR 32.00. As a result of the streamlining to align the State regulation to CFPB standards, there may be instances where state specific disclosures need to be altered or may no longer be required. Lenders should review its inventory of Massachusetts disclosures to validate compliance. Matt Drottz is a compliance analyst with DocMagic Inc. Matt has more than 12 years of experience in the mortgage industry, with extensive knowledge pertaining to mortgage servicing oversight, risk management and compliance.

A Minor Change in Lifestyle That Will Change Your Life BY ALLEN FRIEDMAN would like to convey to you a wonderful story as to how my son’s gift to me several Father’s Days past has changed my life, and in a very positive way. His gift caused me to look outside the box for ways in which to improve my health, lifestyle and overall well-being. It actually wasn’t that far out of the box, no more than seeing the forest through the trees. I was getting all kinds of comments from my family, making fun of my weight and urging me to diet and exercise. I wasn’t that big at 6’0” and about 210 lbs. Quite honestly, I never was a bad eater, just ate what I wanted and when I wanted. Didn’t really overdo my eating, just didn’t have much concern for it. The same with exercising, as it wasn’t high on my list of priorities. On Father’s Day 2012, my son had enough of it. He took money from his own savings account and bought me a Nike Fuel Band. His intent was to get me back into some form of decent shape. The brand of the fuel band is not relevant. Even an inexpensive pedometer would suffice. Anything measuring steps or body movement gets the job done. He begged me to keep the gift and give it a try. I was so busy, just the thought of any exercise regimen or tracking devise totally turned me off. My son pleaded with me and told me that was not the case at all. He said it was hassle-free, no work-outs required and demanded that I read the instructions and just give it a try. He said that I didn’t have to “work out” but just move a little more. I felt badly that he spent his own money, and more for that reason and not wanting to ruin his Father’s Day surprise, I kept the fuel band and told him I that would try it out. It took several days of his nagging for me to even open the box. I actually read the instructions and decided to take a scientific approach and see what this fuel band had to offer. For the first use, I decided to wear the band one full day. I would do nothing different and just see where my fuel points would end up. In the back of my mind, I was really thinking then that I could honestly tell my son I gave it a try, and then just move on. At that time, I was on the phone most of the day, watched some TV at night, and didn’t do much physical activity in-between. The first day, not changing anything in my routine, my Nike fuel points totaled 1,750. That was with putting the band on first thing in the morning and taking it off at bedtime. It meant nothing to me, but made me curious. How would that point total compare if I did something–anything–differently during the day. So the next day, I changed it up just a bit. When I was on the phone, I moved around a little. I actually stood up and walked around, nothing dramatic at all–maybe just a little pacing. When I got home, instead of using the downstairs restroom, I used the upstairs. I also paced a little when on my home phone. Again, this was nothing major, just a little more activity. It was about 10:30 p.m. that second night and I was ready for bed. I checked my Nike fuel point total, and it was 2,500. I am a little hard-headed and definitely goal-oriented. Also, very competitive. Just for fun, I wondered what it would take to get to 3,000 points. So I went downstairs and just walked in a figure eight in our family room for 10 minutes. Checked the band and was just over 3,000. That was over two years ago, and I have never been under 3,000 per day since. Even when traveling, if I just spend a few minutes walking in figure eights in my hotel room, I find a way to get to the 3,000. The goal has become far less of an issue over time. My phone pacing and normal movements have just increased out of habit. Don’t even notice the changes any more. My points more frequently get well past 3,000, but never below. I have not changed my eating habits in any material way, although I have cut back just a bit on sodas and limit my deserts to one a day max. After six months, my weight was 175 lbs., dropping down from 210 lbs. I remain at 175 lbs. today, and now seems to be my core weight. My family is so thrilled, and my son couldn’t be prouder of me and his gift. My doctor said that I have added years to my life expectancy, reduced the propensity for diseases such as diabetes, high blood pressure and other heart issues. The amazing thing is that there has been no profound change in my activities. The change is more in mindset and some subtle modifications in lifestyle. Having that fuel band on my wrist during the day is a constant reminder to be active whenever possible, and it provides the satisfaction of having a healthier life. I feel better, look better, am more focused, and I have more energy during the day. I just wanted to share how thinking outside the box and a modest change in behavior can become so significant. No question that being conscious of one’s diet and activity levels are important for good health. However, in my opinion, any change in lifestyle must be reasonable and one that can be maintained for years to come. I had previously tried diets and workout regimens, and they worked to some extent, but I was not able to maintain either the time or interest necessary to stick with them long-term. This hassle-free approach to a happy and healthier lifestyle truly excites me, and I wanted to share with my industry associates.

Allen Friedman has 20-plus years of experience in the mortgage industry. He has maintained key positions in operations and sales management, serving more than 10 years as vice president with Great Western Bank and Washington Mutual Bank (now JP Morgan Chase) and joined iServe Residential Lending in 2009 as western regional sales manager. He may be reached by phone at (415) 298-2500 or e-mail afriedman@iservelending.com. SPONSORED EDITORIAL

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n National Mortgage Professional Magazine n MARCH 2015

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Just Ask

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nowledge is power. Power translates to success, whether it is dollars in your pocket, stronger leadership, increased bottom lines or peace of mind, we are here for you. This month, we are introducing a new column for questions relating to starting a business, managing a business, training, networking, tax-related issues, corporate security policy, fraud alerts and compliance. All answers are for informational purpose only, and are not intended to practice law, or are meant to provide tax advice or tax opinions. After reviewing our information, we both recommend seeking legal counsel or the advice of a tax professional. Please e-mail us at

Eric Weinstein & Laura Burke JustAskEricandLaura@gmail.com to voice any questions or problems. We are here for you!

Jake from San Diego asks … I have been a loan originator for about seven years and am doing well, I am wondering if you could tell me when it would be advantageous to hire an assistant? Eric’s reply to Jake … When I was running my company, I had a rough rule of thumb before hiring additional help. When I was absolutely, positively so busy that I was tearing my hair out and losing business because I was too occupied to answer the phone,

THEN it was time to hire some help. Many people get an ego boost or feel they want to hire to show the world how important they are. I always looked at it as an added expense and something to dread. Why pay someone when I can do it myself for free? There is an economic term called “Opportunity Cost.” If you are too busy doing a thing that makes you $10 that you cannot do the thing that will make you $100, then doing that thing costs you $90. If you don’t have an opportunity to do the $100 thing, then you should just keep doing the $10 thing. Basically what I am saying is, if you are really sure you can get more business by freeing up your time, go ahead

and hire someone. If you think you will get the same amount of business, but ONLY want help to free up your time, you are just plain lazy. Laura’s reply to Jake … I too used a similar method to determine when to hire an assistant, I would recommend consistency. You need to have six months of consistent production that warrants this type of help. I made a number goal for myself of $1 million per month minimum of closed loans for six consecutive months, and this number may have changed it’s an idea. I started with a part-time assistant determining what she could do that wasn’t a conflict of

k Eric & Laura interest. I also worked for a bank and I had to have her hired by the bank as an employee, so that was a task in and of itself to prove I needed an assistant. I hired her, Kathy, she soon became full-time, and she was with me for many years. When I opened my own mortgage company she came with me and was my administrative assistant for many more years. I do like the fact that Eric has brought up the “Opportunity Cost.” It is true, paying an assistant’s salary or a portion of it, must make economic sense, and keep in mind you do not want to hire someone until you are ready. Once you have taken on a personal assistant, they are counting on you for work. They have taken themselves off the market and have put their trust in your hiring decision, so you don’t want to have to let them go. Make a sound decision.

Mary from Denver asks … I am wondering if there is a way I can pay a referral fee to my hair professional for sending me clients my way. Since she has sent me two in the past two weeks, I would like to compensate her.

l Two percent of your yearly household income. Only the amount of income above the tax filing threshold, about $10,000 for an individual, is used to calculate the penalty. The maximum penalty is the national average premium for a bronze plan. l $325 per person for the year ($162.50 per child under 18). The maximum penalty per family using this method is $975. The penalty can have exemptions such as low-income, non-resident status, filing during the appropriate time to the marketplace, less than three months of being uninsured and a few others, check with your tax professional. Everyone needs to be aware of the new Act, and apply for healthcare insurance, either through your employer, through the marketplace or through Get Covered Illinois. Penalties this tax filing season (2014) are minimal; however, they will triple in

2015, and then triple again 2016. This is serious business. Everyone needs to get healthcare coverage. Thank you for bringing this to everyone’s attention. Disclaimer: All answers are for informational purpose only, and are not intended to practice law, or provide tax advice or tax opinions. After reviewing our information we recommend seeking legal counsel or the advice of a tax professional. Eric Weinstein worked in banking, on the commercial real estate side until 1991, when he fell in love with residential lending. In 1995, he started a small mortgage company in his basement called Carteret Mortgage Corporation, which in 2003, grew to one of the largest mortgage broker companies in the United States. He may be reached by phone at (703) 505-8692 or e-mail eweinstein4u@gmail.com. Laura Burke is an author and trainer with 20-plus years of experience in the mortgage arena. She may be reached by e-mail at lauralynnburke@gmail.com.

