National Mortgage Professional Magazine November 2016 by ambizmedia

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table of

N A T I O N A L

When Does the “Foreclosure Clock” Start Ticking? By Jonathan Foxx

N O V E M B E R

34 Appraise-Snail By Phil Hall

2 0 1 6

M O R T G

V O L

A SPECIAL FOCUS ON “COMPLIANCE TODAY”

Protecting the Mortgage Franchise in the New Enforcement World By Bill Dallas ....................................................66

T A

#TrendingForTheRightReasons By Ashley Hutto-Schultz ................68

T W

Compliance Really Does Matter By Greg Stephens, SRA, MNAA, CDEI ..............................................70 Adapting to TRID By Jean Badciong ................................................74

L B

The Essential Ally By Kathryn Johnson ............................................76

Improving Loan Quality and Reducing Risk Through Automation By Jay Coomes..............................................................78

New Technology Brings Relief … Embrace It By Brent Chandler ..80

54 NMP Mortgage Professional of the Month, Brian Vieaux, National Sales Director, Flagstar Bank By Phil Hall

How HMDA Data Can be Used as an Effective Tool to Guide a Diverse Sales Strategy By L. Maria Zywiciel ........82

Y C

Laws to Live By By Eric Weinstein....................................................84

FEATURES

ARMCP Begins Rounding Out Steering Committee ........................6

The $100 Billion Opportunity to Beat the “Refi-Cliff” By Tom Hutchens ................................................................................8 The Elite Performer: Thank You By Andy W. Harris, CRMS ..............8

T G

Recruiting, Training and Mentoring Corner: Early Compliance Linked to Quality Referrals By Dave Hershman ..............................10

R a

The Commercial Corner: Know Your Commercial Options By Michael Boggiano ........................................................................16

O a

Leaning Into Organic Growth By Steve Rennie ..............................18

90 Taking the Fear Out of Phone Marketing By Bubba Mills

V I S I T Company

Web Site

O U R

A D Page

Agility Resources Group ...................................... www.agilityresourcesgroup.com ......................................79 Angel Oak Mortgage Solutions ............................ www.angeloakms.com ..............................67 & Back Cover Brokers Compliance Group.................................. www.brokerscompliancegroup.com ................................104 Caliber Home Loans.............................................. www.caliberhomeloans.com ............................................17 CallFurst.com ...................................................... www.callfurst.com ............................................................77 Carrington Mortgage Services, LLC ...................... www.carringtonwholesale.com ..............................15 & 70 Citadel Servicing Corporation .............................. www.citadelservicing.com ..............................................59 Document Systems, Inc./DocMagic ...................... www.docmagic.com ........................................................7

92 The Debut of Trended Credit Data: Opening Access to New Credit Via Borrower Data By Phil Hall

First Guaranty Mortgage Corp. ............................ www.fgmccorrespondent.com ..........Inside Front Cover & 74 Flagstar Bank .................................................... www.flagstar.com/ae ....................................................19 Freddie Mac ...................................................... www.freddiemac.com/loanadvisorsuite ....................5 & 73 Freedom Mortgage Corporation .......................... www.freedomwholesale.com ..........................................51 Geneva Financial, LLC ........................................ www.genevafl.com ........................................................37 HomeBridge Wholesale ...................................... www.homebridgewholesale.com ....................................65

Integrity Mortgage Group.................................... www.integritymtgs.com ..................................................13

Lykken On Lending ............................................ www.lykkenonlending.com ............................................78 MBS Highway .................................................... www.mbshighway.com/MNN ..........................................61

of contents

R T G A G E

O L U M E

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

N U M B E R

1 1

NAMB Perspective: November 2016................................................20

Tales From the Closing Table By Andrew Liput ..............................28 The Value of a Comprehensive, Completely Workflow-Driven Appraisal Process By Vladimir Bien-Aime ........................................36

The Mortgage Godfather: Travel and Entertainment … With or Without Martinis By Ralph LoVuolo Sr. ..............................38 Lykken on Leadership: Six Characteristics of a Great Business Process By David Lykken..................................................46 Industry Updates: November 2016 By Gavin T. Ales ......................48 Powerful New Strategies for Today’s Top Lenders........................50 Compliance Matters: Types of Lead Generation By Jonathan Foxx ..............................................................................56 Your Compliance Policies Are Only as Good as Your Commitment to Manage Them By Andrew Liput ............................58 OrigiNation: Loan Approval … Entitlement vs. Engagement By Andy W. Harris, CRMS..................................................................60 Rise of the Machines By Brent Emler ..............................................62 The Long & Short: The Business of Short Sales By Pam Marron ..64 How to Rebuild Consumer and Investor Trust in Mortgages By Wes Miller ....................................................................................86 The One Tool We All Have But Seldom Use Correctly to Grow Our Business By Brian Sacks ................................................88 Rodrigo Lopez Becomes First Latino Elected to Serve as MBA Chairman ............................................................................94 MBA's Mortgage Action Alliance ....................................................96 Operation VA-SITREP: VA Updates, MBA Conference and Appraisals! By Richard M. Bettencourt Jr., CRMS, CMHS ........98

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

Web Site

Page

Moneyhouse U.S. .............................................. www.mhodportal.com ....................................................75 Mortgage News Network (MNN) .......................... www.mortgagenewsnetwork.com ............................40 & 41 NAMB+ ............................................................ www.nambplus.com ......................................................25 NAPMW ............................................................ www.napmw.org ....................................................68 & 99 NAWRB ............................................................ www.nawrb.com ............................................................71 New York Community Bancorp. Inc. .................... www.nycbmortgage.com ................................................49 NMP U .............................................................. www.nmpucoaching.com ..................................33, 43 & 85 NRMLA.............................................................. www.nrmlaonline.org ....................................................76 Paramount Residential Mortgage Group, Inc. ...... www.prmg.net ..........................11, 47 & Inside Back Cover Primary Residential Mortgage Inc. ...................... www.primaryresidentialmortgage.com ..............................1 REMN Wholesale ................................................ www.remnwholesale.com ................................................9 Ridgewood Savings Bank .................................... www.ridgewoodbank.com ..............................................69 Secure Insight.................................................... www.secureinsight.com ..................................................39 TagQuest .......................................................... www.tagquest.com ........................................................83 The Bond Exchange............................................ www.thebondexchange.com ..........................................66 United Wholesale Mortgage ................................ www.uwm.com ..............................................................27

NOVEMBER 2016 Volume 8 • Number 11

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

Joel M. Berman Publisher - CEO (516) 409-5555, ext. 310 joel@nmpmediacorp.com

Joey Arendt Art Director (516) 409-5555, ext. 307 joeya@nmpmediacorp.com

Beverly Bolnick VP-Sales & Marketing (516) 409-5555, ext. 316 beverlyb@nmpmediacorp.com

Scott Koondel VP of Operations (516) 409-5555, ext. 324 scottk@nmpmediacorp.com

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

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

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

Rick Grant Special Reports Editor (570) 497-1026 (direct) (516) 409-555, ext. 311 rickg@nmpmediacorp.com

Dylan Pollock Administrative Assistant (516) 409-5555, ext. 314 dylanp@nmpmediacorp.com

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

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

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

FROM THE

publisher’s desk

Tis the season … As we enter the holiday season, I would like to begin my Publisher’s Letter this month by reminding you of three phenomenal networking opportunities taking place in December to close out the year. This year, we are bringing back our FREE Holiday Networking Parties, set for Irvine, Calif.; Sunrise, Fla.; and Uniondale, N.Y. as a means to assemble the industry’s top mortgage professionals under one roof for a day of networking, education and celebration of the holiday season with music, food, prizes and a heavy dose of holiday cheer! Each party will feature a Toys for Tots collection for the U.S. Marines’ Toys for Tots program, so bring your unwrapped toys for collection. Our first stop on the Holiday Networking Party tour will take place Tuesday, Dec. 6 at the Atrium Hotel, 18700 MacArthur Boulevard in Irvine, Calif. Things get underway at 12:30 p.m. with the educational session, “Success Secrets to a 100 Percent Referral-Based Purchase Business,” presented by Ron Vaimberg and sponsored by Quicken Loans. The afternoon continues with Frank Garay of National Real Estate Post delivering his session “Surprise! You May Not Be as Good as You Thought You Were,” sponsored by Angel Oak Mortgage Solutions. Frank’s presentation is followed by the “Certified Military Home Specialist Workshop,” presented by Beverly Frase of Boots Across America and sponsored by REMN Wholesale, which will qualify you to take the exam to earn the Certified Military Home Specialist (CMHS) designation. The evening wraps up with the Holiday Networking Party where attendees can visit the industry’s top lenders and vendors to learn about the latest programs and trends designed to increase your bottom line. Our second stop takes us to Sunrise, Fla. on Thursday, Dec. 8 at the DoubleTree by Hilton Sunrise-Sawgrass Mills, located at 13400 West Sunrise Boulevard. Ron Vaimberg returns to deliver his “Success Secrets to a 100 Percent Referral-Based Purchase Business” session, followed by Brian Stevens of National Real Estate Post presenting the Angel Oak-sponsored “Understanding and Adapting to a Changing Market.” Beverly Frase ends the education portion of the day again with her “Certified Military Home Specialist Workshop” before the day concludes with the Holiday Networking Party. The third and final Holiday Networking Party comes a week later on Thursday, Dec. 15 to the Long Island Marriott, 101 James Doolittle Boulevard in Uniondale, N.Y. Barry Habib, CEO of MBS Highway, begins the day at 12:30 p.m. with his presentation, “Knock Out Your Competition.” Barry will be followed by Mr. Vaimberg and his “Success Secrets to a 100 Percent Referral-Based Purchase Business” session, and the day of education ends with a “Renovation Lending Workshop,” presented by Damon Richardson, renovation lending specialist at REMN. Our Holiday Networking Party will close out the night and cap off a successful 2016 as we plan to enter the New Year. For more details on all of our Holiday Networking Parties nationwide, please visit NMPHoliday.com, contact Beverly Bolnick at (516) 409-5555, ext. 316 or e-mail BeverlyB@NMPMediaCorp.com. I look forward to seeing you there!

A special focus on compliance If you ask any reader of National Mortgage Professional Magazine what keeps them up at night, at least half will tell you it’s compliance. The others are likely our frontline mortgage loan officers and the best of them will stay firmly focused on their core task of sales. For most of us, though, the idea of falling out of compliance is a nightmare. That’s why we’ve dedicated an entire issue to the topic in the hopes of giving you the information you need to sleep better at night. What a lineup of experts we have for you in this issue! We’ve worked to make this edition one you’ll keep on hand for a long time. Here’s a glimpse of what you’ll find inside this month’s NMP. First and foremost, no issue on mortgage industry compliance would be complete without long time NMP contributing expert Jonathan Foxx, president and managing director of Lenders Compliance Group. This month, Jonathan offers a feature article entitled, “When Does the ‘Foreclosure Clock’ Start Ticking.” In addition, this month we bring you Jonathan’s first “Compliance Matters” column. Those of you familiar with his video series on our sister Mortgage News Network will certainly appreciate this new monthly advice column. In addition, Ashley Hutto-Schultz, director of compliance for Castle & Cooke Mortgage, goes into the requirements for designing a social media compliance policy that will keep your firm on the cutting edge of modern marketing technology without falling out of compliance. Brent Chandler, founder and CEO of FormFree Holdings Corporation, writes about the relief buyers of the right technology can get from compliance headaches in his article “New Technology Brings Relief … Embrace It.” Can automation reduce the risks associated with poor loan quality? Jay Coomes, vice president of product management for financial and risk management Solutions at Fiserv Inc. says it can, and he explains exactly why in his story in this issue. You’ll also find stories on TRID compliance, HMDA compliance, finding a compliance professional and strategies to keep your company safe. But this issue isn’t just about compliance. You’ll also find a number of special features in our November NMP. Our own Phil Hall offers up two features in this issue. In the first, he takes a closer look at the pressing issue of appraisal turn times. Lenders operating in some states are losing deals and missing deadlines because they cannot get their appraisal report back on time. Phil helps us understand why. Phil also looks into the new trended credit data that is finally finding its way into the underwriting process for certain mortgage loan products. Not every consumer has traditional credit and lenders are learning new ways to assess the real risk in these deals. And you’ll find all of the monthly columns you’ve come to rely on from NMP. This month’s Mortgage Professional of the Month is Brian Vieaux, national sales director of Wholesale Lending for Flagstar Bank, and we bring you details of our recent visit with him. Trade association news and stories that broke over the past 30 days are also inside. We’ve worked hard to bring you a lot of value in this issue. We hope you enjoy it, learn from it and that it leads to your increased success. And when it comes to compliance, remember what I always say … it’s not the cost of compliance that should be feared, it’s the cost of not being compliant that should bring fear to you! Sincerely, Joel M. Berman, Publisher-CEO • NMP Media Corp. • Joel@NMPMediaCorp.com National Mortgage Professional Magazine is published monthly by NMP Media Corp. • Copyright © 2016 NMP Media Corp.

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A Brighter Idea in Loan Production

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

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

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

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

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

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

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

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

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

D I R E C T O R S

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

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

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

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

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

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

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

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

National Association of Professional Mortgage Women 345 North Main Street, Suite 313 l West Hartford, CT 06117 l Phone: (800) 827-3034 l E-mail: napmw1napmw.org l Web site: napmw.org

2016-2017 NAPMW NATIONAL BOARD OF DIRECTORS

NOVEMBER 2016 n National Mortgage Professional Magazine n

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

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

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

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

Glenda Mooney Secretary (281) 556-9182 NatSecretary@NAPMW.org

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

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

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

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

2015-2016 BOARD OF DIRECTORS

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

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

Mike Brown Ex-Officio (908) 813-8555, ext. 3020 MBrown@CISinfo.net

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

Matthew Carpenter Director MCarpenter@Sarma.com

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

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

Dean Wangsgard Director (801) 487-8781 Dean@nacmint.com

Delia Zuniga Director Delia@AdvantagePlusCredit.com

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

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

Scott Ledbetter Director (214) 783-3315

ARMCP Begins Rounding Out Steering Committee he Association of Residential Mortgage Compliance Professionals (ARMCP), a not-for-profit, professional organization devoted to residential mortgage compliance professionals, has added another member to its seven-member Steering Committee. ARMCP is in need of two additional residential mortgage compliance and/or regulatory compliance professionals to join President and Founder Jonathan Foxx on the Steering Committee. “This is a leadership position,” said Foxx. “We ask that you be a member who is actually involved in residential mortgage compliance or provide regulatory compliance guidance to such persons.” The purpose of ARMCP’s Steering Committee is to: Draft and review the association’s by-laws; determine a nominating process for officers; discuss the association’s first conference; decide on subcommittees and the process for appointing committee chairs; set forth a Mission Statement; and other business relating to the association’s mission. Interested parties may contact ARMCP at Info@ARMCP.org.

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n National Mortgage Professional Magazine n NOVEMBER 2016

www.DocMagic.com

1.800.649.1362

The $100 Billion Opportunity to Beat the “Refi-Cliff”

Non-QM originations fill refinance gap By Tom Hutchens

e all know the inevitable: Interest rates will rise eventually.

When they do, mortgage lenders need to be prepared for the “refinance cliff.” As rates rise, refinance volumes will shrink as mortgage rates reverse their 34-year long downward trend; the mortgage origination industry will see refinancing slow to a crawl because the math will no longer make sense for borrowers. Lenders that have relied on refinances for growth will be forced to find new ways to produce volume. We may not know exactly when rates will rise, but the question remains: Is your business model ready for the inevitable refinance cliff?

NOVEMBER 2016 n National Mortgage Professional Magazine n

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How can originators add volume? One area of growth is the non-qualified mortgage market, which is estimated to grow to over $100 billion in annual originations in the near future. In the past, regulators tied the hands of lenders by limiting the types of issuable loans to those eligible for sale to the government-sponsored enterprises. But today, the nonqualified, non-agency market has reemerged as an alternative and prudent lenders are once again offering these products. There is plenty of room left in this market for future entrants to issue non-agency mortgages. Instead of competing with the majority of the other lenders solely offering Fannie Mae, Freddie Mac, FHA and VA loans, lenders can diversify their product offerings with non-agency loans. Originators only offering agency products also run the risk of their referral partners looking for a provider with a more diverse product offering. Here are some examples of the types of borrowers that can be tapped with non-qualified products: l l

l l l

Borrowers who have experienced a recent credit event, such as a foreclosure or short sale Self-employed borrowers whose tax returns may not necessarily reflect their true income due to business writeoffs Borrowers who don’t have W-2 income, and instead, rely on income from investment properties Foreign nationals who don’t have credit in the U.S. system Borrowers who have significant savings but limited income

Lenders need to start taking advantage of these products if they want to survive in a low-refi world. By offering non-agency products, lenders can break into an untapped market, increase their reach and help millions of underserved American homebuyers find a mortgage that fits their needs.

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

SPONSORED EDITORIAL

the

elite performer Thank You BY ANDY W. HARRIS, CRMS

s we approach Thanksgiving again this year, we’re reminded by how powerful the words “Thank You” can be together. Reminding those around you that you are thankful for them and what they do can be very uplifting to both the thanker and thankee. Whether it’s in person, on the phone, written in a card or e-mail, or in a combination, thanking someone brings a positive emotional state and triggers additional helpful behaviors. Only good comes by being reminded and reminding others that you or they are valued. Researchers Adam M. Grant and Francesco Gino studied the impact of a sincere “Thank You” in the workplace. Their findings show a 50 percent increase in the amount of additional help being offered as a result of the appreciation. Think about that … you can double an employee or assistant’s willingness to help simply by showing them and telling them you are thankful for their work. Obviously it must be sincere and come at the right time, but it’s important that we all remember to show our thanks to those around us who support our personal and professional lives. Here are a few more interesting facts around this study and surveys:

l About half of us will say thank you on a basis to someone we’re immediately related to, but only 15 percent of us say thank you at work. This makes the workplace one of the least thankful part of our lives. l Thirty-five percent of those surveyed said their managers never said thank you. l Even a tiny amount of gratitude can have a huge impact on production. l Simply being thanked for completed work led participants to be twice as likely to volunteer for more. So, do you need a free, fast and easy way to duplicate your efforts and the efforts of those around you? This Thanksgiving, be grateful and give thanks, but also be open to receiving thanks from others. You might just be surprised how far a little “Thank You” can go.

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

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Recruiting, Training and Mentoring Corner

Early Compliance Linked to Quality Referrals BY DAVE HERSHMAN

o many in this industry, compliance is a back-end function. We audit files before closing packages go out. We audit files for compliance after they close. Even with TRID, many are checking before disclosures are let go because of the additional requirements of TRID. Our loan officers consider this a pain, something that just holds up the loan process for them. And our managers constantly fight our LOs to provide a higher quality product upfront so that there is less of a chance of a compliance nightmare on the back end. But for many, this is a losing battle. Why? Because LOs do not see the connection between a more complete and accurate loan application and producing more business. It is a very important function of management to make that very, very important connection for their loan officers because true quality begins upfront within the application process and beforehand in the preparation stages. The increase of quality standards upfront will actually increase our volume and lower our stress levels as we are able to improve our levels of customer service. It is only after a producer recognizes the significant relationship between elevating their quality levels and increasing volume, that their behavior will be driven to improve the quality of the application process. To do this, we must prove this

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“A successful marketing program will require positioning throughout the process. This positioning starts with meeting with clients in the right place …”

relationship beyond a shadow of a doubt. We must demonstrate why the application process is important, how to secure an application from the right customer, how to deliver great customer service through the application process, and finally how to leverage all of this through an increased focus upon marketing throughout this same application process.

application, great customer service and repeat business.

Why the application process is important The relationship between a great application package and overall success is quite elementary. As salespeople, our producers all start with an equal dose of a most precious resource—time. In the essence of time, we are all on an even playing field. The key to success is using our time with such efficiency that our actions are always enabling us to move closer to achieving our goals and objectives. One of the most inefficient ways to utilize our time is to work with a pipeline which is a disaster. The only way that it will be possible to leverage this business is to elevate our level of service. The key to repeat business is exceeding expectations. The key to exceeding expectations is to deliver great customer service. These relationships are essential and cannot be broken. It is essential that our producers recognize these relationships, and as managers, it is essential that we provide the training necessary to recognize and implement a successful connection between the

Bringing in the business As much as we would like to think that great customer service will bring people flocking to our doors, no one will be knocking if we do not possess the sales and marketing skills to produce referrals and/or to convert leads. We start with a goal which defines the type of applicants and referral sources we would like to service. Our objective is to market to attract the type of targets who will help us achieve our definition of success. For example, there are certain real estate agents who might refer business which is a nightmare to service. On the other hand, a certain CPA might provide higher quality referrals. And of course, repeat business and referrals from previous customers are typically easier to convert, and result in a higher quality pipeline as well. Getting to the customers of real estate agents before they write a contract is a great strategy to set us up to provide superior service. This early contact not only provides us with more time to put transactions together in the right way, we also

have the time necessary to develop relationships and trust which will enable us to better control the process, including obtaining the documentation we need and making sure that clients don’t take actions during the process which could jeopardize their qualifications. In short, a marketing strategy which is geared toward selling a service such as preapprovals, would increase the changes that we achieve our goal of providing higher levels of customer service. Producing a great loan application package A great loan application is not rocket science. It entails doing things right from the beginning of the process. The way in which we prepare the applicant is integral to the overall success of the process. Nothing facilitates the process more significantly than a prepared applicant. When taking a face-to-face application or reviewing an online application, we must become a backward investigator. This means that we must uncover any information that might cause a question or a problem later in

the process. Obtaining information at the beginning of the process is relatively easy. The week before settlement, it can be a nightmare. All too often, we leave integral questions such as tracking down the precise source of funds or eligibility issues to a later point in the process. If there is a question, we must get this question answered in writing promptly so that there are no misunderstandings. How many times has a producer thought they had a positive response only to find the situation changed a few weeks down the road? A customer can withstand negative news within 24 hours of loan application. The week before settlement this form of communication is unconscionable. Delivering a great loan application package does not end the task of providing great customer service. It is here that proactive communication becomes essential—from setting up a system to ensure timely locks to fashioning a cover letter to partaking in regular status sessions.

who desire the ultimate in success, great customer service and marketing with a transaction will prove to be an unbeatable combination with regard to rising volumes and profitability. And the good news for compliance

officers, it provides quality upfront and results in fewer audit issues on the back-end. As long as we understand that the compliance process starts upfront before the loan application is ever received.

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

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Marketing throughout the process Now that we have secured the application and are positioned to deliver great customer service, we are in a position to market at every opportunity. If we look closely, there are many opportunities to market within the application process. We put ourselves in position to ask for referrals from the applicant right upfront by providing value such as the provision of information considered valuable to those within their sphere of influence. We must first provide the value and then we must ask for referrals. Asking for a referral will be a key activity throughout the process. We don’t ask and we won’t receive. It’s not rocket science. In many respects, marketing is positioning. A successful marketing program will require positioning throughout the process. This positioning starts with meeting with clients in the right place—for example in the real estate office—and continues with how we make contacts within the sphere of the transaction. These contacts include the listing agent, builder, settlement agent, insurance agent, accountant, financial planner and more. After settlement, the marketing process continues. We must

have value-added material such as newsletters that can regularly e-mail to customers and the web of contacts which we have just spun. Isn’t the provision of this valuable material more effective than delivering rate sheets and advertising for new contacts over and over? Yes, a great loan application package and process does mean more production. And putting together a plan for implementation of a system to deliver great customer service and marketing linked together is not rocket science. For those

newtomarket PRMG Partners With Mortgage News Network on New Centurion Roundtable Program

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Mortgage News Network has announced the launch of its newest program, The Centurion Roundtable Interviews, airing every Monday at 11:00 a.m. Eastern, presented by Paramount Residential Mortgage Group Inc. (PRMG). The Centurion Roundtable (CRT) is a group of elite top originators producing 100 loans or more a year or have other significant impact on the industry through volume, unique practices, mentorship or industry involvement. These originators provide excellent service to their borrowers by maximizing their efficiency through the utilization of technology, reliance on partnerships with vendors and excellent support staff to help them put more people in homes and ensure their borrowers are making great financial decisions. “We are very excited about this partnership with Mortgage News Network for The Centurion Roundtable and could not be happier to be part of a forum that imparts valuable information from successful top producers from around the country,” said Paul Lucido, national marketing director for PRMG. “We are eager to showcase some of our own top broker partners and originators who have continued to do business with PRMG, along with other top originators in the industry who have maximized their efforts. We truly hope that all viewers gain beneficial advice as to how to prosper in a highly competitive industry, while taking the time to learn how PRMG is

making an impact on the mortgage industry today.” Mortgage News Network offers a Daily Newsletter, bringing The Centurion Roundtable and more programming to your inbox on a daily basis. To sign up for The Centurion Roundtable and other Mortgage News Network programming, visit MortgageNewsNetwork.com. “Through this partnership with PRMG, members of The Centurion Roundtable are able to share their expertise with our ever-expanding audience,” said Joel M. Berman, CEO and executive producer of Mortgage News Network. “Our growing audience will truly benefit from our programming, and through our on-demand video medium, programs like The Centurion Roundtable serve as a valuable resource, available 24/7, 365 days a year.” UWM Goes Green With New Doc-less Mortgage Movement

United Wholesale Mortgage (UWM) continues to revolutionize lending with its “go doc-less” movement, introducing an automated suite of tools that bypass submitting hard copies of documentation needed for loan approval. Following an automated income verification tool that was released less than one month ago, this latest platform includes automated asset verification and tax returns, further enhancing the doc-less loan experience provided by UWM.

A first-of-its kind initiative, UWM’s line of doc-less technology is a revolution, aimed at creating a greener, hassle-free process for brokers to make sure their borrowers no longer need to chase down pay stubs, tax returns or bank statements. All of that will be done behind the scenes and verified by UWM. It is a system that seamlessly and securely links to existing databases to automatically verify income, assets and tax returns. “We’re taking a big step forward by introducing an automated verification technology in order to make the lending process faster and easier for brokers and their borrowers,” said Mat Ishbia, president and chief executive officer of UWM. “Borrowers do their banking online, file tax forms online and have direct deposit so the mortgage process should be a doc-less process as well, and UWM is proud to lead the way.” The doc-less movement pairs with UWM’s already available esign technology to eliminate the need for borrowers to wet sign documents. This will significantly change the way that loan officers and processors do business–taking what previously took days will now take minutes. Currently, 11 percent of UWM’s closed loans are docless, and the goal is to have 75 percent of all UWM loans docless by the end of 2017. As part of its commitment to drive green initiatives in the mortgage business, UWM will be planting a tree on behalf of the borrower for each doc-less loan that it closes in 2017.

New Owner-Occupied Bank Statement Program Introduced by Silver Hill Silver Hill Funding, a direct, smallbalance commercial mortgage lender and a division of Bayview Loan Servicing, has introduced their new OwnerOccupied Bank Statement Program for small-balance commercial loans from $250,000 to $1 million. With no tax returns or 4506-T required, this program is a smart alternative for creditworthy business owners who may have difficulty showing the quality of their earnings or insufficient credit history. According to Silver Hill managing director Leslie Smith, the primary focus of this program is to analyze deposits by reviewing 12 consecutive months of bank statements for the borrower’s business operations to determine gross revenue. “Restrictive underwriting requirements prevent many successful business owners from securing the commercial funding they need,” said Smith. “Thanks to this program, these borrowers can purchase or refinance their properties without worrying about tax returns or profit and loss statements.” Financing is available for business owners with at least two years of experience/ownership. Loans can be amortized up to 30 years, and a four-year seasoning is required for bankruptcies and foreclosures. Eligible property types include mixed-use, retail, office, warehouse, self-storage and light industrial properties. “I’m very excited to offer this new program to loan originators and their clients,” said Silver Hill National Sales Manager Michael Boggiano. “We recognize the need

big data, native mobile solution, the Lender Price PPE platform allows wholesale and correspondent lenders, banks, and credit unions to manage products and pricing for all mortgage types, including conforming, nonconforming, non-QM, and specialty loans, while providing Global DMS Integrates With powerful performance features CoreLogicâ&#x20AC;&#x2122;s LoanSafe including: Real-time, competitive Appraisal Manager analytics and reporting; customizable loan programs and eligibility; automated compliance checks; customized workflows; user and product level tracking; Global DMS has announced that it has integrated its eTrac platform with margin management, lock desk; the LoanSafe Appraisal Manager from CoreLogic to provide lenders, investors and AMCs with a detailed analysis that ensures appraisal quality and accurately assesses the potential risk for a repurchase. â&#x20AC;&#x153;The new integration with LoanSafe Appraisal Manager complements our eTrac platform by providing clients with the ability to take advantage of comprehensive appraisal risk analysis,â&#x20AC;? said Vladimir Bien-Aime, president and CEO of Global DMS. â&#x20AC;&#x153;Utilizing this scoring technology can make the difference between accepting appraisals of high quality and those that may have increased valuation and quality issues.â&#x20AC;? After LoanSafe Appraisal Manager scores the appraisal, users are provided with a report that gives reviewers and underwriters a detailed analysis of appraisal quality, valuation uncertainty, market volatility and more. This streamlines the appraisal review process and speeds up the underwriting turn times, saving time and money while enhancing accuracy and mitigating risk. UP TO LoanSafe Appraisal Manager leverages nationwide, up-to-date, market-specific CoreLogic data Branch Startup covering 99 percent of U.S. Funding residential properties. IF SIGNED UP BY Global DMSâ&#x20AC;&#x2122; valuation 12-31-16 management eTrac platform enables organizations to cost effectively, efficiently and compliantly manage the entire appraisal management process from vendor management to appraisal ordering, assignment, tracking, reviews, delivery and reporting. The system accompanies a powerful workflow engine that uses customizable business rules to automate workflows. business owners have for an alternative way to illustrate the success of their business. The Silver Hill Owner-Occupied Bank Statement Program is a solution that will make sense for many of these borrowers.â&#x20AC;?

and secondary marketing management. â&#x20AC;&#x153;Traditionally, mortgage lenders have navigated pricing decisions with blinders on due to delays and lack of transparency,â&#x20AC;? said Lender Price co-founder and CEO Dawar Alimi. â&#x20AC;&#x153;Lender Price was designed to optimize lendersâ&#x20AC;&#x2122; ability to analyze pricing in real time by removing blind spots across all loan programs and competitors, allowing lenders to optimize their strengths and improve market share.â&#x20AC;? Lender Price enables investors to manage origination partners in

real time both to identify opportunities and close the gap on technology and customer service. Its advanced analytics report on product search scenarios, including which products are being locked and which are being overlooked, allowing both loan originators and decision-makers to learn, adapt, and be profitable in the fluid mortgage marketplace. â&#x20AC;&#x153;Technology that had just begun to shape the mortgage industry when the Great continued on page 18

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Angel Oak MortgageSponsored 40 Under 40 Program Comes to Mortgage News Network

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Mortgage News Network has announced its partnership with Angel Oak Mortgage Solutions in bringing profiles of the top 40 mortgage professionals under the age of 40 to MortgageNewsNetwork.com. New episodes of the 40 Under 40 program air on MortgageNewsNetwork.com every Thursday at 11:00 a.m. Eastern. The 40 Under 40, a list of the top 40 mortgage professionals under the age of 40, is assembled and compiled by National Mortgage Professional Magazine annually, as nominees are voted on by their peers. Each member of the 40 Under 40 list exemplify professionalism and top production in today’s housing market, having persevered in the industry at a time of regulatory uncertainty. “Angel Oak is proud to partner with the Mortgage News Network and to sponsor the 40 Under 40 series,” said Tom Hutchens, senior vice president of sales and marketing for Angel Oak Mortgage Solutions. “These industry pioneers are the future of our business. Angel Oak is a pioneer in the alternative lending space, and the relationship makes sense. We look forward to seeing the continued growth of these individuals in our ever-changing industry.” Mortgage News Network offers

a Daily Newsletter, bringing the 40 Under 40 profile series and more programming to your inbox on a daily basis. To sign up for the 40 Under 40 series and other Mortgage News Network programming, visit MortgageNewsNetwork.com. “Through this partnership with Angel Oak Mortgage Solutions, the members of our elite 40 Under 40 group are able to share their expertise and knowledge with our audience. The insight and perspective provided by these pioneers under the age of 40 will chart the course for the future of the mortgage profession,” said Joel M. Berman, CEO and executive producer of Mortgage News Network. “Our growing audience will truly benefit from our programming, and through our ondemand video medium, programs like the 40 Under 40 profile series serves as a valuable resource, available 24/7, 365 days a year.” NAMB Prepares for 2017 Following Election Day

NAMB—The Association of Mortgage Professionals would like to congratulate all of the newly elected officials, as the association looks forward to working with them in the coming year to improve the housing finance industry. “With the elections over, it is now time to look to 2017 to find

ways to help housing which will be needed,” said NAMB President Fred Kreger, CMC. “NAMB will focus its efforts on removing impediments in the mortgage broker channel. With an anticipated increase in interest rates on the horizon, which will have a negative impact on housing, increasing participation in the mortgage broker channel will help consumers and small business mortgage brokers.” The high cost of regulatory compliance and lack of safe harbors or agency guidance harms consumers because lenders are forced to increase requirements in order to protect against regulatory liability. “These lending fears have led to a doubling of the cost of closing a mortgage that has hit an all-time high of more than $7,000 and upward,” said Kreger. “This is unsustainable and regulatory relief is in order to remedy this situation.” Another recent change that increases consumer costs is the recent required increase in how small business mortgage brokers must pay their loan originators. “The recent change by the U.S. Department of Labor should be rolled back,” said Kreger. “This change was for something that was not broken, and now will negatively impact small and large businesses across the U.S. This change only increases the cost of doing business, and this cost is unfortunately passed along to consumers. NAMB will be seeking

regulatory and legislative changes to this end.” In addition to the impact on the American consumer, these regulatory changes over the past few years have created unintended consequences impacting small business mortgage brokers. “The three percent cap in the qualified mortgage (QM) rule harms smaller loan amounts, and consumers seeking such loans, since all the normal costs and fees cannot fit under the cap,” said Kreger. “Mortgage broker small businesses facing a cost cap, but their cost of doing business keeps increasing: Healthcare costs, rent, regulatory compliance costs, and, as discussed above, a federallymandated increase in personnel costs. This results in mortgage companies not being able to participate in offering loans to consumers.” While NAMB does not see GSE reform as a high priority this session of Congress, the consensus seems to point to 2018 as an opportune time to tackle reform of Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs). “There are issues and concerns with loan-level price adjustments that will continue to be watched, and as NAMB has said in the past, should be revisited by the GSEs,” said Kreger. “NAMB is very pleased with the risk reduction measures recently implemented by Fannie Mae and soon to be implemented by Freddie Mac.” As the presidential transition begins to take shape and the Trump Administration replaces the Obama Administration in January, NAMB will continue to lead the

way for mortgage professionals nationwide, fostering their current relationships on Capitol Hill and establishing new ones with the newly-elected constituents of NAMB’s membership nationwide. “In addition to working with the new Presidential Cabinet and other agencies, NAMB is looking forward to working with the CFPB on their five-year regulatory review of regulations on loan officer compensation and other regulations in need of review because of the harm to consumers or business operations,” said Kreger. “NAMB will continue to work tirelessly on behalf of mortgage professionals in 2017, and looks forward to the continued membership and support of its dedicated members.”

