National Mortgage Professional Magazine October 2014 by ambizmedia

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We are First Guaranty Mortgage CorporationÂŽ (FGMC), and we are 100% committed to our Correspondent, Wholesale and Retail origination channels. Together with our Capital Markets and Warehouse Lending Divisions, we provide a full spectrum of lending products and services nationwide. First Guaranty Mortgage CorporationÂŽ is an Approved Single

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Firstt Guaranty Firs Guaranty Mortgage Mortgage Co Corporation rporation is an FH FHA A Ap Approved proved Le Lending nding Inst Institution, itution, and an d is not not ac acting ting on behalf of or at the the di direction rection of HUD/FHA HUD/FHA or the the fe federal deral government. Firs government. Firstt Gu Guaranty aranty Mo Mortgage rtgage Co Corporation rporation Headquar Headquarters ters is lo located cated at 1900 1900 Gallows Gallows Road, Road, Suite Suite 800, 800, Tysons Tysons Corner, Corner, VA 22182 22182 (800) (800) 296-2275. 296-2275. Co Company mpany NM NMLS# LS# 29 2917. 17.

HUD -92 08 (8 --83 83) (HB41 15.1)

This information is solely for mortgage professionals and should not be provided to consumers or third parties. Information is accurate as of 8/21/14 and is subject to change without notice. First Guaranty Mortgage Corporation: Corporation: 1900 Gallows Road, Suite 800, Tysons Corner, VA 22182 (NMLS ID 2917) is licensed in the following states. For additional branch licensing information, please visit www.nmlsconsumeracwww.nmlsconsumeraccess.org. Alabama: Licensed by the Alabama Banking Department, Licensee No. 21332; Arizona: Licensed as an Arizona Mortgage Ba Banker nker under the Arizona Department of Financial Institutions, 4347 W. Bell Road, Suite 1, Glendale, AZ 85308, Licensee No. 0907158; 0907158; Arkansas: Combination Mortgage Mortgage Banker-Broker-Servicer, Licensee No. 11884; California: Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, Licensee No. 6037237; Colorado: Regulated by the Colorado Division of Real Est Estate; ate; Connecticut: Licensed by the Connecticut Department of Banking, Licensee No. 10162; Delaware: Licensed by the Delaware State State Bank Commissioner to engage in business in this this State under License No. No. 2403 (renewed through through 2014); District of Columbia: Licensed by the D.C. Department of Insurance, Securities and Banking, Licensee No. MLB2917; Florida: Florida Mortgage Lender Licensee No. MLD333; Ge Georgia: orgia: Georgia Residential Mortgage Licensee, No. 13967; Idaho: Licensed by the Idaho Department of Finance, Finance, Licensee No. MBL-5032; Illinois: Illinois Residential Mortgage Licensee, No. MB.0005484; Indiana: Indiana First Lien Mortgage Mortgage Lending License under the Indiana Department of Financial Institutions, Licensee No. 11058; Iowa: Licensed by the Iowa Division of Banking, Licensee No. 2004-0309; Kansas: Kansas-Licensed Mortgage Company, Licensee No. SL.0000212; Kentucky: Licensed by the Kentucky Kentucky Department of Financial Institutions, Licensee No. MC16957; Louisiana: Residential Mortgage Lending Licensee No. 1421; Maine: Supervised Lender Lender Licensee No. SLM5962; Maryland: Maryland Mortgage Lender Licensee No. 1731; Massachusetts: Massachusetts Mortgage Lender Licensee No. ML 2917; Michig Michigan: an: 1st Mortgage Broker/Lender/Servicer Registrant, Licensee No. FR0714; Minnesota: Minnesota Residential Mortgage Originator Originator License No. MN-MO-20399083. This is not an offer to enter into into an agreement under Minnesota law. Any such offer may only be made pursuant to the requirements in Minn. Stat. Section 47.206 (3) and (4); Mississippi: Licensed by the Mississippi Department of Banking and Consumer Finance, Licensee No. 2917; Missouri: Licensed by the Missouri Division of Finance, Licensee No. 14-2178; Montana: Licensed Mortgage Lender under under the Division of Banking & Financial Institutions, Licensee No. N 8453; Nebraska: Nebraska Mortgage Banker Licensee No. 1470; Nevada: Licensed by the Nevada Division of Mortgage Lending to make loans secured by liens on real property, Licensee No. 1047, First Guaranty Mortgage Corporation, 1489 West Warm Springs Springs Road, Suite 215, Henderson, NV 89014, Phone Phone No. 702-454-4212; New New Jersey: Licensed by the New Jersey Department Department of Banking and Insurance, Licensee No. 9700530; New New Mexico: New New Mexico Mortgage Loan Company License No. 01085; New York: Licensed Mortgage Banker - N.Y.S. Banking Department, Licensee No. B500800 (d/b/a (d/b/a FGMC In Lieu of True Corporate Name First Guaranty Mortgage Mortgage Corporation); North Carolina: North North Carolina Mortgage Lender Licensee Licensee No. L-100362; North Dakota: Licensed in North Dakota as First Guaranty Mortgage Corporation dba FGMC, Licensee No. MB101924; Ohio: Ohio Mortgage Broker Act Mortgage Banker Exemption No. MBMB.850010.000; Oklahoma: Oklahoma Mortgage Lender Licensee No. ML002709; Oregon: Oregon Mortgage Lending Licensee No. ML-2634; Pennsylvania: Licensed by the the Pennsylvania Department of Banking Banking and Securities, Licensee No. 20768; South Carolina: Carolina: South Carolina Mortgage Lender/Servicer Licensee No. MLS-2917; South Dakota: Licensed by the South Dakota Department of Labor and Regulation, Division of Banking, Licensee No. ML.05077; Tennessee: Tennessee Department of Financial Financial Institutions Mortgage Licensee No. 109451; Texas: Licensed by the Texas Department Department of Savings and Mortgage Lending; Utah: Utah Mortgage Entity Licensee No. 5491155; Vermont: Licensed by the Vermont Department of FFinancial inancial Regulation, Licensee No. 6644; Virginia: Licensed by the Virginia State Corporation Corporation Commission as a Lender and Broker, Licensee No. MC-436; Washington: Washington Consumer Loan Company, Licensee No. CL-2917; West Virginia: West Virginia Mortgage Lender Licensee No. ML-20742; Wis Wisconsin: consin: Licensed Wisconsin Mortgage Banker, Licensee No. 26835BA; 26835BA; Wyoming: Wyoming: Licensed by the Wyoming Division of Banking, Licensee No. 1831.

NationalMortgageProfessional.com

n National Mortgage Professional Magazine n OCTOBER 2014

Visit www.Path2Buy.com

Visit www.the15minutesalescall.com

table o

N A T I O N A L

RESPA/TILA Integration Part I: Overview and Loan Estimate By Jonathan Foxx

O C T O B E R

34 First-Time Homebuyers Enjoy the Best Opportunities By Phil Hall

2 0 1 4

M O R T

V O L

A SPECIAL FOCUS ON “THE FUTURE OF MORTGAGE BANKING”

Tomorrow’s Mortgage Space By Phil Hall ................................72 Innovation and Adaptation as Keys to Success in a Dynamic Market By Brian Simon ............................................80 The Ayes Have It By Greg Holmes..............................................81 Profit-Driven Lender Transformation Begins With the Customer By Christina Pham ......................................83 Changing of the Guard By Scott K. Stucky................................85 What Bill Murray Can Teach You About Big Data By Jason Kelley ............................................................................87

40 Lykken on Leadership: how to Future-Proof Your Culture By David Lykken

Breaking Bad Mortgage Trends By Chris Edgington Sr. ..........88 Dissecting the Cloud LOS Debate By John Mickle ..................89 Become a Banker? KMN. By Eric Weinstein..............................90 Pipeline Management By Mark Wayshak ..................................91

FEATURES Vendor Management Rules By Andrew Liput ..............................8 The Elite Performer: Organize to Realize By Andy W. Harris, CRMS ..............................................................8 How Strong Is Your Corporate Security Policy? (Part II) By Laura Burke..............................................................................10 The Greatest Union of All Time..................................................16 Top Tips for Handling Inbound Leads By K. Justin Restaino ..18

44 How Can the Wealth Building Home Loan Reanimate the Mortgage Market By Phil Hall

92 NMP Mortgage Professional of the Month: David H. Stevens, President and CEO of the Mortgage Bankers Association By Phil Hall

NAMB Perspective ......................................................................20 HUD Promise Zone Program Draws Mixed Reviews By Phil Hall ....................................................................................26

V I S I T Company

Web Site

O U R

A Page

AllRegs.............................................................. www.allregs.com ..........................................................82 American Financial Resources ............................ www.afrwholesale.com ......................................Back Cover BetterLoanOfficers.com ...................................... www.betterloanofficers.com ..........................................33 Boomerang........................................................ www.boomerangprospecting.com ..................................67 Brokers Compliance Group.................................. www.brokerscompliancegroup.com ................................104 CallFurst.com ...................................................... www.callfurst.com ............................................................86 Carrington Mortgage Services, LLC ...................... www.carringtonwholesale.com ..............................45 & 79 Continental Home Loans, Inc. ............................ www.continentalhomeloans.com ......................................5 Credit Plus, Inc. ................................................ www.creditplus.com ..............................................19 & 84 Document Systems, Inc./DocMagic ...................... www.docmagic.com ..........................................7, 39 & 55 Easy Mortgage Apps............................................ www.easymortgageapps.com ..........................................83 Fast Forward Stories .......................................... www.fastforwardstories.com ..........................................41 First Guaranty Mortgage Corp. ............................ www.fgmc.com ..............................Inside Front Cover & 40 Flagstar Bank .................................................... www.wholesale.flagstar.com ..........................................17 HomeBridge Wholesale ...................................... www.homebridgewholesale.com ....................................11 JMAC Lending .................................................... www.jmaclending.com ..................................................31 Listing Booster .................................................. www.listingbooster.com ................................................71 Lykken On Lending ............................................ www.lykkenonlending.com ............................................65 Maverick Funding Corp....................................... www.maverickfunding.com ............................................47 NAMB+ ............................................................ www.nambplus.com ......................................................97 NAPMW ............................................................ www.napmw.org ..........................................................59

f contents

T G A G E

L U M E

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

N U M B E R

1 0

are you

Mortgage Marketing Compliance By Brent Emler ....................32

nominated

Hope Is Not a Plan By Rick Floyd ..............................................36

coming in december 2014

Winning With Technology By Garett M. Kolb ............................30

Prepared for Takeoff By Ray Hagan ..........................................42 NMPâ&#x20AC;&#x2122;s Economic Commentary By Dave Hershman ................46 Tales From the Closing Table By Andrew Liput ........................48 Social Media: Marketing in the Year We Actually Live In By Brian Karoff ..............................................................................50 Credit Scores and Reporting Issues Making News By Terry W. Clemans ....................................................................56 Legal and Industry Developments By Laurie Spira ..................58 Just Ask Eric & Laura By Eric Weinstein & Laura Burke ............60 Whatâ&#x20AC;&#x2122;s iPhone 6 Got to Do With Mortgages? By Matthew Dunn Ph.D.................................................................62 Do You Have a Strategy to Generate Purchase Loans? By Tom Ward ................................................................................64 The Long & Short: The Business of Short Sales By Pam Marron ............................................................................64 Taking the Lead: Business Intelligence By Jonathan Blackwell ..................................................................68 How to Keep Sales Strong Despite Rising Rates By Bubba Mills ..............................................................................70

COLUMNS New to Market..............................................................................12 News Flash: October 2014 ..........................................................14 Heard on the Street ....................................................................38 NMP Resource Registry..............................................................98 NMP Calendar of Events ..........................................................103

D V E R T I S E R S Company

Web Site

Page

NAWRB ............................................................ www.nawrbevents.com ..................................................66 New England Mortgage Expo .............................. www.nemortgageexpo.com ............................................61 Paramount Residential Mortgage Group, Inc. ...... www.prmg.net ..........................15, 69 & Inside Back Cover Path2Buy .......................................................... www.path2buy.com ................................................1 & 74 PB Financial Group Corp..................................... www.pbfinancialgrp.com ..............................................81 Plaza Home Mortgage Inc. ................................ www.plazahomemortgage.com ......................................78 Radian Guaranty ................................................ www.radian.biz ............................................................43 REMN (Real Estate Mortgage Network) ................ www.remnwholesale.com ..............................................13 Residential Home Funding Corp. ........................ www.rhfbranch.com ......................................................63 Reverse Mortgage Solutions, Inc. ........................ www.partners.rmsnav.com ............................................75 Ridgewood Savings Bank .................................. www.ridgewoodbank.com ..............................................77 Secure Settlements Inc. ...................................... www.securesettlements.com ..........................................37 TagQuest .......................................................... www.tagquest.com ........................................................49 The Bond Exchange............................................ www.thebondexchange.com ..........................................46 The National Real Estate Post.............................. www.thenationalrealestatepost.com ..........................72, 90 Titan List & Mailing Services, Inc. ........................ www.titanlists.com ..........................................................9 UAMP................................................................ www.uampexpo.com ....................................................76 United Northern Mortgage Bankers, Ltd............... www.unitednorthern.com ..............................................73 United Wholesale Mortgage ................................ www.uwm.com/younited ............................26, 27, 56 & 57 Urban Financial of America ................................ www.ufawholesale.com ..................................................23

We are seeking nominations from our readers for National Mortgage Professional Magazine's "40 Under 40" feature, slated to appear in our December 2014 edition. Anyone who is under the age of 40 and has had a major impact on the industry can qualify for this feature. This could be through innovation, association participation, sales force automation, community activism, management techniques, technology or any other significant method that has influenced our industry. We would need a short, three-line bio on the nominee, along with a color photo and company contact info to complete the profile. To nominate yourself or someone else, visit https://nmpmag.wufoo.com/forms/nmps-40-under-40-2014/.

NMP Media Corp. 1220 Wantagh Avenue Wantagh, New York 11793-2202 p 516.409.5555 f 516.409.4600 e advertise@NMPMediaCorp.com w www.NationalMortgageProfessional.com

OCTOBER 2014 Volume 6 • Number 10

FROM THE

Is There a Future in Mortgage Banking?

1220 Wantagh Avenue • Wantagh, NY 11793-2202 Phone: (516) 409-5555 • Fax: (516) 409-4600 Web site: NationalMortgageProfessional.com

This month, National Mortgage Professional Magazine focuses on “The Future of Mortgage Banking.” It is appropriate that in connection with our focus this month, thousands in the mortgage banking industry will converge and network on Las Vegas at the Mortgage Bankers Association 2014 Annual Convention. By definition, the “Future” is defined as: “What will happen in the time after the present. Its arrival is considered inevitable due to the existence of time and the laws of physics. Due to the apparent nature of reality and the unavoidability of the future, everything that currently exists and will exist can be categorized as either permanent, meaning that it will exist for the whole of the future, or temporary, meaning that it won’t and thus will come to an end.” This definition, borrowed from Wikipedia, clearly defines what the future of mortgage banking will be. Simply put, no one knows. This month, our elite group of editorial contributors has taken a stab at predicting the future of our industry in a number of articles in this edition; however, their ability to be a clairvoyant and exactly predict that future is highly unlikely. Remnants of the past in the mortgage banking industry are sometimes considered as the beacons to correct ones course in the future. If life was only that simple, history could be used to predict the future. We have regulatory oversight in place that didn’t exist years ago via the Consumer Financial Protection Bureau (CFPB) and the Dodd-Frank Act. While “past” lessons and experiences are used to formulate future regulations that will hopefully guide the future of our industry, they cannot be certain that the “fixes” being put in place will make things better as we move forward. In fact, as we’ve often seen, the “unintended consequences” of these purported fixes sometimes often exceed the problem originally intended to eradicate. As the mortgage professional community gathers in Vegas at the MBA Annual Convention, I think there are certain things we can predict in the future. This industry went through some of the toughest adjustments in our economy a few years back, and yet a hardy group of those who continue to thrive have weathered it all until today. Their resilience is testimony to the strength of the men and women in the mortgage industry. The ability to learn to adapt to an ever-changing regulatory and compliance environment combined with massive changes to underwriting criteria is the foundation of those who proudly continue in the mortgage industry to serve and provide direction to our nation’s consumers who rely on their housing finance expertise. This industry has been blessed with some of the strongest talent in the nation, and their ability to adapt to change and move forward in today’s regulatory environment is simply an indication that the future of mortgage banking is safe and sound now, as it will continue to be for years to come. So the next time you run into a fortune teller and they ask if they can read your palm, ask them if the building they were in has a mortgage. If it does, tell them you know their future. The next payment is due on the first of the month! Sincerely,

STAFF Eric C. Peck Editor-in-Chief (516) 409-5555, ext. 312 ericp@nmpmediacorp.com

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

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

Beverly Bolnick National Sales Manager (516) 409-5555, ext. 316 beverlyk@nmpmediacorp.com

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

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

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

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

ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact National Account Executive Beverly Koondel at (516) 409-5555, ext. 316 or e-mail beverlyk@nmpmediacorp.com.

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

SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail orders@nmpmediacorp.com or visit www.nationalmortgageprofessional.com. Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600.

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publisher’s desk

Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the authors alone and do not imply the opinion or endorsement of NMP Media Corp., or the officers or members of National Association of Mortgage Brokers and its State Affiliates (NAMB), National Association of Professional Mortgage Women (NAPMW), National Consumer Reporting Association (NCRA) and/or other state mortgage trade associations. Participation in NAMB, NAPMW, NCRA, and/or other state mortgage trade associations events, activities and/or publications is available on a non-discriminatory basis and does not reflect the endorsement of the product and/or services by NMP Media Corp., NAMB, NAPMW, NCRA, and other state mortgage trade associations. National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, and/or other state mortgage trade associations do not make any misrepresentations or warranties concerning the regulatory and/or compliance aspects of advertisers, products or services and/or the editorial content contained in NMP Media Corp. publications. National Mortgage Professional Magazine and NMP Media Corp. reserve the right to edit, reject and/or postpone the publication of any articles, information or data.

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE’S

EDITORIAL CONTRIBUTORS Featured Editorial Contributors Jonathan Foxx

Phil Hall

Pam Marron

Editorial Contributors Jonathan Blackwell

Andy W. Harris, CRMS

Laura Burke

Dave Hershman

Terry W. Clemans

Andrew Liput

Matthew Dunn Ph.D.

David Lykken

Chris Edgington Sr.

Brent Emler

Garett M. Kolb

K. Justin Restaino

Rick Floyd

John Mickle

Brian Simon

Ray Hagan

Bubba Mills

Scott K. Stucky

Greg Holmes

Christina Pham

Tom Ward

Brian Karoff

Andrew Ritschel

Mark Wayshak

Jason Kelley

Laurie Spira

Eric Weinstein

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n National Mortgage Professional Magazine n OCTOBER 2014

NAMB The Association of Mortgage Professionals

National Association of Professional Mortgage Women

2701 West 15th Street, Suite 536 l Plano, TX 75075 Phone: (972) 758-1151 l Fax: (530) 484-2906 Web site: www.namb.org

2014-2015 NAPMW National Board of Directors

NAMB 2014-2015 Board of Directors OFFICERS John Councilman, CMC, CRMS—President AMC Mortgage Corporation 10136 Avalon Lake Circle l Fort Myers, FL 33913 Phone: (239) 267-2400 l E-mail: jlc@amcmortgage.com Rocke Andrews, CMC, CRMS—President-Elect Lending Arizona LLC 3531 North Pantano Road l Tucson, AZ 85750 Phone: (520) 886-7283 l E-mail: randrews@lendingarizona.net Fred Kreger, CMC—Vice President American Family Funding 28368 Constellation Road, Suite 398 l Santa Clarita, CA 91350 Phone: (661) 505-4311 l E-mail: fred.kreger@affloans.com Rick Bettencourt, CRMS—Secretary Mortgage Network 300 Rosewood Drive l Danvers, MA 01923 Phone: (978) 777-7500 l E-mail: rbettencourt@mortgagenetwork.com Andy W. Harris, CRMS—Treasurer Vantage Mortgage Group Inc. 15962 SW Boones Ferry Rd., Ste 100 l Lake Oswego, Oregon 97035 Phone: (503) 496-0431, ext. 302 E-mail: aharris@vantagemortgagegroup.com

Donald J. Frommeyer, CRMS—Immediate Past President/NAMB CEO American Midwest Bank 200 Medical Drive, Suite C-2A l Carmel, IN 46032 Phone: (317) 575-4355 l E-mail: donald.frommeyer@gmail.com

OCTOBER 2014 n National Mortgage Professional Magazine n

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DIRECTORS

P.O. Box 451718 l Garland, TX 75045 Phone: (800) 827-3034 Web site: www.napmw.org

National President Christine Pollard (607) 226-1046 president@napmw.org

Vice President–Western Region Anna Mackovska (323) 321-2222 westernregion@napmw.org

President-Elect Kelly Hendricks (314) 398-6840 preselect@napmw.org

Secretary Cynthia Nutter (360) 258-2206 natsecretary@napmw.org

Vice President–Central Region Judy Alderson (918) 250-9080, ext. 300

Treasurer Kimberly Rozell, CME (607) 229-5008 nattreasurer@napmw.org

Vice President–Eastern Region Cathy Kantrowitz (845) 463-3011 easternregion@napmw.org

Parliamentarian Dawn Adams, GML, CMI (607) 329-4622 dawnvadams@live.com

Vice President–Northwestern Region William “Bill” Sanderson, CME, CMI (360) 713-9264

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

2013-2014 Board of Directors & Staff

Kay A. Cleland, CMC, CRMS KC Mortgage LLC 2041 North Highway 83, Unit CPO Box 783 l Franktown, CO 80116 Phone: (720) 670-0124 l E-mail: kay@kcmortgagecolorado.com

Maureen Devine President (413) 736-4511 mdevine@strategicinfo.com

William Bower Resident Screening Committee Liaison (888) 316-4242 wbower@cicreports.com

John H.P. Hudson, CRMS Premier Nationwide Lending 1202 W. Bitters Road, Bldg. 1, Ste. 1205 San Antonio, TX 78216 Phone: (817) 247-4766 l E-mail: jhudson@pnlending.com

Mike Brown Vice President/Treasurer (801) 925-6691, ext. 3777 mike.brown@ncogroup.com

Judy Ryan Strategic Alliance Committee Chair (410) 747-9551 judy.ryan@creditplus.com

Daphne Large Ex-Officio (901) 259-5105 daphnel@datafacts.com

Sharon Bieszk Director (262) 542-1700 sbieszk@wititle.com

Nancy Fedich Conference Committee Chair (908) 813-8555, ext. 3010 nancy@cisinfo.net

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

Julie Wink Education Committee Liaison (901) 259-5105 julie@datafacts.com

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

Tom Conwell Legislative Committee Liaison (800) 445-4922, ext. 1010 tconwell@credittechnologies.com

Terry Clemans Executive Director (630) 539-1525 tclemans@ncrainc.org

Renee Erickson Membership & Elections Chair (866) 932-2715 renee.erickson@acranet.com

Jan Gerber Office Manager & Member Services (630) 539-1525 jgerber@ncrainc.org

Olga Kucerak, CRMS Crown Lending 328 West Mistletoe l San Antonio, TX 78212 Phone: (210) 828-3384 l E-mail: olga@crownlending.com David Luna, CRMS Mortgage Educators and Compliance 947 South 500 E, Suite 105 l American Fork, UT 84003 Phone: (877) 403-1428 l E-mail: david@mortgageeducators.com Linda McCoy, CRMS Mortgage Team 1 Inc. 6336 Piccadilly Square Drive l Mobile, AL 36609 Phone: (251) 650-0805 l E-mail: linda@mortgageteam1.com Valerie Saunders RE Financial Services 13033 West Lindburgh Avenue l Tampa, FL 33626 Phone: (866) 992-0785 l E-mail: valsaun@gmail.com John Stevens, CRMS Bank of England d/b/a ENG Lending 11650 South State Street, Suite 350 l Draper UT 84062 Phone: (801) 427-7111 l E-mail: jstevens@englending.com

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www.DocMagic.com I 1.800.649.1362

Vendor Management Rules Also Cover Real Estate Attorneys By Andrew Liput

OCTOBER 2014 n National Mortgage Professional Magazine n

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For years, real estate closing work has been the “bread and butter” of many small law practices. Representing buyers and sellers in sales and mortgage closing transactions can be a lucrative practice area, and because there are no significant rules and training or practice barriers as for example complex criminal defense or tax work, it has helped many an attorney pay off their law school loans. That perception may be changing with the wide adoption of new vendor management requirements for third parties. There is no question that the third party service provider management directives of the Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC) and others cover attorneys who handle mortgage proceeds and closing documents in connection with residential real estate transactions. There is no exemption for lawyers performing these functions nor does state bar licensing requirements satisfy the regulatory mandates for banks. Lenders must comply with these vendor management rules or face unacceptable risks. Accordingly real estate lawyers are being confronted more often with requests by lenders that attorneys submit to vendor management or “vetting” processes to meet regulatory expectations. These processes may be internal to the bank, or they may be outsourced to third party vendor management firms such as the one we operate. Why are attorneys covered? Because they have access to a lender’s funds, borrower funds and critical loan documents. Quite frankly a bad attorney has the means and the method to cause serious financial harm very quickly. The recent disclosure that a prominent attorney and his law firm in Georgia were alleged to have stolen as much as $30 million in trust proceeds over several years dramatically highlights this point. Lawyers who handle real estate closings may have access to a borrower’s complete personal and financial history, usually contained in the closing documents, especially the RESPA Form 1003 mortgage application. The 1003 sets forth a consumer’s identity information (including Social Security Number), address, workplace history, bank and asset information. Other closing documents may detail family relationships, marriage and divorce information, and similar personal data. Attorneys, more than any other discipline that makes up the closing professional industry are generally the most educated, most trained, and most supervised group. However, even the state bar associations are largely reactionary to attorney malpractice and criminal behavior. They simply do not have the technology, labor force and resources to engage in the type of ongoing risk evaluation and reporting that the government expects to ensure proper consumer protection. The news about vendor management is coming slowly to many lawyers. Real estate attorneys generally are contract and real property law specialists. They know the ins and outs of the real estate transaction but virtually nothing about the mortgage process, as well as the regulations lenders must follow to ensure a safe transaction for the consumer. Today however, lawyers conducting closings need to know a lot more about the process, including disclosures, closing instructions, signs of mortgage fraud and vendor management rules. In the end, the old way of doing business as a real estate closing attorney is changing and changing fast. There are good reasons for these changes, and attorneys are encouraged to study the applicable regulations and statutes so that they can better understand why they may be asked to become “vetted” before they close their next residential real estate transaction. Andrew Liput has been a corporate, real estate and banking attorney for more than 25 years He is the founder, CEO and president of SSI, the first data intelligence and risk analytics firm to offer specialized vendor management services addressing settlement agent risk to mortgage lenders and banks nationwide. He can be reached by e-mail at aliput@securesettlements.com.

SPONSORED EDITORIAL

THE

elite performer Organize to Realize By Andy W. Harris, CRMS

Recently, I had a colleague visit my office and they “In a sense, noticed the cleanliness of my desk and how organ- clutter is the end result of procrastination.” ized everything was. To my surprise, they made the comment that I must not —Jeff Campbell be very busy from how un-cluttered things were, but in reality I was absolutely buried with work. At first, I was a little confused, but then I realized that the only way I was able to keep up with the work demands and new business was as a result of having a clean and organized desk. We had the exact opposite perspective. Their perspective seemed interesting to me and I was curious what my desk was supposed to look like. This really got me thinking about how different each person is with their level of organization and how this may impact their efficiency in the workplace or even at home. I strongly believe that being organized leads to a greater level of success in all areas of life, but what really defines one person being more organized over another? If you were to ask people in my office about my organizational habits, they would likely tell you I have O.C.D. or “Obsessive Compulsive Disorder.” I prefer to consider it “Organized Controlled Desk.” While it drives me nuts to see those who have a cluttered work-space as I personally believe it looks unprofessional, does this really lead to less productive results? That’s a good question, but I would argue that I have never seen cleanliness and order lead to a less productive outcome versus the alternative. While many get busy and feel they don’t have the time to organize, wouldn’t that be the only effective way to complete one task fully and move onto the next? Brother International Corporation conducted a survey to determine how disorganization affects office productivity and how workers viewed themselves, as well as others regarding disorganization. The survey findings indicate that the cost of workplace disorganization may go far beyond just monetary loss. Responses gathered from nearly 800 U.S. employees hint that the search for lost and misplaced materials—which accounts for nearly 38 hours, or approximately one work week annually, per employee—may have a profound impact on professional perception, productivity and morale. In addition, the survey found that the costs associated for full-time employees looking for misplaced items in the office tops $89 billion annually. Here is the overview: l The estimated annual dollars spent on looking for misplaced items in the office is $89,840,657,069 among full-time office professionals. l Estimated 38 working hours (or close to one work week) per person each year are lost as a result of looking for misplaced items in the office. l Sixty-six percent of office workers having spent up to 30 minutes of time during a typical work week looking for things they have misplaced around their office, a major contributing factor for lost time in the office. l Forty-six percent of office workers have lost one of the following items in the past year (a file folder, mobile phone, calculator, flash or memory drive, a briefcase, suitcase, or luggage, lap top computer, or a PDA). l Close to four in 10 (37 percent) of office workers have gone into a work meeting feeling unprepared. continued on page 50

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How Strong Is Your Corporate Security Policy? (Part II)

PAYROLL FRAUD IS REAL By Laura Burke A security policy should cover rules for remote access; the purpose of the remote access rules is to define standards for connecting to the company’s network from any host. These standard rules are implemented to minimize and /or prevent exposure, damage or risk from results of unauthorized use of company’s system and networks. Physical security is imperative, as you must protect all assets, hardware and software from damage. Floods, power outage and theft are three most common threats encountered. Lock up your hardware and software. Have a policy in place to allow employees access to additional software than what is on their computer. Pay close attention to laptops, set policy procedures and guidelines for use of laptops, and make sure all laptops have passwords, screen savers and encryption of the files they hold.

Be prepared Create a back-up system to retrieve online files should the office be impacted by a natural disaster. Does it need revamping? Do you have a contingency plan for other types of crisis

situations, such as a sudden illness of a critical employee, a lawsuit against your firm, or the departure of a key client? No system is completely secure. Copy important files onto a removable disc or an external hard drive and store it in a safe place. If your computer is compromised, you’ll still have access to your files. Regular auditing of systems, books, payroll and financial statements is an important role in defining corporate weaknesses and security risks. Hiring an outside auditor is highly recommended. I would suggest an outside company comes in at minimum once a year, if within the company’s budget, every six to nine months. This will alleviate some security breaches, notice potential fraud situations and mitigate risks. As stated earlier, there is no sure fire way to be 100 percent safe. An auditor can find ghost employees, mismanaged funds and even embezzlement! An auditor can also find nothing, which is a good thing! Matthew Garrett, contributing writer for Forbes noted, “Payroll fraud is real. There are two common types of payroll fraud, the first being timecard falsification and the second most common type of payroll fraud is the ‘ghost employee.’” According to the Association of Certified Fraud Examiners, it’s the number one

source of accounting fraud and employee theft. Check out these statistics: l Payroll Fraud happens in 27 percent of all businesses l Payroll fraud occurs nearly twice as often (14.2 percent) in small organizations with less than 100 employees than in large ones (7.6 percent)

Safely removing old equipment is important Valuable information can be retrieved from copiers, hard drives, fax machines, laptops and other technical devices, having a policy that details proper disposal will reduce the likely hood of someone gaining valuable information from dumpster diving. Hanging on to old hardware and software maybe getting in the way of productivity … increasing the likelihood of a risk. Remove it and replace it properly. Many complain of the cost of running IT departments, and of other security related costs, but once a company’s system goes down, it’s an expensive proposition to return it to normal. Homeland Security studies show that cyberthreats constantly evolve with increasing intensity and complexity. Organizations will face a host of cyberthreats, some with severe impacts that will require security measures that

go beyond compliance. For example, according to a study done in 2011 by Ponemon Institute, the average cost of a compromised record in the U.S. was $194 per record and the loss of customer business due to a cyber-breach was estimated at $3 million. A new insurance has emerged— cyber risk insurance is a new benefit to be considered. It is an insurance policy that protects against losses to information assets. A strong security policy could earn a discount on cyber insurance rates. Many of the insurance questions for an application can be answered via your security policy already in place. Paying for security now can save thousands later. It is stated that a company can pay thousands of dollars per minute to fix an infected or breached system. How well is your company protected? Laura Burke, CFE, EA, MBA, MS MIS (2015) is an author and trainer with 20plus years of experience in the mortgage arena. As a Certified Fraud Examiner, Laura uses her expertise in the mortgage arena, combined with special forensic knowledge to assist corporations with their security policies and forensic audits. She may be reached by e-mail at lauralynnburke@gmail.com.

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United Wholesale Mortgage Upgrades Its Broker Tools

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United Wholesale Mortgage (UWM) has announced the formation of a new Marketing Center and has also completely reskinned its mobile app, UMobile. UWM’s Marketing Center is a completely free benefit for its partners that allows brokers and correspondents to easily create customized, professionally developed marketing flyers for borrowers, real estate agents, and title companies. Enhancements include integration with UWM’s broker portal EASE, social media marketing, e-mail marketing, high resolution files, profile saves for personalized branding and more. “During a period when communication is key, UWM has created one of the most effective tools available with the UWM Marketing Center,” said Eric McKinley, president of Home Place Mortgage. “It enables us to provide professional marketing material to promote the real estate agents, the products, and our loan officers. It’s a huge hit with the real estate agents.” UMobile, which was launched in February of this year, is UWM’s broker mobile app for Apple and Android handheld devices. As a pre-planned phase two rollout, the look and feel of the app’s graphical user interface (GUI) was changed for aesthetics, ease of navigation, and to create a captivating user experience. “We’re constantly innovating and striving to provide the best service, tools and programs to our brokers and correspondents to make them the most successful originators in wholesale lending,” said Justin Glass, UWM’s chief digital officer. “One of the six pillars of our corporate constitution is ‘Continuous Improvement is Essential to our Long-Term Success.’ The enhancements to our Marketing Center and UMobile demonstrates our commitment to our partners and our company tagline Lending Made Easy.”

UFA Introduces New Jumbo Reverse Mortgage Product

has introduced its HomeSafe proprietary reverse mortgage. Through HomeSafe, loan proceeds of up to $2.25 million are available, compared to traditional reverse mortgages or Home Equity Conversion Loans (HECMs), which currently have legislated maximum available loan proceeds of $469,125. “Now homeowners with significant value in their homes have a reverse mortgage option that may afford them more loan proceeds, and potentially a greater amount of cash up front, than a HECM product. Ultimately, HomeSafe can give borrowers an opportunity to tap into more of that property value when they need it,” said Steve McClellan, president of UFA. As with traditional reverse mortgages or HECMs, HomeSafe can be used by homeowners or homebuyers age 62 and older to leverage home equity for long-term retirement planning. While borrowers can use the proceeds however they choose, HomeSafe may be well suited to extinguishing existing mortgage debt, making improvements or modifications to the home to accommodate changing needs, supplementing medical and in-home care coverage, or buying a home. “UFA has been a trusted resource for traditional HECM reverse mortgages for more than a decade,” McClellan said. “With HomeSafe, now we can meet the needs of even more consumers through a compelling and competitive proprietary reverse mortgage product.”

eValuation ZONE aunches New USPAP-Compliant eVal 1.0 National valuation services provider, eValuation ZONE Inc., has announced the launch of their new Uniform Standards of Professional Appraisal Practice (USPAP)compliant product eVal 1.0, a hybrid valuation report utilized for a variety of programs such as HELOCs, REOs, as well as purchases and refinances for non-agency and portfolio programs.

“We are very excited to present the eVal Hybrid 1.0, one of the first forms of its kind,” said Luke Tomaszewski. “The new hybrid form is poised to revolutionize the way we approach appraisal forms. Putting forth a more forward thinking approach to appraisals geared to the client’s needs, the borrower’s pocket book, and the appraiser’s valuable time.” The next generation in valuation forms is here, now. The eVal 1.0 assists the lender in closing more loans faster and at a lower out-of-pocket price point. This revolutionary form has everything a traditional drive-by has, combined with aspects of a typical property condition report (PCR) but has eliminated the unnecessary information into one easy to understand, up-to-date, USPAP compliant, cost efficient report. “Global DMS is committed to supporting our clients and their innovative ideas,” said Vladimir Bien-Aime, president and CEO of Global DMS. “We support forward thinking companies that address current and relative needs within today’s market. We are very proud to be working with Luke and eValuation ZONE.”

New PreApprovalLetter.com App Streamlines the Pre-Approval Process

PreApprovalLetter.com has announced the launch of a one-stop homebuying service that streamlines and automates the pre-approval process. The pre-homebuyer can now instantly have a personalized home loan budget and tailored analysis, knowing exactly how much they qualify for before they begin their home hunting process. PreApprovalLetter.com (PAL) has developed an algorithm for service to homebuyers, real estate agents and mortgage lenders. Designed by mortgage underwriting experts, the PAL sys-

tem interviews homebuyers and verifies financial data for a fast, accurate and free assessment of a buyer’s homebuying power. “We believe that knowledge is power. Giving Americans such a tool will better equip them to steer away from taking on risky debt and towards finding the home of their dreams,” said PreApprovalLetter.com CEO Jorge Touzet. Homebuyers may view their borrowing limits on their secure dashboard; and are presented with a home search tool, which displays a gallery of properties that fit their home budget and qualifying scenarios. Buyers and real estate agents can cross-reference MLS listed properties vs. a homebuyer’s qualifying data and know whether or not a homebuyer qualifies for a particular property. PreApprovalLetter.com frees subscribed agents to focus their time on finding listed homes for which a buyer can afford and a mortgage lender would comprehensively give their stamp of approval. “PAL’s mission is to educate and empower the homebuyer and real estate agent with mortgage knowledge so they can ‘Know Their Buying Power,’” said Touzet.

Ellie Mae Enhances Encompass Mortgage Management Solution

Ellie Mae has announced a major new release of its Encompass mortgage management solution. The new release includes more than 300 enhancements designed to promote compliance, loan quality and efficiency. Encompass now supports tests and eligibility determinations for the recently changed Veterans Administration Qualified Mortgage (VA QM) rule. In addition, the borrower’s electronic loan folder will tie borrower data and documents to their QM eligibility. The Ellie Mae Total Quality Loan

continued on page 18

Urban Financial of America LLC (UFA)

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n National Mortgage Professional Magazine n OCTOBER 2014

EWSFLASH l OCTOBER 2014 l NMP NEWSFLASH l OCTOBER 2014 l NMP NEWS MBA Opens Doors Raises $30,000-Plus During Fundraising Campaign

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The MBA Opens Doors Foundation has announced that it had raised more than $31,000 during its three-month “92 Days of Summer” fundraising campaign. The Foundation is MBA’s philanthropic entity dedicated to providing financial assistance to families with a critically ill or injured child by awarding grants toward a mortgage or rental payment. The MBA Opens Doors Foundation is a 501(c)(3) organization and all contributions are tax deductible. “Our ’92 Days of Summer’ fundraising event provided members of the real estate finance industry with a great philanthropic opportunity, and they responded in a big way,” said Debra Still, Chairman of the MBA Opens Doors Foundation. “With more than $31,000 donated in only three months, the men and women who work every day to put Americans in the home of their dreams also showed they are up to the challenge of helping families with critically ill children stay in theirs. Their generosity provides families critical financial support during a tremendously stressful and emotional period in their lives.” With MBA’s in-kind donations for all of the Foundation’s operating costs, Opens Doors is able to pass 100 percent of the donations it receives to the families it supports. The Foundation’s ongoing relationship with Washington, D.C.’s Children’s National Health System provides a partner healthcare organization to help identify potential grant recipients.

Gen X-ers More Likely to be Underwater Than Millenials and Baby Boomers Generation X homeowners are far more likely to be underwater

on their mortgage than millennial and Baby Boomer homeowners, a generational block that could limit the market for years, according to the second quarter Zillow Negative Equity Report. The overall national negative equity rate fell to 17 percent in the second quarter, with more than 8.7 million homeowners with a mortgage owing more than their home was worth. Approximately 42.6 percent of Generation X homeowners (those aged from 35 to 49) are underwater on their mortgage, compared to 15.3 percent of millennial homeowners (20-34 years old) and 31.1 percent of Baby Boomers (50-64 years old). Because it is very difficult for an underwater homeowner to list their home for sale, the wide disparities among generations stand to have ripple effects throughout the housing market. Baby Boomers may not be able to find move-up buyers for their homes as Gen X remains stuck, and millennials can’t move into the more affordable starter homes currently occupied by Gen X. In general, the least expensive homes most likely to be sought by millennial and first-time buyers are more likely to be underwater than middle and top-tier homes. Among all homes with a mortgage nationwide, 28.2 percent valued within the bottom third of home values were underwater in the second quarter, compared to 15.8 percent of homes in the middle tier and 9.2 percent in the top tier. Nationwide, more than one-third of homeowners with a mortgage (34.8 percent) are effectively underwater, unable to sell their homes for enough profit to comfortably meet expenses related to selling a home and afford a down payment on a new one. “On the surface, the housing recession did not overtly impact millennials’ housing wealth to the degree it did Generation X and the Baby Boomers, as most millennials were likely too young to have purchased a home during the bubble years,” said Zillow Chief

Economist Dr. Stan Humphries. “But as this huge generation begins to consider buying homes, they’re entering a market still very much in recovery and far from anyone’s definition of normal. Because so many homes are stuck in negative equity or are effectively underwater, the inventory of homes for sale is severely constrained, leading to more competition for those that are available. And millennials likely don’t have the resources to compete with cash offers or engage in bidding wars. The reality is, negative equity is part of the new normal, and finding creative solutions to keeping homes affordable, available and accessible to this generation will be critical going forward.” The national negative equity rate fell from 23.8 percent in the second quarter of last year and 18.8 percent in the first quarter. Negative equity will continue to recede as home values keep growing, though at a slower pace because the rate of home value growth is slowing and expected to continue to slow. Looking ahead, the national negative equity rate is expected to fall to 14.9 percent of all homeowners with a mortgage by the end of the second quarter of 2015, according to the Zillow Negative Equity Forecast

Indie Mortgage Banker Activity Up 50 Percent in Q2 Richey May & Co has released its second quarter 2014 Trend Report for Independent Mortgage Bankers. The Trend Report includes the operating results of 37 independent mortgage companies throughout the U.S. and covers all operating models and production volumes. According to the report, loan production among independent mortgage bankers increased by 50 percent over the previous quarter, the first increase in the past three quarters. Purchase volume

spiked 62 percent, while refinance volume increased 20 percent over the first quarter 2014. Unfunded lock pipelines increased among independent mortgage bankers as well, rising 38 percent over the previous quarter. According to Kenneth Richey, managing partner of Richey May, this uptick indicates that the improved market conditions will continue through the coming months. “The increase in unfunded lock pipelines suggests that we can expect to see similar, if not more improved, production in the third quarter of 2014 as well,” Richey said. In addition to the increase in production, independent mortgage bankers improved profits by an average of 57 basis points, with many realizing up to 100 basis points in improved pretax profits over the previous quarter. The Trend Report for Independent Mortgage Bankers was generated from the results of Richey May Select, the industry’s only benchmarking technology specifically for independent mortgage bankers. The software, which provides up-to-date peer-to-peer benchmarking information on various aspects of their businesses—such as financial, production, employment, warehousing and servicing operations—analyzes data submitted by independent mortgage bankers across the U.S., and compiles a report of the quarter’s notable trends. The quarterly Trend Report highlights key performance indicators, such as overall volume and volume by transaction type, as well as loan margins, operating costs, labor output, and more. The data used in the report is gathered from Richey May Select subscribers and is provided at no additional costs to the participants. All data sources are kept confidential. “Independent mortgage bankers’ unit volume, expenses and margins were very close to those they experienced in the third quarter of 2013,” said Keith May, Richey May’s managing director, advisory services. “However, pre-tax profits in the second quarter of 2014 were much higher than in the third quarter of 2013. This is probably because third quarter 2013 was in the

middle of a declining market, whereas second quarter of this year was in an improving market.”