Eric & Laura welcome your questions, please send your inquiries to JustAskEricandLaura@gmail.com. 47

Eric’s reply to Jim … This one is all yours Laura … Laura’s reply to Jim … Unfortunately, the new Affordable Care Act (ACA) will cause many individuals to incur small penalties this year when filing their 2014 tax returns. The ACA requires everyone to have minimum essential coverage healthcare for all of 2014 for every month. This is addressed on your tax return, so you will more than likely incur a penalty for the months of January through September as your coverage started in October, and without coverage for your daughter she will have a penalty charged to you on your tax return for the entire 12 months. The penalties for not having coverage in 2014 if you didn’t have coverage in 2014, you’ll pay the higher of these two amounts: l One percent of your yearly household income. Only the amount of income above the tax filing threshold, about $10,000 for an individual, is used to calculate the penalty. The maximum penalty is the national average premium for a bronze plan. l $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285. The penalties for not having coverage in 2015 if you don’t have coverage

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Laura’s reply to Mary … Here is the exact RESPA ruling: 12 USC Section 2607 “Prohibition Against Kickbacks and Unearned Fees.” Real Estate Settlement Procures Act (12 USC 2602)/Chapter 27: REAL ESTATE SETTLEMENT PROCURES ACT 01/22/02/ Sec. 2607. Prohibition Against Kickbacks and Unearned Fees (01/22/02). (a) Business referrals No person shall give and no person

Jim in Chicago asks … I was unemployed for 2014 from January until October. I started a new job in September and received health insurance for myself and my wife in October 2014 with my new job. I did not cover my daughter because I believed she had healthcare coverage from when I was unemployed only I found out she didn’t. Will I have to pay a penalty on my taxes for her? What can I do?

in 2015, you’ll pay the higher of these two amounts:

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Eric’s reply to Mary … You can do anything you want. Free will is a wonderful thing. Just be aware that if you do, the only file you will be working with is the one baked into a cake for you to cut through the bars of your prison cell! Seriously, don’t they teach RESPA laws in Colorado, or is everyone just high from the legal weed you can buy there now? No, don’t do that. Laura can probably quote you the exact laws, regulations and statutes, but a licensed mortgage broker cannot pay a referral fee to anyone else but another licensed mortgage broker. Assuming your hair professional is not a licensed mortgage broker, here is what you can do: Thank her, refer her some hair dressing business, give her a hug to show your appreciation, but mostly, treat everyone she sends you well. When someone recommends a customer to you, they put their own reputation on the line. You have an obligation to live up to the faith they put in you. Doing a good job for her friend is probably all she wants from you.

shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person. Penalties for violations of this section shall be fined not more than $10,000 or imprisoned for not more than one year, or both. So yes, Eric was correct about the prison cell. I know it seems like an innocent thing to do, but it is a highly regulated act. The best way to thank someone for a referral is by referring business back to them, it is the nicest compliment we receive is the referral of a new client from a past, present or even future client.

RESPA/TILA Integration: The Rest of the Story … By Joy K. Gilpin Today, the lending industry is abuzz with all the preparations necessary to implement Integrated Disclosures under RESPA/TILA this coming August. As well we should be, after all this is only going to change the way we’ve done business for the last 30 years. That’s right, we are bidding farewell the old ways of providing a Good Faith Estimate (GFE) and an initial Truth-in-Lending (TIL) as part of the application/initial disclosure process. So long are the days of closing out transactions with a Final TIL and the HUD-1 Settlement Statement. Soon we’ll be moving to the new Loan Estimate and Closing Disclosure, both hitting the scene on Aug. 1, 2015. And while there is much to discuss on the new Integrated Disclosure rules, that’s not what we’re discussing today. Instead, in the words of the late Paul Harvey, we are going to explore … the rest of the story. What do I mean? Think about every single time or place your organization references one of the following in some written format: l l l l l l l l

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GFE RESPA TILA HUD-1 Settlement Statement Closing Statement Initial Disclosures Or some variation of these terms

What sort of documents might be impacted? That’s an excellent question. Since my team is responsible for the authorship and maintenance of about 40 compliance policy manuals (www.AllRegs.com) in the mortgage lending space it is a question we’ve been asking early, and often, to ensure we’re accurately addressing the needs of our clients and business partners. For all of us out there working hard to remain ahead of the curve and compliant, there’s more to do. For example, we have identified that of our roughly 40 documents, nearly half reference the traditional RESPA/TILA requirements I mentioned above. Think about that. Fifty percent of our material requires a touch in order to adjust for Integrated Disclosures. What does that mean to you? Well, I’m not sure, but I’m certain it means something. For example, what about your training materials? Any references there? Job aids? Do they reference any of the terms listed above? What about your form letters, or system guidance? What about marketing materials or borrower education content? The point I’m trying to make is there is more to the process than just taming the RESPA/TILA beast (ROAR)—which is a significant endeavor. It’s about understanding and responding to the MANY rolling impacts these regulatory changes present to us all. Set aside some time to review your document libraries and find the language, references, and links that might be affected. An ounce of prevention is worth a pound of cure—especially when prescribed by an auditor. Good luck and stay compliant. Joy K. Gilpin is professional services manager with AllRegs. She may be reached by phone at (800) 848-4904.

SPONSORED EDITORIAL

heard on the street continued from page 41

“We’re delighted to be working with the real property appraisal segment of the NAA,” said Greg Schroeder, president of Comergence. “The association adds great value for appraisers, with educational programs and advocacy to boost professionalism and increase member marketability throughout the real estate finance community.” Comergence will work with the NAA to help NAA members increase credibility and visibility among the country’s appraisal management companies (AMCs) and lenders, offering its services to NAA members at a discount. The company’s proprietary REALM for Appraisers is a service where appraisers pay a low annual fee to set up a single online profile that can be shared electronically with any AMCs and lenders they choose. “As an advocate for appraisers, NAA is happy to work with Comergence,” said Laurie Egan, president of the NAA. “The issue of appraisers being required to submit to multiple background checks has become enormous. Our initial goal for this alliance is to make a service available that would help relieve the burden of the cost and time associated with background checks to our members. We believe our real estate appraisers will also like the convenience and portability of Comergence’s services and it will help them do more business, more efficiently.”

Hudson & Marshall Partners With Genesis Auctions on Real Estate Auction Site Hudson & Marshall has announced that it is joining forces with Genesis Auctions, an Internet-based distressed residential real estate disposition platform. Dave Webb, principal and owner of Hudson & Marshall, will co-own and co-lead the new combined entity with Trixy Weiss, founder and chief executive officer of Genesis Auctions. For more than 50 years, Hudson & Marshall has provided real estate auction services along with high impact marketing services. The company has sold more than 150,000 properties nationwide, with over $5 billion of real estate sold just in the last five years. The Genesis Auctions platform enjoys wide access to both real-estate owned and non-performing assets from banks, servicers and private sellers. Genesis Auctions has completed asset dispositions across all 50 states and currently has thousands of fully vetted national and local/regional buyers and borrowers registered on the platform. This transaction pairs Hudson & Marshall’s stellar reputation of integrity and performance with the nation’s leading servicers, lenders, credit unions,

government-sponsored enterprises (GSEs), asset management firms, and investors with Genesis Auctions’ reputed investor marketing, innovativeness, and synergistic relationship with lending affiliate Genesis Capital, a private bridge lender to investors active in distressed single-family real estate. The firms will be owned by Global Property Exchange LLC and maintain the Dallas and Los Angeles operations of both companies. “Hudson & Marshall’s excellent industry reputation is built on success, ingenuity, and hard work. Our specialized services and customer-centric approach have made Hudson & Marshall a recognized leader in our industry with results that exceed the industry average,” said Webb. “The addition of Genesis’ investor sales and marketing programs and databases, technology expertise, and relationship with Genesis Capital, will attract more buyers to our platform and provide them access to capital which will increase auction execution exponentially and enable a higher level of service to our collective clients.”

Guild Mortgage Launches Financial Institutions Services Group Guild Mortgage has announced the launch of its Financial Institution Services (FIS) Group to leverage its strengths as an independent mortgage banking company and offer complete outsourced mortgage services to regional banks, community banks and credit unions. Mary Ann McGarry, Guild Mortgage’s chief executive officer and president, said the new group builds on the success of its correspondent banking operation to fulfill a growing need to purchase and service loans from the smaller institutions. “Mortgage lending has become increasingly complex and difficult,” McGarry said. “Many smaller credit unions and banks struggle with the high cost of having the resources to add staff and be compliant with all the new rules and regulations. If they sell their loans to bigger banks, they worry about the bigger bank trying to cross-sell consumers on other products not related to mortgages. Guild is an independent mortgage banker, not a financial institution, so they can rest assured we would never be a competitor.” McGarry said Guild produced more than $7.4 billion in loans in 2014 and serviced $17 billion. It can leverage its strengths to support these institutions in continuing to provide mortgages to their members or consumers. Named to lead the new FIS Group is continued on page 64

The Art of Getting

Referrals

Five surefire ways to get more referrals in 2015 and beyond

By Bubba Mills

ouldn’t it be great if you didn’t have to market your services? Just serve and help clients all day … it’s why you chose to get into the mortgage lending business in the first place, right? To help people? But if you’re like most lenders, you’re likely working your butt off just to get those clients. So what’s the answer? Referrals … from your current and past clients, family, friends and acquaintances. Imagine what your business would look like if everyone you knew gave you just one good referral. Yeah, savor that feeling for a minute. Referrals are where the money is and here are five tips you can start using today to get more:

2. Cross-promote and partner with other businesses Think about all the local businesses in your city and then ask this question: What can I do to help those local businesses while promoting my business? Think coupons for your clients and leaving your business cards in their stores.

4. Get involved in your community People are more likely to refer someone they believe is a good person. A community “do-gooder” is, by definition, a good person. And remember, it’s not your signs all over town that make you a community icon, it’s what you do for your community. Volunteer at retirement centers, help rebuild and paint local parks, serve food at the local soup kitchen, take part in fundraisers and be seen at block parties and street picnics. 5. Show your gratitude when you do get referrals Thank those who refer you for their help, and keep them updated on how the new relationship is going. The referral system is built on strong relationships and shared value. Bubba Mills is executive vice president of Corcoran Consulting & Coaching Inc. He may be reached by phone at (800) 957-8353 or visit www.corcorancoaching.com.