Carrington Charitable Foundation’s Golf Outing Raises $2.2 Million-Plus for Wounded Vets More than 250 golfers gathered recently at The Resort at Pelican Hill in Newport Coast, Calif., for the Carrington Charitable Foundation’s 6th Annual Golf Classic, which raised more than $2.2 million for wounded American veterans. Every year since 2011, proceeds from Carrington’s Golf Classic directly benefit Carrington House and the

Veterans Airlift Command, improving the lives of wounded heroes who have returned from service and who need support. The annual event raises money to provide diverse ongoing assistance to veterans and their families. After sunset on the course, more than 400 supporters attended an evening banquet and auction, during which veterans and supporters spoke passionately about the importance of the Carrington Charitable Foundation’s ongoing mission, recognizing there is often a considerable cost for the peace and freedom enjoyed by Americans.

“It is a tremendous honor for us to organize this event to give back to our veterans and their families, and we are grateful that so many others have joined us in this worthy cause,” said Rosemary Rose, Carrington Charitable Foundation chairman. “The proceeds will continue to assist veterans with their mobility, stability, purpose and prosperity.” Carrington Charitable Foundation is the non-profit organization of The Carrington Companies, and it honors veterans through its signature continued on page 16

MBA: Commercial and Multifamily Mortgage Activity Will Expand in 2017

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

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Next year will be a banner time for commercial and multifamily mortgages, according to a new forecast from the Mortgage Bankers Association (MBA). The trade group is projecting that originations of commercial and multifamily mortgages will grow to $537 billion in 2017, an increase of four percent from expected 2016 volumes of $515 billion. Mortgage banker originations of multifamily mortgages are being forecast at $224 billion next year, with total multifamily lending at $272 billion. Commercial/multifamily mortgage debt outstanding is expected to grow above $3 trillion by the end of 2017, almost four percent higher than at the end of 2016. “Commercial real estate markets are carrying a great deal of momentum as they close out 2016,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “Strong property fundamentals, increasing property values and sturdy sales activity–particularly among multifamily properties–are driving borrowing and lending to record levels. While next year could bring a variety of different market conditions, we anticipate a growing economy, coupled with only gradual increases in interest rates, will continue to support strong commercial property, and property finance, markets.”

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Alternative documentation programs create opportunities for borrowers

mall-business owners and investors share a need for commercial mortgage financing. Unfortunately, the structure of their businesses often makes it difficult to produce documentation that accurately reflects their income. As a result, they can struggle when seeking funding from traditional bank lenders. This situation has created an opportunity for non-bank lenders to implement programs that don’t require burdensome documentation like tax returns and current financial statements. Commercial mortgage brokers can solidify their status as solution providers by first identifying their clients’ issues and then matching their needs to the types of solutions these lenders provide.

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continued from page 15

Know Your Commercial Options

By Michael Boggiano

nmp news flash

Identify issues Commercial lending programs that feature fewer documentation requirements—often referred to as alternative document programs—vary by lender. Hard money lenders commonly require the least amount of documentation for their programs, though their high rates can be a drawback for borrowers. Other types of lenders offer stated-income programs for certain property types or borrower profiles. A few non-bank lenders even give borrowers the option to provide business bank statements instead of tax returns—a smart alternative for profitable business owners whose returns reveal financial hardships in the past. Brokers should have detailed conversations with their clients to learn which kind of program meets their needs. Some important questions may include: l Is this an investor or owner-occupied transaction? l How strong is the borrower’s credit? l Is time a factor? l Can the borrower prove their income without producing tax returns? l Does the borrower want flexibility or a long-term solution? Match clients to programs Armed with detailed information about their clients’ background, brokers can then search for the program that aligns with their needs. Consider the investor who purchases and re-tenants a formerly neglected multifamily property yet struggles to prove her recent success through old tax returns. This borrower may be best suited for a program that analyzes a rent roll instead of tax returns. Another common scenario involves the business owner whose bankruptcy two years ago is preventing him from purchasing a new property. That situation may call for a hard money solution. Traditional banks may offer low rates, but they also turn down a large number of creditworthy borrowers—especially if they fail to meet strict documentation requirements. Educate yourself on the alternative programs offered by different non-bank lenders and give yourself an opportunity to be a real solution provider for your clients. Michael Boggiano is national sales manager for Silver Hill Funding, a small-balance commercial mortgage lender offering nationwide financing from $250,000 to $1 million. He may be reached by phone at (888) 988-8843 or e-mail MikeB@SilverHillFunding.com.

SPONSORED EDITORIAL

program, Carrington House, which honors the sacrifices of the nation’s servicemen and servicewomen who served in Iraq and Afghanistan. To date, Carrington House has built nearly two dozen custom, adaptive homes in communities across the U.S., each designed to meet the special needs of a wounded veterans and their families. Two more homes are on track for completion this year, and three more homes are scheduled to be completed in 2017. Most recently, Carrington House has officially broken ground on a home in North Carolina for Master Sgt. David Glenn, his wife, Robin, and their two children. The new home will be a complete rebuild on their current property, and is slated for completion in May of 2017. CCF recently announced it is expanding its mission to provide veterans with the guidance and support they need to rejoin civilian life through such services as job-search assistance and business-plan consulting, to counseling and treatment referrals. The Carrington Charitable Foundation has been a leading supporter of the Veteran’s Airlift Command. Working with a network of volunteer aircraft owners and pilots, the Veterans Airlift Command organizes free air transportation for severely wounded veterans of the Iraq and Afghanistan conflicts and their families. For the past nine years, Carrington Aviation has participated on missions with aircraft and crew, transporting heroes to medical facilities for treatment and reuniting them with their loved ones.

The survey indicates that respondents believe offering more financing options to homebuyers for auction properties (38 percent) will be a factor in attracting a more consumer-based audience, followed by over a third of respondents (34 percent) who say education about the auction market and the use of real estate agents to promote auction properties (34 percent) will be needed to attract consumer interest in purchasing real estateowned (REO) homes. Furthermore, 28 percent of respondents view having access to more robust market data and insights as the most important aspect to make the greatest impact in the REO market. “The bank-owned real estate sector was largely untapped by individual home buyers until recently,” said John A. Vella, chief revenue officer of Altisource. “Today, individual buyers can benefit from smart financing options like rehab financing, otherwise known as a FHA 203(k) loan, which bundles the home purchase price and renovation costs into a single mortgage. This is a huge step in the right direction because it can help buyers purchase affordable properties from the REO market, especially at a time when inventory is low and housing prices are continuing to climb.” The survey had 100 participants consisting of mortgage servicing professionals attending the Five Star Conference and Expo. CoesterVMS Lends a Hand With School Makeover Project

Altisource Survey Finds REO Market Evolving to Attract Consumer Homebuyers

Altisource Portfolio Solutions SA recently polled 100 mortgage servicing professionals in attendance at the Five Star Conference and Expo in Dallas. The poll found that participants are optimistic that continued low interest rates will encourage homebuying (44 percent) and new financing options from lenders will broaden the buyer pool (39 percent).

CoesterVMS has partnered with Wave City Care, a communitybased non-profit, to complete an Extreme School Makeover at four schools in the state of Virginia. CoesterVMS provided cleaning materials and 40 volunteers to spend a day completing multiple landscape, cleaning and painting projects. “Children are our greatest gifts, and we are proud to be a part of an effort to ensure they have a continued on page 36

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Leaning Into Organic Growth By Steve Rennie

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ere is a potential scenario for 2017 and the future: Rates will go up and companies that are over-indexed with refinance business will lose a lot of volume. To maintain the infrastructure, they built to support that volume, organizations will shift gears and recruit producers to replace lost production. This kind of organic growth comes in two forms: recruiting new originators and growing production of current producers. The first scenario is quite common. Add new people … it’s easy, right? Not exactly. Most companies have gaps in their recruiting process that lead to outcomes resulting in lost time, lost revenue and the potential for reputation issues in the market. Attrition is one of these outcomes and a challenge in our industry (more than 60 percent in some cases). As organizations fight attrition and push to grow, managers focus on recruiting originators with a transferrable book of business. The truth is, only 10-20 percent of the managers inside of any given company (even the best companies) are good at the overall process of recruiting. The rest are typically below average, only recruiting because they “have to.” The second scenario in growing production is to help those working for you today build their volume. We see this happen in different ways, as examples include relationships a company may have a captured lead source, products for a niche market, or even triggered leads from a servicing portfolio being pushed to the originator. Depending on the market, geography or relationship, these can create added production opportunity. One thing has remained constant in our past 16-plus: In growth-oriented organizations, leadership and recruiting (with all things it requires) are part of the cultural foundation and core. When growth is part of a company’s culture, the success is greater across all managers and the entire organization than when it is not. To excel at strategic growth is a result of choreographing the initiative. It involves processes and best practices. It involves training, infrastructure and a capital investment. It also requires patience as we live in a hypercompetitive market for a limited talent pool. So ask yourself this question: If you could put yourself in a position to have an advantage over your competition, would you want to learn more? Since launching Model Match in 2014, we have learned much from our amazing clients. Supporting that culture and leadership do impact how a company grows. Furthermore, the involvement of the team (managers, leaders, internal recruiting, external recruiting and executives) is all critical to having long-term success in sourcing, attracting, hiring, on-boarding and retaining production talent. Among other benefits, Model Match customers have enjoyed: • •

A 35 percent increase in volume of Model Matched producers A 25 percent increase of production over prior employer

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

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Recession struck remained stagnant for nearly a decade, leaving countless institutions with half-baked solutions,” said Alimi. “By solving for the mortgage industry’s persistent point-of-sale problem, Lender Price aims to improve the mortgage experience for all industry stakeholders, from the consumer to the market maker.”

New MBA Initiative Geared Toward Women in the Real Estate Finance Industry

The Mortgage Bankers Association (MBA) has launched a new networking platform for women in the real estate-finance industry, mPower–MBA Promoting First American Mortgage Opportunities for Women to Solutions Launches Vendor Extend their Reach. mPower will Management Suite provide an opportunity for women to strengthen their networks, achieve professional growth, and exchange ideas and information about the industry. First American Mortgage Solutions “Addressing the needs of this LLC, a subsidiary of First American important segment of our Financial Corporation, has workforce is essential to our announced the launch of its industry’s success,” said David H. Vendor Management Suite Stevens, CMB, president and CEO designed specifically for residential of the MBA. “MBA can be the lenders. This innovative platform catalyst for creating a strong, helps reduce loan repurchase risk diverse network of women in our related to vendor due diligence industry.” issues by enabling continuous MBA members can access the oversight of thousands of platform through this newly counterparties. created Webpage. Once “First American practices somebody joins the networking extreme due diligence in our group, they can receive notices of selection and monitoring of thirdMBA’s women’s events, gain party counterparties, and our access to its resources and Vendor Management Suite is so information, and join their peers in effective that we use it in our own a private, member-only online business,” said Kevin Wall, community. president of First American “mPower is designed to Mortgage Solutions. “This is only recognize and promote the rise of the tip of the iceberg—we will women in the real estate finance continue to add features, industry, as well as the overall including, in the coming months, workforce,” said Marcia Davies, workflow management chief operating officer of the MBA. capabilities.” “Our goal is to provide First American’s Vendor information, events and a Management Suite bundles bestnetworking platform to help in-class due diligence and women maximize their overall counterparty reviews with potential.” automated monitoring and reporting to drastically reduce the Ellie Mae Launches Upgrade time and expense associated with to Its Encompass Solution manual processes. This singlesource access enables lender compliance teams of any size to manage activities throughout the vendor relationship lifecycle. Ellie Mae has announced that it Lenders can order reviews that has launched a major upgrade of satisfy both vendor selection and Encompass, its all-in-one ongoing due diligence mortgage management solution. requirements for counterparty Encompass Version 16.3 includes mortgage loan originators, new features for Encompass, appraisers, notaries, title examiners enhancements to Fannie Mae and and other mortgage professionals. Freddie Mac solutions, new Total They can customize their reviews Quality Loan (TQL) service including on an ad hoc or ordering options, additions to scheduled basis, or as a perpetual secondary marketing and monitoring service. Besides significant enhancements to creating an audit trail to document Encompass Product & Pricing proof of compliance, the platform Service. also identifies potential risks and sends instant notifications. continued on page 25

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NAMB President’s Message: November 2016

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Home Appraising in 2016: The Elephant in the Room I am writing this article on my way back from Washington State and their association’s annual conference. What a great host WAMP was to both me and John Stevens. One of the topics that I had the pleasure of hosting, was a panel and roundtable discussion on our industry problems with current residential appraisals. I thought I was going to be dodging bullets and taking on this issue in hopes of making changes for the better. But surprisingly enough, a great dialog ensued and we had some great ideas spin off of that meeting with loan officers and wholesale lenders. Our industry as a whole is being affected and worse is our consumers are being stuck with moving trucks, unable to move into their new homes. At NAMB National in Las Vegas, we held a Wholesale Lender Summit in which we spent most of our time discussing our industry’s ever-escalating issues with appraisals and the appraisers themselves. NAMB assembled a panel to open up the discussion. Two panelists were from appraisal management companies (AMCs) and we had the director of appraisal issues, John Brenan from The Appraisal Foundation, which is authorized by Congress as the source of appraisal standards and appraisal qualifications. If we were going to make some progress as an industry, it had to start with the stakeholders. Not only did we have some great appraisal panelists, but we had the wholesale lender leadership to make some changes that affect all of us. This is where we compare the Marathon versus the Sprint. Our Marathon solution came at the Appraisal Qualifications Board (AQB) recommendations on the changing of current qualifications for certified appraisers. They are currently accepting comments from industry through Nov. 5, 2016 at AppraisalFoundation.org. The AQB wants to create an alternative track to obtaining a credential. They have proposed college-level education changes for licensed residential credentials by removing requirements for 30 semester credit hours of college-level education. They have also proposed college-level education changes by revising the bachelor’s degree requirement and require an associate’s degree. Some of the alternatives could be completing a 21-semester credit hours of specific college level programs. Also, adding a provision to reduce the hours of experience. Now, coming to the Sprint to help the current state of affairs, where our lender partners need to come into the short-term solution function. How do we, as an industry, account for valuing those assets and offer the protection of all investors? Some recommendations have been for Fannie Mae to allow for appraisal waivers on certain transactions similar to what we had some years back. But the investors would have to agree to that “Overlay” as an acceptable loan package. To bring more credibility to my them, according to the latest STRATMOR Spotlight survey on the Appraisal Process and Turn Times, appraisal turn times since TRID came into effect in October of last year have increased 5.7 days for purchase loans and 6.3 for refinances. These increases represent increases of 81 percent and 79 percent, respectively over pre-TRID turn-times. Whether these increases are due to TRID or the increased volumes in 2016 coupled with shortages of qualified appraisers is unclear. Whatever the root cause, lenders are now adding additional days in process to an already tight closing timeline. I know that, at times, a history lesson is needed to answer the question: How did we get here? Congress created the Financial Institutions Reform, Recovery, and Enforcement Act and spawned The Appraisal Foundation, and its work is carried out by the Appraisal Subcommittee.

The Appraisal Foundation has two boards: The Appraisal Standards Board (ASB) and the Appraisal Qualifications Board (AQB). The ASB sets the standards for acceptable appraisal practices and the AQB sets the qualifications for licensed and certified appraisers. And each of the 50 states regulates its own appraisers, using guidance provided by the ASB and AQB. The AQB sets the current standards, needing a four-year degree, passing an exam and an internship of 2,500-3,000 hours. And since the passage of the Home Valuation Code of Conduct (HVCC), most lenders have moved to the Appraisal Management Company (AMC) model, which is overseen by the CFPB. Most appraisers today work for AMCs. In the presentation by the Appraisal Foundation, we see them requesting comments of lowering or changing the barriers to entry. This commentary has discussed the declining number of appraisers. There are reportedly less than 80,000, and it is not currently heading higher. The number has declined, per the Appraisal Institute, by 20 percent between 2007-2015. What if it drops another 20 percent in the next 10 years? Like real estate agents and loan officers, the average age of an appraiser is supposedly in their 50s. Will those retiring be replaced by Millennials? Good question. What kid comes out of 17 years of school wanting to be an apprentice for another year and taking more tests? What appraiser wants to be liable for their work, taking the time to review it in addition to doing their own? And remember, we have appraisers as the expert eyes of collateral for investors. They rely on residential real estate appraisals for gathering and interpreting information used for the valuation of a subject property. A real estate appraisal is complex and includes information from public records, along with diagrams and photos provided by the appraiser, who inspects the interior and exterior of the property. An appraisal includes three comparable properties used for demonstrating values in the immediate area, and for supporting the valuation of the subject property. They contain notes about a property’s age, architectural features, condition and necessary repairs. A residential real estate appraisal includes specific descriptions of the property and its surrounding area. Neighborhood amenities, current and planned development, legal proceedings, and other factors potentially impacting the value of the property are noted in the appraisal and factored into the property’s appraised value. An appraiser researches public records and recent home sales in preparing an appraisal. Any entity in the secondary markets wants to ensure that the loan-to-value (LTV) is correct. I will have more resources and solutions in the coming months as I travel to the different states and continue my dialog with lenders, appraisers and loan originators. Thank you and Namaste’ … Fred Kreger, CMC, 2016-2017 President NAMB—The Association of Mortgage Professionals Fred.Kreger@APMortgage.com • JOINNAMB.com

The CEO Perspective A Message From NAMB CEO Donald J. Frommeyer The month of November has really snuck up on everyone. It’s hard to believe that we have almost reached the end of the year. In this month’s CEO Perspective, I want to touch upon a few of the items that have made this year a great year for NAMB. First, our first NAMB East Conference was well-attended and very well-received. Hilton Head, S.C. was a beautiful place for this first endeavor, but as I have always said, you the member make these events very successful. The hotel, the conference and the speakers were great. NAMB held their first official golf outing in eight years here, and I must admit, it was a relatively good success. As going to

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Valerie J. Saunders, CRMS is vice president for NAMB— The Association of Mortgage Professionals. She may be reached by phone at (866) 992-0785 or e-mail ValSaun@gmail.com.

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

NAMB on the Road! By Valerie Saunders, CRMS

NAMB—The Association of Mortgage Professionals is excited about 2017 and our brand new “On the Road” series of workshops and special events. The year will kick off on Feb. 2, 2017, when NAMB joins the California Association of Mortgage Professionals (CAMP) at the Walnut Creek Marriott in Walnut Creek, Calif. This day-long workshop, sponsored by United Wholesale Mortgage (UWM) and Real Estate Mortgage Network (REMN) and

NAMB National was a huge success, and during that exciting weekend, NAMB rolled out its new KickStart program with an initial pledge of $500,000 from United Wholesale Mortgage (UWM). Knowing how vibrant the thirdparty origination (TPO) channel is right now, UWM decided to help grow the segment. The concept is to increase the number of brokers by helping with start-up costs and providing a roadmap to opening your own broker business. NAMB is hoping that more wholesale partners and industry vendors will contribute to this initiative to help restore some of the TPO market share. Prospective brokers can apply online, as well as access the start-up guide. Applications will not require a broker license to apply, but will need to have been granted before funding. Applications will be judged for organization, planning and will require

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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.

held the day before CAMP’s Sales & Marketing Conference North, will feature a variety of hands-on and informational sessions including a two-hour session presented by Calyx Software on Marketing and Advanced Reports. Next, we travel to Atlanta for NAMB East, March 16-18 at The Omni Atlanta Hotel at CNN Center. This fantastic event features the first of its kind “Ombudsman Initiatives” sessions, presented by the CFPB Ombudsman’s Office. The Initiatives Series will include three targeted discussions focusing on the small business, the mid- to large-sized business and the individual loan originator. In addition, NAMB East will feature presentations from HUD, VA, the Secret Service, the State of Georgia Regulator’s Office, an exhibitor-filled trade show, a Casino Night to benefit NAMB’s Legislative Action Fund, a St. Patrick’s Day Party, and much more! In April, 2017, NAMB joins the Texas Association of Mortgage Professionals (TAMP) and the Greater Houston Association of Mortgage Professionals (GHAMP) on April 6, 2017 at Houston Marriott Westchase continuing our day-long workshop series, sponsored by UWM and REMN. This event will also feature an exhibitor-focused tabletop trade show and much more! Continuing in April, NAMB will travel to Washington, D.C. for our annual Legislative & Regulatory Conference at The JW Marriott Washington, D.C. from April 21-26. This annual event features a variety of presentations, discussions and panels focused on federal issues. This is a must-attend event for anyone who is in the mortgage industry! Looking towards the month of June, NAMB travels to Minnesota with our UWM and REMN sponsored-workshop series to be held on June 6, 2017 at The Marriott Minneapolis Northwest in Brooklyn Park, Minn. Excellent presentations and discussions will continue at this day-long workshop, focusing on tools and resources for the individual loan originator. The excitement continues as we travel to Las Vegas for NAMB National to be held at The Rio Hotel, Oct. 13-16. Enjoy NAMB’s largest trade show in the last 10 years, featuring loan-originator focused sessions providing you with the tools you can use immediately. This exciting event will feature high-profile speakers, a fun-filled masquerade ball and much more! Stay connected with NAMB to get more details on these events and much more. The year 2017 will be the year of NAMB and the loan originator … don’t miss out! More events will be added soon!

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new places always has some drawbacks, we had some problems, but the area was beautiful and the sand spectacular. NAMB East in 2017 will be at The Omni Hotel in Atlanta, March 16-19, 2017 and plans are coming along for this event. You should start to make your flight reservations now, while they are cheaper and also your hotel reservations. Information for NAMB East 2017 can be found at NAMB.org. Our Legislative & Regulatory Conference in Washington, D.C. was very well-attended and the PAC Function was fantastic. The view from the top of the hotel was breathtaking, the weather was great and the conference itself turned out to be informative and the speakers were some of the best we have had in years. Marching on Capitol Hill to see our legislators was the biggest thrill you can ever imagine as you walk through the halls of Congress and seeing people going into offices to talk about our daily lives and what matters. NAMB’s 2017 Legislative & Regulatory Conference will be taking place at The JW Marriott on Pennsylvania Avenue, near the White House, on April 21-26, 2017. This will be an always important event for our membership to attend, and on Tuesday, April 25, we will be taking to the House and Senate to talk with our legislators about what they can do to help us as originators. Keep this date open as information will be forthcoming on how to register and how to attend. NAMB National was just completed in September and the crowds that we had this year were great. At the beginning of the event, there were people lined up around the corner to get their credentials for the event. The speakers were again fantastic, and I must admit, all sessions were very well-attended. On Saturday morning, it was total madness in the exhibit hall. For both days, we pushed through close to 2,700 people networking with exhibitors and getting the information that they needed. I have to admit that this was the third year at this venue, and we have totally outgrown it. For NAMB National 2017, we are changing venues to The Rio Hotel, Oct. 13-16, and we will have more space to add additional exhibitors to the hall. There will also be more places to see speakers and hold meetings. There are also going to be more things happening, more exciting speakers and more emphasis on you, the originator. So, as we turn the corner on 2016 and look forward to 2017, it will be a more exciting and jam-packed year for you to learn and experience NAMB and their conferences. And one final thing … Valerie Saunders, your new Conference Committee chair, has also put together a brand new “On the Road” series bringing you workshops and exhibitors outside of our standard conferences. So stay tuned and keep watching NAMB.org for all of the updates on these conferences and workshops.

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at least three years of origination experience. Applications will be reviewed by the selection committee, made up of five experienced originators. Assistance will be awarded in amounts up to $10,000 per individual request. NAMB, its members, and United Wholesale Mortgage are very excited about this new effort to grow the TPO channel and increase access to mortgage lending to more potential homeowners and increase the number of small business originators. This is a win for everyone—consumers, small business and those originators who want to be a part of this exciting growing market segment. Rocke Andrews, CMC, CRMS is immediate past president of NAMB—The Association of Mortgage Professionals. He may be reached by e-mail at RAndrews@LendingArizona.net.

NAMB East Set for Atlanta in 2017 By Linda McCoy, CRMS

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If you are an originator, manager or owner searching for a Christmas gift for yourself or your LOs, I think a trip to NAMB East would be the perfect present. Atlanta in the springtime is where our next conference will be held, March 16-18 at The Omni Atlanta Hotel at CNN Center. We are getting ready for an exciting time. We will bring you exactly what you want in a conference. We are packaging NAMB East 2017 full with education, networking, many great vendors for our trade show, keynote speakers and sessions to help you make more money in your business, and receptions and parties every evening for the opportunity to socialize with your peers. Why do people attend NAMB conferences? I go because I value the networking with others who are facing the same issues that I face each day. We all have the same rules and regulations that keep us working long hours, getting our clients to the closing table. One woman told me she attends NAMB’s conferences because she appreciates how we include the membership in committee meetings. She feels that she is playing a small part in something big and playing a role that is very important. She said she loves the fact that we listen to what she says. NAMB does listen and encourages all members to attend and get involved with a committee. We have many originators who come for the education because we have some of the best instructors in the industry. Education is not just getting your hours for the NMLS. NAMB offers certification classes to help you pass the exams for the Certified Residential Mortgage Specialist (CRMS) and Certified Mortgage Consultant (CMC) designations. More brokers and business owners come to find out what is on the horizon in government affairs. It is very important for our members to know the issues we are facing and what we need to be talking to our elected officials about at the Legislative & Regulatory Conference in D.C. This year, we will be going to D.C. in April, so NAMB East will be a good place to plan our strategies for success on Capitol Hill. NAMB East 2017 is coming soon, so if you have yet to register, now is the time to go to NAMB.org and register if you are a vendor or an attendee. This will be our second conference in the east, and we are planning a huge St Patrick’s Day Party. We hope to see you there. Do not forget to buy those Christmas Gifts! Linda McCoy, CRMS of Mortgage Team 1 Inc. in Mobile, Ala. is a member of the NAMB board of directors. She may be reached by phone at (251) 6500805 or e-mail Linda@MortgageTeam1.com.

Government Affairs Committee Update By Michelle Velez, CMC

While much of the country’s focus has been on the Presidential Election, NAMB’s Government Affairs Committee has been hard at work. There has been a lot of talk of coming into a lame duck session. But with that said, there is a lot going on. Here are several of the issues that NAMB is working on. Last May, the U.S. Department of Labor (DOL) released the Final Rule on Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees under the Fair Labor Standards Act (FSLA). The new rule goes into effect Dec. 1, 2016. The Final Rule is meant to strengthen and to simplify protections of overtime-exempt employees. The Final Rule updates the salary where certain employees may be exempt from overtime pay requirements. The change raises the salary level from its previous amount of $435 per week (or $23,660 per year) to a new level of $913 per week (or $47,476 per year). NAMB is reviewing all aspects of this rule to see just how this will affect Loan Originators and small broker shops. We will be issuing general guidance on it. Can you believe that it has been five years since the Consumer Finance Protection Bureau (CFPB) implemented the Loan Officer Compensation Rule? There is a five-year review process where the CFPB allows for comments and input on how their regulations have been implemented. NAMB’s Government Affairs Committee is currently reviewing the LO Comp Rule to determine what effect this has had on small business and what effect it has had on the consumer. In addition, NAMB will also be reviewing the Ability-toRepay Rule (ATR) and the effect that the three percent points and fees cap has on the consumer. This all circles back to HR 3393–The Mortgage Fairness Act which, if passed, would amend the three percent points and fees cap to remove the mortgage broker company compensation from the three percent points and fees cap. The CFPB has agreed that low- to moderate-income borrowers may be harmed by the lack of consumer choice due to the Ability-to-Repay Rule. NAMB is still looking to hear from loan originators to help provide data on how these two regulations negatively impact consumers. Make sure to let us know if you have a consumer that was not able to get a loan, we are compiling the data. We will share with the CFPB as they need this information to make any changes to the rule. Lastly, NAMB is reviewing the PHH court case and watching whether the CFPB will appeal the results to the Supreme Court. PHH Mortgage was fined for alleged violations of the Real Estate Settlement Procedures Act (RESPA). The PHH case established that the structure of the CFPB was unconstitutional, and fixed that problem by having the CFPB Director serve at the discretion of the President. Another aspect focused on in the PHH case focused on settled case law, regulator direction, and industry practice concerning the level of services and facilities needed in order to comply with RESPA. As NAMB’s incoming Government Affairs Committee chair, I would like the opportunity to hear from you. If you have any questions, comments or concerns, please feel free to contact me directly at Michelle.Velez@SupremeLending.com. I look forward to hearing from you. Michelle Velez, CMC is a member of the board of directors of NAMB—The Association of Mortgage Professionals. She may be reached by phone at (650) 409-5347 or e-mail Michelle.Velez@SupremeLending.com.

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NAMB Education Corner: More About Introductory Mortgage Origination Courses By Bob Sweeney, CRMS

We have formally announced the availability of the new Mortgage Master and Mortgage Fundamentals courses at NAMB National last month. The feedback from the attendees at NAMB National was very encouraging. I have already received numerous calls from our membership on both courses, and the Education Committee is working very hard to make them available on the NAMB Web site. Available now is the 40-hour self-paced online course, Mortgage Master, which can be accessed at AMIOnlineEducation.com. Just click on the “Mortgage Master” tab and click on “Add to Cart.” Enter “NAMB” into the “Apply Coupon” field. This ensures that NAMB gets credit for the course. If you are an NAMB member, please contact me by e-mail at Bob.Sweeney46@yahoo.com for a member coupon code which applies a 10 percent discount to the $995 price. The live 40-hour Mortgage Fundamentals course will be offered in the future in all regions of the U.S. and we will work with our lender partners to set up classes for their mortgage broker partners. If you have an immediate need for this course prior to being offered on the new NAMB Web site, please feel free to contact me at (317) 6253287 or e-mail Bob.Sweeney46@yahoo.com.

We need trainers! I have a few volunteers already, but we need many more. If you are a trainer and would like to become more involved in the education of NAMB members please contact me. One of my favorite quotes is “Motivation and inspiration comes from education” by Jim Rohn. We welcome any input from all mortgage professionals. If you would be interested in joining NAMB’s Education Committee and become part of our future success in the education of our independent mortgage companies and mortgage loan originators, please feel free to contact me. If you are not an NAMB member, now is a great time to become a member. Go to your state association Web site or NAMB.org and join as a Professional Member of NAMB. Thank you Bob Sweeney, CRMS is a financial advisor at Meridian Mortgage Solutions, director for NAMB–The Association of Mortgage Professionals and serves as chairman of the NAMB Education Committee. He can be reached by phone at (317) 625-3287 or e-mail Bob.Sweeney46@yahoo.com.

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In Memoriam: Kate Crawford

Don Fader, past NAMB Board member and NCAMP past president, with Kate Crawford during NAMB’s Annual Convention in Salt Lake City in 2004

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Longtime NAMB member Kate Crawford from North Carolina passed away Sept. 27, 2016. Kate was an extremely active member of the NAMB board, having served the association on the national level as a member of the board and on several of the association’s committees. Kate was also an active member on the local level, having served various board positions for the North Carolina Association of Mortgage Professionals, including a term as statewide president and co-founder of the association. Kate was born at the Tokyo Army Medical Hospital in Tokyo, Japan to the late Dr. George E. McCrossan Jr. and Anne L. McCrossan, and was the wife to John N. Crawford of 30 years. In addition to her service to NAMB and NCAMP, she was also a member of AOII National Sorority and the Alumni Association, past president of Alamance Burlington Kiwanis and previously served as Lt. Governor of North Carolina Kiwanis, a graduate of Leadership of Alamance, was active in the United Way and a member of American Business Women’s Association. Many of Kate’s colleagues shared their memories with National Mortgage Professional Magazine … Bob Armbruster, NAMB Past President “Kate’s passing was a shock to us all. Her service to both NAMB and its North Carolina chapter are a reflection of her dedication and commitment to both organizations. She will be missed.” John Councilman, CMC, CRMS, NAMB Past President “Kate was an amazing worker. I can remember when she would be working on files late into the night while she attended NAMB conferences. Despite her workload, she always attended and participated, especially in government affairs. She was the first to realize that NAMB was for all originators, not just for brokers. As a result, NCAMP was the first NAMB state association to change their title to ‘Professionals’ rather than ‘Brokers.’ Her work at NAMB was impressive. Many of the concepts we now take for granted at NAMB were originally pushed vigorously by Kate.” Harry Dinham, CMC, NAMB Past President and Executive Director “I was very saddened to hear that Kate had passed away. We served together on several NAMB boards and she was a very hard worker and champion for the mortgage industry. Her passion and guidance will be missed by all of us.”

