National Mortgage Professional Magazine November 2017

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NationalMortgageProfessional.com

MLS LinkTM is a "set it and forrget it" feaature

table of

34

N A T I O N A L

MBA’s 2017 Annual Convention Survey: A Report of Findings

By Tom LaMalfa

N O V E M B E R

72 The Forgotten and Best Pillar of Referrals

By Christopher J. Bettis, CMC, CRMS

2 0 1 7

M O R T G

l

V O L

A SPECIAL FOCUS ON “COMPLIANCE TODAY”

C

Compliance and Learning: What Can Be Done With an Ounce of Prevention? By Joy K. Gilpin ........................................................52

T

Honing in on HMDA By Chris Hatton ................................................56

T O

O

Half Way Gone: Rogue Marketing a Major Risk for Lenders

By Brent Emler & Ken Perry................................................................58

n

The Lord Is My Compliance Officer By Eric “NOT related to Harvey” Weinstein ..........................................................................60

C

Seven Tips to Get the Most Out of Your Compliance Buck

By Johnna Leeds ................................................................................62

T J

Compliance in Today’s Digital Lending World

By Kelcey T. Brown ............................................................................64

74 The Mortgage Matrix

By Andy W. Harris, CRMS

H B

Compliance and Communications in the Mortgage Industry

By James V. Luisi ..............................................................................66

F E

How to Stay Ahead of Modern Regulatory Risk Compliance

By Isaac Kohen ..................................................................................70

A a

FEATURES Top Originators Work Closely With Real Estate Agents

By Tom Hutchens ................................................................................8

C

N

The Elite Performer: The Human Robot By Andy W. Harris, CRMS ..8

N

Recruiting, Training and Mentoring Corner: Looking for Compliance in All the Wrong Places By Dave Hershman ..........10

H

O

Originators See Value in Offering HECMs ......................................16

N

3 Points With Mat Ishbia ..................................................................18

N

Compliance vs. Marketing................................................................20 NAMB Perspective ............................................................................22

80 Mortgage Companies Need to Speak Millennial Language More Clearly

By Sarah DeCiantis

V I S I T Company

Web Site

O U R

A D Page

5 Arch Funding Corp........................................... www.5arch.com ............................................................21 Accio Data ........................................................ www.ezcbsv.com ..........................................................65 Angel Oak Mortgage Solutions ............................ www.angeloakms.com ..............................68 & Back Cover Athas Capital Group .......................................... www.athascapital.com ....................................................5 Brokers Compliance Group.................................. www.brokerscompliancegroup.com ..................................17 Caliber Home Loans.............................................. www.caliberwholesale.com ................................................7 Carrington Mortgage Services, LLC ...................... www.carringtonwholesale.com ................................9 & 62

84 How to be Thankful and Who Originators Should Thank By Brian Sacks

Citadel Servicing Corporation .............................. www.citadelservicing.com ..............................................61 Comergence Compliance .................................... www.comergencecompliance.com ..................................54 DocMagic .......................................................... www.docmagic.com ......................................................11 Greenbox Loans, Inc........................................... www.greenboxloans.com ..............................................IFC Lykken On Lending ............................................ www.lykkenonlending.com ............................................83 MBS Highway .................................................... www.mbshighway.com/MNN ..........................................67

T

Mortgage News Network (MNN) .......................... www.mortgagenewsnetwork.com ............................48 & 49

T

NAMB+ ............................................................ www.nambplus.com ......................................................33

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

9

l

N U M B E R

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CFPB Issues Final Rule Amending Regulation B By Gavin T. Ales ....32

OrigiNation: “Whole-tail” Lending! By Andy W. Harris, CRMS ........38 The Mortgage Godfather: How Do You Spend Your Weekends?

By Ralph LoVuolo Sr. ........................................................................42 The Long & Short of Short Sales: Ways to Help Those Coming Out of Negative Equity Loans By Pam Marron ................................44 nmpU Campus Talk: Selling Is Being an Interruption

By Ron Vaimberg................................................................................46 Compliance Matters: Unfair Debt Collection Practices

By Jonathan Foxx ..............................................................................50

Tony’s Corner: A Message From NAMMBA Founder & CEO J. Tony Thompson III, CMB ..............................................................51 How to Take a Loan Application From a Foreign National Borrower By Eric Tran ......................................................................76 From the Lenders’ Viewpoint: How to Submit a Commercial Real Estate Loan Request: The Three-Legged Stool By Brian A. Opert ......86 A Millennial’s Perspective: A Few Words on Company Culture and Why It’s Important for Millennials … By Amanda Lucido ........88

COLUMNS New to Market...................................................................................12 News Flash: November 2017 ............................................................14 Heard on the Street...........................................................................40 Outstanding Places to Work.............................................................92 NMP Calendar of Events...................................................................93 NMP Resource Registry....................................................................94

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

Web Site

Page

NAMMBA .......................................................... www.nammba.org ........................................................59 NAPMW ............................................................ www.napmw.org ....................................................36 & 65 NAWRB ............................................................ www.nawrb.com ............................................................63 New American Funding ...................................... www.newamericanfunding.com ......................................96 NMP Holiday Networking Party .......................... signup.nmpmag.com/holidayparty ..........................78 & 79 NMP U .............................................................. www.nmpucoaching.com ..................................19, 41 & 55 NRMLA.............................................................. www.nrmlaonline.org ....................................................43 OSI Express........................................................ www.osiexpress.com/mlslink ............................................1 Paramount Residential Mortgage Group, Inc. ...... www.prmg.net ..........................13, 57 & Inside Back Cover REMN................................................................ www.remnwholesale.com ..............................................15 ResMac, Inc. ...................................................... www.resmacb2b.com ....................................................69 Ridgewood Savings Bank .................................... www.ridgewoodbank.com ..............................................71 TagQuest .......................................................... www.tagquest.com ........................................................37 The Bond Exchange............................................ www.thebondexchange.com ..........................................45

NOVEMBER 2017 Volume 9 • Number 11

FROM THE

publisher’s desk

Building a Fully Compliant Mortgage Business As we near the end of another year, we always pause to take a look at how well the industry is 1220 Wantagh Avenue • Wantagh, NY 11793-2202 doing at meeting the changing requirements of our secondary mortgage market investors and the Phone: (516) 409-5555 • Fax: (516) 409-4600 various local, state and federal government regulators who oversee our businesses.

Web site: NationalMortgageProfessional.com For some, perhaps many, compliance is a costly pain that gets in the way of building business.

STAFF Eric C. Peck Joel M. Berman For others, it is a passion that keeps them poring through documents in the law library. For the Editor-in-Chief Publisher - CEO (516) 409-5555, ext. 312 (516) 409-5555, ext. 310 most successful, compliance is just gridlines on the playing field. They’re in the game to win, and if ericp@mortgagenewsnetwork.com joel@mortgagenewsnetwork.com that means being fully compliant, so be it. That’s why we always dedicate an entire issue to Joey Arendt Beverly Bolnick providing the information those executives need to continue their work of building great companies.

Art Director VP-Sales & Marketing (516) 409-5555, ext. 323 (516) 409-5555, ext. 316 This month, we have a fantastic issue, packed with information designed to keep you succeeding. joeya@mortgagenewsnetwork.com beverlyb@mortgagenewsnetwork.com Like success in any field, it starts with a good plan. To help with that, we bring you “Seven Tips Scott Koondel Phil Hall VP of Operations Managing Editor to Get the Most Out of Your Compliance Buck” by Johnna Leeds, Vice President of Compliance for (516) 409-5555, ext. 324 (516) 409-5555, ext. 312 Data Facts Inc., on page 62 and “How to Stay Ahead of Modern Regulatory Risk Compliance” by scottk@mortgagenewsnetwork.com philh@mortgagenewsnetwork.com Isaac Kohen, Founder and Chief Executive Officer of Teramind, on page 70.

Richard Zyta Francine Miller Social Media Ambassador Advertising Coordinator A great overview of the work in the digital compliance arena has been provided by Kelcey T. (516) 409-5555 (516) 409-5555, ext. 301 richardz@mortgagenewsnetwork.com francinem@mortgagenewsnetwork.com Brown, Executive Vice President and Chief Strategic Officer for WebMax LLC, on page 64. He Rick Grant Dylan Pollock offers you his thoughts on the digital space in the article, “Compliance in Today’s Digital Lending Special Reports Editor Administrative Assistant World.” In a similar vein, we offer “Compliance and Learning: What Can Be Done With an Ounce of (570) 497-1026 (direct) (516) 409-5555, ext. 314 (516) 409-555, ext. 311 dylanp@mortgagenewsnetwork.com Prevention?” from Joy K. Gilpin, Vice President, Mortgage Learning and Compliance at Indecomm rickg@mortgagenewsnetwork.com Global Service, beginning on page 52. Joy relay gets to the heart of the matter, addressing the true ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact costs of non-compliance.

VP-Sales & Marketing Beverly Bolnick at (516) 409-5555, ext. 316 or e-mail beverlyb@mortgageOf course, you’ll be looking for specifics, and so we bring you “Honing in on HMDA: Preparing newsnetwork.com. for the New HMDA Rule Doesn’t Have to be Rocket Science” on page 56 from Chris Hatton, ARTICLE SUBMISSIONS/PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck Compliance Manager for Waterstone Mortgage. “Half Way Gone: Rogue Marketing a Major Risk for at (516) 409-5555, ext. 312 or e-mail ericp@mortgagenewsnetwork.com. The deadline for submissions Lenders” by Brent Emler, Director of Sales and Marketing at Velma.com and Ken Perry, Mortgage is the first of the month prior to the target issue.

Educator, details ways which you can keep a closer eye on the marketing habits of LOs on page SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail orders@mortgage58. On page 66, James V. Luisi, Chief Information Officer/Chief Technology Officer of newsnetwork.com or visit www.nationalmortgageprofessional.com. Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600.

KeyStoneB2B, examines “Compliance and Communications in the Mortgage Industry,” detailing Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the ways in which you too can keep a closer look at compliance in today’s regulatory environment. authors alone and do not imply the opinion or endorsement of Mortgage News Network Inc., or the offiAnd, don’t miss our regular “Compliance Matters” column on page 50 where Jonathan Foxx, cers or members of National Association of Mortgage Brokers and its State Affiliates (NAMB), National Association of Professional Mortgage Women (NAPMW), National Consumer Reporting Association (NCRA) Managing Director of Lenders Compliance Group, talks about what to do when your State Banking and/or other state mortgage trade associations.

Participation in NAMB, NAPMW, NCRA, and/or other state mortgage trade associations events, activDepartment accuses you of a violation. Finally, no issue would be complete without some ities and/or publications is available on a non-discriminatory basis and does not reflect the endorsement commentary from Eric “no relation to Harvey” Weinstein. This time, he offers you, “The Lord Is My of the product and/or services by Mortgage News Network Inc., NAMB, NAPMW, NCRA, and other state mortgage trade associations.

Compliance Officer” beginning on page 60.

National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, and/or other state mortgage We have a number of great additional features I cannot wait for you to dig into. First up, industry trade associations do not make any misrepresentations or warranties concerning the regulatory and/or compliance aspects of advertisers, products or services and/or the editorial content contained in Mortgage veteran and famed numbers-cruncher Tom LaMalfa takes us inside the minds of top C-suite News Network Inc. publications. National Mortgage Professional Magazine and Mortgage News Network Inc. reserve the right to edit, reject and/or postpone the publication of any articles, information or data. executives in his bi-annual “MBA’s 2017 Annual Convention Survey.” Tom polled 23 of the industry’s most influential minds at the recent Mortgage Bankers Association Annual Conference in Denver, and presents us the hot button topics of the day beginning on page 34.

We also present to you, “Tony’s Corner: A Message From NAMMBA Founder & CEO J. Tony Thompson III, CMB,” beginning on page 51. “Tony’s Corner” comes from a trade association new to the industry that we can expect to offer a great deal of value. In his first monthly column, Thompson talks about the NAMMBA (National Association of Minority Mortgage Bankers of America) building bridges, connecting women and minorities in the mortgage space to build stronger businesses.

In his issue we’ll also recap the 2017 NAMB National Convention, beginning on page 22, bringing you a visual recap from the big event in Las Vegas and commentary on the state of the trade group from attendees and Board members who were on hand for this gala event. The trade show was packed and NAMB presented a slate of the industry’s top speakers and educators, with rave reviews abound on the annual gathering.

I really hope you all read the article by Andy W. Harris, CRMS, entitled “The Mortgage Matrix” beginning on page 74. Harris has spent much of his career working to see what’s coming to the industry next and he has an impressive track record of being right. In this issue, he’ll tell you what he seeing coming to our industry in 2018, and what can be done to make improvements in the wholesale marketplace.

As we ring in the 2017 holiday season, I want to bring to your attention an event set for Tuesday, Dec. 5 at The Atrium Hotel in Irvine, Calif. National Mortgage Professional Magazine, along with Mortgage News Network, present the California Holiday Networking Party. The event showcases a day’s worth of informative workshops, presented by some of the industry’s top speakers, concluding with tabletop exhibits from some of the industry’s top lenders, vendors and service providers. This year, the Party will feature Frank Garay of National Real Estate Post, delivering his presentation, “How to Open the Door to be Part of Real Estate Sales Meetings,” sponsored by Angel Oak Mortgage Solutions. Ron Vaimberg, Executive Director and Head Coach of nmpU, who will discuss how to “Win the Business Over Your Competition Even If You Don’t Have the Lowest Rate,” sponsored by Carrington Mortgage Services; and closing out the day of seminars will be Beverly Frase of Boots Across America, delivering the REMN Wholesale-sponsored, “Certified Military Home Specialist Workshop.” Completion of the Certified Military Home Specialist Workshop qualifies attendees to take the Certified Military Home Specialist exam online after the party to become a Certified Military Home Specialist, all at no cost.

For more information or to register for the free 2017 California Holiday Networking Party, visit Signup.NMPMag.com/HolidayParty or see pages 78-79 for more information. Limited sponsorship opportunities are still available. For more information, contact Beverly Bolnick at (516) 409-5555, ext. 316 or email BeverlyB@MortgageNewsNetwork.com.

I hope you enjoy this issue, and hope the tips and tricks learned within our pages helps contribute to your continued success. And I hope you’re looking forward to building a better, stronger, even more compliant mortgage company in 2018.

Sincerely, Joel M. Berman, Publisher-CEO NMP Media Corp.

Joel@MortgageNewsNetwork.com National Mortgage Professional Magazine is published monthly by Mortgage News Network Inc. • Copyright © 2017 Mortgage News Network Inc.

5

NationalMortgageProfessional.com

n National Mortgage Professional Magazine n NOVEMBER 2017

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

NAMB 2017-2018 BOARD OF DIRECTORS E X E C U T I V E

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

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

Nathan S. Pierce, CRMS Vice President Nathan.Pierce@NAMB.org

B O A R D

Andy W. Harris, CRMS Treasurer Andy.Harris@NAMB.org

Michelle Velez, CMC Secretary Michelle.Velez@NAMB.org

Fred Kreger, CMC Immediate Past President Fred.Kreger@NAMB.org

D I R E C T O R S

Linda McCoy, CMRS Linda.McCoy@NAMB.org

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

Wayne King, CRMS Wayne.King@NAMB.org

Michael DeSantis Mike.DeSantis@NAMB.org

George Burkely, CRMS George.Burkley@NAMB.org

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

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

Olga Kucerak, CRMS Olga.Kucerak@NAMB.org

National Association of Professional Mortgage Women 345 North Main Street, Suite 313 l West Hartford, CT 06117 l Phone: (800) 827-3034 l E-mail: NAPMW1@NAPMW.org l Web site: NAPMW.org

2017-2018 NAPMW NATIONAL BOARD OF DIRECTORS

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

NOVEMBER 2017 n National Mortgage Professional Magazine n

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Laurel Knight President-Elect (425) 426-2028 PresElect@NAPMW.org

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

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

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

Lynne Sparks Parliamentarian (678) 872-9000, ext. 10611 LSparks@SKWRLaw.com

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

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

2016-2017 BOARD OF DIRECTORS

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

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

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

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

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

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

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

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

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

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

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

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

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

Big Things on the Horizon for ARMCP This year will bring some great new opportunities to the Association of Residential Mortgage Compliance Professionals™ (ARMCP™), currently consisting of nearly 1,600 members. ARMCP™ will soon be launching its own Web site to fulfill the needs of residential mortgage compliance professionals.

ARMCP™ is the first and only independent, national organization in the U.S. devoted exclusively to residential mortgage compliance professionals. Our independence means we are not affiliated with any profit oriented corporation or enterprise. ARMCP™ membership consists solely of those members who have joined it on their own and were not solicited to join it via solicitations from third-party lists or subscriptions. Independence is the key to the value of our advocacy!

There are currently two slots remaining for the Steering Committee. The Steering Committee will be drafting new by-laws, determining a nominating process, conference planning, and many other areas of interest relating to ARMCP™’s mission. If you are interested in joining the Steering Committee, email Info@ARMCP.org.

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n National Mortgage Professional Magazine n NOVEMBER 2017

Technology

NationalMortgageProfessional.com

Service and Support

Top Originators Work Closely With Real Estate Agents Here’s how to form successful alliances

By Tom Hutchens

W

hen it comes to finding new clients, originators do not have to go at it alone.

Loan officers can create support networks by presenting to real estate sales professionals.

This is a great way to sustain referrals and profitable pipelines.

Engineering industry relationships is easier and more effective than unearthing individual homebuyers. Agents are involved in most home sales. Many professionals have clients who need financing help. Any loan officer can become a trusted advisor to real estate pros, who will in turn deliver referral clients to your door.

When you have information to share, agents will see you as an expert who can be entrusted with their clients’ financing experiences. Most importantly, tools are readily available that help every originator deliver high-quality presentations.

Most real estate sales offices hold weekly sales meetings.

Managers often struggle to offer fresh, fascinating content.

Therefore, they welcome guest speakers to engage their agents.

It’s a straightforward process to get in the door and develop relationships.

NOVEMBER 2017 n National Mortgage Professional Magazine n

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1. Ask for the opportunity Ask agents you know about their sales meetings. Who leads them? Do you have outside presenters? Can you get an introduction to the sales manager? For those who are new to the business, just walk into the office or call the sales manager.

Chances are that many will welcome your pitch.

2. Pitch your unique value Say you know about both conventional and portfolio loan products. There is confusion in the marketplace about which loans are most appropriate for buyers. Explain that agents can close more sales and really boost their incomes by helping clients who need a non-conforming loan.

3. Prepare and practice Preparing involves understanding your audience and creating content (a speech and/or slides); both are equally important. For your content, many mortgage lenders–including Angel Oak–offer customizable slides and literature. Angel Oak, and other lenders, will also send account executives to help you present. Most importantly, practice your presentation over and over.

With each presentation you make, your comfort level will improve and the authority you convey will become more convincing. However, you will only get superior results if you continually follow up with the contacts you have made.

On Tuesday, Dec. 5, at NMP’s free Holiday Networking Party in Irvine, Calif., National Real Estate Post’s Frank Garay will offer tips on working with agents. Visit SignUp.NMPMag.com/HolidayParty for details and registration.

Tom Hutchens is Senior Vice President of Sales and Marketing at Angel Oak Mortgage Solutions, an Atlanta-based wholesale/correspondent lender licensed in more than 35 states and operating in the non-QM space for over three years. Tom has been in the real estate lending business for nearly 20 years. He may be reached by phone at (855) 539-4910 or e-mail Info@AngelOakMS.com

SPONSORED EDITORIAL

elite performer the

The Human Robot

BY ANDY W. HARRIS, CRMS

he future is here. Technology has rapidly advanced over the last few years and it’s remarkable to see what has been accomplished in the mortgage industry in such a short period of time. A borrower can literally start an application and close the entire loan process, from online application to signing closing papers, all digitally with no documents whatsoever.

This is both exciting and frightening at the same time for those of us in the real estate and mortgage industries. Certainly we want to make the process easier on the consumer, but without risks. Risks can come up from input errors or confusion if the borrower has incorrect information or doesn’t understand pricing, etc.

The other risks, of course, is ensuring job security. There was never a more important time to be an expert in your field and an asset to your clients. The process will commoditize as it has been, but you cannot allow your personal services to fall victim. While refinances may be trending in a consumer-controlled process, purchase transactions certainly need the strong human element. There are too many important parts of the process with vital timelines and details that cannot be handled by a computer. A homebuyer must have experts on their side, helping them every step of the way with this large financial investment.

As noted, refinances I see as being the larger risk for becoming consumer-controlled online originations. Some savvy consumers may prefer and not need the human interaction or deadline pressures. They may have also been through the process several times and familiar with what they want regarding terms and benefits, and thus control the details and process through an online system. Again, there will always be details and services that can never replace a human, so it’s time to get to work and be ahead of it.

The Web site, WillRobotsTakeMyJob.com, rates Loan Officers at 98 percent chance they will and that we’re doomed. It’s a 97 percent chance for Real Estate Brokers. I do not fear these numbers as I see this happening, especially on the real estate side with property data available at the click of a mouse. Margins will be restricted everywhere due to competition and technology. The goal is to both embrace the technology by adding speed and ease for the consumer, but also compete with it and offer value and expert advice that a robot cannot.

Carefully watch the tech space. Embrace it. Change. Adapt and be ahead of your competition and now is not the time to sit on the sidelines.

You’re still human, but you’ll need to become a hybrid with robot elements. Exciting and scary? Yes, but remain motivated and focused.

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The views expressed in this article are those of the author alone and do not necessarily reflect the views or policies of the author’s employer or any organization with which the author may be affiliated.

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

Looking for Compliance in All the Wrong Places

BY DAVE HERSHMAN

he topic of this month’s issue is “Compliance,” which means we will see articles on developing quality control plans, regulatory training, technologies designed to help us detect fraud and more. In a previous article, I made the statement that, while the industry sees quality control as a backend function, the tone for quality control is set up-front and it starts with sales managers–not loan officers.

What do I mean? Previously, I wrote about connecting the quality of the application process to referrals. Basically, exceeding customer’s expectations is the key to getting more referrals and we cannot deliver great customer service without mastering the application process. The application is the key to delivering quality as well.

Today, we are going to move earlier up-front within the process. I believe quality control and compliance starts with the hiring process, especially when hiring sales personnel. In reality, I also believe that quality control and compliance are often not integrated within the up-front hiring process. This leads me to ask this question: Are you assessing loan officer candidates based upon the volume of their production record only?

It is easy to measure production success by looking at W-2s and production reports. It is not so easy to measure the quality of production. Quality of

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production includes a variety of variable, including: l The quality of applications: Are they complete and wellstructured? l The quality of applicants coming into the system: Are they prequalified or is the loan officer promising outcomes that the company can’t deliver? l The quality of the customer service that the loan officer delivers during the process, from marketing through closing. l The fall out percentage of the loan officer candidate’s pipeline.

It may be easy to measure these variables for your own loan officer’s production, but determining a recruit’s track record is much more difficult in this regard. This is especially true when we are vying for a loan officer with excellent volume. In this case, the manager is selling the loan officer on the company and the manager may be reticent to be grilling the loan officer as to quality control standards.

The key to understanding the quality of the loan officers is to paint a more complete picture of their reputation. This should be done early in the process—while we are deciding whether to target the loan officer. There are many players you can speak to while networking to help complete this picture. These players might include: l Closing/title companies: Those who have been closing these candidate’s loans will know how smooth the transactions are.

They will also know how the loan officer reacts when

something goes wrong. Are the participants chasing them, or are they acting as leaders in dealing with these situations? l Underwriters and processors: Those who have processed and underwritten loans of these loan officers, will certainly know how strong a package they put together. They will also know if they are a team player who helps their team members better serve their customers. l Mortgage insurance companies: MI reps are privy to a wide-range of information that would help within the assessment process. If a loan officer tends to cause problems or has other issues, this type of information spreads not only through the office, but to vendors as well.

Even when recruiting lower producing loan officers, we typically find a focus upon quality control missing. Often, we hire lower producing loan officers with the idea that we can increase their production with quality support.

However, many mediocre producers are poor quality producers. When you don’t have enough loans, you tend to consider more scenarios that are marginal.

The assessment process for

lower producing loan officers should also include a true assessment of their knowledge level. How many times have you hired a supposedly experience loan officer and it turned out that they did not have the knowledge they needed to assess whether a particular transaction will work and/or how to properly structure it?

Do you have a test that can determine the extent of their knowledge level? Did you know such tests exists? If you would like more information about the options, do not hesitate to contact me.

There is an adage in technology: Garbage In/Garbage Out. The same concept applies to quality control. Put less than quality loan officers into the system, you will have quality control problems on the back end. Put less than quality scenarios into the system, especially those in which the scenarios are not appropriately structured—and you will have quality control problems on the back end. Hire loan officers that promise results that the company can’t deliver and well … you get the picture. You can implement all the compliance systems and tools you would like, but if you are putting garbage into the process, the systems and tools will not work.

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

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newtomarket Single Source Validation Available Through UWM Via Fannie Mae Pilot Program, UWM Launches New Site

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Mortgage brokers doing business with United Wholesale Mortgage (UWM) will be among the first in the nation with access to a more streamlined origination process, as they can validate income, assets and employment using bank account data from only one asset report. The improved capabilities stem from UWM’s participation in Fannie Mae’s pilot offering of Single Source Validation, a program that Fannie Mae has introduced as an enhancement to its Desktop Underwriter (DU) validation service.

“Pushing the broker channel forward through innovative technology and enhanced services is what we’re all about, so Single Source Validation is a big win for our clients,” said Mat Ishbia, President and Chief Executive Officer of UWM. “Fannie Mae does a great job looking for ways to make the loan process better for borrowers. The pilot has seen positive learnings already in the early stages of testing, with borrowers and brokers both seeing an improvement in the speed and ease of closings.”

UWM has also announced the launch of their newly designed Web site, built to serve as a onestop shop for mortgage brokers.

“A lot of research went into finding the content and tools that our clients most frequently look for online, and we built UWM.com to be the destination to fulfill all those needs,” said Ishbia. “We’ve upgraded to an all-inclusive hub of information

and resources that is relevant to everyone in the mortgage industry.

Now, originators, owners and processors can spend less time searching the Web for tools and news and focus more of their time on obtaining new business and providing exceptional service to their clients.”

The new UWM.com seamlessly integrates with UWM’s EASE loan origination system. The Web sites gives users one-click access to improved tools that enable them to start a loan, manage their pipeline, and grow their business.

The site also provides mortgage professionals with easy access to essential tools designed to make their jobs more efficient, all at no cost, including: Pulling allencompassing home value reports; getting answers to guideline questions using the “Ask UWM” search engine; monitoring current market trends with lock alerts; comparing interest rates and fees between multiple lenders; and reading the latest mortgage industry news.

New ARMCO Offerings Looks to Lower Gross Defects

ACES Risk Management (ARMCO) has announced that it has launched ACES Automated Document Manager (ADM), a new technology that uses robotic process automation to automate the core activities lenders undertake to reduce gross loan defects.

ADM uses robust optical character recognition (OCR) technology to automatically identify, bookmark and organize loan documents, as well as to

alert users of any missing documents associated with loan files.

ADM can parse hundreds of PDF files in minutes using advanced robotic process automation, an emerging form of process automation technology based on the notion of software robots or artificial intelligence (AI) workers.

“Loan files can contain 500 or more PDFs or imaged documents that must be sorted and accounted for if lenders want to reduce gross defects.

That’s a time consuming, errorprone process when done by hand,” said Phil McCall, President of ARMCO. “At ARMCO, our focus is helping lenders to not only elevate loan quality, but also cut costs, reduce turn times and gain efficiency. Automated Document Manager reduces defects while saving time. That’s especially valuable for large volume lenders and outsourced QC providers.”

originate more loans with greater confidence and less exposure to risk,” said Chronos Solutions Chief Executive Officer Mark Hikel. “It is also an important differentiator, as it will make our service offerings for our lender customers even more comprehensive.”

Taxdoor utilizes the Desktop Underwriter (DU) validation service to add even greater capabilities to an automated, mobile-enabled transcript verification technology that was specifically designed to reduce IRS rejection rates by as much as 75 percent.

VODAchek provides lenders with access to instant, automated electronic bank statements with up to three months of borrower transaction details from 15,000 financial institutions through a secure, Web-based platform with flexible reporting tools.

Equity National Title Unveils e-Ways County Search Site

Chronos Solutions Announces Reporting Services Via Day 1 Certainty

Chronos Solutions is now providing reporting services through Fannie Mae’s Day 1 Certainty program, including the newly approved Taxdoor platform, Chronos’ proprietary automated tax return verification system for income verification, and the VODAchek asset verification system.

“This is a crucial step toward achieving Chronos Solutions’ goal of helping America’s lenders

Equity National Title has unveiled its “e-closing” hub for mortgage lenders, dubbed e-Ways, designed to advise of the types of digital closings available at a zip code level.

“Although the promise of the digital mortgage closing is powerful, the reality is that we’re confronting a lot of complexity in what can and cannot be achieved state by state and county by county,” said James K. O’Donnell Esq.; President of Equity National Title. “Some counties may allow for some levels of e-signing but they may not allow a full e-closing.

Other counties may not be aligned with state directives when it comes to remote notarization, or they might require the parties to make use of only one specific e-provider.

Still other counties won’t accept an e-notarized deed. For lenders wanting to execute an e-closing strategy, especially over a wider geographic footprint especially, it can be dizzying. That’s why we designed e-Ways. It simplifies their decision-making.” e-Ways will advise users whether the key authorities in each zip code accept none, all or some combination of the four existing types of closing: Fully digital; hybrid; remote notary or traditional.

“The risks, costs and confusion associated with trying to decipher e-capable markets have lenders seeking a better way,” said O’Donnell. “Equity National Title is delighted to provide this service.

Our ability to close loans in all 50 states coupled with e-Ways can help lenders e-close nationwide.

industry leader, like Quicken Loans, and excited that our Point and PointCentral technology will power Q-L.O.S.”

origination costs and shorten the time to close with efficiency, quality and compliance.

Specifically, the new major release of Encompass includes Ellie Mae Announces additional updates for 2018 Encompass Enhancements HMDA collection and reporting and Launches Encompass changes, electronic document Direct Mail enhancements and Correspondent Trade enhancements.

“HMDA readiness remains a Ellie Mae has announced that it top priority for the entire has launched a new major release mortgage industry and Ellie Mae of Encompass. Encompass 17.4 is committed to supporting our enhancements help lenders of all customers as they prepare by sizes originate more loans, lower offering solutions, information,

training and resources well in advance,” said Jonathan Corr, President and Chief Executive Officer of Ellie Mae. “With the 17.4 major release of Encompass, we are providing additional 2018 HMDA collection and reporting updates as well as Correspondent Trade enhancements. This comprehensive release offers technology to ensure complete compliance with regulatory updates, as well as the innovative capabilities that enable our banks, credit unions and continued on page 18

Quicken and CalyxSoftware Unveil New LOS

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CalyxSoftware has announced a new partnership with Quicken Loans Mortgage Services (QLMS), a division of Quicken Loans Inc., to power its Quicken Loans Origination System (Q-L.O.S.).

Q-L.O.S. is an LOS that enables community banks, credit unions and select brokers to originate mortgages compliantly, quickly and profitably. Through Q-L.O.S., users can access QLMS’ entire suite of mortgage products.

“Working with Calyx Software to launch Q-L.O.S. reinforces our deep-rooted commitment to providing our partner banks and credit unions access to the most cutting edge technology and improving the mortgage experience for their clients,” said David Schroeder, Vice President of Quicken Loans Mortgage Services.

“Simply put, Q-L.O.S. addresses the very specific needs of today’s financial institutions in an intuitive and flexible way, allowing them to close more loans, faster.”

Q-L.O.S. also offers users the ability to receive premium mortgage services and support directly from QLMS underwriters, operations team members, dedicated purchase and refinance specialists, and experienced account executives.

“Many third-party originators are expanding their businesses and looking for new partners and better technology to serve their borrowers and improve the customer experience,” said Bob Dougherty, Vice President of Business Development at CalyxSoftware.