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3. Think “ABA,” Always be Asking” If you don’t ask, you don’t get referrals. Add a P.S. to your e-mail signature. Something like this: “P.S. If you know anyone in the market for a mortgage, please tell them about ABC Mortgage Lending and hit the reply button and tell us how we can help them!” Also, put some serious thought into your closing gifts. I’ve given Cutco Knives with my name engraved on the blades. Every time they use the knives, they think of me. Give gifts that have a shelf life.

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1. Make your service downright unforgettable Past clients cannot refer you if they do not remember you. Help them remember you by giving them memorable service. Consider other mortgage lenders who you think knock service out of the park. Then do more than they do. Take time to brainstorm ways to increase your service. Remember that referrals are earned, not paid for. By the way, I teach a seminar called “Marry Me! Getting Your Clients to Say ‘I Do!’” that gives tips on how to offer service that yields referrals for Realtors but mortgage lenders can get a lot of useful information from them as well. Visit http://getbubbasnotes.com/marryme and get them free.

Do You Kno What a CPS

By Brian Sacks The reality in our business is that we are only as good as our last deal, but we are also only as good as the staff that surrounds us. While the success formula in this business is fairly simple, it’s clearly never an easy job unless you become very systematic. If you aren’t familiar with the formula for success here it is. Actually, I will give you two formulas: One for getting loans, and one for maintaining your reputation and pipeline. The formula for originating new business: l Pick a niche, become the expert and let everyone know about it. The formula for maintaining business: l Return your calls. l Communicate with all interested parties. l Set realistic expectations. That may mean saying what is not popular

but is necessary. l Get the needed documentation upfront. l Know your guidelines!

So … what is a CPS? Before I tell you what a CPS actually is, you need to know that every company and every office has one. Some are intentional and some may not even realize that they are functioning this way. A CPS is another name for a “Closing Prevention Specialist.” These are the staff that put up unnecessary road blocks. They have poor attitudes. They may hate their job and our industry, but still work in it each day. They can come in many forms … an underwriter, a processor, a closer and sometimes even one of your fellow originators. We all know that no matter who fails to do their job or what happens on the loan file, it is always our fault … I mean responsibility.

To illustrate this point, I just got off the phone with a client who was very angry that his new home was not completed. He is due to settle soon and may have to rent an apartment or rent back his current home until the property he is buying is done. He clearly has no idea who to scream at, but today he screamed at me. My response, “I am so sorry Mr. Smith … you realize the weather has been a bit challenging with an unusual amount of snow, but I will grab my hammer and some nails and meet you out there so we can get your home done.” Of course, after I said this to him, he calmed down and realized that I was the lender and had no control over how long it takes to complete his home. The simple way to cure the CPS problem, in my opinion, is to fire them on the spot. Leopards rarely change their spots, and if someone is preventing progress, they should have no place in your organization.

But there are other things you must do to succeed with or without a CPS! Have you ever heard a real estate agent scream? I mean really scream? Well, a few years ago, I had a loan in process and a real estate agent called me one day screaming at the top of her voice. She was angry that the loan hadn’t been approved and had been in process almost 30 days. She totally forgot that I had asked for documents prior to application. At application, I provided her and the borrower with a list of items that were still needed for approval. Each and every week, I sent her a status update, letting her and the buyer know what was still needed. I call this “being an offensive communicator!” In this case, after being yelled at for what seemed like an hour, I told her to meet me outside of her office and I was coming over to pick her up. The plan was to break into the borrower’s home and search for those W-2s, paystubs and bank statements.

ow S Is?

application. On this form, list the items you still need and the date you need them by. Have the borrower sign and date this form. After each application, I provide a copy of this form to the selling agent and put one in the file for my processor so she knows what I have requested. 3. Each and every week, I have a set meeting with my processor. It’s the same date and time each week. During this meeting, I review each and every file to see what is still needed, what issues we need to deal with, who needs to deal with it, and where we stand date wise. We review the appraisal, lock, income, assets and any other issue related to the file. 4. Each and every week, after this meeting, I send the listing and selling agent an update on the status of the loan.

The most important date in the contract that none of us pay attention to

You must constantly be advising your clients of the documentation that will be needed to get their loan approved. Ideally, you are getting them preapproved before they even go searching but here is my plan you can copy for being an offensive communicator. 1. Put the items needed on the back of your business cards and on your Web site and other marketing materials. 2. Create a hit list form that you use at

Brian Sacks is a nationally-renowned mortgage expert who has career closing of more than 5,924 transactions for in excess of $1 billion. He has trained, consulted and coached, tens of thousands of loan officers and company owners over the past 29 years on how to close more loans, make more money and still have a life. You can download his report, “The Four Tools You Can Use to Immediately Grow Your Business,” a www.AgentsChaseYou.com. Brian may be reached by phone at (443) 324-8424 or e-mail loanofficertips@gmail.com.

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Offensive communication explained

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My point in saying this was to lighten her up and make her laugh, but instead, she only became more aggravated. Sometimes, no matter what we do, we simply cannot win. But let’s return to the concept of being an offensive communicator for a minute because it is critical to your success … even more so, if you have a CPS in your office.

Do you know what the most important date in the contract is? I bet you said the closing date right? Actually, the contract also has a financing commitment date which most of us simply ignore. But if you are able to meet this date than you never have to worry about when it closes. I take this date one step further so that I can effectively communicate. On my files, I have what I call a “Submit by Date.” This is a date 10 days prior to the date the contract calls for financing commitment. As an example if the contract calls for closing on March 30, it might call for a financing commitment by March 10. I will then put down a date of March 1 as the Submit by Date. On March 1, I will look at the file and make sure it is ready to be submitted. If it is not ready, I will call the real estate agents and the borrower and let them know that if I don’t receive the needed documents by the next day, they will need to get an extension. This tells the agents that I am on top of my files and puts the burden back where it belongs—right on the buyer. Try this … your agents will love you for this and even the CPS in your office will be forced to admire you and become a help instead of a hindrance.

“Lenders need to document their strategy for monitoring third-party vendors, then test it and put it into use.”

Regs on the Oversight of Third-Parties Create Challenges for Both Lenders and TPOs The good news? There is now technology designed to ease the process for all parties By Greg Schroeder

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There is no shortage of compliance concerns facing those in the mortgage business today, and one of the more challenging relates to lender oversight and manage-

ment of third-party relationships. With regulations driven by the Dodd–Frank Wall Street Reform and Consumer Protection Act now being enforced by regulatory agencies,

including the Consumer Financial Protection Board (CFPB), lenders have to maintain tight ships with their vendor relationships. Lenders aren’t just being held accountable for their own actions, but for the actions of all the third parties with whom they do business. That includes third party originators. The CFPB and other agencies, including the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), are closely watching how lenders manage and monitor their third party relationships. Keeping up with the ever changing regulatory environment is difficult and the penalties are steep. Lenders cannot plead ignorance or point fingers when it comes to how someone they work with conducts their business, specifically third-party originators (TPOs). And originators are facing ever-increasing demands for more information and documentation each time they decide to apply to a new wholesaler. According to the OCC, lenders need to adopt risk management processes that are “commensurate with the level of risk and complexity of its third-party relationships,” and that run through the entire life cycle of these relationships. Such processes need to include plans that identify the risks of the third-party activities, how the vendor was selected, written agreements or contracts that cover the responsibilities of the thirdparty, as well as contingency plans for ending the relationship. Keeping up with the changing landscape is difficult and the penalties are steep. The Dodd-Frank Act authorizes the CFPB to increase its assessment of civil monetary penalties from up to $5,000 per violation per day to up to $25,000 per violation per day if violations are reckless, and up to $1 million per violation per day if violations are knowingly occurring. Regulators are stepping up their enforcement in this area. In fact, they have already uncovered cases in which lenders have failed to properly assess third parties for risk and failed to monitor their activities.

ships: originators themselves are facing much more scrutiny from the wholesale lenders with whom they do business. As regulators ask the lenders to provide proof that they are on top of their third-party relationships, the lenders are in turn requiring more of originators. Today, originators are asked by their wholesale lenders to provide more in terms of documentation, including proof of current licensing, financial statements, and resumes. They’re also asked to undergo background checks, and to demonstrate they have their own quality control process in place. When you consider that originators work with a number of wholesale lenders, it’s understandable they might grow frustrated by having to provide the same verifications and information to multiple lenders over and over.