Kate Crawford addresses attendees during the NAMB Annual Convention in 2006

Kate Crawford receives the NAMB President’s Award of Merit from Past President Jim Nabors

Donald E. Fader, CRMS, NAMB Past Board Member & NCAMP Past President “Kate was tireless advocate of the independent mortgage professional. A founding member of NCAMP in the early 1990s, she was elected to every position in the organization. When North Carolina drafted the first predatory lending law in the nation, she was at the table and helped turn back some of the more burdensome aspects of that law. She was active in NAMB, and gave unselfishly of her time showing us what one person, deeply committed to her career could accomplish. Whatever I may have accomplished working on behalf of my state and national association, Kate’s example helped inspire me and countless others to go further and do more. While her voice is silent now, perhaps others in our industry will be willing to stand and promote this honorable profession that has done so much to advance homeownership in America.” Patty McGill, CMC, NAMB Past President “It would be impossible to recall the tumultuous times of NAMB without remembering Kate Crawford. She gave tirelessly over many years as the organization struggled to expand its membership and influence in the regulatory and political arenas in which our members were embroiled. Kate had a very sharp mind and was able to quickly get to the heart of a matter–and to help craft thoughtful and sensible resolutions to the issue at hand. She chose to be active in many areas of NAMB, which gave her the ability to be knowledgeable of the various challenges facing the organization. I have noted in reading her obituary that her magnanimous persona was evident in the many organizations and causes that she championed. All of those whose lives she touched are better and stronger because of Kate being a part of them.” Marc Savitt, NAMB Past President “Kate Crawford was a tireless advocate for NAMB and our industry. Kate is the one who got me involved with the Government Affairs Committee and leadership. She was a nononsense person who didn’t have a problem speaking her mind. She was also a kind-hearted friend to all. Without knowing it at the time, Kate and I both grew up in New Jersey, just a few miles apart. During the summer months, we worked for the same company at the shore. We always enjoyed reminiscing about those days. Sadly, the other day I started to call Kate about something I read about New Jersey. All at once it hit me … I’ll never be able to call her again. I pray that Johnny, Graham and her sister Maureen find comfort in their memories of her.”

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SoFi Partners With Fannie Mae to Reduce Student Debt

continued on page 26

NAMB+ is an independent, wholly-owned, for-proﬁt marketing subsidiary of NAMB, The Association of Mortgage Professionals. Dear Mortgage Professional, Is there a vendor you currently work with that you think is fantastic and would recommend to your colleagues? Do you know of a company that would like to increase its exposure, grow its business and connect with the best and brightest in the mortgage industry? NAMB+ is looking to expand its Endorsed Provider Program in 2017 and we would love recommendations from you, our fellow mortgage professionals, on companies that you work with, or would like to work with, that may be interested in becoming NAMB+ Endorsed Providers. NAMB+ Endorsed Providers are carefully reviewed and selected for the program by the NAMB+ Board of Directors. NAMB+ Endorsed Providers offer NAMB Members discounts on products and services, exclusive offers, and the added beneﬁt of exceptional customer service.

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n National Mortgage Professional Magazine n NOVEMBER 2016

SoFi and Fannie Mae have announced a new loan option that enables homeowners to pay down student debt using the equity in their homes. With SoFi’s new offering, the Student Loan Payoff ReFi, homeowners will have the ability to refinance mortgages at a lower rate and pay down the balance of an existing student loan. With its cashout refinance student loan payoff plan, SoFi will pay down the student loan by disbursing payment directly to the servicer of the student debt. SoFi is a Fannie Mae approved seller/servicer. This loan option, available through SoFi, is designed to help homeowners that manage their own student debt or those who have cosigned loans, which often includes parents. An estimated 8.5 million

households in the U.S. could potentially pay down or completely pay off their student debt obligations with this new option. “People can pay off student loan debt and are left with one loan at the low rates that mortgage borrowers are enjoying in today’s market,” said Michael Tannenbaum, senior vice president of Mortgage at SoFi. “The nation is seeing recordlow mortgage rates and our partnership with SoFi is just one

Nearly 90 percent of private student loans made to undergraduates require a creditworthy cosigner, according to data compiled by Sallie Mae, and Private Parent PLUS loans carry a higher rate than the borrowing costs of most mortgages. “Fannie Mae and SoFi are leaders in housing and student finance,” said Tannenbaum. “This option gives us an opportunity to both promote homeownership and relieve part of the country’s student debt burden.”

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“The latest major release of our Encompass all-in-one mortgage management solution offers enhancements to our integrations with Fannie Mae and Freddie Mac and more customer choice when ordering TQL services with leading providers like First American Mortgage Solutions and DataVerify,” said Jonathan Corr, president and CEO of Ellie Mae. “And later this fall we’ll be offering major enhancements to the Encompass Product & Pricing Service expanding our lenders ability to manage their own custom programs and well as a new dashboard to provide visibility into the status of pricing files as well as securely manage investor credentials.” Also with the Encompass 16.3 Release, Ellie Mae is expanding the Total Quality Loan program (TQL) in Encompass to deliver additional service choices through a new partnership with DataVerify. Those already using DataVerify DRIVE for fraud and income verification (4506-T) will be able to order those services through the TQL screen in Encompass. FraudGuard, a comprehensive decision-support tool designed to quickly and accurately identify risk in mortgage transactions, has also been added to TQL through a new partnership with First American Mortgage Solutions, allowing users the ability to clear alerts and re-score files within the platform.

way that Fannie Mae is able to support current and future homeowners that have student debt,” said Jonathan Lawless, vice president for Product Development and Affordable Housing at Fannie Mae. The Student Loan Payoff ReFi actively addresses a growing burden that impacts a wide range of households. According to Experian data, the average homeowner with outstanding cosigned student loans has a balance of $36,000 on those student loans, and those with outstanding Parent PLUS loans have $33,000 in student debt.

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CreditXpert’s New TrendScape Analysis Meets Trended Data Demands

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CreditXpert Inc. has announced the addition of TrendScape to its suite of credit analysis tools, helping mortgage loan officers and underwriters quickly and easily make sense of the new trended credit reports, many of which now include more than a thousand new data points. Trended credit data, detailed historical information provided for each line of credit, is changing underwriting, which previously relied on a static analysis of credit. This loan origination sea change can present challenges for loan officers and underwriters as they work to best serve both their companies and applicants. TrendScape, now part of CreditXpert 9, analyzes and interprets large amounts of data, enabling lenders to quickly spot trends tied to clients’ credit behavior. It then delivers that critical information in plain language, on the first page of every credit report. “Trended data is the new normal in mortgage credit reporting, providing an opportunity to better understand applicants’ true credit behavior,” said Dave Chung, managing director of CreditXpert Inc. “But it may not be readily apparent exactly why applicants are denied loans based on this data. TrendScape makes sense of this new world, presenting insights to loan officers and underwriters in a digestible way. Armed with that intelligence, they’ll be in a better position to quickly discover opportunities for applicants.” ClosingCorp Partners With PCLender on TRID-Compliant Solution

ClosingCorp has announced that its SmartFees service is now integrated with PCLender’s Loan Origination Software (LOS). SmartFees provides an automated fee solution that gives users fast access to TRID-compliant closing costs with an audit trail and databacked guarantee. “Unlike other options in the market, the ClosingCorp service

allows lenders to generate actual rate and fee data from the providers they currently do business with, as well as others from across the country,” said Lionel Urban, chief executive officer of PCLender. “Our integrated solution will help increase productivity and show proof of compliance with best-inclass closing costs and easy-touse technology.” The integration demonstrates both companies’ commitment to support lender solutions designed to expedite Loan Estimate (LE) and Closing Disclosure (CD) production. The integration of ClosingCorp’s service within the PCLender LOS will allow PCLender users to create LEs or GFEs directly from their LOS. “Having accurate, complete closing cost data streamlined directly into an LOS system, like PCLender’s, allows loan officers to have the most accurate, compliant information at their fingertips to take to their customers,” said Bob Jennings, chief executive officer for ClosingCorp. “Both ClosingCorp and PCLender are dedicated to providing solutions that help automate the residential real estate transaction process while helping our lender clients improve cycle times, increase efficiencies and remain compliant at all times.” Black Knight Financial Launches Motivity Anywhere App

Black Knight Financial Services Inc. (BKFS) has announced that it launched Motivity Anywhere, a mobile app that enables mortgage lenders to instantly access critical business intelligence on Apple and Android devices. The app leverages Black Knight’s LoanSphere Motivity platform, which delivers real-time analytics to help mortgage lenders proactively monitor, measure and manage performance across the enterprise. The Motivity Anywhere app provides access to visualizations of production and performance metrics, and includes configurable dashboards so users can view the specific information that is important to them. The app also provides push notifications,

alerting users of critical, clientdefined events and/or thresholds so action can be taken immediately when necessary. Version 2.0 of the app, available at the end of 2016, will include high-level graphical summary data of key performance indicators, with the ability to drill down for granular information to help users easily identify the source of any issues. Users will have instant access to critical business metrics, such as trending, goals versus actual results, and much more. “Motivity Anywhere allows our clients and partners to easily consume the information they need on their terms,” said Jerry Halbrook, president of Black Knight’s Origination Technologies Division. “The app provides the metrics from our Motivity platform directly to mobile devices in an intuitive, easy-to-understand manner, so users can instantly track performance, and receive actionable information via push notifications—anywhere, anytime.” ReverseVision Exchange to Offer Flood Determination From ServiceLink

ReverseVision has announced that it has completed an integration with ServiceLink Flood that enables users of RV Exchange (RVX) loan origination software (LOS) to order a “life of loan” flood certification from ServiceLink without ever leaving the RVX system. ServiceLink flood products can be ordered from within RVX as of the system’s 6.2 update. “ServiceLink’s fully-digital national flood maps are among the most accurate and comprehensive in the industry, allowing us to consistently deliver the higher hit rates and quicker turn times that have made us a preferred provider among originators,” said Mark Reedy, managing director of ServiceLink National Flood. “We are delighted to join forces with ReverseVision to bring best-inclass flood certification to our mutual customers.” Among the most trusted names in the flood certification business, ServiceLink provides an exclusive aerial product overlayed with a street map and the FEMA Special Flood Hazard Area Map. This tool allows their lender customer, and their borrowers, to verify that the structure is within a FEMA flood zone. Another value is that lender clients are able to identify if there

are multiple structures on the property. “We are always looking for opportunities to partner with the providers our customers know and prefer. Ultimately, our goal is to make the origination of reverse mortgages in RVX as fast, costeffective and compliant as possible,” said ReverseVision Vice President of Sales and Marketing Wendy Peel. “This connection with ServiceLink serves that mission by making the flood certification order and delivery process simpler and more efficient.” Capsilon Releases Free eBook on Best Practices for Leveraging Automation

Capsilon Corporation has announced that it now offers a free eBook, Six Key Steps Lenders Must Automate to Succeed. The new eBook outlines how lenders can reduce the labor associated with mortgage loan production by up to 80 percent, and accelerate loan production, by automating several critical steps in the loan production process. While striving to remain compliant with various new industry regulations, many lenders have added headcount, resulting in lengthening turn times and increasing loan production costs. In this eBook, Capsilon demonstrates how leveraging the right technology speeds loan turn times, increases loan quality and decreases total loan production costs via repeatable, automated processes. Six Key Steps Lenders Must Automate to Succeed provides the practical advice lenders need to develop a strategy for automating the loan production process, as well as guidance on how lenders can use automation to gain a competitive edge. Your turn National Mortgage Professional Magazine invites you to submit any information promoting new “niche” loan programs, new products or any other announcement related to the introduction of a new program, to the attention of: New to Market column Phone #: (516) 409-5555 E-mail: newsroom@nmpmediacorp.com Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

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YOUNITED MEANS WHAT WE CAN SAY, YOU CAN SAY

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Tales From the

Closing Table BY ANDREW LIPUT

Wells Fargo hit by largest CFPB fine for privacy breaches: What it means for you! he mortgage closing transaction is the single largest financial transaction in the lives of most consumers, and it is also the riskiest stage of the mortgage process for lenders. While the vast majority of lawyers and notaries and title agents are experienced, ethical and diligent professionals, for a few the role of closing agent is too tempting a lure for selfish criminal intent. This column addresses the good, the bad and the ugly!

l Enforcing corporate policies in locally managed branch offices is a daunting task that requires constant supervision and accountability. l Determining who may access consumer private data and for what purpose requires careful consideration and technological checks and balances. l Creating an environment where non-licensed and regulated employees can benefit financially by “upselling” financial products

to unsophisticated consumers is dangerous. l Tying manager income or bonuses to branch financial goals could create an untenable conflict of interest that may result in consumer harm. l Viewing consumers as vehicles for advancement and financial reward rather than as individuals, neighbors, and members of your community violates the George Bailey– Bailey Savings and Loan Golden Rule: Bankers are to help lift people up, not use people to lift themselves up! 29 Wells Fargo did the right thing by conducting an internal investigation and holding wrongdoers accountable for consumer privacy violations and unauthorized banking transactions. The CFPB has planted a stake in the ground on privacy rights that every lender of any size will do well to heed.

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Andrew Liput has been a corporate, real estate and banking attorney for nearly 30 years He is the founder, CEO and president of Secure Insight, the first data intelligence and risk analytics firm to offer specialized vendor management services to mortgage lenders and banks nationwide addressing settlement agent risk. He can be reached by e-mail at ALiput@SecureInsight.com.

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In mid-September, Wells Fargo reached a $185 million settlement for what the Consumer Financial Protection Bureau (CFPB) and other federal officials called a widespread practice among employees of creating fake customer accounts, PIN numbers and e-mails in order to meet sales targets and earn bonuses. Details reveal that Wells Fargo employees may have opened as many as 1.5 million bank accounts and another half million credit card accounts not authorized by consumers. The penalty resulted after the CFPB became aware of the details from the bank’s own investigation that reviewed accounts between 2011 and 2015. Further details revealed publicly indicate that Wells Fargo employees issued debit cards with fake PINs and used phony e-mail addresses to secretly sign up customers for online banking. They then temporarily transferred customers’ money to the bogus bank accounts, sometimes leaving a low balance and triggering overdraft or other charges. Many customers were also charged annual fees and interest on the credit cards. Although more than 5,000 Wells Fargo employees were terminated because of their roles in this widespread scheme, and

the bank acted on its own initiative in rooting out and ending the practice, the news has added to consumer fears about how their non-public personal information is being handled by bankers generally. The Wells Fargo incident raises some key issues that are worth considering by all banks and mortgage lenders:

When Does the “Foreclosu

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ne of the cases I have been monitoring is U.S. Bank NA v Bartram, which had been argued before the Florida Supreme Court (Supreme Court). The issue at bar concerns the statute of limitations for filing a foreclosure suit. I think this case is being watched closely not only because of its impact on

Florida’s statute of limitation provisions but also because of its wider, national implications. The Supreme Court recently ruled that each monthly default on a mortgage loan payment resets the five-year statute of limitations for filing a foreclosure suit. This ruling affirms a lower court’s decision, which stemmed from a foreclosure action in Ponte Vedra, Fla. The Supreme Court affirmed a

Fifth District Court of Appeal (Appeals Court) ruling that the statute of limitations was reset each time the borrower failed to make a payment to U.S. Bank NA on the mortgage. This is a long, winding, and somewhat complicated case with tons of citations and plenty of positions taken via amici curiae. I wish only to hit on a few salient observations. I will conclude with a

view of the remarks of one of the Justices, who concurred as to “result only,” which means that the Justice agreed with the decision made by the majority of the court, but stated different (or additional) reasons as the basis for the decision. Now, the big question that the Supreme Court needed to answer was: If there is a default on a loan,

sure Clock” Start Ticking? By Jonathan Foxx

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l Foreclosure dismissed, and l Five-year statute of limitations elapses. Or, to put the question more precisely into the framework of the litigation: Does acceleration of payments due under a residential note and mortgage with a reinstatement provision in a foreclosure action that was dismissed trigger application of

the statute of limitations to prevent a subsequent foreclosure action by the mortgagee based on payment defaults occurring subsequent to dismissal of the first foreclosure suit? The Supreme Court answered in the negative. Let me provide some background. This dispute began with a 2006

foreclosure lawsuit against Lewis Bartram after he stopped making payments on the mortgage. In April 2011, with Bartram’s suit still in litigation, his ex-wife Patricia Bartram filed a suit to foreclose her mortgage, naming her exhusband, the bank and the homeowners’ association as defendants. continued on page 32

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causing an acceleration thereof, where the lawsuit to foreclose has been dismissed and a five-year statute of limitations has run out, is the lender permanently prevented from subsequent foreclosure proceedings because of the statute of limitations? Here is a meta-outline: l Loan defaults, l Lender accelerates, l Foreclosure lawsuit,

“foreclosure clock” start ticking continued from page 31

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To provide some dates and actions: l Nov. 14, 2002: Lewis Bartram and Patricia Bartram purchase real property in St. Johns County, Fla. l Nov. 5, 2004: Marriage is officially dissolved, with the divorce court ordering Lewis to purchase Patricia’s interest in the property, pursuant to their prenuptial agreement. l Feb. 16, 2005: Bartram obtains $650,000 loan through Finance America LLC, and Finance America subsequently assigns the mortgage to U.S. Bank, with March 1, 2035 as the designated maturity date of the note. l Feb. 17, 2005: Bartram executes a $120,000 second mortgage to Patricia to buy her interest in the real property, in accordance with the prenuptial agreement, thus she ends up with a recorded interest in the same real property as the Bank. l Jan. 1, 2006: Mortgage goes into default. l May 16, 2006: U.S. Bank files complaint to foreclose. l Dec. 12, 2006: Lewis Bartram files answer to the complaint. l Dec. 19, 2006: U.S. Bank moves for final summary judgment of foreclosure, which does not appear to have been denied. l Feb. 23, 2009: U.S. Bank files renewed motion for summary judgment l March 24, 2009: Motion denied. l Feb. 2, 2010: U.S. Bank files a third motion for summary judgment, which was never heard. l Jan. 11, 2011: Plantation at Ponte Vedra Homeowners’ Association files a complaint seeking to foreclose its claim of lien for homeowners’ assessments and other charges. l April 1, 2011: Patricia Bartram initiates a separate action by filing a complaint seeking to foreclose the mortgage she received from Lewis Bartram in connection with their divorce proceedings. l May 5, 2011: Trial court dismisses case without prejudice as a result of U.S. Bank’s failure to appear at a noticed status conference, and U.S. Bank does not appeal the dismissal. l Aug. 29, 2011: The trial court

cross-claim. The trial court found no genuine issue as to any material fact, granted summary judgment, quieted title in Bartram, denies Bartram’s motion, found the bank had no further citing its lack of jurisdiction in ability to enforce its rights under the matter since May 5, 2011 the mortgage and note that were l Feb. 4, 2012: Patricia the subject matter of the bank’s Bartram’s foreclosure action is dismissed foreclosure action, and transferred to the same cancelled the mortgage and note. judicial division where the In doing so, the trial court Association’s foreclosure was released the bank’s lien on the pending, which is the same property. At this point, the bank court that had dismissed U.S. subsequently filed a motion for Bank’s foreclosure. rehearing, and after the trial court l April 26, 2012: Lewis Bartram denied the bank’s motion, it files a cross-claim against U.S. appealed to the Appeals Court. Bank in Patricia Bartram’s Along the twists and turns of foreclosure action, seeking a this matter, five years into the declaratory judgment finding litigation the trial court dismissed U.S. Bank’s mortgage to be the case without prejudice when unenforceable under the the lender itself did not show up statute of limitations and for a case management hearing. cancelling it as an illegitimate The feature of “without prejudice” cloud on title. essentially means that no rights or l May 24, 2012: Lewis Bartram privileges of the party involved are files a motion for default considered to be lost or waived, against the bank for failure to or, put otherwise, in a judgment of respond to his cross-claim, dismissal “without prejudice” but the trial court never rules ordinarily indicates the absence of on this motion. a decision on the merits and l July 31, 2012: The trial court leaves the parties free to litigate enters final summary judgment the matter in a subsequent action, in Lewis Bartram’s favor on his as though the dismissed action cross-claim. had not been started. But U.S. l Sept. 12, 2012: After trial Bank did not appeal the dismissal. court denies U.S. Bank’s Subsequently, the trial court ruled motion for rehearing, U.S. that the mortgage was cancelled Bank appeals the entry of final because the Bank had let the case judgment to the Appeals sit for more than the five years Court. allowed by the statute of l April 25, 2014: Appeals Court limitations. certifies a question to the The foreclosure suit having Supreme Court on the been dismissed, Bartram then application of statute of filed a claim seeking declaratory limitations, and reverses the judgment because it had been trial court’s ruling, holding that more than five years since his a default occurring after a default and the statute of failed foreclosure attempt limitations had run out. It is creates a new cause of action relevant and should be noted that for statute of limitations the statute of limitations had been purposes, even where reduced from 20 years to five acceleration had been years in 1974. I’ll explain the triggered and the first case relevance of the timeframe below. was dismissed on its merits. Bartram argued that the clock Therefore, a foreclosure action began to run when he first for default in payments defaulted in January 2006 and the occurring after the order of bank accelerated the loan. dismissal in the first A word about the proverbial foreclosure action is not “clock running out.” In Florida, the barred by the statute of statute of limitations for limitations. foreclosure of a mortgage is five l Sept. 11, 2014: Supreme years, which begins when the last Court enters an order requirement of the claim occurs; accepting jurisdiction. or, apropos of this litigation, at the l Nov. 3, 2016: Supreme Court time of the acceleration. So, approves the Appeals Court’s presumably a lender has five years decision and answers the to sue to collect on a defaulted certified question in the debt. negative. Bartram’s position could be reduced to two points: It is after July 31, 2012 that this matter starts to get really 1. Is this a matter of the fallacy interesting. Bartram then moved called “begging the question,” for summary judgment on his which in this instance occurs

because the question begs its own answer as it explicitly assumes that there can in fact be “payment defaults” after the acceleration of all future payments due under a note and mortgage; and, 2. Howsoever the first point is answered, it only resolves one of the issues necessary to decide this case, in Bartram’s view, which is whether or not the dismissal of an action to foreclose an accelerated mortgage can serve as the basis for avoiding the statute of limitations in a subsequent suit. As it turns out, the trial court sided with Bartram, but the Appeals Court then reversed the ruling and certified the question of whether the acceleration of payments under a loan actually does trigger the statute of limitations. Understand that if the Supreme Court did not uphold the Appeals Court’s ruling, it would not be an overstatement to observe that such a holding would surely lead to a huge increase in such litigation! And the lower court admitted as much, when it stated that its “decision will likely be determinative of hundreds, if not thousands, of ongoing disputes between lienholders and owners of Florida real estate, most of which are currently pending before the state courts of Florida.” The Appeals Court held that a lender can accelerate its mortgage more than once, and, if the lender accelerates and the case is later dismissed, the lender can still re-accelerate the loan and foreclose the mortgage. Further, although the lender may re-accelerate and re-foreclose, it may not be able to seek the collection of payments which are older than five years, but it can still collect on all those payments which are not five years or older on all future payments. Of course, Bartram’s argument was sort of the reverse: the cause of action for default of future installment payments accrued upon acceleration which triggered the statute of limitations; therefore, the lender did not and indeed could not revoke the acceleration after the dismissal and re-file its case after the expiration of the five-year limitation. In its decision, the Appeals Court stated that its ruling was based on the Supreme Court’s ruling in Singleton v. Greymar

in the acceleration clause in Bartram’s contract, in relevant part: Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. The Appeals Court relied on its previous legal reasoning in the above-mentioned decision in Singleton v. Greymar Associates, where it said every default gives rise to a new and independent cause of action and right to accelerate payment of the debt,

which applied the reasoning to preclude homeowners’ res judicata defenses of foreclosure suits. These res judicata defenses are used in matters that have been adjudicated by a court and may not be pursued further by the same parties. In other words, if a foreclosure suit had been previously dismissed on a technicality, a homeowner could not use the argument that the issue had already been adjudicated. To quote the Singleton case, “when a second and separate action for foreclosure is sought for a default that involves a separate period of

default from the one alleged in the first action, the case is not necessarily barred by res judicata.” Will this matter somehow be reheard by the Florida Supreme Court? Or, will it be taken for review by the U. S. Supreme Court? On both possibilities, I tend to think the answer is No. In a sense, we should not be surprised by the outcome. After all, some state and federal courts have already viewed the Singleton res judicata decision as a basis for statute of continued on page 96

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Associates, a September 2004 decision which found that “a default occurring after a failed foreclosure attempt creates a new cause of action for statute of limitations purposes, even where acceleration had been triggered and the first case was dismissed on its merits.” So, there was an involuntary dismissal of the initial foreclosure action against Bartram, which, as such, returned the parties back to the same contractual relationship with the same obligations, and this meant that Bartram had the opportunity to continue making payments and the lender would have retained the right to accelerate the payments through a foreclosure suit in the event of another default. At this point, I think we can pretty much guess the outcome. After all, this is about lending, mortgages in particular, and if Bartram prevailed banks could not collect on billions in dollars of defaulted loans with Bartram-like scenarios! There are some observers of this litigation who believe a decision in favor of Bartram would create an environment that encourages new filings in previously dismissed cases as well as many more voluntary dismissals in the face of errors, omissions, and oversights. But, even more important, if the fiveyear statute of limitations starts again when each mortgage payment is missed, it is asserted that the Supreme Court’s ruling would effectively be extending the five-year limitation throughout the life of the loan. Given a 30year term mortgage, that would be 30 years plus five years, or up to 35 years! I wonder about how such a ruling would impact the contract between the lender and borrower, since mortgage contracts are contracts of adhesion, that is, these are contracts that are drafted by one party in a position of power, leaving the weaker party to either sign the boilerplate contract or seek services elsewhere, or, to put it more bluntly, the weaker party must “either take it or leave it.” After all, mortgage contracts use acceleration as a lawful response to default. A court will often be predisposed to favor the weaker party in such contracts, if there is ambiguity. But, baring clear violations of law, a court is not supposed to renegotiate terms to a contract if there really is no ambiguity. And here’s the actual language

NOVEMBER 2016 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

Appraise-Snail B BYY PPH HIILL H HAALLLL

“The Appraisal Institute recorded a 20 percent decline in the number of appraisers from 2007 to 2015, and the current number is less than 80,000 nationwide.”

appraisers so they are more likely to accept these appraisal assignments.” Harris noted that some local appraisers will put a little more priority in their work if they are paid rush fees, though he questions the sincerity of this offer. “Many times, it is not a rush– it is extortion,” Harris said, glumly. But bringing prices down is not easily achieved when housing demand grows more vibrant. “I don’t see any way to lower fees unless demand for appraisers slows down,” said Tallinger. Solving problems While the difficulties connected to appraisals are evident, how can the industry work to correct these issues? “There has been buzz around the industry about getting some of those regulations relaxed, but there is nothing concrete that I know of,” said Tallinger. “Getting fresh blood into the industry would help. It is becoming evident there is an undersupply of appraisers.” Tallinger’s observation is actually an understatement: The Appraisal Institute recorded a 20 percent decline in the number of appraisers from 2007 to 2015, and the current number is less than 80,000 nationwide. In May, the AQB released a first exposure draft to address new changes to the appraiser requirement criteria, with the onerous four-year college requirement being a key consideration. continued on page 97

n National Mortgage Professional Magazine n NOVEMBER 2016

“In reacting to 2007 and 2008, Congress told the Federal Housing Administration (FHA) that you cannot use licensed appraisers anymore—you can only use certified appraisers,” said John S. Brennan, director of appraisal issues at the Appraisal Foundation in Washington, D.C. “As a result, a very small population of licensed appraisers are left, doing niche work. Certified appraisers are doing the lion’s share of appraisal activity.” The combination of the new FHA regulations and the AQB’s criteria changes—which went into effect Jan. 1, 2015—seemed particularly ill-timed as the housing market began to solidify, particularly in the West Coast states, and fewer postrecession college graduates made their way into housing finance jobs. And if that wasn’t enough, the TILA-RESPA Integrated Disclosure (TRID) rule that went into effect in October 2015 added a new regulatory burden. Indeed, a recent STRATMOR Spotlight survey found appraisal turn times since TRID came into effect increased 5.7 days for purchase loans and 6.3 days for refinances—or, for those that prefer percentages, increases of 81 percent and 79 percent, respectively, from turntimes in the era before TRID took effect. The result to some markets has been more than challenging. “Rates are at a historic low, there are a ton of people refinancing, and over 100 people move to my state of Oregon every day,” said Andy W. Harris, president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc., and NAMB treasurer. “Oregon has the worst turn times in the country—it is nothing to be proud of. The average appraisal is well over five weeks, and one that occurred on the coast of Oregon took 80 days.” Kreger pointed out that a big problem facing mortgage professionals is the appraisers’ invoices. “Appraisers know their services are in demand and needed, so prices up on local appraisers,” Kreger said. “Costs for appraisals going up, especially on Veterans Administration (VA) appraisals,” stated Andrews. “The VA doesn’t use appraisal management companies (AMCs), and the appraiser has to be approved directly by them. As a result, this has raised the amounts paid to

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f you ask Fred Kreger about the appraisals environment in his California market, he will not be shy about giving a direct answer. “It sucks,” he said, with a laugh, adding, “Can I use that descriptive term?” Kreger, president of NAMB— The Association of Mortgage Professionals and vice president of enterprise production at America Pacific Mortgage in Roseville, Calif., is not alone in that diagnosis. In some parts of the country, problems with rising fees, lethargic turn-times and a shortage of appraisers is creating headaches for mortgage professionals. And while the severity of the situation has yet to reach a national level, even appraisal industry leaders realize that changes need to be made before the situation metastasizes further. Much of the problems involving today’s appraisal problems can be traced back to December 2011, when the Appraiser Qualifications Board (AQB) of The Appraisal Foundation held a public meeting to announce changes to the Real Property Appraiser Qualification Criteria. In the aftermath of the 2008 crash, the AQB sought to strengthen the educational and professional training required of appraisers. “The requirements now included a four-year college degree in finance and a two-year work history as an apprentice appraiser,” said Rocke Andrews, broker/owner at Tucson, Ariz.based Lending Arizona LLC and past president of NAMB, who added these changes were less than appealing to college graduates. “Not a whole lot of people go through four years of college just to work at $10 to $15 an hour as an apprentice appraiser.” Jon Tallinger, vice president of sales and marketing at Birmingham, Mich.-based Class Appraisal, agreed that the length of the appraiser apprenticeship was unattractive compared to other career pursuits. “You could have been an attorney or an accountant in that period of time,” Tallinger said. Complicating matters was another post-recession legislative development that dramatically changed the appraisal picture.

The Value of a Comprehensive, Completely WorkflowDriven Appraisal Process By Vladimir Bien-Aimé

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here are a three types of technologies that organizations can elect to use to automate appraisal processes. First, there are appraisal ordering systems that have fairly straightforward technology. Appraisal ordering systems are not comprehensive solutions, they just allow users to order and process appraisals. Second, valuation management platforms exist that are more inclusive and handle the bulk of the appraisal process for organizations. Third, there are valuation management platforms that provide end-to-end automation of the entire appraisal process using robust workflow-driven technology. Leveraging a valuation management platform that was engineered with the workflow in mind is the ultimate solution to completely automate the appraisal process from start to finish. While there are platforms on the market that offer some degree of workflow automation, most do not allow for the depth of configuration and implementation of business rules that automates everything. This is because they do not accompany a powerful workflow engine to facilitate cradle to grave automation. A workflow engine is a must have to successfully establish a through and through workflow-driven process that fully automates the many tasks, timelines and details that need to happen (not just partially like most appraisal ordering vendors). The engine allows appraisals to sail effortlessly and seamlessly through the entire process to completion. As a result, manual touch points are removed, data errors are eliminated, quality is ensured, turn times are sped up, costs are reduced and compliance is more effectively managed. So, here is the flow of what an enterprise-level, completely workflow-driven valuation management platforms enables and how it should work. The optimal solution manages vendors, handles appraisal ordering, appraiser assignments, tracking, accounting, delivery, reviews, selling, provides dynamic web forms, and also seamless electronic submission of compliant appraisals to the GSE’s Uniform Collateral Deliver Portal (UCDP), the FHA’s Electronic Appraisal Delivery (EAD) Portal. Add the workflow engine and everything is truly automated, not just partially. The most efficient valuation platforms integrate with third-party data analytics and review applications, as well as loan origination systems. More and more lenders and AMCs are turning to leveraging a comprehensive, custom-configured workflow that seamlessly automates the valuation management process from vendor management through delivery to the GSEs. We’re going to see a rising demand for this level of sophisticated appraisal software, especially as the regulatory environment intensifies and the cost to originate loans increases.