“We are proud to partner with an

WSFLASH y NOVEMBER 2017 y NMP NEWSFLASH y NOVEMBER 2017 y NMP NEWSFLASH y NOVEMBE

New American Funding Receives Accolades

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The Mortgage Bankers Association (MBA) has recognized New American Funding with its Diversity and Inclusion Residential Leadership Award for Market Outreach Strategies for companies with more than 1,000 employees. MBA Chairman David Motley presented Co-Founders Rick and Patty Arvielo with the award during MBA’s 104th annual convention and expo in Denver.

The Marketing Outreach Strategies Award salutes New American Funding’s hard work, dedication, and creativity in developing Latino Focus Committee and New American Dream. MBA commended both initiatives as exemplary diversity and inclusion programs that are reaching the industry’s fastestgrowing market segments.

“It’s an honor to receive this recognition. We’re passionate about making an impact,” said New American Funding President Patty Arvielo. “We believe it’s our responsibility to develop effective programs that equip more hardworking Americans with the opportunity to become viable homeowners.”

Arvielo established both initiatives as a means of serving underserved consumers. In 2013, she formed Latino Focus to enrich the Hispanic community with affordable homeownership opportunities; in May, New American Funding furthered that commitment by pledging to lend

$25 billion in new mortgages to Hispanic borrowers by 2024.

Arvielo also created New American Dream as an avenue for educating African-American consumers and to equip them with access to relevant home loan options. Since then, she has become a frequent guest of Armstrong Williams’ Sirius XM Urban View radio show, where she has educated AfricanAmerican consumers regarding homeownership.

The Stevie Awards for Great Employers have selected New American Funding as winner of the 2017 Gold Award for “Employer of the Year in Financial Services.” This is the second consecutive year that New American has claimed the top prize in the international competition, which recognizes the world’s best employers and human resources professionals.

“We’re very proud to be a twotime gold Stevie winner for Employer of the Year. We believe it’s a reflection of our commitment to make our employees our top priority,” said Rick Arvielo, Chief Executive Officer of New American Funding. “Our mission has been to create a fun, friendly, and family-oriented culture that inspires people to love working at New American Funding.”

The Stevies received more than 500 nominations in various categories from companies around the world and selected

New American Funding, a winner based on scores from a panel of judges and votes from the general public. The committee also named Rick Arvielo the Bronze Winner for “PeopleFocused CEO of the Year,” an award recognizing executives who make their organizations great.

NAMB Issues Policy Position on GSE Reform

The nine-year-old federal conservatorship of the government-sponsored enterprises (GSEs) needs to come to an end sooner than later, according to a policy position issued by NAMB. NAMB Immediate Past President Fred Kreger, CMC has authored an eight-point policy agenda to address the future of the GSEs and the Federal Housing Finance Agency’s (FHFA) regulatory control of these entities. Key among these concerns was the financial health of the GSEs. “The GSEs will run out of capital in the first quarter of 2018,” said Kreger. “NAMB believes the FHFA should permit them to accumulate capital in order to “buy time” so the legislative process can move forward at a reasonable and carefully deliberate pace in order

to minimize unintended consequences.”

Kreger also called for Fannie Mae and Freddie Mac to remain politically neutral in the future and not to be involved in lobbying on Capitol Hill. He also envisioned the creation of “other entities” in the secondary market, but warned that any new guarantors should be standalone operations under FHFA regulation and that “vertical integration should be prohibited from the secondary market to the primary market.”

Kreger also called on clarification of the question of GFees in a post-conservatorship environment and the requirement that the current and potentially new GSEs “support an effective national affordable-housing strategy that helps meet the needs of low-income and underserved households and communities.”

Stevens to Retire From MBA Leadership Role

David H. Stevens has announced that he will retire as President and Chief Executive of the Mortgage Bankers Association (MBA) on Sept. 30, 2018.

Stevens joined the MBA in May 2011 after serving as commissioner of the Federal Housing Administration (FHA) during the first years of the Obama Administration and a private sector career where he

held senior executive positions in the real estate and mortgage finance sectors. This marks the second time that Stevens announced he was leaving the MBA—one year after taking the reins at the trade group, he announced that would resign to take the job as president of SunTrust Mortgage, only to change his mind two months later.

In 2016, Stevens publicly acknowledged that he was diagnosed with prostate cancer.

On Monday, he announced that his cancer was in remission during the opening of the MBA’s Annual Convention in Denver.

With his retirement announcement, he stressed that he would focus on his health and his family and friends.

“This was a difficult decision,” Stevens said. “It’s hard to walk away from supporting an industry that shaped my career. It’s been an honor to work with talented staff, strong leadership and diverse membership of MBA.” The search committee to replace Stevens has been formed, with MBA Immediate Past Chairman Rodrigo Lopez as its Chairman.

MBA Predicts $1.2T Purchase Originations for 2018

rise. All the pieces are in place for stronger growth in 2018 and beyond.”

New Data Highlights Average Closing Costs

The national average closing costs totaled $4,876, according to a new data analysis from San

Diego-based ClosingCorp.

The $4,876 figure encompasses lender’s title, owner’s title, settlement, appraisal, the applicable transfer taxes, recording fees and other costs including inspection services and land surveys. This data is compiled using real rates and fees as reported by more than 20,000 real estate service providers in the ClosingCorp Network.

Among the states, the highest average closing costs were in the continued on page 16

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The Mortgage Bankers Association (MBA) is forecasting $1.2 trillion in purchase mortgage originations during 2018, a 7.3 percent increase from 2017.

However, the trade group is also predicting a 28.3 percent decline in refinance originations from 2017, to approximately $430 billion. As a result of the combined total, the MBA is expecting an overall decrease in mortgage originations to $1.60 trillion in 2018 from $1.69 trillion in 2017.

Looking further ahead to 2019, MBA predicted total originations will rebound to $1.64 trillion, with purchase originations of $1.24 trillion and refinance originations of $395 billion. And also looking backward, the MBA upwardly revised its estimate of originations for 2016 to $2.05 trillion from $1.89 trillion, due to the most recent data reported in the 2016 Home Mortgage Disclosure Act data release.

“We are projecting that home

purchase originations will increase at a faster clip in 2018, nearly double the rate that they increased in 2017,” said Michael Fratantoni, MBA’s Chief Economist and Senior Vice President of Research and Industry Technology. “The housing market has been hamstrung by insufficient supply, with inventories of homes remarkably low given the home price growth we have experienced. The job market remains strong, demographic trends are quite favorable, mortgage credit is becoming more available to qualified borrowers, and home prices should continue to

Originators See Value in Offering HECMs

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ome Equity Conversion Mortgages (or HECMs, commonly known as reverse mortgages) are becoming better known as a significant business growth opportunity for mortgage originators. FHA-insured1 HECMs are designed for homeowners and homebuyers age 62-plus, with refinance, line of credit and home purchase options.

Adding HECMs to a product mix can be seamless. Like any other business expansion, training, marketing and technology are key. It’s important to work with a lender that provides the expertise and training needed to teach originators about this versatile product, as well as how to educate senior clients.

Education is a major element of marketing the HECM, since many consumers may not be aware of the ways it can be used.

Explaining this option to consumers who would not have otherwise considered it can open the door to increased business by meeting a range of needs with a potentially more suitable solution.

For example, educating a customer considering buying a home on HECM for Purchase financing may seal the deal if they’re concerned about a monthly mortgage payment— because the HECM offers the option to pay as much or as little as they like each month toward the loan balance (they must keep current with property taxes, insurance, and maintenance).

It can also increase their spending power to buy the home they really want.

In addition, older clients looking to refinance, consolidate debt, renovate their home, and/or access a line of credit will enjoy greater financial control with a HECM—due not just to the flexible repayment option, but also its nonrecourse feature.

Technology can play a pivotal role in acquiring new HECM customers. Case in point: LQ, a loan qualification engine created

by Reverse Mortgage Funding LLC (RMF), which allows originators to quickly conduct a preliminary assessment of a borrower’s eligibility for a HECM. Similar to programs like Fannie Mae’s Desktop Underwriter, it makes offering HECMs more accessible because it’s simple to use.

Of course, technology is imperative throughout the origination process, providing the support needed to incorporate this product into a business model, and to grow in scale with it. The opportunity to grow is significant, with roughly one million Americans age 62-plus originating home equity loans each year.2 RMF delivers leading products, deep expertise, and ongoing training, so originators can grow their business by adding HECMs. Call (866) 318-2981 or visit Partners.ReverseFunding.com/LearnMore.

Footnote 1—This material has not been reviewed, approved or issued by HUD, FHA or any government agency. The company is not affiliated with, or acting on behalf of or at the direction of, HUD, FHA or any government agency.

2—Home Equity Borrowing, Reverse Mortgages and Senior Financial Outcomes; The Ohio State University.

NOT FOR CONSUMER USE © 2017 Reverse Mortgage Funding LLC, 1455 Broad St., 2nd Floor, Bloomfield, NJ 07003. Company NMLS ID# 1019941. www.nmlsconsumeraccess.org. Equal Housing Lender. Not all products and options are available in all states. Terms subject to change without notice.

Certain conditions and fees apply. This is not a loan commitment. All loans subject to approval. L1093-Exp062018 RMF delivers leading products so originators can grow their business by adding HECMs. Call (866) 318-2981 or visit Partners.ReverseFunding.com/LearnMore.

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District of Columbia ($12,573), New York ($9,341), Delaware ($8,663), Maryland ($7,211), and Vermont ($6,839). The states with the lowest closing costs were: North Carolina ($3,206), Iowa ($3,138), South Dakota ($2,996), Indiana ($2,934), and Missouri ($2,905). The New York City metro area had the largest closing cost for a specific market at $9,046, while the lowest metro closing costs were in Muncie, Ind., at $2,785.

“Of course, many homebuyers are still surprised closing costs are even required—making it vital for our company to keep educating borrowers and helping lenders improve the accuracy of their loan estimates in order to eliminate any surprises,” said Bob Jennings, CEO of ClosingCorp.

NAR Forecasts Modest Increase in Existing-Home Sales for 2018

Existing-home sales will finish 2017 at a pace of 5.47 million, the best volume in 11 years, but only a scant 0.4 percent higher than last year’s 5.45 million, according to data from the National Association of Realtors (NAR). In 2018, NAR predicts existing-home sales will rise by 3.7 percent to 5.67 million.

NAR also forecast a 5.5 percent increase in the national median existing-home price for this year and next year. is expected to rise to around 5.5 percent this year and next year.

However, the trade group also noted that first-time buyers accounted for only 34 percent of sales over the past year, the fourth lowest level since NAR began tracking this date 36 years ago.

“The lack of inventory has pushed up home prices by 48 percent from the low point in 2011, while wage growth over the same period has been only 15 percent,” said NAR Chief Economist Lawrence Yun. “Despite improving confidence this year from renters that now is a good time to buy a home, the inability for them to do so is causing them to miss out on the significant wealth gains that

homeowners have benefitted from through rising home values.”

Yun also forecast singlefamily housing starts to rise by 9.4 percent to 950,000 next year. New single-family home sales are likely to total 606,000 this year and rise to around 690,000 in 2018, Yun added, with an extra prediction that mortgage rates will gradually climb towards 4.50 percent by the end of 2018.

The Political Color Chart: More People Moving to Red States

The nation’s political environment seems to be impacting its housing markets, according to a new data analysis from Redfin that found 7.4 percent more people moved out of politically blue counties than to them during the first half of this year. In comparison, politically red counties saw about one percent more people moving in than moving out while so-called purple counties, where there’s a more balanced share of Democrats and Republicans, found 3.9 percent more people moving in than out.

Within swing states, the move away from blue was more pronounced. The blue counties lost 9.2 percent more people than they gained, while Republican-focused red counties gained 2.3 percent more than they lost.

However, President Trump cannot accept all of the credit or blame: Redfin noted that high housing costs in blue counties were the primary cause of this situation, with the average home in a blue county costing around $360,000, which is more than 62 percent more than the $223,000 average cost of homes in red counties.

“As blue counties are becoming increasingly less affordable, we see a great number of residents moving to red counties where they can afford the lifestyle they want,” said Redfin Chief Economist continued on page 36

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By Mat Ishbia

Fannie Mae’s New Single Source Validation annie Mae’s new Single Source Validation (SSV) is a big deal for mortgage brokers. Gathering bank account data from the borrower can eliminate the need for gathering paystubs, W-2s, other income or employment documents, and bank statements. The borrower just needs to provide their login and password for their bank account, and then their assets, income and employment can be verified–all in one step. That’s all that brokers need to move forward with the loan. SSV is another example of making things faster and easier for borrowers. The program is being piloted now, and will be more broadly available in 2018.

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BRAWL BRAWL stands for “Brokers Rallying Against Whole-tail Lending.” This was a big story at NAMB National, it was talked about at the MBA Annual Conference, and it’s generating a lot of buzz in the industry right now. A “wholetail lender” is basically a retail lender disguising itself as a wholesale lender–a place that tries to buy your loan and your customer from you. It was started by a group of mortgage brokers who got together to say they won’t work with wholesale lenders that focus on retail loans as their primary source of business. They started a petition that has been signed by roughly 500 brokers and wholesale lenders in the industry, as well as a Facebook Page that discusses which lenders are doing a great job supporting the wholesale channel, and which ones aren’t. We’re supportive of BRAWL at UWM. Congratulations to everyone who launched this cause.

Freddie Mac Guideline Changes Freddie Mac recently came out with a couple guideline changes–one better than the other. On the less positive side, regarding student loans, Freddie Mac said that if the amount a borrower is paying is less than a half-percent of the total loan amount, lenders have to raise the payment up to the half-percent. The good change that Freddie Mac made, regarding contingent liability, is that borrowers don’t need to have a second person listed as a co-signor on a loan to make payments on their behalf.

Mat Ishbia is president and CEO of United Wholesale Mortgage, a Troy, Mich.-based provider of mortgages for independent brokers nationwide. One of the nation’s leading advocates of independent mortgage brokers and wholesale lending, Mat has changed the lending platform, turning UWM into a $20 billion company and a top national workplace.

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mortgage lenders to originate and fund more loans, lower origination costs and shorten the time to close.”

Ellie Mae has also announced that it has launched Encompass Direct Mail, designed to help lenders identify new business opportunities and increase loan volume for lenders of all sizes through targeted direct mail marketing campaigns. The easyto-implement direct mail strategies leverage the content engine within Ellie Mae’s Encompass CRM and help lenders drive new purchase and refinance business while building their brand awareness through audience specific outreach.

Whether or not lenders utilize Encompass CRM, they can now take advantage of Encompass Direct Mail by simply selecting the mailer that matches their business needs and identifying their target audience. The solution leverages the contacts already in Ellie Mae’s Encompass all-in-one mortgage management solution, making it simple to access the necessary data, to deploy the mailers and target prospects with a tailored marketing message.

Quicken Loans Mortgage Services Debuts Automated Valuation Tool

Quicken Loans Mortgage Services (QLMS), the third-party origination branch of Quicken Loans Inc., is now offering the QL Property Hub, an automated valuation tool for mortgage brokers, bankers, credit unions and correspondent partners.

According to the company, the QL Property Hub uses multiple machine learning algorithms to present property values using property details, recent comparable sales data and an interactive map with street level details. QL Property Hub is being offered at no cost, and the company added that the tool is not limited to applications placed with QLMS. “Property data like square footage, room count and zoning can be outdated on popular home search Web sites, as the information is simply pulled from public record–there is no

verification,” said David Schroeder, QLMS Vice President.

“We have fulltime data experts to review and validate the public property data that we collect.”

Quandis Enhances Its SCRA Foreclosure Compliance

Quandis Inc. has announced that it has added new functionality that allows servicers and default attorneys to more easily manage images of official certificates from the Department of Defense (DoD) to demonstrate proof of compliance for adherence to the Servicemembers Civil Relief Act (SCRA).

The SCRA requires that organizations take various measures before beginning default and foreclosure proceedings on active duty military personnel. Noncompliance with the SCRA can result in steep fines, lawsuits and the potential to rescind foreclosures.

Quandis’ Military Search Service streamlines searches on delinquent loans by automatically combing the DoD’s database to identify borrowers that have active duty status, who are protected under the SCRA. The searches are very thorough, complete with name permutations, which catches slight variations of different names. Searches return a detailed, documented certificate from the DoD demonstrating proof of compliance.

Quandis has now added imaging functionality to meet all internal and external compliance requirements. The new functionality delivers a number of newfound efficiencies.

“One of the ongoing problems that organizations are faced with when it comes to SCRA compliance is not only verifying that a delinquent borrower is on active duty, but also in how they process, organize, or redact certificates provided from the DoD,” said Greg Kent, Vice President of Data Services at Quandis. “By adding imaging capability, clients now have the flexibility to take DoD certificates, centralize them, and store them internally for future reference and proof of compliance. This saves huge amounts of time spent by continued on page 20

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Compliance vs. Marketing Turning a rival into an alliance

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on’t let compliance stop you from attracting new customers! There are plenty of compliant ways to market yourself or your company.

Whether you focus on purchase or refinance.

The mortgage industry is moving in the right direction again, so let’s talk about how we can work together and close more loans.

Ironically, while compliance seemingly “butchers” a letter, they are redlining reprehensible content. So, now everyone has “problems” with new marketing programs. The mortgage industry is regulated more heavily now than ever. Making it even more critical now for marketing and compliance alike. To join forces and bring new business into the company! The question is … How? How can compliance keep the company operating within the guidelines while allowing effective marketing campaigns to bring in new business? The answer? Technology!

Most people use more than six “systems” every day. The same cloud-based (Online) systems that manage sales, run reports, process loans or give instant approvals can be integrated, automated and allow marketing and compliance to communicate instantly. Compliance can verify rules and regulations are followed. While sales and marketing can get instant feedback on new proposed methods allowing them to make changes and move more quickly.

Businesses have been taking advantage of technology to simplify both compliance and marketing for decades. The problem is that all these “Systems” are made (primarily) for one specific purpose. Leaving us with a need to use multiple systems. Why not put everything in one place?

If you keep everything separate the whole system cannot come crashing down at once. But isn’t your day, week or month ruined by power and Internet outages already? Think about it. If your Internet went out right now, wouldn’t the rest of your day be ruined? Your week or your month?

News flash … technology is advancing faster than people are. Both marketing and compliance have long since turned to technology for better and more accurate results.

Measuring, tracking and communicating are at the core of their needs. This is a common core need for both marketing and compliance. And this is the key to their integration.

Forget the adage of marketing “or” (“vs.”) compliance, and use the word “and.” “Compliance and marketing” because we need them both and technology is the key to getting them working together. Integrate the technology they use (even if they are completely separate systems) and you’ll have seamless communication and adherence to lending guidelines without the loss of new business growth. Plus, the automated features that come with integrating your technology will save the average user more time in six months than it takes to get everything working. Talk to your core tech provider ASAP about application program interfaces (APIs) and integration ability.

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

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FTEs to manually perform the same task.”

The Quandis Military Search Service for SCRA compliance can be used as a standalone solution or as integrated with leading law firm case management systems (CMS) and servicing platforms.

Informative Research Launches New Mobile Prequal Tool

Informative Research has announced the launch of Txt2Qual– a mobile-based tool that generates leads for lenders by providing an applicant’s prequalification status and contact information automatically. Txt2Qual gives lenders a full credit profile and FICO scores using a soft pull of credit, reducing out-of-pocket expenses and it won’t impact the applicant’s credit score or trigger competition.

“The market is in transition right now and lenders are in need for better lead-generating solutions,” said Renae Sherman, Informative Research’s VP of Business Development and Innovation.

“We’ve responded to this demand and created a new tool that automates one of the most difficult steps in the loan process.”

Using Txt2Qual, lenders can customize credit and underwriting criteria to target qualified leads and mortgage-ready borrowers.

Txt2Qual also allows lenders to automatically match each applicant to the best loan option and can prioritize which applicants to call first with IR’s Txt2Qual interface.

FirstClose Launches Instant Mortgage Prequal Tool

FirstClose has announced the addition of the FirstLook Report, an instant prequalification tool for mortgage lenders, to its portfolio of service offerings. The FirstLook Report allows lenders to efficiently prequalify borrowers by providing a multi-service report that includes credit, property valuation, flood zone indicator, title search, tax and MLS information, complementing the FirstClose Report, which serves home equity/consumer lending

departments at banks and credit unions.

The FirstLook Report provides lenders with all the information they need to make an informed decision about proceeding to the next level in the loan origination process with a potential borrower.

“We created the FirstLook Report because we had not seen anything available to lenders that could help them in so many different ways at once during the complex loan origination process,” said Tedd Smith, Chief Executive Officer of FirstClose. “Not only does this report give them an idea of everything they will eventually need in order to extend credit on real estate secured loans, but it also empowers them to make faster decisions at a very minimal cost.”

Ernst and LendingQB Partner on Fee Generator

LendingQB and Ernst Publishing Company have partnered to introduce the automatic Fee Generator engine to LendingQB’s Loan Origination Software (LOS), allowing lenders to automatically generate fees for Titles, Recording Transfers, Property Tax, and Inspections from hundreds of providers across the country with no extra clicks. Ernst begins pulling data on closing costs during the origination phase of a loan and offers it to the lenders automatically, pushing the disclosure process along more efficiently and effectively.

Ernst will be integrated into LendingQB’s Total Decision Engine to maximize the synergy between technologies.

“We are very proud of the vendor partnerships we have developed over the past 27 years and this new partnership with LendingQB is no exception,” said Gregory E. Teal, President and Chief Executive Officer of Ernst Publishing.

“Through this new relationship, LendingQB’s users will have access to the technology and closing cost data that the nation’s largest lenders rely on to originate compliant mortgages.”

Tim Nguyen, President of LendingQB, said, “LendingQB’s open-architecture integrations really opens the door for innovative technology and Ernst is no continued on page 32

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Message From NAMB 2017-2018 President John G. Stevens, CRMS Growing From Both Success and Failure hroughout our lives and professional careers, we will experience many successes and failures. How do we handle the roller coaster of emotions that follow each success and failure? And, how do we share our achievements in both a beneficial and professional manner?

As a father of three young children with another on the way, it is my responsibility to teach them the importance of responsibility. Not just responsibility for what they do wrong, but also for what they do right. Just the other day, one of my children was talking about an issue he was experiencing. He kept repeating how it wasn’t his fault. This prompted a lesson about how no matter what happens in life, whether it be good or bad, it is important to take responsibility for it. It is crucial to understand that taking responsibility for our actions can lead to growth and future success.

As a business professional, overcoming failure can be a daunting task. It’s important to remember that failure does not equal a lack of success, but rather presents an opportunity to learn and grow. As Thomas Edison once said, “I have not failed.

I’ve just found 10,000 ways that won’t work.”

If we are to truly learn from our failures, then it is also our role to cultivate success from failure. Like a gardener who is able to take an overgrown field and grow a beautiful garden, we are to take that same failure, remove the proverbial weeds, and grow it into a beautiful success. We can accomplish this by identifying our faults or weak spots, and then proactively working to improve them.

Additionally, allowing our workforce to celebrate success is equally as important for their professional growth. However, providing employees with the right avenues to share their success without feeling like they are bragging can be difficult.

Consider holding weekly or monthly meetings where employees are encouraged to share their wins and best practices. To further promote these successes, share these wins in an e-mail that is distributed to the entire company.

By sharing success amongst our teams, we build an environment for growth, a “Can Do, Will Do” spirit and open e dialogue for overcoming obstacles. Throughout our careers, it is important to stay humble. That is the piece of steel that binds together this entire process.

Working together keeps that steel strong and rust-free.

As Rick Pitino so eloquently said, “Humility is the true key to success. Successful people lose their way at times. They often embrace and overindulge from the fruits of success. Humility halts this arrogance and self-indulging trap. Humble people share the credit and wealth, remaining focused and hungry to continue the journey of success.”

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John G. Stevens, CRMS President of NAMB

“By sharing success amongst our teams, we build an environment for growth, a ‘Can Do, Will Do’ spirit and open e dialogue for overcoming obstacles.”

John G. Stevens, CRMS is President of NAMB and Vice President of Business Development for RPM Mortgage, the 17th-ranked retail nonbank lender in the U.S. He has been actively involved in NAMB and industry thought leadership since 2010. Stevens has been recognized as one of the most influential and connected mortgage professionals in the industry. Feel free to reach John by phone at (801) 427-7111 or e-mail JohnGStevens@gmail.com.

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NAMB’s Membership Minute: November 2017

By George W. Burkley III, CRMS

In mid-October and early November, NAMB had two magnificent events to benefit our members. NAMB National in Las Vegas was a tremendous success. We hosted close to 3,000 mortgage professionals, ranging from Originators, Brokers, Bankers, Vendors and Lenders. The Lender/Vendor Show, breakout sessions, speakers, and entertainment were outstanding. The feedback was great and most agreed it was a successful event and they would return next year for NAMB National at Caesar’s Palace.

In Early November, we met with NAMB delegates from many states in Minneapolis for training on how to help each state grow and improve their state associations and work with building membership on a grassroots level.

Our Membership Goal for 2018 is to add 2,000 new members to NAMB as we are the association for the mortgage professional.

Whether you are a Mortgage Originator, Banker or Broker, NAMB is working to help protect and grow your business. For $120 per year, your NAMB Membership opens the door to help you grow your business, as well as be the trade association voice to represent you with our regulators and politicians in Washington, D.C. For $10 a month, NAMB is working for you, the Originator, the Broker, the Banker. How much do you spend every month at Starbucks? NAMB is an outstanding value for our members and you will get a great return for your $120 investment as you can see below:

George W. Burkley III, CRMS is Owner and Founder of Goshen, Ind.-based American Mortgage & Financial Services, and NAMB Director, as well as Chairman of the Membership Committee. He may be reached by e-mail at George.Burkley@NAMB.org.

NAMB Government Affairs Committee Update

By Michelle Velez, CMC

We all know that time flies when you’re having fun. Sometimes when you are busy and focused on the task at hand, you don’t even notice the passage of time. Well, I can tell you that this year has just flown by and

In addition to reviewing all the bills, the GA Committee worked on several projects this year, with flood insurance, comments to the CFPB on changes to the Ability-to-Repay (ATR) Rule; and NAMB’s position on GSE reform as some of the bigger ones. You can find links to these papers on our newly redesigned Web site, NAMB.org.

Flood insurance reform has been a key concern of our association.

There were probably five bills introduced regarding flood reform as well.

NAMB applauds and supports the passage of HR 1422–The Flood Insurance Market Parity and Modernization Act, which clarifies that privately-issued flood insurance policies satisfy mandatory purchase requirements and allow a property owner to meet continuous coverage requirements for the purpose of re-enrolling in a subsidized Federal plan.

HR 1422 was incorporated in HR 3823, The Disaster Tax Relief and Airport and Airway Extension Act of 2017. Fixes to the National Flood Insurance Program (NFIP) were put off until early December 2017 and NAMB will keep working with Congress to help finalize passage.

This year marks the five-year anniversary for some of the regulation issued by the CFPB. This year, they assessed the Ability-to-Repay (ATR) rule, also known as the Qualified Mortgage (QM) rule. Under the rule, there is a 43 percent debt-to-income (DTI) ratio, and the points and fees cannot exceed a three percent cap. We put out a Call to Action to give originators the ability to comment on changes. One major request NAMB is looking for is to create an even playing field and remove the broker company compensation from the ATR. Additionally, there is a carve-out for the 43 percent DTI restriction which expires in 2021. I want to extend a thank you to everyone who submitted comments.

This brings us to one of the biggest projects of the year: GSE reform. There is a lot of chatter as to what should be done with Fannie Mae and Freddie Mac. There are things we need to focus on with regards to the GSEs. First and foremost, the main focus is to

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Now is the time to be part of the best mortgage trade association, NAMB. We are here to help you build a mortgage legacy for the future. All you have to do is visit our Web site, NAMB.org.

l HR 2570–The Mortgage Fairness Act of 2017 is one of the most important bills to our association. HR 2570 would remove the broker company compensation out of the three percent points and fees cap of the Ability-to-Repay Rule in a Qualified Mortgage. We have sent out a call to action on this, specifically asking all Loan Originators to reach out to their Congressman to ask them to support this bill as a co-sponsor. We would like them to contact Congressman Bill Posey’s (R-FL) office to co-sponsor the bill. l HR 916–Risk Management and Homeowner Stability Act of 2017 is a bill which amends the Congressional Budget Act of 1974 to prohibit the chairs of the congressional budget committees from counting increases to guarantee fees (G-Fees) as offsets for budget enforcement purposes. HR 916 includes an exception for legislation that increases guarantee fees to finance reforms to the secondary mortgage market. G-fees are charged by Fannie Mae and Freddie Mac to guarantee the payment of principal and interest on loans. This bill prevents the fees from being used to offset provisions that increase the deficit in determining whether a budget point of order applies to legislation. l HR 2948/S 1753–Transitional Licensing are bills which amends the SAFE Mortgage Licensing Act of 2008 to temporarily allow loan originators that meet specified requirements to continue to originate loans after moving: (1) from one state to another; or (2) from a depository institution to a non-depository institution.

NationalMortgageProfessional.com

Top Reasons to Join NAMB: l Great events and opportunities to take your business and income to the next level l Access to great networking and relationship-building with the best lenders and vendors l Wholesale Lenders who give you a pricing advantage over your competitors l Take Control, Get Involved: Protect your income and profession l Legislative updates and Activities l Best Business Insurance l Designations: GMA, CMC, CRMS, Lending Integrity Seal of Approval (Credibility and Notoriety) l Recognized as a Professional: Join your association just like doctors, Realtors and builders do l Power in numbers l NAMB+ l Education (Continuing education) l Networking among your peers … meet the best of the best in the mortgage industry

with it, my term as Government Affairs Committee Chair.

This has been such a crazy year. We have a new President, and with that, so many changes. This is still the time to enact positive regulatory changes for our industry. We have had the largest number of bills introduced that could impact housing reform and the mortgage industry than we have had in many years. I would say that there were more than 50 bills introduced this year. Not all of them would affect the mortgage industry specifically, but these are bills that could affect different part of housing reform. NAMB’s Government Affairs Committee has worked extremely hard and diligently with reviewing all the bills to make sure there were no unintended consequences for our borrowers and for the industry as a whole.

We have a couple of bills that we are specifically following:

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Why Do I Need NAMB? NAMB.org … JOIN TODAY! l l l l l l l l

NAMB Testifies Before Congress NAMB Works With the CFPB NAMB Participates in Multiple Regulatory/CFPB Panels NAMB Webinars Full-Time NAMB Lobbyist on Capitol Hill NAMB Protects Your Business NAMB Forms Industry Coalitions NAMB Education

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For detailed information, visit NAMB.org.

Are You an NAMB Lending Integrity Seal of Approval Holder?

(No additional costs to NAMB members)

How to Apply for your National Lending Integrity Seal LendingIntegrity.org Click on EARN the Seal NAMB members ONLY–Log in to the Lending Integrity site with your NAMB User ID and Password (If you do not know your User ID and Password, type in your e-mail and click log-in and the system will send you a password. If you have any issues, please call (972) 758-1151 or e-mail Membership@NAMB.org).

Lending Integrity Requirements The Lending Integrity Seal of Approval is awarded only to mortgage originators who meet specific requirements. To earn the privilege to display the Seal, mortgage brokers and loan officers must: l Be an NAMB member l Meet the requirements of the SAFE Act l Pass a national criminal background check l Attend eight hours (or equivalent) of professional development education each year l Attend two hours (or equivalent) of ethics training every other year or each license renewal cycle l Provide professional references l Subscribe to NAMB’s Best Business Practices l Agree to NAMB’s Code of Ethics l Must be renewed annually

find a way to maintain liquidity in the market and to protect the American taxpayer. The GSEs may need access to capital in early 2018. NAMB believes the GSE’s should be permitted to retain enough profit in order to keep an orderly housing market until housing reform legislation can be carefully considered. A rush to complete reform in Congress will only create unintended consequences for the housing market and harm consumers.