Downpayments on the Rise in Q2 According to a report released by LendingTree, downpayment percentages for conventional 30-year fixed rate purchase mortgages increased in the second quarter to an average of 17.28 percent, up from 15.78 percent in Q1 2014. Additionally, the average downpayment amount also increased, from $34,733 in Q1 2014 to $37,576 in Q2. “We’ve seen an overall downward trend in downpayments over the past 18 months, but appreciating home prices and pent-up demand has brought borrowers back into the housing market with more funds available for a downpayment,” said Doug Lebda, founder and CEO of LendingTree. “Additionally, in certain markets, a competitive real estate environment may be forcing some homebuyers to put more money down in order to strengthen their offers. However, the slight uptick in downpayments is a positive sign for the housing market as homeowners will realize lower monthly payments, quickly build equity, and reduce risk for lenders.”

Report Finds Oceanfront and Lakefront Home Values Near Double Median Prices

kilometers or greater. Properties separated from direct waterfront by a road with a speed limit of 25mph or less are also considered waterfront. Riverfront properties were not included in this analysis, nor were condominium or coop housing units. Zillow’s initial analysis covers 250 cities and towns nationwide with at least 100 waterfront homes meeting the above criteria.

One in Six Homeowners Are Still Underwater, According to Zillow One in six (17 percent) U.S. homeowners with mortgages–or 8.7

million–were still underwater on their mortgage in the second quarter of 2014, despite rising home values, according to the Zillow Negative Equity Report. This is down from 18.8 percent in the first quarter of 2014, and down from 23.8 percent from last year (Q2 2013). The effective negative equity rate, or the percentage of homeowners who have less than 20 percent equity in their home, fell to 34.8 percent in the second quarter, down from 36.9 percent from the first quarter of 2014, and down from 41.9 percent last year (Q2 2013). Homeowners with less than 20 percent equity in their current home continued on page 16

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Nationwide, the typical oceanfront or lakefront, single-family home is worth more than double the median value of all homes, and in some communities the median waterfront house could be worth ten or more times the median value of non-waterfront houses, according to a new analysis by Zillow. In the U.S. at the time of this analysis, the median single-family home was worth about $171,600, while the median waterfront house was valued at $370,900, a waterfront premium of 116.1 percent. Among large cities analyzed, the biggest difference between median non-waterfront single-family home values and median waterfront house values are in Tampa, Fla. (waterfront premium of 733 percent); Honolulu, Hawaii (waterfront premium of 334.5 percent) and Long Beach, Calif. (waterfront premium of 321.6 percent). “The allure of ocean and lakefront living is powerful and undeniable, and millions of homeowners nationwide dream of one day owning a home on the water. But those dreams come at a price,” said Zillow Chief Economist Dr. Stan Humphries. “Waterfront properties are both relatively scarce and highly coveted, and that high demand and

limited supply leads to higher home prices. Additionally, added insurance, floods, environmental mitigation and infrastructure costs are often part of the tab when buying a waterfront home. Still, as long as buyers understand the added costs and potential headaches, waterfront living is likely to remain one of life’s simple pleasures for many, many years to come.” The median waterfront home value is calculated in the same way as the Zillow Home Value Index, and represents the median value of all singlefamily waterfront homes in a given community. The index includes singlefamily homes located 150 feet or closer to the waterline of an ocean or lakes with a total combined size of 10 square

The Greatest Union of All Time: Social Media and Direct Marketing Social media and direct marketing … the most revolutionary marketing method to hit the mortgage industry since the Internet itself. These methods of marketing place ads in front of the same people who you direct market to on social media Web sites like Facebook and Twitter. The bridge between online and direct marketing is here. Social media just became much more powerful for mortgage lenders Not only can you stay in front of your past clients online, you can also create multi-channel marketing campaigns and increase the impact of your marketing by placing online ads to the same people who received your mail piece. Upload the list of those whom you are marketing to and dramatically increase your results. Social media is here to stay To effectively market yourself, you need be on all of the social Web sites. The trouble is getting people to follow you. Friends and family are easy. You probably have some of your past clients following you as well that all follow you now. But how do you get more followers? Pay for advertising on social sites just like you would on search engines Advertising on social media Web sites has become mainstream. The trouble is specifying who receives your ads. Now you can specify not only who receives your ads, but also how much you want to spend. Grow as fast as you want. Put ads in front of past clients who aren’t following you. Put ads in front of those who you are sending direct mail to. You can even put ads in front of those whom you want to do business with based on their mortgage information, like loan amount or loan type.

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These highly effective, highly targeted online ad campaigns, combined with direct marketing campaigns like direct mail and telemarketing, are the best new way to drive traffic to your site and leads to your loan officers. Speak with your social media manager about it. This is a great window of opportunity for you to get ahead of the competition. TagQuest Inc. client spotlight … Don R., a California-based mortgage lender Each month, we like to talk with our clients and find out how their marketing campaigns are going. Here is what we heard from Don R., a California-based lender: l l l l

Campaign type: Live transfer leads Leads delivered: 12 per day Applications taken: 30 percent (four per day) Monthly total: 80 applications per month

What do you like best about using live transfer leads? “The quality and the consistency. If I go on vacation, I can turn them off. When I’m in the office I can count on delivery.” What do you think might appeal to others in your industry about live transfer leads? “It’s a live person on the phone. That’s all we need.” Medford, Ore.-based TagQuest is a full-service marketing firm created specifically for the ever-changing business world. TagQuest assists companies with their direct marketing, advertising and branding needs, and knows what it takes to generate quality customers and, most importantly, how to retain those customers for years to come. TagQuest brings forth a unique opportunity to utilize our experience and expertise in varying consumer sales and marketing environments. For more information, call (866) 376-5540 or visit Tagquest.com. VIEW OUR MOST RECENT WEBINAR ON YOUTUBE Online readers please click on the link below, readers of the print edition, please copy the link and paste it into your browser. http://www.youtube.com/watch?v=coBEsmEVOgo

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nmp news flash continued from page 15

may have a difficult time covering the costs on selling and purchasing a new property. Looking ahead, the national negative equity rate is expected to fall to 14.9 percent of all homeowners with a mortgage by the end of the second quarter of 2015, according to the Zillow Negative Equity Forecast. Of the 35 largest metros covered by Zillow, more than one-fourth of homeowners in Atlanta (28.9 percent), Las Vegas (27.4 percent) and Chicago (27.1 percent) were still underwater on their homes at the end of the second quarter. The lowest rates of negative equity were in San Jose, Calif. (4.6 percent), San Francisco (8.2 percent) and Austin, Tex. (8.3 percent). Nationally, millennial homeowners held 19.6 percent of all underwater mortgages while Generation X held 18.7 percent and Baby Boomers held 10.9 percent.

Q2 Commercial and Multifamily Delinquency Rates on the Rise Delinquency rates for commercial and multifamily mortgage loans continued to decline in the second quarter of 2014, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report. During the second quarter of 2014, the 30-plus day delinquency rate for loans held in commercial mortgagebacked securities (CMBS) decreased 0.45 percentage points to 5.71 percent. The 60-plus day delinquency rate for multifamily loans held or insured by Fannie Mae was unchanged at 0.10 percent. The 60-plus day delinquency rate for multifamily loans held or insured by Freddie Mac decreased 0.02 percentage points to 0.02 percent. The 60-plus day delinquency rate for commercial and multifamily mortgages held in life company portfolios increased 0.03 percentage points to 0.08 percent. The 90-plus day delinquency rate for loans held by FDIC-insured banks and thrifts decreased 0.17 percentage points to 1.40 percent. “Commercial and multifamily mortgage performance continues to strengthen,” said Jamie Woodwell, MBA’s vice president of Commercial Real Estate Research. “Delinquency rates for loans held by life companies, Fannie Mae and Freddie Mac all remain low, and delinquency rates for CMBS loans continue to decline. Among loans held on bank balance sheets, the 30-90 day delinquency rate is now the lowest in the series history, going back to 1993.” The second quarter 2014 delinquency rate for commercial and multifamily mortgages held in life insurance compa-

ny portfolios was 7.45 percentage points lower than the series high (7.53 percent, reached during the second quarter of 1992). The delinquency rate for multifamily loans held by Freddie Mac was 6.79 percentage points lower than the series high (6.81 percent, reached in the fourth quarter of 1992). The delinquency rate for multifamily loans held by Fannie Mae was 3.52 percentage points below the series high (3.62 percent, reached during the fourth quarter of 1991). The rate for commercial and multifamily mortgages held by banks and thrifts was 5.18 percentage points lower than the series high (6.58 percent, reached in the second quarter of 1991). The rate for loans held in CMBS was 3.31 percentage points below the series high (9.02 percent, reached in the second quarter of 2011). Construction and development loans are not included in the numbers presented here, but are included in many regulatory definitions of ‘commercial real estate’ despite the fact they are often backed by single-family residential development projects rather than by office buildings, apartment buildings, shopping centers, or other income-producing properties. The FDIC delinquency rates for bank and thrift held mortgages reported here do include loans backed by owner-occupied commercial properties. The MBA analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: Commercial banks and thrifts, commercial mortgage-backed securities, life insurance companies, Fannie Mae, and Freddie Mac. Together these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding. The analysis incorporates the same measures used by each individual investor group to track the performance of their loans. Because each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to another.

Study Finds 96 Percent of Markets Remain Affordable for Recent Grads RealtyTrac has released a report analyzing the affordability of homeownership for recent college graduates, which found that 96 percent of U.S. housing markets are still affordable for recent graduates making the median household income—even those with student loans. continued on page 39

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Top Tips for Handling Inbound Leads By K. Justin Restaino I am often asked by clients, “How can we increase our conversion ratios.” After you’ve targeted your ideal client, the best way to increase conversion is the proper nurturing of the inbound calls. InsideSales.com recently published a report on lead response times, and not surprisingly, the data suggests that buyers go with the first salesperson who contacts them 50 percent of the time. Yet even though studies show that it’s crucial to act on a lead with a sense of immediacy, a whopping 47 percent of companies don’t respond to inbound leads in a timely fashion at all. To become more adept at handling your inbound leads, we recommend the following: Have sales and marketing teams collaborate With quick response time being so important for inbound leads, it’s important to have a system in place that allows the marketing and sales teams to work together in unison. For instance, prior to a new mailing, the marketing team should work with the sales team to determine the best way to handle the influx of new leads in a timely fashion. Be persistent All too often, salespeople give up too soon on new leads. The InsideSales.com report indicated that only 53 percent of companies respond to leads at all, and of those that do, the average number of times they try to reach a lead is 2.2. Yet persistence does pay off because statistics show that it takes about eight contact attempts before getting a prospect on the phone.

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18 Call prospects Most companies rely only on mail to reach a lead. Instead, call leads—this will help you stand out from the pack, as 70 percent of companies use only mail to reach inbound leads. Practice presentation skills The InsideSales.com report found that the salespeople they surveyed could often benefit from improving their delivery skills when calling people. Many salespeople spoke too quickly, while others failed to provide more than a first name. Consider creating a script for lead responses and practice with it to ensure you’re leaving a great first impression over the phone. Strive to offer value In your communications with your leads, your focus should be on providing value. Create marketing messages that emphasize how your services benefit your lead, rather than using an egocentric approach. Track your results Are some of your lead-nurturing strategies more effective than others? Consider which methods of lead-nurturing have been the most successful for you, and focus your time and energy on those strategies. Time and time again, we hear that “Sales is a numbers game” to succeed. While I will not deny the importance of having as many new prospects in the pipeline as possible, I also emphasize that nurturing leads is the key to the highest conversions, and in turn, lowest cost per closed loan. K. Justin Restaino is vice president of Titan List & Mailing Services Inc. For more than 13 years, he has led Titan’s Mortgage Division, helping lenders of all capacities grow their businesses utilizing targeted direct mail. With a specialized focus in refinance and purchase markets, Restaino has the insight for proper data and mail application for success. He may be reached by phone at (800) 544-8060, ext. 204 or e-mail justin@titanlists.com.

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new to market continued from page 12

(TQL) program now offers expanded support for ATR/QM with auto-population of verifications in a tracking tool and output delivery of ATR/QM compliance proof to investors for audit purposes. Encompass is now equipped to meet Uniform Loan Delivery Dataset (ULDD) Phase two requirements for the GSEs, which took effect on loans delivered on or after Aug. 25, 2014. “Ellie Mae’s new Encompass mortgage management solution release is designed to help clients expand and manage new channels more effectively, keep pace with evolving compliance regulations and take time and cost out of origination, sales and delivery processes,” said Jonathan Corr, president and chief operating officer of Ellie Mae. “These enhancements, combined with our recently released Encompass Consumer Direct self-service, lead-generation solution, make Encompass a great solution for lenders looking for compliance, quality and efficiency.” Encompass has also been enhanced to improve efficiency and reduce processing time by automatically recognizing, identifying and classifying borrower documents. Encompass can be trained to automatically recognize key documents and their content, such as paystubs and bank statements, and organize them within the borrower’s electronic loan file. The ability to view, edit and track multiple documents from one location has also been added to Encompass, allowing users to easily perform processing and underwriting tasks within the electronic loan folder. All key internal Encompass users for each loan can now be automatically notified when disclosures and document requests are sent to the borrower. This helps improve internal communication and collaboration while saving unnecessary follow-up time. Encompass now allows lenders to consistently manage all channels: retail, wholesale and correspondent. The management of third-party origination (TPO) companies and their branches, such as brokers and correspondents, are now centralized in the same location in Encompass as their retail business.

Impac to Partner With Macquarie Group on Non-QM Product Impac Mortgage Holdings Inc. has announced the launch of a new initiative with Macquarie Group, a global diversified financial services provider, on a major expansion into the non-qualified

(QM) mortgage space. Impac Mortgage recently launched its non-qualified mortgage product offering, the Alternative QM Program (AltQM), through its wholesale, correspondent and retail production channels. The AltQM programs are designed to offer brokers and correspondents alternative mortgage products, other than conforming agency products, to their clients. As part of this initiative, Impac will exclusively sell AltQM origination to Macquarie, which will provide funding towards this program. Impac Mortgage is not new to the non-agency space, having originated $90 billion in non-agency mortgages between 1995-2007, and anticipates building on its proven track record with this product. Macquarie has extensive industry experience and an established track record in credit markets and mortgage finance. The AltQM programs are designed to provide home financing options for high-quality borrowers just outside of current government-sponsored guidelines. All new Impac-originated loans will be fully documented, supported by significant down payment requirements, and meet all legal standards. The AltQM programs will target the underserved market of borrowers who are finding financing, for purchase or refinance, either non-existent or available with stringent and costly parameters. To fit the needs of these borrowers, the AltQM Program suite will initially feature four products: The AltQM Jumbo, Alt-QM Agency, Alt-QM Income and Alt-QM Investor program. These loans will be held for eventual securitization.

Guaranteed Rate Launches Cloud-Based Transfersafe Guaranteed Rate has just taken a major step closer to the world’s first fully digital mortgage with its latest cloud-based technology service for homebuyers. Transfersafe continues Guaranteed Rate’s efforts to modernize the mortgage process by allowing for instant online collaboration between a borrower and the loan officer and their team, sharing documents in a secure, encrypted cloud environment powered by Box. Borrowers can sign and upload loan documents electronically and receive immediate feedback and next steps from the platform’s consumer-friendly interface, shortening a process that used to take days into minutes. Transfersafe eliminates the need for faxing documents back and forth and potentially unsecure econtinued on page 66

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REDUCED RISK FOR WHOLESALE AND CORRESPONDENT ESPONDENT LENDERS LENDE

n National Mortgage Professional Magazine n OCTOBER 2014

NAMB PERSPECTIVE The President’s Corner: October 2014 Nothing is impossible

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I have the good fortune to be president of NAMB— The Association of Mortgage Professionals at a time when the association has been restored to financial health, membership is growing and we have just had our best national convention in 10 years. I owe a great deal of thanks to our NAMB Board and Immediate Past President Don Frommeyer. However, I believe we can accomplish even greater things. For those who don’t know me, I would like to reminisce on some of the successes I have had at NAMB. I joined NAMB in 1986 at its first national convention in Atlantic City. There were only 10 residential brokers there. The rest were all commercial. That changed quickly in a few years. In 1992, I became one of the founding members of the Maryland Association of Mortgage Professionals (MAMP), where I joined their board and began work on the Statewide Legislative Committee where I soon was made chair. At the same time, NAMB had just hired Charlie Frohman, our first full-time legislative manager. Unfortunately, he knew little about mortgage origination, so I was chosen to walk the halls of Congress with him. I wore out a pair of shoes visiting nearly every member of Congress with Charlie over a span of six months. Meanwhile, the state of Maryland was rewriting its mortgage laws. I spent countless hours in Annapolis building relationships before we had a lobbyist. I was invited to work on the legislative task force drafting the new legislation. Working with consumer advocates and people normally considered our opponents, we drafted the section of Maryland law where most residential lending operates to this day. The only thing I didn’t get was loan officer licensing. The Commissioner of Financial Regulation strongly opposed it, saying it

was not possible to enforce. As a result of my work, I was named Maryland’s first Mortgage Broker of the Year. On the national scene, courts were beginning to consistently rule that yieldspread premiums (YSPs) were illegal referral fees. Defending these suits was very costly to wholesalers. Even brokers were being sued. There was a very real danger that tens of billions of dollars would have to be refunded to consumers which would have bankrupted many wholesalers and brokers. Even a letter-writing campaign with 36,000 participants failed to sufficiently move the U.S. Department of Housing & Urban Development (HUD) and stop the class-action lawsuits. During that time, I held the first NAMB fundraiser for a member of Congress, Robert Ehrlich. Bob and I established a close working relationship. As I discussed this problem, Bob and his chief of staff mulled over what could be done. Despite picketing from protestors at his fund-raising events, Bob introduced moratorium legislation in Congress that drew 275 co-sponsors and a companion bill in the Senate. Before the legislation matured for a vote, HUD took notice and issued Statement of Policy 2001-1 which declared that YSPs are not per se illegal. Courts reversed themselves and the suits dried up. Several years later, Rep. Ehrlich became Gov. Ehrlich. The former Commissioner of Financial Regulation who had refused to consider loan officer licensing was replaced. I sat down with Bob and the new Commissioner where we talked about my loan officer licensing proposal. Being a free market proponent, it took a little convincing but eventually the Governor agreed to support our bill. It still took a year to get through the legislature, but we passed one of the best licensing bills in the country. Several years earlier, I had been named chair of NAMB’s FHA Committee. The FHA Committee had dwindled to only a few

Why Do I Need NAMB? 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

For detailed information, visit www.namb.org.

members when I was named chair. Many originators felt FHA had become irrelevant and supported shutting it down. I felt FHA was still a very viable program. I found a number of NAMB members who felt the same way, and the committee quickly grew to more than 50 members. I made it a point to get to know FHA career employees and the Commissioners. When Brian Montgomery took over as Commissioner of the FHA, he wanted to breathe new life into the FHA program. Our first project was ridding FHA of requirements that made sellers and buyers refuse to use FHA. Things like nitpicky property repair requirements, mandatory termite, well and septic tests were all removed. As we streamlined the program, Brian asked if we could create any new programs. Working with Sherry Eckles of M&T Bank on my committee, we created the streamlined 203k. When Brian was replaced by David H. Stevens, we found a Commissioner who had vast mortgage experience and wasn’t afraid to tackle things that previous FHA Commissioners had been afraid to touch. Dave took the fearless step of eliminating audit requirements for brokers, something NAMB had pushed hard to accomplish for many years. When Stevens left, we had great concern about his successor, Carol Galante. No one knew Carol, and we didn’t know what to expect. I was pleasantly surprised to find Carol was very intelligent and listened intently. She turned out to be a quiet powerhouse. She did the unthinkable by reversing a Mortgagee Letter that would have been disastrous for borrowers with collection accounts. She clearly listened when I told her the serious impact this would have on borrowers and the program. Carol held the line and delayed implementation of increasing FHA’s downpayment to five percent and reducing seller contributions to three percent. We showed her from HUD’s own statistics that this would harm FHA rather than help. NAMB and other trade associations pushed for a road to recovery for borrowers which led to creation of the Back to Work program. Amazingly, Carol succeeded in shaming all of the naysayers who said FHA would need a $100 billion dollar bailout. She has turned out to be one of the best FHA Commissioners ever. Starting in 2005, I served on the committee that helped develop the National Mortgage Licensing System. In 2007, Nikita Pastor, NAMB’s attorney at the time, and I met with those in charge of the NMLS. I expressed my concern that the NMLS was only going to include broker originators. I was told that was non-negotiable because the state regulators had discussed it and had no intention of licensing lender originators. There was no possibility of changing that. Only a year later, in 2008, I was presented with an outline of federal legislation that would license or register every originator. Unfortunately, it was not good

legislation as proposed. Working with Gail Laster in Barney Frank’s office, we came up with the basics of what the SAFE Act is today. It included licensing and registration for ALL originators. You may notice that a large portion is very similar to Maryland’s loan officer licensing legislation. I was named NAMB Broker of the Year for my involvement in that legislation. When the market imploded in 2008, the bottom dropped out for NAMB as well. In 2010, NAMB was faced with total reorganization or bankruptcy. As treasurer of NAMB, I rejected the idea of bankruptcy and put together a virtual trade association. I settled millions of dollars in debt for pennies on the dollar. NAMB was to be operated by select contractors around the U.S. acting much like a staff in a central location. Today, NAMB is a model for the 21st Century trade association. Membership is growing. We have adequate cash reserves and the association functions as well or better than with an expensive office and staff. In 2010, only two states attended Delegate Council at our annual meeting. There was talk that it was no longer needed. I disagreed. NAMB has always been driven by its state affiliates. As Delegate Council chair for the past three years, I have been diligently restoring the Council. It has now been rebuilt with 24 states participating, representing every state with an active NAMB state association. We have two in-person meetings and two virtual meetings each year with an excellent participation rate. I will now turn over a fully functional Delegate Council to Rocke Andrews this year. I hope to create at least a half-dozen new or revived state associations this year to join the NAMB Delegate Council. I recite these accomplishments not as bragging rights but to assure you that I have long history of overcoming difficult challenges. Many of these challenges were considered impossible to overcome. My belief is that something worth accomplishing is never impossible no matter who declares it so. It will take planning, hard work and patience. I was thrilled to find that many people at NAMB National and members of NAMB’s board feel the same way. We will never seek changes that are harmful to our consumers or our country. NAMB will always take the moral high ground. But, we will tirelessly and creatively work to improve our industry, the working environment and our duty to our consumers. I invite you to join me in this quest. Working together, I am confident we will accomplish the impossible.

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

NAMB PERSPECTIVE A Message From NAMB CEO Donald J. Frommeyer Well, I get to write from a different position for the first time in three years. Just to let you all know, my three years as your president was the thrill of my life. And being your CEO is just a bigger step without all of the fuss. John Councilman, your current president, will now handle all of the day-to-day operations of the association and it will be leaving me more time to spend on my true job of originating. My bosses have been very lenient as to my production, even though I still fund a lot of deals. But they know that I can triple my business with a little time and my extra effort. So what does the NAMB CEO do in his position? I will still fulfill my obli-

gation of serving as NAMB’s immediate past president. In reality, that means that I chair the Nominating Committee next year to put people on the Board. I will attend all of the Board teleconferences, go to NAMB National and the Legislative & Regulatory Conference in Washington, D.C. I will mostly be working with our PR company, staying involved with the Government Affairs Committee, working to re-write the Policy and Procedures Manual, helping NAMB President Councilman with projects and lending a big help to the NAMB National Committee. I will also fulfill some speaking engagements throughout the year, but nothing like it was when I traveled nine of the last 13 weeks for the association (the best part was getting out to see all of the

New NAMB Board Year, Same Unwavering Mission

and non-members and listening to their concerns. Some of you are frustrated and some are enlightened. Yet I heard loud and clear from our NAMB National Conference; members NEED to know that they are part of something bigger than just their state or local chapter. With all of this optimism, we cannot remain complacent in our tireless struggle each day to educate our stakeholders, clients, industry partners, state and federal regulators and our state and federal legislators. Some states are still passing antisteering and anti-sub-prime mortgage legislation. We all must have a relationship with our stakeholders and every month, and every year, make sure they are aware of current laws and pending bills that will affect their constituents and the overall health of their own state.

The NAMB Government Affairs team cannot do this alone. We need every state to participate and share with NAMB and other states what are pending bills that will affect housing. We need this commitment from you. If you are reading this message, you do care. Go one more step and participate. Be heard, be vocal, but be constructive. Thank you all for your continued support and advocacy.

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

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

Correction … On page 21 of the September 2014 issue in John Councilman’s article, “Will Big Banks Stay in Mortgages,” it was stated that at NAMB National, “The lone bank, U.S. Bank, is there to promote its Prime+ portfolio loan division, not Fannie, Freddie or FHA.” John received a call from U.S. Bank’s vice president informing him that U.S. Bank is still actively promoting Fannie, Freddie and FHA programs. U.S. Bank did merge its separate agency division into Prime+ and eliminated many small brokers, but it is still actively promoting agency products, as well as portfolio loans nationwide through its wholesale division. NAMB and its membership appreciate U.S. Bank’s continued support of wholesale lending.

n National Mortgage Professional Magazine n OCTOBER 2014

We all just came back from an incredible NAMB National Conference in Las Vegas. The mood was great, the networking opportunities were abundant and overall atmosphere was one of OPTIMISM. Yes, optimism was the feeling that I heard, saw and felt throughout every attendee. We have spent excessively many years with a gray pessimistic view of our industry because of our stakeholders pounding on us for the misgivings of those that have left the industry years ago. It is a new NAMB year and new rebirth year for our industry to grow and thrive even in the new age of regulatory burden. Many of you may ask, “Why do I find this new optimism?” It is because of the opportunity that lies ahead. “Opportunity”— The root of the word port meaning the entryway by water to provide commerce. In ancient days, an open port was the key to commerce, trade and exchanging of ideas. Thus, meeting with our members of Congress and regulators gives us great opportunity to exchange our ideas. I know this is a different approach, but one I find we all need to find

refreshing. With all of the members from the NAMB represented states, I am especially grateful for all of you making this trip; also having the same vision. Our vision is WHERE we travel. Our purpose is WHY we travel. We travel to “make a difference.” Just like the 300 brave Spartans in the Battle of Thermopylae. We are fighting for every loan originator and their clients that need to be defended in Washington, D.C. and every State Capitol. To ensure that the coin phrase unintended consequences is not overused. I feel “Resilience.” Latin from “resilire.” “Re” means back, “salire” is to leap. When we are resilient, we leap back up after being knocked down. We have overcome many obstacles on our path, and I am ever so optimistic about our meetings with NAMB members. As the past statewide president of the California Association of Mortgage Professionals (CAMP) and NAMB Board Member, I have been working daily to coach and inspire our future leaders of CAMP and NAMB and feel confident that all together we are great pathfinders for our paying and non-paying members. I have traveled up and down California and am now branching out to the other NAMB state affiliates meeting with members

free to contact him with questions. I will continue to write the Monday Morning Messenger and try to give you topics that are relevant and informational for all of you. I have grown very fond of this newsletter. If you are president of an NAMB state affiliate, please copycat this Monday Morning Messenger. We have had some states start their own, and I feel that the biggest compliment you have given me is to put one out yourself. Please feel free to continue to send my Monday Morning Messenger out to your membership. The 2015 NAMB Legislative & Regulatory Conference will soon be here, and we can all meet in Washington, D.C. and plan our next set of action to keep the mortgage originator active and alive. Until then … join NAMB and believe!

NationalMortgageProfessional.com

By Fred Kreger, CMC

members and their leadership … it really motivated me). I have to tell you that I will also be chairing a Task Force that I set up prior to my exit as president that has me working with our top leadership in preparing them for the opportunity to be your NAMB president. We, the association, have been lacking in doing this, and I know all of the work that I had to do to get us back to where we needed to be and if it were not for Harry Dinham and Jim Pair, two of our past presidents, I would have been way behind the eight-ball. They helped me get a better understanding of the position and the thousands of things that go with it. I will always cherish my time that these two veterans gave me. And that is why I need to share my three years with the entire NAMB Executive Board. I hope you all continue to keep in touch and let me or John know if you need anything. He is going to be easy to reach at president@namb.org anytime, so feel

NAMB PERSPECTIVE Where Do We Go From Here? By John Councilman, CMC, CRMS We have made tremendous strides since the 2008 meltdown. NAMB National attracted the most attendees in 10 years. Wholesale and correspondent lenders abound. Membership is growing, many state chapters have revived, we have a first-class magazine, our board is one of the best ever and we are seeing quite a few legislative and regulatory successes. So, what else could we ask for? Actually, quite a lot. As I explained to our board, I would like to call my presidency “The Year of

Ideas.” We will need to try new ideas and revamp old processes. I have ideas, our board members have ideas and I would like you to present your ideas. Some will work and others will not. But we must consider them and try the ones that look promising to grow. I see the need for improvement in two major areas. First, we need to improve the legislative and regulatory environment. This reform isn’t just for originators or even our industry. It is also what consumers need and want. Everyone, including consumers, wants a simpler, more understandable process. Do we really need 600 pages in the typical FHA loan package? Does the government have to regulate down to the minutia? Do we

really need hundreds of pages of policies that are incessantly reviewed? Can’t we give lenders and borrowers a little flexibility? Second, originators and small businesses need an environment where they can thrive and grow. As I stated in my acceptance speech, we need large players and the smallest of small to serve every consumer. Large players must have more rigid procedures and are more production oriented but can deliver economies of scale. Small brokers can be flexible and work with a client for months to educate and restructure a borrower. These small companies have entrepreneurial spirit that drives them to work long hours for less pay. Both large and small still have compliance issues to resolve and a market where buybacks are rare. I believe the best way to accomplish

these goals is to create a community that works together. NAMB has been the vehicle for over 40 years that has brought that sense of community. That is why every originator and those involved anywhere in the origination process need to become a NAMB member. Through NAMB, we share ideas, work for government reform and bring a flow of financial opportunity to consumers with integrity. Please join me in creating a better profession and industry. Share you ideas with me and work with us to implement them. John Councilman, CMC, CRMS of AMC Mortgage Corporation in Ft. Myers, Fla. is president of NAMB—The Association of Mortgage Professionals. He may be reached by phone at (239) 267-2400 or email jlc@amcmortgage.com.

The NAMB Certification Program

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General Mortgage Associate

The Certification Committee of NAMB— The Association of Mortgage Profes-sionals has been very productive to date in 2014, obtaining many new loan officers who have received the Certified Mortgage Consultant (CMC), Certified Residential Mortgage Specialist (CRMS) and/or General Mortgage Associate (GMA) designations. NAMB will continue to grow its Certification Program, to enhance its value to our designees, and fine-tune its structure and procedures. The goal of the NAMB Certification Committee is to raise the number of certified mortgage professionals to 1,000 by July 2015, and to launch a marketing campaign to both industry members and the public at-large about the need to utilize a nationally designated mortgage professional. For more information on NAMB’s Certification Program, contact NAMB Certification Committee member John Stearns, CMC, CRMS by e-mail at jstearns@afmsi.com or call (262) 478-1154.

Alabama Linda McCoy, CRMS Penny H. Phillips, CRMS

Arizona Rocke Andrews, CMC, CRMS Cal Carlson, CMC, CRMS Bert Carpenter, CMC, CRMS, GMA Randall E. Hotchkiss, CMC

William R. Howe, CMC, CRMS Brian Jacenko, CMC Ross Jameson, CMC Gilda Kemp, CRMS Gary G. Kiehlbaugh, CRMS Hratch K. Panosian, CMC Joseph P. Paonessa, CMC Mark L. Ross, CMC, CRMS Gary N. Smith, CMC Stanley Y. Wang, CMC, CRMS Linda M. Wright, CMC

Arkansas Shane Lester, CMC, CRMS

Certified Residential Mortgage Specialist

Certified Mortgage Consultant

Richard Vujovich, CMC Susan Wingate, CMC

Patricia K. Morimoto, CMC Glenn Takasato, CMC Barbara Welsh, CMC

Colorado Kay A. Cleland, CMC, CRMS Tarius L. Derritt, CRMS Gary Salter, CMC Michael Thomas, CMC

Connecticut Debra Killian, CRMS Lisa Moriello, CMC, CRMS Hector Rodriguez, CMC Lou-Ann Smith, CRMS

California

District of Columbia

Fred Arnold, CMC Michael Dorr, CRMS George L. Duarte, CMC Jane Durant-Jones, CMC Virginia Ferguson, CMC Linda Fleischmann, CMC Dean Henderson, CRMS Al Hensling, CMC Peaches Jensen, CMC Fred Kreger, CMC Jessica Lanning, CMC, CRMS Joshua Lewis, CMC C. Kent Miller, CMC James O’Dea, CMC Peter Ogilvie, CMC Nancy Osborne, CMC, CRMS Donald Petty, CMC Robert S. Schwab, CMC Guy Schwartz, CMC Christopher Taylor, CMC

Diane B. Cook, CRMS Jan Hix, CMC

Florida Tillis Churchill, CRMS Frank Cicione, CMC, CRMS John L. Councilman, CMC, CRMS Matthew Daly, CRMS Joseph L. Falk, CMC, CRMS Dan C. Longman, CRMS Julie Wheeler, CRMS Kenneth Zorovich, CRMS

Illinois Kenneth J. Amstutz, CMC, CRMS Gilbert M. Antokal, CRMS Brian Augustine, CRMS Leticia Avina, CRMS Jackie Bulava, CRMS Angelo Cusinato, CMC, CRMS Tony Davis, CMC, CRMS John Dedes, CRMS Dorothy P. Desmond, CMC, CRMS Brian Dixon, CRMS Charles E. Eck, CMC Adenike Fasanya, CMC Carol Gardner, CMC, CRMS Jorge G. Gomez, CRMS Scott T. Guzik, CMC Robert J. Kenney, CRMS Steven M. Levitt, CRMS Robert C. Moos, CMC, CRMS Andrew G. Palomo, CMC, CRMS Terry Pogofsky, CRMS Judith Santefort-Frey, CRMS Shelly Straim, CMC Tory Tarsitano, CRMS Prince Williams, Jr., CRMS

Georgia Michael Sean Collett, CRMS Deborah L. Switts, CMC Frank P Torch, CRMS

Hawaii Donna Dodd, CRMS

Indiana Frank Andriole, CRMS Donald J. Frommeyer, CRMS Robert E. Sweeney, CRMS

NAMB PERSPECTIVE Iowa

New York

Texas

Virginia

Charles D. Chedester, CRMS Kevin Kirsch, CRMS Brian E. Lampe, CMC, CRMS

Jim Barry, CMC Donald Henig, CMC Seth Rapport, CRMS Jessica Schoen, CRMS

Harry H. Dinham, CMC John H. Hudson, CRMS Jolene Jaehne, GMA Olga Kucerak, CRMS Karl LeBlanc, CRMS Henry Lesmeister, CRMS Stacy London, CMC Terry J. Morrow, CMC Robin C. Morton, CRMS Jim Pair, CMC William Parker, CMC, CRMS Jerry Rutledge, CMC April Schummer, CRMS Jeffrey Shealey, GMA

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

Kansas A.W. Pickel, III, CMC Lynn Smith, CMC

North Carolina

Nicolas M. Ellis, CMC, CRMS

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

Louisiana

Ohio

Kentucky

Michael Anderson, CRMS Tracy Lynn West, GMA

Maine Elizabeth Monaghan, CMC

Maryland Theresa Amos, CRMS Adrian F. Citroni, CRMS Jason Fox, CRMS Eric D. Gates, CRMS Patricia McGill, CMC Rick Rall, CMC Craig Strent, CRMS Ken Venick, CMC

Massachusetts Richard M. Bettencourt, CRMS George F. McLaughlin,III, CMC, CRMS

Michigan

Minnesota Jason Decker, CRMS Christopher Dueffert, CRMS Shannon Roepke, CRMS Jayne B. Sims, CRMS J.J. Sims, CRMS

Mississippi

Missouri Andrew Conner, CRMS

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

Nebraska Brent Rasmussen, CRMS

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

New Jersey Richard L. Jarocki, CMC

New Mexico Ginger Bell, CRMS Wes Moore, CRMS

Wisconsin John L. Stearns, CMC, CRMS

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

Oregon Andy Harris, CRMS Matt Jolivette, CMC Tami Konkel, CRMS Stephen C. Salveson, CRMS Kerry L. Vasquez, CMC

Pennsylvania Wayne Angelo, CRMS Michael J. D’Alonzo, CMC George Hanzimanolis, CRMS James E. Martin, CMC, CRMS Stephen M. Matthews, CRMS Mark Mazzenga, CMC Kevin McElwain, CMC Daniel Thierry, CRMS Deborah A. Webb, CMC

NOVEMBER 2014 The Mortgage Technology of Today Special Feature: Mortgage Technology Provider Directory

South Carolina James Taylor, CMC

CALL 516-409-5555 EXT 4 Tennessee Sheila Lipman, CRMS Brian C. Short, CMC, CRMS, GMA

TO LEARN ABOUT CUSTOMIZED MARKETING PROGRAMS

n National Mortgage Professional Magazine n OCTOBER 2014

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

West Virginia Marc Savitt, CRMS

NationalMortgageProfessional.com

Timothy Baise, CMC Chip Cummings, CMC Eric Kistka, CMC, CRMS Pava J. Leyrer, CMC, CRMS

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

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

NAMB PERSPECTIVE Scenes From NAMB National 2014 September 13-15 at The Luxor in Las Vegas Credit all photos to Beverly Bolnick & Rick Grant

NAMB’s 2014-2015 Board of Directors gathers for a photo during NAMB National in Las Vegas

Mike Allen, Greg Holmes and Greg Plunkett from Credit Plus Inc. were on hand to discuss their product offerings

Michael Barone, Jonathan Foxx, Joyce Pollison and Alan Cicchetti from Brokers Compliance Group

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American Financial Resources was represented by Jay Dempsey, David Margulies and Adam O’Neill at NAMB National in Vegas

Radian’s Dan Bayer and PJ Harrigan on the exhibit hall floor of The Luxor

The gang from REMN show their support for NAMB at NAMB National 2014 The Washington State delegation of Lisa Goldsmith from NYCB Mortgage Company, George Charles from Loan Central and Ruby Grynberg from Salmon Bay Community Lending

Carrington Mortgage Service’s David Grosteffon, Elizabeth Florek and Matt Evans

Jeff Mabey, Jim Harrison, Matt Hansen and Brad Mabey from Simple Nexus

NAMB Immediate Past President Don Frommeyer recognizes Valerie Saunders, Fred Kreger and Rick Bettencourt of the NAMB Government Affairs Committee for their work on behalf of the association over the past year

NAMB PERSPECTIVE Scenes From NAMB National 2014 September 13-15 at The Luxor in Las Vegas Credit all photos to Beverly Bolnick & Rick Grant

The Utah State Delegation with NAMB CEO Don Frommeyer; Jessica Bostic, UAMP Board Member/Membership; John Stevens, NAMB Board Member and UAMP Board Member; Laurie Christiansen, UAMP Board/President; Dave Luna, NAMB Board Member and UAMP Board Member; Nathan Pierce, UAMP Board Member (in back); and Taylor Oldroyd, UAMP Honorary Board Member

Gibran Nicholas and Michael Price from the CMPS Institute were on hand to discuss their educational offerings The Florida Association of Mortgage Professionals (FAMP) crew on hand in Vegas included David Kane from Fairview Lending, Valerie J. Saunders from RE Financial Services Inc. and Kimber White from United American Mortgage

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Maximum Accelerationâ&#x20AC;&#x2122;s Brad Korn, Kristie Woods and Erik Janeczko United Wholesale Mortgage (UWM) was on hand in Las Vegas to show their support for NAMB

BetterLoanOfficers.comâ&#x20AC;&#x2122;s Rene Rodriguez and Bob Catalano

A packed house is welcomed to Vegas for NAMB National 2014

Members of the Alabama Mortgage Professionals Association pause for a photo during NAMB National

n National Mortgage Professional Magazine n OCTOBER 2014

The gang from Rehab Cash Now on the exhibit floor

Representatives from the California Association of Mortgage Professionals (CAMP) gather for a group photo

HUD Promise Zone Progra BY PHIL HALL

The new announcement by three federal agencies: The U.S. Departments of Housing & Urban Development (HUD), the Departments of Agriculture and Department of Education, on the latest round of competitive bidding for Promise Zone program funding was greeted by industry experts with a mix of encouragement for the program’s goals and skepticism on whether it can help expand affordable housing in troubled areas. Under the Promise Zone’s bidding process, urban, rural and tribal communities are asked to put forth plans that would create a public-private partnership designed to boost community development efforts, including the creation of new affordable housing opportunities. Communities that are part of the Promise Zone program are provided with priority access to federal investments and federal staffing assigned to bring projects to their conclusion. In January, the first five Promise Zones were announced in three cities (Los Angeles, Philadelphia and San Antonio), the Southeastern Kentucky Highlands and the Choctaw Nation of Oklahoma. “As a former mayor of an urban Promise Zone community, I have a

unique appreciation for the talent, passion and the vision that local leaders offer when working to turn their communities around,” said HUD Secretary Julián Castro, referring to the San Antonio Promise Zone, in a press statement issued by his Department. “Promise Zones are about giving folks who have been underserved for far too long the opportunity to build stronger neighborhoods and more prosperous lives. At HUD, we’re honored to give other communities the opportunity to transform their futures so this work can continue across the country.” A number of industry professionals interviewed by National Mortgage Professional Magazine acknowledged that they were not very familiar with the intricacies Promise Zone program, although they expressed admiration for its intentions. “I didn’t really catch it when it first came out,” said Rocke Andrews, president-elect of NAMB—The Association of Mortgage Professionals and broker/owner at Tucson-based Lending Arizona LLC, who noted the importance in homeownership as part of any community development endeavor. “I see housing increasing the strength of com-

munities. When someone owns their own living space, they take pride in their community. This helps to improve all other issues within the communities.” Jeannine Jacokes, CEO of the Community Development Bankers Association, also acknowledged not being familiar with the depth of program’s workings, though she was impressed with its stated goals. “As a general issue, any federal program that focuses more resources on lowincome communities is a good thing,” she said, adding that the inclusion of rural and tribal areas was particularly encouraging. “I think that is a very positive development.” Logan Mohtashami, an Irvine, Calif.based senior loan manager at AMC Lending Group and a financial blogger at LoganMohtashami.com, viewed the program with optimism. “I don’t have a problem with a Promise Zone agenda,” Mohtashami said. “It’s very small in nature and it directs money to a community that will be held accountable for results. It is too small in nature to move the needle, but I believe that is the intention to see how it works out. But accountability is always the key with government assistance.”