Vladimir Bien-Aimé is president and CEO of Global DMS. Since founding the company, BienAime’ has grown Global DMS to capture a leading share of the valuation management segment. He may be reached by phone at (877) 866-2747, email Vlad@GlobalDMS.com or visit GlobalDMS.com.

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safe, clean and beautiful place where they can learn. This helps children develop pride in their school and community,” said Brian Coester, chief executive officer of CoesterVMS. “We want to continue to show our commitment and build lasting relationships in the communities where we have representation.” The four schools were Independence Middle School, Holland Elementary School, Norview Elementary School and Great Bridge Intermediate School. “It was so great to partner with CoesterVMS this year for our 11th Annual School Makeover,” said Sue Fitzgerald, vice president of Wave City Care. “Thanks to their generous support, we were able to assist more schools than ever before with landscaping, painting, cleaning and setting up classrooms so that thousands of children could have the very best start to their school year.”

to see more black and Hispanic borrowers getting approved for mortgages, but there’s still a lot of progress that needs to be made.” CFPB Warns 44 Mortgage Brokers and Lenders of HMDA Violations

The Consumer Financial Protection Bureau (CFPB) has issued warning letters to 44 mortgage lenders and mortgage brokers. The Bureau has information that appears to show they may be required to collect, record, and report data about their housing-related lending activity, and that they may be in violation of those requirements. “Financial institutions that fail to Mortgage Rejections Still report mortgage information as Higher for Blacks and required make it harder to identify Hispanics and address discriminatory lending,” said CFPB Director Richard Cordray. “No mortgage lender that is required to report their loan data can avoid this responsibility.” The Home Mortgage Disclosure Act (HMDA), which was originally enacted in 1975, requires many financial institutions to collect data Black and Hispanic borrowers are about their housing-related lending still more likely to be denied on activity, including home purchase their mortgage applications, even loans, home improvement loans, and though rejection rates have refinancings that they originate or decreased over the past halfpurchase, or for which they receive decade, according to a new Zillow applications. analysis of the latest data from the The CFPB identified the 44 Home Mortgage Disclosure Act companies by reviewing available (HMDA). bank and non-bank mortgage data. According to Zillow’s analysis of The warning letters flag that entities 2015 mortgage applications, 22.4 that meet certain requirements are percent of black applicants were required to collect, record, and denied conventional loans—in report mortgage lending data. The 2010, by comparison, 30.5 percent letters say that recipients should of black applicants were denied. review their practices to ensure they Among Hispanic applicants, 17.3 comply with all relevant laws. The percent were denied in 2015, a companies are encouraged to decline from the 25 percent level respond to the Bureau to advise if in 2010. they have taken, or will take, steps On a wider scale that to ensure compliance with the law. encompasses all demographics, They can also tell the Bureau if they 10.4 percent of all conventional think the law does not apply to loan applications were denied in them. The CFPB, in sending these 2015, down from 14.2 percent in letters, made no determination that a 2010. legal violation did, in fact, occur. “Even though conditions have In October 2015, the CFPB improved over the past few years, finalized a rule updating the getting approved for a mortgage is reporting requirements of HMDA. still a significant barrier for some The rule will improve the quality and would-be buyers,” said Zillow type of data that is collected and Chief Economist Svenja Gudell. reported, including shedding more “Owning a home is an important light on consumers’ access to credit. way for the middle class to build Most of the provisions of the final personal wealth. It’s encouraging rule will take effect on Jan. 1, 2018.

FHA Lowers OwnerOccupancy Requirements on Condos

The most ubiquitous social media Web site is being accused of being less than social to certain demographics by enabling its advertisers to target advertising to certain “ethnic affinities.” According to a USA Today report, Facebook is the subject of a lawsuit filed in U.S. District Court for the Northern District of California that

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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Lawsuit Charges Facebook With Encouraging Housing Bias

end the illegal, proscribed uses of these functions” in its online advertising. Facebook spokesperson Facebook Genevieve Grdina insisted the lawsuit lacked merit and that the company was in compliance with both the law and well-established promotional standards. “Multicultural marketing is a common practice in the ad industry and helps brands reach audiences with more relevant advertising,” she said. “Our policies prohibit using our targeting options to discriminate, and they require compliance with the law.”

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The Federal Housing Administration (FHA) has issued a mortgagee letter that lowers the owner-occupancy requirement on condominiums from 50 percent to 35 percent. “Analysis of FHA’s insured condominium portfolio over the past few years indicates that condominium loans have a lower default rate than other FHA programs, which FHA attributes, in part, to its project-wide owner occupancy requirements,” said the agency in its letter, adding that it is possible to protect the Mutual Mortgage Insurance Fund (MMIF) while allowing lower owneroccupancy percentages “if certain adjustments are made to enhance other requirements that affect the financial stability of the project.” The FHA also cited Department of Housing and Urban Development data that determined “higher reserves, a low percentage of association dues in arrears, and evidence of long-term financial stability (as evidenced by financial documents) enable a lower occupancy percentage without unduly increasing risk to the MMIF” as support for its new requirement, which goes into immediate effect. Tom Salomone, president of the National Association of Realtors (NAR), welcomed the mortgagee letter as offering “some muchneeded relief to the market.” “Condominiums will have a much easier time getting certified by FHA, and Realtors will have more options for clients looking to purchase a condo with an FHA mortgage,” said Salomone, whose organization lobbied aggressively for the change.

accuses the company of running afoul of federal laws related to housing and employment discrimination. Facebook’s practice of enabling advertisers to target audiences included wording that said, “EXCLUDE people who match at least ONE of the following”— which cited African American, Asian Americans and four categories of Hispanics. The plaintiffs in the lawsuit, Karen Savage of New York and Victor Onuoha and SuzanneJuliette Mobley of Louisiana, charged Facebook with being in violation of the Fair Housing Act and Title VII of the Civil Rights Act of 1964 and called on the company “to

Travel and En Lunches With he title of this article is “Travel and Entertainment: Lunches With or Without Martinis.” How much do you believe in these methods to build loyalty? In the past, I’ve had the opportunity to interview prospective salespeople who have heard that the mortgage business is a potentially lucrative way to earn a living. They sometimes tell me that they expect to receive a weekly or monthly entertainment reimbursement, after which I tell them they are talking to a wall. Hot dogs … yes! A ballgame … yes! But most other forms of entertainment … I don’t think so! Over the years, it has been my experience to have seen every level of entertainment paid to obtain business. When my father brought me into the business, it was common to meet with his referral sources at Embers restaurant, near Camden, N.J. I would watch him or his customers order drinks, a juicy, rare porterhouse steak, followed by after dinner aperitifs, round after round after round after round. I often caught my dad pouring a drink into a potted plant, so that he would appear to have kept up with his client. All-expense paid trips to Puerto Rico were common, and those parties in Newark … they were legendary. Is all of this necessary to get business? Not in my mind. Today, so much seems different, yet so much remains the same. The following account of the truth was never, nor never tried by my father. This past weekend, one of my sales trainees tried to develop business as he had been instructed. He agreed to host an open house for a new listing by one of his real estate brokers. “Great,” he thought, “I’ll spend about $50, and probably see about 30 real estate professionals.” This idea is one of the simplest ways to make an impact with a large number of people, and at the average cost of a little more

The

Mortgage

Godfather

Entertainment: With or Without Martinis than a dollar apiece. So he went to the local sub shop, bought a three-foot Italian hero, enough soda to quench the thirst of the local contingent of the national guard, and made a flyer describing the property for sale with four possible financing options. Of course, he made 100 flyers, because he didn’t want to run out. Now armed with his flyers, Italian hero, business cards, soda, pressed

“Today, so much seems different, yet so much remains the same.” suit and shined shoes, he showed up a half-an-hour early for the open house. His realtor greeted him with genuine glee. Here was the savior, bringing food for the masses, and saving the realtor $50! They waited and waited and waited. A crowd of five brokers showed. Demoralizing? Not on your life! Depressing? No way! Non-productive? Never! Because this student of the mortgage profession did as taught. He made the best of what would, by many, be a disaster. He made friends with the friend of his real estate agent, who just happened to work in another real estate agency. He’s already seen that broker again, and is setting up a seminar that his boss is going to attend with him. One of the people who stopped by the open house was a prospective buyer, whom he had engaged with in conversation, pre-qualified and introduced to the real estate broker, along with the prequalification worksheet. He did what we talk about all the time … he thought! He has been in touch with the

BY RALPH LOVUOLO SR.

prospect, and had completed an in-file credit report, and restated the qualifications to his real estate agent friend. What a job. Great job. Great day. Congratulations! Do it … don’t just think about it.

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

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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.

Freedom Mortgage Continues Growth With Strong Correspondent Lending Program

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time associates across the enterprise. The asset purchase is expected to close in January 2017. HomeBridge should become the sixth largest non-bank mortgage lender for overall production. In addition, the U.S. Department of Housing & Urban Development (HUD) listed Prospect and Freedom Mortgage Corporation HomeBridge first and second, has announced that it is seeing a respectively, in its year-end 203(k) significant boost in its expanded endorsement summary report. correspondent program. Further HomeBridge will become the gains are expected following the nation’s largest renovation lender, addition of the Ginnie Mae PIT with more than double the program to Freedom Mortgage’s production of the nearest co-issue correspondent program, competitor. which also includes Fannie Mae HomeBridge CEO Peter Norden, and Freddie Mac. The company’s President Joel Katz and Chief co-issue program provides another HomeBridge Financial to Operating Officer Joe Sheridan will option to small and mid-tier continue to lead the business. Acquire Operating Assets of lenders to fit the unique needs of “In today’s mortgage market, Prospect Mortgage their business. Freedom Mortgage size, capital, liquidity and product launched the co-issue program in diversity are critically important to February to support the continued long-term growth and success,” growth of its correspondent said Norden. “Specifically, our lenders. The company has access to capital will improve, continued to broaden its offering impacting our funding capabilities to include both Fannie Mae and HomeBridge Financial Services Inc. and our ability to increase our Freddie Mac, as well as Ginnie presence in existing and new has announced the signing of a Mae. markets. We will remain an definitive agreement under which Freedom Mortgage’s entrepreneurial, flexible and nimble HomeBridge will purchase the correspondent program was mortgage banker by effectively operating assets of Prospect further expanded in 2016 with the balancing profitability and volume, Mortgage LLC from Prospect acquisition of JPMorgan Chase’s while continuing our commitment Holding Company LLC. The asset USDA Rural Housing platform, to operating in compliance with the purchase consists primarily of the completed in July. Based on the current mortgage lending loan production platform. As a successful transition, the USDA regulatory landscape.” result, HomeBridge will become unit recently purchased its highest one of the largest non-bank Michael Williams, Prospect’s volumes of the year from Chairman and CEO and the former mortgage lenders in the country, correspondent lenders catering to President and CEO of Fannie Mae, originating loans nationwide, with this specialized market. Freedom will remain with HomeBridge in an approximately 900 retail mortgage Mortgage is both the largest advisory role for the immediate loan originators in nearly 250 FHA/VA lender and the largest future. branches. HomeBridge will USDA lender in the U.S. “This arrangement creates a true continue to operate its two “The addition of Ginnie Mae to loan production powerhouse that wholesale divisions, ultimately the co-issue program is a very should become the nation’s employing more than 3,000 fulllogical way to empower our correspondent lenders to grow and achieve greater profitability,” said David Sheeler, executive vice president of Freedom Mortgage Correspondent Lending and Servicing Finance. “This service offering speaks to the diversity, strength and stability of the Freedom Mortgage organization, as well as to our unwavering focus on our clients and their borrowers. In our continued mission to be the premier investor in the industry, we pride ourselves on our ability to provide a broad array of services and innovative solutions to our clients while remaining flexible in today’s market environment. We are focused on long-term partnerships and will be proactive in catering to our clients’ needs in all market environments.”

premier non-bank mortgage company,” said Williams. “I expect a smooth transition because of the similarities in corporate cultures at HomeBridge and Prospect, including strong leadership, a talented workforce and a profound commitment to excellence in everything we do.” In addition, Doug Long, Prospect’s president of National Lending, will take an executive vice president role with HomeBridge and manage the existing Prospect branch operations that are moving to HomeBridge. Seroka and NAHREP Consulting Form Professional Alliance

Seroka, a certified brand development, digital and strategic communications agency, and NAHREP Consulting Services (NCS), the consulting arm of the National Association of Hispanic Real Estate Professionals (NAHREP), have formed a strategic alliance whereby both firms’ professional services will be made available to each other’s clients and the mortgage industry. NAHREP is the nation’s largest minority real estate trade association with more than 26,000 members and 50 local chapters. Seroka Brand Development provides brand development, public relations, digital and strategic marketing services to the mortgage industry. NCS provides Hispanic marketing consulting, cultural competency training, diversity and inclusion education, and Hispanic marketing fundamentals to the mortgage industry. Both firms are preferred partners of The Mortgage Collaborative, a network of leading

Velocify Reports Increased Usage and Growth

company not only identified a great niche, targeting hard-to-fund loans, they are executing their strategy extremely efficiently leveraging Velocify. Velocify has enabled First Direct Lending to grow, while nimbly adapting to changing market conditions. “Since day one, we’ve been focused on growth opportunities within our niche,” Eshelman said. “As we’ve expanded, Velocify has been with us every step of the way, from helping us make resource decisions related to demand in new states, to enabling us to be more agile as the market shifts from refinance to purchase.”

Velocify’s latest offering, Velocify LoanEngage, brings together automated marketing, lead management, and referral partner management features into a single platform, bridging the gap most retail lenders experience between their marketing and sales efforts, while enhancing visibility, compliance, and productivity in the mortgage process. “As the purchase market heats up, mortgage lenders want to put more people in homes and give borrowers a great mortgage experience. Yet today’s retail continued on page 48

n National Mortgage Professional Magazine n NOVEMBER 2016

Velocify has announced that the number of overall mortgage users of the company’s sales acceleration platform has increased by 25 percent since the beginning of 2016, amid evidence that growing numbers of lenders are investing in sales technology. The company’s growth coincides with the results of a survey of 500 mortgage professionals conducted earlier this year. The survey, titled “Growth in a Changing Mortgage Market,” found lenders that made greater investments in marketing and sales technology, including the type of lead management, sales acceleration, referral management, and marketing automation found in the Velocify platform, were more likely to experience high growth.

“Mortgage organizations that are leveraging Velocify are outselling their peers and taking advantage of new opportunities as market dynamics shift,” said Chris Backe, Velocify’s director of financial services. “Our customer, First Direct Lending, is a prime example. In the two and a half years since founding their company and investing in Velocify from the start, they have grown from five loan officers to more than a 100 loan officers licensed in 26 states.” According to First Direct Lending Vice President of Marketing Mike Eshelman, the

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mortgage providers and vendors. “This alliance is a natural evolution of our vision because it connects our clients with the cultural insights needed to thrive in today’s mortgage market,” said Pat Seroka, CEO and certified brand strategist for Seroka. “At the same time, we look forward to assisting NCS’s clients with the strategic marketing support they’ll need to effectively target this important demographic.” The alliance was formed, in part, as a tacit acknowledgement of the industry’s minority compliance requirements, and to help the mortgage industry reach Hispanics. According to the 2015 State of Hispanic Homeownership report, for the fifth consecutive year, Hispanics have made significant homeownership gains. Last year, Hispanics accounted for 69 percent of the total net growth in U.S. homeownership; and they were the only major racial group to increase their homeownership rate in 2015. “At a time when the Mortgage Bankers Association (MBA) is increasing its focus on diversity and inclusion as showcased by its recent appointment of its first Hispanic Chairman, Rodrigo Lopez, it is fitting we fully recognize the need for diversity and inclusion services to serve the Hispanic homebuying community, the most rapidly growing segment of homebuyers in the U.S.,” said Maria Zywiciel, president of NAHREP Consulting. “To that end, Seroka will assist us in expanding our offerings by providing top-notch PR, social, digital and other communications to our customers.”

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Caliber Wholesale’s success is built on a full array of conventional, government and Portfolio loans, combined with our reputation of providing our business partners with the highest level of service.

NOVEMBER 2016 n National Mortgage Professional Magazine n

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DocMagic delivers the best end-to-end Document Preparation, eDelivery and Compliance Solutions in the industry. Over 10,000 customers in fifty states rely on us for innovation, quality, and service.

Celebrating over 1 billion transactions, Ernst Cost2Close solutions process guaranteed fees with unparalleled speed and accuracy, alerting the lender and the settlement agent of fee changes in real time.

Citadel Servicing Corporation

First Guaranty Mortgage Corporation

15707 Rockfield Blvd, Ste 320 Irvine, CA 92618 949-900-6630 www.citadelservicing.com

1900 Gallows Road, Suite 800 Tysons Corner, VA 22182 800-296-2275 fgmcorrespondent.com

Citadel Servicing is committed to the emergence of Non-QM/Non-Prime lending. Pioneering the most innovative lending programs which include Alt Doc, life events (FC, BK, and SS), $3mil loan amounts and low fico scores.

FGMC: Correspondent, Wholesale & Retail + Warehouse Lending. Full spectrum of lending products and services nationwide.

Class Appraisal

Freedom Mortgage Wholesale Division

770 S. Adams, Suite 300 Birmingham, MI 48009 866-333-8311 www.classappraisal.com

10500 Kincaid Drive Fishers, IN 46037 844-668-3830 www.freedomwholesale.com

We’re an award winning Appraisal Management Company focused on building positive relationships with our business partners. We are revolutionizing the way business is done with our new and exciting technology.

#1 FHA/VA Lender (IMF, 2Q16) – offering competitive products and pricing (Conventional, FHA, VA, USDA, Jumbo & more), best-in-class service & relevant industry training. Choose Freedom to Grow.

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United Wholesale Mortgage

1265 Corona Pointe Court Corona, CA 92879 855-PRMG-FAN! (855-7764-326) www.prmg.net

1414 E. Maple Rd. Troy, MI 48083 800-981-8898 www.uwm.com

Paramount Residential Mortgage Group, Inc. (PRMG) is one of the largest privately held national mortgage bankers and residential home lenders, helping homeowners purchase homes across the U.S.!

REMN Wholesale 194 Wood Ave. S. 9th Floor 732-738-7100 www.remnwholesale.com Iselin NJ, 08830 REMN Wholesale provides same day turn times every day on new file submissions. With a commitment to the broker experience, REMN is leading the way as a preferred partner in the mortgage industry.

UWM is a forward-thinking, fast-moving and innovatively inspired lender that is always working to champion mortgage brokers and change the game with the latest and greatest technology and services.

coming in december 2016

are you nominated?

Secure Insight 100 Lanidex Plaza, Suite 1201 Parsippany NJ 07054 877-758-TRUST (7878) www.secureinsight.com

TagQuest Inc. 711 Medford Center # 240 Medford, OR 97504 888-717-8980 www.tagquest.com

time of year again! Holiday Networking Parties dates, locations and agendas!!!

HOLIDAY NETWORKING PARTY

Don’t miss the opportunity to network and be part of history at the largest loan originator Holiday Networking Parties! For more information, see pages 52 & 53!

2016

The only thing better than a closed loan is a FREE party! ™

n National Mortgage Professional Magazine n NOVEMBER 2016

TagQuest Inc. is a full service marketing firm offering the most up-to-date, cutting edge marketing solutions for the ever changing Mortgage Industry. Proudly serving our clients for over a decade.

We are seeking nominations from our readers for National Mortgage Professional Magazine's "40 Under 40" feature, slated to appear in our December 2016 edition. Anyone who is under the age of 40 and has had a major impact on the industry can qualify for this feature. This could be through innovation, association participation, sales force automation, community activism, management techniques, technology or any other significant method that has influenced our industry. We would need a short, three-line bio on the nominee, along with a color photo and company contact info to complete the profile. To nominate yourself or someone else, visit https://nmpmag.wufoo.com/forms/nmps-40-under-40-2016/

NationalMortgageProfessional.com

A vendor management solution. The first settlement agent vetting firm in the industry today offers a host of reliable and affordable risk tools for banks, mortgage lenders and credit unions.

Lykken on Leadership

Six Characteristics of a Great Business Process BY DAVID LYKKEN

NOVEMBER 2016 n National Mortgage Professional Magazine n

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s many who know me will recall, I’m a huge fan of Simon Sinek’s book, Start With Why. Many leaders in organizations within the mortgage industry and beyond seem to get it backwards when it comes to how they design their organizational values. The first thing that many people in business focus on is the product. The product, it would seem, is what people are buying, so that is where the primary focus of the business should be. Only after a product is perfected should we worry about how we’re going to bring it to market or why we are doing it in the first place. In Sinek’s leadership philosophy, great leaders do the exact opposite. Instead of starting with the product, they only think about the product after the purpose and the process have been defined. Before bothering with what we’re going to sell, we first need to determine why we are in the business we’re in and how we’re going to live out that purpose in our everyday business activities. Then, we can determine the product that arises out of those values. I’ve spent a great deal talking about the “why” of the business, the purpose for which organizations exist. And I certainly think this is something that needs to be ironed out before moving forward. So, if you’re reading this and you don’t

“Only after a product is perfected should we worry about how we’re going to bring it to market or why we are doing it in the first place.” really know why you’re in the business you’re in, go back to the chalkboard and figure that out first. In this article, however, I would like to talk about “how” portion of Sinek’s philosophy. What sort of process do we use in order to fulfill the purpose we’ve determined ourselves to have? The process is where the rubber meets the road, where the theoretical becomes practical, and where the purpose gets implemented in the everyday work of the enterprise. In this piece, I’d like to point out six characteristics of a great business process that must be taken into consideration as you’re deciding what you’re should look like. 1. Easy to understand The first thing to keep in mind when designing a business process is the importance of simplicity. Having a complicated business process, for all intents and purposes, is not much better than having no specified business process at all. When your process has too many pieces that aren’t

connected in any systematic fashion, people tend to ignore protocol. Tasks may go unfinished because people assume that others are responsibilities. Projects may be completed out of sequence. There are many things that can happen when people don’t understand how the process works. If you can’t draw your entire process out on a single sheet of paper, then chances are it is too complicated. Of course, details can be added to clarify certain steps within the process, but the general framework must be easy to understand and accessible to everyone in the organization. When people can see clearly how their job plays into the bigger picture, they’ll make much fewer mistakes. Simplicity is key. Before all else, make the process understandable. 2. Non-repetitive The second important thing to remember when designing your business process is to keep an eye out for repetition. A great business process will achieve the

optimal efficiency. When you don’t have a solid business process in place, you generally have many different people performing the same tasks. Building a clear business process can eliminate these inefficiencies and free up people to work on other tasks. Therefore, simply bothering to design a business process in the first place will probably eliminate a great deal of repetitive tasks. However, if you aren’t careful, repetitive behavior can be built into the business process you are creating. So, whenever you are introducing a task in the system, always ask, “Is this already being done somewhere else?” The more efficient your business process is, the better it will be. 3. Revenue generating Another important item to consider when building your business process is how effective your activities are. Just because you are eliminating the repetitive tasks and becoming more efficient, that doesn’t mean what you’re doing is actually working. There is really no sense in being

extremely efficient at producing no results! At the end of the day, profit is the fuel that keeps the enterprise going. An important question to ask when creating your workflow is whether or not it is profitable. If the activities you are engaging in don’t make money, then they cannot be sustainable. Whenever you are considering adding a certain task to your process, think about the effect it will have on your bottom line. Is it a big effect? Then, you may want to add it in. Is the effect negligible? Then, you may want to reconsider. A great business process will always be able to keep money flowing into the organization.

6. Adaptable One final characteristic of a great business process is perhaps more important than any of the others. You know what they say:

contingency plans; it will have the foresight to adapt when new information enters the model. Everything changes— will your process be able to change with it?

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

n National Mortgage Professional Magazine n NOVEMBER 2016

5. Employs the best available technology Another important factor in creating a great business process is making use of technology. Until you have a clearly defined business process, you won’t even know what kind of technology you need. Many organizations end up spending thousands of dollars on technology that isn’t really helpful, because they haven’t first laid out their process to see where it might fit. Once you have a business process, you’ll be able to see what kind of technology you need to invest in and in which areas it will be beneficial. Certainly, though, there will be areas that need the technology. A great business process incorporates the most relevant technology to make the process work more smoothly and competitively.

chips into the expectation that they will work out. But none of us can predict the future—things are always bound to go at least a little differently than we expect. A great business model will have

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4. Efficient with human resources A great business process puts the best people in their best places. Oftentimes, people in any given organization will end up in roles for which they aren’t well suited. When you don’t have a high-level, overarching map of how your organization works, then it’s hard to tell if you’ve got your “aces in their places.” Once you get employees into the positions where they can do their best work, you will then be able to identify areas that need improvement and initiate training programs to bring those areas up to speed. None of this will be possible without a solid business process.

“Change is the only constant.” In business, we must make plans but, on the other hand, we cannot have realistic expectations that they won’t change. The same can be said of a business process. The process should not be so rigid as to collapse when new regulatory, economic, or technological changes occur. The system must be flexible enough to account for the inevitable change. A problem that many leaders face when devising plans and creating business processes is unrealistic expectations. We make these grand plans and put all of our

Industry Updates: November 2016 CFPB Approves the Use of Revised URLA and Collection of Disaggregated Categories By Gavin T. Ales

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n Sept. 29, 2016, the Consumer Financial Protection Bureau (CFPB) published a notice pursuant to the Equal Credit Opportunity Act (ECOA) concerning the use by creditors of the new FNMA/FHLMC Uniform Residential Loan Application (URLA) and its approval for the creditor, at its option, to permit applicants to self-identify using disaggregated ethnic and racial categories as instructed in appendix B to Regulation C, as amended by the 2015 HMDA final rule (2015 HMDA rule), at any time from Jan. 1, 2017, through Dec. 31, 2017. Under the 2015 HMDA rule, financial institutions will be required to permit applicants to self-identify using disaggregated ethnic and racial categories beginning Jan. 1, 2018. However, before that date, such inquiries will not be required by Regulation C or allowed under Regulation B § 1002.5(a)(2), and, therefore, creditors would be prohibited by Regulation B § 1002.5(b) from requesting applicants to selfidentify using the disaggregated ethnic and racial categories. However, with the CFPB’s approval, a creditor that uses the new URLA without any modification that would otherwise violate § 1002.5(b) through (d) would now act in compliance with § 1002.5(b) through (d). In addition, creditors are now free, at their option, to permit applicants to self-identify using disaggregated ethnic and racial categories as instructed in appendix B to the 2015 HMDA rule. During this period, a creditor adopting the practice of permitting applicants to selfidentify using disaggregated ethnic and racial categories pursuant to appendix B of the 2015 HMDA rule shall not be deemed to violate Regulation B § 1002.5(b). Also during this period, a creditor adopting the practice of permitting applicants to self-identify using disaggregated ethnic and racial categories as instructed in appendix B of the 2015 HMDA rule shall also be deemed to be in compliance with Regulation B § 1002.13(a)(i) even though applicants are asked to self-identify using categories other than those explicitly provided in that section. The CFPB is issuing its approval pursuant to a notice in the Federal Register (the “Notice”) to permit applicants to selfidentify using disaggregated ethnic and racial categories as instructed in appendix B to the 2015 HMDA rule, because it believes significant benefits would result. Some of the benefits mentioned in the CFPB’s Notice include allowing for an increased implementation period that reduces creditors’ compliance burden and furthers the purposes of HMDA and Regulation C and facilitating industry adoption of selfidentification using disaggregated ethnic and racial categories.

heard on the street lenders have a ton of potential revenue that is locked down by inefficiency,” said Backe. “With Velocify LoanEngage, we are truly transforming sales and marketing operations within mortgage organizations, helping our customers tap into unrealized revenue.” WFG National Title Announces the Acquisition of Columbia Title

having opened several branches this year with plans to open three additional branches in the western U.S. in the fourth quarter. Industry veteran Femi Oriogun will serve as branch manager for the new location. “Femi has an excellent track record and is the kind of mortgage professional who will use his extensive experience to benefit both consumers and mortgage professionals,” said Daniel Jacobs, executive vice president of MiMutual Mortgage. “As MiMutual continues to expand its geographic reach, we look for talented leaders who understand our culture of service and our commitment to the community and believe that Femi is an excellent addition to the MiMutual team.” Oriogun brings more than 20 years of mortgage industry experience to the position, which will help him in establishing MiMutual Mortgage as the go-to source for quality customer service. Oriogun was previously vice president at Finance of America in its Consumer Direct Division. He previously owned and operated his own mortgage company for a number of years. “There is a significant opportunity to bring MiMutual’s core values and high level of service to a market that is currently lackluster in this regard,” Oriogun said. “Being able to share my knowledge and experience with a company that places the upmost importance on customer satisfaction, distinctive problem solving and commitment to personal growth will be very rewarding. These are characteristics I believe will be vital to the success and impact of this new branch.”

WFG National Title Company of Clark County WA LLC, d/b/a WFG National Title, a Williston Financial Group company, has acquired the business of Vancouver, Wash.based Columbia Title Agency through an acquisition of all Columbia Title’s assets. WFG has also announced that it has proudly hired all employees from Columbia Title at the time of the acquisition. Columbia Title’s team and business come into the WFG family with two existing office locations in Vancouver, Wash. According to WFG Chairman and CEO Patrick Stone, the move “is a natural progression of WFG’s growth in the Northwestern states. We have seen tremendous success in this market, especially with our local direct operations. Columbia Title, which has a long history of client focus and service, is a powerful match with WFG’s operations.” Dennis Gish, county manager, formerly of Columbia Title, will manage the two Vancouver offices. “We look forward to operating under the WFG culture,” said Gish. “We’ve also operated under the philosophy that absolutely nothing comes before the client. So, we expect our existing customers will New American Funding continue to enjoy superior service Continues Expansion With as well as benefiting from an influx New Missouri Branch of client-focused resources that comes from working with one of the nation’s leading underwriters.” MiMutual Mortgage Opens New Eden Prairie Branch

Gavin T. Ales is chief compliance officer with Torrance, Calif.-based DocMagic Inc. He may be reached by phone at (800) 649-1362, ext. 6446 or e-mail Gavin@DocMagic.com.

SPONSORED EDITORIAL

continued from page 43

MiMutual Mortgage, the national retail channel for Michigan Mutual Inc., has announced the opening of a branch in Eden Prairie, Minn., a suburb of Minneapolis. MiMutual is growing its national footprint,

New American Funding has announced that it is expanding its Mid-Western territory with a new Missouri location in St. Robert, Mo. This full-service branch will meet the residential mortgage needs of local consumers, and real estate agents who are facilitating home loans in Fort Leonard Wood and surrounding communities of Missouri. The location will offer a variety of products, including continued on page 50

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Ready to take control? Visit us at www.nycbmortgage.com or Email potentialclient@mynycb.com to learn more. This information is for use by current and prospective Clients of New York Community Bank, doing business as NYCB Mortgage Banking, and should not be distributed to or used by consumers or other third parties. ÂŠ2016 New York Community Bank. All Rights Reserved.

n National Mortgage Professional Magazine n NOVEMBER 2016

NYCB serves correspondent lenders, brokers, community banks and credit unions throughout the nation with a team of highly experienced sales and service professionals, superior underwriting and a comprehensive product menu.

Powerful New Strategies for Today’s Top Lenders

NOVEMBER 2016 n National Mortgage Professional Magazine n

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ultichannel marketing is the use of several marketing platforms to interact with potential customers in several ways within the same marketing campaign. For example: Direct Mail + Direct Mail Voice + PURL + E-mail Campaigns would be a multi-channel marketing campaign. Everyone gets a letter. Some get an additional follow-up phone call, and others will also get an e-mail or two. Multichannel marketing involves increasing the points of contact with customers, and reaching additional customer segments by providing access points that they prefer. Think of it this way, if you only had one prospect to work at a time, wouldn’t they get the most personal sales approach from you and wouldn’t you close at a much higher rate? Multichannel marketing does just that, it gives the prospect a personal experience throughout the sales process, and you don’t have to limit yourself to just one prospect at a time. It’s now possible for you to send a mail piece to someone. Send them a voicemail just before your mail hits, letting them know who you are and why you are reaching out to them. At the same time, you can also get ads from your company showing up on their favorite social media site both at home and work on their computers and on their cellphones when they are messaging with friends or family. Add an e-mail to the mix and you have four ways of contact which will produce four times the results. And because they all have common content, you will build credibility into your offer, your company and yourself. You have the ability to get a very specific audience interacting with you and your company. Walk them comfortably and exclusively through your sales process and into your client follow up system after they have done business with you. TagQuest Inc. Client Spotlight: Jason H., Maryland Mortgage Lender l l l l l

Program: Mortgage Insights Past clients being monitored: 2,500 Match rate: 1.8 percent Applications taken: 18 Closed loans: Six (with 12 more in the pipeline)

Highlights of the campaign that worked well for Jason … “As a last line of defense to protect our past clients, knowing when they’ve had their credit pulled for a mortgage is the best time to call.” Highlights that could appeal to others … “An inexpensive addition to our follow up and the ROI from it is higher than any other follow up system or marketing campaign.”

TagQuest Inc. is a full-service marketing firm specializing in marketing for the mortgage industry. Call (888) 717-8980 or visit www.tagquest.com.