As always, I would love to hear your thoughts, concerns or comments. You may e-mail me directly at Michelle.Velez@SupremeLending.com. If you did not know, government affairs is my passion, and this year, I will be staying on the GA Committee as a Vice Chair for our new Chairman, Chris Bettis.

Michelle Velez, CMC of Supreme Lending in San Mateo, Calif. is of Secretary of NAMB, as well as Vice Chairperson of the association’s Government Affairs Committee. She may be reached by e-mail at Michelle.Velez@SupremeLending.com or Michelle.Velez@NAMB.org.

NAMB: The Excitement Is Back! By Linda McCoy, CMRS Wow! We are beginning the new 2017-2018 NAMB Board year, and our organization is getting stronger and better each year. We have so much excitement surrounding the new members on the board. We are anxious to get started with our plans to create more value for our members.

I have the privilege of being a part of the great things happening with the association, and I love being among the finest mortgage professionals in the industry.

NAMB National was one of the best mortgage conferences in the history of the association, and anyone who attended will be talking about it for years to come.

Our plans for the near future is a push in education. I am sure there are many of you who remember when NAMB was the leader in educating mortgage originators and brokers. We even trained the trainers who went back to their states and held classes to give value to the state’s membership. We started certifications to set our certified members a status above the rest. When you pass the test and receive one of our certifications, you will join the ranks of the top educated mortgage originators in the U.S. By having one of NAMB’s certifications, you will have earned the right to have the certification after your name such as “Linda McCoy, CRMS.” It makes you feel good every time you sign a document. I have the honor of being the Certification Committee Chair for this next year, and my goals are to update the certifications we have because they were created before TRID. We also plan to create specific VA, FHA and Commercial Certifications.

The NAMB Board is also committed to increasing membership. The more members we have, the stronger we will be heard in D.C. when it comes to the issues we face as mortgage professionals. We have taken NAMB on the road to parts of the U.S. that have not had a presence in years or ever. We are committed to helping our members achieve the maximum value for their membership through education, networking, and giving them the ability to become a part of the organization firsthand. We want to be where you need us. We want to bring the states back to NAMB and give the states a platform for success.

I hope you will commit to join both your state association and NAMB this year. Let’s make this the year that you set yourself apart from your peers and get certified. Get excited and go to NAMB.org, and sign up for a certification. We have one just for you.

Linda McCoy, CMRS of Mobile, Ala.-based Mortgage Team 1 Inc. is a member of the NAMB Board of Directors, as well as NAMB Certification Committee Chair. She may be reached by e-mail at Linda.McCoy@NAMB.org.

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getting toknow KIMBER WHITE B Y

K

How did you get involved with RE Financial Services?

Valerie Saunders and I were working together through FAMP, and we decided to get together. I clicked with her, and within a year after meeting her, I began working at the company.

How did you get involved with FAMP? I had moved to Florida in 2005 and

What are your primary goals as FAMP President?

First, to broaden and retain membership. I want to enhance the membership experience with more Webinars and take part in more community involvement projects, such as launching our first Homeowner Day. We already started the rebranding effort. It’s been many years since we were rebranded.

FAMP has a new management company, NAMB Association Services, and we chose them because they know about our association and will work with us to obtain the goals we are seeking.

We are also working on grooming the future leadership of our association. A lot of young people have come into the financial industry. Unfortunately, we’re not capturing them—they are working at banks and on the retail side. We have to market that this industry is a good industry. It is definitely a

goal of mine. We all know the average age in the mortgage industry is currently 53 years of age.

We are developing programs aimed at Millennials, including a panel with Millennial mortgage professionals, and we are working to get more young people to join.

What is the state of the mortgage market in Florida?

Florida is one of the fastest-growing markets in the United States. We did see a slowdown since Hurricane Irma—the last quarter was slow. We are also waiting to see if interest rates and tax cuts could adversely impact our industry.

FAMP has been gaining a lot of attention for its charitable work.

Can you tell us what this involves?

Each FAMP Chapter has a local charity that it works with. We believe in the concept that charity begins at home, so we let each Chapter pick the local charity and start supporting them in the community. FAMP itself is working with Blessings in a Backpack, which provides food for underprivileged elementary school children on weekends who might otherwise go hungry. We are also working on a non-profit that will provide help to those in our industry in the event of the next natural disaster.

You have been part of the mortgage profession for 29 years.

What do you consider to be your

proudest professional accomplishments?

The greatest things that I’ve done is to help people who never thought they would get into homeownership and to give back to this industry.

This is the greatest industry: We help peoples’ dreams come true.

I was also honored to receive NAMB’s Distinguished Service Award. I was humbled, because NAMB last presented that award in 2005 and 2011.

What do you see as the near-term future for the housing market?

The housing market will probably continue to grow. But we should probably get it to slow down. I have been through every up and down, and the housing market has the ability to stabilize and slow down.

But you cannot outgrow peoples’ incomes—we’ve been through that before.

As I stated earlier, we also have to see where mortgage rates go, and how Congress plays out tax reform. If they start removing the deduction from homeowners and change the real estate property tax deduction, that will affect the industry. And many people have jobs tied to housing, which could also be negatively impacted if those changes are made.

Outside of your mortgage industry work, how do you spend your leisure time?

I like to unplug and spend time with my family and my orchids. And with Benjy, my Yorkie.

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How did you first get involved with the mortgage profession?

Was this your original career path?

It was not my original career choice. I owned an exterminating pest control company in North Carolina, but I developed allergies to the chemicals that I was using. I needed to get out of that business, and my CPA at the time said that I would be good in the mortgage industry. His exact words were, “Why not get into the mortgage industry? I have friends in Virginia that own a business.” This was in 1988.

had attended meetings off and on. I never asked to be involved, but I saw an ad seeking people to be involved. That was in 2011, and I knew that I could make a difference.

I started in the Broward Chapter of FAMP, which is the largest in the state, as secretary and worked my way up. I was elected to the state’s Executive Committee three years ago, was elected Treasurer, then Vice President, and I became President in August. My term runs through August 2018.

H A L L

NationalMortgageProfessional.com

imber White is a Partner at RE Financial Services in Oakland Park, Fla., and President of the Florida Association of Mortgage Professionals (FAMP).

National Mortgage Professional Magazine spoke with Kimber regarding his career in the industry and his work on behalf of mortgage professionals nationwide.

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NAMB Honors Tops in the Industry in Vegas At the recent NAMB National event in Las Vegas, NAMB took time to recognize a number of its members for their accomplishments over the past year. Congratulations to the following award winners and congrats are in order as well for all the nominees for these distinguished honors:

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01 NAMB Immediate Past President Fred Kreger, CMC awards NAMB VP Nathan S. Pierce, CRMS with the Mortgage Professional of the Year Award 02 NAMB COO Harry H. Dinham, CRMS was honored by Fred Kreger with an NAMB President’s Award of Merit 03 NAMB President’s Award of Merit recipient Ryan Riesterer (right) accepts his award from Fred Kreger 04 Fred Kreger (second from left) honors NAMB Mortgage Professional of the Year Award finalists Kimber White, CRMS; Rick Bettencourt, CRMS; and Nathan S. Pierce, CRMS

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05 Fred Kreger (center) awards Paul Marsh, CMC, CRMS (left) and George Burkely, CRMS (right) NAMB’s Leadership Awards for 2017 06 Kimber White (right) is presented with the NAMB Distinguished Industry Service Award by Fred Kreger (left) 07 NAMB Immediate Past President Fred Kreger (right) presents the association’s Affiliate Company of the Year Award to Stearns Lending 08 NAMB President John G. Stevens, CRMS (right) accepts the Kathy Love Volunteer of the Year Award on behalf of Trent Hendry from Fred Kreger (left)

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NAMB National 2017: A Visual Retrospective October 14-16 at The Rio All-Suite Las Vegas Hotel & Casino

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01 NAMB President John G. Stevens, CRMS welcomes attendees to Vegas for NAMB National 2017 02 Keynote Speaker Ann Coulter addresses a packed house 03 “That MI Guy” Steve Richman delivers his presentation “The Commodity Conundrum: How to Differentiate Yourself in a Market Demanding Scalability and Repeatability!”

04 Mat Ishbia, President and CEO of United Wholesale Mortgage, addresses NAMB National attendees during his session “Dominate Your Retail Competition” 05 Michael Surber, President and CEO of NAMB+ Endorsed Provider USA

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Business Lending (center), with NAMB President John G. Stevens (left) and Nathan S. Pierce (right) at the Mortgage News Network booth Art “Ski” Swiatkowski (right) of Silver Hill Funding chats with an attendee during the NAMB National 2017 Trade Show Reps from United Wholesale Mortgage field questions during NAMB National The REMN crew brought the Roaring 20s vibe to Vegas for NAMB National Tom Hutchens, SVP of Sales and Marketing for Angel Oak Mortgage Solutions, presents “Now is the Time—Why Non-QM Lending Today Matters in Growing Your Business”

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NAMB National 2017: A Visual Retrospective October 14-16 at The Rio All-Suite Las Vegas Hotel & Casino

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16 10 Rey Maninang, SVP and National Sales Director for Carrington Wholesale, delivers his session on trends in the industry 11 Paul Lucido, PRMG’s National Marketing Director, presents the Breakout Session “Building Brand Equity Through Culture” 12 David Schroder, Vice President of Quicken Loan Mortgage Services, helps attendees plan for a successful year during the “Championship Lending” session 13 Brian Stevens of National Real Estate Post delivers his state of the mortgage marketplace update 14 Nate Clear of First Funding and Jon Tallinger of Class Appraisal pause for a photo on the exhibit hall floor of The Rio All-Suite Las Vegas Hotel & Casino

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15 Brennan Holland of Lenders Compliance Group (right) details his company’s product offerings 16 NAMB Director Linda McCoy at the NAMB booth with Marsha Wright, author of the book, The Secret Collaborative Economy: More Clients, More Exposure, More Profit, Faster!

17 NAMB President John G. Stevens (center) on the exhibit hall floor with Dennis Waxman of Stearns Lending (left) and Allen Middleman of Freedom Mortgage (right) 18 Jeffrey Tesch, Managing Director & Private Lending Expert for RCN Capital, delivers his presentation “Boost Your Business With Fix & Flip Loans and Private Lending”

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NAMB National 2017: A Visual Retrospective October 14-16 at The Rio All-Suite Las Vegas Hotel & Casino

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19 Mark Reeve, VP of the Reverse Mortgage Division for Plaza Home Mortgage, discusses the latest FHA changes 20 Damon Richardson, Renovation Lending Specialist with REMN Wholesale, discusses 203k during his Breakout Session 21 Jason Haye, Vice President, National Sales Manager for Velocity Mortgage, breaks down alternative financing options during his presentation 22 Craig Barnes, Corporate Education Leader at Reverse Mortgage Funding, presents his primer on the reverse mortgage marketplace 23 Valentin Saportas and Joe Dahleen of software provider MortgageHippo, a

26 NAMB+ Endorsed Provider 24 Joel Berman of Mortgage News Network (center) interviewing Tony Caico (left) and Jeff Sherwood (right) of Cardinal Financial Company 25 Brian Stevens of National Real Estate Post stops by the festive REMN Wholesale booth for a chat with REMN Senior Account Executive Altaf Lalani 26 Bob Talpas, Account Manager for Reverse Vision, details the technology behind originating reverse mortgages 27 Freddie Mac Technology Account Manager Thomas Smith details the latest changes with the GSEs in the secondary market

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NAMB National 2017: A Visual Retrospective October 14-16 at The Rio All-Suite Las Vegas Hotel & Casino

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31 28 The panel at the B.Y.O.B. Power Workshop, led by Ginger Bell, Education Specialist for Go2training, explains how to take your business to the next level 29 NAMB President-Elect Richard Bettencourt and Director Linda McCoy call out raffle winners during the NAMB National Trade Show 30 The crew from United Wholesale Mortgage (UWM) gather for a photo on the exhibit hall floor in Vegas 31 Paul Lucido of PRMG congratulates raffle winner Dawn Cychner of C&S

32 California Capital 32 NAMB Board Member Olga Kucerak and NAMB Lobbyist Roy DeLoach at the evening reception 33 Kimber White and Ginny Ferguson pause for a photo

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NAMB National 2017: A Visual Retrospective October 14-16 at The Rio All-Suite Las Vegas Hotel & Casino

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34 Lou Gramm of Foreigner with friends and members of the NAMB Board of Directors 35 NAMB Immediate Past President Fred Kreger (right) gives the Presidential Pin to incoming NAMB President John G. Stevens (left) 36 Ddendyl Hoyt from Season 6 of “The Voice” performs in the exhibit hall for NAMB National attendees 37 Keynote Speaker Ann Coulter with members of the NAMB 2017-2018 Board of Directors

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CFPB Issues Final Rule Amending Regulation B

By Gavin T. Ales

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n September, the Consumer Financial Protection Bureau (CFPB) issued a final rule that amends Regulation B, the regulation which implements the Equal Credit Opportunity Act (ECOA). The rule provides alignment of Regulation B’s requirements for collecting demographic information about loan applicants with the requirements for reporting this same information under Regulation C (which implements the Home Mortgage Disclosure Act). The final rule is primarily effective on Jan. 1, 2018, to coincide with the effective date of the 2015 HMDA Final Rule issued by the CFPB on Oct. 15, 2015.

The final rule generally adopted the proposed rule as published with some minor changes. For instance, the CFPB did adopt in the final rule two additional provisions that were recommended by commenters to the proposed rule. The provisions of the final rule will provide the flexibility lenders required in order to comply with the requirements of both Regulation B and Regulation C. The final rule also includes clarification for lenders who need only comply with one of these regulations.

The rule allows HMDA-reporting institutions and Regulation B creditors to collect disaggregated ethnicity, race and sex information for loan applicants and co-applicants as HMDA requires these categories to be reported for loans with action taken in 2018. The rule does allow flexibility in collecting this information for creditors who are not required to report data under HMDA/Regulation C but imposes the same record keeping requirements as would otherwise apply under Regulation B. The rule also adds flexibility for creditors who may move in and out of Regulation C’s reporting requirements by allowing for collection of only the aggregated categories after five years of non-reporting. This allows a creditor to continue to collect the information in the same manner across both reporting and non-reporting years for easy data comparison.

In addition to the regulatory changes made by the final rule, the CFPB also made amendments to Regulation C to update the model forms provided in its appendix. Currently, the 2004 version of the Uniform Residential Loan Application appears in the appendix as a model form that can be used as a safe harbor by creditors for collecting demographic information.

The amendments will remove the 2004 URLA from the appendix as of Jan. 1, 2022. The revised URLA is not added to the appendix as a model form as it was the subject of a separate Federal Register notice acknowledging its compliance with Regulation B. The rule does add to the appendix a new model form for collecting demographic information and also makes reference to the model form provided under Regulation C for collecting this information.

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

SPONSORED EDITORIAL

new to market

continued from page 20

exception. Having a fee engine integrated to our LOS is invaluable when it comes to the disclosure process of a loans lifecycle.”

New CoreLogic Offering Seeks to Speed Up Appraisal Turn Times CoreLogic has released Appraisal Xcelerator, a digital appraisal appointment scheduling solution that can be incorporated into the Collateral Management System (CMS) or leading appraisal management platforms.

Appraisal Xcelerator streamlines the scheduling process for appraisals by seamlessly connecting lenders, borrowers, appraisers and real estate agents. Using the Xcelerator application tool, the borrowers or property contact can see available appointment dates and times on their Apple and Android devices and computers, and can select their preferences for the appointments. Similarly, the specified appraiser can accept or modify appointments and communicate directly with the borrower or contact, via text, voice or e-mail. Once the appointment has been set up, the borrower receives a confirmation of the appointment, complete with information on the appraiser who will be doing the inspection. Lenders have complete transparency into the appraisal cycle through a live tracking Web site.

“Appraisal Xcelerator introduces the efficiencies of digital and mobile technology into appraisal scheduling: taking time and hassle out of the process,” said Devi Mateti, Executive of CoreLogic Valuation Technologies. “Shortening the scheduling interaction will reduce turn times, enhance the overall customer experience and bring the industry closer to digitizing the mortgage process.”

ValuTrac Launches SnapShot Appraisal Review Tool

appraisal review, a streamlined appraisal review tool available through ValuTrac Software’s ValuTrac Pro and ValuTrac Pro Plus.

SnapShot was designed for organizations that want a faster, more streamlined automated appraisal review. SnapShot supports Fannie Mae Appraisal Forms 1004, 1073, 1025, 1004C and 2055, and can be set up to run automatically when appraisers upload an appraisal report.

SnapShot uses a streamlined, predefined set of rules, which vary based on appraisal form. Users have full control over all automated rules and they can also include manual review questions. Users can set SnapShot to flag findings as hard stops or warnings, based on their quality assurance procedures.

“Lenders and AMCs don’t always need the intensive appraisal quality audit—or its higher price tag,” said Clint Cornett, Chief Executive Officer of ValuTrac Software. “SnapShot is for companies that want to eliminate the most frequent issues that lead to costly delays, right up front. SnapShot improves the appraisal review process with a more time efficient evaluation that leads to a higher quality appraisal report.”

SnapShot evaluates data fields for errors, omissions and inconsistencies, cross-references the appraisal’s data against the appraisal order’s data, and verifies appraiser status according to ASC (Appraisal Subcommittee) and U.S. Department of Housing & Urban Development (HUD) rosters.

SnapShot also displays the appraisal value with the comparable sales adjusted value range provided in the report, and a HouseCanary automated valuation and confidence score.

Your turn National Mortgage Professional Magazine invites you to submit any information promoting new “niche” loan programs, new products or any other announcement related to the introduction of a new program, to the attention of: New to Market column Phone #: (516) 409-5555 E-mail: Newsroom@MortgageNewsNetwork.com

ValuTrac Software has announced the launch of SnapShot automated

Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

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

Dear Mortgage Professional, This is the compliance issue of NMP Magazine and NAMB Members can receive special discount pricing from Brokers Compliance Group, one of NAMB+’s long-time Endorsed Providers. Give them a call today and mention NAMB+!

I want to thank everyone who stopped and said hello to us at NAMB National last month. What an awesome event. Thanks also to our incredible Endorsed Providers who were there, including Avantus, Brokers Compliance Group, CalSurance, MortgageHippo, PreApp1003, Silver Hill Funding and USA Business Lending!

On a personal note, I am excited to announce that this month marks the start of my tenure as NAMB+ President. We have an incredible new Board of Directors and we are excited to be rolling-out new Endorsed Providers, new initiatives, and a

completely refreshed and more user-friendly website in the coming months.

Finally, I want to extend a huge “thank you” to Nathan Pierce for his leadership and service as NAMB+ President over the past two years and George Burkley who has stepped down as the NAMB+ Treasurer after many years of services so that he can focus his attention on continuing to grow NAMB’s membership as chair of the Membership Committee! I look forward to continuing to grow NAMB+ and expand the benefits we make available to NAMB Members.

Sincerely,

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See below for a complete listing of the current NAMB+ Endorsed Providers and visit NAMBPlus.com for more information.

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NAMB members receive a discount off Brokers Compliance Group compliance support programs.

eEndorsements promotes your success by making it easy to capture customer reviews, control your content, and publish your testimonials where they matter to drive new business. Automatically share your reviews on Facebook, Twitter and Linkedin. Easily invite your clients to share reviews to sites like Yelp and Zillow. eEndorsements will also hosts a review profile page indexed and found in Google Search. eEndorsements offers a 34% discount to NAMB Members. For more info please visit http://eendorsements.com/namb.

Sarma gives you access to their extensive resources including: merged reports from the three top credit bureaus, CreditXpert tools, AVM Reports, SocialValidate, TRV Verification, Interface with over 30 LOS, Fannie and Freddie connection, Verification of employment/deposit and much more.

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

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

USA Business Lending is the nation’s premier commercial brokerage firm representing over 3500 lenders.

NAMB Members will receive a Twenty-Five Percent (25%) discount off of the regular price with their NAMB Membership.

Simplii VOIP business phone solutions include all the features and functionality of a high end business phone system without the high costs. We offer all NAMB members a 10% discount off their phone services. For more information please e-mail stevew@simplii.net

NAMBPLUS Login Instructions Username = Member Number Password = First initial of your first name capitalized and your last name with the first letter of the last name capitalized (example = JStevens)

If you are not a NAMB member please visit NAMB.org and join today to gain access to NAMBPLUS.com and the many benefits NAMB members receive!

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

MortgageHippo Swift allows loan originators of all sizes to deliver a modern borrowing experience, significantly improve borrower conversions, reduce origination costs and integrate with other innovative technologies in the mortgage industry. NAMB members will receive a 25% discount. Please visit www.mortgagehippo.com/swift/.

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

NationalMortgageProfessional.com

CalSurance® offers competitively priced Professional Liability Insurance for NAMB members. Multiple coverage options and an easy application process are available.

Visit www.calsurance.com/namb for program details and to apply.

MassMutual Disability Income Through an arrangement with Massachusetts Mutual Life Insurance Company (MassMutual), NAMB members have an opportunity to apply for individual disability income insurance (DI) at discounted rates.

Learn more by calling Andrew Berman at 516-652-1819

MBA’s 2017 Annual Convention

By Tom LaMalfa

his is the 19th time since 2008 that this survey of senior mortgage banking executives has been conducted and distributed. It is completed twice annually, at the MBA’s Annual Convention in October and at the MBA’s National Secondary Market Conference each May. My Conference experience this year consisted of attending the Capital and Secondary Market Committee Meeting; dining with the owner of a 25-year-old brokerage based in Orange County, Calif., and the Co-Director of the International Center on Housing Risk; lunching with a Fannie Mae executive; breakfast with the Managing Director of a D.C.-based minorityowned research firm; scouring the exhibit hall (The Hub) for an hour; did a video with Mortgage News Network for an upcoming conference call with the National Association of Minority Mortgage Bankers of America (NAMMBA); and completed 23 surveys over three days.

For those reading this who don’t know me, I’ve been a full-time observer and student of the mortgage banking industry since 1977 when I worked for MGIC and co-authored a weekly newsletter on the secondary market for a decade plus. This year’s MBA Annual Convention was my 37th in 40 years in the industry.

The purpose of this survey is to gather the opinions, ideas, values and expectations of senior mortgage banking executives on many of the business and industry’s key issues, topics and concerns, along with some soft data. A second purpose of this series is to bring senior executives further into a more public discussion of key industry issues and topics without drama and despite the sometimes controversial nature of some of the underlying issues. This industry is huge, important, diverse and yet

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connected and beholden to the federal government in so many ways.

For this year’s Convention, 28 meetings and calls were arranged and an equal number of surveys were completed. The surveyed group consisted of six CEOs, four Presidents, seven EVPs, nine SVPs and two VPs. Excluding the CEOs and Presidents, all of those surveyed this year work in either capital markets, production, finance or operations. Of the firms represented in the survey, eight produced more than $10 billion year-to-date through September 2017, another 11 originated $1-$9.0 billion, and nine produced less than $1 billion. The smallest firm produced $100 million, and the largest did over $150 billion. The surveyed group’s mean was $15.6 billion of volume and the median was $2.5 billion.

The executives surveyed represent 14 banks and 14 nonbanks. Included were three homebuilder-owned firms, one realtor-owned firm, three private equity-fund-owned companies three owned by hedge funds, four privately-owned firms and 14 financial institutions. One of the firms is predominately an Internetbased call center. Ten of the firms originate through one channel (retail), 13 produce loans in two channels, and five of the 28 originate in retail, correspondent and broker wholesale. About half operate call centers.

The surveyed group was carefully structured to be representative of the lending industry in terms of the size and type of firms, their reach and scope, physical location, product menus and operating channels.

All efforts are made to mimic the membership profile of the MBA as best I can.

The 69-question survey used in Denver was drafted in the weeks before the conference, phone tested, and run past several industry

folks for completeness and clarity.

Input into the questions was sought and received from past and present members of the MBA’s Residential Board of Governors (RESBOG) and MBA Officers, and from several past chairs of the Capital and Secondary Market Committee. Except for the telephoned group that was surveyed in the days before the Convention, all the surveys were completed face to face during meetings at the Convention held Oct. 22-24, 2017.

On average, 42 minutes was required to complete each survey.

As for the survey process, it starts with reading the questions to the executive, recording the responses, and then later compiling the information in a spreadsheet, examining the data, preparing a cursory report of surface findings, and distributing the write-up to those surveyed and other interested parties.

As for the survey group, it consists almost exclusively of past and present clients and longstanding industry associates. All are very knowledgeable industry veterans. Many of those surveyed have participated in this bi-annual survey since its inception. Most are close industry contacts that have helped me stay abreast of intraindustry issues, trends and developments over the course of decades.

Only two of the 28 executives were surveyed for the first time and one new firm was included in the survey group this time around.

However, many changes in the survey group were made in the past seven years to adjust for the major secular shift from bank originators to independent mortgage bank (IMB) originators.

Although some of the questions in the survey are time specific and appear on these surveys only once or twice, others are included in every survey. More data-driven questions like Questions 2-10 and 15, 28-20, 29, 31, 40 and 53 are always included in the survey. Some

questions may be asked once and then jettisoned, while others, such as evaluations of Fannie Mae and Freddie Mac, are asked year after year. Frequency depends on the importance and sustainability of the topic or issue.

Collected surveys provide a dataset of queries and responses over time. Analysis of the resulting longitudinal data shows patterns and trends, and may signal new developments in the business and industry. For example, will the business discover a strong resurgence of mortgage brokers and wholesaling? Or, is concern over the risk characteristics of mortgage loans a growing worry?

This latest survey shows slowing production, plenty of competition, thin margins, satisfaction with the GSEs, plans to beef up investment spending, and a building up of risk.

It need be said that given who is being polled, it is understood that the findings reflect only the responses within the mortgage banking industry, not a broader cross-section of the U.S. population. Not a random survey, there is nothing in these results that would necessarily be germane outside the mortgage finance industry. It also deserves mention that survey results are only valid as of a specific point in time.

Things can change, sometimes quickly. That said, I believe as a longstanding industry observer, the findings well represent the facts, expectations and thinking of the mortgage industry as a whole.

Indeed, most readers of this report will likely find many, many more confirmations to their own thinking about the subjects herein than any real major surprises in the survey findings. That said there were several surprises in the findings for readers of this report to uncover.

From my perch, the mood of this year’s Conference was upbeat but cautious. With refi activity slowing, volume won’t match 2016’s $1.9 trillion. Guarded optimism among

on Survey: A Report of Findings to 10. (In this survey, higher numbers indicate greater or more of whatever is asked.)

When asked the same question last May, the average for the panel was a 7.3, so concern remains, though somewhat less.

Questions 17-25 all involve the two GSEs, Fannie Mae and Freddie Mac. Question 17 sought an assessment of Freddie’s Loan Advisor Suite, and Question 18 asked if firms were selling more, fewer or the same number of loans to Freddie in 2017 compared to 2016. On the 10-point scale, Freddie received a 6.3, with a range of two to 10, with one each of nine and 10 and six eights. Of the 28 firms surveyed, 14 were selling more loans to Freddie Mac this year, nine were selling fewer, and five reported no change.

Questions 19 and 20 inquired about the executives’ assessment of Fannie’s Day One Certainty initiative, scaled one through 10. Day One Certainty scored a 6.7, with a range from two to 10, including three 10s, three nines and five eights.

Seventeen were selling the same or more loans to Fannie Mae, while 11 others were selling fewer. Do these two GSE initiatives–Loan Advisor Suite and Day One Certainty–both clarify underwriting risk and lower costs, asked Question 21? They lower risk and reduce cost said 15 executives, but 12 others said no, with most of those agreeing that risk was reduced, but that lower costs were anticipated but not yet being found.

Questions 22 through 25 addressed these four questions: Who provides better service and price, Fannie Mae or Freddie Mac; Do the executives favor the decision to raise the DTI cap at the two GSEs; and Who leads on technology and innovation, and who leads on relationship management?

Fourteen of the 28 executives indicated that Fannie Mae provided better service and price, nine said Freddie Mac was better (based on

these two criteria), and five saw no difference. As for the decision to raise the DTI cap to 50 percent at the GSEs, twice as many were supportive as not. Question 24 asked who leads on technology and innovation–Fannie Mae, Freddie Mac or no difference. Hands down, Fannie leads on technology and innovation, versus the one lone dissenter who reported that Freddie had the ring. Eight others reported no difference. As for relationship management, Question 25, the score was 7-7 with the majority reporting little difference between the twosome in this arena.

Question 26 asked whether fungibility or a better experience/value were more important with the sales to the GSEs. Results were mixed, but by a count of 18 to 10, fungibility tallied the larger number of responses.

Question 27 and 28 sought letter grades (of A to F) from the 28 executives based on their perspective of each of the GSE’s overall performance. Fannie received a B+ with three As, 18 Bs, four Cs and one D, while Freddie Mac received a B- with one A, 16 Bs and 10 Cs. Question 29 asked how much of the executives’ firms’ total operating expenses were consumed by compliance (all-in). The average for the 28 firms was 19.5 percent, with a range of five through 40. The median for the group is 20. Is automation reducing or increasing the cost of originating mortgages, asked Question 30. Very mixed findings on this query, with 15 saying it is lowering costs, but 13 others saying automation is still increasing costs (but eventually will reduce costs). Question 31, a longtime favorite of mine, asks how much the cost of a mortgage loan increased post the 2008 Financial Crisis and Dodd Frank. For the group of 28 firms, the average increase is $1,784/mortgage. The continued on page 82

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conventional business that was over 80 percent LTV. The average was 37.4 percent amid a 10 percent to 80 percent range and a median of 25. Question 8 asked about growth in riskier loans this year– high LTVs, high DTIs and low FICOs. The responses were mixed, with 16 reporting yes versus 12 saying not.

Are you currently offering a GSE one percent downpayment program, Question 9 asked? Nearly four times as many firms weren’t doing 99s compared to six offering the product.

Question 10 wanted to know if executives expected aggregate industry production to slow in 2018.

Twenty-two of those surveyed reported expecting fewer originations next year versus 5 who expect largely flat lending yearover-year.

Question 11 focused on operating expenses, whether they are up or down from 2016. Four reported no change, five said down (a bit), but 19 reported higher expenses year-over-year.

Questions 12 and 13 inquired about industry profits and their own firm’s profits. Regarding industry profits, 22 of 25 expect 2017 profits will exceed those of 2016. As for their firm’s profits, nine were up (largely due to special factors), two were flat and 17 reported fewer profits in 2017 through Q3.

Question 14 wanted to know what the executives’ firms were planning to do with their servicing next year. Of the 28 firms, nine were buyers of MSRs, 11 were sellers, and eight were only retaining, not buying or selling.

Is your employee headcount up or down, Question 15 asked?

Firms showed mixed results, with employment up at 16, down (a bit) at 11, and unchanged at one other firm. What’s your level of concern about the liquidity and market value/price of Ginnie servicing, Question 16 wondered. The panel’s average was a 6.4 on a scale of one

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market participants was my key takeaway from this conference. The Trump Administration’s foibles were the Conference’s most discussed topic.

Thus prefaced, it’s on to the questions. Note that what follows is not an analysis; rather, it’s a straightforward iteration of the collected responses. No attempt is made to provide any color on the issues or topics included in the questionnaire. None of the complexity of so many of these issues, or of the various nuances in topics or responses, is dealt with in this report. These are the surface findings only.

Question 1 asked whether respondents expected mortgage rates to rise by more than 50 basis points in 2018. No, said six times as many as not. Question 2 inquired if production was up, down or flat to date this year compared to 2016.

Most of the 28 executives surveyed reported production dollar volumes were down. Only seven reported higher production volume, with two others reporting flat compared to 2016.

Questions 3, 4 and 5 dealt with origination volume, specifically what portions represented each of three categories of production. Purchase business accounted for an average (unweighted by volume in this or any of the subsequent questions) of 72.6 percent of the entire group’s origination activity. The range of responses was quite wide: from 20 percent to 99 percent. The median was 75.