Fannie Mae issues guidance

In late February, Fannie Mae issued new guidance on third-party originators. The agency stipulated that before entering into an agreement with a third-party originator, a lender must “satisfy itself that the thirdparty originator is capable of producing quality mortgages.” Fannie Mae requires the lender to have written procedures for the approval of thirdparty originators and outlined specifically that those procedures must include reviews of all of the following: l Most recent financial statements; l Current licenses; l Resumes of principal officers and underwriting personnel; l The third-party’s QC procedures so that the lender can determine if the party and its originations comply with the lender’s standards for quality; l Results of background checks for principal officers (for example, obtaining a credit report, screening through a mortgage fraud database or investor exclusionary list, confirming business references, etc.); and l The third-party originator’s hiring procedure for checking all employees, including management, involved in the origination Originators asked to jump of mortgage loans (including application through closing) against the U.S. General through more hoops Services Administration (GSA) Excluded As might be expected, it’s not just wholesale Parties List, the HUD Limited Denial of lenders that are affected by the regulatory Participation List (LDP List), and the directives on managing third party relation-

Federal Housing Finance Agency (FHFA) Suspended Counterparty Program (SCP) list. Fannie Mae recommends that lenders document their arrangement with thirdparty originators by a contractual agreement that includes specific warranties related to the eligibility of mortgages and the thirdparty originator’s responsibilities, as well as avenues of recourse that can be taken if the warranties are breached. As part of their effective management of third-party originators, lenders need to have a system for evaluating and approving those originators, according to Fannie Mae. Fannie Mae monitors the performance of third-party originations from lenders to identify issues with performance or profile. Based on these reviews, Fannie Mae may take action against lenders, up to and including restricting or eliminating a lender’s

ability to deliver third-party originations to whom you do business. That means conbeen put into action. The CFPB is also Fannie Mae. firming third-party originators are regislooking for lenders to test their programs. Freddie Mac has issued similar guidance tered and have the proper certifications to wholesale lenders. The agency instructs and licenses. It also means reviewing l It’s critical that lenders monitor third lenders to maintain written standards and third party originators’ policies and proparty vendors on an ongoing basis. A procedures for working with third party cedures and financials and making sure “point in time” check of a third-party originators, which will provide the foundaeverything is up to date. It’s not a bad originator is no longer enough—the regtion for a strong and comprehensive qualiidea to look into past compliance perulations clearly state that all third parties ty control program. Lenders should ensure formance, which can be indicative of must be monitored continually. that the standards and procedures they future problems. In fact, I typically recProblems can crop up very quickly, and adopt “yield investment-quality wholesale ommend a comprehensive background auditors need to be assured that lenders mortgages” and include standards and procheck to assure regulators that you’re on are performing regular checks. cedures that are appropriate for the top of your third party originators. lender’s organization,” Freddie Mac states. l It’s important to have a clear plan in l Keep complete and detailed records and place (and in writing) and then be able to be prepared to access them quickly. For lenders: Common sense prove that you are following it. Lenders Auditors will be looking for those records tips for managing originaneed to document their strategy for monas proof that you have a good plan in tor relationships itoring third-party vendors, then test it place for monitoring third parties and I recommend that lenders take the followand put it into use. If an auditor pays a are following it on an ongoing basis. ing actions when managing third-party visit, they will be looking for documented For wholesale lenders, keeping track of originators: strategies and procedures, and proof that continued on page 54 l Be very familiar with the originators with a program to monitor third parties has 53

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regs on the oversight of third-parties continued from page 53

what their third-party originators are doing presents a big challenge in terms of both time and money. Itâ&#x20AC;&#x2122;s uncommon for a lender to have the capability to effectively manage the surveillance and oversight of third parties. However, there is technology available today specifically designed to help mortgage lenders manage third-party relationships in an efficient and compliant manner. A word of caution: Not all of the technology available provides continual updates on third-party originators, so itâ&#x20AC;&#x2122;s vital that the vendor or service you choose does offer that feature. Auditors wonâ&#x20AC;&#x2122;t care if youâ&#x20AC;&#x2122;re able to prove you were compliant in a month ago if a problem arises today; they will be looking for proof that monitoring is ongoing.

Help for originators too While originators may be growing frustrated with all the requests for information from their wholesale lenders, itâ&#x20AC;&#x2122;s important for them to keep in mind that these requestsâ&#x20AC;&#x201D;which can be redundant coming from multiple lendersâ&#x20AC;&#x201D;stem from the newer regulations the lenders now must comply with. While third-party oversight has always been a factor, now itâ&#x20AC;&#x2122;s become even more critical to regulators. The ultimate goal is to protect consumers, so lenders are being held accountable for any slip-ups or oversights on the part of their originators. The good news for originators is that the same technology designed to help lenders manage and oversee their third-party originator relationships can be just as benefi-

cial to originators. Rather than filling out redundant applications and faxing the vast number of documents that lenders ask for, these newer systems allow originators to complete their application online and store all the documents lenders require. Doing so enables originators to easily apply to as many lenders as they would like. The best of these systems provide security against identity theft, and expedite approval times. Finally, while both lenders and their third-party originators may have traditionally viewed complying with these requirements as a necessary evil, there are several positive outcomes to using technology that manage the oversight of third-party relationships. Lenders can easily see which originators are producing and not producing, and can focus on growing the relationships with compliance-minded producers and eliminate those that are not. Overall carrying

costs are reduced, and the entire process of managing and overseeing third-party originators is streamlined and simplified. Originators can use the same technology to save time and money in the application process, and are able to apply to multiple wholesalers much more easily. And of course, regulators and their auditors are able to more clearly evaluate a lenderâ&#x20AC;&#x2122;s process and procedures for thirdparty oversight when the lender uses technology which readily provides all the proper documentation. Simply put, it just makes sense for all parties involved. Greg Schroeder is president of Comergence Compliance Monitoring LLC, an SaaS provider of third-party originator and appraiser risk management solutions. Comergence provides lenders and appraisal management companies with tools that review and continually monitor registered mortgage loan originators and appraisers.

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“TPOs currently have a hard time trying to cover all of the compliance changes because, unlike a lender, they do not have a compliance department and are only focused on originating loans.”

TPOs Are Alive and Kicking! By John F. Cady

All of this approval work on the TPO is done because the lender’s name is associated with their brokers on every loan that is brought through that particular TPO for their home loan. If something goes wrong on a loan, it not only looks bad on the TPO, but on the continued on page 56

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Are there any compliance issues for TPOs? Previously in our industry, compliance used to be an issue when brokers would skirt the rules to work in these “grey” areas. However, with all of the regulations that accompany home loans in today’s market this is no longer possible. You cannot avoid the regulations and go under the radar. TPOs currently have a hard time trying to cover all of the compliance changes because, unlike a lender, they do not have a compliance department and are only focused on originating loans. Having a lender that is up-to-date on all compliance issues makes it a lot easier for TPOs to focus on what they do best–originating loans. What are the modern day marketing strategies for TPOs? Before LO comp, the industry was driven by profits. Whoever had the best rates and wherever the broker could make the most money would get the business. However, this is not the case anymore. Now TPOs are all about improving their business. TPOs go where they have access to marketing and training for their originators. Today, it is all about being a “lending partner.” TPOs are looking for lenders that offer new and upcoming products. Most TPOs do not have their own marketing departments. So, they appreciate utilizing these resources provided by their lender partners. TPOs that strategize marketing with their lender increase their pipeline and profit. Most TPOs will happily accept any marketing assistance offered. TPOs want the best service possible from their lender and seek whoever is willing to go the extra mile not only with marketing but also by offering the best communication and easiest workflow so that both the lender and the broker provide a successful loan transaction to all parties involved. Lenders want quality brokers, those

ker) and includes verifying that the broker: l Has had no regulatory infractions l Is financially strong and sound (as indicated by their assets and profit and losses statements) l Has an acceptable credit profile.

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Within the past few years, we have seen the mortgage industry shift from lenders that serve primarily wholesale to one that now includes more retail offices. While there are some that believe the wholesale channel is dying, they could not be more wrong. In fact, the wholesale business is very much alive and thriving. The responsibility for this success lies, in part, in the fact that third-party originators (TPOs) are choosing to stay on the wholesale side of the business and not make the leap over to the retail side. There are three types of lenders in the industry: 100 percent retail, 100 percent wholesale and the hybrid lender who serves both channels. Each concentration services their clientele differently than the other. Those lenders that support both channels and maintain an independent workflow for each have perfected catering to their differing expectations and requirements, and those are the lenders who provide optimum service to their valued TPO clients. How can one avoid the TPO vs. Retail conflict? Actually, this conflict doesn’t exist much anymore. Over the last five years most brokers who wanted to move into the retail arena did so. The remaining TPOs choose to remain. They like owning their own business. They are successful and see no reason to change. They confidently function in competition with the retail originator, making TPO a valid business strategy that is still dynamic. In the industry, we must recognize that the two channels–wholesale and retail are distinctly different. Not only do they offer different products, but they are governed by differing guidelines and differing requirements. No “one shop” fits all lending needs. There is a legitimate need for both wholesale and retail originations. The two channels require support and tools specific to their needs.

who will close at least 20 percent to 25 percent of their business with that lender. Lenders and TPOs both look to build a trusting and profitable business partnership. It is taxing on both operations to close the incidental transaction. A TPO wants a lender with integrity, who is like-minded, who carry purchase money and has high standards of business practices. Because a lender is also looking for soundness, integrity and high standards of business practices from their TPO, the Broker Approval Process most lenders practice should indicate no risk to their own reputation (by associating with the reputation of this bro-

tpos are alive and kicking! continued from page 55

lender as well. Both of their reputations are at stake for every home loan, therefore, it will only work if they are treated as partners to make the home loan process run as smoothly as possible. Likewise, the reputation of the TPO can easily be tarnished by a lender who cannot perform. TPOs will also vet a potential lender by reviewing their product mix and tools, ease of use, and quick access to their business development manager. Most TPOs will test the waters first but sending a lender who is a potential partner, a few tough deals. Depending on the success of those transactions, the lender can also expect a mix of more “vanilla-type” loans. Once a TPO finds a lender who consistently contributes to the broker’s

success, the relationship is deemed solid and hopefully long-lasting. In this case, the TPO will send the lender more of a consistent basis thus forming a stronger partnership. Some important qualities that will entice a TPO to form a lending partnership with a particular lender include: l Superior customer service: In a multifaceted, fast-paced industry like mortgage lending, superior customer service is a requirement. Successful compliance with the numerous industry regulations commands clear communication with all participants of the loan. l Consistent underwriting practices: Both the lender and the TPO want to be on the same page when it comes to underwriting the loan to ensure the

process goes smoothly. l Ease of using the lender: From submissions to navigating the lender’s Web site for guidelines, forms, etc., all must be easily accessible. A lender who is difficult to use can easily set back the transaction. l Consistent turn-times: If a lender has excessive turn-times, real estate agents (or originators) will easily go elsewhere in order to keep their client happy. l Pricing: This industry is very pricedriven. With pricing that can change at any moment, the lender has to stay competitive. l Tools: Training, marketing tools and technical support are very valuable to TPOs. The lender, who offers these to the wholesale originator, has the advantage at using these items to form a stronger, lasting relationship with the TPO.