IMAGINE • INNOVATE • SUCCEED SPONSORED EDITORIAL

heard on the street purchase and refinance loan options. To lead this expansion, New American Funding has enlisted the expertise of mortgage industry veteran Kevin Gibbs who will serve as branch manager. “This is an exciting chapter for New American Funding and I could not be more thrilled to play a role in this new venture,” said Gibbs. “The company genuinely cares about what it is doing, cares about its workforce, and its customers; so I’m extremely blessed to be part of such a decorated, dynamic organization that’s poised to have tremendous success in serving communities throughout Missouri.” This is the fifth Missouri branch for New American Funding, which also has locations in St. Louis, Lee’s Summit and Nixa. First American Acquires TD Service Financial

First American Financial Corporation has announced its acquisition of TD Service Financial Corporation, a provider of technology and services to the mortgage banking industry that specializes in post-closing services and document management. TD Service Financial Corporation is the parent company of several subsidiaries that will be included in the acquisition, including TD Service Company, Security Connections Inc. (SCI) and TD Quality Control Services. TD Service Financial and its subsidiaries will become part of First American’s Mortgage Solutions division, a leading provider of comprehensive solutions for residential lenders and servicers covering the entire loan spectrum. First American Mortgage Solutions offers a range of products and services designed to help perfect loan files. The acquisition expands and enhances the group’s post-closing and document management capabilities, broadening First American’s ability to serve the lender, servicer and investor communities. “We’re excited to welcome TD Service Financial Corporation to the First American family. Both companies have a long history of dedicated service to our clients and commitment to our industry,” said Dennis J. Gilmore, chief executive officer of First American Financial Corporation. “We share the same

continued from page 48

passion for delivering superior customer service and similar core values rooted in putting people first, which ensures this move will benefit the customers and employees of both companies.” TD Service Financial customers will benefit from enhanced postclosing technology and services augmented by First American’s fraud detection, loan quality and compliance analytics, and numberone industry position in real property data coverage and content. “This union establishes a best-inclass, post-closing suite of services that further broadens our end-toend offerings and ability to support our customers across the full life cycle of a mortgage loan,” said Kevin Wall, president of First American Mortgage Solutions. Altisource Origination Services to Rebrand as Trelix

Altisource Portfolio Solutions SA has announced the rebranding of Altisource Origination Services (AOS) to Trelix. The new Trelix brand will represent an opportunity to help lenders mitigate risks and reduce costs through customized mortgage fulfillment solutions and the upcoming launch of its proprietary technology. The Trelix experience and proprietary technology can help mortgage market participants of all sizes increase efficiency and improve profitability. The Trelix suite of industryleading mortgage fulfillment offerings includes: Processing; underwriting; loan due diligence; quality control; and CastleLine Certification, CastleLine proprietary risk management process to help clients obtain Certified Loan insurance. “The rebranding to Trelix is another important step in the evolution of our story as we continue to invest in technology to address the evolving and increasingly more complex needs of mortgage lenders and investors,” said Jon W. Gerretsen, president of the Trelix business. “We are dedicated to building successful long-term relationships with our clients and will continue to deliver best-in-class solutions and services.” Trelix will also be launching a continued on page 58

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- -Please visit our website at ww ww.freedommortgage.com/state-licensing ffo communic e to imply that any of our loan n products willl be offfe ered by orr in conjunction with cation is sent only by Freedom Mort o gage Corporation and is not intended HUD, FHA, VA, the U.S. government orr any fe federal, state orr locall governmenta all body. This inffo ormation is intende ed ffo or use by mortgage brokers and otherr industry proffe essiona t to or solicitation of a co onsumer. For additionall inffo ormation n about Freedom als. This is a business-to-business communication and is not an advertisemen e Mortgage Corpor C ation, S Consumer Access page at: nmlssconsumeraccess.or tion please visit the NMLS ess org. g Equall Housing Lender. ÂŠ Freedom m Mortgage Corporation. Alll rights reserved.

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Tuesday, December 6, 2016

Thursday, December 8, 2016

Thursday, December 15, 2016

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12:30-1:45 Success Secrets to a 100% Referral Based Purchase Business Presented by Ron Vaimberg, nmpU Executive Director and Head Coach. Sponsored by Quicken Loans

2:00-3:15 Surprise! You May Not Be As Good As You Thought You Were Presented by Frank Garay of National Real Estate Post. Sponsored by Angel Oak Mortgage Solutions.

2:00-3:15 Understanding And Adapting To A Changing Market Presented by Brian Stevens of National Real Estate Post. Sponsored by Angel Oak Mortgage Solutions.

3:30-5:00 Certified Military Home Specialist Workshop Presented by Beverly Frase of Boots Across America, sponsored by REMN Wholesale Completing this workshop qualifies you to take the exam online post event to become a Certified Military Home Specialist, for which you will receive a certificate upon passing the exam. All at no cost to you!

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12:30-1:45 “Knock Out Your Competition” Presented by Barry Habib, CEO of MBS Highway. Sponsored by MBS Highway. 2:00-3:15 Success Secrets to a 100% Referral Based Purchase Business Presented by Ron Vaimberg, nmpU Executive Director and Head Coach. Sponsored by Quicken Loans 3:30-5:00 Renovation Lending Workshop Presented by Damon Richardson, Renovation Lending Specialist at REMN Wholesale. Sponsored by REMN Wholesale. 5:00-8:00

Holiday Networking Party

Holiday Networking Party THANK YOU SPONSORS

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THANK YOU SPONSORS

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THANK YOU SPONSORS

NMP Mortgage Professiona Brian Vieaux National Sales Director of Wholesale Lending, Flagstar Bank BY PHIL HALL

rian Vieaux joined Troy, Mich.-based Flagstar Bank in 2012 as senior vice president and head of the retail mortgage origination channels. Three years later, he was named national sales director for wholesale lending. This year marks Vieaux’s 25th year in the mortgage profession. Before joining Flagstar, he held senior management positions with IndyMac Bank and CitiMortgage. In 2005, he attained the Mortgage Bankers Association’s (MBA) industry designation of Certified Mortgage Banker (CMB). National Mortgage Professional Magazine recently spoke with Vieaux about his work in the mortgage world.

How did you first get involved with mortgage banking? Was this your original career path? It was a job I fell into. After I graduated from college, I got married and was working for a home builder I had worked for through school. I was a laborer and didn’t have any benefits—I didn’t even know what they were. After I got back from my honeymoon, my new father-inlaw asked me how my benefits were. I said, “Benefits? What are they?” He said, “You married my daughter, and she needs to get off my plan.” So I circulated my resume and ended up with a job—with benefits—at Fireman’s Fund Mortgage, which became Source One and was eventually sold to CitiMortgage. I’ve now been in the business 25 years. How did you first become associated with Flagstar? I knew Flagstar as a competitor and as a customer of the company I worked for. I knew the people and thought highly

of the company as a formidable competitor. In your opinion, what makes Flagstar stand out from the competition? We’ve been around since 1987 and have managed through every conceivable business cycle. Not a many companies can say that. Customers sense that we’ll always be there for them, and that’s important. We have technology that’s consistent and reliable. In fact, many of our customers have built their internal processes around Flagstar’s technology, and that’s important, too. I spend a lot of time with customers, and they tell me, “I can call my account executive at 10:00 p.m. on a Friday, and he or she answers my call.” That’s most important of all. It’s the people that really set us apart. How do you see the current state of the mortgage market? We’re coming off a period of

many years where our industry has been under fire. We don’t know what the new [presidential] administration will mean from a regulatory perspective. Sure, regulatory relief would be welcome. But if relief doesn’t come, Flagstar is fine. We know how to operate in the current environment and have the regulatory and compliance infrastructure to handle whatever comes our way. How has Flagstar been able to keep on top of the many regulatory changes that have taken place in recent years? Internally, we have people who are experts in fair lending, HMDA, as well as the newer TRID regulations. Externally, we leverage relationships with our peers, other lenders, correspondent investors, as well as involvement with industry groups such as the MBA to stay abreast of regulatory changes.

In your opinion, what can the industry do to encourage young people to pursue careers in mortgage banking? I’ve seen statistics showing the average age of loan officers at about 54-years-old and of appraisers at about 58. So, the industry does need to do things to attract younger people. I think it gets down to companies building processes for college grads to come in and learn and train. Flagstar has a summer intern program for the major areas of the bank, including mortgages. Last summer, we had about 60 interns, so we are definitely giving exposure to career opportunities in the field. The MBA recognizes the need to attract and grow talent and has an excellent future leaders program. We need to continue to support programs like these. What do you look for when hiring new recruits for your company? We tend to look for a track

onal of the Month

record of success—people who have an established book of relationships. But that doesn’t mean we wouldn’t take a chance on someone with no experience who has the right skills to manage major relationships. Looking back on your work in the industry, what do you see as your greatest accomplishments? It gets back to people, to seeing people I’ve recruited or hired be successful. Some are CEOs and CFOs in our industry. Others manage national sales teams or are responsible for credit or risk units. Some are customers and some are competitors. It’s been really rewarding to see all of their success. What do you see as the nearterm future for the housing market? It’s a seller’s market with a shortage of inventory nationally. It’s hard to believe that rates could go much lower,

so at some point, they are going to rise. That should lead to a more normalized market with closer to 70 percent purchase and 30 percent refi, instead of the inverse that we’ve been living with. The agencies seem pretty bullish on housing starts in 2016 and 2017, so in the near term, things look good. On the technology side, I think the industry as a whole needs to continue to find ways to speed up the loan process and put more knowledge, information and control with consumers. But even in a more automated environment, I think there’s a role for loan officers. The knowledge and counseling that a professional loan officer provides consumers—coupled with technology and automation—is still the best recipe for customer satisfaction. Outside of work, how do you spend your leisure time? My oldest son was recently drafted as a pitcher for the

“The knowledge and counseling that a professional loan officer provides consumers—coupled with technology and automation—is still the best recipe for customer satisfaction.” Pittsburgh Pirates, so my wife and I have spent time following him and watching him play. Also, we are season ticket holders for the Michigan State

Spartans and try to take in as many games as we can. And when I have time, I enjoy helping out coaching my local high school football team.

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

Types of Lead Generation Question: We are thinking about obtaining leads from an online lead generation service. In the process of reviewing our marketing campaign, it seems pretty clear that there are different types of lead generators. What are the different types of lead generators? What are some pitfalls? Also, what is a lead?

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Answer For the most part, the Federal Trade Commission (FTC) has broad jurisdiction over lead generators. The FTC has used its authority to bring enforcement actions against unscrupulous actors in the lead generation industry. Examples abound, such as where the FTC successfully sued lead generators that lured consumers with promises of extremely low fixed rate mortgages or free refinancing, but then sold consumers’ information to entities that did not actually offer these deals, or where it sued payday loan lead generators that sold consumers’ sensitive bank account information to nonlenders who simply debited charges directly from consumers’ accounts without authorization. I have written extensively on lead generation generally and lead generation companies in particular, such as my article titled, “The Lead Generation Company: Managing the Risks,” which can be found in our firm’s Articles library (LendersComplianceGroup.com) and was published in this magazine (page 36 of the February 2015 issue). This article is a good place to start your reading on lead generation companies, especially in light of the significant regulatory risks posed by them. Lead generation is the process of identifying and cultivating individual consumers who are potentially interested in purchasing a product or service. The goal of lead generation services is to connect lead purchasing companies with the profiled consumers so that the lead

purchaser can convert “leads” into sales. The FTC has defined a lead broadly as any consumer who has indicated interest, directly or indirectly, in buying a product or service by taking some action. Leads cover the gamut of consumer profile information. For instance, they may consist of little more than a consumer’s name and contact information. But they can contain information that has been derived by soliciting much more detailed and sensitive consumer information, like Social Security Numbers and bank account numbers; in other words, not just information in the public record. The lead generation world is very state-of-the-art these days. Consider that consumers increasingly research and shop for products and services online, which means that lead generation has become more sophisticated, rapid, and data-intensive. Leads are collected from many sources. Often, leads are collected by a publisher or affiliate. This entity is encountered by the consumer through the consumer’s use of consumer-facing marketers in the lead generation ecosystem that promote products or services online. These conduits encourage consumers to submit additional information about themselves to learn more and connect with merchants or advertisers that can sell them the products or services being sought by the consumer. Many publisher Web sites contain marketing claims and a Web form requesting consumer information. Some publishers expressly identify the merchant to which they sell consumer leads, but others do not and only make generic marketing claims. In our reviews of client marketing strategies, we have seen where small publishers simply collect consumer information and pass it on to larger, more sophisticated actors in the lead ecosystem. We have also found that some publishers oversee networks of subpublishers or sub-affiliates that feed them leads, often contracting

with the latter to create marketing websites and web forms. There are many types of lead sources and lead generation methods. I will mention the salient types. l Leads transmitted to aggregators: These are intermediaries that take in leads collected by multiple website publishers and prepare them for sale to their clients, which may be end users or even other aggregators. Generally, the aggregator identifies the leads that would be most valuable or relevant to their clients and to package the leads accordingly. Unless an aggregator chooses to operate its own websites or

engage in consumer-facing marketing, its role may be largely invisible to consumers who fill out online forms. l Leads sold to end-buyer merchants: These are leads sold to end-buyer merchants or advertisers that can sell consumers the products and services they are seeking. By using these leads, merchants will frequently contact consumers directly in order to pitch services and provide additional marketing materials about a potential transaction. l Leads verified or supplemented with additional information: These leads stem from a pruning process, whereby

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merchants and others in the lead generation ecosystem seek more data about leads. Reasons for seeking additional information include further verification of the accuracy and validity of the information consumers provide in Web forms, supplementation of consumer leads with additional data for a fuller picture of a consumer, or the scoring of leads based on their potential qualifications or value. The pruning process could include even contacting consumers directly, for instance, by calling them over the telephone. Some merchants, aggregators, and publishers seek supplemental information from third-party

data brokers, firms that unfortunately often act without transparency and accountability. Finally, lead generators may sell “remnant leads” that can target consumers unlawfully. These are leads where the lead purchaser has no legitimate need for the consumer’s sensitive data. The FTC has brought enforcement actions based on the prevalence of remnant leads. Even lead generators are very cautious in how they sell remnant leads. Depending on the circumstances, they could be liable under the FTC Act if the purchaser has no legitimate

need for the information, especially since privacy policies on many publisher websites provide few restrictions on the use or sale of the consumer information collected by the lead generator. If you plan to use a lead generation company, I strongly advise that you vet it as a service provider, using the kind of due diligence review resources offered

by our affiliate Vendors Compliance Group. Whatever you decide in developing your marketing campaign, keep in mind that the FTC has demonstrated significant concern about lead generators’ collection and sharing of consumer information, given that such information increases the risk of misuse and harm to consumers.

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

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By Jonathan Foxx

Your Compliance Policies Are Only as Good as Your Commitment to Manage Them By Andrew Liput

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recently heard from a client who had suffered a loss when an employee failed to comply with internal compliance policies and procedures in evaluating the risk of a settlement professional. The failure to verify certain key information ultimately resulted in a large sixfigure loss. The tools were there to protect the company, however, the employee was not properly trained and managed and the failure in oversight and accountability cost the company dearly. Rather incredibly, this was not the first time this happened to the client. The recent Consumer Financial Protection Bureau (CFPB) enforcement action involving Wells Fargo, which appears on the verge of settling for a $50 million penalty, likewise involved managers and employees conducting business in violation of companywide controls and standard procedures governing consumer relationships and data privacy. As I have written in this space before, the enforcement of corporate compliance policies is a daunting task that requires constant supervision and accountability. It means internal and external testing is required. It also means that initial and ongoing training must take place. If you want to take on the task of handling compliance yourself, fine, but you better be sure that you are testing and documenting your performance, as well as steps taken to close loopholes and amend gaps in proper risk management. Outsourcing can help increase the effectiveness and the reliability of results, but in doing so, you cannot abandon oversight completely: You are still responsible for your vendors! Like it or not, federal and state auditors expect that all banks to not simply draft lengthy internal policies managing risk and assuring consumer protection, but to also constantly test those policies internally and externally to assure the proper results. All indications point to a focus on the Home Mortgage Disclosure Act (HMDA) and fair lending in 2017. If that occurs, banks will be held accountable not only for written policies, but the disparate impact unmanaged policies may have on a consumer’s right to fair and equal treatment in financial transactions. As the year begins to close, now is the time to start taking a closer look at all internal policies, procedures, systems and controls, as well as all training, accountability and third-party quality control verifications. There is simply no excuse when poorly trained and supervised employees, improperly used compliance tools or unmanaged control systems result in financial losses.

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

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heard on the street technology platform during the first quarter of 2017, which aims to improve mortgage lenders’ competitiveness by better managing their regulatory obligations and helping efficiently scale their businesses. The Trelix suite of mortgage fulfillment services is a key component of Altisource’s robust and unique origination solutions platform. MetaSource Partners With ComplianceEase on Compliance Testing

MetaSource has announced that it has partnered with ComplianceEase to provide automated compliance testing for loans submitted to MetaSource for review. MetaSource provides lenders with independent third-party compliance reviews of their loan pipeline to provide feedback on potential issues that may cause issues related to salability in post-closing or be uncovered during a regulatory audit. In particular, when conducting compliance checks during the pre-funding QC process, this review offers lenders significant risk mitigation benefits by addressing loan quality issues prior to funding. “The MetaSourceComplianceEase partnership is a natural fit, as we have had a long standing relationship with ComplianceEase and its ComplianceAnalyzer platform,” said Mary Kladde, senior vice president of Mortgage Services at MetaSource. “Coupled with our team’s expertise in loan production, this partnership will ensure that MetaSource is able to deliver accurate, actionable results to help lenders improve their overall loan quality when delivering loans for purchase and preparing for potential regulatory audits.” ComplianceEase provides technology solutions to manage operational risk and regulatory compliance. The company’s flagship product ComplianceAnalyzer provides automated, loan-level auditing covering all levels of regulation from federal, state, and municipal high-cost and antipredatory laws to usury, consumer credit regulation,

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prepayment penalties, and more. “Lenders can’t rely on the ‘stare and compare’ approach to test for compliance with TRID. Automation allows the auditing of all documents for delivery timing sequencing, fee names, tolerances, changed circumstances, and reasons for re-disclosures so they can review exceptions,” said Dan Smith, SVP of Sales for ComplianceEase. “We’re pleased to be selected by a third-party reviewer like MetaSource to deliver thorough loan auditing akin to what the secondary market investors and examiners will see so that lenders can originate confidently and efficiently.” Mortgage Professionals to Watch l AXIS Appraisal Management Solutions has announced the appointment of Rob Chrisman, publisher of the widely-read Daily Mortgage News and Commentary, to its board of directors. l First Guaranty Mortgage Corporation (FGMC) has named Mike McElroy as the company’s general counsel. McElroy comes to FGMC with extensive industry experience, including key roles with national mortgage lending and servicing firms; government-sponsored enterprises (GSEs); and private firms. FGMC has also announced that mortgage industry veterans Joe Garcia and Baird Marble have joined the company as account executives for FGMC’s Correspondent Division. l HomeBridge Financial Services has strengthened its presence in the Dallas housing market with the addition of Russell Anderson to its developing Dallas Central branch location. l Castle & Cooke Mortgage has set its sights on expanding its presence in the Midwestern and Eastern United States, as Glenn Hodge, a mortgage industry veteran with 35-plus years of experience, will oversee the company’s growth as Midwest regional manager. Having operated out of a continued on page 60

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heard on the street

Loan Approval: Entitlement vs. Engagement By Andy W. Harris, CRMS

As mortgage loan originators, we work with all kinds of people with diverse backgrounds. Some clients are great to work with and others can be difficult. It’s important that we prepare everyone for the loan process and educate them with the requirements today so that expectations are clear and accurate. With all the unique situations and personalities, I believe that there are two primary types of borrowers; the “entitled” borrower and the “engaged” borrower. While I believe the entitled borrower is becoming less common today, they are certainly still out there.

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Defined l The Entitled Borrower: A consumer with a belief they have the right to and deserve a new mortgage loan without following the approval process. To be put off or combative by the request of documentation, validation and qualification that all others must follow. To have an unrealistic, unmerited or inappropriate expectation of others to meet their requirements. A behavior disorder such as an entitled borrower can create many difficulties and delays during their loan process. l The Engaged Borrower: A consumer who embraces the mortgage 60 pre-approval process by having an emotional, involved and committed mind-set. To be proactive versus reactive in meeting financial and other requirements for loan qualification. To have realistic and appropriate expectations when meeting loan requirements. A behavior that respects the process and understands the importance of following the requirements through engagement. This type of borrower has a faster and smoother loan process. I personally believe that I’m a very qualified and responsible borrower, but I was raised to be an engaged type borrower. It’s just not in my nature or personality to make demands if I am borrowing money or to question the requests of any lender willing to lend it. If every other responsible and qualified borrower follows the same process, what makes the entitled exempt from meeting the same requirements? While I cannot relate personally with the entitled borrower, I do deal with them on occasion and help bring them back down to Earth through education and perspective. The good news is that we can all help entitled borrowers become engaged borrowers through education, information and perspective. It’s important they realize why something may be required and how the primary and secondary markets work in the residential mortgage space. This helps those that feel they are more special than others to simply realize they are not. It’s an important process that we all must respect and be engaged in for a successful outcome. Recognize if you’re faced with an entitled borrower. If so, spend time upfront converting them to an engaged borrower through perspective and education. You’ll all be thankful that you did. Are you an originator? Send your stories! To have topics considered in future editions, please e-mail me with “OrigiNation” in the Subject Line at AHarris@VantageMortgageGroup.com. These can be confidential or your name and company can be referenced if you wish. You can also join the Facebook Group by searching for “OrigiNation.” Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and past president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431, e-mail AHarris@VantageMortgageGroup.com or visit VantageMortgageGroup.com.

temporary location since September, members of Castle & Cooke Mortgage’s newest Indiana branch are putting down roots in their permanent location in Greenwood, Ind., a team that will be led by Karen Smith, who has held branch management positions for the past 25 of her 30-year career in the mortgage industry. Sterling National Bank, the principal subsidiary of Sterling Bancorp, has announced that Jeff Bonner has joined the bank’s Residential Mortgage Warehouse Lending Department as managing director and vice president. Starkey Mortgage has announced that Cari McCue LaMere has joined the company as executive vice president of national operations, focusing on the day-to-day process for better and faster workflow efficiency and to foster a seamless flow between production and operations. Starkey Mortgage has also announced that Jason Browning, Adam Hart and Ken Witte have joined the company as branch managers. Browning will serve as area branch manager in Plano, Texas; Hart will manage Starkey’s Savannah, Ga. Branch; and Witte will serve as branch manager of the Atlanta Central Branch. In total, these veteran managers bring more than 60 years of mortgage experience to the Starkey team. Schmidt Mortgage Company has announced the addition of John Kulka as manager of new business development. A 25year mortgage industry veteran, Kulka brings considerable experience in cross-selling mortgage products across related industries, affinity marketing and retail mortgage lending. MetaSource has announced the promotion of Mary Kladde to the role of senior vice president of Mortgage Services, where she will be responsible for the oversight and continued enhancement of MetaSource’s mortgage solutions and services portfolio. 1st Advantage Mortgage, a Draper and Kramer Company, has announced that Deena Sisson has joined the firm as regional vice president. Based out of San Antonio, Sisson will focus on top talent recruitment

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and growing the company’s presence nationwide, with an emphasis on southwest markets. NewDay USA has announced that Regina Lowrie, former chairman of the Mortgage Bankers Association (MBA) and a Certified Mortgage Banker (CMB), has been appointed to the Board of Advisors of Chrysalis Holdings LLC, a private investment company focused on mortgage banking and financial services. Point, the financial technology platform that allows homeowners to sell a fraction of their homes, has announced the addition of two key executive hires, as Ryan Randall, CFA, CAIA joins the company as head of capital markets and Matt Brady as the legal, regulatory and compliance counsel. Silver Hill Funding, a division of Bayview Loan Servicing LLC, has announced the addition of Jeremy R. Irwin as the company’s vice president of business development. In his new role, Irwin will create new opportunities for growth and strengthen relationships with Silver Hill’s broker partners. Silver Hill Funding has also announced two additional hires, as Brian Willner joins Silver Hill’s sales representative team, and Pablo Vega as new sales manager for the West Coast region. American Advisors Group (AAG) has named industry sales veteran Jesse Allen as the company’s senior vice president of National Field Sales. Top Vine Mortgage Services LLC has announced the addition of Jerri May-Lazar as a loan consultant for the company’s Watchung, N.J. location. Carrie Parker has been named senior loan officer for the team at the St. George, Utah branch of Bay Equity Home Loans. Parker has more than 15 years of experience in nearly every facet of the mortgage industry, and has worked for Southern Utah lenders the past 13 years. New American Funding has announced that it is expanding its Central Florida territory with a new location in Orlando. To lead this expansion, New American has enlisted the expertise of mortgage originator Miguel Mouriz, who

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Charles, Mo., joining GSF with Your turn Company (FAMC) has named will serve as a licensed branch 15 years of experience in the Matt Rider the company’s National Mortgage Professional manager. New American has financial services industry. new chief information officer. Magazine invites its readers to also announced that it has l Commonwealth USA submit any information, events, added Chris MacNaughton to l GSF Mortgage Corporation Settlements LLC (CWUSA) has announced that the passages, promotions, personal or lead the company’s expansion has announced the company is now licensed in professional occurrences that seem in Northern California as vice appointment of Tom Frunzi as appropriate and/or other pertinent Arizona and has added Brian president of Builder and executive vice president of Bailey as a new branch data to the attention of: Business Development, corporate development. manager located in Phoenix. responsible for developing the l Roostify has named Jeffrey GSF has named also named Heard on the Street/Mortgage Builder Division and creating a Brom as vice president of Joey Taylor as a mortgage Professionals to Watch column builder certification training compliance and Jesse Decker loan originator located in Phone #: (516) 409-5555 program that endorses loan vice president of services. Dubuque, Iowa, joining the E-mail: newsroom@nmpmediacorp.com officers as new home l Whiteboard Mortgage company with an extensive specialists. New American Software has announced that background in marketing and Note: Submissions sent via e-mail Funding has announced that it has named Brian Benson as public relations. Finally, GSF are preferred. The deadline for Anthony Ramirez has been president and chief operations submissions is the 1st of the month has added Larry Bleich as a selected to lead San Diego, officer. mortgage loan originator in St. prior to the target issue. Calif., as area sales manager, where his primary responsibility is establishing a strong team of new loan originators, while leading current originators to expand their teams, develop their leadership skills and generate more loan volume. Hunt Mortgage Group has announced the opening of a new office in Tampa, Fla. Anne Stewart has been hired as EASILY SHAREABLE CONTENT BARRY HABIB— director to lead the local effort With a touch of a button memTHE ORIGINATOR OF THE MARKET ADVISORY SERVICE and will focus on originating bers are able to share charts Daily guidance and insights from Mortagency debt, primarily small showing the latest economic gage Market expert Barry Habib. He closed balance loans under the and housing data. over $2 Billion in production as a Loan Freddie Mac and Fannie Mae Originator, called the bottom of the HousSmall Balance Loan Programs ing Market and currently provides sales for clients in the Southeast. and market training to thousands of Loan Originators across REAL ESTATE DATA & INSIDER CONTENT Valuation Partners has hired Show the housing opportunity in the country. Michelle Revilla as a regional 61 your local market to customers account executive to oversee and real estate agents. We will STATE OF THE ART, USER FRIENDLY WEBSITE business growth in the Eastern provide you with affordability We've taken great pride in U.S. region. Revilla will be levels, appreciation, resale volbuilding a website that uses responsible for selling ume, new construction, and job new technology, and enhances Valuation Partners’ appraisal the user experience. No matter growth…updated monthly and easily shared. There is also and valuation products and where you are on our site, additional content from Art Cashin, Kiplinger letters, and services to mortgage you'll always have market data in sight. Never miss a lock much more. companies, banks and credit alert with our real time market news and alert system. unions. Alterra Home Loans has MOBILE WEB APP announced the hiring of Always stay in touch with the Terence Murray as its new market when on the go with Western Division Sales & our Mobile Web App. It's fast Expansion VP. Murray will be and easy to use. Whether you l Bond Quotes responsible for managing and have an iPhone, Android, l Daily Video and Transcript supporting the western region Blackberry, Windows Phone, you'll always have access to for Alterra’s retail production l Interactive Charts MBS Highway. No downloads, no annoying updates, just and expansion. visit m.mbshighway.com in your phone or tablet's browser. l Lock/Float Advice Inlanta Mortgage Inc. has l SMS Updates added Dave Stephan as Thirdl Real Time Market News CALCULATORS AND TOOLS Party Origination (TPO) Powerful and unique calculal Cashin's Corner Manager. Stephan comes to tors to help you when prel The Kiplinger Letters Inlanta with nearly 30 years of senting to customers. Buy vs. industry experience in the l Real Estate Market Data Rent, ARM vs. Fixed, Paying retail, credit, technology and Points, and Amortization cal- l By The Number$ TPO sectors of the mortgage culator are a few examples. You can save and share the l MBS TrendTRAKR industry. l Social Share results to beat your competition. Element Funding, a division of Primary Residential Mortgage Inc. (PRMI), has announced the opening of a new branch office in Tampa, Fla., as Gary Tuorto, sales manager, and Seth Robbins, retail branch manager, will manage the new Tampa branch. Franklin American Mortgage

Rise of the Machines By Brent Emler

rtificial intelligence is both exciting and frankly, at times, disconcerting. Stephen Hawking, Bill Gates and many other science and technology titans warn us to be careful with the science of artificial intelligence. If we’re not careful, they warn, we will end up becoming subservient to robots who rule the world. In spite of the warning of this dystopian future, we continue to charge headlong into the future with disciplines like machine learning. Why? Because the possibilities are endless and fear of the unknown has never stopped the human race from progress.

Machine learning Wikipedia defines machine learning as a subfield of computer science that evolved from the study of pattern recognition and computational learning theory in artificial intelligence. In 1959, Arthur Samuel defined machine learning as a “Field of study that gives computers the ability to learn without being explicitly programmed.” In terms we can understand, machine learning is the ability to analyze our data, look for patterns and then take intelligent action. The possibilities are endless. Every salesperson has encountered a scenario where they were in the exact right place at the exact right time. Perhaps it was a past client or long lost lead who just happened to be in the market when the sales rep calls. Are there sweeter words for a salesperson than hearing from a prospect, “Your timing is impeccable. My husband and I were just talking about doing a refinance on our house.” These sales scenarios feel like hitting the lottery. Machine learning aims to make these encounters predictable and based on the science of the data instead of the magic of hope and luck. Machine learning can put your marketing pieces in the hands of your prospect at the exact right time. It can ensure your salespeople are making calls to their past clients when the clients need them the most. The case for machine learning A friend of mine purchased a home with a VA loan in May of 2015. Within a couple of months, he began receiving periodic letters from lenders offering refinance options. Over the last six months, the lenders have picked up the pace. Two weeks ago, I asked him to start collecting the letters. I currently have 17 letters from four different lenders sitting on my desk. This barrage of marketing material has not worked yet, and frankly, I don’t think it will. All of these lenders are offering to reduce his payment. Every single one of the letters suggests the lowest rates and the lowest payment. What a bargain … right? He can save almost $300 a month. Who wouldn’t want to do that? Everyone wants more cash in their pocket don’t they? Wrong! My friend doesn’t really care about a lower payment. I know this to be the case because I have talked to him about finances. We’re both thinking about retirement and how we can enter our golden years completely debt free. I guarantee if these lenders were to send a letter with a significantly higher payment, but show him he can be free from mortgage debt in 15 years, he would seriously consider the offer. This is where big data and machine learning can make all the difference in the world. Looking at a combination of factors like early payment behavior on his mortgage and other loans, we could determine he is a much better candidate for a reduced term refinance than a lower rate/payment refinance.

The lenders who are sending these lower your payment letters every week and paying someone to pick up the phone to call him with the same exact offer are all wasting their time and money. Consumers see through simple marketing tactics. We know if companies are buying a list and blasting out thousands of letters and e-mails, they don’t know our story. We know we’re just a number to them. With machine learning, mortgage lenders can tailor the content, the offer, the delivery method, and most importantly, the schedule to meet the needs or desires of the consumer. Mortgage industry Big data and machine learning can be applied to the mortgage industry in a variety of ways: l Origination and processing: Applying for a mortgage provides a wealth of information about our financial lives: Credit reports, employment history and income history. Coupled with broader consumer data, demographics, real estate trends, social signals, and overall economic markers, machine learning can determine when your clients will be looking for their next mortgage and which refinance products they would be interested in. In fact, machine learning will not only predict consumer behavior, it will prescribe the best case scenario for the consumer. l Servicing: Servicing is a highly competitive, low margin, volume business that has been shrinking year over year. The winners in the servicing business will use big data and machine learning to make better decisions about risk mitigation and improved loan quality. Predicting patterns that indicate financial distress based on macro geographic indicators, for instance, will make or break servicing organizations. l Cross product selling: Mortgages provide banks long-term relationships with consumers, but more importantly, they provide a treasure trove of data about these mortgage clients. Mining the data and providing highly tailored offers for auto loans, credit cards, consumer loans and other private banking services strengthen the relationship and drive additional revenue. Machine learning is already here Does your company use search engine optimization (SEO)? Does your CRM provider mine e-mail content, deliverability and reputation to ensure your e-mails don’t end up in SPAM traps? Have you used Siri to ask for directions to a business appointment lately? The self-driving cars we hear about are a direct result of machine learning. Gargantuan amounts of data about driving behavior, weather conditions, and traffic patterns are analyzed in real-time to produce a transportation experience where the machines are driving alongside humans. It is truly remarkable technology. Selfdriving cars are certainly not ready for prime time, but someday we will be able to sit back and relax while we’re chauffeured to work. There is indeed profound interconnectivity in all of our lives and activities. The future of big data and machine learning will offer the mortgage companies who are early adopters the opportunity to dramatically outperform the competition.