Agency, defined as Fannie Mae and Freddie Mac, conventional volume accounted for 62.1 percent of production, with a range of 40 percent to 95 percent; governmentinsured volume, which ranged from five percent to 50 percent, averaged 27.5 percent for the group as a whole. In Question 6, FHA volume, for the year, was reported up at 12 firms, down at 13 and unchanged at three others. Question 7 inquired about the percentage of their firm’s

nmp news flash

continued from page 16

Nela Richardson. “At Redfin, we see this as a sign of hope for a less divided country, where people with differing views gain better understanding and tolerance of each other through sheer proximity.”

Senate Tax Bill Keeps Mortgage Interest Deduction Intact

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Senate Republicans released their version of the tax reform plan that differs from the House of Representatives’ proposal in regard to the controversial decision to cut the mortgage interest deduction.

The Senate plan would main deductions on interest for mortgage debt for up to $1 million. The House plan proposed slashing that cap to $500,000, which created a major rebuke from housing and mortgage industry groups.

However, the Senate plan mirrors its House counterpart by eliminating federal deductions for state and local taxes. This also raised a hue and cry from housing and mortgage groups, as well as objections from some legislators in states with high property taxes.

Among the more contentious non-housing elements, the Senate plan would delay the proposed reduction in the corporate tax rate from 35 percent to 20 percent until 2019, whereas the House version seeks to put this in effect in 2018. The Senate plan maintains the current seven individual income tax brackets, whereas the House plan seeks to shrink that number to three brackets. Both plans aim to nearly double the standard deduction to $12,000 for individuals and $24,000 for married couples. And the Senate plan maintains the estate tax while doubling its exemptions, but the House plan repeals the estate tax after six years.

The House Ways and Means Committee voted to advance its tax bill, and House Majority Leader Rep. Kevin McCarthy (R-CA) is seeking a full House would vote on its bill.

Fewer Vacant Properties Recorded in Q3

Nearly 1.4 million residential properties were vacant as of the end of the third quarter, according to new statistics from ATTOM Data Solutions. This represents 1.58 percent of all residential properties, a slight decline from the 1.63 percent level recorded in the third quarter of 2016.

Nonetheless, the number of vacant “zombie” pre-foreclosure properties—which have started the foreclosure process but have not yet been repossessed by the foreclosing lender—fell by 22 percent from a year ago to 14,312 as of the end of the third quarter. The number of vacant bank-owned properties decreased 48 percent from a year ago to 24,026 as of the end of Q3 2017.

However, vacant property rates increased from a year ago in 81 of the 149 metro areas analyzed by ATTOM. This includes major markets such as Chicago, New York, St. Louis, Baltimore and Phoenix.

“Zombie foreclosures have dwindled dramatically over the last four years as a supply-starved housing has soaked up even some of the most highly distressed properties,” said Daren Blomquist, Senior Vice President at ATTOM Data Solutions. “There are still pockets of the country with high zombie foreclosure rates, and high vacant property rates in general, primarily in the Rust Belt and parts of the Northeast and Southeast— driven in large part by a high share of non-owner occupied vacant properties in those areas.”

Your turn National Mortgage Professional Magazine invites you to submit any information on regulatory changes, legislative updates, human interest stories or any other newsworthy items pertaining to the mortgage industry to the attention of: NMP News Flash column Phone #: (516) 409-5555 E-mail: Newsroom@MortgageNewsNetwork.com

Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

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t year rcent us year.” .

“Whole-tail” Lending

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NOVEMBER 2017 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

By Andy W. Harris, CRMS

ver the last month or so, many in the industry saw the press releases and news that seems to be stirring things up from a new group called BRAWL (Brokers Rallying Against Whole-tail Lending). They refer to “Whole-tail” lenders as those that have a wholesale channel, but also have a large retail channel that goes after the brokers clients post-closing. Many have consumer-direct and retention groups as many servicers do, but they have had enough and wish to expose this behavior they consider unethical. I certainly have my opinions on this, but am very interested to see what others think.

Their Facebook Group Page defines the groups as follows: BRAWL (Brokers Rallying Against Whole-tail Lending) as a group of independent mortgage brokers dedicated to ending the practice of “whole-tailing”—retail lenders using their wholesale divisions to steal our hard-earned business. We believe that independent brokers are best for borrowers and that true wholesale lenders are the only choice for brokers. Tired of whole-tailers turning your clients into their leads? Join the fight today.

They have created a petition on Change.org which already has more than 640 signatures as of early November. I see this topic getting more and more heated, and lenders will need to determine their response for those in both channels. While there are several who have little to no retail influence, many wholesale lenders do certainly have a large retail influence. The concern is with making sure they are in the channel for the right reasons and not to simply gain future leads for their retail channel.

Again, share your thoughts!

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

O

confidential or your name and company can be referenced if you wish. You can also join the Facebook Group by searching for “OrigiNation.”

The views expressed in this article are those of the author alone and do not necessarily reflect the views or policies of the author’s employer or any organization with which the author may be affiliated.

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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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.

New American Funding Expands NorCal Footprint With New Sonoma County Branch, Also Opens New Silicon Valley Location

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New American Funding, a leader in the mortgage industry, has expanded its Northern California territory to include a brand new location in the Sonoma County market in the town of Santa Rosa, Calif.

“We do everything in-house and we deliver a clearly defined experience that takes the guesswork out of the loan process and provides our borrowers and Real Estate Agents with great clarity,” said Santa Rosa Branch Manager Scott Sheldon. “We make it all about the customer. As a result, people want to work with us because they know us and trust us.”

Sheldon will oversee the new branch while working one-on-one originating loans for clients and helping them make smart, prudent decisions. He’s a native of Santa Rosa and brings to the position more than 10 years of industry experience working in the local market. He’s also a highly soughtout mortgage expert and avid blogger, with weekly consumer articles featured in online publications including Yahoo!, AOL Real Estate, and Fox Business.

New American Funding has also announced the expansion of its Northern California region to include a retail branch in the heart of Silicon Valley, a 4,000-square foot contemporary office space in downtown San Jose on the top floor of a 16-story high-rise. Chris MacNaughton, who has been with the company since September of 2016 covering Northern California

as Vice President of Builder and Business Development, will lead the new location as Branch Manager.

“We’re excited for the opening of our new branch. It’s a perfect location and prime opportunity,” said MacNaughton. “The housing market is thriving in Silicon Valley and we’re centrally located to meet the need.”

MacNaughton has grown the company’s presence in the market to include about 10 new home communities where New American Funding is the lender of choice. In the coming year, the Northern California builder team is expected to fund $250 million in loan volume.

Loan Protector Insurance Services Partners With Servicers Compliance Group

Servicers Compliance Group (SCG), an affiliate of Lenders Compliance Group (LCG), has been retained by Loan Protector Insurance Services to enhance its compliance and risk management guidance, with an emphasis on Loan Protector’s distinctive suite of insurance services.

Loan Protector’s Lender Placed & REO Insurance Programs provide comprehensive hazard, flood and liability coverage to ensure that its customers’ portfolios are protected from uninsured loss. Because Loan Protector works directly with mortgage servicers, the Cleveland, Ohio firm has made significant investments into their tracking

technology and key staff members over the last 36 months. This partnership helps strengthen their commitment to managing risk and compliance for their clients.

“With all the changes that have occurred in the mortgage industry in recent years, and especially in mortgage servicing, we are excited to be retaining the foremost compliance administration firm in the country,” said Dennis Swit, Loan Protector’s CEO. “Servicers Compliance Group will enhance our already strong and dedicated compliance department. For us, a commitment to regulatory compliance is central to our mission. SCG truly understands mortgage servicing compliance and, for us specifically, is an expert in the compliance associated with the actual, critical nexus between servicing and insurance monitoring.”

SCG offers compliance solutions for those who seek value, but refuse to compromise on the quality of their compliance programs.

“Loan Protector is a premier provider of lender placed insurance and insurance tracking solutions in the country,” said Jonathan Foxx, Chairman of Lenders Compliance Group and Managing Director of Servicers Compliance Group. “What we found so impressive is that after all the investments they have made into their operations and technology; they still recognized the critical importance of a strong risk and compliance focus. This partnership should show their clients and the industry that Loan Protector does not take this lightly

and is willing to make the time and financial commitment to always put compliance first. We are pleased to have been selected by Loan Protector to offer our regulatory compliance support for their diverse products and services.”

Freddie Mac Posts Q3 Profits

Freddie Mac ended the third quarter with $4.7 billion in net income, a substantial upswing from the $1.7 billion reported in the second quarter. This was attributed to a $2.9 billion after-tax benefit from “mortgage-related securities litigation settlement and continued strong underlying business fundamentals.”

The government-sponsored enterprise (GSE) also reported third quarter comprehensive income of $4.7 billion, more than double the $2 billion level for the second quarter. Freddie Mac’s non-interest income in the third quarter was $5.47 billion, a strong spike from the $777 million recorded one year earlier.

“We clearly had a strong quarter,” said Donald H. Layton, Freddie Mac’s Chief Executive Officer. “Even excluding the large legal settlement, Freddie Mac made a profit of $1.8 billion. This reflects the growing strength of our business model as well as an improving quality of execution.

And we’re doing this while increasingly protecting taxpayers through credit risk transfer, transacting greater volumes with more offerings than ever before.

We recently reached a milestone of $1 trillion of mortgages with significant credit risk transferred.

“This performance is evidence of good progress toward our goal to be one of the best-run financial institutions in the country, while successfully delivering on our public policy mission.”

Gateway Mortgage Group Partners With Texas Veterans Land Board

HomeBridge Financial Services has been named the nation’s leading renovation mortgage lender, according to the U.S.

Presidentially declared disaster area. These loans feature 100 percent financing and can be used by qualified borrowers for the purchase or reconstruction of a home if the borrower’s residence was either destroyed or damaged to such an extent that reconstruction or replacement is necessary.

“HomeBridge’s vision is to be the most recommended mortgage lender in the country, and that can only be achieved by offering our customers the best possible loans tailored for their individual continued on page 45

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Contact Ron Vaimberg, nmpU Executive Director & Head Coach directly at 888-979-6678 Ext. 801 or email at RonV@MortgageNewsNetwork.com for more information and pricing.

n National Mortgage Professional Magazine n NOVEMBER 2017

HUD Recognizes HomeBridge Financial as Top Renovation Lender

said Steven Marshall, HomeBridge’s National Director of Renovation Lending. “While some lenders steer away from renovation loans because they can be more complicated to close, HomeBridge is dedicated at every level to helping borrowers and our professional colleagues navigate the process for the benefit of the entire housing industry.”

In the wake of the recent hurricanes and tropical storms to affect the country, HomeBridge is offering the 203(h) loan program to borrowers whose primary residence is located in a

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Gateway Mortgage Group has partnered with the Texas Veterans Land Board as the administrator over loan originations in the Veterans Housing Assistance Program (VHAP). Texas VLB loans are available to Texas residents who served in any branch of the U.S. Armed Forces or National Guard on active or reserve duty.

This program is designed to assist eligible veterans in purchasing a home by offering a low-interest rate loan and reduced downpayment requirements on houses located within the state of Texas. Disabled veterans and surviving spouses may also qualify for a further interest rate reduction of 50 basis points, or one half of one percent of the available Texas VLB Rate.

“As Gateway continues to expand, it is imperative that we maintain focus on our core values of strengthening communities through homeownership,” said Jared Edmonds, Vice President of National Correspondent Production for Gateway Mortgage Group. “We believe that this partnership with the Texas Veterans Land Board not only falls in line with our core values, but allows us the opportunity to serve our veterans who have served our country.”

Gateway’s Correspondent Lending Division, an arm of one of the largest privately held mortgage companies in the country, offers an array of programs, competitive pricing and a unique alternative to the correspondent channel for both financial institutions as well as independent mortgage companies.

Department of Housing & Urban Development (HUD) year-end 203(k) Endorsement Summary. In its report, HUD stated that HomeBridge’s retail platform and two wholesale divisions, HomeBridge Wholesale and REMN Wholesale, combined for 1,083 endorsements in 2017, 217 more endorsements than the second highest lender.

“While it’s a great achievement for HomeBridge to be listed as the top-producing 203(k) lender in HUD’s report, our goal is not just to be the biggest, but also to be the most customer-friendly renovation lender in the country,”

How D Your W ootball, beautiful leaves changing, baseball, pumpkins, basketball, the fall weather … what else could you be thinking of? What else could you want to do? Where else could you be? And why would you want to think of anything else?

The fall is my favorite time of the year. Even here in Florida, it’s 65 degrees out and all of our friends are thinking of the ensuing holiday season. Festivals, family gatherings, shopping … my goodness, my head is already spinning.

Then along comes The Grinch, the guy who wants to ask you to put those thoughts aside and think about what you do for a living, which, by the way, is not what you think. Just as an aside, most of you think you’re in the mortgage business, but I have a surprise for you. Look, I love to train, coach, advise, cajole, encourage, boost and inspire people, However, those things are just the result of what I really do.

They are the consequence of hours of calling, writing, texting, video-taping, thinking, and re-thinking what I MUST do in order to do what I love to do.

Do you remember when you started in “the business?” I do. I still remember Bill Schor telling me that it would take me two years before I would earn enough money to be able to buy a new car and take my family on a vacation. Then and only then could I take the occasional week away.

But if I worked really hard, and devoted my time and effort to developing my referral sources, then I should be able to have an assistant who could cover for me while I went away and tried to relax.

This message is meant for the new people, the ones who want to help people

F

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The

Mortgage

Godfather

Do You Spend Weekends?

BY RALPH LOVUOLO SR.

card says just what I asked him to put on his card. In fact, this week he sent me a flyer, the same one he sent to his entire database that said, “I’m working when you’re working.”

If you are new to the sales part of the mortgage industry, you need to be available to your referral sources. It is that way and that way alone that you will get your phone to ring, beep, buzz or play some silly song.

So, here is a re-statement of a couple of convergent ideas:

Ask me for my “Wish List.” It will explain, in detail, the words you want to use. It has a complete script I have used for years. John Hukill and I worked

want that, just ask as well.

Now let me address those of you who think all of this is hogwash, etc. How was the football game? How many deals did you write this month? If you didn’t write at least three, then I know you watched the game.

Call me … I want to know.

Ralph LoVuolo Sr. has nearly 60 years history in the mortgage business. He was a Co-Founder/President of the NYAMB and a long-term member of the Board of Directors of NAMB. Presently, Ralph is Director of Sales Coaching for Lenders Compliance Group. He may be reached by phone at (917) 576-1230 or e-mail RLoVuolo@gmail.com.

43 NA ATTIONAL REV E RSE E MOR TGA G E LEN DE R S ASSOCIAT ION

Save the Dates NRMLA 2018 Wes e tern Regiona al Meeting March 19-20, 19 20, 20 018 Paséa Hotel & Spa Huntington Beach, CA

Reverse Mortg gage Education W Week April 23-27, 2018 8

NRMLA 2018 Eastern Regional Meeting May 21-22, 2018 8 InterContinental Ne ew Yo ork T imes Square New York o

For o mor o e infor o matio a on, o , visit NRMLAonline.org

n National Mortgage Professional Magazine n NOVEMBER 2017

1. Find at least 15 real estate people who actually do business. They are the ones you will want to stay in touch with. How do you find them? Ask around. Look to see who is spending money on advertisements, and stay away from the ones who want you to pay for their Zillow leads.

2. Be sure they know that you’ll do things for them that other LOs won’t. You’ll continue ring them great ideas to help them grow their business.

3. See them regularly. If you don’t see them weekly, shame on you. You can argue with me all you want on this subject, but if you’re using one of the more successful people in your office as a role model, you’ll find out that they saw their best sources on a regular schedule 4. Offer to do their flyers.

5. Offer to sit in their open houses to do pre-quals if you’re needed.

6. Distribute flyers in the neighborhood where the open house is. Include a specific invitation to come to the open house and look around.

7. Don’t show up at an open house if you’ve not been invited. Pretty selfexplanatory!

it up back in 1980 when he was starting on his own. We were great friends and he wanted to collaborate with me to develop a program that would intrigue Realtors. I also have a questionnaire you might want that will be a great way to put you in the power chair. If you

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finance a home and know little about what it takes to be successful.

Somewhere in my archives is a paper I wrote that asks the question: “What is the best day of the week to work?” With no prompting, I am asking you to think of the answer to this question: “What day of the week is the best day for Realtors to show houses?” or “What day do Realtors have open houses?” If you have any knowledge of the business, you know it’s Saturday and Sunday … and most of the time it’s a Sunday.

There is no let up for the first two years, but if you are young enough and have enough stamina, you’re a seven-day machine. I often hear about coaches who tell their clients to be calling all of their real estate contacts on a Monday morning and ask them how their weekend showings went. I ask a different question. Why would you do that. You should already know.

Follow me down this path a little …

You should have a list of people (in this market, Realtors) who actually do business. You cannot do business with people who don’t do business. You can’t be calling people on a Monday and asking them how their weekend was. Because in most cases, the successful ones were working, showing, marketing and meeting prospects. The ones you’re calling who didn’t do any of those things are wasting your time and time is your most valuable commodity. If you are any good, you know who the ones are who had an open house, had showings, interviews and met with prospects. How did you find out? You were in their office during the week asking them about whether or not they needed you to be at their open house on the weekend, needed you to meet and pre-qual any prospects or be available to explain the intricate details of an adjustable-rate mortgage (ARM).

I have a former client whose

The Long & Short of Short Sales Ways to Help Those Coming Out of Negative Equity Loans

BY PAM MARRON

efore the housing bust, it was commonplace to see hybrid mortgage blends where first and second mortgages were coupled together for 90 percent to 100 percent combined loan-to-value (CLTV) financing. These combinations, done to alleviate private mortgage insurance (PMI) or to make portfolio first mortgages attractive, often had interest-only home equity lines of credit (HELOCs) attached.

A reset to the full principal and interest payment on these HELOCs occurs on the five-, seven- or 10-year anniversary. On that anniversary date, the existing balance of the HELOC is commonly amortized over the remaining term of the loan. As an example, if the HELOC was a 15year term with a 10-year reset, the remaining balance at the end of the 10 years is amortized at the fully-indexed rate over the remaining five years. A good number of these HELOCs are now resetting, with an increase in the HELOC payment seen as high as 424 percent! Many consumers are caught off guard for two reasons:

in HELOC paperwork that these consumers have available that could alert them to the reset over a shortened period of term.

2. When the consumer attempts to refinance a positive equity portfolio (non-Fannie Mae, nonFreddie Mac) conventional first mortgage that is combined with a HELOC (or even a second mortgage) above the Fannie Mae and Freddie Mac 80 percent maximum cash out CLTV1 or 95 percent no-cash out CLTV2, the HELOC or secondary financing must be paid down to the maximum CLTV of 80 percent or 95 percent, whichever applies.

This is different than the Fannie Mae DU Refi Plus3 and the Freddie Mac Relief Refinance,4 known as the Home Affordable Refinance Program (HARP), which both allow a refinance of a Fannie Mae or Freddie Mac first mortgage to include secondary financing with no maximum combined loan-tovalue, even when negative equity still exists.

Additionally, Fannie Mae has guides on Unacceptable Subordinate Financing Terms5 that disallows subordinate financing with negative equity. (There is no clause like this in Freddie Mac.)6 Very important … check your borrower’s home equity documents for a home equity addendum that will either:

1. Many are unaware this is how interest-only loans reset, or that a reset date is approaching. Little detail exists

1. Not state anything about negative equity; or 2. May have a clause similar to this: Negative Amortization

Refinancing a portfolio conventional first mortgage can still be a problem when secondary financing exists, especially if the second is a HELOC that allows negative equity

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B

where under some circumstances, your payment will not cover the finance charges (interest) that accrue and “negative amortization” will occur. Negative amortization will increase the amount that you owe us and reduce the equity in your home.

If a clause similar to number two above is present, you will need to find a replacement second mortgage or HELOC for the existing HELOC. However, there are no secondary mortgage products available if the combined LTV of the first and second mortgage exceeds 90 percent!

Lenders can opt to extend the HELOC term, allow a modification with proof of hardship and mortgage delinquency first, or balloon the HELOC. In a recent case, the lender was aware of the client’s hardship and did not require the mortgage delinquency first, but this had to be negotiated for the modification.

In my most recent case, the first mortgage was refinanced into a Fannie Mae conventional loan to replace the existing portfolio conventional first mortgage. But

when it was learned that a negative amortization clause was on the HELOC addendum, a replacement HELOC without negative equity noted was required to cover most of the existing HELOC and a loan against the consumers 401(k) covered what was needed to pay down the HELOC balance to 90 percent CLTV. Many interest-only HELOCs are resetting now. Please make sure that you retrieve the HELOC note, addendum and subordination agreement from your borrower and read it thoroughly before you originate a refinance.

Stay tuned …

Footnotes 1—Eighty percent maximum CLTV for Fannie Mae/Freddie Mac when the first and HELOC were not closed on the same date.

2—Ninety-five percent maximum CLTV for Fannie Mae/Freddie Mac when the first and HELOC were closed the same date.

3—Fannie Mae Eligibility Matrix: 07/25/17, DU Refi Plus, page 8.

4—Freddie Mac Relief Refinance Mortgages, Open Access, Sept. 2017.

5—Fannie Mae Unacceptable Subordinate Financing Terms: 10/31/17.

6—Freddie Mac/Chapter 4204.1: Secondary Financing and Other Financing Arrangements, Mortgages With Secondary Financing(c) 03/02/16.

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 PMarron@InnovativeMortgage.onmicrosoft.com or visit HousingCrisisStories.com, CloseWithPam.com or 8Problems.com.

heard on the street

situations,â&#x20AC;? said Rick Floyd, Partner and Executive Vice President at HomeBridge. â&#x20AC;&#x153;HUDâ&#x20AC;&#x2122;s ranking is just the most recent example of how dedicated our associates are, at every level, to providing our customers and industry colleagues with the highest level of customer service possible.â&#x20AC;?

Title Source and Quicken Loans Partner With Pavaso on eClosing Services

Title Source has partnered with eClosing platform company Pavaso to simplify the mortgage closing process for homebuyers across the country. Quicken Loans, Title Sourceâ&#x20AC;&#x2122;s sister company, introduced Rocket Mortgage, allowing the company to digitally originate mortgages online. â&#x20AC;&#x153;Our goal is to provide a closing experience that is fast and easy, both for the closing agent and the client they are helping,â&#x20AC;? said Title Source Chief Operating Officer

continued from page 41

Brian Hughes. â&#x20AC;&#x153;Rather than dealing with a mountain of paperwork, a digital closing allows clients to scroll through every page of their closing package, eSigning each document as needed. Better yet, this technology can be easily scaled so clients across all 50 states are able to use it.â&#x20AC;?

Through the partnership with Pavaso, Title Source will be able to offer secure and efficient eClosing solutions to its clients.

This technology enables Title Sourceâ&#x20AC;&#x2122;s closing agents to utilize mobile tablets in place of the often 100 pages of paper clients would usually sign. Additionally, the Pavaso platform meets all relevant digital process standards, and provides industry-leading security to every single stakeholder in the process. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve always believed that Pavaso is the key to a fully digital closing, as it is the only provider to have mastered the complexity of lender and title agent relationships across all 50 states,â&#x20AC;? said Pavaso Chief Executive Officer Mark McElroy. â&#x20AC;&#x153;While so many companies are focused on

eClosing loans in one or two states, Title Source and Quicken Loans are focused on building systems that will scale and allow closings nationwide. It is for reasons like this that we are proud to partner with the industryâ&#x20AC;&#x2122;s most innovative mortgage lender, and honored that Title Source and Quicken Loans have decided to work with Pavaso.â&#x20AC;?

Jay Farner, Quicken Loans CEO, said, â&#x20AC;&#x153;Quicken Loansâ&#x20AC;&#x2122; number one priority is simplifying the mortgage process for our clients. Rocket Mortgage made our industry stand up and take notice, and our company continues taking the lead in revolutionizing the mortgage experience with eClosing. We look forward to working with Title Source and Pavaso to provide a radically simple mortgage experience.â&#x20AC;?

Vantage Production and LendingQB Announce Integration

Vantage Production LLC has announced that its VIP solution will be integrated with the

LendingQB loan origination software (LOS). â&#x20AC;&#x153;The Vantage Production and LendingQB integration will enable us to automate common tasks, allowing shared clients to immediately reap many of the core benefits of our two products,â&#x20AC;? said Todd Ballenger, Executive Vice President of Vantage Production. â&#x20AC;&#x153;This integration will provide seamless interaction with either platform thus increasing the efficiency and productivity of end users.â&#x20AC;?

Tim Nguyen, President of LendingQB, said, â&#x20AC;&#x153;Building longlasting, profitable relationships with clients and partners is critical for mortgage lenders, especially in a purchase market. The integration of Vantage Production with LendingQB will enable lenders to leverage their sales and marketing automation solutions to a greater degree. Using our OpenAPI framework, we will provide Vantage Production with the access and integration tools necessary to close the gap between sales and mortgage operations staff. Vantage Production will be a great addition to our best-of-breed partnership team.â&#x20AC;? continued on page 82

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Selling Is Being an Interruption o matter how you slice it, when it comes to selling, you are an interruption. No one is ever waiting for you in their office for you to call or stop by. They are not sitting at their desk saying, “Gee … I wish another loan officer would call on me today.”

We often hear that call reluctance is caused by the fear of rejection. As true as that may be, one of the other major reasons for call reluctance is the fear of interfering in someone’s day. As I said in the first paragraph, no one is waiting for your solicitation call.

In fact, they are likely hoping it never comes!

Since almost everyone in the mortgage business hates receiving sales calls, it is natural for many of

N

us to be reluctant to make calls.

We do not want to be that person who the call recipient hates, the same way we hate the people that call on us.

We all know intellectually that selling is the key to success for any business. Whether it is a car dealership, insurance company, bank, or any other business … unless someone is purchasing their products or services, the company will cease to exist. As a mortgage professional, if people do not elect to do business with you and purchase your mortgage services by applying for, and closing a mortgage loan, you too will cease to exist in this business.

Many loan officers are able to barely survive in the business because they have just enough business that comes to them from referrals, that they don’t need to

solicit others to engage in business with them. Simply stated, they don’t have to be an interruption.

Please understand, when I referenced the word “survive,” what I mean is the LO has barely enough money to pay their bills. To be honest, there are some in this business who make more than the bare minimum to survive, even without systematically marketing and promoting themselves to create new referral partner relationships.

However, to be a high producer, the only way to make this happen is to consistently interrupt people.

That means you must make the phone calls, you must market yourself in other ways such as email, direct mail and via social media in order to get noticed by those who seek not to be interrupted.

Think of it this way … what is a commercial on TV? It is nothing more than an interruption to the program you are watching. You may not like commercials, you may even change the channel, but one thing is for sure, the commercial is an interruption. As much as you may dislike commercials, the bottom line is they work. Do you think Progressive Insurance would keep advertising on TV if the advertising didn’t work? Not a chance.

Eliminating your fear of being an interruption is key to your success.

Of course, knowing what to say, how to get the attention of prospective referral partners, and having a system for maintaining the relationship are all critical keys to success. However, you can have the greatest loans, the best processing, and an incredible

advantage. The reality is that we are all in the mortgage business.

We all have similar products to offer, yet some loan officers do so much more business than others.

The secret is to be relentless in reaching out and not fearing rejection or objections.

Remember my point about commercials? Think of it this way … when you change the channel, that is nothing more than you saying you are not interested in what the commercial has to say.

The only difference is that the TV and the commercial don’t have any association to rejection. There is no fear or pain.

Major advertisers know in advance of any marketing plan the estimated number of how many people will turn the channel or ignore their commercial. However, they still continue to advertise.

They do this because they know there are a certain number of people who will watch and respond.

there were approximately 300 in attendance. The host speaker was asked, “How do you fill a room with 300 people?” The speaker’s response blew me away. He simply stated, “I have no idea how to get 300 people in a room.

However, I do know 10 ways to get 30 people to attend.”

I will never forget, I sat back in my chair and realized that this applies to everything originators do in marketing. If someone does not respond to phone calls, try email. If that does not work, try direct mail. The bottom line is you must keep interrupting them.

If you interrupt enough people, you will get some to listen. When you truly work on making your presentation as impactful as possible by knowing what to say and how to say it, you too will become less of an interruption, and more of an asset to those who choose to listen.

Ron Vaimberg is President and Head Coach for nmpU, a division of National Mortgage Professional Magazine. Ron is a leading Trainer and Coach to wholesale and retail mortgage professionals and the Creator of ForAEsOnly.com. Ron can be reached by phone at (888) 979-6678 (nmpu), ext. 801 or by e-mail at RonV@NMPMediaCorp.com.

n National Mortgage Professional Magazine n NOVEMBER 2017

support system for your referral partners and clients. However, no one knows who you are, then your great systems don’t matter.

I am often asked what can be done to overcome the fear of rejection or of being an annoyance to potential prospects. The answer is simply that you must know exactly how to get the attention of your intended targets, and then master how to effectively present your unique position as a mortgage professional. But rest assured you will always be an interruption or an annoyance. The only difference is the more you do it, the more success you have, the less you will care. You will eventually realize that what you are offering is needed, and you will remain committed to making sure as many people as possible know about you.

Loan officers all too often believe that what they offer is not unique, so they don’t know how to present their competitive

By Ron Vaimberg

When you make the calls, send the e-mails, and market through direct mail, you can track your success and response rates. With this data, you can know best how to adjust your strategy and messaging to constantly improve your results.

You must be willing to be that interruption. You will never get enough traction in growing your business without being willing to just go for it.

Rejection doe s not hurt, unless you give it that power.

Being an interruption and receiving a rejection is nothing more than someone saying to you that you have not given them enough reason to listen. Just because the first time they may reject you, does not mean that rejection will continue.

One of the greatest gems in marketing I ever learned was when I attended a seminar where

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By Jonathan Foxx

Unfair Debt Collection Practices Question We were examined by our State Banking Department and they accused us of violations in the way we attempted to collect a debt. Our internal counsel seems to not have been aware of all the possible ways we could violate the collection of debt. This is very frustrating, as we try our best to avoid such accusations, especially since it can also affect our reputation. So, we ask, what are the prohibited practices associated with the collection of a debt?

Answer This an instance where comprehensive policies and procedures should be ratified prior to collection of debts. The Fair Debt Collection Practices Act (FDCPA) has had an “unfair practices” section promulgated since 1977. In my view, there really is no excuse for not knowing a section of the FDCPA that is 40-years-old.1 Let’s start with the basic rule that protects the consumer against unfair practices: A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.

The legal and regulatory risks to financial institutions involved in debt collecting are considerable. Courts have long placed extreme caution on handling interactions with consumers in connection with the collection of a debt. For instance, in Midland v Johnson, the court “recogniz[ed] the ‘abundant evidence of the use of abusive,

deceptive, and unfair debt collection practices [which] contribute to the number of personal bankruptcies.’”2 Another court specifically noted that the purpose of the FDCPA is “to eliminate abusive debt collection practices.”3 Here’s a broad, but viable working definition of “debt,” for the sake of identifying the basis of a policy document that accords with the FDCPA. Debt is “any obligation to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes.”4 The following conduct is a violation of the unfair practices section of the FDCPA: 1. The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.

2. The acceptance by a debt collector from any person of a check or other payment instrument postdated by more than five days unless such person is notified in writing of the debt collector’s intent to deposit such check or instrument not more than 10 nor less than three business days prior to such deposit.

3. The solicitation by a debt collector of any post- dated

4.

5.

6.

a.

b.

c.

7.

8.

check or other postdated payment instrument for the purpose of threatening or instituting criminal prosecution.

Depositing or threatening to deposit any postdated check or other postdated payment instrument prior to the date on such check or instrument.

Causing charges to be made to any person for communications by concealment of the true purpose of the communication.

Such charges include, but are not limited to, collect telephone calls and telegram fees.

Taking or threatening to take any non-judicial action to effect dispossession or disablement of property if: There is no present right to possession of the property claimed as collateral through an enforceable security interest; there is no present intention to take possession of the property; or the property is exempt by law from such dispossession or disablement.