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am Draws Mixed Reviews Mohtashami echoed Jacokes’ view on the inclusion of rural and tribal communities, rather than making the program strictly urban-centric. “Yes, including those areas, I believe, will have to be the key for expansion of a program to allow for more scale,” he added. However, several industry experts were not entirely convinced that the program would address the general scope of community development and the specific role of housing in those at-risk areas. “I must confess that I have not become intimately familiar with this program to judge its merits,” said John Councilman, president of NAMB and president of Fort Myers, Fla.-based AMC Mortgage Corporation. “To my knowledge, I have not seen it filter into the general mortgage process. I would think it would be more efficient to utilize the wonderfullytrained base of licensed mortgage originators to participate in screening individuals who may be good candidates for home-ownership rather than using paid government staff to do that work. Perhaps that will be part of the plan that has not yet been manifested.” Ryan Birtel, founder of Charlotte, N.C.-based Eolith Advisory Ltd., was more pessimistic.

“Blight is just part of the natural life and death cycle of real estate, a cycle driven by the unsubsidized desires of business and people to operate and live elsewhere,” Birtel observed. “Putting aside the impossibility of tracking the effectiveness of what seems like a massively complex bureaucratic program like Promise Zones, I wager that the government should focus its efforts exclusively at the individual level. Instead of fighting a natural and irresistible tide against a particular neighborhood, or ‘zone,’ subsidize people with the portable education, skills and small business support which will affect their long-term ability to live and operate where the natural demand is already increasing. That’s the key to sustainable wealth creation, not by asking folks without wealth to openly speculate, on a leveraged basis, against the tide–leave that to the hedge funds.” Dr. Mark A. Calabria, director of financial regulation studies at the Washington, D.C.-based Cato Institute, saw a degree of déjà vu with the program. “I just see these Promise Zones as an extended version of Enterprise/Empowerment Zones, and my read of the evidence is that these things generally shift around economic activity without actual-

ly creating any net new activity,” said Dr. Calabria. “So what generally happens is that some business is looking to locate somewhere and these zones influence them to locate in the zone, but they were always going to locate ‘somewhere.’ In general, I’m not a fan of ‘place-based’ subsidies, as they only move around economic activity and often the subsidies most get captured by the local elites. The best thing the federal government can do for local government is just get out of the way.” And Dr. Peter Morici, an economist and professor at the University of Maryland’s Smith School of Business, worried that limiting the program to five communities per funding period dilutes its effectiveness on the wider economic picture. “These kinds of programs can attract business to disadvantaged areas,” he said. “But in a slow growing economy, it only comes at the expense of other locations. In essence, they’re robbing Peter to help Paul.” Phil Hall is managing editor of National Mortgage Professional Magazine. He may be reached by e-mail at philh@nmpmediacorp.com. 27

At UWM, we invest in our relationship with YOU, not the transaction. We create the tools, training and technology to provide you with the fastest turn times in the industry. We open lines of constant communication to give you direct access to underwriting. We reinvent products and services to make lending easier, like Instant M.I. to streamline approvals and get you to closing fast. And Instant Funding that guarantees money at the table so your borrowers can walk away from the closing with keys in hand. The result: Our partners have happier clients and we have happier partners. You + United. That’s Younited. If this sounds like a revolution you want to join, unite with us at www.uwm.com/younited

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OUNITED

RESPA/TILA Integration Part I: Overview and Loan Estimate

By Jonathan Foxx

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This first of a four-part series will introduce the RESPA/TILA Integration and treat the numerous features of the Loan Estimate. In the second part of the series, I will detail the features of the Closing Disclosure. The third part will be a detailed analysis of the Loan Estimate. The fourth part will provide an in depth scrutiny of the Closing Disclosure. Accompanying this article is a Loan Estimate Table (see pages 51-54) that may be used for certain itemized categories and action requirements. The table outlines the types of areas of interest in many of the routine requirements of the Loan Estimate process. In reviewing the table, notice how many of these categories in some respects reflect the pre-August 2015 disclosure process. Rather than a before-andafter, comparative analysis, the Loan Estimate Table provides the requirements of the post-August 2015 Rule itself. In the other articles of this four-part series, I will provide charts, tables, form specimens, and annotations for applicable categories and action requirements relating to the RESPA-TILA Integration.

Discussion Let’s admit at the outset that having to explain to loan applicants the fees and boxes and pages of the Good Faith Estimate (GFE) is not for the faint of heart. The Truth-in-Lending Disclosure (TIL) remains a conundrum without peer: Difficult to explain to a consumer in just a few words; inscrutable even to loan officers; and, blisteringly enigmatic often even to lenders. Both disclosures are somewhat archaic, examples of good intentions gone to the shadowy realm of Unintended Consequences. Notwithstanding the foregoing debacle, there is the infamous HUD-1 Settlement Statement (HUD-1), infamous for its myriad codes, infamous for codes that should correlate or sometimes seem not to correlate to the GFE

itself, infamous for mapping challenges to the loan origination system, and infamous for irksome consternation about where, what, and how to show certain fees! A consumer’s distrust of the lender seems to increase with the duration of the explanation provided by the mortgage loan originator. If it takes more than a sentence or two to explain a disclosure’s contents, many consumers are already hesitating, wondering if there’s something they’re not being told! So, is there a way to provide a new kind of consumer disclosure that replaces the overly-encrusted, superannuated, periodically reconditioned, creaky, decades’ old twosome and settlement documents that have dominated the origination of residential mortgage loans for an entire generation of mortgage loan originators? Into this maelstrom of implacable confusion steps the Consumer Financial Protection Bureau (CFPB). The debate as to whether we need to replace the GFE, TIL and settlement disclosures, into an overall, encompassing disclosure, is over and done. Behind us now are the many analyses, heat maps, comment periods, public outreach, focus groups, committee reviews, interagency evaluations, extensive consumer and industry research, association position papers, quantitative studies, speeches, public relations, announcements, and presentations. Before us unfolds on Aug. 1, 2015 a brand new set of disclosures–a combined set, as in new disclosure at the commencement of the loan origination and new disclosure at its closing– the former to be called Loan Estimate and the latter to be called Closing Disclosure.1 The new set has been dubbed “RESPATILA Integration,” since the consolidation requirements reflect the mandates of the Dodd-Frank Wall Street Reform and Consumer Protection Act (DoddFrank Act), which directed the Bureau to integrate the mortgage loan disclosures under TILA and RESPA Sections 4 and 5.2 For the balance of this article, I will refer to these provisions as the “RESPA-TILA Rule” or “Rule.” Additionally, I will refer to the consolidated disclosures as

“Integrated Disclosures.” The Rule applies to most closed-end consumer mortgages. It does not apply to home equity lines of credit (HELOCs), reverse mortgages, or chattel-dwelling loans, such as mortgages secured by a mobile home or by a dwelling that is not attached to real property (i.e., land). The provisions also do not apply to loans made by persons who are not considered “creditors,” where such persons make five or fewer mortgages in a year. However, certain types of loans that are currently subject to TILA but not RESPA are subject to the Rule’s Integrated Disclosure requirements, including construction-only loans, loans secured by vacant land or by 25 or more acres, and credit extended to certain trusts for tax or estate planning purposes. So, creditors originating these types of mortgages must continue to use, as applicable, the GFE, TIL, and HUD-1 disclosures required under current law. There is also a partial exemption for certain transactions associated with housing assistance loan programs for low- and moderate-income consumers. These creditors are exempt from the requirement to provide the RESPA settlement cost booklet, GFE, HUD-1, and application servicing disclosure statement requirements, and, thus, exempt from the requirements to provide a Loan Estimate, Closing Disclosure, and Special Information Booklet for these loans.

The RESPA/TILA Rule I am sure that the question will be asked whether creditors may use the Integrated Disclosure on loans not covered by the Rule but subject to RESPA and TILA. The short answer is that using the Integrated Disclosures for such purposes is not prohibited on loans that are not covered by RESPA and TILA (i.e., mortgages associated with housing assistance loan programs for low- and moderate-income consumers). A creditor cannot use the new Integrated Disclosure forms instead of the GFE, TIL and HUD-1 forms for transactions that are covered by RESPA

and TILA that require those disclosures (i.e., reverse mortgages). With its usual flair for brevity, the Bureau’s proposal in July 2012 is a mere 1,099 pages.3 In November 2013, the final rule was issued, reaching the gargantuan proportions of 1,888 pages.4 Some of the seemingly boundless verbiage has thankfully been distilled to a 91 page guide, entitled TILA-RESPA Integrated Disclosure Rule, Small Entity Compliance Guide (Guide).5 The most recent update to the Guide was issued in September 2014. The Guide touches on many features of the Rule and the implementation of the new disclosures; however, a thorough reading of the final rule is needed in order to comprehend the scope,6 application,7 and breadth of the Rule8 in effectuating its provisions. Much of the Rule can be encapsulated in a single sentence, leaving aside all the details, as set forth by the Bureau: The TILA-RESPA rule consolidates four existing disclosures required under TILA and RESPA for closed-end credit transactions secured by real property into two forms: A Loan Estimate that must be delivered or placed in the mail no later than the third business day after receiving the consumer’s application, and a Closing Disclosure that must be provided to the consumer at least three business days prior to consummation.9 As in all consumer disclosure regulations, the compliance effective date and the operational recognition of that date are critical timing points. The new Integrated Disclosures must be provided by a creditor or mortgage broker that receives an application from a consumer for a closed-end credit transaction secured by real property on or after Aug. 1, 2015. But creditors will still be required to use the GFE, TIL, and HUD1 forms for applications received prior to Aug. 1, 2015. Operationally speaking, as the applications received prior to Aug. 1, 2015 are consummated, withdrawn, or cancelled, the use of the GFE, TIL, and HUD-1 forms will no longer be used for

most mortgage loans.10 But from a process perspective, this timing can get complicated quickly. Various restrictions take effect on the calendar date Aug. 1, 2015, regardless of whether an application has been received on that date. For instance, take note of these restrictions: l Imposing fees on a consumer before the consumer has received the Loan Estimate and indicated an intent to proceed with the transaction;11 l Providing written estimates of terms or costs specific to consumers before they receive the Loan Estimate without a written statement informing the consumer that the terms and costs may change;12 and l Requiring the submission of documents verifying information related to the consumerâ&#x20AC;&#x2122;s application before providing the Loan Estimate.13 In any event, the Bureau has made clear that, for transactions where the application is received prior to Aug. 1, 2015, creditors will still need to follow the current disclosure requirements under Regulations X and Z, and use the existing forms (i.e., GFE, TIL, and HUD-1).14 The Rule requires other disclosures besides the Loan Estimate and Closing Disclosure. In addition to the Integrated Disclosures, the Rule also

changes some other post-consummation disclosures provided to consumers by creditors and servicers; these are (1) the Escrow Closing Notice15 and (2) the mortgage servicing transfer and partial payment notices.16

Loan Estimate

corrected Loan Estimates when specific requirements are met. 5. In certain situations, mortgage brokers may provide a Loan Estimate.17 Permit me to elucidate these five items in a little more detail, pairing with the foregoing enumeration:

We will now turn to an overview of the Loan Estimate form, the form that integrates and replaces the existing GFE and 1. Loan Estimate vis-Ă -vis GFE costs the initial TIL for the transactions suband terms. If any information necject to the Rule. essary for an accurate disclosure is The creditor is generally required unknown, the creditor must make to provide the Loan Estimate within the disclosure based on the best three-business days of the receipt of information reasonably available at the consumerâ&#x20AC;&#x2122;s loan application. the time the disclosure is provided There are features to this timing to the consumer, and use due dilirequirement that harken back to gence in obtaining the informaestablished timing requirements in tion.18 the current RESPA and TILA disclosure mandates. 2. Loan Estimate vis-Ă -vis completNotice some of the similarities ing the form. The creditor must between the Ruleâ&#x20AC;&#x2122;s requirements and disclose only the specific informathose of the current initial disclosures: tion set forth in Â§ 1026.37, which provides the required content of 1. The Loan Estimate must contain a disclosures for certain mortgage good faith estimate of credit costs transactions.19 and transaction terms. 3. Timing and delivery method. The 2. The Loan Estimate must be in writcreditor is responsible for delivering and contain the information ing the Loan Estimate or placing it prescribed in the form itself. in the mail no later than the third business day after receiving the 3. Delivery must satisfy the timing and application.20 method of delivery requirements. 4. Revised or corrected Loan 4. Creditors may only use revised or Estimates. Creditors generally may

not issue revisions to Loan Estimates because they later discover technical errors, miscalculations, or underestimations of charges. Creditors are permitted to issue revised Loan Estimates only in certain situations such as when changed circumstances result in increased charges.21 5. Mortgage brokers providing Loan Estimates. If a mortgage broker receives a consumerâ&#x20AC;&#x2122;s application, either the creditor or the mortgage broker may provide the Loan Estimate.22

Page by page The Loan Estimate consists of three pages. I will provide certain salient features in an outline, page by page, in order to give an understanding of each pageâ&#x20AC;&#x2122;s purpose. I will embolden key terms throughout. Page 1: Loan Estimate Page 1 includes general information, a Loan Terms table with descriptions of applicable information about the loan, a Projected Payments table, a Costs at Closing table, and a link for consumers to obtain more information about loans secured by real property at a website maintained by the Bureau. It is titled, of course, â&#x20AC;&#x153;Loan Estimateâ&#x20AC;? and is accompanied by the statement â&#x20AC;&#x153;Save continued on page 30

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Winning With Technology By Garrett M. Kolb

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Throughout 2014, we’ve witnessed more forward lenders entering the reverse mortgage space as a way to service customers and earn more revenue. In order to be successful, forward lenders must choose a partner with advanced servicing and loan origination technology. Based on our many conversations with forward lenders, they are looking for an origination and servicing system that is easy to access, easy to understand and use, with online and offline support and training available. The features forward lenders are looking for include how personal information is kept secure, are custom reports available, are all the documents and processes compliant and if there is a disaster recovery plan. These are valuable discovery questions that all forward lenders should ask when looking for a reverse mortgage partner. The decision to partner with a capital market investor carries another critical decision, which loan origination system (LOS) to utilize. Reverse Mortgage Solutions Inc. (RMS) is a full-service reverse mortgage company, owned by Walter Investment Management Corporation (WIMC). We believe that servicing the reverse mortgage industry without a specialized technology would be like competing in a Formula One race in driving a street car. RMS’s focus on technology has paid off making us the largest servicer of reverse mortgages today. When researching a reverse mortgage servicing partner, it’s important to make sure they operate under the requirements defined by FHA, FNMA and private investors. RMS offers a state of the art and scalable reverse mortgage servicing system (RM NAVIGATOR) that meets all servicing requirements. Designed from the ground up for our partners, the RM NAVIGATOR system meets all of the requirements of FHA, FNMA, private investors, and provides customers easy access to monthly reverse mortgage statements and custom reporting is also available. For private investors and mortgage-backed bonds, our system operates in a totally secure and redundant environment on a SQL server. In 2011, RMS entered the origination business serving both the consumer direct and wholesale channels. Once again, to meet the specialty needs of our Partners, we created a proprietary originations system named RM COMPASS, a Web-based, private label LOS built for the reverse mortgage professionals. Through research, analysis and listening to the needs of our partners, we developed a system that delivers. By year end, RMS will be offering a streamlined version of RM COMPASS as a part of our Broker Direct initiative. This one-stop solution will allow partners to be up and running fast. RMS is a complete end-to-end provider to the reverse mortgage industry. From origination to securitization … servicing to asset management, the company is positioned to meet the needs of our partners. If you are a forward lender interested in offering reverse mortgages, we highly recommend you spend time researching a partner with strong servicing and loan origination technology. The partner with the best technology will be a partner you can win with. Garrett M. Kolb is senior managing director of correspondent and wholesale lending for Reverse Mortgage Solutions Inc. Garrett joined the RMS production team in 2011, and brings 35 years of sales management and financial services experience. He may be reached by phone at (888) 471-7191 or email gkolb@rmsnav.com.

SPONSORED EDITORIAL

respa/tila integration part I continued from page 29

this Loan Estimate to compare with your Closing Disclosure.”23 At the top of Page 1, the creditor places its name and address.24 A logo or slogan is permitted, so long as the logo or slogan does not exceed the space provided for that information.25 In the case of multiple creditors, only the name of the creditor completing the Loan Estimate is permitted.26 If a mortgage broker is completing the Loan Estimate, the creditor’s name should be used, if known; and, if not known, the subject space is to be left blank.27 Page 2: Closing Cost Details Page 2 breaks down into four main categories, each with its own section. I will embolden key terms throughout. 1. A good faith itemization of the Loan Costs and Other Costs associated with the loan.28 2. A Calculating Cash to Close table, showing the consumer how the amount of cash needed at closing is calculated.29 3. An Adjustable Payment (AP) Table, for transactions with adjustable monthly payments, with relevant information about how the monthly payments will change.30 4. An Adjustable Interest Rate (AIR) Table, for transactions with adjustable interest rates, with relevant information about how the interest rate will change.31 Elaborating on these categories, the costs associated with the mortgage transaction are broken down into two general types: Loan Costs and Other Costs. Loan Costs are those costs paid by the consumer to the creditor and third-party providers of services the creditor requires to be obtained by the consumer during the origination of the loan.32 Other Costs include taxes, governmental recording fees, and certain other payments involved in the real estate closing process.33 Further, items that are a component of title insurance must include the introductory description of Title.34 And, if state law requires additional disclosures, those additional disclosures may be made on a document whose pages are separate from, and not presented as part of, the Loan Estimate.35 Page 3: Additional Information About the Loan Page 3 contains Contact information, a Comparisons table, an Other Considerations table, and, if desired, a Confirm Receipt line, essentially a signature statement for the consumer to sign to acknowledge receipt.36

Exemptions to the rule and prohibitions Many rules have exemptions and prohibitions and the RESPA-TILA Integration is no exception. For instance, there are exceptions to the disclosure requirements for loans secured by a timeshare. Although such loans are still subject to the Rule, the Bureau offers “abbreviated timing, delivery, and disclosure obligations” for these loans when consummation occurs within three business days of the application. Specifically, creditors may forego a Loan Estimate and provide only the Closing Disclosure.37 For the most part, the waiting periods and timing requirements applicable to most loans subject to the Rule are inapplicable to loans secured by timeshare interests. Creditors are required to ensure only that the consumer receives the Closing Disclosure no later than consummation.38 The Rule continues the significant prohibition limiting the fees that may be charged prior to disclosure or application. A creditor or other person may not impose any fee on a consumer in connection with the consumer’s application for a mortgage transaction until the consumer has received the Loan Estimate and has indicated intent to proceed with the transaction.39 The restriction includes limits on application fees; appraisal fees; underwriting fees; and, other fees imposed on the consumer. Continuing also is the one exception for a bona fide and reasonable fee for obtaining a consumer’s credit report.40 We are often asked by a client, “What does it mean to impose a fee?” A fee is imposed if the person requires a consumer to provide a method for payment, even if the payment is not made at that time.41 There are various scenarios that the Bureau has given that apply. For instance, a creditor or mortgage broker is imposing a fee if it requires the consumer to provide a check to pay for a processing fee before the consumer receives the Loan Estimate—even if the check is not to be cashed until after the Loan Estimate is received and the consumer has indicated the intent to proceed; or, requiring the consumer to provide a credit card number for a processing fee before the consumer receives the Loan Estimate— even if the credit card will not be charged until after the Loan Estimate is received and the consumer has indicated an intent to proceed.42 The intent to proceed with the loan transaction is activated when a consumer indicates intent to proceed with the transaction, specifically, when the consumer communicates, in any manner, that the consumer chooses to proceed after the Loan Estimate has been delivered, unless a particular manner of communication is required by the creditor,43 including oral communication in person immediately upon deliv-

ery of the Loan Estimate; and oral communication over the phone, written communication via email, or signing a pre-printed form after receipt of the Loan Estimate. Silence on the part of the consumer does not constitute intent to proceed.44 Creditors are not permitted to require additional verifying information other than the six pieces of information that form an application from consumers before providing a Loan Estimate. A creditor or other person may not condition providing the Loan Estimate on a consumer submitting documents verifying information related to the consumer’s mortgage loan application before providing the Loan Estimate.45 This can get tricky. Two possible scenarios are where a creditor asks for the sale price and address of the property, but does not require the consumer to provide a purchase and sale agreement to support the information the consumer provides orally before the creditor provides the Loan Estimate; and, where a mortgage broker asks for the names, account numbers, and balances of the consumer’s checking and savings accounts, but the mortgage broker does not require the consumer to provide bank statements or similar documentation to support the information orally provided by the consumer before the creditor provides the Loan Estimate. In the second part of this four-part series on RESPA-TILA Integration, I will provide a broad-based understanding of the Closing Disclosure and also show some principal ways that it is linked seamlessly to the Loan Estimate.

7—TILA-RESPA Integrated Disclosure Rule, Small Entity Compliance Guide, September 2014, Note: the September guide provides updates to the March guide with respect to information on where to find additional resources on the rule; additional clarification on questions relating to the Loan Estimate and the seven-day waiting period; and, additional clarification on questions relating to Timing for Revisions to Loan Estimate. In this article, I will use the March and September Guides, endeavoring to provide text and citations using the Guides as primary sources.

Jonathan Foxx is president and managing director of Lenders Compliance Group, Brokers Compliance Group, Servicers Compliance Group and Vendors Compliance Group, national companies devoted to providing regulatory compliance advice and counsel to the mortgage industry. He may be contacted by phone at (516) 442-3456, by e-mail at jfoxx@lenderscompliancegroup.com or visit www.LendersComplianceGroup.com.

24—§ 1026.37(a)(3).

8—The complete rule and the Official Interpretations are available at: http://www.consumerfinance.gov/regulations/integrated-mortgage-disclosures-under-the-real- estate-settlement-procedures-act-regulation-x-and-the-truthin-lending-act-regulation-z. 9—Op. cit. 7, 2.1. 10—Idem. 3.1. 11—§ 1026.19(e)(2)(i). 12—§ 1026.19(e)(2)(ii). 13—§ 1026.19(e)(2)(iii). 14—Op. cit. 7, 3.3. 15—§ 1026.20(e). 16—§ 1026.39(a) and (d). 17—Op. cit. 7, 5.1. 18—§ 1026.19(e)(1)(i); Comment 19(e)(1)(i)-1). 19—§ 1026.37(a) through (n), as shown in the Bureau’s form in appendix H-24. (§ 1026.37(o)). 20—§ 1026.19(e)(1)(iii). 21—§ 1026.19(e)3)(iv). 22—§ 1026.19(e)(1)(ii).

31 23—§ 1026.37(a)(1), (2).

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25—§ 1026.37(o)(5)(iii). 26—Comment 37(a)(3)-1. 27—Comment 37(a)(3)-2. 28—§ 1026.37(f) and (g). 29—§ 1026.37(h). 30—§ 1026.37(i).

1—Integrated Mortgage Disclosures Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth-in-Lending Act (Regulation Z), 78 FR 7973, Dec. 31, 2013. 2—Section 1032(f) of the Dodd-Frank Act mandated that the Bureau propose for public comment rules and model disclosures that integrate the TILA and RESPA disclosures by July 21, 2012. 3—Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act (Regulation X) and the Truth In Lending Act (Regulation Z), 12 CFR Parts 1024 and 1026, Proposed rule with request for public comment, Bureau of Consumer Financial Protection, July 9, 2012. 4—Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act (Regulation X) and the Truth In Lending Act (Regulation Z), 12 CFR Parts 1024 and 1026, Final rule; official interpretation, Bureau of Consumer Financial Protection, Nov. 20, 2013.

32—§ 1026.37(f). 33—§ 1026.37(g). 34—§ 1026.37(f)(2)(i) and (g)(4)(i). 35—Comments 37(f)(6)-1 and 37(g)(8)-1. 36—§ 1026.37(k), (l), (m), and (n). 37—§ 1026.19(e)(1)(iii)(C)) and (f)(1)(ii)(B); Comment 19(e)(1)(iii)-4 and Comment 19(f)(1)(ii)-3. 38—§ 1026.19(f)(1)(ii)(B); Comment 19(f)(1)(iii)-3. 39—§ 1026.19(e)(2)(i)(A). 40—§ 1026.19)(e)(2)(i)(B); Comment 19(e)(2)(i)(A)-1 through -5 and Comment 19(e)(2)(i)(B)-1. 41—Comment 19(e)(2)(i)(A)-5. 42—Op. cit. 7, 13.4. 43—§ 1026.19(e)(2)(i)(A).

5—Op. cit. 7. 44—Comment 19(e)(2)(i)(A)-2. 6—TILA-RESPA Integrated Disclosure Rule, Small Entity Compliance Guide, March 2014.

45—§ 1026.19(e)(2)(iii); Comment 19(e)(2)(iii)-1.

www.jmaclending.com Equal Housing Lender. Some products may not be available in all states. Credit and collateral are subject to approval. This is not a commitment to lend. Programs, rates, terms, and conditions are subject to change without notice. Terms and conditions apply. All rights reserved. JMAC Lending, Inc. operate in the following states under these licenses/exemptions: Arizona Exempt, California Finance Law, CFL#603G249; Colorado Mortgage Company Registration License State NA; Georgia Mortgage Lender License 43209; Maryland Mortgage Lender License 21396; Oregon Exempt; Tennessee Mortgage License 121182; Texas SML Mortgage Banker Registration 53112; Utah Residential First Mortgage License NA; Virginia State Corporation Commission MC-5179; Washington Department of Financial CL-53112; 16782 Von Karman #12, Irvine CA 92606 specific disclosures do not reflect only those states in which JMAC Lending, Inc., a California Corporation, conducts or is licensed to do business. Intended for real estate professionals only. This disclosure may not reflect the most current licensing. We are in the process of attaining licensing for several more states. Please contact us for updates on approved states.

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31—§ 1026.37(j).

Footnotes

Mortgage Marketing Compliance: Are You Exposed? By Brent Emler

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Modern compliance regulations have changed the complexion of the mortgage industry in its entirety. From the ways in which we can lend to the ways in which we can market, government oversight has added a uniquely challenging component to how we conduct every aspect of the business. The implications in regards to relationship marketing can be frustrating. Common practices that resulted in strong, personal connections are no longer permissible, thanks to the relatively small category of lenders who took advantage of consumers and practiced their profession without regard to ethics. The level to which compliance oversight is necessary is subjectively arguable, however, the fact that we must comply is anything but arguable. Some companies have decided to significantly curtail their marketing efforts in traditional and non-traditional marketing areas because they’re afraid of the potential fines. This is simply unacceptable in my view. We owe it to our customers, our stockholders, and our employees to market our company to as

many people as we can. We cannot let regulations scare us into submission; we have customers who are counting on us to stay in contact with them, keep them apprised of their options, and be a partner in their financial success. We have employees who count on our business success to support their goals. Burying our heads in the sand by avoiding a discussion on mortgage advertising or perhaps, worse yet, proactively checking out of marketing activities is giving up and giving in; the mortgage industry is better than that. The first step to getting a handle on your marketing activities is to understand the challenges in front of you.

Originators need the security of an organization that has invested carefully in processes, policy, and technology that work together to facilitate their success. They need to be escorted through a system they can trust without reservation. You too need to be able to trust that those processes, policies, and technologies you have provided, protect you from litigation and punitive action. Having a legal team or at least a compliance officer is no longer a luxury, it’s necessary. For small businesses who can’t afford a legal team, there are a myriad of resources available to handle the day to day management of marketing compliance. The importance of this cannot be minimized.

What are my responsibilities?

Am I exposed?

Is it the originator’s responsibility to understand the legal implications of mortgage marketing? To a degree, yes. There needs to be a basic understanding of what they can and cannot do. Ultimately though, it is the responsibility of corporate management to provide the checks and balances because after all, it is the corporate reputation and bank account that will suffer should the originator fall out of marketing compliance.

I took some time to talk to a lawyer who focuses on the mortgage banking compliance arena. Fed Kamensky of Weiner Brodsky Kider PC was kind enough to take the time to chat with me about compliance from his standpoint. Weiner Brodsky Kider PC conducts “mock” audits for its clients and follows the same protocol set by the CFPB. Among the many things I took away from this meeting, this one stood out starkly:

“We cannot let regulations scare us into submission; we have customers who are counting on us to stay in contact with them, keep them apprised of their options, and be a partner in their financial success.”

Having a published marketing policy and procedure is of utmost importance. A third party audit such as the service Weiner Brodsky Kider PC provides to conduct a mock audit is extremely valuable; not only will this validate your policies but it will also help you prepare for future audits and help assure that your policies and procedures are fully vetted. Fed mentioned that auditors are looking to see that in the balance between compliance and marketing, the decisions that are being made weigh the compliance aspect more heavily than the sales aspects. A strong commitment to the policies and procedures through a regular training scheduled and systems in place to manage the marketing activities of your loan officer may not eliminate the risks that exist but they could mean the difference between a warning and a fine. For example, if your policy states that no ad-hoc marketing is permissible, there must be follow up. Scrub the internet for such marketing and then holding employees accountable for going off the reservation. Something seemingly as simple as a loan originator in New York marketing as a “Mortgage Banker” when he or she is really a “Mortgage Loan Originator,” can result

ances, you are jeopardizing your brand and creating an exceptionally dangerous legal environment. Not only that, you are not maximizing their ability to grow your business by concentrating on what they do best: Selling mortgages.

What should I do to protect my organization? Develop written policy, implement a system, and then make it mandatory. If you’re in the market for such a system, here are some great questions to ask when contrasting and comparing options: l Does the system integrate with your LOS, lead management, LO Web sites and other data management solutions to automate the transfer of contacts?

l Does the system integrate with your LOS at the loan officer level so there are single data entry points for NMLS, title, address, name, licensing, etc. l Does it accommodate compliance review and piece-by-piece approval prior to fulfillment? l Are you able to control the marketing campaigns at the corporate level? l Does it offer a way for auditors to access your entire organization’s marketing history? l Are you able to manage branches and brands from a central location? l Is it easy to use? If your system isn’t easy to use your loan officers are more apt to do their own thing and put you at risk.

Start with those questions before you get into the rest of the marketing features of the system. Not every system is right for all organizations but whatever you choose has to at least handle the basic requirements. If you haven’t implemented one of these systems, can you imagine how much more secure your company will be with the appropriate checks and balances in place—not to mention the ease of creating and implementing a robust marketing strategy? Brent Emler is director of sales and marketing at Velma.com, a customizable marketing software provider exclusive to the mortgage industry. He may be reached by e-mail at brent@velma.com.

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n National Mortgage Professional Magazine n OCTOBER 2014

in fines. If your policy does not include a limitation on loan officers creating their own websites and you’re not checking several pages deep on a Google search, then your loan officer has unwittingly put you at risk for fines. What else might we be missing that would put us at risk? Social media as an outlet for marketing is a growing concern in the industry. The accessibility and prolific use make it a natural direction for marketers to take. There’s a huge problem, though. There are some pretty stringent mortgage marketing rules associated with social media outlets. Due to the restrictive regulations, many companies take a “No Social Media Marketing” stance. According to Alice Alvey of Mortgage-u.com, a veteran in the mortgage and compliance industries, there is a real danger in cutting social media marketing out of your strategy. Her apt observation is that Millennials are the current demographic for firsttime homebuyers and one of the best ways to reach this demographic is through social media. The danger in disallowing that kind of marketing is that you may be robbing yourself of hundreds of valuable marketing touches. Imagine a sales and marketing strategy that says, “We’re not going to target one of the largest, most important buyer segments we have because we’re afraid we won’t do it correctly.” Alice also emphasized the importance of having a plan, procedures, and policies in place. Taking the time to train originators on company policy and then holding them accountable may take up more of your resources at first, but what it will pay due to compliant social media marketing will far outshine the upfront investment of resources. Do you have a comprehensive marketing policy in place? Do you have a welldefined process to handle marketing from conceptualization and brand continuity all the way through to delivery? Does that process include a strong compliance assessment? Do you know exactly what your loan officers are doing in their marketing efforts? Have you implemented technology to automate the aforementioned steps? If you’ve answered “no” to any of those questions, you are exposed. The good news is that we, as humans, adapt and overcome. Forward-thinking visionaries are creating a technological revolution that gives us hope. Companies are investing in proprietary or outside software that fully automate the marketing process while keeping their company compliant and even increasing their capacity to distribute valuable relationship marketing material. The organizations that make this investment are experiencing unequalled success despite the limitations of compliance regulations. The companies who are unwilling to invest in a marketing platform are literally walking through a compliance mine field. They might be lucky and navigate the field unharmed, but the risk of losing limb -or even life, is extremely high. If you’re leaving it up to your originator to design, copywrite, and market compliantly without proper checks and bal-

First-Time Homebuyers Enjoy the Best Opportunities (Clap Clap Clap Clap) deep in the heart of Texas

By Phil Hall he challenge of attracting first-time homebuyers to the market has perplexed many across the industry, especially in view of the macroeconomic challenges that impact the U.S. population. However, there are certain slices of the national picture that appear to be enjoying much more first-time homebuyer activity than others. In a survey released in August by WalletHub, 11 of the top 20 markets considered to be the best for firsttime homebuyers are located in Texas, while six of the top 20 markets can be found in Colorado. Oklahoma ranked at number one (with Broken Arrow) and number three (with Norman). On the flip side, the 20 markets considered to be the least-friendly for first-time homebuyers were divided primarily between California, New Jersey, Connecticut and Massachusetts; the city of Richmond, Calif., ranked dead last on WalletHub’s list, which covered 300 local markets, while California cities monopolized the bottom-five rungs for both lowest housing affordability and highest price to rent ratio (Santa Barbara came in dead last in both categories). The one area where California outpaced the rest of the nation came in lowest property crime rate per capita, with Mission Viejo taking the first spot; Miami Beach had the highest property crime rate per capita. Richie Bernardo, a WalletHub financial writer that presented the data, noted that the determination for these finds were based on a variety of factors, ranging from housing-related factors (including affordability, price to rent ratios, real estate taxes and home price appreciation) and standard of living considerations (including median annual income rates, property crime statistics and home energy costs). “Those markets at the top of the list tend to have the highest incomes and lowest costs of living,” said Bernardo, adding that the inclusion of non-housing data was included to provide “a well-rounded perspective” on the national picture. For Texas-focused mortgage professionals, the Lone Star State’s dominance came as no surprise. “Texas has a thriving economy,” said Mark Greco, president of Austin-based 360 Mortgage Group LLC. “Gov. Rick Perry did an incredible job in getting the word out about how great Texas is. In terms of land mass, the state has a tremendous amount of potential for builders. There is also no state income tax—and we have a huge amount of people moving into Texas from California.

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Compared to California, Texas is a bargain.” Greco added that he has been a witness to the bold expansion of the Texas residential markets. “I’ve been here pretty much all of my life,” Greco continued. “I’ve seen Austin grow from 350,000 to just under two million people. A lot of corporations have moved here, and a lot of young talent that commerce has attracted to Austin and central Texas.” Greco noted, with a laugh, that there was one downside to this boom. “From an economic perspective, there has been great growth—but from a personal perspective, I wish everyone would get off the road so we would have less traffic!” Todd Potter, senior vice president and national sales manager for Houston-based Envoy Mortgage, observed that the ethnic and racial demographics in Texas are also helping to encourage first-time homebuyers. “In looking at statistics from the MBA, the minority homeownership percentage has been growing at a much faster pace than other segments of the marketplace,” said Potter. “The MBA projects that about 40 percent of the mortgage market by the end of 2020. Texas, of course, is north of Mexico, and the pride of homeownership for the Hispanic population is very strong. I wouldn’t think that New England or the Northeast or upper Northwest would see that sort of growth.” As for the Colorado market, Erick Strobel, owner and operator of Johnstown, Colo.-based Strobel Financial LLC was not the least bit surprised by its strong showing in the WalletHub top 20. “Colorado cities have scored well as the best places to live and best markets for first time home buyers as a result of job opportunities, family safety, beauty, space to build and moderate weather,” Strobel said. “As a resident for 30 years, I can say it has been an ideal place to raise a family and own a home. Opportunity continues to be available through the many universities, biotech companies, Denver International Airport and military bases. Families here take refuge in healthy lifestyles, organic foods and beautiful places to visit. The big secret is the weather—moderate winters and mild and mostly sunny days convince people to stay.” However, the WalletHub list had a couple of anomalies: Detroit ranked first for lowest price to rent ratio and second for highest housing affordability, but last for lowest median home price appreciation. Honolulu ranked first for lowest real estate tax rate, but came in last for highest total home energy costs.

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Infographic courtesy of WalletHub.com

n National Mortgage Professional Magazine n OCTOBER 2014

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

Hope Is Not A Plan By Rick Floyd “How’s business?” As I travel across the country, that’s often a question I ask my friends and colleagues throughout our industry. The answers vary, but with those who aren’t doing so great, the conversation is usually the same. “Business is down and compliance is killing me.” “I’m sorry to hear that. It’s not as easy as it used to be.” “No, but I’m hoping things turn around soon.” That last line is like nails on a chalkboard for me. Hope is not a plan. This has been said multiple times before, but that’s because it’s true. Actually, hope can be a plan, but it shouldn’t be your plan when it comes to success. Not for this industry or any other. You can’t simply hope that things will bounce back. If you’re having a tough go of it lately, or even if things are going well for you, you should not simply hope things will get better or stay the same. You need to have a plan and that plan has to involve more than simply showing up for work each day. Our industry has seen a dramatic shift in the last 10 years. Things aren’t getting easier, but at the same time, I see some steadily growing their business … how is that? It starts with planning. I’m a huge foot-

ball fan, and I’ve done a little coaching in my day too. Anyone who has a decent knowledge of how football works knows that coaches and players watch endless amounts of film on their opponents. They do this to help them build a strategy for each game because what worked against one team may not against another. Maybe the coach will decide they need to change their defense or possibly throw the ball more. Or maybe what worked last week should theoretically work next because the two teams are similar. Either way, they’re planning. Planning for the future is an essential part of achieving success in our industry. Just as we tell borrowers they need to plan in advance for the journey into home ownership, we also have to plan for what’s coming next. What is working today may not be what works two years from now— or may not even work tomorrow. As successful as HomeBridge has become over the last 25 years, it’s not simply because of the sign we hang on our door. Yes, marketing plays a big role in success in the lending world—and that involves everything from logo design to properly hashtagging social media posts, but a key factor in the success I’m seeing in people across the country is their dedication to planning. When refis were booming, a lot of people neglected their purchase business. Some were rookies in our industry and didn’t feel the need to hustle, and some

of us simply got lazy. It happens to the best of us. But one of the things the best players on the field have in common today is that they train in the off-season. They get their rest, which is well deserved, but they’re also preparing to hit the ground running when training camp starts If you got benched after the refi boom, you need to get back into shape if you want to get back into the game. And while some of the plays have changed, the fundamentals have not. A major part of what we do in the sales world is hand-to-hand combat. Where was your purchase business coming from before refis became so popular? Were they referral sources? What happened to them? We need to make time and connect with our colleagues in the field: Real estate agents, builders, attorneys, etc. and get together with them over lunch, coffee, whatever. Don’t underestimate the power of face-to-face communication. I know you’re busy, but everyone is busy! Put the effort in and let these people know you’re alive. Referrals come from relationships. Hand-to-hand combat should be just one part of your new plan. As you’re getting that down, you need to make sure your other marketing elements are in place, both old school and new. In mortgage marketing, you always have old school business-building activities: Advertising in local publications, attending open houses, regular mailers

to your past customers and networking events with referral partners. They may not be as powerful as they used to be, but they can still be very effective. Of course, it’s a new age and that means a bigger focus on digital marketing. Your local newspaper rep can tell you all about the advertising opportunities they have online, but there’s much more out there at your disposal. You’re probably already familiar with Facebook, Twitter, LinkedIn, Instagram and Google+. Each have their value and some may work better for your needs than others, but you should at least have a business presence on the major social networks and know how to use them. For example, in addition to making worthwhile posts on Facebook, are you paying to have them ‘boosted’ and supporting your page with social advertising? You may not need to do this, but you should be aware of how it can help your business. Another great way to promote your business is through blogging and a regular newsletter. They both allow you the opportunity to get your message out, in your own voice. You may be familiar with my video blog, Chasing Excellence. If you’re not, about once a week I distribute a short video and newsletter to my colleagues and clients referencing sales tips and advice from others that I’ve found particularly inspiring in my own career. It helps me market myself and through that, the company I work for.

see my views and comments rise. I’d be lying if I told you otherwise. I’m constantly refining my blog, asking colleagues what they thought of the last episode, testing different formats and the times I distribute it. My blog was far from an overnight success for me. While I’m very comfortable speaking in public, video blogging is a whole different world for me. Assuming you also have limited time and budget, you have to approach your own marketing the same way. Test the waters, but also allow adequate time to measure a return in terms of people walking through your door or awareness in general. Don’t simply run one ad in a local newspaper and then change heart because you didn’t have an influx of people knocking on your door the next day.