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.

The Long & Short The Business of Short Sales

When Frustration Hurts the Cause BY PAM MARRON

n May 19, 2016, I was appointed to the first Housing Counseling Federal Advisory Committee (HCFAC) under the U.S. Department of Housing & Urban Development (HUD). This Committee, consisting of 12 members from the mortgage, real estate housing counseling industries, as well as consumers, was formed by HUD to find better ways for HUD counseling to assist consumers with sustainable homeownership. Our first meeting was in Washington, D.C. recently. While in D.C., a visit to the U.S. Treasury was made to talk about a government second mortgage idea that might allow a refinance for 3.2 million negative equity homeowners who have conventional first mortgages not covered by Fannie Mae or Freddie Mac, and for negative equity second mortgages and home equity lines of credit (HELOCs). The idea could provide a refinance where none exists for those who are current on their mortgage and struggle to stay put in negative equity homes. Many negative equity homeowners have resetting interest-only loans, and most are just looking for some relief to a lower, fully-amortized interest rate that allows equity to build while values return. At the HCFAC Meeting, representatives of top housing agencies that assist homeowners assembled on panels addressed us throughout the day. It was tough to contain disappointment after learning that pre-

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foreclosure housing counseling funds were gone from the 2017 budget. The aftermath of the housing recession was brought up in multiple conversations, and I felt compelled to bring up that we cannot forget the 6.7 million homeowners who still have negative equity in their homes. I was determined to make sure that these people who were in top agencies would know that “it wasn’t over yet.” The cringe on the face of a panelist after letting him know that most lenders still required negative equity homeowners to go delinquent before help is provided signaled that this probably wasn’t the first time he had heard this. Being the bearer of bad news wasn’t what I intended to relay, especially when the direction was shifting to helping consumers purchase homes again. But, then it turned. One of the panelists was with the National Foundation for Credit Counseling (NFCC). He talked about credit, acknowledging where we had come from and that there was still work to do. It was then that my greatest frustration was realized: The lack of attention to damaging current loss mitigation policy that knowingly harms credit built over a lifetime … credit that is the benchmark of the mortgage and real estate industry and the driver of our economy. Most homeowners trying to stay in negative equity homes refuse to go delinquent on their mortgage just to get a modification, often their only option available. Five years of trying to expose current policy of most lenders that requires

“… my greatest frustration was realized: The lack of attention to damaging current loss mitigation policy that knowingly harms credit built over a lifetime … credit that is the benchmark of the mortgage and real estate industry and the driver of our economy.” mortgage delinquency first before help is offered is still unbelievable to many. Policy that destroys credit of those already in trouble, that has long-term negative consequences and that is affecting a growing number of elderly homeowners can be changed. Allowing for a solution that promotes keeping credit intact with sustainable refinancing can allow responsible homeowners with negative equity to stay put in homes while values return. Realization occurred that the best agencies that can help were in this room, and that the day before the Treasury had given good news on the forefront and provided valuable information and more contacts that might be able to help. I realized that something very valuable that will come out of getting this HCFAC Committee of 12 from four different sectors of housing together. It is also

clear that our task will not be easy. There is still more to be done. The Freddie Mac automated system is turning down past short sellers, reading the short sale credit as a foreclosure, even after the four-year wait needed to get a new mortgage. The fact that loan originators must pay for rapid rescores when helping eliminate disputed accounts on credit has prompted delays on mortgage closings and has resulted in a lack of loan originators wanting to help correct this credit. Finally, patience to wait until after this contentious election is over in order to push forward on getting problems resolved has been short. But, for the first time in years, progress feels attainable. We are going in the right direction … stay tuned.

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

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

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Protecting the Mortgage Franchise in the New Enforcement World Management strategies for complement compliance ince the adoption of TRID (as well as numerous other regulations), the mortgage process requires more focus than ever to assure compliance and make sure that the borrower knows exactly what’s going on. Compliance is essential to providing a transparent and secure mortgage experience for the lender and borrower. Taking the time to ensure that all forms are received and complete may delay the mortgage process significantly which is why mortgage companies are doing two things. One, they are preparing TRID-

related forms earlier (if possible) and planning accordingly so that the overall process is not delayed. The second is that many mortgage companies are adopting electronic platforms that have the ability to check regulatory compliance through automation thus, expediting the entire process. As a mortgage professional, keeping up with regulatory compliance should be a priority, and with the proper management, these changes don’t need to impact the overall experience at all. Here’s how to make that happen. Have the right guardrails in place so that you can focus on production. TRID (TILA/RESPA

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Integrated Disclosure), or the “Know Before You Owe” rule, took effect Oct. 3, 2015, and has created many problems for closing on time and the estimated costs given. Having strict guidelines and accountability is the first step to ensuring that your company is adhering to all regulations. Often lenders think of new regulations as a few extra forms, however, complete compliance may slow down the entire process and cost thousands through decreased workflow. Having a digital platform may be the best solution for those looking for ways to make sure these rules are being followed every time. Compliance is a growing concern in the mortgage industry and as new regulations get introduced so must a new way to process mortgages. Paper-based methods are tedious and time-consuming which translates to a higher cost per loan for the lender and often the borrower as well. Having a digital platform offers a way to continuously check for compliance and ensure a fast and easy experience time and time again. Compliance should be your top priority as the violations of these regulations could cost more than expected. Because the violation of these rules can potentially cost millions of dollars, your (and your company’s) reputation, and the reputation of board members/investors, it’s essential to have systems in place to ensure this does not happen. Certain procedures like providing well-researched Good Faith Estimates (GFEs) early will help keep the customer informed and will limit those last-minute changes. For example, entering a zero for the property tax estimate and updating it at a later time may cause panic during closing and increases the chances of a stressful experience for the borrower. Instead, taking the time to access public records and

research the surrounding property will give the borrower a better understanding of the final costs and allow them to plan accordingly. This is just one way that lenders can continue providing a positive experience while adhering to the new industry standards. As with most estimates, there is fear of under or overestimating costs. With an underestimate, the creditors are forced to make up the difference which makes it tempting to lean on the side of caution and overestimate the cost. However, overestimating the cost could put the predicted costs above the competition (risking the loss of that customer) which is why in-depth research is so necessary. Any estimate given that is not based on “the best information reasonably available at the time” could be a violation of TRID and result in drastic fines. Not only can compliance violations affect your reputation as a lender but failure to comply with set regulations can also result in significant financial penalties. For violations of the Unfair, Deceptive, or Abusive Acts or Practices (UDAAP), investors could be subject to the same charges as the creditor which may result in serious and long-term repercussions. Additionally, the statutory and civil penalties for violating TRID could reach up to $1 million per day, per violation, for third tier civil penalties (knowledge of violations). Beyond financial repercussions, non-compliance could result in late loan estimates, inaccurate estimated fees, change in closing times, and several additional setbacks. Other penalties like, reckless violations, and basic noncompliance with TRID range from $5,000-$25,000 per day. With so much at stake, how can you be sure that these regulations are being followed and how can you ensure a quick and accurate mortgage process? Setting the stage for a transparent and safe process is essential when adapting to new standards. The role of management, in regards to regulatory compliance, is to ensure a corporate governance

structure through visibility, calculated decision-making for risk, affecting change, and accountability. They are responsible for building the right atmosphere and making the tough decisions when necessary. These regulations are here to protect both the borrower and lender. Competent leaders set a culture of compliance and have written policies/procedures that meet necessary requirements. Complimentary to implementing these policies, employees need to be trained to meet company requirements so that accountability can be applied to the entire staff. With accountability set in place, each employee is responsible for making sure every regulation is taken into account throughout the mortgage process. Responsibility for violations of these policies directly affect the

employees and create a healthy culture of regulatory compliance. As more regulations pile on, the cost of processing mortgages will continue to rise until we adopt a more efficient solution. Management is not only responsible for guiding, teaching, and advising employees but providing them with the necessary tools for success. The consequences of noncompliance are extremely severe and without the proper guidance, a simple miscalculation could cost thousands or millions. As difficult as these rules may be, the focus for all mortgage professionals should be on the borrower. Providing them with the information and details in a digestible way so that there is no confusion in the future. It’s the responsibility of the lender to educate the borrower on the process and what is required on both sides. Transparency is a

crucial part of safe lending and in the end, it with benefit everyone involved. TRID compliance may seem like a tedious task to many lenders, however, it’s actually propelling the industry forward and influencing a much-needed shift. Paper-based processes will continue to work at the same rate yet with more regulations it will take longer and cost more than others who have adapted their business to accommodate

these changes. The mortgage industry has begun to integrate technology in order to meet customer expectations and increased regulations have been the deciding factor for many already who were thinking of utilizing a digital solution. Keeping your staff up to date, whether it be through technology or education of new policies, will provide a setting for an efficient and effective loan origination process.

Bill Dallas is co-founder and chief executive officer of cloudvirga. He is a visionary in the fintech industry, responsible for founding and managing more than a dozen mortgage and financial tech companies over the past 40 years. Bill holds a law degree from Santa Clara University School of Law, as well as an undergraduate degree from Bowling Green State University, where he graduated magna cum laude. Bill may be reached via LinkedIn at LinkedIn.com/in/BillDallas. 67

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What types of posts? Learning the various types of posts representing the company will Taking the First Steps for Designing highlight the specific areas to a Social Media Compliance Policy By Ashley Hutto-Schultz prioritize in policies, procedures, monitoring and training. For ocial media has responsibility.” The exposure practical policies, procedures, example, are LOs commonly opened up a new created by social media platforms training programs and monitoring posting co-branded flyers, age of mortgage seems relatively endless at times within an institution. advertising rates and terms, or advertising, and, likewise, managing the risks Building a social media publishing self-authored articles? marketing and and responsibilities attached to compliance program becomes even Do any of these posts give advice consumer social media activity quickly more complex when incorporating on subjects related to lending and communication. At the touch of a becomes daunting. the multitude of legal requirements finance? Each of these types of button, mortgage companies and On one hand, understanding the that could apply to any given post. posts present their own loan originators (LOs) reach activities to include in the For social media, these legal compliance considerations; hundreds of potential customers compliance program presents requirements extend beyond the harnessing the categories of social and increase a company’s challenges. The term “social mortgage advertising laws we’ve all media postings can drive the publicity far beyond the bounds of media,” itself, can be very broadly come to know and love; they also objectives of the overall social the more traditional advertising defined to include technologies may include requirements related to media compliance program. If the methods. These technologies that go beyond the commonly cybersecurity, data security, entity already uses an approval enable businesses to increase known platforms like Facebook, intellectual property, antiprocess for social media posts, their public exposure tenfold, Instagram, Twitter and LinkedIn. harassment and debt collection, to finding ways to identify sometimes for a very low Uncertainty about the type of name a few. Outlined below is a unapproved posts published online monetary cost. But, as activities conducted via social starting point for designing a social also helps determine the Spiderman’s mortgage compliance media presents difficulties for media compliance program to fit effectiveness of the approval counterpart might say, “With great Compliance Departments hoping any institution’s needs. process. exposure comes great to build comprehensive and Identifying the sources of exposure is a necessary first step When (how often) are various to tailoring a practical compliance individuals posting? solution. This part of the process is Similar to learning the types of an exercise of determining who, postings appearing on social what, when, where, and how a media, identifying the entity’s most company is being represented on active social media users (e.g., social media. individuals, departments, or branches) helps prioritize the Who is posting? compliance resources, especially in Typically, LOs and other members terms of training and creating of the sales force are most likely to practical approval or monitoring actively represent a mortgage procedures. If certain branches company on social media for the heavily rely on social media posts, purposes of advertising and devoting specific compliance promoting business. But, it also resources to that branch in order to helps to understand who else facilitate the quick approval or represents an entity on social monitoring of their activities could media, like the company’s be a helpful approach. Also, marketing and/or recruiting staff. depending on the level of activity, Each of these individuals operates entities may opt to utilize third in different capacities and may party vendors to monitor the have different purposes for using company’s social media presence social media. Understanding how and compliance. Although this their function within the solution may not be necessary or organization relies on social media practical for every institution, may become valuable for reputable vendors may offer the understanding the most efficient most advanced and efficient and practical structure for approaches for catching potential managing social media risks. social media non-compliance. From a reputational risk standpoint, it’s also helpful to Where are these postings determine the types of posts being appearing and re-appearing? published by customers and exCommonly used platforms, such as employees of the entity. Keep in LinkedIn, Facebook, Twitter, and mind that entities also need social Instagram, are the most obvious media policies for all employees in contenders to include in a social general that include rules related to media compliance program. anti-harassment and other general However, other platforms allow employment law requirements. users to share content via text,

#TrendingForTheRightReasons

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images, video, or audio that should also be considered (e.g. Yelp, Tumblr, Zillow etc.). Finding the various platforms utilized helps define the activities that fall under the social media compliance management system at any given entity. Once these platforms have been identified, realizing their limitations may dictate the compliance solutions related to each. Character limits, content sharing, re-posting, endorsing or liking, and other platform-specific features create their own compliance challenges for consideration. For example, how will required disclosures be included on each platform â&#x20AC;&#x201C; with character limits, space limitations, etc.? How will disclosures appear on various devices â&#x20AC;&#x201C; especially those required in connection with trigger terms? Where will the Equal Housing Logo appear? Recognizing these distinctions,

and incorporating them into policies, procedures, monitoring and training, takes time but demonstrates control over the messages delivered to consumers. How are the postings being generated? The most basic method for creating and sharing social media posts on any given platform is for an individual to log on, create a post, and share it. As businesses work to make this process more efficient, solutions have been introduced that allow companies or individuals to create a single post and easily disperse it to multiple platforms at one time. In some cases, a companyâ&#x20AC;&#x2122;s marketing department will create the content (flyers, articles, etc.) for the sales force and will distribute it for posting to multiple sites. Understanding the different methods for publishing social

media content enables a tailored approach for approval and monitoring of the postings. For example, if postings go through a Marketing Department before being published, there is likely a practical way to include a step for Compliance approval as the postings are being completed. Working with the Marketing Department if the process is centralized, or branches if itâ&#x20AC;&#x2122;s decentralized, to understand which vendors are being used is one way to help determine how to design compliance processes and procedures for each.

The points outlined above allow compliance professionals to start defining the types of social media presence associated with their institution. During the process, and while building each part of the compliance management program, a few other main points to keep in mind are the roles other departments play in the program. Consulting with and including the Human Resources, Information Technology, Marketing, and Recruiting Departments fosters a better understanding of the entityâ&#x20AC;&#x2122;s risks, capabilities, and governance for social media.

Ashley Hutto-Schultz is director of compliance for Castle & Cooke Mortgage, overseeing the compliance team responsible for managing and enforcing the companyâ&#x20AC;&#x2122;s adherence to all applicable industry laws and regulations. Prior to joining Castle & Cooke Mortgage, Ashley practiced law in the District of Columbia at Morrison & Foerster LLP. Ashley may be reached by phone at (801) 461-7152 or e-mail AHuttoSchultz@CastleCookeMortgage.com. 69

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Compliance Really Does Matter By Greg Stephens, SRA, MNAA, CDEI

ith an everincreasing focus on compliance impacting the mortgage lending industry, this seemed like an opportune time to address an often overlooked area of compliance relating to the thirdparty relationships between lenders and the vendors they rely on for various mortgage-related services. This has become a compliance issue for lenders because more than eighty percent of residential mortgage-related appraisal and evaluation assignments within the United States are now engaged through appraisal management companies, acting as third party vendors and the

compliance requirements imposed by state and federal laws and regulations have expanded significantly. The proliferation of appraisal management companies (AMCs) began as an unintended byproduct of the Home Valuation Code of Conduct (HVCC) in 2009 and by the publication of the Interagency Appraisal and Evaluation Guidelines-“Guidelines” in December 2010, oversight of third-party vendors was very much on the radar of the Regulators. Third-party arrangements Within the Guidelines, Subtitle XVI–“Third-Party Arrangements,” the regulators detailed very specific reminders of lenders responsibilities with the following requirements:

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© Copyright 2007-2016 Carrington Mortgage Services, LLC headquartered at 1600 South Douglass Road, Suites110 & 200A, Anaheim, CA 92806. 800-561-4567. NMLS ID #2600. Nationwide Mortgage Licensing System (NMLS) Consumer Access website: www.nmlsconsumeraccess.org. All rights reserved.

l An institution that engages a third party to perform certain collateral valuation functions on its behalf is responsible for understanding and managing the risks associated with the arrangement; l An institution should use caution if it engages a third party to administer any part of its appraisal and evaluation function, including: l The ordering or reviewing of appraisals and evaluations; l Selecting an appraiser or person to perform evaluations; l Providing access to analytical methods or technological tools. l An institution is accountable for ensuring that any services performed by a third party, both affiliated and unaffiliated entities, comply with applicable law and regulations and are consistent with supervisory guidance. l If an institution outsources any part of the collateral valuation function, it should exercise appropriate due diligence in the selection of a third party. l An institution should be able to demonstrate that its policies and procedures establish effective internal controls to monitor and periodically assess the collateral valuation functions performed by a third party. l An institution also is responsible for ensuring that a third party selects an appraiser or a person to perform an evaluation who is competent and independent, has the requisite experience and training to perform an assignment for an particular property or geographic market. l An institution should ensure that when a third party engages an appraiser or a person who performs an evaluation, the third party conveys to that person the intended use of the appraisal or evaluation and that the regulated institution is the client.

l An institutions risk management system should reflect the complexity of the outsourced activities and associated risk. Program compliance The agencies also provided specific reference points for lenders in the 2010 Guidelines under Subtitle XVII, “Program Compliance” when they stated, “An institution’s appraisal and evaluation policies should establish internal controls to promote an effective appraisal and evaluation program.” The specific guidance is contained in the following bullet points: l Maintain a system of adequate controls, verification and testing to ensure that appraisals and evaluations provide credible market values; l Insulate the persons responsible for ascertaining the compliance of the institution’s appraisal and evaluation function from any influence by loan production staff; l Ensure the institution practices result in the selection of appraisers and persons who perform evaluations with the appropriates qualifications and demonstrated competency for the assignment; l Establish procedures to test the quality of the appraisal and evaluation review process; l Use, as appropriate, the results of the institutions review process and other relevant information as a basis for considering a person for a future appraisal or evaluation assignment; l Report appraisal and evaluation deficiencies to appropriate internal parties and if applicable, to external authorities in a timely manner. State AMC licensing laws and regulations Another layer of compliance oversight for mortgage lenders is created by the fact there are now 38 states that have enacted AMC registration legislation and rule making. Prior to engaging in AMC services in those 38 states, an AMC must pay the registration

fees, be appropriately registered and then comply with the various laws and regulations within those states which contain very specific requirements that AMCs must follow. Violations can and have resulted in fines in the thousands of dollars which could potentially impact an AMCs ability to continue operating. It also creates compliance risk to the lenders engaging AMCs that are failing to comply with the various state laws and rules due to the oversight requirements within the Interagency Appraisal and Evaluation Guidelines.

When auditing an AMC, a lender should be aware of the statutes and regulations applicable to the AMC which can be accessed on the website of the respective state appraisal regulator Web sites. continued on page 72

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Appraiser independence The Final Rule also includes compliance requirements within Section 129E(a)-(i) of the Truthin-Lending Act specific to appraiser independence that AMCs and lenders must be aware of and adhere to. When appraisal management companies register with the various state regulatory

any AMC engaged as a thirdparty vendor has the appropriate written policies, procedures, and standards of practice consistent with the laws and regulations applicable to the AMC within the state appraisal regulatory jurisdiction(s) they are operating in.

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AMC Final Rule In June 2015, the agencies also published the AMC Final Rule to implement the minimum requirements in the DoddFrank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) to be applied by participating states in the registration and supervision of AMCs. Those Guidelines impose requirements for AMCs to engage only State-certified or State-licensed appraisers for Federally related transaction regulations, for the AMCs to establish and comply with processes and controls reasonably designed to ensure that the AMC, in engaging an appraiser, selects an appraiser who is independent of the transaction, and has the requisite education, expertise, and experience necessary to competently complete the appraisal assignment for the particular market and property type and to also direct the appraiser to perform the assignment in accordance with USPAP.

agencies and when the AMCs renew their registration (every one to three years) they are required to certify compliance with numerous specific requirements. Lenders therefore should have written policies and procedures in place to ensure

compliance really does matter

All regulatory agencies can be accessed through the Appraisal Subcommittee (ASC) Web site at ASC.gov. On the ASC home page, select State Regulatory Programs/State Contact Information, then select the state you wish to access. As of Sept. 20, 2016, in alphabetical order, the following states have AMC regulations enacted: Alabama; Arizona; Arkansas; California; Colorado; Connecticut; Delaware; Florida; Georgia; Idaho; Illinois; Indiana; Kansas; Kentucky; Louisiana; Maryland; Michigan; Minnesota; Mississippi; Missouri; Montana; Nebraska; Nevada; New Hampshire; New Mexico; North Carolina; Oklahoma; Oregon; Pennsylvania; South Dakota;

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continued from page 71

Tennessee; Texas; Utah; Vermont; Virginia; Washington; West Virginia; and Wyoming. Lenders engaging AMCs in the procurement and delivery of appraisal and evaluation assignments in any of these 38 states need to ensure those AMCs are engaging in AMC activities in compliance with the applicable laws and regulations within each of those respective states. It is also important to recognize that the laws and regulations are not consistent among the 38 states but that a common theme does exist among the various state laws and regulations. Some examples include, but are not limited to, the AMC: l Having a system in place to

ensure that prior to selecting an appraiser for Valuation Link fee panel or engaging a fee panel appraiser in an appraisal or evaluation assignment, Valuation Link staff will ensure that: 1. The person selected possesses the requisite education, expertise, and experience to competently complete the assignment. 2. The person selected is capable of rendering an unbiased opinion. 3. The person selected is independent and has no direct, indirect, or prospective interest, financial or otherwise, in the property or the transaction. 4. The appraiser selected to perform an appraisal holds the appropriate state certification or license at the time of the assignment. 5 Persons who perform evaluations possess the appropriate appraisal or collateral valuation education, expertise, and experience relevant to the type of property being valued. 6. The work performed by appraisers and persons providing evaluation services is periodically reviewed for quality assurance; l Having a process in place to ensure that prior to engaging an appraiser in an appraisal assignment, the AMC will verify the Appraisal Subcommittee National Registry information to confirm the appraiser: n Is licensed or certified by the state regulatory agency having

jurisdiction in the state of the property being appraised and n Has not had a license or certificate as an appraiser denied, revoked or surrendered in lieu of revocation prior to initial approval and engagement or since the last time the AMC engaged the appraiser in an assignment for an appraisal; It is also important for lenders to be aware that most states have trainee appraiser credentialing programs that allow for trainee appraisers to provide significant professional assistance to Supervisory Appraisers including signing appraisal reports and conducting solo property inspections consistent with the Competency Rule in USPAP with the Supervisory Appraiser countsigning the appraisal report. Several AMCs report lenders prohibiting trainee involvement in the appraisal process due to a misinterpretation of the Guidelines. In closing, I will admit there were a lot of regulations covered in this article. It was intentional. AMCs constitute a significant third party vendor relationship with a broad range of lenders. The Interagency Appraisal and Evaluation Guidelines provide very distinct responsibilities relating to those relationships, however, based upon the conversations with various lenders as I travel around the country, there do appear to be some oversight gaps.

Greg Stephens, SRA, MNAA, CDEI is chief appraiser and senior vice president of Compliance for Metro-West Appraisal Company. Greg also serves as chair of Government and Legislative Affairs for the National Appraisal Congress; vice chair of the Government Affairs Council for Collateral Risk Network; and is a member of the Government Relations Committee for the National Association of Appraisers.

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Adapting to TRID n Oct. 3, 2015, the Consumer Financial Protection Bureau (CFPB) enacted the “Know Before You Owe,” TILA-RESPA Integrated Disclosure (TRID) rule. Buying a home is one of the largest and most stressful purchases a consumer can make in their lifetime. Managing consumer expectations of the process became a priority for the CFPB. The regulation was designed to provide consumers with the education they need to make an informed decision about their home financing needs. To make informed home buying decisions, consumers need a better understanding of the mortgage process so that there are no

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By Jean Badciong

surprises at the closing table. The mortgage industry had to overhaul the way we do business every day in order to comply with the new rule. We had to create new processes and procedures, update our technology, and go through extensive training and education to prepare us for the change. At Inlanta Mortgage, we have adapted to the “Know Before You Owe” transition to the best of our ability and to the best of the industry knowledge that is out there. We take pride in the fact that the processes and procedures we implemented a year ago are the same now. From what we have observed, a vast majority of other companies in the industry have also adapted to the everyday changes the “Know Before You Owe” rule brought about as well.

However, if you ask others in the industry if the “Know Before You Owe” rule achieved its objective of educating consumers sooner in the process, the reviews are mixed. One of the positive outcomes of the new rule was replacing the Good Faith Estimate (GFE), Truthin-Lending (TIL), and the HUD Settlement Statement Form with the Loan Estimate (LE) and Closing Disclosure (CD) forms. The LE and CD combined multiple forms into one document, they have a similar look and feel to each other, and each line item is in a similar place. The GFE, TIL, and HUD Settlement Statement forms, on the other hand, looked completely different and items that may have been on Page 1 of the GFE were on a different page on the HUD Settlement Statement when it came time for the closing, making it difficult for the consumer to review and confirm if any changes occurred. These differences made it difficult for consumers to truly understand their costs. The LE and CD can be considered a truer apples-to-apples comparison, and it is much easier for consumers to understand any changes that have been made throughout the process. Beyond this, the rule falls short in other ways. It’s true that the “Know Before You Owe” rule gives the consumer a better comparison for the different loan types and products. The new disclosures also provide consumers with their total monthly payment, how much money is needed to close, and any required prepaid items. However, the disclosures do not take into account several factors. An example to illustrate is when the costs on the LE may not be the costs the consumer has to pay at closing because they are going to be paid by either the seller, lender, or other third-party. It is common for a loan transaction to have changes in settlement fees, changes in closing dates, new contingencies based on a final walkthrough, or a renegotiation of the purchase price. These changes have a direct impact on the actual funds the borrower is required to pay and they may not be disclosed

until the consumer is at the closing table. Further, title companies are held to a different regulatory standard than mortgage companies. When a consumer is purchasing a home, they must purchase title insurance and they also have the option of purchasing owners insurance. An uneducated consumer may not understand the value of owner’s title insurance. However, if there is any dispute in the future over property lines or clear title, it has proven to be an essential item. When the loan policy is purchased at the same time as the owners policy, consumers receive a discount commonly known as “simultaneous issue.” The CFPB disregards the simultaneous issue discount when providing direction on the proper disclosure of title fees on the LE and CD. This makes it difficult to explain to consumers the importance of purchasing the additional insurance and it also creates frustration because they do not understand why the discount wasn’t disclosed in the first place. The key word in the rule’s title is “know.” We believe the core foundation of the regulation should be to educate consumers sooner in the process so they can make more informed decisions. In reality, the rule seems to only supply consumers with numbers. The education piece is still missing from the process. Consumers are still not provided with the education to truly “know” what all of it means. The first step in educating consumers on the new rule is being able to understand the rule ourselves. When the rule was implemented, the CFPB provided mortgage companies with Webinars that answered the most basic information regarding the regulation change. These Webinars generated more in-depth and complicated questions. In response to some of these questions brought forth by the industry, there is now a proposed 293-page amendment waiting to be approved. This leaves the question, if we, the professionals, don’t fully understand all the components of the rule, how do we expect our consumers to understand it, too? Does it defeat the purpose of the rule if we have now made things more complicated and confusing for the consumer? The Millennial generation is the next wave of first-time homebuyers. Our firm has several Millennial

employees who have said that they only learned about mortgages once they started working for a mortgage company. Their knowledge is limited to the scope of their positions and much of process still doesn’t make sense to them. They don’t know the nuances of each program, why one may be more beneficial than another, what everything involved in their closing packages actually means, etc. They may not know about the different insurances they need to or should purchase and why each of them is important. They may not know what costs to expect after their loan has closed or what impact the purchase may have on them emotionally. There are also factors like what their personal relationship with money is and what discussions (if any) parents had about finances and mortgages with their children. There is more to purchasing a home than simply the numbers on a piece of paper. As mortgage professionals, it is our responsibility

to educate consumers as thoroughly as we can, regardless of their personal situations, to help set them up for success in the homebuying process. This starts by providing earlier education for our youth. In Wisconsin, financial education programs have been put into place through a volunteer program called “Make-A-Difference Wisconsin.” Volunteers go into schools to teach teens how to understand credit, the importance of paying their bills on time, how to set up a budget based on the amount of money you earn, how to set up and maintain checking accounts, and how to safely use credit cards. The program dives deeper into setting teens up for success for future goals, such as buying a home, and provides long-term financial information that is needed to make the best decisions possible. Our company’s Compliance Implementation Specialist Kimberly Tork is one such volunteer. When I

asked Kimberly about the importance of the program, she said, “It starts with our teens in school. They are our future and we should give them the proper tools to succeed as they grow into adulthood and become future leaders. By setting up our youth for future financial success, it will allow future homebuyers to come in more prepared and with a general understanding of the mortgage process before it even begins.” The CFPB has done a great job in starting to address the issues revolving consumer education and attempting to make the mortgage

process as transparent and seamless as possible, but we still have a long way to go. There is a great need in this country to educate youth before they have become emotionally attached to the homebuying process. By doing this, it empowers the consumer with the information they need before they start shopping for homes, meeting with real estate agents or applying for their first loan! By working towards better consumer education programs, we may start to see more of the intended results that “Know Before You Owe” set out to provide.

Jean Badciong is. She entered the mortgage industry in 1990 at a state bank chief compliance officer for Inlanta Mortgage in Waukesha County, Wis. She worked in all areas of the origination, servicing, quality control and assisted with compliance. Jean is primarily responsible for overseeing and managing compliance, ensuring that Inlanta Mortgage and its employees are complying with all regulatory requirements and internal policies and procedures. She is a participant on the MBA Legal Issues and Regulatory Compliance Committee. 75

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The Essential Ally

Compliance professionals play an array of crucial roles when it comes to supporting loan originators By Kathryn Johnson f mortgage industry “Compliance” were a person–what would this individual look like? Perhaps a wise librarian, who has the knowledge that is a central means of support for you–the loan originator. Or maybe a clever detective, whose intuition and problem-solving skills are also a supreme help to you. Possibly a thoughtful teacher, who offers the guidance and knowledge you need to grow in your own role. And perhaps most importantly, an enthusiastic cheerleader, who celebrates your successes and roots for you from every loan application to closing. Hopefully this mental imagery brought a smile to your face, but

it also paints a very true picture of the role that compliance professionals play when aiding loan originators. In all reality, your compliance team is your true ally when it comes to helping you close your loans in a compliant and timely manner. As the mortgage industry becomes more complex and undergoes more regulatory scrutiny than ever, you may discover that tolerance violations, valid changed circumstance, and other TRID nomenclature all seem like Greek to you … and you’re not alone! Fortunately, if your company has a compliance team, you have built-in supporters. Compliance professionals are

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well-versed in consumer protection laws and regulations, and can therefore provide that crucial support that you need to navigate this increasingly complex industry. They live and breathe regulatory jargon and procedures–so you don’t have to. With compliance on your side, you can focus more on growing your business and serving your borrowers, knowing that your allies are working behind the scenes to support your efforts. Too often, loan originators think of their compliance team members as the people they see only if something goes wrong. But this isn’t true at all. By working side by side with your compliance team, and utilizing their knowledge and expertise, you can efficiently and compliantly close your loans. So, how does compliance aid your efforts? These multifaceted professionals certainly have many benefits to offer. Problem-solvers As a loan originator, you’ve probably come across some “unique” situations when it comes to helping your borrowers through the loan process. When confusion over a particular regulation or process arises, your best bet is to approach your compliance team for guidance. They act as an excellent sounding board when you’re unsure of how to handle specific situations. One of the most detrimental mindsets you can develop is believing that your compliance team is only there to say “no” to your ideas and suggestions. Instead, think of them as problem-solvers who can offer you solutions that you may not have originally considered. They can almost always find another path to get you where you want to be. Also, if your LOS has compliance-testing built in, your compliance team can help you interpret the findings and uncover a solution to your

question or problem. So, when you’re feeling uncertain about which direction to take, concerning a particular loan or regulation, don’t feel like you need to figure it out on your own. Your compliance team is there to help you get out of these tricky situations. Suspicious activity detectors Another inevitable part of being in this industry is detecting and dealing with suspicious activity that you may encounter with some of your potential borrowers. If a borrower acts in an unusual way, and you’re not certain what course of action to take, your compliance team can help. In fact, compliance is often a loan originator’s first line of defense when it comes to these circumstances. If you believe a borrower may be secret shopper or a fraudster who is purposely trying to trip you up (with the intent of later claiming discrimination), don’t allow yourself to be set up for failure. Regardless of the borrower’s intention, approach your compliance team if you have questions on how to proceed without getting yourself into hot water. Your compliance professionals can help you stay on the right side of the Equal Credit Opportunity Act (ECOA), and your conversations with them will stay within your company. Oftentimes, your compliance team is also working behind the scenes to analyze data and uncover potential concerns. You may not always be aware of it, but these professionals help mortgage lenders stay clear of costly enforcement action–which ultimately benefits you and your business. Regulation gurus Above all, compliance professionals are well-versed in mortgage regulations. With the industry continuously changing, it’s not feasible to expect loan originators to stay abreast of every minute detail and change to regulations–especially when you already have so much on your plate.