Communicating with a consumer regarding a debt by postcard.

Using any language or symbol,

other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business.5 Obviously, non-abusive collection methods are means other than misrepresentation or other abusive debt collection practices that are available for the effective collection of debts. But it is critical to know those nonabusive collection methods!

Footnotes 1—15 USC § 1692f. Section effective upon the expiration of six months after Sept. 20, 1977, see section 819 of Pub. L. 90–321, as added by Pub. L. 95–109, set out as a note under section 1692 of this title.

2—Midland Funding LLC v. Johnson, No. 16-348, US, 5.15.17.

3—Hoo-Chong v. CitiMortgage Inc., 15CV-4051(JS)(AKT), EDNY 3.31.17.

4—Harper v. MFR’s Trust Co., Civil No. PJM 10-00593, D. MD. 2.285.11; also see In Re: Westberry, 215 F.3d 589, 6th Cir. 2000.

5—15 USC § 1692f.

Jonathan Foxx, Ph.D., MBA, is the 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. Information contained in this article is not intended to be and is not a source of legal advice. If you would like to contribute a question, please submit it to Compliance@LendersComplianceGroup.com.

Tony’s Corner

A Message From NAMMBA Founder & CEO J. Tony Thompson III, CMB

NAMMBA: Building Bridges, Connecting Women and Minorities in the Mortgage Space hen I began my career in mortgage lending 15 years ago, I noticed there were very few people who looked like me.

I was flanked on all sides by professionals who knew the mortgage industry inside and out, but none of whom understood the challenges I faced as a minority working in this business.

Now, here we are in 2017, and I haven’t detected much change.

Women and minorities are still underrepresented in lending. Csuites are still mostly comprised of white men. Lenders parachute into communities of color without understanding the needs of the consumers whose attention and business they’re desperate to attract.

That’s problematic considering our industry is on the cusp of a seismic shift. The makeup of homeownership is rapidly evolving, just like the racial landscape of the country.

The U.S. Census Bureau estimates that, by 2044, the nation’s minorities will become the majority, and rise to 56 percent of the total population versus 38 percent in 2014. Although the homeownership rate among African-Americans and Hispanics is falling, according to the Pew Research Center, these minority populations continue to grow.

Asians and mixed-race individuals are two of the fastestgrowing segments of the country’s population, both growing by three percent from 2015 to 2016, according to the U.S. Census Bureau. Over the same year, the Hispanic population grew by two percent and the Black population grew by 1.2 percent—all this while the non-Hispanic White population grew by just 5,000 people.

W

Obviously, the tide is turning, creating opportunities for lenders eager to tap into these demographics and meet their housing needs. But that’s not what I see happening … I still see an industry that doesn’t adequately reflect its customer base.

And what of women? A 2016 study from the Urban Institute’s Housing Finance Policy Center shows that women are better at maintaining good credit scores and paying their mortgages than men.

Yet, across the financial services sector, only two percent of CEOs were women and just over 28 percent of women were executive or senior-level managers, according to Mortgage Women Magazine. In 2014, nearly 13,000 women worked as mortgage or non-mortgage loan brokers compared to about 10,000 men. Of those, 556 men were senior-level executives compared to 199 women who held those same roles.

These glaring disparities are exactly why I started NAMMBA, the National Association of Minority Mortgage Bankers of America, in 2015.

At NAMMBA, we aim to offer training, education and professional development opportunities to women and minorities in the mortgage industry so they can grow their business.

We want to establish a network where people find camaraderie among like-minded professionals who understand where they are and want to help them get ahead.

We strive to give mortgage professionals the chance to connect with minority and female peer mentors who can help them navigate some of the difficulties they face in the workplace.

These are the kinds of relationships I lacked when I got my start in the industry. Maybe if I was exposed to more diversity in the industry, I would’ve had a

listening ear when I was turned down for that promotion and never told why, or when that opportunity was given to a less-qualified colleague when I had the acumen to get the job done.

Since there were few minorities in the industry when I started as a loan originator and slowly worked my way up to regional manager for a national bank, I had no one to turn to when I encountered unique challenges because of my ethnicity.

NAMMBA can give professionals a listening ear and empathetic voice. But understand this, NAMMBA isn’t exclusive to minorities and women. We want to reach all mortgage professionals and build bridges where none before existed.

Our annual Connect event is one way we accomplish this. Each year, we host a conference to bring together the best and brightest in the mortgage space.

The two-day gathering in Atlanta helps mortgage bankers of all types learn from some of the best and leverage networking opportunities to take their business to the next level.

NAMMBA’s upcoming conference next April features a who’s who of mortgage industry innovators, including Nima Ghamsari, Founder and CEO of Blend; and Lisa Skeete Tatum, Founder of LandIt, a tech platform that helps women navigate their career paths.

Both are prime examples of the shift that’s happening in the

lending space: It’s no longer an industry run by White men for White men.

Earlier this year, the Consumer Financial Protection Bureau (CFPB) released a report examining why diversity in the mortgage industry is paramount for companies hoping to remain relevant. In part, it said that diversity creates space for perspectives that challenge “groupthink” among people with similar backgrounds. It helps companies tap into new market segments and develop innovative financial products that meet the needs of customers across multiple demographics.

And more diversity, at the executive and operations levels, lessens the chance a mortgage company or its employees will make tone-deaf statements that offend members of certain communities. It also ensures that people in communities of color are treated with the same amount of respect and deference as their White counterparts.

It’s imperative that mortgage companies understand the value of a workforce that celebrates and champions diversity and inclusion.

NAMMBA wants to ensure that minorities and women are connected to the industry, not alienated from it. We’re always on the hunt for partners willing to help us execute this charge.

Will you stand beside us as advocates for diversity and gender equality in the workplace? Will you support the push for more diversity in mortgage lending?

J. Tony Thompson III, CMB is the Founder and Chief Executive Officer of the National Association of Minority Mortgage Bankers of America (NAMMBA), an organization dedicated to increasing the engagement of women and minorities with the Mortgage Bankers Association at the local, state and national level. As the Founder/CEO of NAMMBA, Tony’s vision is to create a platform where women and minorities can connect, grow and become leaders in the mortgage industry while providing a platform to recruit and train the next generation of mortgage professionals. He may be reached by e-mail at Tony.Thompson@NAMMBA.org.

51

Compliance and Learning: What Can Be Done With an Ounce of Prevention?

By Joy K. Gilpin

ompliance and learning go hand in hand. For example, my role at Indecomm | Mortgage-U is Vice President of Mortgage Learning + Compliance. I love that expression–using the “plus” versus the “and.” It reminds me that compliance is increased (good old addition) with learning. It is a facet of the business that can be challenging for a variety of reasons. Compliance is a cost in the loan lifecycle and so is learning (addition by subtraction) and as a result, they are often the things that are cut or minimized in pursuit of a stronger financial performance. While on the surface that may appear effective, there are unintended impacts of these business choices. Now, as a provider of learning content, it is in my better interest for industry decision makers to dedicate budgetary dollars on compliance education. But what is the right type of learning? It’s a compelling question, and one I am spending more time on these days as my team works to build out and enhance our Compliance Management System (CMS) for Indecomm’s U.S. mortgage teams.

I could go on for days about the challenges and intricacies of a proper CMS, but a critical component of a CMS is how an entity not only establishes its compliance responsibilities, but how they communicate those responsibilities to employees. There are a few ways to communicate compliance responsibilities. I am of the opinion that it requires well-documented policies, procedures and education.

Each is component is key. And at a time where we are all doing more with less, it can often become more about checking the boxes around course completion so that we can show our work to folks like our board of directors, regulators, auditors, examiners, agencies, etc.

But what if we took a moment to consider what an investment in quality content, both from an education and policy perspective, could mean for our business? So often, I hear compliance professionals challenged by the fact that there is little to no investment from their organizations in resources. Technology at times, but more bodies, more oversight, or more scrutiny, is almost always dismissed as being “too expensive” or “too time consuming.” In truth, it likely is. Good compliance is like good insurance … it isn’t the cheapest, but when you need it, you’re glad you have the protection.

From my perspective, the amount of time and energy an organization expends trying to fix compliance risks and problems is far greater than implementing an investment from the start. What’s that old adage again? Oh yes … Benjamin Franklin tried to EDUCATE the good people of Philadelphia back in 1736 that “An ounce of prevention is worth a pound of cure.” Many of us leverage this very philosophy in our compliance organizations today, and yet, it is still a challenge to secure sound investments in prevention. It makes sense, right? The cost per loan continues to increase in many ways as a result of the heavier regulatory burden we all carry. So, when your facet of the business is viewed as “part of the problem,” it can be difficult to secure further investments in compliance resources. That’s where data comes into play. Having resources that drive data can help convert compliance initiatives into tangible figures for executive leadership (and stakeholders) to invest in. For example, if your team of QC auditors is exposed to limited training and updates to their review requirements are addressed in an ad hoc manner, there is a cost to the effort required to stay sharp and results-driven. If the results suffer as a byproduct of informal practice, then defects become harder to identify, and more importantly, correct because the source of data corruption is difficult to pinpoint.

In compliance and risk, we are working to eliminate single points of failure. In this example, having multiple points of impact or failure are just as challenging and certainly cost-prohibitive. It requires an examination of QC review standards, measurement, training, policy, procedure and tangible risk that often translates into salability issues post-closing. The level of participation and engagement from leaders across multiple divisions is far greater when the protocol is to address incorrect or inaccurate practices than the initial investment of education and compliance resources to set the proper course to begin with.

So, what’s the answer? Is there an answer? The answer certainly isn’t simple, but it starts with an integrated and preventative approach to compliance that starts with learning. Keeping in mind that learning isn’t isolated to training. There are many ways in which our teams assimilate learning. It comes through practice, through policy, through collaboration, and problem solving. It surely aligns with a strategic learning plan that supports both compliance and risk mitigation along with the business goals of quality loan transactions that follow processes, eliminating redundancies and improves efficiency.

It comes back around to good old Ben Franklin, and his guidance around prevention.

Making sound investments to mitigate compliance risk through a strong training plan

C

continued on page 54

a special focus on COMPLIANCE TODAY a special focus on COMPLIANCE TODAY a special

compliance and learning

early and often. That may look different depending on the size and scale of your organization and the diversity of your product offerings. That being said, here are some of my best practices around establishing an integrated compliance and learning plan: Onboarding and ongoing or annual requirements l Think about what is called for in your policy content in terms of new hire and ongoing education. l Remember that there are different expectations for folks in senior leadership and/or board members that need to be spelled out.

Policy content should influence several facets of business l Strong policy content supports business on multiple fronts.

scale for your business is critical

continued from page 53

l Policy influences learning in addition to establishing requirements around learning in general. l Policy influences process and workflow.

Design learning around persona or role within the business l Historically, content has been topic-driven. l Learners are more likely to retain information when it is presented in a manner that they experience day-to-day.

Donâ&#x20AC;&#x2122;t have a full team of instructional designers or trainers at the ready? l Leverage partners in the industry to round out learning needs. l Remember that partnering with solution providers isnâ&#x20AC;&#x2122;t an â&#x20AC;&#x153;all or nothingâ&#x20AC;? proposition. l There are many ways to create a cohesive solutionâ&#x20AC;&#x201C;the key is having a strategic plan and calling that plan into action.

Like so many facets of lending and compliance, the creation of

Connect with partners or build a team in-house to support learning efforts l The requirements of a CMS dictate tangible reporting in order to demonstrate how you effectively establish and communicate compliance responsibilities to employees. l Having an established method of an appropriate size and

Joy K. Gilpin is Vice President, Mortgage Learning and Compliance at Indecomm Global Services. With nearly 20 years of professional expertise in the lending space, Joy provides great insight and understanding of the challenges lenders face today. She can be reached by e-mail at Joy.Gilpin@Indecomm.net.

NOVEMBER 2017 n National Mortgage Professional Magazine n

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a sound learning plan is more than a project with a beginning, middle and end. It is a significant endeavor that impacts every facet of your business and requires ongoing support and evaluation to remain effective. As in so many instances in lending, and in life, an ounce of prevention will serve you very well. This is not the type of work that happens quickly. Waiting until the examiners are coming, or until there are financial implications associated with poor practices is not going to be cost or resource effective in the long run.

If you donâ&#x20AC;&#x2122;t believe me, just ask Ben [Franklin that is]!

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Call Ron Vaimberg, nmpU President & Head Coach, at 888-979-NMPU (6678), Ext. 801 or E-mail RonV@MortgageNewsNetwork.com for more information on how nmpU can increase Originator, AE and Manager Performance!

a special focus on COMPLIANCE TODAY a special focus on COMPLIANCE TODAY a special

Honing in on HMDA Preparing for the new HMDA rule doesn’t have to be rocket science n an industry as fluid and evolving as mortgage lending, only one thing is certain: Change is always on the horizon. Whether it be taking on new loan programs or adapting to updated industry regulations, mortgage lenders must always be ready for the latest industry trends.

Two years ago, the “Know Before You Owe” Rule (formerly known as TRID) caused a great deal of clamor in the mortgage industry, as many lenders scrambled to prepare their loan originators and operations staff for the upcoming regulatory changes.

While some were ready and others were not, there’s no doubt that “Know Before You Owe” was an opportunity for many lenders to determine the best way to train loan originators for changes that would have a significant impact on their day-to-day responsibilities.

Although it may not be causing as much hubbub as “Know Before You Owe,” the upcoming adjustments to the Home Mortgage Disclosure Act (HMDA) are another significant industry change that mortgage lenders and loan originators must become familiar with–if they want to start 2018 on a well-informed and successful note.

According to the Mortgage Bankers Association (MBA), the number of reportable fields (e.g. loan number, borrower’s race, ethnicity, and sex, loan amount, census tract and action taken) is expanding to 48. Also, of the 23 current fields, 20 are being modified.

Lenders must begin reporting many of these new fields for applications with an action taken date on or after Jan. 1, 2018. While, historically, the regulation has been adjusted annually for minor reasons, the upcoming change is arguably the most significant one since HMDA’s inception.

To shed some light on this topic, I want to address some of the common questions that may arise for loan originators

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and other mortgage industry professionals, as they learn more about the new HMDA Rule.

l l l l

Which changes will be implemented under the new HMDA rule?

The CFPB published the 2015 HMDA Rule establishing new

Which loans will this impact?

Covered institutions will be required to report the new data

Lender credits Loan term Prepayment penalty Identification of other loan features

“… the upcoming adjustments to the Home Mortgage Disclosure Act (HMDA) are another significant industry change that mortgage lenders and loan originators must become familiar with–if they want to start 2018 on a well-informed and successful note.” data points to be reported and other previously reported data expanded. The final rule adds new data points for: l Age l Credit score l Automated underwriting information l Debt-to-income ratio l Unique loan identifier l Property value l Application channel l Points and fees l Borrower-paid origination charges l Discount points

on previously reportable loans, as well as reporting application activity for open-end and reverse mortgage loans.

What prompted these changes?

The Dodd-Frank Wall Street Reform and Consumer Protection Act transferred rulemaking authority to the Consumer Financial Protection Bureau (CFPB) for HMDA in 2011. It also amended HMDA to report new data points and authorized the bureau to

By Chris Hatton

require financial institutions to collect, record, and report additional information. The CFPB issued the 2015 HMDA final rule to incorporate these changes.

The HMDA requirements serve three primary purposes: l To help determine whether financial institutions are serving their communities’ housing needs l To assist public officials in distributing public investment to attract private investment l To assist in identifying potential discriminatory lending patterns and enforcing anti-discrimination statutes How will this impact loan originators?

Most of the required information under the new rule is already being collected, but is not currently reported on the lender’s Loan Application Register (LAR). With the additional information available to regulators through annual reporting–and to a lesser extent, the general public–data integrity becomes more vital than ever. Overall, mortgage lenders must ensure that data in the loan file supports the decision rendered, because–to a regulator–data errors may signal a deficient Compliance Management System (CMS).

For loan originators, the biggest change will be the collection of disaggregated race and ethnicity designations.

What do loan originators need to know about the disaggregated race and ethnicity designations?

A borrower will now have the ability to self-identify not only with a racial category (such as Asian, African-American, Native Hawaiian, etc.) but a subcategory as well. For instance, a borrower who would have previously selected “Asian” may now further identify as Japanese, Chinese, or Korean.

In addition, they may write in a designation of their own. Loan

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originators should familiarize themselves with the information that may be provided and how to best manage the collection of this required data.

When in doubt, how can loan originators and mortgage lenders ensure that the reportable fields are being correctly completed?

Early in the year, loan originators may want to use a pre-written script, as they become acclimated to collecting the new demographic information. Lenders should also prepare their staff for the upcoming changes by training the sales staff–in particular–and providing information and tools to ensure that the information is collected completely and accurately.

handle the changes will be in a much better place, come January.

Chris Hatton is the Compliance Manager for Waterstone Mortgage, based in Pewaukee, Wis. He may be reached by e-mail at CHatton@WaterstoneMortgage.com.

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Understanding the bottom line As with any industry regulatory

provided the necessary resources for their employees to successfully

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How does this change affect mortgage lenders and loan originators on a larger scale?

Lenders will now be reporting much more loan level data, which will give regulators (and to a lesser extent, community action groups) a much larger window in which to peer into mortgage lending activity.

Regulators have long used HMDA data for fair lending analysis of a company’s mortgage lending practices and patterns. Community groups and other members of the public have also used publiclyavailable HMDA data to perform their own analysis of lending patterns and practices.

With the new data, they will have more data to use when deriving conclusions that may or may not be entirely accurate–or may be only a small glimpse of the full story of a lender’s business before stepping foot in a lender’s offices.

The loan originator’s unique NMLS identifier will also be included in the data, which allows for analysis of an individual’s lending patterns. As a result, the new level of collected data may cause loan originators to stand out statistically from their peers, which is another red flag for regulators.

change, it’s important for loan professionals to familiarize themselves with the new regulations before they become effective.

With the implementation of the new HMDA Rule, lenders who violate fair lending laws and regulations will quickly find themselves in a sticky situation. On the other hand, those who have adequately prepared for the change, educated their staff, and

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Half Way Gone: Rogue Marketing a Major Risk for Lenders By Brent Emler & Ken Perry arketing compliance rules in our industry are notoriously tough to get right, and getting it wrong can have serious consequences for both the loan officer and the lender. Given this tough regulatory atmosphere, it surprised me to learn that it could be as much as half of all mortgage marketing material has not been reviewed by anyone at the company it belongs to. That’s a huge risk!

We surveyed 10 mortgaage marketers. The consensus among them was that around 50 percent of mortgage marketing is not reviewed for compliance … or for brand adherence, content, grammar or any other reason for that matter.

That’s millions of mortgage marketing impressions every year that don’t get reviewed by the organizations they represent.

Think about this for a minute: Lenders, who are on the hook for the marketing loan officers do, are not reviewing their own loan officer’s marketing materials. Content with the company name on it goes out the door with no one checking whether it violates any laws or adheres to brand standards.

Lenders are at risk of being fined millions of dollars, yet a lot of the time they’re crossing their fingers and hoping. How did it get this way?

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This rogue marketing is done by loan officers doing their best to meet expectations. Top producing loan officers are an entity unto themselves. How could they not be?

They are responsible for selfsourcing their business, which means their personal brand is everything. After all, they’re entrepreneurs, right? They call their own shots. It’s up to them to identify Realtor partners, find new customers, nurture existing relationships, and market their brand and unique selling proposition.

A loan officer’s ability to connect with people on a personal level is why they can make a million dollars a year. Lenders think, “We can’t tie their hands and require them to market within the rigid lines of the compliant marketing box, right?”

So, they look away. They cross their fingers and hope.

In a recent interview with Dave Savage from Mortgage Coach, Garth Graham from Stratmor stated more than 54 percent of mortgage lenders still do not have a system in place to manage customer communications. It’s 2017 and we still have large lenders, with widely distributed sales forces, who don’t have a tool in place to manage marketing content. They’re not even trying to control their marketing content. Or, they have a tiny, understaffed marketing department

that can’t possibly keep up with the daily demands of a hungry sales force, and the compliance team can’t keep up either.

It’s an unholy trinity of demand.

Sales people demand effective, unique messaging that can be sent “right now.” Marketing wants brand consistency, well-formed communications and specific calls to action. Compliance wants boxes checked, disclaimers added and the minutiae covered.

It’s an impossible situation to manage without a system. A customer relationship and marketing platform, on its own, will not magically solve the marketing compliance issues lenders face, and they do face some real challenges when it comes to getting LOs to take marketing compliance seriously.

For one, loan officers look down the street and see other LOs doing things their compliance teams won’t let them do. So, they roll the dice.

Technically, they’re liable too, but the risk/reward math is easy.

Sometimes the challenge is internal. Marketing approval processes, guidelines and turn times are not clear to the loan officers, or are inconsistent. It’s hard to abide by company marketing standards when the rules are not communicated or the process doesn’t work.

These challenges often prompt

loan officers to send marketing materials out without approval. Loan officers’ marketing errors can land a lender in hot water, but lenders are giving them practically no choice when they make it hard to comply.

Here are just a few recent errors or omissions we have seen on marketing material sent by rogue loan officers: l No NMLS number (individual and/or branch) l No physical address on an e-mail l Opt-out mismanagement l Improperly-sized logos, including the Equal Housing Lender logo l Trigger terms (e.g., a 30-year fixed must be disclaimed) Any one of these could put a lender in a bad spot and these types of violations happen frequently. That leaves us with one question: What can lenders do to bridge the gaps between sales, marketing, and compliance to make mortgage marketing work?

I talked to The Knowledge Coop’s Ken Perry about it. Since 2003, he has trained people throughout mortgage organizations large and small on compliance, including marketing compliance. He is in the unique position of working directly with loan officers, marketers and compliance teams, which allows him to hear all the stakeholders’ perspectives. Here’s what Ken has to say: When I got into the mortgage industry as a loan originator years ago, I understood immediately the way things work around here: Salespeople drive income and operations people try to keep them from burning the company down.

The relationship between compliance and loan originators in many companies has become like a parent and child relationship–an overprotective, overreactive parent and a rebellious, trouble-seeking teenager to be more precise. So how do we fix problem marketing in the face of this dynamic? Three things: Training, Monitoring and Consequences.

First, lead with training. I talked to a marketing compliance professional who was so frustrated by her “idiot loan officers” (her words, not mine).

She was telling me how none of them do it right and all she does every day is say “no” and send the marketing pieces back to the LOs. I asked her, “Have you told them what right looks like?” She seemed confused. I told her that it seems odd that she spends all day telling people when they do it wrong, but gave zero

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they violate policies and laws, and that the company will follow through, regardless of the LO’s production.

Done right, a marketing compliance system makes your compliance and marketing people a resource who loan officers rely on to help them grow their businesses the right way. They don’t have to be the “Fun Police.” The best thing you can do to grow your marketing presence without adding risk is to incorporate training, monitoring, and corrective action into your marketing system.

The choice is yours: invest in marketing compliance now or take a

chance and pay the fines (or even go out of business) later.

Brent Emler is Director of Sales and Marketing at Velma.com, a customizable marketing software provider exclusive to the mortgage industry. With a background in business finance, Brent has a unique understanding of the modern lending climate and keeps his finger firmly on the pulse of leading trends. Since diving into the industry in 1998, Ken Perry has been a relentless innovator in the mortgage and real estate world. His company was one of the nation’s first training companies to be approved by the Nationwide Mortgage Licensing System (NMLS) to provide pre-licensing and continuing education for originators.

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thought to teaching them how to do it right.

This industry would benefit immensely from clear, simple training that encourages originators to do marketing right and explains clearly what that looks like. Think about all the time wasted saying “no,” or “that’s wrong.” She’d recoup two hours of her day just by training better.

Second, monitor originators. If you don’t know what they are doing, how can you make sure they are doing it right? You can use a third-party for some monitoring, especially social media. For instance, Optimal Blue just released some slick social media monitoring software that could play a part in your compliance monitoring.

You can’t stop there though. Every now and then just Google a loan originator’s cellphone number or email. The results will show anywhere they are advertising online. You will find some crazy things so be prepared.

Not monitoring is not an option.

It’s like me telling my daughter I demand that she cleans her room, but then never checking to see if it is clean. I guarantee you it would never be clean!

Third, define consequences. The CFPB is adamant about this one.

They want all companies to hold their originators responsible for marketing violations. Think about parenting again. If I give my kids boundaries, and they break them without consequence, I can’t expect them to learn or change their behavior.

Teaching LOs what is and isn’t okay must be backed up by a corrective action policy. And you must enforce it.

I worked at a company where they were having trouble with employees forwarding inappropriate chain emails (remember those?). We had a policy, but no related corrective action. We trained them on the policy, but the e-mails continued to flow. We monitored their activity, so we saw how bad the problem was, but that only made us complicit as the e-mails continued because we knew it was happening but did nothing to stop it.

Finally, we rolled out a new zerotolerance corrective-action policy. We told everybody that if they sent out even one inappropriate e-mail or went to one inappropriate Web site, they would be fired. And we did. We fired one of our top producing loan officers. That was the last e-mail we dealt with. People learned that we were serious.

I am not saying you should have zero tolerance for marketing mistakes, but I am saying that people need to know what happens when

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The Lord Is My Compliance Officer

By Eric “NOT related to Harvey” Weinstein

he word “Compliance” literally means “To act in accordance with a wish or command.”

And I mean, no matter how stupid or lame that command might be. That is the prime reason why I never joined the military.

What if the captain was just a real moron and told you to check for snipers by talking a stroll naked in no man’s land? You would have to do it, right? Moron.

I can remember being 17-yearsold in Hollywood, Fla., working at a Steak and Ale as a dishwasher. I got off at 1:00 a.m. and there were no cars on the road. There was this idiotic red light on Hollywood Boulevard where it took forever to change. Here I am sitting at the light with no cars around for miles and thinking how dumb is that?

So, carefully, one night, I looked around and went through the light.

Of course, there was a cop hiding in the bushes and he stopped me.

“Look,” I tried to explain, “There is no one around. This is so stupid.”

But he was nice and he took the time to explain it to me, advice I will never forget. “We live in a society with rules, which means you have entered into a social contract to obey those rules in order to reap the benefits of being in that society. You are free to leave society and live on a deserted island and then you don’t have to obey those rules. But if you want to be around other people, you have to conform to those rules.”

Compliance, regulations, laws, even what you can and cannot wear at a closing are all the rules we have to obey in society in order to reap the benefits of our industry.

No matter how ignorant, redundant, ill-conceived or useless they may be!

From a religious standpoint, I submit to you Matthew 22:21, “Render unto Caesar the things that are Caesar’s, and unto the Lord the things that are the Lord’s.” Even the church is telling us to obey society as long as it does not contradict moral code.

Very few mortgage regulations contradict my religious beliefs, so I guess I have to do them. The Lord is my Compliance Officer!

I remember that every time I

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“Compliance, regulations, laws, even what you can and cannot wear at a closing are all the rules we have to obey in society in order to reap the benefits of our industry. No matter how ignorant, redundant, ill-conceived or useless they may be!”

explain the Equal Credit Opportunity Act (ECOA) disclosure to a guy I have refinanced 20 times already and obviously am not discriminating against. Or better yet, the Patriot Act form explaining that we are “Allowed to verify” all the information they are giving us to “Fight terrorism.” Really??!? As if the government wouldn’t just do it anyway whether the borrower was aware of it or not. What’s that form all about? Morons.

There are tons of forms, rules, procedures and guidelines we have to follow in the mortgage game. I call it the “Least common denominator theory.” If one person sued a lender over something once a long time ago, now there is a disclosure form we have to get signed about it. I love the one where it explains to the borrower that if they don’t pay, the bank gets to report them to the credit bureau. D’uh. I once had someone sue me because they “didn’t know the loan was an adjustable” even though they signed like a million forms at closing explaining how it worked and it was in BIG, BOLD

16-point font on the top of the form “ADJUSTIBLE RATE MORTGAGE.” Moron.

Are we that lame as a nation that we have to dumb it down for everyone because there are a few morons out there? I guess so.

The same goes for evil, greedy people. All these laws we have now are because some mortgage broker or bank was ripping their customers off royally. I would venture to guess that the vast majority of loan officers are not evil, greedy people (I could be wrong), yet now we all have to walk the line of the wicked just to be on the safe side. In this day and age, are there really loan officers refusing to do a loan and make money off of someone because of

their race, religion or ethnic origin? I find that hard to believe. Maybe one Klansman in Indiana, I guess, but a whole industry has to get a form signed just because if him? Morons.

Growing up in the 1970s, I was one of those long haired, freaky people yearning for the 60s in my conformity to be a non-conformist.

It was all about me, with my “Question Authority” bumper sticker and my “Sticking it to the MAN!” attitude. My father used to tell me, “To get along, you have to go along.” I never really understood at the time. Then I had kids. Now I get it. Go with the flow, man. It is so much easier. But do the kids of today get it? No, everyone is looking for a quick buck and an easier process. Morons.

Eric “NOT related to Harvey” Weinstein worked in banking, on the commercial real estate side until 1991, when he fell in love with residential lending. In 1995, he started a small mortgage company in his basement called Carteret Mortgage Corporation, which in 2003, grew to one of the largest mortgage broker companies in the United States. Eric is semi-retired, doing mortgages by referral only. He may be reached by phone at (703) 5058692 or e-mail EWeinstein4U@gmail.com.

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Seven Tips to Get the Most Out of Your Compliance Buck By Johnna Leeds e all know the lending industry is highly regulated and compliance takes considerable resources. These costs put a strain on lender profits, and can be frustrating and seem unreasonable.

And they keep increasing.

The Mortgage Bankers Association (MBA) reported in its Annual Mortgage Bankers Performance Report, production expenses reached a study-high, at $7,209 per loan. This is up from $7,046 in 2015, and $6,769 in 2014. A good portion of these costs are compliance-focused processes that are now required by regulation standards.

Consider this …

The stakes are too high for lenders to risk their compliance to save a few bucks. The key is balancing compliance costs

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against other expenses, and becoming more efficient in overall processes. Proactively taking steps to meet lending compliance standards is smart business, even if it costs a bit more in the short run. Smart lenders must create a strategy for dealing with rising compliance costs without harming their profitability.

Here are seven tips lenders should use to get the most out of their compliance buck.

1. Accept that compliance costs are here to stay Wishing that we’d wake up one morning and not need to deal with compliance costs is a pipe dream. As irritating and neverending as they seem to be, the lending environment is such that compliance is a top, serious priority. Lenders who stick their heads in the sand and ignore compliance are opening themselves up to serious issues.

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is to stay educated on the laws and regulations, and proactively adapt processes to secure compliance.

Smart lenders with their eyes on long-range success will reach for out-of-the-box solutions that minimize the impact of compliance costs on the bottom line.

2. Understand these costs are better than the alternative Lenders may consider compliance costs a nuisance, but they are infinitely better than the costs of non-compliance. For example, The CFPB can impose civil money penalties of $5,000 per day per violation for noncompliance, $25,000 per day for reckless violations and $1 million per day for knowing violations. And this is only one of many regulatory bodies. Yikes!

In addition, data breaches from failing to comply with required identity protection standards open lenders up to costly, embarrassing lawsuits that can take years, if ever, to recover.

3. Implement compliance into your budget A recent survey found that 45 percent of community banks indicate compliance costs are five to 10 percent of total operating costs and 33 percent of banks estimate compliance costs are between 11 and 20 percent of total operating costs.

These costs represent large amounts of money, and can eat into a lending institution’s profit.

Budgeting for compliance is no longer optional. From new compliance staff to additional software to handle compliance to vendor fees, lending compliance needs to be a line on your annual budget. Planning for the financial outlay ahead of time takes a bit of the sting out of required compliance costs.

4. Work with vendor partners who value compliance Fortunately, there are several new products on the market that offer a comprehensive solution for third-party vendor management. These solutions

will help you maintain compliance in an efficient and cost-effective way. When looking for any new solution, try to look for the most all-inclusive and comprehensive. And most importantly, make sure it aids in compliance with all industry regulators and lenders.