Maybe you advertised in the wrong place or perhaps your ad was simply a dud to begin with. Chasing Excellence works great for my needs, but a video blog may not be the right avenue to promote your own business. On the networking side, operate the same way. You have limited time and you can’t meet or be friends with everyone. Target your approach and recruit the best team possible for your individual situation. Find a few people who are likeminded and add them to your personal squad. The best relationships are symbiotic, so make sure you’re able to provide something to those you’re looking to help support you. So what’s your next step? Act as the coach of your own team, review the

game tapes and develop your own strategy. It doesn’t have to involve renovation lending or Facebook, but it should involve standing up, planning and working hard. You can’t hope for excellence in this industry, you have to chase it. Rick Floyd is partner and executive vice president at HomeBridge Financial Services Inc., and brings more than 20 years of leadership to the firm’s sales, marketing, training and operations teams. A football fanatic and former scholastic coach, Rick utilizes the philosophies he learned on the field in motivating and empowering his HomeBridge teams to chase excellence in both their professional and personal lives. You can find Rick’s Chasing Excellence blog at www.ChasingExcellenceBlog.com.

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Video blogs, Facebook, advertising, submitting articles such as the one you’re reading now to influential trade media … I know this seems to be a lot of work and quite frankly, it is. Across the country, sales and marketing people are having to fit more work into the same amount of time. However, this is what it takes to be successful. Chasing Excellence is not part of my official responsibilities with my company. Even though it’s something I started on my own and thoroughly enjoy doing, every minute I spend on my blog cuts into the limited free time I have to spend with my family and friends. I do it because Chasing Excellence provides a platform that I can use to differentiate myself, stay connected and stay relevant. Across the country, I see successful originators chasing excellence in their own way. They’re conducting seminars on renovation lending, blogging or hosting events to increase their awareness with potential borrowers and professionals in our industry. All of the people in our industry who have seen long-term success can contribute a major part of it to actively doing something that maintains it. They may not realize it, but they are. And 99 percent of the time, that ‘something’ is not hoping for the best. Pre-season training isn’t enough to earn you a starting position, or even a spot on the roster. You need to adapt to how the game has changed. If what made you successful before is no longer working, then it’s time update your game plan and learn some new plays. When a football team’s running game is shut down for the first two quarters, they don’t simply keep running the ball and hope things change. After giving their running game a shot, they start passing the ball, even if that’s not their strong suit. You need to do the same thing. If refis were your running game and they’re no longer scoring touchdowns for you, what’s next? It really depends on your market, but for many of you, it could be renovation lending. Renovation lending is out of the comfort zone for many people in our industry. Reno products are lesser known, more complicated and there are more opportunities for things to go south along the way. But, if you practice and prepare for these plays, they can make all the difference in the game’s outcome. I know I’ve thrown a lot at you here, but I don’t expect you to implement it all, nor do I even want you to try. I feel very strongly that you can’t take a shotgun approach to marketing your business. You can’t be everywhere, advertise everyplace or do everything at once. If you take that approach, you’re going to spread yourself too thin. As you develop plans for growing your business, be consistent and thoughtful in your approach. Think about your plays before you hike the ball. You can’t just throw it down the field and hope you score a touchdown. I can tell you with Chasing Excellence it took some time to build momentum and

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.

BetterLoanOfficers.com Crosses 500,000 Profile Mark

well as training resources.

and

coaching

New Penn Acquires Shelter Mortgage Company

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BetterLoanOfficers.com, a loan officer review Web site, has announced that the company has added profiles for more than 500,000 licensed mortgage loan originators to its platform, making it the largest directory of professional loan officers available anywhere and giving every licensed LO in the country access to the BetterLoanOfficers.com’s proprietary feedback and recommendation platform. The addition of this data will allow consumers across the nation to track down the specific loan officers they’ve worked with and relate their personal and professional experiences in detail. “We’ve built the first online system to allow good loan officers to curate their own collection of positive reviews and recommendations,” said Rene Rodriguez, founder and chief executive officer of BetterLoanOfficers.com. “No one has a larger database of professional loan officers. With the addition of these new records, we have now made our powerful functionality available to every licensed loan officer in the country. In fact, those LOs already have profiles on our website, ready and waiting for them to claim.” According to current research, 85 percent of consumers look at online reviews before making a purchase and 79 percent of consumers trust online reviews as much as personal recommendations. BetterLoanOfficers.com gives LOs the power to take control of their own online reputations, before someone else does. The site’s reviews serve to boost consumer trust, but also can pinpoint exactly what loan officers need to work on in order to improve their business standards and performance. The site also serves as a way to empower loan officers to achieve higher performance benchmarks by providing access to industry best practices, as

National mortgage lender New Penn Financial LLC has announced the acquisition of Shelter Mortgage Company, a fullservice mortgage lender headquartered in Milwaukee, Wis. Founded in 1984, Shelter Mortgage has built its business through a partnership-based model, by developing strong relationships with real estate agents, builders, and relocation companies and focusing on purchase money loans. Upon completion of the acquisition, Shelter Mortgage and its subsidiaries will become a wholly owned subsidiary of New Penn Financial/Shellpoint Partners LLC. By joining forces with Shelter Mortgage Company, its joint venture partners, and the Shelter Lending Services entities, New Penn Financial significantly expands its share of the mortgage market and doubles the size of its retail channel. “The acquisition of Shelter Mortgage reinforces our position as a leader in the mortgage lending market,” said Jerry Schiano, president and CEO of New Penn. “Their long history of building significant relationships with referral sources makes Shelter Mortgage a perfect complement to New Penn’s focus, financial strength, and diversity of products.” “We are extremely excited to become part of the New Penn family of companies and recognize the immediate value the relationship will bring, beginning with the diverse mix of Agency and Non-Agency products we’ll now be able to offer,” said Shelter Mortgage Company CEO Marc McManus, who will continue his lead-

ership role in the new organization. Shellpoint Partners, the specialty finance firm that owns New Penn Financial, continues to strengthen its mortgage-focused platform with the acquisition of Shelter Mortgage. “Shelter Mortgage represents a strategic addition to our comprehensive family of mortgage-based companies,” said Bruce Williams, co-CEO of Shellpoint Partners. “This partnership immediately adds significant scale to our retail platform and further distinguishes our position as a leader in the industry.”

AllRegs Announces Award to Publish FHA Guidelines AllRegs has been named the official publisher for FHA Single-Family policies. Aspects of the FHA agreement include publishing, training, customer service and project management. Details of the publishing platform include searchable access to both current and archived documents, the ability to perform dynamic searches using keywords and synonyms, and the ability to export content into user modifiable formats. “Since founding this company in 1989 my goal has been twofold; to create a central location where industry professionals can go for fast, reliable answers and to provide a cost-effective method of information management for all industry participants,” said Glenn Ford, founder and CEO of AllRegs. “Adding the FHA to our roster of publishing customers brings us one step closer to realizing that goal.”

HomeBridge Continues Midwest Expansion HomeBridge Financial Services Inc. continues its Midwest growth with a

new branch in the Columbus, Ohio, suburb of Westerville. While HomeBridge is one of the faster growing mortgage exclusive lenders in the country, the company is no stranger to providing the high levels of customer service residents expect in what has been called one of the best suburban cities in America. Todd Pennington, an Ohio native and 20-year veteran of the local mortgage industry, will lead HomeBridge’s new Westerville branch. While HomeBridge offers all of the traditional mortgage products one would expect from a national mortgage lender, it is the company’s leadership in renovation lending, along with its dedication to customer service, which sets it apart from other financial institutions. HomeBridge is the third largest producer of FHA 203(k) mortgage products in the country, due in part to its dedicated Renovation Concierge Service, which supervises the entire process to ensure everything stays on track. “I chose to join HomeBridge not only because of the company’s dedication to customer service, but also because it has the financial stability that home buyers, Realtors and the local building community need when it comes to residential mortgages,” commented Pennington. “After 20 years in the Ohio mortgage industry, I’m thrilled to be bringing HomeBridge’s way of doing business to the greater Columbus area.” In addition to its new Westerville branch, HomeBridge’s recent western expansion from its home state of New Jersey has included multiple locations in Pennsylvania, Illinois, Arizona and California. With further growth on the horizon, HomeBridge is also looking to bring additional mortgage industry professionals into the Westerville branch, as well as other locations across the Midwest.

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nmp news flash continued from page 16

a home, even without student loans Some of the counties that were unaffordable for recent graduates making the median income even without student loans were led by San Francisco County, where the minimum income needed to buy a median-priced home without student loan debt was $63,301 less than the county’s median household income. Other counties unaffordable even for recent graduates without student loans included New York County (Manhattan, with $55,306 median income deficit), Kings County, N.Y.,

Wells Fargo Tops MBA Survey of Commercial and Multifamily Mortgage Servicers’ Volumes The Mortgage Bankers Association (MBA) released its mid-year ranking of commercial and multifamily mortgage servicers’ volumes as of June 30, 2014. At the top of the list of firms is Wells Fargo with $446.8 billion in U.S. master and primary servicing, followed by PNC Real Estate/Midland Loan Services with $378.2 billion, Berkadia Commercial Mortgage LLC with $242.9 billion, continued on page 58

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Using median home price data collected from public records along with average student loan debt by state from The Institute for College Access & Success, the report examined the minimum amount of income needed to purchase a median priced home with and without student loans in 494 counties, each with a population of at least 100,000 and where sufficient data was available. In 475 counties (96 percent), recent graduates making the median income and having the average student loan debt for the state could afford to buy a median-priced home. Affordable for this analysis was considered up to a maximum 43 percent of income spent on house payment (including taxes and insurance) assuming a 20 percent down payment and a 30-year loan with a 4.13 percent fixed interest rate. “Contrary to much rampant speculation that student loan debt is holding back homeownership among recent graduates, we found that the vast majority of markets are affordable for recent graduates making the median household income—even many of those recent graduates with student loans,” said Daren Blomquist, vice president at RealtyTrac. “However, student loans still represent a significant handicap for recent graduates in terms of the minimum income needed to buy a median priced home. Nationwide, recent graduates with student loans need to earn 34 percent more ($8,969) than recent graduates without student loans to be able to afford a medianpriced home.” Student loans biggest hindrance to affordability in Michigan, Ohio, Pennsylvania States where recent graduates with student loans needed to make up the biggest percentage in income to equal the buying power of those without student loans were Michigan (55 percent), Ohio (53 percent), Pennsylvania (49 percent), Iowa (48 percent), and Alabama (47 percent). Affordability for median-income earners was still good in all of these states, with the median household income comfortably above the minimum income needed to buy a median priced home—even with student loan debt. But the average amount of student loan debt in these states was large relative to median home prices, resulting in a bigger percentage impact on home affordability. States where student loan debt had the least percentage impact on income needed to buy a median priced home included California (graduates with student loans need to earn 12 percent more than graduates without student loans), New York (17 percent), Virginia (17 percent), Massachusetts (18 percent) and Wyoming (19 percent). There were 12 counties of the 494 analyzed where students making the median income could not afford to buy

(Brooklyn, with a $35,989 median income deficit), San Mateo County, Calif., ($30,715 median income deficit), and Marin County, Calif., ($26,886 median income deficit). Student loan debt makes or breaks affordability in just seven of counties analyzed There were only seven counties out of the total 494 analyzed where having student loans means the difference between being able to afford to buy a home or not for recent graduates making the median household income. Those counties were San Diego County, Calif., and Westchester, N.Y., and five other California counties: Sonoma, Monterey, San Luis Obispo, Yolo and Napa.

LYKKEN ON

leadership

How to Future-Proof Your Culture By David Lykken When I think about the future of the mortgage industry, a number of things come to mind. First

of all, there are the internal items such as changes to the technologies we use, structural changes like moving from broker to banker, and methodological changes such as our strategies for getting more deals in the pipeline. And

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then there are the external items such changes in consumer trends like the new values of millennial buyers and, of course, changes in the regulatory environment. All of these things are important to discuss and there are many great leaders in our industry weighing in on these topics. However, when we look at the items we consider when we typically think about the future of the mortgage industry, they mostly tend to have one thing in common: They are predictions. The questions we ask typically have to do with the environment we will encounter in the future. Of course, I believe it is a great idea to consider what we will be facing in the future. Otherwise, how can we plan for it? That being said, I would like to address something a little different in this article. Rather than asking what the future will be like for the mortgage industry, I want to reflect on what leaders of organizations in the mortgage industry can do to strengthen their organizations for the future—no matter what it will bring. Instead of asking, “What will the environment be like in the future?” I want to ask, “How can we deal with it?” In order to address this question, I want to look at the one thing that I believe can prepare organizations for an unknown future more so than anything else—I want to look at organizational culture. More specifically, I want to look at the organizational culture of the leadership team. When most people think of “organizational culture,” they think of the interactions of employees with one another. What I’m talking about is how the members of your leadership team interact with one another. As with everything else, a great organizational culture begins with leadership.

A culture of trust Culture necessarily begins with trust. If the members of your leadership team cannot trust one another, all genuine communication will break down and you will be left with a bunch of strangers pretending to understand one another when they really don’t. At its core, trust is all about being comfortable with one another. It’s about having the willingness to be vulnerable. Without a strong sense of trust, the people on your team will withhold their best ideas for fear of ridicule. When people start to trust one another, they open up and the best ideas come pouring out. When you have all of the ideas on the table, you can begin sorting through them together. And, when trust has been established, people won’t fear constructive criticism because they will know that others on the team have their best interests in mind. If the members of your leadership team don’t currently trust each other deeply, start there. Without trust, you have nothing.

A culture of clarity Many times, clarity will naturally follow trust. As I mentioned, when you trust someone, you are much more likely to open up and be authentic with them. If the members of your leadership team trust each other, they will most likely begin to tell the whole story instead of holding back certain things that they are afraid to tell others. That being said, in order to develop a culture of clarity, you do have to be a little proactive. When I talk about clarity, I’m talking about laying out specifically the functions of each member of the team. In a culture of clarity, each member of the team knows exactly what others on the team expects of him or her. The benefit

of such a culture is quite obvious. When people know what is expected of them, they are more likely to act accordingly. In a culture of clarity, confusion is minimized and people don’t waste time arguing over who is responsible for what. When roles are clear, the team is liberated to function like a well-oiled machine. And that’s when things start getting done.

A culture of accountability Naturally following clarity is accountability. Not only is it important that each member of the team knows the role they play, but it is also important that they are held accountable for fulfilling that role successfully. Without being held accountable, even the most wellintentioned and noble of leaders can become lazy. Even the best leaders among us will tell you that they really on others to help keep them in check. Have you heard of the term “accountability partner?” In a variety of settings, an accountability partner is a friend who helps you stay on track for whatever goal you are trying to accomplish. In a culture of accountability, you have an “accountability team.” Every member of the team holds every other member accountable and, as a result, you grow stronger.

something they’ve done. People want to feel like they matter. If they feel like they are valued for the work they’re doing, the members of your team will not only stay with your organization— they’ll put their hearts and souls into everything they do for it. Going into the future, those who survive will be those who are prepared to face any changes they encounter. If the culture is strong in your leadership team, I’m convinced that there isn’t anything you can’t survive. And not only will you survive, but you will thrive. Your culture is the one thing that cannot be copied. And it’s the one thing

that cannot be hired. It can only be developed. There’s no time like the present. Start developing your organizational culture now. The future will thank you for it. David Lykken is 40-year mortgage industry veteran who has been an owner operator in three mortgage banking companies and a software company. As a former business owner/operator, today David loves helping C-Level executives and business owners achieve extraordinary results via consulting, coaching and communications, with the objective of eliminating corporate dysfunction, establishing

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

A culture of communication 41

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n National Mortgage Professional Magazine n OCTOBER 2014

A culture of recognition One final item in developing a strong organization culture in your leadership team is recognition. People must feel that they are valued for their contribution. If they don’t, they’ll either go elsewhere or it will become evident that they want to. If you want to keep your leaders committed to your organization, you’ve got to reward them. Sometimes, that means compensating them fairly for the value they are bringing to the team. But, more often than not, it simply means acknowledging them for the work that they are doing. This may seem silly, but during each meeting, you might want to try having each person go around in a circle and thank someone else on the team for

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In a strong organizational culture, communications must be constant. In today’s world of rapidly evolving technology, communication is already constant but, at the same time, it’s getting easier and easier to lose touch with one another. While I am certainly a fan of email and social media, I think we sometimes neglect face-to-face interaction to a fault. E-mail is quicker, as it saves time in everyone’s busy schedule. But you can’t automate relationships. It’s a big trend in business today to devalue the traditional meeting as a waste of time. But I think meetings can be beneficial, because they get members of leadership team in one room to interact with one another. And that interaction is the glue that holds the team together. No amount of emails or text messages can take its place.

Prepared for Takeoff: The CFPB eClosing Pilot Program By Ray Hagan In April of this year, the Consumer Financial Protection Bureau (CFPB) published a report, “Mortgage Closings Today,” regarding issues that consumers are experiencing in the mortgage closing process, including the lack of time to review documents; the overwhelming stack of paperwork; and the complexity of documents and errors. In a previous article titled, “eClosings–Risky Venture or Wave of the Future?,” we stated that the CFPB identified electronic closings (eClosings) as a solution to address these issues and planned to launch a pilot program that would help them gain a better understanding of the role eClosings can play in helping address consumer concerns. Recently, the CFPB announced that it has selected 12 vendors and creditors to participate in the three-month eClosing pilot program that will begin later this year. The participants include the following: l Vendors: Accenture Mortgage Cadence, DocMagic Inc., eLynx, Pavaso Inc., and PeirsonPatterson LLP l Creditors: Blanco National Bank, Boeing Employees Credit Union, Franklin First Financial Ltd., Flagstar Bank, Mountain America Credit Union, Sierra Pacific Mortgage, and Universal American Mortgage Company.

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According to the CFPB, the eClosing pilot program “will explore how the increased use of technology during the mortgage closing process could affect consumer understanding and engagement and save time and money for consumers, lenders and other market participants.” The pilot program will study many eClosing features, including those that may help the CFPB: l Further understand how educational materials that can be reviewed prior to closing can help improve the process for consumers; l Further understand the technologies that would allow consumers to review the closing documents prior to closing and how the early review of documents may affect the consumer’s experience; and l Study how eClosings can save time and money for both consumers and industry members. In April, the CFPB stated it has three core objectives for its pilot program that includes: l Collecting data to examine the potential benefits and risks of current eClosing solutions and potential new functionalities aimed at helping the consumer play a more active role in the closing process; l Highlighting successful solutions in the marketplace to gain a better understanding of how these actors have overcome barriers to adoption and to demonstrate how viable solutions could be adopted more broadly; and l Enhancing industry dialogue around eClosings, bringing all parties together to tackle barriers to adoption, dispel myths, and foster greater collaboration to improve the closing process. The eClosing pilot program is part of the CFPB's "Know Before You Owe" initiative, an initiative launched in preparation for the rules regarding the RESPA and TILA disclosure integration and is continuing for this process. To read previous articles or to subscribe to e-mail updates, visit www.allregs.com Ray Hagan is senior regulatory compliance analyst at AllRegs. First introduced in 1989, AllRegs is used by virtually all of the top 100 lenders as well as throughout numerous governmental agencies, including Fannie Mae, Freddie Mac, the FHLBs, FHA, VA, RHS, Ginnie Mae, and more. AllRegs is the exclusive electronic publisher of the Fannie Mae and Freddie Mac Single and Multi-Family Seller/Servicer Guides and the Federal Home Loan Banks’ MPF Program Guidelines. Products include single and multifamily underwriting and insuring guidelines as well as federal compliance laws and regulations, state compliance laws and regulations with plain-language analyses, contract publishing services, and a library of historical guidelines. The educational division, AllRegs Academy, offers virtual and live training, as well as designation and online guides. The Professional Services Group develops custom guides, policy manuals, and other documents on a contract basis. For more information, call (800) 8484904 or visit www.allregs.com.

SPONSORED EDITORIAL

heard on the street continued from page 38

our partnership with MortgageFlex, we Paperless Loan Closing, Courtesy of DocMagic and plan to enhance its mission of providing hands-on access to timely and compeMountain America DocMagic Inc. has announced that the firm has partnered with Mountain America Credit Union to provide a paperless loan closing, this time for a loan insured by the Veteran’s Administration. To the company’s knowledge, this is one of the first VA loans that have been closed electronically since the VA made the announcement that it would begin accepting eSigned loan documents late last year. “Mountain America Credit Union is committed to serving the men and women of the armed forces—both those currently serving and our veterans—by offering VA loans in a paperless environment,” said Amy Moser, vice president and mortgage services manager for the Utah-based credit union. “Until now, few institutions could serve our military personnel effectively, especially those serving overseas. This loan closing proves that we can accommodate the needs of our armed forces personnel and veterans no matter where in the world they may be.” “The government agencies involved in the home finance industry have now all confirmed that eSign is an important technology for the future,” said Tim Anderson, director of eServices for DocMagic. “Mountain America Credit Union has led the way again, becoming among the first, if not the first, to go the distance with paperless origination of a VA loan. We congratulate Mountain America for their leadership and for making it easier to do business with them than their paper based competitors.”

Lenders Compliance Group Forms Partnership With MortgageFlex

Lenders Compliance Group Inc. (LCG) has announced that it has formed a partnership with MortgageFlex Systems Inc., a provider of loan origination and servicing technology. LCG is a national, full-service, mortgage risk management firm specializing in residential mortgage compliance, with an emphasis focused on operational assessment and improvement, benchmarking methodologies, best practices, regulatory compliance, while offering a suite of services in residential mortgage banking. “As a leader in loan origination systems, MortgageFlex has shown a deep commitment to offering its clients outstanding products and services, fully supported by an effective commitment to reliable compliance,” said Jonathan Foxx, president and managing director of Lenders Compliance Group. “Through

tent regulatory compliance guidance, while also ensuring that the LoanQuest LOS fully meets the CFPB standards.” MortgageFlex utilizes a threepronged compliance approach to risk management. The LoanQuest loan origination system has continual compliance calculations backed up with seamless integrations to third-party document providers, in addition to a partnership with the Lenders Compliance Group. “Compliance is our customer’s key focus and it is our responsibility to deliver a secure system that is federally compliant,” said Craig Bechtle, chief operating officer of MortgageFlex. ”While the upcoming RESPA changes are being touted as beastly by some vendors, there’s no reason for panic if your technology vendor is acting proactively and taking their customers’ needs into consideration.” As an additional service, the Lenders Compliance Group will interact with customers during MortgageFlex’s monthly compliance conference calls, answering or clarifying concerns.

Credit Plus Named Preferred Vendor by Lenders One

Credit Plus has been named a Preferred Partner for Lenders One Mortgage Cooperative, a national alliance of community mortgage bankers, correspondent lenders, and suppliers of mortgage products and services. As a Preferred Partner, Credit Plus will provide Lenders One members with an extensive range of thirdparty verification services including tri-merge credit reports, scoring tools, undisclosed debt verifications, employment verifications, FraudPlus and more. “We’re delighted to become part of the Lenders One family,” said Greg Holmes, national director of sales and marketing for Credit Plus. “In today’s more regulated environment, our suite of verification products gives lenders the assurance they need to stay compliant, make informed decisions, forecast long-term loan performance, and have greater confidence funding both QM and non-QM loans.” With more than 160 products and services for mortgage professionals, Credit Plus will be able to help Lenders One members operate more efficiently, lower their costs, stay compliant, and close more loans. Thirdparty verification products offered by continued on page 58

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Can theWealth Building H the

Mortgage Market?

By Phil Hall The continued stagnation of the mortgage market can be traced to many issues, most notably the lack of variety in loan offerings. Today, most originators seem to be serving what is euphemistically known as “plain vanilla” mortgages—occasional bits of spice, like jumbo mortgages or reverse

mortgages, are only adding a trace of variety to a bland product slate. However, a brand new concept in home loans promises to revitalize the mortgage market by targeting lowincome borrowers—an ironic consideration, since this demographic have been mostly shut out of homeownership following the 2008 crash. Dubbed the Wealth Building Home Loan (WBHL), the most amazing aspect of its arrival is its source: the

new product is not the creation of an innovative lender, but a right-of-center Washington think tank. The WBHL is the creation of Edward J. Pinto and Stephen D. Oliner, co-directors of the International Center for Housing Risk at the American Enterprise Institute (AEI). In an exclusive interview with National Mortgage Professional Magazine, Pinto explained that the WBHL—a 15-year, fully amortizing,

fixed-rate loan—achieves goals that that 30-year loans fail to achieve. “It has the buying power that is pretty close to what a 30-year FHA loan had,” Pinto said. “But, it builds wealth very quickly because of the 15-year amortization. The problem with the 30-year loan is twofold: One, it is a very slowly amortizing loan. And, two, it is combined with very high leverage—both debt-to-income and low downpayment—and all of

“The Wealth Building Home Loan says, ‘Let’s put a reverse on what we’ve been doing wrong for the last 50 years. What we really need is a shorter-term amortization And let’s make that work.” —Edward J. Pinto, Co-Director, International Center for Housing Risk at the American Enterprise Institute (AEI)

Home Loan Reanimate 1940s to 62 percent in 1960,” Pinto added. “And that was a period when we had very conservative, rational underwriting standards—not a lot of leverage. Starting in the 1960s, we’ve been practicing this curious policy of adding more and more leverage— and as house prices have gone up, we’ve been chasing our tail by adding more leverage. The result is something that everyone is familiar with: We had a huge boom, houses became

unaffordable, and we had a huge crash—and we’re still recovering from that huge crash. Einstein said, ‘When you look at a problem and what causes the problem, the chances are you cannot solve the problem with more of the same.’ What are we trying to do today? We are trying to solve a problem we created with too much leverage. With what? More leverage. The Wealth Building Home Loan says, ‘Let’s put a reverse on what

we’ve been doing wrong for the last 50 years. What we really need is a shorter-term amortization And let’s make that work.’” More information on the WBHL is available at the AEI Web site at www.aei.org. Phil Hall is managing editor of National Mortgage Professional Magazine. He may be reached by e-mail at philh@nmpmediacorp.com.

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*Carrington will process any qualifying loan from the time a loan file is submitted to underwriting to the time it funds within 15 business days of appraisal receipt or the company will apply a closing cost credit of $500 to the loan once the loan closes. In order to receive the closing cost credit, any delay that causes the loan to close more than 15 days after appraisal receipt must be due to Carrington’s independent processes. If the delay is due to the broker, borrower’s or third party’s action or inaction or any other circumstances outside of Carrington’s control, the closing cost offer will be void. This offer excludes some loan programs, such as VA loans, USDA loans, 203K Loans Short Sales, New Construction loans, loans requiring property repairs, inspection, or re-inspection prior to closing, loans requiring condo approvals and flips. Offer is subject to revision or cancellation at any time. The appraisal received date is recorded in Pipeline Manager for all qualifying loans. Some loans may require additional information and be returned. Exclusions apply; contact your Account Executive for details. © Copyright 2007-2014 Carrington Mortgage Services, LLC headquartered at 1610 E. Saint Andrew Place, Suite B150, Santa Ana, CA 92705. Toll Free (800)561-4567. NMLS ID 2600. Nationwide Mortgage Licensing System (NMLS) Consumer Access Web Site: www.nmlsconsumeraccess.org. AZ: Mortgage Banker BK-0910745; 2159 McCulloch Blvd 4, Lake Havasu City, AZ 86403. CA: Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, File No. 413 0904. CO: Check the license status of your mortgage loan originator at http://www.dora.state.co.us/real-estate/index.htm. GA: Georgia Residential Mortgage Licensee 22721. IL: Illinois Residential Mortgage Licensee. MN: This is not an offer to enter into an interest rate lock agreement under Minnesota Law. MO: Residential Mortgage Broker License 09-1746-S. NH: Licensed by the New Hampshire Banking Department. NJ: Licensed by the N.J. Department of Banking and Insurance. NY: Licensed Mortgage Banker—NYS Department of Financial Services. New York Mortgage Banker License B500980/107664. OH: Ohio Mortgage Broker Act Mortgage Banker Exemption MBMB.850208.000 (FHA DE & VA Automatic loans only) OR: Mortgage Lender License ML-4886. PA: Licensed by the Department of Banking. RI: Rhode Island Licensed Lender, Lender License 20112809LL. VA: Licensed by the Virginia State Corporation Commission MC-5382. WA: Consumer Loan License CL-2600. Also licensed in AL, AR, CT, DE, DC, FL, ID, IN, ME, MD, MI, NM, NC, OK, SC, TN, TX, WV and WI. NOTICE: All loans are subject to credit, underwriting, and property approval guidelines. Offered loan products may vary by state. There is no guarantee that all borrowers will qualify. Restrictions may apply. This is not a commitment to lend. Terms, conditions, and programs are subject to change without notice. This information is for mortgage professionals only and is not intended for distribution to consumers. Carrington Mortgage Services is not acting on behalf of or at the direction of HUD/FHA or any office of the federal government. All rights reserved.

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that together leads to a lot of risk. And, it is used to buy a very volatile asset—namely, a home. Chip Case, of the Case-Shiller Index, in July was quoted as saying that buying a house is a crap shoot because you are only buying one address—a single address—and it is not diversified, and it is incredibly volatile.” According to Pinto, the WBHL’s 15year loan rate is 0.75 percent below the FHA 30-year rate. He added that the annual credit risk expense on the WBHL is lower, while a maximum loan-to-value ratio) of 100 percent allows for repurposing the five percent in downpayment funds for a 1.25 percent permanent rate buydown. He also stressed that loan’s savings component, hence its “Wealth Building” moniker. “If you do a 15-year loan the way we suggest doing it, 77 percent of the principal and interest goes to principal,” Pinto explained. “So, if you’re paying $1,000 a month on principal and interest, $770 is going to principal repayment. On the 30-year loan, 67 percent is going to pay interest. If you think about the principal repayment [on a 30-year loan], you are moving money from your left pocket to your right pocket. The AEI is now working with then Neighborhood Assistance Corporation of America (NACA) and Bank of America on pilot programs. “We’re talking to other lenders about doing both traditional lowincome programs and a middleincome or no-income associated program that anyone can utilize,” Pinto said. Pinto, who was a former executive vice president and chief credit officer at Fannie Mae and president and CEO of ICBA (Independent Community Bankers of America) SmartLender LLC, noted that the philosophy and design of the WBHL is based on reverse engineering the past half-century of U.S. housing finance policy. “The policy we’ve had for the last 50 years is a very strange one for housing,” Pinto said. “We’ve basically said: ‘We want to drive up the homeownership rate. And the way we’re going to do it is by putting lowincome people with volatile incomes into highly leveraged loans.’ And lowincome homes are even more volatile. We’ve looked at Zillow and every city we’ve checked the lowincome price range was much more volatile and had bigger declines than the high-income homes in the same city. That’s a crazy policy and it hasn’t worked. “If we look back, our homeownership rate grew from 44 percent in the

N A T I O N A L

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THE By Dave Hershman f 2014 was a one mile race, we would now being heading down the last lap. It has been an interesting year. We started with a long, cold and snowy winter. We then began to thaw out and just as the sun started shining, the world seemed to erupt in crisis. But like many obstacles we have faced during the recovery, from natural disasters to fiscal calamities, we seem to move

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ahead slowly but surely. The big question is, will the last lap feature us gaining speed during the straightaway or will be hampered by another road block. If the year has been like a one mile race, then the recovery from the recession has been a marathon. Actually, 26.5 miles may not describe the trek we have gone through. But like the year, we are coming into the final lap, though this is a much longer lap. If we gain momentum during the last quarter of the year,

STRETCH we will be able to see but not reach the finish line. This year we have marked a full five years of recovery, one of the longest recoveries from a recession in history, but also one of the weakest. Many now predict two years or more before we can be considered fully recovered, but the last lap of 2014 could change that story. As we go to publication in early October, the release of the September employment report will give us a hint of how much speed we will have gar-

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nered going into the last lap of 2014. The August report was mildly disappointing but we definitely have seen some momentum built up during the majority of 2014. If the numbers released in early October include an upward revision of last month’s numbers or September’s numbers move back towards or over 200,000 jobs added, the one slow report will be seen as nothing more than a pebble in the road instead of a road block. Then we can rev things up and hopefully we don’t have a huge snowstorm in November. Hopefully the weatherman will cooperate in this regard. Meanwhile, strong employment reports closing out 2014 may very well mean that the Fed’s definition of “considerable time” before rates are raised might become a bit more constricted in terms of a target date. At the last meeting of the Federal Open Market Committee (FOMC) in the middle of September, the markets were satisfied that the Fed’s use of the term of “considerable time” gave us some breathing room but of course the phrase itself is nebulous. The good news is that September’s inflation numbers were very tame which gives the Fed plenty of room to hold off on rate increases for now? Dave Hershman is a top author in the mortgage industry with seven books published. He is also the founder of the OriginationPro Marketing System, and currently the director of branch support for McLean Mortgage. He may be reached by e-mail at dave@hershmangroup.com or visit www.originationpro.com.

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Maverick Funding Corp. NMLS#7706, Executive Offices, Offfices, f 9 Entin Road, Suite 200, Parsippany, Parsippany, NJ 07054. Toll Toll o Free 888-616-6866. Licensed by the California Department of Corporations under the California Residential Mortgage Lending Act, License #4131048. Licensed by the California Department of Corporations under the California Finance Lenders Law Law, w,, License #603H799. Illinois Residential Mortgage Licensee, License #MB.6760891, Massachusetts Lender License #ML3257; Michigan 1st Mortgage Broker/Lender/Servicer Registrant #FR0018028; License Licensed d by the New Hampshire Banking Department; Licensed by the NJ Department of Banking and Insurance; Licensed by the Pennsylvania Department of Banking; Rhode Island Licensed Lender; Licensed by the Virginia Virginia State Corporation Commission, License #MC5352; Oregon Mortgage Lending License ML-4961; Licensed Lender SC; Texas Texas e Mortgage Banker Registration; Washington Washington a Consumer Loan License #CL7706, #C Licensed Wisconsin Mortgage Banker Banker,, also Licensed in AL, CO, CT,, DC, DC DE, FL, GA, IN, KY KY, Y, ME, MD, MN, NC, OH, TN, VT,, WV WV.. Equal Housing Lender Lender.. www.nmlsconsumeraccess.org www.nmlsconsumeraccess.org

TALES FROM THE CLOSING TABLE By Andrew Liput The mortgage closing transaction is the single largest financial transaction in the lives of most consumers, and it is also the riskiest stage of the mortgage process for lenders. While the vast majority of lawyers and notaries and title agents are experienced, ethical and diligent professionals, for a few the role of closing agent is too tempting a lure for selfish criminal intent. This monthly column addresses the good, the bad and the ugly …

Top industry news … CFPB eClosing pilot details announced The eClosing pilot is part of the CFPB’s “Know Before You Owe” mortgage initiative. The companies participating in the pilot are a mix of technology vendors providing eClosing solutions, and creditors that have contracted to close loans using those solutions. The participants being announced today are: Accenture Mortgage Cadence; DocMagic Inc.; eLynx, Pavaso Inc., and Pierson Patterson LLP as vendors, and Blanco National Bank, Boeing Employees Credit Union, Franklin First Financial Ltd., Flagstar Bank, Mountain America Credit Union, Sierra Pacific Mortgage, and Universal American Mortgage Company as lenders. According to the CFPB Web site, the pilot will study many eClosing features, including those that may enable better consumer understanding of the loan file, incentivize consumer engagement through early document review, and make processes more efficient. The CFPB plans to study how electronic closings may help both consumers and industry members save time and money by preventing last-minute surprises and unnecessary bottlenecks caused by outdated processes.

You cannot make this stuff up! l In North Carolina, a former NFL football player was sentenced to serve 46 months in federal prison, to be followed by two years of supervised release, for his role in a multi-million mortgage fraud conspiracy. The former player and his conspirators used false documents to support mortgage transactions and recruited a bank insider to assist in the scheme. l A former mayor of a town in New Jersey was convicted on charges of mortgage fraud. The jury found that the man provided falsified tax returns, including a falsified tax return for a relative whose name was also on the loan application, as well as falsely reported cash assets. l An accountant from Pennsylvania was sentenced to 40 months in prison for conspiring to defraud a Texas lender operating in the state, which had been targeted for extortionate takeover and looting by a group led by a local organized crime family. l A Nevada family court judge and four co-defendants pleaded guilty to conspiracy charges for defrauding over 22 people of millions in an investment fraud scheme involving real estate transactions. As part of his plea agreement with the government, the judge agreed to step down from the bench and surrender his law license to the State Bar of Nevada. l A Connecticut man pleaded guilty in federal court to conspiracy and money laundering offenses stemming from his role in a mortgage fraud scheme that involved dozens of Connecticut properties. According to court documents and statements made in court, he and others conspired to defraud banks and mortgage lenders in obtaining dozens of mortgages for the sale of properties using straw borrowers, false mortgage applications, false HUD-1 forms and fraudulent down payments in connection with the purchase of nearly 50 houses throughout the state. continued on page 50

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info@tagquest.com

www.TagQuest.com

Social Media

continued from page 48

Regulatory updates … Are regulations hurting mortgage lending volume?

Marketing in the Year We Actually Live In By Brian Karoff There is a fundamental reason why marketers go out of business. They do not market and execute in the world we actually live in. What does that mean? We have a generation of millennials among us and they speak social. Traditional media such as billboards, print, TV and radio do not reach these millennials the way it did with the Baby Boomer population. Peter Drucker once said, “Business has only two functions, marketing and innovation.” This couldn’t be truer today and marketing in the world we actually live in means we need to understand how to create a dynamic social media strategy. When developing your social strategy, the goal is to create a “Viral Cycle.” To create this, there are four areas to the cycle, and it continues to go around and evolve. Goals, Content, Target and Amplification Be very clear with the goals you are looking to achieve. To have a strategy is to have an ultimate goal, and with every strategy comes risk and reward. Create strategic objectives inside your ultimate goal so when you’re ready for production, it’s a clear path. Content is another major chunk of this, and there are three areas of content to focus on that produce the sales funnel.

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Audience, Engagement and Conversion First you need to create content to build your audience. Once you have an audience, you need to engage your audience. Remember, social media is not about you, it’s about them. Facebook’s graph search will give you everything you need to build a social affinity graph. If you skip the first two, it makes it harder to grow conversions and gain trust. Targeting is exciting for most marketers, especially with Facebook’s data. You can create custom audiences with your existing database of customers, and filter through to micro-target specific audiences you’re looking for. You can target by their interests, behaviors, income, if they are parents, what job titles they have, what company they work for, where they live, and all the while creating lookalike audiences for segmenting growth. Amplification of a brand’s story is the key To build your audience you need to amplify, to create engagement you need to amplify, and to create conversions you need to amplify. Facebook’s organic reach is at its lowest point of 6.51 percent to seven percent of your audience. The amplification on top of your organic reach with the right targeting, the right content will help you achieve your goals when carrying out your social strategy. Learn how to create Facebook dark posts, listen and monitor Twitter for buying signals and create conversations, share photos that people care about on Instagram, network on LinkedIn and begin sharing your stories and reviews. Now your marketing in the world we actually live in. If you’re interested in learning more about the “Viral Cycle,” please visit http://blog.betterloanofficers.com/viral-cycle. Brian Karoff is the digital marketing manager for BetterLoanOfficers.com, a powerful and easy-to-use online loan officer review management system. Loan officers can collect, manage and promote their views in order to build trust, secure more referral relationships and close more deals. Brian is a dynamic leader and entrepreneur working with business leaders and executives from all over the world. He has worked with Chet Holmes and Tony Robbins in producing the Ultimate Business Mastery System and consults clients on business growth through marketing and technology.

According to a report in BusinessWeek, U.S. mortgage lending is contracting to levels not seen since 1997, when Derek Jeter was still a future HOFer. Wells Fargo Chase, the two largest U.S. mortgage lenders, have reported a plunge in loan volumes that’s part of an industry-wide drop off. Lenders made $226 billion of mortgages in the first quarter of 2014, the smallest quarterly amount since 1997 and less than one-third of the 2006 average, according to the Mortgage Bankers Association (MBA) in Washington. New QM and ATR regulations, tighter underwriting, and higher operating costs due to soaring compliance expenses, are hurting volume and margins. As winter approaches many lenders are hunkering down hoping to ride out the offseason until spring of 2015.

Meanwhile, layoffs are up 40 percent industrywide.

On the lighter side … “I need a raise in my commissions,” the mortgage loan originator said to his sales manager. “There are four other companies after me.” “Is that so?” asked the manager incredulously. “What other companies are after you?” The MLO replied, “The electric company, the telephone company, the cable company, and the gas company.” Andrew Liput has been a corporate, real estate and banking attorney for more than 25 years He is the founder, CEO and president of SSI, the first data intelligence and risk analytics firm to offer specialized vendor management services addressing settlement agent risk to mortgage lenders and banks nationwide. He can be reached by e-mail at aliput@securesettlements.com.

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l Office supplies are on the top of office workers’ list of items lost in the last year with close to three in 10 (28 percent) have lost a file folder in the past year. l Eighty-seven percent of office workers say when their workspace is disorganized they feel they are less productive than when their workspace is organized. l Eighty-six percent agree that having a disorganized workspace is unprofessional l Thirty percent of office workers have lost out on getting reimbursed for a business or travel expense because they misplaced or lost a receipt. Being organized is defined as something being arranged or planned in a particular way. While the arranged part might fall more under the “O.C.D” definition in some situations I am teased about, certainly most would agree that planning is

vital for the success of any organization and goal. This leads me to believe that the most efficient systems in the workplace for production and growth, must have a strong emphasis on organization. This includes not having “clutter” both physically, electronically, and mentally getting in the way of your next task or goal. This week, look around your physical and electronic workspace and see if there are areas that can be improved for greater efficiency. You might be surprised by what can be realized if you’re more organized. Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and 2010-2011 president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431, e-mail aharris@vantagemortgagegroup.com or visit www.vantagemortgagegroup.com.

loanestimatetable This chart was provided by Lenders Compliance Group and sponsored by National Mortgage Professional Magazine.

Easy pull-out section to keep for your reference. SPONSORED EDITORIAL

SPONSORED EDITORIAL

nmp news flash continued from page 39

KeyBank National Association with $167.2 billion, and GEMSA Loan Services, L.P. with $95.7 billion. Wells Fargo, PNC/Midland, KeyBank, and Berkadia are the largest master and primary servicers of commercial/multifamily loans in U.S. commercial mortgage backed securities (CMBS), collateralized debt obligations (CDO) and other assetbacked securities (ABS); PNC/Midland, Prudential Asset Resources, GEMSA, and MetLife are the largest servicers for life companies; PNC/Midland, Wells Fargo, Walker & Dunlop, LLC, and Berkeley Point Capital, LLC are the largest Fannie Mae servicers; Wells Fargo, PNC/Midland, KeyBank, and GEMSA are the largest Freddie Mac servicers. PNC/Midland ranks as the top master and primary servicer of commercial bank and savings institution loans; of loans for the credit companies, pension funds, real estate investment trusts (REITs), and investment funds; and of loans for FHA and Ginnie Mae. Wells Fargo is the top servicer for loans held in warehouse facilities. Berkadia is the top for other investor type loans. A primary servicer is generally responsible for collecting loan payments from borrowers, performing property inspections and other property-related activities. A master servicer is typically responsible for collecting cash and data from primary servicers and then providing that cash and data, through trustees, to investors. Unless otherwise noted, MBA tabulations that combine different roles do not doublecount loans for which a single servicer performs multiple roles.