But that’s where the compliance team comes to the rescue. As experts in this area, they are very familiar with consumer protection laws and other regulations. They can help protect the bottom line, particularly in light of the significant changes to fee disclosures that came from TRID. Compliance experts can also offer guidance with other regulations like Ability-toRepay/Qualified Mortgage (ATR/QM), Homeownership and Equity Protection Act (HOEPA), or Higher Priced Mortgage Loans (HPML), and appraisal rules (for instance, whether you can charge certain fees, or how to handle changed circumstances). Think of your compliance team as a complimentary source for free and reliable advice! All-around advisors In addition to being a helpful

resource for loan originators, compliance professionals also offer support to mortgage lenders in a variety of other ways. Their expertise can be especially helpful when assisting the marketing team’s efforts to create new flyers, e-mails, presentations, social media content and much more. At many mortgage lending companies, compliance also develops and implements important training efforts and materials. By helping mortgage professionals develop a deeper understanding of vital regulations and policies, your compliance team is helping you build a foundation for a more successful organization. Resourceful experts Putting this all together, it’s easy to see that compliance professionals play a variety of roles, but they are all essential

“By working side by side with your compliance team, and utilizing their knowledge and expertise, you can efficiently and compliantly close your loans.” to the smooth operation of a successful mortgage lending company. Whether it be assisting you with regulatory guidelines, helping you safely avoid suspicious borrower activity, or steering you in the right direction in terms of training, your

compliance team is an indispensable resource. So no matter if you picture them as librarians, detectives, teachers, or cheerleaders–know that your compliance professionals have got your back, in more ways than one.

Kathryn Johnson is vice president of compliance for Waterstone Mortgage Corporation, and has more than 10 years of mortgage industry compliance experience. She may be reached by e-mail at KJohnson@WaterstoneMortgage.com. 77

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Improving Loan Quality and Reducing Risk Through Automation By Jay Coomes he ever-evolving lending landscape is shifting, understandably to become more proconsumer, but for mortgage operations, this means more complexity, operational difficulty to implement on a timely basis and leaves no margin for error. These legislation shifts present a myriad of challenges for mortgage lenders. September 2017 will see the new Uniform Closing Dataset (UCD), which will help promote accuracy, consistency and clarity around loan transactions. The data must represent the agreedupon terms of the loan and contain the most accurate

information available at the time of loan delivery. This summer, the Consumer Financial Protection Bureau (CFPB) proposed updates to its “Know Before You Owe” mortgage disclosure rule, designed to help borrowers understand the terms of their home financing transactions. The proposed changes are intended to provide more clarity and preserve protections for consumers. These legislative reforms add to the challenges faced by loan servicers striving to balance profitability, risk management and the consumer experience– which ultimately manifests as overall customer satisfaction. Mortgage banking is sales

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dominated–salespeople are transaction and commissiondriven, yet many companies allow salespeople to make changes to loan data. Many of the top executives in the industry come from sales, and profitability is driven by originating loans. Decentralized processing and closing continues to be endorsed, even though it is much costlier, not easily automated and efficiencies cannot be fully realized. The outcome is that processes are “people controlled and defined” versus rules based, managerially controlled and exception focused. In this new paradigm, winning financial institutions will be the ones that transform their business models to place loan quality and risk management at the center of their operations. To facilitate continuous life-of-loan management, inclusive of the requisite data transparency and audit trails that support loan quality and loss mitigation, these institutions will implement and automate a loan completion system. Such a process will manage data quality and access to loan data and documents throughout origination, servicing and sale on the secondary market. Utilizing technology to turbocharge quality control The use of disparate systems creates data transfer and reporting issues between loan origination systems (LOS) and servicing systems. While it is true that legacy LOS and servicing systems are comprehensive databases of record for the transactions in the lending chain, creating and maintaining a quality, auditable, saleable loan unit requires more than just system-generated transactional data. A marketable loan unit also requires signed legal documents, plus the documentation and transactional data that prove and justify decisions made during the life of the loan. As a result, lenders need an effective loan completion system that goes

beyond enterprise content management functionality to ensure a higher quality loan package by governing the capture of point-in-time origination, servicing and loan disposition events, and related loan documents to support loan quality. A loan completion system automates loan quality processes into origination, servicing, loss mitigation and secondary marketing workflows, and facilitates the handoff and sharing of information by providing the ability to view and compare multiple loan documents and records from a single view. An effective loan completion system incorporates the following five vital components: l Capture: Enhanced capture technology capabilities for extracting keyword data from scanned documents utilizing zonal OCR (Optical Character Recognition–the best engines can “read” the documents and recognize 80 percent to 85 percent of the documents), intelligent templates, automated indexing and full document recognition should be readily available. l Tracking: The tracking of any loan conditions and their disposition for efficiency of quickly processing and resolving any outstanding issue, and for later use as evidence of compliance. l Data confirmation: Automating the traditional manual “stare and compare” process of confirming data between multiple systems and/or documents to systems. l Compliance review: Ensuring that the data being prepared matches compliance requirements by automating submittal and compliance checks prior to delivery to help comply, reducing exception conditions and thus processing time. l Compliance review: Automatic submittal and compliance checks against compliance requirements prior to delivery to help comply with regulatory requirements, reduce exception conditions and thus processing time.

l Delivery: Processes and workflows should provide final validation and verify delivery of the completed loan documents to the correct destination. Delivery processes should ensure required documentation and collateral documents exist, are kept up-to-date, and assist in managing the relationship between borrowers and the financial institution. Delivery processes should support multiple destinations, including insurers (for example, the Federal Housing Administration and Veterans Affairs, investors, auditors and legal entities).

Loan completion systems safeguards loan quality and mitigates risk The trends associated with modern-day lending demand that mortgage lenders consolidate and automate to enhance the bottom line and reduce regulatory risk. Without a

approach to managing loan quality will define which financial institutions rise to meet the new challenges presented by the current increasingly complex lending climate. The loan quality assurance facilitated by loan completion systems will help institutions overcome systems limitations, leverage secondary market opportunity, help avoid compliance issues and enhance the life-of-loan experience for borrowers.

Jay Coomes is vice president of product management for financial and risk management solutions at Fiserv Inc. In this role, Coomes directs the product strategy for enterprise content management products and process automation solutions from Fiserv. Coomes has more than 30 years of experience in software product development, process automation and solution design.

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material change in approach, many companies will not be economically viable. Siloed lending technology inhibits loan quality assurance and risk mitigation, andâ&#x20AC;&#x201C;in addition to increasing operational cost and riskâ&#x20AC;&#x201C;the use of disparate technology negatively impacts the consumer experience with expectations for error-free loan processing going unmet. Implementing loan completion systems and taking a centralized

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By automating loan quality assurance, the loan completion system ensures individual steps within the life of loan process are definable and traceable. Automation can assist in making certain that loan data meets standards at all quality gates and regulatory checkpoints. Ideally, the loan completion should be flexible and configurable so lenders can design their loan completion processes to meet ever-changing regulatory demands and specific institutional needs. The loan completion process should leverage automation to gather and manage system data and documents. By using a loan completion system, lenders can bring tremendous efficiency to this space and eliminate risk associated with nonstandard processes and multiple systems. The loan completion advantage can be summarized in five distinct areas: l Standardized workflows: Human-, document-, and process-centric workflows are combined, along with enterprise content management and current best practices, to provide a powerful turnkey solution. A loan completion solution automates quality control processes into loan origination, servicing, regulatory compliance and secondary marketing

workflows to enhance and optimize end-to-end lending operations Automating manual data review audit processes: Loan completion systems allow for the reviewing of all available loan documents at a glance. Documents are intelligently indexed with critical data extracted for easy comparison. Unlike with errorprone manual views, data mismatches are flagged early in critical processes to expedite corrections and help maintain the integrity of loan data from origination to completion. Audit trails: Loan completion systems offer complete audit trails to facilitate compliance, make reporting capabilities more robust and provide transparency into life of loan processes. Electronically categorize and track loan documents for all channels of lending from a single intuitive platform: Loan tracking systems provide an intuitive single-view interface that centrally store documents electronically, as well as categorize and track loan portfolio content for the commercial and consumer lending space. They ensure current loan documents, financial reports and collateral documents exist, are kept upto-date, and assist in managing borrower and loan portfolio information. Increased revenue and a better consumer experience: Loan completion systems detect document errors and match data coming from other processing sources, reducing processing time and expense. This also reduces purchasing risk and delivers a stronger customer experience to the buyer.

hardly surprising that many lenders de-emphasized the importance of bank statements (or even eliminated the requirement to provide them!) pre-housing crisis. frequently missing documents. sufficient funds for closing. It ow many more Yet the data locked away in In addition, statements must can also be one of the biggest loans could you borrower bank statements be delivered to the GSEs exactly contains a wealth of information hassles for both the LO and the close if you as they were delivered to the borrower, because it’s not an didn’t have to regarding a borrower’s ability to borrower, meaning all pages— easy, straightforward process in track down repay, most of which has even those marked blank–must its current state. borrower remained untapped until recently be included in the loan file. On average, a borrower paperwork? because the capability to quickly That’s not always intuitive to needs to provide at least three The mortgage industry is and easily extract and analyze borrowers, who often fail to months’ worth of bank rapidly approaching the point of this information did not exist. submit these seemingly statements. Assuming that the straight-through processing, Cash flow, employment superfluous pages. That forces borrower responds to the where all of the necessary data income, residual and the LO to request an additional request immediately, it can still to qualify a borrower comes discretionary income and other copy of that particular bank take several days to track down directly from the source, is asset details can be rapidly statement, most likely to both the required statements and analyzed automatically and identified and analyzed using the LOs and the borrower’s deliver them to the LO in an generates an approve/deny automated asset verification annoyance and chagrin. acceptable format. decision without anyone ever When coupled with a credit Let’s not forget that collecting report, the asset report tells the Depending on the borrower’s having to touch the data. This bank statements is more than an complete story about a account activity in any given objective approach to administrative exercise. The LO month, each bank statement authenticating a borrower’s borrower’s ability to repay, could contain 10 or more pages. must actually use the statements allowing LOs to make better loan bona fides won’t just speed to make an ability-to-repay closing, it will also protect That’s a lot of paper to keep decisions. In fact, it’s entirely determination. Unfortunately, against investor buyback track of, and in the course of possible this detailed level of when asset information is day-to-day operations, it’s easy requests if the loan defaults. asset analysis could have delivered in a static format for one or more of those pages This reality is a lot closer than mitigated many of the factors (whether paper or PDF), its to get lost. Fannie Mae has you think. However, to get that lead to the mortgage crisis. usefulness is severely limited. there, loan originators must take estimated that 40 to 60 percent With today’s asset verification LOs must hunt for key data of the repurchase requests it advantage of the solutions on technology, borrowers can avoid issues are ultimately resolved by points, detect and analyze cash the market that make this the hassles associated with supplying documents that were flow patterns and anomalies, and paper-based bank statements scenario possible. calculate ability to repay—all missing when the file was Take, for example, asset and provide secure, direct manually. It’s a labor-intensive originally submitted. General verification. This is a missionaccess to the data contained process that is difficult to income and asset critical component of assessing within their bank statements streamline, because every bank documentation and verification both a borrower’s ability-to(which is what LOs really want). statement looks different. It’s repay and the presence of of deposit top the list of From there, asset data can be verified and analyzed in a secure, GSE-approved format in less time than it takes to complete the 1003, thus providing a much clearer, fulsome picture of the borrower’s true eligibility via a surprisingly easy process that wins points with the borrower for its simplicity. The benefit of saving this kind of time on a key activity in the underwriting process cannot be overstated. TRID has, without a doubt, significantly increased the time it takes to close a loan. Based on the most recent data from Ellie Mae’s Origination Insight Report, the industry is averaging around 46 days from Join the new Facebook group by searching for “OrigiNation.” This public and open group features information that will be featured in the application to closing. “OrigiNation” column in National Mortgage Professional Magazine, with your consent of course, by Andy W. Harris. People want to hear Anything that can streamline from you, the mortgage originator, from the good stories to the bad, from the funny to the serious … take this opportunity to connect and aspects of the origination share. Search today on Facebook and join the group! process is going to help lenders Are you an originator? Send your stories! To have topics considered in future editions, please e-mail me with “OrigiNation” in the Subject Line at AHarris@VantageMortgageGroup.com. These can be confidential or your name and company can be referenced if you wish. reduce their average loan turn time. In a market where it takes

New Technology Brings Relief … Embrace It By Brent Chandler

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of LO veterans. The primary role that the LO plays in the mortgage transaction is to serve as a trusted advisor for the borrower, but new rules like TRID have pushed more responsibilities onto the LO, inhibiting their ability to establish relationship and build trust with borrowers. For LOs to be successful in the current regulatory environment, they need to embrace technology that supports their efforts to close more loans faster with a higher level of quality. With regulators and GSEs alike pushing lenders to adopt more automated processes, now may be the time for LOs to take a chance on the new kids on the block.

Luckily, there are a slew of systems on the market today that can help LOs do just that. The times, they are achanging, and for those “mortgage meltdown survivors” that lived to fight another day, it’s time to adapt once more and embrace technology to improve operational efficiency, enhance overall loan quality and ultimately provide a better borrower experience. The caliber and ease of implementation of today’s mortgage technology solutions are vastly superior to their predecessors, and it behooves forward-thinking LOs to give process innovation via automation a second go-round.

Brent Chandler is founder and CEO of FormFree Holdings Corporation in Athens, Ga. Brent can be reached by email at Brent.Chandler@FormFree.com.

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where it wasn’t uncommon to go through an entire RFP process with a vendor only to find that the scope of work was going to take a year or more to complete. “Vapor-ware” was rampant in the industry at this time, and in the aftermath of the mortgage meltdown, many vendors were open for business one day and closed the next, leaving lenders who took a chance on “the next big thing” holding an empty bag. However, today’s technology vendors bear little resemblance to the flash-in-the-pan upstarts that quickly fizzled in the wake of the subprime crisis. One must bear in mind that the mortgage technology landscape has shifted dramatically over the past decade. Software-as-a-Service (SaaS) for the mortgage industry was really in its infancy in the mid-2000s, so IT projects were a much bigger undertaking back then. With the advances in SaaS deployment and the advent of cloud-based technology, software implementation is a far more streamlined, efficient process today. In addition, there is a far better screening process in place, as lenders are more careful today with their technology investments than they were in the cash-flush mortgage boom. It is also worth noting that the term “big data” wasn’t even in most lenders’ lexicons in the mid2000s. It’s really only been in the past five to seven years that the mortgage industry has come to embrace data intelligence as a means to gain much-needed efficiencies and improve loan quality, and current mortgage technology providers have stepped up to the plate by incorporating digital data capture and analytics into their systems, providing lenders with the ability to harness the power of data to gain much-needed efficiencies and improve loan quality. The cream always rises to the top, as they say, and those LOs that survived the great “culling of the herd” did so because they were adept at originating highquality, performing loans. However, the fast-and-furious regulatory and culture changes that have occurred in the industry over the past few years have taxed even the most battle-tested

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more than a month to close a loan, the ability to close loans quickly is not only going to differentiate you from the competition, it’s also going to earn you the respect of—and possibly referrals from—the real estate agents associated with those closings. Also, delivering this kind of streamlined, seemingly effortless consumer experience puts you on the right side of the CFPB, which has telegraphed to the industry time and again its expectation that lenders provide a transparent process where the consumer feels empowered and informed. Though this expectation has not been explicitly codified into a requirement, to ignore this implicit mandate is to do so at your own peril. Furthermore, automated asset verification kills two loan quality birds with one stone—missing documents and income/asset fraud. Anyone with access to a computer and halfway decent graphic design technology can easily falsify or manipulate a bank statement. Working directly with the asset data from the borrower’s financial institution eliminates the possibility of missing asset documentation and ensures that the analysis of the borrower’s assets is based on accurate, tamper-proof information. Asset verification isn’t the only task that can be streamlined through the use of technology. In fact, using automation to verify other key pillars of the loan, like employment, income and identity, can also inject much-needed efficiency into the underwriting process. With a variety of wellestablished systems on the market for eSignatures, eClosing and other eMortgage-related activities, lenders are in the best position they’ve ever been in to create an entirely digital and fully optimized origination supply chain. The digital era of mortgage lending has begun, yet many loan originators (LOs) are reluctant to dive head first into the slew of new technologies on the market … and understandably so. Veteran LOs shudder when recalling tech implementation projects during the boom years,

How HMDA Data Can be Used as an Effective Tool to Guide a Diverse Sales Strategy By L. Maria Zywiciel t’s that time of year when the leaves turn color, the air gets brisk and when new Home Mortgage Disclosure Act (HMDA) data is released! Though critically important data for all lending institutions, the HMDA data is seldom a report that is sought after by departments outside of compliance. Typically, compliance officers are usually the keepers of the prized data, but if utilized well, HMDA is used to enhance operations, eliminate redundancy, and proactively monitor fair lending and data integrity risks. However, if I were in a sales/production role I would be proactively seeking out the information to guide the company’s diverse market strategy.

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1. Know your territory and it’s diverse market potential Most sales leaders know their territories well, but rarely realize the demographic trends happening within them. Having a territory that is experiencing major demographic shifts can be an excellent opportunity to gain market share, as well as serve individuals that may not otherwise be aware of their ability/capability to be a home

owner. A good place to get a broad view of what’s going on in your area would be Census.gov. 2. Talent review and language capability Understanding the demographic trends in your area will also help you determine whether or not you have the right people in place to serve the community. If you know you are in a market with a high concentration of Latinos, chances are you will need someone who can speak Spanish. Also, make sure you confirm the proficiency level of the candidate. Someone who can order off a Mexican menu doesn’t constitute a proficient speaker! Did your previous year’s HMDA volume match where your market and people are? Although HMDA data is dated information, it’s a great way to directionally see if you are missing the mark in your market. Did your diverse volume match the demographics in your area? Which lender did? Use that information for best practices, marketing and recruiting purposes.

“Though critically important data for all lending institutions, the HMDA data is seldom a report that is sought after by departments outside of compliance.” 1. If it did, you have a success story you want to leverage and replicate: Don’t be surprised when you come across a market where you are doing well! As a consultant, it’s always great to see a client pleasantly surprised when they have a success story that they simply weren’t aware of. Understand what’s being done well and replicate if possible. 2. If it did not, you know where you are missing the opportunity and where you should focus your recruiting and marketing efforts: If you aren’t doing well in a particular area, fix it! Your HMDA data can also help you guide what you need to fix.

Are your applications at par with your peers? If so, perhaps you need to do a deep dive on the back end process? Do you close well compared to your peers but your applications are below the peer group? Then perhaps you need to focus on your front end outreach and marketing. Make the data work for you. Share the data as fast as you can with your internal partners. Have a cross-section of departments represented to see how the data can work across all functions. Properly interpreting the data will provide a clear direction to the benefit of the organization and borrowers.

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

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Laws to Live By hroughout the history of mankind, laws have been used to try to force people to behave morally. Isn’t that a real shame? Shouldn’t people be nice to one another without having to have the threat of fines and prison time to punish them? What is going on with our society? Do we need a law to remind you to make you hold the door open for an elderly lady? Excuse me while I go on a rant, this just happened to me and I am still steaming. I recently got an FHA purchase which was turned down by another lender. It is a new construction deal and the

By Eric Weinstein

lender waited until the DAY BEFORE CLOSING to tell the borrowers they could not be approved. Well, I can approve them, brokers have tons of wholesalers with which to work and a lender only has their one, elderly, spinster underwriter who hates the world. It happens, underwriters are people, and have different ways of looking at things. One may say “No,” another may say “Yes.” (As I learned as a child, when I asked my mother for a motorbike and she said “No,” I asked my father, who gave me a “Yes.”) No big deal. The “Loan Arranger” to the rescue. Hi Ho, Silver, away! I got this. So I get everything from the borrower the next day and all we

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The Forty Most Influential Mortgage Professionals Under Forty

“Shouldn’t people be nice to one another without having to have the threat of fines and prison time to punish them?” need is the FHA case number assigned by the old lender. No problem, should be a piece of cake, they turned it down. It is not like I am stealing their deal. But wait, Tonto, it is not so easy after all. I don’t know if their loan officer is trying to save to deal, but day after day goes by and no case number transfer. Finally, I look up the law using a Google search and find this, thanks to Gerard Glavey, SVP at LoanLogics: BLogics.LoanLogics.com/Transf erring-FHA-Appraisals-CaseNumbers-to-Other-Lenders/. In the recently issued 4000.1 Handbook (which became effective for all loans obtaining their case number on and after 09/14/15), HUD/FHA has established a goal for lenders to process case reassignment requests within five business days of receipt. Previously, HUD did not establish a specific timeframe for processing case reassignment requests but expected lenders to cooperate in these types of situations. The real objective is that FHA expects lenders to accommodate the borrower’s wishes in a timely manner and not hold their case number and/or appraisal hostage when approached by one of their competitors with a case reassignment request. Also, if HUD begins to recognize a pattern or trend involving a particular lender that is not cooperating in making timely reassignments—that

could result in that lender being targeted for an on-site review by HUD’s Quality Assurance Division staff. So, low and behold, on the fifth day, we get the case number transfer. But wait. A few days later FHA comes back and says the case number does not exist. Only by luck, we find out that the old lender “mistakenly” transposed two numbers, and we get the correct case number. Then it is five more days of waiting. All the while, the builder is yelling at ME! Why is there a hold up with you? What is taking so long? When can we close? In my opinion, this is exactly what FHA is talking about when they say “holding a case number hostage” while they try to get the loan approved. There is no law against any of this. But to me, it is just not moral or ethical. It is just plain wrong. In this issue all about “compliance,” let’s not lose sight of WHY we have laws and why we should comply with them. Behind every statute are the regulators doing their best to protect people from what I would just term “evil” behavior. Comply with both the letter and the spirit of the law because it is the right thing to do. In the famous words of Rodney King, “Can’t we all just get along?” Writer’s note: If you are too young to understand the reference to “The Lone Ranger,” go take a picture of your lunch and Snapchat it to your friends while we grownups talk.

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

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How to Rebuild Consumer and he mortgage industry broke the trust of the American people and private mortgage investors back in 2008, and it has yet to fully repair either relationship. But it’s not too late.

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The two groups most damaged by the 2008 crisis 1. Consumers’ broken trust U.S. citizens paid for the mortgage crisis in more ways than one. First, up to 10 million families were displaced, according to the National Center for Policy Analysis. These people lost their homes to foreclosures. There are a number of factors, but bad underwriting practices and other scandalous behavior from financial institutions played a major role. Second, when the banks went belly-up, taxpayers footed the enormous bill to bail them out. This, among other atrocities, decimated trust in the mortgage and banking industries—even affecting young members of the workforce so profoundly that they are putting off buying homes to avoid deeper debt, and because they fear falling victim of what their parents went through. Many Millennials (68 percent, according to a recent Facebook study) are also willing to change banks, showing a lack of loyalty to financial institutions. Indeed, some have already switched to Fintech solutions, or have said they are planning to switch in 2017, displacing traditional banking with services like mobile-first, or online-only branches. Consumer adoption is still minimal, but a FICO study showed that 16 percent of 25- to 34 year-olds might open an online-only bank account in the next year. Unfortunately, market share displacement and a negative history are not the only problems the mortgage banking and financial industries have to overcome in order to heal their relationship with their customers. When recent news broke involving large banking fines for abusive cross-selling tactics, trust was further eroded. This, along with other negative

headlines for noncompliance and less-than-best practices, has stalled any increase in trust for the financial industry. 2. Private investors’ broken trust When the mortgage crisis imploded, private investors were the ones left holding the poor value of the U.S. market. They still haven’t returned to back housing, leaving the GSEs as the main pillars propping up the secondary market. The danger in this is that the government-sponsored enterprises (GSEs) were never meant to prop up the American housing market for this long; they were supposed to be a crutch, not a second leg. This is because the GSEs are federally funded—i.e., by U.S. taxpayers. They are not sustainable and are set to start winding down their support in 2019. The key to repairing trust in mortgages How can trust be restored? How do we rebuild what was torn down? Time does not necessarily heal all wounds. It requires something else as well: Consistency. Everyone struggles with consistency from time to time, whether it comes in the form of eating healthy, being on time to work or making sure to spend time with the kids. But it’s crucial if you want to repair

trust—whether it is in yourself, your company or your industry at-large. Consistency is regular reassurance that change has occurred—that things are different and the same mistakes won’t happen again. To bring private capital back to the secondary market, and to gain trust from homebuyers, the mortgage industry needs to be consistent with its handling of the loan origination and closing process. Repairing consumer/homebuyer trust The mortgage industry needs to better engage the homebuyer/consumer. Recent regulatory changes have made strides toward this goal, but the process is still complicated and hard to understand for those who don’t work in the mortgage industry. Despite being “the star of the show,” the homebuyer is minimally involved in approving data accuracy within the software systems where information about them lives. They are told to bring the data, but do not, as a general rule, validate that the data was entered correctly or not. This is because early disclosures and final documents are not wellsuited for the consumer to prove information accuracy. Homebuyers

struggle to understand the terms and are focused on the cash to close, payments, etc., not necessarily on data integrity. They may not comprehend in the midst of so many important decisions that the lender needs them to validate their current address, for example, or why it is so necessary. This is where postclose review errors happen. It’s at this data entry stage where simple mistakes could be corrected Who knows better than the customer how to spell their name, or that their home address is missing a number? The consumer is the best person to recognize these points, for the simple reason that the information is about them. And yet, in many cases, the homebuyer does not understand they are being consulted to approve these data sets. So the most

nd Investor Trust in Mortgages interested, and probably most available consultant to fact check a mortgage, is left out of the process. Instead of trying to do so many things at once with an overwhelmed homebuyer, data integrity can be checked separately—with the specific instruction that it is vital for them to certify the information provided about them is correct. This is where consistency can bring back consumer trust. The mortgage industry can provide consistently accurate loan data with the simple act of bringing homebuyers into the process itself. Repairing private mortgage investor trust On the other side of the mortgage transaction, we have the private mortgage investor. Repairing this trust will require incentivizing them with pools of proven compliant loans. Not simply QM, not simply zero tolerance. The PLS needs a

supply of loans consistent with regulators’ guidelines. That means complete documentation of actions and communications throughout the loan origination and closing process. This would require a process at the highest level, where everything is tracked and auditable across all participants to a transaction. That way, if challenged by regulators or a lawsuit is filed; the investor with assignee liability has the protection of a complete and compliant audit report, ready to prove the integrity of the manufactured asset. They’d be in the clear … consistently. A transparent process like this would also mitigate errors and mortgage violations in the first place. Consumers can help bring back investors These two groups are on opposite sides of the mortgage spectrum—as far apart in the

transparency, better data integrity and proof of compliance. This will, in turn, open up the housing market to a wider array of applicants. Strict lending requirements could ease up a bit, and more people would be able to buy houses—but not in the risky style of underwriting and lending that characterized the 2008 crisis. Private capital must return to the secondary market to truly reinvigorate the U.S. economy. To do that, the mortgage industry— on both ends of the transaction and everywhere in between— needs a heavy dose of trust, built on consistency.

Wes Miller is CEO and co-founder of ATS Secured, a new technology category for the real estate closing industry. Miller has extensive experience in developing and marketing both core and ancillary financial products. Wes has been recognized for his success in sales, customer service and training support staff. He may be reached by e-mail at Wes.Miller@ATSSecured.com.

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“Unfortunately, market share displacement and a negative history are not the only problems the mortgage banking and financial industries have to overcome in order to heal their relationship with their customers.”

lifecycle of a loan that you can get. But they can benefit each other. By consistently involving homebuyers in the origination and closing process, mortgage investors can have consistently accurate loans at their disposal—complete with the best documentation and proof of compliance. This is of interest to the sidelined PLS market and will result in greater volume on the secondary market. When it comes to nonconforming loans, investors would be more inclined to absorb greater risk when combined with greater

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The One Tool We All Have But Seldom Use Correctly to Grow Our Business By Brian Sacks

E-mails E-mail is the most prominent way people communicate with each other now. It is efficient because you simply type your message, hit “Send” and off it goes. But emails are often also the cause of unnecessary conflicts and misunderstandings. To begin with, there is no guarantee that your e-mail even got through due to the high sensitivity of SPAM filters these days. Next, it has to be opened and then, of course, it needs to be read. To assume all of these things have happened with your e-mail can be dangerous. But there are other problems with non-verbal communication, like text messages and e-mails. The recipient truly has no way of sensing or understanding your tone or true intention. I’m sure you have had your own misunderstandings due to a quick e-mail response that was not really well thought-out before it was sent. It’s important to also realize that your tone and intent is not well-communicated via e-mail. Going back to “Sales 101,” we know that a person must know, like and trust you before they do business with you, and e-mail can rarely accomplish all three methods effectively. So what is the solution? First, always think about what you are trying to accomplish. Are you trying to be efficient or effective? I personally believe that in order to communicate something effectively, nothing beats the phone or even an inperson meeting. As an example, let’s say you

have a loan closing today. You can send an e-mail wishing the clients good luck or you could text them. But both are not very intimate options. Instead, drop by the closing. If your schedule doesn’t allow for that, call the buyers and agents and wish them good luck. Follow that up with a nice letter or hand written note. Bottom line … using all forms of media is most effective One of the great tools I just found and have listed on my resources page at TopOriginatorSecrets.com does solve some of these issues. It is a new tool that allows you to send video e-mails either as a broadcast to many or one to one. This system also has the power to tell you who opened it and when they opened it. Using this new video e-mail tool, you can simply hit record on your computer, look into the camera and hit send. The recipient is now able to tell exactly what you mean by your tone and body language. It’s the next best thing to being there inperson without leaving your chair. This tool often reminds me of how the future was portrayed on The Jetsons, but the truth is it works and you should try it for yourself. The key is to be real and not worry about being perfect or creating a Hollywood quality video. Most computers these days have a camera built in, as well as a microphone. Just in case yours doesn’t, then use your phone. These days, phones have better video HD quality than many camcorders did just three to five years ago.

But what if i don’t know what to say? I am going to give you a little trick okay? Put a copy of someone just above the camera and just simply speak to that person. Remember, there is no need to be perfect, but the key is being authentic. What would you say to that person if you were standing right next to them? Just yesterday, I sent five real estate agents a 30-second video. Here is the script: “Hi Joe, I hope you are doing well. I know we haven’t spoken in a while, and I just wanted to touch base to say hello. If you have any new clients you are working with, I would love to help. In fact, we have a few new programs that might be of interest. “I hope we work together again soon, and would love to catch up in-person so let me know what times might work for you.” This is a really simple script that truly will not take long to record and send with tools like video email. It’s personal and much more effective than an e-mail. Want to turbo charge this method? Send that same real estate agent a card with the same message and some cards, or just call them on the phone. The key is using as many media options as you have. It’s not that any one method is better than the other, but I hope you now have a better idea of which ones to use in various situations. Give it a try, and let me know the responses you get and the new deals you are working on as a result.

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

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Text messages Text messages are good for short and urgent matters. They are efficient and effective if you are confirming an appointment or asking short questions that require short answers. Unfortunately, I too often see text messages that would be considered too long even if they were e-mails or written letters. When I see these types of messages I actually just call the person and speak to them.

Direct mail Yes, I know you think writing a letter or sending a direct mail piece is now as effective as the drawings that cavemen posted on the walls of their caves. But, I will tell you that when a client or a referral partner receives a shorthand written note, or typed and signed note, they absolutely love it. Even more so now, so few actually send notes.

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know I am dating myself here, but I remember growing up with a rotary phone and remembering how amazing it was when we got our first push button phone. In fact, I recently saw a pay phone in a museum and had to explain to my children what it was and how it worked. These days, the majority of our communication is done via e-mail and text messages. Real estate agents, loan officers and the general public all seem to be glued to their cellphones as if it was an additional appendage. You need to stop and think about your method of communication, especially when it comes to marketing. There is a major difference between communication that is efficient and communication that is effective. So let’s take a few minutes to see which mode works best for which circumstance. Before we do, it’s important to also realize that whether we are pre-qualifying a buyer, following up with a real estate agent, or even speaking to internal support staffers, people like a personal touch. What is efficient may not always be the most effective way to communicate. The major ways in which we communicate in our industry are via mail, phone, text message and e-mail. Yes, there are always social media outlets, your Facebook inbox and LinkedIn messages as well, but they are so ineffective that I will just leave them off the table for this conversation.

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Taking the Fear Out o

t of Phone Marketing By Bubba Mills

alloween has come and gone, but I know lots of mortgage lenders who still fear the phone. Most of the lenders and brokers I meet appear to be deathly afraid of the phone, no matter what time of the year it is. That’s bad news because the phone may be your best sales building tool. When you use the phone right, it can:

1. Get crystal clear on your purpose for all calls. Too many lenders just accept that they need to be on the phone, but few really give much thought about their goal for calling. Consider writing a sentence to give your calls direction and purpose, along with what you specifically want to accomplish: To set up a meeting, share a new service you’re offering, talk about changes coming to the industry, etc. 2. Focus more on useful information and less on selling. We all know what

3. Be ready for anything. If you’ve spent any time making calls about mortgages, you know there are tons of scenarios that can unfold–“Sorry, I’m headed to a meeting,” “Uh, now’s not a good time,” and on and on. Certainly respect their time and requests, but also be ready with responses to these various comments so that they do not fall through the cracks unnecessarily. 4. Be persistent. Several studies have found that roughly 80 percent of sales are made after the fifth contact, but that 90 percent of mortgage professionals quit selling before then. Do you know the common denominator of all successful people … they didn’t quit.