Therefore, if you hear someone say that wholesale business is dead, you can be sure to let them know that it is quite the opposite. Keep in mind that there are the three types of lenders in the industry and that each concentration services their clientele differently than the other. Also, in the industry today, both lenders and TPOs are looking for partners who will support each other and help provide a successful loan transaction to all parties involved. John F. Cady is senior vice president of production at Mountain West Financial Inc. John has more than 20 years of mortgage banking experience, and is responsible for the management of all retail and wholesale mortgage banking production activities. He may be reached by phone at (909) 557-2227 or e-mail john.cady@mwfinc.com.

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“It is interesting that the industry is so focused upon compliance and not success … I always thought that quality control starts at the beginning of the process.”

Wake Up Mortgage Wholesalers— Revisited Again

Wake up wholesalers

By Dave Hershman service—not that rates, programs and service are not important. But to be a great wholesale company and a leader— these factors must be a given instead of the entire focus. In other words, if you don’t have the “basic three” down pat— don’t even bother trying to become a leader. And don’t think that I am taking for granted that the delivery of the “basic three” is easy. I ran wholesale as well as retail operations and this business is not easy in this regard. And in today’s market, it has become even harder, especially with regard to delivering first-in-class service with changing programs and quality issues. What represents added value? For one, wholesalers should be trying to improve the careers of their targets. If wholesalers provide training, it is typically on their procedures and their

Support efforts to improve the careers of your targets. Not just to become better sales people but to become experts within the industry. It is the experts who will survive. It is the experts who will thrive after the boom. Loan officers cannot service real estate agents by solely promising the best rates as opposed to having extra value to help enhance agent business through synergistic relationships. How are you helping your loan officer clients deliver this value? Certainly not by buying them golf or drinks. I cannot imagine how these things will help your clients become higher quality customers. Training is one way to deliver value to your customers—either by delivering this training through your company or supporting industry-wide efforts. Unfortunately, there are not enough alternatives within this industry for broad-based financial, marketing and

Gary Robinson Vice President, Commercial Loans

585.424.2750 l www.monroecap.net

continued on page 58

Taylor Wold Commercial Loan Officer

3445 Winton Place, Suite 228 l Rochester, New York 14623

Sarah Montz Commercial Loan Operations

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Commercial Real Estate Financing up to $10,000,000 • Acquisition, Renovation, Bridge and Mezzanine Financing • Typical Loan Term 12-24 Months • Interest Only Payments • Closings Generally Within 30 Days of Commitment Issuance • Brokers Protected

service training that resides well above the basic level. Personally, I really thought training would become more important in this industry when licensing became a requirement. However, licensing just covers basics and compliance. It does not help a loan officer succeed. And more than 50 percent of the loan officers aren’t even required to get that because they work for banks, though you can be sure the banks are delivering compliance training. It is interesting that the industry is so focused upon compliance and not success … I always thought that quality control starts at the beginning of the process. How many wholesalers complain about loan officers putting together poor case files? On the other hand, much time are they spending training them to put a good file together, and not just including the right forms? More importantly, how are they showing them how a great file can lead to better service and then help them mine that service for more opportunities? A transaction has a sphere of its

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Rates moving down in December and January gave us a stark reminder of what the refinance boom was like. Only, the boom of the first quarter of 2015 is not likely to last nearly as long as what we have previously witnessed. As a matter of fact, by mid-February rates already had started moving back up. Every time we have a “boom,” loan officer pipelines fill up and, of course, that translates into good times for wholesale companies. The focus turns to accommodating the business and not the future. For example, good underwriters again become a hot commodity. Certainly getting loans closed in the right way is the first priority for all companies, retail and wholesale. So what happens when this mini-refinance boom ends? Certainly, we all hope that the spring purchase market fills in some of the gap, but experience will tell us that purchase markets improve linearly, which refinance markets explode and contract exponentially. It appears to the neutral observer that very little is being done to position the typical wholesaler to succeed after boom times. For example, if a wholesale lender is focusing upon rates, they are likely to be attracting brokers who are selling based upon rates instead of relationships. These brokers are also more likely to be those who are less experienced and less likely to be succeeding in a purchase market. In reality, those brokers who are executing broad-based relationship business models should be the targets every wholesaler should focus their attention upon. However, that strategy requires a long-range business model and I don’t quite see that happening today—and nor did I see that happening nearly ten years ago when I first wrote this article. A relationship model requires the delivery of what we call “added value” instead of hawking rates, programs and

products. This is akin to a loan officer speaking at real estate agent sales meeting and talking about their great rates, programs, service and doughnuts.

wake up mortgage wholesalers continued from page 57

expert. If you think I am focused upon the word expert, you are right. Experts earn more. Experts don’t sell—people come to them for advice. Experts become leaders and will survive the end of the refinance boom. Wholesalers, are you experts? If you are not, how can you teach your most important clients to become experts?

own and the development of relationships should come from within each file, but only if the file itself is packaged in the right way. There are other ways to provide such value, including marketing support. How many wholesalers are helping brokers focus upon increasing their ability to help increase sales of their real estate agents? Or perhaps helping their business-to-business clients such as divorce attorneys, financial planners and CPAs expand their own business? I have focused upon two things in my career. Helping loan officers become experts in the industry so that they can become expert mortgage advisors instead of focusing upon rates, and showing loan officers how to market like an

Expert knowledge and expert marketing One without the other is worthless. Experts who cannot market like experts will not position themselves in the right way. Those who market well but are not experts will similarly fail. Those who can show loan officers how to provide value to the real estate community, as well as alternative referral sources, will position

themselves differently within this industry. If this is not part of your business model, then you will be missing the boat when it sails in the long term. The benefits of being an expert and furthering expertise goes beyond marketing success. If you are reprocessing loans for your brokers, how expensive is that? Will you be able to afford to lend this help when the business is not so profitable? Where will this leave your clients when you have to withdraw this level of support? Lack of quality training and marketing support is quite expensive for all the players involved—from the homeowners we are serving to the brokers’ employers and the wholesalers who service the brokers. In the long run, not delivering this training will be deadly. I should point out that it is not only the loan officer who needs to become an expert—so must the wholesaler who is

serving this loan officer. Is your company helping you with this worthy goal? Without this important component you will unfortunately be in the position of the blind leading the blind. If it leads your clients down the wrong path, the end of good times is going to be very painful. Granted it will be painful for all—but especially for those who are not in the best position to deliver value. Wake up and think about it because the clock is again ticking, and this time more quickly. Dave Hershman is a top author in the mortgage industry with seven books published. He is also the founder of the OriginationPro Marketing System, and currently the director of branch support for McLean Mortgage. He may be reached by e-mail at dave@hershmangroup.com or visit www.originationpro.com.

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“In this highly regulated age, we find ourselves constantly amazed when an account executive, real estate agent, loan officer, or any other salesperson is not adhering to CAN-SPAM compliance regulations. The risk they’re taking is enormous.”

Relationship Marketing and TPOs By Brent Emler

stranger blatantly pitching their product? Furthermore, is the person sending these marketing e-mails really going to call all of the recipients to follow up? No, realistically, he or she won’t. So there goes the argument that e-mail blasting is a way to soften up cold calls. It’s really just a function of blindly checking the marketing box. Let’s also be clear about something important here. SPAMMING is illegal. If you scrape Web sites for e-mail addresses and then send e-mail blasts to those contacts, you’re breaking the law. In this highly regulated age, we find ourselves constantly amazed when an account executive, real estate agent, loan officer, or any other salesperson is not adhering to CAN-SPAM compliance regulations. The risk they’re taking is enormous. Not only could they find themselves and their company in trouble, they could land their email provider in a “Black List” situation.

The case for deep relationships with TPOs

Relationship matter While doing research for this article, I found a number of different statistics regarding how often we’re marketed to each day. Some of the research says that we’re hit with between 3,000 and 20,000 marketing messages per day. Other articles make a great case about the human brain’s ability to disregard superfluous information. So the marketing impressions we actually consume are more along the lines of 300-500. Either way you look at it, we have a thick armor plate when it comes to marketing impressions we really pay attention to. I found what most in the advertising space consider the oldest article written on the topic. In it, Samuel Johnson, a notable publicist wrote, “Advertisements are now so numerous that they are very negligently perused, and it has therefore become necessary to gain attention by magnificence of promises, and by eloquence, sometimes sublime and sometimes pathetic.” Imagine his dismay at an e-mail inbox with 300 advertisements from random strangers pitching their rates without even the courtesy of a phone call. Just because you can put together a collection of electrons and hammer the Internet with proclamations of great rates, it doesn’t mean that you should. If you make your focus the development of relationships and support those relationships with email communications, you’ll have happier customers, happier processors, and happier bean counters back at the corporate office. You also won’t’ have to spend your valuable time coming up with new “promises of magnificence.” Your customers will experience your magnificence when you provide them with a great product, combined with an exceptional experience. Brent Emler is director of sales and marketing at Velma.com, a customizable marketing software provider exclusive to the mortgage industry. He may be reached by e-mail at brent@velma.com.

n National Mortgage Professional Magazine n MARCH 2015

During the interview with Matt, he shared some of the reasons he is building the People’s Home Equity’s wholesale platform by focusing on the quality of their TPO relationships rather than the quantity. He is building a team of account executives who are charged with developing deep and lasting relationships. The days of approving as many brokers as possible and using a strategy based on hope no longer make sense. The incremental costs of supporting hundreds of brokers on a pricing engine result in operational inefficiencies, reduced pullthrough rates and inferior, confusing communication between the lender, broker, and subsequently, the referral partners and clients. People’s Home Equity’s account executives are given a clearly defined geographic area so the brokers and loan officers have a very clear understanding of who their points of contact are. This results in a consistent voice and message for the brokers and loan officers. In an effort to drive competition within their ranks, some wholesale

focusing on the relationships, understanding the broker’s business, and emphasizing the importance for everyone to focus on the process will allow them to remain highly competitive on price, while maintaining exemplary service.