16.6 percent during the second quarter of 2014 when compared to the same period a year ago. The title insurance industry generated $2.7 billion in title insurance premiums during the second quarter of 2014 compared to $3.3 billion during the second quarter of 2013 according to ALTA’s 2014 Second-Quarter Market Share Analysis. “A lackluster spring homebuying season that was weaker than anticipated coupled with a substantial decline in refinance activity resulted in the drop in title insurance premium volume,” said Michelle Korsmo, ALTA’s chief executive officer. “Despite the lull in the housing market, the title insurance industry remains in a strong financial position posting more than $90 million in net income this quarter. Additionally, the industry has admitted assets of $8.6 billion, including more than $7.6 billion in cash and invested assets.” “For more than a century, title insurance companies have protected the interests of homebuyers through a process that has given Americans a sense of security in what is almost always their most significant investment—their homes,” Korsmo continued.

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:

Title Insurance Volume Down Over 16 Percent, According to ALTA The American Land Title Association (ALTA) reported that title insurance premium volume declined

NMP News Flash column Phone #: (516) 409-5555 E-mail: newsroom@nmpmediacorp.com Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

heard on the street continued from page 42

Credit Plus include: Credit Reports, Credit Radar At-a-Glance Credit Report Cover Page, Score Plus/Rapid Rescore, Undisclosed Debt Verifications from all three bureaus, Instant Online Employment Verifications, Tax Return Verifications, Flood Zone Determinations, FraudPlus, and more. “The range of products and expertise offered by Credit Plus provides multiple options to our members, helping to ensure they have the tools they need to originate loans efficiently and compliantly,” said Susan Malpocker, director of business management at Lenders One.

NAMB Announces Partnership With America’s Homeowners Alliance NAMB—The Association of Mortgage Professionals and America’s Homeowners Alliance (AHA) have announced a partnership where NAMB members can now provide their customers with a oneyear, free membership in the AHA. NAMB member customers will now have access to AHA advocacy and member rewards benefits, designed to pro-

mote pro-homeowner policies while also helping them to save money on every day purchases. “NAMB members are pleased to connect our customers with the voice of millions of other homeowners advocating to protect and promote sustainable homeownership,” said Donald J. Frommeyer, CEO of NAMB. “AHA plays an important role in directly explaining to consumers how decisions made in Washington, D.C. are impacting homeownership opportunity.” New laws and regulations, such as the Ability-to-Repay (ATR) Rule; Qualified Mortgage (QM) Rule; compensation regulations; and the robust education and testing requirements across the United States, ensures that the interests of the mortgage brokers, the consumers, and the AHA are aligned, most notably to protect and promote sustainable homeownership for all segments of America. “In terms of public policy, until the AHA was formed, America’s homeowners never had a collective voice representing them in Washington and across America,” said AHA Chairman and Founder Phil Bracken. “It’s time to take America’s homeowners off the menu and give them a seat at the table. We are pleased to be working with mortgage brokers who represent a critical source of mortgage outreach to consumers virtually anywhere in America.”

American Financial Resources Selects VirPack for Doc Management

Ellie Mae has announced the completion of its acquisition of AllRegs, a lead-

Carrington Mortgage Services LLC has announced plans to expand its operations, creating up to 360 new high-wage jobs by 2019. The Santa Ana, Calif.-headquartered company, which is a subsidiary of Carrington Holding Company, LLC, will invest $3.17 million to renovate and equip a 77,000 squarefoot facility in Westfield. The planned facility, which will be operational by the end of this year, will provide growth opportunities for the company’s origination and servicing departments. “As a reputable mortgage company, Carrington Mortgage knows the importance of making sound investments,” said Indiana Gov. Mike Pence. “Home to a balanced budget and triple-A credit rating, Indiana’s business environment is stable and strong. We are excited that Carrington Mortgage recognizes our talented workforce and commitment to keeping taxes low and has chosen Indiana as a fixture in its long-term continued on page 62

If yyou ou believe iin n helping helping to to elev ate the the elevate educ ational standards standards of of this industry, industry, oorr educational aassisting ssisting in developing developing the the most most competent competent indu stry work work fforce, orce, tthen hen NAPMW NAPMW is for for industry Y OU! YOU! ommunity ooff m NAPM MW is a ccommunity ortgage and NAPMW mortgage banking iindustry ndustry professionals professionals across across the banking the Country; men men aand nd w omen from from all Country; women all backgrounds have have joined backgrounds joined NAPMW NAPMW because because want to eexcel xcel at what what they do. do . they want NAPM MW membership membership ggives ives you you exclusive exclusive NAPMW aaccess ccess to ttimely imely education education regarding regarding the the rregulations egulations affecting affecting your your career career such su as as a FREE T OM EMBERS webinars TO MEMBERS webinars on on industry industry upd ates. updates. Too JJoin oin NA NAPMW PMW vvisit isit www.napmw.org www.napmw.org or or call 11.800.827.3034 .800.827.3034

n National Mortgage Professional Magazine n OCTOBER 2014

Ellie Mae Finalizes Acquisition of AllRegs

Carrington Mortgage Services to Create Nearly 400 New Jobs by 2019

Helping Y You oou G Get et Plugged Into Into Y Your Business oour Bus iness

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VirPack has announced that American Financial Resources Inc. (AFR) has selected VirPack’s Document Management and Delivery System as its enterprise document management and delivery solution. AFR is a residential mortgage lender assisting families across America with their dreams of homeownership. AFR also serves thousands of mortgage brokers and lenders across the country through their wholesale and correspondent business channels. AFR is in the process of implementing VirPack’s Document Management and Delivery System (DMDS), along with VirPack’s Originator and Borrower Web Portals, to improve efficiency throughout every stage of their loan process, reduce costs and ensure compliance as the company experiences rapid growth across all of their lending channels. “We selected VirPack because it provides the most functionality of any document management system that we have tested in the marketplace, said Corey Dubnoff, president of AFR. VirPack’s technology interfaces well with our loan origination system which will increase our underwriting and funding velocity.”

ing information provider for the mortgage industry. At a time when compliance has become mission critical for mortgage lenders, the acquisition positions Ellie Mae as a top source of mortgage management technology, investor guidelines, compliance resources and education to help lenders achieve compliance, loan quality and efficiency. AllRegs provides education and training, loan product and guideline data and analytics to more than 3,000 companies covering every facet of mortgage banking, including major lenders and investors, regulators, federal and state agencies, brokers, mortgage services vendors and law firms. Its extensive content library of regulations and investor guidelines is relied upon by virtually all of the top 100 U.S. lenders. “Now, more than ever, the mortgage industry is in need of an all-in-one provider that helps lenders achieve compliance while producing quality loans with great efficiency,” said Jonathan Corr, president and COO of Ellie Mae. “While compliance has always been a top priority at Ellie Mae, this acquisition of AllRegs solidifies our role as a trusted partner for all of a company’s technology and compliance needs.” Jeff Hoerster, former president of AllRegs, will assume the role of Ellie Mae’s vice president and general manager of AllRegs. “The combination of AllRegs’ mission critical content, tools and services with the market leading compliance and mortgage management technology provider, Ellie Mae, will be a game changer for the industry,” said Hoerster. AllRegs is now part of Ellie Mae, offering its broad array of educational courses, certifications, risk mitigation and other services. AllRegs employees and offices will be retained by Ellie Mae.

Just Ask

Eric Weinstein & Laura Burke

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

legal counsel or the advice of a professional. Please e-mail us JustAskEricandLaura@gmail.com voice any questions or problems. We here for you!

tax at to are

A Rose by any other name Paul from Maryland asks … I am a small mortgage broker in Maryland. I have a top producer who wants to come onboard but he wants me to set up his own separate d/b/a name under my license. He says his model is to price very low. He doesn’t want my customers to come across his

advertising and expect the other loan officers in my company to give them the same rate. Eric’s reply to Paul … A few issues come to mind off the top of my head. The first is a cost issue. While it is perfectly legal to do this there is significant paperwork and costs involved. You will need a new Tax ID number, new licenses with the branch name, new agreements with the wholesalers, etc. The list goes on and on. Now you have to look at the return. If it is one guy, what happens if he gets sick or gets hit by a bus tomorrow? I don’t like the concept of huge upfront costs with a

risky return. You are basically starting a whole new company for one person. Next is the concept of a brand name. As you grow, your corporate name gets around and creates awareness. This is the whole idea franchising is based on this. By splitting your business into two separate names, it’s costing you business. In my former company, I would get business because the customer would say, “Yeah, I heard of you guys. I don’t remember where, but I know the name.” Lastly, I don’t think his pricing model is a good reason to create a different name. What happens if his clientele is all old white guys and your other bor-

k Eric & Laura rowers are minorities, women or certain protected classes? It sure will seem like a discrimination scheme to an outsider. How come one class of individuals get this rate and other class get a higher rate? Laura’s reply to Paul … WOW, this sounds hokey to me. Maybe back in the day, when mortgage brokers were doing a lot of creative management, but I don’t think it would pass the legal, nor ethical litmus test. Who is this guy? If he is mandating rules and pricing, why isn’t he opening his own shop? Even if there was a legal way to do this, run two companies under two different names, one license with different rules for each, just how does that play out? I see “lawsuit” but keep in mind, I am not an attorney, but my response is “Run, Forrest Run!”

Credit scores in the gutter Anita from Anytown, USA asks … I recently had a customer come to me with a 530 credit score. What advice

should I give her to help raise her credit score?

Eric’s reply to Anita … How about “pay your damn bills!” No, I am joking, that is about the worst thing you could say to her. Always, always have sympathy for your borrowers. Never look down your nose at them. No one except a truly evil person runs up bills with the express purpose of not paying them. Usually, there is a personal catastrophe behind the story. It could happen to any one of us. First, have sympathy. Second, look at their credit report. Many will tell you exactly, in order, what is reducing the score. Usually it is past due accounts, collections, judgments, etc. I have them start by paying off the smallest first. This way they can feel some headway is being made and reduce the sheer volume of past due accounts. Then, I show them some ads for secure credit cards online. They should re-establish their credit as soon as everything is paid off. I personally don’t believe in credit restoration companies. I think with some good free advice from an intelligent loan officer,

they can accomplish the same thing. I explain that the longest journey begins with the first step. It will take a while, but bad credit isn’t forever. A king once asked his sages to make him something for the times when he was sad. They made him a ring. On it was engraved, “This, too, shall pass.”

Laura’s reply to Anita … Bad things happen to good people. I have made it my rule not to ever judge anyone, what we see may not be the whole picture. It has been my experience that things happen to everyone at some point in their life so the only way out of it is through it. They may not be able to get their score up as quickly as they would like to but by staying on top of their credit is a key factor. Do they have the money to set up automatic payment withdrawals, eliminating their chances of being late? Having them open secure credit cards is also another good option Eric mentioned. They may also be able to be added to a parents, or spouses credit card as an authorized user may also boost their credit. Paying down your debt and not hav-

ing all high maxed out credit cards will also help increase your scores. Another tip at increasing scores is keeping open your oldest time credit cards as opposed to shutting them down for new ones. By keeping the older ones open with a very low, small balance but it shows a lengthy history, verses a short, new one only. Recently, Fair Isaac and Company (FICO) announced it would make some changes to their current structure, which will help boost credit scores of many Americans consumers. In a recent article, “Who’s the Big Winner From New Credit Score Rules,” the author wrote “that an individual’s FICO score will no longer include paid collection accounts, and will weigh unpaid medical collections much less heavily than it previously did.” We’ll have to watch and see what effect this has.

The good, bad and ugly of staying at home “Stay at Home Sally” asks … What are the advantageous and disadcontinued on page 65

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What’s iPhone 6 Got to Do With Mortgages? By Matthew Dunn Ph.D.

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Gadget-buzzed lines wrapped every Apple store last month made it clear … the computer in your pocket is the one you care about. The size, particularly of the iPhone 6 Plus, make it equally clear that being a “phone” isn’t that important anymore. Screen size, CPU, graphics and network speed have no bearing on voice calls, but they’re what matter to consumers. Between Apples, Androids and others—also terrific computers—consumers have also passed a little invisible line. They now have a bigger, better, faster computer in their pocket than the PCs that corporations put on most desks. If you’re at work peering at a crappy 800x600 VGA monitor, hooked up to an archaic PC, nod your head. You know it’s true. Does that mean anything for the mortgage industry? Yup. None of the excuses about not having a mobile strategy and a media strategy hold up anymore and here’s why … The iPhone 6 Plus has as many pixels as your big-screen TV: 1920 x 1080. Its little brother isn’t far behind. Your Web site, documents, and loan processing screens are now legible on-the-go, and hiding behind “we haven’t finished our responsive design” doesn’t hold up. Those folks with pocket-sized big-screens want to see what’s happening, in pretty close to real-time. I can order a $50 iPhone case from the iPhone itself. I receive the confirmation text, check the transaction status, and track the shipping, including “Package left at 8:00 a.m., out for delivery” on the iPhone. But a $500K mortgage drops me through the wormhole back to the 1980s. Long gaps of silence; voice calls that amount to “We’ll let you know when we know;” the occasional digital surprise … oh look honey, it’s an e-mail, followed by the search for a working fax machine. Uh … dude. That iPhone in your hands? You can scan and fax with that device … no, you really can! Yes, there are regulatory complexities. Consumers don’t care. Yes, there are budget constraints. Consumers don’t care. They’re too busy watching their $50 iPhone case delivery from a satellite (well, maybe in about three years) and wondering why their $500K mortgage is handled so jerkily by comparison. And media? Shopping for a new case is mainly a media experience; high-res pictures, zoom-in details, official videos, even fanboy video reviews. They look great on that big screen. Shopping for a mortgage is mainly an eye test. The big screen helps, but seeing a scan of a photocopy of a fax on it does ring of the absurd. Images? Video? Not much, yet. Some smart entrepreneurs will seize the opportunity and turn the mortgage process into an actual consumer-friendly cooperative process. They’ll find that involving those big-screened consumers actually lowers costs and speeds up results. They’ll invest in helping consumers understand (probably with video) and find that informed customers are happier customers. People might even wait in line for that kind of service. Matthew Dunn Ph.D. is CEO of Fast Forward Stories, a video content service for the mortgage and real estate industries. He may be reached by phone at (888) 618-9088 or e-mail matthew@fastforwardstories.com.

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heard on the street continued from page 59

business plan.” Carrington Mortgage Services employs more than 1,000 associates across the country, including more than 180 employees in Indiana. The company is currently hiring customer service representatives, servicing specialists, sales and marketing professionals, and underwriters in Westfield. “Indiana’s cost competitive business environment and the strength of the Central Indiana workforce made Westfield an ideal location for Carrington to continue to grow,” said John Alkire, executive vice president of Carrington Mortgage. “We look forward to expanding our footprint in Indiana, and contributing to the local economy while extending our services and exceptional home financing products to our clients.”

Caliber Home Loans Set to Acquire Cobalt Mortgage

Caliber Home Loans Inc. has announced the acquisition of Cobalt Mortgage, one of the largest privately-owned distributed retail mortgage lenders in the U.S. The combined entity will create one of the largest independent mortgage companies in the country. The terms of the transaction were not disclosed and the transaction is expected to close in early November of 2014. Through this combination, Caliber expands its sales force and nearly doubles the size of its branch retail lending business. The transaction also enhances Caliber’s geographic footprint and provides entrance points into new markets, including the highly-attractive Pacific Northwest region. “Caliber and Cobalt share a common vision that real estate is local and that Realtors and Builders continue to play pivotal roles in helping consumers achieve homeownership,” said Joe Anderson, chief executive officer of Caliber. “We are excited to partner with one of the strongest and most wellrespected retail branch networks in the country. Throughout its long history of solid-performance, Cobalt has established an outstanding reputation for growing purchase volume and is wellrespected for its disciplined approach to governance. We look forward to welcoming the talented Cobalt team to the Caliber family and to working together to better meet the unique financing needs of homeowners, builders and realtors across the country.” As part of the transaction, Keith Tibbles and Ernie Gehre will continue to lead the Cobalt Division of Caliber. Tibbles will also be appointed executive vice president of Caliber and assigned to the company’s executive leadership committee where he will play an active

role in the operations, financing, governance and strategic direction of Caliber. Gehre will continue to oversee the sales organization of the Cobalt Division of Caliber. “We are pleased to have reached this agreement with Caliber to combine two great companies,” said Cobalt cofounders Tibbles and Gehre. “Caliber’s strong balance sheet and direct access to capital markets will not only provide Cobalt with the ability to retain the servicing rights on the loans it originates, but also offer our customers a broader suite of mortgage lending solutions better tailored to fit individual needs. Through this combination, we will also gain significant scale, granting us better access to the secondary markets. We are extremely confident in the benefits of this partnership and look forward to participating in the future success of the combined company.”

Guild Mortgage Continues Expansion With Acquisition of Comstock Mortgage Guild Mortgage has announced the acquisition of Comstock Mortgage, a Sacramento, Calif.-based independent mortgage banking company with 15 offices, more than 180 loan officers and support staff and $600 million in originations in 2013. The acquisition is part of Guild’s plan to grow through acquisition, adding branches in its existing markets and preserving its customer service culture with experienced, top producers with established relationships. From 2010 to 2013, Guild has grown from its western base into the Southeast and Southwest, increasing its number of branches and satellite offices from 75 to more than 200. Loan volume in the same period moved to $7 billion from $4.1 billion. Servicing volume more than doubled, from $6.4 billion to $13 billion. As part of the Comstock acquisition, Jeff Tarbell will join Guild as regional manager, leading the branches under the new Comstock Division of Guild Mortgage. Tarbell has been chairman of the board of Comstock and its broker of record for the last three years. He brings to Guild 23 years of experience in the mortgage industry. “When we began meeting earlier this year, both companies felt right away that we had a culture match, a close alignment of philosophy and goals for the future, and that Comstock and Guild could be a wonderful combination,” said Mary Ann McGarry, Guild’s president and CEO. “We have complementary strengths. Comstock brings an experienced, vibrant production team, with established relationships and continued on page 97

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Do You Have a Strategy to Generate Purchase Loans?

The Long & Short: The Business of Short Sales

Discover the new lead source that was always there ... Renters! By Tom Ward I think it’s pretty clear refinances are not coming back anytime soon. Over the last seven years, I’ve consulted countless mortgage companies, including individual branches, specifically on profitability. What I’m seeing today is that some companies are trying to cut their expenses in order to restore profitability. But we all know what the real issue is … it’s getting more loans. The challenge becomes how do we do it and where do we start? It was inevitable that the refinance model was going to end, and as I’ve been saying for years one of two things will happen: We will refinance the world at 3.5 percent or rates rise and it doesn’t make any sense for the homeowner to refinance. Let’s face it … for the last 10 years, the loan officer hasn’t had to prospect for new business. Why? Because all they had to do was manage their existing database—that was enough. Things like taking people to a lower rate, getting cash out due to equity rising to alltime highs, or moving their clients into bigger homes. Well … times have changed. It has come to the point where mortgage professionals need to have a solid lead acquisition process in place. If you’re going to be spending your time and money to develop new business, I think it’s important to be strategic. I’ve defined four categories of purchase business and their potential for lead acquisition:

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1. The move up or move down homebuyer: Their challenge is equity in their existing home. They’d love to move up or down, but just don’t have enough proceeds to make it happen … just yet. 2. The renter who’s had a foreclosure or short sale: They have two challenges: Not enough time has passed for them to be eligible to get a loan; and they have not done any planning to re-establish credit, save enough money, or pay off the debt they’ve accumulated. 3. The investor and second homebuyer: Investor loans tend to be very small and most are paying cash. The second homebuyer’s appetite is not as strong as it used to be. What does that leave you with? 4. The renter that has never owned a home: In my 25-plus year career, I have certainly seen some things, but the idiosyncrasies associated with this new Generation Y prospective homebuyer are … well let’s just say, different. My team and I spent nearly six months studying this renter and here’s what we discovered: l They take longer to make a decision l They don’t know who to trust l They do a lot of research, not always from the most reliable sources, and gather a tremendous amount of data before they make a decision l They change their mind with the slightest change in market conditions l They want to be homeowners (317 out of 318 renters we surveyed said they we’re going to buy a home sometime in the future) This is the only category that’s bulletproof: A lead source waiting to be harvested … the renter who has never owned a home before. They have no house to sell and no waiting period to be qualified for a mortgage. I believe creating an effective lead acquisition strategy for this particular buyer, building their plan and helping them navigate through the complex world of owning their first home, will have you well on your way to replacing those refinances. Until next month, go to www.LifeAfterRefi.com for a free report and keep that path clear to discover how to develop your solid ongoing purchase lead acquisition source with renters! Tom Ward is founder of the Path2Buy Homeownership Coaching Program (Path2Buy.com). He may be reached by phone at (847) 970-4295 or e-mail tom@path2buy.com.

New Buyers Hurt by Servicing Transfer Policy for Short Sales and Foreclosure Properties in Loss Mitigation By Pam Marron The practice of transferring servicing from one servicer to the next is often a surprise to unsuspecting homebuyers. The transfer can start the short sale process all over again, with no regard for buyers already in the purchase process, trying to close on a newly purchased property. And, some are losing appraisal fees, home inspection costs and repair estimate fees when servicers opt for foreclosure rather than to extend the contract. The practice of servicing loss mitigation properties is taking a toll on new buyers who have signed contracts to purchase these homes. Servicing contracts for loss mitigation properties appear to span over four- to five-month periods. Buyers of these serviced properties are unaware of the contract timeframes and may sign a purchase contract within this term. When servicing is at the end of a cycle, buyers are given little notice of the servicing deadline. Buyers have often paid for appraisals, home inspections and estimates for needed repairs to make the applied for mortgage approvable on “As Is” contracts. Servicer transfer dates are not told to the buyers until shortly prior to the date, and in most cases, new buyers and their lenders are unprepared to close before that date. Then, buyers are further delayed as they wait for the new servicer to order a brand new broker price opinion (BPO) and go through the loss mitigation cycle again. Often, new BPO’s are ordered for a property that has a valid appraisal already done and paid for by the purchaser. And, if the servicer opts to foreclose, the purchaser of the home is out all of the funds they spent upfront, even if they are not notified of the deadline date until after the mortgage process has started. Title companies, frustrated with contracts where this is happening on a regular basis, tell of this common problem. Real estate agents, aware of this practice, are reluctant to show short sales, fearful they will never get the new buyer to the closing table. Unsuspecting buyers, meanwhile, are left stranded, stunned that there is no protection for them through the daunting mortgage process. Homeowners going through a short sale or foreclosure are notified that servicing is changing and who the new servicer is. However, homebuyers trying to purchase these homes are not given the same information nor have the ability to access loss mitigation negotiators for an extension of a contract already in the process. The Protecting Tenants at Foreclosure Act of 20091 was legislation that allowed renters who suddenly lost their lease due to a foreclosure to stay until the end of the lease or be entitled to a 90-day notice before having to move. The same protection for new homebuyers, who are investing upfront in a property that can improve a community when closed, needs to be applied.

Why should this policy be changed? Buyers who purchase these often distressed properties are clearing out problematic mortgages for servicers and are almost always paying for repairs needed on these homes. Coming up with a sound policy to insure protection for the process to finish for these buyers can only improve values and encourages realtors to sell these properties. Better policy that encourages and better accommodates a short sale will provide a higher net than a foreclosure to servicers and investors. Pam Marron is senior loan officer with Innovative Mortgage Services Inc. She may be reached by phone at (727) 375-8986 or e-mail pmarron@tampabay.rr.com.

Footnote SPONSORED EDITORIAL

1—Protecting Tenants at Foreclosure Act of 2009: http://www.occ.gov/publications/publicationsby-type/comptrollers-handbook/ptfa.pdf.

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vantageous of working from home, and can you tell me if I can qualify for the home-based business tax deduction? Eric’s reply to Sally … I will leave the tax question to Laura, as she is the expert on that. I can talk to the advantages/disadvantages of working from home since I am in my pajamas right now answering this question. Besides lower wear and tear on my car, fewer gas station fill ups and reduced dry cleaning bills, I like the freedom, lack of office politics and comfort of working from home. Many people don’t like the isolation. I say, “Get a dog.” Some people just crave being with other people. I don’t have that affliction. If you are starting your own business, it is less expensive. If you have a growing shop, it may not work for long. My wife threw us out of the house after about $1 billion in loans. It was too many administrative people wandering around the house. The trick is to separate hours, time when you are working and time when you are not. It is too easy to work on a loan all night, or stop in the middle of processing a loan to put in just one more load of laundry. If you have kids, it is great because you are there when you are needed, but bad when you have to explain, “Not now, mommy is working.”

Of course there are always in depth questions related to the above tests. Ask a tax professional. When working from home you can take a deduction for the cost of the rent or mortgage based upon the square footage or percentage of the home you are using, real estate taxes (proportionately) in addition to the same proportionate amount of utilities. You may also look at a proportionate amount of depreciation on your home. Of course you can expense your costs of maintaining a printer, fax, phone and other required business amenities. Another deduction could be depreciation on office equipment. There are nuisances to each individual’s situation, but a smart tax professional should be able to help you. The IRS has also kicked off a simplified version of calculating the home based business deductions. The simplified method can be used on taxable years starting on, or after Jan. 1, 2013. This new method significantly reduces the burden of strict record keeping. It is claimed in full on Schedule A, there are nuisances of course, we talking the IRS! Watch for a future article in more detail on this.

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

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

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Laura’s reply to Sally … I have worked from home, and I do believe it has its lure of sleeping later than most of my friends. I don’t have to get dressed, put on my makeup or drive anywhere, not having to worry about the weather, and breaking for lunch or tea whenever I want … all advantageous. Some disadvantageous is “no one to talk to by the water cooler,” only your computer, your phone system and if it goes down or out you are out of business until you get running again. You just used the last ream of paper, and it’s raining, you have to drop what you’re doing and go out and get it. The kids and dogs can be nice to be around and distracting other times … one person’s passion is another’s poison. As for the tax advantageous, yes there are many. To qualify for the deduction you need to meet four tests, if you meet the four tests you qualify for the home-based business deductions. Here are the four tests you need to meet: 1. You have a designated area exclusively for the use of your business. 2. You regularly meet clients at home or prepare work to take with you meet

clients; or for the administrative or management activities of your trade or business. 3. You work from home as you have no other fixed location where you can conduct the activities of your trade or business. You may have a corporate headquarters in another state. 4. If you are an employee working from home you must be working from home because it is a requirement by your supervisor/company and not because you want to.

NAWRB with U.S. Small Business Administration (SBA)

new to market continued from page 18

present a specialized hybrid of Women in Housing and Women in Government

Awareness, Opportunities, and Access

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OCTOBER 27-29th, 2014 First date with a personal Financial Fitness Mentor Accelerating Women in the Housing Economy

mail exchanges and safely stores a document history through the mortgage application process. “Transfersafe is the next major step in our evolution of the mortgage process,” said Victor Ciardelli, president and CEO of Guaranteed Rate. “We’ve already brought our online loan application to the market, which has funded more than $3 billion in loans to date, and one of our founding principles has always been to use technology to improve the home buyer’s experience and streamline the process for loan originators alike. Now, we’ve introduced Transfersafe to make getting a mortgage quicker, easier and more transparent.” Transfersafe’s user-friendly platform enables instant collaboration between a home buyer and a loan officer. After the borrower’s application kit, forms and disclosures are posted, the borrower receives a notification message from Transfersafe that their mortgage application is ready to be signed. Once a borrower signs the forms through eSignature technology powered by DocuSign, they are walked through a step-by-step process to upload their key mortgage verification documents into Transfersafe: income documents (such as W-2 forms and paystubs); asset documentation (checking and savings accounts, investments, etc.); homeowner documents (sales contracts, proof of insurance); and other key documents (gift letters, lines of credit, drivers licenses, etc.). A borrower’s documents can be dragged and dropped from their desktop into Transfersafe, directly from their computer or by taking a photo of the document with their smartphone or tablet. Optimized for mobile use and built in HTML5, Transfersafe works on all mobile device operating systems: iOS, Android and Windows. In addition, an online payment option for appraisals is scheduled to be added to Transfersafe by early 2015.

Black Knight Financial Enhances Its Empower LOS

NAWRB Foundation WWW.NAWRBEVENTS.COM

949.559.9800 | CONFERENCE@NAWRB.COM HYATT REGENCY LONG BEACH, CA.

Black Knight Financial Services (BKFS) has upgraded its Empower loan origination system (LOS) to deliver high-value functionality to help lenders automate many of the manual processes associated with originating a loan. The next generation of the loan origination platform will also provide the foundation for Black Knight to deliver system updates to help lenders meet their obligations under the Consumer Financial Protection Bureau’s (CFPB) Integrated Mortgage Disclosure rule, which will go into effect Aug. 1, 2015. Used by six of the top 20 lenders in

the U.S., Empower is available as both an ASP and lender-hosted loan origination and Web portal solution that supports retail, wholesale and consumer direct channels and helps lenders electronically capture, process and close loans. “The new capabilities being deployed in Empower will improve the platform’s ability to support the regulatory changes impacting our clients’ operations and help them run their operations more efficiently,” said Jerry Halbrook, president of Black Knight’s Origination Technologies division. “Lenders are facing a complex new loan origination process, and this next generation of Empower equips them with enhanced automation and tighter integrations needed to support every step of the process, as well as help them better manage risk and overall loan quality.” Black Knight is scheduled to begin deploying changes impacted by the CFPB’s new Integrated Mortgage Disclosure rule by the end of 2014 to provide clients with several months to implement the enhancements and train their staff on the new processes. Black Knight is also actively monitoring and preparing for the next wave of lending industry regulatory changes, including new data requirements for the Mortgage Industry Standards Maintenance Organization (MISMO) and the Home Mortgage Disclosure Act (HMDA), as well as new requirements for the Uniform Residential Loan Application (URLA).

StoneHill Group Launches New Web-Based QC Tool The StoneHill Group has announced the launch of a new software solution to help mortgage bankers meet their growing compliance requirements at all stages of the loan cycle. LES (Loan Evaluation Software), a Web-based tool that can be fully customized to help mortgage bankers manage risk, while reducing time-in-file costs, was soft launched in June of this year and is now available to mortgage lenders of any size. Pre-funding reviews and post-closing audit requirements have grown tremendously in the years since the housing crisis, which have led to mortgage lenders spending significant time and cost to review loan files internally or outsource the work to third parties. Designed to be affordable, flexible and easy to use, LES transforms the pre-funding and post-closing review process from hours to just minutes while simultaneously enhancing clients’ ability to manage risk through enhanced reporting.

“The pressures on today’s mortgage bankers to produce and demonstrate fully compliant loans are enormous,” said David Green, president and CEO of The StoneHill Group. “We developed LES to give mortgage bankers a fast, effective and affordable option to manage the QC process and QC vendor reviews. It can be used as a stand-alone solution or as a complement to The StoneHill Group’s existing QC and fulfillment services. LES represents everything we’ve learned about loan quality after nearly 20 years in the business, so we are confident there’s nothing on the market like it.”

Altisource Launches Wholesale One Mortgage Cooperative

the time to build an integration that is years ahead of anything else on the market,” said Brian Coester, CEO of CoesterVMS. “Our goal is to provide unprecedented means of efficiency to the mortgage origination process. CoesterVMS Expands This integration does that and more.” The interface also is open to Cloud Computing Access CoesterVMS’ Web services to allow Via Encompass appraisal data to transfer between its system and Encompass. Information such as appraised value, appraiser name, the CoesterVMS has enhanced its Encompass number of bedroom and bathroom can integration to allow CoesterVMS clients to be easily sent directly to Encompass. use the Cloud Control System as a “It’s a really solid interface and native application that can be built something that the industry has needdirectly into their workflow and busi- ed,” said David Marguilies, executive ness rules. vice president, director global sales at “Our development team has taken American Financial Resources/eLend,

which has used the integrated platform for nearly three years. “This enhancement is a testament to CoesterVMS’ attention to detail and consideration of the customer experience. The company has successfully dialed into the latest technology and compliance needs while providing an amazing customer experience.”

Platinum Data Solutions Enhances Appraisal Quality Through New Offering Platinum

Data

Solutions

has

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Altisource Portfolio Solutions SA has launched Wholesale One, a new cooperative for the wholesale mortgage industry, formed to provide a platform for mortgage brokers, wholesale lenders and related vendors to provide quality loans to consumers nationwide. The new cooperative will assist mortgage brokers and other third-party originators (TPOs) with tools to improve their businesses. Cooperative benefits are designed to help lower costs for third-party services and streamline the financial execution of a wide variety of loan products. “The cooperative model is a proven structure for supporting efficient business practices, consistently helping deliver compliant solutions and bringing best practices to the forefront of the industry,” said Joseph Davila, president of Altisource Mortgage Services. “Our unique ability to connect buyers with services along with our expertise in process solutions lend themselves well to the cooperative environment. The launch of Wholesale One is an exciting new way for Altisource to further develop our mortgage marketplace.” Altisource has tapped mortgage industry veteran, Greg Murray, to lead the new cooperative as chief executive officer. Wholesale One will benefit from Murray’s extensive background in the third-party originations space and decades of leadership experience at Citigroup, Wells Fargo and JPMorgan Chase. “This $100 billion market is facing a variety of funding, compliance and operational challenges, so the timing is ideal to step in and deliver a crisp, streamlined execution platform to help ensure product diversity remains available for today’s home buyers while enabling compliant growth for the mortgage broker community,” said Murray. “The proprietary technology and originations expertise at Altisource, combined with the collective buying power inherent in a cooperative, means

there is truly an opportunity to help third-party originators navigate an evolving market while helping to alleviate business process and compliance challenges.”

taking the lead Business Intelligence: How to Take Your Team to the Next level

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By Jonathan Blackwell Managers are in the business of growth. Their objectives, from the top down, are clear. But how do they reach those growth objectives in a shrinking industry? They get smart. They use every edge they can. Almost. Many are missing the edge, the key to an efficient business. The engine behind a welloiled machine. Business Intelligence (noun): (1) The methods and technologies that gather, store, report and analyze business data to help people make business decisions; and (2) The data gathered by these methods. From Dictionary.com Unabridged, Based on the Random House Dictionary, Random House Inc. 2014. Business Intelligence (BI) is defined as the set of techniques and tools for the transformation of raw data into meaningful and useful information for business analysis and predictive purposes. Simple enough right? Yet almost no mortgage lenders actually employ a well-thought out business intelligence strategy. Most branch managers have access to company provided data, general production reports and capacity data for operations, but not much more between that data and the P&L. If you read last month’s column you might be thinking—didn’t we already have this discussion last month? Thanks for paying attention, but the answer is not quite.

We discussed using data to drive production on a smaller scale. We discussed step one in the transformation to a smart, data-driven business—using easily accessible social, e-mail, internal and Web analytics to drive production. It will drive production too. That is simply one component of your data-driven transformation, a stride to the bigger goal of using “business intelligence” to create an agile, productive business machine. Business Intelligence is more than a tool to drive production. It is a tool to manage your entire business. Real business intelligence comes with a crystal ball. A vision into the future—predictive analysis. Predictive analysis is a major piece of proper business intelligence strategy. It has become hugely important for those wanting to stay ahead of the game. One of the main truths of the mortgage business is that successful managers and originators are proactive. During the loan process the proactive sales star can look at a file, see potential issues and proactively address them before they happen. What if you could see those potential issues months before they happened? Before the applicant even applied? What would you do with that information? You would do what all good managers, loan officers and team leaders do—proactively address it.

Getting started with Business Intelligence The first step is to ensure you are collecting every scrap of data you can. Google Analytics is a must, but you also

need to closely monitor your social media, e-mail and internal data. Once you are set up to collect the data you have to visualize and customize it in a way that your entire team will find useful—with a business intelligence dashboard. Sales and ops need different information so your solution should be easily customizable. You need a business intelligence dashboard. There are boundless enterprise solutions available in the business intelligence space. They are all significantly over-priced and out of reach or small teams, branch managers and small business in general. Don’t give up though. With a little know how you can employ some of the many open source, aka FREE, tools to start the intelligence building process. If you simply cannot afford the time to explore the open source universe, use an outsourcing site like Elance, oDesk or Guru to hire a developer to build you a custom dashboard with your preferred performance indicators. The ultimate cost will be far less than expensive enterprise solutions.

Making data useful with thoughtful visualization What happens when you see individual business intelligence reports or standalone data visualizations? Just enough data to see that one of your key metrics is trending up or down, but not enough context to intelligently analyze what to do next. To do that you’d need to probe further, you need to ask questions. If you are looking to truly under-

stand the data you ask the next question. You further your understanding. Business Intelligence is all about framing your data so that you can ask the right next question. The right BI, spearheaded by the right person or team, can easily approach MENSA levels of useful business insight. One of the reasons BI is often perceived as boring is because many see it as just a bunch of reports, often used to chide business managers for declining pipeline or sales or as an impetus for doubling their profit goals.

No intelligence, just business Statistics, analytics, algorithms, big data, social media, e-mail marketing data, survey feedback and more are combined with traditional reporting, offline data and smart visualization techniques to create a truly holistic view of your business. An eye opening view of combined metrics that, when analyzed with proactive thought, will provide the 30,000 foot view that many small business owners could only dream about prior to the dawn of accessible data … imagine the possibilities. Whether you implement your business intelligence strategy little by little or choose an all-in approach; make business intelligence a main priority. Stay ahead of the curve, take the lead. Jonathan Blackwell is chief engagement officer for BoldCopy.net. Jonathan may be reached by phone at (404) 551-3845 or email jonathan.blackwell@gmail.com.

new to market continued from page 67

NexTitle has announced its adoption of SoftPro’s 3.0 release. SoftPro Select 3.0 delivers on SoftPro’s vision of an enterprise class solution for the title and escrow industry by providing a distributed, collaborative platform capable of meeting the demands of an increasingly connected world. With SoftPro Select 3.0, users will find

National MI Launches New Digital Platforms for Credit Unions

National Mortgage Insurance Corpora-

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NexTitle Adopts SoftPro Select System

it easier than ever before to create, open and manipulate orders, ledgers and transactions. “We’re very excited to be an early adopter of SoftPro’s latest release,” said Dustin Adkins, NexTitle director of retail development. “SoftPro 3.0 supports our commitment to technological innovation in our industry, and our dedication to providing the very best client experience. The improved API and underlying architecture of 3.0 offers us more options than ever to build custom integrations with our proprietary software systems.” “Our software development team is

tion has announced that it has launched a new credit union mobile application, as well as a new Web site specifically for credit unions, cu.nationalmi.com. The mobile app enables users to run rate scenarios, view credit union-specific bulletins, and easily contact National MI personnel. National MI believes it is the first private mortgage insurer in the industry to create a credit union-specific app. The new site for credit unions features National MI’s easy to use Online CU Rate Finder, which offers credit union members some of the most competitive rates in the industry. “Credit unions represent an impor-

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enhanced RealView, its flagship appraisal quality technology, with Platinum Comps. This new feature analyzes, scores and ranks up to 100 or more properties comparable to the subject property, and relays its findings in a straightforward, color-coded report. RealView is the industry’s first and only analytical and business intelligence technology that accounts for factors like context and history when screening for the thousands of items that can compromise appraisal quality. Platinum Comps scores each comparable property on a scale of 1 to 100, according to its suitability as a comparable (comp). It also validates the data provided in the report for each of the comps, and highlights discrepancies between the information presented and information provided by its public and private data sources. Platinum Comps provides information that includes proximity to the subject property; lot size, gross living area; bedroom and bathroom count; amenities; and more. Selection of comps is the most important factor in creating an appraisal report. Comps function as benchmarks used to support the subject property’s appraised value. In urban and suburban neighborhoods, there are generally a wide range of nearby properties that an appraiser must evaluate in order to select the customary three to six comparables he or she will use in the appraisal report. “Collateral is the most important part of a mortgage loan, and part of good underwriting involves evaluating whether the comps used in the appraisal are the most appropriate— the challenge is, researching this manually can take a lot of time,” said Phil Huff, Platinum Data’s CEO. “We created Platinum Comps in response to underwriters’ requests. They wanted information on how comps used in the report compare with those that weren’t selected. They know that appraisers are only human, and want to ensure that the appraised value is based on legitimate information. Now they can access that information literally with one or two mouse clicks.”

working on new tools that effectively integrate with the latest version of SoftPro to offer an optimal experience for our clients, allowing our title and escrow teams to spend more time focusing on what’s important. Proactive communication at critical points in the closing process guarantees our clients access to the necessary information to ensure an ontime, smooth closing,” said Adkins.

How to Keep Sales

Strong

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Despite Rising Rates By Bubba Mills Wouldn’t it be great to say that as mortgage interest rates rise, your lending business would rise right along with them? Well stick with me and let’s see what we can do. I’ve always said you must have a plan in business, and that’s just as true in mortgage lending as it is in any industry. I’ve worked in mortgage lending for many years now and I might be able to help you. So, do you have a plan, a strategy? What will you do to ensure you keep lending if interest rates rise this fall and winter? It’s looking likely that they will climb. Many groups and experts are predicting a gradual increase. As I write this, rates are 4.1 percent, and I expect we’ll see something near 4.8 percent by

the end of the first quarter of 2015. Here are some cornerstones for a plan to keep your lending business warm through the winter … Let prospective borrowers know: 1. Buy now or pay later: It’s that simple. You have to play the immediacy card with buyers in this market. Remember, consumers act based on what they might lose versus what they might win. If they don’t act, they lose by paying more every single month, quite possibly for most of the rest of their lives. You know the math: at 4.5 percent on a $200,000 house, their monthly payment will be $1,013. If rates rise one percent, the payment balloons to $1,136. That’s $44,280 over the life of a 30year mortgage.

“What will you do

to ensure you keep lending if interest rates rise this fall and winter?”