By effectively blending inhouse expertise and qualified third-party vendors working together to quickly complete tasks that used to be laborintensive, we can ensure new regulations do what they’re supposed to–protect consumers and lenders from mortgage defaults–without breaking the bank. Vendor management is more important now than ever, and vet your vendors by: l Asking in-depth questions about their processes; l Asking how they help you maintain compliance; and l Requesting documentation on their internal compliance policy.

Choose vendors that stay abreast of industry regulations, and help keep you up-to-date on current policies and procedures.

Vendors that invest in welltrained staff, practice stringent due diligence, and implement internal processes to proactively assist in lender compliance are the ones to select for your vendor partners. Talk to your current vendors about compliance, and make certain they can specifically explain how they are helping you maintain compliance within your organization.

5. Evaluate and implement technology With costs steadily increasing for lenders, and greater partnering with vendors, the challenge is to figure out how to meet compliance requirements in the most cost-effective, least laborintensive manner possible. The answer heard more and more often is technology.

Technology is changing the mortgage industry. TRID, of course, is one of the most recent compliance challenges that technology is addressing. One law, Dodd-Frank, created a “cascade” of changes that, by our count, has affected 23

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different federal lending laws and regulations.

With all the new requirements, regulations, verifications and more, utilizing technology is the best way to overcome the costs of compliance. Because the reality is that, when it comes to compliance, two choices apply: You pay for it now (by investing in technology) or pay more later (in loan buy backs, fines and consumer reimbursements).

If lenders are not equipped to handle new compliance processes, outsourcing to a vendor that specifically focuses on these areas will ensure compliance standards, updates and performance are adequate and accurate. Predatory lending and loan documentation are common compliance areas that are outsourced. Technology is key in stretching your compliance buck.

In addition to accepting and preparing for the additional cost of lending compliance, smart lenders need to drill down into the details, sharpen their pencils and…

compliance and maximizing the reach bucks you do spend. backs, fines and consumer reimbursements).”

Johnna Leeds is Vice President of Compliance for Data Facts Inc. A team member since 1996, Data Facts’ dedication and determination to provide the best possible information to our clients is what Johnna appreciates most.

Johnna is a member of the National Consumer Reporting Association (NCRA), participating on the Legal Committee and Legislative Committee.

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7. Keep on top of industry changes It’s less stressful to turn the radio up and ignore the sounds of upcoming industry changes, because dealing with them is a pain. However, not facing them head-on can end up costing your company in the long run. Get involved with your local mortgage trade association chapter and subscribe to industry blogs and newsletters.

Also, expect your vendors to share information with you to keep you in the loop. Being

workplace and valuable vendor partners. These all contribute to minimizing the bottom line costs of staying within lending industry

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6. Pursue efficient processes While lending compliance costs cannot be avoided, other costdecreasing measures can be taken to offset the drain the investment in compliance puts on resources. Conduct a thorough audit to identify waste and inefficiency. Are your people using touching documents three times when they could do it all with one touch? Are they as focused and productive as possible? How can your vendors help to increase efficiency? By upping your game with more efficient processes, increased compliance costs can be absorbed without cutting too much into profit.

proactive about compliance is a good best practice, and will help you plan your budget to meet upcoming expenditures.

While spending a bunch of money on compliance is nobody’s idea of fun, it’s a necessary step and a foundation of good business. Lenders who proactively understand and commit to these seven steps empower their budgets to be ready for compliance costs and provide a more efficient

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Compliance in Today’s Digital Lending World By Kelcey T. Brown or the past few years, lenders and their loan officers have been inundated with compliance.

There has been a flood of new rules and regulations, Consumer Financial Protection Bureau (CFPB) audits, enforcements and costly penalties levied against lenders for non-compliance. It has driven up the cost to originate and on top of that, as a loan officer, compliance has become an enormous distraction. Loan officers still must focus on attracting new borrowers and bringing in new business. That’s not to say compliance is not important, it absolutely is, there just needs to be a better balance and more efficient processes that helps loan officers lower the cost to originate and maintain compliance while attracting new borrowers.

One way that loan officers and mortgage companies can strike a better balance between compliance and growing their borrower base is through a digital mortgage.

It all begins when today’s tech savvy borrower starts searching the Web for a new home and mortgage. Lenders must deliver an online lending experience that potential borrowers rave about, therefore, loan officers must be equipped with an advanced digital mortgage platform that delivers powerful, yet easy-to-use digital tools to enhance the borrower experience.

As a loan officer, it starts with a smart digital point-ofsale application. Digitization streamlines the application process, decreases origination costs, increases loan officer productivity, and improves the borrower experience. As borrowers easily plug their information into the digital mortgage platform, the platform simultaneously verifies the borrower’s information, improving data integrity and

allows the loan officers to keep all parties, associated with the loan process up-todate with the status of the application. Parties included on this are the borrower, title company, co-borrower and realtor. l Integrations with mortgage critical third-party programs and well-documented application program interface (API), which allows for a variety of software components to interact effortlessly. This enviably simplifies and accelerates the borrower process and user experience.

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“He’s in compliance ... but don’t think he won’t bite.”

“One way that loan officers and mortgage companies can strike a better balance between compliance and growing their borrower base is through a digital mortgage. It all begins when today’s tech savvy borrower starts searching the Web for a new home and mortgage.”

enhancing compliance all while streamlining the origination process. This enables loan officers to spend less time verifying information and promotes a simpler and faster process for the borrower.

What should lenders and loan officers be looking for in a digital mortgage platform?

Today’s digital experience must provide borrowers with a compliant, aesthetically appealing, and user-friendly Web solution. With the right solution borrowers can immediately gain access to a network of mortgage and real estate professionals who can offer a dynamic online process.

The key aspects that make this experience possible include: l A digital graphical prequalification application and 1003 application that

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streamlines mortgage processes including both the point of sale stage and loan origination.

State-of-the-art technology that considerably reduces the application abandonment rate by catering to the borrowers needs and overall experience.

A tailorable online lending platform that allows lender the ability to easily configure the platform to their specific lending process.

A content management system that accomplishes compliance from the corporate level down. The system is controlled from one centralized location to eliminate reputational risk and any violations of compliance standards.

A customer portal, which

The mortgage industry’s strict compliance standards pose unique challenges that other industries lack when converting to digital. Therefore, working with a provider that has deep mortgage experience can be the difference between success and failure. Mortgage origination entails handling borrowers’ sensitive information. In addition to compliance, cyber security measures are vital. This includes applying a secure sockets layer to Web site domains, obtaining an SOC 2 audit, partnering with cloud providers and third-party vendors that share your same security standards.

Start with a SOC 2 report, an audit on a company’s nonfinancial reporting controls. Its five standard measurement criteria are security, privacy, availability, confidentiality, and processing integrity. Although standards can vary, all mortgage lenders alike must verify borrower information through third parties. Pooling and verifying such sensitive information requires strict security. Thus, Mortgage ThirdParties (MTPs) require enterprise-level solutions. In the past year, regulators pressed mortgage lenders and MTPs to acquire SOC 2’s due to updated rules and regulations for protecting a customer’s data. It also drove the creation of vendor management; an internet based application that acts as a mechanism for businesses to manage and obtain staffing services. Many companies are scrambling to complete a SOC 2 because of its intense

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learning, and algorithms, workflow automation can be configured to do exactly what the compliance requirements mandate.

Today’s digital mortgage automation can process information, verify it, aggregate it, calculate appropriate loan terms and assist loan officers with approval of applicants.

This digital mortgage automation also ensures secure transactions, protects borrower data and delivers timely updates to the borrower.

Lenders that have implemented state-of-the-art digital mortgage platforms for borrowers are seeing tremendous growth. Just think of some of the fastest-growing lenders in the country, and you’ll see they all share one thing: An up-to-the-minute online digital offering that compliantly makes the lending process fast and easy for their borrowers.

Industry leaders realize that to achieve digital mortgage success, it is crucial to automate the mortgage process while delivering a dynamic online lending experience. By implementing today’s most advanced digital platform, lenders will experience increasing market share, protect their corporate brand, meet strict compliance requirements and expand their digital footprint to attract more borrowers.

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Kelcey T. Brown is Executive Vice President and Chief Strategic Officer for WebMax LLC. Kelcey is responsible for developing, communicating, executing and sustaining strategic initiatives. He acts as a key advisor on critical changes in the competitive landscape, internal employee development and the external business environment, while also ensuring that appropriate metrics are in place to measure performance and progress towards strategic goals.

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criteria’s. However, it is crucial to proceed for numerous reasons. SOC 2’s verifies the security behind sensitive transactions—such as mortgage applications. A clean SOC 2 report establishes the underlying company as a trusted data host. As a result, customers can trust such companies with confidential information.

A Secure Sockets Layer (SSL) secures and privatizes data exchanged among a server and Web browser via an encrypted link. Determining if a domain is secure or not is as simple as scanning the first five letters of the URL. URLs lacking an SSL begin with “http;” URLs equipped with an SSL begin with “https.” If you don’t see the ‘s’, don’t use the site. You get the ‘s’ on your domain by obtaining an SSL Certificate. Through perusing SSL Certificates, opt for the Wildcard SSL Certificate. It may seem more expensive on its face, but it’s actually cheaper.

As regulations continue to roll out, compliance becomes more vital. Mortgage companies can enhance compliance efforts in a variety of different ways. Automation— which ensures compliance through dynamic business rules and workflows—offers a streamlined way to improve compliance results. Driven by artificial intelligence, machine

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Compliance and Communications in the Mortgage Industry By James V. Luisi ompliance requires conformity, submission or adaptation to a regulation, law or command. In many ways, compliance can be a cause of delay, cost and risk for mortgage originators, as well as confusion and frustration for borrowers.

To be effective at maintaining compliance, it is important to first understand why compliance exists. The reason we have compliance is not just to ensure that organizations or individuals meet their legal and regulatory obligations, but its primary objective is to protect the welfare of others.

To employ an analogy, it is like building a bicycle path through the woods, and then afterwards, adding the signage required to alert riders of the blind spots and dangerous turns as an afterthought. The irony is that many of those lastminute measures would not have been required at all if the path was constructed with compliance goals in mind from the onset.

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Dimensions of compliance In most industries, compliance affects people inside and outside your organization, including vendors and customers. Using our organization as an example, as a middleware provider of ancillary products—including title, appraisal, and verification of income and employment— we are responsible to ensure that we are compliant from various directions.

The goal is to secure the data from our chain of customers (e.g., our direct customers, such as banks, their customers, such as brokers and correspondents) with the various parties which have to share that data to complete the business process.

We must be compliant: l Internally in our handling of data; and l Externally with respect to our vendors to safeguard the

“I’ll be honest ... there are books by James Joyce that are easier to follow than these bad boys.”

“When developing marketing communications in the mortgage industry, maintaining a compliant operation is easy to achieve when one demonstrates integrity and common sense. Avoid making promises you cannot deliver, such as promising rates and terms that you cannot reasonably achieve.” compliance interests of our customers, as well as to ensure that services being ordered are being ordered to help, rather than harm the consumer, thereby safeguarding the compliance interests of our providers to guarantee that their services are not used for nonapproved purposes By far, the most challenging activity we have in our firm is to ensure that end users comply with these compliance interests of providers.

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l Compliance requirements In general, compliance requirements may be grouped into the following business categories:

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l l Credentials: DBA name, company contact, secure access credentials, for example l Legal identity: Legal name,

legal address, incorporation state, for example Principal owners: Seven years of address history Corporate owners: Legal name and address Qualifications and licenses: Industry, state and federal licenses, for example Financials: Financial audits Reputation: Litigation and regulatory citations, for example Policies and plans: Business and IT security, privacy, incident response and record retention policies Business continuity: Internal controls and disaster recovery plans Third-party policies: Thirdparty contractors and their locations Background checks: Independent company and ownership background checks The depth of information

involving these categories can range widely from around 100 points for a mid-sized lender, to well over 1,000 data points for a top five lender.

The price of non-compliance The price of non-compliance is the loss of trust in your organization. While the obvious example is that of Equifax failing to protect consumer information twice in 2017, disclosing that fact after executives could sell their shares of stock, any loss of trust is going to coincide with a decrease in business and a likely increase in penalties.

Staying on top of compliance Compliance is such a core component to the success of financial services organizations that three leaders are usually required for an organization: Chief Compliance Officer,

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Business Compliance Head, and an IT Compliance Head. All three leaders should actively participate in the architecture and design of the manual and automated procedures that comprise business operations, as well as the IT operations.

Compliance in mortgage industry marketing and communications Another area that must adhere to compliance regulations is the marketing, advertising and communications services used by mortgage lenders to attract and retain customers. The Consumer Financial Protection Bureau (CFPB) includes a module on advertising and marketing within its examination procedures for mortgage loan origination.

Here’s a list of communications practices to assist with maintaining compliance in marketing:

CFPB clamps down on misleading mortgage company advertisements Several years ago, mortgage companies were identified by the CFPB as using misleading advertising that targeted older Americans with reverse mortgages, and veterans with VA loans.

Here’s a list of common problems from the CFPB: l Potential distortion of government affiliation: The agency spotlighted advertisements for mortgage products containing seemingly official seals or logos, or other elements that could confuse consumers about a possible government affiliation. l Potentially misleading information about interest

rates: The CFPB said some companies advertised low interest rates that “may have misled consumers about the terms of the product actually offered.” Even now in 2017, misleading loan terms and rates is another common violation of mortgage marketing regulations and compliance standards. l Potentially deceptive continued on page 68

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n National Mortgage Professional Magazine n NOVEMBER 2017

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

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l NMLS numbers must be included in all advertisements for loan products, including digital communications such as your Web site or e-mails and in print ads. l Avoid misleading content that implies your organization is affiliated with or endorsed by the government. Don’t include government seals, the U.S. flag or claims of being a “government lender.” l Advertising no-fee loans but charging borrowers during the mortgage process is a violation of federal rules. l Be clear about fixed-rate loan versus an adjustablerate mortgage (ARM).

Although a loan product begins with a three-year fixed rate, it is not a fixed-rate loan if it’s an ARM with an introductory fixed rate. l To comply with the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act, all marketing and advertising must include these basic elements: 1. The full and legal name of the mortgage company 2. The NMLS ID of the company 3. Full, physical business address 4. The business phone number 5. The name of the originator as it appears on the NMLS Web site

6. The NMLS ID of the originator 7. The equal housing opportunity logo

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compliance and communications in the mortgage industry

statements about the costs of reverse mortgages: A major focus of the CFPB investigation was the advertisements for reverse mortgages, which often claimed that the borrower would have no payments.

These statements were made even though borrowers who use these products are “commonly required to continue to make monthly or other periodic tax or insurance payments, and may risk default if the payments aren’t made.” l Potential fabrication about the amount of cash or credit available: The CFPB also focused on mortgage advertisements that suggested the consumer had been pre-approved to receive a certain amount of money or contained a mock check. According to the agency, “additional steps

would customarily need to be completed before the consumer would qualify for the loan.”

When developing marketing communications in the mortgage industry, maintaining a compliant operation is easy to achieve when one demonstrates integrity and common sense. Avoid making promises you cannot deliver, such as promising rates and terms that you cannot reasonably achieve. By using simple, honest language that does not mislead borrowers with inflated offers, lenders can stay clear of compliance issues.

Fintech solutions supporting compliance Since the mortgage crisis that began in 2007, the mortgage industry has been under close regulatory scrutiny, and as a

continued from page 67

result has had to learn to adapt to this ever-changing regulatory environment.

The increase in fintech solutions for banks and financial institutions has elevated the importance of automation. Compliance is one critical area that benefits by evolving from a manual to an automated process. Currently, automation focuses on preventing errors rather than reducing friction and

operational delays. However, we are confident that compliance will be built into solutions from the beginning, as opposed to being an addon after the fact. With the right fintech solutions as a foundation, compliance can become a key element in maximizing communications and the mortgage lending process for greater partnerships with vendors, customers and regulators.

James V. Luisi is Chief Information Officer/Chief Technology Officer of KeyStoneB2B. He has more than 30 years of experience in business and IT focused on integrating diverse systems to best serve customers, shareholders, business and IT stakeholders. He may be reached by phone at (856) 282-1544 or e-mail James.Luisi@KeystoneB2B.us.

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How to Stay Ahead of Modern Regulatory Risk Compliance By Isaac Kohen ince the 2007 economic crisis, there has been an increase in regulation, most notably in the financial sector. Lawmakers make changes to policies regularly, and it can be very tough to keep up with, especially as a mortgage banker. Since 2007, the Dodd-Frank Act became a top priority for the financial sector. This compliance comes in addition to meeting requirements for the Bank Secrecy Act, anti-money laundering programs, and most importantly, cybersecurity.

Underlying many of the recent changes in policy is the way in which data is collected, maintained and reported on.

With data comes the need for cybersecurity, as the results of a data breach can be devastating for any organization. It is for this reason that when new compliance requirements are released, it is important to consider cybersecurity as an inherent risk if ignored during implementation.

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Data and today’s regulatory landscape With the rise of the Internet came a fundamental shift in how people have come to exchange data.

Consider how much slower it was when you had to record data via paper; however, the one thing not on the forefront of everyone’s mind was data security. Thanks to an ever-increasing reliance on technology, the landscape for financial compliance has been altered dramatically. In fact, the landscape now for policy now centers data at the core of nearly everything. This has resulted in an increased need for cybersecurity as a complement to fulfilling regulatory requirements.

Before information technology became so advanced, a Social Security Number was the fear everyone had leaking. However, now simple identifiers such as one’s birth date and address can provide a cyber attacker with enough information to ruin someone’s life. Considering the data mortgage bankers are required to collect, including

debt-to-income ratio, credit score and employment history, imagine what a cyber attacker could do if armed with such info on the black market. The most central risk to modern regulation is the handling of sensitive consumer data. Major institutions in both the public and private sectors have demonstrated that insider threats are the major security risk among firms today. Regulation going forward is likely to continue incorporating requirements to protect consumer data from both external and insider threats.

Consumers trust in banks to keep their data safe. This includes their sensitive data, which, if leaked, could mean absolute ruin for their lives and your reputation.

Between meeting compliance and deflecting cyberattacks externally and internally, the average mortgage banker is overwhelmed.

Any compliance expert today will need to understand not just the complexity of Dodd-Frank compliance, but also the cybersecurity that will be required to support the handling of such sensitive information.

Securely moving towards compliance Understanding the relationship between cybersecurity, compliance and a threatening cyber landscape will enhance your handling of sensitive data going forward. If the Equifax data breach proves anything, it is that absolutely no organization is safe from a data breach in their dayto-day operations. One of the first things mortgage professionals can do is integrate cybersecurity as part of risk management. Data is an asset that is at risk; however, the consequences are felt several times over should a breach occur. Below you will find a framework and insider threat mitigation strategies to help you approach cybersecurity in a structured and integrated manner.

NIST cybersecurity framework This tool was produced by the National Institute of Standards and Technology (NIST) and is free to access. NIST is a cybersecurity

“Cybersecurity is about loss prevention, thus cybersecurity provides savings and mitigates damage during an inevitable attack.”

framework that “focuses on using business drivers to guide cybersecurity activities and considering cybersecurity risks as part of the organization’s risk management processes” as stated in their guiding documentation. NIST can provide a structure for cybersecurity based around your processes for data collection, recording, reporting and disclosure. This framework can be intimidating at first, but it can be approached step-by-step. Additionally, if you have had any experience with Sarbanes-Oxley, you’ll find much familiarity here. The framework is intended to give cybersecurity in your organization structure, but also integrate into any processes and regulatory requirements that are in effect. Implementation will look different organization to organization. However, if you’re like many other mortgage bankers, then this framework should fit well with the compliance you’re seeking to meet. With a cybersecurity

framework in place, security practices are next.

Behavior benchmarking You’re likely familiar with the idea of benchmarking: You establish a baseline and measure deviations, either positive or negative, from that baseline. Now apply this idea to your network and each individual user in your organization and you have a repository of data that can be analyzed to detect insider threats. The analysis is now able to be automated as well, thanks to machine learning. This is commonly referred to as User Behavior Analytics (UBA). It is recommended that you use monitoring software capable of tracking both network and individual employee behavior to know your baseline. Your network already produces this information in the log data, so you might as well put it to productive use as a safeguard against malicious and negligent insiders. Behavioral analysis is not a new concept, but it is now able to be used by more

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organizations due to the reduced cost of analyzing log data for deviations of behavior.

Principle of least privilege The principle of least privilege is a well-known security principle, but unfortunately, not put into practice often enough. The principle of least privilege revolves around the idea that a user should only have the minimum amount of access to data to perform their job. This requires that you manage permissions beyond the default settings. The Department of Homeland Security’s Computer Emergency Readiness Team (CERT Division) recommends that privileged users are given two accounts, one that gives them the minimum amount of privileges to do their jobs, and another standard account for non-privileged duties. This practice may require a reevaluation of your processes in place, but as far as software goes, the network admin will have to work with human resources to establish roles and assign permissions to each role.

The associated costs and benefits of cybersecurity When evaluating the costs of cybersecurity, you may be looking at it as a traditional investment or even a liability.

However, what is important to stress is that return-oninvestment will not come in the form of increased revenue or profitability when investing in cybersecurity. With this standard form of measurement, cybersecurity will not appear worth investing in.

Cybersecurity is about loss prevention, thus cybersecurity provides savings and mitigates damage during an inevitable attack. Given that cyberattacks happen regularly to organizations throughout the year, it is good practice to take preventative steps to prevent easily avoidable data breaches.

As stated above, insider threats have become the most significant cyber threat and area of risk for an organization. Late last year, a report from The Ponemon Institute highlighted that the average cost of just one insider incident is

$206,000. Throughout the course of a year, the cost averaged out to be around $4.3 million per organization. For larger enterprises, this cost rises to $7.8 million per year. This is money being lost that is entirely possible to prevent if a cybersecurity framework is established and proper technological controls are in place when handling sensitive data.

The same report also highlights the cost and effectiveness of one of the solutions listed above, user behavior analytics, which normally can cost organizations around $3.2 million per year. This solution’s investment alone would provide an annual savings of $1.1 million. When combined with the free cybersecurity frameworks published by nonprofit organizations and the

government, even more savings can be realized year over year.

With data being one of the highest value and highest risk assets your organization owns, it is best to follow the motto: One safe dollar is worth more than a risky dollar. For each dollar spent in cybersecurity, you create safer conditions for data to be handled through your organization.

In the long run, you should be prepared to be ahead of regulation. If your firm is fortifying itself against insider threats, you will be ahead of regulatory standards and be able to report quickly and easily go through an audit process.

Regulatory standards are increasingly centered around data and cybersecurity. When you invest in cybersecurity, you reduce regulatory risk and ensure that you are ready for future compliance.

Isaac Kohen is the Founder and Chief Executive Officer of Teramind, an employee monitoring and insider threat prevention platform that detects, records and prevents malicious user behavior. He may be reached by e-mail at IKohen@Teramind.co.

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an in-depth understanding of home loan options, including low down payment options through our Affordable Mortgage Program, and specialty loans like Jumbos, loans to LLCs and Trusts (approved by Ridgewood Savings Bank), and non-warrantable condos.

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Terms and conditions subject to change without notice. Loans subject to credit approval.

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With over 30 years of professional experience each, our Account Executives know the local markets and pride themselves on friendly, responsive service. Plus, our team has

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The Forgotten and Best Pillar of Referrals

By Christopher J. Bettis, CMC, CRMS

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aren’t the best solution for their client, you will do what’s best for them, and still provide a solution.

It just so happens that the solution is someone else. But that’s okay. You may have lost a loan you couldn’t close anyway.

But you got right back a reverse mortgage they couldn’t do. Do you think this would set you apart with a Realtor? That you will do everything in your power to help that client. And that even if you aren’t the best fit, you are the expert in lending. You know the players and who can do what. They don’t need the name of every lender in town, because within the group of seven to 10 lenders, almost every transaction will be handled. I tell my Realtors to go and make more marketing calls. Go find more listings. More buyers. More business. Let me handle the lending thing and make those calls (really just one group e-mail blast). Talk about a win-win proposition. They find more business, you vie and get referrals to lenders, and you might even get another lead from

the Realtor who got to market more.

Here are the types of lenders in our Team Awesome: Depository, Correspondent, Broker, Manufactured Niche (preHUD and twice moved), Land, Construction, Seconds (simultaneous and investment property), Commercial, and Private Money.

Hopefully you hate “No” as much as I do. That you’ll turn “No”vember into “Yes”vember.

The next time instead of telling someone “No,” you’ll reach out to a brother in the industry. I challenge you to say “Yes” to unity, “Yes” to collaboration, and “Yes” to the forgotten and best pillar of referrals.

To you being even more successful and blessing others …

The views expressed in this article are those of the author alone and do not necessarily reflect the views or policies of the author’s employer or any organization with which the author may be affiliated.

Christopher J. Bettis, CMC, CRMS of Eugene, Ore.-based Precision Capital is a member of the NAMB Board of Directors. He may be reached by e-mail at Chris.Bettis@NAMB.org.

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easiest loans you will do.

Example, Brand X has a minimum five score of 620. At the final credit pull, the borrower’s credit dropped to 619 due to utilization. In this true example, said lender declines and this is a no for six months.

Instead of a no, the LO for Brand X cares about his borrower, Realtor and the other side of the transaction. Even though there is no financial gain, he/she still wants to help. The LO has developed relationships with other lenders. So instead of saying no, they call you. You have created a relationship. They like you, trust you and know you are a solution (you go down to 580). In addition to getting the lead, you are handed a complete loan file: All borrower info, prelim, appraisal … everything handed to you. All you have to do is finish it, get paid and be the hero. Everyone wins!

Second, through unity and collaboration, we keep each other better-informed. Even though I’m an avid reader, I still learn as much from my fellow bankers and brokers. From the latest regulatory changes to TRID, to the very practical ways to get more PIWs. I think we can all agree that the mortgage industry is constantly changing, and I don’t know everything.

“Iron sharpens iron.”

Finally, Realtors love this and it will set you apart: They know you aren’t a “No person.” If you

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he basics of Marketing 101 involved both working your sphere, and developing relationships and referral partners. We’re going to focus on step two, developing relationships and referral partners. The most common pillar (referral source) for Loan Originators are Realtors. Some other common referral sources for LOs include Financial Planners, CPAs, Attorneys and Insurance Agents. Again, sound sources of business. Humbly, I would argue that there remains a forgotten pillar of referrals, and that is a best pillar for a Mortgage Loan Officer … other MLOs. That wasn’t a typo or autocorrect error … I’m recommending reaching out to our brothers in the same profession/industry.

Now how and why would anyone want to intentionally create a relationship with an individual often dubbed “The Enemy?” Not only is that person at a different company, but also a different channel of lending. Let me share with you how I get the majority of my referrals from this very channel. Besides the obvious financial gain of more business, more money, here at the top three reasons I believe this is the best pillar for a relationship.

First of all, referrals from other lenders, in many cases, are the

ince 2009, I’ve been writing about an important industry topic where I predict the future of the residential mortgage market, primarily pertaining to the wholesale lending channel. I believe this is the most important message anyone can share in our industry, and I feel responsible to do so from what I know. As I’ve said before, when reading this, please keep an open mind and clear your head rather than quickly getting defensive if you are employed by one retail lender. Just think about competition a little harder using common sense. I believe everything I share here are facts supported by math and unwavering statistical data. This message simply needs to be heard by Mortgage Loan Originators who are influenced by the special interests of one retail lender.

So what is “The Mortgage Matrix?” In 2008, following the mortgage meltdown, retail and correspondent lenders (of all kinds) across the nation jumped on the opportunity to influence Independent Mortgage Loan Originators to feed their direct revenue streams. The goal was to build walls, influence by fear, and create a false reality that embraces originator ignorance to retain loan volume. This monopolizing behavior allowed lenders to more easily recruit and directly employ Mortgage Loan Originators in the retail space. If they did not succeed, they would have to continue to compete for business with less margin and control. When mortgage professionals lose their independence, it forces the consumer (their client) to be steered toward one lender which was the objective.

This simulated new of world of dependent originators with revolving resumes steering one lender is called “The Mortgage Matrix.” Retail lenders have invested millions to harvest and manipulate the minds of thousands of Mortgage Loan Originators across the country and they have ‘aggressively’ succeeded at our own fault.

What’s worse is that those inside The Matrix all believe their employers (at any given time) are superior, yet they are inside an inferior simulated bubble compared to real life independent origination. When you think you know something you do not know, it becomes a dangerous combination of ignorance and

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arrogance. This is a huge issue for our industry when good originators do not seek selfeducation. More importantly, it’s very bad for the consumers they are meant to serve.

People inside The Matrix understandably refuse to believe it exists. They jump from company to company, selling the message they are told to from the lender that influences them at the time.

Listen, there are some great companies that have good people and cultures. Don’t get me wrong as this is not to come across negative, but when originators steer a borrower and lender competition is absent, the ethical foundation is broken. They (again, many are good originators making bad decisions) are accountable.

The ‘best’ lender for each unique scenario can only be uncovered through competition and choice, without exception. Iron sharpens iron and the changes our industry faces are often and significant.

Steering is never an acceptable practice under the special interests and manipulation inside The Mortgage Matrix.

Retail origination is fictitious selling when wholesale origination is factual telling. Leave retail to the new, temporary or call center-type originators.

Independence is for the experienced, local, career-minded experts. There was a healthy time when Mortgage Loan Originators had control and independent origination dominated the market.

The good news is we see this behavior growing again in wholesale market share.

Mortgage Brokers are gaining in numbers, but we need a bigger movement to take back the unhealthy volume seen in the retail channel. We, as originators, shape the future. Residential mortgage lenders must earn our business by competition and execution, not manipulation and expectation.

Warning: Those who created The Mortgage Matrix and all the non-producing managers will do all in their power to keep you influenced and controlled by it. So, how does one know if they are inside The Mortgage Matrix? Here are a few signs you may not see: Inside the Mortgage Matrix (Dependent Mortgage Bankers) l Since 2008, you have several (retail/correspondent) mortgage employers on your resume. You have unknowingly embraced and sold all kinds of their senseless motivational drivel as if you’re a robot

they’ve created. l You are motivated by short-term dissolving incentives versus long-term prosperity, being stuck in an entry-level position (although you may not see it). l You actually believe you have more control over the mortgage process than Independent Mortgage Brokers, which is the opposite of reality. l You are influenced somewhat easily, without seeking exterior selfeducation and are informed only by your interior influences at any given time. l You’ve spent a lot of time on marketing your business and getting referrals which is great, but you have

By Andy spent little to no time in industryspecific knowledge and education relating to federal regulations, origination channel changes, and the significant changes from resources outside of your company. l Your employer controls your rate sheet. Retail and correspondent lenders significantly manipulate SRP (Service Release Premium), and you will never have clarity on margin. You steer your clients to these higher rates and fees as you repudiate facts through the inability to understand or compare. l You believe you have a really good team and customer service, but don’t realize that is the rule today, not the exception. All must be excellent, but your foundation is broken inside The Matrix and must be fixed. l You think you can still broker loans effectively. If you’re employed by the lender, you cannot with manipulation on margins and sending to odd program investors.

The Mortgage Matrix W. Harris, CRMS

l You are unable to comply with anti-steering or fair lending (in my opinion), as The Mortgage Matrix specifically forces violating both without independence. l You confuse marketing ‘experts’ as compliance experts, which they are not. l You have a sense of narcissism toward Mortgage Brokers due to your defensive nature of not understanding the channel today.

You are stuck with assuming it was the Mortgage Broker of the past, which it is not, or you have no experience at all with independent origination. l Your employer provides a nice office with bells and whistles.

Great meetings, motivational speakers and all kinds of perks.