I’ve written here mostly about the phone as a sales tool, but let me add its brandbuilding abilities. When people call you or your office, they form an opinion of you and your business just as they would if you were with them in person. You do it, too. Think about the last time you called any business–you were forming an opinion. I strongly recommend you audit how you and everyone in your company handle calls from start to finish. Challenge yourself to come up with five important ways to improve how you handle phone calls– you and everyone in your office. A phone call is anything but an interruption, so make sure when people call, that’s the last impression they get. Make a goal to have everyone in your office answers phone calls with grateful voices– voices that scream “I-want-totalk-you-more-than-anythingelse-in-the-world.” Every time you hear the phone ring, think of it as the sound of a cash register, because in many instances, that’s exactly what it is.

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

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If you hesitate when it comes to hopping on the phone, these reasons alone are enough to work and overcome that hesitation. I also want to share some tips on making the time you spend on the phone more productive.

sales calls are like, and often, they’re not pleasant. Most sales calls create immediate objections and then things can get contentious from there. Instead, share and emphasize information that is useful and helpful.

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l Let you expand on your brand in a personal and immediate way. The only other way to do that is in person. Your direct mail, your e-mail, your ads, your signs … all of your other marketing tools cannot do that. l Boost your sales while dramatically reducing your marketing costs because it’s efficient–you can reach more prospects per hour than you can with in-person visits. l Improve your relationships by staying in touch with existing customers and introducing new services.

“I strongly recommend you audit how you and everyone in your company handle calls from start to finish.”

The Debut of Trended

Opening access to new credit via n October of 2015, Fannie Mae announced its plans for the release of its 10th version of Desktop Underwriter (DU). While most upgrades to the Fannie Mae program rarely rate more than a nodding acknowledgment, this edition had the potential for creating a major change in the mortgage originations through its new ability to incorporate trended credit data into the loan review process. Fannie Mae set a mid-2016 deadline for the launch of DU Version 10, which would enable lenders to use trended credit data provided by Equifax and TransUnion. By bringing trended credit data to DU, Fannie Mae noted that lenders would have a more complete comprehension of borrower’s creditworthiness—with the hope that this could lead to more mortgage originations.

“Our aim is to help lenders serve their customers efficiently so that more qualified borrowers have access to mortgage credit,” said Timothy J. Mayopoulos, president and CEO at Fannie Mae, in the statement announcing the new DU version. “We are enhancing our offerings, improving our tools and innovating through the technology we provide to our customers. Our goal is to make sustainable homeownership a reality in communities across the country while reducing risk for taxpayers.” DU Version 10 was released in October, but mortgage industry experts are taking a wait and see approach on the effect that trending credit data will have on home loan applications. “It is kind of too early to tell,” said Terry Clemans, executive director of the National Consumer Reporting Association. “All of the

work has been done and programmed and prepared for delivery into the system. That impact has a lot of tech adjustments and business model adjustments—now, we need to get data and pass it along.” For those unfamiliar with the concept, here is an overview: Trended credit data leverages a borrower’s balance, payment and credit utilization history over the past two years. This time frame offers lenders a wider understanding of a borrower’s credit behavior in paying down debt. As an example, a lender can judge how a borrower with substantial credit card balances deals with payments—either through paying the amount due in full every month, or paying the minimum requirement. Under previous credit reporting set-ups, this aspect of a borrower’s credit history was never clear.

The trended credit data rollout is currently limited to Fannie Mae—Freddie Mac has not announced any plans to join its fellow government-sponsored enterprise (GSE) in this endeavor, and trending credit data is not being used for Federal Housing Administration (FHA) or Department of Veterans Affairs (VA) mortgages. In a National Mortgage Professional Magazine article from May, Julie Wink, executive vice president of Cordova, Tenn.-based Data Facts Inc., explained that the new trended credit data information will not show on certain account types. “Authorized user accounts, public records and accounts with less than six months of credit history are examples of accounts that will not show trended data,” wrote Wink. “On the trade lines that show mortgage trended data,

ed Credit Data

via borrower behavior the key enhancements are that each trade line will detail actual payments broken out monthly for up to 30 months.” Next year’s challenges? Looking into 2017 and the results that trended credit data will have on the mortgage industry, there is a mix of optimism and concern on this different approach to judging a borrower’s viability. “There are two channels for impact,” explained Michael Fratantoni, chief economist and senior vice president of research and industry technology at the Mortgage Bankers Association (MBA). “The first channel is on borrowers—this will lead to approving certain borrowers or denying others. The view from Fannie Mae is that this will provide some additional predictive power on how people pay on their mortgage credit over time. And

while it could potentially impact a person’s chances for getting a loan over the next couple of years, it should not have a huge impact on the availability of credit. “The second channel is operational,” Fratantoni continued. “Lenders I spoke with are a touch uneasy in moving in the direction that is not as familiar to them. They have concerns because one lesson that was learned from the crisis is that that lenders are responsible for every piece of data sent to the GSEs. Also, there is not a full level of comfort and a certain level of weariness [regarding trended credit data]. But over time, as people become more familiar, I believe that conceptually make a lot of sense for being predictive of a borrower’s performance.” However, some industry experts worry that Fannie Mae’s plan to use trending credit data to expand

By Phil Hall

homeownership may not play out as expected. “It could be more of a negative,” said Rocke Andrews, broker/owner at Tucson, Ariz.based Lending Arizona LLC and past president of NAMB—The Association of Mortgage Professionals. “I could see loans denied that were not denied before. If have been paid down what you owed, that is reflected in your credit score. If not, it could be seen as a negative that you do not manage your credit well. In the past, that was not reflected on credit score—but now it will.” Andy W. Harris, president and owner of Lake Oswego, Ore.-

based Vantage Mortgage Group Inc., agreed with Andrews. “It will give you a lot of information you wouldn’t know before on how a borrower has been doing over the last several months,” Harris said. “It can tell if they will go in a positive or negative direction.” However, Clemans believed that the full impact of trended credit data on the mortgage world will not be clear for some time. “No news is good news here,” Clemans said. “The good news is that will ultimately take a couple of years to play out. At that point, we can look back in hindsight and see less problematic loans.”

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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Rodrigo Lopez Becomes First Latino Elected to Serve as MBA Chairman odrigo Lopez, CMB, executive chairman of NorthMarq Capital, has been sworn in as chairman of the Mortgage Bankers Association (MBA) during the MBA’s 103rd Annual Convention & Expo in Boston. Lopez was previous chairman of MBA’s Commercial/Multifamily Board of Governors. He has served on the MBA’s Board of Directors since 2009, along with a previous stint on the board from 2003-2004. He is also chairman of MBA’s Task Force for a Future Secondary Mortgage Market. Lopez was the recipient of MBA’s Distinguished Member Award in 2010, MBA’s Burton C. Wood Legislative Service Award in 2002, and MBA’s Master Faculty Award in 2000. He has also received MBA’s Certified Mortgage Banker (CMB) designation. As the first Latino in the MBA’s 100-year history to hold this prestigious position, Lopez will lead an organization which represents more than 2,200 member companies throughout the real estate finance industry. Lopez has been an active member of the MBA for the last three decades. Lopez has pledged to uphold the MBA’s mission to promote fair, responsible, and sustainable mortgage practices through both education and advocacy, for the benefit of industry professionals and the families whom they represent. “It is my distinct privilege to serve as the 2017 MBA

Chairman,” said Lopez. “Working with David Motley, MBA chairmanelect and Chris George, MBA vice chairman, I look forward to building on the accomplishments of past chairman and will work diligently to ensure the association serves the needs of its diverse members by addressing the important residential and commercial/multifamily issues facing our industry.” This historic milestone comes at a pivotal time for the Latino community, as Hispanic homeownership has been growing while homeownership among the general population continues a 12-year decline. According to National Association of Hispanic Real Estate Professionals (NAHREP)’s 2015 State of Hispanic Homeownership Report, Hispanic families represent 52 percent of new households over the last 15 years. However, access to affordable mortgage credit remains a primary barrier to Hispanic homeownership growth. These numbers are

especially important considering that Hispanics are poised to add as many as 5.7 million additional homeowners over the next decade. As the most recent chairman of MBA’s Diversity and Inclusion Committee, Lopez worked to advocate for underrepresented facets of the population in order to foster inclusiveness, creativity, and economic growth within the industry. “Rodrigo Lopez represents the best of both our industry and the Hispanic community in the United States,” said Gary Acosta, CEO and co-founder of NAHREP. “NAHREP supports the MBA and Rodrigo Lopez in their efforts to improve and diversify the real estate finance industry and is committed to assisting in every way possible.” Along with Lopez, David Motley, CMB was sworn in as MBA chairman-elect and Chris George was sworn in as MBA vice chairman. Motley is currently president of Colonial Savings and its divisions, Colonial National Mortgage and CU Members

Mortgage, while George is founder, president and CEO of CMG Financial. With more than 35 years in the banking and mortgage finance sector, Motley oversees the management of consumer/commercial banking; consumer direct, retail and credit union mortgage channels; as well as human resources, legal and marketing functions. Motley is the immediate past chairman of MBA’s Residential Board of Governors. He has worked with the MBA’s advocacy programs as a member of the board of directors and has also served on a variety of MBA policy committees and working groups. Additionally, he is an active member of the Mortgage Action Alliance (MAA). Motley is a past recipient of the 2014 Schumacher-Bolduc Award. George is the founder, president and CEO of CMG Financial, a privately held mortgage bank, headquartered in San Ramon, Calif. that conducts business in 49 states and D.C., and holds federal agency lending approvals with HUD, VA, RHS, GNMA, Fannie Mae and Freddie Mac. George has served on the MBA’s board of directors since 2012, is a member of MBA’s Independent Mortgage Bankers Executive Council and MBA’s Consumer Affairs Advisory Council, as well as an active member of MBA’s advocacy efforts. Additionally, George is past chairman of the California Mortgage Bankers Association (CMBA) and has served on many advisory boards and task forces within the industry.

MBA’s Mortgage Action Alliance A Message From MAA Chairman Fowler Williams I am Fowler Williams, president of Crescent Mortgage, and I am proud to chair the Mortgage Action Alliance (MAA). We are a voluntary, nonpartisan and free nationwide grassroots lobbying network of real estate finance industry professionals, affiliated with the Mortgage Bankers Association (MBA). By the time this article appears in print, we will have elected a new President and a new Congress. No matter the results of Election Day, MAA is here and needs your help to have the loudest voice possible on the issues that affect our industry. I’m thrilled to announce that MAA has reached 15,000 members! But our goal is to grow much, much more. The industry’s strengthened ability to navigate and manage policy challenges is critical to our efforts in serving consumers around the nation. For those who haven’t yet, please consider joining MAA and helping us leverage your personal relationships to advocate on behalf of our industry. If you are already a member of MAA, get your co-workers to sign up. Visit MBA.org/MAA to learn more. It’s also my pleasure in this month’s column to introduce you to MBA’s new Director of Political Affairs Alden Knowlton. Alden started in November overseeing MAA as well as MBA’s Political Action Committee, MORPAC. Alden comes to MBA from the National Rural Electric Cooperative Association (NRECA) where she managed the PAC program outreach and education and served as lead facilitator for statewide associations and local cooperatives in their political advocacy efforts. Prior to NRECA, she worked for over half a decade consulting on political campaigns, providing fundraising and campaign strategy services for Congressional incumbents and candidates. Please contact her if you have any questions about MAA or MORPAC at AKnowlton@MBA.org or call (202) 557-2816. Also this past month, MBA launched a new networking platform for women in the real estate-finance industry: mPower–MBA Promoting Opportunities for Women to Extend their Reach–to provide an opportunity for women to strengthen their networks, achieve professional growth, and exchange ideas and information about the industry. Visit MBA.org/mPower for more information. You can always stay updated on current events in Washington, D.C. and your state capitals by connecting with MAA on social media. Find us on Facebook, where we post the latest political news as well as MAA “Calls to Action.” You can also join our group on LinkedIn to connect with fellow advocates and expand your network. 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 of professionals who wish to join the louder the voice! Real estate finance industry professionals who wish to learn more about MAA can do so at MBA.org/MAA. If you have any questions regarding MBA’s advocacy programs, or if you would like to run a MAA campaign, please contact Alden Knowlton at AKnowlton@MBA.org or call (202) 557-2816 or Peter Shapiro at PShapiro@MBA.org or call (202) 557-2933 to receive an enrollment campaign kit and learn more. Fowler Williams is chairman of the Mortgage Bankers Association’s Mortgage Action Alliance. He is also president of Atlanta, Ga.-based Crescent Mortgage. He may be reached by phone at (800) 851-0263 or e-mail FWilliams@CrescentMortgage.net.

“foreclosure clock” start ticking limitations interpretation. Maybe once that threshold was crossed, the outcome in Bartram seemed predictable. Now, going to the law in Florida since Jan. 1, 1975, which was the day the 1974 statute of limitations amendments went into effect, the Appeals Court noted that once the remedy for breach of a promissory note is barred at law, the corresponding remedy on a mortgage securing its repayment is similarly barred. Additionally, the law had long been settled that the exercise of an optional acceleration clause would “accelerate the maturity of the debt” and that “the institution of a suit for foreclosure is the exercise of the option of the mortgagee to declare the whole of the principal sum and interest secured by the mortgage due and payable.” In furtherance of its view, the Appeals Court noted that “not a single appellate decision existed in the state of Florida holding that acceleration could be reversed under any circumstances, much less in order to avoid the absolute bar of a statute of limitations. As a result, the legislature could not possibly have anticipated that the law would be applied in a way that allows a claimant to extend or otherwise avoid the statute of limitations by allowing an accrued claim for foreclosure to be dismissed.” Thus, since the enactment of the 1974 amendments, the Appeals Court stated that “every decision of this Court has approached a question regarding its application in the same way—by seeking to interpret it in accordance with legislative intent.” The Appeals Court also applied the “legislative intent in light of the law as it existed in 1974” to whether once the fiveyear statute of limitations has expired on an accelerated promissory note and mortgage, the mortgage is a valid encumbrance under Florida law. In the Appeals Court’s view, “once the remedy of mortgage foreclosure is barred, the lien ceases to exist as a matter of law and the mortgage holder has no claim against (or any right to) the property.” The underpinning to this view is based on how the Appeals Court has interpreted Florida

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law in the application of the lien theory of mortgages, which simply means that a mortgage is merely a type of personal property that provides the right to have the real estate security auctioned off in satisfaction of the underlying debt once the mortgage is adjudicated to be enforceable by a Florida court. So, “once a claim for foreclosure of an accelerated mortgage has been found to be barred by the statute of limitations, the mortgage (which is merely a right to a judicially sanctioned foreclosure sale) can no longer be said to exist and serves no legal purpose whatsoever.” With respect to the legislative history, Bartram viewed the Appeals Court’s opinion to be “misguided,” resulting from its failure to consider the “limited nature” of the Singleton holding and the fundamental differences between the doctrine of res judicata and the statute of limitations, to wit, that the former is judicially created while the latter is legislatively enacted. But the Appeals Court asserted that the Singleton decision was explicitly limited to the defense of res judicata and its holding was narrow, taking the position that “a dismissal with prejudice in a mortgage foreclosure action does not necessarily bar a subsequent foreclosure action on the same mortgage.” Therefore, the decision in Singleton was based on the equitable nature of foreclosure proceedings and the uncontroversial and well-settled rule that res judicata should not be applied inflexibly where it would cause an injustice. But, opined the Appeals Court, “nothing in the [Singleton] opinion suggests that the Court’s discussion in dicta of the relationship between acceleration and a cause of action for foreclosure should be extended beyond the confines of the doctrine of res judicata and the particular facts before the Court.” Having asserted that the Appeals Court failed to consider the differences between the defenses of res judicata and the statute of limitations, Bartram concluded that “the lower court failed to inspect the language of the statute and did not conduct an analysis of legislative intent.”

According to Bartram, taking the foregoing arguments into consideration, among other things, leads to certain conclusions, some of which are:

Furthermore, the Supreme Court in no way addressed the effect of the involuntary dismissal on the statute of limitations. Justice Lewis brought the concept of “deceleration” into the matter. He believed the decision failed to address evidentiary concerns regarding how to determine the manner in which a mortgage may be reinstated following the dismissal of a foreclosure action, as well as whether a valid “subsequent and separate” default occurred to give rise to a new cause of action. Instead of addressing these concerns,

appraise-snail

conditions, which do not appear to have been satisfied in the record before the Supreme Court. l Parties, particularly those as sophisticated as the banks and other lenders that routinely engage in such litigation, should be required to present evidence that the mortgage was actually decelerated and reinstated, rather than require courts to fill in the blank and assume that deceleration automatically occurred upon dismissal of a previous foreclosure action. In the view held by Justice Lewis, the expansion of the Singleton holding that res judicata “does not necessarily” bar the filing of successive foreclosure actions to the statute of limitations “ignores critical distinctions between these two doctrines, at a serious continued on page 99

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“The BA degree has been of the most stated obstacles,” said Brennan. “The AQB’s entire mission is to protect the public trust. You cannot just change qualifications if there are not enough appraisers. But, on the other hand, if there are not enough appraisers out there, then that harms the public trust.” Brennan noted that a more proactive and positive approach in spelling out the career potentials for appraisals would help fill the ranks of this profession. “I’ve been in the business for years and it has been very, very good for me,” Brennan said. “The AQB is trying to attract the best and the brightest by going to colleges and universities with degree programs in real estaterelated studies.” Brennan also stressed that there were other appraisal possibilities beyond residential property. “There remains a very strong demand for commercial appraisers,” Brennan continued. “That is a well-respected line of business that can provide

outstanding careers for someone coming out of college.” Yet Kreger noted that many college students have been given a warped view of what today’s housing- and mortgage-related careers are like. “Do you know how business schools teach their students about the mortgage industry?” Kreger said. “By showing ‘The Big Short.’” Nonetheless, these problems have yet to impact the nation as a whole, and many mortgage professionals have been spared from these difficulties. “In my market, it is not a major issue,” said Andrews, in reference to his Arizona marketplace. And Michelle Goldberg, wholesale and correspondent account executive for Stonegate Mortgage in Dallas, was surprised to hear of this situation. “It is not something I’ve seen or experienced a whole lot,” Goldberg said. “Turn-times are always an issue—and they are never quick enough for some people.”

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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Having given consideration to the contract language, the Supreme Court determined that the Appeals Court properly extended its reasoning in Singleton to the statute of limitations context in a mortgage foreclosure action. Given that the Bank’s initial foreclosure action was involuntarily dismissed, the dismissal returned the parties back to “the same contractual relationship with the same continuing obligations.” As I’ve stated above, this meant that Bartram and the Bank’s prior contractual relationship gave Bartram the opportunity to continue making his mortgage payments, and gave the Bank the right to exercise its remedy of acceleration through a foreclosure action if Bartram subsequently defaulted on a payment separate from the default upon which the Bank predicated its first foreclosure action. Thus, the Bank’s attempted prior acceleration in

1. What constitutes a valid new default after the initial round of default, acceleration, foreclosure filing, and dismissal; 2. How the fact-finder determines that a valid new default has occurred; and 3. What conditions constitute valid new default, including whether the lender must reinstate the original note and mortgage terms in the interim or serve a second notice of intent to accelerate.

opined the Justice, the Supreme Court “flatly holds that the dismissal itself—for any reason—“decelerates” the mortgage and restores the parties to their positions prior to the acceleration without authority for support.” The core of the Justice’s expressed concern can perhaps be elucidated into the following reasoning: l There is no evidence contained in the record before the Supreme Court to show whether the parties tacitly agreed to a “de facto reinstatement” following the dismissal of the previous foreclosure action. l The mortgage itself did not create a right to reinstatement following acceleration and the dismissal of a foreclosure action. l The contractual right to reinstatement under the terms of this mortgage existed only under specific

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1. The legislature could not have intended that the Singleton reasoning be applied to statute of limitations as it is presumed to know the law when it enacts a statute and no cases applying anything like Singleton’s reasoning existed in 1974; 2. A claim for foreclosure of a mortgage payable in installments accrues at the latest at the time of acceleration; 3. Once the statute of limitations begins to run on the entire debt, the only way the statute won’t bar any action on a mortgage is a finding that one of the conditions in the statute of limitations clause occurred; and 4. The equitable principles supporting the result in Singleton are not relevant to this case because the legislative intent of the 1974 amendments was to simultaneously bar equitable and legal remedies on the same subject matter and because statute of limitations have always been applied without regard to particular equities.

a foreclosure action, though involuntarily dismissed, did not trigger the statute of limitations to bar future foreclosure actions based on separate defaults. A final word about concurring as to the “result only.” Justice Lewis of the Supreme Court felt “troubled” by the expansion of Singleton to potentially any case involving successive foreclosure actions. He observed that “other courts in this State have already broadly applied Singleton—a decision involving res judicata and dismissal with prejudice—to cases that were either dismissed for lack of prosecution or voluntarily dismissed by the note-holder, as well as to cases that concern the statute of limitations, without careful consideration of the procedural distinctions of each case.” At its narrowest, observed the Justice, Singleton simply held that “when a second and separate action for foreclosure is sought for a default that involves a separate period of default from the one alleged in the first action, the case is not necessarily barred by res judicata.” In fact, he stated categorically that Singleton left several matters unanswered, which I will enumerate, as follows:

Operation VA SITREP “Your VA Situation Report”

VA Updates, MBA Conference and Appraisals! BY RICHARD M. BETTENCOURT JR., CRMS, CMHS ey America! Sorry I was off the grid last month as far as articles go! My wife and I manage our own SMALL 501©3 Military Non-Profit Public Charity called, The VET Event Inc. We recently held our Third Annual VET Event Comedy Night and let me tell you, running a small non-profit and planning events is not easy! Thank God for my amazing wife Jenn! If it wasn’t for her, my dream of creating another outlet to assist veterans would be just that … a dream! However, thanks to her, it’s a reality and on Nov. 4, we raised nearly $17,000 to help local veterans! Jenn, honey, I love you and cannot say it enough, but thank you for your work behind the scenes! To my NAMB family that graciously donated, thank you! Recently, I was honored with an appointment to the Mortgage Bankers Association (MBA) VA Working Committee Group. I would like to thank AW Pickel III for nominating me for this position, and I promise, I won’t let you down! Last month, the MBA Annual Conference was held in Boston. I could digress here and talk about the incredible sports city that is Boston, but I think I’ll stick to talking about VA! The MBA VA Committee had an in-person meeting and I was more than excited to attend! In attendance from the VA was Jeff London, Acting Director of VA Loan Guaranty Services; John Bell, Assistant Director of Loan Production & Valuation; Greg Nelms, Chief of Loan Policy; and Mark Connors Lender Liaison. I truly love meeting with my friends from VA Loan Policy and Valuation, and I must say, it’s incredible to see how

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engaging they are with our industry peers to find new ways to assist our veterans in making the dream of homeownership become a reality. There are some changes coming to the VA Handbook, and although they could not say precisely what those changes were going to be, they were able to say that they hope to clarify some of the ambiguity most often mentioned by the lending community. It did appear that there will be an update as to how the VA will document student loans. They wanted to reiterate that the ambiguity in the Handbook was put there for a reason. It was put there to give the lender a wider, not narrower, road to follow when approving VA home loans. The former Chief of Loan Policy Bill White is a legend in the halls of VA Central Office. I’ve had the luxury of meeting Bill on quite a few occasions, and he is famous for saying, “Documentation, documentation, documentation … if you properly document your decision for funding a VA loan, there’s a very small chance the VA would find that to be egregious in nature.” I might not have quoted him verbatim, however, you get the point! So, the VA will be making some changes to 26-7 Handbook, and we could possibly expect to see the final revision right around the time of the 2017 VA Lender Conference! Since we are on the topic of the 2017 VA Lender Conference, I’d like to share those dates with you! The 2017 VA Lender Conference will be held Monday-Friday, April 10-14 in Kansas City. They did not provide the precise location, however, we can expect to see a VA Circular notification regarding the conference in the next couple of weeks. If you

are an LO and find yourself originating VA loans on a regular basis and intend to make that your primary niche, then you cannot miss this conference! It is worth every penny and every minute of your time! One word … GO! As you all know, there is a serious appraisal problem throughout the nation. Some regions are affected more than others, but it’s industrywide and not centered around one loan program or option. The VA acknowledged that they are having the same type of problems in the regions most affected, so they’re asking for our help! If you or any of your referral partners know qualified appraisers not currently on the VAapproved roster, please let them know the VA is actively adding more appraisers to their rosters. They’re very serious and have been increasing the VA appraisal fees in nearly every region! Not to mention, the VA appraiser gets the entire fee! So, there’s definitely incentive for them to get signed up! Keep an eye open and pass those appraiser names along to your Regional Loan Center’s valuation officer! I’m also proud to announce that NAMB is actively and aggressively pursuing federal legislative and/or regulatory changes to either Equal Credit Opportunity Act (ECOA), Fair Lending or both to add and include veterans as a protected class. We announced this at NAMB National, and I’ve been quietly working to find Congressional support for this necessary change to our consumer

protection laws. Massachusetts has already identified veterans as a protected class, and it’s about time we do more to help our veterans in the housing industry. If you’d like more information or you’re interested in helping me and NAMB’s VA Committee out with this initiative, please e-mail me at RBettencourt@MortgageNetwork.co m and I’ll tell you how you can help us help them! By the time you read this article, Veteran’s Day will have come and gone. It’s my hope that you took the time out of that day to walk up to a veteran and thank them for their service to our great country! Each year, my wife, my daughter and me go out to a local restaurant and begin “OPERATION IT’S ON ME!” We sit down to eat dinner, ask for the general manager, ask them to give us the bills of three Veteran Families that are eating, and we pay the bill. The only catch is that the GM is not allowed to let the veterans know who paid the bill. It’s not and never about me … it’s always about them! So, you may not be able to be a part of OPERATION IT’S ON ME in 2016, but perhaps you’ll remember this article and join me in 2017 to help thank a veteran and their family! Thanks again for taking the time to read my words of wisdom, babbling and VA information! Remember, if you haven’t already today, please take a minute and thank a veteran! They’ve done more for you and I, than we could ever repay!

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

“foreclosure clock” start ticking

limited record will lead to inequitable results.” We will give Justice Lewis the last word: “Just as the courts should not encourage mortgage delinquency, so too should they avoid encouraging lenders from abusing Florida law and Floridians by ‘retroactively reinstating’ mortgages after many of those lenders initially slept on their own rights to seek foreclosures.” Further reading l Lewis Brooke Bartram, Petitioner, vs. U.S. Bank National Association, et., et al, Respondents, Supreme Court of Florida, No. SC141265 l U.S. Bank National Association, Etc., Appellant, vs. Patricia J. Bartram, Etc., et al, Appellee, District Court of Appeal, State of Florida Fifth District, Case No. 5D12-3823 l Lewis Bartram, Patricia Bartram & The Plantation at Ponte Vedra, Inc., Petitioners, vs. U.S. Bank, N.A., Respondent, on Appeal from the Fifth District Court of Appeal, Patricia Bartram’s Initial Brief, in the Supreme Court of Florida

n National Mortgage Professional Magazine n NOVEMBER 2016

Information contained in this article is not intended to be and is not a source of legal advice. The views expressed are those of the author and do not necessarily reflect the views or policies of Lenders Compliance Group Inc., any governmental agency, business entity, organization, or financial institution. No representation is made and no guarantee is given with respect to the source, originality, accuracy, completeness, or reliability of any statement, information, data, finding, interpretation, advice, opinion or view presented herein.

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cost to the statute of limitations and the separation of powers.” As long recognized in Florida, res judicata “is a doctrine of equity not to ‘be invoked where it would defeat the ends of justice.’” However, held the Justice, “equity follows the law;” therefore, “equitable principles are subordinate to statutes enacted by the Legislature, including the statute of limitations.” This position, the Justice asserted, is an untenable extension of an equitable, judicial doctrine into an area of law expressly governed by legislative action and “veers perilously close to violating the separation of powers.” So, in the view of Justice Lewis, the majority opinion of the Supreme Court failed to recognize these concerns and justified “the imposition of Singleton’s equitable focus onto the statute of limitations by simply reviewing the decisions of federal and Florida courts that have reached this same conclusion without acknowledging the critical distinctions” between res judicata and the statute of limitations. It seems that the Justice was arguing against acting out of expediency, given that there are legitimate concerns regarding the need to avoid encouraging delinquent borrowers from abusing the lending process by remaining in default after an initial foreclosure action is dismissed. The Justice concluded that these legitimate policy concerns should not outweigh the established law of the State of Florida. Given the narrow holding of Singleton, the Justice “fear[s] that its expansion today to a case involving a previous dismissal (presumably) without prejudice and no clear reinstatement of the mortgage terms in either the note or the facts of this

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NATIONAL MORTGAGE PROFESSIONAL MAGAZINE’S

calendar of events

DECEMBER 2016

HOLIDAY NETWORKING PARTY 2016

Tuesday, December 6 California 2016 Holiday Networking Party Atrium Hotel 18700 MacArthur Boulevard Irvine, Calif. For more information, call (860) 922-3441 or e-mail BeverlyB@NMPMediaCorp.com.

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FEBRUARY 2017 Friday, February 3 California Association of Mortgage Professionals Sales and Marketing 2017: North Walnut Creek Marriott 2355 North Main Street Walnut Creek, Calif. For more information, call (916) 448-8236 or visit TheCAMPSite.org. Monday, February 13 California Association of Mortgage Professionals Sales and Marketing 2017: South Hyatt Regency Orange County 11999 Harbor Boulevard Garden Grove, Calif. For more information, call (916) 448-8236 or visit TheCAMPSite.org.

2016

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

Thursday-Saturday, March 16-18 NAMB East 2017 Omni Atlanta Hotel at CNN Center 100 CNN Center NW Atlanta, Ga. For more information, visit NAMB.org. APRIL 2017 Friday-Wednesday, April 21-26 NAMB 2017 Legislative & Regulatory Conference JW Marriott Washington, D.C. 1331 Pennsylvania Avenue NW Washington, D.C. For more information, visit NAMB.org.

AUGUST 2017 Monday-Tuesday, August 7-8 California Association of Mortgage Professionals Presents Summer CAMP 2017 Coronado Island Marriott 2000 2nd Street Coronado, Calif. For more information, call (916) 448-8236 or visit TheCAMPSite.org. OCTOBER 2017 Friday-Monday, October 13-16 NAMB National 2017 Rio Las Vegas 3700 West Flamingo Road Las Vegas For more information, visit NAMB.org. Sunday-Wednesday, October 22-25 Mortgage Bankers Association 2017 Annual Conference & Trade Show Colorado Convention Center 700 14th Street Denver For more information, visit MBA.org.

MAY 2017 Tuesday-Thursday, May 2-4 2017 Great River MBA Conference The Peabody 149 Union Avenue Memphis, Tenn. For more information, call (901) 321-6702 or visit GreatRiverMBA.com.

Sunday-Wednesday, February 19-22 Mortgage Bankers Association’s CREF/Multifamily Housing Convention & Expo 2017 Manchester Grand Hyatt 1 Market Place San Diego, Calif. For more information, visit MBA.org. To submit your entry for inclusion in the National Mortgage Professional Calendar of Events, please e-mail the details of your event, along with contact information, to newsroom@nmpmediacorp.com. *Looking for additional exposure at key industry events? Call 516.409.5555, ext. 4 to discover how to maximize your event coverage.

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Thursday, December 15 New York 2016 Holiday Networking Party Long Island Marriott 101 James Doolittle Boulevard Uniondale, N.Y. For more information, call (860) 922-3441 or e-mail BeverlyB@NMPMediaCorp.com.

MARCH 2017 Thursday, March 2 FAMP Broward Chapter’s 2017 Annual Trade Show and Masquerade Ball Bonaventure Hotel & Conference Center 250 Racquet Club Road Weston, Fla. For more information, call (954) 986-0808 or visit BrowardFAMP.com.

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Thursday, December 8 Florida 2016 Holiday Networking Party DoubleTree by Hilton Hotel Sunrise-Sawgrass Mills 13400 West Sunrise Boulevard Sunrise, Fla. For more information, call (860) 922-3441 or e-mail BeverlyB@NMPMediaCorp.com.

JANUARY 2017 Monday-Thursday, January 23-26 Mortgage Bankers Association Presents: Independent Mortgage Bankers Conference La Quinta Palm Springs 49499 Eisenhower Drive La Quinta, Calif. For more information, visit MBA.org.

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

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AUDIT DEFENSE AND RESPONSE

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

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

COMPLIANCE CONSULTANTS

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

EMPLOYMENT

HARD MONEY/PRIVATE LENDING

PUBLICATIONS

WHOLESALE LENDERS

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

MARKETING

WHOLESALE LENDERS

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

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

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

WHOLESALE LENDERS

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

n National Mortgage Professional Magazine n NOVEMBER 2016

PRIVATE FINANCING

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

NationalMortgageProfessional.com

TagQuest www.tagquest.com 888-717-8980

NOVEMBER 2016 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

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www.BrokersComplianceGroup.com

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

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

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