2. Getting a mortgage isn’t as tough as they may think: If you have

access credit repair help for those with less than stellar credit, promote that in your marketing materials and advertising efforts. I know Kalamazoo Mortgage in Michigan (which I am currently coaching) does this regularly for buyers, and deals are closing and people are ending up in their dream homes. Let current mortgage holders/prospective home sellers know: 1. More housing inventory is coming to the market: Rehabbed real estate-owned (REO) homes will be entering the market later this year and in early 2015. You’ll remember that back in 2009 the banks didn’t have time or money to rehab REO properties so they were being sold in as-is, where-is, looks-as-is and smell-as-is condition. But these REO homes will be in good shape and FHA financeable condition. Plus, cash buyers are becoming rarer. This means more inventory and reduced competitive bidding giving more first-time buyers and other non-cash buyers more opportunities. In other words, they

should sell now versus waiting. 2. Actively shopping: Even if homeowners have an interest rate lower than the current one, (CNN Money reports 19 percent of homeowners refinanced between 2011-2013 when rates were historically low) it’s likely their home has appreciated in price to make up for any perceived loss. Now is the time to sell and get in the house they really want—one that’s bigger or closer to better schools—instead of feeling stuck in one that might not be suiting their needs. Let me hear from you. Do you have a concrete plan in place to help you keep your business strong in the face of changing markets and conditions? What can you start doing today to improve your business? Please send any comments or questions you have to article@corcorancoaching.com www.facebook.com/corcorancoaching. Bubba Mills is executive vice president of Corcoran Consulting & Coaching Inc. He may be reached by phone at (800) 9578353 or visit www.corcorancoaching.com.

new to market continued from page 69

tant segment of our customer base,” said Pete Pannes, executive vice president, chief sales officer with National MI. “We believe our new mobile app created specifically for credit unions, along with the industry-leading rate finder on our Web site, make it simple for credit unions to do business with National MI.”

Equator Enhances Product Line With Servicing Transparency

The three areas of focus now include: Academy Training; Industry Training; and Custom Training. “We’re extremely pleased to launch the VRMU Academy and have completed more than 20,000 make it available to all industry courses. VRMU uses instructors that professionals,” said Effie Dennison, are prominent, experienced, practic- senior vice president of business ing professionals to bring a high level development for VRMU. “This has of quality and expertise to every become an increasingly dynamic course. With this latest addition to industry and companies at all levels their programs, VRMU is expanding are looking to ensure seamless conits offerings to include the new small- tinuity of operations. Small busibusiness focused courses in addition ness owners know the devil is in the to its industry-recognized continuing details, and this new program will educational courses and customiz- help ensure they know those details able client-specific training. and more.”

Your turn National Mortgage Professional Magazine invites you to submit any information promoting new “niche” loan programs, new products or any other announcement related to the introduction of a new program, to the attention of:

New to Market column Phone #: (516) 409-5555 E-mail: newsroom@nmpmediacorp.com Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

Equator has enhanced its product suite with its new Loan Management module to assist mortgage loan servicers with compliance and transparency across their businesses and technologies. The new Loan Management module strengthens a mortgage servicer’s existing technology, making it easier to administer rules, assign loans, reconcile portfolios and take snapshots of decisions. The module simplifies compliance for mortgage servicers by creating detailed audit trails and compliance checks that are documented, stored and easily accessible for review. It can be used throughout the entire lifecycle of default from delinquency through liquidation. “Our new Loan Management module makes it easier and faster for mortgage servicers to comply with the changing regulatory environment by providing a transparent, flexible process which is based on our deep industry experience developed over the last ten years,” said John Vella, chief operating officer of Equator, an Altisource business. “We are excited to have a customizable solution that can span the servicing spectrum and integrate with all the existing servicing systems.”

NationalMortgageProfessional.com

VRM University (VRMU) has announced the launch of the VRMU Academy, a new training program that offers courses targeted toward small businesses in the mortgage and real estate industries. The new courses include personnel and human resources compliance training, leadership and professional development and operational best practices to advance small and midtier organizations. Since 2009, VRMU has trained over 10,000 industry professionals that

w w w. l i s t i n g b o o s t e r. c o m

n National Mortgage Professional Magazine n OCTOBER 2014

VRMU Announces New Training Academy

“For many mortgage leaders, the journey to an orderly distant horizon will not be easy in view of the current state of the industry, which is ripe with chaotic issues that have yet to be addressed by either the federal government or the mortgage space itself.”

Tomorrow’s Mortgage Space By Phil Hall The Japanese novelist Kobo Abe once wrote, “There is always order in the distant view. No matter how strange the happening, it can never project from the frame, from the order which this distant view possesses.” And, yet, professionals within the mortgage space seem to have a different comprehension regarding their industry’s distant view. For many mort-

gage leaders, the journey to an orderly distant horizon will not be easy in view of the current state of the industry, which is ripe with chaotic issues that have yet to be addressed by either the federal government or the mortgage space itself. “We have a massive air of uncertainty in this marketplace,” observed Phil Bracken, founder and chairman of the

OCTOBER 2014 n National Mortgage Professional Magazine n

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America’s Homeowner Alliance, based in Washington, D.C. “The GSEs are in flux. The FHA recently needed a draw from taxpayers. The continued constriction of credit, mostly around the tightening of credit scores, has an impact on the consumer’s ability to get access to affordable financing.” “Actual housing value has yet to see a full recovery,” said Jerry Walters, senior vice president and chief operating officer at Tampa-based Olympia Capital Management. “People in Middle America are afraid to list their houses because they feel they will not find a new house to move into. After the bubble, a lot of cash went into buying up affordable housing and turning them into rental properties. Those houses were taken off the market. And with QM, an increase in rates knocked a lot of people out of the market.” “Many have hunkered down and decided to stay put,” commented Andy W. Harris, president of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and treasurer of NAMB—The Association of Mortgage Professionals. “With recovering equity and the stronger appreciation we’ve seen, these homeowners are motivated to sit still and see what happens.” “A huge portion of potential buyers are not able to put 20 percent down,” said Logan Mohtashami, an Irvine, Calif.-based senior loan manager at AMC Lending Group and a financial blogger at LoganMohtashami.com. “Whenever you put down less, you have to borrow more. One-third of the market is cash, and about 17 percent of mortgage buyers are the rich. Mainstream American doesn’t have that [capacity]. Rates have gone lower all year long, inventory is rising, and rents are rising. In a normal housing market, that would create demand. But we have negative growth–applications are down 10 percent to 20 percent, sales growth will be negative this year.” “Affordable housing is still not quite where it needs to be,” said Faith Schwartz, senior vice president of government affairs at Irvine, Calif.-based CoreLogic “Homes are still quite expensive.”

“We have huge segment of American consumers on the sidelines,” lamented Jeff McGuiness, CEO of St. Louis-based Lenders One, who added that many loan officers are frustrated over the general state of lethargy in the purchase market. “The shift to a purchase environment helped many of our members understand that the phone doesn’t always ring–and that you have to go out and make it ring.” McGuiness acknowledged this raises another problem for the industry: the low number of new mortgage professionals seeking to come into the industry. “If I was an alarmist, I’d say we as an industry tainted an entire generation from joining our industry based on the trials and tribulations of the past several years,” he continued. “I have a few of our members going against the grain, recruiting high quality applications out of college and offering robust training and guidance. But I don’t see us, as an industry, embracing that approach.” Still, few professionals within the industry have jettisoned their optimism regarding homeownership and the process of connecting borrowers with residences – not to mention the better world waiting for them at the aforementioned distant horizon. “If you set the right foundation and if you have the right tools in place, you can deal with any changes and issues,” added Darius Bozorgi, president and chief executive officer for Santa Ana, Calif.-based Veros Real Estate Solutions. “It is a $1 trillion market and the capacity for doing more is there,” stated Paul Imura, chief marketing officer at Palm Bay, Fla.-based ISGN Solutions. “The potential demand is there.” In viewing the future of the mortgage profession, there are three key areas that require particular attention into 2015: the impact of regulatory changes, the strategies required for attracting and maintaining a high quality of customer service, and the ability to identify trends that can expand a lender’s bottom line.

Washington’s role During his presidency, Ronald Reagan

would always generate laughs when he proclaimed the nine most terrifying words in the English language were “I’m from the government and I’m here to help.” But among mortgage professionals, few people are laughing over how the federal government has coordinated housing finance policy since the 2008 crash. “Federal solutions with good intent often work poorly for all,” said Thomas J. Pinkowish, president of Community Lending Associates in Essex, Conn., who was particularly critical of the Obama Administration’s handling of housingrelated issues. “Results matter, not more promises. Think about Obama’s federal refinance programs, which were complete failures for many years. Funds were unused while people struggled. The programs did not improve

until the federal government finally listened to industry and state governments. This Administration’s track record on housing and economic development issues is poor.” For Pinkowish, a more viable role for the federal government is to serve as a funding source for state agencies, which he believed have a better understanding of the distinctive needs of their respective markets. “The states know best about what is needed within their borders and knows the people better,” he said. “They can work more closely with the areas they designate as a priority. Involving the federal government slows things down.” Indeed, many mortgage professionals worry that the near-term future of the industry will be marred by a slower and more expensive process, due in

large part to federal compliance requirements instituted as part of the Dodd-Frank Act. “The regulatory requirements are almost oppressive,” complained Mike Hardwick, president of Brentwood, Tenn.-based Churchill Mortgage Corporation. “There has been a radical change in the regulatory environment that has really hurt our industry. Our company is spending a major six-figure–if not a seven-figure–dollar amount now on an annual basis that five or six years ago we were hardly spending at all. It is a major undertaking just to be sure we are fully compliant with the spirit and the letter of the law.” “Over the last three to four years, we’ve continued to see, on almost a weekly occurrence, compliance issues

causing lenders to be more tepid in some cases, creating a smaller box for the risks they are willing to take,” said Andrew Peters, CEO of Frederick, Md.based First Guaranty Mortgage Corporation (FGMC). Howard Michalski, chief operating officer at Centennial, Colo.-based W.J. Bradley, added that the QM rule that went into effect this year is forcing mortgage professionals to expand their responsibilities by being extra vigilant in dealing with their borrowers. “Because of QM, we are accountable for ensuring our borrowers can repay our loans,” he said. “I have an obligation to federal regulators that the borrowers have the ability to repay. We continued on page 74

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tomorrowâ&#x20AC;&#x2122;s mortgage space continued from page 73

have to be bankers now, not just paper shufflers.â&#x20AC;? Michalski acknowledged that the surplus amount of responsibility can dilute oneâ&#x20AC;&#x2122;s patience. â&#x20AC;&#x153;Being an originator, some days are fun and challenging and some days it fries your brains,â&#x20AC;? he said. Patrick Stone, president and CEO of Portland, Ore.-based Williston Financial Group observed that these pressures go far beyond the originatorsâ&#x20AC;&#x2122; offices. â&#x20AC;&#x153;Not just lenders are being impacted, but everyone around the process,â&#x20AC;? he said. â&#x20AC;&#x153;Lenders are responsible for their vendors being compliant. And the costs as a vendor to do business have

gone up. It had a fairly profound impact on the industryâ&#x20AC;&#x201C;not just with lenders, but vendors serving the industry.â&#x20AC;? As a result of this new regulatory burden, mortgage companies and their vendors have hired a new wave of attorneys and compliance experts to ensure every crossed-T and dotted-I meets the letter of the law. â&#x20AC;&#x153;If you are looking at the industry from a compliance and quality control standpoint, youâ&#x20AC;&#x2122;ll have a job for a long, long time,â&#x20AC;? said Annemaria Allen, president and CEO of The Compliance Group Inc., headquartered in Carlsbad, Calif. â&#x20AC;&#x153;Regulations are very hot and heavy,

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and making sure youâ&#x20AC;&#x2122;re in compliance and analyzing your risk is at the forefront of everyoneâ&#x20AC;&#x2122;s mind. And there is a big, big area that we have to look forward to in August 2015: The changes in Regulation Z and RESPA.â&#x20AC;? Allen is referring to the implementation of final rule amending Regulation Z (Truth-in-Lending Act) and Regulation X (Real Estate Settlement Procedures Act) to integrate mortgage loan disclosures. The TILA/RESPA rule, as it is commonly known, is a consolidation of a quartet of existing disclosures required under TILA and RESPA for closed-end credit transactions that are secured by real property into two documents: A loan estimate that must be either postmarked or delivered no later than the third business day after the receipt of a home loan application and a closing disclosure that the borrower must receive at least three business days prior to the consummation of the home loan. Starting Aug. 1, 2015, a mortgage broker or creditor must provide the new Integrated Disclosures to for a closedend credit transaction secured by residential property. â&#x20AC;&#x153;The CFPB guide for completion of these forms is 96 pages, and the rules itself are 1,900 pages,â&#x20AC;? Allen added. â&#x20AC;&#x153;It is going to be very interesting to see how that progresses.â&#x20AC;? Art Tyszka, senior director and general manager of residential lending at Minneapolis-based Wolters Kluwer Financial Services, referred to the TILA/RESPA rule as create â&#x20AC;&#x153;with tentacles into every corner of a lenderâ&#x20AC;&#x2122;s operation.â&#x20AC;? â&#x20AC;&#x153;There are over 1,200 business rules that need to be rewritten,â&#x20AC;? Tyszka warned. â&#x20AC;&#x153;And some legacy platforms are not capable of supporting calculations and workflow for the TILA/RESPA changes.â&#x20AC;? Tyszka also expressed concern that because the excess focus by the industry on getting prepared for the TILA/RESPA changes will limit sales of other mortgage-related technology. â&#x20AC;&#x153;This hampers a lot of vendors from introducing new products,â&#x20AC;? he said. But it is not just lenders and vendors that are going to experiencing a new playing field. Richard J. Andreano Jr., the Washington, D.C.-based practice leader of Ballard Spahr LLPâ&#x20AC;&#x2122;s Mortgage Banking Group, predicted that brokers and mortgage bankers will be fielding a surplus amount of confusion from

prospective borrowers once the new rules take effect. â&#x20AC;&#x153;There are going to be a lot of questions and mortgage professionals will need time to spend with customers,â&#x20AC;? he said. â&#x20AC;&#x153;The rules will be better received by consumers. But we should expect some adjusting period from consumers that are used to the old forms.â&#x20AC;? Avi Nader, CEO Of ACES Risk Management Corporation (ARMCO), based in Pompano Beach, Fla., ruefully noted that 2015 will continue a â&#x20AC;&#x153;new normalâ&#x20AC;? in the mortgage space, with extra costs associated to compliance-related expensesâ&#x20AC;&#x201C;but the situation, while difficult, is not completely impossible. â&#x20AC;&#x153;Companies are starting to recognize no getting around the increased costs of complianceâ&#x20AC;&#x201C;and that hurts,â&#x20AC;? he said. â&#x20AC;&#x153;With volume down, how are they surviving? By have a more and more sophisticated understanding of the loan manufacturing processesâ&#x20AC;&#x201C;and a much better use of analytics to spot issues and get them under control. Next year will be less about loan data and more about data from all the parts of prefunding, post-closing origination and servicing.â&#x20AC;? Mark Mackey, executive vice president at International Document Services Inc. in Salt Lake City, was equally optimistic that any perceived obstacles can be overcome. â&#x20AC;&#x153;These are not necessarily horrible changes, but they are changes nonetheless and will require education,â&#x20AC;? Mackey said. â&#x20AC;&#x153;And people are more prepared because theyâ&#x20AC;&#x2122;ve been through this. Weâ&#x20AC;&#x2122;re seeing more webinars and documentation from vendors on how to be prepared.â&#x20AC;? If there has been the perception of too much activity regarding federal compliance, there is also the perception of too little activity on the question of the government-sponsored enterprises (GSEs)â&#x20AC;&#x201C;a question that, so far, remains unresolved, despite a flurry of rival bills introduced in Congress during 2014. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve got to solve this riddle of Fannie and Freddie, and get them permanently out of conservatorship,â&#x20AC;? said Christopher George president and CEO of San Ramon, Calif.-based CMG Financial and chairman of the California Mortgage Bankers Association. â&#x20AC;&#x153;Conservatorship is, by default, temporary. Some believe

weâ&#x20AC;&#x2122;re in a world of hurt, and weâ&#x20AC;&#x2122;re going to be in it a long, long time.â&#x20AC;? â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve been looking at the possibility of increased interest rates for a decade,â&#x20AC;? said Erick Strobel, owner and operator of Johnstown, Colo.-based Strobel Financial LLC. â&#x20AC;&#x153;The longer rates are held artificially low, the harder it will hit the housing market. How hard it hits will depend on the job market. If people increase their income, a higher rate will not affect their decision as much. However, if the job market remains the same with over $60 trillion in government debt, endless phantom menaces overseas, and then rates rising, you are looking at bigger problems than a housing market reactionâ&#x20AC;? Yet Gabe Leibowitz, president and CEO of New York City-based Skygroup Realty, stressed that any forecast on the impact of rising rates is predicated on the levels that could be reached. â&#x20AC;&#x153;It depends on the extent of the increase,â&#x20AC;? Leibowitz explained. â&#x20AC;&#x153;So far, there has been a very gradual effectâ&#x20AC;&#x201C; weâ&#x20AC;&#x2122;ve seen a small drop in the aggressiveness of the market, if not in the pricing. But if rates go up to six or seven percent and ARMs to 4.5 percent, we will see an impact.â&#x20AC;? Leibowitz is optimistic that tumult is not on the horizon. â&#x20AC;&#x153;Will rising rates kill the market?â&#x20AC;? he asked rhetorically. â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t think so. There is too much demand and too little supply for that to happen.â&#x20AC;?

Murray comedy film about the endless repetition of a nightmarish day. â&#x20AC;&#x153;What we are requiring of servicers are the kind of basic practices of customer service that should have been implemented long ago,â&#x20AC;? he continued. â&#x20AC;&#x153;We have said that in the early months we will look to see that those subject to the rules have made a good faith effort to comply. A good faith effort, however, does not mean servicers have the freedom to harm consumers. It has felt like Groundhog Day with mortgage servicing for far too long.â&#x20AC;? Oddly, two months after Antonakesâ&#x20AC;&#x2122; speech, the CFPB released data that seemed to contradict its deputy directorâ&#x20AC;&#x2122;s assertions of servicers doing a crummy job. In its Consumer Response Annual Report released in

April, the CFPB admitted that only 37 percent of the 163,700 complaints it received last year were related to mortgage issues, with the majority of complaints going to other financial services products and services. Of the approximately 59,000 complaints leveled against mortgage companies by those filing an inquiry with the CFPB, 85 percent of the complaints were related to servicing issuesâ&#x20AC;&#x201C;modifications, collections, escrow accounts. But 77 percent of these complaints were dismissed by the agency as being without merit; only two percent of the total mortgage-related complaints resulted in the consumer receiving monetary compensation. Furthermore, data from HOPE NOW, continued on page 76

NationalMortgageProfessional.com

The human touch and digital fingerprint One of the sore spots within the mortgage world continues to be the question of how servicers handle their duties. In February, CFPB Deputy Director Steven Antonakes created a shock with a speech before the Mortgage Bankers Associationâ&#x20AC;&#x2122;s annual servicing conference, in which he harshly berated servicers for the quality of their work. â&#x20AC;&#x153;We mean to end a failed process in which too many struggling homeowners have been kept in the dark about where they stand,â&#x20AC;? Antonakes said in his speech. â&#x20AC;&#x153;American consumers deserve better; they are entitled to be treated with respect, dignity, and fairness.â&#x20AC;? Antonakes raised further hackles by implying servicers have continued to do a shoddy job, despite new guidelines put forth by the CFPB, and he compared the servicing space to a classic Bill

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n National Mortgage Professional Magazine n OCTOBER 2014

Fannie and Freddie go back to the way they were, but that is not an option. Others say they can go away, but that is also not an option. There needs to be some government intervention to stabilize the secondary market. But I am not certain if government should be in the position of first loss.â&#x20AC;? â&#x20AC;&#x153;I think something will be done eventually, but I donâ&#x20AC;&#x2122;t think it will be done anytime soon,â&#x20AC;? said Mike McHugh, president and CEO of Melville, N.Y.-based Continental Home Loans Inc. (CHL) and chairman of the Community Lenders of America. â&#x20AC;&#x153;I also think it is a very precarious situation. You have an established norm in the business for decades,â&#x20AC;? said McHugh. â&#x20AC;&#x153;If you switch it to a new system that does not work, we have a big, big problem. It needs to be done with caution and over time.â&#x20AC;? McHugh continued, â&#x20AC;&#x153;Any phases or changes that are proposed need to be well thought out. I spent a lot of time in Washington, D.C. talking to people on both sides of the aisle on what the impact would be to small- and midsized lenders. What we look for is an alternative to big banksâ&#x20AC;&#x201C;they are the major aggregators in the countryâ&#x20AC;&#x201C;and without a Fannie or Freddie, we would have to all go through big banks to get our mortgage money.â&#x20AC;? CoreLogicâ&#x20AC;&#x2122;s Faith Schwartz expressed concern that the political dimensions of GSE reform have further delayed progress. â&#x20AC;&#x153;As you get further away from the crisis, it becomes a politically charged issue,â&#x20AC;? Schwartz said. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re also too close to the election. There have been some government inroads with several bills [proposed in Congress]. But itâ&#x20AC;&#x2122;s not happening anytime soon.â&#x20AC;? Also not happening any time soon is a reversal of the Federal Reserveâ&#x20AC;&#x2122;s policy on raising interest rates. Considering that historically low rates have been the â&#x20AC;&#x153;new normalâ&#x20AC;? for some time, there is apprehension on what would occur should rates begin to rise again. Joan Terry McMullin, a private banker at the Alpharetta, Ga.-based office of Wells Fargo Home Mortgage, stated that any notion of a rate increase seems illogical at this time. â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t know how rates can go up,â&#x20AC;? McMullin commented. â&#x20AC;&#x153;It is the only silver bullet the Fed has to prevent housing from sending us into a depressionâ&#x20AC;&#x201C; not a recession, a depression. I think

tomorrow’s mortgage space continued from page 75

a private sector alliance of mortgage servicers, investors, mortgage insurers and nonprofit counselors, detailed strenuous efforts by the industry to assist at-risk homeowners. During the second quarter of this year, HOPE NOW found that approximately 421,000 homeowners received non-foreclosure solutions from mortgage servicers, while permanent loan modifications totaled approximately 116,000 and short sales totaled 33,000. In comparison, foreclosure sales totaled approximately 115,000 for the quarter, representing the lowest quarterly total since HOPE NOW began tracking data in 2007.

“Since 2007, our members have offered over 20 million mortgage solutions, including more than seven million permanent loan modifications,” said Eric Selk, HOPE NOW’s executive director. “HOPE NOW continues to engage all stakeholders on a daily basis and our data reflects these efforts. Additionally, HOPE NOW members will continue to work with leaders and government agencies on a local level so that special attention can be given to the various markets around the country that still have the biggest housing related issues.” However, data does not entirely erase negative perceptions, and one

OCTOBER 2014 n National Mortgage Professional Magazine n

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key area where the mortgage industry has received its share of poor publicity in the servicing of home loans for active duty military personnel. George FitzGerald, senior vice president of the product management, servicing and default technologies division at Jacksonville, Fla.-based Black Knight Financial Services, expressed concern that 2015 will not see a return to problems related to the Servicemembers Civil Relief Act. “The industry cannot falter, especially with somebody who is off on active duty protecting the country,” FitzGerald said. “I think the industry is much more cognizant of servicemembers’ needs. However, it has to remain in focus, because you can’t make a mistake in that area.” There is also the challenge of what happens when residential properties regain their equity after being underwater. Richard Zahm, president of San Francisco-based Primarq, warned that the return of positive equity needs to be mirrored with a new maturity in comprehending the value of this equity. “Equity lifts the economy,” Zahm said. “But aside from the feel-good benefits, increased value has to be monetized and then either invested or used for consumption. Paper wealth has to be converted. When prices rose in the early 2000s, homeowners tapped into their equity using HELOCs and other debt vehicles. This stimulated the economy–and we’re still suffering from this. These vehicles are coming back, which could create a new over-leveraged situation: we’re early in the cycle. There’s also the problem of many of the ‘underequitized’ continuing to be ‘underqualified’ to refinance their homes given current lender sentiment and QM conditions.” Going forward, there is little evidence to support the notion that servicers will slack off or worse into 2015. “I am consistently seeing an increase in the emphasis on improving the customer experience,” observed Barry Hayes, co-founder and SVP of TeleVoice, headquartered in Houston. “Some of that comes from outside focus on servicers, like the CFPB, but some is a result of healthy introspection, with the servicers saying, ‘Hey, we can and should improve the quality of the customer experience.’ It is very, very encouraging, and it will

yield some very good results.” Running alongside this issue is the question of subservicing. The Compliance Group’s Annemaria Allen noted that the new compliance regimen that the mortgage industry is working under runs the risk of creating problems for subservicing operations. “The challenge is to make sure we handle all payment accurately with the borrowers,” Allen said. “This is becoming a bigger issue for subservicers. These subservicers are servicing for thousands and thousands of lenders, and they’re getting hit for every question on all of the documentation. They have limited resources to keep up with all of these requests.” On the origination side, Jonathan Corr, president and chief operating officer at Ellie Mae in Pleasanton, Calif., believed that a personnel-based answer to limited resources is not the proper course of action. “Compliance and quality demands have driven the costs of getting loans done from about $3,500 in 2009 to over $8,000 in the first quarter of this year,” Corr said. “That’s a huge jump, Most of that is people throwing bodies at the challenge–more underwriters and more processing and compliance folks. They are fearful of buybacks and fines. But it’s human spackle to fill in all of the holes, and that’s very expense. The only way to do this is to embrace automation. Ultimately, everything should be electronically. We will continue to see that trend in 2015. If not, the cost will go even higher.” “The more and better data you have, the better decisions you make,” stated Paul Zoukis, CEO of Vienna, Va.based Vantage Production. “The industry needs to have an investment in technology to make this more effective and efficient. That is Business 101.” Mat Ishbia, president and CEO of Troy, Mich.-based United Shore Financial Services (USFS), viewed the push for technology-based solutions in Darwinian terms. “Technology is taking over our industry,” he said. “A lot of people and companies stick with the old processes and systems, and are not using technology the way other industries are. Some people think if they stick with told school of thinking that stuff

works. But by using technology, having an app, having access to visible information on the transaction at alltime allows you to differentiate yourself. If you donâ&#x20AC;&#x2122;t and everyone else is doing it, they youâ&#x20AC;&#x2122;ll be a dinosaur.â&#x20AC;? Ishbia added that his company is â&#x20AC;&#x153;spending lot of money and time to make it easy as possible to originate loans and submit to the lender. The â&#x20AC;&#x2DC;if-it-ainâ&#x20AC;&#x2122;t-broke-donâ&#x20AC;&#x2122;t-fix-itâ&#x20AC;&#x2122; mentality created problems for the industry. Weâ&#x20AC;&#x2122;re so busy in the mortgage business that we canâ&#x20AC;&#x2122;t think about the future. We have to make sure we stay one step ahead.â&#x20AC;? Mark Greco, president of Austinbased 360 Mortgage Group LLC, concurred, although he noted that the mortgage space as well as the wider financial services industry has tradi-

tionally been pokey when it comes to embracing new high-tech answers. â&#x20AC;&#x153;This is going to be crucial,â&#x20AC;? said Greco. â&#x20AC;&#x153;The industry has always been archaic when it comes to technology. But going forward, weâ&#x20AC;&#x2122;re going to have to do more with less.â&#x20AC;? One digital area where the industry is catching up involves mobile technology. â&#x20AC;&#x153;Every industry is now feeling the effects of the publicâ&#x20AC;&#x2122;s appetite for mobile,â&#x20AC;? commented Eric Robichaud, CEO of Woonsocket, R.I.-based 401 Consulting. â&#x20AC;&#x153;It is now â&#x20AC;&#x2DC;how we do things.â&#x20AC;&#x2122; We see anywhere from 40 percent to 72 percent of Web visits originating from mobile these days, depending upon the type of site. Homebuyers are searching the likes of Zillow and Trulia from their phones when they are out and about, visiting open houses,

and pulling up info on mortgage rates and brokers on the spot. Not having a mobile-optimized Web site is already starting to cost a company real business. Within a year, those companies without a mobile optimized site will be feeling real pain, sliding down the slippery slope of declining revenues. They will be going the way of the dinosaur, scratching their heads and wondering, â&#x20AC;&#x2DC;What happened?â&#x20AC;&#x2122;â&#x20AC;? The latest mobile development comes from EasyMortgageApps, which introduced its Snap Your App product this month. This product offers a sense of speed and transparency in the origination process that was previously unavailable. â&#x20AC;&#x153;The consumers take pictures of documentation and, through technology, are able to capture the informa-

tion, put into LOS and produce â&#x20AC;&#x2DC;snap decisions; that gives a probability score if they qualify for a house,â&#x20AC;? explained Michael Kelleher, cofounder and executive vice president of Swampscott, Mass.-based EasyMortgageApps. â&#x20AC;&#x153;The company can follow, almost instantaneously, with a pre-approval of their application.â&#x20AC;? Kelleher stated that mobile technology will encourage a more vibrant communication process between all parties in the origination chain. â&#x20AC;&#x153;It will be a marketplace of apps, of people talking to each other and more transparency,â&#x20AC;? he predicted.

Trends to be set But what will next yearâ&#x20AC;&#x2122;s potential borcontinued on page 78

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rowers pursue? If this year’s trend is any indication, jumbo mortgages will continue to be very popular in 2015. “There is heavy competition between banks and mortgage bankers over jumbo loans,” said Ruth Lee, executive vice president of sales, marketing and business development at Denver-based Titan Lenders Corp. “If we look at a $750,000 to $1 million loan amount, there is a significant amount of pent up demand. And the risk appetite is really conservative–no one wants to be on the bleeding of edge of how to finance jumbos.” “This has been the best jumbo market since 2004,” said Paul

Anastos, president of Walpole, Mass.based Mortgage Master. “There is a huge appetite, especially among large banks. Those assets always performed–now there’s a big audience for that.” Another current trend that is pointing to greater viability is green housing. According to the recently released study “Green Multifamily & Single Family Homes: Growth in a Recovering Market,” published by McGraw Hill Construction, builder and remodeler members of the National Association of Home Builders (NAHB) are reporting a strong increase in the volume of

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green building for single-family homes. The study finds that builders and remodelers in both the single family and multifamily sectors recognize the value of going green: 73 percent of single family builders and 68 percent of multifamily builders say consumers will pay more for green homes. “Greater consumer interest in green homes has contributed to the ongoing growth, leading us to anticipate that by 2016, the green single family housing market alone will represent approximately 26 percent to 33 percent of the market, translating to an $80 billion to $101 billion opportunity based on current forecasts,” said Harvey Bernstein, vice president of industry insights and alliances for McGraw Hill Construction. “The findings also suggest that lenders and appraisers may be starting to recognize the value of green homes, making it a factor that could help encourage the market to grow if there is more widespread awareness across the U.S.” One area that is beginning to show signs of percolating involves home equity-related products. The aforementioned TILA/RESPA rule going into effect next August does not apply to home equity lines of credit (HELOC), and the growing level of positive equity among U.S. homeowners appears to point to a new push into equity-related products. “We are going to see homeowners want to tap into their equity with HELOCs,” said Rick Seehausen, CEO of LenderLive Network Inc. in Glendale, Colo. “We will see a lot of folks looking to renovate their home and obtain home improvement loans rather than moving up in their housing decisions.” Rosie Biundo, senior director of product marketing at Atlanta-based Equifax Verification Services, agreed. “As we look at where the market is growing, we are going to see the HELOC market continue to grow,” Biundo said. “Home values are on the rise. While borrowers and homeowners that were upside down a few years ago, we are now seeing the trend reversing and these people will now have more lendable equity. But because of low mortgage rates, people are staying put. Instead of buying new homes, they will use the equity in

home to make enhancements on their existing homes.” Biundo added that in the interim period between the retreat of dominant refinancing activity and the eventual reanimation of the purchase market, lender will look to home equity lending “to fill that gap and fill their pipeline.” Another trend that may grow in vibrancy in 2015 is the still-nascent concept of equity sharing, which is being developed by the start-up Primarq. Under its business model, homebuyers can either tap equity in their homes or supplement down payment funds through an equity share finance partnership with accredited investors. “For both affordability and sustainable home ownership, there is a better way to enable ownership and the opportunity to create wealth,” said Zahm of Primarq, whose company is in the process of creating an Internetbased platform for this new approach to real estate finance. Another home equity tool that is also excluded from the TILA/RESPA rule is reverse mortgage lending. Rob Katz, executive vice president of sales at ReverseVision Inc. in San Diego, reported that his company is beginning to see a spike in inquiries from originators that are looking to expand into this sector. “What we’re seeing in the second half of 2014 is more and more forward loan originators and brokers getting into the reverse business,” Katz said. “The traditional refinance market is gone–originators are looking for ways to supplement their income and make money. In the last 12 months, 725 new brokers started using our software, and 50 to 60 new brokers sign up every month. As values of homes going up, introducing more equity–the reverse is how you draw that equity out without having to make a payment gain. Tapping into that equity with the reverse is the most logical way. And there is a huge pool of people qualifying for these loans that are sitting in homes with more equity.” But at least one industry leader warns that a rush to equity-related products may create a new problem. “The way the economy is going, consumers will increasingly rely on debt to support standards of living

presence in the residential property market. “In the case of a real estate investor, originators should understand how to calculate rate of return or how to analyze a property from a financial standpoint,” Nicholas said. “Then, you are able to put the mortgage product in the context of what the investor is trying to do.” If anything, 2015 does not promise to be a boring year. According to Chris Sorensen, director of mergers and acquisitions at Corona, Calif.-based Paramount Residential Mortgage Group Inc. (PRMG) and author of Financial Sense to White Picket Fence, the coming year may offer the industry more questions than answers. “People need shelter, so real estate will always be a decent investment

and our government does recognize–I hope–that housing is essential to a stabilized American economy,” said Sorensen. “The challenge is that with the Feds pumping money into the markets, the investment banks and hedge funds put much of this money to work in rental housing and this artificially pumped up values beyond the average American’s confidence. Forget facts–perception amongst the people is the reality and the polls reveal consumer confidence is waning. This is the variable that causes grey hair for traders. In short, I have no idea what’s next.” Phil Hall is managing editor of National Mortgage Professional Magazine. He may be reached by e-mail at philh@nmpmediacorp.com. 79

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n National Mortgage Professional Magazine n OCTOBER 2014

going on,” Potter said. “Every nickel and dime matters a lot, and the costs to originate a loan are now higher than ever before.” So how can companies remain ahead of the curve? Ellie Mae’s Corr stressed the need for a more aggressive approach to securing business. “People have to be prepared to be purchase-centric if they’re going to play in this marketplace, with refi as a little bonus on the side,” Corr said. “They will need to have more feet on the street. It will be important to reach out through establishing relationships with real estate professionals. There are a broad array of local independent mortgage bankers and community banks that do better in a purchase market because they have that kind of a presence.” CMG Financial’s George stressed improved customer service, with an emphasis on ensuring that loan officers fully comprehend what best suits the borrower. “We need to teach loan officer how to understand products thoroughly and who is not right for those products,” commented George. “We can also do a far better job in confirming the borrower really understands what they’ve got–the disclosure that they sign is not enough. We should call borrowers and go over the requirements–we’re wallpapered with disclosure paper. All of this needs to happen in a dialogue and not as form to be signed with 30 other forms–that is zombie signing.” Gibran Nicholas, chairman and CEO of The CMPS Institute in Alpharetta, Ga., also advocated a more holistic approach to dealing with borrowers. “I think that it is important for any salesperson to understand where their product fits in the context of what their client is going through,” Nicholas explained. “If a loan originator can understand what the customer is going through, what the challenges they are facing with college funding or retirement planning–the sort of things that a financial planner looks at–then they can bridge the gap between the housing decisions and what the client is facing in their life financially, and they will be more effective in what they do.” Nicholas added that this big picture would also apply to the investors who still constitute a considerable

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expected of them,” said Stanley Street, president of Street Resource Group in Atlanta. “We will see people leveraging their houses again to support daily operating expenses. Ultimately, there will be another cycle of an increase in debt–but without a corresponding increase in basic earnings.” Street added that the industry is cognizant that the economic picture is nowhere near the level of desired stability. “Most mortgage bankers are trying to position themselves to gain the business they can get while understanding the economy is still somewhat fragile,” he said. And this raises another concern for 2015: what happens when there are more companies competing for a stillsmallish number of clients? “Competition is always a good thing to keep things fair and balanced,” said 360 Mortgage’s Greco. “But when you have more players competing for less business, there is going to be a point of diminishing returns.” Continental Home Loans’ McHugh predicted a smaller industry come next year. “There is going to be consolidations and mergers,” McHugh said. “The capital requirements side of the business is being increased daily. Small banks are feeling the pressure of how to stay in business and make a profit. The net results will be mergers of quality organizations and similar organizations to find ways to go together.” “Companies that have been lean and meager in keeping costs down are at the make-or-break point,” said Brandon G. Haefele, president and CEO of Catalyst Mortgage in Sacramento, Calif. “The cost of compliance continues to increase at such a rapid pace that over-regulation will either drive people out of business or force them to join bigger firms because they cannot sustain these additional costs. And that will create more damage to economy and market because there will be less competition.” Todd Potter, senior vice president and national sales manager at Houston-based Envoy Mortgage, echoed those sentiments. “There is a lot of compression

“As consumers continue to become better informed about lending options and enjoy faster, more continuous access to information, the ability to provide automated and efficient selfservice will become a hallmark of successful companies.”

has meant being aware of the opportunity for an acquisition as it presents itself, or being prepared to move into different external products or markets, but it can also mean looking for internal opportunities to improve By Brian Simon processes or focus on organic growth. As clichéd as it may sound, we have The past decade has been one of near loan products that serve a diverse and found that when one window closes, another one generally opens. constant change for the mortgage growing customer base. As private capital makes its way industry. Following the real estate boom of the early 2000s—and the slowly back into the market, we 3. Adapt to change subsequent bust—buyers, lenders, expect to see an increase in the avail- The days of a single, static mortgage and institutional investors are all ability of non-agency products, which lending model are behind us, and slowly but steadily finding their way gives us the flexibility to serve a wider while that continues to be a huge back to the residential housing mar- spectrum of creditworthy customers. adjustment for some traditional ket. As lenders continue to adjust to We continually look for responsible lenders, successful organizations will the Qualified Mortgage (QM) rules ways to provide loans where others view it as a positive development. For that took effect in January 2014, cannot and help buyers with uncon- example, New Penn at first focused many are still wondering what the ventional needs, such as self- only on consumer direct lending, but future of mortgage banking will employed borrowers or those with as the market continued to change, bring. While the return to more care- both high incomes and higher than we launched additional distribution channels that allow us to better adapt ful lending practices comes as a relief average debt obligations. Of course, it’s important to note, to fluctuating conditions, including to responsible lenders, we also recognize the challenge of finding new that even while the lending options our third-party originator (TPO) chanways to grow and develop our busi- themselves are more creative, our nel for brokered and closed loans, ness in today’s tough regulatory envi- internal criteria remain conservative: and our distributed retail channel, Buyers always need to provide full which continues to grow. ronment. Operating in multiple channels The good news is that the demand income documentation, demonstrate for purchase money remains strong. strong credit scores, and meet addi- translates into an opportunity to drive Mortgage rates, although up slightly tional guidelines that indicate their revenue and derive profit from multifrom the historic lows of 2012, still ability to repay. Innovation is all ple markets. All are equally imporremain extremely low, making home about developing loan products that tant, but we recognize that some work ownership an attractive and attain- meet the specific and individual better than others in certain market able option for many buyers. In needs of solid buyers, not finding conditions. September of this year, builder confi- ways to deliver loans that exceed a 4. Embrace technology dence for new single family homes buyer’s means. As consumers continue to become reached its highest level since 2005. better informed about lending How can mortgage lenders capital- 2. Seize opportunities ize on this renewed sense of opti- My company, New Penn Financial, options and enjoy faster, more continmism and build a profitable and sus- launched in 2008 in the thick of the uous access to information, the ability tainable model for the years ahead? financial crisis. For us, the shakeup in to provide automated and efficient Below, I’ll outline five strategies that the industry represented just the first self-service will become a hallmark of have helped us not only survive but of many opportunities, as it allowed successful companies. The new Know Before You Owe thrive throughout these challenging us to rapidly assemble a strong management team with decades of collec- (KBYO) disclosure forms, coming to a and exciting times. tive experience and a shared perspec- closing table near you in August 2015, tive on how to change and revitalize seek to both help borrowers under1. Be an innovator stand their options and make it easier While new, more stringent lending mortgage lending. Even as the company has grown for them to comparison shop. An requirements have made it difficult for even credit-worthy buyers to meet over the past six years, we’ve main- informed buyer is a good thing, and the criteria for government and tained that start-up mentality, and it lenders who can provide clear, timely agency loans, they have also created a gives us both the mindset to recog- information throughout the buying welcome opportunity for lenders who nize potential opportunities and the process via compelling Web content are able to anticipate the needs of ability to move quickly and seize or a useful smartphone app will have non-traditional buyers and deliver them as they arise. In some cases that a leg up on the competition.

Innovation and Adaptation as Keys to Success in a Dynamic Market

OCTOBER 2014 n National Mortgage Professional Magazine n

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5. Develop relationships It may seem like old-school advice, but all the technology in the world won’t take the place of good oldfashioned relationships and customer service. For my firm, that has meant not only continuing our focus on customer service, but also responding specifically to the needs of our brokers and working closely with real estate agents through our retail channel. For our TPO channel, technology and relationship building have gone hand-in-hand as we continue to find ways to deliver more training, education, and open communication with our brokers, as well as finalizing the next iteration of our broker portal, which gives them instant access to information and allows them to make faster decisions. A big part of growing relationships has been simply listening to brokers and real estate professionals. The better we understand their needs, the better able we are to provide flexible options that allow them to serve a broader customer base. These strategies have helped my own company grow very quickly, but just as important to success is being a responsible lender; proactively anticipating the evolving regulatory climate; and doing the best job possible to take care of customers. All combined, the formula equates to a bright future, even in an uncertain market. Brian Simon is chief operating officer for New Penn Financial and is responsible for the third-party originations (TPO) channel. Brian brings 18-plus years of experience in mortgage banking and capital markets to New Penn. He plays an instrumental role in the development of innovative products as well as the strategic direction and exponential growth of the company. Brian is an active member of both the Fannie Mae and Freddie Mac advisory boards. He may be reached by phone at (888) 988-1695 or e-mail tposales@newpennfinancial.com.

“The non-QM market offers loan originators the opportunity to make profitable loans to low-risk homebuyers who don’t qualify for qualified mortgages.”