These shiny objects are available as an independent as well, but they are provided by your employer to influence you away from outside resources. l You believe you can close your loans faster than Independent Mortgage Brokers and you believe your co-workers are

e

Outside the Mortgage Matrix (Independent Mortgage Brokers) l You embrace competition and put your clients before one lender, which gives you control. l You are aware the wholesale lending channel is the best it has been in history, with banks and non-banks performing at service and speed levels never seen before. l You have a consistent resume and foundation through lender choice. If you need to make a

The longer you wait to get selfeducated and embrace independence, the more power and resources you directly feed

may feel this way after stepping outside of The Matrix as I do, but when you open up that third eye you’ll be amazed by what you’ve been missing.

Muse-Uprising The paranoia is in bloom, the P-R Transmissions will resume They’ll try to push drugs That keep us all dumbed down and hope that We will never see the truth around (So come on) Another promise, another scene, Another package lie to keep us trapped in greed With all the green belts wrapped around our minds And endless red tape to keep the truth confined (So come on) They will not force us They will stop degrading us They will not control us We will be victorious (So come on) Interchanging mind control Come let the revolution take its toll if you could Flick a switch and open your third eye, you’d see that We should never be afraid to die (So come on) Rise up and take the power back, it’s time that The fat cats had a heart attack, you know that Their time is coming to an end We have to unify and watch our flag ascend (So come on) They will not force us They will stop degrading us They will not control us We will be victorious (So come on) The choice is yours. What will you do?

The views expressed in this article are those of the author alone and do not necessarily reflect the views or policies of the author’s employer or any organization with which the author may be affiliated.

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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What are the signs of those outside of The Mortgage Matrix?

This is the small, yet growing and thriving, independent sector of the primary mortgage market:

these retail and correspondent lenders to monopolize. In order to embrace independent origination and see what advantages it can provide you today, you must seek self-education and the truth.

Reach out to a reputable local Mortgage Broker in your community or understand what it takes to start your own independent practice if you feel that you are called to be a leader and business owner. Talk with wholesale lenders. Keep a close watch on the technology of the future. Margins will be restricted and the best position is to be nimble and have access to this technology and the best pricing under the independent wholesale origination channel.

Mortgage Brokers (Independent Originators embracing choice and competition) need to unite and educate those stuck in The Matrix.

We need to help them see what we see and expose retail and correspondent lenders for how they are taking advantage of the primary mortgage market. I call on others to feel this responsibility.

We need a healthy balance, and need to expose The Mortgage Matrix for what it is. Our industry can only be corrected by Mortgage Loan Originators changing how and where they send business, and enforcing competition. The consumers we serve will be much better for it.

The best of the best will rise to the top by earning and competing for the business. Independent Mortgage Originators must come together and focus on building and growing the wholesale lending channel.

I’ll leave you with this … there are great Mortgage Loan Originators stuck in The Mortgage Matrix. That is what frustrates me so much personally.

They don’t realize what they are doing not just to their clients, but to their careers. The band Muse released a single called “Uprising” in 2009 (amazing coincidence with the year it was released). When asked what it was about, lead singer Matt Bellamy explained: “I wanted to write a song that summed up that feeling like you’ve been done over by people you’re supposed to trust.” You

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more experienced (sorry, I threw up a little in my mouth when typing this). l You believe that you are a direct lender and sell this term, along with in-house underwriting as if they are accurate or a benefit in which they are not.

switch, you simply click a mouse versus changing your employer and sending the dreaded “I’ve Moved” (again) message to your database and referral partners. l You have access to marketleading technology, speed, software, pricing and processes quicker and easier through choice and competition. l You understand all channels are third-party to the agencies and investors that buy, insure or guarantee residential mortgage loans.

As a result, you don’t use or sell false titles, even if more direct to the agencies than selfproclaimed ‘direct’ lenders. l You understand wholesale offers the greatest benefit to your clients, with access to the most innovative programs and systems without overlays. l You have a macro view of the entire industry and not just one small micro view as those who are inside The Mortgage Matrix. l You understand and appreciate that the most experienced people in the industry (your team members in and outside of your company) are in the wholesale mortgage channel where The Matrix does not exist. l You have access to the lowest rates and fees possible in the country and embrace a universal pricing engine for comparison and choice. l You are not influenced by pressure from those inside of The Mortgage Matrix, even when nearly 90 percent of the industry is.

oreign nationals who purchase U.S. real estate have a reputation for paying cash, and there’s a good reason for that.

According to the National Association of Realtors (NAR), it’s the number one way for international buyers to acquire property in the United States.

What you might not know is that plenty of foreign buyers take out mortgages: 44 percent, compared to the 50 percent who are cash buyers.1 The international market represents a phenomenal opportunity for U.S.-based lenders and brokers. In 20152016, foreign buyers spent more than $102.6 billion on U.S. residential properties.2 They also tend to buy properties that cost more–usually around $227,380, compared to $223,058 for the median price of all U.S. existinghome sales.3 You can see why a growing number of brokers and lenders have expanded into this market.

Yes, there are some differences when dealing with

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international buyers. For real estate and lending professionals who have done business only with U.S.-based clients, there may be a fear factor. But these differences are surmountable, especially when you think about the opportunity of serving this active clientele.

Intrigued? Here’s a high-level overview of what’s involved in taking a loan application from a borrower who lives in another country.

Two types of international buyers First, we need to distinguish between the two types of foreign nationals who acquire properties in the United States.

The first is the foreign national who comes to the United States to work, usually under the EB-3 or L-1 visa program. These people have Social Security Numbers, credit histories and places of employment that a lender can verify. In a sense, they have all the criteria required of a regular borrower. The only difference? On their loan application, the boxes for “U.S.

Citizen” or “Permanent Resident” are marked “No.” When many lenders talk about foreign nationals, this is the borrower they’re thinking about.

But there’s another type, and that’s the group we’re going to focus on in this article. These are people who live and work in their native countries and have no Social Security Number. Their bank accounts are with foreign institutions, and their jobs are usually with companies headquartered in their home countries. They may be buying property as an investment, as a vacation home or as a residence for their children as they study in the United States.

Tips for handling the mortgage application Let’s say you’re handling a loan application from a potential borrower who lives and works in another country. What kinds of questions should you ask? What do you need to keep in mind?

Here are a few best practices: 1. The first step is pleasantly simple: Take the loan

application as usual–though you will, of course, have to leave the spot for the borrowers’ Social Security Number empty.

You may have heard of another identifier–the Individual Tax Identification Number (ITIN) that foreign nationals can receive through the Internal Revenue Service.

That’s a bit beyond the scope of this article. Otherwise, the application process is not too different from applications that you’ll receive from U.S. citizens. Borrowers will need to list information related to their place of work and their banking institutions, even if the names sound different from what you’re used to seeing. Our company, for example, does not ask for an international borrower’s credit history–it’s an incredibly complex process. Instead, we ask for a reference letter from their banker to establish, to a certain extent, the integrity of a borrower’s capital.

2. Be sure to ask borrowers how often they are in the

How to Take a Loan Applica From a Foreign National Borr Bor

By Eric Tran

United States: Regularly, sometimes or rarely? This will help you understand why the borrowers want to acquire property here–after all, why would anyone choose to buy a house in a country they never set foot in? Secondly, if they happen to be in the United States during the loan process, most lenders would probably like to have a faceto-face meeting with them, too. It’s likely the borrowers want to make the journey anyway. But remember to extend an invitation–most foreigners won’t show up without being asked.

3. It is also important to discover the best methods for communicating with the borrower: Some people may prefer the immediacy of a phone call, but coordinating for time zone difference could be tricky. Fortunately, e-mail makes it possible to connect with just about anyone just about anywhere. Even so, you should always be willing to provide a courtesy call to the borrowers and clarify any

5. Is the borrowers’ downpayment already with a U.S. banking institution? If not, where is it? Most lenders require higher downpayments from foreign nationals– anywhere from 20 to 30 to 40 percent of the purchase price.4 Because it is more difficult to determine a foreign national’s credit history, many lenders require a heftier downpayment.

If the borrowers plan to wire the downpayment from a foreign banking institution, make sure you check with escrow company first.

Also, check with your title company about what kinds of ID it will require. A passport is a must, and an entry visa to the United States is a bonus. Your title company will advise you as to which kind of ID they require. Normally, they will require two forms of identification. You might also ask your borrowers whether the title to the property will be held in their name or in the form of an LLC or some other entity.

6. Another important question to ask borrowers: Are they

located near a U.S. embassy or consulate in their native country? Remember, if loan documents must be signed overseas, they must be signed and notarized in a U.S. diplomatic establishment. The title company won’t accept any documents that weren’t notarized by U.S. diplomatic personnel.

In some cases, foreign borrowers will assign a power of attorney to a U.S.-based agent. While this is a common practice, there is a wrinkle that you must not forget: a power of attorney for this purpose will only cover one specific address in one specific county. If you are buying two different pieces of property in two different counties, you must create two different powers of attorney.

Be prepared for differences Keep in mind that many foreign borrowers don’t speak English very well. Though buyers from English-speaking countries such continued on page 83

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questions that might pop up during the application process.

4. How would the borrowers prefer to receive their documents, by e-mail or by certified mail? You may discover it’s best to do both.

Send your borrower electronic copies by e-mail, so they can quickly review the documents, but also follow up with print copies delivered by FedEx or UPS. You’ll find that most borrowers prefer to receive all documents in a formal manner–this is very important to them. E-sign won’t cut it, nor will a request to “please print out and sign.”

And a quick note about what kind of paperwork you send to borrowers: Not all U.S. disclosure rules apply to foreign nationals. The Privacy Act and the Credit Score Disclosure are two examples of documents that you probably don’t need to ship to borrowers. But you may find it wise to send them all relevant disclosures just as a matter of policy.

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Mortgage Companies Need to Speak Millennial Language More Clearly Modern marketing strategies should focus more on â&#x20AC;&#x153;catchingâ&#x20AC;? than pitching

By Sarah DeCiantis

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options and let them decide if paying 20 percent, 10 percent, three percent or one percent is best for their longterm plans. Give them the information they desire and get out of their way.

When it comes to discussing the value of housing, there’s too much pitching going on and not enough catching. Not enough listening.

Mortgage experts are too busy telling Millennials how to think, as opposed to adapting and catering to their point of view.

Millennials want to be entertained.

They are more interested in highlights and easy bite-sized morsels of content than long-winded rhetoric.

They prefer to watch quick “How-To” videos on YouTube over reading lengthy articles or instruction manuals. Millennials stay up on current events by browsing their Twitter and Facebook newsfeeds instead of reading newspapers or watching the local news.

If mortgage companies are going to crack the Millennial code and encourage the younger demographic to become homeowners, we’ve got to do more by saying less.

At United Wholesale Mortgage (UWM), we’re making great strides in our marketing efforts to help mortgage brokers speak the Millennials’ language more clearly through social media and other forms of outreach.

One of our recent successes was our “Breaking News” campaign that resulted from a Millennial Housing Outlook study we conducted with Michigan State University.

The study itself gauged the opinions and attitudes that Millennials have toward homeownership. It produced a very relevant and effective look into what soon-to-be Millennial homebuyers are thinking, for example:

Those were some pretty eyeopening numbers. We could have just taken those stats and shoved them in the faces of Millennials walking down the street.

“See! Your peers from around the country said they would be more likely to buy a house, so you should too!”

No, that wouldn’t be effective.

That would be more pitching when we should be catching. Instead, we transformed that data into content that Millennials appreciated—a series of entertaining minute-long “Breaking News” clips that delivered the same information, but in a humorous and easily digestible (and shareable) manner.

We used attention-grabbing headlines like, “Millennials Learn Their Parents Are Liars” to add tongue-in-cheek humor to breathe life into what are otherwise just runof-the-mill research statistics.

We posted the videos on our Facebook Page—with two weeks between each—and generated roughly 200,000 views among them in that short timeframe.

That additional attention isn’t just beneficial to our social media metrics and brand recognition in the marketplace; it’s beneficial to the Millennials consuming the content.

We took the cut and dry research that has come to define the mortgage business and adapted it into the type of engaging content that our target audience prefers.

There are a lot of Millennials out there who are ready and open to buying a home, whether they realize it or not. The challenge isn’t for mortgage companies to persuade them through pitching and selling, but by effectively communicating by speaking their preferred language.

Sarah DeCiantis is the Chief Marketing Officer for United Wholesale Mortgage. She has been the key driver behind UWM’s strategic approach to marketing, which has transformed the company’s 30-person marketing team from sales support to a driver of sales growth.

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l Sixty-seven percent of Millennials thought they needed a 20 percent downpayment to purchase a home. l Only seven percent were aware

that downpayment options under five percent even existed. l Ninety-six percent said they would be more likely to buy a home if they knew a downpayment could be as low as the equivalent of two months’ rent.

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he mortgage business has taken up an increasingly high interest in the Millennial market over the years, which is great, but it is shining a light on a pretty big identity crisis that exists because of that Millennial-heavy focus.

Millennials, as a group, are recognized as a tech-savvy bunch that is fast-paced and craves simplicity, ease-of-access, and the ability to customize their experiences. They want to do things their way, and they want to do them easily. Doesn’t that sound like the exact opposite of the mortgage business?

Mortgages are about as cut and dry a commodity as you’ll find in any market. There are hundreds of big banks and lenders throughout the country that offer the same products and the same pricing.

That’s about as lame as you can be as a business model in the eyes of Millennials. Millennials get excited about new food and drinks, new apps, new technology—a fresh set of capabilities that didn’t exist before.

Yet, the concept of mortgages feels monotonous and lacks any sense of change beyond the daily fluctuation of interest rates.

Despite the fact that more housing-related content is directed at Millennials than seemingly ever before, a lot of big players in the mortgage world seem to be in an uphill quest to appeal to this crowd because they aren’t speaking the same language.

We want those young up-andcomers to be excited about the idea of homeownership, yet the industry isn’t offering enough to actually excite them.

All they hear about is one big thought-leader after another touting the advantages of buying over renting. They have well-to-do, knowit-all adults oversimplifying their lifestyles, telling them to sacrifice things like avocado toast in order to conform to society’s expectation of the typical life timeline—graduate from college, get a job, get married and then buy a house.

Quite frankly, it’s a lot of what Millennials specifically aren’t interested in: An additional sense of authority in their lives. They don’t want to be told what to do, they want to experiment and experience life their own way, and on their own schedule.

Don’t tell Millennials to get a 30year fixed mortgage over a 7/1 adjustable-rate mortgage—give them information and the pros and cons of each, and let them decide.

Don’t tell Millennials how much of a downpayment they should put down on a house. List out their

heard on the street Motto Mortgage Franchise Opportunities Now Available Nationwide

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Motto Mortgage, the mortgage brokerage franchise member of the RE/MAX Holdings Inc. family of brands, has announced that it is selling mortgage brokerage franchises in all 50 states. The brand has already sold more than 40 franchises across the country, including more than 20 that have already opened their doors, since launching in October of 2016.

“Now that Motto Mortgage franchises are open, we’ve witnessed the extraordinarily high level of customer service our loan originators provide,” said Motto Franchising President Ward Morrison. “We want customers to have access to the Motto Mortgage experience in every marketplace. Potential owners from across the country have been patiently waiting for us to open this opportunity up to them so they can improve the overall experience associated with buying a home.”

RE/MAX franchisee and Motto Mortgage Plus Broker/Owner Freddy Rodriguez said, “The best thing about Motto Mortgage is that our loan originators can look for great loans for borrowers with several different wholesale lenders.

We provide borrowers with competitive rates, close loans quickly, keep closing costs low and, generally, give consumers a better deal. I’m a true believer in the American Dream and my hope is that the addition of a Motto Mortgage franchise in the area will help more people become homeowners.”

Princeton Mortgage Debuts Wholesale Division

Princeton Mortgage, a residential mortgage banker headquartered in Pennington, N.J., has launched a Wholesale Division, Princeton Mortgage Wholesale.

The new Division will be based in Pittsburgh and focus initially on the Pennsylvania, New Jersey and Colorado markets. The company expects to expand into Delaware, Florida, Georgia, Maryland and Virginia markets in the coming months.

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Matthew Joy, Director of National Wholesale Lending at Princeton Mortgage Wholesale, stated that his company is ready to take on wellestablished competitors.

“A lot of companies focus on exceeding customer expectations or ‘delighting’ the customer,” Joy said. “We are students of the theory that customer loyalty comes from the ease in which it is to do business with us. For example, if a customer has to call customer service and has a ‘wonky’ interaction, it’s going to be pretty hard to win back that customer, ever. We’d rather create an environment where the customer never should make that call. That’s what we call the ‘effortless experience.’”

Redfin Mortgage Begins Lending in Illinois

Redfin Mortgage, a subsidiary of the real estate brokerage Redfin has expanded operations into a second state with the establishment of lending operations in Illinois.

Redfin Mortgage began in January 2017 by offering home loans to Redfin customers in Texas.

The company is planning to expand into Virginia before the end of the year and is seeking to become a presence in additional states during 2018. According to the company, its focus are homebuyers who with a Redfin agent. Redfin also operates Title Forward, a title and settlement company.

“In the current competitive real estate market, a fully underwritten pre-approval gives the homebuyer an edge by earning the seller’s confidence that the loan will be approved quickly and the sale will close on time,” said Jason Bateman, head of Redfin Mortgage.

“In a bidding war, a buyer with a fully underwritten pre-approval can consider waiving the financing contingency to make their offer nearly as appealing to a seller as an all-cash offer.”

Embrace Home Loans Partners With Spillane Consulting Associates

Embrace Home Loans has announced that it has partnered with Spillane Consulting continued on page 90

mba 2017 convention survey range was from $250-$3,000, with the median being $1,500.

Question 32 wanted to know if the executives thought production costs were beginning to stabilize (after years of rising expenses). Good news indeed … they are said 23 of the 28 executives.

Question 33 asked if regulations were (still) adversely affecting both loan production and consumer credit availability.

They still are, said 23 of the 27 executives who weighed in on the question. Are slower closing times resulting (occasionally) as a result of TRID, inquired Question 34. Oh yes, the new rules are still impeding normal closing times on occasion, reported 22 executives, compared to six who thought not.

Questions 35 and 36 dealt with HMDA’s effect on compliance and if the new postDodd Frank rules have made the mortgage finance process safer for consumers. The executives’ responses left no doubt that HMDA’s expansion will make compliance more difficult, by a vote of 26 to two. As for whether the process is safer, 15 respondents said the new regulations did increase consumer safety, while 13 saw no difference.

Don’t hold your breath for GSE reform in 2018, indicated the responses to Question 37.

By a tally of better than eightfold, the executives discounted any hope for Congressional action for the GSEs. How about house prices, are they heading higher in 2018, Question 38 asked. Yes, they are expected to rise next year, especially on the lower end of the housing price spectrum, agreed 27 of the executives.

Question 39 wondered what the executives thought refi share would total in 2018. The group average was 26.6 percent, within a range of 10 percent to 50 percent. The median for the 28 firms was 30.

And how much origination volume has your firm funded year-to-date through September, asked Question 40? The average origination volume for the 28 firms was $4.8 billion, within a range of $50 million to $150 billion. The median production volume through 2017’s first nine months was $2.5 billion. Will we find more mortgage brokers and wholesalers in the next two or three years, wondered Question

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41. In something of a surprise to this observer, more than twice as many expect more of each ahead. That’s a change from last May when 13 said more and nine said not.

How worried are the executives about a downturn in originations in 2018, Question 42 inquired. Based on a one through 10 scale, the group average was 6.5, and the range of responses was from three to 10, with three 10s, three nines, but 10 of five or under.

Question 43 asked if continued solid growth in online originations was expected.

Surely it is, with 25 affirmatives of the 28 responses. Are digital automation programs like “Rocket Mortgage” adversely affecting your firm’s production volume, queried Question 44?

Not really reported 17 compared to 10 others who report digital programs are hurting their volume. Is technology fundamentally changing the way mortgages are done, wondered Question 45. Sure is, said 24 of 28 executives.

Is the CFPB’s relatively new servicing rule proving good for both servicers and consumers, asked Question 46? Yes, reported eight executives, 13 said no, and seven others report the jury is still out.

Question 47 wanted to know if it was easier to get a mortgage today than at any time since 2007. Three times more said “yes it is” than said no. Question 48 sought to learn if the executives were proponents for automating the mortgage appraisal process. We do, reported 23 compared to five who begged to differ.

Expect better supply in the form of higher inventories of “for sale” listings in 2018, asked Question 49. No we don’t expect more homes to go to market, said 23 versus five sporting the opposite view.

How concerned should the mortgage banking industry be about the multiple year increase in home prices, Question 50 probed. On a scale to 10, the executives’ average for all 28 was 6.6, ranking it a concern but not a bother. Have borrowers’ credit characteristics improved in recent years, Question 51 wondered. They are, said 22 of 28 executives. How about the low downpayment market, what are the prospects for good growth in mortgages with LTVs

Tom LaMalfa is a 35-plus-year veteran mortgage-market analyst and researcher. He has done pioneering work in the areas of secondary markets, wholesale mortgage banking, mortgage brokerages, financial benchmarking and GSE reform.

He may be reached by e-mail at Tom.LaMalfa@gmail.com.

foreign national borrower as the United Kingdom and Canada accounted for many purchases, China was the number one source of international buyers of U.S. homes in 2015-16, according to the National Association of Realtors.5 The good news is that it’s easier than ever to find translation services that can assist you. Help is just a Google search away!

You may encounter other differences beyond language, too. Many devout Muslims believe that charging interest is forbidden by their religion–which is why some lenders offer financing that helps them comply with that rule.6 As you can see, there are some special considerations that lending and real estate professionals must make for international borrowers. For service providers who invest the time into this market–to learning

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the intricacies and finding ways to streamline the loan application process–there can be sizable rewards.

There’s a huge audience of international real estate buyers who need the help that you can provide. More and more lenders and brokers are vying for their business. Why shouldn’t you try to seize the opportunity, too?

Footnotes 1—NAR.Realtor/Infographics/2016Profile-of-International-Activity-in-USResidential-Real-Estate-Infographic 2—NAR.Realtor/Reports/Profile-ofInternational-Home-Buying-Activity 3— NAR.Realtor/Infographics/InternationalActivity-in-US-Residential-Real-Estate-in2016 4—Zillow.com/Intl/EN/Foreign-BuyersGuide 5—NAR.Realtor/Infographics/2016Profile-of-International-Activity-in-USResidential-Real-Estate-Infographic 6—Zillow.com/Intl/EN/Foreign-BuyersGuide

Eric Tran is the CEO of DH Capital, a Huntington Beach, Calif.-based lender with extensive expertise in private money lending. He can be reached by e-mail at Eric.Tran@DHCapitals.com or call (714) 300-8223.

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Question 61 wanted to know if managing a mortgage company was getting easier or harder. Two of 28 felt it was getting easier, while 26 disagreed with them. Will 2018 be an outsized year for investment in technology, asked Question 62? It will, said three times more executives than those not making big capital investments in technology.

Question 63 sought to learn if margin compression was the industry’s top concern. It is sais 18, it isn’t say five, and I don’t know said another five.

Are mortgage lenders in an easing mode in terms of credit standards, inquired Question 64?

It is, said 22 of the 26 responding to the query. Ready for the new and expanded HMDA requirements coming in January 2018, asked Question 65. We are, said 26 of the 28 respondents.

Question 66 wondered if the cost of servicing was a factor in a seller’s or securitizer’s decision about whether to sell to Fannie Mae or Freddie Mac. These executives weren’t sure, as 17 said not a factor and eight said yes, the cost of servicing is a factor that’s considered in the sales decision.

How much is a great experience with a secondary market investor worth compared to just an okay experience, asked Question 67.

It’s worth an average of 7.3 basis points, according to the 28 executives. The range was from two to 25 basis points, with the median of five basis points.

Question 68 asked who set secondary market strategy— capital markets or senior management. Both groups set strategy, said eight executives, seven said senior management and 13 said Capital Markets did.

Has your firm captured all QM data points internally over the past four years (as mandated by HMDA rules), inquired Question 69. Yes said 14 execs, no said 8, and 6 others didn’t know the answer.

There you have it, an overview of the findings derived from this survey research project, conducted during the MBA Annual Conference. My thanks to all those who contributed their time and wisdom to help me complete this task again this year. And last but not least, my thanks to Fannie Mae for sponsoring this year’s convention survey.

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exceeding 95 percent, asked Question 52. Three times as many executives anticipate stronger growth in this sector in 2018.

Question 53 sought to learn how much over 95 percent LTV and over 43 percent DTI (risky) lending is too much risky lending.

The group average was 14.4 percent, within a range of five percent to 50 percent. The median for the 28 firms was 30 percent. Here’s where there really was a distinction between the banks and non-banks.

Concerned about a crash in residential real estate values in the next few years, questioned Question 54. Not so much, fair to middling probability, says the group, giving it a 5.6 on the 10point scale. Question 55 wondered just how important going digital was to their firms.

Important it is, with a rating of 6.5 on the one through 10 scale. The range was three through 10, with a median of seven.

Expecting more very bad weather ahead, inquired Question 56? It looks like a better than 50/50 chance, with the group score 6.8 of 10.

Comfortable with the MIs insuring conventional loans for inclusion in Ginnie Mae pools, Question 57 inquired. Yes we are, reported 21 executives, compared to six who weren’t in favor of such a practice.

We’ve experienced a sellers’ market the past five years, so when will this change asked Question 58. The transition to a sellers’ market is expected to arrive in 2021, another four years.

The response range was from next year all the way out to 2025.

The median guesstimate was 2020. Is murky guidance about loan officer compensation rules causing these rules to be disregarded (pending clarification), Question 59 wondered. Yes, the rules are being disregarded due to murky guidance, said 17 executives versus 10 who say not.

Speaking of clarity, how about marketing servicing agreements (MSAs), how big a problem is the lack of clarity asked Question 60. As a problem, it scored a 6.6 out of 10. The range of responses was one through 10, the median was seven.

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How to be Thankful and Who Originators Should Thank

By Brian Sacks

t’s the Thanksgiving season, so I want to thank you for being a subscriber because without you there would be no one to share these Top Originator Secrets with.

In this article, I want to talk about who to be thankful to and how to properly thank them. We often get so tied up in our own worlds that we usually don’t take the time to give a simple thank you.

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Who should you be saying thank you to?

I would suggest that the first people you should be thanking is your spouse, partner and immediate family. They truly don’t understand the true nature of our business. There are major highs, major lows, deals that don’t work out, and of course, the inconsistent income if you aren’t using a system that works. The sad truth is that if you don’t have a supportive spouse or partner, you simply won’t make it in this industry due to the pressures of our job.

Next, look back and see who referred you a deal Here’s a list of some of the people you should be getting referrals from: l Realtors l Builders l Professionals, such as accountants, attorneys and financial planners l Title companies and insurance agents who can also refer you l The buyers who have done their loan with you and their referrals Finally, say thanks to those whom you always take for granted We all know how hard our job is, but do you ever stop and think about your support staff? Many only yell at them, but don’t ever say “thanks.” It’s very normal to be upset since our entire job revolves around deadlines and paper which is a recipe for disaster. There are so many moving parts to the mortgage process, like inspections, appraisals, certifications, title

issues, and on and on.

Take a minute and thank those you take for granted at work: l Your receptionist l Your processor l Your set up person l Your underwriters and closers l Anyone else who touches your files before the closing date How to properly say thank you So, now that we know who to thank, let’s talk about how to properly thank them. Let’s break down these groups and how we should thank them properly. l Realtors, other professionals and past clients: I suggest calling them personally to thank them for their referral each time you get one, and let them know the outcome of the call. Did the people qualify?

Did you need more information from them?

While e-mails are nice, there is no replacement for a personal phone call to get your referral sources engaged and to make them like you. Hearing your voice and knowing you took the time to call means a lot to them.

I also use a video e-mail tool that takes me about a minute called “BombBomb,” and they offer a free trial here: BombBomb.com/?bbref=BRIAN SACKS1GMAILCOM. At this time of the year, a nice hand-written note will go a long way too. What’s even better is that most will keep it on their desks and it will turn into a conversation starter with others

in their office since they so rarely get a thank you. l Your family spouse and partners: Once again, I would suggest simply “Thank You” and explaining why you are thanking them will go a long way to show that you appreciate them and do not take them for granted. But I always like to do something special at this time of the year.

Something we don’t normally do like go to a special place for dinner or on a special vacation we have been talking about where we can just be together and enjoy time together without distractions or cellphones. l Thank your staff: Your staff has the ability to make you look like a genius or a complete idiot.

You, by the way, have the ability to do the same for them.

Honestly, I don’t think you should wait until Thanksgiving to say “thanks.”

Every quarter, I send my staff a special thank you gift. During the summer, I go to eCreamery.com and send them all ice cream. Other times, I have sent them other food gifts. For some reason, food always seems to be a big hit with support staff.

Thanksgiving is not the only time to say thanks but it’s a good one.

Don’t ever get so wrapped up that you take people for granted. You should be thankful that you are in a business that helps others achieve their dreams, while providing us with a great income.

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.

From the Lenders’ Viewpoint: How to Submit a Commercial Real Estate Loan Request The Three-Legged Stool

By Brian A. Opert ommercial mortgage brokers usually have two main objectives when requesting a loan quote: to get a quote with the best possible terms and to get it quickly. How brokers present the loan request to Lenders determines how well they will achieve these objectives. A well prepared submission can help Lenders produce the best possible results. A poorly prepared submission could cause Lenders problems and result in a mediocre loan offer, or simply a rejection.

Commercial mortgage brokers often have the same complaint: “I sent a loan request to a lender and all I got back were questions and requests for more information. Why can’t they just send me a quote?”

On the other hand, lenders often say, “The broker sent me everything but what I need. Why can’t the broker send me useful information, so I don’t have to delay sending a quote?”

Ever send three years of personal tax returns, a site plan, perhaps a few black and white photos and a note: “We want to borrow the maximum that you can lend?” There are better ways to understand and submit a loan request that can reduce frustration for both brokers and lenders, all benefitting loan closings.

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The Three-Legged Stool A commercial real estate project is like a three-legged stool. Without strong equal support from all three legs, the stool will wobble or even fall over. The three legs for a commercial real estate deal are The Property Leg, The Borrower Leg and The Transaction Leg. All three legs count!

For loan submissions, brokers need to provide strong supporting data for each of the three legs. l If the three legs are equally strong, the deal is very likely to close. l If only one leg is weak, the others must be stronger than usual to compensate.

l If two legs are weak, the deal is unlikely to close.

Therefore, gather information about the property, the borrower and the transaction all before the loan submission. Only after you have gathered this information from the client, the seller, the market and other sources, can you prepare a quality loan submission package for the lender. This is not the time to be hasty. A few hours spent developing a complete submission may save weeks later in the process, and ensure a loan closing.

The initial loan request submission should include the following: l A detailed executive summary that describes the loan and all pertinent issues (see below); l A current rent roll covering 100 percent of the rentable space, including each/all vacancies; l Income statements for the past two years plus the current yearto-date; l Detailed sources and uses of funds; l Personal financial statements of principals; l Color photographs of the property (not more than six in total); and l Other supporting documents for the statements made in the executive summary.

Ensure that the data provided in one leg tracks accurately with the data included in the other leg(s). For example, be sure that the total square feet listed in the rent roll is also stated accurately in the executive summary when describing the size of the property. If they are different, this will delay the review.

Make sure that the columns of numbers add correctly (don’t type columns of numbers–use Excel!).

There are several similar confusions to avoid.

The Property Leg Because it will be used as the primary collateral for the loan, the property is the basis for a commercial mortgage loan. The lender needs to know as much as

possible about the property. At least, include the following information in your loan package: l Property type, name and address; l Building size in square feet, number of units and number of stories, and land size in acres; l Type of construction (concrete and steel; brick over frame, etc.) l Rental income details; l Net operating income reports for the past two calendar years and for the current year-to-date; l The date the property was built and any date(s) it was renovated, if any; l Occupancy history; and l Date or purchase and price paid if the property is already owned.

The property description should be brief and can be presented as a few sentences or, better, in a bulleted list. The current rent roll and historical income and expense reports mentioned above should be attached. Photographs are a must, and should show no more than six views of the property’s interior and exterior, combined, in color.