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What does a CRM and relationship marketing service provider know about third-party originators (TPOs)? The answer is, probably not as much as you do! What we do know about though, is the value of relationships. The principles of relationship marketing apply regardless of the niche subject. At my company, we also know that we have to align with companies who share in our philosophy: Shotgun marketing is not effective for either the sender or recipient. It’s become too easy for marketers and sales people to use the “shotgun,” or to further the metaphor, “nuclear bomb” approach to the sales and marketing effort. A lot of people do it but it just isn’t effective. To understand how this relates to the TPO marketplace, I contacted Matt Johnson, who heads up the new wholesale division at People’s Home Equity Inc. Matt’s experience in the industry combined with his fresh approach to wholesale lending made him a great candidate for this interview. Matt maintains that the culture at People’s Home Equity is to embrace this philosophy: “Relationship Quality Far Outweighs Relationship Quantity.” Since e-mail marketing is incredibly inexpensive, many account executives think that blasting out thousands and thousands of emails each day is an effective sales and marketing strategy. The thinking is, “Well, you never know. Maybe one of the people on the list of 5,000 recipients that receive my daily e-mails will be dissatisfied with their current lender. Maybe they aren’t getting the response they hope to get from their current lender. Just maybe I’ll be able to attract them with a slightly better rate.” That’s dragnet marketing, “just in case” and “because you never know” marketing. One could argue that this type of marketing is an effort to gain “eyeball share,” which will then soften subsequent sales calls. The problem with this argument is multi-layered, but it starts and probably ends with asking yourself how you feel about repeatedly getting an e-mail from a stranger. Do you like getting e-mail after e-mail from someone you don’t know? Do you like a

lenders take the approach of even pitting their own AEs against one another. There may be some psychological advantage to this approach, however, it creates an environment where the brokers and loan officers don’t have a clear line of communication. In addition to carving out specific regions, Matt’s team is focusing more on wallet share than market share. They’re asking questions about how committed their broker networks are for a couple of reasons. First, the aforementioned incremental costs associated with connecting their brokers with their pricing engine. Then there’s an even more important component—operational efficiency. If brokers are choosing the lender on a whim or on the off-chance they were one of the 5,000 e-mail recipients, the file becomes a “Throw it against the wall and hope it sticks” transaction. Make no mistake, the relationship approach to TPO lending is more work upfront, but it’s well worth the investment. Matt and his group are judging themselves by the quality of their submissions and the pull-through rate. Naturally, volume is important, but it can’t the only metric by which you judge your success. What’s better? An account executive funding $20 million a month with $40 million in submissions or the one who is funding $18 million with $19.5 in submissions? If we’re only looking at the top line volume numbers, perhaps it would be the former. Shouldn’t the bottom line really be the number we all care about? With a current pull-through rate of better than 92 percent, Matt and company have been hitting their marks. The brokers and loan officers they’re working with are appreciating the “hand on” approach. They don’t get false positives which can result in embarrassing phone calls to referral partners and clients. The AEs are getting to know their broker network and loan officers in a deep and meaningful way. In turn, they’re able to identify opportunities to make exceptions to their process without using a complicated “preferred broker” model. Matt admits that as they continue to grow, their approach will be tested. The pressure to hit volume numbers will make it difficult to remain steadfast in their principled approach. Typically, companies are either really great at pricing but sacrifice service or they provide exceptional service, but marginal pricing. Matt believes that

“People are people and people make mistakes.”

People Are People By Eric Weinstein

MARCH 2015 n National Mortgage Professional Magazine n

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This article will take an in depth focus on and will analyze in fullest modern day marketing strategies for the typical TPO. But first … I just feel like I have to unload. I just had a loan get declined two days before closing because the bank was using an outdated form and refused to correct it. People are people and people make mistakes. Also, people have faults like pride. Sometimes they do not want to recognize their own mistakes. It is a natural human tendency. I am sure, at some future board meeting at the bank, someone will bring this topic up and get the form changed six months from now, but that is not going to bring back my $6,000 commission on this deal today. Every loan officer has gone through this scenario, I am sure. You send in a file with everything you know they are going to ask for. Then, the underwriting

approval comes back asking for a paper you KNOW you put in there. You are confused. So you ask, “Did you not see it, or was what I sent in not satisfactory?” Then, two days later, you get another Conditional Approval, but the condition is no longer on there. Wouldn’t it be nice to get an e-mail saying, “Oops! I missed that. I got it. Sorry!” I have never gotten an email like that from an underwriter. People just hate to admit when they make a mistake. The Big Bang theory states that the universe exploded into existence and it is constantly expanding outward into … well, nobody knows. The Jewish Kabbalah takes a slightly different slant. It says at first, the Lord was everywhere. But because the Lord is perfect in every way, he had to withdraw himself from a part of the universe so Man could exist. This is because Man and the world we live

in are not perfect. I think of this every time the world gives me the heel of its boot. Underwriters are not perfect. Systems to run organizations are not perfect. People have flaws, pride, prejudice and all the other things that make my loans get declined for no good apparent reason. I am Jewish, but I really like the part in the Christian Lord’s Prayer where it says: “And forgive us our trespasses, as we forgive those who trespass against us.” As much as people are human and make mistakes, this reminds me that I probably screw up just as much as they do. So I have to give them a break. In Jewish folktales, it is said there are three types of evil in the world: 1. There is the evil that men do to other men; 2. There is the evil that a man does that comes around and bites him on their own behind; and 3. Before we are born into this world, the Lord sits us down and tells us: “The world I am sending you to is not perfect. There are diseases and accidents and a bunch of other stuff you are not

going to like. But, you have a choice … you can stay here up in Heaven with me or go down there and experience all that life has to offer. If you are here, you made that choice.” I know all this. Yet, sometimes it is just so annoying! Why does the world have to be so imperfect. Why do other people constantly screw up and it costs me money? I am sorry … what was I saying about TPOs again? Eric Weinstein worked in banking, on the commercial real estate side until 1991, when he fell in love with residential lending. In 1995, he started a small mortgage company in his basement called Carteret Mortgage Corporation, which in 2003, grew to one of the largest mortgage broker companies in the United States. These days, Eric is semi-retired, doing mortgages by referral only. As he likes to put it, “He is either saving people money per month or helping them buy a new home. What a great job!” He may be reached by phone at (703) 5058692 or e-mail eweinstein4u@gmail.com.

Why Choose Mortgage News Network? We understand that you have many choices for your video production work. However, Mortgage News Network stands apart for a number of reasons. We understand your business. Born out of National Mortgage Professional Magazine, our producers are our editors and they have been covering your business for many years. Don’t trust your video messages to people who don’t understand your stories. We understand storytelling. The best video productions tell stories effectively. Our producers have been writing stories about this industry for many years and they understand

what it takes to tell compelling stories that will get your target market to take action. We produce for the long term. Our business is based on relationships and those develop over time. It makes sense for us to do extra work for our clients upfront so that we can be ready to save them time and money later on. We think beyond the current production. We promote your production. Because we’re associated with a major trade publication, we can help promote every video we produce for our clients. We also use social media, where appropriate, to help our clients get the most out of every video we produce.

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A fresh & health healthy alth hy tak take e on other otherwise wise boring stuff. stuf ufff

Ocwen Gets Little Credit for He Homeowners, Wall Street Rep By George Yacik

cwen Financial Corporation may be getting an unfair bad rap from regulators and consumer protection agencies, a new report from a Wall Street investment firm’s non-agency RMBS strategists says. In reality, struggling borrowers are more likely to stay in their homes or receive a generous loan modification from Ocwen than from other sub-prime mortgage servicers. Few companies in the residential mortgage business have been under

such negative scrutiny lately as Ocwen. In late 2013, the company agreed to a $2.1 billion settlement and fine with federal and state regulators to settle charges of alleged misconduct in its big sub-prime loan servicing operation. Last December it reached a settlement with New York State regulators that required the company to change its practices and provide $150 million to help struggling homeowners in the state. The agreement also forced founder William Erbey to resign as chairman of the company as well as four related companies. The company’s stock price is down more than 80 percent in the last year to less than $9 a share from a November

2013 peak of $56.66. While these events certainly create a perception that Ocwen’s strategies hurt borrowers, that may not be true, at least compared to its industry competitors, according to a recent report by Morgan Stanley on the company’s mortgage servicing operations In fact, compared to other servicers of sub-prime mortgages, Ocwen does a better job of keeping struggling borrowers in their homes and reducing the amount of money they owe on their loan, the report says. “Ocwen’s modification style differs starkly from its peers,” the report says. “Since the beginning of 2011, they have

been far more likely to give a borrower a principal modification than the market as a whole. Ocwen has been far more generous to borrowers than the overall sub-prime market.” “To the extent the Obama Administration wants to keep borrowers in their homes, Ocwen seems to be accomplishing that—at least for now,” the report says. Ocwen has previously stated that since the onset of the mortgage crisis, they have helped more than 500,000 American families avoid foreclosure by offering loan modifications. While Ocwen modifies borrowers’ mortgages at about the same rate as

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George Yacik is a special correspondent to National Mortgage Professional Magazine. He has been covering the residential mortgage business for more than 20 years and writes frequently for industry publications. He is a former vice president of SMR Research Corporation, where he was the lead research analyst on residential and sub-prime mortgage loans, and a former editor at American Banker.