The Ayes Have It Non-QM loans can be safe with a reliable third-party set of eyes By Greg Holmes

There have always been borrowers who didn’t fit the standard mold, but who were financially solid enough to be a good loan risk. In today’s mar-

l New medical professionals who have large student loans but a high income l Self-employed business owners l People with high assets but low income l People with high or sporadic income, but low assets and littleto-no downpayment l New graduates with high income l New homeowners, and others

Create your own nonQM safe harbor with third-party verifications Because most non-QM loans will be kept in the lender’s portfolio, such loans should undergo a thorough verification process that mirrors the Ability-to-Repay (ATR) requirements for third-party verifications of income, assets, employment and more. Due diligence in 2014 and beyond looks substantially different than it did in the sub-prime mortgage years. Advanced technology has fostered the development of a number of new, automated tools and services that can verify applicant information and monitor applicant behavior throughout the mortgage process. These verification tools streamline and simplify

l The Work Number: This tool, offered through Equifax Workforce continued on page 82

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n National Mortgage Professional Magazine n OCTOBER 2014

Many non-QM borrowers are good risks

ket, a large, non-QM segment includes many people who fall just outside QM standards. Consider that the average credit score for a rejected prime mortgage loan in the U.S. is currently 724.4 In the past, anything over 720 was considered “excellent” credit. What this means is that people who have a great credit score and credit history but don’t fit the new “average” are being denied loans because they are falling into the non-QM category. People in this group might include:

l Undisclosed Debt Verifications: More than 22 percent of all debt is taken on by applicants within 10 days of closing. Undisclosed Debt Verifications provide real-time monitoring into borrower credit activity initiated during the “quiet period”–from the initial credit file pull through loan closing. Reports provided by all three bureaus give lenders confidence that the bor-

rower’s income-to-debt ratio is remaining stable through closing. Undisclosed Debt Verifications monitor new tradelines; new inquiries; new secondary reissues; new bankruptcies, judgments, and liens; new collections; new late payments over 30, 60, 90, and120 days; and recent high utilization on existing bank card and revolving tradelines.

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After the Qualified Mortgage (QM) rule was implemented last January by the Consumer Financial Protection Bureau (CFPB), many lenders became understandably reluctant to originate loans that fell outside QM standards. These standards not only protect consumers from getting mortgage loans they can’t afford, but also protect lenders from being sued by the borrower if s/he defaults on the loan. The advent of these new rules, however, caused some lenders to reduce the size of their loan qualification “box” and choose to turn down loans that even came close to the non-QM line. Their fear was that higher-than-expected homeowners insurance or a requirement for flood insurance might kick them out of the safe harbor and into the unsecured, nonQM ocean. As a result, only about 0.5 percent of home mortgage loans originated this year have been non-QM1, compared to 15 percent last year.2 But as the industry has grown used to the new regulations, and as the refinancing business has slowed due to rising mortgage rates, more lenders are beginning to take a cautious look at what non-QM lending might entail. Because the secondary market for nonQM loans is fledgling at best, these loans must be kept in the lender’s portfolio, making them a riskier venture. Even so, a recent survey from the American Bankers Association showed that 29 percent of banks now plan to get involved in making non-QM loans in target markets.3

both the QM and the non-QM approval process for lenders, taking the stress out of validation and verification. New products include:

the ayes have it continued from page 81

Solutions, provides fast, accurate employment and income verification to help lenders make informed decisions. The Work Number database contains the largest collection of payroll records contributed directly from employers, and houses more than 59 million current employment records contributed by more than 3,900 employers nationwide. This information is updated every payroll cycle, so lenders always receive the most up-to-date information possible. l Independent Appraisals: Rules

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l Affordable Quality Control (QC) Products: Automated quality control (QC) products enable lenders to uncover inconsistencies in borrower loan data and ensure each loan remains in compliance. These QC products re-verify employment, run a credit refresh, check for undisclosed debt, review automated underwriting approval, review the appraisal, verify compliance with local, state and federal regulations, and more. They provide lenders with peace of mind that the non-QM loans they are originating are good loans to make.

governing home appraisals underwent significant revision in response to the 2008 mortgage meltdown. Today, lenders are required to ensure the appraisers they use do not come under undue influence while doing their job. To avoid any appearance of impropriety, most lenders now use appraisal management companies (AMCs) which randomly assign appraisers as needed. AMCs offer valuation products that comply with the Uniform Standards Four tips for getting of Professional Appraisal Practice into non-QM lending (USPAP), Fannie Mae, Freddie Mac, The non-QM market offers loan origiDodd-Frank Act, and Appraiser nators the opportunity to make profIndependence requirements. itable loans to low-risk homebuyers who don’t qualify for qualified mortgages. Rely on the sound, tested underwriting guidelines you have used in the past to make loans that have generally performed well. As long as you make a reasonable, good-faith determination that the consumer is able to repay the loan based on common underwriting factors, as well as document the information you consider, you can originate any mortgage.

Home Buyer Education from

AllRegs®

Content to grow your mortgage business. The AllRegs Homeowner Education Library provides your company with turnkey, online home buyer education courses to educate your current and potential customers. For a low annual fee per course, you can license one or several consumer courses and display them on your website as a customer beneﬁt. AllRegs makes it easy by providing hyperlinks to the courses you select.

Take it a step further with lead generation. You could require visitors to provide contact information in exchange for course access, generating leads for your mortgage team.

Lenders ready to take the leap should protect themselves in the following ways: 1. Require non-QM borrowers to meet the majority of the QM standards. In most cases, you may want to require that applicants conform to all but one QM factor. Setting your own strict level of compliance means that borrowers who receive non-QM loans are generally going to be those who already have high net worth and are on solid financial footing. This helps to protect you from the kinds of problems the market experienced just seven years ago.

2. Be rock-solid sure about the information provided by the borrower. Make sure the assets, income, debt and other information they report are accurate. 3. Consider only originating non-QM loans with a very low loan-tovalue–such as a maximum 60 percent. This helps minimize the risk of default because the borrower has “skin in the game.” And, should a default occur, the large down payment provides you with protection against loss even if property values drop a little. 4. Don’t try to keep costs down by skimping on the use and expense of verification tools. There are so many more verification tools available today than there were in the sub-prime days. These tools can identify false information and flag data that is questionable. Non-QM loans can be a profitable path, but you’re making those loans in an unsecured world. Protect yourself by using automated verification tools to your advantage. Mortgage professionals moving into the realm of non-QM loans will find that there are some very good loans–and profits–to be made. The race will go not just to the swift, but also to the smart. As with every venture, it pays to do thorough due diligence and protect your company from unnecessary risk. Greg Holmes is national director of sales and marketing for Credit Plus Inc., a third-party verifications company serving the mortgage industry. He can be reached by e-mail at info@creditplus.com.

Footnotes 1—www.nytimes.com (06/29/14). 2—www.mpamag.com (06/27/14). 3—www.americanbanker.com/issues/179_67. 4—www.fool.com/investing/general (06/22/14).

Request a demo by calling (800) 848-4904 or visiting www.allregs.com and clicking Consumer Education.

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“Lenders should focus on identifying improvement opportunities by first asking their customers. Because at the end of the day without customers, you have no business.”

Profit-Driven Lender Transformation Begins With the Customer By Christina Pham “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by taking his business somewhere else.”—Sam Walton

Analyze the problem with the help of the customer

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“Usually when these types of surveys come out a company is looking at what is wrong and trying to fix things. First, you need the technology piece that makes it easy for brokers to send you loans, as I know processors they will originate the loan where it is easiest to do so. Your system is very cluttered and difficult. Second you need consistency in underwriting, it seems underwriters are too much on their own, and need management over site

The company used the initial impressions gathered from the broker surveys to perform their own quantitative and qualitative internal analysis and identify several additional improvement opportunities that needed to be addressed. One key

improvement opportunity that was identified was to focus more on account penetration and less on adding more brokers as only 10 percent of their clients were funding two or more loans per month and the majority of their clients had only one loan officer submitting loans. Another important internal finding was that loan file conditioning was inconsistent as the number of conditions per loan file varied widely depending on who the underwriter was that reviewed the file.

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A large wholesale lender was faced with a dilemma. Their volume had dropped sharply over the past year and the rate of decline of their volume and their percentage of purchase money business were dramatically lower than industry averages. Their account executive (AE) productivity had also fallen below industry averages. The lender decided to take a unique approach to address their problems. Instead of taking the traditional approach of internally focusing first on operations, product offerings, etc., and the lender chose to ask their customers to identify key issues and improvement opportunities and then utilize the feedback to transform their company. The first primary issue to address was to identify who their “true” customers were. Traditionally, most wholesale lenders focus on broker owners and management as their customers but in actuality, the primary “customers” for wholesale lenders are the broker’s loan officers and processors. Therefore, the lender designed an electronic survey that targeted loan officers and processors in addition to broker management. The results of the survey had a cathartic impact on the lender’s perception of their business model and operations. First, the company learned they had a lot of loyal clients who truly cared about helping the lender improve demonstrated by a very high survey response rate of over

35 percent. They learned that although their pricing was considered competitive, their average broker capture rate (known as “share of wallet) was less than 20 percent. There were several root cause issues that were limiting their ability to do more business with their clients. First, clients ranked customer service and support as the most important attribute when selecting lenders to do business with; and they rated the lender as only average in this area. Second, the lender’s technology that was used by their clients lagged behind their competitors because clients felt it was “difficult to submit and price loans using their technology platform.” The lender learned that their submission, underwriting and loan file conditioning processes were confusing to their customers. They also learned that that although brokers considered the account executive relationship as one of the most important drivers for doing business, their account executives lacked the appropriate productivity management tools to enable them to touch base with as many customers as some of their competitors. One survey respondent’s feedback succinctly identified overall client perception of the lender. The respondent said:

and structure. Improve your file flow and build consistency in your underwriting. Once this is running, 110 percent business will come to you and employees, and account execs will have confidence while further builds business. Love you guys, hope things are well.”

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Identify transformation critical success factors The assessment identified several critical success factors for the lender to focus on addressing: l Offer better technology to improve customer experience and productivity. l Provide comprehensive customer support focused on all aspects of the customer experience including technology utilization, account management and pipeline management. l Streamline and standardize submission and underwriting processes focused on consistent conditions generation and loan file decisioning.

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l Get back to basics and provide sales effectiveness training to account executives geared towards selling to loan officers and processors and implement a comprehensive CRM platform to improve account executive productivity. l Enhance and expand metrics management to drive continuous improvement and provide more real time data to improve decision-making.

Donâ&#x20AC;&#x2122;t implement changes â&#x20AC;Ś transform The lender realized that they did not have time to implement incremental

changes to their business and hope for the best, they needed to implement several initiatives concurrently. Therefore their executive team managed the implementation of all initiatives as one large transformation program. The transformation program included the concurrent implementation of several projects: l Launched a new technology platform with a primary focus of providing better client facing functionality in the areas of pricing, automated underwriting, document submission and pipeline management. l The lender implemented several improvements to underwriting processes and procedures beginning with using the technology platformâ&#x20AC;&#x2122;s comprehensive automated underwriting system (AUS) engine to automatically generate rules based conditions for the majority of all conditions that were to be generated on a loan file. In addition, the lender implemented weekly underwriting training for underwriters, account managers and account executives to help drive consistency in underwriting and improve the knowledge of account managers and account executives regarding loan file conditioning. l The lender implemented comprehensive customer management and support processes including instant chat functionality for customers to get immediate response from the lender whether the issue is technology or loan file related. l The lender conducted sales effectiveness training for their account executives which emphasized interpersonal sales skills and techniques focused on selling to loan officers and processors. In addition, the lender implemented business development activity targets and metrics for the number of client visits, phone calls and e-mails that drive business development success. The lender became one of the first wholesale lenders to implement a robust CRM platform to track account executive activities and streamline marketing and prospecting activities in order to drive productivity improvement for their account executives.

l Last but not least, the lender implemented a comprehensive business intelligence metrics management platform and integrated the business intelligence platform with the new loan origination system and the CRM to provide real-time information that could be used to drive productivity and timely decision-making.

The transformation results The performance improvement of the lender after the completion of the transformation program was dramatic: l Quarterly origination volume grew 23 percent as compared to a 10 percent decrease in origination volume for the industry using the same quarterly time periods. l Average AE productivity increased by 30 percent during the same time period. l Lender efficiency, as measured by loans per FTE, is 45 percent higher versus the average for other lenders in same peer group (similar sized lenders in the wholesale channel).

Conclusion Lenders should focus on identifying improvement opportunities by first asking their customers. Because at the end of the day without customers, you have no business. Most lenders make the mistake of not taking the time to gather customer feedback when prioritizing improvement initiatives. In addition, dramatic improvement cannot happen one initiative at a time because companies are like humans, each part must work at an optimal level or it impacts other parts of the organization. Therefore, true transformation must be managed as one large program, not as a collection of independent improvement initiatives. Christina Pham is founder and CEO of JMAC Lending, a mortgage bank based in Irvine, Calif. Prior to founding JMAC Lending in 2007, Christina was a branch manager for Com Unity Lending. She may be reached by phone at (949) 390-2688, ext. 2615 or e-mail christina@jmaclending.com.

“And just as each previous generation has had its own challenges and ideals, lenders need to prepare now to understand the financial and economic pressures facing the millennials, as well as the cultural changes that could impact their willingness to purchase a home.”

Changing of the Guard: Are You Prepared for Millennials to Become the Future of Mortgage Lending? By Scott K. Stucky

The future of the housing market is highly dependent on the Millennial Generation. The MBA reports that Millennials will establish 24 million new households and be the leading age-group by 2043. Additionally, the number of Millennials projected to

A generation burdened with debt It is also important that lenders consider the financial handicap that the new generation is facing–student loan debt and a still struggling economy. The Consumer Financial Protection Bureau (CFPB) recently disclosed that student loan debt has now surpassed the $1 trillion mark. According to a study conducted by the Project for Student Loan Debt, seven in 10 college seniors who graduated in the last year had substantial student loan debt–hindering their ability to apply for a home loan. The encumbrance of

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Understanding the largest generation since the Boomers

own a home in their 30s will increase by 2.7 million. Decreasing unemployment rates, low interest rates and relatively lower home values that are starting to rise would signal a housing market surge in most previous decades. So why are Millennials not applying for loans? One issue is that Millennials do not place the same high priority on homeownership that their parents and grandparents did. According to a recent study conducted by the Census Bureau, an article published by CNN Money reported that a mere 36 percent of Americans under the age of 35 own a home–which is down 42 percent from just four years ago in 2007 and the lowest percentage recorded since 1982 when the agency first began tracking homeownership using age-specific demographics. According to the research, 90 percent of Millennials would rather rent than take the steps to apply for a loan. And Millennials are putting off ownership for other reasons. Zillow reported that there are a variety of reasons for Millennials deciding to opt out of purchasing a home and avoiding the housing market altogether. The report indicated that Millennials are waiting longer to get married and have children, which also delays the first-time home purchase process in many cases. Millennials have a higher distrust of financial institutions than previous generations. Many believe this is from seeing the impact of the housing crash as college students or young adults, thereby creating a higher level of skepticism with regard to financial institutions. They openly question whether or not homeowner-

student loans not only limits the borrower’s options–it limits business from a lending perspective as well. The recently established Qualified Mortgage (QM) rule has created heightened standards for lenders that limit the ability of lenders to creatively work to solve the homeownership-student debt issue. Lenders trying to close QM loans are required to have a maximum debt-to-income ratio (DTI) of 43 percent. This disqualifies many Millennials before they even get started. Many young adults are tied down by student loans–making it impossible for them to commit to added financial obligations. Other reasons such as credit card debt and auto loans make it difficult for young adults to qualify for a mortgage, creating a barrier for lenders to successfully grow their business. Fortune Magazine also reported that Millennials are still struggling to come out of the employment and income crunch caused by the recession. The unemployment rate those aged 25 to 34—traditionally the ideal age for a first home—is 10 percent higher than the general population. Also impacting the ability to qualify for loans, this age group’s average income only rose 1.1 percent from

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Lenders are still trying to figure out how to recapture the glory days of the mid-2000s. According to the Mortgage Bankers Association (MBA), the number of firsttime homebuyers has substantially decreased over the past decade. With the percentage of first-time homebuyers at 10 percent below average, experts are forecasting a desolate outlook for lenders that is likely to have long-team effects on the industry. Much of the attention has focused on the changes coming from within the industry. Disclosure reform looms in the distance, and it is critical that lenders adhere to a new set of industry rules and regulations. But more important than the internal rules and obstacles lenders must navigate is the changing face of the homebuyer. The oldest members of the Millennial Generation, defined as those born from the early 1980s to the early 2000s, are reaching homebuying age. And just as each previous generation has had its own challenges and ideals, lenders need to prepare now to understand the financial and economic pressures facing the Millennials, as well as the cultural changes that could impact their willingness to purchase a home.

ship is really the American Dream. Even for those who do wish to own a home, the timeline is much later in life than previous generations. Even more impactful than desire, though, is the stark financial situation for many Millennials. A large portion of the Millennial Generation also graduated from college in the middle of the recession, and had difficulty finding a job at the start of their career. Oftentimes, these students graduated with large amounts of debt from student loans and because they were either unemployed for an extended period, or underemployed, they have not had much opportunity to retire their debt.

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2012 to 2013 while the cost of shelter rose an average of 16 percent, according to the U.S. Census Bureau. The industry will need to work with the regulatory bodies to find solutions. When it comes to the pressing levels of debt shouldered by most Millennials, lenders, the CFPB and financial institutions need to explore options that enable young adults to prepare for a career through college, save for the future and still afford a home. This may take the form of combining student loans and mortgages into manageable packages or better financial education to help young adults reach their goals. Lenders will

need to figure out ways to profitably offer non-QM loans to meet the demand of the largest generation. During this transition, lenders must anticipate a change in the way they operate and exist in an entirely new way of business by adjusting their processes to fit the needs of a financially-strapped generation. A recent survey of 4,000 Americans ages 18-34 discovered that 72 percent would be ‘likely’ or ‘very likely’ to bank with companies like Walmart, and three times more likely to bank with nontraditional financial institutions. Additionally, mobile banking is changing the way Millennials interact

with their financial institutions, requiring lenders to better embrace mobile technology to attract and interact with new buyers. Property values are finally beginning to rebound in some markets, and economists expect values to rise steadily in the near future. Additionally, Millennial potential in the market will expand if, and only if, incomes increase or debt is retired. Roughly 35 percent of Americans spend more than 30 percent of their annual income on rent, with 50 percent existing in a cost-burdened environment. For Millennials, absorbing additional debt is not an option. The new generation of borrowers are obligated to put higher priority on paying off student loans–and student loans only. It is the lenders job to generate a new purchase market and embrace a

new way of business. The importance for lenders to provide borrowers with the programs and solutions that will only help future homebuyers create a solid foundation and prepare financially for taking the next step. Lenders that have confidence in the new generation of homebuyers will see a breakthrough of opportunity if they chose to embrace the future of the industry. Scott K. Stucky is chief strategy officer at Idaho Falls, Idaho-based DocuTech Corporation, a provider of compliance services and documentation technology for the mortgage industry. He may be reached by e-mail at sstucky@docutechcorp.com, online at www.docutechcorp.com or on Twitter at @DocuTech.

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“When contemplating ‘Big Data,’ lenders of all sizes should start with a narrow focus, including the full exploitation of the data that they already have on hand and then add layers of complexity.”

What Bill Murray Can Teach You About Big Data By Jason Kelley

face, such as the surprising number of refinance opportunities that are still out there. And of course, the CRM can serve as the platform for referral tracking and marketing automation, not to mention the ways in which it can help you ensure compliance.

“Little Data” to extract and consolidate your core data so that you have a baseline from which to work. You would be surprised by what you can find out by simply doing a Google search for ways to export data, even from that LOS that your firm last used in the Clinton Era.

Clean it up

Update it It’s pretty hard to do outreach of any kind without valid contact information. For small-scale projects, set aside some time during a slow period to do basic Web research (or get an assistant to do it!). For larger scale databases, there are automated services that can help you update street addresses, verify or append phone and e-mail information and much more. That said, once you have a reasonably up-to-date database, the ultimate goal is to build a system that your team adopts and keeps organically current because you don’t want to constantly repeat this work.

Exploit low-hanging fruit Consolidate and standardize

Once you have your data organized, a CRM can serve as a sales and marketing You are not alone if you have data spread hub. If used effectively, it can and should across multiple systems. Figure out how bring hidden opportunities to the sur-

l For example, augmenting your existing data with real-time business intelligence from the credit bureaus or “Just Listed” alerts from the real estate market will help identify consumers that are actively in the housing market. l Another great example is the level of personalization in marketing automation that was previously not possible.

Don’t fall into the trap of doing nothing because you cannot instantly do it all. Remember to use baby steps in your approach to data analytics, and you’ll be off and sailing before you know it. Jason Kelley is the CEO of data analytics and mortgage marketing firm InfoHounds.com. He may be reached by phone at (919) 2469899 or e-mail at jason@infohounds.com.

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For extremely large databases, you might need a different solution, but Excel remains one of the most straightforward and powerful ways to streamline data. Under the Data Tab, you’ll find useful features like Remove Duplicates and Filter/Sort. Mastering the Concatentate formula can also save you hours of labor. It isn’t a silver bullet, but it is nevertheless a great place to start. Also, keep in mind that simpler is often better. Instead of having 200 fields per contact, work to narrow down the data to what really matters for the sales and marketing efforts you are likely to pursue.

Once you’ve got a handle on the basics, it might be time to take a look at some of the more advanced and realistically useful tools that are now available in data analytics.

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There is tremendous potential in the emerging field of Big Data. Advancements in the analysis of massive amounts of structured and unstructured data will enable mortgage firms to have greater clarity on a multitude of behavioral activities, such as an individual’s propensity to borrow, refinance, default, accept a cross-sell offer and so on. However, up to now, the hype has largely not translated into practical, widespread adoption within our industry. In fact, the entire Big Data field struggles to move beyond being seen as an amorphous buzzword. Our basic advice to mortgage firms looking to stay ahead of the data curve is to not focus on terabytes or petabytes, but to take tiny bites … see what I did there? As the elder statesman at a data analytics firm mostly comprised of Millennials, I routinely make 80s and 90s movie references that draw blank stares. While recently discussing some of the challenges our clients face when dealing with data, I invoked the sage wisdom of the classic Bill Murray movie “What About Bob?” In order to combat his multiple phobias, Bob (played by Bill Murray) is introduced to the self-help book Baby Steps. The book’s simple, but effective, message is that most problems can be overcome by taking tiny steps towards reasonable goals. “Baby steps, baby steps” becomes Bob’s constant mantra and it changes his life. When contemplating “Big Data,” lenders of all sizes should start with a narrow focus, including the full exploitation of the data that they already have on hand and then add layers of complexity. Of course, vendors can help with all aspects of the following, but if your firm is really at a loss about where to start, here are a handful of things to get the ball rolling.

Third-party data can be blended with your marketing content in order to deliver a one-to-one tailored message to the consumer that resonates far greater than canned, boilerplate content. l Finally, similar to its successful usage in e-commerce, mortgage firms can find success by taking a data-driven approach to analyzing a consumer’s web engagement in order to deliver timely, relevant advertising and zero in on prospects through retargeting.

“How can mortgage lenders calm this storm and get those operational metrics pointed in the right direction?”

Breaking Bad Mortgage Origination Trends By Chris Edgington Sr.

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According to Mortgage Bankers Association (MBA) CEO David H. Stevens, the average mortgage loan file increased to some 500 pages in 2013. Two years of tax returns, bank statements, disclosures, credit reports and any letters of explanation or verification equal one expensive and frustrating process for everyone involved. Unfortunately, borrowers still need to supply all those documents to get a mortgage. Today, mortgage lenders are facing a difficult challenge. The MBA’s annual survey states that the net cost to originate a new loan in the first quarter of 2014 was $6,253, up 21 percent from the fourth quarter of 2013. Instead of a profit on each new loan, lenders are reporting a net loss of

$194, down from a reported $150 profit per loan from the previous quarter. Lenders’ costs are out of control. Profits are next to nothing. The only way to handle the fluctuations in volume is to hire or fire temporary workers. Is there a better way? How can mortgage lenders calm this storm and get those operational metrics pointed in the right direction? How do we get back to higher profits, lower costs, greater quality and a better customer experience? Mortgage automation is the answer. As the old Six Sigma process improvement adage goes, “Garbage In, Garbage Out.” If you can get better quality information at the beginning of the process, all the downstream processes are much

more efficient—and frustration is dramatically reduced. So how do we accomplish this? Let’s start by not requiring all those documents from the borrower and go directly to the source of truth for verified data. For example, two years of tax returns are required from the borrower. Why not, with permission from the borrower, go directly to the IRS for tax transcripts? But don’t stop at just getting the PDF version of tax forms. Take advantage of the electronic feeds; use metadata within tax forms to run income calculations and debt-to-income ratios, and automatically qualify the borrower.

Valuable mortgage automation capabilities l Integrate mobile capture technology to directly engage and inform the borrower on their smartphone or tablet l Deliver faster workflows and mortgage best practices to streamline the manual data entry, calculations and verifications needed for underwriting

l Provide analytics, dashboards and reporting for full, end-to-end process visualizations l Enable data integrations to third party verification services and loan origination systems to increase quality and satisfy investors Want to see how much you can save by automating the mortgage process? You can partner with a credible industry solutions expert who can identify and estimate resource process improvements and cost savings specific to your current mortgage process. Chris Edgington Sr. is industry solutions manager for Kofax. Chris was senior director of global operations for American Insurance Group (AIG), where he helped shape the firm’s worldwide ECM strategy. Chris also spent 14 years at Fidelity Investments in multiple leadership positions, where he was responsible for implementing the complete capture, workflow and records management solution across the Fidelity companies. Connect with Chris on twitter @C-Edgington and @Kofax.

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

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“As the mortgage industry’s loan volume continues to fluctuate, lenders look to technologies like an LOS that reside in the cloud to expand and contract with market change while ensuring minimal impact on resources and balance sheets.”

Dissecting the Cloud LOS Debate By John Mickle

Drawbacks Those against the cloud point to lack of control and security as the leading reasons to reject adoption. They argue that data is free and open to anyone when in the cloud, creating a highly vulnerable environment. However, that perception is continually challenged by infrastructure experts. Now, there are varying levels of security and privacy that can be implemented in a cloud environment depending on the needs of the application and data that resides there. A great benefit of hosting in the cloud is that the security and privacy can be customized to meet the

Determining whether the cloud is right for you Before one enters into a cloud relationship, it is important to conduct a detailed risk assessment process. A risk profile is key to determining what your appetite is for hosting systems in the cloud. Use your risk, vendor management, information security and other existing program processes to determine how you proceed (or not) with cloud computing. Most importantly, thoroughly document this process regardless if you choose cloud technology or not … your regulators will appreciate this. By documenting even when you choose against going with a cloud vendor, it provides assurance to the regulators that you did your due diligence and risk assessments. This can’t be just a ‘check mark’ item anymore to show regulators. If a lender decides to migrate to a cloud LOS, selecting the right provider is the key in having a successful cloud deployed LOS. Look into the security features offered by the cloud provider. Know what their requirements are. Insist on strong encryption at rest and in transit of the data. Ensure that you have proper logical separation from other tenants in the environment. Be

John Mickle is information security officer at Wipro Gallagher Solutions, which provides end-to-end lending solutions to financial institutions. He may be reached by phone at (765) 286-5687 or e-mail john.mickle@wipro.com.

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Benefits More and more lenders are now considering an SaaS LOS for its attractive “pay as you go” model which offers lenders greater economies of scale. The LOS is hosted in the cloud in a multi-tenant model, and the software cost is typically based on the number of loans per month. In some models, the cost structure is tiered, so that the costs per loan are reduced if more loans are made. Lenders can focus on the business side of making loans and not have the hassles of extensively managing the extreme complex technology challenges that are inherent when dealing with the LOS. Another major benefit is that the cloud is more resilient and can match the needs of market changes. As the mortgage industry’s loan volume continues to fluctuate,

lenders look to technologies like an LOS that reside in the cloud to expand and contract with market change while ensuring minimal impact on resources and balance sheets. From a technology standpoint, if there is a sharp rise in lending activity, the SaaS LOS can easily be scaled to meet market demand without sharply increasing costs, which is typical in a self-hosted LOS. While most banks have a team of IT folks, they tend to run lean on the IT resource side so typically there is a backlog of work to do. In a cloud model, the bank does not manage the technology, the provider does, which lifts a significant burden off the bank IT staff. The SaaS LOS can greatly reduce the management costs of the technology and free up over allocated in-house technology resources to manage the internal needs of the bank. This is very important as the mortgage industry as a whole is under vast transformation and at times struggle to be profitable. Also, third-party integration such as mobile apps, document and imaging systems with the LOS can be accomplished much more efficiently as the hosted data centers already have many of the required infrastructure pieces in place. The hosting provider will have all tools available to add new functionality and emerging technologies, so the cloud makes it much easier for the bank or lender to move forward with their evolving technology strategies.

prepared to describe these practices to your regulators and customers as well. Also, take into consideration the location of data. Make sure that your contracts specifically outline where the data is physically located and have provisions for notification if any data moves to another location. Make sure that your data is not spread across multiple data centers as this can make your due diligence that much more complicated. In addition, make sure your provider has a strong business continuity plan (BCP) in place. How quickly can the provider recover your system if a failure occurs? Ask the vendor about hypothetical system failures up front, how they handle them and how long it will take the hosting provider to get you back up and running in the event of a crisis. Another critically important consideration is to make sure the provider is familiar with and in compliance with all the regulations that you must follow. Only move forward with providers that have the compliance infrastructure in place to operate in today’s environment. Take extra time with potential outsourcing partners to fully explore their approach to compliance. Finally, make sure you align yourself with a cloud provider that supports your long-term business plan. Are you planning that cloud will be an enabler of mobile and other emerging technologies? Is your long-tem plan to have more of an omnichannel strategy that utilizes various types of technologies and touchpoints? When you have properly vetted the right cloud vendor, third-party oversight needs to be managed properly as you no longer have the day-to-day visibility into the system and can no longer walk down to the server room and check things out to make sure that IT is properly maintaining the environment. But these challenges can be overcome by a mature risk and vendor management program that most lenders already have in place. As a final note, we recommend that you dissect before you adopt.

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The question of whether your next loan origination system should be installed inhouse or leverage Software as a Service (SaaS) in a private cloud isn’t all that simple. It requires a comprehensive understanding of the anatomy that drives your organization—from its inner workings including all critical functions—to how it operates at the epidermis where it interacts and engages with the customer. Adding yet another layer, the decision to adopt a Cloud LOS requires an understanding of how your lending operation functions within challenging market conditions as well as lucrative conditions. A new loan origination system is one of the most important decisions your organization will make and it is as much of a business decision as it is a technical decision. In many ways, dissecting the Cloud LOS debate is the same as dissecting your business needs. The discussion must be made in the context of your institution’s unique needs; and understanding your needs is critical to making the right LOS decision. That said, understanding the general benefits and drawbacks of a Cloud solution may inspire critical questions for lenders considering a switch.

needs of the customer, business and regulatory environment. In the multi-tenant SaaS LOS model, there is a misunderstanding that one bank’s lender database is mixed with another’s and that the banks can see each other’s data. In a secure environment, LOS databases are logically separated from one another and utilize encrypted ID strings unique to each lender. Also, the data is encrypted at rest (meaning as it is stored in the database) using industry standard encryption methods. The data is also encrypted in transit (meaning as the data is transmitted back and forth from user to database) to ensure that the entire process is secure. In the end, however, it really boils down to using your existing programs to ensure that you are compliant in the cloud. It depends on the maturity of the lender’s risk and vendor management, compliance and information security programs. The more mature those programs are, the lesser the impact to the lender in maintaining compliance.

“The bottom line is that you can be decentralized as a broker. But you have to be centralized to be a lender.”

Become a Banker? KMN. By Eric Weinstein

If you are regular reader of my articles (and shame on you if you are not), you will remember in my last article my small mortgage shop recently became a lender. Unlike many shops, we adopted the model that the loan officer would have the choice whether to act as a lender or broker depending on the deal. Sometimes, it is better to be a bro-

ker. Sometimes it is better to be a lender. Whatever gets you the deal, right? The calculations centered on how many lender loans it would take to breakeven on the additional costs to be a lender. If you read between the lines at the end, you quickly realized it is not worth the marginal costs and profits if you took on significant risk to achieve it. Basically,

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w ww.N ati on al R e al Es tat e Po s t . c o m

it is not worth bringing in a few more bucks if it just goes out the door in extra costs and additionally it brings the risk of you losing your house because of buy backs and early payment recapture. If you are thinking this is because we are a small shop, it is not. We had the same problem when I ran Carteret Mortgage and we did $4 billion a year. Given a choice to be a lender or a broker at the same compensation, the loan officer will usually pick being a broker. Yes, being a lender means fewer disclosures, but pricing is the same and as a lender usually your junk fees are higher. Let’s face it, no matter how well you do; you just don’t have the volume, read that economy of scale, of a larger shop. At Carteret, we never achieved that economy of scale because I was loathe to force my people to be a lender. That meant the lender volume never achieved that critical mass needed. My basic model was a decentralized operation. Loan officers originated, processed and submitted from various locations. This kept my corporate overhead low which in turn allowed me to offer outrageously high commissions to my people. This fostered rapid growth and the rest is in Wikipedia. When you act as a lender, you can just throw that model out the door. Being a lender is much more risky than being a broker. It requires a centralized location for efficient processing, quality control and management. As a broker, wholesalers pretty much watch your people like a hawk when it comes to compliance, funding, etc. They control everything so that even the most “distracted” loan officer cannot screw up. That protects you as the owner. Not so as a lender. Now you are in the big leagues. A loan officer for you in Iowa forgets to get mortgage insurance and you, the owner, pay for it. You have to control everything or you will lose your shirt. So, now as a lender, you need to have processors, closers, funders and

a bevy of beauties in your office shuffling all the paperwork. That translates into more desks, more floor space, more telephone lines, a T1 internet connection and the list goes on. Before you know it, you have all the overhead of a real company, you have to lower your loan officer compensation and, worst of all, you have to wear a suit to come into your own office. KMN (Kill Me Now). Yes, all the hype you will read will tell you it is just peachy and dandy to be a lender. They will tell you how being a broker is dead and you just have to be a lender if you expect to survive. I am here to tell you that is not the case. Being a broker in this qualified mortgage (QM), Dodd-Frank Act, SAFE Act training world is just fine. Whatever new laws they come up with, we will do what they say and keep trucking along, but in our own little way. I have to disclose, so I disclose. I like to keep my junk fees low and my loan officer compensation high. I am happy being a broker. The bottom line is that you can be decentralized as a broker. But you have to be centralized to be a lender. That may be a completely different model than which you operate right now. That may not be in your best interest. New is not necessarily better. Just ask my second wife. Eric Weinstein worked in banking, on the commercial real estate side until 1991, when he fell in love with residential lending. In 1995, he started a small mortgage company in his basement called Carteret Mortgage Corporation, which in 2003, grew to one of the largest mortgage broker companies in the United States. These days, Eric is semi-retired, doing mortgages by referral only. As he likes to put it, “He is either saving people money per month or helping them buy a new home. What a great job!” He may be reached by phone at (703) 505-8692 or e-mail eweinstein4u@gmail.com.

“After you’ve looked at the subject of an e-mail, the first sentence of the message will be critical in your decision to continue reading.”

Pipeline Management: Five Proven Tips for Sending E-mails That Close Sales By Mark Wayshak

Many salespeople send the majority of their prospecting e-mails during the middle of the week to give their prospects a break from e-mails on the weekend. However, open rates for e-mails sent on Saturday and Sunday are actually higher than those for emails sent during the week. An e-mail sent on Tuesday has a 58 percent chance of being opened, whereas an e-mail sent on Saturday has a 65 percent chance of being opened. This means that you

2. Choose your words wisely Typically, the first part of an e-mail you will read is the subject. That’s why what goes into your prospecting e-mail’s subject will often determine whether the rest of the message ever gets read. HubSpot found that emails with the words “You,” “Quick,” “Meeting,” and “FW:” were less likely to be opened by a prospect. On the other hand, e-mails with the words “Free” and “Tomorrow” or e-mails with no subject whatsoever had higher open rates. So test crafting your e-mails with and without some of these words in order to see which messages have higher open rates.

3. Show you’ve done your homework Think about your own process of sorting through e-mails. After you’ve looked at the subject of an e-mail, the first sentence of the message will be critical in your decision to continue reading. This hook is even more important when you consider the prevalence of smartphones today: A phone will often display the subject of an e-mail and a preview that includes the first few words of the message. Because of this feature, your first sentence must be highly personalized to show that you know something about your prospect and her company. If the email appears boilerplate, the prospect will immediately delete it.

4. Engage the prospect with an easy question Oftentimes, we forget what the purpose of a prospecting e-mail is in the first place. The goal of an e-mail is not to close a sale, but rather to engage the prospect in a conversation that can lead to a phone conversation or face-to-face meeting. Therefore, be sure that your prospecting e-mails inspire prospects to respond to you. End every e-mail with an easy-to-answer question. Try something simple and quick like, “Is this a challenge that you face in your business?;” “What’s the best address to send this report to?;” or “What’s your biggest marketing-related priority right now?” By closing your emails with a question, prospects will be more likely to respond because you’ve (1) Engaged them directly, and (2) Removed the guesswork surrounding what kind of information you need from them to move forward.

5. Use e-mail tracking software to collect data on when someone opens your e-mail Until now, salespeople have been left in the dark as to when a prospect actually opens their email. However, thanks to some pretty amazing tech-

nological breakthroughs from products, such as HubSpot Signals and Yesware, we can now know exactly when a prospect opens our personal e-mails. Since both companies offer free trials for these great plug-ins, be sure to download one and watch your world of e-mail prospecting change forever. Also, now that you know when a prospect has opened your e-mail, you can follow up with a call and increase the likelihood of getting through. Also, now that you have the ability to track which emails get opened, test different combinations of subject lines and first sentences to see which trigger prospects to click through most often. By applying these five tips to your prospecting e-mails, you will see a significant increase in open rates, responses and, most importantly, closed sales. Marc Wayshak is the author of two books on sales and leadership, Game Plan Selling and Breaking All Barriers, as well as a regular contributor for Entrepreneur Magazine and the Huffington Post Business section. He may be reached by phone at (617) 2032171, e-mail info@marcwayshak.com or visit www. marcwayshak.com.

n National Mortgage Professional Magazine n OCTOBER 2014

1. Send e-mails during off-peak hours

might want to rethink when you are sending your prospecting e-mails. Try sending them out on the weekends, and see if you find similar increases in your open rates.

NationalMortgageProfessional.com

Sending e-mails is an integral part of selling in today’s world. But at a time when prospects are receiving hundreds of e-mails every single day, it is easy for yours to get lost in the crowd. What’s even more frustrating is since this technique is relatively new in the realm of sales prospecting, up until now there has been very little data to show which prospecting e-mail techniques actually work. But now, thanks to data pulled from HubSpot Signals e-mail tracking software, we can get a rare glimpse into what actually works most effectively for getting our emails read. HubSpot has produced a brand new report that contains information from 6.4 million oneto-one e-mails sent from Signals users. Pulling from this user pool allowed HubSpot to identify which individually sent e-mails were actually being opened and which were being ignored. Here are five tips based on this data that will help you send emails that lead to closed sales.

NMP M O R T G A G E

P R O F E S S

David H. Stevens

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President and CEO of the Mortgage Bankers Association

n October, we will see the 101st presentation of the Mortgage Bankers Association’s (MBA) Annual Convention. As the event nears, it is fitting that our October Mortgage Professional of the Month feature focuses on David H. Stevens, the organization’s president and chief executive officer. Prior to joining the MBA in 2011, Stevens served in the Obama Administration as the commissioner of the Federal Housing Administration (FHA). Stevens was born in New York City and raised in Connecticut, and is a graduate of the University of Colorado at Boulder. He came to the financial services world in 1983, when he joined California’s World Savings Bank, working his way up to the ladder to the position of group senior vice president and national sales manager for the bank’s mortgage division. In 1999, he joined Freddie Mac as a senior vice president in charge of the enterprise’s single-family businesses. He left Freddie Mac in 2005 and joined Wells Fargo Home Mortgage as executive vice president. In 2006, he was hired at Long & Foster, a Washington,

BY PHIL HALL

“WE’RE TRANSITIONING TO A NATION THAT IS GOING TO BE MAJORITY MINORITY. BUT IN TERMS OF HOME SALES, IT IS GOING TO BE VASTLY MAJORITY MINORITY BY ABOUT TWO-THIRDS.”

D.C. area real estate firm where he was in charge of leading the company’s affiliated businesses. He became Long & Foster’s president and chief operating officer in 2008. A video version of this interview, which includes additional discussions of regulatory concerns and loan officer recruitment, can be seen on the Mortgage News Network Web site, www.mortgagenewsnetwork.com.

NMP: It has been six years since the 2008 crash of the housing market, but the housing market is still in an

unsteady position. Why haven’t we seen a more robust recovery? David H. Stevens: Clearly, the housing market is not recovering the way we would have expected. We have a market that is probably going to be flat or down over last year in terms of total home sales. We’re seeing strength at the higher end of the market for anyone who is involved in the jumbo or wealthy communities, those markets are recovering a lot faster than the entry points for first-time homebuyers. The entry level price point is down fairly significantly from over a year ago. There’s a lot of work to be done.

Are you surprised that recovery in the housing market has been so lethargic? If you look at core demographics, you have this Millennial generation that’s been talked about quite a bit. The percentage of 30-year-olds who have mortgage debt today is down about 10 percent from where it has been traditionally. First-time homebuyers are not coming into the market right now. But if you juxtapose that against a recovering economy, you have interest rates still near record lows, you have the home affordability index that groups like the National Association of Realtors (NAR) produce that show the rent-versus-buy scenario has almost never been better. It defies what most expectations were from a year ago, when economic forecasts where home sales growth was going to be–we’re not meeting those expectations. There has been a great deal of focus on the impact that shifting demographics will have on housing. How do you view this development? It is going to be the most extraordinary shift in household finance. Take

S I O N A L this one point in context–this is from the Kennedy School at Harvard, Joint Center for Housing. If you look at existing housing stock in this country, 70 percent of it is occupied by White non-Hispanics. That is probably the nature of homeownership and housing today. If you look over the next decade, in terms of new housing stock being created and new household formation, only about one-third of that is going to be White nonHispanic, and the remainder is going to be minority. We’re transitioning to a nation that is going to be majority minority. But in terms of home sales, it is going to be vastly majority minority by about two-thirds. It changes a lot of things: The type of housing, it impacts things like standardized qualification measures and a qualified mortgage rule–it makes you question whether that type of square peg-square hole thinking is going to be work for the new type of homebuyer coming into the marketplace. Self-employed buyers, family members living together, multiple jobs, overseas sources of funds: It puts a lot of new issues into the limelight when it comes to thinking about how we think about financing new types of homeownership.

lion in production last year to $1 trillion this year—both of those efforts are going to cause some form of consolidation. I’m not sure how far any of that is going to go, and I don’t think any of us can predict where it will stop. Another complaint I’ve heard from many professionals in this business, especially from the smaller banks and independent mortgage bankers, is that it is becoming expensive to originate mortgages. Absolutely. This comes down to this “too small to comply” discussion. There are about 4,000 community banks in this country that have done some form of mortgage lending, and in many cases this is maybe single branch or locally placed banks that may do 50, 100, a couple of hundred of loans in a year, enough to want to make it a product you want to offer to depositors and customers. But at the cost it requires today to maintain a compliant operation, particularly at the bank where you have either federal regulators or bank supervisors overlooking your risk, it becomes very difficult. We are seeing in many community banks, especially at the low end of the level, exit the business entirely.