Scanned poor black and white pix from the appraiser’s report will not do! Lenders can actually “visit the site” on Google, so views of what’s across the street are not needed.

Be sure to review the property information and compare to the market. For example, check to see how the occupancy rates compare to the market. Make sure the rents are at market rate, or below, and discuss the rent grid. If possible, visit the property to see its condition, and report on the visit.

For a hotel with a bad rating on TripAdvisor, seeking a basic refi, there needs to be a good story. In your review, list all benefits and disclose weaknesses. Lenders will find out later anyway.

The Borrower Leg Borrowers can be individuals or entities. If the borrower is an entity, the lender will also want information about all principals in the borrowing entity, and their shares of ownership.

Lenders do not expect every

borrower/principal to have great credit, a high net worth and years of experience. What is important is to describe the borrowers’ situation accurately so the lender can match them up with the correct loan program.

The information you submit about principals should include: l Credit worthiness: For each borrower, submit the three credit bureau scores, called a “trimerge.” It is not necessary to actually pull the credit reports, as this could affect the score. In some cases, general descriptions of credit worthiness are adequate for the initial submission, (low 600’s or high 700’s, etc.).

Describe any conditions that could adversely affect credit scores, such as bankruptcies or filed IRS liens, etc. Explain special circumstances that could cause a low credit score, such as divorce, death, major medical, weather or other disaster, etc. l Financial condition: The net worth and liquidity should be disclosed for each principal. l Experience: This can be demonstrated in a bio/resume that describes pertinent real estate development/management experience, if any. Lender’s don’t like on-the-job training, so it’s important to demonstrate handson experience.

The Transaction Leg This is often the weakest part of a loan submission. Brokers should spend extra time and effort to make sure they understand their clients’ situation and business objectives for the transaction.

Explain the transaction’s specific details to the lender to ensure that it provides the correct financing details. If lenders misunderstand the transaction, they will quote inappropriate loan terms.

Elements of The Transaction Leg should also be covered in the executive summary: l Loan purpose and loan amount requested; continued on page 91

A Millennial’s Perspe

A few words on Company Culture and why it’s important for Mill s of late, “Company Culture” has become a major buzzword in the mortgage industry, and hopefully around the office. There’s a good chance you think that you’ve exhausted the subject, but the truth is, the term is so rich with nutrients—the kind of nutrients that feed and stimulate your mind and propel your work ethic—there is surely more to unpack.

While there are case studies out there establishing both the “how” and “why” a Company’s Culture that cultivates a strong sense of brand equity is not only beneficial, but necessary for both a company and its constituents, I’m going to briefly discuss “why” it is good for Millennials, specifically, Millennials whose hands you want to place at the control board when yours have retired.

Here are three key reasons why Company Culture is important when recruiting Millennials:

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1. Our generation’s “corporate ladder” has transformed (and perhaps even multiplied) It is quite possible that you folks are the last to experience what it is like to build a career in a vertical manner. While many of you are sporting degrees and certificates, there’s a large portion of you who have notches on your belt indicating your worth from your physical experience—the time and effort that you’ve invested in your career for decades. Half a century ago, becoming successful was directly correlated with how hard you worked. Sure, you may have bopped around in your teen years, bussing tables and filling gas tanks, but when you found something you were good at, you stuck with it. You started at an entry-level position, and every few years, you were promoted until you leveled out at the highest rank you could achieve, and you worked your hardest at that same, eight hours a day, five days a week, until you retired.

Nowadays, as college and postgraduate education has become more prominent, the workforce has become increasingly more specialized—or at least, our expectations of what the workforce should be like have become more

specialized and segmented. In other words, you have thousands of graduates every year from undergraduate universities with multiple degrees in fields such as Italian and Communication Studies (as a matter of fact, those are my two degrees … it’s okay, you can chuckle). Sure, we have worked incredibly hard to achieve those BA’s, and our minds are better for it, but consequently, many Millennials believe that their careers have to reflect that specific education.

Additionally, due to these educational embellishments, competition for job openings has increased, which has delayed many Millennials’ opportunity to even land a position, let alone one they are comfortable with. This slightly chaotic approach has inadvertently cultivated an air of frivolity which has enveloped the career pursuit in general, emitting illusions of “mobility” and “temporality.”

Because young adults are accomplished and indebted (to our educational institutions, government, and/or parental figures), it leads us to believe that we have greater worth than young adults did 50 years ago. As a result, if we begin a job that we are unhappy with— perhaps it does not pay well, or we do not particularly care for our bosses or co-workers—we feel more confident throwing it away because of the illusion of excess— excess positions, options, etc. There is something better.

I like to think of the Italian word “assaggio” which stems from the verb “assaggiare” which means to taste, and the former, a taste. For many Millennials, the workforce is like a flight of beers: Un piccolo assaggio of about four different brews. We are so indecisive, so this is a great option because we are allowed to try out each one without committing. Sometimes, if we like one in particular, we’ll order a full glass after the flight. But more often than not, we’re perfectly content with those samples, and we’re off to the next bar.

Are you catching my drift?

Establishing a prominent and appealing Company Culture is important when recruiting younger employees because it is what will keep us around after you have initially reeled us in. While we may be flighty, indecisive, and non-

committal—you should not underestimate us. We are incredibly perceptive, and we are searching for a certain wholesomeness and authenticity that will counteract the overstimulated society that we were born into.

If you recruit a Millennial and showcase the depth of your company’s mission, the promise of progress, the overwhelming sense of integrity and a solidified identity that saturates not only the infrastructure of the corporation itself, but the external interactions between the company and its clients … that young adult will feel more confident in sticking around.

Company Culture promotes longevity and confident commitment among already existing employees, and when new recruits visualize the status quo, the way the long-term employees not only function, but prosper and advance in their environment, it sends the message that it is a dynamic and authentic workplace and there is room to grow and develop.

2. “Career” has become synonymous with “Identity” To expand upon previously articulated sentiments, the connotation of one’s career has come to reflect one’s sense of self, at least in the U.S. Back in the day (and still, in other nations), work was its own entity. The work sphere and the personal sphere were kept separate, which allowed for individuals to compartmentalize their professional endeavors and their creative, personal endeavors. Today, however, these two circles have begun to merge, obfuscating the lines between employee and self. If “career” becomes synonymous with “identity,” and identity is tied not only to one’s manifested self, but to one’s ideal self—their goals and aspirations—it follows that a career choice would then parallel a person’s pursuit of happiness.

Consequently, in labor, we Millennials seek not only financial fulfillment, but personal fulfillment. It is obvious that while jobs are (seemingly) abundant, or at least, the variety of job sorts, many of these appealing and dynamic facades crumble within months of working at the company. Promises of creative freedom, variability, and engagement dissolve into a static,

unchallenging day job. A Millennial’s worst enemy is monotony. You may think we are lazy, but the truth is, we crave challenge, because we are incredibly adaptable. The reason many companies let us down is because they lack a strong Company Culture.

Most job openings are at start-ups that literally started up a week before.

Thus, their infrastructure is shallow and underdeveloped, and they lack that seasoned modus operandi.

Consequently, the level at which they function is one-dimensional, and prospects of tangible progress—not only for the company but for the employee themselves—seem slim, and nothing thwarts personal fulfillment like a sense of being stuck or suffocated.

Furthermore, as you may have noticed, Millennials run on “individuality” or at least, perceived individuality. Thus, we want our careers to reflect this strong sense of self, as if the job was literally made for us (if it actually wasn’t, entrepreneurs are a dime a dozen). Companies with an unwavering culture and identity are more appealing to Millennials, because being employed at one instills within us a greater sense of conviction. If your company can showcase a cohesive, dynamic and authentic history of operations, we will be more likely to lend you our ears.

3. Your competitors are hard hitters When I say “competitors,” I don’t mean other mortgage companies. I mean other industries altogether. Here is the reality of the situation: It is very difficult to make your mortgage corporation seem appealing when other industries have their names in lights and offer endless perks (i.e. sleek office spaces, foosball tables in the break room, expensive brunches on the house), it is hard to convince a Millennial that working in the mortgage industry is actually worth their time.

That being said, like beauty, the perks eventually fade, and all that is left is the mind (of the company and its constituents).

At the end of the day, while a flashy, edgy image is important to grabbing one’s attention, it is important to remember that this image is merely two-dimensional. The third dimension of a company is their culture—ay, there’s the rub!—and it is here in which the past, present and future of a company lies.

Now, while many mortgage

pective Millennials …

By Amanda Lucido

companies are likely consumed with creating the best possible present, it is important to keep in mind that not only should you cultivate a Company Culture that transcends all of the company’s and employees’ endeavors (from the top, down)—all the while emphasizing the importance of what you do—but you must curate an inspired team that can carry that company well into the future.

And what is it that this team does and will continue to do? Well, from my understanding as a third-party figure, not only do many top mortgage companies promote longevity and commitment within their infrastructure but they help their clients—real people—actualize these same ideals. Mortgage companies typically provide services that allow

their clients to realize the dream of homeownership—committing to a place to live, perhaps committing to a family—and increasing the longevity of their livelihoods and wellbeing. Without prominent figures in the mortgage industry who perform their duties with conviction and above all, integrity, these individuals’ aspirations would be compromised. Instead, you actively work to purify notions of the mortgage industry, internally and externally, ultimately transforming homeownership from an elite and exclusive endeavor, to one that is accessible for everyone.

Now, what Millennial wouldn’t want to be a part of a dream team like that?

Amanda Lucido recently graduated from UCLA in the spring with two bachelor’s degrees in Communication Studies and Italian. She currently lives in Los Angeles, and works as a freelance writer, as well as an international film publicist with MEDIAPLAN PR, promoting the arts and proclaiming their role as a powerful sociopolitical tool.

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Associates seeking strategic guidance for its Assisted Correspondent Program.

Embrace’s Assisted Correspondent Program is a private-label mortgage operations solution that is customized for financial institutions. Embrace provides an operational support program, creating an exceptional experience for the institution’s customers, referral partners and employees. Embrace offers fulfillment and quality control services and develops and supports all technology needs.

In addition, Embrace functions as a correspondent partner for loans that get sold on the secondary market.

Embrace engaged Spillane Consulting Associates (SCA) to help identify and participate with the right institutions for its Assisted Correspondent Program. SCA will help distinguish which organizations may be a good fit for the program by soliciting ideas and feedback from institutions–both potential partners and others.

“When Ben and I visited Embrace Home Loans last year it was clear to me that [they] had developed something special. And our investigation into the progress made with current program participants has only confirmed that belief,” said John Spillane, Principal of Spillane Consulting Associates.

“Let me be clear–we don’t believe this program is the correct option for every institution. But we’ve seen the program’s success so far with current participants, even if it’s not for you, I can strongly say, it’s something you just have to see. This is not something to ignore. For the right organization, Embrace has proven this program can deliver on its promise to radically improve the economics, quality, and customer experience provided by an institution’s existing mortgage department.

Pay attention to this Embrace program, if only to know what you’ll be up against.”

The program is designed so that originating institutions can maintain complete control over the client relationship, while gaining the full power of Embrace’s process efficiencies, technology and tenured team.

“Spillane Consulting is the premier mortgage banking advisory firm in New England.

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They have earned that welldeserved reputation by the value they continually bring to their bank clients–clients that are a who’s who in banking,” said Kurt Noyce, President of Embrace Home Loans. “Therefore, having them so confident that our services would be ideal for many of the people they’ve served, and equally, so enthusiastic to present such to them–we are honored that they will be doing so on our behalf.”

RCN Selects The Mortgage Office for Its Servicing Needs

Applied Business Software (ABS) has announced that RCN Capital has chosen The Mortgage Office software to automate its back office servicing operations.

RCN has become ABS’s latest customer in a roster that includes some of the highest volume lenders in the nation.

“We are excited about moving forward with The Mortgage Office as our loan servicing platform,” said Jeffrey Tesch, Managing Director of RCN Capital. “Our complex investment business models require robust software to handle high volume of transactions. We had various systems in place for many years, but absolutely love how tailored and specialized The Mortgage Office is to our type of business.”

RCN provides short-term loans to real estate investors to fund the purchase of non-owner occupied residential and commercial properties and to finance renovation projects.

Jerry Delgado, Chief Executive Officer of Applied Business Software, said, “We are thrilled to welcome RCN to the ABS family of prestigious clients. We are humbled by being the preferred choice for private lenders in loan servicing software for almost 40 years.”

Warren Buffett Mortgage Firm Opens Commercial Lending Division

Vanderbilt Mortgage and Finance Inc., a division of Warren

Buffett’s Berkshire Hathaway business empire that specializes in consumer manufactured housing, has created a Commercial Lending Division.

The new Division will offer commercial financing in select states, with a lending range between $1 million to $5 million.

The Division’s borrowers will be land-lease communities, including communities and parks serving this housing sector. Maryville, Tenn.-based Vanderbilt will approach this business as a portfolio lender and servicing the loans it originates.

“Manufactured housing is providing a solution to the affordable housing crisis,” said Eric Hamilton, president of Vanderbilt Mortgage and Finance. “We are very excited to launch this division which will help owners of land-lease communities provide more access to high-quality, low-cost housing options.”

Mortgage Professionals to Watch l Primary Residential Mortgage Inc. (PRMI) has named Corey Butler to its Severna Park, Md. team as its newest Loan Officer. Corey is a native of the eastern shore of Maryland and is an active member of the Severna Park Chamber of Commerce. l James Hooper has been named Senior Vice President of Wholesale Lending at Endeavor America Loan Services, the Wholesale Lending Division of The Money Source. Hooper will lead growth strategy for the company’s rapidly expanding wholesale and non-delegated lending channels. l Finance of America Mortgage (FAM) has announced the hiring of a new sales unit focused on credit unions and community banks. Leading the new unit will be Managing Director Brad Seibel, who brings more than 30 years of experience in the mortgage lending industry to FAM. Joining Seibel are credit union industry veterans Linda Clampitt, who will serve as Executive Vice President; Matt Abbink, who will serve as Senior Vice President of Direct Lending and Randy Shannon, who will serve as Senior Vice President of Correspondent Lending. l Sierra Pacific Mortgage has named Jay Promisco Senior

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Vice President of Retail Lending. Based out of the corporate office in Folsom, Calif., Promisco will oversee the 100-plus retail branch network, including more than 500 team members.

AmeriFirst Home Mortgage, a division of AmeriFirst Financial Corporation, has named Doug Long, a recognized mortgage industry veteran, as Southeast Divisional President. Charged with advancing AmeriFirst’s penetration of the Florida market, Long will work from AmeriFirst’s office in Winter Park, Fla. AmeriFirst has also announced the addition of Jamie Brown, a 20-plus year mortgage industry veteran, as Southeast Regional Manager.

Brown will oversees and drive AmeriFirst’s expansion into Florida and will work out of AmeriFirst’s offices in Winter Park and Tampa, Fla. Ocwen Financial Corporation has named Christopher Whalen, Chairman of Whalen Global Advisors LLC, as a Senior Consultant and Advisor to the company. Whalen brings nearly three decades of financial experience to the role, with a specific focus on the financial services, mortgage finance and technology sectors.

Mortgage Network Inc. has announced that Christopher Cowher has joined the company as a Senior Loan Officer, serving the Winchester and Lexington regions of Massachusetts.

HLP has named Larry Gilmore, a former HLP Chief Executive Officer and Founder, to HLP’s Board of Directors. Gilmore is currently Vice President of National Community Lending for HSBC, where he manages the company’s strategy to originate mortgage loans to underserved communities throughout the U.S. Draper and Kramer Mortgage has announced that Bob Rocklein, a 30-year veteran of the Massachusetts mortgage industry, has joined the firm as Senior Loan Officer, based out of DKMC’s Boston-area branch in Franklin, Mass. Draper and Kramer has also named Harinder “Indy” Johar as the company’s new Director of Residential Lending, based out of the Franklin, Mass. branch.

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Your turn National Mortgage Professional Magazine invites its readers to submit any information, events, passages, promotions, personal or professional occurrences that seem appropriate and/or other pertinent data to the attention of: Heard on the Street/Mortgage Professionals to Watch column Phone #: (516) 409-5555 E-mail: Newsroom@MortgageNewsNetwork.com

Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

from the lenders’ viewpoint l Source and amount of cash/equity to be invested; l Purchase price and estimated projected value if not yet stabilized; l The borrowers’ business plan; l Desired terms … be realistic in terms of pricing–a bridge loan request for a bankrupted borrower on a vacant building with a loan at 4.5 percent is so far out of the ballpark that an immediate turndown will be likely; l Date by which the loan must close; l The 1031 exchange details if applicable; l The borrowers’ intended use of cash-out proceeds, if any; l Length of time the property has been owned; l If already owned, what was the purchase price at the time of purchase; l In a refinance, the current loan balance, due date and terms; and l Special circumstances that may affect the transaction.

The business plan is critical to allow the lender to provide the proper loan quote. For example, in the case of the purchase of an apartment building, buyers could have several possible business plans—operate it as a rental property for the long term; bring rents to market; convert it into condos or other use; or raze it to build a shopping center. Obviously, these different business plans require very different forms of financing.

Brokers should do some calculations to ensure that the transaction makes economic sense. For example, check to see that the borrower has enough liquidity to make the downpayment and pay closing costs (and also with sufficient post-closing liquidity–they cannot be tapped out after the closing) estimate what the debt service coverage will be, etc.

Make sure that the projected value upon stabilization is greater than total project costs and/or the loan amount! Will it cost more to build than it will be worth in the end? This may look obvious, but a lot of people seek construction

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financing and create no new value beyond the total project costs.

Since this is not a personal residence, the developer/borrower must create new value with this investment, beyond the total project costs–ideally, at least 20-30 percent in additional value than total project costs.

The source of equity–the downpayment plus closing costs, along with post loan closing liquidity–must be evident in the financial statements. Discuss any issues you uncover with your client and work to resolve them before submitting the request to a lender.

Although the loan submission must include a lot of information, it need not be lengthy. A good loan submission should total less than 10 pages (the executive summary will typically be one to three pages). Lenders often prefer that all documents be assembled into one Adobe PDF file and e-mailed, or use free secure site Dropbox and assemble all documents there.

Specifically, label each document so they are easy to identify (“1234.pdf” in describing a filed document helps no one–rather, “2016P&L.pdf” or “2017rentroll.pdf” works). Sending three or more e-mails with a bunch of vaguely labeled attachments does not help much. Never overnight a hard copy … digital submissions only!

Initial loan submissions should not include tax returns, complete credit reports or complete environmental reports unless they are needed to support special circumstances. In fact, submitting many extra documents will be detrimental to getting a timely response. Lenders may set such lengthy requests aside, dreading the extra effort of sorting through unnecessary, unlabeled or unrelated documents!

When commercial mortgage brokers look at potential loan transactions from a lender’s viewpoint, they will likely improve their closed loan success rates.

Always keep the “Three Legged Stool” in balance and you will receive a rapid, solid response from your lender.

Brian A. Opert is Chief Executive Officer of Sterling Commercial Capital LLC, and has more than 30 years of experience in virtually all aspects of commercial and multifamily investment real estate. Brian has also been active as a commercial real estate developer and property owner, and as a senior executive handling retail and commercial leasing, sales and commercial property management throughout New England. He may be reached by phone at (800) 497-8606 or e-mail BOpert@SterlingCommercialCapital.com.

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Markets, responsible for identifying and pursuing LoanScorecard opportunities with originators, aggregators and issuers of non-agency assets, as well as developing and executing strategies to maximize revenues of nonagency capital market participants and investors.

BSI Financial Services has announced the appointment of Scott A. Johnson as Senior Vice President, Corporate Controller.

EverBank, a division of TIAA FSB, has announced that John Porath has joined the Retail Lending Division as a Senior Vice President, Division Sales Manager. Porath will be located in Charlotte, N.C., offering residential mortgage solutions to local customers and build awareness. Porath will manage Virginia, Maryland, North Carolina, South Carolina and Florida.

Docutech has added three key members to its management team: Brian Sargent as Vice President of Product Management, Rachel Bloomer as Vice President of Human Resources, and Emily Shapiro as Executive Vice President of Professional Services.

WFG National Title Insurance Company has appointed Kimberly O’Connor as Vice President/Michigan State Counsel and Underwriter. She joins WFG’s current Michigan Underwriter, Allan Dick, to support the company’s rapidly-growing base of title agents in the market.

Home Point Financial Corporation has announced that Ross Gloudeman has been named Chief Compliance Officer.

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l Consolidated Analytics, an appraisal management company, valuation services provider and advisory firm based in Irvine, Calif., has named Rudy Zabran as Chief Operating Officer. l New American Funding has named Scott Bristol as its new Senior Vice President, National Sales Manager.

Bristol, who is part of the company’s executive leadership team, will be instrumental in advancing the growth of the lender’s retail division throughout new and existing markets. l Silver Hill Funding LLC has announced the addition of Oscar L. Mendez to the company’s sales representative team, serving mortgage originators and their clients in Colorado, Arizona, Utah, New Mexico and Texas. l Ellie Mae has named Dinesh Shahane Senior Vice President of Engineering, with responsibilities for architecture and all horizontal technologies for Ellie Mae’s Encompass Lending Platform, including new investments in data, analytics, artificial intelligence, and machine learning. l NewDay USA has named Gaurav Bhatia as its new Chief Digital Officer. NewDay USA has also hired Michael Greenwood as Senior Vice President of Mortgage Servicing. l FirstClose has announced the promotion of Chuck Bloodgood from Senior Vice President of Technology to Chief Information Officer, where he will oversee the people, processes and technology within FirstClose’s IT department to ensure they deliver outcomes that support the goals and objectives of the company. l GSF Mortgage Corporation has named Tim Ferguson as a Loan Originator to the company’s New Port Richey, Fla. branch. l Inland Mortgage Capital LLC has appointed Marcus Perry as Senior Vice President of Loan Origination for the Eastern Region, responsible for all facets of Inland Mortgage Capital’s commercial real estate bridge loan origination for the eastern United States. l LoanScorecard has announced that Gerald Casey has joined the company as Managing Director of Capital

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

REMN Wholesale 732-738-7100 www.remnwholesale.com Although REMN Wholesale is part of a large corporation, it feels like a “Mom and Pop”-style company. We encourage our team members to grow and we train and promote each individual to their full potential. As a national company, REMN provides many opportunities for employment from coast to coast.

United Wholesale Mortgage 800-981-8898 www.uwm.com/careers Voted the #1 place to work in Metro Detroit, UWM is looking for A players to join our talented team. Our business is driven by our culture, and our people are our greatest asset. If you’re looking for the opportunity of a lifetime, apply to UWM today!

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We are pleased to announce a new package that will give your firm the recruiting tools to instantly shift your recruiting efforts into high gear using a multimedia, market-saturating approach. We will utilize the most successful methods that our clients have been using to find, identify and place top talents for your company. We have designed these packages with the concept of making it less expensive to give you the ability to reach more people.

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

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calendar of events

DECEMBER 2017 Monday-Tuesday, December 4-5 Mortgage Bankers Association Summit On Diversity and Inclusion 2017 Capital Hilton 1001 16th Street NW Washington, D.C. For more information, visit MBA.org.

Tuesday, December 5 2017 California Holiday Networking Party The Atrium Hotel 18700 Macarthur Boulevard Irvine, Calif.

For more information, call (516) 409-5555.

JANUARY 2018 Friday, January 12 New England Mortgage Expo 2018 Mohegan Sun 1 Mohegan Sun Boulevard Uncasvile, Conn.

For more information, visit TheWarrenGroup.com.

FEBRUARY 2018 Tuesday, February 6 Florida Association of Mortgage Professionals Central Florida Chapter 2018 Trade Show Hilton Orlando/Altamonte Springs 350 Northlake Boulevard Altamonte Springs, Fla. For more information, visit MyFAMP.org.

MARCH 2018 Sunday-Wednesday, March 4-7 Mortgage Bankers Association 2018 Mid-Winter Housing Finance Conference The Ritz-Carlton, Bachelor Gulch 130 Daybreak Ridge Road Avon, Colo.

For more information, visit MBA.org.

APRIL 2018 Thursday-Sunday, April 12-15 CONNECT 2018 Westin Buckhead Atlanta 3391 Peachtree Road Atlanta For more information, Visit CONNECT2018.org.

Sunday-Wednesday, April 15-18 Mortgage Bankers Association 2018 National Technology Conference in Mortgage Banking Conference & Expo Detroit Marriott at the Renaissance Center 400 Renaissance Drive, Renaissance Center Detroit For more information, visit MBA.org.

Tuesday-Wednesday, April 24-25 Mortgage Bankers Association National Advocacy Conference 2018 Capital Hilton 1001 16th Street NW Washington, D.C. For more information, visit MBA.org.

April 29-May 2 Mortgage Bankers Association Legal Issues & Regulatory Compliance Conference 2018 JW Marriott Los Angeles L.A. Live 900 West Olympic Boulevard Los Angeles For more information, visit MBA.org.

Monday-Wednesday, April 30-May 2 American Mortgage Conference 2018 Pinehurst Resort 80 Carolina Vista Drive Pinehurst, N.C. For more information, visit NCBankers.org.

MAY 2018 Thursday, May 10 Maryland Mortgage Bankers and Brokers Association Annual Conference 2018 Loews Annapolis Hotel 126 West Street Annapolis, Md. For more information, visit MMBBA.org.

Mortgage Bankers Association National Secondary Market Conference & Expo 2018 New York Marriott Marquis 1535 Broadway New York, N.Y. For more information, visit MBA.org.

AUGUST 2018 Wednesday-Saturday, August 15-18 Florida Association of Mortgage Professionals 2018 Annual Convention & Trade Show Walt Disney World Dolphin 1500 Epcot Resorts Boulevard Lake Buena Vista, Fla. For more information, visit MyFAMP.org.

OCTOBER 2018 Sunday-Wednesday, October 14-17 Mortgage Bankers Association 2018 Annual Conference & Trade Show Walter E. Washington Convention Center 801 Mt. Vernon Place NW Washington, D.C. For more information, visit MBA.org.

DECEMBER 2018 Saturday-Monday, December 8-10 NAMB National 2018 Caesars Palace 3570 South Las Vegas Boulevard Las Vegas For more information, visit NAMB.org.

Sunday-Wednesday, May 20-23 Mortgage Bankers Association Commercial/Multifamily Servicing & Technology Conference 2018 InterContinental Miami 100 Chopin Plaza Miami For more information, visit MBA.org.

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

Call 516.409.5555, ext. 4 to discover how to maximize your event coverage.

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Monday-Thursday, January 22-25 Mortgage Bankers Association Independent Mortgage Bankers Conference 2018 The Ritz Carlton, Amelia Island 4750 Amelia Island Parkway Fernandina Beach, Fla. For more information, visit MBA.org.

Sunday-Wednesday, February 11-14 Mortgage Bankers Association CREF/Multifamily Housing Convention & Expo Marriott Marquis San Diego Marina 333 West Harbor Drive San Diego For more information, visit MBA.org.

Monday-Tuesday, April 23-24 Mortgage Bankers Association 2018 State and Local Workshop Capital Hilton 1001 16th Street NW Washington, D.C. For more information, visit MBA.org.

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Thursday-Friday, January 18-19 NEXT 2018 InterContinental Dallas 15201 Dallas Parkway Addison, Texas For more information, visit NEXTMortgageEvents.com.

Tuesday-Friday, February 6-9 Mortgage Bankers Association National Mortgage Servicing Conference & Expo 2018 Gaylord Texan 1501 Gaylord Trail Grapevine, Texas For more information, visit MBA.org.

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CHURCH FINANCING

AUDIT DEFENSE AND RESPONSE

LENDERS COMPLIANCE GROUP 167 West Hudson Street - Suite 200 Long Beach | NY | 11561 | (516) 442-3456 www.LendersComplianceGroup.com The first full-service, mortgage risk management firm in the country, specializing exclusively in mortgage compliance.

Pioneers in outsourcing solutions for mortgage compliance.

Our Compliance Team Will: Leverage your existing employees.

Improve your productivity.

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AUDIT, MLO POLICIES and UPDATES Our fees are less than the big national firms

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

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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.

AUDIT TECHNOLOGY

ACES Risk Management (ARMCO) 1000 West McNab Rd. Pompano Beach, FL 33069 (800) 858-1598 www.armco.us

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Visit our website to pre-qualify and request a FREE QUOTE

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

ACES Risk Management delivers web-based audit technology solutions, as well as powerful data and analytics, to the nation’s top mortgage lenders, servicers, investors and outsourcing professionals. A trusted partner devoted to client relationships, ARMCO offers best-in-class quality control and compliance software that provides U.S. banks, mortgage companies and service providers the technology and data needed to support loan integrity, meet regulatory requirements, reduce risk and drive positive business decisions.

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

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WHOLESALE LENDERS

Direct Private Money and Bridge Lender specializing in Stated Loans in CA 866-668-2663 Send Scenarios to info@CalHardMoney.com 5 Park Plaza, 10th Floor Irvine, CA 92614 www..HomeBridgeWholesale.com m

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

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.

REVERSE MORTGAGES

WHOLESALE LENDERS

866-318-2981 Partners.ReverseFunding.com/LearnMore

REMN Wholesale www.remnwholesale.com 866-933-6342

Reverse Mortgage Funding LLC (RMF), one of the 5 Park Plaza, 10th Floor nation's top Home Equity Conversion Mortgage (HECM) Irvine, CA 92614 lenders, delivers industry-leading products, top-quality www..HomeBridgeWholesale.com m service, and advanced technology platforms to help originators grow their business by adding reverse mortHomeBridge Wholesale iis a national wholesale lender offeering Conventional, gages to their mix.

G J b product dR i Loans.

L W are comm mitted to providing Government, Jumbo, and Renovation We ng, unique product the highest value to our clients through competitive pricin Weofferings, offer line-of-credit, and home purchase art technology. superior customer refinancing service, and state-of-the-

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

options with flexible repayment for homeowners and buyers age 62+, plus service and support to help faciliNow Wholesale Sales Managers/Account Executives Nationwide tateHiring the transaction. send resumes to Marketing@HomeBrridge.com (NMLSPlease ID: #1019941)

WHOLESALE/CORRESPONDENT LENDERS

Greenbox Loans, Inc 3250 Wilshire Blvd., Suite 1900 Los Angeles, CA, 90010 (800) 600-9198 www.greenboxloans.com Greenbox Loans, Inc. is a proven leader in the Non-QM & Non-Prime lending environment offering bank statement programs, foreign national lending solutions, along with programs allowing for recent short sale, foreclosure, bankruptcy for borrowers as low as 500 Fico Score. Greenbox Loans, Inc. is a national lender offering its programs through a multiple of channels including Retail, Wholesale, and Investor Specialty division.

WHOLESALE LENDERS

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PRIVATE FINANCING

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

NationalMortgageProfessional.com

TagQuest www.tagquest.com 888-717-8980

HomeBridge Wholesale iis a national wholesale lender offeering Conventional, Government, Jumbo, Renovation We G J b and dR i Loans.

L W are comm mitted to providing the highest value to our clients through competitive pricin ng, unique product offerings, superior customer service, and state-of-the-art technology.

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WE Vis ’RE G it J oin RO Ang WI N elO ak. G! co m

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Get MORE with Angel Oak Mortgage Solutions. © Angel Oak Mortgage Solutions LLC NMLS #1160240, Corporate office, 980 Hammond Drive, Suite 850, Atlanta, GA, 30328. This communication is sent only by Angel Oak Mortgage Solutions LLC and is not intended to imply that any of our loan products will be offered by or in conjunction with HUD, FHA, VA, the U.S. government or any federal, state or local governmental body. This is a business-to-business communication and is intended for licensed mortgage professionals only and is not intended to be distributed to the consumer or the general public. Each application is reviewed independently for approval and not all applicants will qualify for the program. Angel Oak Mortgage Solutions LLC is an Equal Opportunity Lender and does not discriminate against individuals on the basis of race, gender, color, religion, national origin, age, disability, other classifications protected under Fair Housing Act of 1968. 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 and other classifications protected under the law. MS075 0817