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n National Mortgage Professional Magazine n MARCH 2015

other sub-prime servicers, since 2011 the company was “more likely to perform a principal modification, and from 2011 through 2014, far more likely to cut a borrower’s monthly P&I payment by 50 percent or more,” the Feb. 25 report said. Moreover, “This modification style appears to have been effective in keeping borrowers in their homes,” Morgan Stanley adds. “Whether a borrower first went delinquent while being serviced by Ocwen, or fell delinquent and was then transferred to Ocwen, we find that these borrowers are more likely to be in their home today than if the MSR (mortgage servicing right) was held elsewhere.”

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elping ort Says

Ocwen is the nation’s largest subprime mortgage servicer, with more than 25 percent of the legacy nonagency residential mortgage-backed securities (RMBS) market, including almost 40 percent of the 2004-2007 sub-prime universe, 22 percent of Alt-A mortgages, 23 percent of option ARMs, and eight percent of prime jumbo loans, according to Morgan Stanley. In February, Ocwen agreed to sell a $9.8 billion mortgage servicing portfolio of loans owned by Freddie Mac to Nationstar Mortgage Holdings Inc. and earlier this week it reported it would sell residential mortgage servicing rights on $45 billion of agency loans to an undisclosed buyer. Ironically, Morgan Stanley noted that some of Ocwen’s strategies, while benefiting borrowers, could be “potentially disadvantageous” to holders of its RMBS. When borrowers get a loan modification, bondholders take a loss. “Not only does the modification—if ultimately unsuccessful—delay the recognition of principal recovery from the liquidation of the underlying property, it also forces the trust to take a loss in the month that the principal modification occurs,” the report said. “Furthermore, the percent by which the monthly principal and interest payment decreases could mean that the principal modifications themselves—and thus the losses—were steep, while also eating into the excess interest in the deal.” “Yes, the servicer has an obligation to investors to maximize the value of the trust, but there are other forces at play,” Morgan Stanley notes, such as keeping borrowers in their homes. Yet it doesn’t appear that Ocwen gets a lot of credit for that. And, according to the report, “it appears that Ocwen’s servicing results are in line with or better than the other servicers.” The combination of downgrades by ratings agencies and the number of actions taken against the company by regulators have led investors to question Ocwen’s ability to continue servicing their non-agency portfolio, Morgan Stanley notes. The firm advises them to stick with Ocwen. “In our base case, legacy non-agency MSRs [should] remain with Ocwen,” the Wall Street firm said. “It doesn’t appear in investors’ best interest to replace Ocwen as servicer. In addition to the potential for short-term cash flow disruption, Ocwen’s current servicing practices are very similar to market averages, leaving investors with little to gain from an MSR transfer.”

heard on the street

MARCH 2015 n National Mortgage Professional Magazine n

CASTANON

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l CMG Financial has added Michael Rodriguez to its team in the Monterey, Calif. area.

l Envoy Mortgage has announced its latest hiring, Michael Castanon, an executive with more than 20 years of mortgage and financial industry experience, as regional vice president of the Southwest region for the company’s retail operation, which includes central and southern California and the state of Arizona. l Robert Allphin has been named regional manager of Guild Mortgage Company’s Mountain region of the U.S. Guild has also promoted Matt MacGillivray to the role of southeast regional manager. l Gina Morales has been named vice president of marketing for Nationwide Title Clearing (NTC). NTC has also named Todd Gomes national account executive. l Paramount Residential Mortgage Group Inc. (PRMI) has named JaJean Leaf as correspondent operations manager. l HomeBridge Wholesale has named Craig Chapman eastern divisional sales manager, based in Washington, D.C.

BANNISTER DIRRANE

l American Pacific Mortgage (APM) has announced the hiring of Jason Bannister as director of capital markets, specialty products, where he will be responsible for developing new specialty products, educating loan officers on specialty products.

l National Mortgage Insurance Corporation (National MI), a subsidiary of NMI Holdings Inc., has announced the appointment of Michael J. Dirrane as senior managing director and chief sales officer of National MI.

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RODRIGUEZ

Mortgage Professionals to Watch

l Envoy Mortgage has announced the hiring of 20-year industry veteran Kenneth Panosian for the newly created position of regional vice president of the Great Lakes Region.

l Mortgage Network Inc. has appointed Erin Cornwell to the position of director of strategic implementation and process improvement.

KIM

David Neylan, senior vice president, who has been with Guild since 2007. He said the idea for the FIS Group came out of Guild’s experience in the correspondent lending channel, which Neylan has managed since inception in 2011. In addition, Neylan is responsible for management and oversight of the consumer direct and wholesale channels at Guild. “Smaller banks and credit unions were stuck,” Neylan said. “They faced a dilemma where if they didn’t offer mortgages, the consumer would walk across the street to a big bank. If they sold the loan, the big bank would start soliciting right away. We heard stories about one bank trying to cross-sell 13 different products in a one-year period to a small bank customer after they purchased his loan. In partnering with Guild, the smaller institutions can continue to offer mortgages to their customers and compete with the bigger banks.”

PANOSIAN

continued from page 48

l Thomas Kim has been promoted by the Mortgage Bankers Association (MBA) to the position of senior vice president of commercial/multifamily. l Open Mortgage has named JoAnna Bignell vice president of retail recruitment for the firm’s retail and reverse divisions. continued on page 66

NAPMW REPORT M A R C H

2 0 1 5

APMW Foundation Now Offering Grants By Katherine Venters, GML

We want you to know! The APMW Foundation is a National Foundation whose primary purpose is to promote a better education work force at all levels in mortgage lending and its related fields. To fulfill this purpose, the APMW Foundation provides financial aid for mortgage lending education on a non-discriminatory basis in two categories: A. Pursuit of professional designations conferred by the Institute of Mortgage Lending. B. Other educational opportunities appropriate for professionals in mortgage lending and its related fields. Grants to individuals shall be made on a demonstrated financial need basis and shall be awarded without regard to race, gender, national origin, age or religious affiliation. Grants to organizations for the underwriting of educational symposiums or seminars shall be made based upon a determination of overall contribution to the mortgage related industries. Individual grants will be considered after the student has completed the class/course with a grade of “C” or better. Applicants will be requested to provide proof of payment and a certificate of passing the class/course of study. After review of student’s application for a grant, they may receive up to 80 percent of the cost. To apply for a grant, please submit the following items to the Grants Review Committee:

Katherine Venters, GML is past national president of NAPMW and current board of director for The APMW Foundation. She may be reached by phone at (713) 899-9989 or e-mail kkosicki@comcast.com.

n National Mortgage Professional Magazine n MARCH 2015

Visit www.apmwfoundation.org to apply. For more information, contact Katherine Venters, GML, APMW Foundation director by phone at (713) 8999989 or e-mail kkosicki@comcast.com. Donations to the APMW Foundation are welcomed on a corporate or individual basis.

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l Completed APMW Grant Application Form l Proof of cleared payment l Proof of completion of class/course l Statement of 150 words of less describing financial need, and career and educational goals l Two letters of recommendation

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The National Association of Professional Mortgage Women (NAPMW) Partners in Progress sponsor program is designed for companies of all sizes interested in enhancing their national presence with NAPMW, the premier community of professionals in the mortgage banking industry. NAPMW’s sponsor packages are priced to encourage participation by businesses of all sizes. The fee for each package is affordable and all maximize sponsors’ exposure beyond what would be received if purchased individually. Primary benefits include: • National visibility to professionals from all areas of the mortgage industry • Advertising exposure through numerous proven communication channels • High-profile marketing at key association events For more information or to become a sponsor of the Partners in Progrees program, contact:

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l LenderLive Network Inc. has named Joe Chappell as the firm’s senior vice president of operations for the company’s Settlement Services Division, Note: Submissions sent via e-mail are prewhere he will be responsible for ven- ferred. The deadline for submissions is the dor management, title, and escrow 1st of the month prior to the target issue. operations in the company’s Denver, Colo., Madison Heights, Mich., and Kansas City, Mo. locations. LenderLive has also named Shana Lasko as executive vice president of operation and client management N A T I O N A L M O R T G A G E for mortgage services. P R O F E S S I O N A L

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www.nat.com/DeannaMellas www.nat.com/Texas

Like Clockwork ®

l Norcom Mortgage has named Audra StoneHill Group as business developSantos branch manager of the firm’s ment manager. new Monroe, Conn. location. l Veteran mortgage professional Ken Keating has joined Mortgage Network Inc. as a loan officer in the company’s Doylestown, Pa. branch office. l Capsilon has announced the appointment of Dave Nielsen as senior vice president of sales. l Dan Mugge has been named senior vice president of program developl OpenClose has added Will Foy as intement for ClosingCorp. gration manager, where he will be l HomeUnion has named Julie responsible for client integrations, Manthey senior director of asset manproject management, quality assuragement. ance and testing, the application of l ReverseVision has named Wendy Peel agile technology methods, and busivice president of sales and marketing. ness analysis and solution crafting. l GSF Mortgage has announced the addition of Robert Brockerman to its team as a loan officer in Florida where he will be working under Ruth Watkins, branch manager. GSF has also added MLO Nicole Vaughn to its branch in Hypoluxo, Fla. where she will be working under Branch Manager Robert Scolnick. l Mortgage document preparation l Guaranteed Rate has announced that vendor International Document it has named Jonathan Mullins as Services Inc. (IDS) has announced regional manager and senior vice that it has promoted former president, based in the company’s Executive Vice President Mark Roswell, Ga. office where he will overMackey to the position of chief execsee the company’s mortgage lending, utive officer. sales and operations in Louisiana, Mississippi and south Texas, including San Antonio, Austin and Houston, and he will co-manage those operations and recruiting in Alabama. MACKEY