I have another Washington, D.C.related question for you. GSE reform … to put it briefly, what happened? That has to go through Congress, and

M O N T H

if you look at what Congress has produced over the last six years, you could ask that about a lot of things. Think about how hard it was to get flood insurance done! I really worry that the industry doesn’t understand what conservatorship legally does and how it restricts possibilities. The idea that we either keep Fannie or Freddie or put them back the way they were is not a feasible option. They are in conservatorship now, their capital is winding down—so they have no capital to draw from. And in event they need a draw, which I believe is going to happen with at least one of the GSEs [government-sponsored enterprises] over the next couple of years, the potential for a crisis response from Congress to clamp down becomes more dangerous. Finally, the most important aspect here is that they are operating under an explicit guarantee on their mortgage-backed securities (MBS). In their previous way, they operated with an implicit guarantee. It is really important on how the international markets will respond if they are put back the way they were. And to make the explicit guarantee permanent requires federal legislation. I would like to discuss your work with the MBA’s Opens Doors Foundation. For the benefit of those unfamiliar with that endeavor, can you tell us what it is about? I started this Foundation when I first came to MBA a few years ago, because I thought that our industry had to develop a reputation of giving back as an industry overall. Everybody contributes to some cause that is important to them, but as an industry, we had a different reputation as a result of the housing crisis and the recession. The Opens Doors Foundation makes mortgage payments for families with critically ill children. We’ve partnered here in Washington, D.C. with Children’s National Medical Center, and in the last couple of weeks, we’ve received another 20 families who have critically ill children and had to relocate near the Hospital while their children undergo some extraordinary treatment. It is difficult to make a mortgage payment while being here in D.C. and support other temporary arrangements, while paying bills. Parents apply to us through social workers and healthcare advisors at the Hospital. We have a committee made up of MBA members who review the applications, and we make the mortgage payments for them. I can tell you the stories—they are incredible—of the type of diseases

these children have, how on the edge their families are, and how making the mortgage payment for them helps them keep their homes and not have them have to worry with that when they are dealing with a personal crisis. You can visit www.mortgagebankers.org/AboutMBA/OpensDoors , or go to MBA.org and look for Opens Doors on the Home Page. And you can reach out to me at any time–as you well know, I reach out to anyone who reaches out to me for information. One person who recently reached out to you is a mutual friend of National Mortgage Professional Magazine, Brian Coester of Coester VMS, who nominated you this past summer to do the ALS Ice Bucket Challenge. There is video of you online dumping a bucket of ice on your head. How did that feel? The hard part about the Ice Bucket Challenge is that I received about a dozen challenges. At one point, I put out something on Facebook that said, “Okay, I am writing a check just to cover all of them.” But one weekend, I got an Ice Bucket Challenge from Brian Coester and from Mike Heid, who is the CEO of Wells Fargo Mortgage. Both came simultaneously, so at that point I said, “Okay, I will do one Ice Bucket Challenge.” And it is pretty cold! But I have written several checks to the ALS Association … I had never contributed to them before. It was a real successful effort they put together, and it probably will become a prototype for future fundraising efforts by other organizations. But not by the MBA? We’re not doing Ice Bucket Challenges! Although it is not a bad idea. Maybe we’ll get Richard Cordray to do it first! I assume you don’t spend your leisure dumping ice buckets on your head. What do you do when you’re not in the office? Everybody’s busy in this industry now, and no matter where you sit, you are working hard. I have a lake house in southern Virginia that my family loves to go to. It is a few hours away. We do a lot of boating there. I also own a motorcycle. I’ve owned motorcycles since I was 16, so I love to ride. And in the winter, I am a very active skier and spend as much time as possible on the slopes in the Rocky Mountains. Phil Hall is managing editor of National Mortgage Professional Magazine. He may be reached by email at philh@nmpmediacorp.com.

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Are the regulators, especially the Consumer Financial Protection Bureau (CFPB), cognizant of these problems? At the risk of getting a lot of hate email, I think Richard Cordray, who heads the CFPB, is doing a great job. There is a lot of room for improvement, and as a big regulator implementing so much change, anything that gets implemented of this scale is going to have problems. But Rich is very open. He uses his ears, which is great for a regulator. He puts everything out for notice and comments and gets feedback from industry. I’ll just take one issue, the Qualified Mortgage (QM) rule. Look, there are definitely issues with have with the QM rule—things could definitely be improved—but there is a safe harbor in that rule, and had he listened purely to some of the more aggressive consumer advocates, there wouldn’t have been a safe harbor at all. There’s an example where he listened to industry and adapted measured in some of those rulemakings because he was open to that kind of input.

T H E

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In conversations I’ve had with mortgage bankers, there is a great deal of concern that the industry is facing a higher degree of consolidation. Is this something to be concerned about? The challenge we have today is this: With all of the impact of the regulatory measures put forth—the focus on compliance and quality control, inhouse legal counsel—these are new things that companies have to consider that they didn’t necessarily have to consider in years past. It raises the expense base fairly dramatically. We always talk about this “too small to comply” question—is there a point at which you are perhaps not large enough to have the appropriate risk protections in place to offset your fixed infrastructure and you need this more revenue coming in, which means [having] more loan officers and a larger company? At the lower end of the independent mortgage banker space, we’ve seen a lot of mergers and acquisitions taking place. That said, there is a sweet spot—particularly with the mid-tier and larger independent mortgage bankers [that] are taking advantage of this marketplace. We’re seeing them grow, adding offices, taking over branches. So, there is going to be some level of merger and acquisition that we should expect. Likewise, it is a consolidated market that has contracted from $1.7 tril-

O F

MBA’s 2014 Annual Convention & Expo October 19-22 at Mandalay Bay in Las Vegas

SCHEDULE OF EVENTS (Subject to change)

1:00 p.m.-5:00 p.m. F Exhibitor Registration F Mandalay Bay Ballroom Foyer

6:00 p.m.-7:00 p.m. F CMB and Future Leaders Reception (By Invitation Only) Breakers KL

Sunday, October 19

Monday, October 20

Saturday, October 18

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7:30 a.m.-7:30 p.m. F Registration F Mandalay Bay Ballroom Foyer

7:30 a.m.-5:30 p.m. F Registration Mandalay F Bay Ballroom Foyer

8:30 a.m.-10:00 a.m. F State Legislative and Regulatory Committee Meeting (Open to MBA Members; Closed to Media) F Lagoon H

8:00 a.m.-5:00 p.m. F Press Room (Credentialed Media Only) F Mandalay Bay Ballroom C

9:15 a.m.-10:45 a.m. F Diversity & Inclusion Committee Meeting (Committee Members Only) F Breakers J

8:00 a.m.-8:30 a.m. F Continental Breakfast F Mandalay Bay Ballroom Foyer

10:15 a.m.-11:15 a.m. F CMB Society Meeting (Committee Members Only) Lagoon IJ

8:00 a.m.-5:00 p.m. F MORPAC Hospitality Room (MORPAC Donors Only) Breakers J

10:30 a.m.-12:30 p.m. F State & Local MBA Leaders Meeting (By Invitation Only) Breakers L

8:45 a.m.-9:30 a.m. F Industry Welcome: General Session F Mandalay Bay Ballroom EFGH

11:45 a.m.-1:15 p.m. F Legal Issues, Quality Assurance and Regulatory Compliance Committee Meeting (Open to MBA Members; Closed to Media) F Lagoon KL

9:30 a.m.-10:30 a.m. F A Conversation With Kevin Spacey F Mandalay Bay Ballroom EFGH

Noon-4:00 p.m. F Future Leaders Presentations: “Exploring Product Strategies: Reaching Borrowers, Supporting Access to Credit, and Maintaining Compliance in the QM World” (Closed to Media) F Mandalay Bay Ballroom D

10:00 a.m.-5:30 p.m. F Expo 2014 F Shorelines A

12:30 p.m.-2:00 p.m. F Secondary & Capital Markets Committee Meeting (Open to MBA Members; Closed to Media) F Breakers AB

10:45 a.m.-11:15 a.m. F Featured Speaker: The Honorable Julian Castro Mandalay Bay Ballroom EFGH

2:00 p.m.-3:30 p.m. F Residential Loan Administration Committee Meeting (Open to MBA Members; Closed to Media) F Lagoon AB

11:15 a.m.-11:45 a.m. F Featured Speaker: The Honorable Melvin L. Watt Mandalay Bay Ballroom EFGH

2:00 p.m.-3:30 p.m F Residential Loan Production Committee Meeting (Open to MBA Members; Closed to Media) F Lagoon EF

Noon-1:30 p.m. F Lunch in Expo 2014 F Shorelines A

2:00 p.m.-3:30 p.m. F Residential Technology Forum (Open to MBA Members; Closed to Media) F Lagoon CD

10:30 a.m.-10:45 a.m. F Refreshment Break F Shorelines A

Noon-1:00 p.m. F New Member Luncheon (By Invitation Only) F Breakers KL

3:00 p.m.-5:00 p.m. F Press Room (Credentialed Media Only) Mandalay Bay Ballroom C

1:00 p.m.-2:30 p.m. F Community Banks and Credit Union Network Meeting (Open to MBA Community Banks and Credit Union Members; Closed to Media) Reef AB

4:00 p.m.-5:15 p.m. F Special Session—The Intersection of Politics and Policy: How the Elections Will Impact the Industry’s Policy Priorities F Mandalay Bay Ballroom EFGH

1:30 p.m.-2:15 p.m. F GSE Reform: Where Do We Go From Here? F Mandalay Bay Ballroom EFGH

5:15 p.m.-6:00 p.m. F MBA Annual Business Meeting: Swearing In Ceremony for 2015 MBA Officers, Graduation Ceremonies for CMBs, Future Leaders and Recognition of MBA State Ambassadors F Mandalay Bay Ballroom EFGH

2:30 p.m.-3:30 p.m. F Private Label MBS Execution Today and Tomorrow Mandalay Bay Ballroom L

6:00 p.m.-7:30 p.m. F Expo 2014 Opening Reception “Vintage Vegas” F Shorelines A

2:30 p.m.-3:30 p.m. F Single-Family Rental: Much Ado About Something Mandalay Bay Ballroom I

SCHEDULE OF EVENTS (Subject to change) 2:30 p.m.-3:30 p.m. F Regulatory–RESPA/TILA Integration F Mandalay Bay Ballroom JK 3:30 p.m.-3:45 p.m. F Refreshment Break F Shorelines A 3:45 p.m.-4:45 p.m. F The Future of Government Housing Finance F Mandalay Bay Ballroom EFGH

Noon-1:30 p.m. F Lunch in Expo 2014 F Shorelines A 1:00 p.m.-2:00 p.m. F Private Capital Opportunities in Today’s Market Mandalay Bay Ballroom L 1:00 p.m.-2:00 p.m. F Vendor Management F Mandalay Bay Ballroom I 1:00 p.m.-2:00 p.m. F Opportunities in the Purchase Market F Mandalay Bay Ballroom JK

5:30 p.m.-7:00 p.m. F MORPAC/MAA Reception (Current “Active” MAA/MORPAC Members Only) F Breakers J

2:15 p.m.-3:15 p.m. F Survival Strategies for Declining Margins and Volumes Mandalay Bay Ballroom JK

Tuesday, October 21

2:15 p.m.-3:15 p.m. F Mobile Borrowers F Mandalay Bay Ballroom I

7:30 a.m.-4:30 p.m. F Registration F Mandalay Bay Ballroom Foyer 7:30 a.m.-8:30 a.m. F RIHA Board Meeting F Breakers H 8:00 a.m.-5:00 p.m. F Press Room (Credentialed Media Only) F Mandalay Bay Ballroom C

8:00 a.m.-8:30 a.m. F Continental Breakfast F Mandalay Bay Ballroom Foyer 8:30 a.m.-9:30 a.m. F General Session: A Morning With Michael Lewis Mandalay Bay Ballroom EFGH

3:15 p.m.-3:30 p.m. F Refreshment Break F Shorelines A 3:30 p.m.-4:30 p.m. F Margining Your Future F Mandalay Bay Ballroom L 3:30 p.m.-4:30 p.m. F How to Recruit and Retain a Diverse Workforce Mandalay Bay Ballroom I 3:30 p.m.-4:30 p.m. F Best Practices for Managing Your Servicing Mandalay Bay Ballroom JK

9:30 a.m.-10:30 a.m. F General Session: Hall of Honor F Mandalay Bay Ballroom EFGH

6:00 p.m.-7:30 p.m. F Concert MBA Presents Daryl Hall & John Oates (Doors open at 5:30 p.m.) F House of Blues

10:00 a.m.-4:00 p.m. F Expo 2014 F Shorelines A

Wednesday, October 22

10:00 a.m.-10:30 a.m. F Refreshment Break F Shorelines A 10:15 a.m.-12:15 p.m. F Commercial/Multifamily Future Leaders (Closed to Media) Reef AB

8:00 a.m.-10:30 a.m. F Registration F Mandalay Bay Ballroom Foyer 8:00 a.m.-10:30 a.m. F Press Room (Credentialed Media Only) F Mandalay Bay Ballroom C 8:30 a.m.-9:00 a.m. F Continental Breakfast F Mandalay Bay Ballroom Foyer

10:30 a.m.-Noon F General Session: The Economic and Mortgage Market Outlook for 2015 F Mandalay Bay Ballroom EFGH

9:00 a.m.-10:30 a.m. F Creating a Successful and Compliant Customer Feedback Loop F Mandalay Bay Ballroom JK

Noon-5:00 p.m. F COMBOG Lunch and Meeting (Committee Members Only) Mandalay Bay Ballroom D

9:00 a.m.-10:30 a.m. F Next Generation Loan Originators: Planning for the Industry’s Future Workforce F Mandalay Bay Ballroom L

Noon-3:00 p.m. F RESBOG Meeting (Committee Members Only) F Mandalay Bay Ballroom B

For more information, visit www.mortgagebankers.org.

n National Mortgage Professional Magazine n OCTOBER 2014

8:00 a.m.-5:00 p.m. F MORPAC Hospitality Room (MORPAC Donors Only) Breakers J

2:15 p.m.-3:15 p.m. F Emerging Trends in Servicing Ownership and Execution Mandalay Bay Ballroom L

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4:30 p.m.-5:30 p.m. F Networking Reception in Expo 2014 F Shorelines A

Protect Your Clients and Your Company From “Dirty Rotten, Villains, Thieves and Scoundrels” in the Office Equipment Business

OCTOBER 2014 n National Mortgage Professional Magazine n

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By Andrew Ritschel Although 97 percent of the professionals in the office equipment business are smart, dedicated, honest and hard-working, the remaining three percent can cause utter havoc and immense financial heartache that can truly overshadow the good reputation of our industry. After all, I speak from experience with more than 36 years in this business. I’ve seen enough of this “dark side” to caution the general business community about some of the biggest pitfalls to avoid.

Pitfall #1 “Just sign here and here Mr. Business Owner … I’ll fill in the rest of the paperwork (lease term) after I leave your office!” This is a warning sign that the paperwork may never be filled out properly with the proposed and intended 36-month lease term. Miraculously, it becomes a 63-month

lease. In plain terms, what should have been $10,000 over 36 months at $277 per month (with interest) winds up being $14,813 over 63 months. That results in a 50 percent increase being funded to your supplier! What’s more, it can happen well under your radar and may not be detected for 37 months.

Pitfall #2 “Sure, we’ll pay off the remaining balance of your old lease and return your old equipment back to the leasing company.” A likely story told time and again, but never completed in actuality by the unreliable and unscrupulous. The end result leaves your company holding the bag for two leases and unpaid fees.

Pitfall #3 “Mr. Prospect, this is a five-year lease with three years of service and supplies included. At three years, you can upgrade this machine to something new and different.” What happens

here is that the remaining two years of equipment lease and interest is added to the cost of new equipment balance with new interest charges for the next five years. Nothing is forgiven. You wind up paying interest on top of interest.

Pitfall #4 “And this is your equipment lease payment each month.” What most fail to see in the fine print, is of an up to 15 percent yearly payment escalation clause. This oversight winds up turning a $15,000 lease into an $18,800 lease funding to the sales organization while no one was looking!

Pitfall #5 “Nice smile, nice suit and a pretty ‘Shades of Grey’ proposal.” If you are going to shop, which we highly recommend you do, shop for what’s important. Initially, phone interview sales representatives (gauge their responsiveness, question their indus-

try tenure?) and have them pre-sell you a little bit about the advantages of using their company. Then, meet with three competent sales reps from quality companies (get proof from sources). Examples of these sources would be: Years in the business (10-plus), and awards and industry recognition. Visiting their location provides the best feedback. E-mail shopping doesn’t work! Shop product mainframes, exact features and exact accessories. A “finisher” may be $2,800; $1,800; $1,000 or $500. They are all very different in features and functionality. Compare systems: Apples for apples-pricing, financing terms, maintenance agreements and guarantees. The personal face time you put in up front will pay dividends for you in the future. Andrew Ritschel is founder and president of Electronic Office Systems Inc. (EOS) based in Fairfield, N.J. He may be reached by phone at (973) 808-0100, ext. 243 or e-mil aritschel@eosnj.com.

heard on the street continued from page 62

expertise, and an earned reputation for knowledge, creativity, drive, and results. Guild brings depth of knowledge in support of sales, offering tools, technology, and a broad array of product options.”

MCS Acquires CoreLogic’s Collateral Solutions and Field Services Units

Canyon Title of Denver has announced that it has successfully passed an independent operational risk assessment evaluation process achieving the highest reliability rating. The risk assessment was performed by Secure Settlements Inc. (SSI), a New Jerseybased firm that created the first independent risk analytics process to screen title and settlement professionals to meet regulatory demands for greater consumer protections in the mortgage industry. Canyon Title passed the rigor-

Altisource Portfolio Solutions S.A. has announced the completion of its acquisition of Mortgage Builder

continued on page 101

NAMB+ is an independent, wholly-owned, for-profit marketing subsidiary of NAMB, The Association of Mortgage Professionals. Dear Mortgage Professional, You give your very best each and every day to your clients. NAMB+ wants to make it easier for you to give your business the very best chance to succeed and grow as well. The most successful mortgage professionals seize upon every advantage they can to get ahead and stay ahead of the competition. To help your business get that leg-up and keep it there, NAMB+ has assembled a list of Endorsed Providers that can help you on a daily basis with everything from compliance to credit reports, lead generation, phone service, social media, custom canvas prints for your office or home, and much more! Every NAMB+ Endorsed Provider offers special pricing, discounts, or other unique programs or special benefits to NAMB Members. Additionally, every time you use a NAMB+ Endorsed Provider you are helping your industry trade association – NAMB, The Association of Mortgage Professionals. NAMBPLUS.COM officially launched earlier this year and is the only place you can go to find out about all of the amazing offers from every Endorsed Provider. NAMBPLUS.COM is continually updated as new

Agility Media offers NAMB members 20% off account setup or social media setup.

companies are seeking to become NAMB+ Endorsed Providers every month. I hope you take a moment to visit NAMBPLUS.COM and familiarize yourself with all of the fantastic companies who have signed-on as Endorsed Providers and agreed to offer some impressive discounts and other special beneﬁts to NAMB Members. If you have speciﬁc questions or know of a company that you would like to see become a NAMB+ Endorsed Provider, please feel free to contact me. We are interested in your feedback, so please let us know what you think!

John G. Stevens, CRMS, President NAMB+, Inc. John@JohnGStevens.com www.nambplus.com

97 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 get special pricing plus 1 month FREE. LoanSquatch allows NAMB members to reduce their monthly pricing from $19.99 per month to $9.99 per month and the ﬁrst month is just 99 cents!

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

NAMB Members receive a 10% discount off regular prices for all CallFurst.com products and services.

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

LoanTek’s platform is designed to save time, create better leads, and convert leads into new business. USA Business Lending is the nation’s premier brokerage ﬁrm representing over 3500 lenders. NAMB members get a $300 discount on coaching. NAMB members receive exclusive discounts training events, including live seminars and internet-based web shops

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n National Mortgage Professional Magazine n OCTOBER 2014

Canyon Title of Denver Achieves National Risk Rating Credential

Altisource Acquires Mortgage Builder Software

Software Inc., a provider of mortgage loan origination and servicing software systems. The acquisition follows Altisource’s recent acquisition of Equator, a national leader in mortgage and real estate-related SaaS solutions, and strengthens Altisource’s end-to-end suite of real estate and mortgage lifecycle management technologies. “With Lenders One, Equator and now Mortgage Builder, Altisource offers customers a complete, all-in-one real estate and mortgage lifecycle management platform,” said John Vella, chief operating officer of Equator. “Mortgage Builder and Equator customers will benefit from the deep capital, world-

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Mortgage Contracting Services LLC (MCS), a provider of property preservation, inspections and real estate-owned (REO) property maintenance to the financial services industry, has announced that it has broadened its client offerings to include appraisals, Broker Price Opinions and other valuations-related products through its acquisition of the Collateral Solutions and Field Services business units of Irvine, Calif.-based CoreLogic. The acquisition expands the MCS suite of mortgage services to include valuation products in both the default and loan origination sectors and also represents a significant expansion of its already strong representation in the property preservation industry. “This acquisition will expand our presence across multiple service lines within default servicing and move us beyond the default segment through being able to offer our clients the opportunity to call on MCS for valuations, appraisals and BPOs, as well as field services,” said MCS CEO Caroline Reaves. “This will allow us to service our clients with an expanded product range and ensure their compliance with federal, state and local regulations at every step.” The Collateral Solutions unit, based in Sandy, Utah, will remain in its current location and MCS has no plans to change its management team or operational structure. The Field Services unit, based in Westlake, Texas, will be combined with the MCS operations in Plano, Texas.

ous 110-point background evaluation process with the coveted “Low Risk” rating and is now subject to ongoing monitoring in the SSI nationwide vendor database. “We applaud Canyon’s acknowledgement of the value of independent risk analysis for consumer protection and vendor management compliance,” said SSI President Andrew Liput. “Banks and consumers want to know they are doing business with trustworthy, professional firms. Canyon clearly fits that risk profile.” Canyon Title was founded in 2001 as a full-service title and escrow company,

servicing 33 states, conducting business out of two locations in Denver. Their operations run on a state-of-theart paperless production system that allows for a seamless customer interface, and they take a unique approach and focus on their clients by offering strategic marketing solutions and innovative technologies to help them grow their businesses.

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If you are struggling with an agency audit, or a buy back, or a regulatory inquiry, or a demand for indemnification, or a challenge to your compliance program, a short consultation with our legal expert will relieve your stress. He will review your facts and if warranted develop a response for you to defend yourself and your company against these types of problems. Our Expert is a 24 year veteran of the Mortgage Industry. He has ten years of experience as a Legal and Compliance Officer. He is admitted to the California Bar and five Federal Districts. He has managed many situations involving federal or state agency audits. He learned from experience the nuances of agency actions and knows how to defend against such situations. He knows there are two stories to each case, and is objective in his ability to assess your situation.

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StreetLinks Lender Solutions (800) 778-4920 www.streetlinks.com sales@streetlinks.com StreetLinks Lender Solutions provides an innovative and comprehensive suite of valuation and service solutions used by lenders, servicers and appraisers nationwide to improve everyday business operations. StreetLinks industry-leading products include LenderPlus™ full-service appraisal management, LenderX™ lender-executed appraisal management software and SCORe™ appraisal reviews and a series of valuation analysis tools for services. Our commitment to quality and service, embodied by our partnership approach to clients and appraisers, continues to set us apart as the nation’s premier lending solutions partner. For more information, visit www.streetlinks.com.

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

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

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

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United Wholesale Mortgage 800-981-8898 www.uwm.com UWM has a full set of mortgage products to meet all of your lending needs with Conventional, FHA, USDA (Rural Development), VA, Jumbo, HARP 2.0 and DU Refi Plus. With UWM’s ELITE program, you will receive the most aggressive conventional rates and pricing in the industry for your elite borrowers! Discover Lending Made Easy with United Wholesale Mortgage!

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heard on the street continued from page 97

class talent and other resources that Altisource provides.” “Joining Altisource will give Mortgage Builder customers access to more complete and cost-efficient real estate and mortgage lifecycle management solutions,” said Keven M. Smith, chief executive officer of Mortgage Builder. “Altisource’s financial strength and global resources further the Mortgage Builder vision of providing a comprehensive solution for mortgage bankers, banking institutions and credit unions.”

Family First Announces Exclusive Arrangement With SparkTank Media

Orange County, Calif.-based ClearVision Funding (CVF) has announced the open-

RPM Mortgage Inc. has announced that it has acquired Regency Mortgage Corporation, a 14-branch private mortgage lender with operations in New Hampshire, Maine, Massachusetts, Vermont and Florida. The Regency acquisition expands RPM’s regional footprint to the East Coast. RPM’s strength and stability will provide Regency loan originators with access to a larger menu of loan products, in addition to strong technology and compliance support. The combination of the two independent lenders will provide both RPM and Regency loan originators with attractive pricing options for their customers. In 2013 RPM funded $5.9 billion and Regency funded $505 million in residential home loans. Regency will continue to operate under its current brand and its operations will remain local. “Higher compliance costs are an unfortunate reality of today’s mortgage lending environment,” said RPM CEO Rob Hirt. “This creates a challenge for independent mortgage lenders to remain price-competitive and provide quality loan products. The combination of RPM and Regency will enable us to service our respective markets and provide the best possible loans for our customers. Regency is a natural fit for the RPM family, and we look forward to helping homeowners on both the East and West Coasts to meet their financial and real estate goals.” Other similarities of the two independent lenders include the fact that they are both led by their founders. RPM is owned and operated by founders Rob and Tracey Hirt, and Regency is owned and operated by

Mortgage Master Inc. has announced plans to continue to expand its production infrastructure in New York, New Jersey and Connecticut and now has 17 branch offices and nearly 150 loan originators in the important Tri-State market. This strategic expansion is generating significant production growth in these three states, with total annual loan volume increasing over 500 percent to almost $2 billion from $388 million originations over the last five years. This growth is being driven by Mortgage Master’s more than 25 years of mortgage experience, and unique business model, which provides borrowers with the best possible pricing, products and service, and helps loan originators increase production via innovative marketing and shared ideas from some of the top originators in the industry. “We are extremely pleased with our growth in New York, New Jersey and Connecticut, and we are continuing to strategically open new branches and hire top loan originators in these markets to help borrowers while interest rates remain close to record lows,” said Paul Anastos, president of Mortgage Master. “Borrowers are demanding experienced, trusted and caring loan originators to help them navigate the mortgage purchase or refinance process. Mortgage Master’s responsible, supportive and sustainable lending model allows our loan originators to deliver borrowers the best possible pricing and mortgage solution so they can make the right decision.” Mortgage Master’s five New York branches employ 43 loan originators and are located in Manhattan, Brooklyn, Garden City, Rye and Tarrytown. The five New Jersey branches employ 25 loan originators and are located in Hoboken, Fairfield, Cranford, Princeton and Wall. The seven Connecticut branches employ 41 loan originators and are located in Fairfield, Glastonbury, Greenwich, Hamden, Simsbury, Stamford and West Hartford.

ReverseVision Launches New Professional Services Division for Reverse Lenders ReverseVision Inc. has announced the

Rushmore Loan Management to Expand Into Puerto Rico Rushmore Loan Management Services LLC has announced plans to extend its specialty residential loan servicing platform to Puerto Rico. The company will open a new branch in San Juan, Puerto Rico, which will be fully operational by Nov. 1, 2014. According to Rushmore CEO Terry Smith, Rushmore will immediately begin servicing approximately 4,000 residential loans and real estate-owned (REO) properties when the branch office opens in November. The company plans to hire approximately 50-60 new employees in the San Juan office. continued on page 102

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ClearVision Funding Opens Chicago Fulfillment Center

RPM Mortgage Begins East Coast Expansion With Acquisition of Regency Mortgage

Mortgage Master Announces Plans for Continued Northeast Expansion

launch of their Professional Services Division aimed at helping reverse mortgage lenders and brokers to be more successful. The main objective of RV Professional Services is to understand each client’s unique business needs and assist them in attaining their business goals. By recommending best practice methodologies through on-site visits and hands-on training, the team will refine a lender’s processes and discover where improvements can be realized. A key service component will include a careful review to ensure clients are compliant with Consumer Financial Protection Bureau (CFPB) audit requirements. In addition, RV Professional Services is developing enhanced online training materials including self-administered interactive tutorials. ReverseVision has also announced that mortgage industry veteran and the company’s former head of product management, Jeff Birdsell, CMB, will lead the RV Professional Services as vice president. ReverseVision Vice President Rob Katz will be assuming the role of head of product management. Birdsell’s 22-year career in the mortgage industry has been focused on the Home Equity Conversion Mortgage (HECM) and other reverse mortgage proprietary products. Prior to joining RevereVision two years ago, he consulted with Generation Mortgage, provided consulting services for other reverse mortgage software providers and for over a decade held CIO and product development roles with Financial Freedom. “As reverse lending gains momentum, reverse mortgage lenders need a loan origination platform and business automation solution that helps them be more efficient and profitable,” said Birdsell. “RV Exchange is a powerful tool that can be configured to support most reverse lending business models. By working with the majority of reverse mortgage originators, we know that our clients get the most value from our solution when ReverseVision experts configure our platform to support their unique business processes.”

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Toms River, N.J.based mortgage banker Family First Funding LLC has announced an exclusive arrangement with SparkTank Media Founder and CEO Jeff Lobb. This strategic partnership allows Family First Funding to add next-level technology training to their business model, including tools for social media, lead generation, digital and video marketing, online reputation, overall marketing and individualized Realtor training and coaching. “Bringing Jeff Lobb to our partner branches will offer an exciting opportunity to open doors to new business, as well as solidify existing relationships,” said Family First Funding Executive Business Director Thomas Sirico. Family First Funding is excited to bring this unique and valuable opportunity to both their mortgage loan officers and real estate partners, as technology has rapidly entered into the industry and continues to evolve. “This is a great opportunity to bring a valuable asset to Family First’s Real Estate partners by delivering real estate technology and marketing, training and coaching in both on-demand video and live coaching to increase agent and broker productivity and to generate more transactions,” said Lobb. “We are always looking to bring added value to our real estate broker/owners,” said President Gabriel Gillen. “These offices will stand out from their competitors as we provide SparkTank Media’s combined services. This program will certainly enhance the level of service that their agents will be able to provide to their customers, as well as a valuable tool in recruiting new agents.”

ing of its Chicago, Illinois Fulfillment Center. CVF has increased its loan fundings by $1 billion during the first six months of 2014 and is projecting to total over $7 billion in closed loans by the end of 2015. The new Fulfillment Center will support the company’s growth trajectory and help ensure enhanced service levels to the Midwest and Northeast brokers with which it does business. “In the early years of CVF, our model has been to establish early profitability, and maintain that while experiencing controlled growth. That same commitment to wholesale lending and sound investment holds true today. Since inception, CVF has continued to achieve profitable growth and has broken record fundings month-over-month,” said Jeremy Stewart, executive vice president of ClearVision Funding.

founders Quentin Keefe and Maureen Lemay. Keefe and Lemay will continue in their present positions. “RPM believes as we do, that if you hire great people and create an environment that empowers and respects them, good things will follow,” said Keefe. “RPM’s financial strength will afford us the opportunity to continue to grow our brand throughout New England and provide a quality place of employment for our employees.”

announced the hiring of Doug Reilly as the corporation’s president.

heard on the street continued from page 101

OCTOBER 2014 n National Mortgage Professional Magazine n

l Birchwood Credit Services Inc. has announced that John Shea has joined the company as senior vice president of sales and marketing.

ADAM

CHARLSON

l Stearns Lending LLC has announced that John Adam has joined the company as executive vice president, national head of retail lending.

l Inlanta Mortgage Inc. has announced the addition of Senior Mortgage Advisor Penny Charlson to the firm’s Oconomowoc, Wis. office.

Mortgage Professionals to Watch SATHER

Corcoran Consulting and Coaching has announced that it has teamed up with Equator, a provider of default servicing technologies. Corcoran Consulting & Coaching will be offering complimentary monthly educational Webinars to Equator’s 481,000 registered agents. “We are honored to be in collaboration with Equator as we continue to provide value-added services to real estate professionals in the REO and short sale industries,” said Bubba Mills, executive vice president of Corcoran Consulting and Coaching. “I’ve known Bubba for years and have had the pleasure of speaking on conference panels with him back in our days of REO Asset Management. Bubba has coached hundreds of agents in the Multiple Pillar business model with the slowdown of REO and Short Sales,” said Mia Semo, manager, agent relationship at Equator. “Bubba’s insight into the life of an asset manager is very real and he tells you what your asset manager won’t. His boldness and straightforwardness adds a refreshing twist to the learning and coaching environment.” “We are pleased to invite Bubba Mills as a guest for some of our upcoming Webinars. Bubba’s ties to the agent community, history in the servicing environment, long time use of Equator and experience as a coach with Corcoran Consulting & Coaching provide him with insight and perspective that attendees will find valuable to their business,” said Ashley Bean, director of real estate operations at Equator.

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AmeriSave Mortgage Corporation has issued a Letter of Intent to CertusBank NA to acquire a large portion of its mortgage division, including the majority of its team and facilities. AmeriSave has been seeking a strong mortgage originator for possible acquisition, and this agreement will allow the company to expand its footprint by establishing a traditional retail mortgage origination channel to complement its online origination platform. CertusBank, headquartered in Greenville, S.C., has recently undergone a strategic transition toward a more traditional community banking business model and identified mortgage as an area with opportunity for significant changes. “AmeriSave is excited to partner with a very experienced group of mortgage professionals who we truly believe will excel under the same business model we have had in place for many years and which allows us to enter the only remaining segment of the mortgage business we have previously had no presence,” said Ed Abufaris, president of AmeriSave.

l United Wholesale Mortgage (UWM) announced that Laura Lawson has been promoted to the newly created position of chief people officer (CPO).

YONEMURA

Corcoran Consulting Partners With Equator for Monthly Webinars

AmeriSave to Acquire CertusBank’s Mortgage Division

l REMN Wholesale is continuing its nationwide expansion with the addition of Brandi Yonemura in the role of regional account executive for the state of Hawaii.

REILLY

“Rushmore believes that servicing local residential loans in Puerto Rico with local staff is the right strategy for the company and our Puerto Rican borrowers,” Smith said. “Investing in local talent and growing our operation on the island supports our commitment to continued investments in the Puerto Rican marketplace.” Smith says Rushmore is already looking for talented individuals with mortgage servicing experience to join the company. “We have begun hiring and will continue to hire professionals who want to enhance their career and work with an industry leading company,” Smith said. “We plan to grow the Puerto Rico branch alongside our Dallas and Irvine offices by acquiring additional mortgage portfolios, onboarding new subservicing residential loan pools and purchasing mortgage servicing rights (MSRs).”

SHEA

l FFC Mortgage Corporation has

l Inlanta Mortgage Inc. announced it has opened a new branch office in Minneapolis, Minn. to be managed by veteran loan originator and manager Jerry Sather. l LenderLive Network Inc. has announced that Charlie Kent has joined the firm as vice president of national sales for the company’s Settlement Services Division. l American Financial Resources Inc. (AFR) has announced the hiring of Richard C. Rice as regional sales manager. l HomeBridge Financial Services Inc. has continued its expansion with the addition of experienced mortgage loan originators in key growth markets nationwide: Cheryl Farley in Burlington, Vt.; David Joyce in Orlando, Fla.; Linda Reed in Centennial, Colo.; LoAnn Rissler in Centennial, Colo.; Lori Emch in Centennial, Colo.; Michael Collins in Phoenix, Ariz.; Raleigh Erickson in Irvine, Calif.; Terri Gunderson in Bellingham, Wash.; and Tonnye Stapp in Peachtree City, Ga. l GSF Mortgage has announced the addition of new branch manager April Girard in Keokuk, Iowa. GSF

has also announced the addition of Vernette Nathan as branch manager in Chesapeake, Va. Wolters Kluwer Legal & Regulatory Solutions announced the appointment of Gregory Samios as president and CEO of Wolters Kluwer Law & Business. Stonegate Mortgage Corporation has announced that Dwayne Cook has been appointed to the role of senior vice president of loan originations finance and strategy, to develop corporate financial planning activities for all loan origination. Pro Teck Valuation Services has announced that Arny Epstein has joined its Strategic Advisory Board. VantageScore Solutions LLC has announced the hiring of Mike Trapanese as senior vice president of strategic planning and strategic alliances. The Wholesale Lending Division of Carrington Mortgage Services LLC has announced that it has appointed David Grosteffon as divisional sales manager for strategic accounts. LRES has promoted Yvonne Thompson to the position of vice president of human resources. LRES has also announced the addition of Emeka Madu as its new manager of compliance. Federal Housing Finance Agency (FHFA) Director Mel Watt has announced the appointment of Nina Nichols as Deputy Director of the FHFA Division of Enterprise Regulation. Norcom Mortgage has announced another branch opening in the state of Connecticut, located in New Milford, Conn., to be led by branch manager Bill Granata. Churchill Mortgage has announced that Doug Walker has been promoted to vice president of national sales support and business development. Churchill has also announced Jay McCarthy as its new chief marketing officer, where he will lead the continued development of its messaging and communication strategies across traditional and emerging digital channels.

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

calendar of events N A T I O N A L

OCTOBER 2014

Tuesday, October 14

National Association of Professional Mortgage Women (NAPMW) Austin Presents “Paige Omohundro/TSAHC Finance Manager” Norris Conference Center 2525 West Anderson Lane Austin, Texas For more information, call (325) 262-9091 or visit www.napmwatx.org.

Tuesday, October 14

Wednesday, October 15

Wednesday, October 22

2014 Mortgage Professionals of Iowa Annual Convention Stony Creek Inn 5291 Stoney Creek Court Johnston, Iowa For information, call (800) 462-0077 or visit www.impoi.wildapricot.org.

National Association of Professional Mortgage Women (NAPMW) Phoenix: October General Meeting Hopdaddy Burger Bar 11055 North Scottsdale Road Scottsdale, Ariz. For more information, visit www.napmw.org.

Wednesday-Saturday, October 15-18 American Land Title Association (ALTA) 2014 Annual Convention The Westin Seattle 1900 5th Avenue Seattle, Wash. For more information, call (202) 296-3671 or visit www.alta.org.

Thursday-Friday, October 16-17 Virginia Association of Mortgage Brokers (VAMB) 26th Annual Convention Hilton Garden Inn Richmond Innsbrook 4050 Cox Road Glen Allen, Va. For information, call (804) 285-7557 or visit www.vamb.org.

Sunday-Wednesday, October 19-22 MBA’s 101st Annual Convention & Expo Mandalay Bay Hotel & Casino 3950 South Las Vegas Boulevard Las Vegas For more information, call (800) 793-6222 or visit www.mortgagebankers.org.

Tuesday-Thursday, October 14-16

Tuesday, October 21

2014 Northeast Conference of Mortgage Brokers Trump Taj Mahal Casino Resort 1000 Boardwalk Atlantic City, N.J. For more information, call (732) 596-1619 or visit www.mbanj.com.

National Association of Professional Mortgage Women (NAPMW) Atlanta October Meeting Capital Grille 94 Perimeter Center West Atlanta For more information, e-mail atlanta@napmw.org or visit www.napmw.org.

Monday-Wednesday, November 10-12

National Reverse Mortgage Lenders Association 2014 Annual Meeting & Expo Loew’s Miami Beach Hotel 1601 Collins Avenue Miami Beach, Fla. For more information, call (202) 939-1760 or visit www.nrmlaonline.org.

Thursday, October 23 National Association of Professional Mortgage Women (NAPMW) Houston: Annual Halloween Bowling Bash Dave and Busters 7620 Katy Freeway, #100 Houston, Texas For more information, call (281) 543-5834, e-mail hcox@cmgfi.com or visit www.napmw.org.

Monday-Wednesday, October 27-29 National Association of Women in Real Estate Businesses (NAWRB) 2014 Inaugural Conference Hyatt Regency Long Beach 200 South Pine Avenue Long Beach, Calif. For more information, call (949) 559-9800 or e-mail info@nawrb.com. NOVEMBER 2014

Monday, November 3 New York Association of Mortgage Professionals 26th Annual Convention The Melville Marriott 1350 Walt Whitman Road Melville, N.Y. For more information, e-mail etella@optonline.net or visit www.nyamb.org.

Wednesday, November 19 New Jersey Bankers Association and the Mortgage Bankers Association of New Jersey 2014 Joint Mortgage Lending Conference Crowne Plaza Monroe 390 Forsgate Drive Monroe Township, N.J. For more information, call (732) 596-7642, e-mail dmaki@mbanj.com or visit www.mbanj.com.

Wednesday-Friday, November 19-21 Mortgage Bankers Association’s (MBA) Accounting and Financial Management Conference 2014 Westin St. Francis 335 Powell Street San Francisco, Calif. For more information, call (800) 793-6222 or visit www.mortgagebankers.org. FEBRUARY 2015

Tuesday, February 17 Florida Association of Mortgage Professionals (FAMP) Broward Chapter 2015 Annual Trade Show Bonaventure Resort Conference Center and Spa 250 Racquet Club Road Weston, Fla. For more information, call (954) 986-0808 or e-mail admin@browardfamp.org. MARCH 2015

Sunday-Thursday, March 8-12

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

32nd Annual Regional Conference of MBAs Trump Taj Mahal Casino Resort 1000 Boardwalk Atlantic City, N.J. For more information, call (732) 596-1619 or visit www.mbanj.com.

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National Association of Professional Mortgage Women (NAPMW) The Columbia River: October Dinner Meeting South Pacific Restaurant & Bar 1109 Washington Street Vancouver, Wash. For more information, call (360) 713-9264, e-mail bill.sanderson@stewart.com or visit www.napmw.org.

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

NationalMortgageProfessional.com

National Association of Professional Mortgage Women (NAPMW) Central New York: The Realtor Perspective-Today’s Housing Market Ramada Inn 2310 North Triphammer Ithaca, N.Y. For more information, call (607) 387-7331, e-mail cny@napmw.org or visit www.napmw.org.

M O R T G A G E

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