DEANNA MELLAS North American Title Company Business Consultant, National Partners in Progress Chair c: 832.465.6413 e: dmellas@nat.com

continued from page 64

FOY

BECOME A

heard on the street

l Grant Spurrell, a sales leader with more than 25 years of mortgage banking experience, has joined The

calendar of events see page 69

Step Inside Ginnie Mae What’s Next for the Housing Finance Industry? By Ted W. Tozer Following considerable effort to enact housing finance reform during the 113th Congress that concluded last year, legislators appear to have hit the “pause button” on reform efforts during the early days of the 114th Congress. Those considering what type of housing finance model will work for the country continue to take a deep dive look at the Ginnie Mae model to understand why it has succeeded in the face of the worst housing market in our lifetimes. I believe it’s because Ginnie Mae is already doing what housing experts say needs to be achieved in a future housing finance structure. It is placing private capital well in front of taxpayer risk. It is preserving access to safe and simple loan products such as the 30-year, fixed-rate mortgage. It is enabling lenders to borrow from global capital markets at low costs, so affordable credit is available far and wide. And it keeps smaller lenders competitive against the nation’s largest banks because investors are indifferent to the size and financial strength of the Issuer of the Ginnie Mae guaranteed mortgagebacked security (MBS). Investors’ primary interest is the full faith and credit of the U.S. government that stands behind Ginnie Mae’s MBS. Ginnie Mae’s unique model survived the housing crisis that placed the GSEs into conservatorship because:

Ted W. Tozer is was sworn in as president of Ginnie Mae on Feb. 24, 2010, bringing with him more than 30 years of experience in the mortgage, banking and securities industries. As president of Ginnie Mae, Tozer actively manages Ginnie Mae’s $1.5 trillion portfolio of mortgage-backed securities (MBS) and more than $460 billion in annual issuance.

n National Mortgage Professional Magazine n MARCH 2015

Our issuer base is growing every year—up nearly 30 percent since the time I took office in 2010—in both number and diversity, providing the opportunity for private capital to play an ever-increasing role in our future. Fewer than four years ago, our four largest Issuers were responsible for more than 60 percent of our monthly issuance. Our Top 10 Issuers comprised more than 80 percent of our issuance. Today, only one institution is in double digits. The share of the Top 10 is down to about 50 percent. That diversification is healthy not only for Ginnie Mae but the nation’s housing market, as well. Moreover, it provides insight into the costs and benefits of the dominant players in today’s housing finance system. For instance, policymakers have a choice to go with a Fannie/Freddie model in which two large enterprises are regulated and essentially control much of the mortgage market or a broad network of participants that will boost competition and improve credit access and pricing to borrowers. Sure, it is easier to regulate just two, albeit sizeable, institutions than conduct counterparty credit risk management on hundreds of Issuers. But bigger isn’t always better when it comes to taxpayer risk. Unfortunately, as we now know, the GSE model didn’t work out well for the American taxpayer. It gave us two “Too Big to Fail” enterprises that are now in government conservatorship. Policy makers need to study why that model failed and why the Ginnie Mae model—which avoided the Too Big to Fail problem by strategically spreading risk among many institutions—succeeded. Those answers can guide them in their next round of debates over the future of housing finance.

NationalMortgageProfessional.com

l The GSEs buy loans from originators. Ginnie Mae does not. l The GSEs own loan servicing. Ginnie Mae does not. l The GSEs securitize MBS. Ginnie Mae does not. l The GSEs hold the excess credit risk of borrowers. Ginnie Mae does not. l The GSEs concentrated credit tail risk in just two institutions—Fannie Mae and Freddie Mac. In contrast, Ginnie Mae spreads credit tail risk among its more than 400 Issuers, none of which are too big to fail.

outstanding

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PRMG

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NATIONAL MORTGAGE PROFESSIONAL MAGAZINE 1220 Wantagh Avenue • Wantagh, New York 11793-2202 516-409-5555 • Fax: 516-409-4600 • E-mail: advertise@NMPMediaCorp.com

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p r o f e s s i o n a l ’ s

MARCH 2015 n National Mortgage Professional Magazine n

p r o f e s s i o n a l ’ s

NationalMortgageProfessional.com

calendar of events 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

APRIL 2015

MAY 2015

Thursday, April 2

Tuesday, May 12

Friday, June 5

Saturday-Monday, October 17-19

Texas Mortgage Roundup 2015 Hyatt Regency San Antonio 123 Losoya Street San Antonio, Texas For more information, call (860) 922-3441, e-mail info@agilityresourcesgroup.com or visit www.txmortgageroundup.com.

2015 Great Northwest Mortgage Expo Crowne Plaza Downtown Portland 1441 NE 2nd Avenue Portland, Ore. For more information, call (503) 567-9326, e-mail info@oamponline.com or visit www.greatnorthwestexpo.com.

2015 Southwest Mortgage Fest Embassy Suites Hotel & Spa 1000 Woodward Place Northeast Albuquerque, N.M. For more information, call (860) 719-1991, e-mail info@agilityresourcesgroup.com or visit www.swmortgagefest.com.

2015 NAMB National Conference Luxor Resort and Hotel 3900 South Las Vegas Boulevard Las Vegas For more information, call (860) 719-1991, e-mail info@agilityresourcesgroup.com or visit www.nambnational.com.

Thursday, April 9

Thursday-Sunday, May 14-17

Monday-Wednesday, June 22-24

2015 Maryland Association of Mortgage Professionals Annual Conference Turf Valley Resort 2700 Turf Valley Road Ellicott City, Md. For more information, call (410) 752-6262, e-mail mamp@assnhqtrs.com or visit www.mdmtgpros.com.

National Association of Professional Mortgage Women’s 51st Annual Education Conference & Business Meeting Hilton Dulles Airport 13869 Park Center Road Washington, D.C. For more information, call (800) 827-3034, e-mail napmw1@napmw.org or visit www.napmw.org.

Ultimate Mortgage Expo 2015 The Hotel Monteleone 214 Royal Street New Orleans, La. For more information, call (860) 719-1991, e-mail info@agilityresourcesgroup.com or visit www.ultimatemortgageexpo.com.

Sunday-Wednesday, October 18-21

Saturday-Tuesday, April 11-14

Monday-Wednesday, May 18-20 American Land Title Association 2015 Federal Conference and Lobby Day Mandarin Oriental Hotel 1330 Maryland Avenue SW Washington, D.C. For more information, call (202) 296-3671, visit www.alta.org or e-mail service@alta.org.

AUGUST 2015 Louisiana Mortgage Lenders Association (LMLA) 2015 Education Conference The Hilton New Orleans Riverside Hotel 2 Poydras Street New Orleans, La. For more information, call (225) 590-5722 or visit www.lmla.com.

National Notary Association’s 37th Annual Conference Hilton Orlando Bonnet Creek 14100 Bonnet Creek Resort Lane Orlando, Fla. For more information, call (844) 466-2266, visit www.nationalnotary.org/conference or e-mail conference@nationalnotary.org.

Wednesday-Friday, October 7-10 American Land Title Association 2015 Annual Convention Westin Copley Place Boston 10 Huntington Avenue Boston, Mass. For more information, call (202) 296-3671, visit www.alta.org or e-mail service@alta.org.

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

n National Mortgage Professional Magazine n MARCH 2015

Sunday-Wednesday, May 31-June 3

Thursday-Friday, August 20-21

OCTOBER 2015

Wednesday, April 29 2015 Midwest Mortgage Matchmaker Conference Ameristar Casino Resort & Spa 1 Ameristar Boulevard Saint Charles, Mo. For more information, call (314) 690-1504, e-mail information@mamp.biz or visit www.mortgage-matchmaker.com.

Mortgage Bankers Association Annual Convention and Expo 2015 San Diego Convention Center 111 West Harbor Drive San Diego, Calif. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.

NationalMortgageProfessional.com

NAMB—The Association of Mortgage Professionals 2015 Legislative & Regulatory Conference Hyatt Place Hotel 33 New York Avenue NE Washington, D.C. For more information, call (972) 758-1151 or visit www.namb.org.

JUNE 2015

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

AllRegs—Your Source for Fast, Reliable Answers 2600 Eagan Woods Drive, Suite 220 Eagan, MN 55121 (800) 848-4904 www.allregs.com AllRegs offers mortgage professionals fast, reliable answers needed to conduct their day-to-day business. From research and reference to business intelligence, from education and training to professional services, we are your definitive source for mortgage industry information. With tools for originators like NMLSapproved CE training, regulatory content libraries for compliance staff, guidelines for underwriters, policy manuals for operations, and business intelligence for business development – we have you covered as the leading information provider for the mortgage industry. If you have a specific need, our professional services team can help with thing like policy, procedure or guideline development, as well as custom training or publishing resources. Contact us to learn how we can help you – visit www.allregs.com today.

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WHOLESALE LENDERS

Maaverick Funding Corp. is a direct mortgage lender licensed in 30 states across the country. Haavving obttained FHA, VA A, USDA and Fannie Mae appro ovals, Maaverick is growing and seeking top talent for their expanding nationwide footprint.

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

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n National Mortgage Professional Magazine n MARCH 2015

WHOLESALE/CORRESPONDENT LENDERS

NationalMortgageProfessional.com

DEALS? PRIVATE FINANCING

HomeBridge Wholesale is a national wholesale lender offering Conventional, Government, Jumbo, and Renovation Loans. We are committed to providing the highest value to our clients through competitive pricing, unique product offerings, superior customer service, and state-of-the-art technology.

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MARCH 2015 n National Mortgage Professional Magazine n NationalMortgageProfessional.com